MIRA INFORM REPORT

Report Date :

24.07.2012

IDENTIFICATION DETAILS

Name :	MERCK LIMITED
Registered Office :	Shiv Sagar Estate 'A', Dr. Annie Besant Road, Worli, Mumbai-400018, Maharashtra
Country :	India
Financials (as on) :	31.12.2011
Date of Incorporation :	26.04.1967
Com. Reg. No.:	11-013726
Capital Investment / Paid-up Capital :	Rs. 166.000 Millions
CIN No.: [Company Identification No.]	L99999MH1967PLC013726
TAN No.: [Tax Deduction & Collection Account No.]	MUME03379F
PAN No.: [Permanent Account No.]	AAACE2616F
Legal Form :	A public limited liability company. The company’s shares are listed on the Stock Exchange.
Line of Business :	Manufacturing and Marketing of Bulk Drugs, Reagents, Injections, Syrups/Powders and Tablets/Capsules.
No. of Employees :	970 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

Aa (72)

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 16400000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and reputed company having fine track. The company is a subsidiary of Merck KGaA, Germany. Trade relations are fair. Financial position is good. Payments are correct and as per commitments. The company can be considered good for any normal business dealings. It can be regarded as a promising business partner in a medium to long-run.

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

LOCATIONS

Registered Office :	Shiv Sagar Estate 'A', Dr. Annie Besant Road, Worli, Mumbai-400018, Maharashtra, India
Tel. No.:	91-22-24964855 / 24964856 / 56609000
Fax No.:	91-22-24950307/ 24950354 / 24954590 / 0354 / 0307 / 24936046
E-Mail :	vikas.r.gupta@merckgroip.com maria.mendes@merck.co.in hu.shenoy@merck.co.in
Website :	http://www.merck.co.in
Factory 1 :	Plot No. 11/1, Usgaon, Ponda-403407, Goa, India
Factory 2 :	Plot Nos. 1 and 1A, MIDC Estate, Taloja, Panvel, District Raigad – 410208 Maharashtra

DIRECTORS

AS ON 31.12.2011

Name :	Mr. S. N. Talwar
Designation :	Chairman
Name :	Dr. M. Dziki
Designation :	Managing Director
Name :	Mr. H. C. H. Bhabha
Designation :	Director
Name :	Mr. E. A. Kshirsagar
Designation :	Director
Name :	Mr. K. Shivkumar
Designation :	Executive Director
Name :	Mr. R. L. Shenoy
Designation :	Director
Qualification :	B. Tech
Previous Employment :	Project Manager- Jainex Limited
Name :	Mr. T. Kneen
Designation :	Director
Name :	Mr. P. H. Pimplikar
Designation :	Director

KEY EXECUTIVES

Name :	Mr. H. U. Shenoy
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 31.12.2012

Category of Shareholder	No. of Shares	% of No. of Shares
(A) Shareholding of Promoter and Promoter Group
(1) Indian
(2) Foreign
Bodies Corporate	8,599,224	51.80
Sub Total	8,599,224	51.80
Total shareholding of Promoter and Promoter Group (A)	8,599,224	51.80
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	909,821	5.48
Financial Institutions / Banks	1,332	0.01
Insurance Companies	1,887,149	11.37
Foreign Institutional Investors	776,126	4.68
Sub Total	3,574,428	21.53
(2) Non-Institutions
Bodies Corporate	521,997	3.14
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 million	3,133,313	18.88
Individual shareholders holding nominal share capital in excess of Rs. 0.100 million	680,886	4.10
Any Others (Specify)	89,534	0.54
Non Resident Indians	88,405	0.53
Trusts	1,129	0.01
Sub Total	4,425,730	26.66
Total Public shareholding (B)	8,000,158	48.20
Total (A)+(B)	16,599,382	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)	16,599,382	-

BUSINESS DETAILS

Line of Business :

Manufacturing and Marketing of Bulk Drugs, Reagents, Injections, Syrups/Powders and Tablets/Capsules.

