DIRECTOR'S REPORT

TO

THE MEMBERS,

Your Directors are pleased to present 27th Annual Report and the Company's audited financial statements for the financial year ended March 31, 2015.

Review of Operations Consolidated Financials

During the period under review, the Company has earned revenue of Rs.13,859.65 million.

The Company - has reported - sales of Rs.13800.99 million in the FY 2014-15 compared to net sales of Rs.13,508.33 million in FY 2013­14, registering growth of 2.17% in the current financial year. The Company's growth was driven by strong performance across all manufacturing facilities.

The EBITDA stood at Rs.2227.52 million for FY 2014-15 compared to Rs.2,132.69 million for FY 2013-14, registering a growth of 4.45%. The profit after tax for FY 2014-15 stood at Rs.720.50 million compared to Rs.663.94 million for FY 2013-14, registering a growth of 8.52% in the current financial year.

Standalone Financials

During the period under review, the Company has earned revenue of Rs.4,315.82 million.

The Company - has reported - sales of Rs.4,301.48 million in the FY 2014-15 compared to net sales of Rs.4319.93 million in FY 2013-14.

The EBITDA stood at Rs.1071.49 million for FY 2014-15 compared to Rs.1012.17 million for FY 2013-14, registering a growth of 5.86 %.

Dividend

Due to proposed investment in expansions and developments in future and to conserve the available resources for the same, the board of directors of the Company have not recommend any dividend for the year 2014-15

Transfer to General Reserves

The Company proposes not to transfer funds to general reserves for the FY 2014-15. The total Reserves & Surplus (including Capital Reserve, Securities Premium Reserve, Central Subsidy, General Reserve and Surplus) as on March 31, 2015 is Rs.3577.45 million as against the Paid up Capital of Rs.162.04 million.

Share Capital

The Authorised Share Capital of the Company is Rs.111,00,00,000/-(Rupees One Hundred Eleven Crores only) comprising 4,00,00,000 (Four Crores) Equity Shares of Rs.10/- (Rupees Ten Only) each, and 71,00,00 (Seven Lakh Ten Thousand only) Preference Shares of the Company with a par value of Rs.1,000/- (Rupees One Thousand only) each,. The Paid Up Share Capital of the Company is Rs.162037830 (rupees sixteen crores twenty lakhs thirty seven thousand eight hundred and thirty only) divided into 162,03,783 equity shares of Rs.10/- each as on March 31, 2015.

Management's Discussion and Analysis Statement

Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, is presented in a separate section forming part of the Annual Report  Subsidiaries, Joint Ventures and Associate Companies

Subsidiary Companies:

The Company has five Indian Subsidiaries - Creative Healthcare Private Limited, Klar Sehen Private Limited, Octtantis Nobel Labs Private Limited, Finoso Pharma Private Limted and Vivimed Labs (Alathur) Private Limited.

Hong Kong based Vivimed Holdings Limited a 100% subsidiary of the Company is a 100% holding Company of Vivimed Labs Europe Limited, UK.  Vivimed Labs USA Inc. is a 100% subsidiary of Vivimed Labs Limited.

Mauritius based Vivimed Labs Mauritius Limited, a 100% subsidiary of Vivimed Labs Limited is the holding company of the 5 downstream subsidiaries as under:

1. Vivimed Labs UK Limited, UK

2. Vivimed Labs Spain S. L., Spain

3. Union Quimico Farmaceutica S.A.U, Spain

4. Holliday International Limited, UK

5. Uquifa Mexico S.A. de C.V., Mexico

In totality, as on March 31, 2015, the Company has 5 Indian and 9 foreign direct/step down wholly owned subsidiaries.

Subsidiary Companies:

• Creative Healthcare Private Limited (CHCPL)

Creative Health Care Pvt Ltd. is a company specialised in mfg pharmaceutical formulations under CMO catering to Pharma majors like Wockhardt, Cipla, Abbott, Lupin etc. The relationship with these companies ranges from 3 years to 10 years and the product range is ever increasing. The capacity utilisation is around 90%. CHCPL has recently acquired Some pharma brands from Noel Pharma and started marketing the products from sept., 14 onwards and showing good growth. CHCPL is dealing in Pharmaceutical business. The Share Capital of the Company as on March 31, 2015 is Rs.25.00 million. During FY 2014-15, the Company achieved a turnover Rs.861.10 million against the turnover of Rs.704.77 million of FY 2013-14 and the profit after tax is Rs.64.48 million against Rs.39.00 million of FY 2013-14.

