Directors Report of Arvind Remedies Ltd.

Mar 31, 2013

The Directors have pleasure in presenting the Twenty-fifth Annual Report together with the Audited Statement of Accounts for the year ended March 31, 2013

FINANCIAL RESULTS (Rs. in Crores)

Particulars 2012-2013 2011-12

Gross Income 704.46 456.02

Profit before tax 62.55 37.21

Profit after tax 40.61 19.40

Profit available for appropriation (after 90.91 57.54 considering the balance b/f from previous year and deferred tax liability)

APPROPRIATIONS

Dividend of current year 4.82 3.37

Corporate Dividend Tax 0.78 0.54

Transfer to General Reserve 12.60 1.94

Surplus carried to Balance Sheet 72.71 50.30

Operations and Business Performance

During the year 2012-13, the gross income increased from Rs.456 Crores to Rs 704 Crores, recording an increase of 54% over the previous year, while profit before tax has increased from Rs.37.21 Crore to Rs 62.55 Crore showing increase over 68% of last year.

DIVIDEND

Considering the profits and the need to conserve the resources, your directors recommend a dividend of Re.1 per share (8% dividend forthe year 2% as special dividend due to Silver Jubilee Year) per share of Rs.10 each on the paid-up capital of the Company. The outflow on this account would be Rs 482.30 Lakhs excluding dividend tax.

Consolidated Accounts

In accordance with the requirements of Accounting Standard prescribed by the Institute of Chartered Accountants of India, the Consolidated Accounts for the year ended 31st March 2013 under Indian GAAP forms part of the Annual Report.

Future outlook

The Betalactum Cepharm and Ayurvedic projects are under implementation and same are expected to be ready for commercial operations by end of third quarter of currentfinancial year.

During the current year, the Irrungatukottai unit is proposed to be demerged to Arvind Wellness Ltd. a wholly owned subsidiary and the company has fixed 8th April 2013 as appointed date based on the valuation of shares of the scheme and subject to necessary approvals.

In the current year, the company has plans to implement R&D product development unit at Irrungatukottai unit for ANDAs to be filed for US, which is expected to involve capital outlay of Rs. 160 Crores.

CHANGES IN CAPITAL STRUCTURE/CONSOLIDATION

During the year, the Company has issued 19896000 convertible equity warrants at face value of Rs. 10 each and premium of Rs.15 per warrant. The conversion period is upto July 2014 and on conversion of all the 19896000 warrants into equity, the paid up share capital will stand increased to Rs.68.12 Crores. In case the option to convert the warrants to equity shares is not exercised before the expiry date, the application money of Rs.6.25 received on each warrant will stand forfeited.

SUBSIDIARY COMPANY

Coronet Labs P Ltd. is a subsidiary company and pursuant to the provisions of Section 212 of the Companies Act, 1956, the details of the subsidiary and the consolidated audited accounts of the Company together with the Auditor''s Report for the year 2012-13are attached forming partoftheAnnual Report.

During the current year on 8th April 2013 Arvind Wellness Limited has been incorporated as the wholly owned subsidiary of the company.

DIRECTORS

Pursuant to the provisions of Section 256 of the Companies Act, 1956 and the Articles of Association of the Company, Dr. CMK Reddy and Mr. V R Mehta Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer for re-appointment. Board recommend their reappointment.

During the year Mr. Sudhir Chandra was appointed from 18th December 2012 and Mr. Santhana Raman from 12th February 2013 as Additional Directors and their term shall expire at the Annual General Meeting. Mr. Santhana Raman has resigned on 3rd July 2013. Reappointment of Mr. Sudhir Chandra as director is taken at item No.6 in the notice.

In accordance with the stipulation under Clause 49 of the Listing Agreement, brief resume of the Directors seeking appointment and re-appointment at the ensuing Annual General Meeting togetherwith the nature of their expertise in specific functional areas and names of companies in which they hold office as Director and/or Chairman/ Member of Committees of the Board is annexed to the notice.

AUDITORS:

Your company''s Statutory Auditors M/s. Doshi Chatterjee Bagri & Co. Chartered Accountants shall retire at the conclusion of the ensuing Annual General Meeting. The Statutory Auditors have confirmed their eligibility and willingness to accept the office on re-appointment. The necessary resolution seeking approval of members for re- appointment of Statutory Auditors has been provided in the Notice convening the Annual General Meeting.

Auditor''s Report and Notes to Accounts.

The Board has duly reviewed the Statutory Auditors Report on the Accounts. The Auditors Report is self explanatory and do not call for any further explanation/ clarification by the Board of Directors under Section 217(3) of the Companies Act, 1956.

Internal Audit

During the year under review, the Company had engaged M/s.Siva Anantharaman & Co., Chartered Accountants, Chennai as Internal Auditors. Due to their resignation from October 2012 the Company has appointed Mr. R.T. Vijaya Raghavan as the Internal Auditors of the Company to carry out internal audit on regular basis. The reports of the Internal audit for the quarters are presented for review before the Audit Committee. The Audit Committee also scrutinizes all the programmes and adequacy of the internal audits.

