MIRA INFORM REPORT

Report Date :

13.06.2014

IDENTIFICATION DETAILS

Name :	MERITOR HVS (INDIA) LIMITED
Registered Office :	Plot No. 36, Hootagalli Industrial Area, Off. Hansur Road, Mysore – 570018, Karnataka
Country :	India
Financials (as on) :	30.09.2013
Date of Incorporation :	13.02.1998
Com. Reg. No.:	08-023383
Capital Investment / Paid-up Capital :	Rs. 24.300 Millions
CIN No.: [Company Identification No.]	U29221KA1998PLC023383
TAN No.: [Tax Deduction & Collection Account No.]	BLRM06347F
PAN No.: [Permanent Account No.]	AABCM8911G
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Subject is engaged in Research, Design, Development and Marketing of Axles and related products.
No. of Employees :	Not Divulged

RATING & COMMENTS

MIRA’s Rating :

Ba (45)

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory
Payment Behaviour :	Usually correct
Litigation :	Clear
Comments :	Subject is a subsidiary of “Meritor Heavy Vehicles Systems LLC, USA”. It is an established company having satisfactory track record. The company possesses a favorable financial profile marked by adequate networth base and comfortable capital structure characterized by zero debt. Management has reported a steep dip in its sales volume as well as net profitability during FY 2013. However, trade relations are fair. Business is active. Payment terms are reported as usually correct. In view of strong managerial, financial and technological support from its parent, the subject can be considered for business dealings at usual trade terms and conditions.

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 – March 31, 2014

Country Name	Previous Rating (31.12.2013)	Current Rating (31.03.2014)
India	A1	A1

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

INDIAN ECONOMIC OVERVIEW

US investment bank Goldman Sachs  has upgraded its outlook on Indian markets as it expects positive impact of the election cycle.

India’s economy may grow 4.7 % in the current financial year, lower than the official estimate of 4.9 %, Fitch Rating said. The global rating agency expects the economy to pick up in the next two financial years.

Global ratings agency Standard & Poor said increasing focus by India Inc on lowering debt is likely to improve their credit profiles.

Singapore (1.1 million Indian tourists in 2012), Thailand (one million), the United Arab Emirates ().98 million) and Malaysia ().82 million) emerged as the preferred holidays hotspots for Indians. The total figure is expected to increase to 1.93 million by 2017, according to the latest Eurmonitor international report.

There is a $29.34 bn outward foreign direct investment by domestic companies between April and January of 2013/14 which has seen some signs of recovery according to a Care Ratings report.

There are 264 number of new companies being set up every day on average during 2014. Most of them are registered in Mumbai. India had 1.38 million registered companies at the end of January, 2014.

Twitter like messaging service Weibo Corporation has filed to raise $ 500 million via a US initial public offering. Alibaba, which owns a stake in Weibo is expected to raise about $ 15 billion New York this year in the highest profile Internet IPO since Facebook’s in 2012.

Bharti Airtel has raised Rs.2,453.2 crore (350 million Swiss Francs) by selling six-year bonds at a coupon rate of three per cent and maturing in 2020. This is the largest ever bond offering by an Indian company in Swiss Francs. Bharat Petroleum Corporation raised 175 million Swiss Francs by selling five year bonds at 2.98 % coupon rate in February.

Indian Oil Corporation plans to invest Rs 7650 crore in setting up a petrochemical complex at its almost complete Paradip refinery in Odhisha in three to four years. The company board is set to consider the setting up of a 700000 tonne per annum polypropylene plant at an estimated cost at Rs.3150 crore.

