Directors Report of Ameya Laboratories Ltd.

Mar 31, 2012

Dear Members,

The Directors have pleasure in presenting the 16th Annual Report together with the Audited Accounts of the Company for the financial year ended March 31, 2012 and the Auditors Report thereon.

Financial results

Rs. Million

2011-12 2010-11

Income from operations 2799.28 2908.24

Excise duty (118.86) (181.59)

Other income 5.76 0.59

Total Income 2686.18 2727.24

Expenditure (before finance costs and depreciation) 2302.88 2282.43

Profit before finance costs and depreciation and tax 383.30 444.81

Finance costs 255.43 165.62

Profit before depreciation and tax 127.87 279.19

Depreciation 58.79 27.64

Profit before tax 69.08 251.55

Provision for taxation 29.07 78.58

Profit after tax 40.01 172.97

Income tax - Prior period (5.62) (41.07)

Add: Balance brought forward from previous year 414.39 317.08

Appropriations 448.78 448.98

Transfer to general reserve - 34.59

Balance carried to Balance Sheet 448.78 414.39

Review of operations

The year under review was critical for your Company in view of the severe liquidity constraints faced resulting from aggressive expansion in the last two years; PCB cap on the production capacities; delay in stabilising the operations at Unit 3; non-commencement of operations at Unit 4 and unrest due to agitations in the State. All these factors have contributed to mismatch of cash flows, which in turn resulted in defaults to various stakeholders.

During the year, the material consumption as a percentage of income at Rs.1767.48 million constituted 66.40% of income, while it was lower at 64.23% in 2010-11. With marginal increases in manufacturing and employee costs, the operating margin was lower at 14.40% as against 17.17% reported in the previous year. Hence, the operating profit was lower at Rs.383.30 million as against Rs.444.81 million in the previous year.

Further, the year witnessed inflationary pressures which impacted raw material prices, all of which could not be passed on to the customers. The tight money policy followed by the central bank, tended to firm up the interest rates affecting finance costs. Your Company incurred finance costs of Rs.255.43 million, approximately 54% higher than the previous year. The impact of the prevailing external challenging conditions did impact your Company's business, and despite being productivity oriented and raising the level of cost consciousness, the profit after tax was Rs.34.39 million for the year, lower than Rs.131.90 million reported in 2010-11.

Sale of Unit 2

Your Company has taken systemic initiative to set right the tight cash flow situation by deciding to dispose of Unit 2 situated at Pashamylaram, Medak

Dist, Andhra Pradesh. A postal ballot process has already been initiated in this regard for the approval of the Members and the result will be announced on August 31, 2012. With the funds realised from sale of Unit 2, your Company expects to ease the tight cash flow situation and meet the various commitments to stakeholders and scale up the production in the remaining two units. Your Company has drawn a multipronged action plan to tackle the PCB issue and is confident of resolving the same at the earliest.

The proceeds of sale shall be utilised to reduce debt burden; bring idle assets to operation; and improve liquidity. These measures are expected to make up for the loss of revenue by sale of Unit 2 through higher capacity utilisation. Dividend

In order to conserve resources, your Board has decided not to recommend dividend for the financial year 2011-12.

Exports

In 2011-12, your Company has achieved an export turnover of Rs.132.41 million. Your Company is trying to consolidate its presence in global markets, while efforts to widen the depth and penetration of the existing markets are being taken up and new markets are being explored.

Directors

In terms of the provisions of Sections 255 and 256 of the Companies Act, 1956, Dr. K. Rajeswara Rao will retire at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. His re-appointment is proposed in the Notice convening the Annual General Meeting of the Company. Mr. Sundarashyam Chakravarthi and Mr. K. Ravindran Parthasarathi have resigned from the directorship effective from August 14, 2012. The Board placed on record its appreciation of the valuable services rendered by them during their tenure as directors of the Company.

Cost audit

The Company has appointed Nageswera Rao & Co, Cost Accountants, Hyderabad as the Cost Auditor of the Company for conducting cost audit for the financial year 2011-12.

The Cost Audit Report for the financial year 2011-12 will be submitted to the Central Government within the stipulated time.

Research & Development

The Company has incurred an expenditure of Rs.5.34 millions on R&D.

