MIRA INFORM REPORT

Report Date :

13.11.2008

IDENTIFICATION DETAILS

Name :	T V SUNDRAM IYENGAR AND SONS LIMITED
Registered Office :	TVS Building, West Veli Street, Madurai – 625 001, Tamilnadu
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	11.10.1929
Com. Reg. No.:	2973
CIN No.: [Company Identification No.]	U34101TN1929PLC002973
Legal Form :	Public Limited liability company. Company’s shares are listed on the Stock Exchange.
Line of Business :	Dealers, Traders, Wholesalers, Retailers, Service Engineers, Importers and Exporters of Automobile, Vehicles, Spare Parts and Accessories and Petroleum Products/ Lubricants.

RATING & COMMENTS

MIRA’s Rating :

Aa

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 12000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and reputed company of TVS Group, a trusted and reliable industrial house of Southern India. Available information indicates high financial responsibility of the company. Trade relations are fair. Financial position is good. Payments are always correct and as per commitments. The company and the group are doing well. They can be regarded as good for any normal business dealings.

LOCATIONS

Registered Office :	TVS Building, West Veli Street, Madurai – 625 001, Tamilnadu, India
Tel. No.:	91-452-743801
Fax No.:	91-452-741587
E-Mail :	tvsco@vsnl.com
Website :	http://www.tvsiyengar.com
TVS Division:	Madurai, Tirunelveli, Tiruchirapalli, Pudukottai, Salem, Coimbatore, Dharmapuri, Villupuram, Namakkal, Thiruvananthapuram, Ernakulam, Kottayam, Kannur, Kozhikode, Kollam, Palakkad, Thrissur, Malappuram, Pondicherry, Indore, Bhopal, Rewa, Ratlam, Gwalior, Raipur, Jabalpur, Kanpur, Lucknow, Bareilly, Haldwani, Meerut and `Bangalore.
Sundaram Motors Division:	Chennai, Poonamallee, Vellore, Bangalore, Shimoga, Mysore, Mangalore, Hubli, Gulbarga, Belgaum, Bellary, Yeshwantpur, Secunderabad, Visakhapatnam, Vijayawada, Nellore, Kakinada, Cuddapah, Hyderabad, Pondicherry, Ponda (Goa), Kolhapur, Pune, Mumbai, Nagpur, Cuttack, Berhampur and Ahmedabad.
Madras Auto Services Division:	Chennai, Salem, Coimbatore, Erode, Vellore, Tiruchirapalli, Bangalore, Shimoga, Mysore, Hubli, Mangalore, Bellary, Belagum, Margoa, Visakhapatnam, Kurnool, Nellore, Hyderabad, Rajahmundry, Ernakulam, Kottayam, Kannur, Kozhikode, Thrissur, Kolhapur, Pune, Nagpur, Aurangabad, Bhopal, Raipur and Indore.

DIRECTORS

Name :	Mr. Suresh Krishna
Designation :	Director
Name :	Mr. K Ramesh
Designation :	Director
Name :	Mr. S Ram
Designation :	Director
Name :	Mr. K Mahesh
Designation :	Director
Name :	Mr. S Viji
Designation :	Director
Name :	Mr. Venu Srinivasan
Designation :	Director
Name :	Mr. T K Balaji
Designation :	Director
Name :	Mr. R Haresh
Designation :	Director
Name :	Mr. Gopal Srinivasan
Designation :	Director
Name :	Mr. R Dinesh
Designation :	Director
Name :	Mr. Srinath R Rajam
Designation :	Director
Name :	Mr. Srivats Ram
Designation :	Director

KEY EXECUTIVES

Name :	Mr. B Ganapathi Sarma
Designation :	Company Secretary

BUSINESS DETAILS

Line of Business :

Dealers, Traders, Wholesalers, Retailers, Service Engineers, Importers and Exporters of Automobile, Vehicles, Spare Parts and Accessories and Petroleum Products/ Lubricants.

GENERAL INFORMATION

Suppliers :

· Ashok Leyland Limited, Chennai

· The Premier Automobiles Limited, Pune

· Mahindra and Mahindra Limited, Mumbai

· Lucas TVS Limited, Chennai

· Honda Motors, India

Customers :

· Maruti Udyog

· Hindustan Motors

· TATA Engineering and Locomotive Company

· General Motors

· Ford India

· Daewoo Motors Company Limited

· Ind Auto

· Hyundai Motors India

· Bajaj Tempo

· Mahindra and Mahindra

· Swaraj Mazda

· Eicher Motors

· Escorts

· HMT

· Punjab Tractors

· L and T Tractors

· Greaves Tractors

No. of Employees :

About 6000

Bankers :

· State Bank of India

· UCO Bank

· State Bank of Patiala

· State Bank of Saurashtra

· State Bank of Travancore

· State Bank of Mysore

Facilities :

