MIRA INFORM REPORT

Report Date :

19.12.2007

IDENTIFICATION DETAILS

Name :	NEULAND LABORATORIES LIMITED
Registered Office :	204, Second Floor, Meridian Plaza, Ameerpet, Hyderabad - 500 016, Andhra Pradesh
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	07.01.1984
Com. Reg. No.:	01-4393
CIN No.: [Company Identification No.]	L85195AP1984PLC004393
TAN No.: [Tax Deduction & Collection Account No.]	HYDN00013G
Legal Form :	Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges
Line of Business :	Manufacture of Bulk Drug and Intermediates such as Salbutamol Sulphate, Ciprofloxacin Hcl, Ranitidine Hcl, etc.

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 2389760
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established and reputed company having satisfactory track. Directors are reported as experienced, respectable and resourceful industrialists. Their trade relations are reported as fair. General financial position is satisfactory. Payments are usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	204, Second Floor, Meridian Plaza, Ameerpet, Hyderabad - 500 016, Andhra Pradesh
Tel. No.:	91-40-26518682/83/84/23412934/36/37
Fax No.:	91-40-23412957
E-Mail :	1. neuland@hd1.vsnl.net.in 2. neuland@eth.net
Website :	http://www.neulandindia.com
Plant Locations :	Unit 1: Village: Bonthapally Mandal: Jinnaram District: Medak, Andhra Pradesh Unit 2: Plot No. 92-94, 257-259 Industrial Development Area, Village: Pashamylaram, Mandal: Patancheru, District: Medak, Andhra Pradesh
US Office	2500, Regency Parkway, Cary, NC 27511.
Tel No.:	+1 (919) 654 6833
Fax No.:	+1 (919) 654 6834
E-Mail :	johnpinna@neulandabs.com martinfrazier@neulandlabs.com

DIRECTORS

Name :	Dr. D. R. Rao
Designation :	Chairman & Managing Director
Name :	Dr. Bandaru S. Reddy
Designation :	Non Executive Director
Name :	Mr. Humayun Dhanrajgir
Designation :	Non Executive Director
Name :	Mr. N. Balakrishna Iyer
Designation :	Director (Nominee of SBI)
Name :	Mr. S. B. Budhiraja
Designation :	Non Executive Director
Name :	Mr. P. V. Maiya
Designation :	Non Executive Director
Name :	Mr. G. V. K. Rama Rao
Designation :	Non Executive Director
Name :	Mr. C. Srivivasu
Designation :	Director (Nominee of IDBI)
Name :	Mr. S. K. Murthy
Designation :	Alternate Director to Dr. B. S. Reddy
Name :	Mr. D Sucheth Rao
Designation :	Executive Director and Chief Operating Officer
Name :	Mr. C. Ramakrishna
Designation :	Director (Nominee of IDBI )

KEY EXECUTIVES

Name :	Mr. V. N. Rao
Designation :	Unique Chemicals, Mumbai as Director R & D and QA

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 31.03.2007:

Names of Shareholders	No. of Shares	Percentage of Holding
Resident Invividuals	1538039	28.50
NRIs/ FIIs/ OCBs	1360043	25.20
Bodies Corporate	378687	7.02
Promoters/Directors and their relatives	2068586	38.33
Fis/Banks/ MFs/ Others	51000	0.95

As on 31.03.2007:

Category	No. of Shares	Percentage of Holding
Promoters / Directors/Associates	2068586	38.33
Mutual Funds, Banks and FIs	51100	0.95
Bodies Corporate	378687	7.02
NRIs/ FIIs/ OCBs	1360043	25.20
Individual Shareholders -5000 shares and above - Below 5000 shares	463183 1074856	8.58 19.92

BUSINESS DETAILS

Line of Business :

Manufacture of Bulk Drug and Intermediates such as Salbutamol Sulphate, Ciprofloxacin Hcl, Ranitidine Hcl, etc.

