MIRA INFORM REPORT

Report Date :

17.05.2008

IDENTIFICATION DETAILS

Name :	SKH METALS LIMITED
Formerly Known As :	MARK AUTO INDUSTRIES LIMITED
Registered Office :	Plot No. 2, Maruti Joint Venture Complex, Gurgaon – 122015, Haryana
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	18.03.1986
Com. Reg. No.:	05-23655
CIN No.: [Company Identification No.]	U74130HR1986PLC023656
TAN No.: [Tax Deduction & Collection Account No.]	RTKM01832F
PAN No.: [Permanent Account No.]	AABCM1246N
Legal Form :	A Closely Held Public Limited Liability Company.
Line of Business :	Manufacturers of Pressed Sheet Metal Components, Silencers Mufflers Exhaust Pipes and Sub-Assemblies.

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 1065988
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and reputed company having fine track. 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 :	Plot No. 2, Maruti Joint Venture Complex, Gurgaon – 122015, Haryana, India
Tel. No.:	91-124-4017613/ 20/ 2343134
Mobile No.:	91-9899237874
Fax No.:	91-124-2340551/ 2341317
E-Mail :	sanjaykaul@skhmetals.com srsingh@skhmetals.com all@markautoind.com
Website :	http://www.skhmetals.com
Factory :	39, Milestone, N H – 8, Begum Pur Khatola, Gurgaon – 122001, Haryana, India
Tel. No.:	91-124-403116/8
Fax No.:	91-124-2215334

DIRECTORS

Name :	Mr. Rajendra P Goyal
Designation :	Chairman
Address :	10 Jayshree Building, 75 Abdul Gaffar Khan Road, Mumbai – 400025, Maharashtra, India
Date of Birth/Age :	01.12.1923
Date of Appointment :	27.09.1989
Name :	Mr. Kallol Roy
Designation :	Managing Director
Address :	MM – 12, DLF City Phase – I, Madhya Marg, Gurgaon – 122002, Haryana, India
Date of Birth/Age :	02.04.1957
Date of Appointment :	04.01.2000
Name :	Mr. Rattan Kapur
Designation :	Director
Address :	S – 430, Greater Kailash – II, New Delhi – 110048, India
Date of Birth/Age :	20.10.1952
Date of Appointment :	25.10.1986
Name :	Mr. S. Natarajan
Designation :	Director
Address :	2608 Sector – D, Pocket – 2, Vasant Kunj, New Delhi – 110070, India
Date of Birth/Age :	27.05.1933
Date of Appointment :	27.09.1987
Name :	Mr. Amitav Nandy
Designation :	Director
Address :	C 5/32, Vasant Kunj, New Delhi – 110070, India
Date of Birth/Age :	30.06.1940
Date of Appointment :	14.09.1992
Name :	Mr. R. Dayal
Designation :	Director
Address :	B – 52, Pilot Courts Essel Toe, M G Road, Gurgaon, Haryana, India
Date of Birth/Age :	05.06.1952
Date of Appointment :	19.12.2001
Name :	Mr. Ashok Kapur
Designation :	Director
Address :	B – 5, Chirag Enclave, New Delhi – 110048, India
Date of Birth/Age :	24.06.1946
Date of Appointment :	14.05.2005
Name :	Mr. Sanjay Mohan Labroo
Designation :	Director
Address :	Khasra – 79/9, 79/10, Near Kishangarh, Behind Sector – D – III, Vasant Kunj, New Delhi – 110070, India
Date of Birth/Age :	05.10.1961
Date of Appointment :	14.05.2005
Name :	Mr. Hirofumi Nagao
Designation :	Director
Address :	Room No. 307, Hotel Ashok, Chanakyapuri, New Delhi – 110021, India
Date of Birth/Age :	10.06.1953
Date of Appointment :	14.05.2005
Name :	Mr. Jagdish Khattar
Designation :	Director
Address :	N – 128, Panchsheel Park, New Delhi – 110017, India
Date of Birth/Age :	18.12.1942
Date of Appointment :	24.05.2005
Name :	Mr. Aroon Purie
Designation :	Director
Address :	6, Palam Marg, Vasant Vihar, New Delhi – 110057, India
Date of Birth/Age :	29.12.1944
Date of Appointment :	02.01.2006
Name :	Mr. Sunandan Kapur
Designation :	Managing Director
Address :	B – 5, Chirag Enclave, New Delhi – 110048, India
Date of Birth/Age :	21.08.1974
Date of Appointment :	01.01.2007
Name :	Mr. Sudam Maitra
Designation :	Director
Address :	4155, Sector – B, Pocket – 5 and 6, Vasant Kunj, New Delhi – 110701, India
Date of Birth/Age :	01.06.1955
Date of Appointment :	14.05.2005

