Annual Report - Glenmark Pharma - 2008-2009

GLENMARK PHARMACEUTICALS LIMITED

ANNUAL REPORT 2008-2009

DIRECTOR'S REPORT

Your Directors have pleasure in presenting their 31st Annual Report and
Audited Accounts of the Company for the year ended March 31, 2009.



FINANCIAL RESULTS

(Rs. in Million)
Standalone Consolidated
2008-09 2007-08 2008-09 2007-08
Profit before Interest,
Depreciation and Tax 3206.13 5017.61 6289.95 8463.46
Less: Interest 551.39 411.30 1404.76 631.68
Less: Depreciation 191.04 294.43 1026.83 716.80
Less: Tax (Current Year &
Deferred Tax) 281.46 421.64 754.08 793.86
Less: Exceptional Items 2.98 - 1169.55 -
Profit after Tax 2179.26 3890.24 1934.73 6321.12
Share of (Profit)/Loss of Minority - - (18.09) 0.20
Profit after Tax and
Minority Interest 2179.26 3890.24 1916.64 6321.32
Surplus brought forward from
earlier years 5636.88 2347.34 10276.66 4678.92
Profit available for
appropriations 7816.14 6237.58 12193.30 11000.24

APPROPRIATIONS

Interim Dividend on Equity Shares - 171.55 - 171.55
Dividend Tax on Interim Dividend - 29.15 - 29.15
Proposed Dividend on Equity Shares 100.21 - 100.21 -
Tax on Proposed Dividend
on Equity Shares 17.03 - 17.03 -
Transfer to Foreign Currency
Monetary Item Translation
Difference Account - - 366.12 -
Transfer to General Reserves 217.93 400.00 494.49 522.88
Balance carried to Balance Sheet 7480.97 5636.88 11215.45 10276.66
7816.14 6237.58 12193.30 11000.24

REORGANISATION OF THE BUSINESS

As part of the re-organisation, the Generics business of the Company was
transferred to its subsidiary, Glenmark Generics Ltd. on a slump sale basis
with effect from 1st April, 2008. The Previous years figures includes the
figures for generics business. Hence, the standalone figures are not
comparable.

DIVIDEND

Your Directors recommend a Dividend of 40% (Re. 0.40 per equity share of
Re.1/ each) to be appropriated from the profits of the year 2008-09 subject
to the approval of the shareholders at the ensuing Annual General Meeting.
The dividend will be paid in compliance with applicable regulations.

CONSOLIDATED ACCOUNTS

In accordance with the requirements of Accounting Standard AS-21 prescribed
by the Institute of Chartered Accountants of India, the Consolidated
Accounts for the year ended 31st March, 2009, under Indian GAAP forms part
of the Annual Report.

RESULTS OF OPERATIONS

The Company achieved consolidated Gross revenue of Rs. 21160.33 million
(Rs. 20092.01 million) registering a growth of 5.32% over the previous year
and the Consolidated operating profit before interest, depreciation and tax
was Rs. 6289.95 million as compared to Rs. 8463.46 million in the previous
year.

On standalone basis the Company achieved a gross revenue of Rs. 8661.72
million and the Standalone operating profit before interest, depreciation
and tax was Rs. 3206.13 million as compared to Rs. 5017.61 million in the
previous year.

CHANGES IN CAPITAL STRUCTURE

Issue of shares on exercise of Employees' Stock Options: During the year,
the Company allotted 500,300 Equity Shares of Re.1/- each (on pari-passu
basis) pursuant to exercise of Stock Options by the eligible employees of
the Company and its subsidiaries.

Issue of shares on Part Conversion of FCCBs:

During the year ended 31st March, 2009, the Company received notices from
Foreign Currency Convertible Bond (FCCB) holders for exercising the
conversion option in respect of 7,500 FCCBs of US$1000 each out of 100,000
FCCBs of US$ 1000 each issued by the Company. Accordingly, the Company
allotted 1,293,706 Equity shares of Re.1 each in respect of the said 7,500
FCCBs to the bondholders who exercised their option.

Issue of Securities:

The Company proposes to raise funds upto US$250 million by way of issue of
Securities (convertible and/or non-convertible) through Public/Private
Placement/QIPs. A copy of the resolution together with explanatory
statement has been mailed separately to the members for seeking their
approval by way of postal ballot at the deemed Extra-Ordinary General
Meeting scheduled to be held on 2nd September, 2009.

EMPLOYEE STOCK OPTION SCHEME

During the year, Stock Options have been issued to the employees of the
Company. On exercising the convertible options so granted, the paid-up
equity share capital of the company will increase by a like number of
shares.

The details of stock options granted by the Company are disclosed in
compliance with clause 12 of the Securities Exchange Board of India

(Employee Stock Options Scheme and Employee Stock Purchase Scheme), 1999
and set out in the Annexure-B to this Report.

LISTING AT STOCK EXCHANGES

The Equity shares of the Company continue to be listed on Bombay Stock
Exchange Ltd. and The National Stock Exchange of India Ltd. Foreign
Currency Convertible Bonds are listed on the Singapore Stock Exchange.

SUBSIDIARY COMPANIES

During the year the following subsidiaries were incorporated Viz. Glenmark
Pharmaceuticals EOOD, Bulgaria; Glenmark Therapeutics Inc. USA.; Glenmark
Pharmaceuticals SP.Z.O.O, Poland; Glenmark Distributors SP.Z.O.O, Poland;
Badatur S.A.,Uruguay; Glenmark Pharmaceuticals Egypt S.A.E, Egypt; Glenmark
Pharmaceuticals F.Z.E, UAE; Glenmark Pharmaceuticals Colombia Ltda,
Colombia; Glenmark Pharmaceuticals Peru S.A.C, Peru; Glenmark
Pharmaceuticals Mexico SA DE CV, Mexico; Glenmark Pharmaceuticals Venezuela
CA., Venezuela and Glenmark Generics Finance S.A., Switzerland. The name of
Medicamenta a.s was changed to Glenmark Pharmaceuticals SRO.

Pursuant to the provision of Section 212 (8) of the Companies Act, 1956,
the Company has obtained exemption from Ministry of Corporate Affairs, New
Delhi, vide its letter No. 47/303/2009-CL-III dated 14/05/2009 to attach
Audited Accounts of its subsidiaries together with Directors' Report and
Auditor's Report. The Audited Accounts of the subsidiaries together with
its Directors' Report and Auditor's Report are available for inspection of
members on any working day at the Corporate Office of the Company between
11 a.m. to 1 p.m.

DIRECTORS

Mr. Gracias Saldanha and Mr. N. B.Desai retire by rotation at the ensuing
Annual General Meeting and being eligible, offer themselves for
reappointment. Mr. R.V. Desai has stepped down from the board with effect
from 1st April, 2009.

