MIRA INFORM REPORT

Report Date :

11.06.2011

IDENTIFICATION DETAILS

Name :	TAURIAN IRON AND STEEL COMPANY PRIVATE LIMITED
Registered Office :	302 A, Poonam Chambers, Dr. A.B. Road, Worli, Mumbai – 400018, Maharashtra
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	18.11.1997
Com. Reg. No.:	11-111937
Capital Investment / Paid-up Capital :	Rs.72.761 Millions
CIN No.: [Company Identification No.]	U51900MH1997PTC111937
Legal Form :	Private Limited Liability Company
Line of Business :	Subject is the Mining Company. It is also engaged in the business of exporting of Iron Ore.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

Ba (51)

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

Maximum Credit Limit :	USD 5300000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and a reputed company having fine track. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – April 1, 2010

Country Name	Previous Rating (31.12.2009)	Current Rating (01.04.2010)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

LOCATIONS

Registered Office :	302 A, Poonam Chambers, Dr. A.B. Road, Worli, Mumbai – 400018, Maharashtra, India
Tel. No.:	91-22-66698000
Fax No.:	91-22-66698010 / 20
E-Mail :	taurian@vsnl.com
Website :	www.tauriansteel.com
Mines :	Joshi Bagan, Near Hospital Road, Barbil, Orissa, India
Tel. No.:	91-6767-277454 / 277480 / 262266
Factory :	Khasra No 193, Village-Raipur , Bhagwanpur, Roorkee, Haridwar, India
Tel. No.:	91-1332-281608 / 232640 / 124-2255038 / 5519017

DIRECTORS

As on 30.09.2010

Name :	Mr. Sumit Lalitkuamar. Baila
Designation :	Director
Address :	303, Subh Apartment, Co-operative Housing Society, B. G. Kher Road, Worli, Mumbai – 400 018, Maharashtra, India
Qualification :	DMS, B Sc.
Date of Birth/Age :	01.03.1973
Date of Appointment :	18.11.1997
Name :	Mr. Amith Lalitkuamar. Bajla
Designation :	Director
Address :	303, Subh Apartment, Co-operative Housing Society, B. G. Kher Road, Worli, Mumbai – 400 018, Maharashtra, India
Qualification :	LLM, LLB
Date of Birth/Age :	02.07.1974
Date of Appointment :	24.11.1997
Name :	Mr. Pradeep Kumar Jain
Designation :	Additional Director
Address :	Main Road, Ranchi, Jharkhand, India
Date of Appointment :	20.07.2005
Date of Ceasing:	18.03.2010
Name :	Mr. Hemant Rathor
Designation :	Additional Director
Address :	Station Road, PO Box – 24, PO Chaibasa – 833201, District Singhbhum West, Jharkhand, India
Date of Appointment :	20.07.2005
Date of Ceasing:	04.10.2009

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.09.2010

Names of Shareholders	No. of Shares
Puja Bajla	1887100
Lalit Kumar Bajla	1537000
Taurain Engineering Private Limited, India	1274212
Sumit Bajla	710000
Amith Bajla	710000
Arpita Bajla	417400
Prema Bajla	390000
Aruna Jhunjhunwala	50000
Suraj Ghiraiya	40000
Nivedita Dayanand Anand	22500
Pradeep Jain	20000
Pandey Bimal Shetty	2000
Gopi Poddar	20000
Atul Hirawat HUF	19000
Rakesh Kumar Sharma	15000
Harsh Sekhsaria	14113
Savitha Dalmia	10000
Hemant Rathor	10000
Yogesh Rungta	10000
Jyoti Choudhary	10000
Shoe Kumar Poddar	10000

As on 30.09.2010

Equity Share Breakup	Percentage of Holding
Category
Bodies corporate	17.51
Directors or relatives of directors	77.88
Other top fifty shareholders	4.61
Total	100.00

BUSINESS DETAILS

Line of Business :

Subject is the Mining Company. It is also engaged in the business of exporting of Iron Ore.

