Dear Members,
 
 The Directors take pleasure in presenting the Seventy-Fifth Annual
 Report of the Company along with the Audited Accounts for the financial
 year ended 31st March 2011.
 
 Financial Summary
 
 Year ended                                                Year ended
 
 31st March 
 2010                                                      31st March 
                                                                 2011
 
      5,765    Sales and other income                           6,483
 
      1,230    profit before exceptional item and tax           1,151
 
         95    Add: Exceptional item                                -
 
      1,325    profit before tax                                1,151
 
      1,081    profit after tax                                   960
 
        955    Surplus brought forward from last balance sheet  1,699
 
      2,036    profit available for appropriation               2,659
 
               Appropriations:
 
          -    Interim dividend                                    64
 
        160    Final dividend                                     160
 
         27    Tax on dividend                                     37
 
        150    Transfer to general reserve                        100
 
      1,699    Surplus carried forward                          2,298
 
                                                      Rupees in crore
 
 DIVIDEND
 
 On the occasion of its 75th anniversary, Cipla declared a special
 interim dividend of 80 paise per equity share (face value of Rs.2 each)
 in August 2010 amounting to Rs.74.90 crore (inclusive of dividend tax).
 
 The Directors recommend a final dividend of Rs.2 per share on
 80,29,21,357 equity shares of Rs.2 each for the year 2010-11 amounting to
 Rs.160.58 crore.
 
 The total dividend payout for the year 2010-11 inclusive of dividend
 tax would aggregate to Rs.261.53 crore.
 
 MANAGEMENT REVIEW: 2010-11 Industry Structure and Development
 
 The financial year 2010-11 marked a resurgence in growth post the f
 nancial crisis. Higher investment spending, specially in the emerging
 markets, is pushing growth in the global economy. As a result, several
 countries are gradually returning to normal macroeconomic policies.
 However, the economic health in parts of Europe and the fiscal trends
 in some other countries is cause for concern and continues to impact
 the world economy.
 
 The forecast for the Indian economy is positive with growth expected to
 touch 8.5 per cent in the current fiscal year. Yet, constant inflation
 in the country is taking its toll and rising global commodity prices is
 only compounding the problem.
 
 The pharmaceutical industry in India retains its position of strength
 as the pharmacy capital of the world. It supplies an estimated
 one-third of all global pharmaceutical produce in terms of volume. In
 the financial year 2010-11, the Indian pharmaceutical industry grew
 more than 14 per cent, according to ORG IMS, though this growth was
 mainly driven by the top 50 companies.
 
 A growing trend was that more Indian pharmaceutical companies focussed
 on semi-urban and rural markets for incremental growth opportunities.
 During the year, the industry also witnessed Indian pharma companies
 selling out to the multinationals.
 
 Performance Review
 
 During the year under review, the Company''s total income from
 operations increased by 12 per cent. Domestic turnover rose by 12 per
 cent while export income went up by 16 per cent. profit after tax for
 the year was Rs.960 crore compared to Rs.1081 crore last year, excluding
 the one-time sale of the I-pill brand last year.
 
 This year, there was a dip in operating margins of about 3 per cent, as
 a percentage of total revenue. This was mainly due to lower technical
 fees (Rs.60 crore compared to Rs.150 crore last year), as the development
 stage of several projects reached completion and the products have
 either been commercially launched or will be launched by the Company''s
 partners. Another major reason for the decline is that the Indore SEZ
 factory is in its first year of operations and is still to reach its
 optimum capacity levels. Besides, the Rupee has appreciated compared to
 the US dollar which has in turn reduced earnings by about 4 per cent.
 
