MIRA INFORM REPORT

Report Date :

24.05.2008

IDENTIFICATION DETAILS

Name :	TAYO ROLLS LIMITED
Formerly Known As :	TATA – YODOGAVA LIMITED
Registered Office :	XLRI, New Administrative Building, XLRI Campus, Circuit House Area (East), Post Box No. 103, Jamshedpur - 831001, Bihar
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	02.02.1968
Com. Reg. No.:	03-00818
CIN No.: [Company Identification No.]	L27105JH1968PTC000818
TAN No.: [Tax Deduction & Collection Account No.]	RCHT00124F
PAN No.: [Permanent Account No.]	AABCT0210H
Legal Form :	Public Limited Liability Company. The Company’s shares are listed at the Stock Exchanges.
Line of Business :	Manufacturer of Iron Rolls and Pig Iron to the steel sector.

RATING & COMMENTS

MIRA’s Rating :

Aa

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 1700000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and reputed company having fine track record. Trade relations are fair. Financial position is good. Payments are correct and as per commitments. The company can be considered good for any normal business dealings as usual trade terms and conditions. It can be regarded as a promising business partner in medium to long term.

LOCATIONS

Registered Office :	XLRI, New Administrative Building, XLRI Campus, Circuit House Area (East), Post Box No. 103, Jamshedpur - 831001, Bihar, India.
Tel. No.:	91-657-2231276
Fax No.:	91-657-2226435
E-Mail:	vijaypahwa@tayco.co.in secy.tayo@gnjsr.global.net.in tayoregd@satyam.net.in
Sales Office:	Tata Center, 10^th Floor, 43 Chowringhee road, Calcutta, India 700071
Tel. No.:	91-33-22885291,22248024,22248569,22248015
Fax No.:	91-33-22880854
E-Mail:	tayokol@vsnl.com
Marketing Office/ Works :	Gamharia, Jamshedpur-832108, India
Tel. No.:	91-657-387790 / 2387791 / 2386058 / 2386061 / 5518024 / 5518025 / 3091142.
Fax No.:	91-657-2386059
Factory :	TAYO Works, Gamharia, District Singhbhum (West), Jharkhand, India.
Tel No :	91-657-2407248 / 258 / 2200506 / 780 / 781
Fax No :	91-657-2200505

DIRECTORS

Name :	Mr. A.N.Singh
Designation :	Chairman
Name :	Mr. Shashi.S.Prasad
Designation :	Director
Name :	Mr. Vijay K. Mehta
Designation :	Director
Name :	Mr. N. K. Mishra
Designation :	Director
Name :	Mr. U.K.Chaturvedi
Designation :	Director
Name :	Mr. Varun Kumar Jha
Designation :	Director
Name :	Dr. S. K. Bhattacharyya
Designation :	Director
Name :	Mr. Vijay Mathur
Designation :	Director
Name :	Mr. P.C. Srivastava
Designation :	Managing Director

KEY EXECUTIVES

Name :	Mr. P.Hariharan
Designation :	Vice President(Finance)
Name :	Mr. B. K. Singh
Designation :	General Manager(Corporate)
Name :	Mr. Abhijit Mitra
Designation :	General Manager(Operations)
Name :	Lt. Col. (Retd.) B. S. Bakshi
Designation :	Dy. General Manager(Human Resource & Strategic Planning)
Name :	Mr. S. K. Mukherji
Designation :	Chief(Marketing)
Name :	Mr. G. Vaidyanathan
Designation :	Company Secretary & E.O.

MAJOR SHAREHOLDERS

Names of Shareholders (as on 31.03.2007)	No. of Shares	Percentage of Holding
Tata Steel Limited	1999350	36.53
Yodogawa Steel Works Limited	550000	10.05
Sojitz Corporation	110000	2.01
MTL Share and stock Broker limited	82603	1.51
Mr. Kashi Prasad Purohit	52800	0.96

Shareholding pattern of the company as on 31.03.2007:-

Category	No. of Shares	Percentage of Holding
Indian Public Limited	2363639	43.19
Bodies Corporate	301400	5.51
Promoters	2775932	50.72
FIIs , NRIs	30129	0.55
Mutual Funds , Banks Fls	1700	0.03
Total	5472800	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of cast iron rolls and forged iron roll, Pig Iron and does Special Casting. Supplies cast iron roll to TISCO and other domestic steel player.