Mrs. B.E. Saldanha stepped down from the board with effect from 1st April,
2009 and was re-appointed as additional director w.e.f. 14th August, 2009.

Mr. D.R. Mehta has been appointed as additional director w.e.f. 14th
August, 2009.

CORPORATE GOVERNANCE

Report on the Corporate Governance forms an integral part of this Report.
The Certificate of the Practicing Company Secretary certifying compliance
with the conditions of Corporate Governance as stipulated in Clause 49 of
the Listing Agreement with Stock Exchanges is annexed with the report on
Corporate Governance.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The management discussion and analysis report on the operations of the
company, as required under the Listing agreements with the stock exchanges
is provided in a separate section and forms a part of this report.

AUDITORS

M/s. Price Waterhouse, Chartered Accountants, Auditors of the Company,
retire at the conclusion of the ensuing Annual General Meeting and being
eligible, offer themselves for re-appointment.

NOTE ON AUDITORS REPORT

Due to economic recession and credit squeeze, the Company had to borrow
short-term funds to meet its obligations. However, the Company has already
taken appropriate measures and has sought shareholders approval for raising
of funds as mentioned elsewhere in this report.

HUMAN RESOURCES

Company's industrial relations continued to be harmonious during the year
under review.

PARTICULARS OF EMPLOYEES

Information as required under the provisions of Section 217(2A) of the Act,
read with the Companies (particulars of Employees) Rules, 1975, as amended,
are given in an Annexure forming part of this report.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION,
FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 217(1)(e) of the Companies Act,
1956, read with the Companies(Disclosure of particulars in the report of
Board of Directors) Rules, 1988 are set out in the Annexure-A to the
Directors' Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
confirm that:

(i) in the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures, if any;

(ii) appropriate accounting policies have been selected and applied
consistently and have made judgements and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of the
Company as at 31st March, 2009 and of the profit of the Company for the
year ended 31st March, 2009;

(iii) proper and sufficient care has been taken for maintenance of adequate
accounting records in accordance with the provisions of the Companies Act,
1956 for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis.

APPRECIATION AND ACKNOWLEDGEMENTS

Your Directors express their gratitude to the Company's customers,
shareholders, business partner's viz. distributors and suppliers, medical
profession, Company's bankers, financial institutions including investors
for their valuable sustainable support and Co-operation.

Your Directors commend the continuing commitment and dedication of
employees at all levels.

For and on behalf of the Board of Directors

G. Saldanha
Chairman
Mumbai,
Date: 14th August, 2009.

ANNEXURES TO THE DIRECTORS' REPORT

ANNEXURE-A

Information under Section 217(1)(e) of the Companies Act, 1956 read with
Companies (Disclosure of Particulars in the Report of the Board of
Directors) Rules, 1988 and forming part of the Directors' Report.

A. CONSERVATION OF ENERGY

Energy Generation Measures Taken:

A. Power and Fuel Consumption 2008-09 2007-2008

1. Electricity

(a) Purchased

Unit (in 000 Kwhrs) 6210.77 13091.76
Total Amount (Rs. in 000's) 27587.12 50321.42
Rate/Unit (Rs.) 4.44 3.84

(b) Own Generation

(i) Through Diesel Generator

Unit (in 000 Kwhrs) 992.99 2047.05
Units per Ltr. of Diesel Oil 3.50 3.81
Cost/Unit (Rs.) 10.64 9.12

(ii) Through Steam Turbine/Generator. NIL NIL

2. Coal NIL NIL

Qty.
Total Cost
Avg. Rate

3 Furnace Oil/Light Diesel Oil

Qty. (K. Ltr.) 54 1052.71
Total Amount (Rs. in 000's) 2395.32 20064.80
Avg. Rate (Rs. /K. Ltr.) 44.35 19.06

4 i. Internal generation

Light Diesel Oil
Qty. (In Ltr. 000's) NIL 54.000
Total Cost (Rs. in 000's) NIL 1656.592
Rate/Unit (Rs.) NIL 30.68

ii. Natural Gas

Qty. (M3 000's) NIL 1674.05
Total Cost (Rs. in 000's) NIL 20136.23
Rate/Unit (Rs.) NIL 12.03


B. Consumption

The Company manufactures several Drug Formulations in different pack sizes.
In view of this, it is impracticable to apportion the consumption and cost
of utilities to each Product/Formulation.

B. TECHNOLOGY ABSORPTION, RESEARCH AND DEVELOPMENT (R&D)

1. Specific areas in which R & D is carried out by the Company & its
subsidiaries and benefits derived as a result of the same. Formulation
Development:

a) Pharmaceutical Formulation Development:

Development of formulations as immediate release, delayed release, enteric
release, sustained release and various platform technologies. This includes
literature survey, preformulation studies, formulation and standardization
of dosage forms for selected drug molecules on laboratory scale.

R & D has developed the new formulations for new & existing molecules and
drug combinations which includes its standardization and execution at
production site, evaluation of these batches against reference samples for
pharmaceutical and bio-equivalence.

Developed technology is transferred to commercial production for following
products.

Cardiac

1. Telmisartan + Hydrochlorothiazide Tablets (80+12.5) mg

Anti Lipidemic & Anti Diabetic

1. Atorvastatin Calcium + Metformin Hydrochloride Tablets (10 mg + 1000 mg)

Dermatology

1. Sertaconazole Nitrate Cream

2. Permethrin Cream

3. New Pandalao Ointment

4. Fluocinolone + Clioquinol Ointment

5. Adapalene microspheres + Clindamycin phosphate gel

Antifungal

1. Sertaconazole tablets

Oncology

1. Pemetrexed for Injection (Under Development)

2. Bortezomib for Injection (Under Development)

3. Lenalidomide Capsules (Under Development)

4. Docetaxel Liposomal Injection (Under Development)

5. Oxaliplatin Liposomal Injection (Under Development)

Respiratory

1. Ambroxol HCl + Salbutamol DPI

2. Desloratadine nasal drop

NCE Formulation Development

1. Formulation Development for NCE 8200 - tablet batch for clinical
bridging study 50/100 mg.

2. Formulation Development NCE 4039-Tablet and capsule batches for clinical
study.

3. Formulation Development NCE 10693- Preclinical development.

4. Formulation Development NCE 15300 - Preclinical development and clinical
studies.

Formulation Development for Brazil market

1. Metformin ER tablets 500 mg

2. Cyclobenzaprine HCl Tablets 5/10 mg

3. Ciprofi brate Tablets 100 mg

4. Gabapentin Capsules 300/400 mg

5. Orlistat Capsules 120 mg

6. Mefenamic Acid + Tranexamic Acid Tablets (500+250 mg)

7. Iron Polymatose Complex + Folic acid chewable tablets

8. Iron Polymaltose Complex + Zinc Sulfate + Folic acid Capsules

9. Doxorubicin Injection (Oncology)

US market

1. Omeprazole capsule 10 mg, 20 mg ,40 mg

Packaging Material Development:

A dual pack is developed for a product called Alesa Gel which dispenses two
very effective Anti-acne formulations together just before application.
Similarly a unique pack is crafted for a niche product 'Hair 4 U' which
dispenses exactly 1 ml of the formulation providing ease in operations to
the end user.

