MIRA INFORM REPORT

Report Date :

11.01.2011

IDENTIFICATION DETAILS

Name :	GRANULES INDIA LIMITED
Registered Office :	Second Floor, Block III, My Home Hub, Madhapur, Cyberabad, Hyderabad – 500 081, Andhra Pradesh.
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	18.03.1991
Com. Reg. No.:	01-12471
CIN No.: [Company Identification No.]	L24110AP1991PLC012471
TAN No.: [Tax Deduction & Collection Account No.]	HYDG00432F
PAN No.: [Permanent Account No.]	AAACG7369K
Legal Form :	Public Limited Liability company. The company’s shares are listed on the Stock Exchanges
Line of Business :	Manufacturers and Marketers of Bulk Drugs, Granulations and Tablets.

RATING & COMMENTS

MIRA’s Rating :

Ba (49)

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 8100000
Status :	Satisfactory
Payment Behaviour :	Usually correct
Litigation :	Clear
Comments :	Subject is an established company having satisfactory track. Trade relations are reported as fair. Business is active. Payments are reported to be usually correct and as per commitments. The company can be considered normal for business dealings at usual trades 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.

ECGC Country Risk Classification List – April 1, 2010

Country Name	Previous Rating (31.12.2009)	Current Rating (01.04.2010)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

LOCATIONS

Registered Office :	Second Floor, Block III, My Home Hub, Madhapur, Cyberabad, Hyderabad – 500 081, Andhra Pradesh, India
Tel. No.:	91-40-66760000
Fax No.:	91-40-23115145
E-Mail :	mail@granulesindia.com investorrelations@granulesindia.com
Corporate Office / Factory 1:	8-2-293/A/A/2, Plot # 227, Road No. 2, Banjara Hills, Hyderabad – 500 033, Andhra Pradesh, India.
Tel. No.:	91-40-23747093 / 23748834 / 23740425 / 23744135 / 23742541 / 23553266 / 23550884
Fax No.:	91-40-23745478 / 23547894
E-Mail :	companysec@granulesindia.com granules.hq@gnhyd-gil.globalnet.ems.vsnl.net.in info@granulesindia.com mail@granulesindia.com
Website:	http://www.granulesindia.com
Factory 2:	Plot No. 15A/1, Phase III, I.D.A. Jeedimetla, Hyderabad – 500 055, Andhra Pradesh, India.
Factory 3:	Temple Road, Bonthapally, Medak District, Andhra Pradesh – 502 313
Factory 4:	Plot No. 160/A and 161/E, Gagilapur Village, Qutubullapur Mandal, R R District – 500043.
R and D Centre	Gagillapur, Qutullapur Mandal, R.R. District , Andhra Pradesh – 500 043 Plot No. 160/A and 161/E, Gagilapur Village, Qutubullapur Mandal, R R District - 500043
Correspondence Address:	2^nd Floor, 3^rd Block, My Home Hub Madhapur, Hyderabad – 500081, India.
Tel No:	91 – 40 – 66760000
Fax No:	91 – 40 - 23115145
E mail id:	mail@granulesindia.com
Website:	www.granulesindia.com
Sales Offices:	Located At: Europe U.S. Latin America Asia Pacific(ex-India) and Middle East India

DIRECTORS

As on 31.03.2010

Name :	Mr. C Nageswara Rao
Designation :	Chairman- Non Executive and Non Independent Director
Date of Birth/Age :	15.08.1926
Qualification :	M. S. (Surgery and Urology)
Date of Appointment :	18.03.1991
Name :	Mr. L S Sarma
Designation :	Non Executive and Independent Director
Name :	Mr. A. P. Kurian
Designation :	Non Executive and Independent Director
Name :	Mr. C. Parthasarathy
Designation :	Non Executive and Independent Director
Date of Birth/Age :	07.07.1955
Qualification :	B. Sc., LLB, FCA, FCS
Date of Appointment :	27.05.2009
Name :	Mr. Phillip Brian Logan
Designation :	Non Executive and Non Independent Additional Director
Date of Birth/Age :	01.03.1962
Qualification :	Diploma in Applied Science
Date of Appointment :	29.01.2009
Name :	Mr. Arun Rao Akinepally
Designation :	Non Executive, Independent and Additional Director
Name :	Mr. C Krishna Prasad
Designation :	Managing Director
Date of Birth/Age :	02.10.1954
Qualification :	B. Sc.
Date of Appointment :	31.08.1994
Name :	Mr. Harsha Chigurupati
Designation :	Non Independent Executive Director

KEY EXECUTIVES

Name :	Mr. Sachin Guha
Designation :	Company Secretary
Name :	Mr. Pranesh Raj Mathur
Designation :	President (API) and Chief Financial Officer

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(As on 30.09.2010)

Names of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	6,062,500	30.23
Bodies Corporate	749,127	3.73
Sub Total	6,811,627	33.96
(2) Foreign
Individuals (Non-Residents Individuals / Foreign Individuals)	123,712	0.62
Sub Total	123,712	0.62
Total shareholding of Promoter and Promoter Group (A)	6,935,339	34.58
(B) Public Shareholding
(1) Institutions
Financial Institutions / Banks	1,890	0.01
Insurance Companies	6,356	0.03
Foreign Institutional Investors	325,734	1.62
Sub Total	333,980	1.67
(2) Non-Institutions
Bodies Corporate	567,849	2.83
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 Million	3,142,430	15.67
Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	1,681,314	8.38
Any Others (Specify)	6,823,202	34.02
Non Resident Indians	374,357	1.87
Foreign Corporate Bodies	6,448,845	32.15
Sub Total	12,214,795	60.90
Total Public shareholding (B)	12,548,775	62.57
Total (A)+(B)	19,484,114	97.14
(C) Shares held by Custodians and against which Depository Receipts have been issued	573,040	2.86
Total (A)+(B)+(C)	20,057,154	100.00

BUSINESS DETAILS

Line of Business :

Manufacturers and marketers of Bulk Drugs, Granulations and Tablets.

