MIRA INFORM REPORT

Report No. :	300957
Report Date :	10.01.2015

IDENTIFICATION DETAILS

Name :	TULSYAN NEC LIMITED
Registered Office :	61, Sembudoss Street, 1^st Floor, Chennai – 600 001, Tamilnadu
Country :	India
Financials (as on) :	31.03.2014
Date of Incorporation :	11.04.1947
Com. Reg. No.:	18-007437
Capital Investment / Paid-up Capital :	Rs. 220.546 Millions
CIN No.: [Company Identification No.]	L28920TN1947PLC007437
TAN No.: [Tax Deduction & Collection Account No.]	BLRT04262G
PAN No.: [Permanent Account No.]	AABCT3720E
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Subject is engaged in the manufacturing TMT bars, Coal Based Power Plant and Synthetics Woven Fabrics and Sacks.
No. of Employees :	1711 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

B (28)

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

Maximum Credit Limit :	USD 4100000
Status :	Moderate
Payment Behaviour :	Slow but correct
Litigation :	Clear
Comments :	Subject is an established company having moderate track record. The rating is constrained on account of heavy loss incurred by the company during FY 2014. However, trade relations are reported as fair. Business is active. Payment terms are reported to be slow but correct. The company can be considered for business dealing with some caution.

NOTES:

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

ECGC Country Risk Classification List – September 30, 2014

Country Name	Previous Rating (30.06.2014)	Current Rating (30.09.2014)
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

Not Available

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.

LOCATIONS

Registered Office :	61, Sembudoss Street, 1^st Floor, Chennai – 600 001, Tamilnadu, India
Tel. No.:	91-44-25222673/ 25223918/ 25221060/ 25222676
Fax No.:	91-44-39181076
E-Mail :	tulsyannecltf@vsnl.net investor@tulsyannec.com tulsyannec@gmail.com
Website :	www.tulsyannec.co.in
Corporate Office :	Apex Plaza, 1^st Floor, Old No. 3, New No. 77, Nungambakkam High Road, Chennai - 600 034, Tamilnadu, India
Tel. No.:	91-44-39181060 / 39120756 / 39181097
Fax No.:	91-44-39181097
Email :	tulsyannec@gmail.com investor@tulsyannec.co.in
Website :	www.tulsyannec.co.in
Administrative Office :	37, Kaveriappa Layout, Miller Tank Bund Road, Vasanth Nagar, Bangalore - 560 052, Karnataka, India
Power Plant:	17, Sithurnatham Village, Gummidipoondi-601201,Tamilnadu, India
Steel Division :	· 39, Dr. Harikrishna Naidu Street, Ambattur, Chennai - 600 053, Tamilnadu, India · D-4, SIPCOT Industrial Complex, Gummudipoondi, Chengalpet District - 601201, Tamilnadu, India
Depot :	55/2, Cuddalore Main Road, Ariyankuppam, Pondichery – 605 007, India
Windmill :	· Kudimangalam, Udumalapet, Tamilnadu, India · Pazhavoor, Tirunelveli District, Tamilnadu, India · Kavalakiurichi, Tirunelveli District, Tamilnadu, India
Synthetic Division :	· 7-A, Doddaballapura Industrial Area, Kasba Hobli, Karnataka, India · Plot No.E-4, Madkaim Industrial Area, Madkain Village, Ponda Taluk, Goa, India · Survey No.237 to 245, Boincheruvupalli Village, Peapully Mandal, Kurnool District – 518 220, Andhra Pradesh, India

