MIRA INFORM REPORT

Report Date :

02.02.2008

IDENTIFICATION DETAILS

Name :	SOFTGEL HEALTHCARE PRIVATE LIMITED
Registered Office :	No. 18, Dr. Nair Road, T. Nagar, Chennai – 600 017, Tamilnadu
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	23.10.2003
Com. Reg. No.:	18-51829
CIN No.: [Company Identification No.]	U24231TN2003PTC051829
TAN No.: [Tax Deduction & Collection Account No.]	CHES20646D
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturer and Exporter of Medicines (Soft Gelatin Capsules)

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/normal.	Small

Maximum Credit Limit :	USD 240000
Status :	Moderate
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is an established company having moderate track. Profit margin is under severe pressure. Payments are reported as slow but correct. The company has been financially assisted by it’s bankers. It can be considered normal for business dealings at usual trade terms and conditions with slight caution, initially.

LOCATIONS

Registered Office :	No. 18, Ground Floor, Dr. Nair Road, T. Nagar, Chennai – 600 017, Tamilnadu, India.
Tel. No.:	91-44-42048590 / 52048590 / 24363633
Mobile No.:	91-9841033636 / 93828 67953
Fax No.:	91-44-42048597
Email ID :	sidharth@softgelhealthcare.com psr@madraspharma.com ed@softgelhealthcare.com
Website:	http://softgelhealthcare.com
Factory:	Survey No. 20/1, Vandalur – Kelambakkam Road, Pudupakkam, Village Kancheepuram District, Chennai – 603 103, Tamil Nadu, India

DIRECTORS

Name :	Mr. A.M. Sulaiman
Designation :	Director
Address :	No. 18, Dr. Nair Road, T. Nagar, Chennai – 600 017, Tamilnadu, India.
Date of Appointment :	23.10.2003
Name :	Mr. Sidharth Baid
Designation :	Director
Address :	No. 19, Haddows Road, Chennai – 600 006, Tamilandu, India.
Date of Appointment :	23.10.2003
Name :	Dr. M. Venkata Ganesh
Designation :	Director
Address :	No. 31/59, 1^st Main Road, Vijaya Nagar, Velachery, Chennai – 600 042, Tamilandu, India.
Date of Appointment :	23.10.2003
Name :	Dr. T. Palaniappan
Designation :	Director
Address :	16, Venkatnarayana Road, T. Nagar, Chennai – 600 017, Tamilandu, India.
Date of Appointment :	23.10.2003
Name :	Mr. Harjeet Singh Anand
Designation :	Director
Address :	234, 6^th Main Road, Anna Nagar, Chennai – 600 040, Tamilandu, India.
Date of Birth/Age :	04.08.1957
Date of Appointment :	23.10.2003
Name :	Mr. V. Venkatraman
Designation :	Director
Address :	No. 5, malay Road, 30, Vasanth Apartments, T. Nagar, Chennai – 600 017, Tamilnadu, India.
Date of Appointment :	10.08.2004
Name :	Mr. A. L. Gandhimathi
Designation :	Director
Address :	10, A, VOC, 2nd Main Road, Kodambakkam, Chennai – 600 018, Tamilnadu, India.
Date of Birth/Age :	02.03.1958
Date of Appointment :	02.08.2004

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares
Mr. A. M. Sulaiman	270000
Mr. Sidharth Baid	220000
Dr. M. Venkata Ganesh	270000
Dr. T. Palaniappan	270000
Mr. Harjeet Singh Anand	130000
Mr. Ravinder Singh Anand	130000
Mr. S. Geetha	40000
Mr. V. Uma Maheswari	100000
Mr. V. Veena	20000
Mr. V. Vani	50000
Mr. Jamuna Venkatraman	170000
Mr. Arun Venkatraman	50000
Mr. V. Venkatraman	50000
Mr. N. Meenakshy	270000
Mr. B. Mangaleswari	100000
Mr. A.L. Gandhimathi	270000
Mr. S. Manohar	440000
Mr. Narendra Kumar Baid	50000
Mr. Hari Balachandran	270000
Mr. M. N. Kamaludden	150000
Mr. Venkatachalam Natarajan	320000
TOTAL:	3700000