Analytical Method Development:

Development of new analytical test procedures for establishing the quality
and setting up specification for the release testing of Dosage Forms and
Active Pharmaceutical, Finished Intermediates is the responsibility of
Analytical Method Development group at Glenmark R & D. These methods are
validated as per International Regulatory Standards.

The responsibilities of this department also include the evaluation of the
stability of the products developed at R & D under various Climatic
Conditions as ICH Guidelines of Stability. This data is used as a basis to
predict the shelf life of the products and also to prepare the stability
study protocols for the commercial products manufactured as drug
products/drug substance.

Category Method Methods Methods
Developed Validated Transferred
to the
manufacturing
Site

Oral Solid Dosages 87 46 19
Derma products 29 33 17
Oncology products 10 5 4
API 3 9 9
Documents for Drug - - 49
Substance
(STP, Specs etc.)

Process Research and Development:

In NCE process research and development, following projects have been
executed.

GRC 10693

* Developed the cost effective process for GRC-

10693.

* Other backup GRC-20015, GRC-20039, GRC-10723, GRC 10767 and GRC 20258
were synthesized in gram scale for the developmental studies.

Patent:
Filed the provisional patent on improved process of GRC 10693

TRPA1:

* Optimized and established the 10 stage process upto the common Acid
intermediate .

* Synthesised various analogues such as GRC -17362,
GRC -17428, GRC-17434, GRC-17365, GRC-17266,
GRC-17306. in gram scale for the studies

GRC 4039:

* Optimized and established the 13 stage process at laboratory.

* Successfully implemented the developed process at plant.

GRC 9332:

* Optimized and established the 9 stage process at laboratory scale.

* The process was validated on Kg scale.

GRC 15300:

* Optimized and established the 6 stage process at plant.

* Successfully implement developed process at plant for the GMP batch.

* Developed a new cost effective process (wittig Route) were in the cost
reduced by ~50%.

* Synthesised the backup molecule like GRC 15112, GRC 15116, GRC 17173 for
the studies. GRC 8200

* Developed the new cost effective process and successfully demonstrated at
plant. Both the cost and the time reduced substantially (Advanced
intermediate route)

* Synthesised and characterized the enantiomer, diasteriomers, metabolites,
and impurities of GRC 8200.

* Deuterated GRC 8200 D4 has been synthesized inmgm scale for the studies.

Critical Project

* Literature work for Fondaparinux, Retapamulin, Tigecycline, Bendamustine,
Ixabepilone, Fusidic acid, Dehydrosterone, Pemetrexed completed.

* Preliminary work was done for Pemetrexed and Sertaconazole.

* Total synthesis of Fondaparinux up to 35 Stages completed. All the
intermediates were fully characterized

In Analytical Research activities in NCE research:

a) We develop new analytical test procedures for establishing the structure
and evaluate the quality of NCE prior to initial biological screening. Then
during pre-clinical studies we generate analytical data for establishing
the quality and setting up specification for the release testing of Drug
substances. The methods used to release the drug substances to be used in
clinical trials are validated as per International Regulatory Standards.

b) We evaluate physicochemical properties of new chemical entity; do the
characterization studies, stability studies (under various Climatic
Conditions as per ICH Guidelines of Stability) and generate CMC related
information on molecules to take them in clinical phases.

Category Numbers

Methods developed 232
Methods Validated 9
Methods Transferred to the Manufacturing Sites 8
Reference Standards for NCEs 6
Stability Studies 99
Developmental Studies 18
Documents for Drug Substance
(Dossiers, Specs, TTD etc) 5

2. Future plan of action

R & D is working on new molecules in the following segment;

- Oncology Products

- Antifungal molecules

- Antibacterial molecules

- Antiasthmatic molecules

- Antidiabetic products

- Antiaging products

- Antiinfl ammatory products

- Atihyperlipidemic products

- Antiosteoporosis products

- Antiemetic products

- Sunscreens Products

- Technology - such as microspheres and aerosols foam Mousse.

- Technology - to replace solvents used in film coating by water.

- Development of formulations for Semi regulatory market.

- Development of formulations for Latin American market.

- Development of formulations for US market.

- Antihypertensive molecules

- Metered dose inhaler products for India market.

- Metered dose inhaler products for Brazil market.

- Development of specialized NDDS products for Indian/SRM .

TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION:

1. Efforts in brief towards technology absorption, adoption and innovation.

Most of our efforts in the area of technology absorption, adoption and
innovation are based on our own efforts in R & D. They include improvement
in yield and quality, improvement of processes and development of
newprocesses with validation studies.

2. Benefits derived :

Benefits derived are enhanced production of our products, improvement in
the yield and quality of products and introduction of new products, cost
reduction of products and processes without affecting the quality of the
products and process efficacy.

Our R & D Centre is recognised by D.S.I.R., Ministry of Science and
Technology, Government of India.

3. Information regarding technology imported during the last five years -
Nil.

3. Expenditure on R&D:

(Rs. in Million)
2008-09 2007-08

a) Capital Expenditure 104.46 153.41
b) Revenue Expenditure 514.58 505.69

c) Total 619.04 659.10

d) R & D Expenditure as a
percentage of total turnover 6.41% 4.63%

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

1. Activities relating to exports; initiatives taken to increase exports;
development of new export markets for products and services; and export
plans; : The Management Discussion and Analysis report forming a part of
the Directors Report deals with the same.

