DIRECTORS REPORT

The Shareholders,

The Directors have pleasure in presenting the Twenty Eighth Annual Report together with Audited Accounts for the year-ended 31stMarch, 2018.

FINANCIALRESULTS:

( In X ) ( In X )

REVIEW OF OPERATIONS & FUTURE OULLOOK

CREATING NEW CAPACITIES: Company has commenced manufacturing of Mono Methyl Urea & Di Methyl Urea as decided in June 2016. Company has further added new products i.e. Erithromycin Derivates & MafenamicAcid with capacity of 10 m.t. &25 m.t. respectively in June 2017. Company will start production of new product i.e. Theophylline by March, 2019 Necessary steps has already taken by the management.

DIVIDEND

Your directors do not recommend any dividend for the year ended 31st March, 2018. DEPOSITS

The Company has not accepted the deposits from the public as per the Section 58Aof the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

CORPORATE SOCIAL RESPONSIBILITY

Since the Company's turnover, net profit and net worth does not exceed the limits mentioned under Section 135 of Companies Act, 2013, the provisions of Corporate Social Responsibility is not applicable to the Company.

DIRECTOR

Mrs. Damiyanti P Ghatalia, Director of the company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offer herself for re-appointment.

DIRECTORS RESPONSIBILITYSTATEMENT

As referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, the Directors hereby confirm:

i) that in preparation of the Annual Accounts for the year ended 31st March, 2018, the applicable accounting standards had been followed , along with proper explanation relating to material departures, if any; ,

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 true and fair view of the state of affairs of the company at the end of financial year ended 31st March, 2018 and the profit/(Loss) of the Company for the year under review;

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

iv) that the annual accounts for the year ended 31st March, 2018 have been prepared on a "going concern basis”

v) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

ANNUALRETURN

As per section 92(3)of the Companies Act, 2013, the extract of the Annual Return is annexed hereto as Annexure A. The extract of the Annual Return shall be prescribed and it is the part of Director Report

AUDITORS

M/s. DMKH & Company, who were appointed as Auditors to hold office until the conclusion of the 29th Annual General Meeting to be held in the calendar year 2019 are eligible for re-appointment. The Company has received the Certificate from them to this effect.

SECRETARIALAUDIT REPORT

Pursuant to Section 204 of the Companies Act, 2013, the Board of Directors had appointed M/s. Virendra Bhatt & Associates, Practicing Company Secretaries as the Secretarial Auditors of the Company for the financial year 2017-18.

Accordingly, the Secretarial Auditors have given their report, which is annexed hereto as Annexure B. The comments of the Board on the observations of the Secretarial Auditors are given after Annexure above.

The Board has re-appointed M/s. Virendra Bhatt & Associates, Practicing Company Secretaries as the Secretarial Auditors of the Company for the financial year 2018-19.

BOARD MEETINGS

The details pertaining to the composition, terms of reference, etc. of the Board of Directors of the Company and the meetings thereof held during the financial year are given in the Report on Corporate Governance section forming part of this Annual Report.

DECLARATION OF INDEPENDENCE BYINDEPENDENT DIRECTOR

The Board confirms that all Independent Directors of the Company have given a declaration to the Board that they meet the criterion of independence as prescribed under Section 149 of the Companies Act, 2013.

COMMITTEESOF THEBOARD

The details of the powers, functions, composition and meetings of the Committees of the Board held during the year are given in the Report on Corporate Governance section forming part of this Annual Report.

V AUDIT COMMITTEE

The details pertaining to the composition, terms of reference, etc. of the Audit Committee of the Board of Directors of the Company and the meetings thereof held during the financial year are given in the Report on Corporate Governance section forming part of this Annual Report. The recommendations of the Audit Committee were accepted by the Board of Directors of the Company from time to time.

