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WHEN WE LOOK
AT THE WORLD,
WE SEE INFINITE
POSSIBILITIES.
AT LUPIN, WE ARE
PRUDENTLY
CHOOSING OUR
OPTIONS AND
CONVERTING THEM
INTO REALITIES.
LUPIN LIMITED Annual Report 2007-08
Corporate Information
DIRECTORS
Dr. Desh Bandhu Gupta
Mr. D. K. Contractor
Dr. K. U. Mada
Mr. Marc Desaedeleer
Mr. Sunil Nair
Managing Director
Mrs. Vinita Gupta
Mr. Edward R. Roberts
Mrs. M. D. Gupta
Dr. Vijay Kelkar
Chairman
Dr. Kamal K. Sharma
(up to April 2, 2008)
Executive Director
(up to December 31, 2007)
Mr. R. A. Shah
SENIOR MANAGEMENT TEAM
COMPANY SECRETARY &
COMPLIANCE OFFICER
Mr. R. V. Satam
SOLICITORS
AZB & Partners
Crawford Bayley & Co.
DSK Legal
Chairman
Dr. Kamal K. Sharma
Managing Director
Mrs. Vinita Gupta
President & Managing Director Lupin Pharmaceuticals Inc., USA
Mr. Satish Khanna
Group President - API
Mr. Shakti Chakraborty
President - India Region Formulations
Dr. Ninad Deshpanday
President - Pharma Research &
Development
Mr. Vinod Dhawan
President - AAMLA & Business
Development
Mr. Rajan Dutta
President - Human Resources
Development
Mr. Nilesh Gupta
President - Advanced Markets
Mr. Naresh Gupta
President - API & Global TB
Mr. Harish Narula
President - Corporate
AUDITORS
Deloitte Haskins & Sells
Chartered Accountants
AUDIT COMMITTEE
Dr. K. U. Mada
Chairman
Dr. Kamal K. Sharma
INVESTORS' GRIEVANCES
COMMITTEE
Chairman
Dr. K. U. Mada
REMUNERATION/
COMPENSATION COMMITTEE
Dr. K. U. Mada
Chairman
Mr. Sunil Nair
(alternate - Mr. Marc Desaedeleer)
Mr. R. A. Shah
Mr. Ramesh Swaminathan
President - Finance & Planning
Mr. Sunil Makharia
Executive Vice President - Finance
Mr. Debabrata Chakravorty
Executive Vice President - Supply
Planning & Strategic Sourcing
Mr. Andrew Macaulay
Executive Vice President - Business
Development
REGISTERED OFFICE
159, C.S.T. Road, Kalina,
Santacruz (East), Mumbai-400 098.
Tel:+ 91 22 6640 2323
Fax:+ 91 22 2652 8806
CORPORATE OFFICE
Laxmi Towers, 'B' Wing,
Bandra Kurla Complex,
Bandra (East),
Mumbai - 400 051.
Tel: + 91 22 6640 2222
Fax: + 91 22 6640 2130
www.lupinworld.com
Mr. Alok Ghosh
Executive Vice President - Global Dosage
Form Manufacturing and Quality Assurance
BANKERS
Central Bank of India
Bank of Baroda
State Bank of India
Citibank N.A.
ICICI Bank Ltd.
The Hongkong and Shanghai
Banking Corporation Ltd.
Standard Chartered Bank
ABN AMRO Bank N.V.
Forward-Looking Statement
In this Annual Report, we have disclosed forward-looking information to enable investors to
comprehend our prospects and take informed investment decisions. This report and other
statements - written and oral that we periodically make, contain forward-looking statements that
set out anticipated results based on the management's plans and assumptions. We have tried,
wherever possible, to identify such statements by using words such as 'anticipate', 'estimate',
'expects', 'projects', 'intends', 'plans', 'believes' and words of similar substance in connection with
any discussion of future performance.
We cannot guarantee that these forward-looking statements will be realised, although we believe
we have been prudent in assumptions. The achievement of results is subject to risks, uncertainties
and even inaccurate assumptions. Should known or unknown risks or uncertainties materialise, or
should underlying assumptions prove inaccurate, actual results could vary materially from those
anticipated, estimated or projected. Readers should bear this in mind.
We undertake no obligation to publicly update any forward-looking statements, whether as a
result of new information, future events or otherwise.
Our Vision
TO BE
TO BE AN INNOVATION
AN INNOVATION LED
LED TRANSNATIONAL
TRANSNATIONAL
PHARMACEUTICALCOMPANY
COMPANY
PHARMACEUTICAL
CONTENTS
04
Financial Highlights
06
Business Highlights
08
Chairman's Message
12
Managing Director's Review
Management Discussion and Analysis
16 Industry Overview
20 Formulations - Advanced Markets
26 India Region Formulations
32 Asia, Africa, Middle East and Latin America
36 CIS
40 API & Intermediates
44 Research & Development
54 Human Resources
58 Financial Overview
62 Corporate Social Responsibility
66 Five Year Financial Summary
68
Reports & Financials
04
Financial Highlights FY2007-08
4074.5
6423.0
Rs. in Mn
Rs. in Mn
2255.0
2976.6
4912.8
5402.1
Profit Before Tax (PBT)
EBIDTA
2005 - 06
2006 - 07
2005 - 06
2007 - 08
Consolidated Net Profit
2006 - 07
2007 - 08
Earnings Per Share (Basic)
50.01*
37.79*
42.24
2005 - 06
2006 - 07
Rs.
Rs. in Mn
1729.9
3085.6
4082.5
* With effect of Bonus issue
2005 - 06
2007 - 08
Consolidated Gross Sales (Market Break-Down)
2006 - 07
2007 - 08
Consolidated Gross Sales (Business Mix)
API
Formulations
2005 - 06
2004 - 05
Anti - asthma
Anti - diabetic
CNS
Cardiovasculars
61
52
2006 - 07
% Contribution
30
2005 - 06
2004 - 05
2007 - 08
Revenue Composition (%)
Anti - TB
12
39
42
2007 - 08
Therapeutic Mix (%)
Others
48
58
2006 - 07
% Contribution
23
16
22
35
65
77
78
84
70
Advanced Markets
Emerging Markets
API India
11
20
1
2
4
46
Cephalosporins
API
Emerging Markets
16
API
Advanced Markets
3
33
15
3
Formulations Domestic
34
Formulations
Advanced Markets
Formulations
Emerging Markets
Our Values
SUPERIOR PERFORMANCE
Exports
ENTREPRENEURSHIP
5260
5094
INTEGRITY
583
Rs. in Mn
3051
4938
5555
5921
10032
Formulations
API
2004 - 05
2005 - 06
2006 - 07
2007 - 08
CUSTOMER ORIENTATION
WORKING TOGETHER
RESPECT FOR PEOPLE
Consolidated Gross Sales (Geography Break-Down)
51
52
Domestic
Exports - Advanced Markets
Exports - Emerging Markets
2004 - 05
2005 - 06
Contribution (%)
20
25
23
27
16
22
34
35
45
50
05
2006 - 07
2007 - 08
100***
Dividend History
50
65
65
50**
Dividend (%)
35
50*
65
* Including Interim Dividend @ 25%
** Dividend on enhanced capital, post bonus issue 1:1
*** Proposed Dividend, including a special dividend of 50%
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
06
Business Highlights
FORMULATIONS
API
! 3 Fastest growing generic
! Volume growth in Cephalosporin
rd
pharma Company in the US by
prescriptions
! 15 Generic products
commercialised in the US with
No.1 position in four
! Suprax® exhibits 55%
prescription growth in the US
! Line extension of Suprax®
Intermediates
! Maintained stability on Pen-G
derived products despite
volatility
! Continued thrust on Lisinopril
and other Prils
! Steady increase in regulatory
filings - DMFs, EDMFs and COS
launched
! Cumulative Regulatory filings in
key markets: US 62, UK 21,
France 9, Australia 16
! Received 'Best New Manufacturer
of the Year, Generics Rx' Award
from AmerisourceBergen
! Received 'Quality Supplier
FACILITIES
! Jammu facility for Anti-TB,
Anti-asthma and other oral
solids commissioned
! First generic launch in France for
! Goa facility expanded
! Indore plant commissioning on
! UK Direct-to-Market starts with
! New Multi-Purpose Plant at
Award' from Cardinal Health
Cefpodoxime Proxetil
promising market share gain in
Lisinopril
! Australia - Sales commenced
! India Region Formulation th
Ranked 6
Outpaces market and
prescription growth rates
Fastest growing Company
amongst the top 10 in the IPM
the Anvil
Tarapur for advanced markets
commissioned
07
R&D
M&A
FINANCE
IP Strengths -
! Gateway to Japan - Acquisition
! Consolidated Sales (Gross) -
! Euro 20 Mn income from Servier
of France for the sale of
additional patent rights for
Perindopril
! Introduction of Cefdinir, in the
US, after a successful litigation
and settlement with Abbott
! Court of Appeals ruled in favour
of Lupin, finding the Aventis
patent on Ramipril invalid product launched in the US
! NCE Research - Steady progressOne molecule in Phase III, Two
molecules in Phase II and One
molecule completed Phase I
! R&D Spend - 7.5% of
Consolidated Net Sales
of Kyowa Pharmaceutical Ind.
Co. Ltd.
! Rubamin Laboratories Ltd
(rechristened as Novodigm
Ltd.) acquired, to emerge as
part of global CRAMS strategy
Growth 34% at Rs. 27,730 Mn
Consolidated Net Profit growth
32% at Rs. 4,082.5 Mn
! Board recommends a dividend of
100% (including a special
dividend @ 50%)
! Lupin's short-term debt
programme receives the highest
rating from ICRA
! Basic Earnings Per Share of
Rs.50.01, up by 32% from the
previous year
! Reserves and Surplus at
Rs.11,976 Mn, up by 51%
! Debt Equity Ratio 0.78:1
! FCCB conversion commenced
HUMAN RESOURCES
Initiatives undertaken for -
!
!
!
!
Grooming future leaders
Increasing employee productivity
Optimisation of costs
Employee engagement Chairman and MD reaching
out to Lupinytes.
08
Chairman’s Message
FROM A SIMPLE ASPIRATION
TO GOING BEYOND US$1 Bn
Chairman
09
I believe that every possibility harbours a
reality and all we need is the vision to see it
and the resolve to capitalise it. At Lupin, we live
this belief and strive to convert every
possibility into a reality.
Dear Shareowners,
I believe that every possibility harbours a reality and all we
need is the vision to see it and the resolve to capitalise it. At
Lupin, we live this belief and strive to convert every
possibility into a reality. Today, we have come a long way
from being a manufacturer and supplier of APIs, to
becoming a fully integrated global pharmaceutical
company. Behind us, we have left a trail that exemplifies
our determination to turn possibilities into realities.
Leveraging cutting edge technology to deliver innovative
offerings, our journey has just begun…
STRONG FINANCIAL PERFORMANCE
The bygone fiscal was a momentous landmark in our
journey. Impressive growth, noteworthy profits and
meaningful acquisitions – 2007-08 has witnessed it all, to
aptly qualify as an action-packed year.
We closed the year 2007-08 with Consolidated Revenues
at Rs. 27,730 Mn (Rs. 20,717 Mn-FY2006-07) recording a
growth of 34%. Our Consolidated Net Profit for the year
increased by 32 % to Rs. 4,083 Mn (Rs. 3,086 Mn-FY2006-07).
I am happy to share that this year's performance was
driven by all round robust growth recorded by each of the
Company's business segments. The US as well as India
business inparticular weresignificantgrowthdrivers this year.
FORGINGAHEAD INTHEADVANCED MARKETS
Our US business clocked in a stellar performance by more
than doubling in size. The Company achieved the
distinction of being rated as the third fastest growing
company in the US for the year 2007 in terms of
prescriptions. Lupin received two awards that demonstrate
the quality of our products and strength of our marketing
10
in the world's largest pharma market. These were, the
'Best New Manufacturer of the Year Award' from
AmerisourceBergen and 'Quality Supplier of the Year
Award' by Cardinal Health.
Services (CRAMS) space. The technological expertise,
meaningful relationships and manufacturing capacity that
Novodigm brings, are catalysts to our success in this arena.
FOCUS ON SPECIALISED PRODUCTS
GAINING STRONGHOLD IN THE DOMESTIC
MARKET
Consistently outperforming the industry growth, we are
truly proud of what our India business has delivered. We
continue to grow from strength to strength on the domestic
th
front. The 6 rank in the marketplace as per IMS ORG, up
th
from the 10 in 2006, truly substantiates our capability and
determination in seeking domestic leadership.
ACCELERATING PACE THROUGH STRATEGIC
ACQUISITIONS
I am proud that we have consistently outperformed the
industry in terms of organic growth and this year we
supplemented this with inorganic opportunities. The
strategic acquisition of Kyowa, during 2007-08 has
propelled Lupin directly into the elite league of the top 10
generic players in Japan, the second largest and one of the
most stringent pharma markets of the world. Kyowa has
brought with it a rich product portfolio, extensive market
reach, a world class R&D setup and state of the art
manufacturing capabilities. We are now focussed on
consolidating our position in Japan as the acceptance for
generics continually increases.
Having tasted success in Japan, we are also scouting for
meaningful acquisitions in the emerging markets of South
East Asia, particularly Philippines, Middle East, South Africa
and Europe. We have devised a two-pronged strategy to
tap the lucrative US market. Much as we are developing a
healthy pipeline of value-added generic products, we are
also working towards the acquisition of strategic brands in
the US, across various therapy segments.
As I talk about acquisitions in select markets of the world,
India is certainly no exception. The acquisition of Rubamin
Laboratories Ltd. (rechristened as Novodigm) marks our
foray into the Contract Research and Manufacturing
Today, we are sufficiently broad-based in terms of our
spectrum of product offerings and geographical reach.
However, as we step into the next phase of our growth we
are focussing on leveraging our existing technological
capabilities to develop value added differentiated products
that will further strengthen Lupin's position.
During the year we have forayed into new therapeutic
areas such as Anti-asthma, Biosimilars and Steroids.
Having set up specialised laboratories as well as a
dedicated production facility, we are making significant
inroads into the Steroids arena. In the forthcoming fiscal,
we will initiate commercial production.
We have already achieved significant market share in the
domestic Anti-asthma space. We are now working towards
introducing these products in other markets around the
world. I am confident that Lupin will make its presence felt
globally in this therapeutic area.
RESEARCH
Our innovative research is focussed largely on four areas,
New Chemical Entity Research, New Biological Entity
Research, Advanced Drug Delivery Systems Research and
Innovative Generics Research. In all these areas a sound
base has been created including initiation in the Biotech
area. We have planned to make substantial investments in
this area as we believe Biotechnology is the frontier area of
technology. Over 40% of all future discoveries in
pharmaceuticals are expected from biologicals.
I believe concrete outcome of our research work done
should start getting market recognition soon. My
confidence emerges from the powerful leadership and
infrastructure created in the entire spectrum of research at
Lupin. Innovation is at the heart of Lupin and is being
continuously strengthened further.
11
INTELLECTUAL PROPERTY MANAGEMENT
NURTURINGTHE FOUNDATIONS OFTHE SOCIETY
Over the last few years the Company has demonstrated
the success of its Intellectual Property Management
through multiple developments. This year we received
further income of Euro 20 Mn (Rs. 1,127 Mn) for the sale of
additional IP on Perindopril, launched Cefdinir in the US
after a successful litigation and settlement agreement and
won the Ramipril litigation at the Federal circuit. These
developments reflect the unique capabilities the Company
has built in matters pertaining to Intellectual Property.
We consider ourselves fortunate for having had the
opportunity to serve society through the Lupin Human
Welfare and Research Foundation (LHWRF). The social
initiatives at Lupin are aimed at strengthening the very
foundation of our society. Consequently, we lay emphasis
on imparting education, facilitating employment
generation, creating health awareness and efficient water
management. Today LHWRF's efforts cover over 2.2
million villagers.
