MIRA INFORM REPORT

3decades

MIRA INFORM REPORT

Report No. :	514520
Report Date :	22.06.2018

IDENTIFICATION DETAILS

Name :	THE HIMALAYA DRUG COMPANY

Registered Office :	Makali Tumkur Road, Bangalore – 562123, Karnataka
Tel No/ Mobile No.:	91-80-23714444

Country :	India

Financials (as on) :	31.03.2017

Year of Establishment :	1930

Capital Investment :	Not Divulged

IEC No.: [Import-Export Code No.]	Not Divulged

PAN No.: [Permanent Account No.]	Not Divulged

GSTN : [Goods & Service Tax Registration No.]	Not Divulged

Legal Form :	Partnership Concern with an unlimited liability of the partners

Line of Business :	Manufacturers Ayurvedic pharmaceutical healthcare, consumer care products, animal healthcare, pet care, pure herbs, organic products and neutraceuticals. [From Indirect Sources]

No. of Employees :	Not Divulged

RATING & COMMENTS

(Mira Inform has adopted New Rating mechanism w.e.f. 23^rd January 2017)

MIRA’s Rating :

A+

Credit Rating	Explanation	Rating Comments
A+	Low Risk	Business dealings permissible with low risk of default

Maximum Credit Limit :	USD 6200000 (INR 428151428.52)

Status :	Excellent

Payment Behaviour :	Regular

Litigation :	Exists

Comments :	The Himalaya Drug Company is a closely held Bengaluru-based partnership firm and was established in the year 1930. The partners are Himalaya Global Holdings Limited, a company registered in the Cayman Islands, and Himalaya Drug Company Private Limited, an India-based company. The firm manufactures herbal pharmaceutical healthcare, consumer care, animal healthcare, pet care, pure herb, organic, baby care and nutraceutical products. The subject’s products are sold in 92 countries across the world and its products are prescribed by 400,000 doctors worldwide. The subject has more than 290 researchers that utilize ayurvedic herbs and minerals Mr. Gururaj (Senior Finance Manager) has denied providing any information about the subject. All the information in the report is gathered from indirect sources. The firm has achieved revenue of INR 22000 million for the financial year 2017. Rating takes into consideration the subject’s long established track record of business operations marked by healthy operating efficiency along with established brand “Himalaya” in Ayurvedic segment and resourceful promoters. However, rating strength is partially offset by stiff competition by organized and unorganized players in the FMCG industry. Business is active. Payment seems to be regular. In view of aforesaid, the subject can be considered for business dealings at usual trade terms and condition. Note: Site visit was conducted at the address which you have provided and our executive has successfully traced the subject on the given address. At the premises our executive met the Security Guard (Name not divulged) who confirmed the subject’s existence but did not allow our executive to enter the premise. During the visit our executive inquired with the neighbour companies - Sri Maruthi Dhaba Hotel and Abbi Tent House and they both claimed that the subject exists on the given address. As per our executive’s observation, it is 4 storey building and the whole premise belongs to the subject. Location was easy to find. Locality appears to be commercial. Area seems to be neutral. Name board of the subject was sighted at the given address.

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

Country Name

Previous Rating

(31.12.2017)

Current Rating

(01.04.2018)

India

Risk Category	ECGC Classification
Insignificant	A1
Low Risk	A2
Moderately Low Risk	B1
Moderate Risk	B2
Moderately High Risk	C1
High Risk	C2
Very High Risk	D

EXTERNAL AGENCY RATING

Rating Agency Name	India Rating
Rating	Long Term Loans = A+
Rating Explanation	Adequate degree of safety and low credit risk
Date	17.04.2018

Rating Agency Name	India Rating
Rating	Short Term Loans = A1+
Rating Explanation	Very strong degree of safety and carry lowest credit risk
Date	17.04.2018

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 31-03-2018.

BIFR (Board for Industrial & Financial Reconstruction) LISTING STATUS

Subject’s name is not listed as a Sick Unit in the publicly available BIFR (Board for Industrial & Financial Reconstruction) list as of 22.06.2018

IBBI (Insolvency and Bankruptcy Board of India) LISTING STATUS

Subject’s name is not listed in the publicly available IBBI (Insolvency and Bankruptcy Board of India) list as of report date.

