Glenmark

e a delay in the submission or approval of potential new products for marketing approval. The regulations
applicable to our existing and future products may change. In addition, the submission of an application to
a regulatory authority does not guarantee that a licence to market the product will be granted. Each
authority may impose its own requirements and/or delay or refuse to grant approval, even when a product
has already been approved in another country. In our principal markets, the approval process for a new
product is complex, lengthy and expensive. Whether or not a product is approved in India or other
jurisdictions, regulatory authorities in many of these markets to which we export products must approve
that product before we can begin to market it in those jurisdictions. The time taken to obtain approval
varies by country but generally takes from six months to several years from the date of application. This
registration process increases our cost of developing new products and increases the risk that we will not
succeed in selling them successfully or profitably.
Also, governmental authorities, including the USFDA, heavily regulate the manufacture of our products.
The USFDA approval of a new drug application prior to any commercial sale or shipment of a product
requires not only the approval of the product itself but also pre-approval and post-approval inspections of
product manufacturing and testing facilities. Our formulation and API plants have received approval to
manufacture and test products for the international regulated and semi-regulated markets where we operate.
If we fail to comply fully with such regulations whether presently or in future, then as a result of possible
government-enforced shut-down of production facilities which will limit our supply of raw materials and
result in product shortages, our ability to supply our products to key markets would be significantly
impaired, which could in turn lead to a decrease in overall profitability. A failure to comply fully with such
regulations could also lead to a delay in the approval of new products for the commercial sale or shipment
of those products into the respective markets which could, in turn, result in a loss of revenue, and may
serve as an inducement to bring law suits against us. Penalties for non-compliance with applicable
domestic and foreign governmental law and regulations could be severe, including revocation or
suspension of our business licence in a particular jurisdiction and imposition of penalties and criminal
sanctions which could have an adverse effect on us.
The success of our operations in regulated and semi-regulated markets is dependent on a number of
factors beyond our control.
We operate in a number of markets which in the pharmaceutical industry are considered to be heavily
regulated, including the United States and Europe, for the sale and distribution of generic formulations and
APIs. We have filed several Drug Master Files (“DMFs”) for our APIs and an abbreviated new drug
application (“ANDA”) for our formulations with the USFDA. We expect to file more ANDAs for our
formulations with the USFDA. We have made substantial investments for establishing new manufacturing
facilities and upgrading our existing manufacturing facilities so that they comply with the standards set by
the USFDA and other regulatory authorities. As and when innovator's patents exclusivity period for our
products expire, we expect to sell and distribute such products in the United States. This strategy is
dependent upon our obtaining approval of the USFDA for these and other products. Delays in filing DMFs
and ANDAs, or in further inspection and approval of our facilities and products by the USFDA or other
applicable regulatory authorities, could adversely affect this strategy and the timing thereof, which in turn
could adversely affect our results of operations and prospects.
Our strategy of growth in the regulated markets may not result in additional revenue or operating income as
anticipated. The costs involved in operating in these markets may be higher than expected and we may
face significant competition in these regions. Furthermore, regulated markets such as the United States,
Europe and Japan have experienced significant decreases in recent years in the prices of generic
formulations and APIs, as well as strong competition among local and international players. In light of
such factors, we agreed sales allowances to customers of Rs. 117 crores in the fiscal year 2009. Continuous
price erosion could adversely reduce our sales revenue and profit potential after we have entered the
regulated markets. As a result of these and other changes in our business environment, we cannot assure
you that our business model will continue to be successful.
We also operate in semi-regulated markets across Africa, Asia, Latin America, Central and Eastern Europe
and Russia/CIS. Our growth in these markets is dependent on our ability to create and market a branded
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