MIRA INFORM REPORT

Report Date :

16.12.2014

IDENTIFICATION DETAILS

Name :	AARTI DRUGS LIMITED
Registered Office :	Plot No. 198, MIDC Tarapur, Taluka Palghar, Village Pamtermbhi, District Thane – 401506, Maharashtra
Country :	India
Financials (as on) :	31.03.2014
Date of Incorporation :	28.09.1984
Com. Reg. No.:	11-055433
Capital Investment / Paid-up Capital :	Rs.121.086 Millions
CIN No.: [Company Identification No.]	L37060MH1984PLC055433
IEC No.:	Not Available
TAN No.: [Tax Deduction & Collection Account No.]	MUMA18926F/ MUMA20113C
PAN No.: [Permanent Account No.]	AAACA4410D
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Manufacturing and Selling of Pharmaceuticals and Bulk Drugs.
No. of Employees :	1000 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

Ba (53)

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 :	Exist
Comments :	Subject is an established company having good track record. Fundamental of the company is decent. Financial position of the company is strong and healthy. Trade relation reported to be fair. Business is active. Payment terms are reported to be regular and as per commitment. The company can be considered normal for business dealing 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 – September 30, 2014

Country Name	Previous Rating (30.06.2014)	Current Rating (30.09.2014)
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	Long Term - Term Loan = A-
Rating Explanation	Adequate degree of safety and low credit risk
Date	June 2014

Rating Agency Name	ICRA
Rating	Short Term - Fund Based = A2+
Rating Explanation	Strong degree of safety and low credit risk
Date	June 2014

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

Name :	Mr. Anil Pandya
Designation :	V P Finance
Contact No.:	91-9821080788
Date :	15.12.2014

LOCATIONS

Registered Office :	Plot No. 198, MIDC Tarapur, Taluka Palghar, Village Pamtermbhi, District Thane – 401506, Maharashtra, India
Tel. No.:	91-22-24072249 (5 Lines) / 52571698/ 24019025
Mobile No. :	91-9821080788 (Mr. Anil)
Fax No.:	91-22-24073462/ 24070144
E-Mail :	aarti@giasbm01.vsnl.net.in secretarial@aartigroup.com sunny.p@aartidrugs.com finacc@aartigrugs.com
Website :	www.aartidrugs.com
Location :	Owned
Area :	10,000 Sq. Ft.
Corporate Office :	Mahendra Industrial Estate, Ground Floor, Plot No. 109-D Road, No. 29, Sion (East), Mumbai-400 022, Maharashtra, India
Tel. No.:	91-22-24019025 (30 Lines)
Fax No.:	91-22-24073462 / 24070144
Factory 1 :	Plot Nos N-198, G-60, E-120, K-40, K-41, E-9/3-4 and E-21/22, MIDC Industrial Area, Tarapur, Village Pamtembhi, Taluka Palghar, Thane – 401506, Maharashtra, India
Factory 2 :	Plot Nos. 2902/2904, GIDC, Sarigam – 396155, District Valsad, Gujarat, India
Research and Development Centers :	· Plot Nos. N-198 and G-60, MIDC Industrial Area, Tarapur, Village Pamtembhi, Taluka Palghar, Thane – 401506, Maharashtra, India · Plot Nos. D-277/278, TTC Industrial Area, Turbhe, Navi Mumbai, Maharashtra, India

