MIRA INFORM REPORT

Report Date :

28.11.2012

IDENTIFICATION DETAILS

Name :	MONNET ISPAT AND ENERGY LIMITED (w.e.f 12.01.2006)
Formerly Known As :	MONNET ISPAT LIMITED
Registered Office :	Monnet Marg, Mandir Hasaud, Raipur – 492101, Chhattisgarh
Country :	India
Financials (as on) :	31.03.2012
Date of Incorporation :	01.02.1990
Com. Reg. No.:	009826
Capital Investment / Paid-up Capital :	Rs. 643.550 Millions
CIN No.: [Company Identification No.]	L02710CT1990PLC009826
TAN No.: [Tax Deduction & Collection Account No.]	DELM09084F
PAN No.: [Permanent Account No.]	AAACM0501D
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Manufacturers of Sponge Iron, Steel and Ferro Alloys.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

A (62)

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 94000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is the flagship company of the Monnet Group. It is a well established company having fine track. The company has generated healthy cash flows and profitable operations over years. Financial position of the company appears to be good and healthy. Trade relations are reported as trustworthy. Business is active. Payments are reported to be regular and as per commitments. The company can be considered good 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 – June 30, 2012

Country Name	Previous Rating (31.03.2012)	Current Rating (30.06.2012)
India	A1	A1

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

INDIAN ECONOMIC OVERVIEW

India is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic liberalization, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, began in the early 1990s and has served to accelerate the country's growth, which has averaged more than 7% per year since 1997. India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly more than half of the work force is in agriculture, but services are the major source of economic growth, accounting for more than half of India's output, with only one-third of its labor force. India has capitalized on its large educated English-speaking population to become a major exporter of information technology services and software workers. In 2010, the Indian economy rebounded robustly from the global financial crisis - in large part because of strong domestic demand - and growth exceeded 8% year-on-year in real terms. However, India's economic growth in 2011 slowed because of persistently high inflation and interest rates and little progress on economic reforms. High international crude prices have exacerbated the government's fuel subsidy expenditures contributing to a higher fiscal deficit, and a worsening current account deficit. Little economic reform took place in 2011 largely due to corruption scandals that have slowed legislative work. India's medium-term growth outlook is positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. India has many long-term challenges that it has not yet fully addressed, including widespread poverty, inadequate physical and social infrastructure, limited non-agricultural employment opportunities, scarce access to quality basic and higher education, and accommodating rural-to-urban migration.

Source : CIA

EXTERNAL AGENCY RATING

Rating Agency Name	CARE
Rating	Commercial Paper Programme : A1+
Rating Explanation	Very strong degree of safety and lowest credit risk.
Date	March 1, 2012

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

LOCATIONS

Registered Office / Factory 1:	Monnet Marg, Mandir Hasaud, Raipur – 492101, Chhattisgarh, India
Tel No. :	91-771-2471334-339
Fax No. :	91-771-2471250
E-Mail :	monnet@monnetgroup.com monnetraipur@monnetgroup.com
Website :	http://www.monnetgroup.com
Corporate Office :	Monnet House, 11, Masjid Moth, Greater Kailash Part-ll, New Delhi-110048, Delhi, India
Tel. No.:	91-11-29218542-46
Fax No.:	91-11-29218541
E-mail :	monnet@monnetgroup.com isc_miel@monnetgroup.com
Factory 2 :	Village - Naharpali, Tehsil - Kharsia, District Raigarh - 496661, Chhattisgarh, India
Tel No. :	91–7762-275451/ 52
Fax No. :	91–7762-275455
E-Mail :	mielrgh@monnetgroup.com
Factory 3 :	Monnet Power Company Limited Village – Malibrahmani, P. O. – Nisha – 759130 Via – Kosala, District. -Angul, Orissa, India
Tel No. :	91-6764-224001 / 224002
Fax No. :	91-6764-224003
E-Mail :	angul@monnetgroup.com

DIRECTORS

AS ON 31.03.2012

Name :	Mr. Sandeep Jajodia
Designation :	Chairman and Managing Director
Name :	Mr. C. P. Baid
Designation :	Dy. Managing Director
Name :	N.C. Jha
Designation :	Whole-time Director
Name :	Mr. G.C. Mrig
Designation :	Non Executive Independent Director
Name :	Mr. Amit Dixit
Designation :	Non Executive Independent Director
Name :	Mr. Ajay Relan
Designation :	Non Executive Independent Director
Name :	Mr. Vikram Deswal
Designation :	Non Executive Independent Director
Name :	Mr. Gopal Tiwari
Designation :	Non Executive Director
Name :	Mr. J.P. Lath
Designation :	Non Executive Director

