MIRA INFORM REPORT

Report Date :

06.12.2013

IDENTIFICATION DETAILS

Name :		NATCO PHARMA LIMITED [w.e.f.1994]
Formerly Known As :		NATCO FINE PHARMACEUTICALS PRIVATE LIMITED
Registered Office :		Natco House, Road No.2, Banjara Hills, Hyderabad – 500033, Andhra Pradesh
Country :		India
Financials (as on) :		31.03.2013
Date of Incorporation :		19.09.1981
Com. Reg. No.:		01-003201
Capital Investment / Paid-up Capital :		Rs.313.731 Millions
CIN No.: [Company Identification No.]		L24230AP1981PLC003201
TAN No.: [Tax Deduction & Collection Account No.]		HYDN00304D / HYDN00010D
Legal Form :		A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :		The Company is primarily engaged in manufacturing of active pharmaceuticals ingredients and finished dosage formulations
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

A (65)

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 21510000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Exist
Comments :	Subject is a well-established and reputed company having fine track record. Financial position of the company appears to be sound. Directors are reported to be experienced and respectable businessmen. Over all fundamentals of the company appears to be strong and healthy. Trade relations are reported as fair. Business is active. Payments are reported to be regular ans 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 – March 31^st, 2013

Country Name	Previous Rating (31.12.2012)	Current Rating (31.03.2013)
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

The current downturn provides an opportunity to push ahead with reforms to accelerate growth, says the latest India Development Update report released by the World Bank. The report says that the adverse effects of rupee depreciation are likely to be offset by the gains in the exports performance due to improved external competitiveness. Since May this year, the local currency has depreciated substantially and fell to a record level of Rs 68.85 to a dollar on August, 28.

A stagflation like situation appears to have arisen as inflation jumped to an eight month high of 6.46 % for the month of September. It is up from 6.10 % in August. Growth continues to be muted with factory output plunging to 0.6  % in August. Onion prices have risen nearly 300 % from last September. Vegetables cost nearly 90 % more than they did last year. Wake up to the economic contribution of slum dwellers. They contribute more than 7.5 % to the country’s gross domestic product, according to a recent study conducted in 50 top cities.

136000 estimated number of jobs created during the second quarter of the current financial year. 50000 estimated number of additional jobs in the field of corporate social responsibility in the coming years.

The International Finance Corporation expects to come out with its rupee linked bonds issue before the end of 2013 as a part of its plan to raise $ 1 billion. The Apple iPhone 5c (Rs 41900 for 16 GB variant) and 5s (Rs 53500 for 16GB variant) has been launched in India from 1^st November.

The Land Acquisition Act to provide just and fair compensation to farmers will come into force from January 1 next year, said Rural Development Minister Jairam Ramesh. The Act replaces a 119 year old registration. The Securities and Exchange Board of India has approved the trading of currency futures on the Bombay Stock Exchange. The exchange plans to launch the currency futures platform with advanced trading technology by the end of November.

EXTERNAL AGENCY RATING

Rating Agency Name	ICRA
Rating	SP3A
Rating Explanation	Moderate performance capability and high financial strength.
Date	July 2013

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 / Corporate Headquarters:	Natco House, Road No.2, Banjara Hills, Hyderabad – 500033, Andhra Pradesh, India
Tel. No.:	91-40-2354 7532 / 2354 8243
Fax No.:	91-40-2354 5298
E-Mail :	natinfo@natcopharma.co.in info@natcopharma.co.in legal@natcopharma.co.in investors@natcopharma.co.in
Website :	www.natcopharma.co.in
Factory 1 :	Pharma Division Kothur Post, Kothur Mandal, Mahaboobnagar District - 509228, Andhra Pradesh, India
Tel. No.:	91-8548-257289 / 257173
Fax No.:	91-8548-257290
Factory 2 :	Pharma Division- Parenterals Vijayapuri North, Nagarjuna Sagar, Nalgonda District – 508202, Andhra Pradesh, India
Tel. No.:	91-8680-276661
Fax No.:	91-8680-276246
Factory 3 :	Chemical Division Mekaguda, Kothur Mandal, Mahaboobnagar District – 509228, Andhra Pradesh, India
Tel. No.:	91-8548-2492493 / 229496
Fax No.:	91-8548-249401
Factory 4 :	Chemical R and D Division B – 11, Industrial Estate, Sanathnagar, Hyderabad – 500018, Andhra Pradesh, India
Tel. No.:	91-40-23710575
Fax No.:	91-40-23710578
Factory 5 :	Formulations Division Plot No.19, Pharma City, Selaqui Industrial area, Vakas Nagar, Dehradun - 248001, Uttarakhand, India
Tel. No.:	91-40-23547532 (for Domestic Marketing)
Fax No.:	91-40-23541217
E-mail :	sales@natcopharma.co.in
Factory 6 :	Formulations Division Plot No.A3, UPSIDC, Selaqui Industrial area, Dehradun – 248001, Uttarakhand, India
Factory 7 :	Natco Organics Limited No.74/B, Vakkadu Village, Manali New Town, Chennai – 600103, Tamilnadu, India
Tel. No.:	91-44-29011779