• Klar Sehen Private Limited (Klar Sehen)

Klar Sehen, , a niche ophthalmic formulations Company in India has started its journey beyond India to reach a global market, starting with the US OTC (OPHTHALMOLOGY PRODUCTS) market, and has launched 4 products which are now stocked in the top 3 retail chains in USA.

Klar Sehen has an enviable track record of providing eye care products for over 3 decades. Our strict adherence to quality and service has helped in winning the trust of million of satisfied consumers.

The Company is dedicated towards providing eye care products in all the relevant segments - Tears Substitutes, Antibiotics, Antiviral, Mydriatics, NSAIDS, Anti allergens, Operative and so on. Klar Sehen's products like RENICOL, DEXACORT-N, IRIGAN, etc. are trusted by Ophthalmologists across India.

Klar Sehen is dealing in Pharmaceutical business, it is a wholly owned subsidiary of the Company. The Share Capital of the Company as on March 31, 2015 is Rs.6.99 million. During FY 2014­15, the Company achieved a turnover of Rs.313.68 million against the turnover of Rs.269.88 million of FY 2013-14 and the profit after tax is Rs.38.14 million against Rs.21.80 million of FY 2013-14

• Finoso Pharma Pvt Ltd (FINOSO)

FINOSO.,Is a contract research organisation into FR&D, AR&D, quality assurance, regulatory affairs, project management and stability studies and other works related to filings for USA, Canada, Australia and other regulatory markets\countries.

Finoso specialises in the development of formulations in Solid oral dosage forms like tablets, capsules, and liquid orals like syrups and suspensions. Also does stability studies as per ICH guidelines for Canada which is approved by Health Canada, a regulatory body in Canada.

The team consisting of 35 technical core team of scientists, capable of delivering controlled release, modified release, sustained release formulations and ODT (oral dispersible technology) and MUPS (multi unit particulate system) in the form of pellets and other technologies.

The clientele includes Aurobindo, DRL, and companies from USA and Europe. The Share Capital of the Company as on March 31, 2015 is Rs.30.15 million. During FY 2014-15, the Company achieved a turnover of Rs.63.43 million against the turnover of Rs.34.95 million of FY 2013-14 and the profit after tax is Rs.0.23 million against Rs.2.53 million of FY 2013-14

• Vivimed Labs Alathur Pvt Ltd

In August 2013, as part of its global business strategy to complete its presence across the entire health care value chain, Vivimed completed the acquisition of a US FDA inspected H1.2 billion SOD per annum manufacturing facility at Alathur near Chennai, Tamilnadu. This facility earlier belonged to the US pharma MNC Actavis (Watson) and has received US FDA approval 4 times in  April 2007, April 2009, Oct 2011 and most recently in Feb 2015.

The plant manufacturing capacity can be expanded to 5 billion SOD per annum. This eliminates 3 to 4 years of lead time to build a green field project of this quality and getting the regulatory approvals.

This strategic acquisition gives Vivimed immediate access to regulated markets such as US and European union. US is the largest generic market in the world. This also enables Vivimed to complete the health care value chain by providing forward integration synergies for Vivimed's existing API business.

With the acquisition of the Alathur facility and Finoso, Vivimed will now develop its own formulation dossiers, DMFs and ANDAs and start building a filing pipeline with the Alathur facility as the manufacturing site.

Vivimed Labs (Alathur) Pvt Ltd is dealing in Pharmaceutical business,. The Share Capital of the Company as on March 31, 2015 is Rs.501.70 million. During FY 2014-15, the Company achieved a turnover of Rs.281.30 million against the turnover of Rs.329.06 million of FY 2013-14 and the profit after tax is Rs. (55.29) million lakhs against Rs. (117.08) million of FY 2013-14

• Octtantis Nobel Labs Private Limited (ONPL)

Octtantis Nobel Labs Pvt. Ltd., is incorporated in April 2011 with the vision of becoming the key player in Pharmaceutical Formulations Ethical marketing in Indian Pharmaceutical industry.

M/s. Vivimed labs Limited has acquired the stake in M/s. Octtantis Nobel Labs. Pvt. Ltd to make foray into Pharmaceutical  formulations marketing.

The Company has started its operations from September 2011 under the leader ship of the directors having good experience in manufacturing and Ethical marketing of Pharmaceutical Formulations.

