MIRA INFORM REPORT

Report Date :

21.02.2007

IDENTIFICATION DETAILS

Name :	GLAXOSMITHKLINE PHARMACEUTICALS LIMITED
Registered Office :	Dr. Annie Besant Road, P. O. Box 202, Mumbai – 400 025, Maharashtra
Country :	India
Financials (as on) :	31.12. 2005
Date of Incorporation :	24.01.1924
Com. Reg. No.:	11-1151
CIN No.:	L24239MH1924PLC001151
TAN No.: (Tax Deduction & Collection Account No.)	MUMG00196A
PAN No.: (Permanent Account No.)	AAACG4414B
Legal Form :	It is a public limited liability company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturing and selling of pharmaceuticals, chemicals including bulk drugs and formulations.

RATING & COMMENTS

MIRA’s Rating :

Aa

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 38000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established and reputed company of multi-national Glaxo Group. Available information indicates high financial responsibility of the company and its management. Financial position is good. Payments are always correct and as per commitments. The company can be considered good for normal business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	Dr. Annie Besant Road, P. O. Box 202, Mumbai – 400 025, Maharashtra, India
Tel. No.:	91-22-24933871 / 24933514 / 24959595
Fax No.:	91-22-24935358 / 24959494
E-Mail :	info@glaxowellcome.co.in
Website :	http://www.glaxowellcome.co.in http://www.gsk-India.com
Factory 1 :	v 2nd Pokhran Road, Thane v Ambad, Nashik

DIRECTORS

Name :	D. S. Parekh
Designation :	Chairman
Name :	V. Thyagarajan
Designation :	Vice-Chairman
Name :	S. Kalyanasundaram
Designation :	Managing Director
Name :	P. Bains (w.e.f. 26.07.2005)
Designation :	Director
Name :	R. R. Bajaaj
Designation :	Director
Name :	Dr. A. Banerjee
Designation :	Director
Name :	J. D. Coombe (upto26.07.2005)
Designation :	Director
Name :	M. B. Kapadia
Designation :	Director
Name :	N. Kaviratne (w.e.f. 26.07.2005)
Designation :	Director
Name :	A. S. Lakshmanan
Designation :	Director
Name :	V. Narayanan
Designation :	Director
Name :	P. V. Nayak
Designation :	Director
Name :	P. Parsonson - Alternate to P. Bains (w.e.f. 26.07.2005)
Designation :	Director
Name :	Dr. M. Reilly
Designation :	Director
Name :	S. J. Scarff (upto 26.07.2005)
Designation :	Director
Name :	A. A. Nadkarni
Designation :	Company Secretary
Name :	S. Kalyanasundaram
Designation :	Managing Director

KEY EXECUTIVES

Name :	M. B. Kapadia
Designation :	Senior Executive Director Finance, Legal & Corporate Affairs - Corporate Communications & Administration - Fine Chemicals
Name :	Dr. A. Banerjee
Designation :	Executive Director- Technical
Name :	J. Dwivedy
Designation :	Vice-Presidents- Procurement - South Asia
Name :	Dr. S. Joglekar
Designation :	Vice-Presidents - Medical Affairs & Regulatory
Name :	R. Limaye
Designation :	Vice-Presidents - Marketing & Commercial Strategy
Name :	S. Patel
Designation :	Vice-Presidents - Legal & Corporate Affairs
Name :	R. Raghunandan
Designation :	Vice-Presidents - Quality - South Asia
Name :	K. Shivkumar
Designation :	Vice-Presidents - Pharmaceuticals
Name :	H. Singh
Designation :	Vice-Presidents - Pharmaceuticals
Name :	M. K. Vasanth Kumar
Designation :	Vice-Presidents -Information Technology & Supply Chain

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares	Percentage of Holding
Glaxo Group Limited	30485250	35.99
Eskaylab Limited	5880000	6.94
Burroughs Wellcome International Limited, U.K.	3360000	3.97
Castleton Investment Limited	3192238	3.77
Insurance Companies, Financial Institutions & Banks	8864252	10.47
FIIs, NRIs & OCBs	12750044	15.05
Mutual Funds	2522374	2.98
Domestic Companies	1486343	1.75
Resident Individuals	16162516	19.08
Total	84703017	100.00

BUSINESS DETAILS

Line of Business :

Manufacturing and selling of pharmaceuticals, chemicals including bulk drugs and formulations.