DIRECTORS

As on 31.03.2013

Name :	Mr. V.C Nannapaneni
Designation :	Chairman and Managing Director
Name :	Mr. T.V. Rao
Designation :	Director – Nominee of Export-Import Bank of India
Name :	Mr. G.S. Murthy
Designation :	Director
Name :	Dr B.S. Bajaj
Designation :	Director
Name :	Dr. Jasti Samba Siva Rao
Designation :	Director (Till 6^th May, 2013)
Name :	Dr. A.K.S. Bhujanga Rao
Designation :	President [Research and Development and Technical]
Name :	Mr. Nitin Jagannath Deshmukh
Designation :	Director

KEY EXECUTIVES

Name :	Mr. M. Adinarayana
Designation :	Company Secretary and Vice President (Legal and Corporate Affairs)

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.09.2013

Category of Shareholder	Total No. of Shares	% of Total No. of Shares
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	10250479	32.67
Bodies Corporate	7023394	22.39
Sub Total	17273873	55.06
(2) Foreign
Individuals (Non-Residents Individuals / Foreign Individuals)	487708	1.55
Sub Total	487708	1.55
Total shareholding of Promoter and Promoter Group (A)	17761581	56.61
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	3946081	12.58
Financial Institutions / Banks	2182	0.01
Foreign Institutional Investors	2147724	6.85
Sub Total	6095987	19.43
(2) Non-Institutions
Bodies Corporate	1262856	4.03
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 million	3198990	10.20
Individual shareholders holding nominal share capital in excess of Rs. 0.100 million	2355027	7.51
Any Others (Specify)	698633	2.23
Non Resident Indians	155762	0.50
Trusts	528280	1.68
Clearing Members	14591	0.05
Sub Total	7515506	23.96
Total Public shareholding (B)	13611493	43.39
Total (A)+(B)	31373074	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)	31373074	0.00

BUSINESS DETAILS

Line of Business :

The Company is primarily engaged in manufacturing of active pharmaceuticals ingredients and finished dosage formulations

Products :

Item Code Number	Product Description
29419090	Cefotaxime
29051200	Isopropyl Alcohol
39123901	Ethyl Cellulose
29420039	Cotalopram
29420090	Sumatriptan Succinate
29420090	Sertraline

• Diltiazem
• Omeprazole
• Lansoprazole
• Isosorbides
• Sumartriptan Succinate
• Ondanssetron
• Sertraline
• Granisetron
• Paroxetine
• Newer Quinolones and fourth generation Cephalosorins

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

• Allahabad Bank
• State Bank of India
• Corporation Bank
• Oriental Bank of Commerce
• Export-Import Bank of India

Facilities :

SECURED LOANS	31.03.2013 (Rs. in Millions)	31.03.2012 (Rs. in Millions)
LONG TERM BORROWINGS
Term loan
Bank	1268.413	964.196
Other Parties	609.176	803.647
SHORT TERM BORROWINGS
From Bank	947.560	717.089
Total	2825.149	2484.932

NOTE:

Terms and conditions of loans and nature of security

(i) Term loans amounting to Rs. 696.676 (31 March 2012: Rs. 941.147) is secured by pari-passu first charge on the entire immovable properties and movable fixed assets both present and future of Mekaguda Unit and part of the loan is further secured by an exclusive charge on all the immovable properties and movable fixed assets of both the units (Plot No-19 and Plot NoA-3) at Dehradun and exclusive charge on the R&D equipment acquired from the loan amount.

(ii) Term loan amounting to Rs. 327.559 (31 March 2012: Rs. 410.814) is secured by an exclusive charge over all movable and immovable fixed assets of NATCO Research Center and a part of the loan is secured by first charge on the movable and immovable fixed assets of Mekaguda unit along with other lenders.

(iii) Term loan amounting to Rs. 853.353 (31 March 2012: Rs. 415880) is secured by pari-passu first charge on the entire fixed assets both present and future of Kothur Unit. All the above loans are guaranteed by Mr. V.C Nannapaneni, Chairman and Managing Director and carry interest linked to the respective Bank's / Institution's prime / base lending rate, and range from 3.53% per annum to 12.75% per annum (31 March 2012: 3.53% per annum to 14% per annum).

