MIRA INFORM REPORT

Report Date :

7^th June 2006

IDENTIFICATION DETAILS

Name :	MEDICAMEN BIOTECH LIMITED
Registered Office :	10, Community Centre No. 2, Ashok Vihar, Phase II, Delhi - 110 052, India.
Country :	India
Financials (as on) :	31.03.2005
Date of Incorporation :	22.12.1993
Com. Reg. No.:	55-56594
CIN No.: [Company Identification No.]	L74899DL1993PLC056594
TAN No.: [Tax Deduction & Collection Account No.]	DELM08516E
PAN No.: [Permanent Account No.]	AAACM1217A
Legal Form :	A public limited liability company. The company's shares are listed on the Stock Exchanges.
Line of Business :	Manufacturing and Marketing of various drugs such as tablets, capsules and liquid orals in the domestic and exports markets.

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 :
Status :	Moderate
Payment Behaviour :	Slow and delayed
Litigation :	Unknown
Comments :	Financial position of the company can be regarded as moderate. Payments are reported as slow and delayed. The company can be considered for small to mediocre business dealings at usual trade terms and conditions with some caution.

LOCATIONS

Registered Office :	10, Community Centre No. 2, Ashok Vihar, Phase II, Delhi - 110 052, India.
Tel. No.:	91-11-7240578 / 0610 / 7463506 / 7415471
Fax No.:	91-11-7138171 / 7240966
E-Mail :	biotech@satyam.net.in info@medicamen.com
Website :	http://www.medicamen.com
Factory 1 :	SPL - 1192 (A & B), Phase IV, RIICO Industrial Area, Bhiwadi, Rajasthan.

DIRECTORS

Name :	Mr. B. K. Gupta
Designation :	Managing Director
Name :	Mr. Sanjay Bansal
Designation :	Director
Name :	Mr. Ashok Nayyar
Designation :	Chairman
Name :	Mr. Ashutosh Gupta
Designation :	Director
Name :	Mr. M. P. Bansal
Designation :	Director
Name :	Mr. Rajinder Kumar Gupta
Designation :	Director
Name :	Mr. K. L. Garg
Designation :	Director - Nominee (IDBI)
Name :	Mr. B. Pradhan
Designation :	Company Secretary

MAJOR SHAREHOLDERS

As on 31.03.2004

Names of Shareholders	No. of Shares	Percentage of Holding
Directors and their Relatives	2,741,460	35.51%
Body Corporate	1,699,120	22.00%
Non Resident Indians	359,686	4.66%
Others	2,921,355	37.83%
TOTAL	7,721,621	100.00%

BUSINESS DETAILS

Line of Business :	Manufacturing and Marketing of various drugs such as tablets, capsules and liquid orals in the domestic and exports markets.
Products :	Ø Tablets Ø Capsules
Exports to :	Germany, Russia, Holland, CIS (Confederation of Independent States)

GENERAL INFORMATION

No. of Employees :	180
Bankers :	Union Bank of India, Industrial Finance branch, Connaught Circus, New Delhi.

Banking Relations :	Satisfactory
Auditors :	Ashok Sharma & Associates Chartered Accountants 311, Deep Shikha, 8, Rajindra Palce, New Delhi - 110008
Associates/Subsidiaries :	Nil

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
8,000,000	Equity Shares	Rs.10/- each	Rs. 80.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
7,720,000	Equity Shares	Rs. 10/- each	Rs. 77.200 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2005	31.03.2004	31.03.2003
SHAREHOLDERS FUNDS
1] Share Capital		77.200	77.200	77.200
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		(6.500)	(20.600)	(25.200)
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		70.700	56.600	52.000
LOAN FUNDS
1] Secured Loans		50.400	54.100	103.900
2] Unsecured Loans		39.000	46.700	2.500
TOTAL BORROWING		89.400	100.800	106.400
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		160.100	157.400	158.400
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		93.800	86.500	84.900
Capital work-in-progress		1.200	1.400	1.000
INVESTMENT		0.000	0.000	0.600
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	38.200	56.200	49.700
	Sundry Debtors	118.800	72.200	68.800
	Cash & Bank Balances	11.800	10.900	23.200
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	25.600	43.900	42.200
Total Current Assets		194.400	183.200	183.900
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	126.100	113.300	112.500
	Provisions	3.200	0.900	0.500
Total Current Liabilities		129.300	114.200	113.000
Net Current Assets		65.100	69.000	70.900
MISCELLANEOUS EXPENSES		0.000	0.500	1.000
TOTAL		160.100	157.400	158.400

