MIRA INFORM REPORT

Report Date :

10.03.2007

IDENTIFICATION DETAILS

Name :	KANISHK STEEL INDUSTRIES LIMITED
Registered Office :	67/2B, Calicut Main Road, Nethimedu, Salem – 636002, Tamilnadu
Country :	India
Financials (as on) :	31.03.2005
Date of Incorporation :	14.02.1995
Com. Reg. No.:	18-5793
CIN No.: [Company Identification No.]	L27109TZ1995PLC005793
TAN No.: [Tax Deduction & Collection Account No.]	CHEK00697E
Legal Form :	It is a public limited liability company. The company's shares are listed on the Stock Exchanges.
Line of Business :	Manufacture and sales of various steel products like tors, rounds, squares and profiles and structurals like channels, joints, I-beams, etc., wind mills and steel rolled products.

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 1500000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is a well-established Company engaged in manufacturing and marketing of various steel products used both in infrastructure and housing sectors. The Company’s business is progressing slowly and steadily. Trade relations are reported as fair. Payments are reported as correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	67/2B, Calicut Main Road, Nethimedu, Salem – 636002, Tamilnadu, India
Administrative Office :	26 [Old 17], Mooker Nallamuthu Street, Chennai- 600 001
Tel. No.:	91-44-2522 3321, 2524 5364, 2522 3754, 25233688
Mobile No.:	91-9840067080
Fax No.:	91-44-2522 7108, 25220646
E-Mail :	kanishk@touchtelindia.net kanishk@md3.vsnl.net.in
Website :	http://www.kanishksteels.com
Factory :	Rolling Mill B-27(M), SIPCOT Industrial Complex, Gummidipoondi, Thiruvallur District
Factory :	Sponge Iron Plant Obulapuram Village S.R. Kandigai, Gummidipoondi, Thiruvallur District
Factory :	Windmill i) Windfarm Vadamacherry Site, Palladam T.K., Coimbatore District ii) Windfarm Pazahoor Site, Tirunelveli District. iii) Windfarm, Tirunelveli District.

DIRECTORS

Name :	Mr. Ravi Gupta
Designation :	Chairman & Managing Director
Name :	Mr. Ashok Bohra
Designation :	Whole Time Director
Name :	Mr. S. Soundararajan (Up to 29.12.2005)
Designation :	Director
Name :	Mr. K. Ramamurthy (Up to 29.12.2005)
Designation :	Director
Name :	Mr. S. Venkatachalam (From 29.12.2005 to 26.06.2006)
Designation :	Director
Name :	Mr. K.S. Venkatagiri (Since 29.12.2005)
Designation :	Director
Name :	Dr. Pravin Kumar Aggarwal (Since 26.06.2006)
Designation :	Director
Name :	Dr. Prakash Agarwal
Designation :	Director

KEY EXECUTIVES

Name :	Mr. Arvind Gupta
Designation :	President
Name :	Mr. Saravanan
Designation :	General Manger (Marketing)
Name :	Mr. H.R. Sharma
Designation :	CFO (FCA, Senior Chartered Accountant)
Name :	Mr. R. Balakrishnan
Designation :	General Manager - Finance & Planning (FCA, former Senior Banker)
Name :	Mr. Ravi Sunthar
Designation :	General Manager - Production & Planning
Name :	Mr. Rajagopalan
Designation :	General Manager (Projects)
Name :	Mr. G.V. Subramanyan
Designation :	General Manager (Sponge Iron Plant)

SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares	Percentage of Holding
Promoter's holding
Promoters
Indian Promoters	1903872	10.20 %
Person acting in concert	11436900	61.24 %
Private Corporate Bodies	1599242	8.56 %
Indian Public	2539834	13.60 %
NRIs / OCBs	1134405	6.07 %
Any other (Clearing Member)	59747	0.32 %
Total	18674000	100.00 %

BUSINESS DETAILS

Line of Business :	Manufacture and sales of various steel products like tors, rounds, squares and profiles and structurals like channels, joints, I-beams, etc., wind mills and steel rolled products.
Products :	v Tor Steel & Profiles v Sale of Raw Materials

GENERAL INFORMATION

No. of Employees :

1800

Bankers :

