Arch Pharmalabs

We are a pharmaceutical company aligned across two business verticals viz. Products and Services. Our
Products business comprises manufacture and sale of APIs and Intermediates to innovator and generic
pharmaceutical players in both domestic and international markets including the regulated markets.
We have evolved our business and have, over the years, extended from manufacturing APIs and
Intermediates to add CRAMS to our offerings, which has significant potential for the growth of our
business.

API Manufacturing Sites

We presently have 11 manufacturing facilities across India. Over the years we have leveraged organic
growth and acquisitions to strengthen both our manufacturing infrastructure. All these 11
manufacturing facilities have been multipurpose with reactor capacities of around 1500 KL. We have 4
manufacturing facilities located in Medak, Hyderabad, 5 in Mumbai (2 in Tarapur and 1 each in
Badlapur, Taloja and Dombivli) and 1 each in Gurgaon, Haryana and Solapur, Maharashtra. We have 5
API manufacturing facilities and 6 Intermediate manufacturing facilities. Of these 6 facilities are ISO
9001-2008 and cGMP compliant, 3 of them are inspected and approved by the USFDA and another 2 of
these facilities is expected to be inspected by the USFDA by 2012. These facilities allow us to supply
our products in regulated markets on registration and approval of the products with the relevant
authorities.
Our manufacturing facilities are designed to manufacture a variety of APIs and Intermediates using a
combination of processes. Our flexible manufacturing infrastructure enables us to expand our product
range and change our product mix in response to changes in customer demand and to serve customer
requirements ranging from laboratory scale research to commercial production. We have the capability
to handle several complex reactions in a cost-effective manner with scale of operations ranging from
multiple, multi-product facilities with capacities varying from gram to kilograms and multi tons. These
complex reaction capabilities include cryogenics, cyanation, enzymatic, chlorination, carboxylation,
hydrogenation and organoborane chemistry – across lab-scale, pilot-scale and commercial scale.
Over the years we have invested and will continue to further invest in our manufacturing facilities and
infrastructure with a pre-set objective of enhancing our organic growth capabilities.
Vitalife Site, Gurgaon

Avon Site, Solapur

Sibra Site, Hyderabad

Oncology Site, Tarapur

Dombivli Site, Near Mumbai

Balance Sheet of Arch Pharmalabs ------------------- in Rs. Cr. -------------------

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

12 mths 12 mths 12 mths 12 mths 12 mth

Sources Of Funds
Total Share Capital 21.23 21.23 21.23 26.09 23.69
Equity Share Capital 21.23 21.23 21.23 16.09 13.69
Share Application Money 30.00 0.00 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 10.00 10.00
Reserves 415.82 364.94 328.17 155.05 69.12
Revaluation Reserves 0.00 0.00 0.00 0.00 0.00
Networth 467.05 386.17 349.40 181.14 92.81
Secured Loans 900.13 673.03 283.76 246.32 176.39
Unsecured Loans 225.96 181.87 101.12 40.60 0.53
Total Debt 1,126.09 854.90 384.88 286.92 176.92
Total Liabilities 1,593.14 1,241.07 734.28 468.06 269.73
Mar '10 Mar '09 Mar '08 Mar '07 Mar '06

12 mths 12 mths 12 mths 12 mths 12 mth

Application Of Funds
Gross Block 690.24 527.07 300.60 208.18 139.52
Less: Accum. Depreciation 111.32 66.18 41.03 25.39 13.72
Net Block 578.92 460.89 259.57 182.79 125.80
Capital Work in Progress 67.42 117.22 11.45 8.54 22.62
Investments 49.24 71.79 39.26 3.12 0.52
Inventories 374.34 310.94 149.12 119.31 71.95
Sundry Debtors 477.15 311.27 169.55 117.95 82.08
Cash and Bank Balance 18.96 15.64 33.23 32.52 1.54
Total Current Assets 870.45 637.85 351.90 269.78 155.57
Loans and Advances 288.99 168.72 108.31 58.71 16.17
Fixed Deposits 31.17 25.19 62.80 17.04 6.30
Total CA, Loans & Advances 1,190.61 831.76 523.01 345.53 178.04
Deffered Credit 0.00 0.00 0.00 0.00 0.00
Current Liabilities 289.37 239.22 99.11 71.14 52.29
Provisions 3.68 1.37 1.10 1.94 6.48
Total CL & Provisions 293.05 240.59 100.21 73.08 58.77
Net Current Assets 897.56 591.17 422.80 272.45 119.27
Miscellaneous Expenses 0.00 0.00 1.18 1.16 1.53
Total Assets 1,593.14 1,241.07 734.26 468.06 269.74