DIRECTORS

As on 31.03.2014

Name :	Mr. Lalit Kumar Tulsyan
Designation :	Executive Chairman
Date of Birth/Age :	18.02.1960
Qualification :	B.Com
Date of Appointment :	12.07.1994
Other Directorship :	Tulsyan NEC Limited Tulsyan Smelters Private Limited Cosmic Global Limited Tulsyan Power Limited Balaji Engineering and Galvanizing Limited Chithrakoot Steel and Power Private Limited Buildmet Fibers Private Limited The Plastic Export Promotion Council
Name :	Mr. Sanjay Tulsyan
Designation :	Managing Director
Date of Appointment :	01.10.1996
Name :	Mr. P.T. Rangamani
Designation :	Director
Date of Birth/Age :	26.08.1934
Qualification :	F.C.S., B.L.
Date of Appointment :	30.03.1994
Name :	Mr. A.P. Venkateshwaran
Designation :	Whole Time Director
Date of Appointment :	09.01.2004
Name :	Mr. Selvaganapathy Ramakrishnan
Designation :	Director
Qualification :	B.Com.
Date of Birth/Age :	15.07.1954
Date of Appointment :	31.03.2005
Other Directorship :	Buildmet Fibers Private Limited Shakthi Kiran Foods Private Limited Food Creations Private Limited Transpac Asia Private Limited Indian Flexible Intermediate Bulk Container Association Tulsyan NEC Limited
Name :	Mr. Sanjay Agarwalla
Designation :	Whole –Time Director
Date of Appointment :	27.04.2006
Name :	Mr. Venkatachalam Kirubanandan
Designation :	Director
Date of Birth/ Age :	30.04.1948
Qualification:	B.E., M. Tech., M.B.A.
Date of Appointment :	27.04.2006
Name :	Mr. C. Ramachandran
Designation :	Director
Date of Birth/ Age :	15.05.1938
Qualification:	I.A.S
Date of Appointment :	12.12.2007
Other Directorship :	Tamilnadu Petroproducts Limited Elnet Technologies Limited IG3 Infra Limited Elnet Software City Limited Grand Luxe Hotels Limited The Great Indian Linen and Textile Infrastructure Company Private Limited Appu Hotels Limited Taulsyan NEC Limited

KEY EXECUTIVES

Name :	Mr. CS Giridhar
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.09.2014

Names of Category	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	10861915	72.41
Sub Total	10861915	72.41
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	10861915	72.41
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	2000	0.01
Sub Total	2000	0.01
(2) Non-Institutions
Bodies Corporate	726650	4.84
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 Millions	1788279	11.92
Individual shareholders holding nominal share capital in excess of Rs. 0.100 Millions	1268895	8.46
Any Others (Specify)	352261	2.35
Hindu Undivided Families	255349	1.70
Non-Resident Indians	96117	0.64
Clearing Members	795	0.01
Sub Total	4136085	27.57
Total Public shareholding (B)	4138085	27.59
Total (A)+(B)	15000000	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	0	0.00
(1) Promoter and Promoter Group	0	0.00
(2) Public	0	0.00
Sub Total	0	0.00
Total (A)+(B)+(C)	15000000	100.000

BUSINESS DETAILS

Line of Business :	Subject is engaged in the manufacturing TMT bars, Coal Based Power Plant and Synthetics Woven Fabrics and Sacks.
Products :	TMT bars Coal Based Power Plant Synthetics Woven Fabrics Sacks.
Brand Names :	Not Available
Agencies Held :	Not Available
Exports :	Not Available
Imports :	Not Available
Terms :	Not Available

GENERAL INFORMATION

Suppliers :

Reference :	Not Available
Name of the Person :	Not Available
Contact No.:	Not Available
Since How Long Known :	Not Available
Maximum Limit Dealt :	Not Available
Experience :	Not Available
Remark:	Not Available

Customers :

Reference :	Not Available
Name of the Person :	Not Available
Contact No.:	Not Available
Since How Long Known :	Not Available
Maximum Limit Dealt :	Not Available
Experience :	Not Available
Remark:	Not Available

No. of Employees :

1711 (Approximately)

Bankers :

· Canara Bank

· Syndicate Bank

· Andhra Bank

· State Bank of India

· IDBI Bank Limited

· Indian Overseas Bank

· Shamrao Vithal Co-operative Bank

Facilities :

(Rs. In Millions)

