MIRA INFORM REPORT

Report Date :

12.10.2013

IDENTIFICATION DETAILS

Name :	RMG ALLOY STEEL LIMITED (w.e.f. 14^th May, 2013)
Formerly Known As :	REMI METALS GUJARAT LIMITED (w.e.f. 23^rd January, 1993) REMI METALS LIMITED
Registered Office :	Plot No.1, G.I.D.C. Industrial Estate, Valia Road, Jhagadia, District Bharuch – 392 001, Gujarat
Country :	India
Financials (as on) :	31.03.2013
Date of Incorporation :	06.10.1993
Com. Reg. No.:	04-020358
Capital Investment / Paid-up Capital :	Rs.1053.000 millions
CIN No.: [Company Identification No.]	L27100GJ1993PLC020358
TAN No.: [Tax Deduction & Collection Account No.]	MUMR14671G
PAN No.: [Permanent Account No.]	AAACR2121C
Legal Form :	Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Manufacturer of steel and steel products such as seamless tubes and rolled products.
No. of Employees :	Information declined by the management

RATING & COMMENTS

MIRA’s Rating :

Ca (13)

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Moderate
Payment Behaviour :	Slow
Litigation :	Clear
Comments :	Subject is an established company having a moderate track record. The networth of the company has been eroded due to continuous accumulated loss incurred from its operations during 2013. However, business is active. Payments are reported to be slow. The company can be considered for business dealings on a safe and secured trade terms and conditions.

NOTES :

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

ECGC Country Risk Classification List – March 31^st, 2013

Country Name	Previous Rating (31.12.2012)	Current Rating (31.03.2013)
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

We are living in a world where volatility and uncertainty have become the New Normal. We saw a change of government in countries like Tunisia, Egypt, Libya and Vietnam. Once powerful countries in Europe are now fighting for bankruptcy. We have taken growth in the developing part of the world for granted but economic growth in China and India has begun to slow. Companies that were synonymous with their product categories just a few years ago are now no longer in existence. Kodak, the inventor of the digital camera had to wind up its operations, HMV, the British entertainment retailing company and Borders, once the second largest bookstore have shut down due to their inability to evolve their business models with the changing time. Readers’ Digest, Thomson Register are no more !

There is another megatrend happening. The World order is changing as economic power shifts from West to East. According to McKinsey study, it took Britain more than 100 years to double its economic output per person during its industrial revolution and the US later took more than 50 years to do the same. More than a century later, China and India have doubled their GDP per capital in 12 and 18 years respectively. By 2020, emerging Asia will become the world’s largest consuming block, overtaking North America.

The years after the outbreak of the global financial crisis, the world economy continues to remain fragile. The Indian economy demonstrated remarkable resilience in the initial years of the contagion but finally lost ground last year. GDP growth slowed down. Currency has been weakening. There is a marked deceleration in agriculture, industry and services. Dampening sentiment led to a cut-back in investment as well as private consumption expenditure.  Inflation remained at high levels fuelled by the pressure from the food and fuel sectors. The large fiscal and current account deficit s continued to cause grave concern. It is imperative that India regains its growth trajectory of 8-9 % sooner than later. This is crucially important given the need to create gainful livelihood opportunities for the millions living in poverty as also the large contingent of young people joining the job market every year.

EXTERNAL AGENCY RATING

Rating Agency Name	CARE
Rating	Long Term Rating: D
Rating Explanation	Default on maturity.
Date	March, 2013

Rating Agency Name	CARE
Rating	Short Term Rating: D
Rating Explanation	Default on maturity.
Date	March, 2013

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.

