MIRA INFORM REPORT

Report Date :

16.01.2012

IDENTIFICATION DETAILS

Name :	REMI EDELSTAHL TUBULARS LIMITED (w.e.f. 09.03.2010)
Formerly Known As :	RAJENDRA MECHANICAL INDUSTRIES LIMITED
Registered Office :	11, Cama Industrial Estate, Goregaon (East), Mumbai – 400063, Maharashtra
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	19.08.1970
Com. Reg. No.:	11-014746
Capital Investment / Paid-up Capital :	Rs.95.824 Millions
CIN No.: [Company Identification No.]	L28920MH1970PLC014746
TAN No.: [Tax Deduction & Collection Account No.]	MUMR13940D
PAN No.: [Permanent Account No.]	AAACR0408G
Legal Form :	A Public Limited Liability company. The company’s Shares are Listed on the Stock Exchange.
Line of Business :	Manufacturer of Stainless Steel Welded and Seamless Pipes.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

B (28)

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	USD 1740000
Status :	Moderate
Payment Behaviour :	Slow but correct
Litigation :	Clear
Comments :	Subject is an established company having moderate track. Profitability of the company appears to be low. However trade relations are reported as fair. Business is active. Payments are reported to be slow. The company can be considered for business dealings with some caution.

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 – September 30, 2011

Country Name	Previous Rating (30.06.2011)	Current Rating (30.09.2011)
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 :	11, Cama Industrial Estate, Goregaon (East), Mumbai – 400063, Maharashtra, India
Tel. No.:	91-22-40589888/800
Fax No.:	91-22-26852335/3868
E-Mail :	vsiyer@remigroup.com remigrup@bom4.vsnl.net.in remigroup@bom4.vsnl.net.in
Factory :	Plot No. N-211/1, M.I.D.C., Tarapur, Maharashtra, India
Tel. No.:	91-2525-270492/93
E-Mail :	tarapur@remigroup.com
Branch Offices :	Located at : · Ahmedabad · Bengaluru · Chennai · Goa · Gurgaon · Indore · Kanpur · Kolkata · Kochi · Nagpur

DIRECTORS

As on 31.03.2011

Name :	Mr. Vishwambhar C. Saraf
Designation :	Chairman
Name :	Kamal Kumar Dujodwala
Designation :	Director
Name :	Rajendra C. Saraf
Designation :	Director
Name :	Mahabir Prasad Jatia
Designation :	Director
Name :	Rishabh R. Saraf
Designation :	Managing Director
Name :	Ritvik V. Saraf
Designation :	Director
Name :	Shankar Lal Jain
Designation :	Director
Name :	Gopikishan Biyani
Designation :	Director

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.09.2011

Names of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	2419330	25.25
Bodies Corporate	2807176	29.30
Any other Specify
Trust	61748	0.64
Sub Total	5288254	55.19
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)
(B) Public Shareholding
1) Institutions
Mutual Funds / UTI	9000	0.09
Financial Institutions / Banks	1000	0.01
Sub Total	10000	0.10
(2) Non-Institutions
Bodies Corporate	2076913	21.67
Individuals
Individual shareholders holding nominal share capital up to Rs. 1 lakh	1565083	16.33
Individual shareholders holding nominal share capital in excess of Rs. 1 lakh	465457	4.86
Any Others (Specify)
Clearing Members	793	0.01
Non Resident Indians	13556	0.14
Overseas Corporate Bodies	162344	1.69
Sub Total	4284146	44.71
Total Public shareholding (B)	4294146	44.81
Total (A)+(B)	9582400	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued
(1) Promoter and Promoter Group	--	--
(2) Public	--	--
Sub Total	--	--
Total (A)+(B)+(C)	9582400	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of Stainless Steel Welded and Seamless Pipes.

