MIRA INFORM REPORT

Report No. :	321010
Report Date :	05.05.2015

IDENTIFICATION DETAILS

Name :	KEMWELL BIOPHARMA PRIVATE LIMITED
Registered Office :	Kemwell House No. 11, Tumkur Road, Bangalore – 560022, Karnataka
Tel No. :	91-80-39285450
Country :	India
Financials (as on) :	31.03.2014
Date of Incorporation :	07.05.2008
Com. Reg. No.:	08-046341
Capital Investment / Paid-up Capital :	Rs. 1680.000 Million
CIN No.: [Company Identification No.]	U24232KA2008PTC046341
Legal Form :	Private Limited Liability Company
Line of Business :	Provider of contract manufacturing and development services for pharmaceutical products globally.
No. of Employees :	Information Declined By The Management

RATING & COMMENTS

MIRA’s Rating :

B (30)

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

Maximum Credit Limit :	USD 6068000
Status :	Moderate
Payment Behaviour :	Slow But Correct
Litigation :	Clear
Comments :	Subject is an established company having moderate track record. The rating takes into constrained on account of company’s moderate financial risk profile marked by low reserves and loss that company has incurred from its operational activities during 2014. However, trade relations are fair. Business is active. Payments are reported to be slow but correct. The company can be considered for business dealing with some caution.

NOTES:

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

ECGC Country Risk Classification List – December 31, 2014

Country Name	Previous Rating (30.09.2014)	Current Rating (31.12.2014)
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	Term loans = BBB -
Rating Explanation	Moderate degree of safety and moderate credit risk
Date	January, 2014

Rating Agency Name	ICRA
Rating	Fund based facilities = A3
Rating Explanation	Moderate degree of safety and high credit risk
Date	January, 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 DENIED BY

Name :	Mr. Saiyad
Designation :	Accounts Executive
Contact No.:	91-80-39286200
Date :	04.05.2015

LOCATIONS

Registered Office/ Head Quarters :	Kemwell House No. 11, Tumkur Road, Bangalore – 560022, Karnataka, India
Tel. No.:	91-80-39285450
Fax No.:	91-80-39285452
E-Mail :	Chandak.sr@kemwellpharma.com Info.india@kemwellpharma.com
Website :	http://www.kemwellpharma.com
Biokem Site / Factory	34th KM, Tumkur Road, Teppada Begur, Nelamangala Taluk, Bangalore – 562 123, India
Tel. No.:	91-80-39285450
Fax No.:	91-80-39285452
Overseas Office :	Located at : USA Sweden

DIRECTORS

As on: 30.09.2013

Name :	Mr. Anurag Bagaria
Designation :	Managing Director
Address :	157A, RMV Extension, 8^th B Main Road, Bangalore – 560080, Karnataka, India India
Date of Birth/Age :	02.11.1976
Date of Appointment :	07.05.2008
DIN :	00111917
Name :	Mr. Shriram Chandak
Designation :	Director
Address :	Ramasadan, 758/21, 7^th Main, Mahalaxmi Layout, Bangalore – 560086, Karnataka, India India
Date of Birth/Age :	02.03.1948
Date of Appointment :	08.03.2010
DIN :	00130919
Name :	Mr. Rolf Guenter Werner
Designation :	Director
Address :	Hugo Haring Strasse 72, Biberach An Der Riss, Baden Wurttemberg, 88400
Date of Birth/Age :	07.06.1946
Date of Appointment :	08.03.2011
DIN :	03468202
Name :	Mr. Per Ake Oldentoft
Designation :	Director
Address :	Fagelsangsvagen 10, 247 31 S Sandby, Sandby 000000
Date of Birth/Age :	11.02.1942
Date of Appointment :	08.03.2011
DIN :	01001029

KEY EXECUTIVES

Name :	Mr. Saiyad
Designation :	Accounts Executive

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on: 30.09.2013

Names of Shareholders	No. of Shares
Kum Kum Bagaria on behalf of Subhash Family Trust	1433448
Kum Kum Bagaria	1301040
Anurag Bagaria	1646040
Karan Bagaria	1928472
Neha Bagaria	281400
Kum Kum Bagaria on behalf of Subhash Bagaria Estate	1478400
Kum Kum Bagaria on behalf of Savitri devi Agrawal Estate	91200
Total	8160000

Equity Share Break up (Percentage of Total Equity)

As on: 30.09.2013

Category	Percentage
Directors or relatives of directors	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Provider of contract manufacturing and development services for pharmaceutical products globally.