The Company launched with 25 products consisting of Antibiotics, Antidiarrhoeals, Anti inflammatory, Analgesics, Dietary supplements and Nutraceuticals etc. Out of which few brands were acquired from M/s. Hezen Inc. - Hyderabad having a sale turnover of Rs. 7 Crores .

The Company started its marketing operations in Andhra Pradesh, Bihar, Jharkhand, Assam, Arunachal Pradesh, Manipur, Meghalaya, Tripura, Nagaland and Mizoram with a field strength of 130 members marketing team.

However, The Company transferred its business to its co-companies and is currently not undertaking marketing of ethical formulations to save on marketing costs to the group as a whole.

Under the leader ship of experienced Directors M/s. Octtantis Nobel Labs Pvt. Ltd has acquired the fully operational manufacturing facility located in Plot. No: 41 & 44 A&B in Anrich Industrial Estate, Bollaram, Jinnaram Mandal, Medak district AP. Having the manufacturing capacity of Tablets, Capsules, Liquid Orals and Powder etc. under cGMP norms.

Such plant has been leased out to Vivimed Labs Ltd., for leveraging the CMO experience of Vivimed labs Ltd., who entered into a manufacturing agreement with M/s. Wockhardt Limited for some of their products.

ONPL is dealing in Pharmaceutical business. The Share Capital of the Company as on March 31, 2015 is H23.00 million.

• Vivimed Holdings Limited (VHL)

The Company was incorporated in Hong Kong as an wholly owned subsidiary of Vivimed Labs Ltd. It is a holding company to Vivimed Labs Europe Limited. The Share Capital of the Company as on March 31, 2015 is Rs.0.06 million.

• Vivimed Labs Europe Limited

The Company is a wholly owned subsidiary of VHL.. The Share Capital of the Company as on March 31, 2015 is Rs.8.17 million. During FY 2014-15, the Company achieved a turnover of Rs.1153.91 million against the turnover of Rs.1397.29 million of FY 2013-14 and the profit after tax is Rs.146.05 million against Rs.120.20 million of FY  2013-14

• Vivimed Labs USA INC. (VL USA)

VL USA is dealing in Pharmaceutical business,.. During FY 2014-15, the Company achieved a turnover of 484.05 million against the turnover of Rs.408.57 million of FY 2013-14 and the profit after tax is Rs.6.92 million against H(5.01) million of FY 2013-14

• Vivimed Labs Mauritius Limited (VML)

VML was incorporated in Mauritius. It is a holding company to

Vivimed Labs UK Limited. The Share Capital of the Company as on March 31, 2015 comprises of H460.41 million in the form of Equity Share Capital and . Preference share capital of H639.45 million.

• Vivimed Labs UK Limited (VL UK)

VL UK was incorporated in UK as an wholly owned subsidiary of VML. It is a holding company to Vivimed Labs Spain S.L. The Share Capital of the Company as on March 31, 2015 is Rs.639.45 million.

• Vivimed Labs Spain S.L.(VL Spain)

VL Spain was incorporated in Spain as an wholly owned subsidiary of VL UK . It is a holding company to Union Quimico Farmaceutica  S.A.U

The Share Capital of the Company as on March 31, 2015 is Rs.642.78 million.

• Union Quimico Farmaceutica S.A.U (UQUIFA Spain)

Uquifa Spain is a well-established manufacturer of pharma API's and intermediates with global coverage operating cGMP sites out of Spain. Uquifa sells to more than 70 countries worldwide and has more than 150 active DMF's filed and 20 COS approved. Uquifa counts amongst its customers the major Generic and Ethical companies operating in the Industry and continues to invest in personnel and facilities to maintain a arrow technology offering to both the Generic Industry and the Ethical Pharmaceutical Industry.

The Share Capital of the Company as on March 31, 2015 is Rs.209.87 million. During FY 2014-15, the Company achieved a turnover of Rs.5240.73 million against the turnover of Rs.5106.08 million of FY 2013-14 and the profit after tax is Rs.319.10 million against Rs.205.61 million of FY 2013-14

• Holiday International Limited (HIL)

HIL was incorporated in UK as an wholly owned subsidiary of VL Spain . It is a holding company to Uquifa Mexico S.A. de C.V

The Share Capital of the Company as on March 31, 2015 is Rs.0.00 million.

