MIRA INFORM REPORT

Report Date :

11.06.2011

IDENTIFICATION DETAILS

Name :	SOLVAY PHARMA INDIA LIMITED
Registered Office :	271, Business Park, 6^th Floor, Model Industrial Colony, Off Aarey Road, Goregoan (East), Mumbai – 400063, Maharashtra
Country :	India
Financials (as on) :	31.12.2010
Date of Incorporation :	24.01.2000
Com. Reg. No.:	11-123813
Capital Investment / Paid-up Capital :	Rs.50.497 millions
CIN No.: [Company Identification No.]	L24200MH2000PLC123813
TAN No.: [Tax Deduction & Collection Account No.]	MUMS41078C
PAN No.: [Permanent Account No.]	AABCD0322J
Legal Form :	A Public Limited Liability Company. The Company’s Shares are listed on Stock Exchange
Line of Business :	Manufacturer of Bulk Drugs
No. of Employees :	700 Approximately

RATING & COMMENTS

MIRA’s Rating :

A (67)

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 6637044
Status :	Very Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and a reputed 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. Satish
Designation :	Accountant
Contact No.:	91-22-42447400
Date :	10.06.2011

LOCATIONS

Registered Office :	271, Business Park, 6^th Floor, Model Industrial Colony, Off Aarey Road, Goregoan (East), Mumbai – 400063, Maharashtra, India
Tel. No.:	91-22-28717400/42447400
Fax No.:	91-22-28717499/42447499
E-Mail :	info@solvaypharma.co.in malhotra@solvaypharma.co.in satish.kulkarni@abbott.com manish.mestry@abbott.com
Website :	http://www.solvaypharma.co.in
Divisional Office :	Located At: New Delhi West Bengal Tamilnadu Mumbai
C and F Centres/Depots:	Located At: Gujarat Haryana Karnataka Kerala Chandigarh Punjab Orissa Tamilnadu Delhi Uttaranchal Assam Andhra Pradesh Madhya Pradesh Rajasthan West Bengal Uttar Pradesh Mumbai Bihar Chattisgarh Jharkhand

DIRECTORS

AS ON 31.12.2010

Name :	Mr. Roland Kaut
Designation :	Director
Name :	Mr. Niteen B Gadgil
Designation :	Director
Name :	Mr. Roger Kearns
Designation :	Director
Name :	Mr. D G Rajan
Designation :	Director
Name :	Mr. S N Talwar
Designation :	Director
Name :	Mr. M S Grewal
Designation :	Director
Name :	Mr. Olivier Du Roy
Designation :	Alternate Director To Roger Kearns
Name :	Dr. Dominique Baum
Designation :	Managing Director ( upto 31.03.2009)

KEY EXECUTIVES

Name :	Mr. Manish A Mestry
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 31.03.2011

Category of Shareholder	Total No. of Shares	% of total No. of Shares
(A) Shareholding of Promoter and Promoter Group
(1) Indian
(2) Foreign
Bodies Corporate	4,486,576	88.85
Sub Total	4,486,576	88.85
Total shareholding of Promoter and Promoter Group (A)	4,486,576	88.85
(B) Public Shareholding
(1) Institutions
Financial Institutions / Banks	348	0.01
Foreign Institutional Investors	383	0.01
Sub Total	731	0.01
(2) Non-Institutions
Bodies Corporate	17,436	0.35
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 million	520,397	10.31
Individual shareholders holding nominal share capital in excess of Rs. 0.100 million	18,562	0.37
Any Others (Specify)	6,004	0.12
Clearing Members	548	0.01
Non Resident Indians	3,798	0.08
Directors & their Relatives & Friends	1,658	0.03
Sub Total	562,399	11.14
Total Public shareholding (B)	563,130	11.15
Total (A)+(B)	5,049,706	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	-	-
(1) Promoter and Promoter Group	-	-
(2) Public	-	-
Sub Total	-	-
Total (A)+(B)+(C)	5,049,706	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of Bulk Drugs

Products :