Ø State Bank of Indore, Broadway, Chennai – 600 108

Ø State Bank of Patiala, Whites Road, Chennai – 600006

Ø Tamilnadu Mercantile Bank Limited

Ø UCO Bank

Facilities :

SECURED LOAN	Rs in Millions
From Banks - State Bank of Indore
Working Capital Demand Loan	40.340
Cash Credit	[4.398]
Term Loans
For Sponge Iron Project	90.656
As Corporate Loan	40.028
State Bank of Patiala - for Sponge Iron Project	60.141
(All the above loans are secured by equitable mortgage of land and building including Plant and Machinery and also by hypothecation of Raw Materials, Stock-in-Process and Finished Goods. Also personally guaranteed by one of the Directors of the Company.)
From Institutions/Others
A) Interest Free Sales Tax Loan under Deferral Scheme (Secured by second mortgage charge of land and building and plant and machinery)	15.794
B) Hire Purchase Loans (Secured against assets purchased under HP Scheme)	9.144

Banking Relations :	Satisfactory
Auditors :
Name :	Chaturvedi & Company Chartered Accountants
Address :	Chennai – 600017
Associates/Subsidiaries :	1. O.P.Steels Limited 2. Associated Traders & Enterprises. 3. O.P.G. Energy Private Limited 4. Salem Food Products Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
22,800,000	Equity Shares	Rs.10/- each	Rs. 228.000 Millions
20,000	15% Cumulative Redeemable Preference Shares	Rs.100/- each	Rs. 2.000 Millions
2,000,000	Unclassified Shares	Rs.10/- each	Rs. 20.000 Millions
	Total		Rs. 250.000 Millions

Issued & Subscribed Capital:

No. of Shares	Type	Value	Amount
18,674,000	Equity Shares	Rs.10/- each	Rs. 186.740 Millions
Called up & Paid-up capital:
18,674,000	Equity Shares	Rs.10/- each	Rs. 186.740 Millions
	LESS: Calls in arrears		Rs. 2.426
	Total		Rs. 184.314 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		184.314	182.362	102.400
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		222.459	182.633	155.700
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		406.773	364.995	258.100
LOAN FUNDS
1] Secured Loans		251.704	73.638	84.900
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		251.704	73.638	84.900
DEFERRED TAX LIABILITIES		67.446	42.042	0.000
TOTAL		725.923	480.675	343.000
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		479.008	155.456	160.800
Capital work-in-progress		38.553	118.711	0.000
INVESTMENT		58.469	58.496	41.700
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	244.393	126.845	205.000
	Sundry Debtors	193.408	115.936	48.100
	Cash & Bank Balances	41.023	30.846	13.800
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	67.888	35.252	64.100
Total Current Assets		546.712	308.879	331.000
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	368.735	143.333	184.100
	Provisions	28.084	17.534	6.400
Total Current Liabilities		396.819	160.867	190.500
Net Current Assets		149.893	148.012	140.500
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		725.923	480.675	343.000

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
Sales Turnover		2732.825	1550.480	1104.600
Other Income		6.479	5.990
Total Income		2739.304	1556.470	1104.600
Profit/(Loss) Before Tax		80.637	21.675	20.400
Provision for Taxation		32.316	5.161	6.600
Profit/(Loss) After Tax		48.321	16.514	13.800
Imports :
	Raw Materials	389.886	413.634	NA
Total Imports		389.886	413.634	NA
Expenditures :
	Raw Materials	2348.600	1352.900	922.700
	Excise Duty	113.300	78.000	63.200
	Power & Fuel Cost	93.300	50.900	42.300
	Other Manufacturing Expenses	59.300	28.700	25.400
	Employee Cost	2.100	1.300	1.200
	Selling and Administration Expenses	122.200	76.900	9.600
	Miscellaneous Expenses	0.000	1.300	0.300
	Interest & Financial charges	13.500	11.000	6.700
	Depreciation	19.700	12.900	12.800
Total Expenditure		2772.000	1613.900	1084.200

QUARTERLY RESULTS

PARTICULARS	30.06.2006	30.09.2006	31.12.2006
Type	1st Qtr	2nd Qtr	3rd Qtr
Sales Turnover	1021.300	939.800	1097.200
Other Income	0.300	0.100	0.800
Total Income	1021.600	939.900	1098.000
Total Expenditure	976.100	894.700	1050.800
Operating Profit	45.500	45.200	47.200
Interest	8.100	8.400	9.700
Gross Profit	37.400	36.800	37.500
Depreciation	6.800	7.600	11.400
Tax	0.000	6.900	2.900
Reported PAT	30.600	22.300	23.200

200606 Quarter 1 –

Status of Investor Complaints for the quarter ended June 30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter Nil Complaints disposed off during the quarter Nil Complaints unresolved at the end of the quarter Nil 1. The above Unaudited Financial Results were taken on record by Board of Directors on July 31, 2006. 2. Previous period figures have been regrouped wherever necessary.

