MIRA INFORM REPORT

Report Date :

04.08.2011

IDENTIFICATION DETAILS

Name :	MAHINDRA FIRST CHOICE WHEELS LIMITED
Formerly Known As :	MAHINDRA TELECOMMUNICATIONS LIMITED
Registered Office :	Gateway Building, Apollo Bunder, Mumbai – 400001, Maharashtra
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	22.12.1994
Com. Reg. No.:	11-083996
Capital Investment / Paid-up Capital :	Rs. 634.307 Millions
CIN No.: [Company Identification No.]	U64200MH1994PLC083996
TAN No.: [Tax Deduction & Collection Account No.]	MUMA20137F
PAN No.: [Permanent Account No.]	AACCM0794N
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Company is engaged in the business of Trading in Used Cars.
No. of Employees :	250 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

B (26)

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

Maximum Credit Limit :	USD 1700000
Status :	Moderate
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is a part of Mahindra Group. It is an established company having moderate track. There appears to be some accumulated losses recorded by the company. However trade relations are reported as fair. Business is active. Payments are reported to be usually correct. Subject being a Mahindra Group it can be considered normal for business dealings at usual trade terms and conditions. It would be good if very slight caution in maintained on account of accumulated losses.

NOTES :

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

INFORMATION PARTED BY

Name :	Mr. Anand
Designation :	Accounts department
Date:	03.08.2011

LOCATIONS

Registered Office :	Gateway Building, Apollo Bunder, Mumbai – 400001, Maharashtra, India
Tel. No.:	91-22-24954420
Fax No.:	91-22-56607964
E-Mail :	iyer.sangameshwar@mahindra.com info@mahindra.com
Web Site:	www.mahindrafirstchoice.com
Location :	Owned
Head Office :	Mahindra Tower, Ground Floor, Dr. G M Bhosale Marg, P K Kurne Chowk, Worli, Mumbai 400018, Maharashtra, India
Tel. No.:	91-22-24936505 / 02
Fax No.:	91-22-24900821

DIRECTORS

As on : 27.09.2010

Name :	Mr. Anand G. Mahindra
Designation :	Director
Address :	Goolestan, 65, Napean Sea Road, Mumbai 400006, Maharashtra, India
Date of Birth/Age :	01.05.1955
Date of Appointment :	16.06.2000
Name :	Mr. Sanjay M. Labroo
Designation :	Director
Address :	Global Business,Park, 5^th Floor, Tower ‘B’, Gurgaon – 122002, Haryana, India
Date of Birth/Age :	05.10.1961
Date of Appointment :	14.01.2000
Name :	Mr. Arun S. Sanghi
Designation :	Director
Address :	24, Hemprabha, 68, Marine Drive, Mumbai – 400 020.
Date of Birth/Age :	13.02.1943
Date of Appointment :	16.06.2000
Name :	Mr. Padmanabhan Sivaram
Designation :	Director
Address :	A2/22,Azad Apts, Hauz Khas, New Delhi 110016
Date of Birth/Age :	30.06.1953
Date of Appointment :	30.07.2008
Name :	Mr. Rajeev Dubey
Designation :	Director
Address :	1701 Mahindra Heights, 96, Tardeo Road, Mumbai – 400034.
Date of Birth/Age :	03.04.1954
Date of Appointment :	01.12.2004
Name :	Mr. Ramesh G. Iyer
Designation :	Director
Address :	A-2003, Oberoi Garden, OGI, Kandivali (East), Mumbai – 400 101
Date of Birth/Age :	04.06.1958
Date of Appointment :	30.08.2004
Name :	Mr. Pawan Goenka
Designation :	Director
Address :	Flat No.602,9, JVPD, Near UTI Bank Ltd., 10” Road, Vile Parle, (West), Mumbai-400056.
Date of Birth/Age :	23.09.1954
Date of Appointment :	23.08.2006
Name :	Mr. Anupam Thareja
Designation :	Director
Address :	G-503, Ivory Tower, Sector 70 Mohali – 160071
Date of Birth/Age :	09.04.1972
Date of Appointment :	30.07.2008
Name :	Mr. Shubhabrata Saha
Designation :	Manager
Address :	Parimal Premises Co-op. Soc,. Ltd. Flat – 402,4* Floor, Plot No.482,17* Road, Khar (West), Mumbai – 400 052.
Date of Birth/Age :	22.12.1967
Date of Appointment :	01.08.2009

