MIRA INFORM REPORT

Report Date :

21.03.2014

IDENTIFICATION DETAILS

Name :	MUKAND LIMITED
Registered Office :	Bajaj Bhawan, Jamnalal Bajaj Marg, 226, Nariman Point, Mumbai – 400021, Maharashtra
Country :	India
Financials (as on) :	31.03.2013
Date of Incorporation :	29.11.1937
Com. Reg. No.:	002726
Capital Investment / Paid-up Capital :	Rs. 787.404 Millions
CIN No.: [Company Identification No.]	L99999MH1937PLC002726
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Manufacturer and exporter of stainless steel, alloy steel, stainless steel billets, hot rolled.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

B (30)

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

Maximum Credit Limit :	USD 83290000
Status :	Moderate
Payment Behaviour :	Slow but correct
Litigation :	Exist
Comments :	Subject is an established company having moderate track record. The rating reflects moderate financial risk of profile marked by continuous losses that company has incurred from its operation and below average financial performance. However, trade relations are fair. Business is active. Payment 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 – December 1, 2013

Country Name	Previous Rating (30.09.2013)	Current Rating (01.12.2013)
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

State-run banks hired nearly 300000 personnel including more than 94000 officers in the last four years, according to the Indian Banks Association. A study by trade lobby Assocham in September 2013 indicated that banks would need 800000 people in the next six years. It estimated that state-run lenders alone would hire 50000 people in 2013/14.

The Competition Commission of India plans to issue final orders within a broad time-frame of one year in matters where it decides to carry out detailed investigations. The number of complaints received by the watchdog which keeps tabs on unfair trade practices in the marketplace.

The government has detected custom tax evasion totaling around Rs 37920 mn in 14 states until December. Maharashtra topped the list of Rs 14190 mn followed by Andhra Pradesh at Rs 8140 mn, Gujarat Rs 5240 mn, Karnataka Rs 1670 mn and Tamilnadu Rs 1610 mn.

Connaught Place in New Delhi slipped four notches to become the world’s eighth most expensive office locations. London’s West End is the world’s most expensive office market.

There are 4.072 mn number of high value spenders under the scanner of the income tax department. The income tax department has information that they have made cash deposits announcing to Rs 1 mn or more in their savings bank accounts in the current financial year. It plans to check potential evasion before the closing of the financial year on March 31.

Estimated pharmaceutical sales in the country for 2016 is $ 27 bn. It is 14.4 per cent higher than a year ago. The life sciences and health care industry is up against challenges such as quality management, says a recent Deloitte report.

The gross non-performing assets of listed banks rose 35.2 % to Rs 2.43 lakh crore during the first three months of the financial year. In absolute terms, the 40 listed banks added Rs 3386 crore to their gross NPAs in nine months with the State Bank of India leading with the State Bank of India leading with an accretion of Rs 16610 crore.

The inflow of smuggled gold doubled in 2013 following restrictions to curb the supply from official channels to contain the current account deficit. China surpassed India in the demand for gold for the first time in 2013 due to liberalization of gold trading norms by its local governments.

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 :	Bajaj Bhawan, Jamnalal Bajaj Marg, 226, Nariman Point, Mumbai – 400021, Maharashtra, India
Tel. No.:	22-61216666
Fax No.:	22-22021174
E-Mail :	kjmallya@mukand.com investors@mukand.com
Website :	www.mukand.com

DIRECTORS

As on 31.03.2013

Name :	Mr. Nirajkumar Ramkrishnaji Bajaj
Designation :	Managing Director
Address :	Mount Unique, 13th Floor, 62 Peddar Road, Mumbai – 400026, Maharashtra, India
Date Of Birth/Age :	10.10.1954
Date Of Appointment :	03.07.1989
DIN No. :	00028261
Name :	Mr. Rajesh Viren Shah
Designation :	Managing Director
Address :	7 Janaki Kutir, Juhu Tara Road, Juhu, Mumbai – 400049, Maharashtra, India
Date Of Birth/Age :	01.10.1951
Date Of Appointment :	03.07.1989
DIN No. :	00033371
Name :	Mr. Dhirajlal Shantilal Mehta
Designation :	Director
Address :	301/302 Goragandhi Apartments, 3 Laburnam Road, Gamdevi, Mumbai – 400007, Maharashtra, India
Date Of Birth/Age :	27.04.1936
Date Of Appointment :	22.07.1976
DIN No. :	00038366
Name :	Mr. Suketu Viren Shah
Designation :	Managing Director
Address :	A/52 Darshan Apartments, Mount Pleasant Road, Malabar Hill, Mumbai – 400006, Maharashtra, India
Date Of Birth/Age :	04.12.1954
Date Of Appointment :	03.07.1989
DIN No. :	00033407
Name :	Mr. Vinodchand Sakarchand Shah
Designation :	Director
Address :	11 Om Surya Vihar Co Op Housing Society Ltd, Road No 25 – B, Sion Matunga Scheme No 6, Mumbai – 400022, Maharashtra, India
Date Of Birth/Age :	07.11.1930
Date Of Appointment :	03.07.1989
DIN No. :	00033327

