We are pleased to present the Twentieth Annual Report together with the
 Audited Accounts for the year ended December 31, 2010.
 
 1 CONSOLIDATED FINANCIALS
 
                                                   (Figures in Million)
 
                     Year ended December 2010   Year ended December 2009
                     Rupees          USD *      Rupees         USD *
 
 1.1 Financial 
 Results
 
 Income            17,655.43        394.89     13,283.41      285.54
 
 Operating 
 Profit (EBIDTA)    3,963.21         88.64      2,105.04       45.25
 
 Cash Profit/
 (Loss)             2,044.77         45.73      1,126.98       24.23
 
 Net Profit (PAT)/
 (Loss)             1,224.47         27.39      1,096.83       23.58
 
 Retained earnings 12,229.51        273.53      7,240.92      155.65
 
 1.2 profits
 
 Operating Profit 
 (EBIDTA)           3,963.21         88.64      2,105.04       45.25
 
 Less : Interest    1,466.50         32.80        759.07       16.32
 
 Depreciation & 
 amortization         638.98         14.29        491.90       10.57
 
 Exceptional 
 items incl. AS 30      5.99          0.13       (575.30)    (12.37)
 
 Profit before tax  1,863.72         41.68       1,429.37      30.73 
 
 Less: Provision 
 for Tax
 
 Current              451.67         10.10         285.82       6.14
 
 Deferred               0.27          0.01        (60.71)     (1.31)
 
 Fringe Benefit 
 Tax                       -             -           3.38       0.07
 
 MAT credit 
 entitlement               -             -         (9.50)     (0.20)
 
 Profit/(Loss) 
 after tax           1,411.78        31.58       1,210.38      26.02
 
 Available for 
 appropriation       2,924.28        65.41       1,941.73      41.74
 
 1.3 Appropriations
 
 Dividend
 
 on Equity Shares 
 (proposed)             91.59         2.05          60.32       1.30
 
 on Preference Shares       -            -          88.49       1.90
 
 Dividend Tax           14.98         0.34          25.29       0.54
 
 Transfer to 
 General Reserve        36.78         0.82          52.76       1.13
 
 Transfer to Capital 
 Redemption Reserve    491.61        11.00              -          -
 
 Reversal of 
 dividend 
 and tax on 
 preference 
 shares              (148.54)       (3.32)              -          -
 no longer 
 payable
 
 Balance 
 carried to 
 Balance Sheet       2,437.86        54.53       1,714.87       36.86
 
 Note: *1 USD = Rs.46.52 (Exchange Rate as on December 31, 2009). 
 
 1 USD = Rs.44.71 (Exchange Rate as on December 31, 2010).
 
 Previous year figures have been regrouped/ restated wherever necessary
 to make them comparable with those of the current year.
 
 2 TURNOVER AND PROFITS
 
 On a consolidated basis, the total income during the year stood at
 Rs.17,655 Million against Rs.13,283 Million in the previous year,
 growth of 33%. The Company posted a net profit of Rs.1,224 Million as
 against Rs.1,097 Million in the previous year.
 
 On a Standalone basis, the total income during the year stood at
 Rs.5,294 Million as against Rs.4,879 Million in the previous year. The
 Standalone net profit is Rs.736 Million as against a net profit of
 Rs.616 Million for the previous year.
 
 Detailed analysis on financial performance is given in the Management
 Discussion and Analysis Report which forms part of this Directors
 Report.
 
 3 DIVIDEND
 
 The Board is pleased to recommend a dividend of 15 % (i.e., Rs.1.50/-
 per equity share of Rs.10/- each for the year ended December 31, 2010
 
 4 CAPITAL
 
 The Authorised share capital of the Company as at December 31, 2010 is
 Rs.1,517,500,000 divided into 89,750,000 equity shares of Rs.10/- each
 and 620,000 Cumulative Reedemable Preference Shares of Rs.1,000/- each.
 
 The Issued, Subscribed and Paid-Up Capital of the Company as at
 December 31, 2010 is Rs.577,446,710 divided into 57,744,671 equity
 shares of Rs.10/- each.
 
