Directors Report of Zyden Gentec Ltd.

Mar 31, 2014

Dear Members

The Directors have immense pleasure in presenting their 20th Annual Report on the business and operations of the Company along with the audited Accounts and Auditor''s Report for the financial year ended on 31st March, 2014.

FINANCIAL RESULTS

The Standalone and consolidated performance of the company for the financial year ended on 31st March, 2014 is summarized below:

(Rs. in Lacs) (Rs. in Lacs)

PARTICULARS CONSOLIDATED STANDALONE

2013-14 2013-14 2012-13

1. Income from Operations 158.93 158.93 754.88

2. Total Expenses 315.02 314.61 881.80

3. Profit/(Loss) from operations before other Income, finance costs and exceptional items (1-2) (156.09) (155.68) (126.92)

4. Other Income 132.60 132.59 93.59

5. Profit/(Loss) from ordinary activities before finance costs, exceptional items and Tax (3 4) (23.49) (23.09) (33.33)

6. Finance cost 3.42 3.42 39.75

7. Profit/(Loss) from ordinary activities after finance costs but before exceptional items and Tax (5-6) (26.91) (26.49) (73.08)

8. Taxation (including FBT & Deferred Taxation) - - -

9. Net Profit/(Loss) after Tax & exceptional items (7-8) (26.91) (26.49) (73.08)

FINANCIAL PERFORMANCE OF THE COMPANY

During the Financial Year 2013-14, the gross receipts from Operations of the Company were Rs. 158.93 lacs as compared to Rs. 754.83 lacs in the financial year 2012-13 whereas the profit or (Loss) after tax & exceptional items for the FY 2013-14 were Rs. (26.49) lacs as against Rs. (73.08) lacs in the financial year 2012-13 and the consolidated gross receipts from Operations of the Company was Rs. 158.93 lacs and the profit or (Loss) after tax & exceptional items were Rs. (26.91) lacs for the year ended 31st March, 2014.

TRANSFER TO RESERVE

There is no amount proposed to be transferred in reserve as there is no profit at the year ended as on 31st March, 2014.

DIVIDEND

Due to non availability of distributable profits, your Directors do not recommend any dividend for the financial year 2013-14.

FIXED DEPOSITS

The Company has not invited or accepted any fixed deposit from the public during the financial year 2013-14.

BOARD OF DIRECTORS

a) Retire by Rotation

In accordance with the provisions of Section 152 of the Companies Act, 2013 and as per Article 89 of the Articles of Association of the Company, Mr. Vinod Kumar Gupta (DIN 00193202) Director of the Company retires by rotation at the ensuring Annual General Meeting and being eligible offer himself for re-appointment as per Article 90 of the Articles of Association of the Company.

b) Resignation of Director

During the financial year 2013-14, Ms. Anita Kumari, Whole Time Director has resigned from the Board w.e.f. 12th March, 2014. The Board accepted the same and put on record the appreciation of her contribution towards the Company during her tenure.

c) Change in Designation

Mr. Manish Jatia was appointed as director of the Company w.e.f. 30th May, 2013, During the year the designation of Mr. Manish Jatia was changed from Director to Whole Time Director of the Company w.e.f. 26th March, 2014 after receiving of his consent for the post of Whole Time Director on such remuneration decided by the Board of the Company.

d) Appointment of Additional Director

Mr. V Siva Subbu was appointed as Additional Director at the Board of Directors Meeting held on 26th March, 2014, The Board received notice from a member proposing the candidature of Mr. V Siva Subbu for the office of Director u/s 149, 150, 152 of the Companies Act, 2013. The Board recommends his appointment as an Independent Director of the Company, not liable to retire by rotation.

The Details are furnished in Explanatory Statement annexed to the Notice calling AGM.

NUMBER OF BOARD MEETINGS

During the year, Board of Directors of the Company were met six (6) times on 30th May 2013, 13th August, 2013, 30th August, 2013, 14th November, 2013, 7th February, 2014 and 26th March, 2014.

REMUNERATION AND NOMINATION COMMITTEE

The Board constituted the Remuneration committee in year 2005, now it has been renamed as Remuneration and Nomination Committee in compliance of section 178 of the Companies Act, 2013. The terms of reference of the committee were also extended so as to formulate remuneration policy for appointment and remuneration of the directors including their qualifications, independence and other incidental matters thereto,

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

As per section 186 of the Companies act 2013, the particulars of loans, guarantees and investments for the year ended on 31st March, 2014 are as follows:

Particulars F.Y. 2013-14 F.Y. 2012-13 (in Rs.) (in Rs.)

Long term loan & advances 1,260,280 1,212,102

Non-current Investment 70,250 70,250

PARTICULARS OF RELATED PARTY TRANSACTIONS

During the year under review, there were no related party transactions as per section 188 of the Companies Act 2013.

AUDITORS AND AUDITORS REPORT

M/s Rajvanshi and Associates, Chartered Accountants, Statutory Auditors of the Company, retires at the forthcoming Annual General Meeting and have confirmed their eligibility and that reappointment, if made, would be within the prescribed limits under Section 139 of Companies Act, 2013 and that they are not disqualified for such re- appointment within the meaning of the Act.

