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Directors Report of Caplin Point Laboratories Ltd.

Mar 31, 2016

The Directors present their 25th Annual Report on the business and operations of the Company and the accounts for Nine Months/ Financial Year ended March 31, 2016.

FINANCIAL HIGHLIGHTS

Rs. In Lakhs except EPS

PARTICULARS STANDALONE FOR THE PERIOD CONSOLIDATED FOR THE ENDED PERIOD ENDED

Nine Months Twelve months Nine Months Twelve Months March, 31 2016 June, 30 2015 March, 31 2016 June, 30 2015

Sales (net of excise duty) and other Income 23,476.54 24,297.20 24,238.13 25,479.92

Profit before Finance Costs, Tax, Depreciation 6,578.70 5,930.49 6,764.00 6,199.84 & Amortisation Expenses

Less: Finance Costs 10.82 22.79 11.02 23.04

Depreciation & Amortisation Expense 729.91 827.92 747.78 837.93

Profit Before Tax 5,837.97 5079.78 6005.20 5,338.87

Less: Tax Expenses 1,305.41 986.22 1428.28 1,226.22

Profit after Tax 4,532.56 4,093.56 4,576.92 4,112.65

Less : Minority Interest - - 0.43 8.96

Add: Surplus at the beginning of the year 6,281.81 3555.81 6237.80 3,501.64

Profit available for Appropriation 10,814.37 7,649.37 10814.29 7,605.33

Less: Transfer to General Reserves - 409.39 - 409.36

Interim Dividend 377.75 - 377.75 -

Final Dividend proposed 528.85 755.50 528.85 755.50

Dividend Tax - Current Year 184.56 153.80 184.56 153.80

Adjustment on account of Depreciation, Net - 48.87 - 48.87 of taxes etc

Deferred employee compensation expenses 153.75 - 153.75 -

Balance carried to Balance Sheet 9,569.46 6281.81 9,569.38 6,237.80

Paid up Capital 1511.00 1511.00 1,511.00 1,511.00

Reserves & Surplus 11,302.85 7,852.40 11,302.77 7,808.39

Networth 12,440.47 8990.02 12,440.39 8946.01

Earnings per Share-In Rupees 29.99 27.09 30.28 27.16

CHANGE IN FINANCIAL YEAR

The Companies Act 2013, requires every Company to have uniform period of April to March as its Financial Year . Accordingly, the Audited Financial Statements (Standalone & Consolidated) for the current financial year have been prepared for the period of nine months commencing from July 01, 2015 and ending on March 31, 2016. All the current financial year data provided in this Directors Report is for the period of Nine months only.

PERFORMANCE/OPERATIONS REVIEW

The Company has on standalone basis registered total revenue from operations of Rs.23129.22 Lakhs during the financial year (Nine Months) under review as against Rs.24022.80 Lakhs in the previous financial year of twelve months. The Profit after tax was Rs.4532.56 lakhs during the financial year (Nine months) under review as against Rs.4093.56 Lakhs in the previous financial year of twelve months .

The Company has made a consolidated turnover of Rs.23872.17 Lakhs during the current financial year(Nine Months) as against Rs.25176.98 Lakhs in the previous financial year of 12 months.

As required under Section 134(3)(i) of the Companies Act,2013 the state of Affairs of the Company and outlook has been discussed in Management Discussions and Analysis with is appended in this annual report pursuant to Regulation 34(2) of SEBI ( Listing Obligations and Disclosure Requirements) Regulations,2015.

DIVIDEND

The Board of Directors of the Company at their Board meeting held on February 05,2016, declared an Interim Dividend of Rs.2.50 per share (25 %) involving cash outflow of Rs.454.66 lakhs and the same was paid to the shareholders on February 25,2016.Now your Directors are pleased to recommend a Final Dividend of Rs.3.50 per share (35%) . This together with the Interim Dividend aggregates to a sum of Rs.6 per share (60%) for the FY 2015-16 , involving a total cash outflow (both Interim & Final) of Rs.1091.16 lakhs including Dividend Distribution Tax.

The Board of Directors at their meeting held on August 05,2016 have proposed sub-division of equity shares into equity shares of lower face value.

TRANSFER TO RESERVES

The Company has made no transfers to reserves during the Financial Year 2015-16

SUBSIDIARIES

During the year, no company became or ceased to be a subsidiary of the Company. The Company has one subsidiary LLP (i.e) Argus Salud Pharma LLP

The consolidated financial results/ performance incorporating the financial statements of the above subsidiary LLP is attached to the annual report as required under the Accounting Standards and SEBI Regulations.

Further, a statement containing the salient features of the financial statements of our subsidiary pursuant to Section 129(3) of the Companies Act, 2013, in the prescribed Form AOC-1 is appended as Annexure I to the Board''s report.

DEPOSITS

The Company has not accepted any fixed deposits form the public.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Particulars of loans, guarantees and investments as on March 31,2016 are given in the Note No.12 to the standalone financial statements.

NUMBER OF MEETINGS OF THE BOARD

The Board met four times during the year ended March 31,2016 which were held on 20.08.2015, 05.11.2015, 05.02.2016 and 17.03.2016.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Based upon the recommendation of the Nomination and Remuneration Committee, the Board of Directors at their meeting held on February 05,2016 have re-appointed Dr. R Ravichandran (DIN: 01920603) as an Independent Director for a Second term of Five year commencing from May 12,2016 and he is not liable to retire by rotation and Mr. M Jayapal (DIN :0186977) was re-appointed as the Whole- time Director of the Company w.e.f. March 28.2016 for a period of one year.

Mr. D P Mishra (DIN : 02032818) term of office as a Whole-time Director expired on April 30.2016 and has not sought re-appointment as a whole-time Director. However, he continues to be a Director on the Board w.e.f. May 01,2016 and necessary resolution was passed by the Board of Directors of the Company for the Change in Designation.

In terms of Section 152 of the Companies act, 2013, Mr. C C Paarthipan (DIN :01218784) retires by rotation and being eligible offers himself for re-appointment.

During the year under review, Mr. P T Baby Thomas, Director (DIN :03019018) resigned from the Board with effect from December 20,2015. The Board places on record the appreciation and gratitude for the guidance and contribution during his association with the Company.

Further to the resignation of Mr. Harihara Ponnambalam as the Chief Financial Officer of the Company w.e.f. February 18,2016, Mr. D Muralidharan was appointed as Chief Financial Officer of the Company effective February 19,2016.

As on date, Dr. Sridhar Ganesan, Managing Director, Mr. M Jayapal, Whole-time Director, Mr. D Muralidharan, Chief Financial Officer and Mr. Vinod Kumar S, Company Secretary are the Key Managerial personnel''s of the Company.

DECLARATION BY INDEPENDENT DIRECTORS

The Independent Directors of the Company have submitted their declaration as required pursuant to Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as stipulated in Section 149(6) of the Companies Act, 2013.

EXTRACT OF ANNUAL RETURN

As required pursuant to Section 134 (3) (a) of the Companies Act, 2013, an extract of Annual Return in the prescribed Form MGT 9 is given as Annexure II to this Directors'' Report.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of Section 134(5) of the Companies Act, 2013, the Directors confirms that:

a. In the preparation of the annual accounts,the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

b. The Directors had 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 as at March 31,2016 and of the Profit of the Company for that period;

c. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. The Directors had prepared the annual accounts on a going concern basis;

e. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

f. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

NOMINATION AND REMUNERATION COMMITTEE (NRC) AND ITS POLICY

The Nomination and Remuneration Committee is empowered to authorize and exercise the power as specified in section 178 of the Companies Act, 2013. The Company has a policy on Directors appointment and remuneration including the criteria for determining the qualification, positive attributes and independence of a Director and other matters as provided under section 178(3) of the Companies Act,2013. The Nomination and Remuneration Committee policy is annexed in Annexure III of the Directors report.