Products :

Item Code No. (ITC Code)	300450 90
Product Description	Vitamin B-Complex
Item Code No. (ITC Code)	300450 90
Product Description	Vitamin B1+B2+B3+B5+B6+B12
Item Code No. (ITC Code)	300450 37
Product Description	Vitamin E

PRODUCTION STATUS (AS ON 31.12.2011)

Particulars	Unit	Installed Capacity	Actual Production
Bulk Drugs	Tones	597.0	549.100
Reagents / Chemicals	Tones	--	17.800 $
Injections / Nasal Drops	Kilo-Ltre	450.0	584.2 $
Syrups / Powders / Ointments	Tones	--	4597.3 $
Tablets / Capsules	No. millions	400.0	2115.3 $

@ As certified by the management, on which auditors have placed reliance, being a technical matter.

$ Includes quantities manufactured by others on loan licences.

NOTES:

(a) Production under “Bulk Drugs” includes items manufactured for captive consumption.

(b) Production includes promotional samples.

(c) “Reagents” is inclusive of repacked items.

(d) Opening and Closing Stocks and Turnover of Vitamins under “Bulk Drugs” include Vitamin derivatives.

(e) Under the liberalised policy of the Government vide Notification No. S-O-477 (E) dated 25 July 1991 and as amended vide Press Release Note No. 4 of 1994 series dated 25 October 1994, Bulk Drugs and Formulations included in above are exempted from licensing procedures under the Industries (Development and Regulation) Act, 1951.

(f) Installed capacities are on an annual basis as at year end.

(g) Quantities of closing stock of goods mentioned above are after adjustments of excess/shortage upon physical stock counts, free samples, giveaways under the Company’s bonus schemes and write offs.

GENERAL INFORMATION

No. of Employees :	970 (Approximately)
Bankers :	· Canara Bank, Indian · State Bank of India, Madame Cama Road, Mumbai – 400021, Maharashtra, India · Deutsche Bank AG, Tulsiani Chambers, Nariman Point, Mumbai – 400 021, Maharashtra, India

Banking Relations :	--
Auditors :
Name :	BSR and Company Chartered Accountants
Holding Company :	· Merck KGaA, Germany
Associates :	· Chemitra GmbH, Germany · Emedia Export Company mbh, Germany · Merck Internationale Beteiligungen GmbH, Germany
Fellow Subsidiaries :	· Merck Limited, Thailand · Merck Patent GmbH, Germany · Merck Pharmaceutical (HK) Limited, Hong Kong · Merck Pte. Limited, Singapore · Merck S.A., France · Merck Santé S.A.S., France · Merck Sdn Bhd, Malaysia · Merck Serono S.A., Switzerland · Merck Specialities Private Limited, India · Merck Schuchardt, Germany · Merck KGaA, Rep Office in Vietnam · Millipore (India) Private Limited, India · P.T. Merck Indonesia, Indonesia · Seven Seas Limited, United Kingdom
Other Related Companies :	· EMD Chemicals Inc., USA · Merck and Cie., Switzerland · Merck (Private) Limited, Pakistan · Merck Chemicals (Shanghai) Company Limited, China · Merck Consumer Health Care Holding GmbH, Germany · Merck Inc., Philippines · Merck KGaA and Company Werk Spittal, Austria · Merck Limited, Japan · Merck Limited, South Korea

CAPITAL STRUCTURE

AS ON 31.12.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
18000000	Equity Shares	Rs.10/- each	Rs. 180.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
16599382	Equity Shares	Rs.10/- each	Rs. 166.000 Millions

Notes:

Out of the above

— 127,820 (2010: 127,820) Equity Shares of Rs. 10 each have been allotted as fully paid-up pursuant to a contract for consideration having been received otherwise than in cash.

— 5,370,000 (2010: 5,370,000) Equity Shares of Rs. 10 each have been allotted as fully paid-up Bonus Shares, by capitalising Rs. 38.3 million from General Reserve and Rs. 15.4 million from Securities Premium Account.