There are no reservations, qualifications or adverse remarks contained in the auditor''s Report attached to the balance sheet as at 31st March, 2014. Information referred in the Auditor''s Report are self explanatory and don''t call for any further comments.

Your Board recommends their re-appointment for tenure of 5 years from the conclusion of this AGM till the conclusion of 25th AGM of the company to be held in the calendar year 2019.

SUBSIDIARY COMPANY

Zyden Gentec Hong Kong Limited is wholly owned Subsidiary of Company having its registered Office at Unit 801, 8th Floor, 20 Queen''s Road central, Hong Kong. The Statement as per section 212 of Companies Act 1956 (129 of Companies Act 2013), disclosure of Zyden Gentec Hong Kong Limited attached along with consolidated financial statement.

CORPORATE GOVERNANCE REPORT

The Company has complied with all the mandatory requirements of Corporate Governance as per Clause 49 of Listing Agreement specified by Securities & Exchange Board of India (SEBI). As required by the said clause, a separate section of Corporate Governance, forms part of the Annual Report of the Company, A certificate from M/s V. M. & Associates, Company Secretaries in Practice, confirming compliance of conditions of Corporate Governance, is annexed with this report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed discussion on the industrial structure, development, opportunities, threats, review of operational performance and risks, as required under the Listing Agreement with stock exchanges, forms part of this report and is annexed herewith.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND RESEARCH & DEVELOPMENT

A. Conservation of energy:

I. Energy conservation measures taken:

Energy conservation has a direct impact on the cost of the product, so high priority is given on to in all our locations. Manufacturing process parameters are continuously monitored by experienced & qualified technicians & engineers for better & efficient output leading directly & indirectly to energy efficient environment.

II. Additional investments and proposal, if any, being implemented for reduction of consumption of energy:

i. HT line & connections installed in place of LT.

ii. New temperature indicators installed for better monitoring.

iii. Replaced all of old pipe lines & fittings and new Insulations done.

iv. 180 KVA DG Set.

III. Impact of above measures on the cost of production of goods:

i. The above measures helped to improve the energy management and consequently to reduce the cost.

B. Technology absorption:

The manufacturing technology is indigenous. The company has in-house Research & Development facilities.

C. Research & development:

I. Specific areas In which R & D carried out by the Company:

Developments of new compounds, products like Oxybutynin Hydro Chloride USP, Tolnaftate EP USP, Isopropamide Iodide USP, Rosuvastatin Calcium during the year and a couple of products are ready to start commercial production.

II. Benefits derived as a result of above R & D:

Developments of new products and improved quality of existing products and compounds, resulting in better profits and helped in creating good clientele.

III. Future Plan of Action:

To keep a continuous focus on development of new compounds & products.

IV. Expenditure on R & D:

During the financial year 2013-14 expenditure incurred regarding research and development were Rs. 66,000/- only.

FOREIGN EXCHANGE EARNING AND OUTGO

The foreign exchange earnings during the financial year 2013-14 is Rs. 27,25,383/- and import was nil as there was no import during the year.

PARTICULARS OF EMPLOYEES

None of the Employees of the company were in receipt of the remuneration exceeding the limits prescribed under section 217(2A) of the Companies Act, 1956, as amended, during the financial year 2013-14.

ISSUE OF FOREIGN CURRENCY CONVERTIBLE BONDS

The company has not issued any Foreign Currency Convertible Bonds during the financial year 2013-14.

LISTING AT STOCK EXCHANGE

The Equity Shares of your company continue to be listed on Bombay Stock Exchange Limited and the annual listing fees for the financial year 2014-15 have been paid.

DEPOSITORY SYSTEM

The trading in equity shares of your company is in dematerialization form. As on the date 30th August, 2014 (date of last benpose), equity shares representing 98.59% of equity shares are in dematerialization form.

EMPLOYEE STOCK OPTION SCHEME

The Company has not issued any stock options for its employees during financial year 2013-14.

LOANS ON COMPANY

Bank accounts were classified as NPA (Non performing Assets) by the Banks and Company has initiated the process of settlement with Banks and accordingly has not provided any liability towards interest including penal interest expenses as company is hopeful that no liability other than that recorded in the books of accounts would arise.

Management is initiated the process for settlements/upgradation of Accounts and hopeful of favourable decision.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Audited Accounts for the financial year 2013-14 are in conformity of section 134 (5) of the Companies Act, 2013 and applicable Auditing Standards. The Financial Statements (including consolidated financial Statement) fairly reflects the transactions carried out during the year and reasonably present the financial condition and results of operation of the Company. Your Directors confirm that:

* In the preparation of the Annual Accounts for the year ended 31st March, 2014, the applicable Accounting Standards have been followed along with proper explanations and there are no material departures from the same;

* We have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company for the Financial year 2013-14 and of the Profit and loss of the Company for that period;

* We 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;

* We have prepared the Annual Accounts of the Company on a ''going concern'' basis;

HUMAN RESOURCE

Your company is of the firm opinion that efficiency of its employees plays a key role in achieving set goals and building competitive work environment which further leads to sound coordination and employees work like a team. Our various management programmes at different levels, ensures vibrant and motivated work force, which leads to achievement of our goals. The management and board shows gratitude towards its employees for having faith and never say die attitude towards accomplishment of defined goals.