• Uquifa Mexico S.A. de C.V. (Uquifa)

The Share Capital of the Company as on March 31, 2015 is Rs.133.79 million. During FY 2014-15, the Company achieved a turnover of Rs.1806.97 million against the turnover of Rs.2103.58 million of FY 2013-14 and the profit after tax is Rs.75.96 million against Rs.78.59 million of FY 2013-14

Associate Companies : Yantra Green Power Pvt Ltd:

Yantra Green Power (P) Ltd.,is extremely focus driven in setting up a Captive Solar Power Plant in Telangana and wants to define the goals and objectives in achieving the Phase I requirements of the project under REC. This is a Grid interactive Power plant based on Solar Photovoltaic technology using Polycrystalline modules. The power purchase agreement has been signed with M/s Vivmed Labs Ltd for the supply of power. The synchronisation of the plant was  completed on 17/07/2015 and commercial date of operation will start on completion of Long Term Open Access Agreement (LTOA) between Yantra Green Power, Vivimed labs and TSCPDCL

The Policy for determining material subsidiaries as approved by the Board may be accessed on the Company's website at the link: www. vivimedlabs.com

However, as per the provisions of section 129 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the financial statements of the subsidiary Companies is prepared in Form AOC-1 and it forms part of the consolidated financial statements.

Consolidated Financial Statements

The consolidated financial statements, in terms of Section 129 of the Companies Act, 2013 and Clause 32 of the Listing Agreement and prepared in accordance with Accounting Standard 21 as specified in the Companies (Accounting Standards) Rules, 2006 forms a part of this annual report. As per the provisions of Section 136 of the Companies Act, 2013, the Company has placed separate audited accounts of its Subsidiaries on its website www.vivimedlabs.com and copy of separate audited accounts of its Subsidiaries will be provided to the members at their request

Director's Responsibility Statement

Pursuant to the requirement of Section 134(5) of the Companies Act, 2013 and based on the representations received from the operating management, the Directors hereby confirm that:

a. in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

b. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit of the Company for the year ended on that date;

c. the Directors have taken proper care for the maintenance of  adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a 'going  concern' basis for the financial year ended March 31, 2015;

e) the Directors have laid down internal financial controls to be  followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) the Directors have devised proper systems to ensure compliance  with the provisions of all applicable laws and that such systems are adequate and operating effectively

Corporate Governance Report

The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The report on Corporate Governance as stipulated under the Listing Agreement forms an integral part of this Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance is attached to the report on Corporate Governance.

Corporate Social Responsibility (CSR)

The Corporate Social Responsibility Committee (CSR Committee) has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board.

The CSR Policy may be accessed on the Company's website at the link: www.vivimedlabs.com

The Company would undertake CSR initiatives in compliance with Schedule VII to the Act. During the year, the Company has not spent on CSR activities. The Company is evaluating various proposals to ensure CSR funds are optimally utilised (Annexure I).

Nomination and Remuneration Committee

The Company's Nomination and Remuneration committee consists Independent Directors which ensures transparency in determining the remuneration of Directors, KMPs and other employees of the Company.

The Performance Evaluation and Remuneration Policy framed by the Committee and approved by the Board is directed towards rewarding performance of Executive and Non- Executive Directors, Key Managerial Personnel and Senior Management Personnel of the Company based on review of achievements periodically

Risk Management

During the year, your Directors have constituted a Risk Management Committee which has been entrusted with the responsibility to assist the Board in (a) Overseeing and approving the Company's enterprise wide risk management framework; and (b) Overseeing that all the risks that the organisation faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks. Your Company has proper process for Risk Management.

Internal Audit & Controls

Your Company continues to engage M/s Price Waterhouse Coopers Pvt. Ltd as its Internal Auditors. During the year, your Company continued to implement their suggestions and recommendations to improve the internal controls. Their scope of work includes review of operational deficiency, effectiveness of systems & processes, compliances and assessing the internal control strengths in all areas. Internal Auditors observations are discussed and suitable corrective actions are taken as per the directions of Audit Committee on an on-going basis to improve efficiency in operations.

The Company's internal control systems are well established and commensurate with the nature of its business and the size and complexity of its operations. The Audit Committee reviews adequacy and effectiveness of the Company's internal control environment and monitors the implementation of audit recommendations. The recommendations/suggestions of the internal auditors are discussed in the Audit Committee meetings periodically.