ITEM CODE NO.	PRODUCT DESCRIPTION
2942001	Dydrogesterone IP
2942001	Betahistine Dihydrochloride
292250.00	Isoxsuprine Hydrochloride

Terms :

Selling :

Cash, Credit

Purchasing :

Cash, Credit

PRODUCTION STATUS AS ON (31.12.2010 )

Particulars	Unit	Actual Production
Drugs and Pharmaceuticals
Tablets and Capsules	Nos.	3200
Orals and Parenterals	Kiloliters	62
Finished goods Purchase
Tablets and Capsules	Nos.	829
Orals and Parenterals	Kiloliters	854
Solids including creams	Tonnes	1

NOTES:

• Licensed capacity is not indicated as industrial licensing for all formulations stands abolished in terms of Press Note No. 4 (1994 series) dated October 25, 1994 issued by the Department of Industrial Development, Ministry of Industry, Government of India.
• ++ Production includes quantities manufactured by third parties on loan licence basis.

@ Purchased for resale	Year ended Year ended December 31, 2010 Rs. In Millions	Year ended Year ended December 31, 2009 Rs. In Millions
Tablets/capsules	319.273	290.028
Orals and Parenterals	309.015	251.719
Solids including creams	5.748	6.904
TOTAL	634.036	548.651

• The closing stocks are after adjustments for obsolescence, shortages and free issues. Closing stock figures, if derived from opening stock plus production /purchases and less sales would therefore be different.
• Figures for production, purchases, opening and closing stock exclude physician sample packs.

GENERAL INFORMATION

Customers :	Manufacturer
No. of Employees :	700 Approximately
Bankers :	ABN-AMRO Bank N.V. Hongkong and Shangai Banking Corporation Limited, Goregaon (East), Mumbai ICICI Bank Limited State Bank of India HDFC Bank Limited The Royal Bank of Scotland
Facilities :	--

Banking Relations :	--
Auditors :
Name :	Deloitte Haskins and Sells Chartered Accountant
Address :	12, Dr. Annie Besant Road, Opposite Shiv Sagar Estate, Worli, Mumbai – 400018, Maharashtra, India
Ultimate Holding Company :	· Abbott Laboratories S.A., U.S.A. w.e.f. February 16, 2010 · Solvay S.A. upto February 15, 2010
Holding Company :	· Abbott Healthcare Limited (Formerly Solvay Healthcare Limited.) · British Colloids Limited · Abbott Capital India Limited U.K.
Fellow Subsidiaries :	· Abbott Products Operations AG (Formerly Solvay Pharmaceuticals Marketing and Licensing AG) · Abbott Products GmbH (Formerly Solvay Pharmaceuticals GmbH) · Abbott Products SAS (Formerly Solvay S.A. France) · Abbott Products Singapore Pte Limited. (Formerly Solvay Singapore Pte Limited) · Abbott India Limited w.e.f. February 16, 2010 · Abbott Biologicals BV (Formerly Solvay Biologicals BV, The Netherlands) · Solvay Specialities India Private Limited upto February 15, 2010 · Solvay Vishnu Barium Private Limited upto February 15, 2010

CAPITAL STRUCTURE

AS ON 31.12.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
5500000	Equity Shares	Rs. 10 each	Rs.55.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
5049706	Equity Shares	Rs. 10 each	Rs.50.497 millions

NOTE :

Of the above:

2,496,634 Equity Shares are held by Abbott Healthcare Limited (Formerly Solvay Healthcare Limited)

1,009,942 (31.12.2009: Nil) Equity Shares are held by Abbott Capital India Limited

980,000 Equity Shares are held by British Colloids Limited [The ultimate holding company is Abbott Laboratories S.A., U.S.A. w.e.f. February 16, 2010; the ultimate holding company was Solvay S.A. upto February 15, 2010]

Of the above, 5,049,606 Equity Shares of ` 10 each were allotted to the shareholders of Duphar-Interfran Limited on demerger of its pharmaceutical division, for consideration other than cash