Equity Shares Breakup (Percentage of Total Equity):

Sr No.	Category	Percentage
1	Directors or relative of directors	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer and Exporter of Medicines (Soft Gelatin Capsules)
Products:	· Vitamin A · Mixed Vitamin E (D and Dl) · Vitamin A and D · Garlic · Vitamin E (D-Alpha Tocopherol) · Herb Concentrate Products · Vitamin E (D-Alpha Tocopheryl cetate) · Essential Fatty Acids · Vitamin E (Dl-Alpha Tocopheryl Acetate) · Marine Lipid Concentrate · Vitamin E (Water Dispersible) · Speciality Products · Vitamin E (Mixed Tocopherol) · Vitamins and Minerals

GENERAL INFORMATION

No. of Employees :	80
Bankers :	· Indian Overseas Bank, C and C Branch, Mylapore, Chennai – 600 014, Tamilnadu, India. · ICICI Bank
Facilities :	----

Banking Relations :	Satisfactory
Auditors :
Name :	Mr. B. Srinivasan Chartered Accountant
Address :	No. 3, Play Ground View Street, Nandanam Extension, Chennai – 600 035, Tamilnadu, India.
Associates/Subsidiaries :	During the year the subject company has received Regulatory Approvals ( for cGMP compliance) from the following agencies: · Pharmacy and Poisons Board – Kenya · National Drug Authority – Uganda · Ministry of Health – Ukraine · Tanzania Food and Drug Agency – Tanzania · Health Product and Food Branch Directorate – Canada

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
10000000	Equity Shares	Rs. 10/- each	Rs.100.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
9500000	Equity Shares	Rs. 10/- each	Rs.95.000 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		95.000	55.200	37.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		0.000	0.000	0.000
4] (Accumulated Losses)		(37.182)	(1.198)	(0.000)
NETWORTH		57.818	54.002	37.000
LOAN FUNDS
1] Secured Loans		226.150	143.610	46.101
2] Unsecured Loans		0.000	0.000	0.796
TOTAL BORROWING		226.150	143.610	46.897
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		283.968	197.613	83.897
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		232.483	219.530	80.939
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	27.953	1.712	0.000
	Sundry Debtors	17.666	3.315	0.000
	Cash & Bank Balances	2.864	2.423	2.822
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	15.725	8.898	2.070
Total Current Assets		64.208	16.348	4.892
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	16.423	38.681	2.271
	Provisions	0.000	0.000	0.000
Total Current Liabilities		16.423	38.681	2.271
Net Current Assets		47.785	(22.333)	2.621
MISCELLANEOUS EXPENSES		3.700	0.416	0.337
TOTAL		283.968	197.613	83.897

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006
Sales Turnover		27.431	3.288
Other Income		1.825	0.798
Total Income		29.256	4.086
Profit/(Loss) Before Tax		(35.884)	(1.116)
Provision for Taxation		0.100	0.082
Profit/(Loss) After Tax		(35.984)	(1.198)
Export Value		15.006	3.288
Import Value		6.328	21.713
Expenditures :
	Depreciation & Amortization	8.926	0.673
	Financial charges	18.783	1.045
	Other Expenditure	9.722	1.766
Total Expenditure		37.431	3.484

KEY RATIOS

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
PAT / Total Income	(%)	(122.99)	(29.31)	NA
Net Profit Margin (PBT/Sales)	(%)	(130.81)	(33.94)	NA
Return on Total Assets (PBT/Total Assets}	(%)	(12.09)	(0.47)	NA
Return on Investment (ROI) (PBT/Networth)		(0.62)	(0.02)	NA
Debt Equity Ratio (Total Liability/Networth)		4.19	3.37	0.06
Current Ratio (Current Asset/Current Liability)		3.90	0.42	2.15