KEY EXECUTIVE

Name :	Mr. Yogesh Goel
Designation :	Company Secretary
Address :	236 pocket C – 8, Sector – 8, Rohini, New Delhi – 110085, India
Date of Birth/Age :	09.09.1972
Date of Appointment :	15.12.1997
Name :	Mr. Shiv Ram Singh
Designation :	Company Secretary
Address :	Inderpur, Kaithouli, Mainpuri – 209720, Uttar Pradesh, India
Date of Birth/Age :	02.02.1973
Date of Appointment :	02.04.2007

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(10.06.2004)

No of Shareholders	No of Shares
Apple Finance Limited	555000

(As on 31.03.2007)

Category	Percentage
Bodies corporate (not mentioned above)	99.49
Directors of relatives of directors	0.04
Other top fifty shareholders (other than listed above)	0.47
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturers of Pressed Sheet Metal Components, Silencers Mufflers Exhaust Pipes and Sub-Assemblies.

Products :

Item Code No. [ITC Code]	Product Description
870800	Pressed Sheet Metal Components and Assemblies
870892	Silencers Mufflers Exhaust Pipes and Sub-Assemblies

· Fuel Tanks

· Suspension Frames

· Axle Housings

· Muffler Guards

· Automotive Exhaust Systems

· Rod Laterals

PRODUCTION STATUS

Particulars	Unit	Installed Capacity
Components / Exhaust Systems / Sub Assemblies	Nos.	2051000
Tubes	M. T.	7500

GENERAL INFORMATION

Suppliers :	· Dinesh Dies · D. P. Auto Industries · Kejriwal Alloys and Metals Private Limited · Rax Mech Industries · R. S. Industries · Saket Hardware Industries · Spun Micro Processing Private Limited · Allied Ferro Industries · Sypreme Enterprises
Customers :	Domestic Market Maruti Udyog Limited General Motors India Private Limited Fiat India Private Limited JCB India Krishna Maruti Limited. International Cars and Motors Limited Lombardini India (P) Limited Delphi Automotive Systems Limited Eicher Tractors Elgi Equipments Renault Tata Motors International Market Quinette Gallery Yanmar Lombardini spa, Italy Hatz JCB
No of Employees :	300
Bankers :	· Mizuho Corporate Bank Limited 4^th Floor, East Tower, Sood Tower, 25, Barakhamba Road, New Delhi – 110001, India

