MIRA INFORM REPORT

Report Date :

22.06.2011

IDENTIFICATION DETAILS

Name :	GENOVO DEVELOPMENT SERVICES LIMITED
Registered Office :	Plot No.36, Bommasandra Industrial Area, Anekal Taluk, Bangalore – 560 099, Karnataka
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	23.04.2008
Com. Reg. No.:	08-046164
Capital Investment/ Paid-up Capital:	Rs.18.296 millions
CIN No.: [Company Identification No.]	U24230KA2008PLC046164
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Manufacturer of Generic Drugs.
No. of Employees:	More than 50 (Approximately)

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 560000
Status :	Moderate
Payment Behaviour :	Slow
Litigation :	Clear
Comments :	Subject is an established company having moderate track. There appears a huge accumulated losses being 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

INFORMATION PARTED BY

Name :	Mr. Bathai
Designation :	Accounts Manager

LOCATIONS

Registered Office :	Plot No.36, Bommasandra Industrial Area, Anekal Taluk, Bangalore – 560 099, Karnataka, India
Tel No.:	91-80-7835088
Fax No.:	91-80-7835099
E-Mail :	pravin.iyer@medreich.com venkatesh.y@medreich.com cpb@ho.medreich.com
Website :	www.genovo.com
Location :	Owned
Corporate Office :	12/ 8, Saraswathi Ammal Street, Maruthi Seva Nagar, Bangalore – 560 033, Karnataka, India
Tel. No.:	91-80-25493334
Fax No.:	91-80-25474741

DIRECTORS

As on 30.09.2010

Name :	Mr. Rajeev Mehta
Designation :	Nominee Director
Address :	80, Wyatt Drive, London-SW 138 AB, London SW138AB
Date of Birth/Age :	19.08.1951
Date of Appointment :	26.06.2008
DIN No.:	00023079
Name :	Mr. Leopold Marie Berthier
Designation :	Nominee Director
Address :	73, AV Paul Doumer, Paris, France 75116
Date of Birth/Age :	02.10.1971
Date of Appointment :	26.06.2008
DIN No.:	02245929
Name :	Mr. Cesar Jerome Berthier
Designation :	Nominee Director
Address :	31, Rue Galilee, Paris, France 75116
Date of Birth/Age :	01.01.1941
Date of Appointment :	26.06.2008
DIN No.:	02245966
Name :	Mr. Chandanmal Pukhraj Bothra
Designation :	Nominee Director
Address :	No.14, 7^th Cross, Jai Bharath Nagar, Bangalore – 560 033, Karnataka, India
Date of Birth/Age :	20.07.1956
Date of Appointment :	26.06.2008
DIN No.:	00023108
Name :	Mr. Pravin Vidyanathan Iyer
Designation :	Nominee Director
Address :	C – 204, Mantri Woodlands, Arekere Gate, Baneerghata Road, Bangalore – 560 076, Karnataka, India
Date of Birth/Age :	10.08.1967
Date of Appointment :	26.06.2008
DIN No.:	00485814
Name :	Mr. Arun Kumar Chordia
Designation :	Director
Address :	41, 7^th Cross, Jai Bharath Nagar, Frazer Town, Bangalore – 560 033, Karnataka, India
Date of Birth/Age :	07.10.1971
Date of Appointment :	23.04.2008
Date of Ceasing :	26.06.2008
DIN No.:	00033328

KEY EXECUTIVES

Name :	Mr. Bathai
Designation :	Accounts Manager

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.09.2010

Names of Shareholders	No. of Shares
Medreich Limited, India	914770
Substipharm Development, France	914820
Arun Kumar Chordia	10
Govindraj Chillalle	10
Girish V.	10
Ramesh Dasari	10
Bathiah Deva Reddy	10
Total	1829640

Equity Share Breakup (Percentage of Total Equity)

