MIRA INFORM REPORT

Report Date :

27.08.2014

IDENTIFICATION DETAILS

Name :	MILAN LABORATORIES (INDIA) PRIVATE LIMITED
Registered Office :	A-5, Mega Malhar, Gawand Path, Navpada, Thane – 400602, Maharashtra
Country :	India
Financials (as on) :	31.03.2014
Date of Incorporation :	26.03.2003
Com. Reg. No.:	11-139736
Capital Investment / Paid-up Capital :	Rs. 19.800 Millions
CIN No.: [Company Identification No.]	U24230MH2003PTC139736
TAN No.: [Tax Deduction & Collection Account No.]	PNEM08623G
PAN No.: [Permanent Account No.]	AADCMS148B
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturer and Exporter of Pharmaceutical Formulations
No. of Employees :	250 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

Ba (52)

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is an established company having fine track record. Financial position of the company seems to be sound. Trade relations are reported as fair. Business is active. Payments terms are reported to be regular and as per commitments. The company can be considered normal 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 1, 2014

Country Name	Previous Rating (31.03.2014)	Current Rating (01.06.2014)
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

N E W S

As per the latest IMF study, the total weigh of emerging markets in the GDP of the world on a purchasing power parity basis has seen a sizeable shift. It highlights how as against 51 % in 2005, the emerging economies now account for close to 56 % of the global purchasing power GDP as per the latest survey. And with the emerging economies growing at a faster rate than their developed counterparts, there are every possibility that the their share goes up further in the coming years.  China may surpass the US over the next few years.

Politics and economics are very intricately connected. They tend to influence each other in ways that could be very complex and far-reaching. The prospects of the India’s economy have been seriously compromised due to political corruption. High inflation, poor standard of living are to a great extent a result of rampant corruption in the country. China on the other hand, seems to be facing diametrically opposite challenge. American hedge fund manager Jim Chanos has been keenly following the political and economic development in the dragon economy and has figured out something that is quite worrying. He is of the view that the Chinese economy could be heading toward trouble on account of new Chinese President Xi Jingping’s very aggressive anti-corruption drive. Chanos believes tat many things such as apartment sales, luxury products, etc. were largely bought with dirty money. And it is now beginning to impact consumption. This may indeed be bad news for an economy that is struggling to transition from an investment-driven export-oriented economy to a domestic consumption-driven economy.

A study published by Firstpost has revealed that asset classes like real estate and equities were the biggest beneficiaries of the liberalization policies.  A firm called Ciane Analytics studied returns from assets including equities, gold, fixed deposits, G-Secs and real estate since 1991. Real estate outperformed every other asset classes during the 23-year period with an annualized return of 20 % ! Equities came in second with annualized return of 15.5 % ! However, while these returns may seem mouthwatering, the fact is that the return from equities adjusted for inflation came down to just 7.1 %.

Some brief news are as under

. R-Power to buy Jaypee’s hydro assets

. Investors await justice in NSEL case

. India seeks MFN status from Pakistan ahead of meeting

. Ukrain’s clashes with rebels hinder MH17 crash investigation

. India exploring merger of state-owned hydro PSUs

..Higher costs weigh down profit growth to slowest in 9 quarters

..Wal-Mart to expand wholesale business in India

. GMR group moves to strengthen balance sheet

. Central Bank to sell 4 % stake to Life Insurance Corporation

. Tata Chemicals plans to raise up to Rs 10000 mn.

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 31-03-2014.

INFORMATION PARTED BY (GENERAL DETAILS)

Name :	Mr. Pushpakant
Designation :	Export Manager
Contact No.:	91-22-25447341
Date :	25.08.2014

LOCATIONS

Registered Office :	A-5, Mega Malhar, Gawand Path, Navpada, Thane – 400602, Maharashtra, India
Tel. No.:	91-22-25447341 / 25390686 /87
Fax No.:	91-22-25401744
E-Mail :	marketing@milanlabs.com milabs@vsnl.com mllabs@vsnl.com
Website :	http://www.milanlabs.com
Location :	Owned
Factory :	Plot Nos. 63/67, Jawahar Co-operative Industrial Estate Limited, Kamothe, Panvel, Navi Mumbai, Maharashtra, India
Tel. No.:	91-22-27421910/27420391
Fax No.:	91-22-27421010

DIRECTORS

As on 17.06.2014

Name :	Mr. Upendra Madan Deshpande
Designation :	Director
Address :	Flat No. 93, 9^th Floor, Rohini Building, Tarangan Towers, Kalpataru, Thane – 400607, Maharashtra, India
Date of Birth/Age :	30.04.1963
Qualification :	Graduate
Date of Appointment :	26.03.2003
DIN No.:	02176205
Voter ID No.:	MT/10/053/1039017
Name :	Mrs. Rohini Rajiv Dongre
Designation :	Director
Address :	14C-21, Brindavan Society, Majiwade, Thane – 400601, Maharashtra, India
Date of Birth/Age :	28.10.1959
Qualification :	M. Sc.
Date of Appointment :	26.03.2003
DIN No.:	01031356
Voter ID No.:	MT/10/054/0603343

