MIRA INFORM REPORT

Report Date :

21.07.2011

IDENTIFICATION DETAILS

Name :	VIRCHOW BIOTECH PRIVATE LIMITED
Registered Office :	Plot No. 4, SV Co-Operative Industrial Estate, IDA, Jeedimetla, Hyderabad – 500 005, Andhra Pradesh
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	04.04.2001
Com. Reg. No.:	01-36520
Capital Investment / Paid-up Capital :	Rs.124.762 millions
CIN No.: [Company Identification No.]	U24210AP2001PTC036520
TAN No.: [Tax Deduction & Collection Account No.]	HYDV01032D
PAN No.: [Permanent Account No.]	AABCV2578A
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturer of Biotechnology Based Products
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

B (27)

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	USD 420000
Status :	Moderate
Payment Behaviour :	Slow
Litigation :	Clear
Comments :	Subject is an established company having moderate track. There appears some accumulated losses recorded by the company. However, trade relations are reported as fair. Business is active. Payments are reported to be slow. The company can be considered for business dealings with some caution.

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 – April 1, 2010

Country Name	Previous Rating (31.12.2009)	Current Rating (01.04.2010)
India	A1	A1

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

LOCATIONS

Registered Office :	Plot No. 4, SV Co-Operative Industrial Estate, IDA, Jeedimetla, Hyderabad – 500 005, Andhra Pradesh, India
Tel. No.:	91-40-65452205 / 23096688 / 23098206 / 23800924
Fax No.:	91-40-23096677 / 23098205
E-Mail :	info@virchows.com accvbpl@rediffmail.com
Website :	http://virchows.com http://virchowbiotech.com/

DIRECTORS

As on 13.09.2010

Name :	Dr. Hemant Nandigala
Designation :	Director
Address :	Plot No. 550, Road No. 19, Jubilee Hills, Hyderabad – 500 055, Andhra Pradesh, India
Date of Birth/Age :	02.01.1974
Date of Appointment :	04.04.2001
DIN No. :	01561731
Name :	Dr. Nandigala Venkata Reddy
Designation :	Director
Address :	No. 550, Road No. 19, Jubilee Hills, Hyderabad – 500 033, Andhra Pradesh, India
Date of Birth/Age :	01.07.1943
Date of Appointment :	04.04.2001
DIN No. :	01740424
Name :	Mr. Mundla Narayana Reddy
Designation :	Director
Address :	No. 15-A, Road No. 2, Jubilee Hills, Hyderabad – 500 033, Andhra Pradesh, India
Date of Birth/Age :	01.06.1951
Date of Appointment :	04.04.2001
DIN No. :	00064392
Name :	Mr. Murali K. R. Tummuru
Designation :	Director
Address :	234, Pelham Drive, Brentwood TN 37027, United States
Date of Birth/Age :	05.01.1960
Date of Appointment :	22.11.2001
DIN No. :	02469013
Name :	Mr. Nandkishore Reddy Gurram
Designation :	Director
Address :	6850 Mcdougal CT, OH, Dublin 43017
Date of Birth/Age :	15.06.1961
Date of Ceasing :	16.12.2009
DIN No. :	02751236

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 13.09.2010

Names of Shareholders	No. of Shares
M Sudha	742225
M Narayana Reddy	937516
M Madhu Vushnu	856000
M Lakshmi Prasanna	265000
N Venkata Reddy	964825
N Hemanth	777641
Prasath N	825125
Tummuri Teena	113150
N Seshamma	120000
Murali Krishna Reddy Tummuru	1379512
Usha Kurre	739968
Virchow Labs Limited, India	7418180
Total	15139142

As on 13.09.2010

Equity Share Breakup	Percentage of Holding
Category
Directors or relatives of directors	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of Biotechnology Based Products

PRODUCTION STATUS AS ON 31.03.2010

Particulars	Qty Nos
Installed Capacity	50000p.m.
Production
Plermin
· 15g	4080
· 7.5g	15928
Debridace 15 Gm	78470
Gelsorg	46870
Bonista	8000

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

Axis Bank

Begumpet Branch, Hyderabad, Andhra Pradesh, India

Facilities :

