MIRA INFORM REPORT

Report Date :

09.05.2008

IDENTIFICATION DETAILS

Name :	GOWTHAMI STEELS LIMITED
Registered Office :	3-28, Opposite Steel City Bus Depot, Kurmannapalerm, Visakhapatnam – 530 046, Andhra Pradesh
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	24.10.1994
Com. Reg. No.:	01-18613
CIN No.: [Company Identification No.]	U27107AP1994PLC018613
TAN No.: [Tax Deduction & Collection Account No.]	VPNG00558F
PAN No.: [Permanent Account No.]	AAACG8092M
Legal Form :	A closely held Public Limited Liability Company
Line of Business :	Manufacturer of different sizes of MS Wire, and Trading Steel Products, Re-Bars, and other Steel Wires.

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 170000
Status :	Satisfactory
Payment Behaviour :	Usually correct
Litigation :	Clear
Comments :	Mr. Prabhakar, Finance Manager assured to provide with latest financials and business details. He failed to provide so far due to heavy pressure of work. Subject is a well – established company having satisfactory track. Trade relations are fair. Financial position is satisfactory. Payments are usually correct and as per commitments. . Nothing adverse reported. The company can be considered normal for business dealings at usual trade terms and conditions.

INFORMATION PARTED BY

Name :	Mr. Prabhakar
Designation :	Finance Manager
Date :	09.05.2008

LOCATIONS

Registered Office :	3-28, Opposite Steel City Bus Depot, Kurmannapalerm, Visakhapatnam – 530 046, Andhra Pradesh, India
Tel. No.:	91-891-258-7279 / 7379
Fax No.:	91-891-2587179
E-Mail :	info@gowtami.com gowtamisteels@eth.net gowtamisteels@etc.com gowtamisteelsltd@yahoo.co.in
Website :	www.gowtami.com
Location :	Owned
Branch Office :	Visakhapatnam: “Gowtami House” Kurmannapalem Opp- Steel City Bus Depot Visakhapatnam- 530 046, Andhra Pradesh, India Tel No.: 91-891-2587 279/379/479 Mobile No.: 91-99492 38744 Vijayawada: Bharathi Nagar Opp: Vinayaka Theatre Vijayawada. Mobile No.:- 91-98499-86741 Hyderabad: Mig – 7-1-344 Flat # 102 S. R. Nagar, Hyderabad, Andhra Pradesh, India Ph- 91-40-55633555 Kerala: Karthika, Pooranthuruthu- P.O Kottayam – 2340142 H- 91-94475 -30504   Chennai: New # 31, Gill Nagar Extn. Jhoolai Medu Chennai- 94, Tamil Nadu, India            Ph- 91-98407-06565        Bangalore: 13, Malavalli Rama Rao Street 2^Nd Floor Bangalore – 560 002, Tamil Nadu, India            Ph-91-98800-43315  Orissa: Near Telephone Bhavan Berhampur Ganjam District Orissa, India Faridabad: Plot No. 239 & 244 Sec. 24 Faridabad Haryana, India
Factory 1:	S. No. 2/4, Aganampudi, Visakhapatnam – 530 046, Andhra Pradesh, India
Tel. No.:	91-891-2587279 / 379 / 479 / 489
Mobile No.:	91-9949238744
E-Mail :	Gowtamisteelsltd@Yahoo.Co.In
Location :	Owned
Factory 2:	S. No. 2/4, Aganampudi, Visakhapatnam- 530 046, Andhra Pradesh, India
Tel. No.:	91-891-2587 489 & 99492 38743
Trading Division :	“Gowtami House” Kurmannapalem, Opposite Steel City Bus Depot, Visakhapatnam- 530 046, Andhra Pradesh, India
Tel No.:	91-891-2587 279/379/479 & 99492 38744
C & F Division :	Indian Oil Corporation, Bahadurpalli, R R District, 62/1-A, Opposite, Satyam Technology Centre, Hyderabad- 530 05, Andhra Pradesh, India
Tel No.:	91-40-2309 1133/1144

