MIRA INFORM REPORT

Report Date :

11.08.2011

IDENTIFICATION DETAILS

Name :	NEON LABORATORIES LIMITED
Registered Office :	140, Damji Shamji Industrial Complex, Mahakali Caves Road, Andheri, Mumbai- 400093, Maharashtra
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	22.06.1982
Com. Reg. No.:	11-027493
Capital Investment / Paid-up Capital :	Rs.15.300 millions
CIN No.: [Company Identification No.]	U24100MH1982PCL027493
TAN No.: [Tax Deduction & Collection Account No.]	MUMN11047B / MUMN10021E
PAN No.: [Permanent Account No.]	AAACN1299D
Legal Form :	A Closely Held Public Limited Liability Company.
Line of Business :	Manufacturer of Pharmaceutical and Healthcare Products.
No. of Employees :	1000 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

A (60)

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 4184000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established company having fine track. Financial position of the company appears to be sound. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments. The company can be considered good for normal business dealings at usual trade terms and conditions.

NOTES:

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

INFORMATION PARTED BY

Name :	Mr. Parmar
Designation :	Finance Executive
Date :	10.08.2011

LOCATIONS

Registered Office :	140, Damji Shamji Industrial Complex, Mahakali Caves Road, Andheri, Mumbai- 400093, Maharashtra, India
Tel. No.:	91-22-26875366 / 72/ 30077000
Fax No.:	91-22-26873502
E-Mail :	finance@neongroup.com accounts@neongroup.com neon@bom1.vsnl.net.in mukesh@neongroup.com
Website :	http://www.neongroup.com
Area :	800 Sq. Ft
Location :	Owned
Administration Office:	28, Mahal Industrial Estate, Mahakali Caves Road, Andheri (East), Mumbai - 400 093, Maharashtra, India
Tel. No.:	91-22-28360809 / 28301038
Fax No.:	91-22-28379012
E-Mail :	neon@giasbm01.vsnl.net.in
Factory :	Plot No. 57 and 60, The Palghar Taluka Co-Operative, Industrial Estate Limited, Boisar Road, District Thane-401104, Maharashtra, India
Tel. No.:	91-2525-255075 / 252312
Area :	Leased
Location :	2500 Sq. Mtr.
Warehouse :	Located at 2 Kilometer from Factory

DIRECTORS

AS ON 27.09.2010

Name :	Mr. Uttam K. Jain
Designation :	Director
Address :	2005 Kent Gardens TPS III, Factory Lane, Borivali (West), Mumbai- 400092, Maharashtra, India
Date of Birth/Age :	05.02.1954
Date of Appointment :	22.06.1982
Name :	Mr. Pravin K. Jain
Designation :	Director
Address :	201- 201A Tulsi Tower, 51^st Road TPS III, Borivali (West), Mumbai- 400092, Maharashtra, India
Date of Birth/Age :	18.03.1964
Date of Appointment :	06.02.1996
Name :	Mr. Abhay Uttam Jain
Designation :	Additional Director
Address :	2005 Kent Gardens TPS III, Factory Lane, Borivali (West), Mumbai- 400092, Maharashta, India
Date of Birth/Age :	17.04.1984
Date of Appointment :	05.02.2007

KEY EXECUTIVES

Name :	Mr. Mukesh S Jain
Designation :	Secretary
Address :	1-110 Mhada, Mahakali Caves Road, Andheri East, Mumbai- 400093, Maharashtra, India
Date of Birth/Age :	28.06.1971
Date of Appointment :	01.07.1997
Name :	Mr. Rakesh Parmar
Designation :	Finance Executive

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(AS ON 27.09.2010)

Names of Shareholders	No. of Shares
Babulal Jain	43604
Uttam Jain	36263
Ashok Jain	99050
Pravin Jain	40632
Chanchal Jain	113287
Kamla Jain	129297
Meena Jain	121917
Moham jain	39044
Manohar Sirsankar	1333
Manish Jain	8820
Uttam Jain (HUF)	104850
Babula Jain (HUF)	25713
Pravin Jain	67
Ashok Jain (HUF)	64400
Bharti Jain	161333
Rohan Jain	56802
Abhav Jain	128743
Rahul Jain	86101
Prachi Jain	92270
Manish Jain (HUF)	5867
Pravin Jain (HUF)	33090
Sangeeta Jain	111757
Aarya Jain	100
Misal Jain	100
Niyati Jain	1450
Mohan Jain (HUF)	24110
Total	1530000

(AS ON 27.09.2010)

