Directors Report of Dr. Datsons Labs Ltd.

Mar 31, 2014

The Members,

The Directors of your Company have pleasure in presenting their Eighth Annual Report together with the Audited Balance Sheet as on 31st March 2014, the related Statement of Profit and Loss for the year ended on that date and the Auditors Report thereon.

- FINANCIAL RESULTS:-

This fiscal has been an exciting year in terms of growth and profitability. To build further on the success achieved by the company we have embarked on increased investments in all aspects. We are confident that these spends will enable us to maintain our growth trajectory into the future.

The Financial Highlights are given below:-

Figures in (Rs.Lacs) 2013-2014 2012-2013

Sales and Other Income 42892.42 52546.43

Earnings Before Interest, Taxes, Depreciation and Amortization 6474.52 6563.78

Less: Depreciation 2044.21 2022.15

Earnings Before Interest and Tax 4430.31 4541.63

Less: Finance Charges 4301.44 4264.50

Profit Before Tax 146.67 4767.76

Prior Period Expenses 17.80 4.43

Exceptional Item 0 4486.20

Less: Provision for Taxation Current Tax 25.78 55.64

Deferred Tax 61.52 222.17

Add: MAT U/S 115JB 25.78 55.64

Net Profit after Tax as carried to Balance Sheet 67.35 54.96

Basic & Diluted Earnings Per Share 0.46 0.40

0.19 0.37

- YEAR IN RETROSPECT:-

- The Company''s Sales decreased from Rs. 52,546.43 Lacs in the previous year to Rs. 42,892.42 Lacs in the current year.

- EBITDA decreased from Rs. 6563.78 Lacs in the previous year to Rs. 6474.52 Lacs in the current year.

- Net Profit After Tax increaded from Rs. 54.96 Lacs in the previous year to Rs. 67.35 Lacs in the current year.

- Debt equity ratio is 0.92 in current year as compare to previous year 1.07.

- Current Ratio is 1.02 in current year as compare to previous year 1.86.

- BUSINESS OUTLOOK:-

Dr. Datsons Labs Ltd, we believe that nothing toughens like the tough times. 2013-14 was a tough year as input cost continued to rise and key segments faced competitive pressures.

The rupee devaluation on account of fiscal challenges in the country resulted in further pushing up the costs. Delay in financial commitments led to deferred timelines and low capacity build-up.

We have undertaken steps to raise equity through sale of Stake so that the company gets in required funding for its Working Capital & Capex Program. We are looking for long term investors who can take forward the legacy of the company

We chose not to stop, but to carry on; not be withered but to persist. Rough seas make better sailors.

At Dr. Datsons we continued to wade through multiple challenges diligently, patiently and persistently. Our investments made over the years into an integrated business model also stemmed the decline.

In wake of growing competition and increased inflation, cost control emerged as the biggest challenge during 2013- 14. We focused on critically analyzing each process and product to clearly identify avoidable elements in the cost structures. This enabled us to improve efficiency, process time and capacity utilization without any compromise on the end product/process quality. We continued to add new clients across all our divisions. We utilized the blend of our competitive cost structures with our global standards in R&D and synthetic chemistry skills to partner large pharma companies for long-term product development. Presently, we have forged four long-term partnerships for our products and derive 37 per cent of our total revenues from these partnerships.

- RESEARCH & DEVELOPMENT:-

A large investment in R&D could dent the bottom line especially when it does not create fresh revenues.

Risk mitigation

The Company created a strong R&D team dedicated to creating new products. The Company filed for more than 20 patents across different countries. Through R&D, the Company pioneered various oral lozenges in India. The Company''s R&D centre has been recognised by DSIR. Government of India

- ENVIRONMENT & SAFETY OUTLOOK:-

Dr. Datsons aggressively pursues safety, health and environment protection as an integral part of its business. The Company strives to minimise the adverse impact of its activities and products on the environment and maintain a safe work place for its team members.

The Company maintains a lawn and garden (shrubs and decorative plants) at its manufacturing units. More than 800 trees were planted over the five years leading to 2012-13.

- Safety and health: Dr.Datsons strives to maintain the highest safety and health standards. The Company received the ISO 14001 (for environment management) and OHSAS 18001:1999 (for safety and health) certifications, vindicating its endeavour of maintaining operating practices in line with international benchmarks; each team member is adequately trained in maintaining these standards. The Company completed all its expansion projects without a single accident. The Company constituted a six-member SHE committee.

- Training on safety: The Company ensures that every team member is capable of handling emergency situations. It organises regular classroom and practical training from government approved agencies.

- Evacuation plan: The Company''s safety programs are based on emergency evacuation plans. The team is kept informed about the updated documents and displays and the facilities are well indicated with assembly points.

- Fire equipment: The Company''s facilities are equipped with sophisticated fire fighting infrastructure. It conducts three mock drills at its facilities annually. Critical areas like general warehouses and finished goods warehouses have smoke sensors with multiple alarms systems.

- Environment: The Company is committed to comply with all applicable legal requirements through continual improvement in operational process for improving its environment measures. The Company does not generate any harmful/chemical wastes; it has a full-fledged effluent treatment plant for processing plant waste. The waste water is recycled for gardening purposes within the complex. All operating practices are based on the principle of efficient utilisation of material and energy The Company practices a policy of substituting hazardous materials and recycling of resources to the maximum extent possible.

