MIRA INFORM REPORT

Report Date :

07.03.2013

IDENTIFICATION DETAILS

Name :	KARNATAKA ANTIBIOTICS AND PHARMACEUTICALS LIMITED
Registered Office :	Nirman Bhavan, Dr. Rajakumar Road, First Block, Rajaji Nagar, Bangalore – 560010, Karnataka
Country :	India
Financials (as on) :	31.03.2012
Date of Incorporation :	13.03.1981
Com. Reg. No.:	004145
Capital Investment / Paid-up Capital :	Rs.74.900 Millions
CIN No.: [Company Identification No.]	U24231KA1981GOI004145
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Manufacture and Marketing of Various Life Saving and Essential Drugs.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

A (60)

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 3500000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a joint undertaking of the Government of India (59.2 percent shareholding in KAPL) and the Government of Karnataka (40.8 percent), though Karnataka State Industrial Investment and Development Corporation Limited. It is a well-established and a reputed company having a fine track record. Financial position of the company appears good. Trade relations are reported as decent. Business is active. Payment terms are regular and as per commitments. The company can be considered for business dealings at usual trade terms and conditions.

NOTES:

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

ECGC Country Risk Classification List – June 30, 2012

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

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

INDIAN ECONOMIC OVERVIEW

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

Source : CIA

EXTERNAL AGENCY RATING

Rating Agency Name	CRISIL
Rating	Long Term Rating: A-
Rating Explanation	Adequate degree of safety and low credit risk.
Date	11.05.2012

Rating Agency Name	CRISIL
Rating	Short Term Rating: A1
Rating Explanation	Very strong degree of safety and lowest credit risk.
Date	11.05.2012

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/ Corporate Office :	Nirman Bhavan, Dr. Rajakumar Road, First Block, Rajaji Nagar, Bangalore – 560010, Karnataka, India0020
Tel. No.:	Not Available
Fax No.:	Not Available
E-Mail :	jch@kaplindia.com
Website :	http://www.kaplindia.com
Factory :	Plot No.14, II Phase, Peenya industrial Area, Bangalore – 560058, Karnataka, India
Tel No.:	91-80-28395186/187/188 Ext 500 (Direct No.:91-80-28394669)

DIRECTORS

(AS ON 31.03.2012)

Name :	Dr. B. R. Jagashetty
Designation :	Director
Name :	Mr. R. K. Kureel
Designation :	Director
Name :	Mr. S. L. Phadke
Designation :	Managing Director
Contact No.:	91-23577680

KEY EXECUTIVES

Name :	Mr. R. Radhakrishnan
Designation :	General Manager-Finance
Contact No.:	91-23571590
Name :	Mr. Jagadeesh C. Hiremath
Designation :	Deputy General Manager (Admn) and Company Secretary
Name :	Mr. Sunil Kumar Kaimal
Designation :	General Manager -Agro- Vet and International Marketing
Contact No.:	91-2357919
Name :	Mr. S. N. Ravindranth
Designation :	Deputy General Manager – Commercial
Contact No.:	91-28394669

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(AS ON 31.03.2012)

Names of Shareholders	No. of Shares	Percentage of Holding
President of India	443180	59.17
KSIIDC Limited	305820	40.83
Total	749000	100.00

BUSINESS DETAILS

Line of Business :

Manufacture and Marketing of Various Life Saving and Essential Drugs.

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

Vijaya Bank

Facilities :

Secured Loans	31.03.2012	31.03.2011
	(Rs. In Millions)
Term Loan-From banks :
From Vijaya Bank Secured against hypothecation of specific fixed assets and continuing security of the Company's other fixed assets on pari passu basis with State Bank of India	36.900	29.400
Loans repayable on demand: From Banks : Cash credit/overdraft from scheduled banks secured against hypothecation of stock-in-trade and book debts on pari passu basis and pari passu first charge on Company's entire fixed assets other than fixed assets charged to Vijaya Bank for Term loan.	78.400	27.100
Total	115.300	56.500

Banking Relations :	--
Auditors :
Name :	Unnikrishnan Menon Chartered Accountant

CAPITAL STRUCTURE

(AS ON 31.03.2012)

Authorised Capital :