Products :

Item Code No. (ITC Code)	Product Description
30049071	Enalapril
29419030	Ciprofloxacin
29420014	Ranitidine

PRODUCTION STATUS

Particulars	Actual Production
Bulk Drugs (Kgs.)	826580
Intermediates (Kgs.)	64646

GENERAL INFORMATION

No. of Employees :

640

Bankers :

• State Bank of India

Overseas Branch, Hyderabad, Andhra Pradesh, India

• Lakshmi Vilas Bank Limited

Kukatpally Branch, Hyderabad, Andhra Pradesh, India

• Bank of India

Kukatpally Branch, Hyderabad, Andhra Pradesh, India

• Indian Overseas Bank

Basheerbagh Branch, Hydrabad, Andhra Pradesh, India

Facilities :

(figures are in millions)
	2007
Secured Loan
Foreign Currency Loans Rupee Loans	410.990 455.500
The above loans are secured by a pari-passu first charge on the immovable properties and pari-passu charge on moveable properties (subject to the prior charge in favour of the Company's Bankers on specified moveable, created/to be created for securing borrowings for working capital requirements) and further guaranteed by the Chairman & Managing Director and one of the Directors in their personal capacities. As per covenant of the foreign currency loan agreement with the export import bank of India, included in (a) above, the bank has an option to convert the loan into a rupee loan in case the company defaults in repayments.
Technology Development Assistance from TIFAC	8.400
The above loan is secured by movable property of the company at Bonthapally manufacturing unit including its movable plant and machinery, machinery spares, tools and accessories and other movables both present and future (save and except book debts) whether installed or not or acquired for the purpose of the project at the cost of or from the moneys advanced by TIFAC under Technology Development Assistance Agreement.
Working Capital Finance from Bank	301.550
Working Capital loans from bank is secured by hypothecation of raw materials, stocks in process, finished goods, book debts, stores & spares and export receivables and is further secured by second charge on all fixed assets and movable machinery of the Company first charge being financial institution and guaranteed by the Chairman & Managing Director and one of the Directors in their personal capacities.
Other Loans Hire Purchase Loan	7.850
The above loan is against the hypothecation vehicles
Total	774.340
Unsecured Loan
Fixed Deposit The ICICI Ltd under its sponsored research and development programme	0.480 5.00
Total	5.480

Banking Relations :	Satisfactory
Auditors :
Name :	K. S. Aiyar and Company Chartered Accountants
Address :	4^th Floor, Janmabhoomi Bhavan, 24-26, Janmabhoomi Marg, Fort, Mumbai – 400 001, Maharashtra, India
Associates/Subsidiaries :	Sucheth and Saharsh Holdings (Private) Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
10000000	Equity Shares	Rs.10/- each	Rs.10.000 millions
3,00,000	Cumulative Redeemable Preference Shares	Rs. 100/-each	Rs.30.000 millions
3,00,000	Preference Shares either Cumulative or Non Cumulative	Rs. 100/-each	Rs.30.000 millions
	Total		Rs.70.000 millions

Issued Capital :

No. of Shares	Type	Value	Amount
55,90,000	Equity Shares	Rs.10/-	Rs.55.900 millions

Subscribed Capital :

No. of Shares	Type	Value	Amount
54,99,731	Equity Shares	Rs.10/-	Rs.54.997 millions

Paid-up Capital :

No. of Shares	Type	Value	Amount
5396455	Equity Shares fully paid up	Rs.10/-	Rs.53.964 millions
Add:	Forfeited shares (Of the above shares 7,15,040 Equity shares of Rs. 10 each are allotted as fully paid up by way of Bonus shares)		Rs. 0.71 million
	(11,080 Equity share of Rs. 10 each for consideration other than cash to erstwhile shareholders of Neuland Drugs and Pharmaceuticals Private Limited)
	The company has forfeited 103,276 partly paid shares during the previous year vide a resolution passed at the meeting of Board of Directors held onOctober 25, 2005
	GRAND TOTAL		Rs.54.674 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2007	31.03.2006	31.03.2005
SHAREHOLDERS FUNDS
1] Share Capital		54.670	54.670	54.556
2] Share Warrants		0.000	0.000	6.826
3] Reserves & Surplus		542.770	468.400	415.464
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		597.440	523.070	476.846
LOAN FUNDS
1] Secured Loans		774.340	405.360	398.368
2] Unsecured Loans		5.480	6.300	11.821
TOTAL BORROWING		779.820	411.660	410.189
DEFERRED TAX LIABILITIES		39.610	31.380	48.090
TOTAL		1416.200	966.110	935.125
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		428.960	393.370	395.751
Capital work-in-progress		229.810	28.710	26.126
INVESTMENT		72.710	72.710	72.715
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	490.190	408.210	382.829
	Sundry Debtors	422.400	289.630	195.946
	Cash & Bank Balances	83.850	68.000	54.336
	Loans & Advances	227.290	186.320	146.571
Total Current Assets		1223.730	952.160	779.682
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	447.600	407.490	317.852
	Provisions	94.050	77.870	34.658
Total Current Liabilities		541.650	485.360	352.510
Net Current Assets		682.080	466.800	427.172
MISCELLANEOUS EXPENSES		2.640	4.520	13.361
TOTAL		1416.200	966.110	935.125