Products :

Product	ITC Code
Rolls for Rolling Mills	84553000
Parts of Crushing of Grinding machine	84742000
Pig Iron	72011000

Exports to :

Australia, Austria, Bangladesh, Belgium, Canada, Egypt, Germany, Indonesia, Kazakhstan, Nepal, Norway, New Zealand, Oman, Quatar, Saudi Arabia, Sweden, Singapore, South Africa, Triniland, Taiwan, UAE, Chez Republic and USA.

PRODUCTION STATUS (as on 31.03.2007):-

Particulars		Installed Capacity	Actual Production
Roll
· Steel Base and Cast Iron Rolls		13500	10635
· Forged Rolls			973
· Roll Castings for sale		---	285
Pig iron		40000	29815
Special Castings		---	697

NOTES: -

i) Installed capacity is as certified by the Managing Director and accepted by the Auditors

ii) Within the installed capacity of 13500 Tonnes of finished rolls, the Company produces Forged Rolls which is machined from Forged Hardened Rough Turned Rolls.

iii) Within the available foundry capacity, the Company also produces Rolls in 'as

iv) Production includes Pig Iron for internal consumption.

v) N.A. : Not Applicable in terms of Government of India's Notification No. S.O 477 (E) dated 25.07.1991

GENERAL INFORMATION

Suppliers:

· Lalwani Industries Limited

· Lalwani Metalliks Private Limited

Customers :

TISCO and other domestic steel market player

No. of Employees :

644

Bankers :

Bank of India, Jamshedpur, Bihar

IDBI Bank Ltd, Jamshedpur, Bihar

State Bank of India, Jamshedpur, Bihar

Facilities:

SECURED LOANS	31.03.2007 (Rs. in millions)
Term Loan
State Bank of India	20.000
IDBI Bank Limited	43.750
Cash Credit Account
Bank of India	107.184
Total	170.934

Security:

1. Term Loans from State Bank of India and IDBI Bank Limited. are secured by a first charge on the fixed assets of the Company, ranking pan passu.

2. Cash Credit account with Bank of India and IDBI Bank Limited are secured by hypothecation of tangible movable assets of the company including finished and semi-finished stocks, raw materials, stores and book-debts ranking pan passu. In addition they are secured by way of second charge on the immovable properties of the Company, ranking pari passu.

3. Installment of Term Loan due for repayment within the next year: Rs 37.500 millions (as at 31.03.2006 - Rs. 57.500 millions).

UNSECURED LOANS	31.03.2007 (Rs. in millions)
Short Term Loans
Bank of India	60.000
IDBI Bank Limited (foreign currency loan)	40.679
Fixed deposit	12.372
Total	113.051
Amount repayable within the next one year Rs. 108.172 millions (as at 31.03.2006 : Rs. 125.604 millions)

Auditors :

S. B. Billimoria & Company

Chartered Accountants

Bihar

Associates/Subsidiaries

v Tata Construction and Projects Limited

v Nilachal Refractories Limited

v Tata International Limited

v Tate Share Registry Limited

v Tata Iron and Steel Company Limited

v Tata Engineering and Locomotive Company Limited

v And Several Others (Tata Group of Companies)

Membership

Confederation of Indian Industry

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
10000000	Equity Shares	Rs.10/- each	Rs. 100.000 Millions
	Total		Rs. 100.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
5472800	Equity Shares	Rs.10/- each	Rs. 54.728 Millions
	Add : Forfeited Shares		Rs. 0.004 Millions
	Total		Rs. 54.732 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2007	31.03.2006	31.03.2005
SHAREHOLDERS FUNDS
1] Share Capital	54.732	54.732	54.732
2] Share Application Money	0.000	0.000	0.000
3] Reserves & Surplus	361.768	319.788	283.294
4] (Accumulated Losses)	0.000	0.000	0.000
NETWORTH	416.500	374.520	338.026
LOAN FUNDS
1] Secured Loans	170.934	191.777	175.111
2] Unsecured Loans	113.051	134.930	128.519
TOTAL BORROWING	283.985	326.707	303.630
DEFERRED TAX LIABILITIES	2.261	24.108	28.034
TOTAL	702.746	725.335	669.690
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]	311.594	338.199	376.811
Capital work-in-progress	0.000	0.000	0.000
INVESTMENT	66.699	16.492	4.149
DEFERREX TAX ASSETS	0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
Inventories	383.741	324.643	354.839
Sundry Debtors	436.217	394.977	353.163
Cash & Bank Balances	59.902	43.165	41.811
Other Current Assets	0.000	0.000	0.000
Loans & Advances	77.001	48.665	64.770
Total Current Assets	956.861	811.450	814.583
Less : CURRENT LIABILITIES & PROVISIONS
Current Liabilities	546.949	406.858	499.514
Provisions	110.775	61.486	57.133
Total Current Liabilities	657.724	468.344	556.647
Net Current Assets	299.137	343.106	257.936
MISCELLANEOUS EXPENSES	25.316	27.538	30.794
TOTAL	702.746	725.335	669.690