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2005	31.03.2004	31.03.2003
Sales Turnover [including other income]	479.900	490.200	416.500
Profit/(Loss) Before Tax	16.400	5.700	2.900
Provision for Taxation	2.300	1.100	1.000
Profit/(Loss) After Tax	14.100	4.600	1.900
Total Expenditure	448.700	471.400	401.700

QUARTERLY RESULTS

PARTICULARS	30.06.2005	30.09.2005	31.12.2005
Type	1st Qtr	2nd Qtr	3rd Qtr
Sales Turnover	91.600	115.200	126.800
Other Income	0.200	-0.100	0.500
Total Income	91.800	115.100	127.300
Total Expenditure	83.900	107.300	120.600
Operating Profit	7.900	7.800	6.700
Interest	1.900	2.000	1.500
Gross Profit	6.000	5.800	5.200
Depreciation	1.400	1.500	1.600
Tax	0.600	0.300	0.300
Reported PAT	3.900	3.900	3.100

200506 Quarter 1 –

Expenditure Includes (Increase) / Decrease in Stock in Trade Rs (0.133) million Consumption of Raw Materials Rs 61.180 million Staff Cost Rs 7.434 million Other Expenditure Rs 15.397 million Tax Includes Provision for Current Tax Rs 0.635 million Deferred Tax Rs 0.073 million EPS is Basic and Diluted Status of Investor Complaints for the quarter ended June 30, 2005 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter Nil Complaints disposed off during the quarter Nil Complaints unresolved at the end of the quarter Nil 1. The above results after being reviewed by the Audit Committee were taken on record by the Board at its meeting held on July 29, 2005. 2. The figures are regrouped in previous year also, wherever considered necessary.

200509 Quarter 2 –

EPS is Basic and Diluted Status of Investor Complaints for the quarter ended September 30, 2005 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter Nil Complaints disposed off during the quarter Nil Complaints unresolved at the end of the quarter Nil 1. The above results after being reviewed by the Audit Committee were taken on record by the Board at its Meeting held on October 27, 2005. 2. The figures are regrouped in previous year also, wherever considered necessary. 3. The Auditors of the Company have carried out the Limited Review of the above unaudited financial results.

200512 Quarter 3 –

1. The above results after being reviewed by the Audit Committee were taken on record by the Board at its Meeting held on 25th January, 2006. 2. During the quarter the company has wiped out all the carried forward losses. 3. The figures are regrouped in previous year also, wherever considered necessary 4. The Auditors of the Company have carried out the limited review of the above-unaudited financial results in the term of clause 41 of the Listing Agreement 5. There is no investor grievance pending at the beginning of the of the Quarter. During the quarter 2 (two) investor complaints were received and disposed off. No complaint is pending to be resolved at the end of the quarter 6. Adjustment on account of deferred taxation under Accounting Standard - 22 and provision for gratuity, if any, will be considered at the year end

KEY RATIOS

PARTICULARS	31.03.2005	31.03.2004	31.03.2003
Debt Equity Ratio	1.49	1.91	2.77
Long Term Debt Equity Ratio	0.81	0.54	0.12
Current Ratio	1.14	0.98	0.84
TURNOVER RATIOS
Fixed Assets	4.07	4.48	4.12
Inventory	10.19	9.21	7.51
Debtors	5.04	6.92	5.24
Interest Cover Ratio	2.84	1.76	1.38
Operating Profit Margin (%)	6.49	4.00	3.50
Profit Before Interest and Tax Margin (%)	5.26	3.03	2.49
Cash Profit Margin (%)	4.16	2.03	1.47
Adjusted Net Profit Margin (%)	2.93	1.07	0.45
Return on Capital Employed (%)	14.45	8.09	5.37
Return on Net Worth (%)	17.58	6.48	2.58