Products :

Item Code No. (ITC Code)	300439.08
Product Description	Betamethasone
Item Code No. (ITC Code)	300410.00
Product Description	Potassium Clavulanate with Sodium Amoxycyllin
Item Code No. (ITC Code)	300490.33
Product Description	Ranitidine

PRODUCTION STATUS

Particulars	Unit	Installed Capacity
Chemicals (including Bulk Drugs)	Tonnes	371
Formulations :
Liquids – Orals, Topicals, Parenterals & Malt	Kilo Litres	8400
Antibiotic Vials	000	4000
Tablets & Capsules	Millions	6350
Solids including Powders & Ointments	Tonnes	1410
Aerosols	‘000	3000

GENERAL INFORMATION

No. of Employees :	4016
Bankers :	Ø Bank of America Ø Citibank N. A. Ø HDFC Bank Limited Ø Hongkong and Shanghai Banking Corporation Limited Ø Standard Chartered Bank Ø State Bank of India

Banking Relations :	Good
Auditors :	Price Waterhouse & Company Chartered Accountants
Solicitors:	Crawford Bayley & Company Gagrat & Company
Associates :	· Adescha GmbH, Switzerland · Burroughs Wellcome (India) Limited, India · GaxosmithKline Asia Private Limited, India · GaxosmithKline Australia Pty Limited · GaxosmithKline Bangladesh Limited · GaxosmithKline Biological Manufacturing S.A., Belgium · GaxosmithKline Biological S.A., Belgium · GaxosmithKline Consumer Healthcare Limited, India · GaxosmithKline Export Limited, UK · GaxosmithKline Peru SA · GaxosmithKline Pharma A/S, Denmark · GaxosmithKline Philippines Inc · GaxosmithKline Pte Limited, Singapore · GaxosmithKline Research & Development Limited, UK · GaxosmithKline Services Unlimited, UK · Glaxo Group Limited, U.K. · Glaxo Operations UK Limited · Glaxo Saudi Arabia Limited · Glaxo Wellcome (Kenya) Limited · Glaxo Wellcome Asia Pacific Pte. Limited, Singapore · Glaxo Wellcome Bangladesh Limited, Bangladesh · Glaxo Wellcome Export Limited, U.K. · Glaxo Wellcome Manufacturing Pte Limited, Singapore · Glaxo Wellcome Manufacturing Pte. Limited, U.K. · Glaxo Wellcome Mexico S.A.C.T., Mexico · Glaxo Wellcome Pakistan Limited · Glaxo Wellcome Research & Development Limited, U.K. · Glaxo Wellcome Ceylon Limited · Glaxo Wellcome (Kenya) Limited · Glaxo Wellcome Singapore Pte. Limited · Glaxo Wellcome Vidhyasom Limited, Thailand · GlaxoSmithKline International, U.K. · GlaxoSmithKline Pharmaceuticals Limited, U.K. · GlaxoSmithKline Philippines Inc., Philippines · GlaxoSmithKline Sri Lanka, Sri Lanka. · P. T. Glaxo Wellcome Indonesia · SmithKline Beecham Biologicals Manufacturing S.A., Belgium · SmithKline Beecham Pharma GmbH & Company KG, Germany · SmithKline Beecham Research Limited, Philippines · SmithKline Beecham Research Limited, UK · SmithKline Beecham S.A., Belgium
Subsidiaries:	Biddle Sawyer Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
9,00,00,000	Equity Shares	Rs.10/- each	Rs. 900.000 millions

Issued & Subscribed :

No. of Shares	Type	Value	Amount
8,47,07,710	Equity Shares	Rs.10/- each	Rs. 847.077 millions

Paid-up Capital :