Management Discussion and Analysis (MDA):

The Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement is presented in a separate section forming part of this Annual Report.

CORPORATE GOVERNANCE

The Company complies with the provisions of Corporate Governance as per the listing agreement with the Stock Exchanges. Aseparate Report on Corporate Governance is attached which forms part of the Annual Report.

FIXED DEPOSITS

During the year the Company has not accepted any fixed deposits from the public.

PARTICULARS OF ENERGY CONSERVATION ETC.

The details of energy conservation, technology absorption, foreign exchange earning and outgo are furnished in a separate statement attached to and forming part of this report, in accordance with Section 217(1)(e) of the Companies Act, 1956, read with The Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

PARTICULARS OF EMPLOYEES

During the year, the Company did not have any employee drawing remuneration of amounts specified under Section 217(2A) of the Companies Act, 1956, read with The Companies (Particulars of Employees) Rules, 1975 and hence the details are not furnished.

DIRECTORS'' RESPONSIBILITY STATEMENT

Your Directors affirm that the audited accounts containing the financial statements for the financial year 2012-13 are in conformity with the requirements of the Companies Act, 1956. They believe that the financial statements reflect fairly the form and substance of transactions carried out during the year and reasonably present the Company''s financial conditions and results of operations.

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

(I) the annual accounts forthe year ended on 31st March 2013 have been prepared on a going concern basis

(ii) in preparation of the accounts, the applicable accounting standards have been followed and necessary explanations are given for material departures, if any

(iii) sound accounting policies have been applied consistently and judgements and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as on 31st March 2013 and of the Profit of the company for the year ended on that date and

(iv) proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for prevention and detection of fraud and other irregularities.

LISTING:

The Company''s shares are presently listed at Bombay Stock Exchange Ltd. and in National Stock Exchange of India Ltd.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation for the continued co-operation of the banks and other financial institutions associated with the company. Your Directors also thank Medical fraternity for the trust reposed on the Company and the trade, the stockists and consumers for their patronage to the Company''s products. Your Directors also place on record their profound admiration and sincere appreciation of the continued hard work put in by the employees at all levels. We look forward to the same support in ourfuture endeavours. For and on behalf of the Board

Place:Chennai Dr. B. ARVIND SHAH Dr. CHANDRARAVINDRAN

Date : 23.07.2013 Managing Director Whole time Director

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Mar 31, 2012

The Directors have pleasure in presenting the Twenty-Fourth Annual Report together with the Audited Statement of Accounts for the year ended March 31, 2012

FINANCIAL RESULTS (Rs. in Crores)

Particulars 2011-2012 2010-11

Gross Income 456.02 377.01

Profit before tax 37.21 22.77

Profit after tax 19.40 16.90

Profit available for appropriation (after considering the 57.54 42.36 balance b/f from previous year and deferred tax liability)

APPROPRIATIONS

Dividend of current year 3.37 3.37

Dividend of 2010-11 118.92 -

Dividend tax of 2010-11 19.29 -

Corporate Dividend Tax 0.54 0.54

Transfer to General Reserve 1.94 1.69

Surplus carried to Balance Sheet 50.30 36.76

Operations and Business Performance

During the year 2011 -12, the net sales increased from Rs.362 Crores to Rs 436 Crores, recording an increase of 21 % over the previous year, while profit before tax has increased from Rs.22.77Crore to Rs 37.21 Crore showing increase over63.%of last year.

DIVIDEND

Considering the profits and the need to conserve the resources, your directors recommend a dividend @ 7% that is 70 paise per share of Rs. 10 each on the paid-up capital of the Company. The outflow on this account would be Rs 337.61 Lakhs excluding dividend tax.

Consolidated Accounts

In accordance with the requirements of Accounting Standard prescribed by the Institutreof Chartered Accountants of India, the Consolidated Accounts for the year ended 31st March 2012 under Indian GAAP forms part of the Annual Report.

Future outlook

The Company has taken on hand implementation of Betalactum Cepharmand Ayurvedic projects by utilizing the existing vacant land at Kakkalur Thiruvellore involving cost outlay of Rs.189.74 Crores. The projects are expected to be ready for operations by end of current financial year.

Irrungatukottai unit

The Irrungatukottai unit near Sriperumbudur, Kancheepuram, Tamil Nadu, is ready for tablets capsules liquid & ointment production and the remaining sections will be ready by end of Second quarter of the current year for commencement of operations. The Company propose to get USFDA approvals for this unit so as to cater the production for exports.

CHANGES IN CAPITAL STRUCTURE/ CONSOLIDATION

During the current year, with the approval of the shareholders the equity shares of the company are consolidated by issuing a share of face value Rs.10 for every ten equity shares of face value of Rs.1 each.

During the current year, the Authorised Share Capital of the Company has been enhanced from Rs.66 Crores to Rs.70 Crores, to facilitate the issue of the convertible equity warrants to the promoters and other body corporates (public) at Rs. 10 each with a premium of Rs.15 per warrant and the pricing is in accordance with SEBI(SAST) Regulations, to raise Rs.49.74 Crores. The conversion period is 18 months and on conversion of all the 19896000 warrants into equity, the paid up share capital will stand increased to Rs.68.12 Crores.

