MIRA INFORM REPORT

Report Date :

13.09.2014

IDENTIFICATION DETAILS

Name :	BHUSHAN STEEL LIMITED (w.e.f. 2007)
Formerly Known As :	BHUSHAN STEEL AND STRIPS LIMITED
Registered Office :	Bhushan Centre, Ground Floor, Hyatt Regency Complex, Bhikaji Cama Place, New Delhi - 110066
Country :	India
Financials (as on) :	31.03.2014
Date of Incorporation :	07.01.1983
Com. Reg. No.:	55-014942
Capital Investment / Paid-up Capital :	Rs.1490.300 Millions
CIN No.: [Company Identification No.]	L74899DL1983PLC014942
TAN No.: [Tax Deduction & Collection Account No.]	DELB07323B
PAN No.: [Permanent Account No.]	AAACB1247M
Legal Form :	A Public Limited Liability Company. The Company’s Shares are listed on the Stock Exchanges.
Line of Business :	Manufacturer and Distributor of Cold Rolled Steel Strips/Sheets/Coils and Galvanized Cold Rolled Steel Strips/Sheets/Coils.
No. of Employees :	10000 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

B (33)

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

Status :	Moderate
Payment Behaviour :	Slow but correct
Litigation :	Exist
Comments :	Subject is one of the well-established leading player in the steel industry having moderate track. The management has seen a deterioration in the company’s credit profile characterized by decline in its net profitability and further aggravated by slower than expected ramping up of operations of Orissa phase II expansion project. Moreover, the management has reported a loss from its operations during the October – December quarter as a result of the working capital intensive operations along with the large debt funded project expansion due to which the management has seen an increase in its external borrowings during the year under review, which has further weakened the liquidity position. The ratings also take into consideration, the company’s vice chairman and managing director Mr. Neeraj Singhal, has been named in a bribery case registered by central bureau of Investigation (CBI) in relation with extension of credit facilities by syndicate bank of the company. Business is active. Payment terms are reported as slow but correct. In view of experience of the promoters and the company’s established track in the industry the subject can be considered for business dealings with slight 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 1, 2014

Country Name	Previous Rating (31.03.2014)	Current Rating (01.06.2014)
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

N E W S

As per the latest IMF study, the total weigh of emerging markets in the GDP of the world on a purchasing power parity basis has seen a sizeable shift. It highlights how as against 51 % in 2005, the emerging economies now account for close to 56 % of the global purchasing power GDP as per the latest survey. And with the emerging economies growing at a faster rate than their developed counterparts, there are every possibility that the their share goes up further in the coming years.  China may surpass the US over the next few years.

Politics and economics are very intricately connected. They tend to influence each other in ways that could be very complex and far-reaching. The prospects of the India’s economy have been seriously compromised due to political corruption. High inflation, poor standard of living are to a great extent a result of rampant corruption in the country. China on the other hand, seems to be facing diametrically opposite challenge. American hedge fund manager Jim Chanos has been keenly following the political and economic development in the dragon economy and has figured out something that is quite worrying. He is of the view that the Chinese economy could be heading toward trouble on account of new Chinese President Xi Jingping’s very aggressive anti-corruption drive. Chanos believes tat many things such as apartment sales, luxury products, etc. were largely bought with dirty money. And it is now beginning to impact consumption. This may indeed be bad news for an economy that is struggling to transition from an investment-driven export-oriented economy to a domestic consumption-driven economy.

A study published by Firstpost has revealed that asset classes like real estate and equities were the biggest beneficiaries of the liberalization policies.  A firm called Ciane Analytics studied returns from assets including equities, gold, fixed deposits, G-Secs and real estate since 1991. Real estate outperformed every other asset classes during the 23-year period with an annualized return of 20 % ! Equities came in second with annualized return of 15.5 % ! However, while these returns may seem mouthwatering, the fact is that the return from equities adjusted for inflation came down to just 7.1 %.

Some brief news are as under

. R-Power to buy Jaypee’s hydro assets

. Investors await justice in NSEL case

. India seeks MFN status from Pakistan ahead of meeting

. Ukrain’s clashes with rebels hinder MH17 crash investigation

. India exploring merger of state-owned hydro PSUs

..Higher costs weigh down profit growth to slowest in 9 quarters

..Wal-Mart to expand wholesale business in India

. GMR group moves to strengthen balance sheet

. Central Bank to sell 4 % stake to Life Insurance Corporation

. Tata Chemicals plans to raise up to Rs 10000 mn.

EXTERNAL AGENCY RATING

Rating Agency Name	CARE
Rating	Long term bank facilities: BB
Rating Explanation	Moderate risk of default regarding timely servicing of financial obligations.
Date	August 06, 2014

Rating Agency Name	CARE
Rating	Short term bank facilities: A4
Rating Explanation	Minimal degree of safety and very high credit risk.
Date	August 06, 2014

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 31-03-2014.

INFORMATION DENIED

Management Non Co-operative (91-11-26462373)

LOCATIONS

Registered/ Corporate Office 1 :	Bhushan Centre, Ground Floor, Hyatt Regency Complex, Bhikaji Cama Place, New Delhi - 110066, India
Tel. No.:	91-11-26462373 (5 Lines) / 42297777 / 42295555 / 39194000
Fax No.:	91-11-26478750 / 26415845
E-Mail :	bssledl@nde.vsnl.net.in davraop@bhushan-group.org onlinefilling@gmail.com
Website :	http://www.bhushansteel.com
Factory 1 and Marketing Office – Sahibabad :	23, Site IV, Sahibabad Industrial Area, Sahibabad, District Ghaziabad – 201 010, Uttar Pradesh, India
Tel. No.:	91-120-2770601- 04/ 3028000-09
Fax No.:	91-120-2770509/ 4100574
E-Mail :	bsslsahibabad@bhushansteel.com
Corporate Office 2 :	F Block, 1st Floor, International Trade Tower, Nehru Place, New Delhi – 110019, India
Factory 2 :	28/4, Site IV, Sahibabad Industrial Area, Sahibabad, District Ghaziabad – 201 010, Uttar Pradesh, India
Factory 3 :	Village Nifran, Savroli and Dehvali, Taluka – Khalapura, (Near Khopoli), District Raigad – 410 203, Maharashtra, India
Tel. No.:	91-2192-274146/ 302000
Fax No.:	91-2192-274294/ 274354
E-Mail :	bsslkhapoli@bhushansteel.com
Factory 4 :	Narendra Pur, P O Shibapur, Village Meramandali, District – Dhenkanal – 759 121, Orissa, India
Tel. No. :	91-6764-300000/ 326443/ 325133/ 325857
E-mail :	bssldhenkanal@bhushansteel.com
Branches :	Located at: · Agra · Ahmedabad · Aurangabad · Bengaluru · Bhubaneshwar · Chandigarh · Chennai · Coimbatore · Dehradun · Delhi · Faridabad · Gurgaon · Guwahati · Haldwani · Hyderabad · Hosur · Indore · Jaipur · Jammu · Kullu · Kolkata · Kanpur · Ludhiana · Mandigovindgarh · Mumbai · Pilkhuwa (Hapur) · Pune · Parwanoo · Rishikesh · Varanasi

DIRECTORS

As on 31.03.2013

Name :	Mr. Brij Bhushan Singal
Designation :	Chairman
Address:	W-29, Greater Kailash, Part-II, New Delhi-110046, India
Date of Birth/ Age:	20.11.1936
Date of Appointment:	15.01.1987
Name :	Mr. Neeraj Singal
Designation :	Vice Chairman and Managing Director
Address:	W-29, Greater Kailash, Part-II, New Delhi-110046, India
Date of Birth/ Age:	23.04.1968
Qualification:	Graduate
Date of Appointment:	01.04.1992
Name :	Mr. Nittin Johari
Designation :	Whole-time Director [Finance]
Qualification:	M.Com, FCA
Date of Appointment:	06.01.1995
Name :	Mr. Rahul Sen Gupta
Designation :	Whole-time Director [Technical]
Name :	Mr. P.K. Aggarwal
Designation :	Whole time Director [Commercial]
Name :	Mr. Mohan Lal
Designation :	Director
Address:	19-A, Udham Singh Nagar, Ludhiana, India
Name :	Mr. B B Tondon
Designation :	Director
Name :	Mr. V.K. Mehrotra
Designation :	Director
Name :	Mr. M. V. Surya Narayana
Designation :	Director
Address:	12-2-417/A/11, Gudimalkapur, Jaya Nagar, Hydedrabad - 500028, Andhra Pradesh, India
Date of Birth/ Age:	05.04.1946
Date of Appointment:	25.09.2010
Name :	Mrs. Sunita Sharma
Designation :	Nominee Director of LIC

KEY EXECUTIVES

Name :	Mr. O. P. Davra
Designation :	Company Secretary
Name :	Ms. Neha
Designation :	Reception

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.06.2014

Category of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	129061685	56.98
Bodies Corporate	32431540	14.32
Sub Total	161493225	71.29
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	161493225	71.29
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	42399	0.02
Financial Institutions / Banks	29430	0.01
Insurance Companies	8647389	3.82
Foreign Institutional Investors	4211252	1.86
Sub Total	12930470	5.71
(2) Non-Institutions
Bodies Corporate	43067031	19.01
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 Million	3045260	1.34
Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	5714783	2.52
Any Others (Specify)	263977	0.12
Non Resident Indians	123568	0.05
Clearing Members	140409	0.06
Sub Total	52091051	23.00
Total Public shareholding (B)	65021521	28.71
Total (A)+(B)	226514746	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued
(1) Promoter and Promoter Group	0	0.00
(2) Public	0	0.00
Sub Total	0	0.00
Total (A)+(B)+(C)	226514746	0.00

BUSINESS DETAILS

Line of Business :

Manufacturer and Distributor of Cold Rolled Steel Strips/Sheets/Coils and Galvanized Cold Rolled Steel Strips/Sheets/Coils.