SECRETARIAL AUDIT REPORT

Pursuant to the Section 204 of The Companies Act, 2013, every listed company shall annex with its Board''s Report, a Secretarial Audit Report which shall be issued from the financial year 2014-15 onwards which is to be given by a Company Secretary in practice.

In compliance with the aforesaid requirements. M/s V. M. & Associates, Company Secretaries, Jaipur, have been appointed as the Secretarial Auditor of the Company for the financial year 2014 -15.

INTERNAL AUDITOR

The Board has appointed Ms. Rekha Chaurshiya, Chartered Accountant, holding Membership No 404422 as Internal Auditor of the Company w.e.f. 30th May, 2014.

ACKNOWLEDGEMENT

Your Directors would like to express their appreciation for assistance and co-operation received from the Bankers, Government Authorities, Customers, Vendors, Advisors, Members and all concerned. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the Company

For and on behalf of Board of Directors

Sd/- Date: 30.08.2014 Vinod Kumar Gupta Place: Kota Chairman

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Mar 31, 2013

Dear Shareowners,

The Directors present here the 19th Annual Report along with the audited Accounts and Auditor''s Report for the financial year ended on 31st March, 2013.

FINANCIAL RESULTS

The Standalone and consolidated performance of the company for the financial year ended on 31st March, 2013 is summarized below:

(Rs. in Lacs) (Rs. in Lacs) PARTICULARS CONSOLIDATED STANDALONE

2012-13 2012-13 2011-12

1. Income from Operations 1484.11 830.56 1028.93

Less:- Excise duty 75.68 75.68 77.73

Total Income from Operations (net) 1408.43 754.88 951.20

2. Total Expenses 1525.03 882.40 1286.93

3. Profit/(Loss) from operations before other (116.60) (127.52) (335.73)

Income, finance costs and exceptional items (1-2)

4. Other Income 93.59 93.59 10.69

5. Profit/(Loss) from ordinary activities before finance (23.01) (33.93) (325.04) costs, exceptional items and Tax (3 4)

6. Finance cost 39.15 39.15 120.74

7. Profit/(Loss) from ordinary activities after finance costs (62.16) (73.08) (445.78) but before exceptional items and Tax (5 -6)

8.Taxation (including FBT & Deferred Taxation) (35.81)

9. Net Profit / (Loss) after Tax & exceptional items (7 -8) (62.16) (73.08) (409.97)

FINANCIAL PERFORMANCE

During the Financial Year 2012-13, the gross receipts from Operations of the Company were Rs. 754.88 lacsas compared to Rs. 951.20 lacs in the financial year 2011-12 whereas the profit or (Loss) after tax & exceptional items were Rs. (73.08) lacs as against Rs. (409.97) lacs in the financial year 2011-12 and the consolidated gross receipts from Operations of the Company for the year ended 31st March, 2013 was Rs. 1408.43 lacs and the profit or (Loss) after tax & exceptional items were Rs. (62.16) lacs.

The company is going through a recovering phrase and which has the further decreased the performance of the Company and tough Market situations, liquidity crunch and lesser profit margins are crux factors for such decreased performance. The door to foreign exports has increased considerably in last quarter with opening of subsidary, so we expect speedy recovery in the time to come.

WHOLLY OWNED SUBSIDIARIES

To mark our business presence worldwide, and with perspective of serving our worldwide customer base, Company have incorporated a foreign Wholly Owned Subsidiary titled "Zyden Gentec Hong Kong Limited" in Hong Kong on 4th February, 2013 having registered office Unit 801, 8th Floor, 20 Queen''s Road Central, Hong Kong as per Hong Kong Ordinance.

DIVIDEND

Due to non availability of distributable profits, your Directors do not recommend any dividend for the financial year 2012-13.

FIXED DEPOSITS

The Company has not invited or accepted any fixed deposit from public during the financial year 2012-13.

BOARD OF DIRECTORS

a) Retire by Rotation

In accordance with the provisions of Section 256 of the Companies Act, 1956 and as per Article 89 of the Articles of Association of the Company, Mr. Vinod S Gupta, Chairman retires by rotation at the following Annual General Meeting and being eligible offer himself for re-appointment as per Article 90 of the Articles of Association of the Company.

b) Resignation of Director

1. During the financial year 2012-13, Mr. Rajesh Sharma, Director has resigned from the Board w.e.f. 25th March, 2013. The Board accepted the same and put on record the appreciation of his contribution towards the Company during his tenure.

