MIRA INFORM REPORT

Report No. :	307708
Report Date :	14.02.2015

IDENTIFICATION DETAILS

Name :	ELECTROSTEEL STEELS LIMITED (w.e.f. 05.05.2010)
Formerly Known As :	ELECTROSTEEL INTEGRATED LIMITED
Registered Office :	801, Uma Shanti Apartments, Kanke Road, Ranchi – 834 008, Jharkhand
Country :	India
Financials (as on) :	31.03.2014
Date of Incorporation :	20.12.2006
Com. Reg. No.:	03-012663
Capital Investment / Paid-up Capital :	Rs.21867.350 Millions
CIN No.: [Company Identification No.]	L27310JH2006PLC012663
IEC No.:	Not Available
TAN No.: [Tax Deduction & Collection Account No.]	Not Available
PAN No.: [Permanent Account No.]	AABCE6875H
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Manufacturer and Exporter of Steel Products
No. of Employees :	1500 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

B (30)

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

Status :	Moderate
Payment Behaviour :	Slow
Litigation :	Clear
Comments :	Subject is an established company having moderate track record. The company has witnessed a deterioration in its financial profile marked by cash losses which lead to reporting huge accumulated losses during 2014. However, the rating also take into consideration the approval of corporate debt restructuring scheme by CDR EG on September 26, 2013 which has supported its debt payments as well as covered the escalated revised project cost during the year under consideration. Trade relations are fair. Business is active. Payment terms are reported as slow. In view of experienced promoter group and strategic equity investors, the company can be considered for business dealings with caution.

NOTES :

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

ECGC Country Risk Classification List – December 31, 2014

Country Name	Previous Rating (30.09.2014)	Current Rating (31.12.2014)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

EXTERNAL AGENCY RATING

Rating Agency Name	CARE
Rating	Long term Bank Facilities = B
Rating Explanation	High risk of default regarding payments
Date	07.07.2014

Rating Agency Name	CARE
Rating	Short term Bank Facilities = A4
Rating Explanation	Minimal degree of safety and very high credit risk.
Date	07.07.2014

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 PARTED BY

Name :	Mr. R. L. Gupta
Designation :	General Manager in Finance and Accounts
Contact No.:	91-33-22839990
Date :	11.02.2015

LOCATIONS

Registered Office :	801, Uma Shanti Apartments, Kanke Road, Ranchi – 834 008, Jharkhand, India
Tel. No.:	91-651-2231636
Fax No.:	91-651-2231636
E-Mail :	vikram.saraogi@electrosteel.com eil.investors@electrosteel.com rlgupta@electrosteel.com anubhavn@electrosteel.com
Website :	http://www.electrosteel.com
Area :	1000 Sq. ft.
Location :	Rented
Head Office :	G.K. Tower, 2^nd and 3^rd Floor, 19, Camac Street, Kolkata – 700 017, West Bengal, India
Tel. No.:	91-33-22839990
Fax No.:	91-33-22902882/ 22894339
Area :	10000 Sq. ft.
Location :	Rented
Factory / Project Site :	Village Siyljori, P.O.: Jogidih, PS: Chandankyari, District Bokaro – 828 303, Jharkhand, India
E-Mail :	ardhendhus.kahali@electrosteel.com
Warehouse :	78/186, Khasra No. 78, Plot No 186, Village Bakoli, Gt Road, Delhi, India
Branch Offices :	Located At Patna Bokaro Guwahati Bhubaneswar Kolkata

DIRECTORS

As on 31.03.2014

Name :	Mr. Umang Kejriwal
Designation :	Director
Name :	Mr. Naresh Pachisia
Designation :	Director
Name :	Mr. Lalit Kumar Singhi
Designation :	Director
Name :	Mr. Jinendra Kumar Jain
Designation :	Director
Name :	Mr. Sunil V. Diwakar
Designation :	Director
Name :	Mr. Amrendra Prasad Verma
Designation :	Director
Name :	Mr. Lawrence M. Roy
Designation :	Director
Name :	Mr. Ramashankar Singh
Designation :	Whole Time Director

KEY EXECUTIVES

Name :	Mr. Vikram Saraogi
Designation :	Company Secretary
Name :	Mr. R. L. Gupta
Designation :	General Manager in Finance and Accounts

SHAREHOLDING PATTERN

As on 31.12.2014

Category of Shareholder	Total No. of Shares	Total Shareholding as a % of Total No. of Shares
		As a % of (A+B)
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Bodies Corporate	1089800000	45.23
Sub Total	1089800000	45.23
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	1089800000	45.23
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	8489224	0.35
Financial Institutions / Banks	950000	0.04
Venture Capital Funds	15305000	0.64
Foreign Institutional Investors	10798227	0.45
Sub Total	35542451	1.48
(2) Non-Institutions
Bodies Corporate	321569206	13.35
Individuals
Individual shareholders holding nominal share capital up to Rs. 1 lakh	68097205	2.83
Individual shareholders holding nominal share capital in excess of Rs. 1 lakh	173236926	7.19
Any Others (Specify)	720989235	29.93
Trusts	21525190	0.89
Non Resident Indians	3818901	0.16
Foreign Corporate Bodies	218742306	9.08
Clearing Members	705761	0.03
Foreign Corporate Bodies	476197077	19.77
Sub Total	1283892572	53.29
Total Public shareholding (B)	1319435023	54.77
Total (A)+(B)	2409235023	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)	2409235023	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer and Exporter of Steel Products

Products :

Product Description	Item Code No.:
Iron and Steel in Primary / Semi Finished Goods	3301
Coke Oven Products	3180
Ferro Alloys	3320

Brand Names :

Not Available

Agencies Held :

Not Available

Exports :

Products :

Steel Products

Countries :

• Bangladesh
• Nepal
• Sri Lanka

Imports :

Products :

Raw Material

Countries :

• China
• Indonesia
• Australia

Terms :

Selling :

Cash, Advance Payment and Credit (30 and 60 Days)

Purchasing :

Cash, Advance Payment and Credit (30 and 60 Days)

GENERAL INFORMATION

Suppliers :

Reference :	Rumta Mines Private Limited, Mumbai
Name of the Person :	Not Divulged
Contact No.:	Not Divulged
Since How Long Known :	Not Divulged
Experience :	Not Divulged
Maximum Limit Dealt :	Not Divulged

Customers :

Wholesalers and Retailers

Reference :	Hugavi Alloy Steel Private Limited
Name of the Person :	Not Divulged
Contact No.:	Not Divulged
Since How Long Known :	Not Divulged
Experience :	Not Divulged
Maximum Limit Dealt :	Not Divulged

Reference :	Navraj Enterprises Private Limited
Name of the Person :	Not Divulged
Contact No.:	Not Divulged
Since How Long Known :	Not Divulged
Experience :	Not Divulged
Maximum Limit Dealt :	Not Divulged

No. of Employees :