GENERAL INFORMATION

Bankers :

• IDBI Bank Limited, IDBI Tower, WTC Complex, Cuffe Parade, Mumbai – 400005, Maharashtra, India
• ICICI Bank Limited, Landmark Race Cource Circle, Alkapuri, Baroda-390015, Gujarat, India

Facilities :

Secured Loan	As on 31.03.2010 (Rs. in Millions)	As on 31.03.2009 (Rs. in Millions)
Loans and advances from Banks
Working Capital Loans (Working capital Loans are secured by hypothecation of goods, book debts and all other movable assets and by way of equitable mortgage of properties in the name of the Company as well as directors as collateral securities and personal guarantee of directors)	490.648	668.216
Term Loans	365.930	361.337
Loans and advances from other
Term Loans (Amount payable within one year Rs.25.207 millions) (Previous year Rs.125.350 millions) (Term loans are secured against hypothecation of certain assets)	53.991	264.663
Total	910.569	1294.216
Unsecured Loan
Other than short term
From a shareholder	16.371	92.410
From a non banking financial institution (Amount payable within one year Rs.79.223 millions) (Previous year Rs. Nil)	107.653	0.000
Total	124.024	92.410

Banking Relations :	--
Financial Institution:	Sundaram Finance Limited, 21 Patullos Road, Chennai-600002, Tamilnadu, India
Auditors :
Name :	Deloitte Haskins and Sells Chartered Accountant
Address :	12, Dr. Annie Besant Road, Opposite Shiv Sagar Estate, Worli, Mumbai-400018, Maharashtra, India
Tel. No.:	91-22-66679000
Fax No.:	91-22-66679025
Associates/Subsidiaries :	Taurian Global Investment Limited, UAE Taurian CISA

CAPITAL STRUCTURE

As on 30.09.2010

Authorised Capital :

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

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
7276090	Equity Shares	Rs.10/- each	Rs.72.761 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2010	31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		72.761	72.761	63.661
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		1259.084	1100.636	982.716
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		1331.845	1173.397	1046.377
LOAN FUNDS
1] Secured Loans		910.569	1294.216	1387.847
2] Unsecured Loans		124.024	92.410	0.000
TOTAL BORROWING		1034.593	1386.626	1387.847
DEFERRED TAX LIABILITIES		307.500	325.633	331.433
TOTAL		2673.938	2885.656	2765.657
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1329.921	1377.766	1495.525
Capital work-in-progress		88.847	87.046	468.835
INVESTMENT		59.388	33.390	40.146
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	411.184	395.244	390.665
	Sundry Debtors	399.629	157.602	369.051
	Cash & Bank Balances	139.736	68.478	131.598
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	929.435	1149.290	540.120
Total Current Assets		1879.984	1770.614	1431.434
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	419.418	194.422
	Other Current Liabilities	230.390	185.695	656.686
	Provisions	34.394	3.043	13.597
Total Current Liabilities		684.202	383.160	670.283
Net Current Assets		1195.782	1387.454	761.151
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		2673.938	2885.656	2765.657

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income
		Other Income
		TOTAL	4237.028	4195.124	4386.602
Less	EXPENSES
		Office Expenses
		Administrative Expenses	3988.106	4010.554	3726.554
		Advertising Expenses
		TOTAL	3988.106	4010.554	3726.554
	PROFIT BEFORE TAX		248.922	184.570	660.048
Less	TAX		81.990	66.650	230.700
	PROFIT AFTER TAX		166.932	117.920	429.348
	EARNINGS IN FOREIGN CURRENCY
		Exports at FOB Value	2588.322	2892.283	3253.699
		Sundry Recoveries	83.317	0.890	0.068
	TOTAL EARNINGS		2671.639	2893.173	3253.767
	IMPORTS
		Material Imports-Traded Goods	731.462	1.030	NA
	TOTAL IMPORTS		731.462	1.030	NA
	Earnings Per Share (Rs.)		22.94	16.67	NA

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	3.94	2.81	9.79
Return on Total Assets (PBT/Total Assets}	(%)	7.75	5.86	22.55
Return on Investment (ROI) (PBT/Networth)		0.19	0.16	0.63
Debt Equity Ratio (Total Liability/Networth)		1.29	1.51	1.97
Current Ratio (Current Asset/Current Liability)		2.75	4.62	2.14

LOCAL AGENCY FURTHER INFORMATION

PERFORMANCE OF THE COMPANY

The sales turnover of the Company has increased from Rs. 4195.124 millions to Rs. 4237.028 millions. The Net Profit has increased from 117.920 millions of previous financial year to Rs. 166.932 millions in the current financial year.