Banking Relations :	Satisfactory
Auditors :
Name :	Oberoi Sood and Associates Chartered Accountants
Address :	606, Vishal Bhavan, 95-Nehru Place, New Delhi – 110019, India
Collaborators :	· Magneti Merelli, Italy · Futaba Industrial Corporation, Japan · Okamoto Press, Japan · KUSAKABE, Japan
Associates/Subsidiaries :	· Maruti Udyog Limited · Nagata India Limited · Kuma Stainless Tubes Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
10000000	Equity Shares	Rs.10/- each	Rs.100.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
5430000	Equity Shares	Rs.10/- each	Rs.54.300 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2007	31.03.2006	31.03.2005
SHAREHOLDERS FUNDS
1] Share Capital		54.300	54.300	54.300
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		212.197	182.106	152.430
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		266.497	236.406	206.730
LOAN FUNDS
1] Secured Loans		693.138	423.659	295.062
2] Unsecured Loans		21.880	30.433	43.336
TOTAL BORROWING		715.018	454.092	338.398
DEFERRED TAX LIABILITIES		74.538	54.637	45.107
TOTAL		1056.053	745.135	590.235
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		744.741	475.745	366.108
Capital work-in-progress		61.820	118.507	72.007
INVESTMENT		69.481	19.148	19.147
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	194.784	128.680	137.256
	Sundry Debtors	194.032	177.583	183.344
	Cash & Bank Balances	1.729	1.570	17.178
	Other Current Assets	0.010	0.028	0.115
	Loans & Advances	127.797	76.322	45.329
Total Current Assets		518.352	384.183	383.222
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	329.421	247.794	239.221
	Provisions	11.004	7.907	13.844
Total Current Liabilities		340.425	255.701	253.065
Net Current Assets		177.927	128.482	130.157
MISCELLANEOUS EXPENSES		2.084	3.253	2.816
TOTAL		1056.053	745.135	590.235

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		1872.954	1457.488	1415.229
Other Income		88.671	63.728	62.350
Total Income		1961.625	1521.216	1477.579
Profit/(Loss) Before Tax		58.425	44.180	42.034
Provision for Taxation		283.333	14.504	20.104
Profit/(Loss) After Tax		(224.908)	29.676	21.930
Expenditures :
	Raw Material Consumed	1424.341	1136.809	1056.210
	Purchases made for re-sale	98.560	8.988	8.366
	Increase/(Decrease) in Finished Goods	(9.290)	3.384	[2.227]
	Salaries, Wages, Bonus, etc.	157.739	122.803	113.870
	Managerial Remuneration	3.074	2.778	3.198
	Payment to Auditors	0.300	0.300	0.300
	Interest	53.562	19.213	12.766
	Insurance Expenses	2.674	2.286	1.973
	Power & Fuel	41.081	31.799	27.837
	Depreciation & Amortization	60.215	52.924	76.912
	Miscellaneous Expenses	70.642	0.000	0.000
	Other Expenditure	0.301	95.752	136.340
Total Expenditure		1903.199	1477.036	1435.545

KEY RATIOS

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
PAT / Total Income	(%)	(11.46)	1.95	1.48
Net Profit Margin (PBT/Sales)	(%)	3.12	3.03	2.97
Return on Total Assets (PBT/Total Assets}	(%)	4.62	5.14	5.61
Return on Investment (ROI) (PBT/Networth)		0.22	0.19	0.20
Debt Equity Ratio (Total Liability/Networth)		3.96	3.00	2.86
Current Ratio (Current Asset/Current Liability)		1.52	1.50	1.51

LOCAL AGENCY FURTHER INFORMATION

Form 8:

Name of the company	MARK AUTO INDUSTRIES LIMITED
Presented By	SHRI YOGESH GOEL, Company Secretary
1) Date and description of instrument creating the change	30.07.2005 Deed of Hypothecation executed by the company in favour of Maruti Udyog Limited
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 16.381 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	Tools and Dies for following components Penal Fuel Tank Lower Panel Fuel Tank Upper Draw Tool for Panel Upper Esteem Euro – III Panel Checker for Panel Fuel Tank Upper Esteem Euro – III, Panel Checker for Fuel Tank Lower Panel Checker for Fuel Tank Upper
4) Gist of the terms and conditions and extent and operation of the charge.	The lender shall have the first charge on the tools and dies so hypothecated. The borrower shall keep the hypothecated tools and dies properly and fully insured against all normal risks including and not limited to loss by burglary or theft, malicious damage, loss by riots and civil commotion etc, and shall keep the insurance policy alive until the entire advance is adjusted. The borrower shall keep the hypothecated tools and dies in good conditions and it would be used only for the manufacture of components required to be supplied to lender. The borrower shall keep tools and dies intact and not part with its possession. Lease exchange or sell to any other party. The hypothecation will cease to be effective after the borrower has repaid the entire amount together with interest and other charges towards the credit sale of the tools and dies by way of adjustment against the supplies and / or otherwise.
5) Name and Address and description of the person entitled to the charge.	Maruti Udyog Limited 11^th Floor, Jeevan Prakash, 25-K G Marg New Delhi – 110001, India
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