AUGMENTING MANUFACTURING CAPACITIES
BUSINESS OUTLOOK
In order to meet the challenges of the future, the Company
augmented manufacturing capacities this year at most of
its plants. A state of the art Formulations facility at Jammu
was fully commissioned while another green field project
at Indore is well under way. This will be a highly specialised
facility for both API's and Formulations. New technological
initiatives were also taken for energy conservation and
environment protection.
As we move closer to our goal of US$ 1 Bn we are
challenging ourselves to set new milestones. We are
accelerating our pace to strongly establish Lupin in five of
the top 10 pharmaceutical markets of the world. We are
aiming at generating two thirds of our revenues from the
global markets. We will continue to consolidate our market
share position in the domestic market as we renew our
vigour to keep growing ahead of the industry.
The Company has incurred a capital expenditure of around
Rs. 2,500 Mn augmenting its manufacturing capabilities
and creating new projects this year. We believe this is a
sound investment for our growth.
Our focus on technology and differentiation will enable us
to charter into new areas of business. Today we are well
positioned to strengthen our formulations business in the
Advanced Markets as we gear up to replicate the success of
our US operations in Europe, Japan and Australia.
MANAGEMENT BANDWIDTH
At the heart of every successful organisation, lies its people
and this holds true for Lupin as well. In strengthening our
leadership team we look at bringing in the best talent the
world has to offer. During the year we expanded our senior
management team to include experts like Dr. Ninad
Deshpanday, who joined us as President, Pharma R&D and
Mr. Ramesh Swaminathan, as President, Finance and
Planning. Soon joining us would be an eminent scientist
in the area of New Chemical Entity Research who will
steer our NCE discovery programme. Please join me in
welcoming them and the leadership teams of Kyowa and
Novodigm into the Lupin family.
I would like to express my gratitude towards all our
stakeholders for their continued support and belief in our
capability. Your confidence drives us to aspire to even
greater heights.
With Best Wishes & Regards,
Chairman
12
Managing Director’s Review
FROM DOMESTIC STRONGHOLD
TO GLOBAL FOOTPRINT
Dear Shareowners,
'Promising' is the word that comes to my mind while
describing the year 2007-08, at Lupin. With revenue and
profit growth being way ahead of industry, we have
definitely recorded impressive numbers. What is
encouraging is that while every business of the Company
has contributed towards this success, the performance
turned out by the formulations business in the advanced
markets (US and Europe) is rather commendable,
registering a growth of 113%. I take pleasure in
announcing that our consolidated topline recorded a
growth of 34%, while the bottom line grew by 32 %. Our
net profits stand at Rs. 4,083 Mn.
The end of yet another successful fiscal has reaffirmed my
faith in the famous maxim - 'Whatever the human mind
can conceive and believe, it can achieve.' Four years ago,
we embarked on a journey to move up the value chain. I'm
proud to say that today, we've reached a significant
milestone in our quest. Our formulations business has grown
to account for 70% of our portfolio, up from 42% three years
back - a clear indication of our value-added offerings.
OUR STURDY FOUNDATIONS
Standing tall on a firm R&D base, we are adapting latest
technologies in developing innovative formulations to
meet the needs of contemporary times. We have aptly
demonstrated our capabilities to create and defend our
intellectual property. We are continuously building our
intellectual wealth and have strengthened our delivery
research and drug discovery research during the year. We
have also set up research and development for biologicals
and this is going to further add to the momentum of
creating sound intellectual properties.
13
We differentiate
ourselves as a company
which sets stretched
goals and prides in
achieving them
Dr. Kamal K. Sharma
Managing Director
14
BIOTECHNOLOGY - ADDITIONAL LEVER OF GROWTH
CHARTINGTHE INORGANIC ROUTE
I strongly believe that perceptive strategies make all the
difference. To be a successful pharmaceutical company,
we recognize that biologicals will form an important
component of our business. Based on our experience and
understanding of the marketplace and taking advantage
of the hindsight of a late entrant, we have put in place a
detailed blue-print for establishing ourselves in this
space. During the year, our biotechnology initiative
gathered significant momentum. Today, we have already
in-licensed five biologicals. Besides inhouse product
development, we have entered into strategic
arrangements for co-development. We are now in the
process of establishing a cGMP certified manufacturing
facility at Pune.
Turning another leaf in our march towards globalisation,
we commenced our forays into Japan, the second largest
pharmaceutical market of the world. This has been
facilitated through acquisition of Kyowa Pharmaceuticals.
Kyowa among the top 10 generic companies presents a
perfect mélange that assures bright prospects in the
Japanese pharmaceutical market a robust product
portfolio, state-of-the-art manufacturing facilities and
R&D and strong brand equity.
SPREADING OUR AMBIT
Our plans for creating a global footprint have taken off
extremely well. Currently, 55% of our revenues are
contributed by international business. Lupin is fast
forging its presence in selective markets across the
world. During the year under review, advanced markets
of US and Europe have contributed 30% to the topline.
This year, we made our first launch in Europe through
Cefopodoxime Proxetil in France followed by Lisinopril in
the UK. While these two launches mark the beginning of
our forays into Europe, we can look forward to promising
prospects in this geography. I am also pleased to
announce that Lupin is one of the few Indian companies
to have a presence in Australia and Gulf Co-operative
Council countries. Both these markets are of significance
for the growth of generic business.
The Government is doing everything possible to promote
the use of generics and this indeed augurs well for our
growth story.
During the year we also acquired Rubamin Laboratories
Ltd., now christened as Novodigm to provide desired
impetus to CRAMS business. We believe this acquisition
will add substantial weight to CRAMS through technology,
manufacturing capacity and customer contacts.
ONTHE HOME FRONT
As I often say our team in the Indian market has made it a habit
to beat the market growth. We continue to grow at almost
twice the industry rate of growth. Lupin has graduated from
the 10th position in year 2006 to occupy the 6th rank in the
Indian Pharmaceutical sector, according to IMS ORG ( MAT
March -08). This has been contributed by a combination of
unique promotional strategies, judicious selection of products,
and an extremely motivated team. We are committed to
expand and grow on the strength of innovative products,
additionofnewtherapies andenhancedmarketreach.
15
Turning another leaf in
our march towards
globalisation, we
commenced our foray
into Japan, the second
largest pharmaceutical
market of the world.
BUILDING COMPETENCIES
We are an ambitious Company and achievement of each
milestone marks the beginning of a fresh journey for us. In
pursuit of accelerated and profitable growth, we have to
continuously build right competencies. We are undertaking
introduction of 'assessment centers' as a development tool to
assess current competencies and the gaps thereof. This will
enable us to draw up requisite development plans for our
people. We value our people; their commitment and
contribution forms the core of our growth aspirations.
A LOOK INTOTHE FUTURE
At Lupin, profitable growth must remain the order of the day,
everyday. We differentiate ourselves as a Company which sets
stretched goals and prides in achieving them. We have lots to
achieve. Going forward, you would see the Company
consolidating and growing in all its chosen markets on the
strength of its technology base and seamless execution.
Best Wishes & Regards,
Dr. Kamal K. Sharma
Managing Director
16
Industry Overview
FROM KNOWING MARKETS
TO CAPITALISING OPPORTUNITIES
THE GLOBAL PHARMACEUTICAL MARKET*
According to IMS Health (IMS), the global pharmaceutical
market has recorded a growth of 95%, over the last
7 years, moving up from US$ 365 Bn (2000) to US$ 712 Bn
(2007).
2001
712
649
605
560
499
US$ Bn
392
2000
428
365
Global Sales
2002
2003
2004
2005
2006
expected in the US pharma industry, with generics
accounting for more than two-thirds of the overall
prescriptions generated. Espicom Business Intelligence
reports that the world generic pharmaceutical market was
estimated to be valued around US$ 84.4 Bn in 2006,
with USA, the world's largest generic market valued at
US$ 31 Bn.
2007
The US continues to be the single largest pharma market,
estimated at US$ 286.5 Bn. It, however, contributed only
25.5% of the total growth to the global market in 2007,
which is the lowest level of contribution. A growth of 4-5% is
The aggregate growth of the five major European markets,
viz., France, Germany, UK, Italy and Spain, was 4.8%
over the year. The rest of the European markets, valued at
US$ 81.6 Bn, expanded by over 10%. The uptake of generic
drugs in Western Europe varied from country to country,
but there is a distinctive shift towards genericisation. This
trend is most noticeable in Spain, France and Italy, where
so far, generic consumption is dismally low, but on an
increase. High-price markets such as, Germany, UK,
and Netherlands, have encouraged the use of generics in
order to bring down their healthcare expenditure .
17
> Industry Overview
> CIS
> API
> Advanced Markets
> R&D
> HR
> IRF
> AAMLA
> Financial Overview
> CSR
It is not just about knowing
the market. It is also about
translating knowledge into value.
At Lupin, it is a constant practice.
Encouraged by our experience
in serving the pharmaceutical
arena, we have successfully
traversed the distance between
gaining knowledge and
converting it into opportunities,
to create shareholder value
Global Market Share - Key Markets (% Feb’08)
Latin
America
5
Japan
9
AAA
9
46
Europe
IMS reports that the Latin American markets
continued their rapid expansion, registering a growth
of 11.6% in 2007, with a market size, estimated at
US$ 42.4 Bn.
Similarly, the Japanese pharmaceutical market grew by
3.6% to reach US$ 65.2 Bn. The growth registered by the
Japanese market during 2007, is higher than the
compounded annual growth rate (CAGR) of the previous
five years.
The Asian markets experienced a double-digit growth, on
account of a significant expansion of healthcare access in
the region. These markets (excluding Japan, including
Australia and New Zealand) grew collectively by 13.3%
and represent close to 11% of the total global sales.
In terms of revenue, the ten key markets constitute over
80% of the global pharmaceutical industry. The year 2008, is
slated to witness a shift in growth from the top seven
markets to emerging markets and from primary care-driven
to specialty care-driven drugs. The markets of China, Brazil,
Management Discussion & Analysis
North
America
31
Mexico, South Korea, India, Turkey and Russia are projected
to experience growth at the rate of 12-13% to reach
US$ 85-90 Bn.
It is a favourable time for the generic manufacturers, mainly
because a large number of top selling drugs are due for patent
expiry in the US. Further, a large number of countries are
promoting the use of generics as a means of containing
healthcare costs. It is estimated that the generic market is
currently growing faster than the pharmaceutical
industry, as a whole. It is also further estimated that around
50% of US prescriptions are for generics and nearly 80% of UK
NHS prescriptions are written generically.
*(Source IMS Health)
THE INDIAN PHARMACEUTICAL MARKET (IPM)**
ORG IMS reports that the IPM has been valued at around
US$ 7.8 Bn, and over the last four years, the IPM has grown
at a CAGR of 13%.
McKinsey & Company's recent research estimates indicate
that the IPM is expected to grow to a size of US$ 20 Bn by
18
2015 and will be among the top 10 pharma markets of the
world.
Factors contributing to the above growth are:
! Increasing disposable incomes and the number of
middle-class households
! Expansion of medical infrastructure
! Greater penetration of health insurance
! Rising prevalence of chronic diseases
! Aggressive market penetration, driven by the
relatively small companies
! Adoption of product patent
Their research further points out that growth in the Indian
pharmaceuticals market is anticipated to be well
distributed across urban and rural areas. Rural areas are
expected to account for a third of the country's consumption
growth, over the nexttwodecades.
The Indian companies' contribution to the IPM is
estimated to be around 80% and there are only 11 MNCs
among the top 50 pharma companies. The chronic
segments have shown a CAGR of 16% in terms of value,
over the last four years, while acute segments exhibited a
growth of 12% on a CAGR basis. The contribution of
combination drugs is estimated to be around 46%.
IPM - Leading Therapy Classes (% share)
Others
Anti-diabetic
12.9
4.9
Neuro/CNS
5.5
Derma
5.5
Gynaec
Vitamins/Minerals/
Nutrients
11
5.6
10.7
9
8.3
8.9
**(Source ORG IMS)
Anti-infective
17.7
Gastro Intestinal
Cardiac
Respiratory
Pain/Analgesics
LUPIN
- ON A FAST TRACK
Lupin has successfully positioned itself as a Transnational
Pharmaceutical Company, with a wide global footprint. It
has gained recognition as the world's largest manufacturer
of Tuberculosis drugs. Over the years, the Company has
moved up the value chain and has not only mastered the
business of certain intermediates and APIs, but has also
leveraged its strengths to build a formidable formulations
business. Over the last four years, the Company's business
mix has improved, with close to 70% of its revenues
coming from formulations and 30% from APIs.
In terms of geographies, the Company has retained a
stronghold in India, growing ahead of the industry and has
developed a sound branded and generic business in the US. In
terms of overall revenues, the overseas business constitutes
close to 55%, while the balance comes from the domestic
market. The US is Lupin's largest market overseas. The
Company aspires to replicate this success in other Advanced
Markets such as, Europe, Japan and Australia.
19
Lupin has successfully positioned itself as a Transnational Pharmaceutical
Company, with a wide global footprint. Over the years, the Company has
moved up the value chain and has leveraged its strengths to build a
formidable formulations business. The Company's business mix has
improved, with close to 70% of its revenues coming from formulations
and 30% from APIs.
During the year, Lupin further fast tracked its growth
trajectory through two acquisitions. While the acquisition of
Kyowa positioned the Company amongst the top ten
generic pharma companies in Japan; another acquisition in
India provided it a springboard to leap ahead in the CRAMS
space.
Lupin's manufacturing facilities, spread across India, play a
critical role in enabling the Company realise its global
aspirations, benchmarked to international standards, these
facilities are approved by international regulatory agencies
such as US FDA, UK MHRA, TGA Australia, WHO and MCC
South Africa.
The Company's domestic formulation business has
consistently exhibited a handsome growth, way ahead of
the IPM.
The Company has leveraged its strong vertical integration
in building a global pharmaceutical powerhouse. The
Company's Research prowess enables it to master cutting
edge science and technology. Lupin is poised and well
prepared to capitalise the opportunities that are set to
unfurl in the global pharmaceutical space.
This performance has translated into Lupin graduating to
the sixth position in the IPM. From being a predominantly
Anti-TB Company, today Lupin holds a wide product
basket, spanning multiple therapy areas, with a focus on
chronic segments. The Company is further augmenting its
product offerings through in-licensing.
20
FormulationsAdvanced Markets (USA and Europe)
FROM CONCEPTION
TO CONVICTION
A wide spectrum of products, vertical integration,
perceptive marketing strategies and attractive
prices have enabled us to develop a formidable
presence in the Advanced Markets, a testimony
to our flight from conception to conviction.
The Company's Advanced Markets business in the US and
Europe did extremely well during the year, recording sales
of Rs. 8,430 Mn. (US$ 210.9 Mn) and registering a growth
of 75%, over the previous year. This was led by the US
contributing Rs. 7,657 Mn. (US$ 191.6 Mn) and Europe
reporting sales of Rs. 773 Mn. (US$ 19.33 Mn).
Ms. Vinita Gupta, President & MD - Lupin Pharmaceuticals Inc. USA
21
> Industry Overview
> CIS
> API
> Advanced Markets
> HR
> R&D
> IRF
> AAMLA
> CSR
The Company has built a
strong foothold in the
Branded market and is an
emerging market leader in
the generic space over the
past 3-4 years in the US
USA
The Company's formulation business was the key growth
driver, reporting a stellar growth of 103%, riding on the
success of Direct-To-Market (DTM) and brand business.
Intellectual Property (IP) based products, coupled with
sound marketing, backed by world class manufacturing
and research capabilities, have helped the Company
emerge as a strong generic player in the US.