Secured Loan		As on 31.03.2014	As on 31.03.2013
LONG TERM BORROWINGS
Term Loan from Banks:
Andhra Bank		707.491	667.324
Canara Bank		963.337	929.103
Syndicate Bank		397.022	414.451
State Bank of India		5.815	7.388
State Bank of India (Wind Mill)		0.000	1.950
Indian Overseas Bank		755.567	707.780
Shamrao Vithal Co-operative Bank Limited		165.097	190.021
From Financial Institutions:
Industrial Development Bank of India		15.355	104.648
Others:
Tata Capital		8.508	16.531
Electronica Finance Limited		6.665	5.571
Current Component on Long term Borrowings		(344.527)	(157.040)
Vehicles Loans		9.653	10.095
SHORT-TERM BORROWINGS
Canara Bank		815.246	759.967
Syndicate Bank		435.796	431.211
State Bank of India		538.169	331.809
Andhra Bank		125.697	132.313
IDBI Bank Limited		200.820	151.923
Indian Overseas Bank		302.287	319.036
Current Component of Long Term Borrowings		351.451	164.184
Total		5459.448	5230.359
	Notes: Against hypothecation of book debts, inventories and second charge on fixed assets of the Company. Secured by first charge on fixed assets on above loan. First Charge on Wind Mill. In addition, the above loans are also guaranteed by the Directors. Secured by first charge on balance of fixed assets of the Company. In addition, the above loans are also guaranteed by Directors. Repayable in 27 quarterly instalments.

Banking Relations :	---
Auditors :
Name :	C.A. Patel and Patel Chartered Accountants
Address :	Chennai, Tamilnadu, India
Memberships :	Not Available
Collaborators :	Not Available
Subsidiary :	Cosmic Global Limited Chitrakoot Steel and Power Private Limited Tulsyan Power Limited Balaji Engineering and Galvanizing Limited Color Peppers Media Private Limited T G Logistics Private Limited
Associate :	Tulsyan Smelters Private Limited

CAPITAL STRUCTURE

As on 31.03.2014

Authorised Capital :

No. of Shares	Type	Value	Amount
16000000	Equity Shares	Rs.10/- each	Rs.160.000 Millions
20000000	6% Non-Cumulative Redeemable Preference Shares	Rs. 10/-each	Rs. 200.000 Millions
	Total		Rs. 360.000 Millions

Issued, Subscribed & Paid-up Capital:

No. of Shares	Type	Value	Amount
14457382	Equity Shares	Rs.10/- each	Rs.144.574 Millions
246397	Equity Shares	Rs. 6/- each	Rs.1.478 Millions
296221	Equity Shares	Rs. 3/- each	Rs.0.889 Million
7360500	6% Non-Cumulative Redeemable Preference Shares	Rs. 10/- each	Rs. 73.605 Millions
	Total		Rs. 220.546 Millions

Shareholders Holding More than 5% of the Share Capital

Name of the Shareholders	No of Share
Lalitkumar Tulsyan	4151305
Sanjay Tulsyan	4475481
Priya Tulsyan	954982
Alka	751130

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	220.546	146.938	108.700
(b) Reserves & Surplus	1230.258	1178.449	1061.854
(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)	1450.804	1325.387	1170.554
(3) Non-Current Liabilities
(a) long-term borrowings	2689.982	2897.822	2054.211
(b) Deferred tax liabilities (Net)	359.873	141.814	139.275
(c) Other long term liabilities	1196.492	1314.419	595.019
(d) long-term provisions	76.607	66.841	66.841
Total Non-current Liabilities (3)	4322.954	4420.896	2855.346
(4) Current Liabilities
(a) Short term borrowings	2769.466	2290.443	1827.318
(b) Trade payables	3432.427	2718.064	2429.172
(c) Other current liabilities	6.174	16.120	31.808
(d) Short-term provisions	159.714	136.669	148.287
Total Current Liabilities (4)	6367.781	5203.390	4436.585
TOTAL	12141.539	10949.673	8462.485
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	3343.120	980.759	1030.278
(ii) Intangible Assets	0.000	0.000	0.000
(iii) Capital work-in-progress	2208.835	3939.543	2193.275
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	90.736	90.736	90.736
(c) Deferred tax assets (net)	0.000	0.000	0.000
(d) Long-term Loan and Advances	145.347	140.330	113.298
(e) Other Non-current assets	2.465	22.720	21.970
Total Non-Current Assets	5790.503	5174.088	3449.557
(2) Current assets
(a) Current investments	4.335	4.683	2.158
(b) Inventories	1401.093	1338.393	1016.222
(c) Trade receivables	3335.472	2940.339	2750.075
(d) Cash and cash equivalents	211.579	235.961	206.033
(e) Short-term loans and advances	462.548	275.370	504.552
(f) Other current assets	936.009	980.839	533.888
Total Current Assets	6351.036	5775.585	5012.928
TOTAL	12141.539	10949.673	8462.485