1500 (Approximately)

Bankers :

• State Bank of India
• Allahabad Bank
• Andhra Bank
• Bank of Baroda
• Bank of India
• Bank of Maharashtra
• Canara Bank
• Central Bank of India
• Corporation Bank
• Dena Bank
• HUDCO ICICI Bank Limited
• IL&FS Financial Services Limited
• Indian Bank
• Indian Overseas Bank
• LIC of India
• Oriental Bank of Commerce
• Punjab Sind Bank
• Punjab National Bank
• State Bank of Hyderabad
• State Bank of Mysore
• State Bank of Patiala
• State Bank of Travancore
• Syndicate Bank
• Jammu and Kashmir Bank Limited
• UCO Bank
• Union Bank of India
• United Bank of India
• Vijaya Bank
• SREI Insfrastructure Finance Limited

Facilities :

(Rs. In Millions)

Secured Loan	As on 31.03.2014	As on 31.03.2013
Long Term Borrowing
From Banks
Restructured Term Loan	62229.472	0.000
Additional Term Loan	6326.600	0.000
Funded Interest Term Loan (FITL)	7225.124	0.000
Senior Debts	0.000	25951.616
Subordinate Debts	0.000	4152.869
External Commercial Borrowings (ECB)	0.000	4026.558
Securitization Loan	0.000	15875.100
Capacity Enhancement Loan	0.000	93.333
From Others
Restructured Term Loan	6837.768	0.000
Funded Interest Term Loan (FITL)	657.154	0.000
Senior Debts	0.000	3113.333
Subordinate Debts	0.000	128.667
Securitization Loan	0.000	3150.000
Short Term Borrowing
Working Capital facility from a Bank i	133.831	1000.234
Buyers Credit	12.027	1231.058
Total	83421.976	58722.768

NOTE :

LONG-TERM BORROWINGS

During the year, the Company was referred by the lenders to the Corporate Debt Restructuring (CDR) Cell. The CDREmpowered Group (CDR EG) Cell vide its Letter of Approval dated 28 September 2013 has approved a package to Zestructure/reschedule the Company's Debt and provide additional facilities. The Master Restructuring Agreement has been executed between the Company and the concerned lenders on 20 January 2014. The borrowings from non-CDR lenders (viz. HUDCO, IL & FS and SREI, appearing under the head 'From Others') have also been restructured bilaterally in line with CDR guidelines subject to certain modifications.

1. Security

1) The entire facilities from CDR lenders and a non-CDR lender (HUDCO) are secured by:

(a) first ranking pari passu charge by way of mortgage/hypothecation of all immovable and movable properties (including fixed assets, plant & machinery, tools & accessories etc.), current assets (including book debts), present and future and assignment over all of Company's bank accounts;

(b) pledge of 866,750,000 equity shares of the Company held by Electrosteel Castings Ltd. ('ECL') being the Promoter Company;

(c) pledge of 517,000 equity shares of the Company held by Mr. Umang Kejriwal (Director);

(d) pledge of 32,675,270 equity shares of ECL held by 2 of its promoter group companies;

(e) personal guarantee of Mr. Umang Kejriwal and Ms. Radha Kinkari Kejriwal (Sr. Executive).

2) The facility from a non-CDR lender (SREI) is secured by:

(a) second ranking pari passu charge by way of hypothecation of all movable assets (including receivables and intangibles), present and future;

(b) second charge on all rights, titles and interest in all assets of the Project, letter of credit/guarantee/performance bond provided in respect of the Project and all Project documents, Contracts, Insurance Policies etc.

(c) first charge by way of mortgage of a piece of land with factory building owned by ECL.

3) The facility from another non-CDR lender (IL & FS) is secured by

(a) second ranking pari passu charge by way of mortgage/hypothecation of all assets mentioned in 1(a) above;

(b) pledge of shares as mentioned in 1(b) to 1(d) above ranking subservient to the pledge already created in favour of lenders;

(c) personal guarantees as mentioned in 1(e) above.

B. Repayment terms

a) The Restructured Term Loan, Additional Term Loan and FITL from all lenders (except a non-CDR lender) are repayable in 29 quarterly instalments commencing from December 2015 and ending on December 2022 in a stepped up manner as follows:

Year	Term Loan due for repayment (%)
	Restructured FITL Term Loan	Additional Term Loan	FITL
2015-16	5.00%	6.00%	8.00%
2016-17	8.00%	12.50%	13.00%
2017-18	12.00%	12.50%	13.00%
2018-19	12.00%	12.50%	14.00%
2019-20	15.00%	14.00%	14.00%
2020-21	16.00%	14.00%	14.00%
2021-22	17.00%	15.00%	15.00%
2022-23	15.00%	13.00%	9.00%
TOTAL	100.00%	100.00%	100.00%

b) Repayment terms of a non-CDR lender (SREI):

i) The Restructured Term Loan (Rs. 35,000.00 lacs) is repayable in 16 quarterly instalments commencing from April 2016 and ending on January 2020 in a stepped up manner as follows:

Year	Term Loan due for repayment (%)
2016-17	10.00%
2017-18	20.00%
2018-19	30.00%
2019-20	40.00%
TOTAL	100.00%

ii) The Restructured Term Loan (Rs. 7,186.00 lacs) is repayable on or before 15th March 2016.

iii) The FITL is repayable in 19 equal quarterly instalments commencing from July 2015 and ending on January 2020.

B. The applicable rate of interest on the above term loans during the year are –

a) Restructured Term Loan and FITL from all lenders carries interest @ 10.75% p.a.

b) Additional Term Loan from all lenders carries interest @ 11.00% p.a.

c) Buyers' Credit carries interest rate at LIBOR plus spread being 0.50% to 1.25%.

SHORT-TERM BORROWINGS

Working Capital facility from a Bank & Buyers' Credit is secured as in Note 4(A)(1) above. The facility carries interest rate of

11.00% p.a.

