Dear Shareholders,
 
 The financial storm that swept across one side of our world impacted
 businesses across the globe.  The pharmaceutical sector, though a
 relative out-performer in comparison to the overall economy, saw
 buoyant forecasts of global pharma sales being moderated. Growth of the
 Indian pharma market too was a shade rationalised.
 
 It was also a checkered year for Alembic. While some of the strategies
 adopted and paths charted in previous years started yielding handsome
 results, others needed course correction. An impressive 44% growth in
 our International Business was dampened by a 7.3% de-growth in our
 domestic formulations business.
 
 We recorded a total of Rs. 1,133.7 Crores in revenues, a 10.4% growth
 over previous years revenue of Rs. 1,027 Crores. A result we are not
 too delighted about, but are aware that it is a short term consequence
 for the long term benefit that will accrue from the restructuring
 exercise undertaken in our domestic formulations business.
 
 Also responsible for this poor performance were uncharacteristic forex
 losses due to the unprecedented international currency imbalances which
 manifested in the aftermath of the global financial crisis. Forex
 losses were a bane of many an Indian company and Alembic too was
 saddled with its fair share.
 
 A strong proponent of transparency and good corporate governance,
 Alembic decided to adhere to fair value accounting and report on a
 mark-to-market basis even though the National Advisory Committee on
 Accounting Standard (NACAS), postponed the implementation of Accounting
 Standard 11 (AS 11) to 2011 allowing organisations to report as per
 historic costs.
 
 We have fully provided for mark-to-market exchange losses on long term
 foreign currency loans and on forward sale of US Dollars. We have also
 made provisions for diminution in investment to the tune of Rs. 7.52
 Crores with respect to a US company namely Xechem Corporation.
 
 The forex losses and the initial negative impact of restructuring are
 both extraneous events and we at Alembic have implemented corrective
 action on both fronts to keep them such.
 
 In the coming fiscal 2009-2010 the benefits of the restructuring will
 begin to kick in. We are on course to capitalise on the significant
 opportunity that exists for our newly focused product portfolio in the
 domestic formulations market, drive more costs out of the business and
 secure sustained profitability.
 
 New products provide additional momentum to growth and during this
 fiscal Alembic launched 34 new products across various therapeutic
 segments.
 
 Acute therapy products market contributes over 75% to the Indian pharma
 market by revenue. However there has been a perceptible increase in
 revenues from the chronic ailments segment and it is growing at almost
 double the rate of the acute segment. Amongst the largest therapeutic
 segments, anti-diabetic and CV drugs have demonstrated the most
 aggressive growth. The 24 lifestyle therapeutic brands which we
 included last year in the cardiovascular, diabetological and
 gynaecological segments have handsomely enhanced their contributions to
 the total sales.  Diabetology, cardiology and gynaecology chalked up a
 64%, 43% and 48% growth in percentage contribution to this revenue
 stream, respectively.  Chronic therapy will continue to be a key growth
 segment for Alembics domestic formulations business in the coming
 years.
 
 Our International Business posted significant gains in every market in
 which we participate. Powered by our collaborative approach, sales in
 regulated markets escalated 71%. Partnerships with international
 generics players provided us deeper access to markets and helped
 sharpen our competitive position in regulated markets. As regulated
 markets look to increase generics usage in their healthcare system as a
 means to counter massive healthcare budget deficits, Alembic is
 advantageously poised to grow its footprint in these markets.
 
 R&D is where we seed and nurture new growth platforms and this year too
 we continued to invest in it.
 
 Alembic is fast evolving towards a business model that is focused on
 deep-rooting our domestic presence and simultaneously leveraging
 high-value mature regulated markets along with high growth emerging
 markets.
 
 Our record of delivering consistent results to our shareholders for
 over a century speaks of our ability to adapt, execute and optimise the
 many opportunities that our business mix provides.
 
 Alembic today is a well balanced, tightly managed, globally competitive
 organisation and will continue to profitably serve all stakeholders
 including patients, healthcare professionals, employees, business
 associates and shareholders.
 
                                              Yours Sincerely,
                                              Chirayu R. Amin
 Vadodara: 8th May, 2009