- DIVIDEND:-

In order to conserve the resources of the Company for any future expansion, your Board deems fit not to recommend any dividend for the financial year 2013- 2014.

- FIXED DEPOSIT:-

The company has not accepted any fixed deposits during the year under reveiw.

- MANAGEMENT''S DISCUSSION AND ANALYSIS REPORT:-

Management''s Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

- SUBSIDIARY COMPANIES:-

As per general exemption granted vide Government of India, Ministry of Corporate Affairs'' general circular no. 2/2011 dated 8th February, 2011, the Company has not attached the annual accounts of its subsidiaries to this Annual Report. As required by the said circular, the relevant information for each subsidiary has been disclosed in the consolidated financial statements attached to this Annual Report.

The Company will make available the annual accounts of subsidiaries and the related information to any Member of the Company who may be interested in obtaining the same. The annual accounts of subsidiaries will also be kept for inspection by any Member of the Company at the registered office of the Company. The Consolidated Financial Statements presented by the Company include the financial information of its subsidiaries.

Further Statement under Section 212 of the Companies Act, 1956 is enclosed herewith.

- DIRECTORS:-

During the year under review, Mr. Shashikant Shinde retires by rotation and being eligible offers himself for reappointment at the forthcoming Annual General Meeting.

Further Mr. Balkrishna Parab and Dr. Ullooppee Badade resigned as Directors of the Company w.e.f. 24th February 2014.

Further, Mr. Chandulal Shah who was nominated as the

Chairman-Emeritus of the Company stepped down as such w.e.f. 05th April 2014.

The Companies Act, 2013 (the Act) provides for appointment of independent directors. Sub-section (10) of Section 149 of the Companies Act, 2013 (effective from April 1, 2014) provides that independent directors shall hold office for a term of up to five consecutive years on the Board of a company; and shall be eligible for re- appointment on passing of ordinary resolution by the shareholders of the company.

Sub-section (1) states that no independent director shall be eligible for more than two consecutive terms of five years. Sub-section (13) states that the provisions of retirement by rotation as defined in sub-sections (6) and (7) of Section 152 of the Act shall not apply to such independent directors.

The non-executive independent directors were appointed as directors liable to retire by rotation under the provisions of the erstwhile Companies Act, 1956. The Board of Directors has been advised that non executive (independent) directors so appointed would continue to serve the term that was ascertained at the time of appointment as per the resolution pursuant to which they were appointed. Therefore, it stands to reason that only those non-executive (independent) directors who will complete their present term at the ensuing AGM of the Company in September 2014, being eligible and seeking re-appointment, be considered by the shareholders for re-appointment for a term of upto five consecutive years.

Non-executive (independent) directors who do not complete their term at the ensuing AGM, will continue to hold office till the expiry of their term (based on retirement period calculation) and thereafter would be eligible for re-appointment for a fixed term in accordance with the Companies Act, 2013.

Further, Mr. Giridhar Pulleti is appointed as an Independent Director of the Company for a period of five years w.e.f. April 1, 2014 upto March 31, 2019.

- COMPLIANCE OFFICER:-

Mr. Yogesh Patel, an Associate Member of the Institute of Company Secretaries of India is the Company Secretary and Compliance Officer of the Company.

- AUDITORS AND AUDITORS REPORT -

M/s. Agarwal, Desai & Shah, Chartered Accountants, Auditors of the Company retires at the conclusion of this Annual General Meeting and being eligible offers themselves for reappointment.

Auditors Report:

Auditors Report as issued by M/s. Agarwal Desai & Shah, Chartered Accountants is self explanatory and do not call for further clarification by the Board.

- COST AUDITORS:-

Your Board has proposed the appointment of M/s. Aatish Dhatrak & Associates as Cost Auditors of the Company for conducting Cost Audit for the financial year 2014- 2015.

- PERSONNEL:-

The Company considers human resources as its greatest asset and strength in the process of development and progress. In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended by the Companies (Particulars of Employees) Rules, 2011, the names and other particulars of the employees are set out in the Annexure-A to the Directors'' Report.

- DISCLOSURE OF PARTICULARS:-

Information as per the Companies (Disclosure of Particulars on the report of the Board of Directors) Rules, 1988 relating to Conservation of Energy, Technology Absorption, Forex Earnings & Outgo is provided in Annexure B forming part of this report.

- DIRECTORS RESPONSIBILITY STATEMENT: -

Pursuant to the requirement under section 217(2AA) of the Companies Act with respect to Directors Responsibility Statement, it is hereby confirmed.

a. That in preparation of the accounts for the finacial year ended 31st March 2014 the applicable accounting standards have been followed along with proper explanation relating to material departure.

b. That the Directors have selected such accounting policies and adopted them consistently and made judgment and estimates that were reasonable and prudent so As to give a true and fair view of the state of affairs of the Company for the year under the review.

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

d. That the Directors have prepared the accounts for the financial year ended 31st March 2014 on a going concern basis.

- CORPORATE GOVERNANCE:-

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Company has also implemented several best Corporate Governance practices as generally prevalent.

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

The requisite Certificate from the Statutory Auditor confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is attached to this Report.

- LISTING:-

The shares of the Company are listed on the National Stock Exchange of India Limited and Bombay Stock Exchange Limited. The Company has paid the annual listing fees to the NSE and BSE for the year 2014-2015.

