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Directors Report of Suven Life Sciences Ltd.

Mar 31, 2015

The Members of

Suven Life Sciences Limited

The Company''s Board of Directors has pleasure in presenting this 26th Annual Report together with Audited Financial Statements of the Company for the financial year ended March 31, 2015.

FINANCIAL PERFORMANCE

Particulars 2014-15 2013-14 H in lakhs H in lakhs

(i) Revenue from operations 52,085.50 51,031.24

(ii) Operating expenditure 36,139.66 29,125.38

(iii) Depreciation and amortisation 1,177.57 883.74

(iv) Operating profit 14,768.27 21,022.12

(v) Interest expense 470.92 1,051.28

(vi) Other income 858.12 302.95

(vii) Profit before Tax 15,155.47 20,273.79

(viii) Tax expenses 4,280.44 5,858.04

(ix) Profit for the year 10,875.03 14,415.75

(x) Balance brought forward from previous year 15,617.65 6,069.01

(xi) Less: Adjustment of depreciation reserve as per Schedule II of Companies Act 2013 469.06 -

(xii) Profit available for appropriation 26,023.62 20,484.76

Appropriations:

(xiii) Proposed final dividend 763.69 2,920.72

(xiv) Tax on dividend 155.47 496.38

(xv) Difference in final dividend plus tax (2013-14 & 2012-13) 0.02 0.01

(xvi) Transfer to General Reserve 1,100.00 1,450.00

(xvii) Balance carried to balance sheet 24,004.42 15,617.65

REVIEW OF OPERATIONS

Fiscal 2014-2015 is yet another well performed year that registered a sales volume of Rs 52,086 lakhs as against Rs 51,031 lakhs in the previous year. Profit after Tax (PAT) of the Company was down by 25% to Rs 10,875 lakhs from Rs 14,416 lakhs in the previous financial year due to low value addition in the product line. The Earnings per Share (EPS) of your Company has come down to Rs 9.04 in fiscal 2014-15 per share from the previous year EPS of Rs 12.34 in fiscal 2013-14 per share.

EXPORTS

The exports continue to be the growth engine of your Company, accounting for a volume of Rs 47,990 lakhs, representing 92% of the total revenue of Rs 52,086 lakhs.

DIVIDEND

Your Directors have pleasure in recommending for approval of the members a dividend of Rs 0.60/- per share (60% on paid up value of Rs.1/- per share).

The total cash outflow on account of dividends payable including dividend distribution tax payable is Rs. 919.17 lakhs. If approved in the Annual General Meeting the dividend will be paid to the shareholders who are on the Register of Members of the Company as on the book closure date.

RESEARCH AND DEVELOPMENT

During the year Suven''s thrust on innovative R&D in CNS therapies continued with an R&D spend of Rs 5894 lakhs accounting to 11% on sales with an increase of 18% over the previous year.

During the year Suven''s lead clinical candidate SUVN-502 has successfully completed Phase 1b clinical trial thus paving the way for the compound to move into Proof of Concept (PoC) Phase 2a study in patients and the preparations are underway.

Also during the year SUVN-G 3031 successfully completed regulatory toxicological studies and entered into Phase 1 clinical trial in USA in preparation for it to move into Proof of Concept (PoC) Phase 2a study. In addition to the above compounds SUVN D-4010 is in its final stages of completing regulatory toxicological studies which will enable it to move into Phase 1 clinical trial in USA.

SHARE CAPITAL

The paid up Equity Share Capital as on March 31, 2015 was Rs.1272.83 lakhs. During the year under review, the Company has issued and allotted 104,53,690 equity shares of Re 1/- each at a premium of Rs 190.32 per share ranking pari-passu in all respects with the existing shares of the Company by way of QIP Issue in accordance with the SEBI ICDR guidelines, except this, your company has not issued any shares with differential voting rights nor granted stock options nor sweat equity shares.

EXTRACT OF ANNUAL RETURN

Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of the Companies Act 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014 the extracts of the Annual Return as at March 31, 2015 forms part of this report as "Annexure - A".

NUMBER OF MEETINGS OF THE BOARD AND AUDIT COMMITTEE

During the year under review five Board Meetings were convened and held on 22nd May 2014, 12th August 2014, 22nd September, 2014, 14th November 2014 and 10th February 2015 and five Audit Committee Meetings were convened and held on these dates.

The Audit Committee composed of all independent directors. Shri D G Prasad is the Chairman of the Audit Committee and Dr M R Naidu, Dr K.V.Raghavan and Shri M Gopalakrishna are members of the Audit Committee. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

DIRECTORS RESPONSIBILITY STATEMENT

Your Directors state 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 judgements and estimates made when required that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period.

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The Directors have prepared the Annual Accounts on a going concern basis.

v) Proper internal financial controls were in place to be followed by the Company and that the financial controls were adequate and were operating effectively.

vi) Proper systems devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the year under review the Company did not give any Loans, nor provided Guarantees nor made Investments covered under the provisions of Section 186 of the Companies Act, 2013.