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		1884.346	1587.790	1234.357
Other Income		72.372	42.112	0.000
Total Income		1956.718	1629.902	1234.357
Profit/(Loss) Before Tax		153.250	75.646	84.240
Provision for Taxation		46.995	14.190	0.000
Profit/(Loss) After Tax		106.255	61.456	60.865
Export Value		353.829	306.065	149.027
Import Value		301.895	336.483	290.531
Expenditures :
	Manufacturing Expenses	1724.453	1472.579
	Interest	29.727	30.016	1150.117
	Depreciation & Amortization	49.288	51.661
Total Expenditure		1803.468	1554.256	1150.117

QUARTERLY RESULTS

PARTICULARS	30.06.2007	30.09.2007	31.12.2007	31.03.2008
	1^st Quarter	2^nd Quarter	3^rd Quarter	4 Quarter
Sales Turnover	485.100	483.800	503.200	625.200
Other Income	15.400	15.100	9.900	19.100
Total Income	500.500	498.900	513.100	644.300
Total Expenditure	445.300	459.700	472.700	597.600
Operating Profit	55.200	39.200	40.400	46.700
Interest	11.200	7.000	8.600	14.000
Gross Profit	44.000	32.200	31.800	32.700
Depreciation	11.800	11.700	11.300	7. 500
Tax	15.000	11.100	8.800	-5.400
Reported PAT	20.900	13.400	24.700	4.600

KEY RATIOS

Year	31.03.2007	31.03.2006	31.03.2005
Debt-Equity Ratio	0.77	0.88	0.58
Long Term Debt-Equity Ratio	0.27	0.43	0.34
Current Ratio	1.12	1.15	1.18
TURNOVER RATIOS
Fixed Assets	2.11	1.78	1.49
Inventory	6.02	5.28	4.96
Debtors	5.13	4.80	4.89
Interest Cover Ratio	5.89	2.65	8.73
Operating Profit Margin(%)	10.96	7.47	10.24
Profit Before Interest And Tax Margin(%)	8.65	4.59	7.11
Cash Profit Margin(%)	7.29	5.21	7.68
Adjusted Net Profit Margin(%)	4.98	2.33	4.55
Return On Capital Employed(%)	27.36	12.81	19.61
Return On Net Worth(%)	26.85	11.73	18.43

LOCAL AGENCY FURTHER INFORMATION

HISTORY

Subject is a joint venture company promoted by Tata Steel Limited in collaboration with Yodogawa Steel Works Limited and Nissho Iwai Corporation, Japan. It installed and commissioned a centrifugal casting machine in 1992 in collaboration with Eisenwerk Sulzau Werfen, Austria.

In June 1999, subject had entered into a Sales Representative Agreement and License and Know-how Agreement with world-renowned forged roll maker - Union Electric Steel Corporation, USA for transfer of technology for finishing forged rough turned and hardened steel rolls.

The company was promoted by Tata Steel in collaboration with Yodogawa Steel Works and Nissho Iwai Corporation, Japan, to produce steel, steel base and cast iron rolls to meet the cast roll requirement of TISCO and the domestic market. The company is India's largest roll producer and has been supplying rolls to all the major integrated steel plants, steel rolling mills, the paper, rubber, textile and food processing industries, the mint and other non-ferrous rolling units in the country. It has a 50% share in the domestic market. 

The company has also developed a number of import-substitute rolls. It exports its products to countries like Srilanka, Singapore, Vietnam, Qatar, Saudi Arabia, Philippines, the UAE, Iran, South Africa and the USA. 

