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Directors Report of RPG Life Sciences Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the annual report and audited statement of accounts of the Company for the year ended on March 31, 2015.

1. FINANCIAL RESULTS

The summary of financial performance of the Company for the year under review is given below:

(Rs in Crores)

2014-15 2013-14

Total Income 243.18 237.91

Profit before depreciation,interest and tax 15.08 14.04

Less: Interest 2.72 2.60

Less: Depreciation 11.36 10.61

Profit for the year before tax 1.00 0.83

Add: Exceptional Item - 64.14

Profit before tax 1.00 64.97

Less: Provision for tax - 11.57 (including Deferred Tax)

Profit for the year after tax 1.00 53.40

Appropriations:

Proposed dividend 1.32 3.31

Tax on proposed dividend 0.27 0.56

Transfer to General Reserve - 5.34

Balance carried forward to balance sheet 68.82 69.41

2. DIVIDEND

The Diretors recommend a dividend of Rs. 0.80 (10%) per equity share of Rs. 8/- each for the financial year ended March 31, 2015.

3. OPERATIONS

The Company earned a total income of Rs. 243.18 crores for the year as compared to Rs. 237.91 crores during the previous year and a profit before tax of Rs. 1.00 crore as against Rs. 0.83 crore during the previous year. The profitability of the Company remained subdued because of lower orders of Azathioprine in the Generics business, continued competitive price pressure for Biotech, APIs in the domestic market, delay in launches of branded formulations because of increased regulatory requirements, price pressure on the products under price control in domestic formulations market and higher operating & maintenance expenditure to adhere to the stringent quality standards laid down by regulatory authorities.

As reported earlier, subsequent to the pre-approval inspection by the USFDA (US Food and Drug Administration) of the Company's API facility at Navi Mumbai and the formulation facility at Ankleshwar, the Company had received, in the year 2013-14, certain stipulations from the USFDA. The Company has undertook corrective measures to achieve complete adherence with the stipulations indicated by the USFDA, and it is expected that it would be completed over the next twelve months. As a result of this development, the plans of the Company to enter the US markets have been delayed.

The Company continues to hold EU GMP, WHO GMP and TGA, Australia certifications for the API facility at Navi Mumbai plant and UK MHRA certification for its formulation plant at Ankleshwar.

Formulations Business:

Performance

During the year under review, the Formulations business achieved a sales revenue of Rs. 157.16 crores, with a growth of 6% over the previous year. Prescription focused business grew at 10.40% in line with the industry growth. The productivity of sales force improved by 20% year-on-year.

The Company achieved a growth of 16.10% in the financial year ended March 2015, higher than the industry average of 12.90%. As per the data compiled by Pharmatrac, a market researcher, the Company has improved its rank by three positions in sales value terms over the previous year. The Company's Nephrocare Division continues to feature among the top 5 Indian Companies operating in the renal therapy segment.

The continued thrust on the Focus brand strategy in the Company's core therapies has generated a growth of 20% in this segment over the previous year. Some of the promising brands like Tricaine & Rabee in Gastro-Intestinal therapy, RPO & Alfalog in Dialysis Therapy and Frastim in Oncology have grown by over 15%. Minmin Tonic in the Nutritional Therapy crossed Rs. 4 crores mark in the first 2 years of launch, growing by over 81% in the fiercely competitive tonic market. Dialysis & Transplant Therapies grew by 24% & 13%, respectively. The super specialty Oncology business showed impressive growth as well. The CompanyRs.s major brands such as Aldactone, Naprosyn, Serenace and Azoran showed healthy growth in the year under review.

In the exports market, the Branded Formulations business registered a positive growth.

Outlook

In the current year, the Company will continue its emphasis on Focus brands and leverage the strength of its key

brands to fuel growth. Dedicated efforts on strengthening Cardiology, Anti-Diabetic, Oncology and Nephrology therapies is expected to boost growth in the Chronic Specialty therapies segment while Gastrointestinal, Pain Management and Nutritionals will drive growth in the acute therapies segment. With focus on Dialysis and Transplant therapies, the Company will strive to consolidate its position in the Nephrocare space both in domestic as well as export markets.

Brand Extensions and new product launches in therapies where the Company's core competencies exist, in line with therapy gaps identified, are growth drivers. In addition, entry into new therapies will provide avenues for further growth. Training of field force will continue to remain the cornerstone for improving productivity by strengthening product knowledge and selling skills.

Global Generics Business:

Performance

The Global Generics business achieved sales revenue of Rs. 16.17 crores. The business witnessed a de-growth by 31% over the previous year owing to a dip in orders from one of its key customers which was carrying excess inventory from the previous year.

Outlook

The dip in the performance of Generics business is likely to be temporary, as it is expected that key customers will resume orders during the current financial year. The Company signed two new contracts for Sertraline and Azathioprine products and has also fared well in tenders in Germany, which are likely to drive growth in the next year. The Company's presence in the German tender market will become stronger as market penetration improves. Addition of new customers and new products will be the key growth drivers in the Generics business.

Active Pharmaceutical Ingredients (APl/Bulk Drugs) Business:

Performance

The API business achieved sales revenue of Rs. 36.72 crores, a growth of 3% over the last year. The traditional markets of Latin America & Middle East in which the Company enjoys a fair market share continued to perform well. Products such as Quinfamide, Risperidone, Nicorandil & Azathioprine registered good growth.

Outlook

API business has a strategic importance in the overall growth of the Company. The Company has a backward integration for Di-phenoxylate and Azathioprine (products of the formulation business). One of the key objectives of the Company is to build a strong and sustainable product portfolio. It has a plan to introduce new APIs every year in various key segments. On the basis of EU GMP certification, the Company plans to penetrate EU markets with a new API towards the end of the current financial year. With the emergence of BRIC markets, apart from domestic markets, Brazil & China would be increasingly important markets for some niche APIs that the Company manufactures.

Biotech Business:

Performance

The Biotech business achieved sales of Rs. 23.14 crores, registering a growth of 8% over the previous year. The Company has managed to register reasonable growth in this division despite increasing competitive and pricing pressures in the domestic market. Growth was driven by strengthening existing client relationships and addition of new clients in Russia, Mexico and China. The Company received approvals for Doxorubicin and Epirubicin in Russia and Korea, respectively.

The Company continued to make several improvements and upgrades in its Biotech facility, to meet the requirements of various markets in emerging geographies. In line with its strategy to take products to regulated markets, the Company has received COS (Certificate of Suitability) for Doxorubicin from EDQM (European Directive Quality Medicines) in France and also plans to file for COS for Epirubicin in the current financial year.

Outlook

Doxorubicin and Epirubicin, used in treatment of cancer, which the Company manufactures, compete with the best in class in the category. These products will remain key for growth in this business segment for the Company. The Company is planning to get certain additional regulatory approvals for its plant to enter the regulated markets like Europe. COS for Doxorubicin and Epirubicin and plant approvals from regulatory authorities would not only help in expanding geographies but also margins as the price realizations are higher in exports markets as compared to the domestic market.

4. EXTRACT OF ANNUAL RETURN

As required under Section 92 of the Companies Act, 2013, details forming part of the extract of the Annual Return in form MGT-9, is annexed herewith as Annexure A.

5. MEETINGS OF THE BOARD

The details of Board Meetings held during the year are given in the Corporate Governance Report.

6. DIRECTOR'S RESPONSIBILITY STATEMENT

The Directors confirm that -

a) in the preparation of the annual accounts for the financial year ended March 31, 2015, the applicable accounting standards have been followed and there were no material departures;

b) the directors have selected and applied accounting policies in a consistent manner 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 at the end of the financial year as at March 31, 2015 and of the profit and loss of the Company for that period;

c) 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;

d) the directors have prepared the annual accounts on a going concern basis;

e) the directors, have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and are operating effectively.

7. STATEMENT ON DECLARATION OF INDEPENDENT DIRECTORS

The Company has received declaration from each of the Independent Directors under Section 149(6) and (7) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

8. PECUNIARY RELATIONSHIP OR TRANSACTIONS OF THE NON-EXECUTIVE DIRECTORS AND DISCLOSURES ON THE REMUNERATION OF THE DIRECTORS

All pecuniary relationship or transactions of the Non- Executive Directors vis-a-vis the Company, along with criteria for such payments and disclosures on the remuneration of the Directors along with their shareholding are disclosed in Corporate Governance Report and Form MGT-9 which forms a part of this Report.

9. NOMINATION AND REMUNERATION POLICY

The Company's policy on Directors' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under Section 178(3) of the Companies Act, 2013, is annexed with this Report as Annexure B.

10. EXPLANATION AND COMMENTS ON AUDITOR'S AND SECRETARIAL AUDIT REPORT

There is no qualification, disclaimer, reservation or adverse remark made by the Statutory Auditors in Auditors' Report.

Further, there is no qualification, disclaimer, reservation or adverse remark made by the Company Secretary in practice in Secretarial Audit Report.

11. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Loans, Guarantees and Investments made by the Company are within the limits prescribed under the provisions of Section 186 of the Companies Act, 2013 and the details are given in the notes to the Financial Statements.

12. RELATED PARTY TRANSACTIONS

All Related Party Transactions are placed before the Audit Committee and the Board for approval, wherever necessary. The related party transactions entered during the financial year were on an arm's length basis and were in the ordinary course of business.

There were no contracts or arrangements or transactions entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 during the course of business which were not at arm's length basis.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website www.rpglifesciences.com.

13. TRANSFER TO RESERVES

The Company has not transferred any sum to General Reserve in view of low profits made during the financial year ended March 2015.

14. MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year on March 31, 2015 to which the financial statements relate and the date of this Report.

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

The particulars as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of Companies (Accounts) Rules, 2014, are given in Annexure C to this Report.

16. RISK MANAGEMENT

The Company has constituted a Risk Management Committee (RMC). The details of Committee and its terms of reference are set out in the Corporate Governance Report. The Company has also adopted a Risk Management Policy in accordance with the provisions of the Act and Clause 49 of the Listing Agreement.

The Company has a robust Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on business objectives and enhance the Company's competitive advantage.

The business risk framework defines the risk identification and its management approach across the enterprise at various levels including documentation and reporting. This framework helps in identifying trends, assessing business exposure and quantifying any potential impact on the Company's business.

17. CORPORATE SOCIAL REPONSIBILITY

The Company was out of the limits prescribed under Section 135 of the Companies Act, 2013 during the financial year 2014-15.

18. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. H. V. Goenka retires by rotation and being eligible offers himself for re-appointment at the ensuing Annual General Meeting.

Mr. R. A. Shah resigned from the Directorship of the Company with effect from September 30, 2014.

Mr. Ajit Singh Chouhan resigned as the Managing Director and as a Director of the Company with effect from September 30, 2014 and January 2, 2015, respectively.

At the Board Meeting held on October 20, 2014, Ms. Neera Saggi was appointed as an Additional Director and Mr. CT. Renganathan was appointed as Additional Director and Managing Director of the Company with effect from January 2, 2015.

The shareholders through resolutions passed by Postal Ballot have approved the appointment of Ms. Neera Saggi as an Independent Director for a term of five consecutive years with effect from March 19, 2015 to March 18, 2020 and also approved appointment of Mr. CT. Renganathan as a Managing Director of the Company for a term of 3 years from January 2, 2015 to January 1, 2018.

Mr. C. Vinayaraghavan resigned from the Directorship of the Company with effect from January 2, 2015. Mr. Sachin Nandgaonkar has been appointed as a Non-Executive Director of the Company with effect from January 23, 2015, in the casual vacancy caused due to the resignation of Mr. C. Vinayaraghavan.

The Board places on record its appreciation for the services rendered by Mr. R. A. Shah, Mr. Ajit Singh Chouhan and Mr. C. Vinayaraghavan during their tenure with the Company.

None of the aforesaid Directors are related to any other Director of the Company.

During the year under review, Mr. CT. Renganathan, Managing Director, Mr. Sachin Raole, CFO & Sr. V.P. - Corporate Services and Mr. Rajesh Shirambekar, Head - Legal & Company Secretary were designated as Key Managerial Personnel within the meaning of Section 203 of the Companies Act, 2013.

19. SUBSIDIARY COMPANIES

There were no Companies which have become or ceased to be Subsidiaries, joint ventures or associate companies during the year.

20. FIXED DEPOSITS

Your Company has not accepted any fixed deposit during the year under review under Chapter V of the Companies Act, 2013. As on March 31, 2015, no deposit was overdue and deposits aggregating to '5.40 lakhs were lying unclaimed with the Company.

21. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS

There are no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and the Company's operations in the future.

22. CHANGE IN THE NATURE OF BUSINESS

During the year under review, there was no change in the nature of business.

23. INTERNAL FINANCIAL CONTROL

Details in respect of adequacy of internal financial controls with reference to the Financial Statements are stated in Management Discussion and Analysis which forms part of this Annual Report.

* Mr. Narendra Ambwani, Ms. Neera Saggi, Mr. Sachin Nandgaonkar and Mr. CT. Renganathan were appointed on the Board of Directors in the financial year 2014-15 and therefore comparable amount of remuneration was not available for determination of percentage increase in the remuneration.

** The percentage increase in the median remuneration of employees has been calculated after excluding Managing Director's remuneration.

25. WHISTLE BLOWER POLICY

The Audit Committee's terms of reference inter-alia include vigil mechanism which also incorporates a Whistle Blower Policy in terms of Section 177(10) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The Company has adopted a Whistle Blower Policy in the meeting of Board of Directors held on July 24, 2014. The Whistle Blower mechanism provides for Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of Company's Code of Governance and Ethics. The Whistle Blower Policy is uploaded on the Company's website www.rpglifesciences.com.

26. FAMILIARISATION PROGRAMMES FOR INDEPENDENT DIRECTORS

The Company has familiarisation programmes and the details of it have been uploaded on the website of the Company on the link below: http://www.rpglifesciences.com/financial_policies.jsp.

27. FORMAL ANNUAL EVALUATION OF BOARD AND ITS COMMITTEES

Pursuant to provisions of Section 134 of the Companies Act, 2013 and clause 49 of the Listing Agreement, the Nomination and Remuneration Committee laid down criteria for evaluating Board effectiveness by assessing performance of the Board as a whole, performance of individual Director and Committees of the Board namely Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee. The Board approved the criteria laid down by Nomination and Remuneration Committee for evaluating Board effectiveness and engaged a third party agency to conduct Board effectiveness survey during the year under review.

28. AUDITORS

Statutory Auditors:

The members of the Company at its Annual General Meeting (AGM) held on September 25, 2014 appointed M/s. Lovelock & Lewes as the Statutory Auditors for a period of three consecutive years from the conclusion of the seventh AGM to the conclusion of the tenth AGM.

The auditors have confirmed that their appointment shall be in compliance with Section 139 and 141 of the Companies Act, 2013 subject to ratification at the ensuing AGM by the shareholders. The Board recommends ratification of appointment of M/s. Lovelock & Lewes as the Statutory Auditors for the financial year 2015-16.

Internal Auditors:

M/s. Aneja Associates, Chartered Accountants, are the Internal Auditors of the Company.

Secretarial Auditors:

M/s. Parikh Parekh & Associates, Practicing Company Secretaries, are the Secretarial Auditors of the Company. The Secretarial Audit Report required pursuant to sub-section (3) of Section 134 and Section 204 (1) of the Companies Act, 2013, is given in Annexure D to this Report.

Cost Auditors:

Pursuant to the provisions of Section 233B of the Companies Act, 1956, M/s. Kirit Mehta & Co. (Registration No. 000353), Cost Accountants, was appointed to conduct audit of cost records of Pharmaceutical Activities for the year ended March 31, 2015. Cost Audit reports would be submitted to the Central Government within the prescribed time. Pursuant to Rule 5 of the Companies (Cost Audit Report) Rules, 2011, cost audit reports for Pharmaceutical Activities for the year ended March 31, 2014 was filed with the Central Government on September 18, 2014.

29. EMPLOYEES STOCK OPTION PLAN

The Company has "2005 Employee Stock Option Plan" (ESOP 2005) for granting performance based stock option to employees. In the financial year 2014-15, 864 equity shares were allotted under ESOP 2005. The Disclosures in compliance with clause 12 of the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 read with clause of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 in this respect are stated in Annxure E to this report.

Disclosures for the financial year ended March 31, 2015 regarding ESOP 2005 in terms of Companies (Share Capital and Debentures) Rules, 2014 are as below:

Particulars ESOP 2005

Options Granted Nil

Options vested 10,878

Options exercised 864

The total no of shares arising as a 864 result of exercise of options

Options lapsed/cancelled during the year Nil

The exercise price ' 32.06

Variation of terms of options No variation in the terms of options during the year under review

Money realized by exercise of options 27,700

Total no of options in force 10,014

Employee wise details of options granted to:

Key Managerial Personnel (KMP) No new options during the year under review were granted to KMPs

Any other employee who receives a grant of Nil options in any one year of option amounting to five percent or more of options granted during that year

Identified employees who were granted Nil option during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant

30. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The particulars of the employees in compliance with the provisions of Section 134(3)(q) read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 will be provided to the shareholders upon request. The same shall also be available for inspection by the shareholders of the Company at the Registered Office of the Company during business hours on working days of the Company till the date of Annual General Meeting of the Company.

31. MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE REPORT

In compliance with Clause 49 of the listing agreement, Management Discussion and Analysis and Corporate Governance Report, as approved by the Board of Directors, together with a certificate from a Practicing Company Secretary confirming the compliance with the requirements of Corporate Governance policies are set out in the Annexure forming part of this Annual Report.

32. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT THE WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Internal Complaints Committee has been set up to redress complaints.