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		2021.700	1631.550	1542.370
Other Income		39.650	7.840
Total Income		2061.350	1639.390	1542.370
Profit/(Loss) Before Tax		99.840	86.920	72.923
Provision for Taxation		9.460	24.560	24.025
Profit/(Loss) After Tax		90.380	62.360	48.898
Earnings in Foreign Currency :
	Export Earnings	1186.350	1186.350	1110.101
Total Earnings		1186.350	1186.350	1110.101
Imports :
	Raw Materials	629.340	408.530
	Stores & Spares	30.890	4.640
Total Imports		660.230	413.170	357.850
Expenditures :
	Manufacturing Expenses	361.340	279.020
	Administrative, Selling and Other Expenses	214.940	184.410
	Raw Material Consumed	1256.710	968.620	1469.447
	Interest	75.360	60.160
	Depreciation & Amortization	53.160	60.260
Total Expenditure		1961.510	1552.470	1469.447

QUARTERLY RESULTS

PARTICULARS	30.06.2007 1^st Quarter	31.09.2007 2^nd Quarter
Sales Turnover	492.400	467.600
Other Income	13.800	34.800
Total Income	506.200	502.400
Total Expenditure	460.200	442.400
Operating Profit	46.000	60.000
Interest	20.800	22.800
Gross Profit	25.200	37.200
Depreciation	12.800	12.800
Tax	0.000	00.400
Reported PAT	12.400	27.800

KEY RATIOS

PARTICULARS	31.03.2007	31.03.2006	31.03.2005
Debt Equity Ratio	1.10	0.85	0.90
Long Term Debt Equity Ratio	0.62	0.36	0.34
Current Ratio	1.33	1.24	1.21
TURNOVER RATIOS
Fixed Assets	2.57	2.26	2.34
Inventory	4.75	4.31	3.98
Debtors	5.99	7.01	7.77
Interest Cover Ratio	2.32	2.44	2.10
Operating Profit Margin (%)	10.71	12.18	12.95
Profit Before Interest and Tax Margin (%)	8.22	8.64	9.26
Cash Profit Margin (%)	6.73	7.21	6.78
Adjusted Net Profit Margin (%)	4.24	3.66	3.09
Return on Capital Employed (%)	15.43	16.67	18.14
Return on Net Worth (%)	16.64	12.98	11.06

LOCAL AGENCY FURTHER INFORMATION

Fixed Assets:

² Land

² Building

² Plant and Machinery

² R and D Equipments

² Data Processing Machines

² Furniture and Fittings

² Vehicles

HISTORY

The company was promoted by Dr. D. R. Rao and incorporated on 7^th January 1984 at Hyderabad in Andhra Pradesh having Company Registration Number 4393.

Neuland Drugs & Pharmaceuticals Private Limited, a company set up by the same promoters to manufacture bulk drugs was merged with the company with effect from April, 1992. The company manufactures bulk drugs such as salbutamol sulphate, terbutaline sulphate, laberalol hydrochloride and ciprofloxacin.

The company came out with its initial public offering in April, 1994 at a premium of Rs. 35 aggregating Rs. 56.900 millions to part-finance the capacity expansion to manufacture bulk drugs and to diversify its product-mix. The cost of the project as estimated by ICICI was Rs. 157.000 millions.

During the year 1999-2000, the company introduced Itraconazole, an anti-fungal drug and Ipratropium Bromide, an anti-asthmatic drug and the R&D has developed a process for manufacture of Oflaxacin for Regulatory Markets. The Pashamylaram unit has received USFDA approval for manufacturing of Rantidine Hydrochloride Form.