MATERIAL CHANGES AND COMMITMENTS

There were no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

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

Pursuant to Section 134 (3)(m) of the Companies Act,2013 read with in Rule 8 (3) of the Companies (Accounts) Rules, 2014 particulars of conservation of energy, technology absorption, foreign exchange earnings and outgo, as are given as Annexure IV to this Directors'' Report.

ANNUAL EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Pursuant to the provisions of Section 134(3)(p) the Companies Act, 2013 and Schedule V of the Companies Act, 2013 the Board had carried out performance evaluation of its own, of the Board Committees and of the Independent Directors.Independent Directors at a separate meeting evaluated performance of the Non-Independent Directors, Board as a whole and of the Chairman of the Board. The outcome of the evaluation process were satisfactory, which resulted in the active engagement of the Board and committees in the Company,

Further the Directors are regularly informed and familiarised during the Board Meetings about the activities of the Company and its operations, products and its development and latest trends in the pharmaceutical industry and issues faced in the industry,

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Pursuant to the provisions of section 135 of the Act, read with CSR Rules, the Company has constituted Corporate Social Responsibility Committee based upon the recommendation of the CSR committee the Board of Directors have approved CSR Policy,

Disclosure under Companies (Corporate social responsibility policy) rules, 2014 is annexed as an Annexure V to this report.

AUDIT COMMITTEE

The Composition of the Audit Committee, meetings of the Audit Committee and their terms of reference of the Audit committee have been disclosed separately in the Corporate Governance Report which is annexed and forms a part of this annual report.

INTERNAL FINANCIAL CONTROLS

The Company has designed and implemented adequate financial control systems with respect to the financial statements. During the year under review, no serious / adverse observation have been received from the Internal Auditors of the Company with respect to ineffectiveness or inadequacy of such controls.

VIGIL MECHANISM

The Company has established a vigil mechanism, through a Whistle Blower Policy, where Directors and employees can voice their genuine concerns or grievances about any unethical or unacceptable business practice. A whistle- blowing mechanism not only helps the Company in detection of fraud, but is also used as a corporate governance tool leading to prevention and deterrence of misconduct .It provides direct access to the employees of the Company to approach the Compliance Officer or the Chairman of the Audit Committee, where necessary. The Company ensures that genuine Whistle Blowers are accorded complete protection from any kind of unfair treatment or victimization. The Vigil mechanism policy is disclosed on the website of the Company i.e (www.caplinpoint.net)

AUDITORS

STATUTORY AUDITORS

Pursuant to Section 139 of the Companies Act, 2013, M/s. CNGSN & Associates LLP Chartered Accountants, Chennai, were appointed as Auditors of the Company at the Twenty Third Annual General Meeting of the Company for a consecutive period of three years commencing from conclusion of 23rd Annual general Meeting. The Company has received a certificate from the statutory auditors to the effect that ratification of their appointment, if made, would be in compliance with the requirements of the Companies Act, 2013 and the rules made there under. Accordingly, the Audit Committee and the Board of Directors have recommended to ratify their appointment as Statutory Auditors of the Company for the financial year 2016-17.

A resolution seeking ratification of their appointment forms a part of the Notice convening the 25th Annual General Meeting and the same is recommended for shareholders approval.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Board of Directors of the Company appointed M/s. G Ramachandran & Associates, Company Secretaries, Chennai to conduct the secretarial audit of the Company The Secretarial Audit Report (Form MR - 3) is given as Annexure VI to this Directors'' Report.

CORPORATE GOVERNANCE

Pursuant to Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance is given separately which form a part of this Annual report.

LISTING AGREEMENTS

The Company has entered into new Listing Agreement with BSE Limited and National Stock Exchange of India Limited as per the regulation 109 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Company has paid the listing fees for the year 2016-17 to the Stock exchanges where the shares of the Company are listed.

RISK MANAGEMENT

The Board has designed and framed risk management approach through which it identifies and manages the risk parameters. The senior level management periodically reviews the risk parameters through which key business risk are identified and addressed. A brief report on the Risk Management are referred in the Management Discussion and Analysis Report which forms a part of the Annual Report.

EMPLOYEE STOCK OPTION PLAN

Details as required under Rule 12 (9) of Companies (Share Capital and Debentures) Rules, 2014 and as required to be provided under the SEBI Guidelines as on March 31, 2016 are set out in Annexure VII to this Report

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Particulars pursuant to Section 197(12) of Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed in the Annexure VIII to this Directors report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All the related party transactions which were entered during the Financial year under review were on arms length basis and in the normal course of Business. There were no Material significant related party transactions made by the Company with its promoters, Directors, Key Managerial Personnel which may have potential conflict with the interest of the Company at large. No Material Contract or arrangements with the related party were entered during the Financial year under review. All the related party transactions are reviewed by the Audit Committee . The required disclosures as per Accounting Standards 18 are made in the Notes to Accounts of the Financial Statements. Particulars of transactions with the related parties, in prescribed form AOC -2 is enclosed as an Annexure IX of this Directors Report.

The related party transaction policy has been uploaded on the website of the Company (www. caplinpoint.net)

DISCLOSURES

1. There has been no change in the nature of business of the Company during the year under review.

2. During the year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and company''s operations in future.

3. During the Financial year 2015-16, none of the employees were in receipt of the remuneration pursuant to Section 197(12) of Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

4. There were no complaints filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

5. Neither the Managing Director nor the Whole- time Directors of the Company receives any remuneration or commission from any of its subsidiaries

6. The Report of the Statutory Auditors (Which Forms a Part of this Annual Report) and the Report of the Secretarial Auditor (Which is Annexed to this Directors Report) are Self explanatory having no adverse remarks/ comments or disclaimer

ACKNOWLEDGEMENT

The Board of Directors wishes to place on record their sincere appreciation to the customers, suppliers, business partners and group companies and shareholders for their support. The Directors would like to thank the Bankers and financial Institutions as well. The Directors would take this opportunity to express their appreciation for the dedicated efforts of the employees and their contribution which is deeply acknowledged FOR AND ON BEHALF OF THE BOARD

Place : Chennai C C PAARTHIPAN

Date : August 05,2016 CHAIRMAN


Jun 30, 2014

Dear Members,

The Directors present their Twenty Third Annual Report and the Audited Financial Statement for FY 2013-14. As required under the Ministry of Corporate Affairs' General Circular 08/2014 No. 1/19/2013-CL-V dated April 4, 2014, the Financial Statements and other reports required to be attached to the Annual Report for FY 2013-14 are governed by the relevant provisions, schedules, rules of the Companies Act, 1956.