Banking Relations :	---
Statutory Auditors :
Name :	B. Chhawchharia and Company Chartered Accountants
Address :	Kolkata, West Bengal, India
Cost Auditors :	S.G. and Associates Cost Accountants
Memberships :	Not Available
Collaborators :	Not Available
Enterprises where KMP/ relatives of KMP have significant influence or control :	Asian Informatics Private Limited Avalokiteshwar Valinv Limited Badrinath Industries Limited Bose Estates Private Limited Calcutta Diagnostics Centre Private Limited Cubbon Marketing Private Limited Electrosteel Aviation Limited Electrosteel Thermal Coal Limited Electrosteel Thermal Power Limited Ellenbarrie Chemical Allied Private Limited Ellenbarrie Developers Private Limited Escal Finance Services Limited Electrocast Sales India Limited Gaushree Enterprises G. K. Investments Limited G. K. and Sons Private Limited Jhilmil Traders Private Limited Lanco Industries Limited Malay Commercial Enterprises Limited Murari Investment and Trading Company Limited North Dhadhu Mining Company Private Limited Oxford Heights Private Limited Quinline Dealcomm Private Limited Rama Mining Consultants Private Limited Resina Developers Private Limited Sigma Commercials Private Limited Sri Gopal Investments Ventures Limited Sree Khemisati Construction Private Limited Tulsi Highrise Private Limited Tulip Enclave Private Limited Uttam Commercial Company Limited Wilcox Merchants Private Limited
Other related parties :	Electrosteel Castings Limited Electrosteel Europe SA Electrosteel Algeria SPA Electrosteel Brasil Limited A Tubos E Conexoes Duteis Electrosteel Castings (UK) Limited Electrosteel Castings Gulf Fze Electrosteel Doha for Trading LLC Electrosteel Trading S.A. Spain Electrosteel USA LLC Mahadev Vyapaar Private Limited Singardo International PTE Limited Waterfab LLC

CAPITAL STRUCTURE

After 31.03.2014

Authorised Capital :

No. of Shares	Type	Value	Amount
4500000000	Equity Shares	Rs.10/- each	Rs.45000.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
2409235023	Equity Shares	Rs.10/- each	Rs.24092.350 Millions

As on 31.03.2014

Authorised Capital :

No. of Shares	Type	Value	Amount
4500000000	Equity Shares	Rs.10/- each	Rs.45000.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
2186735023	Equity Shares	Rs.10/- each	Rs.21867.350 Millions

The Company has only one class of shares referred to as Equity Shares having face value of Rs. 10. Each holder of Equity Shares is entiled to one vote per share. In the event of liquidation, the equity sharesholders are eligible to receive in proportion to their shareholding the remaining assets of the Company, after distribution of the preferential amount.

Share Capital Reconciliation

Equity shares	As at 31^st March, 2014
	No. of Shares	Amount (Rs. in millions)
Opening balance	2186735023	21867.350
Issued during the period	----	-----
Closing Balance	2186735023	21867.350

Particulars of Equity Shareholders holding more than 5% Shares at Balance Sheet date

Name of Shareholders	As at 31^st March, 2014
	No. of Shares	% Holding
Electrosteel Castings Limited	866750000	39.66%
Stemcor Cast Iron Investments Limited	400909646	18.33%

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	21867.350	21867.350	20347.350
(b) Reserves & Surplus	(6871.630)	(3960.313)	(1160.188)
(c) Money received against share warrants	0.000	0.000	0.000
(2) Share Application money pending allotment	0.000	0.000	0.000
Total Shareholders’ Funds (1) + (2)	14995.720	17907.037	19187.162
(3) Non-Current Liabilities
(a) Long-term borrowings	83276.118	56491.476	52007.591
(b) Deferred tax liabilities (Net)	0.000	0.000	0.000
(c) Other long term liabilities	6.947	4648.677	3990.195
(d) Long-term provisions	27.888	21.539	32.942
Total Non-current Liabilities (3)	83310.953	61161.692	56030.728
(4) Current Liabilities
(a) Short term borrowings	145.858	2331.292	1031.147
(b) Trade payables	2706.411	2068.272	1207.727
(c) Other current liabilities	12843.283	19135.231	12904.683
(d) Short-term provisions	8.288	7.854	5.142
Total Current Liabilities (4)	15703.840	23542.649	15148.699
TOTAL	114010.513	102611.378	90366.589
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	37279.366	14425.275	14988.508
(ii) Intangible Assets	51.788	53.561	56.869
(iii) Capital work-in-progress	67597.070	81704.990	67299.923
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	0.000	0.000	0.000
(c) Deferred tax assets (net)	0.000	0.000	0.000
(d) Long-term Loan and Advances	1046.499	1579.706	3379.310
(e) Other Non-current assets	0.000	0.000	0.000
Total Non-Current Assets	105974.723	97763.532	85724.610
(2) Current assets
(a) Current investments	1762.170	0.000	225.316
(b) Inventories	3661.749	2259.336	1948.589
(c) Trade receivables	220.220	58.577	9.337
(d) Cash and cash equivalents	691.757	925.110	790.834
(e) Short-term loans and advances	1678.568	1511.229	1613.374
(f) Other current assets	21.326	93.594	54.529
Total Current Assets	8035.790	4847.846	4641.979
TOTAL	114010.513	102611.378	90366.589

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2014	31.03.2013	31.03.2012
	SALES
		Revenue from operations (Net)	5132.219	1631.101	606.876
		Other Income	69.257	9.339	4.181
		TOTAL (A)	5201.476	1640.440	611.057
Less	EXPENSES
		Cost of Materials Consumed	4686.877	1888.650	880.468
		Changes in Inventories of Finished Goods, Work-in-Progress	(479.813)	(79.932)	(128.803)
		Employee Benefits Expense	139.473	100.472	70.962
		Other expenses	1316.567	573.483	244.514
		Exceptional Items	0.000	22.952	0.000
		TOTAL (B)	5663.104	2505.625	1067.141
Less	PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		(461.628)	(865.185)	(456.084)
Less	FINANCIAL EXPENSES (D)		1773.141	1344.111	802.283
	PROFIT/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		(2234.769)	(2209.296)	(1258.367)
Less/ Add	DEPRECIATION/ AMORTISATION (F)		676.431	590.687	239.455
	PROFIT/ (LOSS) BEFORE TAX (E-F) (G)		(2911.200)	(2799.983)	(1497.822)
Less	TAX (H)		0.117	0.142	0.348
	PROFIT/ (LOSS) AFTER TAX (G-H) (I)		(2911.317)	(2800.125)	(1498.170)
	EARNINGS IN FOREIGN CURRENCY
		FOB value of exports	145.963	20.248	9.423
	TOTAL EARNINGS		145.963	20.248	9.423
	IMPORTS
		Raw Materials	3183.126	2060.485	807.438
		Stores & Spare Parts	0.608	1.445	52.935
		Capital Goods	286.343	871.783	6059.031
	TOTAL IMPORTS		3470.077	2933.713	6919.404
	Earnings/ (Loss) Per Share (Rs.)		(1.33)	(1.32)	(0.74)

Expected Sales (2014-2015) : Rs. 17000.000 Milionis

The above information has been parted by Mr. R L. Gupta

KEY RATIOS

PARTICULARS		31.03.2014	31.03.2013	31.03.2012
PAT / Total Income	(%)	(55.97)	(170.69)	(245.18)
Net Profit Margin (PBT/Sales)	(%)	(56.72)	(171.66)	(246.81)
Return on Total Assets (PBT/Total Assets}	(%)	(6.27)	(13.39)	(6.49)
Return on Investment (ROI) (PBT/Networth)		(0.19)	(0.16)	(0.08)
Debt Equity Ratio (Total Debt /Networth)		5.56	3.28	2.76
Current Ratio (Current Asset/Current Liability)		0.51	0.21	0.31

