MIRA INFORM REPORT

Report Date :

07.11.2008

IDENTIFICATION DETAILS

Name :	DYNAMATIC TECHNOLOGIES LIMITED
Formerly Known As :	DYNAMATIC HYDRAULICS LIMITED
Registered Office :	Dynamatic Park, Peenya Industrial Area, Bangalore – 560 058, Karnataka,
Country :	India
Financials (as on) :	31.03.2008
Date of Incorporation :	07.03.1973
Com. Reg. No.:	002308
CIN No.: [Company Identification No.]	L85110KA1973PLC002308
TAN No.: [Tax Deduction & Collection Account No.]	BLRD01116D
Legal Form :	Public Limited liability company. Company’s shares are listed on stock Exchanges.
Line of Business :	Subject produces highly engineered products for applications in the Automotive Sector, Defence Sector, Agricultural Equipment Industry and Construction Equipment Industry.

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 3295000
Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established and reputed company having satisfactory track records. 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. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office / Corporate Office:	Dynamatic Park, Peenya Industrial Area, Bangalore – 560 058, Karnataka, India
Tel. No.:	91-80-28394933 / 34 / 35
Mobile No.:	91-80-2839 5823
Fax No.:	91-80-28395823
E-Mail :	haritha@dynamatics.net
Website :	http://www.dynamatics.com
	North Region
Branch Office :	516A and 516B, 5^th Floor, World Trade Center, Barakhamba lane, Babarlane, New Delhi – 110 001
Tel. No.:	91-11-51527861 / 51527862 / 63
Fax No.:	91-11-51527861
Branch Office :	704, Sakar III, Opposite High Court, Navjivan Post, Ahmedabad – 380 014, Gujarat, India
Tel. & Fax No.:	91-79-27544110
	South Region
Branch Office :	No. 16, Wallace Garden, 1^st Street, Chennai – 600 006, Tamilnadu, India
Tel. No.:	91-44-28332844 / 28332625
Branch Office :	G – 6, Anna Maria Apartments, Singallur, Coimbatore – 641 005
Branch Office :	149, Gunrock Enclave, Secunderabad – 500 009, India
Tel. No.:	91-40-27818225
Fax No.:	91-40-27718225
	West Region
Branch Office :	G – 5, (Ground Floor), Unique House, Cardinal Gracious Road, Chakala, Andheri (East), Mumbai – 400 099
Tel. No.:	91-22-56987370
Fax No.:	91-22-56987371
Branch Office :	Flat No. 02, Ground Floor, Ishaan Apartment, Opposite Ganesh Dhyan Mandir, Sriram Housing Society, Warje, Pune – 411 058
Tel. No.:	91-20-25233673
	East Region
Branch Office :	79 / 7 – B, Acharya Jagdish Chandra Bose Road, Kolkata – 700 014
Tel. No.:	91-33-2448485

DIRECTORS

Name :	Mr. J K Malhotra
Designation :	Chairman
Name :	Mr. Vijal Kapur
Designation :	Director
Name :	Dr. K Aprameyan
Designation :	Director
Name :	Air Chief Marshal (Retd.)Mr. S Krishnaswamy
Designation :	Director
Name :	Mr. N R Mohanty
Designation :	Director
Name :	Mr. B Seshnath
Designation :	Executive Director / Chief Marketing Officer
Name :	Mr. N Rajagopal
Designation :	Executive Director and Chief Operating Officer
Name :	Mr. Udayant Malhotra
Designation :	Managing Director / Chief Executive Officer

KEY EXECUTIVES

Name :	Mr. V Sunder
Designation :	Company Executive / President and Group Chief Financial Officer
Name :	Ms. G. Haritha
Designation :	Company Secretary
Tel. No.:	91-80-28394933 / 28394934
Fax No.:	91-80-28395823
E mail:	haritha@dynamatics.net

