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Directors Report of Parabolic Drugs Ltd.

Mar 31, 2014

Dear Members,

The Board of Directors of your Company has pleasure in presenting the Eighteenth Annual Report on the affairs of the Company, together with the Audited Accounts of the Company for the year ended 31st March, 2014.

1. Financial Results:

The Financial Results for the year under review vis-a-vis the financial results for the previous year are as under:

(Rs. in million) 2013-14 2012-2013

Gross Sales 4467 8281

Profit before Depreciation, Interest & Tax (PBDIT) (340) (1084)

Financial Expenses 831 698

Depreciation 189 168

Balances Written Off 840

Profit before Tax (PBT) (2200) (1950)

Provision for Taxation:

-Current Tax 270 -

-Deferred Tax 613 553

Profit after Tax (PAT) (1317) (1397)

Profits available for equity shareholders

Appropriation: - -

Proposed Dividend on Equity Shares - -

Corporate Dividend Tax - - Balance carried to Balance Sheet (1317) (1397)

Earnings per Share (Basic) Rupees (21.28) (22.58)

Earnings per Share (Diluted) Rupees (21.28) (22.58)

Financial Analysis and Review of Operations:

Your Directors are pleased to report performance of the business operations as follows:-

* Sales and Export:

During the year under review, your Company has registered a turnover of Rs. 4467 million as compared to Rs. 8280 million in the previous year showing thereby a decrease of 46%. The Export turnover of manufactured API products has been higher at Rs. 1500 million as compared to Rs. 1154 million in the previous year showing thereby, an increase of 30%. Total export including trading of pharma products had been even higher at Rs. 2037 million. There was overall increase in quality of exports as exported value to the regulated markets were much higher in the current financial year leading to improved value addition of exported products.

The domestic sales have reduced largely on account of rapid selling price volatility and unviability of sales of few products due to high cost of import on rupee depreciation.

* Profitability:

The Company incurred loss before depreciation, interest and tax (EBDIT) of Rs. (340) million as compared to a loss of Rs. (1084) million in the previous year. However, if we include an exceptional write off of debit balances which were made during the year, on advise of Auditors and other experts amounting to Rs. 840 million, the EBIDT loss for the year will stand increased to Rs. (1180) millions. The Company incurred loss before tax (PBT) of Rs. (2200) million as compared to a loss of Rs. (1950) million in the previous year. After tax adjustment/write backs of Rs. 883 million (previous year Rs. 553 million), the net loss worked out to Rs. (1317) million as compared to a net loss of Rs. (1398) million in the previous year owing to the high interest burden, write off of debit balances, revaluation of semi-finished stock because of the quality and eroded market prices.

* Fixed Assets:

The net fixed assets (including work-in-progress) as at 31st March, 2014 were Rs. 4122 million as compared to Rs. 4058 million in the previous year.

2. Directors:

The State Bank of India (SBI) had nominated Mr. Balbir Singh Bhasin, on the Board of Directors of the Company. Accordingly, he was appointed as a Nominee Director of SBI on the Board of the Company w.e.f 10.08.2013. However, he resigned from the Board of Directors w.e.f. 02.07.2014.

Dr. Ram Kumar and Mr. Nikhil Goel resigned from the Board of Directors of the Company w.e.f 06.08.2013 and 12.08.2014 respectively.

Mr. Jagjit Singh Chahal has been appointed as an Additional Director on the Board of Directors of the Company w.e.f 14.08.2014.

3. Subsidiaries

The Company has two subsidiary Companies namely M/s. Parabolic Research Labs Limited and M/s. Ziven Lifesciences Limited and your company holds 98.99% and 92% share holding of the said companies, respectively. The consolidated Financial Statements of all subsidiaries and the Company shall be laid before the Annual General Meeting of the Company.

As required pursuant to Section 129 of the Companies Act, 2013, a separate statement containing the salient features of the Financial Statements of its subsidiary shall be attached along with the Financial Statements of the Company.

4. Share Capital:

During the year under review, the Authorised Share Capital of the Company has been increased from Rs. 62 Crore (divided into 6, 20, 00,000 equity shares of Rs. 10 each) to Rs. 82 Crore (divided into 8, 20,00,000 equity shares of Rs. 10/- each).

The Promoters/promoters'' Associates have also contributed Rs. 260 million as their additional contribution towards equity share capital for the allotment of 1,80,55,556 equity shares at a price of Rs. 14.40 (face value Rs. 10 and premium Rs. 4.40) per equity share in terms of sanctioned CDR package. The allotment of said shares to the proposed allottees is pending awaiting the in-principle approval of the Stock Exchanges required under the Listing Agreements and shall be completed in the next Financial Year.