KEY EXECUTIVES

Name :	Mr. M.P. Kharbanda
Designation :	Company Secretary
Board Committees
Audit Committee	Mr. G.C. Mrig, Chairman Mr. Ajay Relan, Member Mr. J.P. Lath, Member Mr. M.P Kharbanda, Secretary
Shareholders / Investors' Grievance Committee	Mr. J.P. Lath Mr. Gopal Tiwari Mr. C. P. Baid
Remuneration Committee	Mr. G.C. Mrig Mr. Gopal Tiwari Mr. J.P. Lath
Finance Committee	Mr. Sandeep Jajodia Mr. C.P. Baid Mr. J.P. Lath
Executive Committee	Mr. Sandeep Jajodia Mr. C.P. Baid Mr. J.P. Lath
Share Transfer Committee	Mr. J.R Lath Mr. C.P. Baid Mr. M.P Kharbanda

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 30.09.2012

Category of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	254448	0.40
Bodies Corporate	25509725	39.80
Any Others (Specify)	6046168	9.43
Directors/Promoters & their Relatives & Friends	6046168	9.43
Sub Total	31810341	49.63
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	31810341	49.63
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	9415	0.01
Financial Institutions / Banks	65850	0.10
Insurance Companies	677782	1.06
Foreign Institutional Investors	24616567	38.41
Sub Total	25369614	39.58
(2) Non-Institutions
Bodies Corporate	4986899	7.78
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 million	1659701	2.59
Individual shareholders holding nominal share capital in excess of Rs.0.100 million	132129	0.21
Any Others (Specify)	130390	0.20
Hindu Undivided Families	50007	0.08
Non Resident Indians	76087	0.12
Directors & their Relatives & Friends	2296	0.00
Trust & Foundation	2000	0.00
Sub Total	6909119	10.78
Total Public shareholding (B)	32278733	50.37
Total (A)+(B)	64089074	100.00
© Shares held by Custodians and against which Depository Receipts have been issued	0	0.00
(1) Promoter and Promoter Group	0	0.00
(2) Public	0	0.00
Sub Total	0	0.00
Total (A)+(B)+(C)	64089074	0.00

BUSINESS DETAILS

Line of Business :

Manufacturers of Sponge Iron, Steel and Ferro Alloys.

Products :

Item Code No. (ITC Code)	Product Description
72.07	Mild Steel
72.03	Sponge Iron
72.02	Sponge Iron
NA	Power

PRODUCTION STATUS (AS ON 31.03.2012)

A. Production	Units	31.03.2012
- Sponge Iron	MT	742194
- MS /SS Products	MT	98061
-Structural Steel	MT	81204
- Ferro Alloys	MT	8993
-Coal	MT	850505
- Power	‘000 Units	858238

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

Ø Axis Bank Limited

Ø Bank of Baroda

Ø Bank of India

Ø Central Bank of India

Ø Dena Bank

Ø ICICI Bank Limited

Ø Indian Bank

Ø Indian Overseas

Ø Standard Chartered Bank

Ø L&T Infrastructure Finance Company Limited

Ø Life Insurance Corporation of India

Ø Oriental Bank of Commerce

Ø Punjab National Bank

Ø State Bank of Bikaner and Jaipur

Ø State Bank of Hyderabad

Ø State Bank of India

Ø State Bank of Patiala

Ø The Jammu and Kashmir Bank Limited

Ø UCO Bank

Ø United Bank of India

Facilities :