Details of repayment of long term borrowings

Particulars	31.03.2013	31.03.2012
Up to 1 year	506.895	429.033
From 1 to 3 years	854.153	1030.006
3 years and above	517.083	310.980
Total	1878.131	1770.019

Banking Relations :	--
Auditors :
Name :	M/s. Walker, Chandiok and Company Chartered Accountants
Address :	7th Floor, Block III, White House, Kundan Bagh, Begumpet Hyderabad – 500016, Andhra Pradesh, India
Subsidiaries :	v NATCO Pharma Inc., United States of America v Timecap Overseas Limited, Mauritius v NATCO Pharma (Canada) Inc., Canada
Subsidiary company (w.e.f. 30 June 2012) Entity in which Directors have control or have significant influence (up to 29 June 2012)	v NATCO Organics Limited
Partnership firm in which the Company is a partner	v K and C Pharmacy, United States of America (Up to 14 June 2012)
Stepdown subsidiary company	v NATCO Farma Do Brazil Ltda EPP
Entities in which Directors have control or have significant influence	v Time Cap Pharma Labs Limited v NATCO Trust, Hyderabad v NATCO Group Employees Welfare Trust v Natsoft Information Systems Private Limited v NDL Infratech Private Limited

CAPITAL STRUCTURE

As on 31.03.2013

Authorised Capital :

No. of Shares	Type	Value	Amount
32000000	Equity Shares	Rs.10/- each	Rs.320.000 Millions
3000000	Preference Shares	Rs.10/- each	Rs.30.000 Millions
	Total		Rs.350.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
31373074	Equity Shares	Rs.10/- each	Rs.313.731 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2013	31.03.2012	31.03.2011
I. EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	313.731	311.479	281.479
(b) Reserves & Surplus	5062.059	4363.168	3187.584
(c) Money received against share warrants	0.000	0.000	0.000
(2) Share Application money pending allotment	0.000	0.000	0.000
Total Shareholders’ Funds (1) + (2)	5375.790	4674.647	3469.063
(3) Non-Current Liabilities
(a) long-term borrowings	1371.236	1340.986	1254.340
(b) Deferred tax liabilities (Net)	411.199	288.940	250.869
(c) Other long term liabilities	6.910	13.536	12.486
(d) long-term provisions	82.122	65.906	86.723
Total Non-current Liabilities (3)	1871.467	1709.368	1604.418
(4) Current Liabilities
(a) Short term borrowings	1477.435	816.422	720.226
(b) Trade payables	1044.243	838.649	729.891
(c) Other current liabilities	802.514	818.384	436.497
(d) Short-term provisions	3.306	34.248	1.195
Total Current Liabilities (4)	3327.498	2507.703	1887.809
TOTAL	10574.755	8891.718	6961.290
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	4656.460	3000.318	2524.482
(ii) Intangible Assets	49.109	17.753	16.996
(iii) Capital work-in-progress	783.678	1644.272	759.795
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	767.592	741.573	690.502
(c) Deferred tax assets (net)	0.000	0.000	0.000
(d) Long-term Loan and Advances	1206.628	757.787	624.604
(e) Other Non-current assets	1.265	4.221	9.554
Total Non-Current Assets	7464.732	6165.924	4625.933
(2) Current assets
(a) Current investments	8.121	7.375	21.390
(b) Inventories	1283.199	972.834	930.201
(c) Trade receivables	1264.636	933.359	703.706
(d) Cash and cash equivalents	93.689	336.973	309.749
(e) Short-term loans and advances	426.885	426.384	369.236
(f) Other current assets	33.493	48.869	1.075
Total Current Assets	3110.023	2725.794	2335.357
TOTAL	10574.755	8891.718	6961.290

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2013	31.03.2012	31.03.2011
	SALES
		Income	5578.524	4356.758	3483.477
		Other Income	119.399	95.148	51.870
		TOTAL	5697.923	4451.906	3535.347
Less	EXPENSES
		Cost of materials consumed (including packing material)	1806.272	1176.723	960.104
		Purchases of stock-in-trade	55.815	155.317	167.273
		Changes in inventories of finished goods, work-in-progress and traded goods	(212.489)	10.835	(117.615)
		Employee benefit expenses	853.621	671.342	534.387
		Other expenses	1506.004	1228.913	1065.895
		TOTAL	4009.223	3243.130	2610.044
	PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION		1688.700	1208.776	925.303
Less	FINANCIAL EXPENSES		251.193	229.595	141.979
	PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION		1437.507	979.181	783.324
Less/ Add	DEPRECIATION/ AMORTISATION		198.415	154.052	143.480
	PROFIT BEFORE EXCEPTIONAL ITEMS AND TAX		1239.092	825.129	639.844
	EXCEPTIONAL ITEM		115.841	0.000	0.000
	PROFIT/ (LOSS) BEFORE TAX		1123.251	825.129	639.844
Less	TAX		341.818	203.849	118.641
	PROFIT/ (LOSS) AFTER TAX		781.433	621.280	521.203
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		2405.140	1962.463	1546.906
Less	APPROPRIATIONS
		Transfer to General Reserve	80.000	70.000	40.000
		Dividend	125.492	93.444	56.296
		Tax on Dividend	20.358	15.159	9.350
	BALANCE CARRIED TO THE B/S		2960.723	2405.140	1962.463
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	2817.396	1790.196	1300.937
		Sale of services	145.679	33.718	71.259
		Technology Income	112.125	0.000	0.000
		Income from profit sharing arrangement	121.027	36.765	18.940
		Interest on loans to subsidiary company	8.535	5.866	8.043
	TOTAL EARNINGS		3204.762	1866.545	1399.179
	IMPORTS
		Raw materials and packing materials	375.630	167.475	169.597
		Capital goods (including spares and components)	110.404	220.712	153.510
	TOTAL IMPORTS		486.034	388.187	323.107
	Earnings / (Loss) Per Share (Rs.)
	Basic		25.02	21.39	18.52
	Diluted		24.91	21.39	18.52

