MIRA INFORM REPORT

Report Date :

29.03.2013

IDENTIFICATION DETAILS

Name :	EVEREST ORGANICS LIMITED
Registered Office :	Aroor Village, Sadasivapet Mandal, Medak – 502291, Andhra Pradesh
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	19.02.1993
Com. Reg. No.:	01-15426
Capital Investment / Paid-up Capital :	Rs.92.730 Millions
CIN No.: [Company Identification No.]	L24230AP1993PLC015426
TAN No.: [Tax Deduction & Collection Account No.]	HYDE00817F
PAN No.: [Permanent Account No.]	AAACE4400F
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchange.
Line of Business :	Manufacturer and Exporters of Active Pharmaceutical Ingredients and its Intermediates.
No. of Employees :	100 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

B (26)

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

Maximum Credit Limit :	USD 180000
Status :	Moderate
Payment Behaviors :	Slow
Litigation :	Clear
Comments :	Subject is an established company having moderate track. There appears huge 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/ Factory :	Aroor Village, Sadasivapet Mandal, Medak – 502291, Andhra Pradesh, India
Tel. No.:	91-8455-250113/ 250114/ 250115
Fax No.:	91-8455-250114
E-Mail :	drsksraju@yahoo.co.in srihari_everest@rediffmail.com
Website :	http://www.everestorganicsltd.com
Corporate/ Administrative Office :	8-3-214/50, 4^th Floor, Srinivasa Nagar Colony West, Hyderabad – 500090, Andhra Pradesh, India.
Tel. No.:	91-40-23737137 / 138/ 66510306 /23737139
Fax No.:	91-40-66820511
Corporate Office :	H No. 8-3-222 / 23A, MCH-138, Near Allahabad Bank, Yousufguda Road, Madhura Nagar, Hyderabad – 500038, Andhra Pradesh, India.
Tel. No.:	91-40-23737137/ 138
Fax No.:	91-40-23741007/ 55820511
E-Mail :	everest@hd1.vsnl.net.in gadambur@yahoo.com babladi@hotmail.com srihari_everest@rediffmail.com
Website :	http://everest1.hypermart.net/ http://www.everestorganics.com

DIRECTORS

(AS ON 31.03.2010)

Name :	Dr. S. K. Srihari Raju
Designation :	Managing Director
Name :	Mr. G. Raghunandhan
Designation :	Nominee Director of APIDC
Name :	Mr. V. Swaminathan
Designation :	Director
Name :	Mr. K. Rama Krishnam Raju
Designation :	Director
Name :	Dr. K. Easwer Reddy
Designation :	Director
Name :	Mr. Raju S. Kakarlapudi
Designation :	Director
Name :	Mr. A. Parvatisem
Designation :	Director (Technical)
Name :	Mr. M. Bangara Raju
Designation :	Director – HR
Name :	Mr. S. K. Hari Krishna
Designation :	Executive Director

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(AS ON 30.06.2011)

Names of Shareholders	No. of Shares	Percentage
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	3,105,800	33.49
Sub Total	3,105,800	33.49
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	3,105,800	33.49
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	1,600	0.02
Financial Institutions / Banks	11,150	0.12
Sub Total	12,750	0.14
(2) Non-Institutions
Bodies Corporate	405,284	4.37
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 Million	3,189,366	34.39
Individual shareholders holding nominal share capital in excess of Rs.0.100 Million	1,446,200	15.60
Any Others (Specify)	1,113,600	12.01
Non Resident Indians	1,077,400	11.62
Trusts	36,200	0.39
Sub Total	6,154,450	66.37
Total Public shareholding (B)	6,167,200	66.51
Total (A)+(B)	9,273,000	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued
(1) Promoter and Promoter Group	--	--
(2) Public	--	--
Sub Total	--	--
Total (A)+(B)+(C)	9,273,000	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer and Exporters of Active Pharmaceutical Ingredients and its Intermediates.