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2014	31.03.2013	31.03.2012
	SALES
		Revenue from Operations	12848.697	11479.675	11301.314
		Other Income	54.607	53.664	57.533
		TOTAL (A)	12903.304	11533.339	11358.847
Less	EXPENSES
		Cost of Materials Consumed	6846.840	7758.329	7570.555
		Purchase of stock in Trade	4369.739	2373.480	1828.748
		Increase/Decrease in Stocks	45.859	(330.360)	278.163
		Exceptional Item	49.318	0.000	0.000
		Employee benefit expenses	273.577	274.348	271.653
		Other expenses	725.593	780.850	666.541
		TOTAL (B)	12310.926	10856.647	10615.660
Less	PROFIT/(LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		592.378	676.692	743.187
Less	FINANCIAL EXPENSES (D)		766.477	536.241	500.550
	PROFIT/(LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		(174.099)	140.451	242.637
Less/ Add	DEPRECIATION/ AMORTISATION (F)		216.837	90.169	88.508
	PROFIT/(LOSS) BEFORE TAX (E-F) (G)		(390.936)	50.282	154.129
Less	TAX (H)		218.059	12.305	21.264
	PROFIT/(LOSS) AFTER TAX (G-H) (I)		(608.995)	37.977	132.865
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		541.787	512.976	405.036
Less	APPROPRIATIONS
		Transfer to General Reserve	0.000	2.500	7.800
		Interim dividend Paid	0.000	0.000	0.000
		Corporate Tax on Interim Dividend Paid	0.000	0.000	0.000
		Proposed Dividend	0.000	5.736	16.305
		Corporate Tax on Dividend	0.000	0.930	0.820
	BALANCE CARRIED TO THE B/S		(67.208)	541.787	512.976
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	362.088	394.256	506.842
	TOTAL EARNINGS		362.088	394.256	506.842
	IMPORTS
		Raw Materials	628.775	470.695	1378.576
	TOTAL IMPORTS		628.775	470.695	1378.576
	Earnings Per Share (Rs.)
	Basic		(41.44)	2.58	12.22
	Diluted		(41.44)	2.58	12.22

QUARTERLY RESULTS

PARTICULARS	30.06.2014
Type	1^st Quarter
Net Sales	2488.900
Total Expenditure	2431.800
PBIDT (Excl OI)	57.200
Other Income	3.400
Operating Profit	60.500
Interest	221.900
Exceptional Items	4.900
PBDT	(156.500)
Depreciation	60.800
Profit Before Tax	(217.300)
Tax	0.000
Provisions and contingencies	0.000
Profit After Tax	(217.300)
Extraordinary Items	0.000
Prior Period Expenses	0.000
Other Adjustments	0.000
Net Profit	(217.300)

KEY RATIOS

PARTICULARS		31.03.2014	31.03.2013	31.03.2012
Net Profit Margin (PAT / Sales)	(%)	(4.74)	0.33	1.18
Operating Profit Margin (PBIDT/Sales)	(%)	4.61	5.89	6.58
Return on Total Assets (PBT/Total Assets}	(%)	(3.97)	0.73	2.49
Return on Investment (ROI) (PBT/Networth)		(0.27)	0.04	0.13
Debt Equity Ratio (Total Debt /Networth)		3.76	3.91	3.32
Current Ratio (Current Asset/Current Liability)		1.00	1.11	1.13