5. Management Discussion and Analysis Report:

Management Discussion and Analysis of financial conditions and result of operations of the Company for the financial year 2013-14, as required under Clause 49 of the Listing Agreement, are annexed hereto as a separate statement in the Annual Report.

6. Corporate Governance Report:

The Company aimed to conduct its affairs in ethical manner and has in place a system of Corporate Governance. A separate report on Corporate Governance forming a part of the Annual Report is annexed hereto. A certificate from the Statutory Auditors of the Company regarding the compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to the report on Corporate Governance.

7. Auditors:

M/s. S.K. Bansal & Company, Chartered Accountants, Chandigarh, the Statutory Auditors, retire, at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. They have also given their eligibility in terms of Section 141 of the Companies Act, 2013. The Audit Committee and Board of Directors have recommended their appointment to the members for their approval in the ensuing Annual General Meeting.

8. Auditors'' Report

The Auditors'' Report on the Accounts of the Company for the year under review is self-explanatory and requires no comments.

9. Appointment of Cost Auditor:

The Board of Directors has approved the appointment of M/s. Anil Sharma & Co., Cost Accountants, Chandigarh, as the Cost Auditors of the Company for the financial year 2014-15,subject to the approval of the members in the ensuing Annual General Meeting of the Company. The cost audit report for the financial year 2013-14 will be forwarded to the Central Government as required under Law.

10. Internal Control System:

The Company has well defined internal control system. The Company takes abundant care to design, review and monitor the working of internal control system. Internal Audit in the organization is an independent appraisal activity and it measures the efficiency, adequacy and effectiveness of other controls in the organization. All significant issues are brought to the attention of the Audit Committee of the Board.

11. Fixed Deposits:

During the year 2013-14, the Company has not accepted any deposits from the public in terms of the provisions of Sections 58 A and 58 AA of the Companies Act, 1956.

12. Dividend :

In view of the loss incurred by the Company during the year under review, the Board of Directors has not recommended any dividend for the financial year 2013-14.

13. Personnel and Human Resources:

Your Company continues to lay emphasis on continued qualitative growth of its human resources by providing a congenial and conducive work environment in consonance with its belief that the real strength of its organization lies in its employees.

14. Industrial Relations:

The Industrial Relations between the employees and the management remained peaceful and cordial throughout the year at all the units of the Company.

15. Statement of Particulars of Employees:

A statement of Particulars of Employees pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956, is enclosed and forms a part of this report.

16. Group:

The Company, inter-alia with the following entities, constitutes a group as defined under the Monopolistic and Restrictive Trade Practices Act, 1969:

a) PNG Trading Private Limited

b) Parabolic Infrastructure Private Limited

17. Directors'' Responsibility Statement:

Pursuant to Section 134(5) of the Companies Act, 2013, the Directors confirm that:-

a. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2014 and of the profit and loss of the Company for the year ended on 31st March, 2014;

c. proper and sufficient care has been taken 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 frauds and other irregularities; and

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

e. adequate internal financial controls to be followed by the Company have been laid down and such controls were operating effectively.

f. proper and adequate systems to ensure compliance with the provisions of all applicable laws have been devised and such systems were operating effectively.

18. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo:

Energy conservation continues to be an area of major emphasis in our Company. The Company has adopted the strategy of bringing about a general awareness amongst all regarding energy conservation.

Particulars with respect to conservation of energy and other areas as per 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, (corresponding section 134 (3)(m) of the Companies Act, 2013) are annexed hereto and form part of this report.

19. Acknowledgement:

Your Directors are pleased to place on record their sincere gratitude to Government, Bankers and Business Constituents for their continued and valuable co-operation and support to the Company.

Your Directors also express their deep appreciation for the devoted and sincere services rendered by workers, staff and executives at all levels of operations of the Company during the year and we are confident that our Company will continue to receive such co-operation from them in future also

For and on Behalf of the Board

Pranav Gupta Chairman & Managing Director

Place: Chandigarh Dated: 14.08.2014


Mar 31, 2013

Dear members

The Board of Directors of your Company has pleasure in presenting the Seventeenth Annual Report on the affairs of the Company, together with the Audited Accounts of the Company for the year ended 31st March, 2013.

