Succeeding in Japan Dr. Brian W Tempest Chief Mentor & Executive Vice Chairman of the Board Ranbaxy Laboratories Limited, Delhi, India India Japan Initiative Mumbai – 2 nd February 2007

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

Where is the World’s Wealth? Cannada 2% Rest of World 10% Japan 27% Germany 4% Italy 4% France 5% UK 6% USA 37% Netherlands 2% Spain 1% Switzerland 1% Taiwan 1% Source: The World Distribution of Household Wealth

Where are the Worlds’ Pharmaceuticals sold? Top 15 countries = 85.9% of worldwide pharmaceutical market estimate % 3.3% 3.4% 4.9% 5.4% 12.0% 44.6% 1.5% 2.0%

Japan’s GDP

A race to prosperity

Indo - Japan Political & Economic Background Japan Recovering from a decade old recession Japan is fully exposed to China, but now there is a political inpasse JETRO, Abe, Koizumi – all giving positive guidance on India Ageing is a major issue in Japan - by % > 65 years from 19% in 2005 Huge interest with many Japanese delegations visiting India

Japanese Government Policy changes on Pharmaceuticals Past-Poor quality, poor support 2002-National hospitals start using generics 2003-Co-payments begin at 30% 2004-Public hospitals become companies 2006-GPs can opt for generic substitution Postal worker challenge helped minimize the influence of the doctor lobby

Japanese Government Intervention on Pharmaceuticals Global Size Companies 4 companies of global size Fugisawa + Yamanouchi = Astellas (April’06) Sankyo + Daiichi Takeda Eisai Mid Size Companies Move to niches and/or generics Shionogi Tanabe Mitsubishi

Both Japan & India are hungry for Information 1.China123 m 2.Japan 86 m 3.India 51 m 4.S.Korea 34 m Source: Business Today, Sept. 24, China421 m 2.USA190 m 3.Japan157 m 4.Russia148 m 5.India116 m Source: Times of India, Sept. 14, 2006 Internet Usage – Asia Mobile Phones

Japanese – India differences Before timevsAfter time Open neck shirtvsWhite shirts/ties SashimevsVegetarianism GolfvsCricket Takes time for each side to understand what is a very complex picture, eg. visiting cards, hellos Japanese are heavily influenced by USA, Technology Innovation, Productivity & Education

- One in every four ANDAs filed by Indian Companies in top USA FDA filers Source: KPMG - No Chinese generic company has yet filed a USA FDA ANDA The Pharma Advantage - ANDAs ANDA Filings in USA by Indian Companies

The Pharma Advantage – API’s USA DMF filings by India Source: Crisil / US FDA / J P Morgan % Share of USA DMF filings India China % 9% % 10% Q1’06 44% 15% Q2’06 41% 16% Q3’06 45% 17% (latest) Source: US FDA / J P Morgan, 6 th August 2006 Source: US FDA, Credit Suisse

Number of Higher Education Institutions 05/06 18, % 00/01 11,412 90/01 5,932 80/01 4,861 Source: Indian University Grants Commission Science Education in India Number of Students enrolled in Higher Education Institutions 05/06 10, % 00/01 7,500 90/01 4,000 80/01 3,000 Source: Indian University Grants Commission Number of Institutions courses 05/06 99/00 Pharmacy % Medicine % Physiotherapy % Source: Pavan Agarwal (2006) based on data from professional councils PhD Degree awarded in Science 03/ % 00/ / (USA 03/04 25,000) Source: Indian University Grants Committee

The Education Advantage Engineers/Science graduates p.a – India 0.7m, China 0.5m, EU 0.5m, USA 0.4m, Japan 0.3m

The R&D Investment Advantage Most attractive R&D Investment locations: Ranked 3 rd - China, USA, India, Japan & UK Source – UNCTAD 2005 Reasons why India:  Qualified Scientists & Engineers  Global India players with Alliances  English speaking  TRIPs compliant – first patent March 2006  IIT, IIM & other scientific institutions Source – UNCTAD 2005

The Productivity Advantage Indiaa usa Pharma view USA 1 chemist Better education x chemist 70 hours/week Longer working time x hours/week $ 800 monthly Lower cost x 20 $ 12,000 monthly Sources: IPHMR Conferences, New Delhi August 2004

Global Market Trends – Discovery R&D Vendor Availability India China Analog preparation4125 Combinatorial chemistry377 Analytical chemistry377 Structural chemistry265 Assay development262 Computer drug design2613 High throughput Screening112 Bio informatics137 Genetically modified animals03 Basic molecular biology1325 Source – BCG, ‘Looking Eastwards, September 2006’ * Out of 90 vendors in October 2005

Global Market Trends for Generic Companies Source: UBS, Businessworld, 30 th October 2006

The Japanese generic market $2.0b in 2006 with a 5% level of generic substitution Forecast to increase by 11% p.a to 2010 Novartis has a 5% share – leading foreign generic player Regular price reductions (related to trade discounts)

Source: JP Morgan Asia Pacific, Equity Research 16 November 2005 Nippon Chemipher Generics Business Yen billion

Experience Worked on our relationship for several years since % in joint venture Filed products to meet expectations of MHLW Manufactured products to Japanese Consumer expectations Now launched several products with our partner Leading market share of products launched Constant Interaction with Japanese investors & media Reputation Licence in opportunities for India/China from Japan Manufacturing contracts for Japan NCEs intermediates Our story in Japan

M&A deals in Europe by Indian Companies Company Number Ranbaxy6 Wockhardt3 Stada2 Matrix2 DRL1 Aurobindo1 Torrent1 Sun Pharma1 Jubiliant1 Zydu Cadilla1 _______________________________________________ Total19 _______________________________________________ Source: Nomura, December 2006

Conclusion Huge business potential opportunity Good fit & Synergy between India & Japan Long term planning needed Personal attention of the CEO required on the relationship Accept the complexity and may not understand everything Focus on technology innovation, USA, education, productivity

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