2. Mr. Venkata Kameshwara Rao, Whole Time Director has given his resignation from the board w.e.f 30.08.2013 and the same has been duly accepted by the board. Further the board put on record the appreciation of his contribution towards the company since the beginning of Kota unit.

c) Appointment of Additional Director

Mr. Manish Omprakash Jatia was appointed as Additional Director at the Board Meeting held on 30th May, 2013. The Board received notice from a member proposing the candidature of Mr. Manish Omprakash Jatia as a Director u/s 257 of the Companies Act, 1956. The Board recommends his appointment as a regular Independent Director of the Company, liable to retire by rotation. The Details are furnished in Explanatory Sttement annexed to the Notice calling AGM.

d) Appointment of Whole Time Director

Ms. Anita Kumari was appointed as Additional Director at the Board Meeting held on 30th August, 2013. Further, subject to the approval of members, she will be appointed as a Whole-time Director of the Company w.e.f. the same date for a period of 5 years.

In terms of section 260 of the Companies Act, 1956, she shall hold office only upto the date of the ensuing Annual General Meeting. The Board received a notice u/s 257 of the Companies Act, 1956 from a member proposing the candidature of Ms. Anita Kumari, as a Director. In view of this the Board recommends her appointment as a Whole-time and Independent Director of the Company, liable to retire by rotation. The Details are furnished in Explanatory Statement annexed to the Notice calling AGM.

AUDITORS

M/s Anand Jain & Co, Chartered Accountants, have tendered resignation from being Auditors of the Company after the conclusion of the ensuing Annual General Meeting due to their preoccupancy and the same have been duly accepted by the board. The Board put sincere regards and appreciation for Mr. Anand Jain, proprietor, M/s Anand Jain & Co for such a wonderful tenure and professional relationship with the Company.

The Board on recommendation from Audit Committee further decided to request M/s Rajvanshi & Associates, Chartered Accountant, Jaipur for their tenure with the Company as Statutory Auditors, and they have also shown their willingness and the offer has been duly accepted by them. and company had also received letter from them, to the effect that their appointment, if made would be within the prescribed limits under section 224(1B) of the Companies Act, 1956 and that they are not disqualified for such appointment within the meaning of section 226 of the Act.

The board further recommends the appointment of M/s Rajvanshi & Associates, Chartered Accountants, Jaipur, as Statutory Auditors of the Company.

The notes on the financial statements referred to in the Auditors Report are self-explanatory and have been explained / clarified and do not calls for any further comment.

CORPORATE GOVERNANCE REPORT

The Company has complied with all the mandatory requirements of Corporate Governance specified by Securities & Exchange Board of India (SEBI) through Clause 49 of the Listing Agreement. As required by the said clause, a separate section on Corporate Governance, forms part of the Annual Report of the Company. A certificate from M/s V. M. & Associates, Company Secretaries in Practice, confirming compliance of conditions of Corporate Governance, is annexed with this report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed discussion on the industrial structure, development, opportunities, threats, review of operational performance and risks, as required under the Listing Agreement with stock exchanges, forms part of this report and is annexed herewith.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND RESEARCH & DEVELOPMENT

A. Conservation of energy :

I. Energy conservation measures taken:

Energy conservation has a direct impact on the cost of the product, so high priority is given on it in all our locations. Manufacturing process parameters are continuously monitored by experienced & qualified technicians & engineers for better & efficient output leading directly & indirectly to energy efficient environment.

II. Additional investments and proposal, if any, being implemented for reduction of consumption of energy:

i. HT line & connections installed in place of LT.

ii. New temperature indicators installed for better monitoring.

iii. Replaced all of old pipe lines & fittings and new Insulations done.

iv. 180 KVA DG Set.

III. Impact of above measures on the cost of production of goods:

i. The above measures helped to improve the energy management and consequently to reduce the cost.

B. Technology absorption: The manufacturing technology is indigenous. The company has in-house Research & Development facilities.

A. Research & development:

I. Specific areas in which R&D carried out by the Company:

Developments of new compounds, products like Oxybutymin Hydro Chloride USP, Tolnaflate EP USP, Isopropomide Iodide USP, Rosuvastatin Calcium during the year and a couple of products are ready to start commercial production.

II. Benefits derived as a result of above R&D: Developments of new products and improved quality of existing products and compounds, resulting in better profits and helped in creating good clientele.

III. Future Plan of Action: To keep a continuous focus on development of new compounds & products.

IV. Expenditure on R&D: The summary of expenditures incurred regarding research and development during the financial year 2012-13 are as follows:

Particulars Amount (in Rs.)

1. Capital 2,20,000

2. As percentage of Sales 2.65%

FOREIGN EXCHANGE EARNING AND OUTGO

1. The Foreign Exchange earnings of the company were Rs. 2,91,67,208/- and there was outgo of

Rs. 42,40,283/- during the financial year 2012-13.

2. Activities relating to exports / initiatives taken to increase exports / development of new export markets and export plans:

PARTICULARS OF EMPLOYEES

None of the Employees of the company were in receipt of the remuneration exceeding the limits prescribed under section 217(2A) of the Companies Act, 1956, as amended, during the financial year 2012-13.

ISSUE OF FOREIGN CURRENCY CONVERTIBLE BONDS

The company has not issued any Foreign Currency Convertible Bonds during the financial year 2012-13.

