Dear Members,
 
 The Directors have pleasure in presenting the 19th Annual Report of
 your Company along with the audited statement of accounts for the
 financial year ended March 31, 2011. The Report also includes the
 consolidated financial statements and the Management''s Discussion and
 Analysis Report in accordance with the guidelines on Corporate
 Governance. The highlights of the financial results for 2010-2011 are
 given below:
 
                                                     (Rs crore)
 
 Particulars                               Year ended 
                                           31.03.2011    Year ended 
                                                         31.03.2010
 
 Sales & operating income                     1663.34       1249.83
 
 Other income                                    7.60       1016.58
 
 Total expenditure                            1252.92       1422.55
 
 Gross profit                                  418.02        843.87
 
 Interest & finance charges                    115.76        241.23
 
 Gross profit after interest but before 
 depreciation and taxation                     302.26        602.64
 
 Depreciation                                  128.45        151.10
 
 Profit / (Loss) from ordinary activities 
 before exceptional items                      173.81        451.53
 
 Exceptional item                                   -          8.52
 
 Profit / (Loss) before tax                    173.81        460.05 
 
 Provision for taxation
 
 - Current & deferred tax                       14.32        128.71 
 
 Profit / (Loss) after tax                     159.48        331.34 
 
 Add: Surplus brought forward                   58.59         28.32 
 
 Surplus available                             218.08        359.66 
 
 Appropriations:
 
 - Transfer to general reserve                 150.00        200.00
 
 - Excess provision of dividend for earlier
 year written back                             (21.74)        (2.47)
 
 - Dividend                                     25.57         88.79
 
 - Tax on distributed profits                    4.15         14.75 
 
 Balance carried to balance sheet               60.09         58.59
 
 Performance
 
 During 2010-11, your Company achieved a turnover and operating income
 of Rs 1663.34 crore compared to Rs 1249.83 crore in 2009-10. The gross
 earnings before interest, depreciation and taxes stood at Rs 418.02
 crore for the current financial year. The gross earnings for the
 previous year included the profit on sale of undertaking and thus not
 comparable. After providing for interest expense of Rs 115.76 crore (Rs
 241.23 crore previous fiscal) and depreciation of Rs 128.45 crore (Rs
 151.10 crore previous fiscal), the profit before tax of the Company was
 Rs 173.81 crore.The net profit after tax stood at Rs 159.48 crore,
 compared to the net profit after tax of Rs 331.34 crore in the previous
 fiscal. However, figures for the previous year ended March 31, 2010 are
 not comparable as they include the sale consideration received by the
 Company on account of sale and transfer of its Injectable formulation
 business to Hospira in March 2010.
 
 Pharmaceuticals business
 
 The key highlight of our performance was the change in our business
 strategy where we moved away from a supply push approach to a demand
 pull business model. This is reflected in growing number of long-term
 contracts with large global pharmaceutical companies. These long term
 business agreements provide clear revenue visibility and allowed for
 improved business planning and management which strengthened business
 profitability and liquidity.
 
 Our API-supply arrangement performed significantly well, registering
 higher than expected business volumes. Our newly acquired front-end
 marketing Company, Karalex Pharma, LLC, in the US delivered heartening
 results.
 
 We expanded our contractual business with Hospira to supply API for
 their Add Vantage vials (patented technology) which will generate
 superior returns for your Company over the medium term. We settled five
 Para IV products, out of which four are FTF applications, which will
 allow us to market products in the US.  These represent attractive
 opportunities over the coming years.
 
 Dividend
 
 Your Directors recommend a 30% dividend (Rs 3/- per equity share of Rs
 10/- each) for the year ended 31st March 2011, subject to the approval
 of shareholders at the ensuing Annual General Meeting.  Under the
 Income Tax Act, 1961, the receipt of dividend is tax-free in the hands
 of the shareholders.
 
 Regulatory filings and approvals
 
 In the generic formulations domain, Orchid''s cumulative ANDA filings
 for the US market stood at 42. This includes 8 Para IV FTF
 (First–To–File) filings. The break-up of the total ANDA filings is 13
 in Cephalosporins segment and 29 in NPNC space. Few more ANDAs which
 are in the later stages of development are expected to be filed in
 ensuing quarters.
 