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	108.700	146.938	220.546
Reserves & Surplus	1061.854	1178.449	1230.258
Net worth	1170.554	1325.387	1450.804
long-term borrowings	2054.211	2897.822	2689.982
Short term borrowings	1827.318	2290.443	2769.466
Total borrowings	3881.529	5188.265	5459.448
Debt/Equity ratio	3.316	3.915	3.763

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)
Revenue from Operations	11301.314	11479.675	12848.697
		1.578	11.926

NET PROFIT MARGIN

Net Profit Margin	31.03.2012	31.03.2013	31.03.2014
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Revenue from Operations	11301.314	11479.675	12848.697
Profit	132.865	37.978	(608.995)
	1.18%	0.33%	(4.74%)

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	No
19]	Payments terms	No
20]	Export / Import details (if applicable)	No
21]	Market information	----------------------
22]	Litigations that the firm / promoter involved in	------
23]	Banking Details	Yes
24]	Banking facility details	Yes
25]	Conduct of the banking account	----------------------
26]	Buyer visit details	----------------------
27]	Financials, if provided	Yes
28]	Incorporation details, if applicable	Yes
29]	Last accounts filed at ROC	Yes
30]	Major Shareholders, if available	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	No

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

During the year, a prolonged demand slump and growing interest cost has affected us badly. The sales and other receipts grew 11.87% YOY to Rs.12903.304 Millions. EBITDA dropped by 12.46% YOY to Rs. 592.375 Millions.

OPERATIONS AND OUTLOOK

During the year, a prolonged demand slump and growing interest cost has affected the performance of the Company. The sales and other receipts grew 11.87% YOY to Rs.12903.304 Millions. EBITDA dropped by 12.46% YOY to Rs.592.375 Millions

As in the past during the current year also there were drastic power cuts consequently affecting our costs and also the production. The other additional Power Plant of 35 MW capacity is under implementation and expected to commence its commercial operation shortly.

Some of the factors attributable to the decline in the profit margins and their impact on the performance of The Company are given hereunder;

Late implementation of Power Plant:

Despite achieving Commercial Operation during December 2012, synchronization of the Power Plant with Grid was achieved by end of July 2013. This delay was attributable to the right of way issue prevailed while laying the transmission towers from Power Plant to TNEB Substation. The Company had installed 48 towers instead of 30 towers as per norms of TNEB on account of right of way issue – a critical factor that had caused delay in implementing the project. Further, the uncertainty and high cost associated in Grid Connectivity had also delayed the whole process of Commercial production by one year. This total delay of one year resulted into loss of Revenue.

Operational inefficiency in Wire Rod:

The Company has shifted the entire operation of TMT Rod from its Ambattur unit to Gummidipoondi unit and been installing new technology for Wire Rod, a value added product of TMT Bars. This production of wire rods results in saving handling cost and reduces the end cutting wastages.

However, the equipments imported by the Company had not been performing at its optimum level. The Company had entered into contract with Morgardshammar AB of Sweden for setting up of Wire Rod Machine and with Sund Birsta, Sweden for setting up the handling equipment. Both the Companies are renowned names among the Steel Manufacturing and in the past supplied the equipment to other steel competitors in Indian Market. The output at desired level could not be achieved on account of fault in handling equipments. This has further resulted in production loss and revenue loss. The vendors have acknowledged the fault and started working to resolve the defects and deficiencies in the equipments.

Increase in the Interest Cost due to delay in the Project:

The base rate of The Company’s bankers has remained at higher level. The much anticipated decrease in the interest rate has not been materialized leading to high interest cost. Further, the delay in the setting up of the Company’s Power Plant and delay in stabilization of Wire Rod division, both have contributed for the revenue loss. The payments of standing finance costs to the Bankers by way of interest on Term Loan / working capital during the periods of delay in the implementation of the power plant / operation of wire rod unit further resulted into revenue loss.

