Glenmark cover28.06.04.qxd

Global.
Research focused.
Integrated.
Glenmark Pharmaceuticals Limited Annual Report 2003-04

Our vision
To emerge as a leading
integrated research-based global
pharmaceutical company.

Financial highlights
Rs/million
Year March 2000 March 2001 March 2002 March 2003 March 2004
Turnover 1453.40 1907.80 2607.50 3336.40 3806.60
Other income 154.50 36.50 60.70 42.80 34.57
PBIDT 308.20 320.30 502.10 645.40 734.88
Interest 10.40 83.20 129.10 106.90 100.57
Depreciation 11.10 51.00 88.20 103.30 108.89
PBT 286.70 186.10 284.80 435.20 525.42
Tax 69.90 15.20 57.00 103.30 105.38
PAT 216.80 170.70 227.80 331.90 420.04
Turnover 2003-04
International
business 12.3%
Active
Pharmaceutical
ingrediants 11.7%
Domestic
formulations
76%

02 Global. Research-focused. Integrated.
10 Highlights, 2003-04
11 Objectives, 2004-05
12 Interview with the CEO
16 Business divisional analysis
18 Domestic formulations
22 Active pharmaceuticals ingredients
26 International operations
Contents
30 Research and development
37 Management’s Discussion and Analysis
43 Risk management
45 Four-year financial summary
47 Ratios
49 Profile of Directors
50 Directors’ Report
61 Report on Corporate Governance
71 Auditor’s Report
74 The financial statements
1

2
Global. Research-focused. Integrated.

Objective
To make the company
more competitive and
valuable in the global
pharmaceutical industry.
Tenure
The long-term
and post-GATT
(post-2005)
scenario.
Driver
A global market
strategy, a strong
research focus and an
integrated business
model for risk-mitigating
delivery.
3

global
Intensifying competition is the
principal characteristic of the
evolving international
pharmaceutical industry.
This is the nature of the industry’s
transition:
• Companies are becoming more
global in their factor and product
market focus even as geographies are
shrinking,
• The competitive landscape in India
is changing with an impending
respect for product patents forcing
companies to look externally for
avenues of growth, and
• A large number of companies are
pursuing product innovation in the
pursuit of long-term competitiveness.
There is an underlying reason why
globalisation is inevitable for
sustainable growth. The large volume
generic molecules going off-patent
are based in the developed markets.
This is a vast segment: the estimated
size of the US market alone is US $
40 billion while Europe and Japan are
several times the size of the Indian
market. Even the developing markets
of Asia, Africa and Latin America are
worth several billion US dollars.
These markets – large or rapidly
growing – don’t just offer the
opportunity of increasing revenue.
They provide the prospect of
enhanced margins and sustainable
profit growth to all those companies
that intend to leverage the low-cost
Indian manufacturing advantage.
The benefit is indeed reciprocal.
Global players stationed in regulated
international markets also need to
explore win-win alliances with Indian
players. For a good reason: they need
to replace their pipeline of patentprotected
drugs and / or build a
basket of off-patent drugs for the
generic market by outsourcing from
low-cost destinations like India. Going
further, they need to prospect for
potential partners in the area of
formulation manufacture, bulk drug
4

production and contract research. Of
late, some of these pharmaceutical
majors have also begun to look
towards India for collaborators in joint
IPR development with the objective
to seize a competitive advantage in
their existing markets at a low cost.
Over the years, Glenmark has
strengthened its proactive
international business strategy to
capitalise on these emerging
opportunities through the following
initiatives:
• Its regulated market strategy is
being addressed through its US and
UK presence with the latter being
viewed as the entry point into the EU
region.
• It has entered into an alliance with
KV Pharmaceuticals to market its
products in the US markets.
• It has developed its brand in the
Caribbean Islands, Central America,
Africa and South East Asia.
• A recent acquisition of Klinger Labs
in Brazil will help the company jumpstart
its initiatives in the Latin
American markets.
• It will continue to build front-end
and customer-facing distribution
systems in the international
geographies where it intends to
market products under its own brand
name.
Glenmark’s global-focused business
model has been directed to fulfil a
number of corporate objectives:
increasing revenue and enhanced
profitability are among them. As
these strategies translate into
revenues, the company will
progressively substitute its
dependence on the Indian geography
as its principal growth driver with a
more diverse international presence,
leading to a sustainable increase in
shareholder value.
5

Research
focused
An ongoing research and development
focus is becoming an increasingly
important driver of success in the
pharmaceutical industry.
A cutting-edge R&D initiative is
helping companies identify niches and
build differentiated products. This is
helping future-proof their presence in
an increasingly competitive global
environment.
To understand the growing
importance of research, it is
important to understand the two
levels at which change is
transpiring in the pharmaceutical
industry:
Firstly, innovation and new product
development are becoming
increasingly important in the creation
of new revenue streams.
Secondly, they are leading to the
creation of IPR-rich products. The
more the patented products with
attractive commercial value, the
stronger the long-term competitive
edge, exactly in line with the
requirements of a post-GATT
environment in which companies will
need to possess commercially-viable
proprietary products and technologies
for success.
In response to these changes,
Glenmark has drawn out a threepronged
proactive R&D initiative that
covers the following:
• New chemical entity (NCE)
research: The company is targeting
the development of new molecules in
the diabetes, obesity and asthma
6

therapeutic segments. It is working
on baskets of targets and families of
new molecules to enhance the
possibility of success and reduce the
lead-time to market. This research has
shown exciting results and some of
the drug candidates are expected to
move into the clinical trial stage in
2004-05.
• Formulations and new drug delivery
systems: The company is extending
the value of its existing formulation
therapies through the research and
development of patentable drug
delivery systems that would help
create strong differentiated products.
The company has a patented
controlled release technology through
which it is planning to commercialise
2-3 products in 2004-05. In addition,
the company also has teams of
research scientists developing
formulations for all its markets.
These teams are housed across its two
research facilities at Sinnar and
Mahape.
• Strong process chemistry research:
The company reverse engineers bulk
drugs for marketing across various
geographies. The company has filed
patents on ten non-infringing
processes till now.
Over time, these R&D initiatives at
Glenmark are expected to translate
into a more valuable product basket,
stronger revenues, enhanced margins
and higher profits.
7

Integrated
Success in a competitive global environment will be
derived from a mature understanding of the diverse
business risks and the creation of a corresponding
risk-mitigated model. Glenmark’s integrated business
model allows it to address several markets and
revenue opportunities in parallel and risk-mitigates
the overall delivery of results.
A committed risk management
approach is integral to Glenmark: its
senior management is engaged in the
identification and mitigation of
business risk in the pursuit of
enhanced shareholder value.
The risk-management at Glenmark is
also comprehensive: it is conducted
from the top of the management
pyramid (de-risking the business
model) to the bottom (de-risking the
individual product baskets). The
approach encompasses an incisive
R&D focus, broad geographic
presence, wider product basket,
superior manufacturing facilities,
quicker regulatory approvals and an
ongoing investment in human
competencies. As a responsible
organisation, the company actively
studies the risk inherent in each of
these diverse aspects, leading to the
formulation of counter-strategies.
The integrated business model of the
company represents its principal risk
management initiative, leading to a
lower cost structure and a direct
control over an increasing number of
points in the value-chain. The
integration translates into revenues
being derived from every point in this
value-chain: from potential licensing
opportunities for new drugs to a
growing presence as a bulk supplier
and formulations player in multiple
markets. Over time, the various
8

constituents of the integration have
dovetailed into an effective riskmitigation
structure:
• The quality demands of the
international markets are being targeted
through world-class manufacturing
facilities that will bear scrutiny under
strict regulated market standards.
• A primary dependence on the
Indian market is being gradually
rationalised (from 90 per cent of
turnover in 2002 to a projected 60 per
cent by 2005).
• There is a concentrated focus on
strengthening the company’s product
basket with new value-added
therapies and product introductions
across more geographies.
• Enhanced quality systems and a
strong regulatory focus are
accelerating product introduction in
various markets and accelerating
DMF and ANDA filings in the
developed markets like the US,
driving revenues.
• The recruitment of local
management in several of its key
markets has resulted in a sound
understanding of the local market
conditions, regulatory requirements
and legal system.
This active management of risk,
combined with rapid revenue
and profit growth, is expected to
enhance shareholder value over the
foreseeable future.
9

Highlights, 2003-04
Revenue 2003-04
11.7
12.3
76
Exports
India, formulations
India, APIs
• Overall revenue and bottom line
grew 14.09 and 26.56 per cent
respectively.
• NCE research gained significant
momentum with positive preclinical
results for two lead
molecules in the Asthma and
Diabetes areas.
• The company entered into a tieup
with Quintiles, a global CRO, to
take its Asthma lead molecule into
clinical trials in UK in July 2004.
• Domestic formulations exhibited
a volume and value growth of 16
per cent and 7.9 per cent
respectively.
• Formulation exports to semiregulated
markets registered
strong value growth and
operations were expanded to
cover 59 semi-regulated country
markets.
• The USA subsidiary entered into a
landmark development and
marketing arrangement for eight
products with KV Pharmaceuticals
in the US, valued at over USD
80 million.
• Steps were initiated to set up
operations in UK and Philippines.
• Steps were initiated to file
formulation dossiers (ANDAs) in the
US in 2004-05.
• A new formulations plant was
commissioned at Goa to meet the
stringent USFDA standards.
• The company’s Brazilian subsidiary
acquired Laboratories Klinger in
Brazil that includes a manufacturing
plant with ANVISA approval.
• Four DMFs were filed (till April
2004).
• The API infrastructure was
strengthened with the expansion
and modernisation at Ankleshwar
and the acquisition of a plant at
Solapur.
• The company tied-up with Apotex
and Eon Labs for the supply of
APIs to the regulated markets.
• The IP portfolio was
strengthened and the company
built a basket of 12 patents on NCE
molecules and 10 non-infringing
process patents.
10

Objectives, 2004-05
• Revenue growth of approximately 35 per cent and a net
profit growth of 80 per cent over 2003-04.
• Commencing commercial operations at the new Goa
facility and obtaining USFDA approval.
• Obtaining USFDA approvals for the Ankhleshwar API
facility and 100 per cent growth in API revenues.
• Developing a robust front-end sales and marketing
network for marketing own-label generics in the USA and
initiating business in countries of the European Union.
Projected 2004-05
35
• Completing Phase I clinical studies for the Asthma lead
molecule and initiating Phase I for the Diabetes lead
molecule.
• An enhanced presence in the semi-regulated markets
(including Latin America) and a 100 per cent growth in
revenues.
• Registering 10-12 ANDAs and 8-10 DMFs.
• The launch of strong molecules in the India formulations
business and the strengthening of flagship brands.
8
Exports
India Formulation
API India
57
11

Interview with the
CEO and MD
“A number of initiatives
that we embarked upon in
2002-03 gained
momentum in 2003-04.”
Glenn Saldanha, Managing Director and
CEO, reviews the company’s
performance in 2003-04.
12

Q
HOW WOULD YOU
RATE THE COMPANY’S
PERFORMANCE IN 2003-04?
The financial year under review was a
favourable one for Glenmark not only
because we reported an all-round
increase in our numbers, but because
we strengthened the competitive
ability of the business for the longterm.
A number of initiatives that we
embarked upon in 2002-03 gained
momentum in 2003-04. For instance,
the year represented a step forward
for our international business which
was manifested in our export revenue
growth in excess of 50 per cent. Our
USA subsidiary commenced
operations and we signed a landmark
contract with KV Pharmaceuticals to
market our products in the US. Our
sales in the African, South Asian,
Russian, CIS and Latin American
markets gained momentum. A wider
presence of offices in UK, Philippines,
Malayasia and Vietnam helped us
entrench our international presence.
What was particularly heartening was
that even as we were increasingly
global-focused, our domestic
formulations business grew by about
7.9 percent in value terms,
outperforming the sluggish growth of
the Indian pharmaceutical industry.
The volume growth was even higher
at about 16 per cent. The strong
growth across our businesses helped
our bottom-line grow by 26.56 per
cent to Rs. 420.04 million in 2003-04.
To strengthen our vision of emerging
as an integrated global player, we
commissioned a new USFDAapprovable
facility in addition to the
significant completion of expansions
and upgrades at our other
manufacturing facilities. The benefits
of these activities will be visible over
the foreseeable future.
Q
WHAT WERE THE OTHER
ACHIEVEMENTS?
We embarked on a number of
initiatives to migrate up the value
chain. For instance, we
commissioned a state-of-art
manufacturing facility at Goa to cater
to the stringent regulatory
requirements of the developed
markets. We completed various
modules of expansion and upgrade
programmes at our other
manufacturing facilities. We filed
three DMFs in 2003-04 and have
already filed an additional DMF in
April 2004. We have also filed patents
through non-infringing processes for
manufacturing ten bulk drugs. We are
currently working on 8-10 more DMFs
to be filed during 2004-2005. We
introduced new drugs to counter
declining prices in the Indian market
with enhanced revenues. We
consolidated our domestic formulation
business by strengthening key brands
and deepening our product basket. In
the API business, we enhanced the
capacity of our bulk drug
manufacturing facility at Ankleshwar
(acquired in 2002-03 from GSK
Pharma) to address the growing list of
clients in our developed and
developing markets. We also
completed upgrades at the facility to
comply with USFDA requirements.
Several new products were
introduced to strengthen our API
product and revenue baskets.
Q
HOW DID THE
MANAGEMENT
STRENGTHEN THE
COMPANY’S R&D THRUST?
Glenmark continued to focus on two
disease targets – for Asthma/COPD
and Diabetes. The new drug research
initiative has yielded extremely
promising results: we are on track to
enter Phase I clinical trials in the UK
with two new chemical entities
(NCEs) in 2004-05, one in each
therapeutic segment. A tie-up is in
place with a global CRO, Quintiles to
take our Asthma molecule into
Phase I clinical trials in the UK by July
2004. Even though the molecules will
be commercialised only over the next
five years, subject to their success in
the clinical trials, the company will be
able to outlicense or co-develop them
with a global pharmaceutical major
immediately after the early clinical
trials have been completed. The
company has already filed over 12
patents, capitalising on the work done
by the new drug research team.
It would be relevant to explain how
our R&D strategy will de-risk the
13

Risk vs. Reward Value Chain
R&D Investments
Reward
New Drugs
New Drug Research
Glenmark's
Evolution
Regulated
Markets
Semi-regulated Markets
Branded Generics
Specialty
Products
Regulated
Markets
Generics
Novel Delivery Systems
Formulation Development
And
API Process Reverse
Engineering
Semi-regulated
Markets APIs
Risk
organisation: we are concentrating on
more than one therapeutic segment,
multiple targets and a pipeline of drug
compounds with a view to strengthen
our success prospects. We are
actively pursuing research in the area
of novel drug delivery systems
(NDDS) and the ownership of several
patents will constitute an integral part
of our endeavour to differentiate our
products across the domestic and
international markets. Separate teams
are working on formulation
development and API process
research for launch across our various
markets. Therefore, our research
efforts span the entire risk-reward
spectrum in the pharmaceutical chain
and will drive growth as Glenmark
evolves along the spectrum.
Q
HOW DID THE COMPANY
RESPOND TO THE SLOW
DOWN IN THE INDIAN
FORMULATIONS BUSINESS?
It would be relevant to understand
the reasons behind a slowdown in the
Indian formulations business:
• The Indian market is extremely
competitive with several ‘me-too’
launches in each segment.
• The market has seen severe price
competition; four key products of
Glenmark witnessed a severe price
erosion owing to competitive
pressures.
• Opportunities for launching new
products are drying up as India
prepares to usher in a regime with a
greater respect for product patents in
2005.
As a result, while the Indian market
grew by approximately 8 per cent in
volume terms, it translated into a
meagre 5 per cent growth in value.
We expect this sluggish value growth
to sustain for the next 2-3 years as
companies expand their therapeutic
segment coverage in response to the
challenge of 2005 and diminishing
new product options, thereby
increasing competition.
As a future-focused organisation,
Glenmark has followed a multipronged
strategy to counter this
impact. Aggressive new product
development is one: we have focused
on the rapid launch of powerful
products like Etoricoxib, Tacrolimus
and Rosuvastatin to replace older
therapies and we are also constantly
evaluating newer/under-leveraged
therapeutic segments to launch new
products. Existing products are seeing
value-addition in the form of
combination therapies and new
delivery platforms. We are confident
that these initiatives will translate into
robust growth across the foreseeable
future.
Concurrent with this, we are
strengthening our existing brands and
marketing divisions and also helping
our sales forces specialise with the
objective of maximising our presence.
We are optimistic that this approach
will create a superior product basket
14

einforced by a stronger market
presence to help us outperform
industry growth consistently across
the long-term.
Q
HOW DOES THE COMPANY
EXPECT TO STRENGTHEN
ITS PRESENCE IN THE API
BUSINESS?
Our presence in the API business will
be strengthened through an ongoing
investment in our manufacturing
facilities, research capabilities and
expansion into newer markets. For
instance, we are expanding and
upgrading our plants for API
manufacture; we are strengthening
our in-house research team with a
view to engineer drugs and accelerate
their introduction; we are filing DMFs
in the US and EU to supply APIs to
companies in these markets.
At Glenmark, we view the API
business from three perspectives.
Firstly, API manufacture serves as a
backward integration in our
formulation-centric value-chain, which
helps us rationalise cost and become
increasingly competitive. Secondly,
API products are not intended only for
captive use but are marketed to users
in India and abroad so that they
represent a standalone revenue-driven
business for the company. Thirdly, the
company expects to enter into
partnerships in its API business with
manufacturers of generic formulations
in the developed markets.
Q
WHAT ARE THE
SIGNIFICANT STRENGTHS
OF THE COMPANY?
Our responsiveness to the external
environment, which is reflected in our
ability to understand the transitions in
international markets and implement
a corresponding business strategy
with speed. This has actually
transpired: a few years ago, we were
a formulations company but in
response to a shift in the global
dynamics, we are today adequately
diversified with a growing presence in
APIs, a focused and balanced R&D
initiative supported by a strong, low
cost manufacturing base.
This response has also been evident
in our India-centric business: for
instance, when we noticed the first
signs of increasing competition,
sluggish growth and margin erosion in
the domestic market, we migrated
towards new products, value-added
segments and an ongoing cost
rationalisation. I am pleased that
despite a challenging marketplace, we
reported attractive financial growth
and enhanced shareholder value in
2003-04.
Q
WHAT ARE THE
SIGNIFICANT
OPPORTUNITIES AHEAD OF
THE COMPANY?
The answer is quite simple – a deeper
penetration of the developing and
developed international markets. For
instance, the developed market
opportunity lies largely in the generic
segment in US and the European
Union. The size of this segment in
those geographies has been
estimated at several US billion dollars,
offering significant opportunities for
low cost manufacturers from
countries such as India. As these
markets commoditise, the low cost
advantage will provide us with staying
power and profitability.
We expect to address a large
opportunity in the developing markets
through generic products and branded
products. For instance, we will invest
in a marketing infrastructure across
several important developed and
developing markets so that we may
strengthen financial growth, brand
recognition and enhanced margins.
Glenmark faces another significant
opportunity: bringing successful new
chemical entities to markets as patent
protected drugs in combination with
an international partner.
Q
HOW DOES THE COMPANY
EXPECT TO SIGNIFICANTLY
ENHANCE SHAREHOLDER VALUE?
In my mind, value is emerging from
our brand performance, strong R&D
thrust, global diversification and a
robust cash flow. Sustainability will
come from our efforts to build a
deeper presence in our chosen
therapeutic segments as well as an
ongoing expansion in newer
segments and markets. It is the
combination of these two approaches
that will help us create a sustainable
and higher margin business. We are
of the opinion that the GATT
challenge of 2005 is not going to pose
a threat until 2008-10 by which time
our NCE strategy will start delivering
results. As a result, our various
initiatives, our integration and our
active risk management will not only
help us grow our revenues but also
risk-mitigate our profits, resulting in
superior returns to our shareholders.
15

16
Business divisional analysis

Over the years, Glenmark has responded to an increasing brand clutter in a
competitive marketplace as well as the challenge of addressing emerging
opportunities by segregating its business into three groups with a distinctive
product-market focus. In 2003-04, these groups comprised:
Domestic market formulations:
This group handles all formulation
sales within India.
Active pharmaceutical
ingredients (APIs):
This group caters to the growing API
needs within the organisation and
diverse customer needs in the Indian
and international geographies. It comarkets
value-added formulations
along with APIs to other
pharmaceutical companies.
International operations:
This group focuses on sales to the
semi-regulated/developing country
markets. It also comprises
subsidiaries that are focussed on the
developed markets.
Glenmark Pharmaceuticals Limited
Domestic market
formulations – 76 per
cent of revenues
Active Pharmaceutical
Ingredients – 11.7 per
cent of revenues
International operations
– 12.3 per cent of
revenues
A value-added business model
Over the years, Glenmark has created
an integrated value-added business
model. This model extends from API
development at one end to the
marketing of formulations in India and
several international markets at the
other.
This business model is leveraging on
the opportunities by climbing a valuepyramid
spanning API, Generics and
Specialities. As each element within
this pyramid has been prudently
monetised across an increasing
number of markets, the company has
succeeded in progressively improving
performance and potential growth
targets.
Over the last four years, Glenmark
has also succeeded in transferring its
rich and longstanding Indian
experience to semi-regulated
markets with nearly similar
demographic and regulatory profiles:
Africa, South East Asia and Latin
America. Besides, the company has
created subsidiaries to enter the
high-margin developed markets of
USA and European Union, a
decisive future-proofing initiative.
Recently the company also
acquired a company in Brazil
that will help strengthen
presence in the Latin American
markets.
The following section reviews the
operations and the growth strategy of
each of the company’s marketfocussed
divisions.
17

Group
Domestic
formulations
18

GLENMARK’S DOMESTIC
FORMULATIONS BUSINESS IS ITS
LARGEST REVENUE GENERATOR:
WITH REVENUES OF RS 2892.0
MILLION IN 2003-04 (RS 2743.97
MILLION IN 2002-03). While the
Indian pharmaceutical industry grew
at about 5 per cent, the company’s
domestic formulation revenues grew
7.9 per cent by value and 16 per cent
by volume. Glenmark countered a
decline in realisations through the
introduction of new and improved
drugs.
THERAPEUTIC SEGMENTS
The company has segregated its
formulation business into three
divisions - Glenmark, Gracewell and
Healtheon - to strengthen its focus on
defined therapeutic segments as well
as associated practitioners/specialists.
Glenmark division: It is the
oldest division focused on
gynaecology, physicians and
orthopaedics, handling several
flagship brands of the company.
Gracewell division: Focused on
the dermatology, pain, antibiotics and
respiratory segments.
Healtheon division: This is the
newest division focused on lifestylerelated
segments like diabetes,
cardiovascular and lipid-lowering
drugs.
While dermatology, internal medicine
and paediatrics accounted for the
largest revenue in 2003-04, the
company is also present in several
other segments that present
significant growth opportunities.
Therapeutic segment share in revenues
Per cent
Therapeutic segment 2000 2001 2002 2003 2004
Dermatological 40 36 39 35 33.0
Gynaecological 10 9 10 6 6.4
Internal medicine 24 25 25 26 20.5
Paediatric 21 25 18 19 17.9
ENT 5 4 4 3 3.4
Diabetics 0 1 4 7 7.1
Pain Management 0 0 0 5 9.7
Cardiovascular 0 0 0 0 2.0
Source : MAT ORG Data
Dermatological
Gynaecological
Internal medicine
Paediatric
ENT
Diabetics
Pain Management
Cardiovascular
9.7 2.0
7.1
3.4
17.9
33
6.4
20.5
PERFORMANCE HIGHLIGHTS,
2003-04
• The formulations group reported a
value growth of 7.9 per cent,
outperforming the Indian market
growth rate of five per cent.
• The volume growth of the
formulations group was higher, but its
impact was stunted by a sharp price
decline.
• The domestic formulations business
was ranked number one in its
operating market (comprising
therapeutic segments that
account for 95 per cent of revenues –
as per ORG-MAT March 2004
figures).
• The group established its
dominance in new segments like pain
management through products like
Valedecoxib and brand extensions
(rated by ORG as the best product
launch in the last two years in the
IPM) and also improved its position in
relatively new segments like
diabetology.
• The group strengthened its
presence in the dermatology segment
and launched new molecules in the
anti-platelet, anti-hypertensive and
lipid-lowering segments.
• The group strengthened its field
force to more than 900 market
representatives.
• An improved planning and design of
marketing activities helped rationalise
the group’s marketing spend.
19

DIVISIONAL STRATEGY
Glenmark’s attractive growth in the formulations segment
is a result of the sustained introduction of improved drugs
and an entry into new growth segments.
Focus: Even as the group is focused on enhancing its
presence in well-researched therapeutic segments, there is
a continuous endeavour to expand to newer segments
with attractive potential. This has lead to a gradual
diversification of the company’s therapeutic basket over
the last few years. The divisional approach promotes this
focus and helps Glenmark’s domestic formulation business
drive rapid recognition in a competitive market.
Domestic formulations
Diversified therapeutic segment portfolio
Internal medicine
Respiratory
Dermatology
Gynaecology
49
5
21
25
33
26
6
7
18
10
Respiratory
Pain management
Diabetes
Gynaecology
Dermatology
Int. medicine
Source : MAT ORG Data
Establishing first-mover advantage: At the company,
the focus is not just in establishing a therapeutic presence;
it is to be the first to launch latest generation drugs and
capture a first-mover’s advantage in these segments.
Some of these first-to-launch products include Telmesartan
(anti-hypertensives), Rosuvastatin, Ezetimibe (cholesterol
lowering), Tacrolimus, Tazoretene and Cilastazol (lipidlowering).
Replacing older therapies: Glenmark also focuses on
the replacement of older and inferior molecules with newer
therapies and combination drugs, a strategy more
profitable than the launch of me-too brands. These new
molecules/combination therapies have redefined the
dominant therapy in their segments and led to an
increase in sales.
Market size of molecules launched by Glenmark
Molecules FY 2004 FY 2003
Rs. Mn Growth per cent Rs. Mn
Valdecoxib oral Solids 85.9 219.6 26.9
Levofloxacin 56.3 40.0 40.2
Esomeprazole 31.4 19.5 26.3
Rosuvastatin 5.8 NA 0.0
Note: ORG Marg MAT March data
20

The company’s revenues in 2003-04 from new molecules (launched in the preceding two years in each case) are detailed
in the table below:
Revenue contribution from new products (

Group
Active
pharmaceutical
ingredients
22

ACTIVE PHARMACEUTICAL
INGREDIENTS, WHICH ARE USED
AS RAW MATERIAL IN THE
MANUFACTURE OF
FORMULATIONS, HAVE OFTEN
BEEN REFERRED AS THE BUILDING
BLOCKS IN THE PHARMACEUTICAL
INDUSTRY.
Glenmark’s API business was
developed four years ago in keeping
with its vision of emerging as an
integrated pharmaceutical player. As a
result, the company’s manufacture of
API not only serves its captive
requirement but is also marketed to
third parties within India and abroad.
Glenmark’s non-captive API
operations recorded revenues of
Rs 445.3 million in 2003-04 compared
with Rs 286.1 million in 2002-03, a
growth of 55.6 per cent. The
company is leveraging its in-house
capability to enhance value in this
business over the foreseeable future.
Therapeutic segment contribution
Per cent
Therapeutic segment Per cent of Sales in 2003-04
Hypertensives 39
Gastroenterology 21
Pain management 20
Diabetology 6
Dermatology 5
Anti-Viral 3
Anti-Depressant 1
Other 5
Hypertensives
Gastroenterology
Pain management
Diabetology
Dermatology
Anti-Viral
Anti-Depressant
Other
20
31
6
3
5 1 5
39
HIGHLIGHTS, 2003-04
• The company upgraded and
increased the capacity of the API
facility acquired from GSK to address
the growing needs of customers in
the developed and developing
markets. The plant, which is CGMP
and WHO-compliant, is expected to
be awarded a USFDA certification in
the first quarter of 2004-05.
• The company has filed 4 DMFs by
April 2004 and is working on another 8-
10 DMFs to be launched in 2004-05.
• The company’s co-marketing
arrangements contributed 30 per cent
of revenues with a list of leading
pharmaceutical clients.
• 10 new products were introduced
across four therapeutic segments
including Dermatology,
Cardiovascular, Pain Management and
CNS segments.
• New markets for API exports were
identified and pursued with product
registrations. A significant contribution
to sales turnover came from the Asia
Pacific, South America, Middle East
and Canada.
• Several patents were filed on
non-infringing processes for APIs that
have been developed by the research
team.
THE API ADVANTAGE
As several products come to the end
of their patent-protected lifecycle in
the regulated markets, generic
opportunities and API growth
potential will increase manifold.
The India advantage is three-fold: a
significant wage cost advantage,
high-quality certified manufacturing
facilities and strong process
chemistry skills.
23

Strategically, a backward integration into the synthesis and
manufacture of APIs helps manufacturers in three ways:
• The potential to diversify revenues and profits by
addressing the fast-growing API demand.
• A significant cost and pricing advantage in the
manufacture of formulations especially when captively
manufactured APIs are used.
• An ability to rapidly launch new formulations due to the
captive availability of required APIs, resulting in a firstmover’s
advantage and higher-than-normal initial revenues.
DIVISIONAL GROWTH STRATEGY
Even though Glenmark commenced the manufacture of
APIs several years after it entered the production of
formulations, it has built significant strengths over the last
few years. These comprise:
• Economies of scale.
• An ability to manufacture complex multi-step molecules
and build value-added therapies for higher and sustainable
growth.
• An ability to leverage non-infringing processes and
manufacture quality generic products that are delivered on
time and at competitive prices in target markets.
• A comprehensive understanding of regulatory
requirements across various geographies.
Over the years, the company strengthened its API
presence through a four-pronged strategy:
The exploration of opportunities in the growing
lifestyle segment: As lifestyles have become increasingly
sedentary and food habits have trended towards the subnutritious,
new ailments with long-standing relevance have
emerged. As a future-directed organisation, Glenmark
focuses on the growing opportunities offered by this
lifestyle segment (even in formulations and international
operations).
Rapid launch of new molecules: To counter the
industry feature of shortening product life cycles and
declining realisations, Glenmark introduces new
molecules with an increasing frequency to climb the valuechain.
Over the years, new product launches have
contributed to an increasing proportion of revenue. The
accelerated launch of new products across diverse
therapeutic groups has also served to effectively de-risk
the API business from price declines across its existing
basket of products.
Building strong process research capabilities: The
company’s API division possesses strong, dedicated
process research capabilities across its six laboratories.
24

The accelerated launch of new
products across diverse
therapeutic groups has also
served to effectively de-risk the
API business from price
declines across its existing
basket of products.
These laboratories are complete with state-of-the-art
equipment and analytical tools at the company’s R&D
centre at Mahape, New Mumbai. The laboratories are
manned by a qualified 50 member team of scientists and
process chemists. The research strength has also been
reinforced by a sophisticated information centre that
provides relevant scientific data that guides the company in
the development of a pipeline of high opportunity drugs.
The research facilities specialise in chiral chemistry, heterocyclic
chemistry, resolution chemistry and carbohydrate
chemistry. The research team is currently working on 18
projects and has commercialised 35 products over the last
three years. Its capabilities are reflected in the fact that
product development time and cost are significantly lower
compared to competition. The company has filed patents
on non-infringing processes for ten products and has also
filed three DMFs in 2003-04. A fourth DMF has been filed
in April 2004.
Low cost, high quality manufacturing: The division
has three plants – one at Kurkumbh, a recently acquired
plant at Solapur and another at Ankhleshwar. Ankhleshwar
was acquired from GlaxoSmithKline and has been
upgraded to comply with USFDA certification
requirements. The plant’s 75 KL reaction volume capability
is best suited for the launch of new products and also
provide a good platform for versatile chemical reactions
such as Friedel Craft, Grignard and Suzuki.
OUTLOOK
The API division expects to drive business revenue growth
(non-captive) at about 100 per cent in 2004-05 through the
following initiatives:
• A tie-up with formulators in various countries including
India. The division will also market value-added formulation
products in the domestic market through co-marketing
arrangements. The target number of products on offer are
expected to grow from the current 35 to 53.
• The development of 8-10 Drug Master Files (DMFs) for
the US market to stimulate the API and generic formulation
businesses.
• A focus on the Asia-Pacific, South America, Eastern
Europe and parts of Western Europe.
• Additional product launches for the domestic market to
serve the anti-hypertensive, anti-diabetes and internal
medicine segments.
• A capacity upgrade for the Ankleshwar facility.
END NOTE
Glenmark will continue to focus on strengthening its API
operations and transplanting its experience into the
advanced generic markets of USA and Europe.
25

Group
International
operations
26

The company’s US subsidiary
concluded a landmark deal
with KV Pharmaceuticals, a
mid-cap US speciality and
generics firm, to develop and
market generics.
THIS FASTEST GROWING SEGMENT
IN GLENMARK CURRENTLY
OPERATES IN THE REGULATED
MARKETS ALONG WITH THE
RAPIDLY GROWING MARKETS OF
ASIA, AFRICA, CARIBBEAN
ISLANDS, LATIN AMERICA, RUSSIA
AND THE CIS STATES. THE
POTENTIAL IS REFLECTED IN THE
FACT THAT THE DIVISION’S
TURNOVER OF RS. 469.3 MILLION
IS GROWING AT MORE THAN 50
PER CENT PER ANNUM.
PERFORMANCE HIGHLIGHTS,
2003-04
• The company’s international
operations recorded revenues of
Rs. 469.3 million in 2003-04, a growth
of 58 per cent over the previous year
(Rs 296.9 million in 2002-03) at
margins that were significantly higher
than the rest of the company’s
businesses.
• Revenues from Africa more than
doubled, Asian revenues were close
to double and the Russian and CIS
revenues grew 35 per cent.
• The company expanded operations
to cover 59 semi-regulated country
markets by March 2004.
• Four countries were added to the
portfolio in 2004.
• The marketing and sales network
was expanded to several countries
and the company appointed
country managers across the semiregulated
markets to directly market
the Glenmark brand and its
formulations.
• The company’s US subsidiary
concluded a landmark deal with KV
Pharmaceuticals, a mid-cap US
speciality and generics firm to
develop and market generics.
• A subsidiary was registered in UK to
explore opportunities in the European
Union.
REGULATED MARKETS: THE US
INITIATIVE
During 2003-04, Glenmark
Pharmaceutical Inc., the company’s
US subsidiary, strengthened its
management team with the objective
to accelerate the filing of ANDAs and
market finished formulations in the
US market.
This initiative was as timely as it is
critical: the generic opportunity
represents a significant revenue
potential for Glenmark.
Apart from various other initiatives,
the US subsidiary signed a landmark
agreement with KV Pharmaceuticals
Inc, a US $ 1.4 billion marketcapitalisation
pharmaceutical
company. Under the agreement, the
two companies share responsibilities
for the development, registration,
supply and marketing of eight
identified drugs that are expected to
go off-patent in the near future.
27

The company is also
building its own sales and
marketing team to offer
products to distributors and
stockists in the US under
the Glenmark label.
Glenmark will be entitled to significant upfront and
milestone payments in the development / registration
stages and royalties from sales within US. The agreement
has the option to cover an additional ten generic products
and three branded products, leveraging the patented
platform technologies developed by Glenmark. The
additional products would be jointly identified by Glenmark
and KV Pharmaceuticals at a later date.
The products to feature in the KV Pharmaceuticals Inc.
agreement will span five therapeutic segments including
Cardiovascular, Central Nervous System, Dermatology,
Immunology and Diabetology with their launch dates
spanning the next three years.
The company is also building its own sales and marketing
team to offer products to distributors and stockists in the
US under the Glenmark label. In the long run, the
company’s wider product basket will be leveraged to build
a robust product pipeline, helping build the company’s own
franchise in the US generic drugs business. The company
has already identified 15 products for which ANDAs will be
filed over the next three years; of these the company is in
an advanced stage of development for eight products.
Some of these products will also leverage patentprotected
New Drug Delivery Systems that have been
developed through in-house research.
Glenmark enjoys a distinct competitive edge that will drive
its success in the US markets:
• Its status as a speciality company with deep skills in select
therapeutic segments will help it leverage opportunities in
those areas (dermatology is an example) better.
• The strong local management team enjoys a prior
experience in establishing the US operations for other
Indian pharmaceutical companies; this will ensure speedy
execution.
• Glenmark’s vertical integration will enable it to serve the
US markets with APIs and formulations at competitive
costs.
• The company’s strong generic and formulation
development competencies will translate into the
rapid deployment of target products and a stronger
revenue growth.
28

Glenmark Pharmaceuticals’ wholly owned Brazilian
subsidiary Glenmark Farmaceutica Ltda. acquired a
private pharmaceutical Brazilian company called
‘Laboratorios Klinger’ in the last quarter of 2003-04.
Klinger has 21 products under registration in Brazil
spanning several therapeutic segments including some
OTC products. The company has a workforce of 176
employees including 91 market representatives. Apart
from offering an entry route into the competitive
Brazilian market, the acquisition will also allow
Glenmark to address other Latin American markets.
Apart from continuing the lucrative products in
Klinger’s portfolio, Glenmark will also consider
transferring several products from its global portfolio to
Brazil. Significant synergies with Glenmark in product
development, bulk sourcing and local formulation
manufacture will drive value extraction in the Latin
American market.
Glenmark’s revenues from the US market will commence
in 2005 as a part of the KV deal and additional revenues
from marketing products under the Glenmark label are
expected to commence by 2006.
SEMI-REGULATED/DEVELOPING MARKETS
Glenmark has focused on select markets for four years,
building a significant presence and brand image in them.
These markets, at an early stage of evolution, are
served by an earlier generation of drugs though this is
undergoing rapid change in recent years. Since a number
of these markets are price-sensitive, they offer
significant generic opportunities for low-cost
players like Glenmark to fill therapy gaps and capture
market share.
Glenmark’s international expansion has benefited from an
ongoing knowledge management: it has leveraged the
experience gained in one geography to enter another,
thereby shrinking the time-to-market and rapidly
establishing a strong market presence. Glenmark’s edge in
the semi-regulated markets has been derived from its
reputation as a responsible manufacturer with a visible
long-term commitment: it has not relied on revenue
building from a one-time opportunistic perspective but
invested in a sustainable brand and marketing presence in
its focus markets.
The company’s international presence has been
reinforced through a judicious mix of strategies, including
the engagement of local sales teams to promote its
products in these markets. The company promotes its
brands directly to the healthcare fraternity, building a
strong franchise and generating a consequent
demand-pull. Its strong and deep product pipeline
also fills gaps in existing therapies in the markets of its
presence. It is the company’s ability to adapt to
varying international conditions that has
enhanced its image as a customer-centric pharmaceutical
player.
The share of revenue from these markets as a proportion
of Glenmark’s revenue is expected to increase significantly
over the near future. The company expects to achieve over
100 per cent growth (including Latin America) in revenues
from semi-regulated markets in 2004-05.
29

