MIRA INFORM REPORT

Report Date :

28.09.2011

IDENTIFICATION DETAILS

Name :	REMI METALS GUJARAT LIMITED

Registered Office :	Plot No.1, GIDC Industrial Estate, Valia Road, Jhagadia District, Bharuch Jhagadia - 392001, Gujarat

Country :	India

Financials (as on) :	31.03.2011

Date of Incorporation :	06.10.1993

Com. Reg. No.:	04-020358

Capital Investment / Paid-up Capital :	Rs.650.615 Millions

CIN No.: [Company Identification No.]	L27100GJ1993PLC020358

TAN No.: [Tax Deduction & Collection Account No.]	MUMR14671G

PAN No.: [Permanent Account No.]	AAACR2121C

Legal Form :	A Public Limited Liability company. The company’s Share are Listed on the Stock Exchange.

Line of Business :	Manufacturer of Seamless Pipes

No. of Employees :	975 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

Ca [17]

RATING

STATUS

PROPOSED CREDIT LINE

11-25

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

Limited with full security

Status :	Moderate

Payment Behaviour :	Slow

Litigation :	Clear

Comments :	Subject is an established company having moderate track. Profitability of the company is under pressure. There appears huge accumulated losses recorded by the company. however, trade relations are reported as fair. Business is active. Payments are reported to be slow The Company can be considered for business dealings on a secured 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.

INFORMATION PARTED BY [General Details]

Name :	Mr. Kaushik
Designation :	Company Secretary
Contact No.:	91-22-66136121 [Direct]

LOCATIONS

Registered Office & Factory :	GIDC Industrial Estate, Valia Road, Jhagadia District, Bharuch - 392001, Gujarat, India
Tel. No.:	91-2645-619700 / 226305 / 6 / 7
Fax No.:	91-2645-226841 / 220403
E-Mail :	Rajaganesh_jagaraman@welspun.com Kaushik_kapasi@welspun.com
Website :	http://www.remimetals.com

Corporate Office 1 :	11 Cama Industrial Estate, Goregaon (East), Mumbai – 400063, India
Tel. No.:	91-22-2685 1998/ 5699 1155
Fax No.:	91-22-2685 3868
E-Mail :	rmgl@remigroup.com

Corporate Office 2 :	Welspun House, 4^th Floor, Kamla Mills Compound, Senapati Bapat Marg, Lower Parel (West), Mumbai 400 013, Maharashtra, India
Tel No.:	91-22-66136000
Fax No.:	91-22-24908020
E-Mail :	sales_pipes@remi.welspun.com sales_steel@remi.welspun.com

Sales Offices :	22, Nathlal Colony, Stadium Road, Navjivan Post, Ahmedabad 380 014 Tel : 91-79-2640 3235 Fax: 91-79-2646 4081 remiahd@yahoo.com Bondo House, 29 Ganesh Chandra Avenue, Kolkata 700 013 Tel : 91-33-2211 7221 Fax: 91-33-2236 4215 remical@vsnl.net 7/11, 13th Cross, 1st Main Road, Post Box 195, Vasantha Nagar (East), Bangalore 560 052 Tel : 91-80-2226 6933 Fax: 91-80-2225 5166 remigroup@cityonlines.com 4/16 B, Asaf Ali Road, Near Broadway Hotel, New Delhi 110 002 Tel : 91-11-2327 5815 Fax: 91-11-2328 7427 remidelhi@mantraonline.com 59 Mount Road, P.O. Box 3705, Chennai 600 002 Tel : 91-44-2854 6356 Fax: 91-44-2853 0352 remigroup@vsnl.net Saraf Bhavan, Dhantoli, Nagpur 440 012 Tel : 91-712-543 077 Fax: 91-712-548 156 asian1@nagpur.net.in 1-2-56 Gaganmahal Road, P.O. Box 1018, Domalguda, Hyderabad 500 029 Tel : 91-40-2754 6291 Fax: 91-40-2754 2646 remihyd@yahoo.com