IPO update

Your Company had successfully concluded an initial public officer (IPO) during the financial year 2008-09 to fund the project at Jawaharlal Nehru Pharma City, Visakhapatnam to venture into the production of active pharmaceutical ingredients (APIs) and intermediates. Your Company has commissioned the plant and commenced production on March 25, 2010, with minor variation in respect of implementation of CRAM project. A brief summary of the utilization of the IPO funds as on March 31, 2012 is given below:

Rs. Million

Name of the project As per prospectui Actuals

Setting up a new plant at Vizag for manufacturing of drug intermediates 550.90 608.72

Setting up pilot plant for carrying out CRAM at Vizag 83.44 32.62

Long-term working capital requirements 166.70 166.70

General corporate purpose 41.49 41.49

Issue expenses 79.66 79.66

A separate resolution is being proposed in the ensuing Annual General Meeting under Section 61 of the Companies Act, 1956 for the approval of the Members for the variation in the project implementation.

Corporate governance

Your Company is committed to maintaining the highest standards of corporate governance. As required under Clause 49 of the Listing Agreement with the stock exchange, the Report on Corporate Governance as well as Auditors' Certificate on the Compliance of Corporate Governance are annexed.

In order to strengthen the corporate governance framework, the Ministry of Corporate Affairs had issued a set of Voluntary Guidelines in December 2009 for adoption by companies. Your Company is already complying with various requirements of the guidelines and has initiated appropriate action for implementing the residual items.

Management Discussion and Analysis

A separate section titled 'Management's Discussion and Analysis Report' forms part of the annual report.

Directors' Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956 with respect to Directors' Responsibility Statement, your Directors confirm that:

a. in the preparation of the accounts for the financial year ended March 31, 2012, the applicable accounting standards have been followed and there were no material departures;

b. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates which are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

c. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d. the Directors have prepared the accounts for the financial year ended March 31, 2012 on a 'going concern' basis.

Auditors

The Statutory Auditors of the Company, M/s. Karumanchi & Associates, Chartered Accountants, Hyderabad retire at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. The Company has received a letter from them to the effect that their appointment if made would be within the prescribed limits under Section 224 (1-B) of the Companies Act, 1956.

Fixed deposits

The Company has not invited/accepted deposits from the public within the meaning of Section 58A of the Companies Act, 1956.

Particulars of employees

During the year under review, the Company maintained the cordial relations with the employees. Information pursuant to Section 217(1)(e) read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1998 and forming part of report for the year ended March 31, 2012 is furnished as an Annexure to this report.

Conservation of energy, technology absorption, foreign exchange earnings and outgo

Particulars required under Section 217(1) (e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules are furnished in the Annexure.

Acknowledgement

Your Directors wish to place on record their appreciation for the valuable support and co-operation extended by IDBI Bank, SBI, Karur Vysya Bank Limited, ING Vysya Bank, IFCI Venture Capital Funds, Andhra Pradesh State Financial Corporation, state and central government agencies.

Your Directors also wish to place on record their sincere appreciation of the contribution made by the employees of the Company and are thankful to the shareholders for their continued patronage and support.

For and on behalf of the Board

Hyderabad K. Hari Babu

August 14, 2012 Managing Director

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Mar 31, 2011

Dear Members,

The Directors have pleasure in presenting the Fifteenth Annual Report together with the Audited Accounts of the Company for the year ended March 31, 2011.

FINANCIAL RESULTS Rs. Million

2010-11 2009-10

Income from operations 2875.73 2179.83

Excise duty (181.59) (141.62)

Other income 32.53 29.04

Total income 2726.67 2067.25

Expenditure (before Interest and depreciation) 2282.44 1682.24

Profit before interest and depreciation and tax 444.23 385.01

Interest 165.03 105.87

Profit before depreciation and tax 279.02 279.14

Depreciation 27.64 19.24

Profit/Loss before tax 251.56 259.90

Provisions for taxation 78.58 48.25

Profit/Loss after tax 172.98 211.65

Income tax - Prior period (41.07) (32.17)

Add: Balance brought forward from previous year 317.07 378.86

Appropriations 448.98 558.34

Provision for proposed dividend - 24.15

Provision for dividend tax - 4.10

Transfer to General Reserve 34.59 42.34

Balance carried to Balance Sheet 414.39 487.75

Total 448.98 558.34



REVIEW OF OPERATIONS

Your Board is pleased to report another set of strong results for 2010-11. This was possible despite of the global recessionary trends and challenging conditions in the pharmaceutical industry, both domestic and international.

