MIRA INFORM REPORT

Report Date :

08.06.2007

IDENTIFICATION DETAILS

Name :	OCL INDIA LIMITED
Registered Office :	Rajgangpur, Sundargarh – 770017, Orissa,
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	11.10.1949
Com. Reg. No.:	185
TAN No.: [Tax Deduction & Collection Account No.]	CALO00890B
PAN No.: [Permanent Account No.]	AAACP1354J
Legal Form :	Public Limited Liability Company. The company's shares are listed on the Stock Exchanges.
Line of Business :	Manufacturing and Sale of Refractories of Basic, Silica & High Alumina Quality, Mag Carbox, Castable, Precast & CC Refractories, Portland & Slag Cement and also engaged in Furnace Refractory Maintenance.

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large

Maximum Credit Limit :	USD 9000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established company having satisfactory track. Directors are experienced, respectable and having satisfactory means of their own. Their trade relations are fair. Financial position is good. Payments are usually correct and as per commitments. The company can be considered good for normal business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	Rajgangpur, Sundargarh District – 770 017, Orissa, India.
Tel. No.:	91-661-24221212/ 24220121 (4 Lines)
Fax No.:	91-661-24220133/ 24220933
E-Mail :	1. oclrpg@cal.vsnl.net.in 2. skjain@oclindia.com 3. sunilkumar@oclindia.com
Website :	http://www.oclindia.com
Plant:	Refractory and cement plant Rajgangpur, Sundargarh District - 770 017, Orissa, India
Location :
Branches :	v B-47, Narain Manzil, 11^th Floor, 23, Barakhamba Road, Connaught Place, New Delhi – 110 001, India Tel. No. 91-11-23321177/ 23321212/23321248/ 23329699 Fax No. 91-11-23325854/ 23731333 v Stephen House, 4, BBD Bagh (East), Kolkata – 700 001, West Bengal, India Tel. No. 91-33-22214440 (5 lines) Fax No. 91-33-22022393

DIRECTORS

Name :	Mr. Pradip Kumar Khaitan
Designation :	Chairman
Name :	Mr. M. H. Dalmia
Designation :	President
Name :	Mr. R. H. Dalmia
Designation :	Jr. President
Name :	Mr. Gaurav Dalmia
Designation :	Vice President
Name :	Mr. V. D. Jhunjhunwala
Designation :	Director
Name :	Mr. S. S. Bhatia
Designation :	Director
Name :	Mr. N C Gupta
Designation :	Nominee Director (GIC)
Name :	Mr. R C Pandey
Designation :	Nominee Director (IFCI)
Name :	Mr. D. N. Davar
Designation :	Director
Name :	Dr. S R Jain
Designation :	Director
Name :	Mr. H. V. Lodha
Designation :	Director
Name :	Mr. V. P. Sood
Designation :	Wholetime Director and Chief Executive Officer
Name :	Mr. M L Chand
Designation :	Wholetime Director
Name :	Mr. Ramesh C. Vaish
Designation :	Director

KEY EXECUTIVES

Name :	Mr. Amitav Ganguly
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Category	No. of Shares
Resident Individual	31009522
Financial Institutions	138775
Foreign Institutional Investors	4800
Foreign Nationals	18580
Non Resident Indians	70968
Bodies Corporate	3466298
Clearing Member	622558
Mutual Fund	3165282
Trusts	45830
Banks	172280
Overseas Corporate Body	29170
Total	38183760

BUSINESS DETAILS

Line of Business :	Manufacturing and Sale of Refractories of Basic, Silica & High Alumina Quality, Mag Carbox, Castable, Precast & CC Refractories, Portland & Slag Cement and also engaged in Furnace Refractory Maintenance.
Products :	v Silica Refractories for coke ovens, High Temperature Blast Furnace Stoves and Glass Industries. v Basic Refractories. v Bricsk and Shapes for Blast Furnace hot stoves v Bricks and Shapes for Glass v Specific Refractories v Silica Refractories for Blast furnace stove
Exports to:	Brazil, China, Japan, Korea, Netherlands, South Africa and UK.
Imports from:	Brazil, China, France and Germany
Terms :
Purchasing :	L/C and credit