1. Financial Results:

The Financial Results for the year under review vis-à-vis the financial results for the previous year are as under:

(Rs. in million)

Particulars 2012-2013 2011-2012

Gross Sales 8280.69 10123.08

Profi t before Depreciation, Interest & Tax (PBDIT) (1084.49) 1406.32

Financial Expenses 697.77 641.37

Depreciation 167.90 100.54

Profi t before Tax (PBT) (1950.16) 664.41

Provision for Taxation:

-Current Tax - 132.88

-Deferred Tax 552.54 19.41

Profi t after Tax (PAT) (1397.62) 512.12

Profi ts available for equity shareholders 512.12

Appropriation:

Proposed Dividend on Equity Shares - 15.47

Corporate Dividend Tax - 2.51

Balance carried to Balance Sheet (1397.62) 494.14

Earning per Share(Basic) (22.58) 8.27

Earning per Share (Diluted) (22.58) 8.27



Financial Analysis and Review of Operations:

Your directors are pleased to report performance of the business operations as follows:- - Sales and Export:

During the year under review, your Company has registered a turnover of Rs. 8280.69 million as compared to Rs. 10123.08 million in the previous year showing thereby a decrease of 18.20%. The Export turnover has also been lower at Rs. 1182.94 million as compared to Rs. 1478.17 million in the previous year showing thereby a decrease of 19.97%.

The Sales have reduced largely on account of rapid selling price volatility and unviability of sales of few products due to high cost of import on account of rupee depreciation.

- Profi tability:

The Company incurred loss before depreciation, interest and tax (EBDIT) of Rs. (1084.49) million as compared to a profi t of Rs. 1406.32 million in the previous year. The Company incurred loss before tax (PBT) of Rs. (1950.16) million as compared to a profi t of Rs. 664.41 million in the previous year. After tax adjustment of Rs. 552.54 million (previous year Rs. 152.29 million), the net loss worked out to Rs. (1397.62) million as compared to a net profi t of Rs. 512.12 million in the previous year owing to the high interest rates, revaluation of semi fi nished stock because of the quality and eroded market prices.

- Fixed Assets:

The net fi xed assets (including work-in-progress) as at 31st March, 2013 were Rs. 4058.29 million as compared to Rs. 3751.81 million in the previous year.

2. Directors:

During the period under review, Mr. Manmohan Lal Sarin, Mr. Inder Bir Singh Passi, Mr. Koppisetty Srinivas and Mr. Gurpreet Singh Sandhu had resigned from the Directorship of the Company. Dr. Ram Kumar has also resigned from the Board w.e.f 6.08.2013. The Board places on record its appreciation for the valuable services rendered by them during their tenure as Directors of the Company.

The Board had appointed Mr. Balwan Bansal, an eminent practising Chartered Accountant as Additional Director w.e.f 28.11.2012 pursuant to Articles of Association of the company and Section 260 of the Companies Act, 1956, and he holds offi ce upto the date of ensuing Annual General Meeting. The company has received a notice from a member under Section 257 of the Companies Act, 1956, signifying his intention to propose the candidature of Mr. Balwan Bansal for the offi ce of Director of the Company at the ensuing Annual General Meeting.

The state Bank of India (SBI), had nominated Mr. Balbir Singh Bhasin, a retired Banker on the Board of Directors of the Company. Accordingly, he has been appointed as a Nominee Director of SBI on the Board of Directors of the Company w.e.f 10.08.2013.

Pursuant to the provisions of Companies Act, 1956 and Article of Associations of the Company, Mr. Arun Mathur and Mr. Vineet Gupta , the Directors of your Company, retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re- appointment.

The present term of appointment of Mr. Pranav Gupta as Managing Director and Mr. Vineet Gupta as Whole Time Director is expiring on 31.08.2013. The Board of Directors has approved their appointment for a further period of three years, subject to the approval of members in ensuing Annual General Meeting and approval of Central Government/ or any other authority, as may be required under the provisions of Companies Act,1956.

3. Subsidiaries

The Company has two subsidiary Companies namely M/s. Parabolic Research Labs Limited and M/s. Ziven Lifesciences Limited and your Company holds 98.99% and 92% share holding of the said companies, respectively. A statement under Section 212 of the Companies Act, 1956 of the subsidiary companies is annexed hereto with the Annual Report of the Company.

The Ministry of Corporate Affairs vide its circular dated 8th February, 2011 has, subject to the compliance with certain conditions, granted general exemption to the companies from applicability of Section 212 of the Companies Act, 1956 for attachment of Balance Sheet, P&L A/c, Directors'' Report and Auditors'' Report of the subsidiary companies with the Balance Sheet of the Company. The Board of Directors of the Company has decided not to attach the aforesaid documents of the subsidiary companies with the Balance Sheet of the Company and complied with the provisions of the said circular.