SUBSIDIARY COMPANY

During the year, Coronet labs P Ltd, has become subsidiary of the Company. Pursuant to the provision of Section 212 of the Companies Act, 1956, the information on the Subsidiary company are given in this report.

RESEARCH & DEVELOPMENT:

Arvind Research Centre a sophisticated Research & Development Laboratory is well equipped with the latest Technologies and Machinery. The committed R&D team of Research Scientists, Doctors, Ayurvedic specialists and chemists are the primary driving force in the R&D Efforts of the Company and the focus areas are Development of Drug Delivery Systems, New Formulations and Process Development of Various Dosage forms. The major areas where R&D involved are

(1) Dosage Form/Product Development in allopathic and ayurvedic segments,

(2) Process development and validation

(3) Analytical method development and validation.

(4) Development Novel drugs delivery development

(5) Nutraceuticals and OTC products special care.

*Dosage Form/Product Development: Headed by strong team leader with Research scientists and technicians, we apply advances in pharmaceutical technology to create dosage forms that offer patients benefit. Our constant mission for developing new products and technology has to make breakthrough innovations in extensive range of research areas. Several products with a new delivery system advantage have earned us a market.

- Mouth Dissolving Tablets

- Modified Release Products

- Dry Powers and Syrups

- Soft Gelatin Capsules

- Skin Care Products

- Sun Care Products

- Sterile Formulation

- Ophthalmic Formulation

'Analytical Method Development: World-class equipments for Instrumental, Chemical and Microbiological Analysis. Extensive facilities for establishing the integrity and stability of pharmaceuticals. Expertise in method development for impurity profiling and identifying degradation products has been built up. Stability of products conformed as per ICH guidelines to meet global requirement

*NDDS (Novel Drug Delivery Systems): In the area of NDDS, Arvind remedies ltd is focused on developing novel drug delivery systems for anti-infective molecules and NSAID molecules. A few platform and product specific technologies formulations have been successfully developed.

The NDDS research at, Arvind remedies ltd focuses on maximizing the overall therapeutic and commercial value of commonly prescribed pharmaceutical formulations by enhancing their performance and reducing their adverse event profile. Such innovation also helps to improve the overall patient convenience and compliance.

Arvind remedies ltd In-house NDDS programs are primarily focused on the oral segment. Spray technology and dermal therapy programs are also being pursued through collaborations.

There is High tech research centre with focus on the core areas of Diabetology, Cardiology and Nephrology.

In ayurvedic, we have age old Herbal Medicines, Nutraceuticals and anti infective segments.

The company's in-house R&D unit is recognized by the Department of Scientific Industrial Research, Ministry of Science and Technology, Govt, of India.

*R&D Infrastructure, ARL has embarked on R&D in a significant way by establishing own R&D centre The Company has state-of-the-art multi-disciplinary centre with dedicated facilities for generics research and innovative research.

The Pharmaceutical research division covers both the antibiotic and non-antibiotic segments with specific departments for the Domestic markets and Regulatory market. New Drug Discovery is objective of our company, as well we focus on this type of research program.

Intellectual Property Management (IPM):ARL has developed its own patents/ trade marks for new products of formulations. It has the system to develop patent applications, potential new products and markets for new formulations 'Existing Development :ARL has so far developed more than 250 products which includes products in diabetic, cardiac, antibiotics, anti allergic sectors.

ARL has developed some formulation products to meet the global market requirements and mainly meeting with the safety profile, impurity profiles, dissolution profiles, F1 &F2 Calculations, as perthe different regulatory norms.

Some of NDDS formulation introduced in pellets formulation for example, Pantaprazole (delayed release) plus Domperidone immediate release and sustained release, Tanataprozole also. During the year 2011-12 ARL developed products for nutritional supplement, treatment of allergic rhinitis and asthma for kids and anti biotics

Ayurvedic

DST Projects:

A)Obesity induced Hyperlipidemia:

Efforts are made to identify and scientifically validate the traditional/ indigenous herbs for anti hyperlipidemia, the development of a novel Polyherbal formulation and for standardization of poly herbal formulation. It is a collaborative research agreement with Sri Ramachandra Medical College and Research Institute and Dept. of Science & Technology, Govt, of India.

Identification and scientific validation studies have been completed; Formulation study is under progress in the Industrial side. Animal studies for efficacy is under progress in Institution.

B)Anti Arthritis:

The poly herbal formulation for the treatment of rheumatoid arthritis, anti arthritis, anti inflammatory, analgesic, Immunomodulatory and antioxidant with collaborative research agreement with Sri Ramachandra Medical College and Research Institute and Dept. of Science & Technology, Govt, of India. Clinical trial is under progress.