Name :	Mr. Narendrakumar Pannalal Jain
Designation :	Director
Address :	E-50, SAKET, Indore- 452001, Madhya Pradesh , India
Date Of Birth/Age :	21.12.1930
Date Of Appointment :	16.01.1990
DIN No. :	00460220
Name :	Mr. Narendra Jeewanlal Shah
Designation :	Director
Address :	43- B, Meher Apartments, Altamount Road, Mumbai – 400026, Maharashtra, India
Date Of Birth/Age :	17.11.1928
Date Of Appointment :	16.01.1990
DIN No. :	00047403
Name :	Mr. Naresh Chandra Sharma
Designation :	Director
Address :	Flat No 605 Dosti Blossoms, Dosti Acres Complex, Off S M Road Wadala East, Mumbai – 400037, Maharashtra, India
Date Of Birth/Age :	26.11.1942
Date Of Appointment :	29.05.2004
DIN No. :	00054922
Name :	Mr. Prakash Vasantlal Mehta
Designation :	Director
Address :	123 A Maker Tower, Cuffe Parade, Coloba, Mumbai – 400005, Maharashtra, India
Date Of Birth/Age :	12.02.1942
Date Of Appointment :	27.09.2007
DIN No. :	00001366
Name :	Mr. Pradip Panalal Shah
Designation :	Director
Address :	72A Embassy Apartments, 7th Floor Napean Sea Road Mumbai – 400006, Maharashtra, India
Date Of Birth/Age :	07.01.1953
Date Of Appointment :	27.09.2007
DIN No. :	00066242

Name :	Mr. Amit Yadav
Designation :	Director
Address :	D-3, Jeevan Jyot, Setalwad Lane, Napeansea Road, Mumbai – 400006, Maharashtra, India
Date of Birth/Age :	10.08.1954
Date of Appointment :	27.10.2010
DIN No. :	02768784

KEY EXECUTIVES

Name :	Jayavanth Kallianpur Mallya
Designation :	Secretary
Address :	Flat No 23, A-6/7 Happy Jeevan, Lic Colony Borivli (West), Mumbai – 400103, Maharashtra, India
Date of Birth/Age :	22.12.1956
Experience :	AAFPM5030K
Date of Appointment :	01.10.2006

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 31.12.2013

Category of Shareholder	Total No. of Shares	Total Shareholding as a % of Total No. of Shares
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	13119184	17.94
Bodies Corporate	26600258	36.38
Sub Total	39719442	54.33
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	39719442	54.33
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	6007	0.01
Financial Institutions / Banks	101439	0.14
Insurance Companies	7244583	9.91
Foreign Institutional Investors	908621	1.24
Sub Total	8260650	11.30
(2) Non-Institutions
Bodies Corporate	8839285	12.09
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 Million	9141399	12.50
Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	6399670	8.75
Any Others (Specify)	753683	1.03
Clearing Members	396376	0.54
Non Resident Indians	357307	0.49
Sub Total	25134037	34.38
Total Public shareholding (B)	33394687	45.67
Total (A)+(B)	73114129	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)	73114129	0.00

As on 13.08.2013

Equity Share Break up (Percentage of Total Equity)

Category	Percentage of Holding
Public financial companies	9.91
Nationalised or other banks	0.14
Foreign holdings( Foreign institutional investor(s), Foreign companie(s) Foreign financial institution(s), Non-resident Indian(s) or Overseas Corporate bodies or Others	1.73
Bodies corporate	51.26
Directors or relatives of Directors	15.76
Other top fifty shareholders	5.94
Other	15.26
Total	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer and exporter of stainless steel, alloy steel, stainless steel billets, hot rolled.
Brand Name :	Mukand Infinite Resolve

GENERAL INFORMATION

No. of Employees :

Information declined by the management.