The Company has not received any complaint of sexual harassment during the financial year 2014-15.

33. MATERIAL TRANSACTIONS WITH RELATED PARTIES

The Company has not entered in to any transaction with related parties during the year under review which requires reporting in Form AOC-2 in terms of Companies Act, 2013 read with Companies (Accounts) Rules, 2014.

34. SAFETY

Safety inspections and audits were periodically carried out during the year across all factories. The Company also organised safety awareness programmes to impart safety training to its employees.

35. AWARDS

Your Company has won the prestigious Indian Drugs Manufacturers Association (IDMA) Quality Excellence award 2014 in the Gold Category for its API Plant at Navi Mumbai.

36. APPRECIATION

Your Directors record their appreciation for the valuable services rendered by all employees of the Company, their gratitude to the banks for their assistance and to the Company's shareholders, customers and suppliers for their continued support.

For and on behalf of the Board of Directors

H.V. Goenka Chairman

Place: Mumbai Date: April 29, 2015


Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the annual report and audited statement of accounts of the Company for the year ended on March 31, 2014.

1. FINANCIAL RESULTS

The summary of financial performance of the Company for the year under review is given below:

(Rs. in Crore)

2013-14 2012-13

Total Income 237.91 223.42

Profit before depreciation, 14.04 17.85 interest and tax

Less: Interest 2.60 7.44

Less: Depreciation 10.61 9.87 Profit for the year before tax 0.83 0.54

Add: Exceptional Item 64.14 - Profit before tax 64.97 0.54

Less: Provision for tax 11.57 (3.87)

(including Deferred Tax)

Profit for the year after tax 53.40 4.41

Appropriations:

Proposed dividend 3.31 1.98

Tax on proposed dividend 0.56 0.34

Transfer to General Reserve 5.34 0.22

Balance carried forward to 69.41 25.22

balance sheet

2. DIVIDEND

Your Directors recommend a dividend of Rs. 1.20 (15%) and a special dividend of Rs. 0.80 (10%) per equity share of Rs. 8/- each on account of extraordinary income. Therefore, the total divided recommended is Rs. 2.00 (25%) per equity share of Rs. 8/- each for the financial year ended March 31, 2014.

3. OPERATIONS

Your Company earned a total income of Rs. 237.91 crores for the year as compared to Rs. 223.42 crores during the previous year and a profit before tax of Rs. 0.83 crore as against Rs. 0.54 crore during the previous year. After providing for depreciation, interest and addition of exceptional income of Rs. 64.14 crores arising on sale of a part of Navi Mumbai land, the profit after tax for the year stood at Rs. 53.40 crores as compared to Rs. 4.41 crores for the previous year. The operating profit of the Company was lower due to a provision for doubtful debts of Rs. 6.74 crores arising from outstanding receivables from certain parties to whom goods were supplied as per contracts. The Company has already initiated legal action against these parties.

Subsequent to the pre-approval inspection by the USFDA of the Company''s API facility at Navi Mumbai and the formulation facility at Ankleshwar, the Company has received a notice of non-compliance and a warning letter from the USFDA. The non- approval of facilities would prolong future plans of entering the US market. The estimated time required for corrective steps and complete adherence with the stipulations indicated by USFDA is about two years.

Even though Company continues to hold EU GMP, WHO GMP and TGA, Australia certifications for the API facility at Navi Mumbai plant and UK MHRA certification for its formulation plant at Ankleshwar, some of its existing business has been impacted during the year as a result of the warning letter received from USFDA.

Formulations Business:

Performance:

During the year under review, the Formulations business achieved sales revenue of Rs. 153 crores, with a growth of 9.8% over the previous year. The Company improved its prescription ratings by 3 ranks. Nephrocare Division features among the top 5 Indian Companies operating under this space. Acute care business grew by 13% vis-a-vis market growth of 8%, while Specialty business grew by 16% compared to market growth of 14%.

Continued thrust on Focus brand strategy in the Company''s core therapies has fuelled growth. Focus brands achieved a growth of 20% over the previous year. Some of the promising brands like Tricaine in Gastro-Intestinal therapy, Minmin Tonic in Nutritional Therapy, RPO & Alfalog in Dialysis Therapy, Frastim in Oncology and Anti-Diabetic Therapy have grown more than 20%. Company''s major brands such as Aldactone, Naprosyn, Serenace and Azoran showed healthy growth in the year under review.

In addition, productivity improvement of the sales force played a significant role in achieving growth.

In the export markets, the Company has received regulatory approvals for its manufacturing facility from Tanzania, Ethiopia, Kenya and Algeria.

Outlook:

The Company will continue its emphasis on Focus brands and leverage the strength of the key brands to fuel growth. Gastrointestinal, Respiratory, Pain Management and Nutritionals will drive growth in the acute therapies while further strengthening of Cardiology, Anti-Diabetic, Oncology and Nephrology therapies will boost growth in the Chronic Specialty therapies. With focus on Immunosuppressant therapies, the Company will consolidate its position in the Nephrocare space both in Domestic as well as export markets.

Launching new products in therapies where the Company''s core competencies exist, in line with therapy gaps identified

by prescription studies, will be a driver of growth in sales. Training of the field force will continue to remain the cornerstone for improving productivity by strengthening product knowledge and sales skills.

Global Generics Business:

Performance:

The Global Generics business achieved sales revenue of Rs.18.90 crore, with a growth of 9% over the previous year. The key contributing factor for the growth was increased focus on existing clients in Canada and UK. Today, given the facility for manufacturing immunosuppressants, APIs and oral solid dosage forms, your Company enjoys a good share of the Azathioprine market. However, more generic companies are expected to enter the market with Azathioprine formulations.

Outlook:

Your Company is constantly evaluating generic opportunities for both advanced markets like Europe and South Africa and major emerging markets like Russia and other Commonwealth of Independent States (CIS).

In the coming years, your Company expects to increase the footprint of its flagship product Azathioprine Tablets in all strengths and launch this product in Germany and certain other European countries for tenders as well as private business.

Active Pharmaceutical Ingredients (APl/Bulk Drugs) Business:

Performance:

The API business achieved sales revenue of Rs. 35.59 crores, a growth of 27% over the last year. The traditional markets of Latin America in which the Company enjoys a fair market share continued to perform well. Quinfamide, Pantoprazole and Lamotrigine registered good growth rates.

Outlook:

API business has a strategic importance in the overall growth of the Company. The Company has a backward integration for Di-phenoxylate and Azathioprine. One of the key objectives of the Company is to build a strong and sustainable product portfolio. It has a plan to introduce new APIs every year in various key segments. With successful achievement of EU GMP, the Company plans to penetrate EU markets with a new API towards the end of the current financial year. With the emergence of BRIC markets, apart from domestic markets, Brazil & China would be increasingly important markets for some niche APIs that the Company manufactures.

Biotech Business:

Performance:

The Biotech business achieved sales of Rs. 21.51 crores by maintaining business with key clients in domestic & international markets and with the addition of new clients in Taiwan and Russia.

The Company continued to make several improvements and upgrades in its Biotech facility, to meet the requirements of various markets in emerging geographies. In line with its strategy to take the products to regulated markets, the Company has filed COS (Certificate of Suitability) for Doxorubicin with EDQM (European Directive Quality Medicines) in France and also plans to file COS for Epirubicin in the current financial year.

Outlook:

Doxorubicin and Epirubicin are used in treatment of cancer and which are manufactured by your Company to compete with the best in class in the category.

Your Company expects to receive COS for Doxorubicin in this year and expects to get COS for Epirubicin by end of 2015. This will also help your Company to target regulated business in Europe.

4. SALE OF PART OF LAND

During the year, your Company sold a portion of unused leasehold land located at Navi Mumbai plant for a consideration of Rs. 77 crores. The sales proceeds were utilised for part repayment of debt and to fund capital expenditure.

5. DIRECTOR''S RESPONSIBILITY STATEMENT

The Board of Directors would like to affirm that the financial statements for the year under review conform in their entirety to the requirements of the Companies Act, 1956.

As stipulated in Section 217(2AA) of the Companies Act, 1956, your Directors, to the best of their knowledge and belief, confirm that:

(i) the applicable accounting standards have been followed in the preparation of annual accounts;

(ii) such accounting policies have been selected and applied consistently and such judgements and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company in the Balance Sheet as at March 31, 2014 and in the Profit and Loss Account for the said financial year viz. April 1, 2013 to March 31, 2014;

(iii) 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

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

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

The particulars as 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 Annexure ''A'' to this report.

7. PARTICULARS OF EMPLOYEES

In terms of provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, the report of the Board is required to include a statement containing names and other particulars of the employees in receipt of certain remuneration. However, as per provisions of Section 219, the annual report is being sent to all the members excluding the aforesaid statement. Any member who is desirous of obtaining such statement may write to the Company Secretary of the Company.

8. MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE

In compliance with Clause 49 of the listing agreement, Management Discussion and Analysis and Corporate Governance Report, as approved by the Board of Directors, together with a certificate from a Practising Company Secretary confirming the compliance with the requirements of Corporate Governance policies are set out in the Annexure forming part of this annual report.

9. FIXED DEPOSITS

Your Company has not accepted any fixed deposit during the year under review. As on March 31, 2014, no deposit was overdue and deposits aggregating to Rs. 5.65 lakhs were lying unclaimed with the Company.

10. DIRECTORS

Mr. Ajit Gulabchand resigned from the Directorship of the Company with effect from November 13, 2013 and the Board places on record its appreciation for the services rendered by Mr. Gulabchand during his tenure with the Company.

Mr. C. Vinayaraghavan retires by rotation and being eligible offers himself for re-appointment at the ensuing Annual General Meeting.

In accordance of Section 149 and other applicable provisions of the Companies Act, 2013, your Directors are seeking appointment of Mr. P. K. Mohapatra, Mr. Manoj Maheshwari, Mr. Mahesh Gupta, Mr. C. L. Jain, and Dr. Lalit S. Kanodia as Independent Directors for five consecutive years from September 25, 2014 to September 24, 2019. Details of the said Directors are mentioned in the Explanatory Statement under Section 102 of the Companies Act, 2013 of the 7th Annual General Meeting.

None of the aforesaid Directors is related to any other Director of the Company.

11. SAFETY

The safety inspection and audits were periodically carried out during the year across all factories. The safety awareness programmes were organised and concerned employees were also imparted safety training.

12. AUDITORS

Statutory Auditors:

M/ s. Lovelock & Lewes, Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting. M/s. Lovelock & Lewes have expressed their willingness and confirmed their eligibility for re-appointment as auditors of the Company.

Internal Auditors:

M/ s. Aneja Associates, Chartered Accountants, Mumbai, are the Internal Auditors of the Company.

Cost Auditors:

Pursuant to the provisions of Section 233B of the Companies Act, 1956, M/s. Kirit Mehta & Co. (Registration No. 000353), Cost Accountants, was appointed to conduct audit of cost records of Pharmaceutical Activities for the year ended March 31, 2014. Cost Audit reports would be submitted to the Central Government within the prescribed time.

Pursuant to Rule 5 of the Companies (Cost Audit Report) Rules, 2011, cost audit reports for Pharmaceutical Activities for the year ended March 31, 2013 was filed with the Central Government on September 6, 2013.

13. AWARDS & RECOGNITION

Your Company has been recognized as one of India''s Best Companies in the Pharmaceuticals & Biotechnology industry for the second consecutive year in 2013 in study conducted by "Great Place to Work Institute" which validates the progressive culture organizations.

Your Company has ranked 8th as "Asia''s Best-Employer Brand" and also been awarded with "Continuous Innovation in HR Strategy at Work" and "Innovation in Recruitment".

14. APPRECIATION

Your Directors record their appreciation of the valuable services rendered by all employees of the Company, their gratitude to the banks for their assistance and to the Company''s shareholders, customers and suppliers for their continued support.

For and on behalf of the Board of Directors

H.V. Goenka Chairman

Place: Mumbai Date: April 30, 2014


Mar 31, 2013

The directors present the annual report and audited statement of accounts of the Company for the year ended on March 31, 2013.

1. FINANCIAL RESULTS

The summary of financial performance of the Company for the year under review is given below:

(Rs. in Crore)

2012-13 2011-12

Total Income 223.42 193.51

Profit before depreciation, interest and tax 17.85 18.84

Less: Interest 7.44 6.88

Less: Depreciation 9.87 10.22

Profit for the year before tax 0.54 1.74

Provision for tax 0.48 0.34

Less: MAT Credit Entitlement 0.48 0.31

Deferred Tax Liability/(Asset) (3.87) 0.86

Profit for the year after tax 4.41 0.85

Appropriations:

Proposed dividend 1.98 1.32

Tax on proposed dividend 0.34 0.22

Transfer to General Reserve 0.22

Balance carried forward to balance sheet 25.22 23.35

2. DIVIDEND

Your Directors recommend a dividend of Rs.1.20 (15%) per equity share of Rs.8/- each for the financial year ended March 31, 2013.

3. OPERATIONS

The Company earned a total income of Rs.223.42 crore for the year as compared to Rs. 193.51 crore during the previous year. The Company earned a profit before tax of Rs.0.54 crore as against Rs.1.74 crore during the previous year. After writing back the deferred tax benefit of Rs.3.87 crore, the profit after tax for the year stood at Rs.4.41 crore as compared to Rs.0.85 crore for the previous year.

During the year, the performance of the Company was adversely affected due to cancellation of orders by some key customers due to non receipt of EU GMP certification for the Active Pharmaceutical Ingredient (API) facility at Navi Mumbai.

In April 2013, the Company has since received the EU GMP approval from the Ministry of Social and Family Affairs, Health and Consumer Protection, Hamburg, Germany for the API facility at Navi Mumbai, Maharashtra. The Company continues to hold a WHO GMP and TGA, Australia certification for the API facility at the Navi Mumbai plant.

Active Pharmaceutical Ingredients (API/Bulk Drugs) Business:

Performance

The API business achieved sales revenue of Rs.27.95 crore, a marginal growth of 2% over the last year. Due to the setback in the previous year with regard to the withdrawal of EU GMP certification, the performance continued to be adversely impacted during the current year as well. However, the re-audit of the API facility at Navi Mumbai took place during November 2012. The audit findings were favourable and consequently the company has received the certification in April 2013. The product specific certification (CEP) is expected in the first quarter of the next financial year. The traditional markets of Latin America where the Company enjoys a major market share for Quinfamide, Haloperidol and Lamotrigine continued to perform well, while sales of Pantoprazole in the domestic market grew by 175% over the previous year.

Outlook

API business has a strategic importance in the overall growth of the company. The company has a backward integration for Di-phenoxylate and Azathioprine.

One of the key objectives of the Company is to build a strong and sustainable product portfolio. The primary focus during the current year was to achieve EU GMP certification. Going forward, efforts will be directed at new product introduction in various key segments.

Global Generics Business:

Performance

The Global Generics business achieved sales revenue of Rs.17.31 crore, with a growth of 31% over the previous year. The key factor for the growth was the increased focus on existing clients in Canada and UK. Today, given the dedicated facility for manufacturing immunosuppressant APIs and also oral solid dosage forms, the company enjoys a large share of the Azathioprine market. But more generic companies are entering the market with Azathioprine formulations, increasing the competition in this product.

Outlook

The company is constantly evaluating generic opportunities for both advanced markets like Europe and South Africa and major emerging markets like Russia and other CIS states. Opportunities are also being evaluated to develop and manufacture private label products for pharmacy chains, which have secured a large share of business of both generics and branded generics in markets like Canada.

The Company has a robust business plan for Azathioprine formulations. Globally the product generates revenues of about USD 180 mn, with the largest markets being Europe, Canada and USA. The Company has drawn up its entry strategy for all these markets for Azathioprine. The company has secured definitive agreements for launch of products in new markets like Australia, New Zealand, Germany and other EU Countries which will result in a wider presence for the company''s products.

In the coming year, your company expects to increase the footprint of its flagship product Azathioprine Tablets in all strengths and launch this product in Germany and certain other European countries for tenders as well as private business.

Biotech Business:

Performance

The Biotech business achieved Rs.24 crore in Sales and has done well as compared to the previous year. This business has shown a growth of 88% in spite of intense competition from domestic as well as Chinese and Korean companies. New tenders in the traditional markets such as Latin America and new geographies such as Egypt, Indonesia, Korea and Turkey helped international business to grow by 90% over the previous year. New clients in Korea and Indonesia were developed.

The Company continued to make several improvements and upgrades in its Biotech facility, to meet the requirements of various markets in emerging geographies. In line with its strategy to take the products to regulated markets, the Company has filed COS (Certificate of Suitability) for Doxorubicin with EDQM (European Directive Quality Medicines) at France and also has a plan to file DMFs (Drug Master File) in the current financial year.

Outlook

The yields of the products were substantially improved by continuous R&D efforts. Both, Doxorubicin and Epirubicin, used in the treatment of cancer and which are manufactured by the Company compete with the best in class in their category.

The oncology market is one of the fastest growing markets. The Company has decided to add synthetic oncology products to its existing portfolio of fermentation oncology products and four synthetic oncology APIs are already under scale up. The APIs so manufactured will be sold to major Oncology players in emerging markets.

Formulations Business:

Performance

During the year under review, the Formulations business achieved sales revenue of Rs.148.6 crore, a growth of 9% over the previous year. The Company ranked 65th in the Indian Pharmaceutical market as per Pharmatrac with its Nephrocare Division, ranked 3rd in Nephrology therapy. Business Verticals of Oncology and Nephrology clocked growth of 50% and 21% respectively over last year. However, profitability was affected by substantially higher sales returns due to market conditions.