200609 Quarter 2 –

EPS is Basic & Diluted Status of Investor Complaints for the quarter ended September 30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter Nil Complaints disposed off during the quarter Nil Complaints unresolved at the end of the quarter Nil 1. The above Unaudited Financial Results were considered by the Audit Committee and taken on record by the Board of Directors at their meeting held on October 31, 2006. The results are subjected to a Limited Review by the Statutory Auditors. 2. The Provision for deferred taxation will be considered at the end of the year 3. The Provision for Current Tax for the Quarter and Half year ended September 30, 2006 is based on Book Profit under Section 115JB of the Income - Tax Act 1961. 4. The Company has two Business Segments viz. Steel and Power 5. The Amalgamation of O P Steels Limited and Avanti Oil and Steel Industries Private Limited with the Company was sanctioned by High Court of Chennai and Delhi on July 18, 2006 and January 12, 2006 respectively with effect from the appointed date April 01, 2004 and as per the scheme of amalgamation the effective date is September 25, 2006. The above results only pertains to Kanishk Steel Industries Limited (BEFORE MERGER). 6. On October 6, 2006, the Board of Directors of the company has allotted 9801518 Equity shares of Rs 10/- each fully paid as per the scheme of amalgamation to the Equity and Preference shareholders of O P Steels Limited and Avanti Oil & Steel Industries Limited

200612 Quarter 3 –

Expenditure Includes Consumption of Raw Materials Rs 1033.609 million Staff Cost Rs 1.313 million Other Expenditure Rs 15.902 million EPS is Basic & Diluted Status of Investor Complaints for the quarter ended December 31, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter Nil Complaints disposed off during the quarter Nil Complaints unresolved at the end of the quarter Nil 1. The above Unaudited Financial Results were considered by the Audit Committee and taken on record by the Board of Directors at their meeting held on January 31, 2007. 2. The Provision for deferred taxation will be considered at the end of the year. 3. The Provision for Current Tax for the Quarter and Nine Months ended December 31, 2006 is based on Book Profit under Section 115JB of the Income - Tax Act 1961. 4. The Company has two Business Segments viz. Steel and Power. 5. The Amalgamation of O P Steels Limited and Avanti Oil and Steel Industries Private Limited with the Company was sanctioned by High Court of Chennai and Delhi on July 18, 2006 and January 12, 2006 respectively with effect from the appointed date April 01, 2004 and as per the scheme of amalgamation the effective date is September 25, 2006. The accounts of the Two merged Companies for period from April 01, 2006 have been duly incorporated in the Current Quarter. 6. On October 6, 2006, the Board of Directors of the company has allotted 9801518 Equity shares of Rs 10/- each fully paid as per the scheme of amalgamation to the Equity and Preference shareholders of O P Steels Limited and Avanti Oil & Steel Industries Limited Listing approval of these shares is awaited from Bombay Stock Exchange.

KEY RATIOS

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Debt Equity Ratio	0.43	0.25	0.37
Long Term Debt Equity Ratio	0.36	0.22	0.24
Current Ratio	1.20	1.53	1.39
TURNOVER RATIOS
Fixed Assets	6.70	6.53	4.63
Inventory	15.33	9.82	5.36
Debtors	18.40	19.87	21.08
Interest Cover Ratio	6.97	2.96	4.04
Operating Profit Margin (%)	4.00	2.79	3.64
Profit Before Interest and Tax Margin (%)	3.31	2.00	2.47
Cash Profit Margin (%)	2.39	1.80	2.42
Adjusted Net Profit Margin (%)	1.70	1.01	1.26
Return on Capital Employed (%)	17.09	8.34	8.21
Return on Net Worth (%)	12.52	5.30	5.73

