MIRA INFORM REPORT

Report Date :

20.03.2007

IDENTIFICATION DETAILS

Name :	GKN SINTER METALS LIMITED
Formerly Known As :	MAHINDRA SINTERED PRODUCTS LIMITED
Registered Office :	146, Mumbai- Pune Road, Pimpri, Pune - 411018, Maharashtra, INDIA
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	06.05.1960
Com. Reg. No.:	11-11676
CIN No.: [Company Identification No.]	U99999MH1960PLC011676 / U29130PN1960PLC018827
TAN No.: [Tax Deduction & Collection Account No.]	PNEM00089F
PAN No.: [Permanent Account No.]	AAACM4432H
Legal Form :	Subject is a closely held public limited liability company.
Line of Business :	Manufacturer of Automobile Giant like Sintered Bearings & Parts, Sintered Automotive Components, Sintered Filters, Metal Powders, Tools etc.

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 4250000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and reputed company and a part of GKN SINTER Group. The company is progressing well. Directors are reported as experienced and respectable businessmen. Trade relations are reported as fair. Business is active. Payments are usually correct and as per commitments. Fundamentals are strong and healthy. The company can be considered normal for business dealings at usual trade terms and conditions. The company can be regarded as a promising business partner in a medium to long-run.

LOCATIONS

Registered Office / Factory / Sales and Administrative Office :	146, Mumbai- Pune Road, Pimpri, Pune - 411018, Maharashtra, INDIA
Tel. No.:	91-20-27426261
Fax No.:	91-20-27426274
E-Mail :	gkn.pimpri@gknsintermetals.com
Website :	http://www.gknsintermetals.com
Factory :	C-18, MIDC, Industrial Area, Ahmednagar – 414111, Maharashtra, India

DIRECTORS

Name :	Mr. Andrew Smith Reynolds
Designation :	Director
Address :	The Dial Cottage Little Worth Amberey, Gloucestershire Glssal, United Kingdom
Date of Birth/Age :	12.05.1966
Date of Appointment :	02.11.2004
Name :	Mr. V. Srinivasan
Designation :	Managing Director
Address :	Flat 4, Marvel Residency, 394, South Main Road, Koregaon Park, Pune – 411001, Maharashtra, India
Date of Birth/Age :	29.07.1955
Date of Appointment :	18.07.2004
Name :	Mr. Ajay Laxman Deuskkar
Designation :	Director
Address :	Samadhan Apartments 39/28, Erandawane, Pune – 411004, Maharashtra, India
Date of Birth/Age :	08.12.1945
Date of Appointment :	01.11.1992
Election Commission Identity Card No. :	MT/42/247/369468
Name :	Mr. Harald Neubert
Designation :	Director
Address :	Haydenstrabe 21A, D-40789, Monhein, Germany
Date of Birth/Age :	01.08.1956
Date of Appointment :	12.12.2001
Name :	Mr. Mohanbrij Kataria
Designation :	Managing Director
Address :	27, Blackdown Road, Knowle Solihullbqb, United Kingdom
Date of Birth/Age :	31.03.1940
Date of Appointment :	01.06.1979
Name :	Mr. Ram Sundaram
Designation :	Whole time Director
Address :	Apsley House, Apsley Church Lane, Reditch, United Kingdom
Date of Birth/Age :	22.10.1940
Qualification :	01.11.1992
Experience :	17.07.2004
Date of Appointment :	MT/43/245/010858
Name :	Mr. Hemant Hansraj Lughta
Designation :	Director
Address :	S 482, 1^st Floor, Greater Kailash, New Delhi – 110048
Date of Birth/Age :	18.04.1949
Date of Appointment :	18.07.2002
Date of Ceasing :	18.08.2005
Name :	Mr. Peter Oberparleiter
Designation :	Director
Address :	Little and Co Central Bank Building, M G Road, Mumbai – 400023, Maharashtra, India
Date of Birth/Age :	08.01.1961
Date of Appointment :	24.05.2002
Date of Ceasing :	31.05.2005
Name :	Mr. George Adam
Designation :	Director
Address :	7, Mahindra Colony, 121, Nagar Road, Pune – 411001, Maharashtra, India
Date of Birth/Age :	01.04.1954
Date of Appointment :	18.08.2005
Name :	Mr. Alex Pollard
Designation :	Director
Address :	46/27, Pendal, Nigdi, Pune – 411001, Maharashtra, India
Date of Birth/Age :	26.03.1972
Date of Appointment :	31.05.2005
Name :	Mr. Anwar Mansoor
Designation :	Director
Address :	Tahnee Heights 51/B, Petil Hall Complex, 66 Nepean Sea Road, Mumbai – 400006, Maharashtra, India
Date of Birth/Age :	22.04.1957
Date of Appointment :	20.01.2003
Name :	Mr. Sandeep Rajnikant Mehta
Designation :	Director
Address :	V/A, Hugo Von Tavfers 15 39032, Campa, Italy
Date of Birth/Age :	27.03.1970
Date of Appointment :	20.01.2003
Name :	Mr. Nanfred Weber
Designation :	Director
Address :	AM Ellingor 45, 58455, Witton, Germany
Date of Birth/Age :	20.03.1950
Date of Appointment :	27.04.2004
Date of Ceasing :	18.08.2005
Name :	Mr. Ajit Shantaram Rao
Designation :	Company Secretary
Address :	Flat No. 9, A1 Wing New Ajanta, Avenue Paud Road, Pune – 411029, Maharashtra, India
Date of Birth/Age :	06.04.1949
Date of Appointment :	02.02.1998
Name :	Mr. A. L. Deuskar
Designation :	Executive Director(Sales)
Address :	M. Sc., M.M.S.
Date of Birth/Age :	10.02.1972
Name :	Mr. Mansoor Anwar
Designation :	Alternate Director
Name :	Mr. Sankaran Ravindran
Designation :	Director
Address :	LCG-304 B, Laburnum Condominium Complex, Sushant Lok 1, Block A, Sector – 28, Gurgaon – 122002, Haryana

