MIRA INFORM REPORT

Report Date :

21.12.2012

IDENTIFICATION DETAILS

Name :	VIVIMED LABS LIMITED
Registered Office :	Plot No.78 – A, Kolhar Industrial Area, Bidar – 585 403, Karnataka
Country :	India
Financials (as on) :	31.03.2012
Date of Incorporation :	22.09.1988
Com. Reg. No.:	08-009465
Capital Investment / Paid-up Capital :	Rs.809.340 Millions
CIN No.: [Company Identification No.]	L02411KA1988PLC009465
Legal Form :	A Public Limited Liability company. The company’s shares are listed on the Stock Exchange.
Line of Business :	Manufacturer and markets Specialty Chemicals predominantly for personal care and cosmetics industries and Pharmaceuticals.
No. of Employees :	1060 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

A (64)

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 14000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is an established company having fine track. Financial position of the company appears to be sound. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments. The company can be considered good for normal business dealings at usual trade terms and conditions.

NOTES :

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

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

INDIAN ECONOMIC OVERVIEW

India is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic liberalization, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, began in the early 1990s and has served to accelerate the country's growth, which has averaged more than 7% per year since 1997. India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly more than half of the work force is in agriculture, but services are the major source of economic growth, accounting for more than half of India's output, with only one-third of its labor force. India has capitalized on its large educated English-speaking population to become a major exporter of information technology services and software workers. In 2010, the Indian economy rebounded robustly from the global financial crisis - in large part because of strong domestic demand - and growth exceeded 8% year-on-year in real terms. However, India's economic growth in 2011 slowed because of persistently high inflation and interest rates and little progress on economic reforms. High international crude prices have exacerbated the government's fuel subsidy expenditures contributing to a higher fiscal deficit, and a worsening current account deficit. Little economic reform took place in 2011 largely due to corruption scandals that have slowed legislative work. India's medium-term growth outlook is positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. India has many long-term challenges that it has not yet fully addressed, including widespread poverty, inadequate physical and social infrastructure, limited non-agricultural employment opportunities, scarce access to quality basic and higher education, and accommodating rural-to-urban migration.

Source : CIA

EXTERNAL AGENCY RATING

Rating Agency Name	CARE
Rating	LONG TERM BANK FACILITIES : CARE A-
Rating Explanation	Having adequate degree of safety regarding timely servicing of financial obligation it carry low credit risk
Date	April, 2012

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 :	Plot No.78 – A, Kolhar Industrial Area, Bidar – 585 403, Karnataka, India
Tel. No.:	91-8482-232045
Fax No.:	91-8482-232045
E-Mail :	chanakya@vivimedlabs.com fahim.aslam@vivimedlabs.com yugandhar.kopparthi@vivimedlabs.com
Website :	www.vividmedlabs.com
Corporate / Head Office :	2^nd Floor, Veeranag Towers, Husiguda, Hyderabad – 500 007, Andhra Pradesh, India
Tel. No.:	91-40-27176005 / 27176006
Fax No.:	91-40-27172242 / 27150599
E-Mail :	info@vivimedlabs.com
Overseas Office :	CHINA Vivimed Labs Limited Address: Guangzhou Representative Office, 1259 Block C, China Hotel, Liuhua Road, Guangzhou, 510015 P.R. China Tel no.: +86 20 8626 6003 Fax No.: +86 20 8626 6903 UNITED KINGDOM Vivimed Labs Europe Limited Address: PO Box B3, Leeds Road, Huddersfield Wes Yorkshire, HD1 6BU, England Tel No.: +44 (0) 1484320500 Fax No.: +44 (0) 1484320300 e-mail: sales@vivimedlabs.com USA Vivimed Labs USA Inc Address: 1100 Cornwall Road, Suite 160, Monmouth Junction, New Jersey 08852, USA Tel No.: +1 732-398-0008 Fax No.: +1 732-398-0013 e-mail: sales@vivimedlabs.com
Warehouses :	Located at Bonthapally, Hydrabad, India Arnhen, Netherlands New Jersey, North Carolina (USA) Hong Kong, China
Plant Location: Specialty Chemicals Division: Pharma Division:	· 78/A, Kolhar Industrial Area, Bidar – 585403, Karnataka, India · Survey No. 202, 207/A, 207/E and 207/AA, Bonthapalty Village, Narsapur Mandal, Medax District – 502313, Andhra Pradesh, India · D 125 and 128, Phase III, Jeedimetla Industrial Estate, Hyderebad – 500055, Andhra Pradesh, India · Plot No. 25, Kundeshwari Village, Kashipur, Udham Sigh Nagar – 244 713, Uttranchal, India · D – 9, Industrial Area, Haridwar – 249 401, Uttranchal, India