DIRECTORS

As on 31.03.2011

Name :	Shri Atul Desai
Designation :	Chairman

Name :	Shri B K Goenka
Designation :	Director

Name :	Shri Murarilal Mittal
Designation :	Director

Name :	Shri Vijay Singh Bapna
Designation :	Director

Name :	Shri Rajendra C Saraf
Designation :	Director

Name :	Shri Rishabh Saraf
Designation :	Director

Name :	Shri Nirmal Gangwal
Designation :	Director

Name :	Shri Ramgopal Sharma
Designation :	Director

Name :	Mr. Abhishekh Mandawewala
Designation :	Director

KEY EXECUTIVES

Name :	Mr. Kaushik N. Kapasi
Designation :	Company Secretary

Name :	Mr. Raja Ganesh
Designation :	Assistant Manager

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.06.2011

Names of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of promoters and Promoter Group
1. Indian
Individuals / Hindu Undivided Family	382994	0.35
Bodies Corporate	89621193	82.65
Sub Total (A) (1)	90004187	83.00
2. Foreign
Bodies Corporate	4627.217
Sub Total (A) (2)	4627217
Total Shareholding of Promoters and Promoters Group	94631404

(B) Public Shareholding
1. Institutions
Mutual Funds / UTI	18430	0.02
Financial Institutions / Banks	130	0.00
Foreign Institutional Investors	23761	0.02
Sub Total (B) (1)	42321	0.04

2. Non Institutions
Bodies Corporate	2797683	2.58
Individual shareholders holding nominal share capital up to Rs. 0.100 million	7020472	6.47
Individual shareholders holding nominal share capital in excess of Rs. 0.100 million	2903092	2.68

Any other Specify	1040868	0.96
Clearing Members	10565	0.01
NRI	30303	0.03
Trusts	1000000	0.92
Sub Total (B) (2)	13762115	12.69
(B) = (B) (1) + (B) (2)	13804436	12.73

Shares held by custodians and against which depository receipts have been issued (C)	--	--
Promoters and Promoters Group	--	--
Public	--	--
Sub Total	--	--
--
Total (A) + (B) +(C)	108435840	100.00

Names of Shareholders	No. of Shares	Shares as % of Total No. of Shares
Shareholding belonging to the category "Public" and holding more than 1% of the Total No.of Shares
Brescon Corporate Advisors Limited	1,240,175	1.14
Details of Locked-in Shares
Welspun Steel Limited	10,476,280	9.66
Calplus Trading Private Limited	1,516,662	1.40
Magnificent Trading Private Limited	1,926,524	1.78
Widescreen Holdings Private Limited	5,698,815	5.26
Remi Finance and Investment Private Limited	1,034,372	0.95
Rajendra Finance Private Limited	1,034,515	0.95

Total	22,927,343	21.14

BUSINESS DETAILS

Line of Business :

Manufacturer of Seamless Pipes

Products :

Products Description	ITC Code No.
Non Alloy Steels	720600
Seamless Pipes	730400
Other Alloy Steels	722400

Terms :

Selling :

L/C / Cash / Credit

Purchasing :

L/C / Cash / Credit

PRODUCTION STATUS As on 31.03.2011

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
- Steel Bloom	--	--	150000	--
- Rolled Products	--	--	100000	--
- Seamless Pipes	--	--	70000	12366
- Steel	MT	--	--	109318**
* Not applicable in terms of Government of India’s Notification No.SO.477(E)dated 25th July 1991. ** Includes 7882 MT processed by third parties.(previous year 2972 MT)

GENERAL INFORMATION

Customers :

Steel

Echjay Industries Limited
Sadhu Forge Limited
Bharat Forge Limited
Ramkrishna Forgings Limited
Kadvani Forge Limited
Gna Group
Rij Engineering Limited
Ahmednagar Forge Limited
Mm Forge Limited
Bay Forge
Trinity Engineers Limited
Kalyani Forge Limited

Segments

Customer

Boiler	BHEL
	Thermax
	G.B. Engineering
	L&T MHI( Turbine and Boilers)
	ISGEC
	Veesons
	Alstom Italy
Projects	IOCL
	Nuclear Power Corporation Ltd
	UHDE India
	SAIL
	TOYO Engineering
Auto	Mahindra and Mahindra ( Tractors)
Auto	Marthwada Auto ( Vendor for Bajaj auto and Greaves Auto)
Gen Engg	Nitya Engineering ( For Summo Steel - USA)
	L&T Komatsu
	Normatek Italy
OCTG	Sankalp
	OCTL
	Fremak Industries Inc

