MIRA INFORM REPORT

Report Date :

26.04.2007

IDENTIFICATION DETAILS

Name :	CAPSUGEL INDIA LIMITED
Formerly Known As :	GELCAPS INDIA PRIVATE LIMITED
Registered Office :	H – 2, 3^rd Floor, C – Block, Community Centre, Naraina Vihar, New Delhi – 110028
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	06.12.1982
Com. Reg. No.:	55-14789
CIN No.: [Company Identification No.]	L74899DL1982PLC014789
TAN No.: [Tax Deduction & Collection Account No.]	JLDC00783G
PAN No.: [Permanent Account No.]	AAACC5021C
Legal Form :	A public limited liability company. Company’s Shares are listed on Stock Exchange.
Line of Business :	Manufacturer of Empty Hard Gelatine 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 150000
Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established and reputed company having satisfactory track. Directors are reported as experienced and respectable businessmen. Trade relations are reported as fair. Business is active. Payments are usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office / Factory :	H – 2, 3^rd Floor, C – Block, Community Centre, Naraina Vihar, New Delhi – 110028, India
Tel. No.:	91-11-25779661
E-Mail :	capsugelin@sify.com info@capsugelindia.com
Website :	http://www.capsugelindia.com
Corporate Office :	Sco. 1134-35, Sector 22-B, Chandigarh, India
Tel. No.:	91-172-2708115
Mobile No.:	91-9417213636
Fax No.:	91-172-2743734

DIRECTORS

Name :	Mr. A K Mahajan
Designation :	Chairman cum Managing Director
Address :	House No. 807, Sector 384, Chandigarh, India
Date of Birth/Age :	07.05.1957
Date of Appointment :	14.12.1993
Name :	Mr. Chiranjiv Singh
Designation :	Managing Director
Address :	House No. 324, Sector 9, Chandigarh, India
Date of Birth/Age :	25.08.1951
Date of Appointment :	01.04.1983
Name :	Ms. Hariti Singh
Designation :	Director
Address :	House No. 324, Sector 9, Chandigarh, India
Date of Birth/Age :	24.04.1955
Date of Appointment :	05.01.1997
Name :	Mr. Yogesh Guel
Designation :	Director
Address :	House No. 563, Sector 2, Panchkula
Date of Birth/Age :	08.06.1960
Date of Appointment :	27.01.2003
Name :	Mr. Jagatjit Singh
Designation :	Director
Address :	House No. 2548, Sector 47, Chandigarh, India
Date of Birth/Age :	27.12.1965
Date of Appointment :	27.01.2003
Name :	Mr. I S Bindra
Designation :	Director
Address :	House No 1017, Sector 27, Chandigarh, India
Date of Birth/Age :	22.12.1940
Date of Appointment :	22.03.2003
Name :	Mr. Gurcharan Singh
Designation :	Director
Address :	House No 113, Phase 3 B, Mohali
Date of Birth/Age :	01.01.1936
Date of Appointment :	08.02.2000

SHAREHOLDING PATTERN

Names of Shareholders	Percentage of Holding
Public financial companies	20.00 %
Directors or relatives of directors	55.00 %
Other top fifty shareholders	25.00 %
Total	100.00 %

BUSINESS DETAILS

Line of Business :

Manufacturer of Empty Hard Gelatine Capsules

Products :

Product Description	ITC Code No
Empty Hard Gelatine Capsules Size ‘0’ , ‘1’ & ‘2’	3503.00

PRODUCTION STATUS

Particulars	Unit	Installed Capacity
Empty Hard Gelatine Capsules	QTY	2100000000

GENERAL INFORMATION

No. of Employees :	About 150
Bankers :	State Bank of India Specialised Commercial Branch Sco : 103-106, Sector 17 B, Chandigarh – 160017, India

Banking Relations :	Satisfactory
Auditors :
Name :	V K Chadha and Company Chartered Accountants
Address :	F – II, South Extension part – II, New Delhi – 110049, India

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
5,000,000	Equity Shares	Rs. 10/- each	Rs. 50.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
4,037,190	Equity Shares	Rs. 10/- each	Rs. 40.372 Millions
	Less Calls in Arrears		Rs. 0.095 Millions
			Rs. 40.277 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2006	31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital		40.277	40.277	40.277
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		46.966	35.046	24.626
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		87.243	75.323	64.903
LOAN FUNDS
1] Secured Loans		51.145	56.721	40.925
2] Unsecured Loans		4.214	1.875	0.000
TOTAL BORROWING		55.359	58.596	40.925
DEFERRED TAX LIABILITIES		2.823	3.867	0.000
TOTAL		145.425	137.786	105.828
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		105.243	102.750	82.657
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		0.000	0.000	2.000
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	9.997	14.527	10.911
	Sundry Debtors	42.309	31.338	14.014
	Cash & Bank Balances	3.463	2.596	4.128
	Other Current Assets	0.042	0.018	0.000
	Loans & Advances	2.984	3.456	3.383
Total Current Assets		58.795	51.935	32.436
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	18.814	17.129	11.523
	Provisions
Total Current Liabilities		18.814	17.129	11.523
Net Current Assets		39.981	34.806	20.913
MISCELLANEOUS EXPENSES		0.201	0.230	0.258
TOTAL		145.425	137.786	105.828

