Directors Report of Ashco Niulab Industries Ltd.

Mar 31, 2012

TO THE MEMBERS

The Directors present the Twenty Sixth Annual Report together with the Audited Statement of Accounts of company for the six months period 1st October, 2011 to 31st March, 2012.

OPERATIONS

The sales and Other Income of the company for the period six months ended 31st March, 2012 were Rs.2155.38 lacs as compared to Rs.12246.84 lacs for the previous year (eighteen months ended). The net profit / (loss) for the period six months ended (Rs.699.40) lacs as compared to (Rs. 1252.77) lacs for the previous year (Eighteen months ended).

The Company posted Cash Loss (Rs.400.96) lacs and Net Loss of (Rs. 699.40) lacs was arrived at after deducting Depreciation.

DIVIDEND

Your Directors do not wish to recommend any dividend for the financial year and six months ended 31st March, 2012.

EXTENSION OF ANNUAL GENERAL MEETING OF THE COMPANY:

The Annual General Meeting of the company has been extended by three months, by virtue of the approval of jurisdictional Register of Companies, Mumbai, Maharashtra, Hon''ble Ministry of Corporate Affairs dated 5th September, 2012 in pursuance of the application made by the company with the Registrar of Companies under Section 166 (1) of the Companies Act, 1956 in this regard.

The 26th Annual General Meeting of the Company was further extended by one month by virtue of the approval of jurisdictional Registrar of Companies, Mumbai, Maharashtra, Hon''ble Ministry of Corporate Affairs dated 27th December, 2012, in pursuance of the application made by the company with Registrar of Companies under Section 166 (1) of the Companies Act, 1956 due to sickness of Chairman & Managing Director, so the Annual General Meeting could not be held in the calendar year 2012.

FUTURE OUTLOOK:

India has billion plus population and a home for various life threatening diseases. These factors provide an opportunity for global medical practitioners and healthcare providers to consider India as an effective destination for research and clinical studies. India has registered fast growth in the number of clinical trials over the past few years, reflecting that the country has become one of the most attractive destinations for medical research.

According to our new research report, "Booming Clinical Trials Market in India", the number of clinical studies by domestic and global players has sharply risen. The M&A activities, service agreements, and strategic collaboration have increased over the last four years. The majority of the deals in the contract research organizations market focused on establishing strategic alliances with other contract research organizations, technology providers, and pharmaceutical and biotech companies. In addition, on the back of favorable government support and effective regulatory mechanism provided by the ICMR and CDSCO, healthcare providers find it worthwhile to locate their trials in India.

DEPOSITS

The company has not invited or accepted any Public Deposits during the year.

SUBSIDIARY COMPANY

Your company has a 100% Subsidiary company abroad under the name and style Ashco Niulab FZE at Hamariaya Free Zone Authority UAE. As per approval granted by the Ministry of Corporate Affairs vide circular No. 02/2011 dated February 8, 2011, copies of the Balance Sheet, Profit and Loss Account, Report of the Board of Directors and Auditors of the Subsidiary company are not being attached to the Balance Sheet of the Company. The Annual Accounts of the subsidiary company and related detailed information relating to that will be made available to shareholders at the registered office of the company at any point of time.

STATUTORY INFORMATION

Information in accordance with the provisions of section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, requiring disclosure of particulars regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo given in the prescribed format is annexed hereto (Annexure-I) and forms part of this report.

PARTICULARS OF EMPLOYEES

In accordance with the provisions of section 217(2A) of the Companies Act, 1956 and the Rules framed thereunder, (Including any amendment, reenactment and modification thereof) and read with circular issued by Hon''ble Ministry of Corporate Affairs in this regard, there is no employee in the company who if employed throughout the financial year was in receipt of remuneration for that year which, in aggregate was not less the sum prescribed for.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 & also Company''s Articles of Association of the company Mr. Shashin Rajnikant Shah, Director retires by rotation.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 2000, the Directors confirm that:

1. in the preparation of the annual accounts, the applicable Accounting Standards have been followed with proper explanation relating to material departures;

2. appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true & fair view of the state of affairs of the company as at 31st March, 2012 and of the loss of the company for the financial year and six months ended on that date;

3. proper and sufficient care has been taken 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 & detecting fraud & other irregularities;

4. the annual accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE REPORT

A detailed compliance report on Corporate Governance is provided elsewhere in the Annual Report. Practicing Company Secretary''s Certificate on Compliance with the conditions of Corporate Governance under clause 49 of the Listing Agreement is also provided in the Annual Report.

