MIRA INFORM REPORT

Report Date :

28.06.2013

IDENTIFICATION DETAILS

Name :	STERLING BIOTECH LIMITED STERLING GELATIN (A DIVISION OF STERLING BIOTECH LIMITED)
Registered Office :	43 Atlanta Building, Nariman Point, Mumbai - 400021, Maharashtra
Country :	India
Financials (as on) :	31.12.2011
Date of Incorporation :	23.03.1985
Com. Reg. No.:	11-035738
Capital Investment / Paid-up Capital :	Rs. 267.874 millions
CIN No.: [Company Identification No.]	L51900MH1985PLC035738
TAN No.: [Tax Deduction & Collection Account No.]	MUMS16116C
PAN No.: [Permanent Account No.]	AABCS1946H
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Manufacture of Gelatin.
No. of Employees :	Not Available [We tried to confirm the number of employees but no one is ready to part any information from the company management]

RATING & COMMENTS

MIRA’s Rating :

B (27)

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	USD 99600000
Status :	Moderate
Payment Behaviour :	Slow
Litigation :	Exist
Comments :	Subject is an established company having a moderate track record. There appears drastic fall in the profitability during 2011. The external borrowing seems to be increasing. However, trade relations are reported to be fair. Business is active. Payments are reported to be slow. The company can be considered for business dealings with great caution.

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

EXTERNAL AGENCY RATING

Rating Agency Name	ICRA
Rating Explanation	ICRA has suspended it rating due to lack of information.
Date	July, 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 :	43 Atlanta Building, Nariman Point, Mumbai - 400021, Maharashtra, India
Tel. No.:	91-22-66306732
Fax No.:	91-22-22041954
E-Mail :	sterlingbiotech@stergel.com api@sterbio.com
Branch Office 1 :	C - 25, Laxmi Towers, 'A' - 601, 6^th Floor, Bandra Kurla Complex, Bandra (East) Mumbai – 400051, Maharashtra, India
Tel. No.:	91-22-26541241 / 42 / 43
Fax No.:	91-22-26540155
Branch Office 2:	Sandesara Estate, Padra Road, Atladra, Vadodara - 390012, Gujarat, India.
Tel No.:	91-265-2680720 / 30
Fax No.:	91-265-2680257 / 732
Email :	sterling_gelatin@stergel.com
Factory 1:	ECP Road, Village Karakhadi, 391450, Taluka Padra, District Baroda, Gujarat, India
Tel No.:	91-2662-273292 / 94 / 273364 /65 / 67
Fax No.:	91-2662-273293
Factory 2:	Jambusar State Highway, Village Masar – 391421, Taluka Padra, District Vadodara, Gujarat, India
Tel No.:	91-2662-237301
Fax No.:	91-2662-237304
Factory 3:	Sandyanalla, Sholur Gram Panchayat, Ottacamund, District The Nilgiries, Tamilnadu, India

DIRECTORS

As on 31.12.2011

Name :	Mr. Nitin Sandesara
Designation :	Chairman and Managing Director
Name :	Mr. Chetan Sandesara
Designation :	Joint Managing Director
Name :	Mr. Vilas D Joshi
Designation :	Director
Name :	Mr. Priyadarshan B. Merita
Designation :	Director
Name :	Mr. Narendrabhai B. Patel
Designation :	Director
Name :	Mr. R. B. Dixit
Designation :	Director

KEY EXECUTIVES

Name :	Mr. Kirtidev Khatri
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 31.03.2013

