MIRA INFORM REPORT

Report Date :

16.04.2011

IDENTIFICATION DETAILS

Name :	DANBLOCK BRAKES INDIA PRIVATE LIMITED

Registered Office :	110, 1^st Floor, Rishab Corporate Tower, 16, Community Centre, Karkarduma, Delhi -110092

Country :	India

Financials (as on) :	31.03.2010

Date of Incorporation :	30.07.2007

Com. Reg. No.:	55-166422

CIN No.: [Company Identification No.]	U51504DL2007PTC166422

TAN No.: [Tax Deduction & Collection Account No.]	DELD10024A

Legal Form :	Private Limited Liability Company

Line of Business :	Manufacturer and Exporter of Brake Pads for cars and commercial vehicles.

RATING & COMMENTS

MIRA’s Rating :

B (27)

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Status :	Moderate

Payment Behaviour :	Slow But Correct

Litigation :	Clear

Comments :	Subject is a subsidiary of Mat Holdings Inc of USA engaged in manufacturing of disk brake pads. It is an established company having moderate track. There appears some accumulated losses recorded by the company. However, trade relations are fair. Business is active. Payments are reported to be slow but correct. The company can be considered for business dealings with come cautions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – April 1, 2010

Country Name

Previous Rating

(31.12.2009)

Current Rating

(01.04.2010)

India

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

LOCATIONS

Registered Office :	110, 1^st Floor, Rishab Corporate Tower, 16, Community Centre, Karkarduma, Delhi -110092, India
Tel. No.:	91-11-22376291
Fax No.:	91-11-22376291
E-Mail :	abi@danblockbrakesinindia.com vinod.duhoon@matholdingsinc.com dbi@danblockbrakesindia.com rbbform8@hdfcbank.com pkjain@roulundsbraking.com
Website :	http://www.danblockbrakesindia.com
Location :	Rented

Factory 1:	Village Ashamabad, P. O. Bahalgarh, District Sonipat - 131021, Haryana, India
Tel. No.:	91-847-2027000/ 20270020
Fax No.:	91-847-2024220
E-Mail :	info@ashapenncolour.com

Factory 2 :	Village Joshi Chohan P.O. Bahalgarh, District Sonepat-131021, Haryana, India
Tel. No.:	91-130-2110115
Location :	Owned

DIRECTORS

AS ON 30.09.2010

Name :	Mr. George Michael Ruhl
Designation :	Director
Address :	7, Rutgers Courts, Hawthron Woods, Illinois - 60047, USA
Date of Birth/Age :	06.06.1955
Date of Appointment :	30.07.2007
DIN No :	01418887

Name :	Mr. Krishnarao Pandarinath
Designation :	Managing Director
Address :	102, Galaxy Edifice, 145, 14^th Cross, 8^th Main Road, Malleshwaram, Bangalore -560003, Karnataka, India
Date of Birth/Age :	31.07.1946
Date of Appointment :	16.08.2007
Date of Ceasing :	16.04.2010

Name :	Mr. Christpher Watson
Designation :	Director
Address :	2514, Saddleridger Road, Pulaski - 24301, USA
Date of Birth/Age :	10.08.1962
Date of Appointment :	18.08.2007
DIN No :	01191277

Name :	Mr. Vasu Saksena
Designation :	Director
Address :	701, Highland Apartments, 8, Vasundhra Enclave, Delhi-110096, India
Date of Birth/Age :	26.10.1959
Date of Appointment :	19.04.2010
DIN No :	03056364

KEY EXECUTIVES

Name :	Mr. Sumit Kumar
Designation :	Secretary
Address :	65 – B, LIG Flats, Rampura, Near Lawrence Road, New Delhi – 110035, India
Date of Birth/Age :	05.10.1984
Date of Appointment :	03.01.2009

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 30.09.2010

Names of Shareholders		No. of Shares
Mat Holdings Inc., USA		5640710
GRI Engineering and Development LLC., USA		5000

Total		5645710

AS ON 30.09.2010

Equity Share Breakup		Percentage of Holding
Category
Foreign holdings [Foreign institutional investors, Foreign Companies, Foreign Financial Institutions, Non-resident Indian or Overseas corporate bodies or others]		100.00
	Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer and Exporter of Brake Pads for cars and commercial vehicles.

