MIRA INFORM REPORT

Report Date :

07.12.2012

IDENTIFICATION DETAILS

Name :	MICRO LABS LIMITED
Registered Office :	27, Race Course Road, Bangalore - 560001, Karnataka
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	07.09.1973
Com. Reg. No.:	08-002401
Capital Investment / Paid-up Capital :	Rs. 252.000 Millions
CIN No.: [Company Identification No.]	U24232KA1973PLC002401
TAN No.: [Tax Deduction & Collection Account No.]	BLRM02191A
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Manufacturers, Importers, Exporters and Traders of pharmaceuticals, medicines and allied health care products.
No. of Employees :	Not Available

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 41000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and a reputed company having good track. The latest financial is missing from government department. However, general financial position is strong. Fundamental are healthy. Liquidity position appears to be good. Trade relation are reported to be fair. Business is active. Payment are reported to be regular and as per commitment. The company can be considered for normal business dealing at usual trade terms and condition.

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 – June 30, 2012

Country Name	Previous Rating (31.03.2012)	Current Rating (30.06.2012)
India	A1	A1

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

EXTERNAL AGENCY RATING

Rating Agency Name	CRISIL
Rating	AA – (Cash Credit)
Rating Explanation	High Degree of safety and very low credit risk.
Date	15.11.2011

Rating Agency Name	CRISIL
Rating	AA- (Long Term Bank Loan Facility)
Rating Explanation	High Degree of safety and very low credit risk.
Date	15.11.2011

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

LOCATIONS

Registered Office :	27 , Race Course Road , Bangalore-560001, Karnataka, India
Tel. No.:	91-80-22370452 / 22370451
Fax No.:	91-80-22370463 / 22256323
E-Mail :	yogesh@microlabs.in yog-krish@yahoo.co.in
Website :	www.microlabslimited.com
Head Office :	45/3, Fairfield Layout, Race Course Road, Bangalore- 560001, Karnataka, India
Corporate Office :	No. 303, A Wing, Queens Corner Apartments, No. 3, Queens Road, Bangalore-560 001, Karnataka, India
Tel. No.:	91-80-22269609 / 22268785 / 22267705
Fax No.:	91-80-22256323 / 22281627
E-Mail :	mlabblr@hotmail.com shankaran@microlabsltd.com
Website :	http://www.micro-group.com http://www.microlabsltd.com
Area :	5000 Sq. ft
Location :	Rented
Factory 1 :	92, Sipcot Industrial Complex, Hosur – 635 126, Tamilnadu, India
Tel No:	91-4344-276618 / 277261
Factory 2 :	RS 24/3 and 4, Thirubuvanai Village, Mannadipet Commune, Pondicherry, India
Tel No:	91-481-2640015 / 023
Fax No:	91-413-2644641
Factory 3 :	15/A, 2^nd Phase, Kumbalgodu Industrial Area, Bangalore – 560 074, Karnataka, India
Factory 4 :	S- 155/159, Verna Industrial Estate, Verna, Goa- 403722, India
Branches :	Located at: · Chennai · Indore · Aurangabad · Ghaziabad · Kolkata · Chandigarh · Secunderabad · Patna

DIRECTORS

As on 27.09.2012

Name :

Mr. Dilip Surana

Designation :

Managing Director

Address :

45/3, Fair Field Layout, Race Course Road, High Grounds, Bangalore-560001, Karnataka, India

Date of Birth/Age :

18.01.1966

Date of Appointment :

01.09.2007

Qualification :

B.Com

PAN No.:

AFKPS0253G

DIN No.:

00083030

Other Directorship:

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Date of cessation	Company/ LLP Status	Defaulting status
1	U24232KA1973PLC002401	MICRO LABS LIMITED	Managing director	01/09/2007	18/07/1994	-	Active	NO
2	L70101TN1992PLC022299	ARIHANT FOUNDATIONS & HOUSING LIMITED	Director	30/12/2005	30/12/2005	05/05/2010	Active	NO
3	U74999MH2007NPL168975	JAIN INTERNATIONAL TRADE ORGANISATION	Additional director	03/04/2007	03/04/2007	11/12/2010	Active	NO
4	U45201KA2007PTC042509	MICRO INFRASTRUCTURE INDIA PRIVATE LIMITED	Director	17/04/2007	17/04/2007	-	Active	NO
5	U24232KA2009PTC049781	MICRO CARSYSON PRIVATE LIMITED	Director	07/05/2009	07/05/2009	-	Active	NO
6	U24232KA2009PTC049861	MICRO DERMACEUTICALS PRIVATE LIMITED	Director	15/05/2009	15/05/2009	-	Active	NO
7	U24232KA2009PTC049994	MICRO EROS PHARMACEUTICALS PRIVATE LIMITED	Director	29/05/2009	29/05/2009	-	Active	NO
8	U24232KA2009PTC049993	MICRO NUTRACEUTICALS PRIVATE LIMITED	Director	29/05/2009	29/05/2009	-	Active	NO
9	U24232KA2009PTC050066	MICRO NOVA PHARMACEUTICAL PRIVATE LIMITED	Director	08/06/2009	08/06/2009	-	Active	NO
10	U24232KA2009PTC050065	MICRO OPTHALMIC PRIVATE LIMITED	Director	08/06/2009	08/06/2009	-	Active	NO
11	U40101KA2010PTC054250	MICRO INFRA POWER CORPORATION PRIVATE LIMITED	Director	28/06/2010	28/06/2010	-	Active	NO

Name :

Mr. Anand Surana

Designation :

Whole-time Director

Address :

45/3, Fair Field Layout, Race Course Road, High Grounds, Bangalore-560001, Karnataka, India

Date of Birth/Age :

24.03.1971

Date of Appointment :

01.04.2010

Qualification :

B.Com

PAN No.:

AMGPS5511A

DIN No.:

00192343

Other Directorship:

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Date of cessation	Company/ LLP Status	Defaulting status
1	U24232KA1973PLC002401	MICRO LABS LIMITED	Whole-time director	01/04/2010	25/02/2003	-	Active	NO
2	U72300KA1997PTC022610	VIM SOFT PRIVATE LIMITED	Director	11/11/2005	11/11/2005	-	Active	NO
3	U45201KA2007PTC042509	MICRO INFRASTRUCTURE INDIA PRIVATE LIMITED	Director	17/04/2007	17/04/2007	-	Active	NO
4	U45201KA2007PTC044602	DNR CORPORATION PRIVATE LIMITED	Director	21/10/2011	07/12/2007	-	Active	NO
5	U24232KA2009PTC049781	MICRO CARSYSON PRIVATE LIMITED	Director	07/05/2009	07/05/2009	-	Active	NO
6	U24232KA2009PTC049861	MICRO DERMACEUTICALS PRIVATE LIMITED	Director	15/05/2009	15/05/2009	-	Active	NO
7	U24232KA2009PTC049994	MICRO EROS PHARMACEUTICALS PRIVATE LIMITED	Director	29/05/2009	29/05/2009	-	Active	NO
8	U24232KA2009PTC049993	MICRO NUTRACEUTICALS PRIVATE LIMITED	Director	29/05/2009	29/05/2009	-	Active	NO
9	U24232KA2009PTC050066	MICRO NOVA PHARMACEUTICAL PRIVATE LIMITED	Director	08/06/2009	08/06/2009	-	Active	NO
10	U24232KA2009PTC050065	MICRO OPTHALMIC PRIVATE LIMITED	Director	08/06/2009	08/06/2009	-	Active	NO
11	U40101KA2010PTC054250	MICRO INFRA POWER CORPORATION PRIVATE LIMITED	Director	28/06/2010	28/06/2010	-	Active	NO
12	U45200KA2011PTC060147	INDU INFRACON INDIA PRIVATE LIMITED	Director	25/08/2011	25/08/2011	-	Active	NO

Name :

Mr. Prasanna Subbarao

Designation :

Director

Address :

92, 17^th Main Road, Banashankari Stage1, Srinagar, Bangalore-560050, Karnataka, India

Date of Birth/Age :

20.07.1948

Date of Appointment :

09.06.2007

DIN No.:

00084602

Other Directorship:

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Date of cessation	Company/ LLP Status	Defaulting status
1	L85110KA1987PLC008368	BAL PHARMA LIMITED	Whole-time director	06/08/1994	06/08/1994	-	Active	NO
2	U73100KA2001PTC029393	NOVOSYNTH RESEARCH LABS PRIVATE LIMITED	Director	10/08/2001	10/08/2001	-	Strike off	NO
3	U24232KA1973PLC002401	MICRO LABS LIMITED	Director	09/06/2007	09/06/2007	-	Active	NO

Name :

Mr. Amar Singh Sisodia

Designation :

Whole-time director

Address :

No. 245, 53^rd Cross, 4^th Block, Rajajinagar, Bangalore – 560010, Karnataka, India

