The Directors have pleasure in presenting the 61st Annual Report and
 Audited Accounts for the year ended 31st March, 2011.
 
 FINANCIAL RESULTS
 
                                         For the year       For the year
                                      ended 31.3.2011    ended 31.3.2010
                                         (Rs. crores)       (Rs. crores)
 
 Sales and other Income (net of Excise 
 duty & Sales tax)                            1889.54            1565.50
 
 Profit before financial cost, depreciation 
 & Foreign Exchange translations 
 Loss / (Gain)                                 386.93             344.65
 
 Less : Financial cost                          31.14              32.38
 
 Depreciation and Amortisation                  55.43              46.33
 
 Loss / (Gain) on foreign exchange 
 translations                                 (43.34)             (5.79)
 
 Profit before tax                             343.70             271.73
 
 Less : Provision for taxation
 
 Current                                        73.25              47.30
 
 Deferred                                        1.42              14.20
 
 Short / (Excess) provision of earlier years     3.70               1.04
 
 Profit after tax (before exceptional item)    265.33             209.19
 
 Exceptional item
 
 Provision for investment in subsidiaries        9.96                  -
 
 Net Profit                                    255.37             209.19
 
 ADJUSTMENTS
 
 Balance of profit brought forward             152.70             151.95
 
 Amount available for appropriation            408.07             361.14
 
 YOUR DIRECTORS RECOMMEND THE 
 FOLLOWING APPROPRIATIONS
 
 Debenture Redemption Reserve                   15.00              15.00
 
 General Reserve                               200.00             152.54
 
 Interim dividends                              25.13              22.49
 
 Proposed final dividend                        15.08              12.52
 
 Proposed dividend of previous year 
 reversed on shares bought back                     -             (0.01)
 
 Tax on dividend                                 6.62               5.90
 
 Surplus transferred to Balance Sheet          146.24             152.70
 
                                               408.07             361.14
 
 
 
 
 SUBSIDIARY COMPANIES
 
 The Companys wholly owned subsidiary Company Laboratories Ipca Do
 Brasil Ltda, Brazil is in the process of being voluntarily wound-up.
 
 As communicated to the Company by the Brazilian Attorney, all Brazilian
 regulatory approvals except that of ANVISA are received for Company
 winding-up. The ANVISA approval is expected shortly.
 
 In accordance with the general circular issued by the Ministry of
 Corporate Affairs, Government of India under section 212 of the
 Companies Act, 1956, copy of the Balance Sheet, Profit and Loss
 Account, Report of the Board of Directors and Auditors of the Companys
 subsidiaries have not been attached with the Balance Sheet of the
 Company. Any member interested in obtaining the same may write to the
 Company Secretary at the Corporate Office of the Company. These
 documents are available for inspection by Members at the Registered
 office of the Company and will also be placed before the Annual General
 Meeting.
 
 However, as required the financial data of the subsidiaries have been
 furnished under ‘Details of Subsidiaries forming part of the Annual
 Report.  The annual accounts of the subsidiaries are also uploaded on
 the website of the Company.
 
 CONSOLIDATED FINANCIAL STATEMENTS
 
 In accordance with Accounting Standard AS-21, the audited consolidated
 financial statements are provided in the Annual Report.
 
 RESEARCH & DEVELOPMENT (R&D)
 
 The Company has always considered Research and Development (R&D) as
 crucial for the sustained growth of the Company. The global challenges
 for the Indian pharma industry at large have increased several folds in
 the face of the transition from process to product patent regime in
 India from 2005. The Company has stepped-up investments in R&D to keep
 pace with the changing domestic and global scenario.
 
 The Company has R&D centers at Mumbai, Ratlam, Athal and Indore, duly
 recognized by the Government of India, Ministry of Science and
 Technology, Department of Scientific & Industrial Research (DSIR).
 These R&D centers are also duly approved by the prescribed authority
 under Section 35 (2AB) of the Income Tax Act, 1961 for availing
 weighted tax benefit on the R&D expenditure.
 
 The company is in the process of setting up another new Research Centre
 at Kandivli, Mumbai for Biotech and other research & development
 activities.
 
 The Company has stepped up its R&D expenditure from Rs. 57.28 crores
 (3.71% of the turnover) in the previous year to Rs. 71.27 crores (3.82%
 of the turnover) in the year under report. The revenue R&D expenditure
 has increased to Rs. 57.04 crores as against Rs. 50.52 crores in the
 previous year.
 
 With qualified and experienced research scientists and engineers
 manning the research and development activities, the Company has
 focused its thrust on new and innovative process and product
 development for the manufacture of APIs with non-infringing processes.
 
 Apart from development of new dosage forms and drug delivery systems,
 improvement in processes and yield as well as cost reduction are also
 focus areas.
 
 EMPLOYEES STOCK OPTIONS SCHEME (ESOS)
 
 During the year under report, the Company allotted 3,53,750 fully paid
 up equity shares of Rs. 2/- each at an exercise price of Rs. 40/- to
 the option grantees on exercise of stock options granted on 23rd
 September, 2006, 72,500 fully paid up equity shares of Rs. 2/- each at
 an exercise price of Rs. 63/- to the option grantees on exercise of
 stock options granted on 29th October, 2007 and 52,500 fully paid up
 equity shares of Rs. 2/- each at an exercise price of Rs. 63/- to the
 option grantees on exercise of stock options granted on 11th November,
 2008.
 