- BOARD COMMITTEES:

In Compliance with both the mandatory and non- mandatory requirements under the Listing Agreement and the applicable laws, the Board has maintained the following committees:

(i) Audit Committee

(ii) Shareholders/ Investor Grievance Committee

(iii) Remuneration & Nomination Committee

(iv) Investment Committee

(v) Corporate Governance Committee

(vi) Health, Safety, Environment & Corporate Social Responsibility Committee

- FOREIGN CURRENCY CONVERTIBLE BONDS:

The Company came out with the issue of Foreign Currency Convertible Bonds [FCCBs] aggregating to USD 40 million on 21st March 2013. However, the proceeds of the issue were fully utilized for which issue was made as mentioned in the Offering Circular dated March 21, 2013.

- AUTHORISED CAPITAL:

During the year under review, the authorized share capital of the Company was increased from Rs 50,00,00,000 (Rupees Fifty crores) to Rs. 110,00,00,000 (Rupees One Hundred Ten crores) divided into 11,00,00,000 Equity Shares of Rs. 10/- each.

- ALLOTMENT OF SHARES:-

During the year under review, the Company has allotted 3,94,84,717 equity shares consequent to the conversion notice(s) received from the Bondholder for conversion of the Foreign Currency Convertible Bonds ("FCCB") for total value of US$ 40.00 million at a conversion price of Rs. 55 per share, in accordance with the terms of the Offering Circular dated March 21, 2013 for issue of US$ 40 million unsecured foreign currency convertible bonds and the Supplemental Trust Deed dated February 21, 2014.

Consequently the paid up share capital of the Company has increased from Rs. 13,88,71,510 aggregating 1,38,87,151 equity shares of Rs. 10 each to Rs. 53,37,18,680 aggregating 5,33,71,868 equity shares of Rs. 10 each.

The Company has received approval from BSE Limited and the National Stock Exchange of India Limited for listing and dealing of all the above Equity Shares of the Company.

- ACKNOWLEDGMENT:-

Your Directors would like to express their appreciation for the assistance and co-operation received from Bankers, Govt authorities, customers, and vendors during the year.Your Directors also wish to place on record their deep sense of appreciation for the committed services of Executives, Staff and workers of the company.

We are on the verge of storming both the domestic and international markets with our innovative and specialty products and make a mark globally for the Company. We seek your active cooperation for all our future endeavors to make your Company a leading pharmaceutical Company.

For and on behalf of the Board Dr. KANNAN VISHWANATH PRABHAT GOYAL MANAGING DIRECTOR DIRECTOR

Place: Taloja Date: 14/08/2014

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Mar 31, 2012

The Directors of your Company have pleasure in presenting their Sixth Annual Report together with the Audited Balance Sheet as on 31st March 2012, the related Statement of Profit and Loss for the year ended on that date and the Auditors Report thereon. Financial Results

This fiscal has been an exciting year in terms of growth and profitability. To build further on the success achieved by the Company we have embarked on increased investments in all aspects. We are confident that these spends will enable us to maintain our growth trajectory into the future.

The Financial Highlights are given below (Rs. in Lacs)

2011-2012 2010-2011

Sales and Other Income 48,232.10 32,045.46

Earnings Before Interest, Taxes, Depreciation and Amortization 10,776.17 7,084.25

Less: Depreciation 1,566.49 258.36

Earnings Before Interest and Tax 9,209.67 6,825.89

Less: Finance Charges 2,904.99 1,361.04

Profit Before Tax 6,304.69 5,464.85

Prior Period Expenses 0.06 6.07 Less: Provision for Taxation

Current Tax 1,261.43 1,594.33

Deferred Tax 940.34 263.18

Net Profit after Tax as carried to Balance Sheet 4,102.86 3,601.28

Basic & Diluted Earnings Per Share* 34.42 52.00

*The difference in calculation of EPS is due to Initial Public Offer and preferential share allotment.

Year in Retrospect

- The Company's Sales increased by 50% from Rs.32,025.98 Lacs in the previous year to Rs.47,996.38 Lacs in the current year.

- EBITDA increased by 52% from Rs..7,084.25 Lacs in the previous year to Rs.10,776.17 Lacs in the current year.

- Net Profit After Tax increased by 14% from Rs..3,601.28 Lacs in the previous year to Rs..4,102.86 Lacs in the current year.

- Debt equity ratio improved from 1.03 in the previous year to 0.85 in the current year.

- Total outside Liability to Net Worth improved from 1.19 in the previous year to 1.05 in the current year.

- Current Ratio improved from 1.81 in the previous year to 1.43 in the current year.

Business Outlook

Under challenging conditions the Company has stood up well. We recognized that we need to step up to the plate, build and cement our relationships with customers and were reassured that our customers were supportive of our efforts to enhance our deliverables. We are particularly satisfied when our team responded as a unit to proactively become a learning organization, improve the quality management systems and processes. Aanjaneya has set itself a goal to become a zero-defect company in the foreseeable future. This to our mind was the most reassuring aspect of our journey into maturing as a leading player in the industry. . Many changes stemmed from looking inward at our execution capabilities and examining our service deliveries, and in particular the due date performance. Supply chain initiatives reduced the lead time for delivery from receipt of orders, which in turn lowered the inventory and ultimately made significant improvement in customer relationships. We were on a learning mode and examined processes, costs, yields and productivity. We invested in underlining quality in whatever we do.