RELATED PARTY TRANSACTIONS

The Particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188 in the prescribed Form AOC-2 pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014, forms part of this report as "Annexure - B".

The Board has approved a policy for related party transactions which has been uploaded on the Company''s website.

MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments, affecting the financial position of the Company which has occurred between the end of the financial year of the Company i.e. March 31, 2015 and the date of the Directors'' report i.e. 26th May, 2015.

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

The information on conservation of energy, technology absorption, foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, forms part of this report as "Annexure - C".

RISK MANAGEMENT POLICY

The Board formulated a suitable risk policy to take care of unique business models of your Company: Drug Discovery & Development Support Services (DDDSS) and CRAMS. Suven is an IP creating and protecting company, strictly adheres to and harmonise with the global patent regime. To ensure the security and confidentiality of client data, access to client data is restricted to the senior most team leader working on the respective project and observes strict standards of confidentiality by entering into an internal CDA. We believe that strict compliances to the non disclosure requirements insulate our company against risks relating to IPR infringement claims of our clients. In addition to these practices, your company regularly conducts safety and preventive audits in all plants and ensures that necessary safeguards are in place to protect the assets against all perils with appropriate insurance policies.

CORPORATE SOCIAL RESPONSIBILITY

In compliance with Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules 2014, the Company has established Corporate Social Responsibility (CSR) Committee composed of Shri M. Gopala Krishna as Chairperson, Shri Venkateswarlu Jasti and Smt Sudha Rani Jasti as members. The committee is responsible for formulating and monitoring the CSR policy of the Company. Annual Report on CSR Activities forms part of this Report as "Annexure - D".

PERFORMANCE EVALUATION OF THE BOARD

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

APPOINTMENTS/ RESIGNATIONS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL

The Board of Directors had on the recommendations of Nomination and Remuneration Committee re-appointed Shri Venkateswarlu Jasti, Chairman & CEO and Smt Sudha Rani Jasti as Whole-time Director for a period of 5 years commencing from 1st November 2014. The Members of the Company had at the Extra Ordinary General Meeting held on 21st October 2014 approved the said re-appointments. The Board of Directors has on the recommendations of Nomination and Remuneration Committee and Audit Committee appointed Mr. P Subba Rao as Chief Financial Officer of the Company.

The Members in the 25th Annual General Meeting of the Company held on 12th August 2014 have appointed Dr M R Naidu, Dr K V Raghavan, Shri D G Prasad and Shri M Gopala Krishna as Independent Directors in accordance with the provisions of the Companies Act, 2013 for a period of 5 years with effect from April 1, 2014.

All Independent Directors have given declarations confirming that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

None of the Directors or Key Managerial Personnel has resigned during the year under review.

DIRECTORS RETIRING BY ROTATION

In accordance with the provisions of the Companies Act,

2013, Shri Venkateswarlu Jasti, Director retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

The brief profile(s) of the director(s) seeking appointment/ re-appointment at the ensuing Annual General Meeting are presented in the Annual Report.

PUBLIC DEPOSITS

The Company has not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has laid down set of standards which enables to implement internal financial control across the organisation and ensure that the same are adequate and operating effectively (1) to provide reasonable assurances that: transactions are executed in conformity with generally accepted accounting principles/ standards or any other criteria applicable to such statements, (2) to maintain accountability for assets; access to assets is permitted only in accordance with management''s general or specific authorisation and the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; and (3) Provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use or disposition of the assets that could have a material effect on the financial statements.

VIGIL MECHANISM

The Company has put in place Whistle Blower Policy a vigil mechanism to deal with instance of fraud and mismanagement, if any. The details of the Whistle Blower Policy is explained in the Corporate Governance Report and also posted on the website of the Company

PARTICULARS OF EMPLOYEES AND REMUNERATION

The information required under Section 197(12) of the Act read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this report as "Annexure - E".

INVESTOR SERVICE

Your Company''s share registry operations (physical as well

as electronic form of holdings) will continue with Karvy Computershare Private Limited, Registrars and Transfer Agents. They can be contacted at Karvy Selenium, Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad - 500 032, Phone No. 040-6716 1565 Fax No. 040 -2300 1153 for any query relating to Shares.

The shares of the Company are listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE)

REPORT ON CORPORATE GOVERNANCE

A detailed Report on Corporate Governance prepared in substantial compliance with the provisions of Listing Agreements with the Stock Exchanges together with the Auditors'' Certificate regarding the compliance of conditions of corporate governance, forms part of Annual Report.

MANAGEMENT''S DISCUSSION AND ANALYSIS

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

AUDITORS

Statutory Auditors

Pursuant to the provisions of section 139 of the Companies Act, 2013 and the Rules framed thereunder the Company in its Annual General Meeting held on 12th August 2014 has appointed M/s. Karvy & Co., Chartered Accountants, as statutory auditors of the Company, from the conclusion of the 25th Annual General Meeting till the conclusion of the 28th Annual General Meeting to be held in the year 2017, subject to ratification of their appointment at every Annual General Meeting. The Auditors'' Report does not contain any qualifications.

