Dear Members,
 
 The Directors have pleasure in presenting the Twelfth Annual Report of
 the Company along with the Audited Accounts for the financial year
 ended March 31, 2011.
 
 FINANCIAL PERFORMANCE
 
                                                       (Rs. in millions)
 
                                                               Fifteen
                                           Year ended     Months ended
                                                March            March
                                              31,2011          31,2010
 
 Consolidated
 
 Income                                        37,671           45,309
 
 Profit before Depreciation, Interest & Tax     9,246            8,527
 
 Profit/(Loss) Before Exceptional Items & Tax   6,775            3,093
 
 Exceptional Items                             (5,732)         (12,949)
 
 Profit/(Loss) Before Tax                       1,043           (9,856)
 
 Provision for Taxation (Expense)/Credit          (86)            (167)
 
 Share of Profit/(Loss) from Associates           (52)              16
 
 Net Profit/(Loss)                                905          (10,007)
 
 Standalone
 
 Income                                        17,720           19,019
 
 Profit Before Depreciation, Interest & Tax     4,096            4,850
 
 Profit/(Loss) Before Exceptional Items & Tax   1,608            1,372
 
 Exceptional Items                             (2,929)          (9,305)
 
 Profit/(Loss) Before Tax                      (1,321)          (7,933)
 
 Provision for Taxation (Expense)/Credit           —                (9)
 
 Profit/(Loss) After Tax                       (1,321)          (7,942)
 
 As previous period figures are for fifteen months, the same are not
 comparable. However, on a year on year basis, for the year ended March
 31, 2011, the Company registered 3% growth in consolidated turnover to
 Rs. 37,671 million and 15% growth in standalone turnover to Rs. 17,720
 million. The Profit before depreciation, interest and tax on a
 consolidated basis grew from Rs. 8,527 million to Rs. 9,246 million thereby
 registering a healthy growth of 40% and profit after tax on
 consolidated basis was Rs. 905 million as compared to a loss of Rs. 10,007
 million for the corresponding period. On a standalone basis, there was
 a loss after tax of Rs. 1,321 million.
 
 DIVIDEND AND RESERVES
 
 In view of the loss incurred during the financial year ended March 31,
 2011, no amount is transferred to the General Reserve and the directors
 do not recommend any dividend on equity shares and preference shares
 for the year ended March 31, 2011.
 
 FINANCIAL RESTRUCTURING
 
 The Corporate Debt Restructuring (CDR) has been substantially
 implemented, save for complete settlement of FCCBs and certain disputed
 derivatives. The Company''s performance has been better than the
 projections envisaged under the CDR and the Company is regular in the
 debt servicing provided under the CDR Scheme.
 
 In case of the Zero Coupon Foreign Currency Convertible Bonds (FCCBs)
 issued by the Company, the CDR Scheme had considered the settlement
 comprehensively. One of the significant holders of the Bonds had
 accepted the restructuring provided under the CDR Scheme. For other
 bondholders who did not accept the settlement provided under CDR,
 subject to they withdrawing the winding-up petition, a settlement was
 arrived wherein the Outstanding FCCBs were to be exchanged with new
 FCCBs and the shareholders had also approved the same and consent terms
 were also signed. However, the Trustees to the bondholders,
 subsequently disagreed to withdraw the winding-up petition.
 Subsequently, the Hon''ble High Court of Bombay, admitted the winding-up
 petition.  Pursuant to an appeal filed by the Company the divisional
 bench of the Hon''ble Bombay High Court has granted an ad-interim relief
 while requiring the Company to deposit a sum of Rs. 1,150 million with
 the court, which has been complied with.
 
 During the year, one of the Company''s wholly owned subsidiary Viz.
 Wockhardt France (Holdings) S.A.S and some of its subsidiaries, were
 placed in a ''Safeguard'' proceeding under a local administrator, to
 enable a comprehensive restructuring of the operation and the financial
 liabilities thereof and the same is under implementation.
 