Today, Aanjaneya is respected by its customers for our large infrastructure for both APIs and formulations. They also recognise our ability to develop new products and regulatory expertise. They see our potential and appreciate our confidence to compete with the best in the business. They see a large base of competencies and believe that we are capable of becoming a partner of choice, a preferred supplier and a capable collaborator who works for mutual benefit.

Dollar-rupee parity is creating an opposite impact on our financials. A stronger dollar adds to our income and cash. This conundrum needs to be addressed. We shall aggressively drive up the revenues, pare costs, enhance productivity, improve the business mix, lower the gearing and take several other actions to improve the profit after tax. We shall strive to make Aanjaneya the Company of choice for all our stakeholders.

Excellence Awards

In recognition of excellence in Corporate Governance, the following awards have been conferred on the Company:

- India's Most Valuable Company in Corporate Governance, Ethical Practice & Sustainability Vision at 3rd Annual India Leadership Conclave & Indian Affairs Leadership Awards 2012

- The European Award for Best Corporate Governance Practices 2012 in Gold Category by European Society for Ouality Research at Amsterdam

Research & Development

R&D is dedicated to achieve two primary objectives; foster quality product development which meets market demand, and contribute to the bottom line of the Company. The focus areas are:

- Quality by design: In line with regulatory expectations, R&D teams have embraced a quality-by-design approach in product and process development;

- Cost effectiveness: In line with business expectations, R&D emphasises cost consciousness in the increasingly competitive generic market

The R&D teams are integrated into the operations of the business units, both in marketing and manufacturing interface, ensuring product development oriented to market requirements and Customer needs. The time-to- market, the short time it takes between product developments, submission for regulatory approval and post-approval product launch, is a major competitive advantage for Aanjaneya. In a bid to sharpen the focus and lead the business by introducing new processes and products, the R&D function has been consolidated with establishment of a new state-of-the-art Centre for Chemical Research dedicated to API research with additional resources aimed at strengthening the product basket and leading the CRAMS initiative, all under one roof at Mahad.

The existing R&D Centre supplemented with fresh talent is already ramping up oral and lozenges research for formulation products. We therefore have two Centers of Excellence leading the way forward. Research teams are dedicated to identifying opportunities for the oral solids and the Lozenges portfolios. The Ointments & Gels portfolio team has been created for focus on hormonal formulations. Many new products in these categories have been developed and filed or are ready for filing.

The Company now has products ready to be filed in the Lozenges segment.

The core strength of the Company is the ability to convert knowledge into complex chemistry and Molecules and be date driven in building a product portfolio. The team's strength can be better appreciated by the successes in the selection process for products with potential growth in the market, search for synthetic routes which facilitate create non -infringing processes and patents, design processes and purification methods that meet ICH guidelines, ensure regulatory compliance while launching high value products with entry barriers.

The existing approved product portfolio is spread across several dosage forms including tablets, Hormonal gels, Hard Boiled Lozenges, Codeine based Syrups, Ointments Dental creams.

In addition, more than 75 novel formulations in lozenges gels ointments & tablets are under various stages of active development.

During 2011-12, the Company filed more than 60 dossiers in various emerging markets like Haiti, Dominican Republic, Ivory Coast, Kenya, Tanzania, South Africa, Costa Rica, Belize, Peru, Bolivia, Cambodia, Vietnam, Philippines amongst others.

Our R&D team has a long-term perspective and shall continue to sharpen our competitive thrust by working on technologies required to develop new products and processes and ensure that Aanjaneya stays on course to becoming one of the admired regulatory-compliant pharmaceutical companies.

Environment & Safety Outlook

At Aanjaneya, operating profitably is as important as safeguarding the ecological basis of life and achieving a balance. The cornerstone of sustainable business development in the long-term includes the competitive creation of value in manufacturing as well as preservation of natural resources in a responsible and human-friendly work environment. The Company has pursued forward- looking environmental policies involving foresighted and prudent use of available natural resources in its operations.

The product portfolio is comprised of products manufactured from safe raw materials with high utilization and low wastage. There is considerable effort made to recycle materials and save water, energy and fuels.

To create a more secure work environment for our employees, a few concrete steps were initiated to proactively identify process safety issues and resolve them, including the following:

- Process risk analysis in API units;

- Re-HAZOP of all processes in API units;

- Activity-based risk assessment for non-process activities (warehouse, engineering, QC) in both API and formulation units;

- Devise specific handling procedures for hazardous chemicals with training on those procedures;

- Process safety testing: determination of thermal conductivity of all powders and flammability of powders which are not conductive;

- Review of layouts and P&ID for new projects before finalization. Presently, the following steps have been initiated to improve our review and auditing process:

- Examination of processes involving hazardous raw materials and critical chemistry by senior management;

- Inter plant safety audits - where safety personnel from one unit audits another unit

- Monthly review of EHS along with the operations team;

- Appointment of a world-class consultant to evaluate the safety management system and give directions to bring about a cultural and attitude change towards safety;

- Creation of departmental safety committees to ensure participation of employees in lower cadre in safety communication and propagation;

- HS alert system, in which significant EHS incidents and learning from those are shared across all units of Aanjaneya.