LOCAL AGENCY FURTHER INFORMATION

Form 8:-

Name of the Company

SOFTGEL HEALTHCARE PRIVATE LIMITED

Presented by

Mr. Sidharth Baid

1. Date and description of the instrument

creating or evidencing the charge

29^th July 2004 – Letter of Hypothecation

2. Amount secured by the charge /amount

owing on security of the charge

	Rs. (In Millions)
Term Loan	76.000
Letter of Guarantee	7.000
	83.000

3. Short Particular of the property charged. If

the property acquired is subject to change

date of acquisition of property should be

given

First Charge on the entire block assets of the company including 1.96 acres of land at Vandalur-Kelambakkam Main Road, Date of Acquisition – 30^th October 2003.

4. Gist of the terms and conditions and extent

and operation of the charge.

The borrower promises and undertakes to repay the amount of the said loan in 24 quarterly installments starting from June, September 2005. 1-23 Installments = Rs. 3.167 Millions from July, September 2005. 24^th Installment = Rs. 3.159 Millions.

The Borrower shall, so long as the loan remains unpaid to the bank pay interest at BPLR which is presently @11% p.a. on the last days of March, June, September and December each year and with in 7days from the date which it falls due for payment.

In case there is default of installment payment bank shall be entitled to charge interest at 2% over rate mentioned above.

That the securities described in the schedule are hereby hypothecated to the bank as security for all monies for time being owing by the borrower to the Bank. The term machinery goods shall include those already fixed/lying loose in the premises of kudupakkam village and those hereafter fixed. First charge is on the entire block assets of the Co. 1.96 acres of land at Vandalur-Kalambakkam Main Road.

5. Names, address and description of the

persons entitled to charge

Indian Overseas Bank, C and IC Branch, Mylapore, Chennai – 600 014, Tamilnadu, India.

6. Date and brief description of instrument

modifying the charge

N.A.

7. Particular of modification specifying the

terms and conditions or the extent or

operation of the charge in which

modification is made and the details of

modification

N.A.

Corporation identity number or foreign company registrations number of the company

U24231TN2003PTC051829

Name of the company

SOFTGEL HEALTHCARE PRIVATE LIMITED

Address

No. 18, Ground Floor, Dr. Nair Road, T. Nagar, Chennai – 600 017, Tamilnadu, India.

This Form is for

Creation of Charge

Type of Charges

· Immovable property

· Any Interest in immovable Property

· Movable property

· Floating Charge

Particular of the charge holder

Indian Overseas Bank, Commercial and Institutional Credit Branch, 98-A, Dr. Radhakrishnan Salai, Mylapore, Chennai – 600 014, Tamilnadu, India

Email ID:chn12roc@chemsco.iobnet.co.in

Nature or description of the instrument creating charge

Letter of hypothecation (for securing machineries / Vehicles / goods / book debts), Letter of confirmation for equitable mortgage by deposit of title deeds.

Date of the instrument creating charge

26.12.2006

Amount Secure by the charge

Rs. 229.500 millions

Brief of the principal terms and conditions and extent and operation of the charge

Rate of Interest:

Terms Loans I and II: Interest 11.50% per annum, Term Loan III: Interest BPLR plus 3% i.e, 14.50% p.a presently.

Terms of Repayment:

Term Loans I and II repayable as per terms agreed; Term Loan III is repayable in 20 quarterly installments of Rs. 2.500 millions each after a holiday period of two years commencing from the quarter January – March 2009; Interest during the holiday period shall be serviced then and there. Cash Credit repayable on demand.

Margin:

Term Loans I and II: Margin on Land and Building 40%, Margin on Miscellaneous Fixed assets 25% (Term Loans I and II were sanctioned towards soft gel capsules manufacturing unit at an estimated cost of Rs. 230.000 millions, Term Loan III : Margin: 25%

Others:

Facilities sanctioned	Rs. in millions
Term Loan I	119.000
Term Loan II	26.000
Term Loan III	50.000
Cash Credit Hypothecation	30.000
Letter of Guarantee	4.500
Total	229.500

Shorts particulars of the Property charged

Hypothecation of the entire current assets and a first charge on the block assets of the company and the assets of R and D unit.