Foreign Exchange fluctuation:

The Company had imported Scrap and Coal approximately 234861.619 MT. Despite entering into forward booking contract, the foreign exchange fluctuations prevailed during FY 2013-14 impacted the Company’s revenue to a greater extent and resulted into loss in revenue.

The price of steel scrap has remained stable whereas the price of TMT bars has been dropped. This has led to the shrunk in the gap between the price of the raw material and the finished product thereby causing significant decline in the profit margins. The off-take of steel has been very bad as the steel companies which were anticipated to grow close to 7% per year have grown only close to 1% thereby creating excess capacity in the country causing the steel prices to become lower.

The growth in the steel market is expected to be muted in the short term on account of poor growth in core consumer sectors such as infrastructure and construction. Domestic steel prices are also influenced by trends in raw material prices, demand – supply conditions in the market, international price trends among others. The steel industry is characterized by high capital intensity, high dependence on bulk raw materials, cyclical growth trends, perpetual overcapacity and relatively low profitability.

The Indian economy was expected to grow at 10% and the steel consumption was expected to increase by 12% annually. However, the country’s growth has come down to 4.5% and the steel consumption has increased by meagre 2% only. This has caused the problem of over capacity.

Since 2008, the global economies, including India, have experienced a significant turbulence and uncertainty. Despite some stability coming back from actions taken in response to the emerging challenges worldwide, the global economic recovery remains fragile. This has affected the growth path of the Indian steel industry in more than one ways. The world witnessed volatility in commodity prices, more particularly in the case of those related to the steel industry such as iron ore, coking coal, nickel, manganese ores, and non-coking coal. This left a profound impact on the steel industry globally since 2008 and running into 2014. Also, during this period, global steel production and consumption growth have slowed down and the world is faced with an excess capacity in crude steel making to the tune of over 550 million tones. While the Indian steel demand and production have grown steadily till 2011-12, the same also has lost pace in the past two years.

MANAGEMENT DISCUSSION AND ANALYSIS

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Company's products are TMT Bars, Sponge Iron, Billets and Ingots in the steel division and in synthetic division it is PP Woven Sacks, FIBC and Woven Fabric. TMT Bars are used in the Construction Sector and the plastic products cater to the packaging needs of various industries such as Cement, Fertilizers, Food grains, Sugar, etc.

The raw materials for Steel Making are M.S. Scrap, Sponge Iron and for TMT Bars is Billets. PP Granules is used for manufacture of plastic packaging products. This raw material is available in abundance within the country and can also be freely imported. Being in the commodity market the company is continuously making efforts for reducing the cost of production to sustain its margins.

SEGMENT-WISE/ PRODUCT-WISE:

The production of steel rods was 138839 MT compared to 183443 MT in the previous year. The sale of rods during the year was 144012 MT compared to 177223 MT in the previous year.

The production of synthetic products was 9057 MT compared to 10034 MT in the previous year. The sale of synthetic products during the year was 7215 MT compared to 9365 MT in the previous year

FUTURE OUTLOOK

With the commencement of commercial operations of their 1 X 35 MW Thermal Power Plant they see an opportunity to tackle power cuts to some extent. Though present day economic situation of the country poses threats, on revival will bring in lots of opportunities for growth. With various infrastructure facilities lined up both in private and public sectors including nuclear power and water, across the country, the management envisages huge demand for its products especially steel. The company has emerged stronger in the last few years and is well set to capitalize on growth prospects as they arise. The main Raw Material for their Steel making is Scrap / Sponge Iron and Power. MS Scrap is being imported from various countries all across the globe; sponge iron is being supplied by their subsidiary company M/s. Chitrakoot Steels and Power Private Limited.

The other major cost is power for which the company is aiming to reduce with the help of new power plant and the second phase of 35 MW Power Plant which expected commence production at the end of the current financial year. This would help them reduce their cost and economy to a greater extent.