To keep pace with the changing market and rolling practices, TAYO launched a comprehensive modernisation programme in 1990-91 (cost: Rs 250.000 millions) under which it introduced state-of-the-art technology to manufacture double-poured rolls through the centrifugal casting process. The technical know-how for the process was obtained from Eisenwerk Sulzau-Werfen (ESW), Austria, Europe's leading roll manufacturer with a fine export record. The centrifugal casting machine imported from the USA was commissioned during 1992-93. 

After modernisation, the capacity has increased to 9750 tpa of rolls. It is now being augmented to meet the growing demand for rolls as a result of the growth in the steel industry. It has also taken up the manufacture of special value-added castings, mainly for the power, steel and cement sectors. 

The company's first phase involving a capacity expansion of rolls to 12,500 tonnes at an outlay of Rs 240.000 millions, was completed during 1998-99, and second phase involving an expenditure of approximately Rs 150.000 millions for increasing the capacity to 14,000 tonnes has been held back. During the year 2003, the name of the company was changed to Tayo Rolls Limited. 

The company has entered into a licence and know-how agreement with the Union Electric Steel Corporation (UES), USA, a leading forged roll manufacturer of international repute for transfer of the technology for finishing forged rough turned and hardened steel rolls and has already procured the order for the same. Also, an agreement with UES to represent them in India for solicitation of order for forged hardened steel rolls manufactured by UES and orders for rehardening, reconditioning or repair of such rolls. 

During 2000-2001 the company commissioned the new cold-rolling mills and there was an increase in the demand for forged rolls. In the near future the company is planning to manufacture Tool Steel Rolls on its own. 

The company is planning to undertake a backward integration project of putting a miniblast furnace for manufacture of Pig iron at a cost of Rs.103.000 millions.

OPERATION AND SALES; 

During the year, the Company achieved a turnover (gross) of Rs.2215.500 millions, which is the highest ever achieved by the Company. The turnover of Rs.2215.500 millions compares with Rs.1844.700 of the previous year, registering an increase of 20%. The profit before tax was the highest ever since inception at Rs.153.300 millions as against Rs.75.600 millions in the previous year, recording an increase of 103%. The profit after tax was also highest ever at Rs.106.300 millions as compared to Rs.61.500 millions in the previous year. The significant improvements in the bottom line were brought about by all-round improvements during the year in all the segments of Company's business. In particular, the Mini Blast Furnace, which was commissioned by end of 2004-05, recorded an impressive performance. 

During the year, the production and sale of rolls were 11,608 t. and 11,422 t. respectively compared with 11,582 t. and 11,777 t. in the previous year. The production and despatch would have been higher but for the re-scheduling of orders and deliveries by certain key customers during the year. The sale of forged rolls was 956 t. compared to 904 t. in the previous year. 

The Company's exports of cast rolls was 3,562 t. compared to 3,741 t. in the previous year. In value terms, however, the export sale was higher during the year at Rs.306.800 millions compared to Rs.296.600 millions in the previous year. 

During the year, the sale of special castings has been at 697 t. against 590 t. in the previous year. The Company has established itself as a key supplier of special casting to various power plants in the country. 

There has been significant improvements in the MBF operations during the year. The turnover (gross) from MBF operation was Rs.532.900 millions as against Rs.265.600 millions in the previous year, recording an increase of 101%. During the year the production of pig iron was 29,815 t. compared to 20,895 t. in the previous year. The sale of pig iron was 27,834 t. compared to 16,652 t. in the previous year. The Company's foundry grade pig iron have been well accepted by the foundries producing engineering and automotive castings. 

FINANCIAL AND WORKING CAPITAL MANAGEMENT: 

During the year, the MBF production levels increased appreciably, resulting in significantly higher requirement of Coke and Iron Ore. However, through staggered imports and development of alternative sources for procurement of Coke, the inventory levels were optimised. Iron Ore requirements were closely monitored and the logistics were improved to maintain proper inventory balance. The Fe-alloys and Nickel prices have increased phenomenally, requiring higher working capital needs in terms of value. The Company developed multiple channels of sourcing of key inputs and maintained a just-in-time inventory levels. 