INFORMATION DENIED BY

Name :	Mr. Gururaj
Designation :	Senior Finance Manager
Contact No.:	91-9741900160
Date :	19.06.2018

Management Non-cooperative : 91-80-23714444

Tel No : 91-9591995765 (Ringing)

LOCATIONS

Registered Office :	Makali Tumkur Road, Bangalore – 562123, Karnataka, India
Tel. No.:	91-80-23714444
Mobile No.:	91-9741900160 (Mr. Gururaj)
Fax No.:	91-80-23714474
E-Mail :	k.gururaj@himalayawellness.com customer.service@himalayawellness.com
Website :	http://www.himalayahealthcare.com
Locality :	Commercial (As per site visit)

PARTNERS

Name :	Himalaya Drug Company Private Limited
Designation :	Partner

Name :	Himalaya Global Holdings Limited
Designation :	Partner

KEY EXECUTIVES

Name :	Mr. Gururaj
Designation :	Senior Finance Manager

BUSINESS DETAILS

Line of Business :	Manufacturers Ayurvedic pharmaceutical healthcare, consumer care products, animal healthcare, pet care, pure herbs, organic products and neutraceuticals. [From Indirect Sources]

Products :	Ayurvedic Pharmaceutical Healthcare Consumer Care Products Animal Healthcare Pet Care Pure Herbs Organic Products Neutraceuticals

Brand Names :	“Himalaya”

Agencies Held :	Not Available

Exports :	Not Divulged

Imports :	Not Divulged

Terms :	Not Divulged

GENERAL INFORMATION

Suppliers :

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

Customers :

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

No. of Employees :

Information denied by the management

Bankers :

Bank Name	Not Divulged
Branch	--
Person Name (With Designation)	--
Contact Number	--
Name of Account Holder	--
Account Number	--
Account Since (Date/Year of Account Opening)	--
Average Balance Maintained (If Possible)	--
Credit Facilities Enjoyed (If any)	--
Account Operation	--
Remarks (If any)	--

Auditors :	Not Divulged

Collaborators :	Not Available

Membership :	Not Available

Sister Concern :	Not Available

CAPITAL STRUCTURE

Capital Investment :
Owned :	Not Divulged
Borrowed :	--
Total :	Not Divulged

FINANCIAL DATA

[all figures are INR Million]

Particulars

31.03.2017

Sales Turnover (Approximately)

22000.000

The above information has been taken from Indirect Sources

Note: Sole Proprietary and Partnership concerns are exempted from filing their financials with the Government Authorities or Registry Records.

LEGAL CASE

CCH1 PRL. CITY CIVIL and SESSIONS JUDGE

Case Details

Case Type: Misc - Miscellaneous Cases
Filing Number: 681/2016Filing Date: 25-08-2016
Registration Number: 691/2016Registration Date: 25-08-2016
Case Code: 204900006812016

Case Status

First Hearing Date: 25th August 2016
Next Hearing Date: 11th January 2017
Stage of Case: NOTICE
Court Number and Judge: 847-CCH45 XLIV ADDL. CITY CIVIL & SESSONS JUDGE

Petitioner and Advocate

1) M/S INDIRA ENTERPRISES
Address - PHARMACEUTICAL AND SURGICAL DISTRIBUTOR, NO. 690-L, 1ST FLOOR,14TH MAIN, 2ND PHASE, J.P.NAGAR, BANGALORE 78. PRESENT AT NO.84, 23RD MAIN, 2ND PHASE, MARENAHALLI, J.P.NAGAR, BANGALORE 78. REP. BY ITS PRORIETRIX SMT. YOGASHREE VISHWANATH WIFE OF VISHWANA
Advocate- MALLIKARJUN C.BASAREDDY

Respondent and Advocate

1) THE HIMALAYA DRUG COMPANY
Address - MAKALI, BANGALORE 562 123, BY ITS CHAIRMAN SRI NEERAJ MANAL,

Acts

Under Act(s)	Under Section(s)
U/O 9 RULE 4 AND 9	,
History of Case Hearing

Registration Number	Judge	Business On Date	Hearing Date	Purpose of hearing
691/2016	CCH45 XLIV ADDL. CITY CIVIL & SESSONS JUDGE	25-08-2016	04-11-2016	NOTICE
691/2016	CCH45 XLIV ADDL. CITY CIVIL & SESSONS JUDGE	04-11-2016	11-01-2017	NOTICE

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 – legal form	Yes
3	Locality of the entity	Yes
4	Premises details	No
5	Buyer visit details	Yes
6	Contact numbers	Yes
7	Name of the person contacted	Yes
8	Designation of contact person	Yes
9	Promoter’s background	No
10	Date of Birth of Proprietor / Partners / Directors	No
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	No
18	Major suppliers	No
19	Major customers	No
20	Banking Details	No
21	Banking facility details	No
22	Conduct of the banking account	--
23	Financials, if provided	Yes
24	Capital in the business	No
25	Last accounts filed at ROC, if applicable	No
26	Turnover of firm for last one year	No
27	Reasons for variation <> 20%	--
28	Estimation for coming financial year	No
29	Profitability for last one year	No
30	Major shareholders, if available	No
31	External Agency Rating, if available	Yes
32	Litigations that the firm/promoter involved in	Yes
33	Market information	--
34	Payments terms	No
35	Negative Reporting by Auditors in the Annual Report	No

