MIRA INFORM REPORT

Report No. :	324859
Report Date :	29.05.2015

IDENTIFICATION DETAILS

Name :	NEULAND LABORATORIES LIMITED
Registered Office :	Sanali Info Park, ‘A’ Block, Ground Floor, 8-2-120/113, Road No. 2, Banjara Hills, Hyderabad – 500034, Telangana
Tel. No.:	91-40-30211600/ 23551081
Country :	India
Financials (as on) :	31.03.2015
Date of Incorporation :	07.01.1984
Com. Reg. No.:	01-004393
Capital Investment / Paid-up Capital :	Rs. 89.539 Million
CIN No.: [Company Identification No.]	L85195TG1984PLC004393
IEC No.:	0988005077
TAN No.: [Tax Deduction & Collection Account No.]	HYDN00013G HYDN00131F
PAN No.: [Permanent Account No.]	AAACN9531E
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Manufacturer, Exporter and Importer of Bulk Drugs.
No. of Employees :	Information declined by the management

RATING & COMMENTS

MIRA’s Rating :

Ba (42)

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

Maximum Credit Limit :	USD 4600000
Status :	Satisfactory
Payment Behaviour :	Usually correct
Litigation :	Exist
Comments :	Subject is an established company having satisfactory track record. There seems some dip in the profits of the company during FY 2015 however, reserves position of the company is healthy.General financial position of the company is normal and acceptable for business dealing. Trade relations are reported as fair. Business is active. Payment terms are reported to be usually correct. The company can be considered normal for business dealings at usual trade terms and conditions.

NOTES :

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

ECGC Country Risk Classification List – March 31, 2015

Country Name	Previous Rating (31.12.2014)	Current Rating (31.03.2015)
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	CARE
Rating	Long-term Bank Facilities BBB-
Rating Explanation	Moderate degree of safety and carry moderate credit risk.
Date	July 04, 2014

Rating Agency Name	CARE
Rating	Short-term Bank Facilities A3
Rating Explanation	Moderate degree of safety and carry higher credit risk.
Date	July 04, 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 DECLINED

Management non cooperative (91-40-30211600)

LOCATIONS

Registered Office / Corporate Office :	Sanali Info Park, ‘A’ Block, Ground Floor, 8-2-120/113, Road No. 2, Banjara Hills, Hyderabad – 500034, Telangana, India
Tel. No.:	91-40-30211600/ 23551081
Fax No.:	91-40-30211602
E-Mail :	gjagadeesam@neuladlabs.com gvbharadwaj@neulanlabs.com swamyachanta@neulandlabs.com neuland@hd1.vsnl.net.in neuland@eth.net neuland@neulandlabs.com saradab@neulandlabs.com gsnrao@neulandlabs.com
Website :	www.neulandindia.com
Area :	6000 Sq.ft.
Location :	Rented
Manufacturing Facilities :	Unit 1: Village: Bonthapally Mandal: Jinnaram District: Medak, Andhra Pradesh India Unit 2 IDA, Pashamylaram, Isnapur, Patancheru (M) Medak, Dist – 502319, Andhra Pradesh, India Unit 3 Plot No. 92-94, 257-259 Industrial Development Area, Village: Pashamylaram, Mandal: Patancheru, District: Medak, Andhra Pradesh, India
Overseas Office :	US Office 2500, Regency Parkway, Cary, NC 27511. Tel No: +1 (919) 654 6833 Fax No: +1 (919) 654 6834 E-Mail: johnpinna@neulandabs.com martinfrazier@neulandlabs.com Japan Office 2F Maruishi Building Bekkan (Annex), 1-10-1 Kajicho, Chiyoda-ku, Tokyo Tel No: 81-3-3526-5171 Fax No: 81-3-3526-5172 E-Mail: ykizawa@neulandlabs.com
Research and Development:	Bonthapalli (V), Veerabhadraswamy Temple Road, Jinnaram (M), Medak, District – 502313, Andhra Pradesh, India