Contingent Liabilities 139.71 102.07 0.10 4.55 0.10

Book Value (Rs) 205.83 181.86 164.55 106.38 60.50

Source : Dion Global Solutions Limited

Profit & Loss account of Arch Pharmalabs ------------------- in Rs. Cr. -------------------
Mar '10 Mar '09 Mar '08 Mar '07 Mar '0

12 mths 12 mths 12 mths 12 mths 12 mth

Income
Sales Turnover 1,051.98 735.57 514.20 362.55 246.8
Excise Duty 28.61 22.24 0.00 0.00 0.0
Net Sales 1,023.37 713.33 514.20 362.55 246.8
Other Income 6.88 -5.19 3.31 7.57 0.7
Stock Adjustments 26.26 105.11 21.68 14.25 6.9
Total Income 1,056.51 813.25 539.19 384.37 254.5
Expenditure
Raw Materials 690.72 594.21 373.46 256.81 169.4
Power & Fuel Cost 20.78 19.08 12.17 11.02 9.0
Employee Cost 49.83 36.14 21.03 15.18 10.6
Other Manufacturing Expenses 8.73 7.71 6.17 5.66 4.6
Selling and Admin Expenses 45.67 35.97 24.88 16.24 9.9
Miscellaneous Expenses 5.50 7.10 2.72 2.37 3.2
Preoperative Exp Capitalised -13.30 -25.18 0.00 0.00 0.0
Total Expenses 807.93 675.03 440.43 307.28 206.9
Mar '10 Mar '09 Mar '08 Mar '07 Mar '0
 12 mths 12 mths 12 mths 12 mths 12 mth

Operating Profit 241.70 143.41 95.45 69.52 46.8

PBDIT 248.58 138.22 98.76 77.09 47.5
Interest 131.24 59.64 35.71 24.96 15.7
PBDT 117.34 78.58 63.05 52.13 31.7
Depreciation 45.87 24.01 16.06 11.93 8.2
Other Written Off 0.00 0.00 0.37 0.37 0.3
Profit Before Tax 71.47 54.57 46.62 39.83 23.1
Extra-ordinary items 0.00 -1.29 -0.37 0.00 0.0
PBT (Post Extra-ord Items) 71.47 53.28 46.25 39.83 23.1
Tax 20.59 16.51 13.17 9.67 7.2
Reported Net Profit 50.88 36.77 33.45 23.77 15.9
Total Value Addition 117.21 80.82 66.96 50.46 37.5
Preference Dividend 0.00 0.00 0.47 0.75 0.2
Equity Dividend 0.00 0.00 0.00 0.00 0.0
Corporate Dividend Tax 0.00 0.00 0.08 0.13 0.0
Per share data (annualised)
Shares in issue (lakhs) 212.34 212.34 212.34 160.86 136.8
Earning Per Share (Rs) 23.96 17.32 15.53 14.31 11.4
Equity Dividend (%) 0.00 0.00 0.00 0.00 0.0
Book Value (Rs) 205.83 181.86 164.55 106.38 60.5

Source : Dion Global Solutions Limited

Cash Flow of Arch Pharmalabs ------------------- in Rs. Cr. -------------------

Mar '10 Mar '09 Mar '08 Mar '07 Mar '0

12 mths 12 mths 12 mths 12 mths 12 mth

Net Profit Before Tax 71.47 53.27 46.62 33.43 23.1

Net Cash From Operating Activities -75.29 -140.28 11.63 -40.61 -6.4
Net Cash (used in)/from
-72.44 -318.44 -161.88 -61.43 -54.8
Investing Activities
Net Cash (used in)/from Financing Activities 157.03 403.52 196.73 143.76 62.9
Net (decrease)/increase In Cash and Cash
9.30 -55.20 46.48 41.71 1.6
Equivalents
Opening Cash & Cash Equivalents 40.83 96.03 49.55 7.84 6.2
Closing Cash & Cash Equivalents 50.13 40.83 96.03 49.55 7.8