Improving our environmental performance and raising awareness of our commitment is a key element of our value chain. We believe higher standards in providing safety, ensuring protection, reducing wastage; minimizing consumption of natural resources and caring for the future are all as much good economics as they are in adding to our sustainable growth. Better relations with the customers and society and earning their trust should ultimately reflect in the balance.

Dividend

Your Directors are pleased to recommend dividend @20% [i.e. Rs..2/- per share] on the paid up equity capital of the Company for the year ended 31st March 2012.

The dividend will be paid to members whose names appear in the Register of Members as on September 03, 2012; in respect of shares held in dematerialized form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners as on that date.

Capital and Finance

The paid up share capital of the Company has increased from Rs.757.67 Lacs to Rs.1388.72 Lacs. The Company issued 13,10,484 shares of Rs.10/- each at a premium of Rs.486.00 per share to Apex Drugs & Intermediates Ltd. aggregating to Rs.6500.00 Lacs for consideration other than cash in March 2012.

During the year under review, the Company is enjoying working capital limit to the tune of Rs.12,500 lacs from Bank of Baroda Canara Bank, Corporation Bank Oriental Bank of Commerce, Punjab national bank & UCO Bank, Rs.7,000 Lacs as working capital demand loan from State Bank of Hyderabad , J& K Bank, Bank of India and Allahabad Bank. And Letter of Credit of Rs.1500 lacs from J&K Bank.

Capex

The Company is in process of completing the capex & refurbishment of Mahad and Pune facilities with funds raised from IPO Proceeds.

Acquisition of Assets of Apex Drugs Intermediaries Limited (ADIL):-

The Company is in the process of acquiring the assets of ADIL. Acquisition of assets of ADIL would be contributing substantially to the expansion program of the business of ALL. Some of The broad reasons for the same are:

- With Acquisition of manufacturing facilities, business & employees of ADIL , ALL would become fully integrated pharma company with presence in entire value chain

- Acquisition of business of ADIL would save time to procure clearness like environmental clearness which takes on an average two years. The acquisition could give access to the market of Hyderabad to the Company.

- Product portfolio would be widened by ADIL's API business if Aids/ HIV, Diabetes Ace inhibitors and CNS which would have taken 3-4 years time had ALL replicated the same.

- Entry into tender based business where volume will drive the Company's top line. ALL's dependence on third party for pricing and supply would decline to a large extent.

- With acquisition of business clients of ADIL, ALL will be to cross-sell products to ADIL's customer base.

- In monetary terms. Company would be able to sell 40% of the APIs into formulations and formulations sales would be 3x the API sales.

Fixed Deposit

The Company has not accepted any fixed deposits during the year under review.

Management's Discussion and Analysis Report

Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

Subsidiary Company

The Company has made investment in Eros Pharmachem Pte. Ltd., a Singapore based Company to the extent of 90% by acquiring its ordinary share capital, thus making it the subsidiary of our Company.

Further Statement under Section 212 of the Companies Act, 1956 is enclosed herewith.

Directors

During the year under review, Mr. Giridhar Gopal Pulleti and Mr. Shashikant Shinde retire by rotation and being eligible offer themselves for reappointment at the forthcoming Annual General Meeting.

Further Mr. Kashi Vishwanathan retired as the Chairman & Director of the Company w.e.f. 10th April 2012 as per the terms and condition of Code of Conduct under ambit of HR policy of the Company, but taking into consideration his vast experience and knowledge in the Pharmaceutical Industry, was nominated as Chairman-Emeritus of the Company.

Further, Mr. Minhaj Khan was appointed as an Additional

Director of the Company w.e.f. 11th June 2012 and is eligible for reappointment at the forthcoming Annual General Meeting and whose period of office is liable to retirement by rotation.

Compliance Officer

Mr. Yogesh Patel, an Associate Member of the Institute of Company Secretaries of India was appointed as the Company Secretary and Compliance Officer of the Company w.e.f. 08/10/2011.

Auditors and Auditors Report

M/s. Agarwal Desai & Shah, Chartered Accountants, Auditors of the Company retires at the conclusion of this Annual General Meeting and being eligible offers themselves for reappointment.

Auditors Report

Auditors Report as issued by M/s. Agarwal Desai & Shah, Chartered Accountants is self explanatory and do not call for further clarification by the Board.

Cost Auditors

Your Board has proposed the appointment of M/s. Shriram & Co as Cost Auditors of the Company for conducting Cost Audit for the financial year 2012-13.

Personnel

The Company considers human resources as its greatest asset and strength in the process of development and progress. In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended by the Companies (Particulars of Employees) Rules, 2011, the names and other particulars of the employees are set out in the Annexure-A to the Directors' Report.

Disclosure of Particulars

Information as per the The Companies (Disclosure of Particulars on the report of the Board of Directors) Rules, 1988 relating to Conservation of Energy, Technology Absorption, Forex Earnings & Outgo is provided in Annexure B forming part of this report.

Directors Responsibility Statement

Pursuant to the requirement under section 217(2AA) of the Companies Act with respect to Directors Responsibility Statement, it is hereby confirmed.

a. That in preparation of the accounts for the financial year ended 31st March 2012 the applicable accounting standards have been followed along with proper explanation relating to material departure.

b. That the Directors have selected such accounting policies and aopted them consistently and made judgment and estimates that were reasonable and prudent so As to give a true and fair view of the state of affairs of the Company for the year under the review.

