Biocon - Annual Report - 2007-2008

BIOCON LIMITED

ANNUAL REPORT 2007-2008

DIRECTOR'S REPORT

Dear Shareholders,

We are pleased to present the Thirtieth Annual Report on business and operations together with the audited financial statements and the auditor's report of your Company for the financial year ended March 31, 2008. The financial highlights for the year under review are given below:

Corporate Results: Rs in Millions

Particulars for the year ended March 31, 2008 2007

TotaI Revenues 9,292 8,631

Total Expenditure 6,511 6,267

Profit before Interest Depreciation and Tax 2,781 2,364

Interest 29 77

Depreciation 690 576

Profit before Tax 2,062 1,711

Income Tax 106 127

Profit after Tax 1,956 1,584

Exceptional items (net of tax) 2,394 -

Surplus b/f from previous year 4,376 3,301

Profit available for appropriation 8,725 4,885

Proposed dividend on equity shares 500 300

Tax on proposed divided 85 51

Transfer to General Reserve 435 158

Balance in Profit and Loss account 7,705 4376

Consolidated results (Under Indian GAAP) Particulars for the year ended March 31,

Total Revenues 10,902 9,896

Total Expenditure 7,552 7,023

Profit before Interest, Depreciation and Tax 3,350 2,873

Interest 102 98

Depreciation 939 665

Profit before Tax 2,309 2,110

Income Tax 129 169

Profit after Tax 2,180 1,941

Minority Interest 65 62

Profit after tax and Minority interest 2,245 2,003

Exceptional items (net of tax) 2,394 -

Profit after exceptional items 4,639 2,003

Results of Operations:

During the year under review the operations excluding exceptional items reflected 10 percent growth in consolidated revenues while Operating Profits (EBITDA) and Profit after Tax grew by 17 percent and 12 percent respectively. The performance for the year reflects strong focus on operational efficiencies and aggressively defending our market position in the face of strong competition in the generic API space, monetization of some of our research programs by way of licensing and partnering and the divestment of the Enzymes business.

A detailed performance analysis is given in the Management Discussion and Analysis.

Appropriations Dividend The Board of Directors recommend a dividend of 60%, which is Rs 3.00 per equity share and also recommend a Special Dividend of 40% (Rs 2/- per share) pursuant to the divestment of enzyme business, taking the total dividend payout to 100% (Rs 5 per share).

Transfer to Reserves

We propose to transfer Rs 435 millions to the General Reserves. An amount of Rs 7,705 million is proposed to be retained in the profit and loss account.

Consolidated financial statements:

As stipulated in the listing agreement with the stock exchanges, the consolidated financial statements have been prepared by the Company in accordance with the relevant accounting standards issued by the Institute of Chartered Accountants of India. The audited consolidated financial statements together with Auditors Report thereon form part of the Annual report. The consolidated net profits of the Group for the year ended 31 st March 2008 amounted to Rs 2,245 million as compared to Rs 2,003 million in the previous financial year. This represents basic earnings per share of Rs 23.25.

Business Operations overview and Outlook

Significant volume growth and increased market share in the European and US Markets for Statins helped to negate the impact of pricing pressures and the weakening US Dollar thereby maintaining Statin sales at previous year's levels.

Sales of Insulin increased significantly in both the domestic and export markets. During the year, the Company entered into licensing agreements covering certain markets in Asia and has also progressed its application for registration in the European Union and several countries across Asia, Latin America and Africa. To meet the overall increased projections for Insulin, the Company has commenced an expansion of its capacities and the new facility is near completion and is expected to be commissioned later this year.

Immunosuppressants are also expected to offer significant growth opportunities consequent to product patent expiry in key markets of Mycophenolate Mofetil and Tacrolimus in the period 2008-2012.

Biocon's foray into direct marketing of formulations continued to make impressive strides. During the year the Nephrology Division launched ERYPROTM and ERYPROSAFETM, for treatment in renal transplant and dialysis and two Immunosuppresants - RENODAPTTM and TACROGRAFTM. Biocon's Insugen has been widely prescribed and accepted with impressive gains in market share and BIOMAB EGFRTM has been prescribed to over a 1,000 patients since its launch in August 2006.

Biocon signed two important agreements with Abraxis Biosciences, USA to out- license G-CSF for the North American and European markets and in-license Abraxane. for India and a few markets across Asia and the GCC. These agreements are expected to generate a steady stream of revenues once the products get regulatory approval in the relevant territories.

Biocon also entered into an agreement to acquire a majority stake in AxiCorp GmbH, Germany. This strategic investment will enable Biocon to market and distribute biosimilar insulin and analogs in Europe which together with NeoBiocon, its joint venture in Dubai, thereby expanding Biocon's global reach. Biocon continues to invest incrementally to progress its innovation pipeline. While during the year Biocon monetized some of it's research programs by way of licensing and partnering , it's rich product pipeline including IN-105, BVX 10, BVX 20 and T1 H are expected to contribute significantly to Biocon's growth in the future years. During the year Biocon has completed Phase I studies of IN-105 in India and received approval for commencement of Phase II studies. Biocon has also initiated Phase I studies for IN 105 in Sweden and Phase II studies for T1 H in India.

Subsidiaries and Joint Ventures: Syngene International Limited: Syngene has strong knowledge base where out of the total strength 907 employees (754 in the previous year) more than 90% employees are scientists. With the focused and collaborative efforts of its employees, Syngene has achieved greater heights during the year and has built a strong international reputation.

Clinigene International Limited:

Clinigene International Limited is a wholly owned subsidiary of your Company focused on Clinical Development.

For the current financial year, Clinigene earned a profit of Rs 24 million as against Rs 8 million in the previous year. The company registered a revenue of 227 million as against Rs 11 5 million in the previous year.

During the year Clinigene has moved into a 65,000 sq. ft. fully functional facility at Semicon Park which houses a complete array of services including human pharmacology, clinical operations, clinical data management, bioanlytical services and a central laboratory supporting early phase to late phase clinical development programs. With demand for outsourced research growing exponentially, Clinigene is well positioned to strengthen its existing relationships and establishing new partnerships with top MNC pharma companies for clinical development requirements.

Biocon Biopharmaceuticals Private Limited: This is Biocon's 51 :49 JV with CIMAB SA, to manufacture monoclonal antibodies and other Recombinant Therapeutics. BBPL commenced operations during the current year and has primarily been engaged in the manufacture of BIOMAb-EGFRTM for the treatment of Head and Neck cancer.