Products :

Item Code No. (ITC Code)	Product Description
721041	Corrugated coated with Zinc Cold Rolled Products of Iron or Non Alloy Steel of a width of 600 MM or more
721049	Flat Coated with Zinc Cold Products of Iron or Non Alloy Steel of a width of 600 MM or more
720918	Flat Cold Rolled Products of Iron or Non Alloy Steel of a width of 600 MM or more of a thickness of less than 0.5 MM

· Cold Rolled

Galvanised

Bhushan Galume

Colour Coated Coil

Colour Coated Tiles

Drawn Tubes of OEM Grade

Hardened and Tempered Strip

High Tensile Steel Stripping

Wire Rods and Alloy Billets

Sponge Iron

GENERAL INFORMATION

Customers

Wholesalers

Alstom

BHEL

Bajaj

Bundy

Ashok Leyand

Ford

Honda

Hitachi

Hyundai

IFB

Mahindra

GM

SKF

Kone

Carrier

Yamaha

No. of Employees :

10,000 (Approximately)

Bankers :

· State Bank of India

· Punjab National Bank

Facilities :

Secured Loan

31.03.2014

(Rs. in Millions)

31.03.2013

(Rs. in Millions)

LONG TERM BORROWINGS

Non-Convertible Debentures

NA

20050.000

Term Loan

NA

1. From Banks

NA

Foreign Currency

NA

77341.981

Rupee Loans

NA

128800.833

2. From Financial Institutions

Rupee Loans

NA

600.000

3. Vehicle Loan From Bank

NA

1.116

SHORT TERM BORROWINGS

Working Capital Loans

From Banks

Cash Credit

NA

7585.466

Foreign Currency Loans

NA

31165.303

Term Loan

From Banks

Rupee Loans

NA

3999.978

Foreign Currency Loans

NA

1487.968

Total

NA

271032.645

NOTE: (As on 31.03.2013)

LONG TERM BORROWINGS

12% Redeemable Non-Convertible 5000 Debentures of Rs.1.000 Millions each outstanding on 31st March, 2013 Rs.5000.000 Millions). Out of these 4750 Debentures are redeemable at the end of 4th,5th and 6th year in installments 35%,35% and 30% respectively commencing from the end of 4th year from the date of allotment i.e 31st August, 2012 and are Secured by first charge on pari passu basis on the fixed assets of the Company. Besides 250 Debentures are redeemable at par in one bullet payment at the end of 7th year from the date of allotment i.e 31st August, 2012 and are Secured by first charge on pari passu basis on the fixed assets of the Company.

12% Redeemable Non-Convertible 100 Debentures of Rs.10.000 Millions each outstanding on 31st March, 2013 Rs.1000.000 Millions (subordinate debt) are redeemable at par in one bullet payment at the end of 10 years and 1 Month from the date of allotment i.e 31st March, 2008 and are secured by subsequent and subservient charge by way of hypothecation on the present and future assets of the Company so as to maintain minimum asset coverage of 1.25 times, throughout the currency of the Debentures. Debentures are further secured by pledge of Equity Shares of Bhushan Steel Limited, having market value not less than 1.5 times of loans, held by promoters/promoter entities, and Personal Guarantee of Shri B.B. Singal and Shri Neeraj Singal.

11.50% Redeemable Non-Convertible 3500 Debentures of no Millions each outstanding on 31st March, 2013 Rs.3500.000 Millions are redeemable in three equal annual installments commencing from the end of 5th year from the date of allotment i.e 4th January, 2013 and are Secured by first charge on pari passu basis on the fixed assets of the Company.

12% Redeemable Non-Convertible 1050 Debentures of Rs.1.000 Millions each outstanding on 31st March, 2013 Rs.1050.000 Millions are redeemable in three equal annual installments commencing from the end of 4th year from the date of allotment i.e 28th March, 2013 and are Secured by first charge on pari passu basis on the fixed assets of the Company.

11.75% Redeemable Non-Convertible 3000 Debentures of Rs.1.000 Millions each outstanding on 31st March, 2013 Rs.3000.000 Millions are redeemable in three equal annual installments commencing from the end of 5th year from the deemed date of allotment i.e 2nd February, 2012 and are Secured by first charge on pari passu basis on the fixed assets of the Company.

10.50% Redeemable Non-Convertible 3000 Debentures of Rs.1.000 Millions each outstanding on 31st March, 2013 Rs.3000.000 Millions. Debentures are redeemable at par in three equal annual installments commencing from the end of 6th year from the date of allotment i.e 13th August, 2010 and are Secured by first charge on pari passu basis on the fixed assets of the Company.

10.90% Redeemable Non-Convertible 1750 Debentures of Rs.1.000 Millions each outstanding on 31st March, 2013 Rs.1750.000 Millions are redeemable at par in four equal annual installments commencing from the end of 5th year from the deemed date of allotment i.e 26th August, 2010 and are Secured by first charge on pari passu basis on the fixed assets of the Company.

10.20% Redeemable Non-Convertible 1000 Debentures of Rs.1.000 Millions each outstanding on 31st March, 2013 Rs.1000.000 Millions are redeemable at par in one bullet payment at the end of 7th year from the date of allotment i.e 26th March, 2007 and are Secured by first charge on pari passu basis on the fixed assets of the Company.

11.50% Redeemable Non-Convertible 1500 Debentures of Rs.1.000 Millions each outstanding on 31st March, 2013 Rs.750.000 Millions are redeemable in next year and are secured by subsequent and subservient charge on the movable fixed assets of the Company.

8.15% Redeemable Non-Convertible 60 Debentures of Rs.10.000 Millions each outstanding on 31st March, 2013 Rs. are redeemable at par in three equal annual installments commencing from 4th year from the date of disbursement i.e 24th April, 2006 Rs.10.000 Millions per debenture have been redeemed and are Secured by first charge on pari passu basis on the fixed assets of the Company.

Secured by first mortgage charge on all of the company's immovable and movable properties both present and future including movable machinery, spares, tools and accessories (excluding specific charge created in favour of ECA Lenders), ranking pari passu inter-se, with the trustee of Debenture holders subject to prior charges created in favour of banks on stocks, book debts etc. for securing borrowing for working capital requirement, except Rs.4965.800 Millions secured by subsequent and subservient charge on movable assets. Out of the above, the ECA Loans of Rs.26112.400 Millions financed by ECA Lenders are secured by first exclusive charge on the assets financed and personal guarantee of two promoter directors. Out of these, Loans of Rs.75836.700 Millions are guaranteed by the Personal Guarantee of two promoter directors and Loans of Rs.1505.300 Millions are guaranteed by the Personal Guarantee of One Promoter Director.

Secured by first mortgage charge on all of the company's immovable and movable properties both present and future including movable machinery, spares, tools and accessories (excluding specific charge created in favour of ECA Lenders) ranking pari passu inter-se, with the trustee of Debenture holders subject to prior charges created in favour of banks on stocks, book debts etc. for securing borrowing for working capital requirement, except Rs.3699.600 Millions secured by subsequent and subservient charge on movable assets. Loans of Rs.78687.900 Millions are guaranteed by the Personal Guarantee of two promoter directors and Loans of Rs.50113.000 Millions are guaranteed by the Personal Guarantee of One Promoter Director.

Secured by first mortgage charge on all of the company's immovable and movable properties both present and future including movable machinery, spares, tools and accessories (excluding specific charge created in favour of ECA Lenders) ranking pari passu inter-se, with the trustee of Debenture holders subject to prior charges created in favour of banks on stocks, book debts etc. for securing borrowing for working capital requirement. Out of these Loans of Rs. NIL are guaranteed by the Personal Guarantee of Two Promoter Directors and Loans of Rs.600.000 Millions are guaranteed by the Personal Guarantee of One Promoter Director

Secured by the hypothecation of specific assets.

Guaranteed by the Personal Guarantee of One Promoter Director.

Out of these Loans of Rs.3148.700 Millions are guaranteed by the Personal Guarantee of Two Promoter Directors and Loans of Rs.1086.000 Millions are guaranteed by the Personal Guarantee of One Promoter Director).

Detail of Repayment and Rate of Interest

Maturity Profile of Long Term Borrowing (Other than NCDs) are set out as below:

(Rs. In Millions)

	1 year	2-3 Years	Beyond 3 years
Term Loans	16263.100	39800.000	156792.200

Domestic Loans sanctioned by SBI Syndication for Phase I and II of Orissa project was sanctioned at rate of interest of SBI Base Rate+2% (presently 11.70% p.a.) and repayable in 24 quarterly installments commencing from 24 Months after completion of the project as per terms stipulated in respective loan / facility agreement/s.

Foreign Currency Loans for Phase I and II of Orissa project was sanctioned at interest rate of EURIBOR + 0.45% (Presently 0.806% p.a.) repayable in 20 Half Yearly Installments commencing from six Months after completion ofthe project as per terms stipulated in respective loan / facility agreement/s.

Domestic Loans sanctioned by SBI Syndication for Phase III of Orissa project was sanctioned at rate of interest of SBI Base Rate+2.50% (presently 12.20% p.a.) and repayable in 17 quarterly installments commencing from 18 months after completion of the project as per terms stipulated in respective loan / facility agreement/s.

Foreign Currency Loans for Phase III of Orissa project was sanctioned at interest rate of EURIBOR+1.50% (Presently 1.711% p.a.) repayable in 20 half yearly installments commencing from 6 Months after completion of the project as per terms stipulated in respective loan / facility agreement/s.

Another Foreign Currency Loan sanctioned for Phase III of the Orissa Project at interest rate of USD LIBOR+3.95% (Presently 4.491% p.a.) repayable in 6 annual installments commencing from 36 Months after completion of the project as per terms stipulated in respective loan / facility agreement/s.

Another Foreign Currency Loan sanctioned for Phase III of the Orissa Project at interest rate of EURIBOR+1.75% (Presently 1.999% p.a.) repayable in 18 half yearly installments commencing from three Months after completion of the project as per terms stipulated in respective loan / facility agreement/s.

Domestic Loans sanctioned for Coke Oven 2 of Orissa project was sanctioned at rate of interest which is linked with base rate of respective participating lenders and repayable in 24 quarterly installments commencing from 15 Months after completion of the project as per terms stipulated in respective loan / facility agreement/s.

Foreign Currency Loans for Coke Oven 2 of Orissa Project was sanctioned at interest rate of USD LIBOR + 4.50% (Presently 5.1429% p.a.) repayable in 12 half yearly installments commencing from 15 Months after completion of the project as per terms stipulated in respective loan / facility agreement/s.

Other Foreign Currency Loan for Orissa Project was sanctioned at rate of interest of USD LIBOR+3.50% (Presently 3.9459% p.a.) repayable in three annual installments commencing from 48 Months after completion of the project as per terms stipulated in respective loan / facility agreement/s.

Domestic Loans sanctioned for CRCA and CRNGO Project of Orissa project was sanctioned at rate of interest of Base Rate+2.25% (Presently 12.25% p.a.) and repayable in 24 quarterly installments commencing from 12 Months after completion of the project as per terms stipulated in respective loan / facility agreement/s.

Rate of interests of other Term Loans / Foreign Currency Loans are linked with the Base Rate / LIBOR.

SHORT TERM BORROWINGS

Cash Credit

Working Capital Loans are secured by hypothecation of stock and book debts, second charge on company's land, building and other immovable properties ranking pari passu inter-se and personal guarantee of two promoter directors.

Secured by Subsequent and subservient charge on movable assets of the company. Out of these Loans of Rs.1500.000 Millions (Previous Year Rs.4000.000 Millions) were guaranteed by the personal guarantee of two promoter directors and Loans of Rs.2500.000 Millions (previous year Rs.7500.000 Millions) are guaranteed by the personal guarantee of one promoter director.

