MIRA INFORM REPORT

Report Date :

25.06.2014

IDENTIFICATION DETAILS

Name :	CIPLA LIMITED
Registered Office :	289, Opposite Sahil Hotel, Near Citi Center Mall, Bellasis Road, Mumbai Central, Mumbai – 400008, Maharashtra
Country :	India
Financials (as on) :	31.03.2013
Date of Incorporation :	17.08.1935
Com. Reg. No.:	11-002380
Capital Investment / Paid-up Capital :	Rs. 1605.800 Millions
CIN No.: [Company Identification No.]	L24239MH1935PLC002380
TAN No.: [Tax Deduction & Collection Account No.]	MUMC00352C
Legal Form :	A Public Limited Liability Company. The company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Manufacturer and Distributor of Drugs and Healthcare Products.
No. of Employees :	Information Decline by the management

RATING & COMMENTS

MIRA’s Rating :

Aa (77)

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 350000000
Status :	Excellent
Payment Behaviour :	Regular
Litigation :	Exist
Comments :	Subject is a well-established and reputed company having fine track record. The rating reflect “Cipla Limited” leading market position in respiratory segment, stable business performance, continuing strong financial profile characterized by low gearing levels and a healthy liquidity position. Directors are reported to be experienced and respectable businessmen. Trade relations are reported as fair. Business is active. Payments are reported to be 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 – March 31, 2014

Country Name	Previous Rating (31.12.2013)	Current Rating (31.03.2014)
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

The economy grew 4.7 %in 2013/14, marking a second straight year of sub-5 % growth – the worst slowdown in more than a quarter of a century. The data was below an official estimate of 4.9 % annual growth and compared with 4.5 % in the last fiscal year. However, the current account deficit narrowed sharply to $ 32.4 billion at 1.7 % of gross domestic product, in 2013/14 from a record high of $ 98.8 billion or 4.7 %, the year before. A sharp fall in gold imports due to restrictions on overseas purchases and muted import of capital goods helped shrink the current account deficit.

Online retailer Flipkart has acquired fashion portal Myntra as it prepares to battle with the rapidly expanding India arm of the global e-commerce giant Amazon. The company raised $ 210 million from Russian Investment firm DST Global which has also invested in companies like Facebook, Twitter and Alibaba Group.

General Motors will start exporting vehicles from its Talegaon plant near Pune in the second half of 2014. GM was one of the few global carmakers that was using its India plant only for the domestic market.

Google has overtaken Apple as the world’s top brand in terms of value, according to global market research agency Millward Brown. Google’s brand value shot up 40 % in a year to $ 158.84 billion. The top 10 of the 100 slots were dominated by US companies.

Infosys lost another heavy weight when B G Srinivas, a board member put in his papers. He is the third CEO-hopeful to quit after Chairman N R Narayana Murthy’s return to the company – Ashok Vemuri and V Balakrishnan being the other two. While Vemuri went on to lead IGate, Balakrishnan joined politics.

Naresh Goyal – promoted Jet Airways posted biggest quarterly loss – Rs 2153.37 crore – in the three months ended March 31, mainly because it has been offering discounts to passengers to fill planes.

William S Pinckney – Chairman and CEO of Amway India was arrested by the Andhra Pradesh Police in connection with a complaint against the direct selling firm. This is the second time that he has been taken into custody. A year, ago the Kerala Police had arrested Pinckney and two company directors on charges of financial irregularities.

China has told its state-owned enterprises to sever links with American consulting firms after the United States charged five Chinese military officers wih hacking US companies. China’s action which targets consultancies like McKinsey & Co. and the Boston Consulting Group, sterns from fears that the first are providing trade secrets to the US governments.

India has emerged as a country with some of the highest unregistered businesses in the world. Indonesia has the maximum number of shadow businesses, says a study of 68 countries by Imperial College Business School in London.

Pfizer has abandoned its attempt to buy AstraZeneca for nearly $ 118 billion after the latter refused an offer of 55 pounds a share.

EXTERNAL AGENCY RATING

Rating Agency Name	CARE
Rating	Long term Bank facilities : AAA
Rating Explanation	Highest degree of safety and carry lowest credit risk
Date	02.12.2013

Rating Agency Name	CARE
Rating	Short term Bank facilities : A1+
Rating Explanation	Very strong degree of safety and lowest credit risk.
Date	02.12.2013

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

INFORMATION DECLINED

Management non-cooperative. (Tel. No.: 91-22-23095521)

LOCATIONS

Registered/ Corporate Office/ Head Office :	289, Opposite Sahil Hotel, Near Citi Center Mall, Bellasis Road, Mumbai Central, Mumbai – 400008, Maharashtra, India
Tel. No.:	91-22-23095521/ 23082891/ 23023272/ 23025272
Fax No.:	91-22-23070013/ 23070393/ 85/ 23008101
E-Mail :	exports@cipla.com info@cipla.com corporate@cipla.com cosecretary@cipla.com
Website :	http://www.cipla.com
Factory 1:	Virgonagar, Old Madras Road, Bangalore – 560049, Karnataka, India
Factory 2:	Bommasandra-Jigani Link Road, Industrial Area, KIADB 4th Phase, Bangalore - 560099, Karnataka, India
Factory 3:	MIDC, Patalganga, District Raigad – 410220, Maharashtra, India
Factory 4:	MIDC Industrial Area, Kurkumbh, Daund District Pune - 413802, Maharashtra, India
Factory 5:	Verna Industrial Estate, Verna, Salcette, Panaji – 403722, Goa, India
Factory 6:	Village Malpur Upper, P.O. Bhud, Nalagarh, Baddi, District Solan - 173205, Himachal Pradesh, India
Factory 7:	Village Kumrek, P.O. Rangpoo-737132, East District Sikkim
Factory 8:	Indore SEZ, Phase ll, Sector III, Pharma Zone, P.O. Pithampur, District Dhar -454774, Madhya Pradesh, India