STOCK PRICES

Face Value	Rs. 10.00/-
High	Rs. 13.00/-
Low	Rs. 13.00/-

LOCAL AGENCY FURTHER INFORMATION

The Certificate of Commencement of business was obtained on January 31, 1994.

Subject was jointly promoted by Mr. V. Kumar, Mr. Bal Kishan Gupta, Mr. Lakhvinder Singh Arora and Mr. Ranjit Singh.

The company procures drugs from various reputed manufacturers viz. Hoechst, Cadila, Hindustan Ciba, Purepharma, Oboi Labs, etc. and exports to countries like Germany, Russia, Holland, CIS (Confederation of Independent States), etc. part from domestic ethical and institutional sales.

The company has obtained permission for production of tablets, capsules and liquid orals under Loan Licence basis from Delhi Drug Control Authority and Madhya Pradesh Drug Control Authority on Welbeck Pharmaceutical Private Limited, New Delhi and Pure Pharma Private Limited, Indore, Madhya Pradesh, respectively.

The company has also got registration in Sri Lanka and Nepal.

FINANCIAL RESULTS (Rs. In Millions) 2004-2005 2003-2004 

 Turnover 481.084 487.806 Other Income 201.1 124.5 Expenditure 453.040 467.881Other Expenditure (loss on Exchange Variation 67.5 412.6 and sale of assets) Profit before Interest, Depreciation &Preliminary Expenditure written off 2938.0 1704.4Interest 655.3 611.0 Depreciation 588.0 469.4 Preliminary Expenditure &Deferred revenue Expenditure Written Off 49.4 51.8 Profit/(Loss) before Tax 1645.3 572.2 Less: Provision for Deferred Tax 105.7 110.2 Provision for Taxation 126.8 -Profit/(Loss) avail for Appr. 1412.8 461.9 Profit/(Loss) brought forward From the previous year (2362.1) (2824.0)Loss carried over to Balance Sheet (949.4) (2362.1) 

 PERFORMANCE 

 The financial year under report was a challenging year for the Pharma industry as a whole because of lot of changes in Govt. policies especially on excise and VAT. Domestic business of all the companies was greatly affected due to these factors. The company was not an exception to it. As a consequence the company could report around 1% lower growth in turnover compared to the previous year. The domestic sale was down by around 28%. In the export front there is around 10% increase in export turnover. However due to the internal control & cost cutting measures taken by the company the growth in net profit is remarkable in the history of the company. There is 205% increase in net profit as compared to the previous year. 

 COST OF FINANCE 

 During the current year the company had taken stringent financial control which resulted in reduced cost of finance and better liquidity. The company had repaid around Rs.687.5 Millions as installments against the External Commercial Borrowing from M/s. Missionpharma A/S Denmark out of internal accruals. 

 STATUS OF THE PROJECT 

 The sole formulation plant located at the industrial area of Bhiwadi, Rajasthan is working smoothly and at mature stage. Keeping in view the policy of the Govt of India the company is planning to establish a plant in a tax free zone to cater the competitive domestic market. The company has taken steps to establish a new plant in tax free zone and it is in advance stage of implementation. Initially it will be on a small scale and the estimated project cost is around 50 Millions. 

 CORPORATE GOVERNANCE 

 A detailed Corporate Governance Report is included in this annual report as per Clause 49 of Listing Agreement. The Company has obtained a certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance. The same is annexed to this Report. 

 DIRECTORS 

 Mr. Ashutosh Gupta, director of the company is liable to retire by rotation at the ensuing Annual General Meeting and is eligible for re-appointment. The board recommends for his reappointment. 

