The Directors have pleasure in presenting the 25th ANNUAL REPORT together with the Audited Accounts of the company for the financial year ended 31st March, 2014.

FINANCIAL RESULTS:

PARTICULARS                         2013-2014       2012-2013

                                   ' In lakhs       ' In lakhs

Gross Income                          61.62           507.52

Total Expenditure                    104.14           568.74

Profit/Loss before Depreciation, 
Int & Taxation                       (42.52)          (61.22)

Interest                               1.38            17.09

Depreciation                           1.16            24.78

Extraordinary items                 (132.23)             -

Provision for Tax                        --              -

Net Profit/(loss) before tax        (177.30)         (103.09)

Deferred tax                         (52.45)           90.84

Net Profit / (Loss)                 (229.76)          (12.25)

Paid up Equity Share Capital         523.89           523.89

The company recorded a turnover of Rs. 61.62 lakhs and net loss of Rs. 229.76 lakhs as against turnover of Rs. 507.52 lakhs and net loss of Rs. 12.25 lakhs for the corresponding previous year. The company is trying to achieve more turnovers in spite of lack of working capital facilities.

SALE OF LAND, BUILDINGS & MACHINERY:

As you are all aware of the Postal Ballot conducted during February 2013 where inapproval was accorded by the shareholders of the company for the sale / disposal of assets of the company in order to settle the loan liabilities due to the Bank and other statutory dues, your company has during July 2013 disposed off the assets and settled the dues of Bank, arrears of dues with Sales tax and other statutory dues.

Since the plant & equipment are very old and could not be upgraded, the production was getting hampered frequently. Further to this, power cuts and shortage are added burden on the production cycle. With the result, Working capital account became NPA. Under these circumstances, the company took the approval from Shareholders through postal ballot and sold the assets, cleared the liabilities to the bank and other statutory bodies.

However the company is planning to manufacture fine chemicals in leased premises and also trade the Bulk drugs, intermediates and cosmetics to improve workings of the company.

DIVIDEND:

The company was de-registered from BIFR. Directors express their inability to recommend any dividend for the said financial year. Directors regret the same, but are hopeful that the performance of the Company would improve in the years to come.

FIXED DEPOSITS:

The Company has neither accepted not renewed any deposits falling within the provisions of section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975 from the public during the financial year.

The Company has not invited / accepted any fixed deposits during the year under review.

DIRECTORS:

Dr.A.Ramakrishnaiah, Director retires by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment.

DIRECTORS 'RESPONSIBILITY STATEMENT:

The Directors of your Company hereby report:

(i) that in preparation of Annual Account for the financial year ended 31st March, 2014, the applicable accounting standards have been followed along with the proper explanation relating to material departures, if any, there from;

(ii) that 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 a true and fair view of the state of affairs of the company at the end of the financial year ended 31st March, 2014 and of the profit and loss of the company for that period:

(iii) that the directors 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 a fraud and other irregularities :

(iv) that the directors have prepared the annual accounts on a going concern basis.

AUDITORS:

M/s. Durga Prasad Associates, Chartered Accountants, the Statutory Auditors of the company retire at the conclusion of ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. They have submitted a Certificate pursuant to the provisions of section 224(1B) of the Companies Act, 1956, that if their re-appointment be made for another term will be within the prescribed limits. Your directors recommend their appointment.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO:

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, is set out in Form - 'A' and Form - 'B' which is enclosed as Annexure - a to this report.

PARTICULARS OF EMPLOYEES:

Pursuant to Section 217 (2AA) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules 1975, as amended, no employee of your Company is in receipt of remuneration exceeding Rs.5,00,000/- per month or Rs.60,00,000/- per annum during the financial year. MANAGEMENT DISCUSSION & ANANLYSIS :

The Competition in the Pharmaceuticals industry is very high from both the organized and unorganized sectors.

Your Company has developed 14 products. The demand for the product is good but due to working capital crunch, your company unable to meet the demand.

Your company is gearing up to meet the challenges of Bulk Drug Industry. The Company is facing working Capital crunch, which may be overcome by equity participation by the Investors .

EXPLANATIONS TO AUDITORS'S QUALIFICATIONS:

The following are the explanations given by your directors in respect of the qualifications made in the Auditors' Report.

Necessary steps were taken to implement the auditor's qualifications. The balance confirmations of the debtors, creditors, loans and advances are under process.

CORPORATE GOVERNANCE:

In terms of Clause 49 of the Listing agreement, a separate Report on corporate Governance is enclosed as Annexure - B to this report.

LISTING FEE:

Your Company's shares are listed on the Bombay Stock Exchange. Your Company has paid the Listing fee to the Bombay Stock Exchange for the period 2013-14. The ISIN no. of the Company is INE 154 G 01014.

REPLIES TO AUDITORS QUALIFICATIONS :

The Company remitted Rs. 8 Laks to ESI Department to wards Disputed liability from the proceeded of sale However the department has refused to accept the amount stating that the matter of subjudiciary in nature. The other undisputed amount are being paid ACKNOWLEDGMENTS:

Your directors would like to place on record their sincere appreciation and gratitude to the Company's Customers, Bankers, shareholders for their support and co-operation. Your Directors express their heartfelt gratitude to the employees for their exceptional commitment and loyalty to the company.

                              For and on behalf of Board of Directors

Place : Hyderabad                                      N. V. NARENDER