 During the year:
 
 . There has been an increase in the Equity Capital of the Company on
 account of allotments consequent to amalgamation, exercise of stock
 options, conversion of warrants and allotment to Qualified
 Institutional Buyers (QIBs). Please refer to Equity History of the
 Company for allotment details.
 
 . There has been reduction in the Preference Capital of the Company on
 account of redemption of 491,606 Cumulative Redeemable Preference
 Shares of Rs.1,000/- each issued to K.V Pharmaceuticals Company, USA in
 the year 2005.
 
 5 BUSINESS OVERVIEW
 
 2010 was a game changing year for us as we saw the fructification of
 many of our plans in our goal to become a global sterile powerhouse.
 Our partnership with Pfizer and entry into the biologics space has
 strengthened and consolidated our position in the specialty segment.
 Ray of Life, our critical care offering for the domestic market, has
 also made significant progress with a wide range of high quality
 Oncology products at an affordable price for Indian consumers.
 
 The Company re-branded its specialties division, Strides Specialties
 Private Limited as Agila Specialties Private Limited. The name Agila
 was chosen to reflect the brand ethos of the Companys specialised
 product offering which is smart, agile, determined and pragmatic.
 Agila carves out a new identity to the specialties division in the
 rapidly changing segment of the healthcare industry.
 
 The Company had a very stable year of operation post restructuring of
 its business into two divisions viz. Pharma and Specialties.
 
 The key business highlights of 2010 include: 
 
 Specialties
 
 . Performance boosted by new product launches in regulated markets and
 additional revenue generated by new facilities
 
 . Significant ramp up in capacity utilization
 
 . Acquisition of Penem and Penicillin facility in Campos, Brazil
 
 . Acquisition of complete ownership in Oncology business
 
 . 16 new product launches in regulated market, 5 in USA and 11 in other
 regulated markets
 
 Pharma and Branded Generics 
 
 India Pharma
 
 . Prequalification from WHO for Strides H1N1 generic drug Oseltamivir
 75mg capsules
 
 . Commercialization of Ergocalciferol in Q3 of 2010 in USA
 
 Australasia Region
 
 . The sales growth in Australia was influenced by the Pfizer 
 distribution agreement which saw Ascent Pharma health Limited, the
 Companys subsidiary, promote and distribute a range of Pfizers
 branded Established Products throughout the year.
 
 . The Asia business successfully registered a number of new
 pharmaceuticals during the year into several of these markets and
 succeed in gaining some new contracts
 
 Africa Region
 
 . Added 4 new markets, Congo, Mali, Mozambique, Malawi
 
 . 57 new products registered in Africa
 
 . Commenced full-fledged production of tablets in Nigerian facility
 
 India Brands
 
 . India Brands (Grandix) operations integrated into Strides with 
 flagship brand Renerve, consolidating its leadership position
 
 . Ray of Life launched 3 therapeutic segments in India, i.e., Oncology,
 Nephrology and Hi-end Antibiotics
 
 . Ray of Life launched over 15 brands in the cancer chemotherapy 
 segment in Oncology and around 10 top molecules introduced in Hi-end
 antibiotics
 
 Merger and business Restructuring update
 
 The Company has successfully completed consolidation of its operations
 into two different business verticals viz Specialties Business,
 Pharmaceutical Business pursuant to the Scheme of Amalgamation
 sanctioned by the Honble High Court of Mumbai, Chennai and Karnataka
 and pursuant to the hive-off of Specialties and Research and
 Development business of the Company to Agila Specialties Private
 Limited, a wholly owned subsidiary of the Company.
 
 Medgene Pharmaceuticals Private Limited, a wholly owned subsidiary of
 the Company merged with Agila Specialties Private Limited in the
 Specialties Vertical pursuant to the Order of the Honble High Court of
 Karnataka passed on February 6, 2010.
 
