IPCA LABORATORIES LIMITED

AUDITOR REPORT
To The Members of IPCA LABORATORIES LIMITED We have audited the attached Balance Sheet of Ipca Laboratories Limited as at 31st March, 2011 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure Statement on the matters specified in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred to above, we report that:

IPCA LABORATORIES LIMITED

1.

We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit. In our opinion, proper books of accounts as required by law have been kept by the company so far as it appears from our examination of the books.

2.

3. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts. 4. In our opinion, the Balance Sheet, Profit and Loss Account and the Cash Flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956. 5. On the basis of the written representation received from the directors and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2011 from being appointed as a director in terms of Clause (g) of Sub-section (1) of section 274 of the Companies Act, 1956. 6. In our opinion and to the best of our information and according to the explanation given to us, the accounts and the other notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view. a) in the case of Balance Sheet, of the State of Affairs of the Company as at 31st March, 2011 and

IPCA LABORATORIES LIMITED

b) in the case of Profit and Loss Account, of the Profit for the year ended on 31st March 2011. c) in the case of the Cash Flow Statement, of the cash flow for the year ended on that date. For Natvarlal Vepari & Co. Chartered Accountants Firm Registration No. 106971W N. Jayendran Partner M.NO.40441 MUMBAI, May 24, 2011

REPORT ON CORPORATE GOVERNANCE

IPCA LABORATORIES LIMITED

Pursuant to Clause 49 of the Listing Agreement, given below is a report on the Corporate Governance in the Company:

1. Companys philosophy of Corporate Governance is to ensure :

1.

That the Board and top management of the Company are fully appraised of the affairs of the Company that is aimed at assisting them in the efficient conduct of the Companys business so as to meet Companys obligation to the stakeholders. That the Board exercises its fiduciary responsibilities towards shareholders and creditors so as to ensure high accountability. That all disclosure of information to present and potential investors is maximised. That the decision making process in the organisation is transparent and are backed by documentary evidences.

2.

3.

4.

2. Board of Directors
The present strength of the Board of Directors of the Company is eight directors of which one is promoter Managing Director, one professional non-promoter Joint Managing Director, one promoter Executive Director, one promoter nonexecutive Director and four nonexecutive independent directors with independent judgment in the deliberation and decision of the Board. The Chairman of the Board is a non-executive independent Director. 5 (Five) board meetings were held during the Financial Year 2010-11. The dates on which the said meetings were held are as follows: 10th April, 2010

IPCA LABORATORIES LIMITED

22nd October, 2010 28th May, 2010 25th January, 2011 29th July, 2010 The last Annual General Meeting of the Company was held on 29th July, 2010. Details of composition and category of Directors, their attendance at the Board meetings, Annual General meeting and shareholding of each Director are as follows

Name of director

Category

No of Board Attendance of meetings last AGM (29/07/2010) Held Attend ed 5 5 YES

No. of equity share held in the company 12,500

Mr. R.S. Hugar

Mr. Premchand Godha Mr. M. R. Chandurkar Mr. A. K. Jain

Mr. Pranay Godha

Chairman, NonExecutive, Independent Director Managing Director, Promoter Director Non-Executive, Promoter Director Joint Managing Director, Professional, NonPromoter Executive Director, Promoter Director

No. of option held under ESOS 2006 NIL

YES

28,51,340

NIL

5 5

5 5

YES YES

21,51,000 66,000

NIL NIL

YES

6,06,000

NIL

IPCA LABORATORIES LIMITED

Mr. Babulal Jain Dr. V. V. Subba Rao Mr. Anand T. Kusre

Non-Executive, 5 Independent Director Non-Executive, 5 Independent Director Non-Executive 5 Independent Director

5 5 4

YES YES YES

25,500 12,500 NIL

NIL NIL NIL

NOTE: Mr. Premchand Godha, Managing Director and Mr. Pranay Godha, Executive Director are related to each other. None of the other Directors are related to each other. Mr. A. K. Jain, the incumbent Executive Director was re-designated as Joint Managing Director at the meeting of the Board of Directors of the Company held on 29th July, 2010. The above shareholding as at 31st March, 2011 is in respect of shares which are held by Directors as a first holder and in which shares they have beneficial interest.