MIRA INFORM REPORT

Report Date :

28.07.2008

IDENTIFICATION DETAILS

Name :	AUROBINDO PHARMA LIMITED
Registered Office :	Plot No. 2, Maithri Vihar, Behind Maithri Vanam, Ameerpet, Hyderabad – 500 038, Andhra Pradesh
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	26.12.1986
Com. Reg. No.:	01 – 15190
CIN No.: [Company Identification No.]	L24239AP1986PLC015190
TAN No.: [Tax Deduction & Collection Account No.]	HYDA01477A
Legal Form :	Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Manufacturing and Marketing Bulk Drugs, Formulations, Tablets and Capsules, Syrups and Injectiables.

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 37000000
Status :	Excellent
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and reputed company engaged in manufacturing and marketing of Bulk drugs, Drug intermediates and Formulations. The company’s track are fine. It is making excellent progress in its turnover and profits. The company’s directors are well qualified and experienced in their line of business. Trade relations are fair. Payments are reported as correct and as per commitments. It can be considered good for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	Plot No. 2, Maithri Vihar, Behind Maithri Vanam, Ameerpet, Hyderabad – 500 038, Andhra Pradesh, India.
Tel. No.:	91-40-23741083 / 23741084 / 23744919 / 66725000 / 66725401
Fax No.:	91-40-23746833 / 23741080 / 23748112
E-Mail :	info@aurobindo.com apl@aplho.xeehyd.xeemail.com cs@aurobindo.com ir@aurobindo.com
Website :	http://www.aurobindo.com
Plants/ Factory :	Unit I Survey No. 388 and 38, 9, Borapatla Village, Hatnoora Mandal, Medak Dist, Andhra Pradesh Unit II 103/A S.V.C.I.E., I.D.A., Bollaram Jinnaram Mandal, Medak Dt., Andhra Pradesh Unit III Survey No. 313 and 314, Bachupally Village, Quathubullapur Mandal, R. R. Dist., Andhra Pradesh Unit IV Survey No. 61- 66, Industrial Development Area, Pydibhimavaram, Ranasthalam Mandal, Srikakulam Dist., Andhra Pradesh Unit V Plot No. 79-91, Chemical Zone, IDA, Pashamylaram, Patancheru Mandal, Medak Dt., Andhra Pradesh Unit VI Survey Nos. 329/39 and 329/47, Chitkul Village, Patancheru Mandal, Medak Dt., Andhra Pradesh Unit VII Plot No. 32 and 33, Block A, Phase I, Industrial Development Area, Pashamyalaram, Patancheru Mandal, Medak District, Andhra Pradesh Unit VIII Survey No. 10, Gaddapotharam Village, Jinnaram Mandal, Medak District, Andhra Pradesh Unit IX Survey No. 13, Industrial Development Area, Kazipally, Gaddapotharam Village, Jinnaram Mandal, Medak District, Andhar Pradesh Unit X Survey No. 374, Gundlamachunoor Village, Hatnoora Mandal, Medak District, Andhra Pradesh Unit XI B-2, SIPCOT Industrial Complex, Kudikadu Village, Cuddalore, Tamilnadu Unit XII Survey No. 314, Bachupally Village, Putubullapur, Mandal, Ranga Reddy District, Andhra Pradesh, India Bhiwadi Unit No. 1128, RIICO Phase III, Bhiwadi, Alwar District, Rajasthan, India
Research Centre :	Survey No. 313, Bachupally Village, Quathubullapur Mandal, R. R. District, Andhra Pradesh

DIRECTORS

Name :	Mr. P V Ramaprasad Reddy
Designation :	Chairman
Date of Birth/Age :	42 Years
Qualification :	M. Com.
Experience :	19 Years
Date of Appointment :	26.12.1986
Name :	Mr. K. Nityananda Reddy
Designation :	Managing Director
Date of Birth/Age :	42 Years
Qualification :	M. Sc.
Experience :	19years
Date of Appointment :	26.12.1986
Name :	Dr. M. Sivakumaran
Designation :	Whole-Time Director
Date of Birth/Age :	56 Years
Qualification :	M. Sc., Ph. D.
Experience :	26 Years
Date of Appointment :	30.03.1992
Name :	Mr. M Madan Mohan Reddy
Designation :	Whole-Time Director
Name :	Mr. Srinivas Lanka
Designation :	Non-Executive Director
Name :	Dr. K Ramachandran
Designation :	Non-Executive Director
Name :	Mr. V S Janardhanam
Designation :	Non-Executive Director
Name :	Dr. S Bimal Singh
Designation :	Non-Executive Director
Name :	Dr. K A Balasubramanian
Designation :	Non-Executive Director
Name :	Mr. B Sivaprasad Reddy
Designation :	Non-Executive Director

KEY EXECUTIVES

Name :	Mr. Sudhir B Singhi
Designation :	Chief Financial Officer
Name :	Mr. A Mohan Rami Reddy
Designation :	Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders (As on 31.06.2008)	No. of Shares	Percentage of Holding
Shareholding of Promoter and Promoter Group
Indian
Individuals/Hindu Undivided Family	29716232	55.27
Public shareholding
Institutions
Mutual Funds/UTI	2314509	4.30
Financial Institutions/Banks	509390	0.95
Insurance Companies	1295990	2.41
Foreign Institutional Investors	12666060	23.56
Any other (i) Foreign Financial Institution
Non-institutions
Bodies Corporate	1858646	3.46
Individuals – i. Individual shareholders holding nominal share capital up to Rs. 0.100 Million	4750008	8.83
ii. Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	372128	0.69
Others
Non Residents Indians	195124	0.36
Clearing Members	83502	0.16
Foreign Bodies	3679	0.01
TOTAL	53765268	100.00

BUSINESS DETAILS

Line of Business :

Manufacturing and Marketing of Bulk Drugs, Formulations, Tablets and Capsules, Syrups and Injectables.