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.12.2010	31.12.2009	31.12.2008
SHAREHOLDERS FUNDS
1] Share Capital		50.497	50.497	50.497
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		1608.764	1250.429	1042.156
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		1659.261	1300.926	1092.653
LOAN FUNDS
1] Secured Loans		0.000	0.000	0.000
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		0.000	0.000	0.000
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		1659.261	1300.926	1092.653
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		356.576	375.437	24.624
Capital work-in-progress		0.000	0.000	351.510
INVESTMENT		366.650	159.255	166.621
DEFERREX TAX ASSETS		26.052	18.038	27.953
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	535.106	339.480	568.395
	Sundry Debtors	150.004	156.319	182.230
	Cash & Bank Balances	511.455	529.249	69.429
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	257.121	137.453	180.939
Total Current Assets		1453.686	1162.501	1000.993
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	302.903	227.950	316.379
	Other Current Liabilities	9.061	7.538	5.903
	Provisions	231.739	178.817	156.766
Total Current Liabilities		543.703	414.305	479.048
Net Current Assets		909.983	748.196	521.945
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		1659.261	1300.926	1092.653

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.12.2010	31.12.2009	31.12.2008
	SALES
		Income	2947.297	2417.255	2003.382
		Other Income	58.651	37.757	51.045
		TOTAL (A)	3005.948	2455.012	2054.427
Less	EXPENSES
		Cost of Materials	1186.006	1068.465	862.827
		Personnel Expenses	337.392	264.757	213.767
		Operating and Other Expenses	692.012	482.014	462.338
		TOTAL (B)	2215.410	1802.706	1538.932
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		790.538	652.306	515.495
Less	FINANCIAL EXPENSES (D)		0.075	0.024	0.122
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		790.463	652.282	515.373
Less/ Add	DEPRECIATION/ AMORTISATION (F)		32.034	45.691	13.270
Add	Exceptional Item – Depreciation written back consequent to change in method		0.000	12.530	0.000
	PROFIT BEFORE TAX (E-F) (G)		758.429	606.591	502.103
Less	TAX (H)		249.939	206.311	174.063
	PROFIT AFTER TAX (G-H) (I)		508.490	400.280	328.040
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		1021.702	853.457	661.609
Less	APPROPRIATIONS
		Transfer to General Reserve	50.849	40.028	32.804
		Dividend	128.768	100.994	88.370
		Tax on Dividend	21.387	91.013	15.018
	BALANCE CARRIED TO THE B/S		1329.188	1021.702	853.457
	IMPORTS
		Raw Materials	635.990	200.192	601.533
		Finished Goods	44.983	41.670	66.419
	TOTAL IMPORTS		680.973	241.862	667.952
	Earnings Per Share (Rs.)		100.70	79.27	64.96

QUARTERLY RESULTS

PARTICULARS	30.06.2010	30.09.2010	31.12.2010	31.03.2011
	1^st Quarter	2^nd Quarter	3^rd Quarter	4^th Quarter
Net Sales	739.440	841.870	760.330	808.930
Total Expenditure	508.770	587.420	662.390	595.270
PBIDT (Excl OI)	230.670	254.450	97.940	213.660
Other Income	7.990	10.740	10.600	15.160
Operating Profit	238.660	265.190	108.540	228.820
Interest	0.030	0.040	0.010	0.020
Exceptional Items	0.000	0.00	0.000	(56.400)
PBDT	238.630	265.150	108.530	172.400
Depreciation	7.970	8.030	8.170	7.270
Profit Before Tax	230.660	257.120	100.360	165.130
Tax	76.500	84.800	31.270	53.030
Provisions and contingencies	0.000	0.000	0.000	0.000
Profit After Tax	154.160	172.320	69.090	112.090

KEY RATIOS

PARTICULARS		31.12.2010	31.12.2009	31.12.2008
PAT / Total Income	(%)	16.91	16.30	15.96
Net Profit Margin (PBT/Sales)	(%)	25.73	25.09	25.06
Return on Total Assets (PBT/Total Assets}	(%)	41.89	39.44	48.95
Return on Investment (ROI) (PBT/Networth)		0.45	0.46	0.45
Debt Equity Ratio (Total Liability/Networth)		0.32	0.31	0.43
Current Ratio (Current Asset/Current Liability)		2.67	2.80	2.08

LOCAL AGENCY FURTHER INFORMATION

SUNDRY CREDITORS DETAILS

Rs. In Millions

Particulars	31.12.2010	31.12.2009	31.12.2008
Sundry Creditors	302.903	227.950	316.379

MANAGEMENT DISCUSSION AND ANALYSIS

The business of the Company continues to be pharmaceuticals, its only segment of business.