Global chief information officers at gathering in Bangalore in April to meet Indian startups at an event called Tech50 Watchout for Little Eye Labs-Facebook type deals in the making

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

INFORMATION DECLINED BY

Name :	Mr. Basavaraj
Designation :	Product Manager
Contact No.:	91-8550909988
Date :	13.06.2014

LOCATIONS

Registered Office :	Plot No. 36, Hootagalli Industrial Area, Off. Hansur Road, Mysore – 570018, Karnataka, India
Tel. No.:	91-821-2403234/ 2403235/ 36/ 7197800
Fax No.:	91-821-2403234
E-Mail :	meritor.mysore@meritor.com
Website :	www.mhvsil.com www.kalyanigroup.com
CVA Ware House :	Gala No.34, Safe Village, Taluka Maval, Near Talegaon, Pune – 412016, Maharashtra, India
Tel. No.:	91-2114-311083
E-Mail :	PDC@meritor.com

DIRECTORS

As on 10.02.2014

Name :

Jeffrey Alan Craig

Designation :

Director

Address :

9830, Lakewood Dr Grosse Lie, Michigan, USA, 048138

Date of Birth/Age :

19.05.1960

Qualification :

Master in Business Administration

Date of Appointment :

10.02.2014

DIN No. :

06660876

Other Directorship :

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Company/ LLP Status	Defaulting status
1	U29221KA1998PLC023383	MERITOR HVS (INDIA) LIMITED	Director	10/02/2014	20/08/2013	Active	NO

Name :

Mr. Babasaheb Neelkanth Kalyani

Designation :

Director

Address :

“Amit”, 221/A, Kalyani Nagar, Yerawada, Pune – 411006, Maharashtra, India

Date of Birth/Age :

07.01.1949

Qualification :

B.E. and MS (USA) / Industrialist

Date of Appointment :

25.03.1999

PAN No.:

ABIPK5782A

DIN No.:

00089380

Other Directorship :

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Date of cessation	Company/ LLP Status	Defaulting status
1	L27104MH1973PLC016350	KALYANI STEELS LIMITED	Director	15/02/1984	15/02/1984	-	Active	NO
2	L15421PN1939PLC006738	THE UGAR SUGAR WORKS LIMITED	Director	31/01/1986	31/01/1986	19/03/2010	Active	NO
3	L24200MH1988PTC048028	HIKAL LIMITED	Director	05/02/1992	05/02/1992	-	Active	NO
4	L25209PN1961PLC012046	BHARAT FORGE LIMITED	Managing director	30/03/2013	30/03/1993	-	Active	NO
5	U29303PN1996PLC096395	KALYANI HAYES LEMMERZ LIMITED	Director	18/01/1996	18/01/1996	-	Active	NO
6	U91110PN1965NPL018870	ASSOCIATION OF INDIAN FORGING INDUSTRY	Director	29/12/1997	29/12/1997	-	Active	NO
7	L51909KA1981PLC004198	AUTOMOTIVE AXLES LIMITED	Director	05/03/1998	05/03/1998	-	Active	NO
8	U85110KA1996PLC019619	NANDI INFRASTRUCTURE CORRIDOR ENTERPRISE LIMITED	Director	19/02/1999	19/02/1999	27/06/2013	Active	NO
9	U29221KA1998PLC023383	MERITOR HVS (INDIA) LIMITED	Director	25/03/1999	25/03/1999	-	Active	NO
10	U27106PN1998PTC012742	CARPENTER KALYANI SPECIAL ALLOYS PRIVATE LIMITED	Director	02/08/1999	02/08/1999	24/12/2009	Active	NO
11	U27105PN1998PLC012724	KALYANI CARPENTER SPECIAL STEELS LIMITED	Whole-time director	02/08/2009	02/08/1999	-	Active	NO
12	L40108PN2000PLC015323	BF UTILITIES LIMITD	Director	15/09/2000	15/09/2000	-	Active	NO
13	U72900MH2000PTC140702	EPICENTER TECHNOLOGIES PRIVATE LIMITED	Director	06/10/2000	06/10/2000	-	Active	NO
14	U74999PN2003PLC018350	TRUE VALUE HOLDINGS LIMITED	Director	12/09/2003	12/09/2003	09/07/2010	Amalgamated	NO
15	U99999MH1956NPL009708	THE INDO GERMAN CHAMBER OF COMMERCE	Director	28/09/2005	28/09/2005	-	Active	NO
16	U85110KA2000PLC026939	NANDI ECONOMIC CORRIDOR ENTERPRISES LIMITED.	Director	30/09/2006	20/01/2006	27/06/2013	Active	NO
17	U65991MH2002GOI137868	UTI TRUSTEE COMPANY PRIVATE LIMITED	Director	26/09/2006	27/03/2006	23/08/2011	Active	NO
18	U31909PN2006PLC129138	BF SYSTEMS LIMITED	Director	29/09/2006	29/09/2006	-	Strike off	NO
19	U45203PN2008PTC131242	KHED ECONOMIC INFRASTRUCTURE PRIVATE LIMITED	Director	04/01/2008	04/01/2008	-	Active	NO
20	U70102PN2008PLC131478	KHED DEVELOPERS LIMITED	Director	21/02/2008	21/02/2008	24/12/2009	Active	NO
21	U40102PN2007PTC130881	KENERSYS INDIA PRIVATE LIMITED	Nominee director	13/05/2008	13/05/2008	30/03/2009	Active	NO
22	U40106DL2008PLC179793	BF-NTPC ENERGY SYSTEMS LIMITED	Nominee director	19/06/2008	19/06/2008	-	Active	NO
23	L65993PN2009PLC134021	BF INVESTMENT LIMITED	Director	22/11/2010	26/05/2009	-	Active	NO
24	U29128DL2010PLC197806	KALYANI ALSTOM POWER LIMITED	Director	06/07/2011	08/01/2010	-	Active	NO
25	U29111DL2010FLC197807	ALSTOM BHARAT FORGE POWER LIMITED	Director	08/01/2010	08/01/2010	-	Active	NO
26	U45203PN2010PLC136755	BF INFRASTRUCTURE LIMITED	Director	02/08/2011	05/07/2010	01/06/2012	Active	NO
27	U35923PN2010PLC137191	IMPACT AUTOMOTIVE SOLUTIONS LIMITED	Director	25/08/2010	25/08/2010	-	Active	NO
28	U85100PN2011NPL141427	INSTITUTE FOR PROSTATE CANCER	Director	22/11/2011	22/11/2011	-	Active	NO
29	U29270PN2012PTC144268	BF ELBIT ADVANCED SYSTEMS PRIVATE LIMITED	Director	24/07/2013	29/01/2013	-	Active	NO