 Dr. M.L. Parnami was appointed as additional Director of the company on 29th January 2005 his term of office expires on the Annual General Meeting a resolution to appoint him as director of the company was placed in the notice upon requisition for the approval of the shareholders. 

 Mr. Rajinder Kumar Gupta was, appointed in casual vacancy after the resignation of Mr. S.L. Sobti on 21st may 2005 his terms of office expires on the ensuing Annual General Meeting a resolution to appoint him as a director is placed in the notice upon requisition the approval of the shareholders. 

 Mr. Rajinder Pal Tohan was appointed as additional Director of the company on 29th July 2005 his term of office expires on the Annual General Meeting a resolution to appoint him as director of the company was placed in the notice upon requisition for the approval of the shareholders. 

Industry Structure & Development  

 The Indian Pharmaceutical market, estimated at $ 5 billion, accounts for around 1.7% of the world market and is growing annually at 8 to 9 per cent. It accounts for around 8% of the world's pharmaceutical production The pharmaceutical industry in India is now quite matured to face the global competition. India is the leading developing country in terms of manufacturing technology, quality and range of formulations from simple pills to sophisticated antibiotics and complex cardiac compounds. The increasing role of Indian pharma companies in the developed market of Europe and US has proved the capabilities of Indian pharma sector. The increased thrust towards export by top Indian pharma companies has changed the outlook of the pharma industry in India. The domestic market is also very lucrative as per the Drug policy and increasing health and medical consciousness among the vast population. 

 Exports have increased significantly over the last decade. Last year the Indian pharmaceutical industry market is estimated to have exported drugs worth around $ 2.5 billion. 

Discussion on Financial Performance with respect to operational Performance. 

 Current year was a challenging year for the Pharma industry as a whole because of lot of changes in Govt. policies especially on excise and VAT. Domestic business of all the companies was greatly affected due to these factors. The company was not an exception to it, and therefore, year on year growth in turnover of the company could not be sustained during the year but despite the turnover being at below par as compared to the last year, we could reap a good net margin mainly because of the financial and operational steps that we have taken for:- 

 * Cutting cost by better analysis and monitoring the level of activity with the cost incurred. 

 * Enphasising on profitable product mix. 

 * Better Co-ordination and integration of working of various departments. 

 * Better financial planning and management. 

 * There is about 205% increase in profits as compared to last year inspite of the turnover being below par. 

 * Segmentwise or Productwise Performance 

 During the year under review the company has performed well on Antibiotic front particularly the Amoxycillin group of products like Capsules, Tablets and Dry syrups and around 25% of the sale was from this segment only. Other Dry syrups of Non-Beta-lactum nature have also contributed a lot to the revenue of the company and the third segment has been of Vitamins and Calcium products. The job work activities for M/s Torrent Pharma Ltd. is working well and would result in better utilization of capacities and revenue generation. 

Opportunity & threats 

 The company being one of the low cost provider of medicines finds lot of opportunity both in domestic and international front. The joint venture with M/s Missionpharma is going very well. Our Joint Venture partner is committed to provide us more and more business from export market. Further the company is also initiating some lucrative business in Nigeria & CIS with the help of our regular buyers. The company is also in the process of entering the Russian market and in the process of establishing a place of business at Belarus These markets have a lot of potential in the times to come. 

 As far as threats are concerned, there is cut-throat competition even in the international market and since our collaborators are also banking mainly on international tender business, there is always a fear of less business generation. Besides, with the implementation of GATT w.e.f. 1.1.2005, certain patented drugs will be difficult to export which may have a minor effect on our sale. In Indian business too, both the factors will have impact in the near future. 

Outlook 

 The company is planning to enhance the capacity to cater its domestic market. The company is in advance stage to establish a plant in a tax-free zone. The company has entered the ethical market in a very small scale through franchises in almost all the states. Although it is in small scale initially but it has a lot of potential to grow. 

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. 45.92
UK Pound	1	Rs. 84.62
Euro	1	Rs. 58.03

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
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	3
--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	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		29

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

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