C)Anti viral:

Poly herbal formulation for Human Herpes Virus 1, Human Herpes Virus2, Human Herpes Virus3 and Varicella Zoster. It is a collaborative project with Presidency College, TNVAS, IIIMand Department of Science and Technology, Govt, of India.

DIRECTORS

Pursuant to the provisions of Section 256 of the Companies Act, 1956 and the Articles of Association of the Company, Mr. K. V Narayan and Mr. R Raja Mohan Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible, offers themselves for re-appointment. Directors recommend their reappointment.

In accordance with the stipulation under clause 49 of the Listing Agreement, brief resume of the Directors seeking re- appointment at the ensuing Annual General Meeting together with the nature of their expertise in specific functional areas and names of companies in which they hold office as Director and/or Chairman/ Member of Committees of the Board is annexed to the notice.

During the year Mr. AnkurAgarwal was appointed as Executive Director (Tech) from 18th April 2012 and Dr. Raghuveer was appointed as Executive Director (Operations) from 28th April 2012 for a term of five years subject to the approval of shareholders in the Annual General Meeting and these are taken as Special Business at item no.7 & 8 in the notice.

AUDITORS:

Your company's statutory auditors M/s. Doshi Chatterjee Bagri & Co. Chartered Accountants, retire at the conclusion of the ensuing Annual General Meeting. The Statutory Auditors have confirmed their eligibility and willingness to accept the office on re-appointment. The necessary resolution seeking approval of members for re-appointment of Statutory Auditors has been provided in the Notice convening the Annual General Meeting.

Auditor's Report and Notes to Accounts.

The Board has duly reviewed the Statutory Auditors Report on the Accounts. The Auditors Report is self explanatory and do not call for any further explanation/ clarification by the Board of Directors uner Section 217(3) of the Companies Act, 1956.

Internal Audit

During the year under review, the Company has engaged the services of M/s.Siva Anantharaman& Co. Chennai, Chartered Accountants, as Internal Auditors to carry out internal audit on regular basis. The reports of the Internal audit are presented for review before the Audit Committtee The Audit Committee also scrutinizes all the programmes and adequacy of the internal audits.

Management Discussion and Analysis (MDA):

The Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement is presented in a separate section forming part of this Annual Report.

CORPORATE GOVERNANCE

The Company complies with the provisions of Corporate Governance as per the listing agreement with the Stock Exchanges. Aseparate Report on Corporate Governance is attached which forms part of the Annual Report.

FIXED DEPOSITS

During the year the Company has not accepted any fixed deposits from the public.

PARTICULARS OF ENERGY CONSERVATION ETC.

The details of energy conservation, technology absorption, foreign exchange earning and outgo are furnished in a separate statement attached to and forming part of this report, in accordance with Section 217(1)(e) of the Companies Act, 1956, read with The Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

PARTICULARS OF EMPLOYEES

During the year, the Company did not have any employee drawing remuneration of amounts specified under Section 217(2A) of the Companies Act, 1956, read with The Companies (Particulars of Employees) Rules, 1975 and hence the details are not furnished.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors affirm that the audited accounts containing the financial statements for the financial year 2011 -12 are in conformity with the requirements of the Companies Act, 1956. They believe that the financial statements reflect fairly the form and substance of transactions carried out during the year and reasonably present the Company's financial conditions and results of operations.

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

(i) the annual accounts forthe year ended on 31st March 2012 have been prepared on a going concern basis

(ii) in preparation of the accounts, the applicable accounting standards have been followed Necessary explanations are given for material departures, if any

(iii) sound accounting policies have been applied consistently and judgements and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as on 31st March 2012 and of the Profit of the company fro the year ended on that date and

(iv) proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for prevention and detection of fraud and other irregularities.

INTERNAL AUDIT AND CONTROL

The Company has a proper and adequate system of internal control. The internal auditor verifies the records and furnishes his report to the Management for onward submission to the Statutory Auditors. There is an Audit Committee consisting of non-executive Directors as members. The Audit Committee periodically reviews the internal control systems.

LISTING:

The Company's shares are presently listed at Bombay Stock Exchange Ltd. and in National Stock Exchange of India Ltd.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation for the continued co-operation of the banks and other financial institutions associated with the company. Your Directors also thank Medical fraternity for the trust reposed on the Company and the trade, the stockists and consumers for their patronage to the Company's products. Your Directors also place on record their profound admiration and sincere appreciation of the continued hard work put in by the employees at all levels. We look forward to the same support in our future endeavors.

For and on behalf of the Board

Arvind Remedies Ltd.

Dr. B. ARVIND SHAH Dr.CHANDRARAVINDRAN

Date : 30.05.2012 Managing Director Whole time Director

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Mar 31, 2011

Dear Members,

The Directors have pleasure in presenting the Twenty-Third Annual Report together with the Audited Statement of Accounts for the year ended March 31, 2011

FINANCIAL RESULTS (Rs. in Crores)

Particulars 2010-2011 2009-2010

Gross Income 368.79 303.74

Profit before tax 22.77 15.34

Profit after tax 16.90 10.64

Profit available for appropriation (after considering the balance b/f from previous year and deferred tax liability) 42.36 28.04

APPROPRIATION

Dividend 2.18 1.30

Corporate Dividend Tax 0.35 0.22

Transfer to General Reserve 1.69 1.06

Operations and Business Performance

During the year 2010-11, the sales increased from Rs.309.24 Crore to Rs.376.89 Crores, recording an increase of 22% over the previous year, while profit before tax has increased from Rs.15.34 Crore to Rs.22.77 Crore showing increase of 48% over last year.