No. of Shares	Type	Value	Amount
1500000	Equity Shares	Rs.100/- each	Rs.150.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
749000	Equity Shares	Rs.100/- each	Rs.74.900 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2012	31.03.2011
SHAREHOLDERS FUNDS
1] Share Capital		74.900	74.900
2] Share Application Money		60.000	60.000
3] Reserves & Surplus		731.900	584.700
4] (Accumulated Losses)		0.000	0.000
NETWORTH		866.800	719.600
LOAN FUNDS
1] Secured Loans		115.300	56.500
2] Unsecured Loans		0.000	0.000
TOTAL BORROWING		115.300	56.500
DEFERRED TAX LIABILITIES		0.000	0.000
TOTAL		982.100	776.100
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		216.400	227.700
Capital work-in-progress		100.400	78.900
INVESTMENT		0.000	0.000
DEFERREX TAX ASSETS		22.600	19.700
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	290.300	271.700
	Sundry Debtors	918.400	761.100
	Cash & Bank Balances	420.900	456.900
	Other Current Assets	7.900	5.300
	Loans & Advances	80.500	72.600
Total Current Assets		1718.000	1567.600
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditor	710.500	775.000
	Other Current Liabilities	150.200	134.000
	Provisions	214.600	208.800
Total Current Liabilities		1075.300	1117.800
Net Current Assets		642.700	449.800
MISCELLANEOUS EXPENSES		0.000	0.000
TOTAL		982.100	776.100

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011
	SALES
		Revenue from Operations	2244.600	2074.100
		Other Income	38.600	33.800
		TOTAL (A)	2283.200	2107.900
Less	EXPENSES
		Cost of Materials Consumed	823.600	670.900
		Purchases of Stock-in-trade	342.400	502.600
		Changes in Inventories of Finished Goods, Work-in-progress and stock-in-trade	(4.200)	(26.800)
		Employees Benefit Expenses	431.300	371.000
		Prior Period Items	(1.900)	6.200
		Other Expenses	420.900	369.800
		TOTAL (B)	2012.100	1893.700
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		271.100	214.200
Less	FINANCIAL EXPENSES (D)		11.200	11.000
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		259.900	203.200
Less/ Add	DEPRECIATION/ AMORTISATION (F)		18.900	19.400
	PROFIT BEFORE TAX (E-F) (G)		241.000	183.800
Less	TAX (H)		80.800	78.200
	PROFIT AFTER TAX (G-H) (I)		160.200	105.600
	EARNINGS IN FOREIGN CURRENCY
		F.O.B. Value of Exports	220.900	194.400
	TOTAL EARNINGS		220.900	194.400
	IMPORTS
		Raw Materials	39.400	60.000
		Capital Goods	0.000	4.600
		Others	0.500	0.000
	TOTAL IMPORTS		39.900	64.600
	Earnings Per Share (Rs.)		213.89	140.99

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011
PAT / Total Income	(%)	7.02	5.01
Net Profit Margin (PBT/Sales)	(%)	10.74	8.86
Return on Total Assets (PBT/Total Assets}	(%)	12.46	10.24
Return on Investment (ROI) (PBT/Networth)		0.28	0.26
Debt Equity Ratio (Total Debt/Networth)		0.13	0.08
Current Ratio (Current Asset/Current Liability)		1.60	1.40

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	No
8]	No. of employees	No
9]	Name of person contacted	No
10]	Designation of contact person	No
11]	Turnover of firm for last two years	Yes
12]	Profitability for last two 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	No
17]	Major suppliers	No
18]	Major customers	No
19]	Payments terms	No
20]	Export / Import details (if applicable)	No
21]	Market information	-----
22]	Litigations that the firm / promoter involved in	-----
23]	Banking Details	Yes
24]	Banking facility details	Yes
25]	Conduct of the banking account	-----
26]	Buyer visit details	-----
27]	Financials, if provided	Yes
28]	Incorporation details, if applicable	Yes
29]	Last accounts filed at ROC	Yes
30]	Major Shareholders, if available	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

TRADE REFERENCE:

· Land – Freehold

· Building

· Plant and Machinery

· Furniture and Fixtures

· Office Equipments

· Canteen Equipments

· Vehicles

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.54.71
UK Pound	1	Rs.82.79
Euro	1	Rs.71.43

INFORMATION DETAILS

Report Prepared by :

NIT

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	7
--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	NO
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		60

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.