Wockhardt

MY DEAR SHAREOWNERS
 
 - Trustworthiness is the soil that produces strong roots. From it stem
 confidence, sturdiness, zeal and ultimately, success. -Anonymous
 
 At Wockhardt, we have firmed our roots on the right soil.  And over 40
 glorious years of our existence says it all.  Having grown
 brick-by-brick, from a 40-people team to an organisation of 7,000
 professionals, we have left behind us a legacy of developing
 path-breaking and technologically advanced medicines. Through every
 single day of this journey, we have delivered on the trust our
 stakeholders have placed in us. And I must say that we have truly
 enjoyed this privilege.
 
 During the fiscal 2008, Wockhardt displayed one of its best operational
 performances, historically. Im pleased to report a 23.2% surge in
 EBIDTA to reach Rs. 8.4 billion (US$ 173 million) from consolidated
 revenues of Rs. 36 billion (US8 million).
 
 Our international business contributing 73% of the total grew by over
 40%. Most promising, was the phenomenal growth shown by our US business
 including Morton Grove Pharmaceuticals. Today with a growth of 140% in
 the US, Wockhardt demonstrates a clear ability and resolve to develop
 high technology products and penetrate the intensely competitive US
 market. Our efficient R&D and Business teams have succeeded in building
 a demonstrably competent enterprise. Placing quality above quantity,
 Wockhardt USA abides by the strategy of delivering niche technology
 driven products. It is a matter of immense pride for all of us to know
 that Wockhardt is amongst the Top-5 companies globally, to have
 received 23 Abbreviated New Drug Application (ANDA) approvals from the
 United States Food and Drug Administration in 2008 (source: Generics
 Bulletin 2009).  This laudable accomplishment highlights the continued,
 well-directed and strategic efforts of our dedicated and talented
 teams.
 
 On the other hand, Europe continues to constitute nearly 51% of our
 overall business. Well-known big pharma companies from the United
 States and Europe have trusted Wockhardt with their contract
 manufacturing and new product requirements. The UK and Irish operations
 have produced excellent results and shown double-digit growth.
 
 ON THE HOME FRONT
 
 As true pioneers in the field of biotechnology in India, we are at the
 forefront in bringing innovative medicines to the market. Our R&D
 effort has resulted in the launch of Glaritus, a recombinant insulin
 analogue - glargine. In fact, Wockhardt is the 1st company in the
 world, after the innovator, to launch this long-acting recombinant
 insulin analogue in India with a world market potential of US$ 2
 billion and more. Over the years, we have focussed on building a strong
 and comprehensive diabetes management portfolio with a range of oral
 anti-diabetic products, insulins and a blood sugar monitoring device -
 Sugarchek.
 
 Our India branded business grew briskly by 20% in 2008 as compared to
 the industry growth of 10% (ORG IMS 2008). Overall, Wockhardt increased
 its market share to 2.08% vis-a-vis 1.9% in 2007 and in the process
 also improved its industry ranking by 2 notches. Moreover, 11 Wockhardt
 brands featured in the list of Top 300 brands in the industry.
 
 THE GLOBAL FINANCIAL MAZE
 
 With our international business contributing 73% to the total
 consolidated revenues, hedging foreign exchange risk is an obvious and
 a prudent treasury operation at Wockhardt. However, challenging times
 such as these come uninvited. The prevalent financial downturn and
 fluctuating exchange rates have resulted in significant losses on our
 forex exposure. As with the marketplace, we too have been affected by
 the global financial meltdown and the ensuing credit squeeze. On the
 back of superior operational performance, we have decided to strengthen
 our gearing ratios and are in the midst of a corporate debt
 restructuring exercise. We are taking significant management
 initiatives towards containing such losses henceforth and are confident
 that as a result of this, we shall be stronger than ever... for the
 future.
 
 WOCKHARDIANS... OUR FORTE
 
 Managing in such turbulent times would have been very difficult, if not
 for Wockhardts priceless asset - its people.  As strategies bestow
 direction, a proficient team gives form to goals. With a unified vision
 and a firm commitment, Wockhardians across the globe have been integral
 to the companys success. They have provided inspiring leadership to
 achieve fantastic operational performances.
 
 EYES ON THE FUTURE
 
 Going forward, we will continue to reinvent Wockhardt and with it
 develop newer footprints for growth, to be even more competitive. At
 this juncture, Im reminded of a popular maxim, Circumstances are the
 best teachers. As a deft organisation, Wockhardt will be more focussed
 in managing its cash flows and working capital efficiently and will
 initiate better inventory and cost management practices.
 
 I am also elated to tell you that Wockhardts Board of Directors have
 taken the decision to appoint and induct on the Board, Huzaifa
 Khorakiwala as Executive Director and Dr. Murtaza Khorakiwala as
 Managing Director of Wockhardt Limited. This decision was taken to
 develop a long-term succession plan in the best interest of the company
 and all its stakeholders. This will also give me an opportunity to
 mentor and develop the next generation leaders whilst I am fully
 involved in providing leadership, strategic vision and direction to the
 companys business operations. I will continue to remain as Chairman of
 Wockhardt with all executive powers to lead the company in its future
 course of direction. Please join me in congratulating them on this
 momentous occasion.
 
 Lastly, but definitely not the least, Id like to extend my thanks to
 all our investors, customers, bankers, partners, associates as well as
 Wockhardians for their continued unstinted support and in participating
 in our future growth and prosperity.
 
                                                      Habil Khorakiwala
 
                                                               Chairman