MIRA INFORM REPORT

Report Date :

04.05.2013

IDENTIFICATION DETAILS

Name :	VINAYAK STEELS LIMITED
Registered Office :	5-4-83 to 85, TSK Chambers, 1^st Floor, M.G Road, Secunderabad-500003, Andhra Pradesh
Country :	India
Financials (as on) :	31.03.2012
Date of Incorporation :	12.07.1985
Com. Reg. No.:	01-005654
Capital Investment / Paid-up Capital :	Rs. 39.569 millions
CIN No.: [Company Identification No.]	U27109AP1985PLC005654
PAN No.: [Permanent Account No.]	AAACV8144M
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	The company is in the business of manufacturing Steel ingots, Sponge iron and TMT Bars, Trading and Dealing in Steel.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

B (37)

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

Maximum Credit Limit :	USD 920000
Status :	Moderate
Payment Behaviour :	Slow but correct
Litigation :	Exist
Comments :	Subject is an established company having a moderate track record. The profitability of the company appears to be low. The external borrowings of the company also appear to be huge. However, trade relations are reported as fair. Business is active. Payments terms are slow but correct. 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 – 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	ICRA
Rating	Term loan facilities: BB+
Rating Explanation	Moderate risk of default
Date	02.07.2012

Rating Agency Name	ICRA
Rating	Short term facilities: A4+
Rating Explanation	Minimal degree of safety and very high credit.
Date	02.07.2012

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 :	5-4-83 to 85, TSK Chambers, 1^st Floor, M.G Road, Secunderabad-500003, Andhra Pradesh, India
Tel. No.:	91-40-27535905 / 27537595 / 27537606
Fax No.:	91-40-27537595
E-Mail :	dhatu@sify.com

DIRECTORS

As on 28.09.2012

Name :	Mr. Vinod Kumar Kedia
Designation :	Managing director
Address :	Krdia House, 1-8-210/7, Plot No. 118, Park Avenue Colony, P.G. Road, Secunderabad-500003, Andhra Pradesh, India
Date of Birth/Age :	29.08.1961
Qualification :	Graduate
Date of Appointment :	01.06.2006
PAN No.:	AADPK6734E
DIN No.:	00105909
Name :	Asha Kedia
Designation :	Whole-time director
Address :	Krdia House, 1-8-210/7, Plot No. 118, Park Avenue Colony, P.G. Road, Secunderabad-500003, Andhra Pradesh, India
Date of Birth/Age :	19.06.1963
Qualification :	Graduate
Date of Appointment :	29.09.2006
PAN No.:	ADOPK5823C
DIN No.:	00123083
Name :	Mr. Vineet Kumar Kedia
Designation :	Whole-time director
Address :	Krdia House, 1-8-210/7, Plot No. 118, Park Avenue Colony, P.G. Road, Secunderabad-500003, Andhra Pradesh, India
Date of Birth/Age :	14.05.1986
Qualification :	Graduate
Date of Appointment :	29.09.2006
PAN No.:	AQRPK4383M
DIN No.:	00123185
Name :	Mr. Sridhar Kumar Kshirsagar
Designation :	Director
Address :	32/A, Chandranagar Colony, Rasoolpura, Secunderabad-500003, Andhra Pradesh, India
Date of Birth/Age :	18.06.1970
Date of Appointment :	01.12.2008
DIN No.:	01193123
Name :	Mr. Sandeep Kumar Jaju
Designation :	Director
Address :	H. No. 18-4-477, Shamshergunj, Aliyabad, Hyderabad-500053, Andhra Pradesh, India
Date of Birth/Age :	09.01.1979
Date of Appointment :	27.10.2008
DIN No.:	01741682

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 28.09.2012

Note: Shareholding detail file attached

As on 28.09.2012

Equity Share Break up (Percentage of Total Equity)

Category	Percentage of Holding
Bodies corporate	24.38
Directors or relatives of Directors	68.19
Other top fifty shareholders	7.43
Total	100.00

BUSINESS DETAILS

Line of Business :

The company is in the business of manufacturing Steel ingots, Sponge iron and TMT Bars, Trading and Dealing in Steel.