PRODUCTION STATUS

Particulars	Installed Capacity	Actual Production
Cement	18.00	15.83
Refractories	0.80	0.60
Sponge Iron	1.20	1.05

GENERAL INFORMATION

No. of Employees :

1513

Bankers :

v United Bank of India, Rajgangpur, Orissa

v Punjab National Bank, Rajgangpur, Orissa

v State Bank of India, Rajgangpur, Orissa

v UCO Bank, Rajgangpur, Orissa

v UTI Bank Limited

Facilities :

	31.03.2006 Rs. in millions
SECURED LOANS
Loans from Banks
A] Term Loans	2118.635
B] Working Capital Facilities	968.672
Debentures
7.75% Secured Redeemable Non-Convertible Debentures	300.000
TOTAL	3387.307
NOTE :- 1] Term loans from Banks are secured by way of equitable mortgage of immovable properties of Cement and Sponge Iron Divisions of the Company situated at Rajgangpur and hypothecation of all the movable assets of these units save and except the prior charge in favour of Banks over inventories and book debts to secure working capital limits, in certain cases, Banks have exclusive charge on the movable fixed assets acquired out of their loans. 2) Working capital facilities are secured by hypothecation of raw material, semi-finished goods, stock-in-process, consumable stores and book debts of the Company. These facilities are further secured by second charge over the fixed assets of the Cement unit of the Company. 3) The debentures are secured by equitable mortgage of immovable properties of Refractory Division oi the Company and hypothecation of movable assets of this division save and except the prior charge in favour of Banks over inventories and book debts lo secure working capital limits.

Unsecured Loans

31.03.2006

Rs. in Millions

Fixed Deposits

Short Term Loan from Bank

Loan from Other Companies

Commercial paper (short Term loan)

Sales Tax deferment Loan – Interest Free

Total

99.347

0.000

200.075

380.000

117.011

796.433

Banking Relations :	Good
Auditors :
Name :	V. Sankar Aiyar and Company Chartered Accountants
Membership:	Confederation of Indian Industry
Collaborators :	v Plibrico SA, France v TYK Corporation, Japan v Tokyo Yogyo Company Limited, Japan
Associates/Subsidiaries :	v Konark Minerals Limited. v Kashmissa Industries Limited. v Hari Fertilizers Limited v Telecom Services India Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
100000	Ordinary Shares	Rs. 100.00 each	Rs. 10.000 millions
70000000	Ordinary Shares	Rs. 2.00 each	Rs. 140.000
	Total		Rs. 150.000 millions

Issued Capital:

No. of Shares	Type	Value	Amount
44915345	Ordinary Shares	Rs. 100.00 each	Rs. 89.831 Millions

Subscribed & Paid-up Capital:

No. of Shares	Type	Value	Amount
38183760	Ordinary Shares	Rs. 100.00 each	Rs. 76.367 millions
	Add: Forfeited Shares Account		Rs. 0.050 million
	Total		Rs. 76.417 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2006	31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital		76.417	59.411	59.409
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		2175.945	1685.321	1442.223
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		2252.362	1744.732	1501.632
LOAN FUNDS
1] Secured Loans		3387.307	2465.701	1261.185
2] Unsecured Loans		796.433	899.843	736.686
TOTAL BORROWING		4183.740	3365.544	1997.871
DEFERRED TAX LIABILITIES		623.953	492.921	418.621
TOTAL		7060.055	5603.197	3918.124
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		3586.768	2706.071	2202.488
Capital work-in-progress		1066.723	976.088	297.084
INVESTMENT		6.311	6.572	6.572
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	118.21.2	1015.117	1005.707
	Sundry Debtors	891.777	867.517	807.862
	Cash & Bank Balances	342.924	147.923	137.064
	Other Current Assets	57.328	9.359	0.174
	Loans & Advances	922.246	695.784	348.006
Total Current Assets		3396.447	2735.700	2298.813
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	921.150	748.030	774.959
	Provisions	75.044	73.204	111.874
Total Current Liabilities		996.194	821.234	886.833
Net Current Assets		2400.253	1914.466	1411.980
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		7060.055	5603.197	3918.124