As on 30.09.2010

Category	Percentage of Holding
Foreign holdings [Foreign institutional investors, Foreign Companies, Foreign Financial Institutions, Non-resident Indian or Overseas corporate bodies or others]	50.00
Bodies corporate	50.00
Total	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer of Generic Drugs.
Products:	Research and Development in Pharmaceutical Products

GENERAL INFORMATION

Customers :

Pharmaceuticals Industries

No. of Employees :

More than 50 (Approximately)

Bankers :

State Bank of Hyderabad, Sheriff House, 1^st Floor, No.85, Richmond Road, Bangalore – 560 025, Karnataka, India

Facilities :

Secured Loans	31.03.2010 Rs. In Millions	31.03.2009 Rs. In Millions
Term Loan (Due within one year Rs. 12.090 Millions) (Term loan availed from State Bank of Hyderabad secured by way of Hypothecation by a first pari passu charge on all moveable assets, both present and future, including first floating charge on current assets of the company.)	80.934	80.663
Total	80.934	80.663

Banking Relations :	--
Auditors :
Name :	K.S. Aiyar and Company Chartered Accountants
Address :	19/ 1, First Floor, Lower Palace Orchards, Bangalore – 560 003, Karnataka, India
Tel. No.:	91-80-23347171/ 23367171
Tele Fax No.:	91-80-23311221
E-Mail :	Bangalore@KSAiyar.com
Website :	www.KSAiyar.com
PAN No.:	AAAFK6843P
Joint Ventures:	Substipharm Development, France
Holding Company/ Joint Venture:	Medreich Limited CIN No.: U24232KA1973PLC002383 Address: Maruthi Seva Nagar, Bangalore – 560 033, Karnataka, India Line of Business: Manufacturer of Generic and branded drugs.
Associates :	Medreich Cephtech Private Limited Adcock Ingram Limited (India)

CAPITAL STRUCTURE

As on 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
1850000	Equity Shares	Rs.10/- each	Rs.18.500 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
1829640	Equity Shares	Rs.10/- each	Rs.18.296 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2010	31.03.2009
SHAREHOLDERS FUNDS
1] Share Capital		18.296	18.296
2] Share Application Money		0.000	0.000
3] Reserves & Surplus		160.168	160.168
4] (Accumulated Losses)		(37.329)	(30.382)
NETWORTH		141.135	148.082
LOAN FUNDS
1] Secured Loans		80.934	80.663
2] Unsecured Loans		0.000	0.000
TOTAL BORROWING		80.934	80.663
DEFERRED TAX LIABILITIES		0.000	0.000
TOTAL		222.069	228.745
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		189.534	184.454
Capital work-in-progress		0.000	6.058
INVESTMENT		0.000	0.000
DEFERREX TAX ASSETS		16.719	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	3.551	3.908
	Sundry Debtors	5.878	12.201
	Cash & Bank Balances	6.027	27.132
	Other Current Assets	0.000	0.000
	Loans & Advances	14.837	26.264
Total Current Assets		30.293	69.505
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	9.749	21.603
	Other Current Liabilities	3.507	7.742
	Provisions	1.236	1.947
Total Current Liabilities		14.492	31.292
Net Current Assets		15.801	38.213
MISCELLANEOUS EXPENSES		0.015	0.020
TOTAL		222.069	228.745

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009
	SALES
		Service Income	61.805	25.104
		Other Income	1.710	1.345
		TOTAL (A)	63.515	26.449
Less	EXPENSES
		Personnel Expenses	31.422	20.316
		Operating and Other Expenses	37.642	30.359
		TOTAL (B)	69.064	50.675
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		[5.549]	[24.226]
Less	FINANCIAL EXPENSES (D)		11.140	2.391
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		[16.689]	[26.617]
Less/ Add	DEPRECIATION/ AMORTISATION (F)		6.978	3.640
	PROFIT BEFORE TAX (E-F) (G)		[23.667]	[30.257]
Less	TAX (H)		[16.720]	0.125
	PROFIT AFTER TAX (G-H) (I)		[6.947]	[30.382]
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		[30.382]	0.000
	BALANCE CARRIED TO THE B/S		[37.329]	[30.382]
	IMPORTS
		Capital Goods	1.116	3.280
		Consumables	1.397	0.048
	TOTAL IMPORTS		2.513	3.328
	Earnings Per Share (Rs.)		[3.80]	[21.59]