2. Total foreign exchange earned was Rs.2233.73 million and outflow was Rs.
528.15 million.

For and on behalf of the Board of Directors

G. Saldanha
Chairman
Mumbai
Date: 14th August, 2009.

ANNEXURE-B

Disclosure in the Directors' Report as per SEBI Guidelines:

Particulars

a. Options granted 9,900,400
b. Pricing Formula Exercise Price shall be
the latest available
closing market price of
the equity shares of
the Company, prior to
the date of grant

c. Options Vested** 4,603,300

d. Options Exercised** 1,647,640

e. Total no. of shares arising as result
of exercise of Options 1,647,640

f. Options lapsed * 4,649,800

g. Variation in terms of Options None
h. Money realised by exerise of
Options (in lakhs) 580.20

i. Total number of options in force** 3,602,960

** The number of options have been reported as on 31.03.2009

* Lapsed Options includes options cancelled/lapsed.

j. Employee wise details of options granted to:

- Senior Management:

Name of the employee No. of options granted

Abhinna Sundar Mohanty 165000
Abraham Thomas 61680
Achin Gupta 64100
Aditya Renjen 8000
Alind Sharma 160000
Anuj Reddy 7500
Anurag Shrivatsva 4000
Ashok Saxena 7500
Bernardo Frisbie 4000
Dr. John Efthimiou 115000
Dr. Vijay Bairagi 82000
Esteban Abad 5500
Ewan Livesey 20000
Girish Gudi 30000
Laxmikant Gharat 52000
Marshall Mendonza 7500
Michael Buschle 60000
Neelima Joshi 74200
P. Chinnppa Reddy 23000
Rajesh Desai 165000
Ratish Trehan 24000
Sanjay Mahajan 14000
Shreekumar S. Nair 29000
Subhash Pande 36000
T.R. Grover 42000
Ulhas R. Dhuppad 38000
Vikram Janakiraman 60000

- any other employee who receives
a grant in any one year of option
amounting to 5% or more of option
granted during that year : None

- employees who were granted
option, during any one year,
equal to or exceeding 1% of the
issued capital (excluding warrants
and conversions) of the company at
the time of grant : None

k. Diluted earnings per share
pursuant to issue of shares on
exercise of option calculated in
accordance with AS 20 'Earnings
per Share'

l. Pro Forma Adjusted Net Income
and Earning Per Share:

Particulars Rs. In Lakhs

Net Income 21792.63
As Reported
Add: Intrinsic Value Compensation Cost NIL
Less: Fair Value Compensation Cost 883.66
Adjusted Pro Forma Net Income 20,908.97
Earning Per Share: Basic
As Reported 8.72
Adjusted Pro Forma 8.35
Earning Per Share: Diluted
As Reported 8.54
Adjusted Pro Forma 8.19

m. Weighted average exercise price of Options
granted during the year whose

(a) Exercise price equals market price 315.94

(b) Exercise price is greater than market price NA

(c) Exercise price is less than market price NA

Weighted average fair value of options granted
during the year whose

(a) Exercise price equals market price 230.81

(b) Exercise price is greater than market price NA
(c) Exercise price is less than market price NA

n. Description of method and significant The fair value
assumptions used to estimate the fair value of the options
of options granted has been
estimated using
the Black-Scholes
option pricing
Model. Each
tranche of vesting
have been considered
as a separate
grant for the
purpose of valuation.
The assumptions
used in the
estimation of
the same has been
detailed below:

Weighted average values for options
granted during the year
Variables

Stock Price 308.04
Volatility 92.05%
Riskfree Rate 6.73%
Exercise Price 315.94
Time To Maturity 6.00
Dividend yield 0.71%
6.38%
230.81

Stock Price: Closing price on NSE as on the date of grant has been
considered for valuing the grants.

Volatility: We have considered the historical volatility of the stock till
the date of grant to calculate the fair value.

Risk-free rate of return: The risk-free interest rate being considered for
the calculation is the interest rate applicable for a maturity equal to the
expected life of the options based on the zero-coupon yield curve for
Government Securities. Exercise Price: The Exercise Price is the latest
available closing market price of the equity shares of the company, prior
to the date of grant, for the respective grants.

Time to Maturity: Time to Maturity/Expected Life of options is the period
for which the Company expects the options to be live. The minimum life of a
stock option is the minimum period before which the options cannot be
exercised and the maximum life is the maximum period after which the
options cannot be exercised.

Expected divided yield: Expected dividend yield has been calculated as an
average of dividend yields for the four financial years preceding the date

of the grant.

MANAGEMENT DISCUSSION AND ANALYSIS

The global pharmaceutical industry witnessed another year of slowing growth
and shifting power equations.

Despite challenges such as low R&D productivity, high patent expiries,
tougher regulatory mechanisms and sliding margins, the global pharma market
is still expected to grow sales to $1,244 Bn in 2020 from $733 Bn in 2008 -
aCAGR of 4.5%. Much of the growth is expected to be fuelled by the E7 or
the 'Pharmerging' markets - Brazil, Russia, India, China, South Korea,
Mexico,Turkey & the Rest of the World (RoW) markets. The traditional big
players and growth drivers USA, Japan and Western Europe are expected to
exhibit flat growth, as in the recent past.

Industry structure, development and macro - trends shaping the global
pharmaceutical industry:

1. Emerging markets - A rapidly growing opportunity. There are several
dynamics that favour pharma growth in emerging markets. Favourable
economies, rising incomes, expanding access to health insurance &
incremental healthcare spending are some of the key growth drivers. The E7
markets and the RoW countries are therefore expected to contribute upwards
of 70% to world pharma sales growth through to 2020.

2. Continuing generic shift & declining margins - The mature markets of US,
Western Europe and Japan shall continue in their steady shift to generics.
The increased generic penetration is a direct consequence of cost pressures
faced by the governments and healthcare systems in these countries. As a
result of these dynamics, the generics market is expected to outgrow the
total market with an 8.5% CAGR from 2008 to 2020. At the same time,
stringent payer-led price controls are leading to thinning margins on
generic products.

3. Increasingly stringent regulatory authorities - Regulatory bodies in
mature markets as well as the emerging markets are becoming increasingly
demanding in terms of filings and approvals. Authorities, ranging from the
Food & drug Administration (FDA) in the US to ANVISA in Brazil, have
considerably slowed down rate of new product approvals in both the
proprietary and generic domain.

4. Growing significance of hospital sector - As specialist driven areas
increasingly drive growth, the hospital sector is gaining higher
significance not only in the large markets but also the emerging markets.
This shift not only dictates changes in the business models, but also
directs changes in the therapeutic areas with hospital based therapies
driving highest growth. In the year 2008, nine therapy areas contributed
50% of protected original brand growth in the top 8 markets. Nearly all of
these were specialist driven therapeutic areas such as oncologicals, anti-
epileptics, biologicals and others.

What will drive success in an increasingly
diverse environment:

1. Embracing change with novel thinking - As large-cap pharma companies
continue to show a desire to move into generics via acquisitions and other
deals: e.g. Sanofi with Zentiva and Kendrick Farmac utica, Pfizer's deal
with Aurobindo and GSK with Dr. Reddy's, the pharma world is waking up to
the need for re-modelling operations.