Products :

Item Code No.	2941.10
Product Description	Amoxycillin Trihydrate
Item Code No.	2941.90
Product Description	Cephalexin
Item Code No.	2941.90
Product Description	Ceftriaxone Sterile

Imports from :

Europe and Far East

Terms :

Purchasing :

L/C, D/A or D/P

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Bulk Drugs and Drug Intermediates	Tonnes	15266	8637
Tablets and Capsules	Nos. (in lakhs)	31540	17695
Injectibles	Nos.	46460000	15550304
Syrups	Nos.	47400000	5049508

Notes:

· Licensed capacities not stated in view of abolition licensing for all of the above Bulk Pharmaceutical Substances (including intermediates) and Dosage Forms vide Notification No. F No 10(11)/92-LP dated October 25, 1994 issued by the Government of India.

· The capacity mentioned above is annual capacity based on maximum utilization of plant and machinery. Based on product mix the quantity of installed capacity may vary.

· The annual installed capacities are as certified by management and not verified by the Auditors, being a technical matter.

· Production includes quantities processed by loan licensees.

GENERAL INFORMATION

Suppliers :

· Helm AG, Germany

· Harbin Pharmaceutical Factory, China

· Hunan Provincinal Medicines and Health Products I/E Corporation, China

· Voest – Alpine Intertrading GmbH, Austria

· Siber Henger, Hongkong

· Indukern Chemie AG, Switzerland

· Chemica E Farmaceutica SPA, Italy

· Deriva Dos Deretil S. A., Spain

· Lisa Ampoules and Vials Private Limited

· Ravi Industries

· Polomon Instruments Private Limited

· Plastic Shapers

· Rolon Seals

· Forbes Marshall Hyd Limited

· Global Electronics

· Fine Fabs Private Limited

· Paper Pack Industries

· Khemas Engineers

· Forbes Marshall (Hyd) Limited

· Polymer House

· MSN Laboratories Limited

· Maithri Laboratories Private Limited

· Anu’s Laboratories Limited

· Lance Engineering

· Virupaksha Organics

· Siflon Polymers

· Mahidhara Chemicals

· Lakshmi Engineering Industries

· Ashrea Clean Room Presentations Private Limited

· Fine Fabs Private Limited

· Radiant Engineers

· Sreenex Machines Private Limited

· Sreepathi Pharmaceuticals Limited

· Sree Krishnaprasad Graphics Private Limited

· Coral Drugs Limited

Customers :

· Ranit Pharma Limited

· Vamsi Organics Private Limited

· Sharp Organics Private Limited

· Champion Industries Corporation

· Global Electronics

· LG Thermoflo Systems Private Limited

· Lakshmi Engineering Enterprises

· Ravi Industries

· Southern Plantiaids Private Limited

· Vaiktro Enterprises

· Hyderabad Packaging

· Lisa Ampoules and Vials Private Limited

· Sree Krishna Prasad Graphic Private Limited

· Citadel Aurobindo Biotech Limited

No. of Employees :

2450

Bankers :

· Andhra Bank

· Canara Bank

· HDFC Bank Limited

· ICICI Bank Limited

· IDBI Bank Limited

· Standard Chartered Bank

· State Bank of Hyderabad

· State Bank of India

Facilities :

(Figures are in Rupees Millions)

Secured Loans	As on 31.03.2007	As on 31.03.2006
Term Loans
From Banks	1497.500	3149.500
From Banks – Working Capital Loans	5360.200	3291.700
From Banks – Hire Purchase Loan	1.800	--
Total	6859.500	6441.200
Unsecured Loans
Short Term Loans
From Banks	900.000	2175.000
Other Loans - Zero Coupon foreign Currency Convertible Bonds.	11299.600	2677.200
Sales Tax Deferment Loan	704.300	758.800
Total	12903.900	5611.000

Banking Relations :

Good

Auditors :

Statutory Auditors

S R Batliboi and Company

Chartered Accountants

205, Ashoka Bhoopal Chambers, Sardar Patel Road, Secunderabad - 500003

Internal Auditors

K Nagaraju and Associates

Chartered Accountants

1-8-197, Chikkadpally, Hyderabad-500 020, India

Associates/Subsidiaries :

· APL Pharma Thai Limited, Thailand

· Aurobindo (H.K.) Limited, Hong Kong

· AB Farmo Industria Farmaceutica Limited, Brazil (formerly AB Farmo Quimica Limited)

· Aurobindo (Datong) Bio-Pharma Company Limited, China

· Aurobindo TongLing (Datong) Pharmaceutical Company Limited, China

· Helix Healthcare B.V., The Netherlands

· Aurobindo Pharma USA Increment, U.S.A

· Auro Pharma Increment, Canada

· Aurobindo Pharma (Australia) Private Limited, Australia

· Aurobindo Switzerland AG, Switzerland

· Agile Pharma B.V., The Netherlands

· Pharmacin International B.V., The Netherlands

· Pharmacin Products B.V., The Netherlands

· Pharmacin B.V., The Netherlands

· Aurex Generics Limited, U.K.

· Milpharm Limited, U.K.

· Aurobindo Pharma Hungary, KFT

· Auro Healthcare (Nigeria) Limited, Nigeria

· ZAO Aurobindo Pharma, Russia

· Aurobindo Pharma Private Limited, South Africa

· APL Research Centre Limited, India

· APL Healthcare Limited, India

Associates

· Ranit Finance and Leasing Limited

· P. V. R. Investments Private Limited

· Ranit Agro Private Limited

· Pravesha Machine Works Private Limited

· Andhra Organics Limited

· Sharp Organics Private Limited

· Ranit Agro Private Limited

Joint Ventures :

· Aurosal Pharmaceuticals LLC, U.S.A

· Cephazone Pharma LLC, U.S.A.