Mirtrazapine, an anti-depressive drug and Ramipril a cardiovascular drug were introduced during the year 2001. The installed capacities of Ciprofloxacin and Rantidine were increased with Rs. 65.000 millions financial assistance from IDBI.

Subject is closely working with several companies in Europe and North America for supply of active Pharmaceutical ingredients and intermediates.

Milestones

1984 Neuland incorporated in Hyderabad, India

1986 Made the first sale of albuterol sulfate / salbutamol sulphate

1987 Exported the first kilogram of albuterol sulfate/salbutamol sulphate

1992 Transition into a multiproduct company

1994 Neuland goes public, issue oversubscribed by 70 times Created large scale production

facility for manufacture of ciprofloxaein HCI

1995 Commissioned production facility for manufacture of ranitldine HCI & developed a

process for ranittdine Form I

1996 Awarded Export House status by Government of India and received ISO.

1997 First US FDA inspection for Neuland's flagship product albuterol sulfate USP/

salbutamol sulphate EP (Unit I)

1998 First Certificate of Suitability for anti-ulcerant product ranitidineHCI Form-1 received

(Unit II)

1999 Neuland received a string of regulatory approvals from US FDA & EDQM for its major

products such as ciprofloxacin HCI, albuterol sulfate, sotalol HCI, ranitidine HCI Form-II

2002 Neuland was also systems inspected by US FDA for Unit II

2003 Neuland clocked more than 40% of its revenues from the regulated markets of US & EU

2004 US FDA systems inspected for Unit 1, bringing both facilities under full cGMP compliance

Also received cGMP clearance for both facilities from TGA, Australia Opened the North

American office at New fersej

2005 Regulated markets constituted 68.6% of total exports and 52% of total revenue.

Biodata

Set up in 1984 as a private limited company to manufacture bulk drugs, Neuland Laboratories (NLL) is promoted by D R Rao. Neuland Drugs & Pharmaceuticals Pvt Ltd, a company set up by the same promoters to manufacture bulk drugs was merged with NLL with effect from Apr.'92. NLL manufactures bulk drugs such as salbutamol sulphate, terbutaline sulphate, labetalol hydrochloride and ciprofloxacin.

 It came out with its initial public offering in Apr.'94 at a premium of Rs 35 aggregating Rs 56.900 millions, to part-finance the capacity expansion to manufacture bulk drugs and to diversify its product-mix. The cost of the project as estimated by ICICI was Rs 157.000 millions.

 NLL's products are exported to more than 35 countries including Germany, Italy, Switzerland, the UK and the Netherlands. The company is also negotiating with multinational companies for tying up supplies of Ranitidine Hydrochloride Form I and Salbutamol Sulphate. 

During the year 1999-2000, the company introduced Itraconazole, an anti-fungal drug and Ipratropium Bromide, an anti-asthmatic drug and the R & D has developed a process for manufacture of Oflaxacin for Regulatory Markets. The Pashamylaram unit has received USFDA approval for manufacturing of Rantidine Hydrochloride Form. 

 Mirtrazapine, an anti-depressive drug and Ramipril a cardiovascular drug were introduced during the year 2001.The installed capacities of Ciprofloxacin and Ranitidine were increased with Rs.65.000 millions financial assisitance from IDBI. 

 The company is closely working with several companies in Europe and North America for supply of active pharmaceutical ingredients and intermediates.

Its product (in USA for FDA approval) range include:

• Sotalol HCL
• Ipratropium Bromide
• Enalapril Maleate
• Itraconazole
• Ofloxacin
• Mirtazapine
• Ramipril

Director Reports:

Business Review

Revenues increased from Rs.1702.89 million in the previous year to Rs.2132.50 million, at a growth rate of

25.2%. The Company's export revenues for the year increased from Rs.1200.580 million to Rs.1322.650 million, a growth rate of 10.1 per cent. 31 per cent of the revenues came from Europe, 11 per cent from North America,

41% from India, and 17 per cent from rest of the world.

Profit before tax increased from Rs.86.920 million to Rs.99.840 million. Growth in the profitability for this year was a result of income from contract research, growth in market share of existing products, and launch of products with less competition.

Profit after tax increased from Rs.62.360 million to Rs.90.380 million. Large investments in R&D lead to significant tax benefits.