AUDITORS'' REMARKS

The observations made by the Auditors with reference to Notes to the Accounts for the year under report are self-explanatory and need no further comments from the Directors.

AUDITORS.

GMJ & Co., Chartered Accounants the Auditors of the Company retire at the conclusion of this Annual General Meeting and are eligible for re-appointment.

ACKNOWLEDGMENTS

Your Directors place on record their appreciation of the valuable co-operation and support of Customers, Shareholders, Company''s Bankers, and Government Authorities. The Board also wishes to express its appreciation to all the employees of the company for their contribution to the operations of the company during the year.

For and on behalf of Board

ASHOAK KOTWAANI

CHAIRMAN & MANAGING DIRECTOR

Registered Office:

"Lab House", Plot No. F-13,

Opp. SEEPZ, M. I. D. C.,

Andheri (East), Mumbai – 400 093

Date: 5th January, 2013

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Mar 31, 2010

The Directors have the pleasure of presenting the Twenty Fourth Annual report of your Company for the Financial Year 2009-10 together with Audited Accounts, Auditors Report for the year ended 31st March, 2010.

FINANCIAL RESULTS & HIGHLIGHTS

The summary of operating result for the year 2009-10 and appropriation of divisible profit is given below:

Rs. In Lacs

2009-10 2008-09

Sales and Other Income 8235.42 7925.37

Less: Expenses 7613.51 7376.72

PBDT 621.91 548.66

Less : Tax Expenses

Current Tax 140.00 138.00

Deffered Tax (28.20) (51.15)

FBT 18.45

Profit Before Depreciation/ Cash profit 510.11 443.36

Less : Depreciation and

Amortisation of goodwill 613.94 581.31

Net Profit/(Loss) (103.83) (137.96)

Less : Prior Period Expenses - 0.24 Short Provision for Income Tax 28.21 -

Add: Balance Profit Brought forward from previous year 311.41 449.60

Balance available for Appropriation 179.37 311.41

Surplus Carried to Balance Sheet 179.37 311.41 OPERATIONS

The sales and Other Income of the company for the financial year 2009-10 were Rs. 8235.42 Lacs as compared to Rs. 7925.37 Lacs for the previous year. The Net Profit (Loss) for the year is Rs. (103.83) Lacs as compared to Rs. (137.96) Lacs for the previous year. The Directors are hopeful of better results in the current year.

The Company posted cash profit of Rs. 510.11 Lacs and net loss of Rs. 103.83 Lacs was arrived at after deducting Depreciation and amortisation of Goodwill from the Cash Profit/ Profit Before Depreciation.

DIVIDEND

Your Directors do not wish to recommend any dividend for the year 2009-10.

ISSUE OF FURTHER CAPITAL BY ISSUE OF ADR/GDR/ FCCB/QIP

With the growth of Clinical Research activity in India, the company is in the process of raising capital from international markets vide ADR/GDR/FCCB/QIP up to the tune of USD 25 Million in order to finance capital expenditure, modernization, acquisitions, diversification, general corporate purposes and working capital requirements and also to retire costly short term debts, if possible.

Out of the above, the company has already raised USD 9,998,732 through the issue of Global Depository Receipt by virtue of shareholders resolution passed by Postal Ballot as on 24th November, 2009 and the Company allotted 337,795,000 Equity Shares of Re. 1 each (Offering at Rs. 1.35 each) in the name of Bank of New York, Mellon, 101 Barclay Street, New York. New York 10286 USA, the Depository representing 6,755,900 Global Depository Receipts (GDRs) and amount raised thereby not yet repatriated. The remaining USD 15 Million may be raised by the company as per requirement in coming months / year.

The GDRs issued by overseas depository are listed and traded in EURO MTF market of the LUXEMBOURG STOCK EXCHANGE

CONSOLIDATION & INCREASE OF AUTHORISED CAPITAL.