Products :

ITC CODE	Product Description
2942000	Bulk Drugs Formulations and Granulations

Exports :

Countries :

• U.S.A
• Germany
• Spain
• Mexico
• Hong Kong
• Australia
• Europe

PRODUCTION STATUS (As on 31.03.2010)

Particulars	Unit	Installed Capacity	Actual Production
APIs	Tones	9751.00	10307.58
PFIs	Tones	8400.00	5800.76
Tablets	Nos	6172.80	533.59

GENERAL INFORMATION

Suppliers :

• Durga Industries
• Siddhartha Canisters Private Limited

Customers :

• Roussel Corporation, U.S.A.
• Granueltec, U.S.A.
• Helm NY Chemicals, U.S.A.
• Welding GmbH and Company, Germany
• Flavine Espanasa, Spain

No. of Employees :

Approximately 478

Bankers :

• Andhra Bank, Somajiguda Branch, Hyderabad-500 177, Andhra Pradesh, India
• Standard Chartered Grindlays Bank Limited, Hyderabad-500 177, Andhra Pradesh , India
• Citibank NA, Hyderabad-500 177, Andhra Pradesh , India
• State Bank of Hyderabad, Gun Foundry, Hyderabad – 500 177, Andhra Pradesh, India
• ING Vysya Bank
• Indulsand Bank
• Bank of Baroda
• Union Bank of India
• Export-Import Bank of India
• State Bank of Travancore

• International Finance Corporation

Facilities :

SECURED LOAN	As on 31.03.2010 (Rs. In Millions)	As on 31.03.2009 (Rs. in Millions)
I) Term Loans
From Banks	665.052	888.107
Interest accured and due	00000	2.475
II) Hire purchase loans	2.899	4.153
III) working Capital Borrowings from banks	231.776	186.898
Total (I+II+III)	899.727	1081.633
Note: a) Term Loans: Term loans from Banks are secured by equitable mortgage of land and buildings and hypothecation of plant and machinery located at Jeedimetla, Gagillapur and Bonthapally on pari passu basis. Term loans are further secured by second charge on hypothecation of stocks of raw materials, finished goods, semi finished goods and receivables b) Working capital facilities: The working capital facilities from Banks are secured by hypothecation of stocks of raw material, finished goods, semi finished goods and receivables on pari passu basis. The working capital facilities are further secured by a second charge on the fixed assets of the company c) All the above loans except loan from International Finance Corporation are further secured by personal guarantee of the Managing Director. The company has requested Consortium Bankers to waive the personal guarantee of the Managing director, which is under active consideration. d) Hire purchase loans are secured by hypothecation of the asset purchased
UNSECURED LOANS	As on 31.03.2010 (Rs. In Millions)	As on 31.03.2009 (Rs. in Millions)
From Banks	100.000	100.000
Sales Tax Deferment Loan	7.524	7.525
Total	107.524	107.525

Banking Relations :	--
Statutory Auditors :
Name :	Kumar and Giri Chartered Accountants
Address :	D.No. 1-111-126/D, Opposite Aeroview Towers, Begumpet, Hyderabad – 500 016
Internal Auditors :
Name :	Dhanujaya and Prabhakar Chartered Accountant
Address :	302, Wings, 8-3-960/6/2, Srinagar Colony, Hyderabad-500073, Andhra Pradesh, India
Wholly Owned Subsidiaries :	Granules USA, Inc. GIL Life sciences Private Limited Granules Singapore Private Limited
Joint Venture:	Granules – Biocause Pharmaceutical Company Limited

CAPITAL STRUCTURE

(As on 31.03.2010)

Authorised Capital :

No. of Shares	Type	Value	Amount
30000000	Equity Shares	Rs. 10/- each	Rs. 300.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
20057154	Equity Shares	Rs. 10/- each	Rs. 200.571 Millions
	Add: Forfeited Shares	Rs.10/- each	Rs. 16.853 Millions
	Total		Rs. 217.424 Millions

Note: (Of the above 24,12,134 equity shares of Rs. 10/- each issued for consideration otherwise than cash, of which 16,67,334 equity shares are issued as per the Scheme of Amalgamation). Consists of 39000 equity shares and 1760783 warrants (Previous year consists of 39000 equity shares and 160783 warrants)

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2010	31.03.2009	30.06.2008
		(12 Months)	(9 Months)	(12 Months)
SHAREHOLDERS FUNDS
1] Share Capital		217.424	217.424	202.304
2] Share Application Money		0.000	0.000	15.120
3] Reserves & Surplus		1821.094	1610.941	1589.421
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		2038.518	1828.365	1806.845
LOAN FUNDS
1] Secured Loans		899.727	1081.633	1003.293
2] Unsecured Loans		107.524	107.525	107.524
TOTAL BORROWING		1007.251	1189.158	1110.817
DEFERRED TAX LIABILITIES		137.347	123.563	105.538
TOTAL		3183.116	3141.086	3023.200
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		2195.568	2245.049	1361.420
Capital work-in-progress		21.751	20.224	925.368
INVESTMENT		226.023	216.714	216.665
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	515.988	371.479	291.612
	Sundry Debtors	315.046	305.453	195.132
	Cash & Bank Balances	94.331	74.978	59.184
	Other Current Assets	8.372	7.485	2.095
	Loans & Advances	201.677	193.095	182.198
Total Current Assets		1135.414	952.490	730.221
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	332.730	252.477	195.304
	Other Current Liabilities	48.996	26.709
	Provisions	29.332	33.508	37.910
Total Current Liabilities		411.058	312.694	233.214
Net Current Assets		724.356	639.796	497.007
MISCELLANEOUS EXPENSES		15.418	19.303	22.741
TOTAL		3183.116	3141.086	3023.200