REVIEW OF OPERATIONS

After the strained economic slowdown-ridden last year, the Company’s consolidated performance is better during the year, riding the rebound in the demand and realisations of iron ore. The Company faced problems of decreasing demand which resulted in low realisations. In a business where the proportion of overheads is generally low, profit increases are sharp when realisations rise – and vice versa. Consequently, when demand and realisations are low, the impact is usually visible in a poor bottomline. As a result, the biggest challenge for the Company was to manage realizations and still stay profitable during the year.

The Company recognised that the need of the day was to maintain customer relationship, maintain delivery schedules, deliver right and quality and ensure that customers derived the right productivity using their material. Fortunately, India’s steel demand revived faster than in other countries, reflected in 18% decrease in average per tonne iron ore domestic net realisations. The Company’s optimism regarding iron ore is derived from the under penetration and prospective growth of the developing countries, led by India and China. For instance, steel is core to downstream uses in power, infrastructure and automobiles, among others; there is significant opportunity for the development of Tier II and Tier III Indian cities. The more steel is used – as it must – the greater will be the demand for iron ore. From a long-term perspective, finite resource like iron ore will always be bullish with consumption led increased demand

During the year 8.75 MW Wind Power Project from Sangli generated the revenue of Rs.54.486 Millions and 7.50 MW Wind Power Project at Kutch has generated the revenue of 53.715 Millions.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The year gone by in 2009-10 was a year of stabilization and recovery for the global economy post global economic meltdown and subsequent economic recession. After plunging into the steepest economic contraction since the great depression, the global economy witnessed significant improvement during the year. Although the process of recovery continues, the recent sovereign debt crisis in a few European economies poses new obstacles towards sustained growth and stability on a long term basis. According to the latest world economic outlook published by International Monetary Fund (IMF) in April 2010, world economy is expected to grow by 4.2% in 2010 as against a decline of 0.6% in 2009.At the heart of this recovery was the co-ordinated fiscal action by the world powers, including India, to stimulate the economies. In a sign of shifting economic might, China and India were at the forefront of this recovery added by their relatively stable domestic demand.

India was one of the first countries to recover from the global economic crisis on account of its strong domestic demand. In India, the economic growth exceeded expectations and grew by an impressive 7.4% GDP growth rate during FY 2009-10. The financial year 2009-10 saw large volatility in inflation numbers with food prices witnessing the steepest increase. As per estimates, the outlook for the 2010-11 looks encouraging backed by normal monsoon, higher agriculture productivity and buoyancy in industrial output and exports. In the year 2010-11, the GDP is likely to grow by 8.5%.

OVER VIEW OF THE ECONOMY

WORLD IRON AND STEEL SCENARIO – 2009

Global crude steel production during the year 2009 was 1.22 billion tonnes down 8% over 2008 driven mainly by growth in China. During 2009, China's crude steel production was about 569 million tonnes as against 500 million tonnes in 2008 registering an impressive growth of 13.5%. Rest of the world (world-China) showed a decrease of 21% in crude steel production to 652 million tonnes in 2009 compared to 826 million tonnes during 2008. Meanwhile, world iron ore production reached (estimated) 1.83 billion tonnes during 2009 registering an increase of 2.8% over 2008 production level of 1.78 billion tonnes.

Macro-Economic Perspective

As would recall, given the events of the global financial markets in 2008, most of us were expecting the worst at the beginning of 2009-10. Several developed economies, including the US had gone into recession. Even rapidly growing emerging economies including China and India were witnessing a slowdown. However, it was heartening to see positive signals emerge as one progressed through 2009-10. As the global financial system began to stabilise, one saw renewed capital flow especially to emerging economies. In the third quarter of 2009, USA came out of its economic contraction and registered positive quarter-on-quarter growth, which has continued for the next three quarters. It does seem that the world economy has started recovering from the lows of 2008-09.Having said so, it is important to understand that there are still some concerns. Although the US is expected to grow its real GDP by a bit over 3% in 2010, the same cannot be said about most of the developed world. Most countries in the Euro zone recorded negative or very low GDP growth in the same period. There are also some concerns with sovereign deficits in these countries. Clearly, there are considerable uncertainties about the economic prospects of these advanced countries. Simultaneously, one is witnessing a clear shift in economic plays across geographies. Despite a slow first half and expectations of a sharp drop in growth, China achieved 8.7% GDP growth in 2009, and is forecasted to grow at around 9.7% in 2010. India is estimated to grow by 7.4% in 2009-10, and then cross 8.4% in 2010-11. Brazil is stated to grow at over 5.5% in 2010. These three major emerging economies have not only emerged out of the slowdown, but are also expected to deliver significantly higher GDP growth in the next few years. From a macroeconomic point of view these developments reinforce the strength in Taurian business strategy for emerging economies.

