The Directors have pleasure in presenting their 32nd Annual Report
 together with the Audited Accounts of the Company for the 15 Months
 period ended March 31, 2011.
 
 Financial Results
 
                                                          (Rs. in Mio)
 
 Particulars                                 2010-11            2009
                                          (15 months)*
 
 Sales and Other Income                         6003            4024
 
 Profit Before Tax                              1010             884
 
 Provision for Taxation
 
 -Income Tax                              415             310
 
 - Adjustment for Deferred Tax            (46)             (6)
 
 - Fringe Benefit Tax                            369        3    307 
 
 Profit after Taxation                           641             577 
 
 Surplus brought forward from the 
 previous year                                   948             409 
 
 Total amount available for 
 appropriation                                  1589             986
 
 Appropriation made by Directors
 Transfer to General Reserve                      64              58
 
 Transfer from Debenture Redemption Reserve        _            (312)
 
 Appropriation recommended by Directors
 
 Dividend                                        250             250
 
 Tax on proposed Dividend                         40              42
 
 Surplus carried over                           1235             948
 
 Consequent to the change in the Accounting year of the Company from
 January-December to April-March, the last accounting period was for
 a period of 15 months.
 
 Dividend
 
 The Directors are pleased to recommend payment of a Dividend of 500%
 (Rs.10/- per Equity share of the face value of Rs.2/- each), which, if
 approved by Members at the Annual General Meeting will involve an
 outflow of Rs.250 Mio towards Dividend and ^40
 
 Mio as Dividend Distribution Tax resulting in a total outflow of Rs.290
 Mio representing distribution of 45% of the net profits of the Company
 for the year.
 
 Sales and Marketing
 
 he Company registered sales of Rs.5339.2 Mio (excluding export sales) in
 the 15 months period ended March 31, 2011.
 
 The Company grew by 14% during the calendar year 2010 (Jan - Dec 2010).
 However, in Quarter 1 of 2011 (Jan - Mar 2011) the Company grew by 35%
 over same period last year.
 
 The growth during the period under review, was broad based with all the
 therapy areas registering good growths.
 
 The Company has a strong portfolio of established and originator brands
 well complemented with the launch of branded generics products in 2009
 and 2010. Our power brands - Crestor, Seloken, Selomax, Meronem,
 Neksium and Linctus Codeinae witnessed robust growth and provided
 strong momentum to the Companys performance. The AstraZeneca original
 research brand, Crestor (Rosuvastatin) launched in 2009 (in
 Cardiovascular Therapeutic Area) was a huge success and achieved over
 Rs.100 Million sales in the first 9 months of 2010.
 
 Branded Generics products launched in 2009 and 2010 made significant
 contribution to the Companys sales and growth. Seloram and Actamase
 recorded strong growth and are the leading brands in their respective
 categories.  The Company launched
 
 6 new products - Olways and Valfect in the Cardiovascular therapy area,
 Diprivan, Naropin and Enclere in the Infection therapy area and
 Bricacef in the Respiratory therapy area.
 
 During the Financial Year 2011-12, your Company will focus on driving
 growth in its established power brands along with launch of new branded
 generics products in its key therapy areas. In the coming years, the
 Companys product portfolio and performance will be further
 strengthened by the launch of AZ patented innovator products.
 
 Sales Force Effectiveness (SFE)
 
 SFE team partnered with business units (BU) in aiding the Companys
 performance by driving new sales training initiatives & embedding SFE
 metrics across a newly recruited field Force.
 
 A large scale segmentation & targeting (S&T) exercise was planned and
 executed to assist the primary care BU expand their reach and customer
 coverage. Restructuring the speciality care (SC) team into sub-teams
 and driving a new S&T strategy for Cardiovascular (CV) team helped
 drive business efficiencies.
 
 By imparting cutting edge training to our field force has enhanced the
 usage of our e-learning platform AZLEARN and also improved the
 efficiency in reporting and communication. To manage the challenge of
 selling many brands together with the new launches, enhanced selling
 skill models like Multi Product Selling (MPS) were introduced.
 
 Medical, Regulatory and Clinical Trials
 
 During the period under review, medical and regulatory support was
 provided for the launch of several new products.
 
 The Regulatory team ensured early registration of new products and also
 obtained additional indication approvals and product registration
 renewals in time.
 