4. Financial Restructuring Under CDR System

During the year under review, the Company had given a Proposal for fi nancial restructuring under the Corporate Debt Restructuring Scheme of Reserve Bank of India (CDR). The said Restructuring Proposal has been approved by the CDR Empowered Group and Master Restructuring Agreement (MRA) has been executed on 28th March, 2013. The principal terms of Restructuring Package as envisaged in the MRA, inter-alia, include the following: - The cut off date is September 30th, 2012.

- Moratorium period is 2 years from the cut off date.

- Reschedulement of term loans which has been made payable in 32 structured Quarterly instalments.

- Rate of interest on all term loans /working capital loans reduced to 10.5% payable monthly.

- Conversion of entire working capital irregularity into WCTL.

- Sanction of Funded Interest Term Loan (FITL) of Rs. 137.70 crore payable in 32 structured quarterly instalments.

- The promoters to infuse funds by way of instruments (Equity and Convertible debt).

- Pledge of 100% of promoters'' shares in favour of the Monitoring Institution.

5. Share Capital:

During the year under review, there is no change in the Share Capital of the Company. However, in order to comply with the terms of restructuring package as sanctioned to the Company under CDR Scheme which inter-alia requires the promoters to infuse funds by way of instruments (Equity and Convertible debt), the Board of Directors has approved the increase of the Authorised Share Capital of the Company from Rs. 62 Crore (divided into 6,20,00,000 equity shares of Rs. 10 each) to Rs. 72 Crore (divided into 7,20,00,000 equity shares of Rs. 10 each), subject to the approval of members in the forthcoming Annual General Meeting of the Company.

6. Management Discussion and Analysis Report:

Management Discussion and Analysis of fi nancial conditions and result of operations of the Company for the fi nancial year 2012-13, as required under Clause 49 of the Listing Agreement, are annexed hereto as a separate statement in the Annual Report.

7. Corporate Governance Report:

The Company aimed to conduct its affairs in ethical manner and has in place a system of Corporate Governance. A separate report on Corporate Governance forming a part of the Annual Report is annexed hereto. A certifi cate from the Statutory Auditors of the Company regarding the compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to the report on Corporate Governance.

8. Auditors:

M/s. S.K. Bansal & Company, Chartered Accountants, Chandigarh, the Statutory Auditors, retire, at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. They have also given their eligibility in terms of Section 224 (1B) of the Companies Act, 1956. The Board of Directors has recommended their appointment to the members for their approval in the ensuing Annual General Meeting.

9. Auditors'' Report

The Auditors'' Report on the Accounts of the Company for the year under review is self-explanatory and requires no comments.

10. Appointment of Cost Auditor:

The Board of Directors has approved the appointment of M/s. Anil Sharma & Co., Cost Accountants, Chandigarh, as the Cost Auditors of the Company for the fi nancial year 2013-14. The cost audit report for the fi nancial year 2012-13 will be forwarded to the Central Government as required under Law.

11. Internal Control System:

The Company has well defi ned internal control system. The Company takes abundant care to design, review and monitor the working of internal control system. Internal Audit in the organization is an independent appraisal activity and it measures the effi ciency, adequacy and effectiveness of other controls in the organization. All signifi cant issues are brought to the attention of the Audit Committee of the Board.

12. Fixed Deposits:

During the year 2012-13, the Company has not accepted any deposits from the public in terms of the provisions of Sections 58 A and 58 AA of the Companies Act, 1956.

13. Dividend :

In view of the loss incurred by the Company during the year under review, the Board of Directors has not recommended any dividend for the fi nancial year 2012-13.

14. Personnel and Human Resources:

Your Company continues to lay emphasis on continued qualitative growth of its human resources by providing a congenial and conducive work environment in consonance with its belief that the real strength of its organization lies in its employees.

15. Industrial Relations:

The Industrial Relations between the employees and the management remained peaceful and cordial throughout the year at all the units of the Company.

16. Statement of Particulars of Employees

A Statement of Particulars of Employees pursuant to the provisions of Section 217(2A) of the Companies Act, 1956, is enclosed and forms part of this report.

17. GROUP:

The Company, inter-alia with the following entities, constitutes a group as defi ned under the Monopolistic and Restrictive Trade Practices Act, 1969:

a) PNG Trading Private Limited

b) Parabolic Infrastructure Private Limited

18. Directors'' Responsibility Statement:

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

a) in the preparation of the annual accounts, the applicable accounting standards have been followed; b) appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2013 and of the loss of the Company for the year ended on 31st March, 2013;

c) proper and suffi cient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act,1956 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; and

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

19. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo:

Energy conservation continues to be an area of major emphasis in our Company. The Company has adopted the strategy of bringing about a general awareness amongst all regarding energy conservation.