STOCK PRICES

Face Value	Rs.10.00/-
High	Rs.59.35/-
Low	Rs.55.05/-

LOCAL AGENCY FURTHER INFORMATION

The Registered office situated at 108, Divya Towers, II Floor, Fort Main Road, Salem - 636 001, Tamilnadu, India has been shifted to the above address

HISTORY

Promoted by the Gupta brothers in 1989 as a private limited company, Kanishk Steel Industries has an installed capacity of 50,000 tpa to manufacture various steel products like tors, rounds, squares and profiles and structurals like channels, joints, I-beams, etc. It became a public limited company in Apr.'92 and entered the capital market in Nov.'92 to fund its expansion programme.

The company has embarked on an eco-friendly process of power generation through wind mills, by installing a 6-MW wind power project and has already started generating 4 MW. To augment resources for this project, it offered a (1:1) rights issue of FCDs, aggregating Rs 250 Millions The issue was also instrumental in increasing the capacity of the steel re-rolling mill from 50,000 tpa to 66,000 tpa.  

A sizeable portion of its production is through conversion contracts with Indian Iron & Steel Company, Rashtriya Ispat Nigam and other producers of semis.  

The company has expanded and diversifed its activities at a cost of Rs 4000 Millions integrated steel project (cap.: 0.3 Mil tpa of steel billets) a technical assistance agreement was signed in Nov.'94, with the Chongquing Iron & Steel Company, China.

FIXED ASSETS

Ø Land Free Hold

Ø Land Lease Hold building

Ø Plant & Machinery

Ø Electrical Installation

Ø Crane

Ø Office Equipments

Ø Furniture & Fittings

Ø Vehicles

OPERATIONS: 

The Directors are pleased to report that the company has recorded good performance for the year ended 31st March 2006. These results are attributable to prudent management decisions and improved operational efficiency at various levels coupled with general economic revival and infrastructure development in the country. 

The company achieved a turnover of Rs.2846.108 Millions, as against Rs.1629.451 Millions recorded in the previous year. The company has also achieved Profit before taxes Rs.80.637 Millions as against Rs.2167.5 Millions recorded in the previous year. 

The company has started the commercial production of Sponge Iron product during September 2005. Being a backward integration project, this project will go a long way in helping the company to achieve economies of production. The company has also installed Two Wind Energy Generators (WEG) during the year with a capacity of 1.250 MW each, which would enable the company substantial reduction in power cost. 

During the year, the company has launched mass media advertisement campaigns, as on going process. This has resulted in 'Brand' Product awareness and improved realization.  

MERGER SCHEME: 

The Hon'ble High Court of Delhi has approved the scheme of Amalgamation of O.P.Steels Limited and Avanti Oil & Steel Industries Private Limited with the Company under Section 394 of the Companies Act, 1956 as reported in the previous year. The orders of the Hon'ble Madras High Court are pending.  

MANAGEMENT DISCUSSION AND ANALYSIS REPORT: 

The year 2005-06 has been quite buoyant for the Indian Economy. With proper uptrend in the industrial growth and continued growth in Service Sector and a regular monsoon, Indian Economy has witnessed the fastest growth. Infrastructure and housing are continuing to grow and with the Governmental push on road projects, steel industry is doing robust business. Infrastructure projects of road, airports, ports and power generation also helps in pushing the demand for steel higher and higher. 

The signs of improvement, both in demand and pricing have already been felt by the industry. In the current scenario, the Management of the company feels confident about more business in the ensuing year and hence attempting to expand further. 

Strength: As an already established company, the Company can take advantage of the revival of the economy. Further, the company is getting assured power supply from OPG Energy Private Limited, from its gas-based power plant. The company has set up a Sponge iron plant during the year and has also set up two wind mills at Tirunelveli. This will benefit the company with reduction in the raw material cost and will ultimately benefit all stakeholders. This will also provide the company an edge to face the competition. 

Weakness: Continuous rise in crude prices would result in escalation in transport cost and with worsening fiscal gaps, the industry would be affected. There is geographical limitation of markets due to volume of the finished goods. 

Opportunity: Continuing increases in domestic demand both in the housing and infrastructure sector. 

Threat: Government's policy on cheaper imports of finished goods. The policy of the Government has been positive to the steel industry during the year. With steady growth of steel demand ail over the world, steel prices is expected to remain more or less stable during the year. 

