|UNITED STATES
    SECURITIES AND EXCHANGE COMMISSION 
    WASHINGTON, D.C. 20549
|--------------------------------------------------------------------------------
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|FORM 10-K/A
    Amendment No. 1                                                 
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|Commission File No. 0-24676                                                     
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|CARACO PHARMACEUTICAL LABORATORIES, LTD.                                        
|(Exact name of registrant as specified in its charter)                          

|                         |  |                                     
|------------------------ |  | ------------------------------------
|Michigan                 |  | 38-2505723                          
|(State of Incorporation) |  | (I.R.S. Employer Identification No.)

|1150 Elijah McCoy Drive, Detroit, MI  48202
|-------------------------------------------
|(Address of principal executive office)    
|                                           
|(313) 871-8400                             
|(Registrants telephone number)            
|                                           

| | Securities Registered Pursuant to Section 12(b) of the Exchange Act:
| | --------------------------------------------------------------------
| |                                                                     
| | Title of Each Class 
      to be so Registered                      
| |                                                                     
| |                                                                     
| | Common Stock, No Par Value                                          

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|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Securities Registered Pursuant to Section 12(g) of the Exchange Act:  None.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes    No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is
not contained herein, and will not be contained, to the best of registrants knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments
to this Form 10-K.
Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule
12b-2)

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|Yes  No
  The aggregate market value of the voting common stock held by non-affiliates, based on the last sale
    price of the common stock on June 30, 2004, as reported on the American Stock Exchange, was $90,511,898.
  Indicate the number of shares outstanding of each of the registrants classes of Common Stock,
as of the latest practicable date.
As of April 26, 2005, there were 26,360,294 shares of common stock outstanding
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|CARACO PHARMACEUTICAL LABORATORIES, LTD.Amendment No. 1 to the Annual Report of Form 10-KFor the Fiscal Year ended December 31, 2004EXPLANATORY NOTE
We are filing this Amendment No. 1 to our Annual Report on Form 10-K for the fiscal year ended December
31, 2004, as filed with the U.S. Securities and Exchange Commission on March 15, 2005 to include
(i) Managements Report On Internal Control Over Financial Reporting and the related
Report Of The Registered Public Accounting Firm, required by Item 308(b) of Regulation
S-K as permitted by paragraph (b) of the conditions of the Order Under Section 36 of the Securities
Exchange Act of 1934 Granting an Exemption from Specified Provisions of Exchange Act Rules 13a-1
and 15d-1 (Release No. 34-50754, November 30, 2004) and (ii) Part III information.
This Amendment does not affect the original financial statements or footnotes as originally filed.
This amendment does not reflect events occurring after the original filing of the Form 10-K, and
does not modify or update the disclosures therein in any way other than as required to reflect the
amendment as described above and set forth below. Accordingly, this Form 10-K/A should be read in
conjunction with our other filings made with the Securities and Exchange Commission subsequent to
the filing of the original Annual Report on Form 10-K, including any amendments to those filings.
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|Item 9A.   Controls and Procedures.
a.             The term disclosure
controls and procedures is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange
Act of 1934 (the Exchange Act). These rules refer to the controls and other procedures
of a company that are designed to ensure that information required to be disclosed by a company in
the reports that it files under the Exchange Act is recorded, processed, summarized and reported
within required time periods. Our Chief Executive Officer, who is also our Chief Financial Officer,
has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period
covered by this report (the Evaluation Date), and has concluded that, as of the Evaluation
Date, our disclosure controls and procedures are effective in providing him with material information
relating to the Company known to others within the Company which is required to be included in our
periodic reports filed under the Exchange Act.
b.             There has been no change
in the Companys internal control over financial reporting that occurred during the quarter
ended December 31, 2004 that materially affected, or is reasonably likely to materially affect, the
Companys internal control over financial reporting.
Managements Report On Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial
reporting as defined in Rules 13a-l5(f) or 15d-l5(f) under the Securities Exchange Act of 1934. The
Companys internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles.
All internal control systems, no matter how well designed, have inherent limitations. Because of these
inherent limitations, internal control over financial reporting can provide only reasonable assurance
with respect to financial statement preparation and presentation, and may not prevent or detect misstatements.
Projections of any evaluation of effectiveness to future periods are subject to the risk that controls
may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Our management is also required to assess and report on the effectiveness of our internal control over
financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002. In connection
therewith, we are required to maintain evidential matter, including documentation, to provide reasonable
support for such assessment. We began initial compliance efforts for Section 404 in June 2004 even
though at that time management and the Company were not certain as to whether the Company would be
deemed an accelerated filer required to comply with Section 404 in 2004. Ultimately,
after finally determining that the Company was an accelerated filer, we found ourselves
with insufficient time to be fully in compliance. Accordingly, although management selected the framework
set forth by the Committee of Sponsoring Organizations of the Treadway Commissions in its Internal
Control-Integrated Framework to make its assessment and report as required by Section 404, and management
and the Company worked diligently to implement this framework to enable management to complete its
assessment on the Companys internal control over financial reporting for the year ended December
31, 2004, in accordance with Section 404, we were left in a situation where although most of the
documentation and testing of process level and entity level controls were in place, because such
documentation and testing were not fully completed, management could not assess and report on
the Companys internal control over financial reporting for our fiscal year ended December 31, 2004. As a result, our independent public accounting firm, Rehmann Robson, has issued a disclaimer opinion,
set forth below, stating that it does not express an opinion as to managements assessment of
the Companys internal control over financial reporting as of December 31, 2004.
Our managements inability to complete an assessment of our internal control over financial reporting
in accordance with Section 404 for the year ended December 31, 2004, and Rehmann Robsons disclaimer
opinion, do not necessarily imply that a significant deficiency or material weakness exists in our
internal control over financial reporting. A material weakness is a significant deficiency, or combination
of significant deficiencies, that results in more than a remote likelihood that a material misstatement
of the financial statements will not be prevented or detected. Our management is not aware of any
material weaknesses in the Companys internal control over financial reporting, and nothing
has come to the attention of
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|management which causes management to believe that any material inaccuracies or errors exist in the
Companys financial statements as of December 31, 2004.
Our Chief Executive Officer, who is also our Chief Financial Officer, has completed the certification
required to be filed as an exhibit to this Report (See Exhibit 31.1) relating to the design of our
disclosure controls and procedures and the design of our internal control over financial reporting.
This officer believes the certification to be accurate, despite our inability to complete the assessment
of the Companys internal control over financial reporting as required by Section 404 of the
Sarbanes Oxley Act for the fiscal year ended December 31, 2004, because we did have processes and
procedures in place during 2004 that management believes were sufficient to provide reasonable assurance
regarding the reliability of the Companys financial reporting and the preparation of the Companys
financial statements for external purposes in accordance with generally accepted accounting principles.In addition, notwithstanding its disclaimer opinion, Rehmann Robson has advised our audit
committee of the board of directors that such disclaimer does not affect its unqualified report on
our consolidated financial statements as of and for the year ended December 31, 2004.
Report of Independent Registered Public Accounting Firm
Board of Directors and Shareholders
Caraco Pharmaceutical Laboratories, Ltd.
We were engaged to audit managements assessment included in the accompanying Managements
Report On Internal Control Over Financial Reporting that Caraco Pharmaceutical Laboratories, Ltd
(Caraco) (a subsidiary of Sun Pharmaceutical Industries Limited) maintained effective
internal control over financial reporting as of December 31, 2004 based on criteria established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).  Caracos management is responsible for maintaining effective internal control over financial
reporting and for its assessment of the effectiveness of internal control over financial reporting.
Management selected the framework noted in the first paragraph for its evaluation of the effectiveness
of the Companys internal control, however, although management documented and tested most process
level and entity level controls, because such documentation and testing were not fully completed,
management could not assess and report on the Companys internal control over financial reporting
for the year ended December 31, 2004.
A companys internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles. A companys
internal control over financial reporting includes those policies and procedures that (1) pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions
and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the Company are being made
only in accordance with authorizations of management and directors of the Company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the Companys assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject
to the risk that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.
Since management was unable to render an opinion on its assessment of internal control over financial
reporting and we were unable to apply other procedures to satisfy ourselves as to the effectiveness
of the Companys internal control over financial reporting, the scope of our work was not sufficient
to enable us to express, and we do not express, an opinion either on managements assessment
or on the effectiveness of the Companys internal control over financial reporting.
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|We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the balance sheets of Caraco as of December 31, 2004 and 2003, and the related statements
of operations, stockholders equity (deficit) and cash flows for each of the three years in
the period ended December 31, 2004 and our report dated March 4, 2005 expressed an unqualified opinion
on those financial statements.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    