299
Rs. in Mn
3553
2240
7205
Formulations Revenue - US
2004-05
2005-06
2006-07
2007-08
The Company has built a strong foothold in the paediatric
Branded market and is an emerging market leader in the
generic space over the past 3-4 years in the US.
22
US Generics
This year, the generics business in the US clocked sales of
US$ 118Mn, recording an exponential growth of 127%.
The key growth drivers were increased market share for
Lisinopril and Lisinopril+HCTZ and the launches of
Cefdinir, Trandolapril, Lovastatin, Amlodipine and
rd
Simvastatin. For the year 2007, Lupin was ranked as the 3
fastest growing Company in the US, in terms of
prescriptions (as per IMS) and Lupin's Lisinopril was rated
as the fastest growing product, in terms of prescriptions,
having garnered leading market share position in field of
10 competitors.
The Company has a product basket of 15 generic
formulations in the market and it ranks in the top 3 in 10 of
the 15 products.
Lupin's prescription growth and penetration has been
faster and deeper than any other large domestic player.
The key factors contributing to the success of the
Company's generic strategy in the US are:
Wide Product Portfolio
The Company has built significant expertise in identifying
and developing the right products. It focusses on 'difficult
to make' complex and innovative products, in addition to
niche products. The Intellectual Property Management
Group focusses on building a differentiated product
pipeline, based on the Company's key strengths in the
areas of APIs and formulations.
Ramp-up By Lupin In Total US Market Prescriptions*
6000000
5000000
Caraco Pharm, Sun Pharmaceutical
Dr. Reddy's Lab
Ranbaxy Labs
Lupin
4000000
3000000
2000000
1000000
0
April 2005
March 2008
During the year, the Company filed 11 ANDAs, taking its
cumulative filings to 62, with 27 ANDA approvals received.
Additionally, the cumulative DMF filings stand at 74, with
14 made during the year. The estimated market size of
Lupin's ANDAs i.e., molecules for which it has got
approval / submitted dossiers, is close to US$ 42.5 Bn.
(source IMS MAT DEC 07).
Lupin has developed a balanced pipeline, of Para III, Para IV
filings, controlled release and other niche products.
IP Based Products
The Company has built strong capabilities in identifying
and challenging unique opportunities. The IP team had two
big wins this year.
In the early part of the year, a significant achievement for
the Company was the introduction of Cefdinir, after a
successful litigation and settlement with Abbott
Laboratories and Astellas Pharma Inc., in USA. Lupin was
the first Company to receive an approval from the US FDA
for Cefdinir and launched the products after the
settlement.
Similarly, in case of the Ramipril litigation, the Court of
Appeals for the Federal Circuit reversed a district court
decision, finding the Aventis patent on Ramipril invalid.
Ramipril is one of the ACE inhibitors used for the treatment
of high blood pressure. Lupin believes that it is a landmark
decision and reflects the strength and maturity of the
Company's IP capability.
Market Share Gains By Lupin Across Several Products*
Apr-07
70
60
50
40
30
20
10
0
Apr-08
(%)
Cefprozil
Tab.
Cefprozil
Susp.
Lisinopril
Lisinopril Meloxicam
HCTZ
Tabs
Quinapril
HCl
Lovastatin
*Source IMS (Featured in Lehman Brothers Global Equity Research Report)
23
Vertical Integration
Lupin's success in the Advanced Markets is aided by the
Company's strong vertically integrated operations
spanning across intermediates, APIs and formulations
which distinctly provide it the competitive edge needed in
the increasingly competitive markets.
Scale and cost has played a critical role in carving Lupin's
market success. Lupin's cost efficient manufacturing of
APIs and formulations in India, provides the Company the
competitive edge needed in an otherwise crowded generic
market.
Quality
The Company's presence in the market has been applauded
by its customers. During the year, the Company received
the 'Best New Manufacturer of the Year, Generics Rx' award
from AmerisourceBergen, a leader in healthcare distribution
in the US. The award recognises Lupin's contribution and
commitment towards excellence as a generic drug supplier
in the US. The Company also received the 'Quality Supplier
Award' from Cardinal Health Inc., a leading wholesaler. This
award is a recognition of the suppliers, who meet or exceed
Cardinal's standards of quality in service levels, lead-times
and customer service.
Mr. Nilesh Gupta, President - Advanced Markets
Intellectual Property based products,
coupled with marketing muscle,
backed by world class manufacturing
capabilities and research, have helped
the Company emerge as a strong
global generic player
Marketing Strategy
The Company's carefully crafted marketing strategies have
resulted in enhanced market penetration. Today, the
Company has a presence across all major classes of trade
such as, the chain drug stores, distributors, wholesalers and
mail order houses. The mix of these channels is guided by
the strength of the individual class of trade for a given
molecule. The Company is engaged in developing strategic
alliances with key trade partners, with the objective of
achieving a sustainable long-term position in the market.
'Best New Manufacturer of the Year, Generics Rx'
Award from AmerisourceBergen
24
US Branded
The Company's foray in the US market, with the launch of
'Suprax®' as a brand for the paediatrics segment, was an
outcome of innovative market strategy, which was unlike
most other generic players.
Driven by a blend of experience, deep market understanding
and effective management of its 50-strong sales team to
enhance productivity, Suprax® has evolved to become a
US$ 40 Mn plus brand, over the last four years. During
2007-08, Suprax® continued to chart strong growth,
recording a prescription growth of 55% and revenue
growth of 52%. The Company, so far, participates only in
26% of the national market, leaving ample scope to
further enhance the penetration of Suprax®.
In order to further extend the brand franchise, the
Company launched Suprax® Double Strength powder for
suspension. The product has proved to be a success as
evident from the rising prescriptions, which reflect a
healthy trend towards the Double Strength products.
Additionally, the Company recently introduced Suprax®
400 mg tablets that offer an additional value proposition
to Paediatricians by covering the adolescent and teenage
patient population. The incidence of urinary tract
th
infections is high in children and Paediatricians are the 5
Suprax's Double-dose Strength Gaining Market Share*
Total Suprax TRx
Share of Double Dose
(%)
50,000
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
May 2005
45
40
35
30
25
20
15
10
5
0
April 2008
*Source IMS (Featured in Lehman Brothers Global Equity Research Report)
largest specialty prescribing antibiotics for this indication.
Suprax® tablets are well-positioned to fit into this niche
segment.
The Suprax® brand basket now includes, Suprax® (Cefixime
for oral suspension 100 mg/ 5 ml, 200 mg/ 5ml and Suprax®
400 mg tablets ( Cefixime Tablets).
Following the success of Suprax®, the Company is
focussing on strengthening its portfolio with more valueadded, differentiated products and is constantly engaged
in product development, using its proprietary controlled
release and taste masking platforms.
The Company is also aggressively pursuing in-licensing
opportunities to add to its basket for paediatricians.
EUROPE
After making successful inroads in the US, the Company is
working to replicate this success in the European markets.
Today, the European pharmaceutical markets are
witnessing deeper generic penetration as Governments
accelerate their efforts towards encouraging the use of
generic medicines, in order to contain burgeoning healthcare
costs arising from an upsurge in the ageing population.
The Company's product portfolio for Europe encompasses
offerings in the Anti-infective, Cardiovascular and CNS
segments. The accent is on leveraging the Company's
development, manufacturing and commercialisation
capabilities and offer complex products, which provide a
natural hedge against competition and price erosion.
25
UK-Direct to Market
Lupin launched its direct-to-market initiative under its
own label during the year. Its flagship product Lisinopril has
been well received and has achieved a market share of 15%
in the first four months of product introduction.
The Company has a strong pipeline of 21 MAAs for various
products. The Company expects to repeat the successful
launch of Lisinopril with a host of additional offerings.
France and Other European Markets
Lupin is forging ahead in France and other markets,
leveraging its partnership business model. During the year,
Cefpodoxime Proxetil tablets introduced in France through
multiple partners garnered over 50% market share. The
Company is looking forward to replicate this success with
the launch of Cefpodoxime Proxetil powder for suspension,
amongst other products.
Packs
Cefpodoxime Proxetil Tab. - France
Generic Split: Lupin Vs. Others
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Lupin
Others
Aug-07
Sep-07
Oct-07
Nov-07
Lupin launched its direct-to-market
initiative in UK under its own label,
during the year. Its flagship product
Lisinopril has been well received and
has achieved a market share of 15%
in the first four months of product
introduction.
Additional Sale of IP
In the year, Lupin also received Euro 20 Mn for the sale of
additional patent applications on Perindopril to
Laboratoires Servier of France.
Having set its foot on European soil, the Company is
considering every avenue of value creation. As a result, it has
entered into several out-licensing arrangements for its
products across the region. Lupin has planned 10-15 dossier
filings and an estimated 5-7 launches in the European
Union in the near term.
Dec-07
26
India Region Formulations (IRF)
FROM INCISIVE STRATEGIES
TO GAINING LEADERSHIP
Our success on the domestic soil personifies our trek
from devising strategies to breaking new ground.
Profound understanding of the Indian pharmaceutical
landscape has empowered us to forge ahead towards
domestic leadership backed by consistent
performance.
Rs. in Mn
7530
6064
4944
9496
Domestic Formulations Sales
2004-05
2005-06
2006-07
2007-08
INDIA REGION FORMULATIONS (IRF)
Lupin's IRF business has witnessed an exemplary growth
over the last few years, growing well ahead of the industry.
The Company has widened its product basket with a mix of
branded generics and value added generics, getting into
newer therapy areas, such as, gynaecology, oncology and
wound management. Simultaneously, the Company has
focussed on gaining further market share in Anti-asthma,
cardiovascular, diabetic and other chronic segments, while
maintaining its dominant position in Anti-TB and Antiinfective segments.
During 2007-08, the domestic formulations business posted
a robust performance with annual sales of Rs.9,496 Mn
(7,530 Mn), reflecting a growth of over 26%, while the
Indian Pharmaceutical Market (IPM) grew by 15%.
Riding high on the success of its performance over the years,
Lupin improved its ranking to number 6 in the IPM (ORG IMS
MAR MAT 08) up from number 10 in 2006. Furthermore,
for the month of March '08, it was placed at number 5.
27
> Industry Overview
> CIS
> API
> Advanced Markets
> R&D
> HR
> IRF
> AAMLA
> CSR
The Company's high quality,
reliable formulations have
gained a wide market
acceptance, resulting in
several of its products being
leaders in their respective
segments.
Top Ten Lupin Brands
Product
Therapeutic
Segment
Tonact
R-Cinex
AKT
Ramistar
Gluconorm
Odoxil
Rablet
L-Cin
Akurit
Clopitab
CVS
Anti-TB
Anti-TB
CVS
Anti-diabetic
Anti-infective
Gastro Intestinal
Levofloxacin
Anti-TB
CVS
Segment
Ranking
2
1
1
2
3
1
2
1
1
1
Mr. Shakti Chakraborty, President - India Region Formulations
While the prescription market of IPM grew by 4.7%, Lupin
exhibited a healthy prescription growth of 9.3% for the
year, thus attaining the status of the fastest growing
company amongst the top 10 in the IPM. Captitalising on
this growth, the Company improved its market share to
2.7% ( from 2.4% last year).
The Company's high quality, reliable formulations have
gained a wide market acceptance, resulting in several of its
products being leaders in their respective segments.
Currently, six Lupin products are among the top 300
products of the industry. 'Combitaz' an Anti-bacterial
th
injection has been rated by ORG as the 7 best launch in
the IPM, during 2007-08.
GROWTH ENABLERS
!
Leadership inAnti-TB and Anti-infectives
It is estimated that 80% of the world's Tuberculosis
(TB) cases are concentrated in 22 high-burden
developing countries, including India. However, the
disease is prevalent across geographies. The global
eradication drive of this disease has gained
momentum and Lupin is a frontrunner in this global
28
mission, as it produces the highest volume of TB
drugs, APIs, as well as formulations. This year, Lupin
maintained its leadership position in TB by
commanding a 48% market share.
!
!
Focus on the Chronic Segment
The Company has made a conscious shift to focus on
lifestyle segments and chronic therapies, such as,
Diabetics, Cardiovasculars, Respiratory, Onocology,
Wound management and CNS.
The Company has also made significant inroads in the
Anti-asthma segment, which is largely dominated by a
single player and has achieved a double digit market
share with a distinct No.2 position in the segment.
Today, Lupin offers a comprehensive Respiratory
therapy portfolio that addresses TB, Asthma, COPD,
Allergy and Respiratory tract infections.
Additionally, Tirofuse, belonging to GPIIb/IIIa class of
inhibitors for the management of Acute Coronary
Syndrome (ACS), was also introduced, which would
help in saving lives of the critically ill patients.
IRF - Therapeutic Contribution (%)
15
Gastro Intestinal
Lupin has taken steps to enter the area of women
healthcare and will focus on building a formidable
presence in this new therapy area in the future. The
Gynaecological market in India is estimated to be
around Rs.18,061 Mn, growing at 19%.
Anti - TB
17
26
Others
Cephalosporins
6
Anti - asthma
Anti - diabetic
8
CVS
5
4
19
CNS
Segments in Which Lupin Outperformed
The Market
Segment
Market growth
Lupin growth
rate (%)
rate (%)
Anti-asthma
Anti-diabetic
Neuro / CNS
Cardiac
Gastro Intestinal
Anti-infectives
Anti-TB
Specialised Product Introductions
Lupin has a formidable presence in the Anti-infectives
segment. In order to further strengthen its portfolio in
this category, several products for critical care
segment were introduced, during the year. These
were Gemifloxicin (GCIN), an advanced Quinolone;
Eugraf, a biotech product for wound management;
Percin, (Prulifloxacin) a superior Floroquinolone
indicated for respiratory, urinary and gastrointestinal tract infections; Lupinem, a beta lactam
Anti-bacterial aimed at treating critically ill patients
in ICCUs and Voritrol, an advanced Anti-fungal
product. All these products have been well received
and have extended Lupin's franchise with the medical
community.
20.4
22.3
16.6
23.4
14.1
15.2
4.5
48
42
38
34
31
28
8.3
!
Leveraging in-licensing to introduce niche products
Lupin is capitalising on the in-licensing route to get
specialised products for the patients in India. The
Company has re-defined wound care management in
India with the launch of Calgigraf Ag, a patented
product of a well known wound care major, ADRI
Technam, USA. This is the first of its kind product
made available in India, by Lupin.
Furthermore, its in-licensed product, Lupenox, an
anti-Thrombotic drug, has been licensed from
Italfarmaco (Italy). Lupenox was ranked No.1
amongst the new launches in the Indian cardiac
nd
market and 2 in the IPM (ORG IMS MAR MAT'08).
Currently, it has a 20% market share, exhibiting a
tremendous growth of 81%, as per ORG.
29
Following the success of its international programme a
series of CME programmes on diabetes management
for diabetologists in India, in collaboration with JDC,
were held across the country. Eminent speakers from
JDC and University of Texas Southwest Medical Centre,
USA, were invited to preside over the programmes.
Over, 2,000 doctors benefited from these programmes.
Similarly, in the area of cardiology, an initiative with the
American College of Cardiology was launched for the
benefit of nearly 10,000 doctors in India. It is a unique
knowledge sharing initiative through which, the
Company is providing access to Cardiosource, an
online Journal of American College of Cardiology. A
special website www.epinnacleworld.com has
been developed to work as a gateway to the world
of cardiology for the doctors.
BIOCLIN, a unique probiotic product, in-licensed
from Lallemand (Institut Rosell), France, was also
introduced during the year.
!
Passionate field force
In the area of Asthma, the Joint Airway Diseases
Initiative (JAI), focussed on creating awareness about
the disease amongst the masses, was started. During
the year, the Company held several free diagnostic
camps for the detection of Asthma and Chronic
Obstructive Pulmonary Disease (COPD).