Bankers :

• Export Import Bank Of India, 21 Floor, Centre One Building, World Trade Centre, Cuffe Parade, Mumbai - 400005, Maharashtra, India
• Central Bank Of India Corporate Finance Branch, Chander Mukhi Building, Ground Floor, Nariman Point,, Mumbai - 400021, Maharashtra, India
• Dena BankC-10, G-Block, Corporate Business Branch, Bandra Kurla Complex, Bandra (E), Mumbai - 400051,Maharashtra, India

Facilities :

SECURED LOANS	31.03.2013 (Rs. in Millions)	31.03.2012 (Rs. in Millions)
LONG TERM BORROWINGS
Non-convertible debentures banks	202.00	387.200
Rupee Term loans from banks	2489.800	4140.600
Rupee term loans from others	2366.400	1998.900
SHORT TERM BORROWINGS
Working capital loans from banks	6889.500	5909.800
Total	11947.700	12436.500

Note :

Long Term Borrowings

5,800,000, 10.50% (2006-15) Mortgage Debentures (balance outstanding as at 31.03.2013 Rs.408.200 Millions, Previous Year Rs.456.900 Millions), are secured by way of first pari-passu charge against mortgage/ hypothecation of Company’s freehold land, immovable and movable fixed assets both present and future of the Company at Kalwe and Dighe, Dist. Thane, in theState of Maharashtra and leasehold land, immovable andmovable fixed assets both present and future of the Company at Ginigera / Kankapura, Dist. Ginigera in the State of Karnataka and such mortgage and charge shall rank pari-passu with the existing mortgages and charges created in favour of financial institutions, banks and a company for their term loans except term loans at (ii) to (xiii) below. These debentures are alsosecured by way of a second and subservient pari-passu charge on stocks (excluding machinery spares) and book debts.

Term Loans from Banks, Financial

Institutions and a Company

The principal term debt is to be repaid in 144 monthly installments commencing from April 2006 and ending in March, 2018 with a pre-determined ballooning schedule. During April2009 CDR Cell approved deferment of principal amount due for payment aggregating the period of 18 months commencing from 1st April, 2009 and ending on 30th September, 2010. The total loan amount is now rescheduled to be paid during FY2010-11 to FY2014-15 in placeof the earlier schedule of payments by FY2017-18 without any increase in the rate of interest. Based on an assessment of its financial commitments and the estimated cash flows, the management is confident These are secured on pari-passu basis of meeting all its financial commitments in the foreseeable future. Against the same assets as given to Trustees for Debentures

Short Term Borrowings

Working Capital Facilities:

Working Capital Facilities from the Banks and other non-funded facilities are secured by hypothecation of stocks (excluding machinery spares) and book debts. The said facilities are also secured by way of second and subservient pari passu charge against the same assets as given to Trustees for Debentures

Banking Relations :
Financial Institutions :	Housing Development Finance Corporation Limited, Ramon House 169backbay Reclamation, H T Parekh Marg, Mumbai - 400020,Maharashtra, India
Auditors :
Name :	Haribhakti and Company Chartered Accountant
Address :	Mumbai, Maharashtra, India
PAN No.:	AAAFH2010F
Others :	· Mukand Engineers Limited CIN No.: L45200MH1987PLC042378 · Stainless India Limited CIN No.: U27107RJ1995PLC010920 · Hospet Steels Limited CIN No.: U85110KA1998PLC023759
Subsidiary Company :	· Mukand International FZE · Mukand Sumi Metal Processing Limited CIN No.: U27300MH2012PLC234000 · Bombay Forgings Limited CIN No.: U28910MH1966PLC013399 · Mukand Global Finance Limited CIN No.: U67120MH1979PLC021418

CAPITAL STRUCTURE

As on 13.08.2013

Authorised Capital :

No. of Shares	Type	Value	Amount
153000000	Equity Shares	Rs.10/- each	Rs.1530.000 Millions
7000000	Preference shares	Rs.10/- each	Rs.70.000 Millions
	Total		Rs.1600.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
73159805	Equity Shares	Rs.10/- each	Rs.731.598 Millions
5626320	Preference shares	Rs.10/- each	Rs.56.263 Millions
	Total		Rs.787.861 Millions

As On 31.03.2013

Authorised Capital :