 In the EU region the cumulative count of Marketing Authorisations (MA)
 filings stood at 17. The break-up of the total MA filings is 9 in the
 Cephalosporin segment and 8 in the NPNC segment. A few more dossiers
 have been lined up for filing during 2011, based on the De-centralised
 Procedure (DCP) slots allotted by the respective Reference Member
 States (RMS) countries in the EU. This is likely to increase the
 cumulative filing count in the coming quarters.
 
 In the API domain, Orchid increased its cumulative filings of its US
 DMF count to 81. The break-up of the total filings is 27 in the
 Cephalosporin segment, 41 in NPNC segment, 2 in the Betalactam segment
 and 11 in the Carbapenems segment. In the European market space the
 cumulative filings of COS (Certificate of Suitability) count stood at
 21 which includes 14 in Cephalosporin segment, 6 in NPNC segment and 1
 in the Betalactam segment.
 
 Awards
 
 During the year, your Company was conferred with the following awards.
 Greentech Gold award 2011 in Pharmaceutical sector for outstanding
 achievement in safety management given by the Ministry of Health &
 Family Welfare, Government of India and Greentech Foundation for
 Orchid''s Alathur facility.
 
 Good Green Governance (G3) award by the Ministry of Water Resources &
 Minority Affairs, Government of India.
 
 Outstanding Achievement in Environment Management in the Chemical
 Sector was conferred by Greentech Foundation with a Silver Award 2010.
 
 - Siemens Ecovatives - IBN Live Award 2010 conferred in recognition of
 the Company''s commitment to the environment.
 
 - Bureau of Energy Efficiency (BEE) Certificate of Merit on Energy
 Efficiency was received by the Company''s Alathur API facility from the
 Ministry of Power, Government of India, New Delhi.
 
 - Excellent Energy Efficient Unit was conferred on the Company at the
 9th Energy Efficiency Summit 2010 by the Confederation of Indian
 Industries.
 
 Southern Region excellence award from Confederation of Indian
 Industries for meritorious achievement in Environment, Health & Safety
 (EHS) for the year 2010.
 
 Dr R J Rathi award for Environmental Pollution Control for the year
 2010 in Industries in Maharashtra for Orchid''s Aurangabad facility
 given by Mahratta Chamber of Commerce, Industries & Agriculture and Dr
 Ramvilas Rathi Charity Trust, Pune.
 
 Intellectual property
 
 During the year, Orchid continued to accelerate the IPR work on a
 number of products. The total number of patent applications filed by
 Orchid in various national and international patent offices so far is
 820 (including Process, Formulation, NCE, NDDS, Biotech and Generics).
 As of March 31, 2011, 621 patent applications have been published while
 153 patents have been granted.
 
 Foreign Currency Convertible Bonds
 
 Your Company had issued FCCBs during November 2005, which were listed
 on the Luxembourg and London Stock Exchanges and during February 2007,
 which are listed on the Singapore Stock Exchange. The FCCBs due in 2010
 are termed 2010 Bonds and those due in 2012 are termed 2012 Bonds.
 
 During the year under review, your Company redeemed the outstanding
 FCCBs (2010 Bonds), including yield-to-maturity, aggregating to US$
 25.69 million (Rs 114.10 crore), on the due date i.e. November 03,
 2010.
 
 The status of outstanding FCCBs (2012 Bonds) is as follows:
 
 Description                                        2012 Bonds
 
 FCCB Issue value                              US$ 175 million
 
 Conversion into equity so far                             Nil
 
 Redemption value (%) of the book value                 142.77%
 
 FCCBs bought back                              57.578 million
 
 FCCBs outstanding                             117.422 million
 
 Your company intends to raise long-term resources aggregating to an
 amount not exceeding Rs 1,000 crore through a combination of
 appropriate instruments to take care of the outstanding FCCBs coming up
 for redemption in February 2012.  The fund raising proposal was
 approved by the board at its meeting held on May 18, 2011 and a
 resolution seeking the members approval by way of postal ballot is
 being sent.
 