INFORMATION DECLINED

Management non-cooperative

(Tel. No.: 91-22-24908000)

LOCATIONS

Registered Office/ Head Office/ Quarters/ Factory :	Plot No.1, G.I.D.C. Industrial Estate, Valia Road, Jhagadia, District Bharuch – 392 001, Gujarat, India
Tel. No.:	91-2645-619700/ 220406/ 7
Fax No.:	91-2645-226841/ 619800/ 220403
E-Mail :	kaushik_kapasi@welspun.com
Website :	http://www.remimetals.com
Corporate Office/ Administrative Office :	Trade World, ‘B’ Wing, 9^th Floor, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel (West), Mumbai – 400 013, Maharashtra, India
Tel. No.:	91-22-66136000/ 24908000
Fax No.:	91-22-24908020/ 24902373
Sales Office :	Located at: · Ahmedabad · New Delhi · Chennai · Bangalore · Kolkata · Nagpur

DIRECTORS

AS ON 31.03.2013

Name :	Mr. Atul Desai
Designation :	Chairman
Name :	Mr. Abhishekh Mandawewala
Designation :	Director
Name :	Mr. Shashank Chaturvedi
Designation :	Executive Director
Name :	Mr. Ashok Jain
Designation :	Director
Name :	Mr. Hanuman Kanodia
Designation :	Director
Name :	Mr. V.S. Iyer
Designation :	Director
Name :	Mr. Nirmal Gangwal
Designation :	Director

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 30.06.2013

Category of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Any Others (Specify)	94618674	87.26
Directors/Promoters & their Relatives & Friends	1799	0.00
Group Companies	94616875	87.26
Sub Total	94618674	87.26
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	94618674	87.26
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	18430	0.02
Financial Institutions / Banks	140	0.00
Foreign Institutional Investors	23761	0.02
Sub Total	42331	0.04
(2) Non-Institutions
Bodies Corporate	2087989	1.93
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 million	6908356	6.37
Individual shareholders holding nominal share capital in excess of Rs.0.100 million	3751921	3.46
Any Others (Specify)	1026569	0.95
Clearing Members	3171	0.00
Non Resident Indians	23398	0.02
Trusts	1000000	0.92
Sub Total	13774835	12.70
Total Public shareholding (B)	13817166	12.74
Total (A)+(B)	108435840	100.00
(C) 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)	108435840	0.00

BUSINESS DETAILS

Line of Business :

Manufacturer of steel and steel products such as seamless tubes and rolled products.

Products :

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

PRODUCTION STATUS (AS ON 31.03.2011)

Particulars	Year ended 31.03.2011 Qty. (MT)
i) Licensed Capacity	— *
ii) Installed Capacity
- Steel Bloom	150000
- Rolled Products	100000
- Seamless Pipes	70000
iii) Production
- Steel	109318**
-Seamless Pipes	12366*

* Not applicable in terms of Government of India’s Notification No.SO.477 (E) dated 25^th July 1991.

** Includes 7882 MT processed by third parties.

GENERAL INFORMATION

Customers :

• Echjay Industries Limited
• Sadhu Forge Limited
• Bharat Forge Limited
• Ramkrishna Forgings Limited
• Kadvani Forge Limited
• GNA Group
• RIJ Engineering Limited
• Ahmednagar Forge Limited
• MM Forge Limited
• Bay Forge
• Trinity Engineers Limited
• Kalyani Forge Limited
• BHEL
• TOYO Engineering
• Fremak Industries Inc
• Siemens
• John Deere

No. of Employees :

Information declined by the management

Bankers :

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

Facilities :

Secured Loans	31.03.2013 (Rs. in Millions)	31.03.2012 (Rs. in Millions)
LONG TERM BORROWINGS
Term Loans from Banks
Rupee Loans	1346.300	162.500
Foreign Currency Loan	0.000	193.500
SHORT TERM BORROWINGS
From Bank
Working Capital Loans	1098.900	887.300
Other Loan	0.000	100.000
Total	2445.200	1343.300

Notes:

LONG TERM BORROWINGS

a) Rupee loans of Rs.1544.400 millions (Previous year Rs.786.000 millions) and foreign currency loan of Rs. Nil (previous year Rs.216.400 millions) are secured, on pari passu basis, by way of:

i. Equitable mortgage of immoveable properties on first charge basis.

ii. Hypothecation of movable fixed assets on first charge basis.

iii. Second charge on current assets.