Name :

Mr. Chrishan Anton Sebastian Villavarayan

Designation :

Director

Address :

No. 246 A, Prestige Ozone, White Field, Bangalore – 560056, Karnataka, India

Date of Birth/Age :

12.06.1970

Qualification :

Honors Bachelor of Civil Engineering

Date of Appointment :

24.04.2010

DIN No.:

03020467

Other Directorship :

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Date of cessation	Company/ LLP Status
1	U29221KA1998PLC023383	MERITOR HVS (INDIA) LIMITED	Director	24/04/2010	24/04/2010	-	Active
2	U34200KA2008PTC047758	MERITOR COMMERCIAL VEHICLE SYSTEMS INDIA PRIVATE LIMITED	Director	29/03/2011	19/05/2010	09/02/2012	Active
3	L51909KA1981PLC004198	AUTOMOTIVE AXLES LIMITED	Director	10/02/2014	02/05/2013	-	Active

Name :

Thimmaiah Napanda Poovaiah

Designation :

Director

Address :

401, Sunflower, Flower Valley, Wanawadi, Pune – 411040, Maharashtra, India

Date of Birth/Age :

05.04.1969

Qualification :

B.E.Automobiles

Date of Appointment :

06.02.2013

DIN No. :

01184636

Other Directorship :

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Date of cessation	Company/ LLP Status	Defaulting status
1	U29299PN2004PTC019904	HONEYWELL TURBO TECHNOLOGIES (INDIA) PRIVATE LIMITED	Managing director	22/09/2005	22/09/2005	31/08/2008	Active	NO
2	U34300PN2005PTC021030	HONEYWELL TURBO (INDIA) PRIVATE LIMITED	Managing director	01/09/2008	01/09/2008	27/04/2012	Amalgamated	NO
3	U29221KA1998PLC023383	MERITOR HVS (INDIA) LIMITED	Director	06/02/2013	18/07/2012	-	Active	NO

Name :

Mr. Sundararajan Raghunathan

Designation :

Additional Director

Address :