CORPORATE GOVERNANCE

A separate report on Corporate Governance is produced as a part of the Annual Report along with the Auditors statement on its compliance.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGEEARNINGSANDOUTGO:

Your Company has made the necessary disclosures in this Report in terms of Section 134(3) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is given in Annexure C and forms part of this report.

EMPLOYEES:

There were no employees coming under the purview of Section 197(12) of the Act read with Rules 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and the rules frame there under.

REMUNERATION:

As per Section 197 of the Companies Act, 2013, the ratio of remuneration of each director to the median remuneration of the employees of the company for the financial year:

Name of the Director Ratio to Median employees

Mihir R. Ghatalia, Managing Director 5:3

DISCLOSURE UNDERSECTION 164

None of the Directors of the company are disqualified for being appointed as Directors as specified under section 164 of the Companies Act, 2013.

The Web Address, if any, where annual return referred to in Section 92 has been placed -(Section 134(3)(a) of the Companies Act, 2013)-www.aareydrugs.com Details in respect of frauds reported by auditors under section 143(12) other than those which are reportable to the central government- (Section 134(3)(ca) of the Companies Act, 2013)- NIL

Explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made-(i)by the auditor in his report; and (ii) by the company secretary in practice in his secretarial audit report;

-(Section 134(3)(f) of the Companies Act, 2013) - NA

Particulars of Loans, Guarantees or investments under section 186- (Section 134(3)(g) of the Companies Act, 2013)- NIL

Particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188 in the prescribed form - (Section 134(3)(h)of the Companies Act, 2013)- NIL The amounts, if any, which is propose to carry to any reserves- (Section 134(3)(j) of the Companies Act, 2013)- NIL

Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report;- (Section 134(3)(l) of the Companies Act, 2013)- NIL__

A statement indicating development and implementation of a risk management policy for the company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company- (Section 134(3)(n) of the Companies Act, 2013)- NA

the details about the policy developed and implemented by the company on corporate social responsibility initiatives taken during the year;- (Section 134(3)(o) of the Companies Act, 2013). - NA

During the year under review, the Board evaluated its performance and as well as that of its Committees and Individual Directors, including the Chairman of the Board. Separate exercise was carried out to evaluate the performance of Non- Independent Directors including the Board Chairman who were evaluated on parameters such as Key achievements, short term and long term targets, challenges faced, Implementation of Strategic decisions, organizational success, participation and attendance in Board and Committee Meetings etc. The evaluation of the Independent Directors was carried out by the entire Board and that of the Chairman and Non-Independent Directors was carried out by the Independent Directors.

Board's Policy on appointment and remuneration: The current policy is to have an appropriate mix of executive, no-executive and independent directors. As of 31st March, 2018 the Board has four Directors including one woman director.

As per Rule 8 of Companies (Accounts) Rules, 2014.

The change in the nature of business, if any; - NIL

The details of directors or key managerial personnel who were appointed or have resigned during the year;

i) Mr. Lalit RTulsiani (Whole time director) - date of resignation 15th December, 2017.

ii) Mr. Jagdish Shah (Chairman) - date of resignation 9th February, 2018.

The details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future; - NIL The details in respect of adequacy of internal financial controls with reference to the Financial Statements.- NIL

A disclosure, as to whether maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, is required by the Company and accordingly such accounts and records are made and maintained, (Inserted by The Companies (Accounts)Amendment Rules, 2018) - NA The Company has constituted an Internal Complaint Committee pursuant to the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)Act, 2013 for prevention, prohibition and redressal of complaints/grievances on the sexual harassment of women at work places. Your Directors further states that during the year under review, there were no cases filed pursuant to the above Act.

ACKNOWLEDGMENTS

Your Directors wish to place on record, the appreciation for the continued support of the customers, Bankers and Suppliers. Your Directors acknowledge and thank the employees for their valuable contribution and involvement.

For and on behalf of the Board of Directors

Mihir R. Ghatalia

Chairman and Managing Director

Place: Mumbai

Date : 30^thMay,2018