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 31.03.2008

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters Holding
Indian Promoters		0.10
Barota Malhotra	4938	0.00
Christine Hoden (I) Private Limited	100	0.00
Udayant Malhotra	1050854	21.84
JKM Holdings Private Limited	803135	16.70
JKM Offshore India Private Limited	414769	8.62
Primella Sanitary Products Private Limited	100	0.00
Udayant Malhotra and Company Private Limited	617243	12.83
Vita Private Limited	100	0.00
Wavell Investments Private Limited	119790	2.49
J K Malhotra	100	0.00
Total (a)	3011129	62.58
Non- Promoters Holding
Mutual Funds	10650	0.22
Banks, Financial Institutions, Insurance Companies	392	0.01
Foreign Institutional Investors	447460	9.30
Total (b)	458502	9.53
Others
Private Corporate Bodies	166753	3.47
Indian Public	1124259	23.37
NRIs / OCBs	37671	0.78
Trust	3924	0.08
Clearing Agents	8465	0.18
Total (c )	1341072	27.88
Grand Total (a+ b + c )	4810703	100.00

BUSINESS DETAILS

Line of Business :	Subject produces highly engineered products for applications in the Automotive Sector, Defence Sector, Agricultural Equipment Industry and Construction Equipment Industry.
Products :	Item Code No. 8413.19 8479.10 8481.80 870790.01	Product Description Hydraulic Gear Pumps Power pack Pump Unit Valves Automotive Components
Exports to:	USA, Gran Bretagna, Canada, Germany, Corea, Repubblica di (Corea del Sud.)
Imports from:	Italy

GENERAL INFORMATION

No. of Employees :

538

Bankers :

v Kotak Mahindra Bank

v Axis Bank

v Punjab national Bank

v Standard Chartered Bank

v HDFC Bank

v Citi Bank

v State Bank of India

Facilities :

Secured Loans :

	As on 31.03.2008 Rs. in Millions
Term Loan From Financial Institutions	16.955
From Banks
In Rupee	300.871
In Foreign Currency	356.782
Hire Purchase Loan From Financial Institutions	13.937
Cash Credit and Working Capital Loan From Banks	531.834
Interest Accrued and Due	1.640
Total	1222.019

Unsecured Loans :

	As on 31.03.2008 Rs. in Millions
Short Term Loan Inter Corporate Deposits	5.050
Public Deposits (Repayable within one year Rs.13.548 millions)	17.768
Others Interest Free Sales Tax Loan	44.373
Interest Accrued and Due	0.398
Total	67.589

Banking Relations :	Satisfactory
Auditors :
Name :	Price Waterhouse and Company Chartered Accountants
Associates/Subsidiaries :	v JKM Dae Rim Automotive Limited v JKM Research Farm Limited v JKM Global Private Limited v Dynamatic Limited, U.K.
Other Related Entities :	v Greenearth Biotechnologies Limited v Vita Private Limited v JKM Human Resources Private Limited v JKM Holding Private Limited v Primella Sanitary Products Private Limited v Wavell Investments Private Limited v Chritine Hoden (India) Private Limited v JKM Offshore (India) Private Limited v Udayant Malhoutra and Company Private Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
20000000	Equity Shares	Rs. 10/- each	Rs. 200.000 millions
500000	Redeemable Cumulative Preference Shares	Rs. 100/- each	Rs. 50.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
4810703	Equity Shares	Rs. 10/- each	Rs. 48.107 millions

Notes:

Of the above shares,

(i) 1048390 shares are allotted by way of bonus shares by capatilisation of securities premium and capital redemption reserve.