 Strengthened partnership with Pfizer
 
 i) Collaboration with Pfizer for the US market
 
 Strides entered into a collaboration with Pfizer, wherein Pfizer will
 commercialise 40 off-patent sterile injectable and oral products in the
 United States through its Established Products Business Unit. These
 finished dosage form products will be licensed and supplied by Strides,
 Onco Laboratories Limited and Onco Therapies Limited.
 
 ii) Extended collaboration with Pfizer in additional geographies
 
 The Company strengthened its partnership with Pfizer by signing two
 additional License and Supply Agreements pursuant to which, Strides
 will license and supply upto 38 generic Oncology products to Pfizer for
 markets in the European Union, Canada, Australia, New Zealand, Japan
 and Korea and supply niche sterile injectables for the U.S. market.
 With the additional agreements signed, the collaboration between Pfizer
 and Strides Arcolab now extends to a total of 45 products addressing
 countries around the globe.
 
 iii) Sale of product portfolio by Akorn-Strides llc to Pfizer Inc.
 
 During the year, Akorn-Strides LLC, a Joint Venture (JV) between the
 Company and Akorn Inc., USA entered into an agreement with Pfizer to
 sell 22 abbreviated New Drug Approvals (ANDAs) owned by the JV.
 
 The gross sale consideration of USD 63.20 Million was divided between
 Akorn Inc., USA and the Company in the agreed ratio of 55.3797% and
 44.6203%. The Company was entitled to USD 28.20 Million in cash as its
 share of the consideration in addition to entering into supply
 agreement with Pfizer for manufacture and supply of these products.
 
 Settlement with K. V. pharmaceuticals company, USA.
 
 The Company executed a settlement agreement with KV Pharmaceuticals
 Company, USA (K.V Pharma) pursuant
 
 to which the Company has retained all rights in relation to the
 products developed under the License and Supply Agreement executed
 earlier with K. V Pharma.
 
 The settlement also provided for redemption of preference shares issued
 to K.V Pharma.
 
 Qualified Institutional Placement
 
 During the year, the Company raised Rs.4,550 Million by way of private
 placement of equity shares to Qualified Institutional Buyers. The
 Company allotted 10,742,533 equity shares of Rs.10/- each at a price of
 Rs.423.55 per share.
 
 Redemption of FCCBs
 
 During the year, the Company redeemed outstanding USD 34 Million of the
 USD 40 Million FCCBs raised by the Company in the year 2005. USD 6
 Million of the above was bought back during the year 2009. The total
 payout for redeeming the Bonds was USD 46.50 Million as the Bonds were
 redeemable at a premium of 136.78%.
 
 Acquisitions/Investments/Joint Ventures 
 
 Acquisitions:
 
 The Company completed consolidation of the Oncology Business by
 restructuring the Oncology arrangements with Aspen. Consequently, the
 Company now holds 100% stake in Onco Therapies Limited, India and Onco
 Laboratories Limited, Cyprus which were earlier 50:50 Joint Venture
 with Aspen.
 
 As a part of well-articulated strategy to focus on core speciality
 injectable business, the Company entered into an understanding with
 Aspen to acquire the Penems and Penicillin facility in Campos, Brazil
 with related products.  This acquisition is subject to obtaining
 necessary regulatory approval which are pending as of December 31,
 2010.
 
 The Company acquired 70% stake in Inbiopro Solutions Private Limited, a
 Bangalore based bio-technology company. This acquisition made through
 the Companys wholly owned subsidiary Agila Specialties Private Limited
 marks the Company entry into the biologics space. The acquisition
 enhances Companys Specialty portfolio while giving the Company a leap
 start of at least 3 years in the fast growing and complex
 biopharmaceutical industry. This acquisition consolidates the Companys
 Specialty portfolio.  The acquisition gives the Company immediate
 access to a pipeline of 8 products estimated to have global sales of
 
 over USD 28 Billion. Commercialization of these products is expected to
 begin in 2013.
 
 Investments:
 
 During the year, Agila Specialties Private Limited (Agila), a wholly
 owned subsidiary of the Company, allotted further shares to the Company
 for a non-cash consideration equivalent to Rs.1,000 Million. The
 allotment was pursuant to the hive-off of the Specialties business and
 the Research and Development business of the Company to Agila.
 