DIRECTORS

As on 31.03.2014

Name :	Mr. Chandrakant V. Gogri
Designation :	Chairman Emeritus
Name :	Mr. Rajendra V. Gogri
Designation :	Chairman (w.e.f. 16 August, 2012)
Name :	Mr. Prakash M. Patil
Designation :	Managing Director and Chief Executive Director
Date of Birth/Age :	16.08.1947
Qualification :	B. Chem.
Date of Appointment :	05.01.1985
Name :	Mr. Harshit M. Savla
Designation :	Joint Managing Director
Date of Birth/Age :	19.11.1962
Qualification :	B. Com
Date of Appointment :	02.01.1987
Name :	Mr. Harit P. Shah
Designation :	Whole Time Director
Date of Birth/Age :	12.10.1963
Qualification :	B. Com
Date of Appointment :	15.09.1995
Name :	Mr. Uday M. Patil
Designation :	Whole Time Director
Date of Birth/Age :	23.06.1963
Qualification :	H.S.C.
Date of Appointment :	18.10.2000
Name :	Rashesh C. Gogri (w.e.f. 16^th August, 2012)
Designation :	Whole Time Director
Name :	Mr. Ramdas M. Gandhi
Designation :	Independent Directors
Name :	Mr. Bhavesh R. Vora
Designation :	Independent Directors
Name :	Prof. Krishnacharya G. Akamanchi
Designation :	Independent Directors
Name :	Dr. Vilas G. Gaikar
Designation :	Independent Directors
Name :	Mr. Sunil M. Dedhia
Designation :	Independent Directors
Name :	Mr. Navin C. Shah
Designation :	Independent Directors

KEY EXECUTIVES

Name :	Mr. Sunny Pagre
Designation :	Company Secretary
Name :	Mr. Adhish P. Patil
Designation :	Chief Financial Officer

SHAREHOLDING PATTERN

As on 30.09.2014

Category of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	6383548	52.72
Bodies Corporate	882866	7.29
Sub Total	7266414	60.01
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	7266414	60.01
(B) Public Shareholding
(1) Institutions
Financial Institutions / Banks	6997	0.06
Foreign Institutional Investors	25074	0.21
Sub Total	32071	0.26
(2) Non-Institutions
Bodies Corporate	184654	1.52
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 Million	2094392	17.30
Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	2480063	20.48
Any Others (Specify)	50956	0.42
Non Resident Indians	38481	0.32
Unclaimed Suspense A/c	12475	0.10
Sub Total	4810065	39.72
Total Public shareholding (B)	4842136	39.99
Total (A)+(B)	12108550	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued
(1) Promoter and Promoter Group	0	0.00
(2) Public	0	0.00
Sub Total	0	0.00
Total (A)+(B)+(C)	12108550	0.00

BUSINESS DETAILS

Line of Business :

Manufacturing and Selling of Pharmaceuticals and Bulk Drugs.

Products :

Item Code No. (ITC Code)	Product Description
293329-02	Metronidazole
293329-01	Tinidazole
294190-30	Ciprofloxacin

Brand Names :

Not Available

Agencies Held :

Not Available

Exports :

Products :

Pharmaceutical and Bulk Drugs

Countries :

• Netherland
• Germany
• Egypt
• Pakistan

Imports :

Products :

Pharma Drugs

Countries :

• China
• Thailand

Terms :

Selling :

Cash, Credit and L/C

Purchasing :

Cash, Credit and L/C

PRODUCTION STATUS (As on: 31.03.2014)

Particulars	Unit	*Licensed	Installed	Production	Captive	Net Production
Pharmaceuticals	Kgs.	--	14,460	11,482.07	2,357.53	9,124.54
			(29,544)	(23,963.90)	(2,277.11)	21,686.79

NOTE: * As license is not required Licensed Capacity not given.

GENERAL INFORMATION

Suppliers :

Reference :	Reliance Industries Limited
Name of the Person :	Not Divulged
Contact No.:	Not Divulged
Since How Long Known :	Not Divulged
Experience :	Not Divulged
Maximum Limit Dealt :	Not Divulged

Customers :

Reference :	J B Chemicals Limited
Name of the Person :	Not Divulged
Contact No.:	Not Divulged
Since How Long Known :	Not Divulged
Experience :	Not Divulged
Maximum Limit Dealt :	Not Divulged

No. of Employees :

1000 (Approximately)

Bankers :

They have construction facility with 11 branches lead Banked is Union Bank of India

Facilities :

(Rs. In Millions)

Secured Loan	As on 31.03.2014	As on 31.03.2013
LONG TERM BORROWING
From Financial Institution	0.000	232.572
From Scheduled Banks	766.420	442.410
SHORT TERM BORROWING
Loans repayable on demand
From Banks
Borrowings	1718.680	1346.969
Total	2485.100	2021.951