DIVIDEND

Considering the profits and the need to conserve the resources, your directors recommend a dividend of 7 paise per share of Rs.1 each on pro rata basis on the paid-up capital of the Company. The outflow on this account would be Rs 2.18 Crores excluding dividend tax.

FUTURE OUTLOOK

The Company has updated existing Kakkalur plant in accordance with revised Schedule M specifications.

IRRUNGATUKOTTAI UNIT

The Irrungatukottai unit near Sriperumbudur, Kancheepuram, Tamil Nadu, is under implementation and is expected to be ready by this year end for commercial operations. The Company propose to get USFDA approvals for this unit so as to cater to the production for exports.

RESEARCH & DEVELOPMENTS:

Arvind Research Centre a sophisticated Research & Development Laboratory is well equipped with the latest Technologies and Machinery. The committed R&D team of 12 Research Scientists, Doctors, Ayurvedic specialists and chemists are the primary driving force in the R&D Efforts of the Company and the focus areas are Development of Drug Delivery Systems, New Formulations and Process Development of Various Dosage forms. The major areas where R&D involved are

(1) Dosage Form/Product Development in allopathic and ayurvedic segments,

(2) Process development and validation

(3) Analytical method development and validation.

(4) Development of Novel Drugs Delivery System.

(5) Nutraceuticals and OTC products special care.

*Dosage Form/Product Development: Headed by strong team leader with 15 Research scientists and technicians, we apply advancement in pharmaceutical technology to create dosage forms that offer patients benefit. Our constant mission for developing new products and technology has to make breakthrough innovations in extensive range of research areas. Several products with a new delivery system advantage have earned us a market

- Mouth Dissolving Tablets

- Modified Release Products

- Dry Powers and Syrups

- Soft Gelatin Capsules

- Skin Care Products

- Sun Care Products

- Sterile Formulation

- Ophthalmic Formulation

*ANALYTICAL METHOD DEVELOPMENT : World-class equipments for Instrumental, Chemical and Microbiological Analysis. Extensive facilities for establishing the integrity and stability of pharmaceuticals. Expertise in method development for impurity profiling and identifying degradation products has been built up. Stability of products conformed as per ICH guidelines to meet global requirement

*NDDS (Novel Drug Delivery Systems) : In the area of NDDS, Arvind remedies ltd is focused on developing novel drug delivery systems for anti-infective molecules and NSAID molecules. A few platform and product specific technologies formulations have been successfully developed. The NDDS research at, Arvind remedies ltd focuses on maximizing the overall therapeutic and commercial value of commonly prescribed pharmaceutical formulations by enhancing their performance and reducing their adverse event profile. Such innovation also helps to improve the overall patient convenience and compliance.

Arvind remedies ltd In-house NDDS programs are primarily focused on the oral segment. Spray technology and dermal therapy programs are also being pursued through collaborations.

There is High tech research center with focus on the core areas of Diabetology, Cardiology and Nephrology.

In ayurvedic, we use age old Herbal Medicines, Nutraceuticals and anti infective segments.

The company's in-house R&D unit is recognized by the Department of Scientific Industrial Research, Ministry of Science and Technology, Govt. of India.

*R&D INFRASTRUCTURE, ARL has embarked on R&D in a significant way by establishing own R&D centre The Company has state-of-the-art multi-disciplinary centre with dedicated facilities for generics research and innovative research.

The Pharmaceutical research division covers both the antibiotic and non-antibiotic segments with specific departments for the Domestic markets and Regulatory market. New Drug Discovery is objective of our company, as soon we focus on this type of research program.

*INTELLECTUAL PROPERTY MANAGEMENT (IPM):ARL has developed its own patents/ trade marks for new products of formulations. It has the system to develop patent applications, potential new products and markets for new formulations

*Existing Development :ARL has so far developed more than 250 products which includes products in diabetic, cardiac, antibiotics, anti allergic sectors.

ARL has developed some formulation products to meet the global market requirements and mainly meeting with the safety profile, impurity profiles, dissolution profiles, F1&F2 Calculations, as per the different regulatory norms.

Some of NDDS formulation introduced in pellets formulation for example, Pantaprazole (delayed release) plus Domperidone immediate release and sustained release, Tanataprozole also.

AYURVEDIC - DST PROJECTS:

A) OBESITY INDUCED HYPERLIPIDEMIA:

Efforts are made to identify and scientifically validate the traditional/ indigenous herbs for anti hyperlipidemia, the development of a novel Polyherbal formulation and for standardization of poly herbal formulation. It Is a collaborative research agreement with Sri Ramachandra Medical College and Research Institute and Dept. of Science & Technology, Govt. of India.

