The Directors have pleasure in presenting the Sixty-fourth Annual
 Report of the Company together with the audited accounts for the year
 ended 31st March, 2012. The audited figures given hereunder for the
 financial year under review and the previous period are not comparable,
 as the current period is for 12 (twelve) months from 1st April, 201 1
 up to 31st March, 2012, while the previous period was for a period of
 16 (sixteen) months from 1st December, 2009 to 31st March, 2011.
 
 FINANCIAL HIGHLIGHTS
 
                                                  (Rs in Lakhs)
 
                                           Apr 2011-         Dec 2009-
 
                                           Mar 2012          Mar 2011
 
 Revenue from Operations (Net)             58406.53          63648.41
 
 Operating and Other Income                 3841.32           2468.05
 
 Profit before non-recurring expenses      20537.59          23798.73
 
 Voluntary Retirement Scheme                  45.90            230.98
 
 Profit before Taxation                    20491.69          23567.75
 
 Provision for Tax                          6022.29           7038.45
 
 Net Profit                                14469.40          16529.30
 
 Balance brought forward from previous 
 period                                    25195.62          16124.14
 
 Profit available for appropriation        39665.02          32653.44
 
 Dividend
 
 -    Interim                                  -      3408.01
 
 -    Proposed                              4089.62   1590.40 4998.41
 
 Tax on Dividend
 
 -    Interim                                  -       548.47
               
 -    Proposed                               663.44    258.01  806.48
 Transfer to General Reserve                
                                            1446.94           1652.93
 
 Balance carried to next year              33465.02          25195.62
 
 DIVIDEND
 
 Your Directors recommend a dividend of Rs 18.00 (180%), previous year
 Rs 22.00 (220%) per equity share. If the proposed dividend is approved
 by the Shareholders at the Annual General Meeting, the total dividend
 payout will be Rs 4089.62 lakhs. Tax on dividend payout to be borne by
 the Company will aggregate Rs 663.44 lakhs.
 
 The dividend will not suffer tax in the hands of the Shareholders.
 
 DIRECTORS
 
 Mr. K. K. Maheshwari and Mr. S. S. Lalbhai retire by rotation at the
 forthcoming Annual General Meeting and being eligible, offer themselves
 for re-appointment.
 
 Mr. Sekhar Natarajan was appointed as Additional Director of the
 Company with effect from 5th August, 201 1.  In terms of Section 260 of
 the Companies Act, 1956, the term of office of Mr. Natarajan expires on
 the date of the forthcoming Annual General Meeting and he is eligible
 for appointment.
 
 Mr. S. Sridhar was appointed as Additional Director of the Company with
 effect from 21st May, 2012. In terms of Section 260 of the Companies
 Act, 1956, the term of office of Mr. Sridhar expires on the date of the
 forthcoming Annual General Meeting and he is eligible for appointment.
 
 Mr. Aijaz Tobaccowalla was appointed as Additional Director of the
 Company with effect from 28th June, 2012.  In terms of Section 260 of
 the Companies Act, 1956, the term of office of Mr. Tobaccowalla expires
 on the date of the forthcoming Annual General Meeting and he is
 eligible for appointment.
 
 Mr. Kewal Handa has resigned as the Managing Director and Director of
 the Company with efffect from end of day, 15th August, 2012. Your
 Directors wish to place on record their appreciation of the valuable
 contribution made by Mr. Handa.
 
 The Board has appointed Mr. Aijaz Tobaccowalla as Managing Director
 with effect from commencement of business, 16th August, 2012, subject
 to the approval of the Members at the forthcoming Annual General
 Meeting and also subject to the approval of the Central Government.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
 confirm that:
 
 i) in the preparation of the annual accounts, the applicable accounting
 standards have been followed;
 
 ii) appropriate accounting policies have been selected and applied
 consistently, and have made judgments and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company as at 31st March, 2012, and of the profit of the Company
 for the period 1st April, 2011 to 31st March, 2012;
 
 iii) proper and sufficient care has been taken 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;
 
 iv) the annual accounts have been prepared on a going concern basis.
 
 INFORMATION PURSUANT TO SECTION 2I7(2A) OF THE COMPANIES ACT, 1956
 
 The information required under Section 2I7(2A) of the Companies Act,
 1956, (the Act) read with the Companies (Particulars of Employees)
 Rules, 1975, as amended, forms part of this Report. However, as per the
 provisions of Section 219 (I) (b) (iv) of the Act, the Report and
 Accounts are being sent to all shareholders excluding the statement of
 particulars of employees under Section 2I7(2A) of the Act. Any
 shareholder interested in obtaining a copy of the statement may write
 to the Company Secretary at the Company''s Registered Office.
 
 CORPORATE GOVERNANCE
 
 The Management Discussion and Analysis Report and a Report on Corporate
 Governance along with a Certificate from Messrs. B S R & Associates,
 regarding compliance with the conditions of Corporate Governance
 pursuant to Clause 49 of the Listing Agreements with the Stock
 Exchanges are annexed hereto.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
 EARNINGS AND OUTGOINGS
 
 The particulars required under Section 2l7(l)(e) of the Companies Act,
 1956, read with the Companies (Disclosure of Particulars in the Report
 of Board of Directors) Rules, 1988, are annexed hereto as Annexure I.
 
 AUDITORS
 
 The Auditors, Messrs. B S R & Associates, retire at the conclusion of
 this Annual General Meeting and offer themselves for re-appointment.
 Messrs. B S R & Associates have confirmed their eligibility for
 re-appointment under Section 224(1B) of the Companies Act, 1956.
 
 Messrs. B S R & Associates, if appointed, will hold office up to the
 conclusion of the next Annual General Meeting of the Company.
 
 AUDITORS'' COMMENTS
 
 The claims under the Drug Prices Equalization Account and the comments
 of the Auditors regarding the amount payable into the Drug Prices
 Equalization Account in respect of De-methyl Chlor Tetracycline, Chlor
 Tetracycline Hydrochloride, Tetracycline Hydrochloride, Dexamethasone,
 Amoxycillin Trihydrate, Benzathine Penicillin G and their formulations
 and claims by the Government regarding non-compliance with respect to
 prices fixed under Para 8 of the Drugs (Prices Control) Order, l995,
 for Prednisolone based formulations have been explained in Notes
 26(i)(a) and (b) to the Accounts. An early resolution of this issue
 will provide much needed clarity for the future.
 
 COST AUDITORS
 
 Pursuant to the provisions of Section 233B of the Companies Act, 1956,
 companies are required to file their Cost Audit Reports within 180 days
 from the close of the financial year.
 
 The Cost Audit Report for Formulations for the financial year ended
 31st March, 2011, was filed on 26th September, 2011.
 
 The Directors have appointed Messrs. RA & Co., Mumbai, as Cost Auditors
 to conduct the cost audit of Formulations for the year ended 31st
 March, 2012.
 
 ACKNOWLEDGEMENTS
 
 Your Directors take this opportunity to thank the Management of the
 Parent Company, for their valuable guidance and support.
 
 The Directors record their thanks to the Company''s employees at all
 levels for their dedication and commitment throughout the year. The
 Directors would also like to record their thanks to the Company''s
 shareholders, bankers, financial institutions, Central and State
 Government officials, medical professionals, hospitals, research
 institutions, vendors, trade and all customers for their continued
 support and co-operation.
 
                                   On behalf of the Board of Directors
 
 Place: Mumbai                     Kewal Handa       Sekhar Natarajan
 
 Date: 28th June, 2012           Managing Director       Director