Particulars with respect to conservation of energy and other areas as per 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 annexed hereto and form part of this report.

20. Acknowledgement:

Your Directors are pleased to place on record their sincere gratitude to Government, Bankers and Business Constituents for their continued and valuable co-operation and support to the Company.

Your Directors also express their deep appreciation for the devoted and sincere services rendered by workers, staff and executives at all levels of operations of the Company during the year and we are confi dent that our Company will continue to receive such co-operation from them in future also.



For and on Behalf of the Board

Pranav Gupta

Chairman & Managing Director

Place: Chandigarh

Dated: 10th August, 2013


Mar 31, 2012

Dear Members,

The Board of Directors of your Company has pleasure in presenting the Sixteenth Annual Report on the affairs of the Company together with the Audited Accounts of the Company for the year ended 31st March, 2012.

1. Financial Results:

The Financial Results for the year under review vis-à-vis the financial results for the previous year are as under:

(Rs. in million)

Particulars 2011-2012 2010-2011

Gross Sales 10123.08 6752.97

Profit before Depreciation, Interest & Tax (PBDIT) 1406.32 1177.03

Financial Expenses 641.37 407.60

Depreciation 100.54 82.61

Profit before Tax (PBT) 664.41 686.82

Provision for Taxation:

- Current Tax 132.88 136.88

- Deferred Tax 19.41 21.21

Less: Taxation Adjustments for earlier years - 8.48

Profit after Tax (PAT) 512.12 520.25

Profits available for equity shareholders 512.12 520.25

Appropriation:

Proposed Dividend on Equity Shares 15.47 30.95

Corporate Dividend Tax 2.51 5.14

Surplus carried to Balance Sheet 494.14 484.16

Earnings per Share(Basic) 8.27 9.43

Earnings per Share (Diluted) 8.27 9.43

Financial Analysis and Review of Operations:

Your directors are pleased to report performance of the business operations as follows:-

- Sales and Export:

During the year under review, your Company has registered Gross sales of Rs. 10123.08 million as compared to Rs. 6752.97 million in the previous year showing an increase of 49.91 percent.

Further, your Company has registered an export of Rs. 1478.17 million as compared to Rs. 2301.99 million in the previous year showing a decrease of 35.79 per cent. A fall in the exports has been recorded on account of unrest in the global markets, the crisis in the Middle East and in Euro zone.

- Profitability :

The Company earned profit before depreciation, interest and tax (PBDIT) of Rs.1406.32 million as against Rs. 1177.03 million in the previous year, showing an increase of 19.48 per cent. The Company earned profit before tax (PBT) of Rs. 664.41 million as compared to Rs. 686.82 million in the previous year, showing a decrease of 3.26 percent. After making provision for tax of Rs. 152.29 million (previous year Rs. 158.09 million), net profit worked out to Rs. 512.12 million as compared to Rs. 520.25 million in the previous year showing a decrease of 1.56 percent mainly due to increased cost of imported raw material, due to depreciation in rupee value, and higher interest cost.

- Fixed Assets :

The net fixed assets (including work-in-progress) as at 31st March, 2012 were Rs. 3751.81 million as compared to Rs. 2752.07 million in the previous year.

2. Directors :

Dr. Ram Kumar and Mr. Inder Bir Singh Passi, Directors of your Company, retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re- appointment.

3. Share Capital :

During the year under review, there is no change in the Share Capital of the Company.

4. Dividend :

The Board of Directors of your Company has recommended a dividend of Rs. 0.25 per share on the Fully Paid-up Equity Share of the Company.

5. Subsidiary :

During the year under review, the Company had floated a new subsidiary Company namely M/s. Ziven Lifesciences Limited to carry on the formulations business. The present paid-up capital of that Company is Rs. 1,04,00,000/- out of which your Company holds 90.38% share capital of that Company. Further, your Company holds 98.99% of paid up capital of Rs. 4,95,00,000/- of Parabolic Research Labs Limited, another subsidiary of your Company. A statement under Section 212 of the Companies Act, 1956 of the subsidiary companies is annexed hereto.

6. Management Discussion and Analysis Report :

Management Discussion and Analysis of financial conditions and result of operations of the Company for the financial year 2011-12, as required under Clause 49 of the Listing Agreement are annexed hereto as a separate statement in the Annual Report.

7. Corporate Governance Report :

The Company aimed to conduct its affairs in an ethical manner. A separate report on Corporate Governance which forms a part of the Annual Report is annexed hereto. A certificate from the Statutory Auditors of the Company regarding the compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to report on corporate governance.