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on : 27.09.2010

Names of Shareholders	No. of Shares
Housing Development Finance Corporation Limited, India	3182000
Vinay Leasing And Finance Private Limited, India	49333
Anand. G. Mahindra	104922
Sanjay Labroo Jointly With Leena Labroo	1153141
Brij M. Katari	17194
Mahindra And Mahindra Limited Jointly With M A Nazareth	1
Mahindra And Mahindra Limited Jointly With Ulhas Yargop	1
Mahindra And Mahindra Limited Jointly With Bharat Doshi	1
Mahindra And Mahindra Limited Jointly With U Y Phadke	1
Mahindra And Mahindra Limited Jointly With Bakul P. Sheth	1
Mahindra And Mahindra Limited Jointly With Angarika Baviskar	1
Mahindra And Mahindra Limited Jointly With c. krishnadas	1
Mahindra And Mahindra Limited , India	34777248
Bombay Auto Ancillary And Investment Private Limited, India	407665
Bina Sanghi Jointly With Vinay Sanghi	334445
Ranjan Sanghi Jointly With Jayashree Sanghi	310586
Arti Sanghi Jointly With Arun Sanghi	329894
Arun Sanghi Jointly With Arti Sanghi	636928
Alan E Durante Jointly With Melanie Durante	36484
Jyoti Sanghi Jointly With Ranjan Sanghi	55862
Project Automobiles Private Limited, India	262845
Jyoti Ahuja Jointly With Pramod Ahuja	60715
Arun Sanghi,Rajeev Dubey, Ramesh Iyer, Trustees, Automartindia Limited Stock Option Trust	1808023
Aradhana Sanghi Jointly With Arun Sanghi	83272
Akhil Sanghi Jointly With Madhavi Sanghi	83272
Jayashree Sanghi Jointly With Ranjan Sanghi	333096
Rajesh Sanghi Jointly With Bhairavi Sanghi	33309
Bhairavi Sanghi Jointly With Rajesh Sanghi	16653
Anand Mahindra Jointly With Anuradha Mahindra, India	22343
PHI Management Solutions Private Limited, India	20604395
Viraj Sanghi Jointly With Niki Sanghi	160963
Vinti Gajree Jointly With Rajesh Gajree	60963
Vinay Sanghi Jointly With Seena Sanghi	10962
Keshav Sanghi Jointly With Vinta Sanghi	302222
Total	65238742

As on : 27.09.2010

Equity Share Breakup		Percentage of Holding
Category
Bodies corporate		90.87
Directors or relatives of directors		1.96
Other top fifty shareholders		7.17
	Total	100.00

BUSINESS DETAILS

Line of Business :	Company is engaged in the business of Trading in Used Cars.
Terms :
Purchasing :	Cash (Cheque)
Selling :	Cash (Cheque)

GENERAL INFORMATION

Customers :	· End Users · Wholesalers
No. of Employees :	250 (Approximately)
Bankers :	The Zoroastrian Co-Operative Bank Limited, Tardeo Branch, Gamadia Colony, Building No.7, Tardeo,, Mumbai - 400007, Maharashtra, India Axis Bank Limited, Credit Management Centre, Unit No.6, Corporate Park, Sion Trombay Road, Chembur, Mumbai – 400071, Maharashtra, India
Facilities :	---

Banking Relations :	---
Auditors :
Name :	Deloitte Haskins and Sells Chartered Accountant
Address :	Deloitte Haskins and sells, 12, Annie Besant Road, Opp. Shiva Sagar Estate, Worli, Mumbai – 400018, Maharashtra, India
Holding Company :	Mahindra And Mahindra Limited
Subsidiaries :	Mahindra and Mahindra Financial Services Limited Mahindra Intertrade Limited Mahindra Casting Private Limited Mahindra Ugine Steel Company Limited Mahindra Renault Private Limited Mahindra Retail Private Limited Mahindra First Choice Services Limited