Your Company achieved a turnover of Rs.2875.73 million compared to Rs.2179.83 million for the year 2010-11 representing an increase of around 31.92%. Net profit after tax was Rs.172.98 million during the year 2010-11, when compared to Rs.211.65 million during the previous year, a decline of around 18.27%. The profits declined largely due to the impact of merger of Nitya Laboratories Limited. Consequently, Earnings per Share (Face value of Rs.1 per share) for the year worked out to Rs.0.71 per share as against Rs.0.88 in the previous year.

During the year, your Company has complied with the Scheme of Amalgamation (the Merger) of the erstwhile Nitya Laboratories Limited (NLL) with the Company under Sections 391 to 394 of the Companies Act, 1956 approved by the Hon'ble High Court of Andhra Pradesh vide its Order dated December 21, 2010. The Scheme became effective on January 17, 2011 on filing of the certified copy of the Order of the High Court in the Office of Registrar of Companies, Hyderabad, Andhra Pradesh and all the properties, assets, both movable and immovable, liabilities including contingent liabilities and reserves of erstwhile NLL have without further act or deed, been transferred to and vested in the Company at their book values, as a going concern with effect from the appointed date i.e. April 1, 2009.

DIVIDEND

In order to conserve resources, your Board has decided not to recommend dividend for the financial year 2010-11.

TRANSFER TO RESERVES

Your Company proposes to transfer Rs.34.59 million to the General Reserve out of the amount available for appropriations.

CHANGE IN EQUITY CAPITAL

During the year under review, the equity capital of the Company has increased consequent to giving effect to the Scheme of amalgamation with Nitya Laboratories Limited. The shareholders of NLL were entitled to ten equity shares of Rs.1 each in the Company as fully paid up (exchange shares) for every fourteen equity shares of Rs.10 each fully paid up held by them in NLL. Accordingly, holders of 4,115,975 equity shares in NLL were allotted 2,939,983 equity shares of the Company.

EXPORTS

Your Company has achieved an export turnover of Rs.358.73 million during the year as compared to Rs.298.68 million in the previous year, an increase of 20.10%. During the year under review, your Company consolidated its presence in the global markets, while efforts were made to widen the depth and penetration of the existing markets, even as new markets were explored.

DIRECTORS

Mr. Ravindran Parthasarathi, has been appointed as an Additional Director of the Company effective from February 10, 2011 and Mr. Chakravarthy Sundarashyam has been appointed as an Additional Director of the Company effective from January 31, 2011. Approval of the Members for their appointment is being sought and forms part of the Notice of the ensuing Annual General Meeting of the Company to be held on September 28, 2011.

Mr. M. Ajaya Kumar resigned as a Director from the Board of Directors of the Company with effect from August 13, 2011. The Board placed on record its appreciation of the valuable services rendered by Mr. Ajay Kumar during his tenure as a Director of your Company.

Mr. M.S.S.V. Satyanarayana will retire at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. His re-appointment is being proposed and a suitable resolution forms part of the agenda of the Annual General Meeting.

Unfortunately, Mr. O.M. Kejriwal, Director passed away on October 25, 2010. Your Board and the Company are grateful for the significant contribution made by him to the growth and development of the Company.

COST AUDIT

Pursuant to Section 233B of the Companies Act, 1956, the Central Government has prescribed cost audit of the Company's bulk drug division as well as the formulation division. Subject to the approval of the Central Government, the Board had appointed Mr. A.V.S. Nageshwar Rao, Cost Accountant as Cost Auditors of the Company for the financial year 2010-11. The cost audit report would be filed with the Central Government on or before the due date.