Cost Auditors

The Board has appointed M/s DZR & Co, Cost Accountants (Firm Registration No. 00173) as Cost Auditors for the financial year 2014-2015 to carry out the cost audit of Company''s Records in respect of Bulk Drugs and Intermediates. However In terms of Cost (Records and Audit) Rules, 2014 dated 31st December 2014 issued by the Central Government, the requirement for Cost Audit is not applicable to the Company based on the export turnover criteria. Cost Audit Report for the financial year 2013-2014 was filed within the prescribed time limit

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. dvmgopal & associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report forms part of this report as "Annexure - F". The Secretarial Audit Report does not contain any qualifications.

GENERAL

There is no change in the nature of business of the Company. There are no companies which have become or ceased to be its subsidiaries, joint ventures or associate companies during the year.

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

ACKNOWLEDGEMENTS

Your Directors wish to place on record their gratitude to Shareholders for the confidence reposed by them and thank all the shareholders, customers, dealers, suppliers and other business associates for their contribution to your Company''s growth. The Directors also wish to place on record their appreciation of the valuable services rendered by the executives, staff and workers of the Company.

Your Directors also thank the Central Government and State Government, the Financial Institutions and Banks for their support during the year and we look forward to its continuance.

On behalf of the Board of Directors Venkateswarlu Jasti Place: Hyderabad, Chairman & CEO Date: May 26, 2015 DIN: 00278028


Mar 31, 2013

The Company''s Board of Directors has pleasure in presenting this 24th Annual Report together with Audited Accounts of the Company for the financial year ended March 31, 2013

FINANCIAL RESULTS

(Rs. in lakhs)

Particulars 2012-13 2011-12

i. Revenue from operations 25788.46 20420.78

ii. Operating expenditure 20469.91 18106.13

iii. Depreciation and amortization 786.71 599.79

iv. Operating profit 4531.84 1714.86

v. Interest expense 1350.94 990.93

vi. Other income 104.34 190.25

vii. Profit before Tax 3285.24 914.18

viii. Provision for Tax 201.29 (522.06)

ix. Profit for the year 3083.95 1436.24

x. Balance brought forward

from previous year 3705.12 2825.93

xi. Profit available for appropriation 6789.07 4262.17

Appropriations:

xii. Proposed final dividend 350.49 350.20

xiii. Tax on dividend 59.57 56.81

xiv. Difference in final dividend

plus tax (11-12& 10-11) 0.02 0.04

xv. Transfer to General Reserve 310.00 150.00

xvi. Balance carried to

balance sheet 6069.01 3705.12

REVIEW OF OPERATIONS

Fiscal 2012-13 was a productive year for your company as can be seen that we have marched towards continued growth momentum over the previous year. The Company''s operational performance during the financial year 2012-13 was quite impressive with a sales volume of Rs. 25,788 lakhs as against Rs. 20,421 lakhs in the previous year recording a growth of more than 26 percent. The exports turnover increased by 18 percent, from Rs. 19,358 lakhs in the previous financial year to Rs. 22,881 lakhs in the financial year under review. Profit After Tax (PAT) of the Company increased by 114 percent to Rs. 3,084 lakhs from Rs. 1,436 lakhs in the previous financial year. Your Company''s spend on Discovery R&D continued to the tune of Rs. 3,583 lakhs representing nearly 14% to turnover. The Earnings Per Share (EPS) of your Company has gone up to Rs. 2.64 in fiscal 2012-13 per share from the previous year EPS of Rs. 1.23 in fiscal 2011-12 per share, registering a growth of 115%.

EXPORTS

Exports continue to be major chunk of revenues of your Company by registering a volume of Rs. 22,882 lakhs representing 89% of total turnover of Rs. 25,788 lakhs.

DIVIDEND

Your Directors are pleased to recommended a dividend of Re 0.30 paisa per equity share of Re 1/- each (@ 30%) for the financial year 2012-13 which will absorb a sum of Rs. 4 1 0 lakhs including tax on dividend on paid-up capital of the Company. If approved in the Annual General Meeting the dividend will be paid to the shareholders who are on the Register of Members of the Company as on the book closure date.

RESEARCH AND DEVELOPMENT

As a research-based biopharmaceutical company, we are committed to applying innovative science and technology in search of new CNS therapies for better living. We continue to prioritise our resources and focus on discovery activities to develop innovative, cost-effective medicines that address significant unmet medical needs in the treatment of cognitive impairment associated with neurodegenerative disorders such as Alzheimer''s disease, Attention Deficient Hyperactivity Disorder (ADHD), Huntington''s disease, Parkinson, Schizophrenia in our existing pipeline of CNS therapeutic areas and also in the area of depression, Pain and Obesity which we believe are most likely to deliver technical and commercial success.

