The Directors have the pleasure of presenting the Thirty Eighth Annual
 Report of your Company together with the audited accounts for the year
 ended 31st March, 2011.
 
 FINANCIAL RESULTS
 
 The summary of consolidated (Company and its subsidiaries) and
 standalone (Company) operating results for the year and appropriation
 of divisible profits is given below:
 
                                   (Rs. in Crores except per share data)
 
                                       Consolidated    Standalone
 
                                    2010-11  2009-10  2010-11  2009-10
 
 Sales & Operating Income              2226     1916     1778     1449
 
 profit Before Depreciation, 
 Interest and Tax (PBDIT)               417      430      430      422
 
 Less Depreciation                       62       66       58       54
 
 Less Net Interest Expense               12       17       14       17
 
 profit Before Exceptional 
 Items & Tax                            343      347      358      351
 
 Less Exceptional Items                   0        0        0       37
 
 Less Tax Expense                        73      116       67      107
 
 Net profit for the Year               270*     231      291      207
 
 Balance brought forward                119        3      178       86
 
 Distributable profits                 389      234      469      293
 
 Appropriated as under:
 
 Transfer to General Reserve            153       56      153       56
 
 Proposed Equity Dividend                68       51       68       51
 
 Tax on Distributed profits             11        8       11        8
 
 Balance Carried Forward                157      119      237      178
 
 Earnings Per Share (Rs. per share)     31.93    27.32    34.38    24.51
 
 *Consolidated Net profit for the year is net of minority interest
 amounting to Rs. (0 .41) Lacs
 
 Consolidated Operating Results
 
 The consolidated sales and operating income increased to Rs. 2226.48
 crores from Rs. 1916.04 crores in the previous year yielding a growth of
 16.20%. The consolidated operating profit for the year was Rs. 417.29
 crores as against Rs. 429.81 crores in the previous year registering a
 decrease of 2.91%. The consolidated net profit increased to Rs. 270.17
 crores from Rs. 231.20 crores in the previous year registering a growth
 of 16.86%. During the previous year, MAT credit entitlement of Rs. 52.86
 crores was written off.  Adjusting for the same, consolidated net profi
 t has de-grown by 4.89%.
 
 Standalone Operating Results
 
 The sales and operating income increased to Rs. 1778.19 crores from Rs.
 1448.96 crores in the previous year yielding a growth of 22.72%. The
 operating profit for the year under review increased to Rs. 430.52
 crores as against Rs. 422.03 crores in the previous year registering a
 growth of 2.01%. The profits after tax for the year under review
 increased to Rs. 290.86 crores as against Rs. 207.37 crores in the previous
 year registering a growth of 40.26%. Growth in the net profit adjusted
 for the MAT write off as stated above is 11.77%.
 
 Management Discussion and Analysis (MDA)
 
 The detailed analysis of the operating performance of the Company for
 the year, the state of affairs and the key changes in the operating
 environment has been included in the Management Discussion and Analysis
 Section which forms a part of the Annual Report.
 
 APPROPRIATIONS
 
 Dividend
 
 The Board of Directors has decided that the Company as a policy will
 endeavour to distribute 30% of its annual consolidated net profit
 after tax as dividend. The said distribution is expected to be in one
 or more tranches.
 
 In line with the said policy, the Board has recommended a normal annual
 dividend of Rs. 6.00 per equity share and a special dividend of Rs. 2.00
 per equity share (previous year dividend Rs. 6.00 per equity share) of
 fully paid up face value of Rs. 5, amounting to Rs. 67.69 crores (previous
 year Rs. 50.77 crores). The tax on distributed profits payable on this
 dividend shall be Rs. 10.98 crores (previous year Rs. 8.43 crores) making
 the aggregate distribution to Rs. 78.67 crores (previous year Rs. 59.20
 crores). The distributed profits are 29% (previous year 26%) of the
 consolidated net profits for the year. The proposed dividend would be
 tax free in the hands of the shareholders.
 