(ii) 617143 Shares are allotted during the year as fully paid up pursuant to the Merger with JKM Daerim Automotive Limited without payments being in cash.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2008	31.03.2007	31.03.2006
SHAREHOLDERS FUNDS
1] Share Capital		48.107	41.936	41.936
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		610.995	296.040	300.344
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		659.102	337.976	342.280
LOAN FUNDS
1] Secured Loans		1222.019	459.694	549.408
2] Unsecured Loans		67.589	57.308	76.405
TOTAL BORROWING		1289.608	517.002	625.813
DEFERRED TAX LIABILITIES		148.315	55.103	86.262
TOTAL		2097.025	910.081	1106.394
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1452.913	380.037	717.512
Capital work-in-progress		165.503	185.052	100.993
Incidental Expenditure during Construction Period		0.000	34.102	21.098
INVESTMENT		85.388	78.544	0.115
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	339.799	163.337	275.268
	Sundry Debtors	631.546	339.342	427.538
	Cash & Bank Balances	52.891	16.908	33.331
	Other Current Assets	26.969	17.291	16.599
	Loans & Advances	206.278	86.087	67.226
Total Current Assets		1257.483	622.965	819.962
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	816.891	346.669	512.173
	Provisions	47.371	43.950	41.184
Total Current Liabilities		864.262	390.619	553.357
Net Current Assets		393.221	232.346	266.605
MISCELLANEOUS EXPENSES		0.000	0.000	0.071
TOTAL		2097.025	910.081	1106.394

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
Sales Turnover		2743.491	1114.429	1983.892
Other Income		83.840	45.339	33.007
Total Income		2827.331	1159.768	2016.899
Profit/(Loss) Before Tax		299.632	145.991	219.509
Provision for Taxation		113.865	46.110	100.688
Profit/(Loss) After Tax		185.767	99.881	118.821
Earnings in Foreign Currency :
	Export Earnings	246.240	108.409	104.639
Total Earnings		246.240	108.409	104.639
Imports :
	Raw Materials	424.273	72.807	63.930
	Stores & Spares	1.279	1.178	79.257
	Capital Goods	101.616	40.544	1.825
Total Imports		527.168	114.529	145.012
Expenditures :
	Cost of Materials	1590.519	585.269	1154.488
	Employee Cost	296.068	137.911	184.681
	Other Operating Expenses	429.815	210.878	285.743
	Depreciation	120.703	41.204	90.494
	Interest and Financial Charges	87.992	38.515	79.870
	Extraordinary Item/ Exceptional Item	2.602	0.000	2.114
Total Expenditure		2527.699	1013.777	1797.390

QUARTERLY RESULTS

PARTICULARS	30.06.2008 1^st Quarter	30.09.2008 2^nd Quarter
Sales Turnover	843.900	894.200
Other Income	19.500	15.900
Total Income	863.400	910.100
Total Expenditure	737.800	795.200
Operating Profit	125.600	114.900
Interest	30.400	31.200
Gross Profit	95.200	83.700
Depreciation	39.300	43.700
Tax	20.500	15.000
Reported PAT	35.400	25.000

KEY RATIOS

PARTICULARS	31.03.2008	31.03.2007	31.03.2006
Debt Equity Ratio	1.88	1.62	1.78
Long Term Debt Equity Ratio	1.13	1.00	1.02
Current Ratio	0.86	1.04	1.10
TURNOVER RATIOS
Fixed Assets	2.30	2.05	1.96
Inventory	12.87	8.06	7.80
Debtors	6.67	4.09	4.13
Interest Cover Ratio	3.90	4.28	4.18
Operating Profit Margin (%)	16.16	18.06	19.13
Profit Before Interest and Tax Margin (%)	12.43	14.85	15.74
Cash Profit Margin (%)	9.47	11.00	11.54
Adjusted Net Profit Margin (%)	5.74	7.79	8.15
Return on Capital Employed (%)	29.09	25.71	28.48
Return on Net Worth (%)	38.64	35.36	40.80

LOCAL AGENCY FURTHER INFORMATION

HISTORY:

Subject, formerly Dynamatic Hydraulics, was floated by J K Malhoutra. It is a medium-scale engineering unit specialising in the production and marketing of quality hydraulic elements, fluid systems and specialised engineering products. Subject manufactures hydraulic gear pumps, control valves, hand pumps and other hydraulic elements. It is the largest manufacturer of gear pumps in India. 