As a part of incisive strategies to enhance market
penetration, the Company periodically augments its
field staff across all divisions. The over-2500-strong,
passionate, productive and motivated field force is
committed to further propel the Company's position
in the IPM, in years to come.
!
Growth in medical infrastructure and health care
insurance
The advent of healthcare insurance and improved
medical infrastructure is opening up new
opportunities for pharmaceutical companies and is
expected to augment business further.
!
Nurturing Relationships through initiatives for
Excellence
The Company extended its relationship with the
medical fraternity by accelerating its knowledge
sharing initiative to include renowned specialists from
prominent global universities. Lupin targets at
providing a platform to medical professionals to keep
abreast with the latest happenings in the medical
world, through interactions with key opinion makers
and Continuous Medical Education (CME)
programmes. A few of its initiatives during the year
were:
Similarly, in collaboration with John Hopkins
University, Rablet Key Opinion Leaders (RKOL)
programme was initiated to enhance relationships
with the key opinion makers by partnering with them
in their quest for knowledge. A distant learning
'certificate course' from John Hopkins University,
USA, was offered to key gastroenterologists.
!
StrategicApproach
Lupin has several strategic marketing arms that focus
on specific therapy segments. This approach provides
impetus to the business through enhanced
relationships with the doctors and better market
penetration. The success of this model is reflected in
the growing market share of Lupin in the domestic
market. With undivided focus on the niche areas, the
Company has successfully built a strong brand value
amidst the medical community. It's divisions are:
²
Lupin has partnered with Joslin Diabetes Care (JDC),
Boston, USA for exclusively developing a quality
educationalprogramme for Indian diabetologists.
During the year, the Company held “Diabetes in
2008”, a one and half day training seminar for about
30 doctors at JDC. The programme covered current
trends in diabetes, in both, research and clinical
practice setting.
Lupin Respira
This division is focussed on offering a comprehensive
product basket and a complete range of Anti-asthma
and COPD medicine. Within a short span of three
years, the Respira division has helped Lupin attain a
significant size and share in the Anti-asthma market.
This year, the Company recorded 48% growth and
achieved a double digit market share. The Company is
currently positioned at No. 2 in the Anti-asthma
market, which is estimated at Rs.4,592 Mn. with a
growth rate of 20.4%.
²
30
Key Products Of Lupin Respira Division
Product
Therapeutic
Segment
L-CIN
Levofloxacin
Esiflo
Salmeterol+Fluticasone
Budamate
Formoterol+Budesonide
Budate
Budesonide
Tiomate
Tiotropium+Formoterol
Telekast
Montelukast
Salbair
Salbutamol
²
Pinnacle
The accent of the Company on chronic and lifestyle
ailments is aided by this division. Through Pinnacle,
the Company addresses chronic and lifestyle
diseases, which are constantly on the rise. The
division caters to a specialist's group comprising
Cardiologists and Consulting Physicians. ORG IMS
estimates the Cardiac Market in India to be around
Rs.34,847 Mn with a growth rate of 23.4%. In the
CVS segment, Lupin commands 5.1% of the market
share and is positioned in the top 10 Companies for
this segment.
Key Products Of Pinnacle Division
Product
Therapeutic
Segment
Clopitab
CVS
Tonact
CVS
Ramistar
CVS
Lupenox
CVS
Nebistar
CVS
²
Segment
Ranking
1
2
2
2
2
3
3
Segment
Ranking
1
2
2
2
2
Lupin Diabetes Care
The Lupin Diabetes Care division, launched in 2004,
offers a distinctive product range, catering to the
therapeutic areas of diabetes and diabetes related
complications. Its core portfolio of offerings revolves
around the Oral Diabetes Agents. The division also
encompasses Diabetes Neuropathy Management.
Additionally, the Company has strategically included
specific cardio-products such as, Diabetic Antihypertensive and Diabetic Dislipidemic drugs, to
better meet the needs of its target populace. ORG
estimates the Diabetic market to be valued at
Rs.11,128 Mn with a growth rate of 22.3%. Lupin has
been growing faster than the market and has secured
a position amongst the top 10 in the IPM in this
segment.
Key Products of Lupin Diabetes Care Division
Product
Therapeutic
Segment
Segment
Ranking
Misobit
Miglitol
1
Telista
Telmisartan
2
Gabastar
Gabapentin
2
Matilda
Mecobalamin
2
Lipril
Lisinopril
2
Gluconorm Diabetics orals
3
²
Endeavour
The Company's strengths in Cephalosporin and Antiinfectives, in particular, have been driven through
Endeavour. Endeavour is a multi-specialty division,
focussing on acute therapy areas and therefore, has a
wide product portfolio comprising Antibiotics, Painmanagement, Gastrointestinal, Neutraceuticals and
Anti-Osteoporosis products. The Endeavour team
addresses leading Physicians, General Surgeons,
General Practitioners, ENT, Gyneacologists and
Paediatricians. The Anti-infective market is estimated
at Rs.57,294 Mn, with a growth rate of 15%.
Key Products Of Endeavour Division
Product
Therapeutic
Segment
Softovac
Bulk Producers
Cefaxone
Ceftriaxone Injectables
Doxcef
Cefpodoxime Solids
Signoflam Other Aceclofenac
Comb.
Segment
Ranking
2
4
4
4
31
²
Lupin
The Company's concerted focus on the semi-acute
therapy is the crux of the Lupin division, which has
enabled the Company to attain market leadership in
the Anti-TB segment of IPM. In a Rs.3,162 Mn AntiTB market, Lupin commands 48% market share. As
market leaders in this space, Lupin has embarked on
an effort, which would redefine the treatment
guidelines, based on conditions existing in India,
under the aegis of Redefining Indian Expertise Based
Tuberculosis Treatment (RIETT).
Key Products Of Lupin Division
Product
Therapeutic
Segment
R-Cinex
Anti-TB
AKT
Anti-TB
Akurit
Anti-TB
R-CIN
Anti-TB
G-CIN
Gemifloxacin
Combutol
Ethambutol & Comb.
Pyzina
Pyrazinamide Plain
²
Segment
Ranking
1
1
1
1
1
1
2
Maxter
As the face of Lupin in the critical care segment
and Anti-infectives, the Maxter division emulates the
Company's objective of 'saving lives'. As a spin-off
from the Endeavour, the division was launched in
2006-07. This division reaches out to interventionists
and super-specialty doctors and has also ventured
into the field of wound management.
Key Products Of Maxter Division
Product
Therapeutic
Segment
Merotrol
Meropenem
Tazar
Piperacillin+Tazobactam
Ceff
Cephalexin Oral Solids
Cetil
Cefuroxime Oral Solids
Cefantral
Cefotaxime Injectables
Segment
Ranking
1
1
3
5
9
²
MindVision
Lupin's forays into the burgeoning Neuro
Psychiatry and Oncology segments are driven by
this division. This year has been the first year of
MindVision's operations since its spin off from
the Pinnacle. Its brands fall under high growth
therapeutic segments like epilepsy, stroke and
migraine. CNS market is estimated to be
Rs.17,590 Mn, growing at 17% and the Indian
Oncology, market stands at Rs.1,900 Mn.
Through this division the Company has ventured
into Oncology which is the segment of tomorrow.
Today, it is estimated that not more than 10-15%
of people actually go for treatment of cancer as it is
perceived to be expensive. However, with the
growing infrastructure of insurance in the country,
rising awareness and increasing availability of
drugs, people are able to afford cancer treatment.
Key Products Of MindVision Division
Product
Therapeutic
Segment
Stalopam
Escitalopram
Placidox
Diazepam
Arzu
Aripiprazole
Fibril
Bulk Producers
Dulot
Duloxetine
Citistar
Citocholine
²
Segment
Ranking
2
3
3
5
6
6
Lupinova
With its rural marketing initiative, through its
Lupinova division, the Company is increasingly
catering to the unmet needs of the rural populace
that still constitutes around 70% of the Indian
population. Looking at the challenges posed by these
markets in terms of reach, the Company introduced a
self sustained model that has helped it in successfully
taking its products to 10 states, thus benefiting the
rural patients in these areas.
32
Asia, Africa, Middle East and
Latin America (AAMLA)
FROM STRATEGISING
TO CREATING GROWTH
We aspire, we plan, we execute and we grow.
Capitalising on the opportunities presented by
the market, we have embraced inorganic growth
as a strategy to re-inforce our presence in key
pharmaceutical markets.
130
Rs. in Mn
329
478
1788
AAMLA Sales (Including Kyowa 07-08)
2004-05
2005-06
2006-07
2007-08
AAMLA
During the year, AAMLA (including Kyowa for the period
October 18, 2007 to March 31, 2008) recorded revenues of
Rs.1,788 Mn. The division's most significant achievement of
the year was the acquisition of Kyowa Pharmaceutical
Industry Co. Ltd., in Japan, which successfully positioned Lupin
amongst the top ten generic companies in the world's
second largest pharma market.
Lupin's focus in the AAMLA region is to introduce worldclass value-added products in multiple therapy areas. Its
current basket of offerings comprises products from Anti-
TB, Anti-infectives, Anti-asthma and the Cardiovascular
segments. Over the last three-years, Lupin has built a
presence in several key markets of these regions such as,
Australia, UAE, Yemen, Kenya, Kuwait, Lebanon, Peru,
Vietnam and Philippines.
With 344 filings across the region during 2007, the AAMLA
division is gearing for accelerated growth in years to come.
Today, Lupin is one of the 3 Indian companies to have
established a presence across the highly lucrative Gulf Cooperative Council (GCC) markets.
33
> Industry Overview
> CIS
> API
> Advanced Markets
> R&D
> HR
> IRF
> AAMLA
> CSR
The acquisition of Kyowa
in Japan successfully
positioned Lupin in the
top ten generic pharma
companies in Japan
344
34
Number of Filings
243
220
321
AAMLA Regulatory Filings
2003-04
2004-05
2005-06
2006-07
2007-08
Mr. Vinod Dhawan, President - AAMLA & Business Development
Japan - MajorAcquisition
Currently estimated at US$ 65 Bn, Japan is the second
largest pharmaceutical market in the world. While generic
penetration presently is low (5-6% by value and 12-14%
by volume) and entry barriers are high because of stringent
regulatory guidelines, Japan specific molecules and a
different patent environment, the potential is very large.
With the ongoing pro-generic reforms being introduced by
the government which encourage the use of generics in
hospitals and substitution at the pharmacy level, the
market is set to witness very significant growth in the
future.
The government estimates that the generic market will
grow to 30% by volume by 2012.
The Japanese pharmaceutical market is unique. A number
of molecules are developed and sold by Japanese
companies only in Japan. Even blockbusters in other
markets have different specifications, dosage forms and
strengths in Japan. All these factors present entry barriers
to potential entrants.
34
Taking into account this uniqueness, Lupin acquired
Kyowa Pharmaceutical Industry Co. Ltd. in October
2007.
Kyowa was established in 1954 as a pharmaceutical
company predominantly selling over-the-counter (OTC)
drugs. Today, it is amongst the top 10 generic companies
in Japan, with over 50 years of history in manufacturing
and marketing pharmaceutical products.
For the period from October 18, 2007 to March 31, 2008,
the consolidated sales of Kyowa was Yen 3,618.8 Mn
(Rs. 1,315.4 Mn), with specialisation in CNS, cardiovascular,
Gastro Intestinal and respiratory therapeutic segments.
Kyowa is currently marketing more than 100 molecules in
Japan.
Kyowa has 58 Medical Representatives. They provide
customers with comprehensive information on
pharmaceutical products.
Kyowa’s Manufacturing Facility
One of Kyowa's key strategies is to become the leader in
offering CNS generic drugs. Towards this goal, its field
force numbering 58, covers 1,258 out of 1,379 psychiatry
hospitals.
Kyowa is recognised as an indispensable information
provider in the CNS area.
Kyowa has state-of-the-art research and manufacturing
facilities and spends approximately 8% of its sales on R&D.
With Lupin's support on various areas of R&D, regulatory,
manufacturing and sourcing, coupled with Kyowa's
experienced management team and infrastructure in
Japan, the company is poised for accelerated growth in the
years to come.
35
ROW Operations
Concurrent to gaining momentum in US, Japan and
Australia, Lupin has made significant inroads into the Rest
of the World (ROW) markets. New launches and an
expanded field force in the ROW regions were the key
attributes.
Africa
The fiscal 2007-08 marks the first full year of the
Company's operations in Nigeria. As part of its strategy to
differentiate itself with complex products, the Company
has achieved first to launch status on many products in the
Nigerian market, thus facilitating access to quality
medicines.
With its basket of Antibiotics, Anti-asthma and Anti-TB
drugs, the Company is primed to whittle a strong presence
in the respiratory market of Nigeria. Today, Lupin is the
only Company in this region to have a complete range of
Metered Dose Inhalers. In line with its direct-to-market
approach, it has already deployed 10 people on the ground
in Nigeria.
During the year, Lupin traversed beyond its already
established presence in the Anti-TB segment in Kenya. The
Company became the 'first to market' Cephalexin CEFF ER
in the region. With the further expansion of its product
portfolio, the Company looks forward to the opportunity
of supplying to the Government of Kenya and NGOs in this
region, such as Mission for Essential Drug Supplies, Kenya
Medical and Supplies Agency as well as the Ministry of
Health.
Middle East
Lupin has also made meaningful progress in the Middle East,
in course of the year. Today, the Company is one amongst
the few Indian entities present in this significant market.
Following the GCC accreditation of its facilities at
Mandideep and Goa, the Company has received product
approvals in Lebanon and Kuwait. The bygone fiscal also
marked Lupin's foray into the markets of United Arab
Emirates (UAE) and the Republic of Yemen. Subsequent
to receiving approvals, the Company has launched 5
products in Yemen. Leveraging on its experience in
serving international geographies, Lupin aims to reinforce
its business in these markets through its value added
Antibiotics and Cardiovascular products. It introduced
rd
the 3 generation antibiotic Cefdinir, as a first-to-market
product.
South EastAsia
The bygone fiscal was the Company's first full year of
onshore operations in Vietnam, one of the fastest growing
st
markets in South East Asia. Its 1 generation cephalosporin
brand, Lucef, recorded an impressive performance during
the year. The Company has also established its presence in
the Anti-TB and Anti-asthma segments.
Tuberculosis continues to remain a menace in Philippines.
In December 2007, Lupin forayed into this high diseaseburdened country, through its Anti-TB brand 'Akurit'. With
several filings in the Antibiotics space, the Company is
already widening its horizons in this rich territory.
Australia Strengthening Foothold
Australia is one of the leading global markets with
sales of A$ 10.5 Bn. Most of the world's major
pharmaceutical companies are active in this market.
All Australian citizens are covered under the Government's
reimbursement plan called Pharmaceutical Benefits Scheme
(PBS). Approximately one in every four prescriptions
presented to pharmacists in Australia were filled with
generic medicines in 2005. This level of use will almost
36
double in the next five years as more than half of the
top 100 selling prescription medicines will come off
patent. The generic pharmaceutical growth is supported
by the Government's efforts for use of generic medicines
through PBS reforms; ageing Australian population; and
active substitution by pharmacists.
Lupin established a wholly owned subsidiary in Australia
to file its product registration and hold marketing
authorisations. The Company has entered into alliances
with some of the leading and fast growing players in the
market.
Lupin has filed 16 dossiers of generic products, which
have a total market size of about A$ 850 Mn. Until 31st
May 2008, eleven of these have received approval. The
Company launched its business in Australia, during the
last quarter of the financial year 2007-08. The products,
which have been approved are Ceftriaxone, Cefotaxime,
Cephalexin, Lisinopril, Simvastatin, Sertraline, Quinapril,
Perindopril, Ramipril, Zolpidem and Amlodipine.
Lupin has also participated in local government tenders
and has been awarded tender for supply of injectable
cephalosporin, during the year.