DIRECTORS

As on 31.03.2014

Name :	Dr. Davuluri Rama Mohan Rao
Designation :	Chairman and Managing Director
Date of Birth/ Age :	69 Years
Qualification :	Masters in Science from Andhra University, Post Graduate Diploma in Technology from IIT Kharagpur and a PhD in Organic Chemistry from the University of Notre Dame
Expertise in specific functional areas :	General Management
Date of Appointment :	07.01.1984
Name :	Mr. Davuluri Sucheth Rao
Designation :	Whole-time Director and Chief Executive Officer
Qualification :	Mechanical Engineer by profession and has a MBA in Corporate Finance and Operations Management from University of Notre Dame, USA
Name :	Mr. Davuluri Saharsh Rao
Designation :	Whole-time Director and President-Contract Research
Qualification :	Engineering Graduate and obtained his Masters in MIS from Weatherhhead School of Management, Cleveland, Ohio, USA.
Name :	Mr. G. V. K. Rama Rao
Designation :	Non-Executive Director
Date of Birth/ Age :	82 Years
Qualification :	LLB
Expertise in specific functional areas :	Civil Litigation
Date of Appointment :	07.01.1984
Name :	Mr. Humayun Dhanrajgir
Designation :	Independent Director
Date of Birth/ Age :	77 Years
Qualification :	Tech, MI, CHEM (E)
Expertise in specific functional areas :	General Management and Pharmaceutical industry
Date of Appointment :	23.08.1994
Name :	Mr. Shashi Bhushan Budhiraja*
Designation :	Independent
Qualification :	B. Tech
Name :	Mr. Parampally Vasudeva Maiya
Designation :	Independent Director
Date of Birth/ Age :	75 Years
Qualification :	Master of Arts
Expertise in specific functional areas :	General Management and Finance
Date of Appointment :	24.07.1999
Name :	Dr. William Gordon Mitchell
Designation :	Independent Director
Date of Birth/ Age :	61 Years
Qualification :	PhD from the School of Business Administration of the University of California, Berkeley
Expertise in specific functional areas :	Corporate Strategy and International Business
Date of Appointment :	23.05.2008
Name :	Dr. Christopher M. Cimarusti
Designation :	Non-Executive Director
Qualification :	PhD in Organic Chemistry
Name :	Mr. Nadeem Askari Panjetan
Designation :	Nominee Director
Qualification :	Commerce Graduate and has completed his Post-Graduation in Master of Arts.
Name :	Mrs. Bharati Rao #
Designation :	Independent Director
Date of Birth/ Age :	65
Qualification :	M.A[Econ], CAIIB
Expertise in specific functional areas :	General management and Finance
Date of Appointment :	09.05.2014

NOTE

# Appointed as a Director w.e.f. from May 9, 2014

* Ceased to be a Director w.e.f. from May 9, 2014

KEY EXECUTIVES

Name :	Mr. N.S. Viswanathan
Designation :	Chief Financial Officer
Name :	Ms. Sarada Bhamidipati
Designation :	Company Secretary and Compliance officer
Name :	Mr. Satyanarayan Rao
Designation :	Senior Manager Accounts
AUDIT COMMITTEE :	· Mr. Parampally Vasudeva Maiya · Mr. Humayun Dhanrajgir · Mr. Shashi Bhushan Budhiraja* · Mr. Nadeem Panjetan · Mr. D. Sucheth Rao · Mrs. Bharati Rao# # Appointed w.e.f. from May 9, 2014 * Ceased to be a Member w.e.f. from May 9, 2014
NOMINATION AND REMUNERATION COMMITTEE :	Mr. Parampally Vasudeva Maiya Mr. Humayun Dhanrajgir Mr. Shashi Bhushan Budhiraja* Mrs. Bharati Rao# # Appointed w.e.f. from May 9, 2014 * Ceased to be a Member w.e.f. from May 9, 2014
STAKEHOLDERS RELATIONSHIP COMMITTEE :	· Mr. Parampally Vasudeva Maiya · Dr. Davuluri Rama Mohan Rao · Mr. D. Sucheth Rao

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 31.03.2015

Names of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	4819	0.05
Bodies Corporate	4590608	51.68
Sub Total	4595427	51.73
(2) Foreign
Individuals (Non-Residents Individuals / Foreign Individuals)	200	0.00
Sub Total	200	0.00
Total shareholding of Promoter and Promoter Group (A)	4595627	51.73
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	88685	1.00
Financial Institutions / Banks	2698	0.03
Foreign Institutional Investors	132996	1.50
Sub Total	224379	2.53
(2) Non-Institutions
Bodies Corporate	529869	5.96
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 Million	1754035	19.75
Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	953373	10.73
Any Others (Specify)	825971	9.30
Clearing Members	40801	0.46
Foreign Corporate Bodies	600000	6.75
Non Resident Indians	185170	2.08
Sub Total	4063248	45.74
Total Public shareholding (B)	4287627	48.27
Total (A)+(B)	8883254	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	0	0.00
Sub Total	0	0.00
Total (A)+(B)+(C)	8883254	0.00

BUSINESS DETAILS

Line of Business :	Manufacturing and Selling of Bulk Drugs.
Products :	Not Available
Brand Names :	Not Available
Agencies Held :	Not Available
Exports :	Not Divulged
Imports :	Not Divulged
Terms :
Selling :	Not Divulged
Purchasing :	Not Divulged

PRODUCTION STATUS NOT AVAILABLE

GENERAL INFORMATION

Suppliers :

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

Customers :

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

No. of Employees :

Information declined by the management

Bankers :

· Export Import Bank of India, Khairatabad, Hyderabad, Andhra Pradesh, India

· State Bank of India, Overseas Branch, Jubilee Hills, Hyderabad, Andhra Pradesh, India

· Bank Of India, Mid Corporate Branch, Hyderabad, Andhra Pradesh, India

· Indian Overseas Bank, Basheerbagh Branch, Hyderabad, Andhra Pradesh, India

· SBI Global Factors Limited, Mumbai, Maharashtra, India

· Consortium Bank

Facilities :