NOTE:

Securities for loans taken from Banks:

Bank Name	As at 31^st March, 2014	As at 31^st March, 2013	F.Y. 2014-15	Subsequent Years
Kotak Mahindra Bank Limited	555.600	200.000	111.120	444.480
DBS Bank Limited	91.000	145.600	45.500	45.500
State Bank of India	332.900	Nil	84.180	248.720
Standard Charted Bank	151.410	265.860	123.690	27.720
Export Charted Bank	Nil	300.667	Nil	Nil
Industrial Development Bank of India	Nil	11.111	Nil	Nil

Note:

1) Above term loan are secured by pari-pasu first charge by way of mortgage of immovable properties and hypothication of moveable fixed assets, both present and future situated at MIDC Boisar, viz Plot No. N-198, G-60, E21& E22,

K-40, K-41 E120, E9/3, & E9/4, and MIDC Turbhe Plot No. D-277 & D-278 in Maharashtra and at GIDC, Sarigam, Bhilad – Gujarat

viz. Plot No. 2902, 2904 & Plot No. 211, 213. The working directors of the Company havepersonally guaranteed Corporate Loan of 3,32.900 Lakhs from State Bank of India.

2) Kotak Mahindra Bank loan is also secured by second charge on current assets of the Company both present and future.

b. Loans from Scheduled Banks 17,186.80 lakhs are secured by hypothecation of Company's raw materials stock, stock-in-process, finished goods, packing materials, stores & spares, book debts, and all other current assets including goods in transit governed by documents of title and also pari-passu second charge by way of mortgage of immovable properties and hypothecation of movable fixed assets, both present and future situated at MIDC Boisar, Maharashtra viz. Plot No. N-198, G-60, E-21 & 22, K-40 & K-41, E-120 and E-9/3 & E-9/4, and at Turbhe Plot No. D-277 & D-278. GIDC,

Bhilad, Sarigam – Gujarat viz. Plot No. 2902, 2904, & 211, 213

Auditors :
Name :	Parikh Joshi and Kothare Chartered Accountants
Address :	49/2341, M. H. B. Colony, Gandhi Nagar, Bandra (East), Mumbai – 400051, Maharashtra, India
Solicitors:	M.P. Savla and Company, Bharat House, 2^nd floor, 104 Mumbai Samachar Marg, Mumbai – 400 001.
Name :	Parikh Joshi and Kothare Chartered Accountants
Address :	49/2341, M. H. B. Colony, Gandhi Nagar, Bandra (East), Mumbai – 400051, Maharashtra, India
Memberships :	--
Collaborators :	--
Associates:	Huanggang Yinhe Aarti Pharmaceutical Company Limited
Enterprise/firms over which controlling individuals have significant influence.	Aarti Industries Limited Anushakti holdings Limited Rupal Drugs LLP Anushakti Chemical and Drugs Limited Gogri and Sons Investments Private Limited Alchemie Gases and Chemicals Private Limited Alchemie Leasing and Financing Private Limited Alchemie Pharma chem Private Limited

CAPITAL STRUCTURE

As on 31.03.2014

Authorised Capital :

No. of Shares	Type	Value	Amount
21500000	Equity Shares	Rs.10/- each	Rs.215.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
12108550	Equity Shares	Rs.10/- each	Rs.121.086 Millions

NOTE:

Reconciliation

Particulars	Numbers	(Rs. In Millions)
Opening outstanding shares	12108550	121.085
Closing outstanding shares	12108550	121.085
Note: There is no movement in shares during the year

Disclosures of shares held by each shareholders more than 5% shares:

Name of Shareholders	As at 31^st March, 2014		As at 31^st March, 2013
	No. of Share held	% held	No. of Share held	% held
Prakash M. Patil	985251	8.14	966464	7.98