Products :

· 2 - Mercapto - 5 - Methoxy Benzimidazole (Intermediate of Sl. No.3)

· Chloro Compound (Intermediate of Sl. No.3)

· Omeprazole Powder

· Omeprazole Sulphide (Intermediate of Sl. No.3)

· Omeprazole Sodium

· Omeprazole Magnesium

· Ciprofloxacin HCL

· Q-Acid (Intermediate of Sl. No.7)

· Pantoprazole Sodium

· Lansaprazole

· Esomeprazole Magnesium

· Clorsulon

· Carbosteryle

· Aripiprazole

Item Code No. (ITC Code)	29419003
Product Description	Ciprofloxacin
Item Code No. (ITC Code)	29420029
Product Description	Omeprazole
Item Code No. (ITC Code)	294420090
Product Description	Benzimedazole

PRODUCTION STATUS (AS ON 31.03.2010)

Name of the Product	Installed Capacity TPA	Operating Capacity TPA	% of Capacity Achieved
Ciprofloxacin Enrofloxacin	150	84.45	56.30
Omeprazole Op.Sulphide Op.Magnesium	110	102.68	93.35
Benzimidazole	120	86.69	72.24
Esomeprazole	25	9.26	37.08
Pantaprazole	25	7.91	31.64

Products	Production (Qty/ Kgs.)
Omeprazole Powder	99785
Benzimidazole	97563
Chloro Compound	105542
Op.Sulphide	118729
Op.Magnesium	2609
Omeprazole Pellets	14798
Omeprazole Sodium	1637
Esomeprazole Magnesium	9269
Pantaprazole	7910
Ammonium sulphate	251455
Tetralone 9843	98438
Q-ACID	85379
Others	1238

GENERAL INFORMATION

No. of Employees :

100 (Approximately)

Bankers :

· State Bank of Hyderabad

· Kotak Mahindra Bank

· Citi Bank

Facilities :

Secured Loans	31.03.2010	31.03.2009
	(Rs. in Millions)
Term Loans from Kotak Mahindra Bank Limited – I (Previous year is with Phoenix ARC limited)	18.009	34.215
Term Loan from Kotak Mahindra Bank Limited – II	13.836	19.177
Overdraft from Kotak Mahindra Bank Limited	7.711	5.706
Sales Tax Department Liability Amount	30.265	29.351
Total	69.821	88.449
Unsecured Loans	31.03.2010	31.03.2009
	(Rs. in Millions)
From the Promoters and Associates
Brought Under Obligation to the Financial Institution/ Banks)	39.520	31.399
Total	39.520	31.399

Banking Relations :	--
Auditors :
Name :	P.S.N. Ravi Shanker and Associates Chartered Accountants
Address :	Hyderabad, Andhra Pradesh, India

CAPITAL STRUCTURE

(AS ON 31.03.2010)

Authorised Capital :

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

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
9273000	Equity Share	Rs.10/- each	Rs.92.730 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		92.730	92.730	92.730
2] Share Application Money		38.881	38.881	38.881
3] Reserves & Surplus		0.000	1.000	1.000
4] (Accumulated Losses)		(87.501)	(99.061)	(109.988)
NETWORTH		44.110	33.550	22.623
LOAN FUNDS
1] Secured Loans		69.821	88.449	76.401
2] Unsecured Loans		39.520	31.399	24.722
TOTAL BORROWING		109.341	119.848	101.123
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		153.451	153.398	123.746
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		141.934	129.868	128.873
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		0.845	0.845	0.845
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	54.397	30.136	19.595
	Sundry Debtors	120.163	69.926	43.958
	Cash & Bank Balances	12.635	11.009	0.328
	Other Current Assets	0.807	0.336	0.655
	Loans & Advances	18.862	7.696	10.895
Total Current Assets		206.864	119.103	75.431
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditor	182.880	89.423	72.302
	Other Current Liabilities	7.744	3.739	6.778
	Provisions	5.568	3.256	2.323
Total Current Liabilities		196.192	96.418	81.403
Net Current Assets		10.672	22.685	(5.972)
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		153.451	153.398	123.746