 DEMERGER OF NUTRITION BUSINESS OF VINTON HEALTHCARE LIMITED
 
 The Hon''ble High Court of Delhi vide its order dated April 28, 2011
 sanctioned the Scheme of Arrangement U/s. 391 to 394 of the Companies
 Act, by way of demerger of Nutrition Business of Vinton Healthcare
 Limited, a wholly owned subsidiary of the Company into Wockhardt
 Limited. The appointed date for the Scheme is January 1, 2011.
 
 CHANGES IN CAPITAL STRUCTURE
 
 During the year 2010-2011, the Company allotted 130,888,983
 Non-Convertible Cumulative Redeemable Preference Shares of Rs. 5/- each
 and 22,386,344 Optionally Convertible Cumulative Redeemable Preference
 Shares of Rs. 5/- each aggregating to Rs. 666.38 millions in terms of
 approved CDR package dated July 4, 2009. The Authorised Share capital
 of the Company was increased from Rs. 9,250/- millions to Rs. 11,250/-
 millions. There was no change in paid up equity share capital of the
 Company.
 
 DIRECTORS
 
 Mr. Shekhar Datta and Dr. Huzaifa Khorakiwala retire by rotation as
 directors at the upcoming Annual General Meeting and being eligible,
 offer themselves for re-appointment. The Board recommends their
 appointment at the forthcoming Annual General Meeting. As required
 under clause 49 of the listing agreement, brief information about them
 is as under:
 
 Mr. Shekhar Datta has been a director of the Company since February 25,
 2000. He is an engineering graduate from London. He was a past
 president of Confederation of Indian Industry and the Bombay Chamber of
 Commerce. He is on the Boards of Vesuvius India Limited and Triveni
 Engineering & Industries Limited. He is also a member of Audit and
 Investor Grievance Committee of Vesuvius India Limited. He holds 600
 Equity Shares of the Company.
 
 Dr. Huzaifa Khorakiwala was appointed as an Executive Director since
 March 31, 2009. He is a Commerce graduate from India and has done his
 Management Education at the Yale University, USA. Dr. Huzaifa
 Khorakiwala had joined Wockhardt in 2000 as Chief Operating Officer and
 has been handling various Wockhardt functions and businesses like
 International Business, Corporate social responsibility and Corporate
 Administration. He is also heading Wockhardt Foundation, an NGO as its
 Chief Executive Officer. He is on the Boards of Wockhardt Hospitals
 Limited, Merind Limited, Wockhardt Maharashtra Hospital Limited and
 Inspiration Cafee Private Limited. He holds 2,16,000 Equity Shares of
 the Company.
 
 AUDITORS
 
 M/s Haribhakti & Co., Chartered Accountants, Statutory Auditors of the
 Company, retire at the conclusion of the ensuing Annual General Meeting
 and being eligible, offer themselves for re-appointment. They have
 expressed their willingness to act as Auditors of the Company, if
 appointed, and have further confirmed that the said appointment would
 be in conformity with the provisions of Section 224 (1B) of the
 Companies Act, 1956. The Board recommends their appointment.
 
 AUDITORS'' REPORT
 
 (a) With regard to point no. 5(a) of the Auditors Report, please refer
 to the explanation given under the heading Financial Restructuring in
 this directors'' report and note 32 of the standalone financial
 statements.  Further, as regards to point no. 5(b) of the Auditors
 Report, necessary explanation has been provided under the heading
 Financial Restructuring and note no. 36 and 37 of the standalone
 financial statements.  In respect of point 5(c) of the Auditors Report,
 the Company has given a corporate guarantee for the loan of US$ 250
 million availed by its wholly owned subsidiary - Wockhardt EU
 Operations (Swiss) AG. As lenders aggregating 69 per cent of the loan
 by value have agreed for the rescheduling, under the provisions of the
 loan agreement majority (which is 66 2/3 per cent) of the lenders have
 agreed for the rescheduling. Further, the borrower is in discussion
 with the balance lenders for rescheduling and as none of the balance
 lenders have till date not disagreed with the rescheduling the
 management is of the view that all the lenders will agree to the
 rescheduling.
 
