ANU S LABORATORIES LIMITED

Annual Report 2008-2009 Customer ANU S ANU S LABORATORIES LIMITED Plan & organise Benchmark performance Deliver competencies Meet expectations

Contents 2 A Preview Provides a quick overview of the business, a high level description and key facts (including non-financial details). 6 Laid the foundation for a successful future Letter to shareholders from the Managing Director: reviews the Company's performance and strategic developments in the year, and provides prospects for the year ahead. 8 Managed growth despite market pressures Gives a comprehensive overview of our performance against the prior year including key ratios. 10 R&D - the link between our products and the customer Sets out the developmental role that research plays in the growth of the Company together with customer interface. 11 Calibrated approach to accelerate growth Outlines the management's new strategic emphasis and sets out the growth drivers for the years ahead. 12 Maintaining strict EHS parameters Incorporates the principles of environmental care into our every day business practices by developing a culture of compliance. 14 An empowered team of achievers Summarises the high energy people power in the Company. 15 Risk Management Lists some of the risks that the Company faces, and steps to mitigate them. 17 19 24 26 Notice of the Annual General Meeting. Directors' Report Management Discussion and Analysis Report on Corporate Governance 35 38 39 40 Auditors' Report Balance Sheet as at March 31, 2009 Profit and Loss Account for the year ended March 31, 2009 Cash Flow Statement for the year ended March 31, 2009 41 54 55 Schedules to the financial statements Board of Directors Admission slip for the Annual General Meeting

ANU S Everything you wanted to know about Anu Labs Ask our customers: they would tell you. In the following pages, we will also tell you. Anu Labs develops and manufactures intermediates for the pharmaceutical industry for the benefit of customers, to do so in partnership, to do so with profit. Our objective is to maximize added value for our customers with their businesses, and our people with their careers. Meet Benchmark Plan & Customer expectations Deliver competencies performance organise Customers have always been central to our business. We plan, address their needs, tailor products and services for them, and ensure we are a dependable resource. We identify with them, align with them and stay focused on them. We benchmark and perform to deliver competencies. We know, they count on us. We shall continue to help our customers succeed. 1

Anu s Laboratories Limited Anu Labs - a preview PARENTAGE Anu Laboratories was promoted in 1996 by a select group of highly committed professionals with industry experience of over three decades. The Board consists of pharmaceutical industry experts, Chartered Accountants, medical professional and an agriculturist. The combined experience of the Board Members in the pharmaceutical industry and medical profession exceeds more 100 man years. PRESENCE The Company went into commercial production in 1998 and soon emerged as a key supplier of intermediates for the domestic and international API manufacturing customers. Products are manufactured to cater to the specific needs of the pharmaceutical industry, their manufacturing needs and assist them to sell to their customers. The products are supported by service - customers get what they want, when they want. Anu Labs has become the market leader in the country with over 75% share in its major product lines. PHILOSOPHY Vision Be a high quality producer and service provider in the pharmaceutical industry for developing and manufacturing new molecules, intermediates and active pharmaceutical ingredients combining the power of intellect and understanding of science to meet the needs of customers and other stakeholders. Mission Anticipate the needs of customers and develop and manufacture quality drug intermediates and pharmaceutical ingredients and be the first choice supplier to international customers. 2

ANU S PRODUCTS Anu Labs has the skill and competence to identify potential products of drug manufacturers and be a market leader in its chosen segments. The Company has a dedicated research and development center that works on new product launches, strives to improve the processes of the existing products as well as backward integration into fine chemicals. The large basket of products include wide range of intermediates, advanced intermediates and fine chemicals that cater to the manufacturers of active pharmaceutical ingredients. The product range addresses therapeutic segments of fluoro choloro quinolone class of antibiotics, hypertensives, intermittent claudication (blood circulation), antihistamines (treatment of allergies), antidepressants, etc. PARTNERS IN PROGRESS Customers first. Anu works with them. For them. Some of the best names in the domestic pharmaceutical industry have preferred to transact with Anu Labs: they include Dr. Reddy's Laboratories, Hiran Orgochem, Sun Pharmaceuticals, Sreepathi Pharmaceuticals, Matrix Laboratories, Neuland Laboratories, Hetero Laboratories, Aurobindo Pharma, Divis Laboratories, Jubilant Organosys, Orchid Chemicals, Rallis India, Aarti Drugs, Hikal, and others. The major international clients include Teva, Mitsui & Co., ABIC, Polpharma, Sanofi Aventis, Tradecom Services, Tanabe and Chemagis. PIPELINE Over the years, close working association with all the customers has created a partnership approach which prompts the Company to commercialise what the pharmaceutical industry needs. The technology development capabilities for different product launches are tailored to the emerging needs of large customers. Anu Labs takes care to launch products that have growing demand and have long-term sustainability. 3

Anu s Laboratories Limited PRODUCTION FACILITIES The manufacturing facility at Shadnagar, about an hour's drive from Hyderabad International Airport, holds ISO 9001:2000 Certificate of Assessment with a scope of design development, manufacture and supply of organic and inorganic intermediates. Anu Labs has supplemented its own manufacturing capacity by a contract with another manufacturer for carrying out conversion jobs, on long term basis. Demand for the Company's products is growing and customers have shown considerable interest in the newer products being launched. At an estimated cost of Rs.550.9 million, the Company is setting up a new facility at Jawaharlal Nehru Pharma City at Visakhapatnam to manufacture a wide range of intermediates - basic and advanced ones - and active ingredients. PROPOSED PROJECT The in-house knowledge, skills, experience and wealth of human talent is being leveraged to widen the scope of the business and foray into Contract Research and Manufacturing (CRAM) and partner with some of the best names in the pharmaceutical industry. A pilot plant is also being set up at a cost of Rs.83.4 million at the Pharma City to further strengthen product research and development. PERFORMANCE 2008-09 The top three products of the Company constitute 75% of the annual revenues. The Company sold 17,383 MT of bulk drugs and intermediates. The Company has shown robust growth with revenues growing from Rs.281 million in FY04 to Rs.1761.16 million in FY09, a compounded annual growth rate of 44.3% in 5 years. Profit after Tax in the same period climbed to Rs.163.19 million from Rs.0.46 million, demonstrating a growth of 224% per annum. 4

ANU S PUBLICLY HELD The Initial Public Offering in May 2008 has widened the family of shareholders. Public share holding is 49% of the equity and the scrip is traded in large volume on the Bombay Stock Exchange. The Equity Shares of the Company with a face value of Rs.10 were split into 10 shares of Re.1 each. The Company issued bonus shares in July 2009 in the ratio of one new share for every share held. If you subscribed to the IPO and were allotted 100 shares of Rs.10 each, you would now hold 2000 shares of Re.1 each. PERSPECTIVE PLAN Leadership in chosen product lines and be recognized as the best in the business. Rising volume of business and cost competitive leadership in most products of the Company. 30% rise in revenues year-on-year with profitability. Earnings per Share to increase by 25% year-on-year. PEOPLE Anu Labs has talented PROMISE The Company is structured to be a professionals who are enthusiastic long-term player with sustainable in delivering results. business and deliver on the The Company is committed to recruiting high caliber employees expectations of stakeholders and the demands of the market place. and providing them with the work The team often strives to exceed environment they need to perform expectations. to their potential. Be recognized as a pharmaceutical Employees at every level are company in the business of selling encouraged to align the work competencies. practices to the needs of the business and our customers. 5

Anu s Laboratories Limited It is remarkable that we maintained growth when the economic environment contracted. Our progress is a testimony to our belief that if you are soundly organized, growth opportunities can be converted even in difficult circumstances. From the Desk of the Managing Director Laid the foundation for a successful future Dear friends, We had a satisfactory year in 2008-09 with steady progress in our business with rising revenues. We managed to hold our margins, although the net profit was shaded due to the nonrecurring deferred revenue expenditure incurred for the IPO. We also reached a significant milestone when we made a successful IPO and welcomed a large number of shareholders into the Anu Labs family. It is remarkable that we maintained growth when the economic environment contracted. Our progress is a testimony to our belief that if you are soundly organized, growth opportunities can be converted even in difficult circumstances. Anu Labs has built a business that is capable of weathering economic cycles. Our disciplined approach to operations and our customer focus, make it possible to continue delivering steady earnings growth. We have a simple approach to our business. We deliver what our customers want. Our mission is to have customers in the competitive pharmaceutical industry choose us first and always for our product lines. And, they have been. We shall retain this advantage. We recognize that our customers have a highly complex and challenging market. Our job is to make it simple for them. We analyse their requirements, supply the products and support them with necessary service interface and help them find solutions. At Anu, we utilize our competence cost efficiently in enhancing their competitiveness. Whatever be the environment, past success will create higher expectations and despite the many challenges ahead of us, we shall strive to achieve a marked increase in revenues, operating profit, net income and improved cash flow. Seen on a broad canvas, we will continue 6

ANU S Profitability Revenue Growth of 30% year-on-year Ensure cost competitiveness Earnings to rise by 25% year-on-year Growth Introduce new products and services Cater to newer markets Rise in volume on existing products Stability Leadership in product lines Be a partner to all customers Anu Lab s Business Strategy Improve cashflow Enhance shareholder value to exceed customer expectations, while meeting our own demanding goals. To achieve our corporate goals, we shall rely on key value drivers such as focusing on effective management, developing potential winners, aligning with the customers, strengthening future competitiveness, maximizing value, benchmarking the internal and external processes, accelerating profitability and managing risk. We have worked on all of them and have strived to be systematic and prudent in our approach. We have in fact laid the foundation for a successful future of the Company by investing in growth segments and by optimizing on our internal processes and systems. All these would serve to create sustainable value for the benefit of our customers, employees and investors. Yet, we believe we would satisfy expectations with the increasing product offers, by retrofitting with our backward integration program, commissioning of the large manufacturing capacity at Vizag and our foray into active ingredients. Anu Labs would not only leverage on the relationships built with the customers, but shall explore new markets to launch the value added products and services. We have powerful headlights which are providing clearer visibility in business and earnings. Indeed, we at Anu Labs have a 3600 view of our industry and our business, and we know what we want to do, and where we want to go. We are a conservative team with aggressive plans and will take calibrated strides in the short and medium term to achieve greater advances. We have entered the financial year 2009-10 confident in our team, our plans, our targets, our customers, our vendors and our combined ability to deliver another year of earnings growth. The progress is reassuring. Anu Labs is fortunate to have a combination of supportive customers and vendors and energetic staff and employees. I am grateful to all of them and deem it a privilege to be part of this large Anu Labs family and together, we look forward to another year of sustained growth. Warm regards K. Hari Babu 7

Anu s Laboratories Limited Our focus on operational excellence during the year under review enabled the Company to remain financially strong. We at Anu Labs built a foundation for continued success with a disciplined approach and are on-course to emerge as a recognized leader in intermediates and be known for our customer-centric solutions. Review of operations Managed growth despite market pressures Global economic slowdown affected the pharmaceutical industry though less than other sectors, both in India and overseas. The growth across the industry was lower than other years, with impact on order book, volumes, revenues, margins, cash flow, receivables and inventory. Anu Labs managed to contain the impact with better coordination with customers, cost control and better management of working capital. In terms of revenue, Anu Labs continued to maintain growth despite the economic slowdown in 2008-09 and the revenues rose to Rs.1761.16 million, an increase of 5.24% compared to the previous year. However, the net profit fell by 9.2% to 163.19 million primarily due to amortisation of miscellaneous expenditure incurred for IPO. The profit margins were maintained, with pressures of the first half being neutralized by the savings made in the latter part of the year. As said, earlier, the non-recurring expenditure shaded the bottom line. While these figures displayed resilience in the face of difficult economic conditions, there were two other indicators that showed deceleration. Exports during the year were lower by 30.09% at Rs.178.99 million and volume sold at 17,383 MT was 8.4% lower when compared to the previous year. The lower off-take by several of our customers is a reflection of their liquidating their inventories in a bid to manage the difficult market conditions. The impact of high crude prices affected costs of several of our key raw materials including solvents in the early part of the year, while the gains from crash in 8

ANU S the crude oil market smoothened the cost curve. Anu Labs preferred to pass on the benefits to its customers by lowering the selling prices, while the customers were accommodative in bearing the pressures of the initial period. Our focus on operational excellence during the year under review enabled the Company to remain financially strong. We at Anu Labs built a foundation for continued success with a disciplined approach and are on-course to emerge as a recognized leader in intermediates and be known for our customer-centric solutions. The Company revisited its processes and implemented its backward integration program with fine chemicals and is working on its building blocks to widen product range and improve the manufacturing economics. More significant, the operating team was strengthened by recruiting skilled and experienced staff. Overall, the year saw growth strategies being set in motion. The greenfield manufacturing facility at Vizag is nearing completion and is expected to go into commercial production in the third quarter of the financial year 2009-10. The Initial Public Offer received encouraging response and the funds raised would add to the manufacturing and marketing muscle of the Company. The new investments made would improve business streams and revenue visibility in the foreseeable future. 9