— 8,599,224 (2010: 8,599,224) Equity Shares of Rs. 10 each are held by Merck KGaA, Germany, through its subsidiaries.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.12.2011	31.12.2010	31.12.2009
SHAREHOLDERS FUNDS
1] Share Capital		166.000	166.000	166.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		3934.800	3298.200	4506.900
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		4100.800	3464.200	4672.900
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		8.400	0.000	21.200
TOTAL		4109.200	3464.200	4694.100
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		715.000	492.700	628.200
Capital work-in-progress		10.200	19.700	12.100
INVESTMENT		227.400	201.800	238.200
DEFERREX TAX ASSETS		0.000	34.600	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1130.900	611.200	584.900
	Sundry Debtors	622.300	560.800	438.100
	Cash & Bank Balances	1132.800	1427.700	3246.400
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	1157.600	951.300	533.700
Total Current Assets		4043.600	3551.000	4803.100
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	580.300	542.500	351.600
	Other Current Liabilities	67.300	67.300	74.600
	Provisions	239.400	225.800	561.300
Total Current Liabilities		887.000	835.600	987.500
Net Current Assets		3156.600	2715.400	3815.600
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		4109.200	3464.200	4694.100

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.12.2011	31.12.2010	31.12.2009
	SALES
		Income	5575.700	5090.800	4731.100
		Other Income	488.800	433.700	432.100
		TOTAL (A)	6064.500	5524.500	5163.200
Less	EXPENSES
		Material Cost	2427.800	2078.700	2060.900
		Personnel Expenses	812.700	684.600	570.200
		Operating and Other Expenses	1931.200	1589.600	1492.200
		Impairment loss (reversal) / charge	(142.800)	142.800	0.000
		TOTAL (B)	5028.900	4495.700	4123.300
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		1035.600	1028.800	1039.900
Less	FINANCIAL EXPENSES (D)		0.200	0.700	0.300
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		1035.400	1028.100	1039.600
Less/ Add	DEPRECIATION/ AMORTISATION (F)		79.500	71.000	75.100
	PROFIT BEFORE TAX (E-F) (G)		955.900	957.100	964.500
Less	TAX (H)		319.100	(325.300)	309.700
	PROFIT AFTER TAX (G-H) (I)		636.800	631.800	654.800
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		36.300	1306.500	1366.700
Less	APPROPRIATIONS
		Interim Dividend	0.000	1576.900	332.000
		Dividend Tax	0.000	261.900	56.400
		Transfer to General Reserve	0.000	63.200	326.600
	BALANCE CARRIED TO THE B/S		673.100	36.300	1306.500
	EARNINGS IN FOREIGN CURRENCY
		Export of Goods on F. O. B Basis	538.900	468.800	522.200
		Indenting commission	1.500	1.200	1.100
		Others (Recoveries of SAP expenses, freight, insurance, etc.)	31.100	41.900	23.500
	TOTAL EARNINGS		571.500	511.900	546.800
	IMPORTS
		Raw Materials	640.400	427.700	438.000
		Finished Goods	757.200	460.500	279.200
		Components, Stores and Spares Parts	1.100	2.400	2.200
		Capital Goods	31.800	22.400	3.900
	TOTAL IMPORTS		1430.500	913.000	723.300
	Earnings Per Share (Rs.)		38.40	38.10	39.00

QUARTERLY RESULTS

PARTICULARS	31.03.2012
	1^st Quater
Net Sales	1372.280
Total Expenditure	1300.210
PBIDT (Excl OI)	72.070
Other Income	134.240
Operating Profit	206.310
Interest	0.060
Exceptional Items	0.000
PBDT	206.250
Depreciation	20.920
Profit Before Tax	185.330
Tax	61.400
Provisions and contingencies	0.000
Profit After Tax	123.930
Extraordinary Items	0.000
Prior Period Expenses	0.000
Other Adjustments	0.000
Net Profit	123.930

KEY RATIOS

PARTICULARS		31.12.2011	31.12.2010	31.12.2009
PAT / Total Income	(%)	10.50	11.44	12.68
Net Profit Margin (PBT/Sales)	(%)	17.14	18.80	20.39
Return on Total Assets (PBT/Total Assets}	(%)	20.09	23.47	17.76
Return on Investment (ROI) (PBT/Networth)		0.23	0.28	0.21
Debt Equity Ratio (Total Liability/Networth)		0.22	0.24	0.21
Current Ratio (Current Asset/Current Liability)		4.56	4.25	4.86

