The are pleased to present the Twenty First Annual Report together with
 the Audited Accounts for the year ended December 31, 2011.
 
 1 Consolidated Financials
 
                                                  (Figures in Million)
 
                                        Year ended
                                      2011                2010
                                 Rs       USD *      Rs          USD *
 
 1.1 Financial Results
 
 Income                      25,771.52    483.79    17,610.69     393.89
 
 Operating Profit (EBIDTA)    5,177.88     97.20     3,918.47      87.64
 
 Cash Profit / (Loss)         2,428.30     45.58     2,071.42      46.33
 
 Net Profit (PAT) / (Loss)    2,244.75     42.14     1,224.47      27.39
 
 Retained earnings           13,103.35    245.98    12,229.51     273.53
 
 1.2 Profits
 
 Operating Profit (EBIDTA)    5,177.88     97.20     3,918.47      87.64
 
 Less : Interest              1,902.68     35.72     1,421.76      31.80
 
 Depreciation and 
 Amortisation                 1,043.01     19.58       638.98      14.29
 
 Exceptional items 
 incl. AS 30                    494.67      9.29         5.99       0.13
 
 Profit before tax            2,726.86     51.19     1,863.72      41.68
 
 Less: Provision for Tax             _         _            _          _
 
 Current                        709.79     13.32       451.67      10.10
 
 Deferred                      (158.49)    (2.98)        0.27       0.01
 
 MAT credit entitlement        (164.50)    (3.09)           -          -
 
 Profit / (Loss) after tax    2,340.06     43.93     1,411.78      31.58
 
 Available for 
 appropriation                4,682.61     87.90     2,924.28      65.41
 
 1.3 Appropriations
 
 Dividend on Equity 
 Shares (proposed)              117.37      2.20        91.59       2.05
 
 Dividend Tax                    18.71      0.35        14.98       0.34
 
 Transfer to General
 Reserve                         89.00      1.67        36.78       0.82
 
 Transfer to Capital 
 Redemption Reserve                  -         -       491.61      11.00
 
 Reversal of dividend 
 and tax on                          -         -      (148.54)     (3.32)
 
 preference shares no 
 longer payable
 
 Balance carried to 
 Balance Sheet                4,457.53     83.68     2,437.86      54.53
 
 Note * 1 USD = Rs 53.27 (Exchange Rate as on December 31, 2011).
 
 * 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
 25,771.52 Million against Rs 17,610.69 Million in the previous year,
 growth of 46%. The Company posted a net profit of Rs 2,244.75 Million as
 against Rs 1,224.47 Million in the previous year.
 
 On a standalone basis the total income during the year stood at Rs
 7,662.47 Million as against Rs 5,607.64 Million in the previous year.
 The standalone net profit is Rs 1,179.21 Million as against a net profit
 of Rs 735.62 Million for the previous year.
 
 Detailed analysis on financial performance is given in the Management
 Discussion and Analysis Report and CFO''s Review which forms part of the
 Annual Report.
 
 3 Dividend
 
 The Board is pleased to recommend a dividend of 20 % i.e., Rs 2/- per
 equity share of Rs 10/- each for the year ended December 31, 2011.
 
 4 Capital
 
 The Authorised share capital of the Company as at December 31, 2011 is
 Rs 1,517,500,000 divided into 89,750,000 equity shares of Rs 10/- each
 and 620,000 Cumulative Redeemable Preference shares of Rs 1,000/- each.
 
 The Issued, Subscribed and Paid-Up Capital of the Company as at
 December 31, 2011 is Rs 583,801,710 divided into 58,380,171 equity
 shares of Rs 10/- each.
 
 During the year there has been an increase in the Equity Capital of the
 Company on account of allotment of 635,500 shares consequent to
 exercise of employee stock options.
 
 5 Preferential Allotment
 
 In November 2011, the Board of Directors of the Company approved the
 issue of convertible warrants to the Promoter Group subject to
 obtaining necessary Shareholders'' consent and regulatory approvals.
 
 During October 2011, the Promoter Group entities of the Company
 executed certain inter-se transfer of shares within the Promoter Group.
 The Company sought an informal guidance by way of an interpretative
 letter from Securities & Exchange Board of India as to whether the
 inter-se transfers by the Promoter Group would be considered as ''sale''
 as envisaged in the regulation 72 (2) of SEBI (Issue of Capital &
 Disclosure Requirements) Regulation, 2009.
 
 SEBI clarified that the said regulation and its explanation do not
 differentiate between inter-se transfers made to entities within
 promoter group and sales made to others.
 
 Based on the aforesaid position clarified from Securities & Exchange
 Board of India, the Company did not proceed with the preferential
 allotment.
 
 6 Business Overview
 
 2011 was eventful for Strides due to strengthened business performance,
 multiple product and plant approvals and proactive business
 consolidation.
 
 Strides had adopted a well-coordinated strategy to restructure the
 organisation into Pharma and Specialties business divisions.
 
 2011 witnessed dynamic operations, delivery in terms of enhanced
 revenue share and growing focus on value-driven products and approvals.
 
 Key Business Highlights for 2011 : Specialties (Agila)
 
 - Agila represents 40% of the group revenue and 52% of the group
 EBITDA.
 
 - Performance boosted by new product launches during the year. Key
 execution strategies includes optimum capacity utilisation focusing on
 lyophilized, liquid vials, penems and oncology; and the supply- chain
 focus shift to enhanced forecastable business.
 