Products :

Item Code No.	Product Description
7214109	TMT Bars

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

• Axis Bank Limited, 5-2-183/184, ASC Centre, III Floor, R P Road, Hyderababd - 500003, Andhra Pradesh, India

· State Bank of Hyderabad, Mahaboobgunj Branch, Hyderabad - 500012, Andhra Pradesh, India

• Canara Bank Limited

Facilities :

Secured Loan	31.03.2012 (Rs. in Millions)	31.03.2011 (Rs. in Millions)
Rupee term loans from banks	59.075	39.385
Term loans from others	11.250	0.000
Loans taken for fixed assets	3.439	2.688
Term loans	306.873	210.465
Total	380.637	252.538

Banking Relations :	--
Auditors :
Name :	R. K. BANG and Company Chartered Accountants
Address :	1-2-524/211, Sagar View Building, Domalguda, Hyderabad-500029, Andhra Pradesh, India
PAN No.:	ABXPB9924A

CAPITAL STRUCTURE

As on 31.03.2012

Authorised Capital :

No. of Shares	Type	Value	Amount
400000	Equity Shares	Rs.100/- each	Rs. 40.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
395693	Equity Shares	Rs.100/- each	Rs. 39.569 Millions

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		39.569	39.569	39.569
2] Share Application Money		0.000	0.000	1.600
3] Reserves & Surplus		191.748	183.646	175.227
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		231.317	223.215	216.396
LOAN FUNDS
1] Secured Loans		380.637	252.538	297.358
2] Unsecured Loans		108.913	112.081	64.066
TOTAL BORROWING		489.550	364.619	361.424
DEFERRED TAX LIABILITIES		11.064	10.714	11.312
TOTAL		731.931	598.548	589.132
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		191.132	185.774	198.651
Capital work-in-progress		49.469	11.050	0.000
INVESTMENT		80.202	78.267	77.087
DEFERRED TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	187.913	136.068	211.917
	Sundry Debtors	176.926	203.870	101.399
	Cash & Bank Balances	56.523	3.179	5.100
	Other Current Assets	9.565	8.531	22.293
	Loans & Advances	99.208	65.815	32.058
Total Current Assets		530.135	417.463	372.767
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	44.778	27.847	49.787
	Other Current Liabilities	50.222	51.158	11.055
	Provisions	24.007	15.001	3.596
Total Current Liabilities		119.007	94.006	64.438
Net Current Assets		411.128	323.457	308.329
MISCELLANEOUS EXPENSES		0.000	0.000	5.065
TOTAL		731.931	598.548	589.132

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011	31.03.2010
	SALES
		Income	1369.060	1359.426	1196.033
		Other Income	1.728	1.491	1.594
		TOTAL (A)	1370.788	1360.917	1197.627
Less	EXPENSES
		Cost of materials consumed	1034.065	974.478
		Employee benefit expense	23.510	16.320	1092.518
		Expenditure on production, transportation and other expenditure pertaining to E&P activities	0.317	0.317
		Other expenses	242.612	243.320
		Changes in inventories of finished goods, work-in-progress and stock-in-trade	(6.650)	47.974
		TOTAL (B)	1293.854	1282.409	1092.518
	PROFITBEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		76.934	78.508	105.109
Less	FINANCIAL EXPENSES (D)		40.851	39.777	36.189
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		36.083	38.731	68.920
Less/ Add	DEPRECIATION/ AMORTISATION (F)		23.809	25.399	28.512
	PROFIT BEFORE TAX (E-F) (G)		12.274	13.332	40.408
Less	TAX (H)		4.172	4.913	14.317
	PROFIT AFTER TAX (G-H) (I)		8.102	8.419	26.091
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		137.851	129.432	103.341
	BALANCE CARRIED TO THE B/S		145.953	137.851	129.432
	Earnings / (Loss) Per Share (Rs.)		20.48	21.48	63.94

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011	31.03.2010
PAT / Total Income	(%)	0.59	0.62	2.18
Net Profit Margin (PBT/Sales)	(%)	0.90	0.98	3.38
Return on Total Assets (PBT/Total Assets}	(%)	1.70	2.21	7.07
Return on Investment (ROI) (PBT/Networth)		0.05	0.06	0.19
Debt Equity Ratio (Total Debt/Networth)		2.12	1.63	1.67
Current Ratio (Current Asset/Current Liability)		4.45	4.44	5.78

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	Yes
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	Yes
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	Yes