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

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

Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Company has also implemented several best Corporate Governance practices as generally prevalent.

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

The requisite Certificate from the Practicing Company

Secretary confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is attached to this Report.

Listing

The shares of the Company are listed on the National Stock Exchange of India Limited and Bombay Stock Exchange Limited. The Company has paid the annual listing fees to the NSE and BSE for the year 2012-2013.

Board Committees

In Compliance with both the mandatory and non- mandatory requirements under the Listing Agreement and the applicable laws, the Board has constituted the following committees:

(i) Audit Committee

(ii) Shareholders/ Investor Grievance Committee

(iii) Remuneration Committee

(iv) IPO Committee

(v) Investment Committee

(vi) Corporate Governance Committee

(vii) Nomination Committee

(viii) Human Resource Management Committee

(ix) Project Appraisal Committee

(x) Risk Management Committee

(xi) Financial Management Committee

(xii) Business Development Committee

(xiii) Health, Safety, Environment & Social Responsibility Committee

Acknowledgment

Your Directors would like to express their appreciation for the assistance and co-operation received from Bankers, Govt authorities, customers, and vendors during the year. Your Directors also wish to place on record their deep sense of appreciation for the committed services of Executives, Staff and workers of the Company.

We are on the verge of storming both the domestic and international markets with our innovative and specialty products and make a mark globally for the Company. We seek your active cooperation for all our future endeavors to make your Company a leading pharmaceutical Company.

For and on behalf of the Board

Dr. Kannan Vishwanath Shashikant Shinde

Managing Director Whole time Director

Place: Mumbai

Date: 13/08/2012

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Mar 31, 2011

The Members,

The Directors of your Company have pleasure in presenting their Fifth Annual Report together with the Audited Balance Sheet as on 31st March, 2011, the related Profit and Loss Account for the year ended on that date and the Auditor's Report thereon.

Financial Results:-

This fiscal has been an exciting year in terms of growth and profitability.To build further on the success achieved by the Company we have embarked on increased investments in all aspects. We are confident that these spends will enable us to maintain our growth trajectory into the future.

The Financial Highlights are given below-

Figures in (Rs. Lacs)

2010-2011 2009-2010

Sales and Other Income 32,045.46 16,219.78

Profit before Depreciation, Interest 7,078.18 2,977.03 and Tax

Depreciation 258.36 87.88

Interest 1,361.04 603.65

Profit after Depreciation and Interest 5,458.78 2,285.50

Provision for Tax 1,857.50 777.73

Net Profit after Tax 3,601.28 1,507.77

Balance B/f from previous years 2,250.33 742.56

Balance transferred to Balance Sheet 5,851.61 2,250.00

- YearinRetrospect:-

The Companies Sales increased by 98% from Rs. 16,167.15 Lacs in the previous year to Rs. 32,025.98 Lacs in the current year. EBITDA increased by 138% from Rs. 2,979.63 Lacs in the previous year to Rs. 7,084.25 Lacs in the current year. PAT increased by 139% from Rs. 1,507.77 Lacs in the previous year to Rs. 3,601.28 Lacs in the current year. EPS increased from Rs. 30.34 in the previous year to Rs. 52.00 in the current year. Debt equity ratio improved from 1.00 in the previous year to 0.92 in the current year. Total outside Liability to Net Worth improved from 1.59 in the previous year to 1.12 in the current year.

- Business Outlook:-

Our Company's business strategy is to be a vertically integrated with presence in bulk drug manufacturing, intermediate drugs and finished dosage forms. The assets recently acquired at Mulshi, Pune engaged in the business of formulations/ FDFs has helped us to contract manufacture of lozenges, syrups and ointment/gels/creams. This acquisition gives us access to tap the potential of the formulation business thereby making us an integrated player with presence in the entire value chain in the pharmaceutical industry. The unit, is GMP certified and is spread over an area of 6,430 sq. mts. at Mulshi, near Pune.

Our Company's present product portfolio consists of second generation, quinine based anti malarial APIs and third generation artemisinin based anti malarial APIs, niche APIs and FDFs. With the expansion of the existing facility and the acquisition of the formulation unit at Pune, our Company's product portfolio will consist of APIs and FDFs which shall be marketed in domestic and international markets as branded generics. In finished dosages, we will cover important therapeutic segments such as anti malarial, pain management, erectile dysfunction and hormone replacement therapy, anti obesity and herbal supplements in syrup and tablet form amongst others. Our herbal formulations are for cough and cold, liver protection, throat congestion and osteoporosis. Presently we are supplying our APIs, niche API's and FDFs both domestically and international.. In our formulation segment, as contract manufacturer, we supply to companies like Wockhardt, Cipla, Glenmark etc. In our own branded generic segment, we are offering products like Anjtil, Rankorex, DoktorQure, Prosils, LivChek, Herbal Drops and Esyhil.

Further, in 2011, we have also launched products like Aanrich, Actipros, Ulsacare, Apticatch, Anjeniya Curcumacare, and Nicco-nil amongst others.