As at March 31, 2008, BBPL had accumulated losses of Rs 325,611. Biocon's share in the accumulated losses of BBPL aggregates Rs 166.062. Approval of BIOMAb-EGFRTM for new indications and commencement of sales to global markets is expected to help improve profitability in fiscal 2010.

Report on subsidiary companies:

The Company has obtained exemption from the Government of India, Ministry of Company affairs from attaching the financial accounts of the subsidiary companies to this Report pursuant to Section 212 of the Companies Act, 1956. However, a statement showing the relevant details of the Subsidiaries is enclosed and is a part of the Annual Report.

Capital Structure During the financial year under review, the share capital of your Company remained unaltered.

Employees Stock Option Plan (ESOP): During the year Company granted employee stock options for purchase of 311,821 shares in Biocon Limited at a 20% discount to the prevailing market price, the details of the which are reported separately under the report.

Corporate Governance:

We strive to attain high standards of corporate governance while interacting with all its stakeholders. The Company has complied with the corporate governance code as stipulated under the listing agreement with the stock exchanges. A separate section on Corporate Governance along with a certificate from the auditors confirming the level of compliance is annexed and forms a part of the Directors' report.

Directors: Dr. Bala S Manian and Dr. Neville C Bain retire by rotation at the ensuing Annual General Meeting, and being eligible, offer themselves for re-appointment.

Auditors:

The Statutory Auditors M/s. S. R. Batliboi & Associates, Chartered Accountants, Bangalore, retire at the ensuing Annual General Meeting, and have confirmed their eligibility and willingness to accept office, if re-appointed.

Management Discussion and Analysis Report The report as required under the Listing agreements with the Stock Exchanges is annexed and forms part of the Directors' Report.

Cumulative disclosure under the stock option scheme as on 31 March 31, 2008: Disclosure of the particulars of stock options schemes as on the above date, as per SEBI guidelines:

Particulars First Grant (Post Second Grant (Post Equity Share Split Equity Share Split and Bonus) and Bonus)

a. Options Granted (Net of Options cancelled) 3337580 132055

b. Exercise price Rs 0.2 Rs 5 each

c. Options vested 3,337,580 132,055

d. Options exercised 3,337,580 121,765

e. Total number 3,337,580 110,985of Equity Shares to be transferred from the ESOP Trust as a result of exercise of options

f. Options lapsed Nil 10,290

g. Variation in the terms of options None None

h. Money realized by exercise of options Rs 678,016 554,925

i. Option pending exercise Nil 10,780

j. Total number of options in force Nil Nil

k. Person-wise details of options granted to:

i. Directors and key managerial employees Please see Table (I) Nil below for details regarding options granted to Directors and key managerial employees

ii. any other employee who Nil Nilreceived a grant in any one year amounting to 5% or more of the options granted duringthat year

iii. Identified employees who Nil Nilhave been granted options during any one year equal to orexceeding 1% of the issued capital (excluding outstanding warrants and conversions) ofthe Company at the time of grant

I. Diluted Earning Not applicable Not applicable sincePer Share (EPS) since shares will shares will be transferredpursuant to issue of be transferred by by the ESOP Trust uponshares on exercise the ESOP Trust upon exercise of the optionsof options exercise of the and the Company will not be options and the required to issue any new Company will not be shares required to issue any new shares

m. Vesting schedule 25% each in April of 25% each in January 2003, 2004, 2005 of 2005, 2006, 2007 and 2006. and 2008.

n. Lock-in No lock-in, subject No lock-in, subject to to a minimum vesting a minimum vesting period of 1 year. period of 1 year.



Particulars Third Grant (Post Fourth Grant (Post Equity Share Split Equity Share Split and Bonus) and Bonus)a. Options Granted (Net of Options cancelled) 387,250 3,758,361

b. Exercise price Rs 315 each 2,985,700 at Rs 275/-and 460,840 at Rs 300/- (20% discount to Prevai- ling market Price)

c. Options vested 311,250 352,925

d. Options exercised 235,625 151,900

e. Total number 235,625 Nilof Equity Shares to be transferred from the ESOP Trust as a result of exercise of options

f. Options lapsed 93,500 679,162

g. Variation in the terms of options None None

h. Money realized by exercise of options 74,221,875 41,772,500

i. Option pending exercise Nil 201,025

j. Total number of options in force 58,750 2,927,299

k. Person-wise details of options granted to:

i. Directors and key managerial employees Nil Please see Table(I) below for details regarding options granted to Directors and key managerial employees

ii. any other employee who Nil Nilreceived a grant in any one year amounting to 5% or more of the options granted duringthat year

iii. Identified employees who Nil Nilhave been granted options during any one year equal to orexceeding 1% of the issued capital (excluding outstanding warrants and conversions) ofthe Company at the time of grant

I. Diluted Earning Not applicable Not applicable sincePer Share (EPS) since shares will shares will be transferredpursuant to issue of be transferred by by the ESOP Trust uponshares on exercise the ESOP Trust upon exercise of the optionsof options exercise of the and the Company will not be options and the required to issue any new Company will not be shares required to issue any new shares

m. Vesting schedule 25% each in April of Year 1 -25% 2005, 2006, 2007 Year 2 -35% and 2008. Year 3 -40% (Year 1 being 3 years from Date of joining or 1 year from July 19, 2006 whichever is later)

n. Lock-in No lock-in, subject No lock-in, subject to to a minimum vesting a minimum vesting period of 1 year. period of 1 year.



Table (1) details regarding options granted till date to Directors and key managerial employees are provided below:

SI. Name of Director or A B No. key managerial personnel

Directors

1. Dr. Neville Bain 195,902 Nil

2. Prof. Charles Cooney 195,902 NilKey managerial employees

3. Dr. Arun Chandavarkar 195,902 Nil

4. Mr. Murali Krishnan K. N. 195,902 Nil

5. Dr. Goutam Das 195,902 Nil

6. Mr. Rakesh Bamzai 122,430 Nil

7. Mr. Chinappa M. B. 122,439 37,500

A = First Grant (Post Equity Share Split and Bonus) (No. of Options Granted)

B = Fourth Grant (Post Equity Share Split and Bonus) (No. of Options Granted)

Scientific Advisory Board:

The Scientific Advisory Board under the chairmanship of Prof. Charles Cooney met twice during the year under review. The Board has played an important role in evaluating and steering the Company's R&D programs in a pragmatic manner.