LISTING AT STOCK EXCHANGE

The Equity Shares of your company continue to be listed on Bombay Stock Exchange Limited and the annual listing fees for the financial year 2013-14 have been paid.

DEPOSITORY SYSTEM

The trading in equity shares of your company is under compulsorily in dematerialization form. As on the date 30th August, 2013 (date of last benpose), equity shares representing 98.58% of equity shares are in dematerialization form.

EMPLOYEE STOCK OPTION SCHEME

The Company has not issued any stock options for its employees during financial year 2012-13.

LOANS ON COMPANY

Heavy losses in last couple of years, and liquidity crunches, are playing a heavy role in current loss making business cycle. To compensate the losses, company had taken loans both fund and non fund based from Punjab National Bank in May 2010, but due to continuous losses have to restructure the limits in March 2012. The interest burden with stringent margins, are playing heavy on company''s growth structure.

Also, Bankers have now recalled the loans, and classified the account as NPA (Non Performing Asset), though some clarifications are need to be answered on Bankers part, as criteria of NPA classification is not acceptable and true to the extent of policies and agreements.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, your Directors Confirmed that:

In the preparation of the Annual Accounts for the year ended 31st March, 2013, the applicable

- Accounting Standards read with requirements set out under Schedule VI of the Companies Act, 1956 have been followed and there are no material departures from the same;

We have selected such accounting policies and applied them consistently and made judgments and

- estimates that are reasonable and prudent so as to give true and fair view of the State of Affairs and of profit / Loss of the Company for that financial year ended 31st March 2013;

We 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;

We have prepared the Annual Accounts of the Company on a ''going concern'' basis.

HUMAN RESOURCE

Your company is of the firm opinion that efficiency of its employees plays a key role in achieving set goals and building competitive work environment which further leads to sound coordination and employees work like a team. Our various management programmes at different levels, ensures vibrant and motivated work force, which leads to achievement of our goals. The management and board shows gratitude towards its employees for having faith and never say die attitude towards accomplishment of defined goals.

ACKNOWLEDGEMENT

Your Directors would like to express their appreciation for assistance and co-operation received from the Bankers, Government Authorities, Customers, Vendors, Advisors, Members and all concerned. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the Company.

By Order of the Board of Directors

Sd/-

Mukesh Jiwnani

Kota, August 30, 2013 Company Secretary

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Mar 31, 2012

The Directors are pleased to present the 18th Annual Report and the Audited Accounts of the Company for the year ended March 31, 2012.

FINANCIAL RESULTS (Rs. In Lacs) FY 11-12 FY 10-11

1. Income from Operations 1028.93 1312.17

Less:- Excise duty 77.73 102.47

Total Income from Operations (net) 951.20 1209.70

2. Total Expenses 1286.93 1132.04

3. Profit/(Loss) from operations before other Income, finance costs and exceptional items (1-2) (335.73) 77.66

4. Other Income 10.69 1.54

5. Profit/(Loss) from ordinary activities before finance costs, exceptional items & Tax (3 4) (325.04) 79.20

6. Finance cost 120.74 81.67

7. Profit/(Loss) from ordinary activities after finance costs but before exceptional items & Tax (5-6) (445.78) (2.47)

8. Taxation (including FBT & Deferred Taxation) (35.81) 8.33

9. Net Profit/(Loss) after Tax & exceptional items (7-8) (409.97) (10.80)

TURNOVER, NET PROFITS & FUTURE PROSPECTS

The gross receipts from Operations (net) during the year under review were Rs. 951.20 Lacs as against Rs. 1209.70 Lacs in the previous year. The profit/ (Loss) after tax & exceptional items is Rs. (409.97) Lacs as against Rs. (10.80) Lacs in the previous year. The income from operations decreased by 21.37% during the year under review and, the loss figures have shown increases during the year under review. The sale prices remained under pressure, throughout the year, due to regional disturbances and bandhs as well as fierce competitions and huge imports from Chinese firms. The Hyderabad unit is under lay-off and temporary closed since September 2011 due to various reasons which were beyond in the control of the management and effected substantially on turnover as well profit/ (Loss) of the Company.

We are pleased to inform that Kota unit introduced four more products, which having a high demand in international markets. The products Carisprodol (Painkiller), Calcium dobesilate (Vasoprotective), Dextromethorphan Hbr (Cough Suppressant), Cinnerizine (Anti Histamine) and a couple of products are ready to start commercial production.

DIVIDEND

There is no Surplus available during the year and hence your Directors do not recommend any dividend for the current financial year.

FIXED DEPOSITS

The Company has not invited or accepted any fixed deposit from the public during the year under review.

CORPORATE GOVERNANCE REPORT

The Company has complied with all the mandatory requirements of Corporate Governance specified by Securities & Exchange Board of India (SEBI) through Clause 49 of the Listing Agreement. As required by the said clause, a separate Report on Corporate Governance, forms part of the Annual Report of the Company. A certificate from M/s V M & Associates, Company Secretaries in Practice, confirming compliance of conditions of Corporate Governance is annexed with this report.