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	121.086	121.086	121.085
(b) Reserves & Surplus	2387.953	1954.993	1643.713
(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)	2509.039	2076.079	1764.798
(3) Non-Current Liabilities
(a) long-term borrowings	766.420	807.046	669.238
(b) Deferred tax liabilities (Net)	310.120	275.118	244.720
(c) Other long term liabilities	115.085	100.331	77.100
(d) long-term provisions	0.000	28.574	0.000
Total Non-current Liabilities (3)	1191.625	1211.069	991.058
(4) Current Liabilities
(a) Short term borrowings	2655.975	2149.835	2055.704
(b) Trade payables	1501.783	1318.933	937.857
(c) Other current liabilities	441.848	302.407	286.561
(d) Short-term provisions	197.142	138.865	90.216
Total Current Liabilities (4)	4796.748	3910.040	3370.338
TOTAL	8497.412	7197.188	6126.194
II. ASSETS
(1) Non-current assets
(a) Fixed Assets	3725.262	2912.310	2735.363
(i) Tangible assets	0.000	0.000	0.000
(ii) Intangible Assets	0.000	0.000	0.000
(iii) Capital work-in-progress	83.155	125.889	29.909
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	46.190	51.319	69.184
(c) Deferred tax assets (net)	0.000	0.000	0.000
(d) Long-term Loan and Advances	70.430	25.572	22.659
(e) Other Non-current assets	0.000	0.000	0.000
Total Non-Current Assets	3925.037	3115.090	2857.115
(2) Current assets
(a) Current investments	0.000	0.000	0.000
(b) Inventories	1267.258	1409.191	979.076
(c) Trade receivables	2765.209	2156.748	1806.035
(d) Cash and cash equivalents	43.980	28.788	49.439
(e) Short-term loans and advances	222.059	196.033	271.487
(f) Other current assets	273.869	291.338	163.042
Total Current Assets	4572.375	4082.098	3269.079
TOTAL	8497.412	7197.188	6126.194

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2014	31.03.2013	31.03.2012
	SALES
		Income	9699.372	8248.414	6592.609
		Other Income	18.275	9.057	30.817
		TOTAL (A)	9717.647	8257.471	6623.426
Less	EXPENSES
		Cost of Materials Consumed	5708.202	4924.374	3811.201
		Purchases of Stock-in-Trade	860.248	854.273	733.602
		Changes in inventories of finished goods, work-in-progress and Stock-in-Trade	56.862	(225.936)	(9.166)
		Employees benefits expense	324.063	285.287	248.268
		Other expenses	1304.577	1216.131	1036.818
		Extraordinary items	(9.170)	4.363	11.627
		TOTAL (B)	8244.782	7058.492	5832.35
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		1472.865	1198.980	791.076
Less	FINANCIAL EXPENSES (D)		334.897	280.355	226.719
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		1137.968	918.625	564.357
Less/ Add	DEPRECIATION/ AMORTISATION (F)		281.194	259.840	242.159
	PROFIT BEFORE TAX (E-F) (G)		856.774	658.785	322.198
Less	TAX (H)		239.651	206.400	97.588
	PROFIT AFTER TAX (G-H) (I)		617.123	452.385	224.610
	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		1591.600	1325.300	1250.600
Less	APPROPRIATIONS
		Income tax of Earlier Year	0.000	0.000	8.600
		Transfer to General Reserve	62.000	45.000	23.600
		Proposed Dividend 40%	66.600	48.400	36.300
		1st Interim Dividend 30%	36.300	36.300	24.200
		2nd Interim Dividend 30%	54.500	36.300	0.000
		Tax on Dividend	26.800	20.100	9.800
	BALANCE CARRIED TO THE B/S		1962.523	1591.600	1325.300
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	3502.138	2964.030	2460.501
	TOTAL EARNINGS		3502.138	2964.030	2460.501
	IMPORTS
		Raw Materials	3421.337	2699.919	1793.360
		Capital Goods	29.537	15.492	4.916
	TOTAL IMPORTS		3450.874	2715.411	1798.276
	Earnings Per Share (Rs.)		50.97	37.36	17.84