2. Adapting locally - With emerging markets becoming more attractive,
companies with decentralized management models and local adaptability will
outperform the others.

3. Increasing efficiencies and growing scale- Diversified geographical
foot-print with balanced exposure to mature and emerging markets is key.
Such companies can successfully exploit low-cost advantages in
manufacturing and research, and deliver products suited for both high-
priced proprietary and low-priced generic markets

4. Innovation as the key differentiator - The most innovative pharma
companies will continue to show high growth. Innovation in discovery space
will need to be balanced with innovation in the branded generics space with
focus on unmet needs. New fixed dose combinations, devices, and
presentations will be as important as innovation in small molecules/
biologics

GLENMARK PERFORMANCE FY 0809

Specialty Business:

The specialty business, under the aegis of Glenmark Pharmaceuticals Ltd.,
posted revenues of Rs 11,302.90 Mn (USD 243.23 Mn) as against Rs. 9786.00
Mn (USD 242.95 Mn), registering a growth of 16% on the base business. The
base business excludes outlicensing revenue posted in FY 0708, to the tune
of Rs. 2402.73Mn(USD 59.65 Mn).The specialty business growth was mainly
spurred by growth in India business unit of 17% over last year, while Latin
America posted numbers below expectation, impacted by factors including
currency devaluation. The semi-regulated markets (SRM) posted a15%growth
over the previous financial year.

India Formulations

Glenmark India posted net sales of Rs. 6,372.10 Mn (USD 137.12 Mn) in FY
0809, registering a growth of 17% over the previous year. According to ORG-
IMS figures, the Indian Pharma industry grew by 10.1%in FY 0809 while
Glenmark grew its business by 17.5%.

In the India formulations business, Glenmark continued to grow and
strengthened its position in the dermatology, respiratory and
cardiovascular segments amongst others. Twenty Four new products were
launched during the year. Key launches included Onabet Cream, Deriva CMS,
Hair4U, Asmita amongst others.

The active ingredient in Onabet, sertaconazole nitrate, has been approved
by USFDA and is marketed in over 24 countries. Onabet Cream has now become
an established antifungal brand with the highest number of Dermatologists
prescribing it within the first year of launch. Another significant launch
was Episoft Cleanser developed by the specialty dermatology team for the
fast-growing cosmeceutical segment. This product has been developed with a
unique first-in-India formulation and is soap-free, lipid-free & fragrance-
free. These features make the product suitable for all types of sensitive
skin and increases patient compliance. Deriva CMS, a unique combination of
Microsphere Adapalene and Antimicrobial Clindamycin, was another major
launch in the derma segment. This combination has been introduced for the
first time by the company using microsphere technology. This technology
leads to more sustained release of Adapalene, resulting in significantly
lesser irritation while improving efficacy.

Hair4U, a combination of Aminexil+Minoxidil - another first in the market,
specifically targets perifollicular fibrosis while improving the quality
and density of hair. It is now the second largest brand in the Alopecia
market.

Telma', the leading brand in telmisartan, has entered the list of top 300
brands of the industry as reported by IMS.

Glenmark's second brand of Lornoxicam, LRN, targeted at the pain segment
has been launched and now represents the company's presence in all relevant
specialties. The flagship brand in the lornoxicam market, Flexilor,
continues to maintain its leadership position.

Glenmark also introduced high quality hormones for the infertility segment.
These new products have helped Glenmark build its specific portfolio for
IVF specialists. Asmita, a combined oral contraceptive (COC) with fourth
generation progestin Drospirenone and an estrogen component Ethinyl
Estradiol, was another successful launch in the Gynaecology segment.

The Indian pharmaceutical market is projected to grow at a CAGR of over 10%
through to 2020, making it an attractive emerging market for the global
pharma players. As big pharma is increasingly looking at ways to tap the
vast potential in this market, India also remains key to Glenmark's growth
plans.

Asia Pacific

The Asia pacific business unit at Glenmark demonstrated a steady growth in
primary and secondary sales in the financial year. While the overall
primary sales grew by 40%, the growth number for secondary sales stood at a
healthy 34% for the existing markets. The profit contribution also grew
by 32% over FY0708.

Key markets like Malaysia, Vietnam and Philippines were the main growth
drivers for the region. Vietnam and Malaysia have especially shown high
secondary sales growth rates of 97% and 46% respectively. The year was
marked by a concerted effort in the hospital segments, which constitutes a
major part of the pharmaceutical market in these countries.

The company continued the effort to build a strong pipeline with over 30
new product filings in the region in FY 0809. It received 39 new product
approvals. Amongst several launches, Glenmark's presence in the chronic
care segment in key markets was strengthened with the launch of Telma a
brand of telmisartan in Vietnam, and Perigard, with the active ingredient
perindopril in Philippines. The launches met with a good response and have
a substantial market opportunity.

A dedicated effort towards brand building in the focus markets assisted the
business unit in growing four brands to a value above USD 1 Mn. The top ten
brands contribute more than 65% to the top line highlighting the focus on
brands as opposed to pureplay generics.

In the sphere of new markets, the company took a decision of stalling
operations in China and Australia guided by financial concerns. With a view
on the current market conditions, near-term payback from these markets
would have been untenable. Apart from consolidating its position in the
existing markets, the company will focus on the newly entered market of
Thailand and has plans to initiate filings of products this year.

Russia and CIS

The global economic crisis affected Russia on several parameters. Amongst
other fallouts of the financial situation, the sudden and sharp decline in
Rouble vis-A-vis the Dollar was one that had major consequences for
industry players. With a severe liquidity crunch, the industry was also
witness to large scale de-stocking from distributors and extended cash
cycles.

Despite the headwinds, Glenmark Russia witnessed a strong year-on-year
secondary sales growth of 82% and a net sales growth of 15%. In line with
the same, Pharmexpert reported an improved ranking from 88 in March 2008 to
79 in March 2009.

Amongst several launches in FY 0809, Candiderm and Glevo were notable.
Candiderm (a triple combination of antibacterial, antimycotic and steroid)
is indicated for the topical treatment of secondary dermatoses and has
strengthened Glenmark's portfolio in dermatology. Glevo (levofloxacin) is a
broad spectrum antibiotic and with this launch the company has expanded its
antibiotic portfolio. Power brands such as Ascoril (liquid expectorant)
continued to outperform the market with a growth of 27% and a market share
of over 14%. Ketoplus, an anti-dandruff shampoo, grew at a rate of21%in a
degrowing market.

The operation in Russia also undertook a massive exercise in field force
re-alignment with focus on increasing doctor coverage and sales call
productivity.

