Elder Pharmaceuticals

Dear Shareholders, 
 
 The Indian economy has been witnessing a phenomenal growth since the
 last decade. However, the global meltdown which saw the massive
 de-leveraging in financial markets turn into one of the sharpest global
 economic contractions in modern history.  Financial market conditions
 have remained extremely difficult for a longer period than envisaged,
 with global output and trade plummeting in the final months of 2008.
 However, India continues to hold its ground and braving the global
 recessionary trends, has managed a confident 6.7% economic growth in
 2008-09.
 
 The pharmaceutical sector is generally viewed as a defensive hence
 recession-proof sector. Even though the global pharma sector continued
 to face the daunting challenges of increasing costs, drying product
 pipelines and expiring patents, the Indian pharma sector held its
 ground due to its unique, cost-competitive value proposition and
 continued its double-digit topline growth.  It is estimated that the
 domestic pharma industry, which grew by over 10% last year, will
 continue to see at least a 1-2% spurt in growth in the next couple of
 years. Exports are expected to maintain an 18% growth rate in FY 10.
 
 Snapshot of the year 2008-09
 
 Against these prevailing situations, I am pleased to announce that the
 Company has delivered encouraging performance in the financial year
 under review with business continuing at brisfe pace. The
 
 Companys topline registered a growth of 11.01%, which stood at Rs.
 629.58 crores for the 12 months ended 31st March, 2009, as compared to
 Rs. 567.10 crores for the previous fiscal. Net Profit for the financial
 year under review was at Rs. 50.64 crores. It is inspiring to note that
 the Companys progress has been stable and consistent, in line with its
 objective of generating sustainable growth.
 
 We continued to launch new products, proprietary as well as
 in-licensed, we inked several strategic alliances and deals. Going
 forward, our thrust on in-licensed products will continue, and we will
 explore promising opportunities to ink more such mutually beneficial
 arrangements in the coming years.
 
 One of the key ongoing initiatives was ramping up of our capacities,
 which was in line with our long-term strategies.  Besides this, we
 scaled up our marketing strengths and focused on developing innovative
 strategies to foray into the fast-growing rural markets.
 
 We remain constantly focused on development of new and innovative
 products to add to our already existing niche product line. On the back
 of our new launches - Imbran, Phytomega and Shelcal CT - that have
 received good response from the medical fraternity, we remain
 optimistic about our endeavours. Our in-licensing deal with Global
 Energy Medicine (GEM) has the potential to strengthen the Wound Care
 segment. We are consistently investing in augmenting our market reach
 through improved distribution of our products, and the recently formed
 rural marketing team ELVISTA, which has been envisaged to further
 augment our existing marketing and distribution strengths. We continue
 to maintain focus on incrementing our existing capacities in order to
 successfully cater to the growing needs of the domestic market.
 
 The combination of these initiatives will enable us to sustain our
 position as one of the fastest growing companies in Indias mid-cap
 pharmaceutical sector.
 
 On a concluding note
 
 I take this opportunity to thank the members of our Board and all our
 employees for their continued support and dedication. I also take this
 opportunity to convey my sincere gratitude to all our shareholders,
 respected members of the medical fraternity, suppliers, distributors,
 vendors, bankers, and last but not the least, our customers. On behalf
 of the members of the Board, I assure you we remain committed to do
 everything in our might to justify the faith enthused in us and we will
 continue to scale greater heights in the years to come.
 
                                             Warm Regards, 
                                        J. Saxena Chairman