8. Auditors :

M/s. S.K. Bansal & Company, Chartered Accountants, Chandigarh, the Statutory Auditors, are retiring at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. They have also given their eligibility in terms of Section 224 (1B) of the Companies Act, 1956. The Audit Committee and Board of Directors have recommended their appointment for the financial year 2012-2013 to the members for their approval in the ensuing Annual General Meeting.

9. Auditors' Report :

The Auditors' Report on the Accounts of the Company for the year under review is self-explanatory and requires no comments.

10. Audit Committee :

During the year under review, the Audit Committee was reconstituted. The constituent members of the Audit Committee are Mr. Nikhil Goel, Mr. Inder Bir Singh Passi, Mr. Arun Mathur and Mr. Pranav Gupta. Mr. Nikhil Goel is the Chairman of the Audit Committee. The Committee met five times during the year. The detailed information pertaining to Audit Committee of the Company is given in the Corporate Governance report.

11. Cost Auditors :

The Board of Directors had re-appointed M/s. Anil Sharma & Co., Cost Accountants, Chandigarh, as the Cost Auditor of the Company for the financial year 2011-12. The Cost Auditor's report for the financial year 2011-12 will be forwarded to the Central Government as required under Law.

12. Internal Control System :

The Company has well defined internal control system. The Company takes abundant care to design, review and monitor the working of internal control system. Internal Audit in the organization is an independent appraisal activity and it measures the efficiency, adequacy and effectiveness of other controls in the organization. All significant issues are brought to the attention of the Audit Committee of the Board.

13. Fixed Deposits :

During the year 2011-12, the Company has not invited/accepted any deposits from the public in terms of the provisions of Sections 58 A and 58 AA of the Companies Act, 1956.

14. Human Resources / Industrial Relations :

Your Company continues to lay emphasis on continued qualitative growth of its human resources by providing a congenial and conducive work environment in consonance with its belief that the real strength of its organisation lies in its employees. During the year the Company employed over 1000 employees. As pursuit of proactive policies for industrial relations, the industrial relations between the employees and the management remained peaceful and cordial throughout the year at all offices and units of the Company.

15. Statement of Particulars of Employees :

A Statement of Particulars of Employees pursuant to the provisions of Section 217(2A) of the Companies Act, 1956 is annexed hereto and forms part of this report.

16. Group :

The Company, inter-alia with the following entities, constitutes a group as defined under the Monopolistic and Restrictive Trade Practices Act, 1969:

a) PNG Trading Private Limited

b) Parabolic Infrastructure Private Limited

17. Directors' Responsibility Statement :

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors confirm that:- a. in the preparation of the annual accounts, the applicable accounting standards have been followed;

b. appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2012 and of the profit of the Company for the year ended on 31st March, 2012;

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

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

18. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo :

Energy conservation continues to be an area of major emphasis in our Company. The Company has adopted the strategy of bringing about a general awareness amongst all regarding energy conservation.

Particulars with respect to conservation of energy and other areas as per 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 annexed hereto and form part of this report.

19. Acknowledgement :

Your Directors are pleased to place on record their sincere gratitude to Government, Financial Institutions, Bankers and Business Constituents for their continued and valuable co-operation and support to the Company.

Your Directors also express their deep appreciation for the devoted and sincere services rendered by employees at all levels of operations of the Company during the year and we are confident that our Company will continue to receive such co-operation from them in future also.

For and on behalf of the Board

Vineet Gupta Pranav Gupta

Whole Time Director Managing Director

Place: Chandigarh Dated: 14th August, 2012


Mar 31, 2011

Dear Members,

The Board of Directors of your Company has pleasure in presenting the Fifteenth Annual Report on the affairs of the Company together with the Audited Accounts of the Company for the year ended 31 st March, 2011.

1. Financial Results:

The financial results for the year under review vis-a-vis the financial results for the previous year are as under:

(? in million)

Particulars 2010-2011 2009-2010

Gross Sales 6752.97 5590.12

Profit before Depreciation, Interest & Tax (PBDIT) 1177.03 878.75

Financial Expenses 407.60 382.20

Depreciation 82.61 56.23

Profit before Tax (PBT) 686.82 440.31

Provision for Taxation:

-Current Tax 136.88 74.83

-Deferred Tax 21.21 23.50

Profit after Tax (PAT) 528.73 341.98

Less: Taxation Adjustments for earlier years 8.48 (0.03)

Less: Prior Period Items - 46.57

Profits available for equity shareholders 520.25 295.44 Appropriation:

Proposed Dividend on Equity Shares 30.95 -

Corporate Dividend Tax 5.14 -

Surplus carried to Balance Sheet 484.16 295.44

Earnings per Share (Basic) 9.43 17.91

Earnings per Share (Diluted) 9.43 17.91

Financial Analysis and Review of Operations:

Your directors are pleased to report performance of the business operations as follows:-

¦ Sales and Export:

During the year under review, your Company has registered a turnover of Rs. 6752.97 Million as compared to Rs. 5590.12 Million in the previous year showing thereby an increase of 20.80 percent.