QUARTERLY RESULTS

Particulars	Jun 2013	Sep 2013
Audited / UnAudited	UnAudited	UnAudited
Net Sales	1448.200	1500.600
Total Expenditure	997.300	1034.300
PBIDT (Excl OI)	450.900	466.300
Other Income	35.000	17.700
Operating Profit	485.900	484.000
Interest	95.800	95.700
Exceptional Items	0.000	0.000
PBDT	390.100	388.300
Depreciation	64.100	65.600
Profit Before Tax	326.000	322.700
Tax	98.600	35.800
Provisions and contingencies	0.000	0.000
Profit After Tax	227.400	286.900
Extraordinary Items	0.000	0.000
Prior Period Expenses	0.000	0.000
Other Adjustments	0.000	0.000
Net Profit	227.400	286.900

KEY RATIOS

PARTICULARS		31.03.2013	31.03.2012	31.03.2011
PAT / Total Income	(%)	13.71	13.95	14.74
Net Profit Margin (PBT/Sales)	(%)	20.13	18.94	18.37
Return on Total Assets (PBT/Total Assets}	(%)	12.45	12.68	11.61
Return on Investment (ROI) (PBT/Networth)		0.21	0.18	0.18
Debt Equity Ratio (Total Debt/Networth)		0.53	0.46	0.57
Current Ratio (Current Asset/Current Liability)		0.93	1.07	1.24

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	Yes
5]	Type of Business	Yes
6]	Line of Business	Yes
7]	Promoter's background	No
8]	No. of employees	No
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	Yes
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	Yes
31]	Date of Birth of Proprietor/Partner/Director, if available	No
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

LITIGATION DETAILS:

ITTASR 2775 / 2008 CASE IS: PENDING
PETITIONER:- THE COMMISSIONER OF INCOME TAX-IV PETN.ADV.:- PRASAD (SC FOR INCOME TAX) SUBJECT :- U/Sec. 143 Assessment	RESPONDENT:- VS M/S NATCO PHARMA LTD., RESP.ADV.:- DISTRICT:- HYDERABAD
FILING DATE: 17.09.2008 POSTING STAGE: FOR ADMISSION AND REPLY REG. DATE : 16.04.2012 LISTING DATE : 15.11.2012 STATUS : ADMIT
HON’BLE JUDGE(S): GODA RAGHURAM M.S.RAMCHANDRA RAO

UNSECURED LOANS

PARTICULAR	31.03.2013 (Rs. in Millions)	31.03.2012 (Rs. in Millions)
LONG TERM BORROWINGS
Deffered payment Liability	0.542	2.177
Current maturities of long-term borrowings	(506.895)	(429.034)
SHORT TERM BORROWINGS
From Bank	529.875	99.333
Total	23.522	(327.524)

NOTE:

Long Term Borrowings

Deferred payment liabilities

Represents interest free sales tax deferment, availed under the ‘TARGET 2000’ Scheme of the Government of Andhra Pradesh, India.

Short Term Borrowings

Unsecured loans are personally guaranteed by Mr. V.C. Nannapaneni, Chairman and Managing Director