DIRECTORS

As on 31.03.2011

Name :	Dr. V. Manohar Roa
Designation :	Chairman
Date of Birth/Age :	75 Years
Qualification :	Post Graduate in Veterinary Sciences
Name :	Mr. Subhash Varalwar
Designation :	Whole-time Director
Date of Birth/Age :	63 Years
Qualification :	Post Graduate in Chemical Engineering and a Management Graduate
Name :	Mr. Santosh Varalwar
Designation :	Chief Executive Officer and Managing Director
Date of Birth/Age :	49 Years
Qualification :	Management Graduate
Name :	Dr. M Bhagavantha Rao
Designation :	Independent Director
Date of Birth/Age :	67 Year
Qualification :	PHD in chemical engineering
Name :	Mr. Sandeep Varalwar
Designation :	Whole-time Director
Date of Birth/Age :	42 Years
Qualification :	Graduation in B. Pharmacy
Name :	Mr. S Raghunandan
Designation :	Whole-time Director
Date of Birth/Age :	50 Years
Qualification :	Science Post Graduate
Name :	Dr. Raj Kumar Dhar
Designation :	Whole-time Director
Date of Birth/Age :	56 Years
Qualification :	Post Doctoral
Name :	Mr. P V Rathnam
Designation :	Independent Director
Date of Birth/Age :	68 Years
Qualification :	Chartered Accountants
Name :	Mr. Chunduri Ramakrishna
Designation :	Independent Director
Name :	Dr. Peesapati Venkateswarlu
Designation :	Independent Director
Name :	Mr. Srinivas Chidambaram
Designation :	Nominee Director
Name :	Mr. Nixon Patel
Designation :	Independent Director

KEY EXECUTIVES

Name :	Mr. Fahim Aslam Khan
Designation :	Company Secretary and Compliance Officer
AUDIT COMMITTEE
Name :	Mr. P.V. Rathnam
Designation :	Chairman
Name :	Dr. M. Bhagvanth Rao
Designation :	Member
Name :	Mr. S. Raghunandan
Designation :	Member
Name :	Mr. Srinivas Chidambaram
Designation :	Member
INVESTORS GRIEVANCE COMMITTEE
Name :	Mr. P.V. Rathnam
Designation :	Chairman
Name :	Mr. Santosh Varalwar
Designation :	Member
Name :	Dr. V. Manohar Rao
Designation :	Member
REMUNERATION COMMITTEE
Name :	Dr. M. Bhagvanth Rao
Designation :	Chairman
Name :	Mr. Subhash Varalwar
Designation :	Member
Name :	Mr. Sandeep Varalwar
Designation :	Member
Name :	Mr. D. Hanumantha Rao
Designation :	Member
Name :	Dr. Peesapati Venkateswarlu
Designation :	Member
COMPENSATION COMMITTEE
Name :	Mr. P.V. Rathnam
Designation :	Chairman
Name :	Mr. Santosh Varalwar
Designation :	Member
Name :	Mr. S. Raghunandan
Designation :	Member
Name :	Dr. M. Bhagvanth Rao
Designation :	Member
MANAGEMENT COMMITTEE
Name :	Dr. V. Manohar Rao
Designation :	Chairman
Name :	Mr. Santosh Varalwar M
Designation :	Member
Name :	Mr. Subhash Varalwar
Designation :	Member

SHAREHOLDING PATTERN

As on 30.09.2012

Category of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	4305912	30.90
Bodies Corporate	1986178	14.25
Sub Total	6292090	45.16
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	6292090	45.16
(B) Public Shareholding
(1) Institutions
Financial Institutions / Banks	30105	0.22
Central Government / State Government(s)	19226	0.14
Foreign Institutional Investors	320695	2.30
Any Others (Specify)	2080137	14.93
Foreign Companies	2080137	14.93
Sub Total	2450163	17.58
(2) Non-Institutions
Bodies Corporate	766677	5.50
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 million	1749582	12.56
Individual shareholders holding nominal share capital in excess of Rs. 0.100 million	1748210	12.55
Any Others (Specify)	927220	6.65
Non Resident Indians	627904	4.51
Clearing Members	25348	0.18
Foreign Nationals	273968	1.97
Sub Total	5191689	37.26
Total Public shareholding (B)	7641852	54.84
Total (A)+(B)	13933942	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	0	0.00
(1) Promoter and Promoter Group	0	0.00
(2) Public	0	0.00
Sub Total	0	0.00
Total (A)+(B)+(C)	13933942	0.00

BUSINESS DETAILS

Line of Business :

Manufacturer of active ingredients for home and personal care and personal hygiene products.

Products :

Product Description	Item Code No.
Avis (Avobenzone)	29145000
VIV – 20 (Triclosan)	29105000
DANTUFF-Z (Zinc Purithione)	29333900

PRODUCTION STATUS As on 31.03.2012

Particulars	Unit	Licensed Capacity and Installed Capacity
Speciality Chemicals	MT	3000
Capsules	Million	300
Tablets	Million	30
Lotions	KL	20
Ointments	MT	30
Small Volume Parentals	KL	300

Particulars	Unit	Production Capacity
Speciality Chemicals	MT	2037.87
Capsules	Million	790.01
Tablets	Million	35.32
Lotions	KL	46.05
Ointments	MT	12.41
Small Volume Parentals	KL	400.40

GENERAL INFORMATION

No. of Employees :

1060 (Approximately)

Bankers :

• State Bank of Hyderabad
• Axis Bank
• EXIM Bank
• HDFC Bank
• Bank of Bahrain and Kuwait B.S.C.
• SBI London

Facilities :