Subject had a technological collaboration with Ultra Hydraulics, UK (previously known as Dowtly Hydraulics Units), the leader in its field worldwide. The collaboration is not in force as on date. The company has fully indigenised its manufacture of hydraulic elements. 

Nearly 80% of sales is supplied to OEMs and the rest goes to the replacement market. Of the OEM supplies, over 60% is made to the tractor segment and the balance to other OEMs in the precision engineering, Defence and aviation sectors. Its gear pumps are exported to Australia, the UK, Srilanka, Turkey, Taiwan and Iran. 

In line with its expertise in precision engineering, it has developed several products for aerospace applications. In its aerospace division, it has manufactured specialised under-carriage valves for light combat aircrafts (LCA), mobile hydraulic test benches for military jets and helicopters, a hydraulic power system for the Polar Satellite Launch Vehicle (PSLV) III, etc. 

Subject has progressively increased its capacity for hydraulic pumps from 85,000 pa in 1992-93 to 1,20,000 pa at present. At a new plant to be set up near Bangalore, it plans to manufacture two models of small aircraft requiring short take-off runs, long flying ranges and with versatile applications in both the Defence and civilian sectors. 

During the year 1997-98, it floated JKM Dae Rim Automotive Limited in joint venture with M/s Dae Rim Enterprises, Korea for setting up Dynametal-II, the foundry division at Madras, which commenced commercial production in Oct.'98. 

The company was awarded National Award for Excellence in indigenisation of Defence equipment during the year 1999-2000. Also during the year the company has been certified to ISO 9001 Standards by Lloyds Registry for Quality Assurance and customer certified to QS 9000 Standards. 

The company plans to increase its efforts in developing new and more economical applications in mechanised agriculture, earth moving, material handling machine tools through continuous innovation. During the year 2000-2001 the company has entered into a marketing tie-up with ATOS s.p.a for the national level distribution of electro-hydraulic products.

PERFORMANCE OF THE COMPANY: 

During the year, JKM Daerim Automotive Limited merged with the Company consequent to the order of the Hon'ble High Court of Karnataka vide its order dated 4th January, 2008 effective from 1st April, 2007. 

The Hydraulics business grew from Rs.952.000 millions to Rs.1912.800 millions showing a growth of 101% and Net Profit from Rs.111.300 millions to Rs.175.200 millions showing a growth of 57%. This includes the turnover from Dynamatic Limited, UK, a subsidiary of the Company to the extent of Rs.817.700 millions and Net Profit of Rs.3.300 millions. The Aluminium Castings business grew from Rs.330.300 millions to Rs.365.500 millions showing a growth of 11% and Net Profit from Rs.32.000 millions to Rs.36.300 millions showing a growth of 13%. The JKM Automotive T'' (Formerly JKM Daerim Automotive Limited) business grew from Rs.1909.100 millions to Rs.2138.900 millions, showing a growth of 12% and Net Profit from Rs.109.700 millions to Rs.164.400 millions showing a growth of 50%. The consolidated business grew from Rs.2922.900 millions to Rs.4053.900 millions after eliminating inter company sales of Rs.363.300 millions. This has been made possible by the continuous implementation of cost optimisation measures and value engineering initiatives which offset the unprecedented cost increases resulting from rising Aluminium and Steel prices that were only partially compensated by their customers. Further the acquisition of Dynamatic Limited, UK, has also contributed to the sales growth of Rs.817.700 millions. 

Exports have grown at 24% with sales of Rs.246.200 millions against the previous year's Rs.198.100 millions (including Automotive Division). 