Category	Percentage
Directors or relatives of directors	99.91
Other	0.09
Total	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer of Pharmaceutical and Healthcare Products.
Products :	· Anaesthetics and Allied Products · Antineoplast Product · Corticosteroids and Hormons Products · Antibacterials Products · Antitubercular Product · Gynaecological Products · Analgesic and Antipyratic Product · Cardiovascular Products · Vitamin, Haematinic and Mineral Preparations · Antihistamine, Cough and Cold Preparation · Other Specialities · Vetrinary Products
Exports :
Products :	· Anaesthetics and Allied Products · Antineoplast Product · Corticosteroids and Hormons Products · Antibacterials Products · Antitubercular Product · Gynaecological Products · Analgesic and Antipyratic Product · Cardiovascular Products · Vitamin, Haematinic and Mineral Preparations · Antihistamine, Cough and Cold Preparation · Other Specialities · Vetrinary Products
Countries :	· Srilanka · South America · European Countries
Imports :
Products :	Raw Materials
Countries :	· China · Italy
Terms :
Selling :	Depend
Purchasing :	Depend

GENERAL INFORMATION

Customers :

Wholesalers and End Users.

No. of Employees :

1000 (Approximately)

Bankers :

· State Bank of India,

Industrial Finance Branch, Andheri (East), Mumbai- 400069, Maharashtra, India

Facilities :

Secured Loans	31.03.2010 (Rs. in Millions)	31.03.2009 (Rs. in Millions)
Cash Credit – State Bank of India
I.F.B. Andheri (East) Branch	87.763	11.645
Palghar Branch	(0.137)	(0.936)
Total	87.626	10.709
NOTE:- The above loans are secured by equitable mortgage of Land and Building at Plot No. 57 and 60 at Palghar and hypothecation of stock in trade, debtors, current assets and are personally guaranteed by the directors of the company.
Unsecured Loans	31.03.2010 (Rs. in Millions)	31.03.2009 (Rs. in Millions)
Sales Tax Deferred – 1998	9.667	9.667
Sales Tax Deferred – 2006	50.264	50.264
Total	59.931	59.931

Banking Relations :	--
Auditors :
Name :	Nikhil Gandhi and Company Chartered Accountant
Address :	303-304, Vyom Arcade, Tejpal Scheme Road No. 5, Vile Parle (East), Mumbai – 400057, Maharashtra, India
Tel. No.:	91-22-66981760 / 26205279

CAPITAL STRUCTURE

(AS ON 27.09.2010)

Authorised Capital :

No. of Shares	Type	Value	Amount
4000000	Equity Shares	Rs.10/- Each	Rs.40.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
1530000	Equity Shares	Rs.10/- Each	Rs.15.300 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2010	31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		15.300	15.300	15.300
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		1030.684	753.606	528.880
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		1045.984	768.906	544.180
LOAN FUNDS
1] Secured Loans		87.626	10.709	101.624
2] Unsecured Loans		59.931	59.931	48.305
TOTAL BORROWING		147.557	70.640	149.929
DEFERRED TAX LIABILITIES		40.753	16.799	12.757
TOTAL		1234.294	856.345	706.866
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		463.086	189.523	159.583
Capital work-in-progress		63.194	162.987	12.525
INVESTMENT		26.074	12.694	280.733
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	180.006	185.102	160.535
	Sundry Debtors	205.457	226.071	200.467
	Cash & Bank Balances	0.863	0.568	1.381
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	754.413	486.997	241.632
Total Current Assets		1140.739	898.738	604.015
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditor	254.260	210.817	178.090
	Others Current Liabilities	74.336	64.974	65.679
	Provisions	130.203	131.806	106.221
Total Current Liabilities		458.799	407.597	349.990
Net Current Assets		681.940	491.141	254.025
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		1234.294	856.345	706.866

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income	1455.923	1346.423	1102.013
		Job Work Income	12.622	10.147	6.638
		Other Income	56.073	35.033	15.420
		TOTAL (A)	1524.618	1391.603	1124.071
Less	EXPENSES
		Increase / (Decrease) in stock	(6.886)	(16.432)	(6.876)
		Material Consumption	515.988	540.591	399.092
		Employee Cost	166.549	126.394	92.744
		Operating and Other Expenses	379.106	376.732	314.329
		TOTAL (B)	1054.757	1027.285	799.289
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		469.861	364.318	324.782
Less	FINANCIAL EXPENSES (D)		14.829	8.837	6.052
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		455.032	355.481	318.730
Less/ Add	DEPRECIATION/ AMORTISATION (F)		20.456	9.597	9.367
	PROFIT BEFORE TAX (E-F) (G)		434.576	345.884	309.363
Less	TAX (H)		153.354	135.042	107.660
	PROFIT AFTER TAX (G-H) (I)		281.222	210.842	201.703
Add/ Less	INCOME TAX FOR EARLIER YEARS		(0.924)	0.030	NA
Less	APPROPRIATIONS
		Transfer to General Reserve	9.000	9.000	NA
		Interim Dividend	2.065	2.065	NA
		Proposed Final Dividend	0.688	0.688	NA
		Tax on Dividend	0.465	0.468	NA
	BALANCE CARRIED TO THE B/S		268.080	198.651	NA
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	95.617	106.049	NA
	TOTAL EARNINGS		95.617	106.049	NA
	IMPORTS
		Raw Materials	178.134	162.091	NA
		Capital Goods	18.354	46.819	NA
	TOTAL IMPORTS		196.488	208.910	NA
	Earnings Per Share (Rs.)		183.20	137.02	131.03

Particulars	31.03.2011
Sales Turnover (Approximately)	2000.000

The above information has been parted by Parmar.