 Strategic medico-marketing initiatives such as setting up and
 conducting of Advisory Board meetings, Web casts, scientific meetings
 and symposium in order to disseminate scientific knowledge to the
 medical fraternity were undertaken. Pharmacovigilance workshops were
 conducted across the country with a view to increasing the awareness on
 adverse event reporting amongst the healthcare professionals.
 
 Your company saw increased participation in, and contribution to,
 pivotal global clinical trials as per Good Clinical Practice (GCP)
 norms for AstraZeneca pipeline and approved products in the therapy
 areas of Respiratory, Oncology, Cardiovascular and Diabetes in
 accordance with local and global standards.
 
 Manufacturing
 
 The Companys Operation team supported the launch of new products
 during the year. Productivity continues to improve both in terms of
 value & volume at its manufacturing plant.
 
 The Company also continued with its initiatives towards better-cost
 management through purchasing efficiency, improved Overall Equipment
 Effectiveness and pack rationalizations. Product pack security features
 were introduced as an anti- counterfeit measure for the products
 manufactured at the plant.
 
 The manufacturing plant successfully underwent AstraZenecas global
 current Good Manufacturing Practices (cGMP) audit. Further the plant
 received AstraZenecas regional and global recognition for its
 operational excellence.
 
 The new tablet manufacturing facility involving an outlay of Rs.700 Mio,
 is expected to be completed by end of this year as per schedule- Safety
 Health and Environment (SHE)
 
 During the period under review the Companys manufacturing site was
 re-certified for Occupational Health Safety Assessment Series (OHSAS)
 18001 for health and safety and ISO 14001 for the environment by M/s
 Germanischer Lloyd, Germany. The site achieved 2 million accident free
 man hours during the period under review.
 
 Highest safety standards are being observed at the construction site
 for the new Tablet manufacturing facility.
 
 All suppliers of formulations and Active Pharmaceutical Ingredients
 (APIs) are regularly evaluated on AstraZenecas global quality and
 safety standards.
 
 Human Resources and Employee Relations
 
 Attracting, retaining and developing talent continued to be a focus
 area for the Company. The increased focus on capability enhancement and
 employee engagement had a positive impact on talent retention as
 reflected in the lower attrition levels. The Company has a total
 employee strength of 1705.
 
 A settlement with field union was signed on February 4, 2011, for three
 years effective January 1, 2010.  Employee Relations continued to be
 cordial at all levels.
 
 Factory Land at Yelahanka
 
 In the last Directors Report members were informed that the National
 Highways Authorities of India (NHAI) had acquired a portion of the
 factory land at Yelahanka for expansion of the Hyderabad - Bangalore
 Highway. The Special Land Acquisition Officer (SLAO) had awarded
 compensation of Rs.23,709,554/- for the said acquisition. The SLAO
 reduced the above amount of compensation awarded to Rs.4,98,879/-, on the
 basis of a direction received from the Government of Karnataka. The
 Company has not accepted the amended award and has disputed the same.
 The Company has invoked the arbitration provisions under the National
 Highways Act, 1956. The Company has further filed a Writ Petition
 challenging the above direction given by the Government of Karnataka
 and for directing the SLAO to pay compensation as per the original
 amount awarded.
 
 The Writ Petition filed by the Company is part heard before the Honble
 High Court of Karnataka.
 
 In this connection reference may be made to note No.2 in Schedule 17 of
 the Accounts for the 15 months period under review.
 
 Open Public Offers made by Astra Pharmaceuticals AB, Sweden to the
 Shareholders of the Company Members have been advised of the Writ
 Petitions filed by the under mentioned shareholder challenging the
 First Open Public Offer made pursuant to the Letter of Offer dated May
 11, 2002, by Astra Pharmaceuticals AB, Sweden (APAB). The status of the
 same as of March 31, 2011 continues to remain unchanged, in that the
 suit filed by Ms.  Annie Koshy in the Kerala High Court, Kochi, is
 still pending hearing before the Court.
 
 Directors Responsibility Statement
 
 Pursuant to Section 217 (2AA) of the Companies Act, 1956 (the Act), the
 Board of Directors states that- (A) In the preparation of the Companys
 Annual Accounts, the applicable accounting standards have been followed
 and proper explanations have been provided for material departures,
 wherever applicable, (B) It has selected such accounting policies which
 have been applied 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 the end of the 15 Months period
 ended March 31, 2011 and of the profit of the Company for that period,
 (C) It has taken proper and sufficient 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, and (D) The financial
 statements have been prepared on a going concern basis.
 