INDEX OF CHARGES

S.No.	Charge ID	Date of Charge Creation/Modification	Charge amount secured	Charge Holder	Address	Service Request Number (SRN)
1	10356550	06/03/2013 *	400,000,000.00	ICICI BANK LIMITED	LANDMARKRACE COURCE CIRCLE, ALKAPURI, BARODA, Guj arat - 390015, INDIA	B70186960
2	10276521	04/07/2012 *	500,000,000.00	EXPORT IMPORT BANK OF INDIA	Floor 21, Center One Building, World Trade Center, Cuffee Parade, Mumbai, Maharashtra - 400005, INDIA	B44480861
3	10275931	13/02/2012 *	357,500,000.00	Barclays Bank Plc	8/2/686/B/6/A, 12th Square Building, 601 Ground Road No.12 Banara Hills, HYDERABAD, Andhra Pradesh - 500034, INDIA	B33940198
4	10271782	27/09/2013 *	2,234,000,000.00	Allahabad Bank	Industrial Finance Branch, 6-3-850/3, 1st floor, Sreenivasa Plaza, Ameerpet,, Hyderabad, Andhra Pradesh - 500016, INDIA	B87796264
5	10241955	04/07/2012 *	440,000,000.00	EXPORT IMPORT BANK OF INDIA	Floor 21, Center One Building,, World Trade Center, Cuffee Parade, Mumbai, Maharashtra - 400005, INDIA	B44480341
6	10224989	16/08/2013 *	1,550,000,000.00	AXIS BANK LIMITED	CORPORATE BANKING BRANCH, 6-3-879/B 1ST FLOOR, GPULLA REDDY BUILDING, GREEN LANDS, BEGUMPET ROAD, HYDERABAD, Andhra Pradesh - 500016, INDIA	B84032606
7	10201129	05/08/2010 *	200,000,000.00	CITIBANK N.A.	#24, 3rd FLOOR,CANBERRA BLOCK, UB CITY, VITTAL MA LLYA ROAD, BANGLORE, Karnataka - 560001, INDIA	A91319582
8	90126960	21/12/2004	2,000,000.00	EXPORT - IMPORT BANK OF INDIA	CENTRE ONE BUILDING . FLOOR-21, WORLD TRADE CENTRE COMPLEX; CUFFE PARADE, MUMBAI, Maharashtra - 400005, INDIA	-
9	90340115	27/02/1998	1,500,000.00	STATE BANK OF HYDERABAD;	SANATHNAGAR BRANCH; HYDERABAD, Andhra Pradesh, INDIA	-
10	90258288	30/09/2004 *	100,000,000.00	STRESSED ASSETS STABILISATION FUND	IDBI TOWER, WTC COMPLEX, MUMBAI, Maharashtra - 400005, INDIA	-
11	90259747	25/11/2002 *	107,100,000.00	STATE BANK OF INDIA	INDUSTRIAL FINANCE BRANCH, SOMAJIGUDA, HYDERABAD, Andhra Pradesh, INDIA	-
12	90258131	07/11/1995	140,000,000.00	EXPORT IMPORT BANK OF INDIA	CENTRE ONE, WORLD TRADE CENTRE; CUFFE PARADE, BOMBAY, Maharashtra - 400005, INDIA	-
13	90130924	14/10/1995	307,280,000.00	ALLAHABAD BANK & S.B.I.	2. N.S. ROAD, CULCUTTA, West Bengal, INDIA	-
14	90124717	26/07/1995	7,080,000.00	ALLAHABAD BANK	2 N. S. ROAD, CALCUTTA, West Bengal, INDIA	-
15	90124716	19/07/1995	32,300,000.00	ALLAHABAD BANK	7 - N. S. ROAD, CALCUTTA, West Bengal, INDIA	-
16	90258081	30/09/2004 *	16,500,000.00	STRESSED ASSETS STABILISATION FUND	IDBI TOWER, WTC COMPLEX, MUMBAI, Maharashtra - 400005, INDIA	-
17	90340009	26/12/1995 *	9,700,000.00	ORIENTAL BANK OF COMMERCE	NAMPALLY STATION ROAD, HYDERABAD, Andhra Pradesh, INDIA	-
18	90257860	30/09/2004 *	87,500,000.00	STRESSED ASSETS STABILISATION FUND	IDBI TOWER, WTC COMPLEX, MUMBAI, Maharashtra - 400005, INDIA	-
19	90338707	13/11/1992	5,300,000.00	CENTRAL BANK OF COMMRCE;	NAMPOLLY BRANCH, HYDERABAD, Andhra Pradesh, INDIA	-
20	90259582	09/12/1994 *	11,450,000.00	ORIENTAL BANK OF COMMERCE	NAMPALLY STATION ROAD, HYDERABAD, Andhra Pradesh, INDIA	-
21	90339937	20/04/1995 *	11,450,000.00	ORIENTAL BANK OF COMMERCE	NAMPALLY STATION ROAD, HYDERABAD, Andhra Pradesh, INDIA	-
22	90120563	15/03/1995 *	18,160,000.00	ALLAHABAD BANK	2 NETAJI SUBASH ROAD, CALCUTTA, West Bengal - 7000 01, INDIA	-
23	90263108	28/03/1985 *	105,822.00	DCL FINANCE LTD.	DEDDAN CHAMBERS, SOMAJIGUDA, HYDERABAD, Andhra Pr adesh - 500482, INDIA	-
24	90340619	27/02/1989	1,800,000.00	STATE BANK OF HYDERABAD;	SANATHNAGAR BRANCH;, HYDERABAD, Andhra Pradesh, IN DIA	-
25	90119705	14/10/1988	9,000,000.00	ANDHRA PRADESH INDUSTRIAL DEVELOPMENT CORPORATION	PARISRAMA BHAVANAM; 5-9-58/B, FATEH; MAIDEN ROAD, HYDERABAD, Andhra Pradesh - 500029, INDIA	-
26	90120270	29/12/1988 *	9,000,000.00	ANDHRA PRADESH INDUSTRIAL DEVELOPMENT CORPORATION	PARISRAMA BHAVANAM; 5-9-58/B, FATEH; MAIDEN ROAD, HYDERABAD, Andhra Pradesh - 500029, INDIA	-
27	90120268	05/11/1992 *	12,520,000.00	ALLAHABAD BANK	NO. 2, NETAJI SUBASH ROAD, CALCUTTA, West Bengal - 700001, INDIA	-
28	90120242	28/03/1988	3,600,000.00	ANDHRA PRADESH INDUSTRIAL DEVELOPMENT CORPORATION	PARISRAMA BHAVANAM; 5-9-58/B, FATEH; MAIDEN ROAD, HYDERABAD, Andhra Pradesh - 500029, INDIA	-
29	90120208	29/12/1988 *	6,000,000.00	ANDHRA PRADESH STATE FINANCIAL CORPORATION	CHIRAG ALI LANE, HYDERABAD, Andhra Pradesh - 50000 1, INDIA	-