Products :

Products Description	ITC Code No.
Drugs and Medicines	98041000

Brand Names :

Not Available

Agencies Held :

Not Available

Exports :

Not Divulged

Imports :

Not Divulged

Terms :

Not Divulged

GENERAL INFORMATION

Suppliers :

Reference :	Not Divulged
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 :	Not Divulged
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 :

Information Declined By The Management

Bankers :

• State Bank of India, Specialised Mid Corporate Branch, No. 97, Railway Parallel Road, Kumarapark West, Bangalore - 560020, Karnataka, India
• CITI Bank, 506-507, Level – 5, Prestige Meridian 2, No. 30, M. G. Road, Bangalore – 560001, Karnataka, India
• ICICI Bank

Facilities :

Secured Loan	As on 31.03.2014	As on 31.03.2013
	(Rs. In Million)
LONG TERM BORROWINGS:
Foreign currency term loan from banks	1531.366	1672.357
SHORT TERM BORROWINGS:
Rupee term loan from banks	292.279	235.956
Loans repayable on demand from banks	310.084	225.673
Total	2133.729	2133.986

Auditors :
Name :	B S R R and Company Chartered Accountants
Address :	Maruthi Info-Tech Centre, 11-12/1, Inner Ring Road, Koramangala, Bangalore, Karnataka, India
PAN No.:	AAKFB1884H
Subsidiary Companies :	Kemfin Holdings Private Limited – Cyprus Kemwell AB – Sweden Kemwell lBiopharma Incorporation, USA
Other Related Parties :	Boiworth India Private Limited Fastspeed Vanijya private Limited Chemsworth Private Limited Max Medisupport Private Limited Kemwell Private Limited Kemfin Services Private Limited Northeast Gases Private Limited Shadow Box Realty Private Limited Kemfin Services Private Limited Paradise blooms Neelammegha Investment and Trading Company Private Limited Oldentoft Holding AB

CAPITAL STRUCTURE

After 29.09.2014

Authorised Capital : Rs. 1800.000 Million

Issued, Subscribed & Paid-up Capital : Rs. 1727.500 Million

As on: 30.09.2013

Authorized Capital:

No. of Shares	Type	Value	Amount
20000000	Equity Shares	Rs.10/- each	Rs. 200.000 Million
12000000	Preference Shares	Rs.100/- each	Rs. 1200.000 Million
	Total		Rs. 1400.000 Million

Issued, Subscribed & Paid-up Capital:

No. of Shares	Type	Value	Amount
8160000	Equity Shares	Rs.10/- each	Rs. 81.600 Million
11500000	Preference Shares	Rs.100/- each	Rs. 1150.000 Million
	Total		Rs. 1231.600 Million

As on: 31.03.2014

Authorized Capital:

No. of Shares	Type	Value	Amount
20000000	Equity Shares	Rs.10/- each	Rs.200.000 Million
16000000	Preference Shares	Rs.100/- each	Rs. 1600.000 Million
	Total		Rs. 1800.000 Million

Issued, Subscribed & Paid-up Capital:

No. of Shares	Type	Value	Amount
9500000	Equity Shares	Rs.10/- each	Rs. 95.000 Million
15850000	Preference Shares	Rs.100/- each	Rs. 1585.000 Million
	Total		Rs. 1680.000 Million

FINANCIAL DATA

[All figures are in Rupees Million]