DIRECTORS

Name :	Sri    G Mohan Rao
Designation :	Managing Director.
Address :	D No. 4-76, Kurmannapalem , Visakhapatnam – 530 046, Andhra Pradesh, India
Date Of Birth/Age :	01.08.1971
Date Of Appointment :	22.09.1997
Name :	Sri   G S Murali Krishna
Designation :	Executive Director.
Address :	D No. 4-27/1, Kurmannapalem, Visakhapatnam- 530 046, Andhra Pradesh, India
Date of Birth/Age :	15.08.1969
Date of Appointment :	20.03.2000
Name :	Smt. Gannamani Srivani
Designation :	Director
Address :	F No. 504, Vietla Towers, Peda Waltair, Visakhapatnam-530 017, Andhra Pradesh, India
Date of Birth/Age :	18.07.1975
Date of Appointment :	30.09.2004
Name :	Smt. G.Vijayalakshmi
Designation :	Director
Address :	Door No. 31/10/1, Kurmannapalem, Visakhapatnam – 530 046, Andhra Pradesh, India
Date of Birth/Age :	02.12.1972
Date of Appointment :	30.09.2004
Directorship in other companies:
Name of the company:	Gowtami Steel Products Private Limited
CIN of the company:	U27105AP1995PTC022086
Designation:	Director
E-mail:	gowtamisteelsltd@yahoo.co.in
PAN No.:	ACYPG7404Q
Tel No.:	91-22-891-2587479
Name :	Mr. G Rama Krishna rao
Designation :	Director
Address :	Plot No. 161, Sector V M V P Colony, Visakhapatnam– 530 046, Andhra Pradesh, India
Date of Birth/Age :	15.12.1966
Date of Appointment :	01.10.2004
Name :	Mr. Surendra Apparao Devarapalli
Designation :	Director
Address :	11-23 Undrajavaram, Andhra Pradesh, India
Date of Birth/Age :	02.09.1958
Date of Appointment :	01.10.2004
Name :	Mr. K Srinavasa Rao
Designation :	Director
Address :	6-3-609/145, Flat No. 204 Aashyana Aprtments, Ananda Nagar Colony,. Khairatabad , Hyderabad, Andhra Pradesh, India
Date of Birth/Age :	30.07.1968
Date of Appointment :	01.10.2004

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders (as on 31.03.2006)		No. of Shares
Mr. G S Murali Krishna		463000
Mr. G Mohan Rao		752842
Mr. G S Vani		233360
Mr. G Vijaya Lakshmi		274300
Mr. K Kameswara		15000
Mr. K Subba Rao		5000
Mrs. Godavarthi Surya Rao		7800
Mr. D Appa Rao		19960
Mr. D Subhash Chandra		19960
Mr. E Bharathi		19960
Mr. Kumar Raja		9980
Mr. K V J Varma		5190
Mr. K Srinivasa Rao		4990
Mr. J Srinivada Rao		4990
Mr. N Satyanarayana		4990
Mr. J Suri Subba Rao		4990
Mr. N Krishna		4990
Mr. K Pattabharamayya		8000
Mr. K L Narasamba		2000
Mr. D Krishna Prasad		100000
Mr. Kuma Maheshwar Rao		150000
Mr. K Srinivasa Rao		100000
Mr. B Visweswara Rao		70000
Mr. B Krishna Kumari		80000
Mrs. G Srihari Devi		2500
Mr. G Bhanumathi		4000
Mr. G Veera Raghavulu		11398
Mrs. Radha Sai Sudha		5000
Mr. K Ramesh		100000
Others		15800
	Total	2500000

Equity Shares Breakup (Percentage of Total Equity): (as on 31.03.2006):-

Sr No.	Category	Percentage
1	Directors or relative of directors	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer of different sizes of MS Wire, and Trading Steel Products, Re-Bars, and other Steel Wires.
Products :	· Steel Wires · CO2 Wires · GI Wires · HC Wires · MS Wires · Fine Wires
Terms :
Selling :	Credit (30-60 days)
Purchasing :	Cash, Credit (30-60 days)

GENERAL INFORMATION

Customers :	Wholesalers, End Users
No. of Employees :	150
Bankers :	· State Bank of India BHPV Branch, Visakhapatnam-530001, Andhra Pradesh, India
Banking Relations :	Satisfactory
Auditors :
Name :	G P Associates Chartered Accountants
Address :	9-29-17/C, Flat No. 402, Seeta Lakshmi Towers, Balaji Nagar, Visakhapatnam – 530 003, Andhra Pradesh, India
Associates/Subsidiaries :	Gowtami Steel Products Private Limited {CIN: U27105AP1995PTC022086}

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
6000000	Equity Shares	Rs. 10/- each	Rs. 60.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
2694578	Equity Shares	Rs. 10/- each	Rs.26.946 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

FINANCIALS:

The company’s last financials is enclosed herewith. Mr. Prabhakar, Finance Manager assured to update with new financials and if he provides, we shall supplement the report.