Anu s Laboratories Limited R&D - the link between our products and the customer As an intermediates manufacturer and service provider to the pharmaceutical industry, we recognize that research and development i.e. the on-going efforts to introduce new products, improve existing products and services and enhance production processes is key to our sustainable growth. R&D initiatives at Anu Labs take into account environmental as well as technical and economic factors. One of our business challenges involves creating the proper framework including the appropriate corporate culture to promote R&D throughout the organization. Very often, our R&D projects are carried out as joint initiatives with our key customers. Our R&D center works as a link between our products and the customer; as well as the link between our manufacturing and our marketing. R&D projects at Anu Labs are market oriented and add a cutting edge to the value chain. So far, we have created basic intermediates stemming from quasipetrochemical processes; advanced building blocks, requiring multistage synthesis and often produced on an exclusive basis for a single customer; and the current plans are to work on bulk actives on a commercial scale, ready to be formulated and not requiring any additional chemical processing steps. We at Anu Labs have succeeded in converting opportunities for profitable participation, since we appreciate business imperatives of our customers. The Company's objective in the next few years is to expand and modernize its portfolio in accordance with the perceived needs, whilst maintaining the highest manufacturing standards. We recognize that time-to-market is critical to the success of our customers. We have hence put systems in place which ensure a quick and smooth introduction of new products. Our ability to introduce products, including foray into backward integration, and succeed in most of our projects in the market is a clear sign of our scientific and technological prowess. The creative potential of Anu's employees is encouraged through targeted programs for continuous process improvements. Looking ahead, Anu Labs plans to get into newer technologies to facilitate backward integration. Activities have commenced and lab level results have been positive and reassuring. The Company may enlarge and develop on the venture after testing the market for new opportunities as well as maximize value for customers. R&D efforts now on the table are also expected to impact cost of manufacture favorably. 10

ANU S Calibrated approach to accelerate growth Anu Labs believes in creating value that transcends financial indicators, requiring a fine tuning between strategic vision, processes, resources and overall organisation. We are determined to maintain a strong company through our commitment to customer, operational excellence and disciplined financial management. The Company will build on its core competence and continue to be a cost effective manufacturer that combines R&D capabilities from early stage fine chemicals to produce intermediates and active ingredients. Our business of manufacture of intermediates and active ingredients must meet the challenges of the competitive market characterized by production infrastructure, new product launches, customer approaches and pricing dynamics. We will manage the pressures of the market. The growth drivers would be, focus on backward integration to develop fine chemicals and intermediates and enhance competitiveness with innovative technologies; forthcoming commissioning of the production capacity at Vizag; entry into manufacture of active ingredients to move up the value chain; develop contract manufacturing revenue stream to favorably impact profitability; broad base products and improve product mix with focus on niche products that have high entry barriers; and, widen the product base using the new reaction specialisations being developed. Ensure reliability Control Focus Define Selling competencies Cost Measure effectiveness A calibrated approach is being taken to accelerate growth. As per current plans, the Vizag unit would go on stream in the third quarter of the financial year 2009-10. While the first invoice from the new unit is likely to be in that quarter, Vizag unit is expected to report cash profit in the first quarter of the financial year 2010-11. The forward plans target a topline growth of 30% in 2010-11 over that of 2009-10, with corresponding rise in margins. Improve Add value Analyse to customers We are well positioned to capitalize on the growth in our addressable markets. We will maintain and enhance our competitive position, optimize our product portfolio and secure a growing share of continuing increased demand for our products. 11

Anu s Laboratories Limited Maintaining strict EHS parameters Anu Labs is aware that pharmaceutical industry uses natural resources and does discharge effluents at the end of the manufacturing stream. It is inherent in the manufacture of intermediates and active ingredients and such discharges need to be treated at the production facilities to avoid polluting the air, water and soil. As a responsible corporate citizen, Anu Labs has been committed to being a positive and creative force in the protection and enhancement of the environment. This is evident through the minimization of hazardous materials and the continuous efforts to reduce consumption of natural resources throughout the production facilities. The fundamental principle of the environmental policy at Anu Labs is to minimize any negative impact to the environment while conserving natural resources. As a routine, by administrative controls, the operating managers continuously assess the processes and practices to identify areas for reduction in energy, waste and emissions. Anu Labs has been cautious from the beginning and has been recognized and rewarded by the Andhra Pradesh Pollution Control Board, the state regulatory authority, in 2000-01 with a cash incentive of Rs.0.79 million for implementing projects for recovery of by-products and for demonstrating commitment towards 'Cleaner Production.' The Company has installed equipments and systems in production process that are geared to face stricter environmental norms and cater to future needs. The Company continues to further increase its resource efficiency for environmental reasons on the tactical consideration that even minor improvement has a large economic impact, since raw materials account for between 60% and 65% of the revenue. In the process industry, technology is often coordinated to achieve a high level of material usage or even repeated use of resource. The Company reduces distillation and filter waste to control costs. Similarly recycling of water and solvents enables better usage and lower costs. The process emissions are let out into the atmosphere after the pollutants are scrubbed in well-designed scrubbers. The solvent used in the process as a medium is recovered and recycled into the process. 12

ANU S The Company has installed water treatment systems, equalization and neutralization facilities and forced evaporation system where the effluent is evaporated, condensed and reused as cooling tower make-up water and for gardening. The solids separated after evaporation is sent to a common effluent treatment plant to be further treated by a professional ETP company. Continuous efforts are made to minimize the generation of waste water and air emissions, thereby preventing the pollution at source by adopting cleaner technologies, reducing the use of natural resources and recovering and recycling wastes. Strict operational parameters are maintained to keep the plant and machinery in good working condition to prevent pollution. Worldwide most customers are keen that their vendors meet global norms. Anu Labs has upgraded its systems to leverage newer business opportunities. Good environmental protection adds to sustainability of the business. made in the design architecture of the facility, systems and processes to prevent occupational illness. For instance, the manufacturing facility has closed systems (to ensure the raw materials are in covered tanks), sound insulation to encapsulate moving parts and machinery, process controls that ensure that acid smell is near zero anywhere inside or in the vicinity of the plant, adequate ventilation and fume exhaust systems and use of lifting aids to move heavy loads. The Company has Health & Safety policy for the workmen, which includes: Compliance with safety and statutory regulations and rules, both in letter and spirit; Maintenance of safe, healthy and congenial working atmosphere by constant monitoring of the work place environment; Ensuring cleanliness and hygiene at work place; Anu Labs will take all reasonable measures to meet the following targets: Minimize generation of waste through reduction, reuse and recycling; Providing workforce with appropriate tools, including ongoing knowledge/ instructions on work procedures and safety precautions; Efficient use and conservation of energy and water through control and routine practices; Minimize, and where possible, eliminate noise and odor pollution; Minimize, substitute, and where possible, eliminate the use of hazardous chemicals in processes and operations; and, Be accountable to the neighborhood and society. Anu Labs considers it a matter of course to care for employees and comply with all national regulations for occupational safety and health. Several initiatives have been Conducting classes on safety, first aid training, fire fighting, mock drills, safety audit, and risk analysis studies etc; Encouraging every employee to believe that he has the obligation and responsibility to perform tasks ensuring complete safety. Anu Labs is keen to ensure that workers' safety is paramount. Company employees are encouraged to look after themselves and each other. The testimony to this belief is the fact that there has been no accident or incident for over 36 months in the manufacturing facility. 13

Anu s Laboratories Limited The organizations that win in these challenging times are those that have inspiring and focused vision and have a single minded approach to flawless execution. Our direction is to set ourselves apart and define ourselves in new terms. It is an energized team that is endeavoring to achieve what it has set out to perform. An empowered team of achievers The value system at Anu Labs has become the corporate culture. Employees of the Company at all levels conduct their actions guided by such values as respect for people, open communication, delegation of authority and customer satisfaction. We are in people business and employee skills add the cutting edge to the corporate performance. We communicate in an open manner, share information and operate proactively. Employees are encouraged to trust each other and each others' competencies, experience and knowledge. There is a participative culture that targets and works for the Company's objectives and success. Each employee believes that he/she is equally accountable to the customer and strives to improve the reliability quotient. They are an empowered team, and are proactive to achieve. At Anu Labs we have very ambitious, measurable and realistic objectives. We want to be the best and the largest producer in our line of intermediates and active ingredients. Employees are recognized and achievers are rewarded for their results. The professional work environment is continuously monitored to ensure that performance levels remain high. For over a decade, the Company has done well so far as can be seen from the compounded annual growth in volumes, revenues and earnings. Yet, the human assets of the Company are the only assets that do not feature in the Balance Sheet. The organizations that win in these challenging times are those that have inspiring and focused vision and have a single minded approach to flawless execution. Our direction is to set ourselves apart and define ourselves in new terms. It is an energized team that is endeavoring to achieve what it has set out to perform. 14

ANU S Risk Management For a company manufacturing pharmaceutical intermediates, avoiding risk is neither possible nor is it a defined objective. Anu handles risks by maintaining a prudent balance between operational management and value generating initiatives. Over the years, the Company has benefited from long-term customer contracts and improved awareness of the employees within the Company which have partially reduced the inherent risks. The Company is systematic in monitoring, identifying and acting on several of the known risks. Practical routines and procedures are in place for day-to-day risk management. The risks of Anu Labs can be categorized into operational risks, financial risks and external risks. The purpose of describing the risk situation is partly to represent the risk environment of the Company's operations, and partly to demonstrate the steps being taken to mitigate them. The description however does not make any claim to being complete or comprehensive. Product risk Our revenues are dependant on a few products, where three of them account for approximately 75% of the business. Mitigation: While these three products continue to add to the revenue stream, the Company has been widening the portfolio by introducing new products and new customers. This initiative will continue, since three more products are expected to be launched in 2009-10. When the Vizag unit goes live later in the year, the Company would add active ingredients to its product portfolio, as well as add larger number of intermediates. The reliance on fewer products would stand reduced. Quality risk The Company has multi-stage manufacturing process conducted at high temperatures and pressures, and any failure in them can create delivery problems. Mitigation: Adequate quality assurance checks have been instituted which ensures that product quality and delivery are protected. More important, Anu Labs is able to offer impurity levels better than pharmacopoeia norms and often better than what the customer wants. Competition risk The intermediates product line is inherently competitive, and the Company could face higher competitive threats. Mitigation: Anu Labs has selected products that have higher complexity, manufacturing hazards and therefore built-in entry barriers. For instance, manufacturing process of 2,4 Dichloro 5 Fluoro Acetophenone (DCFA) involves Friedel-Crafts reactions, which need to be done in highly controlled environment. The critical processes at the facility include handling hazardous fine chemicals, chiral resolutions, high vacuum distillations etc. While these can be sensitive for many entrants, Anu Labs takes care to manage them well. There are adequate entry barriers for the business. More important, Anu Labs has been ensuring that its product quality and customization aligns the Company with the customers. They get what they need which helps manage competitive pressures. Customer concentration risk The Company has 35% of revenues from one customer and 75% revenues from 10 customers. Loss of anyone of these can make an impact on the performance. Mitigation: The Company has been having long term relationship with its customers. While the relationships have been healthy and cordial, the Company is widening its reach and adding customers for its products to minimize the risk. This approach is an ongoing process, given the fact that Anu Labs is a preferred vendor for most of its customers. As at present, the Company has built up a sizable customer base. The Company has been having a dominant position in the domestic market, where the customers have seen their own sales growing. Anu Labs is hence expected to maintain the market leadership and will strive to retain the confidence of its customers. Indeed, customizing its products to the specific needs has enhanced the customer loyalty towards the Company. 15