DIRECTORS

As on: 31.03.2013

Name :	Dr. Y.K. Hamied
Designation :	Chairman and Managing Director
Name :	Mr. M.K. Hamied
Designation :	Joint Managing Director
Name :	Mr. S. Radhakrishnan
Designation :	Whole-time Director
Name :	Dr. H.R. Manchanda
Designation :	Non-Executive Directors
Name :	Mr. Ramesh Shroff
Designation :	Non-Executive Directors
Name :	Mr. V.C. Kotwal
Designation :	Non-Executive Directors
Name :	Mr. M.R. Raghavan
Designation :	Non-Executive Directors
Name :	Mr. Pankaj Patel
Designation :	Non-Executive Directors
Name :	Dr. Ranjan Pai
Designation :	Non-Executive Directors

KEY EXECUTIVES

Name :	Mr. Subhanu Saxena
Designation :	Chief Executive Officer

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on: 31.03.2014

Category	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	122720500	15.45
Bodies Corporate	6022791	0.76
Sub Total	128743291	16.21
(2) Foreign
Individuals (Non-Residents Individuals / Foreign Individuals)	166742687	21.00
Sub Total	166742687	21.00
Total shareholding of Promoter and Promoter Group (A)	295485978	37.21
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	35560020	4.48
Financial Institutions / Banks	2152471	0.27
Insurance Companies	54034329	6.80
Foreign Institutional Investors	187252746	23.58
Sub Total	278999566	35.14
(2) Non-Institutions
Bodies Corporate	37612575	4.74
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 million	53824390	6.78
Individual shareholders holding nominal share capital in excess of Rs. 0.100 million	97190029	12.24
Qualified Foreign Investor	100	0.00
Any Others (Specify)	30941723	3.90
Trusts	1468026	0.18
Foreign Corporate Bodies	143297	0.02
Non Resident Indians	27633780	3.48
Clearing Members	1696036	0.21
Foreign Nationals	209	0.00
Overseas Corporate Bodies	375	0.00
Sub Total	219568817	27.65
Total Public shareholding (B)	498568383	62.79
Total (A)+(B)	794054361	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	8866996	0.00
Sub Total	8866996	0.00
Total (A)+(B)+(C)	802921357	0.00

BUSINESS DETAILS

Line of Business :

Manufacturer and Distributor of Drugs and Healthcare Products.

PRODUCTION STATUS (AS ON 31.03.2011)

Particulars	Unit	Installed Capacity	Actual Production
Bulk Drugs (including Malts)	Tonne	1492.9	1601.2
Tablets and Capsules	Million	17496.1	17935.3
Liquids	Kilolitre	3191.5	9009.8
Creams	Tonnes	689.0	898.9
Aerosols/Inhalation Devices	Thousand	143452.5	55256.9
Injections/Sterile Solutions	Kilolitre	1739.0	2525.9
Others		--	2061.7

NOTES

· In terms of press Note No. 4 (1994 series) dated 25th October 1994 issued by the Department of Industrial Development, Ministry of Industry, Government of India and Notification No. S.O. 137 (E) dated 1st March 1999 issued by the Department of Industrial Policy and Promotion, Ministry of Industry, Government of India, Industrial licensing has been abolished in respect of bulk drugs and formulations. Hence there are no registered/licensed capacities for these bulk drugs and formulations.

· Installed capacity being effective operational capacity has been reviewed and calculated on shift basis for formulations and on a continuous basis for active pharmaceutical ingredients and drug intermediates. The installed capacity may, therefore, vary according to the production mix. In addition, installed capacity does not include the installed capacity of contract manufacturing sites.

· Actual production for all dosage forms includes production carried out by Cipla at contract manufacturing sites.

· The installed capacity is as certified by the management and not verified by the auditors, this being a technical matter.

· Actual production includes production of goods captively consumed.

GENERAL INFORMATION

No. of Employees :

Information Decline by the management

Bankers :

Ø Bank of Baroda

Ø Canara Bank

Ø Corporation Bank

Ø Indian Overseas Bank

Ø Standard Chartered Bank

Ø The Hongkong and Shanghai Banking Corporation Limited

Ø Union Bank of India

Facilities :

(Rs. In Millions)

Secured Loan	As on 31.03.2013	As on 31.03.2012
Short term borrowings
Cash Credit from banks (Secured against receivables and moveable assets including stocks, both present and future)	94.900	100.000
Total	94.900	100.000

Banking Relations :	--
Auditors :
Name :	V. Sankar Aiyar and Company Chartered Accountants
Auditors 2 :
Name :	R.G.N. Price and Company Chartered Accountants
Subsidiaries (held directly) :	Ø Cipla FZE Ø Goldencross Pharma Private Limited Ø Cipla (Mauritius) Limited Ø Meditab Specialities Private Limited
Subsidiaries (held indirectly) :	Ø Cipla (UK) Limited Ø Cipla Australia Pty Limited (formerly Cipla-Oz Pty Limited Ø Cipla (EU) Limited (formerly STD Chemicals Limited Ø Medispray Laboratories Private Limited Ø Sitec Labs Private Limited Ø Four M Propack Private Limited Ø Meditab Holdings Limited Ø Meditab Pharmaceuticals South Africa (Pty) Limited Ø Meditab Specialities New Zealand Limited Ø Cipla İlaç Ticaret Anonim Ø Cipla USA Inc. (w.e.f. 12th September 2012) Ø Cipla Kenya Limited (w.e.f. 8th October 2012) Ø Cipla Malaysia Sdn. Bhd. (w.e.f. 20th March 2013)
Associates :	Ø Quality Chemical Industries Limited Ø Stempeutics Research Private Limited Ø Biomab Holding Limited Ø Mabpharm Private Limited (w.e.f. 29th October 2012)
Joint Venture :	Aspen-Cipla Australia Pty Limited
Entities over which Key Management Personnel are able to exercise significant influence :	Ø Okasa Private Limited Ø Okasa Pharma Private Limited Ø Cipla Foundation