The Company converted and consolidated the unissued 1000, 15% Preference Shares of Rs. 100/- each in the Authorised Share Capital of the company into 10000 Equity Shares of Rs. 10/- each. The authorised share capital of the company was increased from present Rs.40 Crores to Rs.100 Crores in order to facilitate expansion plan by further issue of shares in the form of ADR/GDR/FCCB by creation of 60,000,000 (Six Crores) Equity shares of Rs. 10/- each.

SUB-DIVISION OF SHARE CAPITAL

The Equity share capital of the company was sub-divided from 1 (One) equity share of Rs. 10/- (Ten) each to 10 (Ten) equity shares of Re 1 /- (Rupee One) each in absolute number with effect from 8th December, 2009.

But in the subsequent stage recently the Company has been receiving representation from various shareholders for consolidation of the Share Capital into shares of larger denomination. In view of this the Company has already issued notice of Postal Ballot along with Ballot papers for their assent or dissent to consolidate the share Capital back to Rs. 10/- (Rupees Ten ) per share.

FUTURE OUTLOOK

With the growth of Clinical research activity in India & abroad, the company raised money from the international markets vide ADR/GDR/FCCBS /QIP up to the tune of USD $ 9,998,732. The amount raised thereby has been utilized for the purpose of setting up subsidiary company abroad to help the operation of the Company through marketing in international market.

The Company intends to enter in the area of Formulation Development to cater its Pharmaceutical clients. The same would help the Company in backward integration of existing Bio Equivalence business.

With various approvals coming in from different Countries/ Regulatory Agencies, a plan to set up Formulation Development Centre, and starting of subsidiary company, future outlook of the company is bright.

DEPOSITS

The company has not invited or accepted any Public Deposits during the year.

SUBSIDIARY COMPANY

Your Company has set up 100% subsidiary abroad under the name and style Ashco Niulab FZE at Hamariyah Free Zone, - Shj, UAE in order to cater to the needs of international market. The full effect of the subsidiary company will be visible in the financial result of the year 2010-11 and onwards.

STATUTORY INFORMATION

Information in accordance with the provisions of section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, requiring disclosure of particulars regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo given in the prescribed format is annexed hereto (Annexure-I) and forms part of this report.

PARTICULARS OF EMPLOYEES

In accordance with the provisions of section 217(2A) of the Companies Act, 1956 and the Rules framed thereunder, the names and other particulars of employees are set out in the Annexure to the Directors Report. In terms of the provisions of section 219(1)(b)(iv) of the Companies Act, 1956, the Directors Report is being sent to all the Shareholders of the Company excluding the aforesaid Annexure. The Annexure is available for inspection at the Registered Office of the Company.

Any shareholder interested in obtaining a copy of the said Annexure may write to the Company Secretary & Compliance Officer at the Registered Office of the Company.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 & also Companys Articles of Association of the company Mr. Shashin Rajnikant Shah Director retires by rotation and being eligible of reappointment offers himself for reappointment.

DIRECTORS RESPONSIBILITY STATEMENT

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

1. in the preparation of the annual accounts, the applicable Accounting Standards have been followed with proper explanation relating to material departures;

2. appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true & fair view of the state of affairs of the company as at March 31, 2010 and of the loss of the company for the year ended on that date;

3. proper and sufficient care has been taken 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 & detecting fraud & other irregularities;

4. the annual accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE REPORT

A detailed compliance report on Corporate Governance is provided elsewhere in the Annual Report. Practicing Company Secretarys Certificate on Compliance with the conditions of Corporate Governance under clause 49 of the Listing Agreement is also provided in the Annual Report.

AUDITORS REMARKS

The observations made by the Auditors with reference to Notes to the Accounts for the year under report are self-explanatory and need no further comments from the Directors.

AUDITORS

M/s. GMJ & Co, Chartered Accountants, the Auditors of the company retires at the conclusion of this Annual General Meeting and are eligible for re-appointment.

ACKNOWLEDGMENTS

Your Directors place on record their appreciation of the valuable co-operation and support of Customers, Shareholders, Companys Bankers, and Government Authorities. The Board also wishes to express its appreciation to all the employees of the company for their contribution to the operations of the company during the year.

For and on behalf of Board

ASHOK K. KOTWANI

CHAIRMAN & MANAGING DIRECTOR

Registered Office:

"Lab House", Plot No. F-13,

Opp. SEEPZ, M. I. D. C., Andheri (East),

Mumbai - 400 093

Date : 1st September, 2010