* Date of charge modification

OPERATING RESULTS:

You will be pleased to note that during the year , the API division exhibited an exemplary performance, establishing new in revenues, which have grown by an aggregate of 51% over that of the previous year.

The revenues from this division recorded Rs. 2230.000 millions (2011-12 :Rs. 1480.000 millions). This division continues to roll out good performance, thanks to their entry into niche markets.

The revenues from the finished dosages pharmaceutical formulations division during the year stood at Rs. 3980.000 millions against Rs. 3700.000 millions last year, recording a modest 7% growth. However, the exports from this segment recorded a revenue base of Rs. 1030.000 millions (Rs. 660.000 millions during 2011-12), exhibiting a growth of over 56%.

REVIEW OF 2013 PERFORMANCE:

API DIVISION:

It is quite heartening to note the excellent performance of API division, which is reflected in the 51% growth in its revenues for the year 2012-13, as compared to the revenues during 2011-12. TheDirectors are pleased to record that the API division has established an excellent growth of 40% during the year . While some amount of this growth is attributable to the volatile exchange rate fluctuations, it is a matter of comfort that the division could register a stellar performance during the year. Domestic sales of APIs remained stagnant at Rs. 320.000 millions (Rs. 310.000 millions in 2011-12) while exports at Rs. 1910.000 millions (2011-12 : Rs. 1170.000 millions) recorded a growth of 63%.

Having recognized the potential that this business segment offers, efforts are being made to further strengthen this segment by focusing on niche markets and new products. In view of the visible potential for this business segment, themanagement is examining the necessity for undertaking expansion - in terms of new blocks of manufacture and developing new molecules. As a part of this effort, thecompany continues to file Drug Master Files for different products in various regulatory and semi-regulatory markets. The table given in Annexure A to this report indicates the updated status relating to filing of Drug Master Files.

These filings would enable the company to reach out to international customers who are spread across the globe. While the revenue figures do not include the value of APIs used for captive consumption, the division's contribution to the revenues of the finished dosage pharmaceutical formulations segment cannot be undermined. Being a responsible corporate citizen, thecompany cares for the environment and the API manufacturing facility continues to enjoy the ISO:14001certification for its environmental management efforts. This is in addition to numerous regulatory approvals that the facility enjoys including, principally, those from US FDA and Australian TGA as well.

API DIVISION : OUT LOOK FOR 2013-14 :

While the API division continues to churn out commendable performance, a significant challenge lies in sustaining and improving this performance. It is vital that the company concentrates on large governmental customers in niche markets (such as South American nations) and on new molecules and strive to achieve economies of scale in production of the existing molecules. Themanagement is exploring various options towards this end.

NATCO Organics Limited, which has gone into production during 2011-12, is gearing up to improve its performance and is expected to achieve cash break-even levels of operations during late 2013-14. Products from this unit are sure to help in reaching a wider range of international customers. For one of the Para IV challenges that the company has filed recently, the raw material is being sourced from NATCO Organics. Establishment of additional blocks of manufacture are being contemplated at this Plant to ensure that the growing demands are adequately met.