CAPITAL STRUCTURE

As on: 31.03.2013

Authorised Capital :

No. of Shares	Type	Value	Amount
875000000	Equity Shares	Rs. 2/- each	Rs. 1750.000 Millions

Issued :

No. of Shares	Type	Value	Amount
803924752	Equity Shares	Rs. 2/- each	Rs. 1607.800 Millions

Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
802921357	Equity Shares	Rs. 2/- each	Rs. 1605.800 Millions

Ø There is no change in the shares outstanding at the beginning and at the end of the reporting date and immediately preceding reporting date.

Ø Details of Shareholders holding more than 5 percent shares in the Company

Particulars	31.03.2013
	Number of shares	% Holding
Y.K. Hamied	124827750	15.55
Farida Hamied	41914937	5.22
Sophie Ahmed	45982000	5.50
Life Insurance Corporation of India	80153536	9.98

Terms and Rights attached to Equity Shares

The Company has only one class of equity shares having a par value of `2 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholder.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2013	31.03.2012
EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	1605.800	1605.800
(b) Reserves & Surplus	87089.400	73897.000
(c) Money received against share warrants	0.000	0.000
(2) Share Application money pending allotment	0.000	0.000
Total Shareholders’ Funds (1) + (2)	88695.200	75502.800
(3) Non-Current Liabilities
(a) long-term borrowings	5.500	22.000
(b) Deferred tax liabilities (Net)	2812.000	2324.500
(c) Other long term liabilities	300.000	300.000
(d) long-term provisions	473.400	291.200
Total Non-current Liabilities (3)	3590.900	2937.700
(4) Current Liabilities
(a) Short term borrowings	9652.600	100.000
(b) Trade payables	8270.900	6858.500
(c) Other current liabilities	2426.200	2327.900
(d) Short-term provisions	2296.300	2206.400
Total Current Liabilities (4)	22646.000	11492.800
TOTAL	114932.100	89933.300
ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	34182.900	30026.600
(ii) Intangible Assets	0.000	0.000
(iii) Capital work-in-progress	3399.900	3434.500
(iv) Intangible assets under development	103.500	0.000
(b) Non-current Investments	5143.600	4618.300
(c) Deferred tax assets (net)	0.000	0.000
(d) Long-term Loan and Advances	3737.200	3935.000
(e) Other Non-current assets	3.100	2.400
Total Non-Current Assets	46570.200	42016.800
(2) Current assets
(a) Current investments	20874.600	5733.200
(b) Inventories	23433.700	18245.000
(c) Trade receivables	16452.200	15193.100
(d) Cash and cash equivalents	1050.700	550.600
(e) Short-term loans and advances	6527.900	7654.800
(f) Other current assets	22.800	539.800
Total Current Assets	68361.900	47916.500
TOTAL	114932.100	89933.300

SOURCES OF FUNDS		31.03.2011
SHAREHOLDERS FUNDS
1] Share Capital		1605.800
2] Share Application Money		0.000
3] Reserves & Surplus		64523.700
4] (Accumulated Losses)		0.000
NETWORTH		66129.500
LOAN FUNDS
1] Secured Loans		29.500
2] Unsecured Loans		4384.400
TOTAL BORROWING		4413.900
DEFERRED TAX LIABILITIES		2124.500
TOTAL		72667.900
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		28680.200
Capital work-in-progress		2530.700
INVESTMENT		5702.800
DEFERREX TAX ASSETS		0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	18831.600
	Sundry Debtors	14970.400
	Cash & Bank Balances	841.300
	Other Current Assets	3.600
	Loans & Advances	12688.800
Total Current Assets		47335.700
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	7750.900
	Other Current Liabilities	1631.800
	Provisions	2198.800
Total Current Liabilities		11581.500
Net Current Assets		35754.200
MISCELLANEOUS EXPENSES		0.000
TOTAL		72667.900

