India – a growing player

Dr. Brian W Tempest

Chief Mentor & Executive Vice Chairman of the Board

Ranbaxy Laboratories Limited

Frankfurt – 15th March’06

Except for the historical information contained herein, statements in this presentation and

the subsequent discussions, which include words or phrases such as “will”, “aim”, “will

likely result”, “would”, “believe”, “may”, “expect”, “will continue”, “anticipate”, “estimate”,

“intend”, “plan”, “contemplate”, “seek to”, “future”, “objective”, “goal”, “likely”, “project”,

“should”, “potential”, “will pursue” and similar expressions or variations of such

expressions may constitute "forward-looking statements". These forward-looking

statements involve a number of risks, uncertainties and other factors that could cause

actual results to differ materially from those suggested by the forward-looking statements.

These risks and uncertainties include, but are not limited to our ability to successfully

implement our strategy, our growth and expansion plans, obtain regulatory approvals, our

provisioning policies, technological changes, investment and business income, cash flow

projections, our exposure to market risks as well as other risks. Ranbaxy does not

undertake any obligation to update forward-looking statements to reflect events or

circumstances after the date thereof.

Disclaimer

Asia’s Share of the World GDP (at PPP in %)

Year 1870 1913 1950 1973 2001 China 17% 9% 5% 5% 12% India 12% 8% 4% 3% 5% Japan 2% 3% 3% 8% 7%

Rest of Asia 7% 5% 7% 9% 13% Total Asia 38% 25% 19% 25% 37%

Source – WEF

Davos 2006

Source – FT

The Productivity Advantage

India a usa pharma view USA

1 chemist FTE 1 chemist FTE

70 h/week 50 h/week

$ 800 monthly $ 12,000 monthly

Better education x 1,3Better education x 1,3

Longer working time x 1,3Longer working time x 1,3

Lower cost x 20Lower cost x 20

Sources: IPHMR Conferences, New Delhi August 2004

Europe - retirees grow faster than workers - fertility rates lower

Japan - expansion of grey segment

USA - over 50’s 88m will grow to 118m (2020) - obesity

China - one child families - get older before becoming wealthy - labour costs will rise owing to labour shortage - rural to urban flow

India - will remain very young - source of the extra needed global workforce

The Ageing Advantage

The R&D Investment Advantage Most attractive R&D Investment locations:

1. China 2. USA 3. India 4. Japan 5. UK

Source – UNCTAD 2005

Qualified Scientists & Engineers

Global India players with Alliances

English speaking

TRIPs compliant

IIT, IIM & other scientific institutions

Source – UNCTAD 2005

The R&D Investment Advantage-reasons why

Genetic engineering research 165Transgenic work 55Therapeutics 25 Basic research 28Universities > 250

Source – Dept. of Bio-technology

The R&D Investment Advantage - research institutions in India

4th largest reservoir of Scientific Manpower

2nd largest in terms of speaking English

3m graduates pa, 115k MSc Chemistry

345k IT, USA 75k

Knowledge super power

Lead by a Scientist as President

Diaspora network (25m across 120 countries)

The world’s largest free nation

US & Europe will not dominate Science, Maths, IT

The Knowledge Advantage

The Knowledge Advantage

The State of European Science Teaching

Source – Royal Society of Chemistry, Policy Bulletin – Winter 2006

“This means that when pupils are in a science laboratory their experience is unsafe, unsatisfactory or uninspiring for 65% of the time. In addition, 13% of science classes are not taught in a laboratory at all”

Laboratories in UK state schools:

Excellent 5%Good 29%Basic/uninspiring 41%Unsafe/unsatisfactory 25%

GDP World growth marginally less in 06 than 05 (+4.3%)

USA expansion at a slower growth than 05 (+3.6%)

Eurozone – expected to perform better than USA

Asia : PRC – slightly slower growth to prevent hard landing Japan – sustain current growth India – increasing growth rate Chindia – 40% population, 8% economy

Largest foreign affairs caucus in US Congress (180)

74,000 demonstrations reported in 2005 in China

The Economic Growth Advantage

$b 2001/2 6.1 2002/3 5.0 2003/4 4.7 2004/5 5.5 2005/6 6.5

- But still only at 10% of PRC levels

The FDI Advantage

$m 2000 110 2001 160 2002 200 2003 250 2004 400 2005 450

Source – Citigroup

Investment by top 15 Indian Domestic Pharmaceutical Companies

Investment by foreign Pharma companies

Microsoft Global Development Centre (GDCI)

Microsoft Global Services (MGSI)

Microsoft Global Technical Support Centre (GTSC)

Microsoft Systems Research (MSRI)

Microsoft India Development Centre (MIDC)

Investment by Microsoft in India

Manufacturing growth ‘90’ - 03

- Chinese manufaturing +12% (90-03) - India manufacturing +6.5%

Scope for improvement of Government Policies

Revitalisation of agriculture

Further privatisation

Further encouragement of R&D

Prosperous middle class 300m strong

The Potential for Improvement Advantage

34 News TV channels. Oldest 13 years old (NDTV)

5000 newspapers, circulation 17m. 12 with 1m copies each

200m daily readers. 21m new daily readers 2003/2005, +14%

50% rural / 50% urban

Indian are hungry for information

Source: World Business 26.2.2006

The Information Advantage

High quality healthcare

Patients from developed & developing countries

Growing Privatisation

International standards

Low Costs: Thailand India - Open heart $14250 $4400 - Hysterectomy $ 2012 $ 571 - Knee surgery $7000 $4500

Better access through airports likely

The Medical Tourism Advantage

0

1000

2000

3000

4000

5000

6000

7000

The Global Generic Pharma companies

Source : Company /Financial reports & presentations

Annual Sales (US$ Millions)

% 1999 13% 2000 17% 2001 20% 2002 30% 2003 35% 2004 40%

Source – Citigroup

*DMF – Drug Master Files

Chindia share of all API* filings

$b 2004 2009

USA 15 27W Europe 9 14Japan 3 4Rest of America 6 9ROW 25 40

Total 58 94

Source: Frost & Sullivan

The Global Generic Market

The Generic Pharma Landscape

Fundamental drivers of growth

High healthcare costs

Total Healthcare Spending, % of GDP

15.0

11.110.1 9.9

8.4 7.9 7.7 7.7

0.0

4.0

8.0

12.0

16.0

UnitedStates

Germany France Canada Italy Japan Spain UK (1)

Source: World Bank, DB Global Pharma Report Aug 2005, OECD Health Data 2005 (1) – 2002, UBS European Pharma Report, Sep 2005

The Generic Pharma Landscape

Fundamental drivers of growth

Demographics

Source: World Bank, DB Global Pharma Report Aug 2005, OECD Health Data 2005 (1) – 2002, UBS European Pharma Report, Sep 2005

15

20

25

30

Europe US

2005 2010 2015 2020 2025

Estimated % of regional population over 60

The Generic Pharma Landscape

Fundamental drivers of growth Patent Expiries

Source : Global Generic Drug Stocks Citigroup Smith Barney, September 2004, IMS Health : MIDAS , MAT June 2005

0

5

10

15

20

2006 2007 2008 2009 2010

Patent expiry, 2006 - 10

$ Bn

Rev

enue

s

The Generic Pharma Landscape

Fundamental drivers of growth

Source : Global Generic Drug Stocks Citigroup Smith Barney, September 2004, IMS Health : MIDAS , MAT June 2005

0% 10% 20% 30% 40%

IT

SP

JA

FR

CA

UK

GE

USA

Total

% Growth Constant $

Generics

11%

20%

30%

-2%

13%

20%

13%

9%

19%

23%

36%

8%

4%

36%

10%

2%

31%

38%

% Share (Volume) % Share (Value)

8%

5%

8%

2%

20%

20%

16%

7%

2%

Ranbaxy Strategic Direction

US $ 1 Bn

US $ 5 Bn

US $ 2 Bn2004

2007

• Amongst the Top 5 generic Companies

• Significant income from proprietary products

2012

• Growth through

- Organic

- Inorganic

Competitive Advantages

Aggressive Home Market

Competitive Advantages

Cost of Manufacture

Active Pharmaceuticals Facility, Mohali Dosage Forms Facility, Paonta Sahib

• Highest number of FDA approved plants outside the US

Competitive Advantages

R&D I

R&D III

R&D II

R&D IV

Cost of Innovation

Potential Downsides

Potential downside – Asian Flu

Potential downside – Oil prices

Source – BLS, ELA, The Conference Board

Potential downside - Infrastructure

Source – FT

Potential downside – Counterfeit products

Origin of fake productsseized in EU in 2004

Rank

1. China2. Thailand3. Hong Kong4. Turkey5. USA

Source: FT

Countries where fake pharma products seized in 2005

Rank

1. Russia2. China3. South Korea4. Peru5. Columbia

Source: PSI

Asia economic strength is returning

Many advantages for India

Some downsides

The feeling in India a turning point has been reached and passed

Summary

“We have all grown up learning the story of the unfinished voyage of Christopher Columbus setting sail to reach India, he discovered America. I now

invite the people of America to complete the voyage

of that great explorer”

Manmohan SinghPrime Minister of India

July 2005.”

Thank You