OBSERVATION POINTS

Name :	THE HIMALAYA DRUG COMPANY

Address :	Makali, Tumkur Road, Bangalore – 562123, Karnataka, India

Person to whom we met:	Security Guard (Name not divulged)

Name Board:	Sighted

Location:	Easy

Total Floors of the building:	Ground + 4 Floor

Subject situated on :	Whole premises belongs to the subject

Locality:	Commercial

Area:	Neutral

Neighbor’s Interview :
Name of Company 1:	Sri Maruthi Dhaba Hotel

Name of Company 2:	Abbi Tent House

Proof of visit:	Photographs

PRESS RELEASE

CCI TO ISSUE ORDER ON CASE RELATED TO UNFAIR DRUG TRADE PRACTICES IN MADHYA PRADESH SOON

Laxmi Yadav, Mumbai
Monday, June 18, 2018, 08:00 Hrs [IST]

The Competition Commission of India (CCI) is expected to soon finalise its order on alleged unfair business practices carried out by Madhya Pradesh Chemists and Druggists Association (MPCDA) and its associates - Indore Chemists Association (ICA) and Jabalpur Chemists and Druggists Association (JCDA) in connivance with 12 leading drug companies thus violating the provisions of the Competition Act, 2002

The Commission, which had issued notices to all the parties including MPCDA, ICA, JCDA, 12 pharma companies such as Himalaya Drugs Company, Intas, Torrent, Sun Pharma, Fourrts (India) Laboratories, Eris Lifesciences, Apex Laboratories, Cipla, Ozone Pharmaceuticals, Win-Medicare, Meyer Organics, Macleods Pharmaceuticals named by Madhya Pradesh Chemists and Distributors Federation (MPCDF) in its complaint, has completed their personal hearings and cross examinations.

The regulator is expected to take a final decision on the case soon, sources said.

In 2014, MPCDF had filed a complaint against MPCDA and the above drug companies for engaging in unfair trade practices resulting in limiting and controlling the supply of drugs and cosmetics which is a violation of Section 3(3)(b) read with Section 3(1) of the Competition Act, 2002.

The MPCDF in its complaint stated that one of its members- Gopal Gupta of Pharma Agencies had approached C&F agents of various pharma companies including the 12 companies seeking supply of their products. However, his demand draft was returned and he was denied supply without according any reason for such denial. It is alleged that MPCDA and its associates issue no objection certificate/letter of consent for appointment of stockists and thus stifling competition in the market by limiting access to various pharma products and controlling supply of drugs in the market by ensuring that only those distributors which are favoured by them are selected by pharma companies.

Further it alleged that the above mentioned pharma companies are also active participants in the anti-competitive practices carried by MPCDA and its affiliates since they are willingly adhere to directive issued by the alleged trade body and refuse to appoint fresh distributors till the trade body gives its consent, due to which the supply of drugs to the consumers is obstructed.

The Director General (DG) of CCI had conducted a probe into the matter and submitted its preliminary report on September 30, 2016 and final report in November 2017. During investigation, DG, which is the investigation arm of the Commission, had found the MPCDA & its associates and 12 pharma companies were involved in anti-competitive practices.

The CCI had issued notices to all the parties, following a detailed probe by its DG seeking their submission by March 16, 2018. It later extended the submission date by April 13, 2018 and asked all the parties to appear for a hearing on May 9 & 10, 2018.

However, the MPCDA and its associates have not filed their submission by the due date and filed application on May 2, 2018 seeking cross examination of certain witnesses.

The MPCDA sought cross examination of Gopal Gupta of Pharma Agencies, Virendra Jain, secretary of MPCDF, RK Vachher, national sales manager of Himalaya and Vishnu Singhal of Singhal Trading Corporation under Regulation 41(5) of the Competition commission of India (General) Regulations, 2009. Similarly ICA in its application dated May 2 this year sought cross examination of Sanjay Dixit, general manager of Intas, Santosh Jhawar of Vijay Trade and C&F agent of Intas.

They were allowed to conduct cross examination of Gopal Gupta, RK Vachher, Santosh Jhawar, Sanjay Dixit which was held on June 13, 2018 in the presence of KP Anand, deputy director (law), CCI. As per Section 138 of the Indian Evidence Act, the CCI allows cross examination in cases where witness has led evidence by way of oral submissions.