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010 (12 Months)	31.03.2009 (9 Months)	30.06.2008 (12 Months)
	SALES
		Income	3861.949	2538.736	2141.465
		Other Income	4.890	8.547	6.851
		TOTAL (A)	3866.839	2547.283	2148.316
Less	EXPENSES
		Cost of Material Consumed	2431.132	1557.896	1247.807
		Manufacturing Expenses	420.534	272.759	287.063
		R and D Expenses	32.912	27.844	0.000
		Marketing and Selling Expenses	276.291	156.681	263.743
		Administrative Expenses	186.824	119.453	0.000
		Miscellaneous Expenditure Written off	6.295	2.179	4.655
		Foreign Exchange Fluctuations	[115.239]	89.042	0.000
		TOTAL (B)	3238.749	2225.854	1803.268
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		628.090	321.429	375.048
Less	FINANCIAL EXPENSES (D)		163.998	145.383	119.725
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		464.092	176.046	225.323
Less/ Add	DEPRECIATION/ AMORTISATION (F)		158.967	97.479	97.209
	PROFIT BEFORE TAX (E-F) (G)		305.125	78.567	128.114
Less	TAX (I)		65.640	27.715	36.770
	PROFIT AFTER TAX (G-I) (J)		239.485	50.852	91.344
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		412.336	392.116	NA
Less	APPROPRIATIONS
		Transfer to General Reserve	6.000	1.300	NA
		Provision for Dividend	25.071	25.071	NA
		Provision for Dividend tax	4.261	4.261	NA
	BALANCE CARRIED TO THE B/S		616.489	412.336	NA
	Basic and Diluted Earnings Per Share (Rs.)		11.94	2.54	4.56

QUARTERLY RESULTS

PARTICULARS	30.06.2010	30.09.2010
Type	1^st Quarter	2^nd Quarter
Net Sales	1093.280	1002.080
Total Expenditure	986.060	887.660
PBIDT (Excl OI)	107.220	114.420
Other Income	1.580	20.800
Operating Profit	108.800	135.230
Interest	31.930	27.960
Exceptional Items	0.000	0.000
PBDT	76.870	107.270
Depreciation	43.980	38.760
Profit Before Tax	32.900	68.510
Tax	13.700	15.320
Provisions and contingencies	0.000	0.000
Profit After Tax	19.200	53.190
Extraordinary Items	0.000	0.000
Prior Period Expenses	0.000	0.000
Other Adjustments	0.000	0.000
Net Profit	19.200	53.190

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	30.06.2008
		(12 Months)	(9 Months)	(12 Months)
PAT / Total Income	(%)	6.19	1.99	4.25
Net Profit Margin (PBT/Sales)	(%)	7.90	3.09	5.98
Return on Total Assets (PBT/Total Assets}	(%)	9.16	2.46	6.13
Return on Investment (ROI) (PBT/Networth)		0.15	0.04	0.07
Debt Equity Ratio (Total Liability/Networth)		0.70	0.82	0.13
Current Ratio (Current Asset/Current Liability)		2.76	3.05	3.13

LOCAL AGENCY FURTHER INFORMATION

History

Incorporated as a private limited company in 1991, Granules India was converted into a public limited company in Feb.'93. It commenced its operations in Apr.'91 as a merchant exporter of bulk drugs like paracetamol, guaifenesin and chloro pheniramine maleate.  

The company exports to the US, Europe, Mexico and Hongkong. Since 1992, subject concentrated on export of paracetamol powder. In Aug.'94, subject took over Triton Laboratories (TL), a group company from which subject was procuring the drugs for exports. Subject also acquired a sick unit which was manufacturing bulk drugs, from the Andhra Pradesh State Financial Corporation (APSFC) in Mar.'94.  

Subject implemented the ongoing project taken over from TL to manufacture bulk drugs like folic acid, salbutamol sulphate, brom pheniramine maleate and direct compression (DC) blends of paracetamol, through the process of granulation. The unit, an EOU, is located at Hyderabad, Andhra Pradesh. Commercial production of folic acid commenced in Aug.'95. It came out with a public issue in Sep.'95 to part-finance this project. 

Company has completed expansion of Guaifenesin capacity from 100 Mts to 240 Mts per annum. Company had developing new products like Brom Pheniramine Maleate and Chloro Pheniramine Maleate, and is in process of developing new bulk drug for the export market. Company is very much hopeful about company's performance due to expansion of project will be completed in the current year. 

The Company set up a 100% marketing subsidiary in US to enhance its exposure in the large pharmaceutical market in the world. The Gagillapur plant commences its commercial production of Line II(installed capacity 3200 MT) which was commenced its July,2003 and the remaining 4000 MTPA is expected to go on stream in the first half of 2003-04. The total project cost is Rs.300 millions.

Dividend

In view of the Company’s profitable performance, the Directors are pleased to recommend for approval of the shareholders, a dividend of 12.5% on 2,00,57,154 equity shares (face value of Rs.10 each) of the Company in respect of the financial year 2009-10. The dividend, if declared as above, would involve an outflow of Rs. 25.071 Millions towards dividend and Rs. 4.261 Millions towards dividend tax, resulting in a total outflow of Rs. 29.332 Millions. Under the Income Tax Act, 1961, the dividend will be tax free in the hands of the shareholders.

During the year, the Company was not required to transfer any unpaid / unclaimed dividends pertaining to the previous years to the Investor Education and Protection Fund.

Operating Results

The Company achieved a turnover of Rs.3861.949 Millions showing a growth of 14.1% compared to the previous year. The operating profit during the year was Rs.1010.300 Millions.

Funding

During the year, the Company has not obtained any external funding.

Subsidiary Companies

Granules USA Inc.

Granules USA Inc., a wholly-owned subsidiary company, operates for the marketing requirements of the Company in the U.S. During 2009-10, the subsidiary company achieved a turnover of Rs. 1048.600 Millions.

The relevant particulars of Granules USA Inc. and the consolidated final accounts for the period ended March 31, 2010, in accordance with the Accounting Standard AS-21 on Consolidated Financial Statements, read with Accounting Standard AS-23 on Accounting for Investment in Associates are appended to this Report.

GIL Lifesciences Private Limited

GIL Lifesciences Private Limited, a wholly-owned subsidiary of the Company has acquired land for setting up a unit for manufacture of APIs. The feasibility of setting up a project at this land is being examined.