Industry structure and developments

In the last two years, though most of the matured economies were adversely impacted by Global recession there was hardly any impact on lndian economy. It is expected to grow by 8.5% in 2011. Considering present scenario, the growing inflation, high fiscal deficit level, infrastructure constraints, downward trend in foreign direct investments, might affect the growth trajectory of the economy in the near future. The year 2010 was second successive year of strong growth of 16.5% for the Pharmaceutical Industry. It is now the third largest in the world in terms of volume and stands 14th in terms of value. To ensure sustained growth serious initiative are necessary to develop healthcare infrastructure for rural masses on the part of both Government and Pharma Industry

Opportunities and threats

Looking healthier on a strong dose of global alliances, Indian Pharmaceutical and healthcare sectors have repeatedly hit headlines this year on account of mergers and acquisitions. Their company was also part of those headlines. These may well be steps towards the bigger role Indian Pharma and healthcare sector seek globally in the coming years. The domestic market which is currently growing at the rate of 16+ per cent is expected to accelerate furter in the coming times. Both the market segments, Acute and Chronic, are showing a healthy growth, though there is a clear trend of moving towards chronic therapies. Similarly, preventive medical care is getting increasing importance, and hence, Vaccines have emerged as one of the most lucrative segments of the industry. The domestic vaccine market has recorded a growth of 15% in the last fiscal year and is expected to grow 15-20% over the following years. The Pharma Industry in India also face challenges from factors like effects of new product patent regulations, drug price control, regulatory reforms, infrastructure development, quality management and R & D productivity. The challenge of counterfeit and spurious drugs is still daunting and remains effectively unresolved. On the broader regulatory horizon, the imminent major events like introduction of GST, new Direct Tax regime as also the Companies Act modifications are certain to pose a challenge to all the industries, Pharma included.

Company's Performance

The Company achieved sales of Rs. 3020 millions in 2010. The sales for the year showed a healthy 22% growth over last year. During the year the Company introduced two new products “Solfe^TM” an Iron supplement and “AcuvertTM” an anti-emetic and anti-nauseant. During the year 2010 all the products of the Company performed well. Duphaston® maintained the 1st rank contributing 23% of the total Company turnover. Personal costs and other expenses showed an upward trend from the previous year on the parameter of % to sales. Personal costs to sales ratio showed an increase of 0.4%-points over the previous period mainly driven by the expansion of the sales force while other expenses as a percentage to sales went upto 23.5% from last periods 19.9% mainly owing to higher marketing spending and to a lesser extend owing to merger process. As the exchange rates improved in favour of the company, the manufacturing costs to sales were lower as compared to the previous period costs to sales ratio.

Outlook

The Company continues to lay emphasis on sustainable growth through ethical means. While there is an element of uncertainty in the economy and business, the Company’s endeavor is to accelerate operational growth in line with the industry growth both in terms of turnover and profitability. A stable and growing urban demand coupled with the unexploited market potential, especially in the rural markets, which they will try to tap in the coming years, bodes well for the future of the Company.

FIXED ASSETS

Tangible

• Building
• Plant and Machinery
• Furniture and Fixtures
• Vehicles

In Tangible Assets

• Trade Marks
• Computer Software

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sTheces including but not limited to: The CThets, 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] CThet 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 :

The 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.

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

CONTRAVENTION

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

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.44.72
UK Pound	1	Rs.72.93
Euro	1	Rs.64.72

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	7
--RESERVES	1~10	8
--CREDIT LINES	1~10	8
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		67

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

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.