No. 57/A, First Floor, Second Cross, Opposite Mahajana High School, Jayalaxmipuram, Mysore – 570012, Karnataka, India

Date of Birth/Age :

01.10.1957

Qualification :

B. Tech, Mechanical

Date of Appointment :

07.01.2012

PAN No.:

AAOPR8131P

DIN No.:

03518628

Other Directorship :

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Company/ LLP Status	Defaulting status
1	U29221KA1998PLC023383	MERITOR HVS (INDIA) LIMITED	Director	17/01/2012	12/04/2011	Active	NO

KEY EXECUTIVES

Name :	Mr. Basavaraj
Designation :	Product Manager

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 10.02.2014

Names of Shareholders	No. of Shares
Bhalerao Prakash	1
Amit Babasaheb Kalyani	1
Sapre Mohan	1
Sundarajan Raghunathan	1
Mecci Ikramulla	1
Nayak Radhesh	1
Meritor Heavy Vehicle Systems LLC, United States of America	1239300
BF Investment Limited, India	1190694
Total	2430000

As on 10.02.2014

Equity Share Break up (Percentage of Total Equity)

Category	Percentage of Holding
Foreign holdings( Foreign institutional investor(s), Foreign companie(s) Foreign financial institution(s), Non-resident Indian(s) or Overseas Corporate bodies or Others	51.00
Bodies corporate	49.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Subject is engaged in Research, Design, Development and Marketing of Axles and related products.

Products :

Item Code No. (ITC Code)	Product Description
87083900	Brakes
87085000	Drive axles
87089900	Other components and spares

GENERAL INFORMATION

Customers :	· Ashok Leyland · AMW · TATA · VOLVA · Godrej · Sonalika International
No. of Employees :	Not Divulged
Bankers :	· State Bank of India · HDFC Bank Limited · Andhra Bank Limited

Banking Relations :	--
Auditors :
Name :	Deloitte Haskins and Sells Chartered Accountants
Address :	Deloitte Centre, Anchorage II, 100/2, Richmond Road, Bangalore – 560025, Karnataka, India
Income-tax PAN of auditor or auditor's firm :	AACFD3771D
Associates/Subsidiaries :
Holding company	Meritor Heavy Vehicles Systems LLC., USA
Ultimate Holding Company :	Meritor Inc., USA
Fellow Subsidiary Company :	Meritor HVS Cameri SPA, Italy
Enterprises which are owned, or have significant influence of or are partners with Key management personnel and their relatives :	· Automotive Axles Limited CIN No.: L51909KA1981PLC004198 · Meritor HVS Australia Ltd, Australia · Meritor Heavy Vehicle Systems, Brazil · ArvinMeritor CVS Axles, France · ArvinMeritor Vehicle Systems (Wuxi) Company Limited, China · Systemes Automotrices de Mexico S.A. de C.V., Mexico · Meritor Laurinburg Specialty Maxton USA · Meritor CV Aftermarket AG, Switzerland · Meritor Japan K.K, Japan · Meritor Heavy Vehicle Systems (Singapore) Pte Limited · Xuzhou Meritor Axles Company Limited, China · Meritor Commercial Vehicle Systems India Private Limited CIN No.: U34200KA2008PTC047758

CAPITAL STRUCTURE

As on 30.09.2013

Authorised Capital :

