Dear Shareholders,

The financial year 2011 witnessed a landmark and memorable event in the form of a successful IPO and consequent expansion of the investor family. The listing of the company on the BSE and NSE was a defining moment in the company’s history and I would like to thank all of you for the overwhelming response to our IPO. Your continued support would be critical in our mission to achieve market leadership and operational excellence in all our activities.

The financial year 2010-11 has been a phase of sustained growth for the company with its total revenue increasing by 20.80% at INR 6753 million and gross margins improving at 20.64% as against 16.51% in FY 10. The company registered a 54.60% growth in PAT to INR 529 million owing to improved realizations from the exports and new products launches during the year.

Parabolic continues to build on its strengths and prepares itself for the new challenges in the changing industry dynamics which are shaping the pharmaceutical industry.

Our journey towards the sustainable growth will be built on the belief and trust of our stakeholders and on the following actions:

- A shift in the marketing- towards the new therapeutic segments

- Exploring the burgeoning opportunities in Contract Manufacturing

- Thrust on Research and Development

- Integrating the value chain – Finished dosage formulations

A shift in marketing – towards new therapeutic segments

With the commissioning of 27 acre multi block non-antibiotic facility at Village Chhachrauli ,Derabassi , Punjab, we have expanded our current basket of antibiotic products to over 20 new non-antibiotic therapeutic segments such as anti-thrombotic , anti-hypertensive, analgesics and pain management amongst others. The facility has been built in line with stringent US FDA standards, which we believe, will facilitate a speedy approval from the regulatory body following our commissioning and pave the way for exports to regulated markets.
In the long term, we believe we are building a solid foundation with a large basket of products covering different therapies across the non-antibiotic and antibiotic space.

Exploring the burgeoning opportunities in Contract Manufacturing

The CRAMS vision of our company is driven by our ability to create a differentiating cost value proposition powered by lower manufacturing costs, skilled manpower and strong technical capabilities. The Contract Manufacturing business is a high margin business that would enrich bottom line numbers for PDL. In the FY 11, the company executed over 15 different contracts with leading multinational companies including the leading generic and innovator companies. This year, we have established an International office in USA to strengthen its CRAMS business and for closing partnerships with leading companies in US and Canada.

Thrust on Research and Development

R&D is a corner stone of our efforts toward excellence and we have invested substantial quantum of resources to build infrastructure, research capabilities and most importantly human capital. The company has invested INR 689.69 million in research and development equivalent to 10.21% of the turnover in FY 11. As on 31st March 2011, the R&D team comprised of over 100 scientists including  PhDs and post graduates. This wealth of talent within the R&D team places it in a position to handle more complex molecules in new therapies. , The current plans are to introduce more products with non-infringing process for APIs and creating technologies to ensure cost leadership and make our company more competitive. The R&D team has been able to develop over 20 molecules across 10 different lifestyle drug therapies. Our IPR strength includes over 16 patent applications filed for the non-infringing processes developed in-house and submission of 38 Drug Master Files across US, EU and Canada. The focus on R&D is not confined to APIs alone and  going forward we shall see  healthy results from our investment in world class Formulation R&D centre being set up at HSIIDC IT Park, Panchkula.

Integrating the value chain – Finished dosage formulations

We also have taken the first step towards the finished dosage formulations by entering the domestic formulations space in April 2011. The company has developed a strategy of penetrating the Indian and world market with a basket of niche products and is ready to take on competition with the right set of growth drivers; complete backward and forward integration, world class infrastructure for API and dosage, R&D support,  rich pipeline of products and Intellectual Property Rights protection in the form of Patents for its novel processes. We plan to bring a wide product range covering Tablets, Capsules, Injectable, Dry Syrups and some novel drug delivery modules across high value therapeutic segments like Antibiotics, Anti-diabetics, Anti-Asthmatics, Anti-hypertensive, Hormones, and solutions amongst others.

Investments in Formulations

- Investing to build one of the biggest multi-disciplinary Formulation R&D Centre in I.T. Park, Panchkula, Haryana, India having dedicated facilities for generic research, innovative research, and process development and validation. This R&D centre will offer value added formulation and development of NDA / ANDAs based on Novel Drug Delivery Systems (NDDS).

- Ongoing construction work on the USFDA approvable formulation plants at different locations with an investment over INR 1000 million.

Outlook for FY 12

- In the FY 12, our company shall observe a Capital Expansion and Capacity enhancement in its Cephalosporin facility at Derabassi with the commissioning of New Sterile Plant and Multi-Purpose Block III. With this , the company will have appropriate infrastructure support to elevate its access to new markets, expand the basket of latest generation cephalosporin and trigger inspections from the global regulators including USFDA and PMDA, Japan.

- We are looking forward to spread geographically and strengthen our presence in the emerging markets – Brazil, Mexico, China, Korea and Russia, which are likely to fuel the global growth.

- Grow our presence in Japan, the most stringent market in the world in terms of quality and regulatory clearances.

- Strengthen our filings across US, EU and Japan. Currently we have over 38 Drug Master Files already filed.

- We are likely to see strategic shift in the realization basket for our company with non-antibiotic molecules contributing greatly both in the topline and margins. The company shall also realize revenues from its Herbal products strategic alliance.

- With the launch of domestic formulations arm, PDL is likely to see growth coming from the sales coming from its domestic FDF sales.

Future Growth Plans

We look ahead to new challenges and goals with a firm determination to seek excellence in everything we do. Our strong and highly trained workforce is geared to look at solutions beyond the ordinary with a view to achieving perfection in every aspect of business, be it efficiency in production, improvement in processes, innovative marketing methods and approach to new markets in a way to become a preferred supplier and partner to leading manufacturers across the globe.

Some key focus areas to strengthen our position in the industry include:

- Focus on Regulated Markets of US, European Union, Canada, Japan, and Australia- filing of drug master files, certificate of suitability, and dossiers.

- Exploring opportunities in the emerging economies –  Brazil, India, Mexico, China, Korea and Russia by believing that these economies will be the new engines of global growth.

- Expand Product basket- Launch of new molecules in the non-antibiotic space and diversify the product basket for a risk free sustainable growth

- Diversification into new business verticals- Integration into Finished Dosage formulations, entering into manufacturing alliances for inorganic growth

- Investment in R&D- development of new products , improving efficiencies in the existing range, filing of patents and building IPR wealth

- High GMP Standards- maintaining high GMP standards for seeking regulatory approvals from USFDA, PMDA, TGA amongst others.

- Safety, Health & Environment- safety of our human resource, our manufacturing facilities and our environment, conservation of resources and to be a responsible social citizen for a greener tomorrow

- Development of Human Resource- foster the skills, talent and efficiency of the human minds.

Before I close, I believe that your Company is uniquely positioned in terms of quality of resources and the associated infrastructure to address opportunities and challenges in the global pharmaceutical industry.   We will continue to uphold the faith and trust you have reposed in us by adopting business practices that inherently promote the well being of all stakeholders and the environment.

I wish to thank all my employees, customers, business associates, alliance partners, and investors for your continuous and endless support.

Warm Regards

Pranav Gupta