Secured by Subsequent and subservient charge on movable assets of the company. Out of these Loans of Rs.999.000 Millions (Previous Year Rs. NIL) were guaranteed by the personal guarantee of two promoter directors and Loans of Rs.489.000 Millions (previous year Rs. NIL) are guaranteed by the personal guarantee of one promoter director.

Including Commercial Papers Rs.6300.000 Millions (Previous Year Rs.6850.000 Millions) personally guaranteed by two promoter directors. Apart from these Loans of Rs. NIL (Previous Year Rs.1500.000 Millions) are guaranteed by the personal guarantee of two promoter directors and Loans of Rs.503.200 Millions (Previous Year Rs.3329.400 Millions) were personally guaranteed by one promoter director.

Banking Relations :
Auditors :
Name :	Mehra Goel and Company Chartered Accountants
Joint Venture:	· Andal East Coal Company Private Limited
Associates :	· Angul Sukinda Railway Limited Bhusahan Energy Limited
Subsidiary companies:	· Bhushan Steel (Orissa) Limited. · Bhushan Steel Madhya Bharat Limited · Bhushan Steel (South) Limited · Bhushan Steel Bengal Limited · Parakeet Finvest Private Limited (from 25th January, 2012) · Marsh Capital Services Private Limited (from 25th January, 2012) · Paragon Securities Private Limited (from 25th January, 2012) · Perpetual Securities Private Limited (from 25th January, 2012) · Jawahar Credit and Holdings Private Limited (from 29th February, 2012) · Bhushan Capital and Credit Services Private Limited. (from 29th February, 2012) · Bhushan Steel Global FZE (Upto 7th May, 2011) · Bhushan Steel (Australia) PTY Limited - Bowen Energy Limited, Australia - Kondor Holdings PTY Limited - Bowen Coal PTY Limited - Bowen Consolidated PTY Limited · Capricorn Metals Ltd. (Deregistered w.e.f. 4th April, 2011) · Capricorn Resources (Australia) Limited (Deregistered w.e.f. 4th April, 2011) · Golden Country Resources (Australia) PTY Limited
Enterprises over which Key Management Personnel and their relatives are able to exercise significant influence:	· Arshiya International Limited · Bhushan Aviation Limited · Bhushan Infrastructure Private Limited
Sister Concern	· Bhushan Steel (Orissa) · Bhushan Steel (South)

CAPITAL STRUCTURE

As ON 31.03.2014

Authorised Capital : Not Available

Issued, Subscribed & Paid-up Capital : Rs.1490.300 Millions

As on 31.03.2013

Authorised Capital :

No. of Shares	Type	Value	Amount
400000000	Equity Shares	Rs.2/- each	Rs.800.000 Millions
14500000	Preference Shares	Rs.100/- each	Rs.1450.000Millions
	Total		Rs. 2250.000 Millions

Issued Capital :

No. of Shares	Type	Value	Amount
230605220	Equity Shares	Rs. 2/- each	Rs.461.210 Millions
9405367	10% Redeemable Cumulative Preference Shares	Rs. 100/- each	Rs. 940.537 Millions
354000	4% Non-convertible Cumulative Redeemable Preference Shares	Rs. 100/- each	Rs. 35.400 Millions
400000	25% Non-convertible Cumulative Redeemable Preference Shares	Rs. 100/- each	Rs.40.000 Millions
	Total		Rs.1477.147 Millions

Subscribed and Paid-up Capital :

No. of Shares	Type	Value	Amount
212358310	Equity Shares	Rs. 2/- each	Rs.424.717 Millions
14157220	Equity Shares	Rs. 1/- each	Rs.14.157 Millions
9405367	10% Redeemable Cumulative Preference Shares	Rs. 100/- each	Rs. 940.537 Millions
354000	4% Non convertible Cumulative Redeemable Preference Shares	Rs. 100/- each	Rs. 35.400 Millions
400000	25% Non convertible Cumulative Redeemable Preference Shares	Rs. 100/- each	Rs.40.000 Millions
	Total		Rs. 1454.811 Millions

NOTE:

Detail of Shareholders holding more than 5% shares:

Name of Shareholders	As at 31st March,2013
	No. of Shares	% Held
(A) Equity Shareholders
1. Brij Bhushan Singal	45628672	20.14%
2. Neeraj Singal	73105933	32.27%
3. Bhushan Infrastructure Private Limited	29486540	13.01%
(B) Preference Shareholders
1. Bhushan Energy Limited	1200000	11.81%
2. Bhushan Finance Limited	840000	8.27%
3. Robust Transportation Limited	531567	5.23%
4. Shri Neeraj Singal	1204400	11.86%
5. Brij Bhushan Singal	707100	6.96%

Particulars	As at 31st March,2013
	No. of Shares	Amount (Rs. In Millions
Reconciliation of number of shares outstanding is set out
below:
(A) Equity Shares
At the beginning of the year	212358310	424.717
Add : Shares Issued	14157220	14.157
Less: Shares Cancelled	--	--
At the end of the year	226515530	438.874
(B) Preference Shares (Non Convertible Cumulative Redeemable Preference Shares)
10% Preference Shares
At the beginning of the year	7795267	779.527
Add : Shares Issued	1610100	161.010
Less: Shares Redeemed	--	--
At the end of the year	9405367	940.537
4% Preference Shares
At the beginning of the year	399000	39.900
Add : Shares Issued	--	--
Less: Shares Redeemed	45000	4.500
At the end of the year	354000	35.400
25% Preference Shares
At the beginning of the year	400000	40.000
Add : Shares Issued	--	--
Less: Shares Redeemed	--	--
At the end of the year	400000	40.000

The holders of Equity Shares has one vote for each equity shares held by them. The registerd holders of Equity Shares are entitled to dividend declared from time to time. The Preference Shareholders are entitled to pro-rata dividend in preference over Equity Shareholders. The dividend is cumulative at the rate specified against each category.

The premium on redemption of preference shares to the extent of premium received on issue will be adjusted against the security premium account and any premium paid over the above said amount shall be paid out of current appropriation / General Reserve.

The Preference Share are not convertible in Equity and are redeemable at the option of the company.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2014	31.03.2013	31.03.2012
I.              EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	1490.300	1454.811	1284.144
(b) Reserves & Surplus	90041.000	89026.194	72679.500
(c) Money received against share warrants	0.000	0.000	0.000
(2) Share Application money pending allotment	0.000	0.000	3830.100
Total Shareholders’ Funds (1) + (2)	91531.300	90481.005	77793.744
(3) Non-Current Liabilities
(a) long-term borrowings	255661.000	216642.128	155287.802
(b) Deferred tax liabilities (Net)	13751.900	13427.818	10388.183
(c) Other long term liabilities	21616.300	21794.561	15058.998
(d) long-term provisions	0.000	0.000	0.000
Total Non-current Liabilities (3)	291029.200	251864.507	180734.983
(4) Current Liabilities
(a) Short term borrowings	62730.700	52328.639	42877.823
(b) Trade payables	23508.700	16170.235	9931.250
(c) Other current liabilities	41379.900	21011.854	22622.509
(d) Short-term provisions	427.600	759.843	548.366
Total Current Liabilities (4)	128046.900	90270.571	75979.948
TOTAL	510607.400	432616.083	334508.675
II.          ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	381905.200	181415.523	157327.164
(ii) Intangible Assets	0.000	11.584	11.801
(iii) Capital work-in-progress	0.000	125953.132	90686.743
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	6232.400	4024.554	3047.026
(c) Deferred tax assets (net)	0.000	0.000	0.000
(d) Long-term Loan and Advances	17939.400	24959.380	28260.352
(e) Other Non-current assets	0.000	214.014	193.754
Total Non-Current Assets	406077.000	336578.187	279526.840
(2) Current assets
(a) Current investments	0.000	247.500	247.500
(b) Inventories	64802.500	55596.755	33114.261
(c) Trade receivables	24644.500	23430.872	12203.763
(d) Cash and cash equivalents	829.600	1536.256	3349.803
(e) Short-term loans and advances	14244.200	15226.513	6066.508
(f) Other current assets	9.600	0.000	0.000
Total Current Assets	104530.400	96037.896	54981.835
TOTAL	510607.400	432616.083	334508.675

PROFIT & LOSS ACCOUNT

	PARTICULARS	31.03.2014	31.03.2013	31.03.2012
	SALES
	Income	96758.300	107442.697	99414.077
	Other Income	291.100	173.359	273.442
	TOTAL (A)	97049.400	107616.056	99687.519
Less	EXPENSES
	Cost of Materials Consumed	51893.900	57986.415	55067.473
	Purchases of Stock-in-Trade	390.500	811.855	0.000
	Changes in inventories of finished goods, work-in-progress and Stock-in-Trade	(213.800)	(1058.367)	(653.307)
	Employees benefits expense	1885.300	1734.541	1439.797
	Other expenses	15867.600	14818.588	13519.329
	TOTAL (B)	69823.500	74293.032	69373.292
Less	PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (C)	27225.900	33323.024	30314.227
Less	FINANCIAL EXPENSES (D)	16633.000	12874.431	10462.673
	PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)	10592.900	20448.593	19851.554
Less	DEPRECIATION/ AMORTISATION (F)	9639.600	8308.619	6199.295
	PROFIT/ (LOSS) BEFORE TAX (E-F) (G)	953.300	12139.974	13652.259
Less	TAX (I)	333.700	3051.071	3417.51
	PROFIT/ (LOSS) AFTER TAX (G-I) (J)	619.600	9088.903	10234.749
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD	217.632	89.309	37.769
Less	APPROPRIATIONS
	Proposed Dividend on Equity Shares		113.258	106.179
	Proposed Dividend on Preference Shares		1.148	0.407
	Provision for Dividend Tax		19.443	17.291
	Interim Dividend on Preference Shares	NA	89.547	75.050
	Dividend Tax on Interim Dividend		14.527	12.193
	Transferred to Debenture Redemption Reserve		2696.250	847.500
	Release from Debenture Redemption Reserve		0.000	0.000
	Transfer to General Reserve		6000.000	9000.000
	Premium paid on Redemption of Preference Shares		26.407	124.589
	Balance Carried to the B/S (J+K+L-M)	NA	217.632	89.309
	EARNINGS IN FOREIGN CURRENCY
	FOB Value of Export		18128.945	14553.645
	Interest Received		1.862	14.816
	TOTAL EARNINGS	NA	18130.807	14568.461
	IMPORTS
	Raw Materials		16794.751	14937.369
	Stores & Spares		1219.888	599.81
	Capital Goods		12426.676	19137.965
	TOTAL IMPORTS	NA	30441.315	34675.144
	Earnings / (Loss) Per Share (Rs.)	2.23	41.61	47.78