 Products
 
 The Company introduced many new drugs and formulations during the year.
 Some significant products are mentioned below:
 
 - Entavir (entecavir tablets) - antiviral for hepatitis B
 
 - Febucip (febuxostat tablets) - drug for gout
 
 - Flosoft (fluorometholone acetate ophthalmic suspension) - topical
 steroid for eye inflammation
 
 - Foracort (formoterol and budesonide autohaler) - asthma controller
 therapy in a new easy-to-use breath actuated inhaler
 
 - Furamist AZ (fluticasone furoate and azelastine hydrochloride nasal
 spray) - new combination nasal spray for allergic rhinitis
 
 - Imudrops (cyclosporine eye drops) - immunomodulatory drug for severe
 dry eye
 
 - Lacsyp (lactitol monohydrate liquid syrup) - lactulose analogue for
 constipation and hepatic encephalopathy
 
 - Levolin (levosalbutamol tartarate autohaler) - asthma reliever in an
 easy-to-use breath actuated inhaler
 
 - Montair FX (montelukast and fexofenadine tablets) - antiallergic
 combination for rhinitis
 
 - Moxicip KT (moxif oxacin and ketorolac eye drops) - topical
 combination for eye inflammation
 
 - Panstal (pancreatin capsules) - digestive enzyme for pancreatic insufi
 ciency
 
 - Paracip (paracetamol infusion) - for pain and fever management in
 intensive care units and hospitals
 
 - Phosome (liposomal amphotericin injection) - high potency antifungal
 in a new targeted drug delivery system
 
 - Pirfenex (pirfenidone tablets) - the first and only approved drug for
 idiopathic pulmonary f brosis (IPF)
 
 - Prandial M (voglibose and metformin tablets) - combination
 antidiabetic
 
 - Prasuvas (prasugrel tablets) - antiplatelet drug
 
 - Pulmopres (tadalaf l tablets) - the first once-daily therapy for
 pulmonary arterial hypertension
 
 - Rixmin (rifaximin tablets) - locally acting antibacterial for
 infectious diarrhoea
 
 - Rokfos (zoledronic infusion) - once-yearly treatment for osteoporosis
 
 - Rosulip-F (rosuvastatin and fenof brate tablets) - combination drug
 for mixed dyslipidemia
 
 - Soranib (sorafenib tablets) - breakthrough drug for liver cancer
 
 - Sornip (boswellic acid cream) - topical non-steroidal formulation for
 psoriasis
 
 - Synthivan (atazanavir sulphate and ritonavir tablets) - two-drug
 combination antiretroviral for HIV/AIDS
 
 - Triohale (formoterol fumarate, ciclesonide and tiotropium bromide
 rotacaps) - world''s first triple-drug dry powder inhalation for COPD
 
 - VC-15 (vitamin C serum) - antioxidant for dermatological conditions
 
 - Vertipress (betahistine hydrochloride tablets) - therapy for vertigo
 
 - Xovatra (travoprost eye drops) - prostaglandin analogue for glaucoma
 
 - Zolmist (zolmitriptan nasal spray) - rapid-acting drug for migraine
 
 Manufacturing Facilities
 
 In April 2010, the Company commenced commercial production of
 pharmaceutical formulations at the Special Economic Zone (SEZ) project,
 at Indore, Madhya Pradesh.  This project includes facilities for the
 manufacture of aerosols, respules, liquid orals, pre-filled syringes
 (PFS), nasal sprays, large volume parenterals (LVP), eye drops, tablets
 and capsules. The total investment for this project is about Rs.900
 crore.
 
 The Company is setting up API facilities at Bengaluru and Kurkumbh. It
 is also upgrading the API facilities at Patalganga. The total
 investment for these projects is about Rs.400 crore.
 
 Regulatory Approvals
 
 Several dosage forms and APIs manufactured at the Company''s plants
 continued to enjoy the approval of major international regulatory
 agencies. These agencies included the US FDA, MHRA (UK), PIC (Germany),
 MCC (South Africa), TGA (Australia), Department of Health (Canada),
 ANVISA (Brazil), SIDC (Slovak Republic), Ministry of Health (Kingdom of
 Saudi Arabia), the Danish Medical Agency and the WHO.
 
 Opportunities
 
 Domestic Markets
 
 According to ORG IMS, Cipla is one of the largest pharmaceutical
 companies in India. New technology and new products, including dosage
 forms, which are being introduced every year, offer significant growth
 opportunities for the Company.
 
 Cipla is increasing its focus in various segments to meet the growing
 market needs in the future. The Company is giving a renewed focus to
 two therapeutic segments namely, oncology and neuropsychiatry.
 
 The Company''s venture on biotechnology products is making significant
 progress and the regulatory process is underway.
 