Rupee loans carry interest at bank prime lending rate /base rate plus margin. Loans of

i) Rs.484.400 millions are repayable in 20 quarterly installment starting from September 2010 and ending in September 2015.

ii) Rs.370.000 millions are repayable in 12 quarterly installments starting from April 2014 and ending in January 2017.

iii) Rs.690.000 millions are repayable in 21 quarterly installment starting from September 2014 with last of the installments in April 2020.

b) Rupee Term loans include installment of Rs.14.100 millions due on the balance sheet date. The same but for Rs.4.000 millions, have since been paid.

SHORT TERM BORROWINGS

a) Working Capital Loans are secured, on pari passu basis, by way of

i. Hypothecation of current assets on first charge basis.

ii. Hypothecation of movable fixed assets on second charge basis.

iii. Equitable mortgage of immoveable properties on second charge basis.

b) Working Capital Loans carry interest, at bank prime lending rate/base rate plus margin, ranging from 13.50% to 15.15%.

c) Rupee loan from bank was secured by second pari passu charge on immoveable properties of the company and it carried interest at 13.15%.

Banking Relations :	--
Auditors :
Name :	Chaturvedi and Shah Chartered Accountants
Address :	Nariman Point, Mumbai – 400 021, Maharashtra, India
Enterprise having significant influence over the Company :	Welspun Steel Limited Wide Screen Holding Private Limited

CAPITAL STRUCTURE

AS ON 31.03.2013

Authorised Capital :

No. of Shares	Type	Value	Amount
110000000	Equity Shares	Rs.6/-each	Rs.660.000 millions
54000000	Preference Shares	Rs.10/-each	Rs.540.000 millions
	Total		Rs.1200.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
108435840	Equity Shares	Rs.6/-each	Rs.650.600 millions
40242857	Preference Shares	Rs.10/-each	Rs.402.400 millions
	Total		Rs.1053.000 millions

Reconciliation of the Number of Shares Equity Shares:

Particulars	As at 31^st March, 2013
	No. of Shares	Amount (Rs. in millions)
As at beginning of the year	108435840	650.600
Share issued during the year	--	--
Buyback/ forfeiture/ reduction shares	--	--
Outstanding at the end of the year	108435840	650.000

Reconciliation of the Number of Shares Preference Shares:

Particulars	As at 31^st March, 2013
	No. of Shares	Amount (Rs. in millions)
As at beginning of the year	--	--
Share issued during the year	40242857	402.400
Buyback/ forfeiture/ reduction shares	--	--
Outstanding at the end of the year	40242857	402.400

Details of Shareholders holding more than 5% of the aggregate shares

Name of the Shareholders	As at 31^st March, 2013
	No. of Shares	% held
Equity Shares:
Welspun Steel Limited	43247034	39.88
Widescreen Holding Private Limited	24143333	22.27
Magnificent Trading Private Limited	7012334	6.47
Calplus Trading Private Limited	5520481	5.09
12% Cumulative Redeemable Preference Shares (CRPS) :
Welspun Steel Limited	40242857	100.00

Terms/ rights attached to

Equity shares:

The Company has 108,435,840 equity share having par value of Rs.6/- each fully paid up. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends, if any, in Indian rupees. The dividend proposed if any, by the board of Directors is subject to the approval of the Shareholders in ensuing annual general meeting.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the share holders.