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	20347.350	21867.350	21867.350
Reserves & Surplus	(1160.188)	(3960.313)	(6871.630)
Net worth	19187.162	17907.037	14995.720
long-term borrowings	52007.591	56491.476	83276.118
Short term borrowings	1031.147	2331.292	145.858
Total borrowings	53038.738	58822.768	83421.976
Debt/Equity ratio	2.764	3.285	5.563

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	606.876	1631.101	5132.219
		168.770	214.648

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	606.876	1631.101	5132.219
Profit	(1498.170)	(2800.125)	(2911.317)
	(246.87%)	(171.67%)	(56.73%)

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	Yes
5]	Type of Business	Yes
6]	Line of Business	Yes
7]	Promoter's background	No
8]	No. of employees	Yes
9]	Name of person contacted	Yes
10]	Designation of contact person	Yes
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	Yes
18]	Major customers	Yes
19]	Payments terms	Yes
20]	Export / Import details (if applicable)	Yes
21]	Market information	----------------------
22]	Litigations that the firm / promoter involved in	----------------------
23]	Banking Details	Yes
24]	Banking facility details	Yes
25]	Conduct of the banking account	----------------------
26]	Buyer visit details	----------------------
27]	Financials, if provided	Yes
28]	Incorporation details, if applicable	Yes
29]	Last accounts filed at ROC	Yes
30]	Major Shareholders, if available	Yes
31]	Date of Birth of Proprietor/Partner/Director, if available	No
32]	PAN of Proprietor/Partner/Director, if available	No
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	Yes

UNSECURED LOAN

(Rs. In Millions)

Particular	As on 31.03.2014	As on 31.03.2013
Short Term Borrowing
Inter Corporate Loan	0.000	100.000
Total	0.000	100.000

CONTINGENT LIABILITIES:

Particulars	31.03.2014 (Rs. in Millions	31.03.2013 (Rs. in Millions
Show cause notice from Central Excise Authorities alleging wrong availment of Cenvat credit	538256	526.409
Bills Discounted with Bank Sales Tax litigation	114.208	24.931
Civil and criminal proceedings pending against the Company, the financial liability thereof, if any, is unascertainable.	46.609	5.399
Income Tax & TDS	1.453	0.000
Right of Recompense of Lenders as per CDR Guidelines	1796.100	0.000
Show Cause Notice from SEBI	10.000	0.000
Civil and criminal proceedings pending against the Company, the financial liability thereof, if any, is unascertainable.

PROPOSED ISSUE OF EQUITY SHARE CAPITAL UNDER PREFERENTIAL ALLOTMENT

During the year the Board of Directors of the Company at its Meeting held on February 6, 2014 and further as approved by the shareholders by a resolution passed by Postal Ballot and as announced on 19th March, 2014, it has been decided to issue equity shares of Rs 10 each (“Equity Shares”) on preferential basis to the promoter of the Company, namely, Electrosteel Castings Limited, aggregating to Rs-2225.000 Millions.

The above issue is as per Corporate Debt Restructuring Package as approved by Corporate Debt Restructuring Empowered Group (CDR EG) on 26-09-13 and the Letter of Approval (LOA) was issued by CDR EG on 28-09-13. The Company has made petition before the Company Law Board for issuance of Shares at a discounted value of Rs-5 per share or such other value as may be sanctioned by the Company Law Board. The petition is pending before the Company Law Board.

OPERATIONS

The Company is setting up a 2.51 MTPA integrated Steel & Ductile Iron (DI) Pipe project, at Siyaljori village, in Bokaro District, in the state of Jharkhand, which is about 22 kms from Bokaro city, a welldeveloped industrial town of Jharkhand, the plant will produce;

The Company has operationalised Blast Furnace (BF #II) of 1050 M3 capacity in addition to Blast Furnace (BF #III) of 350 M3 capacity. Operations of Coke Oven and Sinter Plant are continuing. In addition to Pig Iron, production of Billets and Re-bars are persistent from Steel Melt Shop (SMS) and Rebar Mill. One unit of Captive Power Plant (CPP) of 60 MW based on Waste Heat Recovery Boiler has been commissioned during the year. This would result in the reduction of overall power cost of the plant. Pulverized Coal Injection System has also been commissioned during the reporting period. Lime Calcination Plant has also started operations thereby reducing the dependence on supply from outside. With the operationalization of BF #II, daily production of steel has increased.

Presently The Company is selling TMT Bar, Billets and Pig Iron in the open market. The Company is also tapering

international market and exploring possibilities of export of its products. The Company has already exported few

consignments of Billets and has few export orders in hand.

Construction activities of the balance facilities are in full swing.

Capex Loan of Rs.824 Crs, as reported in the last year's director's report, could not be availed because sanction from one of the banks expired and took inordinate time in renewal.

Ultimately in the Joint Lenders Meeting held in May'13, it was decided by all the lenders that the Company should go for Corporate Debt Restructuring (CDR). Accordingly, flash report was filed by State Bank of India. The Company's CDR Package was approved by CDR EG on 26-09-13 and the Letter of Approval (LOA) was issued by CDR EG on 28-09-13 with additional Term Loan of Rs.13071.000 Millons to complete the Project (Rs.11071.000 Millions) for the Capex and Rs.2000.000 Millions for shoring up of working capital). Rs.11071.000 Millions is assessed considering the undisbursed portion of Capex Loan of Rs.8240.000 Millions required earlier. In addition to the additional loan, CDR EG has allowed some other benefits like:

· Reduction in rate of interest

· Longer Repayment Period

· Conversion of interest on Term Loan into Funded Interest Term Loan

CDR Package was implemented well within the stipulated time frame.

Assessment of Need Based Working Capital of Rs.1300 Crores for FY 2014-15 was also approved under the CDR Package.

The Company has started receiving disbursements of approved additional term loan from Banks for completion of

balance facilities.

The Company has during the year capitalised part of the plant facility comprising of Vertical Coke Oven including

CPCS, Sinter Plant (Unit-I), Steel Melting Shop and Rebar Mill. Accordingly the Pre-Operative Expenses incurred

upto the date of capitalisation have been allocated to the cost of the various facilities on a proportionate basis.

MANAGEMENT'S DISCUSSION AND ANALYSIS

OVERVIEW

The Company is promoted by Electrosteel Castings Limited (ECL) to setup a 2.51 MTPA Greenfield Integrated Steel &Ductile Iron (DI) Pipes project in the district of Bokaro, Jharkhand. Pursuant to group's strategy of focusing on identification of opportunities for backward integration, new DI pipe capacity as well as investment in the steel sector, ECL has been allotted mining blocks of iron ore and coking coal in the state of Jharkhand and has promoted this Company for implementing the integrated steel & DI pipe plant.