Category of Shareholder	Total No. of Shares	Total Shareholding as a %
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	6252000	2.81
Bodies Corporate	84588135	37.98
Sub Total	90840135	40.79
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	90840135	40.79
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	4491	0.00
Financial Institutions / Banks	7303	0.00
Foreign Institutional Investors	24975997	11.22
Sub Total	24987791	11.22
(2) Non-Institutions
Bodies Corporate	44292157	19.89
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 million	47711552	21.42
Individual shareholders holding nominal share capital in excess of Rs. 0.100 million	5228124	2.35
Any Others (Specify)	9641466	4.33
Clearing Members	6362767	2.86
Non Resident Indians	3272869	1.47
Foreign Corporate Bodies	830	0.00
Trusts	5000	0.00
Sub Total	106873299	47.99
Total Public shareholding (B)	131861090	59.21
Total (A)+(B)	222701225	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	45172365	0.00
Sub Total	45172365	0.00
Total (A)+(B)+(C)	267873590	0.00

BUSINESS DETAILS

Line of Business :

Manufacture of Gelatin.

Products :

Product Description	Item Code (ITC Code No.)
Gelatin	350300.02
DCP	283525.00
Coenzyme Q10	29146990

GENERAL INFORMATION

No. of Employees :

Not Available [We tried to confirm the number of employees but no one is ready to part any information from the company management]

Bankers :

Not Available

Facilities :

Secured Loans	31.12.2011 (Rs. in Millions)	31.12.2010 (Rs. in Millions)
Term Loans from Banks (Secured by way of charge on Fixed Assets of the company, on pari passu basis)	7363.089	7421.728
Redeemable Non-Convertible Debentures (Secured by way of first charge on Fixed Assets of the company, on pari passu basis)	3113.525	2850.000
External Commercial Borrowings
ECB 2009 aggregating USD 90 million (Previous Year USD 90 Million) (Secured by way of first charge on Fixed Assets of the company, on pari passu basis)	4794.300	4032.900
ECB 2010 aggregating USD 1 47.6 million (Previous Year USD 128.5 million) (Secured by way of first charge on Fixed Assets of the company, on pari passu basis)	7851.998	5758.085
Working Capital Borrowings from Banks (Secured by way of first charge on Current Assets of the company, on pari passu basis)	9688.026	7848.741
Total	32810.938	27911.454

Banking Relations :	--
Auditors :
Name :	H. S. Hathi and Company Chartered Accountants
Enterprises in which significant influence is exercised by Key Management Personnel	· Sterling SEZ and Infrastructure Limited Sterling Oil Resources Limited Sterling Port Limited Atlantic Bluewater Services Private Limited British Oil and Gas Exploration Private Limited

CAPITAL STRUCTURE

As on 31.12.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
500,000,000	Equity Shares	Re.1/- each	Rs. 500.000 Millions

Issued & Subscribed Capital :

No. of Shares	Type	Value	Amount
271,597,590	Equity Shares	Re.1/- each	Rs. 271.597 Millions

Paid-up Capital :

No. of Shares	Type	Value	Amount
267,873,590	Equity Shares	Re.1/- each	Rs. 267.873 Millions

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		267.874	267.874	250.196
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		24641.014	24441.528	20453.055
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		24908.888	24709.402	20703.251
LOAN FUNDS
1] Secured Loans		32810.938	27911.454	18257.725
2] Unsecured Loans		9737.059	9526.945	12650.976
TOTAL BORROWING		42547.997	37438.399	30908.701
DEFERRED TAX LIABILITIES		3148.201	3118.200	2808.200
TOTAL		70605.086	65266.001	54420.152
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		29420.987	28448.844	24267.937
Capital work-in-progress		16455.063	12627.758	9.736.638
INVESTMENT		3650.032	3639.291	2747.490
DEFERRED TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	10087.912	6855.104	5644.024
	Sundry Debtors	7230.117	6764.102	5918.928
	Cash & Bank Balances	219.872	1583.722	1292.361
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	4268.517	6495.365	5654.728
Total Current Assets		21806.418	21698.293	18510.041
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	438.789	501.692	326.760
	Other Current Liabilities	221.047	148.730	156.548
	Provisions	79.765	558.699	497.609
Total Current Liabilities		739.601	1209.121	980.917
Net Current Assets		21066.817	20489.172	17529.125
MISCELLANEOUS EXPENSES		12.187	60.936	138.962
TOTAL		70605.086	65266.001	54420.152