Granules Singapore Pte Limited

The Company has not commenced any activity from this whollyowned subsidiary company.

Joint Venture Company

Granules-Biocause Pharmaceutical Company Limited

During 2009-10, Granules-Biocause Pharmaceutical Company Limited, the joint venture company achieved a total turnover of Rs.1383.000 Millions.

MANAGEMENT DISCUSSION AND ANALYSIS

Global Overview:

In 2009, the global pharmaceutical market grew 7.0% to $808.5 billion. The North American market, witnessed 5.5% growth, which is substantially stronger than the sluggish 1.4% growth in 2008. The emerging markets which include Asia, Africa, Australia and Latin America accelerated their already rapid growth by growing 15.9% and 12.7%, respectively.

Growth in the pharmaceutical market will be affected by several factors including the continuing geographic shift to the emerging markets, major shifts in pharmaceutical spending by the public sector and the dominance of generic drugs.

The “Pharmerging Markets”, which comprises of 17 emerging economies including China, India, Brazil and Russia, will constitute 46% of the growth in the global pharmaceutical market between 2008 and 2013 according to IMS Health. The pharmerging markets are growing faster than expected; in 2006, IMS predicted the top 7 pharmerging countries would contribute 20% to global pharmaceutical growth, however they provided 29% of the growth. The increase in the contribution rate is attributable to a growing GDP, expanded access to healthcare and stronger intellectual property (IP) rights.

China is the largest contributor to growth in this segment; it will provide an additional $40 billion in growth through 2013. China’s growth is due to the government’s $125 billion funding for healthcare and the government’s goal to have near universal healthcare by 2011. The next three biggest markets: India, Brazil and Russia will each provide anywhere from $5 billion to $15 billion in growth. While each of these countries has their own unique growth drivers; the overlapping reason for growth is due to a rising middle class and the proliferation of private insurance.

While the pharmerging markets offer great business potential; the complexities are daunting. Several countries have regulations which favour local firms while other countries still have weak IP rights. In addition, each one of these countries have vastly different regulatory requirements. Understanding the markets in each of these countries will be time consuming, however if a firm makes the effort, they will be rewarded with a lucrative market.

One of the biggest healthcare stories in the last year was the passage of universal health care in the U.S. The U.S. health care bill will have numerous implications for the world’s largest pharmaceutical market. Although all of the provisions in the bill will not be enacted for several years, the bill is already affecting the industry. Insurance companies are reducing costs by forcing patients to switch to generic drugs, which cost less. Also, since an additional thirty-four million Americans will have access to healthcare, there will be an opportunity for pharmaceutical companies to access a new revenue base. Another opportunity for the healthcare industry is reaching out to patients who will be more likely to go to their physician for preventative care.

While the U.S. healthcare plan will open up a new market, other countries including France, Germany, Turkey and Spain have announced plans to reduce drug spending growth including restricting access to certain care and reducing reimbursements. Austerity plans throughout Europe might spur other countries facing mounting deficits to take on similar actions as well.

Finally, generic drugs will continue to become a more popular alternative in the next several years. Products which generate more than $142 billion are expected to face generic competition in major developed markets over the next five years according to IMS Health. This will have major ramifications for the industry since the shift to lower-cost generics will reduce total drug spending by about $80 - $100 billion worldwide through 2014. The U.S. will carry the burden as nearly two-thirds of the total value of patents will expire in this time frame, with the peak expiration happening in 2011 and 2012.

Product Segments Developments

Paracetamol

Paracetamol (also known as acetaminophen) is the world’s most widely consumed analgesic, accounting for nearly 63% of overall consumption. Paracetamol is a safe, affordable and efficient product with millions of users throughout the world. The drug is used to reduce body pains, headaches and fevers.

Paracetamol is an off-patent product whose market continues to grow two to three percent by volume annually. The total annual market for paracetamol is estimated at approximately 105,000 tonnes, the highest consumption being in the U.S. and Europe. Global paracetamol capacity, which is predominately based in China and India, is estimated to be around 137,000 tonnes, a 74.5% utilisation rate.

Ibuprofen

Ibuprofen is a popular analgesic primarily used for arthritis relief and fever reduction. The drug is popular in North America and Western Europe, which account for nearly 60% of global sales. Sales of ibuprofen are rapidly growing as its popularity grows in other markets. In 2009, production increased by 4.5% over 2008, to slightly over 28,000 tonnes. Ibuprofen is a more complex analgesic to manufacture compared to paracetamol, which is why there are not as many suppliers. There are four manufacturers that control approximately 65.0% of the market. The two largest, BASF and Albemarle, are Western-based companies while the next two, Shasun and Granules Biocause, are based in Asia.

Guaifenesin

Guaifenesin is an off-patent product which helps loosen and liquefy mucus. Respiratory illnesses such as bronchitis and the common cold typically cause excess or thick mucus. Guaifenesin is the only expectorant approved by the FDA to treat these ailments. The drug helps loosen mucus and thin bronchial secretions to rid the bronchial passageways of mucus and make cough more productive. Guaifenesin is available in both long-acting and short-acting formulations and as a single ingredient or in combination with other active ingredients. Long-acting formulations are typically in tablet form and dosed every 12 hours. Short-acting or immediate release formulations are often in liquid form and are dosed every four to six hours.

Common products with guaifenesin include Mucinex and Robitussin DAC. These products were among the first to be granted OTC status by the U.S. FDA. The guaifenesin market is approximately 3,500 tonnes, with over 60.0% of sales coming from North America.

Metformin

Metformin (N, N-dimethylbiguanide), a prescription drug, is the first biguanide oral anti-diabetic agent to be approved by the FDA after phenformin (phenethylbiguanide) was banned in the U.S. in 1977. The annual production capacity for the drug is approximately 25,000 tonnes. Wanbury Limited, an Indian company, has an 8,500 tonne per annum production capability, the largest in the world.