Further, your Company has registered an export of Rs. 2301.99 million as compared to Rs.1611.80 million in the previous year showing thereby an increase of 42.82 per cent.

¦ Profitability:

The Company earned profit before depreciation, interest and tax (EBIDT) of Rs.1177.03 million as against Rs. 878.75 million in the previous year, showing an increase of 33.94 per cent. The Company earned profit before tax (PBT) of Rs. 686.82 million as compared to Rs. 440.31 million in the previous year, showing an increase of 55.98 per cent. After providing for taxation of Rs. 158.09 million (previous year Rs. 98.33 million), net profit worked outto Rs. 528.73 million as compared to Rs. 341.98 million in the previous year showing an increase of 54.60 per cent.

¦ Fixed Assets:

The net fixed assets (including work-in-progress) as at 31 st March, 2011 were Rs. 2752.07 million as compared to Rs. 1708.93 million in the previous year. During the year, the Company added assets amounting to Rs.1264.44 million.

2. Directors:

During the year under review, Dr. Deepali Gupta has resigned from the Directorship of the Company w.e.f. 8th November, 2010. The Board places on record its appreciation for the valuable services rendered by Dr. Deepali Gupta during her tenure as Director of the Company.

The Board of Directors had appointed Mr. Gurpreet Singh Sandhu and Mr. Nikhil Goel in its meeting held on 8th November, 2010 as Additional Directors on the Board of Directors, pursuant to Article 79 of the Articles of Association of the Company and Section 260 of the Companies Act, 1956.

The Company has received notices from some members under Section 257 of the Companies Act, 1956 signifying their intention to appoint Mr. Gurpreet Singh Sandhu and Mr. Nikhil Goel as Directors of the Company. Requisite approval for their appointment is being sought at the ensuing Annual General Meeting.

Mr. ArunMathur, Director of your Company, retire by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment.

Mr. Pradeep Diwan, Director of your Company, retire by rotation at the forthcoming Annual General Meeting & he has not offered for re-appointment. The Company has received a notice from a member under the provisions of the Companies Act, 1956 signifying his intention to appoint Mr. Manmohan Lai Sarin as a director liable to retire by rotation.

3. Share Capital:

During the year under review, there is no change in the Share Capital of the Company.

4. Dividend:

The Board of Directors of your Company has recommended a dividend of Rs.0.50 per share on the Fully Paid-up Equity Shares of the Company.

5. Subsidiary:

During the year under review, the Company invested a sum of Rs.1,00,00,000 by way of subscribing 10,00,000 equity shares of Rs.10/- each of M/s. Parabolic Research Labs Limited. These shares constitute 98.33% of the paid-up capital of the above said subsidiary company.

A statement under Section 212 of the Companies Act, 1956 of the subsidiary company is annexed hereto with the Annual Report of the Company.

6. Utilisation of Funds:

The members are aware that the Company made its Initial Public Offer (IPO) of its equity shares in the months of June, 2010 byway of Public Issue of 2,66,66,667.00 equity shares of face value of Rs. 10/- each at a premium of Rs. 65/- per equity shares aggregating to Rs. 200.00 Crores through 100% Book Building Process including 2025702 equity shares offered by M/s. BTS India Private Equity Fund Limited and M/s. Alden Global (Mauritius) Limited aggregate to Rs. 151.93 million. As per the terms and conditions of the prospectus of the IPO, the issue proceeds should be utilised for the purposes mentioned therein. Out of the total IPO proceeds, the Company has already utilised a sum of Rs. 128.39 million upto 31 st March, 2011 towards the uses as mentioned in the Prospectus.

However, due to various factors beyond the control of the Company, the Company intends to alter/ vary/ revise/ amend/ re-finalise the terms and conditions pertaining to utilisation of issue proceeds as mentioned in the prospectus dated 24th June, 2010 in a manner which are more economical and beneficial in the interest of the Company and also appropriate in the prevailing market conditions.

