MIRA INFORM REPORT

Report Date :

23.04.2007

IDENTIFICATION DETAILS

Name :	ERAWAT PHARMA LIMITED
Registered Office :	302, Anu Apartments, 21/22, Shankar Nagar, Saket Anex, Indore – 452 018, Madhya Pradesh, India
Country :	India
Financials (as on) :	31.03.2007 (Proposed)
Date of Incorporation :	01.03.1993
Com. Reg. No.:	7538
CIN No.: [Company Identification No.]	U02423MP1993PLC007538
IEC No.:	1104004011
TAN No.: [Tax Deduction & Collection Account No.]	BPLE00157D
Legal Form :	A Closely Held Public Limited Liability Company.
Line of Business :	Manufacturer of Empty Hard Gelatin Capsules.

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 144000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is a well established company having satisfactory track. Trade relations are fair. General financial position is moderate. Payments are reported as usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	302, Anu Apartments, 21/22, Shankar Nagar, Saket Anex, Indore – 452 018, Madhya Pradesh, India
Tel. No.:	91-731-2566020/ 2556036
Mobile No.:	91-9826033179
Fax No.:	91-731-2560929
E-Mail :	info@erawatgroup.com mk.sharma@erawatgroup.com hema@erawatgroup.com
Website :	http://www.erawat.com
Area :	800 sq. ft.
Location :	Owned
Factory :	512, Industrial Area No. 3, Pithampura, District Dhar – 454 744, Madhya Pradesh, India
Tel. No.:	91-7292-256243
E-Mail :	erawatpharma@sancharnet.in
Area :	80000 sq. ft.
Location :	Leased

DIRECTORS

Name :	Mr. Hem Chandra Jain
Designation :	Managing Director
Address :	29-30, Utkarsh Vihar Colony, Indore, Madhya Pradesh, India
Date of Birth/Age :	57 Years
Qualification :	M. E. and B. E. (Mech)
Experience :	30 Years
Profile :	Mr. H.C. Jain is Managing Director of Erawat Pharma Limited. He is a Mechanical Engineer with around 30 years of experience in engineering & empty gelatin capsules manufacturing, a rare combination.
Name :	Mr. Abhishek Jain
Designation :	Director
Address :	29-30, Utkarsh Vihar Colony, Indore, Madhya Pradesh, India
Date of Birth/Age :	30 Years
Qualification :	B. E. (Mech)
Experience :	8 Years
Profile :	B.E. (Mech.) having 6 years rich experience of manufacturing and management of the same company.
Name :	Mr. Mukesh Shah
Designation :	Director
Address :	3 The Drive Vally, Middle Sex, UK
Date of Birth/Age :	58 Years
Experience :	30 Years
Name :	Mr. Vasant H. Solanki
Designation :	Director
Address :	Deepak Jyoti Tower, Ambewadi, Mumbai, Maharashtra, India
Date of Birth/Age :	57 Years
Qualification :	M. E. (Mech)
Experience :	31 Years
Profile :	B.E. (Mech.); M.Tech. (Design) having more than 31 years of experience as Designer. He has been managing technical departments and technology in Senior Cadre.
Name :	Mr. Vinod Kataria
Designation :	Director
Address :	B-5, Green Valley, Navrangpura, Ahmedabad, Gujarat, India
Date of Birth/Age :	55 Years
Qualification :	B. E. (Electrical)
Experience :	32 Years
Profile :	B.E. (Electrical) having 32 years of experience in General Management & Project Consultant.
Name :	Mr. D S Sodhi
Designation :	Director
Address :	42, Kamlesh, Sher-E-Punjab Society, Mumbai, Maharashtra, India
Date of Birth/Age :	60 Years
Qualification :	B. E. (Mech)
Experience :	36 Years
Profile :	B.E. (Mech.) having around 36 years of experience in manufacturing, marketing & general management at top level.
Name :	Mr. Raj Damodar Kirtani
Designation :	Director
Address :	Bengali Square, Indore, Madhya Pradesh, India
Date of Birth/Age :	57 Years
Qualification :	LLB, IFCWA, AIAM, AMIMA, DCP M. B. I.
Experience :	30 Years
Profile :	L.L.B, I.F.C.W.A. AIAM, AMIMA D.C.P. Having 30 years experience in Finance & Cost Accounting.