30
Research and
development

HISTORICALLY THE INDIAN
PHARMACEUTICAL INDUSTRY
POSSESSED DEEP SYNTHETIC AND
PROCESS CHEMISTRY
CAPABILITIES.
The origin of this limited focus was
derived from India’s longstanding
process patent regime, which allowed
companies to reverse-engineer and
sell in India patent-protected drugs of
the regulated markets. In view of the
assured protection and easy access to
cutting-edge research, Indian
companies did not make investments
in costly original research with any
seriousness.
A decision to respect product patents
from 2005 will however change the
scenario. As reverse-engineering will
be statutorily banned, the initial
hesitation in research investments is
leading to a mild optimism: there is a
growing realisation that India presents
significant cost and skill advantages
for the original research required to
build IPR assets. A combination of the
need to differentiate products in
target markets, respect product
patents and leverage India’s research
strengths have translated into a
growing investment in IPR
development.
In view of this, a number of Indian
companies, including Glenmark, are
building capabilities in original
research, targeting new chemical
entities (patentable drug options) and
novel drug delivery systems.
NEW CHEMICAL ENTITIES
(NCEs)
New chemical entities represent the
highest end of the research value
chain; typically, they also offer the
highest reward. A successful NCE,
following the relevant approvals, can
be marketed with a 12-14 year
product exclusivity period during
which it can recover its investment a
number of times over. Their collective
revenue potential is reflected in the
fact that blockbuster drugs such as
Viagra and Statins, among others,
enjoy annual revenues in excess of
US$ 5-6 billion, a little under the size
of the entire Indian pharmaceutical
market.
While the opportunity is significant,
the development of NCEs involves a
multitude of skill sets, a development
time of 6-8 years and considerable
risk. NCE research focuses on
developing chemicals / molecules that
can selectively address molecular
targets of certain specific diseases
and provide a cure with minimal side
effects. As such, successful NCE
research has almost become the
prerogative of large and well-funded
MNCs and institutions, supported by
heavy research budgets. Indian firms
do not invest in the target
identification exercise; instead, they
adopt an approach called ‘analogue
research’, which entails working on
certain pre-identified targets for
specific diseases to develop
molecules that alter the target’s
mechanism in the diseased person.
Analogue NCE research is timeconsuming,
risky and expensive. The
entire process can span 6-8 years
before a drug can be taken to the
market and it runs the risk of the
molecule needing to be dropped at
any intervening stage for its inability
to clear trials.
THE LICENSING OPPORTUNITY
The Indian advantage is not limited to
manufacturing; the country offers an
arbitrage opportunity even when it
comes to the cost of intellectual
capital and facility overheads. The
nation also possesses a deep
inventory of requisite competencies
required to engage in original
research. In the area of drug
discovery, for instance, India enjoys a
staggering 80-90 per cent cost
advantage compared to developed
countries like the US. Additionally, as
global majors intensify their research
activities to fill-in a fast depleting
product pipeline, their failure rates are
expected to increase, widening this
differential further.
However, Indian companies face a
resource crunch to fund even a tenth
of the absolute original research cost
of USD 800-1000 million. Besides,
regulators in developed countries are
reluctant to accept Indian clinical trial
data. As a result, the Indian research
industry is inadequately equipped to
sustain the time and cost implications
of a start-to-finish research model.
In the light of the high research costs,
an alternative collaborative route in
NCE research is being increasingly
favoured. In this arrangement, the
lead compounds are licensed to global
majors. A successful drug candidate
for such a licensing deal falls within
certain categories:
• Sunrise therapies: Sunrise sectors
are those therapy areas that are new
and retain the promise of generating
high revenues.
31

• Niche therapies: Niche areas are
more valuable for Indian companies
who aim to build partnerships and
enter into co-marketing arrangements
with mid-cap and smaller overseas
firms.
• Chronic therapies: Certain ailments
like diabetes and cardio-vascular
ailments are chronic diseases.
Patients are prescribed the lifelong
use of drugs that, in turn, present
higher value to potential license
partners due to a higher sustainability
of sales.
GLENMARK’S VISION
Along with process chemistry and
reverse-engineering generics, original
research represents a key pillar in
Glenmark’s business vision. Glenmark
judiciously invests cash flows from
the generic business into generating
long-term intellectual property assets
through its research initiatives.
Glenmark recognises the value of
investing in original research,
generating valuable IPR assets that
will sustain its revenues and earnings
in a post-GATT, product patent
regime. These IPR assets will also
allow the company to establish its
brand name in regulated overseas
markets and thereby become a truly
global company.
GLENMARK NCE R&D
HIGHLIGHTS
In view of the growing importance of
captive access to cutting-edge
research, the company embarked on
investing in a state-of-the-art R&D
infrastructure and competencies
about four years ago. The research
division has yielded dramatic results
in a short period, justifying the
investments.
Considerable progress has been
made in developing a drug targeting
the asthma/COPD segment; the
company is now tying up with
international contract research labs to
commence early clinical trials in July
2004. The company has also
succeeded in developing a set of lead
compounds that are in the late
pre-clinical stage of the diabetes
therapy areas.
The selection of the therapeutic areas
for research was based on a distinct
ground reality:
• Global growth potential: The
incidence of asthma/COPD, diabetes
and obesity are growing rapidly;
collectively their incidence is
expected to be more than USD 44
billion by 2007.
• Potential for pioneering research:
Since the existing therapies for these
ailments have undesirable sideeffects,
they offer attractive
replacement opportunities. For
example, steroids used currently in
treating asthma are non-selective and
report significant side-effects on the
human body.
• Licensing opportunity: Since
Glenmark’s research areas are of
interest to several international majors
because of their high revenue potential,
they present significant partnership
opportunities in licensing at the late
pre-clinical or early clinical stages.
• Research skill-sets: Glenmark’s
senior scientists, responsible for
directing its research programme,
enjoy significant exposure, interest
and experience in the selected areas
for NCE focus. To reinforce their
effort, the company has appointed an
advisory board of eminent scientists,
who possess experience in the
molecular targets selected for
research.
PROGRESS IN NCE R&D
Asthma/COPD
Asthma is a chronic debilitating
disease characterised by ‘airway
32

hyperactivity’ and inflammation. The
incidence of asthma is growing rapidly
worldwide and the available
medications are unable to meet the
growing needs and incidence. As it is
a chronic ailment, majority of asthma
patients require therapy over a long
period, sometimes spanning a lifetime
and the global market for asthma
medication is estimated at US $ 8-12
billion. Current medications include
inhaled ß- agonists, bronchial steroids
and antileukotriene antagonists.
These current therapies aim to treat
asthma by producing antiinflammatory
and/or bronchodialatory
effect. However, none of the existing
therapies are able to effectively
control the disease and some of the
treatments such as steroids have
potential side-effects.
PDE-4 inhibitors are a recent focus
area for scientists; research has
commenced over the last ten years.
The research aims to develop
compounds that selectively inhibit
Phospodiesterase Enzyme (PDE-4), an
enzyme that catalyses metabolism of
cyclic-AMP, a secondary messenger in
cellular functions. Elevation of
intracellular cAMP levels is known to
have both bronchodialatory and antiinflammatory
activities. Hence,
selective PDE-4 inhibitors present an
attractive alternative for asthma
therapy. However, some of the PDE-4
inhibitors entered into clinical
development namely Rolipram
(Schering Plough), Ariflo (Glaxo) etc.
During the last decade have shown
side-effects that include nausea and
vomiting and hence, limit the potential
dosage that can be delivered and also
the efficacy. The most encouraging
results have been demonstrated
recently by Roflumilast (Altana), which
has completed Phase-III development
in Europe and has been shown to
increase lung function in asthmatic
patients. However, Roflumilast has
also shown emetic side-effects at
elevated dosages. Hence, though the
drug candidate appears promising, a
need for safer medication continues
to exist.
Glenmark has been researching PDE-
4 inhibitors for more than three years.
The research has shown promising
results and the latest lead molecule
for Glenmark is GRC-3886, a highly
selective PDE-4 inhibitor with no
emetic side-effects demonstrated in
animal models. It has excellent in-vitro
and in-vivo pharmacological activity
against the target. As per the
preclinical studies conducted by
Glenmark, GRC-3886 has also shown
equivalent activity with that of
Roflumilast. Based on its high
selectivity, low side-effect profile and
favourable pharmacokinetic profile,
the molecule has been selected as a
lead candidate for clinical
development.
Currently GRC-3886 is in late phase
toxicity studies in animal models at a
leading European contract research
organisation (CRO) and is expected to
enter into human Phase – I clinical
trials by July-2004. Glenmark has
entered into a tie-up with Quintiles, a
leading global CRO, for the clinical
testing of GRC-3886 in UK.
The preclinical profile of GRC-3886 is
being communicated at the following
world scientific forums:
• Experimental Biology Meet
involving American Association of
Immunologists in April 2004 at
Washington USA.
• Inflammatory diseases, clinical
updates, new targets and novel
theory methods for anti-inflammatory
therapeutics in June 2004, Hilton
Logon, Boston.
• 14th Annual Congress of European
Respiratory Society in September
2004 at Glasgow, U.K.
• 11th International Congress of
Immunology, July 18-23 2004 in
Montreal, Canada.
Diabetes/Obesity
Globally, Type II Diabetes is one of
the most common chronic diseases.
The ‘Metabolic Syndrome’ of the
disease includes obesity,
hypertension, hyperlipidemia and
cardiovascular diseases. Presently
diabetes causes significant morbidity
and mortality due to long-term micro
and macro vascular complications.
The current incidence of Type II
Diabetes in US is estimated to be 7
per cent of the population. Spend on
related treatment accounts for as
much as 10 per cent of all healthcare
dollars in the US. Furthermore, the
incidence of Type II Diabetes is
increasing globally at a rapid rate in
Africa, South America and Asia
leading to the disease now being
considered a worldwide ‘epidemic’. In
India, environmental and genetic
factors, influenced by changing socioeconomic
scenario, have made an
increasing number of Indians
susceptible to this deadly epidemic.
Based on recent epidemiological data,
the growth rate of Type II diabetes is
estimated to be 12-16 per cent in India,
much higher than the global rate.
Type II Diabetes is associated with
insulin resistance in peripheral tissues
such as muscles and fat, impaired
glucose stimulated insulin secretion
from pancreatic beta-cells and
elevated hepatic gluconeogenesis.
Though certain drugs are available to
treat the pathological conditions
associated with Type II Diabetes,
33

current pharmacotherapy does not
adequately address the metabolic
defects underlying this disease.
Glenmark Research Centre was
developing new drug candidates in
the Beta-3 Agonist area. In parallel,
the Glenmark Research Centre is also
focusing on two other novel targets,
hitherto undisclosed, associated with
glucose dependent insulin secretion
and peripheral insulin resistance.
These additional targets were
selected because they contribute
alternative pharmacological
approaches to treat the distinct
deficits existing in the therapy of Type
II Diabetes. The targets have
established proof of concept and are
currently being pursued by various
multinational pharmaceutical majors.
Several of the drug candidates in
these novel target areas are being
developed by global competitors
and are at various stages of
development from preclinical to
clinical testing.
Due to exciting leads being developed
for the undisclosed targets, the Beta-
3 project stream has currently been
put on hold. Glenmark Research
Centre has identified preclinical leads
in the area of diabetes and expects to
conduct human phase I clinical trials
by October 2004. The research centre
plans to communicate the preclinical
profiles of these lead molecules at
the following world scientific
forums:
• 64th Scientific Session of American
Diabetes Association to be held in
June 2004 at Florida, USA.
• 40th Annual Meeting of EASD
(European Association for study of
Diabetes) to be held in September
2004 at Munich, Germany.
Risk management in NCE
research
While Glenmark has very promising
lead compounds in both areas, a
parallel research initiative continues to
identify back-up molecules. This acts
as a risk-mitigating strategy and is
important till such time the drug
candidate advances to late-clinical
trials. Thus, apart from the lead
compound in both therapy areas,
Glenmark has developed a back-up
pre-clinical pipeline of several drug
candidate molecules for
asthma/COPD and diabetes/obesity
respectively.
In addition to these therapy areas, the
company is also working with leading
government laboratories like the
Institute of Chemical Biology, CDRI
(Lucknow) and National Chemical
Laboratories (Pune) in the areas of
obesity, anti-inflammation and pain
management.
NOVEL DRUG DELIVERY
SYSTEMS (NDDS)
NDDS products are those that offer a
technological advantage over simple
therapeutic solutions. These products
achieve their desired effects by
altering the release profile, availability
and safety profile of the drug. Even
though the risk profile and the cost of
development are less than that of
new chemical entities, these products
require a new drug application
process and are protected through
longer patent exclusivity periods.
These products provide
pharmaceutical companies
with a pipeline of products
that can be marketed at a premium
over simple therapies or generic
products.
Glenmark’s NDDS
R&D highlights
Over the years, Glenmark has
emphasised the development of a
host of technologies that possess IPR
value. These technologies are related
to drug delivery in the human body
and are adaptable to several drugs
especially in the oral and dermal
range. Even if the underlying drug is a
generic, packaging it with a patentprotected
delivery system offers an
attractive opportunity to counter
declines in margins and realisations
that generics usually face. These
delivery technologies also help in
branding the company as a speciality
organisation in domestic and
international markets.
Glenmark is presently working on a
host of technologies with significant
IPR value. The company possesses
several patents spanning areas such
as controlled release and matrix
technologies; it plans to develop six
sustained release products over the
next 18-24 months. This NDDS effort
is a key element in the company’s
strategy to enter the US market
through ANDA filings.
INFRASTRUCTURE AND SKILL
ASSETS
Glenmark Research Centre presently
employs 250 scientific staff engaged
in drug discovery, drug delivery
systems, process development and
analytical research. This talented pool
of dedicated scientists includes 35
PhDs, several of them with postdoctoral
experience from universities
in US/ Europe. The individual research
divisions are headed by people with
rich experience in the respective
research areas. Glenmark has also
made significant investments in
equipping the research team with
requisite modern scientific
34

equipments to carry out drug
discovery and development as per
national/ international standards and
regulations, which include:
1. LC/MS/MS (Liquid
Chromatography/ Mass
Spectrometer).
2. Nuclear Magnetic Resonance
Spectrometer-NMR.
3. 35 HPLCs.
4. Fluid Bed Dryer-GLATT.
5. Formulation equipment for
lab-scale development.
6. Gas Chromatographs and other
analytical equipment.
Apart from being engaged in
research, the scientists represent
Glenmark Research Centre in various
national / international seminars and
meetings to present the results of
in-house research efforts. Some of the
representations related to asthma and
diabetes research have already been
highlighted in the concerned sections.
Publication of the results of in-house
research in peer-reviewed international
journals is a continuous activity at the
Glenmark Research Centre.
NCE: EXCITING PRODUCT PIPELINE, ENTERING CLINICAL STAGE
Stages of Development
Phase I Phase II A Estimated
Therapeutic Target Compound (6-8 (3-6 Phase I
Pre Clinical mths) mths.) start date
Other In
Synthesis In Vitro Pharmaco- Taxicity Vivo IND
Screening kinetics animal Filing
models
Asthma/
COPD
Asthma/
COPD
PDE4 GRC 3566
PDE4 GRC 3886
GRC 3886 will
enter Phase I
with a leading
CRO in UK by
July-August
2004
Obesity/ Beta 3
diabetes agonist
Diabetes Undisclosed
GRC 1087
GRC 8087
One of the
compounds
expected
to enter
Phase I by
Oct 2004
35

Global Management Team
Name
Responsibility
Glenn Saldanha
CEO
A. S. Mohanty Dir (Domestic formulations)
Rajesh Desai
Dir (Fin/IT/Legal)
Jeff Weiss
CEO (US Subsidiary)
Ailton Wiliczinski
CEO (Brazil Subsidiary)
Dr. Shekar Bhirud
Sr. VP (API)
Avadhut Sukhtankar
Sr. VP (Operations)
K. Anand VP (Regulatory Affairs and QA)
V. S. Mani VP (Finance)
Jeff Glazer
Exec. VP (IP in US)
Alind Sharma
VP (HR)
Doug Sunday
VP (API in US)
Vithal Dhamankar
VP (Semi Regulated Markets - Formulations)
36

Management’s
discussion and analysis
INDUSTRY STRUCTURE
The Indian pharmaceutical market of USD 4.8 bn accounts
for only 1.6 per cent of the world market. In spite of its
small size, the sector represents an attractive opportunity
for growth as it moves from its prevalent respect for
process patents to a regime that respects product patents
following 2005.
While the new regime is still some months away from
becoming a legal reality, certain changes have already
transpired:
• Competition has intensified; formulation companies are
accelerating new product launch.
• The launch of each new product category is followed by
the rapid introduction of a number of me-too brands,
leading to sharp price declines.
• The combination of existing price controls and price
declines have eroded corporate profitability.
• As brands have resisted the price declines better, brand
buy-outs have been initiated by companies striving to
consolidate their position in select therapeutic segments,
and
• A slow industry growth within India has prompted
pharmaceutical companies to extend their reach to
international geographies.
Over the last few years, India’s pharmaceutical industry has
also seen an increase in the incidence of mergers and
acquisitions, driven by a growing need among
manufacturers to strengthen their product portfolio,
minimise investment duplication and widen their marketing
coverage.
OPERATIONAL OVERVIEW
Glenmark constantly reviews its product-market portfolio
with a view to strengthen sustainable growth. Internally,
the three areas that the company focused on to drive
financial improvement were:
• An investment in revenue generating assets,
• A stronger manufacturing and supply chain management,
• A superior system to improve the information quality
available to the management.
Over the last five years since the IPO, the company has
progressively invested in long-term value assets that would
strengthen its competitive position. Investments made in
acquiring the API plant at Ankleshwar from GSK have since
paid off. The company has also commissioned a plant at
Goa that has been built to meet the stringent USFDA
certification standards. The plant will allow Glenmark to
serve the regulated markets overseas in the coming years.
The company also continues to support a sizeable revenue
expenditure and capital investments in the R&D facility at
New Bombay.
The company is also spending on upgrading and expanding
the manufacturing operations across all locations. These
investments will enhance manufacturing efficiencies
through increased throughput and lower costs in the near
to medium term. The company is actively working on
superior vendor management practices that are likely to
improve quality and timeliness of supplies and lower costs
over the longer-term. Along with an ongoing drop in prices
of bulk and packing material these initiatives are expected
to improve the company’s bottom line in the future.
37

To ensure superior control of operations, the company has
instituted a superior managerial and executive information
system. These systems are beginning to deliver the
desired results and as a result, the company is able to
monitor its operations and costs much better.
As a result of all the above initiatives, Glenmark’s operating
margins in 2003-04 was 18.40 per cent compared to 18.06
per cent in 2002-03.
REVENUES
The company generated a turnover of Rs. 3806.61 million
in 2003-04 compared to Rs. 3336.37 million in 2002-03, an
increase of 14.09 %, generated on the strength of an
improved performance across all its geographic markets.
DOMESTIC SALES
The company’s domestic sales in 2003-04 amounted to
Rs. 2892 million compared to Rs. 2743.97 million in 2002-
03, an increase of 5.39%. The higher income was achieved
in spite of realisation declines across a number of products.
A strong performance by flagship brands, new product
introduction and the consolidation of franchises in
segments of strength accounted for the revenue growth.
EXPORT FORMULATIONS
Exports, derived from the company’s presence in semiregulated
markets, amounted to Rs. 469.28 million in 2003-
04 compared to Rs. 296.92 million in 2002-03.
Figures in Rs. mn
Geography Mar 2004 Mar 2003 % growth
Asia 139.93 80.80 73.18
Africa 162.73 76.80 111.89
Russia and others 166.62 139.32 21.14
To drive growth sustainably over the coming years, the
company made investments in the Latin American market
and concluded a deal with KV Pharma, a mid-cap (USD 1.4
bn) US speciality and generics player. The latter
arrangement involves the development and marketing of
eight products that are nearing patent expiry in the US
market. Revenues from these initiatives are expected to
commence in the next two years.
API AND CO-MARKETING
The API and co-marketing division recorded revenues of
Rs. 445.32 million in 2003-04 compared to Rs. 286.10
million in 2002-03 an increase of 55.65 per cent. Besides,
the division also addressed a part of the captive
requirement for bulk actives within the formulation division.
COST OF SALES
The cost of sales declined from 49.28 per cent in 2002-03
to 47.11 per cent in 2003-04 mainly on account of a
changed product mix, various cost reduction measures and
a general decline in the realisations of bulk actives.
SELLING AND OPERATING EXPENSES
Selling and operating expenses were Rs 1065.03 million in
2003-04, an increase of 13.01 per cent against Rs.942.42
million in 2002-03. Selling and operating expenses as a
percentage of sales in 2003-04 was 27.98 per cent
compared with 28.25 per cent in 2002-03, a decline of 0.27
per cent.
Promotional costs, including incentives and commission,
increased by 2.63 per cent compared to the previous year
mainly on account of an investment in Glenmark’s brand in
the export markets. The increase in salaries, travelling and
other expenses occurred mainly due to recruitments, salary
38

evisions and other expenses that were made to achieve
the targeted revenue growth. Freight and distribution costs
decreased by 40.37 per cent.
As a prudent accounting practice, the Company made a
provision for doubtful debts of Rs. 11.80 million. The other
expenses including administrative costs like telephone,
rent, repairs and insurance have shown a marginal increase
due to a rise in the overall activities.
DEPRECIATION
The provision for depreciation was Rs 108.89 million in
2003-04 compared with Rs.103.33 million in 2002-03. This
rise is mainly due to the increase in fixed assets of
company.
INTEREST
The expenditure on account of interest was Rs 100.58
million in 2003-04 compared with Rs.106.88 million in
2003-04. The company was able to reduce its cost of debt
by replacing high cost debt with low cost debt. Moreover,
the conversion of debentures and repayment of other loans
lowered the debt burden and consequently the interest.
Figures in Rs. mn
Head 2003-04 2002-03 2001-02 2000-01
Interest 100.58 106.88 129.13 83.23
EBITDA 734.89 645.43 502.13 320.33
Interest cover (times) 7.31 6.04 3.89 3.85
In the future, stronger cash flows and superior working
capital management is likely to further lower interest costs
and improve interest cover.
RESEARCH AND DEVELOPMENT EXPENSES
The Research and Development expenditure was
Rs 248.07 million in 2003-04 compared with Rs.147.26
million in 2002-03, a rise of 68.45 per cent. The R&D
revenue expenditure was 6.52 per cent of the turnover in
2003-04 compared with 4.41 per cent in 2002-03. The
increase was in line with the growth of the R&D staff
strength and increase in research activity. The detailed
break up of the R&D expenditure is as below:
Figures in Rs. mn
Head Mar 2004 Mar 2003
Salaries and other benefits 78.48 45.30
Chemicals and consumables 80.56 52.97
Other expenses 89.03 48.99
PROVISION FOR TAXATION
The taxation charge for the year was Rs 90.30 million
compared with Rs.35.30 million in 2002-03.
PROVISION FOR DEFERRED TAXATION
A provision for deferred tax of Rs. 15.08 million was made
as per Accounting Standard 22 ‘Accounting for Taxes on
Income’ issued by the Institute of Chartered Accountants
of India. The deferred tax provision for the future tax
consequences was attributable to timing differences
between the financial statement, determination of income,
and its recognition for tax purposes.
DIVIDEND
The company paid an interim dividend of 65 per cent on
the equity capital for 2003-04 and a dividend of 10.50 per
cent on preference shares.
EQUITY CAPITAL AND SHAREHOLDER FUNDS
Equity capital and share premium is increased to
39

Rs.1110.45 million from Rs.602.23 million due to the ESOP
and conversion of debenture issued to CDC and SARF. The
General Reserve and profit and loss increased to
Rs. 1107.71 million from Rs.786.65 million due to the
retained earnings.
SECURED LOANS
Secured loans declined to Rs 1029.43 million in 2003-04
compared with Rs.1193.57 million in 2002-03, a fall of 13.75
per cent. This was largely on account of the conversion of
debentures into equity (mentioned above). The other major
component of the secured loan was the working capital loan
from Bank of India that was secured by hypothecation of
stocks and receivables and mortgage of land, building,
equipment, machinery at Nashik and Sinnar. Increased
turnover resulted in higher working capital utilisation from
banks.
UNSECURED LOANS
Unsecured loans increased to 119.31 million in 2003-04
compared with Rs. 53.86 million in 2002-03.
FIXED ASSETS
The company’s gross asset block increased from
Rs.1246.52 million as at 31st March, 2003 to Rs 1723.54
million as at 31st March 2004 on account of modernisation
of the Nashik and Ankleshwar plants, a part capitalisation
of the Goa plant and additions made in the R&D division.
Capital work-in-progress and capital advances worth Rs.
244.97 million were made towards the Ankleshwar and
Goa plant.
RECEIVABLES
Receivables declined from Rs.1236.69 million in 2002-03 to
Rs 1304.81 million in 2003-04, a drop in number of days
from 135 to 125.
NET WORKING CAPITAL
Net working capital levels remained almost unchanged, a
feature that is likely to continue in 2004-05 as the
Company’s export business grows.
LOANS AND ADVANCES
Loans and advances declined from Rs 502.70 million in
2002-03 to Rs 392.26 million in 2003-04 due to receipts
from Glenmark Laboratories on account of the sale of the
Verna plant.
CURRENT LIABILITIES
Current liabilities and provisions increased from
Rs. 617.48 million in 2002-03 to Rs 745.12 million in
2003-04 comprising of an increase in creditors.
This was mainly due to the increased working capital
requirements to support revenue growth. During the year,
the company paid an interim dividend of 65 per cent,
which resulted in an additional dividend tax liability of
Rs 9.86 million.
Figures in Rs. mn
Head Mar 2004 Mar 2003
Creditors 464.60 388.20
Other Liabilities 192.29 154.70
Dividend and Dividend Tax 88.23 74.58
Total 745.12 617.48
INVESTMENT
Investments rose from Rs 161.12 million in 2002-03 to
Rs 299.65 million in 2003-04 due to an investment in the
company’s subsidiaries located in various international
geographies.
INVENTORY
Raw materials inventory increased from Rs.150.78 million
in 2002-03 to Rs 310.10 million in 2003-04, mainly on
account of the need to hold a larger quantity of material to
service a larger product basket for the domestic, export
and API businesses. The company is actively working
towards rationalising this inventory through superior supply
chain and vendor management processes. Finished goods
and work-in-process inventory increased from Rs. 290.17
million in 2002- 03 to Rs 508.93 million in 2003-04.
RETURN ON CAPITAL EMPLOYED
To prepare itself for a post-GATT environment, the
company made significant investments in its research &
development and manufacturing facilities, brand acquisition
and marketing. All these initiatives are expected to yield
returns in the years to come, strengthening the company’s
return on employed capital.
Figures in Rs. Mn
Head Mar 2004 Mar 2003
Net Fixed Assets (incl. WIP) 1621.64 1235.65
Net Current Assets 1841.25 1606.81
Sum: Capital employed 3462.89 2842.46
EBITDA 734.89 645.43
ROCE (%) 21.22 22.70
40

OPPORTUNITIES
Low per capita expenditure on pharmaceuticals
India has one of the lowest per capita health care
expenditures in the world, which is likely to correct over
the coming years. For instance, India’s per capita
expenditure on pharmaceuticals is only USD 4, well below
USA (USD 1992), Canada (USD 1483), Germany (USD
1819) and United Kingdom (USD 1415).
Privatisation of insurance
Presently, only two million Indians - 0.2 per cent of the
population - are medically insured even as a recent study
indicates that 75 per cent are potentially insurable.
Insurance companies have estimated that household
healthcare spending will rise from 2 per cent to 6 per cent
in the coming years, translating into attractive growth for
India’s pharmaceutical industry.
Rising income levels
Rising incomes and a growing number of the elderly,
sustained by advances in hygiene and medicine,
are driving a shift in the market away from vitamins,
anti-infectives and gastrointestinal treatments towards
products that treat cardiovascular problems, central
nervous system disorders, diabetes and other complex
ailments. By 2010, cardiovascular and central nervous
system treatments will account for a higher share of
remedies provided. This is expected to result in a faster
growth for companies like Glenmark that specialise in
related niches.
Rural opportunity
Presently, 76 per cent of the Indian pharmaceutical off take
transpires in urban centres. The four metros namely Delhi,
Mumbai, Kolkata and Chennai account for about a fourth of
the entire Indian pharmaceutical market. Within rural India,
the market is concentrated in areas where the level of
infrastructure development is relatively high. According to
the World Development Report 2000, only 50 per cent of
the population in India has access to healthcare facilities. In
rural areas, this percentage is lower. As penetration levels
improve, a broader growth for India’s pharmaceutical
industry is expected.
Generics opportunity
This has been discussed in detail earlier.
THREATS
The implementation of GATT from 2005 represents the
biggest threat facing Indian pharmaceutical industry. India will
recognise product patents, thus reducing process reverse
engineering opportunities. Indian companies that have not
prepared for this reality will face intense competition and
perhaps even de-grow over the coming years.
OUTLOOK
Glenmark’s short-term and long-term outlook appears
encouraging for the following reasons:
• An integrated approach to markets – a presence in R&D,
bulk actives and formulations with an increasing coverage
of markets with its own sales force.
• A strong focus on monetising each element in its
integrated chain.
• A focus on expanding to new global geographic markets
with customised strategies.
• A horizontal and vertical expansion in therapeutic
segments in all target markets.
• Established skills and a track record of engineering and
launching drugs in different therapeutic segments with low
cycle times – often as the first-mover in the target
markets.
• Wider doctor reach through aggressive marketing.
• Investments in upgrading capabilities to service a higher
revenue target including asset creation, investments in
understanding regulatory requirements, alliances etc.
• Investments in building IPR assets – new drugs and
delivery systems for the future.
HUMAN RESOURCES DEVELOPMENT
The Company’s HR policy is to attract and retain the best
talent and emerge as an employer of choice. The HR
activities at Glenmark assume significance when viewed
from the perspective of growing operational complexity
and resultant diversity in human resource skill-sets
required:
• The marketing executives in pharmaceutical companies
need to possess a good medical knowledge in diverse
therapeutic areas and need to build and manage
relationships with the doctors. As the company has
diversified into different country markets, local marketing
41

executives have been recruited. The resultant pool of sales
and marketing staff has grown more complex and diverse –
encompassing employees in different socio-cultural and
regulatory settings.
• Though pharmaceutical manufacturing is an area of
Indian strength, the stringent compliance of manufacturing
facilities and systems to the needs of diverse regulatory
agencies mandates improved skill-sets for the employees
running these plants.
• The company requires a growing skill range as it grows
diverse businesses like APIs, exports to semi-regulated
markets, etc. Similarly as the company expands the scope
and intensity of its research activities, the company needs
to recruit and retain the best scientists and Ph.D talent to
drive its R&D agenda.
• Supporting and managing the resultant complexity calls
for broader skill-sets in diverse support areas such as
finance, HR, IT, etc.
During the year under review, the company embarked on
several initiatives targeted at attracting, retaining and
motivating a diverse employee set to manage the
increasing complexity in the business. These included: a
cadre-based employee classification method to devise
relevant remuneration policies and plan career
development requirements. The company also installed a
balanced-scorecard system to set and distribute
performance targets aligned to the company’s goals and
measure/control their achievement. These first-wave
initiatives and other complementary systems that were
implemented in the year under review will be further
strengthened in the following year.
REGULATORY COMPLIANCE SYSTEMS
Since pharmaceutical products affect human lives in a
direct way, the corresponding raw material quality is
stringently regulated by the health authorities of the
various countries. These authorities govern each aspect of
bringing a drug to the market; moreover, these regulatory
agencies keep raising their quality benchmarks in response
to consumer concerns. In view of this, a manufacturer
seeking to serve these countries requires to invest in,
closely track and comply with this evolving regulatory
environment. Any delay in compliance could potentially
lead to a staggered market entry and lost business
opportunities.
Over the years, Glenmark has built a dedicated Regulatory
Affairs team engaged in tracking and building protocols to
comply with the stringent regulatory requirements across
geographies. It has also extended this ability into a
confidence-building documentation system, which proves
the quality of the company’s products as safe for
consumption and customised to the precise requirements
of these geographies. Recent sales to regulated markets
like Canada as well as the rapid development of product
dossiers for registration in the European Union and US are
examples of how the company has translated its capability
into a growing market presence.
The company has also initiated several steps to make its
plants ready for global inspections and certification by
USFDA, MHRA (UK), MCC (South Africa), ANVISA (Brazil)
etc.
INTERNAL CONTROL AND SYSTEMS
Glenmark’s adequate controls cover a comprehensive
definition of individual roles and responsibilities, an
effective feedback flow to facilitate effective monitoring
and a responsible internal audit process.
SEGMENTAL ANALYSIS
Glenmark has only one segment – pharmaceuticals.
CAUTIONARY STATEMENT
Statements in the Management Discussion and Analysis
Report describing the Company’s objective,
projections and estimates are forward looking statements
and progressive within the meaning of applicable
Security Laws and Regulations. Actual results may vary
from those expressed or implied depending upon
economic conditions, government policies and other
incidental factors.
42

Risk management
STRATEGY RISK
A strategic error could result in poor
profits.
Risk management
The management at Glenmark is
convinced that its strategy -
dovetailed with the emerging industry
environment whereby India will
recognise product patents (as
opposed to process patents) - is
prudent with regard to the
circumstances. It will enable the
company to enhance shareholder
value on a sustainable basis through a
number of initiatives.
• For instance, the company expects
to emerge as a cost-effective,
integrated manufacturer of products
directed at the advanced markets in
growing therapeutic areas.
• It has made researched choices in
its target markets reinforced through
meaningful alliances and acquisitions
and the presence of an adequate
marketing team.
• It has commissioned state-of-the-art
plants with an eye to obtaining
important regulatory approvals.
• In its NCE endeavours, Glenmark is
looking to license successful products
following early clinical trials, resulting
in a quicker inflow of revenues.
This comprehensive strategy, in line
with Glenmark’s vision to migrate
from being an India-centric
pharmaceutical company into a global
research-led organisation, is being coordinated
by a committed senior
management team with a deep
industry experience.
BUSINESS PORTFOLIO RISK
Glenmark runs the risk of spreading
itself thin over a large portfolio of
businesses rather than concentrating
its resources on a specific segment.
Risk management
Glenmark has paid a considerable
attention to the selection of its
business mix. It has recognised that
domestic revenues and profits could
come under increasing pressure. To
counter this anticipated impact, it has
proactively consolidated its
longstanding leadership in key
segments like dermatology and
entered new/growing segments.
The revenue slowdown from within
India is also being replaced by the
company’s growing presence in
international markets. In each of the
key overseas markets, the company
has built a strong local management
team who can customise decisionmaking
in line with the terrain
requirements. The company has also
strengthened its internal systems to
respond with a greater speed to the
market complexities that will arise as
a result of the geographic
diversification. Besides, Glenmark
possesses a strong organisational
critical mass that will enable it to
allocate adequate resources to these
segments to mitigate any possibility
of a dilution in focus and priority.
RESEARCH RISK
Original research is expensive, time
consuming and faces a low probability
of commercial viability. Since there is
an uncertainty with regard to when
commercialisation could indeed be
possible, a sustained delay could lead
43

to significant losses.
Risk management
Following 2005, when India begins to
respect product patents, companies
that historically process-reengineered
drugs as their core focus will need to
look at alternative income streams. In
our opinion, investments in original
drug research will be critical for
survival: companies will need to
discover new processes or create
new products.
Glenmark is doing just that: the
company is engaged in original drug
research in the asthma/COPD and
diabetes/obesity segments. These
segments were selected after an
exhaustive study across the following
parameters: the existing and
projected size of the therapeutic
segment, prospective competition in
an unprotected patent environment,
the size of the potential demand as
well as the scope latent in the
products for attractive value-addition.
Glenmark’s NCE research team
possesses deep and broad-based skill
sets. It is working on parallel targets
to maximise its success prospects.
The company’s optimism is derived
from promising results already
achieved within a short period: some
drug candidates are scheduled to
enter Phase I clinical trials in the
coming year. The company’s R&D
initiative also translated into the
development of several patentprotected
platform technologies for
Drug Delivery Systems, which augurs
favourably for the long-term.
COMPETITION RISK
The Indian pharmaceutical market is
highly competitive. This can impact
the company’s revenues and profits.
Risk management
Despite the recent price decline, the
Indian market appears attractive from
a long-term perspective for a number
of reasons:
The pharmaceutical consumption per
capita was US $ 412 in Japan and
only US $ 3 in India. As incomes rise,
we expect that India’s pharmaceutical
industry’s CAGR will accelerate,
which is an adequate incentive to be
present within the industry. Besides,
India possesses attractive potential to
grow its role within the international
space as well: a vast population of
graduates with a technical
background, skill maturity in synthetic
chemistry, product re-engineering
expertise and a low cost base for
manufacture. It is our conviction that
the evolving global market will be
compatible with this Indian profile:
drugs that accounted for US $90
billion sales in 1995 are expected to
go off-patent by 2005. In response to
this, Glenmark is leveraging its India
advantage to cater to the global
generics markets, which will help it
more than compensates for any
revenue slowdown in India.
CURRENCY RISK
The company may suffer losses from
arising from currency fluctuations.
Risk management
To contain the risk arising from
volatile forex movements, the
company selectively hedged its forex
positions. The company has instituted
a competent forex management
system.
ENVIRONMENT RISK
Pharmaceutical companies generate
gaseous, solid and liquid emissions,
which could be a risk if these exceed
the mandatory limits stipulated by the
regulatory authorities.
Risk management
Glenmark is committed to sound and
responsible environment
management. This is reflected in the
company’s impeccable record: it has
never been censured by regulatory
authorities for environmental noncompliance.
Over the years, Glenmark
has invested in world-class pollutionmitigating
plants and practices, which
have helped treat its solid, liquid and
gaseous waste effectively.
44

Four year financial summary
Balance Sheet
(Rs. in '000)
2000-01 2001-02 2002-03 2003-04
Share Capital
Equity capital 101105 101404 101811 118546
Preference share application money 100000 – – –
Preference capital – 100000 100000 100000
Share capital 201105 201404 201811 218546
Total reserves 1093374 1081872 1323944 2132109
Capital and reserves 1294479 1283276 1525755 2350655
Secured Loans 525390 697711 1193564 1029429
Unsecured Loans 196002 73385 53864 119314
Total loans 721392 771096 1247428 1148743
Deferred Tax Liability – 204873 269856 293181
Total 2015871 2259245 3043039 3792579
Gross Block 1315325 1416755 1246518 1723534
Less: Depreciation 88170 175581 243340 346864
Net Block 1227155 1241174 1003178 1376670
Capital work-in-progress 61784 232471 244966
Investments 17339 26158 161126 299647
Current Assets
Inventories 348938 322280 444371 821601
Sundry Debtors 468612 742102 1236691 1304813
Cash & bank 71702 45342 40518 67694
Loans & advances 112343 246545 502704 392263
Total current assets 1001595 1356269 2224284 2586371
Current liabilities
Sundry Creditors 196816 191620 325585 371758
Provisions 48566 64872 11717 39772
Others 53295 228657 280177 333591
Total current liabilities 298677 485149 617479 745121
Net Current Assets (Working Capital) 702918 871120 1606805 1841250
Misc Expenses 68459 59009 24076 6419
Deferred tax assets – – 15383 23627
Total 2015871 2259245 3043039 3792579
45