Secured Loans	31.03.2012	31.03.2011
	(Rs. In Millions)
10.5% Non-Convertible Redeemable Debenture of Rs. 1000/- each redeemable at par.	800.000	800.000
10.5% Non-Convertible Redeemable Debenture of Rs. 1000/- each redeemable at par.	1000.000	1000.000
12.5% Non-Convertible Redeemable Debenture of Rs. 1000/- each redeemable at par.	1200.004	1200.005
Foreign currency loans	12124.091	10358.800
Rupee loans	11887.854	2622.394
Working Capital Facilities	1892.166	1792.508
From Banks	1500.000	900.000
From Institutions and Others	1000.000	0.000
Total	31404.115	18673.707
Note: 1 Term Loans, External Commercial borrowings (ECB) and Non Convertible Debentures (NCD) from financial institutions / Banks, are secured by first charge on all immovable and movable assets (present and future) of the Company (subject to prior charges on movables in favour of working capital banks) ranking pari - passu with the charges created in favour of participating financial institutions. Some of the loans /facilities are further guaranteed by the Managing Director of the Company. 2 Vehicle Loans from Banks are secured by hypothecation of the respective assets financed. 3 The repayment terms and rate of interest of term loans are as under: a) Rupee Term Loan for Steel Project :- The Company has an outstanding balance of Rs. 10949.900 Millions of Rupee term loan with interest band of 1.50% to 2.25% plus base rate. These loans are repayable in 26 variable quarterly installments commencing from Financial Year 14. b) Rupee Term Loan for Power Project :- The Company has an outstanding balance of Rs. 937.500 Millions of Rupee term loan with interest band of 1 1.75% to 13% repayable by Financial Year 201 6. c) Foreign Currency Term Loan $ 192 Million : the loan is repayable in installments from Financial Year 201 4-1 5 to Financial Year 201 9-20 and carries interest rate of libor plus 4.25 to 4.6%. d) Foreign Currency Term Loan 3 90 Million : the loan is repayable in Financial Year 201 2-1 3 and Financial Year 2013-1 4 and carries interest rate of libor plus 1.90%. e) Unsecured Term Loan of Rs. 1500.000 Millions is repayable in monthly installments from Financial Year 2013-14 to Financial Year 201 7- 18.
Unsecured Loans	31.03.2012	31.03.2011
	(Rs. In Millions)
0% Fully Convertible Debenture of Rs. 1000/- each.	392.625	392.625
Rupee loans	1500.000	0.000
Foreign currency loans	536.684	1973.300
Rupee loans	4510.478	5023.941
Total	6939.787	7389.866

a) Working capital facilities from banks are secured by first charge on movable current assets and second charge on all immovable assets of the Company. These working capital loans are further guaranteed by Managing Director of the

Company.

b) Out of the Short Term Rupee Loans, Rs. 2499.400 Millions since repaid.

Banking Relations :	--
Auditors :
Name :	O.P. Bagla and Company Chartered Accountants
Address :	New Delhi, India
Enterprise where KMP has significant influence:	Ø A.P. Coal Washeries Private Limited Ø Monnet Global Limited Ø Monnet Overseas Limited Ø Monnet Daniel Coal Washeries Private Limited Ø Monnet Power Company Limited Ø Monnet Cement Limited Ø Monnet Enterprises PTE Limited Ø Rameshwaram Steel and Power Private Limited Ø Chattel Constructions Private Limited Ø Chomal Exports private limited
Subsidiary of Subsidiaries :	Ø Pt Monnet Global Ø Monnet Enterprises DMCC Ø Pt. Serwa Sembada Karya Bumi Ø Monnet Global Liberia Limited Ø Monnet Global Guinea S.A. Ø Monnet Global Mali S.A.
Joint Ventures :	Ø MP Monnet Mining Company Limited Ø Mandakini Coal Company Limited Ø Urtan North Mining Company Limited Ø Monnet Ecomaister Enviro Private Limited

CAPITAL STRUCTURE

AS ON 31.03.2012

Authorised Capital :

No. of Shares	Type	Value	Amount
13,20,00,000	Equity Shares	Rs. 10/- each	Rs. 1320.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
6,43,37,807	Equity Shares	Rs.10/- each	Rs. 643.378 Millions
	Add: Shares forfeited amount originally paid up		Rs. 0.172 Million
	Total		Rs. 643.550 Millions

a) During the year, the Company has not issued / bought back any shares. Reconciliation of shares outstanding at the beginning and at the end of the reporting period is given below:

Particulars	31.03.2012
Number of shares outstanding as at the beginning of the year	64337807
Shares allotted against warrants	0
Shares allotted on conversion of Convertible Instruments	0
Shares allotted pursuant to Merger	0
Number of shares outstanding as at the end of the year	64337807

b) The holders of the equity shares are entitled to receive dividends as declared from time to time, and are entitled to voting rights proportionate to their share holding at the meeting of shareholders.