Holding Company :

· Pravesha Industries (Private) Limited, India

· Trident Life Sciences Limited, India

· Sri Sai Packaging, India

CAPITAL STRUCTURE

(As on 31.03.2007):-

Authorised Capital :

No. of Shares	Type	Value	Amount
100000000	Equity Shares	Rs.5/- each	Rs.500.000 Millions
1000000	Preference Shares	Rs.100/-each	Rs.100.000 Millions
		Total	Rs.600.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
53348637	Equity Shares	Rs.5/- each	Rs.266.700Millions

Notes:

Of the above Equity Shares –

· 34703200 Equity Shares of Rs.5 each were allotted as bonus shares by capitalization of Securities Premium Account.

· 1341000 Equity Shares of Rs.5 each were allotted for consideration other than cash.

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		266.700	266.300	253.900
2] Share Application Money		0.200	0.400	0.000
3] Reserves & Surplus		9026.300	8787.800	7632.000
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		9293.200	9054.500	7885.900
LOAN FUNDS
1] Secured Loans		6859.500	6441.200	6244.000
2] Unsecured Loans		12903.900	5611.000	2047.200
TOTAL BORROWING		19763.400	12052.200	8291.200
Equity Share Warrants		0.000	0.000	350.000
DEFERRED TAX LIABILITIES		672.200	718.600	559.800
TOTAL		29728.800	21825.300	17086.900
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		7106.500	6816.800	5780.500
Capital work-in-progress		1831.400	1454.500	1765.000
INVESTMENT		2027.300	367.400	1512.700
Intangible Assets		18.300	1741.600	167.300
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	5472.800	3834.400	3235.800
	Sundry Debtors	6244.100	5690.000	4413.800
	Cash & Bank Balances	5000.700	1420.700	138.000
	Other Current Assets	0.500	0.400	0.500
	Loans & Advances	5492.000	3481.600	2134.700
Total Current Assets		22210.100	14427.100	9922.800
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	3228.500	2845.300	1951.500
	Provisions	236.300	136.800	109.900
Total Current Liabilities		3464.800	2982.100	2061.400
Net Current Assets		18745.300	11445.000	7861.400
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		29728.800	21825.300	17086.900

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		18785.700	13952.100	10850.200
Other Income		1175.500	578.700	297.300
Total Income		19961.200	14530.800	11147.500
Profit/(Loss) Before Tax		2311.600	929.000	429.200
Provision for Taxation		20.800	235.200	78.400
Profit/(Loss) After Tax		2290.800	693.800	350.800
Earnings in Foreign Currency :
	Export Earnings	10968.300	8163.300	5546.200
	Other Earnings	644.600	166.200	81.000
Total Earnings		11612.900	8329.500	5627.200
Imports :
	Raw Materials	9292.000	6547.500	4898.500
	Stores & Spares	91.700	53.800	50.200
	Capital Goods	381.800	292.100	324.800
	Others	104.200	75.800	33.400
Total Imports		9869.700	6969.200	5306.900
Expenditures :
	Manufacturing Expenses	2498.000	1796.500	1724.600
	Administrative Expenses	1153.000	868.900	952.300
	Raw Material Consumed	11483.400	8873.900	6404.800
	Purchases made for re-sale	480.700	152.800	169.600
	Salaries, Wages, Bonus, etc.	1128.800	792.100	662.200
	Interest	187.300	606.400	399.900
	Depreciation & Amortization	718.400	511.200	404.900
Total Expenditure		17649.600	13601.800	10718.300

QUARTERLY RESULTS

PARTICULARS	30.06.2007 (1^st Quarter)	30.09.2007 (2^ndQuarter)	31.12.2007 (3^rd Quarter)	31.03.2008 (4^th Quarter)
Sales Turnover	4799.500	6116.000	5107.800	6324.000
Other Income	329.600	376.000	386.400	88.700
Total Income	5129.100	6492.000	5494.200	6412.700
Total Expenditure	4260.400	5038.200	4558.400	5315.400
Operating Profit	868.700	1453.800	935.800	1097.300
Interest	44.400	40.700	32.200	43.800
Gross Profit	824.300	1413.100	903.600	1053.500
Depreciation	173.700	188.200	190.800	193.300
Tax	72.900	205.000	153.900	55.600
Reported PAT	585.400	1009.200	552.500	760.800

KEY RATIOS

PARTICULARS	31.03.2007	31.03.2006	31.03.2005
Debt-Equity Ratio	1.73	1.20	0.94
Long Term Debt-Equity Ratio	1.09	0.64	0.51
Current Ratio	1.85	1.50	1.54
Turnover Ratios
Fixed Assets	2.12	1.74	1.73
Inventory	4.24	4.10	3.96
Debtors	3.30	2.87	2.57
Interest Cover Ratio	4.04	2.53	2.07
Operating Profit Margin (%)	19.23	14.13	10.70
Profit Before Interest and Tax Margin (%)	15.59	10.60	7.19
Cash Profit Margin (%)	15.27	8.32	6.55
Adjusted Net Profit Margin (%)	11.62	4.79	3.04
Return On Capital Employed (%)	12.25	8.24	5.54
Return On Net Worth (%)	24.97	8.19	4.54

LOCAL AGENCY FURTHER INFORMATION

HISTORY

The company was incorporated on 26^th December, 1986 at Hyderabad in Andhra Pradesh having Company Registration Number 01-15190.

Now Ranit Pharma Limited has merged with Subject w.e.f. 30^th December, 1992.

The company which commenced production in 1988 is one of the largest manufacturers of semi-synthetic penicillin bulk drugs --ampicillin and amoxycillin. It has integrated facilities to manufacture bulk drugs, bulk drug intermediates and formulations.