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
Sales Turnover		5971.185	4860.100	3945.641
Other Income		109.294	58.577	0.000
Increase / (Decrease) in stocks		47.896	(67.515)	0.000
Total Income		6128.375	4851.162	3945.641
Profit/(Loss) Before Tax		555.708	365.885	241.195
Provision for Taxation		177.782	84.231	57.918
Profit/(Loss) After Tax		377.926	281.654	183.277
Earnings in Foreign Currency :
	Export Earnings	256.118	166.059	NA
	Professional Fees	0.000	0.000	NA
	Other Earnings	0.030	0.010	NA
Total Earnings		256.150	1.660	57.516
Imports :
	Raw Materials	2187.099	1830.458	NA
	Stores & Spares	275.195	218.031	NA
	Capital Goods	0.000	0.000	NA
	Others	0.000	0.000	NA
Total Imports		2462.294	2048.489	310.291
Expenditures :
	Raw Materials Consumed	2187.099	1830.458	NA
	Purchases	69.410	151.816	NA
	Salaries, Wages and Benefits to Employees	245.584	229.535	NA
	Power and Fuel	869.498	701.923	NA
	Other Expenses	1797.145	1220.573	NA
	Interest	133.49.500	129.576	NA
	Depreciation	270.436	221.396	NA
Total Expenditure		5572.667	4485.277	3508.908

SUMMARISED RESULTS

PARTICULARS	2007 (Full Year)
Sales Turnover	8082.600
Other Income	154.500
Total Income	8237.100
Total Expenditure	6481.200
Operating Profit	1755.900
Interest	250.600
Gross Profit	1505.300
Depreciation	329.600
Tax	254.500
Reported PAT	775.200
Dividend	100.00

KEY RATIOS

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
Debt – Equity Ratio		1.93	1.70	1.30
Long Term Debt-Equity Ratio		1.12	0.86	0.61
Current Ratio		1.01	0.96	0.98
TURNOVER RATIO
Fixed Assets		1.24	1.21	1.08
Inventory		6.38	5.64	5.11
Debtors		7.97	6.80	5.93
Interest cover Ratio		3.35	3.34	3.90
Operating Profit Ratio	(%)	15.16	13.05	16.42
Profit Before Interest and Tax Margin	(%)	11.30	9.16	12.08
Cash Profit Margin	(%)	9.25	8.83	10.14
Adjusted Net Profit Margin	(%)	5.39	4.94	5.80
Return on Capital Employed	(%)	13.82	12.26	16.89
Return on Net Worth	(%)	19.31	17.83	18.52

STOCK PRICES

Face Value	Rs. 100.00
High	Rs. 146.20
Low	Rs. 146.20

LOCAL AGENCY FURTHER INFORMATION

History:

The company was incorporated on 11^th October, 1949 having Company Registration Number 185.

It was originally incorporated under the name & style of Orissa Cement Limited and obtained the Certificate of Commencement of Business on 10^th February 1950. The company subsequently changed its' name to OCL India Limited.

The company is the manufacturer of the Konark brand Dalmia Portland slag cement. It is very highly diversified company. It's product portfolio includes cement, refractories, soda ash and ammonium chloride. However, cement and refractories continue to be mainstay of its operations. It switched over production from the wet to the dry process to overcome pollution problems as part of its modernization and expansion programme in 1991-92.