Profit and Loss Account
(Rs. in '000)
2000-01 2001-02 2002-03 2003-04
Turnover 1907820 2607555 3336365 3806606
Less: Sales tax 137022 177928 251600 255771
Less: Excise duty paid 251473 250824 327169 308398
Net Sales 1519325 2178803 2757596 3242437
Other Income 36510 60695 42823 34573
Total Income 1555835 2239498 2800419 3277010
Salary, wages and labour charges 55515 51808 90698 120547
Consumption of raw materials 579265 605091 712886 966088
Purchase of trading goods 123196 224898 306895 286013
Power and fuel 8316 6059 7462 31365
(Increase)/ decrease in inventory (129572) 64757 (77942) (218758)
Others 37248 20435 25312 43767
Cost of sales 673968 973048 1065311 1229022
Employee Cost 155332 214195 269585 349932
Promotion expenses 120525 112714 184292 184386
Other selling and operating expenses 263610 359303 488540 530708
Total selling and operating expenses 539467 686212 942417 1065026
Research and development 22070 78110 147257 248073
Total expenses 1235505 1737370 2154985 2542121
EBIDT 320330 502128 645434 734889
Interest 83231 129134 106884 100578
EBDT 237099 372994 538550 634311
Depreciation 50951.00 88226 103326 108891
PBT 186148 284768 435224 525420
Current tax 15260 22607 35300 90298
Deferred tax – 34396 49600 15081
PAT before extraordinary items 170888 227765 350324 420041
Prior period and extraordinary items – – 18429 –
PAT 170,888 227765 331895 420041
46

Ratios
Debt Equity
Debtors cycle (Turnover)
1.0
0.96
140
135.29
0.8
0.77
120
125.11
0.64
103.88
0.6
0.56
100
89.65
0.4
2000-01 2001-02 2002-03 2003-04
80
2000-01 2001-02 2002-03 2003-04
Balance Sheet
(Rs. in '000)
2000-01 2001-02 2002-03 2003-04
Return on Networth 15.18 20.26 23.68 18.72
Return on Capital Employed (avg cap emp) 15.89 24.67 26.74 23.43
Debt Equity 0.64 0.77 0.96 0.56
Debtors cycle (Turnover) 89.65 103.88 135.29 125.11
Creditors cycle (Cost of goods sold) 106.59 71.88 111.55 110.41
Inventory Cycle (Net sale) 83.83 53.99 58.82 92.49
Inventory turnover (Net Turnover) 4.35 6.76 6.21 3.95
Gross Turnover/Capital employed 0.95 1.27 1.20 1.09
Gross Turnover/Gross Block 145.05 184.05 267.65 220.86
Net Block/Cap Emp. 60.87 60.42 36.17 39.34
W.Cap/Cap Emp. 34.87 42.40 57.94 52.62
47

PAT Margin
Research and development/Net sales
13
13.00
8.00
7.14
12
12.04
6.25
5.34
11
11.25
4.50
2.75
3.58
10.45
1.45
10
2000-01 2001-02 2002-03 2003-04
1.00
2000-01 2001-02 2002-03 2003-04
Profit and Loss Account
(Rs. in '000)
2000-01 2001-02 2002-03 2003-04
Revenue
Domestic sales/Turnover 94.74 95.76 94.62 87.22
Export sales/Turnover 5.26 4.24 5.38 12.78
Excise/Turnover 13.18 9.62 9.81 8.10
Margins - (basis – turnover)
EBDITA margin 21.08 23.05 23.41 22.66
Cash profit margin 14.59 14.50 15.77 16.30
Pre tax profit margin 12.25 13.07 15.78 16.20
PAT Margin 11.25 10.45 12.04 12.95
Expenses
Cost of sales/ Total expenses 54.55 56.01 49.43 48.35
Selling and operative expenses/Total expenses 43.66 39.50 43.73 41.90
Research and development/Total expenses 1.79 4.50 6.83 9.76
Cost of sales/ Net sales 44.36 44.66 38.63 37.90
Selling and operative expenses/Net sales 35.51 31.49 34.18 32.85
Research and development/Net sales 1.45 3.58 5.34 7.65
Interest cover 3.85 3.89 6.04 7.31
Cost of debt 11.54 17.30 10.59 8.39
Shareholder Value *
EPS (Face value Rs.10/-) 16.90 22.46 34.41 7.09
EPS (Net of extraordinary income) 16.90 22.46 32.60 7.09
CEPS (Face value Rs.10/-) 21.94 31.16 42.75 8.92
CEPS (Net of extraordinary income) 21.94 31.16 40.94 8.92
Book value 111.37 110.87 137.67 37.86
* Notes: During the financial year 2003-04, each paid up share of Rs. 10 has been sub-divided into a paid up share of Rs. 2 each.
48

Profiles of the Directors
Mr. Gracias Saldanha (Chairman)
Mr. Gracias Saldhana, 67, is the founder of the Company. He has
over 31 years experience in the industry. His educational
qualifications include an M. Sc. from Bombay University with a
Diploma in Management studies from Jamnalal Bajaj Institute of
Management Studies, Mumbai. He has worked with leading
pharmaceutical companies like Abbott Laboratories and E. Merck.
Mrs. B.E. Saldanha (Director – Exports)
Mrs B. E. Saldanha, 64, has done her B.Sc., B.Ed. from Bombay
University and has been Working Director since 1982. She has
taken a keen interest in developing the Company’s export
business.
Mr. Glenn Saldanha (Managing Director & CEO)
Mr. Glenn Saldanha, 34, is a B. Pharma from Bombay University
and was awarded the Watumall Foundation Award for overall
excellence. His other educational qualifications include an MBA
form New York University’s Leonard N. Stern School of Business
(US). He has worked for Eli Lilly in the US and was a Management
Consultant with Price Waterhouse Coopers. His Services have
been used by Smithkline Beecham, Rhorer, Astra, Merck and
Johnson and Johnson, among others.
Mrs. Cheryl Pinto (Director – Corporate Affairs)
Mrs. Cheryl Pinto, 37, is a graduate in Pharmacy from the
University of Bombay. She has over 11 years experience in the
pharmaceuticals business.
Mr. Abhinna Sundar Mohanty (Director – Domestic
Formulations)
Mr. Abhinna Sundar Mohanty, 50, is an M.Sc. In-charge of
domestic Formulations, he has over 26 years experience in
pharmaceutical sales and marketing as well as healthcare sectors.
Mr. R. V. Desai (Director – Finance/IT/Legal)
Mr. R.V. Desai, 46, is a Science Graduate and a Chartered
Accountant. In-charge of Finance /IT/Legal, he has over 20 years
experience.
Mr. Steven Bates
Mr. Steven Bates is a CFA from UK with over 20 years experience
in the financial industry. He has worked with top firms viz. James
Capel, JP Morgan Fleming Asset Management, as head of Global
emergence market. Mr. Bates is at present Director, Zephyr
Management UK Ltd, an FSA regulated investment business
investing in emerging markets. He is also an Investment Advisor
to Cardiff & Vale of Glamorgan Pension Fund, Member of the
Governing Board of Kosovo Pensions Savings Trust (UN
appointment) and Consultant on pension reform to Russian
Foundation for Social Reform (World Bank).
Mr. Julio F. Ribeiro (Non–Executive)
Mr. Julio Ribeiro, 74, is a retired government official and has
served the country under various assignments. Amongst the major
positions held, he has been the Ex-commissioner of Police,
Mumbai, Former Special Secretary to Government of India,
Ministry of Home Affairs, Former Director General of Police,
Punjab, Ex-adviser to the Governor of Punjab, Ex-Ambassador of
India to Romania and is currently a Director in IIT Corporate
Services Ltd.
Dr. Prasanna R. Gore (Non-Executive)
Dr. Prasanna R. Gore, 39, is a Ph.D and M. S. in Pharmaceutical
Marketing from University of West Virginia, Morgantown, WV and
a B.Sc. from University of Bombay, India. He has over 11 years
experience in the pharmaceutical and healthcare sectors ranging
from pharmaceutical sales, academic faulty and strategic
consulting. He was elected Vice-Chairman of the American
Association of Pharmaceutical Scientists – Economic,
Management, and Marketing section for the year 2000.
Mr. J. M. Trivedi (Non-Executive)
Mr. J. M. Trivedi, 50, is a B.Tech (Chemical Engg.) form Indian
Institute of Technology, Mumbai and has a Diploma in Basic
finance form ICFAI. He is Director of CDC’s Mumbai office and has
more than 21 years experience in the financial sector including 13
years in venture capital/private equity.
Mr. Sridhar Gorthi (Non-Executive Alternate Director)
Mr. Sridhar Gorthi, 32 is a BA. LLB (Hons) form the National Law
School of India University. Mr. Sridhar Gorthi is presently a partner
in Trilegal and has worked with Arthur Anderson and Lex Inde,
Mumbai. He was involved in legal advisory services to various
multinational and domestic corporations on restructuring, debt
finance, joint ventures, acquisition/mergers etc.
Mr. Natvarlal B. Desai (Non-Executive)
Mr. Natvarlal B. Desai, 77, is a retired General Manager of Bank of
Baroda. He has over 45 years experience in the Banking Sector.
He has worked in India and overseas. He was Chairman of Bank of
Baroda Uganda Ltd. He was the Founder and Managing Director of
Equitorial Bank PLC, UK form which he retired in 1992.
Mr. M. Gopal Krishnan (Non-Executive)
Mr. M. Gopal Krishnan, 69, worked with Bank of India for over 25
years, most of which were spent overseas in Kenya and UK.
Thereafter, he worked with Equitorial Bank PLC, UK as Founder
Director until he retired.
49

Directors' Report
Your Directors have pleasure in presenting their 26th Annual Report and Audited Accounts
of the Company for the year ended March 31, 2004.
FINANCIAL RESULTS
Rs. in million
2003-2004 2002-2003
Profit before Interest, Depreciation & Tax 734.89 645.43
Less: Interest 100.58 106.88
Less: Depreciation 108.89 103.32
Less: Tax (Current Year, Deferred Tax & for earlier years) 105.38 103.33
Profit after Tax 420.04 331.90
Surplus brought forward from earlier years 235.88 29.07
Profit available for appropriations 655.92 360.97
APPROPRIATIONS
Interim Dividend on Preference Shares 10.50 10.50
Interim Dividend on Equity Shares 77.02 66.11
Dividend Tax 11.21 8.47
Transfer to Debenture Redemption Reserve 0.25 –
Transfer to General Reserves 60.00 40.00
Balance carried to Balance Sheet 496.94 235.88
655.92 360.97
DIVIDEND
Your Company has paid interim dividend @ 65 per cent
on the Paid-up Equity Share Capital of the Company and @
10.5 per cent on the paid up Preference Share Capital of
the Company. The total outflow on account of Dividend
inclusive of Dividend Tax, is Rs. 98.73 million (Rs. 85.08
million). Your Directors recommend that the interim
dividend already paid be taken as final dividend for the year
ended 31 March 2004.
RESULTS OF OPERATIONS
Your Directors are pleased to report satisfactory
performance for the year under review. The Company
achieved gross revenue of Rs.3841.18 million
(Rs. 3,379.19 million), registering an increase of 13.67 per
cent over the previous year. The increase in revenue is due
to the launching of new products, growth in the existing
products, expansion of field staff and
new initiatives taken in terms of co-marketing and
bulk drugs.
PROFITS
The operating profit before interest, depreciation and
other income increased to Rs.734.89 million from
Rs. 645.43 million, an increase of 13.86 per cent over the
previous year.
50

OPERATIONS:
PHARMA DIVISION
Domestic sales at Rs.3167.38 million (Rs. 3023.24 million)
registered an increase of 4.76 per cent over the previous
year. The growth in the domestic segment during the
period was affected due to price reductions in various new
products introduced by the Company, in response to
industry-wide price pressures. As per ORG report, our
ranking has improved to 24 among the top 50
pharmaceutical companies. Your Company introduced new
brands like Tacroz, Tazret and Razel, which were well
received in the market. Other brand extensions made
during the year like Telma – H Tabs, Glimilin - 2 MF Tabs,
Vorth Insta Gel, Valus - 20 XT, and Valus Insta Gel are
expected to do well in the future.
EXPORTS
Exports income at Rs. 471.27 million for the year 2003-
2004 showed a healthy increase as compared to
Rs. 296.92 million in the previous year, showing a growth
of 58.71 per cent.
INTERNATIONAL BUSINESS:
• Product Development and Licence Agreement with
K. V. Pharmaceuticals Company, USA.
Glenmark Pharmaceuticals Inc., USA (GPI), a wholly
owned subsidiary of your Company has entered into a
product development and marketing license agreement
with the USA-based K. V. Pharmaceuticals Company
(KV). Glenmark, under the agreement, will initially
develop and license eight generic products to KV for
regulatory approval and marketing in the North
American market. These will include both Paragraph III
and Paragraph IV ANDA (Abbreviated New Drug
Application) filing opportunities. The alliance will help
your Company to use KV’s vehicle to get its products
into the US market thereby helping your Company to
build its US business and get positive cash flows in the
US almost immediately. The companies will also
collaborate to secure US regulatory approval of the
products. The two companies expect to launch the first
product under the agreement during the last half of
2005.
• Marketing arrangement with Lannett Company Inc.,
USA:
Your Company through its wholly owned subsidiary in
the USA viz. Glenmark Pharmaceuticals Inc., USA, has
entered into a marketing arrangement with the
Philadelphia-based Lannett Company Inc., USA, to
market the ANDAs (Abbreviated New Drug Application)
which Glenmark, USA would file over the next two
years.
API AND CO-MARKETING
The sales of API and the Co-marketing segment of your
Company increased from Rs. 286 million to Rs. 445.32
million, registering a growth of 55.85 per cent over the
previous year. Exports were made to nearly 20 countries.
During the year, your Company developed and launched 20
technologically advanced products in the global market and
initiated tie-ups with two major generic players in USA and
Canada. Apart from this, co-marketing arrangements were
also entered into with major pharma companies in the
domestic market including Ranbaxy, Dr. Reddy’s, Cadila
and Torrent.
FILING OF DMFs (DRUG MASTER FILE)
During the year, your Company has filed an initial set of
DMFs on Amiodarone, Cilastazol and Flucanozole. In April
2004, your Company filed a fourth DMF for Glimiperide.
DRUG DISCOVERY RESEARCH AND DEVELOPMENT
CENTRE AT MAHAPE, NAVI MUMBAI
The working of the R&D centre is satisfactory. As stated
earlier, the Company's research activities are focussed in
the areas of diabetes, asthma, obesity, pain and
inflammation.
Your Company has developed GRC 3886, a highly selective
PDE 4 inhibitor targeting the treatment of asthma. The
molecule is completing its pre-clinical studies with a
contract research organisation in Europe and is expected to
enter Phase-I clinical trials in UK in July-August 2004. Your
51

Company is in the final stages of closing a deal with
Quintiles, a leading global CRO, to conduct the Phase-I
clinical trials.
Your Company is also working on an undisclosed target for
diabetes and has developed several promising candidates,
one of which will be selected for Phase-I clinical trials later
in 2004-05. On account of the expected superiority of
these compounds over those developed for the Beta-3
agonist area, the erstwhile project researching Beta-3
agonists for diabetes has been put on hold.
Your Company has several back up compounds in the PDE-
4, Beta-3 agonist and the undisclosed diabetes target
space which can be studied further, subject to the
performance of the lead compounds in Phase-I clinicals.
FIRE AT COMPANY’S MANUFACTURING FACILITY AT
KURKUMBH
The manufacturing operations at the leased factory of the
Company at Kurkumbh were suspended temporarily due to
fire in the factory. The Company did not suffer significant
losses/ loss of sales as the production was moved to
Ankleshwar factory, and also because the plant was fully
insured.
PLANT AT GOA
The company has commissioned a plant at Goa that has
been built to meet the stringent USFDA certification
standards. The plant will allow Glenmark to serve the
regulated markets overseas in the coming years.
Formulation research centre at Sinnar (Nasik)
The centre works on developing formulations for sale in
India and semi-regulated export markets. Several products
have been developed at this centre and they are being
launched in the market.
EMPLOYEE STOCK OPTION SCHEME
During the year, your Company formulated a new
Employees Stock Option Scheme, ESOS 2003, pursuant to
which options have been issued to the employees of the
Company. On exercising the convertible options so
granted, the paid-up equity share capital of the company
will increase by a like number of shares.
The details of stock options granted by the Company are
disclosed in compliance with clause 12 of the Securities
Exchange Board of India (Employee Stock Options Scheme
and Employee Stock Purchase Scheme), 1999 and set out
in the Annexure to this Report.
ACQUISITIONS
During the year your Company has acquired a local
manufacturing Company having an ANVISA approved plant
in Brazil, for a consideration of US $ 5.25 million. The
acquisition will facilitate entry in the Brazilian and other
Latin American markets.
Your Company has also acquired a bulk drugs intermediate
manufacturing plant at Solapur for a consideration of
Rs. 17.80 million. This will help the Company in increasing its
capacity for manufacturing bulk drugs.
SUBSIDIARY COMPANIES
Pursuant to the provision of Section 212 of the Companies
Act, 1956 the Audited Accounts as of 31 March 2004
together with the reports of the Directors and Auditors of
the subsidiary companies, viz. Glenmark Exports Limited,
GM Pharma Limited, Glenmark Pharmaceuticals Inc, USA,
Glenmark Farmaceutica Ltda, Glenmark Philippines Inc. and
Glenmark Impex LLC are attached.
Your Company has incorporated wholly owned subsidiaries
in Philippines, Brazil, Nigeria, United Kingdom, the United
States of America and Switzerland.
SUB-DIVISION OF EQUITY SHARES
The face value of the shares of the Company have been
split from Rs.10/- per share to Rs.2/- per share.
FINANCE
Your Company was able to reduce its cost of borrowings
from Rs. 106.90 million in 2002-2003 to Rs. 100.58 million
in 2003-2004, by prepaying /repaying high cost debt and
replacing the same with low cost borrowings. The
Company was able to source funds for short term
requirements at lower rates, due to its rating of AA- by
52

CRISIL. The 5 per cent FCDs of Rs.50 crore issued to CDC
Financial Services (Mauritius) Ltd and South Asia Regional
Fund were converted into equity shares of the Company at
a price of Rs. 305.42 per share of face value of Rs. 10/-
(current face value of equity shares of the Company is
Rs. 2/-per share).
DIRECTORS
Mr. Glenn Saldanha, Mrs. Cheryl Pinto and Mr. J.F. Ribeiro
retire by rotation and are eligible for re-appointment. Mr.
Steven Bates was appointed as Additional Director of the
Company on 22 April 2004. Mr. Bates holds office upto the
date of the ensuing Annual General Meeting. The Company
has received a notice in writing pursuant to the provisions
of Section 257 of the Act from a member of the Company
proposing his appointment as Director of the Company.
During the year Mr. Sameer Paigankar resigned from the
Board of the Company with effect from 29 March 2004.
Your Directors wish to place on record their appreciation of
the valuable services rendered by him during his tenure as
Director on the Board.
CORPORATE GOVERNANCE
The Corporate Governance and Management’s Discussion
and Analysis Report form an integral part of this Report and
are set out as separate Annexures to this Report. The
Certificate of the Auditors of the Company certifying
compliance with the conditions of Corporate Governance
as stipulated in clause 49 of the Listing Agreement with
Stock Exchanges is annexed with the report on Corporate
Governance.
AUDITORS
M/s Price Waterhouse, Chartered Accountants, Auditors of
the Company, retire at the conclusion of the ensuing
Annual General Meeting and being eligible, offer
themselves for re-appointment.
HUMAN RESOURCES
Industrial relations continued to be cordial. Information as
per Section 217(2A) of the Companies Act, 1956, read with
the Company’s (Particulars of Employees, Rules, 1975)
forms part of this Report.
COMPANIES (DISCLOSURE OF PARTICULARS IN THE
REPORT OF THE BOARD OF DIRECTORS) RULES 1988.
The particulars as prescribed under the Rules appear in the
Annexures forming part of the Directors Report.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors confirm that –
(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed along with
proper explanation relating to material departures;
(ii) appropriate accounting policies have been selected and
applied consistently and have made judgments and
estimates that are reasonable and prudent so as to give
a true and fair view of the state of affairs of the
Company as at 31 March 2004 and of the profit of the
Company for the year ended 31 March 2004;
(iii) proper and sufficient care has been taken for
maintenance of adequate accounting records in
accordance with the provisions of the Companies Act,
1956 for safeguarding the assets of the Company and
for preventing and detecting fraud and other
irregularities;
(iv) the annual accounts have been prepared on a going
concern basis.
APPRECIATION
Your Directors express their gratitude to the Company’s
customers, shareholders, business partners viz. distributors
and suppliers for their understanding and support.
Your Directors record their appreciation and gratitude to the
financial institutions and banks for their continued and
timely assistance in meeting the Company’s resource
requirement. Finally your Directors acknowledge the
dedicated services rendered by all the employees of the
Company.
For and on behalf of the Board of Directors
Mumbai
G. Saldanha
Date: July 5, 2004
Chairman
53

Annexure to the
Directors’ Report
ANNEXURE-A
Information under section 217(1)(e) of the Companies Act,1956 read with Companies
(Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 and
forming part of the Directors’ Report.
A. CONSERVATION OF ENERGY
Energy Generation Measures Taken
A. Power and Fuel Consumption Current Year Previous Year
1. Electricity
(a) Purchased
Unit (in '000 Kwhrs) 4947.07 1591.10
Total Amount (Rs. in '000's) 25510.30 7597.35
Rate/Unit (Rs.) 4.65 4.78
(b) Own Generation
(i) Through Diesel Generator
Unit (in '000 Kwhrs) 136.28 79.20
Units per Ltr. of Diesel Oil 3.19 1.56
Cost/Unit (Rs) 7.05 6.60
(ii) Through Steam Turbine/Generator Nil Nil
2. Coal Nil Nil
Qty.
Total Cost
Avg. Rate
3. Furnace Oil
Qty. (K. Ltr.) 183.20 40.00
Total Amount (Rs. in '000's) 3297.60 720.00
Avg. Rate (Rs. /K. Ltr.) 18.00 18.00
4. i. Internal generation
Light Diesel Oil
Qty. (In Ltr. '000's) 101.41 132.01
Total Cost (Rs. in '000's) 2218.80 2247.00
Rate/Unit (Rs.) 21.88 17.03
ii. Natural Gas
Qty. (M 3 '000's) 476.79 Nil
Total Cost (Rs. in '000's) 4767.87 Nil
Rate/Unit (Rs.) 10.00 Nil
B
Consumption
The Company manufactures several Drug Formulations in different pack sizes. In view of this, it is impracticable to
apportion the consumption and cost of utilities to each Product/Formulation.
54

B. TECHNOLOGY ABSORPTION, RESEARCH &
DEVELOPMENT (R&D)
1. Specific areas in which R & D is carried out by the
Company
a) Pharmaceutical Formulation Development: Formulation
of various pharmaceutical dosage forms and processes
for new & existing molecules. Development of
formulations as immediate release, delayed release,
sustain release and various platform technologies. This
includes literature survey, preformulation studies,
formulation and standardisation of dosage forms for
selected drug molecules on laboratory scale.
b) Development of technology based products like
Carbonyl iron floating tablets, Clotrimazole
Mucoadhesive vaginal tablets, Esomeprazole plus
Domperidone SR, Rosiglitazone plus Metformin SR, line
extensions of X-Met SR for launch in the domestic
segment.
c) Development of ANDA for the US markets: Successful
technology transfer to sites in the US and Canada.
Development of 7 more ANDA’s with successful pilot
BE data and ready for transfer to manufacturing site by
September – October 2004.
2. Analytical Method Development :
a) Development of new analytical test processes and their
evaluation for dosage forms. This includes stability
indicating methods, validation and standardisation of
analytical processes. Accelerated and time lapse
stability studies of Research and Development
formulations under various climatic conditions.
b) Development of technology based patentable platform
technology. Filing of 8 patents in the US and PCT for
various dosage form including oral controlled release
and topical products.
3. Packaging Material Development :
Development of packaging forms and their improvements
for new as well as existing products.
4. Technology Transfer:
As per the technology transfer protocols for various
formulation, scale up for production / commercial batches.
Monitoring of first three to five commercial batches.
Setting-up of pelletisation facility and transfer of technology
for Esomeprazole pellets and Itraconazole pellets at
Ankleshwar. Esomeprazole pellets are under regular
manufacture for exports as well as domestic market.
5. Benefits derived as a result of the above R&D
R&D has developed the new formulations for new &
existing molecules & drug combinations. Developed
technology is transferred to commercial production for
following products;
Glenmark Gracewell Healtheon
Glevo 750 Tablets Tacroz Ointment Ezzicad Tablets
(Levofloxacin) (Tacrolimus) (Ezetimibe)
Candid Microspray Tazret Gel Lerez AT Tablets
(Clotrimazole 1%) (Tazarotene) (Lercanidipine Hcl + Atenolol)
Valus Tablets Tazret Forte Cream Telma H Tablets
(Valdecoxib) (Tazarotene) (Telmisartan + Hydrochlorothiazide)
Stiloz Tablets Maclar Dry Syrup Razel Tablets
(Cilostazol) (Clarithromycin for oral suspension) (Rosuvastatin)
Kretos Tablets
Kefpod Suspension
(Etoricoxib)
(Cefpodoxime Proxetil for oral suspension)
Deriva – C Gel
(Adapalene + Clindamycin)
Ebov Tablets (Etoricoxib)
Vorth Tablets (Valdecoxib)
The products launched and sold in the domestic and exports markets would earn revenues for your Company. The IPR
generated can lead to profitable licensing opportunities.
55

6. Future plan of action
R&D is working on new molecules in the following
segment;
- Antihypertensive molecules
- Antifungal molecules
- Antibacterial molecules
- Antiasthmatic molecules
- Antidiabetic products
- Technology – such as microspheres & aerosols.
- Technology – to replace solvents used in film coating by
water.
- Development of formulations for Semi regulatory market.
- Development of formulations for Latin American market.
Your Company is targeting development and technology
transfer and ANDA filing for 10-12 products for the coming
year. These products will be transferred to the Goa plant.
7. Expenditure on R & D:
(Rs. in million)
2003-04 2002-03
a) Capital Expenditure 123.55 158.61
b) Revenue Expenditure 248.07 147.26
c) Total 371.62 305.87
d) R & D Expenditure as a 9.67% 9.16%
percentage of total turnover
TECHNOLOGY ABSORPTION, ADOPTION AND
INNOVATION:
1. Efforts in brief towards technology absorption,
adoption and innovation.
Most of our efforts in the area of technology absorption,
adoption and innovation are based on our own efforts in R
& D. They include improvement in yield and quality,
improvement of processes and development of new
processes with validation studies.
2. Benefits derived :
Benefits derived are enhanced production of our products,
improvement in the yield and quality of products and
introduction of new products, cost reduction of products
and processes without affecting the quality of the products
and process efficacy.
Our R&D Centre is recognised by D.S.I.R., Ministry of
Science and Technology, Government of India.
3. Information regarding technology imported during the
last five years - Nil
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
Total foreign exchange earned was Rs. 489.54 Million and
outflow was Rs. 533.05 Million.
For and on behalf of the Board of Directors
Mumbai
G. Saldanha
Date: July 5, 2004
Chairman
56

ANNEXURE-B
Information of employees under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of
Employees) Rules, 1975.
Particulars of employees :
Sl Name Age Designation Remuneration Qualification Experience Date of Last
No Yrs Received (Rs.) Yrs Commencement Employment
of Employment
1. B. E. Saldanha 64 Director-Exports 7,177,090 B. Sc, B. Ed., 33 01.01.1982 Walsingham House School
2. Glenn Saldanha 34 Managing Director 14,559,510 B. Pharm., 10 01.08.1998 Price Waterhouse
& Chief Executive Officer MBA (USA) Coopers, USA
3. Cheryl Pinto 37 Director-Corporate Affairs 7,410,921 B. Pharm. 11. 01.08.2000 Cheryl Laboratories (Pvt.)
Limited
4. R. V. Desai 46 Director-Finance 3,124,062 B. Sc. , F.C.A 22 02.01.1984 Progressive Consultants
IT & Legal Limited
5. A. S. Mohanty 50 Director-Formulations 3,186,542 M. Sc. 27 25.03.1983 Alembic Limited
6. S. A. Paigankar* 34 Director- Strategic 3,106,677 B. Pharm., MBA 12 24.05.1999 Smith & Nephew
Planning Healthcare Limited
7. K. Anand* 48 Sr.V.P.- QA & Regulatory 13,09,495 M. Sc. 28 17.10.2003 Nicholas Piramal India Ltd.
Affairs
*Employed for part of the year.
Notes:
i) Remuneration includes Salary, Allowances, Bonus, Company’s Contribution to Provident Fund and Superannuation Fund, Medical Benefits, LTA and perquisites.
ii) Mrs. B. E. Saldanha, Mr. Glenn Saldanha and Ms. Cheryl Pinto are related to each other as defined under Section 6 of the Companies Act, 1956.
iii) The nature of employment in all cases is contractual.
For and on behalf of the Board of Directors
Mumbai G. Saldanha
Date: July 5, 2004 Chairman
57

Disclosure pursuant to the provisions of Securities and Exchange Board of India (Employee
Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.
A. Glenmark Employee Stock Option Scheme ‘1999
a) Options granted 6,70,000
b) The Pricing Formula • Book Value as on 31st March, 1999 in
respect of 2,85,000 options
• Market price as on 1st January, 2001 in
respect of 3,85,000.
c) Options vested 5,85,000
d) Option exercised 5,85,000
e) The total number of shares arising as a result of exercise of option. 5,85,000
f) Options lapsed NIL
g) Variation of terms of options NIL
h) Money realised by exercise of option Rs.1,36,47,200/-
i) Total number of options in force as on 31st March’2004 85,000
j) Employee wise details of options granted to:
i) Senior Managerial personnel i) Mr. Sameer Paigankar
ii) Dr. B. Gopalan
iii) Dr. A. Lakdawala
iv) Mr. A.S. Mohanty
v) Mr. Rajesh V. Desai
vi) Mr. Dereck Lobo
vii) Mr. J. A. Mograwala
viii) Dr. Shekhar Bhaskar Bhirud
ix) Dr. Subramaniyam Duvuuri
ii) Any other employee who receives a grant in any one year of
option amount to 5% or more of options granted during the year. i.) Mr. Sameer Paigankar
ii.) Dr. B. Gopalan
iii.) Dr. A. Lakdawala
iv.) Mr. A.S. Mohanty
v.) Mr. Rajesh V. Desai
vi.) Mr. Dereck Lobo
vii.) Mr. J. A. Mograwala
viii.)Dr. Shekhar Bhaskar Bhirud
ix.) Dr. Subramaniyam Duvuuri
x.) Mr. Arloph John Vieira
iii) Identified employees who were granted option during any
NIL
one year, equal to or exceeding 1% of the issued capital
(excluding outstanding warrants and conversions) of the
Company at the time of grant
k) Diluted Earnings Per Share (EPS) pursuant to issue of shares on
exercise of option calculated in accordance with International
Accounting Standard (IAS) 33. Rs. 7.37/-
* Figures have been recast pursuant to sub-division of face value of equity share from Rs. 10 each to Rs. 2 each.
58

B . Glenmark Employee Stock Option Scheme ‘2003
a) Options granted 700,725
b) The Pricing Formula Market value as on October 22nd, 2003
c) Options vested NIL
d) Option exercised NIL
e) The total number of shares arising as a result of exercise of option. NIL
f) Options lapsed NIL
g) Variation of terms of options NIL
h) Money realised by exercise of option NIL
i) Total number of options in force as on 31st March’2004 700,725
j) Employee wise details of options granted to:
i) Senior Managerial personnel i) Mr. R. V. Desai
ii) Mr. A.S. Mohanty
iii) Mr. Sameer Paigankar
iv) Dr. B. Gopalan
v) Dr. Shekhar Bhaskar Bhirud
vi) Dr. Anish Desai
vii) Dr. G. N. Choudhary
viii) Dr. Swaroop Kumar
ix) Dr. Krishna K. Solanki
x) Mr. M.J. Mendonza
xi) Mr. V. S. Mani
xii) Mr. Alind Sharma
xiii) Mr. V. Dhamankar
xiv) Mr. J. A. Mograwala
xv) Mr. T. R. Grover
xvi) Mr. A. C. Sukhtankar
xvii) Mr. K. R. Menon
xviii) Mr. Sanjay Mahajan
xix) Mr. M. Anil
xx) Mr. Pritam Roy
xxi) Mr. K. Anand
ii) Any other employee who receives a grant in any one year of NIL
option amount to 5% or more of options granted during the year.
iii) Identified employees who were granted option during any NIL
one year, equal to or exceeding 1% of the issued capital
(excluding outstanding warrants and conversions) of the
Company at the time of grant
k) Diluted Earnings Per Share (EPS) pursuant to issue of shares Rs. 7.37/-
on exercise of option calculated in accordance with International
Accounting Standard (IAS) 33.
l) Method of Calculation of employees compensation cost The company has calculated the employee compensation cost using the intrinsic
value of the stock options.
Difference between the employee compensation cost so
computed at
i) above and the employee compensation cost that shall have been
recognised if it had used the fair value of the options
NIL
The impact at this difference on profits and on EPS of the Company
(In Thousand)
Profit after Tax (PAT) Rs. 408196
Less: Additional employee Compensation cost based on fair value NIL
Adjusted PAT Rs. 408196
Adjusted EPS : Basic Rs. 7.41
Diluted Rs. 7.37
m) Weighted-average exercise price and fair value of
Stock Options granted:
Stock Options Weighted average Weighted average Fair value (in Rs.) Closing market price at NSE
granted on exercise price (in Rs.) * Face Value Rs 10 on the date of grant (in Rs.)
22/10/2003 *376.50 * 144.27 *357.35
n) Description of the method and significant assumptions used The Black Scholes option pricing model was developed for estimating fair value of
during the year to estimate the fair value of the options,
traded options. Since Option pricing model requires use of substantive assumptions,
including the following weighted average information:
changes therein can materially affect Fair Value of options. The option pricing
models do not necessarily provide a reliable measure of fair value of options.
The main assumptions used in the Black-Scholes option pricing model during the year were as follows:
Risk free interest rate 5%
Expected life of options from the date of grant
6 years
Expected Volatility 33.83%
Dividend yield 1.9%
59

Pursuant to amendment in the SEBI (Employees Stock
Option Scheme and Employees Stock Purchase
Scheme), Guidelines, 1999, SEBI vide their letter
No.CDF/DIL/UR/ 23141/2003 dated 8th December, 2003
has advised the Company to make the disclosures
under the said guidelines, as may be applicable to the
Company, for the information of the members. The
following disclosures are made in compliance with the
above requirement.
Total number of options to be granted
Total number of options granted under this scheme
8,75,000 Options convertible into 8,75,000 Equity Shares
of Rs. 2/- each.
Identification of classes of employees entities to participate
under the scheme of the Company
The following categories of employees are entitled to
participate/ be issued options under the scheme:
Permanent employees : √
Permanent employees outside India : √
Permanent employees of subsidiary : –
Permanent employees of holding : √
Whole –time directors : √
Independent directors : –
The Compensation Committee consisting of directors
reviews the performance and identifies the employees
from the above said categories for grant of options. The
number of options is also decided based on the
performance appraisal system of the Company
Employees and directors who are either promoters or
belong to the promoter group as defined in SEBI
Guidelines and any person holding 2% of the outstanding
share capital of the Company’s equity shares at any time
after commencement of this Plan shall not be eligible
under this Plan.
Requirements of vesting, period of vesting and maximum
period within which the options shall be vested
The minimum period of vesting is one year from the date
of grant and may extend upto a maximum period of three
years from the date of the grant, with such lock in period
as may be decided by the Board/Compensation
Committee. The vesting may also happen in one or more
trenches as decided by the Compensation Committee.
Exercise price or Pricing formula
Exercise Price shall be the Book Value as per the last
audited Balance Sheet or as may be decided by the
Compensation Committee.
The exercise price shall be subject to adjustment at the
discretion of the Compensation Committee, in the event of
the Company distributing Bonus Shares/Rights Shares, so
that the holder of any Warrant, who has not opted for
conversion before the record date for the issue of the said
Bonus Shares/Rights Shares shall be entitled to receive the
number of Shares of the Company which he would have
held or have been entitled to receive on such Warrant
being exercised immediately prior to such record date.
Exercise period and process of exercise
The exercise period commences from the date of vesting
of options and the options may at any time till the
employee continues in the services of the Company, or his
leaving the services of the Company due to termination or
resignation whichever is earlier.
In order to exercise the options, employee would give an
exercise notice as per the draft provided in the Scheme to
the designated officer with the full consideration towards
the options to be exercised.
Appraisal process for determining the eligibility of
employees to the Employees Stock Options Scheme
The options are allotted to the Employees based on their
performance appraisal, period of service, the present and
potential contribution of the employee to the growth of the
Company.
The Compensation Committee of directors reviews the
performance appraisal system of the Company and
identifies the employees for grant of options.
Maximum number of options to be issued per
employee and in aggregate.
Company can issue maximum 8,75,000 options under the
scheme & a maximum no. of 2,50,000 options can be
granted per eligible employee.
Accounting methods
The Company shall confirm to the accounting policies
specified in Clause 13.1 of the SEBI (Employees Stock
Option Scheme and Employees Stock Purchase Scheme)
Guidelines, 1999.
60

Report on
Corporate Governance
Pursuant to Clause 49 of the Listing Agreement, a Report
on Corporate Governance is given below.
1. The Company’s philosophy on Code of Governance is
aimed at assisting the top management of the Company in
the efficient conduct of its business and in meeting its
obligations to shareholders. The Company has adopted a
codified Corporate Governance Charter, inter alia, to fulfil
its corporate responsibilities and achieve its financial
objectives.
The Company believes in and has consistently practiced
good corporate governance. The Company creates an
environment for the efficient conduct of the business and
to enable management to meet its obligations to all its
stakeholders, including amongst others, shareholders,
customers, employees and the community in which the
Company operates.
Given below is a Report on Corporate Governance of your
Company.
2. BOARD OF DIRECTORS:
A. Composition:
The Board comprises of eleven Directors, of whom, five
are executive, and six are non-executive Directors. The
Chairman of the Board is a non-executive Director.
The non-executive Directors are professionals with
experience in management, pharma industry, legal, finance,
marketing and general administration who bring in a wide
range of skills and experience to the Board.
a) Details of the Board of Directors
Name of the Director Status No. of Board No. of other No. of Committee
Meetings attended Directorship held # Membership (s)
Chairman Member
Gracias Saldanha Non-Executive -
- Chairman Promoter Group 4 5 – –
B .E. Saldanha Executive -
Promoter Group 4 5 – –
Glenn Saldanha Executive -
Managing Director & CEO Promoter Group 7 2 – 2
Cheryl Pinto Executive -
Promoter Group 6 – – 1
J. F. Ribeiro Non-Executive
- Independent 5 2 3 –
R.V .Desai Executive 7 – – 1
A. S. Mohanty Executive 7 – – –
61