Amalgamation:

During the year the company has received the assent of the members for amalgamation of two companies - O.P.Steels Limited and Avanti Oil and Steel Industries Private Limited, with the company. The company is yet to receive the final order from the High Court, Chennai, in this regard. The company will get extra capacity for production of steel with the proposed acquisition. Apart from this the company is expected to grow up with additional market and higher revenue realization.

AS PER WEBSITE

Kanishk Steel Industries Limited, an ISO 9001:2000 certified company listed in BSE, is part of OPG Enterprises Group. Kanishk Steel is promoted by late Shri. O.P Gupta, who has established steel related business in Chennai, Salem and Mayavaram in Tamilnadu.

Kanishk Steel Industries has a turnover of Rs.2739.3 Millions and the group turnover is of Rs. 5000 Millions. Kanishk Steel employs around 450 people. The company manufactures steel products (Finished goods) both Constructional steel and Structural steel conforming to the Bureau of Indian Standards BIS 1786 and IS 2062 (equivalent to ASTM, BS, DIN). .

As a pioneer in the recently developed field of TMT bars, Kanishk Steel Industries has emerged as a dominant player in the market and has been continuously providing value to the customers over the years ensuring quality and cost effectiveness .

The major clients of Kanishk Steel include BHEL, NLC, ICF, Department of Atomic Energy; State Government departments like TANSI, DRDA and others. Kanishk Steel also supplies to large private sector companies like ITD Cementation India, Singapore Realty and Shapoorji Pallonji, DLF and Khivraj Techpark amongst others .

Kanishk Steel's corporate office is located at N0.26, Mooker Nallamuthu Street, Chennai with its TMT Bars and Structurals manufacturing unit and sponge iron plant at Gummidipoondi.

Kanishk Steel manufactures steel products (Finished goods),both Constructional steel and Structural steel conforming to the Bureau of Indian Standards IS 1786 and  IS 2062.   The  product   range  of  the  company  includes  TMT  (Thermo Mechanically Treated) bars, CTD (Cold Twisted Deformed) bars; Structural steel items  like  joists,  channels,  angles,  flats,  squares,  rounds,  profiles,  special profiles,wire rods, spring steel flats and carbon alloy construction steel. Kanishk products have wide acceptance in the domestic market.

TMT Bars

Structural

Sponge Iron

Trading of HMS and shredded scrap iron

Kanishk Steel embarks on the quality way

Receives ISO 9001:2000 certification for Manufacturing and Supply of TMT bars and Structural steel at its Gummidipoondi facility

Chennai, 20th June 2006: The Chennai-based Kanishk Steel Industries Limited have been granted ISO 9001:2000 certification for the manufacturing and supply of high quality and cost effective TMT, Structural steel items like joists, channels, angles, flats, squares and rounds, at their Gummidipoondi facility. The certification approves Kanishk Steel's quality management systems for manufacturing and supply of TMT Bars and Structural Steel products to meet international standards established by the International Organization for Standardization.

“ISO 9001:2000-certification recognizes our high-quality manufacturing system and success in giving the best for our clients,” says Chairman and MD, Mr. Ravi Gupta. “This certification confirms the quality of our services and operations, and underscores the value we create for our clients. The ISO certification affirms the value of Kanishk's quality philosophy, policy and systems.”

Kanishk’s ISO 9001:2000-certification audit was performed by ICRS Management Systems Private Limited The audit included areas of management, production, quality, training, knowledge base, human resources, administration and technology services. ISO 9001:2000 recognizes companies with a quality management system that consistently provide services that meet customer and regulatory requirements.

Kanishk Steel has always been quality conscious in terms of the best resources and manufacturing practices. The effort is to constantly review and maintain the quality of the product which will meet the benchmark standards of the products and also the satisfaction of the consumer.

Kanishk Steel had recently upgraded the testing equipment at its Gummidipoondi facility with SpectroMAXx Spectrometer. With this, the testing equipment at the company’s production facilities will be the latest and the best thus ensuring better, efficient, accurate and precise analysis in the quality of the products being manufactured. The SpectroMAXx will further enhance the already existing stringent quality process at Kanishk Steel and provide

competitive advantage in the entire process of manufacturing from selection of the raw material to the finished product. The SpectroMAXx has been specifically equipped for Kanishk Steel’s requirements, for efficiently and effectively analyzing the metals, thereby giving best quality products for their customers.