CIS
FROM ENTRY STEPS
TO CONSOLIDATING
OUR PRESENCE
The CIS region is a fragmented but lucrative market ,
estimated at US$ 15.5 Bn. Since 2000, the Company has
been building its business in the region with a focus on
Russia (estimated market US$ 10.8 Bn) and Ukraine
(estimated market US$ 2 Bn). During the year, the
Company extended its footprint in Tajikistan, with the
introduction of a herbal cough formulation, Dr. Kashel.
The fast emerging economies of Russia, Ukraine,
Kazakhstan and Azerbaijan in particular, are rich in natural
resources and have been steadily increasing their per capita
income. This propensity to spend on healthcare is ever
increasing. All these factors, coupled with an ageing
population, changing lifestyle and increased government
spend, enhance the opportunity in this region. The CIS
region also displays very strong brand preferences and
loyalty. The region has also demonstrated ready and
preferred acceptance for herbal based products.
Lupin has bolstered its onshore presence, with teams
focussed on each of these specific regions. The Company
adopts a mix of DTM and partnered relationships,
customised to the unique requirements of each country. To
support its expanding business, the Company has
37
> Industry Overview
> CIS
> API
> Advanced Markets
> R&D
> HR
> IRF
> AAMLA
Having glimpsed the potential, we
have already made significant
inroads into the fertile Russian
market. However, driven by our
innate nature to grow to the next
level, today, we are fast spreading
our footprint to consolidate our
presence across the opportunityrich CIS region.
> CSR
strengthened its field force, which will help improve market
penetration and reach in these markets. The Company has
98 representatives working in the CIS region. The
Company, through its supplies to local partners, also
participates in the government tender business. The accent
of the Company is on building strong brands, which would
drive value for the Company in the years to come.
During the year, the Company strengthened its presence in
the Russian market through its brand 'Ribavin', an Anti-viral
formulation. The Company is poised to build its other
branded formulations viz. Softovac, One-Be, Ixime and Dr.
Kashel. Leveraging its deep market understanding, Lupin is
set to launch a new line of products catering to lifestyle
ailments and herbals.
The Company's business in CIS countries for the year 200708 clocked Rs.348 Mn. Six products were launched, during
the year, in this region.
Mr. Harish Narula, President - Corporate
38
Global Manufacturing, Quality & Supply Chain
APIs - India
Ankleshwar
Mandideep
Tarapur
Vadodara
39
Formulations - India
Japan
Aurangabad
Mandideep
Sanda
Goa
Jammu
40
Active Pharmaceutical Ingredients
(API) and Intermediates
FROM BACKWARD INTEGRATION
TO STRENGTHENING THE CORE
A resilient foundation goes a long way in
sustaining success. Having established a strong
integration model, we are engaged in nurturing the
API business to deliver superior quality products.
Mr. Satish Khanna, Group President - API
41
> Industry Overview
> CIS
> API
> Advanced Markets
> R&D
> HR
> IRF
Attaining a global scale of
operations is the underlying
principle, governing Lupin's
API business model. It is only
natural that the Company is
a global leader in its chosen
therapy areas
> AAMLA
Sustainable growth in API and Intermediates has always
been a significant contributor to the success of the
Company. With sound process research and Intellectual
Property management skills, Lupin has the ability to build
expertise in developing and commercialising processes and
products. During 2007-08, Lupin maintained its global
leadership status in its key APIs and intermediates. Several
complex, difficult to make APIs were also developed
successfully.
The Company's API business during the year, clocked in
Rs.8,202 Mn with Rs.7,495 Mn from developing markets
(including India), reporting a growth of 9%.
> CSR
THE LUPIN EDGE
Attaining a global scale of operations is the underlying principle
governing Lupin's API business model. Consequently, it is only
natural that the Company is a global leader in its chosen therapy
areas. Today, the Company has sculpted an enduring presence
in the Anti-TB and Cephalosporins space.
API Sales (Therapeutic Contribution %)
12
Others
2
13
Anti - TB
CVS
73
Cephalosporin
42
The Company's manufacturing capabilities are truly
international standards. As many as 9 of the Company's API
plants are US FDA approved. The year 2007-08 witnessed
significant expansionintheTarapurandMandideepcapacities.
Furthermore, the year under review also witnessed a steady
increase in the filing of DMFs, EDMFs and COSs.
GLOBALTB -AN INSIGHT
Today, Multi Drug Resistant (MDR TB) and Extensively Drug
Resistant TB (XDR TB) are emerging as major threats for high TB
burden regions like Asia, Africa and Latin America. Funding from
newer sources is pouring in for the treatment of MDR TB and
Paediatric TB. TheCompanyisexpandingitsspectrumofofferingsin
the Anti-TB range to include APIs in the MDR TB category. The twin
areas of MDR TB and Paediatric TB provide avenues for Lupin to
strengthen itsgloballeadershipandbecometheone-stop-shopfor
globalTBsolutions.
Lupin's Anti-TB products such as, Rifampicin, Pyrazinamide
and Ethambutol as well as Cephalosporins such as, Cephalexin,
CefaclorandtheirintermediatesarekeypillarsoftheCompany's
success.In2007-08, two mainstay intermediates, 7ADCA and
7ACCA recorded significant growth in volumes. Additionally
the Company continued its steady progress on developing
Optically Active Building Blocks (OABB). The Company also
maintained its thrust in Lisinopril and other Prils. Having
directed a concerted focus on building Statins, it is optimistic
about establishing a leadership position for these products in the
yearstocomeaswell.
Anti-TB units produced
Units in Mn
During 2007-08, the Company improved its margins
through operational improvement and better product and
business mix, which helped it sustain the adverse pricing
pressures on Pen G.
The Company has filed a total of 27 dossiers across various
countries through GDF in 2007-08. Lupin's close
association with the Revised National Tuberculosis Control
Programme an initiative of the Government of India, continues
as the Company is one of the chief suppliers of patient kits
for this programme.
2788
ENCORE PERFORMANCE
2101
Mr. Naresh Gupta, President - API & Global TB
As a pre-qualified supplier to the Global Drug Facility (GDF),
Lupin was awarded a major long term contract for the supply
ofFirstLine TBproducts, during theyear.
2004-06
2006-08
43
CRAMS
The Contract Research and Manufacturing Services
(CRAMS) market, in India, is on the threshold of exponential
growth. The global CRAMS space is projected to touch
US$ 64 billion by 2010 from US$ 34 billion in 2006. India's
contribution to the total outsourcing market is slated to
increase to 5.8% by 2010 from 2.2% in 2006, a CAGR of
46%.
India has always been a preferred outsourcing hub. The
following factors are responsible for driving the domestic
CRAMSmarket:
!
State-of-the-art infrastructure
!
Advanced research proficiency
!
A sustained and reliable regulatory environment
!
Availability of trained manpower
Additionally, the country is already moving up the value
chaintoofferthe nextlevelofservices.
North America, Japan and other parts of the world.
Novodigm utilises a stage-gate methodology to increase
focus on selected projects. It also created strong IP for
several cost-effective and non-infringing processes. With
strong in-house analytical development capabilities,
Novodigm is proficient in the development and
validation of the analytical method as well. These
analytical development capabilities aid in new product
development as well as stability studies and impurity profile
studies.Ithaswell-equippedcGMPfacilitywhich is ISO14001
andOHAS18001compliant.
In addition to focussing on the acquired offerings, the
Company is keen on shifting some of its synergistic
products to Novodigm. It is deploying Novodigm's
manufacturing capabilities to produce intermediates
such as OABB.
The Company is now focussing on expanding the
business of Novodigm through alliances, JVs and
strategic partnerships. With a proven track record in
APIs and intermediates, Lupin is confident of replicating
its success in the CRAMS space.
NOVODIGM - MAJOR ACQUISITION
Lupin's foray into this segment was marked by its
acquisition of Rubamin Laboratories Ltd., now
rechristened Novodigm Ltd.
Novodigm brings with itself, manufacturing and
research assets as well as valuable relationships that
help fuel Lupin's growth aspirations in this space. The
Company exports over 90% of its products to global
pharmaceuticals and specialty chemical companies in EU,
44
Research and Development
FROM INVENTIONS
TO INNOVATION
We continuously hone our expertise to fuel the
development of innovative, difficult-to-replicate
entities as well as processes. With innovation
brewing in our laboratories, we identify and adapt
new technologies as well as scientific approaches to
deliver sophisticated medicines.
Scientific Pool - LRP
Others
17%
48% MSc and M. Tech
M. Pharm and Ph.D
35%
The Company's Research and Development programme
progressed well during the year. Guided by its mission
to become an innovation led transnational
pharmaceutical company, Lupin's scientific pool of over
440 researchers constantly strive to develop new
technologies and products.
Lupin Research Park (LRP) located at Pune, spread across
19 acres is the hub of the Company's research activities.
The Centre harbours a culture that fosters innovation
and helps shape inventions into innovative commercial
products.
Mr. Nilesh Gupta, President - Advanced Markets
45
> Industry Overview
> CIS
> API
> Advanced Markets
> R&D
> HR
> IRF
> AAMLA
> CSR
The Company has
the proficiency to
develop a wide range of
pharmaceuticals, across
the value chain
Today, the Company has the proficiency to develop a
wide range of pharmaceuticals, across the value chain
encompassing complex APIs to value-added difficult to
develop formulations. During 2007-08 the total
investment of the Company in R & D (excluding
depreciation) was Rs.2,037.5 Mn, 7.5% of consolidated
net sales.
Lupin's research and development initiatives are spread
across:
! Generics Research
£ Process Research and Development
£ Formulations Research and Development
! Advanced Drug Delivery Systems (ADDS)
! Intellectual Property Management
! New Chemical Entity Research
! Biotechnology Research
PROCESS RESEARCHAND DEVELOPMENT
Lupin's success in the global generic pharmaceutical market
can be attributed to its process research capabilities that has
helped Lupin build a robust backward integrated model
for complex and difficult to develop APIs.
The synthesis of APIs today is governed by stringent norms
as the process chemistry employed needs to be costeffective,
hazard-free, non-infringing, adhering to pharmacopoeial
quality and eco-friendly. In order to develop safe processes the
Company deploys various emergent synthetic tools such as
biocatalysis, metal-mediated chemistry, use of water as
reaction media, as far as possible and novel separation
techniques.
46
To sustain its competitiveness in the international market,
Lupin has broadened its scope of activity of process research, for
better understanding and expertise in the synthesis and
characterisation of solids. It has developed expertise in the
science of crystallisation.
Lupin, today produces cost-effective APIs for different
regulatory markets of the world in time, with acceptable and
dependable quality. The Company's productivity is
evidenced from the DMF filings made so far. During 200708, the Company filed 14 DMFs in the US and Five
EDMFs/COS in Europe for APIs taking the cumulative
number to 74 DMFs (US), 92 EDMFs (EU) and 16 COS (EU).
The Company has initiated research in the highly
specialised area of steroidal hormones. Towards this,
Lupin has established high-tech infrastructure, in both
research and manufacturing involving stringent safety and
operational norms.
FORMULATIONS RESEARCHAND DEVELOPMENT
During 2007-08, 11 ANDAs in the US, seven MAAs in
UK/Europe and two dossiers in Australia were filed. The
cumulative bank of 62 ANDAs with several Para IV filings
and 1938 dossiers for formulations for rest of the world
bears testimony to Lupin's finished products research
capabilities. The Company's ANDA focus has shifted to
complex and difficult to develop molecules that offers a
unique niche position.
The Company's fast growing finished products business in
Advanced Markets is strong testimony to its formulations
research capabilities.
ANDAApprovals Received DuringTheYear
Sr.
No. Molecule
Therapy Area
1
Cefixime for Oral Suspension
200 mg/5 ml
Cephalosporin
Antibiotic
2
Simvastatin Tablets
CVS
3
Ziprasidone Capsules (Tentative)
CNS
4
Cefadroxil Capsules
Cephalosporin
Antibiotic
5
Amlodipine Tablets
CVS
6
Carvedilol Tablets
CVS
7
Lovastatin Tablets
CVS
8
Pravastatin Tablets
CVS
9
Cefadroxil for Oral Suspension
Cephalosporin
Antibiotic
Aided by a wide product portfolio, the Company is
consolidating its presence in the global generics space.
Following the acquisition of Kyowa Pharmaceutical
Industry Co. Ltd., Lupin now has a dedicated team
focussing on the development of generics exclusively for
the Japanese market.
ADVANCED DRUG DELIVERY SYSTEMS (ADDS)
In its journey towards becoming a specialty pharma
company, Lupin has identified ADDS to be an important
building block for its research initiatives and recognises this
Cumulative Filings - Formulation Key Markets
DMF (US) EDMF (EU) COS (EU)
USA
UK
FRANCE (EU others)
No. of Filings
9
9
21
No. of Filings
16
74
62
92
Cumulative Filings - API Key Markets
During the year, the Company received ANDA approvals for
nine products for the US market. The UK MHRA approval for
Lisinopril underpins the Company's ability to submit high
quality dossiers and gain approval in good stead.
47
area as an important growth driver for the future.
Consequently, during the year sizeable investments were
directed towards strengthening the Company's ADDS
capability.
The Company's ADDS initiative is guided by a Scientific
Advisory Board comprising of internationally acclaimed
scientists.
The focus of ADDS research is on:
! Invasive and non-invasive Systems
! Oral Controlled Release Systems (OCRS)
! Solubilisation / Bioavailability Enchancing Technologies
! Pulmonary Drug Delivery Systems
! Taste Masking Technologies
Lupin's research proficiency and experience have
empowered the Company to deploy sophisticated
technologies to offer contemporary solutions to the
marketplace. Consequently, the Company is working
towards setting up an in-house nano technology capability
among several other technologies. This enabling
technology is expected to further empower Lupin in
developing unique solutions.
In 2007-08, Lupin continued its concerted efforts in
developing ADDS based products that are truly unique
from a global perspective. These new products under
development will offer added patient convenience,
improve compliance and may also improve therapeutic
efficacy in various disease states.
The Company's 'Innovation Cell' comprising a pool of
highly qualified scientists is engaged in shaping novel ideas
into innovative technologies for developing value added
products.
Its primary focus areas are:
! Developing and enhancing the branded pipeline for the
US Paediatrics business
! Using ADDS creating product-specific platform
technologies for out-licensing
! Developing ADDS for the India Region Formulations
and Rest of the World markets
! Providing support to the NCE Group for pharma
development during Pre-clinical and Clinical stages
Dr. Ninad Deshpanday, President - Pharma R & D
The Company is also in the process of setting up cGCP and
cGLP clinical and laboratory facilities to conduct BioAvailability and Bio-Equivalence (BA BE) clinical studies,
along with the requisite Bio-Analytical laboratory
infrastructure.
Lupin is progressing with ambitious plans. As a catalyst to
achieving its growth aspirations, Lupin is also considering
inorganic growth. The Company is actively scouting for
strategic acquisitions, in-licensing agreements and
alliances in the drug delivery space.
ANALYTICAL RESEARCH
Lupin has a state of the art analytical facility at LRP, with
analysts supporting both API Process Research and
Formulations Research. Besides analysis of samples
during process and formulation development and stability
studies, the Company has built a centre of excellence to
study physical properties like polymorphism in both API
and drug products, using Powder X-ray Diffraction, Solid
State NMR and Differential Scanning Calorimetery. In
addition, isolation/synthesis and characterisation of
impurities in APIs and drug products is conducted with the
latest LC/MS-MS and automated preparative high
performance chromatography techniques and
instrumentation. The Analytical Research Group also
ensures that all processes and products transferred to
plants meet regulatory requirements and expectations.
