Rating Advisory

July 12, 2019 | Mumbai A dar sh Bi r m echaO r i gi nal Tem pl at e123

Goldline Pharmaceutical Limited

Advisory as on July 12, 2019

This rating advisory is provided in relation to the rating of Goldline Pharmaceutical Limited

The key rating sensitivity factors for the rating include:

 Time and/or cost overrun in planned capex

 Stabilization of operations post completion of capex
 Working capital management

CRISIL Ratings has a policy of keeping its accepted ratings under constant and ongoing
monitoring and review. Accordingly, it seeks regular updates from companies on business and
financial performance. CRISIL is yet to receive adequate information from Goldline
Pharmaceutical Limited (GPL) to enable it to undertake a rating review. CRISIL is taking all
possible efforts to get the rated entity to cooperate with its rating process for enabling it to carry
out the rating review.

CRISIL views information availability risk as a key factor in its assessment of credit risk. (Please
refer to CRISIL Ratings publication dated April 30, 2012 - 'Information Availability - a key risk
factor in credit ratings')

If GPL continues to delay the provisioning of information required by CRISIL to undertake a rating
review then, in accordance with circular SEBI/HO/MIRSD/MIRSD4/CIR/P/2016/119 dt Nov 1,
2016 and SEBI/HO/MIRSD/ MIRSD4/ CIR/ P/ 2017/ 71 dt June 30, 2017 issued by Securities and
Exchange Board of India, CRISIL will carry out the review based on best available information
and issue a press release.

About the Company

Incorporated in 2005, Goldline Pharmaceuticals Limited (GPL) is a closely -held public company
engaged in the marketing of generic drugs in nine states in the country. The day -to-day operations of
the Nagpur-based company are managed by Mr Amol Mujumdar and Mr Swapan Khandelwal.

Please note: This advisory should not be construed as a rating reaffirmation.

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information on any instrument of any company rated by CRISIL you may contact CRISIL RATING DESK at [email protected], or at
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 Rating Rationale
June 25, 2018 | Mumbai

Goldline Pharmaceuticals Limited

'CRISIL B+/Stable' assigned to bank debt

Rating Action
Total Bank Loan Facilities Rated Rs.6 Crore
Long Term Rating CRISIL B+/Stable (Assigned)
1 crore = 10 million
Refer to annexure for Details of Instruments & Bank Facilities

Detailed Rationale
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term bank facilities of Goldline Pharmaceuticals
Limited (GPL). The rating reflects CRISIL's belief that GPL's revenue and profitability will be exposed to funding and
completion risks relating to the impending set-up of its manufacturing unit. The rating also factors in a below-average
financial risk profile and modest scale of operations. These weaknesses are partially offset by the company's
established, albeit small, marketing network and the decade-long experience of its promoters.

Key Rating Drivers & Detailed Description

Weakness
* Risks relating to impending capex:
GPL is currently setting up its manufacturing unit at Butibori, the external debt for which is yet to be tied up.
Moreover, the planned capex marks the company's foray into manufacturing, having engaged in marketing of drugs
since its inception. GPL's revenue and profitability shall remain exposed to risks relating to funding and completion of
the manufacturing plant, with the company not having undertaken any such capex in the past.

* Below-average financial risk profile:

GPL's financial risk profile is marked by a relatively small networth of Rs 6.78 crore as at March 31, 2017 and
moderate gearing levels. Debt protection metrics for fiscal 2017 were weak, with interest coverage ratio of 1.27 times
and net cash accrual to total debt (NCATD) ratio of 5%.

* Modest scale of operations:

GPL's revenue has remained between Rs 35 and 40 crores in the three years ended fiscal 2017. While the company
has steadily scaled up operations since its inception, its scale remains modest, which could pose a challenge in the
intensely competitive generic pharmaceuticals industry.

Strengths:
* Established, albeit small, marketing network:
Currently, GPL is present in nine states, with a distribution network comprising of 12 carrying & forwarding agents
and around 170 stockists. The established marketing network has enabled the company to build its presence in
Maharashtra and Madhya Pradesh, among other states.

* Experience of promoters:
Mr Amol Mujumdar has been managing the operations of the company since 2005 and had professional stints in the
industry prior to setting up GPL. Between him and Mr Swapan Khandelwal, who joined the company in 2010, the
management possesses keen insights into the finer nuances of the generic pharmaceuticals industry.

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Outlook: Stable
CRISIL believes GPL will benefit in the medium term from its promoters' experience and its established marketing
network. The outlook may be revised to 'Positive' if GPL registers sharp revenue growth, post successful completion
of the impending capex, resulting in an improved financial risk profile. Conversely, the outlook may be revised to
'Negative' if GPL faces challenges in successfully completing the set-up of its manufacturing facility, thereby affecting
its operating margin and liquidity.

About the Company

Incorporated in 2005, GPL is a closely-held public company engaged in the marketing of generic drugs in nine states
in the country. The day-to-day operations of the Nagpur-based company are managed by Mr Amol Mujumdar and Mr
Swapan Khandelwal.