WEBSITE DETAILS:

Subject is a new-age manufacturer of soft gelatin capsules for

· Rx

· OTC and

· Nutraceuticals

To cater to the growing needs of Pharmaceutical Companies worldwide, Subject has newly set up an advanced manufacturing plant with state-of-the-art machineries and technically skilled personnel.

Subject is an associate company of Madras Pharmaceuticals, an over 25-year-old WHO GMP certified manufacturer of complex healthcare drugs.

Located at Chennai, South India, Subject is well-connected with Air, Rail, Road and Ship. With a well-defined orgonogram and skilled manpower, Subject is all set to be a leading name in the manufacture of soft gelatin capsules.

Vision:
At the company, their vision is to support their marketing partners with the latest innovations in Softgel technology and to become a global leader as a manufacturer of health care products by providing solutions and alternatives.

Mission:

· Exploit the latest technology and provide significant added value to their partner.

· Build a diverse, productive and challenging workplace.

· Achieve market leadership in all segments of their product line

The Company Team apart from their own employees includes:

· Marketing partner

· Active Pharmaceutical Ingredient Suppliers

· Excipient Suppliers

· Packaging Material Suppliers

· Contract Research Organizations

To ensure a safe working environment, Subject carries out all aspects of manufacturing in a manner consistent with the health and safety requirements of all employees within the organization. They continuously hold education and training sessions at all levels to develop a sense of commitment and involvement of employees for creating awareness on safety with emphasize on prevention of accidents.

As an environment caring company, Subject has invested in effective treatment and disposal of wastes. In house effluent treatment plant and waste disposal system have been provided to ensure proper environment systems are maintained.

Subject has also charted a series of employee welfare measures that include community welfare, training and development, incentive programs and recreation facilities.  

PRODUCT LIST

· Vitamin A

· Mixed Vitamin E (D and Dl)

· Vitamin A and D

· Garlic

· Vitamin E (D-Alpha Tocopherol)

· Herb Concentrate Products

· Vitamin E (D-Alpha Tocopheryl cetate)

· Essential Fatty Acids

· Vitamin E (Dl-Alpha Tocopheryl Acetate)

· Marine Lipid Concentrate

· Vitamin E (Water Dispersible)

· Speciality Products

· Vitamin E (Mixed Tocopherol)

· Vitamins and Minerals

PRESS CLIPPING:

Softgel Healthcare starts new plant

Thursday, March 16, 2006 08:00 IST

Gireesh Babu, Chennai

Softgel Healthcare Private. Limited., an associate of Madras Pharmaceuticals Limited, engaged in softgel manufacturing, has commissioned its manufacturing plant exclusively for contract manufacturing, focusing on regulated markets.

The new plant at Vandalur-Kelambakkam Road, in an area of 65,000 sq. ft., has complied with WHO-GMP certification and will manufacture softgel capsules for overseas costumers. The plant with a capacity of 120 to 150 crore capsules per annum, set up at an investment of Rs 25 crore will also be opting for advanced regulatory approvals from authorities of US, UK, Canada, Brazil and Australia, informed Sidharth Baid, executive director, Softgel Healthcare.

"The global market is in need of such contract manufacturing units with certification from regulatory authorities of the regulated markets. Our first plan is to double the capacity of the plant within a year. The company expects that the plant will get approval from US FDA within a period of 18 months," added Sidharth.

Softgel offers four manufacturing lines for two pharmaceuticals and two nutraceuticals each consisting of dedicated HVAC system and imported machinery from South Korea. All manufacturing activities are done under the worldwide norm of Class 10,000 condition, according to the company. The company also plans to double its manufacturing lines with two pharmaceuticals and two neutraceuticals with the capacity expansion, informed Sidharth.

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.39.36
UK Pound	1	Rs.78.29
Euro	1	Rs.58.48

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	4
--PROFITABILIRY	1~10	-
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	4
--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	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		38

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