Overseas Customers :

Segment	Customer
OCTG	Fremak Industries Inc
Boiler	Alstom Italy
Gen Engg	Nomatek Italy

No. of Employees :

975 (Approximately)

Bankers :

Bank of Baroda, Lower Parel, Mumbai, Maharashtra, India
Lakshmi Vilas Bank
Andhra Bank
Federal Bank
Corporation Bank

Facilities :

Secured Loan [Rs. in million]	31.03.2011	31.03.2010
Banks
Term Loans
– In Indian Currency	870.000	980.000
– Interest Accrued and Due	7.400	11.200
– In Foreign Currency	347.800	249.200
Working Capital Loans
– In Indian Currency	763.400	429.400
– In Foreign Currency	0.000	99.700
Total		1769.500
Note Term Loans are secured on pari passu basis, by way creation of: Equitable mortgage on fixed assets on first charge basis Hypothecation of moveable machinery by way of first charge Second charge on current assets namely stock and book debts Working Capital Loans are secured, on pari passu basis, by way of: First charge on current assets namely stock and book debts And second charge on fixed assets
Unsecured Loan [Rs. in million]	31.03.2011	31.03.2010
Sales Tax Deferment Loan	302.900	204.500
Electricity Duty Deferment	26.200	50.500
Interest Accrued/Deferred on Electricity Duty	0.300	0.500
Long Term Loan from Others	1408.500	1408.500
Total	1737.900	1664.000
Repayable within one year – Rs.26.200 Millions (Previous Year – Rs.24.300 Millions)

Banking Relations :	--

Auditors :
Name :	Chaturvedi and Shah Chartered Accountant
Address :	Nariman Point, Mumbai - 400021, Maharashtra, India

Associates :	Welspun Steel Limited Wide screen Holding Private Limited

CAPITAL STRUCTURE

As on 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount

110,000,000	Equity Shares	Rs.06/-each	Rs.660.000 millions
54,000,000	Preference Shares	Rs.10/-each	Rs.540.000 millions
			Rs.1200.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount

108,435,840	Equity Shares	Rs.06/-each	Rs.650.615 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

Particulars		31.03.2011	31.03.2010	31.03.2009
SHAREHOLDERS FUNDS
1] Share Capital		650.600	650.600	650.600
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		0.000	0.000	0.000
4] (Accumulated Losses)		(1414.000)	(888.600)	(495.100)
NETWORTH		(763.400)	(238.000)	155.500
LOAN FUNDS
1] Secured Loans		2015.600	1769.500	1057.500
2] Unsecured Loans		1737.900	1664.000	1370.300
TOTAL BORROWING		3753.500	3433.500	2427.800
DEFERRED TAX LIABILITIES		0.000	0.000	0.000

TOTAL		2990.100	3195.500	2583.300

APPLICATION OF FUNDS

FIXED ASSETS (Net Block]		2271.500	2454.900	1740.400
Capital work-in-progress		18.000	18.700	637.800

INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000

CURRENT ASSETS, LOANS & ADVANCES
	Inventories	863.200	956.200	750.500
	Sundry Debtors	1104.200	854.000	482.500
	Cash & Bank Balances	124.800	180.200	42.300
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	135.900	149.600	139.500
Total Current Assets		2228.100	2140.000	1414.800
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	1386.700	1309.600	869.000
	Other Current Liabilities	120.300	91.800	329.000
	Provisions	20.500	16.700	11.700
Total Current Liabilities		1527.500	1418.100	1209.700
Net Current Assets		700.600	721.900	205.100

MISCELLANEOUS EXPENSES		0.000	0.000	0.000

TOTAL		2990.100	3195.500	2583.300

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Income	5954.200	3715.000	2920.200
		Other Income	19.900	16.400	13.000
		TOTAL (A)	5974.100	3731.400	2933.200