Director 's Report

FINANCIAL RESULTS

The Company's financial performance, for the year ended June 30, 2014 is summarised below:

Rs. in Lakhs except per share date

Standalone for the year ended 30th

2014 2013

Saha (net of excise duty) and other Income 16.973.55 12.44Q.55

Profit before Finenw costs, Tax, Depreciation 3,693.57 2,327.10 & Amortisation Expenses

Less Finance costs 111.84 30.06 12.26

DaniwMai & Anwllgalon Expenses 343.89 145.32

Profit Before Tax 3.337.94 2,151,60

Less TaxEnjerrees 774,40 721.15

Profit after Tax 2.S63J54 1430.65

less: monorty interst 842 3.77075

Add: surpius at the beglnning ofthe year 2.057.61 1.21639

Profit avaliab,e for Approprialien 4,621.05 2.647.54

LesstTfaitsferfotjenaai Ftewrwe 340.00 160.00

Transfer from other reaserves 3,555.81 3501.64

paid up capital 1,61100 1.51.51

Reserves &Sumlus 4.717,00 2670.73

nwtworth 6.228.00 6.175

Earnings per Share 16.97 9.47

ConSOlidatod for the year ended 30th June

2014 2013

Saha (net of excise duty) and other Income 176S2.37 12.91266

Profit before Finenw costs, Tax, Depreciation & Amortisation Expenses 3,934.97 2,396.29

Less Finance costs 12.26 30.24

DaniwMai & Anwllgalon Expenses 353.63 154.03 Profit Before Tax 3669.06 2.21463 Less TaxEnjerrees 976.80 811,69 Profit after Tax 2,693.28 1.402.14 less: monorty interst

Add: surpius at the beglnning ofthe year 1,962.02 1.17366 Profit avaliab,e for Approprialien 4.55638 2,572.05 LesstTfaitsferfotjenaai Ftewrwe 340.00 150.00

Transfer from other reaserves 604.40 377.75

paid up capital 120.00 1.511.00

Reserves &Sumlus 4,662.86 2,803.24

networth 6173.86 4314.24

Earnings per Share 17.11 9.28

RESULTS OF OPERATION

India's economic growth rate rose to 4.7% in FY2014 from 4.5% in FY2013.The Global operating environment improved considerably in FY2013-14, as economic activity strengthened.

India tops the world in exporting generic medicines worth US$ 11 billion. Currently, the Indian Pharmaceutical industry is one of the world's largest and most developed. Generics will continue to dominate the market while patent - protected products are likely to constitute 10 per cent of the pie till 2015, according to Mc.Kinsey report'India Pharma 2015- Unlocking the potential of Indian Pharmaceuticals market'.

On Standalone basis, the Company achieved a revenue of Rs. 16,973.52 Lacs as compared to Rs. 12,440.52 Lacs in previous year and the Standalone operating profit before finance costs, depreciation & tax was Rs.3,693.67 Lacs as compared to Rs. 2,327.18 Lacs in previous year. Your Company achieved a growth of 36.43% in revenue and 58.71% in operating profit as compared to the previous year.

On Consolidated basis, the Company achieved a revenue of Rs. 17,682.37 Lacs as compared to Rs. 12,912.86 Lacs in previous year and the Consolidated operating profit before finance costs, depreciation & tax was Rs.3,934.97 Lacs as compared to Rs.2,398.29 Lacs in the previous year. A growth of 36.93% in revenue and 64.07% in operating profit as compared to the previous year.

Director 's Report

DIVIDEND

Considering the Company's financial performance, the Directors have recommended a dividend of Rs. 4/- per share (40%) {Previous Year - 25%} on the capital of 1,51,10,000 Equity Shares of Rs. 10/- each for FY 2013-14. The said dividend, if approved by the Members, would involve a cash outflow of Rs.725.24 Lacs {Previous Year - Rs. 441.95 Lacs} including Dividend Distribution Tax.

CAPITAL STRUCTURE

The Company's Equity Share Capital stands at Rs. 1511.00 Lakhs consisting of 1,51,10,000 Equity Shares of Rs 10/-each.

LISTING AT SROCK EXCHANGES

The Equity shares of your Company continue to be listed on Bombay Stock Exchange Ltd (BSE), The Madras Stock Exchange Ltd (MSE)and also, with effect from 23rd June, 2014 in National Stock Exchange Ltd (NSE).

The listing and custody fees for the year 2014-15 have been paid to the stock exchanges and Depository(ies), respectively.

Your Company is pleased to provide members facility to exercise their right to vote at the Twenty Third Annual General Meeting (AGM) by electronic means and the business may be transacted through e-Voting Services provided by M/s. Karvy Computershare Private Limited (KCPL) though their website:- https://evoting.karvy.com

FIXED DEPOSITS

The Company has not accepted any public deposits during FY 2013-14.

SUBSIDIARY COMPANIES

A statement pursuant to Section 212 of the Companies Act, 1956, relating to Subsidiary Companies, is attached to the Accounts. In terms of General Exemption, under Section 212(8) of the Companies Act, 1956, granted by Ministry of Corporate Affairs vide its circular no. 02/2011 dated 8th February, 2011, and in compliance with the exemption enlisted therein, the Audited Statement of Accounts, Auditors' Reports thereon and the Reports of the Board of Directors of the Company's subsidiaries for the financial year ended 31st March, 2014, have not been annexed.

The Annual Accounts and related documents of the Subsidiary Companies shall be kept open for inspection at the Registered Office of the Company. The Company will also make available these documents upon request by any Member of the Company interested in obtaining the same. However, as directed by the said circular, the financial data of the subsidiaries have been furnished in this Annual Report. Further, pursuant to Accounting Standard (AS-21) issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company in this Annual Report include the financial information of its subsidiaries.

Brief information regarding the Subsidiary is as below:- Rs. in Lakhs

Name of subsdiary profit after tax profit after tax (31st march 2014) 31st March 2013 (12 months) (12 months)

Argus LLp RS. 668.01 RS. 346.84

BOARD OF DIRECTORS J

CESSATION

Mr. R. Vijay Venkatraman, who was the Director of the Company since October 10,2012, died on August 19,2014, in an untimely and tragic manner. Mr. Vijay Venkatraman had made a considerable positive impact on the Company's culture by spearheading leadership. The Directors have placed on record their profound grief on the passing away of Mr. R. Vijay Venkatraman.

APPOINTMENTS

Pursuant to the provisions of Section 161(1) of the Companies Act, 2013, Dr. R Ravichandran and Dr. KC John were appointed as Additional Directors designated as Independent Directors w.e.f. May 12,2014 and August 25,2014 respectively and they shall hold office up to the date of the ensuing Annual General Meeting.

Further, pursuant to the provisions of Section 161 (1) of the Companies Act, 2013, Dr. Sridhar Ganesan was appointed as an Additional Director designated as an Independent Director w.e.f. February 12, 2014. The Board of Directors requested Dr. Sridhar Ganesan to resign as an Independent Director and to involve in the affairs of the Company on a whole time basis. Hence, the Board appointed Dr. Sridhar Ganesan as an Additional Director designated as Whole Time Director w.e.f August 25,2014 and he shall hold office up to the date of the ensuing Annual General Meeting.

The Board of Directors has, pursuant to the provisions of Clause 49 of the Listing Agreements entered into with Stock Exchanges, appointed Mr. P. T. Baby Thomas, Mr. V. Thirumalai, Mr. Venkat Radhakrishnan, Dr. R Ravichandran and Dr. K C John as Independent Directors of the Company. The Company has received declarations from the said Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under the said Clause 49. In accordance with the provisions of Section 149(4) and proviso to Section 152(5) of the Companies Act, 2013, these Directors are being appointed as Independent Directors to hold office as per their tenure of appointment mentioned in the Notice of the forthcoming AG M of the Company.

The Company has received requisite notices in writing from members proposing for appointment of the Directors mentioned above.