SUBSIDIARY COMPANIES: 

JKM Dae Rim Automotive Limited, India, a Subsidiary of the Company, was involved in the production of high quality ferrous and non-ferrous automotive engine and transmission components. During the year, the Hon'ble High Court of Karnataka approved the merger of JKM Daerim Automotive Limited with Dynamatic Technologies Limited vide its order dated 4t' January, 2008. The merger was effective from 111 April, 2007. As such the Directors' Report, the Audited Statement of Accounts, the Auditors' Report thereon and the Statement pursuant to Section 212 of the Companies Act, 1956, for the year ended 3111 March, 2008, for this division will not be applicable. Further, as required under the Accounting Standard AS-21 issued by The Institute of Chartered Accountants of India, in compliance with the Listing Agreement of Bombay Stock Exchange Limited and National Stock Exchange of India Limited, the Consolidated Statement of Accounts together with the Auditors' Report thereon will not be applicable. Currently, this division is known as JKM Automotive TM. 

JKM Research Farm Limited, India, is a wholly owned Subsidiary of the Company. The Directors' Report, Audited Statement of Accounts, Auditors' Report thereon and the Statement pursuant to Section 212 of the Companies Act, 1956, for the year ended 31st March, 2008, of this Subsidiary are annexed. Further, as required under the Accounting Standard AS-21 issued by The Institute of Chartered Accountants of India, in compliance with the Listing Agreement/s of Bombay Stock Exchange Limited and National Stock Exchange of India Limited, the Consolidated Statement of Accounts together with the Auditors' report. 

JKM Global Pte. Limited, Singapore, is a wholly owned Subsidiary of the Company. The Director's Report, Audited Statement of Accounts, Auditors' Report thereon and the Statement pursuant to Section 212 of the Companies Act, 1956, for the year ended 31st March, 2008, of this Subsidiary are annexed. Further, as required under the Accounting Standard AS-21 issued by The Institute of Chartered Accountants of India, in compliance with the Listing Agreement/s of the Consolidated Statement of Accounts together with the Auditors' Report.

Dynamatic Limited, UK, is a wholly owned Subsidiary of JKM Global Pte Limited. The Director's Report, Audited Statement of Accounts, Auditor's Report thereon and the Statement pursuant to Section 212 of the Companies Act, 1956, for the year ended 31st March, 2008, of this Subsidiary are annexed. Further, as required under the Accounting Standard AS-21 issued by The Institute of Chartered Accountants of India, in compliance with the Listing Agreement/s of Bombay Stock Exchange Limited and National Stock Exchange of India Limited, the Consolidated Statement of Accounts together with the Auditors' Report. 

MANAGEMENT'S DISCUSSION AND ANALYSIS: 

SAFE HARBOUR STATEMENT: 

Investors are cautioned that this discussion contains statements that involve risks and uncertainties. When used in this discussion, 'anticipate', 'believe', 'estimate', 'intend', 'will', 'expect' and other similar expressions which relate to the Company or its business are intended to identify such forward looking statements. The Company undertakes no obligations to publicly update or revise any forward looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements could differ materially from those expressed or implied in such statements. Therefore as a matter of caution, undue reliance on forward looking statements should not be made. The following discussion and analysis should be read in conjunction with the Company's financial statements included herein and notes thereto. 

ECONOMY, INDUSTRY STRUCTURE AND DEVELOPMENTS: 

During 2007-08, the Indian economy continued to expand at a robust pace for the fifth consecutive year, although there was some moderation in the growth momentum during the course of the year. According to the advance estimates released by the Central Statistical Organization (CSO), the real GDP growth rate moderated to 8% in 2007-08 from 9.6% in 2006-07. The moderation in growth occurred in all the three sectors viz., agriculture and allied activities, industry and services. 

The recent financial developments in USA and its ramifications on the other parts of the world are bound to have its effect on their economy, since they are now more closely integrated with the Global economy. However, the impact may not be sufficiently significant to stall the momentum of growth, as they have a sound savings ratio and their economy is largely dependent on domestic consumption. 

India continued to be one of the fastest growing economies in the world. Without doubt, formidable challenges lie in the areas of fiscal consolidation, infrastructure, education and in ensuring that the growth story remains inclusive. 

The Indian automobile industry is a stark contrast to the Global industry in many respects. The Indian automobile industry is small in comparison to the global industry and except for the two wheeler and tractor segments, the Indian industry cannot boast of large volumes vis-a-vis global numbers. 

