MIRA INFORM REPORT

Report Date :

7^th June, 2006.

IDENTIFICATION DETAILS

Name :	KUN AUTOMOBILES PRIVATE LIMITED
Registered Office :	1-3-1042-45, Vileroy Hotel Lane, Kavadiguda, Hyderabad – 500 080, Andhra Pradesh, India
Country :	India
Financials (as on) :	31.03.2005
Date of Incorporation :	27.03.2002
Com. Reg. No.:	01-38704
CIN No.: [Company Identification No.]	U34100AP2002PTC038704
TAN No.: [Tax Deduction & Collection Account No.]	HYDK01024C
PAN No.: [Permanent Account No.]	AABCK8998H
Legal Form :	Private Limited Liability Company
Line of Business :	The Company is engaged in Sale and Repairs / Servicing of Motor Vehicles. Dealers of General Motors Cars.

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 10000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is a dealer of GM Cars (‘Tavera’ ‘Optra’ etc.). Directors are reported as experienced, respectable and having satisfactory means of their own. Their trade relations are fair. Payments are usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	1-3-1042-45, Vileroy Hotel Lane, Kavadiguda, Hyderabad – 500 080, Andhra Pradesh, India
Tel. No.:	91-40-27532385
Fax No.:	91-40-27532384
E-Mail :	kunopel@vsnl.net

DIRECTORS

Name :	Mr. C. Vanshiohar Reddy
Designation :	Director
Address :	443/ A 6, III Phase, Jubilee Hills, Hyderabad – 500 034, Andhra Pradesh, India.
Date of Birth/Age :	02.03.1968
Date of Appointment :	27.03.2002
Name :	Mr. Uppuswamy Venkatesh
Designation :	Director
Address :	83, Aspiran Garden, Kilpauk, Chennai – 600 010, Tamilnadu, India.
Date of Birth/Age :	21.11.67
Date of Appointment :	27.03.2002

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares
C. Vanshiohar Reddy	95000
Uppuswamy Venkatesh	145000

BUSINESS DETAILS

Line of Business :	The Company is engaged in Sale and Repairs / Servicing of Motor Vehicles. Dealers of General Motors Cars.
Brand Names :	‘Tavera’ ‘Optra’

GENERAL INFORMATION

No. of Employees :

150

Bankers :

Kotak Mahindra Primus Limited

36-38 A, Nariman Bhavan, Nariman Point, Mumbai – 400 021

Facilities :

Secured Loan	Amount (in Millions)
ICICI Bank – Vehicle Loan	3.327
Kotak Mahindra Primus Limited (equipment Funding)	0.159
Kotak Mahindra Primus Limited (Vehicle Funding)	0.814
GMAC Financial Services (Inventory Funding)	62.309
Unsecured Loan
Loan from Directors and Relatives	3.611
Kum Auto Company Private Limietd	5.359
TOTAL:	75.579

Banking Relations :	--
Auditors :	Sunil Parmar & Company
Address:	5/1, 2^nd Floor, Lenaine Estate, 5-9-189, Abid Road, Hyderabad – 500 001, India.
Tel. No.:	91-40-23387581/ 7656
E-Mail :	Hyd2_Athena@sancharnet.in

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
250000	Equity Shares	Rs. 10/- each	Rs. 2.500 Millions.

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
240000	Equity Shares	Rs. 10/- each	Rs. 2.400 Millions.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital		2.400	2.400
2] Share Application Money		0.000	0.000
3] Reserves & Surplus		0.000	0.000
4] (Accumulated Losses)		0.000	0.000
NETWORTH		2.400	2.400
LOAN FUNDS
1] Secured Loans		66.610	18.363
2] Unsecured Loans		8.970	8.830
TOTAL BORROWING		75.580	27.193
DEFERRED TAX LIABILITIES		0.000	0.000
TOTAL		77.980	29.593
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		6.613	4.943
Capital work-in-progress		0.000	0.000
INVESTMENT
DEFERREX TAX ASSETS		0.000	0.000
		0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories
	Sundry Debtors
	Cash & Bank Balances	89.371	34.347
	Other Current Assets
	Loans & Advances
Total Current Assets		89.371	34.347
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	27.382	21.770
	Provisions	0.000	0.000
Total Current Liabilities		27.382	21.770
Net Current Assets		61.989	12.577
MISCELLANEOUS EXPENSES		9.378	12.073
TOTAL		77.980	29.593

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2005	31.03.2004
Sales Turnover [including other income]	598.541	303.456
Profit/(Loss) Before Tax	1.899	(1.905)
Provision for Taxation	0.097	0.000
Deferred Tax Credit	0.561	1.107
Profit/(Loss) After Tax	1.240	(0.797)
Total Expenditure	596.641	305.362

KEY RATIOS

PARTICULARS		31.03.2005	31.03.2004
PAT / Total Income	(%)	0.21	(0.26)
Net Profit Margin (PBT/Sales)	(%)	0.32	(0.63)
Return on Total Assets (PBT/Total Assets}	(%)	1.98	(4.85)
Return on Investment (ROI) (PBT/Networth)		0.79	(0.79)
Debt Equity Ratio (Total Liability/Networth)		42.90	20.40
Current Ratio (Current Asset/Current Liability)		3.26	1.58

LOCAL AGENCY FURTHER INFORMATION

FIXED ASSETS:

Computers, Air Conditioners, Equipments, Furniture & Fixtures, Vehicle, Television, Sign Board, Telephone Equipment etc.