48
INTELLECTUAL PROPERTY MANAGEMENT
At Lupin, creating intellectual property assets is an
ongoing endeavour. Research is driven by scientists having
expertise in IP management. Located at LRP, the
Company's Intellectual Property Management Group
(IPMG) plays a significant role in constantly evaluating its
research portfolio to identify wealth creation
opportunities. Lupin's wide spectrum of products
comprising niche generic products, Para IV filings and
diversification into newer therapy areas like oral
contraceptives is all driven by IPMG.
PATENTS FILED
600
Process
230
Pending
162
Granted
68
Formulations
168
NCE
202
Pending
177
Granted
25
Pending
155
Granted
13
NEW CHEMICAL ENTITY RESEARCH
The process of creating intellectual wealth starts with
judicious product identification, based on technological
complexity, patent challenges and emerging
opportunities.
The Company believes that its NCE programme can be
truly transformational and is committed to develop new
and innovative healthcare products catering to different
disease areas.
The functional objective of this group is in tandem with
Lupin's strategy of developing differentiated, value added
products.
Lupin has created a creditable pipeline of four
Investigational New Drugs (IND) that focus on three
different disease areas of Migraine, Psoriasis and
Tuberculosis. The year 2007-08 witnessed significant
progress in the development of these drug candidates.
Additionally, noteworthy advances were made in the novel
drug discovery programmes related to Type-2 Diabetes
and Rheumatoid Arthritis.
The IP team is responsible for the Company's patent
challenges across the globe. Its key achievements during
the year were reflected in the Ramipril and Cefdinir
litigations and in the Perindopril outlicensing.
The Company introduced its Cefdinir generic following a
sucessful litigation and settlement with Abbott Laboratories
and Astellas Pharma Inc., related to District Court litigation
proceedings. Similarly, in the case of Ramipril litigation, the
Court of Appeals for the Federal Circuit reversed a District
Court decision on Ramipril and found the Aventis patent on
Ramipril invalid. Ramipril is one of the ACE inhibitors used
for the treatment of high blood pressure. Subsequently, the
Company launched Ramipril in June 2008.
During 2007-08, the Company received Euro 20 Mn from
Laboratoires Servier, France for the sale of additional
patents rights for Perindopril.
The Company also believes in protecting its inventions and
has developed a healthy basket of patents over the years.
During the fiscal year the Company filed 97 patent
applications and received patent grants for 37 patents,
with five patents related to formulations and drug delivery
technologies, 10 patents related to chemical processes
and 22 patents related to new chemical entities.
LL 2011 (AMIGRA)
Lupin has developed a safe and non-toxic nasal spray for the
prophylactic treatment of migraine. Encouraged by the
compound's efficacy and safety profile during Phase II trials,
the Phase III trial was initiated in eight centres in India. The
New Drug Application would be filed after the review of
Phase III findings.
LL 3348 (DESORIS)
In a bid to create an orally active curative that is efficacious
and safe, Lupin has developed a herbal formulation for the
treatment of psoriasis. The formulation has completed
Phase I and Phase IIa clinical trials. Phase IIb clinical trials,
spread over seven centres are in progress. Concomitantly,
Lupin is also in the process of filing an IND with the US FDA
to conduct clinical trials in USA. This project is being
developed in collaboration with
CSIR's NMITLI
programme.
49
LL 4218 (DESOSIDE-P)
As an extension to its Psoriasis programme, Lupin has also
identified a novel molecule from a plant source. Being orally
bioavailable, this pure compound has displayed promising
anti-psoriatic activity in preclinical studies. This drug
candidate has completed Phase I clinical trials. Currently, the
compound is undergoing Phase II evaluation across seven
centres in India.
LL 3858 (SUDOTERB)
The Company has successfully completed Phase I studies
for its lead TB molecule (LL 3858) alone and in
combination with standard Anti-TB drugs (LL 4858).
Having submitted Phase I report to the DCGI in March
2008, the Company is awaiting permission for conducting
Phase IIa studies.
PRECLINICAL RESEARCH
The Company's ongoing Novel Drug Discovery and
Development efforts are directed towards identifying and
developing new therapeutic leads for the treatment of
metabolic diseases and inflammatory disorders.
Metabolic Diseases
PPAR Modulators: This programme has resulted in the
identification of a novel PPAR modulator, with PPARa
dominant agonist efficacy. Having displayed a good
efficacy and safety profile, the compound LL 6531 has
NCE Pipeline
LL 2011
Anti-migraine (Amigra)
LL 3348
Anti-psoriasis, Herbal (Desoris)
LL 4218
Anti-psoriasis (Desoside-P)
LL 3858
Anti-TB (Sudoterb)
LL 6531
Anti-diabetic, PPAR Modulators
Dr. B. N. Roy, Technical Advisor
been selected for further development. Preparations are
underway to take this molecule through an exploratory IND
(eIND) with the DCGI, to further evaluate it in humans.
DPP-IV Inhibitors: Lupin's DPP-IV programme has resulted
in the identification of compounds with efficacy and
selectivity profiles which are either comparable or superior
to those of competitor molecules.
PTP1B Inhibitors: The programme to identify inhibitors of
protein tyrosine phosphatase 1b (PTP-1B), a drug target for
Type-2 Diabetes and obesity, is progressing well with the
identification of several compounds that are potent and
highly selective.
Preclinical
Phase I
Phase II
Phase III
Market
Anti-diabetic, DPP-IV Inhibitors
Anti-diabetic, PTP1B Inhibitors
Anti-inflammatory, p38aMAPK Inhibitors
50
Cutting Edge Research
Regulatory, Intellectual Property, Process, Formulation, Analytical and NCE Research Team
51
52
Inflammatory Disorders
The enzyme p38a mitogen-activated protein kinase
(p38aMAPK) is a drug target involved in the etiology of
rheumatoid arthritis. Lupin has identified several
compounds which are now being evaluated in chronic
arthritis models.
Partnerships with Institutions
Lupin is closely associated with an extensive network of
CSIR laboratories and other academic institutions in India
and abroad on various research projects.
The Department of Science and Technology (DST),
Government of India and Lupin have joined hands for the
clinical development of Lupin's Migraine and Psoriasis
molecules. The DST has selected the above two clinical
development programmes of Lupin for funding and has
committed over Rs. 100 Mn to support the said
projects.
BIOTECHNOLOGY
In line with the Company's decision to foray into
Biotechnology last year, further progress was made
during this year. A dedicated team of scientists
specialising in Biotech research have been working
constantly to develop a basket of proteins. In order to
sharpen the focus in this area a new independent Biotech
facility is in the process of being set up in Pune, Lupin is
also exploring collaborative arrangements to expedite
its business in this segment. The Company is targeting
both Biosimilars and New Biological Entities (NBEs), in
order to develop cost effective products, free from side
effects and in compliance with the existing regulatory
guidelines. Biotech research will be the new engine of
differentiation for the Company. Worldwide, as the NCE
pipeline is drying up Biotech is fast emerging as the
future growth driver. Going forward, it is estimated that
over 40% of new entities will originate through the
Biotech route.
At Lupin, we take
considerable pride in the
quality that we ensure
and assure
The importance of quality cannot be undermined in any
organisation. The customers, both in India and overseas, are
becoming increasingly demanding with respect to cost, quality
and delivery performance. Achieving these three, require
imbibing the philosophy of 'Total Quality Management' into
the organisation's culture. It has to become the very essence
of the organisation.
The Pharma industry is subject to strict quality control and
scrutiny. India has the largest number of US FDA approved
plants, outside of the US which exemplifies the increasing
focus on quality assurance of the industry.
At Lupin, we believe that quality is the mainstay of
competitiveness. We have thus been working towards
creating an environment of Quality and Compliance in line
with global best practices. We believe that quality has to
be built into the product and therefore employ practices to
instill this culture throughout the organisation.
Lupin's Corporate Quality Assurance (CQA) works as a link
between manufacturing and its customers for ensuring that
quality is built into the product itself. It ensures that the Company
has a common quality system ensuring consistency,
effectiveness and efficiency, during the manufacture of APIs
and formulations at all sites.
53
Quality Control
FROM QUALITY CONTROL
TO INSTILLING QUALITY
The CQA focusses on:
!
!
!
!
!
Establishing Quality Standards
Developing processes to achieve those standards
Monitoring to ensure Compliance
Upgrading technology standards
Training personnel on quality aspects
A team of 12 people is engaged in driving the quality
philosophy of the organisation and assuring that global
standards of good manufacturing are implemented in the best
manner at every facility of the Company. The team also
develops and implements Quality Policy and Guidelines for
key systems and processes.
CQA is supported by a team of over 500 people comprising the
quality functions at sites responsible for implementing the
policy and the guidelines laid down by CQA, ensuring
complianceto regulatory requirements.
ON SITE QUALITY
The CQA group monitors effectiveness of the site Quality
functions through periodic quality reviews, periodic
audits and review of compliance to regulatory
inspections and customer audits. CQA also supports the
site Quality organisation by providing necessary
resources, technical guidance and training. The Company
also continuously endeavours to upgrade skills and
competence levels in QC / QA function by introducing
advanced technologies and techniques.
Enterprises that exemplify leadership in quality not only
deliver quality products and services, but also effectively set
industry benchmarks and redefine standards for those, who
share their mission.
At Lupin, we set our quality standards above and beyond
regulatory and customer requirements and take
considerable pride in the quality that we ensure and assure.
54
Human Resources
FROM COMPETENCE
TO EXCELLENCE
Our yearning to deliver brilliance has compelled us to
have by our side, the best-in-class talent that aligns
its strides to our objectives. Our distinguished pool of
intellectuals is impregnated with the right elements
that drive success - competence as well as excellence.
Mr. Rajan Dutta, President - Human Resources Development
55
> Industry Overview
> CIS
> API
> Advanced Markets
> R&D
> HR
> IRF
> AAMLA
At Lupin, we believe, our people are our biggest strength.
We continuously nurture and motivate our human assets.
We attribute our success so far, to the efficient and
committed workforce of close to 9,000 Lupinytes across
the globe. The Company's clear business goals are well
entrenched amidst our people and each employee is proud
to contribute towards the overall mission of the Company.
The HR function is constantly engaged in providing
opportunities to our people to equip them with the right
skills to enable them to learn, perform and succeed.
Coupled with guidance and motivation, we aim to groom
the leaders for the Lupin of tomorrow.
During the year, the Company's HR initiatives were
focussed on:
Increasing employee productivity
!
Optimisation of costs
!
Enhancing employee retention
!
> CSR
!
The Company's clear
business goals are well
entrenched amidst our
people and each employee
is proud to contribute
towards the overall
mission of the Company
Augmenting operational excellence and successful
wage settlements
THE ETHICAL SPINE
Lupin's moral fiber rests on a strong set of values. The
Company's workforce has truly imbibed the values
comprising integrity, superior performance,
entrepreneurship, customer orientation, working together
and respect for people.
We have designed exhaustive induction programmes
to instill these values amongst new recruits. Through
repeated interactions and communication with its
employees, the Company further ensures that the essence
of its values is not only understood but is also
implemented. As an extension of the organisation culture,
Lupin offers a high degree of empowerment and the
56
freedom to work as entrepreneurs. UDBHAV is one such
programme, aimed at value coaching for new recruits in
Operations and R&D. It orients new talent towards
'Workforce / Workplace Preparedness', before one is put
on the job.
RECRUITINGTALENT
Given the competitive market scenario, Lupin's primary
challenge is to develop a team that can sustain high
growth. The Company has succeeded in creating a strong
brand image in the marketplace. Lupin is an active recruiter
at most leading technical and management institutes
across the country, selecting only the best to add to its
pool. Furthermore, the Company has built meaningful
relationships with HR agencies and consultants to induct
the best talent in the Company, globally. HR plays a close,
well co-ordinated role in addressing the recruitment needs
of the Company.
ENSURINGTHE RIGHT ORIENTATION
Cultivating young talent into leaders is an ongoing
process. In its endeavour to create a reservoir of leaders,
the Company has developed several customised training
programmes. These initiatives are aimed at training,
imparting product knowledge as well as the overall
personal development. Some of these programs are :
ACE :A CUTTING EDGE
ACE is a result of Lupin's strategic tie-up with Indian
Institute of Management, Ahmedabad (IIM A). This
initiative imparts training in two phases of 4 days each,
scheduled at a gap of a month and a half. It comprises
interactive discussions, case studies, cross-functional
sharing of experiences and field projects, and addresses the
developmental needs of the Company's High Performing/
High Potential managers.
LEAP
LEAP is 4-day training programme for High Potential &
High Performing executives, conducted in two phases of 2days each, scheduled at a month's gap. This has been
designed to enhance the skill and competence level of
executives, so that they can take on higher responsibilities.
I LEAD
As a learning intervention for Managers, it focusses on
increasing self-productivity; enhancing strategic
leadership input and building as well as leading diverse
teams.
EXCELL
Aimed at executives, Excell focusses on personality
development through self-understanding; selfmanagement and communication skills; organisation
alignment and implementation of effectiveness, efficiency
and productivity.
FINANCE FOR NON-FINANCE
This is a 2-day finance training for non-finance managers,
which focuses on building fiscal awareness and
understanding.
FIRSTTIME MANAGERS
This initiative is aimed at grooming individuals to take up
managerial roles and responsibilities, enhancing their
efficiency and productivity.
57
ICEBERG
Iceberg is a specially designed programme for Managers
and General Managers. It is about knowing and managing
oneself in a demanding work environment; managing
relationships with people, processes and customers, in a
complex workplace; managing emotions and the art of
dealing with others for productive results and ultimately,
achieving the desired outlook.
REACHING OUT
Apart from induction programmes, SAMPARK is another
initiative that facilitates communication between the
senior management and the employees. Through this
programme, the Chairman and the Managing Director
address Lupinytes every quarter, to motivate them and
reiterate the corporate philosophy.
As the Company moves forward to achieve new
milestones, it is constantly building its competencies
through acquisition, training and further development of
the best talent available in the industry.
58
Financial Overview
FROM MANAGING FINANCE
TO OPTIMISING FINANCIALS
At Lupin, we have brought about a paradigm
shift in the strength of our financial base.
We have leveraged our financial expertise to
propel the Company to achieve its future
aspirations and development needs.
Lupin recorded a 34% rise in consolidated revenues, up from
Rs. 20,717 Mn in FY2006-07, to Rs. 27,730 Mn, in FY200708. The Company also generated Rs. 4,083 Mn in net
profit, a 32% increase over the previous year's
Rs. 3,086 Mn. Profit growth was triggered by the Company's
sound performance in the Advanced Markets; success within
the domestic market and Intellectual Property based
revenues. These factors contributed towards the growth in
Earnings before Interest, Depreciation, Tax and
Amortisation (EBIDTA) by 31%, from Rs. 4,913 Mn in the
previous year, to Rs. 6,423 Mn. EBIDTA margins were also
higher at 23.7% of the net sales, despite a considerable drop
in realisation, due to rupee appreciation.
ROBUST GROWTH IN THE ADVANCED MARKET
OF USA
Lupin Pharmaceuticals Inc., (LPI) the Company's
subsidiary reported a stellar performance, recording
Formulation sales of Rs. 7,205 Mn, reflecting a growth of
103%. The Company has displayed a commendable
performance in the US, both in the branded and generics
space. The Company has commercialised 15 generic
products, of which, four are market leaders.
Consolidated Net Profit
Rs. in Mn
Rs. in Mn
3086
4083
27730
20717
Consolidated Sales (Gross)
The triggers for the impressive performance in the
FY 2007-08 inter-alia were :
2006-07 2007-08
2006-07 2007-08
59
> Industry Overview
> CIS
> API
> Advanced Markets
> R&D
> HR
> IRF
> AAMLA
> CSR
rd
LPI has been reported by IMS health as the 3 fastest
growing generic pharma company by prescriptions in
2007. In the branded segment, Suprax® prescriptions for
the period grew by 55%. The Suprax® franchise was
expanded with the addition of the Double Strength
suspension and tablets, both of which, have been well
received by the market.