 International Markets
 
 Cipla''s international business continues to be a major revenue driver
 for the Company. During the year under review, almost 55 per cent of
 the total income originated from international markets. As a result,
 Cipla contributed significant net foreign exchange earnings to the tune
 of USD 420 million.
 
 The Company is in the process of consolidating and rationalising its
 international business and strategies are being reviewed to optimize
 value for its technology and product range.
 
 The Company continues to forge partnerships and alliances with large
 generic pharmaceutical companies for product development and supply in
 developed markets.
 
 Cipla continues its humanitarian mission of making afiordable medicines
 available to the entire world. It is today the largest single supplier
 of HIV and anti-malarial drugs in the world in terms of volume.
 
 Threats, Risks, Concerns Patents
 
 The Company is currently involved in a number of patent litigations at
 the pre grant, post grant, appellate board and at the level of the
 judicial courts. As anticipated, the number of patent litigations has
 gone up dramatically post Patents Amendment Act, 2005 and more so
 because companies are f ling frivolous patent applications and multiple
 applications with almost identical claims. The Appellate Board is
 saddled with a huge backlog of pending cases. Cipla, so far, has been
 successful in challenging a number of patent applications at different
 stages in the grant process.
 
 The government is yet to decide conclusively on the issues of Data
 Exclusivity and Data Protection which are both Trips Plus measures.
 The European Union government is pushing for Trips Plus provisions and
 dilution of the Patents Act through bilateral agreements. There is a
 lot of uncertainty with regard to the government''s position on these
 two vital issues.
 
 Taking advantage of the new patents regime, the Company is witnessing
 an increase in the number of patented products being launched in India
 by multinational companies. A number of these products have been
 launched at exorbitant prices. Cipla has sought a voluntary license on
 anti-HIV drugs, Raltegravir and Rilpivirine and will continue to pursue
 the in-licensing route to bring the latest products to the Indian
 consumers at afiordable prices. The Government of India must also
 clearly spell out its policy on how it plans to control the prices of
 patented products which enjoys a monopoly.
 
 India is considered the pharmaceutical hub of the world and the
 Government of India must try to preserve and promote the Indian
 industry in every which way.
 
 In the light of these threats, Cipla is continuously fighting these
 issues on various fronts, not only to protect the interest of the
 Company but also of the Indian patients.
 
 Drug Pricing
 
 It is well over 15 years since the last drug policy was implemented
 which resulted in the Drugs Price Control Order 1995. The Government
 should re-haul the drug policy and bring it in line with the current
 market conditions. It must be fair, transparent and non-ambiguous. The
 drug policy should only seek to bring under price control, drugs which
 are not manufactured in India and those which enjoy 100 per cent
 monopoly.
 
 The Indian market is highly dynamic and competitive and it is believed
 that market competition will ensure that drug prices are within the
 reach of the common man. Drug prices today in India are the lowest in
 the world even when compared to neighbouring countries like Bangladesh,
 Pakistan, etc.
 
 As per newspaper reports, it appears that the Government of India is
 planning to bring under price control all the drugs which are listed in
 the National List of Essential Medicines.  More than 350 drugs are
 expected to be covered. This will have an adverse impact on the Indian
 Pharmaceutical Industry which is already reeling under high inf
 ationary pressures. The proposed move will destroy the country''s
 self-sufficiency in medicines.
 
 Cipla has some pending legal cases on account of alleged overcharging
 in respect of certain drugs under the Drug Price Control Order. The
 aggregate amount of the demand notices received is about Rs.1230 crore
 (inclusive of interest). The Company has been legally advised that
 based on the directions given by the Supreme Court, there is no
 probability of the demand becoming payable by the Company. Any
 unfavourable outcome in these proceedings could have an adverse impact
 on the Company.
 
 Regulatory Approvals
 
 Our manufacturing facilities are regularly monitored and approved by
 various regulatory authorities across the globe.  These authorities
 have become more vigilant and strict with respect to compliance.
 Periodically, the US FDA conducts routine audits of all approved
 facilities and accordingly several of our plants including Goa,
 Patalganga, Kurkumbh and Bengaluru were inspected by the US FDA.
 Currently, all facilities continue to be approved by the US FDA.
 