Secured Loans	As on 31.03.2010 Rs. in millions	As on 31.03.2009 Rs. in millions
Term Loans From
Technology Development Board	8.200	13.800
SBIRI, Dept. of Biotechnology	81.000	52.500
Axis Bank, Begumpet, Hyderabad	0.000	13.979
Hire Purchase finance from Canara Bank	0.013	0.103
Total	89.213	80.382

Unsecured Loans	As on 31.03.2010 Rs. in millions	As on 31.03.2009 Rs. in millions
From Directors	0.000	45.694
From Shareholders	0.000	34.884
From CSIR	41.470	41.470
From Dept. of Science and Technology	32.710	32.830
Security Deposits	4.380	6.942
Total	78.560	161.820

Banking Relations :	--
Financial Institutions :	Department of Biotechnology Block 2, CGO Complex, Lodhi Road, New Delhi – 110 003, Delhi, India
Auditors :
Name :	Ramana Reddy and Associates (Formerly A M Reddy and Company) Chartered Accountant
Address :	2^nd Floor, My Home Plaza, Masab Tank, Hyderabad – 500 028, Andhra Pradesh, India
Tel. No.:	91-40-23316426 / 3316912

CAPITAL STRUCTURE

As on 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
15500000	Equity Shares	Rs.10/- each	Rs.155.000 millions

Issued, Subscribed Capital :

No. of Shares	Type	Value	Amount
15139142	Equity Shares	Rs.10/- each	Rs.151.391 millions

Paid-up Capital :

No. of Shares	Type	Value	Amount
8481753	Equity Shares	Rs.10/- each	Rs.84.818 millions
6657389	Equity Shares (Partly paid up Rs.6/- )	Rs.10/- each	Rs.39.944 millions
	Total		Rs.124.762 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2010	31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		124.762	75.743	78.611
2] Share Application Money		1.139	8.602	0.000
3] Reserves & Surplus		59.917	0.000	0.000
4] (Accumulated Losses)		(80.182)	(88.539)	(112.760)
NETWORTH		105.636	(4.194)	(34.149)
LOAN FUNDS
1] Secured Loans		89.213	80.382	156.183
2] Unsecured Loans		78.560	161.820	87.382
TOTAL BORROWING		167.773	242.202	243.565
DEFERRED TAX LIABILITIES		0.000	0.000	5.226
TOTAL		273.409	238.008	214.642
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		189.716	126.711	109.492
Capital work-in-progress		12.624	65.784	62.106
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		33.058	29.999	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	16.311	25.255	23.588
	Sundry Debtors	21.934	9.609	13.792
	Cash & Bank Balances	5.924	5.165	10.465
	Other Current Assets	21.457	14.697	23.219
	Loans & Advances	0.000	0.000	0.000
Total Current Assets		65.626	54.726	71.064
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	10.958	24.040	27.033
	Other Current Liabilities	16.657	14.989	5.982
	Provisions	0.000	0.183	0.309
Total Current Liabilities		27.615	39.212	33.324
Net Current Assets		38.011	15.514	37.740
MISCELLANEOUS EXPENSES		0.000	0.000	0.098
Research and Development Expenditure		0.000	0.000	5.206
TOTAL		273.409	238.008	214.642

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Sales
		- Domestic Sales	69.715	53.878	28.594
		- Export Sales	17.676	7.999	1.203
		Other Income	11.215	1.162	0.429
		TOTAL (A)	98.606	63.039	30.226
Less	EXPENSES
		Manufacturing Expenses	21.593	20.361	17.059
		R and D Expenses	9.989	8.082	12.347
		Administrative and Selling Expenses	33.925	22.398	35.944
		R and D Expenditure written off	0.000	5.205	5.205
		Preliminary Expenses written off	0.000	0.098	0.098
		Increase / (Decrease) in Stocks	10.532	(1.803)	(9.102)
		TOTAL (B)	76.039	54.341	61.551
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		22.567	8.698	(31.325)
Less	FINANCIAL CHARGES (D)		7.849	13.399	11.497
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		14.718	(4.701)	(42.822)
Less/ Add	DEPRECIATION/ AMORTISATION (F)		9.420	6.039	4.896
	PROFIT BEFORE TAX (E-F) (G)		5.298	(10.740)	(47.718)
Less	TAX (H)		(3.059)	(35.042)	25.449
	PROFIT AFTER TAX (G-H) (I)		8.357	24.302	(73.167)
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		(88.539)	(112.760)	(39.555)
Less	Prior Period Expenditure		0.000	0.081	0.038
	BALANCE CARRIED TO THE B/S		(80.182)	(88.539)	(112.760)
	EARNINGS IN FOREIGN CURRENCY		17.676	7.999	1.173
	IMPORTS
		Capital Goods	9.994	3.064
		Raw Materials	0.449	0.659
	TOTAL IMPORTS		10.443	3.723	3.117
	Earnings Per Share (Rs.)		0.55	--	--