The company is well known for the manufacture of sophisticated world-class refractories and has earned laurels for its high-tech new-generation refractories. The unit, which came into existence in 1956, has an installed capacity of 0.141 million tpa of various refractories. In the past, the company had manufactured a special kind of alumina carbon ladle shroud, an import substitute, which enables it to produce clean steel. The company received the Best Import Substitute award in 1992 in the 52^nd All-India Industrial Exhibition held at Hyderabad.

The company has been awarded the ISO 9001 certification for its silica products, Production of continuous casting refractories and new-generation castables and pre-cast blocks set up in a separate section, both in technical collaboration with TYK Corporation, Japan, commenced in 1994-95. It exports to the USA, Australia, Latin America and Africa.

During the year 1996-97, the company received ISO 9001 certification for its magnesia carbon bricks, basic refractories, monolithics and slide gate refractories. The company also made good progress in marketing of its monolithics range of products like castables, Precast seating blocks, rinsing lance, etc. manufactured in technical collaboration with TYK, Japan.

The company had entered into a Memorandum of Understanding (MOU) with Steel Authority of India Limited (SAIL) for supply of substantial quantities of refractory. Company has upgraded its products range & set up facilities for manufacture of purging elements. Company has introduced new high tech products as an import substitute & technical support for these products has been taken from M/S. PLIBRICO Germany. Company received Special Export Award for 1997-98, consecutively for 4^th year by CAPEXIL for good performance in export. The company has the distinction of being the first refractory manufacturer to have ISO 9001 certificate for the widest range of refractories in the country.

Business:

The company is engaged in manufacturing and sale of refractories of basic, silica & high alumina quality, mag Carbox, Castable, Precast & CC refractories, Portland & slag cement and also engaged in furnace refractory maintenance.

The company has a division under the name and style of Orissa Overseas engaged in the business of export of general merchandise. In 1980, the company had acquired a plant engaged in the manufacture of Soda Ash and Ammonium Chloride at Sahupuri, Uttar Pradesh and operated under the name & style of Hari Fertilizers.

CEMENT DIVISION:

The cement production and sales have registered 17% growth over previous year. This could be achieved due to overall growth in demand of Cement in our region.

Cement production and sales during the year under report are given below along with comparative figures for previous year.

	2005 -06 (Tonnes in millions)	2004- 05 (Tonnes in millions)
Cement production	1.583	1.351
Cement Sales (including Self Consumption)	1.575	1.348

The value of cement and clinker sales for the year 2005-06 and 2004-05 (inclusive of excise duty) are Rs. 3834.800 millions and Rs.3011.200 millions, respectively.

The outlook for cement continues to be bright in view of the higher cumulative average growth rate (CAGR) in eastern market, thrust given to development of infrastructure, roads, reconstruction activities and continuance of incentives to housing sector. The Union Budget - 2006 has further given emphasis on building of infrastructure.

During the Financial Year 2005-06, availability of trucks for road transport was more or less same as that of last year due to high industrial growth in the Eastern Zone. Cement division had to fall back more on railway transport. Your Company has been able to get a minimum guaranteed clearance of 1, 00,418 tonnes per month from Railways under "Own Your Own Wagon Scheme".

Modernization cum expansion programme to upgrade the Linearization stream as envisaged has been completed, and the capacity for manufacture of clinker has increased to 1.2 million tonnes per annum from the 0.7 million tonnes per annum. The cement grinding capacity has increased to 1.80 million tonnes per annum from 1.45 million tonnes per annum with the commissioning of CVRM -III during the Year 2005-06. The Company is also proposing to put up a stand alone Grinding Unit for cement grinding at Kapilas Road near Cuttack to take the advantage of being nearer to Cement consuming centers and source of raw material, i.e., granulated blast furnace slag from existing as well as up coming steel plants in the vicinity of the proposed site. Further, looking into the growth of cement industry in near future, the linearization capacity is also proposed to be enhanced by adding one line with the capacity of 1.70 million tonnes per annum. After successful commissioning of both the proposals, the overall cement installed capacity will stand increased to 3.8 million tonnes from 1.8 million tonnes in the next 2-3 years.