Business Perspective

While strategic positioning is important, the mettle of an enterprise is best judged when its execution skills pass the tests in difficult business conditions. On the one hand, it is true that India and China are back on their high economic growth trajectory. Equally, on the other hand, it is important to note that the first six months of 2009-10 saw very subdued economic activity and demand in these countries. It is in the second half that the growth momentum picked up. In this business environment, the Company’s performance speaks for its execution skills

Macro-Economic Developments

Taurian primarily caters to the global steel market, and being a core industrial product, steel consumption has a strong correlation with economic growth. By the second half of 2009-10, the global economy was on a recovery mode. Not so much in Europe, or even the US; but certainly the developing countries, especially China, India and Brazil. The real GDP growth data of the two fastest growing emerging economies –China and India. After three quarters of reduction, China’s economic growth improved steadily from Q2, 2009, to finally post 8.7% GDP growth for calendar year 2009. India too recovered from a slump and the Central Statistical Organisation (CSO) estimates a growth of 7.4% for the financial year 2009-10. Both these countries have come out of the slowdown and are poised to regain a higher growth momentum.

Over the last five to seven years, given the lower cost structures, global steel production has been shifting away from developed countries to emerging economies, particularly China. China’s production has been growing at a much faster pace than global output over the last eight quarters. Post the financial and economic crisis of 2008, steel demand is also shifting towards the emerging economies, with steel consumption in the emerging economies of Brazil, Russia, India and China (BRIC) increasing by 3.2% in 2008 and 19.2% in 2009. China alone witnessed a massive 27.4% increase in steel consumption in 2009. Growth in steel demand is now emanating from emerging economies. This changing landscape of the global iron and steel industry in terms of demand and supply has resulted in new opportunities and challenges. Fundamentally, given that China, Brazil, India and other emerging economies are in different phases of development compared to the advanced world, there is a re-alignment in favour of costs and towards more value-driven products. Consequently, competitive pricing and effective utilization of resources are increasingly becoming key strategic objectives for steel producers.

INDUSTRY STRUCTURE AND DEVELOPMENTS

IRON ORE

Iron Ore is traded in different forms - lumps, fines, concentrates and agglomerated (pellets and sinter). The Company deals mostly in fines and lumps. Iron ore is a major raw material for production of steel through blast furnace route. The Company leverages its geographical proximity to China, the world’s largest iron ore fines consumer. Consequently, Taurian became a preferred supplier and gained better price negotiating power than competitors in other countries.

PRODUCT ANALYSIS

Taurian's Iron ore reserves consist of lump and fine ore, production ratio is 60% fines and 40% Lumps. The lump ore component in mines in Jharkh and is of higher-grade deposits, Fe content ranging between 58% and 63%.

OUT LOOK

Going ahead, the Company’s prospects seems bright owing to: Investment in capacity creation with enhanced output Widened revenues from iron ore to Coal to Gold to finance its enhanced capital expenditure, working capital outlay including a proposed pelletisation and beneficiation plant. These investments will enable the Company to enhance output resulting in enhanced margins. The Company expects to enhance its net turnover from 4237.000 Millions in 2009-10 to a projected 15000.000 Millions by FY 2013, with more value addition, thus enhancing shareholder’s value. The Company intends to undertake several important initiatives in future to strengthen its business: Focus on robust domestic iron ore demand Grow both organically and inorganically through mine acquisitions and its development Widen the product basket through growing ownership of bauxite, soapstone, Gold and coal mines etc. within India and abroad In doing so, the Company intends to emerge as one of the largest players in India’s mining industry

Why they are optimistic about their iron ore business by 2015-16, India is expected to emerge as the world’s second-largest crude steel producer (Source: Ministry of Steel). India’s 2011-12 finished steel consumption is projected at 70.34 MT, production 80.23 MT and capacity 124 MT (Source: Ministry of Steel).Various states signed a total of 222 MoUs for planned capacity of around 276 million tonnes per annum of steel production (Source: Ministry of Steel).Indian steel makers are set to make the most of the booming global demand for steel pipes and tubes with the government withdrawing the 10% duty on the export of these products (Source: IBEF).