RE-APPOINTMENTS

The Board of Directors, subject to the approval of members, re-appointed Mr. M Jayapal as Managing Director and Mr. D P Mishra as Whole Time Director, for a period of 1 (One) year each with effect from March 28, 2014 and May 1, 2014 respectively as their present term expired on March 27, 2014 and April 30, 2014 respectively, according to the terms and conditions as mentioned in the Notice.

In accordance with the requirements of the Act and the Articles of Association of the Company, Mr. C C Paarthipan, Chairman, retires by rotation and is eligible for re-appointment.

TRABSFER TO RESEVES

In terms of Companies (Transfer of Profits to Reserves) Rules, 1975, a sum of Rs.340.00 lakhs (Rs. 150.00 Lakhs - previous year) was transferred to General Reserves during the financial year.

AUDITORS AND AUDITORS' REPORT

M/s. CNGSN & Associates, Chartered Accountants, Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received letter from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 141 (3)(g) of the Companies Act, 2013 and that they are not disqualified for re-appointment.

The Notes on Financial Statements referred to in the Auditors' Report are self-explanatory and do not call for any further comments.

COST AUDIRORS

The Company has appointed Mr. G. Thangaraj, Cost Accountant, as the cost auditor of the Company for conducting the audit of cost records of the Company for the financial year ended June 30,2014.

CORPORATIVE GOVERNANCE

A separate section on Corporate Governance and the certificate from the Practicing Company Secretary confirming compliance of Corporate Governance norms as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges, forms part of the Annual Report.

CORPORATE SOCIAL RESPONSUBILITY COMMITTEE

Your directors have constituted the Corporate Social Responsibility Committee (CSR Committee) comprising Mr. V Thirumalai, as the Chairman and Mr. C C Paarthipan, Dr. Sridhar Ganesan as other members, according to the provisions of Section 135 of the Companies Act, 2013.

The said Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, to monitor the implementation of the framework of the CSR Policy and to recommend the amount to be spent on CSR activities as may be required.

IRECTORS ESPONSIBILm T EMEN

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

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and have 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 and of the profit of the Company for that period;

(iii) they have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956, for safeguarding the assets of th Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis.

PARTICULARS OF EMPLOYEES UNDER

SECTION 217(2A) OF THE COMPANIES ACT, 1956

During the year 2013-14, none of the employees were in receipt of remuneration above the limits fixed in terms of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

ANAGEMEN DISCUSSION N ANAUfSI REPO

The Management Discussion and Analysis Report on the operations of the Company, as required under the Listing Agreement with the stock exchanges is provided in a separate section and forms a part of this Annual Report.

ENVIRONMENT SAFETY AND HEALTH

Your Company's framework integrates Safety as a non-negotiable value. The Company provides a safe and healthy workplace for its employees by establishing the right safety culture across the organization. The Company has developed safer systems and procedures for work rolling out up-to-date engineering standards and investing in hardware and safety infrastructure across sites. The Company also ensures implementation of quality systems and manufacturing of high quality products.

The Company continues to conserve resources by taking initiatives for reducing consumption of electrical power, water and paper at the Factories and also at Office premises.

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

Details of energy conservation and research and development activities undertaken by the Company along with the 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, are given asanAnnexuretothe Directors' Report.

HUMAN RESOURCES

At Caplin, we believe that our success is due to the commitment and passion of our most valuable asset - Our People. Our team is an amalgam of the brightest peoples in the field that complement each other's talents and work synergistically towards a unified goal of research excellence. The diverse cultures, backgrounds, skills and experience of our team bring great creative strength and energy to our business and have a critical role to play in achieving our strategic objectives.

Company's industrial relations continued to be harmonious during the year under review. The Company has generally enjoyed cordial relations with its employees and workers.

APPRECIARTIONS AND ACKNOWLEDGED

Your Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to progress at this level. The Board places on record its appreciation for the support and co-operation your Company has been receiving from its Company's Customers, Manufacturers, Dealers and others associated with the Company.

The Directors also take this opportunity to thank all Investors, Clients, Banks, Central and State Governments of Tamilnadu, Puducherry and Himachal Pradesh and Regulatory Authorities and Stock Exchanges, for their continued support.

By Order of the Board of Directors For Caplin Point Laboratories Limited

Registered Office:

"Narbavi " No.3 Lakshmanan Street, T Nagar, Chennai - 600 017 S Mohan Raj Date: November 12, 2014 Chief Financial Officer & Company Secretary




Jun 30, 2013

To the Shareholders

The Directors have pleasure in presenting the Twenty Second Annual Report together with the Audited Accounts for the year ended 30" June 2013.

FINANCIAL RESULTS

Rs. In Lakhs except per share data

Standalone for the Consolidated for the year ended 30th June year ended 30,h June 2013 2012 2013 2012

Sales (net of excise duty) and other 12,440.52 11,001.01 12,912.86 10,972.34

Income

Profit before Finance Costs, 2,327.18 1,286.86 2,39829 1,330.34

Depreciation, Amortisation Expenses & Taxes

Depreciation & Amortisation 145.32 115.50 154.02 123.66

Expense

Profit Before Tax 17.24

Less: Tax Expenses 721.15 265.16 811.89 314.25

Add: Surplus at the beginning of 1,216.89 834.60 1,173.65 809.22 the year

Profit Apgropriation 2,647.54 1,653.11 2,57213 1609.87

Less: Transfer to Genera Reserves 150.00 85.00

Final Dividend proposed

Dividend Tax Current Year 6420 49.02 64.20 49.12

Transfer from other Reserves

Balance carried to Balance Sheet 2,05751 1,216.89 1,982.02 73.65

Reserves & Surplus 1,84679

Netvvorth 4,389.73 3,401.03 4,31424 3,357.79

Earnings per Share

OPERATIONS & OUTLOOK

During the Financial year under report, the company posted an excellent financial performance.

At standalone level, our profit after tax amounted to Rs 1,430.65 lakhs (11.49% of revenue) as against Rs 818.51 lakhs (PY 7.44% of revenue), thus representing an increase of 54% over the previous year. On consolidated basis, our profit after tax amounted to Rs 1,398.40 lakhs (10.82% of revenue) as against Rs 800.65 lakhs (PY 7.29% of revenue). The net worth of the company has increased to Rs 4,389.73 lakhs from Rs. 3,401.03 lakhs. The EPS has improved to Rs 9.47 (Rs 5.42 PY) for standalone and Rs 9.28 (Rs 5.30 PY) for the group.

OUTLOOK

With India becoming a hub for manufacturing and research operations, your company is poised for growth. In 2012, your Company commenced a project for setting up of a state of the art injectable plant which will cater to highly regulated markets like USA , EU, Brazil, South Africa etc. The facility is designee! with a high level of sophistication and automated process control and will be in compliance with norms stated by USFDA , UK MHRA, ANVISA BRAZIL, EU GMPand other regulatory bodies. Upon commencement of commercial production in this facility, your Company would also be in a position to offer Contract manufacturing services in the areas of general category injectable dosage forms in Vials, Ampoules, Lyophilized Vials, Pre filled syringes and Ophthalmic preparations. Your Company expects to commence trial production by December 2013 and pilot production batches by January 2014. With facilities available to cater to all segments of domestic and export markets, your Company has recently entered into an agreement to cater to the Brazilian Pharmaceutical Market for these products. Your Company can provide them supplies at competitive prices which is expected to significantly contribute to the future business.