Anu s Laboratories Limited Introduction of newer products would also increase the Company's customer base. The credit concentration risk that arises due to sale of goods is reduced by diversifying receivables with credit worthy customers and trading partners. Geographic risk About 90% of the business is from domestic markets, and the balance from Israel, US, France, Japan, Singapore etc. Any recession in any market, could affect the business performance and financial results. Mitigation: The Company has spread its business with 10% being outside India and with no country having an overriding position in the portfolio. Efforts are being made to expand presence in emerging markets and the investments being made in Pharma City would enable the Company to compete in the regulated markets and derisk the business. Environmental risk The manufacturing process has high temperature, high pressures and use of hazardous materials with pollution discharge. These can have unfavorable impact on the business. Mitigation: Anu Labs has taken proactive steps and has environmental protection systems that take care of the generation of the waste material on a day to day basis. Andhra Pradesh Pollution Control Board has paid cash incentive for implementing projects for recovery of byproducts and for demonstrating commitment towards 'Cleaner Production.' The existing systems in production process not only meet the present environmental norms but are also geared up to face stricter norms and cater to future needs. People risk In a growing business, there can be delays in getting talented and skilled employees. Mitigation: The Company has commenced recruitment process for its future needs of skilled employees at the new facility at Pharma City. They could also be trained, in the meantime, in the Anu Labs way of doing business. The best practices of the present manufacturing facilities could be carried forward at the new facility. Talented personnel recruited ahead of the needs at Pharma City are planned to be deployed in research and development, process improvements and development of new products. Liquidity and interest rate risk In a rising interest regime, it may be difficult to arrange funds. Mitigation: Out of the proceeds of the IPO, the Company has planned and successfully raised funds with the IPO including the working capital requirements. The operations of the Company are cash positive, and such accruals would cushion the corporate needs. Economic trends Operations may be negatively affected by sustained sluggishness in the economy, including lower selling prices Mitigation: While every business is subject to changing trends, pharmaceutical industry is reasonably protected. Products of the company are essential raw materials of the pharmaceutical industry and demographic needs sustain the necessity for these products. Demand elasticity is low for pharmaceutical products, given the need for therapeutic drugs to address the needs of patients. Policy risks The industry is subject to several regulations. Any adverse move by policy makers can adversely impact the business. Mitigation: The government has been proactive to support the pharmaceutical industry since it has not only to meet the needs of a large sub-continental population, India is strengthening its footprint in US and European markets. The global approach is towards harmonization and free trade, while the developed markets have been keen to take their manufacturing and research to offshore locations such as India. Risk, if any, appears minimal with Indian government keen to encourage Indian pharmaceutical industry. 16

ANU S Notice Notice is given that the Thirteenth Annual General Meeting of the members of ANU'S LABORATORIES LIMITED will be held on September 30, 2009 at the Nice Conference Hall, 7-1-621/2/3, above ICICI Bank Limited, Srinivasa Nagar East, between SR Nagar & Ameerpet, Hyderabad at 11:00 a.m. to transact the following business: ORDINARY BUSINESS 1. To receive, consider and adopt the audited Balance Sheet of the Company as at March 31, 2009, the Profit and Loss Account for the year ended on that date together with the Reports of the Board of Directors and Auditors thereon. 4. To re-appoint Mr. M.S.S.V. Satyanarayana, Director of the Company, who retires by rotation and being eligible, offers him for re-appointment 5. To re-appoint M/s. Karumanchi & Associates, Chartered Accountants, Hyderabad, as Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting until the conclusion of next Annual General Meeting of the Company and authorize the Board to fix their remuneration. By the Order of the Board of Directors For ANU'S LABORATORIES LIMITED 2. To declare dividend for the year ended March 31, 2009. 3. To re-appoint Mr. M. Ajaya Kumar, Director of the Company, who retires by rotation and being eligible, offers him for re-appointment. Hyderabad, June 29, 2009 K. Hari Babu Managing Director NOTES 1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF/HERSELF AND SUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY. THE INSTRUMENT APPOINTING A PROXY TO BE EFFECTIVE MUST BE DEPOSITED WITH THE COMPANY AT ITS REGISTERED OFFICE NOT LESS THAN 48 HOURS BEFORE THE COMMENCEMENT OF THE MEETING. 2. The Register of Members and Share Transfer books of the Company will remain closed on September 29, 2009 and September 30, 2009 (both days inclusive) for the purpose of Dividend & Annual General Meeting. The dividend as recommended by the Board of Directors for the year ended 31st March 2009, when declared at the Annual General Meeting will be paid within 30 (thirty) days to the Members whose names appear: i. As Beneficial Owners as per list to be furnished by the depositories in respect of the shares held in demat form; and ii. As Members on the Register of Members of the Company on September 30, 2009 after giving effect to all valid share transfers in physical form received by the Company upto end of business hours on September 28, 2009. 3. Members are requested to notify change, if any, in their address to the Registrar and Share Transfer Agent viz., Karvy Computershare Private Limited at Plot No. 17-24, Vittal Rao Nagar, Madhapur, Hyderabad - 500 081. All communications regarding shares are to be addressed to our Registrars and Share Transfer Agent at the address mentioned above. 4. Information required under Clause 49 of the Listing Agreement with Stock Exchanges in respect of Directors seeking appointment/re-appointment at the Annual General Meeting is provided in the Report on Corporate Governance forming part of this Annual Report. 5. Members/Proxies are requested to hand over the enclosed Attendance Slip duly filled in, at the venue of the Meeting. 6. Members who hold shares in dematerialised form are requested to mention their Client ID and DP ID and those who hold shares in physical form are requested to mention their Folio Number in the attendance slip for attending the Meeting. 7. In case of joint holders attending the Meeting, only such joint holder who is higher in the order of names will be entitled to vote. 8. A Member desirous of getting any information on the accounts or operations of the Company is requested to forward his/her queries to the Company addressed to the Registered Office at A-49, Madhuranagar, Vengalrao Nagar, Hyderabad - 500038, for attention of Mr. Chinmoy Patnaik, Company Secretary at least 7 days prior to the date of the Meeting. 9. In order to provide protection against fraudulent encashment of the dividend warrants, shareholders holding shares in physical form are requested to intimate the Company under the signature of the sole/first & joint holder, the following information to be incorporated on the dividend warrants: 17

Anu s Laboratories Limited i. Name of the sole/first & joint holder and the folio number. ii. Particulars of bank account: a. Name of the bank, branch and complete address of the bank; b. Account type, whether savings (SB) or current account (CA); c. Bank account number allotted by the bank. 10. Shareholders holding shares in electronic form may kindly note that their bank account details as furnished by their Depositories to the Company will be printed on the dividend warrants and the Company will not entertain any direct request from such shareholders for deletion of/change in such bank account details. Further, instructions, if any, already given by them in respect of shares held in physical form will not be automatically applicable to shares held in electronic mode. Shareholders who wish to change such bank account details are therefore requested to advise their Depository Participants about such change along with details of bank account. 11. Electronic Clearing Service (ECS) Facility With respect to payment of dividend, the Company provides the facility of ECS to the shareholders residing in the following cities - Agra,Ahmedabad, Allahabad, Amritsar, Asansol, Aurangabad, Bangalore, Baroda, Belgam, Bhilwara, Bhopal, Bhubneshwar, Bijapur, Burdwan, Calicut, Chandigarh, Chennai, Coimbatore, Dehradun, Dhanbad, Durgapur, Erode, Gorakhpur, Guwahati, Gwalior, Haldia, Hubli, Hyderabad, Indore, Jabalpur, Jaipur, Jalandhar, Jammu, Jamnagar, Jamshedpur, Jodhpur, Kakinada, Kanpur, Kochi/ Ernakulam, Kolhapur, Kolkata, Lucknow, Ludhiana, Madurai, Mangalore, Mumbai, Mysore, Nagpur, Nashik, Nellore, New Delhi, Panaji, Patna, Pondicherry, Pune, Raipur, Rajkot, Ranchi, Salem, Shimla, Shimoga, Sholapur, Siliguri, Surat,Thiru puram, Tirupati, Tirupur, Trichur, Trichy, Udaipur, Udipi, Varanasi, Vijaywada and Visakhapatnam. Shareholders holding shares in physical form, who wish to avail ECS facility, may authorise the Company with their ECS mandate in the prescribed form provided on the Company s website (www.anulabs.com) and requests for payment of dividend through ECS should be lodged with M/s. Karvy Computershare Private Limited on or before 28th September, 2009. 12. Pursuant to provisions of sub-section (5) of Section 205A the Companies Act, 1956 the dividend, which remain unclaimed for a period of 7 years will be transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government pursuant to Section 205C of the Companies Act, 1956. Information in respect of such unclaimed dividend and the last date for claiming the same are given below: Financial Date of Last date for year ended declaration of claiming unpaid Dividend Dividend 2007-08 September September 25, 2008 24, 2015 Shareholders, who have not so far encashed the dividend warrant(s) are requested to seek issue of duplicate warrant(s) by writing to the Company's Registrar and Transfer Agents, M/s. Karvy Computershare Private Limited immediately. Shareholders are requested to note that no claims lie against the Company or the said fund in respect of any amounts which were unclaimed and unpaid for a period of seven years from the date that they first became due for payment and no payment shall be made in respect of any such claims. 13. Non-Resident Indian shareholders are requested to inform M/s. Karvy Computershare Private Limited immediately: i. Change in the residential status on return to India for permanent settlement; and ii. Particulars of bank account maintained in India with complete name, branch, account type, account number and address of the bank, if not furnished earlier. 14. Corporate Members intending to send their authorized representatives are requested to furnish a duly certified copy of the Board Resolution authorizing their representatives to attend and vote at the Annual General Meeting. 15. Consequent upon the introduction of Section 109A of the Companies Act, 1956, shareholders are entitled to make nomination in respect of share held by them in physical form. Shareholders desirous of making nominations are requested to send their request in Form No. 2B in duplicate to the Company. 16. The Register of Directors' shareholdings shall be open for inspection to any Member of the Company during the period beginning 14 days before the date of Company's Annual General Meeting and ending 3 days after the date of its conclusion. The said register shall also remain open and accessible during the Annual General Meeting to any person having right to attend the Meeting. By the Order of the Board of Directors ANU'S LABORATORIES LIMITED Hyderabad K. Hari Babu June 29, 2009 Managing Director 18

ANU S ANU S Directors Report Dear Members, Your Directors have pleasure in presenting the Thirteenth Annual Report together with the audited annual accounts of the Company for the financial year ended March 31, 2009 and the Auditors Report thereon. Financial Results Rs. Million March 31, 2009 March 31, 2008 Income from operations 1761.16 1673.49 Excise Duty (164.07) (169.421) Other Income 26.35 39.89 Total Income 1623.44 1543.98 Expenditure (before interest and depreciation) 1 1272.31 1167.60 Profit before Interest and Depreciation and Tax 351.13 376.38 Interest 74.82 83.37 Profit before Depreciation and Tax 276.31 293.01 Depreciation 16.99 14.06 Profit before Tax 259.32 278.95 Provisions for Tax 96.13 98.20 Profit after Tax 163.19 179.76 Add: Balance brought forward from previous year 270.91 148.49 Amount available for appropriation 434.10 328.25 Appropriations Provision for proposed dividend 19.32 18.11 Provision for Dividend Tax 3.28 3.08 Transfer to General Reserve 32.64 36.15 Balance carried to Balance Sheet 378.86 270.91 Total 434.10 328.25 1 Net of (increase)/decrease of stock Operations Your Company achieved a turnover of Rs.1761.16 million compared to Rs.1673.49 million for the year 2007-2008 representing an increase of around 5.24%. Your Company had earned a net profit after tax of Rs.163.19 million during the year 2008-2009, as compared with the net profit after tax of Rs.179.76 million during the year 2007-2008 resulting in a decrease of 9.22% primarily due to amortisation of miscellaneous expenditure incurred for IPO. Earnings per Share for the year work out to Rs.1.35 per share as against Rs.1.49 last year. 19

Anu s Laboratories Limited Your Company has achieved an export turnover of Rs.178.99 million during the year when compared with the export turnover of Rs.256.02 million in the previous year resulting in a decrease of 30.09%. During the year under review, your Company is striving to consolidate its presence in the global markets. Efforts to widen the depth and penetration of the existing markets are being taken and new markets are being explored. Your Company proposes to transfer Rs.32.64 million to the General Reserve out of the amount available for appropriations. Initial Public Offer The Company made an Initial Public Offer in June, 2008 and the shares of the Company were listed on Bombay Stock Exchange Limited. The IPO funds are utilised for forward integration to venture into the production of active pharmaceutical ingredients in a bigger scale to capitalize on the emerging opportunities and to set up a new plant in Pharma City at Vizag which would also include a pilot plant for custom synthesis. This plant would not only enhance the capacity and production levels but would leverage the Company in all dimensions to carry on its strategic objectives.. There was slump in the global economy which has affected all the industries including Pharma. All the companies which are planning for expansion have held on to their plans for the time being, and our Company is no exception. In view of the global economic scenario, the Company has decided to go slow on the proposed project at Vizag. Research & Development The Company has incurred an expenditure of Rs.5.07 million on R&D. Dividend Your Directors are pleased to recommend a dividend of Re.0.08 per share of face value of Re.1 each on the post issue paid up equity share capital in the Company for the financial year ended March 31, 2009. The total outgo on account of dividend inclusive of dividend tax is Rs.22.60 million. Directors In terms of the provisions of Sections 255 and 256 of the Companies Act, 1956, Mr. M. Ajaya Kumar and Mr. M.S.S.V. Satyanarayana will retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. Corporate Governance Your Company is committed to maintain the highest standards of Corporate Governance. As required under Clause 49 of the Listing Agreement with the Stock Exchange, Report on Corporate Governance as well as Certificate of the Auditors on the Compliance of Corporate Governance are annexed and form part of the Annual Report. Management Discussion and Analysis A separate section titled 'Management's Discussion and Analysis Report' forms part of this Annual Report. Directors' Responsibility Statement Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to Directors' Responsibility Statement, it is hereby confirmed by the Directors: i. that in the preparation of the accounts for the financial year ended March 31, 2009, the applicable accounting standards have been followed and there were no material departures; ii. that the accounting policies have been selected and applied consistently and judgments and estimates have been made which 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 and of the profit of the Company for the year under review; 20