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2013	31.03.2012	31.03.2011
	SALES
		Income	82024.200	69775.000	61351.600
		Other Income	2291.300	1483.000	2987.200
		TOTAL (A)	84315.500	71258.000	64338.800
Less	EXPENSES
		Cost of Materials Consumed	26468.300	23008.500	--
		Purchase of Traded Goods	7068.900	5555.500	--
		Changes in Inventories of Finished Goods, Work-in-Process and Traded Goods	(2907.500)	112.400	--
		Employee Benefits Expense	9692.800	7282.100	--
		Other Expenses	20510.300	17997.900	--
		Material Cost	--	--	28604.300
		Employee Cost	--	--	4642.000
		Other Expenses	--	--	14640.700
		Research and Development Expenses	--	--	2597.900
		Exceptional Item being sale of branch and other related rights	--	--	0.000
		TOTAL (B)	60832.800	53956.400	50484.900
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		23482.700	17301.600	13853.900
Less	FINANCIAL EXPENSES (D)		333.800	266.300	51.400
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		23148.900	17035.300	13802.500
Less/ Add	DEPRECIATION/ AMORTISATION (F)		3030.300	2820.700	2288.600
	PROFIT BEFORE TAX (E-F) (G)		20118.600	14214.600	11513.900
Less	TAX (H)		5047.500	2975.000	1910.000
	PROFIT AFTER TAX (G-H) (I)		15071.100	11239.600	9603.900
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		31108.900	22979.300	16990.700
Less	APPROPRIATIONS
		Interim Dividend	0.000	--	642.300
		Proposed Dividend	1605.800	1600.000	1605.800
		Tax on Dividend	272.900	260.000	367.200
		Transfer to General Reserve	1600.000	1250.000	1000.000
	BALANCE CARRIED TO THE B/S		42701.300	31108.900	22979.300
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	NA	36920.300	33614.900
		Technical Know-how/ Fees	NA	295.500	547.600
		Others	NA	65.900	14.200
	TOTAL EARNINGS		NA	37281.700	34176.700
	IMPORTS
		Raw Materials / Packing Materials	12067.800	9543.400	11707.700
		Components and Spare Parts	262.300	324.200	417.400
		Capital Goods	832.100	1465.000	1793.900
	TOTAL IMPORTS		13162.200	11332.600	13919.000
	Earnings Per Share (Rs.)		18.77	14.00	11.96

QUARTERLY RESULTS

PARTICULARS	30.06.2013 1^st Quarter
Sales Turnover	24638.800
Total Expenditure	17885.100
PBIDT (Excl OI)	6753.700
Other Income	691.400
Operating Profit	7445.100
Interest	407.600
Exceptional Items	0.000
PBDT	7037.500
Depreciation	788.800
Profit Before Tax	6248.700
Tax	1499.700
Provision and Contingencies	0.000
Reported PAT	4749.000
Extraordinary Items	0.000
Prior Period Expenses	0.000
Other Adjustments	0.000
Net Profit	4749.000

KEY RATIOS

PARTICULARS		31.03.2013	31.03.2012	31.03.2011
PAT / Total Income	(%)	17.88	15.77	14.93
Net Profit Margin (PBT/Sales)	(%)	24.52	20.37	18.77
Return on Total Assets (PBT/Total Assets}	(%)	18.92	18.67	15.15
Return on Investment (ROI) (PBT/Networth)		0.22	0.19	0.17
Debt Equity Ratio (Total Debt/Networth)		0.11	0.00	0.07
Current Ratio (Current Asset/Current Liability)		3.01	3.85	4.09

FINANCIAL ANALYSIS

[all figures are in Rupees Millions]

DEBT EQUITY RATIO

Particular	31.03.2012	31.03.2013
	(Rs. In Millions)	(Rs. In Millions)
Share Capital	1605.800	1605.800
Reserves & Surplus	73897.000	87089.400
Net worth	75502.800	88695.200
long-term borrowings	22.000	5.500
Short term borrowings	100.000	9652.600
Total borrowings	122.000	9658.100
Debt/Equity ratio	0.002	0.109

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.03.2011	31.03.2012	31.03.2013
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Sales	61351.600	69775.000	82024.200
		13.730	17.555

NET PROFIT MARGIN

Net Profit Margin	31.03.2011	31.03.2012	31.03.2013
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Sales	61351.600	69775.000	82024.200
Profit	9603.900	11239.600	15071.100
	15.65%	16.11%	18.37%

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	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

UNSECURED LOAN

(Rs. In Millions)

Particulars	As on 31.03.2013	As on 31.03.2012
Long Term Borrowings
Deferred Payment Liability - Sales Tax Deferral Loan	5.500	22.000
Short term borrowings
Packing Credit from Banks	9557.700	0.000
Total	9563.200	22.000

LITIGATION DETAILS:

HIGH COURT OF BOMBAY

Bench:- Bombay
Presentation Date:- 09/05/2014
Lodging No:-		CAL/218/2014		Filling Date:	09/05/2014
Petitioner:-	TWILIGHT LITAKA PHARM LIMITED		Respondent:-	CIPLA LIMITED
Petn. Adv.:	THODUR LAW ASSOCIATES (I2108)
District:-	PUNE
Bench:-	SINGLE
Status:-	Pre-Admission		Category:-	COMPANY APPLN. U/SEC 433,434,439 OF COMPANIES ACT
Next Date:-	27/06/2014		Stage:
Coram:	HON’BLE SHRI JUSTICE S.J.KATHAWALLA
Act:-	Companies Act and Rules 1956		Under Section:-	433,434 and 439

PRESS RELEASE

CIPLA ANNOUNCES Q1 FY 1314 UNAUDITED FINANCIAL RESULTS

Mumbai, India, 9th August 2013: Cipla Limited (BSE: 500087, NSE: CIPLA) today announced its Unaudited Financial Results for the quarter ended June 30, 2013 (Q1).

Key Financial & Performance Highlights Q1 FY1314 vis-a-vis Q1 FY1213:

Gross revenues grew by 25.3% to Rs.24920.000 millions, up from Rs.19890.000 millions

Operating margins grew by 24.8% to Rs.6750.000 millions, up from Rs.5410.000 millions

Profit after tax grew by 18.5% to Rs.4750.000 millions, up from Rs.4010.000 millions

Profit & Loss Highlights:

Material cost is at 40.8% of Total Sales in Q1 FY1314 as compared to 37.6% in Q1 FY1213.

Operating margins increased by 24.8% and is at 27.1% of Income from Operations during Q1 FY1314.

Profit after tax increased by 18.5% to Rs.4750.000 millions during Q1 FY1314 as compared to Rs.4010.000 millions during Q1 FY1213.