KEY RATIOS

PARTICULARS		31.03.2014	31.03.2013	31.03.2012
PAT / Total Income	(%)	0.64	8.45	10.27
Net Profit Margin (PBT/Sales)	(%)	0.99	11.30	13.73
Return on Total Assets (PBT/Total Assets}	(%)	0.19	4.01	5.67
Return on Investment (ROI) (PBT/Networth)		0.01	0.13	0.18
Debt Equity Ratio (Total Debt /Networth)		3.48	2.97	2.55
Current Ratio (Current Asset/Current Liability)		0.82	1.06	0.72

FINANCIAL ANALYSIS

[all figures are in Rupees Millions]

DEBT EQUITY RATIO

Particular	31.03.2012	31.03.2013	31.03.2014
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Share Capital	1284.144	1454.811	1490.300
Reserves & Surplus	72679.500	89026.194	90041.000
Share Application money pending allotment	3830.100	0.000	0.000
Net worth	77793.744	90481.005	91531.300
long-term borrowings	155287.802	216642.128	255661.000
Short term borrowings	42877.823	52328.639	62730.700
Total borrowings	198165.625	268970.767	318391.700
Debt/Equity ratio	2.547	2.973	3.479

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.03.2012	31.03.2013	31.03.2014
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Sales	99414.077	107442.697	96758.300
		8.076	(9.944)

NET PROFIT MARGIN

Net Profit Margin	31.03.2012	31.03.2013	31.03.2014
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Sales	99414.077	107442.697	96758.300
Profit	10234.749	9088.903	619.600
	10.30%	8.46%	0.64%

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

LITIGATION DETAILS

IN THE HIGH COURT OF DELHI AT NEW DELHI

CS(OS) 2484/2013 and I.A.20169/2013 and I.A.7791/2014

METSO MINERALS (SINAGAPORE) PTE LIMITED..... Plaintiff

Through: Mr. Gaurav Bhardwaj, Advocate

Versus

BHUSHAN STEEL LIMITED.... Defendant

Through: Mr. Tanuj Khurana and Mr. J. Madan, Adv

CORAM:

HON'BLE MR. JUSTICE G.S.SISTANI

O R D E R

30.05.2014

I.A. 10468/2014

This is an application filed by the defendant seeking extension of time in filing the written statement. It is not understandable as to why the Joint Registrar has listed this matter on the last working day before the court.

Notice. Counsel for the plaintiff / non-applicant wishes to file a reply. Let the reply be filed within two weeks from the date of re-opening of the Court after Summer Vacation.

List on 4.8.2014, before Joint Registrar, the date already fixed.

CHARGES

ENTITY	PERSON	COMPETENT AUTHORITY	REGULATORY CHARGES	REGULATORY ACTION(S) / DATE OF ORDER	FURTHER DEVELOPMENTS
BHUSHAN STEEL LIMITED		SEBI	DID NOT MAKE PUBLIC ANNOUNCEMENT AS REQUIRED UNDER REGULATION 10 OF SEBI TAKEOVER CODE, 1997 IN MATTER OF ACQUISITION OF SHARES OF ORISSA SPONGE IRON And STEEL LIMITED	IMPOSED PENALTY RS.0.450, Millions ALONG WITH OTHER ENTITIES/PERSONS 18-JAN-2010	SAT: APPEAL ALLOWED AND IMPUGNED ORDER DATED 18/01/2010 SET ASIDE WITH NO ORDER AS TO COSTS SAT: APPEAL FAILED AND IMPUGNED ORDER DATED 18/01/2010 SET ASIDE WITH NO ORDER AS TO COSTS

NOTE: Registered office of the company has been shifted from F Block, 1^st Floor, International Trade Tower, Nehru Place, New Delhi – 110019, India, to the present

UNSECURED LOAN

PARTICULARS	31.03.2014 (Rs. In Millions)	31.03.2013 (Rs. In Millions)
LONG TERM BORROWINGS
Term Loan
Foreign Currency Loans
From Indian Banks		1791.900
From Foreign Banks		4234.735
From Others		84.711
Less: current maturity of Long Term Borrowing		(16263.148)
SHORT TERM BORROWINGS
From Bank
Rupee Loan
Term Loan / Commercial Paper		6803.175
Foreign Currency Loans
From Indian Banks		1286.749
Total	NA	(2061.878)

EXPANSION PROJECT:

The company is under implementation of 0.35 MTPA capacity Colled Rolling cum Electrical Steel (CRNGO) Complex at estimated project cost of Rs.15630.000 Millions at Meramandali, Orissa.

In addition to the above, the company shall also be completing the Coke oven plant (1.3 MTPA), Coal Washery (2.5 MTPA) and 2 DRI Kilns (aggregate capacity of 0.34 MTPA) and 197 MW Power Plant at the existing site of Integrated steel plant at Orissa in the current financial year i.e. 2013-14.

In order to maintain its leadership position in downstream segment of steel industry and to maximize the margins, the company is setting up the downstream capacity of 1.8 MTPA, where the company shall come up with PLTCM of 1.8 MTPA and CAL of 1 MTPA with the estimated capex of Rs.59950.000 Millions at Meramandali, Orissa to fully utilize its additional HR capacity. With this the company's total downstream production capacity shall be increased to about 4 MTPA by FY 2017.

FINANCE:

During the year the Company has tied up the term loans in foreign currency and rupee for its expansion plans and for the requirement of funds for its normal capital expenditure. The Company has tied up Rupee Term Loan of f 10420.000 Millions from Axis Bank as Syndication lead bank for their CRNGO project at Orissa.

The Working Capital facilities for Sahibabad, Khopoli and Orissa Plants have been appraised by PNB, the lead Bank, for Rs.113900.000 Millions (Fund Based limit of Rs.53900.000 Millions and Non Fund Based limit of Rs.60000.000 Millions) for the Financial year 2013-14.

CREDIT RATING:

The Long Term rating of The Company is Care A+ by Credit Analysis and Research Limited as per the provisions of BASEL II guidelines of RBI.

The Credit Analysis and Research Limited (CARE) has rated the short term rating at the highest rating of A1+ (A One Plus) for short term credit facilities of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS

INDUSTRY STRUCTURE AND DEVELOPMENTS

The steel industry is divided into primary and secondary sectors. The primary sector products are billets, pallets, rounds and Hot Rolled Coils/Plates (HRC/HRP).These form raw material for the secondary sector ,which produces value added items such as Angles, Channels, wire Rods, Cold Rolled Coils/sheets (CRC/CRS) AND Galvanised Coils/Sheets. CR Sheet is a thinner sheet used for consumer durables like refrigerators, washing machines, automobiles, bicycles, etc. CR sheets are used by the automobile and domestic appliances industry whereas CR strips are used in manufacturing of bicycles, drums, barrels, fabrication, furniture etc. CR Coils are mainly used for manufacturing GP/GC sheets. Bhushan Steel Limited which so far falls under secondary sector, also entered in primary sector with setting up plant at Orissa.

PERFORMANCE

The company is engaged in Steel business, which is context of Accounting Standard (AS)-17 issued by the institute of Chartered Accountants of India is considered the only business segment. The overall operational performance of the company has been much satisfactory during the year. The plants have operated optimally during the year and there were no major break downs or shutdowns.

INDEX OF CHARGES

S.No.	Charge Id	Date Of Charge Creation/Modification	Charge Amount Secured	Charge Holder	Address	Service Request Number (Srn)
1	10474663	03/01/2014	6,000,000,000.00	PUNJAB NATIONAL BANK	LARGE CORPORATE BRANCH, TOLSTOY HOUSE, TOLSTOY MARG, NEW DELHI, DELHI - 110001, INDIA	B95112041
2	10469506	26/12/2013	1,000,000,000.00	STATE BANK OF HYDERABAD	CORE-6, SCOPE COMPLEX, LODHI ROAD, NEW DELHI, DELHI - 110003, INDIA	B93258226
3	10469498	20/12/2013	500,000,000.00	THE JAMMU AND KASHMIR BANK LIMITED	G-40,, CONNAUGHT PLACE, NEW DELHI, DELHI - 110001, INDIA	B93256618
4	10464778	05/12/2013	500,000,000.00	THE FEDERAL BANK LIMITED	CORPORATE BANKING BRANCH, E-13-29, HARSHA BHAWAN, CONNAUGHT PLACE,, NEW DELHI, DELHI - 110001, INDIA	B91376855
5	10462754	25/11/2013	2,000,000,000.00	ORIENTAL BANK OF COMMERCE	INDUSTRIAL FINANCE BRANCH, A-30-33, 1ST FLOOR, CO NNAUGHT PLACE, NEW DELHI, DELHI - 110001, INDIA	B90570789
6	10467526	29/01/2014 *	10,000,000,000.00	STATE BANK OF INDIA	CORP. ACCOUNTS GROUP BRANCH, JAWAHAR VYAPAR BHAWAN , 11-12 TH FLOOR, 1, TOLSTOY MARG, NEW DELHI, DEL HI - 110001, INDIA	B96143771
7	10467359	28/11/2013 *	2,000,000,000.00	AXIS TRUSTEE SERVICES LIMITED	AXIS HOUSE, 2ND FLR, BOMBAY DYEING MILLS COMPOUND, ANDURANG BUDHKAR MARG, WORLI,, MUMBAI, MAHARAS HTRA - 400025, INDIA	B93080273
8	10454137	26/09/2013	200,000,000.00	JSC VTB BANK	THE TAJ MAHAL HOTEL, THE LOBBY MEZZANINE FLOOR, NO. 1 MANSING ROAD, NEW DELHI, DELHI - 110011, INDIA	B87137758
9	10452147	26/09/2013	1,500,000,000.00	STATE BANK OF MYSORE	CORPORATE ACCOUNTS BRANCH, NO. 3,4 AND 5 DDA BUILDINGS, NEHRU PLACE, NEW DELHI, DELHI - 110019, INDIA	B86269347
10	10449904	21/09/2013	3,000,000,000.00	ALLAHABAD BANK	INDUSTRIAL FINANCE BRANCH, 17, PARLIAMENT STREET, NEW DELHI, DELHI - 110001, INDIA	B85338705

* Date of charge modification

STATEMENT OF UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED 30.06.2014

(Rs. In Millions)