Source : Dion Global Solutions Limited

Key Financial Ratios of Arch Pharmalabs

Mar
Mar '09 Mar '08 Mar '07 Mar '0
'10

Investment Valuation Ratios

Face Value 10.00 10.00 10.00 10.00 10.0
Dividend Per Share -- -- -- --
Operating Profit Per Share (Rs) 113.83 67.54 44.95 43.22 34.2
Net Operating Profit Per Share (Rs) 481.95 335.94 242.16 225.38 180.3
Free Reserves Per Share (Rs) 187.27 161.61 147.72 95.37 49.2
Bonus in Equity Capital -- -- -- --
Profitability Ratios
Operating Profit Margin(%) 23.66 19.31 18.56 19.17 18.9
Profit Before Interest And Tax Margin(%) 19.05 15.91 15.33 15.81 15.5
Gross Profit Margin(%) 19.17 15.94 15.44 15.88 18.9
Cash Profit Margin(%) 9.39 8.79 9.66 10.01 9.7
Adjusted Cash Margin(%) 9.35 9.69 9.66 10.01 9.8
Net Profit Margin(%) 4.94 5.13 6.46 6.52 6.4
Adjusted Net Profit Margin(%) 4.94 5.14 6.46 6.52 6.3
Return On Capital Employed(%) 12.72 9.24 11.23 12.55 14.3
Return On Net Worth(%) 11.64 9.53 9.47 13.54 17.1
Adjusted Return on Net Worth(%) 11.54 11.73 9.51 13.76 18.9
Return on Assets Excluding Revaluations 205.83 181.86 163.99 105.67 4.8
Return on Assets Including Revaluations 205.83 181.86 163.99 105.67 4.8
Return on Long Term Funds(%) 21.84 14.14 14.09 16.78 20.4
Liquidity And Solvency Ratios
Current Ratio 0.88 0.92 1.31 1.12 0.8
Quick Ratio 2.79 2.16 3.73 3.10 1.8
Debt Equity Ratio 2.58 2.20 1.10 1.73 2.2
Long Term Debt Equity Ratio 2.58 2.20 0.67 1.05 1.2
Debt Coverage Ratios
Interest Cover 1.54 1.91 226.55 177.63 101.8
Total Debt to Owners Fund 2.58 2.21 1.10 1.73 2.2
Financial Charges Coverage Ratio 1.89 2.44 2.77 2.85 3.0
Financial Charges Coverage Ratio Post Tax 1.74 2.02 2.40 2.45 2.5
Management Efficiency Ratios
Inventory Turnover Ratio 2.81 2.37 3.49 3.07 3.4
Debtors Turnover Ratio 2.60 2.97 3.58 3.62 3.8
Investments Turnover Ratio 2.84 2.40 3.49 3.07 3.4
Fixed Assets Turnover Ratio 1.49 1.35 1.71 1.74 1.9
Total Assets Turnover Ratio 0.64 0.58 0.70 0.77 0.9
Asset Turnover Ratio 1.55 1.40 1.71 1.74 1.7
Average Raw Material Holding 107.83 110.90 110.58 143.30 110.9
Average Finished Goods Held 40.98 53.25 37.28 30.35 32.8
Number of Days In Working Capital 315.74 298.35 296.02 270.52 173.9
Profit & Loss Account Ratios
Material Cost Composition 67.49 83.30 72.62 70.83 68.6
Imported Composition of Raw Materials
20.24 8.91 37.38 --
Consumed
Selling Distribution Cost Composition 0.99 1.06 1.51 1.23 1.3
Expenses as Composition of Total Sales 38.68 24.45 14.19 23.80 30.4
Cash Flow Indicator Ratios
Dividend Payout Ratio Net Profit -- -- 0.24 0.55 0.2
Dividend Payout Ratio Cash Profit -- -- 0.16 0.36 0.1
Earning Retention Ratio 100.00 100.00 99.76 99.46 99.7
Cash Earning Retention Ratio 100.00 100.00 99.84 99.65 99.8
AdjustedCash Flow Times 11.69 12.33 7.69 7.87 7.2

Mar
Mar '09 Mar '08 Mar '07 Mar '0
'10

Earnings Per Share 23.96 17.32 15.53 14.31 11.4

Book Value 205.83 181.86 164.55 106.38 60.5

Source : Dion Global Solutions Limited