MIRA INFORM REPORT

Report Date :

01.06.2013

IDENTIFICATION DETAILS

Name :	MISHRA DHATU NIGAM LIMITED
Registered Office :	P.O. Kanchan Bagh, Hyderabad-500058, Andhra Pradesh
Country :	India
Financials (as on) :	31.03.2012
Date of Incorporation :	20.11.1973
Com. Reg. No.:	01-001660
Capital Investment / Paid-up Capital :	Rs.1833.400 Millions
CIN No.: [Company Identification No.]	U14292AP1973GOI001660
TAN No.: [Tax Deduction & Collection Account No.]	HYDM00022B
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Manufacturer of Titanium and Titanium Base Alloys, Molybdenum and Articles and Other Alloy Steel in Semi finished Forms.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

A (59)

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 14700000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a government of India undertaking functioning under the Ministry of Defence. It is a well established and reputed company having fine track record. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

NOTES :

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

ECGC Country Risk Classification List – 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

EXTERNAL AGENCY RATING

Rating Agency Name	CRISIL
Rating	Long term rating: AA-
Rating Explanation	High degree of safety and very low credit risk.
Date	12.09.2012

Rating Agency Name	CRISIL
Rating	Short term rating: A1+
Rating Explanation	Very strong degree of safety and lowest credit risk.
Date	12.09.2012

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 :	P.O. Kanchan Bagh, Hyderabad-500058, Andhra Pradesh, India
Tel. No.:	91-40-24340001 (10 Lines) 91-40-24340201 / 24340280 / 24340044 / 24340853 (Other Lines)
Fax No.:	91-40-24440214 / 24340214 / 24340764
E-Mail :	mdnexpt@hd1.vsnl.net.in spralloy@hd1.vsnl.net.in spralloy.midhani@ap.nic.in pvsrao53@gmail.com
Website :	http://www.midhani.com
Regional Office:	Flat No.8330, C-8, Vasant Kunj, New Delhi-110070, India
Tel. No.:	91-11-26132875
Fax No.:	91-11-26890253
E-Mail :	dro.midhani@ap.nic.in
Commercial Office:	Located At: · Chennai · Kolkata · Mumbai

DIRECTORS

As on 31.03.2012

Functional/Whole time Directors :
Name :	M Narayana Rao
Designation :	Chairman and Managing Director
Name :	V S Krishnamurthy
Designation :	Director ( Finance)
Name :	Dr. D.K. Likhi
Designation :	Director ( Production and Marketing)
Date of Birth :	52 years
Date of Appointment :	01.09.2011
Part-time Official/Government Directors :
Name :	Ms. Kusum Singh
Designation :	Joint Secretary (Personnel and Coordination)
Name :	Gyanesh Kumar
Designation :	Joint Secretary (Naval Systems), Department of Defence Production Ministry of Defence, Government of India
Address :	Qtr. No.8-2, Sector-13, A Block, R. K. Puram, New Delhi-110 066, Delhi, India
Date of Birth/Age :	27.01.1964
Date of Appointment :	28.01.2010
Name :	Dr. G. Malakondaiah
Designation :	Distinguished Scientist Director, DMRL, DRDO Ministry of Defence, Govt. of India.
Part-time Non-Official Directors :
Name :	Mrs. Indu Liberhan
Designation :	Ex-Secretary. Ministry of Defence (Finance) Government of India
Name :	Dr. Dipankar Banerjee
Designation :	Professor, Department of Materials Engineering, Indian Institute of Science, Bangalore.
Name :	Dr. Kota Bhanu Sankara Rao
Designation :	Dean School of Engineering Sciences and Technology, University of Hyderabad, Hyderabad
Date of Appointment :	27.04.2011