In the past also, several state units of the All India Chemists and Druggists Association (AIOCD) have come under the CCI scanner and some were found to be violating competition norms. Recently, the watchdog fined the Chemists and Druggists Association of Baroda (CDAB) and Federation of Gujarat State Chemists and Druggists Association (Gujarat Federation) for restricting the supply of drugs and cosmetics which it found in violation of the provisions of the Competition Act, 2002.

HIMALAYA DRUG CO UNDER TAXMAN’S SCANNER FOR ALLEGED EVASION

New Delhi 4^th June 2018

Bengaluru-based Himalaya Drug Co has come under the indirect tax department’s scanner for alleged tax evasion and wrong availment of input tax credit.

Bengaluru-based Himalaya Drug Co has come under the indirect tax department’s scanner for alleged tax evasion and wrong availment of input tax credit. The drug manufacturer, the department’s investigation has revealed, evaded excise duty to the tune of `19 crore between April 2013 and June 2017 by miss-classifying a product to claim lower excise liability. Besides, the company has claimed and obtained undeserved input (service) tax credit of around `10 crore — it was outsourcing production of the goods concerned but claimed to be manufacturing them at their own facilities and that certain services also went into the goods as inputs.

The sources said that “baby wipes” are classified under chapter 33 of the Central Excise Tariff Act which attracted 12.5% duty for being “perfumed papers and papers impregnated or coated with cosmetics, whether or not perfumed”. However, the company had been selling the product under Chapter 96, which attracts 6% excise. The mis-classification of the article continued in the GST regime as well, which is also being investigated by the department.

Under GST, Chapter 33 items are taxed at 28% while Chapter 96 products fall under a much lower 18% bracket. The department recorded the statements of company officials on March 22 and also recovered relevant records under summon proceedings. A provisional investigation report has been submitted by the Bangalore zonal unit of the Directorate General of GST Intelligence even as further investigation is underway. The company could soon be served with a notice once the investigative process is over.

The preliminary report also noted that Himalaya Drug Co had ‘short-paid’ an amount under the Cenvat Credit Rules for the same period cited above, by availing input service credit for manufacturing excisable goods but failed to pay excise duty on the sale of these items. This accumulated credit amounting to `10 crore was transferred as transitional credit into the GST regime.

Sources said that the department found the excise duty evasion during detailed verification of transitional credit claimed by the company. In April, the government had identified the top 50,000 assessees in terms of the transitional credit claims detailed verification as the department believed that claims made were ‘unusually high’.

Nearly 9.5 lakh assessees have claimed a massive `1.6 lakh crore as such credits till the December 27 deadline. The process required the companies to produce records of sale, stock statement and a copy of the Trans-I form, used for claiming such credit. In the GST regime, businesses are allowed to claim credit for central taxes (excise and service tax) paid on the stock bought in the pre-GST regime but sold after July 1, when the GST came into existence.

UPDATE: In response to this story, a Himalaya Drug Company spokesperson said: “The Himalaya Drug Company is a tax compliant organisation and we follow a structured approach towards the same. Kindly be informed Himalaya has always been a tax abiding organisation. We always take appropriate advice from the tax experts for our tax compliance. The present issue appears to be some misunderstanding from the tax department regarding our product “Baby Wipes” and its classification proposed by them. As regard our product “Baby Wipes”, the same is in the market since 2007 and has followed the correct classification since launch and there is no short payment of any central excise duty. We affirm that till date there has been no notice nor any classification dispute on this product.”

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 records 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 records 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	INR
US Dollar	1	INR 68.19
UK Pound	1	INR 89.58
Euro	1	INR 78.79

INFORMATION DETAILS

Information Gathered by :	SVT

Analysis Done by :	NYT

Report Prepared by :	TRUP

SCORE FACTORS

DEMERIT POINTS
--BANK CHARGES	YES/NO	NO
--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	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES

RATING EXPLANATIONS

Credit Rating	Explanation	Rating Comments
A++	Minimum Risk	Business dealings permissible with minimum risk of default
A+	Low Risk	Business dealings permissible with low risk of default
A	Acceptable Risk	Business dealings permissible with moderate risk of default
B	Medium Risk	Business dealings permissible on a regular monitoring basis
C	Medium High Risk	Business dealings permissible preferably on secured basis
D	High Risk	Business dealing not recommended or on secured terms only
NB	New Business	No recommendation can be done due to business in infancy stage
NT	No Trace	No recommendation can be done as the business is not traceable

NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.

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 are as follows:

· Financial condition covering various ratios

· Company background and operations size

· Promoters / Management background

· Payment record

· Litigation against the subject

· Industry scenario / competitor analysis

· Supplier / Customer / Banker review (wherever available)

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.