We have an established R&D centre at our existing facility at Mahad and Pune, Maharashtra. Through the proceeds of the Issue, we propose to expand our R&D centre at Mahad and Pune, Maharashtra. Our R&D centre is focused on improving the existing processes of drug development and reducing the production time and cost. Our Company intends to develop products for the oncology segment in its portfolio.We have set up a dedicated small R&D block in Mahad, Maharashtra for manufacturing highly potent anti cancer product from 100 grams to 500 grams.., and are in the process of setting up a separate facility for manufacturing anti cancer APIs .At present, we have 5 patents registered and 5 patents applied in the name of our Company in India, further, we have also acquired rights for 3 patent applications filed for improved and non infringing process for producing anti cancer APIs namely Gemicitabine Hydrochloride, Capacitabine and Docetaxel which are yet to be granted.

At our company, success is measured in terms of customer satisfaction and quality that is built into every product. The value of commitment to quality is also cherished by each of our 261 staff members and is consciously upheld by a network of approximately 130 distributors. We have entered into a management consultancy services agreement dated June 26, 2010 with Rx Pharma India for availing their services for sales management, marketing, and logistics to market our products.

Further, we have a trading license from the Food and Drug Administration, Maharashtra for buying and selling of bulk drugs and FDFs. We propose to outsource oncology APIs and FDFs from various companies till our new facilities are commissioned at Pune.

- Excellence Awards

The Company received the Best Green Business Award at the emerging India awards presented by ICICI Bank .CNBCTV-18 &CRISIL at Macau in November 2010

Dr Kannan Vishwanath received the Young Entrepreneur Award for Business excellence at the International Achievers Summit for Global Business at Singapore organized by Singapore India chamber of commerce on 24th June 2011

The Company has Featured within "Top 100 Best Companies in India" to Work with in Study Conducted by Economic Time & Great Place to Work with 2011.

- Research & Development

Your Company's research and development (R&D) activities are focused on developing new products and new non-infringing processes, as well as maintaining and improving the quality of the existing products. Research is also being carried out on risk characterization, patenting new process patents, creating a framework for ensuring regulatory compliance and for understanding the future needs of the markets. Efforts are on to launch a focused program of 'Quality by Design' to ensure and improve assurance standards in processes and products. Risk reduction such as developing technologies that have the potential to ensure valence and conform to regulatory requirements is a central part of the R&D program. Aanjaneya's strength is its research based chemistry capabilities and expertise in developing dosage forms that meet compliance standards and market needs. On an on-going basis, your Company continues to invest in high-end talents to identify new products and non-infringing processes and improve process controls. During the year under review, the R&D Centre filed 7 Patents Further, 10 more patent applications covering improved processes for various active pharmaceutical ingredients and pharmaceutical compositions are being filed.

- Environment & Safety

Your Company places considerable emphasis on its commitment and responsibility towards the health and safety of its employees as well as on its environmental footprint. Considerable care is taken to not only meet the regulatory standards, but also to become best-in-class in the pharmaceutical industry.

Large investments have been made in competent and experienced supervisory human resources, state-of-the-art hardware, latest technologies, updated systems and processes and focused training of employees. Site visits were made by the supervisory teams to familiarize themselves and train to get a hands-on understanding of the international practices.

The team at Aanjaneya is upgrading the facilities to implement a comprehensive safety improvement and capacity building program.

On the environmental front, some of the initiatives taken during the year include:

- establishing environmental management infrastructure across all units;

- streamlining the process of disposal of certain categories of hazardous wastes through alternate destruction and reuse technologies;

- promoting and encouraging innovative emerging technologies of water treatment; and

- progressing towards achieving zero liquid discharge.

We have built rain harvesting systems with Underground tanks of 6.5 lac litres & 10.5 lac litres capacity in both to units so that dependence on MIDC water is reduced.

- Dividend:-

With a view to plough back profits in the business, directors do not recommend any dividend forthe year under review and profit after tax is carried forward to next year to augment Reserves.

- Capital and Finance:-

The paid up share capital of the company has increased from Rs. 577.67 Lacs to Rs. 757.67 Lacs pursuant to issue of 18 Lacs equity shares of Rs. 10 each at a premium of Rs. 260 per share to Kannan Vishwanath in August 2010 aggregating to Rs. 4,860.00 Lacs. The sum of Rs. 4,680.00 Lacs has been credited to share premium account. The Outstanding Term loans from State Bank of India, Shamrao Vithal Co-op Bank Ltd, IDBI Bank Ltd & Corporation Bank stood at Rs. 4,165.30 lacs as at 31st March, 2011. The working capital limit stood at Rs. 8,169.65 Lacs from State Bank of India, Shamrao Vithal Co-op Bank Ltd, IDBI Bank Ltd, Corporation Bank & Allahabad Bank.

- Capex:-

The Company is undertaking capital expenditure program at its Mahad and Pune Plants. The Capital WIP on this account stands at Rs. 4,668.29 Lacs as on 31st March, 2011.

As regards assets purchased from Prophyla Biologicals Private Limited during the last fiscal ended 31st March, 2010 for Rs. 2,742.20 Lacs (net of VAT Rs. 153.62 Lacs) totalling to Rs. 2,895.82 Lacs. The Company had made part payment of Rs. 992.06 lacs during the year ended 31th March, 2010. The balance payment of Rs. 1903.76 lacs has been made to the vendor during the year under report.

- Fixed Deposit.-

The Company has not accepted any Fixed deposits during the year under reveiw.

