Lupin

Dear Friends,
 
 In 2006, we set ourselves the challenging goal of crossing US$ 1 Bn in
 revenues by 2010. Looking back at that time, this appeared to be an
 ambitious and somewhat distant orbit that we aspired to enter.  Yet, we
 persevered and locked this milestone firmly in our sight. With a sharp
 sense of direction and a defined vision, we set out to creatively
 transform ourselves to address the opportunities that we sought -
 opportunities that have become realities today.
 
 The fact that every part of the Company has contributed handsomely to
 this endeavor is indicative of not only the effectiveness of our chosen
 business strategy and foresight, but also of the flawless execution,
 efficiency and single- mindedness with which everyone in the Company
 has embraced these business objectives. Today, with revenues of Rs.
 39,145 Mn in FY 2008-09, we are not only on the threshold of entering
 this orbit within a year, but we also find ourselves bursting forth
 with renewed energy and momentum that will now propel us towards even
 higher orbits in the years to come.
 
 Whats making this possible? The simple answer is the soundness of our
 vision and strategy coupled with flawless execution - all backed by
 sheer passion and conviction that our people feel towards accomplishing
 challenging objectives. I am sure you will join me in saying Well
 done!! to every Lupinytt for bringing us this far.
 
 SCALING HIGHER ORBITS...
 
 The journey we began 4 years ago has helped us arrive at a major
 threshold - a vantage point - where theres still so much more to be
 achieved and the time has come when we need to set ourselves new goals
 that are ambitious, yet credible. Going forward, our aspiration is to
 become a multi-billion dollar transnational company and be counted
 amongst the top Generic pharmaceutical companies in the world. After
 one and a half years of preparation in defining the means and the modes
 of these new growth objectives and getting the entire organisation to
 adopt and align themselves accordingly - I believe, we are now ready to
 write this next chapter. Once again, I see the spark of conviction and
 passion in the eyes of our people.  Thats not surprising. Looking at
 our recent past, weve clearly demonstrated that we can grow at rates
 that not only outpace the rest, but are in a league of ourown.
 
 Strengthening our Pillars for Growth
 
 Today, Lupin has a vibrant business model. We believe there are 6
 pillars on which the Company stands and these are the pillars on which
 future growth of our Company rests. They are:
 
 Our size and growth rate - In todays world, it is critical to have a
 meaningful and sustainable size and pace of growth in the markets,
 therapies and business areas we operate in.
 
 Technology Edge Our ability to develop innovative and
 difficult-to-replicate life saving drugs.
 
 Strengths in Generics Our process research capabilities, backed by a
 vertically integrated business model, has helped us build one of the
 most successful Generics businesses.
 
 Ability to build Brands - Our marketing strengths and our ability to
 build super brands in niche therapy segments, across markets, globally,
 has helped us become one of the most profitable Generics players.
 
 Our People, Our Strength A culturally diverse global workforce imbibed
 with the values which are uniquely Lupin.
 
 Quality and Compliance - The differentiating factorand the mainstay of
 our competitiveness.
 
 Preparing for Growth
 
 Increased demand and growth in revenues needs to be backed by a strong
 world-class manufacturing base. With a capital expenditure of Rs. 3,489
 Mn in FY 2008-09, we not only commissioned and completed new projects
 to augment and optimise current capacities and capabilities, but also
 ramped up and modernised several of our API and Formulations plants. We
 have had unprecedented success, especially in the advanced markets of
 US and Europe and our investments are in line with ramping up our
 capacities towards meeting current and future demands.
 
 A significant portion of the capital expenditure in the year was
 directed towards creating capabilities to address new therapy areas,
 such as our investment into Oral Contraceptives, API and FP
 manufacturing in a new SEZ in Indore.
 
 People - Developing Talent by Leveraging Experience
 
 While we have seasoned people at the helm of our affairs who are well
 supported by capable and self- driven teams, we realise that we would
 have to create a consistent pipeline of talented future leaders to
 further fuel our growth objectives and drive future endeavors.
 Recognising this, we have been consistently focusing on creating and
 mentoring a new generation of young and able minds who would grow into
 leadership positions across the Company in the future.
 
 Over the years, our Human Resources function has focused on developing
 talent management initiatives that have been ably backed by cohesive
 learning and development programs, running across various levels of the
 Company - all in an endeavor to develop and hone leadership talent to
 help sustain our high growth objectives.
 