Products :

PRODUCT DESCRIPTION	ITEM CODE NO.
S. S. Welded Pipe	730640.00
S. S. Seamless Pipe	730410.01
Power Generation	--

PRODUCTION STATUS AS ON 31.03.2011

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Stainless Steel Welded and Seamless Pipes	Tons	N.A	10445	4894.014
Wind Power	Tons	N.A	2.25 MW	2940650 (Units)

Note:

1. The company manufactures wide range of small and big diameter stainless steel welded and seamless pipes and tubes and installed capacity in tons is based on standard size of diameter.
2. Installed capacity is as certified by the management and relied by auditors being a technical matter.

GENERAL INFORMATION

Suppliers :

· Century Steel Pte. Limited - Singapore

· Outokumpu Stainless Oy Finland

· Acerinox Malaysia Sdn. Bhd

· Tg International Pte. Limited - Singapore

· Ahwon Corporation - Korea

· Nikko Boeki Company Japan

· Jindal Stainless-India

· Steel Authority of India Limited-India

· Dk Corporation Korea

· Yick Hoe Metal Industries Sdn. Bhd - Malaysia

· Stemcor (South Africa ) Pte. Limited South Africa

· Columbus Stainless South Africa

· North America Stainless - USA

· Nippon Steel and Sumikin Stainless Steel Corporation - Japan

· Shaghai Baosteel Pudong International Trading Company Limited - China

· Posco China

· Hyundai Corporation - Korea

· Allegheny Technologies Asia , Inc. - USA

· Dong Hong Group ( H.K ) Company Limited Hong Kong

Customers :

· Cipla

· Columbia Asia

· Fortis Healthcare

· Apollo Hospitals

· Asian Heart Institute

· Cadila Pharmaceuticals Limited

· Care Hospitals

· CLINIRX

· University of Delhi

· Reliance Petroleum Limited

· India Oil Corporation Limited

· Seamless and Welded Pipes

· G.A.I.L

· Haldia Refinery

· Green Fuel and Emission Control

No. of Employees :

Not Available

Bankers :

State Bank of India

Facilities :

Secured Loan	As on 31.03.2011 (Rs. in Millions)	As on 31.03.2010 (Rs. in Millions)
Loans form SBI on Cash Credit Accounts	294.721	147.245
Buyers Credit from Bank	0.000	16.867
Term loan from S.B.I
In Foreign Currency	5.079	36.752
In Indian Rupees	48.392	53.268
Loans from other Banks	0.000	0.523
Total	348.192	254.655
Unsecured Loan	As on 31.03.2011 (Rs. in Millions)	As on 31.03.2010 (Rs. in Millions)
Interest – free Loans under Sales Tax Deferral Scheme (Payable within one year Rs.7.392 Millions, Previous Year Rs.7.128 Millions)	98.803	106.024
Loans from Corporates	78.645	0.000
Total	177.448	106.024

Banking Relations :	--
Auditors :
Name :	Sundarlal, Desai and Kanodia Chartered Accountants
Address :	903, Arcadia, 195, N.C.P.A. Road, Mumbai- 400021, Maharashtra, India
Associates :	· Remi Process Plant and Machinery Limited Address : 11, Cama Industrial Estate, Walbhat Road, Goregaon East, Mumbai – 400063, Maharashtra, India · Rajendra Electrical Industries Limited · Remi Metals Gujarat Limited · Remi Finance and Investments Private Limited · Remi Sales and Engineering Limited · Remi Anupam Mixie Limited · Bajrang Finance Limited · Remi Securities Limited · Rajendra Finance Private Limited · Calplus Trading Private Limited · Aura Gems Private Limited

CAPITAL STRUCTURE

As on 31.03.2011

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
9582400	Equity Shares	Rs.10/- each	Rs.95.824 Millions

NOTE: (Of the above 4939700 equity shares of `10/- each were issued as fully paid bonus shares by capitalisation of reserves)