CAPITAL STRUCTURE

As on 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
70,000,000	Equity Shares	Rs. 10/- each	Rs. 700.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
65,238,742	Equity Shares	Rs. 10/- each	Rs. 652.387 Millions
1,808,023	Less : Equity Shares issued to Trust constituted under the Employees' Stocks Options Scheme but not allotted to employees	Rs. 10/- each	Rs. 18.080 Millions
	Total		Rs. 634.307 Millions

Note

Out of the above 34,777,255 (including 31,837,255 issued on rights basis) [Previous year 22,625,348 (including

19,685,348 issued on rights basis)] Equity Shares of Rs.10/- each fully paid-up are held by Mahindra and Mahindra Limited., the holding company (Including 7shares held jointly)

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		634.307	634.307	298.119
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		584.180	584.180	125.152
4] (Accumulated Losses)		(795.697)	(708.521)	(490.360)
NETWORTH		422.790	509.966	(67.089)
LOAN FUNDS
1] Secured Loans		0.000	0.000	216.780
2] Unsecured Loans		0.000	0.000	150.000
TOTAL BORROWING		0.000	0.000	366.780
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		422.790	509.966	299.691
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		44.299	47.594	33.857
Capital work-in-progress		0.026	1.925	0.000
INVESTMENT		103.933	22.960	0.100
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	86.925	82.619	199.730
	Sundry Debtors	5.335	3.047	99.540
	Cash & Bank Balances	83.853	99.267	15.525
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	247.427	380.630	48.182
Total Current Assets		423.540	565.563	362.977
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	19.624	14.113	4.293
	Sundry Creditors	115.779	105.761	83.193
	Provisions	13.606	8.202	9.757
Total Current Liabilities		149.009	128.076	97.243
Net Current Assets		274.531	437.487	265.734
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		422.790	509.966	299.691

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Sales (including accessories) (net of sales returns)	1209.251	1370.156	1649.737
		Income from Services	52.298	51.400	64.379
		Other Income	39.704	33.405	4.754
		TOTAL (A)	1301.253	1454.961	1718.870
Less	EXPENSES
		Purchases of trading goods (including accessories)	1070.677	1141.460	1512.538
		Personnel Expenses	92.700	88.045	83.928
		Operating and Other Expenses	220.200	300.386	322.014
		Increase/(Decrease) in Finished Goods	(4.305)	117.110	(18.905)
		TOTAL (B)	1379.272	1647.001	1899.575
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		(78.019)	(192.040)	(180.705)
Less	FINANCIAL EXPENSES (D)		0.084	8.045	24.393
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		(78.103)	(200.085)	(205.098)
Less/ Add	DEPRECIATION/ AMORTISATION (F)		9.072	16.651	11.383
	PROFIT/LOSS BEFORE TAX (E-F) (G)		(87.175)	(216.736)	(216.481)
Less	TAX (I)		0.000	1.425	1.437
	PROFIT/LOSS AFTER TAX (G-I) (J)		(87.175)	(218.161)	(217.918)
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		(708.521)	(490.360)	(272.441)
	BALANCE CARRIED TO THE B/S		(795.697)	(708.521)	(490.360)
	Earnings Per Share (Rs.)		(1.37)	(3.87)	(7.31)

Particulars	31.03.2011
Sales Turnover (Approximately)	1210.000

The above information has been parted by Mr. Anand.

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	(6.69)	(14.99)	(12.67)
Net Profit Margin (PBT/Sales)	(%)	(7.20)	(15.81)	(13.12)
Return on Total Assets (PBT/Total Assets}	(%)	(18.63)	(35.34)	(54.55)
Return on Investment (ROI) (PBT/Networth)		(0.20)	(0.42)	3.22
Debt Equity Ratio (Total Liability/Networth)		0.35	0.25	(6.91)
Current Ratio (Current Asset/Current Liability)		2.84	4.41	3.73

LOCAL AGENCY FURTHER INFORMATION

SUNDRY CREDITORS DETAILS :

( Rs. In Millions)

Particulars	31.03.2010	31.03.2009	31.03.2008
Total outstanding dues of creditors other than micro enterprises and small enterprises	115.779	105.761	83.193

OPERATIONS :

The loss for the year is nearly 60% lower than the previous year and reflects the success of the measures undertaken by the Company to improve performance.