Commercial production at the pharmaceutical formulation unit started in April 1994. Installed capacity at the bulk drugs unit was expanded in 1994-95. Over the years, the product range was expanded to include antibiotic bulk drugs like cloxacillin and dicloxacillin and high value drugs like astemizole, famotidine, domeperidone, omeprazole, norfloxacin and ciprofloxacin.

Chaitanya Organics Private Limited was set up in 1992 to manufacture CMIC chloride -- a bulk drug intermediate. Its capacity was increased from 120 tpa to 144 tpa after its merger with the company in 1994-95. The capacity for a new intermediate, DCMIC chloride, which is being manufactured in this unit since April 1994, has also been expanded. A separate block was set up to manufacture norfloxacillin and perfloxacillin. A government recognised export house, the company has developed a reputed client base both in India and abroad.

During 1999-2000, subject diversified its product portfolio further with the introduction of wide range of Cephalosporins (Oral and Sterile) and anti - virals in addition to macrocodes, anti-ulcerates, quinolones, semi synthetic penicillin's and formulations for domestic and export market. In April 2000, the company has allotted bonus shares in ratio 1:1.

Sri Chakra Remedies Limited was amalgamated with the company and three equity shares of Rs10/- each of the company was alloted for every 100 existing equity shares of Rs10/- each of Sri Chakra Remedies held. 

Subject has a new division called 'IMUNUS' dedicated to AIDs patients. The division has launched two new products called INDIVEX and STAVEX and is planning to launch few more products. 

For marketing of its branded formulations in the domestic market the company has formed a 50:50 JV with Citadel Group. The joint venture, Citadel Aurobindo Biotech Limited will focus on the rapetutic areas like Cardiovascular, diabetology, gastroenterology, infection and pain management. During 2001-02 the company acquired 79% stake in Ranit Pharma an unlisted company under the same management. In 2002-03 Ranit Pharma and Calc Private Limited was amalgamated with APL and date was as on 1st April,2002. 

Subject has gone for expansion during the year 2002-03 for both Bulk drugs and Formulations. The installed capacity of Bulk Drugs and Drug Intermediates has been increased by 5153 tonnes, thereby the total capacity to 12115 tonnes. In the Formulation segment, installed capacity of Tablets and Injectibles have been increased by 369 millions (Nos) and 120 millions (Nos) respectively. 

It has entered into an agreement joint venture company called Cephazone Pharma LLC, USA in association with Geravi Inc, a subsidiary of Medpharmex USA to manufacture sterile and non-sterile cephalosporin. The company is also setting up a 100% subsidiary in China which will help to procure raw material 6 APA at an economical cost. This subsidiary unit is expected to commence its operation in the current financial year(2002-03).The Srikakulam Unit to manufacture products like Ciprofloxacin, Enrofloxacin, Amoxycillin went on stream during 2002-03. The total investment for the green field project is Rs.1150 million and spread over 112 acres of land.

PROFILE

Subject is a fast track integrated pharmaceutical company headquartered in Hyderabad, India, producing and marketing some of the most quality conscious Active Pharmaceutical Ingredients (bulk actives), intermediates and speciality generic formulations.

It ranks among the top 5 pharma companies in India and is a multi product, multi technology, transnational company. Today the Company’s products are serving consumers in India and over 100 other countries.

Subject is an R and D driven chemistry business house, with a very broad product portfolio. The Company has a presence in fast growing life style disease drugs, anti infective drugs and key speciality therapeutics.

Subject is a known leader in the semi synthetic penicillins and cephalosporins. Indeed, Subject seeks to attain significant market presence in every area of its business. After creating a name for itself in producing APIs and intermediates, Subject sees major growth in its speciality generic formulations business.

Subject values its contribution to its customers and the medical profession. Subject has accordingly planned its strategic growth, proactively responded to the changing requirements of the medical profession, and enabled its core customers to meet their market needs.

The customers of the subject’s benefit from the most modern and state-of-the-art manufacturing facilities and a quality conscious approach to business. Subject believes in delivering value in every transaction.

Subject sees its potential both in regulated and other global markets.  In regulated markets, subject visualizes profits aided by the thrust in building intellectual property.  In the large growth segments of other global markets, subject will succeed by virtue of its cost efficient production. 

Volumes have been ensured by expanding capacities in the remunerative/demand pull segments. In turn, this has provided economies of scale. Subject takes care to remain a quality conscious cost efficient producer.

BUSINESS

Subject was born of a vision. Founded in 1986 by Mr. P.V.Ramaprasad Reddy, Mr. K.Nityananda Reddy and a small, highly committed set of professionals, subject became a public venture in 1992. Subject commenced operations in 1988-89 with a single unit manufacturing semi synthetic penicillins (SSPs) at Pondicherry.

Subject had gone public in 1995 by listing its shares in various stock exchanges in the country. The subject is the market leader in semi-synthetic penicillin drugs. Subject has a presence in key therapeutic segments like SSPs, cephalosporins, antivirals, CNS, cardio-vascular, gastroenterology, etc.

Over the years, subject has evolved into a knowledge driven company. Subject’s R and D focused, have a multi-product portfolio with multi-country manufacturing facilities, and is becoming a marketing conglomerate across the world.

Subject created a name for itself in the manufacture of bulk actives, its area of core competence. After ensuring a firm foundation of cost effective production capabilities and a clutch of loyal customers, subject has entered the high margin speciality generic formulations segment, with a global marketing network.

The formulation business is systematically organised with a divisional structure, and has a focused team for each key international market. Subject believes in gaining volume and market share in every business/segment it enters.

Subject has invested significant resources in building a mega infrastructure for APIs and formulations to emerge as a vertically integrated pharmaceutical company. Subject’s five units for APIs and four units for formulations are designed for the regulated markets.

Subject receives five product approvals from USFDA including two paragraph IV products.