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
Sales Turnover		158.609	130.381	119.668
Other Income		0.938	1.198	1.623
Total Income		159.547	131.579	121.291
Profit/(Loss) Before Tax		13.189	16.451	26.403
Provision for Taxation		1.270	6.030	2.030
Profit/(Loss) After Tax		11.919	10.421	24.373
Earnings in Foreign Currency :
	Export Earnings	NA	13.278	10.960
Total Earnings		NA	13.278	10.960
Expenditures :
	Manufacturing Expenses	0.000	0.000	26.048
	Administrative Expenses	0.000	0.000	8.276
	Selling Expenses	0.000	0.000	2.297
	Raw Material Consumed	46.931	42.390	29.741
	Consumption of stores and spares parts	5.661	4.904	0.000
	Increase/(Decrease) in Finished Goods	5.486	[6.302]	0.000
	Salaries, Wages, Bonus, etc.	14.490	13.238	0.000
	Managerial Remuneration	1.261	1.253	0.000
	Payment to Auditors	0.117	0.106	0.000
	Interest	5.786	3.314	0.000
	Insurance Expenses	0.709	0.543	0.000
	Power & Fuel	18.090	13.141	0.000
	Depreciation & Amortization	7.062	6.254	0.000
	Other Expenditure	40.765	36.287	24.432
Total Expenditure		146.358	115.128	90.794

KEY RATIOS

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
PAT / Total Income	(%)	7.47	7.92	20.09
Net Profit Margin (PBT/Sales)	(%)	8.32	12.62	22.06
Return on Total Assets (PBT/Total Assets}	(%)	8.04	10.64	22.94
Return on Investment (ROI) (PBT/Networth)		0.15	0.22	0.41
Debt Equity Ratio (Total Liability/Networth)		0.85	1.01	0.81
Current Ratio (Current Asset/Current Liability)		3.13	3.03	2.81

STOCK PRICES

Face Value	Rs.10.00 /-
High	Rs.8.00/-
Low	Rs.8.00/-

LOCAL AGENCY FURTHER INFORMATION

Fixed Assets

Ø Factory Building

Ø Land

Ø Plant and Machinery

Ø Furniture and Fixture

Ø Office Equipments

Ø Electrical Fittings

Ø Laboratory Equipments

Ø Workshop Equipments

Ø Vehicles

Bankers Charges Report as per Registry

Name of the company	CAPSUGEL INDIA LIMITED
Presented By	Mr. Chiranjiv Singh, Managing Director
1) Date and description of instrument creating the change	03.05.1994, Cash Credit [Bill Discount] agreement
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 0.950 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Against Drafts / Bill of Exchange whatever may be tenure thereof drawn accepted or endorsed by the company with or without documents.
4) Gist of the terms and conditions and extent and operation of the charge.	Second charge on fixed assets. Rate of interest is 5 % p.a. below minimum landing Repayable on demand Margin 15 %
5) Name and Address and description of the person entitled to the charge.	State Bank of India Ropar, Punjab
6) Date and brief description of instrument modifying the charge	Nil
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	Nil

This form is for	Modification of charge
Charge identification number of the charge to be modified	10000452
Corporate identity number of the company	L74899DL1982PLC014789
Name of the company	CAPSUGEL INDIA LIMITED
Address of the registered office or of the principal place of business in India of the company	H – 2, 3^rd Floor, C – Block, Community Centre, Naraina Vihar, New Delhi – 110028
Type of charge	Immovable property Book Debts Movable Property
Particular of charge holder	State Bank of India Specialised Commercial Branch Sco : 103-106, Sector 17 B, Chandigarh – 160017, India Sbi.09926@sbi.co.in
Nature of description of the instrument creating or modifying the charge	Agreement of Hyp. Of goods and assets dated 02.02.2006; Letter regarding the grant of Individual limits with in Overall Limit dated 02.02.2006 regd. With ROC on 16.04.2006 for credit facilities of Rs. 57.500 Millions; Modified on 16.06.2006; Regd with ROC on 17.08.2006; Credit facilities increased from RS. 57.500 Millions to Rs. 89.500 Millions. Now modified Supp. Ag. of Hyp. Of Goods and assets for increase in the overall limit and letter regarding the grant of individual limits with in overall limit
Date of instrument Creating the charge	08.03.2007
Amount secured by the charge	Rs. 101.000 Millions
Brief particulars of the principal terms an conditions and extent and operation of the charge	Rate of Interest Cash Credit Hyp : 2 % above SBAR at present 14.25 % with monthly rest Term Loan – I & II Existing : 1.25 % above SBAR Term Loan III 1.25 %5 above SBAR Term Loan Computer : 1.25 % above SBAR
Short particulars of the property charged	First charge over the assets being created out of the finance and hypothecation of Plant and Machinery and other Misc. assets as primary security and first charge over the existing movables and immovable assets of the company present and future in favour of Bank and the charge to be extended over the security already charged in favour of Bank in respect of respect of existing facilities as collateral security and the total charge has been increased from Rs. 89.500 Millions to Rs. 101 Millions
Date of latest modification prior to the present modification	16.06.2006
Particulars of the present modification	Supplemental agreement of Hyp. Of Goods and assets for increase in the overall limits and letter regarding the grant of individual limits with in overall limit dated 08.03.2007 Credit facilities increased from Rs. 89.500 Millions to Rs. 101 Millions other terms and conditions remain the same.

CIL, at present, has got a capacity to manufacture 2500 million pieces per annum of High Quality Empty Hard Gelatine Capsules. Presently the capsules in size 0, size 1 and size 2 are being manufactured as per the standards of Indian Pharmacopoeia in all types of colors and shades as per customer requirements. CIL also produces size 0 elongated (0el) as per the requirement of customers. CIL is presently operating 8 machines to achieve the above stated capacity.

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.41.29
UK Pound	1	Rs.82.30
Euro	1	Rs.56.20

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	6
--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		46

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