ANU S iii. iv. that proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provisions of Companies Act 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; That the accounts have been prepared for the financial year ended March 31, 2009 on a 'going concern' basis. Auditors The Statutory Auditors of the Company, M/s. Karumanchi & Associates, Chartered Accountants, Hyderabad retire at the conclusion of the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment. The Company has received a letter from them to the effect that their appointment if made would be within the prescribed limits under Section 224(1-B) of the Companies Act, 1956. Fixed Deposits The Company has not invited/accepted deposits from the public within the meaning of Section 58A of the Companies Act, 1956. Particulars of Employees During the year under review, the Company maintained cordial relations with the employees. The particulars of employees as required to be disclosed in accordance with the provisions of Section 217 (2A) of the Companies Act, 1956 and the Companies (Particulars of Employees) Rules, 1975 as amended is as follows: Name Designation Salary Nature of Qualification Date of Age Last Rs. Million duties and commencement Employment experience of employment Mr. K. Hari Babu Managing 3.94 Management Chartered Re-appointed as 52 Suven Director of the Company Accountant Managing Director Pharmaceuticals and 28 years effective from Limited of experience April 1, 2007 Additional Information Information as per Section 217(1)(e) read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of report for the year ended March 31, 2009 is provided in Annexure - I. Acknowledgement Your Directors wish to place on record their appreciation for the valuable support and co-operation extended by the bankers, financial institutions and State and Central Government agencies. Your Directors sincerely appreciate the contribution made by the employees of the Company and are thankful to the shareholders for their continued support. For and on behalf of the Board Hyderabad M. Ajaya Kumar June 29, 2009 Chairman 21

Anu s Laboratories Limited Annexure to the Directors Report Details as required under Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, read with clause (e) of Subsection (1) of Section 217 of the Companies Act, 1956. A. Conservation of Energy The Company is making necessary efforts for conservation of energy. FORM - A Form for disclosure of particulars with respect to conservation of energy Particulars 2008-2009 2007-2008 A. POWER AND FUEL CONSUMPTION 1. Electricity a. Purchased Units (Nos./Lakhs) 29.96 29.30 Total amount (Rs. Lakhs) 113.03 111.34 Rate/Unit (Rs.) 3.77 3.79 b. Own Generation i. Through Diesel Generator ii. Unit (Nos./Lakhs) 4.80 4.99 Unit per Litre of oil 3.68 3.68 Cost/Unit (Rs.) 10.04 9.24 Through Steam Turbine/Generators Unit (Nos.) Unit per Litre of fuel Oil/Gas Cost/Unit (Rs.) 2. Coal (C grade used for boiler) Quantity (MT) 1680.00 1087.30 Total cost (Rs. Lakhs) 39.34 25.94 Average rate (Rs.) 2336.00 2385.67 3. Furnace Oil Quantity (K. Litres) Total cost (Rs.) 4. Other/Internal Generators (Husk) Quantity (MT) 3673.64 3548.09 Total cost (Rs. Lakhs) 77.50 58.78 Average rate (Rs.) 2109.00 1656.70 B. Consumption per unit of production (Kg.) Consumption per unit of production Production Electricity (No. of Units) Furnace oil Coal (Kg.) Husk As the Company uses the same manufacturing facilities for various products, it is not practicable to give consumption per unit. 22

ANU S FORM - B Form for disclosure of particulars with respect to technology absorption, Research and Development (R&D) Research & Development 1. Specific areas in which R&D carried out Development of API, intermediates and fine chemicals by the Company 2. Benefits derived as a result of the above R&D Cost reduction and process optimization 3. Future plan of action Development of new molecules and invention of new compounds 4. Expenditure on R&D Rs.5.07 million 5. Total R&D expenditure as percentage of sales 0.29 per cent Technology absorption, adaptation and innovation 1. Efforts, in brief, made towards technology Process development of manufacture of intermediates and new chemical entity development whereby achieved cost and process efficiencies on existing products. To develop process for newer chemical products and intermediates. No technology absorption is involved. The Company has its own DSIR recognised R&D Centre which has been developing and improving processes for manufacture of intermediates. 2. Benefits derived as a result of the above efforts Processes for several new chemical entities have been e.g. product improvement, cost reduction, developed. Process optimization has been achieved substitution etc. in production, which resulted in lower cost of production. 3. In case of imported technology, (imported There is no import of technology during the 5 years reckoned from the beginning of the financial year), following information may be furnished a. Technology imported Nil b. Year of import N.A. c. Has technology been fully absorbed N.A. d. If not fully absorbed, areas where this has not taken place, reasons therefore and future plans of action N.A. C. Foreign Exchange Earnings and Outgo Mentioned in the Notes to Accounts Activities relating to export initiatives taken to increase exports, development of new export markets for production and service, and export plans Ongoing initiatives are regularly made to explore new markets and widen the reach of the products, by regular meetings with customers and participation in exhibitions. For and on behalf of the Board Hyderabad June 29, 2009 M. Ajaya Kumar Chairman 23

Anu s Laboratories Limited Management Discussion and Analysis Industry Structure and Background Indian pharmaceutical industry is on an exponential growth track with phenomenal opportunities. The scope for the midsize segment is high, given the rising demand for manufacturers and service providers with infrastructure and technical expertise. The industry is valued around USD 5.7 billion and is expected to surge to USD 9.48 billion by 2010. Presently, it is the 13th largest individual market by sales, but 4th by volume of products. It has evolved from being almost non-existent in the early 70's, to one of the fastest growing sectors of the Indian economy. Over the years, the industry is acknowledged as a quality conscious and cost effective manufacturer with efficient process chemistry capabilities. Increasingly, Indian manufacturers are being sought as associates by global leaders for their sourcing needs for products and services. This vibrancy is expected to continue for several years. The Indian domestic pharma market, which consistently grew at 9.5% CAGR in the past five years, and is estimated to be at approximately USD 5.7 billion, is poised to accelerate at 13.6% between 2006-2010 to touch a market size of USD 9.48 billion by 2010. While this growth will be significant, the global pharmaceutical market size is a staggering USD 550 billion. Domestic market share in the global market is increasing at 10% a year. Company Perspective Anu's Laboratories is engaged in the manufacture and supply of superior quality, cost effective intermediates used in the manufacture of active pharmaceutical ingredients (APIs). It also has presence in fine chemicals. The Company has established itself as one of the low cost and high quality manufacturer of a range of fine chemicals, advanced intermediates and APIs. The Company is currently one of the leading manufacturers of 2, 4-Dichloro- 5 Fluoro Acetophenone, CIS + Hydroxy Lactam, Chlorohexanone 2- one, Q Acid, Sodium Methoxide solution and powder. The specialized processes include Friedel Crafts reactions, High vacuum fractional distillation and optical resolution. The inhouse resources include the ability to carry out special reactions for meeting customer requirements. The Company is also engaged in contract manufacturing of APIs for select pharma companies and has gained reputation as a dependable supplier to some of the leading industry players, both in India and abroad. The Company has a strong in-house Research & Development team and this team has been the key to our success. The Company's R&D facility is equipped with the state-of-the-art facilities and is recognized by DSIR, Government of India. The Company's R&D team is engaged in non-infringing synthesis of APIs and intermediates, process development and custom synthesis. The Company operates with WHO-GMP guidelines as basis for quality assurance. The quality management systems of the Company are certified to ISO 9001-2000 standards. Opportunities and Threats There is an immense potential for APIs and intermediates with growing domestic market and increasing export potential. Increased focus on contract research and custom synthesis would enable the Company to cater to a wider client base. 24

ANU S Demand for intermediates, APIs and CRAMs are expected to increase with international players focusing on new drug development pipelines in different therapy segments, growing market for generics consequent to imminent expirations of large number of drug patents and higher R&D needs while reducing the spend. With its lower manufacturing costs and skilled workforce, India is in an advantageous position to respond to the emerging opportunities. Anu's Laboratories has the essential capabilities to capitalize on the trends and expects to grow at a rate faster than the industry. The industry is highly regulated and is susceptible to changes in regulatory and government policies. Adequate care is taken to conform to the regulatory norms. China is a major competitor in the intermediates and API segments. The Company has superior quality products and processes which will withstand competitive pressures, both domestic and imported. The Company believes that competition in the market has to be met squarely by developing production systems based on cost efficiency, high productivity, modern technology, quality assurance and timely deliveries. Accordingly, the Company is gearing itself to exploit the opportunities by developing innovative product process and applications. Constant efforts are being made to meet the stringent quality requirements in all markets. New markets are being explored and efforts are ongoing to widen the depth and penetration of the existing markets. Future Outlook The promoters have varied expertise ranging from financial, project management, pharma consulting, process improvement etc. whose combined inputs have given the Company the holistic edge. The Company is successful in overcoming competition with its cost competitive and quality foothold. The Company continues to be a significant player in the intermediates market. There are good prospects for increasing exports and efforts continue to be made to tap new geographies. Production capacity is being augmented by foraying into the APIs production in an aggressive way. The new plant at Pharma City, Vizag would also have a pilot plant for custom synthesis. By expanding into API production and forward integration, the Company will reduce the cost of production and impact positively margins as well as the bottom line. Efforts being made now will translate into robust growth for the Company in the future. Internal Control Systems and their adequacy The Company has proper and adequate internal control system commensurate with the size and complexity of the organization. The internal control is supplemented by an extensive programme of internal audits and review by management. The internal control is designed to ensure that the financial and other records are reliable for preparing financial statements and other data. Human Resources/Industrial Relations The Company recognizes the importance and contribution of its human resources for its growth and development and is committed to the development of its people. With utmost respect for human values, and by adopting training methods and practices, the Company has created an atmosphere that encourages integrity and has motivated the employees at all levels. Industrial relations are cordial and satisfactory. As on 31 March, 2009, the Company had 190 employees in its offices and factory. Financial performance The Company achieved a turnover of Rs.1761.16 million compared to Rs.1673.49 million for the year 2007-2008 representing an increase of around 5.24%. The Company had earned a net profit after tax of Rs.163.19 million during the year 2008-2009, when compared with a net profit after tax of Rs.179.76 million during the year 2007-2008 resulting in a decrease of 9.22%. Earnings per Share for the year work out to Rs.1.35 per share as against Rs.1.49 last year. Cautionary Statement Readers are advised to kindly note that the above discussion contains statements about risks, concerns, opportunities, etc., which are valid only at the time of making the statements. A variety of factors known/unknown expected or otherwise may influence the financial results. These statements are not expected to be updated or revised to take care of any changes in the underlying presumptions. Readers may therefore appreciate the context in which these statements are made before making use of the same. 25

Anu s Laboratories Limited Report on Corporate Governance 1. COMPANY'S PHILOSOPHY Anu's Laboratories believes that good Corporate Governance is a key driver of sustainable corporate growth and long-term value creation for its shareholders. Corporate governance at Anu's Laboratories Limited does not only mean ensuring compliance with regulatory requirements, but also being responsive to aspirations of customers, associates, shareholders and expectations of the society. Anu's Laboratories always strives for excellence in quality of goods and services with the twin objectives of enhancing customer satisfaction and shareholder value. We are committed to upgrade our systems, processes and disclosure norms to achieve high standards of corporate governance. 2. BOARD OF DIRECTORS Composition of the Board As on March 31, 2009, the Board consists of six Directors. There are two Wholetime Directors and four Non-Executive Directors, three of whom are Independent Directors. Board Attendance No. of other No. of other Name Category Meetings at the last Directorships committee Attendance AGM positions held Member Chairman Mr. M. Ajaya Kumar Chairman/ 9 Yes 3 3 2 Non-Executive Independent Director Mr. K. Hari Babu Promoter, 9 Yes 1 1 Nil Managing Director Mr. N.S. Walimbe Promoter, 8 Yes 3 1 Nil Wholetime Director Mr. M.S.S.V. Satyanarayana Promoter, and 3 Yes Nil Nil Nil Non-Executive Director Dr. K. Rajeswara Rao Non-Executive 5 Yes 1 2 Nil Independent Director Mr. O.M. Kejriwal Number of Board Meetings Non-Executive Independent Director 7 Yes Nil 2 1 Nine Board Meetings were held during the year ended March 31, 2009. These were held on May 16, 2008; May 27, 2008; June 30, 2008; July 31, 2008; September 25, 2008; October 25, 2008, December 19, 2008; January 31, 2009 and March 31, 2009. The maximum time gap between any two board meetings during the year was less than four months. Detail of shares held by the Directors as on March 31, 2009 is given below: Name Number of Shares Mr. M. Ajaya Kumar 560 Mr. K. Hari Babu 2,400,414 Mr. N.S. Walimbe 578,400 Mr. M.S.S.V. Satyanarayana 414,700 Mr. K. Rajeswara Rao Mr. O. M. Kejriwal 26