 - US Joint Venture with Sagent consolidated its position in market
 place gaining significantly on market share and new product launches.
 
 - First year of consolidation of Brazilian operations. One-time loss in
 front-ended business in Brazil was considered in performance.
 
 - Continuous US FDA compliance for facilities. 2 new facilities in
 Bangalore, India received approvals during the year. The Brazilian
 Sterile Penems Facility received US FDA approval in February 2012.
 
 Regulatory Filings
 
 - 29 ANDAs filed during the year. Cumulative ANDA filings in the US
 stands at 144. 25 new ANDAs approved during the year taking the
 cumulative US approvals tally to 62;
 
 - 76 new product filings completed in other established markets like
 EU, Canada, Korea, South Africa and Australia and New Zealand; and
 received approval for 43 products during the year.
 
 - Cumulative filings and approvals stands at 314 and 160 respectively.
 
 Pharma
 
 - Pharma business represents 60% of the group revenue and 48% of the
 group EBITDA.
 
 - Key execution strategies include strong focus on operational
 execution, plant upgradation/ expansion and strong R&D program in niche
 areas of soft gels and immunosuppressants.
 
 - Successful regulatory audits of US FDA, UK MHRA and WHO.
 
 - IP products and ATM business post source change, contributed to the
 growth of India manufacturing business.
 
 - Australasia delivered solid growth. Revenue and EBITDA growth at 44%
 and 38% respectively over 2010.
 
 - Stable business in Africa despite political turmoil and civil unrest.
 
 - India brands grew by 20% over 2010. Renerve brand at Rs 34 Crores,
 grown by 45%.
 
 Pfizer Partnership
 
 - Licensing agreements expanded to Emerging Markets with additional
 sterile injectables and oncolytic products
 
 - Portfolio maximisation in established markets completed.
 
 Investments / Joint Ventures / Divestments
 
 Investments
 
 - The Company through its wholly owned subsidiary Agila Specialties
 (Malaysia) SDN BHD entered in to an agreement with Malaysian Bio-XCell
 Sdn Bhd, an undertaking of the Government of Malaysia, for the
 establishment of a customised facility to manufacture injectables in
 the Bio-XCell ecosystem in Johar, Malaysia.
 
 Divestments
 
 - The Company sold its Australia and South East Asian Business to
 Watson Pharmaceuticals Inc., USA for AUD 375 Million resulting in
 divestment of its stake in Ascent Pharmahealth Limited (Ascent). The
 transaction was closed on January 24, 2012.
 
 Subsidiaries added to the Group during the year
 
 During the year (1) Agila Specialties Asia Pte Ltd, Singapore, (2)
 Sorepharma, Burkinofaso, (3) Congo Pharma, Congo, (4) Strides Pharma,
 Namibia and (5) SPC Co. Ltd, Sudan became subsidiaries of the Company.
 
 Research & Development
 
 Detailed write-up on Research & Development activity forms part of the
 annexure to the Director''s Report.
 
 7 Consolidated Financials
 
 In accordance with Accounting Standard 21 on consolidated financial
 statements read with Accounting Standard 27 on Accounting for Joint
 Ventures, the audited consolidated financial statements are provided in
 this Annual report.
 
 In terms of the General Circular 2 of 2011 dated February 8, 2011
 issued by the Ministry of Corporate Affairs, the audited Financial
 Statements of the Company''s subsidiaries have not been attached to this
 Report. The Financial Statements of the subsidiaries shall be made
 available to the shareholders of the Company / its subsidiaries seeking
 such information any point of time and such Financial Statements will
 also be kept for inspection during business hours by any shareholder at
 the registered office and the corporate office of your Company / its
 subsidiaries. The Company will also make available the audited annual
 accounts and related information of the subsidiary companies, upon
 request by any shareholder of the Company.
 
 8 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.
 
 8 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.
 
 9 Deposits
 
 The Company has not accepted any deposits from public and accordingly
 no amount is outstanding as on the balance sheet date.
 
 10 Employee Stock Option Scheme
 
 The Company has granted ESOPs to few eligible employees under the
 Strides Arcolab ESOP 2006 scheme and Strides Arcolab ESOP 2008 scheme
 and to Directors under Strides Arcolab ESOP 2008 (Directors), scheme
 particulars of which are provided in the Corporate Governance Report
 forming part of this report.  The Company has also floated Strides
 Arcolab ESOP 2011 scheme during the year.
 
 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
 Report.
 
 11 Board of Directors
 
 Mr. P.M Thampi and Mr. A K Nair are directors who retire by rotation
 and being eligible, offer themselves for reappointment. Your directors
 recommend their re-appointment to the Board.
 
 12 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.
 
 13 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 carried out with reference to the scheme of arrangement sanctioned
 by the Hon''ble High Court of Bombay for amalgamation of the Company''s
 subsidiaries viz., 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.
 
 14 Conservation of energy, R & D, technology absorption and foreign
 exchange earnings / 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.
 
 15 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.
 
 16 Depository System
 
 As the Members are aware, your Company''s shares are tradable
 compulsorily in electronic form and your Company has established
 connectivity with both the depositories, i.e., National Securities
 Depository Limited 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 dematerialisation of the
 Company''s shares with any of the Depositories as aforesaid.
 
 17 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
 
 Place : Bangalore, India 
                                  Arun Kumar - Executive Vice Chairman & 
                                                       Managing Director
 
 Date: April 26, 2012                       K. R. Ravishankar - Director