Performance Review:

Domestic business:

Domestic revenues grew by 16.7% to Rs.11320.000 millions during Q1 FY1314, up from Rs.9700.000 millions during Q1 FY1213.

The growth in domestic revenues was largely on account of growth in anti-asthma, anti-biotics/ infectives, and cardiovascular therapy segments.

International business:

Exports of formulations grew by 27.7% to Rs.10340.000 millions during Q1 FY1314, up from Rs.8100.000 millions during Q1 FY1213.

Exports of APIs fell by 13.1% to Rs.1460.000 millions during Q1 FY1314, from Rs.1680.000 millions during Q1 FY1213.

The growth in export revenues was primarily due to growth in anti-retroviral, anti-asthma and anti-allergic segments.

CIPLA INDIA CONCLUDES THE DEAL WITH CIPLA MEDPRO SOUTH AFRICA

India, Mumbai, 16th July 2013:

Cipla Limited (“Cipla”), one of India’s leading generic pharmaceutical companies today announced that it has completed the acquisition of 100% of the issued shares of Cipla Medpro South Africa Limited (“Medpro”), for an aggregate consideration of ZAR 4507mn (INR 2707cr). The listing of the shares of Medpro on the JSE Ltd has been terminated from the commencement of business on 16th July 2013.

Commenting on the successful acquisition, Mr. Subhanu Saxena, MD and Global CEO, Cipla said, “This investment is aligned with Cipla’s strategy to ascend the value-chain by managing a front-end sales force in a market outside India. The acquisition aims to further strengthen the Cipla’s commitment to South Africa and the broader African continent. The integrated business will compete more effectively in the changing local and global pharmaceutical environments and as such there will be an increasing focus on key African markets.”

Mr. Saxena further added, “Spanning nearly two decades, Cipla and Medpro enjoyed a log-standing symbiotic relationship and the acquisition will strengthen Medpro’s position in the South African pharmaceutical market by leveraging Cipla’s wide range of product portfolio and technological expertise. This will bring tangible benefits to consumers in South Africa, and increasingly the rest of Africa.”

CIPLA LAUNCHES THE FIRST BIOSIMILAR OF ETANERCEPT IN INDIA UNDER THE BRAND NAME ‘ETACEPT’ FOR THE TREATMENT OF RHEUMATIC DISORDERS

India, Mumbai, 17th April 2013:

Cipla, one of India’s leading generic pharmaceutical companies announces the launch of the first biosimilar of Etanercept in India; under the brand name ‘ETACEPT’ for the treatment of rheumatic disorders. Formed through a partnership alliance, ETACEPT is manufactured by a China-based company Shanghai CP Guojian Pharmaceutical Co. Ltd., which will be marketed by Cipla in India. Over the 75 years, Cipla has established itself as a leader in many disease areas such as respiratory, cardiology, urology and anti-infectives including HIV/AIDS and of late has been aggressively developing the product pipeline in emerging therapies like Oncology, Rheumatology, Pulmonary Arterial Hypertension, Hepatology etc. The introduction of Etacept now signals Cipla’s entry into the Biologic segment offering an option to the patients suffering from Rheumatic disorders at a lower cost.

Rheumatic Disorders are chronic inflammatory disorders affecting the joints, characterized by pain, redness, swelling and loss of function in several joints. It can lead to joint damage and deformities. If left undiagnosed and untreated, this could lead to permanent disability and at times could lead to mortality. However, rheumatic disorders can be controlled by early diagnosis and treatment.

Currently there are DMARDs (Disease modifying anti-rheumatic drugs) which are considered to be the first line of treatment for rheumatic disorders. However, approximately 40% of the patients are not controlled on these drugs. In such cases, biologics like Etanercept play a significant role in controlling the disease activity and make a positive difference in the lives of these patients.

ETACEPT contains Etanercept, a biologic produced by recombinant DNA technology. Etacept (Etanercept) binds to TNF-α, a cytokine that plays a very important role in the inflammation and joint damage in rheumatic disorders. It helps in modifying the course of the disease and prevents further damage to the joints. Etacept (Etanercept) is approved in the management of rheumatic disorders like Rheumatoid Arthritis, Ankylosing spondylitis, Juvenile Idiopathic Rheumatoid Arthritis and Psoriatic Arthritis.

Since its launch in 2006 in China by Shanghai CP Guojian Pharmaceutical Company Limited, over 50,000 patients have been treated with Etanercept. Clinical efficacy and the safety of the drug have also been well established in Indian patients.

Etacept is available as a lyophilized powder to be given by subcutaneous injection. It is available with stockists across the country at Rs. 6,150/- and the recommended dose for adults is 25mg twice weekly by subcutaneous injection.

Commenting on the launch of Etacept, Dr. Jaideep Gogtay, Medical Director, Cipla said, “The higher cost of biologics has been a major hindrance, limiting its affordability and accessibility to millions of patients. We believe that introducing Etacept at a lower cost (30% lesser as compared to the innovator) will enable access of this drug to a greater number of patients in India. This can be enhanced further if we consider the results of a recent study that showed in patients who were successfully treated with Etanercept for 6 months, a 50% reduced dose worked just as well as continuing the current dose.”

MARKET EYE-MORGAN STANLEY DOWNGRADES CIPLA TO "UNDERWEIGHT"

• Morgan Stanley downgrades Cipla Ltd to "underweight" from "equal-weight" and reduces its target price on the stock to 386 rupees from 414 rupees citing slower growth prospects and valuations.

• The bank adds that the drugmaker's move to build a marketing and sales front-end operation in the United States and Europe will yield results only in the longer term.

