Directors Report of Venkat Pharma Ltd.

Mar 31, 2013

Dear Members,

The Directors have pleasure in presenting the 24lh Annual Report together with the Audited Accounts of the Company for the year ended 31st March,2013.

(Rs. in Lakhs)

FINANCIAL RESULTS

2012-13 2011-12

Profit/(Loss) before Taxes (4.42) (3.65)

Provision for Taxes

Provision for deferred Tax

Profit/(Loss) after Taxes (4.42) (3.65)

REVIEW OF OPERATIONS

The company not recorded any sales during the year ended 31s'' March, 2013. The Operations for the period ended 31s'' March, 2013 resulted for a net loss of Rs.4.42 Lakhs against a net loss of Rs. 3.65 lakhs of the previous year.

During the year also no production took place as the factory was locked by commercial tax department under R.R. Act. Management is taking steps to open the unit again.

DIVIDEND

Due to non operation of the Company your directors do not recommend any dividend for the financial year 2012-13.

FIXED DEPOSITS

The company has neither accepted nor renewed any deposits falling within the provisions of Section 58Aof the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975 from the public during the financial year.

DIRECTORS

At the ensuing Annual General Meeting of the Company Mr. M. Ranga Rao, Director is liable to retire by rotation and being eligible offer himself for re-appointment.

DIRECTORS'' RESPONSIBILTY STATEMENT

In pursuance of the provisions of section 217(2AA) of the Companies Act, 1956 and based upon observations made, the Directors hereby confirm that:

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

(ii) They have selected such Accounting Policies in consultation with the statutory auditors and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 3T'' March, 2013 and of f the profit or loss of the company for the year ended on that date;

(iii) They have taken proper and sufficient care for the maintenance of adequate Accounting Records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities:

(iv) They have prepared the Annual Accounts on a going concern basis.

AUDITORS

M/s. Mahesh, Virender & Sriram, Chartered Accountants, Hyderabad retires as Auditors of your Company at the conclusion of this Annual General Meeting and are eligible for reappointment. They have signified their willingness to accept re-appointment and have further confirmed their eligibility under Section 224 (1- B) of the Companies Act, 1956. The Board recommends their re-appointment.

AUDITORS OBSERVATIONS:

With reference to clause (ix) in the Annexure to the Auditors Report, the matters stated thereat are being carried forward from previous years and are pending with the Sales Tax Appellate Tribunal and Income Tax Appellate Tribunal.

STATUTORY COMPLIANCE CERTIFICATE:

In terms of Section 383A of the Companies Act, 1956 the Company has obtained the required Statutory Compliance Certificate from Practicing Company Secretaries for the financial year 2012-13. A copy of the same is annexed to this report.

MANAGEMENT DISCUSSION & ANALYSIS IndustryStructure ana Development

The Indian Pharmaceutical Industry today is in the front rank of India''s science based industries with wide ranging capabilities in the complex filed of drug manufacture and technology. The Asia-Pacific market also expanded rapidly over the past few years, as the development of innovative drug delivery systems has played a key role in drug formulation and in enhancing the profitability of existing patents.

Opportunities and Threats

Driven by the knowledge skills, growing enterprise, low costs, improved quality and demand (domestic and international) the pharmaceuticals sector has witnessed a tremendous growth over the past few years. However, the Company is unable to do any business as the factory is under closure.

Internal Control systems and their adequacy

The company has internal and external audit systems in place. The control system of the company consists of standard practices and processes, an appropriate audit program and a risk monitoring system.

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

A Statement giving details of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, are given in Annexure -1 to this report.

PARTICULARS OF EMPLOYEES

There were no employees drawing remuneration in excess of the limits mentioned under Sec.217(2A)of the Companies Act, 1956 read with the relevant rules made there under during the financial year 201 -13

INDUSTRIAL RELATIONS

Your Company has had an excellent track record of very cordial industrial relations right from its inception. This year too industrial relations in the Company were excellent.

CORPORATE GOVERNANCE

In terms of Clause 49 of the Listing Agreement a separate Report on Corporate Governance is enclosed as Annexure-ll to this report.

ACKNOWLEDGEMENTS

Your directors wish to place on record their gratitude for the support received from Bankers, Government Departments, suppliers, clients and look forward for their continued support and co-operation. Your directors also thank the shareholders and investors for their support and the officers and employees for their dedicated services. For and on behalf of the Board

Place : Hyderabad A.Ramkrishna

Date : 14.08.2013 Chairman