ELDER PHARMACEUTICALS LIMITED ANNUAL REPORT 2011-2012 CHAIRMAN'S REPORT Dear Shareholders, It is a pleasure writing to you at the end of another good year for the Company, which saw us deliver industry-leading performance on double-digit growth. Strong sales growth enabled us to exceed our strategic and financial goals despite the challenging external environment. The year saw us entrench ourselves even more firmly in the industry, as a durable, sustainable and growth-led Company delivering exceptional value to stakeholders year after year. Business Overview Our growth trajectory for more than two decades, has been mapped by our strong focus on developing, marketing and distributing safe and innovative pharmaceuticals that help to improve the quality of life of patients. This strategy has enabled us to deliver long-term, profitable returns to our investors, value to our partners and rewarding careers to our employees. Riding on our long-term strategy and our unceasing commitment to international grade quality, we have established a proven track record in terms of our product portfolio - existing and pipeline products, industry experience, as well as sales and marketing expertise. We are focussed on continued expansion of our product scale and depth, with commensurate focus on quality sustenance, to propel our future growth. This focus steered your Company's financial and operational performance during the year gone by. We crossed the prestigious Rs. 1,000 crore mark on a consolidated basis and our revenues stood at Rs. 1,334.78 crore. The profit after tax clocked was Rs. 72.26 crore. Launch of several new products - a mix of proprietary and in-licenced, facilitated the expansion of our brand strength across our niche therapeutic areas. We strategically capitalised on our flagship brands by introducing product extensions - an approach that has always worked in your Company's favour in the past. In geographical terms, our focus on the domestic markets continued, with our rural and mass marketing division Elvista driving growth. Internationally, our revenues are led by your Company's 100% subsidiary NeutraHealth. Future Forward The strong growth witnessed by your Company during the year under review has set the pace for future growth and value-delivery. The fundamentals are in place and your Company is well equipped to take on the challenging demands of the future on the strength of its skilled and creative R&D team and its state-of-the-art infrastructure. Our well-recognised market presence, coupled with a strong product portfolio which is being continuously marked up with newer brands, together with technical prowess built on efficient manufacturing capabilities, places us in a strong position in the industry. What augments our growth capacity is the high quality of our production, cost effectiveness and a well established marketing and distribution network. Our expanding customer base consistently drives our growth focus, enabling us to achieve greater brand equity as we continue to surge on our path to progress. Going ahead, these pillars of our growth trajectory will help us surge on to greater heights, breaking new boundaries and seizing more emerging opportunities in proprietary as well as in-licensing products. In conclusion Before I conclude, I would like to assure all of you of our steady and resolute commitment to continue to create value for you. We appreciate the confidence that you have reposed in us and earnestly look forward to your continued support and encouragement in the time to come. I also take this opportunity to thank the Board for their invaluable guidance and support and the employees of Elder Pharma for their undaunted commitment, incredible dedication and valuable contribution. Warm Regards, Jagdish Saxena Chairman