| | Rehmann Robson
| | --------------
| |               
| | April 25, 2005
| | Troy, Michigan

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|Item 9B.   Other Information.
  The disclosures in Item 10 and 11 below with respect to the appointment of Daniel H. Movens as CEO
and as a director of Caraco effective May 2, 2005, and with respect to the employment agreement between
Mr. Movens and Caraco are hereby incorporated by reference.
PART III
Item 10.   Directors and Executive Officers of the Registrant.
Caracos Board of Directors is divided into three classes with each class of directors elected
to a three-year term of office. At each annual meeting of shareholders, shareholders elect one class
of directors for a three-year term to succeed the class of directors whose term of office expires
at that meeting. Set forth below is a list of the directors of Caraco as of April 29, 2005. As previously
disclosed, on April 15, 2005, the Board appointed Daniel H. Movens as a director of the 2005 class
effective May 2, 2005, and nominated him, together with Sailesh T. Desai and Georges Ugeux, for election
as directors at the 2005 Annual Meeting to serve until 2008, and the election and qualification of
their successors. Effective May 2, 2005, Mr. Movens was also appointed Caracos CEO. For additional
disclosure about Mr. Movens, see Executive Officers below.
INCUMBENT DIRECTORS TERMS EXPIRING 2005
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

|Nominees         |  | Age |  | Principal Occupation and Business
      Experience During Past 5 Years and other Directorships                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | Director Since
|---------------- |  | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------
|                 |  |     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |               
|                 |  |     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |               
|Sailesh T. Desai |  | 50  |  | Mr. Desai has served as a full time director of Sun Pharmaceutical Industries Limited (Sun Pharma), since 1999, responsible for domestic marketing of pharmaceutical formulations. From 1994 to 1998, Mr. Desai was the principal shareholder and Managing Director of Milmet Laboratories, Pvt. Ltd., a manufacturer and marketer of ophthalmic solutions which was organized under the laws of the Commonwealth of India and merged into Sun Pharma in 1998.                                                                                                                                                                                                                                                                                                                          |  | 2000          
|                 |  |     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |               
|Georges Ugeux    |  | 60  |  | In October 2003, Mr. Ugeux founded Galileo Global Advisors LLC (a company offering strategic advice on international business development). From September 1996 to October 2003, Mr. Ugeux was a Group Executive Vice President, International and Research and a member of the Office of the Chief Executive of NYSE. From 1995 until September 1996, Mr. Ugeux served as President of the European Investment Fund. From 1992 until 1995, Mr. Ugeux was President of Kidder, Peabody Europe as well as Managing Director while serving as a member of the Managing Committee of the Board of Directors of Kidder, Peabody Inc. From 1988 until 1992, Mr. Ugeux was Group Finance Director at Societe Generale de Belgique, a Belgian diversified industrial and financial conglomerate. |  | 2004          