- Holding Company:-

The Company is a subsidiary of Aasda Lifecare Limited (formerly Finaventure Capital Limited) during the year under report. The Holding Company holds 73.25% shares of the Company as at 31st March, 2011. However effective 20th May, 2011 the Company ceased to be the subsidiary of Aasda Lifecare Limited. Name of Aasda Lifecare Limited has been again changed back to Finaventure Capital Limited w.e.f 7th June, 2011 as no pharmaceutical business will be undertaken by the said company.

Name Change

During the year under review, the name of the Company has been changed from AANJANEYA BIOTECH LIMITED to AANJANEYA LIFECARE LIMITED and the Registrar of Companies, Mumbai, Maharashtra issued a fresh certificate of incorporation consequent upon change of name w.e.f. June 19,2010.

- Initial Public Issue-(IPO):-

The Company came out with its Initial Public Offering (IPO) of 50,00,000 Equity shares of the face value of Rs. 10/- each at a price of Rs. 234/- (including share premium of Rs. 224/) per Equity share aggregating to Rs. 11,700 Lacs constituting 39.76 % of the fully diluted post issue paid up capital of the Company which was opened for subscription to QIB bidders, Retail individual bidders and Non- Institutional bidders from 9th May 2011 to 12th May 2011 . The issue was fully subscribed and allotment to the respective applicants were made on 20th May, 2011 in consultation with the Authorized Representatives of the designated Stock Exchange viz - Bombay Stock Exchange Limited. The entire issued, subscribed and fully paid up share capital comprising 1,25,76,667 equity shares of Rs. 10 each are listed on the National Stock Exchange of India Limited and The Bombay Stock Exchange Limited as per the in-principle approval dated 24th December, 2010 and 28th October, 2010 respectively received from the said Stock Exchanges.

Pursuant to the aforesaid IPO Finaventure Capital Limited (formerly Aasda Lifecare Limited) ceased to be the Holding Company of Aanjaneya Lifecare Limited consequent to dilution in its shareholding to 44.13% of the post issue paid up capital of the Company.

- Subsidiary Companies-

The Company has no subsidiary company.

- Directors:-

During the year under review, Dr. Ullooppee Badade and Mr. Balkrishna Parab retires by rotation and being eligible offer themselves for reappointment at the forthcoming Annual General Meeting.

Further, Mr. Paul Naythatil was appointed as an Additional Director of the Company and is eligible for reappointment at the forthcoming Annual General Meeting and whose period of office is liable to retirement by rotation.

Also Mr. Kalidas Patel resigned from the Directorship of the Company in the current financial year. Change of Chief Financial Officer (CFO) & Company Secretary (CS)

Mr. Sumant Khedekar resigned from the post of Company Secretary & Compliance Officer of the Company on 6th July, 2011 and Mrs. Harleen Sahni was appointed as a Company Secretary & Compliance Officer w.e.f. 7th July, 2011.

Also, during the year under review, Mr. Mani Iyer resigned from the post of CFO & Mr. Lalit Shukla was appointed as 'President-Accounts & Finance'

- Auditors and Auditors Report:-

The Company has received a requisition by a Member of the Company, to appoint a partnership firm - M/s.Agarwal, Desai & Shah , Chartered Acccountants, Mumbai as the new Statutory Auditors of the Company in place of retiring Auditors viz. M/s. Sunil Mistry & Co., Chartered Accountants from the conclusion of the forthcoming Annual General Meeting till the conclusion of the nextAnnual General Meeting.

Auditors Report:

Auditors Report as issued by M/s. Sunil Mistry & Co., Chartered Accounatnts is self explanatory and do not call for further clarification by the Board.

- Disclosure of Particulars:-

Informatrion as per the The Companies (Disclosure of Particulars on the Report of the Board of Directors) Rules, 1988 relating to Conservation of Energy, Technology Absorption, Forex Earnings & Outgo is provided in Anexure"A" forming part of this Report.

- Personnel:-

The Company considers human resources as its greatest asset and strength in the process of development and progress. Information as per the provisions of Section 217(2A)of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975 as amended is not applicable to the Company as none of the employees comes within the ambit of said Rules.

- Directors Responsibility Statement-

Pursuant to the requirement under section 217(2AA) of the Companies Act with respect to Directors Responsibility Statement, it is hereby confirmed.

a. That in preparation of the accounts for the finacial year ended 31st March, 2011 the applicable accounting standards have been followed along with proper explanation relating to material departure.

b. That the Directors have selected such accounting policies and adopted them consistently and made judgment and estimates that were reasonable and prudent so As to give a true and fair view of the state of affairs of the Company for the year under the review.

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

d. That the Directors have prepared the accounts for the financial year ended 31st March, 2011 on a going concern basis.

- Acknowledgment:-

At the outset, your Directors would like to express their appreciation and deep sense of gratitude for the faith reposed by the Shareholders to the Company by giving a good response to the recently concluded IPO of the Company.

Your Directors further would like to express their appreciation for the assistance and co-operation received from Bankers, Govt authorities, customers, vendors during the year. Your Directors also wish to place on record their deep sense of appreciation for the committed services of Executives, Staff and workers of the Company.

We are on the verge of storming both the domestic and international markets with our innovative and specialty products and make a mark globally for the Company. We seek your active cooperation for all our future endeavors to make your Company a leading pharmaceutical Company.

SD/-

Place: Mumbai For and on behalf of the Board

Date: 25/08/2011 K. Vishwanathan - Chairman