 In view of these allotments, the Companys paid-up equity share capital
 increased to Rs. 25,14,12,810/- consisting of 12,57,06,405 equity
 shares of Rs. 2/- each.
 
 Disclosure pursuant to the provisions of SEBI (ESOS and ESPS)
 Guidelines, 1999 is annexed to this report as Annexure I.
 
 DIVIDEND
 
 Your Directors had declared 1st interim equity dividend of Re. 1/- per
 share (50%) at the meeting of the Board of Directors of the Company
 held on 22nd October, 2010 and a 2nd Interim equity dividend of Re. 1/-
 per share (50%) at the meeting of the Board of Directors of the Company
 held on 25th January, 2011. The said interim dividend was paid on 4th
 November, 2010 and 10th February, 2011, respectively, to those
 shareholders, whose names appeared on the register of members of the
 Company on 29th October, 2010 and 2nd February, 2011. Your directors
 are now pleased to recommend a final equity dividend of Rs. 1.20 per
 share (60%), making the total dividend recommended to Rs. 3.20 per
 share (160%) for the financial year under report as against 140% paid
 in the previous financial year. The dividend will be tax free in the
 hands of the shareholders.
 
 The dividend (inclusive of interim dividend already paid) amounting to
 Rs. 40.21 crores and dividend tax amounting to Rs. 6.62 crores, if
 approved at the ensuing Annual General Meeting, will be appropriated
 out of the profits for the year.
 
 DIRECTORS
 
 Dr. V. V. Subba Rao, Mr. M. R. Chandurkar and Mr. A. K. Jain, retire by
 rotation at the ensuing Annual General Meeting and, being eligible,
 offer themselves for re-appointment.
 
 During the year, Mr. A. K. Jain, the incumbent Executive Director was
 re-designated as the Joint Managing Director at the meeting of the
 Board of Directors of the Company held on 29th July, 2010.
 
 A brief note on Directors retiring by rotation and eligible for
 re-appointment is furnished in the Report on Corporate Governance.
 
 DIRECTORS RESPONSIBILITY STATEMENT 
 
 Your Directors confirm:
 
 i) that in the preparation of the annual accounts, the applicable
 accounting standards have been followed;
 
 ii) that your 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 at the end of the financial year March 31,
 2011 and of the profit of the Company for the year;
 
 iii) that your Directors had taken proper and sufficient care for the
 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;
 
 iv) that your Directors have prepared the annual accounts on a going
 concern basis.
 
 CORPORATE GOVERNANCE
 
 As per the requirement of listing agreement with the Stock Exchanges,
 the Company has complied with the requirements of Corporate Governance
 in all material aspects.
 
 A report on Corporate Governance together with a certificate of its
 compliance from Statutory Auditors, forms part of this report.
 
 FIXED DEPOSITS
 
 During the year under review, the Company has not accepted any fixed
 deposits.
 
 AUDITORS, AUDIT REPORT AND AUDITED ACCOUNTS
 
 M/s Natvarlal Vepari & Co., Chartered Accountants, retire as auditors
 and, being eligible, offer themselves for re-appointment.
 
 The Auditors Report read with the notes to the accounts referred to
 therein are self-explanatory and, therefore, do not call for any
 further comments.
 
 EMPLOYEES
 
 Information under Section 217 (2A) of the Companies Act, 1956 read with
 Companies (Particulars of 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 is being sent to
 all shareholders of the Company excluding the aforesaid information.
 Shareholders interested in obtaining this information may write to the
 Company Secretary at the Corporate Office of the Company.
 
 CORPORATE SOCIAL RESPONSIBILITY
 
 The Company is committed to good corporate citizenship. As a part of
 its corporate social responsibility, the Company continues to undertake
 a range of activities in respect of healthcare and education to improve
 living conditions of people living in the neighborhood of its
 manufacturing facilities.
 
 During the year under report, the Company has also supported healthcare
 and educational projects undertaken by charitable institutions and
 organizations.
 
 The Company considers safety, environment and health as the management
 responsibility. Regular employee training programmes are carried out in
 the manufacturing facilities on safety and environment.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 In accordance with the requirements of Section 217(1) (e) of the
 Companies Act, 1956 read with the Companies (Disclosure of Particulars
 in the Report of Board of Directors) Rules, 1988, statement showing
 particulars with respect to conservation of energy, technology
 absorption and foreign exchange earnings and outgo is given in the
 enclosed Annexure.
 
 ACKNOWLEDGEMENTS
 
 Your Directors place on record their appreciation for the continued
 co-operation and support extended to the Company by the Consortium of
 Banks and Financial Institutions. Your Directors also thank the Medical
 Profession, the Trade and Consumers for their patronage of the
 Companys products. Your Directors also place on record their profound
 admiration and sincere appreciation of the continued hard work put in
 by employees at all levels.
 
 
 
 
                                    For and on behalf of the Board
 
                                    R. S. Hugar 
                                    Chairman
 
 
 Mumbai
 24th May, 2011