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|DIRECTORS TERMS EXPIRING 2006
|------------------------------
|                              

|Nominees          |  | Age |  | Principal Occupation and Business
      Experience During Past 5 Years and other Directorships                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | Director Since
|----------------- |  | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------------
|                  |  |     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |               
|                  |  |     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |               
|Dilip S. Shanghvi |  | 49  |  | Mr. Shanghvi has served as Chairman of the Board of Directors of Caraco since 1997. Mr. Shanghvi is
the founder of Sun Pharma, its Managing Director since its inception in 1993, responsible for marketing,
research and development and human resource development, and its Chairman since 1999. Mr. Valia is
Mr. Shanghvis brother-in-law.                                                                                                                                                                                                               |  | 1997          
|                  |  |     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |               
|Jitendra N. Doshi |  | 54  |  | Mr. Doshi has been the Chief Executive Officer of Caraco since September 2003 the Chief Financial Officer
since November 2002 and its Chief Operating Officer since August 30, 2002. Mr. Doshi commenced employment
with Caraco as its Senior Vice President  Commercial in April 2001. From September 1999 to April 2001, Mr. Doshi was employed by Sun Pharma as General Manager  Operations. From 1991 to 1999, Mr. Doshi was Managing Director of Aqua Bearing Ltd., an auto parts manufacturer organized under the laws of the Commonwealth of India. |  | 2001          

|                              
|------------------------------
|DIRECTORS TERMS EXPIRING 2007
|                              

|Nominees          |  | Age |  | Principal Occupation and Business
      Experience During Past 5 Years and other Directorships                                                                                                                                                                                                                                              |  | Director Since
|----------------- |  | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------
|                  |  |     |  |                                                                                                                                                                                                                                                                                                                                             |  |               
|                  |  |     |  |                                                                                                                                                                                                                                                                                                                                             |  |               
|Timothy S. Manney |  | 46  |  | Since May 2002, Mr. Manney has been President and Director of Synova, Inc. (a privately-held information
technology staffing and creative  services consulting firm). From 1990 to May 2002, Mr. Manney served as the Chief Financial Officer of Covansys Corporation (a publicly-held information technology solutions company).          |  | 2004          
|                  |  |     |  |                                                                                                                                                                                                                                                                                                                                             |  |               
|Sudhir Valia      |  | 48  |  | Mr. Valia has worked for Sun Pharma as a full time director responsible for finance, commercial, operations,
projects and quality control since December 1993. Prior to then, Mr. Valia was a chartered accountant
in private practice. Mr. Valia is a qualified chartered accountant in India. Mr. Shanghvi is Mr.
Valias brother-in-law. |  | 1997          

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Audit Committee
The Board maintains an Audit Committee. The Audit Committee is responsible for selecting, evaluating,
retaining and, where appropriate, replacing Caracos independent auditors. Generally, the Audit
Committee monitors the integrity of Caracos financial statements and the independence and qualifications
of the independent auditors. The Audit Committee is governed by a written charter. The Audit Committee
has been established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934,
as amended. The current members of the Audit Committee are Mr. Manney and Mr. Ugeux. Mr. Manney is
the committees Chairman. Each of these members is independent under Section 121(A) of Amex
listing standards currently in effect. The Board of Directors has determined that Mr. Manney is an
audit committee financial

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|expert.  The Board of Directors is currently actively searching for a third independent director
to serve on its Board of Directors to replace Mr. William C. Brooks ( who resigned as a director
on April 14, 2005), in order to bring it into compliance with the Amex requirements which require
three independent directors on its Audit Committee. There have been no material changes to the procedures
by which shareholders may recommend nominees to Caracos Board of Directors as previously disclosed
in Caracos 2004 Proxy Statement.
EXECUTIVE OFFICERS
The following table provides information about Caracos executive officers who are not a directors as of April 26, 2005.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

|Name                     |  | Age |  | Five-Year Business Experience                                                                                                                                                                                     |  | Executive
      Officer
    Since
|------------------------ |  | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------
|                         |  |     |  |                                                                                                                                                                                                                   |  |                                  
|                         |  |     |  |                                                                                                                                                                                                                   |  |                                  
|Robert Kurkiewicz        |  | 54  |  | Commenced employment with Caraco as its Vice President  Quality Assurance in November 1993 and was
promoted to Sr. Vice President - Technical, October 1998.                                                     |  | 1993                             
|                         |  |     |  |                                                                                                                                                                                                                   |  |                                  
|Gurpartap Singh Sachdeva |  | 36  |  | Vice President - Sales and Marketing since September 2003 and National Sales and Marketing Manager
since September 2000. From May 1998 to September 2000, Mr. Singh was the Manager of Bulk Drugs for
Sun Pharma. |  | 2005                             

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
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|As disclosed above, on April 15, 2005 the Compensation Committee and the Board of Directors approved
the appointment of Mr. Daniel H. Movens, age 47, as Caracos new CEO effective May 2, 2005.
Effective on May 2, 2005, Mr. Jitendra N. Doshi will continue as Caracos Chief Operating Officer
and Chief Financial Officer.
Mr. Movens business experience is as follows: Mr. Movens joined Anda, Inc., a wholly-owned
subsidiary of Andrx. Corporation, in 1995 and was named President of Anda, Inc., in February, 2004,
after holding a number of positions of increasing responsibility, including Executive Vice President
of Operations. For fifteen (15) years before joining Anda, Inc., Mr. Movens worked in the retail
pharmacy industry, working for independent pharmacies and pharmacy chains. During 2004, Caraco sold
$5.4 million of products to Anda, Inc.
Code of Business Conduct and Ethics
The Company has adopted a Code of Business Conduct and Ethics (the Code) applicable to
its directors, officers and employees. A copy of the Code is available at no charge by contacting
the Human Resources Manager, Michael Perry, at 1150 Elijah McCoy Drive, Detroit, MI 48202, or by
telephone: (313) 871-8400 or by email: mperry@caraco.com.
Section 16(A) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires that Caracos directors, executive
officers and persons who own more than ten percent of a registered class of Caracos equity securities file reports of stock ownership and any subsequent changes in stock ownership with
the SEC not later than specified deadlines. To Caracos knowledge, based solely on a review of the copies of such reports furnished to Caraco, all directors,
executive officers and persons who own more than ten percent of Caracos equity securities complied with applicable Section 16(a) filing requirements, except as follows: Sun
Pharma filed a late report with respect to four transactions in which it acquired Series B preferred
stock.