During the year under review, we continued our research focus on our twelve (12) internally-discovered therapeutic drug candidates currently in pre-clinical stage of development targeting conditions such as ADHD, dementia, depression, Huntington''s disease, Parkinson''s disease and obesity in addition to developmental candidate SUVN-502 for Alzheimer''s disease and Schizophrenia.

Your Company''s major qualitative achievements during the year include Suven getting Pharmexcil''s "Platinum Patent Award" for securing the most number of product and process patents under overall category, fourth year in a row.

CORPORATE SOCIAL RESPONSIBILITY

Our philosophy is to lend a helping hand to the underserved in our society through the support of various charities like old age homes, children''s education by constructing schools, drinking water supply, and health centers. Implementing this philosophy in spirit, we make a positive contribution to the communities in which we operate, and encourage support in health and education/sports programs with an aim to bring sustainable improvements to underserved people.

DIRECTORS

Dr. K V Raghavan, Director and Mr. D G Prasad, Director retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Mr. M Gopalakrishna has joined the Board on 14th November 2012 as Additional Director. Dr Matin Tolar has resigned from the Board w.e.f. 16th January 2013 due to his pre-occupation.

The brief profiles of the director(s) seeking appointment/re- appointment at the ensuing Annual General Meeting are presented in the Annual Report.

INVESTOR SERVICE

Your Company''s share registry operations (physical as well as electronic form of holdings) will continue with Karvy Computershare Private Limited, Registrars and Transfer Agents. They can be contacted at Plot No-17 to 24, Vittalrao Nagar, Madhapur, Hyderabad - 500 081 (Phone Nos. 040-23420818, 23420828 Fax No. 040 -23420814) for any query relating to Shares.

The shares of the Company are listed on National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE)

REPORT ON CORPORATE GOVERNANCE

A detailed Report on Corporate Governance prepared in substantial compliance with the provisions of Listing Agreements with the Stock Exchanges together with the Auditors'' Certificate regarding the compliance of conditions of corporate governance, forms part of Annual Report.

MANAGEMENT''S DISCUSSION AND ANALYSIS

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

AUDITORS

Statutory Auditors

Your Company''s Auditors, Messrs Karvy & Co., Chartered Accountants retire at the conclusion of forthcoming Annual General meeting and being eligible, offer themselves for re- appointment.

Cost Auditors

The Products classified as "bulk drugs" are subjected to Cost Audit in terms of Section 233B of the Companies Act read with the Central Government Rules. M/s. D Z R & Co., Cost Accountants have been re-appointed as the Cost Auditors for the year ending 31st March 2014 having been appointed for the FY 2012-13.

The Cost Audit Report for the year ended 31st March 2012 was reviewed by the Audit Committee at their meeting held on 14th November 2012 and has been filed on 7th January 2013 well within the extended due date of 28th February 2013.

The Cost Audit for the year ended 31st March 2013 is in progress and the Cost Audit Report will be filed within the stipulated time.

DIRECTORS RESPONSIBILITY STATEMENT

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

i) The applicable accounting standards have been followed in the preparation of the Annual Accounts.

ii) Accounting policies have been selected and applied consistently and judgements and estimates made when required that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period.

iii) 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 have been prepared on a going concern basis.

PUBLIC DEPOSITS

The Company has not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.

PARTICULARS OF EMPLOYEES

Statement of particulars of employees pursuant to the provision of Sec 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of employees) Rules, 1975 as amended.

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

The information required under section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988 with respect to these matters is enclosed herewith and forms part of the Report.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their gratitude to Shareholders for the confidence reposed by them and thank all the shareholders, customers, dealers, suppliers and other business associates for their contribution to your Company''s growth. The Directors also wish to place on record their appreciation of the valuable services rendered by the executives, staff and workers of the Company.

Your Directors also thank the Central Government and State Government, the Financial Institutions and Banks for their support during the year and we look forward to its continuance.

On behalf of the Board of Directors

Place : Hyderabad, Venkateswarlu Jasti

Date : 14th May, 2013 Chairman & CEO


Mar 31, 2012

The Company's Board of Directors has pleasure in presenting this 23rd Annual Report together with Audited Accounts of the Company for the financial year ended March 31, 2012.

FINANCIAL RESULTS

(Rs. lakhs)