c) Following Shareholders’ hold equity shares more than 5% of the total equity shares of the Company at the end of the period :-

Particulars	% of Shareholding 31.03.2012
Pavitra Commercials Limited	6.35
Cecil Webber Engineering Limited	6.57
Kamdhenu Enterprise Limited	10.50
Udhyam Merchandise Private Limited	15.47
Chaturanan industries Limited	Nil
Nayan Traders Private Limited	Nil
Nikunj Jajodia	Below 5%
Blackstone GPV Capital Partners Mauritius	7.10
Deutsche Securities Mauritius Limited (FII Custodian)	8.23

d) The Company has issued the following shares for a consideration other than cash or bonus shares during the immediately preceding 5 years:

47,22,539 equity shares of t10 each were allotted as fully paid up for consideration other than cash pursuant to scheme of amalgamation of M/s. Mounteverest Trading and Investment Limited with the Company as per order dated 19-1 1-2010 passed by Honourable High Court of Chattisgarh.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2012	31.03.2011	31.03.2010
SHAREHOLDERS FUNDS
1] Share Capital		643.550	643.550	544.786
2] Subscription Against Share Warrants		0.000	0.000	268.825
3] Share Application Money		0.000	0.000	0.000
4] Reserves & Surplus		22959.944	20257.806	15916.860
5] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		23603.494	20901.356	16730.471
LOAN FUNDS
1] Secured Loans		31404.115	18673.707	12509.230
2] Unsecured Loans		6939.787	7389.866	2440.605
TOTAL BORROWING		38343.902	26063.573	14949.835
DEFERRED TAX LIABILITIES		1504.990	1412.382	1319.333
TOTAL		63452.386	48377.311	32999.639
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		13787.497	10937.132	11283.170
Capital work-in-progress		20219.300	10653.295	7212.132
INVESTMENT		5913.061	5500.091	5454.039
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	5623.675	3604.253	2188.051
	Sundry Debtors	1788.205	1897.968	1288.661
	Cash & Bank Balances	8733.295	6869.493	2052.423
	Other Current Assets	866.614	35.037	0.000
	Loans & Advances	12157.990	12281.223	5898.310
Total Current Assets		29169.779	24687.974	11427.445
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	611.827	1223.574	1491.496
	Other Current Liabilities	4776.579	1770.110	311.542
	Provisions	248.845	407.496	758.317
Total Current Liabilities		5637.251	3401.180	2561.355
Net Current Assets		23532.528	21286.794	8866.090
MISCELLANEOUS EXPENSES		0.000	0.000	184.208
TOTAL		63452.386	48377.311	32999.639

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011	31.03.2010
	SALES
		Income	18973.846	15730.493	14806.952
		Other Income	631.536	293.217	317.501
		TOTAL (A)	19605.382	16023.710	15124.453
Less	EXPENSES
		Cost of materials consumed	12079.516	9320.328
		Purchase of stock in trade	0.000	11.243
		Changes in inventories	(661.229)	(436.953)
		Employee benefit expense	945.380	746.286
		Other Expenses	1863.254	1718.907
		TOTAL (B)	14226.921	11359.811	10166.915
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		5378.461	4663.899	4957.538
Less	FINANCIAL EXPENSES (D)		867.022	309.952	927.885
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		4511.439	4353.947	4029.653
Less/ Add	DEPRECIATION/ AMORTISATION (F)		741.068	738.638	716.655
	PROFIT BEFORE TAX (E-F) (G)		3770.371	3615.309	3312.998
Less	TAX (H)		881.766	803.732	621.955
	PROFIT AFTER TAX (G-H) (I)		2888.605	2811.577	2691.043
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		9883.160	8067.514	6036.554
	BALANCE B/F ON AMALGAMATION		0.000	0.000	116.427
Less	APPROPRIATIONS
		Dividend	160.439	321.689	285.876
		Tax on Dividend	26.027	52.186	48.585
		Dividend paid	0.000	25.030	0.000
		Transfer to General Reserve	289.000	282.000	270.000
		Transfer to Debenture Redemption Reserve	315.889	315.026	172.049
	BALANCE CARRIED TO THE B/S		11980.410	9883.160	8067.514
	EARNINGS IN FOREIGN CURRENCY
		FOB Value of Export	987.999	813.119	466.427
	IMPORTS
		Raw Materials	0.000	0.000	10.054
		Capital Goods including Spares	1456.898	1018.015	68.217
	TOTAL IMPORTS		1456.898	1018.015	78.271
	Earnings Per Share (Rs.)
	Basic		44.90	48.61	53.64
	Diluted		43.48	46.91	47.73