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|Item 11. Executive Compensation.
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows, as to the Chief Executive Officer and as to the other executive officers
whose salary and bonus exceeded $100,000 during the last fiscal year, information concerning all
compensation paid for services to Caraco during the last three fiscal years:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                           |  | Annual Compensation |  | Long Term Compensation | 
|-------------------------- |  | ------------------- |  | ---------------------- | 
|                           |  |                     |  |                        | 
|Name and PrincipalPosition |  | Year                |  | Salary                 | 
|                           |  |                     |  | ($)                    | 
|                           |  |                     |  |                        | 
|Jitendra N. Doshi          |  | 2004                |  | 159,854                | 
|Chief Executive Officer    |  | 2003                |  | 134,758                | 
|                           |  | 2002                |  | 109,769                | 
|                           |  |                     |  |                        | 
|Robert Kurkiewicz          |  | 2004                |  | 142,604                | 
|Sr. Vice President         |  | 2003                |  | 134,208                | 
|Technical                  |  | 2002                |  | 127,492                | 

|(1)           $380.00 per month was given for
car allowance.
Option Grants in Last Fiscal Year
No stock options were granted in 2004 to the named executive officers.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
The following table sets forth information for the named executive officers with regard to the aggregate
stock options exercised during the year ended December 31, 2004, and the stock options held as of
December 31, 2004.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Name              |  | Shares 
      Acquired
      on 
      Exercise |  | Value 
      Realized
      ($)(1) |          | Number of Securities 
      Underlying Unexercised 
      Options at FY-End (#) 
      Exercisable/Unexercisable |                 | Value of Unexercised In-the-
      Money Options at FY-End ($)
      (2) Exercisable/Unexercisable |                    
|----------------- |  | ----------------------------------------------- |  | ---------------------------------- | -------- | ---------------------------------------------------------------------------------------------------------------- | --------------- | -------------------------------------------------------------------------------------------------- | -------------------
|                 
|Jitendra N. Doshi |  | 50,000                                          |  |                                    | $367,000 |                                                                                                                  | 25,000 / 50,000 |                                                                                                    | $ 207,500 / 415,000
|                 
|Robert Kurkiewicz |  | 0                                               |  |                                    | $0       |                                                                                                                  | 6,000 / 4,000   |                                                                                                    | $ 52,500 / 35,000  

|(1) | The value is based on the difference between the exercise prices and the closing sales prices on the
  dates of exercise.                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                           
|(2) | The value is based on the difference between the exercise prices and the closing sale price of Caracos common stock on December 31, 2004.

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|Employment Agreements
  Jitendra N. Doshi, the Chief Executive Officer of Caraco, entered into an employment agreement with
Caraco dated August 30, 2002 in his capacity as Chief Operating Officer. The employment agreement
provides Mr. Doshi with a salary at the rate of $130,000 annually, which may be reviewed and adjusted,
and a car allowance of $380.00 per month. The employment agreement is for a term of five (5) years,
commencing on January 1, 2002 and ending on December 31, 2006. The agreement automatically renews
for successive one-year periods unless terminated by Caraco or Mr. Doshi upon ninety (90) days notice.
In the event of the death or Disability (as such term is defined in the employment agreement) or
if Caraco terminates Mr. Doshi for just cause (as such term is defined in the employment agreement),
Mr. Doshi shall be entitled to his base salary and to benefits earned by him prior to the date of
death, Disability or termination for just cause. In the event Caraco terminates Mr. Doshi without
cause or if Mr. Doshi terminates for cause (as such term is defined in the employment agreement),
he will receive base salary payments and his premium payments for health insurance benefits for six
(6) months from the date of termination. In addition, any stock options that would become available
for exercise at the end of the year during which such termination occurred shall immediately vest.
In October 2003, Mr. Doshi became the interim Chief Executive Officer of Caraco. In October, 2004,
the Compensation Committee increased his salary to $165,000 annually.
Robert Kurkiewicz, the Senior Vice President - Technical, entered into a five-year employment agreement
on November 22, 1993 which was amended on January 1, 1999 to extend the term until January 1, 2003
and which was further amended on August 30, 2002 to extend the term until December 31, 2007. The
agreement, as amended, provides Mr. Kurkiewicz with a salary of $129,800 per year, which may be reviewed and adjusted, and a car allowance of $380.00
per month. The agreement provides that at the end of the term, it is renewable for successive one-year
terms. In the event that Caraco terminates the agreement without cause, Mr. Kurkiewicz is entitled
to receive monthly base salary payments and his premium payments for health insurance benefits for
six (6) months from the date of termination. In addition, any stock options that would become available
for exercise at the end of the year during which such termination occurred shall immediately vest.
In October 2004, the Compensation Committee increased his salary to $145,000 annually.
Gurpartap Singh Sachdeva, the Vice President of Sales and Marketing, entered into an employment agreement
with Caraco dated Februrary 1, 2005. The employment agreement provides Mr. Sachdeva with a salary
at the rate of $135,000 annually, which may be reviewed and adjusted, and a car allowance of $380.00
per month. The employment agreement is for a term of five (5) years, commencing on February 1, 2005.
The agreement automatically renews for successive one-year periods unless terminated by Caraco or
Mr. Sachdeva upon ninety (90) days notice. In the event of the death or Disability (as such term
is defined in the employment agreement) or if Caraco terminates Mr. Sachdeva for just cause (as such
term is defined in the employment agreement), Mr. Sachdeva shall be entitled to his base salary and
to benefits earned by him prior to the date of death, Disability or termination for just cause. In
the event Caraco terminates Mr. Sachdeva without cause or if Mr. Sachdeva terminates for cause (as
such term is defined in the employment agreement), he will receive base salary payments and his premium
payments for health insurance benefits for six (6) months from the date of termination. In addition,
any stock options that would become available for exercise at the end of the year during which such
termination occurred shall immediately vest.
As disclosed above, the Compensation Committee appointed Daniel H. Movens as CEO of Caraco effective
May 2, 2005. Caraco and Mr. Movens have entered into an employment agreement effective as of May
2, 2005, the terms of which are summarized below.
Under the employment agreement, Mr. Movens agrees to serve as Chief Executive Officer of the Company
for period of thirty-six (36) calendar months which will automatically renew at the end of thirty-six
(36) months. However, after the initial thirty-six (36) month period, each party may terminate the
agreement upon ninety (90) days written notice to the other party. Mr. Movens shall receive a base
salary of $390,000, may receive a bonus of up to fifty (50%) percent of the base compensation (with
twenty-five (25%) percent of the base compensation guaranteed only for the first year), and shall
receive stock options for 40,000 shares upon the effective date at the fair market value of the common
stock on the day immediately preceding the effective date and stock options for 40,000 shares of
the Company annually thereafter (all such options to vest over a period of three years from the date
of their respective grants), a stock grant on the effective date of 45,000 shares of the Companys
common stock (which will vest over a period of three (3) years), and a stock grant of an
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9
|-