Fund and Non-Fund based Limits : Rs. 1874.000 Million (From Consortium Bank)

SECURED LOANS	31.03.2015 (Rs. In Million)	31.03.2014 (Rs. In Million)
LONG TERM BORROWINGS
Term loans from banks
Rupee loans	NA	87.719
Other loans
Hire purchase loans	NA	0.981
SHORT TERM BORROWINGS
Working capital finance from banks	NA	1365.995
Working capital finance from non-banking financial company	NA	0.167
Total	NA	1454.862

Banking Relations :	--
Statutory Auditors :
Name :	K. S. Aiyar and Company Chartered Accountants
Address :	No. F-7 Laxmi Mills, Shakti Mills Lane, (Off Dr. E. Moses Road), Mahalaxmi, Mumbai - 400011, Maharashtra, India
Internal Auditors :
Name :	Ernst and Young LLP Chartered Accountants
Address :	7th Floor, Block III, The Oval Office, 18 I-Labs Center, Madhapur, Hyderabad – 500081, Andhra Pradesh, India
Holding Company w.e.f. December 5, 2012 and Enterprise owned or significantly influenced by Key Management Personnel till such date: (As on 31.03.2014)	Neuland Health Sciences Private Limited
Fellow Subsidiary : (As on 31.03.2014)	Neuland Pharma Research Private Limited
Wholly Owned Subsidiary : (As on 31.03.2014)	· Neuland Laboratories Inc., USA · Neuland Laboratories K.K., Japan
Partly Owned Subsidiary : (As on 31.03.2014)	CATO Research Neuland (India) Private Limited

CAPITAL STRUCTURE

As on 31.03.2015

Authorised Capital : Not Available

Issued, Subscribed & Paid-up Capital : Rs.89.539 Million

As on 24.06.2014

Authorised Capital : Rs.160.000 Million

Issued, Subscribed & Paid-up Capital : Rs.88.832 Million

As on 31.03.2014

Authorised Capital :

No. of Shares	Type	Value	Amount
10000000	Equity Shares	Rs.10/- each	Rs.100.00 Million
300000	Cumulative Redeemable Preference Shares	Rs.100/- each	Rs.30.00 Million
300000	Cumulative or Non-cumulative and Redeemable Preference Shares	Rs.100/- each	Rs.30.00 Million
	Total		Rs. 160.000 Million

Issued, Capital :

No. of Shares	Type	Value	Amount
7849223	Equity Shares	Rs.10/- each	Rs. 78.492 Million

Subscribed Capital :

No. of Shares	Type	Value	Amount
7758954	Equity Shares	Rs.10/- each	Rs. 77.590 Million

Paid-up Capital :

No. of Shares	Type	Value	Amount
7655678	Equity Shares	Rs.10/- each	Rs.76.557 Million
	Add: Forfeited Shares		Rs.0.706 Million
	Total		Rs. 77.263 Million

NOTE

a. Reconciliation of number of equity shares outstanding at the beginning and at the end of the year

Particulars	As on March 31, 2014
Number of equity shares outstanding at the beginning of the year	7644978
Add: Issued during the year (Refer Note 3(b))	10700
Number of equity shares outstanding at the end of the year	7655678

b. (i) During the current year, the Company had on January 21, 2014, issued and allotted 10,700 fully paid up equity shares of a face value of Rs. 10 each, to eligible employees pursuant to exercise of stock options granted under Employee Stock Option Scheme, 2008.

(ii) During the previous year, the Company had on April 27, 2012, allotted 22,48,523 equity shares of a face value

of Rs. 10 each for cash at a price of Rs. 45 per equity share, including a Share Premium of Rs. 35 per equity share, aggregating to Rs. 101.184 Million to the existing equity shareholders of the Company on a rights basis in the ratio of 5 shares for every 12 shares held. Expenses incurred by the Company in relation to Rights Issue activity aggregating to Rs. 5.808 Million were adjusted to the securities premium account.

c. During the year, the Board of Directors of the Company at its meeting held on February 5, 2014 approved the issue of Equity Shares on rights basis up to Rs. 250.000 Million and the Company has filed the Draft Letter of Offer dated March 26, 2014 with the Securities and Exchange Board of India (SEBI) on March 27, 2014. Subsequently, the Company had received in-principle approval from The National Stock Exchange of India Ltd. and BSE Ltd. in respect of the proposed Rights Issue of the Company.

Proceeds of the proposed Rights issue will be utilized (i) to meet incremental working capital requirement, and (ii)

to meet issue expenses.