RESEARCH & DEVELOPMENT

The Company has incurred an expenditure of Rs.7.70 million on research and development during the year

IPO UPDATE

Your Company had successfully concluded an initial public offer (IPO) during the financial year 2008-09 to fund the project at the Jawaharlal Nehru Pharma City, Visakhapatnam to venture into production of active pharmaceutical ingredients (APIs) and intermediates. Your Company has commissioned the plant and commenced production on March 25, 2010. A brief summary of the utilization of the IPO proceeds as at March 31, 2011 is given below:

Rs. Million

As per Prospectus Actuals

a. Setting up a new plant at Vizag for manufacturing of drug intermediates 550.90 550.90

b. Setting up of pilot plant for carrying out CRAMs at Vizag under progress 83.44 5.00

c. Long term working capital requirements 166.70 166.70

d. General corporate purposes 41.49 41.49

e. Issue expenses 79.66 79.40

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of Corporate Governance. As required under Clause 49 of the Listing Agreement with the Stock Exchange, a report on Corporate Governance as well as Auditors' Certificate on the Compliance of Corporate Governance are annexed.

In order to strengthen the corporate governance framework, the Ministry of Corporate Affairs had issued a set of Voluntary Guidelines in December 2009 for adoption by companies. Your Company is already complying with various requirements of the guidelines and has initiated appropriate action for implementing the residual items.

MANAGEMENT DISCUSSION AND ANALYSIS

A separate section titled Management's Discussion and Analysis forms part of this Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, your Directors confirm that:

i. in the preparation of the accounts for the financial year ended March 31, 2011, the applicable accounting standards have been followed and there were no material departures;

ii. they have selected such accounting policies and applied them consistently and made judgments and estimates which are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. they have prepared the accounts for the financial year ended 31st March, 2011 on a 'going concern' basis.

AUDITORS

The statutory auditors of the Company, M/s. Karumanchi & Associates, Chartered Accountants, Hyderabad retire at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. The Company has received a letter from them to the effect that their appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956.

FIXED DEPOSITS

The Company has not invited/accepted deposits from the public within the meaning of Section 58A of the Companies Act, 1956.

PARTICULARS OF EMPLOYEES

During the year under review, your Company maintained cordial relations with the employees. Information pursuant to Section 217(1)(e) read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1998 and forming part of the report for the year ended March 31, 2011 are as follows:

Name Designation Salary Nature of Qualification Rs. duties and Million experience

Mr. K. Hari Babu Managing 6.00 Management Chartered Director of the Accountant Company and 29 years of experience

Name Date of Age Last Commencement (Yrs) Employment of employment

Mr. K. Hari Babu Re-appointed 55 Suven as Managing Pharmaceuticals Director Limited effective from April 1,2007

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars required under Section 217(1) (e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules are provided in Annexure I.

ACKNOWLEDGEMENT

Your Directors wish to place on record their gratitude for the valuable support and co-operation extended by Karur Vysya Bank Limited, Jammu & Kashmir Bank, Andhra Pradesh State Financial Corporation, IDBI Bank, State Bank of India, ING Vysya Bank, Development Credit Bank and all the state and central government agencies.

Your Directors also wish to place on record their sincere appreciation of the contribution made by the employees of the Company and are thankful to the shareholders for their continued patronage and support.

For and on behalf of the Board

K. Hari Babu M.S.S.V. Satyanarayana Managing Director Director

Hyderabad August 13, 2011

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Mar 31, 2010

The Directors have pleasure in presenting the Fourteenth Annual Report together with the audited accounts of the Company for the financial year ended March 31, 2010 and the Auditors Report thereon.

FINANCIAL RESULTS Rs Million

2009-10 2008-09

Income from operations 2179.83 1761.16

Excise duty (141.62) (164.07)

Other income 29.04 26.35

Total Income 2067.25 1623.44

Expenditure 1682.24 1272.31

Profit before interest and depreciation and tax 385.01 351.13

Interest 105.87 74.82

Profit before depreciation and tax 279.14 276.31

Depreciation 19.24 16.99

Profit before tax 259.90 259.32

Provision for taxation 48.25 96.13

Profit after tax , 211.65 163.19

Income tax - Prior period (32.17) -

Add: Balance brought forward from previous year 378.86 270.91

Appropriations 558.34 434.10

Provision for proposed dividend 24.15 19.32

Provision for dividend tax 4.10 3.28

Transfer to General Reserve 42.34 32.64

Balance carried to Balance Sheet 487.75 378.86

Total 558.34 434.10

REVIEW OF OPERATIONS

Your Board is pleased to report another set of strong results for 2009-10. This was made possible despite the global recessionary trends and challenging conditions in the pharmaceutical industry, both domestic and international.