BOARD OF DIRECTORS

Retire by Rotation

In accordance with the provisions of Section 256 of the Companies Act, 1956 and the Article 89 of Articles of Association of the Company, Mr. Niranjan Kumar Agrawal, Director retires by rotation at the ensuing Annual General Meeting and being eligible offer himself for re-appointment.

Appointment of Additional Director

Ms. Anita Kumari was appointed as an Additional Director at the Board Meeting held on 27th September, 2011. The Board received a notice u/s 257 of the Companies Act, 1956 from a member proposing the candidature of Ms. Anita Kumari as a Director. In view of this the Board recommends her appointment as a regular Independent Director of the Company, liable to retire by rotation.

The Details are furnished in Explanatory Statement annexed to the Notice calling AGM.

AUDITORS

M/s Anand Jain & Co., Chartered Accountants, Jaipur Auditor of the Company retire at the forthcoming Annual General Meeting and being eligible offer himself for re-appointment.

The Company had received letter from M/s Anand Jain & Co., Chartered Accountants, Jaipur to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224(1 B) of the Companies Act, 1956 and that they are not disqualified for such reappointment within the meaning of Section 226 of the Act.

The qualifications/observations of the Auditor are self- explanatory and explained / clarified wherever necessary in appropriate notes to Accounts.

CHANGES IN SHARE CAPITAL

During the year, the following changes were effected in the Share Capital of the Company:

i. The paid-up share capital of the Company was increased from Rs. 5,06,74,000/- to Rs. 5,56,74,000/- due to Preferential allotment and issue of 50,00,000 Equity Shares of Re. 1/- each [at an exercise price of Rs. 2.10/- per share (including premium)] on 30th September, 2011 to the holders of convertible warrants who opted for conversion in accordance with the relevant SEBI Regulations. The holders of convertible warrants exercised the option of conversion in terms of Special Resolution approved on 20th September, 2010 in Annual General Meeting.

ii. The paid-up share capital of the Company was increased from Rs. 5,56,74,000/- to Rs.

11,11,24,000/- due to Preferential allotment and issue of 5,54,50,000 Equity Shares of Re. 1/- each at Rs. 1.36/- (including premium) per equity share on 28th March, 2012 to the Persons other than Promoters in terms of Special Resolution approved on 5th March, 2012 in Extra-ordinary General Meeting.

ISSUE OF FOREIGN CURRENCY CONVERTIBLE BONDS

The company has not issued any Foreign Currency Convertible Bonds during the last year.

LISTING AT STOCK EXCHANGE

The Equity Shares of the company continue to be listed on Bombay Stock Exchange Limited.

PARTICULARS OF EMPLOYEES

None of the Employee's of the company was in receipt of the remuneration exceeding the limits prescribed under section 217(2A) of the Companies Act, 1956 as amended, during the year under review.

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

Conservation of Energy

Energy conservation measures taken:

Energy conservation, which has a direct impact on the cost of the product, is given a high priority in all our locations. Manufacturing process parameters are continuously monitored by experienced & qualified technicians & engineers for better & efficient output leading directly & indirectly to energy efficient environment.

Additional investments and proposal, if any, being implemented for reduction of consumption of energy:

i) HT line & connections installed in place of LT.

ii) New temperature indicators installed for better monitoring.

iii) Replaced all of old pipe lines & fittings and new Insulations done.

iv) 180 KVA DG Set.

Impact of above measures for reduction of energy consumption and consequent impact on the cost of production of goods:

The above measures have helped the Company to improve its energy management efficiently and consequently to reduce the cost.

Form A:

Not Applicable

Technology Absorption

The manufacturing technology is indigenous. The company has in-house Research & Development facilities.

Research & Development

Specific areas in which R&D carried out by the Company:

Development of new compounds, products like Carisprodol (Painkiller), Calcium dobesilate (Vasoprotective), Dextromethorphan Hbr (Cough Suppressant), Cinnerizine (Anti Histamine) during the year and a couple of products are ready to start commercial production.

Benefits derived as a result of above R&D:

Better quality products and compounds, resulting in better profits and helped in creating good clientele.

Future Plan of Action:

To keep a continuous focus on development of new compounds & products.

Expenditure on R&D:

Capital 1.92 Lacs

As percentage of Sales .18%

Technology absorption, adoption and innovation

The company's technology is developed in-house which has helped in improving efficiency and developing new products.

Foreign Exchange Earnings and Outgo

The Foreign Exchange earnings of the company were Rs. 1,66,95,200/- and there was outgo of Rs. 24,89,267/- during the year under review.

Activities relating to exports/initiatives taken to increase exports/development of new export markets and export plans

During the year under review, the Company could not capture the export business opportunities at optimum during the year 2011-12. The foreign exchange earnings of the Company were Rs. 1,66,95,200/- in spite of various reasons like lay off and temporary closed of its Hyderabad unit. Recently kota unit introduced four more high value products, which having a high demand in international markets and expecting good business by these products in the year of 2012-13.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The report on Management Discussion and Analysis as required under the Listing Agreements with the Stock Exchanges is annexed with the Director's Report.