Diabetes is lucrative market; the number of people with diabetes is expected to grow from 246 million to 380 million by 2025. The market opportunity has grown from $21.0 billion in 2006 to $24 billion in 2008 and is expected to grow to $34.5 billion by 2013 as more treatment options are released. The emerging markets are expected to be a major source of new diabetes cases as they adapt the western lifestyle; India and China alone have over 80 million cases of diabetes.

API Division

Overview

The Company’s API facilities are located at Bonthapally and Jeedimetla in Andhra Pradesh and in Jingmen, Hubei, China. The Bonthapally unit manufactures Paracetamol API while the Jeedimetla unit manufactures APIs such as Metformin, Methocarbamol, Guaifenesin and Phenazopyridine. The Jingmen unit manufactures Ibuprofen API.

Highlights, 2009-10

• Analyzed and optimized machine run time at all the facilities which directly led to higher monthly production rates
• Successfully increased production for several products at Jeedimetla
• Installed a new coal-based boiler at Bonthapally to support an increase in production
• Successfully completed over 20 regulatory agency and customer audits during the fiscal year
• Minimized the number of contract workers in order to improve quality

Road Ahead

• Install a dedicated, independent facility for special grades at Bonthapally
• Increase production at all locations through equipment and process upgrades
• Strict adherence to quality management systems through robust quality processes
• Continuous training for production floor personnel
• Continue proper planning of production schedules with equipment preventive maintenance

PFI Division

Overview

The Company’s PFI facilities at Gagillapur and Jeedimetla manufacture combination PFIs using multiple APIs. These PFIs have received regulatory approvals from major regulatory agencies such as the U.S. FDA, Australian TGA, Canadian TPD and German HA.

Highlights, 2008-09

· Achieved LEVEL 1A certification

· Increased utilisation by double digit growth rate at Gagillapur

· Experienced an upswing in multi-active PFIs

Road Ahead

· Target conversion of more PFI into finished dosages in 2010-11

· Strict adherence to quality management systems through robust quality processes

· Continuous training for shop floor personnel

· Proper planning of production schedules with equipment preventive maintenance

· Increase capacity by de-bottlenecking manufacturing processes.

Formulations Division

Overview

The Company’s facility at Gagillapur has an annual capacity of six billion tablets, and is designed to produce 12 billion tablets annually. The state-of-the-art plant has automated processes, robust infrastructure, superior quality systems and accreditations from the U.S. FDA, E.U. and World Health Organisation.

Highlights, 2008-09

· Received U.S. FDA approval for the Metformin 500 mg, 850 mg and 1,000 mg ANDA

· Signed several material contracts with MNCs

· Commissioned a low-volume PFI project

· Increased tablet encapsulation manufacturing capacity by adding additional lines

· Completed 13 audits

Road Ahead

· Targeted procurement of new coating equipment and new blister packing machine to augment customer requirements

· Will increase capacity utilisation as the current formulation contracts start the commercialisation process

· Will have low-volume PFI project commercialized by Q3FY11

Raw Materials Management

Overview

The Company’s bulk raw material procurement translated into competitive sourcing. The Company’s 100% exportorientation attracted zero-duty imports from China, France, Germany, Taiwan, Korea, etc., which were done following stringent audits.

Highlights, 2009-10

· Continue to implement just-in-time delivery, which has reduced raw material inventory

· Increased coordination between departments to ensure better planning for raw materials

· Renegotiated contracts based on quality and delivery performance

Road Ahead

· Build stronger vendor relationships in order to get a cost advantage and increase operational flexibility

· Assist vendors and help them in improve their quality standards

· Hold suppliers more accountable for their social and environmental impact

Research and Development

Overview

The Company’s R&D infrastructure represents an effective edge, reflected in the introduction of pioneering products and processes around a superior price-value proposition. The Company consistently invests in new product development as well as process improvement, leading to enhanced yield and profitability.

The Company’s R&D infrastructure specializes in the development of PFI and finished dosage products. The R&D

department offers end-to-end solutions for OTC-monograph, required for filing ANDAs. The Company is capable of developing and filing ANDAs/Dossiers in the U.S., Europe, Australia and other areas.

Highlights, 2009-10

· The Company invested Rs. 3.67 cr. in R&D, focusing on technology development and transfer for OTC products, OTC ANDA products, rapid release gels and Rx ANDA products

Road Ahead

Target is to file several more ANDAs during the fiscal year Anticipate approval for previously filed ANDAs.

Marketing

Overview

The Company enjoys a wide global presence in diverse, value-added and relevant segments, catering to the growing partnership needs of pharmaceutical majors in global environments.

Highlights, 2009-10

· Increased annualized API sales by 34.1% and finished dosages by 115.1% year over year

Road Ahead

· Maintain non-competing relationships with customers

· Scale volumes from existing customers

· Increase share in existing markets

· Enter Southeast Asia and Gulf Cooperation Council Countries

Operational Excellence

Overview

In order to serve the customers better, Granules adopted a holistic approach of excellence throughout the manufacturing chain. The Company has a dedicated team of Certified Lean Six Sigma Black Belts available to enhance the culture of lean manufacturing.

Highlights, 2009-10

· After a successful OE initiative, decided to create a dedicated department

· Increased the daily production rate for products at several facilities

· Identified methods to reduce the cost of manufacturing

· Reduced manufacturing variations which led to a lower number of rejected batches

Road Ahead

· Will continue to implement lean manufacturing process including identifying bottlenecks, improving yields and

· managing inventory

· Reduce waste by addressing effluent treatment and reprocessing costs

· Will explore reducing costs by introducing new technologies and exploring alternative processes

CONTINGENT LIABILITIES: (Rs. in Millions)

Particulars	31.03.2010
a) Claims against the company not acknowledgment as debts: Income tax Customs duty	21.093
b) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)	42.656
c) Letters of credit and Bank Guarantee issued by bank	181.273
d) Bills discounted with banks	789.338

 Fixed Assets:

• Land
• Buildings
• Plant and Machinery
• Computers
• Office Equipment
• Furniture and Fixtures
• Vehicles
• Technical Knowhow

AS PER WEBSITE:

Board of Directors:

Mr. C Nageswara Rao – Chairman, Medical Practitioner

He is a leading medical practitioner. He is the Chairman of the AP Medical Council, he has been a member of the All India Medical Council and was also on the Board of Hindustan Antibiotics Limited.

