Phaarmasia Ltd

The Members,

Your Directors have pleasure in presenting the Thirty-first Annual Report of thecompany on the business and operations of the company together with the Audited Accountsfor the year ended 31st March 2012

FINANCIAL RESULTS

The Financial Results of the Company for the financial year ended 31st March 2012 issummarized below

REVIEW OF PERFORMANCE

Your Company has earned a gross revenue of Rs. 3620.09 lakhs during the year ended31.03.2012 as against Rs. 4868.81 Lakhs during the previous year ended 31.03.2011. Theprofit for the year registered at Rs.28.05 Lakhs as against Rs.12.83Lakhs (previous year).The reduction of the Turnover is due to low operation in formulations unit as there wereno orders.

DIVIDEND

Keeping the Company's expansion and growth plans in mind, your Directors have decidednot to recommend dividend for the year.

DIRECTORS

Approval of the shareholders is being sought for re-appointment of Mr. Y.N.BhaskaraRao, who retire by rotation at the ensuing Annual General Meeting of the Company and beingeligible, offers himself for reappointment in accordance the Articles of Association andCompanies Act, 1956.

Mr. Bharat B. Merchant and Mr. Bhupinder Narendra Garg were inducted as AdditionalDirectors on the Board during the year under report. As per the provisions of Section 260of the Companies Act, 1956, he holds office only upto the date of the Annual GeneralMeeting of the Company. Approval of the shareholders is being sought for theirappointments as Directors, liable to retire by rotation, at the ensuing Annual GeneralMeeting of the Company. The Company has received notices from a member under section 257of the Companies Act, 1956 along with requisite deposit proposing their appointments asDirectors of the Company.

The brief profiles of the directors who are to be appointed/re-appointed are furnishedto the explanatory statement to the notice of the ensuing Annual General Meeting asAnnexure A.

DIRECTORS' RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 217(2AA) OF THE COMPANIESACT, 1956.

In Pursuance of Section 217(2AA) of the Companies Amendment Act, 1956, your directorsconfirm

i) in the preparation of the Annual Accounts the applicable accounting standards havebeen followed along with proper explanations relating to material departures;

ii) That the directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at March 31, 2012 andof the profit of the Company for the year ended on that date;

iii) That the directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this for safeguarding theassets of the Company and for preventing and deleting fraud or other irregularities and

iv) The annual accounts have been prepared on a going-concern basis.

CORPORATE GOVERNANCE

A Report on Corporate Governance along with Certificate from Auditors of the Companyregarding compliance of the requirement of Corporate Governance, as also a ManagementDiscussion and Analysis Report pursuant to Clause 49 of the Listing Agreement with theStock Exchange is annexed hereto.

Certificate of the CEO/CFO, inter alia confirming the correctness of the financialstatement, compliance with Company's code of conduct, adequacy of the internal controlmeasures and reporting of matters to the Audit Committee in terms of Clause 49 of theListing Agreement.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management's Discussion and Analysis forms part of the Annual Report.

AUDITORS

The Board recommends re-appointment of M/s K.S. Ramakrishna & Co. CharteredAccounts, Hyderabad, as Statutory Auditors of the Company. The Board has received theiroffer in writing about their willingness for appointment as Statutory Auditors of theCompany along with Certificate under Section 224(1B) of the Companies Act, 1956.

The Board of Directors and the Committees thereof recommend their re-appointment.Appropriate resolutions form part of the Agenda of the Annual General Meeting.

M/s DZR & Co., Cost Accountants, Hyderabad have been appointed as Cost Auditors ofthe company to conduct Audit of Cost Accounts records maintained by the company forFormulations manufactured by the company for the year ended 31.03.2013.

PUBLIC DEPOSITS

The company has not accepted any deposits from Public and, as such, no amount ofprincipal or interest was outstanding as of the Balance Sheet date.

PARTICULARS OF EMPLOYEES

In terms of the provisions of section 217(2A) of the Companies Act, 1956, read with theCompanies(Particulars of Employees) Rules, 1975 and any amendments thereof, no employeesare drawing remuneration in excess of the prescribed limits.

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

Particulars with respect to Conservation of Energy as required under section 217(1)(e)of the Companies Act 1956 read with the Companies (Disclosure of Particulars in the Reportof the Board of Directors) Rules, 1988 are annexed herewith and forms part of this report.

HUMAN RESOURCES

Employees are our vital and most valuable assets. We have created a favourable workenvironment that encourages innovation and meritocracy. With vibrant work atmosphere, yourcompany provides an opportunity to employees to work with New Technologies. Your companyhas put in place a Scalable Recruitment and Human Resources Plan devised to attract andretain high caliber personnel.

Phaarmasia has been fortunate in having a set of committed employees at all levels andlooks forward to nurture them and retain their loyalty. The company recognized the valueof the committed workers and efforts are being made to enhance the bonding between thecompany and the committed employees

ACKNOWLEDGEMENTS

We thank our customers, vendors, investors and bankers for their continued supportduring the year. We place on record our appreciation of the contribution made by ouremployees at all levels.

Our consistent growth was made possible by their hard work, solidarity, cooperation andsupport.

CONSERVATION OF ENERGY / TECHNOLOGY ABSORPTION / FOREIGN EXCHANGE EARNINGS AND OUT GO:

Information under Section 217 (1) (e) of the Companies Act, 1956 read with Rule 2 ofthe Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988and forming part of the Directors' Report.

PARTICULARS U/s 217 (1) (e) OF THE COMPANIES ACT, 1956

FORM-A

(See Rule 2)

Form for Disclosure of Particulars with respect to Conservation of Energy

B. Computation of Consumption per unit of production is not practicable

TECHNOLOGY ABSORPTION & ADOPTION:

The Company is working to improve the existing technology.

Form for disclosure of particulars with respect to absorption:

FOREIGN EXCHANGE EARNINGS AND OUTGO;

Rs. In Lakhs