QUARTERLY RESULTS

PARTICULARS	30.06.2012	30.09.2012
	1^st Quarter	2^nd Quarter
Sales Turnover	5264.800	5494.000
Total Expenditure	3904.700	4191.100
PBIDT (Excl OI)	1360.100	1302.900
Other Income	55.000	51.000
Operating Profit	1415.100	1353.900
Interest	304.800	200.700
Exceptional Items	0.000	0.000
PBDT	1110.300	1153.200
Depreciation	219.700	221.300
Profit Before Tax	890.600	931.900
Tax	205.600	219.000
Provision and Contingencies	0.000	0.000
Reported PAT	685.000	712.900
Extraordinary Items	0.000	0.000
Prior Period Expenses	0.000	0.000
Other Adjustments	0.000	0.000
Net Profit	685.000	712.900

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011	31.03.2010
PAT / Total Income	(%)	14.73	17.55	17.79
Net Profit Margin (PBT/Sales)	(%)	19.87	22.98	22.37
Return on Total Assets (PBT/Total Assets}	(%)	8.78	10.15	14.59
Return on Investment (ROI) (PBT/Networth)		0.16	0.17	0.20
Debt Equity Ratio (Total Liability/Networth)		18.63	1.41	1.05
Current Ratio (Current Asset/Current Liability)		5.17	7.26	4.46

LOCAL AGENCY FURTHER INFORMATION

Sr. No.	Check List by Info Agents	Available in Report (Yes / No)
1]	Year of Establishment	Yes
2]	Locality of the firm	Yes
3]	Constitutions of the firm	Yes
4]	Premises details	No
5]	Type of Business	Yes
6]	Line of Business	Yes
7]	Promoter's background	Yes
8]	No. of employees	No
9]	Name of person contacted	No
10]	Designation of contact person	No
11]	Turnover of firm for last three years	Yes
12]	Profitability for last three years	Yes
13]	Reasons for variation <> 20%	--
14]	Estimation for coming financial year	No
15]	Capital in the business	Yes
16]	Details of sister concerns	Yes
17]	Major suppliers	No
18]	Major customers	No
19]	Payments terms	No
20]	Export / Import details (if applicable)	No
21]	Market information	--
22]	Litigations that the firm / promoter involved in	--
23]	Banking Details	Yes
24]	Banking facility details	Yes
25]	Conduct of the banking account	--
26]	Buyer visit details	--
27]	Financials, if provided	Yes
28]	Incorporation details, if applicable	Yes
29]	Last accounts filed at ROC	Yes
30]	Major Shareholders, if available	Yes
31]	Date of Birth of Proprietor/Partner/Director, if available	Yes
32]	PAN of Proprietor/Partner/Director, if available	No
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	Yes

STATUS OF EXPANSIONS:

Steel:

The steel expansion at Raigarh is progressing as per schedule. 80 MW Power Plant is completed and commenced. Facilities like Blast Furnace, Sinter Plant, Rebar Mill etc. are getting commenced during the year and Pellet Plant and Coke Oven Plant will get completed in the 1st half of next financial year.

Power (Monnet Power Company Limited)

The Power Project of 1050 MW being set up in MPCL a subsidiary Company at Angul is also progressing with major milestones like boiler drum lifting and TG deck casting having been completed for both unit 1 and unit 2. TG Building structure is in progress. The Company is well placed with work order on other modules like power evacuation system, cooling tower, intake water system besides two-third of chimney height having been erected. Boiler light-up is proposed in July 2013 with synchronization proposed in Sep-Oct 2013 for Unit 1 and December 2013 for Unit 2.

MANAGEMENT DISCUSSION AND ANALYSIS

INDUSTRIAL STRUCTURE AND DEVELOPMENTS / RISKS AND CONCERNS:

India emerged as the 4th largest producer of crude steel in the world as per data upto 31-12-2011 and it continues to remain the largest producer of DRI in the world. The crude steel production has grown mainly due to electric route of steel making particularly induction furnace route that accounts for 32% of total steel production.