Less	EXPENSES
		Purchases	0.000	0.000	98.100
		Material Cost	3869.600	2312.800	2023.100
		Manufacturing & Other Expenses	2043.400	1546.300	997.300
		Increase / (Decrease) in Stock	43.000	(72.400)	13.000
		Misc. Expenses Written off	0.000	0.000	0.000
		TOTAL (B)	5956.000	3786.700	3131.500

Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		18.100	(55.300)	(198.300)

Less	FINANCIAL EXPENSES (D)		312.200	149.400	120.700

	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		(294.100)	(204.700)	(319.000)

Less/ Add	DEPRECIATION/ AMORTISATION (F)		231.300	188..800	147.400

	Interest including Funded Interest waived as per –rehabilitation scheme		0.000	0.000	66.500

	Principal waived as per rehabilitation scheme		0.000	0.000	47.400

	Excess Depreciation Reversed due to change in method		0.000	0.000	0.000

	PROFIT BEFORE TAX (E-F) (G)		(525.400)	(393.500)	(352.500)

Less	TAX (I)		0.000	0.000	0.700

	PROFIT AFTER TAX (G-I) (J)		(525.400)	(393.500)	(353.200)

Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		(888.600)	(495.100)	(822.400)

	Adjustment on Reduction of Share Capital		0.000	0.000	680.500

	BALANCE CARRIED TO THE B/S		(1414.000)	(888.600)	(495.100)

	EARNINGS IN FOREIGN CURRENCY
		FOB Value of Export	72.400	4.200	1.900
	TOTAL EARNINGS		72.400	4.200	1.900

	IMPORTS
		Raw Materials	182.000	583.800	152.000
		Stores & Spares	93.100	66.800	32.400
		Capital Goods	0.000	17.500	46.000
	TOTAL IMPORTS		275.100	668.100	230.400

	Earnings Per Share (Rs.)		(4.85)	(6.72)	(3.37)

QUARTERLY RESULTS

PARTICULARS	30.06.2011
Type	1^st Quarter
Sales Turnover	1369.100
Total Expenditure	1349.100
PBIDT (Excl OI)	20.000
Other Income	3.000
Operating Profit	23.000
Interest	86.900
Exceptional Items	0.000
PBDT	(63.900)
Depreciation	55.300
Profit Before Tax	(119.200)
Tax	0.000
Reported PAT	0.000
Extraordinary Items	0.000
Prior Period Expenses	0.000
Other Adjustments	0.000
Net Profit	(119.200)

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	(8.79)	(10.54)	(12.04)

Net Profit Margin (PBT/Sales)	(%)	(8.82)	(10.59)	(12.07)

Return on Total Assets (PBT/Total Assets}	(%)	(11.68)	(8.56)	(11.17)

Return on Investment (ROI) (PBT/Networth)		(0.69)	(1.65)	(2.27)

Debt Equity Ratio (Total Liability/Networth)		(6.92)	(20.38)	23.39

Current Ratio (Current Asset/Current Liability)		1.46	1.51	1.17

LOCAL AGENCY FURTHER INFORMATION

OPERATIONS

Steel input cost has gone up during the year and increased in input cost could not be passed on to customers. Further, competition in steel has increased specially from unit having blast furnace, this is resulted into increase in higher inventory/ higher receivables which led to increase in working capital interest cost. Contribution from steel division has, therefore been reduced due to reduce realization per MT.

The Company has developed new grades in steel division and also rejections in pipes have been reduced. The Company has booked first ever big order in Exports.

MANAGEMENT DISCUSSION AND ANALYSIS

A) INDUSTRY STRUCTURE AND DEVELOPMENT

Increasing environmental concerns are leading to stricter regulatory enforcement, which has adversely impacted iron ore mining in India. Older mines are getting deeper and new mining licenses are not coming through due to regulatory and governance issues. As a result, growth in domestic iron ore production has been crippled during the last two years.

Global supply of iron ore are expected to remain tight for two years and supply of cocking coal to remain tight for 4-5 years. Peak shortage of both iron ore and cocking coal will restrict steel production growth. This is likely to put pressure on the margins of non-integrated steel producers dependent on imports for both raw materials.

Cost of coal started rising for sponge iron producers in FY09, as Coal India reduced linkages to the steel industry to meet demand from utilities. Coal linkages to steel producers have been cut to 50% now.