Subject announce that it has received 5 product approvals from the US Food and Drug Administration since October 2007 for the US market. These approvals include two paragraph IV Products – Finasteride Tablets USP and GlyBuride and Metformin Hydrochloride Tablets.

The products approved are as follows:

· Glyburide Tablets USP– 1.25, 2.5 and 5Mg

· Torsemide Tablets – 5, 10, 20 and 100 Mg.

· Finasteride Tablets USP – 5 Mg.

· Atenolol Tablets USP – 25, 50 and 100 Mg.

· Glyburide and Metformin Hydrochloride Tablets – 1.25/250, 2.5/500 and 5/500 Mg.

Subject now has a total of 59 ANDAs approved by the USFDA

Subject’s headquartered at Hyderabad, India, manufactures generic pharmaceuticals and active pharmaceuticals ingredients. Subject has received approvals for several facilities from leading regulatory agencies like US, FDA, UK MHRA, WHO, Health Canada, MCC South Africa. Subject’s robust product portfolio is spread over 6 major therapeutic/product areas encompassing Antobiotics, Anti-Retrovirals, CVS, CNS, Gastroenterologicals and Anti-Allergics. Subject is marketing these products globally, in over 100 countries.

REVIEW OF OPERATIONS

Revenues for the year at Rs.19797.200 Millions were higher by 34.5% and net profit showed a growth of 230% at Rs.2290.900 Millions. Domestic sales increased by 28% and larger revenues from exports included participation in the prestigious PEPFAR program.

The subject effectively faced the challenges of entering into severely competitive markets, high raw material costs and pressure on product prices. During the year, leveraging on the large product basket, successful efforts were made to achieve volume growth in the US market. Some of the products have carved out a large slice of the market share.

Exports Constituted Rs.10968.000 Millions, approximately 55.4% of the revenues maintaining the same proportion as in the previous year. However, in the year, there was higher proportion of value added products with exports of formulations to the regulated markets. Formulations sales accounted for 31% of the revenues in 2006-07, as against 16% in 2005-06.

Subject’s products found rapid acceptance in US, UK, Brazil and the key ARV markets. A strong marketing infrastructure has been ser up in US, UK and Europe manned by outstanding professionals with rich management experience in their respective markets. Subsidiaries and offices in key markets have helped getting nearer to the customer. Acquisition of Milpharm in UK with over 100 market authorizations on hand, and Pharmacin in the Netherlands with over 200 market authorizations have become powerful engines to drive subject’s products.

These efforts augur well for the future. Subject has gained a foothold in the highly competitive markets, and with further additions to the product basket in 2007, the momentum of growth is expected to be maintained. There is huge potential for the large basket of market specific regulatory approved products.

The pipeline of new products being developed by the team in R and D and the pending dossiers awaiting approvals, would add to the offers to the market in future. Subject has filed 112 DMf and 98 ANDAs for the USA market alone in addition to filings in other countries.

MERGER

The scheme arrangement for the merger of APL Life Sciences Limited and Senor Organics Private Limited, the subsidiaries of the company with itself w.e.f. April 1, 2006 was approved by the shareholders at the Meeting held on February 20, 2007, convened as per the directions of the Honorable Court of Andhra Pradesh.

The Honorable High Court of Andhra Pradesh, vide order dated June 21, 2007, in the Company Petition of No. 40/2007 has sanctioned the scheme of arrangement as proposed and for utilizing the Securities Premium Account. Accordingly, the Order of the Honorable High Court of Andhra Pradesh has been reflected in the accounts of the subject for the year ended March 31, 2007.

ACQUISITIONS

Subject through its wholly owned subsidiary Agile Pharma B.V., The Netherlands has acquired 100% holding in Pharmacin International B.V. and its two subsidiary companies viz., Pharmacin Products B.V. and Pharmacin B.V. This enterprise is engaged in the business of supply of licensing of generic pharmaceuticals in the Netherlands and select key markets in Europe. Subject believes that similar to the acquisition of Milpharm Limited in U.K. in early 2006; these acquisitions reduce the time to market and enhance the relationships in the generic value chain and held build a broad and formidable product portfolio.

RECOGNITION

Subject was invited to participate in a conference on July 24, 2006 by the then UN Secretary General Mr. Kofi Annan to review the progress in expanding access to HIV prevention, treatment, care and support in low-and-middle income countries. Mr. P V Ramaprasad Reddy, Chairman and Dr. M. Sivakumaran, Whole-time Director represented the Company. The chairman addressed the august audience and committed higher delivery targets, work towards reducing production costs, and contribute to better access to medicines across the world. They also assured that the subject’s people, manufacturing facilities and market relationships will be better used to improve the health of the HIV patients.

Dr. M Sivakumaran, Whole-time Director of the Subject was invited to the White House, at Washington to explore the prospects of addressing the needs of HIV affected children and pharmaceutical industry’s support for pediatric drugs.

Subject was awarded “Asia Star 2006” award for Packaging Excellence. This award is presented for excellence in packaging product designed for US markets called Compliance pack. The pack is developed keeping in mind the compliance of the patient, consumer friendliness, child resistant and eco friendliness. The Asia Star is an award presented by Asian Packaging Federation (APF), a non-profit organization, established in Tokyo, Japan to unite the packaging interests of all trades and industries in the Asia-Pacific region and beyond, under one co-operative umbrella.

DISINVESTMENT

Aurobindo Tongling (Datong) Pahrmaceutical Company Limited (ATDPL) located at Economic and Technology Development Zone, Datong, Shanxi, China a wholly owned subsidiary engaged in the manufacture of pharmaceutical products catering to the local Chinese markets had been incurring losses and in the best interests of the subject, the entire holding was disinvested. However, Aurobindo (datong) Bio-Pharma Company Limited, the other Wholly Owned Subsidiary in China, which is manufacturing raw materials such as Penicilling, 6 APA etc. for their captive consumption, would continue its operations in China.