|additional 10,000 shares if the employment agreement is renewed. In addition, the Company will reimburse
Mr. Movens for his reasonable relocation expenses; any such expense over and above $50,000 will require
prior approval of the Company.
If Mr. Movens is terminated without cause and for a reason other than for nonperformance, if Mr. Movens
terminates for good reason, or if there is a change in control (as defined in the employment agreement)
of the Company or Sun Pharmaceutical Industries Limited and Mr. Movens terminates within six months
thereof because he reasonably determines that there has been a significant change in the nature and
scope of his duties and powers, he is entitled to a lump sum severance payment in an amount equal
to 1 1⁄2 times the highest annual base and last earned bonus(es), together with certain benefits
for a period of at least twelve (12) months, and all stock options and stock grants shall be deemed
vested in full. With respect to any such amounts which are considered to be parachute payments
under Internal Revenue Code §280G, the Company shall pay an additional amount representing a
gross-up of any federal, state and local income tax liability arising from such payments. After one
year of employment with the Company, the amount of this severance could be reviewed to be increased
to two (2) times the highest annual base and last earned bonus(es).
If Mr. Movens becomes disabled (as defined in the employment agreement), or dies, the Company shall
be obligated to pay accrued unpaid salary and benefits for a one (1) year period following such date
of disability or death. If Mr. Movens quits before the first anniversary of the employment agreement,
he will receive no severance compensation. If Mr. Movens quits after one (1) year of service, the
Company shall pay him his base salary for a maximum period of one (1) year following such termination,
or until he finds another position, whichever comes first. In addition, if Mr. Movens is terminated
for nonachievement of performance objectives, to be agreed upon, during his first year of employment,
the Company will pay him his base salary for a maximum period of one (1) year, or until he finds
another position, whichever comes first, and one-third (1/3) of the stock options and stock grants
awarded to him will vest. If Mr. Movens is terminated for nonachievement of performance objectives,
to be agreed upon, following his first year of employment, the Company will pay him 1 1⁄2
times his base salary for a maximum period of one (1) year or until he finds another position, whichever
comes first, and all of his stock options and stock grants awarded to him will vest. Mr. Movens
is under no duty to seek other employment or to attempt in any way to reduce any amounts payable
to him by means of mitigation or set off, except, as to set-off only, if he terminates without good reason
or if he is terminated for non-achievement of performance objectives.
The Company and Mr. Movens have also entered into a Confidentiality And Non-Competition agreement,
pursuant to which Mr. Movens agrees not to solicit any customer of the Company for business in competition
with the Company, or solicit for employment any other employee of the Company, for a period of two
(2) years following his termination. In addition, for a period of twelve (12) months following the
termination of his employment, Mr. Movens agrees not to engage in any activity within North America
which is competitive in any material respect with the business of the Company, including generic
pharmaceutical manufacturing and marketing, but excluding wholesale distribution. In addition, for
a period of twelve (12) months following termination of his employment, Mr. Movens agrees that he
will not perform services for any business or organization, whether as an employee, consultant, advisor,
independent contractor, or otherwise, which engages in any activity within North America that is
competitive in any material respect with the business conducted by the Company, including any business
engaged in generic pharmaceutical manufacturing and marketing and any other business in which the
Company generates more than ten (10%) percent of its gross revenues.
Change in Control Arrangements
Under our 1999 Equity Participation Plan, options granted under that plan will become fully exercisable
following certain changes in control of our company, such as:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

| |  | A person, other than Sun Pharma, becomes the owner of a majority of the outstanding shares of our company;                                                                                                                                                                                                     
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                
| |  | A public announcement is made of a tender or exchange offer by any person, other than Sun Pharma, for
50% or more of the outstanding shares of our company;                                                                                                                                                    
| |   |                                                                                                                                                                                                                                                                                                                
| |  | The shareholders of our company approve a merger or consolidation with any other corporation or entity,
unless, following the merger, the shares outstanding immediately before the merger continue to represent
a majority of the outstanding shares of the surviving entity immediately following the merger;
| |   |                                                                                                                                                                                                                                                                                                                
| |  | Where shareholders approve a plan of complete liquidation of our company or an agreement for the sale
of disposition by the company of all or substantially all of the assets of our company; or                                                                                                               
| |   |                                                                                                                                                                                                                                                                                                                
| |  | Certain changes in the composition of our Board of Directors.                                                                                                                                                                                                                                                  

|10
|--



|Compensation Committee Interlocks and Insider Participation
As noted, Mr. Dilip S. Shanghvi is the Chairman of our Compensation Committee and the Chairman of the
Board of Caraco, a non-executive position. Mr. Shanghvi is also the Managing Director of Sun Pharma.
As disclosed above, Sun Pharma engages in a number of transactions with Caraco. See Item 13.
Certain Relationships and Related Transactions.
Compensation of Directors
Directors who are employees of Caraco or who are directors and/or employees of Sun Pharma and its affiliates
do not receive additional compensation for their service on the Board of Directors and its Committees.
Each non-employee director receives an annual retainer of $12,000, a fee of $1,500 if in person ($500
if by telephone) for each attended Board and Committee meeting (with $500 extra for the chairman
of the Committee), a one time grant of 3,000 stock options upon initial election and an annual grant
of 1,500 stock options on each anniversary date of election. No additional Committee fees are paid
if the Committee meets on the same day as the Board meets. Non-employee directors are also reimbursed
for out-of-pocket expenses incurred in connection with attending Board and Committee meetings.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The SEC requires that Caraco provide information about any shareholder who beneficially owns more than
5% of Caracos common stock. The following table provides the required information, as of April 26, 2005, about
the shareholders (who are not officers or directors) known to Caraco to be the beneficial owner of
more than 5% of Caracos common stock. Caraco relied solely on information furnished by its transfer agent and Schedule 13Ds.
Amount and Nature of Beneficial Ownership as of April 26, 2005
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

|                     | Name and Address of
  Beneficial Owner |  | Amount and Nature of
  Beneficial Ownership |  | Percent
  of Class
|-------------------- | -------------------------------------- |  | ------------------------------------------- |  | ------------------
|                    
|                     |                                        |  |                                             |  |                   
|                     | Sun Pharma.                            |  | 16,868,680(1)                               |  | 63.1%             
|                     | Corp Comm Dept, Acme Plaza             |  |                                             |  |                   
|                     | Andheri Kurla Road, Andheri (East)     |  |                                             |  |                   
|Mumbai 400 059 India |                                        |  |                                             | 