No. of Shares	Type	Value	Amount
8,47,03,017	Equity Shares	Rs.10/- each	Rs. 847.030 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.12.2005	31.12.2004	31.12.2003
SHAREHOLDERS FUNDS
1] Share Capital		847.030	873.225	744.750
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		8639.028	8369.408	5930.102
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		9486.058	9242.633	6674.852
LOAN FUNDS
1] Secured Loans		0.000	0.000	0.000
2] Unsecured Loans		48.542	38.448	28.627
TOTAL BORROWING		48.542	38.448	28.627
DEFERRED TAX LIABILITIES				0.000
TOTAL		9534.600	9281.081	6703.479
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		815.702	869.806	953.289
Capital work-in-progress		153.732	45.055	40.507
INVESTMENT		9130.567	7768.258	4091.154
DEFERREX TAX ASSETS		297.635	448.636	300.277
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	2181.290	2264.973	2008.855
	Sundry Debtors	673.872	760.635	671.146
	Cash & Bank Balances	475.263	633.826	594.077
	Other Current Assets	194.666	208.066	140.203
	Loans & Advances	1092.935	978.778	931.653
Total Current Assets		4618.026	4846.278	4345.934
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	2575.543	2194.711	2060.854
	Provisions	2905.519	2502.241	966.828
Total Current Liabilities		5481.062	4696.952	3027.682
Net Current Assets		(863.036)	149.326	1318.252
MISCELLANEOUS EXPENSES		0.000	0.0000	0.000
TOTAL		9534.600	9281.081	6703.479

PROFIT & LOSS ACCOUNT

PARTICULARS	31.12.2005	31.12.2004	31.12.2003
Sales Turnover [including other income]	15509.373	14292.283	12460.675
Profit/(Loss) Before Tax	4779.085	4182.391	2845.640
Provision for Taxation	3062.845	2660.504	1027.034
Profit/(Loss) After Tax	1716.240	1521.887	1818.606
Export Value	273.228	283.744	403.938
Import Value	1150.102	1182.141	877.573
Total Expenditure	10730.288	10109.892	9615.035

QUARTERLY RESULTS

PARTICULARS	31.03.2006 [1^st Qtr.]	30.06.2006 [2^nd Qtr.]	30.09.2006 (3^rd Qtr.)	30.12.2006 (4^th Qtr.)
Sales Turnover	4254.200	4040.800	3970.300	15384.200
Other Income	247.100	208.000	2141.000	2896.400
Total Income	4501.300	4248.800	6111.300	18280.600
Total Expenditure	2889.900	2813.900	2711.400	10724.700
Operating Profit	1611.400	1434.900	3399.900	7555.900
Interest	0.000	0.000	0.000	0.000
Gross Profit	1611.400	1434.900	3399.900	7555.900
Depreciation	37.700	39.000	40.700	158.500
Tax	567.300	475.100	498.500	1889.000
Reported PAT	1012.300	910.600	2854.300	5455.100

Notes

200603 Quarter 1

Other Income Includes Other Income Rs 143.50 million Interest Income (net) Rs 78.80 million Expenditure Includes (Increase) / Decrease in stock in Trade Rs 197.20 million Consumption of Raw Material & Packing Materials & Purchase of Finished Goods Rs 1579.50 million Excise Duty on Samples and (Increase)/Decrease in Stock in Trade Rs 7.40 million Staff Cost Rs 371.40 million Other expenditure Rs 719.80 million Recovery of Expenses Rs (24.80) million Tax Includes Provision for Current Tax (including Fringe benefit Tax) Rs 567.30 million Deferred Tax Rs (5.90) million EPS is Basic & Diluted Status of Investor Complaints for the quarter ended March 31, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 08 Complaints disposed off during the quarter 08 Complaints unresolved at the end of the quarter Nil 1. The Company registered a sales growth of 54% during the quarter ended March 31, 2006. This performance must be viewed in the context of sales being depressed during the corresponding quarter last year due to de-stocking by the trade in anticipation of the introduction of VAT. 2. Profit before Tax and Exceptional Items grew by 97% during the quarter, due to a marked improvement in the product mix of the priority range and tight management of expenses. 3. Exceptional Items for the quarter ended March 31, 2006 are in respect of provision for pricing of a formulation. 4. The Board of Directors at its meeting held on April 28, 2006, approved the proposal for sale of the Animal Health business as a going concern to a leading European Company for a total consideration of Rs 2071 million, subject to receipt of requisite approvals. Animal Health business forms part of the Company's Other Businesses segment. 5. The above Results were reviewed by the Audit Committee and were thereafter approved by the Board of Directors at their respective meetings held on April 28, 2006. The statutory auditors have carried out a limited review of the results for the three months ended March 31, 2006. The figures for 2005 have been regrouped wherever necessary to facilitate comparison.