LOCAL AGENCY FURTHER INFORMATION

Check List by Info Agents	Available in Report (Yes / No)
1. Year of Establishment	Yes
2. Locality of the firm	Yes
3. Constructions 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	Yes
21. Market information	------
22. Litigations that the firm / promoter involved	------
23. Banking Details	Yes
24. Banking facility details	No
25. Conduct of the banking account	------
26. Buyer visit details	------
27. Financials, if provided	No
28. Incorporation details, if applicable	Yes
29. Last accounts filed at ROC	Yes
30. Major Shareholders, if available	No

OPERATIONS:

The operational working of the Company, in detail, is discussed in the Management Discussion and Analysis Report forming part of this Report. The turnover of the Company showed an increase of 9.5% over the turnover achieved in the previous year. As against Rs. 5,090.8 millions achieved in the year 2010, the turnover of the Company in 2011 was Rs. 5,575.7 millions. While the Pharmaceuticals segment showed an increase in the turnover of 7.2%, the Chemicals segment showed an increase of 15.4% compared to the respective turnover of the segments in the preceding year.

The Profit After Tax for the year was Rs. 636.8 millions as against Rs. 631.8 millions. in 2010, showing a marginal increase of 0.8%.

The F.O.B. value of exports of the Company during the year 2011 was Rs. 538.9 millions as against Rs. 468.8 millions achieved in the preceding year.

The Company had debited in the previous year Rs. 142.8 millions to the profit and loss account towards the impairment loss on the assets used for the manufacture of Oxynex at its Goa plant. Though the Company had curtailed production of Oxynex during the year, the plant was utilized to manufacture Vitamin E for part of the year. Taking into account the approved utilization of the Oxynex plant and its value in use, an amount of Rs. 142.8 millions debited to profit and loss account in the previous year was reversed and credited to profit and loss account.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Indian economy according to the advance estimates of the central statistical office will expand at 6.9%, the slowest pace in the last 9 years barring the crisis year 2008-09, owing to a slow-down in manufacturing, contraction in mining and deceleration in farm output over the last year’s base. While agricultural growth could be less than 2.5% as against 7% registered last year, the industrial sector might grow at 3.8% as against the growth registered last year of 7.2%. The new year with favourable global economic indicators and also good signs with the increased amount of Foreign Direct Investment flow should bring hopes for revival of the growth momentum. Inflation which was spiralling last year has shown a downward trend and is under control.

The Pharmaceuticals segment is the Company’s main segment and accounts for nearly 70% of the revenue, while the Company’s Chemicals segment accounts for the balance 30%. Both the segments are subjected to various regulatory controls and monitoring. The working of both the segments is influenced by regulatory restrictions, most important of them being the pharmaceuticals pricing legislation which for decades has been the main hurdle in improving the working results of the Company. The Company also faced during the year, heavy burden on account of higher input costs caused by higher inflation and adverse foreign exchange fluctuations and also regulatory hassles on registration and licensing of products. The following table gives, in brief, the financial indicators on the Company’s working in the backdrop of many challenges and difficulties.

Key Indicators	31.03.2011	31.03.2010
Turnover (Rs. millions)	5,575.700	5090.800
Profit After Tax (Rs. millions)	636.800	631.800
Profit After Tax to Turnover (%)	11.400	12.400
Sales to Fixed Assets employed (ratio)	7.700	9.900
Current Assets (ratio)	4.600	4.200
Return on capital employed (%)	15.500	18.200
Book value of shares (Rs.)	247.000	208.700

As you are aware, last year the Company debited the impairment loss relating to the Oxynex plant assets, arising on account of the lower projected cash flows and realization, caused by the projected fall in demand for the product. In the current year, due to the initiatives taken by the management, the plant was put to alternative use, thereby improving the cash flows. With such improvement on projected cash flow, the impairment loss debited last year was reversed.