Sr. No.	Particular	Quarter Ended
		30.06.2014
		(Unaudited)
1.	Income from operations
	Domestic Sales	25375.700
	Export Sales	4078.200
	Total Gross Sales of Finished Goods	29453.900
	Less : Excise Duty	2741.100
(a)	Net Sales/Income from Operations	26712.800
	Other operating income	1390.600
	Less : Excise Duty	86.600
	Net Other Operating Income	1304.000
	Net Sales / Total Income from Operations	28016.800
2.	Expenditure
	Cost of materials consumed	14108.700
	Purchase of stock in trade	-
	Changes in inventories of finished goods, work in progress and stock in trade	1222.300
	Employee benefits expenses	548.600
	Depreciation and amortization expenses	3065.200
	Other expenses	4983.800
	Total Expenses	23928.600
3.	Profit/ (Loss) from Operations before Other Income, Interest and Exceptional Items (1-2)	4088.200
4.	Other Income	20.400
5.	Profit/ (Loss) from ordinary activities before finance costs and Exceptional Items (3+4)	4108.600
6.	Finance Cost (net)	5524.900
7.	Profit/ (Loss) from ordinary activities after finance costs and but before Exceptional Items (5-6)	(1416.300)
8.	Exceptional Items	-
9.	Profit/ (Loss) from ordinary activities before tax (7+8)	(1416.300)
10.	Tax Expense	-
11.	Profit/ (Loss) from ordinary activities after tax (9-10)	(1416.300)
12.	Extraordinary Items (net of tax expenses)
13	Net Profit/ (Loss) for the period (11-12)	(1416.300)
14.	Paid-up Equity Share Capital (Face Value per share Re.10)	453.000
16i.	Earnings Per Share – (Before Extraordinary Items)
	Basic	(6.37)
	Diluted	(6.37)
A	PARTICULARS OF SHAREHOLDING
1.	Public Shareholding
	-Number of Shares	65021521
	- Percentage of Shareholding	28.71%
2.	Promoters and Promoter Group Shareholding
	a) Pledged/Encumbered
	- Number of Shares	119851863
	- Percentage of Shares (as a % of the Total Shareholding of promoter and promoter group)	74.21%
	- Percentage of Shares (as a % of the Total Share Capital of the Company)	52.91%
	b) Non Encumbered
	- Number of Shares	41641362
	- Percentage of Shares (as a % of the Total Shareholding of Promoter and Promoter Group)	25.79%
	- Percentage of Shares (as a % of the Total Share Capital of the Company)	18.38%

Particulars
Pending at the beginning of the quarter	Nil
Received during the quarter	Nil
Disposed of during the quarter	Nil
Remaining unresolved at the end of the quarter	Nil

Notes:

1. The above results have been reviewed by Audit committee and approved by the Board of Directors at New Delhi on August 12, 2014.

2. During the current quarter the Company has made allotment and redemption of 2085000 and 736751 Redeemable Cumulative Preference Shares respectively.

3. The limited review for the quarter ended on June 30, 2014 as required under clause 41 of the listing agreement with the stock exchanges has been carried out by the Statutory Auditors.

4. The Company is engaged in the steel business, which in the context of Accounting Standard (AS) -17, is considered the only business segment.

5. Depreciation has been provided on the basis of the existing policy of the Company being followed up to March 31, 2014 as prescribed under Schedule XIV to the Companies Act, 1956. However as required under Schedule II and other applicable provisions of Companies Act, 2013, the Company is in the process of identification of various components of all plants and machinaries of the Company and determination of their useful life. Keeping in view the quantum of Company’s business activities, the proposed activity may take considerable time for implementation, therefore, the impact of same if any, will be reflected in financials of the Company for the year ended March 31, 2015.

6. Figures of the quarter ended March 31, 2014 are the balancing figures between audited figures in respect of full financial year and the published year to date figures upto the third quarter of the financial year ended March 31, 2014.

7. Previous period / year figures have been regrouped / rearranged to make them comparable with current period / year.

Fixed Assets

v Tangible Assets

Freehold Land

Leasehold Land / Building

Plant and Machinery

Railway Siding

Furniture and Fixtures

Vehicles

Office Equipment

v Intangible Assets

Computer Software

PRESS RELEASES

BHUSHAN STEEL SLIPS 5% ON RATING DOWNGRADE; DOWN 60% SINCE AUGUST

NEW DELHI: Bhushan Steel Limited BSE -4.97 % slipped as much as 4.98 per cent in trade on Monday and was locked in lower circuit after rating agency CARE downgraded it six notches in two months and Brickwork Ratings scaled it down 16 notches in five months.

Delhi-based steelmaker Bhushan Steel, is having a hard time convincing its lenders that it can pay off its Rs 400000.000-Millions debt after its managing director and promoter Neeraj Singhal was arrested in a bribery case last week, which hit yet another 52-week low of Rs 152.50 in trade today.

At 09:40 a.m.; Bhushan SteelBSE -4.97 % was locked in lower circuit at Rs 152.50, down 4.98 per cent lower. The stock has plunged nearly 60 per cent since August and nearly 70 per cent so far in the year 2014.

The steel maker which enjoyed stellar ratings from both its credit rating agencies till almost the beginning of the year before it was subjected to a cataclysmic downgrade that caught the lenders unawares, ET reported.

Banks and investors rely on ratings provided by agencies such as CARE and Brickwork to assess the safety of their investments and loans.

CARE downgraded Bhushan Steel's 'A+' rating on its long-term bank debt to 'A' in January and then directly to 'BB' in March. CARE also rates its non-convertible debentures (NCD) and working capital loans, added the report.

An A+ rating meant Bhushan Steel loan was deemed to be at low risk of defaulting.

Another agency Brickwork, which rates the company's Rs 5000.000 Millions NCD issue, downgraded the company 16 notches to C in February from A+ in September, 2013.

Bhushan Steel's debt is four times its gross sales reported in 2013-14 and 11 times its current market value. CARE had said it derived confidence from Bhushan Steel's promoters even though it remained cautious on its debt-laden balance sheet that was funding expansion, added the ET report.

BHUSHAN STEEL SLUMPS TO 52-WEEK LOW

August 7, 2014

Bhushan Steel was locked in 20% lower circuit at Rs 243.70 at 14:41 IST on BSE, with the stock extending recent fall.

Meanwhile, the BSE Sensex was up 102.09 points, or 0.4%, to 25,767.36

On BSE, so far 45,963 shares were traded in the counter with pending sell orders of 6.32 lakh shares at lower circuit. The stock has an average daily volume of 60,145 shares in the past one quarter.

The stock opened with a downward gap, declining by the maximum 20% daily circuit and remained locked at the 20% level at Rs 243.70 so far during the day, which is also 52-week low for the counter. The stock had hit a 52-week high of Rs 504 on 11 November 2013.

The stock had underperformed the market over the past one month till 6 August 2014, falling 24.29% compared with 1.14% fall in the Sensex. The scrip had also underperformed the market in past one quarter, sliding 31.96% as against Sensex's 14.03% rise.

The mid-cap company has an equity capital of Rs 453.000 Millions. Face value per share is Rs 2.

Shares of Bhushan Steel had dropped 4.23% to Rs 378.15 on Monday, 4 August 2014, after the Central Bureau of Investigation (CBI) on Saturday, 2 August 2014, arrested the now-suspended Chairman-cum-Managing Director of Syndicate Bank SK Jain after he had allegedly demanded a bribe of Rs 5.000 Million from Bhushan Steel to not convert the company's outstanding loan into a Non Performing Asset (NPA). As per reports, Bhushan Steel had taken a loan of Rs 100 Millions from Syndicate Bank while Prakash Industries had taken a loan of Rs 1200.000 Millions. Both companies were desperate to avoid their loans being declared NPAs for default in repayments. Shares of Bhushan Steel rose 0.69% to settle at Rs 380.75 on Tuesday, 5 August 2014. The stock fell by maximum permissible daily limit of 20% to Rs 304.60 on Wednesday, 6 August 2014.

CBI Director Ranjit Sinha had reportedly ordered an internal inquiry after his team did not arrest Bhushan Steel vice-chairman Neeraj Singhal during searches at his residence in the Syndicate Bank bribery case, despite clear instructions to pick him up. Neeraj Singhal is on the run from the time of the raid and the CBI has been trying to trace him since, so that he can be arrested, reports added.

Meanwhile, a Delhi court on Wednesday, 6 August 2014 reportedly dismissed the anticipatory bail plea of Neeraj Singhal in connection with the Syndicate Bank bribery case.

In view of the ongoing development and the possible impact of the same on the credit risk profile of Bhushan Steel, rating firm CARE on Wednesday, 6 August 2014 placed the ratings on Credit Watch. CARE is in discussion with Bhushan Steel on the ongoing developments and would take necessary action when greater clarity emerges, a press release issued by CARE indicated.

Bhushan Steel reported net loss of Rs 195.700 Millions in Q4 March 2014 as compared to net profit of Rs 2802.100 Millions in Q4 March 2013. Net sales fell 10.9% to Rs 23997.300 Millions in Q4 March 2014 over Q4 March 2013.

Bhushan Steel is one of the leading prominent player in steel industry. The company is now India's 3rd largest secondary steel producer company with an existing steel production capacity of 2 million tonne per annum (approx.).

BHUSHAN STEEL: TIME RUNNING OUT?

Experts advise: Stay away from the stock, even after it has fallen 60% in only 8 trading sessions; taint on the management, high debt and recent problems in earnings add to the question marks, despite

August 18, 2014

Bhushan Steel, in the centre of a storm over recent days, has seen its stock fall from Rs 381 on August 5 when its vice-chairman and managing director, Neeraj Singal, was arrested in the Syndicate Bank bribery case, to Rs 152.50 currently. For the past eight trading sessions, the stock has been locked in the lower circuit. The market capitalisation has fallen Rs 52000.000 Millions, taking the current value to only Rs 34540.000 Millions for a company that has 2.7 million tonnes per annum (mtpa) of operational steel manufacturing capacity and is in the process of commissioning another 2.5 mtpa by the end of the current financial year.

It is unclear whether Bhushan is a steal at these levels or whether the market was earlier overvaluing the company. The expansion plans of peers provide some e answers.

Recently, referring to the government’s plan of taking India’s steel-making capacity to 300 mtpa by 2025, a senior industry official had said it took about $1 billion (Rs 6,000 Millions) to build one mtpa capacity. Giriraj Daga, senior research analyst, Nirmal Bang Institutional Equities, seconds the view. A one mtpa expansion costs Rs 30000.000-40000.000 Millions but a new project costs more, given the need for setting up allied infrastructure. In January, government-owned Steel Authority of India Limited (SAIL) said it would expand its capacity to 24 mtpa, by adding 10 mtpa at a cost of Rs 600000.000 Millions. And, that further expansion to 50 mtpa by 2025 would cost Rs 1700000.000 Millions or Rs 65000.000 Millions per mt.

Consider Tata Steel, which in two phases is building a six mtpa plant at Kalinganagar in Odisha’s Jajpur district. The first phase of three mtpa is expected to be commissioned by the end of FY15 and to cost Rs 260000.000 Millions. Although the cost had increased owing to delays due to land acquisition problems in earlier years, it also includes cost of allied infrastructure such as rail links, raw material, etc, say analysts. The second phase of three mtpa expansion is estimated to cost Rs 120000.000- 140000.000 Millions. These estimates peg Bhushan Steel’s value at Rs 312000.000-338000.000 Millions, based on Rs 60000.000-65000.000 Millions as the cost per mt and an estimated steel capacity of 5.2 mtpa. These numbers are almost equal to the Rs 323400.000 Millions the company is spending on the Phase-III expansion project. Of this, it had already spent Rs 271000.000 Millions by the end of the June quarter. The existing 2.7 mtpa capacity is also worth a good amount. However, among the keys to profitability is backward integration (coal and iron ore mines) initiatives, which in Bhushan’s case are still to see the light of day.