 Linkace Limited, Cyprus, a wholly owned subsidiary of the Company
 acquired 100% stake in Strides Inc., USA, a subsidiary of the Company,
 by acquiring 84.53% interest held by the Company, 11.18% interest held
 by Strides Arcolab International Limited, United Kingdom, a wholly
 owned subsidiary of the Company and balance 4.29% interest held by a
 minority shareholder.
 
 Linkace Limited, Cyprus, acquired additional 3 % stake in Ascent
 Pharmahealth Limited (Ascent), a subsidiary of the Company listed in
 the Australian Stock Exchange.  Pursuant to this investment, the
 Company now holds 60.33% shareholding interest in Ascent. During early
 2010, the Company made a non-binding and indicative offer for acquiring
 the minority shareholding of Ascent at AUD 0.35 per share (later
 revised to AUD 0.40 per share) to be resulting in privatization of
 Ascent. The privatization process is expected to be completed in 2011.
 
 Linkace Limited, Cyprus, acquired the residual 49% stake in Co-Pharma
 Limited, UK, from Aspen Global Incorporated, Mauritius, thereby
 Co-Pharma became a wholly owned subsidiary of the Company.
 
 Linkace Limited, Cyprus transferred its 80% stake in Formulle Naturelle
 (Proprietary) Limited, South Africa to Aspen Pharmacare Holdings
 Limited, South Africa.
 
 Joint Ventures:
 
 During the year, the Company restructured its US operations and
 identified Strides Inc, USA as a holding entity for all its investments
 in US. Consequently, the interest of the Company in Akorn-Strides LLC,
 USA (a 50:50 JV between the Company and Akorn Inc., USA) and
 Sagent-Strides LLC, USA (a 50:50 JV between SAIL, UK and Sagent Inc.,
 USA) have been consolidated under Strides Inc.
 
 6 SUBSIDIARIES
 
 During the year, the following companies became subsidiaries of the
 Company: African Pharmaceutical Development Company, Cameroon, Agila
 Specialties (Malaysia) SDN BHD, Malaysia, Ascent Pharmacy Services Pty
 Limited, Australia, Inbiopro Solutions Private Limited, India, Linkace
 Investments Pty Ltd, Australia, Onco Laboratories Limited, Cyprus,
 Strides Farmaceutica Participacoes Ltda, Brazil, Strides
 Pharmaceuticals (Holding) Limited, Mauritius and Strides
 Pharmaceuticals (Mauritius) Limited, Mauritius
 
 7 RESEARCH & DEVELOPMENT
 
 Detailed write-up on Research & Development activity forms part of the
 annexure to the Directors report.
 
 8 CONSOLIDATED FINANCIALS
 
 In accordance with Accounting Standard AS-21 on consolidated financial
 statements read with Accounting Standard AS-27 on Accounting for Joint
 Ventures, the audited consolidated financial statements are provided in
 this Annual report.
 
 In terms of the Central Government approval under Section 212(8) of the
 Companies Act, 1956, the audited Financial Statements of the Companys
 subsidiaries have not been attached to this Report. The Financial
 Statements of the said subsidiaries will be kept for inspection during
 business hours by any investor at the registered office and the
 corporate office of the Company. The Company will also make available
 the audited annual accounts and related information of the subsidiary
 companies, upon request by any investor of the Company.
 
 9 CORPORATE GOVERNANCE
 
 The Company has complied with all the mandatory requirements of
 Corporate Governance specified by the Securities & Exchange Board of
 India through clause 49 of the Listing Agreement. As required by the
 said clause, a separate Report on Corporate Governance forms part of
 the Annual Report of the Company. A certificate from the Statutory
 Auditors of the Company regarding compliance with the conditions of
 Corporate Governance also forms part of this Report.
 
 10 MANAGEMENT DISCUSSION AND ANALYSIS
 
 Pursuant to clause 49 of the Listing Agreement entered into with the
 Stock Exchanges, Management Discussion and Analysis report forms part
 of this Report.
 
 11 FIXED DEPOSITS
 
 The Company has not accepted any fixed deposits and accordingly no
 amount is outstanding as on the balance sheet date.
 