Pursuant to provisions of Section 61 of the Companies Act, 1956, a company shall not, at any time, vary the terms of a contract referred to in the prospectus or statement in lieu of prospectus, except subject to the approval of or, or except an authority given by the company in general meeting.

Therefore, the Board of Directors of your Company in its meeting held on 13th May, 2011 has recommended a resolution to the members for their approval authorising the Board of Directors of the Company in this regard. Accordingly, the approval from the members of the Company is being sought in the ensuing Annual General Meeting.

7. Management Discussion and Analysis Report:

Management Discussion and Analysis of financial conditions and result of operations of the Company for the financial year 2010-11, as required under Clause 49 of the Listing Agreement, are annexed hereto as a separate statement in the Annual Report.

8. Corporate Governance Report:

The Company aimed to conduct its affairs in an ethical manner. A separate report on Corporate Governance forms a part of the Annual Report is annexed hereto. A certificate from the Statutory Auditors of the Company regarding the compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to the report on Corporate Governance.

9. Auditors:

M/s. S.K. Bansal & Company, Chartered Accountants, Chandigarh, the Statutory Auditors, retiring at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. They have also given their eligibility in terms of Section 224 (1B) of the Companies Act, 1956. The Audit Committee and Board of Directors have recommended their appointment to the members for their approval in the ensuing Annual General Meeting.

10. Auditors'Report:

The Auditors' Report on the Accounts of the Company for the year under review is self-explanatory and requires no comments.

11. Audit Committee:

The constituent members of the Audit Committee are Mr. Pardeep Diwan, Mr. Inder Bir Singh Passi and Mr. Pranav Gupta. The Committee met five times during the year. The detailed information pertaining to Audit Committee of the Company is given in the Corporate Governance Report.

12. Appointment of Cost Auditor:

During the year under review, the Company has received a Cost Order dated 16th December 2010 from the Cost Audit Branch, Ministry of Corporate Affairs, New Delhi wherein it has been directed to conduct an audit of the cost accounts of the Company in respect of Bulk Drugs required to made under the Records (Bulk Drugs) Rules, 1974. Accordingly the Board of Directors vide its resolution dated 31 st March, 2011 appointed M/s Anil Sharma&Co., Cost Accountants, Chandigarh, as a Cost Auditor of the Company for the financial year 2010-11. The Cost Auditor Report for the financial year 2010-11 will be forwarded to the Central Government as required under Law.

13. Internal Control System:

The Company has well defined internal control system. The Company takes abundant care to design, review and monitor the working of internal control system. Internal Audit in the organization is an independent appraisal activity and it measures the efficiency, adequacy and effectiveness of other controls in the organization. All significant issues are brought to the attention of the Audit Committee of the Board.

14. Fixed Deposits:

During the year 2010-11, the Company has not accepted any deposits from the public in terms of the provisions of Sections 58 Aand 58 AA of the Companies Act, 1956.

15. Personnel and Human Resources:

Your Company continues to lay emphasis on continued qualitative growth of its human resources by providing a congenial and conducive work environment in consonance with its belief that the real strength of its organisation lies in its employees.

16. Industrial Relations:

The Industrial Relations between the employees and the management remained peaceful and cordial throughout the year at all the units of the Company.

17. Statement of Particulars of Employees:

A Statement of Particulars of Employees pursuant to the provisions of Section 217(2A) of the Companies Act, 1956 is enclosed and forms part of this report.

18. Group:

The Company inter-alia with the following entities, constitutes a "Group" as defined under the Monopolistic and Restrictive Trade Practices Act, 1969:

a) PNG Trading Private Limited

b) Parabolic Infrastructure Private Limited

19. Directors' Responsibility Statement:

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

a. in the preparation of the annual accounts, the applicable accounting standards have been followed;

b. appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 st March, 2011 and of the profit of the Company for the year ended on 31 st March, 2011;

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

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

20.Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo:

Energy conservation continues to be an area of major emphasis in our Company. The Company has adopted the strategy of bringing about a general awareness amongst all regarding energy conservation.

Particulars with respect to conservation of energy and other areas as per 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 annexed hereto and form part of this report.

21. Acknowledgment:

Your Directors are pleased to place on record their sincere gratitude to Government, Bankers and Business Constituents for their continued and valuable co-operation and support to the Company.

Your Directors also express their deep appreciation for the devoted and sincere services rendered by workers, staff and executives at all levels of operations of the Company during the year and we are confident that our Company will continue to receive such co-operation from them in future also.

FOR AND ON BEHALF OFTHE BOARD Pranav Gupta Vineet Gupta Managing Director Whole Time Director Place: Chandigarh Dated: 13th August, 2011

 
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