The profit after tax during the year of Rs. 636.8 millions was impacted by higher input costs, overheads on promotion and personnel costs.

The performance of the two business segments, in brief, is given below:

PHARMACEUTICALS SEGMENT:

The segment has two business divisions i.e. Merck Serono and Consumer Health Care. The performance of the divisions is given below:

MERCK SERONO

Merck Serono with a registered turnover of Rs. 3,442.6 millions accounting for 62% of the Company’s turnover is the largest division in the Company. It grew by 5% over the previous year, with the bulk of the sales from Vitaminbased formulations, which have been in the market for many decades. Legacy brands like Neurobion, Polybion, Evion and Livogen are well entrenched. The Company continues to derive equity from these brands through various line extensions introduced over the years. Livogen, an iron supplement, the number 1 prescribed haematinic in India, grew by approximately 20% in 2011.

The Cardiometabolic segment which houses Carbophage – a Metformin and an original discovery from the Merck Group registered a growth of 70%. Concor, a beta-blocker which has been doing very well grew by 29% in 2011.

The new products and line extensions introduced over the past couple of years, have continued to perform well –

noteworthy among them being brands like Neurobion Plus, Ostopolybion, Tolflex, Ostonate, Ecobion, Met- Neurobion P capsules and Livogen injection.

The robust field team of Merck Serono works with doctors across regions, both in urban and rural areas. This helps in penetrating the market, thereby sustaining the growth of mature brands as well as in introducing new products.

In 2012, with an objective to augment further growth, the business has been reorganised to enable greater customer focus. Creating newer markets in rural areas, focusing on Women’s Health and re-energising their legacy brands are the core areas. A special task force has also been created to focus on new product introductions. With these measures, the division aims to reach newer growth prospects and scale greater heights.

CONSUMER HEALTH CARE DIVISION:

The turnover of the division for the year 2011 was Rs. 452.1 millions as against the turnover of Rs. 348.8 millions achieved in 2010, registering a good growth of 30%. This division specializes in Over The Counter (OTC) pharmaceutical products and focuses on its core global health themes – (a) Cold and Cough, (b) Every Day Health Protection, (c) Women’s and Children’s Health (d) Mobility. The division is growing on the strength of well known brands and the long standing trust, the consumers place in them with respect to their quality and efficacy.

In the largest therapeutic segment of the division, Cold and Cough, its iconic brand, Nasivion, the division’s first advertised brand, has grown in 2011 by 38% over last year and has also got the distinction of being the No. 1 Doctor prescribed brand in its segment. The division also deals with other categories such as Oral Rehydration Salt, Skin care etc. The brands Electrobion and Evion Cream are doing well in the market for a long time.

The year 2011 also saw the homecoming of its heritage brand Seven Seas Cod-liver oil which is being successfully integrated in the portfolio. The division will be able to participate in the largest OTC segment of Vitamin Mineral Supplements (VMS).

With these two strategic brands the division aims to build a robust business and continue its efforts to create Umbrella Brands for leveraging potential of the larger sub-categories of Cough Cold Allergy (CCA) and VMS. The division is committed to creating a robust pipeline of new products, which will be developed through the efforts of

both local and global R and D for larger participation in its health themes.

PHARMA EXPORTS:

Exports in the Pharma segment contribute about 5% to the total Pharma turnover. Since the Merck Group is present in most countries around the world, there was little scope to expand the Pharma exports business. Despite these challenges, with the team’s keen business acumen and expertise, the export turnover grew by 13% over the previous year. The major export markets for the Company are Sri Lanka, Nepal and Myanmar. Substantial progress has been made in exports to African and Middle Eastern countries in the last few years. The Company now exports its pharmaceutical formulations to Lebanon, Kenya, Tanzania and Zambia as well.

PRODUCTION:

The Pharmaceuticals products of both the divisions are manufactured partly at the in-house manufacturing facility at Goa and through outsourced units. Proper care and supervision is exercised on the outsourced units to ensure the quality and efficacy of the products. The production capacity at Goa is fully utilized.