Date of Birth/Age :

25.05.1949

Date of Appointment :

18.07.2011

DIN No.:

03584503

KEY EXECUTIVES

Name :	Mr. Yogesh Krishna Shenoy
Designation :	Secretary
Address :	51/16 20^th Cross, 20^th Main, Marena Halli, Vijaynagar, Bangalore-560040, Karnataka, India
Date of Birth/Age :	26.09.1952
Date of Appointment :	21.03.2005
PAN No.:	AGTPS0938C

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 27.09.2012

Names of Shareholders	No. of Shares
Ghewarchand Surana - HUF - B	950250
Dilip Surana	2039625
Dilip Surana HUF	2777250
Anand Surana	4816875
Bhawari Bai Surana	4982250
Archana Surana	4816875
Monica Surana	4811625
Anita Shiroya	5000
Shailesh Shiroya	250
Total	25200000

Equity Share Break up (Percentage of Total Equity)

As on 27.09.2012

Category	Percentage
Directors or relatives of Directors	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturers, Importers, Exporters and Traders of pharmaceuticals, medicines and allied health care products.

Products :

Product Description	ITC Code
Pharmaceutical Formulations	2942, 2309

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

· The Hong Kong and Shanghai Banking Corporation Limited, 7, Mahatma Gandhi Road, Bangalore – 560001, Karnataka, India

· Standard Chartered Bank, Raheja Towers, 6^th Floor, No. 26-27, M. G. Road, Bangalore – 560001, Karnataka, India

· Export Import Bank of India, WTC, Cuff Parade, Mumbai – 400005, Maharashtra, India

· Canara Bank, Industrial Finance Branch, No. 83, Rechmond Road, Bangalore - 560025, Karnataka, India

· State Bank of India, Bangalore Commercial Branch, Krishi Bhavan, Hudson Circle, Bangalore – 560 001, Karnataka, India

· Canara Bank, Anna Nagar Branch, Chennai, Tamil Nadu, India

· State Bank of India, Bangalore Commercial Branch, Krishi Bhavan, Hudson Circle, J .C. Road, Bangalore – 560001, Karnataka, India

· ABN Amro Bank

· Barclays Bank

· IDBI Limited, Bangalore Branch, IDBI House, No. 58, Mission Road, Bangalore-560027, Karnataka, India

· Standard Chartered Bank, Raheja Towers, Sixth Floor, No. 26 - 27, M. G. Road, Bangalore - 560001, Karnataka, India

Facilities :

Secured Loan	As on 31.03.2011 (Rs. in Millions)	As on 31.03.2010 (Rs. in Millions)
Working Capital Loans secured	3249.711	2129.772
Total	3249.711	2129.772
Unsecured Loan	As on 31.03.2011 (Rs. in Millions)	As on 31.03.2010 (Rs. in Millions)
Working Capital loans banks unsecured	595.977	134.693
Loans directors	73.958	0.000
Total	669.935	134.693

Banking Relations :	--
Auditors :
Name 1 :	Dagliya and Company Chartered Accountants
Address :	No.5 and 6, ‘L’ Block Unity Building, J C Road, Bangalore-560002, Karnataka, India
PAN.:	AAAFD6954E
Name 2 :	T D Jain and D I Sakaria Chartered Accountants
Address :	No.34, Keshava Nivas, 3^rd Floor, 1^st Main Road, Gandhi Nagar, Bangalore – 560009, Karnataka, India
PAN.:	AAFO2177L
Subsidiaries :	· Micro Infrastructure India Private Limited, India PAN No.: AAFCM2489K CIN No.: U45201KA2007PTC042509 · Micro Pharmaceuticals, Mexico · Brown and Burk (UK) Limited, United Kingdom · DNR Corporation Private Limited, India PAN No.: AACCD8007D CIN No.: U45201KA2007PTC044602 · Micro Nova Pharmaceuticals India Limited, Nigeria
Others Related Party :	· Indu Realtors, India PAN No.: AADFI2443L · MIS Builders and Developers, India PAN No.: AAPFM1090D · Health Initiatives, India PAN No.: AAFFH7852L · G D A Foundation, India PAN No.: AAATG0826A · Pyari Bai Chunnilalji Surana Charitable Trust, India PAN No.: AAATP6253G · Sri Ghewarchand Surana Chartible Trust, India PAN No.: AAATG9199C