ECL, the Promoter of The Company, is a premier manufacturer of Cast Iron pipes for over five decades and DI Pipes since last 20 years. ECL has five manufacturing facilities, three located at Khardah, Basberia and Haldia, all three in the State of West Bengal, one at Elavur in the State of Tamil Nadu and one Coal washery plant at Parbatpur in the State of Jharkhand.

The plant will produce 1.45 MTPA of long steel products, comprising 0.60 MTPA wire rods and 0.85 MTPA of reinforcement bars in straight lengths, bundles and plain rounds. The plant will have a 0.33 MTPA DI pipe production facility in the same complex and will be provided with hot metal from the Blast Furnaces. The plant will

also have production facilities for 0.33 MTPA of Commercial Billets and 0.40 MTPA of Pig Iron.

The Company will be manufacturing basically the long steels which will be used as construction steel along with

intermediary products like commercial billets and pig iron. The Company will also produce DI Pipes.

The Company has acquired approximately 2,200 acres of land for the proposed plant, taking into account the scope for future expansion.

The Company has operationalised Blast Furnace (BF #II) of 1050 M3 capacity in addition to Blast Furnace (BF #III) of 350 M3 capacity. Operations of Coke Oven and Sinter Plant are continuing. In addition to Pig Iron, production of Billets and Re-bars are persistent from Steel Melt Shop (SMS) and Rebar Mill. One unit of Captive Power Plant (CPP) of 60 MW based on Waste Heat Recovery Boiler has been commissioned during the year. This would result in the reduction of overall power cost of the plant. Pulverized Coal Injection System has also been commissioned during the reporting period. Lime Calcination Plant has also started operations thereby reducing the dependence on supply from outside. With the operationalization of BF #II, daily production of steel has increased.

Presently The Company is selling TMT Bar, Billets and Pig Iron in the open market. The Company is also tapering international market and exploring possibilities of export of its products. The Company has already exported few consignments of Billets and has few export orders in hand. Construction activities of the balance facilities are in full swing.

Capex Loan of Rs.8240.000 Millions, as reported in the last report, could not be availed because sanction from one of the banks expired and took inordinate time in renewal.

Ultimately in the Joint Lenders Meeting held in May'13, it was decided by all the lenders that the Company should go for Corporate Debt Restructuring (CDR). Accordingly, flash report was filed by State Bank of India. The Company's CDR Package was approved by CDR EG on 26-09-13 and the Letter of Approval (LOA) was issued by CDR EG on 28- 09-13 with additional Term Loan of Rs.13071.000 Millions to complete the Project (Rs.11071.000 Millions for the Capex and Rs. 2000.000 Millions for shoring up of working capital). Rs.11071.000 Millions is assessed considering the undisbursed portion of Capex Loan of Rs. 8240.000 India required earlier.In addition to the additional loan, CDR EG has allowed some other benefits like:

· Reduction in rate of interest

· Longer Repayment Period

· Conversion of interest on Term Loan into Funded Interest Term Loan

· CDR Package was implemented well within the stipulated time frame.

Assessment of Need Based Working Capital of Rs.1300 Crores for FY 2014-15 was also approved under the CDR Package.

The Company has started receiving disbursement of approved additional term loan from Banks for completion of

balance facilities.

Units under operation:

– Vertical Coke Oven

– 350 m3 Blast Furnace

– 1050 m3 Blast Furnace

– Pig Casting Machine

– Sinter Plant

– Rebar Mill

– Water Supply System

– Steel Melting Shop

– 220 KV sub station& 33 KV distribution

– One unit of Power Plant (60 MW) based on WHR

– Lime Calcination Plant

– Pulverised Coal Injection System

ECONOMICS OVERVIEW

Chairman of worldsteel Economics Committee, Mr. Hans Jürgen Kerkhoff said “In 2013 world steel demand grew higher than our previous forecasts due to a stronger than expected performance in the developed world in the second half of the year. In particular, the recovery in the United States gained strength. In addition the downturn in the EU bottomed out and we now expect that steel demand in the Eurozone will move into positive growth in 2014. On the other hand, many emerging economies continue to struggle with structural issues and financial market volatility. This, along with China's deceleration, is the reason for our slightly lower global growth rate forecast for 2014. In 2015, growth in most parts of the world will accelerate thanks to a continuing steady recovery in the developed economies and an improvement in the situation for the emerging economies. But China's steel demand will further decelerate and this will prevent the broad recovery momentum from registering a higher global growth rate for 2015.

The continued closure of older, higher-cost steelmaking capacity and increased demand growth should lead to improved profitability for the sector in 2014 and 2015, driven by better utilization rates. The closure of inefficient capacity will require the sector to avoid political interference with commercially rational decisions.

The world economy is expected to have grown by 3.1% in 2014 and grow 3.3% in 2015. This growth is primarily driven by the revival of US and European economies, but further growth will be checked by the decelerated growth of the Chinese steel demand. In short, the global steel demand recovery continues but growth is stabilising at a lower rate with continued volatility and uncertainty leading to a challenging environment for steel companies.”

INDUSTRY STRUCTURE

The Indian steel industry is broadly classified into two groups: Primary steel producers & Secondary steel producers. Primary steel producers have backward integration & normally have a higher capacity over 1.0 MTPA. The manufacturing process starts with steel making from Iron ore. The investment needed is also much higher as

compared to secondary producers.

Secondary producers essentially have mini steel plants with capacities below 1.0 MTPA. This category mainly employs Electric Arc Furnace (EAF) or Induction Furnace (IF) route, which use scrap and sponge iron or a mix of both as raw materials to produce steel. This group also consists of processors and re-rollers of steel products. Secondary producers primarily manufacture long products and the route adopted by them is highly energy intensive for which they have to depend upon the purchased power.

Although, there are over 3,500 varieties of regular and special steel available, steel products can be broadly classified into two basic types according to their shape viz. flats and longs. All finished steel products are made from semifinished steel that comes in the form of slabs, billets and blooms.

GLOBAL STEEL INDUSTRY

The World Steel Association (worldsteel) released its Short Range Outlook (SRO) apparent steel consumption for

2014 and 2015 at its annual meeting held this year in Sao Paulo, Brazil.

According to the forecast made in October and April each year by worldsteel's Economic Committee global apparent steel use will increase by 3.1% to 1527 Mt in 2014 following growth of 3.6% in 2013. In 2015, it is forecast that world steel demand will grow further by 3.6% and to reach 1576 Mt.

Worldsteel Economics Committee chairman, Hans Jürgen Kerkhoff said: “The key risks in the global economy – the eurozone crisis and a hard landing for the Chinese economy - which we identified in our last SRO issued in April, have continued to stabilise through the past six months. Our underlying assumption remains that the US will resolve its fiscal constraint soon. The correction in the eurozone has been more severe than forecasted in April but the improvement seen recently is now expected to continue for the rest of 2015. Major emerging economies, particularly India and Brazil, have not performed as hoped mainly due to key structural issues. These factors have led to a lower steel demand performance than predicted across the world, with China being the one exception. Steel demand in 2014 is now forecasted to grow in China by 3.0%.