INDIA REGION GROWTH
The Company has successfully broken its dependence on
Acute therapy segments by developing its presence in the
Chronic therapy area as well. The Company, while
consolidating its strengths in Anti-TB and Cephalosporins
also reflected strong growth in new therapy areas of
Asthma, Diabetics and CVS. Additionally, it also
successfully in-licensed products into the domestic
Profit growth was triggered
by the Company's sound
performance in the
Advanced markets; success
within the domestic market
and Intellectual Property
based revenues
formulation business to supplement its portfolio of
products. The domestic formulation business continued to
post a robust performance, with sales of Rs. 9,496 Mn,
reflecting a growth of 26% - a rate higher than the IPM.
During this period, the Company improved its market
share from 2.4% to 2.7%. The domestic formulation
business accounted for 34% of the Company's
consolidated gross sales and continued to be a strong
performer in FY 2007-08.
SIGNIFICANT STEPS IN JAPAN
During 2007-08, Lupin acquired Kyowa Pharmaceutical
Industry Co. Ltd., Japan. This marks the Company's foray
into a market, which it believes, would be very lucrative in
the years to come. The prudential acquisition policies of
the Company are also reflected in the cost of acquiring a
SBU Wise Sales
Rest of the World
US & Europe
9%
API Emerging Markets
30%
27%
34%
IRF
Mr. Ramesh Swaminathan, President - Finance & Planning
60
'critical mass' in a market that holds much potential for
the future. The acquisition was EPS neutral, right from the
start and would be accretive in years to follow.
capacity at Indore. In line with its strategy of being
vertically integrated, Lupin has put up various multi
purpose plants for APIs.
REST OFTHEWORLD MARKET
EFFECTIVE RESOURCE PLANNING
The Company continued to increase the filings related to
product registrations in other parts of the world. While the
operations grew modestly during the current year, it is
expected that with the approvals clicking in, the turnover
from these parts would grow in years to come. During the
year, the Company commenced generating revenues
through its subsidiary in Australia.
The Company's borrowing increased negligibly, consequent
to robust cash flows and judicious financial planning. The
total cost of interest stood at Rs.373.5 Mn, representing
about 5% average cost of borrowing, during the year. The
total debt at the year-end stood at Rs.10,303 Mn, net of
FCCB deposits. Debts excluding FCCBs, which are likely to be
converted, were at Rs. 8,341.9 Mn. The debt-equity ratio was
0.78:1. Lupin's short-term debt programme received the
highest rating from ICRA.
STRATEGIC INITIATIVE
The API and Intermediates business, which is based on a
resilient business model, continued maintaining steady
progress. During the year, Lupin acquired Novodigm Ltd.,
(erstwhile Rubamin Laboratories Ltd.) Vadodara. This
acquisition would enable the Company to set up its
strategic initiative in the CRAMS segment.
The Company recorded basic Earnings Per Share of
Rs. 50.01, up 32% from the previous year. The Board has
recommended a dividend of 100% i.e. Rs.10/- per equity
share of the face value of Rs.10/- each (including a special
dividend @ 50% i.e. Rs. 5/- per equity share) absorbing a
sum of Rs. 960.3 Mn, inclusive of tax on dividend.
INTELLECTUAL PROPERTY BASED REVENUES
The tax obligations of the Company, including FBT, were
higher at Rs. 1,318.0 Mn, compared to Rs. 988.1 Mn in the
previous year. However, the effective rate for current tax
on a stand alone basis stood at 14.8%, as against 19% in
the previous year. The Company has increased its reserves
and surplus by Rs.4,046.3 Mn to Rs.11,976.0 Mn.
Lupin earned a significant income from the sale of
additional patent rights for Perindopril from Laboratoires
Servier, France. Euro 20 Mn were added to the Company's
total revenues on this count. This follows the pattern set in
the previous year, when similar revenues were generated.
It is an endorsement of the Company's Research and IP
prowess.
R&D SPEND
Lupin has allocated 7.5% of its overall consolidated net
sales for its R&D operation. With an increase in sales, the
R&D spend of the Company is on a rise. The total
expenditure (excluding depreciation) on Research and
Development, during the year stood at Rs.2,037.5 Mn.
CAPACITY EXPANSIONS
During 2007-08, the capital expenditure, including assets
(net) acquired on acquisition of subsidiaries, was
Rs. 3,650.6 Mn. The Company commissioned its
formulations plant at Jammu and is now developing fresh
CHALLENGES
Price erosion in the US is one of the biggest threats faced
by Lupin. The FOREX markets continue to remain volatile.
However, the Company has appropriate hedging strategies
in place to sustain its overall margins. Given price and cost
related pressures, margin maintenance and improvement
thereon, warrant increased focus. Lupin is also
encountering the Drug Price Control Order challenge,
which has encompassed the entire Indian pharmaceutical
space.
INTERNAL CONTROL SYSTEMS
The Company has a sound internal control system
commensurate to its size, scale of business and complexity
61
of operations. Clearly defined policies, procedures and
inbuilt checks and controls supplement the internal control
procedures. A well established and empowered system of
internal audit independently reviews the financial and
operational controls and reports deviations, if any, and
further enables course correction, as required. The
Company is constantly engaged in practicing the best
financial and operational control systems, as per
international practices and standards. The Company
operates on the 'SAP' platform, which is a well-acclaimed
ERP solution.
Mr. Sunil Makharia, Executive Vice President - Finance
A reputed firm of Chartered Accountants M/s Khimji
Kunverji & Co., are engaged as the internal auditors who
submit their reports to the Audit Committee of the Board,
which reviews the same and provides guidance on
measures to be initiated to further enhance the efficiency
and effectiveness of this vital control system.
RISKS,CONCERNS &THREATS
The Company has adopted a risk management system that is
designed to identify, analyse and mitigate the operational
and business risks. The executives implement measures for
risk mitigation, in consultation with the management and
continually review the corrective actions to enhance the
efficacy of the system.
The Company had appointed Deloitte Touche Tohmatsu
India Pvt Ltd (Deloitte) to assist in designing the Risk
Management Framework and related process.
The risk of over dependence on few markets is being
addressed by the Company through its prudent business
strategy of identifying and penetrating other potential
pharma markets across the globe. The Company's global
footprint extends to most of the large pharma markets of the
world, with its products available in over 50 countries,
including advanced markets such as, North America and
Europe. The Company also pursues a prudent policy of
growing and obtaining a position in critical markets of the
world through the inorganic route, subject to the acquisition
offering strategic fit to its operations.
Having established its leadership in the Anti-TB and oral
Cephalosporin segments, the Company has progressed
towards a robust formulations business comprising a wide
product mix, covering critical and chronic disease areas. It
has circumvented the risk of overdependence on few
products/therapy areas, through its wide portfolio offerings.
The Company develops, manufactures and markets a wide
range of quality, affordable generic and branded generic
formulations and APIs for the developed and developing
markets of the world. It is amongst the world's largest
manufacturers of drugs that combat tuberculosis bacterial
infections, with significant presence in the areas of Diabetics
and Asthma. In the India Region, the Company is focussed on
enhancing its offerings for the Chronic Therapy areas.
Through its strengths in backward integration, ability to
master complex chemistry, process and products, global
scale, skills in sterile manufacturing, synthetic process
development, fermentation and through its global reach
with long terms contracts, its expertise and competencies
are leveraged to counter the highly price sensitive API and
Intermediates markets. Its strengths in API and
Intermediates play a crucial role in maintaining the
competitive positioning of its Formulation offerings to the
advanced markets.
The threats of price erosion of generics in the advanced
markets is countered through the prudent selection of the
product portfolio, accent on value added and complex
products, strict vigil and control over cost, sharpening the
supply chain management, leveraging its strengths in
backward integration, economies of scale and quality
differentiation. The Company positioned itself as a quality
supplier, with impeccable service standards, thereby,
providing itself the lever of being the 'supplier of choice'.
62
The Company believes that its focussed, productive and
dedicated sales team for the branded space in the US and
innovative promotional campaigns, together with the
introduction of line extensions, would further extend the
brand franchise of Suprax®.
The Company has a dedicated regulatory cell comprising
experienced, qualified and trained personnel, conversant
with regulatory requirements, working in close proximity
with the Research team. The accent is on attaining quality
filings tuned to the diverse needs, requirements and
expectations of varied regulatory authorities, across the
world and thereby, aim at speedier approvals.
Lupin has, over the years, built a relationship driven, multisupplier model for its raw materials, services and finished
goods needs that provides a natural hedge against the
failure or inability of any supplier. Procurements by a
focussed and specialised team ensures that the benefit of
competitive pricing is obtained, while maintaining the
highest quality standards.
The cost competitiveness, ability to provide high quality and
niche products covering wide therapeutic areas, long term
alliances and partnerships ensuring stable orders, provide the
naturalhedgeagainstsalesrisk.
The Company's business can be affected by foreign
exchange fluctuations. The Company hedges its risk through
forward exchange contracts and derivatives.
Lupin believes that it has the requisite competencies to
handle varied risks and is continually evolving proactive
strategies to counter the same and emerge successfuly.
OPPORTUNITIES,STRENGTHSAND OUTLOOK
With its strengths in APIs, formulations, R&D, vertical
integration, cost competencies, economics of scale, world
class manufacturing facilities, marketing and distributions
prowess, the Company is well equipped to capitalise the
opportunities that are set to arise in future. Lupin looks at
the future with confidence, as it moves along its journey of
excellence and superior performance.
As a socially responsible
organisation, we strive to take
care of the less privileged sections
of our society. We extend our
expertise to transform the lives
of our people and make a difference
to the society.
Lupin is committed to the challenging task of becoming a
proactive partner in nation building through the Lupin
Human Welfare & Research Foundation (LHWRF).
Initiating the programme of Rural Development within a
small number of 35 villages, LHWRF has now succeeded in
revitalising, revamping and recreating life in 2,200
villages in Rajasthan, Madhya Pradesh, Maharashtra and
Uttarakhand States of India, which has led to LHWRF
emerging as one of the largest NGOs in the country. The
Foundation has been successful in making a big difference
in the development of poverty-ridden villages, and
especially in the life of the poorest of the poor and
empowermentofa large number ofwomeninthese areas.
Today, LHWRF, on its part, is a catalyst and an observer of a
self-evolving, self-sustaining spectacular transformation.
At LHWRF, the Company has learnt far more from rustic
traditional wisdom and the villagers will to develop
together in a converged and cooperative manner, than it
could teach them.
63
Corporate Social Responsibility
FROM PROVIDING HELP
TO TRANSFORMING LIVES
> Industry Overview
> CIS
> API
> Advanced Markets
> R&D
> HR
> IRF
> AAMLA
> CSR
THE KEY FOCUSAREAS OFTHE FOUNDATIONARE:
SIGNIFICANT UNDERTAKINGS
!
Lupin is working towards developing two major
programmes, one targeting the youth and the other, the
landless as well as the poor by empowering them through
Animal Husbandry. Both these programmes are aimed at
uplifting 21,000 BPL (Below Poverty Line) families to
above the poverty line, to lead prosperous lives.
!
Economic Development
Agriculture
+
Animal Husbandry
+
Rural Industry & Microfinance
+
Social Development
Health
+
Education
+
Women Empowerment
+
Infrastructure Development
+
Today, LHWRF is indeed recognised as a pioneer in
undertaking several unique initiatives, within its key
focus areas.
ANOTHERYEAR OF SERVING THE COMMUNITY
ESTABLISHMENT OF KAUSHAL INSTITUTE
The Ministry of Rural Development, Government of India,
has agreed, in principle, to sanction a massive project
worth Rs.15 crore to train 15,000 youngsters and ensure
the employment of 80% of them. The programme will
also provide self-employment to 20% youth in seven
districts across the State of Rajasthan. This initiative is aimed
at addressing the unemployment issue prevalent in these
districts and kindle a ray of hope in the minds of youth
towards their future.
During 2007-08, the Foundation has undertaken significant
steps towards improving the quality of life of farmers in the
country.
64
DAIRY DEVELOPMENT
ADDRESSINGWATER CRISIS
LHWRF has undertaken this initiative to provide
sustainable income through out the year, against the
vagaries of the monsoon. The programme, costing nearly
Rs. 8.5 crore, is expected to provide 6,000 buffaloes, along
with vermi-compost and chilling plant to bring about 6,000
most vulnerable families into the main stream of life.
LHWRF has embarked on an ambitious initiative of
restoration of traditional tanks and ponds in the
Bharatpur district. As a majority of wells are located near
ponds, de-silting of these ponds will not only provide
water for multiple uses, but it will also generate the
requisite awareness for water conservation for the
future. LHWRF has setup a target to dig 55 ponds in one
block of the district.
PUBLIC PRIVATE PARTNERSHIPS
LHWRF has signed MoUs with Mother Dairy and National
Dairy Development Board. According to the agreement,
Mother Dairy plans to set up chilling plants and bulk
coolers in villages. LHWRF is expected to ensure a
minimum of 2,000 litres milk collection to these chilling
centers. These chilling centers will be monitored by Lupin
and run by trained women members and Mother Dairy
will offer performance based incentives. Over Rs.5 crore is
expected to be invested to promote this activity in the
Bharatpur District.
Additionally, LHWRF has also undertaken two water
resource development projects at its Pune center. The
Government has already sanctioned one of the two
projects, costing Rs. 2 crore, for providing drinking water
in the rural areas of the Pune district. The development of
a watershed is the other project , with an estimated
cost of Rs. 1.8 crore, which is being undertaken in
association with NABARD. This project is going to
capture the run-off water for conservation and gainful
utilisation.
“I had never imagined that I would become a successful
dairy owner with only 2 acres of land. Currently, my
earning through this integrated model dairy is Rs.15,000
to Rs. 20,000 per month. Earlier, my source of income was
sufficient only for producing cereals for my family
consumption.
Mr. Sohan Singh
Today, the situation has changed and my sources of
income are Dairy, Vermi-compost, Bio-gas, natural
insemination, milk collection center and animal feed. This
has been possible because of the motivational, technical
and financial support from Lupin.”
65
The Foundation is the
architect of diverse
programmes targeted at the
overall upliftment of the
village through economic,
social and infrastructure
development
EMPOWERINGWOMEN
Having formed women Self Help Groups (SHG) in each
adopted village, Lupin has begun its drive towards
providing women with their worthy status in the society
at social and economical levels. These SHGs are linked
with banks for financial assistance and are provided with
the required technical know-how to start income
generation activities. Today, LHWRF has formed as many
as 2,500 Self-Help Groups (SHGs), with a total
membership of about 28,750 women. While all the
members of SHGs are insured, 70% of them are linked
with income generation activities.
Additionally, Lupin's initiative under Janni Suraksha
Yojna of the Central Government, promotes
institutional delivery to reduce Infant Mortality Rate
(IMR) and Mother Mortality Rate (MMR). Another
programme, “Beti Ek Anmol Ratan”, addresses the issue
of gender disparity. This concept is already gaining
popularity and is expected to eradicate gender
discrimination.
The Foundation is the architect of diverse programmes
targeted at the overall upliftment of the village through
economic, social and infrastructure development. These
programmes assist impoverished families to become
self-reliant and live a happy and prosperous lives.
UNESCO Team visits Mr. Sohan Singh's Dairy farm
FARMER’S SUCCESS STORY
Sohan Singh's 2 acres of land was hardly
enough to produce cereals for meeting his
families consumption needs. Having received
timely aid from LHWRF, today Sohan enjoys a
sustainable means of income that has paved
the way for a life of dignity.
LHWRF established one model dairy for Sohan
Singh. After ensuring sufficient production of
milk, a cooling plant with a capacity of 2,000
liters has been commissioned by Mother Dairy.