KEY EXECUTIVES

Name :	Mr. P.V. Subba Rao
Designation :	Company Secretary
Permanent Special Invitee to Board :
Name :	Mr. P.K. Kataria
Designation :	Addl. FA and Joint Secretary Ministry of Defence (Finance) Government of India.
Date of Appointment :	28.04.2011
Vigilance Official :
Name :	Mr. T V Reddy, IFS
Designation :	Chief Vigilance Officer
RTI Officials :
Name :	Mr. K Anand Kumar
Designation :	Central Public Information Officer (CPIO)
Principal Executives
Name :	Mr. B.G. Raj
Designation :	General Manager ( Commercial)
Name :	Mr. P Sarkar
Designation :	General Manager (Production)
Name :	Dr. H V Kiran
Designation :	General Manager (Marketing & E R)
Name :	Mr. P Mukhopadhyay
Designation :	General Manager(QCL, R&D)
Name :	Mr. P.V. Subba Rao
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

NOT AVAILABLE

BUSINESS DETAILS

Line of Business :

Manufacturer of Titanium and Titanium Base Alloys, Molybdenum and Articles and Other Alloy Steel in Semi finished Forms.

Products :

PRODUCT DESCRIPTION	ITEM CODE NO. (ITC CODE)
Other Alloys Steel in Semi-Finished	72240000
Titanium and Titanium Base Alloys	81080000
Molybdenum and Articles Thereof - Moly wire	81029300

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

· State Bank of India

HDFC Bank Limited

Andhra Bank

State Bank of Hyderabad

Facilities :

Secured Loan	31.03.2012 (Rs. in Millions)	31.03.2011 (Rs. in Millions)
Term Loans-From Banks (Secured by way of Hypothecation of Vehicle)	0.000	0.152
From State Bank of India Cash Credit (By hypothecation of Raw materials, stock in process, finished good and book debts.)	249.299	9.725
From various banks - Short term overdraft secured by charge to fixed deposits	636.995	0.000
From HDFC Bank-Car Loan (Secured against hypothecation of vehicle.)	0.152	0.815
Total	886.446	10.692

Banking Relations :	--
Auditors :
Name :	Satyam and Veerabhadra Chartered Accountants
Address :	Flat No. 107, Venkatarama Towers, Opposite Skyline Theatre, Basheerbagh, Hyderabad-500 029, Andhra Pradesh, India
Tel. No.:	91-40-23222564/23224813
E-Mail :	styam_veerabhadra@yahoo.com

CAPITAL STRUCTURE

As on 31.03.2012

Authorised Capital :

No. of Shares	Type	Value	Amount
2000000	Equity Shares	Rs.1000/- each	Rs.2000.000 Millions

Issued, Subscribed & Paid-up Capital :*

No. of Shares	Type	Value	Amount
1833400	Equity Shares	Rs.1000/- each	Rs.1833.400 Millions

Note: The company has only one class of share, i.e., equity shares having the face value of Rs.1000/- per share. Hundred percent shares is held by President of India.

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		1833.400	1833.400	1833.400
2] Share Application Money		40.000	0.000	0.000
3] Reserves & Surplus		1804.530	1546.146	1275.918
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		3677.930	3379.546	3109.318
LOAN FUNDS
1] Secured Loans		886.446	10.692	1.745
2] Unsecured Loans		298.000	350.000	442.000
TOTAL BORROWING		1184.446	360.692	443.745
DEFERRED TAX LIABILITIES		5.380	4.004	4.718
TOTAL		4867.756	3744.242	3557.781
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		606.740	552.639	367.682
Capital work-in-progress		102.170	93.881	155.008
INVESTMENT		21.011	21.011	21.011
DEFERRED TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	4433.624	3922.610	3204.603
	Sundry Debtors	1352.298	1040.638	1075.371
	Cash & Bank Balances	1503.606	1884.598	2403.300
	Other Current Assets	211.608	104.211	143.402
	Loans & Advances	1768.951	1283.982	948.565
Total Current Assets		9270.087	8236.039	7775.241
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	431.572	438.986	184.650
	Other Current Liabilities	2661.883	3278.826	3537.208
	Provisions	2038.797	1441.516	1039.303
Total Current Liabilities		5132.252	5159.328	4761.161
Net Current Assets		4137.835	3076.711	3014.080
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		4867.756	3744.242	3557.781