During five year period of 2005-06 to 2010-11, the capacity of crude steel production expanded from 51.17 MT to 78 MT on annual basis and the production of crude steel grew from 46.46 MT to 69.57 MT at an annual growth of 8%. The capacity utilization of crude steel, thus, as per the last numbers was at encouraging 89%.

The production of finished steel grew to 66.01 MT during 2010-11 as against 46.57 MT in 2005-06 with an annual growth of 7% but the consumption of finished steel grew at an annual growth of 9.6% during the same period. The export of steel grew by 23.8% and import reduced by 7%. However, India still remains to be net importer of steel.

India continues to be the largest producer of sponge iron in the world in 2011 mainly on account of domestic availability of thermal coal and iron ore, the key resources for sponge iron. The contribution of coal based sponge iron is to the tune of 80% out of the total production. The total capacity of sponge iron industry stands at 35 MT. Though, India remains to be net exporter of pig iron which is mainly contributed by private sector. The Government has taken steps to discourage export of iron ore by increasing the ad valorem duty to 30% on all varieties of steel except pellets. There are no significant numbers of import/export of sponge iron.

Sponge iron industry has become highly sensitive to the supply and pricing of coal and iron ore. Both the raw materials are exposed to volatilities of pricing and supply which is quite challenging to the players exposed to open market purchases. Coal availability has become more critical in the last two years, whereas both availability and pricing have become volatile in iron ore.

OPPORTUNITIES AND THREATS / OUTLOOK

The Indian Economy is poised at a critical juncture with deceleration in GDP growth of the country. The investment cycle in the country has deteriorated mainly in capital goods and infrastructure in the last one year. The environment in the industry has become most challenging. The aggregate developments in the Global and local economy in the last one year have compounded the uncertainty in the economic outlook and its impact on commodity cycle. Demand for commodities including steel in the indigenous and global market is under pressure. The economic activity in the world is locked by problem in different regions and countries across the Globe. A major policy boost on the regulatory front and quick initiatives by the Government are required to renew the momentum of investment cycle to arrest any further downward pressure on the economy.

However, this blockage of investment has equally impacted the steel industry and the industry is not adding or announcing fresh capacities except the additions in the capacities currently in progress in various companies. Issues of land aggregation and basic clearances have become a prolonged activity before physical mobilization of the projects. Therefore, the current virtual status quo in fresh expansions may result into a virtual freeze in supplies over the next few years. That is going to create enormous opportunities for the companies who are implementing or have completed their expansions, while the basic demand of steel will continue to grow relative to the growth of GDP. Country may face supply side constraints, and is painting a very rosy picture for the industry for the future. Nonetheless, the current and ensuing year could be threatening to the companies which are completely exposed to raw material procurement from the open market and market conditions.

India has abundant resources of thermal coal and iron ore, the reasons for India`s rise as largest producer of sponge iron. The structure of sponge iron industry may be classified into organized and large players with 0.2 MT and higher capacities, and smaller players with 0.5 MT to 0.2 MT capacities. Some of the larger players have been able to integrate their operations partially or fully but the integration is missing in most of the small segment which has made them vulnerable to situations of depressed demands or low off takes. The operational sustainability of these players in times of low demands is extremely week resulting in partial or full closure of their operations. Thus, it reduces the supply in the industry which invariably helps the larger players in terms of their sale and margins. Therefore, partial or full integration to raw material is critical in the sponge iron.

Segment wise or Product wise Performance and Discussion on Financial Performance with respect to Operational Performance:

During the year, there have been no capacity additions at the plant. The production of Sponge Iron and Steel has reported growth mainly on account sof higher capacity utilization, whereas Coal and Power Generation experienced marginal decrease. Consequently, both divisions have doubled the production during the year under report.

During the year, the Company has reported an increase in revenue by Rs. 3240.000 Millions over previous year and Profit before interest and depreciation has increased to Rs.5380.000 Millions from Rs.4660.000 Millions. Net profit however, remained flat on account of incidence of higher costs of raw material and overheads.