Directors and Key Managerial Personnel

In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Srinivas Chidambaram(Non-Executive, Non-Independent Director), Mr Sandeep Varalwar (Non Independent, Executive Director) and Mr S Raghunandan (Non Independent, Executive Director) of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible offers themselves for re-appointment.

Mr. Santosh Varalwar was re-appointed as Managing Director & CEO of the Company with effect from August 14, 2010 by the Shareholders at the 22nd Annual General Meeting of the Company held on September 18, 2010. The current term of Mr. Santosh Varalwar as Managing Director & CEO of the Company expires on August 13, 2015. Mr. Manohar Rao Varalwar, Mr. Subhash Varalwar, Mr. Sandeep Varalwar and Mr S. Raghunandan were re-appointed as whole time Directors of the Company with effect from August 14, 2010 by the Shareholders at the 22nd Annual General Meeting of the Company held on September 18, 2010. The current term of them as whole Time Directors of the Company expires on August 13, 2015. In view of their consistent efforts which have contributed to the growth of the organisation and the sincere service rendered for the better performance of the organisation during their tenure as Managing Director & CEO and whole time Directors, the Board of Directors on the recommendation of the Nomination and Remuneration Committee, has decided to re-appoint Mr. Santosh Varalwar as Managing Director & CEO and Mr. Manohar Rao Varalwar ,Mr. Subhash Varalwar, Mr. Sandeep Varalwar and Mr S. Raghunandan as whole time Directors of the Company for a further period of 5 (five) years effective from August 14, 2015 under Section 196, 197, 203 read with Schedule V of the Companies Act, 2013 and rules made thereunder. The approval of the members is being sought to the terms, conditions and stipulations for the re-appointment of Mr. Santosh Varalwar as Managing Director & CEO and Mr. Manohar Rao Varalwar, Mr. Subhash Varalwar, Mr. Sandeep Varalwar and Mr S. Raghunandan as whole time Directors and the remuneration payable to them and resolution pertaining to the same is contained in the notice calling Annual General Meeting.

During the year under review, the members approved the appointments of Prof. V. Bhagvant Rao ,Dr V Peesapati, Mr. Nixon Patel and Mr P V Rathnam as Independent Directors of the Company who are not liable to retire by rotation.

To broad base the Board and in compliance with Companies Act 2013 & Listing agreements with stock exchanges, the Board of Directors have appointed Mrs. Umanath Varhabotla as an Additional Director (Woman Director) on the Board. Resolution pertaining to the appointing Ms. Umanath Varhabotla as an Independent director is contained in the notice calling Annual General Meeting.

During the year under review, the Company appointed Mr N M Vaidyanathan as CFO of the Company and due to personnel reasons he resigned on 18/3/2015.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges.

The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation of the non-executive directors and executive directors.

The Board of Directors has complete access to the information within the Company. Independent Directors have the freedom to interact with the Company's management. Interactions happen during Board / Committee meetings, when CXOs are asked to make presentations about performance of the Company to the Board. Apart from this, they also have independent interactions with the Statutory Auditors, the Internal Auditors and external advisors appointed from time to time. Further, they meet without the presence of any management personnel and their meetings are conducted informally to enable the Independent Directors to discuss matters pertaining to the Company's affairs and put forth their combined views to the Board of Directors of the Company.

Employee Stock Option Plan (ESOP)

The Nomination and Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the Employees' Stock Option Plan of the Company in accordance with the applicable SEBI Guidelines.

The applicable disclosures as stipulated under the SEBI Guidelines as on March 31, 2015 (cumulative position) with regard to the Employees' Stock Option Scheme (ESOS) are herein under provided.

Pursuant to clause 14 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, certificate from M/s. P. Murali & Co, Statutory Auditors is given as Annexure II to this report.

Auditors & their Report Statutory Auditors

Pursuant to the provisions of Sections 139, 141 & 142 and other applicable provisions, if any, of the Companies Act, 2013 and rules thereon, M/s. P.Murali &Co, Chartered Accountants, Hyderabad was re-appointed for 1 year in the last Annual General meeting. The Company has received a certificate from the auditors to the effect that their re-appointment if made, would be in accordance with the conditions as specified under Section 141 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014. The Directors recommend for re- appointment of M/s. P.Murali &Co,, Chartered Accountants as Statutory Auditors for the FY 2015-16 & FY 2016-17 subject to ratification in next Annual General Meeting. A resolution proposing re-appointment of M/s. P.Murali & Co, Chartered Accountants as the Statutory Auditors of the Company  for the FY 2015-16 & FY 2016-17 pursuant to section 139 of the  Companies Act, 2013 forms part of the Notice.