200606 Quarter 2

Other Income Includes Other Income Rs 112.60 million Interest Income (net) Rs 70.50 million Expenditure Includes (Increase) / Decrease in stock in Trade Rs (42.10) million Consumption of Raw Material & Packing Materials & Purchase of Finished Goods Rs 1709.00 million Excise Duty on Samples and (Increase)/Decrease in Stock in Trade Rs 32.60 million Staff Cost Rs 428.90 million Other expenditure Rs 718.10 million Recovery of Expenses Rs (24.90) million Tax Includes Provision for Current Tax (including Fringe benefit Tax) Rs 475.10 million Deferred Tax Rs 10.20 million EPS is Basic Status of Investor Complaints for the quarter ended June 30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 31 Complaints disposed off during the quarter 31 Complaints unresolved at the end of the quarter Nil 1. The Company registered a sales growth of 13% during the half year ended June 30, 2006. Sales during the first quarter of 2005 were significantly impacted due to VAT implementation uncertainties. Resolution of these issues led to exceptionally strong sales in the second quarter of 2005. 2. Profit before Tax and Exceptional Items grew by 20% for the first half of 2006, with continued emphasis on product mix improvement and control over expenses. 3. Exceptional Items for the six months ended June 30, 2006 are in respect of provision for pricing of a formulation. 4. The Board of Directors, at its meeting held on April 28, 2006. Approved the proposal for sale of the Animal Health business as a going concern to Virbac Animal Health India Private Limited for a total consideration of Rs 2071 million. Shareholders of the Company have approved the proposal by postal ballot on June 26, 2006. The sale is in the process of being completed. Animal Health business forms part of the Company's other Businesses' segment. 5. The above Results were reviewed by the Audit Committee and were thereafter approved by the Board of Directors at their respective meetings held on July 26, 2006. The statutory auditors have carried out a limited review of the results for the three months and six months ended June 30, 2006. The figures for 2005 have been regrouped wherever necessary to facilitate comparison.

200609 Quarter 3

Notes

Other Income Includes Other Income Rs 161.00 million Interest Income (net) Rs 92.60 million Expenditure Includes (Increase) / Decrease in stock in Trade Rs (58.30) million Consumption of Raw Material & Packing Materials & Purchase of Finished Goods Rs 1648.70 million Excise Duty on Samples and (Increase)/Decrease in Stock in Trade Rs 21.20 million Staff Cost Rs 383.80 million Other expenditure Rs 737.20 million Recovery of Expenses Rs (23.80) million Tax Includes Provision for Current Tax (including Fringe benefit Tax) Rs 498.50 million Deferred Tax Rs 6.40 million Status of Investor Complaints for the quarter ended September 30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 05 Complaints disposed off during the quarter 05 Complaints unresolved at the end of the quarter Nil 1. Pharmaceuticals sales grew by 9% during the nine months ended September 30, 2006. However, the overall sales growth was 6% due to the divestment of the Animal Health business (Refer note 3 below). 2. Profit before Tax and Exceptional Items grew by 14% during the nine months ended September 30, 2006. For comparison purposes, if the profits from the Animal Health business are excluded in 2005 and 2006, the adjusted profit growth from the continuing businesses is 16%. 3. The Board of Directors, at its meeting held on April 28, 2006, approved the proposal for sale of the Animal Health business as a going concern to Virbac Animal Health India Private Limited for a total consideration of Rs 2071.00 million Shareholders of the Company approved the proposal by postal ballot on June 26, 2006. The sale has been completed effective from the close of business hours of July 31, 2006. Accordingly, figures for the prior period are to that extent not comparable. Animal Health business forms pad of the Company Other Businesses segment. 4. Exceptional Items for the nine months ended September 30, 2006 are in respect of profit on sale of the Animal Health business and expenses connected therewith, and provision for pricing of a formulation. 5. The above Results were reviewed by the Audit Committee and were thereafter approved by the Board of Directors at their respective meetings held on October 30, 2006. The statutory auditors have carried out a limited review of the results for the three months ended September 30, 2006. The figures for 2005 have been regrouped wherever necessary to facilitate comparison.