Preference Share:

The CRPS carry dividend (cumulative) of 12% per annum. The CRPS are redeemable with premium of Rs.25 per share in three equal annual installments payable from the end of eight years to ten years from 19^th February 2013, the date of allotment.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2013	31.03.2012	31.03.2011
I. EQUITY AND LIABILITIES
(1) Shareholders' Funds
(a) Share Capital	1053.000	650.600	650.600
(b) Reserves & Surplus	(1911.000)	(1984.100)	(1414.000)
(c) Money received against share warrants	0.000	0.000	0.000
(2) Share Application money pending allotment	150.000	0.000	0.000
Total Shareholders’ Funds (1) + (2)	(708.000)	(1333.500)	(763.400)
(3) Non-Current Liabilities
(a) Long-term borrowings	1614.200	2106.100	2673.500
(b) Deferred tax liabilities (Net)	0.000	0.000	0.000
(c) Other long term liabilities	0.000	0.000	0.000
(d) Long-term provisions	20.800	22.000	17.700
Total Non-current Liabilities (3)	1635.000	2128.100	2691.200
(4) Current Liabilities
(a) Short term borrowings	1282.100	1160.300	863.300
(b) Trade payables	868.400	1785.000	1407.700
(c) Other current liabilities	549.100	844.700	340.200
(d) Short-term provisions	2.700	1.900	2.800
Total Current Liabilities (4)	2702.300	3791.900	2614.000
TOTAL	3629.300	4586.500	4541.800
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	1846.500	2066.200	2271.500
(ii) Intangible Assets	3.000	0.000	0.000
(iii) Capital work-in-progress	13.800	17.300	17.100
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	0.000	0.000	0.000
(c) Deferred tax assets (net)	0.000	0.000	0.000
(d) Long-term Loan and Advances	29.200	27.700	27.900
(e) Other Non-current assets	0.000	0.000	0.000
Total Non-Current Assets	1892.500	2111.200	2316.500
(2) Current assets
(a) Current investments	0.000	0.000	0.000
(b) Inventories	794.600	1064.900	863.200
(c) Trade receivables	735.200	1126.700	1104.200
(d) Cash and cash equivalents	171.500	185.200	124.800
(e) Short-term loans and advances	31.400	90.100	128.000
(f) Other current assets	4.100	8.400	5.100
Total Current Assets	1736.800	2475.300	2225.300
TOTAL	3629.300	4586.500	4541.800

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2013	31.03.2012	31.03.2011
	SALES
		Revenue from Operations	3541.900	5848.700	5956.400
		Other Income	26.700	22.500	17.700
		TOTAL (A)	3568.600	5871.200	5974.100
Less	EXPENSES
		Cost of Materials Consumed	2134.000	3958.600	3869.900
		Changes in Inventories of Finished Goods & Work in Progress	207.200	(209.200)	43.000
		Employee Benefits Expenses	251.800	281.600	275.900
		Others Expenses	1200.900	1766.100	1767.200
		TOTAL (B)	3793.900	5797.100	5956.000
Less	PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		(225.300)	74.100	18.100
Less	FINANCIAL EXPENSES (D)		485.000	421.500	312.200
	PROFIT/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		(710.300)	(347.400)	(294.100)
Less/ Add	DEPRECIATION/ AMORTISATION (F)		222.700	222.700	231.300
	PROFIT/ (LOSS) BEFORE TAX (E-F) (G)		(933.000)	(570.100)	(525.400)
Less	TAX (H)		0.000	0.000	0.000
	PROFIT/ (LOSS) AFTER TAX (G-H) (I)		(933.000)	(570.100)	(525.400)
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		(1984.100)	(1414.000)	(888.600)
	BALANCE CARRIED TO THE B/S		(2917.100)	(1984.100)	(1414.000)
	EARNINGS IN FOREIGN CURRENCY
		FOB Value of Export	80.600	184.700	72.400
	TOTAL EARNINGS		80.600	184.700	72.400
	IMPORTS
		Raw Materials	355.400	626.000	182.000
		Stores & Spares	47.100	96.200	93.100
	TOTAL IMPORTS		402.500	722.200	275.100
	Earnings/ (Loss) Per Share (Rs.)		(8.65)	(5.26)	(4.85)