 Boards Response to Audit Observations
 
 The observation made by the Auditors under para (xxi) of the annexure
 to the Auditors Report is self explanatory. The management has since
 then strengthened the controls to prevent the occurance of such
 incidents in future.
 
 Information Pursuant to Section 217 of the Companies Act, 1956
 
 Information required under Section 217 (1)(e) of the Companies Act,
 1956, read with the Companies (Disclosure of Particulars in the Report
 of the Board of Directors) Rules, 1988, is given in Annexure-I and
 forms part of this Report.
 
 Information required under Section 217 (2A) of the Companies Act, 1956,
 read with the Companies (Particulars of the Employees) Rules, 1975,
 forms part of this Report. However, as per the provisions of Section
 219(1)(b)(iv) of the Companies Act, 1956, the Report and the Accounts
 are being sent to all shareholders, excluding the Statement of
 Particulars under Section 217(2A). Any shareholder, desirous of
 obtaining a copy of this Statement, may kindly write to the Company
 Secretary.
 
 Corporate Social Responsibility
 
 Your Company continues to contribute meaningfully to local communities
 through charitable donations, sponsorships and other initiatives that
 help make a difference to peoples lives.
 
 The Company continued its community activities focused on making the
 Katigenahalli Primary School, Yelahanka, a better place to study for
 the children. Your Company also continues to contribute to the monthly
 operating cost of the emergency ambulance service Operation
 Sanjeevini run by the Comprehensive Trauma Care Consortium, Bangalore.
 
 Your Company, with a view to address the need for adolescent healthcare
 amongst the urban poor, embarked on a 3 year program in partnership
 with PLAN India (a multinational NGO) to improve the health of
 adolescents in five disadvantaged communities of Delhi. The program
 will reach around 31,000 households and indirectly influence an
 estimated population of 190,000, including policy makers, educators,
 and health professionals in the communities in which these young people
 live.  This program aims at dissemination of information on healthcare,
 hygiene and sanitation to create awareness amongst adolescents.
 
 Corporate Governance Report
 
 The Company has taken steps to ensure that all mandatory provisions of
 Corporate Governance as prescribed by the Listing Agreement of the
 Stock Exchanges on which the Company shares are listed, have been
 complied with.
 
 The Management Discussion and Analysis is attached as Annexure-ll and
 forms part of this Report.
 
 A Report on Corporate Governance forming part of the Directors Report,
 along with a certificate from the Statutory Auditors confirming
 compliance, is annexed as Annexure-lll and forms part of this Report.
 
 Directors
 
 Mr. Francis McNamara III resigned as Director with effect from
 September 30, 2010. The Board places on record its appreciation of the
 services rendered and contribution made by Mr. Francis McNamara III to
 the Company, during his tenure as a Director.
 
 In accordance with the provisions of the Companies Act 1956 and the
 Companys Articles of Association,
 
 Mr. D. E. Udwadia & Mr. Ian Brimicombe, Directors will retire by
 rotation at the ensuing Annual General Meeting. Being eligible, they
 offer themselves for re- election. Your Board of Directors has
 recommended their re-election.
 
 Auditors
 
 The present Auditors M/s. BSR & Co., Chartered Accountants, retire at
 the ensuing Annual General Meeting. However, being eligible, they offer
 themselves for re-appointment.
 
 Acknowledgements
 
 Your Directors take this opportunity to thank AstraZeneca
 Pharmaceuticals AB, Sweden and AstraZeneca PLC, for their continued
 support to the Companys operations.
 
 Your Directors thank the Central and the State Governments, various
 other Statutory and Regulatory Authorities, the Companys Bankers, the
 Medical Profession and Trade, Vendors & Business Associates and the
 Shareholders for their continued interest in, and valued support to the
 Companys operations.
 
 Your Directors place on record their sincere appreciation of the
 significant contribution made and the continued support extended, by
 the employees at all levels to the Companys operations during the
 period under review.
 
                                   On behalf of the Board of Directors
 
                                                           D E UDWADIA
 
                                                              Chairman
 
 Place: Bangalore
 
 Date: May 13, 2011