200612 Quarter 4

Notes

1. Net Sales grew by 4.6% and Profit before Tax and Exceptional Items grew by 16.3% during the year ended 31st December, 2006. However, after excluding the financials of the Animal Health business which was divested (refer Note 2 below) during the year, the growth in Net Sales of the continuing businesses (mainly Pharmaceuticals) was 9.3% and in Profit before Tax and Exceptional Items was 20.6% 2. The Board of Directors, at its meeting held on 28th April, 2006, approved the proposal for sale of the Animal Health business as a going concern to Virbac Animal Health India Private Limited for a total consideration of Rs. 2071 millions. Shareholders of the Company approved the proposal by postal ballot on 26th June, 2006. The sale has been completed effective from the close of business hours of 31st July 2006 at a profit of Rs. 1870.300 millions. Accordingly, figures for the current year are to that extent not comparable with those of the previous year. Animal Health business forms part of the Company's 'Other Businesses' segment. 3. Exceptional Items for the year ended 31st December, 2006 are mainly in respect of profit on sale of the Animal Health business and expenses connected therewith. 4. There were no Investor complaints pending as at the beginning of the quarter. The Company has received 5 complaints from the investors during the quarter and all of them have since been resolved, leaving no investor complaints unresolved at the end of the quarter. 5. The Board of Directors recommends a Dividend of Rs. 17 per equity share (Previous year Rs. 14 per equity share) and a special additional Dividend of Rs. 14 per equity share (Previous year Rs. 14 per equity share). 6. The above Results were reviewed by the Audit Committee and were thereafter approved by the Board of Directors at their respective meetings held on 16th February, 2007. The figures for 2005 have been regrouped wherever necessary to facilitate comparison.

KEY RATIOS

PARTICULARS	31.12.2005	31.12.2004	31.12.2003
Debt Equity Ratio	0.00	0.00	0.00
Long Term Debt Equity Ratio	0.00	0.00	0.00
Current Ratio	1.00	1.09	1.25
TURNOVER RATIOS
Fixed Assets	6.23	5.81	4.52
Inventory	7.09	6.92	6.01
Debtors	21.97	20.67	15.99
Interest Cover Ratio	202.58	164.90	101.64
Operating Profit Margin (%)	31.34	29.60	23.94
Profit Before Interest and Tax Margin (%)	30.34	28.42	22.43
Cash Profit Margin (%)	23.44	21.12	15.96
Adjusted Net Profit Margin (%)	22.44	19.94	14.45
Return on Capital Employed (%)	50.82	52.61	42.72
Return on Net Worth (%)	37.76	37.07	27.63

STOCK PRICES

Face Value	Rs. 10.00/-
High	Rs. 1155.00/-
Low	Rs. 1127.75/-

LOCAL AGENCY FURTHER INFORMATION

HISTORY

The company was incorporated on 24.01.1924 at Mumbai in Maharashtra having Company Registration Number 1151.

Incorporated in 1924 as H J Foster and Company, an agency house to distribute the well-known Glaxo baby food, Glaxo India became a wholly owned subsidiary of Joseph Nathan and Company, UK. In 1947, the company was renamed as Glaxo Laboratories (India).  

In December, 2000, Glaxo Wellcome plc and SmithKline plc have merged under an agreement. They formed a new company named GlaxoSmithKline plc. The new company is well placed to respond to the healthcare challenges of the twenty first century with market leadership in major therapeutic categories. With this merger, Glaxo India is now an affiliate of GlaxoSmithKline plc, which holds 51% of the equity.  

It has adopted the acquisition route, amongst others, to grow. It acquired two groups. The Burroughs Wellcome India Limited (BWIL) merger came about after the parent was merged with Glaxo Plc. Subsequently, it acquired the Biddle Sawyer Group, the approval for which was received. 

MAX GB Limited, a 50:50 joint venture between Max India and Gist Brocades of Netherlands, and Glaxo India Limited, have entered into an alliance for manufacturing cephalexin from the drug intermediate, 7 ADCA.  

In October 2001, SmithKline Beecham Pharmaceutical (India) Limited was merged with Glaxo India Limited to become GlaxoSmithKline Pharmaceuticals Limited.

In March 2002, the Board of Directors of the Company approved the Scheme of Arrangement for the Demerger of the marketing undertaking of Meghdoot Chemicals Limited (wholly owned subsidiary) into the company and the simultaneous amalgamation of Croydon Chemical Works Limited (wholly owned subsidiary) with the Company. Subsequent to this the High Court has sanctioned the merger in November 2002 and therefore MCL and CCWL cease to be subsidiaries of the company. During 2002 the company has launched Timentims (an injectible antibiotic), Flutibact (combination of Fluticasone and Mupirocin) and COD (daily-Ciprofloxacin dosage). 

BUSINESS

The company is engaged in manufacturing and selling of pharmaceuticals, chemicals including bulk drugs and formulations.