REFRACTORY DIVISION:

During the Financial Year 2005-2006, the Company has achieved total sales of Rs. 2159.500 millions as compared to Rs.1647.400 millions in the Financial Year 2004-05. The turnover is higher by 31% over last year and quantity is higher by 15%.

The Company is continuing its focus on different value added products, i.e., Concast, Precast, Castable, and Slide Gate and Basic Direct Bonded bricks for Copper Industries.

Steel industry in India is looking up. Existing plants are taking up expansion plans and some new plants are also coming up. As per forecast, steel production and consumption in India would touch 60 million tonnes by the year 2010. The trend in steel industry continues to be good and it is expected that the steel industry would continue to grow in the next 2 to 3 years. The Company is taking steps to meet the demand of refractories and it has taken up the expansion of Concast products from its present production capacity of 1000 tonnes to 2000 tonnes per annum and it is expected that the expansion plan would be completed by November 2006. The Company has also taken up expansion of slide gate product from 1000 tonnes to 2000 tonnes and it will be in place by July 2006. The company has also set up manufacturing facility for High Alumina Cement with a capacity of 10 TPD. This will be in operation during June 2006.

Apart from steel industries, the Company has focused on non-ferrous industry like Copper, Aluminium, Petrochemical & Fertilizer, etc., sector and is taking steps to maintain its position in it.

3.4 On export front, the Company has recorded 23% increase in value of sales. In the year 2005-06, total exports achieved was of Rs. 202.600 millions (5,490 MT) as against Rs.164.9 millions (5,229 MT) of the previous year. In spite of stiff competition from China and aggressive marketing by European manufacturers who enjoy product preference from their traditional customers, the Company could achieve these increased export sales. The Company has made good entry in Italy, Iran, Turkey, Bangladesh, Nigeria with both CC and slide gate products and these products are receiving good response due to its quality. The Company has also got its first trial order from Chile, the largest manufacturer of copper in the world.

The Company holds ISO 9001 (2000 version) certificate from RWTUV, Germany for its full range of Refractories

SPONGE IRON WORKS:

During the year the plant produced 1, 05,065 MT of sponge iron and sold 1, 04,421 MT valuing Rs. 1000.000 millions. The Company has signed an MOD with the Government of Orissa to set up facilities for manufacture of 2,50,000 MT per annum of finished value added steel in the district of Sundargarh (Orissa) with an estimated investment of Rs.2040.000 millions. In line with MOU, the Company has already initiated actions to implement a captive power generation project to initially produce 14 MW of power, partly on co-generation basis and partly on thermal power generation route and also manufacture 85,000 MT per annum of steel billets. The new projects will come into operation within next few months.

SUBDIVISON OF SHARE CAPITAL:

During the year the Company sub-divided the existing ordinary shares of Rs. 10/-each into 5 ordinary shares having face value of Rs.2/- each to increase the liquidity in shares trading on the stock exchanges and to make the shares of the Company affordable to small investors. During the year the warrant holders were given an option to exercise their rights to subscribe for equity shares as per the terms and conditions of right issue. As a result of sub-division, 85, 03,290 shares of Rs.2/- each were allotted to warrant holders on exercise of rights attached to the detachable warrants issued to them. Accordingly, the number of ordinary shares increased from 2, 96, 80,470 to 3, 81, and 83,760. The Company has submitted its draft letter of offer to SEBI for approval in connection with rights issue approved by the shareholders at the Annual General Meeting held on 25th June 2005.

