Glenmark Pharma

The Directors have pleasure in presenting their 30th Annual Report and
 Audited Accounts of the Company for the year ended March 31, 2008.
 
 
 FINANCIAL RESULTS
                                                        (Rs. in Million)
 
                                                      Standalone
                                              2007-2008       2006-2007
 
 Profit before Interest, Depreciation and Tax   5017.61         2172.23
 
 Less: Interest                                  411.30          229.49
 
 Less: Depreciation                              294.43          234.58
 
 Less: Tax (Current Year and Deferred Tax)       421.64          360.12
 
 Profit after Tax                               3890.24         1348.04
 
 Share of loss of Minority                          -              -
 
 Profit after Tax and Minority Interest         3890.24         1348.04
 
 Surplus brought forward from earlier years     2347.34         1456.40
 
 Profit available for appropriations            6237.58         2804.44 
 
 APPROPRIATIONS
 
 Interim Dividend on Preference Shares              -              6.94
 
 Interim Dividend on Equity Shares               171.55           95.76
 
 Dividend Tax                                     29.15           14.40
 
 Transfer to Capital Redemption Reserve             -            200.00
 
 Transfer to General Reserves                    400.00          140.00
 
 Balance carried to Balance Sheet               5636.88         2347.34
 
                                                6237.58         2804.44
 
         Consolidated
 
 2007-2008               2006-2007
 
 8463.46                   4419.85
 
 631.68                     384.08
 
 716.80                     422.59
 
 793.86                     512.58
 
 6321.12                   3100.60
 
    0.20                      -
 
 6321.32                   3100.60
 
 4678.92                   2035.42
 
 11000.24                  5136.02
 
    -                         6.94
 
   171.55                    95.76
 
    29.15                    14.40
 
    -                       200.00
 
   522.88                   140.00
 
 10276.66                  4678.92
 
 11000.24                  5136.02
 
 
 DIVIDEND
 
 Your Company has paid interim dividend @ 70% (40%) on the paid- up
 Equity Share Capital of the Company. The total outflow on account of
 Dividend inclusive of Dividend Tax is Rs. 200.70 million (Rs. 109.19
 million). Your Directors recommend that the interim dividend already
 paid be confirmed as final dividend for the year ended 31st March,
 2008.
 
 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, 2008, under Indian
 GAAP forms part of the Annual Report.
 
 RESULTS OF OPERATIONS
 
 Your Directors are pleased to report excellent performance for the year
 under review. The Company achieved consolidated Gross revenue of
 Rs.20092.01 million (Rs.12515.34 million) registering a growth of 60.5%
 over the previous year. On standalone basis, the Company achieved a
 gross revenue of Rs. 14048.24 million (Rs. 8371.18 million),
 registering an increase of 67.8% over the previous year. The growth is
 mainly attributed to the entry into new markets, addition of new
 products/extension of products in the existing markets.
 
 PROFITS
 
 The Consolidated operating profit before interest, depreciation and tax
 increased to Rs. 8463.46 from Rs. 4419.85, an increase of 91.5% over
 the previous year. The Standalone operating profit before interest,
 depreciation and tax increased to Rs. 5017.61 million from Rs. 2172.23
 million, an increase of 131% over the previous year.
 
 CHANGES IN CAPITAL STRUCTURE
 
 Issue of shares on exercise of Employees’ Stock Options:
 
 During the year, the Company allotted 622,220 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, 2008, the Company received notices
 from Foreign Currency Convertible Bond (FCCB) holders for exercising
 the conversion option in respect of 45,000 FCCBs of US$ 1000 each out
 of 100,000 FCCBs of US$ 1000 each issued by the Company.  Accordingly,
 the Company allotted 79,87,316 Equity shares of Re.1/- each in respect
 of the said 45,000 FCCBs to the bondholders who exercised their option.
 
 EMPLOYEE STOCK OPTION SCHEME
 
 During the year, Stock Options have been issued to the employees of the
 Company and its subsidiaries. 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 Option Scheme and Employee Stock Purchase Scheme)
 Guidelines, 1999 and set out in the Annexure-B to this Report.
 