The long term loans availed by the Company from IDBI Bank Limited and State Bank of India in earlier years for financing the Roll expansion and setting-up MBF are being repaid as per schedule. During the year Rs.57.500 millions was repaid to the above lenders. 

The increase in CRR and other fiscal policies of RBI created liquidity pressure in the money market. The call money market witnessed high volatility and most of the banks revised upwards their PLR rates and short term lending rates. All these increased the cost of short term borrowings in the current year. However, a proper mix of borrowings in foreign currency, rupee currency and bill discounting through multiple banking enabled the Company to maintain the effective borrowing rate at a very competitive level. 

CRISIL, has reaffirmed their ratings of P1+ (the degree of safety for timely payment of interest and principal on the instrument is very strong) for Commercial Paper and FAA/Stable (the degree of safety for timely payment of interest and principal is strong) for Fixed Deposit Programme. 

Management Discussion and Analysis: 

Overview: 
The company was promoted in the year 1968 by Tata Steel Limited and Yodogawa Steel Works Limited and Nissho Iwai Corporation (now Sojitz Corporation) of Japan, for manufacture of rolls with a capacity of 7,800 tonnes. The Company has kept pace with technological upgradation with the help of technology from M/s. Yodogawa Steel Works Limited for cast roll manufacture through conventional casting process and M/s. Eisenwerk Sulzau-Werfen (ESW), Austria, for centrifugal casting process. The Company has since inception been a leading roll manufacturer in India. The capacity has been enhanced from time to time to keep pace with the growing demand for rolls from the steel sector. Presently the capacity is 13,500 tonnes.

Concurrently with the setting up of several cold rolling mills in India, the Company forayed into forged roll segment. The Company entered into technology agreement with M/s. Union Electric Steel Corporation (UES), USA, for transfer of technology for finish machining of rough turned hardened forged steel rolls, thus, becoming a one-stop-shop for all categories of rolls. Utilising its melting and foundry capacity and strength, the Company diversified into the area of special castings (Rings and Balls) for Power Plants in 1995-96. In February, 2005, as an initiative towards backward integration and to provide opportunity for diversification, the Company set-up a Mini Blast Furnace for manufacture of pig iron. Thus, the Company has three lines of business i.e., Rolls, Pig Iron and Special Castings. 

Rolls (Cast and Forged) : The Company presently has a capacity to manufacture 13, 500 tonnes of rolls. The range of rolls constitute cast iron and steel base rolls of various grades/sizes and forged rolls. The Cast rolls find application mainly in the rolling mills of the steel plants and also in non-metallurgical industries like paper, rubber, etc. Forged rolls are used in the cold rolling mills and also as `back-up' rolls in Hot strip mills. Rolls are tailor-made as per the mill requirement of the customers.

The Company has fully integrated and modern production facilities for cast rolls. For Forged Rolls, the Company imports semi-finished hardened forged blanks from various sources for finished machining at TAYO. The Company also gives technical support to the steel plants for the adaptability of these rolls at their mills. Roll operation is the primary segment constituting major portion of the Company's revenues. 

Special Castings : The Company utilises its existing Foundry capacity and, manufactures Ni-hard rings and balls for coal grinding crushing mills of Thermal Power Plants. 

Pig Iron : The Company has a Mini Blast Furnace to manufacture Foundry grade Pig Iron with a capacity of 40,000 tpa. The hot metal from MBF is partly used for captive consumption for cast rolls. The balance production is sold in the market. The Company produces various grades of Foundry grade Pig Iron and caters mainly in the Eastern Region. The pig iron grades have been well accepted by Foundries in Eastern Region. 

BUSINESS REVIEW AND OUTLOOK: 

The steel industry continued its buoyant run during the year 2006-07.

Expansion of capacity within its present facilities are taking place in major steel plants in India. MOUs have been signed by global and domestic players for setting up green field projects. The crude production globally is on the rise, the growth on year after year basis has been around 8%. The global steel production has touched 1,260 million tonnes during the year 2006. Major expansion is taking place in Asia with China holding the sway. With the growth plans announced by various steel majors, steel production in India is expected to touch around 60 Mn. tons by 2010 and around 110 Mn. tons by 2020. 