CONTINGENT LIABILITIES:

(Rs. in millions)

Particulars	31.03.2012	31.03.2011
Claims against the company not acknowledged as debt
- In respect of disputed Excise Demands	161.697	81.533
- In respect of disputed Sales Tax Demands	71.460	9.514
- In respect of disputed Entry Tax Demands	101.689	64.233
- In respect of disputed Income Tax Demands	290.860	295.200
- In respect of disputed Demands for water charges by Water Resources Division.	107.544	40.244
- In respect of electricity Duty on generation of power	352.509	187.058
- Other claims against the Company not acknowledged as debt.	107.670	33.610

FIXED ASSETS:

Tangible assets:

Ø Land and Site Development

Ø Lease hold land

Ø Railway Siding

Ø Building

Ø Plant and Machinery

Ø Office Equipment

Ø Furniture and Fixtures

Ø Vehicle

Intangible assets:
Ø Software

WEBSITE DETAILS

PROFILE:

Monnet is one of the few companies that have fully indigenised and imbibed the technology for Sponge Iron manufacturing. By leveraging the backward and forward integration of activities and successfully implementing 100% indigenous technology, MIEL, in a short span of time has emerged as one of the leading Steel and Ferro alloys manufacturer in the country.

Monnet is India’s Second Largest Sponge Iron Manufacturing Company with an Annual Production of 1 Million Tons Per Annum. Monnet is marketing 1.5 MTPA of Sponge Iron, Ferro Alloys, Mild Steel Billets, Mild Steel Ingots & Rolled Products from it’s integrated plants at Raipur and Raigarh with dedicated customer and distribution network through India. Moving such major volumes of raw materials and finished products has given Monnet a tremendous exposure in Logistics.

The company is further expanding the capacities of it’s steel and sponge Iron making facilities and setting up green field steel plants in Raigarh (Chhattisgarh) and Angul (Orissa) which would propel it’s total steel capacity to 3.0 MTPA and Sponge Iron to 2.3 MTPA by 2010-11.

They are one of the major manufacturers of Ferro alloys in the country with current capacity of 70000 MTPA.

Monnet brings with an advantage of understanding the entire value chain from mining of raw material to producing the finished product and feels the pulse of the market. It is a realization leader in all the categories in which it operates.

BOARD OF DIRECTORS:

Mr. Sandeep Jajodia

(Chairman and Managing Director)

Mr. Sandeep Jajodia having a rich experience in diversified activities such as manufacturing, trading and international marketing, has been associated with the Monnet Group since its inception as a promoter, mentor, visionary and a strategist. The Monnet Group continues to move from strength to strength under his able leadership.

Mr. C.P Baid

(Dy. Managing Director)

Aged about 57 years, Mr Baid is BE (Hons) Mechanical Engineering Practice from B.I.T.S. Pilani and a Gold Medalist from the 1974 batch. He is also an MBA in Project Management. He has worked with Vedanta Resources Plc, MALCO, BALCO, Koncola Copper Mines, Zambia and Sterlite Energy Ltd. and Sesa Goa.

Mr. G.C. Mrig

(Director)

A 1st class first Pickering Gold medalist. An AISM (Mining) from Indian School of Mines, Dhanbad and B.Sc. (Hons.) (Mining Engineering) from Bihar University. Shri G.C. Mrig has been the Chairman – cum – Managing Director of South Easter Coalfields Ltd. and of Bharat Coaking Coal Limited. After superannuation, he set up his own coal washery and has grown his businesses to Sponge Iron, Steel, Power and coal washery equipments.

Mr. Ajay Relan

(Director)

An MBA from IIM, Ahmedabad, he led Citigroup’s Citi Ventures India as its Managing Director. After leaving Citibank, he floated CX Advisors Private Limited and is providing investment advisory services to private equity firms across the globe.

Mr. J.P. Lath

(Director)

Having over 34 years experience in making statutory compliances of large manufacturing unit, making liaison with various Central/State Government Departments for obtaining licenses, permissions, NoC etc.

Mr. Gopal Tiwari

(Director)

Aged about 69 years, Mr Gopal Tiwari holds a Bachelor’s Degree in electrical engineering from Bhagalpur College of Engineering, Bihar. Started his career as Asstt. Engineer in MPEB in 1965 and retired in 2000 as Executive Director. He was invited to join CSEB as member and later as Chairman. He received various awards from Central and State Government acknowledging his contribution.

Mr. K.K. Khanna

(Executive Director)

Aged about 63 years, Mr Khanna is BE (Mech.) from BITS, Pilani, B.E. (Engg.) gold medalist from IIIE, a Law Graduate and an MBA. After joining SAIL in 1971, he has worked at various positions and retired as Director (Technical) in 2007.