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.12.2011	31.12.2010	31.12.2009
	SALES
		Income	16619.539	16165.785	14381.729
		Other Income	93.078	106.376	88.641
		TOTAL (A)	16712.617	16272.161	14470.370
Less	EXPENSES
		Consumption of Row Material	10279.960	8938.790
		Employee Cost	505.656	437.150
		Manufacturing and Other Expenses	943.524	752.253
		Extraordinary Item	962.271	631.048
		(Increase)/Decrease in Stocks	(1483.669)	(933.232)
		TOTAL (B)	11207.742	9826.009	8706.066
	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		5504.875	6446.152	5764.304
Less	FINANCIAL EXPENSES (D)		2704.308	2304.705	1494.377
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		2800.567	4141.447	4269.927
Less/ Add	DEPRECIATION/ AMORTISATION (F)		2522.246	1976.217	1230.421
	PROFIT BEFORE TAX (E-F) (G)		278.321	2165.230	3039.506
Less	TAX (H)		87.004	712.000	686.249
	PROFIT AFTER TAX (G-H) (I)		191.317	1453.230	2353.257
Add	PRIOR YEAR ADJUSTMENT		8.169	8.839	16.696
Less	APPROPRIATIONS
		Proposed Dividend	0.000	133.937	125.098
		Dividend Tax	0.000	22.763	21.260
		Transfer to Debenture Redemption Reserve	107.143	107.143	107.143
	BALANCE CARRIED TO THE B/S		92.343	1198.226	2116.452
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	5140.773	5035.086	4537.963
	TOTAL EARNINGS		5140.773	5035.086	4537.963
	IMPORTS
		Capital Goods	82.064	55.033	53.481
	TOTAL IMPORTS		82.064	55.033	53.481
	Earnings / (Loss) Per Share (Rs.)
	Basic		0.71	5.69	9.47
	Diluted		0.63	5.01	7.77

QUARTERLY RESULTS

PARTICULARS	31.03.2012	30.06.2012	30.09.2012	31.12.2012	31.03.2013
Type	1^st Quarter	2^nd Quarter	3^rd Quarter	4^th Quarter	5^th Quarter
Net Sales	2098.100	2278.100	2000.600	2041.200	2071.600
Total Expenditure	1788.700	1883.500	1519.100	1680.500	1805.700
PBIDT (Excl OI)	309.400	394.700	481.500	360.700	265.900
Other Income	0.000	0.000	0.000	0.000	0.000
Operating Profit	309.400	394.700	481.500	360.700	265.900
Interest	1037.100	1093.300	962.900	1030.000	1055.100
Exceptional Items	0.000	0.000	0.000	0.000	0.000
PBDT	(727.700)	(698.600)	(481.500)	(669.300)	(789.200)
Depreciation	636.200	632.1000	653.600	678.600	633.400
Profit Before Tax	(1363.900)	(1330.700)	(1135.000)	(1347.900)	(1422.600)
Tax	(442.500)	(431.700)	(368.300)	(437.300)	(461.600)
Provisions and contingencies	0.000	0.000	0.000	0.000	0.000
Profit After Tax	(921.500)	(899.000)	(766.700)	(910.600)	(961.000)
Extraordinary Items	0.000	0.000	0.000	0.000	0.000
Prior Period Expenses	0.000	0.000	0.000	0.000	0.000
Other Adjustments	0.000	0.000	0.000	0.000	0.000
Net Profit	(921.500)	(899.000)	(766.700)	(910.600)	(961.000)

