Dear Shareholders,

I warmly welcome you all to the 29th Annual General Meeting of your Company & thank you all for attending the same. The 29th Annual Report has been with you for some time now & it discusses in great detail the performance & financial position of the Company. With your permission I would like to take the Directors Report and the Audited Accounts for the year ended 31-Mar-02 as read. The Company's performance in terms of growth as well as quality of operations has been satisfactory in the year under review. However I would like to deal with some of the changing features of the business of your Company in brief.

New Patents Law :

India now has a patent law in line with its commitments under WTO / TRIPS. While this is not expected to affect the business model for next 3 to 5 years, your Company has already embarked upon the course to redefine its business model so as to sustain growth and profitability in the coming years. Though the new patent regime will no longer allow Indian companies to re-engineer patented drugs, it opens up certain other opportunities for growth. Your Company's strategies include tapping opportunities in high-quality manufacturing value chain, in-licensing of patented products for domestic marketing, product development opportunities & building an export business to tap the burgeoning generics markets of the western countries.

Price Control :

In the past the Government action on prices of controlled pharmaceutical products affected the growth as well as the profitability of your Company. However last year the Government announced a progressive pharmaceutical policy, including a relaxation in pricing control over pharmaceutical products. While the follow up measures are yet to be taken up by the Government, your Company expects to benefit from the same in the current year.

Domestic Formulations Market :

Your Company's sales grew by 9.1% while the net profit for the year rose by 20%. Your Company consolidated its position in the domestic formulations market by introducing new molecules as well as strengthening of the existing brands through value added line-extentions & such other strategies. The market data collected by ORG MARG indicates that the domestic market grew by 10.6% in 2001-02 whereas your Company's core branded formulation business grew by 14.4% during the same period, thereby outgrowing the market growth rate. A significant feature of the growth for the year was improvement in quality of marketing operations. These efforts will continue in the current year also and benefits are expected to accrue in terms of stronger brands, efficient marketing spend and improved profit margin. A domestic marketing set up having national reach & strong franchise in key therapeutic areas will help your Company to in-license patented molecules of foreign pharma companies for domestic distribution.

The emerging life style pattern, with a host of other factors, has made the metabolism related disorders very common. This situation is likely to worsen. Your company wishes to exploit this opportunity and is committed to emerge as a strong player in this segment.

31 new products, including line extensions, were launched in 2001-02. The Company has a healthy pipeline of products to be launched in 2002-03. These products are likely to strengthen your Company's presence in the niche therapeutic segments in which the Company operates.

International Operations :

Last year, we acquired a small pharmaceuticals company in Brazil. This is being developed as our base to set up marketing operations in Brazil. Your Company has received several product approvals from the health regulatory authority in Brazil; the manufacturing plant has also been approved. During the current year supplies from India to the Brazilian subsidiary will commence. We are very hopeful of a successful launch in the Brazilian market. With the commencement of sales in Brazil in this year, your company shall be first Indian pharmaceutical company to have its own sales force in the country. The future plans include expanding to other Latin American markets.

During 2001-02, the upgradation & modernization programme for the formulations plant was completed. This has strengthened the manufacturing capabilities in tablets, capsules & packing areas besides improving the testing capabilities. The Company is now gearing itself for cGMP approvals from inspecting authorities of the more "regulated" countries including UK.

The upgradation project of bulk drug plant is expected to be completed in 2002-03. It will then be capable of meeting the DMF standards of European drug authorities. This will be a major step forward in the Company's efforts to enter the international Generic markets.

Research & Development :

Your Company has been committing significant resources to R&D since last few years. Today, Torrent Research Center, the R&D wing of the Company is considered to be among the top class research outfits in the domestic pharma research. It has been acclaimed by many overseas pharma companies also. Torrent Research Center has done very well in its discovery research projects - in fact we are very excited about two projects which have been identified for licensing out to an international pharma company. Torrent Research Center is also doing important work in the field of Novel Drug Delivery Systems (NDDS) & development of generics for the lucrative western markets. This will help your Company to evolve a sustainable & scaleable export business model. Torrent Research Center continues to play a pivotal role in the product introductions for the domestic market, the current growth engine of your Company.

Prudent Accounting :

Prudent & transparent financial accounting with adequate disclosure forms the sub-stratum for any system of corporate governance. This issue has gained particular relevance in recent times in light of the failure of some large American Corporations & their aggressive accounting practices. You would have noticed in the last few years, that your company has progressively moved towards conservative & prudent accounting practices backed up by detailed disclosures & greater information in various financial reports to the shareholders. I take this opportunity to assure you of maintaining high standards of accounting & disclosure and building a strong governance structure for the Company. We are confident that this process, in conjunction with an efficiently run business, will result in maximisation of shareholders wealth.

I take this opportunity to thank the medical fraternity and the patient community for reposing faith in us & appreciating the value of true quality in pharma products. I also thank the Central & State Governments, related Authorities, Banks, Suppliers, employees & above all the Shareholders of the Company for their continued support.

Thank you.