QUARTERLY RESULTS

PARTICULARS	30.06.2013
Type	1^st Quarter
Net Sales	1038.900
Total Expenditure	1051.600
PBIDT (Excl OI)	(12.700)
Other Income	3.700
Operating Profit	(9.000)
Interest	125.500
Exceptional Items	0.000
PBDT	(134.500)
Depreciation	55.600
Profit Before Tax	(190.100)
Tax	0.000
Provisions and contingencies	0.000
Profit After Tax	(190.100)
Extraordinary Items	0.000
Prior Period Expenses	0.000
Other Adjustments	0.000
Net Profit	(190.100)

KEY RATIOS

PARTICULARS		31.03.2013	31.03.2012	31.03.2011
PAT / Total Income	(%)	(26.14)	(9.71)	(8.79)
Net Profit Margin (PBT/Sales)	(%)	(26.34)	(9.75)	(8.82)
Return on Total Assets (PBT/Total Assets}	(%)	(25.81)	(12.48)	(11.61)
Return on Investment (ROI) (PBT/Networth)		1.32	0.43	0.69
Debt Equity Ratio (Total Debt/Networth)		(4.09)	(2.45)	(4.63)
Current Ratio (Current Asset/Current Liability)		0.64	0.65	0.85

LOCAL AGENCY FURTHER INFORMATION

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	No
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	Yes
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	No
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

Unsecured Loans	31.03.2013 (Rs. in Millions)	31.03.2012 (Rs. in Millions)
LONG TERM BORROWINGS
Sales Tax Deferred Loan	267.900	341.600
Other Loan	0.000	1408.500
SHORT TERM BORROWINGS
Buyers Credit Arrangement	183.200	173.000
Total	451.100	1923.100

Notes:

LONG TERM BORROWINGS

Sales Tax Deferred Loan was repayable from April 2012 in six equal yearly installments. The payment of the sales tax installment due of Rs.67.300 millions due has been stayed/kept in abeyance by the Board for Industrial and Financial Reconstruction (BIFR) as modifications in the scheme of rehabilitation proposed by the company are under consideration.

SHORT TERM BORROWINGS

Buyers Credit carry interest at LIBOR plus margin (60 bps to120 bps).

INDEX OF CHARGES:

S.No.	Charge ID	Date of Charge Creation/Modification	Charge amount secured	Charge Holder	Address	Service Request Number (SRN)
1	10419282	16/03/2013	1,150,000,000.00	IDBI TRUSTEESHIP SERVICES LIMITED	ASIAN BUILDING, GROUND FLOOR, 17, R. KAMANI MARG, BALLARD ESTATE, MUMBAI, MAHARASHTRA - 400001, INDIA	B73049314
2	10406620	28/01/2013	989,200,000.00	ANDHRA BANK	16-B, EARNEST HOUSE, NCPA MARG, NARIMAN POINT, MUMBAI, MAHARASHTRA - 400021, INDIA	B69035905
3	10399646	28/12/2012	294,200,000.00	LAKSHMI VILAS BANK LIMITED	BHARAT HOUSE, 104, B.S. MARG, FORT, MUMBAI, MAHARASHTRA - 400001, INDIA	B66374802
4	10380044	14/09/2012	100,000,000.00	CORPORATION BANK	104, BHARAT HOUSE, GROUND FLOOR, MUMBAI SAMACHAR MARG, FORT, MUMBAI, MAHARASHTRA - 400023, INDIA	B59499376
5	10369505	30/06/2012	1,352,100,000.00	BANK OF BARODA	CORPORATE FINANCIAL SERVICES BRANCH NO.3, WALCHAND HIRACHAND MARG, BALLARD PIER, MUMBAI, MAHARASHTRA - 400001, INDIA	B45289311
6	10309469	26/09/2011	100,000,000.00	VIJAYA BANK	MAKER CHAMBERS-IV REAR PORTION, 222, NARIMAN POINT, MUMBAI, MAHARASHTRA - 400021, INDIA	B22230403
7	10299798	16/03/2013 *	2,512,800,000.00	IDBI TRUSTEESHIP SERVICES LIMITED	ASIAN BLDG., GROUND FLOOR, 17, R. KAMANI MARG, BALLARD ESTATE,, MUMBAI, MAHARASHTRA - 400001, INDIA	B73055436
8	10287463	14/09/2012 *	419,800,000.00	CORPORATION BANK	104, BHARAT HOUSE, GROUND FLOOR, MUMBAI SAMACHAR MARG, FORT, MUMBAI, MAHARASHTRA - 400023, INDIA	B59499715
9	10281456	28/03/2011	37,500,000.00	LAKSHMI VILAS BANK LIMITED	FORT BRANCH:NO.64, DR. V.B. GANDHI MARG, KALAGHODA, FORT, MUMBAI, MAHARASHTRA - 400001, INDIA	B10858116
10	10228343	30/03/2013 *	5,012,800,000.00	IDBI TRUSTEESHIP SERVICES LIMITED	ASIAN BUILDING, GROUND FLOOR, 17, R. KAMANI MARG, BALLARD ESTATE, MUMBAI, MAHARASHTRA - 400001, INDIA	B73968489
11	10183268	09/07/2013 *	900,000,000.00	BANK OF BARODA	CORPORATE FINANCIAL SERVICES BRANCH NO.3, WALCHAND HIRACHAND MARG, BALLARD PIER, MUMBAI, MAHARASHTRA - 400001, INDIA	B83786053
12	10183294	18/09/2009	1,750,000,000.00	BANK OF BARODA	CORPORATE FINANCIAL SERVICES BRANCH NO.3, WALCHAND HIRACHAND MARG, BALLARD PIER, MUMBAI, MAHARASHTRA - 400001, INDIA	A72189806

* Date of charge modification

OPERATIONS

Performance of Alloy Steel and Seamless Tubes of the Company was as under:

Particulars	2012-13			2011-12
	Production (Tones)	Sales (in Qty.)	Gross Sales (Rs. in millions)	Production (Tones)	Sales (in Qty.)	Gross Sales (Rs. in millions)
Steel	54048	54521	2901.100	96649	95768	5333.400
Seamless Pipes	6445	6186	628.600	11543	11494	1082.400

Steel and pipe division have not operated on full capacity in view of lack of demand in view of recession in steel market. Automobile, construction, infrastructure sectors have not fared well during the year which resulted into poor demand for steel. Losses incurred by the Company have eroded working capital of the Company. Power cost has increased due to less heat order. Given the sluggish demand and high production cost, the pressure on the profitability is expected to continue.

The Company however is constantly trying to develop new grades, new customers and get their approvals for the products of the Company from reputed manufacturers.

MANAGEMENT AND DISCUSSION ANALYSIS

INDUSTRY STRUCTURE, SCENARIO AND DEVELOPMENT

Indian steel companies have been losing some of their sheen. Profits of many of these companies have either fallen or remained flat in the last 10 quarters

Steel industry growth is set to remain muted with subdued demand from consuming sectors such as infrastructure and realty.

Besides, constraints in sourcing iron ore and restriction on mining activities will pose a major challenge for the industry. Given the sluggish demand and high production cost, the pressure on the profitability of steel companies is expected to continue.

The main factors impacting growth in India are the inflationary pressure, the fiscal deficit, lower demand from consuming sectors such as automotive, construction, capital goods and consumer durables and the problem of capital inflow. Further, there are delays in obtaining clearances, especially environmental clearances, land acquisition, overdue reforms.

Iron ore mining restrictions, high prices and inferior quality of iron ore being auctioned have also adversely impacted the Karnataka-based sponge iron players.