Name of the Director Status No. of Board No. of other No. of Committee
Meetings attended Directorship held # Membership (s)
Chairman Member
Prasanna Gore Non-Executive -
Independent – – – 1
N.B Desai Non-Executive -
Independent 5 – – 2
M. Gopal Krishnan Non-Executive -
Independent 2 – – 1
J. M. Trivedi Non-Executive -
Independent 5 3 – –
Sridhar Gorthi
(Appointed as Alternate
Director to Dr. Prasanna Non-Executive -
Gore on May 12, 2003). Independent 6 1 – 1
S. A. Paigankar
(Resigned on March 29, 2004). Executive 2 – – –
B. S. Mehta Non-Executive -
(Resigned on July 31, 2003) Independent – – – 2
Rohit S. Mehta
(Served as Alternate Director
to B. S. Mehta from May Non-Executive -
12, 2003 to July 31, 2003.) Independent 3 – – 2
# Includes Directorship(s) in Private Companies.
b) During the Financial Year ended March 31, 2004 seven
board meetings were held on the following dates:
May 15, 2003; May 16, 2003; July 31, 2003; September
29, 2003; October 24, 2003; January 31, 2004; March 29,
2004.
B. None of the non-executive Directors of the Company,
have any pecuniary relationship or transactions with the
Company other than sitting fees paid for attending board
meeting/committee meetings and those already disclosed
in the note four of schedule 21 to the Financial Statement
in the Annual Report.
C. Mr. Gracias Saldanha, Mrs. B .E. Saldanha, Mr. Glenn
Saldanha, Mr. R.V. Desai, Mr. A. S. Mohanty, Mr. N.B
Desai & Mr. S. A. Paigankar attended the last Annual
General Meeting of the Company held on September 26,
2003.
3. AUDIT COMMITTEE:
Your Company has a qualified and independent Audit
Committee. During the Financial Year ended March 31,
2004 the Committee was re-constituted on July 31, 2003.
The committee met four times on May 15, 2003; July 31,
2003; October 22, 2003 and January 31, 2004.
62

Name No. of meetings Remarks
attended
1. J. F. Ribeiro 3 Chairman of the Committee.
2. Prasanna Gore – Appointed as member of the Committee on July 31, 2003.
3. Sridhar Gorthi 4 Alternate Director to Dr. Prasanna Gore.
4. N. B. Desai 1 Appointed as a member of the Committee on July 31, 2003
5. M. Gopal Krishnan – Appointed as a member of the Committee on July 31, 2003
6. B. S. Mehta – Resigned from the Board of Directors and the Committee on July 31, 2003.
7. Rohit S. Mehta 2 Served the Committee in the capacity of Alternate Director to Mr. B. S.
Mehta, from May 12, 2003 to July 31, 2003.
Mr. Glenn Saldanha, Managing Director & CEO, Mr. R. V. Desai, Director-Finance, IT & Legal and Mr. Prakash Sevekari,
Cost Auditor are invitees to the Meeting. Mr. M. J. Mendonza, Vice President-Legal and Company Secretary is the
Secretary to the Committee. The terms of reference of this committee are wide enough covering matters specified in the
Companies Act, 1956 read together with Clause 49 of the Listing Agreement of the Stock Exchange. The current Charter
of the Audit Committee is in line with international best practices and the regulatory changes formulated by SEBI and the
listing agreements with the stock exchanges on which your Company is listed.
4. REMUNERATION OF DIRECTORS:
A. The remuneration of the executive and non-executive Directors of your Company is decided by the Board of Directors.
B. Given below are the details of remuneration / fees / commission paid to Directors during the financial year ended March
31, 2004:
Amount in Rs.
Name of Director Salary Commission Perquisites Retirement Sitting Total
benefits /Other Fees
reimbursements
1 Gracias Saldanha 10,084,182 – – 20,000 10,104,182.41
2 B. E. Saldanha 3,960,000 990,000 173,590 2,053,500 – 7,177,089.61
3 Glenn Saldanha 3,180,000 9,887,165 303,743 1,188,602 – 14,559,509.96
4 Cheryl Pinto 1,755,000 5,042,123 224,930 388,869 – 7,410,921.22
5 R. V. Desai 2,308,430 275,016 233,795 306,820 – 3,124,061.71
6 A. S. Mohanty 2,333,430 275,016 264,852 313,244 – 3,186,542.30
7 S. A. Paigankar 2,205,130 252,098 369,678 279,772 – 3,106,677.34
8 J. M. Trivedi – – – – 25,000 25,000.00
9 J. F. Ribeiro – – – – 40,000 40,000.00
10 M. Gopal Krishnan – – – – 10,000 10,000.00
11 N. B. Desai – – – – 30,000 30,000.00
12 Rohit S. Mehta – – – – 25,000 25,000.00
13 Sridhar Gorthi – – – – 50,000 50,000.00
15,741,990 26,805,600 1,570,588 4,530,806 200,000 48,848,984.55
63

Notes:
1 The Executive Directors have been appointed/ re-appointed on May 16, 2002 for the term of five years. The service
contract can be terminated with a notice of six months.
2. Sitting fees in respect of Mr. J. M. Trivedi have been paid to CDC Advisors Pvt. Ltd., of which he is a nominee.
3. During the Year, the following Directors acquired Shares of Company under ESOS-99:-
i) Mr. S. A. Paigankar* 15,000 Equity Shares of Rs. 2/- each.
ii) Mr. A. S. Mohanty
20,000 Equity Shares of Rs. 2/- each.
iii) Mr. R. V. Desai
20,000.Equity Shares of Rs. 2/- each.
* Resigned on March 29, 2004.
The options had a vesting period of three years and were issued at a premium of Rs. 12.34 per equity share.
5. SHAREHOLDERS COMMITTEES:
Share Transfer and Shareholders’ / Investors’ Grievances Committee:
The Committee comprising of the following members who review shareholders’ complaints and resolution thereof.
1. Mr. J. F. Ribeiro – Chairman
2. Mr. Glenn Saldanha – Member
3. Mr. R.V. Desai – Member
The Committee once met on 23rd June, 2003, prior to being merged with the Share Transfer Committee and reconstitution
on July 31, 2003.
Compliance Officer: Mr. M.J. Mendonza-Vice President-Legal & Company Secretary is the Compliance Officer of the
Company.
Name of committee Members No. of Attendance at the meeting
meetings held
Shareholders’ and Investors’ 1) J. F. Ribeiro 1 All Directors were present in the meeting.
Grievance Committee. 2) Glenn Saldanha
3) R. V. Desai
Share Transfer Committee. 1) Glenn Saldanha 10 Mr. R.V. Desai attended all meetings, Mr. Glenn
2) Cheryl Pinto Saldanha and Mrs. Cheryl Pinto attended seven
3) R. V. Desai meetings.
Share Transfer and 1. J. F. Ribeiro 22 Mr. R.V. Desai attended all meetings,
Shareholders’ / Investors’ 2. Glenn Saldanha Mr. J. F. Ribeiro & Mr. Glenn Saldanha attended
Grievance Committee. 3. N. B. Desai 20 meetings each & Mr. N. B. Desai attended
4. R.V. Desai 19 meetings.
• Details of investor’s complaints received during the year ended March 31, 2004:
No. of complaints 2003-2004 2002-2003
Received 172 219
Disposed 172 219
Pending Nil Nil
• The Company's Registrars, Karvy Computershare Private Ltd, had received letters / complaints during the financial year,
all of which were replied / resolved to the satisfaction of the shareholders.
6. COMPENSATION COMMITTEE:
i) The Compensation Committee comprises of following members of the Board:
64

1. Mr. J. F. Ribeiro – Chairman
2. Mr. Glenn Saldanha – Member
3. Mr. N. B. Desai – Member
ii) The Committee was reconstituted on September 29, 2003.
iii) During the year ended March 31, 2004, one meeting of
Compensation Committee was held on 22nd October,
2003 and where except Mr. N. B. Desai all other Directors
were present.
iv) Broad terms of reference of the Compensation
Committee:
• To recommend and review remuneration package of
Executive / Non-Executive Directors.
• To present report to the Board on remuneration package
of Directors and others.
v) Compensation Policy :
The Company follows a market linked remuneration policy,
which is aimed at enabling the Company to attract and
retain the best talent. Compensation is also linked to
individual and team performance as they support the
achievement of Corporate Goals. The Company has
formulated an Employee Stock Option Scheme for
rewarding & retaining performers.
7. DISCLOSURES BY MANAGEMENT :
a) No material, financial and commercial transactions were
reported by the management to the Board, in which the
management had personal interest having a potential
conflict with the interest of the Company at large.
b) There are no transactions with the Director or
Management, their subsidiaries or their relatives etc. that
may have potential conflict with the interest of the
Company at large.
c) There was no non-compliance during the last three years
by the Company on any matter related to capital market.
Consequently, there were no penalties imposed nor
strictures passed on the Company by Stock Exchanges,
SEBI or any statutory authority.
8. SHAREHOLDERS INFORMATION:
a) The relevant information relating to the Directors
appointed after last Annual General Meeting of the
Company and to be re-appointed at the ensuing Annual
General Meeting to be held on September 24, 2004 are
given below:
i. Glenn Saldanha:- 34, is a B.Pharm from Bombay
University and was awarded Watumall Foundation award
for overall excellence. His other educational qualifications
includes an MBA from New York University‘s Leonard N.
Stern School of Business (USA). He has worked for Eli Lilly
in the USA and was a management consultant with
PriceWaterhouse Coopers. His services have been used
by SmithKline Beecham, Rhone Poulenc Rhorer, Astra,
Merck and Johnson & Johnson, among others.
He is also a Director of following Companies/ Body
Corporates:-
S.No. Name of Company Position
1 G M Pharma Ltd. Chairman
2 Glenmark Exports limited Director
3 Glenmark Pharmaceuticals Inc.USA Chairman
4 Glenmark Pharmaceuticals (U.K) Ltd. Chairman
5 Glenmark Farmaceutica Ltda. Chairman
6 Glenmark Philippines Inc. Chairman
7 Glenmark Pharmaceuticals (Nigeria) Ltd Chairman
8 Glenmark Chemicals Inc., USA Director
Mr. Glenn Saldanha is also member of Compensation and
Share Transfer & Shareholders/Investors Grievance
Committee of your Company.
ii. Cheryl Pinto: - 36, is a graduate in Pharmacy from
University of Bombay .She has over 10 years experience in
pharmaceutical business.
She is also Director of following Companies/Body
Corporates:-
S.No. Name of Company Position
1 Glenmark Pharmaceuticals Inc. USA Director
2 Glenmark Pharmaceuticals (U.K) Ltd. Director
iii. J. F. Riberio: 73 is, a retired government official and has
served the country under various assignments .Amongst
the major positions held, he has been Ex-Commissioner of
Police, Mumbai, Former Special Secretary to Government
of India, Ministry of Home Affairs, Former Director General
of Police, Punjab, Ex-adviser to the Governor of Punjab, Ex-
Ambassador of India to Romania. He is also a Director of
following Companies:-
S. No. Name of company Position Held
1 IIT Corporate Services Ltd. Director
2 V. V. F Limited Director
Mr. Ribeiro is Chairman of all three committees in your
Company and also the Chairman of Audit Committee of V.
V. F Ltd.
65

iv. Steven Bates is a CFA from UK with over 20 years experience in the financial industry. He has worked with top firms
viz. James Capel, JP Morgan Fleming Asset Management, as head of Global emergence market. Mr. Bates is at present
Director, Zephyr Management UK Ltd, an FSA regulated investment business investing in emerging markets. He is also an
Investment Advisor to Cardiff & Vale of Glamorgan Pension Fund, Member of the Governing Board of Kosovo Pensions
Savings Trust (UN appointment) and Consultant on pension reform to Russian Foundation for Social Reform (World Bank).
Mr. Bates is also a Director of following Companies/Body Corporates:-
S. No. Name of company Position Held
1 Zephyr Management UK Ltd. Director
2 Baring Emerging Europe plc Non Executive Director
3 Magna Umbrella Fund plc Non Executive Director
4 Novy Neft Non Executive Director
5 Occo Eastern European Fund Non Executive Director
b) Share Transfer Process: The shares are sent
/received for physical transfer at R& T’s office
and all valid transfer requests are processed and
returned within a period of 30 days from the date
of receipt. The Share transfers are approved on
weekly basis by the Share Transfer and
Shareholders’ /Investors’ Grievance Committee.
c) Dematerialisation of shares: As of March 31, 2004, 96.33
% of shares have been dematerialised and held in
electronic form through NSDL and CDSL. The shares of
your company are permitted to be traded only in
dematerialised form.
d) Share Holding Pattern as at March 31, 2004:
Promoter’s
Resident Individuals
Foreign Institutional
Investor
Bodies corporates
Indian financial
institutions
Others
20.41
18.26
2.42
54.57
2.11 2.23
Distribution of Share Holding as on 31/03/04
Pie chart of Share Holding
Sl. No. Description No.of Share holders Shares Per cent
1 Promoter`s 22 32333088 54.57
2 Resident Individuals 22657 12092835 20.41
3 Foreign Institutional Investor 11 10815935 18.26
4 Bodies corporates 928 1430727 2.42
5 Indian financial institutions 4 1250655 2.11
6 Others:
i Non resident Indians/OCBs 220 564628 0.95
ii Trusts 8 4700 0.01
iii Mutual funds 4 309045 0.52
iv Employees 446 181000 0.31
v Clearing members 2 108527 0.18
vi H. U. F. 207 104580 0.18
vii Directors & relatives 8 49850 0.08
895 1322330 2.23
Total 24517 59245570 100.00
e) General Body Meetings
The last three Annual General Meetings of the Company were held at the venue and time as under:-
66

AGM No. Date Time Venue
23 September 28, 2001 11.00 a.m. Sunville Banquet & Conference Hall
3rd floor, Dr. Annie Besant Road,
Worli, Mumbai-400 018.
24 September 27, 2002 11.00 a.m Sunville Banquet & Conference Hall
3rd floor, Dr. Annie Besant Road,
Worli, Mumbai-400 018.
25 September 26,2003 11.00 a.m Sunville Banquet & Conference Hall
3rd floor, Dr. Annie Besant Road,
Worli, Mumbai-400 018.
f) Date Time and Venue of the Ensuing Annual General Meeting:
Annual General Meeting shall be held on September 24, 2004 at 11 a.m. at Sunville Banquet Hall, Annie Besant Road,
Worli, Mumbai 400 018.
g) Record Date/Book Closure:
• April 3, 2004, was fixed as record date for making
payment of Interim dividend on Equity share capital of
the Company.
• September 17, 2004 to September 24, 2004 (both days
inclusive), for the purpose of ensuing Annual General
Meeting.
h) Date of declaration of interim dividend:
Equity Shares - March 29 , 2004
Preference Shares - March 29, 2004
i) Financial Calendar (Tentative and Subject to change)
Financial reporting for the first quarter ending July 2004
June 30, 2004.
Financial reporting for the second quarter ending October 2004
September 30, 2004.
Financial reporting for the third quarter ending January 2005
December 31, 2004.
Financial results for the year ending May 2005
March 31, 2005.
j) Members can avail of nomination facility by filing Form
2B with the Company. Blank forms can be downloaded
from the website of the Company.
k) Members may kindly note that consequent to split in the
face value of equity shares of the Company, the shares in
the face value of Rs.10/- shall cease to be valid for any
purpose whatsoever. Members who are holding shares of
the face value of Rs.10/- each are requested to kindly send
their respective share certificates to the R&T Agents for
receiving five equity shares of face value of Rs. 2/- each in
exchange of one equity share of face value of Rs. 10/- each.
l) Pursuant to the provisions of Section 205A (5) of the
Companies Act, 1956, dividend for the financial year
ended March 31, 2000 and thereafter, which remain
unclaimed for a period of seven years will be transferred by
the Company to the Investor Education and Protection
Fund (IEPF) established by the Central Government
pursuant to Section 205C of the Companies Act, 1956.
Information in respect of such unclaimed dividend when
due for transfer to the said Fund is given below:
Financial Date of declaration Date of transfer to unpaid/ Last date for claiming Due date for
Year Ended of Dividend unclaimed dividend account unpaid Dividend transfer to IEP Fund
31.03.2000 10.03.2000 22.04.2000 21.04.2007 22.04.2007
31.03.2001 28.09.2001 27.10.2001 27.10.2008 28.10.2008
31.03.2002 27.09.2002 27.10.2002 27.10.2009 28.10.2009
31.03.2003 15.05.2003 15.06.2003 15.06.2010 16.06.2010
Shareholders who have not so far encashed their dividend warrant(s) are requested to seek issue of duplicate warrant(s) by
67

writing to the Company’s Registrar and Transfer Agents,
M/s. Karvy Computershare Pvt. Limited immediately.
Shareholders are requested to note that no claims shall lie
against the Company or the said Fund in respect of any
amounts which remain unclaimed and unpaid for a period
of seven years from the dates that they first became due
for payment and no payment shall be made in respect of
any such claims.
m) Means of Communication:
a. Quarterly/Half Yearly and Annual Financial Results of the
Company are published in the Financial Express and
Punyanagri newspapers.
b. Your Company’s results & official news releases are
displayed on the Company’s website. There were no
presentations to any Institutional Investors / Analysts
during the year.
(All figures in Indian Rupees)
Month High Low Close BSE Sensex
Apr 03 230.00 206.00 230.00 2959.79
May 03 257.00 216.50 253.80 3180.75
Jun 03 306.35 230.00 297.85 3607.13
Jul 03 340.00 275.10 310.95 3792.61
Aug 03 371.00 293.00 366.30 4244.73
Sep 03 442.00 348.80 391.50 4453.24
Oct 03 409.00 369.25 433.75 4906.87
Nov 03 435.00 380.50 416.25 5044.82
Dec 03 773.50 420.00 714.75 5838.96
Jan 04 987.00 670.50 753.75 5695.67
Feb 04 838.50 681.25 750.75 5667.51
Mar 04 795.50 635.00 721.00 5590.60
* For maintaining parity in comparison, the stock market prices of
the Company’s shares have been taken for Rs. 10 (face value) per
share.
c. All items required to be covered in the Management
800
6000
Discussion & Analysis are included in the Directors' Report
to Members.
686
5392
d. Company has its own web site and all the vital
information relating to the company and its products is
displayed on its web site: www.glenmarkpharma.com.
Share price
572
458
4784
4176
BSE Sensex
Your Company also regularly provides information to the
344
3568
stock exchanges as per the requirements of the Listing
Agreements. The Company’s website is updated
periodically to include information on new developments
and business opportunities of your Company.
230
Apr 03
May 03
Jun 03
Sep 03
Aug 03
Jul 03
Glenmark
Oct 03
Jan 04
Dec 03
Nov 03
BSE Sensex
Feb 04
Mar 04
2960
9. Company’s Script Information:
• Listing on stock exchanges: The shares of the Company
are listed on The Stock Exchange, Mumbai & The National
Stock Exchange of India Ltd.
• Listing fees for the year 2004-05 have been paid to the
Stock Exchanges.
• Stock Code: 532296 on the BSE
- Electronic Form No.INE935A01027
- Scrip Name
- GLENMARK PHA- BSE
- GLENMARK - NSE
Market Price Data:
High, low during each month in last financial year.
Performance in comparison to broad based indices namely
BSE Sensex.
10. Plant Locations:
The Company's plants are located at:
i) E-37, MIDC Industrial Area, D Road, Satpur, Nasik-
422007, Maharashtra
ii) 3109-C, GIDC Industrial Estate, Ankleshwar – 393 002
Dist. Bharuch.
iii) Plot no. 7, Colvale Industrial Estate, Bardez, Goa.
iv) Plot no. A- 80, MIDC Area, Kurkumbh, Daund, Pune,
Maharashtra.
v) Plot No. 163- 165 & 170 – 172, Chandramouli Industrial
Estate, Mohol, Sholapur, Maharashtra – 413213.
11. Outstanding GDR's/ADR's/Warrants or any
Convertible instruments exercised, date and likely
impact on equity :
During the year, your Company formulated a new
Employees Stock Option Scheme viz. ESOS’ 2003,
68

pursuant to which 7,00,725 options have been issued.
Pursuant to ESOS’1999, your Company had issued 875,000
Convertible Warrants to Glenmark Pharmaceuticals Limited
Employees Welfare Trust. During the Financial Year 2003-
2004, 2,00,000 options were exercised and 35,000 options
were cancelled.
As of March 31, 2004, 7,00,725 and 85,000 options were
outstanding under ESOS’ 2003 and ESOS’ 1999
respectively and are due for exercise on the following
dates:
ESOS’ 1999
Date
Number of Options
01.04.2004 15,000
01.07.2004 5,000
01.01.2005 55,000
01.07.2005 5,000
01.01.2006 5,000
ESOS’ 2003
Date
Number of Options
22.10.2005 70,073
22.10.2006 1,40,145
22.10.2007 2,10,218
22.10.2008 2,80,289
On exercising the convertible options, the paid-up equity
share capital of the Company will increase by a like number
of shares.
12. Electronic Clearing System (ECS):
Shareholders are advised to opt for payment of dividend
through ECS
The salient benefits of receiving dividend payment through
ECS amongst others may be listed as below:
a) There are no clearing charges in the hands of the
investor/ recipient, the same are borne by the Company;
b) Risk as to fraudulent encashment of the dividend
warrants, loss / interception of dividend warrants in transit,
are eliminated;
c) The facility ensures instant credit of the dividend amount
in the desired account which to the recipient, means
effortless and speedier transaction and hassles as to
revalidation etc are done away with;
d) Once the payment is made through ECS, Company
issues intimation letters to the investors as to credit /
payment of dividend, providing therein the details of
the account and amount. Investors may download
the ECS Mandate Form from the Company’s website
and send the same duly filed-in to registrars for updation of
records.
13. Investor Helpdesk: for clarifications / assistance, if
any, please contact:-
Registered Office
Registrars & Transfer
Agents
Persons Abhishek Thareja M. S. Madhusudhan
to contact
Add: B/2, Mahalaxmi Chambers "Karvy House",46,Avenue 4,
22, Bhulabhai Desai Road, Street No.1, Banjara Hills,
Mumbai-400 026
Hyderabad-500034.
Telephone (022) 23514893-6 (040) 23312454/23320751
Fax No. (022) 23512531 (040) 23311968
Email abhishekt@glenmarkpharma.com madhusudhan@karvy.com
Website: www.glenmarkpharma.com www.karvy.com
69

Certificate on
Corporate Governance
To the Members of
Glenmark Pharmaceuticals Limited
We have examined the compliance of conditions of Corporate Governance by Glenmark Pharmaceuticals Ltd., for the year
ended on March 31, 2004, as stipulated in Clause 49 of the Listing Agreement of the said Company with the stock
exchanges in India.
The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination has been
limited to review of procedures and implementation thereof adopted by the Company for ensuring the compliances of the
conditions of Corporate Governance as stipulated in the said Clause. It is neither an audit nor an expression of opinion on
the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, the Company has complied
with the conditions of Corporate Governance stipulated in Clause 49 of the above mentioned Listing Agreements.
We state that in respect of investor grievances received during the year ended March 31, 2004, no investor grievances are
pending against the Company as per the records maintained by the Registrars and Share Transfer Agents of the Company
and as presented to the Share Transfer and Investor Grievance Committee.
We further state that such compliance is neither an assurance as to the future viability of the Company nor of the
efficiency or effectiveness with which the management has conducted the affairs of the Company.
For and on behalf of Price Waterhouse
Mumbai, July 5, 2004
Partha Ghosh
Partner
Membership Number – F 055913
Chartered Accountants
70

Auditors’ Report
To the members of
GLENMARK PHARMACEUTICALS LIMITED
1. We have audited the attached Balance Sheet of Glenmark Pharmaceuticals Limited as at 31st March, 2004, and the
related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we
have signed under reference to this report. These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material mis-statement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of ‘The Companies Act, 1956’ of India (the ‘Act’) and on the basis of such checks of the
books and records of the Company as we considered appropriate and according to the information and explanations
given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.
4. Further to the comments in the Annexure referred to in paragraph 3 above, we report that:
(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were
necessary for the purposes of our audit;
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from
our examination of those books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement
with the books of account;
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report
comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;
(e) On the basis of written representations received from the directors, as on 31st March 2004 and taken on record by
the Board of Directors, none of the directors is disqualified as on 31st March 2004 from being appointed as a
director in terms of clause (g) of sub-section (1) of Section 274 of the Act;
(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial
statements together with the notes thereon and attached thereto give in the prescribed manner the information
required by the Act and give a true and fair view in conformity with the accounting principles generally accepted in
India:
(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2004;
(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
For and on behalf of Price Waterhouse
Mumbai, April 22, 2004
Partha Ghosh
Partner
Membership Number – F 055913
Chartered Accountants
71

ANNEXURE TO AUDITORS’ REPORT
Referred to in paragraph 3 of the Auditors’ Report of even date to the members of Glenmark Pharmaceuticals Limited on
the financial statements for the year ended 31st March 2004
1. (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of
fixed assets.
(b)
(c)
The fixed assets are physically verified by the management according to a phased programme designed to cover
all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the
Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been
physically verified by the management during the year and no material discrepancies between the book records
and the physical inventory have been noticed.
In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has
been disposed by the Company during the year.
2. (a) The inventory (excluding stocks with third parties) has been physically verified by the management during the year.
In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion,
the frequency of verification is reasonable.
(b)
(c)
In our opinion, the procedures of physical verification of inventory followed by the management are reasonable
and adequate in relation to the size of the Company and the nature of its business.
On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper
records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records
were not material.
3. The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other
parties covered in the register maintained under Section 301 of the Act. As the Company has not granted/taken any
loans, secured or unsecured, to/from companies, firms etc listed in the register maintained under section 301 of the
Act, paragraph 3(b), 3(c) and 3(d) of the order are not applicable.
4. In our opinion and according to the information and explanations given to us, having regard to the explanation that
certain items are purchased are of special nature for which suitable alternative sources do not exist for obtaining
comparative quotations, there are adequate internal control procedures commensurate with the size of the company
and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods. Further, on the
basis of our examination of the books and records of the Company, and according to the information and explanations
given to us, we have neither come across nor have been informed of any continuing failure to correct major
weaknesses in the aforesaid internal control procedures.
5. We are informed by the Management that the transactions with other companies in which Directors of the Company
who are nominated by other companies and are also holding the position as Directors in the other companies (not
holding shares exceeding 2% of the paid up capital) are not required to be entered in the register maintained under
sub-section (1) of Section 301 of the Act.
In view of the above, there are no entries recorded in the Register maintained under Section 301 of the Act.
6. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act
and the rules framed there under.
7. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.
8. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant
to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under
clause (d) of sub-section (1) of Section 209 of the Act. We are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained. We have not, however, made a detailed examination of the records
72

with a view to determine whether they are accurate or complete.
9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our
opinion, the Company is generally regular in depositing the undisputed statutory dues including provident fund,
investor education and protection fund, employees’ state insurance, income-tax, sales-tax, wealth tax, customs
duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities.
(b)
According to the information and explanations given to us and the records of the Company examined by us, there
are no dues of sales tax, income-tax, customs duty, wealth-tax, excise duty and cess which have not been
deposited on account of any dispute.
10. The Company has no accumulated losses as at March 31, 2004 and it has not incurred any cash losses in the financial
year ended on that date or in the immediately preceding financial year.
11. According to the records of the Company examined by us and the information and explanation given to us, the
Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the
balance sheet date.
12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures
and other securities.
13. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund/societies are not applicable to
the Company.
14. In our opinion, the Company is not a dealer to trader in shares, securities, debentures and other investments.
15. In our opinion, and according to the information and explanations given to us, the Company has not given any
guarantee for loans taken by others from banks or financial institutions during the year.
16. In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have
been applied for the purposes for which they were obtained.
17. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the
information and explanations given to us, there are no funds raised on a short-term basis which have been used for
long-term investment. However, funds raised on a long term basis of Rs. 3530 lakhs have been used for short term
purpose.
18. The Company has not made any preferential allotment of shares to parties and companies covered in the register
maintained under Section 301 of the Act during the year.
19. The Company has created securities in respect of debentures issued and outstanding at the year-end.
20. The Company has not raised any money by public issues during the year.
21. During the course of our examination of the books and records of the Company, carried out in accordance with the
generally accepted auditing practices in India, and according to the information and explanations given to us, we have
neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we
been informed of such case by the management.
For and on behalf of Price Waterhouse
Mumbai, April 22, 2004
Partha Ghosh
Partner
Membership Number – F 055913
Chartered Accountants
73

Balance Sheet
Rs. In ('000s)
As at 31st March, Schedules 2004 2003
SOURCES OF FUNDS
Shareholders' Funds
a) Share capital 1 218,546 201,811
b) Reserves and surplus 2 2,132,109 1,323,944
2,350,655 1,525,755
Loan Funds
a) Secured loans 3 1,029,429 1,193,564
b) Unsecured loans 4 119,314 53,864
1,148,743 1,247,428
Deferred Tax Liability 5 293,181 269,856
Total 3,792,579 3,043,039
APPLICATION OF FUNDS
Fixed Assets 6
a) Gross Block 1,723,534 1,246,518
b) Less : Depreciation 346,864 243,340
c) Net Block 1,376,670 1,003,178
d) Capital Work-in-progress 244,966 232,471
1,621,636 1,235,649
Investments 7 299,647 161,126
Deferred Tax Assets 8 23,627 15,383
Current Assets, Loans and Advances
a) Inventories 9 821,601 444,371
b) Sundry debtors 10 1,304,813 1,236,691
c) Cash and bank balances 11 67,694 40,518
d) Loans and advances 12 392,263 502,704
2,586,371 2,224,284
Less : Current Liabilities and Provisions
a) Current liabilities 13 705,349 605,762
b) Provisions 14 39,772 11,717
745,121 617,479
Net Current Assets 1,841,250 1,606,805
Miscellaneous Expenditure 15 6,419 24,076
(to the extent not written off or adjusted)
Total 3,792,579 3,043,039
Notes to the Financial Statements 22
Schedules referred to above and notes attached there to form an
integral part of the Balance Sheet.
This is the Balance Sheet referred to in our report of even date.
For and on behalf of
Price Waterhouse
Chartered Accountants
Membership No. F 055913
For and on behalf ofthe Board of Directors.
Partha Ghosh M. J. Mendonza Glenn Saldanha Rajesh Desai
Partner Vice President - Legal & Managing Director & CEO Director - Finance
Mumbai, April 22, 2004
Company Secretary
74

Profit and Loss Accounts
Rs. In ('000s)
For the year ended 31st March, Schedules 2004 2003
INCOME
Sales & Operating Income 16 3,806,606 3,336,365
Other income 17 34,573 42,823
3,841,179 3,379,188
EXPENDITURE
Cost of sales 18 1,793,191 1,644,080
Selling and operating expenses 19 1,065,026 942,417
Depreciation 6 108,891 103,326
Interest 20 100,578 106,884
Research and development expenses 21 248,073 147,257
3,315,759 2,943,964
Profit Before Tax 525,420 435,224
Provision for taxation
– Current Year [includes wealth tax provision Rs. 300 (Prev. Year–Rs. 300)] 90,298 35,300
– Earlier Years – 18,429
– Deferred tax 15,081 49,600
Net Profit After Tax 420,041 331,895
Balance Profit brought forward 235,883 29,073
Net Profit Available for Appropriation 655,924 360,968
Interim Dividend paid on pref shares 10,500 10,500
Tax on dividend paid on pref shares 1,345 –
Interim Dividend on Equity Shares 77,020 66,114
Tax on interim dividend paid on equity shares 9,868 8,471
Transfer to Debenture Redemption Reserve 253 –
Transfer to General Reserve 60,000 40,000
Balance Carried to Balance Sheet 496,938 235,883
Earnings per share (Rs.) 22(2)
Basic 7.41 6.33
Diluted 7.37 5.67
Face Value of Shares 2.00 2.00
Notes to the Financial Statements 22
Schedules referred to above and notes attached there to form an
integral part of the Profit and Loss Account.
This is the Profit and Loss Account referred to in our report of even date.
For and on behalf of
Price Waterhouse
Chartered Accountants
Membership No. F 055913
For and on behalf ofthe Board of Directors.
Partha Ghosh M. J. Mendonza Glenn Saldanha Rajesh Desai
Partner Vice President - Legal & Managing Director & CEO Director - Finance
Mumbai, April 22, 2004
Company Secretary
75

Cash Flow Statement
Rs. In ('000s)
Year ended 31st March, 2004 2003
A. Cash flow from operating activities:
Net Profit before tax 525,420 435,224
Adjustments for:
Depreciation 108,891 103,326
Interest Expense 98,677 105,313
Interest Expense - Finance lease 1,901 1,571
Interest Income (2,333) (1,433)
Income from Investment - Dividends (1,245) (20)
(Profit)/Loss on Fixed Assets sold 720 (1,494)
Deferred revenue expenditure written off 17,657 34,933
Provision for Doubtful Advances – 4,000
Provision for Bad & Doubtful Debts 11,800 16,000
Provision for Gratuity & Leave Encashment 500 1,500
Unrealised foreign exchange (gain) /loss (9,102) 965
Employee stock option plan (4,593) 1,808
Operating profit before working capital changes 748,293 701,693
Adjustments for changes in working capital :
– (increase)/decrease in Sundry Debtors (71,640) (511,630)
– (increase)/decrease in Other Receivables (125,189) (10,917)
– (increase)/decrease in Inventories (377,230) (122,091)
– increase/(decrease) in Trade and Other Payables 126,466 83,581
Cash generated from operations 300,700 140,636
– Taxes (Paid) / Received (Net of Tax deducted at source) (62,343) (47,380)
Net cash from operating activities 238,357 93,256
B. Cash flow from Investing activities:
Purchase of fixed assets (522,806) (182,528)
Capital Work in Progress (12,495) (170,687)
Proceeds from Sale of fixed assets 250,000 99,336
Proceeds from Sale of Investments – 5,000
Purchase of investments (138,521) (139,968)
Finance Lease Rent payment against principal amount (6,974) (4,724)
Interest Received 3,613 1,765
Dividend Received 1,245 20
Net cash used in investing activities (425,938) (391,786)
76

Cash Flow Statement (Contd.)
Rs. In ('000s)
Year ended 31st March, 2004 2003
C. Cash flow from financing activities:
Proceeds from fresh issue of
Share Capital (including Share Premium ) 508,185 (6,140)
Proceeds / (Repayment) of long term borrowings (340,079) 393,251
Receipt /(Repayment) of short term borrowings 65,450 (19,521)
Proceeds from Cash Credits (NET) 182,918 107,326
Finance Lease Rent (Interest Part only) (1,901) (1,571)
Interest Paid (115,121) (110,536)
Dividend Paid (76,224) (69,103)
Dividend Tax Paid (8,471) –
Net cash used in financing activities 214,757 293,706
Net Increase/(Decrease) in Cash & Cash Equivalents 27,176 (4,824)
Cash and cash equivalents as at 31.03.2003 40,518 45,342
Cash and cash equivalents as at 31.03.2004 67,694 40,518
Cash and cash equivalents comprise
Cash 836 619
Deposits 46,411 21,443
Balance with Scheduled Banks 20,447 18,456
67,694 40,518
Notes :
1 The Cash Flow Statement has been prepared under the "Indirect Method" as
set out in Accounting Standard - 3 on Cash Flow Statements issued by the
Institute of Chartered Accountants of India.
2 Cash and cash equivalents includes Rs. 2,364 which are not available
for use by the Company (Refer schedule 13 to the financial statements).
3 Figures in bracket indicate Cash outgo.
This is the Cash Flow Statement referred to in our report of even date
For and on behalf of
Price Waterhouse
Chartered Accountants
Membership No. F 055913
For and on behalf ofthe Board of Directors.
Partha Ghosh M. J. Mendonza Glenn Saldanha Rajesh Desai
Partner Vice President - Legal & Managing Director & CEO Director - Finance
Mumbai, April 22, 2004
Company Secretary
77

Schedules forming part of the Balance Sheet
Rs. In ('000s)
As at 31st March, 2004 2003
1 Share Capital
Authorised
125,000,000 (2003 – 125,000,000) Equity shares of Rs 2/- each 250,000 250,000
4,000,000 (2003 – 4,000,000) Cumulative redeemable
non convertible preference shares of Rs 100/- each 400,000 400,000
Unclassified capital 100,000 100,000
Issued, Subscribed and Paid-up
59,245,570 (2003 -- 50,860,000) Equity shares of Rs 2/- each 118,491 101,720
Less: Calls in arrears 3 7
118,488 101,713
10.5%, 1,000,000 (2003 – 1,000,000) redeemable cumulative non-convertible
preference shares of Rs. 100/- each (Redeemed on April 1, 2004 at par) 100,000 100,000
Equity Share Warrants
290,000 (2003 – 490,000) Equity share warrants of Rs. 0.20/- each 58 98
Total 218,546 201,811
Notes :
1. At the Annual general meeting held on september 26, 2003, the shareholders approved the sub-division of Equity
share from face value of Rs. 10 each to Rs. 2 each.Accordingly previous year's figures have been recast.
2. Of the above equity shares,19,875,000 shares of Rs 2 each are allotted as fully paid-up Bonus Shares by capitalisation
of reserves.
3. In terms of Employee Stock Option Plan approved by the members,290,000 (2003 – 490,000) convertible warrants have
been allotted to Glenmark Pharmaceuticals Limited Employees Welfare Trust. Each warrant carries an option and is
convertible to one equity share of Rs 2. During the year, 200,000 (2003 – 225,000) warrants were converted into Equity
Shares at an exercise price of Rs. 14.34 per share.
4. During the Year Company formulated a new Employees Stock Option Scheme viz. ESOS’ 2003, pursuant to which
7,00,725 options of Rs.2. each were granted at average market price. On exercise of the options so granted the Paid
up equity share capital of the company will increase by a like number of shares.
5. 5% Convertible Debentures aggregating to Rs. 5,000 Lakhs issued to CDC Financial Services (Mauritius) Ltd. and South
Asia Regional Fund were converted into 8,185,570 fully paid up equity shares of Rs. 2 each at a premium of Rs.59.08
per share as per the agreement based on predetermined price earning ratio on the profits for the year ended March
31,2003 at the meeting of board of directors held on September 29,2003.
6. As of March 31, 2004, the Trust has allotted 85,000 (2003 -- 320,000) warrants to the employees of the Company,
which are outstanding. The options have been granted at an exercise price of Rs 14.34 per share in respect of 85,000
shares.
78

Schedules forming part of the Balance Sheet
Rs. In ('000s)
As at 31st March, 2004 2003
2 Reserves and Surplus
Share premium account
Balance at the beginning of the year 500,518 507,064
Addition on issue of shares 491,502 6,257
Less: Calls in arrears 52 124
Less : Issue cost – 12,679
Closing balance 991,968 500,518
General reserve
Balance at the beginning of the year 550,773 510,773
Add : Transferred during the year 60,000 40,000
Closing balance 610,773 550,773
Debenture Redemption Reserve
Balance at the beginning of the year 29,664 29,664
Addition during the year 253 –
Closing balance 29,917 29,664
Capital Reserve
Balance at the beginning of the year 1,000 1,000
Addition during the year – –
Closing balance 1,000 1,000
Employee stock option
Employee stock options outstanding 8,219 8,763
Add : Grant of Options at discount – 370
Less : Conversion of Option 5,283 231
Less : Cancellation of Option 884 683
2,052 8,219
Deferred employee stock compensation 2,113 4,465
Add : Grant of Options at discount – 370
Less : Amortisation of ESOP expense 1,436 2,039
Less : Cancellation of Option 138 683
539 2,113
Net Employee Stock option 1,513 6,106
Profit and loss account
Balance 496,938 235,883
Total 2,132,109 1,323,944
3 Secured Loans
note
Term loan 1 350,000 200,000
Convertible Debentures 2 – 500,000
Non Convertible Debentures 3 140,000 140,000
Working capital facilities 4 528,414 345,496
Other loans 5 11,015 8,068
Total 1,029,429 1,193,564
Notes :
1. Term loan is secured by the equitable mortgage of assets as a security.The creation of Charge is under process.
2 5% Convertible Debentures aggregating to Rs. 5,000 Lakhs issued to CDC Financial Services (Mauritius) Ltd. and South
Asia Regional Fund were converted into 8,185,570 fully paid up equity shares of Rs. 2 each at a premium of Rs.59.08
per share as per the agreement based on predetermined price earning ratio on the profits for the year ended March
31,2003 at the meeting of board of directors held on September 29,2003.
79

Schedules forming part of the Balance Sheet
3 Non convertible debentures 'NCD' includes:
a) 10.05% NCD - A series aggregating Rs. Nil (Previous year Rs 50 million), allotted on September 7, 2001with a put
and call option after twelve months and redeemable after three years.
b) 10.35% NCD - B series aggregating Rs Nil (Previous year Rs. 90 million, allotted on September 7, 2001 with a call
option after twelve months and redeemable after three years.
All the above debentures are secured by way of a mortgage favouring the debenture trustees on the land and
buildings, plant and machinery and other fixed assets and hypothecation of all movable assets (except raw materials
and book debts, both present and future), situated at the research and development center at Mahape, Navi Mumbai.
4 Working capital loan from banks are secured by hypothecation of stocks of raw materials, packing materials, finished
goods, work in progress, receivables etc. They are additionally secured by way of personal guarantees of some of the
directors and equitable mortgage on fixed assets at the manufacturing facility at Nasik and research and development
centre at Sinnar, Nasik.
5 Other loans are secured by way of hypothecation of vehicles.
Rs. In ('000s)
As at 31st March, 2004 2003
4 Unsecured Loans
Short term loan 105,117 –
Security deposit 3,752 43,375
Deferred Sales Tax Loan 10,445 10,445
Other Deposits – 44
Total 119,314 53,864
Notes :
1. The Company has availed of an interest free sales tax deferral loan under Part I of the 1983 and 1988 Package
Schemes of the Government of Maharashtra, repayable after twelve years in six half-yearly installments.
5 Deferred Tax Liability [Refer Note (1) (x) of Schedule 22]
Liabilities
Depreciation 291,291 263,116
Others 1,890 6,740
Total 293,181 269,856
6 Fixed Assets [refer note (1) (ii) and (6) of Schedule 22]
(Rs. In '000s)
GROSS BLOCK DEPRECIATION NET BLOCK
As on Additions Sales/Disposals As on As on For the year Sales/ As on As on As on
1st Apr, during during 31st Mar, 1st Apr, Disposals 31st Mar, 31st Mar, 31st Mar,
2003 the year the year 2004 2003 of Assets 2004 2004 2003
Freehold Land 5,710 – – 5,710 – – – – 5,710 5,710
Leasehold Land 21,125 35,914 – 57,039 775 505 – 1,280 55,759 20,350
Factory Buildings 87,030 72,257 – 159,287 18,936 3,770 – 22,706 136,581 68,094
Other Buildings & Premises 222,411 44,999 – 267,410 12,213 3,832 – 16,045 251,365 210,198
Plant and Machinery 55,627 140,688 9,196 187,119 10,595 11,353 706 21,242 165,877 45,032
Furniture and Fixtures 101,770 27,326 154 128,942 23,269 12,070 7 35,332 93,610 78,501
Equipments 373,233 170,982 8,281 535,934 71,219 37,562 203 108,578 427,356 302,014
Vehicles 29,543 8,502 6,021 32,024 12,981 4,792 4,451 13,322 18,702 16,562
Brands 350,069 – – 350,069 93,352 35,007 – 128,359 221,710 256,717
Total 1,246,518 500,668 23,652 1,723,534 243,340 108,891 5,367 346,864 1,376,670 1,003,178
Previous Year 1,416,755 213,172 383,409 1,246,518 175,581 103,326 35,567 243,340 1,003,178 1,241,174
Capital Work-in-process including Capital advances. 244,966 232,471
80

Schedules forming part of the Balance Sheet
Notes :
1. Equipment and vehicles include assets aggregating Rs.19,308 (2003 -- Rs.19,559) [net book value as at March 31, 2004 -- Rs. 14,338 (2003 – Rs.17,023)] and Rs. 5,536
(2003 -- Rs. 5,536) [net book value as at March 31, 2004 -- Rs. 3,708 (2003 -- Rs. 4,631)], respectively, which have been acquired on finance lease.
2. Additions to assets include Rs. 4,488 being borrowing costs.
3. Estimated amount of contracts remaining to be executed on capital account, net of advances, not provided for as at March 31, 2004 aggregate Rs. 59,039 (2003 --
Rs.14,566)
4. Capital Work in progress includes : 2004 2003
Cost of Ankleshwar Plant plus addition thereto 68,157 160,283
Capitalisation of Interest & Relevant costs of Ankleshwar Plant – 16,653
Cost of Goa Plant plus addition there to 57,145
Capital Advances 109,854 49,667
Other work-in-processes 9,810 5,868
Rs. In ('000s)
As at 31st March, 2004 2003
7 Investments [refer Note (1)(iv) of Schedule 22]
LONG TERM INVESTMENTS
Quoted - traded
Equity shares
9,000 (2003 – 9,000) Bank of India of Rs.10 each [Market Value Rs. 530 (2003 – Rs. 341)] 405 405
1,718 (2003– 1,000) IDBI Bank Limited of Rs. 10 each [Market Value Rs. 85 (2003-- Rs. 23)] 34 18
439 423
Unquoted - non trade
National Savings Certificate -Sixth Issue 48 48
1 (2003 – 1) Time share of Dalmia Resorts Limited 20 20
1 (2003 – 1) equity share of Esquados 340,000 of Glenmark
Pharmaceutica Limitada, Lisbon (Portugal) 48 48
1,93,665 (2003 – 193665) shares of Bharuch Eco-Aqua Infrastructure Limited of Rs. 10
each, fully paid up (Previous year Rs. 4 per share was paid up). 1,937 775
100,000 12% cumulative preference shares of Rs 100 each fully
paid up of Cheryl Laboratories (P) Limited 10,000 10,000
1,350,000 7% cumulative preference shares of Rs 100 each fully
paid up of Glenmark Laboratories Limited 135,000 135,000
Investments in subsidiary companies
a) 100,000 (2003 – 100,000) equity shares of Rs 10 each
fully paid up of Glenmark Exports Limited 1,000 1,000
b) 100,000 (2003 – 100,000) equity shares of Rs 10 each
fully paid up of GM Pharma Limited 1,000 1,000
c) Investment in equity and chartered of Glenmark Impex LLC, Russia 12,812 12,812
[Roubles 8,235,958 (2003 - 8,235,958)]
d) Glenmark Pharmaceuticals Inc.USA 110,492 –
[2400000 shares of USD 1 each]
e) Glenmark Farmaceutica Ltda, Brazil [Reals 1118857] 17,526 –
f) Glenmark Philippines Inc., Philippines 9,325 –
[Share capital -Pesos 11200000 (INR 9050) and
Share application money Pesos 340260 (INR 275)]
299,208 160,703
Total 299,647 161,126
81

Schedules forming part of the Balance Sheet
Rs. In ('000s)
As at 31st March, 2004 2003
8 Deferred Tax Assets [Refer Note (1) (x) of Schedule 22]
Assets
Provision for Bad Debts and Doubtful Advances 23,102 13,340
Other 525 2,043
Total 23,627 15,383
9 Inventories [Refer Note (1) (v) of Schedule 22]
(As certified by the management)
Raw materials 280,413 120,987
Packing material 29,685 29,793
Work-in-process 223,462 51,850
Stores & Spares 2,574 3,419
Finished goods 285,467 238,322
Total 821,601 444,371
10 Sundry Debtors
Outstanding for more than six months
Secured, considered good – –
Unsecured, considered good 147,936 193,971
Unsecured, considered doubtful 38,998 27,198
186,934 221,169
Less: Provision for doubtful debts 38,998 27,198
147,936 193,971
Other debts-
Secured, considered good – –
Unsecured, considered good 1,156,877 1,042,720
1,156,877 1,042,720
Total 1,304,813 1,236,691
Debts due from Glenmark Exports Limited, subsidiary company, aggregate Rs 218,617 (2003 -- Rs 181,309).
11 Cash and Bank Balances
Cash in hand 836 619
Balances with Schedule banks
– Current accounts 18,244 7,653
– Margin Money Account 42,092 17,283
– EEFC Account 2,203 10,803
– Deposit accounts 4,319 4,160
Total 67,694 40,518
The balances in the margin money accounts are given as security against guarantees issued by banks on behalf of the
Company.
82

Schedules forming part of the Balance Sheet
Rs. In ('000s)
As at 31st March, 2004 2003
12 Loans and Advances (unsecured, considered good)
Glenmark Laboratories Limited * 17,985 267,988
Advances to subsidiaries
Glenmark Pharmaceuticals Inc., U.S.A. [Maximum during the year – 7,944
Rs. 7,944 (Previous Year -- Rs. 7,944)]
Glenmark Exports Limited [Maximum during the year Rs 13,673 13,673 4,848
(Previous Year -- Rs 4,848)]
Glenmark Farmaceutica Ltda, Brazil [Maximum during the year 1,139 –
Rs. 1,139 (Previous year - Rs.Nil)]
Advance to Vendors 130,275 85,161
Advances recoverable in cash or kind or for value to be received 149,681 82,345
Balance with Excise authorities 19,620 13,530
Deposits 59,890 40,888
Total 392,263 502,704
* Last year being an associate company [maximum amount outstanding during the year Rs. 267,988]
13 Current Liabilities
Acceptances 92,842 62,618
Sundry creditors - Small scale industrial undertakings [Refer note (5) of Schedule 22] 20,867 16,474
- Others 350,891 309,111
Investor Education and Protection Fund shall be credited by
– Unclaimed Dividend 2,364 1,974
[There are no amounts due and outstanding to be credited to
Investor Education and Protection Fund.]
Advances from Customers 3,049 1,206
Payable to Subsidiaries
– Glenmark Pharmaceuticals Inc., U.S.A. 199 –
Other Liabilities 138,662 115,108
Interest accrued but not due 8,242 24,686
Interim Dividend on Equity Shares 77,020 66,114
Tax on Interim Dividend 9,868 8,471
Tax on Preference Dividend 1,345 –
Total 705,349 605,762
14 Provisions
Wealth tax 300 300
Income-tax (net of advance tax) [Refer Note (1) (x) of Schedule 22] 37,472 9,917
Provision for Gratuity and leave encashment 2,000 1,500
Total 39,772 11,717
15 Miscellaneous Expenditure [(refer Note (1) (vii) of Schedule 22]
(to the extent not written off or adjusted)
Implementation Expenses of ERP system 1,147 5,737
Product launch, investigation and registration expenses 5,272 18,339
Total 6,419 24,076
83

Schedules forming part of the Profit and Loss Account
Rs. In ('000s)
For the year ended 31st March, 2004 2003
16 Sales [(refer Note (1) (viii) of Schedule 22]
Sale of goods* 3,796,569 3,326,949
Income from services 10,037 9,416
Total 3,806,606 3,336,365
* includes sales tax and excise duty aggregating Rs 255,771 (2003 – Rs 251,600) and Rs 340,561 (2003 – Rs 307,802)
respectively.
17 Other Income
Lease Rent [tax deducted at source Rs.403 (Prev year – Rs. 302)] 1,920 23,940
Interest Income [tax deducted at source Rs. 400 (Prev year – Rs. 427)] 2,333 1,433
Dividend received 1,245 20
Exchange gain 4,642 4,109
Export Incentive 7,613 61
Profit on sale of fixed assets 128 1,631
Miscellaneous income 16,692 11,629
Total 34,573 42,823
18 Cost of Sales
Salary, wages and allowances 38,320 29,565
Labour charges 82,227 61,133
Consumption of raw & packing materials 966,088 712,886
Purchase of Trading goods 286,013 306,895
Excise duty paid 308,398 327,169
Sales tax 255,771 251,600
Power, fuel and water charges 31,365 7,462
Consumable stores 24,583 15,601
Repairs and maintenance - plant and machinery 17,066 5,513
Rent, rates and taxes 1,578 1,560
Other manufacturing expenses 540 2,638
(Increase)/decrease in inventory (218,758) (77,942)
Total 1,793,191 1,644,080
84

Schedules forming part of the Profit and Loss Account
Rs. In ('000s)
For the year ended 31st March, 2004 2003
19 Selling and Operating Expenses
Salary and allowances 256,391 204,693
Staff welfare 7,801 7,455
Directors' salaries and allowances 44,762 25,514
Incentive and commission 40,978 31,923
Sales promotion expenses 184,386 184,292
Export Commission 7,935 11,107
Commission on sales 4,154 34,678
Travelling expenses 151,626 133,243
Freight outward 71,847 92,774
Telephone expenses 19,431 13,948
Rates and taxes 14,040 8,719
Provision for doubtful debts 11,800 16,000
Provision for doubtful advances – 4,000
Insurance premium 9,173 7,437
Electricity charges 7,258 7,805
Rent 12,975 11,440
Repairs & Maintenance 39,135 24,029
Auditors remuneration
Audit fees 1,100 750
Other matters 1,020 620
Out of pocket expenses 30 5
Loss on sale of assets 848 137
Other operating Expenses 178,336 121,848
Total 1,065,026 942,417
20 Interest Expense
On loans from banks 35,777 30,713
Other interest 64,801 76,171
Total 100,578 106,884
21 Research and Development Expenses [refer Note (1) (ix) of Schedule 22]
Salary and other allowances 71,328 41,406
Staff welfare expenses 4,633 2,527
Directors Remuneration 2,517 1,368
Consumable & Chemicals 80,560 52,971
Electricity charges 12,777 9,542
Repairs and maintenance 12,192 7,709
Insurance premium 283 377
Other expenses 63,783 31,357
Total 248,073 147,257
85

Schedules forming part of the Financial Statements
For the year ended 31st March, 2004
22 Notes to the Financial Statement
1) SIGNIFICANT ACCOUNTING POLICIES
i) Basis of Accounting
The financial statements are prepared under the historical cost convention, on the accrual basis of accounting, in
conformity with accounting principles generally accepted in India.
ii) Fixed assets and depreciation
Fixed assets are stated at cost less accumulated depreciation. The Company capitalises all costs relating to the
acquisition and installation of fixed assets. Expenditure of revenue nature, incurred in setting up of new projects, is
capitalised as an indirect cost towards construction of the fixed assets. Exchange differences relating to the
acquisition of fixed assets are adjusted in the cost of the assets.
Depreciation is provided using the straight line method, pro-rata to the period of use of assets, based on the useful
lives of fixed assets as estimated by management, or at the rates specified in Schedule XIV of the Companies Act,
1956, whichever is higher.
Fixed assets having aggregate cost of Rs 5,000 or less are depreciated fully in the year of acquisition.
The company has estimated the useful life of its assets as follows:
Category
Estimated useful life
(in years)
Plant and machinery 8 - 20
Vehicles 5 - 6
Equipments and air conditioners 4 - 20
Furniture and fixtures 10
Brands 10
Leasehold land is amortised over the period of lease.
iii) Foreign currency transactions
Foreign currency transactions during the year are recorded at the rates of exchange prevailing on the date of the
transaction. Foreign currency assets and liabilities are translated into rupees at the exchange rates prevailing on the
date of the balance sheet. All exchange differences are dealt with in the statement of profit and loss, except those
relating to the acquisition of fixed assets, which are adjusted in the cost of the respective fixed assets.
iv) Investments
Long term investments are stated at cost. Provision, where necessary, is made to recognise a decline, other than
temporary, in the value of the investments.
v) Inventories
Inventories of raw materials, packing materials, work-in-process and finished goods are valued at cost or net
realisable value, whichever is lower. Cost of raw materials and packing materials is ascertained on a first-in-first out
basis. Cost of work-in-process and finished goods includes the cost of materials consumed, labour and
manufacturing overheads. Excise and customs duty accrued on production or import of goods, as applicable, is
included in the valuation of inventories.
vi) Employee Benefits
Retirement benefits to employees comprise payments towards gratuity, superannuation and provident fund under
the schemes of the Company and encashment of leave. Annual contributions to the superannuation and provident
funds are charged to the statement of profit and loss.
The employee leave encashment and gratuity schemes are administered through the Life Insurance Corporation of
India. Annual contributions as determined by the LIC are charged to the statement of profit and loss.
86

Schedules forming part of the Financial Statements
For the year ended 31st March, 2004
22 Notes to the Financial Statement (Contd.)
In respect of stock options granted to employees under the Company’s Employee Stock Option Plan (‘ESOP’), the
excess of the market price of the share at the date of grant of the option over its exercise price is treated as a form
of employee compensation in the financial statements of the company. This amount is amortised on a straight-line
basis over the vesting period. The unamortised portion is carried forward as deferred employee compensation.
vii) Miscellaneous expenditure
Product launch expenditure
Earlier years' expenditure on launch of new products and their sales promotion is being amortised over a period of
three years.
Implementation expenses of Enterprise Resource Planning system.
Earlier year’s expenditure incurred on payments for infrastructure facilities and expenditure incurred on user license
fees for an Enterprise Resource Planning system is being amortised over a period of thirty-six months.
viii) Revenue recognition
The Company recognises revenues on despatch of goods to customers. Revenues from services are recognised on
completion of such services. Revenues are recorded at invoice value, inclusive of excise duty and sales-tax, but net
of returns and trade discounts.
ix) Research and development
Capital expenditure on research and development ('R&D') is capitalised as fixed assets. Other expenditure on R&D
is expensed as incurred.
x) Income-tax
Provision for current income-taxes is made on the assessable income at the tax rate applicable to the relevant
assessment year. Deferred income taxes are recognised for the future tax consequences attributable to timing
differences between the financial statement determination of income and their recognition for tax purposes. The
effect on deferred tax assets and liabilities because of a change in tax rates is recognised in statement of profit and
loss using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.
Deferred tax assets are recognised and carried forward only to the extent that there is a reasonable certainty that
sufficient future taxable income will be available against which such deferred tax assets can be realised.
Prior / Earlier year's income tax is charged to the Profit and Loss account on payment and the same is disclosed
separately.
xi) Leases
Finance leases
Assets acquired under finance lease are recognised as assets with corresponding liabilities in the balance sheet at
the inception of the lease at amounts equal to the fair value of the leased asset or, if lower, at the present value of
the minimum lease payments. These leased assets are depreciated in line with the Company’s policy on
depreciation of fixed assets. The interest is allocated to periods during the lease term so as to produce a constant
periodic rate of interest on the remaining balance of the liability for each period.
Operating leases
Lease payments for operating leases are recognised as expense on a straight-line basis over the lease term.
Lease income from operating leases is recognised as income on a straight-line basis over the lease term. Initial
direct costs are recognised immediately as an expense.
2) EARNINGS PER SHARE
Basic earnings per share are calculated by dividing the net profit for the year attributable to equity shareholders (net
profit for the year less dividends on preference shares) by the weighted average number of equity shares
outstanding during the year.
87

Schedules forming part of the Financial Statements
For the year ended 31st March, 2004
22 Notes to the Financial Statement (Contd.)
For the purpose of calculating diluted earnings per share, the net profit attributable to equity shareholders and the
weighted average number of shares outstanding are adjusted for the effects of all dilutive potential equity shares
from the exercise of options on unissued share capital. The number of equity shares is the aggregate of the
weighted average number of equity shares and the weighted average number of equity shares, which would be
issued on the conversion of all the dilutive potential equity shares into equity shares. Options on unissued equity
share capital are deemed to have been converted into equity shares on the date when the options are exercised.
The calculations of earnings per share (basic and diluted) are based on the earnings and number of shares as
computed below.
Rs. In ('000s)
Reconciliation of earnings 31st March, 2004 31st March, 2003
Profit after tax for the financial year 420,041 331,895
Less: Preference dividends 10,500 10,500
Dividend tax on preference shares 1,345 –
Net profit attributable to equity shareholders for calculation of Basic EPS 408,196 321,395
Add : Interest accrued on Convertible Debentures less tax thereon – 15,333
Net profit attributable to equity shareholders for calculation of Diluted EPS 408,196 336,728
Reconciliation of number of shares
Shares
Shares
Weighted average number of shares:
For basic earnings per share 55,111 50,780
Add: Deemed exercise of options on unissued equity share capital 274 215
Conversion of Debentures – 8,515
For diluted earnings per share 55,385 59,510
Earnings per share (nominal value Rs 2 each) Rs Rs
Basic 7.41 6.33
Diluted 7.37 5.67
3) SEGMENT INFORMATION
Business segments
The Company is primarily engaged in a single segment business of manufacturing and marketing of pharmaceuticals
formulations and active ingredients and is managed as one entity, for its various activities and is governed by a similar
set of risks and returns.
Geographical segments
The operations of the Company are largely confined to India, with exports contributing to 17.17 percent of its annual
sales. Hence, in the view of the management, the Indian and export markets represent geographical segments.
Sales by market -- The following is the distribution of the Company's sale by geographical market:
2004 2003
Geographical segment Rs. In '000s Rs. In '000s
India 3,152,961 3,023,242
Other than India* 653,645 313,123
Total 3,806,606 3,336,365
* includes deemed exports aggregating Rs 152,642 (2003 – Rs. 126,723)
88

Schedules forming part of the Financial Statements
For the year ended 31st March, 2004
22 Notes to the Financial Statement (Contd.)
Assets and additions to fixed assets by geographical area – The following table shows the carrying amount of segment
assets and additions to fixed assets by geographical area in which the assets are located:
India Others* India Others*
2004 2004 2003 003
Rs. In '000s Rs. In '000s Rs. In '000s Rs. In '000s
Carrying amount of segment assets 3,773,369 459,143 3,119,819 237,323
Additions to tangible assets 500,669 – 213,172 –
* Others represent receivables from debtors located outside India including those related to deemed exports.
4) RELATED PARTY DISCLOSURES
a) Parties where control exists
Wholly owned subsidiary companies
Glenmark Exports Limited
GM Pharma Limited
Glenmark Impex LLC , Russia
Glenmark Farmaceutica Ltda, Brazil
Glenmark Philippines Inc., Philippines
Glenmark Pharmaceuticals (U.K.) Ltd , U.K.
Subsidiary companies
Glenmark Pharmaceuticals inc, USA
b) Related party relationships where transactions have taken place during the year
Subsidiary Companies
Glenmark Exports Limited
Glenmark Pharmaceuticals Inc., USA
Glenmark Farmaceutica Ltda, Brazil
Glenmark Philippines Inc., Philippines
Key management personnel (includes directors of the Company)
Mrs B.E. Saldanha
Mr Glenn Saldanha
Mrs Cheryl Pinto
Mr. R.V. Desai
Mr. A.S. Mohanty
Mr. S.A. Paigankar (Resigned on 29.03.04)
c) Transactions with related parties during the year
Rs. In ('000s)
31st March,
31st March,
2004 2003
Subsidiary company
Sale of finished products 150,750 126,723
Glenmark Exports Limited 149,009 126,723
Glenmark Pharmaceuticals Inc, USA 1,741 –
Lease rent received from Glenmark Laboratories Ltd – 22,500
Advances given 2,223 –
Glenmark Pharmaceuticals Inc., USA 1,084 –
Glenmark Farmaceutica Ltda, Brazil 1,139 –
89

Schedules forming part of the Financial Statements
For the year ended 31st March, 2004
22 Notes to the Financial Statement (Contd.)
c) Transactions with related parties during the year (Contd.)
Rs. In ('000s)
31st March,
31st March,
2004 2003
Purchase of finished goods from Glenmark Pharmaceuticals Inc, USA 3,025
Reimbursement of expenses to Glenmark Exports Limited 26,740 15,111
Purchase of fixed assets from G M pharma Limited – 39,671
Share application money Glenmark Impex LLC – 4,193
Investment in Share Capital 129,399 –
Glenmark Pharmaceuticals Inc, USA 102,548 –
Glenmark Farmaceutica Ltda, Brazil 17,526 –
Glenmark Philippines Inc Philippines 9,325 –
Associate enterprises
Sale of fixed assets to Glenmark Laboratories Limited – 345,000
Investment in Preference Share Capital
of Glenmark Laboratories Limited – 135,000
Corporate guarantees given for Glenmark Laboratories Limited – 50,000
* glenmark Laboratories Limited [Last year being an associate company]
Key management personnel
Professional fees – 61
Share in profit of Cardiac Centre – 59
Remuneration paid to these personnel have been
disclosed in note 8 of Schedule 22
Personal guarantees given by directors have been disclosed in Schedule 3
d) Related party balances
Receivable from wholly owned subsidiary companies 233,429 189,253
Glenmark Exports Limited 232,291 181,309
Glenmark Farmaceutica Ltda, Brazil 1,138 –
Glenmark Pharmaceuticals Inc, USA – 7,944
Payable to subsidiary company
Glenmark Pharmaceuticals Inc, USA 199 –
Receivable from associate enterprises
Glenmark Laboratories Limited – 267,988
e) Debts written off / Provisions make against related party balances
Debts written off of wholly owned subsidiary company
(provided for the same in 2001-02) – 10,300
5) OUTSTANDING DUES TO SMALL SCALE INDUSTRIAL UNDERTAKINGS
The small scale industrial undertakings to whom amounts are outstanding for
more than 30 days are:
Alcap Containers Pvt Ltd 456 21
Blown Enterprise 76 –
Corneilo Packaging 59 –
Joy Enterprise 3 3
K K Alu Foil 706 105
K Laminates 249 71
Manju Industrial Ancillaries 126 –
Print Paks (India) 26 26
90

Schedules forming part of the Financial Statements
For the year ended 31st March, 2004
22 Notes to the Financial Statement (Contd.)
Rajlaxmi Plastics 330 –
Super Label Mfg Co. 14 14
Varsha Plast 2 2
Waxoils Pvt Ltd 126 3
Aviditya Chem. Corpn. 36 –
Plascap Industries 162 2
Mahesh Industry 3,306 –
Kraft-Pack Containers 94 –
Autofits 13 –
Crown Closures Pvt Ltd 186 –
D M Printers 32 –
Servewell Printers 1,086 166
Pharma Plastics 254 251
Desicca Chemicals 1 1
Renuka Industries 73 –
Carewell Printers Pvt. Ltd. – 3
Standard Packprints Pvt Ltd 207 86
Eskay Packaging 107 –
Mahalsa Chemicals – 2
Bina Packaging & Printers Pvt Ltd 413 217
Supreme Alutainers p. ltd 91 –
Akshar Ent. 4 –
Dayaram Chemicals 128 –
Plastic pigments p. ltd 8 –
Devi Industrial Corporation – 14
Minicon Enterprises – 131
Synthochem Pvt. Ltd. 59 30
Urmi Chemicals – 156
8433 1,304
Amount outstanding for less than 30 days 12,434 15,170
Total 20,867 16,474
6) LEASES
a) The Company has entered into operating and finance lease agreements for
the rental of property, vehicles,computers, equipment and other assets.
Typically, lease agreements are for a period of three to five years.
At March 31 2004, the Company had commitments under
non-cancellable finance leases as follows:
Rs. In ('000s)
31st March, 31st March, 2003
2004 2003
Minimum lease payments
Due within one year 7,368 8,875
Due later than one year and not later than five years 4,146 11,514
Total 11,514 20,389
Present value of minimum lease payments
Due within one year 5,528 7,454
Due later than one year and not later than five years 2,728 8,256
Total 8,256 15,710
91

Schedules forming part of the Financial Statements
For the year ended 31st March, 2004
22 Notes to the Financial Statement (Contd.)
b) The Company has leased out its manufacturing facility at Panoli,
Gujarat and the same has been capitalised in the books of account in
accordance with Accounting Standard 19 - "Leases" issued by The
Institute of Chartered Accountants of India in this regard.
Rs. In ('000s)
31st March, 2004 31st March, 2003
Depreciation has been provided based on the estimated useful life of the asset.
(i) Details in respect of assets given on operating Lease
Gross Block
Leasehold Land 4,259 4,259
Factory Buildings 22,065 22,065
Plant and Machinery 5,838 5,838
Equipments 3,764 3,764
Furniture and Fixtures 165 165
36,091 36,091
Accumulated depreciation
Leasehold Land 172 129
Factory Buildings 3,302 2,566
Plant and Machinery 1,104 826
Equipments 1,272 971
Furniture and Fixtures 66 49
5,916 4,541
Depreciation 1,375 1,375
(ii) The lease income of Rs.1,920 (Previous Year -- Rs. 1,440) has been
accrued on the basis of the lease agreement executed with the lessees.
This lease is cancellable by notice of 30 days on either side.
c) The Company has taken on operating lease a Bulk Drug Plant at
Kurkumbh and godowns/residential & office premises at various
locations in the country.
i) The Company's significant leasing arrangements are in respect of the
above plant, godowns & premises (Including furniture and fittings
therein, as applicable ). The aggregate lease rentals payable are charged
to Profit and Loss Account as Rent in Schedule 18 & 20.
ii) The Leasing arrangements which are cancellable range between
11 months and 3 years. They are usually renewable by mutual consent
on mutually agreeable terms. Under these arrangements, generally
refundable interest free deposits have been given. An amount of Rs.13,742
towards deposit and unadjusted advance rent is recoverable from the lessor.
92

Schedules forming part of the Financial Statements
For the year ended 31st March, 2004
22 Notes to the Financial Statement (Contd.)
7) CONTINGENT LIABILITIES NOT PROVIDED FOR
Rs. In ('000s)
31st March, 2004 31st March, 2003
Bank guarantees 9,981 6,856
Corporate guarantee 50,000 50,000
Disputed taxes/duties – 3,185
Labour / Industrial disputes 1,120 –
Open letters of credit 83,350 43,853
Call Money payable to Bharuch Eco-aqua Infrastructure (@Rs. 6/- per share) – 1,162
Sundry debtors factored with recourse option 91,677 126,285
Channel financing with recourse option 14,159 –
8) COMPUTATION OF NET PROFITS IN ACCORDANCE WITH
SECTION 349 AND SECTION 309(5) OF THE COMPANIES ACT, 1956
Profit before taxation as per statement of profit and loss 525,420 435,224
Add: Depreciation as per statement of profit and loss 108,891 103,326
Provision for Doubtful Debts & Advances 11,800 20,000
Loss on sale of assets as per statement of profit and loss 848 137
646,959 558,687
Less: Depreciation calculated under section 350 of the
Companies Act, 1956 108,891 103,326
Profit on sale of assets as per statement of profit and loss 128 1,631
Net profit in accordance with Section 349 537,940 453,730
Add: Managerial remuneration paid/payable to directors 48,850 29,268
Net profit in accordance with Section 309(3) of the 586,790 482,998
Companies Act, 1956
Maximum managerial remuneration allowed under Section 198 of the
Companies Act, 1956, 10 per cent of the above 58,679 48,300
Managerial remuneration paid/payable to directors
Salaries 15,742 10,976
Commission 26,806 7,501
Perquisites 1,571 2,386
Sitting Fees 201 37
Contribution to PF & Superannuation Fund 2,234 935
Gratuity – 5,669
Other benefits / reimbursements 2,296 1,764
Total 48,850 29,268
Name of Directors 2004 2003
1 Mr. Gracias Saldanha 10,104 7,660
2. Mrs. B. E. Saldanha 7,177 5,155
3. Mr. Glenn Saldanha 14,560 5,752
4. Mrs. Cheryl Pinto 7,411 3,365
5. Others 9,598 7,335
93

Schedules forming part of the Financial Statements
For the year ended 31st March, 2004
22 Notes to the Financial Statement (Contd.)
9) CAPACITY, PRODUCTION, SALES AND STOCKS
(a) Capacities and actual production (includes samples)
Rs. In ('000s)
Class of goods Installed capacity Actual production
UoM 2004 2003 2004 2003
Injectibles Ltrs – – 75,646 69,958
Liquid orals Ltrs 2,475,000 2,475,000 1,860,730 1,684,833
Lotions and externals Ltrs 450,000 450,000 385,689 393,566
Ointments and creams Kgs 780,000 330,000 408,965 449,075
Solids and powders Kgs 105,000 105,000 198,151 139,305
Tablets and capsules Nos 240,000,000 240,000,000 385,100,000 381,500,000
Bulk drugs Kgs 60,000 – 18,832 6,681
Notes:
(i) The products of the Company are exempt from licencing procedures.
(ii) Installed capacity, being a technical matter, has not been verified by the auditors However, the management has
certified the same.
(iii) Actual production includes goods manufactured at third party manufacturing facilities on loan licence basis and at
leased facilities.
(iv) Installed capacity of Ointment and cream has been increased due to production started at Goa plant from
23.03.2004.
(b) Sales
Rs. In ('000s)
Product 2004 2003
UoM Qty Value Qty Value
Injectibles Ltrs 76,211 139,548 62,481 111,086
Liquid orals Ltrs 2,298,267 676,726 2,007,858 573,725
Lotions and externals Ltrs 492,514 435,245 445,512 433,673
Ointments and creams Kgs 407,882 723,888 429,302 718,635
Solids and powders Kgs 186,404 68,423 128,615 49,669
Tablets and capsules Nos 441,025,700 1,433,031 407,300,000 1,366,315
Bulk drugs 295,681 68,979
Cardiac diagnostic services 10,037 9,416
Others 24,027 4,867
Total 3,806,606 3,336,365
1. Sales are net of sales returns.
2. Sales quantities does not include free issues, samples and breakages.
(c) Finished goods purchased (includes samples)
Rs. In ('000s)
Product 2004 2003
UoM Qty Value Qty Value
Injectibles Ltrs 1,293 1,699 9,734 33,698
Liquid orals Ltrs 445,181 80,331 515,182 73,437
Lotions and externals Ltrs 147,840 41,184 90,916 28,856
Ointments and creams Kgs 13,553 12,328 11,530 11,943
Tablets and capsules Nos 65,887,200 132,944 75,659,900 158,961
Bulk Drugs/ Drug intermediate 2,797 17,527
Total 286,013 306,895
94

Schedules forming part of the Financial Statements
For the year ended 31st March, 2004
22 Notes to the Financial Statement (Contd.)
(d) Raw and packing materials consumed (quantities in kgs)
Rs. In ('000s)
Product 2004 2003
Qty Value Qty Value
Valdecoxib 2,698 60,191 2,113 77,327
Etoricoxib 840 59,742 – –
Rosuvastatin Calcium 92 48,175 – –
Linezolid 702 21,852 655 26,332
Linezolid purified IV grade 242 6,946 118 8,439
Telmisartan 408 27,438 – –
Mupirocin 148 24,853 77 15,159
Cefuroxime sodium sterile BP / USP 678 19,843 – –
Cefdinir 445 18,914 521 26,325
Propylene Glycol I.P./ B.P. 264,335 17,337 181,486 11,523
Tacrolimus 1,587 16,373 – –
Acarbose 355 15,356 258 13,204
Glycerine Refined IP/BP 219,247 11,985 217,515 12,792
Sugar - S/30 888,662 11,806 790,453 10,259
Itraconazole Pellets 1,072 9,514 840 7,463
Pregelatinised starch BP/USP 4,188 9,134 – –
Sorbitol Soln 70% IP 448,457 9,099 408,756 8,042
Beclomethasone Dipropionate IP/BP 47 8,918 67 14,542
Cefuroxime Axetil 100% Amorophous 431 8,652 – –
Esomeprazole Mag Trihydrate 838 8,558 1,175 22,066
Ketoconazole IP/BP 1,214 8,432 966 6,797
Cilastazol 378 8,033 – –
Nateglinide 279 7,774 564 25,980
Others 527,163 – 426,636
966,088 712,886
(e) Break-up of Materials and Consumable stores consumed
Rs. In ('000s)
Product 2004 2003
Value % Value %
Materials
Imported materials 282,466 29.24 144,515 20.27
Indigenously procured 683,622 70.76 568,371 79.73
966,088 100.00 712,886 100.00
Consumable stores
Imported – – – –
Indigenously procured 24,583 100.00 15,601 100.00
24,583 100.00 15,601 100.00
95

Schedules forming part of the Financial Statements
For the year ended 31st March, 2004
22 Notes to the Financial Statement (Contd.)
(f) Inventories of finished goods (includes samples)
Rs. In ('000s)
Opening Stock
Closing Stock
2004 2003 2004 2003
Products UoM Qty Value Qty Value Qty Value Qty Value
Injectibles Ltrs 16,597 29,066 6,185 10,448 20,004 19,330 16,597 29,066
Liquid orals Ltrs 201,403 34,683 258,084 36,098 148,822 29,755 201,403 34,683
Lotions and externals Ltrs 40,772 14,959 39,596 14,048 63,206 21,578 40,772 14,959
Ointments and creams Ltrs 39,019 26,088 47,032 29,471 53,169 41,851 39,019 26,088
Solids and powders Kgs 5,876 1,228 6,739 1,947 15,680 2,874 5,876 1,228
Tablets and capsules Nos 70,909,000 132,247 56,086,700 113,676 67,633,200 157,822 70,909,000 132,247
Pesticides – 1,491 – –
Others 51 – 8,807 51
Bulk Drugs 3,451
238,322 207,179 285,468 238,322
10) VALUE OF IMPORTS ON CIF BASIS
Rs. In ('000s)
31st March, 2004 31st March, 2003
Capital Goods 76,821 30,509
Raw Materials 219,869 90,159
296,690 120,668
11) EARNINGS IN FOREIGN CURRENCY
Export of goods 486,384 179,496
Others 3,155 3,665
489,539 183,161
12) EXPENDITURE IN FOREIGN CURRENCY
Travelling expenses 4,568 8,149
Professional & Consultancy charges 34,847 10,687
Others 116,312 47,133
155,727 65,969
13) DIVIDEND REMITTANCE IN FOREIGN CURRENCY
Number of Non-resident Shareholders 12 13
Number of Equity Shares held by them 290,250 293,250
Amount of dividend paid (Gross), TDS Rs Nil (2003 -- Rs 71,739) 377,325 351,900
Year to which dividend relates 2002-2003 2001-2002
14) PRIOR YEAR COMPARATIVES
Prior year's figures have been regrouped wherever necessary.
96

Balance Sheet Abstract and Company’s General Business Profile
(a) Registration Details
Registration No. 1 9 9 8 2
State Code
Rs. In ('000s)
1 1
Balance Sheet Date
(b) Capital raised during the year
Public Issue
N I L
Bonus Issue
N I L
(c) Position of Mobilisation and Deployment of Funds
Total Liabilities and shareholders funds
4 5 3 7 7 0 0
Sources of Funds
Paid-up Capital
2 1 8 5 4 6
Secured loan
1 0 2 9 4 2 9
Application of Funds
Net fixed assets
1 6 2 1 6 3 6
Net current assets
1 8 4 1 2 5 0
Accumulated losses
N I L
(D) PERFORMANCE OF THE COMPANY
Turnover
3 8 0 6 6 0 6
Profit/(Loss) Before Tax
5 2 5 4 2 0
3 1 0 3 2 0 0 4
Date Month Year
Rights Issue
N I L
Private Placement
1 6 7 7 5
Total Assets
4 5 3 7 7 0 0
Reserves & Surplus
2 1 3 2 1 0 9
Unsecured loans
1 1 9 3 1 4
Investments
2 9 9 6 4 7
Miscellaneous expenditure
6 4 1 9
Total Expenditure
3 3 1 5 7 5 9
Profit/(Loss) After Tax
4 2 0 0 4 1
Basic Earnings per share in Rs.
7 . 4 1
Dividend rate
65%
(E) Generic Names of Three Principal Products of Company
Item Code No (ITC code)
3 0 0 4 9 0 . 9 9
3 0 0 4 9 0 . 9 9
3 0 0 4 8 0 . 0 0
Signatures to Schedules 1 to 22
Diluted Earnings per share in Rs.
7 . 3 7
Product Description
Clotrimazole
Valdecoxib
Terbutaline sulphate + Bromhexine Hydrocloride + Guaifenesin
For and on behalf of
Price Waterhouse
Chartered Accountants
Membership No. F 055913
For and on behalf ofthe Board of Directors.
Partha Ghosh M. J. Mendonza Glenn Saldanha Rajesh Desai
Partner Vice President - Legal & Managing Director & CEO Director - Finance
Mumbai, April 22, 2004
Company Secretary
97

SECTION 212
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956, RELATING TO COMPANY’S INTEREST
IN SUBSIDIARY COMPANIES:
Name of the Company Glenmark Exports GM Pharma Glenmark Glenmark Glenmark Glenmark Glenmark
Limited Limited Impex L.L.C Farmaceutica Pharmaceuticals Philippines Pharmaceuticals
Ltda. (U.K.) Ltd. Inc., Inc., USA
1. The financial year of the Subsidiary March 31, March 31, December 31, December 31, March 31, March 31, March 31,
Companies ended 2004 2004 2003 2003 2004 2004 2004
2. Date from which they became subsidiary September 10, October 5, March 7, November 18, February 10, January 28, December 10,
1996 1999 2001 2003 2004 2004 2002
3. a. Number of shares held by Glenmark 1,00,020 Equity 1,00,000 Equity 1 share of 111,88,57 Equity 99 shares of 56,000 2400,000 shares
Pharmaceuticals Ltd. in the subsidiary Shares of Rs. Shares of Rs. US $ 263740 £1.00 shares of of 1 $
companies at the end of financial year of 10/- each fully 10/- each fully 200 pesos each
Subsidiary Companies paid up paid up each
b. Extent of interest of holding Company 100% 100% 100% 100% 100% 100% 96%
at the end of the financial year of the
subsidiary companies
4. The net aggregate amount of the
subsidiary companies’ Profit/ (Loss)
so far as it concerns the members
of the holding company:
a. Not dealt within the holding
company’s accounts:
1) For the financial year ended Nil (7420) Nil Nil Nil Nil (63,70,683)
31st March, 2004
2) For the previous financial years of the Rs. 73,78,445 Nil Nil Nil Nil Nil Nil
Subsidiary Companies since they became
the holding company’s subsidiaries
b. Dealt within the holding
company’s accounts:
1) For the financial year ended Nil Nil Nil Nil Nil Nil Nil
31st March, 2004
2) For the previous financial years of Nil Nil Nil Nil Nil Nil Nil
the subsidiary companies since they
became the holding
company’s subsidiaries
98

Consolidated Auditors’ Report
To the Board of Directors of Glenmark Pharmaceuticals Limited on the Consolidated Financial Statements of
GLENMARK PHARMACEUTICALS LIMITED AND ITS SUBSIDIARIES
We have audited the attached consolidated Balance Sheet of Glenmark Pharmaceuticals Limited and its subsidiaries (the
Group), as at March 31, 2004, and also the consolidated Profit and Loss Account and the consolidated Cash Flow
Statement for the year ended on that date annexed thereto. These consolidated financial statements are the responsibility
of the Glenmark Pharmaceuticals Limited’s management and have been prepared by the management on the basis of
separate financial statements and other financial information regarding components. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material mis-statement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
We did not audit the financial statements of subsidiaries Glenmark Exports Limited, G M Pharma Limited, Glenmark Impex,
Russia, Glenmark Farmaceutica Ltda, Brazil, Glenmark Phillipines Inc, Phillipines and Glenmark Pharmaceuticals Inc, USA
whose financial statements reflect the Group’s share of total assets of Rs.405,498 (‘000’s) as at March 31, 2004 and the
Group’s share of total revenues of Rs.149,009 (‘000’s) and net cash inflows amounting to Rs.2,451 (‘000’s) for the year
ended on that date as considered in the consolidated financial statements. These financial statements and other
information of the subsidiaries and joint ventures have been audited by other auditors whose reports have been furnished
to us, and our opinion, in so far as it relates to the amounts included in respect of these subsidiaries is based solely on the
reports of other auditors.
We report that the consolidated financial statements have been prepared by the Glenmark Pharmaceuticals Limited’s
management in accordance with the requirements of Accounting Standard 21, Consolidated Financial Statements issued
by the Institute of Chartered Accountants of India.
Based on our audit and on consideration of the reports of other auditors on separate financial statements and on the other
financial information of the components, in our opinion and to the best of our information and according to the
explanations given to us, the attached consolidated financial statements give a true and fair view in conformity with the
accounting principles generally accepted in India:
(a) in the case of the consolidated Balance Sheet, of the state of affairs of Glenmark Pharmaceuticals Limited Group as at
March 31, 2004;
(b) in the case of the consolidated Profit and Loss Account, of the profit for the year ended on that date; and
(c) in the case of the consolidated Cash Flow Statement, of the cash flows for the year ended on that date.
For and on behalf of Price Waterhouse
Mumbai, July 5, 2004
Partha Ghosh
Partner
Membership Number – F 055913
Chartered Accountants
99

Consolidated Balance Sheet
Rs. In ('000s)
As at 31st March, Schedules 2004 2003
SOURCES OF FUNDS
Shareholders' Funds
a) Share capital 1 218,546 201,811
b) Reserves and surplus 2 2,125,091 1,331,038
2,343,637 1,532,849
Minority Interest - Share Capital 4,365 –
Loan Funds
a) Secured loans 3 1,029,429 1,193,564
b) Unsecured loans 4 119,314 53,864
1,148,743 1,247,428
Deferred Tax Liability 5 293,181 269,856
Total 3,789,926 3,050,133
APPLICATION OF FUNDS
Fixed Assets 6
a) Gross Block 1,838,830 1,247,428
b) Less : Depreciation 349,176 243,613
c) Net Block 1,489,654 1,003,815
d) Capital Work-in-progress 251,853 232,471
1,741,507 1,236,286
Investments 7 147,492 146,314
Deferred Tax Asset 8 28,153 15,383
Current Assets, Loans and Advances
a) Inventories 9 821,601 444,371
b) Sundry debtors 10 1,304,813 1,232,627
c) Cash and bank balances 11 81,255 45,699
d) Loans and advances 12 402,470 512,501
2,610,139 2,235,198
Less : Current Liabilities and Provisions
a) Current liabilities 13 727,726 607,749
b) Provisions 14 39,702 11,647
767428 619,396
Net Current Assets 1,842,711 1,615,802
Miscellaneous Expenditure 15 30,063 36,348
(to the extent not written off or adjusted)
Total 3,789,926 3,050,133
Notes to the Financial Statements 22
Schedules referred to above and notes attached there to form an integral part of the Balance Sheet.
This is the Balance Sheet referred to in our report of even date.
For and on behalf of
Price Waterhouse
Chartered Accountants
Membership No. F 055913
For and on behalf ofthe Board of Directors.
Partha Ghosh M. J. Mendonza Glenn Saldanha Rajesh Desai
Partner Vice President - Legal & Managing Director & CEO Director - Finance
Mumbai, July 5, 2004
Company Secretary
100

Consolidated Profit and Loss Account
Rs. In ('000s)
For the year ended 31st March, Schedules 2004 2003
INCOME
Sales & Operating Income 16 3,806,606 3,703,350
Other income 17 34,662 30,572
3,841,268 3,733,922
EXPENDITURE
Cost of sales 18 1,793,191 1,917,292
Selling and operating expenses 19 1,074,266 1,010,036
Depreciation 6 110,930 106,567
Interest 20 100,578 123,430
Research and development expenses 21 248,073 147,257
3,327,038 3,304,582
Profit Before Tax 514,230 429,340
Provision for taxation
– Current Year [includes wealth tax provision Rs. 300 (Prev. Year–Rs. 300)] 90,334 35,800
– Earlier Years – 18,429
– Deferred tax 10,555 49,600
Net Profit After Tax before minority interest 413,341 325,511
Share of loss transfer to Minority 265 –
Net Profit After Tax & Minority Interest 413,606 325,511
Balance Profit brought forward 243,262 42,836
Net Profit Available for Appropriation 656,868 368,347
Interim Dividend paid on pref shares 10,500 10,500
Tax on dividend paid on pref shares 1,345 –
Interim Dividend on Equity Shares 77,020 66,114
Tax on interim dividend paid on equity shares 9,868 8,471
Transfer to Debenture Redemption Reserve 253 –
Transfer to General Reserve 60,000 40,000
Balance Carried to Balance Sheet 497,882 243,262
Earnings per share (Rs.) (Refer Note 3 of Schedule 22)
Basic 7.29 6.20
Diluted 7.25 5.56
Face Value of Shares 2.00 2.00
Notes to the Financial Statements 22
Schedules referred to above and notes attached there to form an integral part of the Profit and Loss Account.
This is the Profit and Loss Account referred to in our report of even date.
For and on behalf of
Price Waterhouse
Chartered Accountants
Membership No. F 055913
For and on behalf ofthe Board of Directors.
Partha Ghosh M. J. Mendonza Glenn Saldanha Rajesh Desai
Partner Vice President - Legal & Managing Director & CEO Director - Finance
Mumbai, July 5, 2004
Company Secretary
101

Consolidated Cash Flow Statement
Rs. In ('000s)
Year ended 31st March, 2004 2003
A. Cash flow from operating activities:
Net Profit before tax 514,230 429,340
Adjustments for:
Depreciation 110,930 106,567
Interest Expense 98,677 121,859
Interest Expense - Finance lease 1,901 1,571
Interest Income (2,422) (1,433)
Income from Investment - Dividends (1,245) (20)
(Profit)/Loss on Fixed Assets sold 720 (1,494)
Deferred revenue expenditure written off 6,285 30,288
Provision for Doubtful Advances – 4,000
Provision for Bad & Doubtful Debts 11,800 16,000
Provision for Gratuity & Leave Encashment 500 1,500
Unrealised foreign exchange (gain) /loss (9,102) 965
Employee stock option plan (4,593) 1,808
Operating profit before working capital changes 727,681 710,951
Adjustments for changes in working capital :
– (increase)/decrease in Sundry Debtors (75,705) (424,482)
– (increase)/decrease in Other Receivables (125,596) (104,144)
– (increase)/decrease in Inventories (377,230) 38,719
– increase/(decrease) in Trade and Other Payables 146,856 26,151
Cash generated from operations 296,006 247,195
– Taxes (Paid) / Received (Net of Tax deducted at source) (62,379) (49,075)
Net cash from operating activities 233,627 198,120
B. Cash flow from Investing activities:
Purchase of fixed assets (637,192) (201,456)
Capital Work in Progress (19,382) (166,412)
Proceeds from Sale of fixed assets 250,000 125,293
Proceeds from Sale of Investments – (135,775)
Purchase of investments (1,178) –
Finance Lease Rent payment against principal amount (6,974) (4,724)
Interest Received 3,701 1,765
Dividend Received 1,245 20
Net cash used in investing activities (409,780) (381,289)
102

Consolidated Cash Flow Statement (Contd.)
Rs. In ('000s)
Year ended 31st March, 2004 2003
C. Cash flow from financing activities:
Proceeds from fresh issue of
Share Capital (including Share Premium ) 508,185 (6,139)
Minority interest 4,365 –
Proceeds from long term borrowings (340,079) 359,191
Receipt /(Repayment) of short term borrowings 65,450 (44,058)
Proceeds from Cash Credits (NET) 182,918 16,671
Finance Lease Rent (Interest Part only) (1,901) (1,571)
Interest Paid (115,121) (127,651)
Dividend Paid (76,224) (69,103)
Dividend Tax Paid (8,471) –
Net cash used in financing activities 219,122 127,340
Net Increase/(Decrease) in Cash & Cash Equivalents 42,969 (55,829)
Cash and cash equivalents as at 31.03.2003 45,699 101,812
Consolidation Adjustment (7,413) (284)
Cash and cash equivalents as at 31.03.2004 81,255 45,699
Cash and cash equivalents comprise
Cash 897 619
Deposit 4,319 4,160
Balance with Scheduled Banks 76,039 40,920
81,255 45,699
Notes :
1 The Cash Flow Statement has been prepared under the "Indirect Method" as
set out in Accounting Standard - 3 on Cash Flow Statements issued by the
Institute of Chartered Accountants of India.
2 Cash and cash equivalents includes Rs. 2,364 which are not available
for use by the Company (Refer schedule 13 to the financial statements).
3 Figures in bracket indicate Cash outgo.
This is the Cash Flow Statement referred to in our report of even date
For and on behalf of
Price Waterhouse
Chartered Accountants
Membership No. F 055913
For and on behalf ofthe Board of Directors.
Partha Ghosh M. J. Mendonza Glenn Saldanha Rajesh Desai
Partner Vice President - Legal & Managing Director & CEO Director - Finance
Mumbai, July 5, 2004
Company Secretary
103

Schedules forming part of the Consolidated Balance Sheet
Rs. In ('000s)
As at 31st March, 2004 2003
1 Share Capital
Authorised
125,000,000 (2003 – 125,000,000) Equity shares of Rs 2/- each 250,000 250,000
4,000,000 (2003 – 4,000,000) Cumulative redeemable
non convertible preference shares of Rs 100/- each 400,000 400,000
Unclassified capital 100,000 100,000
Issued, Subscribed and Paid-up
59,245,570 (2003 – 50,860,000) Equity shares of Rs 2/- each 118,491 101,720
Less: Calls in arrears 3 7
118,488 101,713
10.5%, 1,000,000 (2003 – 1,000,000) redeemable cumulative non-convertible
preference shares of Rs. 100/- each (Redeemed on April 1, 2004 at par) 100,000 100,000
Equity Share Warrants
290,000 (2003 -- 490,000) Equity share warrants of Rs. 0.20/- each 58 98
Total 218,546 201,811
Notes :
1. At the Annual general meeting held on September 26, 2003, the shareholders approved the sub-division of Equity share
from face value of Rs. 10 each to Rs. 2 each. Accordingly previous year’s figures have been recast.
2. Of the above equity shares, 19875,000 shares of Rs 2 each are allotted as fully paid-up Bonus Shares by capitalisation
of reserves.
3. In terms of Employee Stock Option Plan approved by the members, 290,000 (2003 – 490,000) convertible warrants
have been allotted to Glenmark Pharmaceuticals Limited Employees Welfare Trust. Each warrant carries an option and
is convertible into one equity share of Rs 2 each. During the year, 200,000 (2003 – 225,000) warrants were converted
into Equity Shares at an exercise price of Rs. 14.34 per share.
4. During the Year Company formulated a new Employees Stock Option Scheme viz. ESOS’ 2003 pursuant to which
7,00,725 options of Rs. 2. each were granted at average market price. On exercise of the options so granted the Paidup
equity share capital of the company will increase by a like number of shares.
5. 5% Convertible Debentures aggregating to Rs. 5,000 Lakhs issued to CDC Financial Services (Mauritius) Ltd. and South
Asia Regional Fund were converted into 8,185,570 fully paid up equity shares of Rs. 2 each at a premium of Rs. 59.08
per share as per the agreement based on predetermined price earning ratio on the profits for the year ended March 31,
2003 at the meeting of board of directors held on September 29,2003.
6. As of March 31, 2004, the Trust has allotted 85,000 (2003–320,000) warrants to the employees of the Company, which
are outstanding. The options have been granted at an exercise price of Rs. 14.34 per share in respect of 85,000 shares.
104

Schedules forming part of the Consolidated Balance Sheet
Rs. In ('000s)
As at 31st March, note 2004 2003
2 Reserves and Surplus
Share premium account
Balance at the beginning of the year 500,518 507,064
Addition on issue of shares 491,502 6,257
Less: Calls in arrears 52 124
Less : Issue cost – 12,680
Closing balance 991,968 500,517
General reserve
Balance at the beginning of the year 550,773 510,773
Less : Loss pertains to Minority Interest 265 –
Add : Transferred during the year 60,000 40,000
Closing balance 610,508 550,773
Debenture Redemption Reserve
Balance at the beginning of the year 29,664 29,664
Addition during the year 253 –
Closing balance 29,917 29,664
Capital Reserve
Balance at the beginning of the year 1,000 1,000
Addition during the year – –
Closing balance 1,000 1,000
Currency fluctuation reserve on Consolidation (7,697) (284)
Employee stock option
Employee stock options outstanding 8,219 8,763
Add: Grant of Options at discount – 370
Less: Conversion of Option 5,283 231
Less: Cancellation of Option 884 683
A 2,052 8,219
Deferred employee stock compensation 2,113 4,465
Add: Grant of Options at discount – 370
Less: Amortisation of ESOP expense. 1,436 2,039
Less: Cancellation of Option 138 683
B 539 2,113
Net Employee Stock option A – B 1,513 6,106
Profit and loss account
Balance 497,882 243,262
Total 2,125,091 1,331,038
3 Secured Loans
Term loan 1 350,000 200,000
Convertible Debentures 2 – 500,000
Non Convertible Debentures 3 140,000 140,000
Working capital facilities 4 528,414 345,496
Other loans 5 11,015 8,068
Total 1,029,429 1,193,564
Notes :
1. Term loan is secured by the equitable mortgage of assets as a security. Creation of Charge is under process.
2. 5% Convertible Debentures aggregating to Rs. 5,000 Lakhs issued to CDC Financial Services (Mauritius) Ltd. and
105

Schedules forming part of the Consolidated Balance Sheet
3 Secured Loans (contd.)
South Asia Regional Fund were converted into 8,185,570 fully paid up equity shares of Rs. 2 each at a premium of
Rs. 59.08 per share as per the agreement based on predetermined price earning ratio on the profits for the year ended
March 31, 2003 at the meeting of board of directors held on September 29, 2003.
3. Non convertible debenture ‘NCD’ includes:
a) 10.05% NCD – A series aggregating Rs. Nil (Previous year Rs 50 million), allotted on September 7, 2001 with a put
and call option after twelve months and redeemable after three years.
b) 10.35% NCD – B series aggregating Rs Nil (Previous year Rs. 90 million, allotted on September 7, 2001 with a call
option after twelve months and redeemable after three years.
All the above debentures are secured by way of a mortgage favouring the debenture trustees on the land and buildings,
plant and machinery and other fixed assets and hypothecation of all movable assets (except raw materials and book
debts, both present and future), situated at the research and development center at Mahape, Navi Mumbai.
4. Working capital loan from banks are secured by hypothecation of stocks of raw materials, packing materials, finished
goods, work in progress, receivables etc. They are additionally secured by way of personal guarantees of some of the
directors and equitable mortgage on fixed assets at the manufacturing facility at Nasik and research and development
centre at Sinnar, Nasik.
5. Other loans are secured by way of hypothecation of vehicles.
4 Unsecured Loans
Short term loan 105,117 –
Security deposit 3,752 43,375
Deferred Sales Tax Loan 10,445 10,445
Other Deposits – 44
Total 119,314 53,864
Notes :
1. The Company has availed of an interest free sales tax deferral loan under Part I of the 1983 and 1988 Package
Schemes of the Government of Maharashtra, repayable after twelve years in six half-yearly installments.
5 Deferred Tax Liability [refer note (2) (X) of Schedule 22]
Liabilities
Depreciation 291,291 263,116
Others 1,890 6,740
Total 293,181 269,856
106

Schedules forming part of the Balance Sheet
as at March 31, 2004 & Profit & Loss account for the year ended on that date.
6 Fixed Assets [refer note (2) (ii) and (6) of Schedule 22]
(Rs. In '000s)
GROSS BLOCK DEPRECIATION NET BLOCK
As on Additions Sales/Disposals As on As on For the year Sales/ As on As on As on
1st Apr, during during 31st Mar, 1st Apr, Disposals 31st Mar, 31st Mar, 31st Mar,
2003 the year the year 2004 2003 of Assets 2004 2004 2003
Freehold Land 5,710 – – 5,710 – – – – 5,710 5,710
Leasehold Land 21,125 35,914 – 57,039 775 505 – 1,280 55,759 20,350
Factory Buildings 87,030 72,257 – 159,287 18,935 3,770 – 22,705 136,582 68,095
Other Buildings & Premises 222,411 44,999 – 267,410 12,213 3,832 – 16,045 251,365 210,198
Plant and Machinery 55,627 140,688 9,196 187,119 10,595 11,353 706 21,242 165,877 45,032
Furniture and Fixtures 101,801 28,965 154 130,612 23,269 12,398 7 35,660 94,952 78,532
Equipments 373,647 179,240 8,281 544,606 71,271 39,229 203 110,297 434,309 302,376
Vehicles 30,008 8,503 6,021 32,490 13,203 4,836 4,451 13,588 18,902 16,805
Brands (Note-5) 350,069 104,488 – 454,557 93,352 35,007 – 128,359 326,198 256,717
Total 1,247,428 615,054 23,652 1,838,830 243,613 110,930 5,367 349,176 1,489,654 1,003,815
Previous Year 1,429,572 232,100 414,244 1,247,428 177,491 106,567 40,445 243,613 1,003,815 1,252,081
Capital Work-in-process including Capital advances. 251,853 232,471
Notes :
1. Equipment and vehicles include assets aggregating Rs. 19,308 (2003 – Rs. 19,559) {net book value as at March 31, 2004 – Rs. 14,338 (2003 – Rs. 17,023)] and Rs. 5,536
(2003 – Rs. 5,536) [net book value as at March 31, 2004 – Rs. 3,708 (2003 – Rs. 4,631)], respectively, which have been acquired on finance lease.
2. Additions to assets include Rs. 4,488 being borrowing costs.
3. Estimated amount of contracts remaining to be executed on capital account, net of advances, not provided for as at March 31, 2004 aggregate Rs. 59,039 (2003 –
Rs. 14,566)
4. Capital Work in progress includes : 2004 2003
Cost of Ankleshwar Plant plus addition thereto 68,157 160,283
Capitalisation of Interest & Relevant costs of Ankleshwar Plant – 16,653
Cost of Goa Plant plus addition there to 57,145 –
Capital Advances 109,854 49,667
Other work-in-processes 9,811 5,868
Brazil CWIP 6,282 –
Philippines CWIP 605 –
5. Additions for Glenmark Pharmaceuticals Inc, USA includes Product development process, patents and Trademarks. However pending completion of the development
process and registration of Products and Trademarks, no amortisation of Intangible assets has been provided for during the year.
7 Investments {refer Note (2)(iv) of Schedule 22)
Long Term Investments
Quoted - traded
Equity shares
9,000 (2003 – 9,000) Bank of India of Rs. 10 each [Market Value Rs. 530 (2003 – Rs. 341)] 405 405
1,718 (2003 – 1,000) IDBI Bank Limited of Rs. 10 each [Market Value Rs. 85 (2003 – Rs. 23)] 34 18
439 423
Unquoted – non trade
National Savings Certificate – Sixth Issue 48 48
1 (2003) – 1) Time share of Dalmia Resorts Limited 20 20
1 (2003 – 1) equity share of Esquados 340,000 of Glenmark
Pharmaceutical Limitada, Lisbon (Portugal) 48 48
1,93,665 shares of Bharuch Eco-Aqua Infrastructure Limited of Rs. 10
each, fully paid up (Previous year Rs. 4 per share was paid up). 1,937 775
100,000 12% cumulative preference shares of Rs 100 each fully
paid up of Chery Laboratories (P) Limited 10,000 10,000
1350,000 7% cumulative preference shares of Rs 100 each fully paid up
of Glenmark Laboratories Limited 135,000 135,000
147,053 145,891
Total 147,492 146,314
107

Schedules forming part of the Consolidated Balance Sheet
Rs. In ('000s)
As at 31st March, 2004 2003
8 Deferred Tax Asset [refer Note (2)(X) of Schedule 22)]
Assets
Provision for Bad Debts and Doubtful Advances 23,102 13,340
Others 525 2,043
Unabsorbed losses and Depreciation 4,526 –
Total 28,153 15,383
9 Inventories [refer Note (2)(v) of Schedule 22)]
(As certified by the management)
Raw & Packing materials 310,098 150,780
Work-in-process 223,462 51,850
Stores and Spares 2,574 3,419
Finished goods 285,467 238,322
Total 821,601 444,371
10 Sundry Debtors
Outstanding for more than six months
Secured, considered good – –
Unsecured, considered good 147,936 277,909
Unsecured, considered doubtful 43,061 31,260
190,997 309,169
Less: Provision for doubtful debts 43,061 31,260
147,936 277,909
Other debts-
Secured, considered good – –
Unsecured, considered good 1,156,877 954,718
1,156,877 954,718
Total 1,304,813 1,232,627
11 Cash and Bank Balances
Cash in hand 897 619
Balances with banks
– Current accounts 31,744 12,834
– Margin Money Account 42,092 17,283
– EEFC Account 2,203 10,803
– Deposit accounts 4,319 4,160
Total 81,255 45,699
The balances in the margin money accounts are given as security against guarantees issued by banks on behalf of the
Company.
108

Schedules forming part of the Consolidated Balance Sheet
Rs. In ('000s)
As at 31st March, 2004 2003
12 Loans and Advances (unsecured, considered good)
Glenmark Laboratories Limited * 17,985 267,988
Advances to subsidiaries
Glenmark Pharmaceuticals Inc., U.S.A. [Maximum during the year – 7,944
Rs. 7,944 (Previous Year – Rs. 7,944)]
Advance to Vendors 130,275 85,161
Advances recoverable in cash or kind or for value to be received 174,700 96,985
Balance with Excise & Sales tax Authorities 19,620 13,535
Deposits 59,890 40,888
Total 402,470 512,501
* Last year being an associate company
[maximum amount outstanding during the year Rs. 267,988]
13 Current Liabilities
Acceptances 92,842 62,618
Sundry creditors - Small scale industrial undertakings 20,867 16,474
- Others 372,691 310,969
Investor Education and Protection Fund shall be credited by
– Unclaimed Dividend 2,364 1,974
[There are no amounts due and outstanding to be credited to
Investor Education and Protection Fund.]
Advances from Customers 3,049 1,206
Other Liabilities 139,438 115,237
Interest accrued but not due 8,242 24,686
Interim Dividend on Equity Shares 77,020 66,114
Tax on Interim Dividend 9,868 8,471
Tax on Preference Dividend 1,345 –
Total 727,726 607,749
14 Provisions
Wealth tax 300 300
Income-tax (net of advance tax) [Refer Note (2) (X) of Schedule 22] 37,402 9,847
Provision for Gratuity and leave encashment 2,000 1,500
Total 39,702 11,647
15 Miscellaneous Expenditure [(refer note (2) (vii) of Schedule 22]
(to the extent not written off or adjusted)
Implementation Expenses of ERP system 1,147 5,737
Product launch, investigation and registration expenses 5,272 18,339
Pre-operative / Preliminary expenses 23,644 12,272
Total 30,063 36,348
109

Schedules to the Consolidated Profit & Loss Account
Rs. In ('000s)
For the year ended 31st March, 2004 2003
16 Sales [(refer note 2 (viii) of Schedule 22]
Sale of goods* 3,796,569 3,693,934
Income from services 10,037 9,416
Total 3,806,606 3,703,350
* includes sales tax and excise duty aggregating Rs 255,771 (2003-Rs 251,600) and Rs 340,561 (2003-Rs 307,802)
respectively.
17 Other Income
Lease Rent [tax deducted at source Rs.403 (Prev year -- Rs. 302)] 1,920 1,440
Interest Income [tax deducted at source Rs. 400 (Prev year -- Rs. 427)] 2,422 2,019
Dividend received 1,245 20
Exchange gain 4,642 4,109
Export Incentive 7,613 8,661
Profit on sale of fixed assets 128 1,631
Miscellaneous income 16,692 12,116
Profit on sale of Subsidiary – 576
Total 34,662 30,572
18 Cost of Sales
Salary, wages and allowances 38,320 38,033
Labour charges 82,227 63,620
Consumption of raw & packing materials 966,088 927,049
Purchase of Trading goods 286,013 306,895
Excise duty paid 308,398 327,169
Sales tax 255,771 251,600
Power, fuel and water charges 31,365 21,878
Consumable stores 24,583 39,224
Repairs and maintenance - plant and machinery 17,066 13,183
Rent, rates and taxes 1,578 1,560
Other manufacturing expenses 540 6,123
(Increase)/decrease in inventory (218,758) (79,042)
Total 1,793,191 1,917,292
110

Schedules to the Consolidated Profit & Loss Account
Rs. In ('000s)
For the year ended 31st March, 2004 2003
19 Selling and Operating Expenses
Salary and allowances 256,391 214,908
Staff welfare 7,801 7,780
Directors' salaries and allowances 44,762 27,207
Incentive and commission 40,978 31,923
Sales promotion expenses 184,386 209,137
Export Commission 7,935 11,107
Commission on sales 4,154 34,678
Travelling expenses 151,626 136,969
Freight outward 71,847 85,147
Telephone expenses 19,431 17,888
Rates and taxes 14,040 8,719
Provision for doubtful debts 11,800 16,000
Provision for doubtful advances – 4,000
Insurance 9,173 7,437
Electricity charges 7,258 7,805
Rent 15,885 16,052
Repairs & Maintenance 39,135 26,180
Auditors remuneration
Audit fees 1,322 750
Other matters 1,020 620
Out of pocket expenses 30 5
Loss on sale of assets 848 137
Other operating expenses 184,444 145,587
Total 1,074,266 1,010,036
20 Interest Expense
On loans from banks 35,777 41,798
Other interest 64,801 81,632
Total 100,578 123,430
21 Research and Development Expenses [refer Note (2) (ix) of Schedule 22]
Salary and other allowances 71,328 41,406
Staff welfare expenses 4,633 2,527
Directors Remuneration 2,517 1,368
Consumable & Chemicals 80,560 52,971
Electricity charges 12,777 9,542
Repairs and maintenance 12,192 7,709
Insurance premium 283 377
Other expenses 63,783 31,357
Total 248,073 147,257
111

Notes to the Consolidated Accounts
For the year ended 31st March, 2004
22 Notes to the Financial Statement
1) Principles of Consolidation
(a) The consolidated financial statements of the Group have been prepared in accordance with Accounting Standard
(AS-21) - "Consolidated Financial Statements" issued by the Institute of Chartered Accountants of India.
(b)
Glenmark Pharmaceuticals, the holding company, had controlling interest in the following entities as at 31st March,
2004:
Name of the Subsidiary Country of Incorporation Percentage of ownership
Glenmark Exports Limited India 100%
GM Pharma Limited India 100%
Glenmark Impex, Russia Russia 100%
Glenmark Farmaceutica Ltda, Brazil Brazil 100%
Glenmark Philippines Inc., Philippines Philippines 100%
Glenmark Pharmaceuticals Inc., USA USA 96%
(c)
Assets and liabilities of foreign subsidiaries are translated into Indian rupees at the rate of exchange prevailing as
at the Balance Sheet date. Revenues and expenses are translated into India rupees at yearly average exchange
rates prevailing during the year and the resulting net translation adjustment has been adjusted to Reserves.
2) Significant Accounting Policies
i) Basis of Accounting
The consolidated financial statements are prepared under the historical cost convention, on the accrual basis of
accounting, in conformity with accounting principles generally accepted in India. These consolidated financial
statements have been prepared to meet the requirements of clause 32 of the listing agreement with the Stock
Exchanges.
ii)
Fixed assets and depreciation
Fixed assets are stated at cost less accumulated depreciation. The Company capitalises all costs relating to the
acquisition and installation of fixed assets. Expenditure of revenue nature, incurred in setting up of new projects, is
capitalised as an indirect cost towards construction of the fixed assets. Exchange differences relating to the
acquisition of fixed assets are adjusted in the cost of the assets.
Depreciation is provided using the straight line method, pro-rata to the period of use of assets, based on the useful
lives of fixed assets as estimated by management, or at the rates specified in Schedule XIV of the Companies Act,
1956, whichever is higher.
Fixed assets having aggregate cost of Rs 5,000 or less are depreciated fully in the year of acquisition.
The group has estimated the useful life of its assets as follows:
Category
Estimated useful life
(in years)
Plant and machinery 8 - 20
Vehicles 5 - 6
Equipments and air conditioners 4 - 20
Furniture and fixtures 5 - 10
Brands 5 - 10
Leasehold land is amortised over the period of lease.
iii)
Foreign currency transactions
Foreign currency transactions during the year are recorded at the rates of exchange prevailing on the date of the
transaction. Foreign currency assets and liabilities are translated into rupees at the exchange rates prevailing on
the date of the balance sheet.
All exchange differences are dealt with in the statement of profit and loss, except those relating to the acquisition
of fixed assets, which are adjusted in the cost of the respective fixed assets.
112

Notes to the Consolidated Accounts
For the year ended 31st March, 2004
22 Notes to the Financial Statement (Contd.)
iv) Investments
Long term investments are stated at cost. Provision, where necessary, is made to recognise a decline, other than
temporary, in the value of the investments.
v) Inventories
Inventories of raw materials, packing materials, work-in-process and finished goods are valued at cost or net
realisable value, whichever is lower. Cost of raw materials and packing materials is ascertained on a first-in-first
out basis. Cost of work-in-process and finished goods includes the cost of materials consumed, labour and
manufacturing overheads. Excise and customs duty accrued on production or import of goods, as applicable, is
included in the valuation of inventories.
vi)
Employee Benefits
Retirement benefits to employees comprise payments towards gratuity, superannuation and provident fund under
the schemes of the Company and encashment of leave. Annual contributions to the superannuation and provident
funds are charged to the statement of profit and loss.
The employee leave encashment and gratuity schemes are administered through the Life Insurance Corporation of
India. Annual contributions as determined by the LIC are charged to the statement of profit and loss.
In respect of stock options granted to employees under the Company’s Employee Stock Option Plan (‘ESOP’), the
excess of the market price of the share at the date of grant of the option over its exercise price is treated as a
form of employee compensation in the financial statements of the company. This amount is amortised on a
straight-line basis over the vesting period. The unamortised portion is carried forward as deferred employee
compensation.
vii)
Miscellaneous expenditure
Product launch expenditure
Earlier years' expenditure on launch of new products and their sales promotion is being amortised over a period of
three years.
Implementation expenses of Enterprise Resource Planning system.
Earlier year's expenditure incurred on payments for infrastructure facilities and expenditure incurred on user
license fees for an Enterprise Resource Planning system is being amortised over a period of thirty-six months.
Preliminary expenses
Preliminary expenses of Glenmark Pharmaceuticals Inc, USA being expenses incurred prior to the incorporation of
the company have been amortised over a period of 5 years.
viii) Revenue recognition
The group recognises revenues on despatch of goods to customers. Revenues from services are recognised on
completion of such services. Revenues are recorded at invoice value, inclusive of excise duty and sales-tax, but
net of returns and trade discounts.
ix)
Research and development
Capital expenditure on research and development ('R&D') is capitalised as fixed assets. Other expenditure on
R&D is expensed as incurred.
x) Income-tax
Provision for current income-taxes is made on the assessable income at the tax rate applicable to the relevant
assessment year. Deferred income taxes are recognised for the future tax consequences attributable to timing
differences between the financial statement determination of income and their recognition for tax purposes. The
effect on deferred tax assets and liabilities because of a change in tax rates is recognised in statement of profit
and loss using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet
date.
Deferred tax assets are recognised and carried forward only to the extent that there is a reasonable certainty that
sufficient future taxable income will be available against which such deferred tax assets can be realised.
113

Notes to the Consolidated Accounts
For the year ended 31st March, 2004
Prior / Earlier year's income tax is charged to the Profit and Loss account on payment and the same is disclosed
separately.
xi)
Leases
Finance leases
Assets acquired under finance lease are recognised as assets with corresponding liabilities in the balance sheet at
the inception of the lease at amounts equal to the fair value of the leased asset or, if lower, at the present value of
the minimum lease payments. These leased assets are depreciated in line with the Company’s policy on
depreciation of fixed assets. The interest is allocated to periods during the lease term so as to produce a constant
periodic rate of interest on the remaining balance of the liability for each period.
Operating leases
Lease payments for operating leases are recognised as expense on a straight-line basis over the lease term.
Lease income from operating leases is recognised as income on a straight-line basis over the lease term. Initial
direct costs are recognised immediately as an expense.
3) Earnings per Share
Basic earnings per share are calculated by dividing the net profit for the year attributable to equity shareholders (net
profit for the year less dividends on preference shares) by the weighted average number of equity shares outstanding
during the year.
For the purpose of calculating diluted earnings per share, the net profit attributable to equity shareholders and the
weighted average number of shares outstanding are adjusted for the effects of all dilutive potential equity shares from
the exercise of options on unissued share capital. The number of equity shares is the aggregate of the weighted
average number of equity shares and the weighted average number of equity shares, which would be issued on the
conversion of all the dilutive potential equity shares into equity shares. Options on unissued equity share capital are
deemed to have been converted into equity shares on the date when the options are exercised.
The calculations of earnings per share (basic and diluted) are based on the earnings and number of shares as computed
below.
Rs. In ('000s)
Reconciliation of earnings 31st March, 2004 31st March, 2003
Profit after tax for the financial year 413,606 325,511
Less:
Preference dividends 10,500 10,500
Dividend tax on preference shares 1,345 –
Net profit attributable to equity shareholders for calculation of Basic EPS 401,761 315,011
Add :
Interest accrued on Convertible Debentures less tax theron – 15,333
Net profit attributable to equity shareholders for calculation of Diluted EPS 401,761 330,344
Reconciliation of number of shares Shares Shares
(in ‘000) (in ‘000)
Weighted average number of shares:
For basic earnings per share 55,111 50,780
Add:
Deemed exercise of options on unissued equity share capital 274 215
Conversion of Debentures – 8,515
For diluted earnings per share 55,385 59,510
Earnings per share (nominal value Rs 2 each) Rs Rs
Basic 7.29 6.20
Diluted 7.25 5.56
114

Notes to the Consolidated Accounts
For the year ended 31st March, 2004
22 Notes to the Financial Statement (Contd.)
4) Segment Information
Business segments
The group is primarily engaged in a single segment business of manufacturing and marketing of pharmaceuticals
formulations and active ingredients and is managed as one entity, for its various activities and is governed by a similar
set of risks and returns.
Geographical segments
The operations of the group are largely confined to India, with exports contributing to 17.12 percent of its annual sales.
Hence, in the view of the management, the Indian and export markets represent geographical segments.
Sales by market -- The following is the distribution of the Company's sale by geographical market
Rs. In ('000s)
Geographical segment 31st March, 2004 31st March, 2003
India 3,154,903 3,023,242
Other than India 651,703 313,123
Total 3,806,606 3,336,365
Assets and additions to fixed assets by geographical area – The following table shows the carrying amount of segment
assets and additions to fixed assets by geographical area in which the assets are located:
Rs. In ('000s)
India Others* India Others*
2004 2004 2003 2003
Carrying amount of segment assets 3,633,914 583,192 3,123,522 229,048
Additions to tangible assets 615,053 – 232,100 –
* Others represent receivables from debtors located outside India including those related to deemed exports.
5) Related Party Disclosures
a) Related party relationships where transactions have taken place during the year
Key management personnel (includes directors of the Company and its subsidiaries)
Mrs BE Saldanha
Mr Glenn Saldanha
Mr Robin Pinto
Mr. RV Desai
Mr. AS Mohanty
Mr. SA Paigankar (Resigned on 29.03.04)
Mr. Jeffery Weiss (appointed director effective 01.03.03)
Mr. Sangeet Mehrotra (appointed director effective 28.01.04)
Mr. Sudip Majumdar (resigned on 31.07.03)
Mr. Anil Muddanna (appointed director effective 01.08.03)
115

Notes to the Consolidated Accounts
For the year ended 31st March, 2004
22 Notes to the Financial Statement (Contd.)
b) Transactions with related parties during the year Rs. In ('000s)
Associate enterprises
31st March, 2004 31st March, 2003
Sale of fixed assets to Glenmark Laboratories Limited – 345,000
Corporate guarantee given for Glenmark Laboratories Limited – 50,000
* Glenmark Laboratories Limited [Last year being an associate company]
Key management personnel
Professional fees – 61
Share in profit of Cardiac Centre – 59
Personal guarantees given by directors have been disclosed in Schedule 3.
Managerial Remuneration
Name of Directors
1. Mr. Gracias Saldanha 10,104 7,660
2. Mrs. B. E. Saldanha 7,177 5,155
3. Mr. Glenn Saldanha 14,560 5,752
4. Mrs. Cheryl Pinto 7,411 3,365
c) Related party balances
Receivable from associate enterprises – 267,988
6) Leases
a) The Company has entered into operating and finance lease agreements for the rental of property, vehicles,
computers, equipment and other assets. Typically, lease agreements are for a period of three to five years. At
March 31 2004, the Company had commitments under non-cancellable finance leases as follows:
Rs. In ('000s)
31st March, 2004 31st March, 2003
Minimum lease payments
Due within one year 7,368 8,875
Due later than one year and not later than five years 4,146 11,514
Total 11,514 20,389
Present value of minimum lease payments
Due within one year 5,528 7,454
Due later than one year and not later than five years 2,728 8,256
Total 8,256 15,710
b) The Company has leased out certain equipments and these equipments have been capitalised in the books of
account in accordance with Accounting Standard 19 - "Leases" issued by The Institute of Chartered Accountants
of India in this regard. Depreciation has been provided based on the estimated useful life of the asset.
116

Notes to the Consolidated Accounts
For the year ended 31st March, 2004
22 Notes to the Financial Statement (Contd.)
6) Leases (Contd.)
(i) Details in respect of assets given on operating Lease
Rs. In ('000s)
31st March, 2004 31st March, 2003
Gross Block
Leasehold Land 4,259 4,259
Factory Buildings 22,065 22,065
Plant and Machinery 5,838 5,838
Equipments 3,764 3,764
Furniture and Fixtures 165 165
36,091 36,091
Accumulated depreciation
Leasehold Land 172 129
Factory Buildings 3,302 2,566
Plant and Machinery 1,104 826
Equipments 1,272 971
Furniture and Fixtures 66 49
5,916 4,541
Depreciation 1,375 1,375
(ii) The lease income of Rs.1,920 (Previous Year -- Rs. 1,440) has been accrued on the basis of the lease agreement
executed with the lessees. This lease is cancellable by notice of 30 days on either side.
c) The Company has taken on operating lease a Bulk Drug Plant at Kurkumbh and godowns/residential & office
premises at various locations in the country.
i) The Company's significant leasing arrangements are in respect of the above plant, godowns & premises (Including
furniture and fittings therein, as applicable ). The aggregate lease rentals payable are charged to Profit and Loss
Account as Rent in Schedule 18 & 19.
ii)
The Leasing arrangements which are cancellable range between 11 months and 3 years. They are usually
renewable by mutual consent on mutually agreeable terms. Under these arrangements, generally refundable
interest free deposits have been given. An amount of Rs.13,742 towards deposit and unadjusted advance rent is
recoverable from the lessor.
117

Consolidated Schedules forming part of the Financial Statements
For the year ended 31st March, 2004
2 Notes to the Financial Statement (Contd.)
7) Contingent liabilities not provided for
Rs. In ('000s)
31st March, 2004 31st March, 2003
Guarantees issued by banks 9,981 6,856
Disputed taxes/duties – 3,185
Labour / Industrial disputes 1,120 –
Open letters of credit 83,350 43,853
Call Money payable to Bharuch Eco-acqua Infrastructure (@Rs. 6 per share) – 1,162
Sundry debtors factored with recourse 91,677 126,285
Corporate Guarantee 50,000 50,000
Channel financing with recourse option 14,159 –
8) Prior year comparatives
Prior year's figures have been regrouped wherever necessary.
Signatures to the Schedules 1 to 22 which form an integral part of the Consolidated Financial Statements.
For and on behalf of
Price Waterhouse
Chartered Accountants
Membership No. F 055913
For and on behalf ofthe Board of Directors.
Partha Ghosh M. J. Mendonza Glenn Saldanha Rajesh Desai
Partner Vice President - Legal & Managing Director & CEO Director - Finance
Mumbai, July 5, 2004
Company Secretary
118

GLENMARK EXPORTS LIMITED
GLENMARK EXPORTS LIMITED
B. E. Saldanha
Gracias Saldanha
Glenn Saldanha
Mark Saldanha
Auditors' Report
Directors’ Report
To
The Member of
GLENMARK EXPORTS LIMITED
We have audited the attached Balance Sheet of
GLENMARK EXPORTS LIMITED as at 31st March, 2004
and the related Profit & Loss Account and Cash Flow
Statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of
the Company’s management. Our responsibility is to
express an opinion on these financial statement based on
our audit.
We conducted our audit in accordance with the auditing
standards generally accepted in India. These Standards
require that we plan and perform the audit to obtain
reasonable assurance about whether the financial
statements are free from any material mis statement. An
audit also includes, examining on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. An audit also includes, assessing the
accounting principles used and significant estimates made
by management, as well as evaluating the overall financial
statements presentation. We believe that our audit
provides a reasonable basis for our opinion.
1) As required by the Companies (auditors’ Report) order,
2003, issued by the Central Government of India in
terms of Sections 227 (4A) of the Companies Act,
1956, and on the basis of such checks of books and
records of the company as we considered appropriate
and according to the information given to us, we give in
the Annexure A statement on the matters specified in
paragraphs 4 & 5 of the said order, to the extent
applicable to the company.
Further to our comments in the Annexure referred to in
paragraph (1) above, we report that,
a) We have obtained all the information and
explanations, which to the best of our knowledge
and belief were necessary for the purpose of our
audit;
b) In our opinion, proper book of accounts as required
by law have been kept by the company, so far as it
appears form our examination of those books.
c) The Balance Sheet, Profit & Loss Account and Cash
Flow Statement dealt with by this report are in
agreement with the books of account.
d) In our opinion, the Balance Sheet, Profit & Loss
Account and Cash Flow Statement dealt with by
this report comply with the accounting standard
referred to in sub-sections (3c) of section 211 of the
companies Act, 1956.
e) Based on the written representations received from
the Directors and taken on record by the Board of
Directors and the information and explanations
given to us, we report that none of the Directors
are, as at 31st March, 2004, prima facie disqualified
from being appointed as a Director in terms of
clause (g) of sub-section (1) of section 274 of the
Companies Act, 1956.
f) In our opinion and to the best of our information and
according to the explanation given to us, the said
account give the information required by the
Companies Act, 1956, in the manner so required
and give a true and fair view in conformity with the
accounting principles generally accepted in India;
i) In the case of the Balance Sheet, of the State of
affairs of the Company as at 31st March’ 2004
ii) In the case of Profit & Loss Account, of the loss
for the year ended on that date, and
iii) In the case of Cash Flow Statement, of the cash
flows for the year ended on that date.
For N. K. Mittal & Associates
Chartered Accountants
To the Members,
Glenmark Exports Limited
Your Directors have pleasure in presenting their eight
Annual Report together with the Audited Accounts of the
Company for the year ended March 31, 2004.
FINANCIAL RESULTS
During the year the Company recorded a turnover of
Rs.149.00 million as against Rs.125.55 million in the
previous year.
DIVIDEND
Since there are inadequate profits your Directors regret
their inability to recommend any dividend
DIRECTORS
Mrs. B. E. Saldanha retires by rotation at the ensuing
Annual General Meeting and being eligible, offer herself for
re-appointment.
AUDITORS
M/s. N. K. Mittal & Associates, Chartered Accountants,
Auditors of the Company hold office until the conclusion of
the ensuing Annual General Meeting and being eligible
offer themselves for re-appointment.
PERSONNEL
As the Company has no employee, information as per
Section 217(2A) of the Companies Act, 1956 read with the
Companies (Particulars of Employees) Rules, 1975 are not
applicable.
COMPANIES (DISCLOSURE OF PARTICULARS IN THE
REPORT OF BOARD OF DIRECTORS) RULES, 1988
As the Company is not engaged in any manufacturing
activity or Operations, the Companies (Disclosure of
Particulars in the Report of Directors) Rules, 1988 so far as
conservation of energy and technology absorption are not
applicable.
The Company earned foreign exchange amounting to
Rs. 137.13 million on exports of products and the outflow
was Rs. 15.90 million.
DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to section 217 (2AA) of the Companies Act, 1956,
the Directors confirm:
(i) that in the preparation of the annual accounts, the
applicable accounting standards had been followed.
(ii) that appropriate accounting policies have been
selected and applied consistently and have made
judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the
state of affairs of the Company as at March 31, 2004 and
of the Profit or Loss of the Company for the year ended
March 31, 2004.
(iii) that proper and sufficient care has been taken for the
maintenance of adequate accounting records in accordance
with the provisions of the Companies Act, 1956 for
safeguarding the assets of the Company and for preventing
and detecting fraud and other irregularities.
(iv) that the annual accounts have been prepared on a
going concern basis.
Place: Mumbai
Date: July 5, 2004
For and on behalf of the Board of Directors
B. E. Saldanha
Chairperson
Place: Mumbai
Date: 20/04/2004
N. K. Mittal
Proprietor
Membership No. 46785
GLENMARK EXPORTS LIMITED
GLENMARK EXPORTS LIMITED
Annexure (‘A’) to Auditor's Report
Referred to in paragraph 4 of the Auditor’s Report of even
date to the members of Glenmark Exports Limited on the
financial statements for the year ended March 31, 2004.
1.a)The Company is maintaining proper records showing
full particulars including quantitative details and
situation of fixed assets.
b) The fixed assets are physically verified by the
management according to a phased programmed
designed to cover all the items over a period of three
years, which in our opinion, is reasonable having
regard to the size of the Company and the nature of its
assets. Pursuant to the programme, a portion of the
fixed assets has been physically verified by the
management during the year and no material
discrepancies between the book records and the
physical inventory have been noticed.
c) In our opinion and according to the information
explanations given to us, no fixed assets has been
disposed off by the Company during the year.
2.(a)The inventory has been physically verified by the
managament during the year. In our opinion, the
frequency of verification is reasonable.
b) In our opinion, the procedures of physical verification
of inventory followed by the management are
reasonable and adequate in relation to the size of the
Company and the nature of its business.
c) On the basis of our examination of the inventory
records, in our opinion, the company is maintaining
proper records of inventory. The discrepancies noticed
on physical verification of inventory as compared to
book records which have been properly dealt with in
the books of account were not material.
3. The Company has not granted unsecured loans, to
Companies covered in the register maintained under
Section 301 of the Act. The maximum amount involved
during the year and the year end balance of such loans
aggregates to Rs. Nil. The Company has not taken any
loans, secured or unsecured, from Companies covered
in the register maintained under Section 301 of the
Act.
4. In our opinion and according to the information and
explanations given to us, having regard to the
explanation that certain items purchased/ sold are of
special nature for which suitable alternative sources do
not exist for obtaining comparative quotations there
are adequate internal control procedures
commensurate with the size of the Company and the
nature of its business for the purchase of inventory,
fixed assets and for the sale of goods. Further, on the
basis of our examination of the books and records of
the Company, and according to the information and
explanations given to us, we have neither come across
nor have been informed of any continuing failure to
correct major weaknesses in the aforesaid internal
control procedures.
5.a) In our opinion and according to the information and
explanations given to us, the transactions that need to
be entered into the register in pursuance of Section
301 of Act, have been so entered.
b) In our opinion and according to the information and
explanations given to us having regard to the fact that
the items purchased/sold/services rendered/received
are of special nature and suitable alternate sources do
not exist for obtaining comparative quotations, the
transactions made in pursuance of contracts or
arrangements entered into the register in pursuance of
Section 301 of the Act and exceeding the value of
Rupees Five Lakhs in respect of any party during the
year, have been made at prices which are reasonable
having regard to the prevailing market prices at the
relevant time or the prices at which the transactions
for similar goods have been made with other parties.
6. The company has not accepted any deposits from the
public within the meaning of Sections 58A and 58AA
of the Act and the rules framed there under.
7. In our opinion, the Company has an internal audit
system commensurate with its size and nature of its
business.
8. The Central Government has not prescribed
maintenance of cost records under Section 209 (1) (d)
of the Companies Act 1956 for any of the products of
the Company
9.a) According to the information and explanations given to
us and the records of the Company examined by us, in
our opinion, the Company is generally regular in
depositing the undisputed statutory dues including
provident fund, investor education and protection fund,
employees’ state insurance, income tax, sales tax,
wealth tax, customs duty, excise duty, cess and other
material statutory dues as applicable with the
appropriate authorities.
10.The company has no accumulated losses as at March
31, 2004 and it has not incurred any cash losses in the
financial year ended on that date or in the immediately
preceding financial year.
11. According to the records of the Company examined by
us and the information and explanations given to us,
the Company has not defaulted in repayment of dues
to any financial institution or bank or debenture holders
as at the balance sheet date.
12. The Company has not granted any loans and advances
on the basis of security by way of pledge of shares,
debentures and other securities.
13. The provisions of any special statute applicable to chit
fund/ nidhi/ mutual beneit fund/ societies are not
applicable to the Company.
14.In our opinion, the Company is not a dealer or trader in
shares, securities debentures and other investments.
15. In our opinion, and according to the information and
explanations given to us, the Company has not given
any guarantee for loans taken by others from banks or
financial institutions during year.
16. in our opinion, and according to the information and
explanations given to us, on an overall basis, the term
loans have been applied for the purposes for which
they obtained.
17. On the basis of an overall examination of the balance
sheet of the Company, in our opinion and according to
the information and explanations given to us, there are
no funds raised on a short term basis which have been
used for long term investment.
18. The Company has not made any preferential allotment
of shares to parties and companies covered in register
maintained under Section 301 of the act during year.
19. The Company has not issued debentures, hence
creation of securities in respect of debentures does
not arise.
20.The Company has not raised any money by public
issues during year.
21. During the course of our examination of the books and
records of the Company, carried out in accordance
with the generally accepted auditing practice in India,
and according to the information and explanations
given to us, we have neither come across any instance
of material fraud on or by the Company, noticed or
reported during the year, nor have we been informed
of such case by the management.
Place: Mumbai
Date: 20/04/2004
For N. K. Mittal & Associates
Chartered Accountants
N. K. Mittal
Proprietor
Membership No. 46785
119

GLENMARK EXPORTS LIMITED
GLENMARK EXPORTS LIMITED
Balance Sheet
Amount in Rs.
As at 31st March, Schedules 2004 2003
SOURCES OF FUNDS
Shareholders' Funds
Share Capital 1 10 00 200 10 00 200
Reserves & Surplus 2 73 78 445 73 78 445
Total 83 78 645 83 78 645
APPLICATION OF FUNDS
Fixed Assets 3
Gross Block 6 55 573 6 55 573
Less: Depreciation 3 29 472 2 73 228
Net Block 3 26 101 3 82 345
Current Assets, Loans & Advances
Sundry Debtors 4 21 86 17 589 17 23 97 359
Cash & Bank balances 5 21 48 119 51 04 115
Loans & Advances 6 2 21 03 082 1 36 27 270
24 28 68 790 19 11 28 744
Current Liabilities & Provisions 7 23 48 16 246 18 31 32 444
Net Current Assets 80 52 544 79 96 300
Total 83 78 645 83 78 645
Notes to accounts & Significant Accounting Policies 8
As per our report of even date annexed
For N. K. Mittal & Associates
Chartered Accountants
For & on behalf of the Board of Directors
N. K. Mittal B. E. Saldanha G. Saldanha
(Proprietor) Chairperson Director
Membership No. 46785
Place: Mumbai.
Date: 20 April, 2004
Profit & Loss Account
Amount in Rs.
For the year ended 31st March, Schedules 2003-2004 2002-2003
INCOME
Sales 14 90 08 543 12 55 53 369
Total 14 90 08 543 12 55 53 369
EXPENDITURE
Cost of Goods Traded 14 90 08 543 12 55 53 369
14 90 08 543 12 55 53 369
Profit Before Taxation – –
Provision for Taxation – –
Profit After Taxation – –
Balance Brought Forward from Previous Year 73 78 445 73 78 445
Balance Carried to Balance Sheet 73 78 445 73 78 445
Notes to accounts & Significant Accounting Policies 8
As per our report of even date annexed
For N. K. Mittal & Associates
Chartered Accountants
For & on behalf of the Board of Directors
N. K. Mittal B. E. Saldanha G. Saldanha
(Proprietor) Chairperson Director
Membership No. 46785
Place: Mumbai.
Date: 20 April, 2004
Schedules forming part of Accounts
Amount in Rs.
2003-2004 2002-2003
1 Share Capital
Authorised Capital
250000 Equity Shares of Rs.10/- each 25 00 000 25 00 000
Issued, Subscribed & Paid up Capital
100020 Equity Shares of Rs.10/- each fully paid up 10 00 200 10 00 200
(Fully held by Glenmark Pharmaceuticals Limited, the Holding Company)
2 Reserves & Surplus
Profit & Loss Account 73 78 445 73 78 445
GLENMARK EXPORTS LIMITED
GLENMARK EXPORTS LIMITED
Schedules forming part of Accounts
3 Fixed Assets
Amount in Rs.
Particulars Gross Block Depreciation Net Block
Additions/ Additions/ Depreciation the
Bal as the Bal as the Bal as the Bal as
beginning (Deletions) end of the beginning (Deletions) for the end of the
of the year year of the year year year
Office Equipments 1 90 370 – 1 90 370 52 258 – 12 050 64 308 1 26 062
Vehicles 4 65 203 – 4 65 203 2 20 970 – 44 194 2 65 164 2 00 039
Total 6 55 573 – 6 55 573 2 73 228 – 56 244 3 29 472 3 26 101
Previous year 6 55 573 – 6 55 573 2 16 984 – 56 244 2 73 228 3 82 345
Amount in Rs.
2003-2004 2002-2003
4 Sundry Debtors
Unsecured
More than 6 months 13 05 56 384 8 80 00 448
Less: Provision for doubtful debts 40 62 469 40 62 469
12 64 93 915 8 39 37 979
Others considered good 9 21 23 674 8 84 59 380
21 86 17 589 17 23 97 359
5 Cash & Bank Balances
Balance with Banks 21 48 119 51 03 915
Cash in hand – 200
21 48 119 51 04 115
6 Loans & Advances
TDS receivabe 70 226 70 226
Export Incentive Receivable 2 19 62 406 1 25 65 594
Deposits with Sales Tax Authority 5 000 5 000
Advance receivable in cash or in kind or for value to be received 65 450 9 86 450
2 21 03 082 1 36 27 270
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2004
1. Background
Glenmark Exports Limited (the Company) was incorporated on 26 Aug 1996. The Company is principally engaged in
exporting pharmaceutical products.
2. Summary of Significant Accounting Policies
a) The Financial statement are prepared under the historical cost convention, on the accrual basis of accounting and in
accordance with the accounting standards specified in section 211 (3) (c) of the Companies Act, 1956.
b) Fixed Assets and Depreciation :
Fixed assets are stated at cost less depreciation. The Company capitalizes all costs relating to the acquisition and
installation of Fixed Assets. Depreciation is provided using the straight line method, pro-rata to the period of use of
assets, at the rates specified in Schedule XIV of the Companies Act, 1956.
c) Foreign currency transaction :
Foreign currency transactions, during the year are recorded at the rates of exchange prevailing on the date of the
transaction. Foreign currency assets and liabilities are translated into rupees at the rates of exchange prevailing on
the date of the Balance Sheet. All exchange difference are dealt with in the statement of profit and loss, except
those relating to the acquisition of fixed assets which are adjusted in the cost of the respective fixed assets.
3. Earning in Foreign Currency
Amount in Rs.
Current Year Previous Year
a) Earning in Foreign exchange viz., F.O.B. value of exports 13,71,33,516 11,69,42,842
b) Expenditure in Foreign Currency 1,59,19,936 12,88,662
Information required by paras 3 & 4 of Part II of Schedule VI of the Companies Act, 1956.
4. Details of Purchases of Finished Goods Marketed by the Company :
Group Current Year Previous Year
Quantity Amount Quantity Amount
Units (In Nos.) Rs. Units (In Nos.) Rs.
Orals 3658800 12,29,06,188 1888780 6,82,59,139
Lotions 30000 8,25,210 59740 12,65,084
Tablets 100000 40,83,022 60000 14,75,125
Ointments 798400 1,84,32,083 2023347 5,28,91,521
Others 23985 27,62,040 70000 16,62,500
Total 14,90,08,543 12,55,53,369
5) Previous year’s figures have been regrouped and rearranged wherever necessary.
120
7 Current Liabilities & Provisions
Sundry Creditors
For Goods 22 26 80 058 17 64 59 828
For expenses 1 21 32 673 65 75 674
Duty Drawback Payable – 69 292
TDS Payable 3 515 1 313
Sales Tax Payable – 26 337
23 48 16 246 18 31 32 444
For N. K. Mittal & Associates
Chartered Accountants
For & on behalf of the Board of Directors
N. K. Mittal B. E. Saldanha G. Saldanha
(Proprietor) Chairperson Director
Membership No. 46785
Place: Mumbai.
Date: 20 April, 2004

GLENMARK EXPORTS LIMITED
GLENMARK EXPORTS LIMITED
Balance Sheet Abstract and Company’s General Business Profile
(a) Registration Details
Registration No.
Balance Sheet Date
(b) Capital raised during the year
Public Issue
Rights Issue
N I L
N I L
Bonus Issue
Private Placement
N I L N I L
(c) Position of Mobilisation and Deployment of Funds
Total Liabilities and shareholders funds
Total Assets
8 3 7 8 6 4 5
8 3 7 8 6 4 5
Sources of Funds
Paid-up Capital
Reserves & Surplus
1 0 0 0 2 0 0
7 3 7 8 4 4 5
Secured loan
Unsecured loan
N I L N I L
Application of Funds
Net Fixed Assets
3 2 6 1 0 1
Investments
N I L
Miscellaneous expenditure
N I L
1 0 2 1 2 5
(D) PERFORMANCE OF THE COMPANY
Turnover
1 4 9 0 0 8 5 4 3
Profit/(Loss) Before Tax
N I L
Earnings per share in Rs
N I L
3 1 0 3 2 0 0 4
Date Month Year
The accompanying notes and Schedules 1 to 8 are an integral part of this balance sheet.
State Code
1 1
Capital Work in Progress
N I L
Net Current Assets
8 0 5 2 5 4 4
Accumulated losses
N I L
Total Expenditure
1 4 9 0 0 8 5 4 3
Profit/(Loss) After Tax
N I L
Dividend rate
N I L
As per our report of even date.
For N. K. Mittal & Associates
For & on behalf of the Board of Directors
Chartered Accountants
N. K. Mittal B. E. Saldanha G. Saldanha
(Proprietor) Chairperson Director
Membership No. 46785
Place: Mumbai.
Date: 20 April, 2004
COMPLIANCE CERTIFICATE
The Members
Glenmark Exports Limited
Mumbai
Company Registration No. Authorised Capital Paid Up Capital
11 - 102125 Rs. 25,00,000/- Rs. 10,00,200/-
I have examined the registers, records, books and papers of GLENMARK EXPORTS LIMITED (the Company) as required to
be maintained under the Companies Act, 1956, (the Act) and the rules made thereunder and also the provisions contained
in the Memorandum of Association and Articles of Association of the Company for the financial year ended on March 31,
2004 (financial year). In my opinion and to the best of my information and according to the examinations carried out by me
and explanations furnished to me by the Company, its officers and agents, I certify that in respect of the aforesaid financial
year:
1. The Company has kept and maintained all registers as stated in Annexure `A' to this certificate, as per the provisions of
the Act and the rules made thereunder and all entries therein have been duly recorded.
2. The Company has duly filed the forms and returns as stated in Annexure `B' to this certificate, with the Registrar of
Companies, Regional Director, Central Government, Company Law Board or other authorities within the time prescribed
under the Act and the rules made thereunder.
3. The Company being a Public Limited Company has the minimum prescribed paid up capital and its maximum number
of members during the said financial year was 7 (seven) excluding its present and past employees
4. The Board of Directors duly met 5 times respectively on May 5, 2003, May 9, 2003, June 16, 2003, December 1, 2003
and March 16, 2004 in respect of which meetings proper notices were given and the proceedings were properly
recorded and signed.
5. The company has not closed its Register of Members under Section 154 of the Act during the financial year under
review.
6. The Annual General Meeting for the financial year ended on March 31, 2003 was held on September 25, 2003 after
giving due notice to the members of the Company and the resolutions passed thereat were duly recorded in Minutes
Book maintained for the purpose.
7. No Extra ordinary General Meeting was held during the financial year.
8. The Company has not advanced any loan to its Directors, or persons, or firms and Companies referred to under section
295 of the Act.
9. The Company has not entered into any contract falling within the purview of Section 297 of the Act.
10. The Company has not required to make any entries in the register maintained under Section 301 of the Act.
11. As there were no instances falling within the purview of section 314 of the Act the Company was not required to
obtain any approval from the Board of Directors, Members and Central Government.
12. The Board of Directors has not issued duplicate share certificates during the financial year under review.
13. The Company has during the financial year:
(i) not made any allotment, transfer/transmission of any shares/debentures and other securities.
(ii) not declared any dividends and hence the Company was not required to deposit any amount as unpaid dividend /
unclaimed dividend in a separate Bank Account.
(iii) not paid / posted warrants for dividends to any members, since no dividend was declared.
(iv) not transferred any amounts to the Investors Education and Protection Fund since there were no unpaid dividends,
application money due for refund, matured deposits, matured debentures and the interest accrued thereon,
outstanding for a period of seven years.
(v) has duly complied with the requirements of Section 217 of the Act.
GLENMARK EXPORTS LIMITED
GLENMARK EXPORTS LIMITED
14. The Board of Directors of the Company is duly constituted and the appointment of directors has been duly made.
15. The Company has not appointed a Managing Director/ Whole time Director/ Manager during the financial year under
review.
16. The Company has not appointed any sole-selling agents during the financial year under review.
17. As explained to me, the Company was not required to obtain any approvals from the Central Government, Company
Law Board, Regional Director, Registrar of Companies and/or such other authorities as may be prescribed under the
various provisions of the Act.
18. The Directors have disclosed their interest in other firms/companies to the Board of Directors pursuant to the
provisions of the Act and the rules made thereunder.
19. The Company has not issued any equity shares/debentures/other securities during the financial year.
20. The Company has not bought back any shares during the financial year ending March 31, 2004.
21. Since the Company has no preference shares/debentures, the Company was therefore not required to redeem any
preference share/debentures during the year under review.
22. There were no transactions necessitating the Company to keep in abeyance the rights to dividend, rights shares and
bonus shares pending registration of transfer of shares.
23. The Company has not invited/accepted any deposits including any unsecured loans falling within the purview of the
provisions of Section 58A and 58AA read with Companies (Acceptance of Deposit) Rules, 1975 during the year under
review.
24. The Company has not made any borrowing during the financial year ended March 31, 2004.
25. The loans given and investments made, or guarantees given or securities provided to other bodies corporate by the
Company during the year does not attract the provision of Section 372A of the Companies Act, 1956
26. The Company has not altered the provisions of the Memorandum of Association with respect to situation of the
Company's registered office from one state to another during the year under scrutiny.
27. The Company has not altered the provisions of the Memorandum of Association with respect to the objects of the
Company during the year under scrutiny.
28. The company has not altered the provisions of the Memorandum of Association with respect to name of the Company
during the year under scrutiny.
29. The Company has not altered the provisions of the Memorandum of Association with respect to share capital of the
Company during the year under scrutiny.
30. The Company has not altered its Articles of Association during the year under scrutiny.
31. There were no prosecution initiated against or show cause notices received by the Company for alleged offences under
the Act and also the fines and penalties or any other punishment imposed on the Company during the financial year
under review.
32. The Company has not received any money as security from its employees during the year under review.
33. The Company has not deposited both employee’s and employer’s contribution to Provident Fund with the prescribed
authorities pursuant to Section 418 of the Act.
For Martinho Ferrao & Associates
Company Secretaries
ANNEXURE ' A '
No. Registers as maintained by the Company Under Section
1 Register of Members 150
2 Minutes Books of proceedings of
i) General Meeting 193
ii) Board of Directors 193
3 Register of Contracts, Companies & Firms in which Directors are interested 301
4 Register of Directors 303
5 Register of Director Shareholding 307
6 Register of Loans & Investments 372A
7 Register of Transfer of Shares Voluntary
8 Register of Charges & Instruments creating charges 136
For Martinho Ferrao & Associates
Company Secretaries
Martinho Ferrao
Place: Mumbai
Proprietor
Dated: July 5, 2004 C P. No. 5676
Returns filed by the Company with the Registrar of Companies, Maharashtra, Mumbai, during the Financial Year
on March 31, 2004
ANNEXURE ' B '
No Form No. Under Purpose When Filed
Section
with ROC
1 Annual Return (as on September 25, 2003) 159 As prescribed in the section November 13, 2003
2 Balance Sheet (as on March 31, 2003) 220 As prescribed in the section October 7, 2003
3 Compliance Certificate 383 (A) As required under the issuance October 7, 2003
of Compliance
Certificate Rules, 2001
For Martinho Ferrao & Associates
Company Secretaries
Martinho Ferrao
Place: Mumbai
Proprietor
Dated: July 5, 2004 C P. No. 5676
Martinho Ferrao
Place: Mumbai
Proprietor
Dated: July 5, 2004 C P. No. 5676
121

GM PHARMA LIMITED
Glenn Saldanha
Gracias Saldanha
B. E. Saldanha
Auditors' Report
GM PHARMA LIMITED
Directors’ Report
To
The Member of GM PHARMA LIMITED.
We have audited the attached Balance Sheet of GM
PHARMA LIMITED as at 31st March, 2004 and the related
Profit & Loss Account and Cash Flow Statement for the
year ended on that date annexed thereto. These financial
statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on
these financial statement based on our audit.
We conducted our audit in accordance with the auditing
standards generally accepted in India. These Standards
require that we plan and perform the audit to obtain
reasonable assurance about whether the financial
statements are free from any material misstatement. An
audit also includes, examining on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. An audit also includes, assessing the
accounting principles used and significant estimates made
by management, as well as evaluating the overall financial
statements presentation. We believe that our audit
provides a reasonable basis for our opinion.
1) As required by the Companies (auditors’ Report) order,
2003, issued by the Central Government of India in
terms of Sections 227 ( 4A) of the Companies Act,
1956, and on the basis of such checks of books and
records of the company as we considered appropriate
and according to the information given to us, we give
in the Annexure A statement on the matters specified
in paragraphs 4 & 5 of the said order, to the extent
applicable to the company.
Further to our comments in the Annexure referred to in
paragraph (1) above, we report that;
(a) We have obtained all the information and explanations,
which to the best of our knowledge and belief were
necessary for the purpose of our audit;
(b) In our opinion, proper book of accounts as required by
law have been kept by the company, so far as it
appears from our examination of those books.
(c) The Balance Sheet, Profit & Loss Account and Cash
Flow Statement dealt with by this report are in
agreement with the books of account.
To the Members,
GM Pharma Limited
Your Directors have pleasure in presenting their Fifth
Annual Report together with the Audited Accounts of the
Company for the year ended March 31, 2004.
FINANCIAL RESULTS
There were no operations during the financial year.
DIVIDEND
Since there is no operating income, your Directors regret
their inability to recommend any dividend.
DIRECTORS
Mr. Glenn Saldanha retires at the ensuing Annual General
Meeting and being eligible, offer himself for reappointment.
AUDITORS
M/s. N. K. Mittal & Associates, Chartered Accountants,
Auditors of the Company hold office until the conclusion of
the ensuing Annual General Meeting and being eligible
offer themselves for re-appointment.
PERSONNEL
As the Company has no employee, information as per
Section 217(2A) of the Companies Act, 1956 read with the
Companies (Particulars of Employees) Rules, 1975, are not
applicable.
COMPANIES (DISCLOSURE OF PARTICULARS IN THE
REPORT OF BOARD OF DIRECTORS) RULES, 1988
The Directors have nothing to report on conservation of
energy, technology absorption and foreign exchange
earnings and outgo as the Company is not engaged in any
manufacturing activity and has no foreign collaboration.
DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to section 217 (2AA) of the Companies Act, 1956,
the Directors confirm:
((i) that in the preparation of the annual accounts, the
applicable accounting standards had been followed.
(ii) that appropriate accounting policies have been selected
and applied consistently and have made judgments and
estimates that are reasonable and prudent so as to give
a true and fair view of the state of affairs of the
Company as at March 31, 2004 and of the Profit or
Loss of the Company for the year ended March 31,
2004.
(iii) that proper and sufficient care has been taken for the
maintenance of adequate accounting records in
accordance with the provisions of the Companies Act,
1956 for safeguarding the assets of the Company and
for preventing and detecting fraud and other
irregularities.
(iv) that the annual accounts have been prepared on a
going concern basis.
Place: Mumbai
Date: July 5, 2004
For and on behalf of the Board of Directors
Glenn Saldanha
Chairman
(d) In our opinion, the Balance Sheet, Profit & Loss
Account and Cash Flow Statement dealt with by this
report comply with the accounting standard referred to
in sub- sections (3c) of section 211 of the companies
Act, 1956.
e) Based on the written representations received from the
Directors as on 31st March, 2004 taken on record by
the Board of Directors and the information &
explanation given to us, we report that non of the
directors are as at 31st March, 2004, prima-facie
disqualified from being appointed as a Director in terms
of clause (g) of sub- section (1) of section 274 of the
Companies Act, 1956.
(f) In our opinion and to the best of our information and
according to the explanation given to us, the said
account give the information required by the
Companies Act, 1956, in the manner so required and
give a true and fair view in conformity with the
accounting principles generally accepted in India;
(i) In the case of the Balance Sheet, of the State of
affairs of the Company as at 31st March’2004
(ii) In the case of Profit & Loss Account, of the loss for
the year ended on that date; and
(iii) In the case of Cash Flow Statement, of the cash
flows for the year ended on that date.
For N. K. Mittal & Associates
Chartered Accountants
Place: Mumbai
Date: 20/04/2004
N. K. Mittal
Proprietor
Membership No. 46785
GM PHARMA LIMITED
GM PHARMA LIMITED
122
Annexure to the Auditors' Report
Referred to in paragraph 1 of the Auditor’s Report of even
date to the members of G M Pharma Limited on the
financial statements for the year ended March 31, 2004.
1. The Company does not have any fixed assets, hence
para 4 A (1) (a),(b) and (c) relating to the maintenance
of records for fixed assets is not applicable to the
company.
2. The Company is not engaged in any manufacturing
activity hence para 4 A (2) (a), (b) and (c), (4), (5) (a) &
(b), are not applicable to the company.
3. The Company has not taken any loans, secured or
unsecured, from Companies covered in the register
maintained under Section 301 of the Act. Hence para
4A, 3 (b),(c) and (d) are not applicable to the Company.
4. The company has not accepted any deposits from the
public within the meaning of Sections 58A and 58AA
of the Act and the rules framed there under.
5. In our opinion, the Company has an internal audit
system commensurate with its size and nature of its
business.
6. The Central Government has not prescribed
maintenance of cost records under Section 209 (1)(d)
of the Companies Act 1956 for any of the products of
the Company
7. According to the information and explanations given to
us and the records of the Company examined by us, in
our opinion, the Company is generally regular in
depositing the undisputed statutory dues including
provident fund, investor education and protection fund,
employees’ state insurance, income-tax, sales-tax,
wealth tax, customs duty, excise duty, cess and other
material statutory dues as applicable with the
appropriate authorities.
8. The Company no accumulated losses as at March
31,2004 and it has incurred cash losses of Rs.7420/- in
the financial year ended on that date.
9. According to the records of the Company examined by
us and the information and explanations given to us,
the Company has not defaulted in repayment of dues
to any financial institution or bank or debenture holders
as at the balance sheet date.
10. The Company has not granted any loans and advances
on the basis of security by way of pledge of shares,
debentures and other securities.
11. The provisions of any special statute applicable to chit
fund/ nidhi/ mutual benefit fund/ societies are not
applicable to the Company.
12. In our opinion, the Company is not a dealer or trader in
shares, securities, debentures and other investments.
13. In our opinion, and according to the information and
explanations given to us, the Company has not given
any guarantee for loans taken by others from banks or
financial institutions during the year.
14 In our opinion, and according to the information and
explanations given to us, on an overall basis, the
Company has not availed any term loans.
15 On the basis of an overall examination of the balance
sheet of the Company, in our opinion and according to
the information and explanations given to us, there are
no funds raised on a short –term basis which have
been used for long- term investment.
16. The Company has not made any preferential allotment of
shares to parties and companies covered in register
maintained under Section 301 of the act during the year.
17. The Company has not issued any debenture, hence
securities created in respect of debenture is not
applicable to the company.
18.The Company has not raised any money by public
issues during the year.
19. During the course of our examination of the books and
records of the Company, carried out in accordance
with the generally accepted auditing practices in India,
and according to the information and explanations
given to us, we have neither come across any instance
of material fraud on or by the Company, noticed or
reported during the year, nor have we been informed
of such case by the management.
For N. K. Mittal & Associates
Chartered Accountants
Place: Mumbai
Date: 20/04/2004
N. K. Mittal
Proprietor
Membership No. 46785
Balance Sheet
Amount in Rs.
As at 31st March, Schedules 2004 2003
SOURCES OF FUNDS
Shareholders' Funds
Share Capital 1 10 00 000 10 00 000
Total 10 00 000 10 00 000
APPLICATION OF FUNDS
Current Assets, Loans & Advances 2
Cash & Bank balances 3 46 107 76 535
Loans & Advances 7 88 054 10 88 055
11 34 161 11 64 590
Current Liabilities & Provisions 3
Sundry Creditors 1 37 820 1 32 420
Other Liabilities 3 762 32 170
1 41 581 1 64 590
Net current Assets 9 92 580 10 00 000
Profit & Loss Account 7 420 –
Total 10 00 000 10 00 000
Notes to accounts & Significant Accounting Policies 4
As per our report of even date annexed
For N. K. Mittal & Associates
Chartered Accountants
For & on behalf of the Board of Directors
N. K. Mittal Glenn Saldanha G. Saldanha
(Proprietor) Chairman Director
Membership No. 46785
Place: Mumbai.
Date: 20 April, 2004

GM PHARMA LIMITED
GM PHARMA LIMITED
Profit & Loss Account
Amount in Rs.
For the year ended 31st March, Schedules 2004 2003
INCOME
Sales – –
Total – –
EXPENDITURE
Bank Charges 20 –
ROC Fees 2 000 –
Auditor's Remuneration 5 400 –
7 420 –
Profit / (Loss) for the year (7 420) –
Profit After Taxation (7 420) –
Profit / (Loss) b/f from the previous year
Balance Carried to Balance Sheet (7 420) –
Schedules forming part of the Balance Sheet
Amount in Rs.
As at 31st March, 2004 2003
1. SHARE CAPITAL
Authorised Share Capital 1,000,000 1,000,000
1,00,000 Equity shares of Rs. 10/- each.
Issued , Subscribed & Paid-up Share capital 1,000,000 1,000,000
1,00,000 Equity shares of Rs. 10/- each.
(Fully held by Glenmark Pharmaceuticals Limited, the Holding Company)
2. Current assets , Loans & Advances
Cash & Bank balance 346,107 76,535
Advance recoverable in cash or kind 788,054 1,088,055
1,134,161 1,164,590
3. Current Liabilities & Provisions
Sundry creditors 137,820 132,420
Other liabilities 3,761 32,170
141,581 164,590
As per our report of even date annexed
For N. K. Mittal & Associates
Chartered Accountants
For & on behalf of the Board of Directors
N. K. Mittal Glenn Saldanha G. Saldanha
(Proprietor) Chairman Director
Membership No. 46785
Place: Mumbai.
Date: 20 April, 2004
4. Notes to the Financial Statements for the year ended March 31, 2004
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. The financial statements are prepared under the historical cost convention, on the accrual basis of accounting and in
accordance with the accounting standards specified in section 211 (3C) of the Companies Act, 1956.
2. In the opinion of the Board, Current Assets, Loans and Advances are approximately of the value stated, if realized in
ordinary course of the business.
3. Previous year’s figures have been regrouped and rearranged wherever necessary.
As per our report of even date attached.
For N. K. Mittal & Associates
Chartered Accountants
For & on behalf of the Board of Directors
N. K. Mittal Glenn Saldanha G. Saldanha
(Proprietor) Chairman Director
Membership No. 46785
Place: Mumbai.
Date: 20 April, 2004
GM PHARMA LIMITED
Compliance Certificate
To,
The Members,
GM PHARMA LIMITED,
Mumbai.
Company Registration No. Authorised Capital Paid Up Capital
11 – 121475 Rs. 10,00,000/- Rs. 10,00,000/-
We have examined the registers, records, books and
papers of GM PHARMA LIMITED (the Company) as
required to be maintained under the Companies Act, 1956,
(the Act) and the rules made thereunder and also the
provisions contained in the Memorandum of Association
and Articles of Association of the Company for the financial
year ended 31st March, 2004 (financial year). In our
opinion, and to the best of our information and according to
the examinations carried out by us and explanations
furnished to us by the Company, its officers and agents,
we certify that in respect of the aforesaid financial year:
1. The Company has kept and maintained all registers as
stated in Annexure `A’ to this certificate, as per the
provisions of the Act and the rules made thereunder
and all entries therein have been duly recorded.
2. The Company has duly filed the forms and returns as
stated in Annexure `B’ to this certificate, with the
Registrar of Companies, Regional Director, Central
Government, Company Law Board or other authorities
within the time prescribed under the Act and the rules
made thereunder.
3. The Company, being a Subsidiary of Public Limited
Company became a Public Limited Company in terms
of section 3(1)(iv)(c) of the Companies Act, 1956 and its
maximum number of members during the financial year
was Seven and has the minimum prescribed paid-up
capital.
4. The Board of Directors duly met four times respectively
on 16th May, 2003, 16th July, 2003, 1st December,
2003 and 16th March, 2004 in respect of which
meetings proper notices were given and the
proceedings were properly recorded and signed.
5. The Company was not required to close its Register of
Members or Debenture holders during the financial
year.
6. The Annual General Meeting for the financial year ended
on 31st March 2003 was held on 25th September, 2003
after giving due notice to the members of the Company
and the resolutions passed thereat were duly recorded
in Minutes Book maintained for the purpose.
7. No Extra Ordinary General Meeting was held during the
financial year.
8. The Company has not advanced any loan to its Directors
or persons or firms or companies referred to under
Section 295 of the Act.
9. The Company has not entered into any contracts falling
within the purview of Section 297 of the Act.
10. The Company was not required to make any entries in
the register maintained under Section 301 of the Act.
11. As there were no instances falling within the purview
of Section 314 of the Act, the Company has not
obtained any approvals from the Board of Directors,
members or Central Government, as the case may be.
12. The Company has not issued any duplicate certificates
during the financial year.
13. During the financial year;
a. There was no allotment transfer/transmission of
securities during the year.
b. The Company has not deposited any amount in a
separate bank account as no dividend was declared.
c. The Company has not posted warrants to any
member of the Company as no dividend was
declared.
d. There was no amounts in unpaid dividend account,
application money due for refund, matured deposits,
matured debentures and the interest accrued which
have remained unclaimed or unpaid for a period of
seven years be transferred to Investor Education
and Protection Fund.
e. The Company has duly complied with the
requirements of Section 217 of the Act.
14. The Board of Directors of the Company is duly
constituted. There was no appointment of additional
directors, alternate directors and directors to fill casual
vacancy during the financial year.
15. The Company has not appointed any Managing
Director/ Whole Time Director/ Manager during the
financial year.
16. The Company has not appointed any sole selling agents
during the financial year.
17. The Company was not required to obtain any approvals
of the Central Government, Company Law Board,
Regional Director, Registrar of Companies and/or such
authorities prescribed under the various provisions of
the Act.
18. The Directors have disclosed their interest in other
firms/ companies to the Board of Directors pursuant to
the provisions of the Act and the rules made
thereunder.
19. The Company has not issued any shares, debentures or
other securities during the financial year.
20. The Company has not bought back any shares during
the financial year.
21. There was no redemption of preference shares or
debentures during the financial year.
22. There were no transactions necessitating the Company
to keep in abeyance the rights to dividend, rights
shares and bonus shares pending registration of
GM PHARMA LIMITED
transfer of shares.
23. The Company has not invited/ accepted any deposits
including any unsecured loans falling within the purview
of Section 58A during the financial year.
24. The Company has not made any borrowings during the
financial year ended 31st March, 2004.
25. The loans given and investments, or given guarantees
or provided securities to other bodies corporate during
the year are within the preview of the provision of
Section 372A of the Companies Act, 1956.
26. The Company has not altered the provisions of the
Memorandum of Association of with respect to
situation of the Company’s registered office from one
state to another during the year under scrutiny.
27. The Company has not altered the provisions of the
Memorandum of Association with respect to the
objects of the Company during the year under scrutiny.
28. The Company has not altered the provisions of the
Memorandum of Association with respect to name of
the Company during the year under scrutiny.
29. The Company has not altered the provisions of the
Memorandum of Association with respect to share
capital of the Company during the year under scrutiny.
30. The Company has not altered its Articles of Association
during the financial year.
31. There was no prosecution initiated against or show
cause notices received by the Company, during the
financial year, for offences under the Act.
32. The Company has not received any money as security
from its employees during the financial year.
33. The Company has not deducted any contribution
towards Provident Fund during the financial year in
terms of Section 418 of the Companies Act, 1956.
For S. S. RAUTHAN & ASSOCIATES,
Company Secretaries
Surjan Singh Rauthan
Place : Mumbai
Proprietor
Date : July 5, 2004 C.P. No. 3233
123

GM PHARMA LIMITED
GLENMARK IMPEX LLC
Muddanna Anil
Annexure – A
Registers as maintained by the Company
1. Register of members under Section 150 and Index of Members under Section 151.
2. Register of Transfers
3. Register of particulars of contracts in which Directors are interested under Section 301.
4. Register of Directors, Managing Director, Manager and Secretary under Section 303.
5. Register of Director’s shareholding under Section 307.
6. Register of investments or loans made, guarantee given or security provided under Section 372A (w.e.f. 31.10.1998).
Directors’ Report
Your Director is pleased to present the Company’s Third
Annual Report together with the Audited Annual Accounts
of the Company for the period ended 31st March, 2004.
FINANCIAL RESULTS
During the aforesaid period, the Company had no trading
activity and hence there is no operational income.
DIVIDEND
Since there is no operational income, no dividend is
proposed to be declared by the Company.
been appointed General Director in place of Mr. Sudip
Majumdar.
AUDITORS
Auditors of the Company M/s. Allent, an accounting and
law firm, hold office until the conclusion of ensuing Annual
General Meeting and being eligible offer themselves for
re-appointment.
For and on behalf of the Board of Directors
For S. S. RAUTHAN & ASSOCIATES,
Company Secretaries
DIRECTORS
Mr. Sudip Majumdar ceased to be the General Director
with effect from August 1, 2003. Mr. Muddanna Anil has
Date: April 12, 2004
Place: Moscow
Muddanna Anil
General Director
Surjan Singh Rauthan
Place : Mumbai
Proprietor
Date : July 5, 2004 C.P. No. 3233
Annexure – B
Forms and Returns as filed by the Company with Registrar of Companies, Regional Director, Central Government or other
authorities during the financial year ended 31st March 2004.
1. Annual Return – AGM held on 25.09.2003 – Filed u/s 159 on 20/11/2003
2. Balance Sheet & Profit & Loss A/c. – Year Ended 31.03.2003 – Filed u/s 220 on 07/10/2003
3. Compliance Certificate - Year Ended 31.03.2003 - Filed u/s 383A(1) on 07/10/2003
For S. S. RAUTHAN & ASSOCIATES,
Company Secretaries
Surjan Singh Rauthan
Place : Mumbai
Proprietor
Date : July 5, 2004 C.P. No. 3233
Auditor’s Report
Introduction
We have audited the financial statements of Glenmark
Impex LLC, a limited liability Company for the fiscal periods
from Jan 1, 2004 to March 31, 2004 inclusive. The Head
of Glenmark Impex LLC, a limited liability Company is
responsible for the preparation of the financial statements,
while our responsibility is to form an independent opinion
based on the audit of those financial statements as well as
oral explanations of the authorized persons of Glenmark
Impex LLC, Moscow office.
Basis of opinion
We conducted our audit in accordance with Auditing
Standards issued by Auditing Practices Committee. The
audit includes examination of evidence relevant to the
amounts and disclosures in the financial statements.
We planned and performed our audit so as to obtain all the
information and oral explanations which we considered
necessary in order to provide us with sufficient evidence to
give reasonable assurance that the financial statements are
free from material misstatement, whether caused by fraud
or other irregularity or error. In forming our opinion, we
also evaluated the overall adequacy of the presentation of
information in the financial statements.
Opinion
In our opinion, the financial statements give a true and fair
view of the state of the Company’s affairs as at 31st March
2004 and have been properly prepared.
Place: Moscow
Date: 12th April, 2004
For Allent Accounting & Law firm
Public Accountant
Elena V. Ermakova
General Director
GLENMARK IMPEX LLC
Balance Sheet
Amt in USD
As at 31st March, Schedules 2004 2003
SOURCES OF FUNDS
Share Capital
(100% held by Glenmark Pharmaceuticals Ltd, Mumbai. India)
Chartered Capital 5 000.00 5 000.00
Equity Capital 2 58 740.00 2 58 740.00
Total 2 63 740.00 2 63 740.00
APPLICATION OF FUNDS
Fixed Assets 5 371.41 5 371.41
Current Assets, Loans & Advances
Balance with bank – –
Miscellaneous expenditure to the extent not written off
Preoperative expenses 2 58 368.59 2 58 368.59
Total 2 63 740.00 2 63 740.00
As per our report of even date annexed
For Allent Accounting & Law Firm
Public Accountants
For Glenmark Impex LLC
Glenn Saldanha
R.V. Desai
Marshall J. Mendonza
Directors’ Report
Your Directors are pleased to present the Company’s First
Annual Report together with the Audited Annual Accounts
of the Company for the period ended 31st March, 2004.
FINANCIAL RESULTS
During the aforesaid period, the Company had not
commenced any activity and hence there is no operational
income.
Your Company hs acquired a local manufacturing Company
having an ANVISA approved plant in Brazil for US$ 5.25
million. The facilities shall be used for manufacturing
formulations. The acquisition will facilitate enhancing
business interests in the domestic markets and entry in the
other Latin American markets.
DIVIDEND
Since there is no operational income, no dividend is
GLENMARK FARMACEUTICA LTDA
proposed to be declared by the Company.
DIRECTORS
The Directors, Mr. Glenn Saldanha, Mr. Rajesh. V. Desai
and Mr. Marshall Mendonza retire at the ensuing
Quotaholders Meeting being eligible offer themselves for
re-appointment.
AUDITORS
Auditors of the Company M/s Repus Auditoria &
Constabilidade Ltda hold office until the conclusion of
ensuing Quotaholders Meeting and being eligible offer
themselves for re-appointment.
For and on behalf of the Board of Directors
Date: April 12, 2004
Place: Sao Paulo
Glenn Saldanha
Chairman
Elena V Ermakova
General Director
Date : 12th April 2004
Muddanna Anil
General Director
Auditor’s Report
124
The Board of Directors
Glenmark Farmaceutica Ltda
We have audited the accompanying Balance Sheet of
Glenmark Farmaceutica Ltda as of 31st March, 2004. The
financial statements are the responsibility of the company’s
management. Our responsibility is to express an opinion
on the Balance sheet based on the audit.
The audit has been conducted in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable
assurance about whether the balance sheet is free of
material misstatements. An audit includes examining on, a
test basis, evidence supporting the amounts and
disclosures in the balance sheet. An audit also includes
assessing the accounting principles used and the
significant estimates made by the management as well as
evaluating the overall financial statement presentation. We
believe our audit provides a reasonable basis for opinion.
In our opinion, the Balance sheet referred to above,
present fairly in all material aspects the financial position of
Glenmark Farmaceutica Ltda as of 31st March 2004 in
conformity with generally accepted accounting principles.
As per our report of even date annexed
for REPUS Auditoria & Contabilidade Ltda
CRC 2SP 007.220/0-7
Sergio Henrique da Silva Macedo
Accountant, CRC 1SP 185.764/0-4
Rubens Vilibor,
Accountant, CRC 1SP 048.688/0-7

GLENMARK FARMACEUTICA LTDA
GLENMARK FARMACEUTICA LTDA
Balance Sheet
Reals in {000’s)
As at 31st March, Schedules 2004
SOURCES OF FUNDS
Shareholders' Funds
Share capital 1 1,118.86
Reserves and surplus –
1,118.86
Loan Funds –
Total 1,118.86
APPLICATION OF FUNDS
Fixed Assets 2
Gross Block 418.67
Less : Depreciation –
Net Block 418.67
Investments –
Current Assets, Loans and Advances
Inventories –
Sundry debtors –
Cash and bank balances 3 73.43
Loans and advances 4 59.61
133.04
Less : Current Liabilities and Provisions
Current liabilities 127.12
127.12
Net Current Assets 5.91
Miscellaneous Expenditure 5 694.28
(to the extent not written off or adjusted)
Total 1,118.86
Notes to accounts & significant Accounting Policies 6
Schedules referred to above form an integral part of the Balance Sheet.
As per our report of even date annexed
for REPUS Auditoria & Contabilidade Ltda
CRC 2SP 007.220/0-7
Sergio Henrique da Silva Macedo
Accountant
CRC 1SP 185.764/0-4
Rubens Vilibor
CRC 1SP 048.688/0-7
Schedules forming part of the Balance Sheet
For Glenmark Farmaceutical Ltd.
Rajesh Desai
Director
Date: 15 April, 2004
Reals in {000’s)
As at 31st March, 2004
1. SHARE CAPITAL
Authorised
1118857 Equity shares of 1 Reals/- each 1,118.86
Issued, Subscribed and Paid-up
1118857 Equity shares of 1 Reals/- each 1,118.86
Total 1,118.86
2. Fixed Assets
Capital WIP 418.67
Total 418.67
Schedules forming part of the Balance Sheet
Reals in {000’s)
As at 31st March, 2004
3. Cash and Bank Balances
Balances with banks 73.43
Total 73.43
4. Loans and Advances (unsecured, considered good)
Advances recoverable in cash or kind or for value to be received 54.29
Prepaid expenses 5.32
Total 59.61
5. Miscellaneous Expenditure
(to the extent not written off or adjusted)
Preoperative expenses 694.28
Total 694.28
As per our report of even date annexed
For Glenmark Farmaceutical Ltd.
for REPUS Auditoria & Contabilidade Ltda
CRC 2SP 007.220/0-7
Sergio Henrique da Silva Macedo
Rajesh Desai
Accountant, CRC 1SP 185.764/0-4
Director
Rubens Vilibor,
Accountant,CRC 1SP 048.688/0-7 Date: 15 April, 2004
Schedules annexed to and forming part of Annual Accounts as at 31st March 2004
6. Notes to Financial Statements
1. Significant Accounting Policies
i) Basis of Accounting
The Financial Statement are prepared under the historical cost convention on the accrual basis of accounting, in
confirmity with the generally accepted accounting principles.
ii) Fixed Assets and Depreciation
No depreciation has been provided as no fixed assets have been capitalised during the period.
iii) Foreign Currency Transaction
Foreign currency transaction will be accounted at the exchange rates prevalent on the dates of the transactions.
Assets and Liabilities will be recorded at the year end rates except for non monerary assets which are accounted
for at the exchange rate prevalent on the date of acquision. Exchange gains and losses on translation will be
charged to the Currency fluctuation Reserve Account.
iv) Segment
In the absence of sales, no segment is determined.
2. Contingent Liabilities
The company is not contingently liable for any amount
3. Related Party Transactions
Transactions with Holding Company include: Reals’ 000
Advances payable to defray operational expenses 72,7250
As per our report of even date annexed
For Glenmark Farmaceutical Ltd.
for REPUS Auditoria & Contabilidade Ltda
CRC 2SP 007.220/0-7
Sergio Henrique da Silva Macedo
Rajesh Desai
Accountant, CRC 1SP 185.764/0-4
Director
Rubens Vilibor,
Accountant,CRC 1SP 048.688/0-7 Date: 15 April, 2004
GLENMARK PHARMACEUTICALS INC., USA
GLENMARK PHARMACEUTICALS INC., USA
Glenn Saldanha
Jeffrey Weiss
Cheryl Pinto
Balance Sheet
Amount in USD
As at 31st March, Schedules 2004
ASSETS
Current Assets
Cash 51,275
Employee Loans Receivable 17,187
Due From Affiliated Company 4,559
Total Current Assets 73,021
Property and Equipment, net of accumulated depreciation 181,752
Other Assets
Intangible assets, net of amortization 32,992
Product Development 1,936,521
Intellectual Property 457,252
Security Deposit 8,790
Deferred Tax Assets 103,679
Total Other Assets 2,539,234
Total Assets 2,794,007
LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities
Trade Accounts Payable 437,183
Total Liabilities 437,183
Equity
Retained Earnings (143,176)
Shareholders' Equity
Common Stock, ($1 par value, 2,500,000
shares issued and outstanding) 2,500,000
Total Shareholders' Equity 2,356,824
Total Liabilities & Shareholders' Equity $2,794,007
Directors’ Report
Your Directors are pleased to present their First Annual
Report together with the Audited Annual Accounts of your
Company for the period ended 31st March, 2004.
FINANCIAL RESULTS
During the financial period your Company set-up operations
at New Jersey, USA to essentially register and market the
products of its parent Company viz. Glenmark
Pharmaceuticals Limited.
Your Company has entered into a product development and
marketing license agreement with K. V. Pharmaceuticals
Company (KV). Your Company under the terms of the
agreement will initially develop and license to KV generic
products for regulation approval and marketing in the North
American Market. Your Company expects to launch the
first product under the agreement during the last half of
2005.
DIVIDEND
Since there is no operational income, no dividend is
Auditor’s Report
To the Board of Directors
Glenmark Pharmaceuticals Inc., USA
Princeton, New Jersey 08540
I have audited the accompanying balance sheet of
Glenmark Pharmaceuticals Inc., USA as of March 31, 2004,
and the related statements of income, retained earnings,
and cash flows for the year then ended. These financial
statements are the responsibility of the Company’s
management. My responsibility is to express an opinion
on these financial statements based on my audit.
I conducted my audit in accordance with auditing standards
generally accepted in the United States of America. Those
standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.
proposed by the Directors.
DIRECTORS
Mr. Sameer Paigankar ceased to be a Director with effect
from March 29, 2004. Ms. Cheryl Pinto was appointed as
Director on April 1, 2004. The Directors, Mr. Glenn
Saldanha, Mr. Jeffrey Weiss and Ms. Cheryl Pinto being
eligible have offered themselves for re-appointed.
AUDITORS
M/s Arthur DeDominicis & Company, were appointed as
the First Auditors of the Company by the Board to hold
office upto the date of the ensuing Annual General
Meeting, being eligible, have offered themselves for
re-appointment.
For and on behalf of the Board of
Date: May 7, 2004
Place: Princeton, New Jersey
Glenn Saldanha
Chairman
An audit also includes assessing the accounting principles
used and significant estimates made by management, as
well as evaluating the overall financial statement
presentation. I believe that my audit provides a reasonable
basis for my opinion.
In my opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Glenmark Pharmaceuticals Inc., USA as of March 31,
2004, and the results of its operations and its cash flows
for the year then ended in conformity with accounting
principles generally accepted in the United States of
America.
Arthur DeDominicis, CPA
May 7, 2004
Beacon, New York
Arthur De Dominicis CPA
May 7, 2004
Beacon, New York
125

GLENMARK PHARMACEUTICALS INC., USA
GLENMARK PHARMACEUTICALS INC., USA
Statement of Income and Retained Deficit
Amount in USD
As at 31st March, 2004
COST AND EXPENSES
General and Administrative 78,962
Occupancy 72,587
Depreciation & Amortization 53,686
Utilities 42,797
Total Expenses 248,032
Loss From Operations (248,032)
Other Income
Interest Income 1,958
Loss Before IncomeTaxes (246,074)
Provision for Income Taxes (Note E) (102,898)
Net Loss (143,176)
Retained Deficit - Begining –
Retained Deficit - Ending $ (143,176)
Cash Flow Statements
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (143,176)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 53,686
Changes in assets and liabilities:
(Increase)/Decrease in security deposits (8,790)
(Increase)/Decrease due from affiliate (4,559)
(Increase)/Decrease in employee loan receivable (17,187)
(Increase)/Decrease in intangible assets (41,240)
(Increase)/Decrease in product development (1,936,521)
(Increase)/Decrease in intellectual property (457,252)
(Increase)/Decrease in deferred tax assets (103,679)
Increase/(Decrease) in accounts payable 437,183
Total Adjustments (2,078,359)
Net Cash Used in Operating Activities (2,221,535)
Cash Flows From Investing Activities:
Increase in building improvements, equipment, furniture and fixtures (227,190)
Net Cash Used in Investing Activities (227,190)
Cash Flows From Financing Activities:
Investment by parent company 2,500,000
Net Cash Provided by Financing Activities 2,500,000
Net Increase in Cash 51,275
Cash - Beginning of Year –
Cash - End of Year $ 51,275
Supplemental Information:
Income taxes paid $ 781
Interest paid –
Note A - Summary of Significant Accounting Policies
Nature of Operations
The Company is a subsidiary of Glenmark Pharmaceuticals Ltd. (GPL), an Indian company. GPL holds 96% of the
outstanding shares. The Company will manufacture and distribute both generic and brand drugs to Borth America through
alliances and agreements with other pharmaceutical companies. With strong ties to the Parent company in India, the
Company will have unlimited resources in both research and development. The Company expects to launch several generic
drugs over the next 12 to 16 months.
Property and Equipment
Property, plant and equipment are recorded at cost and depreciation is provided over their estimated useful lives on a
straight-line basis:
The useful lives of property and equipment for purposes of computing depreciation are:
Year
Equipment 5
Furniture & Fixtures 5
Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized.
Expenditures for maintenance and repairs are charged to expense as incurred.
Intangibles
Organizational costs incurred during the year is amortized over 5 years.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principals in the United States of
America requires management to make estimates and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
Note B – Related Party Transactions
The Company has a receivable due from Glenmark Pharmaceutical Ltd, the Parent company. Advances are non-interest
bearing and due on demand.
Note C – Property and Equipment
Property and Equipment are as follows at March 31, 2004:
Furniture and Fixtures $ 37,590
Equipment 189,600
Total 227,190
Less accumulated depreciation 45,438
Net property and equipment $ 181,752
Depreciation expense for the year ended March 31, 2004 was $ 45,438.
Note D – Intangible Assets
Intangibles are as follows at March, 31 2004:
Organizational cost $ 41,240
Less accumulated amortization 8,248
Net intangibles $ 32,992
Estimated annual amortization expense at March, 31 2004:
Fiscal Year Ended
03/31/05 $ 8,248
03/31/06 8,248
03/31/07 8,248
03/31/08 8,248
03/31/09 –
GLENMARK PHARMACEUTICALS INC., USA
Note E – Provision for Income Taxes
The Company has available at march 31, 2004, unused operating loss carryforwards of $246,855, which may be applied
against future taxable income.
The provision for Income Taxes for the year ended March 31, 2004 consists of the following:
Federal $ –
State 781
Total Current Portion 781
Deferred income Taxes (benefits)
Federal (83,931)
state (19,748)
Total Deferred Taxes (103,679)
Total Tax Provision $ (102,898)
Note F – Capital Stock
The Company has 3,700,000 shares of Class A Common Voting Stock at a par value of $1; 2,500,000 shares are issued and
outstanding at March 31, 2004.
The Company has 300,000 shares of Class B Common Non-Voting Stock at a par value of $1; no shares are issued and
outsnding at March 31, 2004.
Note G – Preferred Stock
The Company has 1,000,000 shares of Preferred Stock at a par value of $1, no shares are issued and outstanding at March
31, 2004.
126

Glenn Saldanha
Marshall J. Mendonza
Sangeet Meherotra
Venay Panemanglor
Celia S. Panemanglor
Directors’ Report
Your Director are pleased to present the Company’s First
Annual Report together with the Audited Annual Accounts
of the Company for the period ended 31st March, 2004.
FINANCIAL RESULTS
The Company is in the early stages of setting-up business
operation and hence there us no operating income, during
the aforesaid period.
DIVIDEND
Since there is no operational income, no dividend is
proposed to be declared by the Directors.
DIRECTORS
The Directors, Mr. Glenn Saldanha, Mr. Marshall
Mendonza, Mr. Sangeet Mehrotra, Mr. Vinay Panemanglor,
Auditor’s Report
THE BOARD OF DIRECTORS
GLENMARK PHILIPPINES INC. 2609
Prestige Tower
Condominium Emerald Avenue,
Ortigas Center Pasig City, MM,
Philippines
I have audited the accompanying Balance Sheet of
Glenmark Philippines, Inc as of March 31, 2004. The
financial statements are the responsibility of the company's
management. My responsibility is to express an opinion on
the Balance Sheet based on my audit.
I conducted my audit in accordance with generally
accepted auditing standards. Those standards require that I
plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing
the accounting principles used and significant estimates
made by management, as welt as evaluating the overall
GLENMARK PHILIPPINES INC.
and Ms. Celia S. Panemanglor as per the bylaws of the
Company, retire at the ensuing Annual General Meeting
and being eligible, offer themselves for re-appointment.
AUDITORS
Audditors of the Company, M/s Straightline Accounting &
Consulting hold office until the conclusion of the ensuing
Annual General Meeting and being eligible have offered
themselves for re-appointment.
For and on behalf of the Board of Directors
Date: April 12, 2004
Place: Manila
Glenn Saldanha
Chairman
financial statement presentation. I believe my audit
provides a reasonable basis for my opinion.
In my opinion, the Balance Sheet referred to above present
fairly, in all material respects, the financial position of
Glenmark Philippines, Inc. as of March 31, 2004 in
conformity with generally accepted accounting principles.
Edgar C. Sanchez
CPA Cert. No. 78923, PTR No. 5369596
Quezon City, Philippines
Makati City, Philippines
April 12, 2004
Home Office: 5 Harvard St.,
St. Ignatius Village, Quezon City, Philippines.
Tel. No. 911-1761
GLENMARK PHILIPPINES INC.
Balance Sheet
Pesos in ,000
As at 31st March, Schedules 2004
SOURCES OF FUNDS
Shareholders' Funds
Share capital 1 11,540.26
Reserves and surplus –
11,540.26
Loan Funds –
Total 11,540.26
APPLICATION OF FUNDS
Fixed Assets 2
Gross Block 780.55
Less : Depreciation –
Net Block 780.55
Investments
Current Assets, Loans and Advances
Inventories –
Sundry debtors –
Cash and bank balances 3 9,966.41
Loans and advances 4 218.71
10,185.12
Less : Current Liabilities and Provisions
Current liabilities –
Net Current Assets 10,185.12
Miscellaneous Expenditure 5 574.59
(to the extent not written off or adjusted)
Total 11,540.26
Notes to Accounts and Significant Accounting Policies 6
Schedules referred to above form an integral part of the Balance Sheet.
As per our report of even date annexed
For Straightline Accounting & Consulting
Edgar C. Sanchez
CPA Cert. No. 78923
PTR 8369596
Issued in Quezon City, Philippines
Date: 12 April, 2004
For Glenmark Philippines Inc.
Sangeet Mehrotra
Director
GLENMARK PHILIPPINES INC.
Schedules forming part of the Balance Sheet
Pesos in ,000
As at 31st March, 2004
1. Share Capital
Authorised
56000 Equity shares of 200 Pesos/- each 11,200.00
Issued, Subscribed and Paid-up
56000 Equity shares of 200 Pesos/- each 11,200.00
Share Application money 340.26
Total 11,540.26
2. Fixed Assets
Capital WIP 780.55
Total 780.55
3. Cash and Bank Balances
Cash in hand 49.25
Balances with banks –
USD account (Bal. USD 154978) 8,725.26
Peso account 1,191.90
Total 9,966.41
4. Loans and Advances (unsecured, considered good)
Advances recoverable in cash or kind or for value to be received 218.71
Total 218.71
5. Miscellaneous Expenditure
(to the extent not written off or adjusted)
Preoperative expenses 574.59
Total 574.59
6. Notes to Financial Statements
1. Significant Accounting Policies
i) Basis of Accounting
The Financial Statements are prepared under the historical cost convention, on the accrual basis of accounting, in
confirmity with the generally accepted accounting principles.
ii) Fixed Assets and Depreciation
No depreciation has been provided as no fixed assets have been capitalised during the period.
iii) Foreign Currency Transaction
Foreign currency transactions will be accounted at the exchange rates prevalent on the dates of the transactions.
Assets and Liabilities will be recorded at the year end rates except for non monetary assets which are accounted
for at the exchange rate prevalent on the date of acquisition. Exchange gains and losses on translation will be
charged to the Currency fluctuation Reserve Account.
iv) Segment
In the absence of sales, no segment is determined.
2. Contingent Liabilities
The company is not contingently liable for any amount.
127

Management is about
doing things right,
leadership is doing
the right things.
– Peter F. Drucker
128

Glenmark Pharmaceuticals Limited
Introduction
Glenmark Pharmaceuticals Limited
(Glenmark) is an India-based growing
pharmaceuticals company
headquartered at Mumbai.
Incorporated in 1977, the company is
focused on the manufacture and
marketing of branded formulation
products and active pharmaceutical
ingredients. In addition to a strong
Indian franchise, Glenmark enjoys a
diversified and growing presence in
regulated and developing international
markets. Over the years, the
company has also catalysed its
growth through investment in
dedicated research and development
teams. Separate teams focus on
process reverse - engineering drugs
for launch across markets and
research in novel drug delivery
systems. In addition, a future-focused
team is presently engaged in the
discovery of new chemical entities
that will translate into wholly new
drugs for a global launch.
Brands
In India, Glenmark enjoys a visible and
growing branded formulations
presence. A number of its products
have emerged as brand leaders:
Ascoril, Candid-B and Altacef, three of
Glenmark’s top-selling brands, are
ranked high in the community of the
most successful pharmaceutical
brands of India, and are also leaders
in their individual therapeutic baskets.
The success is not only limited to
older brands - several of Glenmark’s
recent launches such as Valus and
Vorth have already achieved
leadership position in their respective
segments. Glenmark’s brands are
actively promoted by its large field
force, reinforced by focussed support
that is provided through the
company’s three marketing divisions.
Manufacturing
Over the years, Glenmark
strengthened its integration across
the pharmaceutical value-chain
through operations across four
manufacturing plants:
Formulations: Nasik and Goa,
APIs: Kurkumbh and Ankleshwar.
The Ankhleshwar plan acquired from
GlaxoSmithKline has now been
upgraded to meet with USFDA
certification. Another API
manufacturing facility has been
recently acquired at Solapur. The
company has also recently
commissioned a state-of-the-art
formulations plant at Goa, built in
stringent compliance with USFDA and
other regulated market standards.
Research and
development
Research lies at the heart of
Glenmark’s existence. Over the years,
the company has invested in a stateof-art
R&D centre in Mahape on the
outskirts of Mumbai. This R&D centre
employs over 250 scientists who
possess a vast experience across
several disciplines and technology
platforms. The company’s research
encompasses new chemical entity
research (NCE) and novel drug
delivery systems (NDDS). This IPRgenerating
activity is supplemented
by dedicated teams that are engaged
in process engineering of bulk drugs
and developing formulations for
launch in regulated markets. Another
team situated at an exclusive facility
at Sinnar focuses on the formulation
of drugs to be launched in India and
across semi-regulated markets.
Revenues
Glenmark’s revenues were Rs
3806.60 million in 2003-04 compared
to Rs 3336.40 million in 2002-03, a
growth of 14.10 per cent. Its profit
after tax grew from Rs 331.90 million
in 2002-03 to Rs 420.04 million in
2003-04, a growth of 27 per cent.

Corporate Information
CHAIRMAN
Gracias Saldanha
MANAGING DIRECTOR & CEO
Glenn Saldanha
DIRECTORS
B E Saldanha
Cheryl Pinto
J F Riberio
Dr. Prasanna Gore
R V Desai
A S Mohanty
J M Trivedi
Sridhar Gorthi (Alternate Director to Dr. Prasanna Gore)
M Gopal Krishnan
Natvarlal B. Desai
Steven Bates
COMPANY SECRETARY
Marshall Mendonza
REGISTERED OFFICE
B/2 Mahalaxmi Chambers
22, Bhulabhai Desai Road
Mumbai 400 026
Tel: 496 4893-96
Fax 022-493 2648
Website: http://www.glenmarkpharma.com
E-mail: webmaster@glenmarkpharma.com
WORKS
• E-37, MIDC Industria Area, D-Road, Satpur,
Nasik 422 007, Maharashtra.
• 3109-C, GIDC Industrial Estate, Ankleshwar,
Dist. Bharuch, Gujarat 393 002.
• Plot No. 163-165/170-172, Chandramouli Industrial
Estate, Mohol, Mohal Bazarpeth, Sholapur,
Maharashtra - 413213.
• Plot No. A-80, MIDC Area, Kurkumbh, Daund,
Pune 413 802, Maharashtra.
• Plot No. 7, Colvale Industrial Estate, Bardez, Goa.
R&D CENTRE
• Plot No. C-152, MIDC Sinnar Industrial Area,
Malegaon, Nasik District 421 103
Maharashtra.
• Plot No. A-607, TTC Industrial Area, MIDC,
Mahape, Vashi, Navi Mumbai - 400 705
Maharashtra.
AUDITORS
Pricewater House
Chartered Accountants
Mumbai.
COST AUDITORS
Sevekari, Maniar & Associates
Cost Accounts
Mumbai
SOLICITOR
Kanga & Co., Mumbai,
Trilegal, Mumbai
REGISTRAR AND TRANSFER AGENTS
Karvy Computershare Pvt. Limited
“Karvy House”, 46 Avenue 4, Street No. 1,
Banjara Hills, Hyderabad 500 034
BANKERS
Bank of India
Mahalaxmi Branch, Mumbai 400 026

MANUFACTURING SITE:
INTERNATIONAL OPERATION (FORMULATIONS):
India
Brazil
REGIONAL OFFICES :
1. Brazil
2. Kanya
3. Malaysia
4. Nigeria
5. Philippines
6. Russia
7. South Africa
8. USA
9. UK
10. Viatnam
11. Afghanistan
12. Angola
13. Belarus
14. Benin
15. Botswana
16. Brunei
Darussalam
17. Burkina Faso
18. Cambodia
19. Chad
20. Congo Brazzaville
21. Eritrea
22. Ethiopia
23. Fiji
24. Ghana
25. Hong Kong
26. Indonesia
27. Iraq
28. Ivory Coast
29. Kazakhstan
30. Laos
31. Latvia
32. Madagascar
33. Malawi
34. Maldives
35. Mali
36. Mauritius
37. Mozambique
38. Myanmar
39. Namibia
40. Nepal
41. Oman
42. Papua New
Guinea
43. Peru
44. Portugal
45. R D Cango
46. Rwanda
47. Senegal
48. Singapore
49. Sri Lanka
50. Sudan
51. Tanzania
52. Thailand
53. Togo
54. Trinidad &
Tabago
55. UAE
56. Uganda
57. Ukraine
58. Venezuela
59. Yemen
60. Zambia
61. Zimbabwe
www.glenmarkpharma.com