• Morgan Stanley's downgrade comes a day after Macquarie upgraded Cipla to "outperform" from "neutral", saying the drugmaker's April-June earnings were "significantly above" their estimates.

• Cipla on Saturday posted an 18.5 percent jump in April-June net profit to 4.75 billion rupees ($78 million).

• Cipla shares are up 2 percent at 0430 GMT.

MANAGEMENT REVIEW: 2012-13

INDUSTRY STRUCTURE AND DEVELOPMENT

There has been a modest improvement in the global financial condition ensuring reduced short term risks; however, the overall financial climate has not picked up the momentum of recovery. From a regional outlook, the US experienced a moderate growth, while the Eurozone continued to be in a vulnerable position with high risks of banking system meltdown and unresolved debt crisis issues. The emerging economies such as the BRIC countries did not pace up to last fiscal year’s growth; however, other emerging nations including developing Asia showed promising growth.

The data from the Central Statistics Office affirmed the Indian GDP Growth rate at a decade lowest of 5% for the fiscal year 2012-13 on account of weakness in investment, significant deceleration in household consumption and sluggish exports. The declining growth warranted the government to take immediate steps to curtail inflation and restore fiscal health. The Indian economy is expected to gradually recover, with a projected 6.4% growth for 2013-14. However, the financial climate will continue to face various challenges in the coming year.

Despite the fragile economic environment, the Indian pharmaceutical market grew at a healthy 10%. This robustness in performance is a testimony to the measures taken in improving healthcare standards. Factors that also bolstered the Indian pharmaceuticals’ performance include strong exports to the US and the depreciation of the Rupee against the Dollar. The positive growth is expected to be a long-term phenomenon in the industry, promising a CAGR of 14-16% in the next 5 years.

During May 2013, the Department of Pharmaceuticals notified the Drugs (Prices Control) Order 2013 under which prices of 348 medicines in the National List of Essential Medicines (NLEM) have been brought under price control, thus replacing an earlier order of 1995 that regulated prices of 74 bulk drugs. There is a shift from cost-based to market-based pricing methodology under the new drug policy which is expected to benefit consumers. There are a few provisions in the DPCO 2013 which are impractical and could lead to potential litigations. The government must address these issues by taking a balanced approach. While the move to market-based pricing is positive, the government must focus on the issue of affordability and access for all medicines. In India, the prices of generics are among the lowest in the world. Since the government has already constituted a committee to regulate patented medicines, it should look at developing mechanisms to address affordability of patented and monopoly products through instruments such as reference pricing or compulsory licensing in return for reasonable royalties.

There is a policy paralysis on the drug regulatory approval process. If India is to retain its pharmaceutical growth story, it must quickly unshackle and revamp the drug approval process, and put in place a more fast track balanced system.

Recently, the Indian Health Ministry’s rush to ban certain old established drugs in an arbitrary and discriminate manner is disturbing. The regulatory environment is fraught with uncertainties and is quite challenging.

Globally the generic pharmaceutical market is expected to progress at 15% annually to become approximately USD 170 billion in 2014. A downturn in the global economy and expiry of patents serve as an impetus for the generics industry to expand further in the future. The emerging economies are responding very positively to the industry demand drivers which include a growing and ageing global population, increasing incidence of non-communicable and infectious diseases, improved access to healthcare and higher affordability.

PERFORMANCE REVIEW

The Company’s revenue from operations during the financial year 2012-13 amounted to Rs.82950.000 millions against Rs.70750.000 millions in the previous year recording a growth of more than 17 percent. The domestic turnover increased by more than 14 percent, from Rs.32130.000 millions in the previous financial year to Rs.36810.000 millions in the financial year. Total exports increased by about 20 percent during the year to Rs.44260.000 millions.

During the year, operating margin increased by 34 percent. This was primarily due to reduction in material cost on account of improved realisations, changes in the product mix and higher contribution of Escitalopram in the US. As a result, profit after tax increased by more than 34 percent to Rs.15070.000 millions from Rs.11240.000 millions in the previous financial year.

In order to build a strong foundation for future growth, Cipla launched Jaagruti, the transformation programme, during the year. The programme is aimed at reducing business complexity and strengthening operations. Cipla rationalized its exposure to several low value markets and partners to reduce complexity. Additionally, on-time-in-full delivery levels improved two to threefold through dedicated efforts in the supply chain processes. The impact of these initiatives has already been recognized by several key partners worldwide.

Another critical focus of this programme is to improve cost effectiveness across products while upholding the highest standards of regulatory, quality and safety requirements. Jaagruti’s efforts have reduced yield loss, shortened lead times and debottlenecked constrained capacities across manufacturing facilities by implementing several improvement ideas. The Company has recently also launched ‘Procurement Effectiveness Effort’ to build best in class procurement practices and further realize cost savings.

Cipla strives to maintain world-class quality for its products and services across all markets. Cipla will continue to enhance its already strong focus on quality, and ensure that every patient has access to the best quality medicines in the world.

In the coming years, the Company will invest in two of its most critical assets, product pipeline and people, to drive growth. There is renewed emphasis in the Company to develop right organisational structures, nurture top talent and build a formidable global leadership team. Earlier this year, Cipla announced the appointment of Mr. Subhanu Saxena as its Chief Executive Officer. Mr. Saxena comes with a rich work experience of over 25 years, and will lead the Company to deliver the next phase of growth, while building on Cipla’s core values.