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(1) | Sun Pharma directly owns 8,382,666 shares of common stock of Caraco and beneficially owns 8,486,014
  shares registered in the name of Sun Global, whose address is Akara Building, 24 DeCastro Street,
  Wickhams Clay 1 Road, Town Tartola, British Virgin Islands. In addition, Sun Pharma and its affiliates
  own 5,984,000 shares of Series B preferred stock which are convertible into shares of common stock
  three years from the date of their respective issuance or upon a change in control. The earliest
  any shares of such series B preferred stock becomes convertible is December 2006.

|11
|--



|SECURITY OWNERSHIP OF MANAGEMENT AND DIRECTORS
The following table contains information, as of April 26, 2005, about the number of shares of Caracos common stock beneficially owned by incumbent directors, the executive officers and by all current
directors, nominees and executive officers as a group. The number of shares of common stock beneficially
owned by each individual includes shares of common stock which the individual can acquire by June
26, 2005 through the exercise of any stock option or other right. Unless indicated otherwise, each
individual has sole investment and voting power (or shares those powers with his or her spouse) with
respect to the shares of common stock listed in the table.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

|Name of Beneficial Owner                                              |  | Amount and Nature of
      Beneficial Ownership |       | Percentage of Class | 
|--------------------------------------------------------------------- |  | ----------------------------------------------- | ----- | ------------------- | 
|                                                                      |  |                                                 |       |                     | 
|Jitendra N. Doshi(1)                                                  |  | 60,000                                          | (2)   | *                   | 
|                                                                      |  |                                                 |       |                     | 
|Dilip S. Shanghvi(3)                                                  |  | 0                                               | (4)   | *                   | 
|                                                                      |  |                                                 |       |                     | 
|Robert Kurkiewicz(1)                                                  |  | 10,013                                          | (5)   | *                   | 
|                                                                      |  |                                                 |       |                     | 
|Guarpartap Singh Sachdeva (1)                                         |  | 9,800                                           | (6)   | *                   | 
|                                                                      |  |                                                 |       |                     | 
|Sailesh T. Desai (3)                                                  |  | 0                                               | (4)   | *                   | 
|                                                                      |  |                                                 |       |                     | 
|Timothy S. Manney (7)                                                 |  | 1,000                                           | (8)   | *                   | 
|                                                                      |  |                                                 |       |                     | 
|Georges Ugeux (9)                                                     |  | 1,000                                           | (10)  | *                   | 
|                                                                      |  |                                                 |       |                     | 
|Sudhir Valia (3)                                                      |  | 0                                               | (4)   | *                   | 
|                                                                      |  |                                                 |       |                     | 
|All current executive officers and directors as a group
  (8 persons) |  | 96,813                                          | (12)* | *                   | 

|
|
|

|*   | Less than 1.0% of the outstanding shares                                                         
|--- | -------------------------------------------------------------------------------------------------
|    |                                                                                                  
|(1) | The mailing address of each of these holders is 1150 Elijah McCoy Drive, Detroit, Michigan 48202.
|    |                                                                                                  
|(2) | Includes no stock options that are currently exercisable.                                        

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | The mailing address of S. Desai, D. Shanghvi and S. Valia is Sun Pharmaceutical Industries Limited,
  Corp Comm Dept, Acme Plaza, Andheri Kurla Road, Andheri (East), Mumbai 400 059 India.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(4) | Excludes 16,868,680 shares of common stock and 5,984,000 shares of Series B preferred stock beneficially
  owned by Sun Pharma and its affiliates. (See footnote 1 under  Security Ownership of Certain Beneficial Owners and Transactions of Directors, Executive Officers and Certain Beneficial Holders of Caraco.) Messrs.
  Desai, Shanghvi and Valia are directors of, and Mr. Shanghvi, together with his associate companies,
  is also the majority shareholder of, Sun Pharma, and, therefore, may be deemed to share investment
  control over the shares of common stock held by Sun Pharma and its affiliates. Each of Messrs. Desai,
  Shanghvi and Valia disclaims beneficial ownership of the shares of common stock beneficially owned
  by Sun Pharma and its affiliates.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(5) | Includes stock options that are currently exercisable to purchase 8,000 shares of common stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(6) | Includes stock options that are currently exercisable to purchase 2,000 shares of common stock and
  1,800 shares held in the name of his wife..                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

|12
|--



|(7)  | Mr. Manneys mailing address is c/o Synova, Inc., 1000 Town Center, Suite 700, Southfield, MI
  48075.          
|---- | ----------------------------------------------------------------------------------------------------------------
|     |                                                                                                                 
|(8)  | Includes stock options that are currently exercisable to purchase 1,000 shares of common stock.                 
|     |                                                                                                                 
|(9)  | Mr. Ugeuxs mailing address is c/o Galileo Global Advisors, One Rockefeller Center, New York,
  New York, 10020.
|     |                                                                                                                 
|(10) | Includes stock options that are currently exercisable to purchase 1,000 shares of common stock.                 

|                                            
|--------------------------------------------
|Equity Compensation Plan Information12-31-04
|                                            

|Plan category                                                    |  | Number of securities
      to
      be issued upon exercise 
      of outstanding options, warrants and rights. |  | Weighted-average
      exercise price of outstanding options, warrants and rights. |  | Number of securities
      remaining available for
      future issuance under equity
      compensation plans
      (excluding securities
      reflected in column (a))
|---------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                 |  |                                                                                                                 |  |                                                                                    |  |                                                                                                                                                                          
|                                                                 |  | (a)                                                                                                             |  | (b)                                                                                |  | (c)                                                                                                                                                                      
|                                                                 |  |                                                                                                                 |  |                                                                                    |  |                                                                                                                                                                          
|Equity compensation
      plans approved by security holders     |  | 181,600                                                                                                         |  | $1.39                                                                              |  | 2,684,000                                                                                                                                                                
|                                                                 |  |                                                                                                                 |  |                                                                                    |  |                                                                                                                                                                          
|Equity compensation
      plans not approved by security holders |  | 200,000                                                                                                         |  | $3.50                                                                              |  |                                                                                                                                                                         
|                                                                 |  |                                                                                                                 |  |                                                                                    |  |                                                                                                                                                                          
|Total                                                            |  | 381,600                                                                                                         |  | $2.03                                                                              |  | 2,684,000                                                                                                                                                                