INDIAN STEEL INDUSTRY

The Indian steel sector was the first core sector to be completely freed from the licensing regime and pricing and distribution controls. This was done primarily because of the inherent strengths and capabilities demonstrated by the Indian iron and steel industry. The economic reforms and the consequent liberalization of the iron and steel sector which started in the early 1990s resulted in substantial growth in the steel industry and green field steel plants were set up in the private sector.

India ranked as the fourth largest producer of crude steel in the world after China, Japan and the USA during 2011 and is also expected to maintain this position, based on January-November, 2012 data as released by the World Steel Association.

In India, steel demand is expected to grow by 3.3% to 76.2 Mt in 2014, following 1.8% growth in 2013, due to an improved outlook for the construction and manufacturing sectors, even though this will be constrained by high inflation and structural problems. Despite uncertainties relating to the impact of upcoming elections steel demand is projected to grow by 4.5% in 2015 supported by the expectation that structural reforms will be implemented.

The rising middle-class population, along with increased urbanization, will increase steel intensity in the economy.

According to the report of the working group on steel industry for the 12th FYP, the Indian urban population is expected to increase to 600 million by 2030 from the current level of 400 million. The rising middle-class urban population boosts demand for automobiles, white goods and other consumer durables leading to higher per capita

steel consumption. Indian steel consumption growth has an elasticity of about 1.1 to growth in GDP.46 In other words, if the Indian economy grows at 7% per year, steel demand is likely to grow by 7.7% during the same time, from the current 68 million tonnes to around 132 million tonnes by 2020.

In line with GDP growth, Indian steel demand has immense opportunities to grow across sectors in the mid- to long term. The rapid rise in production over the last few years has resulted in India becoming the fourth largest producer of crude steel and the largest producer of sponge iron or direct-reduced iron (DRI) in the world. The country has the opportunity of becoming the second largest producer of steel by 2015, and per capita consumption of steel in India, which is only 55kg (2011) - significantly lower than the global average, suggests potential to close the gap in future.

Currently, per capita rural consumption in India stands at around 13kg. This is significantly lower than urban per capita consumption. Projects like Bharat Nirman and Rajiv Gandhi AwaasYojana have led to increased demand for construction steel like thermo-mechanically treated (TMT) bars and galvanized plain and corrugated (GP/GC) sheets, but there remains a significant opportunity to grow rural steel demand by widening the distribution network and by providing customized solutions catering to the needs of 70% of the population.

Some Highlights :-

· 222 Memorandum of Understandings (MOU) have been signed with various states for planned capacity of around 276 million tonnes by 2019-20.

· Investments at stake are to the tune of $187 billion in the Steel sector.

· Demand for steel in the major industries like infrastructure, construction, housing, automotive, steel tubes and pipes, consumer durables, packaging and ground transportation.

· Target for $ 1 trillion of investments in infrastructure during the 12th Five Year Plan.

· Infrastructure projects (like Golden Quadrilateral and Dedicated Freight Corridor) will give boost to the demand in the steel sector in near future.

· Projected New Greenfield & up-gradation of existing Airport shall keep the momentum up.

· Increased demand of specialized steel in hi-tech engineering industries such as power generation, automotive petrochemicals, fertilizers etc.

FINANCIAL PERFORMANCES

Since the project is under implementation (i.e., a part of the entire facility) had commenced its operation and started to produce Pig iron, TMT Bars and Billets. The Company had only recorded the net turnover of Rs 5132.219 Millions in the year ended 2014. After the adjustment of other expenditures, the earnings before Interest, depreciation, taxation and amortization is Rs (461.629) Millions, The Profit after Tax for the year 2014 is Rs. (2911.317) Millions.

INDEX OF CHARGES

S.No.	Charge ID	Date of Charge Creation/Modification	Charge amount secured	Charge Holder	Address	Service Request Number (SRN)
1	10493325	21/04/2014 *	195,400,000.00	IL AND FS TRUST COMPANY LIMITED	CONSTANTIA, 3RD FLOOR,, 11, DR. U. N. BRAHMACHARI  STREET, KOLKATA, WEST BENGAL - 700017, INDIA	C06624084
2	10487072	17/04/2014 *	2,458,300,000.00	IL AND FS TRUST COMPANY LIMITED SECURITY TRUSTEE FOR HUDCO	IL AND FS TRUST COMPANY LTD SECURITY TRUSTEE FOR HUDCO  , CONSTANTIA,11, DR. U. N. BRAHMACHARI STREET, KO  LKATA, WEST BENGAL - 700017, INDIA	C03425733
3	10484687	17/04/2014 *	95,342,500,000.00	IL AND FS TRUST CO LTD SECURITYTRUSTEE FOR 27 CDRLENDERS	IL AND FS TRUST CO LTD SECURITYTRUSTEE FOR27CDRLENDERS  , CONSTANTIA, 11, DR. U. N. BRAHMACHARI STREET, K  OLKATA, WEST BENGAL - 700017, INDIA	C03425410
4	10324558	26/12/2011	5,000,000,000.00	SREI INFRASTRUCTURE FINANCE LIMITED	VISHWAKARMA,86C,TOPSIA ROAD (SOUTH),, KOLKATA, WES  T BENGAL - 700046, INDIA	B28352359
5	10261324	30/03/2013 *	8,650,000,000.00	STATE BANK OF INDIA	RELIANCE HOUSE, 34 J L NEHRU ROAD, KOLKATA, WEST  BENGAL - 700071, INDIA	B71995393
6	10066956	26/03/2013 *	85,120,000,000.00	IL AND FS TRUST COMPANY LIMITED	IL AND FS FINANCIAL CENTREPLOT NO C22 G BLOCK BANDRA  , KURLA COMPLEX BANDRA EAST, MUMBAI, MAHARASHTRA  - 400051, INDIA	B71845192

* Date of charge modification

FIXED ASSETS

· Freehold Land

· Leasehold Land

· Buildings

· Plant and Equipment

· Furniture and Fixtures

· Vehicles

· Office Equipment

· Railway Sidings

· Computer Software

AUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED JUNE 30, 2014

(Rs. In Millions)