LITIGATION DETAILS

CASE STATUS INFORMATIONS

CEA 281 / 2010 CEASR 3222 / 2010 CASE IS:PENDING

PETITIONER RESPONDENT

THE COMMISSIONER OF CUSTOMS & CENTRAL EXCISE, VS M/S VINANAYAK STEELS LIMITED.,

HYD. MAHABOOBNAGAR

PET. ADV.: SATHYARAM (SR SC FOR CB EXCISE) RESP.ADV.: GANDRA MOHAN RAO

SUBJECT: CENTRAL EXCISE APPEAL DISTRICT: HYDERABAD

FILING DATE: 17-8-2010 POSTING STAGE: FINAL HEARING (ARBITRATION)

REG. DATE: 31-08-2010 LISTING DATE: 28-07-2011 STATUS : ADMIT

HON’BLE JUDGE(S): V.V.S.RAO RAMESH RANGANATHAN

OPERATIONS

Subject is an fully integrated Steel Plant manufacturing superior Quality steel. Our Rolling Mill Plant is equipped with the state of art German Technology for manufacturing high quality TMT Bars that are marketed under the Brand name VINAYAK THERMEX TMT. VSL has installed modern pollution control equipment to maintain a friendly environment. It is one of the few integrated steel plants awarded with ISO 9001-2000 certification. In the month of March 2012, They have successfully erected the Continuous Billet Caster Machine in their SMS-II Division We are developing an Indigenous Technology for establishing Iron Ore Pelletization Plant and Iron Ore Beneficiation Plant. They have designed this Plant as per our requirement, i.e., the Plant can be either Stand-alone Unit or it can also be integrated with existing Sponge Plant, resulting in On-line production of Sponge Iron directly from Iron Ore Fines. They are also in the final stages of Switchover of the Electrical line from existing 32 KVA to 132 KVA. The above modernization would enable the plant to make optimum use of its capacities at various stages of production

OUTLOOK

The outlook for the industry looks reasonable, since India has growing demand for steel. The Indian steel industry has made a rapid progress on strong fundamentals over the recent few years. The industry is getting all essential ingredients required for dynamic growth. Even in the tough times of economic slowdown, the industry succeeded to sustain its positive growth momentum on the strong fundamentals of domestic demand from construction and infrastructure sectors. With an impressive track record, the country has become a reputed name in the world steel industry. Global steel giants from all over the world have shown interest in the industry because of its phenomenal performance.

UNSECURED LOAN

Particulars	31.03.2012 (Rs. in Millions)	31.03.2011 (Rs. In Millions)
Loans and advances from directors	106.113	108.888
Loans and advances from others	2.800	3.193
Total	108.913	112.081

BANKERS CHARGES REPORT AS PER REGISTRY

Corporate identity number of the company	U27109AP1985PLC005654
Name of the company	VINAYAK STEELS LIMITED
Address of the registered office or of the principal place of business in India of the company	5-4-83 to 85, TSK Chambers, 1st Floor, M.G Road, Secunderabad-500003, Andhra Pradesh, India E-mail: dhatu@sify.com
This form is for	Creation of charge
Type of charge	Movable property (not being pledge)
Particular of charge holder	Axis Bank Limited, 5-2-183/184, ASC Centre, III Floor, R P Road, Hyderababd - 500003, Andhra Pradesh, India E-mail: n.shankerrao@axisbank.com
Nature of instrument creating charge	Loan Cum Hypothecation Agreement
Date of instrument Creating the charge	06.09.2012
Amount secured by the charge	Rs. 1.399 millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of Interest 11.00% Terms of Repayment Repayable In 35 Equated Monthly Installments Each Installment Amounting to Rs 0.047 million Margin 10% Extent and Operation of the charge First and exclusive charge on assets financed by Axis Bank Limited till the NOC received from the Bank
Short particulars of the property or asset(s) charged (including complete address and location of the property)	1 No Ashok Leyland 1616 Chassis Vide loan account no CVR000800555948

FIXED ASSETS

• Land
• Buildings
• Factory building
• Plant and equipment
• Other pollution reduction equipment
• Other plant and equipment
• Furniture and fixtures
• Vehicles
• Ships vessels
• Office equipment
• Computer equipments

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.53.95
UK Pound	1	Rs.83.81
Euro	1	Rs.70.50

INFORMATION DETAILS

Report Prepared by :

MRI

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	3
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	4
--CREDIT LINES	1~10	4
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	YES
--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		37

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.