PRODUCTS

The Company introduced many new drugs and formulations during the year. Some significant formulations are mentioned below:

• Amlopres VL (amlodipine and valsartan tablets) – combination therapy for effective hypertension management
• Cinmove OD (cinitapride sustained-release tablets) – for gastrointestinal motility problems and acid reflux
• Cresar Plus (telmisartan, amlodipine and hydrochlorothiazide tablets) – a triple combination for managing severe hypertension uncontrolled by therapy
• Doricrit (doripenem injection) – an effective antibacterial for Pseudomonas infections
• D-SOL/Vitomin D3 (vitamin D3 granules) – for treatment of Vitamin D deficiency
• Esomac D (esomeprazole and domperidone sustained-release capsules) – for the treatment of acid-reflux related symptoms
• Esomac IV (esomeprazole sodium injection) – for short-term and rapid treatment of acid reflux
• Foracort (formoterol and budesonide respules) – world’s first inhaled corticosteroid-bronchodilator combination in the form of a respirator suspension for COPD
• Levepsy (levetiracetam injection) – for the treatment of seizures when oral anti-epileptics cannot be administered
• Lumacip (hydroquinone cream) – for mild melasma
• Lumacip Plus (hydroquinone, fluocinolone and tretinoin cream) – India’s first US FDA formula for moderate to severe melasma
• Mefliam Plus (artesunate and mefloquine tablets) – combination therapy for drug-resistant falciparum malaria
• Mupinase (mupirocin ointment) – for bacterial skin infections
• Paclitax NAB (paclitaxel injection) – novel formulation for treating breast cancer and lung cancer
• Painil SP (paracetamol, aceclofenac and serratiopeptidase tablets) – a triple drug combination for pain and inflammation
• Pulmigen (freeze dried bacterial lysate tablets) – sublingual vaccine for preventing respiratory tract infections
• Qvir Kit (kit of atazanavir, ritonavir, tenofovir and emtricitabine tablets) – a once-daily kit for HIV/AIDS
• RidAR Kid (montelukast and levocetrizine tablets and syrup) – for the treatment of allergic rhinitis symptoms in children
• Rixmin 550 (rifaximin tablets) – for reducing the risk of hepatic coma
• Ston1 B6 (potassium citrate, magnesium citrate and pyridoxine hydrochloride oral solution) – for prevention of recurrence of urinary stones
• Tiganex (tigecycline injection) – novel antibacterial for difficult-to-treat, hospital-acquired infections
• Tugain (minoxidil foam) – innovative foam formulation for hair loss in males
• Urifast (nitrofurantoin) suspension – for treatment and prophylaxis of urinary tract infections in children

The following Active Pharmaceutical Ingredients (APIs) were successfully scaled up:

• Brinzolamide – for glaucoma
• Ciclopirox Olamine – for fungal skin infections
• Darifenacin Hydrobromide – for urinary incontinence
• Dexlansoprazole Sesquihydrate – for heartburn
• Memantine Hydrochloride – for dementia
• Palonosetron Hydrochloride – for prevention and treatment of chemotherapy-induced nausea and vomiting

MANUFACTURING AND ADMINISTRATIVE FACILITIES

During the year, the Company has set up an Active Pharmaceutical Ingredient (API) R and D facility at Patalganga, Maharashtra, and commenced commercial production of anticancer APIs at Bommasandra, Bengaluru and anti-ulcerant APIs at Kurkumbh, Maharashtra. Cipla has also recently completed the project on APIs of antiretrovirals (ARVs) in Kurkumbh, Maharashtra. The total capital expenditure for the above projects is about Rs.2740.000 millions. Additionally, in order to expand and consolidate its Head Office operations, the Company has acquired office space in Peninsula Business Park in Lower Parel, Mumbai for Rs.2940.000 millions.

The Patalganga project for the up-gradation and scale-up of API facilities is nearing completion. It is anticipated that operations will commence during 2013-14. The Company is also scaling up its anti-cancer formulations facility at Goa. Besides, Cipla is in the process of setting up a new R and D and administration facility at Vikhroli, Mumbai.

STATEMENT OF STANDALONE AUDITED RESULTS FOR THE QUARTER AND YEAR ENDED 31^ST MARCH 2014

(Rs. In Millions)

Particular	Quarter Ended		Half Year
	31.03.2014	31.12.2013	31.03.2014
Income from Operations
Net Sales/Income from Operations (Net of excise duty)	21941.900	22532.000	90349.500
Other Operating Income	932.000	283.800	3453.400
Total Income from operations (net)	22873.900	22815.800	93802.900
Expenses
(a) Cost of materials consumed	8138.200	8604.300	31453.400
(b) Purchases of stock-in-trade	2039.000	2176.700	7734.000
(c) Changes in inventories of finished goods, work-in-progress and stock-in-trade	(427.200)	(1530.000)	(1581.200)
(d) Employee benefits expense	3328.000	3263.400	12847.500
(e) Depreciation and amortisation expense	810.000	820.800	3236.100
(f) Other expenses	6213.000	6272.000	23453.900
Total Expenses	20101.000	19607.200	77143.700
Profit (+)/Loss (-) from operations before other income and finance costs (1-2)	2772.900	3208.600	16659.200
Other Income	935.400	530.800	2802.800
Profit (+)/Loss (-) before finance costs (3+4)	3708.300	3739.400	19462.000
Finance costs	251.900	283.000	1278.600
Profit (+)/Loss (-) before tax (5-6)	3456.400	3456.400	18183.400
Tax Expenses	690.000	846.700	4300.000
Net Profit (+)/Loss (-) after tax (7-8)	2766.400	2607.700	13883.400
Paid- up Equity Share Capital (Face value of the share – Rs. 2 per share)	1605.800	1605.800	1605.800
Reserves excluding revaluation reserves as per balance sheet of Previous Accounting Year
Earnings per share
Basic -Diluted *Not Annualised	*3.44 *3.44	*3.25 *3.24	17.29 17.27
PARTICULARS OF SHAREHOLDING
1. Public shareholding
Number of Shares	498568383	498311105	498568383
Percentage of Shareholding	62.09	62.06	62.09
2. Promoters and promoter group shareholding
a) Pledged/Encumbered
- Number of Shares	Nil	Nil	Nil
- Percentage of Shares (as a % of the Total Shareholding of promoter and promoter group)	Nil	Nil	Nil
- Percentage of Shares (as a % of the Total Share Capital of the Company)	Nil	Nil	Nil
Non - encumbered
- Number of Shares	295485978	295485978	295485978
- Percentage of Shares (as a % of the total shareholding of promoter and promoter group)	100.00	100.00	100.00
- Percentage of Shares (as a % of the total share capital of the company)	36.80	36.80	36.80