The Company has incurred expenses aggregating Rs. 0.636 Million in relation to the proposed Rights Issue which have been disclosed as “Rights Issue Expenses” under “Other Assets”. These expenses will be charged to the securities premium account proposed to be received from the Rights Issue of the equity shares of the Company.

d. Terms / Rights attached to equity shares

The Company has only one class of equity shares having par value of Rs.10 per share. Each shareholder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to prior consent from the Banks and approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of the 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.

e. Details of Shareholders holding more than 5% shares in the Company

Name of the Share holder	As on March 31, 2014
	No. Of shares	% Of holding
Equity Shares of Rs. 10 each fully paid up
1 Neuland Health Sciences Private Limited	38,31,679	50.05
2 Unipharm Limited	6,00,000	7.84

f. Employee Stock Option Scheme – 2008

Pursuant to the resolution passed by the Board of directors on July 20, 2007 and members of the Company at the

Annual General Meeting held on July 20, 2007, the Company had introduced Employee Stock Option Scheme (“the scheme”) for permanent employees and directors of the Company and of its subsidiaries, as may be decided by the Compensation Committee/Board. The scheme provides that the total number of options granted there under will be not more than 3% of the paid up capital. Each option, on exercise, is convertible into one equity share of the Company having face value of Rs. 10. Pursuant to a resolution passed by the Remuneration and Compensation Committee vide Circular Resolution dated November 17, 2008, 34,500 options have been granted at an exercise price of Rs. 104, which is the market price as on the date of the grant. Accordingly, the Company has not recognized any expense on account of grant of stock options.

Stock options activity under the scheme is as follows:

Description	For the Year ended March 31, 2014
Option Outstanding at the beginning of the year	19,000
Options Granted	--
Options Exercised	10,700
Options Lapsed	1,000
Options Outstanding at the year end	7,300

Pursuant to the Rights Issue during the previous year, the Company revised the exercise price of each stock option to Rs. 95.34 from Rs. 104.00 (pre-rights) under the existing scheme.

FINANCIAL DATA

[all figures are in Rupees Million]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2015	31.03.2014	31.03.2013
I. EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	89.539	77.263	77.156
(b) Reserves & Surplus	1508.714	1148.719	908.675
(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)	1598.253	1225.982	985.831
(3) Non-Current Liabilities
(a) long-term borrowings	332.215	338.700	511.103
(b) Deferred tax liabilities (Net)	122.455	102.635	27.074
(c) Other long term liabilities	27.300	29.300	33.300
(d) long-term provisions	63.848	51.388	47.050
Total Non-current Liabilities (3)	545.818	522.023	618.527
(4) Current Liabilities
(a) Short term borrowings	1457.981	1396.162	1324.657
(b) Trade payables	1139.660	796.081	814.867
(c) Other current liabilities	309.549	590.791	426.241
(d) Short-term provisions	60.431	153.711	76.519
Total Current Liabilities (4)	2967.621	2936.745	2642.284
TOTAL	5111.692	4684.750	4246.642
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	1645.428	1302.879	1351.308
(ii) Intangible Assets	0.000	5.656	3.926
(iii) Capital work-in-progress	0.000	345.616	356.888
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	76.680	76.441	76.408
(c) Deferred tax assets (net)	0.000	0.000	0.000
(d) Long-term Loan and Advances	238.291	213.788	111.573
(e) Other Non-current assets	0.000	74.571	80.944
Total Non-Current Assets	1960.399	2018.951	1981.047
(2) Current assets
(a) Current investments	0.000	0.000	0.000
(b) Inventories	1134.040	934.174	921.685
(c) Trade receivables	1288.483	1165.932	984.950
(d) Cash and cash equivalents	64.866	2.886	2.847
(e) Short-term loans and advances	488.664	350.421	257.981
(f) Other current assets	175.240	212.386	98.132
Total Current Assets	3151.293	2665.799	2265.595
TOTAL	5111.692	4684.750	4246.642

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2015	31.03.2014	31.03.2013
	SALES
		Income	4450.638	4656.933	4605.865
		Other Income	248.684	34.148	33.188
		TOTAL (A)	4699.322	4691.081	4639.053
Less	EXPENSES
		Cost of Raw Materials Consumed	2664.178	2464.422	2726.062
		(Increase) / Decrease in Inventories of Work in Process and Finished Goods	(224.289)	1.280	(34.496)
		Employee Benefits Expense	489.661	362.551	348.827
		Manufacturing Expenses	556.322	484.224	458.440
		Other Expenses	541.995	650.606	525.736
		TOTAL (B)	4027.867	3963.083	4024.569
	PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		671.455	727.998	614.484
Less	FINANCIAL EXPENSES (D)		273.486	236.376	313.300
	PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		397.969	491.622	301.184
Less/ Add	DEPRECIATION/ AMORTISATION (F)		153.198	149.386	146.229
	PROFIT/ (LOSS) BEFORE TAX (E-F) (G)		244.771	342.236	154.955
Less	TAX (H)		86.958	75.561	18.555
	PROFIT/ (LOSS) AFTER TAX (G-H) (I)		157.813	266.675	136.400
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		432.596	219.282	82.162
Add	ADJUSTMENTS TO OPENING RESERVES		NA	0.000	14.791
Less	APPROPRIATIONS
		Proposed Equity Dividend	NA	22.967	9.174
		Tax on Proposed Equity Dividend	NA	3.726	1.488
		Transfer to General Reserve	NA	26.668	3.409
	BALANCE CARRIED TO THE B/S		NA	432.596	219.282
	EARNINGS IN FOREIGN CURRENCY
		Export of Goods on FOB basis	NA	3193.308	3331.435
	TOTAL EARNINGS		NA	3193.308	3331.435
	IMPORTS
		Raw Materials	NA	1096.403	1148.950
		Capital Goods	NA	0.000	0.000
	TOTAL IMPORTS		NA	1096.403	1148.950
	Earnings / (Loss) Per Share (Rs.)
	Basic		18.47	34.87	17.84
	Diluted		18.47	34.86	17.82