This form is for	Creation of charge
Corporate identity number of the company	U74130HR1986PLC023656
Name of the company	SKH METALS LIMITED
Address of the registered office or of the principal place of business in India of the company	Plot No. 2, Maruti Joint Venture Complex, Gurgaon – 122015, Haryana
Type of charge	Movable Property
Particular of charge holder	Mizuho Corporate Bank Limited 4^th Floor, East Tower, Sood Tower, 25, Barakhamba Road, New Delhi – 110001, India rajan.kapoor@mizuho-cb.com
Nature of description of the instrument creating or modifying the charge	LS-1 [Agreement of Loan for Term Loan Limits for secured advance] LS – 2 [Agreement of Hypothecation of Plant and Machinery]
Date of instrument Creating the charge	21.02.2007
Amount secured by the charge	Rs. 200.000 Millions
Brief particulars of the principal terms an conditions and extent and operation of the charge	Rate of Interest MIBOR Linked interest shall be charged on the outstanding in the account opened in respect of aforesaid facility at such rates as may be determined by the bank from time to time at the bank’s sole discretion on the basis of any internal credit rating accorded to the borrower or otherwise provided that the rates shall be subject to changes in the prime Lending rates of the Bank and changes in interest rates prescribed by RBI from time to time. Terms of repayment Tenor of the loan is 5 years including 6 months moratorium. Loan will be paid in 18 equal quarterly installments starting from the end of the nine month from the date of first drawdown. Margin The company shall keep the plant and machinery in goods conditions. Extent and operation of the charge The charge shall operate as security for the repayment in installments of Rs. 200.000 Millions and all other monies at any time payable by the borrower to the bank under or in respect of aforesaid credit facilities granted or to be granted to the borrower. Others This is second pari passu charge on current and future plant and machinery created in favour of Bank.
Short particulars of the property charged	All present and future plant and machinery of the borrower including documents of title to the plant and machinery and present plant and machinery listed in schedule hereunto and all future machinery belonging to or in possession of or under control of the borrower wherever lying stored and kept in possession of borrower or bank or any third party whether in India or elsewhere throughout the world.

Fixed Assets

• Land Lease Hold
• Land Free Hold
• Building
• Plant and Machinery
• Furniture and Fixture
• Office Equipments
• Vehicles
• Computers

History:

Subject formerly known as Mark Auto Industries, was established in 1986 as a joint venture company setup by Maruti Udyog Limited, the largest car manufacturer in India, to cater to its requirements of Fuel Tanks and other Sheet Metal parts.

In 2005, the company was taken over by the Krishna Maruti Group and renamed company. Since then under the leadership of its new Managing Director, Mr. Sunandan Kapur, the company has broadened its horizons to become a reckoning force within the industry.

The Krishna Maruti Group, a 365 million dollar conglomerate, was incorporated in 1994 as an ancillary to Maruti Udyog Ltd. For manufacture and supply of seating systems by its chairman Mr. Ashok Kapur.

Profile:

Subject is the market leader in Indian Auto space as a reputed and leading Original Equipment supplier of Fuel Tanks, Exhaust Systems, Suspension Parts, Axle housings and other Sheet Metal Components and Welded assemblies.

Subject has been growing at a CAGR of over 40% since 2006 and aspires to achieve INR 15000.000 Millions (USD 375 Million) from the current year INR 3500.000 Millions (USD 88 Million). Subject currently has two state of the art manufacturing facilities in Gurgaon, and is enhancing its capacities and customer reach by setting up more facilities in Manesar, Pune and Chennai.

While the Manesar and Pune facilities will commence production during 3rd Quarter of 2008, Chennai facility will begin operations in 2010.

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 records 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.42.40
UK Pound	1	Rs.82.57
Euro	1	Rs.65.84

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
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		64

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