MIRA INFORM REPORT

Report Date :

05.04.2012

IDENTIFICATION DETAILS

Name :	INCHEM LABORATORIES PRIVATE LIMITED ( w.e.f 20.09.2010)
Formerly Known As :	SRI SAI ORGANICS PRIVATE LIMITED
Registered Office :	8-3-214/54/3 B-16 Madhuranagar. S R Nagar, Hyderabad – 500038, Andhra Pradesh
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	05.12.2006
Com. Reg. No.:	01-051498
Capital Investment / Paid-up Capital :	Rs.1.000 Million
CIN No.: [Company Identification No.]	U24110AP2006PTC051498
TAN No.: [Tax Deduction & Collection Account No.]	HYDS17869F
PAN No.: [Permanent Account No.]	AAKCS2948C
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Manufacturer of active pharmaceutical ingredients and pharmaceutical intermediates.

RATING & COMMENTS

MIRA’s Rating :

B (28)

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

Maximum Credit Limit :	USD 130000
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 dealing with some conditions.

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 – September 30, 2011

Country Name	Previous Rating (30.06.2011)	Current Rating (30.09.2011)
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 :	8-3-247/54/3 B-16 Madhuranagar. S R Nagar, Hyderabad – 500038, Andhra Pradesh
Tel. No.:	91-40-23708811/23708800
Fax No.:	91-40-23708822
E-Mail :	finance@inchemlabs.com
Corporate Office :	B-16 Madhuranagar. S R Nagar, Hyderabad – 500038, Andhra Pradesh, India
Tel. No.:	91-40-2612038/2612598
Fax No.:	91-40-23715528/23701738

DIRECTORS

Name :

Mr. Podduturi Rajshekar Reddy

Designation :

Director

Address :

F-32, Difence Colony, Sikh Village, Secunderabad, Andhra Pradesh, India

Date of Birth/Age :

16.08.1972

Date of Appointment :

05.12.2006

DIN No.:

01851907

Other Directorship:

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U24110AP2006PTC051498	INCHEM LABORATORIES PRIVATE LIMITED	Director	12/5/2006	12/5/2006	-	Active	NO
2	U74999AP2008PTC058673	KONDAPALLY ENVIROTECH PRIVATE LIMITED	Director	3/30/2009	3/30/2009	-	Active	NO

Name :

Mr. A Suresh

Designation :

Director

Address :

Plot No 303, Parkview Enclave, Opp Telephone Exchange, Kphb Kukat Pally, Hyderabad – 500072, Andhra Pradesh, India

Date of Birth/Age :

20.06.1971

Date of Appointment :

05.12.2006

DIN No.:

01904055

Name :

Mr. Vinodbabu Madhavaram

Designation :

Whole Time Director

Address :

9-1-75/1/3, old Bowenpally, Hasmathpet, Hyderabad – 500011, Andhra Pradesh, India

Date of Birth/Age :

14.07.1965

Date of Appointment :

11.12.2006

DIN No.:

01851856

Other Directorship:

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U24110AP2006PTC051498	INCHEM LABORATORIES PRIVATE LIMITED	Whole-time director	4/17/2009	12/11/2006	-	Active	NO

Name :

Mr. K. Srinivas Reddy

Designation :

Managing Director

Address :

A-121, Journalist Colony, Jubilee Hills, Hyderabad – 500045, Andhra Pradesh, India

Date of Birth/Age :

11.09.1969

Date of Appointment :

01.04.2008

DIN No.:

00058360

Name :

Mr. Amit Arvind Sheth

Designation :

Director

Address :

701, Vastu Shilp, Gamadia Colony Road, Tardeo, Mumbai – 400007, Maharashtra, India

Date of Birth/Age :

12.01.1976

Date of Appointment :

11.06.2010

DIN No.:

00054012

Other Directorship:

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U24260MH2003PTC140389	ORBIT LIFESCIENCE PRIVATE LIMITED	Director	5/9/2003	5/9/2003	-	Active	NO
2	U24110AP2006PTC051498	INCHEM LABORATORIES PRIVATE LIMITED	Director	8/23/2010	6/11/2010	8/1/2011	Active	NO

Name :

Mr. Ashish Arvind Sheth

Designation :

Director

Address :

701, Vastu Shilp, Gamadia Colony Road, Tardeo, Mumbai – 400007, Maharashtra, India

Date of Birth/Age :

19.06.1981

Date of Appointment :

11.06.2010

DIN No.:

00053919

Other Directorship:

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U24260MH2003PTC140389	ORBIT LIFESCIENCE PRIVATE LIMITED	Director	5/9/2003	5/9/2003	-	Active	NO
2	U24110AP2006PTC051498	INCHEM LABORATORIES PRIVATE LIMITED	Director	8/23/2010	6/11/2010	-	Active	NO

Name :

Mr. Arvind Bhupatrai Sheth

Designation :

Director

Address :

701, Vastu Shilp, Gamadia Colony Road, Tardeo, Mumbai – 400007, Maharashtra, India

Date of Birth/Age :

09.05.1950

Date of Appointment :

11.06.2010

DIN No.:

00053848

Other Directorship:

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U24260MH2003PTC140389	ORBIT LIFESCIENCE PRIVATE LIMITED	Director	5/9/2003	5/9/2003	-	Active	NO
2	U24110AP2006PTC051498	INCHEM LABORATORIES PRIVATE LIMITED	Director	8/23/2010	6/11/2010	8/1/2011	Active	NO

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.09.2011

Names of Shareholders	No. of Shares
Podduturi Rajshekar Reddy	34650
A Suresh	13850
Vinodbabu Madhavaram	2500
K. Srinivas Reddy	6000
Amit Arvind Sheth	8000
Ashish Arvind Sheth	8000
Arvind Bhupatrai Sheth	27000
Total	100000

Equity Share Break up (Percentage of Total Equity)

As on 30.09.2011

Category	Percentage
Bodies corporate	27.00
Directors or relatives of Directors	73.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of active pharmaceutical ingredients and pharmaceutical intermediates.

PRODUCTION STATUS (As on 31.03.2011)

Particulars	2010-11
Installed Capacity	100 TPA

Description	Actual Production
2-[[[3-(3-Methy 1-4-(2,2,-2- Tripropo Ethyl-2- Pyridiny1] Sulfony1-1H-Benzimidazole	2922
Ambroxol HCL	6230
Divalproex Sodium	12728
Sodium Valproate	10431
Valproic Acid	938
Sodium Bromide Water	142560
Zine Carnosine	837
Etadolac	6037
1-Cyclopropy1-6-Fluoro-8-Methoxy-7-(3-Methylaminopiperadin-1-y1)-4-Oxoquinoline-3-Carboxyline Acid	415
Others	38864
Total	195002

GENERAL INFORMATION

Bankers :

Canara Bank, 3-06-65, Basheerbagh, Beside Skyline Theatre, Hyderabad – 500029, Andhra Pradesh, India

(Rs. In Millions)

Facilities :

Secured Loan	As on 31.03.2011	As on 31.03.2010
1 Term Loan: From Bank	6.406	8.078
2 Working Capital Loan	20.555	22.884
3 Packing Credit	0.658	0.000
Total	27.619	30.962
Secured Loan	As on 31.03.2011	As on 31.03.2010
From Directors	1.500	14.798
Inter Corporate Deposits	3.500	0.000
Total	5.000	14.798

Banking Relations :	--
Auditors :
Name :	K.Nagaraju and Associates Chartered Accountant
Address :	H.No. 1-8-197, Chikkadpally, Hyderabad - 500020 Andhra Pradesh, India
Tel No.:	91-040-27667878
PAN.:	ABHPK1930B

CAPITAL STRUCTURE

As on As on 30.09.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
100,000	Equity Shares	Rs.10/- each	Rs. 1.000 Million

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
100,000	Equity Shares	Rs.10/- each	Rs.1.000 Million

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2011	31.03.2010	31.03.2009
SHAREHOLDERS FUNDS
1] Share Capital		1.000	0.100	0.100
2] Share Application Money		32.270	2.782	17.480
3] Reserves & Surplus		0.000	0.000	0.000
4] (Accumulated Losses)		(0.933)	(1.310)	(1.441)
NETWORTH		32.337	1.572	16.139
LOAN FUNDS
1] Secured Loans		27.619	30.962	22.193
2] Unsecured Loans		5.000	14.798	0.000
TOTAL BORROWING		32.619	45.760	22.193
DEFERRED TAX LIABILITIES		1.192	0.733	0.305
TOTAL		66.148	48.065	38.637
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		25.999	21.147	16.627
Capital work-in-progress		3.819	0.340	2.154
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		1.250	1.221	0.920
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	53.372	31.403	15.488
	Sundry Debtors	16.981	10.838	3.985
	Cash & Bank Balances	1.876	1.123	1.400
	Loans & Advances	10.329	7.595	5.801
Total Current Assets		82.558	50.959	26.674
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors		0.886	4.514
	Other Current Liabilities	45.926	23.754	3.045
	Provisions	1.552	0.966	0.189
Total Current Liabilities		47.478	25.606	7.748
Net Current Assets		35.080	25.353	18.926
MISCELLANEOUS EXPENSES		0.000	0.004	0.010
TOTAL		66.148	48.065	38.637