CURRENT MATURITIES OF LONG TERM DEBT DETAILS

Particulars	31.03.2015	31.03.2014	31.03.2013
Current Maturities of Long term debt	NA	166.105	269.031
Cash generated from operations	NA	NA	NA

KEY RATIOS

PARTICULARS		31.03.2015	31.03.2014	31.03.2013
Net Profit Margin (PAT / Sales)	(%)	3.55	5.73	2.96
Operating Profit Margin (PBIDT/Sales)	(%)	15.09	7.35	3.36
Return on Total Assets (PBT/Total Assets}	(%)	4.86	8.03	4.06
Return on Investment (ROI) (PBT/Networth)		0.15	0.28	0.16
Debt Equity Ratio (Total Debt/Networth)		1.12	1.42	1.86
Current Ratio (Current Asset/Current Liability)		1.06	0.91	0.86

FINANCIAL ANALYSIS

[all figures are in Rupees Million]

DEBT EQUITY RATIO

Particular	31.03.2013	31.03.2014	31.03.2015
	(Rs. In Million)	(Rs. In Million)	(Rs. In Million)
Share Capital	77.156	77.263	89.539
Reserves & Surplus	908.675	1148.719	1508.714
Net worth	985.831	1225.982	1598.253
long-term borrowings	511.103	338.700	332.215
Short term borrowings	1324.657	1396.162	1457.981
Total borrowings	1835.760	1734.862	1790.196
Debt/Equity ratio	1.862	1.415	1.120

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.03.2013	31.03.2014	31.03.2015
	(Rs. In Million)	(Rs. In Million)	(Rs. In Million)
Sales	4605.865	4656.933	4450.638
		1.109	(4.430)

NET PROFIT MARGIN

Net Profit Margin	31.03.2013	31.03.2014	31.03.2015
	(Rs. In Million)	(Rs. In Million)	(Rs. In Million)
Sales	4605.865	4656.933	4450.638
Profit	136.400	266.675	157.813
	2.96%	5.73%	3.55%

LOCAL AGENCY FURTHER INFORMATION

Sr. No.	Check List by Info Agents	Available in Report (Yes / No)
1]	Year of establishment	Yes
2]	Constitution of the entity -Incorporation details	Yes
3]	Locality of the entity	Yes
4]	Premises details	No
5]	Buyer visit details	--
6]	Contact numbers	Yes
7]	Name of the person contacted	No
8]	Designation of contact person	No
9]	Promoter’s background	Yes
10]	Date of Birth of Proprietor / Partners / Directors	Yes
11]	Pan Card No. of Proprietor / Partners	No
12]	Voter Id Card No. of Proprietor / Partners	No
13]	Type of business	Yes
14]	Line of Business	Yes
15]	Export/import details (if applicable)	No
16]	No. of employees	No
17]	Details of sister concerns	Yes
18]	Major suppliers	No
19]	Major customers	No
20]	Banking Details	Yes
21]	Banking facility details	Yes
22]	Conduct of the banking account	--
23]	Financials, if provided	Yes
24]	Capital in the business	Yes
25]	Last accounts filed at ROC, if applicable	Yes
26]	Turnover of firm for last three years	Yes
27]	Reasons for variation <> 20%	--
28]	Estimation for coming financial year	No
29]	Profitability for last three years	Yes
30]	Major shareholders, if available	Yes
31]	External Agency Rating, if available	Yes
32]	Litigations that the firm/promoter involved in	--
33]	Market information	--
34]	Payments terms	No
35]	Negative Reporting by Auditors in the Annual Report	No

LITIGATION DETAILS

ITTA 89 / 2012

ITTASR 3200 / 2008

CASE IS:PENDING

PETITIONER		RESPONDENT
THE COMMISSIONER OF INCOME TAX-IV	VS	NEULAND LABORATORIES LTD.,
PET.ADV. : PRASAD (SC FOR INCOME TAX)		RESP.ADV. : VIVEK REDDY
SUBJECT: U/Sec. 143 Assessment		DISTRICT:  HYDERABAD

FILING DATE:  22-10-2008	POSTING STAGE :  FOR ADMISSION
REG. DATE    :   18-02-2012	LISTING DATE :  20-06-2012	STATUS   :  ADMIT

HON'BLE JUDGE(S):

