MIRA INFORM REPORT

Report Date :

23.04.2008

IDENTIFICATION DETAILS

Name :	ELCON DRUGS AND FORMULATIONS LIMITED
Registered Office :	D - 68, Ambabari , Jaipur – 302 012, Rajasthan
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	04.01.1994
Com. Reg. No.:	17-7922
CIN No.: [Company Identification No.]	U24232RJ1994PLC007922
TAN No.: [Tax Deduction & Collection Account No.]	JPRE00201F
Legal Form :	A closely held Public Limited Liability Company
Line of Business :	Manufacturer of Pharmaceuticals products.

RATING & COMMENTS

MIRA’s Rating :

B

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	USD 35000
Status :	Moderate
Payment Behaviour :	Slow
Litigation :	Clear
Comments :	Subject is an old and established company having moderate track. Company’s financial position is improving. It has been successful in wiping – off all its previous losses during the year 2006-07. Trade relations are fair. Payments are reported as slow but correct. The company can be considered for small to mediocre business dealings at usual trade terms and conditions.

INFORMATION DECLINED BY

Name :	Mr. Amit Khandelwal
Designation :	Director
Date :	23.04.2008

LOCATIONS

Registered Office :	D - 68, Ambabari , Jaipur – 302 012, Rajasthan, India
Tel. No.:	91-141-339535 / 339623
Fax No.:	91-141-339205
E-Mail :	sureshsga@rediffmail.com elcondrugs@yahoo.com
Factory:	F-59/60 Riico Industrial Area, Bindayaka, Jaipur – 302 012, Rajasthan, India
Tel. No.:	91-141- 2240846
Mobile No.:	91-9829010546

DIRECTORS

Name :	Mr. Naveen Khandelwal
Designation :	Director
Address :	D -68, Ambabari , Jaipur – 302 023, Rajasthan, India
Date of Birth/Age :	14.07.1969
Date of Appointment :	04.01.1994
Name :	Mr. Kailash Chandra Khandelwal
Designation :	Director
Address :	D -68, Ambabari , Jaipur – 302 023, Rajasthan, India
Date of Birth/Age :	04.03.1944
Date of Appointment :	05.06.1995
Name :	Mr. Amit Khandelwal
Designation :	Director
Address :	D -68, Ambabari , Jaipur – 302 023, Rajasthan, India
Date of Birth/Age :	21.01.1972
Date of Appointment :	04.01.1994

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders (as on 30.09.2004)	No. of Shares
Mr. Naveen Khandelwal	73070
Mr. Amit Khandelwal	29913
Mr. Kailash Khandelwal	143597
Mrs. Manju Khandelwal	16500
Mr. Bansidhar Khandelwal	100
Mrs. Sarika Khandelwal	1650
Mrs. Shanti Devi Khandelwal	76850
Allis Remedies Private Limited	20000
Mrs. Anuradha Khandelwal	10800
Mr. Hari Krishnan Khandelwal	22500
Mrs. Meenu Gupta	2500
Mr. Pradeep Kumar	2500
Mr. Prem Sonkhiya	10
Mr. Raaji Lal Swami	11900
Scortia Lab Private Limited	94700
Mr. Suresh Chand Gupta	35000
Mr. Vinay Khandelwal	8500
Mr. Virendra Khandelwal	30500
Mr. Y S Mathur	5010
Mrs. Vimla Devi Khandelwal	5000
Mr. Vijay Khandelwal	37000
Mr. Vijay Laxmi Khandelwal	5000
Mr. Vinod Khandelwal	3500
Mr. Satya Narain Mamodia	10000
Mrs. Laxmi Narain Khandelwal	4000

Equity Shares Breakup (Percentage of Total Equity): (as on 31.03.2007):-

Sr No.	Category	Percentage
1	Directors or relative of directors	57.00
2	Other top fifty (50) shareholders	43.00
	Total	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer of Pharmaceuticals products.
Products:	Pharmaceutical Medicine

GENERAL INFORMATION

Bankers :	State Bank of India Address: Commercial Branch, Church Road, Jaipur – 302 001, Rajasthan, India
Banking Relations :	Satisfactory
Auditors :
Name :	SGA and Associates Chartered Accountants
Address :	“Sukh - Samriddhi”, 1^st Floor, H -4/58, Ramesh Marg, C – Scheme, Jaipur – 302 001, Rajasthan India
Associates/Subsidiaries :	Nil

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
800000	Equity Shares	Rs. 10/- each	Rs. 8.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
771500	Equity Shares	Rs. 10/- each	Rs. 7.715 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2007	31.03.2006	31.03.2005
SHAREHOLDERS FUNDS
1] Share Capital		7.715	7.615	7.615
2] Share Application Money		0.000	0.100	0.000
3] Reserves & Surplus		0.815	0.000	0.000
4] (Accumulated Losses)		0.000	[0.877]	[0.490]
NETWORTH		8.530	6.838	7.125
LOAN FUNDS
1] Secured Loans		5.909	7.148	10.927
2] Unsecured Loans		12.962	2.335	2.183
TOTAL BORROWING		18.871	9.483	13.110
DEFERRED TAX LIABILITIES		0.680	0.000	0.000
TOTAL		28.081	16.321	20.235
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		21.011	20.265	14.757
Capital work-in-progress		0.000	0.012	1.713
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.229	0.185
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	3.776	4.530	3.539
	Sundry Debtors	4.888	2.893	2.924
	Cash & Bank Balances	0.072	0.170	1.876
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	2.900	1.196	0.817
Total Current Assets		11.636	8.789	9.156
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	4.566	12.974	5.576
	Provisions	0.000	0.000	0.000
Total Current Liabilities		4.566	12.974	5.576
Net Current Assets		7.070	[4.185]	3.580
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		28.081	16.321	20.235