Particulars		Three months ended	Three months ended	Six Months Ended
		31.09.2014	31.06.2014	30.09.2014
		Unaudited	Unaudited	Unaudited
1	Income from Operations
	(a) Net sates/income from operations (Net of excise duty)	4323.413	3285.445	7608.858
	(b) Other Operating Income	156.238	155.853	312.091
	Total income from operations (net)	4479.651	3441.298	7920.949
2	Expenses
	(a) Cost of materials consumed	3517.879	2731.091	6248.970
	(b) Purchases of stock-in trade	45.341	117.054	162.395
	(c) Purchases of stock-in trade
	(d) Changes in inventories of finished goods. work-in-progress and stock in trade	(814.667)	(384.425)	(1199.092)
	(e) Employee benefits expense	104.887	92.789	197.676
	(f) Depreciation and Anmortisation Expenses	508.005	502.043	1010.048
	(g) Other Expenses (Any item exceeding 10% of total expenses relating to continuing operations to be shown separately)	1029.586	817.693	1847.270
	Total expenses	4391.031	3876245	8267.276
3	Profit/ (Loss) from operations before other Income, finance costs and exceptional Items (1-2)	88.620	(434.947)	(346.327)
4	Other Income	74.992	21.896	96.888
5	Profit/ (Loss) from operations before other income, finance costs and exceptional items (3+4)	163.612	(413.051)	(249.439)
6	Finance Costs	1150.683	1040.726	2191.409
7	Profit/ (Loss) from ordinary activities after finance cost but before exceptional items (5-6)	(987.071)	(1453.777)	(2440.848)
8	Exceptional items	---	---	---
9	Profit/ (Loss) from ordinary activities before tax (7+8)	(987.071)	(1453.777)	(2440.848)
10	Tax expenses	---	--	---
11	Net Profit / (Loss) from ordinary activities after tax (9-10)	(987.071)	(1453.777)	(2440.848)
12	Extraordinary item (net of tax expense)	--	---	----
13	Net Profit / (Loss) for the period (11-12)	(987.071)	(1453.777)	(2440.848)
14	Share of profit' (loss) of associates	NA	NA	NA
15	Minority Interest	NA	NA	NA
16	Net Profit/ (Loss) after taxes, minority interest and share of profit/(loss) of associates (13+14+15)	(987.071)	(1453.777)	(2440.848)
17	Paid up equity share capital (Face Value of Rs10/- each)	24092.350	21867.350	24092.350
18	Reserve excluding Revaluation Reserve as per Balance Sheet of previous accounting year	---	--	---
19.i	Earnings per share (before extraordinary items) of Rs.10/- each (not annualised):
	(a) Basic	(0.41)	(0.66)	(1.01)
	(b) Diluted	(0.41)	(0.66)	(1.01)
19.ii	Earnings per share (after extraordinary items) of Rs.10/- each (not annualised)
	(a) Basic	(0.41)	(0.66)	(1.01)
	(b) Diluted	(0.41)	(0.66)	(1.01)
A	PARTICULARS OF SHAREHOLDING
1	Public Shareholding
	- Number of shares	1319435023	1319435023	1319435023
	- Percentage of shareholding	54.77%	60.34%	54.77%
2	Promoters and Promoter group shareholding
	a) Pledged / Encumbered
	- Number of shares	866750000	866750000	866750000
	- Percentage of shares (as a % of the total shareholding of Promoter & Promoter group)	79.53%	99.94%	79.53%
	- Percentage of shares (as a % of the total Share Capital of the Company)	35.98%	39.64%	35.98%
	b) Non Encumbered
	- Number of shares	223050000	550000	223050000
	- Percentage of shares (as a % of the total shareholding of Promoter & Promoter group)	20.47%	0.06%	20.47%
	- Percentage of shares (as a % of the total Share Capital of the Company)	9.26%	0.02%	9.26%
B	INVESTOR COMPLAINTS
	Pending at the beginning of the quarter			NIL
	Received during the quarter			30
	Disposed off during the quarter			30
	Remaining unresolved at the end of the quarter			NIL

STATEMENT OF ASSETS AND LIABILITIES

(Rs. In Millions)

Particulars		As at Current half year ended 30.09.2014
	Particulars
A	EQUITY AND LIABILITIES
1	Shareholder’s Funds
	a) Share Capital	24092.350
	b) Reserves & Surplus	(9364.382)
	c) Money received against share warrants	-----
	Sub Total- Shareholders funds	14727.968
2	Share application money pending allotment	-------
3	Minority Interest
4	Non-current liabilities
	(a) Long term borrowings	88612.138
	(b) Other long term liabilities	6.947
	fc) Long term provisions	29.784
	Sub Total- Non Current Liabilities	88648.849
5	Current liabilities
	(a) Short term borrowings	2344.430
	(b) Trade Payables	4326.939
	(c) Other current liabilities	10253.913
	(d) Short term provisions	8.288
	Sub Total- Current Liabilities	16933.570
	TOTAL-EQUITY AND LIABILITIES	120310.387
B	ASSETS
1	Non-current assets
	(a) Fixed assets
	(i) Tangible assets	47466.444
	(ii) Intangible Assets	6.271
	(iii) Capital work-in-progress	61633.594
	(b) Long term loans and advances	1481.231
	Sub-Total- Non current assets	110587.540
2	Current assets
	a) Current Investments	--
	b) Inventories	4825.033
	c) Trade Receivables	1097.996
	d) Cash and cash equivalents	578.703
	(e) Short term loans and advances	3186.599
	(f) Other current assets	34.516
	Sub-Total- current assets	9722.847
	TOTAL ASSETS	120310.387

AS PER WEBSITE

PRESS RELEASES

ELECTROSTEEL CASTINGS & ITS ARM FALL 13-20% ON CBI PROBE

Shares of  Electrosteel Castings  tanked 20 percent and its subsidiary  Electrosteel Steels  fell 13.3 percent intraday Monday after a media report suggested that the Central Bureau of Investigation (CBI) registered a case against both companies. The report said the case is for alleged criminal conspiracy and cheating in acquiring a coal block mine in Jharkhand, said the report. The case pertains to the Parbatpur block in Bokaro, Jharkhand, which was allocated to Kolkata-based Electrosteel Castings for its pig iron facilities in Kolkata and Andhra Pradesh, it added. Electrosteel Steel has an integrated steel plant at Siyaljori village in Bokaro district. Electrosteel Castings is the owner and also the largest shareholder, with about 50 per cent equity holding, in Electrosteel Steel. "The agency has conducted searches at five locations including Bokaro, Ranchi and Kolkata," said the report. At 09:48 hours IST, the scrip of Electrosteel Castings was quoting at Rs 16.35, down 13.03 percent and Electrosteel Steels quoting at Rs 4.20, down 10.06 percent on the Bombay Stock Exchange.

ELECTROSTEEL STEELS BETTING ON CHINESE-MADE PLANT

Mar 12, 2013

With most companies in the domestic steel sector struggling amid rising debts, slowing demand and scarce raw materials, saving Rs 4,250 crore in the setting up of a new steel plant is significant. Equally important is completing the construction of the plant and commissioning it within five years, especially when big names in the sector have nothing to show for projects they signed in 2005.

Interestingly, there is a ‘foreign hand’ in this twin achievements of Kolkata-based Electrosteel Castings Group, whose unit Electrosteel Steels is operating a new plant in Bokaro, the industrial district of Jharkhand. The company roped in Chinese steel major Laiwu Steel Group to construct the plant and maintain it till production is ramped up to capacity (this could take up to two years). Ninety-five percent of the equipment was imported from China. The steel plant is not just the first in India to be built entirely with Chinese collaboration, but also probably the first to be constructed by a Chinese workforce—almost 2,000 Chinese workers built it. The plant has a capacity of 2.5 million tonnes a year. “We will add another million tonnes of capacity,” says AV Shah, chief sales and marketing officer, Electrosteel Steels. 