Products :

Product Description	ITC Code
Disk Brake Pads	6813

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Disk Brake Pads	Sets	4800000	1378512

GENERAL INFORMATION

No. of Employees :

320 (Office 20, Factory 300) (Approximately)

Bankers :

v HDFC Bank Limited

HDFC Bank House, Senapati Bapat Marg, Lower Parel (west), Mumbai -400013, Maharashtra, India

Facilities :

Secured Loan	Rs. In Millions 31.03.2010	Rs. In Millions 31.03.2009
Short Term Loan
From Scheduled Bank
Packing Credit Loan	64.038	57.960
Interest Accrued and Due on above	0.041	0.019
Total	64.079	57.979

Notes :

The above bank borrowings are secured by hypothecation by way of first charge on all the stock in trade, both present and future, consisting of raw material, finished goods, goods in process of manufacturing and fixed assets movable property and all book debts, outstanding money receivables and claims and bills, due and owing to the Company.

This loan is also supported by an equitable mortgage of industrial land (by way of deposit of title deeds) as security for the due repayment created by fellow subsidiary, Roulunds Braking India Private Limited.

This credit facility is supported by a comfort letter issued by MAT Holdings Inc., USA, the Holding Company to the Bank.

Unsecured Loan	Rs. In Millions 31.03.2010	Rs. In Millions 31.03.2009
Short Term Loan
From Scheduled Bank
Credit Facility	298.006	40.010
Long Term Loan (From Others)
External Commercial Borrowing (ECB) from Holding Company	183.360	206.560
Interest accrued and due on above	0.000	0.578

Total	481.366	247.148

Notes :

This credit facility is supported by a corporate continuing guarantee issued by MAT Holdings Inc., USA, the Holding Company.

2. Amount repayable within one year Rs. 24.448 millions repayment to commence from 30.04.2010


Banking Relations :	--

Auditors :
Name :	Haribhakti and Company Chartered Accountant
Address :	3^rd Floor, 52-B, Okhla Industrial Estate, Phase III, New Delhi-110020, Delhi, India.

Holding Company :	MAT Holdings Inc., USA

Fellow Subsidiaries :	GRI Engineering and Development LLC, USA Meneta Automotive Components Private Limited, Roulunds Braking India Private Limited, Affinia MAT India Braking Private Limited, Midwest Air Technologies Inc., USA Roulunds Braking Holding APS Denmark, Roulunds Braking France SA MAT lndia Trading Company Private Limited

CAPITAL STRUCTURE

AS ON 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount

6000000	Equity Shares	Rs. 100/- each	Rs. 600.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount

5645710	Equity Shares	Rs. 100/- each	Rs. 564.571 millions

Notes : (Out of the above shares 5640710 (Previous year 2900793) shares are held by Mat Holdings Inc., USA and 5000 (previous years 5000) shares are held by GRI Engineering and Development LLC, USA)

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2010	31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		564.571	290.579	50.000
2] Share Application Money		0.000	273.992	273.992
3] Reserves & Surplus		0.000	0.000	0.000
4] (Accumulated Losses)		(86.075)	(73.762)	(29.854)
NETWORTH		478.496	490.809	294.138
LOAN FUNDS
1] Secured Loans		64.079	57.979	0.000
2] Unsecured Loans		481.366	247.148	0.000
TOTAL BORROWING		545.445	305.127	0.000
DEFERRED TAX LIABILITIES		0.000	0.000	2.981

TOTAL		1023.941	795.936	297.119

APPLICATION OF FUNDS

FIXED ASSETS [Net Block]		619.239	592.509	82.495
Capital work-in-progress		74.388	29.419	191.011

INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000

CURRENT ASSETS, LOANS & ADVANCES
	Inventories	517.065	185.324	69.593
	Sundry Debtors	48.978	61.963	0.000
	Cash & Bank Balances	31.406	70.018	46.724
	Other Current Assets	0.150	0.410	0.120
	Loans & Advances	40.051	22.435	3.667
Total Current Assets		637.650	340.150	120.104
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors			93.693
	Current Liabilities	306.367	165.655	2.677
	Provisions	0.969	0.488	0.121
Total Current Liabilities		307.336	166.143	96.491
Net Current Assets		330.314	174.007	23.613

MISCELLANEOUS EXPENSES		0.000	0.000	0.000

TOTAL		1023.941	795.936	297.119

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income	907.393	460.847	13.730
		Other Income	38.338	2.016	1.120
		TOTAL (A)	945.731	462.863	14.850

Less	EXPENSES
		Increase/(Decrease) in Finished Goods	(100.283)	(11.004)	14.320
		Materials Consumed	675.319	305.211
		Manufacturing Expenses	214.301	130.865	55.960
		Personal	97.156	47.608
		TOTAL (B)	886.493	472.680	41.640

Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		59.238	(9.817)	(26.790)