Secured Loans	(As on 31.03.2007) Rs. In millions
From Banks
Cash credit	962.511
Term Loan	15.000
Total	977.511

Unsecured Loans	(As on 31.03.2007) Rs. In millions
Deposits	116.082
Total	116.082

Banking Relations :	Good
Auditors :
Name :	Sundaram and Srinivasan Chartered Accountants
Associates / Subsidiaries :	· Sundaram Industries Limited · Southern Roadways Limited · Sundaram Textiles Limited · Lucas-TVS Limited · Lucas Indian Service Limited · Madras Systems and Allied Services Private Limited · TVS Automotive Systems Limited · Iranian Automotive Systems, Iran · TVS Interconnect Systems Limited · TVS Logistics Services Limited · TVS Automotive Europe Limited, UK · TVS C J Components Limited, UK · TVS Logistics Iberia S L, Spain · TVS Logistics Siam Limited, Thailand · TVS Autoserv GmbH, Germany · Brakes India Limited · TVS Sewing Needles Limited · Delphi-TVS Diesel Systems Limited · Royal Sundaram Alliance Insurance Company Limited · Irizar-TVS Limited · TVS Lanka (Private) Limited, Srilanka · Sundram Fasteners Limited · Wheels India Limited · Sundaram Clayton Limited · Sundaram Brake Linings Limited · India Motor Parts and Accessories Limited · TVS Srichakra Limited · TVS Auto Bangladesh Limited · Adyar Property Holding Company Limited · Housing Development Finance Corporation Limited

CAPITAL STRUCTURE

(As on 31.03.2007)

Authorised Capital :

No. of Shares	Type	Value	Amount
2500000	Equity Shares	Rs.100/- each	Rs.250.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
24776	Equity Shares fully paid for cash	Rs.100/- each	Rs.2.478 millions
10209	Equity Shares fully paid issued for consideration other than cash	Rs.100/- each	Rs.1.021 millions
1109015	Equity Shares fully paid issued as Bonus Shares by capitalization of General Reserve	Rs.100/- each	Rs.110.901 millions
	Total		Rs.114.400 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		114.400	114.400	114.400
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		2332.925	2015.425	1753.300
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		2447.325	2129.825	1867.700
LOAN FUNDS
1] Secured Loans		977.511	947.544	753.100
2] Unsecured Loans		116.082	250.478	317.200
TOTAL BORROWING		1093.593	1198.022	1070.300
DEFERRED TAX LIABILITIES		2.070	2.070	0.000
TOTAL		3542.988	3329.917	2938.000
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		754.909	733.045	679.100
Capital work-in-progress		30.672	9.160	14.700
INVESTMENT		456.708	456.702	430.000
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	3054.223	2351.425	1878.800
	Sundry Debtors	1538.109	1749.043	1492.300
	Cash & Bank Balances	328.665	424.533	403.300
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	497.428	329.570	299.400
Total Current Assets		5418.425	4854.571	4073.800
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	3117.726	2625.728	2153.900
	Provisions	0.000	97.833	105.700
Total Current Liabilities		3117.726	2723.561	2259.600
Net Current Assets		2300.699	2131.010	1814.200
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		3542.988	3329.917	2938.000

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		40942.086	31247.894	29565.300
Operating Income		549.198	364.956	0.000
Other Income		1356.689	344.184	369.400
Total Income		42847.973	31957.034	29934.700
Profit/(Loss) Before Tax		1742.792	675.724	629.900
Provision for Taxation		363.516	152.735	176.600
Profit/(Loss) After Tax		1379.276	522.989	453.300
Earnings in Foreign Currency :		1.846	2.314	NA
Imports :
	Capital Goods	5.699	1.249	NA
	Others	68.919	35.678	NA
Total Imports		74.618	36.927	NA
Expenditures :
	Cost of Goods Sold	38762.324	29331.805	0.000
	Manufacturing Expenses	0.000	0.000	144.100
	Administrative Expenses	0.000	0.000	727.300
	Expenses	2218.144	1838.326	0.000
	Raw Materials	0.000	0.000	27389.000
	Employee Cost	0.000	0.000	690.400
	Increase/(Decrease) in Finished Goods	0.000	0.000	(293.200)
	Interest	0.000	0.000	127.200
	Miscellaneous Expenses	0.000	0.000	368.200
	Power & Fuel	0.000	0.000	49.000
	Depreciation & Amortization	124.713	111.179	102.800
Total Expenditure		41105.181	31281.310	29304.800