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		31.163	28.618	27.389
Other Income		0.026	0.096	0.278
Total Income		31.189	28.714	27.667
Profit/(Loss) Before Tax		2.676	[1.479]	0.506
Provision for Taxation		0.962	0.002	0.230
Profit/(Loss) After Tax		1.714	[1.477]	0.276
Expenditures :
	Raw Material Consumed	17.697	22.841	20.319
	Increase/(Decrease) in Finished Goods	0.372	[0.190]	0.143
	Salaries, Wages, Bonus, etc.	2.221	1.372	0.782
	Payment to Auditors	0.041	0.033	0.031
	Interest	2.200	1.473	1.481
	Insurance Expenses	0.101	0.064	0.047
	Power & Fuel	1.770	1.430	0.868
	Depreciation & Amortization	1.078	0.786	0.699
	Other Expenditure	3.033	2.384	2.791
Total Expenditure		28.513	30.193	27.161

KEY RATIOS

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
PAT / Total Income	(%)	5.49	[5.14]	0.99
Net Profit Margin (PBT/Sales)	(%)	8.58	[5.16]	1.84
Return on Total Assets (PBT/Total Assets}	(%)	8.20	[5.04]	1.97
Return on Investment (ROI) (PBT/Networth)		0.31	[0.22]	0.07
Debt Equity Ratio (Total Liability/Networth)		2.75	3.28	2.62
Current Ratio (Current Asset/Current Liability)		2.55	0.67	1.64

LOCAL AGENCY FURTHER INFORMATION

FORM 8:-

Name of the company

ELCON DRUGS AND ULATIONS LIMITED

Presented By

Mr. Naveen Khandelwal, Director

1) Date and description of instrument creating the change

· General agreement fro grant of industrial advances and hypothecation of movables book debts and other assets

· Ancillary agreement No. 12, Hypothecation of goods, book debts, movable and other assets.

· Ancillary agreement No.2 Pledge of goods receivables bill in the course of collection.

· Ancillary agreement No. 6 Letter of credit , guarantee and indemnities

· guarantee agreement fro small industrial advances

All above documents dated 29.01.2001

2) Amount secured by the charge/amount owing on the securities of charge

Particulars	Rs. in millions
CC (Stocks )	2.500
CC (Bills)	1.500
Fund Based Limit	4.00
Bank Guarantee	0.500
Non Fund Based Limit	0.500
Total Credit Facility	4.500

Both way interchangeability of Rs. 0.500 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

Mortgage of two industrial plots at No. F -59 and F -60 RIICO Industrial Area, Bindayaka, Jaipur measuring 4010 Sq.yds and first charge on all civil construction on this plot

Equitable mortgagee of house at Plot No. D–68, Ambabari Jaipur

Hypothecation of stocks of raw materials , stores and spares , stock in progress, finished , book debts, etc.

4) Gist of the terms and conditions and extent and operation of the charge.

Interest

@3% above the SBI Advance Rate with a minimum of 15% p.a rising and falling therewith and to be applied at quarter

Repayment:

On Demand

Margin:

Raw materials	25%
Work in progress	25%
Finished goods	25%
Receivables / Bills	30%
Bank guarantee	25%

5) Name and Address and description of the person entitled to the charge.

State Bank of India

Commercial Branch, Church Road, Jaipur

6) Date and brief description of instrument modifying the charge

General agreement for grant of small industrial advances and hypothecation of movables , book debts and other assets

Ancillary agreement No.1 Hypothecation of goods, book debts, movable and other assets.

Ancillary agreement No.3 – Advances against receivables and bills in the course of collection

Ancillary agreement No. 6 – Letter of credit , guarantee and indemnities

Omnibus Counter guarantee

Arrangement Letter

All above documents dated 15.10.2004

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.

Credit Facility modified as under:

Particulars	Existing	Modified
	(Rs in millions )
CC (Stocks )	2.000	3.000
CC (Book Debts )	(0.500)	(1.000)
Fund Based Limit	2.000	3.000
Bank guarantee	0.500	0.400
LC	0.000	0.600
Non Fund Based Limit	0.500	1.000
Total Credit Facility	2.500	4.000

* Within CC (Stock)

* Cover period 60 days

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.39.94
UK Pound	1	Rs.79.03
Euro	1	Rs.63.39

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	2
--LIQUIDITY	1~10	4
--LEVERAGE	1~10	4
--RESERVES	1~10	3
--CREDIT LINES	1~10	3
--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	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		34

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.	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