The company has a wide range of product that covers around 14 therapeutic groups. However, the benefits of the wide coverage are offset by about 70% of the company’s products falling under the drug price control order (DPCO), Shackling realizations.

Subject has a strong product line with quite a few brands in the country's top 250 brands. Among its principal products are Betamethasone- based topical steroids, Betnovate-C, Betnovate-M, and Betnovate- GM. It also makes tablets from the same pharmaceutical ingredient, which is marketed under the brand name Betnesol. Its other key products are Cephalosporin, Ceftum, H2 blocker based on Ranitidine, Zinetac and the vitamin Celin.

Glaxo manufactures the bulk drug from the basic stage, furfuryl alcohol, employing the technology developed by its parent, Glaxo Welcome, UK. According to the company, the formulation manufactured from the bulk drug, Zinetac tablets.  

The company has launched Celex, a clarithromycin anti-infective formulation under licence from and manufactured by Abbott India, Ventoride for asthma (combination of salbutamol and beclamethasone) and fluticasone cream, and a corticosteroid. 

PARENT COMPANY

Glaxo Wellcome, UK, was formed in March 1995, by Glaxo’s global takeover of the US$ 3.5 billion Wellcome Plc, UK, consolidating its world leadership position. The merged entity is an integrated research based group, with global sales of more than 7.94 billion pounds and net profit of 2.6 billion pounds. R&D expenditure was 2 billion pounds. Headquartered in Britain, it has operations in 70 countries, employing over 45,000 people of which 7,000 are in R&D. There are currently some 60 major research projects and 100 development projects underway. Globally, Glaxo-Wellcome is concentrating on therapeutic segments such as respiratory system, anti-infectives, AIDS, cardiac care, CNS, oncology and anti-viral/ anti-biotics.

Major products are: Anti-ulcerant Zantac (Ranitidine), Anti-herpes Zovirax (Acyclovir), Anti-infective Fortum (Ceftazidime). In the current fiscal, Glaxo will have 5 new launches namely Ziagen and Agenerase (for AIDS), Lamivudine (Hepatitis B), Seretide (anti-asthmatic) and Relenza for influenza.

The merger of Smithkline Beecham Pharmaceuticals India Limited with Glaxo India Limited has been approved and consequently the Company's name stands changed to Glaxo Smithkline Pharmaceuticals Limited. The approval is effective January 1, 2001.

The company has expanded the installed capacity of tablets and capsules during the year 2003 by 1140 million (nos.) and with this expansion the total capacity has been increased to 9118 million (Nos).

DIVIDEND

The Directors recommend a dividend of Rs. 14 per Equity Share for the year (previous year Rs. 13.00 per Equity Share). If approved by the Shareholders at the Annual General Meeting, the dividend will absorb Rs. 1185.800 millions. The Dividend Distribution Tax borne by the Company will amount to Rs. 166.300 millions. The cash position continues to remain favourable over the last few years due to improved operating margins, tight working capital management and inflows from sale of properties. In 2005, the Company disposed off two properties located at Mulund, Mumbai at a net profit of Rs. 2170 millions. The Directors are of the view that a portion of the surplus cash be returned to the shareholders. The Directors are therefore pleased to recommend a special additional one-time dividend of Rs.14 per Equity Share. If approved by the Shareholders at the Annual General Meeting, the special additional one-time dividend will absorb Rs. 1185.800 millions. The Dividend Distribution Tax borne by the Company on this dividend will amount to Rs. 166.300 millions.

BUYBACK OF SHARES OF THE COMPANY

The Company commenced the Share Buyback program in May 2005 in terms of the consent given by the Shareholders through Postal Ballot. The Company has bought back 26,19,529 shares of Rs. 10 each for an aggregate consideration of Rs. 2091.637 millions at an average price of Rs. 798.48 (inclusive of all associated costs) from the open market through Stock Exchanges. The Buyback program was closed by the Company on 21st December 2005, resulting in a reduction in the paid up Share Capital to Rs. 847.030 millions from Rs.873.225 millions. Consequently, the promoter shareholding has increased from 49.15% to 50.67%. The Company has no immediate plans for further buyback of shares.