Fixed Deposits:

We have not accepted any fixed deposits during the financial year under review.

Directors' responsibility statement:

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Board of Directors hereby confirm as under:

i) In preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii) We have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

iii) We have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) We have prepared the annual accounts on a going concern basis.

Particulars of Research and Development, Conservation of energy, technology absorption etc.:

Particulars required under Section 217 (I) (e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in the annexure to the Report.

Particulars of employees:

The information required to be furnished under section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended, is annexed and is a part of this report.

Acknowledgements:

Your Directors greatly appreciate the commitment and dedication of all the employees at all levels that has contributed to the growth and success of the Company. We would also thank all our clients, vendors, investors, bankers and other business associates for their continued support and encouragement during the year.

Your Directors thank the Government of India, Government of Karnataka, Ministry of Commerce and Industry, Ministry of Finance, Ministry of Information technology and Biotechnology and Customs and Excise Department, Income Tax Department, CSEZ and all other Government agencies for their support during the year and look forward to their continued support in the future.

For and on behalf of the Board

Kiran Mazumdar-Shaw John Shaw Chairman and Managing Vice Chairman Director April 22, 2008Conservation of Energy

During the year, the Company has taken significant measures to reduce the energy consumption by using energy-efficient machines and equipment.

FORM A

For the year ended March 31,

2008 2007

A. Power and Fuel Consumption

1. Electricity

a. Electricity Purchase Unit (000) 55,288 48,728

Total Amount (Rs in Lakhs) 2,464 2,222 Rate per Unit 4.46 4.56

b. Own Generation from Diesel Generator Unit (000) 38,009 26,239 Total Amount (Rs in Lakhs) 3,194 2,363 Rate per Unit 8.4 9.00

2. Furnace Oil Unit (K. Ltrs.) 8,536 8,002 Total Cost (Rs in Lakhs) 1,696 1,622 Average/K. Ltrs. 19,869 20,275

B. Consumption per unit of Production

The disclosure of consumption figures per unit of production is not meaningful as the operations of the Company is not power intensive and involves multiple products.

FORM B

1. Specific areas in which R&D work has been carried out by the Company

- Process and Clinical Development of Novel Biotherapeutics in Oncology, Diabetes, Rheumatology and Cardiovascular segments.

- Process and Clinical Development of Biosimilars in Oncology, Metabolic disorders, Diabetes, Rheumatology and Cardiovascularsegments.

- Development of Synthetic and Fermentation based Generic Small Molecules for Anti-infective, Cardio-vascular, Nephrology and Transplantation segments.

- Generation of Intellectual Property Development- Process Patents for manufacture of key Generic Small Molecules and Biotherapeutics and unraveling the mechanism of action of novel biotherapeutics.

- Development of globally competitive manufacturing processes.

- Clinical Development of new drug combinations.

B. Benefits derived as a result of R&D activities.

- Scale-up of key Biosimilars with improved productivity and process efficiencies.

- Strategic collaborations for development of new Biotherapeutics.

- Global presence in supply of fermentation based Small Molecules to the Generic Industry in regulated markets.

- Rich Pipeline of Generic Small Molecules catering to varied therapeutic areas.

- Internationally competitive prices and product quality.

- Generation of high quality data compliant with International Regulatory requirements.

- Established intellectual property with 861 Patents/ PCT applications filed in Indian and International markets.

- Safe and environment friendly processes.

C. Future Plan of Action

- Greater importance in the research areas of New Drug Discovery.

- Clinical Development of existing pipeline of Biotherapeutics for Regulated markets.

- Strategic Collaborations for increased speed and cost competitiveness in Drug Discovery.

- Continued emphasis on Monoclonal Antibodies and Biotherapeutics leveraging on Biocon's in-house process development and analytical skills.

- Continue to strengthen R&D capabilities in the area of New Biotherapeutics.

- Progress our R&D programs in respect of Monoclonal antibodies against CD6, EGFR, CD20 & TNF- and Oral insulin.

2. Expenditure on scientific Research & Development:

Rs in Millions 31.03.2008 31.03.2007

(a) Capital 175 98(b) Recurring 471 381(c) Total 646 479(d) Total R& D expenditure as percentage of sales 6.9% 5.5%

3. Technology Absorption, Adoption and Innovation:

No imported technology during the year

4. Foreign Exchange earnings and outgo:

Foreign exchange earned and used for the year ended 31st March, 2008,

Rs in Millions

31.03.2008 31.03.2007

Gross Earnings 5,226 4,800

Outflow* 3,277 2,829

Net foreign exchange earnings 1,949 1,971

*For details please refer to information given in the notes to accounts to the annual accounts of the Company in Schedule 22 Notes to accounts Item No. iv to vi.

MANAGEMENT DISCUSSION AND ANALYSIS(All amounts in Indian Rupees thousands, except share data, share price and amounts expressed in foreign currency)

1. INDUSTRY STRUCTURE AND DEVELOPMENT

The global pharmaceutical sales grew 6 percent at constant exchange rates in 2007, to reach a record USD 712 billion. North America, Europe and Japan continued to account for about 80 percent of the total global pharmaceutical market, with North America experiencing slower growth at 4 percent. Emerging markets in Asia and Latin America continued to outpace global performance with double-digit growth. In terms of regional performance, North America, which accounts for 43 percent of global pharmaceutical sales, grew 4 percent, to USD 305 billion, while Europe buoyed by the appreciating Euro experienced higher growth of 7 percent, to USD 206 billion. Sales in Latin America grew 12 percent to USD 32 billion, while Asia Pacific (outside of Japan) and Africa grew 13 percent to USD 62 billion with China, Korea and India growing by 26 percent, 11 percent, and 13 percent respectively. Sales in Japan reversed the decline experienced in the previous year on account of the biennial price cuts which occurred April , 2006 and grew 4 percent to USD 59 billion.

Oncologics grew 16 percent to USD 41 billion and displaced Lipid Regulators as the top selling therapy class for 2007. Patent expiry of Zocor. and declining sales of Lipitor. partially contributed to Lipid Regulators sales declining by 7percent to USD 34 billion. Respiratory Agents with sales of USD 29 billion grew 12 percent and retained its position as the third largest class of therapeutic drugs. Antidiabetics at the 5th position also experienced double digit growth with sales of USD 24 billion.