ANU S Directors' compensation and disclosures Sitting fees was paid to the Non-Executive Directors for attending the meetings of the Board or any committee thereof as per the Articles of Association of the Company. Further, reimbursement of actual travel and out-of-pocket expenses incurred for attending such meetings were also made. Other than the above, there is no other component of remuneration to Non- Executive Directors. Brief profile of the Directors being re-appointed As required by Clause 49 of the Listing Agreement on Corporate Governance particulars of the Directors being reappointed are provided hereunder; Mr. M. Ajaya Kumar, aged 62 years, has completed his Master of Science (Agriculture) from Andhra Pradesh Agriculture University in 1968. He has an experience of over 39 years out of which 24 years is in the pharmaceutical industry. He started his career with Andhra Pradesh Agriculture University in 1968 as Farm Manager - Research Associate and Assistant Professor. He worked with Allahabad Bank from 1972 to 1984 where he gained experience in the field of corporate and large scale finance, foreign exchange management and merchant banking. Since 1984, Mr. M. Ajaya Kumar has been associated with several pharmaceutical companies in various positions. He joined SOL Pharmaceutical Limited in 1984 as General Manager and in 1994 he resigned as Managing Director & CEO and worked through various functions of general management, production, finance, marketing and business development. From 1994 to 1996, he was Managing Director of Natco Pharma Limited and was looking after day to day affairs of the company. During the years 1996 to 1998, he was involved with Corporate Management Consultancy Organisation to render corporate advisory services in drugs and pharmaceutical industry and from 1998 upto 2004, he got associated with Aurobindo Pharma Limited. During his tenure in Aurobindo Pharma Limited, he was responsible for research & development, business planning, production, marketing, accounts and finance. Since 2004, he has been providing corporate management consultancy to various corporates in the pharmaceutical industry. He was recipient of 'Manager of the Year- 1994' by the Hyderabad Management Association, Hyderabad. Name of the Companies in which he is a Director Zen Securities Limited Mikkilineni Infin Private Limited Tekoptimized India (Private) Limited Director Director Director Mr. M.S.S.V Satyanarayana, aged about 48 years is a Graduate and is on the Board of the Company since 1998. He is an agriculturist. Mr. M.S.S.V Satyanarayana is not a director in any other company. Mr. M.S.S.V Satyanarayana held 414,700 shares in the Company as on March 31, 2009. Code of Conduct The Board has approved a Code of Conduct for Board members and senior management personnel of the Company. The Code of Conduct has been posted on the website of the Company. All Directors and senior management personnel have affirmed compliance with the Code of Conduct and submitted declarations in this behalf for the year ended March 31, 2009. 3. AUDIT COMMITTEE Brief description of terms of reference i. Oversight of Company's financial reporting process and disclosure of financial information. ii. Recommending the appointment and removal of external auditor, fixation of audit fee and also approval for payment for any other services. 27

Anu s Laboratories Limited iii. iv. Review of financial statements before submission to Board. Review of adequacy of internal control systems and internal audit functions. v. Review of Company's financial and risk management policies. Composition Mr. O. M. Kejriwal, Chairman Mr. M. Ajaya Kumar, Member Dr. K. Rajeswara Rao, Member Permanent Invitee - Mr. K. Hari Babu, Managing Director Meetings and attendance during the year During the financial year, Audit Committee meetings were held on June 29, 2008; July 30, 2008; October 24, 2008 and January 29, 2009. Name No. of Meetings attended Mr. O. M. Kejriwal 4 Mr. M. Ajaya Kumar 4 Dr. K. Rajeswara Rao 1 4. SHAREHOLDERS/INVESTORS GRIEVANCE COMMITTEE Composition Mr. M. Ajaya Kumar, Chairman Mr. N.S. Walimbe, Member Mr. K. Hari Babu 319 complaints were received and redressed to the satisfaction of shareholders during the year under review. There were no pending complaints at the end of the year. No request for transfer is pending as on March 31, 2009. 5. REMUNERATION COMMITTEE Brief description of terms of reference To formulate a remuneration policy and approve the remuneration or revision in the remuneration payable to the whole-time Directors. Composition Mr. M. Ajaya Kumar Dr. K. Rajeswara Rao Mr. O.M. Kejriwal During the financial year, one meeting of the Remuneration Committee was held on March 31, 2009 and Mr. M. Ajaya Kumar and Mr. O. M. Kejriwal, Directors attended the meeting. Remuneration Policy The Committee recommends and reviews the remuneration package of the Wholetime Directors. The remuneration policy is in consonance with the existing industry practice and also with the provisions of the Companies Act, 1956. 28

ANU S Details of remuneration paid during the year ended March 31, 2009 to the Directors are furnished hereunder: Rs. Million Name Salary & Perquisites Sitting Fees Total Commission Mr. M. Ajaya Kumar 0.070 0.070 Mr. K. Hari Babu 3.94 3.94 Mr. N.S. Walimbe 0.42 0.42 Dr. K. Rajeswara Rao 0.030 0.030 Mr. M.S.S.V. Satyanarayana 0.015 0.015 Mr. O.M. Kejriwal 0.06 0.06 The Company does not have any stock option plan or performance linked incentive for the Wholetime Directors. The appointments are made for a period of five years on the terms and conditions in the respective resolution passed by the Members in the general meetings, which do not provide for severance fees. 6. GENERAL BODY MEETINGS The last three Annual General Meetings of the Company were held as under: Financial Year Date Venue Time 2007-2008 September 25, 2008 Sagi Ramakrishnam Raju Community Hall, Madhura Nagar, E Block, Hyderabad 3.00 p.m. 2006-2007 September 28, 2007 A-49, Madhuranagar, Vengalarao Nagar, Hyderabad 11.00 a.m. 2005-2006 September 29, 2006 A-49, Madhuranagar, Vengalarao Nagar, Hyderabad 11.00 a.m. The Company has passed special resolution in the Annual General Meeting held on 29th September, 2006 and no such resolution was passed thereafter. No special resolution requiring a postal ballot under Section 192A of the Companies Act, 1956 was placed before the last Annual General Meeting. Similarly, no special resolution requiring a postal ballot is being proposed at the ensuing AGM. 7. DISCLOSURES a. No transaction of material has been entered into by the Company with the directors / management and their relatives etc that have potential conflict with the interest of the company. b. No penalties have been imposed and strictures passed on the Company by the stock exchange or SEBI or any statutory authority, on any matter related to capital markets, during the last three years. c. The Company does not have a Whistle Blower Policy in place but affirm that during the year 2008-09 no personnel has been denied access to the Audit Committee. d. All the mandatory requirements stipulated in the Corporate Governance Report have been complied. 8. MEANS OF COMMUNICATION Quarterly reports The Company communicates quarterly and annual results and other statutory reports by disseminating the details to Bombay Stock Exchange Limited. The Company also publishes its financial results normally in Business Standard (all India editions) and Andhra Prabha. 29

Anu s Laboratories Limited 9. GENERAL SHAREHOLDER INFORMATION Annual General Meeting Date : September 30, 2009 Time : 11:00 a.m. Venue : The Nice Conference Hall, 7-1-621/2/3, above ICICI Bank Limited, Srinivas Nagar East, Between SR Nagar & Ameerpet, Hyderabad. Financial Calendar 2008-09 (Tentative) Unaudited financial results Dates for the quarter ending June 30, 2009 July 2009 September 30, 2009 October 2009 December 31, 2009 January 2010 March 31, 2010 June 2010 (Audited) Date of Book Closure September 29 and 30 (Both days inclusive) Payment of Dividend Within 30 days from the date of declaration at the Annual General Meeting. Listing on Stock Exchange Name of the Stock Exchange Address Code Bombay Stock Exchange Limited Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001 532981 Market Price Data Monthly High and Low prices of Anu's Laboratories Limited at the Bombay Stock Exchange Limited (BSE) and performance in comparison to broad-based indices for the year ended 31st March, 2009 are furnished hereunder. The Company was listed in June 2008 and hence the details are provided since June 2008. BOMBAY STOCK EXCHANGE LIMITED Month Share Price (Rs.) SENSEX High Low High Low 2008 June 468.90 245.00 16,632.72 13,405.54 July 415.90 271.40 15,130.09 12,514.02 August 338.90 301.25 15,579.78 14,002.43 September 366.70 265.00 15,107.01 12,153.55 October 309.50 217.30 13,203.86 7,697.39 November 335.00 258.00 10,945.41 8,316.39 December 329.50 256.00 10,188.54 8,467.43 2009 January 327.70 272.05 10,469.72 8,631.60 February 295.00 231.10 9,724.87 8,619.22 March 310.00 252.00 10,127.09 8,047.17 30

ANU S Registrar & Transfer Agents Karvy Computershare Private Limited Plot No.17-24, Vittal Rao Nagar, Madhapur, Hyderabad - 500 081 Ph: + 91 40 2342 0818-828 Fax: + 91 40 2342 0814 Share transfer system The share transfers are processed and the share certificates are returned to the shareholders within 30 days, subject to the documents being complete in all respects. Distribution of shareholding as on March 31, 2009 TOTAL TOTAL Category No. of holders % Value of Shares (Rs.) % 1-5000 1,803 90.38 1,008,740 0.84 5001-10000 55 2.76 459,200 0.38 10001-20000 14 0.70 247,950 0.21 20001-30000 11 0.55 281,390 0.23 30001-40000 8 0.40 290,230 0.24 40001-50000 7 0.35 317,020 0.26 50001-100000 15 0.75 1,201,970 0.99 10000 and above 82 4.11 116,953,500 96.85 TOTAL 1,995 100.00 120,760,000 100.00 Shareholding pattern as on March 31, 2009 Category No. of Shares held Percent to Capital Promoters 6,174,640 51.13 Mutual Funds/FIs 120,693 1.00 Foreign Institutional Investors 1,200,997 9.95 Bodies Corporate 2,928,362 24.25 Indian public & others 1,651,308 13.67 TOTAL 12,076,000 100.00 Dematerialisation of shares and liquidity The Company's shares are available for dematerialisation on both the Depositories i.e., National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). 43.88 % of shares have been dematerialized as on March 31, 2009. ISIN: INE450H01022 31

Anu s Laboratories Limited Address for correspondence For share related services/transfer of physical shares/ change of address of Members: Karvy Computershare Private Limited Plot No.17-24, Vittal Rao Nagar, Madhapur, Hyderabad - 500 081 Ph: + 91 40 2342 0818-828 Fax: + 91 40 2342 0814 For queries relating to Dividends, Annual Reports etc. Mr. Chinmoy Patnaik Company Secretary, A-49, Madhura Nagar, Vengalarao Nagar, Hyderabad - 500 038 Ph: + 91 40 2374 1677 Outstanding GDRs/ADRs/Warrants or any convertible instruments, conversion date and likely impact on equity Not Applicable as the Company has not issued any of the above instruments. Plant Locations Chilakamarri Village Survey No.17, Plot No 12, Shadnagar Jawaharlal Nehru Pharmacity (J.N.P.C), Mahaboobnagar District Paravada Mandal, Andhra Pradesh Vishakhapatnam - 530 021 (Under Construction) Registered Office A-49, Madhuranagar, Vengalarao Nagar, Hyderabad - 500 038 Ph: + 91 40 2374 1677 Fax: + 91 40 2374 1678 Email ID for investor grievances: ir@anulabs.com Compliance Certificate of the Auditors Certificate from the Statutory Auditors of the Company, M/s. Karumanchi & Associates, Chartered Accountants confirming compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed. The above report was approved by the Board of Directors at their meeting held on June 29, 2009. 32