 Exchange Rate Movements
 
 During the year, the Indian Rupee appreciated by more than 3-4 per cent
 compared to the US Dollar. Such severe fluctuations in foreign currency
 exchange rates can have a significant impact on the Company''s
 operations and financial results.
 
 Safety Measures
 
 The Company believes in Safety first – whether for its patients, plants
 and employees. Periodical safety audits are conducted at all units and
 regular reviews are done by safety committees with an objective of
 enhancing safety measures.
 
 As always, the Company kept up high standards of occupational health,
 safety and environment preservation practices at all its manufacturing
 units.  Various health, safety and environment awareness programmes
 were organised for employees, villagers and school children living
 around the Company''s units at Sikkim, Baddi (Himachal Pradesh),
 Patalganga (Maharashtra), Kurkumbh (Maharashtra), Verna (Goa) and
 Bengaluru (Karnataka) with the objective of achieving and maintaining
 safety, health and environment standards. Training was imparted to
 school children, teachers and nearby villagers on road safety, home
 safety, hygiene and environment.
 
 On World Environment Day and Earth Day, employees and government
 authorities went on a ‘Green Drive'' at the factory premises to plant
 trees and reduce pollution. The Company continued to maintain modern,
 well-designed effluent treatment plants at its factories.  Treated water
 from these zero discharge facilities is used for maintaining a green
 belt at all the locations.
 
 Internal Control Systems
 
 The Company''s internal control procedures ensure compliance with
 various policies, practices and statutes in keeping with the
 organisation''s pace of growth and increasing complexity of operations.
 Cipla''s internal audit team carries out extensive audits throughout the
 year, across all functional areas and submits its reports to the Audit
 Committee of the Board of Directors.
 
 Human Resources
 
 Particulars of employees required to be furnished under section 217(2A)
 of the Companies Act, 1956, read with the Companies (Particulars of
 Employees) Rules, 1975 as amended, form part of this report. Any
 shareholder interested in obtaining a copy may write to the Company
 Secretary at the Registered office of the Company.
 
 CORPORATE SOCIAL RESPONSIBILITY
 
 On the occasion of Cipla''s Platinum Jubilee, the Company announced
 setting up of the Cipla Foundation by contributing a sum of Rs.5 crore.
 The Foundation will aim to provide care and financial support to people
 in need of healthcare in India.
 
 The Cipla Palliative Care and Training Centre in Pune continues to
 provide care to terminally ill cancer patients. As of date, the Centre
 has provided comfort and solace to more than 7000 patients. The focus
 is on reaching out to more cancer patients who need palliative care and
 on integrating palliative medicine with curative therapy.
 
 The Cipla Palliative Care and Training Centre is recognised as a
 training resource by the Indian Association of Palliative Care (IAPC).
 Besides an IAPC certified training course for doctors and nurses,
 learning modules in palliative care are available for caregivers,
 volunteers and other interested groups. The Centre also runs a school
 for training nursing assistants which is offered free-of-charge to
 young boys and girls from economically weaker sections with the
 objective of providing an opportunity for skill development, leading to
 gainful employment.
 
 Being in the forefront of the crusade against HIV/AIDS, the Company has
 supported Manavya, a Pune based organization which runs a home for
 children with HIV infection. Manavya operates a mobile dispensary in
 villages on the outskirts of Pune and this project is fully funded by
 the Company.
 
 In addition, the Company continued to support several community
 welfare, health and educational activities essentially in communities
 surrounding the Company''s factory locations, both directly and through
 its charitable trusts by providing healthcare education, improvement of
 community infrastructure, scholarships, etc.
 
 CORPORATE MATTERS Responsibility Statement
 
 Pursuant to section 217(2AA) of the Companies Act, 1956 it is confirmed
 that the Directors have:
 
 i.  followed applicable accounting standards in the preparation of the
 annual accounts;
 
 ii. selected such accounting policies and applied them consistently and
 made judgements and estimates that are reasonable and prudent so as to
 give a true and fair view of the state of Affairs of the Company at the
 end of the financial year ended 31st March 2011 and of the profit of
 the Company for that period;
 
 iii. taken proper and sufficient care for maintenance of adequate
 accounting records in accordance with the provisions of the Companies
 Act, 1956 for safeguarding the assets of the Company and for preventing
 and detecting fraud and other irregularities; and
 
 iv.  prepared the annual accounts on a going concern basis.
 