Mr. C Krishna Prasad - Managing Director

Granules India is promoted by Mr. C. Krishna Prasad, a technocrat with several years of experience in the pharmaceutical industry. Mr. Krishna Prasad is the Managing Director and is supported by an experienced Board of Directors

Mr. N R Ganti – Director

He is a management consultant with over 30 years of experience in banking and management. He is an MBA specializing in strategy and finance. He is a member of the team responsible for the company's long-term goals and objectives

Mr. L S Sarma – Director

\

He is an ex senior banker at IDBI. He has vast experience in financial matters and has also served on the board of Dena Bank. He is currently on the boards of other reputed companies

Mr. A P Kurian – Director

He is an eminent investment banker and is currently the Chairman of the Association of Mutual Funds of India. He also serves on the boards of a few well-known companies

Mr. Stephen R Olsen - Nominee Director

He has been Senior Vice President of Sales (America), Global Marketing and Research and Development of International Specialty Products Inc. (“ISP”), which is the indirect parent company of ISP Invest co LLC, and certain of its subsidiaries, including ISP Chemco LLC (“Chemco”), which is the holding company for ISP’s operating subsidiaries, since January 2006 and has been a director of Chemco since June 2005. He was previously Senior Vice President North America Sales and Marketing of ISP and Chemco and some of its subsidiaries from September 2004 until January 2006.

They are headquartered in Hyderabad, the pharmaceutical capital of India. They have the expertise in manufacturing APIs since 1984 and PFIs since 1993. They have been marketing their products in the United States since 1987.

Subject has posted a sales of about Rs. 1800.000 millions in 2005-06. Their strategic goal is to offer a complete vertical integrated solution.

The company is a producer of active pharmaceutical ingredients (API's) and pharmaceutical formulation intermediates (PFIs) with complete vertical integration. They support customers with unique value, extensive product range and a global network of associates. Their expertise in manufacturing Pharmaceutical Formulation Intermediates (PFIs), which are Directly Compressible Granules, has helped customers to move to the next level of outsourcing in the pharmaceutical industry.

The PFI plant is one of the biggest in the world with an annual capacity of 7200MT and a batch size of 6MT. The plant is approved by USFDA, German Health Authority, Canadian TPD and Australian TGA. GIL is also coming up with a state of the art tableting facility which will have a capacity of 12 Billion tablets. This new tableting facility will be operational by October 2007.

The company makes use of an intelligently integrated production processes in order to manufacture a broad assortment of products, there by supplying a wide range of products and service to their customers in a flexible and reliable manner. Their products can be used in a range of pharmaceutical applications, and they are constantly developing new products and variants to meet their customers' specific requirements.

Part of their commitment to the pharmaceutical industry is a high level of customer service: their product specialists, supported by application technologists, research scientists and regulatory advisers are able to provide immediate advice and customer support. By offering unique products and a high level of customer support, they can offer their customers the competitive advantage that is vital in the highly competitive pharmaceutical sector.

Their strategy is to adopt a geo-politically neutral stance which reinforces their role as a supply chain partner to their customers. They constantly conduct their selves in a manner that helps them to fully achieve their self-established standards and further enhance the image of GIL.

Promoter

The Managing Director, Mr. Krishna Prasad, is the chief promoter of Granules, bringing with him rich experience of over two decades in setting up and the management of pharmaceutical (bulk drugs) manufacturing units.

In 1984-85, he set up a small-scale unit for manufacturing of Acetaminophen/ Paracetamol that went on to become one of the largest Indian manufacturers of Acetaminophen/paracetamol and was an exporter to the US markets since 1988. Mr. Prasad, while marketing the product in US realized the potential for selling a value added version of the bulk active, known as Directly Compressible product.

Mr. Prasad had anticipated, way back in late 80's that major global pharmaceutical companies would outsource their manufacturing activities to countries like India with inherent cost advantages coupled with regulatory compliance skills and a vast pool of trained manpower.

Subject was incorporated in 1991 with an objective of becoming a preferred outsourcing partner for major pharmaceutical companies in the regulated market and there was no looking back since then.

Mr. Prasad, as the CEO and the Marketing chief at Granules, pioneered and popularized the concept of Pharmaceutical Formulations Intermediates (PFIs) as a cost efficient and extremely convenient product for the global formulations manufacturers. These PFIs are pre-processed blends of single or multiple APIs, ready to be compressed into tablets or filled into capsules. They represent an intermediate stage between APIs and formulations and their manufacture is referred to as granulation.

Subject is a fully integrated pharmaceutical formulations manufacturer.

Offering one-stop solutions to pharmaceutical companies. From the manufacture of several strategic APIs to multiple PFIs to finished dosages of tablets and capsules. Facilitating global pharmaceutical companies to offer affordable medicines to their consumers

At the company, it is not just important to be profitable for the moment, but to be on a sustainable basis. This sustainability is no longer an economic requirement, but an environmental one as well.

In view of this, the company has embarked on a number of environment-management initiatives like the following:

The implementation of 'Environmental Best Practices' at the company's Gagillapur plant (recognized by CII).

Delegation of eco-friendly Delegation of eco-friendly measures to employee levels.

The use of sophisticated equipment to collect the dust generated during process activities and material transfer.

Conversion of the entire plant into a non-smoking area.

Mile Stones

• 1991   - Trading of APIs.

• 1994   - Production of various APIs.

• 1995   - Venture into the manufacture of DC Paracetemol (PFI)

• 1996   - Targeting of OTC market in the US for Paracetemol PFI.

• 1998   - Expansion of PFI capacity.

• 2000   - Obtaining US FDA approval for PFI and other APIs.

• 2001   - Development of new PFIs such as Guaifenesin, Metformin and Ibuprofen etc.