THE AGRIVET FARM CARE (AFC) BUSINESS

The AFC business continues to maintain its No. 1 position in the Animal Health sector with a market share of approximately 10%. The business has a presence in the cattle, poultry, aquaculture, canine and sheep segments with an undisputed reputation for quality and service. Selective restructuring of field force in high volume territories has increased customer and product focus. In 2005, while the Veterinary Industry registered a growth of approximately 5%, the AFC business achieved a growth of 9.8%. There was an increase in the procurement cost of products due to a change in the method of calculating excise duty and introduction of VAT on feed supplements in some States. Inspite of this, the business achieved a 13% growth in Trading Profit due to improved product mix.

THE QUALIGENS FINE CHEMICALS (QFC) BUSINESS

The QFC business holds the No. 1 position in a highly competitive Laboratory Chemicals market. The chemicals activity showed a growth of 8%, but diagnostics, glassware and other allied ranges recorded sluggish sales. Sales were impacted due to loss of stocks on account of heavy floods in July 2005. Despite flat sales, an improved mix and expense control helped to achieve a Trading Profit growth of 8%.

PHARMACEUTICALS PRICING

The National Pharmaceuticals Pricing Authority (NPPA) effected a downward revision in the prices of Vitamin C and Ranitidine formulations during the year.

As reported last year, the Government has moved the Supreme Court in respect of the judgement of the Hon'ble High Court of Delhi which had set aside the DPEA demand relating to the bulk drug Betamethasone. The matter is pending hearing by the Supreme Court.

The company is in trade terms with:

· Cauvery Aqua Private Limited

· Vibro Pharma Private Limited

· Vijay Bakelite Trading Company

· Prerna Health Care Limited

· Sundar Chemicals Private Limited

· Themis Laboratories

· Nalanda Packaging Industries

· Nikava Pharmaceutical

· Alutop

· Autofits

· Biochemical & Synthetic Products Limited

· Budhraja Art Printers Private Limited

· Clarion Synth-Chem Private Limited

· Cosmos Printing Works

· Canberra Chemicals

· Topnote Aromatics

· Hi-pro Tooling Systems

· Kemwell Private Limited

· Kopack Industries

· Omega Lab Chemicals

· Asian Industries

· Shree Mangireesh Printing Press

· Sundar Chemicals Private Limited

· Swift Chemicals Limited

· Vibro Pharma Private Limited

· Kemwell Limited

· Chemcos Corporation

· On Dot Enterprise

· Technique Sales Corporation

· Global Printing & Packaing Company Private Limited

· Themis Laboratories Private Limited

· Madhu Silica Private Limited

· Surface Graphics Private Limited

· Shree Jayanti Corporation

· Printsoon

· Sharpprint Packaging

· Larphins Chems

· Silitech Systems

· Pioneer Extruders Private Limited

· Technochem Engineers

· Vasumati Printers

The company’s fixed assets of important value include freehold land, leasehold land, freehold building, leasehold building, plant & machinery, furniture & fittings, trademarks and vehicles.

GSK identifies Asia, Eastern Europe as major centers for clinical research

Monday, September 25, 2006 08:00 IST

Joe C. Mathew, recently in London

GSK has identified emerging markets in Asia and Eastern Europe as potential destinations for clinical research collaborations. GSK is already active in India with two groups in Mumbai and Bangalore focusing on drug discovery programmes, Duncan B. Judd, Head, Chemistry Services Outsourcing, GSK Research and Development Limited informed pharmabiz.

"GSK has found lot of potential in these emerging markets. They have wealth of options and hence focusing on collaborations that have maximum value", he said.

According to him, GSK has an appetite for building blocks and screening compounds among others. He refused to give more details about collaborative arrangements as it is handled by GSK's US arm.

It should be noted that GSK India had declared its intentions to play a more significant role in GSK's worldwide drug discovery programmes. As pointed out by India Brand Equity Foundation, 'GSK plc is highly aware of India's process chemistry skills, product development capability and manufacturing strengths. In addition, the rich biodiversity and the doctor base available in India make it a promising clinical trials destination for GSK innovations. India is likely to be one of the major trial centres for GSK plc'.

GSK already has research alliances in the filed of preventive medicines. It has signed up a drug discovery alliance with Ranbaxy. GSK had announced last year that its clinical trial data management, analyses and reporting activities based in Bangalore are being expanded for catering to the data services for its global clinical trials.

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

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8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs. 44.25
UK Pound	1	Rs. 86.41
Euro	1	Rs. 58.10

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	8
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	8
--RESERVES	1~10	8
--CREDIT LINES	1~10	8
--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	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		72

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Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

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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
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