INDEX OF CHARGES

S.No.	Charge ID	Date of Charge Creation/Modification	Charge amount secured	Charge Holder	Address	Service Request Number (SRN)
1	10489119	23/05/2014 *	670,000,000.00	CANARA BANK (LEADER TL)	PRIME CORPORATE BRANCH, SHANKAR NARAYANA BUILDING, NO.25, M G ROAD, BANGALORE, KARNATAKA - 560001, INDIA	C09492265
2	10468511	27/12/2013	80,000,000.00	THE TAMIL NADU INDUSTRIAL INVESTMENT CORPORATION L IMITED	692 ANNA SALAI, NANDANAM, CHENNAI, TAMIL NADU - 600035, INDIA	B92851609
3	10452004	17/09/2013	4,240,382.00	ELECTRONICA FINANCE LIMITED	128/A, PLOT NO.3,KAILASHCHANDRA APPARTMENTS,, PAUD ROAD, KOTHRUD, PUNE, MAHARASHTRA - 411038, INDIA	B86191624
4	10442976	25/07/2013	4,240,382.00	ELECTRONICA FINANCE LIMITED	128/A, PLOT NO.3, KAILASHCHANDRA APPARTMENTS,, PAUD ROAD, KOTHRUD, PUNE, MAHARASHTRA - 411038, INDIA	B82086711
5	10442625	24/07/2013	100,000,000.00	CANARA BANK	PRIME CORPORATE BRANCH, SHANKARNARAYANA BUILDING, NO.25, M G ROAD, BANGALORE, KARNATAKA - 560001, INDIA	B81956740
6	10417151	02/03/2013	30,000,000.00	CANARA BANK	PRIME CORPORATE BRANCH, SHANKARARANARAYANA BUILDING, NO. 25 M G ROAD, BANGALORE, KARNATAKA - 560001, INDIA	B72404650
7	10388660	20/11/2012	6,481,358.00	ELECTRONICA FINANCE LIMITED	128/A, PLOT NO.3,KAILASHCHANDRA APPARTMENTS,, PAUD ROAD, KOTHRUD, PUNE, MAHARASHTRA - 411038, INDIA	B62836903
8	10366792	11/06/2012	600,000,000.00	INDIAN OVERSEAS BANK	CATHEDRAL BRANCH, 762, ANNA SALAI,, CHENNAI, TAMIL NADU - 600002, INDIA	B44179943
9	10357908	16/12/2013 *	1,963,500,000.00	CANARA BANK	PRIME CORPORATE BRANCH, SHANKARNARAYANA BUILDING, NO.25, M G ROAD, BANGALORE, KARNATAKA - 560001, INDIA	B93639656
10	10340936	19/01/2012	30,000,000.00	ANDHRA BANK	N R ROAD BRANCH, BANGALORE, KARNATAKA - 560002, INDIA	B34439521

* Date of charge modification

FIXED ASSETS

· Land

· Leasehold Land

· Factory Buildings

· Office Premises

· Plant and Machinery

· Works Equipments

· Lab Equipments

· Office and Other Equipments

· Vehicles

STANDALONE UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED 30.06.2014

(Rs. in Millions)

