Ayujoy Herbals Ltd. (AJOY)

[RainmanOregon]

ITEM 4: Management’s Discussion and Analysis or Plan of Operation:
The management is pleased with the current financial position of the company. Revenues
increased 231% compared to the corresponding period in 2010 and was 96% of the full year’s
revenue for the year ended June 30, 2011. Net income increased an impressive 298% with net

income at $ 2,529,725 for the period ended December 31, 2011 as compared to net income of
$848,983 for period ending December 31, 2010. The company also has a healthy cash position
with cash balance of $ 735,762 as at December 31, 2011. This is despite the fact that the
company added new equipment worth $ 2,122,535 during this period. This addition was made
entirely from internal accruals and it is the commitment of the management that all future
additions to the asset base would be from internal accruals only without any further dilution or
debt increases. There are no plans for dilution over the next 18 months.

The company’s order position is also healthy and management envisages total revenues
about 10% higher than previously projected in August, 2011. This is mainly due to the fact
that the Indian pharmaceutical industry is currently focusing on exports to the USA and a lot of
companies are looking to get their products approved by the FDA for US sales. All these are
potential clients and our Company has an advantage that due to the facilities being based in
India, we are able to deliver quick feedback to our clients and there is a degree of comfort
resulting in order generation.

In the current period, with the additions to equipment, now the company can take on an added
variety of jobs especially in the area of drug testing. Though there no commitments outstanding
for purchase of assets, the management plans to add more testing and other equipment in the
current year, with all expenditures being met from internal accruals only.

These additions to equipment have resulted in gross margins increasing to 32.55% from 31.46% in the
corresponding period of 2010. Though, operating margins increased by 0.53%, net income
increased by a phenomenal 298% over December 31, 2010.