CAPITAL STRUCTURE

As on 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
34000000	Equity Shares	Rs.10/- each	Rs.340.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
25200000	Equity Shares	Rs.10/- each	Rs.252.000 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2011	31.03.2010	31.03.2009
SHAREHOLDERS FUNDS
1] Share Capital		252.000	252.000	252.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		10004.972	7885.521	6147.580
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		10256.972	8137.521	6399.580
LOAN FUNDS
1] Secured Loans		3249.711	2129.772	2539.590
2] Unsecured Loans		669.935	134.693	0.000
TOTAL BORROWING		3919.646	2264.465	2539.590
DEFERRED TAX LIABILITIES		68.926	50.245	43.720
TOTAL		14245.544	10452.231	8982.890
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		4069.249	3709.746	3613.739
Capital work-in-progress		447.629	160.275	217.059
INVESTMENT		1288.808	325.465	284.530
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	2532.562	2270.610	1966.046
	Sundry Debtors	3345.728	2793.504	2858.901
	Cash & Bank Balances	1364.758	1445.867	428.276
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	4012.296	2268.700	1894.159
Total Current Assets		11255.344	8778.681	7147.382
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	2307.658	2085.955	629.132
	Other current liabilities	147.173	136.011	1966.152
	Provisions	360.655	381.115	460.869
Total Current Liabilities		2815.486	2603.081	3056.153
Net Current Assets		8439.858	6175.600	4091.229
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
FOREIGN CURRENCY MONETARY ITEMS		0.000	81.145	776.333
TOTAL		14245.544	10452.231	8982.890

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Income	14003.419	12074.570	10190.195
		Other Income	985.532	411.568	298.013
		TOTAL (A)	14988.951	12486.138	10488.208
Less	EXPENSES
		Consumption materials changes inventories	5830.606	4844.304
		Manufacturing service costs	727.732	544.668	8378.007
		Employee related Cost	2068.931	1711.773
		Administrative selling other Expenses	2792.761	2331.814
		Research development Expenditure	70.251	124.187
		TOTAL (B)	11490.281	9556.746	8378.007
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		3498.670	2929.392	2110.201
Less	FINANCIAL EXPENSES (D)		159.361	85.299	197.379
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		3339.309	2844.093	1912.822
Less/ Add	DEPRECIATION/ AMORTISATION (F)		454.651	0.000	421.441
	PROFIT BEFORE TAX (E-F) (G)		2884.658	2844.093	1491.381
Less	TAX (H)		632.713	450.014	175.911
	PROFIT AFTER TAX (G-H) (I)		2251.945	2394.079	1315.470
Less	APPROPRIATIONS
		Transfer to General Reserve			200.000
		Proposed Dividend	792.880	593.854	0.000
		Interim Dividend			201.600
		Tax on Dividend			34.262
	BALANCE CARRIED TO THE B/S		1459.065	1800.225	879.608
	EARNINGS IN FOREIGN CURRENCY
		Fob Value of Export	4975.457	4099.316	3468.731
		Others Earnings	103.659	21.372	0.000
	TOTAL EARNINGS		5079.116	4120.688	3468.731
	IMPORTS
		Raw Materials	1256.109	1082.328	705.419
		Packing Materials	17.460	37.954	30.241
		Capital Goods	204.640	50.461	65.845
	TOTAL IMPORTS		1478.209	1170.743	801.505
	Earnings Per Share (Rs.)		95.61	83.82	52.20

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	15.02	19.17	12.54
Net Profit Margin (PBT/Sales)	(%)	20.60	23.55	14.64
Return on Total Assets (PBT/Total Assets}	(%)	18.82	22.77	13.86
Return on Investment (ROI) (PBT/Networth)		0.28	0.35	0.23
Debt Equity Ratio (Total Liability/Networth)		0.66	0.60	0.87
Current Ratio (Current Asset/Current Liability)		4.00	3.37	2.34

LOCAL AGENCY FURTHER INFORMATION

Check List by Info Agents	Available in Report [Yes/No]
Year of Establishment	Yes
Locality of the Firm	Yes
Constitution of the firm	Yes
Premises details	Yes
Type of Business	Yes
Line of Business	Yes
Promoters background	Yes
No. of Employees	No
Name of Person Contacted	No
Designation of contact person	No
Turnover of firm for last three years	Yes
Profitability for last three years	Yes
Reasons for variation <> 20%	-
Estimation for coming financial year	No
Capital the business	Yes
Details of sister concerns	Yes
Major Suppliers	No
Major Customers	No
Payment Terms	No
Export / Import Details [If Applicable]	No
Market Information	-
Litigations that the firm / promoter involved in	-
Banking Details	Yes
Banking Facility Details	Yes
Conduct of the banking account	-
Buyer visit details	-
Financials, if provided	Yes
Incorporation details, if applicable	Yes
Last accounts filed at ROC	No
Major Shareholders, if applicable	Yes
Date of Birth of Proprietor/Partner/Director, if available	Yes
PAN of Proprietor/Partner/Director, if available	Yes
Voter ID No of Proprietor/Partner/Director, if available	No
External Agency Rating, if available	Yes