KEY RATIOS

PARTICULARS		31.12.2011	31.12.2010	31.12.2009
PAT / Total Income	(%)	1.14	8.93	16.26
Net Profit Margin (PBT/Sales)	(%)	1.67	8.99	16.26
Return on Total Assets (PBT/Total Assets}	(%)	0.54	4.32	7.11
Return on Investment (ROI) (PBT/Networth)		0.01	0.09	0.15
Debt Equity Ratio (Total Debt/Networth)		1.71	1.52	1.49
Current Ratio (Current Asset/Current Liability)		29.48	17.95	18.87

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	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	No
30]	Major Shareholders, if available	Yes
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

LITIGATION DETAILS

Mariner Pac., Limited v Sterling Biotech Limited

2013 NY Slip Op 03926

Decided on May 30, 2013

Appellate Division, First Department

Published by New York State Law Reporting Bureau pursuant to

Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication

in the Official Reports.

Decided on May 30, 2013

Sweeny, J.P., Saxe, Moskowitz, Gische, Clark, JJ. 10255N-

602297/09 10256N

[*1]Mariner Pacific, Ltd., Plaintiff-Appellant,

v

Sterling Biotech Limited, Defendant-Respondent.

Nimkoff Rosenfeld & Schechter, LLP, Syosset (Ronald A.

Nimkoff of counsel), for appellant.

McGuireWoods LLP, New York (Marshal Beil of counsel), for respondent.

Order, Supreme Court, New York County (Richard B. Lowe III, J.), entered March 10, 2011, which, insofar as appealed from, denied plaintiff's request for jurisdictional discovery, unanimously affirmed, without costs. Order, same court (Shirley Werner Kornreich, J.), entered March 15, 2011, which, insofar as appealed from, denied plaintiff's application for jurisdictional discovery, unanimously reversed, on the law and in the exercise of discretion, without costs, plaintiff's application to stay the hearing before the special referee pending disclosure granted, without prejudice to defendant applying for a protective order limiting disclosure.

The first order appealed from arose out of defendant's motion to dismiss for lack of personal jurisdiction; plaintiff argued that the action should not be dismissed until plaintiff had the opportunity to conduct discovery. The first order did not dismiss the action; instead, it properly ordered a hearing to determine if New York had jurisdiction over defendant (see Matter of Preferred Mut. Ins. Co. [Fu Guan Chan], 267 AD2d 181, 182 [1st Dept 1999]). Also, at the time of the first order, plaintiff had not yet propounded any discovery requests and that order neither permitted nor prohibited discovery. By the time of the second order, plaintiff had propounded discovery requests. We believe that jurisdictional discovery in addition to what was already ordered by the motion court is appropriate in this case. It is true that some of the discovery requests are overbroad. Therefore, our decision is "without prejudice to defendant []applying, if so advised, . . .for a protective [*2]order appropriately limiting disclosure to that which is reasonably related to the jurisdictional issue" (Peterson v Spartan Indus., 33 NY2d 463, 467-468

[1974]).

THIS CONSTITUTES THE DECISION AND ORDER

OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: MAY 30, 2013

OPERATIONS

During the year, net sales increased to Rs. 16619.54 million, an increase of 2.81 percent, while total Income grew 2.71 Percent to Rs.16712.620 million from the previous year. Net Profit decreased to Rs. 191.320 Million as compared Rs. 1453.230 million for the previous year. Earning per share decreased to Rs. 0.71 from Rs. 5.69 for the previous year.

CURRENT SCENARIO

Gelatin being a natural product has extensive usage in the Pharma industry. The recent overdrive for the better environmental management has put up the plant operations under stringent conditions and thereby partially affecting the plant operations. This has necessitated the improvement in Effluent Treatment Plants (ETP).