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Income		60.238	8.136
		Other Income		0.211	0.006
		TOTAL (A)	101.309	60.449	8.142
Less	EXPENSES
		Raw Material Consumed		49.369	11.877
		Salaries, Wages and Benefitsto Employees		7.907	3.263
		Other Manufacturing Overheads		5.571	2.009
		Administrative and Selling Expenses		3.191	1.623
		Increase / (Decrease) In Stock		(11.364)	(12.197)
		TOTAL (B)		54.674	6.575
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		NA	5.775	1.567
Less	FINANCIAL EXPENSES (D)			3.775	0.891
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)			2.000	0.676
Less/ Add	DEPRECIATION/ AMORTISATION (F)			1.728	0.411
	PROFIT / (LOSS) BEFORE TAX (E-F) (G)			0.272	0.265
Less	TAX (I)			(0.141)	0.621
	PROFIT / (LOSS) AFTER TAX (G-I) (J)		0.392	0.131	0.886
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		(1.310)	(1.441)	(2.327)
	BALANCE CARRIED TO THE B/S		(0.918)	(1.310)	(1.441)
	EARNINGS IN FOREIGN CURRENCY
		Expots on FOB	2.150	9.628	1.688
	TOTAL EARNINGS		2.150	9.628	1.688
	IMPORTS
		Traveling Expenses	0.364	0.207	0.190
	TOTAL IMPORTS		0.364	0.207	0.190
	Earnings Per Share (Rs.)		3.92	NA	NA

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	NA	0.00	0.10
Net Profit Margin (PBT/Sales)	(%)	NA	0.00	0.03
Return on Total Assets (PBT/Total Assets}	(%)	NA	0.00	0.00
Return on Investment (ROI) (PBT/Networth)	(%)	NA	0.17	0.01
Debt Equity Ratio (Total Liability/Networth)	(%)	1.46	16.28	0.48
Current Ratio (Current Asset/Current Liability)	(%)	1.73	1.99	3.44

LOCAL AGENCY FURTHER INFORMATION

Registered office of the company has been shifted from H. No. 8-3-222/ B / 7 / 60 / A, D-18, Madhura Nagar, Sanjeev Reddy Nagar (Post), Hyderabad - 500038 Andhra Pradesh, India to the present address w.e.f 01.11.2011

Review of Operations:

The company has achieved a total income of Rs. 101.309 Million during the year as against Rs. 60.239 Million during the last year. During the year, The company has earned Net Profit of Rs.0.392 Million as against Net Profit of Rs. 0.131 Million during the last year.

Future Plans:

1) The Company could complete the first phase of expansion by way of increasing the production capacities and also utilities like Boiler, Power and Chilling plant. With this expansion we foresee increase in turnover.

2) Further to the present molecule range, They have already taken up new molecule at our New R & D centre started here at Hyderabad with pool of Scientists working on new products and are in the process of stabilizing the same. Once these molecules (API's) are taken up at plant scale there will be a steady growth in revenue and also profit margin will increase.

3) Since the Chemical & Drug market is growing at more than 10 %, they foresee a bright future to the Company.

4) On completion of the expansion we could achieve a threefold jump in turnover. The company has been awarded IS0 9001: 2008 certificate and also they are gearing our self to meet the WHO cGMP (Geneva) guidelines.

This financial year they are planning to add 3 more molecules to the current portfolio and are expecting the turnover to cross 250.000Million.

The company already approved by Indian MNC's like MIS. Ranbaxy Laboratories Limited, Mis. Cipla Limited and MIS. Aurobindo Pharma Limited to name a few and are also gearing up to get approvals from other MNC's also.

Fixed Assets

· Land

· Building

· Plant and Machinery

· Data Processing Equipment

· Office Equipment

· Furniture and Fixtures

· Lab Equipment

· Factory Equipment

· Vehicle

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.51.04
UK Pound	1	Rs.67.39
Euro	1	Rs.81.08

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	3
PAID-UP CAPITAL	1~10	3
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	3
--LIQUIDITY	1~10	4
--LEVERAGE	1~10	3
--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	YES
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		28

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.