Particulars 2011-12 2010-11

i. Revenue from operations 20420.78 15043.39

ii. Operating expenditure 18106.13 13688.62

iii. Depreciation and amortization 599.79 544.55

iv. Operating profit 1714.86 810.22

v. Interest expense 990.93 610.52

vi. Other income 190.25 125.75

vii. Profit before Tax 914.18 325.44

viii. Provision for Tax (522.06) (714.50)

ix. Profit for the year 1436.24 1039.95

x. Balance brought forward from

previous year 2825.93 1764.81

xi. Profit available for

appropriation 4262.17 2804.76

Appropriations:

xii. Proposed final dividend 350.20 291.82

xiii. Tax on dividend 56.81 47.34

xiv. Difference in final dividend

plus tax (10-11& 09-10) 0.04 1.97

xv. Transfer to General Reserve 150.00 110.00

xvi. Balance carried to balance sheet 3705.12 2353.62

REVIEW OF OPERATIONS

The Company continued its strong growth momentum during the year under review. The Company's revenue from operations during the financial year 2011-12 stood at Rs.20421 lakhs against Rs.15043 lakhs in the previous year recording a growth of more than 35 percent. The exports turnover increased by 42 percent, from Rs.13601 lakhs in the previous financial year to Rs.19358 lakhs in the financial year under review. Profit after tax (PAT) of the Company increased by 38 percent to Rs.1436 lakhs from Rs.1040 lakhs in the previous financial year, despite spend on Discovery R&D activities to the tune of Rs.3368 lakhs representing nearly 16 % to turnover of your company. The Earnings per Share (EPS) of your Company has gone up to Rs.1.23 in fiscal 2012 per share from the previous year EPS of Re 0.89 in fiscal 2011 per share, registering a growth of 38%

EXPORTS

Your Company has achieved an export revenue of Rs.19358 lakhs out of the total turnover of Rs.20421 lakhs representing 95%.

DIVIDEND

Your Directors are pleased to recommended a dividend of Re

0.30 paisa per equity share of Re 1/- each (@ 30 %) for the financial year 2011-12 which will absorb a sum of Rs.407 lakhs including tax on dividend on paid up capital of the Company. If approved in the Annual General Meeting the dividend will be paid to the shareholders who are on the Register of Members of the Company as on the book closure date.

AMALGAMATION OF SUVEN NISHTAA PHARMA PVT LTD, (NISHTAA)

Nishtaa - a group company has become a wholly owned subsidiary of your Company w.e.f. 31st December 2011. The Board of Directors in its meeting held on 31st January 2012 has given its consent for amalgamation of Nishtaa with Suven. The Scheme of Amalgamation of Nishtaa with Suven effect from 1st January 2012 (Appointed date) has been sanctioned by the Hon'ble High Court of Andhra Pradesh on 10th July 2012. The Audited Annual Accounts for the year under review were presented in accordance with the said Scheme of Amalgamation.

The amalgamation has enabled better utilization of resources and capital and creation of an integrated Corporate Structure for business development of your company, achieving economies of scale, operational and managerial efficiency and enhanced resource mobilization required for growth. It would also result in uniform management philosophy, utilization of common pool of talent, flexibility in funding expansion plans and achieving better cash flows substantially enhancing shareholders' value. The amalgamation also enhances the competitive strength of the Company to participate vigorously in high growth opportunities available in the Pharmaceutical Sector.

CORPORATE SOCIAL RESPONSIBILITY

Our philosophy is to lend a helping hand to the underserved in our society through the support of various charities like old age homes, children's education by constructing schools, drinking water supply, and health centers. Implementing this philosophy in spirit, we make a positive contribution to the communities in which we operate, and encourage support in health and education/sports programs with an aim to bring sustainable improvements to underserved people.

RESEARCH AND DEVELOPMENT

Suven's major thrust on innovative R&D in Drug Discovery continues with a spending of Rs.3368 lakhs (16% on sales revenue) for the year ended March 2012. During the year there were major qualitative achievements with the grant of 96 product patents and 9 process patents totaling to 105 patents to Suven's R&D pipeline which consists of 13 molecules out of which twelve (12) molecules currently in pre-clinical stage of development in addition to developmental candidate SUVN-502 for Alzheimer's disease and Schizophrenia. Also during the year under review, Suven bagged Pharmexcil's "Patent Award" for securing the most number of product patents during 2011 for their New Chemical Entities (NCE's) under Gold Category third year in a row.

Suven is committed to neuroscience research and for development of new treatments for neurological disorders. Suven's discovery research focuses on Central Nervous System (CNS) disorders through novel mechanisms using small- molecule medicinal chemistry approaches. Suven's CNS drug discovery scientists are pursuing innovative ways to develop treatments for a variety of CNS disorders like Alzheimer's, Schizophrenia, Depression, Cognitive disorders, Sleep, Neuro- degeneration and Obesity through CNS targets.

DIRECTORS

Prof Syed E Hasnain and Dr M R Naidu retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

The brief profiles of the director(s) seeking appointment/re- appointment at the ensuing Annual General Meeting are presented in the Annual Report.

INVESTOR SERVICE

Your Company's share registry operations (physical as well as electronic form of holdings) will continue with Karvy Computershare Private Limited, Registrars and Transfer Agents. They can be contacted at Plot No-17 to 24, Vittalrao Nagar, Madhapur, Hyderabad - 500 081 (Phone Nos. 040-23420818, 23420828 Fax No. 040 -23420814) for any query relating to Shares.

The shares of the Company are listed on National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE)

REPORT ON CORPORATE GOVERNANCE

A detailed Report on Corporate Governance prepared in substantial compliance with the provisions of Listing Agreements with the Stock Exchanges together with the Auditors' Certificate regarding the compliance of conditions of corporate governance, forms part of Annual Report.

MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT

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

AUDITORS Statutory Auditors

Your Company's Auditors, Messrs Karvy & Company, Chartered Accountants retire at the conclusion of forthcoming Annual General meeting and being eligible, offer themselves for re-appointment.

Cost Auditors

In pursuance of Section 233(B) of the Companies Act, 1956, the Central Government has directed audit of the Cost Accounting Records of your Company. The Cost Audit Report for the Financial Year 2011-12 is in process and the Report will be submitted to the Central Government within the prescribed time limit.

DIRECTORS RESPONSIBILITY STATEMENT

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

i) The applicable accounting standards have been followed in the preparation of the Annual Accounts.

ii) Accounting policies have been selected and applied consistently and judgments and estimates made when required that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period.

iii) 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 have been prepared on a going concern basis.

PUBLIC DEPOSITS

The Company has not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.

PARTICULARS OF EMPLOYEES

Statement of particulars of employees pursuant to the provision of Sec 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of employees) Rules, 1975 as amended.

Name of Employee Age Designation/ Gross Qualification Nature of Remuneration Duties Rs.in Lakhs

Dr. N.V.S.Ram akrishna 50 Vice- President 103.50 M.Sc., Ph.D. (Discovery Research)



Name of Employee Experience Date of Particulars in years Commence- of last ment Employment

Dr.N.V.S.Rama krishna 23 04/03/2002 Vice-President

(Discovery Research) Zydus Cadila

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

The information required under section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988 with respect to these matters is enclosed herewith and forms part of the Report.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their gratitude to Shareholders for the confidence reposed by them and thank all the shareholders, customers, dealers, suppliers and other business associates for their contribution to your Company's growth. The Directors also wish to place on record their appreciation of the valuable services rendered by the executives, staff and workers of the Company.

Your Directors also thank the Central Government and State Government, the Financial Institutions and Banks for their support during the year and we look forward to its continuance.

On behalf of the Board of Directors

Place : Hyderabad, Venkateswarlu Jasti

Date : 14th August, 2012 Chairman & CEO


Mar 31, 2011

Dear Members,

The Company's Board of Directors has pleasure in presenting this 22nd Annual Report together with Audited Accounts of the Company for the financial year 2010-11.

FINANCIAL RESULTS

Current Year Previous Year

Ended 31-03-11 Ended 31-03-10

(Rs. in Lakhs) (Rs. in Lakhs)

Sales and other incomes 15222.56 13388.83

Gross Profit 1480.51 1393.73

Less: Interest 610.52 494.03

Depreciation 544.55 529.14

Profit before Tax 325.44 370.56

Less: Provision for Taxation (714.51) (329.50)

Profit after Tax 1039.95 700.06

Add: Balance brought forward 1764.81 1473.55

Profit available for

appropriation 2804.76 2173.61

Appropriations:

Dividend 291.82 289.69

Dividend tax 47.34 48.11

Difference in final

dividend plus tax (09-10) 1.97 0.00

Transfer to General Reserve 110.00 71.00

Balance carried forward 2353.62 1764.81

REVIEW OF OPERATIONS

During the year under review, your company has recorded a total income of Rs. 15222.56 lakhs comprising exports revenue of Rs. 13601.37 lakhs, domestic revenue of Rs. 1442.02 lakhs, other income of Rs. 125.74 lakhs and increase in stocks of Rs. 53.43 lakhs. Your company made profit after tax of Rs. 1039.95 lakhs for the financial year ended 31st March 2011, despite regular spend on Discovery R&D activities to the tune of Rs. 3338.79 lakhs representing nearly 22.10% to turnover of your company.

EXPORTS

Your Company has continued to achieve 90% export turnover which is to the tune of Rs. 13601.37 lakhs out of the total turnover of Rs. 15104.23 lakhs

DIVIDEND

Your Directors are pleased to recommend a dividend Rs. 0.25 paisa per share on face value of equity share of Rs. 1/- each (@ 25%) for the financial year 2010-11 which will absorb a sum of Rs. 339.17 lakhs including tax on dividend on paid up capital of the Company. If approved in the Annual General Meeting the dividend will be paid to the shareholders who are on the Register of Members of the Company as on the book closure date.

RESEARCH AND DEVELOPMENT

Suven is continuing its thrust on innovative R&D in the area of CNS disorders. The spend on this account is Rs. 3338.79 lakhs which is 22.10% of the turnover during the year under retrospect. Suven's lead clinical candidate SUVN-502 has successfully completed long term regulatory safety toxicology studies. These regulatory tox studies are essential for FDA approval to initiate human phase 2a clinical trials in patient population. These studies have demonstrated very high Margin of Safety (MOS) paving the way to commence Phase 2a PoC (Proof of Concept) studies during the fiscal 2011/12. Your Company has twelve internally-discovered therapeutic drug candidates currently, in pre-clinical stage of development targeting conditions such as ADHD, dementia, depression, Huntington's disease. Parkinson's disease and 2 out of that pipeline is expected to move into Phase 1 clinical studies during the fiscal 2011/12.