The biopharmaceutical market represented 10 percent of the global pharmaceutical market, having grown 17 percent in 2007 and the double-digit growth of the market is expected to continue to the end of the decade.

Generic Pharmaceutical Industry

The generic drugs market refers to regulated markets for drugs whose patents have expired or been invalidated. The expiration or invalidation of product patents typically leads to the entry of generic, or non-branded, formulations in the regulated markets, resulting in increased competition and leading to a decline in price and margin of drugs.

Drugs with approximately $20 billion in annual sales will face patent expiry in 2008, similar to levels seen over the past two years. This is expected to drive growth of generics by 14-15 percent next year, to more than $70 billion. In 2008, more than two-thirds of all prescriptions written in the U.S. are expected to be for generics. New government contracting initiatives in Germany, and educational programs in Japan, Spain and Italy, will drive greater generics use in those markets. Also, generics competition within the biotech sector will rise as the biosimilar epoeitin alfa is marketed across Europe. This trend reflects a changing balance between new and old products and a growing 'genericization' of many primary care categories. Low cost producers such as India and China are expected to play a key role in the development of the generics industry.

2. OUTLOOK

The global pharmaceutical market is expected to grow at a 5-6 percent in 2008, compared with 6 percent in 2007. In the U.S. and the five largest European markets, sales growth in 2008 is expected to range from 4-5 percent and 1-2 percent in Japan. Key factors limiting growth in these markets include: a leveling off of growth from the introduction of the Medicare Part D prescription drug benefit in the U.S., patent expiration of branded product, and an associated increase in the use of lower-cost generics; increased pressure from payers to control costs and limit access to certain treatments; and heightened safety scrutiny and healthcare legislation that is slowing, and in some cases halting, the introduction of new medicines. The seven 'pharmerging' markets of China, Brazil, Mexico, South Korea, India, Turkey and Russia are expected to grow 12-13 percent next year, to $85-90 billion. In these markets, there is significantly greater access both to generic and innovative new medicines as primary care improves and becomes more available in rural areas, and as private health insurance becomes more commonly held. Ongoing economic growth in the developing world will continue to shift the focus away from infectious diseases and toward cardiovascular, diabetes and other chronic illnesses.

3. OPPORTUNITIES

The surge in generics together with the expected patent expiry of key immunosuppressant drugs provides Biocon with attractive opportunities in the near to medium term. In addition the opening up of bio-similar in US and Europe is seen as a large opportunity in the medium term. Success in Biocon's Research and Development initiatives into new drug discovery could also yield significant benefits.

4. RISKS & CONCERN The Generic Industry is subject to patent litigation and regulatory issues. Patent challenges or delay in receipt of regulatory approvals could delay our product launch in key markets. In addition significant additional competition in key products could erode our market shares and result in reduced prices and profitability. The consolidation of the generic industry could result in larger generic players acquiring manufacturing capabilities thereby reducing the market for third party manufacturers. The failure to obtain regulatory approval for new drugs under development could affect long term business opportunities. Other key risks related to our business include loss of key personnel, increase in input costs and strengthening/depreciation of the Indian Rupee against the US Dollar.

The Company carries out a detailed Risk Management exercise or purposes of identification of risks and putting in place processes and controls to mitigate these risks. The audit committee reviews the Company's risk management framework and approves risk management action plans.

5. INTERNAL CONTROLS

Biocon has well established internal control systems for operations of the Company and its subsidiaries. The Finance Department is well staffed with experienced and qualified personnel who play an important role in implementing and monitoring the internal control environment and compliance with statutory requirements.

The Internal Audit is conducted by an independent firm of Chartered Accountants.

The Audit committee addresses significant issues raised by the Internal & Statutory Auditors.

6. HUMAN RESOURCES:

Biocon recognizes that nurturing and recruiting the best talent is vital to the long-term success of the enterprise. Employees are provided with continuous opportunities for active learning and development which are viewed as key drivers of their personal growth and the success of Biocon. The remuneration structure links rewards directly with performance. This performance management system reinforces our work ethics. Employees also participate in the Employee Stock Option Plan and about 10 percent of the Company is owned by Employees and a Trust formed for the benefit of Employees.

The total employee strength of the Company and its subsidiaries at end of the financial year post transfer 2007-08 was 2,772 as against 2,543 at the end of the previous financial year.

7. CAUTIONARY STATEMENT:

The statements made in this report and those appearing elsewhere, may be 'forward looking statements' that set forth anticipated results based on management plans and assumptions. These statements are likely to address the Company's growth strategy, financial results, product development, product approvals, product potential and development programs. Achievement of future results is subject to risks, uncertainties and inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from past results and those anticipated, estimated or projected. Among the factors that could cause actual results to differ materially are:

a) Success of our research and development initiatives;

b) The impact of existing and future regulatory provisions on product exclusivity;

c) Competitive developments affecting our product portfolio;

d) Interest rate and foreign currency exchange rate fluctuations;

e) Statutory legislations and regulations affecting domestic and foreign operations, including tax obligations; and other allied factors

8. Discussion on financial performance with respect to operational performance Overview The financial statements have been prepared in compliance with the requirements of the Companies Act, 1956 and Generally Accepted

Accounting Principles (GAAP) in India.BALANCE SHEET - MARCH 31 (All amounts in Indian Rupees thousands)

2008 2007 ChangeSOURCES OF FUNDSShareholder's FundsShare Capital 500,000 500,000 -

Reserves and Surplus 12,781,963 8,916,405 43% 13,281,963 9,416,405 41%Loan Funds

Secured loans 892,634 587,331 52%

Unsecured loans 546,219 480,402 14%

1,438,853 1,067,733 35%

Deferred Tax Liability 398,237 397,569 - 15,119,053 10,881,707 39%APPLICATION OF FUNDS

Fixed Assets

Cost 8,525,081 8,099,852 5%

Less: Accumulated depreciation 2,006,485 1,449,958 38%

Net book value 6,518,596 6,649,894 (-2%)

Capital work-in-progress 646,341 299,048 116% 7,164,937 6,948,942 3%

Intangible Assets 276,000 512,000 (-46%)

Investments 4,772,602 470,238 915%

Current Assets, Loans and Advances Inventories 1,677,350 1,506,589 11%

Sundry debtors 2,256,629 2,748,526 (-18%)

Cash and bank balances 81,244 76,313 6%

Loans and advances 1,235,457 783,541 58% 5,250,680 5,114,969 3%

Less: Current Liabilities and Provisions 2,345,166 2,164,442 8%

Net Current Assets 2,905,514 2,950,527 -2% 15,119,053 10,881,707 39%

Share Capital (Issued, Subscribed & Paid up)Year ended March 2008 2007 Nos. Amount Nos. AmountBalance at the beginning of the year 100,000,000 500,000 100,000,000 500,000

Share issued during the year - - - -

Balance at the end of the year 100,000,000 500,000 100,000,000 500,000

The Company has only one class of shares viz. equity shares of par value of Rs 5 each. The authorized share capital of the Company was raised from Rs 20,000 in 2002-03 to Rs 600,000 in 2003-04 represented by 120,000,000 equity shares of Rs 5 each.

The Company carried out a sub-division of equity shares of face value of Rs 10 each into 2 equity shares of Rs 5 each. Consequently, the issued, subscribed and paid -up capital of Rs 18,377 has been divided into 3,675,300 shares of Rs 5 each.

The Company in 2003-04 issued 86,324,700 equity shares of Rs 5 each as bonus shares in the ratio of 23.4877958 shares for every one share held to the shareholders existing as on November 11, 2003, which was the approved record date for this purpose, by capitalisation of the balance in the profit and loss account of Rs 431,624.

In March 2004, the Company made an IPO of 10,000,000 fresh equity shares of Rs 5 each at a price of Rs 31 5 per share.

Reserves and surplus

The total reserves and surplus has increased from Rs 8,916,405 in March 31, 2007 to Rs 12,781,963 in March 31, 2008. The increase has been on account of profits made during the year Rs 1,955,591 from operations and net exceptional income of Rs 2,393,654 constituted predominantly by the divestment of enzymes division to M/s Novozymes South Asia and adjusted for the proposed dividend of Rs 584,975 inclusive of Dividend distribution tax.

Loan funds

There has been an increase in the loans outstanding from Rs 1,067,733 in March 2007 to Rs 1,438,853 in March 2008. The unsecured loans increased by Rs 65,817 on account of accumulation of interest free deferred sales tax liability in respect of sales made during the year. The sales tax liability(including turnover tax) outstanding to the extent of Rs 542,685 is repayable in five years of ten equal half yearly installments commencing from August 2012.

The secured loan has increased from Rs 587,331 to Rs 892,634 in fiscal 2008 due to increase in borrowed funds for operational purposes.

Fixed Assets 2008 2007 %

Cost 8,525,081 8,099,852 5%

Less : Accumulated depreciation 2,006,485 1,449,958 38%

Net Block 6,518,596 6,649,894 (-2%)

Net Asset turnover ratio 1.35 1.24

Add: capital work in progress 646,341 299,048 116%

Net fixed assets 7,164,937 6,948,942 3%

During the year 2008, the Company has capitalized fixed assets to the extent of Rs 595,401. The company has started depreciating these assets over their estimated useful lives during the year thereby resulting in an increase in accumulated depreciation.

The capital work in progress as at March 31, 2008 represents advances paid towards acquisition of fixed assets and the cost of assets not put to use. These comprise assets relating to expansion of insulin manufacturing capacities and construction of additional infrastructure facilities at Biocon Park.

The company has a outstanding capital commitments of Rs 261,210 as at March 31, 2008 as compared to Rs 400,600 as of March 31, 2007 on account of the aforesaid ongoing projects.

Investments

The Company as at March 31, 2008 held investments of Rs 4,772,602 as compared to Rs 470,238 as of March 31, 2007. The substantial increase in investments amounting to Rs 4,302,364 is contributed by investment of Rs 4,280,365 in money market instruments (mutual funds) in respect of funds realized from the divestment of enzymes business during the year. The Company during the year made a fresh investment in IATRICa Inc of USD 1,000,000 amounting to Rs 39,650 IATRICA is engaged in and to the Company has entered into a collaborative project for antibodies.

The Company also during the year formed a joint venture in the UAE with M/s Neo Pharma LLC. NeoBiocon FZ LLC, is a 50:50 joint venture focused in the development of west asian markets for the Company's products. The Company has subscribed to 150 shares amounting to Rs 16,371. The Joint Venture was incorporated in the last quarter of the fiscal and is slated to commence commercial operations in the first half of the ensuing fiscal. The company continues to hold investments in 2 wholly owned subsidiaries and other joint venture company iz., Syngene Clinigene, Biocon Biopharmaceuticals of Rs 84,328 , Rs 500 , 89,760 respectively.

Intangible Assets

In April 2006, the Company had emerged at the successful bidder for the assets of Nobex, Inc which primarily included, without limitation, patents relating to certain technologies for Oral Insulin, Oral BNP, Basal Insulin, Apaza and others (collectively referred to as IPs) for a total consideration of Rs 521,138 including costs directly attributable to the said acquisition.

The Company had since decided to amortise the investment in IP-Apaza from October 2006 after its decision to license the same and retain the other IPs for further commercialization / monetization. Further, in December 2007, as a matter of prudence, the Company recorded a total impairment of Rs 220,000 in respect of one of its intellectual property- Oral BNP in view of adverse reports and decline in sales trend of Natrear / Neseritide, a competitive drug. In addition, an amount of Rs 16,000 has been amortised during the year in respect of IPs that were identified as being ready for commercialisation during the earlier period.

Current assets, loans and advances

The current assets, loans and advances have increased from Rs 5,114,969 to Rs 5,250,680 , an increase of 3% over the previous year. This was mainly due to

- Increase in inventories from Rs 1,506,589 to Rs 1,677,350 largely on account of increase in purchase of raw materials and semifinished goods which rose by Rs 87,376 and Rs 84,216 respectively as compared to the previous year.

- Sundry debtors stood at 2,256,629 (net of provision for doubtful debts of Rs 40,454) as at March 31, 2008 as compared to Rs 2,748,526 (net of provision for doubtful debts of Rs 29,555) as at March 31, 2007. These debtors are considered good and realisable. Provision for doubtful receivables as on March 31, 2008 has been made for debtors overdue for more than 360 days subject to review of collectibility of specific dues. Debtors represent an outstanding of 99 days and 116 days of revenue as at March 31, 2008 and March 31, 2007 respectively on a moving average of 3 month's sales.