Beyond these capacities, the company stands out due to its value-added products portfolio, which caters primarily to the needs of automobile and white-goods makers. It manufacturers these with the help of technology sourced from Sumitomo of Japan and tie-ups with Hitachi and Kusakabe (both of Japan), GFG and ATMC (of USA), etc. With 18 distribution and processing centres across India, the company claims to have quite a few marquee clients.

These also suggest there are hard assets in the company. Thanks to its aggressive growth plans, the consolidated net sales have grown at a compounded annual rate of 14 per cent in 10 years. The Ebitda (earnings before interest, taxes, depreciation and amortisation) margins have remained healthy at 25-28.2 per cent in the past five years, and so have consolidated net profits, with the exception of 2013-14, when net sales dropped 10 per cent and net profit by 93.5 per cent to only Rs 590.000 Millions from Rs 9070.000 Millions in FY13. The last two quarters of FY14 saw a loss of Rs 58 Millions and Rs 200.000 Millions, respectively; the June quarter of 2014-15 also saw a higher loss of Rs 1420.000 Millions.

The bigger problem, though, is the debt on the company’s books, of Rs 36,000 Millions. It takes the enterprise value to around Rs 40,000 Millions. Over these years, debt levels have also surged from just under Rs 12,000 Millions in 2009-10 to Rs 35,380 Millions in 2013-14— the debt-equity ratio was a high 3.86 in 2013-14.

With deteriorating financial performance, it might become difficult to service debt obligations, say analysts. The arrest of its vice-chairman has added to the woes. Though the company’s board has approved plans to raise funds up to Rs 60000.000 Millions in phases, the sharp fall in valuations suggest this might not be easy. Unless the promoters, who hold 71.3 per cent stake (most of it being pledged) are able to cough up large resources or are able to get along a strategic partner or investor, the going will be difficult. The option is to significantly improve the performance in the next three to four quarters, so as to be able to repay short-term liabilities. Estimates peg the debt repayment at Rs 25000.000 Millions for FY15 and a similar amount in FY16.

A fund manager says there is an element of doubt over prospects. That there are allegations of bribery suggests problems in either accounting or other issues. “For us, any stock which is tainted is better avoided,” he adds. While there might be value in the stock, given the sharp decline, experts are advising caution. Says Alex Mathews, head of research, Geojit BNP Paribas Financial Services, “Until clarity emerges, it is prudent that investors avoid Bhushan Steel’s stock.”

Some do see an opportunity. Giriraj Daga, adding strict caveats, says, “Bhushan Steel is high-risk, high-reward for investors looking from a two-three years’ perspective but only below Rs 100 levels. While we are expecting the steel industry outlook to improve, we don’t know how big the hole is in the books of Bhushan Steel. On an enterprise value basis, its value should be Rs 420000.000-450000.000 Millions, looking at the gross block and the capital work-in-progress. We believe it will be difficult for existing management to revive, as rating agencies have also downgraded the debt. Bankers have limited options but to take over the company and sell it to a third party who will bring in money.”

Experts say stock will be under pressure in the near term. The good part, though, is that Bhushan is still a standard asset for banks, as it has not defaulted on its obligations. However, time seems to be running out.

EMBROILED IN BRIBERY CASE, INDIA'S BHUSHAN SAYS SERVICING DEBT

NEW DELHI, Aug 12 (Reuters) - India's Bhushan Steel Limited , a debt-ridden company whose managing director was arrested last week in a bribery case, has so far been able to service its loans, its finance director told Reuters on Tuesday.

The Central Bureau of Investigation (CBI), India's top crime-fighting agency, arrested Sudhir Kumar Jain, chairman of state-run lender Syndicate Bank Limited this month over allegations he took bribes to grant loan extensions to Bhushan Steel.

Bhushan Steel said last Thursday that Managing Director Neeraj Singal had surrendered to the CBI to assist the investigation, which has shed light on the dubious lending that has weakened the balance sheets of India's state banks.

Family-controlled Bhushan Steel, which has its main operations in the eastern state of Odisha, owes net debts of $5.86 billion - eight times its equity market value of $732 million. It denies any wrongdoing in the bribery case.

"As of date, there is no bad loan," Finance Director Nittin Johari said. "We are in talks with the banks."

Johari said he expected clarity after a meeting of lenders, including Punjab National Bank (PNB) and the State Bank of India (SBI), on Aug. 18.

"All depends upon the banks, what they decide, how they are going to support. Because everything is not on the company's hands," Johari said by phone. "They are supporting the company but let's see. After the meeting everything is going to be clear."

Shares in Bhushan Steel, founded in 1989 by Brij Bhushan Singal and run by son Neeraj since 2002, have lost more than half of their value since Jain's arrest.

Separately, Bhushan Steel said on Tuesday it had posted a quarterly loss and that its board had approved the issue of securities to raise up to $1 billion.

ASSET QUALITY

The finance ministry estimates that India's dominant state banks will need $40 billion in fresh capital by 2018 to meet international capital adequacy standards.

A committee appointed by the central bank in May called corruption in state banks a major "public policy concern", and recommended the federal government cut its stake in these banks to below 50 percent.

Total bank exposure to Bhushan Steel is about 400 billion rupees ($6.5 billion), according to top Indian lender SBI, which has proposed to the lenders' consortium that a management agency be appointed to oversee the company's operations.

Johari said teams were in place to run the company along with founder chairman Brij Bhushan Singal.

About $386 million of its total debt matures this fiscal year ending March 31 and $460 million in the next fiscal year.

The company has been in the news for various accidents at its main 3 million-tonne-per-year steel plant in Odisha. At least 72 people have died in accidents since the commissioning of the plant in August 2006, according to a state regulator.

SBI Chairwoman Arundhati Bhattacharya has said, however, that the plant is in good order.

"At least all of our lenders, engineers and other experts on our panel who have visited have confirmed that the asset is a very good quality asset," Bhattacharya said last week.

BANKS INCREASE CONTROL, SCRUTINY OF BHUSHAN STEEL

New Delhi: Lenders to Bhushan Steel Limited have effectively taken charge of the company, and asked for three director posts on the company’s board (which will then have 14 members) apart from conducting a forensic audit of the company’s books and a concurrent one of its cash flows.

The first audit will find out whether the company hid something or has indulged in any malpractice, while the second will simply keep track of its cash.

Mint couldn’t immediately ascertain whether Bhushan Steel has agreed to induct three nominees of the banks into its board.

The move is a radical one for Indian banks that aren’t usually as aggressive, but it indicates a desire on their part to get tough on bad loans (or loans that run the risk of turning bad) in the banking system. It also comes amid recent moves by the Central Bureau of Investigation (CBI) which has been investigating the issue of bad loans on the books of banks.

In early August, the federal investigating agency arrested S.K. Jain, chairman and managing director of Syndicate Bank, for demanding and receiving bribes to increase the credit limit of two companies—Bhushan Steel was one of them.

A consortium of 51 lenders has an exposure of around Rs.400000.000 Millions to Bhushan Steel and met on Monday to decide on ways to protect their exposure.

The lenders have asked the company to reduce debt and bring in more equity. The company was also asked to monetize its non-core assets within a definite time frame as part of the deleveraging exercise.

The bankers will also appoint an independent engineer to monitor the operations of the company and the projects, said a statement issued by Punjab National Bank, the lead lender.

Monday’s meeting was also attended by Brij Mohan Singhal, chairman of Bhushan Steel, and the company’s CFO. Vice-chairman Neeraj Singhal was arrested by CBI earlier this month.

Bhushan Steel, the sixth-largest Indian steel maker by capacity, produces about 2.2 million tonnes (mt) of mostly flat steel products at plants in Uttar Pradesh, Odisha and Maharashtra. Bhushan Steel has a net debt of Rs.317540.900 Millions as of 31 March, 12% higher than the Rs.283562.300 Millions debt it had a year earlier. The company’s debt-to-equity ratio, one of the highest in the industry, stood at 3.46 as on 31 March.

In the meeting, banks took stock of the performance of Bhushan Steel—production volume, turnover and the management. The company is said to have assured bankers that it is financially stable and there is no cause for worry.

Big lenders such as State Bank of India (SBI) and Punjab National Bank have sought representation on the board of the steel company, one of the bankers who attended the meeting said, speaking on condition of anonymity. He added that one of the big four firms will be asked to conduct the forensic and concurrent audit though the banks were, in general, satisfied with the operations of the company. Bhushan Steel has asked for more time to cut its debt and bring in equity. Meanwhile, the company has agreed to monetise its non-core assets, the statement said.

Lenders were considering appointing a management agency to focus on the Odisha unit of Bhushan Steel in Dhenkanal, Arundhati Bhattacharya, SBI chairman, had said earlier in the month, adding that the bank had an exposure of around Rs.60000.000 Millions to the steel company, but that there was no fear of it turning into a non-performing asset. Analysts said that Bhushan Steel Limited’s troubles can be traced to an ambitious capacity expansion in Odisha for a 5 million tonne (mt) integrated steel plant in 2007.

In November, there was an explosion near a blast furnace after which its phase III expansion operations of the Odisha plant were stopped on the direction of State Pollution Control Board, according to a Care Ratings report in March.

The production loss impacted sales and by the time the Pollution Control Board gave its consent in January to restart operations, the delay hit profitability and cash flows, the report added.

“There have been reported cost overruns on phase III project with the company spending Rs.75150.000 Millions (including exchange fluctuation of Rs.7770.000 Millions) on the project up to 31 December as against the estimated project cost of Rs.65830.000 Millions,” Care said.

Ananda Bhoumik, senior director at India Ratings, said there is a sense of urgency in Bhushan Steel’s case given the large exposure of the banking system to the company.

“If the banks actually manage to get the board seats, which is traditionally reserved for shareholders, it can be considered a good progress for creditor rights,” he said.

As of 31 March, the 40 listed banks had gross NPAs of Rs.2.42 trillion, up from Rs.1.8 trillion a year ago.

BANKS ASK BHUSHAN TO SELL AND LEASE BACK CRITICAL ASSETS

August 20, 2014

A day after effectively taking charge of Bhushan Steel, lenders have delivered another punch. The bankers’ consortium, which met in New Delhi on Monday, has asked the troubled steel maker to sell and lease back some of its critical assets to reduce debt, as the borrower is finding it difficult to raise equity from the market.

This is part of the road map drawn by SBI Caps, the merchant banking arm of State Bank of India (SBI), for recovery of around Rs 400000.000 Millions that Bhushan Steel has borrowed from 35 lenders.