The operations of Aurobindo (H.K.) Limited, Hong Kong was discontinued the year.

Contingent Liabilities:

	31.03.2007 (Rs. in millions)	31.03.2006 (Rs. in Millions)
Claims against the company not acknowledged as debts	4.900	1.800
Outstanding Bank Guarantees on account of:
Subsidiary Company	4.600	508.900
Guarantee given for Citadel Aurobindo Biotech Limited(erstwhile 50% Joint Venture Company	--	400.000
Others	64.000	49.000
Bills discounted with Banks	400.500	452.300
Outstanding letters of credit for import of materials	518.300	56.200
Direct and indirect taxes	210.700	300.900
Dossier sales	110.900	40.600

• The Employee Provident Fund Organisation (EPFO) has on September 9, 2005 issued a clarification as per which provident fund contributions should be deducted on leave encashment paid on or after May 1, 2005 and further clarified that recovery of PF contribution on leave encashment for the period October 1, 1994 to April 30, 2005 be kept in abeyance. The company has complied with the said clarification and contributed PF on leave encashment after May 1, 2005. However, for the period October 1, 1994 to April 30, 2005 no provision has been made in the books of accounts as the Company’s liability if any towards such contribution is presently not certain.

• During the financial year 2005-06, the company has issued 60000 zero coupon Foreign Currency Convertible Bonds of USD 1000 Each. The bonds are redeemable at a premium of 39.954% of its principal amount on the maturity date, or in whole at any time on or after February 25, 2008 and on or prior to August 1, 2010 at a minimum of 130% of the accreted principal amount if the bonds are not converted earlier. The payment of premium on redemption is contingent in nature, the outcome of which is dependant on uncertain future events. Hence, no provision is considered in the accounts in respect of such premium for the year amounting to USD 4.800 Millions (USD 3.060 Millions) equivalents to Rs.204.7 (Rs.136.5) and the cumulative premium amounts to USD 7.9 Millions equivalent to Rs.341.2 at the prevailing exchange rate as at the Balance Sheet Date.

• During the year, the company has issued 150000 zero coupon Foreign Currency Convertible Bonds due 2011 (Tranche A Bonds) of USD 1000 each and 50000 Forward Conversion Convertible Bonds due 2011 (Tranche B Bonds) of USD 1000 each. Tranche A Bonds and Tranche B Bonds are redeemable at 146.991% respectively of its principal amount on the maturity date. Accordingly, the payment of premium on redemption is contingent in nature, the outcome of which is dependant on uncertain future events. Hence, no provision is considered in respect of such premium for the year amounting to USD 16.300 Millions equivalent to Rs.707.0 at the prevailing exchange rate as at the Balance Sheet Date.

OUTLOOK

The presence of the subject in almost all major markets, ability to read the market trends, a large product basket in key therapeutic segments, well-organised manufacturing infrastructure with necessary inspections by international regulatory authorities, a reservoir of skills amongst scientists and technical staff have all made Subject into a powerhouse of opportunities.

Subject today has the strategy and strength to play a larger role in all its addressable markets.

For instance, Subject has 13 products in its ARV portfolio. This has made it easier for the countries participating in the PEPFAR program to place order at a single window.

INDUSTRY STRUCTURE

Subject is a fast track integrated pharmaceutical company headquartered in Hyderabad, India, developing, manufacturing and marketing Active Pharmaceutical Ingredients (bulk actives), intermediates and generic formulations. Subject ranks among the top five pharmaceutical companies in India and is a multi product, multi technology, and transnational company. Today the Company's products are serving consumers in India and over 100 other countries, including the premium markets of US and Europe.

The subject values its contribution to its customers and the medical profession and growth plans have been made keeping this perspective. Subject proactively responds to the changing requirements of the medical profession and enables its core customers to meet their market needs while taking care to remain a quality conscious cost efficient producer. Subject's goal is to build a globally successful pharmaceutical company and its mission is to make quality pharmaceutical products affordable to all. The subject seeks to establish a strong presence for its generic formulation products in the regulated markets.

INDUSTRY DEVELOPMENTS

The global pharmaceutical industry is growing at 10% per annum and is estimated to be valued at US$ 518 billion of which North America and Europe account for 48% and 28% respectively. The highly regulated US market includes drugs which are under patent and those that have gone off patent, and is valued at around US$ 248 billion.

The regulated markets protect intellectual property rights, including product patent protection. These are also markets which have stringent quality standards, and stipulate regulatory inspection of manufacturing facilities and approval of products marketed. Rising healthcare costs have led to many governments enforcing stricter cost containment measures. The effect of this is a growing market for generic pharmaceutical products. The generics market is notching percentage growth higher than the industry growth.

Under the new patent regime, the innovator (patent holder) of the drug retains the product patent for a fixed period of twenty years.

Generic manufacturers are permitted to compete with the innovator after patent expiry.

The world's leading drugs are facing patent expiry in the near future. In the United States alone, close to $50 billion worth of branded revenue will be made available to generic competition.

This is the right time for a research led company such as Subject with quality products, regulatory approvals and a competitive approach to gain significant market share; in the process creating a name for itself. The Company recognizes this opportunity and has positioned itself to enter regulated pharmaceutical markets.

The subject has initiated and completed quality and capacity upgrades and is ready to make the shift. Subject today is a manufacturer of antiinfectives, intermediates and active ingredients for anti-infectives with leadership positions in India and a significant presence in emerging global markets. These markets are growing fast and offer steady profitability.

The subject has an established reputation as a supplier in domestic as well as other emerging markets. This position shall be maintained and expanded upon. The Company plans to leverage this strength to open new markets for its products.

In the past two years, concerted efforts have been made successfully, to gain a toe-hold in the developed markets such as US and Europe.