Secured Loan	As on 31.03.2012 (Rs. in Millions)	As on 31.03.2011 (Rs. in Millions)
Term Loans From Banks	757.070	747.380
Cash Credits and Working Capital Loan from Banks
STATE BANK OF HYDERABAD
Cash Credit	921.640	926.060
Packing Credit (INR)	201.900	102.760
Packing Credit (USD)	0.000	195.000
FUBD (INR)	215.350	73.590
FUBD (USD)
(Secured by Pari passu first charge on all the Current Assets and second charge on all Fixed Assets of the Company)
Bank of Bahrain & Kuwait
Cash Credit	1.420	0.000
(Secured by Pari passu first charge on all the Current Assets and second charge on all Fixed Assets of the Company)
Other Loans repayable on demand
From Banks
Bank of Bahrain & Kuwait	98.350	0.000
Packing Credit in Foreign Currency
(Secured by Pari passu first charge on all the Current Assets and second charge on all Fixed Assets of the Company)
Bank of Bahrain & Kuwait
Foreign Usance Bill Discounting	101.360	0000
(Secured by Pari passu first charge on all the Current Assets and second charge on all Fixed Assets of the Company)
EXIM BANK
Packing Credit
(Secured by Pari passu first charge on all the Current Assets and second charge on all Fixed Assets of the Company	485.520	227.820
Total	2782.610	2272.610
Unsecured Loan	As on 31.03.2011 (Rs. in Millions)	As on 31.03.2010 (Rs. in Millions)
Kotak Mahindra Bank	200.000	0.000
From Financial Institutions
Foreign Currency Convertible Bonds (F C C B) From International Finance Corporation	333.50	0.000
Advances from Related Parties
Klarsehen Private Limited	60.000	0.000
Vivimed Labs Europe	49.410	0.000
Total	642.910	0.000

Banking Relations :	--
Auditors :
Name :	P. Murali and Company Chartered Accountants
Address :	6-3-655/2/3, Somajiguda, Hyderabad – 500082, Andhra Pradesh, India
Internal Auditor :
Name :	Price Waterhouse Coopers Private Limited Chartered Accountants
Address :	# 8-2-293/A/113/A, Road No. 36, Jubilee Hills, Hyderabad – 500034, Andhra Pradesh, India
Cost Auditor :
Name :	Bharthula and Associates Cost Accountants
Address :	G2, GSK Towers, Santhi Nagar, Baghameer, Kukatpally, Hyderabad – 500 072, Andhra Pradesh, India
Indian Subsidiary :	Octtantis Nobel Labs Private Limited
Wholly Owned Indian Subsidiary :	Creative Health Care Private Limited, Mumbai. Klar Sehen Private Limited
Wholly Owned Foreign Subsidiary :	Vivimed Holdings Limited, HongKong Vivimed Labs USA Inc. Vivimed Labs Mauritius Limited
Wholly Owned Foreign Step Down Subsidiary :	Vivimed Labs Europe Limited, U.K. Vivimed Labs UK Limited Vivimed Labs Spain S L Union Quimico Farmaceutica S.A.U., Spain Uquifa Mexico S.A. de C.V. Holiday International Limited, UK

CAPITAL STRUCTURE

As on 31.03.2012

Authorized Capital:

No. of Shares	Type	Value	Amount
20000000	Equity Shares	Rs.10/- each	Rs.200.000 Millions
910000	Preference Shares	Rs.1000/- each	Rs.910.000 Millions
	Total		Rs.1110.000 Millions

Issued, Subscribed & Paid-up Capital:

No. of Shares	Type	Value	Amount
13933942	Equity Shares	Rs.10/- each	Rs.139.340 Millions
670000	Preference Shares	Rs.1000/- each	Rs.670.000 Millions
	Total		Rs.809.340 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2012	31.03.2011	31.03.2010
SHAREHOLDERS FUNDS
1] Share Capital		809.340	101.640	99.650
2] Warrant Application Money		23.720	88.640	49.560
3] Reserves & Surplus		2620.150	1348.860	1085.080
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		3453.210	1539.140	1234.290
LOAN FUNDS
1] Secured Loans		2782.610	2272.610	1471.800
2] Unsecured Loans		642.910	0.000	7.410
TOTAL BORROWING		3425.520	2272.610	1479.210
DEFERRED TAX LIABILITIES		163.430	156.890	171.400
TOTAL		7042.160	3968.640	2884.900
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		2944.950	1600.240	1390.820
Capital work-in-progress		77.080	11.380	3.390
INVESTMENT		871.690	33.990	34.880
DEFERREX TAX ASSETS		0.000	0.000	0.000
Other Non-Current Assets		300.610	66.860
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	738.820	667.050	606.060
	Sundry Debtors	987.180	959.610	753.230
	Cash & Bank Balances	194.060	86.320	34.06
	Other Current Assets	2.290	0.080	0.000
	Loans, Advances and Deposits	1658.160	859.530	310.690
Total Current Assets		3580.510	2572.590	1704.040
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	277.240	69.300	218.960
	Other Current Liabilities	318.920	128.440	0.370
	Provisions	136.520	118.680	86.810
Total Current Liabilities		732.680	316.420	306.140
Net Current Assets		2847.830	2256.170	1397.900
MISCELLANEOUS EXPENSES		0.000	0.000	57.910
TOTAL		7042.160	3968.640	2884.900