Apart from building on its stronghold in Russia, the company continues to
focus on 3 key CIS markets - Ukraine, Kazakhstan and Uzbekistan. The
company set up its representative office in Uzbekistan during the financial
year. Select therapeutic areas have been identified and

Glenmark plans to focus on launching products and subsequently building
brands in these domains. Efforts are ongoing to grow the base of business
in the CIS markets and the company filed 12 new products while receiving 32
approvals in the CIS region in FY 0809.

Glenmark's Nasik (India) plant successfully passed a GMP audit of the
Ukraine Ministry of Health. This will help the company expedite its
business growth in Ukraine.

Latin America

The Latin American markets were also amongst those significantly impacted
by the global economic crisis. Significant currency devaluation increased
the cost of products at the marketplace, which further led to destocking of
products at the level of distributors. This subsequently spurred extended
periods of credit for sales realization.

The Brazilian pharmaceutical market reported a value de-growth of9%over FY
0708, according to IMS sources. Glenmark's Brazilian subsidiary, Glenmark
Farmaceutica Ltd., posted a 14% growth (comparison in Brazilian Reals) The
growth was mainly driven from the Pharma (retail) business unit. The
negative external market trend resulted in stagnant secondary numbers, as
reported by IMS. Despite slower growth, the Brazil business reported a jump
in value ranking from 86 to 76 and in prescription ranking from 65 to 57 in
FY 0809, when compared to FY 0708.

During the financial year, the Brazilian subsidiary was restructured to
bring greater focus into the business and to achieve faster growth. The
main therapeutic areas defined for the business are dermatology, endo-
metabolic and respiratory.

As a result of the re-structuring and field force re-alignment, the team
expanded coverage, bettered customercall ratesandincreased sales rep
productivity.

Several new products were launched during the year. Saciette (sibutramine),
the weight loss product and Adacne Clin (adapalene + clindamycin), an
innovative acne product, both new launches, have registered impressive
sales growth. The subsidiary launched two in-licensed products RadiaPlex
(topical agent for use with radiation therapy) and OraMedic (aloe-vera oral
rinse) during the year - Both are unique quality of life' products for
concomitant use in Oncology. These new additions have strengthened the
Oncology portfolio of the Brazilian subsidiary. On the operations front,
the existing manufacturing facility in Brazil received its GMP
certification from ANVISA in April'09.

The company initiated operations in Mexico during the financial year and
started strengthening its operations in Peru and Venezuela by establishing
offices, setting up new distributors, building sales teams and training of
personnel. The company has identified the therapeutic areas of interest and
plans to build a substantial basket of products for focus specialties.
Glenmark has plans to file over 80 products (SKU's) in Latin America
(including Caribbean markets) in FY 0910.

Despite the adverse economic situation in the region, Glenmark holds the
Latin America region as critical in its plans for expansion and growth. The
company will aim to expedite growth in its mature business at Brazil while
rapidly expanding in other markets with strongemphasis on Mexico&Venezuela.

Africa and Middle East

The Indian pharmaceutical industry has had to face considerable obstacles
in the African region in the recent past. Most of all, the anti-
counterfeit bill' adopted by certain African countries continues to be a
big cause for concern to Indian players, including Glenmark. This bill
indicates that copies or generic versions of all products having patent
protection in the country or elsewhere can be considered 'counterfeit' in
case of an intellectual property dispute. This definition, in its current
form, can be misused to delay or prevent supply of medicines from generic/
branded generic companies. Several other factors such as price wars in
Kenya and the blanket ban on cough syrups in certain markets, affecting
sales of the power brand Ascoril', led to a setback in the region.

Despite the current hindrances, Glenmark continues to be a key player in
the Africa market. The Africa region has registered steady secondary sales
growth in all key markets viz. Kenya, Sudan, South Africa, and Nigeria. For
the financial year, the overall secondary sales growth stood at 32%.
Glenmark continued to strengthen its flagship brands in this region. 81% of
the secondary sales came from 9 focus brands. Notably, these focus brands
themselves have an overall growth rate of 42% over the previous year.

Glenmark continued to be one of the top branded generic players in Kenya.
The company entered the Oncology segment in Kenya with a range of products.
Several of these have already gained entry into formularies at key
hospitals. Deriva - C (unique combination of adapalene + clindamycin) was
another significant launch at Kenya. Likewise, Perigard (perindopril) range
was launched in Mauritius. The company has received four new registrations
in Nigeria and launched several new products. The increased contribution
from existing brands coupled with new launches has made Nigeria a prime
growth driver for the Africa region. Sudan, another key market, witnessed
the launch of Saferon drops which catapulted Glenmark to one of the top
slots in the Iron supplements segment in the country.

The effort to establish a strong business in the Middle East resulted in
initiation of operations in Egypt & UAE, in FY 0809. Filing of products
commenced in both markets with a view to populate the pipeline and initiate
a revenue stream at the earliest.

Europe

Glenmark's Europe operations in Central & Eastern Europe (CEE) are growing
rapidly and fast becoming a substantial part of the specialty business.
Glenmark Pharmaceuticals Europe Ltd (GPEL) has its headquarters at Prague,
Czech Republic while active markets include Poland, Romania and Slovakia
apart from the Czech Republic. The European specialty business registered a
revenue of Rs. 995.91 Mn (USD 21.43 Mn) in FY 0809 with plans for rapid
growth in FY 0910.

Glenmark continues to invest in Medicamenta (a Czech based pharmaceutical
company Glenmark acquired in March 2007 - now Glenmark Pharmaceuticals
s.r.o.) primarily in the areas of quality release and packaging. The
manufacturing site at Vysoke Myto, Czech Republic, is being developed as an
EU centre for packaging, batch release and distribution. The Czech
subsidiary is currently focusing its activities in the areas of
cardiovascular & central nervous system with sales and marketing teams
targeting the key specialties.

In June 2008, Glenmark successfully established its new sales and marketing
organisation, Glenmark Pharmaceuticals Sp. z o.o. in Poland. The company
acquired a portfolio of seven branded products from Actavis & Biovena (an
affiliate of Actavis in Poland). Under the terms of the agreement, Glenmark
has received, through its subsidiary, all marketing authorisations and
trademark rights in Poland for the products. The company will sell the
products directly to the Polish market through its appointed distributors.
Glenmark operations in Romania are established through an efficient sales &
marketing team. The team launched Aflen (Triflusal) & Eneas (Enalapril +
Nitrendipine), both innovative inlicensed products, which met with a good
response in the market.

Apart from other launches, Glenmark also launched its first few in-house
products, Topimark (Topiramate) in Czech Republic, Slovakia and Poland &
Lextril (Perindopril) in Poland, in FY 0809. The products have already
garnered a good market share in the respective markets. The company has
built a strong pipeline of in-house and in-licensed products for the near
future in the focus areas of cardiology and CNS and expects to build strong
brands in these therapies.