No. of Shares	Type	Value	Amount
118000000	Equity Shares	Rs.10/- each	Rs.118.000 Millions
7000000	Preference shares	Rs.10/- each	Rs.70.000 Millions
	Total		Rs.125.000 Millions

Issued,:

No. of Shares	Type	Value	Amount
73159805	Equity Shares	Rs.10/- each	Rs.73.160 Millions
5626320	Preference shares	Rs.10/- each	Rs.5.630 Millions
	Total		Rs.78.790 Millions

Subscribed & Paid-up Capital

No. of Shares	Type	Value	Amount
73114129	Equity Shares	Rs.10/- each	Rs.73.110 Millions
563000	Preference shares	Rs.10/- each	Rs.5.630 Millions
	Add: Forfeited shares		Rs.0.010 Millions
	Total		Rs.78.750 Millions

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	787.500	787.500	787.500
(b) Reserves & Surplus	20,032.700	20,470.800	21449.700
(c) Money received against share warrants	0.000	0.000	0.000
(2) Share Application money pending allotment	0.000	0.000	0.000
Total Shareholders’ Funds (1) + (2)	20,820.200	21,258.300	22237.200
(3) Non-Current Liabilities
(a) long-term borrowings	8,567.200	7,741.900	8900.900
(b) Deferred tax liabilities (Net)	0.000	0.000	146.500
(c) Other long term liabilities	120.300	121.900	44.900
(d) long-term provisions	300.500	284.900	242.100
Total Non-current Liabilities (3)	8,988.000	8,148.700	9334.400
(4) Current Liabilities
(a) Short term borrowings	8,846.100	8,405.500	5769.900
(b) Trade payables	6,558.500	7,327.200	6253.100
(c) Other current liabilities	6,393.100	4,387.700	4070.100
(d) Short-term provisions	29.100	45.300	163.500
Total Current Liabilities (4)	21,826.800	20,165.700	16256.600
TOTAL	51,635.000	49,572.700	47828.200
II.          ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	24,071.500	23,896.500	24317.100
(ii) Intangible Assets	3.800	4.700	4.800
(iii) Capital work-in-progress	1,461.000	1,042.200	236.500
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	2,278.100	1,096.700	1096.700
(c) Deferred tax assets (net)	82.400	0.000	0.000
(d) Long-term Loan and Advances	1,124.900	1,228.800	926.800
(e) Other Non-current assets	482.800	482.800	482.800
Total Non-Current Assets	29,504.500	27,751.700	27064.700
(2) Current assets
(a) Current investments	0.000	0.000	0.000
(b) Inventories	10,346.400	9,963.100	9251.600
(c) Trade receivables	9,352.600	8,769.800	8703.500
(d) Cash and cash equivalents	748.000	786.900	1043.800
(e) Short-term loans and advances	1,664.200	2,271.800	1735.200
(f) Other current assets	19.300	29.400	29.400
Total Current Assets	22,130.500	21,821.000	20763.500
TOTAL	51,635.000	49,572.700	47828.200

PROFIT & LOSS ACCOUNT

	PARTICULARS	31.03.2013	31.03.2012	31.03.2011
	SALES
	Income	21,262.400	25,659.600	25,486.500
	Other Income	890.000	807.800	1,096.100
	TOTAL	22,152.400	26,467.400	26,582.600
Less	EXPENSES
	Cost of Materials Consumed	11,212.400	13,517.000	13,791.400
	Purchases of Stock-in-Trade	0.000	0.000	0.000
	Changes in inventories of finished goods, work-in-progress and Stock-in-Trade	(611.300)	(197.700)	(1,694.200)
	Employees benefits expense	1,365.300	1,318.500	1,254.700
	Other expenses	8,169.700	9,728.600	9,721.400
	TOTAL	20,136.100	24,366.400	23,073.300
Less	PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION	2,016.300	2,101.000	3,509.300
Less	FINANCIAL EXPENSES	2,935.100	2,527.600	2,218.400
	PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION	(918.800)	(426.600)	1,290.900
Less/ Add	DEPRECIATION/ AMORTISATION	641.500	657.200	678.100
	PROFIT / (LOSS) BEFORE TAX, EXTRA ORDINARY ITEMS	(1,560.300)	(1,083.800)	612.800
Less/ Add	EXTRA ORDINARY ITEMS	(1,083.300)	0.000	0.000
	PROFIT/ (LOSS) BEFORE TAX	(477.000)	(1,083.800)	612.800
Less	TAX	(82.400)	(148.800)	146.200
	PROFIT/ (LOSS) AFTER TAX	(394.600)	(935.000)	466.600
	EARNINGS IN FOREIGN CURRENCY
	F.O.B. Value of Exports	1,518.300	2,169.500	1,535.400
	Freight	2.700	2.300	11.400
	Insurance	6.900	4.700	20.100
	TOTAL EARNINGS	1,527.900	2,176.500	1,566.900
	IMPORTS
	Raw Materials	2,960.400	3,834.500	4,684.100
	Components and Stores parts	391.800	615.900	601.200
	Capital Goods	251.700	424.500	15.900
	TOTAL IMPORTS	3,603.900	4,874.900	5,301.200
	Earnings / (Loss) Per Share (Rs.)	(5.400)	(12.790)	6.380

