Directors Report of Ankur Drugs & Pharma Ltd.

Mar 31, 2011

Dear Shareholders,

The Director's present before you the Seventeenth Annual Report on the business and operations together with the Audited Statement Accounts of the Company for the year ended March 31,2011.

I. FINANCIAL RESULTS [Rs in Lacs]

For the Year ended For the Year ended Particulars March 31, 2011 March 31, 2010

Total Income 82,578.00 1,06,939.74

Earnings before Depreciation, Interest and Tax 13,427.19 21,418.21 Less:

Depreciation 6,079.70 2,663.98

Interest and other Financial Charges 10,926.97 8,074.98

Exchange Difference on Foreign Currency Loans - [1,543.06]

Provision for Premium on Redemption of FCCBs 1,097.07 343.72

Write Back of Excess Provisions made for Diminution in value of Investments - [121.43]

PROFIT/[LOSS] BEFORE TAX: [4,676.55] 12,000.02 Less:

Provision for Current Tax - 1,705.36

Provision for Deferred Tax 2,063.18 1,201.39

Tax for earlier years 141.07 475.51

PROFIT/[LOSS] AFTER TAX: [6,880.80] 8,617.76

Surplus brought forward from Previous Year 13,261.95 10,157.38

Amount Available for Appropriation Total 6,381.15 18,775.14

APPROPRIATIONS :

Proposed Dividend on Equity Shares - 435.19

Tax on Proposed Corporate Dividend - 78.00

Transfer to General Reserve - 5,000.00

Surplus carried over to Next Year 6,381.15 13,261.95

Total 6,381.15 18,775.14

YEAR IN RETROSPECT

During the year 2010-11, the total income of the Company for the year under review was Rs 82,578.00 Lacs as against Rs 1,06,939.74 Lacs in the previous year a decline of 22.78%. The Company incurred a Net loss of Rs 68,80.80 Lacs as compared to a Net Profit of Rs 8,617.76 Lacs during the previous year. The net loss is mainly on account of higher interest & finance charges, depreciation and other provisions to the extent of Rs 18,103.74 Lacs compared to Rs 9,418.19 Lacs in the previous year.

II. DIVIDEND

In view of the Loss incurred during the year your Directors do not recommend any dividend for the year ended March 31,2011.

III. APPROPRIATION

An amount of Rs 68,80.80 Lacs was appropriated from profit and loss account to set off the net loss for the year under review.

IV. CHANGE IN REGISTERED OFFICE

The registered office of the Company was shifted to C-306, Crystal Plaza, Andheri Link Road, Andheri [W], Mumbai - 400 053, w.e.f September 01,2011

VI. ALLOTMENT OF EQUITY SHARES

During the year under review the Company has neither increased its Share Capital nor has issued any shares.

VII. LISTING OF SHARES

Your Company's Equity Shares continue to be listed on The Bombay Stock Exchange Limited and The National Stock Exchange of India Limited. The annual listing fee for the year 2011-12 has been duly paid to both the Stock Exchanges.

VIII. PUBLIC DEPOSITS

During the year under review the Company has accepted deposits of Rs 2,531.66 Lacs from the public within the meaning of section 58A of the Companies Act, 1956

IX. DIRECTORS

In accordance with the provision of the Companies Act, 1956 and the Company's Articles of Association, Mr. Dileep Shinde, retires by rotation at the ensuing Annual General Meeting, and being eligible offers himself for re-appointment. His re-appointment forms part of the Notice of the Annual General Meeting and the resolution is recommended for your approval.

Mr. Clifton Zimmermann, Non Executive Director-Independent, resigned on June 27, 2011 due to pre-occupation. His resignation was accepted by the Board of Directors with immediate effect. The Board places on record its deep appreciation of the valuable services rendered by Mr. Clifton Zimmermann during his tenure as the Director of the Company.