KEY EXECUTIVES

Name :	Mr. Pushpakant
Designation :	Export Manager

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 17.06.2014

Names of Shareholders	No. of Shares
Lalita Madan Deshpande	594000
Rohini Rajiv Dongre	594000
Upendra Madan Deshpande	594000
Megha Milind Hajimis	198000
Total	1980000

As on 17.06.2014

Equity Share Break up (Percentage of Total Equity)

Category	Percentage
Directors or relatives of Directors	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer and Exporter of Pharmaceutical Formulations

Products :

Product Description	ITC Code No
Ibuprofen Tablet 200 mg	KD540
Amoxicillin Capsules 500 mg	KD380
Cotrimoxazole Tablet 80 x 480 mg	KD540

Exports :

Products :

Finished Goods

Countries :

· West Africa

· East Africa

· South East Asia

· New Zealand

Imports :

Products :

Raw Material

Countries :

· China

· Spain

Terms :

Selling :

Cash / L/C / Credit

Purchasing :

Cash / L/C / Credit

GENERAL INFORMATION

Customers :

Wholesalers

No. of Employees :

250 (Approximately)

Bankers :

· ICICI Bank Limited, Nariman Point, Mumbai-400021, Maharashtra, India

· State Bank of India, Kamothe [Panvel] Branch, Panvel, Maharashtra, India

· The Hongkong and Shanghai Banking Corporation Limited, 52/60, Mahatma Gandhi Road, Fort, Mumbai - 400001, Maharashtra, India

Facilities :

(Rs. In Millions)

Secured Loan	As on 31.03.2014	As on 31.03.2013
Long Term Borrowing
Term Loan in Foreign Currency	95.954	93.420
Short Term Borrowing
Cash Credit Facilities	4.245	4.598
Packing Credit Loans	34.377	67.007
Total	134.576	165.025

Banking Relations :	---
Financial institution :	SBI Global Factors Limited, 6th Floor, Metropolitan Building, Bandra-Kurla, Complex, Bandra(East), Mumbai - 400051, Maharashtra, India
Auditors :
Name :	R. P. Shah and Company Chartered Accountants
Address :	35, 3^rd Floor, Tardeo AC Market, Tardeo, Mumbai – 400034, Maharashtra, India
PAN No.:	AALPS7669C

CAPITAL STRUCTURE

As on 17.06.2014

Authorised Capital :

No. of Shares	Type	Value	Amount
2000000	Equity Shares	Rs.10/- each	Rs.20.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
1980000	Equity Shares	Rs.10/- each	Rs.19.800 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2014	31.03.2013	31.03.2012
I. EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	19.800	19.800	19.800
(b) Reserves & Surplus	116.422	50.173	31.735
(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)	136.222	69.973	51.535
(3) Non-Current Liabilities
(a) long-term borrowings	229.875	222.137	208.168
(b) Deferred tax liabilities (Net)	0.000	1.674	0.713
(c) Other long term liabilities	2.568	2.320	0.200
(d) long-term provisions	0.200	0.200	2.473
Total Non-current Liabilities (3)	232.643	226.331	211.554
(4) Current Liabilities
(a) Short term borrowings	38.622	71.605	70.859
(b) Trade payables	213.050	111.215	120.622
(c) Other current liabilities	56.427	35.552	33.506
(d) Short-term provisions	16.069	20.330	13.166
Total Current Liabilities (4)	324.168	238.702	238.153
TOTAL	693.033	535.006	501.242
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	201.379	198.676	222.459
(ii) Intangible Assets	0.000	0.000	0.000
(iii) Capital work-in-progress	1.901	9.715	0.200
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	0.000	1.500	3.000
(c) Deferred tax assets (net)	2.937	0.000	0.000
(d) Long-term Loan and Advances	60.508	49.699	67.801
(e) Other Non-current assets	0.000	0.000	0.000
Total Non-Current Assets	266.725	259.590	293.460
(2) Current assets
(a) Current investments	0.000	0.000	0.000
(b) Inventories	83.179	50.605	27.576
(c) Trade receivables	195.047	133.052	144.801
(d) Cash and cash equivalents	46.216	22.374	5.853
(e) Short-term loans and advances	94.759	65.036	22.204
(f) Other current assets	7.107	4.349	7.348
Total Current Assets	426.308	275.416	207.782
TOTAL	693.033	535.006	501.242