The automotive industry in India is now responding to the dynamics of an open market as indicated by the large number of collaborative ventures being jointly set up by leading Indian and Global Automotive Manufacturers. The industry has also witnessed an increase in the number of joint ventures in the Auto Components sector, and it is expected that this trend will continue as more and more global OEMs look to India to meet their manufacturing requirements. 

The Government of India is keen to provide an economic and business environment conducive to the success of established and prospective foreign partnership ventures. 

The investment envisaged in new vehicle projects is $ 5.7 billion. 

The Company's automotive division, JKM Automotive' is located in Chennai, the Automotive Hub of India, and is uniquely positioned to leverage on its geographical advantages. 

The Ministry of Defence estimates that offsets will generate about Rs.400 bn. (USD 10 bn.) worth of business for the Indian defence industry over the next 5 years. The Indian Defence Offset Policy, which mandates 30% offsets from foreign vendors for purchases valued above Rs. 3 bn., has set the stage for the establishment of strategic partnerships between competent Indian players and international Aerospace majors. The Company, a pioneer and a recognized leader in the Indian Private Sector for the development of complex aero structures, is uniquely placed to benefit from the Offset Policy. It has the largest infrastructure in the Indian Private sector for the manufacture of exacting Air Frame Structures and Precision Aerospace Components and is well supported by its AS9100 quality certification. The Company has already signed a teaming agreement with Northrop Grumman Corporation, USA, and a production agreement with Cobham PLC, UK. During the year, the Company entered into a strategic partnership with Spirit Aero Systems for a significant complex metallic precision assembly for the Airbus Single Aisle (A320 family) Aircraft. 

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE: 

The sales revenues from each of the major business segments that the Company is involved in, are as follows: 

Segment	Amount (Rs. in Millions)	Percentage (%)
Hydraulics and Precision Engineering	1095.083	30.42
Aluminium Castings	365.541	10.16
Automotive Components	2138.910	59.42
Total	3599.534	100.00

OUTLOOK: 

The Company's reputation for developing innovative, cost competitive and high quality products continues to grow, both in India and in the Overseas markets. In the medium-term, the Company is expected to maintain a compounded annual growth rate of 45-50%. 

Having witnessed strong organic growth in all its business segments over the years, the Company is now moving towards inorganic growth through acquisitions that offer greater opportunities in the export market. Through these acquisitions, the Company is expected to double its revenues and scale up its margins on a consolidated basis. 

The key growth drivers of the business during the year has been the acquisition of the Hydraulics unit in Swindon, the strategic partnerships arising from the Government's Offset Policy in the Aerospace Segment and the setting up of the Green Field Project in the Automotive Segment. 

The Company enjoys a high level of technical competence and has developed strong relationships with its customers. The Company's key strengths are its design capabilities and the powerful partnerships it has forged with its customers, both of which enable it to either become the supplier of choice or a single source supplier to its customers. 

The continuous thrust on R&D activities will result in the development of innovative and cost-effective products. The Company's design capabilities has transformed it into an enabler of technology from a mere supplier of parts, which has in-turn created entry barriers for competition. 

Fixed Assets

v Land and Development

v Buildings

v Plant and Machinery

v Measuring Instruments

v Electrical Installations

v Data processing Equipments

v Office Equipments

v Furniture and Fixtures

v Tools, Dies and Moulds

v Vehicles

v Application Software

WEBSITE DETAILS:

BUSINESS:

Subject produces highly engineered products for the following applications:

· Automotive Sector

· Aerospace Sector

· Agricultural Equipment Industry

· Construction Equipment Industry

DYNAMATIC® HYDRAULICS is Asia's largest producer of Hydraulic Gear Pumps, and one of the Top Five worldwide. Dynamatic® also manufactures a wide range of sophisticated Hydraulic Valves and custom tailored hydraulic solutions extending from simple Hydraulic Pumping Units to sophisticated Marine Power Packs, complex Aircraft Ground Support Systems to turnkey industrial installations.