Key Financial Indicators

Particulars Unit 2017 2016
Revenue Rs. Cr. 37.08 36.59
Profit After Tax Rs. Cr. 0.44 0.42
PAT margin % 1.20 1.16
Adjusted Debt/Adjusted Net worth Times 1.06 1.37
Interest coverage Times 1.28 1.28

Any other information: Not applicable

Note on complexity levels of the rated instrument:

CRISIL complexity levels are assigned to various types of financial instruments. The CRISIL complexity levels are
available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL complexity levels for instruments that
they consider for investment. Users may also call the Customer Service Helpdesk with queries on specific
instruments.

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Annexure - Details of Instrument(s)
Issue
Name of Date of Coupon Maturity Rating Assigned
ISIN Size
instrument Allotment Rate (%) date with Outlook
(Rs. Cr)
NA Cash Credit NA NA NA 6.00 CRISIL B+/Stable

Annexure - Rating History for last 3 Years

Start of
Current 2018 (History) 2017 2016 2015
2015

Outstanding
Instrument Type Rating Date Rating Date Rating Date Rating Date Rating Rating
Amount

Fund-based Bank LT/S CRISIL

6.00 -- -- -- -- --
Facilities T B+/Stable
All amounts are in Rs.Cr.

Annexure - Details of various bank facilities

Current facilities Previous facilities
Amount Amount
Facility Rating Facility Rating
(Rs.Crore) (Rs.Crore)
CRISIL
Cash Credit 6 -- 0 --
B+/Stable
Total 6 -- Total 0 --

Links to related criteria

CRISILs Approach to Financial Ratios
CRISILs Bank Loan Ratings - process, scale and default recognition
Rating criteria for manufaturing and service sector companies
Rating Criteria for the Pharmaceutical Industry
CRISILs Approach to Recognising Default
CRISILs Bank Loan Ratings
The Rating Process
Understanding CRISILs Ratings and Rating Scales

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We are not aware that any user intends to rely on the Report or of the manner in which a user intends to use the Report. In preparing our Report we have not taken into
consideration the objectives or particular needs of any particular user. It is made abundantly clear that the Report is not intended to and does not constitute an investment
advice. The Report is not an offer to sell or an offer to purchase or subscribe for any investment in any securities, instruments, facilities or solicitation of any kind or
otherwise enter into any deal or transaction with the entity to which the Report pertains. The Report should not be the sole or primary basis for any investment decision
within the meaning of any law or regulation (including the laws and regulations applicable in the US).

Ratings from CRISIL Rating are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any
securities / instruments or to make any investment decisions. Any opinions expressed here are in good faith, are subject to change without notice, and are only current as
of the stated date of their issue. CRISIL assumes no obligation to update its opinions following publication in any form or format although CRISIL may disseminate its
opinions and analysis. CRISIL rating contained in the Report is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors
and/or clients when making investment or other business decisions. The recipients of the Report should rely on their own judgment and take their own professional
advice before acting on the Report in any way.

Neither CRISIL nor its affiliates, third party providers, as well as their directors, officers, shareholders, employees or agents (collectively, “CRISIL Parties”) guarantee the
accuracy, completeness or adequacy of the Report, and no CRISIL Party shall have any liability for any errors, omissions, or interruptions therein, regardless of the
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the possibility of such damages.

CRISIL Ratings may receive compensation for its ratings and certain credit-related analyses, normally from issuers or underwriters of the instruments, facilities, securities

5
or from obligors. CRISIL’s public ratings and analysis as are required to be disclosed under the regulations of the Securities and Exchange Board of India (and other
applicable regulations, if any) are made available on its web sites, www.crisil.com (free of charge). Reports with more detail and additional information may be available
for subscription at a fee – more details about CRISIL ratings are available here: www.crisilratings.com.

CRISIL and its affiliates do not act as a fiduciary. While CRISIL has obtained information from sources it believes to be reliable, CRISIL does not perform an audit and
undertakes no duty of due diligence or independent verification of any information it receives and / or relies in its Reports. CRISIL keeps certain activities of its business
units separate from each other in order to preserve the independence and objectivity of the respective activity. As a result, certain business units of CRISIL may have
information that is not available to other CRISIL business units. CRISIL has established policies and procedures to maintain the confidentiality of certain non-public
information received in connection with each analytical process. CRISIL has in place a ratings code of conduct and policies for analytical firewalls and for managing
conflict of interest. For details please refer to: https://www.crisil.com/en/home/our-businesses/ratings/regulatory-disclosures/highlighted-policies.html

CRISIL’s rating criteria are generally available without charge to the public on the CRISIL public web site, www.crisil.com. For latest rating information on any instrument
of any company rated by CRISIL you may contact CRISIL RATING DESK at [email protected], or at (0091) 1800 267 1301.

This Report should not be reproduced or redistributed to any other person or in any form without a prior written consent of CRISIL.

All rights reserved @ CRISIL