Mr. Amit Dixit

(Director)

Aged about 39 years, Mr Dixit is an M.B.A. from Harvard Business School, a M.S. in Engineering from Stanford University where he was awarded John A. Blum fellowship, and B. Tech. from IIT-Bombay. Presently, he is Senior Managing Director of Private Equity at The Blackstone India Advisors.

Mr. Vikram Deswal

(Director)

Aged about 39 years, Mr Deswal is a Graduate from Instutute of Technology, Varanasi, an MBA from IIM, Lucknow and from The Wharton School, University of Pennsylvania, U.S.A. He is Managing Partner and Chief Investment Officer at East Bridge Capital Management Limited, Boston, Massachussette, USA.

PRESS RELEASE:

Monnet Ispat and Energy Limited announces Q1FY13 results

Total Income at Rs. 5264.800 Millions, Net profit at Rs 685.000 Millions

New Delhi, August 14, 2012: Monnet Ispat and Energy Limited (MIEL) a flagship company of Monnet Group, the second largest coal-based sponge iron producer in the country announced its first quarter results for FY13.

For the first quarter ended June 30, 2012, MIEL reported a total income of Rs. 5264.800 Millions as compared to Rs.4271.700 Millions in the corresponding quarter last fiscal. The net profit for the Q1FY13 stood at Rs. 685.000 Millions as compared to Rs. 731.500 Millions in Q1FY12. Operating margin was at Rs.1360.100 Millions for the current quarter.

On a consequential basis, the company had posted a total income of Rs.5371.000 Millions with an operating profit of Rs.1382.200 Millions and net profit of Rs.830.900 Millions

In Q1FY13, the company reports a jump in production and sales volume of sponge iron and sales volume of sponge iron and Power as compared to Q1FY12. The production of sponge iron in Q1FY13 increased to 1,90,266 as compared to 1,65,857 in Q1FY12. During the current quarter the Power generation increased to 215.38 million from 209.23 Million units in Q1FY12. In the previous quarter the company had reported production of sponge iron at 1,95,609 and power generation of 225.60 million units. In Q1FY13, the realizations from sponge iron declined by an average of Rs. 0.002 Million whereas realizations from Power dropped by an average of Rs.0.35 per unit.

Commenting on the results, Sandeep Jajodia, Chairman and Managing Director, MIEL, said, “Lower realizations from the sponge iron and power have put pressure on bottom-line during the quarter.”

“However, the power realization has already started showing improvements and the company expects to have an average realization of Rs.3.30 per unit during the second quarter. The progress on expansion of steel project and 1050 MW power plant is on track. The company is hopeful of rolling out the various modules of the steel project in the second half of the current financial year and this should positively impact the revenue and profitability of the company” Mr. Jajodia added.

About Monnet Group:

Monnet Ispat and Energy Limited (MIEL): MIEL is promoted by Mr. Sandeep Jajodia. Its principal activities include manufacturing and marketing of Sponge Iron, Steel and Ferro Alloys. In addition, MIEL is engaged in mining of mineral assets like coal and iron ore and is also involved in the generation of power for captive consumption. The Monnet Group has manufacturing facilities in Raipur and Raigarh in Chhattisgarh and is currently in the midst of implementing a 1.5 Million Tons integrated steel plant to produce plates, structural and rebar’s at its facility at Raigarh in Chhattisgarh to cater to the high growth infrastructure sector. MIEL through its subsidiary is now making measure of forays in the development of Merchant Power Plants and is currently implementing the first 1050 MW power plant at Angul.

Monnet Power Company Limited (MPCL): MPCL is currently executing thermal power plant of IPP of 1050 MW backed with pit head captive coal mine in Angul, Orissa. The project consists of 2 units of 525 MW to be supplied by BHEL. The project has all its statutory approvals and clearances in place and has achieved financial closure. The capacity is further being enhanced to 1710 MW by adding additional 660 MW at the same sites

Monnet Global Limited (MGL): MGL a wholly owned subsidiary of Monnet Ispat and Energy Limited having offices in Dubai, Jakarta and Johannesburg (South Africa), does all the global acquisitions and mergers for the Group.

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. 55.70
UK Pound	1	Rs. 89.34
Euro	1	Rs. 72.35

INFORMATION DETAILS

Report Prepared by :

BVA

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--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	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		62

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.