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|The equity compensation plan approved by security holders consists of the 1999 Equity Participation
Plan. Options under the 1999 Plan were generally granted as incentive stock options to employees
(279,000) and as non-qualified stock options to former directors and consultants (37,000). .
Item 13. Certain Relationships and Related Transactions.
The following discloses transactions during 2004, 2003 and 2002 and proposed transactions between Caraco
and several of the incumbent directors, executive officers and security holders who beneficially
hold in excess of five percent of our outstanding shares:
On November 21, 2002, we entered into a products agreement with Sun Global. Under the agreement, which
was approved by our independent directors, Sun Global has agreed to provide us with 25 new generic
drugs over a 5-year period. In exchange for each new generic drug transferred to us by Sun Global
which passes a bioequivalency test, we issue Sun Global 544,000 shares of Series B preferred stock
During 2004 and 2003, Sun Global earned 3,808,000 and 544,000 shares of Series B preferred stock for seven
products and one product transfers, respectively, as provided under the November 2002 products agreement.
During 2002, we issued to Sun Pharma 1,632,000 shares of our common stock for three product transfers
under the former 1997 products agreement with Sun Pharma.
During 2003 and 2002, we borrowed approximately $0.6 million and $1.4 million, respectively, from Sun
Pharma, and in 2003 we repaid the entire balance of all of our outstanding loans from Sun Pharma
in the amount of approximately $10 million. Prior to April 1, 2001, the interest rate was 10%; thereafter
it was 8%.

|13
|--



|During 2004, 2003 and 2002, we purchased approximately $16.7 million, $10.3 million and $2.4 million,
respectively, of our materials from Sun Pharma. We intend to continue to purchase raw materials from
Sun Pharma in 2005.
During 2004, 2003 and 2002, Caraco purchased at Sun Pharmas cost, approximately $0.61 million,
$0.51 million, and $0.31 million, respectively, of equipment from Sun Pharma. We intend to continue
to purchase equipment from Sun Pharma in 2005.
We entered into two non-cancelable operating leases during 2000 with Sun Pharma to lease production
machinery. The leases each require rental payments of $4,245 and expire during 2005.
Caraco entered into a manufacturing and supply agreement and a distribution and sale agreement in December
2004 with an affiliate of Sun Pharma. No fees were earned by Caraco under these agreements in
2004.
Item 14.  Principal Accountant Fees and Services.
Rehmann Robson audited the financial statements of Caraco for the year ended December 31, 2004.
Audit and Non-Audit Fees
Aggregate fees for professional services rendered for Caraco by Rehmann Robson as of the years ended
December 31, 2004 and 2003 are set forth below. The aggregate fees included in the Audit category
are fees billed for the fiscal years for the audit of Caracos annual financial statements and review of quarterly
financial statements and statutory and regulatory filings or engagements. The aggregate fees included
in each of the other categories are fees billed in the fiscal years.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

| |                          |  | 2004 |         | 2003 |   |        
| | ------------------------ |  | ---- | ------- | ---- | - | -------
| | Audit
      Fees         |  | $    | 123,000 |      | $ | 95,500 
| | Audit-Related
      Fees |  | $    | 7,280   |      | $ | 13,875 
| | Tax
      Fees           |  |      | 10,245  |      | $ | 15,450 
| | All
      Other Fees     |  | $    | 0       |      | $ | 0      
| | Total                    |  | $    | 140,525 |      | $ | 124,825

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Audit Fees for the years ended December 31, 2004 and 2003 were for professional services rendered for the audits
of the financial statements of Caraco, quarterly review of the financial statements included in Caracos
Quarterly Reports on Form 10-Q, or services that are normally provided by Rehmann Robson in connection
with statutory and regulatory filings or engagements for such years, including Rehmanns Robsons
audit of managements assessment of internal control over financiall reporting as of December
31, 2004.
Audit-Related Fees for the years ended December 31, 2004 and 2003 were for assurance and related services by Rehmann
Robson that are reasonably related to the performance of the audit or review of Caracos financial
statements.
Tax Fees for the years ended December 31, 2004 and 2003 were for professional services rendered by Rehmann
Robson for services related to tax compliance, tax advice and tax planning.
None of the services described above was approved by the Audit Committee under the de minimus exception provided by Rule 2-01(c)(7)(i)(C) under Regulation S-X.
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors

|14
|--



|Pursuant to its charter, the Audit Committee pre-approves all audit and non-audit services provided
by the independent auditors prior to the engagement of the independent auditors with respect to such
services.
  SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized
on the 29th day of April, 2005.
CARACO PHARMACEUTICAL
LABORATORIES, LTD.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

| |  | /s/  Jitendra N. Doshi     
| |  | ---------------------------
| |  |                            
| |  | Chief Executive Officer and
| |  | Chief Financial Officer    

|                                                                                                                                                           
|-----------------------------------------------------------------------------------------------------------------------------------------------------------
|Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons in the capacities on April 29, 2005.

|                        |                                                         
|----------------------- | --------------------------------------------------------
|*                       | Chairman of the Board                                   
|                        |                                                         
|Dilip S. Shanghvi       |                                                         
|                        |                                                         
|/s/ Jitendra N. Doshi   | Director, CEO and CFO (and Principal Accounting Officer)
|                       
|Jitendra N. Doshi       |                                                         
|                        |                                                         
|*                       | Director                                                
|                        |                                                         
|Sailesh T. Desai        |                                                         
|                        |                                                         
|*                       | Director                                                
|                        |                                                         
|Timothy Manney          |                                                         
|                        |                                                         
|*                       | Director                                                
|                        |                                                         
|Georges Ugeux           |                                                         
|                        |                                                         
|*                       | Director                                                
|                        |                                                         
|Sudhir V. Valia         |                                                         
|                        |                                                         
|* /s/ Jitendra N. Doshi | Attorney-in-Fact                                        
|                       
|Jitendra N. Doshi       |                                                         