No. of Shares	Type	Value	Amount
3500000	Equity Shares	Rs.10/- each	Rs. 35.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
2430000	Equity Shares	Rs.10/- each	Rs. 24.300 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	30.09.2013	30.09.2012	30.09.2011
I. EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	24.300	24.300	24.300
(b) Reserves & Surplus	609.830	545.294	456.248
(c) Money received against Share Warrants	0.000	0.000	0.000
(2) Share Application money pending allotment	0.000	0.000	0.000
Total Shareholders’ Funds (1) + (2)	634.130	569.594	480.548
(3) Non-Current Liabilities
(a) long-term Borrowings	0.000	0.000	0.000
(b) Deferred Tax Liabilities (Net)	0.000	0.000	0.000
(c) Other Long Term Liabilities	0.225	0.255	0.255
(d) long-term Provisions	12.332	10.508	6.546
Total Non-current Liabilities (3)	12.557	10.763	6.801
(4) Current Liabilities
(a) Short Term Borrowings	0.000	0.000	0.000
(b) Trade Payables	1225.973	1628.666	1852.418
(c) Other Current Liabilities	28.749	17.258	21.925
(d) Short-term Provisions	109.642	156.116	196.033
Total Current Liabilities (4)	1364.364	1802.040	2070.376
TOTAL	2011.051	2382.397	2557.725
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible Assets	71.671	72.207	66.424
(ii) Intangible Assets	59.143	93.962	127.070
(iii) Capital Work-in-Progress	0.000	0.000	0.000
(iv) Intangible assets under Development	0.000	0.000	0.000
(b) Non-current Investments	0.000	0.000	0.000
(c) Deferred Tax Assets (net)	18.400	15.500	3.300
(d) Long-term Loan and Advances	7.747	7.824	9.701
(e) Other Non-current Assets	0.000	0.000	0.000
Total Non-Current Assets	156.961	189.493	206.495
(2) Current assets
(a) Current Investments	0.000	0.000	0.000
(b) Inventories	267.810	241.980	285.491
(c) Trade Receivables	1090.397	1397.190	1743.815
(d) Cash and Cash Equivalents	458.288	508.942	298.816
(e) Short-term Loans and Advances	35.709	43.717	23.011
(f) Other Current Assets	1.886	1.075	0.097
Total Current Assets	1854.090	2192.904	2351.230
TOTAL	2011.051	2382.397	2557.725

PROFIT & LOSS ACCOUNT

	PARTICULARS		30.09.2013	30.09.2012	30.09.2011
	SALES
		Income	7192.993	10845.040	11471.310
		Other Income	55.571	49.323	28.677
		TOTAL	7248.564	10894.363	11499.987
Less	EXPENSES
		Cost of Materials Consumed	198.569	156.451	13.832
		Purchases of Stock-in-Trade	6301.871	9725.436	10742.622
		Changes in inventories of finished goods, work-in-progress and Stock-in-Trade	(18.891)	34.418	(171.957)
		Employees benefits expense	105.844	91.645	57.674
		Other expenses	235.525	263.828	227.480
		TOTAL	6822.918	10271.778	10869.651
	PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION		425.646	622.585	630.336
Less/ Add	DEPRECIATION/ AMORTISATION		48.216	50.597	30.333
	PROFIT/ (LOSS) BEFORE TAX		377.430	571.988	600.003
Less	TAX		128.100	186.400	198.300
	PROFIT/ (LOSS) AFTER TAX		249.330	385.588	401.703
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	806.883	709.172	613.824
	TOTAL EARNINGS		806.883	1516.055	613.824
	IMPORTS
		Import of R and D Spares			1.309
		Import of Traded Goods			1.391
		Import of R and D Maintenance Spares			0.000
	TOTAL IMPORTS		29.400	24.282	2.700
	Earnings / (Loss) Per Share (Rs.)		102.60	158.68	165.31

KEY RATIOS

PARTICULARS		30.09.2013	30.09.2012	30.09.2011
PAT / Total Income	(%)	3.44	3.54	3.49
Net Profit Margin (PBT/Sales)	(%)	5.25	5.27	5.23
Return on Total Assets (PBT/Total Assets}	(%)	18.94	24.17	23.49
Return on Investment (ROI) (PBT/Networth)		0.60	1.00	1.25
Debt Equity Ratio (Total Debt/Networth)		0.00	0.00	0.00
Current Ratio (Current Asset/Current Liability)		1.36	1.22	1.14

FINANCIAL ANALYSIS

[all figures are in Rupees Millions]

DEBT EQUITY RATIO

Particular	30.09.2011	30.09.2012	30.09.2013
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Share Capital	24.300	24.300	24.300
Reserves & Surplus	456.248	545.294	609.830
Net worth	480.548	569.594	634.130
long-term borrowings	0.000	0.000	0.000
Short term borrowings	0.000	0.000	0.000
Total borrowings	0.000	0.000	0.000
Debt/Equity ratio	0.000	0.000	0.000