EMPLOYEE STOCK OPTION SCHEME

The Company has not issued any stock options during the year under review.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, your Directors confirmed that:

1. In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and there are no material departures;

2. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the State of Affairs of the Company for the financial year ended 31st March 2012 and of profit / (loss) of the Company for that year;

3. They have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate Accounting records in accordance with the provisions of the Companies Act, 1 956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. They have prepared the Annual Accounts on a 'going concern' basis.

ACKNOWLEDGEMENT

Your Directors would like to express their appreciation for assistance and co-operation received from the Bankers, Government Authorities, Customers, Vendors, Advisors, Members and all concerned during the year under report. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the Company.

For and on behalf of the Board of Directors

Sd/-

Vinod S. Gupta

Chairman

Date: 12th June, 2012

Place: Kota

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Mar 31, 2010

The Directors are pleased to present the 16th Annual Report and the Audited Accounts of the Company for the year ended March 31,2010.

FINANCIAL RESULTS FY 09-10 FY 08-09

( Rs. In Lacs)

Total Income 1,905.10 2790.81

Profit before 85.58 24.24

Depreciation & Taxation

Depreciation 65.17 12.81

Profit before Tax 2041 11.43

Taxation (including FBT 8.11 9.30

& Deferred Taxation)

Profit after Tax 12.30 2.13

TURNOVER, NET PROFITS & FUTURE PROSPECTS

The gross receipts during the year under review were Rs. 1,905.10 Lacs as against Rs. 2790.81 Lacs in the previous year. The profit after tax is Rs. 12.30 Lacs as against Rs. 2.13 Lacs in the previous year. The income decreased by 31.74% during the year under review but, profits figures have shown significant increase. The sale prices remained under pressure, throughout the year, due to regional disturbances and bandhs as well as fierce competitions and huge imports from Chinese firms.

We are pleased to inform that during the financial year, we have obtained drug license for the APIs & intermediaries viz. guaifenesin, methacarbomal, drotaverine and topiramate. We have complete technology for these products and already commercial production for the new APIs have been started & also procured good orders for these products. The Company has also taken necessary steps for obtaining the USFDA, CGMP and DMF Certification

The expansion plan was initiated during the year under report and construction and installation work is in full swing at the proposed unit- II at Kota. Further, Company is optimistic about starting production of API (Active Pharma Ingredients) at Unit-ll on the same line as of existing unit. Your Company would continue to keep enhancing the customer base across the nation & overseas, keeping in view the ambitious business growth plans.

DIVIDEND

In order to conserve resources to enhance production capacity your Directors do not recommend any dividend for the current financial year.

FIXED DEPOSITS

The Company has not invited or accepted any fixed deposit from the public during the year under review.

CORPORATE GOVERNANCE REPORT

The Company has complied with all the mandatory requirements of Corporate Governance specified by Securities & Exchange Board of India (SEBI) through Clause 49 of the Listing Agreement. As required by the said clause, a separate Report on Corporate Governance, forms part of the Annual Report of the Company. A certificate from M/s V M & Associates, Company Secretaries in Practice, confirming compliance of conditions of Corporate Governance is annexed with this report.

BOARD OF DIRECTORS

Retire by Rotation

In accordance with the provisions of Section 256 of the Companies Act, 1956 and the Article 89 of Articles of Association of the Company, Mr. Chandra Mohan Sharma, Directors retires by rotation at the ensuing Annual General Meeting and not seeking re-election, be not re-appointed. However, Mr. Niranjan Kumar Agarwal, Director retires by rotation and being eligible offers himself for re-appointment.

Appointment of Additional Director

Mr. S. N. Sharma was appointed as an Additional Director at the Board Meeting held on 28th July, 2010. The Board received a notice u/s 257 of the Companies Act, 1956 from a member proposing the candidature of Mr. S. N. Sharma as a Director. In view of this the Board recommends his appointment as a regular Independent Director of the Company, liable to retire by rotation.

The Details are furnished in Explanatory Statement annexed to the Notice calling AGM.

Appointment of Whole Time Director

Mr. V. V. Kameswara Rao was appointed as an Additional Director at the Board Meeting held on 28th July, 2010. Further, subject to the approval of members, he was appointed as a Whole-time Director of the Company w.e.f. the same date for a period of 5 years.

In terms of section 260 of the Companies Act, 1956, he shall hold office only upto the date of the ensuing Annual General Meeting. The Board received a notice u/s 257 of the Companies Act, 1956 from a member proposing the candidature of Mr. V. V. Kameswara Rao, as a Director. In view of this the Board recommends his appointment as a Whole-time and Independent Director of the Company, liable to retire by rotation.

The Details are furnished in Explanatory Statement annexed to the Notice calling AGM

AUDITORS

M/s Anand Jain & Co., Chartered Accountants, Jaipur and M/ s P Murali & Company, Chartered Accountants, Hyderabad, Joint Auditors of the Company retire at the forthcoming Annual General Meeting and being eligible offer themselves for re- appointment.