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2011	31.03.2010	31.03.2009
SHAREHOLDERS FUNDS
1] Share Capital		95.824	95.824	95.824
2] Share Application Money		0.00	0.000	0.000
3] Reserves & Surplus		339.197	330.346	323.316
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		435.021	426.170	419.140
LOAN FUNDS
1] Secured Loans		348.192	254.655	351.419
2] Unsecured Loans		177.448	106.024	111.048
TOTAL BORROWING		525.640	360.679	462.467
DEFERRED TAX LIABILITIES		68.336	67.688	69.420
TOTAL		1028.997	854.537	951.027
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		419.531	369.301	375.241
Capital work-in-progress		6.845	63.238	0.758
INVESTMENT		0.477	0.477	7.470
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	441.675	299.410	368.320
	Sundry Debtors	273.630	192.992	207.403
	Cash & Bank Balances	24.824	14.673	27.882
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	114.413	55.290	60.703
Total Current Assets		854.542	562.365	664.308
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	182.361	92.695	56.952
	Other Liabilities	64.260	44.560	32.550
	Provisions	5.777	3.589	7.248
Total Current Liabilities		252.398	140.844	96.750
Net Current Assets		602.144	421.521	567.558
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		1028.997	854.537	951.027

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Income	1288.744	914.582	1536.851
		Other Income	10.186	25.677	15.488
		TOTAL (A)	1298.930	940.259	1552.340
Less	EXPENSES
		Consumption of Raw Material	1049.014	579.496	1078.442
		Purchase for Resale	18.691	26.501	3.354
		Manufacturing Expenses	91.648	61.599	79.975
		Employees Remuneration and benefits	61.955	56.105	61.089
		Administrative Expenses	83.765	52.178	98.295
		Increase/(Decrease) in Finished Goods	(87.100)	107.918	184.768
		TOTAL (B)	1217.973	883.797	1505.923
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		80.957	56.462	46.417
Less	FINANCIAL EXPENSES (D)		44.541	27.733	56.636
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		36.416	28.729	(10.219)
Less/ Add	DEPRECIATION/ AMORTISATION (F)		26.870	25.745	25.856
	PROFIT BEFORE TAX (E-F) (G)		9.546	2.984	(36.075)
Less	TAX (H)		0.695	(5.044)	(9.378)
	PROFIT AFTER TAX (G-H) (I)		8.851	8.028	(26.697)
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		119.125	121.097	157.794
Less	APPROPRIATIONS
		Transfer to General Reserve	10.000	10.000	10.000
	BALANCE CARRIED TO THE B/S		117.976	119.125	121.097
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	132.323	121.701	407.046
	TOTAL EARNINGS		132.323	121.701	407.046
	IMPORTS
		Raw Materials	822.372	309.136	607.564
		Stores & Spares	0.703	0.000	0.501
		Fixed Assets	5.065	52.449	8.171
	TOTAL IMPORTS		828.140	361.585	616.236
	Earnings Per Share (Rs.)		0.92	0.84	(2.79)

QUARTERLY RESULTS

PARTICULARS	30.06.2011 1^st Quarter	30.09.2011 2^nd Quarter
Net Sales	340.650	414.450
Total Expenditure	315.240	383.820
PBIDT (Excl OI)	25.410	30.630
Other Income	2.340	0.880
Operating Profit	27.750	31.510
Interest	16.910	18.740
Exceptional Items	0.000	0.000
PBDT	10.840	12.770
Depreciation	7.220	7.200
Profit Before Tax	3.620	5.570
Tax	1.060	1.880
Provisions and contingencies	0.000	0.000
Profit After Tax	2.570	3.690
Extraordinary Items	0.000	0.000
Prior Period Expenses	0.000	0.000
Other Adjustments	0.000	0.000
Net Profit	2.570	3.690

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	0.68	0.85	1.76
Net Profit Margin (PBT/Sales)	(%)	0.740	0.32	2.35
Return on Total Assets (PBT/Total Assets}	(%)	0.75	0.32	3.47
Return on Investment (ROI) (PBT/Networth)		0.02	0.00	0.09
Debt Equity Ratio (Total Liability/Networth)		1.79	1.17	1.33
Current Ratio (Current Asset/Current Liability)		3.38	3.99	6.87