KEY RATIOS

PARTICULARS		31.03.2013	31.03.2012	31.03.2011
PAT / Total Income	(%)	(1.78)	(3.53)	1.76
Net Profit Margin (PBT/Sales)	(%)	(2.24)	(4.09)	2.40
Return on Total Assets (PBT/Total Assets}	(%)	(0.98)	(2.28)	0.01
Return on Investment (ROI) (PBT/Networth)		(0.02)	(0.05)	0.03
Debt Equity Ratio (Total Liability/Networth)		0.84	0.76	0.66
Current Ratio (Current Asset/Current Liability)		1.01	1.08	1.28

FINANCIAL ANALYSIS

[all figures are in Rupees Millions]

DEBT EQUITY RATIO

Particular	31.03.2011	31.03.2012	31.03.2013
	(INR in Mlns.)	(INR in Mlns.)	(INR in Mlns.)
Share Capital	787.500	787.500	787.500
Reserves & Surplus	21,449.700	20,470.800	20,032.700
Net worth	22,237.200	21,258.300	20,820.200
long-term borrowings	8,900.900	7,741.900	8,567.200
Short term borrowings	5,769.900	8,405.500	8,846.100
Total borrowings	14,670.800	16,147.400	17,413.300
Debt/Equity ratio	0.660	0.760	0.836

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.03.2011	31.03.2012	31.03.2013
	(INR in Mlns)	(INR in Mlns)	(INR in Mlns)
Sales	25,486.500	25,659.600	21,262.400
		0.679	(17.137)

NET PROFIT MARGIN

Net Profit Margin	31.03.2011	31.03.2012	31.03.2013
	(INR in Mlns)	(INR in Mlns)	(INR in Mlns)
Sales	25,486.500	25,659.600	21,262.400
Profit After tax	466.600	(935.000)	(394.600)
	1.83%	(3.64%)	(1.86%)

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	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

LITIGATION DETAILS
Bench:- Bombay
Lodging No:-	NMSL/714/2013	Failing Date:-	26.03.2013		Reg. No.:-	NMS/605/2013	Reg. Date:-	04.04.2013
		Main Matter
Lodging No:-	SL/605/2010		Reg. No.:-		S/516/2010
Petitioner:-	MUMBAI INTERNATIONAL AIRPORT PRIVATE LIMITED		Respondent:-		MUKAND LIMITED
District:-	MUMBAI
Bench:-	SINGLE		Category:-	NOTICE OF MOTION
Status:-	Pre-Admission		Stage:-		NOTICE OF MOTION FOR HEARING [ORIGINAL SIDE MATTERS]
Last Date:-	23.10.2013
Last Coram:-	HON’BLE SHRI JUSTICE R.D. DHANUKA
Act:-	Code of Civil Procedure 1908

PARTICULAR	31.03.2013 (Rs. in Millions)	31.03.2012 (Rs. in Millions)
LONG TERM BORROWINGS
Deferred Sales Tax Loan	13.900	18.600
Deposits from others	1025.600	1196.600
Intercorporate borrowings	2469.500	0.000
SHORT TERM BORROWINGS
Intercorporate borrowings	1956.600	2495.700
Total	5465.600	3710.900

General :

The year that is past will be remembered for the economic and political turmoil that engulfed most parts of the world. It will be remembered as a year that witnessed the economic decline of Europe and America and sluggish performance by the BRICnations which fell short of all optimistic predictions.1.02 In India, rising fiscal deficits, adverse trade balance and continued inflation resulted in high interest rates and weakening of the Rupee. Uncertain political environment resulting in policy and regulatory delays in implementing reforms slowed down economic growth. The industrial growth was at 0.9% during April-February 2013, even lower than 3.3% recorded during April-February 2008-09 (the year of financial crisis). In FY 13 manufacturing grew at 1%, mining industry recorded a fall of 2.6% while the auto industry grew only by 3%.1.03 In such an environment, the Company too witnessed a slowdown with its turnover and other income dropping to Rs.2,348 crore in the year as against Rs.2,8000.000 Millions in the previous year.