YEAR-ON-YEAR GROWTH

Year on Year Growth	30.09.2011	30.09.2012	30.09.2013
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Sales	11471.310	10845.040	7192.993
		(5.459)	(33.675)

NET PROFIT MARGIN

Net Profit Margin	30.09.2011	30.09.2012	30.09.2013
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Sales	11471.310	10845.040	7192.993
Profit	401.703	385.588	249.330
	3.50%	3.56%	3.47%

LOCAL AGENCY FURTHER INFORMATION

Sr. No.	Check List by Info Agents	Available in Report (Yes / No)
1]	Year of Establishment	Yes
2]	Locality of the firm	Yes
3]	Constitutions of the firm	Yes
4]	Premises details	No
5]	Type of Business	Yes
6]	Line of Business	Yes
7]	Promoter's background	Yes
8]	No. of employees	No
9]	Name of person contacted	Yes
10]	Designation of contact person	Yes
11]	Turnover of firm for last three years	Yes
12]	Profitability for last three years	Yes
13]	Reasons for variation <> 20%	-----
14]	Estimation for coming financial year	No
15]	Capital in the business	Yes
16]	Details of sister concerns	Yes
17]	Major suppliers	No
18]	Major customers	Yes
19]	Payments terms	No
20]	Export / Import details (if applicable)	No
21]	Market information	-----
22]	Litigations that the firm / promoter involved in	-----
23]	Banking Details	Yes
24]	Banking facility details	No
25]	Conduct of the banking account	-----
26]	Buyer visit details	-----
27]	Financials, if provided	Yes
28]	Incorporation details, if applicable	Yes
29]	Last accounts filed at ROC	Yes
30]	Major Shareholders, if available	Yes
31]	Date of Birth of Proprietor/Partner/Director, if available	Yes
32]	PAN of Proprietor/Partner/Director, if available	Yes
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	No

INDEX OF CHARGES: NO CHARGES EXIST FOR COMPANY

CORPORATE INFORMATION

Subject was incorporated on February 13, 1998 as a public limited company. The company started its commercial operations on 1st April 1999.

The Company is engaged in Research, Design, Development and Marketing of Axles and related products.

The Company is having Commercial Vehicle Aftermarket Distribution Centre at Pune, Maharashtra State for the packing, kitting, sales & distribution of after market products procured from major component manufacturers.

INDIAN ECONOMY

The continuing uncertainty of the global economy cast its shadow on India’s economy; in addition, and the Indian economy also had its own share of issues. While the GDP grew at 6.0% in the first quarter, it grew at just 5.1%, 5.4% and 5.2% in the second, third and fourth quarter, respectively for the year (October 2012-September 2013). A correction of the sluggish growth rate will require faster implementation of reforms, better fiscal discipline and kick-starting of stalled infrastructure projects.

INDUSTRY SCENARIO

OVERVIEW

India is expected to be the world’s third largest automobile market by 2020E. The automobile industry is categorically divided into four segments; of which India is the fourth largest producer of commercial vehicles. The commercial vehicles segment is again divided into two segments light commercial vehicles and medium & heavy commercial vehicles.

COMMERCIAL VEHICLES SECTOR

During 2012-13, the medium and heavy commercial vehicle (MHCV) industry continued to witness a slowdown in demand. The MHCV industry is driven by freight demand and transporter profitability, which play a key role in demand for new trucks. However, low industrial production, low infrastructure investment and steep hike in diesel prices have resulted in a steep decline for demand in commercial vehicles.

The slowdown in economic activity had a direct impact on the sales of MHCVs. The GDP growth of 5% in 2012-13 resulted in a decline in sales of MHCVs by 25.9% during the same period. This was against a growth of 8.8% in the previous year.

AUTO-COMPONENT INDUSTRY

India’s automobile sector is driven by a strong auto-component industry. It is a crowded market, with global auto-component companies having their base in India, as well as several domestic players. The country is fast emerging as a hub for global vehicle programmes with growing engineering and IT capability for design and manufacturing.