Mr. Ramesh B. Batham has been appointed as an Additional Director on the Board of the Company with effect from October 14,2010. In terms of section 260 of the Companies Act, 1956, Mr. Ramesh Batham holds office upto the date of the ensuing Annual General Meeting. Further a notice has been received from a member of the Company in pursuance of Section 257 of the Act, proposing the candidature of Mr. Ramesh Batham for Directorship of the Company. His appointment as a Director of the company liable to retire by rotation forms part of the Notice of the Annual General Meeting and the resolution is recommended for your approval.

X. AUDITORS

M/s M.G.Vashi & Co, Chartered Accountants, Firm Registration No. 128557W Statutory Auditors of the Company who retire at the ensuing Annual General Meeting and are eligible for re-appointment and have expressed their willingness to accept office if re- appointed. The Company has received confirmation from them that their re-appointment, if made, would be within the limits prescribed under Section 224[1-B] of the Companies Act, 1956, and that they are not disqualified for such re-appointment within the meaning of section 226 of the said Act. Your Directors' recommend their re-appointment.

The observation of the Auditors' under sub clause No. xi and No. xvii of para 3 of the Annexure to Auditors' Report is self-explanatory.

XI. INDUSTRIAL RELATIONS

The industrial relations continue to be cordial and harmonious at all the three manufacturing units of the Company.

XII. CORPORATE GOVERNANCE

In terms of corporate governance disclosures as required by Clause 49 of the listing agreement, details are provided in this report as Annexure II. The certificate from the Company's Auditors confirming the compliance of conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges is also annexed.

XIII. RELATED PARTY DISCLOSURES

The Company has made disclosures in compliance with the Accounting Standards on related party disclosures as required by Clause 32 of the listing agreement with the Stock Exchanges.

XIV. DIRECTORS' RESPONSIBILITY STATEMENT

[As per amended Section 217[2AA] of the Companies Act, 1956] The Board of Directors of the Company confirms:

a. that in the preparation of Annual Accounts, the applicable Accounting Standards have been followed and there has been no material departure;

b. that they have selected such Accounting Policies and applied them consistently and made judgments and estimates that 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 under review and for the Profit and Loss account for that period;

c. that 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; and

d. that the attached Annual Accounts for the year ended March 31,2011 are prepared on going concern basis.

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

[A] Conservation of Energy and Technology Absorption

Particulars as 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, 1988 are given in the Annexure I to this report Employed None of the other employees of the Company are in receipt of remuneration in excess of the limits prescribed under Section 217 [2A] of the Companies Act, 1956 read with Companies [Particulars of Employees] Rules, 1975.

XVII. ACKNOWLEDGEMENTS

The Directors take this opportunity to place on record their appreciation for the continued trust and confidence reposed in the Company by the bankers, business associates, regulatory authorities, customers, vendors, shareholders and employees at all levels.

Registered Office : For and on behalf of the Board of Directors

C-306, Crystal Plaza, Andheri Link Road, Andheri [West], Mumbai-400053. Purnandu Jain Date : September 03, 2011 Chairman and Managing Director

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Mar 31, 2010

The Directors are pleased to present the Sixteenth Annual Report on the business and operations together with the Audited Statement Accounts of the Company for the year ended March 31, 2010.

FINANCIAL RESULTS [Rs. in Lacs]

For the Year For the Year ended ended Particulars March 31, March 31, 2010 2009

Total Income 1069,39.74 968,25.65

Earnings before Depreciation, Interest and Tax 214,18.21 182,17.65 Less :

Depreciation 26,63.98 20,66.68

Interest and Finance Charges 80,74.98 54,10.32

Exchange Difference on Foreign Currency Loans [15,43.06] 26,13.06

Provision for Premium on Redemption of FCCBs 3,43.72 20,93.89

Provision for Diminution in value of Investments / [Write Back of Excess Provision] [1,21.43] 1,42.06

PROFIT BEFORE TAX : 120,00.02 58,91.64 Less :