 Transfer to Reserves
 
 The Board has recommended a transfer of Rs. 153 crores to the general
 reserve and an amount of Rs. 237 crores is retained in the profit and
 loss account of Standalone financials.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 In terms of Section 217 (2AA) of the Companies Act, 1956, in relation
 to financial statements of the Company for the year 2010-11, the Board
 of Directors state that:
 
 i the applicable Accounting Standards have been followed in preparation
 of the financial statements and there are no material departures from
 the said standards;
 
 ii reasonable and prudent accounting policies have been used in
 preparation of the financial statements and that they have been
 consistently applied and that reasonable and prudent judgments and
 estimates have been made in respect of items not concluded by the year
 end, so as to give a true and fair view of the state of affairs of the
 Company as at 31st March, 2011 and of the profit for the year ended
 31st March, 2011;
 
 iii proper and suffi cient care has been taken 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 the financial statements have been prepared on a going concern
 basis.
 
 SUBSIDIARIES
 
 During the year under review, the Company incorporated three wholly
 owned subsidiaries, one each at United Kingdom, Romania and Malaysia
 under the names of Torrent Pharma (UK) Ltd, Torrent Pharma S.R.L. and
 Laboratories Torrent (Malaysia) Sdn. Bhd.  respectively. Torrent Pharma
 Japan Co., Ltd, a wholly owned subsidiary at Japan, was wound up during
 the year.
 
 Brief review of the important subsidiaries is given below:
 
 Heumann Pharma GmbH & Co Generica KG (Heumann), Heunet Pharma GmbH and
 Norispharm GmbH at Germany
 
 Heumann along with Heunet Pharma GmbH and Norispharm GmbH at Germany
 posted revenues of Euro 48.15 million (Rs. 290.65 crores) for the fi
 nancial year 2010-11 as compared with Euro 40.07 million (Rs. 267.87
 crores) for the previous year, registering a growth of 8.51% in Rupees.
 Net profit for the year was Euro 2.07 million (Rs. 8.40 crores) as
 against a net profit of Euro 0.48 million (Rs. 4.63 crores) for the
 previous year. During the year, Heumann was successful in obtaining
 several tenders announced by the various health insurance funds.
 
 Torrent do Brasil Ltda. (TdBL), Brazil
 
 During the year, TdBL achieved revenues of Reai 131.27 million (Rs.
 346.28 crores), as compared with Reai 118.04 million (Rs. 300.97 crores)
 in the previous year, registering a growth of 15.06% in Rupees.
 
 TdBL earned a net profit after tax of Reai 2.90 million (Rs. 7.83
 crores), as compared to a net profit after tax of Reai 4.84 million (Rs.
 18.38 crores) in the previous year.
 
 ZAO Torrent Pharma (ZAO TP), Russia
 
 During the year, ZAO TP achieved revenue of RRU 238.88 million (Rs. 36.02
 crores) as compared with RRU 195.27 million (Rs. 30.06 crores) in the
 previous year, registering a growth of 19.83% in Rupees. Net profit
 after tax for the year was at RRU 92.08 million (Rs. 13.05 crores) as
 against a net loss after tax of RRU 56.88 million (Rs. 9.09 crores) for
 the previous year.
 
 Torrent Pharma Inc. (TPI), USA
 
 During the year, TPI earned revenues of USD 24.47 million (Rs. 111.36
 crores), as compared with USD 19.66 million (Rs. 93.10 crores) in
 previous year registering a growth of 19.61% in Rupees. Net profit for
 the year was at USD 0.30 million (Rs. 0.12 crores) as against a net profi
 t of USD 0.21 million (Rs. 0.14 crores) for the previous year. The
 Company has 25 ANDAs approvals, 30 pending approvals and 30 fi lings
 under development. Steady flow of product approvals from this pipeline
 is expected to sustain growth momentum.
 
 Laboratorios Torrent S.A. de C.V. (LTSA)
 
 During the year, LTSA earned revenues of Mexican Peso 69.50 million (Rs.
 25.54 crores) as compared with Mexican Peso 1.68 million (Rs. 0.60
 crores) for the previous year. Net loss for the year was at Mexican
 Peso 2 million (Rs. 0.66 crores) as against a loss of Mexican Peso 17.23
 million (Rs. 6.20 crores) for the previous year.
 
 CORPORATE SOCIAL RESPONSIBILITY
 
 The Company is conscious about its social obligations and has been
 taking various social and community initiative with special focus on
 health and education. The Company has actively supported the Torrent
 Groups initiatives to expand the U N Mehta Institute of Cardiology and
 Research Centre and to take patient care effectively. The Company has
 contributed Rs. 275 lacs during the year and cumulatively Rs. 675 lacs
 toward this project.
 