 Employees stock option plan
 
 The details of options granted to employees under the ORCHID - ESOP
 1999, ORCHID - ESOP 2005 and ORCHID - ESOP 2010 schemes and the status
 of such options as on March 31, 2011 are given in Annexure IV to this
 Report.
 
 Your Company formulated a stock option plan viz., Orchid - ESOP 2010
 Scheme for grant of 10,00,000 options to the employees of the Company
 including whole-time Director(s) of the Company but excluding the
 Promoter Directors. The said scheme was approved by the shareholders at
 the Annual General Meeting held on July 21, 2010. Your Company granted
 9,01,000 options during the year and as at March 31, 2011, the
 outstanding options under the said scheme is 8,98,000.
 
 Your Company has also formulated the following schemes which have been
 approved by the Board of Directors at their meeting held on May 18,
 2011 and the resolutions are placed before the members for approval in
 the ensuing Annual General Meeting.
 
 Orchid-ESOP Senior Management 2011 Scheme - grant of 10,00,000 options
 to the employees in the grade of Senior Manager and above, out of which
 7,50,000 options will be granted to the employees of Orchid and
 2,50,000 options to the employees of various Subsidiary Companies of
 Orchid, either in India or abroad.
 
 - Orchid-ESOP Directors 2011 Scheme - grant of 5,00,000 options to the
 directors of the Company including whole time directors but excluding
 Promoter Director.
 
 Listing of equity shares
 
 Your Company''s equity shares are presently listed on the National Stock
 Exchange of India Limited (NSE), Bombay Stock Exchange Limited (BSE)
 and the Madras Stock Exchange Limited (MSE). The GDRs issued during
 2005-06 are listed on the Luxembourg Stock Exchange and the London
 Stock Exchange.  The convertible bonds issued by the Company during
 2006-07 are listed on the Singapore Exchange Limited.
 
 Alliances / Acquisitions
 
 Your Company acquired Karalex Pharma, LLC, a US based generic marketing
 and sales services Company headquartered in New Jersey through your
 Company''s step down subsidiary Orchid Pharma Inc. Karalex Pharma has
 been a leading provider of generic pharmaceuticals focused exclusively
 on the US healthcare market. Through this acquisition, your Company has
 created its presence in the front end US market and will be able to
 reach its generic products to the US customers directly.
 
 Overseas joint ventures
 
 NCPC Orchid Pharmaceuticals Company Limited, China
 
 Your Company''s 50:50 joint venture in China, NCPC Orchid
 Pharmaceuticals established for manufacture of sterile Cephalosporin
 APIs continued to perform well. The joint venture is profitable with a
 significant sales turnover of US$ 55.42 million during the year under
 review.
 
 Subsidiaries
 
 Orchid Research Laboratories Limited, India (ORLL)
 
 Your Company''s Indian subsidiary, ORLL is engaged in proprietary, novel
 drug discovery research in the following therapeutic areas namely,
 anti-infectives, anti-inflammatory, anti-cancer, metabolic disorders
 and Central Nervous System (CNS). New drug discovery and development
 activities are conducted in state-of-the art laboratories spanning
 expertise in analytical research, bio-informatics, medicinal chemistry,
 molecular biology, pharmacology, drug metabolism and Pharmacokinetics,
 intellectual property management and quality assurance.
 
 The subsidiary company has a robust pipeline of drug development
 projects to address unmet medical needs. During the year under review,
 regulatory documents were filed for four clinical candidates in India
 and EU for initiation of clinical trials.  ORLL has also designed and
 synthesised a good number of New Chemical Entities (NCEs) in various
 therapeutic areas and significant molecules are under various
 biological profiling to strengthen the existing pipeline.
 
 ORLL has built a successful partnership with Merck and Co., USA for
 collaborative drug discovery in the anti-infectives area.  Certain NCEs
 were synthesised and tested in various in vitro and in vivo biological
 assays and several promising compounds have been identified. A
 significant number of patents have been filed in various therapeutic
 areas to provide for protection of intellectual property generated by
 ORLL.
 