Plans are also afoot to ramp up operations in Bulgaria in the near future
as a part of expanding Glenmark's footprint in CEE. The company already has
a number of products registered in the country. Glenmark believes that the
CEE will be a major growth driver for its specialty business. In order to
scale up its European operations, the company will continue to strengthen
its front-ends, build a robust pipeline & grow high value brands.

Generics Business:

By 2012, all eight of the small molecule drugs in the top 10 drugs (based
on global sales for 2006) will have become generic. This will result in the
commoditization of important markets, such as the cholesterol and ulcer
markets - previously the two biggest drug classes in history. Due to
multiple dynamics, the generics market is expected to grow at an 8.5% CAGR
from 2008 to 2020.

Dynamics fuelling the growth of generics:

1. Cost pressures on healthcare systems in developed markets

2. High-value proprietary drugs going off patent

3. Increasing capacities for high quality and bio-equivalent generics

4. Low purchasing power in developing & third world nations

5. Legal opinion increasingly in favour of generics

With a vision of emerging as a leading integrated global generics
organization, Glenmark Generics Limited (GGL) started independent
operations during the financial year. GGL is predicated on a one-of-its-
kind business model in India, dedicated to the research & development,
manufacturing, marketing and distribution of generic pharmaceutical
products. It is an end-to-end vertically integrated generic player with
capabilities ranging from API manufacturing to sales front ends in key
markets.

Selling, general & administrative (SG&A) expenses, which are key to
defining the margins in pharmaceutical products, are typically much lower
in a pure generic business model such as that of GGL. In line with the
same, the net contribution from the one year old GGL business will
inevitably see a healthy spike as the operations continue to mature.

The generics business arm, posted a growth of 25% on business with revenues
of Rs. 9,857.43 Mn (USD 212.12 Mn) compared to Rs 7,903.28Mn (USD 196.21Mn)
the previous financial year. The growth mainly came off the US market and
the Oncology business unit (Argentina), both of which grew over 30% over FY
0708 despite reversals such as slow-down in product approvals and tough
market environment

USA Formulations

The US Formulations business posted revenues of Rs. 7337.73 Mn [USD
157.9Mn] for FY 0809 against revenue of Rs. 5640.27 Mn [USD 140.03 Mn]
registering an increase of 30 % over the previous year. GGI has grown the
generic base in the US at a healthy CAGR of 130% over the last 3 years.
This growth was achieved in spite of an increasing delay in new product
approvals from the regulator in the recent past and coming off a shared
exclusivity on Trileptal (Oxcarbazepine). The company currently has over 40
Abbreviated New Drug Applications (ANDAs) in various stages of the approval
process with the US FDA.

In the year FY 0809, the Company received ANDA approvals for Trandolapril
tablets USP 1mg, 2mg and 4 mg; Mometasone Furoate Ointment USP, 0.1%,
Mometasone Furoate Cream USP, 0.1% and Metformin Hydrochloride Tablets USP
500 mg, 850 mg and 1000 mg. ANDA approval was also received for Ranitidine
Tablets, Betamethasone Dipropionate Cream, 0.05 (Augmented) & Lithium
Carbonate capsules, amongst others.

Glenmark also launched Nystatin Oral Suspension, Oxycodone Oral solution,
Azathioprine Tablets and Morphine Sulphate Oral Solution. In all, Glenmark
received 11 ANDA approvals and also launched 11 products in the market. The
Company now has a portfolio of 45 generic products authorized for
distribution in the US markets.

GGI filed 22 products with the FDA in FY 0809, of which several are
potential first to file Para 4 applications. Among these first-to-file
opportunities, Glenmark is the sole applicant with first-to-file' status
for three products.

GGI is the Sole applicant to claim first-to-file' status for three
products in FY 0809

PRODUCT BRAND NAME PLAINTIFF IMS SALES* (year
ending Mar 09)

Ezetimibe Zetia Schering Plough USD 1.4 billion
Trandolapril+ Tarka Abbott/ USD 72 million
Verapamil Sanofi-
Aventis

Fluticasone Cutivate Nycomed USD 37 million
lotion 0.005%

Glenmark stands to gain substantially from the potential 180 day
exclusivity period on any of the Para IV opportunities. In FY 0809, the
Company had an extraordinary charge of USD 25.1 Mn on account of price
erosion on sales of Oxcarbazepine. was the first product sold with
exclusivity by Glenmark. The Company now has a better understanding of the
US generic business under exclusivity conditions and will be well
positioned for gains from its future Para IV opportunities.

The company intends to continue with a judicious mix of Para II, Para III
and Para IV filings and will carry forward its strategy of focus on niche
areas such as dermatology, hormones, oncology, controlled substances and
modified release medications.

GGL has adopted a conscious strategy of identification of products
involving complex chemistry, difficult formulations and products guided by
stringent regulatory norms. This focused presence in niche areas will help
to ensure a sustainable market opportunity and continued profitability. The
complexities involved in these therapy areas act as entry barriers thereby
attracting relatively low competition.

GGI has filed several ANDAs over the last 4 years with a pronounced focus
on niche areas and future efforts will be directed in the same domain.

Niche Area Focus in Filings

ANDAs filed / marketed Till FY 0809

(Includes partner filings)

Dermatology 18
Controlled Substance 6
Modified Release 2
Hormones 7
First to File (P-IVs) 9
Immediate Release 45
Total 87

EU Formulations:

Glenmark Generics Europe Ltd. (GGEL), with headquarters at UK, is steadily
establishing itself as a capable generics player across European markets.
The business model is based on a mix of out-licensing and Glenmark's own
sales across various EU markets with products chosen to reflect niche
opportunities or competitiveness through vertical integration

FY 0809 saw GGEL's first product launch, Perindopril, in 3 Western European
markets. Several out -licensing deals were also closed for other European
markets including CEE. Total revenue posted was Rs. 146.94Mn(USD 3.16 Mn).

GGEL continues to invest in building a competitive product portfolio. The
company currently has more than 35 EU CTD for solids & semi-solids across
various therapeutic segments at various stages of development, registration
or approval. The portfolio comprises of 4 approved MAs, 10 applications
currently going through registration procedures across Europe and products
which will be submitted during FY 0910. In addition, there are another 10-
15 products in early stage development. Focus will remain on solid orals
and semi-solids differentiated on the basis of difficult to
develop/formulate' products or products with high entry barriers.