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011	31.03.2010
	SALES
		Net Sales	3829.000	3098.100	2105.890
		Other Income	4.200	2.870	20.080
		TOTAL (A)	3833.200	3100.970	2125.970
Less	EXPENSES
		Cost of Materials Consumed	2293.000	1988.450	1275.850
		Changes in Inventories (Finished goods and WIP)	(15.680)	(44.500)	198.790
		Employee Benefit Expenses	105.790	105.390	15.320
		Other Operating Expenses	480.470	342.000	102.040
		Administrative Expenses	125.350	142.840	131.630
		TOTAL (B)	2988.930	2534.180	1716.370
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		844.270	566.790	409.600
Less	FINANCIAL EXPENSES (D)		225.350	176.310	144.370
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		618.920	390.480	265.230
Less/ Add	DEPRECIATION/ AMORTISATION (F)		105.510	60.790	43.990
	PROFIT BEFORE TAX (E-F) (G)		513.410	329.690	221.240
Less	TAX (H)		109.260	52.060	55.840
	PROFIT AFTER TAX (G-H) (I)		404.150	277.630	165.400
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		NA	786.150	647.740
Less	APPROPRIATIONS
		Transfer to General Reserve	NA	NA	9.500
		Dividend			14.950
		Tax on Dividend			2.540
	BALANCE CARRIED TO THE B/S		NA	NA	786.150
	EARNINGS IN FOREIGN CURRENCY
		Export of Goods	2285.290	1011.080	868.440
	TOTAL EARNINGS		2285.290	1011.080	868.440
	Earnings Per Share (Rs.)		29.00	27.31	17.00

QUARTERLY RESULTS

PARTICULARS	30.06.2012	30.09.2012
Type	1^st Quarter	2^nd Quarter
Net Sales	915.500	111.400
Total Expenditure	683.170	359.760
PBIDT (Excl OI)	232.330	251.640
Other Income	0.000	0.000
Operating Profit	232.330	251.640
Interest	89.500	68.080
Exceptional Items	0.000	0.000
PBDT	142.830	183.560
Depreciation	37.240	38.030
Profit Before Tax	105.590	145.530
Tax	21.120	53.800
Provisions and contingencies	0.000	0.000
Profit After Tax	84.470	91.740
Extraordinary Items	0.000	0.000
Prior Period Expenses	0.000	0.000
Other Adjustments	0.000	0.000
Net Profit	84.470	91.740

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011	31.03.2010
PAT / Total Income	(%)	10.54	8.95	7.78
Net Profit Margin (PBT/Sales)	(%)	13.41	10.64	10.51
Return on Total Assets (PBT/Total Assets}	(%)	7.87	7.90	7.15
Return on Investment (ROI) (PBT/Networth)		0.15	0.21	0.18
Debt Equity Ratio (Total Liability/Networth)		1.20	1.68	1.45
Current Ratio (Current Asset/Current Liability)		4.89	8.13	5.57

LOCAL AGENCY FURTHER INFORMATION

Sr. No.	Check List by Info Agents	Available in Report (Yes / No)
1]	Year of Establishment	Yes
2]	Locality of the firm	Yes
3]	Constitutions of the firm	Yes
4]	Premises details	No
5]	Type of Business	Yes
6]	Line of Business	Yes
7]	Promoter's background	Yes
8]	No. of employees	Yes
9]	Name of person contacted	No
10]	Designation of contact person	No
11]	Turnover of firm for last three years	Yes
12]	Profitability for last three years	Yes
13]	Reasons for variation <> 20%	----
14]	Estimation for coming financial year	No
15]	Capital in the business	Yes
16]	Details of sister concerns	Yes
17]	Major suppliers	No
18]	Major customers	No
19]	Payments terms	No
20]	Export / Import details (if applicable)	No
21]	Market information	----
22]	Litigations that the firm / promoter involved in	----
23]	Banking Details	Yes
24]	Banking facility details	Yes
25]	Conduct of the banking account	----
26]	Buyer visit details	----
27]	Financials, if provided	Yes
28]	Incorporation details, if applicable	Yes
29]	Last accounts filed at ROC	Yes
30]	Major Shareholders, if available	No
31]	Date of Birth of Proprietor/Partner/Director, if available	Yes
32]	PAN of Proprietor/Partner/Director, if available	No
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	Yes

Financial Results

The consolidated net revenue of the Company during 2011-12 grew to 63.54% to Rs.6893.490 Millions as compared to Rs.4215.250 Millions last year. The Company has achieved a standalone net revenue of Rs.3829.010 Millions during the year, as compared with Rs.3098.100 Millions during the previous year, a rise of 23.59%.

Consolidated profit before tax increased to Rs.778.150 Millions, as compared with Rs.552.620 Millions in the previous year, an increase of 40.64% over the last year. Stand alone profit before tax increased from Rs.329.69 million to Rs.513.410 Million an increase of 55.73% over last year.