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	8.48	38.55	(242.07)
Net Profit Margin (PBT/Sales)	(%)	6.06	(17.36)	(160.14)
Return on Total Assets (PBT/Total Assets}	(%)	2.07	(5.92)	(26.43)
Return on Investment (ROI) (PBT/Networth)		0.05	2.56	1.40
Debt Equity Ratio (Total Liability/Networth)		1.85	(67.10)	(8.11)
Current Ratio (Current Asset/Current Liability)		2.38	1.40	2.13

LOCAL AGENCY FURTHER INFORMATION

OPERATIONS AND FINANCIAL RESULTS

During the year the company has achieved a turnover of Rs.87.391 millions and earned a net profit of Rs.5.298 millions after providing depreciation of Rs.9.420 millions and financial charges of Rs.7.849 millions. The Directors are hopeful to project better financial results in the forthcoming year.

FORM 8

Corporate identity number of the company	U24210AP2001PTC036520
Name of the company	VIRCHOW BIOTECH PRIVATE LIMITED
Address of the registered office or of the principal place of business in India of the company	Plot No. 4, SV Co-Operative Industrial Estate, IDA, Jeedimetla, Hyderabad – 500 005, Andhra Pradesh, India
This form is for	Modification of charge
Charge identification (ID) number of the charge to be modified	10156930
Type of charge	Movable property (not being pledge)
Particular of charge holder	Department of Biotechnology Block 2, CGO Complex, Lodhi Road, New Delhi – 110 003, India
Nature of instrument creating charge	Deed of hypothecation dated 19.01.2011 read with agreement executed between the Department of Biotechnology and M/s. Virchow Biotech Private Limited
Date of instrument Creating the charge	19.01.2011
Amount secured by the charge	Rs.52.900 millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of Interest Up to 10.000 millions : 1% More than 10.000 millions : 2% Terms of Repayment Repayable in 10 equal yearly installments starting six months after completion of the Project Margin 46.15% Extent and Operation of the charge whole of movable and immovable properties aquired from the loan sanctioned by the DBT under the SBIRI scheme including its movable plant and machinery, machinery Spares and tools and accessories and other movable both present and future all acquired from the loan sanctioned by DBT.
Short particulars of the property or asset(s) charged (including complete address and location of the property)	· Whole of movable and immovable properties aquired from the loan sanctioned by the debt under the SBIRI scheme · The above movable and immovable properties includes movable plant and machinery, Machinery spares and tools and accessories and other movable both present and Future · all acquired from the loan sanctioned by DBT.
Particulars of the present modification	The Original Amount Secured By the Charge is Modified from Rs.26.450 millions To Rs.52.900 millions

FIXED ASSETS

· Land

· Buildings

· Boiler

· Plant and Machinery

· Q C Equipment

· Lab Equipment

· Electrical Equipment

· DG Set

· Office Equipment

· Computers

· Furniture and Fixtures

· Vehicles

WEBSITE DETAILS

Profile

Subject, an innovative biotechnology company headquartered at Hyderabad, India. Subject also has offices located in the United States of America (at Nashville, Tennessee)

With an aim of establishing itself in the sunrise industry of biotechnology, Subject commenced its Indian operations in the year 2001. The focus was to develop and manufacture a wide range of unique biologicals and high value bio-generic products at an affordable price. Since then they made impressive strides in terms of product development and have built a strong foundation with a commitment to innovation and process efficiencies. They have rapidly cornered a name for themselves as a developer of cutting edge therapies in this rapidly evolving biotechnology space.