During the year, the Company has completely exited from the earlier franchisee model under which the Company had invested in the working capital. This has resulted in a small fall in the top line revenues, but substantially derisked the business with improved net revenues. The Company has also more than doubled the number of operational franchisee dealerships which are spread across the country. The Company also launched franchisee superstores during the year at Trivandrum, Kochi and Bhopal.

The Company's superstores at Mumbai and Pune have performed well, registering an increase in volumes of 22% and 66% respectively. The recent tie-up with Mahindra First Choice Services Limited has helped improve refurbishment standards.

During the year, the Company has launched a Commitment Card for its customers, extending a new comprehensive warranty and 24X7 Roadside assistance. These products have improved customer confidence and led to higher revenues. In addition, the Company's arrangements with a number of leading banks and NBFCs for auto retail financing have benefited customers and improved volumes.

The income from deployment of short term surplus resources also increased by 73% through improved working capital management and treasury operations.

CHANGE OF NAME OF THE COMPANY

During the year, the name of the Company was changed to Mahindra First Choice Wheels Limited to leverage brand synergies within the group.

OUTLOOK FOR THE CURRENT YEAR :

In the current year, the Company plans to aggressively expand the distribution network through a judicious mix of new superstores as well as franchisee dealerships. This would help the Company have a wider reach on a pan India basis and also improve synergies across channels.

FORM 8

Corporate identity number of the company	U64200MH1994PLC083996
Name of the company	MAHINDRA FIRST CHOICE WHEELS LIMITED
Address of the registered office or of the principal place of business in India of the company	Gateway Bldgapollo Bunder, Mumbai – 400001, Maharashtra, India
This form is for	Modification of charge
Type of charge	Book debts Movable property (not being pledge) Others
Particular of charge holder	Axis Bank Limited, Credit Management Centre, Unit No.6, Corporate Park, Sion Trombay Road, Chembur, Mumbai – 400071, Maharashtra, INDIA
Nature of instrument creating charge	1. Letter from Axis Bank dated 07.01.2011 2.Amendment cum link Agreement dated 07.01.2011 both modifying a single charge.
Date of instrument Creating the charge	07/01/2011
Amount secured by the charge	Rs. 55.000 millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of interest On CC at Base rate + 3.25% p.a. or as specified in the sanction letter or as stipulated by the Bank from time to time Terms of repayment As per sanction letter or as stipulated by the Bank from time to time Margin As per sanction letter or as stipulated by the Bank from time to time Extent and operation of the charge Credit facilities granted by the Bank revised from Rs.200.000 millions to Rs.55.000 millions to secure the limit as under. Cash Credit 55.000 millions Intra-day exposure(sub limit Within CC Limit) (10.000 millions) Total 55.000 millions The security by way of 1st charge on all present and future Current Assets of the Co. given earlier shall continue as security for the revised / modified limit. Other Nil
Short particulars of the property charged (Including location of the property)	Hypothecation by way of 1st charge on all present and future Current Assets of the Company.
Date of instrument modifying the charge	11/05/2006
Particulars of the present modification	Now vide this modi., Credit facilities granted by the Bank revised from Rs.200.000 millions. to Rs.55.000 millions to secure the limit as under. Cash Credit 55.000 millions Intra-day exposure(sub limit Within CC Limit) (10.000) millions Total 55.000 millions The security by way of 1st charge on all present and future Current Assets of the Co. given earlier shall continue as security for the revised / modified limit.

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. 44.37
UK Pound	1	Rs. 72.20
Euro	1	Rs. 62.87

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	3
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	-
--LIQUIDITY	1~10	4
--LEVERAGE	1~10	4
--RESERVES	1~10	-
--CREDIT LINES	1~10	4
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	NO
--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	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		26

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.