	Particulars	Quarter Ended 31.03.2014
B	Investor complaints (Nos.)
	Pending at the beginning of the quarter	Nil
	Received during the quarter	15
	Disposed of during the quarter	15
	Remaining unresolved at the end of the quarter	Nil

Note:

The Company is essentially in the pharmaceutical business segment.

The figures of last quarter are the balancing figures between audited figures in respect of the full financial year and the published year to date figures upto the third quarter of the relevant financial year.

The Directors at their meeting held on May 29, 2014, recommended payment of dividend of Rs. 2 per equity share (face value Rs. 2 per equity share) for the year 2013-2014 amounting to Rs. 1605.800 millions.

In 2003, the Company received notice of demand from the National Pharmaceutical Pricing Authority, Government of India on account of alleged overcharging in respect of certain drugs under the Drug Price Control Order. This was contested before the jurisdictional High Courts in Mumbai, Karnataka and Allahabad wherein it was held in favour of the Company. The orders of Hon'ble High Court of Allahabad and Bombay were challenged before the Hon'ble Supreme Court of India by the Government. Although in the challenge to the decision of the Hon'ble Bombay High Court, the Hon'ble Supreme Court of India restored the matter to the Hon'ble Bombay High Court in August 2003 for interpreting the Drug Policy on the basis of directions and principles laid down by them and the same was pending, in the challenge to the Hon'ble High Court of Allahabad's order, in February 2013, the Hon'ble Supreme Court of India transferred the Bombay High Court petition also before itself for a final hearing on both the matters. In an earlier order, the Hon'ble Supreme Court has already restrained the govt from taking any coercive action against the Company. The Company has been legally advised that on the basis of these orders there is no probability of demand crystallising. Hence no provision is considered necessary in respect of notice of demand received by the company up to date aggregating to Rs. 17685.100 millions.

During the quarter ended March 31, 2014, in accordance with Employee Stock Option Scheme ("ESOS 2013 - A") dated October 31, 2013, the Company has granted 85,194 stock options to employees at an exercise price equal to face value of the equity share. These options would vest not earlier than 1 year and not later than 2 years from the date of grant of options.

The figures of the previous year/period have been regrouped/recast to render them comparable with the figures of the current period.

The above results after being reviewed by the Audit Committee were approved at the meeting of the Board of Directors held on May 29, 2014.

(Rs. In Millions)

Particular	31.03.2014
I.              EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	1605.800
(b) Reserves & Surplus	99310.600
Total Shareholders’ Funds	100916.400
(3) Non-Current Liabilities
(a) long-term borrowings	4.300
(b) Deferred tax liabilities (Net)	3112.000
(c) Other long term liabilities	300.000
(d) long-term provisions	739.900
Total Non-current Liabilities (3)	4156.200
(4) Current Liabilities
(a) Short term borrowings	8769.100
(b) Trade payables	9625.600
(c) Other current liabilities	3332.000
(d) Short-term provisions	2440.700
Total Current Liabilities (4)	24167.400
TOTAL	129240.000
II.          ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	35195.900
(ii) Intangible Assets	46.000
(iii) Capital work-in-progress	3196.400
(iv) Intangible assets under development	570.500
(b) Non-current Investments	33282.800
(d) Long-term Loan and Advances	5353.000
(e) Other Non-current assets	615.700
Total Non-Current Assets	78260.300
(2) Current assets
(a) Current investments	2588.500
(b) Inventories	25111.600
(c) Trade receivables	17281.000
(d) Cash and cash equivalents	460.400
(e) Short-term loans and advances	5155.600
(f) Other current assets	382.600
Total Current Assets	50979.700
TOTAL	129240.000

CONTINGENT LIABILITIES

Particulars	31.03.2013
Claims against the Company not acknowledged as Debt	65.100
Guarantees	27506.600
Letters of Credit	115.900
Refund of Technical Know-how/Fees on account of noncompliance of certain obligations as per respective agreements	25.400
Income Tax	1917.800
Excise Duty/Service Tax	298.500
Sales Tax	39.900

FIXED ASSETS

Ø Freehold Land

Ø Leasehold Land

Ø Buildings and Flats

Ø Plant and Machinery

Ø Furniture and Fixtures

Ø 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. 60.11
UK Pound	1	Rs. 102.32
Euro	1	Rs. 81.75

INFORMATION DETAILS

Information Gathered by :	HTL
Analysis Done by :	SUM
Report Prepared by :	DPH

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	9
--LIQUIDITY	1~10	9
--LEVERAGE	1~10	9
--RESERVES	1~10	8
--CREDIT LINES	1~10	9
--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		77

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.