The improved financials are a reflection of the Company's marketing strategy to compete in market segments that are diverse yet profitable. The focus of the sales and marketing force is to establish a premium market position for all the Company's products with a significant market share.

The Company added to its product lines during the year and filed 98 DMFs globally. This is a reflection of the demand for the Company's products in the premium markets. The Company envisages increase in customer demand and in order to facilitate manufacture of new and existing products is in the process of adding additional facilities that will come on line by 2007-08.

The highly competitive environment and market dynamics is a constant phenomenon in any business environment and it is a imperative need to face such challenges. The Company has remained a preferred source to all its customers and is constantly taking steps to mitigate risk and stay ahead of competition.

Following is a limited but broad level overview of how the Company manages business effectively: e Comprehensive yet simple objectives for the employees at all levels that are consistent with the long term vision of the Company;

• Appropriate advisory members to guide and validate the business;

• Building a local presence in markets that are complex yet strategically important for the long term sustainability of the Company;

• Comprehensive risk assessment and mitigation plans;

• Use of appropriate technology and software for increased productivity; and,

• Training.

The Company is in the process of incorporating wholly owned subsidiary in Japan to expand marketing network.

A subsidiary company of Subject was incorporated on January 4, 2007 in the State of Delaware, U.S.A. with its principal office in Orange country. No funds have been remitted or shares issued or transactions made since the documentation for incorporation is in process. Hence no information is required to be attached under Section 212 of the Companies Act, 1956.

In addition, Subject is also in late stages of setting up a subsidiary to conduct Phase I to Phase IV trials. The

Company today is confident in its abilities to assert its place in the market and take appropriate steps to increase profits and create value in a consistent manner over the long term.

FUTURE PROSPECTS

The Company's goal is to grow profitably. Following are some of key elements of the Company that will enable it to achieve its goal:

• Continue to build a strong and diverse product portfolio;

• Expand its scope to include capabilities to support drug discovery and development;

• Build processes and systems that will ensure that the steps being taken are sustainable over the long term;

• Differentiate itself from competition by delivering products and services at a much higher level, of quality and service as compared to competition; and,

• Expand into key markets and grow its high quality customer base.

The Company today is recognized as a reliable source by the pharmaceutical industry worldwide and will continue to use this as a leverage point to grow its business profitably.

Management Discussion and Analysis

The Indian pharmaceutical industry is on a growth trajectory. The opportunity from the generics business continues to increase as several blockbuster drugs become off-patent in the next few years. According to the World Generics Market Report, it is expected that over $80 billion worth of drugs will go off patent during 2006-09. The generics industry worldwide is also benefited from the changing government policy in developed countries that is forcing more patients to receive low cost, generic prescriptions.

With the TRIPS agreement in place with the WTO, the activity in the drug discovery and development space has also increased. India is increasingly becoming an avenue for contract research and contract manufacturing, both of which are businesses sensitive to Intellectual Property Rights.

According a recent market research report by Price Waterhouse Coopers, 55% of multinational companies believe that Asia will become the new hub of the global pharmaceutical market, replacing North America. India and China are expected to be the two -main centers of this development.

While growth opportunities in the domestic markets look good, the price control mechanisms of the government are likely to reduce momentum. As a result it is expected that the pharma majors of India is likely to look at international markets, at least in the near term. In the long term, the product patent regime is likely to create more opportunities for R&D based companies that will come up with innovative products rather than for companies focused on making low-cost imitations. This is likely to force pharma majors in India to focus on R&D besides forcing consolidation of small players who are unable to cope with the changing environment.

Bulk Actives Market

Indian bulk actives market in 2006 was almost US$ 3.29 billion witnessing a growth of 19% over 2005 at CAGR of 18.8% in the last six years. India ranks 4th in terms of volume among top 15 drug manufacturing countries world wide. Indian Companies have the distinction of developing cost effective technologies for manufacturing bulk actives and intermediates confirming to global standards. India has over 80 US FDA approved plants, the second highest in the world. Indian bulk actives market is fragmented with top 10 companies contributing 44% of the market and about 1300 companies accounting for the balance. Nearly 70% of the total bulk actives manufactured is exported to more than 100 countries and contract manufacturing in India in 2006 was about US$ 658.6 million registering a growth of 48% over the previous year. Indian companies have filed 408 DMFs during 2006 out of the total 704. By 2010, Indian bulk actives market is projected to grow to about US$ 6.54 billion and contract manufacturing to US$ 1.5 billion. The key to the success of Indian pharmaceutical companies is their ability to retain their cost advantage while matching the quality standards of the premium markets. But apart from lower costs, availability of skilled manpower and favourable regulatory environment have also attributed to the success.