Provision for Current Year Tax 17,05.36 7,40.75

Provision for Deferred Tax 12,01.39 14,39.16

Prior Period Adjustments 4,75.51 [0.91]

PROFIT AFTER TAX : 86,17.76 37,12.64

Surplus brought forward from Previous Year 101,57.38 89,45.30

Amount Available for Appropriation Total 187,75.14 126,57.94

APPROPRIATIONS :

Proposed Dividend on Equity Shares 4,35.19 4,27.85

Tax on Proposed Corporate Dividend 78.00 72.71

Transfer to General Reserve 50,00.00 20,00.00

Surplus carried over to Next Year 132,61.95 101,57.38

Total 187,75.14 126,57.94



OPERATIONS

The Company concluded the year 2009-10 with an impressive all time high performance. The Company has emerged stronger with higher sales and profitability. Sales / income from operations [Net] increased to an all time high of Rs. 1069,39.74 Lacs compared to Rs 968,25.65 Lacs in the previous year registering a growth of 10.45%. Earning before depreciation, interest and tax is ` 214,18.21 Lacs as compared to ` 182,17.65 Lacs in the previous year- an improvement of 17.57% over the previous year. The profit after tax is Rs 86,17.76 Lacs as compared to profit of Rs 37,12.64 Lacs in the previous year. The increase in profitability was partially on account of write back of provisions of Rs. 1543.06 Lacs on exchange difference as against provision of Rs. 2613.06 Lacs in corresponding previous year as also on account of higher

provisions for premium on redemption of FCCBs in the previous year. The Earning Per Share [EPS] improved to Rs 44.56 per Equity Share in the year 2009-2010 as compared to EPS of Rs 19.94 per Equity Share in the previous year.

The Company has embarked upon Capital Expenditure for the two units in the state of Himachal Pradesh to take benefit of the Industrial Package available in the state. The Industrial Package was culminating on March 31, 2010 but it was expected to be extended for a further period of at least one year. However when no positive signals were available till January 2010 the Company having made substantial investments had to expedite the balance spending before March 31, 2010 to take advantage of the various benefits. Since no term loans were tied up for the same, the Company had to commit internal accruals and also part of the short term funds to complete the Capital Expenditure. In view of the above development, the Company has experienced some liquidity crunch which is expected to be eased in the current year.

DIVIDEND

The Board of Directors are pleased to recommend a dividend of Rs 2.25 per Equity Share of Rs` 10 each [22.5%] for the year ended March 31, 2010 subject to approval of shareholders in Annual General Meeting . The dividend if approved, at the Annual General Meeting will be tax free in the hands of the shareholders. The payment of dividend will entail a cash outflow of Rs` 513.19 Lacs including dividend distribution tax of Rs` 78.00 Lacs .

RESERVES

The reserves at the end of the year were Rs` 337,94.03 Lacs up from Rs` 243,01.36 Lacs at the beginning of the year.

MACRO ECONOMIC INDUSTRY STRUCTURE AND DEVELOPMENT

The fiscal year 2009-10 began on a difficult note. The growth rate of the gross domestic product (GDP) in 2008-09 was 6.7%. Yet, over the span of the year, the economy posted a remarkable recovery, not only in terms of overall growth figures but, more importantly, in terms of certain fundamentals, which justify optimism for the Indian economy in the medium to long term. The real turnaround came in the second quarter of 2009-10 when the economy grew by 7.9 %. Allowing for factors beyond the reach of domestic policymakers, such as the performance of the monsoon and rate of recovery of the global economy, the Indian GDP can be expected to grow around 8.5 [+/- 0.25 % ] with a full recovery, even breaching the 9 % mark in 2011-12.

OVERVIEW

During the year under review, on a quarter to quarter basis we have consolidated our operations by increasing production capacity of all the products that we manufacture. All the three manufacturing units of your Company have become more efficient and as a result of economies of scale, the average cost of production has started decreasing steadly . During the year under review, there has been addition to the Gross Block including Capital Work-in-Progress of Rs 179,45.89 Lacs. The manufacturing units of your Company in Himachal Pradesh conform to international cGMP standards and comply with all the regulatory requirements. Your Company has been successful to tie-up with five major pharma companies out of which four are pharma MNCs for whom we have started manufacturing high value products on contract basis.