The concept of Focus Brands, which was introduced in the year under review has fuelled growth. Focus brands in Domestic Formulation have shown growth of about 25% with Impulse and Nephrology focus brands registering growth of 70% and 49% respectively.

Outlook:

In the current year, the company''s focus will be to leverage the strength of the legacy brands so as to build successful new products along with continued emphasis on Focus brands. Dedicated efforts on chronic therapies like Cardiology, Anti-Diabetic, Oncology and Nephrology will be made to accelerate the growth in the chronic therapy segment. With focus on Transplant and Dialysis therapy the company will consolidate its value in Nephrology therapy.

Existing brands like Aldactone, Naprosyn, Azoran and Tricane will continue to receive the necessary thrust as also other focus brands like RPO, Alfalog, Azopen and anti-diabetic products such as Cicoline, CVMET, Olrass and Glimetop. New launches Azistart-O & MinMin Tonic, Qugyl OP are showing promise.

6. SALE OF PART OF LAND

The Company has executed a Memorandum of Understanding (MOU) with Maruti Suzuki India Ltd. (MSIL) for proposed sale of part of vacant land situated at MIDC, Navi Mumbai which is subject to conclusion on fulfilment of terms and conditions mentioned in the MOU.

7. DIRECTOR''S RESPONSIBILITY STATEMENT

The Board of Directors would like to affirm that the financial statements for the year under review conform in their entirety to the requirements of the Companies Act, 1956.

As stipulated in Section 217(2AA) of the Companies Act, 1956, your Directors, to the best of their knowledge and belief, confirm that:

(i) the applicable accounting standards have been followed in the preparation of annual accounts;

(ii) such accounting policies have been selected and applied consistently and such judgements and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company in the Balance Sheet as at March 31, 2013 and in the Profit and Loss Account for the said financial year viz. April 1, 2012 to March 31, 2013;

(iii) 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

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

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

The particulars as 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 Annexure ''A'' to this report.

9. PARTICULARS OF EMPLOYEES

In terms of provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, the report of the Board is required to include a statement containing names and other particulars of the employees in receipt of certain remuneration. However, as per provisions of Section 219, the annual report is being sent to all the members excluding the aforesaid statement. Any member who is desirous of obtaining such statement may write to the Company Secretary of the Company.

10. MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE

In compliance with Clause 49 of the listing agreement, Management Discussion and Analysis and Corporate Governance Report, as approved by the Board of Directors, together with a certificate from a Practising Company Secretary confirming the compliance with the requirements of Corporate Governance policies are set out in the Annexure forming part of this annual report.

11. FIXED DEPOSITS

Your Company has not accepted any fixed deposit during the year under review. As on March 31, 2013, no deposit was overdue and deposits aggregating to Rs.5 lakhs were lying unclaimed with the Company.

12. DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and Article 141 of the Articles of Association, Mr. Manoj Maheshwari, Mr. Mahesh Gupta and Mr. C. L. Jain, Directors retire by rotation and being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting.

The resolutions for their re-appointment as Directors of the Company are included in the notice of Annual General Meeting.

The Board of Directors recommend the re-appointment of Mr. Manoj Maheshwari, Mr. Mahesh Gupta and Mr. C L. Jain.

At the Board Meeting held on May 7, 2013, Mr. Ajit Singh Chouhan has been re-appointed as Managing Director of the Company with effect from April 9, 2013 for period of three years.

In compliance with Clause 49IV(G) of the Listing Agreement, brief resume, expertise and other details of Directors proposed to be re-appointed are attached alongwith the notice of the Annual General Meeting.

None of these directors is related to other directors of the Company.

13. SAFETY

The safety inspection and audits were periodically carried out during the year across all factories. The safety awareness programmes were organised and concerned employees were also imparted safety training.

14. AUDITORS

Statutory Auditors:

M/s Lovelock & Lewes, Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting. M/s Lovelock & Lewes have expressed their willingness and confirmed their eligibility for reappointment as auditors of the Company.

Internal Auditors:

M/s. Aneja Associates, Chartered Accountants, Mumbai, are the Internal Auditors of the Company.

Cost Auditors:

Pursuant to the provisions of Section 233B of the Companies Act, 1956, Mr. Kirit B. Mehta (Membership No.4105) Partner, M/s Kirit Mehta & Co., Cost Accountants, was appointed to conduct audit of cost records of Pharmaceutical Activities for the year ended March 31, 2013. Cost Audit reports would be submitted to the Central Government within the prescribed time.

Pursuant to Rule 5 of the Companies (Cost Audit Report) Rules, 2011, cost audit reports for Pharmaceutical Activities for the year ended March 31,2012 was filed with the Central Government on February 9, 2013.

15. AWARDS & RECOGNITION

Your Company has been recognized as one of India''s Best Companies in the Pharmaceuticals & Biotechnology industry in the year 2012 in study conducted by "Great Place to Work" which validates the progressive culture of the organization.

16. APPRECIATION

Your directors record their appreciation of the valuable services rendered by all employees of the Company, their gratitude to the banks for their assistance and to the Company''s shareholders, customers and suppliers for their continued support.

For and on behalf of the Board of Directors

H.V. Goenka Chairman

Place: Mumbai

Date: May 7, 2013


Mar 31, 2012

The directors present the annual report and audited statement of accounts of the Company for the year ended on March 31, 2012.

1. FINANCIAL RESULTS

The summary of financial performance of the Company for the year under review is given below:

(Rs. in Crores)

2011-12 2010-11

Total Income 193.51 187.55

Profit before depreciation, 18.84 33.27 interest and tax

Less: Interest 6.88 6.28

Less: Depreciation 10.22 9.52

Profit for the year before tax 1.74 17.47

Provision for tax 0.34 3.88

Less: MAT Credit Entitlement 0.31 -

Deferred Tax Liability 0.86 0.88

Profit for the year after tax 0.85 12.71 Appropriations:

Proposed dividend 1.32 2.65

Tax on proposed dividend 0.22 0.43

Transfer to General Reserve - 0.95 Balance carried forward to

balance sheet 23.35 24.04

2. DIVIDEND

Your Directors recommend a dividend of Rs.0.80 (10%) per equity share of Rs.8/- each for the financial year ended March 31, 2012.

3. OPERATIONS

The Company earned a total income of Rs.193.51 crores for the year as compared to Rs.187.55 crores during the previous year. The profit after tax for the year stood at Rs.0.85 crores as compared to Rs.12.71 crores for the previous year. In December, 2011, the Company received a communication from the Ministry of Social and Family Affairs, Health and Consumer Protection, Hamburg, Germany that it was not being granted EU GMP for the Company's Active Pharmaceutical Ingredient (API) facility at Navi Mumbai, Maharashtra, citing certain deficiencies noticed during inspection. Consequently some of the key customers cancelled their orders for shipment to be done during the quarter ended March 31, 2012. Though the Company has promptly initiated remedial measures for the same, the API facility was only partially functional during the last quarter of the year and this has adversely affected the export business of the Company. Overall, this has led to significant erosion in the profits of the Company for the year under review. The Company continues to progressively resolve the issues raised by the said authority. The Company continues to hold a valid WHO GMP and TGA, Australia certification for the API facility at Navi Mumbai plant and is also working towards achieving recertification of its EU GMP status at the earliest.

Active Pharmaceutical Ingredients (API/Bulk Drugs) Business:

Performance

The API business achieved sales revenue of Rs.27.48 crores, which is 2.20% below that of the previous year. The performance was adversely impacted mainly due to non-granting of EU GMP certification as cited earlier. Upon completion of remedial measures, the re- audit of the API facility at Navi Mumbai is expected to be conducted in the third quarter of the financial year 2012-13. The traditional markets of Latin America where the Company enjoys a favorable market share for Quinfamide, Haloperidol and Lamotrigine continued to out-perform and the Company was able to ward off significant price erosion. The sales of Nicorandil, a key export API, grew 136% over the previous year.

Outlook

One of the key objectives of the Company is to build a strong and sustainable product portfolio. The primary focus during the current year will be to re-establish the licensing approvals in the EU and further to progress with the US FDA audit as well. Therefore, while growth in business will be constrained until the approvals are in place, the Company plans to continue launching new bulk drug products and explore new geographies. The focus would be on products in cardiovascular therapies. Within the segment of Cardiology the new products would address niche therapeutic areas like Pulmonary Arterial Hypertension and Hyponatremia. These are two fast growing segments in the international markets and the Company expects to garner good market share in the same.

Global Generics Business:

Performance

The Global Generics business achieved sales revenue of Rs.13.23 crores, which was 24% below that of the previous year. The key factor for the slowdown was the non granting of EU GMP certification and consequently, reduced orders from key clients. Also, more generic companies are entering the market with Azathioprine formulations, increasing the competition in this product. The Company is actively pursuing various markets to maintain its position in the Azathioprine formulation business.