The Company's total revenue during the year is Rs.2132.500 million as compared to Rs.1702.809 million in the previous year, an increase of 25.2% year on year. Revenue in domestic market grew 61.2% over the previous year. The Company's exports during the year were Rs.1322.650 million as against Rs.1200.580 million in the previous year.

The Company has been seen by the pharma industry as a reliable partner and-a preferred source worldwide. A robust business model and a philosophy that supports their customers in facing their competitive markets, succeeded in the Company report improved revenues and net income.

The exports and domestic sales during the year are 62% & 38% respectively. Though there was increase in percentage of domestic sales from 29.5% in previous yea to 38%, the significant portion of these sales were meant for regulatory markets through the domestic formulators possessing the product approvals.

Though Ciprofloxacin plays a significant role in the product basket, the Company manufactures large number of products such as Mirtazapine, Ramipril, Enlapril maleate etc. The Company has spread its risk and has market presence and acceptability in many segments of the industry.

The Company's pipeline of new products to be developed within next- 3 years is mapped out and efforts are on to commercialise them within definitive deadlines. The Company is looking forward with optimism on the strength of these products of the future that include those that will go off patent in the next decade. With in-house process improvements, up-gradation of facilities, by inventing new product development systems, and waste elimination process the Company will be able to develop the new products well within time.

The margins of active pharmaceutical ingredients will continue to face tremendous pressure. However, Neuland continues to differentiate itself by developing niche products, entering new markets and by providing exceptional reliability. During the financial year 2006-07, the Company has added a new R&D facility with state-of-the-art technology adjacent to its Bonthapally unit to undertake both captive and contract research. Considering the trends in the global markets, the Company envisages significant amount of revenue from research in the future years.

Enterprise Wide Risk Management:

Grant Thornton India has been appointed to facilitate the identification of significant threats and risks and to assist in institutionalizing a framework of risk management procedures for capturing risks. Apart from these being good corporate governance practices, the Risk

Management and Control Assessment exercise will also enable them to comply with specific requirements stipulated in Clause 49.

Profile

It has been 20 years since Subject has set out on its strengths of unique competencies in pharmaceutical chemistry and on a vision, which recognized ethics, transparency and long - term bonds. An approach that has become the cornerstone of its growth. Translating every little strength into an opportunity, Subject has grown to become one of the most reliable API source for the Pharma Industry. Today, the company is the preferred partner to leading pharma majors in around 75 countries with close to Rs. 1470 million turnovers.

From a single product company to a global player with a diversified product mix and multi - locational facilities, Subject has established its strengths and competencies. Unmatched quality, timely delivery and strict adherence to standards like cGMP and ICH guidelines lend more flexibility to Subject profile. It is Subject commitment to such practices that has enabled long - term relationships with customers in India and around the world.

Behind Subject success is the skill and the outstanding achievements of its workforce. Dedication and commitment make for the right fuel for the company to surge ahead. Out of the 526 employees that form Subject strength, 300 are college graduates, 60 of them in Quality Control & Quality Assurance, and 25 in R&D and Process Improvement.

Every team member at Subject is trained regularly to enhance skills and to ensure consistent quality standards. These practices not only help the company in maintaining the best practices but also give its workforce a sense of ownership.

Subject supplies APIs to over 75 countries. This number is increasing with every passing year. Our continued success lies in our ability to build strong, lasting customer relationships. We wish to earn the respect and confidence of our customers all over the world. We draw inspiration from each other to achieve this, our common purpose.

Subject Responsibility and autonomy are well balanced with the consequence – work gets done, it gets done well and it gets done on time.

There is a huge reservoir of extraordinary human talent within Subject. People who bring great commitment and passion to their work. Team Neuland is working tirelessly to make our vision come true.

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.39.57
UK Pound	1	Rs.78.93
Euro	1	Rs.56.85

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	8
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	7
--CREDIT LINES	1~10	7
--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	YES
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	NO
TOTAL		63

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.	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
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

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