Your Company achieved a turnover of ?2179.83 million for the year under review compared to ?1 761.16 million in 2008-09, representing an increase of approximately 23.7%. Net profit after tax of ?211.64 million during 2009-10 was higher by 29.7%, when compared to ?163.20 million in the previous year.

Anus Laboratories Limited

The year under review saw higher volumes, rise in export earnings, improved capacity utilization and significant climb in revenues and in the context of high raw material prices, the margins were under pressure. There was lower incidence of tax and your Company could report enhanced profit after tax.

EXPORTS

Your Company has achieved an export turnover of ^298.68 million during the year when compared with the export turnover of ?178.99 million in the previous year, an increase of 66.87%. Exports constituted 13.7% of the turnover in the year under review as compared to 10.1% in the previous year.

In 2010-11, your Company plans to consolidate its presence in global markets with efforts being taken to deepen the penetration in the existing markets while improving geographical footprints to explore new markets. New products added to the portfolio are expected to provide further thrust to the marketing efforts.

DIVIDEND

Your Directors are pleased to recommend a dividend of 10% on the paid up capital of the Company for the financial year ended March 31, 2010. The total outgo on account of dividend inclusive of dividend tax is ^28.25 million.

TRANSFER TO RESERVES

Your Company proposes to transfer ?42.34 million to the General Reserve out of the amount available for appropriations.

CHANGE IN EQUITY CAPITAL

During the year under review, the equity capital of the Company was restructured by subdividing the face value of the equity shares of ^10 each into face value of?l per share to facilitate more liquidity to the shares in the stock market and make it more affordable to the small investors. Further, your Company issued fully paid bonus shares in the ratio of one equity share for every share held in the Company.

Consequently, Earnings per Share for the year after sub-division of shares and bonus issue worked out to ?0.88 per share as against ?1.35 in the previous year.

EXPANSION PLANS

Your Company is in the process of acquiring a Company viz., Nitya Laboratories Limited, a company manufacturing SMO in India, through a Scheme of Arrangement. Members had given their approval on May 29, 2010 for the amalgamation. Your Company has since filed a petition before the Honble High Court of Andhra Pradesh for approval of the proposed amalgamation.

Further, your Company has also acquired the assets including land, building, plant & machinery of M/s. Stilbene Chemicals Limited, located at Pydibhimavaram, Srikakulam District, Andhra Pradesh under SARFAESI Act, 2002 from IFCI Limited led consortium of banks and institutions.

During the financial year, the new plant of the Company at Jawaharlal Nehru Pharma City, Visakhapatnam, Andhra Pradesh was commissioned and has since commenced commercial production.

OUTLOOK

Your Company will continue to demonstrate good progress in the coming years. As in the past, Anu Labs will work closely with all its customers and endeavour to improve both volume and revenue growth. In all its addressable markets, your Companys good reputation and reliability, profound understanding of the products and expertise in customer service shall be further leveraged to improve the competitiveness and ma rket share. The forward plans are to work to accomplish a compounded annual growth rate of 28% over the next three years.

Drivers for growth will be through manufacture of active ingredients at the JNPC facility and ramping up of volume of existing products at both the Shadnagar and Nitya facilities in 2010-11. The acquisition of assets at the Pydibhimavaram facility and with modernisation and expansion through capital investments is expected to contribute to production volumes and revenues in early 2011. While all facilities will add to volume and revenues in 2010-11, the full benefits are likely to be visible in 2011-12.

In the ultimate analysis, the strategic aim of your Company is to achieve profitable growth and increase shareholder value while keeping business risks under control.

RESEARCH & DEVELOPMENT

The Company has incurred an expenditure of ?6.99 million on research and development during the year.

DIRECTORS

Mr. M. S. S. V. Satyanarayana, Director of the Company, has been appointed as Wholetime Director of the Company effective from August 14, 2010. Approval of the Members for his appointment is being sought and forms part of the Notice of the ensuing 14th Annual General Meeting of the Company to be held on September 30, 2010.