PAST OPERATION:

During the period of review, the company become the number one dealer for General Motors (India) Private Limited in the city of Hyderabad. The sales of the company have shown a marked increase on both quantitative and rupee terms. The company has been turned around and the past year’s operations have resulted in profit.

The management is making all efforts to increase the business volumes and the effect of the same will be clearly visible in the current year.

FUTURE OUTLOOK:

The company has already attained the status of the “number 1 dealer” in the twin cities. Further GM has increased its basket of models the “Tavera” in the month of June 2004 has already become a success. The sale of the “Optra” has picked up and is now one of the fastest selling cars in its segment. The growth figures for the car industry indicate an increase of about 16% CAGR. The company is confident of surpassing the industry average during the current year. The small car market, which in industry pastance is referred to as the A and B segments, has the highest growth rate, currently over 65% At Present, the company does not have a presence in this market, as its principal has not launched any cars in this segment. GM has plans to launch a new model in this segment, which will cater to the needs of the customers desiring small cars. This will boost sales considerably.

The above along with the fact that investments in marketing have been driving sales upwards during the past five months shows that the company has a bright future.

Name of the company	KUN AUTOMOBILES PRIVATE LIMITED
Presented By	Mr. C. Vanshiohar Reddy, Director
1) Date and description of instrument creating the change	Director
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 70.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Hypothecation of all the retailers right, title and interest on the vehicles financed or deemed to be financed by way of the said Credit Facilities and any future vehicles financed by way of the said credit facilities, together with all accessories, tyres, tools, parts, options, equipment, replacements and/or other goods relating to these vehicles and delivered with or for these vehicle to the retailer whether installed or not and whether lying loose or in cases or which are now lying loose or incase or which are now lying or stored in or about or shall hereafter from time to time during the continuance of these presents be brought into or upon or be stored or be in or about the Retailers premises and godown or wherever else the same may be or be held by any party to the order or disposition of the Retailers or in course of transit or other wise or on order or delivery, wheresover in the possession of the retailers and either by way of substitution or addition and in particulars over and in any book debts and amounts receivable there under and over and in any amount receivable under current and future insurance policies obtained by the retailer and to extent permitted, in all such current and future insurance policies by way of exclusive charge in favour of the Financer.
4) Gist of the terms and conditions and extent and operation of the charge.	Amount of credit facility Rs. 70.000 Millions Floting rate of Interest (Currently 8.00%). The charge on assets shall be fully valid and subsisting till all amount payable under the agreement are fully paid. No encumbrance of any nature will be created on the assets charged until the agreement is fully paid.
5) Name and Address and description of the person entitled to the charge.	GMAC Financial Services India Limited, Arihant “E” Park, Second Floor, 117/1 Lattice Bridge Road, Adyar Chennai – 600 020.
6) Date and brief description of instrument modifying the charge	NIL
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	NIL

Name of the company	KUN AUTOMOBILES PRIVATE LIMITED
Presented By	Mr. Vamsidhar Reddy, Director
1) Date and description of instrument creating the change	Wholesale Dealer Finance Agreement dated 25^th September, 2004.
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 5.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Hypothecation by way of First Charge on all the current and movable fixed assets of the Company. Including Vehicles, debtors, advances, made for purching the Vehicles, now owned or hereafter acquired by Dealer and that now are or hereafter from time to time during this security shall be brought in, stored or be, in or about the premises, warehouses, godowns and show- rooms of Dealers at Dealer’s address set forth. Above or anywhere else, including all Vehicles in course of transit or delivery and all book debts and receivable of Dealers arising on any sales, lease, hire purchase or other dispositions by Dealers of Vehicles.
4) Gist of the terms and conditions and extent and operation of the charge.	Interest at 11.50% going down to 11.00% as mutually decided between KMPL and the Dealer.
5) Name and Address and description of the person entitled to the charge.	Kotak Mahindra Primus Limited 36-38 A, Nariman Bhavan, Nariman Point, Mumbai – 400 021
6) Date and brief description of instrument modifying the charge	Not Applicable
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	Not Applicable

