Lupin

The Directors have pleasure in presenting their report on the business
 and operations of your Company for the year ended March 31, 2008.
 
 Financial results
                                                        (Rs. in Million)
                                             Year ended      Year ended
                                         March 31, 2008  March 31, 2007
 
 Sales (Gross)                                26098.6          20288.7
 
 Less: Excise duty                              661.7            579.4
 
 Sales (Net)                                  25436.9          19709.3
 
 Profit before interest, depreciation and tax  6481.4           4802.1
 
 Less: Interest and finance charges             343.9            370.9
 
 Less: Depreciation and amortisation            561.1            463.7
 
 Profit before tax                             5576.4           3967.5
 
 Less: Provision for taxation 
 (including wealth tax,
 deferred tax and fringe benefit tax)          1142.6            946.9
 
 Net Profit                                    4433.8           3020.6
 
 Less: Income tax-earlier years                  40.8             - 
 
 Add: Surplus brought forward 
 from previous year                            2933.3           1913.5
 
 Add: Debenture Redemption 
 Reserve written back                            10.0             10.0
 
 Amount available for Appropriation            7377.1           4903.3
 
 Appropriations:
 
 Transfer to General Reserve                   1500.0           1500.0
 
 Proposed dividend on Equity Shares             820.8            401.7
 
 Dividend on Equity Shares for previous year      5.8              - 
 
 Corporate tax on dividend                      140.4             68.3
 
 Balance carried to Balance Sheet              4910.1           2933.3
 
                                               7377.1           4903.3
 
 Performance Review
 
 Your Company scaled new heights and set new benchmarks in terms of
 sales and profits for the year ended March 31, 2008. Sales for the year
 were Rs.26098.6 mn. as against Rs.20288.7 mn. in the previous year,
 reflecting a growth of 29%. Export revenues were higher by 46% at Rs.
 13672.5 mn., while domestic sales by 14% at Rs. 12426.1 mn. Exports
 constituted 52% of total revenues during the year. Profit after tax was
 Rs.4433.8 mn.  as against Rs.3020.6 mn., registering a growth of 47%.
 The earning per share was higher at Rs.54.31 on an equity capital of
 Rs.820.8 mn. as compared with Rs.37.10 on a capital of Rs.803.4 mn. of
 the previous year.
 
 Dividend
 
 Your Directors are pleased to recommend dividend of Rs.10/- per equity
 share of Rs.10/- each, including a special dividend of Rs.5/- per
 equity share on account of excellent performance, absorbing an amount
 of Rs.960.3mn., inclusive of tax on dividend.
 
 Share Capital
 
 During the year, the paid-up equity share capital of your Company rose
 by Rs.17.4mn. consequent to: -
 
 a) allotment of 1656100 equity shares of Rs.10/- each upon conversion
 of Foreign Currency Convertible Bonds aggregating US $ 20.3 mn. and
 
 b) allotment of 80231 equity shares of Rs.10/- each to eligible
 employees under the lupin Employees Stock Option Plan 2003 and Lupin
 Employees Stock Option Plan 2005.
 
 Credit Rating
 
 ICRA Limited continued to reaffirm their A1+ (pronounced A one plus)
 rating for your Companys short term borrowing programme throughout the
 year. This rating is the highest-credit-quality rating assigned by ICRA
 for short term borrowings.
 
 Management Discussion & Analysis
 
 Adetailed Management Discussion & Analysis forms part of this Annual
 Report.
 
 Acquisitions
 
 Your Company has been exploring the option of going in for inorganic
 growth to further accelerate its pace of progress, with an eye on fair
 valuation and synergy of interests. An important milestone in this
 direction was the acquisition of a majority stake (90.3%) in Kyowa
 Pharmaceutical Industry Co., Ltd. (Kyowa), Japan.  Kyowa is a leading
 generics company ranked amongst the top 10 generic companies in Japan,
 with a rich product portfolio in the psychiatry and neurological
 therapeutic categories as well as in cardiovascular, respiratory,
 allergic and digestive system.
 
 In line with its vision of stepping up the CRAMS (Contract Research and
 Manufacturing Services) initiative, your Company acquired 100% stake in
 Rubamin Laboratories Ltd., Vadodara, which was rechristened Novodigm
 Ltd.  Novodigm has over a decade of experience in the manufacture of
 advanced intermediates for APIs. Your Company would benefit from
 Novodigms strong customer base and its capability to participate in
 the value chain from drug development to commercial production of
 advanced intermediates.
 
 Subsidiary Companies
 
 The Company had 10 subsidiaries as on March 31, 2008. Members may
 kindly refer to the Statement pursuant to the provisions of Section
 212(1 )(e) of the Companies Act, 1956 and information on the financials
 of the subsidiary companies appended thereto, which forms part of this
 Annual Report. In compliance with Clause 32 of the Listing Agreement,
 audited consolidated financial statements also form part of this Annual
 Report.
 