Expected Sales (2014-15) : Rs. 11620.000 Millions

The above information has been parted by Mr. Anil Pandya

KEY RATIOS

PARTICULARS		31.03.2014	31.03.2013	31.03.2012
Net Profit Margin (PAT/Sales)	(%)	6.36	5.48	34.07
Operating Profit Margin (PBDIT / Sales)	(%)	15.16	14.55	11.99
Return on Total Assets (PBT/Total Assets}	(%)	18.45	16.04	0.00
Return on Investment (ROI) (PBT/Networth)		0.34	0.32	0.00
Debt Equity Ratio (Total Debt /Networth)		1.36	1.42	1.54
Current Ratio (Current Asset/Current Liability)		0.95	1.04	0.97

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	121.085	121.086	121.086
Reserves & Surplus	1643.713	1954.993	2387.953
Net worth	1764.798	2076.079	2509.039
long-term borrowings	669.238	807.046	766.420
Short term borrowings	2055.704	2149.835	2655.975
Total borrowings	2724.942	2956.881	3422.395
Debt/Equity ratio	1.544	1.424	1.364

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	6592.609	8248.414	9699.372
		25.116	17.591

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	6592.609	8248.414	9699.372
Profit	224.610	452.384	617.123
	3.41%	5.48%	6.36%

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	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	Yes
15]	Capital in the business	Yes
16]	Details of sister concerns	Yes
17]	Major suppliers	Yes
18]	Major customers	Yes
19]	Payments terms	Yes
20]	Export / Import details (if applicable)	Yes
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

CASE DETAILS

BENCH:-BOMBAY

Lodging No.:-

ITXAL/1472/2012

Filing Date:-

10/10/2012

Reg. No.:-

ITXA/1241/2012

Reg. Date:-

25/10/2012

Petitioner:-

THE COMMISSIONER OF INCOME TAX- 6,

Respondent:-

M/S. AARTI DRUGS LIMITED

Petn.Adv.:-

SURESH KUMAR

District:-

MUMBAI

Bench:-	DIVISION
Status:-	Admitted(Unready)	Category:-	TAX APPEALS

Last Date:-

01/03/2013

Stage:-

FIRST ON BOARD

Last Coram:-

HON'BLE SHRI JUSTICE J.P. DEVADHAR

HON'BLE SHRI JUSTICE M.S. SANKLECHA

Act :-

Income Tax Act, 1961

Under Section:-

260A

UNSECURED LOAN

(Rs. In Millions)

Particulars	As on 31.03.2014	As on 31.03.2013
LONG TERM BORROWING
Loans and advances from related parties
From Directors	0.000	18.800
From other	0.000	113.264
SHORT TERM BORROWING
Borrowing	757.212	802.866
Loans and advances from related parties
From Directors	31.800	0.000
From other	148.283	0.000
Total	937.295	934.930

OPERATIONS REVIEW

During the year, Gross Sales of the Company have crossed Rs.10000.000 Millions milestone at Rs. 10443.500 Millions (Previous Year Rs. 8857.500 Millions) registering a growth of 17.91%.

The Company has achieved Export Sales of Rs. 3956.900 Millions as against Rs.3222.000 Millions for the last year, registering a growth of 22.81%.

EBITA, has been Rs. 1463.7000 Millions (Previous Year: Rs. 1203.400 Millions), registering a growth of 21.63%. PAT has been Rs. 617.1000 Millions (Previous Year: Rs. 452.400 Millions), registering a growth of 36.41%.

The above results were achieved in spite of shut down of manufacturing operations on account of notices by Pollution Control Authority which were also issued to various units located in the Tarapur region. Due to this, four out of nine plants of the Company had to shut its operations during October 2013. Based on the steps taken by the Company, all the plants could resume manufacturing and had been fully operational during November, 2013 onwards.

MANAGEMENT DISCUSSION AND ANALYSIS

Pharmaceutical industry – Global and Indian

The global pharmaceutical market is expected to reach $ 1.2 trillion by 2017, due to increased global spending.