GODA RAGHURAM

N.RAVI SHANKAR

INDEX OF CHARGES

S.No.	Charge ID	Date of Charge Creation/Modification	Charge amount secured	Charge Holder	Address	Service Request Number (SRN)
1	10528730	29/10/2014	200,000,000.00	THE RATNAKAR BANK LIMITED	SHAHUPURI,KOLHAPUR, KOLHAPUR, Maharashtra - 416001, INDIA	C32009565
2	10529935	23/09/2014	150,000,000.00	KOTAK MAHINDRA BANK LIMITED	27BKC, C 27, G Block, Bandra Kurla Complex, Bandra (E), Mumbai, Maharashtra - 400051, INDIA	C32801011
3	10507513	27/06/2014	200,000,000.00	Bank of India	Hyderabad Mid corporate branch, 10-1-1199/2, 1st Floor, P.T.I Building, A.C.Guards, Hyderabad, Telangana - 500004, INDIA	C10168599
4	10317280	30/06/2014 *	1,874,000,000.00	State Bank of India	Overseas Branch, Plot no. 241/A, Rajala Centre,, Road No.36, Jubilee Hills, Hyderabad, Telangana - 500033, INDIA	C10194207
5	10312190	08/07/2013 *	100,000,000.00	EXPORT-IMPORT BANK OF INDIA	Floor 21, Center One Building,, World Trade Center, Cuffee Parade, Mumbai, Maharashtra - 400005, INDIA	B81105207
6	10243563	07/01/2014 *	50,000,000.00	SBI GLOBAL FACTORS LIMITED	6TH FLOOR, METROPOLITAN BUILDING, BANDRA-KURLA, C  OMPLEX, BANDRA(EAST), MUMBAI, Maharashtra - 400051, INDIA	B95077830
7	10199917	23/01/2010	220,000,000.00	State Bank of India	Overseas Branch, 5-9-300, Abids, Hyderabad, Andhra Pradesh - 500001, INDIA	A78226974
8	10082478	08/07/2013 *	300,000,000.00	EXPORT-IMPORT BANK OF INDIA	Floor 21, Center One Building,, World Trade Center, Cuffee Parade, Mumbai, Maharashtra - 400005, INDIA	B81101784
9	90135025	07/01/2014 *	1,509,000,000.00	State Bank of India	Overseas Branch, Plot no. 241/A, Rajala Towers,,  Road no.36, Jubilee Hills, Hyderabad, Andhra Pradesh - 500033, INDIA	B94788759

* Date of charge modification

UNSECURED LOANS

PARTICULAR	31.03.2015 (Rs. In Million)	31.03.2014 (Rs. In Million)
LONG TERM BORROWINGS
Inter corporate deposit	NA	250.000
SHORT TERM BORROWINGS
Inter corporate deposit from related party	NA	30.000
Total	NA	280.000

CORPORATE INFORMATION (As on 31.03.2014)

The Company is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The Company is engaged in the manufacturing and selling of bulk drugs. The Company caters to both domestic and international markets.

FINANCIAL RESULTS

For the financial year ended March 31, 2014, while there was a marginal growth in revenues, the EBIDTA grew by 17.16% to reach Rs. 728.000 Million and Profit after tax (PAT) increased to Rs. 266.700 Million from Rs. 136.400 Million in the previous financial year, recording a growth of 95.51%.

BUSINESS REVIEW

The Company continued to take key initiatives on product mix changes, scaling up new processes and improving

manufacturing processes, which enabled the Company to improve the profitability.

The Company has completed all necessary modifications to enable manufacturing and sales as envisaged in the Joint Business arrangement with API Corporation, Japan, which is part of the Mitsubishi Chemical for manufacturing and selling of APIs and Intermediates to Japan, it is anticipated that actual sales would commence by end of Q1 FY2015.

The Company is in the process of taking further systemic improvements, like product mix changes, cost optimization and process improvements, which are expected to have a positive impact on the profit margins, efficiencies and overall profitability. The management is working with a focus to build a sustainable business model which would add value to all stakeholders over the years to come.

During the year under review, the Company also successfully completed inspections by various regulatory authorities including USFDA, EMA (Europe), ANVISA (Brazil) and Cofepris (Mexico).

OUTLOOK

The Company is in a competitive environment, however its portfolio mix provides it with opportunities for growth and the Company is building on that potential by scaling up a further 9 products in the next year which will add to the pipeline and could boost growth prospects.

The Company’s quest for growth has been further aided by the significant custom manufacturing opportunities received by the Company. The research and development work done in the past has helped the Company to become a significant competitor in the custom manufacturing market as the Company has gained a better understanding of its customers’ needs. The Company’s forays in this segment have yielded considerable success in the form of securing contracts for manufacturing commercial compounds as well as clinical development candidates.

The Company has the requisite capabilities to build on its success so far and use the momentum for driving further growth.

MANAGEMENT DISCUSSION AND ANALYSIS

ECONOMIC OVERVIEW

The Global efforts to revive the economy have started showing results in some countries. As per IMF WEO Outlook 2014, Global economy would grow at 3.6% in 2014 and 3.9% in 2015 up from 3.3% in 2013. Advanced economies are expected to grow at ~2.2 % with United States leading the lot. Emerging Economies are expected to grow at 5% in 2014 and a little above 5% in the next year from a 4.7% growth in 2013. The trends suggest that the emerging economies will draw impetus to grow from external demand only mostly from the Developed World. The biggest challenge, therefore for the emerging economies is to maintain the supply – demand ratio. The growth is expected to be modest based on the financial vulnerability of these countries to the developed World.