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares
Mrs. Meena Jain	49500
Mr. Hem Chandra Jain	209200
Mr. Abhishek Jain	102700
Mr. Vasant H Solanki	457500
Mr. Birendra Kumar Jain	18800
Mr. Ravindra Kumar Jain	10500
Mr. Nirmal Kumar Jain	15200
Mrs. Kanta Devi Jain	15000
Mr. Harish Kumar Jain	7000
Mr. Hiramani Jain	3000
Hem Chandra Jain – HUF	55800
Jhanjhari Sons Leasing and Investment Private Limited	600700
Erawat Engineering Private Limited	571000
Mrs. Anita Jain	10500
Mrs. Sushila Solanki	72500
Mr. Mayur Shah and Mr. Gopal M Shah	30000
Mr. Savant Tongya	1500
Mr. Santosh Tongya	1500
Emralled Finance	150000
Mr. C P Mishra	6000
Mr. Mayur and Mr. Mukesh Shah	25000
Mr. Vinod Kataria	15000
Mr. L K Bhandari	40000
Mr. R B Gajra	150000
Mrs. Rita R Gajra	150000
R B Gajra – HUF	200000
Mr. Abhijeet Jain	102700
Mrs. Nancy Jain	54500
Mrs. Maina Jain	10000
Mr. Rahul Jain	5000
Mr. Kapil Jain	5000
Mr. Amit Jain	5000
Zankar Leasing and Financing Private Limited	24000
Strerred Assets Stablization Funds	600000
Mr. Gopal Das Montri	10000
Mrs. Hema Vyas	17500
Mr. Abhay Sharma	10000
Mrs. Krishna Sharma	10000
Mr. Manoj Sharma	17500
Mr. Sambhulal Rathi	10000
Mrs. Manish Maheshwari	6700
Mrs. Girija Shankar	14200
Mr. Krishna Shankar	14200
Mr. Amrish Maheshwari	6700
Mr. Aditya Vyas	14200
Mr. Sumit Jhawar	6700
Mrs. Anjani Sharma	17500
Mr. Vinod Sharma	20800
Mr. Mohanlal Sharma	10000
Sagittarious Securities and Finance Limited Trading Company	20000
Mrs. Sarita Sharma	7500
Mohanlal Anandilal Sharma - HUF	7500
Girija Shankar Anandilal Sharma – HUF	7500
Balaji Resource and Trading Limited	35000
Anant Machines and Equipment Private Limited	219700
Mr. Amit Jain	102700
Preferences Shares
Mr. Hem Chandra Jain	10000
Mrs. Meena Jain	10000
Mr. Abhishek Jain	7500
Mr. Abhijeet Jain	7500
Mr. Amit Jain	2500
Hem Chandra Jain - HUF	10000
Mrs. Nancy Jain	12500
Total	4420000

BUSINESS DETAILS

Line of Business :	Manufacturer of Empty Hard Gelatin Capsules.
Products :	Empty Hard Gelatin Capsules
Exports :
Products :	Empty Hard Gelatin Capsules
Countries :	Sri Lanka, Malaysia, Bangladesh Netherlands, Africa, Philippines, Jakarta, Dubai, Nepal.

PRODUCTION STATUS

Particulars	Installed Capacity	Actual Production
Empty Hard Gelatin Capsules	1600 million capsule p.a.	12780.31 lacs

GENERAL INFORMATION

No. of Employees :

Around 70

Bankers :

Þ Bank of India

Palajia Branch, Indore, Madhya Pradesh, India

Þ Industrial Development Bank of India

Þ ICICI Bank Limited

Facilities :

Credit Limit: Rs. 2.700 millions

Secured Loans

(Rs. in millions)