Outlook

The Generics market worldwide is poised to touch USD 250 bn in the year 2012, and is expected to post a healthy growth rate in the medium term. During the period upto the year 2020, patented drugs worth USD 200 bn which are currently patented will be opened to generic manufacture, giving manufacturers an immense opportunity for growth in the generics space. Opportunities are also being evaluated to develop and manufacture private label products for pharmacy chains.

The Company has a robust business plan for Azathioprine formulations. Globally the product generates revenues of about USD 150 mn, with the largest markets being USA, Germany and UK. The Company has drawn up its entry strategy for all these markets for Azathioprine and is exploring new markets in Australia, New Zealand, Germany and other EU Countries which will result in a global presence.

However, during the current year, there will be limitations on the volume of business due to suspension of EU GMP certification of API facility. The reaudit of the API facility is expected only by the end of third quarter of FY 2012-13. Marketing dossier (ANDA) for Azathioprine has already been filed in the US during May 2010 and US FDA Audit of the facilities is also expected in 2012-13.

Biotech Business:

Performance

The Biotech business at Rs.12.76 crores was lower by 41% as compared to the previous year mainly due to two reasons. Firstly, intense competition from domestic as well as Chinese and Korean companies, led to pricing pressures. Secondly, a slowdown in the market for these products coupled with delay in the opening of tenders in Latin American markets adversely affected sales. Sales began to improve towards end of the financial year as a result of new tenders in Latin America, which were won by the Company. Should the trend continue in FY 2012-13, the business could return to earlier levels by the third quarter of the year. The Company made several improvements and upgrades in its Biotech facility, to meet the requirements of various markets in emerging geographies. In line with its strategy to take the products to regulated markets, the Company also plans to file DMFs for its products in the current financial year.

Outlook

During the year, the Biotech facility was successfully audited and approved by several multinational companies, which has further instilled confidence in the facility and its quality systems. The quality of the product has been substantially improved by continuous R&D efforts. Both, Doxorubicin and Epirubicin, used in the treatment of cancer and which are manufactured by the Company, comply with major pharmacopoeia specifications and compete with the best in class in their category.

The oncology market is one of the fastest growing markets, and is poised to surpass USD 50 bn during the current year. The Indian oncology market is also poised for significant growth. The Company has decided to add synthetic oncology products to its existing portfolio of fermentation oncology products. As an outcome, four synthetic oncology APIs are already under scale up. The APIs so manufactured will be sold to major Oncology players in Emerging market and will also be consumed captively for its own oncology franchise targeted at the INR 1500 crore Indian oncology market. The Company will continue to market its products in the MENA region and the Far East where it has already made inroads.

Formulations Business:

Performance

The formulations business achieved sales revenue of Rs.135.76 crores during the year registering a growth of 16% as compared to the previous year. During the year under review, the Company has improved its rank in the Indian Pharmaceutical market by 8 ranks. The flagship divisions like Nephrocare, Lomo group and Chronic Care achieved accelerated growth. Oncology, the new business segment which was launched in 2010-11, has strengthened patient-focus image of the Company amongst Oncologists. The Company is a leading player in Nephrology with Azoran having leadership position.

New brands such as Alfalog, Minmin, Frastim, Rinostat, Naprosyn Tab, etc. which were launched in last few years, have contributed 9.40% to sales in financial year 2011-12. Key products like Aldactone, Serenace, Naprosyn and Azoran have shown good growth.

Focus on key brands and field force expansion has helped the Company grow its business. The year witnessed launch of several new products to enhance the depth and width of the product portfolio. Various initiatives have also been taken to develop new export markets in Africa, South East Asia and Latin America.

Outlook

The business verticals have been restructured to optimize profitable and sustainable sales. The year will see consolidation of the formulation business with improved productivity of sales force. Focus on systems and processes with increased activities at clinic level with strong monitoring and sales force automation will be the key drivers for consolidation.

During the current year, the Company would focus on continuous leveraging of legacy brands with additional emphasis on select brands as Focus Brands fuelling growth. Sharp positioning of products coupled with innovative promotional strategies will be implemented with emphasis on micro-management across levels. New products are being planned as line extension of existing popular brands. The Company would focus on strengthening of Nephrology portfolio in the African and South East Asian markets. The business will have major thrust on two therapy areas i.e. - Acute Care and Chronic Care and Chronic Care growth would come from the Specialty Divisions namely Nephrology, Oncology and Cardiac-diabetic-neuro/psychiatry, where customer retention and acquisition programs will help to achieve strong sustainable foothold. The traditional anti- diarrheal range Lomo group will have further increased sales through exploiting new packs and new market opportunities.

Exports:

Exports sales for the year amounted to Rs.51.81 crores as against Rs.56.74 crores in the previous year. The Company has taken several key initiatives to gain access to new markets and is confident that these will yield results in the current year in terms of substantially increasing exports.

4. DIRECTORS' RESPONSIBILITY STATEMENT

The Board of Directors would like to affirm that the financial statements for the year under review conform in their entirety to the requirements of the Companies Act, 1956.

As stipulated in Section 217(2AA) of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that:

(i) in the preparation of the annual accounts for the year ended March 31, 2012, the applicable Accounting Standards have been followed;

(ii) such accounting policies have been selected and applied consistently and judgments and estimates made 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 the year under review;

(iii) 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;

(iv) the annual accounts for the financial year ended March 31, 2012, have been prepared on a going concern basis.

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

The particulars as 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 Annexure 'A' to this report.

6. PARTICULARS OF EMPLOYEES

In terms of provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, the report of the Board is required to include a statement containing names and other particulars of the employees in receipt of certain remuneration. However, as per provisions of Section 219, the annual report is being sent to all the members excluding the aforesaid statement. Any member who is desirous of obtaining such statement may write to the Company Secretary of the Company.

7. MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE REPORT

In compliance with Clause 49 of the listing agreement, Management Discussion and Analysis and Corporate Governance Report, as approved by the Board of Directors, together with a certificate from a Practicing Company Secretary confirming the compliance with the requirements of Corporate Governance policies are set out in the Annexure forming part of this annual report.

8. PUBLIC DEPOSITS

During 2011-12, the Company did not accept/renew any fixed deposit. As on March 31, 2012, the aggregate amount of fixed deposit was Rs.5.89 crores collected from 1,317 depositors. The Company has no overdue deposit other than unclaimed deposits amounting to Rs.0.01 crores at the year end.

9. EMPLOYEE STOCK OPTION PLAN

Information in terms of Clause 12 of the SEBI (Employees' Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are given in Annexure 'B' to this report.

10. DIRECTORS

Mr. Dilip Sen, Director, has resigned from the directorship of the Company with effect from April 18, 2012. Mr. C. Vinayaraghavan has been appointed as Director of the Company w.e.f. April 27, 2012 in the casual vacancy caused due to the resignation of Mr. Dilip Sen. Mr. R.A. Shah has been appointed as Alternate Director to Mr. C. Vinayaraghavan. The Board of Directors of the Company records its appreciation for the contribution made by Mr. Sen during his tenure as Director of the Company.

In accordance with the provisions of the Companies Act, 1956 and Article 141 of the Articles of Association, Mr. H.V. Goenka, Mr. Ajit Gulabchand and Dr. Lalit S. Kanodia, Directors retire by rotation and being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting.

The resolutions for their re-appointment as Directors of the Company are included in the notice of Annual General Meeting.

The Board of Directors recommend the re-appointment of Mr. H.V. Goenka, Mr. Ajit Gulabchand and Dr. Lalit S. Kanodia.

In compliance with Clause 49IV(G) of the listing agreement, brief resume, expertise and other details of Directors proposed to be re-appointed are attached alongwith the notice of the Annual General Meeting.

None of these directors are related to other directors of the Company.

11. SAFETY

The safety inspection and audits were periodically carried out during the year across all factories. The safety awareness programmes were organised and concerned employees were also imparted safety training.

12. AUDITORS Statutory Auditors:

M/s Lovelock & Lewes, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting. M/s Lovelock & Lewes have expressed their willingness and confirmed their eligibility for reappointment as auditors of the Company.

Cost Auditors:

The Central Government has approved the appointment of M/s. Kirit Mehta & Co., Cost Accountants as Cost Auditors, for conducting Cost Audit in relation to pharmaceutical activities of the Company for the financial year ended March 31, 2012 and for issuance of Compliance Report, for the financial year ended March 31, 2012, under The Companies (Cost Accounting Records) Rules, 2011.

13. CORPORATE SOCIAL RESPONSIBILITY

During the year, the Company's CSR Team initiated RPG Akshar Programme in the field of education. The project's primary goal is to develop functional English Skills (i.e. reading and spoken English) among Navi Mumbai Municipal Corporation (NMMC) school children from Class IV to Class IX.

Currently, Akshar reaches out to 9 NMMC schools and 694 students. The project also aims at an expansion in various other NMMC Schools and to the higher classes.