Indian Economy, alike other Emerging economies, is also faced with the challenges like currency devaluation, inflation and external pressures to demand. India’s GDP grew at a moderate 4.4 % in 2013 which is the lowest growth in the decade for the country. The growth of the country has been majorly affected by the external developments as for other emerging countries apart from lesser domestic demand. Internal issues like pressing Inflation rates and domestic policies have been rendering negative effect on the country’s growth. Delayed investment approvals and implementations, supply bottlenecks, external policies etc all add to the hindrances. As per IMF projections, the growth of ~5.5% can be expected if conditions like stronger global growth, improving export competitiveness, a positive result of recent policy changes come into play.

PHARMACEUTICAL INDUSTRY LANDSCAPE

The Global Pharmaceutical industry is volatile and is undergoing changes at the moment due to aging populations

and expanding market growth. IMS Health, in its latest report, “The Global use of Medicines: Outlook through 2017”, predicts global spending on medicines to reach almost $1.2 trillion in 2017. With medical awareness, emphasis on universal medical coverage, ensured access to medicines and healthcare, the industry is expected to grow over the years to come. IMS health divides market into two parts- Developed market and ‘Pharmerging’. Developed markets include North America, USA and Japan while the Pharmerging market is composed of 7 emerging countries - Brazil, India, Turkey, Mexico, Russia, South Korea, and China. The report also emphasizes a modest growth in the developed markets in the next 5 years, due to economic and healthcare austerity measures. With patent expiry also approaching, availability of reasonably priced generics would also contribute to some realization. The emerging markets on the other hand are predicted to be seeing much higher double digit growth due to impetus on economic growth, demographic changes, and improved urban and socio-economic facilities. In light of innovations in new and conducive medicines, this is viewed as the future of the Pharmaceutical industry.

The Indian pharmaceutical industry is one of the fastest growing the world, and is third in terms of volume in the world. The Indian Pharmaceutical sector is expected to record revenues of $30 Bn in 2015 of which around $10 Bn will be from exports. Over the last decade, the industry has emerged as a major player in generic pharmaceutical production and now supplies around 20% of the global market for generic medicines.

They have seen the pharmaceutical industry across the world go through another phase of consolidation, acquisitions aimed at consolidation of both capabilities as well as markets. Another aspect in which they have seen substantial change is the approach of various national regulatory authorities. Regulations have become tighter and the expectations from manufacturers are higher. Another key trend which has been noted earlier but is worth mentioning is the movement of manufacturing facilities from the developed markets to India and other Pharmerging markets.

The Ministry of Commerce, Government of India, estimates investments of about US$ 6.3 billion will be made in the Indian pharmaceutical industry by 2015. The Indian pharmaceutical industry remains an attractive destination

for foreign investors, usually in the form of acquisition of Indian companies.

It is estimated that in 2015, the trade surplus from pharmaceuticals alone may move up to US$12.8 billion. It is likely that by 2015, the Indian elementary drugs share out of the aggregate supplies from Asia-Pacific may soar to 10%, only behind Japan and China.

COMPANY OVERVIEW

Neuland Laboratories has completed 30 years of existence as an API manufacturer. Neuland has consistently grown its API manufacturing business gaining expertise in different therapy segments. As a company they have been focused on delivering quality on time to their customers, which has seen us perform consistently in a very competitive environment. The Company has a rich basket of products marketed to customers across 85 countries. The Company also offers integrated and versatile manufacturing capabilities capable of handling complex reactions tuned to ensure seamless transfer from small-scale through validation to commercial manufacturing. This integration helps customers to expedite the discovery-to-market timelines.

The Company has two manufacturing facilities located close to Hyderabad which are compliant with health and regulatory agencies cGMP certification standards. The sites have been audited and certified by regulatory authorities time to time from FDA (USA), TGA (Australia), AIFA (Italy), ANSM (France), PMDA (Japan), ANVISA (Brazil), and COFEPRIS (Mexico) among others.

The Company’s strengths are in synthetic chemistry, process development and controlled supply chain coupled with a project management approach built into all its operations and product development programs.

· Neuland has made a successful foray into Custom Manufacturing Solutions building on its strengths of proven expertise in manufacturing at varied scales

· A deep understanding of complex chemistry

· Manufacturing facilities that are compliant with the guidelines of the leading regulatory authorities such as USFDA, EMA, COFEPRIS and ANVISA.

STRATEGIC REVIEW

During the past year the Company has taken a lot of steps to build on its momentum to ensure sustainable growth while enhancing profitability, strengthening the balance sheet and enhancing its credit rating. Through the last year they have taken several strategic steps to ensure that profitability is enhanced, while also ensuring top-line growth in the nearterm and as well as long-term.

Towards this end, the Company has strengthened its Marketing and Business Development capabilities by expanding the team to enable them to serve more markets as well focus better on their customers.