Your Company as part of the current expansion plans at the manufacturing unit at Puducherry, is in the process of setting up dedicated lines in the areas of Suppositories, Soft gelatin capsule and Penems which will commence production during the Fourth quarter of this year.

Your Company''s manufacturing unit at Baddi in the state of Himachal Pradesh is situated in the notified area under notification number S.O. 1269(E) dated 4''" November, 2003 and continue to enjoy Central Excise and Income Tax benefits.

SHARE CAPITAL

At the end of the financial year the Company''s Equity Share Capital stands at Rs. 1511.00 Lakhs consisting of 15,110,000 Equity Shares of Rs 10/ each.

DIVIDEND

The Board of Directors are pleased to recommend a dividend of Rs. 2.50 per Equity Share of Rs.10/ each [25%] for the year ended June 30, 2013 subject to approval of the shareholders in the ensuing 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 would entail a cash outflow of Rs. 441.95 Lacs including dividend distribution tax of Rs. 64.20 Lacs.

DIVIDEND HISTORY

TRANSFER TO RESERVES

In terms of Companies (Transfer of Profits to Reserves) Rules, 1975, a sum of Rs.150.00 lakhs (Rs. 85.00 Lakhs previous year) was transferred to General Reserves during the financial year.

SUBSIDIARY COMPANIES

As per Section 212 of the Companies Act, 1956, we are required to attach the Directors" Report, Balance Sheet and Profit and Loss Account of our subsidiary to our annual report.

The Ministry of Corporate Affairs, Government of India vide its circular no. 2/2011 dated February 8 ,2011 provided an exemption to companies from complying with Section 212, provided such companies publish the audited consolidated financial statements in the annual report. Accordingly, the annual report 2012 13 does not contain the financial statements of our subsidiary. However, the statement as required under Section 212 of the Companies Act, 1956 in respect of the Subsidiaries of the Company is annexed and forms part of this Report. The audited annual accounts and related information of our subsidiary, where applicable, will be made available for inspection during office hours on all working days (except Saturdays, Sundays and Public holidays) between 11.00 a.m. to 01.00 p.m. up to the date of the Annual General Meeting.

The consolidated financial statements, in terms of Clause 32 of the Listing Agreement and prepared in accordance with Accounting Standard 21 as specified in Companies (Accounting Standards) Rules, 2006 also forms part of this annual report.

CORPORATE GOVERNANCE

Your Company is committed to maintain high standards of Corporate Governance. A separate section on Corporate Governance forming part of the Directors Report and the certificate from Practicing Company Secretaries confirming compliance of Corporate Governance norms as stipulated in Clause 49 of the Listing Agreement with Madras Stock Exchange Limited (MSE) and Bombay Stock Exchange Ltd., (BSE) is included in the Annual Report

CORPORATE SOCIAL RESPONSIBILITY

Today, society expects corporate to go beyond the statutory compliances and putting something back into society. Caplin Point as a Company is aware of the expectation from the society with respect to social commitment.

Your Company is committed to developing its business towards ecological, social and economic sustainability. Your Company rather sees Corporate Social Responsibility as a new business strategy to reduce investment risks and maximise profits by taking all the key stakeholders into confidence. All activities and initiatives are planned specific to the needs of the target stakeholders. The ultimate objective is to see that each business decision takes into account its social impact and accordingly plans an intervention to mitigate the impacts arising out of that decision. As a part of initiative, we have installed at Caplin Point''s manufacturing facilities the most advanced anti pollution devices to keep the environment in and around the manufacturing facilities clean and green.

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to clause 49 of the Listing Agreement with the Stock Exchanges, we annex herewith a Statement on Management Discussion and Analysis which forms part of the Directors'' report.

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

The informations required under 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 are given in the Annexure forming part of this report.

PARTICULARS OF EMPLOYEES UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956

During the year 2012 13, none of the employees were in receipt of remuneration above the limits fixed in terms of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 in the said section.

QUALITY INITIATIVES

Quality and best practices define the foundation of a company. Caplin point has a comprehensive quality policy which ensures that the quality consciousness and culture is spread across the company. The following initiatives have helped the company to leverage its pursuit towards implementation of quality systems and manufacturing of high quality products.

A "Corporate Quality Assurance" unit has been set up by Caplin point to function independently and report to the board on matters related to quality.

The Quality assurance teams in our manufacturing sites are also being strengthened and expanded.

A standard procedure for "Vendor evaluation" implemented to ensure that all the materials are supplied by approved vendors and with right quality consistently.

"Contract manufacturing sites" are being audited for the GMP implementation before entering into any commercial agreement.

"Quality Management system" has been implemented across all manufacturing units. All the incidents, deviations, failures are recorded and investigated. The corrective and preventive actions are properly implemented.

"Training programs" on GMP, QMS and process related SOPs are being conducted in all units

"Finished Goods release inspections" are being conducted meticulously by all units.

"Product Development" ( R&D) has been given lot of importance and a dedicated facility has been created in Gummidipoondi in Chennai.

"Product Stability studies" are being conducted as per the international requirements (ICH guidelines) and the data is evaluated periodically.

Studies for"Process improvements" are being done in the new R&D lab.

"Quality control laboratories" are being equipped with sophisticated equipments like HPLCs, stability chambers etc.,

FIXED DEPOSITS

The Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

DIRECTORS

Retirement by rotation

In accordance with the requirements of the Companies Act, 1956 and Article 99 of Articles of Association of the Company, Mr. P. T. Baby Thomas, Director of the Company will retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re appointment.

Re Appointment of Mr, M.Jayapal as Managing Director

In view of the 2 year tenure of Mr. M. Jayapal as Managing Director of the Company coming to an end on 27th March 2013, the Board of Directors of the Company had at its meeting held on 9''" May, 2013 approved the re appointment of Mr. M. Jayapal as Managing Director of the Company for a further period of 1 year with effect from 28th March 2013 on a remuneration of Rs. 59,400/ p.m.

DIRECTORS'' RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 217 (2AA) OF THE COMPANIES ACT, 1956

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

(i) they accept responsibility for the integrity and objectivity of these accounting statements;

(ii) the financial statements are prepared in accordance with the guidelines and standards of the ICAI and Companies Act 1956, to the extent applicable. There are no material departures from the above mentioned standards;

(ii) such standard accounting policies have been applied consistently, except as otherwise stated;

(iv) the judgments and estimates have been made on a reasonable and prudent basis so that the financial statements provide a true and fair view of the state of affairs of the Company at the end of the financial year;

(v) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(vi) the Annual Accounts are prepared on agoing concern basis and on an accrual basis.

AUDITORS

The Auditors, M/s. M. Raghunath & Co, Chartered Accountants, Chennai , who retire at the conclusion of the ensuing Annual General Meeting have expressed their desire not to seek re appointment. Notice has been received from a Member proposing the appointment of M/s CNGSN & Associates, Chartered Accountants as Auditors of the Company to hold office till the conclusion of the next Annual General Meeting. M/s CNGSN & Associates have given their consent to be the Auditors of the company and have also confirmed that their appointment will be in accordance with the limits specified in Section 224(1 B) of the Companies Act 1956.

CNGSN & Associates is a firm of Chartered Accountants providing comprehensive audit, taxation and consulting services, established in 1990 in Chennai, India.

Accordingly the notice for appointment of CNGSN & Associates have been proposed along with the letter received from a Member proposing their appointment as Statutcy Auditors.