PRESS RELEASE

GSK, Teva in talks to buy Micro Labs' India business

Reghu Balakrishnan / Mumbai Apr 13, 2012, 00:21 IST

Multinational drug majors, who are leaving no stone unturned in their efforts to strengthen their India presence, are back in the buyout market, scouting for the next big M&A opportunity.

Pharma giant Glaxosmithkline (GSK) and generic player Teva Pharma, are in separate discussions to acquire the domestic business of Bangalore-based Micro Labs. Micro Labs’ domestic sales are about Rs 1,100 crore. Investment banking sources said Micro Labs promoters had asked Nomura to help find suitors.

According to sources, though both players are interested, a valuation mismatch may play spoilsport. Though company promoter Dilip Surana is looking for a valuation of seven-eight times sales, which would be about Rs 88000.000 millions, the potential buyers are unwilling to pay such a premium.

According to experts, Micro Labs is a good buyout target due to its strong domestic presence across speciality segments. It has a strong presence in cardiology, neurology, neuro psychiatry, orthopaedics, gynaecology and diabetics. The privately held company has a revenue of about Rs 28000.000 millions

However, Dilip Surana, chairman and MD, Micro Labs, has denied any sale plan. He said, “These is purely market speculation and is totally baseless. We have no plans, as such, to sell our formulation units.” Spokespersons from GSK and Teva said the companies did not want to comment on speculation. An email sent to Nomura did not elicit any response.

According to a recent PwC report, the Indian pharma industry is expected to touch $74 billion in sales by 2020.

Micro Labs, founded by G C Surana, is now under the leadership of Dilip Surana and director Anand Surana. With a strong focus in India, the company has presence in more than 30 countries and has 3,300 product registrations in various stages, according to the company website. The company has a team of 3,500 medical representatives. It is ranked among the top 20 in India, with a market share of 1.8 per cent, according to IMS December 2011.

According to an E&Y report, the aggregate disclosed deal value of M&As in the pharmaceutical sector surged from a meagre $1.2 billion in FY10 to $4 billion in FY11, reflecting a jump of more than 230 per cent. “Global pharmaceutical companies are no longer looking at acquisitions merely as a tool to achieve cost optimisation, but as a means to grow through portfolio expansion as they face the mounting pressure of several drugs going off patent in mature markets,” the report added.

OPERATIONAL REVIEW:

The Pharmaceutical Industry this year boasts a progressive and impressive value growth of 15.5%, according to IMS March 2011(Retail Stores Audit). While the industry sustained its performance with a set of new introductions, upward price revision and encouraging contribution from existing products, it notched up a hike due to mergers and acquisitions which have been boost masters for the period. Pharma market having predominance in focus on retail is now shifting places with hospital sector that shows very high growth. A fast-growing change in the mindset of the industry is experiencing some strategic intent by the players, raising the growth expectations higher to the next level. An observation made by IMS, shows a progressive trend from a product-centric approach to marketing centric initiatives. The company ranks 20 amongst 300 top listed Pharmaceutical Companies in India.

HIGHLIGHTS:

1. The Company’s brand ‘DOLO’ won the “Best Managed Brand” for presenting a case study on Product Life Cycle at the Institute of Pharmaceutical Healthcare Management and Research’s conference organized by CMARC in 2010.

2. The Company also won “Quality Excellence Awards” by IDMA for 2011 for its plants at a. Baddi Gold b. Eye Drops Plant at Bommasandra Silver c. Cephalosporin Plant at Bommasandra Silver d. Goa Silver The Company’s education program ‘Micro Knowledge Academy’ conducted more than 850 CMEs which witnessed a healthy participation of 30 to 40 Doctors in each of the CMEs. This is a tremendous progress for this project as it provides a platform for more than 34,000 doctors to impart, educate and share their medical experiences across the country. Under the ‘Micro Knowledge Academy’, the Company released the 10th Book for Diabetes titled ‘Diabetes Care in India Today…. And by 2025?’ various other titles were covered in 9 publications under the same segment during 2002 to 2010 that are released every year. During the period under review, the Company launched various new products namely Gramocef – O Plus, Micropenam, Beta Anxit, Micropride, Micronac, Nepafenac, Extralube, BFN Bromfenac, Travo Z, Nusoft, Olmat – AMH, Fenovas, Voglinorm – M, Erophyline, Divon MR, Linosept, Faronac and Microcort 6.