“Traditionally, Indian steel companies have relied on German suppliers for equipment and technology to set up plants. Had we followed the same route, the equipment alone would have cost us at least 30 percent more,” Shah says. The Chinese are also known for “fast execution of projects”. “If not for almost a year that we lost because of the work being held up, we would have completed the project much earlier,” he says. Work had been stalled due to “visa problems” faced by the Chinese workers.

Not far from the Electrosteel plant is the site of the proposed mega project of ArcelorMittal, the world’s largest steelmaker. Though the company signed an agreement in 2005 with the local government to set up the plant, the project is facing delays in acquiring land. Shah says that although Electrosteel acquired about 2,000 acres for its project, the plant needs less than 700 acres, which is less than what a plant usually needs. 

“Indian steelmakers have been sourcing equipment from China for sometime now,” says AS Firoz, chief economist, Joint Plant Committee, a research body set up under the ministry of steel. But the purchase—made to reduce the overall debt burden—has been limited to a blast furnace or a sinter, and not a complete plant. “Although we appreciate the lower capex per tonne, benefits will be known once the plant is fully operational,” wrote Bhavesh Chauhan and Vinay Rachh of Angel Broking in a note in late 2012. Right now, only one of the three blast furnaces is fully operational. 

This could well be the litmus test for Electrosteel and its Chinese partner. As experience from the power sector has shown—rising use of Chinese equipment was marred by complaints of faults—all eyes will be focussed on this Bokaro plant until all its units function at full capacity.

BANKS, ELECTROSTEEL IN TALKS TO TIE UP FUNDS FOR STEEL PROJECT

 Mumbai, February 24, 2013

A State Bank of India-led lender group is in talks with Kolkata-based Electrosteel Steels Limited (ESL) to tie up funds for its steel project in Jharkhand which has seen delay in commissioning of its operations.

ESL saw a delay in commencement of commercial operations and was hit by cost escalation. The company has a 2.51 million-tonne integrated steel and ductile iron pipe project and a 120 Mw captive power plant, at Bokaro, Jharkhand. Net loss more than doubled to Rs 1580.000 Millions in April-December 2012 as against Rs 730.000 Millions in April-December 2011.

Binod Khaitan, chairman of ESL, said the steel industry was passing through a phase of slowing demand and a rise in costs. This new project got into a problem due to delay in commencement of operations. Beside SBI, the other bankers to the company are Bank of India, Bank of Baroda, Allahabad Bank and Central Bank of India.

The lenders have exposure for a little over Rs 75000.000 Millions.

A senior bank official said this is not a restructuring, involving a rate cut or payment holiday. It involves a fresh line of credit, he said. The project remains viable. SBI’s exposure to the iron and steel sector was Rs 565310.000 Millions at the end of December 2012. The country’s largest lender has restructured loans worth Rs 52670.000 Millions given to steel companies. Its gross non-performing assets in iron and steel units were Rs 35660.000 Millions.

In August 2012, CARE Ratings had downgraded ESLfrom ‘BBB’ to ‘BB-’. ESL revised the project capacity to 2.51 million tonnes annually from 2.2 mtpa and decided on an operational revamp to achieve better efficiency. Hence, the project cost rose by Rs 22000.000 Millions to Rs 95620.000 Millions. The cost overrun due to delay in project commissioning added to the rise in outlay, said CARE.

It is to part-fund the cost increase by securitising future receivables originating from the DI pipes and pig iron division. Khaitan said ESL’s promoter company, Electrosteel Castings, had also infused capital in the company.

CRISIL DOWNGRADES ELECTROSTEEL CASTINGS ON ASSOCIATE’S WOES

KOLKATA, AUG. 23:  

Crisil Research has revised its rating of Electrosteel Castings Limited (ECL) equity to ‘moderate’ grade from ‘good’.

The rating agency on Friday said the stock has been downgraded for the financial stress faced by its associate Electrosteel Steels Limited (ESL) and the delay in getting approval for its iron ore mine.

Mohit Modi, Director of Crisil Equity Research, told Business Line that the revised grade indicated that the company’s fundamentals are ‘moderate’ relative to other listed equity securities.

“We have also revised the fair value (of the stock) from Rs. 45 a share to Rs. 25 a share. At the current market price of Rs. 10 per share, our valuation grade is 5/5 indicating that the market price has strong upside from the current levels,” Crisil said in a note.

Angel Broking analyst Bhavesh Chauhan also maintained his “positive stance” on the company’s steel making project through its associate ESL. “The company’s backward integration initiatives through the allocation of iron ore and coking coal mines are expected to result in cost savings from FY2014-15. “We maintain our buy view on the stock with a target price of Rs. 15,” he said in a recent report.

STABILISATION WOE

Along with cost overruns and execution delays, the ESL project is facing project stabilisation difficulty, Crisil noted.

“Saddled with a huge debt of Rs. 69500.000 Milions and debt-to-equity ratio of 4x (as on March 31), ESL approached lenders in May for restructuring its debt (CDR),” Crisil noted.

ECL has given a corporate guarantee of Rs. 4500.000 Millions for ESL loans. ECL’s captive iron ore mine received the stage I clearance in January 2012. However, the final clearance is still pending. Crisil and Angel felt that this eluded significant benefit both the companies.

ECL’s strong thrust on ductile iron (DI) exports (56 per cent of sales in FY13) has enabled it to maintain plant utilisation level at 100 per cent despite overcapacity in the industry.

Going ahead, Crisil expected that demand for DI pipes to grow at a CAGR (compound annual growth rate) of 15-17 per cent during the 12th Plan period due to 73 per cent higher allocation for water infrastructure.

The Re 1 ECL stock on Friday closed nearly three per cent higher at Rs. 10.85, on the NSE.

CMT REPORT (Corruption, Money Laundering & Terrorism]

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

1] INFORMATION ON DESIGNATED PARTY

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

2] Court Declaration :

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

3] Asset Declaration :

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

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

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

Charges or investigation registered against subject: None

7] Criminal Records

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

8] Affiliation with Government :

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

9] Compensation Package :

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

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

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

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

CONTRAVENTION

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

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs. 62.14
UK Pound	1	Rs. 95.78
Euro	1	Rs. 71.05

INFORMATION DETAILS

Information Gathered by :	SVA
Analysis Done by :	SUB
Report Prepared by :	TRU

SCORE & RATING EXPLANATIONS

sSCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	4
--PROFITABILIRY	1~10	3
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	3
--CREDIT LINES	1~10	3
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		30

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
--	NB	New Business	--

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.