Auditors Certificate on compliance of Corporate Governance ANU S The Members, Anu's Laboratories Limited, Hyderabad. We have examined the compliance of conditions of Corporate Governance by ANU'S LABORATORIES LIMITED, for the year ended March 31, 2009 as stipulated in Clause 49 of the listing agreement of the Company with Stock Exchanges in India. The compliance of the conditions of Corporate Governance is the responsibility of the management. Our examination was limited to the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of an opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, the Company has complied with the conditions of Corporate Governance as stipulated in the above listing agreement. We state that in respect of investor grievances received during the year ended March 31, 2009 as per the records maintained by the Company and presented to the Investors/Shareholders Grievance Committee. We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company. For Karumanchi & Associates Chartered Accountants Hyderabad, June 29, 2009 K. Peddabbai Partner Certificate of Compliance with the Code of Conduct I hereby declare that all the board members and senior management personnel have affirmed compliance with the code of conduct adopted by the Company and have submitted declarations in this behalf for the year ended March 31, 2009. Hyderabad, June 29, 2009 K. Hari Babu Managing Director CEO/CFO Certification As required by sub clause V of Clause 49 of the Listing Agreement with the Stock Exchange, we have certified to the Board that for the financial year ended March 31, 2009 the Company has complied with the requirements of the said sub-clause. Hyderabad, M. Madhusudhan Rao K. Hari Babu June 29, 2009 Chief Financial Officer Managing Director 33

Anu s Laboratories Limited Chief Executive Officer (CEO) and Chief Financial Officer (CFO) Certification We, K. Hari Babu, Managing Director and M. Madhusudhan Rao, Chief Financial Officer of Anu's Laboratories Limited, to the best of our knowledge and belief, certify that: 1. We have reviewed the Balance Sheet and Profit and Loss Account and all its schedules and notes on accounts as well as the Cash Flow Statements for the year ended March 31, 2009. 2. To the best of our knowledge and belief, i. these statements do not contain any untrue statement or omit any material fact or contain statements that might be misleading; ii. the financial statements and other financial information included in this report present a true and fair view of the Company's affairs and are in compliance with existing accounting standards and applicable laws and regulations. 3. To the best of our knowledge and belief, there are no transactions entered into by the Company during the year which are fraudulent, illegal or violative of the Company's Code of Conduct. control systems of the Company pertaining to financial reporting and have disclosed to the Auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and steps taken or proposed to be taken for rectifying these deficiencies. 5. We have indicated to the Company's auditors and the Audit Committee of the Company's board of directors that during the year: i. there are no significant changes in internal control over financial reporting; ii. iii. there are no significant changes in accounting policies, and, there are no frauds, whether or not material that involves management or other employees who have significant role in the Company's internal control system over financial reporting. K. Hari Babu Managing Director 4. We accept responsibility for establishing and maintaining internal controls for financial reporting. We have evaluated the effectiveness of internal Hyderabad, June 29, 2009 M. Madhusudhan Rao Chief Financial Officer 34

ANU S Auditors Report We have audited the attached Balance Sheet of ANU'S LABORATORIES LIMITED as at March 31, 2009, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain responsible assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 1. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable. 2. Further to our comments in the Annexure referred to above, we report that: a. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; b. In our opinion, proper books of account as required by law have been kept by the Company, so far as appears from our examination of those books; c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account; e. On the basis of written representations received from the directors/companies, as on March 31, 2009, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; f. Attention is invited to Note 7 of Schedule N of the accounts relating to the liability of interest and required disclosures under the Micro, Small and Medium Enterprises Development Act, 2006. The Company is in the process of compiling information regarding measurement and disclosures prescribed under the Act. In view of the above, we are unable to comment on the impact of the same on the accounts; g. In our opinion and to the best of our information and according to the explanation given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i. In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2009; ii. iii. In the case of the Profit and Loss Account, of the profit for the year ended on that date; and In the case of the Cash Flow Statement, of the cash flows for the year ended on that date. For Karumanchi & Associates Chartered Accountants d. In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable; Hyderabad, June 29, 2009 K. Peddabbai Partner 35

Anu s Laboratories Limited Annexure to Auditors Report i. a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. b. The fixed assets have been physically verified by the management in accordance with regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and nature of its assets. The discrepancies noticed on such verification were not material and have been properly dealt with in the books of account. c. Fixed assets disposed off during the year were not substantial. According to the information and explanations given to us, we are of the opinion that the disposal of fixed assets has not affected the going concern status of the Company. ii. a. The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable. iii. iv. b. The procedure of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. c. In our opinion and according to the information and explanation given to us, the Company is maintaining proper records of inventory. The discrepancies noticed on verification between physical stocks and the book records were not material ad have been properly dealt with in the books of account. The Company has not granted or taken loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, sub-clause (b), (c), (d), (f) & (g) are not applicable. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchases of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. v. a. As per information and explanation and on basis of records maintained by the Company we are of the opinion that particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that Section. vi. vii. b. In our opinion and according to the information and explanation given to us, the transactions made in pursuance of contracts or arrangements entered in the registers maintained under Section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time. In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public during the year. Therefore, the provisions of Clause 4(vii) of the Order are not applicable to the Company. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. viii. We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209 (1)(d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. ix. a. According to the records of the Company, Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it have generally been regularly deposited during the year with the appropriate authorities though there has been a small delay in a few cases. According to the information and explanation given to us, no undisputed amounts payable in respect of above were in arrears, as at March 31, 2009 for a period of more than six months from the date on which they became payable. 36

ANU S b. According to the information and explanations given to us, the details of dues of sales tax, income tax which have not been deposited on account of any dispute are given below: Nature of Nature of Amount Period to which Forum where due the statute Rs. Lakhs amount relates dispute is pending Income Tax Income Tax Act, 1961 2.74 A.Y. 2006-06 Commissioner Appeals Sales Tax Sales Tax Act 6.77 F.Y. 2003-04 ADC (CT) Sales Tax Sales Tax Act 18.27 F.Y. 2004-05 ADC (CT) Sales Tax Sales Tax Act 22.10 F.Y. 2005-06 ADC (CT) x. The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year. xi. xii. In our opinion and according to the information and explanation given to us, the Company has not defaulted in repayment of dues to a financial institution or bank. Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. xiii. In our opinion the Company is not a chit fund or a nidhi/ mutual benefit fund/society. Therefore the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company. xiv. In our opinion the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company. xv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions. xvii. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long term investment. xviii.the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956. xix. In respect of the end-use of money raised by public issue as disclosed in the schedules to the financial statements, in our opinion and based on the explanations given to us and certified by the management, the Company has utilized an amount of Rs.4,888.21 lakhs for purposes as stated/specified in the offer document for the issue. The unutilized money of Rs.3133.79 lakhs have been in usage for working capital. xx. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit. For Karumanchi & Associates Chartered Accountants xvi. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which they were raised. Hyderabad, June 29, 2009 K. Peddabbai Partner 37

Anu s Laboratories Limited Particulars Balance Sheet as at March 31, 2009 Rs. Million Schedule As at As at No. March 31, 2009 March 31, 2008 SOURCES OF FUNDS Shareholders' Funds Share Capital 1 120.76 82.56 Reserves & Surplus 2 1,338.30 433.71 Loan Funds Secured Loans 3 395.10 395.55 Unsecured Loans 4 11.35 11.35 Deferred Tax Liability 42.84 35.03 APPLICATION OF FUNDS Fixed Assets 1,908.35 958.20 Gross Block 5 499.17 312.06 Less: Depreciation 62.88 46.03 Net Block 436.29 266.03 Investments 6 26.92 26.92 Current Assets, Loans & Advances Inventory 7 702.50 548.12 Sundry Debtors 8 620.11 228.37 Cash & Bank Balances 9 35.70 12.62 Loans & Advances 10 356.84 176.99 1,715.15 966.10 Less: Current Liabilities & Provisions 11 333.93 301.45 Net Current Assets 1,381.22 664.65 Miscellaneous Expenditure 63.92 0.60 (To the extent not written off) Significant Accounting Policies and Notes to Accounts 18 1,908.35 958.20 As per our report of even date for Karumanchi & Associates Chartered Accountants For and on behalf of the Board M. Madhusudhan Rao K. Hari Babu M.S.S.V. Satyanarayana Chief Financial Officer Managing Director Director K. Peddabbai Chinmoy Patnaik Partner Company Secretary Hyderabad, June 29, 2009 38

Profit and Loss Account for the year ended March 31, 2009 INCOME Particulars Schedule No. ANU S Rs. Million 2008 2009 2007 2008 Sales 1,761.16 1,673.49 Less: Exise Duty 164.07 169.41 Net Sales 1,597.09 1,504.08 Jobwork Income 10.72 9.59 Other Income 15.63 30.30 Stock Increase/(Decrease) 12 150.50 197.79 1,773.94 1,741.76 EXPENDITURE Raw Material Consumption 13 1,103.11 1,064.99 Manufacturing Expenses 14 168.67 180.20 Payments & Benefits to Employees 15 33.13 27.93 Administrative & Selling Expenses 16 101.90 92.16 Financial Charges 17 74.82 83.36 Depreciation 16.99 14.06 Preliminary Expenses written off 16.00 0.11 1,514.62 1,462.81 Profit before Tax 259.32 278.95 Provision for Tax - Current year 87.77 92.59 - Fringe Benefit Tax 0.55 0.52 - Deferred Tax 7.81 5.08 - Tax adjustments of previous years 1.00 Profit after Tax 163.19 179.76 Balance brought forward from previous year 270.91 148.49 Amount available for appropriation 434.10 328.25 APPROPRIATIONS Transfer to General Reserve 32.64 36.15 Proposed Dividend 19.32 18.11 Provision for Dividend Tax 3.28 3.08 Net Profit carried over to Balance Sheet 378.86 270.91 434.10 328.25 Earnings per Share Face value per Share (Re.) 1.00 1.00 Earnings per Share (Weighted Average) Diluted (Rs.) 1.35 1.49 Significant Accounting Policies and Notes to Accounts 18 As per our report of even date For and on behalf of the Board for Karumanchi & Associates Chartered Accountants M. Madhusudhan Rao K. Hari Babu M.S.S.V. Satyanarayana Chief Financial Officer Managing Director Director K. Peddabbai Chinmoy Patnaik Partner Company Secretary Hyderabad, June 29, 2009 39

Anu s Laboratories Limited Cash Flow Statement for the year ended March 31, 2009 Rs. Million Particulars 2008 2009 2007 2008 A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit before tax and extraordinary items 259.32 278.95 Ajustment for: Depreciation 16.99 14.06 Interest Income (1.26) Interest on Borrowings 74.82 83.37 Miscellaneous Expenditure Amortised 16.00 0.11 107.81 96.28 Operating Profit before working capital changes 367.13 375.23 Adjustment for: Trade and other Receivables (571.60) (236.98) Inventories (154.37) (203.07) Trade Payables and other Liabilities 68.59 (0.40) Increase/(Decrease) in Net Current Assets (657.38) (440.45) Cash Generated from operations (290.25) (65.22) Adjustment for: Income Tax & Fringe Benefit Tax (133.43) (1.00) Net cash from operating activities (A) (423.68) (66.22) B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of Fixed Assets (187.25) (33.58) Interest Received 1.26 Net cash used in investing activities (B) (187.25) (32.32) C. CASH FLOW FROM FINANCING ACTIVITIES Borrowings a Term Loans (54.49) (14.60) b. Working Capital Loans 54.03 156.42 Interest paid on borrowings (70.30) (83.37) Issue of capital with premium 802.20 41.00 IPO Expenses (79.32) Dividend Payouts (including Dividend Tax) (18.11) (6.07) Net cash used in financing activities (C) 634.01 93.38 Net increase in cash and cash equivalents (A+B+C) 23.08 (5.16) Cash and cash equivalents at the beginning of the year 12.62 17.78 Cash and cash equivalents at the end of the year 35.70 12.62 As per our report of even date For and on behalf of the Board for Karumanchi & Associates Chartered Accountants M. Madhusudhan Rao K. Hari Babu M.S.S.V. Satyanarayana Chief Financial Officer Managing Director Director K. Peddabbai Chinmoy Patnaik Partner Company Secretary Hyderabad, June 29, 2009 40