Rising demand in consumer and industrial sectors points to a stronger U.S economy. Steel demand in Europe, China, India, Russia, Brazil and Turkey is picking up.

India steel industry demand is set to rise further on growth in automobile, power, construction and infrastructure sector. India has a lower per capita consumption of steel compared to other leading nations and therefore there is tremendous room for further demand growth as the economy expands, additionally, housing demand and developments is expected to account for more steel consumption in the country. Besides, infrastructure accounts for the maximum steel consumption among the industry segments. Moreover, demand from other industries, such as process, and engineering are expected to grow in the coming years.

Coal prices may soften in the coming months, bringing respite to steel, cement and power companies. A drop in global commodity prices and softening of crude oil coupled with a sluggish demand from Japan are likely to have a cooling effect on coal prices. Prices of cocking coal is likely to come down as the situation has improved post-Australian floods. This will have an impact on the Indian prices as well. User industries

like steel will benefit from this drop in price

The oil and gas industry has been the primary end user and the biggest demand driver for pipes historically, with water infrastructure development and industrial applications being the other large demand centers. Increasing oil and gas prices typically drive exploration Capex, in turn fuelling demand for drilling activity (seamless pipes) and for the transportation of resources from the oil well to the end consumer (HSAW and LSAW pipes).

Seamless pipes find application in the oil and gas and automotive sectors (popularly known as Oil Country Tubular Goods, OCTG), as well as in boilers and mechanical components such as hydraulic cylinders. Demand is highly correlated with crude oil prices since the oil and gas sector is the primary end user of seamless pipes. The rising oil prices encourage higher EandP Capex for drilling activity, driving demand for seamless pipes.

B) OPPORTUNITY AND THREATS

Demand of steel in global market mostly depends upon growth of infrastructure in China, India and other developing countries. Constant increase in price of steel and cocking coal may affect competitiveness of Indian end users of steel. Further, increase in competition affect margin of profits. The Company concentrates in Niche market. The Company shall concentrates Aerospace, Defense, Railway, Drilling, Yellow Good, Oil and Gas (Export), Turbine, Wind Energy, Machine/Ship Building, Gear Development, Engines, Open Die Forgers etc. The Company is taking various steps to utilize its existing capacity to the maximum extent.

CONTINGENT LIABILITY

(Rs. in millions)

Particulars	31.03.2011	31.03.2010
a) Estimated amount of unexecuted contracts on Capital A/c not provided for (net of advances)	9.200	28.300
b) Bank Guarantee	142.100	38.700
c) Bill Discounting	128.400	23.000
d) Others	0.400	0.400
e) Service Tax	1.200	0.000
f) excise Duty	3.400	0.000
g) Sales Tax	2.800	2.000
h) Income Tax	8.500	0.000

Audited Financial Results for the year ended 30.06.2011

Rs. in millions

Particulars_	Year Ended 30.06.2011 Audited
Net Sales / Income from Operations	1365.500
b) Other Operating Income	3.600
2 Expenditure
a) (Increase) / decrease in stock in trade and work in progress	(52.400)
^b) Consumption of raw materials	^936.400
^c) Purchase of traded goods	^0.000
^d) Power and Fuel	^224.200
^e) Employees Cost	^72.800
^f) Depreciation	^55.300
^g) Other Expenditure	^168.200
h) Total	1404.500
3 Profit from Operations before Other Income, Interest and Exceptional Items (1-2)	(35.300)
4 Other Income	3.00
5 Profit before Interest and Exceptional Items (3+4)	(32.300)
6 Interest	86.900
7 Profit after Interest but before Exceptional Items (5-6)	(119.200)
8 Exceptional Items	0.000
9 Profits(+)/Loss(-) from Ordinary Activities before tax (7+8)	(119.200)
10 Tax Expenses	0.000
11 Net Profit(+)/Loss(-) from Ordinary Activities After tax (9-10)	(119.200)
12 Extraordinary Item ( net of tax expense Rs.nil)	0.000
13 Net Profit(+)/Loss(-) for the period (11-12)	(119.200)
14 Paid-up Equity Share Capital (Rs.6/- per equity share)	650.600
15 Reserve excluding Revaluation Reserves as per balance sheet of previous accounting year	0.000
16 Earnings Per Share (EPS)
(a) Basic and diluted EPS before Extraordinary items for the period, for the year to date and for the previous year	(1.10)
(b) Basic and diluted EPS after Extraordinary items for the period, for the year to date and for the previous year	(1.10)
17 Public Shareholding
- Number of Shares	13804436
- Percentage of shareholding (%)	12.73
18 - Promoters and Promoter group Shareholding
a) Pledged/Encumbered
- Number of Shares	-
- Percentage of Shares (as a % of the total shareholding of Promoter and Promoter group)	-
Shareholding of Promoter and Promoter group
- Percentage of Shares (as a % of the total share capital of the company)	-
b) Non-encumbered
- Number of Shares	94631404
- Percentage of Shares (as a % of the total shareholding of Promoter and Promoter group)	100.00
- Percentage of Shares (as a % of the total share capital of __the company)__	87.27