14. AWARDS & RECOGNITION

During the year, Mr. Ajit Singh Chouhan, Managing Director was honored with the prestigious award of "CEO with HR Orientation" in recognition to the outstanding contribution to human resources development in the Company, at a glittering awards ceremony of the "Asia Pacific HRM Congress 2011". The Company was also awarded The Most Popular HR Showcase Exhibit Award at the 15th National HRD Network Conference for its differentiating HR practice.

15. APPRECIATION

Your directors record their appreciation of the valuable services rendered by all employees of the Company, their gratitude to the banks for their assistance and to the Company's shareholders, customers and suppliers for their continued support.

For and on behalf of the Board of Directors

H.V. Goenka

Chairman

Place: Mumbai

Date: April 27, 2012


Mar 31, 2011

The directors have pleasure in presenting the annual report and audited statement of accounts of the Company for the year ended on March 31, 2011.

1. FINANCIAL RESULTS

The following is the summary of financial performance of the Company during the year under review.

(Rs. in crores)

2010-11 2009-10

Total Income 187.53 163.09

Profit before depreciation, interest and tax 32.77 31.87

Less: Interest 5.78 8.14

Less: Depreciation 9.52 9.18

Profit for the year before tax 17.47 14.55

Provision for tax 3.88 2.63

Deferred Tax Liability 0.88 1.12

Profit for the year after tax 12.71 10.80

Appropriations:

Proposed dividend 2.65 2.17

Tax on proposed Dividend 0.43 0.36

Transfer to General Reserve 0.95 0.81

Balance carried forward to balance sheet 24.03 15.35

2. DIVIDEND

Your directors recommend a dividend of Rs.1.60 (20%) per equity share of Rs.8/-each.

3. OPERATIONS

The Company has registered an improved performance during the year under review with a total income of Rs.187.53 crores, a growth of 15% as compared to the previous year. The profit after tax increased by 18% to Rs.12.71 crores as a result of introduction of new products, improved focus on key products, better production efficiencies and active cost optimization.

Formulations Business:

Performance

The formulations business achieved sales revenue of Rs.116.87 crores during the year registering a growth

of 16.50% as compared to the previous year. The focus on key brands and expanding field force helped to grow the business. The year witnessed launch of several new products in therapeutic area of focus and strength in order to enhance the depth and width of the product portfolio. New divisions were launched in highly growing chronic segments namely Cardiology and Diabetic (IMPULSE), Neurology- Psychiatry (EMPATHY) and Oncology (Neo-life). A new division ESSENTIA was also launched to cater to the Hospital sales segment. The branded exports business has consolidated its presence and increased its share of contribution to formulation business during the year.

By leveraging its strengths in core segments, the Company has been able to increase revenues from antidiarrheal products and other products such as Aldactone, Azoran, Nufex, Arpimune, Glimetop, Rabee, Qugyl O. The Company has also strengthened its product portfolio by launching new products in the diuretic, antiepileptic, antidiarrheal, cardiovascular, anti-ulcerant, anti-depressant, immunosuppressant and Nephrology segments. Some of the new products launched during the year were Seretane 2 DT, Rabee 20, Pedimec, Minilactone, Alfalog, Demator, Naprosyn Gel, Lamotrigine dispersible tablets. Various initiatives have also been taken to develop new export markets in Africa and South East Asia.

Outlook

New products are being planned for launch in the key therapeutic areas of cardiology, nephrology, pain management and gastroenterology. These new products will augment the product portfolios of various business verticals and also enable the Company to tap growing market segments both in the domestic as well as export markets. At the same time the new dedicated divisions with their own sales force and portfolio of brands will drive the business in therapeutic areas like oncology, psychiatry, diabetology and nephrology.

Global Generics Business:

Performance

The Global Generics business achieved sales revenue of Rs.17.05 crores, a growth of 11.88% over the previous year. New agreements have been executed with customers in Germany and other EU Markets for Azathioprine tablets.

Outlook

Opportunities are being evaluated to develop and manufacture private label products for pharmacy chains. Companys presence in EU Markets and Australia will be strengthened post marketing approval of Azathioprine, which is expected by the end of FY 2011-12. Marketing dossier (ANDA) has been filed in the US during May 2010. US FDA Audit is expected in 2011-12.

Bulk Drug Business:

Performance

The Bulk Drug business achieved sales revenue of Rs.28.75 crores, a growth of 44% over the previous year. Demand from export markets has grown and new markets of Poland, Tunisia, Sri Lanka and Bangladesh have been developed. New products Nicorandil and Clopidogrel launched during the year are performing well. The Companys key products like Azathioprine, Risperidone and Quinfamide continued to perform well.

Outlook

One of the key objectives of the Company is to build a strong and sustainable product portfolio. During the current year, the Company plans to continue launching new bulk drug products and explore new geographies. The Company is also working towards completion of inspection by authorities from certain regulated markets like USA which would facilitate entry into these new markets. The Company is also planning to file Drug Master Files (DMFs) for several products in regulated and semi regulated markets.

Biotech Business:

Performance

The sales of Biotech business at Rs.21.52 crores was lower by 14% as compared to the previous year, mainly due to intense competition from domestic as well as Chinese and Korean companies, leading to pricing pressures.

However, there was good progress made with regard to yield improvement of Doxorubicin and Epirubicn.

Outlook

The Company is in the process of filing DMFs for its existing products in regulated and emerging markets.

Exports:

Exports sales for the year amounted to Rs.56.74 crores as against Rs.45.17 crores in the previous year. The Company has taken several key initiatives to gain access to new markets and is confident that these will yield results in the current year in terms of substantially increasing exports.

4. ALLOTMENT OF EQUITY SHARES

8,00,000 and 6,38,000 equity shares were allotted on September 29, 2010 to Petrochem International Ltd. and Instant Holding Ltd. (formerly KEC Holdings Ltd.), respectively, pursuant to conversion of equivalent number of warrants held by them. Further, 28,391 equity shares were allotted on November 1, 2010 upon exercise of stock options by the eligible employees under the Employees Stock Option Scheme.

5. RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors, to the best of their knowledge and belief, confirm that:

(i) the applicable accounting standards have been followed in the preparation of the annual accounts;

(ii) such accounting policies have been selected and applied consistently and such judgements and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company in the Balance Sheet at the March 31, 2011 and in the Profit and Loss Account for the said financial year viz. April 1, 2010 to March 31, 2011;

(iii) 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

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

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

The particulars as 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 Annexure A to this report.

7. PARTICULARS OF EMPLOYEES

In terms of provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, the report of the Board is required to include a statement containing names and other particulars of the employees in receipt of certain remuneration. However, as per provisions of Section 219, the annual report is being sent to all the members excluding the aforesaid statement. Any member who is desirous of obtaining such statement may write to the Company Secretary of the Company.

8. GROUP

Pursuant to an intimation from the Promoters, the names of the Promoters and entities comprising Group as defined under the Monopolies and Restrictive Trade Practices ("MRTP") Act, 1969 are disclosed in the annual report for the purpose of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

9. CORPORATE GOVERNANCE

In compliance with Clause 49 of the listing agreement, Management Discussion and Analysis and Corporate Governance Report, as approved by the Board of Directors, together with a certificate from a Practising Company Secretary confirming the compliance with the requirements of Corporate Governance policies are set out in the Annexure forming part of this annual report.

10. PUBLIC DEPOSITS

In March 2010, the Company launched a fixed deposit scheme to meet a part of its funding requirements. As on March 31, 2011, the aggregate amount collected under the fixed deposit scheme was Rs.5.99 crores from 1,337 depositors. The Company has no overdue deposit other than unclaimed deposits amounting to Rs. 0.20 crores.

11. EMPLOYEE STOCK OPTION PLAN

Information in terms of Clause 12 of the SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are given in Annexure B to this report.

The certificate as required under Clause 14 of the said guidelines, obtained from the Statutory Auditors with respect to the implementation of the Companys Employee Stock Option Scheme shall be placed at the Annual General Meeting.

12. DIRECTORS

Mr. Niraj Bajaj, Director, has resigned from the directorship of the Company with effect from October 1, 2010. The Board of Directors of the Company records its appreciation of the contribution made by Mr. Bajaj during his tenure as Director of the Company.

In accordance with the provisions of the Companies Act, 1956 and the Companys Articles of Association, Mr. C.L. Jain, Mr. P.K. Mohapatra and Mr. Dilip Sen, Directors retire by rotation and, being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting.

The resolutions for their re-appointment as Directors of the Company are included in the notice of Annual General Meeting.

The Board of Directors recommend the re- appointment of Mr. C.L. Jain, Mr. P.K. Mohapatra and Mr. Dilip Sen.

In compliance with clause 49IV(G) of the Listing Agreement, brief resume, expertise and other details of Directors proposed to be re-appointed are attached alongwith the notice to the Annual General Meeting.

None of these directors is related to other directors of the Company.

13. SAFETY

The safety inspection and audits were periodically carried out during the year across all factories. The safety awareness programmes were organised and concerned employees were also imparted safety training.