SOCIAL RESPONSIBILITY

At Suven, we view Social Responsibility as a true effort to influence society in a manner that earns the trust and respect of stakeholders and society. We believe that economic performance and social responsibility can go hand in hand, when there is a genuine consideration of our impact on the communities and the environment in which we live and work. Your company has made contributions to various charities like schools for education, health centers and old age homes etc during the year.

DIRECTORS

As per the provisions of the Companies Act, 1956 and Articles of Association of the Company, Dr K V Raghavan and Mr D G Prasad retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re- appointment.

The brief profiles of the director(s) seeking appointment/re- appointment at the ensuing Annual General Meeting are presented in the Annual Report.

INVESTOR SERVICE

Your Company's share registry operations (physical as well as electronic form of holdings) will continue with Karvy Computershare Private Limited, Registrars and Transfer Agents. They can be contacted at Plot No-17 to 24, Vittalrao Nagar, Madhapur, Hyderabad - 500 081 (Phone Nos. 040-23420818, 23420828 Fax No. 040 -23420814) for any query relating to Shares.

The shares of the Company are listed on National Stock exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE)

REPORT ON CORPORATE GOVERNANCE

A detailed Report on Corporate Governance prepared in substantial compliance with the provisions of Listing Agreements with the Stock Exchanges together with the Auditors' Certificate regarding the compliance of conditions of corporate governance, forms part of Annual Report. A Report on Management Discussion and Analysis is prepared and attached to the Director's Report.

COST AUDIT

In pursuance of Section 233(B) of the Companies Act, 1956, the Central Government has directed audit of the Cost Accounting Records of your Company. The Cost Audit Report for the Financial Year 2010-11 is in process and the Report will be submitted to the Central Government within the prescribed time limit.

DIRECTORS RESPONSIBILITY STATEMENT

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

i) The applicable accounting standards have been followed in the preparation of the Annual Accounts.

ii) Accounting policies have been selected and applied consistently and judgements and estimates made when required that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period.

iii) 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 have been prepared on a going concern basis.

PUBLIC DEPOSITS

Your Company has not accepted any Deposits from the Public during the year under review.

AUDITORS

The Auditors, Karvy & Company, Chartered Accountants retire at the conclusion of this Annual General Meeting and being eligible, offer themselves for reappointment.

PERSONNEL

Statement of particulars of employees pursuant to the provision of Sec 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of employees) Rules, 1975 as amended.

Name of Employee Age Designation/ Gross Qualific -ation Experience Date of Particulars Nature of Remune ration in years Commence of last Duties Rs. in Lakhs -ment Employment

Dr N.V.S. Rama krishna 49 Vice- President 97.50 M.Sc, PhD 22 Years 04-03- 2002 Vice- President (Discovery (Discovery Research) Research) Zydus Cadila

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

The information required under section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988 with respect to these matters is enclosed herewith and forms part of the Report.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their gratitude to Shareholders for the confidence reposed by them and thank all the shareholders, customers, dealers, suppliers and other business associates for their contribution to your Company's growth. The Directors also wish to place on record their appreciation of the valuable services rendered by the executives, staff and workers of the Company.

Your Directors also thank the Central Government and State Government, the Financial Institutions and Banks for their support during the year and we look forward to its continuance.

On behalf of the Board of Directors

Place : Hyderabad VENKATESWARLU JASTI

Date:30th May 2011 Chairman & CEO






Mar 31, 2010

The Companys Board of Directors has pleasure in presenting this 21st Annual Report together with Audited Accounts of the Company for the financial year 2009-10.

FINANCIAL RESULTS

Current Year Previous Year Ended 31-03-10 Ended 31-03-09 (Rs in Lakhs) (Rs in Lakhs)

Sales and other incomes 13388.83 14614.60

Gross Profit 1393.73 2276.70

Less: Interest 494.03 674.94

Depreciation 529.14 502.15

Profit before Tax 370.55 1099.68

Less: 1) Exceptional Item 0.00 590.00

2) Provision for Taxation (329.51) (202.55)

Profit after Tax 700.06 712.22

Add: Balance brought forward 1473.55 1200.24

Profit available for appropriation 2173.61 1912.47 Appropriations:

Dividend 289.69 289.69

Dividend tax 48.11 49.23

Transfer to General Reserve 71.00 100.00

Balance carried forward 1764.81 1473.55

YEAR IN RETROSPECT

During the year under review, your company has achieved a total income of Rs 13388.83 lakhs comprising exports revenue of Rs 11687.17 lakhs and domestic revenue of Rs 1295.05 lakhs and other income of Rs 49.39 lakhs. We could maintain Profit after tax of around 7 crores inspite of global meltdown which has affected your companys revenue reduction by about 10% with the postponement and cancellations of the orders from global pharma majors during the year in retrospect.