		30.06.2014 Unaudited
1	Income from Operations
	(a) Net sates/income from operations (Net of excise duty)	2488.919
	(b) Other Operating Income	0.000
	Total income from operations (net)	2488.919
2	Expenses
	(a) Cost of materials consumed	1502.737
	(b) Purchases of stock-in trade	762.757
	(c) Changes in inventories of finished goods. work-in-progress and stock in trade	(173.005)
	(d) Employee benefits expense	63.183
	(e) Depreciation and Amortization Expenses	60.767
	(f) Other Expenses	218.738
	(g) Power and Fuel	57.350
	Total expenses	2492.527
3	Profit/ (Loss) from operations before other Income, finance costs and exceptional Items (1-2)	(3.608)
4	Other Income	3.360
5	Profit/ (Loss) from operations before other income, finance costs and exceptional items (3+4)	(0.248)
6	Finance Costs	221.888
7	Profit/ (Loss) from ordinary activities after finance cost but before exceptional items (5-6)	(222.136)
8	Exceptional items	(4.866)
9	Profit/ (Loss) from ordinary activities before tax (7+8)	(217.270)
10	Tax expenses	0.000
11	Net Profit / (Loss) from ordinary activities after tax (9-10)	(217.270)
12	Extraordinary item (net of tax expense)	0.000
13	Net Profit / (Loss) for the period (11-12)	(217.270)
14	Share of profit' (loss) of associates
15	Minority Interest
16	Net Profit/ (Loss) after taxes, minority interest and share of profit/(loss) of associates (13+14+15)
17	Paid up equity share capital (Face Value of Rs 10/-each)	146.941
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 annualized):	-
	(a) Basic	(14.79)
	(b) Diluted	-
A	PARTICULARS OF SHAREHOLDING
1	A. Public Shareholding
	- Number of shares	4241210
	- Percentage of shareholding	28.27
2	Promoters and Promoter group shareholding
	a) Pledged / Encumbered
	- Number of shares	-
	- Percentage of shares (as a % of the total shareholding of Promoter & Promoter group)	-
	- Percentage of shares (as a % of the total Share Capital of the Company)	-
	b) Non Encumbered
	- Number of shares	10758790
	- Percentage of shares (as a % of the total shareholding of Promoter & Promoter group)	100
	- Percentage of shares (as a % of the total Share Capital of the Company)	71.73
B	INVESTOR COMPLAINTS	30.09.2014
	Pending at the beginning of the quarter	Nil
	Received during the quarter	Nil
	Disposed off during the quarter	Nil
	Remaining unresolved at the end of the quarter	Nil

Note:

1. The Statutory Auditors of the Company have carried out a limited review of the unaudited financial results for the quarter ended June 30, 2014. These financial results were reviewed by the Audit Committee and approved by the Board of Directors at their meeting held on August 14, 2014.

2. Provision for tax liability for the current quarter was estimated as Rs. NIL on the basis of AS22 "Accounting for Taxes on Income".

3. The unaudited financial results of the Subsidiary Companies M/s. Cosmic Global Limited, M/s. Chitrakoot Steel and Power Private Limited, Color Peppers Media Private Limited and T G Logistics Private Limited have been included in the Consolidated Financial Results.

4. During this quarter, Wind Farms of the Company have generated 1517911 units of Electricity which have been set off against the consumption of Steel Units in Tamilnadu.

5. During the quarter, the Power Plant generated 68438000 units of Electricity.

6. Figures for the quarter ended March 31, 2014 are the balancing figures between audited figures in respect of full financial year ended March 31, 2014 and the published year to date figures up to December 31, 2013.

7. The Board at its meeting held on August 14, 2014 has approved voluntary delisting of the Company's equity shares from Madras Stock Exchange Limited (MSE) as the said stock exchange is being de-recognised by SEBI pursuant to SEBI circular dated May 30, 2012 and on account of non-fulfilment of trading turnover criteria by MSE as per SEBI requirements.

8. Previous Quarter Figures have been regrouped/recasted wherever necessary to conform to current Quarter.

SEGMENT WISE REVENUE RESULTS AND CAPITAL EMPLOYED UNDER CLAUSE 41 OF THE LISTING AGREEMENT

Particulars		Year ended
		30.06.2014
		Unaudited
1	Segment Revenue
	Steel Division	1838.756
	Syntetic Division	391.793
	Power	261.730
	Total	2492.279
	Less: Inter-Segment revenue	0.000
	Net Sales I Income from Operations	2492.279
2	Segment Results Profit I (Loss) (before tax, finance cost and exceptional items) from Segment
	Steel Division	108.700
	Syntetic Division	(95.388)
	Power	(8.694)
	Total
	Less:
	Finance costs	221.888
	Total Profit(Loss) before Tax	(217.270)
3	Segment Capital employed
	Steel Division	5479.825
	Syntetic Division	442.946
	Power	1194.218
	Total	7116.989

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.63.39
UK Pound	1	Rs.94.17
Euro	1	Rs.73.61

INFORMATION DETAILS

Analysis Done by :	DIV
Report Prepared by :	MTN

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	3
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILITY	1~10	2
--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	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	NO
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		28

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.