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009
PAT / Total Income	(%)	[10.94]	[114.87]
Net Profit Margin (PBT/Sales)	(%)	[38.29]	[120.53]
Return on Total Assets (PBT/Total Assets}	(%)	[10.77]	[119.91]
Return on Investment (ROI) (PBT/Networth)		[0.17]	[0.20]
Debt Equity Ratio (Total Liability/Networth)		0.68	0.76
Current Ratio (Current Asset/Current Liability)		2.09	2.22

LOCAL AGENCY FURTHER INFORMATION

BACKGROUND:

The Company was incorporated in the year 2008 as a joint venture between Medreich Limited and Substipharm Development of France for Research and Development in pharmaceutical fields.

Review of the Company’s Performance:

The company in its second year of operations had achieved an income of Rs. 63.500 Millions. The loss before interest, depreciation and taxes were Rs. 5.500 Millions. After providing interest and depreciation the loss before tax was Rs. 23.700 Millions. The company is expected to perform much better in the coming financial year.

Contingent Liabilities not provided for :

Particulars	31.03.2010 Rs. in Millions
Bank Guarantee	5.920

Bankers Charges Report as per Registry

This form is for	Creation of charge
Corporate identity number of the company	U24230KA2008PLC046164
Name of the company	GENOVO DEVELOPMENT SERVICES LIMITED
Address of the registered office or of the principal place of business in India of the company	Plot No.36, Bommasandra Industrial Area, Anekal Taluk, Bangalore – 560 099, Karnataka, India
Type of charge	Immovable Property Movable Property
Particular of charge holder	State Bank of Hyderabad, Sheriff House, 1^st Floor, No.85, Richmond Road, Bangalore – 560 025, Karnataka, India E-Mail: SBHIF743@VSNL.COM
Nature of description of the instrument creating or modifying the charge	Agreement of Hypothecation of goods and assets. Agreement of loan for overall limit. Letter regarding the grant of individual limits Memorandum of Entry
Date of instrument Creating the charge	02.01.2009
Amount secured by the charge	Rs.80.000 millions
Brief particulars of the principal terms an conditions and extent and operation of the charge	Rate of Interest: At SBHPLR, currently at 13.75% p.a. ( floating) with a minimum of 13.5% p.a. monthly compounding and payable as and when debited to the account, with a rest option at the end of every two years. Interest will be calculated treating 365 days for the year irrespective of any intermittent leap year. Terms of Repayment: The term loan is to be paid in 20 quarterly installments of Rs.4.000 millions after a moratorium period. the repayment commences from the quarter July- September 2010 and last installment falls due in April -June 2015 Margin: Margin: 56%. Extent and Operation of the charge: The charge operates as security for payment and discharge by the Borrower to the bank of the aforesaid amount of Rs.80.000 millions and interest and costs charges and expenses and other monies due and payable by the borrower under or in respect of the aforesaid credit facilities or any of them.
Short particulars of the property charged	1) Exclusive charge on the current assets of the Company. First charge on factory land and building at Plot No. 36, Bommasandra Industrial Area, Anekal Taluk, Bangalore.

FIXED ASSETS:

• Land
• Factory Buildings
• Office Buildings
• Plant and Machinery
• Furniture and Fittings
• Vehicles
• Computer Equipments
• Software

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.44.91
UK Pound	1	Rs.72.90
Euro	1	Rs.64.48

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	3
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	3
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	3
--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	NO
--AFFILIATION	YES/NO	YES
--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	-

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

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