Less	FINANCIAL EXPENSES (D)		11.276	7.126	0.000

	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		47.962	(16.943)	(26.790)

Less/ Add	DEPRECIATION/ AMORTISATION (F)		60.221	29.596	0.000

	PROFIT BEFORE TAX (E-F) (G)		(12.259)	(46.539)	(26.790)

Less	TAX (H)		0.000	(2.631)	3.060

	PROFIT AFTER TAX (G-H) (I)		(12.259)	(43.908)	(29.850)

Less	PRIOR PERIOD ITEMS		0.053	0.000	0.000

Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		(73.762)	(29.854)	NA

	BALANCE CARRIED TO THE B/S		(86.074)	(73.762)	(29.850)

	EXPORT VALUE		907.394	460.847	13.726

	IMPORTS
		Raw Materials	772.044	382.805	55.480
		Packing Material	3.603	7.080	0.000
		Capital Goods	32.642	92.297	20.549
	TOTAL IMPORTS		808.289	482.182	76.029

	Earnings Per Share (Rs.)		(2.33)	(25.64)	(59.71)

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	(1.30)	(9.49)	(200.20)

Net Profit Margin (PBT/Sales)	(%)	(1.35)	(10.10)	(194.27)

Return on Total Assets (PBT/Total Assets}	(%)	(0.97)	(4.99)	(6.81)

Return on Investment (ROI) (PBT/Networth)		(0.03)	(0.09)	(0.09)

Debt Equity Ratio (Total Liability/Networth)		1.78	0.34	0.33

Current Ratio (Current Asset/Current Liability)		2.07	2.05	1.24

LOCAL AGENCY FURTHER INFORMATION

PROJECT

The Company is a subsidiary of MAT Holdings Inc., a U.S.A. based company and mainly engaged in manufacturing of disk brake pads.

BUSINESS PERFORMANCE

It is the third year of operation of the Company and there is increase in the sales by Rs. 447 Million during the year 2009-10 which is approximately twice the sales as that of last financial year.

The Company has incurred losses amounting to Rs. 12.31 Million during the year. Company is continuously working on enhancing it’s production capacity at it’s higher level and ensure to recover these losses in the coming years. The directors, are continuously looking for avenues for future growth of the Company in automotive industry.

FORM 8

Corporate identity number of the company	U51504DL2007PTC166422
Name of the company	DANBLOCK BRAKES INDIA PRIVATE LIMITED
Address of the registered office or of the principal place of business in India of the company	110, 1^st Floor, Rishab Corporate Tower, 16, Community Centre, Karkarduma, Delhi-110092, India
This form is for	Modification of charge
Type of charge	v Book Debts v Movable Property v Floating Charge
Particular of charge holder	v HDFC Bank Limited HDFC Bank House, Senapati Bapat Marg, Lower Parel (west), Mumbai-400013, Maharashtra, India E-mail : rbbform8@hdfcbank.com
Nature of instrument creating charge	Supplementary Hypothecation Agreement of Book- Debts and Stock in Trade.
Date of instrument Creating the charge	30.06.2010
Amount secured by the charge	Rs. 185.000 millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of interest Interest at the rate as may be communicated by the Bank from time to time. Terms of repayment On Demand Margin As may be stipulated by the Bank from time to time. Extent and operation of the charge Hypothecation by way of First Charge on Company's Book- Debts and Stock in Trade, etc., to secure as a continuing security as mentioned in Column No.15 below for the repayment of Rs.1.850 millions together with interest, costs, charges, expenses and other moneys due and payable by the Company to the Bank.
Short particulars of the property charged (Including location of the property)	Hypothecation first charge over the Book- Debts and Stock in Trade of the Company.
Charge identification number of the charge to be modified	10108414
Particulars of the present modification	The Charge shall now stand increased from Rs.0.650 million to Rs.1.850 millions, against the security of Book- Debts and Stock in Trade of the Company.

FIXED ASSETS:

v Plant and Machinery

v Building

v Electrical Fittings

v Tools and Dies

v Vehicles

v Computers (Other than Software)

v Furniture and Fixtures

v Office Equipments

v Software

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.44.52
UK Pound	1	Rs.72.72
Euro	1	Rs.64.41

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	3
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	3
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	3
--CREDIT LINES	1~10	2
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		27

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	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
--	NB	New Business	--

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

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.

MIRA INFORM REPORT

517.065

48.978

31.406

0.150

40.051

637.650

306.367

0.969

307.336

330.314

(1.30)

(1.35)

(0.97)

(0.03)

1.78

2.07

Unit