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income (Net Turnover)	392.254	244.496	194.726
		Conversion Income	14.582	12.495	9.345
		Other Income	5.981	2.909	0.855
		TOTAL (A)	412.817	259.900	204.926
Less	EXPENSES
		Increase/ (Decrease) in Stock	(11.494)	(2.588)	(4.554)
		Raw Material Consumed	295.518	153.095	121.400
		Manufacturing Expenses	51.834	45.352	38.069
		Salaries, Wages and Other Benefits	21.651	17.722	13.980
		Administrative Expenses	5.941	6.152	5.509
		Selling and Distribution Expenses	7.165	5.639	4.615
		Directors Remunerations	1.275	1.275	1.200
		Prior Period Adjustments	0.000	0.105	0.100
		TOTAL (B)	371.889	226.752	180.319
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		40.927	33.148	24.607
Less	FINANCIAL EXPENSES (D)		13.646	7.157	1.285
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		27.281	25.991	23.322
Less/ Add	DEPRECIATION/ AMORTISATION (F)		13.721	13.267	12.313
	PROFIT BEFORE TAX (E-F) (G)		13.560	12.724	11.009
Less	TAX (H)		2.000	1.850	16.000
	PROFIT AFTER TAX (G-H) (I)		11.560	10.874	9.409
Add:	PROVIDED FOR PREVIOUS YEAR		0.000	0.052	0.000
Less	PROVISION FOR FBT FOR PRIOR YEAR		0.000	0.000	0.200
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		(99.062)	(109.988)	(119.197)
	BALANCE CARRIED TO THE B/S		(87.502)	(99.062)	(109.988)
	EXPORT VALUE		40.900	47.200	58.500
	Earnings Per Share (Rs.)		1.25	1.04	0.99

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	2.80	4.18	4.59
Net Profit Margin (PBT/Sales)	(%)	3.46	5.20	5.65
Return on Total Assets (PBT/Total Assets}	(%)	3.89	5.11	5.39
Return on Investment (ROI) (PBT/Networth)		0.31	0.38	0.49
Debt Equity Ratio (Total Liability/Networth)		6.93	6.45	8.07
Current Ratio (Current Asset/Current Liability)		1.05	1.24	0.93

LOCAL AGENCY FURTHER INFORMATION

REVIEW OF OPERATIONS FOR THE FINANCIAL YEAR 2009-10

During the financial year 2009-2010, the operations have improved substantially by about 38%. The Turnover including conversion has increased from Rs.262.500 Millions to Rs.424.300 Millions. This improvement in the business has become possible with the increase in demand for existing products of the Company coupled with more effective use of the existing machinery, manpower and financial resources.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

GENERAL PHARMA INDUSTRIAL SCENARIO:

The Pharma Industry in India is growing at a rate of 15% year on year basis. The global events in the western world have given impetus to further growth to the Pharma Industry in India, both on the domestic front and export front. In the next 5 years, the Global Pharma giants will look more and more towards India for their requirements of API and its advanced intermediates.

OUTLOOK FOR FINANICAL YEAR 2010-11:

The company has been making constant steady, but slow progress in terms of turnover, margins and addition of new products.

In this FY 2010 - 2011, the Management is confident of achieving a turnover of about Rs.600.000 Millions to 700.000 Millions with higher margins. The capital expenditure is envisaged to the extent of Rs.40.000 Millions to 50.000 Millions in terms of expanding the volume of existing products and adding newer products to augment the bottom line. In this regard the company has approached the Kotak Mahindra Bank Limited for term loan of Rs.30.000 Millions for which the Kotak Bank has sanctioned Rs.25.000 Millions, which would be dispersed in second quarter of FR 2010-2011.