Pharmerging market is expected to reach 28% of global spending in 2015, whereas US and EU-5 will account for 44% of the global spending. The CAGR of developed market will be 1 to 4% and CAGR of pharmerging market will be 11 to 14% by 2017. Due to globalization, pharmerging countries increased from 5 to 21 and healthcare improvement will continue to be their priority. Many of these countries are implementing healthcare reforms to ensure universal coverage.

The Indian pharmaceutical industry accounts for about 1.4% of the global pharmaceutical industry in value terms and 10% in volume terms. It's revenue is expected to expand at a CAGR of 17.8% from the year 2008 to year 2016, by nearly $ 36 billion. The generic market is expected to grow to $ 26.1 billion by 2016 and has immense potential for growth. India is the fourth largest player by value with 5.7% market share of Asia-Pacific. Indian pharmaceutical industry has many advantages in terms of efficient cost of production, good R&D technical work force for process improvements, lower healthcare costs, diversified array of products viz., over 60,000 generics brands across 60 therapeutic categories comprising of more than 500 different APIs. Economic prosperity, increased drugs affordability and increasing penetration of health insurance along with government initiatives like pharma vision 2020' will propel India to become a global leader as a end-to-end drug manufacturer.

BUSINESS STRATEGY

Domestic Market and Trends:

The domestic formulation market has witnessed a healthy growth in demand in the past five years. Going forward, this trend is expected to continue broadly based on growing population, increasing health awareness and an increasing per capita income leading to a large overall healthcare spend. The market is expected to grow with a CAGR of 13.5% to reach a size of US $17.3 billion in 2014-15. Indian bulk drug industry has grown as a direct offset of formulation growth world-wide.

Aarti Drugs Limited (ADL) has a strong regulatory framework and cGMP level documentation which is now a

standard requirement of most of the big Indian pharmaceutical companies. High process efficiency and high standard for quality has created good brand name for ADL in the space of Antibiotic, Antidiabetic, Antifungal, Antidiarrheal, Anti-inflammatory and Antihypertensive therapeutic segments. Indian pharmaceutical market is growing fast due to penetration of health services in rural areas of the country. There is also a shift in demand from drugs treating hygiene related diseases to drugs treating lifestyle related diseases in the urban sector. ADL has capital expenditure plans worth more than INR 150 crores for coming 18 months for constructing new facilities, few of which are expected to start giving production output from 2014-15. These will cater to ever increasing Antibiotic, Antidiarrheal & Anti-inflammatory segments. ADL has installed new plant at Sarigam (GIDC), which will cater Anti-diabetic segment and will increase it's current capacity from 100 metric tons per month (TPM) to 600 TPM. The plant is already operational and will contribute to incremental revenues for the year 2014-15.

Export Market and Trends:

Indian bulk drug companies have filed 49% of the overall drug master filings (DMFs) made in the US in 2012,

Which will help Indian pharmaceutical companies to capitalize further on export opportunities in regulated and

Semi-regulated markets.

The phenomenal growth of global generics market in past few years is expected to continue for next five years.

The global generics market has grown at a phenomenal pace in past few years, and is expected to grow over the

next five years. Significant portion of bulk drugs manufactured in India is exported as compared to developed

Countries, where bulk drugs are primarily manufactured for captive consumption.

ADL management expects to address concerns arising out of USFDA warning letter received in July'13 in the year 2014-15. We have taken necessary corrective/remedial actions after consulting USFDA consultant which satisfied to the USFDA authorities and expect a re-audit soon. ADL did suffer a setback on account of this in the year 2013-14, which is expected to be recouped in the year 2014-15. However, other facilities of ADL continues to maintain cGMP certifications like COFEPRIS, ANVISA, TGA, WHO GMP and ISO resulting in 22.8% growth of export sales in the year 2013-14.