THE FUTURE IS HERE IN MORE SENSES THAN ONE. Until 2003, Asia accounted for 45% of global steel production and in 2009-10, it accounted for a 65% share. The two biggest drivers of the continent’s re-rating are China and India. China accounted for 47% of the world’s steel production in 2009-10; India accounted for around 5%.

THE BIG PICTURE

India’s share of global steel production increased from 3.7% in 2003-04 to around 5% in 2009-10.ing

Mining overview

India’s GDP growth was catalysed by the mining industry; every rupee invested in the mining industry generated `2.4 of output (directly or indirectly) in the country’s economy. Mining contributed about 2% to the country’s GDP (Source: Central Statistical Organisation). The sector grew 8.7% in 2009-10 compared with 1.6% in 2008-09 (Source: Economic Survey, 2009-10). Mining makes a significant contribution to India’s overseas trade (in ore and refined form). Total ores and mineral exports in 2008 were `950.22 billion, an increase of 17% over the previous year and nearly double the value in 2003-04 (Source: Indian Infrastructure, March 2010) The New Mineral Policy 2008 inspired the government to make mining economically profitable, technically appropriate, environmentally safe and socially responsible. During 2008-09, 210 proposals for mining leases, 44 proposals for reconnaissance permits and 280 applications for prospecting licenses were received, reflecting growing interest. The industry’s outlook is positive, reflected in a relatively low exploration compared to peer countries that will need to be corrected.

Global iron ore industry

Iron, the fourth-most abundant rock and constituting about 5% of the earth’s crust, is the world's most commonly used metal. Global iron ore deposits are estimated at 800 billion tonnes, containing more than 230 billion tonnes of iron. Iron ore is mined in more than 50 countries and the world’s largest iron ore producing nations are Russia, Brazil, China, Australia, India and the US.

Production: As per the US Geological Survey (USGS), the global iron ore reserve base totalled 1,60,000 million tonnes of crude ore with an iron content of more than 77,000 million tonnes. Ukraine has the world’s largest reserve base of 30,000 million tones followed by 25,000 million tonnes in Russia, 22,000 million tonnes in China and 20,000 million tonnes in Australia. Most of the world’s high grade ores are located in Brazil and Australia. China has low-grade ores but is still the world’s largest iron ore producer.

Consumption: About 98% of the world’s iron ore is consumed in the production of pig iron, which is processed into steel. Iron ore is considered more integral to global growth than any other commodity because steel consumption is greater than the consumption of all other metals combined together. The iron ore which is not used to produce pig iron is used in a variety of other applications including cement, pigments, agricultural products and specialty chemicals.

Prices: Global iron ore prices surged more than two-fold in 2009 to around US$130 a tonne following strong demand from China and an economic recovery in Europe and the United States (Source: Reuters, 11th March 2010). The major factors driving iron ore prices were a rising Chinese steel output and growing import dependence on iron ore. Besides, the oligopolistic supply side (three companies control over 75% of the global sea-borne iron ore trade) resulted in a tightening demand supply and price surge. However, a significant change is expected. Traditionally, the big three global miners (BHP Billiton, Rio Tintoand Vale) used a benchmark system of annually negotiated prices with Chinese steel mills, as they did in other countries. The rise in prominence of China’s spot market and the huge disparity between spot and contract prices resulted in a probable systemic overhaul resulting in quarterly prices as opposed to annual contracted prices.

Indian iron ore industry

India is the fourth-largest producer of iron ore, possessing the richest iron ore deposits. Accessible and high grade iron ore reserves – free from impurities like phosphorous and sulphur and considered good for smelting – account for almost two thirds of the total iron ore reserves in the country.

Reserves: India possesses 6% of global iron ore reserves and ranks fifth in the world in iron ore reserve ownership. The Indian Bureau of Mines estimated the country’s total iron ore reserves at 25.2 billion tonnes. The principal iron ores are hematite (70% iron) and magnetite (72% iron). Hematite accounts for 58% of the total iron ore reserves, mainly in Orissa (33%), Jharkhand (28%), Chhattisgarh (19%), Karnataka (11%) and Goa (5%). Magnetite accounts for 42% of the total (74%), Andhra Pradesh (14%),Rajasthan (5%) and Tamil Nadu (4%).The remaining 3% is accounted for by Kerala, Assam, Jharkhand, Nagaland, Bihar and Maharashtra. At the current domestic production levels of 230 million tonnes of ore in 2009-10, the country’s available reserves are expected to last around 90 years. Fines and concentrates make up about 90%of iron ore exports.