Schedules to the Balance Sheet ANU S Rs. Million Particulars As at As at March 31, 2009 March 31, 2008 SCHEDULE 1 SHARE CAPITAL Authorised 150,000,000 Equity Share of Re.1 each 150.00 150.00 (Previous year - 15,000,000 equity shares of Rs.10 each) Issued, Subscribed & Paid up 120,760,000 Equity Shares of Re.1 each fully paid up 120.76 82.56 (Previous year - 8,256,000 Equity Shares of Rs.10 each fully paid) (Company issued 38,200,000 Equity Shares of Re.1 each to the public during the year 2008-09) 120.76 82.56 SCHEDULE 2 RESERVES AND SURPLUS Securities Premium Account Opening Balance 96.84 58.39 Additions during the year 764.00 860.84 38.45 96.84 Subsidies 2.63 2.63 General Reserve Opening Balance 63.33 27.18 Add: Transfer from Profit and Loss Account 32.64 95.97 36.15 63.33 Profit and Loss Account 378.86 270.91 1,338.30 433.71 SCHEDULE 3 SECURED LOANS Term loan 113.97 168.46 The above loans are secured by a pari-passu first charge on the immovable properties and pari-passu charge on moveable properties (subject to the prior charge in favour of the Company's bankers on specified moveables, created/to be created for securing borrowings for working capital requirements) and further guaranteed by the Managing Director, Mr. K. Hari Babu and Directors Mr. N.S. Walimbe and Mr. M.S.S.V. Satyanarayana in their personal capacities. Working Capital 281.13 227.09 Working Capital Loans from bank is secured by hypothecation of inventory, book debts and other movable current assets of the company, both the present and future, and also second charge on all fixed assets of the Company, apart from unconditional and irrevocable personal guarantees of promoters and their relatives. These facilities are also covered by collateral security by way of equitable mortgage of agricultural and urban land and buildings belonging to the promoters and their relatives. 395.10 395.55 41

Anu s Laboratories Limited Rs. Million Particulars As at As at March 31, 2009 March 31, 2008 SCHEDULE 4 UNSECURED LOANS Sales Tax Deferment 11.35 11.35 11.35 11.35 SCHEDULE 5 FIXED ASSETS Rs. Million Gross Block Depreciation Net Block Particulars As at Additions Deletions Total as at Upto for the Deletions Upto As at As at April 1, March 31, April 1, year March 31, March 31, March 31, 2008 2009 2008 2009 2009 2008 Land 9.85 9.85 9.85 9.85 Buildings 18.93 0.35 19.28 2.78 0.64 3.42 15.86 16.15 Plant & Machinery 198.17 54.73 252.90 33.28 13.09 46.37 206.53 164.89 Electrical Equipment 13.56 0.38 13.94 2.24 0.65 2.89 11.05 11.32 Laboratory Equipment 12.10 2.20 14.30 1.47 0.66 2.13 12.17 10.63 Vehicle 8.57 0.84 0.39 9.02 3.30 0.87 0.13 4.04 4.98 5.27 Data Processing Equipment 4.08 0.21 4.29 1.84 0.68 2.52 1.77 2.24 Sofware Package 0.79 1.48 2.27 0.52 0.25 0.77 1.50 0.27 Office Equipment 1.43 0.24 0.04 1.63 0.30 0.07 0.01 0.36 1.27 1.13 Furniture & Fixtures 1.23 0.12 1.35 0.30 0.08 0.38 0.97 0.93 Capital Work-in-Progress 43.35 151.90 24.91 170.34 170.34 43.35 Total 312.06 212.45 25.34 499.17 46.03 16.99 0.14 62.88 436.29 266.03 Previous Year 278.48 33.67 0.09 312.06 31.97 14.06 46.03 266.03 Rs. Million Particulars As at As at March 31, 2009 March 31, 2008 SCHEDULE 6 INVESTMENTS Un-Quoted Nitya Laboratories Limited 170,000 2% Non-Cumulative Optionaly Redeemable-cum-Convertible Shares of Rs.100 each fully paid 17.00 17.00 982,099 Equity Shares of Rs.10 each fully paid 9.82 9.82 Share application money 0.10 0.10 26.92 26.92 42

ANU S Rs. Million Particulars As at As at March 31, 2009 March 31, 2008 SCHEDULE 7 INVENTORY (As certified by the management) Stores - at cost 6.04 5.14 Raw Materials - at cost 77.21 74.24 Work-in-Progress 435.26 349.53 Finished Goods - at cost 183.99 119.21 702.50 548.12 SCHEDULE 8 SUNDRY DEBTORS (Unsecured considered good) Due over six months 8.45 4.56 Others 611.66 223.81 620.11 228.37 SCHEDULE 9 CASH & BANK BALANCE Cash on hand 0.90 0.06 Balance with scheduled banks 34.80 12.56 35.70 12.62 SCHEDULE 10 LOANS AND ADVANCES (Unsecured, considered good recoverable in cash or in kind) Deposits 11.64 2.46 Advances for Goods & Services 292.96 125.25 Others Advances 52.24 49.28 356.84 176.99 SCHEDULE 11 CURRENT LIABILITIES & PROVISIONS (A) Current Liabilites Creditors for goods supplied 201.79 130.92 Creditors for Expenses 4.52 2.68 Creditors for Other Liabilites 16.66 16.27 Total (A) 222.97 149.87 (B) Provisions Dividend Payable 19.36 18.15 Income Tax 91.60 133.43 Total (B) 110.96 151.58 Total (A+B) 333.93 301.45 43

Anu s Laboratories Limited Schedules to the Profit and Loss Account Rs. Million Particulars 2008 2009 2007 2008 SCHEDULE 12 STOCK INCREASE/(DECREASE) Opening Stock (Finished Goods & Work-in-Progress) 468.75 270.96 Closing Stock (Finished Goods & Work-in-Progress) 619.25 468.75 150.50 197.79 SCHEDULE 13 RAW MATERIAL CONSUMPTION Opening Stock 74.24 72.03 Add: Purchases 1,106.08 1,067.20 Less: Closing Stock 77.21 74.24 1,103.11 1,064.99 SCHEDULE 14 MANUFACTURING EXPENSES Job Work Charges 85.53 98.09 Power & Fuel 28.92 24.28 Repairs & Maintenance 0.86 1.66 R&D Expenses 5.07 3.82 Stores & Consumables 18.58 24.22 Security Services & Factory Maintenance 18.06 15.91 Freight 11.65 12.22 168.67 180.20 SCHEDULE 15 PAYMENTS & BENEFITS TO EMPLOYEES Salaries & Wages 25.65 21.90 Staff Welfare 4.64 3.35 Contribution to P. F. & E.S.I. 2.80 2.43 Gratuity 0.04 0.25 33.13 27.93 44

ANU S Rs. Million Particulars 2008 2009 2007 2008 SCHEDULE 16 ADMINISTRATIVE & SELLING EXPENSES Rent, Rates & Taxes 1.27 0.96 Printing & Stationary 1.15 0.90 Postage & Telephones 1.64 1.32 Travelling & Conveyance 5.07 3.24 Vehicle Maintenance 1.29 1.16 Directors Remunaration 4.78 3.48 Audit Fees 0.50 0.22 Insurance 2.74 2.57 Legal & Professional Charges 6.15 2.35 Selling Expenses 13.12 13.81 Clearing Charges 3.64 3.82 Annual Maintenance Charges 0.42 0.58 Office Maintenance 0.79 1.06 Sales Tax 56.38 53.89 Other Expenses 2.96 2.80 101.90 92.16 SCHEDULE 17 FINANCIAL CHARGES Interest on Term Loans 23.74 25.92 Interest on Working Capital 34.50 37.66 Bank Charges 16.58 19.78 74.82 83.36 45

Anu s Laboratories Limited SCHEDULE 18 SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS I. Significant Accounting Policies A. Basis of Accounting Financial statements are prepared under the historical cost convention, in accordance with applicable accounting standards issued by the Institute of Chartered Accountants of India and relevant provisions of the Companies Act, 1956. B. Revenue Recognition Notes to Accounts i. Sales are recognized on dispatch of products. Sales are inclusive of insurance, freight and sales tax. ii. iii. The export incentives are accrued and accounted on the basis of the actual exports made during the year. Income from Job work services are recognized when services are rendered or related costs are incurred in accordance with the terms of specific contracts. C. Excise Duty Excise duty recovered is reduced from sale of products. Excise in respect of finished goods is accounted for, as and when goods are cleared from the factory and stock of finished goods are valued inclusive of excise duty where applicable. D. Fixed Assets I. Fixed assets are stated at cost less accumulated depreciation. Cost of acquisition of fixed assets is inclusive of freight, duties (net of CENVAT & VAT), taxes, incidental expenses relating to acquisition and the cost of installation/ erection as applicable. ii. iii. Depreciation on fixed assets is provided on Straight Line Method at the rates prescribed by Schedule XIV of the Companies Act, 1956. Depreciation is charged on pro-rata basis for assets purchased/sold during the year. Borrowing costs that are attributable to the acquisition or construction of fixed assets are capitalized as part of such assets for the period up to the date of commencement of production. All other borrowing costs are charged to revenue. E. Investments Long Term Investments are carried at cost. However, provision for diminution in value, if any, is made to recognize a decline other than temporary in the value of investments. F. Foreign Currency Transactions a. Transactions in foreign exchange are accounted for at the exchange rate prevailing on the date of transaction. Gains and losses arising thereon are recognized in the Profit and Loss Account. b. Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. G. Inventories Inventories are valued at lower of cost and estimated net realizable value, after providing for cost of obsolescence and other anticipated loss whenever considered necessary. Work-in-Progress is valued at estimated cost on the basis of stage wise completion of the production. Finished goods and work in process include cost of conversion and other costs incurred in bringing the inventories to their present level of location and condition. Cost is determined by using the weighted average method. 46

ANU S H. Taxation Provision for current tax is made after taking into consideration benefits admissible under the provisions of Income Tax Act, 1961. Deferred tax resulting from 'timing differences' between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax assets is recognized and carried forward only to the extent that there is a reasonable certainty that asset will be realized in future. II. Notes to Accounts I. Contingent Liabilities Contingent liabilities are disclosed after careful examination of the facts and legal aspects of the matter involved. 2. Segment Reporting a. Company's operations are predominantly related to the manufacture of bulk drugs intermediates, as such there is only one primary reportable segment. Secondary reportable segments are identified taking into account the geographical markets available to the products, the differing risks, returns and internal reporting system. b. As a part of secondary reporting, revenues are attributed to geographical areas based on the location of customers as detailed below: Rs. Million 2008-09 2007-08 Revenue % Revenue % Domestic 1,582.17 89.84 1,417.48 84.71 Exports 178.99 10.16 256.01 15.29 Total 1,761.16 100.00 1,673.49 100.00 c. The Company does not track its assets and liabilities by geographical area. 3. Related Party Transactions Disclosures as required by the Accounting Standard - 18 are given below: a. Name of the related parties and descriptions of relationships Name Nitya Laboratories Limited Zen Consultants Nature of relationship Other Related Party (Associate) Other Related Party (Associate) b. Key Managerial Personnel Mr. K. Hari Babu, Managing director Mr. N.S. Walimbe, Wholetime Director c. Relatives of Key Managerial Personnel Name Mrs. K. Anusha Mr. M. Bhanu Jaganath Nature of relationship Relative of Managing Director Relative of Director 47

Anu s Laboratories Limited d. Transactions during the year and balances outstanding as at the year end with the related parties are as follows: Rs. Million Nature of transactions Associate Key Management Relative of Key Personnel Management Personnel Investments in Nitya Laboratories Limited 26.92 (26.92) Advance paid to Nitya Laboratories Limited 261.89 (111.22) Consultancy Charges/Receivables (0.05) Salary paid to Mrs. K. Anusha 0.03 (0.24) Salary paid to Mr. Bhanu Jaganath 0.06 (0.10) Remuneration Mr. K. Hari Babu 3.94 (2.64) Mr. N.S. Walimbe 0.42 (0.42) Figures in brackets pertain to previous year. 4. Earnings per Share - (EPS) Rs. Million Computation for basic & diluted Earnings per Share March 31, 2009 March 31, 2008 I. Net profit as per Profit and Loss Account available for equity shareholders (Rs. Million) 163.19 180.76 II. Earnings per Share (Weighted Average) Basic (Rs.) 1.35 a 1.49 b a b EPS is calculated for 2008-09 based on number of shares outstanding during the year on weighted average basis. EPS is calculated for 2007-08 based on new number of shares (i.e. 2008-09) on weighted average basis. 48

