India – a growing player Dr. Brian W Tempest Chief Mentor & Executive Vice Chairman of the Board Ranbaxy Laboratories Limited Frankfurt – 15 th March’06

Except for the historical information contained herein, statements in this presentation and the subsequent discussions, which include words or phrases such as “will”, “aim”, “will likely result”, “would”, “believe”, “may”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”, “future”, “objective”, “goal”, “likely”, “project”, “should”, “potential”, “will pursue” and similar expressions or variations of such expressions may constitute "forward-looking statements". These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to our ability to successfully implement our strategy, our growth and expansion plans, obtain regulatory approvals, our provisioning policies, technological changes, investment and business income, cash flow projections, our exposure to market risks as well as other risks. Ranbaxy does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date thereof. Disclaimer

Asia’s Share of the World GDP (at PPP in %) Year China 17% 9% 5% 5% 12% India 12% 8% 4% 3% 5% Japan 2% 3% 3% 8% 7% Rest of Asia 7% 5% 7% 9% 13% Total Asia 38% 25% 19% 25% 37% Source – WEF

Davos 2006 Source – FT

The Productivity Advantage India a usa pharma view USA 1 chemist FTE 1 chemist FTE 70 h/week 50 h/week $ 800 monthly $ 12,000 monthly Better education x 1,3 Longer working time x 1,3 Lower cost x 20 Sources: IPHMR Conferences, New Delhi August 2004

 Europe - retirees grow faster than workers - fertility rates lower  Japan - expansion of grey segment  USA - over 50’s 88m will grow to 118m (2020) - obesity  China - one child families - get older before becoming wealthy - labour costs will rise owing to labour shortage - rural to urban flow  India - will remain very young - source of the extra needed global workforce The Ageing Advantage

The R&D Investment Advantage Most attractive R&D Investment locations: 1. China 2. USA 3. India 4. Japan 5. UK Source – UNCTAD 2005

 Qualified Scientists & Engineers  Global India players with Alliances  English speaking  TRIPs compliant  IIT, IIM & other scientific institutions Source – UNCTAD 2005 The R&D Investment Advantage -reasons why

Genetic engineering research 165 Transgenic work 55 Therapeutics 25 Basic research 28 Universities > 250 Source – Dept. of Bio-technology The R&D Investment Advantage - research institutions in India

 4 th largest reservoir of Scientific Manpower  2 nd largest in terms of speaking English  3m graduates pa, 115k MSc Chemistry  345k IT, USA 75k  Knowledge super power  Lead by a Scientist as President  Diaspora network (25m across 120 countries)  The world’s largest free nation  US & Europe will not dominate Science, Maths, IT The Knowledge Advantage

The State of European Science Teaching Source – Royal Society of Chemistry, Policy Bulletin – Winter 2006 “This means that when pupils are in a science laboratory their experience is unsafe, unsatisfactory or uninspiring for 65% of the time. In addition, 13% of science classes are not taught in a laboratory at all” Laboratories in UK state schools: Excellent5% Good29% Basic/uninspiring41% Unsafe/unsatisfactory25%

 GDP World growth marginally less in 06 than 05 (+4.3%)  USA expansion at a slower growth than 05 (+3.6%)  Eurozone – expected to perform better than USA  Asia : PRC – slightly slower growth to prevent hard landing Japan – sustain current growth India – increasing growth rate Chindia – 40% population, 8% economy  Largest foreign affairs caucus in US Congress (180)  74,000 demonstrations reported in 2005 in China The Economic Growth Advantage

$b 2001/ / / / / But still only at 10% of PRC levels The FDI Advantage

$m Source – Citigroup Investment by top 15 Indian Domestic Pharmaceutical Companies

Investment by foreign Pharma companies

 Microsoft Global Development Centre (GDCI)  Microsoft Global Services (MGSI)  Microsoft Global Technical Support Centre (GTSC)  Microsoft Systems Research (MSRI)  Microsoft India Development Centre (MIDC) Investment by Microsoft in India