 (b) Point 6 of the Auditors Report
 
 The Company has charged the crystallized derivative losses to the
 Profit & Loss Account and some of the documentation trail is being
 co-related, for which the task force formed by the Company is taking
 necessary actions,
 
 (c) Point 7 of the Auditors Report
 
 Certain derivatives/hedging contracts entered into prior to March 31,
 2010 had been unilaterally terminated by banks/financial institutions.
 The Company has disputed the same and continues to treat the demand of
 Rs. 3,322.51 million as a contingent liability and has not acknowledged
 as debt, since the liability cannot be currently ascertained even on a
 best effort basis till the final outcome of the matter.
 
 The Company is of the view that these are contingent liabilities as
 these arise from past events and existence of which will be confirmed
 only by the occurrence or non-occurrence of one or more uncertain
 future events not wholly within control of the Company and therefore,
 has not acknowledged these claims against the Company as debts.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors,
 based on the representation received from the operating management,
 confirm that:
 
 - in the preparation of annual accounts, applicable accounting
 standards have been followed along with proper explanation relating to
 material departure;
 
 - in order to provide a true and fair view of the state of affairs of
 the Company as on March 31, 2011 and the loss for the year ended on
 that date, reasonable and prudent judgments and estimates have been
 made and generally accepted accounting policies have been selected and
 consistently applied;
 
 - for safeguarding the assets of the Company and for preventing and
 detecting any material fraud and irregularities, proper and sufficient
 care has been taken for maintenance of adequate accounting records in
 accordance with the provisions of the Companies Act, 1956;
 
 - the annual accounts presented to the members have been prepared on
 going concern basis.
 
 FIXED DEPOSITS
 
 During the year under review, no fixed deposits were accepted by the
 Company.
 
 PARTICULARS OF EMPLOYEES
 
 Information as prescribed under Section 217 (2A) of the Companies Act,
 1956 (the Act), read with the Companies (Particulars of Employees)
 Rules, 1975, amended from time to time forms part of this report. As
 per the provisions of Section 219(1 )(b)(iv) of the Act, the Report and
 Accounts are being sent to the shareholders of the Company excluding
 the statement of particulars of employees under Section 217(2A) of the
 Act. Any shareholder interested in obtaining a copy of the statement
 may write to the Company Secretary at the Registered Office of the
 Company.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
 EARNINGS & OUTGO
 
 The information pursuant to 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, relating to the Conservation of
 Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
 are provided in Annexure A to this report.
 
 LEGAL COMPLIANCE
 
 The Ministry of Corporate Affairs vide its circular dated February 8,
 2011, has granted general exemption under section 212(8) of the
 Companies Act, 1956 to the Companies with regard to attaching of the
 balance sheet, profit and loss account and other documents of the
 Subsidiary Companies for the financial year ended March 31, 2011 to
 this report. The annual accounts of subsidiaries will be available for
 inspection by any member of the Company at the registered office of the
 Company and also at the registered office of the concerned
 subsidiaries.  The annual accounts of the subsidiary companies and
 detailed information will be made available to the members of the
 company and subsidiaries upon receipt of request from them. A statement
 pursuant to the provisions of Section 212(1)(e) of the Companies Act,
 1956 and the summary of the key financials of the company''s
 subsidiaries are included in this Annual Report. Pursuant to Clause 32
 of the Listing Agreement and Accounting Standard AS-21, the Audited
 Consolidated Financial statements for the financial year ended March
 31, 2011 forms part of this Annual Report.
 
 SECRETARIAL AUDIT
 
 As directed by Securities and Exchange Board of India (SEBI)
 secretarial audit is being carried out at the specified period by the
 practicing company secretary. The findings of the secretarial audit
 were entirely satisfactory.
 
 MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE
 
 A detailed report on Corporate Governance along with the certificate on
 compliance with the conditions of corporate governance under clause 49
 of the Listing agreement and Management Discussion and Analysis Report
 are given separately in this Annual Report.
 
 ACKNOWLEDGEMENTS
 
 Your Directors acknowledge the impeccable service rendered by the
 employees of the Company at all levels towards its overall success. The
 Directors also take this opportunity to place on record their
 appreciation to the stakeholders, bankers and members of medical
 profession for their continued support to the Company.
 
                                     For and on behalf of the Board
 
                                              DR. H. F. KHORAKIWALA
                                                           Chairman
 
 Mumbai, May 19, 2011