|15
|--



|             
|-------------
|             
|EXHIBIT INDEX
|             

| | 3.01  | Registrants Amended and Restated Articles of Incorporation, as amended. (1)                                                                                                                                                                                                                                 
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                              
| | 3.02  | Certificate of Amendment to the Articles of Incorporation filed February 13, 1997. (2)                                                                                                                                                                                                                       
| |       |                                                                                                                                                                                                                                                                                                              
| | 3.03  | Certificate of Amendment to the Articles of Incorporation filed February 10, 2000. (3)                                                                                                                                                                                                                       
| |       |                                                                                                                                                                                                                                                                                                              
| | 3.04  | Certificate of Determination of Rights, Privileges and Preferences Series B Preferred Stock. (4)                                                                                                                                                                                                             
| |       |                                                                                                                                                                                                                                                                                                              
| | 3.05  | Registrants Amended and Restated Bylaws. (12)                                                                                                                                                                                                                                                               
| |       |                                                                                                                                                                                                                                                                                                              
| | 10.01 | Development and Loan Agreement, dated August 10, 1990, between Registrant and The Economic Development Corporation of the City of Detroit; First Amendment thereto, dated December 3, 1990; Second Amendment thereto, dated April 2, 1993; and supplemental letter, dated October 26, 1993 and agreement. (5)
| |       |                                                                                                                                                                                                                                                                                                              
| | 10.02 | Amended and Restated Section 108 Guaranty Agreement, dated as of August 10, 1990, of C. Arnold Curry and Cara Jean Curry in favor of the Economic Development Corporation of the City of Detroit. (5)                                                                                                        

| |       |                                                                                                                                                                                                                         
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.03 | Registrants Amended and Restated Purchase Money Promissory Note, dated as of August 10, 1990,
  in the principal amount of $157,500, to the order of the Economic Development Corporation of the
  City of Detroit. (5)
| |       |                                                                                                                                                                                                                         
| | 10.04 | Registrants Amended and Restated Section 108 Note, dated August 10, 1990 in the principal amount
  of $9,000,000, payable to The Economic Development Corporation of the City of Detroit. (5)                          
| |       |                                                                                                                                                                                                                         
| | 10.05 | Amended and Restated Purchase Money Mortgage, dated as of August 10, 1990, between Registrant as mortgagor
  and The Economic Development Corporation of the City of Detroit. (5)                                       
| |       |                                                                                                                                                                                                                         
| | 10.06 | Agreement, dated as of October 1, 1993, among Registrant and Non-Affilate (5)                                                                                                                                           
| |       |                                                                                                                                                                                                                         
| | 10.07 | Employment Agreement, dated October 22, 1993, of Robert Kurkiewicz. (5)                                                                                                                                                 
| |       |                                                                                                                                                                                                                         
| | 10.08 | Stock Purchase Agreement by and between Caraco Pharmaceutical Laboratories, Ltd. and Sun Pharmaceutical Industries, Ltd. dated as of April 23, 1997. (6)                                                                
| |       |                                                                                                                                                                                                                         
| | 10.09 | Products Agreement by and between Caraco Pharmaceutical Laboratories, Ltd. and Sun Pharmaceutical Industries, Ltd. dated as of April 23, 1997. (6)                                                                      
| |       |                                                                                                                                                                                                                         
| | 10.10 | Registration Rights Agreement dated as April 1997. (6)                                                                                                                                                                  
| |       |                                                                                                                                                                                                                         
| | 10.11 | Second Note and Mortgage Modification Agreement (7)                                                                                                                                                                     
| |       |                                                                                                                                                                                                                         
| | 10.12 | Amendment to Employment Agreement of Robert Kurkiewicz dated as of April 1, 1997. (7)                                                                                                                                   
| |       |                                                                                                                                                                                                                         
| | 10.13 | 1999 Equity Participation Plan. (8)                                                                                                                                                                                     
| |       |                                                                                                                                                                                                                         
| | 10.14 | Agreement between ICICI Bank and the Corporation for the term loan of $5 million. (9)                                                                                                                                   
| |       |                                                                                                                                                                                                                         
| | 10.15 | Term Sheet between Bank of Nova Scotia and the Corporation for the term loan of $12.5 million. (10)                                                                                                                     
| |       |                                                                                                                                                                                                                         
| | 10.16 | Renewal to Employment Agreement of Robert Kurkiewicz dated as of January 1, 1999. (3)                                                                                                                                   

|16
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| | 32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section
  1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (+)
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                 
|-----------------
|                 
|+  Filed herewith
|                 

| | (1) | Incorporated by reference from Exhibits to Registrants Form 10-KSB filed on or about March 30,
  1995 as Commission File no. 0-24676.                                
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                       
| | (2) | Incorporated by reference from Exhibits to Registrants Form 10-KSB filed on or about March 31,
  1997, as Commission File No. 0-24676.                               
| |     |                                                                                                                                                                       
| | (3) | Incorporated by reference from Exhibits to Pre-Effective Amendment No. 1 to Form SB-2 filed on September
  4, 2002 as Commission File No. 333-91968.                  
| |     |                                                                                                                                                                       
| | (4) | Incorporated by reference from Exhibits to Registrants Form 10-KSB filed on or about March 31,
  2003, Commission File No. 0-24676.                                  
| |     |                                                                                                                                                                       
| | (5) | Incorporated by reference from Exhibits to Registrants Registration Statement on Form SB-2, as
  amended, filed on November 5, 1993 as Commission File No. 33-71398C.
| |     |                                                                                                                                                                       
| | (6) | Incorporated by reference from Exhibits to Registrants Form 10-QSB filed on November 14, 1997
  as Commission File No. 0-24676.                                      
| |     |                                                                                                                                                                       
| | (7) | Incorporated by reference from Exhibits to Registrants Form 10-KSB filed on or about March 31,
  1998, as Commission File No. 0-24676.                               
| |     |                                                                                                                                                                       
| | (8) | Incorporated by reference from Exhibit A to Registrants Proxy Statement dated April 28, 1999
  as Commission File No. 0-24676.                                       
| |     |                                                                                                                                                                       
| | (9) | Incorporated by reference from Exhibits to Registrants Form 10-QSB filed on August 14, 2000 as                                                                       

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