• 2002   - Filing of new DMFs of the above PFIs and moving up of value chain in OTC products.

• 2003   - Setting up of the world's single largest PFI facility with a capacity of 7,200 TPA.

• 2004   - The only company in the world to manufacture combination PFIs on a commercial scale using different basic APIs with other excipients.

• 2004   - Addition of a Tableting facility with a capacity of one billion pieces per annum

• 2005   - Started construction of the Tableting facility with a capacity of 12 billion tablets.

• 2006   - Major expansion of Paracetamol facility, from a capacity of 3600 MT to 12000MT per annum.

• 2006   - Joint Venture with Hubei Biocause, China.

• 2007   - Finished dosage facility at Gagilapur.

• 2008   - Oracle ERP under implementation.

Activities

The company's robust environment management comprises the following:

· Wastewater analyses on effluent samples.

· A frequent test and monitor of the ground water, soil, ambient air, stacks and noise levels.

· Over the years, the company expects to strengthen its environment standards: a common effluent treatment plant will be reinforced by a cleaner technology to minimize liquid effluent, gaseous emission and solid waste.

Liquid effluents

They are separated into high TDS-high COD effluents and low TDS-low COD effluents High TDS-high COD effluents are collected separately at generation plants. Following primary treatment, they are evaporated; the residue is sent to the Hyderabad Waste Management Project for safe disposal.

Low COD effluents are collected in a common sump. Following homogenisation and pH adjustments, they are discarded to the CETP for onward treatment and disposal.

Hazardous solid waste management :

Hazardous solids from various production stages and effluent collection tanks are sent to the Hyderabad Waste Management Project for safe disposal.

Gaseous emissions

Gaseous emissions are scrubbed, cleaned and made harmless with suitable chemical reagents before they are released.

Green belt development

The planting of a green belt around the plant has helped neutralise pollution. They plan to construct a green building comprising natural light, natural cooling through roof garden on the terrace, use of environment-friendly fly ash cement and solar energy

Granules India Posts Record Revenue for a Quarter: Net Revenue of Rs. 1224.000 Millions Posted for Q3 FY’10

Friday, January 22, 2010

• Revenue of Rs. 1224.000 Millions, highest revenue achieved in a quarter by the Company
• Net profit of Rs 65.600 Millions
• Standalone turnover at Rs 1013.400 Millions

PRESS RELEASE

Hyderabad January 22, 2010

Granules India Limited, a fully backward integrated formulation manufacturer, announced financial results for its fiscal year 2010 third quarter ended December 31, 2009. On a consolidated basis, Granules posted revenue of Rs. 1224.000 Millions, an increase of 24.7% over the same period last year and a net profit of Rs. 65.600 Millions


Quarter ended December 31, 2009

• Net Sales: Rs. 1224.000 Millions, as compared to the same period last year at Rs. 981.400 Millions. The increase is attributed to higher production at the Company’s facilities and an increase in sales within the formulation division.
• Net Profit: Rs. 65.600 Millions, as compared to the same period last year at Rs. 04.900 Millions.
• EPS: Basic EPS was Rs. 32.700 Millions as compared to the same period last year at Rs. 02.500 Millions.

On a standalone basis, the Company achieved sales of Rs. 1013.400 Millions and a net profit of Rs. 58.700 Millions. This is the first time the standalone unit has crossed Rs. 100.000 Millions in sales.

“This was a record setting quarter due to strong performance from all the divisions. I am particularly excited about the formulation division, which continues to grow rapidly and now comprises over 9% of the sales. This division will ramp up significantly over the next few quarters as they commence work on several key contracts” said C. Krishna Prasad, Managing Director of Granules.

Granules Posts Record Revenue, Net Profit Increases 121%

Monday, October 26th, 2009

• Revenue of 964.400 Millions Highest revenue achieved in a quarter by the company
• Net profit of Rs 77.500 Millions
• Consolidated turnover at Rs 1145.500 Millions

PRESS RELEASE

Granules India Posts Revenue of Rs. 1179.000 Millions for Q2 FY11

– Revenue of Rs. 1179.000 Millions

- Net profit of Rs. 45.000 Millions.

- Standalone turnover at Rs. 1002.000 Millions

Granules India Limited, a vertically integrated formulation manufacturer, announced financial results for its fiscal year 2011, second quarter ended September 30, 2010. On a consolidated basis, Granules posted revenue of Rs. 117.9 Cr. and a net profit of Rs. 45.000 Millions

Hyderabad, Andhra Pradesh, October 28, 2010 /India PRwire/ -- Quarter ended September 30, 2010

· Net Sales: Rs. 1179.000 Millions. as compared to the same period last year at Rs. 1145.000 Millions.

· Net Profit: Rs. 45.000 Millions. as compared to the same period last year at Rs. 77.000 Millions.

· EPS: Basic EPS was Rs. 2.26 as compared to the same period last year at Rs. 3.86

On a standalone basis, the Company achieved sales of Rs. 1002.000 Millions and a net profit of Rs. 53.000 Millions

"We are continuing to diversify revenue from a division and product standpoint. The Company commercialized several finished dosage contracts this year and the division contributed nearly 20% of the revenue. From a product perspective, we have increased sales from ibuprofen, metformin and guaifenesin derived products. We will continue to take the necessary steps to increase the revenue mix from the portfolio of products so we are not dependent on one product." said C. Krishna Prasad, Managing Director of Granules.

Notes to Editor

About Granules India Limited (BSE: 532482, NSE: GRANULES)

Granules India Limited is a vertically integrated formulation manufacturer. The Company is a large-scale manufacturer of Finished Dosages (FDs), Pharmaceutical Formulation Intermediates (PFIs) and Active Pharmaceutical Ingredients (APIs), which are distributed in over 50 countries. The Company's operations and logistics expertise along with its scale allow Granules to provide customers high quality products across the pharmaceutical manufacturing value chain at a cost-effective price.