ANU S 5. Managerial Remuneration. a. Managerial Remuneration (excluding the contributions to provident fund, provision for gratuity and leave encashment paid or payable to Directors) Rs. Million March 31, 2009 March 31, 2008 A. Minimum remuneration of Managing Director Salary 2.64 2.64 Perquisites Commission 1.30 Total (A) 3.94 2.64 B. Remuneration of Wholetime Director Salary 0.42 0.42 Perquisites Commission Total (B) 0.42 0.42 Total Remuneration (A+B) 4.36 3.06 b. Computation under Section 349 of the Companies Act, 1956 Rs. Million March 31, 2009 March 31, 2008 Profit before Tax 259.32 278.95 Add: Provision for depreciation as per Profit and Loss Account 16.99 14.06 Remuneration to Directors 4.36 3.06 Provision for Doubtful Debts 280.67 296.07 Less: Depreciation under Section 350 of the Companies Act 16.99 14.06 Less: Profit from Short Term Capital Gain 1.92 Profit as per Section 349 of the Companies Act 261.76 282.01 Overall remuneration as per Sections 198 and 309 of the Companies Act 25.94 27.94 Less: Remuneration paid to Wholetime Directors 4.36 3.06 Commission payable as per Sections 198 and 309 of the Companies Act 21.58 24.88 6. Employee Benefits a. Defined Contribution Plan The Company's Employees Provident Fund administered through Government Provident Fund, Employees State Insurance Scheme and Labor Welfare Fund are considered as Defined Contribution Plans. The Company's contributions paid/payable towards these defined contribution plan are recognized as expense in the Profit and Loss Account during the period in which the employee renders the related service. The interest rate payable by the trust to the beneficiaries every year is being notified by the government. The Company has no obligation to make good the shortfall, if any, between the return from the investments and the notified interest rate. 49

Anu s Laboratories Limited b. Defined Benefit Plan Company's liabilities towards gratuity are considered as defined benefit plan. The present value of the obligation under such defined benefit plan is determined based on actuarial valuation. 7. Disclosure Required by Micro, Small and Medium Enterprises (Development) Act, 2006 In the absence of necessary information relating to the suppliers registered as micro or small enterprises under the Micro, Small and Medium Enterprises (Development) Act, 2006, the Company has not been able to identify such suppliers and the information required under the said Act could not be compiled and disclosed. 8. Deferred Tax The Company has been recognizing in the financial statements the deferred tax assets/liabilities, in accordance with Accounting Standard 22 'Accounting for Taxes on Income' issued by the Institute of Chartered Accountants of India. The position of Deferred Tax Assets and Liabilities is as fallows: Rs. Million March 31, 2009 March 31, 2008 Opening Deferred Tax Liabilities 35.03 29.94 Depreciation difference 7.81 5.09 Closing Net Deferred Tax Liabilities 42.84 35.03 9. Contingent Liability Contingent Liabilities not provided for Rs. Million As at As at March 31, 2009 March 31, 2008 a. Unexpired bank guarantees & letters of credit 173.10 157.24 b. Demands of statutory authorities disputed by the Company in appeals with higher authorities in respect of i. Disputed Income Tax F.Y. 2004-05 0.27 3.95 ii. Disputed Sales Tax Demands F.Y. 2003-04 0.68 5.74 Other legal claims: M/s. Sunmoon Chemicals Private Limited filed a suit against the Company for a demand of Rs.4.68 Million and interest @ 24% 2004-05 1.83 2.38 2005-06 2.21 per annum towards 3% commission on supplies made to Combrex. The case is pending with the civil court. 4.68 4.68 10. Capital raised during the year and their utilization a. During the year, the Company has issued 3,820,000 Equity Shares of Rs.10 each at a premium of Rs.200 to the public through Initial Public Offer. b. Out of the proceeds of the above issue of the Shares Rs.201.22 Million have been utilized for capital expenditure (Vizag plant) apart from utilization of Rs.166.70 Million for long term working capital requirements, Rs.41.50 Million for general corporate purposes and Rs.79.40 Million towards issue expenses. Pending utilization of the balance, Rs.313.38 Million have been used as working capital. 50

ANU S 11. A. Production Data Installed capacity, Actual production Products Installed capacity MT Actual production 2008-2009 2007-2008 2008-2009 2007-2008 Bulk drugs & intermediates 17,961 18,901 As certified by the management, being technical matter accepted by the auditors as correct. Note: a. Including contract manufacturing and purchases of finished goods. b. Installed capacity is flexible as the plant is versatile, enabling the Company to produce in different capacities and therefore it varies depending on the product programme. B. Particulars in respective of sales, consumption, opening stock and closing stock 2008-2009 2007-2008 MT Rs. Million MT Rs. Million Sales - Bulk drugs & intermediates 17,383 1,761.16 18,977 1,673.49 Details of finished goods stocks: Bulk drugs & intermediates Opening stock 237 119.21 67 45.73 Closing stock 816 183.99 237 119.21 Details of raw material consumption: DCFB 856 161.77 744 129.31 Aluminum Chloride 1,777 56.86 2,311 83.26 Acetyl Chloride 568 56.66 642 43.06 Others 827.82 809.36 Total 1,103.11 1,064.99 C. Expenses incurred in foreign currency 2008-2009 2007-2008 CIF value of imports 427.45 214.04 Foreign travel 1.42 0.69 D. Earnings in foreign currency 2008-2009 2007-2008 FOB value of exports 178.99 256.02 E. Value of Imported & Indigenous raw materials consumed 2008-2009 2007-2008 % Rs. Million % Rs. Million Imported 38.75 427.45 20.24 215.52 Indigenous 61.25 675.66 79.76 849.47 Total 100.00 1,103.11 100.00 1,064.99 51

Anu s Laboratories Limited 12. Events subsequent to the date of the Balance Sheet a. The Board of Directors have recommended the issue of bonus shares in the proportion of one new Equity Share for every existing equity share by utilization of Securities Premium Account, subject to the approval of the shareholders. b. The Equity Share Capital of the Company comprising of Equity Shares of Rs.10 each are sub-divided into Equity Shares of Re.1 each. 13. Previous year s figures have been regrouped and/or rearranged wherever necessary. As per our report of even date for Karumanchi & Associates Chartered Accountants For and on behalf of the Board M. Madhusudhan Rao K. Hari Babu M.S.S.V. Satyanarayana Chief Financial Officer Managing Director Director K. Peddabbai Chinmoy Patnaik Partner Company Secretary Hyderabad, June 29, 2009 52

Additional Information as required under Part IV of Schedule VI to the Companies Act,1956 ANU S Balance Sheet abstract and Company's General business profile: 1. Registration details: Registration No. 0 1-2 3 2 8 3 / 9 5-9 6 Corporate Identification No. U 2 4 2 3 0 A P 1 9 9 6 P L C 0 2 3 2 8 3 State Code 0 1 Balance Sheet Date 3 1 0 3 2 0 0 9 2. Capital Raised during the year: (Rupees in thousands) Public Issue 3 8 2 0 0 Rights Issue N I L Private Placement N I L Bonus Issue N I L 3. Position of Mobilisation and Deployment of Funds (Rupees in thousands) Total Liabilities 1 9 0 8 3 4 2 Total Assets 1 9 0 8 3 4 2 SOURCES OF FUNDS APPLICATION OF FUNDS Sources of Paid up Capital 1 2 0 7 6 0 Net Fixed Assets 4 3 6 2 8 6 Reserves & Surplus 1 3 3 8 3 0 6 Investments 2 6 9 2 1 Deferred Tax Liability 4 2 8 3 7 Net Current Assets 1 3 8 1 2 1 4 Secured Loans 3 9 5 0 8 9 Misc. Expenditure 6 3 9 2 1 Unsecured Loans 1 1 3 5 0 4. Performance of the Company (Rupees in thousands) Sales and Other Income 1 7 4 1 7 6 8 Total Expenditure 1 5 1 4 6 1 3 Profit before Tax 2 7 8 9 5 4 Profit after Tax 1 6 3 1 9 9 Earnings per Share (Rs.) 1. 3 5 Dividend per Share (Rs.) 0. 0 8 5. Generic names of three principal products of Company (per monetary terms) Item Code Product Description 0.1 2,4 DICHLORO 5 FLUORO ACETOPHENONE 0.1 CIS(+) HYDROXY LACTUM 0.1 CHLOROHEXAN - 2-ONE For and on behalf of the Board M. Madhusudhan Rao K. Hari Babu M.S.S.V. Satyanarayana Chief Financial Officer Managing Director Director Hyderabad, June 29, 2009 Chinmoy Patnaik Company Secretary 53

Anu s Laboratories Limited Board of Directors Mr. M. Ajaya Kumar, 62, Chairman, did his Masters in Agriculture and has nearly four decades of experience, of which 24 years is in the top management of the pharmaceutical industry. He has been the Managing Director of SOL Pharmaceutical Limited, subsequently the Managing Director at Natco Pharma Limited and Wholetime Director at Aurobindo Pharma Limited. Mr. K. Hari Babu, 52, the Managing Director, is a Chartered Accountant and has 28 years of experience in various fields of management out of which 22 years is in the pharmaceutical industry. He has experience in the field of strategic planning, corporate and project financing, human resource development, information systems management, and marketing strategy. He promoted the Company and has played a key role in its growth. Mr. N.S. Walimbe, 53, is a Chemical Engineer (IIT, Mumbai) and has over three decades of experience in chemical and pharmaceutical industry. In 1997, he joined the Company as a co-promoter and has been responsible for strategic planning, building up and heading the technical team, provide solutions to manufacturing processes and R&D activities. Mr. M.S.S.V. Satyanarayana, 48, is a graduate from Nagarjuna University and is an Agriculturist. Dr. K. Rajeswara Rao, 51, is a practicing Doctor having done his MBBS. He did his post graduation in pediatrics and completed his Fellowship in allergy and immunology in 1991 from the American Board of Medical Specialties, USA. He is certified by the American board in pediatrics, allergy and immunology. He has been practicing allergy, immunology and clinical research. Mr. O.M. Kejriwal, 53, is a graduate in Chemistry and did his LL.B. He qualified as a Chartered Accountant and is a senior partner in O.M.Kejriwal & Company, Chartered Accountants, since 1983. He has varied experience in audit, finance, taxation and in preparation of techno feasibility reports. He is a consultant to several companies. Bankers Karur Vyasa Bank Limited IDBI Bank State Bank of India Statutory Auditors M/s. Karumanchi & Associates Chartered Accountants Flot No. 301, 7-1-619/A, Swarganivas Enclave, Ameerpet, Hyderabad - 500 038 Chief Financial Officer M. Madhusudhan Rao Company Secretary Chinmoy Patnaik 54

ANU S ANU S ANU S LABORATORIES LIMITED Registered Office: A-49, Madhura Nagar, Vengalrao Nagar, Hyderabad - 500 038 Mr./Ms............. Day Date Time Venue ATTENDANCE SLIP Wednesday September 30, 2009 11.00 a.m. Nice Conference Hall, 7-1-621/2/3, above ICICI Bank Limited, Srinivasa Nagar East, between SR Nagar & Ameerpet, Hyderabad. Folio No. Demat Particulars DP ID No. MEMBER PROXY No. of Shares Client ID No. Tear Here (Please tick as applicable) Note: 1. Only Members of the Company or their proxies will be allowed to attend the Meeting ON PRODUCTION OF ATTENDANCE SLIP duly completed and signed. 2. Members are requested to bring their copies of Annual Report with them. 3. Members who hold shares in dematerialised form are requested to bring their Client ID and DP ID numbers for easy identification of attendance at the Meeting. ANU S LABORATORIES LIMITED Registered Office: A-49, Madhura Nagar, Vengalrao Nagar, Hyderabad - 500 038 No. of Shares ANU S I hereby record my presence at the 13th ANNUAL GENERAL MEETING of the Company Signature of the Member or Proxy FORM OF PROXY Folio No. Demat Particulars DP ID No. Client ID No. I/We...of (Name of Member)... (Address) being Member(s) of ANU S LABORATORIES LIMITED hereby appoint...,... of (Name of proxy)... or failing (Address of proxy) him/her... (Name of alternate proxy) of... (Address of alternate proxy) as my/our proxy to vote for me/us on my/our behalf at the 13th ANNUAL GENERAL MEETING of the Company to be held at 11.00 a.m. on Wednesday, September 30, 2009 and at any adjournment thereof. Affix a 15 paise Date... Signature... Revenue Stamp Note: The Proxy in order to be effective should be duly stamped, completed and signed and must be deposited at the Registered Office of the Company not less than 48 hours before the time for holding the aforesaid Meeting. The Proxy need not be a member of the Company. 55

Forward Looking Statements This communication contains statements that constitute forward looking statements including, without limitation, statements relating to the implementation of strategic initiatives and other statements relating to our future business developments and economic performance. While these forward looking statements represent our judgements and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, general market, macro-economic, governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, legislative developments, and other key factors that we have indicated could adversely affect our business and financial performance. Anu s Laboratories undertakes no obligation to publicly revise any forward looking statements to reflect future events or circumstances. Concept, Research, Design & Production CAPRICORN Hyderabad

ANU S Anu s Laboratories Limited A-49, Madhura Nagar, Vengalrao Nagar, Hyderabad - 500 038 www.anulabs.com www.anulabs.com