Struggling economies put the brakes on infrastructure building in the world during the financial crisis. That slowdown is going to hurt steel sector.

Lower industrial production and reduced investment in large scale infrastructure projects have resulted in a marked decrease in the growth of steel demand from both the developed and emerging markets.

It is unlikely that steel demand will significantly improve in 2013, largely because of the continuing economic crisis in developed countries and the structural shift in the Chinese economy. Moderate recovery is only expected in 2014–15, although steel demand is likely to improve faster in emerging markets.

Global steelmaking capacity will continue to exceed demand growth in 2013 with excess capacity of 479 million tons forecast. As a result, capacity utilization is expected to remain below 80% in 2013 to limit the amount of excess supply in the market. Margins will continue to be tight into 2013 as steel prices will remain flat and costs are unlikely to decrease significantly in 2013. From 2014, the demand outlook will improve modestly resulting in modest increases in capacity utilization and steel prices.

Global steel prices are expected to remain flat in 2013 as supply continues to outstrip demand due to the failure of producers worldwide to shut down excess production capacity. China continues to struggle with overcapacity and sluggish demand. Reforms announced by the Government will provide a fillip to growth in the economy. Huge investments planned in infrastructure-Railways, Seaports, Airports, Highways, Bridges, etc. if made, will boost demand for steel. With the general expectation of modest growth globally and sustained raw material prices, steel prices are expected to be firm up and be stable in the year ahead.

The formation of the Cabinet Committee on Infrastructure for single window clearance for mega projects will generate activity in the power and road sectors which would push up steel demand.

In addition, lowering of interest rates by Reserve Bank of India will provide impetus to the manufacturing and consumer durables sectors.

The full impact of all these will be felt in 2013-14.

The United States’ economy showing signs of growth in the long-term augurs well for steel makers. This is because the US is the largest importer of steel. Industry watchers also expect a modest two-and-a-half per cent growth in Europe, against the backdrop of negative growth this year.

At the same time, demand for finished products such as cold rolled, galvanised and automotive steels is expected to go up.

After several months of range-bound movement, prices of steel products have started inching up gradually in the Indian markets, amid expectations of resurgence in construction demand after the winter season. The market is mirroring the global trend, where steel prices are continuously rising due to higher cost of production on an upsurge in input cost.

India is poised to become the world’s second largest steel producer. However, this is subject to companies finding the right technology to produce special categories of steel. Currently, with 74 million tones annual production in 2011, India is the fourth largest producer. Per capita steel consumption went up to 59 kg in 2011-12, from 34 kg in 2004-05. Per capita steel consumption in Rural India is very low – about 10 kgs and as such there is abundant scope for increase in demand. Monsoons have improved, augurs well for the economy.

DISCUSSION AND FINACIAL PERFORMANCE

REVENUE

Revenue from operation of the Company is of Rs.3568.600 millions during the year ended 31^st March 2013 as compared to Rs.5871.200 millions during the year 31^st March 2012.

EBDITA

Profits/(Losses) before depreciation and financial charges during the year ended 31^st March 2013 was of Rs.225.300 millions as compared to profits of Rs.74.100 millions for the year ended 31^st March 2012.

FIXED ASSETS:

Tangible Assets

· Leasehold Land

· Freehold Land

· Plant and Machinery

· Electrical Installation

· Buildings

· Office Equipments

· Furniture and Fixtures

· Vehicles

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.61.15
UK Pound	1	Rs.97.77
Euro	1	Rs.82.77

INFORMATION DETAILS

Information Gathered by :	NYA
Report Prepared by :	SMN

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	3
PAID-UP CAPITAL	1~10	2
OPERATING SCALE	1~10	1
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	2
--PROFITABILIRY	1~10	1
--LIQUIDITY	1~10	1
--LEVERAGE	1~10	1
--RESERVES	1~10	1
--CREDIT LINES	1~10	1
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTERS
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		13

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.