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2006	31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital		26.946	25.445	19.567
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		14.144	9.014	6.705
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		41.090	34.459	26.272
LOAN FUNDS
1] Secured Loans		124.977	75.699	53.645
2] Unsecured Loans		5.158	5.536	1.461
TOTAL BORROWING		130.135	81.235	55.106
DEFERRED TAX LIABILITIES		0.965	0.000	0.000
TOTAL		172.190	115.694	81.378
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		34.834	10.907	12.771
Capital work-in-progress		7.023	18.306	0.028
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	115.624	35.119	21.096
	Sundry Debtors	49.964	37.798	26.088
	Cash & Bank Balances	10.390	10.276	6.066
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	43.655	37.276	34.181
Total Current Assets		219.633	120.469	87.431
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	89.300	33.988	18.856
	Provisions	0.000	0.000	0.000
Total Current Liabilities		89.300	33.988	18.856
Net Current Assets		130.333	86.481	68.575
MISCELLANEOUS EXPENSES		0.000	0.000	0.004
TOTAL		172.190	115.694	81.378

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
Sales Turnover		923.568	905.422	660.816
Other Income		43.592	3.844	9.835
Total Income		967.088	909.266	670.651
Profit/(Loss) Before Tax		7.666	4.889	1.885
Provision for Taxation		2.536	2.580	0.847
Profit/(Loss) After Tax		5.130	2.309	1.038
Expenditures :
	Raw Material Consumed	829.088	820.504	638.569
	Salaries, Wages, Bonus, etc.	3.860	4.422	2.353
	Managerial Remuneration	1.020	0.185	0.660
	Payment to Auditors	0.085	0.085	0.085
	Interest	12.246	6.104	7.117
	Insurance Expenses	1.464	1.053	0.060
	Power & Fuel	2.657	3.230	3.592
	Depreciation & Amortization	3.841	1.108	NA
	Other Expenditure	105.231	67.683	16.329
Total Expenditure		959.492	904.374	668.765

KEY RATIOS

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
PAT / Total Income	(%)	0.53	0.25	0.15
Net Profit Margin (PBT/Sales)	(%)	0.83	0.54	0.29
Return on Total Assets (PBT/Total Assets}	(%)	2.93	3.27	1.89
Return on Investment (ROI) (PBT/Networth)		0.19	0.14	0.07
Debt Equity Ratio (Total Liability/Networth)		5.34	3.34	2.82
Current Ratio (Current Asset/Current Liability)		2.46	3.54	4.64

LOCAL AGENCY FURTHER INFORMATION

FORM 8:-

Corporation identity number or foreign company registrations number of the company	U27107AP1994PLC018613
Name of the company	GOWTHAMI STEELS LIMITED
Address	3-28, Steel City Bus Depot, Kurmannapalem, Visakhapatnam, Andhra Pradesh, India
This Form is for	Modification of Charge
Type of Charges	· Immovable Property · Book Debts
Particular of the charge holder	State Bank of India BHPV Branch, Visakhapatnam- 560 001, Andhra Pradesh, India E-mail: udanga_dsc@rediffmail.com
Nature or description of the instrument creating charge	· Supplemental agreement of hypothecation of goods and assets for increase in the overall limit · Supplemental agreement of loan for increase in the overall limit · Letter regarding the grant of individual limits within the overall limit.
Date of the instrument creating charge	12.10.2006
Amount Secure by the charge	Rs. 217.500 millions
Brief of the principal terms and conditions and extent and operation of the charge	Rate of Interest : Cash credit -13.50% Terms of repayment: Term Loan repayable of Rs. 67.500 millions in Twenty quarterly installment commencing from June 2007 Margin: Raw Materials 30% Stock in process-30% Finished goods -30% Book Debts / receivables (cover period 30 days) -40%
Short particulars of the Property charged	All the existing securities be and are hereby extended to the enhanced / revised limits also.
Particulars of the present modification	The present limits are enhanced in the following manner: · Cash credit from 60.000 millions to 75.000 millions · Term Loan from 25.000 millions to 67.500 millions · Letter of credit from 24.000 to 50.000 · Bank guarantee for an extent of 25.000 millions · SLC limit of 12.500 remains the same.