MANAGEMENT DISCUSSION AND ANALYSIS:

CEMENT

INDUSTRYSTRUCTURE.DEVELOPMENTSANDOUTLOOK:

The installed capacity on all India bases has grown this year by 5 million tonnes to 157 million tonnes which is around 4 percent whereas growth in demand has been 9%. Since new clinkering capacity is not in sight, industry is using more and more additives to increase production. With the rising demand of cement due to major investment in infrastructure, road and housing projects Indian cement market has become centre of attraction of global players. The consolidation of cement units which started few years back, witnessed large acquisition by Grasim and Holcim. This process of consolidation will help improving realization further. As reported demand growth forecast in our last review, demand of cement in Eastern Region had been robust and is also likely to remain same in the coming year as well.

Opportunities:

With the Eastern region recording robust growth of around 14 per cent as against the all India growth of 9 per cent the company is taking steps in putting up new grinding capacity as well as enhancing the clinkering capacity of the plant. With the increase in production of steel, the availability of slag is likely to be more and it is hoped that prices of slag will gradually come down. The process has already started and yielding result. We have been benefited by getting slag prices reduced substantially in supply from Rourkela Steel Plant and other nearby small steel manufacturers who have also offered lower rates. This has also led to scope of examining the putting up of new grinding capacity nearer to the source of availability of slag and the market. The company has chosen Kapilas Road, Cuttack to put up a grinding unit keeping above in mind. Oil Well cement has been successfully supplied in the north- east and efforts are on to establish contact with other consumers to get further break through. The company has been able to secure allotment of Coal Block at Radhikapur (West) Block in MCL area as one of the joint allocates of the captive coal block having an extractable reserves of 210 Million Tonnes of coal. Proportionate allocation of coal to the Company works out to 30.92 Million Tonnes and the Company expects that this will have a positive impact on the cost of production in near future.

Risks and concerns:

With the likely increase in grinding capacity of cement in West Bengal during the period 2006-07, the movement of cement from other regions to West Bengal will be adversely effected.

Regional imbalances in terms of production, new capacity additions and rate of growth in consumption are gradually reducing leading to less volatility in the cement prices. Recently, cement prices have improved vastly due to less supply than the demand and this trend is likely to continue till new capacities are added up. Cement realizations are likely to remain firm in the current as well as next year or so.

REFRACTORY

INDUSTRY STRUCTURE, DEVELOPMENT & OUTLOOK:

World over and in India, steel industry accounts for about 70% of the total refractories consumption. The other user industries are copper, aluminium, glass, petro-chemicals, etc. Currently the steel industry is on the upswing both as regards volume and price the steel sector has gone for modernization and has also taken various measures to increase its cost efficiency. As per Govt. forecasts, the steel production in the country is estimated to increase to 60 million tonnes by 2010. To cater to this demand the steel industry has ambitious growth plans both brown field and green field. These and the improving performance of the other user industries have put the refractory industry on a recovery path. The outlook for the refractory industry as a result has improved considerably.

Opportunities:

The year under review was a good year for Silica refractories. Since almost all the steel plants have plans for rebuilding /revamping their coke oven batteries and also due to the coming up of green field projects, the demand for Silica refractories is expected to remain buoyant in the coming years. The company has improved its competitiveness in other industries by continuous R&D. The performances of its products are at par with the best in the industry. Because of this the company expects improved business share .The results in the new areas like copper and petro-chemicals are very encouraging and should continue to do well. The company has started to offer complete refractory solution to customers, which is the future trend. The company enjoys advantage in this area due to its full product range excellent quality and reliability. Silica refractories of the company are already well established in the overseas market. In the year under review inroads have been made in other high value products like Concast and slide gate refractories in markets like Italy, Turkey, Iran, UK etc. The performance of these products is excellent and repeat orders have been bagged in many cases. These will continue to be focus areas for further exponential growth in the future. The company is implementing capacity additions in these areas,

This will be completed in the coming year.

Risks and concerns:

Imports from China pose a major threat to the Indian refractory industry. This is particularly severe in Magnesia Carbon and Silica refractories. In the last budget Govt. of India has corrected the anomaly in the inverted duty structure of raw materials and finished goods which have given some relief to the Indian industry.