 Subsidiary Companies
 
 In accordance with circular no. 2/2011 dated 8th February 2011 issued
 by the Ministry of Corporate Affairs, the Balance Sheets, including
 annexures and attachments thereto of the Company''s subsidiaries, are
 not being attached with the Annual Report of the Company. The annual
 accounts of the subsidiary companies and the related detailed
 information will be made available to any member of the Company seeking
 such information. These documents will also be available for inspection
 by any member at the Registered office of the Company and that of the
 respective subsidiary companies. The consolidated financial statements
 presented in this Annual Report include financial information of the
 subsidiary companies. A statement containing information on the
 Company''s subsidiaries is included in this Annual Report.
 
 During the financial year ended 31st March 2011, the following
 companies were acquired as subsidiaries/step-down subsidiaries: Cipla
 (Mauritius) Limited, Cipla (UK) Limited, Cipla-Oz Pty Limited, Four M
 Propack Private Limited, Goldencross Pharma Private Limited, Medispray
 Laboratories Private Limited, Meditab Holdings Limited, Meditab
 Pharmaceuticals South Africa (Pty) Limited, Meditab Specialities New
 Zealand Limited, Meditab Specialities Private Limited, Sitec Labs
 Private Limited and STD Chemicals Limited.
 
 Corporate Governance
 
 The Company is committed to good corporate governance practices. The
 report on corporate governance as stipulated under Clause 49 of the
 Listing Agreement forms part of this report.
 
 By and large, the Company is already complying with the recommendations
 of Corporate Governance Voluntary Guidelines 2009 issued by the
 Ministry of Corporate Affairs.
 
 Disclosure of Particulars
 
 As required by the Companies (Disclosure of Particulars in the Report
 of Board of Directors) Rules, 1988, the relevant information and data
 are annexed to this report.
 
 Directors
 
 The Company deeply regrets the sad demise of Mr. Amar Lulla on 22nd
 April 2011. The Board of Directors would like to place on record its
 sincere gratitude to Mr. Amar Lulla and appreciate his pioneering ef
 orts during his association with the Company for over three decades. He
 has been one of the key persons who played a significant role in
 enabling the Company to attain its current position.
 
 Mr. S. Radhakrishnan was appointed as an Additional Director with ef
 ect from 12th November 2010 and holds office until the ensuing Annual
 General Meeting. He was appointed as Whole-time Director for a period
 of five years with effect from 12th November 2010, subject to the
 approval of shareholders at the ensuing Annual General Meeting.  Mr. S.
 Radhakrishnan is a qualified Chartered Accountant, who has been with
 the Company for over 26 years and has vast experience in financial,
 commercial, legal and allied areas.
 
 Mr. S.A.A. Pinto resigned from the Board of Directors effective 11th
 November 2010 due to health reasons. The Directors place on record
 their appreciation of his contribution as a member of the Board.
 
 Mr. M.R. Raghavan and Mr. Pankaj Patel retire by rotation and, being
 eligible, offer themselves for re-appointment.  A brief resume of the
 said directors is provided in the Notice.
 
 Cost Auditors
 
 Pursuant to the provisions of section 233B of the Companies Act, 1956
 and with the prior approval of the Central Government, Mr. D.H. Zaveri
 (Fellow Membership No. 8971) practising Cost Accountant, has been
 appointed to conduct audit of cost records of bulk drugs and
 formulations for the year ended 31st March 2011. The Cost Audit Reports
 would be submitted to the Central Government within the prescribed
 time.
 
 Pursuant to Rule 5 of the Cost Audit Report Rules, Cost Audit Reports
 for bulk drugs and formulations for the year ended 31st March 2010 were
 f led with the Central Government on 29th September 2010 and 30th
 September 2010 respectively.
 
 Auditors
 
 Messrs. V. Sankar Aiyar & Co and Messrs. R.G.N. Price & Co., joint
 statutory auditors of the Company, retire at the conclusion of the
 forthcoming Annual General Meeting and are eligible for re-appointment.
 
                                                On behalf of the Board,
 
                                                          Y. K. Hamied
 
 Mumbai, 29th June 2011                   Chairman & Managing Director