Table of Plants Inspected

Unit	Authority
API
Unit I	US FDA, WHO
Unit 1 A	US FDA
Unit VI A	US FDA, WHO, Health Canada
Unit VIII	US FDA, WHO
Unit XI	US FDA
Formulations
Unit III	US FDA, UK MHRA, WHO, Health Canada, Brazil Anvisa, MCC (SA)
Unit VI B	US FDA, Health Canada, Brazil Anvisa, MCC (SA)
Unit XII	US FDA, UK MHRA, Health Canada, Brazil Anvisa

Fixed Assets:

Tangible Assets:

· Leasehold Land

· Freehold Land

· Leasehold Buildings

· Freehold Buildings

· Plant and Machinery

· Furniture and Fittings

· Vehicles

Intangible Assets:

· Product Development

· Licenses

WEBSITE DETAILS:-

Aurobindo records consolidated Total Income of Rs 25300.000 millions and Net Profit of Rs.2380.000 millions.

Formulation business constitutes 39.4% of the net sales

The company is to announce the financial results for the year ended 31st March 2008. The highlights are as under:

· Financials Consolidated:

· Total Income up by 16.5% to Rs 25300 millions (Rs 21720.000 millions)

· PBT up by 41.3% to Rs 291750 millions (Rs 2064.2 millions)

· PAT up by 18.7% to Rs 2384.800 millions (Rs 2009.6 millions)

· Gross Margin improves to 44.50% from 42.45%

· Net Margin improves to 9.43% from 9.25%

· Formulation Sales up by 44.81% to Rs 10050 millions (Rs 6940 millions)

· Pen-G price continue to be stable, China operations stabilize

· 46 ANDA filings in USA in FY 2007-08, cumulative filings 128

· Despite pressure in generic prices. US sales clock USD 59 mn (USD 39 mn) and Europe sales USD 50 mn (USD 32 mn)

· Overall borrowings decline to Rs 18470 millions from Rs 20780 millions

Consolidated 2007-08

The Company has registered a total income of Rs.25300 millions (Rs.21720 millions) up by 16.5%. The profit before tax has jumped to Rs.2920 millions (Rs.2060 millions) up by 41.7%. After making a provision for tax of Rs.540 millions (Rs.40 millions) the net profit stands at Rs.2380 millions (Rs.2010 millions) up by 18.4%.

The consolidated EBIDTA stands at Rs.4350 millions (Rs.3510 millions) up by 23.9%.

Standalone 2007-08

The Company has registered a total income of Rs.23530 millions (Rs.19180 millions) up by 22.7%. The profit before tax has jumped to Rs.3450 millions (Rs.2310 millions) up by 49.3%. After making a provision for tax of Rs.540 millions (Rs.20 millions) the net profit stands at Rs.2910 millions (Rs.2290 millions) up by 27.1%.

The standalone EBIDTA stands Rs.4350 millions (Rs.3210 millions) up by 35.5%.

Q4 Results:

On Consolidated basis, Total Income, EBIDTA,PBT and PAT stands at Rs. 7220 millions, Rs.1160 millions, Rs. 780 millions and Rs.700 millions respectively. On Stand alone basis, Total Income, EBIDTA and PBT stands at Rs.6410 millions (Rs.5260 millions), Rs.1100 millions (Rs.800 millions), Rs.860 millions (Rs.510 millions) and after providing for tax of Rs.100 millions (Rs.270 millions) during the quarter the PAT stands at Rs.760 millions (Rs.780 millions)

The breakup of Other income on consolidated basis is as under:

(Rs. in Millions)

Particulars	Q4	FY 07-08	FY 06- 07
Net Exchange fluctuation gain	78.000	693.000	127.000
Sale of Dossier	27.000	106.000	133.000
Miscellaneous	58.000	144.000	233.000
Total	163.000	943.000	493.000

The Exchange fluctuation gain on account of FCCBs for 2007-08 is at Rs.855 millions (Rs.479 millions)

The breakup of Domestic and Export Sales on standalone basis is as under

(Rs. in Millions)

Particulars	Q4	FY 07-08	FY 06- 07
Domestic	2560.000	9494.000	8320.000
Export	4039.000	14016.000	11477.000
Total	6599.000	23510.000	19797.000

.

Breakup of Sales (consolidated):

(Rs. in Millions)

Particulars					FY 07-08	FY 06- 07
	Q1	Q2	Q3	Q4
Formulations	1796.000	2397.000	2466.000	3388.000	10047.000	6935.000
APIs
SSPs	2123.000	2278.000	1748.000	1892.000	8041.000	5913.000
Cephs	1309.000	1577.000	1620.000	1412.000	5918.000	6429.000
ARVs and Others	436.000	418.000	268.000	395.000	1517.000	2964.000
Sub Total	3868.000	4273.000	3636.000	3699.000	15476.000	15306.000
Total	5664.000	6670.000	6102.000	7087.000	25523.000	22241.000

The formulation sales has grown by 44.8% to Rs.10050.000 millions (Rs.6940.000 millions) and it now constitutes 39.4% (31.3%) of the net sales.

Breakup of Formulation Sales:

(Rs. in Millions)

Particulars	FY 07–08				FY 07-08	FY 06- 07
	Q1	Q2	Q3	Q4
USA	546.000	518.000	497.000	798.000	2359.000	1563.000
Europe	362.000	562.000	641.000	446.000	2011.000	1280.000
ARVs	642.000	1072.000	939.000	1391.000	4044.000	2875.000
ARVs and Others	436.000	418.000	268.000	395.000	1517.000	2964.000
Rest of the World	246.000	245.000	389.000	754.000	1634.000	1217.000
Total	1796.000	2397.000	2466.000	3389.000	10048.000	6935.000

The Global Regulatory filings:

The Company has filed and received approvals for large number of products in six key therapeutic segments across several countries.