INTERNATIONAL OPERATIONS:

Global business of the Company has begun to yield predictable returns due to the focussed work done over the past decade. International sales turnover grew by 16.5% over the previous year. The Companys’ Global business is positioned to take advantage of all the three core segments worldwide- viz. Emerging Markets, Regulated Market and Institutional Business.

Emerging Markets:

The Company has consolidated its position in many markets across Asia, CIS and Central America. Over 20 products were launched in these markets, which in turn will result in for a quantum increase in sales revenue in the coming years. During the year under review, a front end for marketing in terms of new specialized divisions were set up in Sudan, Vietnam, Nigeria, Philippines, Ivory Cost. The foray into the chronic segment (Cardiology and Diabetes) though laborious and long in gestation, will provide more predictable business in the near future.

Regulated Market:

The Company has set up its own marketing and sales operations in U. K and 2012 will be operating directly in Germany, France and U.S.A. Several new relationship and strategic alliances have been signed up with large MNC and Generic Companies in U.S.A., Canada, Australia, Croatia, Germany, U K, France and Netherlands. The Company has also been successful in maintaining its sales position on key products in New Zeland. Over 15 new EU CTD applications were filed in EU and 7 ANDA’s in U.S.A. including one first to file and one PIV invalidation filing. Mefanamic, our first product in the U.S.A., received overwhelming response (marketed by our partner in U.S.A) and the Company was able to have more than 50% of the market share. Institutional Business: The Company has received several approvals for products from WHO, UNICEF, PEPFAR in the ARV, Anti- T.B, Anti Malarial segment and we expect a quantum jump in this business. API: The API business received its first COS (Certificate of Suitability) from the EU Authorities (EDQM) for Ebastine. Over 8 DMF’s have been filed with EDQM, Health Canada and the grant for approval for the API’s will enable the Company to become a fully integrated player in the regulated markets, for key generic products.

PROSPECTS:

Indian Pharmaceutical market is practically the second highest growth amongst all the Pharmerging markets which is also the reason, of it being a market of choice for both global and local players. The factors that lead to the growth were Companies that were expanding into newer geographies, smaller towns and cities, newer therapies, high growing rate of hospitals, newer molecules and focus on brand building.

According to the IMS Prognosis Report, the Indian Pharmaceutical Market is expected to grow at about 15% in the next 3 years resulting in a lot of excitement and increasing opportunities and competition in the market place. Companies will have to adopt unique strategies to grow and maintain their market share. Productivity Improvement, Brand Building, Building relations with key customers and Execution Excellence will pave the way for achieving the road map for the Company to reach 1 Billion US$ mark by 2013-14. Launch of new products with high potentials and with the renewed focus on the existing Brands, the Company is set to achieve this. New

Projects:

The Company has embarked upon setting up new facilities at:

1. Goa- involving capital investment of Rs.1000.000 Millions to manufacture oral solid dosage forms to add new capacity of 2 billion tablets per annum for the regulated market.

2. Bommasandra Plant: Expansion of Eye Drop facility involving capital investment of Rs. 700.000 Millions.

3. Sikkim- involving capital investment of Rs. 1500.000 Millions to manufacture oral solid dosage forms for creating an additional capacity of 3 billion tablets for the domestic market.

FIXED ASSETS

· Land

· Factory and Other Building

· Lease Hold Building

· Plant and Machinery

· Electrical Installations

· Material Handling Equipments

· Air conditioner

· Boilers and Generators

· Effluent Treatment Plant

· Weighing Balances

· Furniture and Fixtures

· General Ventilation Systems

· Laboratory Equipment

· Office Equipments

· Pollution Control Equipments

· Refrigerators

· Trade Marks

· Computer

· Vehicle

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

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.54.47
UK Pound	1	Rs.87.63
Euro	1	Rs.71.12

INFORMATION DETAILS

Report Prepared by :

MRI

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	8
--RESERVES	1~10	8
--CREDIT LINES	1~10	7
--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	NO
--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
-	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.