Identification and scientific validation studies have been completed; Formulation study is under progress in the Industrial side. Animal studies for efficacy is under progress in Institution.

B) ANTI ARTHRITIS:

The poly herbal formulation for the treatment of rheumatoid arthritis, anti arthritis, anti inflammatory, analgesic, Immunomodulatory and antioxidant with collaborative research agreement with Sri Ramachandra Medical College and Research Institute and Dept. of Science & Technology, Govt. of India. Clinical trial is under progress.

C) ANTI VIRAL:

Poly herbal formulation for Human Herpes Virus 1, Human Herpes Virus2, Human Herpes Virus3 and Varicella Zoster. It is a collaborative project with Presidency College, TNVAS, IIIM and Department of Science and Technology, Govt. of India.

FUTURE PLANS

ALLOPATHIC

The company is focused on NDDS segment to tap and fulfill the global markets with safety and efficacy. From this segment the company is looking into the feasibility to develop Topical formulation, Parenteral, Ophthalmic, Pellatization of products in different formulation and Tablets & Capsules

To initiate the soft gelatin formulation to stabilize the enzymes and Multivitamin products in nutritional segment for global and domestic markets.

To develop full-fledged separate CONTRACT RESEARCH in future.

To develop US-FDA ,MHRA,TGA,ANVISA approved Formulation in all major areas.

To develop New Drug Discovery department, as soon we focus on this type of research program.

AYURVEDA

1. Ayurvedic Plant construction is under progress.

2. Development of Range of Products is under progress, we are mainly concentrating on the chronic ailments, presently uterine tone, Aphrodisiac, Hepato-protective products Development for the present.

DIRECTORS

Pursuant to the provisions of Section 256 of the Companies Act, 1956 and the Articles of Association of the Company, Dr. C.M K Reddy, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Directors recommend his reappointment.

In accordance with the stipulation under clause 49 of the Listing Agreement, brief resume of the Director seeking re-appointment at the ensuing Annual General Meeting and names of companies in which holds office as Director and/or Chairman/ Member of Committees of the Board is given in annexure to the notice.

During the year, Mr. Prakash Shah, resigned from 5th January 2011. Mr. Akshay Shah who was appointed as Additional Director from 5th January 2011 resigned on 2nd July 2011. Board places on record deep sense of appreciation for the valuable services rendered by them during their tenure as Directors of the Company.

During the year Mr. R. Raja Mohan from 13th November 2010 and Mr.V. R Mehta from 5th January 2011 were appointed as Additional Directors pursuant to Section 260 of the Companies Act, 1956 and their term will expire at the conclusion of the ensuing Annual General Meeting. The Company has received nominations from members proposing them to be elected as Directors of the Company and pursuant to Section 257 of the Companies Act, 1956, Board recommends to pass the special resolution nos. 5 & 6 given in the Notice.

AUDITORS:

Your company's Statutory Auditors M/s. Doshi Chatterjee Bagri & Co. Chartered Accountants, retired at the conclusion of the ensuing Annual General Meeting. The Statutory Auditors have confirmed their eligibility and willingness to accept the office on re-appointment. The necessary resolution seeking approval of members for re-appointment of Statutory Auditors has been provided in the Notice convening the Annual General Meeting.

AUDITOR'S REPORT AND NOTES TO ACCOUNTS.

The Board has duly reviewed the Statutory Auditors Report on the Accounts. The Auditors Report is self explanatory and do not call for any further explanation/ clarification by the Board of Directors uner Section 217(3) of the Companies Act, 1956.

INTERNAL AUDIT

During the year under review, the Company has engaged the services of M/s.Siva Anantharamn & Co. Chartered Accountants, Chennai as Internal Auditors to carry out internal audit on regular basis. The reports of the Internal audit are [presented for review before the Audit Committtee The Audit Committee also scrutinizes all the programmes and adequacy of the internal audits.

APPOINTMENT OF CHIEF FINANCIAL OFFICER

During the year the Company has appointed Mr. S.V Sundara Raman as Chief Financial Officer who has joined on 30th December 2010.Mr. Sundara Raman is having vast experience of 32 years prior to joining the company.

MANAGEMENT DISCUSSION AND ANALYSIS (MDA):

The Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement is presented in a separate section forming part of this Report.

CORPORATE GOVERNANCE

The Company complies with the provisions of Corporate Governance as per the listing agreement with the Stock Exchanges. A separate Report on Corporate Governance is attached which forms part of the Annual Report.

FIXED DEPOSITS

During the year the Company has not accepted any fixed deposits from the public.

PARTICULARS OF ENERGY CONSERVATION ETC.