They have also further strengthened their product selection process such that they have a rich pipeline of products under development which will enable growth as well as sustainability in the future.

During the past year they have continued with the emphasis on changing the portfolio mix towards more profitable, lowervolume products. They have actively pursued new customers over the last year and have had orders from over 100 new customers.

They have gone further in their journey of partnership with API Corporation, by getting the infrastructure ready during this fiscal year. This partnership while translating into long-term business gains for both companies will also open more such avenues for the Company.

OUTLOOK

Buoyed by a robust financial performance in FY 2013-14, the Company believes that it can sustain the growth momentum in FY 2014-15. Its strategy to focus on niche, high-margin products with continuous expansion of its product portfolio gives it the ability to yield revenue and profitability growth over coming years. Its foray into contract manufacturing is likely to not only add to its revenues and profitability but flag-off its evolution as a custom manufacturer for many other pharmaceuticals companies. Its alliance with Mitsubishi Chemicals is expected to strengthen the Company’s revenue growth over many years.

As a result of steps taken over the past few years, they believe that Neuland is now on the threshold of a very exciting journey. Considering the steps taken to strengthen the Company in the last year and the continuous evolution of the Company’s portfolio-mix, customers and pipeline, they are positioning ourselves well to take advantage. They believe that this is an opportune time for them to leverage the opportunities opening up to them by strategically investing in their capabilities. As they continue on this trajectory of growth, all these factors in conjunction with the vision of the Company to become a leading player in API market worldwide. They believe that as they continue on their path of growth, the future is Neuland’s to claim.

CONTINGENT LIABILITIES (AS ON 31.03.2014):

(a) Claims against the Company not acknowledged as debts

(i) Andhra Pradesh Gas Power Corporation Limited and its shareholders (including Neuland) have filed writ petition before the Division Bench of High Court of A.P, which has been admitted and favourable interim orders have been granted. The Company has been advised that it has a strong case to succeed in the pending appeal.

(ii) Certain disputes, for unascertained amounts, are pending in the Labour Courts, A.P. As the chances of appellants succeeding in their claims being remote, the Company expects no liability on this account.

(iii) Income Tax department has filed a writ petition before the Hon’ble High Court of Andhra Pradesh to set aside the Income Tax Appellate Tribunal orders for the Assessment Year 2001-2002 and 2002-2003 against the claim on deduction U/sec 80HHC. The Hon’ble High Court of Andhra Pradesh has admitted the appeal and the matter is pending. If there is an adverse ruling against our Company, the estimated financial impact on the Company would be Rs. 0.342 Million and Rs. 1.415 Million respectively.

(iv) Income Tax department has filed a writ petition before the Hon’ble High Court of Andhra Pradesh to set aside the Income Tax Appellate Tribunal order bearing TA No. 842/H/06 dated May 5, 2008 for the Assessment Year 2003-2004 against the allowability of Employee’s contribution towards PF, ESI. The Hon’ble High Court of Andhra Pradesh has admitted the appeal on June 20, 2012 and the matter is pending. If there is an adverse ruling against

our Company, the estimated financial impact on the Company would be Rs. 0.144 Million.

(v) The Company has filed an appeal before Income Tax Appellate Tribunal against the order of the Commissioner of Income Tax (Appeals) for the Assessment Year 1998-1999 against the disallowance of Commission paid to Nonresident agents for not deducted at source u/s 40(a)(i) of Income Tax Act, 1961 and the matter is pending. If there is an adverse ruling against our Company, the estimated financial impact on the Company would be Rs. 0.634 Million.

(vi) The Company has filed an appeal before Income Tax Appellate Tribunal against the order of the Commissioner of Income Tax (Appeals) for the Assessment Year 2008-2009 and 2009-2010 against the disallowance of Commission paid to Non-resident agents and other payments to Non-residents for not deducted at source u/s 40(a)(i) of Income Tax Act, 1961 and the matter is pending. If there is an adverse ruling against our Company, the estimated financial impact on the Company would be Rs. 1.917 Million and Rs. 1.682 Million respectively.

(b) Unexpired Letters of Credit opened on behalf of the Company by Bank for the raw material amounting to Rs. 350.147 Million (March 31, 2013: Rs. 352.130 Million).

(c) Bank Guarantees given by the Company to Central Excise and Customs and other Government authorities amounting to Rs. 8.000 Million (March 31, 2013: Rs. 9.500 Million).

FIXED ASSETS

TANGIBLE ASSETS

· Land

· Buildings

· Plant and Equipment

· R&D Equipment

· Data Processing Machines

· Furniture and Fixtures

· Vehicles

INTANGIBLE ASSETS

· Process Development Cost

· Computer Software - SAP

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.63.95
UK Pound	1	Rs.98.64
Euro	1	Rs.69.86

INFORMATION DETAILS

Information Gathered by :	GAY
Analysis Done by :	DIV
Report Prepared by :	JYTK

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	4
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	4
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--CREDIT LINES	1~10	4
--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		42

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.