According to the plan, the steel company has been asked to deleverage by repaying debt. However, given the company’s present problems that led to a slide in its share price, raising equity through a qualified institutional placement was not a viable proposition at this point, a banker who attended Monday’s meeting told Business Standard.

The share price of Bhushan Steel has fallen 62 per cent since August 5. The shares closed at Rs 144.90 apiece on Tuesday.

Bankers said four assets, including a coke oven plant, had been identified by the steel company. It is not immediately known how much debt will be reduced through the sale and lease-back.

According to bankers, there is no dearth of buyers for the company’s facilities and SBI Caps is in the process of identifying prospective bidders, which might include global steel producers.

Banks have tightened their grip on the firm since its vice-chairman and managing director, Neeraj Singal, was arrested by the Central Bureau of Investigation on August 7 for allegedly bribing SK Jain, the now-suspended chairman and managing director of Syndicate Bank.

Bankers said the forensic audit, as decided by the consortium on Monday, would be done by an external agency and would seek to find out if the firm diverted the borrowed funds or used those for purposes other than those for which the loans were given.

It would also find out whether there was creation of genuine assets.

These steps were taken even as the loans continue to be standard on the books of banks and have not become non-performing. However, following the liquidity problem that Bhushan Steel, one of the most indebted steel makers of the country, is facing, the loan is now categorised as special mention account 2 that is overdue in 60 days.

A concurrent auditor will also be appointed to monitor cash flows on a daily basis and an independent engineer will look at the operations of the company.

“Given the magnitude of the exposure and the number of lenders involved, banks will take a huge hit if the loan turns bad,” said a senior executive of a public-sector bank.

BHUSHAN STEEL’S LENDERS TO MEET SOON ON RS.400000.000 MILLIONS LOAN EXPOSURE

Mumbai: Concerned about the recent bribe-for-loan scam which has led to the arrests of top executives of Bhushan Steel Limited and Syndicate Bank, all lenders to the steel maker have stepped in to protect their exposure of about Rs.400000.000 Millions.

A consortium of 51 lenders to Bhushan Steel may meet next week to try to put in place a management agency to oversee the day-to-day running of the company, bank officials said on Friday at State Bank of India’s (SBI’s) first quarter results press conference.

“We are working with Punjab National Bank (PNB) to call a consortium meeting soon,” said Arundhati Bhattacharya, chief of SBI. PNB is the consortium leader. SBI’s exposure to the company is about Rs.60000.000 Millions, Bhattacharya said.

On Thursday, the Central Bureau of Investigation (CBI) arrested Neeraj Singhal, vice-chairman of Bhushan Steel, and on Saturday, it arrested Syndicate Bank’s chairman S.K. Jain for allegedly taking a bribe of Rs.50 lakh for increasing the credit limit of some companies in violation of banking rules.

Bhushan Steel, the sixth largest Indian steel maker by capacity, produces about 2.2 million tonnes (mt) of mostly flat steel products with plants in Uttar Pradesh, Odisha and Maharashtra. The company, which is a prominent supplier of automotive body sheets, has a major expansion taking place in Odisha that would take its total installed capacity to 4.7mt, according to a CARE Ratings report dated 6 August.

“Bhushan Steel’s vice-chairman and managing director Mr. Neeraj Singhal has been named in a case registered by CBI in relation with extension of credit facilities by Syndicate Bank to the company. In view of the above development and the possible impact of the same on the credit risk profile of the company, CARE has placed the ratings on ‘Credit Watch’,” the CARE report said. “CARE is in discussion with the company on the above developments and would take necessary action when greater clarity emerges,” the report added. The management agency of the lenders would focus on the Odisha unit of Bhushan Steel in Dhenkanal where a fatal accident put the spotlight on the plant’s functioning. “We are planning to appoint a management agency to oversee the day-to-day running of the unit (in Odisha).”

SBI’s Bhattacharya said. Last November, when the plant caught fire, the lenders had advised the management to appoint a safety advisor and take all precautionary measures to avoid a repeat of the incident. However, SBI is not worried about its exposure to the company as it is a “good quality asset” for the bank, Bhattacharya added. The reason for putting the management agency is that the lenders “don’t want the unit to get into any kind of trouble or create trouble for others (lenders),” she said.

The bankers are not trying to change the management as “it is not so easy,” she said. On the sidelines of the meeting, a senior SBI official said the management consultant could be Alvarez and Marsal. Shares of Bhushan Steel closed on the BSE at Rs.219.35, down 9.99% from the previous close. Since last Friday, before the problem came to light, the shares have fallen 44.45%.

BHUSHAN STEEL LENDERS CONSIDER OPTIONS AS DEBT BALLOONS

MUMBAI: Lenders to Bhushan Steel say that the company's troubles got compounded following an explosion in its plant at Dhenkanel at the trial stage in November 2013. Although the plant was insured, the cover was not adequate to take care of the loss of profits following the subsequent closure by the pollution control board. One of the lenders who will be present at a crucial board meeting today said that given the drop in earnings lenders would ask for additional equity capital to be brought in to reduce debt service burden

While the company needs additional equity to improve its ratios, this would be a major challenge given the negative sentiment around its stock. Bhushan Steel one of the largest automotive steel makers in the country has seen its market capitalisation halve to Rs 34540.000 Millions. Banks have an exposure of close to Rs 400000.000 Millions in respect of the company. Lenders to the company led by Punjab National Bank and including State Bank of India are meeting in Delhi today to decide on appointing a managing agency to oversee operations after the company's CEO Neeraj Singhal was arrested by the Central Bureau of Investigation in a bribery scandal earlier this month. The bureau had earlier arrested Syndicate Bank chairman, SK Jain in the same case on charges of accepting bribes. The company had run up large debts in huge capacity expansions including the new plant at Orissa and acquisition of energy resources including Australia's Bowen Energy in 2009. Operations of the plant got hit also after the company was ordered to halt work for environmental reasons.

Last week Bhushan Steel reported a net loss of Rs 1410.000 Millions for the first quarter of FY15 down from a net profit of Rs 760.000 Millions in the corresponding quarter last year. The company had also announced plans to raise equity capital of close to $1bm. Officials said that as of last week the company's loans are not a non-performing assets and it would wait for the stance taken by bankers.

SBI WANTS EXTERNAL AGENCY TO RUN BHUSHAN STEEL

A day after the arrest of Bhushan Steel vice chairman in the cash-for-loan case at Syndicate Bank, SBI - a big lender to the firm - said it will press for an external agency to take over the day-to-day management of the company.

"The suggestion that I have made, which has been accepted by the banks that I have talked to, is that we will try to bring in an external management agency who will oversee the day to day running of the company," State Bank of India Chairman Arundhati Bhattacharya said.

The bank has called for a meeting of the lenders' consortium next week to discuss the proposal, she added. The system has a whopping Rs 400000.000 Millions exposure to the Delhi-based Bhushan Steel through 51 lenders. There are two consortia, one on working capital loans led by SBI and the second on term-loans led by Punjab National Bank, representing the lenders' interests.

Bhattacharya said the bank has an exposure of Rs 60000.000 Millions to the steel-maker which is a standard asset at present. The company is embroiled in a controversy following the arrest of Syndicate Bank chairman and managing director SK Jain last week for allegedly receiving a bribe of Rs 5.000 lakh to enhance the credit limits of the company.

The CBI, which arrested Jain, also arrested Bhushan Steel's vice chairman and managing director Neeraj Singal yesterday. Bhattacharya said the Bhushan Steel plant in Odisha is running well and the lenders do not want to expose their assets to any difficulties as a result of the imbroglio.

BHUSHAN STEEL, CEAT TO RAISE FUNDS VIA QIP JULY 23, 2014

QIP seems to the new flavour of the companies looking to raise cash. Both Bhushan Steel and Ceat are planning to raise funds via qualified institutional placement (QIP). Bhushan Steel plans to raise Rs 15000.000-30000.000 Millions. The company would like to pare off their debt from this raised amount. Current debt for the company stands at Rs 280000.000 Millions. QIP may lead to an equity dilution of 25% for the company. Whereas Ceat plans to raise Rs 3000.000-4000.000 Millions and they too will pare their debt from the raised funds. The current debt for the company stands at Rs 9000.000 Millions. QIP may lead to an equity dilution of 13% for Ceat. Kotak is the likely banker that the company has appointed though the company refrained from commenting on market speculation.

ORISSA ORDERS BHUSHAN STEEL TO STOP ALL PROJECT ACTIVITIES AT DHENKANAL, ANGUL FEBRUARY 2, 2014

Bhushan Steel Limited’s integrated steel project in Dhenkanal and Angul district of Orissa has hit a wall. The state forest department has ordered district collectors to stop all activities over the 61.48 hectares of forest land on which the company has built its plant.  The forest department has moved against the project following a letter from the Assistant Inspector General of Forests to the state on December 30, 2013.

The divisional forest officer, Dhenkanal had reported that the company had constructed over 61.48 hectare of forest land violating FC Act, 1980 though the final approval order (Nov 13, 2006) was kept in abeyance by the ministry of environment.

The ministry in its letter had asked the State to initiate disciplinary proceedings against forest department officials who failed to restrain the company from utilising the forest land till it procured final approval under the Forest Conservation Act.  The forest department has asked the district collectors to take action against Bhushans under Indian Forest Act, 1927 or relevant local Forest Act. The forestland on which the construction was done belong to the revenue and disaster management department.

Principal Chief Conservator of Forests JD Sharma said the MoEF order on Bhushans is being complied with. Dhenkanal collector Roopa Sahoo, however, said the state government is yet to take a call on that.

BHUSHAN STEEL POSTS RS 550.000 MILLIONS LOSS IN Q3

FEBRUARY 12, 2014

Income of the company fell to Rs 24071.600 Millions during the quarter from Rs 25290.700 Millions a year earlier. Expenditure, however, went up to Rs 20478.000 Millions from Rs 19546.800 Millions a year earlier.

Higher finance costs and lower income led Bhushan Steel into the red with the firm reporting Rs 547.900 Millions net loss during the October-December quarter. The company had clocked a Rs 2212.000 Millions net profit in the corresponding quarter of the last fiscal, it said in a BSE filing. Income of the company fell to Rs 24071.600 Millions during the quarter from Rs 25290.700 Millions a year earlier. Expenditure, however, went up to Rs 20478.000 Millions from Rs 19546.800 Millions a year earlier. Meanwhile, finance costs of the company also grew to Rs 4320.800 Millions from Rs 2930.100 Millions. Bhushan Steel said due to explosion during the trial run of the second blast furnace at its Meramandali plant in Odisha on November 13, 2013, the operation at the blast furnace has remained suspended, resulting in loss of production.