 Bexel Pharmaceuticals Inc., USA (Bexel)
 
 During the year, Bexel conducted advanced basic studies on the lead
 molecule BLX-1002 internally and has filed documents seeking consent to
 conduct expanded phase 2 clinical trials with the regulatory
 authorities. Though, the molecule has exhibited potential for multiple
 indications, the envisaged clinical trial will test efficacy for a
 select indication. Further, basic mechanistic studies in animal models
 conducted at a leading research institute have presented insights to
 understand the mechanism of this molecule. Additional advanced studies
 in animals and later in select patients is being planned to generate
 scientific data backed mechanistic rationale for the molecule. The
 referred studies are being planned in the subsequent quarters, while
 approval to conduct clinical trial is awaited.
 
 Orchid Pharmaceuticals, Inc., USA
 
 Orchid Pharmaceuticals, Inc., is a wholly owned Delaware based
 subsidiary of your Company and also the holding company in the United
 States, under which all the operational business subsidiaries have been
 structured. The Company currently has two operating subsidiaries,
 Orgenus Pharma, Inc., and Orchid Pharma, Inc., (formed during the year)
 both located in Princeton, New Jersey, in the US.
 
 Orgenus Pharma, Inc., is the entity that provides all business
 development and operational services for the parent Company including
 the initiation of marketing alliances with partner companies, filing of
 your Company''s Drug Master Files (DMFs) and Abbreviated New Drug
 Applications (ANDAs) as the
 
 Importer of record for your Company with the FDA. It continues to
 represent your Company for all matters relating to the review and
 approval of such filings by the FDA, and handling of logistics and
 product importation into the US as the Importer of Record for the US
 Customs.
 
 During the year under review, the Company formed a new subsidiary
 namely Orchid Pharma, Inc., in the USA. Orchid Pharma, Inc., is the
 commercial entity that started directly marketing and selling your
 Company''s products in the US generics market place through the
 acquisition of Karalex Pharma, LLC during the fiscal year 2010-11.
 Orchid Pharma, Inc., has established a strong corporate image for your
 Company in the US and will be launching all future (unpartnered)
 generics products under the Orchid label. Equipped with a strong and
 experienced US commercial team, this Subsidiary would be a key growth
 driver for your Company, starting this year.
 
 Diakron Pharmaceuticals Inc., USA
 
 During the year, your Company increased its stake in Diakron
 Pharmaceuticals Inc. and holds 64.55% in the Company.  Orchid''s stake
 in Diakron has been a part of the original transaction which includes
 direct investment and Master Services Agreement (MSA). Your Company has
 completed most of its MSA obligations to develop and supply clinical
 quantities of API and extended release formulation. At present, phase 1
 clinical studies in patients have commenced in Europe with the new
 extended release formulation and the study is likely to be completed
 during the year 2011. Subsequently, based on the phase 1 study results,
 additional formulation studies will be needed and phase 2 clinical
 studies in human subjects will be planned later.
 
 Orchid Europe Limited, United Kingdom
 
 Your Company''s subsidiary in Europe namely Orchid Europe Limited (OEL)
 provides liaising support to the parent Company and its customers in
 Regulatory, Pharmacovigilance, Testing & Release, Retention of samples,
 Service Providers and Business Development in Europe. The Company has
 chalked out a business plan for capturing a significant market share
 for the products. With a rich product pipeline and the expanding
 product portfolio, the Company''s business development is already in
 discussions with major generic houses in EU for expanding the
 co-operation and are simultaneously discussing with regional majors to
 increase market share.
 
 Orchid Pharmaceuticals (South Africa) Pty Ltd., South Africa
 
 Your Company''s wholly owned subsidiary, Orchid Pharmaceuticals (South
 Africa) Pty Ltd., was incorporated mainly to register and market your
 Company''s products in South Africa.  The Company is in the process of
 submitting dossiers for obtaining marketing approval from the
 regulatory authority, MCC for various oral products and the
 applications are at various stages of the registration process.
 