Name of the company	KUN AUTOMOBILES PRIVATE LIMITED
Presented By	Mr. Vamsidhar Reddy, Director
1) Date and description of instrument creating the change	Wholesale Dealer Finance Agreement dated 20^th May, 2004.
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 2.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Hypothecation by way of First Charge on all the current and movable fixed assets of the Company. Including Vehicles, debtors, advances, made for purching the Vehicles, now owned or hereafter acquired by Dealer and that now are or hereafter from time to time during this security shall be brought in, stored or be, in or about the premises, warehouses, godowns and show- rooms of Dealers at Dealer’s address set forth. Above or anywhere else, including all Vehicles in course of transit or delivery and all book debts and receivable of Dealers arising on any sales, lease, hire purchase or other dispositions by Dealers of Vehicles.
4) Gist of the terms and conditions and extent and operation of the charge.	Interest at 10.50% going down to 10.00% as mutually decided between KMPL and the Dealer.
5) Name and Address and description of the person entitled to the charge.	Kotak Mahindra Primus Limited 36-38 A, Nariman Bhavan, Nariman Point, Mumbai – 400 021
6) Date and brief description of instrument modifying the charge	Not Applicable
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	Not Applicable

Name of the company	KUN AUTOMOBILES PRIVATE LIMITED
Presented By	Mr. U. Venkatesh, Director
1) Date and description of instrument creating the change	Dealer Finance Agreement dated 12^th June, 2002.
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 12.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Hypothecation by way of First Charge on all the current and movable fixed assets of the Company. Including Vehicles, debtors, advances, made for purching the Vehicles, now owned or hereafter acquired by Dealer and that now are or hereafter from time to time during this security shall be brought in, stored or be, in or about the premises, warehouses, godowns and show- rooms of Dealers at Dealer’s address set forth. Above or anywhere else, including all Vehicles in course of transit or delivery and all book debts and receivable of Dealers arising on any sales, lease, hire purchase or other dispositions by Dealers of Vehicles.
4) Gist of the terms and conditions and extent and operation of the charge.	Dealer Finance facility would be charged @ 15.00% p.a. Payable monthly, Flat, Penal Interest @ 2% p.m. The Equipment Finance Facility is repayable in 36 equated monthly instalments as mentioned in the Equipment Finance Agreement.
5) Name and Address and description of the person entitled to the charge.	Kotak Mahindra Primus Limited 36-38 A, Nariman Bhavan, Nariman Point, Mumbai – 400 021
6) Date and brief description of instrument modifying the charge	Not Applicable
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	Not Applicable

Name of the company	KUN AUTOMOBILES PRIVATE LIMITED
Presented By	Mr. C. Vanshiohar Reddy, Director
1) Date and description of instrument creating the change	Wholesale Dealer Finance Agreement dated 8^th July, 2003.
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 10.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Hypothecation by way of First Charge on all the current and movable fixed assets of the Company. Including Vehicles, debtors, advances, made for purching the Vehicles, now owned or hereafter acquired by Dealer and that now are or hereafter from time to time during this security shall be brought in, stored or be, in or about the premises, warehouses, godowns and show- rooms of Dealers at Dealer’s address set forth. Above or anywhere else, including all Vehicles in course of transit or delivery and all book debts and receivable of Dealers arising on any sales, lease, hire purchase or other dispositions by Dealers of Vehicles.
4) Gist of the terms and conditions and extent and operation of the charge.	Interest at 11.00% payable monthly Delayed Interest at 2% p.m.
5) Name and Address and description of the person entitled to the charge.	Kotak Mahindra Primus Limited 36-38 A, Nariman Bhavan, Nariman Point, Mumbai – 400 021
6) Date and brief description of instrument modifying the charge	Not Applicable
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	Not Applicable

Name of the company	KUN AUTOMOBILES PRIVATE LIMITED
Presented By	Mr. C. Vanshiohar Reddy, Director
1) Date and description of instrument creating the change	Wholesale Dealer Finance Agreement dated 31^st May, 2003.
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 5.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Hypothecation by way of First Charge on all the current and movable fixed assets of the Company. Including Vehicles, debtors, advances, made for purching the Vehicles, now owned or hereafter acquired by Dealer and that now are or hereafter from time to time during this security shall be brought in, stored or be, in or about the premises, warehouses, godowns and show- rooms of Dealers at Dealer’s address set forth. Above or anywhere else, including all Vehicles in course of transit or delivery and all book debts and receivable of Dealers arising on any sales, lease, hire purchase or other dispositions by Dealers of Vehicles.
4) Gist of the terms and conditions and extent and operation of the charge.	Interest at 14.00% payable monthly Delayed Interest at 2% p.m.
5) Name and Address and description of the person entitled to the charge.	Kotak Mahindra Primus Limited 36-38 A, Nariman Bhavan, Nariman Point, Mumbai – 400 021
6) Date and brief description of instrument modifying the charge	Not Applicable
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	Not Applicable

CMT REPORT [Corruption, Money laundering & Terrorism]

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

1] INFORMATION ON DESIGNATED PARTY

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

2] Court Declaration :

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

3] Asset Declaration :

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

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

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

Charges or investigation registered against subject: None

7] Criminal Records

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

8] Affiliation with Government :

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

9] Compensation Package :

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

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

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

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

CONTRAVENTION

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

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.45.92
UK Pound	1	Rs.84.62
Euro	1	Rs.58.03

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		45

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	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended

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