MEGATRENDS DRIVING INDIA’S COMMERCIAL VEHICLE INDUSTRY

Despite the current slowdown hitting the commercial industry, the key growth fundamentals of the industry remain strong. The government’s recent focus on infrastructure and manufacturing sectors, coupled with regulatory reforms will drive the industry going forward.

INDUSTRY

The industries (including mining, manufacturing, quarrying, electricity, gas, water supply and construction) are projected to grow at 2.7% in 2013-14 as against 2.1% in 2012-13. Among these, the manufacturing sector is projected to grow at 1.5% in 2013-14 as against 1% in 2012-13.

AGRICULTURE

The early and good monsoon in 2012-13 is expected to have a significant impact on the agriculture sector. The sector is projected to grow at 4.8% in 2013-14 as against 1.9% in 2012-13. The water reservoir position also significantly grew by almost 30% than the average of the last 10 years.

EXPORTS

The overall exports of the country are expected to increase in 2013-14 from the current levels. Growing dominance of India as an export-focused country (on account of skilled human resource and low costs) will augur well for Automotive Axles Limited (AAL) and other automotive components industry participants.

ROAD AHEAD

The industry is expected to grow by 6-8% in 2013-14. A gradual improvement in the overall automobile demand would help drive the industry. Long-term growth prospects for the industry remain healthy, led by expected increase in the production of commercial vehicles and cars. Further, replacement demand is also expected to grow by 9-11% in 2013-14.

FIXED ASSETS

Tangible Assets

· Land

· Buildings

· Plant and Equipment

· Furniture and Fixtures

· Vehicles

· Office equipment

· Computer Equipments

· Other Equipments

Intangible Assets

· Goodwill

· Computer Software

· Copyrights, Patents and Other Operating Rights

PRESS RELEASE

MERITOR HVS SHIFTS GEARS

01 Nov, 2013

Mysore-based Meritor HVS (India) Limited (MHVSL) is all set to launch, the MS04, its first indigenous axle for the LCV segment by the end of this year. With the MS04 - the maker of axles and braking systems for HCVs, military and off-road equipment - hopes to make India 'a central hub for the manufacture and supply of LCV axles for the entire Meritor group,' reveals Thimmaiah NP, MD & CEO, Meritor Commercial Vehicle Systems India (MCVSL) a subsidiary of Meritor Inc., USA. Given that sales of LCVs has until recently registered exponential growth, MHVSL's may well be considered a late entrant. Thimmaiah does not dispute these fact. Instead, he underscores the advantages of this position. 'Being a late entrant has it benefits. It is easier to understand existing products and market requirements. Besides, we are confident of our product,' states Thimmaiah.

The MS04 is robust despite being compact and lighter. For instance, its 267 mm crown gear offers  the same performance as a 290 mm crown. An extra source of value is the oil-lubricated wheel-head. The axle's cold-formed housing bolsters its rugged credentials. 'The axle has been designed to have a beaten life of about 5,00,000 km, which is close to double that available in the market,' he points out. Thimmaiah is confident that the versatile axle can be applicated even with LCVs that are fitted with R16 wheels.

The axle is pitched at both national and international markets. ‘We will soon begin to cater to the requirements of Meritor’s global customers who also make LCVs,’ says Thimmaiah. In fact, while the company has commenced its first innings in the LCV segment, Thimmaiah indicates that it is readying itself for a foray into axles for the SCV segment. However, he does not divulge any further details on this front.

MHVSL, a JV between Meritor Heavy Vehicle Systems LLC, (a subsidiary of Meritor Inc. USA)  and Pune-based Kalyani Group, handles product development, sales and after-sales activities. Another JV between the two partners, Automotive Axles Limited (AAL) undertakes manufacturing activity. It is the combination of these two entities that has enabled Merritor to claim the tag of being the largest independent axle maker in India.

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 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.59.33
UK Pound	1	Rs.99.68
Euro	1	Rs.80.30

INFORMATION DETAILS

Information Gathered by :	HTL
Analysis Done by :	SUB
Report Prepared by :	MRI

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	4
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	4
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	6
--RESERVES	1~10	5
--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	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		45

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.