WEBSITE DETAILS:

Industrial Customers manufacturing Wire nails, Welded  Wire mesh, Welding electrodes, Stitching wires, Galvanized Wires, Binding wires, J-Bolts etc., and Individual consumers of concrete reinforcement.

Subject was established in the year 1994 under flagship of Sri G.Ananda Rao, the CMD. The main activity has been manufacturing of Gauge Wires and marketing of Wire rod coils and other steel products in Visakhapatnam.   The initial capacity of the unit was 10,000 MT. Over the years, it has shown substantial improvement, and increased its capacity to 24,000 MT., rendering quality services to its customers. With the proposed installation of the new machinery the installed capacity of the unit will be 36000 MT’s p.a. Presently the company is being efficiently managed by its Managing Director G.Mohan Rao.Currently, subject is proposing to expand its business by manufacture of H.C.Wire, G.I.Wire, CO2 Wire, P.C. Wire and Fine Wires.

The company sources it’s raw material both for trading and for in-house consumption from the steel gigantics Viz., Rastriya Ispat Nigam Limited, Steel Authority of India Limited, Tata Iron and Steel Compnay Limited., in various grades, quality and chemical composition etc.,

The group has a long presence in the steel sector dating way back to 1990.  The varied experience in this sector ranges from C and F services, manufacturing and marketing Steel wires and steel products.  The company has developed profound knowledge of the intricacies in the steel sector.

The company has unique distinction in the process of acting as an authorised consignment agent for RINL during the period 1990–997 in the name and style of M/s. G.S.N. Murthy and Co., Visakhapatnam.  During this period various steel products were handled on an average of 15,000 tons per month. It had taken up consignment assignment of RINL as Consignment Agent in the name and style of M/s Anand Transport was handled at Bhubaneshwar during the period 1997.

Subject has established a marketing network covering the entire south India.  The company has four branch offices and dealers throughout the four states of south India.  In Andhra Pradesh the company has offices in Visakhapatnam, Hyderabad and Vijayawada. The entire marketing process is thoroughly streamlined with the best operating and marketing practices.  Most of the processes are computerized resulting in efficient and prompt services to the customers and suppliers. A highly competent team of personnel specialized in cross-functional activities, is strategically positioned to provide good support and service to the stakeholder of the organization.  All this has enabled the company in achieving a near 100% growth rate in the year 2001 – 2002.

The company pursues an aggressive marketing strategy that has resulted in a strong presence in the market and has enabled the company to achieve a dominant market share and its 100 percent targets. The company group is also actively engaged in transport and handling contracts.

Management Team:-

G.Mohan Rao ::

Managing Director

Shri G.Mohan Rao, (36-years), the present Managing Director is a Mechanical Engineer, looking after General Administration, Financial, Technical, Manufacturing and Marketing aspects of the company besides being a core decision maker.  He is he key a person with noble thoughts always looks forward to develop the Company. On account of his valuable efforts, subject has been awarded with the prestigious CFA contract with IOCL with his vulnerable efforts. He has proved himself a successful second-generation entrepreneur.

G.S.Murali Krishna :

Executive Director

Sri G.Muralikrishna (38 years), the Executive Director of the Company. He is the Mechanical Engineer by qualification and started his career in 1995 by joining his father. The strength of the company is the main support and guidance of Sri G.Ananda Rao who has diversified successfully into trading of various steel rods and manufacturing of M.S.Wires of different gauge. 

G.Vani :

Director of the Company

Smt. G.Vani (31-years) the Director of the Company, is a Post graduate in marketing is looking after the transactions of marketing of steel products.

G.Vijayalakshmi :

Director of the Company

Smt. G.Vijayalakshmi, (34-years) the Director of the Company is a Post Graduate in Finance is looking after the day-to-day financial transactions by being a hand-in-glow to Sri G.Mohan Rao.

Trading:

· W R C

· Rebars

· Channels

· Rounds

· M.S.Bars

· Oil Rods

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.41.79
UK Pound	1	Rs.81.60
Euro	1	Rs.64.01

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--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	NO
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		49

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.	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