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011	31.03.2010
	SALES
		Income	4963.051	4078.843	3634.566
		Other Income	222.391	190.853	186.313
		TOTAL (A)	5185.442	4269.696	3820.879
Less	EXPENSES
		Cost of materials consumed	1446.193	1966.784
		Employee benefits and expenses	1121.196	1000.933
		Other expenses	1363.497	1119.184
		Change in inventory of finished goods, work-in-progress and stock-in trade	130.168	(675.881)
		TOTAL (B)	4061.054	3411.020	3096.137
	PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		1124.388	858.676	724.742
Less	FINANCIAL EXPENSES (D)		91.484	67.941	15.595
	PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		1032.904	790.735	709.147
Less/ Add	DEPRECIATION/ AMORTISATION (F)		47.876	38.921	32.469
	PROFIT/ (LOSS) BEFORE TAX (E-F) (G)		985.028	751.814	676.678
Less	TAX (H)		300.479	247.596	230.512
	PROFIT/ (LOSS) AFTER TAX (G-H) (I)		684.549	504.218	446.166
Less	APPROPRIATIONS
		Interim Dividend	40.000	20.000	10.000
		Proposed Final Dividend	326.680	180.000	79.233
		Tax on Dividend	59.485	33.990	15.165
		General Reserve	258.384	270.228	341.768
	Earnings / (Loss) Per Share (Rs.)		37.338	27.502	304.88

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011	31.03.2010
PAT / Total Income	(%)	13.20	11.81	11.68
Net Profit Margin (PBT/Sales)	(%)	19.85	18.43	18.62
Return on Total Assets (PBT/Total Assets}	(%)	9.97	8.55	8.31
Return on Investment (ROI) (PBT/Networth)		0.27	0.22	0.22
Debt Equity Ratio (Total Debt/Networth)		0.32	0.11	0.14
Current Ratio (Current Asset/Current Liability)		1.81	1.60	1.63

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	No
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	No
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	No

UNSECURED LOAN

Particulars	31.03.2012 (Rs. in Millions)	31.03.2011 (Rs. In Millions)
Loan from Government of India (Excluding Rs.100.000 millions which is due for payment within 12 months treated as short term borrowings) Terms of Repayment (every year 1/5 of the principal amount)	198.000	258.000
From Government of India Ministry of Defence ** (Equal five annual instalment from the first anniversary after the date of drawal of loan)	100.000	92.00
Total	298.000	350.000

** This is earmarked for procurement of Forge Press exclusively which is kept in fixed deposit, the procurement activity is in process.

MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Company is a Public Sector Undertaking under the Administrative control of Dept. of Defence Production, Ministry of Defence, Government of India, incorporated in the year 1973. The main object of the company is to manufacture and process various grades, types, sizes of steels, titanium and superalloys in particular and other special metals and their alloys in the form of ingots, billets, forgings, rolled plates, sheets and strips, wires, tubes, and other sintered, fabricated shapes and forms required for aircraft, rockets, missiles, electronics, instruments, and allied industries in India or elsewhere either independently or in collaboration with others.

The company has single manufacturing unit with Registered Office situated in Hyderabad in the State of Andhra Pradesh. It possess wide range of facilities recognised in metallurgical industry and produces wide variety of products applying varied state-of-art technologies and processes under one roof. It is unique of its kind in the whole of Asia. The mission of the Company is to achieve self-reliance in the research, development, production and supply of strategic materials and products for critical and hi-tech engineering applications.

The Company mainly caters to the needs of critical materials and alloys required by strategic sectors of their country like Defence, Space, Atomic Energy, Aeronautics etc. The products produced by MIDHANI are basically import substitutes which were denied to India by western world and their non-availability would have effected various prestigious National programs of the country. The Company had fully absorbed the technologies offered by collaborators during its initial stages and fully reaped the benefits associated with such technologies. With the constant developments made over the years in various operational areas, by utilising inhouse RandD capabilities; the company indigenised various critical technologies, alloys and products which reduced dependence on imports of these critical materials.