SYNDICATE BANK- BHUSHAN STEEL FIASCO: BANKS IN A SPOT OVER 'MISTAKEN IDENTITY'

MUMBAI: Is one of the men arrested in the scandal over alleged bribes for higher loan limits the victim of mistaken identity? Lenders certainly hope so. One of the two companies said to be involved in the affair is Bhushan Steel Ltd — vice-chairman Neeraj Singhal was among those arrested, apart from Syndicate Bank chairman and managing director SK Jain.

Also held was executive Arun Agarwal. But he doesn't work for Bhushan Steel, he's chief financial officer of Bhushan Power and Steel, which is run by Neeraj Singhal's brother Sanjay Singhal. To make the situation even more confusing, the brothers have been rivals since they formalised a split of their businesses in 2011. Lenders have already moved to try and make sure that the Rs 40,000 crore Bhushan owes them isn't at risk by nominating members on the board to keep an eye on things. However, they're also nervous about one of the men arrested, Agarwal, being the CFO of Bhushan Power and Steel.

The banking system has a total exposure of at least Rs 70,000 crore to both the companies. They are not leaving anything to chance, just in case. "The consortium of lenders has ordered a forensic audit," said the corporate banking head of a private sector bank.

"The companies have met us and conveyed that this is a clear case of mistaken identity... We have no clarity and it is making us nervous. The CBI (Central Bureau of Investigation) would not share any information as the investigation is on." Bhushan Steel and Bhushan Power and Steel did not respond to queries sent by email.

Agarwal, named chief financial officer of BSL in the first information report (FIR) filed on August 1, was arrested on August 4. The FIR said Agarwal and Neeraj Singhal met Jain in his office and agreed to pay him to enhance the credit limit. According to the FIR, Rs 10 lakh was transferred to an intermediary of Jain by Agarwal on June 20.

But Agarwal's comment has been misconstrued, bankers have been told. "The company has said the CBI has taped conversation of Agarwal referring to Rs 10 lakh. The company clarified that the conversation refers to the repayment of loans worth Rs 10 lakh which was done on that day by Bhushan Power and Steel," said one of the lenders in the consortium.

The Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi) should monitor company promoters, said Ashwin Parekh, partner, national leader, global financial services, EY.

"The market regulator and the RBI should coordinate to keep a tab on promoters and their relatives. The banking system is not as vigilant as it should be on the promoters because of agents involved in loan solicitation. Unlike the capital markets regulator, where large number of investors are concerned, the check on the promoter is not there in the banking system," said Parekh.

"Irrespective of the promoters' background, the banking system is not recognising the value of the underlying assets," he added. Life Insurance Corporation of India, ICICI Bank and Punjab National Bank have each nominated a member on Bhushan Steel's board. Banks are satisfied with the underlying collateral and assets.

OMC'S INPUT SUPPLY PLAN TO BENEFIT BHUSHAN STEEL, JSL

The proposal of Odisha Mining Corporation (OMC) to ink raw material supply pact with steel producers of the state is expected to benefit Bhushan and Jindal groups, especially Jindal Stainless Ltd (JSL) and Visa Steel, which will get iron ore and chromite supply assurance from the state-run miner for a period of five years.

The state cabinet on Monday approved the proposal of OMC, which was based on a ministerial committee report last year, to provide raw material linkage to local industries. As per the proposal, OMC will provide 50 per cent of iron ore and 70 per cent of chrome ore produced by it at market rates to companies who have signed MoUs with the state government and are currently in operation.

The state-run miner produces nearly two million tonne iron ore and close to 800,000 tonne chrome ore every year.

The conditions to get five-year raw material linkage from OMC will benefit both Bhushan Steel and Power Ltd and Bhushan Steel Ltd, Visa Steel which will be getting iron ore at market rate since their plants are already in operation. Similarly, the move is expected to benefit JSL for its stainless steel plant at Kalinganagar in the state. The companies welcomed the move, but said the term ‘market rate’ was a cause of concern.

“The whole idea to ink a supply pact was to get raw material at a reasonable price. If OMC has decided to supply ore at market rates, then we have to see whether it will support our profit margin given the current demand scenario for steel products,” said an official of a large steel maker. In the post cabinet meeting briefing on Monday, the state government stressed that the supply pact will be available only to MoU-signed companies, which do not have captive raw material resources and have completed plant construction.

Bhushan Power & Steel Ltd (BPSL) has invested more than Rs 25,000 crore in Odisha as of now. The company has built a 2.4 million tonne per annum (mtpa) steel mill and 248 Mw captive power plant (CPP) at Sambalpur.

Though the firm has been granted an iron ore mine lease by the state government, it will take at least two years to use ore from its captive mine. The company is currently sourcing iron ore from private miners. Another Bhushan Group firm- Bhushan Steel Ltd has invested around Rs 24,000 crore. The company’s 3 mtpa integrated steel plant is in operations at Meramundali near Dhenkanal.

The other major MoU signed steel players to have commenced operation are JSL. It is currently running a one million tonne stainless steel flat product plant at Kalinganagar. It is currently procuring chrome ore by participating in online auction conducted by OMC, which often result in stoking up of input prices, eating away the profit margin.

The company has sought chrome ore lease in Odisha for its Kalinganagr plant and was also trying to strike a deal with OMC for raw material supply.

Similarly, Visa Steel has operationalised a 0.55 mtpa steel plant and 75 Mw CPP at Kalinganagar. Jindal Steel and Power Ltd (JSPL), which has completed construction of its 2.5 million tonne integrated steel plant at Angul, is also vying for raw material linkages. Out of 49 steel players, who had signed MoUs with the state government, 30 have started production on a partial scale. A large chunk of investments have flown from small and medium firms with steel making capacity of below one mtpa. In total, these companies have achieved a combined steel output of 12.66 mtpa. The small steel players to have started operation are Adhunik Metaliks Ltd, Narbheram Power & Steel Ltd, SMC Power Generation Ltd, Maheswary Ispat and Aryan Ispat & Power Ltd to name a few. None of these firms are producing finished steel products.

IDFC SELLS 31 LAKH SHARES OF BHUSHAN STEEL

On September 03, 2014 IDFC Limited sold 31,08,000 shares of  Bhushan Steel  at Rs 95.95 on the NSE.

In the previous trading session, the share closed at Rs 96.05, up Rs 4.55, or 4.97 percent. It has touched a 52-week low of Rs 86.95.

The latest book value of the company is Rs 395.02 per share. At current value, the price-to-book value of the company was 0.24. The dividend yield of the company was 0.52 percent.

BANKS INCREASE CONTROL, SCRUTINY OF BHUSHAN STEEL

New Delhi: Lenders to Bhushan Steel Ltd have effectively taken charge of the company, and asked for three director posts on the company’s board (which will then have 14 members) apart from conducting a forensic audit of the company’s books and a concurrent one of its cash flows.

The first audit will find out whether the company hid something or has indulged in any malpractice, while the second will simply keep track of its cash.

Mint couldn’t immediately ascertain whether Bhushan Steel has agreed to induct three nominees of the banks into its board.

The move is a radical one for Indian banks that aren’t usually as aggressive, but it indicates a desire on their part to get tough on bad loans (or loans that run the risk of turning bad) in the banking system.

It also comes amid recent moves by the Central Bureau of Investigation (CBI) which has been investigating the issue of bad loans on the books of banks.

In early August, the federal investigating agency arrested S.K. Jain, chairman and managing director of Syndicate Bank, for demanding and receiving bribes to increase the credit limit of two companies—Bhushan Steel was one of them.

A consortium of 51 lenders has an exposure of around Rs.40,000 crore to Bhushan Steel and met on Monday to decide on ways to protect their exposure.

The lenders have asked the company to reduce debt and bring in more equity. The company was also asked to monetize its non-core assets within a definite time frame as part of the deleveraging exercise.

The bankers will also appoint an independent engineer to monitor the operations of the company and the projects, said a statement issued by Punjab National Bank, the lead lender.

Monday’s meeting was also attended by Brij Mohan Singhal, chairman of Bhushan Steel, and the company’s CFO. Vice-chairman Neeraj Singhal was arrested by CBI earlier this month.

Bhushan Steel, the sixth-largest Indian steel maker by capacity, produces about 2.2 million tonnes (mt) of mostly flat steel products at plants in Uttar Pradesh, Odisha and Maharashtra. Bhushan Steel has a net debt of Rs.31,754.09 crore as of 31 March, 12% higher than the Rs.28,356.23 crore debt it had a year earlier. The company’s debt-to-equity ratio, one of the highest in the industry, stood at 3.46 as on 31 March.

In the meeting, banks took stock of the performance of Bhushan Steel—production volume, turnover and the management. The company is said to have assured bankers that it is financially stable and there is no cause for worry.

Big lenders such as State Bank of India (SBI) and Punjab National Bank have sought representation on the board of the steel company, one of the bankers who attended the meeting said, speaking on condition of anonymity. He added that one of the big four firms will be asked to conduct the forensic and concurrent audit though the banks were, in general, satisfied with the operations of the company.

Bhushan Steel has asked for more time to cut its debt and bring in equity. Meanwhile, the company has agreed to monetise its non-core assets, the statement said.

Lenders were considering appointing a management agency to focus on the Odisha unit of Bhushan Steel in Dhenkanal, Arundhati Bhattacharya, SBI chairman, had said earlier in the month, adding that the bank had an exposure of around Rs.6,000 crore to the steel company, but that there was no fear of it turning into a non-performing asset.

Analysts said that Bhushan Steel Ltd’s troubles can be traced to an ambitious capacity expansion in Odisha for a 5 million tonne (mt) integrated steel plant in 2007.

In November, there was an explosion near a blast furnace after which its phase III expansion operations of the Odisha plant were stopped on the direction of State Pollution Control Board, according to a Care Ratings report in March.

The production loss impacted sales and by the time the Pollution Control Board gave its consent in January to restart operations, the delay hit profitability and cash flows, the report added.

“There have been reported cost overruns on phase III project with the company spending Rs.7,515 crore (including exchange fluctuation of Rs.777 crore) on the project up to 31 December as against the estimated project cost of Rs.6,583 crore,” Care said.

Ananda Bhoumik, senior director at India Ratings, said there is a sense of urgency in Bhushan Steel’s case given the large exposure of the banking system to the company.

“If the banks actually manage to get the board seats, which is traditionally reserved for shareholders, it can be considered a good progress for creditor rights,” he said.

As of 31 March, the 40 listed banks had gross NPAs of Rs.2.42 trillion, up from Rs.1.8 trillion a year ago.

CMT REPORT (Corruption, Money Laundering & Terrorism]

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

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.60.77
UK Pound	1	Rs.100.72
Euro	1	Rs.80.56

INFORMATION DETAILS

Information Gathered by :	HTL
Analysis Done by :	SUB
Report Prepared by :	NKT

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	4
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	4
--PROFITABILIRY	1~10	3
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--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	NO
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		33

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	--

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