The details of energy conservation, technology absorption, foreign exchange earning and outgo are furnished in a separate statement attached to and forming part of this report, in accordance with Section 217(1)(e) of the Companies Act, 1956, read with The Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

PARTICULARS OF EMPLOYEES

During the year, the Company did not have any employee drawing remuneration of amounts specified under Section 217(2A) of the Companies Act, 1956, read with The Companies (Particulars of Employees) Rules, 1975 and hence the details are not furnished.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors affirm that the audited accounts containing the financial statements for the financial year 2010-11 are in conformity with the requirements of the Companies Act, 1956. They believe that the financial statements reflect fairly the form and substance of transactions carried out during the year and reasonably present the Company's financial conditions and results of operations.

Pursuance to Section 217(2 AA) of the Companies Act, 1956, your Directors confirm that –

(I) the annual accounts for the year ended on 31st March 2011 have been prepared on a going concern basis

(ii) in preparation of the accounts, the applicable accounting standards have been followed Necessary explanations are given for material departures, if any

(iii) sound accounting policies have been applied consistently and judgements and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as on 31st March 2011 and of the Profit of the company for the year ended on that date and

(iv) proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for prevention and detection of fraud and other irregularities.

INTERNAL AUDIT AND CONTROL

The Company has a proper and adequate system of internal control. The internal auditor verifies the records and furnishes his report to the Management for onward submission to the Statutory Auditors. There is an Audit Committee consisting of non-executive Directors as members. The Audit Committee periodically reviews the internal control systems.

LISTING:

The Company's shares are presently listed at Bombay Stock Exchange Ltd. and in National Stock Exchange of India Ltd.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation for the continued co-operation of the banks and other financial institutions associated with the company. Your Directors also thank Medical fraternity for the trust reposed on the Company and the trade, the stockists and consumers for their patronage to the Company's products. Your Directors also place on record their profound admiration and sincere appreciation of the continued hard work put in by the employees at all levels. We look forward to the same support in our future endeavours.

For and on behalf of the Board

Dr. B. ARVIND SHAH Dr. CHANDRA RAVINDRAN

Managing Director Whole time Director

Place : Chennai

Date : 23.05.2011

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Mar 31, 2010

The Directors have pleasure in presenting the Twenty-Second Annual Report together with the Audited Statement of Accounts for the year ended March 31, 2010

FINANCIAL RESULTS (Rs. in Crores)

Particulars 2009-2010 2008-2009

Gross Income 303.74 218.87

Profit before tax 15.34 7.17

Profit after tax 10.64 4.82

Profit available for appropriation (after considering the balance b/f from previous year and deferred tax liability) 28.04 19.41

APPROPRIATION

Dividend 1.30 1.30

Corporate Dividend Tax 0.22 0.22

Transfer to General Reserve 1.06 0.48

Surplus carried to Balance Sheet 25.46 17.40

Operations and Business Performance

During the year 2009-10, the sales increased from Rs.229.21Crore to Rs 309.24 Crores, recording an increase of 35% over the previous year, while profit before tax has increased from Rs.7.17 Crore to Rs 15.34 Crore.

DIVIDEND

Considering the profits and the need to conserve the resources, your directors recommend a dividend of 5 paise per share of Re.1 each on the paid-up Equity share capital of the Company. The outflow on this account would be Rs.130.02 Lakhs.

FUTURE OUTLOOK

Looking to the global and domestic scenario of pharma industry the company wanted to explore the possibilities to venture especially in the injectibles and soft gelatine sector, which will benefit in terms of more business. The Company plans to utilize the existing vacant land at Kakkalur for Ayurvedic plant and Betalactum plant.

Haridwar Project

During the year the company disposed of the Haridwar Unit and paid back the term loan and unsecured loan taken for the project, out of the proceeds of sale.

New Unit at Irrungatukottai

Your company for the new unit at Irrungatukottai, Tamil Nadu, has tied up the funds requirement and the building construction is in progress. The unit is expected to be ready by September 2011 for commercial production after which the manufacturing of injectibles and soft jel could be commenced.

RESEARCH & DEVELOPMENTS:

Arvind Research Centre a sophisticated Research & Development Laboratory is well equipped with the latest Technologies and Machinery. The committed R&D team of 10 Research Scientists, Doctors, Ayurvedic specialists and chemists are the primary driving force in the R&D Efforts of the Company and the focus areas are Development of Drug Delivery Systems, New Formulations and Process Development of Various Dosage forms. The six major areas where R&D involed are (1) formulation development in ayurvedic and (2) allopathic segments, (3) Process development and validation (4) Novel drugs delivery development (5) Nutraceuticals and (6) Analytical Development.

There is High tech research center which focuses on the core areas of Diabetology, Cardiology and Nephrology using age old Herbal Medicines, Nutraceuticals and anti infective segments. The companys in-house R&D unit is recognized by the Department of Scientific Industrial Research, Ministry of Science and Technology, Govt. of India.

R&D Infrastructure,

ARL has embarked on R&D in a significant way by establishing own R&D centre The Company has state- of-the-art multi-disciplinary centre with dedicated facilities for generics research and innovative research.

Novel Drug Delivery Systems (NDDS),

The area will be on developing novel drug delivery systems for anti-infective molecules and NSAID molecules. A few platform and product specific technologies formulations have been successfully developed.