Kanishk Steel manufactures steel products (Finished goods) both Constructional steel and Structural steel conforming to the Bureau of Indian Standards IS 1786 and IS 2062. Kanishk products have wide acceptance in the domestic market. The major clients of Kanishk Steel include BHEL, NLC, ICF, Department of Atomic Energy; State Government departments like TANSI, DRDA and others. Kanishk Steel also supplies to large private sector companies like ITD Cementation India, Singapore Realty, Shapoorji Pallonji, DLF and Khivraj Techpark amongst others.

Kanishk Steel FY 2005-06 earnings registers a 192% growth

Chennai, 28th June 2006: Kanishk Steel Industries Limited, the Chennai based manufacturers of high quality and cost effective TMT, Structural steel items like joists, channels, angles, flats, squares and rounds announced the financial results for year ending March 31, 2006. The company has reported profit after tax at Rs.48.3 Millions with a 192% increase, for the financial year 2005-06 as compared to Rs.16.5 Millions in the financial year 2004-05. The turnover for the company in the year ending March 2006 has been Rs.2739.3 Millions, a growth of 67% compared to Rs.1635.4 Millions in the corresponding period last year. Net sales for the year ended March 2006 grew by 68% to Rs.2732.8 Millions from Rs.1629.4 Millions in the corresponding previous financial year.

The company has reported profit after tax at Rs.19.2 Millions for the quarter ending 31st March 2006 as compared to Rs.1.204 Millions in the corresponding quarter last year. The turnover for the company in the quarter ended 31st March 2006 has been Rs.822.6 Millions compared to Rs.441.5 Millions in the corresponding quarter last year. The Board has recommended a dividend of 10% on the equity shares.

Mr. Ravi Gupta, Chairman and Managing Director, Kanishk Steel Industries Limited said, “The demand from the regional construction industry has contributed to a major part of our growth this past year. With an upswing in the infrastructural growth and continuing real estate boom, we look forward to improving our performance.”

Kanishk Steel has been recently awarded the ISO 9001:2000 certification for the manufacture and supply of TMT bars and Structurals at its Gummidipoondi facility. The certification confirms the quality of Kanishk Steel’s services and operations, and underscores the value they create for the clients.

Kanishk Steel manufactures steel products (Finished goods) both Constructional steel and Structural steel conforming to the Bureau of Indian Standards IS 1786 and IS 2062. The product range of the company includes TMT (Thermo Mechanically Treated) bars, Structural steel items like joists, channels, angles, flats, squares and rounds. Kanishk products have wide acceptance in the domestic market. The major clients of Kanishk Steel include BHEL, NLC, ICF, Department of Atomic Energy; State Government departments like TANSI, DRDA and others. Kanishk Steel also supplies to large private sector companies like ITD Cementation India, Singapore Realty, Shapoorji Pallonji, DLF and Khivraj Techpark amongst others.

About Kanishk Steel Industries Limited and the Group:

Kanishk Steel Industries Limited, an ISO 9001:2000 certified company, is part of OPG Enterprises Group promoted by late O.P Gupta, who has established steel related business in Chennai, Salem and Mayavaram in Tamilnadu. The company has a turnover of Rs. 1635.4 Millions and the group turnover is of Rs.5000 Millions. The shares of the company are listed in the Bombay Stock Exchange. Kanishk Steel manufactures steel products (Finished goods) both Constructional steel and Structural steel conforming to the Bureau of Indian Standards BIS 1786 and IS 2062 (equivalent to ASTM, BS, DIN). As a pioneer in the newly developed field of TMT bars, Kanishk Steel Industries has established itself as a company that provides value to the customers ensuring quality and safety.

The OPG Enterprises Group has over the years gained a strong foothold in the fields of STEEL and ENERGY. The other companies in the group are OP Steel and OPG Energy, which is an ISO 2001 certified company. The group has 18 MW GAS base power plant and 6 MW Wind – Power generation turbines in Coimbatore and Tirunelveli districts respectively. The group is into logistics and infrastructure projects also.

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 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.44.22
UK Pound	1	Rs.85.51
Euro	1	Rs.58.03

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	6
--CREDIT LINES	1~10	6
--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		53

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