My Dear Shareholders,

On behalf of the Board of Directors, I welcome all of you to the 33rd annual general meeting of your Company. The Annual Report for 2005-06, reflecting the business performance and financial position for that year is with you for quite some time and by now you may be familiar with the contents.

At this very forum last year, we had put before you two milestones the company wished to cross during 2005-06.

It is with immense pride and pleasure I inform you that your company achieved global sales of Rs. 1001 crores, showing a growth of 77% over previous year.  The international sales also reached Rs. 431 crores, contributing to 43% of the total sales as compared to 24% in the previous year.

As approved by you at the EGM, the process of sub-division of the shares into Rs. 5 and issuance of bonus in the ratio of 1:1 post split was completed successfully. This has improved the liquidity of shares, which is reflected in the increase in number of shareholders from 14000 to 28000 along with creating a positive shareholder value. The superior performance & the improved growth outlook prompted us to consider a higher dividend distribution for the year. The proposed dividend of Rs. 2.50 per equity share works out to a 100% rate on an adjusted basis as compared with 80% in the previous year.

The vision of achieving accelerated growth for the Company to become a leading player in the global generic pharmaceutical market, has kept us motivated to cross several new milestones. I am delighted to throw light on the rapid strides of your company during 2005-06, to realize this vision.

Our domestic formulation sales grew by 35 % during the year. The growth was positively impacted by the sales spill over from the previous year due to VAT implementation. Yet it was ahead of industry growth. On the international front, our overseas subsidiaries performed well and made deeper inroads into their respective regions. Torrent Do Brasil Ltda grew its sales from Rs.60 crores to Rs. 118 crores, registering 97 % growth. Russia and CIS operations achieved sales of Rs. 38 crores as against Rs. 13 crores in the previous year registering 189 % growth. During the year, your Company acquired Heumann Pharma in Germany, which posted revenues of Rs. 169 crores for the year 2005-06, at a consolidated level.

In the US market, which is also the world’s biggest generics market, we took forward the process of building our product pipeline in preparation for a market entry. We filed 4 ANDAs and 3 DMFs during the year and plan many more in the coming year.

I will now share with you in brief the outlook for the future. On the backing of solid growth in the last few years and acquisition of Heumann last year, we expect the international sales of your Company to grow significantly. Integration of operations of Heumann, Germany, is progressing well. Various strategic actions like shifting the manufacturing operations to low-cost facilities in India, improving the sales productivity and linking the product pipeline for regulated markets with Heumann have been initiated. These will allow us to grow sales and expand the margins to make Heumann profitable by FY 2007-08. The European, Brazilian and Russian operations will help in sustaining the high growth rate in the foreseeable future. Investments in new markets like the US will allow for the growth momentum to continue.

With many blockbuster drugs going off patent in the next few years, the global generics market shows tremendous growth opportunities. Another factor favoring this growth is the rising healthcare costs in developed countries, leading to a compulsive and self-sustaining shift towards generics.

India is suitably placed to benefit from these opportunities by marketing generic formulations, intermediates and APIs to these regions. The advantage lies in the combination of immense talent pool that it possesses, the process chemistry capabilities, the competitive cost structure and world-class manufacturing base that can deliver high quality products at a much lower cost. Looking at developed countries and the opportunities they offer for off-patent products, your Company is well poised to capitalize on these opportunities.

Back home, the domestic branded business will continue the growth momentum picked up in recent times. We have built strengths in terms of manpower, technology and a wide basket of products to allow the above market growth to continue in the next few years. We will build on the established positions in the domestic market by expanding into new therapeutic areas like dermatology, respiratory, nephrology & gynecology.

Our new manufacturing unit at Himachal Pradesh commenced commercial production in November 2005 for domestic market. This should help improve the bottom-line of your Company on account of fiscal benefits in form of excise duty and income tax exemption. The existing plant at Indrad will now cater to regulated markets.

Looking ahead, some of the key generics markets world over are undergoing structural changes, creating opportunities for inorganic growth. Your company is keen to explore niche acquisition opportunities in some of these markets, including the domestic market. To finance such acquisitions your company proposes to raise additional capital partly by issuing new equity or equity-linked securities at a suitable time and partly through new debt.

The role of R&D in sustaining the growth of the Company can not be underscored. To support future growth we are expanding our R&D infrastructure by building additional laboratory space, installing new instruments and expanding the clinical facilities. This will boost our product development, clinical and regulatory capabilities resulting in continuous product flow for new growth.

To conclude, I take this opportunity to extend our gratitude to the medical fraternity and all our customers for their faith & support in Torrent Pharma and its products. I also thank the Central and State Governments, related authorities, financial institutions, banks and above all, the shareholders and employees of the Company for their continued support.

To conclude, I take this opportunity to extend our gratitude to the medical fraternity and all our customers for their faith & support in Torrent Pharma and its products. I also thank the Central and State Governments, related authorities, financial institutions, banks and above all, the shareholders and employees of the Company for their continued support.

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This does not purport to be a report on the Proceedings of the 33rd Annual General meeting of Torrent Pharmaceuticals Limited.