FINISHED DOSAGE FORMULATIONS DIVISION :

The high-light of the division's performance lies in its record growth - at Rs. 103 Crores of revenues - of over 56% in exports, thanks to the marketing approvals that the company received from US FDA, notably that of Lansoprazole. Between the last week of December, 2012 and 31st March, 2013, the company could garner a revenue base of Rs. 22 Crores from this product. While the market-share from this product was less than expectations, themanagement is sure that the product would stabilize and achieve a decent market share. The other products for which we had received approvals from the US FDA, and which have since been launched in the US markets have performed well.

The company has also received approvals for marketing of Rizatriptan tablets and shipments of this product have since commenced.

Revenues from the domestic oncology segment, however, remained stagnant at around Rs. 1400.000 millions, This segment has become severely competitive and some of the domestic players and a couple of multi-nationals as well have effected a down-ward revision in the prices of some of the products.

The generic version of Nexavar, for which thecompany was the first to receive a compulsory license, recorded a satisfactory level of sales. During the year , the Intellectual Property Appellate Bench has up-held the compulsory license granted to the Company for this product, while increasing the royalty payable to the innovator to 7%.

The growing competition, drying up of the product pipe-line and the regulations concerning pricing policy for domestic sales etc. are some factors which are causing a certain amount of anxiety for any possible growth in this segment. In spite of this, thecompany remains a strong player in the oncology segment, and one of the fastest growing companies in the pharma space..NATCO, itself being a research oriented company, respects intellectual property and rights associated therewith. NATCO has been and would always try to maintain a balance between the IP protection and the need to make available quality drugs at an affordable price. To this end in view, thecompany strongly believes generic companies - such as NATCO - should be encouraged by the Government by finding a solution within the available legal frame work.

A couple of products being manufactured and sold by the company have been subjected to pricing regulations in view of the Drugs Price Control Order and their prices have been revised downward in line with the Order. The impact of this reduction on the revenues and profitability is insignificant.

As far as the domestic market is concerned, thecompany assumes a demanding environment and to meet the challenges that are likely to be encountered, thecompany and management is engaged in a series of activities which would ultimately result in strategic moves. These strategies are expected to effectively counter the challenges that they expect to encompass in the coming years.

FINISHED DOSAGE PHARMACEUTICAL FORMULATIONS OUTLOOK FOR 2013-14 :

While due note is taken of the ever demanding challenges, thecompany expects to maintain a stable growth from this segment. A strong push is expected from an aggressive foray into regulated markets. The Directors would like to assure that despite these issues, the segment to do well and maintain its growth. In this context, thecompany is aiming to establish a strong base in the regulatory markets. Thecompany is moving towards a "ready" mode to take full advantage of the emerging opportunities.

The Company is contemplating establishment of a cyto-toxic injectable facility at Kothur.

FORMULATION EXPORTS : EMERGING SCENARIO :

The year 2012-13 saw NATCO's Lansoprazole (Rx) and Rizatriptan launches in the USA in collaboration with Breckenridge Pharmaceuticals and Actavis. Both the products have recorded a satisfactory level of sales.

The company expects to receive marketing authorizations for several key products / molecules in the coming years. As and when these are received and products launched, they are likely to result in enhanced revenues and profits. The company has completed all major expansion plans and separate manufacturing blocks for Glatiramer Acetate (API) and Lansoprazole, Oncology Block, Lenalidomide block etc. have been completed.

The company received a favorable verdict from the Court of Appeals, relating to Copaxone®, which should clear the decks for its launch in May, 2014. The launch of this product is likely to push the company into big league, resulting in a significant increase in sales as well as profits.

Though the company has a number of marketing opportunities in terms of para IV challenges and First-to-File (FTF) status, the inordinate delay in granting approvals and efforts by the innovators to curtail and restrict the value of these opportunities has to be carefully dealt with.

FIXED ASSETS

TANGIBLE ASSET:

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

INTANGIBLE ASSET:

• Software

STATEMENT OF STAND-ALONE FINANCIAL RESULTS FOR THE QUARTER ENDED

30^TH SEPTEMBER, 2013

PARTICULARS	THREE MONTHS ENDED (REVIEWED)
	30.09.2013	30.06.2013
01. Gross Sales / Income from Operations	1401.900	1425.400
Less : Excise Duty	37.500	29.100
Less : Sales Tax	26.900	27.800
Net Sales / Income from Operations	1337.500	1368.500
02. Other Operating Income	163.100	79.700
03. TOTAL INCOME FROM OPERATIONS	1500.600	1448.200
04. EXPENDITURE
a) Cost of materials consumed	375.500	387.100
b) Purchases of stock-in-trade	-	-
c) Changes in inventories of finished goods, work-in- progress and stock-in-trade	(22.700)	(27.500)
d) Employee benefits expense	221.400	220.500
e) Depreciation and amortization expense	65.600	64.100
f) Other Expenses	460.100	417.200
TOTAL EXPENSES	1099.900	1061.400
05. Profit / (Loss) from Operations before other income, finance costs and exceptional items	400.700	386.800
06. Other Income	17.700	35.000
07. Finance costs	95.700	95.800
08. Exceptional Items	-	-
09. Profit / (Loss) from ordinary activities before tax	322.700	326.000
10. Tax expense, including deferred tax	35.800	98.600
11. Net Profit / Loss (-) from ordinary activities after tax	286.900	227.400
12. Paid-up Equity Share Capital (each share of Rs. 10/- face value)	313.700	313.700
13. Reserves excluding revaluation reserves as per Balance Sheet of previous accounting year
14. Earnings per share – Basic and diluted EPS before and after extraordinary item (Rs.) – non-annualized	9.15 9.15	7.25 7.25
15. Public Shareholding: a) Number of Shares b) Percentage of Shareholding	13,611,493 43.39	13,607,593 43.37
16. Promoters and Promoter Group Shareholding a) Pledged / Encumbered – b) Non – encumbered – No. of shares Percentage (as a % of the total shareholding of promoter and promoter group) Percentage (as a % of the total share capital of the company)	- 17,761,581 100.00 56.61	- 17,765,481 100.00 56.63

Status of Investor Complaints	30.09.2013
Pending as on 01-07-2013	NIL
Received during the quarter	52
Resolved during the quarter	52
Pending as on 30-09-2013	NIL

PARTICULARS	30.09.2013
	Un-audited
I. Equity and liabilities
Shareholders' funds
Share capital	313.700
Reserves and surplus	5587.700
	5901.400
Non-current liabilities
Long-term borrowings	1315.700
Deferred tax liabilities (net)	408.000
Other long term liabilities	6.900
Long-term provisions	94.800
	1825.400
Current liabilities
Short-term borrowings	1679.400
Trade payables	980.800
Other current liabilities	1015.300
Short-term provisions	3.300
	3678.800
Total	11405.600
II. Assets
Non-current assets
Fixed assets
Tangible assets	4865.800
Intangible assets	48.200
Capital work-in-progress	1023.800
Non-current investments	783.000
Long-term loans and advances	1192.500
Other non-current assets	-
	7913.300
Current assets
Current investments	8.100
Inventories	1354.900
Trade receivables	1489.000
Cash and bank balances	114.200
Short-term loans and advances	491.100
Other current assets	35.000
	3492.300
	11405.600

REPORT OF SEGMENT WISE REVENUE, RESULTS AND CAPITAL EMPLOYED, (UN-AUDITED) UNDER CLAUSE 41 OF THE LISTING AGREEMENT, FOR THE QUARTER ENDED ON 30^TH SEPTEMBER, 2013

PARTICULARS	THREE MONTHS ENDED (REVIEWED)
	30.09.2013	30.06.2013
01. Segment Revenue (Net)
a) Bulk Chemicals	557.000	637.000
b) Formulations	961.600	648.800
c) Job Work	41.800	19.500
d) Unallocated	3.800	184.100
Total	1564.200	1489.400
Less : Inter-segment Revenue	63.600	41.200
Net Sales / Income from Operations	1500.600	1448.200
02. Segment Results : Profit (+)/Loss (-) before tax and interest
a) Bulk Chemicals	105.100	151.700
b) Formulations	447.400	218.600
c) Job Work	33.200	13.900
d) Unallocated	2.100	167.300
Total	587.800	551.500
Less : a) Interest	95.700	95.800
b) Oher unallocable expenditure	187.100	164.700
c) Unallocable income	17.700	35.000
Total Profit Before Tax	322.700	326.000
03. Capital Employed (Segment Assets – Segment Liabilities)
a) Bulk Chemicals	3701.700	3737.000
b) Formulations	3517.000	3087.300
c) Job Work	29.500	15.600
e) Unallocated (Others)	(1346.800)	(1236.700)
Total	5901.400	5603.200

The above un-audited financial results were reviewed by the Audit Committee, Statutory Auditors and approved by the Board of Directors at a meeting held at Hyderabad, on Thursday, the 14th November, 2013. In respect of non-accounting of minimum alternate tax credit, referred to in the review report, the company will evaluate the position during the current financial year. Figures for the previous period(s) have been re-arranged / re-grouped wherever necessary. Exceptional item represents amount written off against a pending legal dispute. Employee benefit expenses for the quarter and six months ended 30 September 2012 include Rs. 50.400 millions and Rs. 36.200 millions respectively, pertaining to stock options vested during the earlier period.

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.61.69
UK Pound	1	Rs.101.08
Euro	1	Rs.84.07

INFORMATION DETAILS

Report Prepared by :

ANK

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	8
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	7
--CREDIT LINES	1~10	7
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	YES
--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
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		65

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.