CHEMICALS SEGMENT:

The Chemicals segment grew in terms of turnover by 15.4% in 2011. The turnover of the segment in 2011 was Rs. 1,681.0 millions as against Rs. 1,457.1 millions achieved in 2010. The Chemicals segment is operating through two divisions: i.e. Pharm Chem Solutions and Performance Materials.

PHARM CHEM SOLUTIONS:

The Pharm Chem Solutions division offers wide range of traded products and a few bulk drugs mostly manufactured in the in-house manufacturing facility of the Company located in Goa. The traded products of the division mainly are falling in the category of Excipients for Pharmaceutical Formulation and Process Chemicals for the BioPharm Industry. The main bulk drugs which are manufactured at Goa are Vitamin E, Thiamine DiSulphide (TDS) and Guaiazulene. While Guaiazulene and TDS production is exported fully, Vitamin E is marketed predominantly in the local market. Vitamin E is also being exported to Pakistan for the last few years.

While the demand for Vitamin E has been growing, the Company has been exploring strategies to increase the production capacity. Thus in 2011, the Company got the Export Oriented Unit status of the Oxynex plant cancelled. This step enabled it to start manufacturing Vitamin E at the Oxynex plant, thus supplementing the output of the Vitamin plant and utilizing the capacity rendered idle by the fall in the demand for Oxynex.

For 2012, in view of the substantial escalation in the demand for Oxynex, it may become necessary for the division to augment the capacity of the existing plant manufacturing Vitamin E.

On account of the expansion of the plant manufacturing TDS last year, the production capacity has gone up by 35% The plant is operating at full capacity. The plant for the manufacture of Guaiazulene set up in the year 1991 has been meeting the requirements of the export market in Japan.

With the excellent marketing drive which has been reflected in the results of 2011, the year 2012 should be a good year in terms of turnover and profitability for the division.

PERFORMANCE MATERIALS:

The Performance Materials division consists of two business lines i.e. Pigments and Cosmetics actives. This division recorded a growth of 7% over the previous year. The Pigments business was affected in the year 2011 mainly on account of the fall in the automotive coatings caused by the declining production in the automotive industry. Also, the competition from the local manufacturers as well as the international companies impacted the performance of the division. The division is making efforts to improve on the turnover and at the same time exploring the avenues for newer uses of the products in various spheres of the industrial activities.

The division also deals with the Cosmetics actives product, Oxynex. The plant to manufacture Oxynex was set up in 2009. In the year 2010, because of the fall in the demand for the product and consequent reduced cash flow, the plant was impaired by an amount of Rs. 142.8 millions.

In the year 2011, this plant was used for part of the year, to manufacture Vitamin E. As per the current trends, the demand for the product is increasing which may improve the working of the Oxynex plant.

OUTLOOK:

While both the Pharmaceuticals and Chemicals divisions continue to strive to improve on the performance, the current economic and political indicators will have their impact on the working of the Company. With the management focussing on enhancing the shareholders values, I am sure in the coming year, the Company will

continue to improve its performance.

UNAUDITED FINANCIAL RESULTS FOR THE QUARTER AND THREE MONTHS ENDED ON 31 MARCH, 2012

(Rs. in millions)

Sr. No.	Particular		3 months ended 31.03.2012 Unaudited
1.	Income from Operations
	a) Net Sales/Income from operations (Net of excise duty)		1367.357
	b) Other Operating Income		4.919
	Total Income from Operations (net)		1372.276
2.	Expenses
	a) Cost of Materials Consumed		399.519
	b) Purchases of Stock-in-trade		279.104
	c) Changes in inventories of finished goods, works-in- process and stock-in-trade		(70.304)
	d) Employee benefits expense		227.680
	e) Depreciation and Amortization expenses		20.917
	f) Other Expenses		464.213
	Total Expenses		1321.129
3.	Profit From Operations before Other Income, Finance Cost and Exceptional Items (1-2)		51.147
4.	Other Income		134.240
5.	Profit from Ordinary Activities Before finance Costs and Exceptional Items (3+4)		185.387
6.	Finance Costs		0.051
7.	Profit from Ordinary Activities after finance Costs but before Exceptional Items (5-6)		185.326
8.	Exceptional Items		0.000
9.	Profit from Ordinary Activities before Tax (7+8)		185.326
10.	Tax Expense		61.396
11.	Net Profit from Ordinary Activities after Tax (9-10)		123.930
12.	Extraordinary Item (net of expense)		0.000
13.	Net Profit for the period (11-12)		123.930
14.	Paid-up Equity Share Capital (Face Value of Rs.10/- Each)		165.994
15.	Reserves Excluding Revaluation Reserve		0.000
16.I	Earning Per Share (EPS) (before extra ordinary items) (of Rs. 10/- each)-(Not Annualized)
	a) Basic		0.747
	b) Diluted		0.747
16.II	Earning Per Share (EPS) (before extra ordinary items) (of Rs. 10/- each)-(Not Annualized)
	a) Basic		0.747
	b) Diluted		0.747
A	Particulars of Shareholding
1.	Public Shareholding
	-Number of Shares		8000158
	- Percentage of Shareholding		48.2
18.	Promoters and Promoter Group Shareholding
	a) Pledged/Encumbered
	- Number of Shares		--
	- Percentage of Shares (as a % of the Total Shareholding of promoter and promoter group)		--
	- Percentage of Shares (as a % of the Total Share Capital of the Company)		--
	b) Non Encumbered
	- Number of Shares		8599224
	- Percentage of Shares (as a % of the Total Shareholding of Promoter and Promoter Group)		--
	- Percentage of Shares (as a % of the Total Share Capital of the Company)		51.8
	Tax expenses consist of Current Tax Deferred Tax		63.000 (1.604)
	Particulars	3 months ended 31.03.2012
B	INVESTOR COMPLAINTS Pending at the begging of the quarter Received during the quarter Disposed of during the quarter Remaining unresolved at the end of the quarter	Nil 1 1 Nil

SEGMENT WISE REVENUE, RESULT AND CAPITAL EMPLOYED

(Rs. in millions)

Sr. No.	Particulars	3 Months Ended
		31.03.2012
		(Unaudited)
1	Segment Revenue
	a) Pharmaceuticals	881.130
	b) Chemicals	531.530
	Total	1412.660
	Less : Inter Segment Revenue (Net of Excise)	40.384
	Net Sales / Income from Operation	1372.276
2	Segment Results
	a) Pharmaceuticals	71.397
	b) Chemicals	71.943
	Total	143.340
	Less :Interest	0.061
	Less : Other Unallocable Expenditure	(42.047)
	Net of Unallocable Income
	Total Profit Before Tax	185.326
3	Capital Employed
	a) Pharmaceuticals	901.200
	b) Chemicals	1277.112
	c) Unallocated	2046.448
	Total	4224.760

NOTES:

1. The above results haven been reviewed by the Audit Committee and thereafter approved by the Board of Directors at its meeting held on 20^th April, 2012. The above results were subjected to a “Limited Review” by the Statutory Auditors.

2. Figures for the previous quarter / year have been re-grouped / re-arranged wherever necessary.

3. Figures of the preceding 3 months ended 31^st December, 2011 are the balancing figures between audited figures in respect of the full previous financial year and the published year to date figures up to the third quarter of the previous financial year. Also the figures up to the end of the third quarter were only reviewed and not subjected to audit.

4. During the previous year, the Company had reversed provision for impairment loss of Rs. 142.800 Millions on a cash generating unit. This has been considered in the results of the Chemicals segment.

FIXED ASSETS

• Software
• Freehold Land
• Building and Flats
• Plant and Machinery
• Furniture and Fixture
• Office Equipment
• Electrical Fitting
• Vehicles

PRESS RELEASE

· Project effexX’ is a knowledge based collaborative platform for professionals across design disciplines

Mumbai, April 24, 2012 – The Performance Materials division of Merck [India] today announced the launch of ‘Project effexX’, a first of its kind co-creation platform in the world of product design, architectural design, interior design, aesthetic design, package design, cosmetics and skin care. Targeted at professionals working across design disciplines, Project effexX aims to enhance their understanding of global trends and movements; enabling them to unleash new concepts and possibilities in the consumer product development space.

Project effexX is conceptualised keeping in mind Merck’s guiding principle to ‘Live a better life’ with the primary role of empowering individuals by offering a wide variety of choices across the consumer product verticals. The web portal www.projecteffexX.com will feature innovators who are changing the consumer product landscape, supported by latest information on global design and trends, opinion columns by pioneers, creative showcases and exclusive industry white papers across categories.

Moreover, Project effexX will also act as a real-world co-creation platform and would arguably be the only one in India where established as well as budding professionals and enthusiasts engage in serious business opportunities; within and outside their trade. Project effexX would be a catalyst through which concepts could be seeded and shaped into reality for product formulators in need of practical guidance; stylists looking for a showcase; cosmetic innovators with ground breaking concepts; or simply an enterprise looking for solutions in product design, home decor and beauty.

Sharing his views on this initiative Siddhartha Sengupta, Head of Performance Materials, Merck Limited [India] said, “At Merck we constantly endeavour to help our clients bring better and safer products to market with cutting-edge innovations in our effect pigments, actives and functional fillers. It is with this objective that we created ‘Project effexX’; to enlighten, inspire and empower independent product designers, cosmetics and skin-care formulators, and colour and materials consultants to product manufacturers and design houses. This initiative will also help consumers understand the latest trends in effect pigments space through interactive and participative sessions along with networking within their lines of work.”

With Project effexX, Merck [India] aspires to revolutionize the Indian consumer products scenario by bringing forth the best thinking and creation capabilities already resident in an increasingly resurgent India.”

About Merck

Merck is a global pharmaceutical and chemical company with total revenues of EUR 10.3 billion in 2011, a history that began in 1668, and a future shaped by approximately 40,000 employees in 67 countries. Its success is characterized by innovations from entrepreneurial employees. Merck's operating activities come under the umbrella of Merck KGaA, in which the Merck family holds an approximately 70% interest and shareholders own the remaining approximately 30%. In 1917 the U.S. subsidiary Merck & Co. was expropriated and has been an independent company ever since

Merck in India

Merck Limited (formerly E. Merck Limited) was set up in India as the first Merck subsidiary in Asia in 1967. The Merck Group has been operating in India through appointed agents since a little before the turn of the twentieth century. The Company operates both its Pharmaceuticals and Chemicals businesses in the country. Merck was also the first Merck Group Company to go public in the year 1981. The Merck Group now holds 51.8% of the share capital in Merck Limited, while the remaining 48.2% is traded on the Bombay Stock Exchange Ltd. and National Stock Exchange of India Ltd. Merck Specialities Pvt. Ltd., the wholly owned Indian subsidiary of Merck KGaA, was incorporated in 2005

Following the acquisition of Millipore, a leading life science company in USA, in 2010; the resulting entity, Merck Millipore is now a leader in the field of life sciences. Prior to that, in 2009, Merck acquired Bangalore Genei to become one of the leading bioscience entities in India. In 2011 (January – December), the turnover of Merck Limited totalled Rs. 5576 million

Merck, through its manufacturing facility at Goa, is the only manufacturer of Guaiazulene, Thiamine Disulfide (TDS) and Oxynex ST, in addition to being the largest manufacturer of Vitamin E in India. Merck in India also produces injectables and soft gel capsules; its Dehydrated Culture Media plant is the first for Merck outside Germany.

About Performance Materials

Merck’s Performance Materials division offers highly innovative materials, advanced technologies, and high-tech chemicals to clients in the consumer electronics, lighting, printing, plastics, and cosmetics industries. Our market leader products include liquid crystals for LCD displays, new lighting technologies, and functional and effect pigments.

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. 52.93
UK Pound	1	Rs. 85.85
Euro	1	Rs. 69.94

INFORMATION DETAILS

Report Prepared by :

NID

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	8
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	8
--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	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		72

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.