 Corporate Governance
 
 A detailed report on Corporate Governance forms part of this Annual
 Report.
 
 Directors Responsibility Statement
 
 Pursuant to the provisions of Section 217(2AA) of the Companies Act,
 1956 (Act), your Directors confirm that:
 
 I) in the preparation of the annual accounts, the applicable accounting
 standards had been followed along with proper explanation relating to
 material departures;
 
 ii) the Directors had selected such accounting policies and applied
 them consistently and made judgments and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of your Company at the end of the financial year ended March 31, 2008
 and of the profit of your Company for that year;
 
 iii) the Directors had taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Act for safeguarding the assets of your Company and
 for preventing and detecting fraud and other irregularities; and
 
 iv) the Directors had prepared the annual accounts on a going concern
 basis.
 
 Directors
 
 Dr. Vijay Kelkar resigned from the directorship of the Company with
 effect from December 31, 2007 as he was appointed Chairman of the 13th
 Finance Commission constituted by the Government of India. The Company
 immensely benefited from his vast knowledge and experience. The Board
 places on record its sincere appreciation of the valuable advice and
 support received from Dr. Kelkar during his tenure as a director of the
 Company.
 
 Mr. Edward R. Roberts resigned from the directorship of the Company
 with effect from April 2, 2008 on health grounds. The Board records its
 sincere appreciation of the valuable advice and support received from
 Mr. Roberts during his tenure as a director of the Company.
 
 Dr. K. U. Mada and Mr. R. A. Shah retire by rotation at the forthcoming
 Annual General Meeting and are eligible for re-appointment.
 
 Conservation of Energy, Technology Absorption and Foreign Exchange
 Earnings and Outgo
 
 As required under the Companies (Disclosure of particulars in the
 report of Board of Directors) Rules, 1988, particulars relating to
 conservation of energy, technology absorption and foreign exchange
 earnings and outgo are given in Annexure A.
 
 
 
 Fixed Deposits
 
 Your Company has neither accepted nor renewed any fixed deposit during
 the year. There was no deposit outstanding as on March 31, 2008. As on
 March 31, 2008, 222 deposits aggregating Rs.2.49 mn. were lying
 unclaimed with the Company, of which six deposits aggregating Rs.0.08
 mn. have since been claimed.  Reminders have been sent to the
 depositors concerned to claim their deposits.
 
 Human Resources
 
 With an object of building a world-class competitive work environment
 to achieve defined goals, your Company is systematically augmenting its
 human capital on an on-going basis. In its endeavour to develop and
 retain the best available talents, specialised programmes are conducted
 at various levels in the Company on a regular basis.
 
 Employee relations continued to be cordial and harmonious at all levels
 and in all the units of your Company.
 
 Auditors
 
 M/s. Deloitte Haskins & Sells, Chartered Accountants, Statutory
 Auditors, retire at the conclusion of the forthcoming Annual General
 Meeting and are eligible for re-appointment.
 
 M/s. Khimji Kunverji & Co., Chartered Accountants, Mumbai, are the
 Internal Auditors of the Company.
 
 Cost Auditors
 
 With the prior approval of the Central Government, Mr. S. D. Shenoy and
 Mr. D. H. Zaveri, Cost Accountants in practice, were appointed to
 conduct audit of cost records of API and Finished Dosages respectively.
 Cost Audit Reports would be submitted to the Central Government within
 the prescribed time.
 
 Employees Stock Option Plans
 
 Pursuant to the provisions of the Securities and Exchange Board of
 India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)
 Guidelines, 1999, as amended, the details of Stock Options as on March
 31, 2008 under the Lupin Employees Stock Option Plan 2003, Lupin
 Employees Stock Option Plan 2005 and Lupin Subsidiary Companies
 Employees Stock Option Plan 2005 are set out in Annexure B forming
 part of this Report.
 
 Particulars of Employees
 
 Information as prescribed by Section 217 (2A) of the Companies Act,
 1956 (Act), read with Companies (Particulars of Employees) (Amendment)
 Rules, 2002, is given as an annexure to this Report. However, pursuant
 to the provisions of Section 219(1)(b)(iv)of the Act, the Report and
 Accounts are being sent to all the members excluding the aforesaid
 annexure. Members interested in the said information may write to the
 Company Secretary at the registered office of the Company.
 
 Acknowledgements
 
 Your Directors wish to place on record their appreciation of the
 services rendered by all the employees of your Company, their gratitude
 to the various departments of Central and State Governments, financial
 institutions, banks, investors, business associates and customers, the
 medical profession, distributors and suppliers for their support.. 
 
                                             For and on behalf of 
                                           the Board of Directors
 
                                            Dr. Desh Bandhu Gupta
                                                         Chairman
 
 Mumbai, May 14, 2008