The increasing cost of raw materials particularly magnesite and alumina based materials is a cause for concern. The company has to depend on imports for these items since there is no indigenous source for these materials.

The company has already taken steps through in-house R&D to reduce costs and improve product performance. This will continue to be a focus area in the current year also.

AWARDS & RECOGNITION

TQM Awards and Recognition won and recognized during the financial year 2005-06 are given below.

Sl. No.	Name of Convention	Team	Achievement / Award
1	All Orissa QC Convention, Nalco (AOQCC – 2005)	BIBEK	Runners Trophy
2	Chapter QC Convention, Rourkela (CC QC – 2005)	KAMYAB	Excellent Presentation Award
3	National QC Convention, Ernakulam (NC QC – 2005)	KAMYAB	Excellent Presentation Award
4	International QC Convention, Changwon, South Korea (ICQCC – 2005)	KAMYAB	Appreciation for participation

This is the third occasion during last five years when our QC team of Cement Division had won excellent presentation award in national convention and was sent to participate in international convention to appreciate quality improvement activities from within grass root level in the organization. This is shining example of "Total Quality Management" culture. TQM Awards and Recognition won and recognized during the financial year 2005-06 are given below.

• ADITYA from Laboratory was declared Per Excellence in CCQC organized by CCQC ROURKELA during September'2005, in a state level competition.

» ANESWENA from Kiln Maintenance was declared Per Excellence in CCQC organized by CCQC ROURKELA during September'2005, in a state level competition.

» ADITYA from Laboratory was declared Meritorious in NCQC organized by NCQC ERNAQULAM during December'2005, in a National level competition.

• ANESWENA from Kiln Maintenance was declared Meritorious in NCQC organized by NCQC ERNAQULAM during December'2005, in a National level competition.

SPONGE IRON

INDUSTRY STRUCTURE, DEVELOPMENTS AND OUTLOOK:

The Sponge iron has been gaining increased importance as a supplement to scrap in the production of low residual steels due to low availability of good quality scrap in the country. The main factors affecting the demand for Sponge iron are:

a) Though India is 9th largest producer of steel in the world, the per capita consumption of steel stands at 29 kg

Compared to the world average of 140 kg. With the planed growth of GDP at 8% in coming years, the requirement of steel in the country is expected to increase rapidly. Since DRI route contributes significantly towards manufacturing of steel in India, demand of sponge iron will also increase with the growth of steel.

b) Low availability of good quality scrap on a consistent basis.

c) The volatility of scrap prices.

d) Quality metallic requirement for the production of low residual steel.

Opportunities

Proximity to source of Raw materials:

a) Sponge iron grade iron ores are available in close proximity.

b) Proximity to the coalfields of IB Valley and other coal mining areas.

c) Metallurgical grade dolomite is available from the mines near Rourkela

.

Risks and Concerns

a) The demand for Sponge iron is linked to the growth in demand of steel.

b) The National Steel Policy just announced has projected the domestic finished steel production to 100 million

Tonnes by 2020. Thus the projected demand of high-grade iron ore will be at 180 million tonnes by the year 2020.

Presently, the production of iron ore in India is around 141 million tonnes (2004-05) only. Therefore, unless the

Ministry of Steel plans for stepping up the production of iron ore by opening new mines or converting remaining

Resources into reserves by undertaking beneficiation of low-grade iron ores, there will be a short fall of sponge

Iron grade iron ore.

c) Change in the policy of Govt. of India for import of steel and scrap may have an adverse impact in the demand

Of Sponge iron.

Fixed Assets

Land

Buildings

Plant and Machinery

Railway Lines

Furniture and Fixtures

Vehicles

Livestock

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs. 40.91
UK Pound	1	Rs. 80.46
Euro	1	Rs. 54.60

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	7
--CREDIT LINES	1~10	8
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		59

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions