MIRA INFORM REPORT

Report Date :

17.11.2008

IDENTIFICATION DETAILS

Name :	AHMEDNAGAR FORGINGS LIMITED
Registered Office :	Gate No. 614, Village Kuruli, Khed, Pune - 410501, Maharashtra
Country :	India
Financials (as on) :	30.06.2007
Date of Incorporation :	21.03.1977
Com. Reg. No.:	019569
CIN No.: [Company Identification No.]	L28910MH1977PLC019569
TAN No.: [Tax Deduction & Collection Account No.]	PNEA05185F
PAN No.: [Permanent Account No.]	AACCA3454H
Legal Form :	A public limited liability company. The company’s shares are listed on the Stock Exchanges
Line of Business :	Manufacture and Distribution of High-Precision Closed Die Steel Forgings and Auto Components for the Automotive, Defence and Railway Industries.

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 15780000
Status :	Satisfactory
Payment Behaviour :	Slow
Litigation :	Clear
Comments :	Subject is a well established company having satisfactory track. Trade relations are fair. Subject’s current year and future performance is expected to be affected due to global meltdown and recession in the industry. It may ultimately affect the payment behaviour of the subject resulting into delay. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	Gate No. 614, Village Kuruli, Khed, Pune - 410501, Maharashtra, India
Website :	http://www.amtek.com
Corporate Office :	The Great Eastern Plaza, 604, 6th Floor, 1996 A, Airport Road, Near Gunjan Theatre, Yerwada, Pune - 411 006, Maharashtra, India
Factory :	Located At: MIDC Area, Ahmednagar Chakan, Dist. Pune Kuruli, Dist. Pune Nalagarh, Distt. Solan, Himachal Pradesh

DIRECTORS

Name :	Mr. Arvind Dham
Designation :	Chairman
Name :	Mr. A. K. Syal
Designation :	Managing Director
Name :	Mr. D. S. Malik
Designation :	Director
Name :	Mr. S. E. Krishnan
Designation :	Director
Name :	Mr. B. Lugani
Designation :	Director
Name :	Mr. Gautam Malhotra
Designation :	Director

KEY EXECUTIVES

Name :	Mr. Prabhjot Singh Ahluwalia
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.06.2007

Category of Shareholder	No. of Shares	Percentage of Holding
Shareholding of Promoter and Promoter Group^2
Indian
Bodies Corporate	16666665	50.17
		0
Public shareholding		0
Institutions		0
Mutual Funds/ UTI	2848895	8.58
Financial Institutions ^/Banks	94207	0.28
Foreign Institutional Investors	7587316	22.84
		0
Non-institutions		0
Bodies Corporate	2348961	7.07
Individuals		0
Individuals -i. Individual shareholders holding nominal share capital up to Rs 0.100 Million	2107642	6.34
ii. Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	1379253	4.15
Any Other	187061	0.57
TOTAL	33220000	100.00

BUSINESS DETAILS

Line of Business :

Manufacture and Distribution of High-Precision Closed Die Steel Forgings and Auto Components for the Automotive, Defence and Railway Industries.

PRODUCTION STATUS

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Steel Forgings	M.T.	110000	110000	60711

GENERAL INFORMATION

Customers :

Ashok Leyland, Bajaj Auto, Bharat Earthmovers (BEML), Eicher Motors, Gajra Gears, Hero Honda, Honda Motor Siel India (HMSI), HV Transmission, JCB Earthmovers, Kinetic Engineering, Mahindra and Mahindra (M&M), Tata Motors, TVS Motors, Railways and Defence. Tata Motors, Electro Motive Diesel (EMD), Engines and Locomotives, GWK, King Automotive Systems, Magna International (Canada), Precision Camshafts, Sanden, etc.

Bankers :

• Andhra Bank
• Karur Vysya Bank

Facilities :

Secured Loans :

	As on 30.06.2007 Rs. in Millions
Bank Borrowings	466.442
Loans from Financial Institutions	617.500
Total	1083.942

Notes :

NCD’S/Term debts from Financial Institutions/Banks are secured by way of first mortgage of company’s all immovable properties ranking pari passu interse and hypothecation of whole of the company’s movable properties including Plant and Machinery, Machinery Spares, Tools and Accessories (save and except book debts) present and future, subject to prior charges created/to be created in favour of the company’s bankers on inventories book debts and other specified movables for securing the borrowing for working capital requirements and loans under EFS/ECS/HP Lease Schemes, if, any are secured by way of charge on the specified assets financed under the scheme.

Banking Relations :	Satisfactory
Auditors :
Name :	Manoj Mohan and Associates Chartered Accountants
Holding Company :	Amtek Auto Ltd.
Group Companies :	Amtek Group 3, Local Shopping Centre, Pamposh Enclave, G.K. - 1, New Delhi - 48 e-mail:  info@amtek.com web: http//:www.amtek.com Phone: 91-11- 4234 4444 Fax: 91-11- 42344000
Subsidiary of Holding Company :	Amtek Crankshafts India Ltd. (Formerly Amtek Siccardi India Ltd.) Zelter GmbH

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
35000000	Equity Shares	Rs.10/- each	Rs.350.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
33220000	Equity shares	Rs.10/- each	Rs.332.200 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		30.06.2007	30.06.2006	30.06.2005
SHAREHOLDERS FUNDS
1] Share Capital		332.200	332.200	80.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		2825.236	2243.646	678.200
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		3157.436	2575.846	758.200
LOAN FUNDS
1] Secured Loans		1083.942	1017.500	497.400
2] Unsecured Loans		144.398	115.456	125.600
TOTAL BORROWING		1228.340	1132.956	623.000
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		4385.776	3708.802	1381.200
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		3929.753	3322.904	661.200
Capital work-in-progress		0.000	0.000	371.000
INVESTMENT		9.235	14.235	16.200
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	900.845	636.869	483.100
	Sundry Debtors	513.903	391.428	245.200
	Cash & Bank Balances	65.860	97.222	128.700
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	324.580	181.660	94.800
Total Current Assets		1805.188	1307.179	951.800
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	1175.313	818.138	611.400
	Provisions	187.487	126.178	20.800
Total Current Liabilities		1362.800	944.316	632.200
Net Current Assets		442.388	362.863	319.600
MISCELLANEOUS EXPENSES		4.400	8.800	13.200
TOTAL		4385.776	3708.802	1381.200

PROFIT & LOSS ACCOUNT

PARTICULARS		30.06.2007	30.06.2006	30.06.2005
Sales Turnover		5999.650	3754.277	1662.200
Other Income		0.000	0.000	396.000
Total Income		5999.650	3754.277	2058.200
Profit/(Loss) Before Tax		975.822	574.862	299.500
Provision for Taxation		316.501	165.841	90.800
Profit/(Loss) After Tax		659.321	409.021	208.700
Expenditures :
	Manufacturing Expenses	4496.137	2789.389	120.700
	Administrative Expenses	91.382	83.727	68.300
	Raw Material Consumed	0.000	0.000	1254.800
	Personnel Expenses	187.145	149.173	0.000
	Increase/(Decrease) in Finished Goods	0.000	0.000	(86.300)
	Interest and Financial Expenses	128.023	53.574	43.500
	Power & Fuel	0.000	0.000	180.500
	Depreciation & Amortization	121.141	103.552	41.800
	Miscellaneous Expenses	0.000	0.000	5.700
	Employees Cost	0.000	0.000	129.700
Total Expenditure		5023.828	3179.415	1758.700

SUMMARISED RESULTS

PARTICULARS	30.06.2008
Type	Full Year
Sales Turnover	6611.600
Other Income	0.000
Total Income	6611.600
Total Expenditure	5330.200
Operating Profit	1281.400
Interest	165.300
Gross Profit	1116.100
Depreciation	195.400
Tax	141.300
Reported PAT	634.400

QUARTERLY RESULTS

PARTICULARS	30.09.2008
Type	1^st Quarter
Sales Turnover	1505.200
Other Income	0.000
Total Income	1505.200
Total Expenditure	1223.300
Operating Profit	281.900
Interest	53.600
Gross Profit	228.300
Depreciation	58.000
Tax	58.100
Reported PAT	112.200

KEY RATIOS

PARTICULARS	30.06.2007	30.06.2006	30.06.2005
Debt Equity Ratio	0.41	0.53	0.68
Long Term Debt Equity Ratio	0.41	0.53	0.68
Current Ratio	1.35	1.43	1.32
TURNOVER RATIOS
Fixed Assets	2.00	2.45	1.86
Inventory	7.52	6.39	3.87
Debtors	12.78	11.24	7.18
Interest Cover Ratio	8.62	11.72	7.89
Operating Profit Margin (%)	21.17	20.45	23.15
Profit Before Interest and Tax Margin (%)	19.08	17.56	20.64
Cash Profit Margin (%)	13.49	14.32	15.07
Adjusted Net Profit Margin (%)	11.40	11.43	12.56
Return on Capital Employed (%)	27.32	24.80	31.71
Return on Net Worth (%)	23.00	24.54	31.92

LOCAL AGENCY FURTHER INFORMATION

HISTORY:

Subject is the largest forging manufacturer in the small and medium component segment. The company is engaged in the manufacture of high precision closed die steel forgings and auto components for the automotive, defence and railway sectors. The major customers of the company include Fairfield Atlas, USA, Cummins, King Automotive Systems Limited, Coventry, Letchworth, Zelter GmbH and Hennef. 

The company specializes in products like connecting rods and caps, crankshafts and camshafts, steering levers, gear shifter forks, sector gears and shafts, front impact beams drive shafts, spindlers, hubs and flanges, transmission components, steering parts, pistons, propeller fork shafts, stub-axles, front axle beams, front and rear axle shafts. Their manufacturing facilities are located at Ahmednagar, Chakan, Kurli in Maharashtra and Solan in Himachal Pradesh. 

Subject was incorporated in the year 1977. During the year 1992-93, the company acquired a sick unit at Ahmednagar from SICOM to manufacture cold forgings. This unit was renamed Asian Auto Parts, a division of the company and the production of Cold Forgings was started during the year 1993-94. During the year 1997-98, the company set up the fourth unit at Kurli in Charkran which has madern press forging line and the fourth press has commenced their production in the year 2001.

During the year 2002-03, the company was acquired by Amtek Auto Limited, which is the largest manufacturer of connecting rod assemblies in the country. Thus, the company became the subsidiary of Amtek Auto Limited. The company's plant at Ahmednagar has successfully qualified for TS Certification from BVQI and the fastener division at Ahmednagar has also been accredited with ISO Certification during the year. 

During the year 2004-05, the company increased the production capacity of Steel Forgings and Finished/ Semi Finished Steel Forgings by 10000 MT and 5000 MT respectively. During the year 2005-06, they further increased the production capacity of Steel Forgings and Finished/ Semi Finished Steel Forgings by 28000 MT and 3950 MT respectively. In May 2005, the company sold their Fastner Division of the company situated at Ahmednagar in Maharashtra. 

During the year 2006-07, the company expanded their forging capacities from 90000 TPA to 110000 TPA by increasing the capacity at Kurli in Maharashtra. The company has approved the merger of the company with Amtek Auto Limited.

DIVIDEND 

The Directors of the Company are to recommend a dividend of 20% for the year 2006-07 i.e. Rs. 2.00 per equity shares on fully paid up equity shares of Rs. 10/- each. The proposed dividend, if approved at the ensuing Annual General Meeting, would result in appropriation of RS. 77.731 millions (including Corporate Dividend Tax of Rs.11.291 millions) out of the profits. The Company has made transfer of Rs.400.000 millions to the General Reserve. The total appropriation of dividend of Rs.77.731 millions gives 11.79% payout on net profit of the Company. 

The Register of members and share transfer books shall remain closed from 26th December 2007 to 31st December 2007 (both days inclusive), for the purpose of Annual General Meeting and payment of dividend. 

FINANCIAL PERFORMANCE 

During the year, the company has recorded a turnover of Rs.5999.650 millions as against a total income of Rs.3754.277 millions, thus recording a growth of more than 59 % over the previous year. The profit after tax of the Company for the year stands at Rs.659.321 millions as against the corresponding year figure of Rs.409.021 millions thus reflecting a growth of more than 60% over the previous year. The Company has strong reserve position of Rs.2825.236 millions. 

EXPANSION OF CAPACITIES 

The company, during the year, has ramped-up its forging capacities from 90000 TPA to 110000 TPA by increasing capacities at the existing plant situated at Kuruli (Maharashtra). 

DE-MATERIALISATION OF SHARES 

The Company's equity shares are available for de-materialization on both the depositories viz., NSDL and CDSL. Shareholders may be aware that SEBI has made trading in the company's shares mandatory, in de-materialized form. As on 30th June 2007, 3,02,02,619 equity shares representing 90.91% of the Company's Equity shares capital, have been de-materialised. 

MANAGEMENT DISCUSSION AND ANALYSIS 

THE FORGING INDUSTRY - AN OVERVIEW 

Forgings 

Forgings refers to the process of molding metal as per the required shape and size. Forgings are much superior compared to castings/rolled products due to better directional strength, structural integrity, high impact, toughness and fatigue properties. Also, the superior strength and durability of forgings make them ideal for applications where reliability and safety are a concern. Forgings are produced through various methods, which include open die forging, closed die forgings and precision forgings. 

The automobile industry is the key driver of forgings demand and consumes over 2/3rd of the total forging production. The growth of the forging industry, to a large extent, is dependent upon the growth of the automobile industry. Other industries that consume forgings include engineering, railways, defence, chemical process industries, oil exploration, cement, steel industry etc. 

Forgings industry in India 

The Indian Forging industry comprises of some 330 odd with units an installed capacity to press 1 million meteric tones per annum, involving an investment of US$ 700 million (approx) and employing over 38,000 people. The industry operates at 75%-80% capacity and the output is roughly estimated at US$ 1800-2000 million. Assuming a growth rate of 15%-16% in FY06-07, the industry output should be valued at US$ 2500 million in FY 07. 

Exports account for approximately 15%-16% of forging output, which is approximately 15% of total auto components exports from India. This would mean exports of US$ 250-300 million in FY 05 and US$450-$500 million in FY07. The export revenue is expected to experience a CAGR of 33%-34% during the next 3-5 years.

The industry can be categorized into four sectors-large, medium, small and tiny. As is the case world over, a major portion of this industry is made up of small and medium units/enterprises (SMEs) 

The large enterprises accounts for only 5% of the industry in terms of the number of units in operation. Out of the 330 odd units, the number of large units is only 9-10 while the number of medium and small sectors is about 100 units. The tiny sector has huge number of units which is difficult to estimate. 

This pyramidal structure of the industry indicates maximum competition and lowest margins in the small and tiny sector units, which primarily cater to replacement, small, sized and low value markets. The medium and large forging units are high in quality and value driven, and hence are chosen as suppliers by the Original Equipment Manufacturers (OEMs) in the automobile sector. 

PERFORMANCE OF THE INDIAN FORGING INDUSTRY DURING THE YEAR 2006-07 

The year 2006-07 (April-March) was a good year for the Forging industry. The revival which started in October 2002 picked up momentum since last few years. Overall production of forgings increased to reach about 9,83,000 tonnes in the year. Capacity utilization also improved considerably from 40-50 percent in earlier years to 65 per cent of the additional capacity added during the last two years (1.5 Million approx) inclusive of overseas aquisitions. This was largely due to the revival in demand from the automotive sector and particularly the passenger car segment which recorded an excellent performance in both the domestic market and exports. 

While the automotive industry is the main customer for forgings, the industry's continuous efforts in upgrading technologies and diversifying product range have enabled it to expand its base of customers to foreign markets. The Indian forging industry is increasingly addressing opportunities arising out of the growing trend among global automotive OEMs to outsource components from manufacturers in low-cost countries. As a result, Indian forging industry has been making significant contributions to country's growing exports. 

The industry's exports recorded a growth of almost 20% in 2006-07 and have reached a level of US$ 360 million. Technological developments have also contributed to export growth. The industry's major markets are USA, Europe and China. However, only about 30-35 manufacturing units are currently directly engaged in exports. Efforts of AIFI are to attract more manufacturing units to export. This is being done through increased facilitation by way of organizing Training Sessions, Workshops, Trade Fairs Exhibitions, Buyer-Seller Meets etc. The technology gap is therefore, being sought to be bridged so that companies are prepared to face challenges of global markets. 

Inorganic growth is another strategy being used by Indian companies to expand their global footprint and establish a global presence in some of the world's largest markets 

BUSINESS OF SUBJECT 

Diversified product portfolio 

AFL manufactures products like piston assemblies for railway locomotives, crown wheels and pinions, rear-axle shafts, hub assemblies, crankshafts for heavy and medium commercial vehicle applications (including farm equipment), two-wheeler cranks, steering knuckles, connecting rods and caps, spiders and gear shifter forks. Some of these components supplied by AFL are only forged, some are semi machined while others are fully machined. The machined components add more value to the output and enjoy higher margin contribution. 

Impressive customer profile 

In the domestic market, AFL is a tier-I supplier to Ashok Leyland, Bajaj Auto, Bharat Earthmovers (BEML), Eicher Motors, Gajra Gears, Hero Honda, Honda Motor Siel India (HMSI), HV Transmission, JCB Earthmovers, Kinetic Engineering, Mahindra and Mahindra (M&M), Tata Motors, TVS Motors, Railways and Defence. Tata Motors is the biggest client of the company in the domestic market. The list of overseas clients include Cummins, Electro Motive Diesel (EMD), Engines and Locomotives, GWK, King Automotive Systems, Magna International (Canada), Precision Camshafts, Sanden, Volvo and Zelter GmbH. Zelter would become the biggest client in the overseas market in FY09. 

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE 

During the period, the total sales and other income increased by more than 59% to Rs.5999.650 millions from Rs.3754.277 millions in the previous year. 

The Gross profit before taxation has increased from Rs.574.862 millions during the previous period to Rs.975.822 millions during the current period registering an increase of 70%. 

The Profit after tax has also increased from Rs.525.145 millions during the previous period to Rs.865.234 millions representing an increase of 65%. 

During the year ended 30th June 2007, the Company has Reserve and Surplus amounting to Rs.2825.236 millions as compared to Rs.2243.646 millions in the previous year. 

All the units of the company operated satisfactorily during the year. 

FIXED ASSETS:

• Land and Site Development (including Leasehold)
• Building
• Plant and Machinery
• Furniture and Fixtures
• Office Equipment
• Data Processing Unit
• Vehicle

WEBSITE DETAILS:

Subject was incorporated under the Companies Act and registered with the Registrar of Companies, Mumbai Maharashtra, under registration No. 19569 on 21 March 1977. The registered office of subject is currently situated at Gat No. 614 at Village Kuruli, Tal Khed, Pune District, 410501.

Acquisition of subject

Amtek acquired subject in order to establish a manufacturing business in Western India, as there were a number of automotive companies which were being supplied by subject in that region. On 10 October 2002 the Company acquired 1,183,790 fully paid-up equity shares of Rs.10 each in subject, representing 14.8 percent. Of its issued, subscribed and paid-up equity share capital, at a price of Rs. 34.50 per share from the promoters of subject, their friends, relatives and associates. The Company also entered into an agreement with the promoters of subject on 10 October 2002 to acquire from them an additional 2,457,660 fully paid equity shares of Rs. 10 each, representing 30.72 percent. Of the issued, subscribed and paid-up capital of subject, at a price of Rs. 34.50 per share.

Consequent to entering into the agreement with the promoters of subject, the Company made an open offer to the existing shareholders of subject pursuant to the SEBI Takeover Regulations to acquire up to 1.6 million additional paid-up equity shares of Rs. 10 each representing 20 per cent. Of the voting capital of subject. The offer price for the acquisition of subject's share was fixed in accordance with the SEBI Takeover Regulations at a price of Rs. 34.50 per share being the highest price paid under the agreement. The offer was opened on 4 December 2002 and closed on 2nd January 2003.

As of 31st December 2006 the Company held 16,666,65 shares in subject, representing 50.17 per cent of its issued share capital.

Business of subject

Subject is a manufacturer of forging and machined automotive components, cold forged parts and high tensile fasteners. Subject has four plants; two of them are located at Ahmednagar, Maharashtra and the other two near Pune, Maharashtra. One of subject's plants at Ahmednagar also manufactures high tensile fasteners and cold-formed components. Subject supplies products to its customers based on the technical specifications provided by them.

Capital structure of subject

The authorised share capital of subject is Rs. 350 million divided into 35,000,000 equity shares of Rs. 10 each. The issued, subscribed and paid - up share capital of subject is 33,220,000 equity shares of Rs. 10 each aggregating to Rs. 332.2 million. The equity shares of subject are issued in physical and dematerialised form and are presently listed on the BSE and NSE.

Management of subject

The current directors of subject are Mr.A.Dham, Mr.D.S.Malik, Mr.S.E.Krishnan, Mr. A.K. Syal and Mr.B.Lugani.

Smith Jones Inc.

Smith Jones Inc. ("Smith Jones") is a company incorporated and existing under and in accordance with the provisions of the Minnesota Business Corporation Act, Minnesota, Minnesota Statutes, Chapter 301 in the State o Minnesota in the United States of America. The company was incorporated on 6th March 1972. The registered office of Smith Jones at the time of incorporation was 4771, West Coventry Road, Minnetonka, Minnesota 55343. The current registered office of Smith Jones is at 35, Century Avenue SE, Hutchinson, Minnesota 55350, as set out in its Amended and Restated Articles of Incorporation.

Acquisition of Smith Jones

Amtek acquired Smith Jones, a manufacturer of flywheel ring gears in the United States and one of the largest manufacturers of flex plate assemblies, for a cash payment of U.S.$1.2 million on 20 December 2002. On the day prior to the acquisition, Smith Jones merged with Midwest International Inc. which transferred all of its operations to Smith Jones and was then wound up. Smith Jones continues to use Midwest International Inc. and Midwest Manufacturing Inc. as trading names.

Business of Smith Jones

Smith Jones produces various automotive components, including flywheel ring gear, rolled rings and flex plate assemblies.

Capital Structure

The issued and paid-up capital stock of the company is U.S. $1050.70 comprising of 105,070 shares of one cent each ($0.01). The entire issued and paid-up share capital of Smith Jones is owned by Amtek.

Management of Smith Jones

Mr.A.Dham is currently the sole director of Smith Jones and Mr.L.Southwick is the company secretary and treasurer. Mr.D.Sandeen is the president of Smith Jones.

Amtek Investments (UK) Limited/GWK Amtek Limited

The UK operations of Amtek are held through its wholly-owned subsidiary Amtek Investments (UK) Limited ("Amtek UK"), which in turn owns 100 percent of the issued share capital of GWK Amtek Limited ("GWK"). The 85 percent holding in GWK was acquired by Siccardi on 24 October 2003 (the "GWK Initial Acquisition") through its then wholly-owned subsidiary, Amtek UK for a consideration of $13,250,000. Siccardi subsequently sold Amtek UK to Amtek Auto on 24 June 2004 for $5,000,000 (the "GWK Subssequent Acquisition").

History of Amtek UK

Amtek UK was incorporated in England on 18 April 2003 as "HS174 Limited" with registered number 4739524. It changed its name to "Amtek Investments (UK) Limited" on 15 December 2003. It has an authorised share capital of $5,000,000 ordinary shares of $1.00, the entirety of which were issued to Amtek Siccardi on 17 October 2003. Its registered office address is Blockhouse Road, Letchworth, Hertfordshire, SG6 1GE.

Business of GWK

GWK was incorporated with registered company number 3326288 in England and Wales on 28 February 1997 with the name Foray 1011 Limited. It subsequently changed its name to "GWK Groups Limited" On 1 May 1997 and to "GWK Amtek Limited" on 20 November 2003. GWK's registered office address is Blockhouse Road, Letchworth, Hertfordshire SG6 1GE.

GWK was incorporated by the management team of GEO W.King Limited and King Automotive Systems Limited to acquire the entire issued share capital of GEO from Krupp Camford Limited and Dortmunder Plastic GmbH in a management buy out. The management buy out was funded in part by contributions from members of the 3i group of investment companies who received shares of various classes in GWK. GWK has three subsidiaries : GEO W.King Limited ("GEO"), GWK Group Employee Trust Limited ("GWK Trust") and King Automotive Systems Limited ("King"). These companies are incorporated in England and Wales.

GEO was established in 1973 as an engineering company, with a business history dating back to circa 1914. The purchase of the entire issued share capital of GEO by GWK was completed on 1 May 1997.

King was incorporated as King (TI) Limited on 18 November 1969, and its shares were acquired by GEO on 12 June 1974. AT the time of the buy out the entire issued share capital of King was held by GEO, but was subsequently transferred to GWK on 26 June 1997.

GWK Group Employee Trust Company was incorporated in the United Kingdom on 25 February 1999 as a subsidiary of GEO and was acquired by GWK on 8 April 1999. It is currently in the process of being wound up, as its sole purpose was, until the Initial Acquisition, to act as Trustee of the GWK Group Employee Benefit Trust. This Trust granted options over shares in GWK, on 26 June 1997.

GWK Group Employee Trust Company was incorporate din the United Kingdom on 25 February 1999 as a subsidiary of GEO and was acquired by GWK on 8 April 1999. It is currently in the process of being wound up, as its sole purpose was, until the Initial Acquisition, to act as Trustee of the GWK Group Employee Benefit Trust. This Trust granted options over shares in GWK, all of which were exercised by the time of the Acquisition.

The GWK Group is a Tier-I company involved in the assembly and machining of components for the automotive industry. The GWK Group buys in aluminium and cast iron castings, and machines them to a pre-defined specification, for example in the manufacture of car engine parts, manifolds, discs etc. It also undertakes a substantial amount of assembly work, where it buys in all or nearly all of the components for an automotive assembly, and assembles them. The group has two sites, one in Letchworth, Hertfordshire, and the other in Coventry.

Management of GWK

The current directors of GWK are Mr.R.A. Churchman, Mr.A.Davidson, Mr. A.Dham, Mr.J.Flintham, Mr.K.Parker,

Mr.P.Paul and Mr.A.Sayal. All of the directors are actively involved in the management of the GWK Group, although several have other responsibilities within the Amtek Group.

Amtek Investments U.S.1. Inc.

Amtek Invesments U.S.1, Inc. ("U.S.I.") was incorporated in the State of Delaware in the United States of America on 8 December 2004. The registered office of U.S. 1 is situated at 5300 Macikanaw Road, Bay City, Michigan,  U.S.A.

Capital Structure of U.S.1

The issued and paid-up capital of U.S.1 is U.S.$2.25 million, and is held entirely by the Company.

Management of U.S.1

The current directors of U.S.1 are Mr.John E.Flintham, Mr.Roderick Brett Welch and Mr.Phil A. Smith.

Subsidiary Company

U.S.1 is the holding company of Amtek Gear Inc. (U.S.A.)

Amtek Gear Inc. (U.S.A.)

Amtek Gear Inc. (U.S.A.) ("AGI") was incorporated in the State of Delaware in the United States of America on 8 December 2004. AGI's head office and principal place of business is situated at 5300 Macikanaw Road, Bay City, Michigan, U.S.A.

Business of AGI

AGI was incorporated for the purpose of carrying out commercial activities including but not limited to the manufacture of automotive components and assemblies. AGI is currently producing starter ring gears for various customers such as Tesma, General Motors, Ford and Brigges and Stradtton.

Capital Structure

The issued and paid-up capital of AGI is U.S.$2.25 million, and is held entirely by U.S.1.

Management of AGI

The current directors of AGI are Mr.John E.Flintham, Mr.Roderick Brett Welch, Mr.Phil A. Smith and Mr.Paul F.Fields.

Amtek Deutschland GmbH/Zelter GmbH

The German operations of Amtek are held through its wholly-owned subsidiary Amtek Deutschland, which in turn owns 70 percent. Of the issued share capital of Zelter. The consideration for the acquisition was Euro 3,000,000.

History of Amtek Deutschland

Amtek Deutschland was incorporated in Germany on 11 November 2003 with registered number HRB58067. It has a share capital of Euro 639,200.

Principal Terms of the Acquisition

Pursuant to the Zelter Purchase Agreement, Amtek Deutschland purchased 70 percent of the issued share capital of Zelter. The majority of vendors were a number of individuals, who were and continue to be part of the management team of Zelter. The acquisition was structured as a share purchase of 70 percent of the issued share capital of Zelter pursuant to the Zelter Purchase Agreement with the remaining 30 percent to be sold to Amtek Auto on 15 April 2008.

Business of Zelter

Zelter was incorporated with registered company number HRB2731 in Germany on 1 January 1923. Zelter's registered office address is Bonnerstrasse, 25, 23773 Hennef, Germany.

Zelter is one of the three largest manufacturers of turbocharger housing in Germany and boasts a blue-chip customer list which includes Ford, Audi, Volkswagen, Borg Warner, Honeywell, Hasenclever and Sohn, Dieckerhoff, Schubert and Sulzer, Visteon and MHI Equipment. It has global scale manufacturing capacities at its two facilities located in Cologne, Germany. Zelter is an established Tier-I supplier to the automotive industry globally and is recognised as a leader in the turbocharger industry segment. Zelter has invested in excess of Euro 20 million over the last three years for upgrading and modernising its facilities, as well as setting up new automatic machinery lines.

Management of Zelter

The current directors of Zelter are Mr.Herman Fuchs, MR.Klaus Transzauld and Mr.Rolf Schirdaum.

Benda Amtek Limited

Benda was incorporated under the Companies Act and registered with the Registrar of Companies, NCT of Delhi and Haryana under the registration No.55 - 70717 on 12 July 1995. The registered office of Benda is currently situated at Bhanot Apartment, 4, Local Shopping Centre, Pushpvihar, New Delhi - 110055. Benda was originally incorporated with the technical and financial collaboration of Benda Kogyo Company Limited of Japan.

Acquisition of Benda

Amtek purchased 89.41 percent of the issued share capital of Benda for a total consideration of Rs. 645.5 million. Prior to the acquisition, Amtek held 7.22 percent. Of the issued share capital of Benda, bringing its entire holding in Benda to 96.63 percent. The vendors were friends, relatives and associated companies of Mr.Arvind Dham.

Business of Benda

Benda is engaged in the manufacture at its plant situated in Gurgaon of high precision engineering automotive components mainly fly wheel ring gears, assemblies for application to cars, two-wheelers, LCV, HCV, and stationary engines. Benda's flywheel ring gears production is amongst the largest in India. Benda is also an OEM supplier for Maruti Udyog Limited, Hero Honda, LML, ILJIN (Hyundai), Escorts, Eicher, Mahindra, Telco, Hyundai, New Holland Tractors, L&T John Deere, Yamaha, Bajaj Auto, Simpson, Hindustan Motors, Honda Scooters and Sumitomo Corporation etc. Benda is also a major supplier to the replacement market.

Benda has one subsidiary, namely Lloyd's (Brierley Hill) Limited ("Lloyd's"). Lloyd's was established in 2 April 2003 as a marine chain manufacturer.

Capital Structure of Benda

The authorised share capital of Benda is Rs. 160 million divided into 16 million equity shares of Rs. 10 each. The issued and paid-up share capital of Benda is 11,728,670 equity shares of Rs. 10 each aggregating to Rs. 117.3 million.

Management of Benda

The current directors of Benda are Mr.Arvind Dham, Mr.Sanjeev Bhasin, Mr.S.E.Krishnan, A.K.Mehta, Mr.Koji Yashior and Mr.Takashi Yamane.

Amtek Siccardi India Limited

Siccardi was incorporated under the Companies Act and registered with the Registrar of Companies, NCT of Delhi and Haryana under the registration No.55 - 86695 on 15 April 1997. The registered office of Siccardi is currently situated at Bhanot Apartment, 4, Local Shopping Centre, Pushpvihar, New Delhi - 110055

Acquisition of Siccardi

Amtek purchased 100 percent of the issued share capital of Siccardi for a total consideration of Rs. 873.2 million. The vendors were friends, relatives and associated companies of Mr.Arvind Dham.

Business of Siccardi

Siccardi is engaged in the manufacture at its plant situated in Northern India of manufacturing high precision engineering automotive components, mainly crankshafts for application to two wheelers, tractors, LCV, HCV, passenger cars and stationary engines. Siccardi is the largest manufacturer of Crankshaft assemblies in Northern India and is an OEM supplier for companies including Eicher, New Holland Tractor, Mahindra and Mahindra, Fiat India, L&T John Deere, Yamaha, Maruti Udyog Limited, ILJIN (Hyundai), Hero Honda, LML, TVS Suzuki, Ashok Leyland, Honda Scooters and Piaggio. The company also is a major supplier to the replacement market.

Siccardi has one subsidiary, namely Amtek Aluminium Castings UK Limited ("Amtek Aluminium"). Amtek aluminium was established in June 2005 as a manufacturer of Aluminium Castings.

Capital Structure of Siccardi

The authorised share capital of Siccardi is Rs. 110 million divided into 11 million equity shares of Rs. 10 each. The issued and paid-up share capital of Siccardi is 9,922,470 equity shares of Rs. 10 each aggregating to Rs. 99.2 million.

Management of Siccardi

There current directors of Siccardi are Mr.Arvind Dham, Mr.S.E.Krishnan and Mr. Vinod Uppal.

BOARD OF DIRECTORS:

The Business of the Company is managed by the Board of Directors. The functions of the Board include formulation of strategic business plans, budgets, setting up goals and evaluation of performance, approving corporate philosophy and mission, monitoring corporate performance against strategic business plans, overseeing operations, recruitmemt of senior management personnel, review of material investment and fixed assets transactions, ensuring compliance with laws and regulations, keeping shareholders informed regarding plans, strategies and performance of the Company and other important matters.

The Board formulates the strategy, regularly reviews the performance of the Company and ensures that the previously agreed objectives are met on a consistent basis. The Managing Director, along with a team of professionals, manages the day-to-day operations of the Company. The Non-Executive Directors are eminent professionals, drawn from amongst persons with experience in business, industry and finance. The Board of Directors has the ideal composition with more than half the Directors being non-executive Directors. Since the Company has a Non Executive Chairman, the Board’s composition meets the stipulated requirement of at least one third of the Board comprising independent Directors, who have no professional and/or business relationship with the Company.

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.49.46
UK Pound	1	Rs.73.17
Euro	1	Rs.62.96

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	6
--CREDIT LINES	1~10	5
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		49

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