Related Party Transactions and Outside Related Director Information

Caraco Pharmaceutical Laboratories, Ltd. (CPD)

5/19/2005 Proxy Information

Mr. Valia is Mr. ShanghviÕs brother-in-law.

Mr. Desai has served as a full time director of Sun Pharmaceutical Industries Limited since 1999, responsible for domestic marketing of pharmaceutical formulations. Sun Pharma owns 63% of the company stock.

On November 21, 2002, we entered into a products agreement with Sun Global. Under the agreement, which was approved by our independent directors, Sun Global has agreed to provide us with 25 new generic drugs over a 5-year period. In exchange for each new generic drug transferred to us by Sun Global which passes a bioequivalency test, we issue Sun Global 544,000 shares of Series B preferred stock.

During 2004 and 2003, Sun Global earned 3,808,000 shares and 544,000 shares of Series B stock for seven product transfers and one product transfer, respectively, as provided under the November 2002 products agreement. During 2002, we issued to Sun Pharma 1,632,000 shares of our common stock for three product transfers under the former 1997 products agreement with Sun Pharma.

During 2003 and 2002, we borrowed approximately $0.6 million, $1.4 million, respectively, from Sun Pharma, and in 2003 we repaid the entire balance of all of our outstanding loans from Sun Pharma in the amount of approximately $10 million. Prior to April 1, 2001, the interest rate was 10%; thereafter it was 8%.

During 2004, 2003 and 2002, we purchased approximately $16.7 million, $10.3 million and $2.4, respectively, of our materials from Sun Pharma. We intend to continue to purchase raw materials from Sun Pharma in 2005.

During 2004, 2003 and 2002, Caraco purchased at Sun PharmaÕs cost, approximately $0.61 million, $0.51 million, and $0.31 million, respectively, of equipment from Sun Pharma. We intend to continue to purchase equipment from Sun Pharma in 2005.

We entered into two non-cancelable operating leases during 2000 with Sun Pharma to lease production machinery. The leases each require rental payments of $4,245 and expire during 2005.

Caraco entered into a manufacturing and supply agreement and a distribution and sale agreement in December 2004 with an affiliate of Sun Pharma. No fees were earned by Caraco under these agreements in 2004.

During 2004, 2003 and 2002, Caraco sold $5.4 million, $3.7 million and $2.6 million, respectively, to Anda, Inc. Prior to becoming our chief executive officer, Mr. Movens was an executive officer of Anda, Inc.