14. AUDITORS

M/s. Lovelock & Lewes, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting. M/s. Lovelock & Lewes have expressed their willingness and confirmed their eligibility for re-appointment as Statutory Auditors of the Company. The Board of Directors recommend the re-appoinment of M/s. Lovelock & Lewes as Statutory Auditors of the Company.

15. APPRECIATION

Your directors record their appreciation of the valuable services rendered by all employees of the Company, their gratitude to the banks for their assistance and to the Companys shareholders, customers and suppliers for their continued support.

For and on behalf of the Board of Directors

H.V. Goenka Chairman

Place: Mumbai Date : April 28, 2011


Mar 31, 2010

The directors have pleasure in presenting the annual report and audited statement of accounts of the Company for the year ended on March 31, 2010.

1. FINANCIAL RESULTS

The following is the summary of financial performance of the Company during the year under review.

(Rs. in lacs)

2009-10 2008-09

Total Income 16,309 14,444

Profit before depreciation, interest and tax 3,187 2,634

Less: Interest 814 861

Less: Depreciation 918 942

Profit for the year before tax 1,455 831

Provision for tax 263 -

Provision for Fringe Benefit Tax - 54

Deferred Tax Liability 112 116

Profit for the year after tax 1,080 661

Appropriations:

Proposed dividend 217 172

Tax on proposed Dividend 36 29

Transfer to General Reserve 81 33

Balance carried forward to balance sheet 1,535 790

2. DIVIDEND

Your directors recommend a dividend of Rs.1.44 (18%) per equity share of Rs.8/- each.

3. OPERATIONS

The Company has registered an improved performance during the year under review with a total income of Rs. 163.09 crores, a growth of 13% as compared to the previous year. The profit after tax increased by 63% to Rs. 10.80 crores as a result of improved focus on key products, better field and production efficiencies and active cost optimization.

Formulations Business:

Performance

The formulations business crossed a landmark of Rs.100 crores in sales during the year registering a growth of 19% as compared to the previous year.

The focus on key brands and improving field efficiency helped grow the domestic business. By leveraging its strengths in core segments, the Company has been able to increase revenues from anti-diarrhoeal products and other products such as Aldactone, Naprosyn, Tricaine, Serenace and Spiromide. The Company has also strengthened its product portfolio by launching new products in the antibiotic, cardiovascular, anti-ulcerant, anti-depressant, immunosuppressant and Nephrology segments. Some of the new products launched during the year were Demator, Sizomax, Mela, Exinia and Mofetyl S. Various initiatives have also been taken to develop new export markets in Africa and South East Asia.

Outlook

New products are being planned for launch in the key therapeutic areas of cardiology, nephrology, pain management and gastroenterology. These new products will augment the product portfolios of various business verticals and also enable the Company to tap growing market segments both in the domestic as well as export markets. At the same time, the Company has plans to set up dedicated divisions with its own sales force and portfolio of brands that will drive the business in therapeutic areas like oncology, psychiatry and diabetology.

Global Generics & Bulk Drugs Business:

Performance

The Global Generics & Bulk Drugs business achieved sales revenue of Rs.35.19 crores, a growth of 10% over the previous year. Demand from export markets was sluggish, especially during the first three quarters of the year. However the shortfall was made up by growth in domestic business and also by launch of new products such as Clopidogrel Form-I. The Companys key products like Resperidone and Azathioprine continued to perform well.

Outlook

One of the key objectives of the Company is to build a strong and sustainable product portfolio. During the current year, the Company plans to launch six new bulk drugs and two existing products in new markets. The Company is also working towards completion of inspection by authorities from certain regulated markets like USA and Latin

America which would facilitate entry into these new markets. The Company is also planning to file DMFs for several products in regulated and semi regulated markets.

Biotech Business:

Performance

The sales of Biotech business remained stagnant as compared to the previous year. The export sales to Latin American countries suffered in the first half of the year due to adverse economic situations and financial hardships faced by certain customers. However, there was good progress made with regard to stabilizing the yields of Daunorubicin which is a key intermediate. The Company has also launched a new immunosuppressant product, Sirolimus, during the year.

Outlook

Work is progressing towards inspection of the Companys facilities by Latin American regulatory agencies which will help sustain the growth and increase the market share in those markets. The Company is also in the process of filing DMFs and Dossiers for its existing products in regulated and emerging markets.

Exports:

Exports sales for the year amounted to Rs.45.17 crores as against Rs.42.57 crores in the previous year. The Company has taken several key initiatives to gain access to new markets and is confident that these will yield results in the current year in terms of substantial increase in the exports.

4. ALLOTMENT OF EQUITY SHARES ON CONVERSION OF WARRANTS

7,00,000 equity shares were allotted on 31st March, 2010 to Petrochem International Ltd pursuant to conversion of 7,00,000 warrants out of 15,00,000 warrants held by Petrochem International Ltd.

5. RESPONSIBILITY STATEMENT

The directors confirm:

(i) that in the preparation of the annual accounts for the year under review, the applicable accounting standards have been followed and that no material departures have been made from the same;

(ii) that they have selected appropriate accounting policies and applied them consistently and made judgements 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 March 31, 2010 and of the profit for the year ended on that date;

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

(iv) that they have prepared the annual accounts for the year ended on March 31, 2010 on a going concern basis.

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

The particulars as 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 are given in Annexure A to this report.

7. PARTICULARS OF EMPLOYEES

In terms of provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, the report of the Board is required to include a statement containing names and other particulars of the employees in receipt of certain remuneration. However, as per provisions of Section 219, the annual report is being sent to all the members excluding the aforesaid statement. Any member who is desirous of obtaining such statement may write to the Company Secretary of the Company.

8. GROUP

Pursuant to an intimation from the Promoters, the names of the Promoters and entities comprising "group" as defined under the Monopolies and Restrictive Trade Practices ("MRTP") Act, 1969 are disclosed in the Annual Report for the purpose of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

9. CORPORATE GOVERNANCE

As required by the listing agreement with the stock exchanges, Management Discussion and Analysis and Corporate Governance Report, as approved by the Board of Directors, together with a certificate from a Practising Company Secretary confirming the compliance with the requirements of Corporate Governance policies are set out in the Annexure forming part of this annual report.

10. PUBLIC DEPOSITS

In March 2010, the Company launched a fixed deposit scheme to meet a part of its funding requirements. The scheme has received good response and the management of the Company is thankful to all the investors for participating in the scheme and the faith reposed in the Company. As on March 31, 2010, the aggregate amount collected under the fixed deposit scheme was Rs.0.43 crores from 84 depositors. The Company has no overdue deposit other than unclaimed deposits amounting to Rs.0.035 crores.

11. EMPLOYEE STOCK OPTION PLAN

As provided under the Scheme of Arrangement, the Company has to grant stock options in lieu of the stock options granted by the Transferor Company, (Brabourne Enterprises Ltd.) to its employees under 2005 Employee Stock Option Plan. The Compensation Committee of the Company has to adopt the said plan in its then existing form with such modifications that keep vesting period and life of options granted unaltered and permit issue of equity shares against vested options that have remained unexercised on the appointed date of the Scheme. The Company has not yet granted the said options. Hence, there is no information to be furnished in terms of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.

12. DIRECTORS

Mr. Arvind Vasudeva, Managing Director has resigned from the services of the Company with effect from April 9, 2010. The Board of Directors of the Company records its appreciation of the contribution made by Mr. Vasudeva during his tenure as Managing Director of the Company.

Mr. Ajit Singh Chouhan, Director has been

appointed as Managing Director of the Company with effect from April 9, 2010.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Dr. Lalit S. Kanodia, Mr. Manoj K. Maheshwari and Mr. Mahesh S. Gupta, Directors retire by rotation and, being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting.

The resolutions for their re-appointment as Directors of the Company are included in the notice of the Annual General Meeting.

The Board of Directors recommend the re-appointment of Dr. Lalit S. Kanodia, Mr. Manoj Maheshwari and Mr. Mahesh S. Gupta.

In compliance with clause 49IV(G) of the Listing Agreement, brief resume, expertise and other details of Directors proposed to be re-appointed are attached alongwith the notice of the Annual General Meeting.

None of these Directors are related to other Directors of the Company.

13. SAFETY

The safety inspection and audits were periodically carried out during the year across all factories. The safety awareness programmes were organised and concerned employees were also imparted safety training.

14. AUDITORS

M/s. Lovelock & Lewes, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting. M/s Lovelock & Lewes have expressed their willingness and confirmed their eligibility for re-appointment as Statutory Auditors of the Company.

15. APPRECIATION

Your directors record their appreciation of the valuable services rendered by all employees of the Company, their gratitude to the banks for their assistance and to the Companys shareholders, customers and suppliers for their continued support.

For and on behalf of the Board of Directors

H.V. Goenka Chairman

Place: Mumbai Date: May 12, 2010

 
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