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	1680.000	1231.600	831.600
(b) Reserves & Surplus	443.972	461.537	321.035
(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)	2123.972	1693.137	1152.635
(3) Non-Current Liabilities
(a) long-term borrowings	2031.366	2172.357	1738.879
(b) Deferred tax liabilities (Net)	0.000	0.000	99.527
(c) Other long term liabilities	0.000	0.000	0.000
(d) long-term provisions	29.519	27.380	18.889
Total Non-current Liabilities (3)	2060.885	2199.737	1857.295
(4) Current Liabilities
(a) Short term borrowings	704.107	490.413	394.218
(b) Trade payables	211.591	203.206	134.958
(c) Other current liabilities	598.036	331.585	291.815
(d) Short-term provisions	37.475	31.091	20.717
Total Current Liabilities (4)	1551.209	1056.295	841.708
TOTAL	5736.066	4949.169	3851.638
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	4435.343	1636.506	1529.303
(ii) Intangible Assets	8.156	4.397	5.301
(iii) Capital work-in-progress	78.517	2265.600	1416.214
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	52.320	52.320	52.320
(c) Deferred tax assets (net)	0.000	0.000	0.000
(d) Long-term Loan and Advances	271.470	199.904	334.193
(e) Other Non-current assets	0.000	0.000	0.000
Total Non-Current Assets	4845.806	4158.727	3337.331
(2) Current assets
(a) Current investments	0.000	0.000	0.000
(b) Inventories	375.699	198.553	94.225
(c) Trade receivables	265.028	218.696	186.238
(d) Cash and cash equivalents	14.780	189.489	64.381
(e) Short-term loans and advances	61.370	106.438	159.309
(f) Other current assets	173.383	77.266	10.154
Total Current Assets	890.260	790.442	514.307
TOTAL	5736.066	4949.169	3851.638

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2014	31.03.2013	31.03.2012
	SALES
		Income	NA	NA	NA
		Other Income	NA	NA	NA
		TOTAL	NA	NA	NA
Less	EXPENSES		NA	NA	NA
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION		11.450	20.301	28.531
Less	FINANCIAL EXPENSES		7.557	4.706	3.842
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION		3.893	15.595	24.689
Less/ Add	DEPRECIATION/ AMORTISATION		13.153	11.498	8.246
	PROFIT BEFORE TAX		(9.260)	4.097	16.443
Less	TAX		0.000	(9.953)	5.374
	PROFIT AFTER TAX		(9.260)	14.050	11.069
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		37.824	23.774	12.705
	BALANCE CARRIED TO THE B/S		28.564	37.824	23.774
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	513.390	518.837	540.440
	TOTAL EARNINGS		513.390	518.837	540.440
	IMPORTS
		Raw Materials	154.120	143.210	57.289
		Stores & Spares	4.838	9.160	4.562
		Capital Goods	68.406	124.966	393.218
	TOTAL IMPORTS		227.364	277.336	455.069
	Earnings Per Share (Rs.)		(0.97)	1.48	1.17

KEY RATIOS

PARTICULARS		31.03.2014	31.03.2013	31.03.2012
Operating Profit Margin (PBDIT / Sales)	(%)	(80.87)	20.18	57.63
Return on Total Assets (PBT/Total Assets}	(%)	(0.17)	0.16	0.69
Return on Investment (ROI) (PBT/Networth)		0.00	0.00	0.01
Debt Equity Ratio (Total Debt/Networth)		1.29	1.57	1.85
Current Ratio (Current Asset/Current Liability)		0.57	0.75	0.61

FINANCIAL ANALYSIS

[All figures are in Rupees Million]

DEBT EQUITY RATIO

Particular	31.03.2012	31.03.2013	31.03.2014
	(Rs. In Million)	(Rs. In Million)	(Rs. In Million)
Share Capital	831.600	1231.600	1680.000
Reserves & Surplus	321.035	461.537	443.972
Net worth	1152.635	1693.137	2123.972
long-term borrowings	1738.879	2172.357	2031.366
Short term borrowings	394.218	490.413	704.107
Total borrowings	2133.097	2662.770	2735.473
Debt/Equity ratio	1.851	1.573	1.288

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	No
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	--
23]	Banking Details	Yes
24]	Banking facility details	Yes
25]	Conduct of the banking account	--
26]	Buyer visit details	--
27]	Financials, if provided	Yes
28]	Incorporation details, if applicable	Yes
29]	Last accounts filed at ROC	Yes
30]	Major Shareholders, if available	Yes
31]	Date of Birth of Proprietor/Partner/Director, if available	Yes
32]	PAN of Proprietor/Partner/Director, if available	No
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	Yes

UNSECURED LOAN

Particulars	As on 31.03.2014	As on 31.03.2013
	(Rs. In Million)
LONG TERM BORROWINGS:
Loans and advances from others	500.000	500.000
SHORT TERM BORROWINGS:
Loans and advances from others	101.744	28.784
Total	601.744	528.784