Consolidated profit after tax increased to Rs.631.370 Millions as compared with Rs.488.310 Millions in the previous year, an increase of 29.30% over the last year. The Company recorded a Standalone profit after tax of Rs.404.150 Millions, an increase of 45.57% as compared with last year's Rs.277.640 Millions.

Acquisitions

Uquifa acquisition

On November 30, 2011 'Vivimed Labs Limited' acquired Uquifa, a 75-year-old manufacturer of pharma APIs and intermediates with operations in Spain and Mexico. In a move to bring in strategic growth into pharma segment and expand its footprints in Europe and the Americas, the Company has taken a measured stride with the acquisition of Uquifa.

This well considered move would strengthen the Company's current position in pharma APIs and intermediates while significantly improving the cost competitiveness of Uquifa. Complementing each other's needs and growth plans, the acquisition envisages being a healthy, 'two-way opportunity pipeline' for Vivimed. While Uquifa gets the supply side efficiencies and knowledge base of Vivimed in pharma, Vivimed would leverage the preeminent position of Uquifa in APIs and their robust pipeline of filings to accelerate growth across Europe and the Americas in the next five years.

The Company also believes that acquisition of Uquifa will add to its multi-geographical locations, stability in operations and knowledge base. This will fundamentally mean greater comfort levels for customers and channel partners in addressing their needs and logistics. Uquifa acquisition in Europe comes post a successful acquisition and integration of James Robinson, UK ( Now Vivimed Labs Europe Limited) in 2008.

With Uquifa, Vivimed will have a footprint into LATAM and deepen presence into Europe. Indian manufacturing efficiencies and Uquifa's strengths will be seamlessly aligned in the new dispensation. Uquifa's preeminent position in APIs, combined with Vivimed's supply chain efficiencies will enhance competitiveness for Uquifa and swifter broadening of customer base. Uquifa is now forming part of API division of Vivimed group.

Klar Sehen acquisition

On September 29, 2011 Vivimed Labs Limited acquired the entire equity stake in Klar Sehen Private Limited (KSL), a 30 year old Kolkata based Pharmaceutical Company with strong marketing presence in North East, Bihar and Andhra Pradesh. KSL Operates in niche ophthalmic segment leveraging 50 proprietary trademarks. It has well known brands such as Renicol, Lysicon-V Care Tears, Dexacort etc., in eye care segment.

In a research conducted by C-Marc (India) Private Limited for the period Nov- Feb 2011, KSL for its wide range of Ophthalmic products has bagged rank of an All India corporate No. 1 in the East Zone and bagged a rank of No. 5 in Rest of India ( in Indian, Dist HQ and Extra- Urban and rural markets).

KSL has cGMP compliant manufacturing facilities at Kolkata and Hyderabad and also has arrangements to manufacture some of its products in Uttaranchal.

Vivimed's acquisition of KSL complements its strategy to increase its domestic presence in niche pharmaceutical areas, its extensive knowledge and experience in manufacturing and R and d will help grow this business to new levels.

Economic overview

Global economy: The global economic environment, which was tenuous at best through the early part of 2011, turned adverse in September 2011. Global GDP grew 3.8% growth in 2011, significantly lower than the 5.2% growth in 2010. Capital flows to developing countries in 2011 declined by almost half compared with the previous year. As per World Economic Outlook, global economic growth is expected to slow to 3.3% in 2012. Economic growth in emerging and developing economies is expected to average 5.4% - a significant decline from 6.2% growth in 2011. Despite a substantial downward revision, developing countries of Asia is still projected to grow at 7.5% in 2012.

Indian economy: India's GDP growth declined from 8.4% in 2010-11 to 6.5% in 2011-12. GDP growth in 2011-12 was the lowest in nine years. Despite low growth, India remained one of the fastest-growing global economies. Going ahead, the government estimates a GDP growth of about 6%-plus in 2012-13. While this appears a reasonable estimate, inflation will continue to be a significant challenge for the government especially due to the recent hikes in excise duty and service tax in the Union Budget 2012.

During the next five years, there will be accelerated spending in generics, rising from 20% of spending in 2005 to 39% of spending in 2015. Spending on generic drugs (including branded generics) is expected to grow at a CAGR of ~ 13% through 2015, compared to ~ 5% CAGR for the overall pharmaceuticals market.

The share of branded drugs is expected to decline from ~ 64% of global pharma spend in 2010 to an estimated 53% due to an increasing generic presence arising out of accelerating patent expiries, higher incentives for generics use and faster generics growth in emerging pharma markets.

The U.S. share of global spending is expected to decline from 41% in 2005 to 31% in 2015, while the share of spending from the top five European countries is expected to decline from 20% to 13%. Meanwhile, 17 high growth emerging markets are likely to contribute 28% of the total spending by 2015 compared to 12% in 2005.

Pharma emerging markets:

The largest growth in the five years from 2010 onwards will be in the pharmerging markets, driven by reforms and economic growth. Generic spending is expected to increase by US$47 billion, approximately 60% from the increased utilisation of existing generic products and 40% from newly available generics.