COST AUDITOR

Mr. G.Thangaraj, Cost Accountant, has been appointed as the Cost Auditor for audit of the cost accounting records of the Company for the financial year ended June 30, 2013. The Cost Audit Reports relating to the financial year 2012 2013 shall be filed within the stipulated time period.

INDUSTRIAL RELATIONS

Generally the Industrial relations with the employees of the Company continued to be stable, cordial and satisfactory during the financial year.

ENVIRONMENTAL AWARENESS

"Go Green" initiatives to conserve resources has been initiated in the Company. Steps required for conserving power across all Factories are being undertaken. The Company has also taken initiatives within its office buildings to reduce electrical power, water and paper consumption. These initiatives shall be taken forward at a sustained pace.

ACKNOWLEDGEMENT

Your Directors place on record their sincere thanks to the Central Government and State Governments of Tamilnadu, Puducherry and Himachal Pradesh for their continued support to the Company.

Your Directors wish to thank the Company''s Customers, Manufacturers, Dealers, Banks and Shareholders for their continued support to your Company''s performance and growth. Your Directors also wish to place on record their appreciation of the contribution made by all the employees of the Company resulting in good performance during the year under review.

On behalf of the Board of Directors

Place: Chennai C C Paarthipan M Jayapal

Date : November 7, 2013 Chairman Managing Director


Jun 30, 2012

To the Shareholders

The Directors have pleasure in presenting the Twenty First Annual Report together with the Audited Accounts for the year ended 30th June 2012.

Financial Performance

Particulars 2011-2012 2010-2011

Sates (net of excise duty) and other Income 11001.01 8557.52

Profit before Finance Costs, Tax, Depreciation 1286.86 1163.04 & Amortisation Expenses

Less: Finance Costs 87.69 100.22

Depreciation & Amortisation Expense 115.50 227 72

Profit Before Tax 1083.67 835.10

Less: Tax Expenses 265.16 181.19

Profit after Tax 818.51 653.61

Add: Surplus at the beginning of the year 834.60 509.77

Profit available for Appropriation 1653.11 1163.38

Less: Transfer to General Reserves 85.00 65.36

Final Dividend proposed 302.20 226.65

Dividend Tax - Current Year 49.02 36.77

Balance carried to Balance Sheet 1216.89 834.60

Return on Net worth - Earnings Per Share

Basic / Diluted 5.42 4.33

OPERATIONS & OUTLOOK

We are glad to inform the Members that the Company has crossed the milestone of 100 CRORE Revenue Mark in the year under review. This has been achieved mainly on account of our deep inroads in Southern and Central America, Company's growing market presence, innovative marketing strategies and introduction of new product. It is hoped that with the continued efforts in exploring new markets/products in the established markets, the growth will be sustained during the coming years.

In addition, the Company has added substantial machinery/equipment at the unit of the Company at Pondicherry. Considering the status of the plant and the productivity, subsequent to the close of the year our facility at Gummidipoondi is being revamped and during the interregnum period due to investment in balancing machinery at Pondicherry there shall not be any effect on the overall production target during the current year.

completion and expected to commence trial run during the Third/fourth quarter of the current year. Senior technical personnel have already been recruited and plans are under way for preparation for approval of the plant and registration of product lines with the regulatory authorities.

DIVIDEND

The Board of Directors is pleased to recommend a dividend of Rs.2/- per Equity Share of Rs.10 each [20%] for the year ended June 30, 2012 subject to approval of the shareholders in the ensuing 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 would entail a cash outflow of Rs. 351.22 Lacs including dividend distribution tax of Rs. 49.02 Lacs.

TRANSFER TO RESERVES

In terms of Companies (Transfer of Profits to Reserves) Rules, 1975, a sum of Rs.85.00 lacs was transferred to General Reserves during the financial year.

DIRECTORS

Re-Appointment

In accordance with the requirements of the Companies Act, 1956 and Articles of Association of the Company, Mr.C.C.Paarthipan, Director of the Company will retire by rotation at the ensuing Annual Genera! Meeting and being eligible have offer himself for re-appointment. The Board recommends his re-appointment.

Aprication

As per the resolution passed by the Board of Directors on 30th April 2012, Mr. D.P. Mishra was re-designated and appointed as Whole Time Director of the Company effective from Is' May 2012 for a period of two years subject to approval of the shareholders at the ensuing Annual General Meeting.

Subsequent to the close of the year, Mr. N.R. Achan resigned as a Director with effect from 4n October 2012 and Mr. R. Vijay Venkatraman was appointed as a Director of the Company in his place with effect from 4'" October 2012. The Board of Directors wish to place on record its deep appreciation for the valuable services rendered by Mr.N.R.Achan.

As required under Clause 49 of the Listing Agreement relating to Corporate Governance, a brief resume, expertise and details of other directorships of Messrs.CC.Paarthipan and D.P.Mishra are provided in the Notice of the ensuing Annual General Meeting.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors, in accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, confirm that:

1) Applicable accounting standards have been followed in the preparation of the Annual Accounts;

2) The Directors have adopted such accounting policies and have applied them consistently and have made judgments and estimates in a reasonable and prudent manner so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year, and of the profit of the Company for the year ended 30.06.2012.

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 prevention and detection of fraud and other irregularities. To ensure this, the company has established internal control systems, consistent with its size and nature of operations, subject to the inherent limitations that should be recognized in weighing the assurance provided by any such system of internal controls. These systems are reviewed and updated on an ongoing basis. Periodic internal audits are conducted to provide reasonable assurance of compliance with these systems. The audit committee meets at regular intervals to review the internal audit function.

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

FIXED DEPOSITS

The Company has not accepted any fixed deposits from the public.

AUDITORS

The Auditors, Messrs. M. Raghunath and Company, Chartered Accountants, Chennai, retire at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

The Board on recommendation of the Audit Committee, proposes that Messrs.M.Raghunath and Company, Chartered Accountants, Chennai, be appointed as Statutory Auditors of the Company to hold office till the conclusion of the next Annual General Meeting of the Company. Messrs. M. Raghunath and Company, Chartered Accountants, Chennai have forwarded their certificate to the company stating that their appointment, if made, will be within the limit specified in that behalf in sub-section (IB) of Section 224 of the Companies Act, 1956.

COST AUDITORS

Mr. G.Thangaraj, Cost Accountant, has been appointed as the Cost Auditor for audit of the cost accounting records of the Company for the financial year ended 30.06.2012. The Cost Audit Reports relating to the financial year 2011-2012 will be filed within the stipulated time period.

CORPORATE GOVERNANCE

Your Company is committed to maintain high standards of Corporate Governance. A separate section on Corporate Governance is included in the Annual Report and the Certificate from M/s. R Sridharan & Associates, Company Secretaries confirming the compliance of conditions on Corporate Governance as stipulated under Clause 49 of the Listing Agreement of the Stock Exchange is annexed thereto.

INDUSTRIAL RELATIONS

Generally the Industrial relations with the employees of the Company continued to be stable, cordial and satisfactory during the financial year.

PARTICULARS UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956

The information required in terms o f Section 217(2A) of the Companies Act, 1956 read >vitr-the Compares (Particulars of Employees) Rules, 1975 is not applicable to this Company, since none of the employees werreceipt of remuneration higher than the limits fixed in the said section.

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

The information required under section 217(l)(e) of the Companies Act, 1956 read with Companies. (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in the /anrexure forrrr.g na-t of this report.