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2014	31.03.2013	31.03.2012
	SALES
		Income	862.528	636.640	456.347
		Other Income
		TOTAL (A)	862.528	636.640	456.347
Less	EXPENSES
		Office Expenses
		Administrative Expenses	687.199	527.211	393.099
		Advertising Expenses
		TOTAL (B)	687.199	527.211	393.099
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		175.329	109.429	63.248
Less	FINANCIAL EXPENSES (D)		38.895	38.363	26.685
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		136.434	71.066	36.563
Less/ Add	DEPRECIATION/ AMORTISATION (F)		36.495	37.366	12.092
	PROFIT BEFORE TAX (E-F) (G)		99.939	33.700	24.471
Less	TAX (H)		31.390	12.961	9.362
	PROFIT AFTER TAX (G-H) (I)		68.549	20.739	15.109
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		25.173	16.735	14.627
Less	APPROPRIATIONS
		Transfer to General Reserve	20.000	10.000	10.700
		Dividend	1.980	1.980	1.980
		Tax on Dividend	0.321	0.321	0.321
	BALANCE CARRIED TO THE B/S		71.421	25.173	16.735
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	824.915	599.969	NA
	TOTAL EARNINGS		824.915	599.969	NA
	IMPORTS
		Raw Materials	110.073	136.042	NA
		Capital Goods	8.319	2.237	NA
	TOTAL IMPORTS		118.392	138.279	NA
	Earnings Per Share (Rs.)		34.62	10.47	NA

KEY RATIOS

PARTICULARS		31.03.2014	31.03.2013	31.03.2012
PAT / Total Income	(%)	7.95	3.26	3.31
Return on Total Assets (PBT/Total Assets}	(%)	14.52	6.43	4.91
Return on Investment (ROI) (PBT/Networth)		0.73	0.48	0.47
Debt Equity Ratio (Total Debt /Networth)		1.97	4.20	5.41
Current Ratio (Current Asset/Current Liability)		1.32	1.15	0.87

FINANCIAL ANALYSIS

[all figures are in Rupees Millions]

DEBT EQUITY RATIO

Particular	31.03.2012	31.03.2013	31.03.2014
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Share Capital	19.800	19.800	19.800
Reserves & Surplus	31.735	50.173	116.422
Net worth	51.535	69.973	136.222
long-term borrowings	208.168	222.137	229.875
Short term borrowings	70.859	71.605	38.622
Total borrowings	279.027	293.742	268.497
Debt/Equity ratio	5.414	4.198	1.971

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.03.2012	31.03.2013	31.03.2014
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Sales	456.347	636.640	862.528
		39.508	35.481

NET PROFIT MARGIN

Net Profit Margin	31.03.2012	31.03.2013	31.03.2014
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Sales	456.347	636.640	862.528
Profit	15.109	20.739	68.549
	3.31%	3.26%	7.95%

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	Yes
10]	Designation of contact person	Yes
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	No
17]	Major suppliers	No
18]	Major customers	No
19]	Payments terms	Yes
20]	Export / Import details (if applicable)	Yes
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	Yes
34]	External Agency Rating, if available	No

PERFORMANCE OF THE COMPANY

Sales and operating revenue for the year aggregated to Rs.862.500 Millions reflecting a growth of 35% over the previous year. This was achieved by adopting a different product mix of high value items. Raw material ccst was more or less constant, but the manufacturing costs increased substantially on account of labour cost, power and fuel cost. Overheads also increased in the area of salaries and selling and distribution expenses. Interest cost was higher at Rs. 38.900 Millions as compared to Rs.38.300 Millions. The net result is the Profit before Tax (PBT) was higher at Rs.99.900 Millions as compared Rs.33.700 Millions in the previous year which is a growth of 300% over the previous year. This has also resulted in increase in the EPS from Rs.10.47 per share to Rs.34.62 per share.

UNSECURED LOAN

Rs. In Millions

Particular	As on 31.03.2014	As on 31.03.2013
Long Term Borrowing
Loans and Advance from Related Parties
Madan Deshpande	0.501	0.585
Lalita Deshpande	40.742	38.515
Rohini Dongre	38.076	36.056
Meha Hajirnis	13.314	12.593
Upendra Deshpande	39.874	37.715
Ritvij Dongra	1.414	1.290
Total

INDEX OF CHARGES

S.No.	Charge ID	Date of Charge Creation/Modification	Charge amount secured	Charge Holder	Address	Service Request Number (SRN)
1	10377156	10/12/2013 *	40,000,000.00	THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMI  TED	52/60, MAHATMA GANDHI ROAD, FORT, MUMBAI, MAHARASHTRA - 400001, INDIA	B91763276
2	10285507	01/04/2011	6,010,000.00	TATA CAPITAL LIMITED	ONE FORBES, DR V B GANDHI MARG,FORT, MUMBAI, MAHARASHTRA - 400001, INDIA	B12255881
3	10258415	08/05/2012 *	80,000,000.00	ICICI BANK LIMITED	LANDMARKRACE COURCE CIRCLE, ALKAPURI, BARODA, GUJARAT - 390015, INDIA	B42406835
4	90145497	27/04/2012 *	87,000,000.00	ICICI BANK LIMITED	LANDMARKRACE COURCE CIRCLE, ALKAPURI, BARODA, GUJARAT - 390015, INDIA	B39937495

* Date of charge modification

FIXED ASSETS

· Building

· Plant and Equipment

· Furniture and Fixture

· Vehicle

· Office Equipment

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.60.50
UK Pound	1	Rs.100.33
Euro	1	Rs.79.91

INFORMATION DETAILS

Information Gathered by :	GYT
Analysis Done by :	RAS
Report Prepared by :	NTH

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	6
--CREDIT LINES	1~10	6
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		52

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.