Hyderabad, July 28, 2010

Granules India Limited, a vertically integrated formulation manufacturer, announced several new leadership roles within the Company. Dr. Bhaskar Krishna Arumugam, who previously served as Chief Operating Officer, will serve as Chief Executive Officer. Mr. Pranesh Raj Mathur, who serves as Chief Financial Officer, will take on additional responsibilities as the President of the API Division. Mr. Harsha Chigurupati, who previously served as Chief Marketing Officer, will serve as Executive Director and Chief Strategic Officer.

Mr. C. Krishna Prasad will continue his role as Managing Director and will focus on the Company’s growth and long-term strategy. As CEO, Dr. Bhaskar Krishna will be directly responsible for the Company’s PFI and formulation divisions in addition to the Company’s overall performance; he will continue to report to the Managing Director. Mr. Mathur, who will continue to serve as CFO, will be responsible for the Company’s API Division along with several corporate functions. Mr. Mathur will report to the CEO. Mr. Chigurupati will focus on growth opportunities including evaluating strategic alternatives and diversifying the Company’s business.

“We decided to create these roles in order to ensure we are in the best position to continue growing. Our new reporting structure will create more accountability within the Company and will enable us to be more responsive and tackle market challenges more effectively. Dr. Bhaskar Krishna and Mr. Mathur, who have been key members in developing our strategy and have played an integral part in our success over the last several years, will continue to focus on growing our existing business while Mr. Chigurupati will explore ways to expand our business.” said C. Krishna Prasad, Managing Director of Granules.

About Granules India Limited

(BSE: 532482, NSE: GRANULES)

Granules India Limited is a vertically integrated formulation manufacturer. The Company is a large-scale manufacturer of Finished Dosages (FDs), Pharmaceutical Formulation Intermediates (PFIs) and Active Pharmaceutical Ingredients (APIs), which are distributed in over 50 countries. The Company’s operations and logistics expertise along with its scale allow Granules to provide customers high quality products across the pharmaceutical manufacturing value chain at a cost-effective price.

UNAUDITED FINANCIAL RESULTS - STANDALONE FOR THE QUARTER ENDED 30.09.2010

(Rs. in Millions)

Particulars	3 Months ended 30th Sept, 2010	Year to date figures for current half year ended 30th Sept, 2010
	Unaudited	Unaudited
Net sales / Income from Operations
Expenditure
a) (Increase)/decrease in finished goods
and work in progress	9.945	[31.775]
b) Consumption of Raw Materials	619.684	1218.091
c) Employee cost	75.450	138.064
d) Depreciation	38.761	77.236
e) Manufacturing Expenses	59.337	126.053
f) Administrative Expenses	32.118	61.268
g) Selling & Distribution Expenses	78.640	144.951
h) R & D Expenses	11.088	14.841
i) Other expenditure	1.392	2.784
Total	926.415	1751.614
Profit from Operations before Other Income, Interest & Exceptional Items (1-2)	75..668	100.711
Other Income	[1.388]	[2.047]
Profit before Interest and Exceptional Items	77.066	107.758
Interest and Finance charges	27.961	56.706
Profit after Interest but before exceptional items	49.083	101.052
Foreign Exchange Fluctuations (gain)/loss	[19.417]	1.687
Profit before taxation	68.510	99.385
Tax expense
- Current Tax Expense	6.883	13.033
- Deferred Tax Expense	8.438	14.128
Net Profit for the period	53.188	72.206
Paid-up share capital	200.572	200.572
(Face Value of Rs.10/- each)
Reserves excluding Revaluation Reserve	1893.300	1893.300
Basic Earnings per share (Rs.)*	2.65	3.60
Diluted Earning per share (Rs)	2.64	3.58
Public Shareholding
- No. of shares	12548775	12548775
- Percentage of shareholding	62.57%	62.57%
Promoters and promoter group
Shareholding
a) Pledged/Encumbered
Number of shares	400000	400000
Percentage of shares to promoter group	5.77%	5.77%
Percentage of shares to total capital	1.99%	1.99%
b) Non-encumbered
Number of shares	6535339	6535339
Percentage of shares to promoter group	94.23%	94.23%
Percentage of shares to total capital	32.58%	32.58%

* Not Annualised

1) The above results were reviewed by the Audit Committee and approved by the Board at its meeting held on 8th October, 2010

2) Foreign Exchange Fluctuations (gain) of Rs.19.417 Millions (net) for the year includes re-statement of foreign currency loans, receivables and payables. As per the amendment dated 31-3-2009 to Companies (Accounting Standards) Rules 2006, the enterprise is given the option either to continue with the provisions of Accounting Standard 11 - The Effects of Changes in Foreign Exchange Rates orcapitalise exchange differences (gain/(loss)) arising on reporting of long term foreign currency monetary items so far as they relate to the acquisition of a epreciable capital asset. The Company has opted to continue with the existing practice of recognising the exchange differences on long term foreign currency monetary items in the Profit and Loss Account.

3) The company has received 7 complaints from investors during the quarter 1st July, 2010 to 30th September, 2010 and all were resolved. No complaints were pending from previous quarter.

4) The Company operates only in the segment of Pharmaceuticals.

5) Figures are regrouped wherever necessary.

UNAUDITED BALANCE SHEET FOR THE PERIOD ENDED 30^TH SEPTEMBER 2010

(Rs. In Millions)

Particulars	Stand Alone For the Half year Ended 30.09.2010 (Unaudited)
Shareholders' Funds :
Capital	217..424
Reserves and Surplus	1893.300
Loan Funds	982.389
Deffered Tax Liability	185.013
Total	3278.125
Net Fixed Assets (incld. WIP)	2167.876
Investments	226.023
Current Assets, Loans and Advances
Inventories	541.453
Sundry Debtors	328.821
Cash and Bank Balances	107.406
Other Current Assets	8.780
Loans and Advances	223.635
Less: Current Liabilities and Provisions
Liabilities	338.890
Provisions	--
Miscellaneous Expenditure (not written off or adjusted)	13.021
Total	3278.125

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.45.44
UK Pound	1	Rs.70.61
Euro	1	Rs.58.63

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	5
--RESERVES	1~10	6
--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		49

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.