In terms of the provisions of Sections 255 and 256 of the Companies Act, 1956 Mr. O.M. Kejriwal and Dr. K. Rajeswara Rao will retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Their re-appointments are proposed in the Notice convening the 14th Annual General Meeting of the Company.

Mr. N. S. Walimbe, Wholetime Director of the Company has resigned from the Board of the Company effective from July 27, 2010. Your Board is grateful to him for his contribution to the growth and development of Anu Labs during his tenure with the Company.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 your Directors confirmed that:

i. in the preparation of the accounts for the financial year ended March 31, 2010, the applicable accounting standards have been followed and there were no material departures;

ii. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates which are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

iii. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the Directors have prepared the accounts for the financial year ended March 31, 2010 on a going concern basis.

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of Corporate Governance. As required under Clause 49 of the Listing Agreement with the Stock Exchange, a Report on Corporate Governance as well as Auditors Certificate on the Compliance of Corporate Governance are annexed and form part of the Annual Report.

With a view to strengthen the Corporate Governance framework, the Ministry of Corporate Affairs has issued a set of Voluntary Guidelines in December 2009 for adoption by companies. Your Company is already complying with various requirements of the guidelines and has initiated appropriate action for compliance.

IPO UPDATE

Your Company had successfully concluded an Initial Public Offer during the financial year 2008-09 to fund the project at the Jawaharlal Nehru Pharma City, Visakhapatnam to venture into production of active pharmaceutical ingredients (APIs) and intermediates. During the year under review, your Company has commissioned the plant and commenced production on March 25, 2010. A brief summary of the utilization of the IPO proceeds as on March 31, 2010 is given below:

Rs Million

As per Prospectus Actuals

Setting up a new plant at Vizag for manufacture of drug intermediates under progress 550.90 433.80

Setting up of pilot plant for carrying out CRAMS at Vizag under progress 83.44 5.00

Long term working capital requirements 166.70 166.70

General corporate purposes 41.49 41.49

Issue expenses 79.66 79.40

MANAGEMENT DISCUSSION AND ANALYSIS

A separate section titled Managements Discussion and Analysis Report forms part of this Annual Report.

AUDITORS

The Statutory Auditors of the Company, M/s. Karumanchi & Associates, Chartered Accountants, Hyderabad retire at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. The Company has received a letter from them to the effect that their appointment, if made, would be within the prescribed limits under Section 224(1 Bj of the Companies Act, 1956.

FIXED DEPOSITS

The Company has not invited/accepted deposits from the public within the meaning of Section 58A of the Companies Act, 1956.

PARTICULARS OF EMPLOYEES

During the year under review, the Company maintained the cordial relations with the employees. Information as per Section 217( 1 )(e) read with Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1998 and forming part of reoort for the year ended March 31, 2010 are as follows:

Name Designation Salary Nature of

Rs Million duties

Mr. K. Hari Babu Managing 7.33 Management

Director of the Company

Mr.G.V.R.Nagesh Vice President 2.40 Head and

- Operations Incharge of

Operations

Qualification Date of Age Last

and commencement (Yrs) Employment

experience of employment

Mr. K. Hari Babu Chartered Re-appointed 54 Suven

Accountant Managing Director Pharmaceutical:

and 29 years effective from Limited

of experience April 1, 2007

Mr.G.V.R.Nagesh M.Sc April 16, 2009 47 Wanbury and 21 years Limited

of experience



ACKNOWLEDGEMENT

Your Directors wish to place on record their gratitude for the valuable support and co-operation extended by the Karur Vysya Bank Limited, Jammu & Kashmir Bank Limited, Andhra Pradesh State Financial Corporation, IDBI Bank Limited, State Bank of India, ING Vysya Bank Limited and several departments of state and central government as well as the vendors to the Company. The customers of your Company have been encouraging and have inspired your Company to produce some of the best quality products. Your Board is grateful and shall always work harder to reciprocate their trust.

Your Directors also wish to place on record their sincere appreciation of the contribution made by the employees of the Company and are thankful to the shareholders for their continued patronage and support.





For and on behalf of the Board



Hyderabad

August 14, 2010 M. Ajaya Kumar

Chairman