 12 EMPLOYEE Stock option SCHEMES
 
 The Company has granted ESOPs to few eligible employees under the
 Strides Arcolab ESOP 2006 and Strides Arcolab ESOP 2008 and to
 Directors under Strides Arcolab ESOP 2008 (Directors), particulars of
 which are provided in the Corporate Governance Report forming part of
 this report.  Further, Statement giving additional information in terms
 of Regulation 12 of Securities and Exchange Board of India (Employee
 Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
 1999 is annexed to this Directors Report.
 
 13 BOARD OF DIRECTORS
 
 Mr. Deepak Vaidya and Mr. M.R Umarji are the Directors who retire by
 rotation and being eligible, offer themselves for reappointment.
 
 Mr. John Mathew, nominee director representing Export Import Bank of
 India ceased to be a director of the Company w.e.f August 31, 2010 and
 Mr. Mukul Sarkar has been nominated by Export Import Bank of India to
 his position effective that date.
 
 Dr. Ronald Ling, a non-executive director on the Board of the Company
 resigned from the Company with effect from October 14, 2010. Dr. Ling
 was a nominee of Zenith Pharmaceuticals Limited, Mauritius, a Foreign
 Venture Capital Investor and his exit is pursuant to sale of
 investments held by Zenith.
 
 14 PERSONNEL
 
 Information pursuant to Section 217 (2A) of the Companies act, 1956
 read with Companies (Particulars of Employees) Rules, 1975 will be
 provided on request.
 
 15 DIRECTORS RESPONSIBILITY STATEMENT
 
 In terms of Section 217 (2AA) of the companies Act 1956, the Directors
 state that they have:
 
 a) followed the applicable accounting standards in the preparation of
 annual accounts. However the deviation on the accounting standard has
 been with reference to the scheme of arrangement sanctioned by the
 Honble High Court of Mumbai for amalgamation of the Companys
 subsidiaries Global Remedies Limited, Grandix Pharmaceuticals Limited,
 Grandix Laboratories Limited and Quantum Remedies Private Limited (the
 transferor companies) with Strides Arcolab Limited (the transferee
 company). Refer notes to accounts for details of the same.
 
 b) selected such accounting policies and applied them consistently and
 made adjustments 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 and of the profit of the Company for that
 period.
 
 c) 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 and
 
 d) prepared the annual accounts on a going concern basis.
 
 16 CONSERVATION OF ENERGY, R & D, TECHNOLOGY ABSORPTION AND FOREIGN
 EXCHANGE EARNING/OUTGO
 
 The particulars as prescribed under 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 are set out in the Annexure
 to the Directors Report.
 
 17 STATUTORY AUDITORS
 
 The Statutory Auditors viz., Deloitte Haskins & Sells, Chartered
 Accountants, Bangalore (ICAI registration number 008072S) retire at the
 conclusion of the ensuing Annual General Meeting and being eligible,
 offer themselves for reappointment. Your Directors recommend their
 reappointment.
 
 18 DEPOSITORY SYSTEM
 
 As the Members are aware, your Companys shares are tradable
 compulsorily in electronic form and your Company has established
 connectivity with both the depositories, i.e., National Securities
 Depository Limited (NSDL) and Central Depository Services (India)
 Limited. In view of the numerous advantages offered by the Depository
 system, members are requested to avail the facility of
 dematerialization of the Companys shares on either of the Depositories
 as aforesaid.
 
 19 ACKNOWLEDGEMENT
 
 Your Directors place on record their sincere appreciation for the
 significant contribution made by the employees through their
 dedication, hard work and commitment and the trust and confidence
 reposed on us by the medical profession and trade.
 
 We also acknowledge the support and wise counsel extended to us by the
 bankers, financial institutions, Government agencies, analysts,
 shareholders and investors at large.
 
                           For and on behalf of the board of Directors
 
                        Arun Kumar - Vice Chairman & Managing Director 
 
                                            K.R. Ravishankar -Director
 
 Place: Bangalore, India 
 Date : April 25, 2011