Besides, following are some of the key reasons contributing to the present scenario

1. Increase in Cost of Fuel.

2. Increase in Bone prices.

3. Increase in Effluent Treatment Cost.

MANAGEMENT DISCUSSION AND ANALYSIS

INDUSTRY OVERVIEW

Gelatin has been a safe food source for hundreds of years, going back to the time of the pharaohs —a 4,000 year history. The earliest commercial manufacture of gelatin seems to have been in Holland in the mid 17th century. Not long after (around 1700) it also began in England. During the Napoleonic era, claims were made about the food value of gelatin. This possibly led to its manufacture in France in the late 1 8th century. It was first made in North America in 1808. Today, gelatin is made worldwide, in areas including Europe, North and South America, Asia, Asia Minor and Australasia. Gelatin is a unique and valuable protein.

The food industry uses gelatine in numerous products. Here are a few examples : Gelatine gives fruit gums their elasticity and the desired chewy consistency. It stabilizes the butter cream in gateaux. Yogurts and curd cheese dishes owe their creaminess to gelatine. And its gelling property makes it possible to prepare visually attractive aspics and brawn. Gelatine also plays an important role In low-calorie diets. It can bind water and Is therefore indispensable for the manufacture of light products.

The pharmaceuticals industry is another sector that uses the extraordinary properties of gelatine. Gelatine capsules protect the active agents and vitamins from the air, light and moisture ond prevent annoying odour and taste sensations.

In addition to edible and pharmaceutical gelatine there is also technical gelatine. It is used by the photographic industry and in printing shops.

The manufacturing process of Gelatine Is broken down into several complex stages from the extraction of gelatine from the collagen containing raw materials, filtration, to the final sterilization at 1 40°C. The combination of the Individual manufacturing stages makes gelatine a healthy and safe product.

The worldwide gelatin market is benefiting from growing demand for cosmetics, pharmaceutical and nutraceutical industries, fueled by robust economics development witnessed in emerging economies, particularly in Asia. In addition, the fast-expanding ageing demography of the global population is boosting demand from the pharmaceutical industry for gelatin and derivatives products such as gelatin hydrolysates.

The global market is expected to witness steady gains driven by stable consumption patterns, rising standards of living and easier access to healthcare services. However, outbreaks of BSE (Bovine Spongiform Encephalopathy) have historically squeezed manufacturer profit margins, crippled business climates, have resulted in temporary tightness for bovine sources, and pushed up raw material prices. The impact has been especially pronounced in Europe where gelatin is mainly manufactured from bovine bones or skin. Ravaged by repeated outbreaks of BSE, foot and mouth disease as well as societal and religious pressures, the gelatin industry is attempting to reach for firmer grounds by combating the negative publicity over the safety and efficacy of this animal-derived ingredient. The industry, over the years, has borne the brunt of tightened regulations, and legislative riders governing the use of gelatin in supplements. France for instance, issued an immediate ban on food-grade gelatin derived from bovine bone until EU safety guidelines related to BSE are put into practice.

In the face of growing concerns, government strictures and general apprehensions over animal-sourced gelatin among consumers in different parts of the world, the industry is showing immense interest in the search for alternatives. Manufacturers are increasingly looking at producing vegetarian substitutes such as non-animal or vegetarian/plant-based gelatin. Increasing trend towards vegetarianism and shift towards • healthy lifestyle are believed to be major reasons fueling the rise in demand for non-gelatin capsules. The vegetarian movement has additionally Intensified the search for alternatives to gelatin, which appear in the form of Carrageenan, agar, and certain starches. In the US, about 25% of the population is showing a marked shift towards vegetarianism with more than 60% of vegetarians preferring dietary supplements over non-vegetarian food stuff for gaining vital nutrients. The long term market potential of non-gelatin capsules is also enhanced as most new vegetarians belong to the 1 8 to 35 year age group. However, while these alternatives meet some gelatin characteristics, none is yet available that matches all the functions such as gelling, binding, thickening, stabilizing, film forming, and aerating properties.