	31.03.2006
SASF (IDBI) (secured by first charges on land and building plant and machinery and other fixed assets installed or to be installed and further secured by personal guarantee of Directrors namely Mr. H C Jain, Mr. V H Solanki, Mr. R D kirtani and Mr. Vinod Kataria)	25.000
Bank of India (against hypothecation of book debts)	0.706
Bank of India (against hypothecation of stock) Cash Credit from Bank of India (secured by hypothecation of stock and book debts and equitable mortgage of flat and plot in the name of Mr. H C Jain and Mrs. Meena Jain and further secured by personal guarantee of Mr. H C Jain and Mrs. Meena Jain, Mr. V H Solanki nd Mr. Vinod Kataria	1.938
ICICI Bank Limited (hypothecation of Maruti 800)	0.165
City Corporation Maruti Finance Limited (Hypothecation of Maruti Alto)	0.123

Unsecured Loans

(Rs. in millions)

	31.03.2006
Deferement of MPCT	6.088
Deferement of CST	8.901

Banking Relations :	Satisfactory
Auditors :
Name :	Mahesh Virendra and Company Chartered Accountants
Address :	59A, Saket Nagar, G-1, Baldev Apartment, Indore, Madhya Pradesh, India
Tel. No.:	91-731-2565731/ 2566020
Mobile No.:	91-9425069546

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
4600000	Equity Shares	Rs. 10/-	Rs. 46.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
4420000	Equity Shares	Rs. 10/-	Rs. 44.200 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2007 (Proposed)	31.03.2006	31.03.2005
SHAREHOLDERS FUNDS
1] Share Capital		44.200	34.200	25.550
2] Share Application Money		0.000	2.820	2.650
3] Reserves & Surplus		0.000	0.000	0.000
4] (Accumulated Losses)		(0.057)	(1.045)	(70.052)
NETWORTH		44.143	35.975	(41.852)
LOAN FUNDS
1] Secured Loans		10.411	29.733	154.396
2] Unsecured Loans		19.675	14.989	13.503
TOTAL BORROWING		30.086	44.722	167.899
DEFERRED TAX LIABILITIES		13.213	13.213	0.000
TOTAL		87.442	93.910	126.047
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		62.352	66.036	63.806
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	25.828
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	9.093	12.906	11.301
	Sundry Debtors	23.512	19.218	23.938
	Cash & Bank Balances	0.155	0.242	0.385
	Other Current Assets	1.479	0.000	0.000
	Loans & Advances	2.199	3.543	8.350
Total Current Assets		36.438	35.909	43.974
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	11.340	8.517	7.582
	Provisions	1.210	0.639	0.000
Total Current Liabilities		12.550	9.156	7.582
Net Current Assets		23.888	26.753	36.392
MISCELLANEOUS EXPENSES		1.202	1.121	0.021
TOTAL		87.442	93.910	126.047

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007 (Proposed)	31.03.2006	31.03.2005
Sales Turnover		77.545	68.312	83.539
Other Income		0.337	0.206	0.155
Varianation in Stock		0.000	0.000	6.731
Total Income		77.882	68.518	90.425
Profit/(Loss) Before Tax		0.983	(3.863)	(13.590)
Provision for Taxation		0.000	(65.144)	(6.311)
Profit/(Loss) After Tax		0.983	69.007	(7.279)
Earnings in Foreign Currency :
	Export Earnings	0.000	1.264	0.000
Expenditures :
	Cost of Goods Sold	64.857	58.414	0.000
	Manufacturing Expenses	0.000	0.000	23.034
	Administrative Expenses	6.924	9.021	10.944
	Raw Material Consumed	0.000	0.000	40.728
	Interest	0.376	0.203	0.000
	Depreciation & Amortization	4.743	4.743	4.483
	Employee Cost	0.000	0.000	5.034
	Financial Cost	0.000	0.000	19.782
	Preliminary Expenses	0.000	0.000	0.010
Total Expenditure		76.900	72.381	104.017

KEY RATIOS

PARTICULARS		31.03.2007 (Proposed)	31.03.2006	31.03.2005
PAT / Total Income	(%)	1.26	100.71	(8.05)
Net Profit Margin (PBT/Sales)	(%)	1.26	(5.63)	(15.02)
Return on Total Assets (PBT/Total Assets}	(%)	0.99	(3.79)	(10.17)
Return on Investment (ROI) (PBT/Networth)		0.02	(0.10)	(0.32)
Debt Equity Ratio (Total Liability/Networth)		2.26	2.86	(3.19)
Current Ratio (Current Asset/Current Liability)		2.90	3.92	5.80