With this initiative, Sohan Singh draws a
commission of Rs. 0.70 per litre. A latest
Chinese model biogas plant was also installed
that ensures optimum utilisation of cow dung
to provide cooking gas for women, slurry for
soil enrichment and light for children to read.
Furthermore, the Foundation also arranged for
a loan from Rashtriya Mahila Kosh to purchase
Murrah buffaloes, which alone ensured a
monthly income of Rs. 5,000-6,000.
Hidden in the success of Sohan Singh, is the fact
that LHWRF presents a model for the farmers
of the country to come out of their distress.
66
Five Years Financial Summary
CONSOLIDATED BALANCE SHEET
As at March 31,
(Rs. in million)
2004
2005
2006
2007
2008
401.4
3,906.2
4,307.6
401.4
4,492.4
4,893.8
401.4
5,831.4
6,232.8
803.4
7,929.7
8,733.1
820.8
11,976.0
12,796.8
3,042.5
905.6
3,948.1
3,972.0
600.1
4,572.1
4,409.5
4,839.5
9,249.0
3,911.2
4,736.4
8,647.6
7,080.6
4,948.2
12,028.8
941.8
934.6
956.1
1,027.2
1,248.0
8.2
12.0
15.8
9,205.7
10,412.5
16,453.7
18,407.9
26,168.1
6,600.4
1,389.8
5,210.6
171.7
5,382.3
7,346.6
1,717.7
5,628.9
698.1
6,327.0
8,561.3
2,095.6
6,465.7
252.1
6,717.8
9,527.9
2,382.1
7,145.8
825.5
7,971.3
14,858.8
4,697.5
10,161.3
963.8
11,125.1
-
-
-
-
1,872.3
26.4
26.4
28.0
28.0
58.2
-
-
17.1
1.3
141.2
2,309.9
2,276.1
301.6
2,003.8
6,891.4
2,614.7
2,549.5
270.7
1,754.3
7,189.2
3,429.1
3,111.6
4,774.2
1,999.6
13,314.5
4,298.1
4,038.5
3,844.5
2,448.2
14,629.3
7,893.4
7,439.0
2,741.8
2,367.0
20,441.2
2,344.6
749.8
3,094.4
3,797.0
9,205.7
2,735.9
394.2
3,130.1
4,059.1
10,412.5
3,146.9
476.8
3,623.7
9,690.8
16,453.7
3,515.2
706.8
4,222.0
10,407.3
18,407.9
6,018.8
1,451.1
7,469.9
12,971.3
26,168.1
I. SOURCES OF FUNDS
Shareholders' Funds
Equity Share Capital
Reserves and Surplus
Loan Funds
Secured Loans
Unsecured Loans
Deferred Tax Liabilities (Net)
Minority Interest
[31.03.2007 Rs.27/-]
Total
94.5
II. APPLICATION OF FUNDS
Fixed Assets
Gross Block
Less: Depreciation and Amortisation
Net Block
Capital Work-in-Progress
Goodwill on Consolidation
Investments
Deferred Tax Assets (Net)
Current Assets, Loans and Advances
Inventories
Sundry Debtors
Cash and Bank Balances
Loans and Advances
Less: Current Liabilities and Provisions
Current Liabilities
Provisions
Net Current Assets
Total
67
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Year ended March 31,
(Rs. in million)
2004
2005
2006
2007
2008
12,638.5
13,122.8
17,503.4
20,716.5
27,730.1
486.5
511.4
549.4
579.4
666.4
12,152.0
12,611.4
16,954.0
20,137.1
27,063.7
Other Income
513.5
234.1
741.0
1,990.5
2,064.5
Total Income
12,665.5
12,845.5
17,695.0
22,127.6
29,128.2
Cost of Materials
6,224.6
6,441.0
8,259.2
9,320.8
11,638.0
Personnel Expenses
1,100.5
1,329.1
1,689.6
2,199.9
3,076.0
Manufacturing and Other Expenses
2,608.1
3,507.1
4,769.6
5,694.1
7,991.2
9,933.2
11,277.2
14,718.4
17,214.8
22,705.2
2,732.3
1,568.3
2,976.6
4,912.8
6,423.0
Interest and Finance Charges
525.9
282.5
312.8
372.2
373.5
Depreciation and Amortisation
295.3
336.2
408.8
466.1
647.4
1,911.1
949.6
2,255.0
4,074.5
5,402.1
Current Tax
471.7
34.6
402.6
779.6
1,022.6
Deferred Tax
46.3
(7.2)
28.0
128.5
180.6
-
-
90.7
80.0
114.8
1,393.1
922.2
1,733.7
3,086.4
4,084.1
Extraordinary Items (Net of Tax)
508.9
-
-
-
-
Net Profit before Minority Interest
and Share of Loss in Associate
884.2
922.2
1733.7
3,086.4
4,084.1
16.2
3.8
3.8
0.8
1.3
-
-
-
-
0.3
868.0
918.4
1,729.9
3,085.6
4,082.5
PARTICULARS
Sales (Gross)
Less: Excise Duty
Sales (Net)
Total Expenses
Profit before Interest, Depreciation,
Tax and Extraordinary Items
Profit before Tax and
Extraordinary Items
Fringe Benefit Tax
Net Profit before Extraordinary Items
Minority Interest
Share of Loss in Associate
Net Profit
Note: Figures for the previous years have been suitably regrouped to make them comparable.
Five Year Financial Summary
68
Reports & Financials
69
Directors' Report
79
Corporate Governance Report
96
Auditors' Certificate on Corporate Governance
97
Auditors' Report
100 Financial Statements
141 Auditors' Report on Consolidated Financial Statements
142 Consolidated Financial Statements
182 Section 212 Statement
183 Financial Information of Subsidiary Companies
104
Schedules Forming Part of the Balance Sheet
SCHEDULE 1 - SHARE CAPITAL
Authorised
100,000,000 (previous year 100,000,000) Equity Shares of Rs 10/- each
TOTAL
Issued, Subscribed and Paid-up
82,080,895 (previous year 80,344,564) Equity Shares of Rs 10/each fully paid up
TOTAL
As at
31.03.2008
Rs. in million
As at
31.03.2007
Rs. in million
1,000.0
1,000.0
1,000.0
1,000.0
820.8
803.4
820.8
803.4
Note :
Of the above equity sharesi) 37,311,048 (previous year 37,311,048) Equity Shares of Rs. 10/- each were allotted as fully paid-up without
payment being received in cash, pursuant to the Scheme of Amalgamation with erstwhile Lupin Laboratories
Limited.
ii) 40,152,494 (previous year 40,152,494) Equity shares of Rs 10/- each have been allotted as fully paid-up bonus
shares by way of capitalisation of General Reserve.
iii) 131,167 (previous year 50,936) Equity Shares of Rs. 10/- each, fully paid-up have been allotted pursuant to " Lupin
Employees Stock Option Plans".
[Refer note no.14(a) of Schedule 17(B)].
Particulars of options on unissued share capital [Refer note no.14(a) of Schedule 17(B)].
iv) 1,656,100 (previous year Nil) Equity Shares of Rs. 10/- each, fully paid-up have been allotted on conversion of
Foreign Currency Convertible Bonds in accordance with the terms of issue.
[Refer note no.20(a) of Schedule 17(B)].
Schedules
(Rs. in million)
****
58.1
9,527.9
8,561.3
176.3
2,779.2
4.9
0.4
2,226.8
1,200.0
37.8
2,382.1
2,095.6
147.8
1,493.7
-
0.9
21.0
649.1
466.1
(0.1)
(13.2)
(172.6)
179.6
1.0
219.8
4,697.5
2,382.1
4.2
32.0
10,161.3
7,145.8
963.8
11,125.1
825.5
7,971.3
****
20.3
7,145.8
Particulars
Gross Block #
Depreciation #
Freehold Land
(79.9)
Buildings
(79.9)
(40.3)
Plant , Machinery and Equipments
(223.7)
(170.0)
Furniture and Fixtures
(4.9)
(4.2)
Vehicles
(0.3)
##
Intangible Assets
Goodwill
(0.3)
(0.1)
Computer softwares
(29.4)
(25.6)
# Previous Year Rs. Nil
## Rs. 20,168/8. Depreciation for the year includes Rs. 1.7 million (previous year Rs. Nil) being depreciation
capitalised as pre operative expenses [Refer note no. 4 (b) of Schedule 17 (B)].
6. Vehicle of a subsidiary company located in Australia is under a lien towards loan taken from bank.
7. Deductions/adjustments in the Gross Block and Depreciation and Amortisation include adjustments
on account of exchange gain on translation into INR as under:
(Rs. in million)
(0.3)
5.2
(17.0)
251.8
(324.9) 14,858.8
233.4
9,527.9
Gross Block
Depreciation and Amortisation
Net Block
As at Additions on Additions Deductions/
As at
Up to Additions on For the Deductions/
Upto
As at
As at
April 01, acquisition of
Adjustments March 31, March 31, acquistion of
Year Adjustments March 31, March 31, March 31,
2007
subsidiary
2008
2007
subsidiary
2008
2008
2007
companies***
companies***
27.5
471.5
(79.9)
578.9
578.9
27.5
148.3
86.8
235.1
11.9
3.9
15.8*
**
219.3
136.4
2,235.0
554.0
571.3
(79.6)
3,439.9
361.0
243.0
90.2
(40.3)
734.5
2,705.4
1,874.0
6,858.8
1,534.6
1,514.9
(145.2) 10,053.5
1,915.3
1,075.5 512.3
(115.8)
3,618.9
6,434.6
4,943.5
179.4
36.9
46.5
(4.2)
267.0
51.6
25.3
18.5
(3.9)
99.3
167.7
127.8
20.8
5.9
2.0
1.3
27.4
4.5
2.1
2.3
0.7
8.2
19.2
16.3
* Amounts written off in respect of Leasehold Land for the period of lease which has expired.
** Rs. 45,166/-.
*** Refer note no. 19 (a) of Schedule 17 (B)
**** Rs.35/Notes :
1. Cost of Buildings include cost of shares in co-operative societies of Rs.1,000/- (previous year
Rs.1,000/-).
2. Capital Work-in-Progress include capital advances paid, machinery under installation/in transit and
construction and erection materials (including those lying with contractors) and pre-operative
expenses.
3. Capital Work-in-Progress includes for project under construction of an Indian subsdiairy :
a) Rs. 86.8 million ( previous year Rs Nil ) on account of Advances against Project Contracts.
b) Rs. 8.7 million ( previous year Rs Nil ) on account of Project Development Expenditure Account.
[Refer note no.4 (b) in Schedule 17(B)]
c) Rs. 97.2 million ( previous year Rs. Nil ) on account of building under construction, construction
material and machinery equipments at site.
4. Additions to Fixed Assets and Capital Work-in-Progress includes Rs. Nil [ previous year Rs. 1.3 million]
on account of exchange differences (net).
5. Additions to Fixed Assets include items of fixed assets aggregating to Rs. 296.5 million (previous year
Rs. 112.2 million) located at Research and Development Centres of the Company.
Freehold Land
Leasehold Land
Buildings
Plant, Machinery and Equipments
Furniture and Fixtures
Vehicles
Intangible Assets
- Goodwill
- Computer softwares
TOTAL
Previous Year
Capital Work-in-Progress
TOTAL
Particulars
SCHEDULE 5 - FIXED ASSETS
149
154
Schedules Forming Part of the Consolidated
Profit and Loss Account
Year Ended
31.03.2008
Rs. in million
Year Ended
31.03.2007
Rs. in million
367.5
62.6
87.5
1,127.2
139.0
56.4
32.9
1,143.2
0.2
1.5
1.4
147.6
1.4
205.8
20.3
13.9
11.7
143.8
8.8
192.2
SCHEDULE 12 - OTHER INCOME
Export Benefits and Other Incentives
Income from Research Services
Income from Product Registration Services (Dossiers)
Income from Sale of Patent Applications
Dividend on Long Term Investments - Trade
[31.03.2008 - Rs. 8,820/- ; 31.03.2007 - Rs.6,615/-]
Dividend on Long Term Investments - Non Trade
Dividend on Short Term Investments - Non Trade
Interest on Long Term Investments - Non Trade
Interest on Fixed Deposits with Banks
[Tax Deducted at Source Rs. 1.5 million (previous year Rs. 0.7 million)]
Other Interest (net)
[Tax Deducted at Source Rs.0.5 million (previous year Rs. 0.5 million)]
Insurance Claims
Compensation received
[Refer note no.15 of Schedule 17(B)]
Exchange Rate Diffference on translation (net)
Credit balances written back
Provision for Doubtful Debts/Advances no longer required written back
Profit on Sale/Disposal of Investment in a subsidiary company
Miscellaneous Income
[Tax Deducted at Source Rs.0.4 million (previous year Rs.0.6 million)]
TOTAL
40.3
0.2
1.4
51.3
15.1
55.1
18.2
21.1
87.4
2,064.5
1,990.5
SCHEDULE 13 - COST OF MATERIALS
Raw and Packing Materials Consumed
Purchase of Traded Goods
10,195.1
3,574.9
7,369.0
2,461.6
2,422.6
1,912.8
748.4
-
5,303.0
2,422.6
(2,132.0)
(509.8)
11,638.0
9,320.8
2,627.0
257.0
192.0
3,076.0
1,898.5
162.2
139.2
2,199.9
Opening stock of Finished Goods (including Traded Goods) and
Work-in-Process
Add: Stock Acquired on Acquisition of subsidiaries
[Refer note no. 19(a) of Schedule 17(B)]
Less: Closing stock of Finished Goods (including Traded Goods) and
Work-in-Process
Increase in Stock of Finished Goods (including Traded Goods) and
Work-in-Process
TOTAL
SCHEDULE 14 - PERSONNEL EXPENSES
Salaries, Wages and Bonus
Contribution to Provident and Other Funds, Gratuity
Welfare Expenses
TOTAL
155
SCHEDULE 15 - MANUFACTURING AND OTHER EXPENSES
Processing Charges
Consumable Stores and Spares
Repairs and Maintenance:
- Buildings
- Plant and Machinery
- Others
Rent
Rates and Taxes
Insurance
Power and Fuel
Contract Labour Charges
Excise Duty (net)
Selling and Promotion Expenses
Commission, Brokerage and Discounts
[Including cash discount of Rs.3.8 million (previous year Rs.4.7 million)]
Freight and Forwarding
Lease Rent and Hire Charges
Postage and Telephone Expenses
Travelling and Conveyance
Legal and Professional Charges
Donations
Clinical and Analytical Charges
Loss on Sale/Discard of Fixed Assets (net)
Bad Debts
Export Incentive receivable written off
[Refer note no. 18 of Schedule 17(B)]
Provision for Doubtful Debts
Provision for Diminution in value of Long Term Investments
Directors Sitting Fees
Exchange Rate Difference (net)
Miscellaneous Expenses
(includes Printing and Stationery, Vehicle Expenses
Product Registration Fees, Audit Fees, etc.)
TOTAL
SCHEDULE 16 - INTEREST AND FINANCE CHARGES
Interest on Debentures
Interest on Fixed Loans
Others
TOTAL
Schedules
Year Ended
31.03.2008
Rs. in million
Year Ended
31.03.2007
Rs. in million
256.4
669.8
182.9
488.5
61.2
161.5
110.1
124.5
54.8
128.7
1,129.4
205.8
201.3
1,518.5
448.9
56.4
113.7
87.2
44.9
47.5
95.9
905.2
164.1
79.7
1,002.2
345.2
396.3
92.3
100.5
507.5
563.2
45.0
320.8
23.7
4.5
134.5
329.3
46.1
80.4
397.6
461.1
40.0
337.5
12.9
17.0
-
13.0
3.5
0.8
287.8
426.9
0.9
95.8
262.1
7,991.2
5,694.1
10.4
50.5
312.6
373.5
5.8
56.4
310.0
372.2

Here

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