Provision for doubtful debts represents 0.13% and 0.12% of gross sales for the year ended March 31, 2008 and March 31, 2007 respectively.

Loans and advances has increased from Rs 783,541 to Rs 1,235,457 as on March 31, 2008. This increase of 57.7% is mainly on account of increase in inter corporate deposits to subsidiary / Joint venture company , which has increased from Rs 316,447 to Rs 581,540 , increase in balances with customs, excise and sales tax authorities, which has increased from Rs 173,149 to Rs.281,568 compared to the previous year and increase in advance income tax (net of provisions) amounting to Rs 87,405 as against the previous year.

Current liabilities and provisions

The current liabilities and provisions has increased by 8.3 % from Rs 2,164,442 as at March 31, 2007 to Rs 2,345,166 as at March 31, 2008. This increase is primarily due to proposed dividend of Rs 500,000 (100%) for the year ended March 31, 2008 as against 300,000 (60%) in the previous year .There is a decrease in Sundry creditor balances for capital expenditure as well as other creditors from Rs 370,630 to Rs 301,351 and from Rs.1,105,800 to Rs 1,030,374 respectively as at March 31, 2007.

Revenues

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2008 2008 2007 Change% INCOME

Gross sales 8,587,496 8,599,119 -0.1% Less: Excise duty 266,657 361,717 -26.3% Net sales 8,320,839 8,237,402 1.0% Licensing and Development fees 448,413 272,352 64.6% Other income 522,752 121,105 331.7% 9,292,004 8,630,859 7.7% EXPENDITURE Material costs 3,914,284 4,158,125 -5.9% Employee costs 696,263 603,735 15.3% Operating and other expenses 1,900,804 1,504,830 26.3% Interest and finance charges 28,698 77,618 -63.0% 6,540,049 6,344,308 3.1% PROFIT BEFORE DEPRECIATION, EXCEPTIONAL ITEMS AND TAXES 2,751,955 2,286,551 20.4%

Depreciation and Amortisation (net of transfers) 689,980 576,060 19.8% PROFIT BEFORE TAXES AND EXCEPTIONAL ITEMS 2,061,975 1,710,491 20.5% Provision for Income Tax Current Tax 93,036 - Deferred taxes 668 117,831 -99.4% Fringe benefit tax 12,680 9,158 38.5% PROFIT AFTER TAXES AND EXCEPTIONAL ITEMS 1,955,591 1,583,502 23.5% EXCEPTIONAL ITEMS NET OF TAX 2,393,654 - 100.0% NET PROFIT FOR THE YEAR 4,349,245 1,583,502 174.7% Balance brought forward from the previous year 4,375,617 3,301,451 32.5% PROFIT AVAILABLE FOR APPROPRIATION 8,724,862 4,884,953 78.6% Proposed dividend on equity shares 500,000 300,000 66.7% Tax on proposed dividend 84,975 50,985 66.7% Transfer to general reserve 434,925 158,351 174.7% BALANCE, END OF THE YEAR 7,704,962 4,375,617 76.1%

Biocon's total income has four components:

* Sales of Biopharmaceuticals products;* Sales of Enzymes products;* Technical Licensing fees; and* Other income.

The following table sets out the contribution of each of these components of Biocon's income expressed as a percentage of Biocon's total income for the years ended March 31, 2008 and March 31, 2007:

Sales 2008 2007

Sale of Products

Biopharmaceuticals 84.6% 82.8% Enzymes 4.9% 12.6%

Technical Licensing Fees 4.8% 3.2%

Other Income 5.6% 1.4%

Total Income 100.0% 100.0%

Share of revenues from net sales between domestic and export markets are as follows:

Share of revenues 2008 % 2007 %

Domestic 3,544,564 42.6% 3,748,241 45.5%Exports 4,776,275 57.4% 4,489,161 54.5%

Total 8,320,839 8,237,402 100.0%

Biocon's net sales grew by 1 percent to Rs 8,320,839 in 2007-08 while the total income grew by 7.7 percent to Rs 9,292,004. The Company's export revenues from product sales have increased by 6 percent, and domestic sales have decreased by 5.4 percent. The increase in export sales is mainly driven by increase in sale of bio-pharmaceutical products and domestic sales decreased primarily due to the fact that the enzymes business was divested from October 1, 2007.

Revenues from sale of biopharmaceuticals registered a growth of 7.9 percent in March 31, 2008 over March 31, 2007, and the enzymes segment registered a decrease of 51.9 percent over the same period. Enzymes business was divested from October 1, 2007.

Segment and product-wise performance

The segmentation of Biocon's sales is as follows:

2008 % 2007 %

Biopharmaceuticals 7,863,823 94.5% 7,287,258 88.5%Enzymes 457,016 5.5% 950,144 11.5%

Total 8,320,839 100.0% 8,237,402 100.0%

Bio-pharmaceuticals In pharma, we focus on the manufacture and marketing of APIs that require fermentation and synthetic chemistry skills. Our biopharmaceuticals business contributes towards 94.5 percent & 88.5 percent of our sales in 2007-08 and 2006-07 respectively.

Statins: Statins are cholesterol-lowering agents used to treat and prevent coronary diseases and are amongst the largest selling drugs worldwide. The Company's statins portfolio presently comprises lovastatin, simvastatin, pravastatin, atorvastatin besides other statins under development. Biocon is currently exporting simvastatin to the US, Europe, Japan and Canada, lovastatin to the US and pravastatin to the US and European markets. The Company has over the years been facing severe pricing pressure in this segment due to increased competition and changing industry price dynamics.

The US patent for Simvastatin and Pravastatin expired during fiscal 2007 and the Company has commenced exports to USA in the 2nd half of fiscal 2007. The Company has also during the year received US FDA qualification for its new facilities at Biocon Park thereby substantially increasing the production capacity to address the Statin global demand.

Immunosuppressants: Immunosuppressants prevent organ and tissue rejection in transplants and require high technology based manufacturing capabilities. Currently Biocon produces mycophenolate mofetil (MMF), sirolimus and tacrolimus. MMF and tacrolimus are sold largely in the domestic market and certain export markets. Biocon will actively promote it's product in the US, Japanese and European markets. Biocon has filed a DMF for MMF, tacrolimus and sirolimus to address the US markets following patent expiry.