ACKNOWLEDGEMENT

The Directors wish to thank the Company's Customers, Manufacturers, Dealers, Banks, Shareholders and Government for their continued support to your Company's performance and growth. The Directors also wish to place on record their appreciation of the contribution made by all the employees of the Commny resulting in gcod performance during the year under review.

On behalf of the Board of Directors

Place: Chennai C C Paarthipan

Date; November 9, 2012 Chairman


Jun 30, 2011

The Directors have pleasure in presenting the Twentieth Annual Report together with the Audited Accounts for the year ended 30th June 2011.

Financial Performance

(Rupees in lacs)

2010-2011 2009-2010

Sales and Other Income 8557.50 6246. 00

Profit before Tax 835.10 364.83

Profit after Tax 653.61 333.18

Key Financial Ratios

Net worth 2933.74 2543.55

Current Ratio 1.48 1.64

Debt Equity 0.33 0.41

Return on Net worth

Earnings per Share

Basic & Diluted 4.33 2.21

OPERATIONS & OUTLOOK

During the year under review there has been substantial improvement in the sales turnover and profits of the Company. As in the previous years the focus was principally on the established and new export geographies in Southern and Central America, where the Company's growing market presence, strong brand equity, innovative marketing strategies and new product pipe line are yielding rich returns. The efforts at reaching out to newer markets in other countries in South America and Africa where the Company hitherto did not have a significant presence has gained momentum. The outcome of these major marketing initiatives are already beginning to be felt in the form of higher turnover and profits.

The Company in order to sustain growth and competition has several initiatives in the territories where they are established, by offering healthcare and allied products which would result in additional revenue and retention of customers.

We are glad to inform you that, M/s Argus Salud Pharma LLP ,the Limited Liability Partnership Firm set up by the Company as a subsidiary for the manufacture of pharmaceutical formulations at Baddi, Himachal Pradeshn which has become fully operational in the course of this year and has started contributing handsomely to the profits of the Company. In addition, the other established units of the Company at Pondicherry and Gummidipoondi have also attained higher levels of production and profitability during the year.

In connection with the planned expansion into the manufacture of injectibles intended for export to regulated markets, the Company has put in focused efforts over the past year in building a world class injectible unit, which would be in compliance with the stringent standards of the regulated markets and it is expected that the project would get completed during the current financial year so as to begin the process of obtaining approvals for regulated markets and to commence commercial production thereafter.

RESEARCH AND DEVELOPMENT

In order for the Company to improve its processes, product enhancement and newer applications, a dedicated Research and Development team is being set up and towards this end, several senior technical professionals have been appointed and a separate R&D wing in the proposed expansion is under construction and will be in a position to commence its activities during the third quarter of this year.

DIVIDEND

The Board of Directors is pleased to recommend a dividend Rs. 1.50 per Equity Share of Rs. 10 each [15%] for the year ended June 30, 2011 subject to approval of the shareholders in the ensuing 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" 263.42 Lacs including dividend distribution tax of Rs 36.77 Lacs.

TRANSFER TO RESERVES

In terms of Companies (Transfer of Profits to Reserves) Rules, 1975, a sum of Rs. 65.36 Lacs was transferred to General Reserves during the financial year.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Industry Structure and Development / Opportunity - Threat, Risk & Concerns

The Company is engaged in the manufacture of Pharmaceutical Formulations and is specifically a manufacturer of generic dosages with significant exposure and direct presence in the overseas markets such as South / Central America and West Africa. Unlike other SME's in the Pharmaceutical sector, your Company has, by virtue of its presence in these underpenetrated markets and on account of being able to sustain its operations and extract higher profits through efficient resource management, managed to carve a niche for itself in the pharmaceutical manufacturing industry. This would, in turn, lead to greater market presence and better profitability in future. However the perils posed by the unpredictable fluctuations in foreign currencies during the present global economic problem present a material threat to the earnings of the Company.

Internal Control Systems and their Adequacy

The Company maintains a system of internal control, including suitable monitoring procedures. The management duly considers and takes appropriate action on recommendations made by the Statutory Auditors, Internal Auditors and independent Audit Committee of the Board of Directors. Significant issues are also brought to the attention of the Audit Committee.

Outlook for the year 2011-12

The Company's sustained focus on quality of products and effective market strategies coupled with the expansion plans would, very shortly, propel the Company into the select league of niche manufacturers of pharmaceutical formulations catering to the needs of the regulated markets. The resulting outcomes in terms of quality improvement, greater production efficiencies and better recognition in the markets for the Company's products augur well for the future growth of your Company.

Consolidated Financial Statements of Subsidiary

The Consolidated Financial Statements of the Company and its Subsidiary,viz., Argus Salud Pharma LLP, prepared in accordance with the Accounting Standards (AS - 21) prescribed by the Institute of Chartered Accountants of India are attached and form part of the Annual Report and Accounts.

Subsidiary

The Company had promoted a Subsidiary Limited Liability Partnership, Argus Salud Pharma LLP at an investment of Rs. 4,95,000 which constitutes 99 per cent of the capital thereof, to manufacture and market pharmaceutical formulations which is now fullv operational and yielding profits.

The Ministry of Corporate Affairs has, vide General Circular No. 2/2011 dated 8th February 2011, pursuant to Section 212(8) of the Companies Act, 1956 granted a general exemption from attaching a copy of the Balance Sheet, Profit & Loss Account, Report of the Board of Directors and Report of the Auditors of the subsidiary along with that of the Holding Company and hence the same have not been attached herewith.

However, the statement as required under Section 212 of the Companies Act, 1956 in respect of the Subsidiaries of the Company is annexed and forms part of this Report. The Annual Accounts of the Subsidiary will be made available to any shareholder requiring a copy of the same at any point of time. The Annua) Accounts of the Subsidiary will also be kept for inspection by shareholders at its Registered Office. i

Cautionary Note

Certain statements in the "Management Discussion and Analysis" section may be forward looking and are stated as required by applicable laws and regulations. Many factors may affect the actual results, which could be different from what the Directors' envisage in terms of future performance and outlook.

DIRECTORS

Re-Appointment

Shri. V. Thirumalai and Shri. D. P. Mishra, Directors, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Appointments

Mr. Venkat Radhakrishnan and Mr. N R Achan were appointed as Additional Directors of the Company effective from 28th June 2011 and 31st October 2011 respectively to hold office upto the date of the ensuing Annual General Meeting.

The Company has received notices in writing along with a deposit of Rs.500/- each from member(s) of the Company under Section 257 of the Companies Act, 1956, proposing the appointments) of Messrs. Venkat Radhakrishnan and N R Achan, as Directors of the Company. The Board recommends their appointment for approval of the members.

As required under Clause 49 of the Listing Agreement relating to Corporate Governance, a brief resume, expertise and details of other directorships of Messrs. V Thirumalai, D P Mishra, Venkat Radhakrishnan and N R Achan are provided in the Notice of the ensuing Annual General Meeting.

Re-Appointment of Mr. M. Jayapal as Managing Director

In view of the 3 year tenure of appointment of Mr. M. Jayapal as Managing Director of the Company coming to an end on 27th March 2011, the Board of Directors of the Company had at its meeting held on 21st March 2011 approved the re-appointment of Mr. M. Jayapal as Managing Director of the Company for a further period of 1 year with effect from 28th March 2011 on a remuneration of Rs. 50,500/- p.m.