As stated by Global Industry Analysts's market research report, Europe continues its domination over the worldwide Gelatin market in terms of production and consumption volumes, with Germany and Russia taking the lead as major gelatin markets in Western Europe. On the other hand, China and India tilt the growth balance in favor of Asia Pacific with a projected CAGR of about 3.7% through 2017. In terms of annual consumption volume, the Food and Beverage represents the largest end -use segment. The food industry is largely governed by health-related regulatory issues and growing emphasis on healthy, low fat food as well as Increasing vegetarianism, prompting the growth of gelatin substitutes free from animal content Gelatin is also widely used as an adhesive agent in the Pharmaceuticals industry for tobletlng medicines in the form of both hard and soft capsules. The pharma segment is set to outpace the overall Industry average with a growth rate of 4.4% over the analysis period.

OPERATING AND FINANCIAL PERFORMANCE

The highlights of Sterling Biotech's financial performance during 2011 were:

3% increase in sales from Rs.16165.780 millions in 2010 to Rs. 16619.540 millions in 2011

58.2% of the total sales is Export where as 41.8% is domestic sales

Gelatin sales contributed 65.3%, DCP sales contributed 1 4.4% and Pharma products contributed 14.4% of total sales

Extra ordinary items amounting to Rs. 962.270 million consists of FCCB issue expenses and inventory write off

Net profit before tax (after extraordinary items) stood at Rs. 278.320 million in 2011 as compared to Rs. 2165.230 million in 2010

Net Profit after Tax stood at Rs. 191.320 million in 2011 as compared to Rs. 1453.230 million

Net worth as at 31" December 2011 stood at Rs.24908.890 million Total debt as at 31^st December 2011 stood at Rs. 42548.000 million

During the year outstanding amount of Company's FCCBs remained same at USD 1 34.5 million

Company's new production facility at Bharuch SEZ near Jambusar having a gelatin manufacturing capacity of 9000 mtpa Is expected to commence commercial operations during 2012

Few of the major reasons contributing to the reduction in profitability during 2011 are as under:

Slowdown in European, USA and Japanese markets which lead to slow off take of gelatin and Alliend products, increase in receivables and inventory levels It also required inventory write down during 2011.

Change in the effluent discharge standards / norms by the State pollution control board This has necessitated the improvement in their effluent treatment capabilities by improving their Effluent Treatment Plants (ETP) which frequent variations in the effluents. This has led to intermittent shutdown of the plant during the second half of 2011.

Stringent regulation / norms required to be followed by slaughter houses for meat exports to EU countries and other developed countries lead to temporary closure of many slaughter houses for improvement in the facility to meet those norms. It lead to poor availability of Raw materials. Further it also lead to increase in Raw Material prices resulting in impact on gross margin.

Dumping of Chinese made Co-Enzyme Q1 0 into the markets at a cheaper price. It made production of CO Ql 0 non profitable.

Increase in Cost of Fuel (Furnace oil & HSD) resultant increase in Cost of production.

In response to above increase in cost, the selling price had no matching upward effect which only grew by approximately 10% -12% causing drastic erosion in the profitability

UNSECURED LOANS

Particulars	31.12.2011 (Rs. in Millions)	31.12.2010 (Rs. In Millions)
Foreign Currency Convertible Bonds Zero Coupon Convertible Bonds due 201 2 [Aggregating to USD 134.50 Million (P.Y.: USD 134.5 Million) Convertible into Ordinary shares or GDRs representing Ordinary Shares]	7164.815	6026.945
Short Term Loan from Banks	2572.244	3500.000
Total	9737.059	9526.945

CONTINGENT LIABILITIES (AS ON 31.12.2011):

Contingent liabilities not provided for on account of letters of credit as on 31^st December, 2011 are of Rs. 498.600 millions [Previous Year Rs. 1010.000 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 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.60.59
UK Pound	1	Rs.92.92
Euro	1	Rs.78.94

INFORMATION DETAILS

Report Prepared by :

MRI

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	3
PAID-UP CAPITAL	1~10	3
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	3
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	3
--CREDIT LINES	1~10	3
--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	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		27

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.