 Orchid Pharma Japan K K
 
 The subsidiary Company in Japan has continued to make noteworthy
 progress during the year. At the end of the fiscal year 2010-11, there
 are 9 DMFs filed with Pharmaceutical and Medical Devices Agency (PMDA)
 of Japan and additional DMFs will be filed in the current financial
 year to meet the market needs.
 
 A major achievement was to commence the supplies to one of the top 5
 Japanese innovator Companies for their global business partners.
 Business discussions are on with various Japanese Companies for supply
 of new products and the Company is expected to make good progresses on
 both business and Regulatory fronts during the current year.
 
 Central Government Approval
 
 Your Company has been making applications for an approval under Section
 212(8) of the Companies Act, 1956 from the Ministry of Corporate
 Affairs, seeking exemption from attaching the Annual Report of
 subsidiary Companies with the Annual Report of Orchid. The Ministry of
 Corporate Affairs, Government of India vide its circular dated February
 8, 2011 has provided general exemption to companies from attaching the
 balance sheets of their subsidiary Companies as required under Section
 212(8) of the Companies Act 1956.
 
 The exemption is available provided the Companies publish the audited
 consolidated financial statements in the Annual Report.  The
 consolidated financial statements duly audited are presented along with
 the accounts of your Company. The statement as required under Section
 212 is given as part of the consolidated accounts in this report. The
 annual accounts of subsidiary Companies are kept at the Company''s
 registered office and also at the respective registered office of the
 subsidiaries for inspection and shall be made available to the members
 seeking such information.
 
 Fixed deposit
 
 The Company has not accepted any fixed deposits and as such, no amount
 of principal or interest was outstanding as of the balance sheet date.
 
 Directors'' Responsibility Statement
 
 In accordance with the provisions of Section 217 (2AA) of the Companies
 Act, 1956, your Directors confirm:
 
 - That in the preparation of the annual accounts for 2010-11 the
 applicable accounting standards were followed along with proper
 explanation relating to material departures, if any.
 
 - That the Directors selected such accounting policies and applied them
 consistently and made judgments and estimates that were 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 (31st March 2011) and of
 the profit or loss of the Company for that period (2010-11).
 
 That the Directors took 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.
 
 That the Directors prepared the annual accounts for 2010- 11 on a going
 concern basis.
 
 Corporate Social Responsibility
 
 Your Company''s constant focus has been on the community development as
 part of its corporate social responsibility. Various activities are
 continuously being carried out and focused on Community Health
 Development, Children Education, Women Empowerment, Youth Development,
 Community Asset Creation and a Greener Environment.
 
 Specialised children education programs through activities like summer
 camp, special english coaching, leadership and motivation programs
 during the year have reached a good number of 950 children. These
 programs aim to achieve the development rights of the children as
 stated by United Nations.
 
 Various health programs benefitted 9713 people which included personal
 surgical support and community based education programmes on health.
 The women development programs reached around 1900 women directly
 through 161 women self- help groups organised at the hamlet level. The
 youth development programs helped around 2700 young boys and girls to
 enhance their skills to be employed elsewhere and also to take up
 self-employment program. An integrated development program aimed at
 better living for tribal people benefitted about 200 tribes and their
 families.
 
 Environment
 
 Environment management has been a prime focus area of your Company.
 Your Company has employed a state of the art technology, zero liquid
 trade effluent treatment plant and world class treatment facilities for
 its liquid and gaseous pollutants generated from the production
 processes. The zero discharge of liquid trade effluent treatment plant
 comprising Membrane Bio Reactor, Nano Filtration, Reverse Osmosis,
 Solvent Stripping Column, Thermal Evaporation & Crystallisation plant
 treat the entire trade effluent and recycles it back into the utility
 process.
 
 Your Company was the first bulk drug manufacturing Company in the
 country to get ISO - 14001 certification in the year 1999 by Dutch
 Council and has retained the certification continuously for its
 environment management system.
 