Subsequently, in partial modification of the earlier resolution, the Board at its meeting held on 21st November 2011, approved the revision of the tenure of appointment of Mr. M. Jayapal as Managing Director of the Company for a period of two years effective from 28th March 2011 on the same terms of remuneration as approved earlier. *

Accordingly the ordinary resolution is set out in Item No. 9 of the notice for the consideration and approval of the members.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors, in accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, confirm that:

1) Applicable accounting standards have been followed in the preparation of the Annual Accounts;

2) The Directors have adopted such accounting policies and have applied them consistently and have made judgements and estimates in a reasonable and prudent manner so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year, and of the profit of the Company for the year.

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 prevention and detection of fraud and other irregularities. To ensure this, the company has established internal control systems, consistent with its size and nature of operations, subject to the inherent limitations that should be recognized in weighing the assurance provided by any such system of internal controls. These systems are reviewed and updated on an ongoing basis. Periodic internal audits are conducted to provide reasonable assurance of compliance with these systems. The audit committee meets at regular intervals to review the internal audit function.

4) The annual accounts have been prepared on a going concern basis. FIXED DEPOSITS

The Company has not accepted any fixed deposits from the public.

AUDITORS

The Auditors, Messrs. M. Raghunath and Company, Chartered Accountants, Chennai, retire at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

The Board on recommendation of the Audit Committee, proposes that Messrs. M.Raghunath and Company, Chartered Accountants, Chennai, be appointed as Statutory Auditors of the Company to hold office till the conclusion of the next Annual General Meeting of the Company. Messrs. M. Raghunath and Company, Chartered Accountants, Chennai have forwarded their certificate to the Company stating that their appointment, if made, will be within the limit specified in that behalf in sub-section (IB) of Section 224 of the Companies Act, 1956.

CORPORATE GOVERNANCE

A separate section on Corporate Governance is included in the Annual Report and the Certificate from M/s. R Sridharan & Associates, Company Secretaries confirming the compliance of conditions on Corporate Governance as stipulated under Clause 49 of the Listing Agreement of the Stock Exchange is annexed thereto.

INDUSTRIAL RELATIONS

Generally the Industrial relations with the employees of the Company continued to be stable, cordial and satisfactory during the financial year.

PARTICULARS UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956

The information required in terms of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 is not applicable to this Company, since none of the employees were in receipt of remuneration higher than the limits fixed in the said section.

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

The information required under section 217(l)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in the Annexure forming part of this report.

ACKNOWLEDGEMENT

Your Directors wish to place on record their grateful appreciation of the valuable assistance and support extended by its buyers, suppliers, bankers, and corporate and other statutory authorities. Your Directors also wish to place on record their appreciation for the services rendered by the employees at all levels, which gives confidence to plan for greater achievements in the current financial year.

On behalf of the Board

Place: Chennai C.C.Paarthipan M.Jayapal D.P. Mishra

Date : 21st November 2011 CHAIRMAN MANAGING DIRECTOR DIRECTOR


Jun 30, 2010

The Directors have pleasure in presenting the Nineteenth Annual Report together with the Audited Accounts for the year ended 30lh June 2010.

Financial Performance

(Rupees in lacs) 2009-2010 2008-2009

Sales and Other Income 6246.00 6294.75

Profit before Tax 364.83 320.76

Profit after Tax 333.18 222.57

Key Financial Ratios

Net worth 2543.55 2386.57

Current Ratio 1.64 1.52

Debt Equity 0.41 0.36

Return on Net worth

Earnings per Share

Basic & Diluted 2.21 1.47

OPERATIONS & OUTLOOK

While the growth in Exports was marginal, the Profit before Tax is higher by about 10% for the year ended 30th June 2010. To fuel growth in sales in the coming years, several new areas of export and new product line are being explored. Taking advantage of the market presence in more than Seven South American countries, this company has taken several new market initiatives, strengthening of Brand Marketing, besides expanding market reach to about Eight more South American countries, which will not only ensure additional revenue for the company but will also shore up the bottom line as the fixed cost will be amortized to a larger share of revenue. The current level of registration of our products work out to almost 100 in each of the country as on the date of report and several applications are in the pipeline awaiting clearance at various stages. We are glad to inform you that subsequent to the close of the year, the company has commenced its operations in the Unit at Pondicherry, and hope to ramp up in the next twelve months.

In order for the company to move into more regulated market, the company has also embarked on an expansion plan by setting up a formulation unit compliance with the U.S.FDA/ U.K MHRA standards. Towards this the company has already acquired the land and hired senior technical professionals. The funding for the project will be from internal generation and term loans. The project is expected to be on stream in the next twenty four months.

The Company has also set up an Ointment and tablet facility at Baddi through a Limited Liability Partnership Firm and is expected to commence production before this calendar year.

DIVIDEND

The Board of Directors are pleased to recommend a dividend of Re 1/- per Equity Share of Rs 10 each [10%] for the year ended June 30, 2010 subject to approval of the shareholders in the ensuing 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 Rs176.20 Lacs including dividend distribution tax of Rs 25.10 Lacs .

TRANSFER OF RESERVES

In terms of Companies (Transfer of Profits to Reserves) Rules, 1975, a sum of Rs. 33,31,776/- was transferred to General Reserves during the financial year.

DIRECTORS

Mr. P.T.Baby Thomas, Director, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

DIRECTORS RESPONSIBILITY STATEMENT

Your Directors, in accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, confirm that: 1) Applicable accounting standards have been followed in the preparation of the Annual Accounts;

2) The Directors have adopted such accounting policies and have applied them consistently and have made judgements and estimates in a reasonable and prudent manner so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year, and of the profit ^f the Company for the year.

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 prevention and detection of fraud and other irregularities.

4) The annual accounts have been prepared on a going concern basis. FIXED DEPOSITS

The Company has not accepted any fixed deposits from the public.

AUDITORS

The Auditors, Messrs. M.Raghunath and Company, Chartered Accountants, Chennai, retire at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

The Board on recommendation of the Audit Committee, proposes that Messrs.M.Raghunath and Company, Chartered Accountants, Chennai, be appointed as Statutory Auditors of the Company to hold office till the conclusion of the next Annual General Meeting of the Company. Messrs.M.Raghunath and Company, Chartered Accountants, Chennai have forwarded their certificate to the company stating that their appointment, if made, will be within the limit specified in that behalf in sub-section (1B) of Section 224 of the Companies Act, 1956.

CORPORATE GOVERNANCE

A separate section on Corporate Governance is included in the Annual Report and the Certificate from M/s. R Sridharan & Associates, Company Secretaries confirming the compliance of conditions on Corporate Governance as stipulated under Clause 49 of the Listing Agreement of the Stock Exchange is annexed thereto.

It is to be informed that our application for Dematerialization of the shares with NSDL has been accepted.

INDUSTRIAL RELATIONS

Generally the Industrial relations with the employees of the Company continued to be stable, cordial and satisfactory during the financial year.

PARTICULARS UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956

The information required in terms of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 is not applicable to this Company, since none of the employees were in receipt of remuneration higher than the limits fixed in the said section.

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

The information required under 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 is given in the Annexure forming part of this report.

ACKNOWLEDGEMENT

Your Directors wish to place on record their grateful appreciation of the valuable assistance and suppor extended by its buyers, suppliers, bankers and corporate and other statutory authorities. Your Directors alsc wish to place on record their appreciation for the services rendered by the employees at all levels, which gives confidence to plan for greater achievements in the current financial year.

On behalf of the Board

Place: Chennai M. Jayapal D.P.Mishra

Date : 22nd November 2010 MANAGING DIRECTOR DIRECTOR

 
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