 Stimulating Organic Growth through Acquisitions
 
 At a time when large and expensive acquisitions were being made by many
 players globally, Lupin was considered by some to be relatively slow in
 the Mergers a Acquisitions space. Clear in our strategy and approach,
 we have actually made 6 acquisitions in the past two years. What has
 differentiated us in our approach is that all our acquisitions have
 been strategic and value based in nature, from creating beachheads in
 key markets that we have identified, to enabling entry into new therapy
 segments. The inorganic pieces of our business have been wedded
 together with the parent Company to create operational synergies,
 backed by strong financial logic that these acquisitions would add
 value both, in the near as well as the long term. All these
 acquisitions have been performing well and were extremely well- timed
 in terms of market entry. We plan to continue making select strategic
 acquisitions in certain markets of our interest to supplement and
 further add impetus to our strong organic growth engine.
 
 Innovation and Technology
 
 Working with new technologies and innovating through our research
 initiatives are the key enablers for our growth and performance.  FY
 2008-09 was no exception - a record year for our Generics research,
 with 28 ANDA filings for complex and difficult-to-make products in
 existing as well as high potential new therapy areas. These new filings
 have taken the total ANDA count to 90, with 56 products still pending
 approval and launch. We have and will continue to further build a
 strong product pipeline to drive future growth.
 
 With a firm foothold in the most important Generic markets of US,
 Europe and Japan and an aggressive, dynamic team driving our Generics
 research, we have ensured ourselves of a pipeline that will deliver for
 the years to come. We have now started laying more emphasis on drug
 discovery and drug delivery research. During the course of the year, we
 substantially revamped our drug discovery program to ensure that our
 capabilities, infrastructure and investments are in line with global
 standards to achieve world-class results.
 
 Driving innovation across the board underpins Lupins culture. We
 encourage everyone within the Company to look for excellence within
 their functional areas and beyond, to seek and adopt
 betterwaysofcarryingouttheirresponsibilities.To further improve and
 institutionalise this culture of innovation, we have engaged a
 world-class innovation consultant to help us institute strong processes
 and tools for fostering and developing innovation as a way of life
 within the Company.
 
 Adding New Businesses a Therapy Segments
 
 Another important aspect of scaling to newer orbits would be
 introducing new business lines and adding new therapy areas each year
 for the Company. FY 2008-09 was the year we made our entry into Oral
 Contraceptives (OC) through the filing of 7 OC ANDAs and associated
 DMFs. Similarly, we have now instituted research in Ophthalmological
 drugs. We expect these new business lines to be highly rewarding for
 Lupin, globally, in the years to come.
 
 Thinking Global
 
 For Lupin, the playing field is no longer limited to India but is truly
 global. Going forward, we have to consistently set ourselves standards
 and benchmarks that will be world-class but uniquely Lupin. While this
 has made our task more demanding, it will also instill a new sense of
 discipline, awareness, identity and direction within the Company. In
 line with thinking global, we also need to look for acquiring new
 ideas, new technologies as well as talent internationally.  This year,
 I am pleased to inform you that Dr. Rajender Kamboj, an eminent and
 successful scientist from Canada, joined us to steer our drug discovery
 program. He has returned to India after 26 years and brings with him a
 vast pool of knowledge and rich experience, which would be of great
 value to Lupins research initiatives.
 
 OUTLOOK
 
 I remain very upbeat about the business outlook for the pharmaceutical
 industry in general. While the pharmaceutical business remains
 reasonably insulated from the trying times the global economy is
 currently going through, many players have suffered during this time
 due to imprudent financial management.
 
 During times of over exuberance over the past two years, we have
 maintained financial sobriety and therefore, hardly felt the
 adversities of the global recession. Furthermore, our ability to garner
 strong market share on our base business year on year is an indicator
 of the long term sustainability of our business model, wherein we have
 been able to ensure margins and profitability even when prices are
 under pressure. Going forward, our research backbone, our efficient
 manufacturing capabilities, our marketing and servicing depth across
 the globe and overall financial strength will hold Lupin in strong form
 and on course.  Furthermore, with some of the best talent in the
 industry under our roof, I remain very upbeat about our future and have
 no doubt that we are going to enter and scale even higher orbits in the
 years to come.
 
 With Best Wishes & Regards,
 
 Dr. Desh Bandhu Gupta
 Chairman