EXPORTS

Despite global economic slowdown, your Company is able to sustain 90% turnover as export revenue which is to the tune of Rs 11687.17 lakhs

DIVIDEND

Your Directors are pleased to recommend a dividend Re 0.25 paisa per share on face value of equity share of Re 1/- each (@ 25%) for the financial year 2009-10 which will absorb a sum of Rs 337.80 lakhs including tax on dividend on the paid up capital of the Company. If approved in the Annual General Meeting the dividend will be paid to the shareholders who are on the Register of Members of the Company as on the book closure date.

RESEARCH AND DEVELOPMENT

SUVEN continues to focus on innovative R&D in the area of CNS disorders by spending Rs 3660.31 lakhs which is 28.19% of the turnover during the year under retrospect. Suvens lead clinical candidate SUVN-502 will commence its Phae 2a PoC (Proof of Concept) studies during the fiscal 2010/11 after completion of long term safety toxicology. Your Company has twelve internally-discovered therapeutic drug candidates currently, in pre-clinical stage of development targeting conditions such as ADHD, dementia, depression, Huntingtons disease. Parkinsons disease and 3 out of that pipeline is expected to move into Phase 1 clinical studies during the fiscal 2010/11.

Your Company is negotiating for an additional Collaborative Research Partnership (CRP) project with a global pharma major.

EVENTS AFTER THE BALANCE SHEET DATE

On 5th April 2010 a fire accident occurred in leased warehouse which is away from the main R&D unit of your company at Jeedimetla, RR Dist. Andhra Pradesh where the existing raw material stocks worth Rs 95 lakhs were burnt which were fully insured.. Your Company has lodged a claim with the insurance company for recovery of the estimated loss of Rs 95 lakhs and the claim is under process.

SOCIAL RESPONSIBILITY

Your company continues to shoulder its social responsibility and has made contributions to various charities like education, sports, spiritual and cultural programs and provided Reverse Osmosis systems and dug bore wells for the supply of drinking water to the neighboring villages around the plant facilities during the year.

DIRECTORS

The previous tenures of Shri Venkateswarlu Jasti , Chairman & CEO and Smt Sudha Rani Jasti, Wholetime Director of your company which have come to an end on 3rd January 2010, have been renewed for a further period of 5 years each w.e.f. 4th January 2010 in accordance with the applicable provisions of the Companies Act, 1956.

As per the provisions of the Companies Act, 1956 and Articles of Association of the Company, Dr S Ramachandran and Dr M R Naidu retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re- appointment.

Prof. Syed E Hasnain has joined the Board of your Company as additional director on April 30,2010..

The brief profiles of the director(s) seeking appointment/re- appointment at the ensuing Annual General Meeting are presented in the Annual Report.

INVESTOR SERVICE

Your Companys share registry operations (physical as well as electronic form of holdings) will continue with Karvy Computershare Private Limited, Registrars and Transfer Agents. They can be contacted at plot no-17 to 24,Vittalrao Nagar ,Madhapur ,Hyderabad -500 081 (Phone Nos. 040- 23420818,23420828 fax no.040-23420814) for any query relating to Shares.

The shares of the Company are listed on National Stock exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE)

REPORT ON CORPORATE GOVERNANCE

A detailed Report on Corporate Governance prepared in substantial compliance with the provisions of Listing Agreements with the Stock Exchanges together with the Auditors Certificate regarding the compliance of conditions of corporate governance, forms part of Annual Report. A

Report on Management Discussion and Analysis is prepared and attached to the Directors Report.

COST AUDIT

In pursuance of Section 233(B) of the Companies Act, 1956, the Central Government has directed audit of the Cost Accounting Records of your Company. The Cost Audit Report for the Financial Year 2009-10 is in process and the Report will be submitted to the Central Government within the prescribed time limit.

DIRECTORS RESPONSIBILITY STATEMENT

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

i) The applicable accounting standards have been followed in the preparation of the Annual Accounts.

ii) Accounting policies have been selected and applied consistently and judgements and estimates made when required that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period.

iii) 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 have been prepared on a going concern basis.

PUBLIC DEPOSITS

Your Company has not accepted any Deposits from the Public during the year under review.

AUDITORS

The Auditors, Karvy & Company, Chartered Accountants retire at the conclusion of this Annual General meeting and being eligible, offer themselves for reappointment.

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

The information required under section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988 with respect to these matters is enclosed herewith and forms part of the Report.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their gratitude to Shareholders for the confidence reposed by them and thank all the shareholders, customers, dealers, suppliers and other business associates for their contribution to your Companys growth. The Directors also wish to place on record their appreciation of the valuable services rendered by the executives, staff and workers of the Company.

Your Directors also thank the Central Government and State Government, the Financial Institutions and Banks for their support during the year and we look forward to its continuance.

On behalf of the Board of Directors

Place : Hyderabad, Venkateswarlu Jasti

Date:30th April 2010 Chairman & CEO

 
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