Other biopharmaceutical products:

Biocon also supplies a range of other Biopharmaceutical products. Biocon markets recombinant human insulin in India under its own brand name INSUGEN and has also registered the Insulin in several export markets. In addition Biocon has supply arrangements with Pharma Majors and device companies to supply recombinant human insulin for use in their novel insulin formulations. Some of these delivery systems are undergoing clinical trials.

Sale of Formulations: Biocon has a dedicated marketing team for finished formulations. This segment, though in the nascent stage, has been growing rapidly. With a focus on the anti-diabetic and cardio-vascular market, Biocon's own insulin brand 'Insugen' is also marketed by the formulation team. The formulation segment currently has a team which comprises of field staff spread across the country, with sales registering impressive growth in FY 2008 as compared to FY 2007. During the fiscal year 2008, Biocon Limited launched its new Nephrology Division and a comprehensive portfolio of renal therapy products. Biocon's Nephrology division is committed to finding solutions to kidney disorders using the highest standards of biotherapeutics and will simultaneously strive towards reducing the risks of the disease in the future, through progressive research and innovative therapies. Biocon also launched BIOMAb-EGFRTM, a therapeutic monoclonal antibodybased drug for treating solid tumors of epithelial origin, such as head and neck cancers. BIOMAb-EGFRTM is produced at Biocon's state-of-the-art manufacturing facility at Biocon Park.

Enzymes Biocon develops and markets a mix of specialty and industrial enzymes for a broad range of industries including food, beverages, brewing and distilling, textiles and paper. The enzymes business has been sold to M/s. Novozymes South Asia Private Limited during the year. Hence, Enzymes sales is only recorded for the first 6 months during the fiscal 2008.

Technical Licensing Fees These fees represent income received by Biocon towards transfer of proprietary technology in respect of certain bio-generics under long term contracts. They also include fees received by Biocon towards out-licensing it's proprietary products. During the year, there has been an increase of Rs 176,061 in respect of such fees from Rs 272,352 in fiscal 2007 to Rs 448,413 in fiscal 2008. Biocon is committed towards tapping more revenues from this source by scaling up a large number of bio-generics including Insulin, GCSF, ERYPRO, Streptokinase, Retiplase, etc. and advancing our discovery programs including oral insulin and Monoclonal Antibodies against CD6, EGFR, CD 20 & CD 10.

Other Income The Other income has registered a increase of 331.7 percent compared to the previous year. Other income consists primarily of dividend income from investment amounting to Rs 138,746 as compared to Rs 2,922 in the fiscal 2007. It also includes milestone receipts of Rs 174,997 and charges billed to group companies for services rendered for support services which has increased from Rs 70,792 in fiscal 2007 to Rs 169,202 in fiscal 2008.

Material costs Material costs includes Biocon's consumption of raw materials and traded goods and increases or decreases in stock. Materials costs has decreased by 5.9 percent from Rs 4,158,125 to Rs 3,914,284 over the previous year. But as a percentage of sales, the material cost has decreased by 3.5 percent mainly on account of increased manufacturing activity and reduction in sourcing of advanced intermediates.

Employee costs

Staff cost comprises:

* Salaries, wages, allowances and bonuses;

* Contributions to provident fund;

* Contributions to superannuation, gratuity and leave encashment;

* Amortisation of Employees stock compensation expenses, and

* Welfare expenses (including employee insurance schemes and other miscellaneous employee benefits) Staff costs has increased from Rs 603,735 for the fiscal year 2007 to Rs 696,263 for the fiscal year 2008. The increase in employee costs is mainly due to increments during the year and addition to employees.

Operating and other expenses Operating and other expenses comprises of rent; travelling and conveyance; communication; professional charges; power and fuel; patent fees; consumables; repairs and maintenance; general expenses; freight outwards; sales promotion; commissions; bad debts write off; provisions for bad and doubtful debts; printing and stationary; insurance; rates, taxes and fees; and losses on sales of assets. Operating and other expenses have increased by 26.3 percent from Rs 1,504,830 for the year 2007 to Rs 1,900,804 for the year 2008 mainly on account of the following:

- 23 percent increase in power and fuel costs from Rs 620,71 5 in fiscal 2007 to Rs 761,171 in fiscal 2008 and 26 percent increase in repairs and maintenance costs from Rs 166,500 in the previous year to Rs 209,925 in fiscal 2008 on account of increase in production activity at Biocon Park .

- 20 percent increase in research and development expenses from Rs 1 59,738 to 191,169 on account of increase in our ongoing research initiatives including the oral insulin project

- 38.8 percent increase in Selling expenses from Rs 226,41 5 in FY 2007 to Rs 314,246 in FY 2008 due to increased sales of Healthcare products and launch of oncology and nephrology marketing division.

Interest and Finance Charges Interest and finance charges have decreased from Rs 77,618 in fiscal 2007 to Rs 28,698 in fiscal 2008 due to decrease in average borrowings to finance the working capital.

Depreciation

During the year depreciation has increased by Rs 113,920 amounting to an increase of 19.8 percent over fiscal 2007 on account capitalization of Biocon park assets resulting in high depreciation charge for full year on additions made in the previous year on June 7, 2006. This cost as a percentage of sales has also increased from 7.0 percent in fiscal 2007 to 7.4 percent in fiscal 2008.

Provision for Taxes

Provision for current, fringe benefits and deferred taxes in the year ended March 31, 2008 was Rs 106,384 as against Rs 126,989 in fiscal 2007. The reduction in taxes is mainly due to higher depreciation associated with Biocon Park and exemption on export sales from 100 percent EOUs. Tax provision on exceptional income is Rs 683,892.

Net Profit, As Restated

Net profit from operations, for fiscal year 2008 has increased by 23.5 percent amounting to Rs 1,955,591 resulting in an earning per share of Rs 20.25. Increase in sales volume has offset impact of pricing pressure and increased fixed costs. The exceptional income net of taxes from divestment of Enzymes business is Rs 2,393,654 .

Liquidity Our primary liquidity needs have been to finance our working capital requirements and our capital expenditures. These costs have been funded principally by cash flows from operations and short-term borrowings. The Company has during the year deployed the amounts realised from sale of Enzymes business in money market instruments.