Specialty Steel Division:

The Company is predominantly engaged in the business of special and alloy steel and stainless steel long products that feed into the auto components, engineering, defence and fasteners industries. The fortunes of this business are closely linked with the availability and price of raw-material, growth of the user industries and overall growth of the economy.

The utilization of steelmaking capacity at Steel Plant at Ginigera continued to remain low for the year underreport due to the paucity of iron ore supplies and steep increase in iron ore prices resulting from continued partial ban on mining operations and transportation of iron ore in theState of Karnataka by the Hun’ble Supreme Court since July-August 2011. The resulting loss of production contributed mainly to the losses incurred during the year.

Iron Ore:

As per the Order by the Hon’ble Supreme Court in July-August 2011, a total of 166 iron ore mines were closed. After exhaustive investigations under the aegis of the Committee appointed by the Hon’ble Supreme Court, the Court permitted-opening of only 18 Category A mines on 3 rd September 2012 subject to the conditions laid down by the Court. By end of March 2013, only 9 mines resumed mining operations of which one mine had to be closed down. There was thus only a marginal improvement in the availability of iron ore during the year

At the beginning of Financial Year 2012-13, it was expected that the balance Category A and Category B mines would reopen by first half of 2012. Unfortunately, this did not happen and it was only in April 2013 that the Hon’ble Supreme Court permitted re-opening of balance Category A and Category B mines subject to specified conditions. The Court also simultaneously directed termination of mining leases of 49Category C mines. The opening of balance Category A and Category B mines will be a gradual process as each of the mines has to obtain various approvals and implement Reclamation & Rehabilitation Plan as approved by the competent authority.

The Hon’ble Supreme Court’s Order referred to above also lifted the ban on allocation of new mining leases by Government of Karnataka coupled with termination of leases for the 49 Category C mines. These iron ore mines will now be available for new allotment to the Steel Plants and is expected to help them get mining leases for captive requirements.

With limited availability of high grade iron ore in the Supreme Court mandated e-auctions, the price of iron ore continued to remain high and the quality of available iron ore was also poor. The situation for the Company was even more challenging as it can only use iron ore lumps which were in short supply and prices of which too were much higher than iron ore fines. The Company’s need to reduce its dependence on iron ore lumps fructified in the second half of the year under report with the commissioning of the Sinter Plant which uses iron ore fines. Thus the company’s input cost of iron ore used for making steel will be lower during the year in progress.

Input Prices:

On account of recessionary conditions and slump in the industrial activity in Europe and lackluster growth in the United States of America, the commodity prices in general were subdued, crude oil prices moved down, coking coal prices softened, prices of nickel, scrap and other imported input commodities also declined. However, due to depreciation of Indian Rupee during the year, the benefits on account of reduced prices have partially been negated. In India, however, the prices of Ferro-chrome high carbon, one of the major inputs for making alloy and stainless steel production went up by about 11% during the year due to power cuts in the States of Orissa and Andhra Pradesh, where the manufacturing facilities of this input are located.

Steel industry in India is largely dependent on imports of key inputs like coking coal, metallurgical coke,scrap, nickel and molybdenum.The prices of these inputs continue to remain volatile on the basis of global demand and supply factors and also,the highly volatile Rupee-Dollarexchange rate.

Cost Reduction:

These market influencers however did not deter the motivation and determination of your company to work towards a better tomorrow. Several steps were taken to reduce costs by substituting some of the inputs and changing some of the processes while maintaining the superior quality standards of the end products.