The first mover strategy has enabled them to aggressively capture a lucrative niche in the therapeutic areas of recombinant medicines, advanced wound care products, Hemostats, ophthalmic; orthopaedic and cosmetics amongst others.

They have the credit of being the first company in the World to commercialize the biogenerics of recombinant Platelet Derived Growth Factor for wound healing and recombinant Parathyroid Hormone for osteoporosis. They also have a product portfolio consisting of 15 other niche products and five other recombinant bio-generics in pipeline.

They are a multi-faceted company, focusing not only on biotechnology innovation but also on training and developing the best and brightest scientific manpower. This combination of good scientists given the freedom and necessary resources, they believe, will lead to the generation of breakthroughs and ultimately result in the advancement of science that benefits mankind.

Group History and Background

Parent organization of the company, the $150 million Virchow Group is a name to reckon with in the burgeoning active pharmaceutical ingredients (APIs) and drug intermediates business in India.

Founded in 1981, the Virchow Group today is the World's largest manufacturer of the antibacterial Sulfamethoxazole, while its other group company.

Saraca Laboratories Limited is the World's largest manufacturer of the anti ulcerant Ranitidine. Virchow Group produces and caters to 90% of the World's requirement of Sulfamethoxazole. Other group companies are leading manufacturers of the newer 2nd 3rd and 4th generation Cephalosporins and other specialty chemicals.

Virchow group has developed a good expertise in the process development of Pharmaceutical and biological products. Virchow Group is known for its strong background in chemical process engineering for scale up and backward integration of active pharmaceutical ingredients and for efficiently managing the down stream operations involved in the production of various pharmaceutical products.

The Virchow group consists in all of 7 pharma manufacturing units and two Biotech setups. While all the units are WHO-GMP and ISO 9000:2001 Certified, the Group is also credited with the two US FDA approved sites. These sites and products have also been approved by Therapeutic Goods Administration, Australia (TGA) and by European Union’s Certificate of Suitability (COS)

Holistic perspective for total excellence

Environmental protection is an ongoing process at all Virchow Group Companies and every employee is an active participant in this process of maintaining a clean and green environment. Virchow Group has the credit of being the first Active Pharmaceutical Ingredient (Bulk Drug) unit in India to receive Certification for compliance with ISO 14001 norms.

This certification demonstrates that Virchow's Environment Management System (EMS) complies with most stringent environmental standards at international levels.

Company History

As part of expansion in pharma, Vichow group entered into fast growing Bio-pharma sector. In the year 2000, they along with Dr. Murali Tummuru put together a Biotech R and D center in Nashville, TN., USA. They identified niche products (mostly bio-generic recombinants and non-recombinant biomolecules), developed cost effective processes, and then relocated the operations to India in 2001.

In India they are currently housed in an 125,000 sft. facility dedicated for biotech operations. This facility is equipped to manufacture topical biologicals, recombinants to parenteral bio-pharmaceuticals. They have also built a separate animal house to undertake pre-clinical studies and created a clinical team for the conduct human clinical trials.

They pioneered the development of novel and innovative products based on advances in recombinant DNA and molecular biology. They introduced for the first time two bio-generic human therapeutics, Healace (rh PDGF-BB, marketed in India as Plermin by Dr. Reddy's Laboratories) and Osteotide (marketed in India as Bonista by Ranbaxy Laboratories Limited).

These products have improved the lives of hundreds of thousands of patients suffering from conditions related to chronic diabetic ulcers and osteoporosis. They at subject continue to fulfill our mission by expanding the business to serve patients around the world in need of treatment in the areas of Advanced Wound Care; Surgical Hemostasis; Opthalmology; Orthopaedics and Oncology amongst others.

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.44.46
UK Pound	1	Rs.71.67
Euro	1	Rs.62.94

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	4
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	2
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	2
--CREDIT LINES	1~10	2
--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		27

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	-

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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.