OUTLOOK

The Company's R&D programs are currently focused on new products related to lifestyle related diseases like Diabetics, Cardiovascular, Dementia, Hypertension, Cholesterol, Hyperphosphatemia, etc. These products would be developed along with their DMFs in a time-horizon of 2-4 years. This falls in line with the vision of expanding ADL's presence in the regulated markets. Company will continue to do R&D on APIs that are off patents and will work on non-infringing route of synthesis. ADL has also tied up with few formulation partners on profit sharing model and Company aiming to file 4-5 dossiar and ANDA in the year 2014-15.

ADL plans to launch more products in ‘Fluoroquinolones' series, making it one of the strongest in Anti-biotic segment. Majority market share and sheer economies of scale with strong technological backup will continue to remain key strengths of ADL. Many projects target to cater US market are in pipeline and are expected to commercialize soon. ADL is also planning to start green-field expansion program of its USFDA facilities in the year 2014-15

STATEMENT OF AUDITED FINANCIAL RESULT FOR THE QUARTER AND YEAR ENDED 30^th SEPTEMBER 2014

(Rs. In Millions)

Sr.		Quarter Ended
No	PARTICULARS	30.09.2014	30.06.2014
		(Audited)	(Audited)
1	Income from Operations
	(a) Gross Sales / Income from Operations	3074.900	2787.700
	Less : Excise Duty & Sales Tax	216.100	191.700
	(a) Net Sales / Income from Operations (Net Of Excise Duty & Sales Tax)	2858.800	2596.000
	(b) Other Operating Income	3.900	1.000
	Total income from operations (net)	2862.600	2597.000
2	Expenditure
	(a) Cost of materials consumed	1768.500	1670.900
	(b) Purchase of stock-in-trade	272.700	319.500
	(c) Changes in inventories of finished goods, work-in-progress and stock-in-trade	(48.000)	(205.200)
	(d) Employee benefits expense	91.700	87.200
	(e) Depreciation and Amortisation Expense	74.600	74.100
	(f) Other expenses	353.700	326.100
	Total expenses	2513.100	2272.500
3	Profit from Operations before Other Income, finance costs and exceptional items (1-2)	349.600	324.500
4	Other Income	--	-
5	Profit from ordinary activities before finance cost and exceptional items (3+4)	349.600	324.500
6	Finance costs (interest)	94.400	98.200
7	Profit from ordinary activities after finance cost but before Exceptional Items (5-6)	255.200	226.200
8	Exceptional Items	-	-
g	Profit from Ordinary Activities before Tax (7-8)	255.200	226.200
10	Tax Expenses (Includes)	67.700	53.900
	Provision for Taxation Current	59.700	48.000
	MAT Credit Entitlement	-	(2.100)
	Earlier Years	-	-
	Provision for Deferred Taxation	8.000	8.000
11	Net profit from ordinary Activities after Tax (9-10)	187.500	172.400
12	Extraordinary item	-	-
13	Net profit for the year	187.500	172.400
14.	Paid-up Equity Share Capital of Rs.10/- each.	121.100	121.100
	Reserves & Surplus (excluding revaluation reserves)	-	-
	Earning per share (of Rs. 10 /- each) (not annualised)
	Basic & Diluted (Before extra-ordinary item)	15.49	14.24
	Basic & Diluted (After extra-ordinary item)	15.49	0.00
A	PARTICULARS OF SHAREHOLDING
1	Public shareholding
	- Number of Shares	4842136	4852768
	- Percentage of Total Shareholding	39.99	40.08
2	Promoters & Promoter Group shareholding a) Pledged/Encumbered
	- Number of Shares	Nil	Nil
	- Percentage of shares( as a % of the total shareholding of promoter and promoter group)	Nil	Nil
	- Percentage of shares( as a % of the total Share capital of the company)	Nil	Nil
	b) Non-encumbered
	- Number of Shares	7266414	7255782
	- Percentage of shares( as a % of the total Shareholding of promoter and promoter group)	100	100
	- Percentage of shares( as a % of the total Share capital of the company)	60.01	59.92

B INVESTOR COMPLAINTS	Quarter Ended 30.09.2014
Pending at the beginning of the quarter	0
Received during the quarter	4
Disposed of during the quarter	4
Remaining unresolved at the end of the quarter	0

NOTES:

• The above results, reviewed by the Audit Committee, have been taken on record by the Board of Directors at their meeting held on 8^th August, 2014
• Company is operating as a single Segment Company, engaged in Pharmaceuticals Business
• Figures for the previous period have been regrouped or rearranged wherever necessary.
• The estimated useful lives of fixed assets have been reviewed and revised to align with the provision of PART C of Schedule II to the Companies Act 2013, effective from April 1, 2014.