The growth in the steel industry offers tremendous potential for roll manufacture. The implementation of envisaged projects by the steel majors would definitely stimulate demand for rolls. However, it is likely that the demand will gather momentum only by end of the decade when most of the mills will be in place for rolling finished steel. The roll manufacturers are gearing up to the changing scenario of aggressive growth and building-up capacities. With both automobile and infrastructure sectors showing healthy growth rate, there will be a demand-push effect for both flat product and long product rolls. Presently, major portion of the Forged Rolls requirements in India are being met through import channels. The demand for Forged Rolls continues to be on the upswing, with almost all Forged Roll manufacturers have their order books filled up for the next 2-years. This has resulted in poor availability of forged blanks. The Company had developed newer sources for forged blanks during the year to meet the customers' requirement of Forged Rolls. 

During the year, the turnover of cast and forged rolls increased by 20%. The volume of despatch of cast rolls was affected by deferment of orders and rescheduling of deliveries by some key customers.

Given the cycle time involved in manufacture, the deliveries could not be made within the year. However, inspite of lower despatches in the current year, the roll segment performed creditably because of the focus on margins and value added grades. The price of Nickel was highly volatile and rose to peak levels from Rs.711/- per kg. to Rs.2115/- per kg. In addition, furnace oil and gas also witnessed steep increases during the year. Despite these increases, the Company has been able to improve its overall margins by optimising its product-mix. In addition to giving thrust to Company's established grades of high chrome iron and high chrome steel rolls, the Company stabilised the production of Hi-speed steel rolls by executing repeat orders in the current year. The Company developed, Micro Alloyed ICDP (MITE) roll and Enhanced Carbide (TEK) roll grades in-house and supplied during the year. These rolls were well received by the customers. 

The Company continues to focus on export. During the year, the Company made entry into newer markets by supplying rolls to leading steel manufacturers like CELSA, Norway and bagging orders from Tonghua Steel, China and Ternium group in Latin Amercia. The Company retained its existing overseas customers and repeat orders have been placed by them for rolls. 

OPPORTUNITIES AND THREAT: 

The Company has established itself as a leading roll manufacturer in India over the past 3 decades. Having established its presence in the Quality Conscious Europe, Middle-East and South-East Asian markets, the Company is now making in-roads in the emerging economy of China and Latin America.

This coupled with `Tata' Brand would definitely widen-up the opportunity for the Company to expand its export base. 

With the take over of Corus, Tata Steel has emerged as fifth largest steel manufacturer of the World. As an existing supplier of Quality rolls to Tata Steel (cast and forged rolls), this would give an opportunity to the Company to become a preferred supplier of rolls to the Corus as well. 

The takeover of Corus and other overseas plants by Tata Steel coupled with the developments taking place in the Indiari steel industry, gives lots of opportunities to the Company to grow. 

The entry of low-end manufacturer of rolls as also the cheap imports of rolls from China and CIS countries continues to be a great challenge to the Company. However, the Company through compressing cost at all the possible areas and keeping high standards of quality, is confident of maintaining its leadership. The Company in the longer run would strive to position itself as a high-end and high value roll supplier. 

OUTLOOK: 
The Company having set its own standards in the Indian roll market, has always been first in introducing various new grades of rolls. The Company was the first to indigenously manufacture and supply ICDP rolls through centrifugal cast route. Also it has the distinction of introducing indigenously manufactured Hi-chrome steel rolls in the Indian market.

Keeping pace with latest in the roll technology, the Company manufactured Hi-speed steel rolls for the first time in India and supplied in the Indian market. The performance of the Hi-speed steel rolls has been found to be encouraging and repeat orders have been placed by the customers. Besides developing newer grades of rolls to improve the performance, the Company is closely working with leading Research Laboratory and Academic Institutions to strengthen its research and development activities. During the year, the Company re strengthened its relationship with M/s. Yodogawa Steel Works Limited, Japan. The Company and Yodogawa have agreed to exchange their respective expertise and experiences in developing new grades of rolls and bringing about improvement in the quality and cost of manufacturing. All these initiatives will go a long way in enhancing the Company's presence in the global market. 

The Mini Blast Furnace (MBF) which was installed as a part of backward integration has picked up its momentum. Consistency has been brought in the quality of the pig iron. The Company has established itself as a Quality supplier of foundry grade pig iron in the Eastern Region. The captive usage of the pig iron has given considerable savings in cost to the Company.