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	18.44	15.15	17.94
Net Profit Margin (PBT/Sales)	(%)	29.85	25.69	28.07
Return on Total Assets (PBT/Total Assets}	(%)	27.10	31.78	40.51
Return on Investment (ROI) (PBT/Networth)		0.41	0.45	0.57
Debt Equity Ratio (Total Liability/Networth)		0.58	0.62	0.92
Current Ratio (Current Asset/Current Liability)		2.49	2.20	1.72

LOCAL AGENCY FURTHER INFORMATION

SUNDRY CREDITORS DETAILS:

Particulars	31.03.2010	31.03.2009	31.03.2008
	(Rs. In Millions)
Sundry Creditors for Goods	215.427	175.776	149.942
Sundry Creditors – Others	38.833	35.041	28.148
Total	254.260	210.817	178.090

OPERATIONS AND QUTLOOK:

The turnover for the year has risen to Rs.1470.000 Millions in comparison to Rs.1360.000 Millions in the previous year. The directors have kept the cost of operations under control during the year. Both increased sales and controlled cost have resulted in increase in Profit before Tax to Rs.434.600 Millions in comparison to Rs.345.900 Millions in the previous financial year.

The company’s sales and profitability have been growing from year to year under the able guidance of the Board and Board of the company is confident of maintaining the momentum of growth from year to year.

CONTINGENT LIABILITIES NOT PROVIDED FOR IN BOOKS OF ACCOUNTS

A] Guarantees given by bank outstanding =15.853 Millions

B] Letters of Credit unpaid greading = Rs.11.431 Millions

TRADE REFERENCE:

· Aurobindo Pharma

FORM 8 :

This form is for	Modification of charge
Charge identification number of the modified	90188700
Corporate identity number of the company	U24100MH1982PCL027493
Name of the company	NEON LABORATORIES LIMITED
Address of the registered office or of the principal place of business in India of the company	140, Damji Shamji Industrial Complex, Mahakali Caves Road, Andheri, Mumbai- 400093, Maharashtra, India
Type of charge	Immovable
Particular of charge holder	State Bank of India, Industrial Finance Branch, Andheri (East), Mumbai- 400069, Maharashtra, India
Nature of description of the instrument creating or modifying the charge	No instrument. Memorandum of Deposit for creation of further charge for term loan/overall limit where the initial charge is created by way of mortgage by deposit of title deeds
Date of instrument Creating the charge	04.12.2010
Amount secured by the charge	Rs.300.000 Millions
Brief particulars of the principal terms an conditions and extent and operation of the charge	Rate of Interest : As per sanction terms Terms of Repayment : As per sanction terms Margin : As per sanction terms Extent and Operation of the charge : As per sanction terms
Short particulars of the property charged	A first charge by way of hypothecation of the borrowers entire goods, movables and other assets present and future including document of title to goods and other assets, such as book debts, outstanding money’s, receivables, including receivable by the way of cash assistance and/or cash incentives under the cash incentive scheme or any other scheme, claims, including claims by way of refund of customs/excise duties under the duty drawback credit scheme, or any other scheme, bills, invoices, documents, contracts, insurance policies, guarantees, engagements, securities, investments and rights uncalled capital and all Machinery present and future of such form satisfactory to the bank.
Date of latest modification prior to the present modification	03.12.2010
Particulars of the present modification	Now by the present modification Dt. 4.12.2010 the company created an extension of charge by way of an equitable mortgage by deposit of title deeds over the immovable properties created earlier on 1.3.2008 to secure the credit facilities of Rs.300.000 Millions. The details of the immovable properties situated at: plot no.60 and 57 (plot no.61 converted into 57) in village Palghar within the sub-registrar of Palghar Dist. Thane admg.730.68 mtrs. and 841 mtrs

FIXED ASSETS:

· Freehold Land

· Leasehold Land

· Residential Flat

· Factory Building

· Office Building

· Godown Building

· Furniture and Fixture

· Plant and Machinery

· Material Handling and Laboratory Equipments

· Temperature Control Equipment

· Boiler

· Office Equipment

· Electrical Installation

· Blocks and Dyes

· Computer

· Vehicles

· Commercial Vehicle

· Energy Saving Device

· Shops

· Water Purifing System

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.45.17
UK Pound	1	Rs.73.72
Euro	1	Rs.64.26

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	7
--CREDIT LINES	1~10	6
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		60

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

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

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

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
-	NB	New Business	-

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

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.