INDEX OF CHARGES:

S.No.	Charge ID	Date of Charge Creation/Modification	Charge amount secured	Charge Holder	Address	Service Request Number (SRN)
1	10350540	31/03/2012	47,500,000.00	CITI BANK N.A.	506-507, LEVEL -5, PRESTIGE MERIDIAN 2,, NO.30, M .G. ROAD,, BANGALORE, KARNATAKA - 560001, INDIA	B37828928
2	10302908	07/11/2013 *	2,200,700,000.00	STATE BANK OF INDIA	SPECIALISED MID CORPORATE BRANCH, NO.97, RAILWAY  PARALLEL ROAD, KUMARAPARK WEST, BANGALORE, KARNATAKA - 560020, INDIA	B90806043
3	10292583	17/05/2011	252,900,000.00	STATE BANK OF INDIA	SPECIALISED MID CORPORATE BRANCH, NO. 97, RAILWAY  PARALLEL ROAD, KUMARAPARK WEST, BANGALORE, KARNATAKA - 560020, INDIA	B15139215

REVIEW OF PERFORMANCE:

The total Income during the year was Rs.1.45 billion compared to Rs 1.46 billion in the previous year. Loss before taxation was Rs.92.60 million as compared to Profit of Rs 40.97 million last fiscal year. The net Loss after taxation was Rs.92.60 million compared to Profit of Rs. 140.50 million including deferred tax credit of Rs. 99.53 million during last fiscal year. The main reason of loss during the year was due to non-receipt of dividend from subsidiary and higher expenses on account of Depreciation, Finance Costs and Employee benefits.

The Liquids facility experienced teething troubles and the full commercialization got delayed significantly. Though most of the technology transfers went of smoothly, they faced challenges with regard to a few products. Being a new plant with a fairly high level of automation, it took longer than planned for the people to come to terms, which affected deliveries to some customers and in turn affected their financials also. From April 2014 onwards, production has been around 12.5 million bottles per month. They are putting in all efforts to significantly increase the average volumes to around 16.0 million bottles per month.

Their Export Oriented Unit for oral solids is on track and is on course to cross production of 600 million tablets in 2014-15. During the year they signed a contract to supply about 500 million tablets to the domestic market and completed the technology transfer for the same in 2013-14.

The unit was successfully audited by the European Regulatory (EMA), INVIMA (Columbian Regulatory) and approved. During the year they also signed a supply agreement with a European MNC for servicing the Asian market. At full potential the volumes are expected to be around 500 million tablets, although it will take couple of years to attain that. They completed technology transfer of the products and the customer is in progress of regulatory filings. With the same customer, they are discussing volume of around 1 – 1.5 billion tablets per annum.

The semi solids unit performance has been a major area of concern driven by the high complexity of the products being manufactured in this plant. They brought on a board a production manager with six sigma lean management experience. He begun looking at the operations in this plant in a critical manner and they should see results in 6 months

The Pharmaceutical Research and Development Unit (PDU) continued to show healthy growth. They are executing a cost plus contract with a major API supplier, for development of oral solids for the US Market. They also signed an Analytical FTE contract with a Pharma MNC. Also, the enduring relationship with in the Oral care space is continuing at good pace.

Biopharmaceuticals plant with technical know-how collaboration with Boehringer Ingelheim, Germany was commissioned during the year.

FIXED ASSETS:

· Plant and Machinery

· Tools and Dies

· Furniture and Fixtures

· Computer and Peripherals

· Air, Water and Environmental Equipments

· Electrical Installations

· Storage and Handling Equipments

· Laboratory Equipments

· Research and Development

· Office Equipments

· Vehicles

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgment 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.63.58
UK Pound	1	Rs.97.99
Euro	1	Rs.70.53

INFORMATION DETAILS

Information Gathered by :	RKH
Analysis Done by :	KAR
Report Prepared by :	ART

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	4
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	4
--PROFITABILITY	1~10	--
--LIQUIDITY	1~10	4
--LEVERAGE	1~10	4
--RESERVES	1~10	3
--CREDIT LINES	1~10	3
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		30

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.