 The Environment programs have also been carried out in the form of
 planting saplings, dissemination of bio technologies to the communities
 and installation of bio gas plants for a few houses as pilot projects.
 Your Company also has plans laid out for sustainable development of
 communities in the form of low cost sanitation, recycling of wastes
 into articles etc.
 
 Safety Excellence Journey
 
 The year 2010 - 2011 saw an all-round improvement in various elements
 of Safety in the Company. By focusing on repeat incidents and carrying
 out necessary corrective and preventive actions, your Company was able
 to achieve considerable reduction in incidents. The Central Safety
 Committee continued to monitor safety, health and environment
 performance and provide necessary direction for improvement through
 regular monthly reviews.
 
 In recognition of the various safety initiatives, your Company was
 awarded OHSAS 18001 certification in February 2011 for its API facility
 at Alathur, near Chennai.
 
 The manufacturing sites at Alathur, Aurangabad and the Research &
 Development unit at Shozhanganallur received International Safety Award
 - Merit from British Safety Council, UK for the year 2010.
 
 Conservation of energy
 
 Your Company has always been striving hard in the field of energy
 conservation. Several measures to conserve energy and to reduce
 associated costs were taken during the fiscal under review as well. The
 particulars in respect to conservation of energy as required under
 Section 217 (1) (e) of the Companies Act, 1956, are given in Annexure I
 to this report.
 
 Technology absorption
 
 The particulars in respect of R&D/Technology absorption as required
 under Section 217 (1)(e) of the Companies Act, 1956, are given in
 Annexure II to this report.
 
 Foreign exchange earnings and outgo
 
 The particulars in respect of Foreign Exchange Earnings and Outgo as
 required under Section 217 (1)(e) of the Companies Act, 1956, are given
 in Annexure III to this report.
 
 Particulars of employees
 
 Information as per 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 Accounts are being sent to all
 members of the Company excluding the aforesaid information. Any member
 interested in obtaining a copy of the particulars may write to the
 Secretary at the registered office of the Company.
 
 Corporate Governance
 
 The spirit of good Corporate Governance remains integral to the
 Company''s corporate philosophy. The Company follows the code of
 Corporate Governance issued by the stock exchanges for listed
 companies. For 2010-11 all information relating to Corporate Governance
 is given in Annexure V to this Report. A compliance certificate from
 the statutory auditors is appended to this report. General Shareholders
 Information is given in Annexure VI.
 
 Green Initiative
 
 To augment the green initiative of the Ministry of Corporate Affairs
 and to reduce carbon foot print, your Company proposes to send various
 communication including the Annual Reports in electronic form, to the
 members who have opted for the same.  This would help in reducing the
 number of physical copies to be printed, thereby contributing to a
 greener environment. The full text of the current year''s (2010-11)
 annual report will also be available in an easily navigable format on
 our website, www.orchidpharma.com. As a member of the Company, you will
 always be entitled to receive all such communication in physical form,
 upon request.
 
 Directors
 
 Appointment of Chairman
 
 Consequent to the resignation of Shri R Narayanan from the Board of
 Orchid, the Board decided that Shri K Raghavendra Rao will be the
 Chairman and Managing Director with effect from October 28, 2010. We
 are pleased to inform that Shri K Raghavendra Rao was conferred the
 prestigious ''Padma Shri'' award for the year 2011 by the Government of
 India in the Trade and Industry category. The award was presented to
 Shri K Raghavendra Rao by the Honourable President of India on April 1,
 2011.
 
 Appointment of Additional Directors
 
 Shri R Sankaran was appointed as Additional Director on the Board on
 January 19, 2011. Pursuant to the appointment, Shri Sankaran holds
 office up to the date of the forthcoming Annual General Meeting. A
 notice has been received from a member as per Section 257 of the
 Companies Act, 1956 along with the prescribed fee. Shri R Sankaran has
 also filed with the Company his consent to act as Director, if
 appointed, as required under Section 264(1) of the Companies Act, 1956.
 A resolution seeking his appointment as Director is being placed before
 the members for approval.
 