Note :

The above results were reviewed by the Audit Committee and thereafter were approved and taken on record by 'the Board of Directors at the Meeting held on 5^th August, 2012 . The Statutory Auditors have carried out a limited review of the above results pursuant to Clause 41 of the Listing Agreement.

The Company is engaged In the business of steer $1 steel products such a s Seamless Tubes and Rolled Products which In the opinion of the management is considered e only business segment In the context of Accounting Standard 17 or? "Segment Reporting"

The Company has tied up the required additional working capital finance The company has made efforts to develop products for additional applications towards enriching its product mix and also approached a number of Original Equipment manufacturer for product and process approvals The management is hopeful of improved performance in the current financial year In view of the foregoing, he accounts have been prepared on a going concern basis despite e fact that the Company's accumulated losses exceed its net worth

Deferred tax asset is mare than deferred lax liability a s computed In accordance w1t6-1t he Accounting Standard AS 22, notified In the Companies (Accounting Standards) Rules 2006, The Company, as a matter of prudence has not recognized deferred ?ax asset

The Company had received and resolved all 24 complaints during the quarter ended Jur~e3 5 20'1 1 There were no complaints pending at the beginning or at the end of the quarter.

The figures for the corresponding periods have been regrouped/rearranged, whenever: necessary to make them comparable.

WBSITE DETAILS

History

Founded in 1960, Remi Metals Gujarat Limited (REMI) has diversified into a multi-product group involved in the manufacture of Alloy Steel, Stainless Steel, Seamless Tubes and Pipes.

With a huge manufacturing base and extensive distribution network, REMI is capable of technically supporting and providing expertise to its valued customers. Having diversified manufacturing activities REMI always stood firm in its commitment to provide real value-for-money to its customer.REMI is the only integrated facility for making steel and seamless pipes/tubes in India at Jhagadia near Bharuch (Gujarat) having steel making capacity of 1.55 Lacs Mt per annum and seamless tube manufacturing capacity of 50000 TPA. REMI is equipped with the latest Testing and R and D facilities

It may be noted that Welspun Group has done a strategic investment with REMI in 2008.

They are currently producing forging quality and engineering grade steel, Carbon and alloy Steels used mainly for Auto-manufacturing / auto components, Oil and Gas, Energy and other engineering applications as per IS, BS, AISI/SAE, DIN, JIS,GOST specifications or as per customer’s specific requirements.

Business Description

Remi Metals Gujarat Limited (RMGL) is an India-based company. The Company is engaged in the manufacture of steel and steel products, such as seamless tubes and rolled products. During fiscal year ended March 31, 2010 (fiscal 2010), the Company produced 83742 tons of steel and 5,772 tons of seamless pipes. For the nine months ended 31 December 2010, Remi Metals Gujarat Limited's revenue increased 81% to RS4.5B. Net loss increased 15% to RS338.7M. Revenues reflect an increase in income from operations. Higher loss reflects an increase in consumption of raw materials, increased power and fuel expenses, a rise in employee’s costs, higher depreciation expenses and an increase in other expenditure of the company.

Press Release

CARE maintains ratings on RMGL's bank facilities BB/PR4

EquityBites

09 February 2011

[What follows is the full text of the news story.]