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares
GKN Sinter Metal Holding Limited	2255838
GKN Sinter Metal Holding Limited & GKN Industries Limited	1
GKN Sinter Metal Holding Limited & GKN Limited	1
GKN Sinter Metal Holding Limited & GKN International Trading Holding Limited	1
GKN Sinter Metal Holding Limited & GKN Overseas Holding Limited	1
GKN Sinter Metal Holding Limited & GKN United Kingdom Limited	1
GKN Sinter Metal Holding Limited & GKN Group Services Limited	1
Total	2255844

BUSINESS DETAILS

Line of Business :

Manufacturer of Automobile Giant like Sintered Bearings & Parts, Sintered Automotive Components, Sintered Filters, Metal Powders, Tools etc.

Products :

Item Code No. (ITC Code)	Product Description
848300000	Sintered Bushes
870800000	Sintered Parts-Motor Vehicle
740610000	Copper Powder

PRODUCTION STATUS

Particulars	Unit	Installed Capacity (in ‘000)	Production (in ‘000)
Sintered Bearings & Parts	Pcs.	193000	207884
Sintered Automotive Components	Kgs.	2000
Sintered Filters	Pcs.	1000	129
Metal Powders	Kgs.	2160	991
Tools	Pcs.	20	12

GENERAL INFORMATION

No. of Employees :	2000
Bankers :	Ø Canara Bank, Hadapsar Branch, Pune - 411 018, Maharashtra, INDIA Ø Union Bank of India Ø UCO Bank Ø ICICI Bank Limited
Facilities :	--

Banking Relations :	Good
Auditors :
Name :	Price Waterhouse and Company Chartered Accountants
Address :	252, Veer Sawakar Marg, Shivaji Park, Mumbai – 400028, Maharashtra, India
Associates/Subsidiaries :	Ø GKN Sinter Metals Inc. USA Ø GKN Bound Brook Italia SP Ø GKN Sinter Metals GmbH Germany Ø Hoeganaes US Ø Hoganas Europe S.A. / SC Ductile Iron Powder Ø GKN Sinter Metals, Bruneck
Parent Company :	GKN Sinter Metals Holdings Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
3,000,000	Equity Shares	Rs. 10/- each	Rs. 30.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
2,255,844	Equity Shares	Rs. 10/- each	Rs. 22.558 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2006	31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital		22.558	22.558	22.558
2] Reserves & Surplus		1076.192	919.719	789.535
NETWORTH		1098.750	942.277	812.093
LOAN FUNDS
1] Secured Loans		0.000	0.000	0.000
2] Unsecured Loans		0.000	40.697	54.679
TOTAL BORROWING		0.000	40.697	54.679
DEFERRED TAX LIABILITIES		46.670	47.209	46.046
TOTAL		1145.420	1030.183	912.818
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		528.053	513.928	462.193
Capital work-in-progress		64.959	3.061	29.362
INVESTMENT		0.000	0.000	12.596
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	242.116	200.261	158.732
	Sundry Debtors	339.260	323.862	271.312
	Cash & Bank Balances	175.106	103.121	159.938
	Other Current Assets	0.246	0.200	7.748
	Loans & Advances	76.869	83.880	57.337
Total Current Assets		833.597	711.324	655.067
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	240.633	157.140	116.996
	Provisions	40.556	40.990	129.404
Total Current Liabilities		281.189	198.130	246.400
Net Current Assets		552.408	513.194	408.667
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		1145.420	1030.183	912.818