In research, efforts will be on maximizing the overall therapeutic and commercial value of commonly prescribed pharmaceutical formulations by enhancing their performance and reducing their adverse event profile. Such innovation also helps to improve the overall patient convenience and compliance.

The focus is mainly on the development of Abbreviated New Drug Applications (ANDAs) of oral controlled- release products for the regulated markets. The Companys In-house NDDS programs are primarily focused on the oral segment. Spray technology and dermal therapy programs are also being pursued through collaborations.

Intellectual Property Management (IPM)

ARL has developed its own patents/ trade marks for new products of formulations. It has the system to develop patent applications, potential new products and markets for new formulations

Existing Developments

The Company has developed Poly Herbal Formulations. It Concentrates on chronic ailments and for treatment in anti arthritic formulation, obesity induced hyperlipidemia and anti viral for human herpes virus 1 and 2 and varicellazoste These are handled with Dept of Science and Technology, Govt. of India and Sri Ramachandra University, Chennai.

ARL has so far developed more than 200 products which includes products in diabetic, cardiac, antibiotics and anti allergic sectors. Some of the recently developed products are Montelukast and Ondensatran (mouth dissolving tablets) and Montelukast with Levocitrizine (mouth dissolving form ) for first time in India.

ARL has developed some formulation products to meet the global market requirements and meeting with the safety profile, impurity profiles, dissolution profiles, F1&F2 Calculations, as per the different regulatory norms.

Some of NDDS formulations are introduced in pellets, for example, Pantaprazole (delayed release) plus Domperidone immediate release and sustained release, Tanataprozole.

Future Plans

Ayurveda

Patent filing, Clinical trial Phase II, Safety and efficacy studies, Going for separate plant Formulate and develop nutritional supplements in herbal preperations for international markets.

Allopathy

The company is focused on NDDS segment to tap and fulfill the global markets with safety and efficacy. From this segment the company is looking into the feasibility to develop Topical formulation, Parantarals, Ophthalmic, Pellatization of products in different formulations and also Tablets & Capsules

To initiate the soft gelatin formulation to stabilize the enzymes and Multivitamin products in nutritional segment for global and domestic markets.

To develop full-fledged separate Analytical department to support the Formulation development.

To develop US-FDA approved NDA Formulation in all major areas.

DIRECTORS

Pursuant to the provisions of Section 256 of the Companies Act, 1956 and the Articles of Association of the Company, Mr. K. V Narayanan, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

During the year, Dr. Yogesh Kothari, who was appointed as Additional Director, resigned from 7th September 2009. Board places on record deep sense of appreciation for the valuable services rendered by him during his tenure as Director of the Company.

Resignation of Chief Financial Officer

During the year Mr. Kuppu Dhandapani, Chief Financial Controller resigned from the services of the Company from 18th March 2010. The Company is in look out of suitable person to fill the position.

CORPORATE GOVERNANCE

The Company complies with the provisions of Corporate Governance as per the listing agreement with the Stock Exchanges. A separate Report on Corporate Governance is attached which forms part of this Annual Report.

FIXED DEPOSITS

During the year the Company has not accepted any fixed deposits from the public.

PARTICULARS OF ENERGY CONSERVATION ETC.

The details of energy conservation, technology absorption and foreign exchange earning and outgo are furnished in a separate statement attached to and forming part of this report, in accordance with Section 217(1)(e) of the Companies Act, 1956, read with The Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

PARTICULARS OF EMPLOYEES

During the year, the Company did not have any employee drawing remuneration of amounts specified under Section 217(2A) of the Companies Act, 1956, read with The Companies (Particulars of Employees) Rules, 1975 and hence the details are not furnished.

DIRECTORS RESPONSIBILITY STATEMENT

In pursuance of Section 217(2 AA) of the Companies Act, 1956, your Directors confirm –

(i) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were 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 or loss of the Company for that period;

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

(iv) that the Directors had prepared the annual accounts on a going concern basis.

AUDITORS

The Statutory Auditors M/s Doshi, Chatterjee, Bagri & Co, Chartered Accountants shall retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the same position, if re-appointed.

INTERNAL AUDIT AND CONTROL

The Company has a proper and adequate system of internal control. The internal auditor verifies the records and furnishes his report to the Management for onward submission to the Statutory Auditors. There is an Audit Committee consisting of non-executive Directors as members. The Audit Committee periodically reviews the internal control systems.

LISTING:

The Companys shares are presently listed at Bombay Stock Exchange Ltd. and in National Stock Exchange of India Ltd.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation for the continued co-operation of the banks and financial institutions associated with the company. Your Directors also thank Medical fraternity for the trust reposed on the Company and the trade, the stockists and consumers for their patronage to the Companys products. Your Directors also place on record their profound admiration and sincere appreciation for the continued hard work put in by the employees at all levels. We look forward to the same support in our future endeavours.

For and on behalf of the Board



Place : Chennai Dr. B. ARVIND SHAH Dr. CHANDRA RAVINDRAN

Date : 31.08.2010 Managing Director Whole time Director