9 February 2011 - India'sCARE yesterday reaffirmed the ratings assigned to the long and short-term bank facilities of Remi Metals Gujarat Limited (BOM:500365), or (RMGL), at BB and PR4, respectively.

The agency issued the following press release:

Ratings

Facilities Amount (Rs. crore) Ratings Remarks

Long-term Bank Facilities 198.00 'CARE BB' [Double B] Reaffirmed

Short-term Bank Facilities 175.00 'PR4' [PR Four] Reaffirmed

Total Facilities 373.00

Rating Rationale

The ratings continue to be constrained by the relatively small size of RMGL's operations with limited product offering, operational inefficiencies of the seamless pipe plant leading to operating losses, RMGL continuing to be under the purview of the Board for Industrial and Financial Reconstruction (BIFR) and its stressed debt coverage indicators.

The ratings, however, draw strength from the financial support provided by the Welspun Group through regular infusion of funds into RMGL and the benefits arising out of association with the group with respect to raw material sourcing, marketing arrangements and maintenance of the manufacturing facilities as well as improvement in the operating efficiency of steel manufacturing facilities.

RMGL's ability to improve the operational efficiency of the seamless pipe plant along with the profitability as well as to turn its networth positive and come out of the purview of BIFR are the key rating sensitivities.

Company Background

Promoted by Mr. V.C. Saraf and Mr. R.C. Saraf, RMGL is engaged in manufacturing of carbon and alloy steel seamless pipes/tubes with captive facilities for steel melting and continuous bloom/ingot casting at Jhagadia, Gujarat. Due to inefficiencies in the plant on account of lack of critical equipment, the operations of the company were unprofitable. Subsequently, the company became a sick unit in August 1999 and came under the purview of BIFR. In 2009, the Welspun group was inducted as a strategic partner of RMGL for revival of the company.

Press Release

CARE keeps BB/PR4 ratings on RMGL's bank facilities

Aii Data Processing Limited

09 February 2011

[What follows is the full text of the news story.]

(ADPnews) - Feb 9, 2011 - India'sCARE yesterday reaffirmed the ratings assigned to the long and short-term bank facilities of Remi Metals Gujarat Limited (BOM:500365), or (RMGL), at BB and PR4, respectively.

The agency issued the following press release:

Ratings

Facilities Amount (Rs. crore) Ratings Remarks

Long-term Bank Facilities 198.00 �CARE BB� [Double B] Reaffirmed

Short-term Bank Facilities 175.00 �PR4� [PR Four] Reaffirmed

Total Facilities 373.00

Rating Rationale

The ratings continue to be constrained by the relatively small size of RMGL�s operations with limited product offering, operational inefficiencies of the seamless pipe plant leading to operating losses, RMGL continuing to be under the purview of the Board for Industrial and Financial Reconstruction (BIFR) and its stressed debt coverage indicators.

RMGL�s ability to improve the operational efficiency of the seamless pipe plant along with the profitability as well as to turn its networth positive and come out of the purview of BIFR are the key rating sensitivities.

Company Background

(INR 100 = USD 2.201/EUR 1.616)

(crore = 10 million)

FIXED ASSETS

Lease Hold Land
Free Hold
Plant and Machinery
Electrical Installation
Building
Office Equipment
Furniture and Fixture
Vehicles

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.49.18
UK Pound	1	Rs.76.65
Euro	1	Rs.66.63

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	3
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	2
--PROFITABILIRY	1~10	-
--LIQUIDITY	1~10	2
--LEVERAGE	1~10	2
--RESERVES	1~10	-
--CREDIT LINES	1~10	1
--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	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		17

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.

MIRA INFORM REPORT

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

863.200

956.200

1104.200

854.000

124.800

180.200

0.000

0.000

135.900

149.600

2228.100

2140.000

120.300

91.800

20.500

16.700

1527.500

1418.100

700.600

721.900

0.000

0.000

(8.79)

(10.54)

(8.82)

(10.59)

(11.68)

(8.56)

(0.69)

(1.65)

(6.92)

(20.38)

1.46

1.51

142.100

38.700

Unit