 Shri Bharat Dhirajlal Shah was appointed as Additional Director on the
 Board on January 19, 2011. Pursuant to the appointment, Shri Bharat
 Shah holds office up to the date of the forthcoming Annual General
 Meeting. A notice has been received from a member as per Section 257 of
 the Companies Act, 1956 along with the prescribed fee. Shri Bharat Shah
 has also filed with the Company his consent to act as Director, if
 appointed, as required under Section 264(1) of the Companies Act, 1956.
 A resolution seeking his appointment as Director is being placed before
 the members for approval.
 
 Professor Bala V Balachandran was appointed as Additional Director on
 the Board on May 18, 2011. Pursuant to the appointment, Shri Bala
 Balachandran holds office up to the date of the forthcoming Annual
 General Meeting. A notice has been received from a member as per
 Section 257 of the Companies Act, 1956 along with the prescribed fee.
 Shri Bala Balachandran has also filed with the Company his consent to
 act as Director, if appointed, as required under Section 264(1) of the
 Companies Act, 1956. A resolution seeking his appointment as Director
 is being placed before the members for approval.
 
 Resignation of Directors
 
 Shri R Narayanan, who has been the Chairman and Director of Orchid
 since inception, resigned from the Board with effect from October 28,
 2010. The Board places on record its appreciation for the outstanding
 contribution made by Shri R Narayanan during his long tenure as a
 Director and Chairman on the Board of Orchid.
 
 Shri Anil Thadani, who has been a Director of Orchid, resigned from the
 Board with effect from September 28, 2010.  Consequent to his
 resignation, Shri Raj Rajkumar, Alternate Director to Shri Anil Thadani
 also ceased to be director from the said date. The Board places on
 record its appreciation for the contributions made by Shri Anil Thadani
 and Shri Raj Rajkumar as Directors.
 
 Retirement of Directors by rotation
 
 In accordance with the provisions of the Companies Act, 1956, and the
 Articles of Association of the Company, Dr M R Girinath and Dr I
 Seetharam Naidu retire by rotation and are eligible for re-appointment.
 However, Dr M R Girinath and Dr I Seetharam Naidu have opted not to get
 re-elected at the ensuing AGM. A resolution pursuant to Section 256 of
 the Companies Act, 1956 for not filling the vacancy, at present, caused
 by Dr M R Girinath and Dr I Seetharam Naidu''s retirement has been
 included in the Agenda of the Annual General Meeting (AGM).
 
 Auditors
 
 The existing Statutory Auditors, M/s SNB Associates, Chartered
 Accountants retire at the forthcoming Annual General Meeting, and being
 eligible, offer themselves for re-appointment.
 
 Cost Audit
 
 The Central Government has prescribed that an audit of the cost
 accounts maintained by the Company in respect of bulk drugs and
 formulations be conducted under Section 233B of the Companies Act,
 1956. Consequently, your Company has appointed Shri V Kalyanaraman,
 B.Sc, FICWA, as Cost Auditor for 2010-11 and 2011-12, with the consent
 of the Central Government, for the audit of cost accounts maintained by
 the Company in respect of both bulk drugs and formulations.
 
 Acknowledgements
 
 Your Directors are thankful to various public sector and private sector
 banks and institutions for meeting the long term and working capital
 needs of the Company''s expanding operations and also the holders of
 FCCBs and GDRs for their support.
 
 The Directors are grateful to the Central and State Governments and the
 Central DCGI and State FDAs for their continued support to the
 Company''s expansion plans. Your Board places on record its appreciation
 of the support provided by the customers, suppliers and equipment
 vendors to the Company. Your Directors are also thankful to the
 vendors, distributors and agents for their continued support.
 
 Your Directors are thankful to the esteemed shareholders for their
 support and encouragement. The Directors acknowledge the commitment and
 contribution of all employees to the growth of the Company.
 
                                       For and on behalf of the Board
 
                                                    K Raghavendra Rao
 
                                         Chairman & Managing Director
 
 Place: Chennai
 
 Date: May 18, 2011