Comments of the Auditors in their report and the notes forming part of the accounts are self-explanatory and need no comments. However, the Auditors have not made any adverse qualifications in their report on the accounts of the Company under review.

Cost auditors

In pursuance of Section 233B of the Companies Act, 1956 the Central Government has ordered Cost Audit for pharma sector Accordingly, M/s M/s. A.S. Rao & Co, Cost Accountants were appointed as Cost Auditors to render reports to the Central Government. resolution pertaining to the ratification of remuneration of cost auditors is contained in the notice calling Annual General Meeting.

Secretarial Auditor

The Board has appointed M/s. N V S S S Rao, Company Secretary in practice , to conduct Secretarial Audit for the FY 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith marked as Annexure III to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Contracts and Arrangements with Related Parties

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, except with the wholly owned subsidiary, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed  on the Company's website at the link: www.vivimedlabs.com

The particulars of contracts or arrangements with related parties referred to in section 188(1) are prepared in Form No. AOC-2 pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 and the same is enclosed as Annexure IV to this Report.

Disclosures Audit Committee

The Audit Committee comprises majority Independent Directors namely Mr. P. V. Ratnam (Chairman), Prof. V. Bhagvant Rao and Mr. Srinivas Chidambaram as other members. All the recommendations made by the Audit Committee were accepted by the Board.

Vigil Mechanism

The Company has a Vigil mechanism and Whistle blower policy in terms of the Listing Agreement, under which the employees are free to report violations of applicable laws and regulations and the Code of Conduct. Protected disclosures can be made by a whistle blower through a dedicated e-mail, or a letter to the Chairman of the Audit Committee.

The Policy on vigil mechanism and whistle blower policy may be accessed on the Company's website at the link: www. vivimedlabs.com

Meetings of the Board  five meetings of the Board of Directors were held during the year under review. For further details, please refer report on Corporate Governance of this Annual Report.

Code of Conduct

A declaration regarding compliance with the code of conduct signed by the Company's Managing Director & CEO is published in the Corporate Governance Report which forms part of the annual report.

Particulars of loans given, investments made, guarantees given and securities provided are provided in the standalone financial statement (Please refer Notes to the standalone financial statement).

Conservation of energy, technology absorption and foreign exchange earnings and outgo:

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure V to this Report.

Extract of Annual Return

Extract of Annual Return of the Company is annexed herewith as Annexure VI to this Report.

Particulars of Employees and related disclosures

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, no employee of the Company except executive directors and Key Managerial persons are drawing remuneration in excess of the limits set out in the said rules forms part of this Report.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are also forms part of this Report.

Your Directors further state that, the remuneration paid to the Key managerial Personnel and others is as per the Remuneration Policy of the Company.

Policy on Sexual Harassment

The Company has adopted policy on Prevention of Sexual Harassment of women at Workplace in accordance with The Sexual Harassment of women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the year under review, the Company has not received any complaints pertaining to Sexual Harassment.

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Act.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOP referred to in this Report.

4. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

6. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. (Except H10 lakhs imposed by SEBI vide its order dated 24.7.2014 for not intimating the Exact date of dividend (for FY 2012-13) payment to stock exchanges).

Cautionary statement

The management of Vivimed Labs has prepared and is responsible for the financial statements that appear in this report. These are in conformity with accounting principles generally accepted in India and, therefore, may include amounts based on informed judgements and estimates. The management also accepts responsibility for the preparation of other financial information that is included in this report. Statements in this Management Discussion and Analysis describing the Company's objectives, projections, estimates and expectations may be 'forward looking statements' within the meaning of applicable laws and regulations. Management has based these forward looking statements on its current expectations and projections about future events. Such statements involve known and unknown risks, significant changes in political and economic environment in India or key markets abroad, tax laws, litigation, labour relations, exchange rate fluctuations, interest and other costs may cause actual results to differ materially

Appreciation and Acknowledgement

Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Company's executives, staff and workers

For and on Behalf of Board of Directors

Sd/- Dr. V. Manohar Rao

Whole Time Director

Sd/- Santosh Varalwar

Managing Director & CEO

Date : August 14, 2015

Place : Hyderabad