 SPLIT/SUB-DIVISION OF SHARES
 
 The Shareholders accorded their approval for splitting the face value
 of the equity shares from Rs.2/- per share to Re.1/- per share and the
 record date for the same was 17th September, 2007 to 20th September,
 2007.  Accordingly, the face value of the shares have been split from
 Rs.2/- per share to Re.1/- per share and credit for the new shares on
 split have been given to the shareholders holding shares in demat form
 and split share certificates have been forwarded to the shareholders
 who have submitted their old share certificates.
 
 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, Glenmark Holding S.A. (GHSA), a wholly owned
 subsidiary in Switzerland incorporated subsidiaries by the name of
 Glenmark Generics Holding SA., Glenmark Pharmaceuticals SRL and
 Glenmark Pharmaceuticals Europe Ltd. in Switzerland, Romania and U.K.
 respectively. During the year,the name of Servycal S.A., Argentina was
 changed to Glenmark Generics S.A., Argentina; Glenmark Pharmaceuticals
 (Europe) Ltd. to Glenmark Generics (Europe) Ltd. and the name of
 Glenmark Organics Ltd. was changed to Glenmark Generics Ltd.
 
 The Company has also established subsidiaries through GHSA in Poland
 and Bulgaria by the name of Glenmark Pharmaceuticals SP.Z.O.O and
 Glenmark Pharmaceuticals EOOD respectively.
 
 In sync with the re-organisation process, during the year the Company
 sold off its investment in Glenmark Generics (Europe) Ltd. to its
 subsidiary GM Pharma Ltd. GHSA sold off its investment in Glenmark
 Pharmaceuticals Inc., and Glenmark Generics S.A. Argentina to its
 subsidiary Glenmark Generics Holding S.A., Switzerland.
 
 The Hon’ble High Court of Mumbai has by its order dated July 4, 2008
 approved the amalgamation of GM Pharma Ltd. with Glenmark Generics Ltd.
 (both subsidiaries of the Company) w.e.f. January 31, 2008.
 
 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. 47/74/2007-CL-III dated
 09/07/2008 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 10 am to 12 noon.
 
 RE-ORGANISATION OF THE BUSINESS
 
 The business of the Company was classified into two business segments,
 first being the ‘Specialty’-branded business and the second being
 ‘Generics’ business.
 
 Both the Specialty and Generics businesses had grown immensely and the
 two businesses due to their sheer size had their own set of management
 challenges. To address these challenges, strengthen our focus and
 accelerate our growth in the generics and speciality business, the need
 to reorganize the businesses by moving the generics business to its
 subsidiary company - viz. Glenmark Generics Limited.
 
 The Management believes that the segregation of the aforesaid two
 businesses will create further growth avenues for Glenmark as a group,
 allow improved focus on both groups of businesses and help us create
 future industry benchmarks.
 
 The Shareholders approval to the re-organization and transfer of the
 API and Generics Business to its subsidiary Glenmark Generics Ltd. was
 obtained by way of Postal Ballot on 5th February, 2008. The Company had
 obtained valuation reports of the business to be transferred, from M/s.
 Grant Thornton and M/s. Sekhri Valuers Pvt. Ltd. and based on the
 valuation, the business was transferred on a slump sale basis at a
 consideration of Rs. 750 crores with effect from April 1, 2008.
 
 DIRECTORS
 
 Mrs. Blanche E. Saldanha, Mr. Rajesh V. Desai and Mr. A.S.Mohanty
 retire by rotation at the ensuing Annual General Meeting and being
 eligible, offer themselves for re-appointment.
 
 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.
 
 HUMAN RESOURCES
 
 Company’s industrial relations continued to be harmonious during the
 year under review.
 
 PARTICULARS OF EMPLOYEES
 
 Particulars of employees required to be furnished under Section 217(2A)
 of the Companies Act, 1956 forms part of this report. However, as per
 the provisions of Section 219(1)(b)(iv) of the Act, the report and
 accounts are being sent to the shareholders of the Company excluding
 the particulars of employees under Section 217(2A) of the Act. Any
 shareholder interested in obtaining a copy of the said statement may
 write to the Company Secretary at the Corporate Office of the Company.
 
 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, 2008 and of the profit of the Company
 for the year ended 31st March, 2008;
 
 (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
 
 Your Directors express their gratitude to the Company’s customers,
 shareholders, business partners 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: 11th August, 2008.