The Company had received letters from the Audit firms to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224(1 B) of the Companies Act, 1956 and that they are not disqualified for such reappointment within the meaning of Section 226 of the Act.

The qualifications/observations of the Auditors are self- explanatory and explained / clarified wherever necessary in appropriate notes to Accounts.

CHANGES IN SHARE CAPITAL

During the year, the following changes were effected in the Share Capital of the Company:

i. At the Annual General Meeting of the Company held on 25th July, 2009 for the year ended on 31 st March, 2009, the shareholders approved the resolution for the split of the Equity Shares of Rs. 10/- each into 10 Equity Shares of Re. 1 /- each i.e. the total Authorised Share Capital is Rs. 15,00,00,000/- (Rupees Fifteen Crores) comprising of 15,00,00,000 Equity Shares of Re. 1 /- each.

ii. The paid-up share capital of the Company was increased from Rs. 47,674,000/- to Rs. 50,674,000/- due to allotment and issue of 3,000,000 Equity Shares of Re. 1 / - each (at an exercise price of Rs. 3.1 /- per share) to the holders of convertible warrants who opted for conversion in accordance with the relevant SEBI Regulations. The holders of convertible warrants exercised the option of conversion in terms of Special Resolution approved (during the previous year) by means of Postal Ballot Notice pursuant to Section 192A (2) of the Companies Act, 1956.

ISSUE OF FOREIGN CURRENCY CONVERTIBLE BONDS

The company has not issued any Foreign Currency Convertible Bonds during the last year.

LISTING AT STOCK EXCHANGE

The Equity Shares of the company continue to be listed on Bombay Stock Exchange Limited.

PARTICULARS OF EMPLOYEES

None of the Employees of the company was in receipt of the remuneration exceeding the limits prescribed under section 217(2A) of the Companies Act, 1956 as amended, during the year under review.

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

Conservation of Energy

Energy conservation measures taken:

Energy conservation, which has a direct impact on the cost of the product, is given a high priority in all our locations. Manufacturing process parameters are continuously monitored by experienced & qualified technicians & engineers for better & efficient output leading directly & indirectly to energy efficient environment.

Additional investments and proposal, if any, being implemented for reduction of consumption of energy:

i. HT line & connections installed in place of LT.

ii. New temperature indicators installed for better monitoring.

iii. Replaced all of old pipe lines & fittings and new Insulations done.

iv. 180 KVA DG Set.

Impact of above measures for reduction of energy consumption and consequent impact on the cost of production ofgoods:

The above measures have helped the Company to improve its energy management efficiently and consequently to reduce the cost.

Form A:

Not Applicable

Technology Absorption

The manufacturing technology is indigenous. The company has in-house Research & Development facilities.

Research & Development:

Specific areas in which R&D carried out by the Company:

Development of new compounds, products like Guaifenesin, Methacarbomal, Drotaverine and Topiramate during the financial year and alternate vendors of raw materials.

Benefits derived as a result of above R&D:

Better quality products and compounds, resulting in better profits and helped in creating good clientele.

Future Plan of Action:

To keep a continuous focus on development of new compounds & products.

Expenditure on R&D:

Capital Rs 2.51 Lacs

As percentage of Sales 0.13 %

Technology absorption, adoption and innovation

The companys technology is developed in-house which has helped in improving efficiency and developing new products

Foreign Exchange Earnings and Outgo

The Foreign Exchange earnings of the company were Rs. 3,124,875/- and there was outgo of Rs. 9,778,102/- during the year under review.

Activities relating to exports/initiatives taken to increase exports/development of new export markets and export plans

During the year under review, the business focus has been on the Indian markets only. However, once the unit-ll at Kota will start production, more focused efforts will be put on marketing strategy to capture a wider market share, both domestic and overseas.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The report on Management Discussion and Analysis as required under the Listing Agreements with the Stock Exchanges is annexed with the Directors Report.

EMPLOYEE STOCK OPTION SCHEME

The Company has not issued any stock options during the year under review.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, your Directors confirmed (fiat:

1. In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed;

2. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the State of Affairs of the Company at the end of the financial year ended 31 st March 2010 and of profit of the Company for that year;

3. The Directors had 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;

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

PREFERENTIAL ALLOTMENT OF CONVERTIBLE WARRANTS

The Board of Directors of the Company, subject to the approval to be received from the shareholders and such other approvals as may be required, had decided to issue and allot to Promoters and persons other than the Promoters one crore warrants with the option to convert each warrant into one equity share of Re. 1/- each at such price ,as determined in accordance with the SEBI (ICDR) Regulations, 2009 and other relevant guidelines as may be applicable, within a period 18 months. The warrants will be converted in one or more tranches.

The proceeds will help the Company to strengthen its equity base and improve financial leveraging system.

ACKNOWLEDGMENT

Your Directors would like to express their appreciation for assistance and co-operation received from the Bankers, Government Authorities, Customers, Vendors, Advisors, Members and all concerned during the year under report. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the Company.

For and on behalf of the Board of Directors

Sd/- Vinod S Gupta

Chairman

Date: 28* July, 2010 Place: Kota