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
Sales Turnover		1459.855	1294.141	1060.503
Other Income		48.976	46.019	30.963
Total Income		1508.831	1340.16	1091.466
Profit/(Loss) Before Tax		241.874	176.990	144.796
Provision for Taxation		85.400	46.807	51.005
Profit/(Loss) After Tax		156.474	130.183	93.791
Earnings in Foreign Currency :
	Export Earnings	140.904	112.506	103.653
	Freight and Insurance Charges	--	1.311	2.621
	Other Earnings	--	2.829	2.504
Total Earnings		140.904	116.646	108.778
Imports :
	Raw Materials	NA	177.422	133.594
	Stores & Spares	NA	19.038	8.156
	Capital Goods	NA	54.185	67.083
Total Imports		NA	250.645	208.833
Expenditures :
	Raw Material Consumed	545.865	481.749	365.704
	Employees Costs	0.000	0.000	172.846
	Consumption of stores and spares parts	67.095	61.384	0.000
	Increase/(Decrease) in Finished Goods	[41.495]	[24.947]	[1.619]
	Salaries, Wages, Bonus, etc.	141.854	131.129	0.000
	Managerial Remuneration	9.648	14.835	0.000
	Payment to Auditors	0.853	1.103	0.000
	Interest	4.866	1.555	0.998
	Insurance Expenses	1.684	1.878	0.000
	Power & Fuel	132.919	119.387	0.000
	Depreciation & Amortization	78.383	76.120	63.607
	Other Expenditure	325.285	298.977	345.134
Total Expenditure		1266.957	1163.170	946.670

KEY RATIOS

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
PAT / Total Income	(%)	10.37	9.71	8.59
Net Profit Margin (PBT/Sales)	(%)	16.57	13.68	13.65
Return on Total Assets (PBT/Total Assets}	(%)	17.76	14.45	12.96
Return on Investment (ROI) (PBT/Networth)		0.22	0.19	0.18
Debt Equity Ratio (Total Liability/Networth)		0.26	0.25	0.37
Current Ratio (Current Asset/Current Liability)		2.96	3.59	2.66

LOCAL AGENCY FURTHER INFORMATION

Fixed Assets

Land - freehold & leasehold, buildings, roadways, plant & machinery, electrical installations, laboratory equipment, furniture, fixtures and office equipment and motor vehicles.

RESEARCH & DEVELOPMENT: 

The company's R & D Laboratory is recognised by the Department of Scientific & Industrial Research of the Ministry of Science & Technology, Government of India. The recognition has been renewed upto March 31, 2007 during the period under report. 

Company's R&D laboratory engages itself in relevant areas of work which support the growth of Company's business, improve productivity and conserve non-renewable resources. 

QUALITY MANAGEMENT SYSTEM 

Company's Quality Management System has been upgraded during the year and it now conforms to the Standard ISO/TS 16949 : 2002. Initial Audit was done by Det Norske Veritas (DNV) in February 2004 and full compliance was completed and verified in March 2004. 

ENVIRONMENT, HEALTH & SAFETY 

The Company uses International Standards for benchmarking Health & Safety. During the year under review, a number of programmes have been conducted using experts from GKN plc, industry and Government, to enhance safety awareness of employees at all levels. The Ahmednagar Plant has won the President's Safety Award for Safety Excellence, Zero Lost Time Accidents and Zero Lost Days. Quarterly environment reports are prepared, reviewed and sent to GKN Plc for global comparison. 

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.43.98
UK Pound	1	Rs.85.59
Euro	1	Rs.58.49

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	8
--RESERVES	1~10	8
--CREDIT LINES	1~10	8
--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
TOTAL		67

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
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

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