Oncology

Glenmark Generics Argentina is the hub for generic research, manufacturing
and distribution of oncology products in over 20 countries across the
world. The oncology business unit registered growth of 36% in FY 0809,
posting annual revenues of Rs. 400.48Mn(USD 8.62 Mn).

The company launched several new products in Argentina, Peru and Mexico.
During the financial year, Glenmark Generics S.A. has seen a spurt in terms
of filings. During the year, five dossiers and 59 Extra-company (excludes
Brazil, Trinidad & Tobago, ROW and any other intra-company operations)
dossiers were filed.

In order to service the steadily growing business out of Argentina, an
oncological injectables manufacturing facility is under commission near
Buenos Aires, Argentina. The plant which is spread across 30,000 sq feet
will begin operations by end- 2009. This facility will be the global hub of
Glenmark Generics for the manufacture of lyophilized and liquid injectables
used in oncology therapies. It is projected to have a minimum capacity of
around 1 million vials per annum. This facility when commissioned would
cater to the requirements of atleast 20 countries.

Active Pharmaceutical Ingredients

The API business of Glenmark witnessed a stagnant year in terms of growth
due to several market factors. The global economic slowdown and currency
devaluation in key markets impacted the API supply in the competitive
regulated &semi-regulated markets.

Despite setbacks, the business reaped benefit from competitive pricing
advantage in certain key products as well as a larger product basket,
thereby keeping the overall revenue at levels similar to the previous year.

Glenmark continues to remain focused on its API business. The company has
filed 41 DMFs till March 31, 2009 and filed over 100 process patents in the
last 3 years. The company filed 10 DMFs in this financial year alone. The
company extended its reach to Egypt and 8 new markets in South America.
Today, Glenmark has an API presence in over 80 countries and direct
presence of sales teams in key markets of US, UK, Brazil and India.

At the Glenmark API business unit, the goal remains to cultivate long term
strategies for APIs with partners and to work conjunctively to develop
products that are commercially sound and scientifically viable. The company
will continue to grow its rich portfolio of diverse products.

Unrelenting Commitment to Quality

As mature economies are increasingly turning to generic medicines in an
endeavor to lower healthcare costs, the deliberation and debate around
quality of generics has reached an all time high. Recent times have
witnessed an increasing focus on a unified common code of best practices
followed globally amongst pharmaceutical companies in developed and mature
markets. These global quality requirements seek to ensure safe drugs,
implement anti-counterfeiting programmes & prevent adulteration of drugs.
Stringent requirements have coincided with a rigorous review of the quality
standards of plants and facilities of generic manufacturers. Most of these
plants have been certified in the past by regulatory bodies such as US Food
& Drug Administration (US FDA), UK Medicinal & Health Regulatory Agency
(MHRA-UK) and other European Regulatory Agencies.

At GGL, the commitment to quality forms the backbone of the company's
vision of emerging as a leading global generic player. The company has been
relentlessly stepping up its quality systems across its research and
manufacturing facilities while training its people to implement higher
standards by the day. The Ankleshwar API facility as well as the Goa
formulations plant have internalized quality systems taking into
consideration the contemporary regulatory scenario & current cGMP
expectations which include the National Regulatory Authority Schedule M,
current WHO guidelines & guidelines issued by ICH. The company believes
quality of the manufactured products shall be by design. Various tools are
used to put forth appropriate controls at various stages of plant design,
material control, online controls during the processing & manufacturing,
and systematic product release procedures which would meet customer end
requirements. The Quality systems encompass facility management as per
GMPs, calibrations of manufacturing equipments, utilities which support
manufacturing and instrumentation used for evaluating and testing the
material outputs concurrently. Quality systems by design include procedures
for online monitoring to ensure the processes are navigated as per pre-
determined process flow, in-process control and product release. The
quality systems have been aligned with the business process of the company
bringing it under the mantle of enterprise resource management (ERP). This
has integrated the business processes with the quality systems process
flow. It has enhanced the completeness of accurate data management giving
full online visibility to manufacturing, operations and quality control.

More than 40 Drug master files (DMFs) in US, 8 CEP's, and EDMF's for over
25 products in EU region have been filed with various regulatory agencies
from Ankleshwar API facility. This year saw US FDA regulatory approvals for
9 generic APIs and a WHO approval for the plant. The Goa formulations plant
underwent two successful re-inspections by US FDA and Brazil ANVISA in the
financial year.

Rigourous standards are also implemented at the various research and
development facilities of GGL. The integrated R&D centre at Taloja -
Maharashtra, India, has been recently commissioned with a view to carry out
state-of-the-art research on both API and formulations. The clinical
research unit located at Turbhe, Navi Mumbai has recently developed a unit
to conduct Phase I human volunteer studies. The clinical studies conducted
at the unit are in compliance with established operating procedures and
regulatory guidelines of various regulatory bodies which include the
DCGI(India), FDA(US), ANVISA [Brazil] and MHRA(UK).

Human Resource Development

The year started with creation of Generics subsidiary (GGL) and challenges
related to setting up of HR systems and processes for it. Equally
challenging was ensuring on time recruitment. The entire process was
completed seamlessly and a new human resources team has taken charge at
GGL.

The year also witnessed further expansion of operations in Eastern Europe
and Latin America. While the previous year focused on entry into multiple
geographies, the main challenge in FY 09 was expansion in these countries.
Right planning and execution as per the timelines enabled business
operations to be started in record time. Another notable achievement was
the establishment of a clinical research hub in Oxford.

The latter half of FY 09 brought unique challenges for the organization in
the form of a global slowdown. Proactive steps taken by the human resources
team, in reduction of overhead expenses and optimization of recruitment
plans, helped in ensuring cost control.

Continuing along the path of bringing forth better and more robust people
systems, the human resources team focused on improvement and innovation of
systems like performance management, compensation banding, retention
programs, employee engagement programs, etc.

The year marked a shift in the approach of learning in the organization
from reactive training to a proactive and more focused 'development'
approach. The team worked along with business units to introduce self
development platforms. The unique DO3 (Developing On Our Own) program was a
resounding success in India, Africa and Asia regions. The same is being
extended to other geographies in FY 10.

In conclusion, FY 09 was a year of consolidation and stretch covering
employee development, introduction of control systems, ramping up of
operations and creating a great place to work.

FINANCIALS

Region Wise Revenue Breakup:

2008-09 2007-08
INR Mn INR Mn Growth %
Generics Business:

US 7337.73 5640.27 30%
Europe 146.94 9.20 1497%
Argentina 400.48 294.47 36%
API 1972.28 1959.34 1%
Total Generics
Business 9857.43 7903.28 25%
Specialty Business
Latam 1579.89 1917.55 -18%
SRM 2355.00 2045.74 15%
Europe 995.91 369.17 170%
India 6372.10