 In education fi eld, your Company has taken up a project to re-build &
 expand primary & middle school infrastructure & improve the quality of
 education imparted by the school at village Indrad, Gujarat with an
 outlay of Rs. 400 lacs. It has also adopted a primary school at village
 Bhud, Baddi, Himachal Pradesh.
 
 INSURANCE
 
 The Companys plant, property, equipments and stocks are adequately
 insured against major risks. After taking into account all the relevant
 factors, including the risk benefit trade-off, the Company has
 consciously decided not to take insurance cover for loss of profit
 under the Consequential Loss (Fire) Policy. The Company also has
 appropriate liability insurance covers particularly for product
 liability and clinical trials. The Company has also taken Directors
 and Offi cers Liability Policy to provide coverage against the
 liabilities arising on them.
 
 DIRECTORS
 
 During the year under review, Samir Mehta was appointed as Executive
 Vice Chairman of the Company with effect from 1st August, 2010 for a
 period of fi ve years by pre closing his earlier terms of appointment
 as Managing Director of the Company.
 
 Kiran Karnik has resigned from the directorship of the Company with
 effect from 23rd October, 2010. The Board places on records its
 appreciation for the contribution made by Mr. Karnik during his tenure
 as a Director.
 
 Shailesh Haribhakti and Renu Sud Karnad were appointed as Additional
 Directors of the Company with effect from 23rd October, 2010 and 18th
 April, 2011 respectively. It is proposed to appoint them as directors
 of the Company, liable to retire by rotation, at the ensuing Annual
 General Meeting.
 
 Markand Bhatt and Sanjay Lalbhai are liable to retire by rotation at
 the ensuing Annual General Meeting and being eligible have been
 proposed for re-appointment.
 
 Brief resumes of the directors being appointed/ re-appointed together
 with other relevant details form part of the Notice of the ensuing
 Annual General Meeting. The Board recommends their appointment/
 reappointment.
 
 CORPORATE GOVERNANCE
 
 As required by Clause 49 of the listing agreement, a separate report on
 corporate governance forms part of the Annual Report. A certifi cate
 from the statutory auditors of the Company regarding compliance of
 conditions of corporate governance forms a part of this report as Annex
 3.
 
 AUDITORS
 
 The term of appointment of Deloitte Haskins & Sells, Ahmedabad (Firm
 Registration No. 117365W), statutory auditors of the Company will
 expire at the ensuing Annual General Meeting. The Company has received
 a certifi cate from them about their eligibility for appointment as
 statutory auditors as per Section 224(1B) of the Companies Act, 1956.
 The Audit Committee in their meeting held on 28th May, 2011 has
 recommended the appointment of Deloitte Haskins & Sells, Ahmedabad
 (Firm Registration No. 117365W) as statutory auditors of the Company
 for the year 2011-12.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, ETC.
 
 A statement containing the necessary information required under the
 Companies (Disclosure of Particulars in the Report of Board of
 Directors) Rules, 1988 is annexed to this report as Annex 1.
 
 PARTICULARS OF EMPLOYEES
 
 The information required under Section 217(2A) of the Companies Act,
 1956, read with Companies (Particular of Employees) Rules, 1975 as
 amended, forms part of this report as Annex 2. Having regards to the
 provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, this
 Annual Report is being sent to all shareholders excluding the said
 Annexure. Any shareholder interested in obtaining the particulars may
 obtain it by writing to the Company Secretary at the registered offi ce
 of the Company.
 
 APPRECIATION AND ACKNOWLEDGEMENTS
 
 Your Directors appreciate the trust reposed by the medical fraternity
 and patients in the Company and look forward to their continued
 patronage. The Directors are also grateful and pleased to place on
 record their appreciation for the excellent support, guidance and
 cooperation extended by the Government of India, Government of Gujarat,
 Government of Himachal Pradesh, Government of Sikkim, Gujarat Urja
 Vikas Nigam Limited, Himachal Pradesh State Electricity Board, other
 Central and State Government Bodies and Authorities, Financial
 Institutions and Banks. The Board also expresses its appreciation of
 the understanding and support extended by the shareholders and
 employees of the Company.
 
                                        For and on behalf of the Board
 
 Ahmedabad                                                Sudhir Mehta
 
 28th May, 2011                                               Chairman