My dear shareowners,
 
 One of the great challenges of business is adapting to change. Our
 approach at Wockhardt has been to welcome change and see it as an
 opportunity for growth.  Last year I spoke about our new journey for
 growth and the determination to succeed.
 
 That journey has involved looking with fresh eyes at our business and
 the way we do things. It is about new ways of thinking.
 
 We are making a pradigm shift - replacing the old and embracing the
 new. Innovation is the heartbeat of Wockhardt. It goes beyond
 innovative product development and includes the development of
 innovative new business models. This is how we meet the changing needs
 and expectations of the customers we serve.  This change in mindset has
 already borne fruit as our fnancial performance shows.
 
 During the year we achieved several important fnancial and operational
 milestones. Our total consolidated sales exceeded Rs.37.5 billion (US1
 million) Operating profts (EBIDTA) reached Rs.9.1 billion (US4
 million), which is, 24.2 per cent of sales. And this, I say with great
 pride, is a true refection of the diligence, hard work and dedication
 put in by more than 6,000 Wockhardt associates globally to achieve
 these milestones.
 
 New Wockhardt – a business transformed
 
 We are building a new Wockhardt.  Our achievements in the past year are
 a measure of the way in which we have transformed the business. Our
 organisation is evolving as a value-based business to keep pace with
 the new competitive and economic realities of the world. It is a world
 in which consumers demand affordable, environmentally friendly products
 and services.
 
 The late management guru C K Prahalad, a former strategic advisor to
 Wockhardt, was a visonary man who wrote, ''Learning to do more with less
 for more people, should be the innovator''s dream''.
 
 At Wockhardt we believe that thought can be more than a dream. We are
 making it a reality. Our strategic vision during the past year has been
 ''more and more with less and less''. To meet the demands of the future,
 Wockhardt is fnding new ways to deliver more with the resources at our
 disposal. To achieve this we have focused on new ways of thinking,
 fnding new ways to approach our business, innovating and radically
 restructuring our cost base. We are seeking opportunities that create
 long-term value. And these changes are not just one offs. They are part
 of an on-going and sustainable transformation of the business. We have
 global reach, a
 
 world-class research and development capabilities and a great team of
 managers who have proven themselves as value creators.
 
 New world – strategic regional focus
 
 Wockhardt has come a long way in the past decade since we began our
 international expansion. Our business is well balanced across three
 regions – India, Europe and the US. We are poised to capture new
 opportunities in the two key geographies of the US and India.  In the
 past year the contribution of the US business to our overall sales has
 leapt from 20 per cent to 29 per cent.  Much is made of India''s growth
 and the opportunity to deliver affordable products to new segments
 where needs have been previously unmet. We are innovating to meet that
 new demand.
 
 Global structural changes
 
 Fundamental changes have shaken the world economy in the past few
 years. Old orders have been turned upside down.  Macro economic factors
 are leading to structural changes in the global healthcare industry.
 One result is that customers, including healthcare providers in more
 developed parts of the world, are also demanding greater value for
 money.
 
 Pipeline of potential
 
 New ways of thinking will prepare us for the next phase of our journey
 of growth.  We are setting new and challenging targets for ourselves.
 During the past year we received 15 ANDA/MAA approvals in the US and
 Europe. We have 41 new products in the pipeline. Wockhardt''s business
 is robust and the coming decade will offer even greater potential than
 the last.
 
 Committed to communities
 
 While we are ambitious, we do understand that the role of business is
 not merely to make proft. We have a duty to integrate ourselves into
 society and the communities and make this world a better place to live
 in. Through Wockhardt Hospitals and Wockhardt Foundation, we were able
 to touch nearly 800,000 lives through our various CSR medical
 programmes. In our inaugural CSR Thought Leadership Conclave, we had
 the rare honour of two Nobel Peace Laureates, His Holiness, The Dalai
 Lama and Prof. Muhammad Yunus shared their thoughts on the joy of
 giving and social business enterprise. Their insights are inspiring the
 new Wockhardt.
 
 New thinking will lead us to new horizons.
 
                                           Dr. Habil Khorakiwala 
                                                   Chairman