Your Companys top most priority is “safety first” and follows strict environmental norms to establish itself as a leader in its chosen field. Your Company has already reached the productivity level comparable to the best globally.

OUTLOOK

A stringent price control regime exists in developed markets and of late, there has been increased pressure from the US Federal government on Pharmaceutical Companies to bring down their drug prices. Not just that; with several patents expiring in a phased period and generics occupying the place of several patented drugs, large Companies face tremendous pressure on margins. The need to bring down the R&D expenditure is thus being felt acutely in developed markets.

Against this backdrop, more and more companies are outsourcing manufacturing to countries like India, which offer a slew of advantages. Apart from the relatively low development cost and skilled manpower, the easy availability of raw materials at competitive prices makes India attractive. The Indian pharmaceutical sector manufactures more than 400 bulk drugs belonging to several therapeutic segments. Bulk drug production recorded a CAGR of 20% over the last 10 years. On the export front, formulations account for as much as 50% of the total pharmaceutical exports from India. With several players in the fray and fiercely competitive market, it has been possible to produce pharma products in India at lower costs. Additionally, the capabilities are also growing. India has the unique distinction of having maximum number of US FDA approved plants outside US.

Your Company is a known name in the business of contract manufacturing of pharma formulations in various dosage forms. The manufacturing facilities have now extended the scope of alliance with almost all pharma multinationals operating in India. Our contract manufacturing facility is cGMP Certified and can fulfill all contract manufacturing needs of our trade associates. Your Company is now fully geared to not only meet but also exceed our customers expectations.

ALLOTMENT OF EQUITY SHARES

During the year under review, the Company has allotted 7,26,199 Equity Shares out of which [a] 4,00,000 Equity Share of Rs 10 each at a premium of Rs 165 per Share on May 12, 2009 on account of conversion of 4,00,000 Equity Share Warrants. [b] 3,26,199 Equity Shares of Rs 10 each on November 13, 2009 on conversion of US $ 1 million FCCBs [1000 Bonds of US $ 1000 each] at a rate of Rs 165 per share out of the balance of US $ 9 million FCCBs outstanding at the beginning of the year.

During the year out of the total 21,24,400 Equity Share Warrants allotted on September 5, 2007; 17,24,400 Equity Share Warrants were forfeited on May 12, 2009 on account of non-exercise of the right of conversion into Equity Shares, by the Equity Share Warrant holders and consequent non payment of the amount due on conversion by them as per the terms of issue of Equity Share Warrants.

LISTING OF SHARES

Your Companys Equity Shares continue to be listed on The Bombay Stock Exchange Limited and The National Stock Exchange of India Limited. The annual listing fee for the year 2010-11 has been duly paid to both the Stock Exchanges.

PUBLIC DEPOSITS

The Company has not accepted deposits from the public within the meaning of section 58A of the Companies Act, 1956 and as such no amount of principal or interest was outstanding on the date of the Balance Sheet.

DIRECTORS

In accordance with the provision of the Companies Act, 1956 and the Companys Articles of Association, Dr. Clifton Zimmermann, retires by rotation at the ensuing Annual General Meeting, and being eligible offers himself for re-appointment. His re-appointment forms part of the Notice of the Annual General Meeting and the resolution is recommended for your approval.

AUDITORS

M/s. M. G. Vashi & Co., Chartered Accountants, Firm Registration No. 128557W Statutory Auditors of the Company who retire at the forth coming Annual General Meeting are eligible for re-appointment and have expressed their willingness to accept office if re-appointed. The Company has received confirmation from them that their re-appointment, if made, would be within the limits prescribed under Section 224[1-B] of the Companies Act, 1956, and that they are not disqualified for such re-appointment within the meaning of section 226 of the said Act. Your directors recommend their re-appointment.