LOCAL AGENCY FURTHER INFORMATION

Trade References:

Þ Hemas Healthcare

Þ Prime Pharmaceuticals

Þ Eskayei

Þ Caps and Chemicals, Dewas Naka, Indore, Madhya Pradesh, India

Þ Anil Enterprises, 225 Hemilton Road, Indore, Madhya Pradesh, India

Þ Syncom Formulation, Dawa Bazar, Indore, Madhya Pradesh, India

The Company’s Fixed Assets of important value includes:

Þ Lease Hold Land

Þ Building

Þ Furniture and Fixtures

Þ Electrical Installations

Þ Plant and Machinery

Þ Computer

Þ Lab Equipments

Þ Car

Þ Utensialls

Þ Tata Sumo

Þ Alto Car

Þ Pager

Þ EPABX and Telephone

Þ ETP Plant Poll

Þ Maturi 800Car

As Per Web

Introduction

Erawat Pharma Limited is an integral part of Erawat Group and is involved exclusively in manufacturing and marketing of "Empty Hard Gelatin Capsules". EPL is launched and handled by well-experienced team of technical and professional people committed to provide the Domestic and International Pharmaceutical Industry with Capsules best suited for "High Speed Automatic Filling Machines".

History

The group came in existence with start of an Engineering Industry named Erawat Engineering Private Limited in 1989 at Pithampur (Madhya Pradesh) In this unit we have developed Automatic Capsule Making Plant, Capsule Printing Machines and Equipments for research in Center of Advance Technology (Department of Atomic Energy) as per their demand. Erawat Engineering has also supplied Automatic Capsule making plants to other capsule manufacturers.

Locations

Erawat Pharma Limited is located at Pithumpur Industrial Area, near Indore, the Industrial Capital of Madhya Pradesh. This place is well connected to all parts of the country and the world.

Their unit is situated right beside ICD (Inland Container Depot) of Indian Container Corporation (CONCOR), which is a dry port within Pithumpur Industrial Estate. This facilitates custom clearance and export of products from here thus reducing the delivery time considerably. The Industrial Estate is having a culture and environment of quality due to presence of large industrial houses with latest technology from within and through collaboration with many developed countries.

Clients

Þ Ajanta Pharma Limited, Mumbai

Þ Alpa Laboratories Limited, Pigdamber

Þ Aristo Pharmaceuticals L Imited, Mumbai

Þ Aurobindo Pharma Limited, Hyderabad

Þ Dabur India Limited, Sahibabad

Þ Cadila Healthcare Limited, Ahmedabad

Þ Cadila Pharmaceuticals Limited, Ahmedabad

Þ Cipla

Þ Dindayal Aushadhi Pvt. Limited, Gwalior

Þ Elysium Pharmaceuticals Limited, Baroda

Þ Eros Pharma Limited (Micro Labs), Bangalore

Þ Gracure Pharmaceuticals Limited, Delhi

Þ Hindustan Antibiotics Limited, Pune

Þ Ipca

Þ Karnataka Antibiotics And Pharma. Ltd., Bangalore

Þ Leben Laboratories Pvt. Limited, Akola

Þ Litaka Pharmaceuticals Limited, Pune

Þ Mission Pharmaceuticals Limited, Mumbai

Þ Medibios Laboratories (P) Limited, Mumbai (Emil)

Þ Rajasthan Drugs And Pharma Limited, Jaipur

Þ Sarabhai Chemicals, Baroda

Þ S.G. Pharmaceuticals, Baroda

Þ Sidmak Laboratories (India) Limited, Valsad

Þ Srushti Pharmaceuticals Limited, Bangalore

Þ Stallion Laboratories Pvt. Limited, Ahmedabad

Þ Syncom Formulations (India) Limited, Indore

Þ Skant

Þ Ttk Healthcare Limited, Chennai

Þ Vasu Pharmaceuticals Pvt. Limited, Baroda

Þ Unjha Formulations Limited, Unjha

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.41.67
UK Pound	1	Rs.83.41
Euro	1	Rs.56.61

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	4
--PROFITABILIRY	1~10	4
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--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	YES
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		44

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/normal.	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