KEY RATIOS

PARTICULARS	31.03.2007	31.03.2006	31.03.2005
Debt-Equity Ratio	0.50	0.57	0.65
Long Term Debt-Equity Ratio	0.09	0.34	0.65
Current Ratio	1.33	1.51	2.06
TURNOVER RATIOS
Fixed Assets	27.6	22.87	23.67
Inventory	15.34	14.94	17.16
Debtors	25.22	19.5	22.34
Interest Cover Ratio	6.15	5.11	5.95
Operating Profit Margin(%)	2.89	3.01	2.91
Profit Before Interest And Tax Margin(%)	2.59	2.66	2.56
Cash Profit Margin(%)	1.99	2.01	1.88
Adjusted Net Profit Margin(%)	1.69	1.65	1.53
Return On Capital Employed(%)	31.30	26.82	25.89
Return On Net Worth(%)	30.56	26.17	25.53

LOCAL AGENCY FURTHER INFORMATION

BUSINESS REVIEW: 

The performance of the Company for the year has been impressive, recording a turnover of Rs.40940 Millions reflecting a growth of 31% as compared to the previous year. The Net Profit before Tax for the year was Rs.1742.700 Millions as against Rs.675.700 Millions of last year. The results are detailed in the Profit and Loss Account attached hereto.

The Company continues to intensify its focus on customer service. The business climate for the current year is likely to be challenging; however, by pursuing several initiatives and measures, the Company expects to achieve satisfactory results. 

DIVIDEND: 

The Board of Directors have distributed a total dividend of 815% on the paid-up capital of the Company amounting to Rs.93236.000 Millions for the year ended 31.3.2007. The Directors now propose that the interim dividends paid be treated as final dividend for the year.  

CONTINGENT LIABILITIES NOT PROVIDED FOR

	(As on 31.03.2007) Rs. In millions
To Banks – On cheques discounted
On Counter Guarantees	89.913
On Letters of Credit	145.683
Uncalled Liability on Partly paid shares	0.004
Estimated amount of contracts remaining to be executed on capital account not provided for	30.348
Claims against the Company not acknowledged as debts	0.033
Disputed Sales Tax Liability	16.452
Disputed Service Tax Liability	3.507
Demand for Lease charges by Corporation of Bangalore – appeal filed	0.375

FIXED ASSETS 

· Freehold Land

· Leasehold Land

· Plant and Machinery

· Furniture, Fittings and Equipments

· Transport Vehicles

· Aircraft

· Patent Rights and Patterns

· Software

WEB DETAILS

Profile

The TVS Group is one of India's largest industrial conglomerates. Subject, established in 1911, is the parent and holding company of the TVS Group.

The  largest automobile distribution company in India, Subject   has   attained  a turnover exceeding US$ 1 Billion  (INR 40,000 Million) and  has an employee strength of 4000. Subject operates through the three following divisions:

· TVS

· Sundaram Motors

· Madras Auto Service

Business

Being the trading and distribution arm of the group, the business activities of TVS and Sons include Dealerships for automobile vehicles, Distribution of spares for after-market, Sales and service support for Garage Equipment, Sales and Service of Products for Special applications like construction and Material handling and providing Customer Centric Services for Car customer under the brand “MyTVS".

TVS and Sons has grown into a leading logistics solution provider and has set up state-of-the-art warehouses all over the country.

The Global business operation of the company includes managing Joint Ventures in Bangladesh, Sri Lanka, Thailand, UK, USA and Europe for automobile distribution / dealership business, Sourcing and Supply chain related activities. The company is also present in Africa through Consultancy Services.

Dealers Located at

Honda

· Chennai

· Secunderabad

· Vishakhapatnam

Fiat

· Chennai

· Vellore

· Bangalore

Ford

· Secunderabad

· Vishakhapatnam

Mercedes Benz

· Bangalore

· Chennai

· Coimbatore

Spare parts

· Ahmedabad

· Bangalore

· Bellari

· Belgaum

· Chennai

· Cuddapah

· Cuttack

· Goa

· Gulbarga

· Hubli

· Kolhapur

· Mangalore

· Mysore

· Nagpur

· Nellore

· New Mumbai

· New Delhi

· Pune

· Rajkot

· Secunderabad

· Shimoga

· Vellore

· Vijayawada

· Vishakhapatnam

Ashok Leyland

· Bangalore

· Bellary

· BijaPUR

· Hubli

· Mysore

· Shimoga

· Vellore

Distributor Companies

India Motor Parts and Accessories Limited	Distributors of automotive components
Lucas Indian Service Limited	Distributors of auto electrical and auto components, Fuel Injection Equipment, LISPART and Batteries.
T V Sundaram Iyengar and Sons Limited	Distributors of passenger cars, commercial vehicles, automotive spare parts

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.48.79
UK Pound	1	Rs.75.41
Euro	1	Rs.61.48

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	8
--PROFITABILIRY	1~10	8
--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	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		72

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.	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