The capital expenditure would involve solvent recovery system, expanding the volume of Omeprazole production to 20 MT per month and also expanding the capacity of Pantoprazole. The management also proposes to augment the utilities and services as well as further capital investment on effluent treatment along with augmentation of quality control equipment.

In nutshell the management is confident of showing a minimum growth of 25 – 30% year on year basis from the FY 2010- 2011.

FIXED ASSETS

· Land and Site Development

· Building

· Plant and Machinery and Utilities

· Office Equipment

· Computers

· Furniture and Fittings

· Vehicles

WEBITES DETAILS:

PROFILE:

The company was incorporated on 19.02.1993 to carry on the business of manufacturing of bulk drugs viz. Omeprazole, Ciprofloxacin, Dichloroflurobenzene, Benzimadizole, etc., having its factory at Sadasivpet Medak District Hyderabad. The construction activities have started in the year 1994 and the commercial production of the company has started in 1996. During the Year 1995 the company went into public issue and the shares of the company have been Over-subscribed by 39.632 times. With full swing the company started its production and got a good market share for their products.

The Company is headed by Dr. S.K. Srihari Raju who is a NRI and also a Doctor by profession. He brings in his rich and varied experience of more than 25 years in the field of Medical Science to develop Products and enhance marketability by focusing on Therapeutic areas which are of strategic importance and growth.

The Company's Factory has a total area of 32 acres with 23 acres of green belt and 9 acres covered under buildings and roads. A massive plantation has been done in and around the process plants. There are totally 2000 plants and 2036 trees in the Company factory premises. These trees and plants include different varieties like Subabul, Neem, Gulmohar etc. Beautiful lawns between the buildings give a pleasant view for the unit that relieves the stress of the workers.

Utilities

The Industry has a very good service facility for steam, cooling and power. It has a 6 tonne and a 2.3 tonne boiler for steam, 260 TR of cooling and generator of 895 KV Capacity.

Safety Systems

Safety in this industry is a major issue and hence all the equipment is specially designed with Rupture disks and solenoid valves are kept for the reactors undergoing exothermic and pressure reactions. Pressure and vacuum gauges are calibrated periodically. Ample space is provided between the reactors. Centrifuges are provided with limit switches. Pressure tests are done for the Reactors periodically. Reactor and jacket thickness tests are conducted regularly. All the equipments are earthed to avoid static electricity. The industry is also equipped with a good fire Hydrant System and fire extinguishers for each and every critical as well as production areas.

SERVICES:

They are one of the Major Manufacturers and Exporters of Active Pharmaceutical Ingredients and its intermediates in India. They are an ISO 9002 certified company. Their facilities comply to GMP standards and is certified by the Drug Control Authority of the Government of Andhra Pradesh, India. Their Products have been well accepted in the Global Market. They supply their products to major multinational companies abroad, prominent well established formulation companies in India, Europe, USA, Far East and the Middle East, and also to Latin / Central / South American Countries. They also provide adequate technical and documentary support for their products. Their products comply to various pharmacopial standards like BP, USP, EP and IP Standards as desired by the customer. They also have their own in house specifications. If required, they can provide Drug Master Files (DMF) and Common Technical Documents (CTD) for their products. They have also achieved a high degree of purity standards consistently for all their products and their documentation support is extensive as they have been dealing with these products since 1996.

Their standard Packing is in 25kg HDPE Drums, Validity of their offer is normally one week from the date of mailing. Payment terms are Negotiable and normal delivery terms are three to four weeks from the date of receipt of confirmed order.

The activities of the Company are executed by a team of professionals with expertise in the areas of production, planning, inventory and quality control. This team of professionals brings in there experience and expertise developed in the pharmaceutical industry. This helps in achieving world class products at very competitive prices and excellent proven quality, which is of utmost importance in a critical industry like healthcare.

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 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.54.39
UK Pound	1	Rs.82.32
Euro	1	Rs.69.54

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	3
OPERATING SCALE	1~10	4
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	3
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	--
--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	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		26

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.