Pharmerging markets are expected to double pharmaceutical spending in five years, adding US$150 billion by 2015. Patients pay out-of-pocket for the majority of medicines in these markets, which limits the use of expensive new medicines. The growth of a number of pharmerging markets are marked by strong domestic companies which market low cost generics, branded generics and unauthorised variants of original brands. Of the total increase in spending, approximately 20% is expected to be derived from branded products.

Until not too long ago, India's pharmaceutical space was written off as a self-pay generics-based market adept at product duplication; today the sector has claimed a significant share of the global market by leveraging strengths and enhancing its regulatory and technical maturity. The result is that Indian formulations constitute 20%of the global generics market by value; the overall share of Indian manufactured formulations is a high 46% in the generics segment of emerging markets.

CONTINGENT LIABILITIES

(Rs. In Millions)

Particular	31.03.2012	31.03.2011
Letter of Credit
Foreign LC ’s	94.690	151.930
Inland LC ’s	55.890	32.480
SBLC- Axis Bank
Bank Guarantee
State Bank of Hyderabad, Balanagar Branch, Hyderabad, India	4.870	4.870

CONTINGENT LIABILITY ON ACCOUNT OF CORPORATE GUARANTEES

(Rs. In Millions)

Particular	31.03.2012	31.03.2011
Vivimed Holdings Limited, Hong Kong (State Bank of India, London Branch)	366.470	571.610
Vivimed Labs Europe Limited, UK (State Bank of India, London Branch)	142.19	124.510
Vivimed Labs Spain S.L. (EXIM Bank)	1243.57	0.000
Octtantis Nobel Private Limited (Yes Bank)	30.000	0.000
Vivimed Labs USA Inc (Merchants and Traders Trust Company)	179.050	0.000

FIXED ASSETS

• Land
• Building
• Plant and Machinery
• Electrical Equipment
• Laboratory Equipment
• Office Equipment
• Computers
• Furniture
• Vehicles
• Borewell
• Generator

WEBSITE DETAILS

Business Description

Subject is an India-based company. The Company operates in two segments: specialty chemicals and pharmaceuticals. The specialty chemicals segment manufactures a range of products active ingredients for home and personal care and personal hygiene products. Pharmaceutical segment is engaged in contract manufacturing and job works. Its portfolio has a range of specialty chemicals (active ingredients) supplied to manufacturers of beauty care products like hair care, skin care, sun care and oral care products, industrial care products, such as anti-microbial, anti-fouling agents and biocides and health care products like pharmaceutical finished drug forms for cancer, tuberculosis. Its subsidiaries include Creative Health Care Private Limited, Vivimed Holdings Limited, Vivimed Labs Europe Limited and Vivimed Labs USA Inc. For the fiscal year ended 31 March 2010, Subject.'s revenues increased 26% to Rs3.5B. Net income increased 60% to Rs310.1M. Revenues reflect an increase in income from Specialty Chemicals and a higher income from Pharmaceutical segments. Net income also reflects lower manufacturing expenses, a decline in advertisement expenses, the presence of income from exchange fluctuations and a rise in operating profit margin.

Board of Directors

Mr. V. Manohar Rao

Executive Non-Independent Chairman of the Board

Dr. V. Manohar Rao is the Executive Non-Independent Chairman of the Board of Subject. He is Retired as Joint Director of ace The Veterinary Biological and Research Institute (VBRI) and has done his post-graduation in Veterinary Sciences from Edinburgh University, U.K. He has more than 30 years experience in The Municipal Corporation of Hyderabad and Department of Animal Husbandry, Government of Andhra Pradesh. During his tenure with Department of Animal Husbandry, he was involved in administration and production of various vaccines for livestock and poultry. He worked as a special officer for Meat and Poultry Department Corporation Andhra Pradesh Government Enterprises. H e conceptualized and started V V S Pharmaceuticals and Chemicals Private Limited (V V S). He is mainly responsible for developing a sophisticated and well-equipped in-house Quality Control and introduced various cost control systems in production process.

Mr. Subhash Varalwar

Executive Non-Independent Vice Chairman of the Board

Mr. Subhash Varalwar is the Executive Non-Independent Vice Chairman of the Board of Vivimed Labs Inc. He is a Post Graduate in Chemical Engineering and a Management Graduate from Leeds University, U.K. After his post graduation he joined The Fertilizer Corporation of India (FCI ) in 1974 as Asst. Project Engineer (Chemical). He held various positions in FCI and worked on various areas like designing and commissioning of fertilizer plant, production etc. He resigned from FCI in 1989 to join Vivimed. Mr. Subhash is responsible for Technology and New Product Development in the chemical segment of the Company. He also heads Production, Quality control and R and D function. He led the technical integration teams of UK/India after acquisition of James Robinson Limited and has implemented the stringent regulatory compliances across all its manufacturing operations globally.

Mr. Raj Kumar Dhar

Whole Time Director, Director-Technical, Director Research and Development

Dr. Raj Kumar Dhar is the Whole Time Director, Director-Technical, Director Research and Development of Subject. He has done his Post Doctoral studies at Marburg, Germany, started his career with Hoechst R and D Germany and ever since has been involved in Organic Synthetic chemistry for three decades. Has several novel product developments to his credit and is the chief architect of Vivimeds VINTO X - NDGA. Has been involved with Vivimed in various capacities since inception and became a Whole Time Director in 2008.

Mr. Nixon Patel

Non-Executive Independent Director

Mr. Nixon Patel is the Non-Executive Independent Director of Subject. He holds Bachelors degree in Technology (Hons.) from Indian Institute of Technology, Kharagpur and has pursued his MS in Computer Science from New Jersey Institute of Technology. Mr. Nixon Patel, is a entrepreneur with a proven track record for growing 5 businesses from startup to millions of US$ in annual sales, developed in a short span of 20 years.

Mr. S. Raghunandan

Whole-Time Director, Director – Operation

Mr. S. Raghunandan is the Executive Non-Independent Director and Director - Operations of Subject. He is a Science Post Graduate, began his career with Chandra Pharmaceuticals the producers of Ibuprofen in India at that time and was with them handling various aspects of Production. Joined Vivimed as Head Production at Bidar Plant and subsequently rose to the position of Director Operations. His association with the company is now more than 20 years.

Mr. M. Bhagvanth Rao

Non-Executive Independent Director

Dr. M. Bhagvanth Rao is the Non-Executive Independent Director of Subject. He is a PHD in chemical engineering from the Indian Institute of Sciences, Bangalore and has done his post doctoral studies at the Tokyo Institute of Technology, Japan. He has memberships to various professional associations including Fellowships in the Indian Institute of Chemical Engineers and A.P. Academy of Sciences, Life Membership in the Indian Society for Technical Education, etc. He has over 30 years of experience in research and teaching in the fields of chemical reaction engineering, catalysis, thermodynamics and biochemical engineering. He has been involved with Osmania University, Hyderabad in various positions including the Dean of Development and UGC Affairs, Director of Regional Centre for Urban and Environmental Studies and Director of Physical Education. He has various research publications to his credit some of which include articles in the Canadian Journal of Chemical Engineering, Industrial Engineering and Chemistry Fundamentals (USA), Journal of Polymer Sciences (USA), etc. He also acts as a research consultant to various laboratories like IICT, BHEL R and D NFC , etc.

Mr. Divvela Hanumantha Rao

Non-Executive Independent Director

Mr. Divvela Hanumantha Rao is Non-Executive Independent Director of Subject. He has degree in B. Pharm, PGDHA and has got knowledge in application, evaluation and teaching of regulatory affairs in Government, industry and academia. He has over 30 years of experience in various national and international regulatory laws. He served on various assignments for government and private sector in his field of specialization. He retired as Director, Drugs Control Administration, Government of Andhra Pradesh. Presently he is working as consultant to pharma companies

Mr. P. V. Rathnam

Non-Executive Independent Director

Mr. P.V. Rathnam is the Non-Executive Independent Director of Subject. He is a Fellow Member of the Institute of Chartered Accountants of India and Management Graduate with post professional qualification experience, in various levels of Management, in private and public sector undertakings in chemicals, fertilizers, pharmaceuticals, automobile and electrical engineering industries, spanning over 44 years, ending with Chairman and Managing Director, from 1990 to 2005, of a medium scale unit engaged in concept to commissioning of custom built electrical machines for on-board installation in Indian warships, submarines and combat aircraft.

Mr. Santosh Varalwar

Chief Executive Officer, Managing Director, Executive Non-Independent Director

Mr. Santosh Varalwar is the Chief Executive Officer, Managing Director, Executive Non-Independent Director of Subject. He is a Management Graduate. He is the driving force behind the phenomenal growth of Subject. He worked in Shipping Corporation of India (SCI) and had an opportunity to understand maritime trade and had global exposure, which helped him subsequently to focus on international marketing. H e served Mercantile Marine for about Seven Years before embarking on a entrepreneurial journey. He has played an active role in V V S Pharmaceuticals from the year 1985 and later on expanded the business to manufacture APIs by acquiring EMGI Pharmaceuticals and Chemicals Private Limited, Bidar, which was later converted into a public limited company and named as Subject. Subject was listed on BSE / NSE in the year 2005 and the Public Issue was all time success having been over-subscribed 40 times.

Mr. Sandeep Varalwar

Whole Time Director

Mr. Sandeep Varalwar is the Whole Time Director of Subject. He has completed his Graduation in B. Pharmacy. After completion of graduation, he gained 19 years of experience in manufacturing and marketing divisions of Pharma industry. He is the main strength behind the growth of Pharma division of the Company and took an active role in V V S Pharmaceuticals and Chemicals Private Limited. After the Company’s merger with Subject Mr. Sandeep Varalwar was appointed as a Whole Time Director on the Board of Subject.

Mr. Peesapati Venkateswarlu

Non-Executive Independent Director

Dr. Peesapati Venkateswarlu is Non-Executive Independent Director of Subject. He has done B. Sc (Spl), M. Sc (Andhra University), Ph. D (Delhi University), C. Chem. FRSC (London). He has 35 years of experience in Research / teaching in various universities in USA, UK and India. Associated with International Experts in the field of Organic, Bioorganic, Medicinal and Polymer Chemistry.

Mr. Krishna Yeachuri

Non-Executive Independent Director

Mr. Krishna Yeachuri is Non-Executive Independent Director of Subject. He is Commerce Graduate and Associate member of Institute of Chartered Accountants of India and has experience covering multi facets of business with reputed domestic and multi national companies. He was responsible for strategic planning, business development, budgeting and treasury planning in various Companies in India and overseas for over two decades.

Mr. Santosh Varalwar

Chief Executive Officer, Managing Director, Executive Non-Independent Director

Mr. Santosh Varalwar is the Chief Executive Officer, Managing Director, Executive Non-Independent Director of Subject. He is a Management Graduate. He is the driving force behind the phenomenal growth of Subject. He worked in Shipping Corporation of India (SCI) and had an opportunity to understand maritime trade and had global exposure, which helped him subsequently to focus on international marketing. He served Mercantile Marine for about Seven Years before embarking on a entrepreneurial journey. He has played an active role in V V S Pharmaceuticals from the year 1985 and later on expanded the business to manufacture APIs by acquiring EMGI Pharmaceuticals and Chemicals Private Limited, Bidar, which was later converted into a public limited company and named as Subject. Subject was listed on BSE / NSE in the year 2005 and the Public Issue was all time success having been over-subscribed 40 times

PRESS RELEASE:

VIVIMED LABS RAISES RS.1270.000 MILLIONS FROM PRIVATE EQUITY INVESTORS

28.09.2011

The fund raising will finance Vivimed’s ongoing expansion plans for speciality chemicals at its existing locations

Hyderabad-based Vivimed Labs Limited said that it has raised Rs.1270.000 Millions of funds through a preferential allotment to two private equity investors-NYLIM Jacob Ballas India Fund III LLC (NYLIM JB Fund) and Kitara Capital. NYLIM JB Fund invested Rs.670.000 Millions to subscribe for compulsorily convertible preference shares, which will be converted in 18 months at a price of Rs.315 per share, for a 13.2% shareholding in Vivimed on a fully diluted basis. Kitara invested Rs.600.000 Millions to subscribe for equity shares at a price of Rs.327 per share, for an 11.4% shareholding in Vivimed on a fully diluted basis.

The fund raising will finance Vivimed's ongoing expansion plans for speciality chemicals at its existing locations in Bidar (Karnataka), Hyderabad, a green field project (SEZ) off Vizag at Pydibhimavaram, a USFDA compliant facility for pharmaceuticals at Choutuppal near Hyderabad, acquisitions of pharmaceutical marketing companies in India and overseas acquisition of an API manufacturing company in Europe.

Santosh Varalwar, managing director and CEO of Vivimed said, "It indeed was need of the hour to ensure funding of all the Vivimed Labs' aggressive growth plans and will help the company catapult to new levels of performance."

Srinivas Chidambaram, managing director and CEO, Jacob Ballas Capital India Private Limited, investment advisor to NYLIM-JB Fund, said "The transnational team led by Santosh Varalwar has ambitious growth plans and NYLIM-JB Fund is proud to be a long term financial partner to help realise their vision."  A nominee of NYLIM JB Fund will join Vivimed's board of directors in due course.

VIVIMED LABS HOPES TO CASH IN ON UQUIFA BUY TO DOUBLE TURNOVER TO RS 10000.000 MILLIONS

13.12.2012

Vivimed Labs Ltd is hoping to cash in on the global market potential for formulations post its acquisition of Spain-based active pharmaceutical ingredients maker, Uquifa, early this month.

“Uquifa's active pharmaceutical ingredients' capacity will complement our formulations business with cost competitiveness besides making us a full-fledged pharma company,” Mr Santosh Varalwar, Managing Director, Vivimed Labs, told Business Line here.

The Hyderabad-based company would go for backward integration by shifting Uquifa's pharma ingredients production to India.

“Our API facilities coming up at pharma special economic zone at Visakhaptanam and Bidar in Karnataka will help us in this,” Mr Varalwar said.

Another plant to make finished dosages is also being set up exclusively for regulated markets at Choutuppal near here. “The combined investment in these plants is about Rs 1900.000 Millions. All of them should begin production by end of next financial year,” he said.

The pharma business was moving towards finished dosages for sustainable growth, he added.

On the rationale behind acquiring Uquifa for $55 million which was more than half of the present turnover of Vivimed, Mr Varalwar said the deal was one of the ‘cheapest' transactions in the recent past.

Vivimed paid only $55 million and got deferred payment for three years for $10. “We borrowed only $25 million at about 5 per cent interest. This got us $100 million gross assets and $65 million net assets,'' he said.

The turnover of the company would zoom to Rs 10000.000 Millions by end of next financial year with an equal share of specialty chemicals and pharmaceuticals in revenue, he added.

The operations of Uquifa which are now in the UK and Spain would be rationalised by bringing everything to Spain.

The scrip of Vivimed decreased 0.18 per cent to end at Rs 225. 25 on the Bombay Stock Exchange on Tuesday.

Vivimed had a turnover of Rs 4160.000 Millions in the financial year 2010-11 and posted a net profit of Rs 490.000 Millions.

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.54.84
UK Pound	1	Rs.89.11
Euro	1	Rs.72.47

INFORMATION DETAILS

Report Prepared by :

BSN

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	8
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	8
--CREDIT LINES	1~10	6
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		64

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.