DYNAMETAL® produces high quality Non-Ferrous Alloy Castings for Industrial, Automotive and Aerospace Applications. The divisions' two foundries are located at Bangalore and Chennai respectively and incorporate use of the latest metallurgical technologies.

POWERMETRIC® DESIGN a world-class Design Center capable of total product and system design, with advanced capabilities in structural, thermal and dynamic engineering for analysis, design validation and optimization.

DYNAMATIC AEROSPACE® produces exacting Airframe Structures and Precision Aerospace Components. Products include the Wing and Rear Fuselage of the LAKSHYA, India's Pilotless Target Aircraft, and Ailerons and Wing Flaps for the HJT-36 Intermediate Jet Trainer. This is the first time such capabilities have been developed in the Indian Private Sector, and this division is now taking up development of major Airframe structures for the Sukhoi 30MKI Fighter-Bomber.

The company produces the Hydraulic Transmission System for India's T-72 Battle Tanks including Hydraulic Pumps, Hydraulic Transmission couplings and Distribution Mechanisms. Additionally, the Company has designed the Steering Control System, Turret Control system and Braking System for the Arjun Main Battle Tank.

JKM AUTOMOTIVE™: Dynamatic’s automotive division, JKM Automotive™ has its manufacturing facilities in Chennai, India’s automotive hub, and incorporates state-of-the-art technologies to produce high quality automotive components for Hyundai Motor India Limited, TATA Motors, John Deere, Cummins and Honeywell on a single source basis.

DYNAMATIC®: BUILDING A NATION- Over 85% of all Agricultural Tractors and Construction Equipment produced in India are powered by Dynamatic Hydraulics. 50% of all passenger cars made in India are built using critical engine and transmission products manufactured by JKM Automotive™. The Nation's borders are secured by products and technologies developed by Subject.

NEWS AND UPDATES:

Dynamatic® Acquires Aerospace Manufacturing Business in UK

Dynamatic Technologies Limited acquired Old land CNC Limited, a profitable high end precision engineering Company in Bristol UK, which is engaged in the manufacture of Aerospace components and tooling. The acquisition was completed on 4th October 2008, at a consideration of approximately 16 million USD.

This acquisition will provide Dynamatic® with a unique state-of-the-art Aeronautical manufacturing facility possessing complex 5 axis machining capabilities, which is a certified supplier to Airbus UK, Boeing, GKN Aerospace, Magellan Aerospace, GE Aviation Systems, Lockheed Martin and Agusta Westland. It is expected that the Company’s close proximity to the production facilities of its customers in Bristol - Airbus, Agusta Westland and GKN Aerospace – will grant Dynamatic® a strategic locational advantage required for the forging of strong direct relationships with leading Aerospace Companies in Europe and Americas.

With this acquisition, Dynamatic Technologies will acquire the scale and competence required to rapidly grow its Aerospace business in India and the world markets. The Company anticipates that the acquisition will further strengthen its ability to tap the business opportunities arising from India’s growing requirements for Defence and Civilian Aircrafts especially under the Offset Program.

The Company also expects to acquire better technologies to enhance its profile and competencies in the Aerospace domain while gaining overall inorganic business growth with a better synergic effect.

Dynamatic® Acquires 12 MW Wind Farm near Coimbatore

On 1st September 2008, Dynamatic Technologies acquired a 12 MW wind farm near Coimbatore, India, which is capable of generating approximately 18 mn. units of power annually. The wind farm which comprises of 48 windmills on 440 acres of free-hold land, was acquired from Tamil Nadu Petro Products Limited and will enable the Company to generate power in an environment friendly way. It is expected that this acquisition will enable Dynamatic® to achieve 85% reduction in its monthly energy costs at its Chennai complex and combat energy-price inflation in future.

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. 47.67
UK Pound	1	Rs. 75.47
Euro	1	Rs. 61.19

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	4
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	6
--CREDIT LINES	1~10	6
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		54

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