LOCAL AGENCY FURTHER INFORMATION

OPERATIONS:

The Stainless Steel Tubes and Pipes Industry was recovering from a weak economic period. The Company’s marketing and product development efforts initiated recently have fructified and are reflected in the Company’s financial performance, i.e. revenue increase by 34.5%, growth in sales volume, 43.5% growth in value resulting in an EBIDTA growth of 43.72% over the previous year. The Company’s order book reflects a healthy Rs.1210.000 Millions at the beginning of the year end which indicates growth performance for the forthcoming year also.

The company has the distinction of being the first to commission the state-of-art cage-forming large diameter automatic Stainless Steel Pipe Forming Mill. The benefit of this equipment will partly accrue in the current year and would fully reflect in the coming years.

The company is embarking on an expansion programme [of approximately 130.000 Millions] to meet the increasing technological requirements of the expanding sophisticated market. The expansion project is funded by internal accruals and term loans already sanctioned by the Company’s bankers.

MANAGEMENT DISCUSSION AND ANALYSIS:-

(a) Industry Structure and Development:

The Stainless steel tube and pipe industry can be classified in the organized sector, in which the Company operates has witnessed a sharp growth in capacity over the past few years. The growth in the product markets have shifted from the traditional focus on oil and petrochemical sector to the power sector. This shift stands to become more prominent in the next few years as the installation of nuclear power plants becomes more critical for the growth of the economy. There has been a revival in demand in the Fertilizer sector owing to the governments focus on increasing the agricultural produce.

(b) Opportunities and Threats:

The growth in the power (both thermal and nuclear)/ fertilizer/ oil and petroleum sector offer opportunities for the Company’s products. However, the pricing volatility of key raw material ingredients (such as nickel) can affect demand and usage patterns of user industry as well as affect the viability of major project investments. Apart from this, installation of LNG terminals can have a substantial contribution in the usage of stainless steel tubular products. The threat of dumping of secondary quality products and imposition of antidumping duties by the government on major raw materials can have adverse effect on the demand. The effect of Nuclear disaster in Japan can have an impact on the global view of operating and constructing nuclear power plants which can delay the growth plans of the Company.

(c) Outlook:

The Company has viewed the economic downturn as an opportunity to reinvent its product portfolio over the past year. The company and the management believed in the fundamentals of the sector it operates in and continues to believe that the fundamentals of the stainless steel tubular industry remain strong. The approvals received by the company are reflected in the increased order book. The Company is continuing the process of product enhancement and expects further approvals for critical products from the user industries. The expansion programme undertaken will ensure that the products can be adequately developed.

Contingent Liabilities not provided for (As on 31.03.2011) :

a) Bank Guarantees given by bankers on behalf of the Company – Rs.86.486 Millions

b) Guarantee given by the Company to Bankers on behalf of associate Company – Rs.66.500 Millions

c) Bills Discounted – Rs.48.727 Millions

d) Claim of Collector – Rs.35.347 Millions

e) Sales Tax (Disputed in Appeal) – Rs. Nil

f) Show Cause Notice in respect of Central Excise – Rs. Nil

g) Central Excise (Disputed in Appeal) Rs.7.094 Millions

h) Subletting Charges – Rs.0.137 Millions

i) In respect of Custom Duty – Rs.1.067 Millions

j) Income Tax matters – Rs.0.602 Millions

FIXED ASSETS

· Leasehold Land

· Leasehold Land – Wind Mill

· Factory Building

· Plant and Machinery

· Dies and Moulds

· Electrical Installation

· Office Equipments

· Air Conditioners

· Computers

· Furniture and Fixtures

· 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.51.43
UK Pound	1	Rs.79.10
Euro	1	Rs.66.17

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	3
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	2
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	3
--CREDIT LINES	1~10	3
--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		28

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.