Filings	Q4 FY 07-08	Cumulative Filings as on 31st March, 2008
ANDAs (USA)	9	128
DMFs (USA)	1	122
Formulations Dossiers in other key regulated markets	7	185
API DMF/COS filings in other key regulated markets	91	895
Patents	25	318

As on 31.03.2008, 67 ANDAs have been approved in USA including 18 tentative approvals. The Company has so far launched 33 products in the USA market.

OTHER INFORMATION:-

The company, headquartered at Hyderabad, India, manufactures generic pharmaceuticals and active pharmaceutical ingredients. The company has received approvals for several facilities from leading regulatory agencies like US FDA, UK MHRA, WHO, Health Canada, MCC South Africa, ANVISA Brazil. The company’s robust product portfolio is spread over 6 major therapeutic/product areas encompassing Antibiotics, Anti-Retrovirals, CVS, CNS, Gastroenterologicals, and Anti-Allergics. The Company is marketing these products globally, in over 100 countries.

The company is to announce that the company has received final approval from the US Food and Drug Administration (USFDA) to manufacture and market Zaleplon Capsules 5mg and 10mg Zaleplon Capsules are the generic equivalent of King Pharmaceuticals’ Sonata® Capsules, which are indicated for the treatment of insomnia. Aurobindo is in the first line of generics and got the USFDA nod on the very first day post the expiry of the relevant patent and has already launched the product in the US market.

This is Aurobindo’s 70th ANDA approval from the USFDA.

Press Release:

Hyderabad, April 4, 2007

MEB Netherlands approves Lisinopril Tablets of Aurobindo

Subject (Reuters Code: ARBN.BO) is delighted to announce that it has received the marketing authorization approval from Medicines Evaluation Board (MEB), NETHERLANDS for Lisinopril 10, 20, 30 and 40  mg tablets.

This is the fourth formulation approval received from MEB, NETHERLANDS for a product developed in house by subject, and sixth such approval in Europe as a whole. With this approval, it will be easier for subject to obtain similar marketing authorization for Lisinopril tablets in the other countries of the European Union through Mutual Recognition Procedure.

Lisinopril is the generic version of Zestril marketed by Astra Zeneca. Lisinopril Dihydrate  is an effective, long acting   orally administered ACE inhibitor. It is used often in the management of Hypertension.

Subject has already filed 36 products in various EU countries, some of which are nearing the marketing authorization approvals. Many more filings in the EU countries are in pipeline in the coming year.

Lisinopril in Europe has a market of over 300 mio US dollars.

Hyderabad, March 29, 2007

Cephazone, cephalosporin sterile injectable facility in California, is approved by US FDA and receives approval of Ceftriaxone from US FDA

Subject is to announce that its Joint venture, Cephazone Pharma LLC, at California, USA, a facility dedicated to cephalosporin injectable drugs, has received the first ANDA approval for Ceftriaxone

The subject has received approval for Ceftriaxone injectable, a third generation cephalosporin antibiotic. 250mg, 500mg, 1Gm and 2Gm single use vials for intra muscular, intra venous use and also 1Gm and 2Gm bottles (popularly known as piggy pack) for intravenous use are approved.

Ceftriaxone is the research innovation of Hoffmann-La Roche and often used in respiratory infections and as a choice antibiotic in bacterial meningitis. Besides, its use is well documented in pediatrics in febrile conditions to prevent possible septicemias.

Cephazone is a joint venture of Aurobindo and has filed several ANDAs with US FDA. Subject has already received the facility approval for sterile Cephalosporin APIs.

Cephalosporin injectables market is an attractive opportunity in USA and globally.  Subject is vertically integrated in the cephalosporin category and enjoys a leading position in the category.

NEWS

Aurobindo expands in Europe

Aurobindo Pharma is to announce that it has recently concluded a strategic deal, for acquisition of Intellectual Property & Marketing Authorizations, with TAD Italy, a generic company registered in Italy.

This acquisition will give Aurobindo an access to more than 70 ready to market products which will fast track Aurobindo’s entry into the Italian generic market. This strategic acquisition is expected to jump start the business for Aurobindo in Italy where the market and the regulatory procedures are considered as the one of the toughest in all EU.

This deal will provide us with a ready local platform and will help us is immediately maximising the potential of our vast internal pipleline which is to follow in the next few months. Aurobindo has already filed 22 products for registration in Italy. During the integration process, we expect to derive maximum synergies from this acquisition by shifting the manufacturing of TAD’s products to our own facilities.” commented Ashish Menocha, Aurobindo’s Regional VP, Europe.

Aurobindo has also acquired high profile OTC brands - Mapooro (www.mapooro.com) and Carmiooro from TAD as a part of this deal.

This is the Company's third acquisition in Europe, after acquiring Milpharm Ltd in UK and Pharmacin International B.V., in Netherlands. The Company believes that such acquisitions reduce the time to market and enhance the relationships in the generic value chain in addition to building a broad and formidable product portfolio.

Motilal Oswal Investment Advisors Private Limited was the advisor to the Company on the transaction.

About Aurobindo Pharma Limited:

Aurobindo Pharma Limited, headquartered at Hyderabad, India, manufactures generic pharmaceuticals and active pharmaceutical ingredients. The company’s manufacturing facilities are approved by several leading regulatory agencies like US FDA, UK MHRA, WHO, Health Canada, MCC South Africa. The company’s robust product portfolio is spread over 6 major therapeutic/product areas encompassing Antibiotics, Anti-Retrovirals, CVS, CNS, Gastroenterologicals, and Anti-Allergics. The Company is marketing these products globally, in over 100 countries.

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. 42.23
UK Pound	1	Rs. 83.88
Euro	1	Rs. 66.41

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
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	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--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		54

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

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