STATEMENT OF ASSETS AND LIABILITIES AS AT 30^TH SEPTEMBER 2014

Particulars		As at half year ended on 30.09.2014 (Unaudited)
A	EQUITY AND LIABILITIES
1	Shareholders' Funds
	(a) Share Capital	121.100
	(b) Reserves & Surplus	2659.900
	Total Shareholders’ Funds	2781.000
2	Non-Current Liabilities
	(a) long-term borrowings	656.000
	(b) Deferred tax liabilities (Net)	326.100
	(c) Other long term liabilities	103.900
	(d) long-term provisions	10.800
	Sub Total Non-current Liabilities	1096.800
3	Current Liabilities
	(a) Short term borrowings	3296.700
	(b) Trade payables	1424.900
	(c) Other current liabilities	406.600
	(d) Short-term provisions	233.100
	Sub Total Current Liabilities	5361.400
	TOTAL- EQUITY AND LIABILITIES	9239.200
A	ASSETS
1	Non-current assets
	(a) Fixed Assets	4043.500
	(b) Non-current Investments	50.500
	(c) Long-term Loan and Advances	91.600
	Sub Total Non-Current Assets	4185.600
2	Current assets
	(a) Current investments	0.000
	(b) Inventories	1686.900
	(c) Trade receivables	2836.200
	(d) Cash and cash equivalents	23.300
	(e) Short-term loans and advances	295.300
	(f) Other current assets	211.900
	Sub Total Current Assets	5053.600
	TOTAL-ASSETS	9239.200

INDEX OF CHARGES

S.No.	Charge ID	Date of Charge Creation/Modification	Charge amount secured	Charge Holder	Address	Service Request Number (SRN)
1	10459076	18/10/2013	350,000,000.00	State Bank of India	Industrial Finance Branch, Devchand House,, 1st f loor, Shivsagar Estate, Worli (South),, Mumbai, Maharashtra - 400018, INDIA	B89107965
2	10416348	05/04/2013	400,000,000.00	ICICI BANK LIMITED	LANDMARKRACE COURCE CIRCLE, ALKAPURI, BARODA, Gujarat - 390015, INDIA	B72179666
3	10277975	11/10/2013 *	5,624,300,000.00	Axis Bank Limited	TRISHUL 3RD FLOOR OPP SAMARTHESHWAR TEMPLE, LAW G ARDEN ELLISBRIDGE, AHMEDABAD, Gujarat - 380006, INDIA	B86988599
4	10075106	16/10/2007	150,000,000.00	INDUSTRIAL DEVELOPMENT BANK OF INDIA LIMITED	IDBI TOWERWTC COMPLEX, CUFFE PARADE, MUMBAI, Maharashtra - 400005, INDIA	A26550061
5	90150595	22/12/2008 *	1,313,050,000.00	UNION BANK OF INDIA	UNIONBANK BHAVAN,239, VIDHAN BHAVAN MARG, NARIMAN POINT, MUMBAI, Maharashtra - 400021, INDIA	A54286406

* Date of charge modification

FIXED ASSETS

• Building
• Furniture
• Land
• Office Equipments
• Plant and Machinery
• Vehicles
• Tradename
• Technical Knowhow

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.62.65
UK Pound	1	Rs.98.53
Euro	1	Rs.78.07

INFORMATION DETAILS

Information Gathered by :	HNA
Analysis Done by :	SUM
Report Prepared by :	ART

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
--PROFITABILITY	1~10	6
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	6
--CREDIT LINES	1~10	6
--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		53

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.