2008 2007Net cash generated from operating activities 2,647,224 1,168,145

Net cash used for investing activities (2,708,798) (867,749)

Net cash generated from/(Used) in financing activities 66,129 (244,427)

Net increase/(decrease) in cash and cash equivalents 4,555 55,969

As at March 31, 2008, cash and cash equivalents amounted to Rs 79,834. The principal source of cash and cash equivalents in fiscal 2008 was from cash flows from operations and cash realised from divestment of Enzymes business amounting to Rs 2,647,224 which was partly invested in fixed assets to the extent of Rs 960,856 and the balance was deployed in non-trade instruments.

Operating activities Net Cash flows from operating activities for fiscal 2008 increased by 126.6 percent over fiscal 2007 due to higher operating income and decrease in working capital.

Investing activities The Company's cash flows from investing activities were used primarily to fund purchase of fixed assets and trade investments.

Financing activities The net cash flows from financing activities increased due to increase in short-term borrowings.

PERFORMANCE OF SUBSIDIARIES

Syngene International Limited

Syngene is a 99.99 percent owned subsidiary of Biocon Limited. Syngene was incorporated on November 18, 1993 with an authorised share capital of Rs 5,000. Syngene works in two main research areas: Synthetic chemistry and molecular biology. Syngene is also involved in custom chemical synthesis.

Syngene's total income primarily consists of net sales from contract research services and sales of compounds. Substantially all Syngene's contracts are based on time and material management. Revenue from these contracts are recognised as and when services are rendered, in accordance with the terms of the contract. Syngene's total revenue has increased Rs 1,316,928 to Rs 1,604,283 representing a growth of 22 percent. This growth in revenue is on account of increase in the number of clients. In addition, Syngene's income from investment of its surplus funds in mutual fund units has decreased from Rs 34,1 50 in the fiscal 2007 to Rs 23,419 in the fiscal 2008.

Syngene's expenses mainly comprises of raw-material costs and staff costs. Raw material cost consists of lab consumables used for research. The increase in revenue was mainly offset by increase in material cost by 39 percent from Rs 349,060 in fiscal 2007 to Rs 483,71 5 in fiscal 2008 and staff cost by 40 percent from Rs 261,855 to Rs 366,835 as compared to the previous year. Increase in material cost and staff cost are due to increased business and increase in head count. Other costs increased by 95 percent from Rs 121,387 to Rs 236,438 in fiscal 2008.

Net profit for fiscal 2008 has decreased by Rs 164,879 to Rs 331,772 from Rs 496,651 primarily due to increased depreciation charge of Rs 86,445, over the previous fiscal and impact of the strengthening of the Indian rupee.

Abbreviated profit and loss statement - Syngene

2008 2007

Total Income 1,604,283 1,316,928

Profit before tax (PBT) 354,652 512,182

PBT Margin 22.1% 38.9%

Profit after tax (PAT) 331,772 496,651

Net Margin 10.7% 37.7%

Syngene contributes 14.7 percent to the consolidated income and 14.8 percent to the consolidated profits of the group. In the previous year, Syngene contributed 13.3 percent and 24.8 percent to the consolidated income and profits of the group respectively.

Clinigene International Limited

Clinigene is a 100 percent owned subsidiary of Biocon Limited. Clinigene was incorporated on August 4, 2000 with an authorised share capital of Rs 5,000. Clinigene was established to undertake clinical and other trials and validation for drugs and pharmaceuticals and to conduct research in the area of medical sciences for development of new and improved drugs.

Clinigene's total income principally consists of income from clinical research fees and also Bio-analytical and Bio-equivalence studies.

Clinigene enters either into time and material contracts and/or fixed price arrangements. Revenue from time and material contracts are recognised on a monthly basis as services are rendered in accordance with the terms of the applicable contracts. Revenue from fixed price contracts is recognised based on the percentage completion method. Total revenue of Clinigene increased from Rs 115,502 in fiscal 2007 to Rs 227,163 in fiscal 2008, primarily on account of increase in clinical research fees.

Clinigene's expenses comprise of research material costs, consultancy fees, staff cost, other operating expense, interest cost, depreciation and provisions for fringe benefit tax. Consultancy fees has increased by 20 percent from Rs 9,230 to Rs 11,075 as compared to 2007,

Clinigene's staff cost has increased by 46.2 percent from Rs 32,252 to Rs 47,147 as compared to previous year. This is because Clinigene is in the process of developing its clinical research capabilities and is hiring employees. As Clinigene require additional funds to develop its capabilities and become profitable, Biocon Limited is supporting it in its funding. The interest expenses has increased from Rs 9,010 to Rs 9,807 on account of borrowings for setting up of its new clinical research facility at Semicon Park. As at March 31, 2008, it had accumulated losses of Rs 31,207.

Profit for the year ended March 31, 2008 of Rs 23,739 as against Rs 7,812 in the previous year ,has been consolidated with the profits of the group in the consolidated financial statements.

Biocon Biopharamaceuticals Private Limited

BBPL is a joint venture company and currently 51 percent of its shares are held by Biocon and the balance 49 percent by CIMAB, Cuba.

BBPL was incorporated on June 17, 2002 with an authorised share capital of Rs 500 and in the year 2004 increased to Rs.10,000. In 2007 the authorized share capital was increased from Rs 132,000 to Rs 440,000. BBPL has been established to produce and sell certain biologicals. BBPL has commenced commercial operations during fiscal 2008. Biocon holds 8,976,000 equity shares and CIMAB holds 8,624,000 equity shares of Rs.10 each respectively.

As at March 31, 2008, BBPL has accumulated losses of Rs 325,611. Biocon's share in the accumulated losses of BBPL aggregates Rs 166.062.

Consolidated financial statements

Biocon has prepared consolidated financials in accordance with Indian GAAP and US GAAP by consolidating its subsidiaries - Syngene and Clinigene and Joint Ventures BBPL and NeoBiocon - FZ LLC. The abbreviated consolidated Indian GAAP and US GAAP profit and loss account is as under

Abbreviated consolidated profit and loss statement -Indian GAAP

2008 2007

Total Income 10,902,049 9,896,179

Profit before tax (PBT) 2,309,094 2,109,968

PBT margin 21.2% 21.3%

PAT after minority interest 2,245,440 2,002,616

Net margin 20.6% 20.2%