Demand: The demand for Indian iron ore is increasing; through 2006 to 2009, China imported 74.78 MT, 79.53 MT, 91.04 MT and 107 MT ores from India, marking annual increases of 9.08%, 6.36%, 14.47% and 18.08%. Although India’s iron ore exports are increasing, India’s share of total Chinese iron ore imports declined from 22.92% in 2006 to 20.73% in 2007 to 20.51% in 2008 and to 17.71% in 2009, indicating that India’s iron ore appetite is increasing (Source: steelorbis.com, 09 April 2010) consequent to an increasing steel output of 42.78 MT, 53.08 MT, 55.05 MT and 54.6 MT through 2006-09. Since lowquality grades accounted for about 70% of the 2008-09 ore output of 222 million tonnes, a number of miners invested in pellet plants to use lower grade powdery iron ore fines to make higher grade nodules, ideal for feeding blast furnaces in steel mills leading to improved downstream input-output efficiency (Source: Reuters, 11th March 2010).

Production: India’s iron ore production grew at a CAGR of 11.12% over the five financial years up to 2008-09 to reach 222 million tonnes (Source: Indian Infrastructure, March2010). In 2009-10, the country produced 230 million tonnes of iron Annual report 2009-10 25 ore and exported close to 106 million tonnes of iron ore to China. About 90% of its exports are to China in the form of fines, while the remaining 10% are iron ore lumps transported to countries like Korea and Japan (Source: Business Standard, 28 April, 2010). Moreover, the Steel Ministry seta steel production target of 124million tonnes per annum by 2012-13, more than double the current production capacity of around 54 million tonnes per annum in 2009 (Source: Business Line, 28 April,2010), widening the

market for ironore.

Exports: India is the world’s third largest iron ore exporter after Australia and Brazil, with most of its exports to China, the world’s largest steel industry hub. India’s iron ore export in 2009-10 was around 106 million tonnes as against 105 million tonnes in 2008-09 (Source: Business Line, 23April, 2010). To curb ore exports and ensure adequate material for the country’s steel industry, the Indian government raised the export duty on iron ore lumps from 5% to 10% and imposed a 5% duty on fines (bulk of iron ore exports) in 2010. The Indian Railways also increased freight on iron ore exports by `300 a tonne from March 2010. It is expected that iron ore exports will be around 100 million tones in 2010-11.

Bankers Charges Report as per Registry

This form is for	Creation of charge
Corporate identity number of the company	U51900MH1997PTC111937
Name of the company	TAURIAN IRON AND STEEL COMPANY PRIVATE LIMITED
Address of the registered office or of the principal place of business in India of the company	302 A, Poonam Chambers, Dr. A.B. Road, Worli, Mumbai – 400018, Maharashtra, India
Type of charge	Others
Particular of charge holder	Sundaram Finance Limited, 21 Patullos Road, Chennai-600002, Tamilnadu, India
Email	pv@sundaramfinance.in
Nature of description of the instrument creating or modifying the charge	Hypothecation Agreement Dated 26/03/2011 Bearing Cont # Fz421365
Date of instrument Creating the charge	26.03.2011
Amount secured by the charge	Rs.1.214 millions
Brief particulars of the principal terms an conditions and extent and operation of the charge	Rate of Interest 13.51% p.a. Terms of Repayment The Total Amount of Rs.1.214 millions (Finance Amount -- Rs.1.000 millions + Interest-- Rs.0.214 millons) is Repayable in 35 Installments. The 1st Installment Date Is 22/04/2011. Extent and Operation of the charge The Total Amount of Rs.1.214 millions (Finance Amount -- Rs.1.000 millions + Interest—Rs.0.214 million) is Repayable in 35 Installments. The 1st Installment Date Is 22/04/2011.
Short particulars of the property charged	1 No. of 2008 Model Tata Tipper HCV A

FIXED ASSETS:

• Freehold Land
• Leasehold Land
• Buildings
• Plant and Machinery
• Railway Sidings
• Windmills
• Vehicles
• Computer Systems
• Office Equipments
• Furniture and Fixtures
• Electrical Fittings
• Computer Software

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.44.72
UK Pound	1	Rs.72.93
Euro	1	Rs.64.72

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	6
--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	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		51

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	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
-	NB	New Business	-

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

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.