Lupin LimitedLupin Limited

PresentationOctober 2003

DisclaimerDisclaimer

The information presented in this presentation contains The information presented in this presentation contains forward looking statements that involve known and unknown forward looking statements that involve known and unknown risks, uncertainties and other factors that may cause actual risks, uncertainties and other factors that may cause actual results to be materially different from any future results, results to be materially different from any future results, performance or achievements expressed or implied by such performance or achievements expressed or implied by such statements. Many of these risks, uncertainties and other statements. Many of these risks, uncertainties and other factors and include failure of clinical trials, delays in factors and include failure of clinical trials, delays in development, registration and product approvals, changes in development, registration and product approvals, changes in the competitive environment, increased government control the competitive environment, increased government control over pricing, fluctuations in the capital and foreign exchange over pricing, fluctuations in the capital and foreign exchange markets and the ability to maintain patent and other markets and the ability to maintain patent and other intellectual property protection. The information presented in intellectual property protection. The information presented in the following materials represents management's the following materials represents management's expectations and intentions as of October 2003. Lupin expectations and intentions as of October 2003. Lupin expressly disavows any obligation to update the information expressly disavows any obligation to update the information presented in this presentationpresented in this presentation

Section ISection I

Corporate Overview

Background and OriginBackground and Origin

Founded in 1968 by the Chairman, Dr. Desh Bandhu Gupta

Now spread over 6 locations in India and a joint venture in Thailand

Represented through Sales offices in UK, USA, Hong Kong, Japan and CIS

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Lupin Limited TodayLupin Limited Today

Integrated player with significant presence in both API and Formulations

Turnover : Rs. 11,200 mn (FY 2002-03) Amongst the Top 10 Pharmaceutical Company in India Increasing global presence 9 out of 10 plants US FDA approved 110 Patents filed to date, 50 granted 3,300 employees Shareholding Pattern:

– Promoter Group - 67%– FIs / FIIs/ MFs - 5%– Public- 28%

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Section IISection II

Business Profile

Product & Geographical MixProduct & Geographical Mix

74%63%68%

37%32%26%

20%

40%

60%

80%

100%

2000-01 2001-02 2002-03

Domestic Exports

54% 55% 61%

46% 45% 39%

0%

20%

40%

60%

80%

100%

2000-01 2001-02 2002-03

API Formulations

Exports continue to be the key growth driver Advanced markets contribution to top line increasing API Sales from Developing markets contribute significantly to the top line Domestic formulation sales growing and continues to be a key focus market for the company

9,028 9,569 11,200Rs./Mn -

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Therapeutic & Market Mix Therapeutic & Market Mix (FY 2002-03)(FY 2002-03)

30%

50%

11%

9%

Anti TB Cepha Cardiac Others63%

14%

2%21%

India US/EUSEA & China Others

Key focus market and the growth driver

Increase presence in CardiovascularsFurther strengthening in Cephalosporins Maintain leadership in Anti TB Building chronic lifestyle segment

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API – Regulated MarketsAPI – Regulated Markets

Growing generic acceptance increased opportunities

Preferred supplier status

Strengthening tie-ups – long term supply arrangements

Manufacturing capacity to meet the alliance partners requirements

Comprehensive process for managing intellectual property leading to virtual exclusivity (Cefotaxime)

Inherent strengths in process chemistry leading to development of products creation of strong entry barrier

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API – Unregulated MarketsAPI – Unregulated Markets

Cost, quality and capacity the differentiating factors

Customer focus – price, reach and delivery the building blocks

Amongst the top 3 in our area of focus

Strategic alliances long term supply arrangements

Increasing exports thrust

Leadership in anti TB continues

Consolidation in Cephalosporins

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Generic FormulationsGeneric Formulations US generic market at $11 bn, expected to grow to $20 bn by 2010

EU generic market expected to grow rapidly in the next few years:

UK - is already a well developed substitution market

Germany - is the largest Generic market in the EU, branded Generic at

present, however converting to a substitution market

France – Growing aggressively post substitution bill being passed

5 ANDAs filed, 3 approved including Ceftriaxone – first Indian company to receive approval for an injectable outside US/EU

Gearing up to file 6-8 ANDAs per year

First generic launch in the US with Cefuroxime Axetil

Suprax TM (Cefixime) licensed from Fujisawa. Product launch post

receipt of product approval from US FDA

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Formulations – Domestic MarketFormulations – Domestic Market Strong forte in Anti-TB maintained

Force to reckon with in Cephalosporins

Building chronic life style segments – cardio, anti-diabetes

900 strong sales force, 28 sales points, 1900 distributors

Ranked 13th in the domestic formulations industry

8 brands in the Top 300

Broad therapeutic portfolio and wider product basket

Key player in Indian Generic Generic market

Rablet, an anti peptic ulcerant rated as the 2nd best launch in the industry in year 2002-03 and continues to perform well

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Formulations – Unregulated MarketsFormulations – Unregulated Markets

Presence in South East Asia & Africa

Increasing focus in the CIS markets

Facility upgraded to WHO standards for Global TB business

Developing partnerships for marketing in SEA & Africa

Stepping up product registration in the markets of interest

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Research & DevelopmentResearch & Development State of the art research park at Pune

Team of 140 scientists conduct leading edge research in the field of:

New Chemical Entity (NCE)

Novel Drug Delivery System (NDDS)

Process Chemistry

Collaborations with leading research institutes - CSIR, IISc. Bangalore, IICT Hyderabad etc.

Ceff-ER, the world’s first once-a-day Cephalexin tablet developed and launched in the domestic market

110 patents filed till date, 50 granted

12 DMFs and 5 ANDAs filed with the US FDA

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Section IIISection III

Financials

Lupin over the yearsLupin over the years

0

2000

4000

6000

8000

10000

12000

Sales

2000-01

2001-02

2002-03

0

200

400

600

800

1000

PBT

Rs’ mnRs’ mn SalesSales PBTPBT

2000-012000-01 9,0289,028 650650

2001-022001-02 9,5699,569 964964

2002-032002-03 11,20011,200 971971

CAGR 11% CAGR 22%

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Key financial parametersKey financial parametersParticularsParticulars 2000-012000-01 2001-022001-02 2002-032002-03

P&L RatiosP&L Ratios

Sales growthSales growth -- 6%6% 17%17%

EBITDA MarginEBITDA Margin 15.9%15.9% 19.0%19.0% 16.4%16.4%

Balance SheetBalance Sheet

Debt Equity (incl. Deferred Tax)Debt Equity (incl. Deferred Tax) 1.77:11.77:1 1.51:11.51:1 1.24:11.24:1

Debtors (Days)Debtors (Days) 119119 123123 109109

Current RatioCurrent Ratio 4.194.19 3.983.98 3.303.30

OthersOthers

EPS(Rs.)EPS(Rs.) 14.5714.57 17.6717.67 18.0818.08

Fixed Asset TurnoverFixed Asset Turnover 2.072.07 2.072.07 2.262.26

ROCE (%)ROCE (%) 12.8%12.8% 15.1%15.1% 15.0%15.0%

RONW (%)RONW (%) 17.2%17.2% 21.7%21.7% 19.1%19.1%

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Section IVSection IV

Lupin Ahead

Entry of Financial investorsEntry of Financial investors

Pursuant to an internal realignment, promoters have signed an MOU on July 2, 2003 for placing 12.55% of their holdings in Lupin Limited to CVC international, part of Citigroup Global Investments

In parallel, the promoters have also entered into an MoU to place 12.55% of their holdings in Lupin Limited to Newbridge Capital, a leading private equity firm

Induction of these financial investors is expected to assist the company in its growth plans

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1. Provision against certain overdue receivables on conservative basis.

2. Company gave security deposit against leased property and recovery needs to be expedited against certain leased property.

3. Company has placed deposits for leasing of certain plant facilities and the cumulative return till FY 2002-03 has not been commensurate to the interest on the deposit and the company should look at the reduction of the quantum of deposit.

4. Estimated shortfall in certain gratuity provision applying conservative actuarial norms, which the company should consider providing for.

5. The average interest rate for the company as a whole has reduced from 13.1% (FY 2000-01) to 9.4% (FY 2002-03).

6. Company has advanced to certain parties towards freehold land for the R&D center and out of this, certain amount of advance is under dispute and should be provided for.

Summary of Legal & Financial ReviewSummary of Legal & Financial ReviewThe company undertook review of its internal processes and controls with the assistance of reputed accounting & legal consultants and some highlights of the report, including its recommendations are:

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7. Company’s subsidiary Lupin Chemical Thailand Limited (LCTL) has accumulated losses exceeding its networth by Rs.35 Mn. Accumulated losses of Rs.225 Mn in 1996-97 (due to devaluation of Thai Baht) has been recouped fully through operating profits.

8. The company has accrued Octroi refund on accrual basis, which on a conservative basis should be reckoned on cash basis.

9. Contract manufacturing agreement for manufacturing certain intermediates with an external company is under dispute and the matter is being currently under arbitration proceedings. However, the company is confidant of a favourable outcome.

10. Certain claims have been filed against the company (Rs.22 Mn) for violation of DPCO, 1995 which is being contested by the company.

Summary of Legal & Financial ReviewSummary of Legal & Financial ReviewThe company undertook review of its internal processes and controls with the assistance of reputed accounting & legal consultants and some highlights of the report, including its recommendations are:

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Ongoing initiativesOngoing initiatives Continuing our focus on reduction of debt, the company

intends to further reduce the debt to the tune of Rs. 750 mn in FY 2003-04 (FY 2002-03 – Rs.480 Mn)

In the current year, the company is planning to settle certain overdue receivables and given the growth plans, the company is focusing its efforts to optimize its investment in working capital

The company is in the process of setting up a US FDA approvable non-Cephalosporins oral finished dosage plant at Goa to address the advanced market requirements

Consequent to the commissioning of the Goa plant, the profit generated from this plant will be eligible for income tax exemption

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Target for FY 2003-04Target for FY 2003-04

Key factors:• foreign exchange rate fluctuation• expansion of prils, statins and cephalosporins facilities in H2 FY 2003-04• product approval and consequent launch in the advanced market in H2 FY 2003-04

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• The company expects a sales growth of 30-35% in FY 2003-04 over previous year. The growth is fuelled through its sales of generics products in advanced markets as well as strong recovery in domestic dosage market.• Supported by the growth in volumes, the company expects operating net income growth of 85-90% over previous year.

Setting the Goals Setting the Goals Turnover expected to rise by 20-25% per annum YoY till FY 2005-06

based upon business expectations.

Advanced markets is expected to fuel the growth by contributing around 20-25% to the top line in FY 2005-06 (10% in FY 2002-03)

Moving up the value chain Formulations is estimated to contribute 45-50% of the turnover in FY 2005-06 (39% in FY 2002-03)

In the current year FY 2003-04, the company has set a target of improving the Operating Profit (EBIDTA) to the level of 20-22%, which is expected to sustain during the next two years

Company is also focused on reducing its existing levels of COS. It is expected to achieve this through implementation of ERP and process improvement plans.

Company will continue to focus on R&D and leverage the same for business

Company is targeting to convert 50% of his aggregate borrowings into dollar denominated borrowings on the strength of its growing exports

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Lupin of the futureLupin of the future

Infrastructure in place to meet the future challenges

Professionalization of Mgmt by inducting top notch senior professionals

Continue strong QA program

Leveraging R&D strengths for business

Leverage IT initiatives for business

Maximize value for all stakeholders

High degree of focus on Corporate Governance

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