 Manufacturing growth ‘90’ Chinese manufaturing +12% (90-03) - India manufacturing +6.5%  Scope for improvement of Government Policies  Revitalisation of agriculture  Further privatisation  Further encouragement of R&D  Prosperous middle class 300m strong The Potential for Improvement Advantage

 34 News TV channels. Oldest 13 years old (NDTV)  5000 newspapers, circulation 17m. 12 with 1m copies each  200m daily readers. 21m new daily readers 2003/2005, +14%  50% rural / 50% urban  Indian are hungry for information  Source: World Business The Information Advantage

 High quality healthcare  Patients from developed & developing countries  Growing Privatisation  International standards  Low Costs: Thailand India - Open heart $14250 $ Hysterectomy $ 2012 $ Knee surgery $7000 $4500  Better access through airports likely The Medical Tourism Advantage

The Global Generic Pharma companies Source : Company /Financial reports & presentations Annual Sales (US$ Millions)

% % % % % % % Source – Citigroup *DMF – Drug Master Files Chindia share of all API* filings

$b USA W Europe 9 14 Japan 3 4 Rest of America 6 9 ROW Total Source: Frost & Sullivan The Global Generic Market

The Generic Pharma Landscape Fundamental drivers of growth High healthcare costs Total Healthcare Spending, % of GDP Source: World Bank, DB Global Pharma Report Aug 2005, OECD Health Data 2005 (1) – 2002, UBS European Pharma Report, Sep 2005

The Generic Pharma Landscape Fundamental drivers of growth Demographics Source: World Bank, DB Global Pharma Report Aug 2005, OECD Health Data 2005 (1) – 2002, UBS European Pharma Report, Sep 2005 Estimated % of regional population over 60

The Generic Pharma Landscape Fundamental drivers of growth Patent Expiries Source : Global Generic Drug Stocks Citigroup Smith Barney, September 2004, IMS Health : MIDAS, MAT June 2005 Patent expiry, $ Bn Revenues

The Generic Pharma Landscape Fundamental drivers of growth Source : Global Generic Drug Stocks Citigroup Smith Barney, September 2004, IMS Health : MIDAS, MAT June 2005 % Growth Constant $ Generics 11% 20% 30% -2% 13% 20% 13% 9% 19% 23% 36% 8% 4% 36% 10% 2% 31% 38% % Share (Volume)% Share (Value) 8% 5% 8% 2% 20% 16% 7% 2%

Ranbaxy Strategic Direction US $ 1 Bn US $ 5 Bn US $ 2 Bn Amongst the Top 5 generic Companies Significant income from proprietary products 2012 Growth through - Organic - Inorganic

Competitive Advantages Aggressive Home Market

Competitive Advantages Cost of Manufacture Active Pharmaceuticals Facility, MohaliDosage Forms Facility, Paonta Sahib Highest number of FDA approved plants outside the US

Competitive Advantages R&D I R&D III R&D II R&D IV Cost of Innovation

Potential Downsides

Potential downside – Asian Flu

Potential downside – Oil prices Source – BLS, ELA, The Conference Board

Potential downside - Infrastructure Source – FT

Potential downside – Counterfeit products Origin of fake products seized in EU in 2004 Rank 1. China 2. Thailand 3. Hong Kong 4. Turkey 5. USA Source: FT Countries where fake pharma products seized in 2005 Rank 1. Russia 2. China 3. South Korea 4. Peru 5. Columbia Source: PSI

Asia economic strength is returning Many advantages for India Some downsides The feeling in India a turning point has been reached and passed Summary

“We have all grown up learning the story of the unfinished voyage of Christopher Columbus setting sail to reach India, he discovered America. I now invite the people of America to complete the voyage of that great explorer” Manmohan Singh Prime Minister of India July 2005.”

Thank You