The Company expects a 10% reduction in production costs from July 2013 onwards by implementing several cost reduction projects such as installing of Sinter Plant, Host Blast Stoves and a Pulverized Coal Injection System to reduce the cost of the two most critical inputs, viz., iron ore and coke. The Sinter Plant was commissioned in December 2012, the Hot Blast Stoves is expected to be commissioned by May 2013 and a Pulverized Coal Injection System by June 2013. The Sinter Plant will help the Company use iron ore fines which are available in larger quantities and are cheaper compared to iron ore lumps. Hot Blast Stoves will reduce the consumption of Coke and Pulverized Coal Injection System will replace metallurgical coke by coal which is cheaper. These facilities will increase the productivity and also reduce operating costs. The Company also started replacing costly fuel oil by using off-gases from the Blast Furnaces in the re-heating furnace and other applications. Two Bell Furnaces are expected to be commissioned during the year in progress to cater to the increased demand of annealed steel products. The total capital expenditure in the above projects is expected to be approximately Rs.2000.000 Millions. The Company has tied up long term funds to finance the same.

At the Steel Plant at Dighe, Thane, the company adopted duplex process instead of triplex process for making stainless steel thereby further reducing costs. Further, the Company developed processes to bypass annealing process for steel used in fastener steel and eliminate pickling of wire rod coils before annealing. All these will reduce costs and improve competitiveness and margins.

Industrial Machinery division:

The division saw a decline in the turnover for the year under report. Several major projects, particularly in the steel sector, did not pick-up momentum during the year and also some customers delayed their committed delivery schedule requirements. Expected capital investments in the ferrous and non-ferrous sector were deferred, resulting in lower order booking for the division. At the end of the year, the division has orders aggregating to Rs.3860.000 Millions to be executed over FY 2013-14 and FY 2014-15.

Lower demand is likely to adversely affect the margins of the division. However the division initiated a number of cost reduction measures including design changes so as to reduce input and operating costs. A 10% reduction in the costs has already been achieved during the year underreport through improved design and better sourcing. These efforts will rigorously continue during the year in progress.

Infrastructure work on the land acquired at Sinnar for expansion of the Industrial Machinery division is in progress and production is expected to commence in a phased manner during the year in progress.

Internal Control Systems:

Adequate systems for internal controls provide assurances on the efficiency of operations, security of assets, statutory compliances, appropriate authorization, reporting and recording of transactions. The management audit prepares regular reports on the systems and procedures. The scope of the audit activity is broadly guided by the annual audit plan approved by the Audit Committee of Directors. Audit reports are regularly reviewed by the top management and corrective measures are taken.

Human Resource Management Initiatives & Industrial Relations:

Company has 1,970 permanent employees on its rolls as on March 31, 2013. Industrial Relations remained cordial during the year and there has been active cooperation from employees in the Company’s efforts to improve efficiency in all areas of its Operations.

Company recognizes and values employee development and team efforts. It focuses on building the capabilities of its workforce by investing and covering every spectrum of individual growth and development, across all levels. It constantly works for improving and integrating its safety, health and environmental practices. It also conducts various sports and games activities for its employees who participates in tournaments at district and other levels. Incentives and rewards are given to motivate the employees and achieve targets. The Company places on record appreciation of the dedication and commitment of its employees at all levels and looks forward to their continued support in the future.

Finance:

Interest expenses have increased as the Company had to borrow additional funds for meeting its operational needs incurred during the year. The rate of interest too went up during the year.

(7) Awards:

(a) Company has for the second time, received SKFs Supplier Excellence Award 2012 for the quality of the wires and wire rods for tapered roller bearings. The earlier award was received in 2009. Bajaj Auto Ltd. awarded the Company its Quality Silver Award for the year 2012. Somic SF Components Ltd. too gave an award for quality and delivery.

(b) Company’s Steel Plant at Ginigera, Karnataka received safety awards instituted by the Government of Karnataka. These include first prize for Best Worker in Large Scale Industry, category for adopting Best Safe Practices in the year 2012.

(8) Corporate Social Responsibility (CSR):

Gross Sales, Services and Other Income:

1. The gross sales from the operations and other income for the year under review was at Rs.2, 3480.000 Millions as against Rs. 28000.000 Millions in the previous year.

2. Revenues from exports went down at Rs.1518.300 Millions during the year under review as against Rs.2169.500 Millions in the previous year.

3. Loss for the year is reduced to Rs.394.600 Millions as against loss of Rs.935.000 Millions in the previous year.

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.61.52
UK Pound	1	Rs.102.22
Euro	1	Rs.85.23

INFORMATION DETAILS

Report Prepared by :

SNT

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	3
OPERATING SCALE	1~10	4
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	4
--PROFITABILIRY	1~10	-
--LIQUIDITY	1~10	4
--LEVERAGE	1~10	4
--RESERVES	1~10	4
--CREDIT LINES	1~10	3
--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	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		30

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

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.