INDUSTRIAL RELATIONS

The industrial relations continue to be cordial and harmonious at all the three manufacturing units of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report as required under the listing agreement with The Bombay Stock Exchange Limited, Mumbai and The National Stock Exchange of India Limited, Mumbai is annexed as Annexure II forming part of this report.

CORPORATE GOVERNANCE

In terms of corporate governance disclosures as required by Clause 49 of the listing agreement, details are provided in this report as Annexure III. The certificate from the Companys Auditors confirming the compliance of conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges is also annexed.

CODE OF BUSINESS CONDUCT

As prescribed by the listing guidelines of the Stock Exchanges, the Board has framed a "Code of Conduct" for the Board Members and Senior Management. The said code has been implemented. A declaration by the Chairman and Managing Director affirming compliance with the code of conduct is also annexed.

RELATED PARTY DISCLOSURES

The Company has made disclosures in compliance with the Accounting Standards on related party disclosures as required by Clause 32 of the listing agreement with the Stock Exchanges.

DIRECTORS RESPONSIBILITY STATEMENT

[As per amended Section 217[2AA] of the Companies Act, 1956] The Board of Directors of the Company confirms:

1. that in the preparation of Annual Accounts, the applicable Accounting Standards have been followed and there has been no material departure;

2. that they have selected such Accounting Policies and applied them consistently and made judgments and estimates that 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 under review and for the Profit and Loss account for that period;

3. that 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; and

4. that the attached Annual Accounts for the year ended March 31, 2010 are prepared on going concern basis.

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

[A] Conservation of Energy and Technology Absorption

Particulars as 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, 1988 are given in the Annexure I to this report.

[B] Foreign Exchange Earned and Used [ Rs.in Lacs ]

Particulars 2009-2010 2008-2009

Earned 1.58 209.89

Used 4682.97 5485.69

PARTICULARS OF EMPLOYEES

[Information as per Section 217 [2A] [b] [II] read with Companies [Particulars of Employees] Rule, 1975]

Date of Remuneration Name Age Designation Employment [Incl. P.F. & Other Benefits] Rs. in Lacs

Mr. Purnandu Jain 46 Chairman Aug. 23, 2003 188.16 years & M D

Mr. Girraj 41 Wholetime April 02, 2006 25.92 Vijayvargiya Years Executive Director

Mr. Asraf Hossain 52 President - April 18, 2007 50.00 years Technical

Mr. Jayesh Trivedi 52 Chief July 4, 2008 48.00 years Operating Officer

Mr. Shantilal 55 General April 1, 2008 39.00 Jagetia Years Manager - Marketing



Previous Name Qualification Experience Employment

Mr. Purnandu Jain B. Com, FCA 20 Years Self Employed

Mr. Girraj B. Com, FCA 16 Years Self Vijayvargiya Employed

Mr. Asraf Hossain M. Pharm. 27 Years Montajat Vet. Pharma Ltd., Dammam, Saudi Arabia

Mr. Jayesh Trivedi M. Pharm. 31 Years Ranbaxy Laboratories Limited

Mr. Shantilal B. Com. 31 Years Self Jagetia Employed

None of the other employees of the Company are in receipt of remuneration in excess of the limits prescribed under Section 217 [2A] of the Companies Act, 1956 read with Companies [Particulars of Employees] Rules, 1975.

ACKNOWLEDGEMENTS

The Directors take this opportunity to place on record their appreciation for the continued trust and confidence reposed in the Company by the bankers, business associates, regulatory authorities, customers, vendors, shareholders and employees at all levels.

Registered Office : For and on behalf of the Board of Directors

20th Floor, Lotus Business Park,

Off. Andheri Link Road,

Andheri [West], Mumbai - 400 053.

Purnandu Jain

Date : September 01, 2010 Chairman and Managing Director