ORGANISATION

The main Divisions/Departments of the company consisted of Production Planning and Control, Production Divisions, Technology, Methods and R and D Departments, Projects, Quality Control, Commercial, Marketing, Finance, Personnel and Administration etc. The production function is optimally integrated to Material planning and procurement, Marketing, Finance and other logistic Divisions.

NATURE OF OPERATIONS

MIDHANI continues to focus on carrying out improvements in operational processes and product improvements by putting in place, a robust monitoring model to achieve repeatable and predictable results. The necessity to fulfill the ever increasing demands for stringent specificational requirements of the Strategic customers of the Company provides the basic thrust and driving force to the organization to suitably frame its policies and procedures in every sphere of organizational activity to discharge its goal.

SECTOR WISE PERFORMANCE

Presently about 90% of MIDHANI’s products cater to strategic sectors viz Ordinance Factories (OFB), Defence Research and Development Orgnization (DRDO) and applications of Air, Naval, Land Forces; Indian Space Research Organization (ISRO), Department of Atomic Energy (DAE), etc. In addition MIDHANI also supplies special alloys to commercial sector including Larsen and Toubro, Wallchandnagar etc., which also goes into Defence and Atomic energy sectors of their country. During the year 2011-'12 the percentage of MIDHANI's supplies accounted for 79% to Defence, 10 % to Space, 1 % to Nuclear and the balance to other commercial sectors.

MODERNISATION and UP-GRADATION PROGRAM

In an ambitious plan to becoming a global player in the field of Superalloys, Special Steels, Titanium and Titanium alloys and in an effort to supply finish components as against semis and mill forms, MIDHANI has embarked into an expansion phase augmenting, expanding and revamping its age old in-house production facilities with contemporary technologies available elsewhere in the world and also developing new applications for

the existing products.

MIDHANI, being not designed, initially, to cater to large scale operations, the ploughing back of profits for further investment were meager. Hence phase - wise development strategy was adopted and the same has been yielding results.

Under Phase-I an investment of around Rs.1510.000 millions. was envisaged for revamping /upgrading /enhancing production capacities. Under Phase-II the main focus was to enhance Production capacities of equipment with additions at a cost of Rs. 2050.000 millions Prominent among them were; New 6000 MT Forge Press with 20 T Manipulator with an estimated investment of Rs.1103.900 millions; Radial Axial Ring Rolling Mill an estimated cost of Rs.318.700 millions; Establishment of a New Fastener Plant, R and D Building, Corporate Building and Administrative Building with an expected capital outlay of Rs. 320.000 millions; Instillation of 20 Ton Electric Arc Furnace with Vacuum Degassing (VD) /Vacuum Oxygen Decarbursing (VOD) and Ladle Refining Furnace (LRF) at a cost of Rs. 300.000 millions under funding from OFB. Under Phase-III a major expansion program at an estimated investment of Rs. 5070.000 millions for setting up of balancing facilities funding coming from ASL, DRDO to the extent of Rs. 2000.000 millions and Rs. 3070.000 millions from OFB was envisaged and the work in respect of the same is at an advanced stage.

FIXED ASSETS

v Tangible Assets

Land and Roads and Bridges

Buildings/ Drainage /water systems

Plant and Equipment

Furniture and Fixtures

Furniture and Fittings

Audio Visual Aids

Power Supply and Communication Systems

Vehicles

Office Equipment

Other (Electrical Installations)

v Intangible Assets

Computer Software

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No 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 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.56.50
UK Pound	1	Rs.86.01
Euro	1	Rs.73.68

INFORMATION DETAILS

Report Prepared by :

MRI

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	6
--CREDIT LINES	1~10	6
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		59

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.