Opportunity exists for the Company to manufacture value added products. In this connection the Company proposes to put up an integrated facilities for manufacture of Engineering Forgings and Forged Rolls. 

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE: 

Revenue : The total revenue (gross) increased from Rs.1840.000 millions to Rs.2220.000 millions, an overall increase of about 21%. There was an increase of Rs.117.200 millions i.e., from Rs.1397.500 millions to Rs.1514.700 millions in the revenue of roll segment. The revenue of pig iron segment increased from Rs.265.600 millions to Rs.532.900 millions, an increase of 101% over the previous year.

There is a marginal increase in the export earning from Rs.306.800 millions to Rs.296.600 millions during the year 2006-07. The revenue from Special Castings increased 18% from Rs.60.100 millions to Rs.70.700 millions. 

The profit before tax increased from Rs.75.000 millions to Rs.153.300 millions, resulting in 103% higher than the previous year. The profit after tax was also higher by 73% an increase from 61.500 millions to Rs.106.300 millions. 

The company has technical collaboration with Eisenwerk Sulzau Werfen, Austria.

It also has Sales Representative Agreement and License and Know-how Agreement with Union Electric Steel Corporation, USA.

The company is gearing itself to manufacture tool steel rolls in the near future.

The company has been accredited with ISO 9002 Certification.

Fixed Assets

· Leasehold Land,

· Buildings,

· Plant and Machinery,

· Technical Know-How Fees,

· Furniture, Fixtures and

· Office Equipments And

· Vehicles.

OTHER DETAILS:

Contingent Liabilities	31.03.2007 (Rs. in millions)
Income tax appeals
By Company	---
By department	6.575
Other matters	9.843
Bills discounted with bankers	76.176

Guarantees given by Bank —

i) Under EPCG Scheme for concessional duty on import of machinery furnished to the

Custom authorities — Rs. 17.700 millions (as at 31.3.2006: Rs. 20.308 millions)

ii) on other account — Rs. 32.636 millions (as at 31.3.2006 : Rs. 43.937 millions)

The above guarantees are secured by supplemental deed of hypothecation of the assets stated in Schedule C and also counter guarantees given by the Company.

Leasehold land includes Rs. 0.175 millions (as at 31.3.2006: Rs. 0.175 millions) for which documents are yet to be executed. The Company has applied to the Bihar Government for exemption of its lands (other than leasehold land referred to hereinbefore for which documents are pending execution) from the Urban Land (Ceiling and Regulation) Act, 1976. The decision of the Government is still awaited.

As per Website

Subject is a subsidiary of TATA Steel and was promoted in 1968 in collaboration with Yodogava Steel Works of Japan. To update with the developing technology, in 1992, Tayo forged an alliance with ESW of Australia for technical up-gradation.

Since inception, Subject has been a market leader and has met the Country’s roll requirement for a vide variety of industries. Through continuous improvements both in process as well as products, Subject has kept pace with the changing needs of the industry thus providing more value to its customers in terms of more rolling per roll.

Subject’s services to its customers are met through dedicated employees who have rich experience and are as well as cold rolling applications.

The company has successfully diversified into production of special Castings for use in Power Plants and has made significant presence in the industry.

Subject enjoys a wide customer base in India. It has also been exporting rolls to Australia, Austria, Bangladesh, Belgium, Canada, Egypt, Germany, Indonesia, Kazakhstan, Nepal, Norway, New Zealand, Oman, Quatar, Saudi Arabia, Sweden, Singapore, South Africa, Triniland, Taiwan, UAE, Chez Republic and USA.

Subject ensures that its products not only meet customer expectation but also with after sales services which are comparable to the best in the world.

Products

Hot Rolling Application

Subject has the capability and the capacity to meet the most demanding mill requirements. Subject have been custom designed to roll flat as well as long products.

Subject’s Technical advice on sound mill practices are backed by the experience of Tata Steel, a frontrunner in the steel industry in India.

Subject is also catering to the Domestic Cold Rolling sector by importing Forged Heat treated rough turned blanks from Union Electric Steel, USA. These blanks are finished and ultrasonic tested at Subject before final delivery to the customer.

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.42.84
UK Pound	1	Rs.84.78
Euro	1	Rs.67.32

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	8
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	8
--RESERVES	1~10	8
--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		72

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