Ranbaxy Laboratories

The Directors have pleasure in presenting this 47th Annual Report and
 Audited Accounts for the year ended 31st December, 2007.
 
 WORKING RESULTS
 
                                             Rs. in Million
                                        Year ended          Year ended
                                        December 31,       December 31,
                                              2007                2006
 
 Net Sales                                 40,712.87         39,720.51
 Profit before Interest, Depreciation, 
 Amortization and Impairment                9,865.63          6,081.70
 Interest                                     934.26            584.44
 Depreciation, Amortization and Impairment  1,187.31          1,067.50
 Profit before Tax                          7,744.06          4,429.76
 Provision for Tax                          1,566.86            624.33
 Profit After Tax                           6,177.20          3,805.43
 Tax - earlier years                            -               145.84
 Balance as per last balance sheet            471.18            560.34
 Transfer from Foreign projects reserve        24.87             22.95
 Balance available for appropriation        6,673.25          4,534.56
 Appropriations:
 Dividend
 Interim                                      932.12          3,168.94
 Final                                      2,239.42              -
 Tax on Dividend                              539.02            444.44
 Transfer to :
 General Reserve                              800.00            450.00
 Surplus carried forward                    2,162.69            471.18
                                            6,673.25          4,534.56
 
 CONSOLIDATED WORKING RESULTS 
 (UNDER INDIAN GAAP)
 
 Net Sales                                 66,926.74         60,652.24
 
 Profit before Interest, Depreciation, 
 Amortization and Impairment               13,580.64          9,389.54
 
 Interest                                   1,411.88          1,036.32
 
 Depreciation, Amortization and 
 Impairment                                 2,183.41          1,842.88
 
 Profit before Tax                          9,985.35          6,510.34
 Provision for Tax                          2,118.86          1,356.74
 Profit After Tax                           7,866.49          5,153.60
 
 Add: Share in profit & loss of associates 
 (Net)                                          2.10              -
 
 Less: Minority Interests                     123.74             50.21
 
 Profit After Tax and Minority Interests    7,744.85          5,103.39
 Tax - earlier years                            1.01            148.06
 
 Balance as per last balance sheet          2,464.96          1,253.94
 Transfer from Foreign projects reserve        24.87             22.95
 
 Balance available for appropriation       10,235.69          6,528.34
 Appropriations:
 Dividend
 
 Interim                                      932.13          3,168.94
 Final                                      2,239.42              -
 Tax on Dividend                              539.02            444.44
 Transfer to :
 General Reserve                              800.00            450.00
 
 Surplus carried forward                    5,725.12          2,464.96
                                           10,235.69          6,528.34
 
 CONSOLIDATED FINANCIAL STATEMENTS
 
 Consolidated Financial Statements for the year ended December 31, 2007,
 under Indian GAAP and US GAAP form part of the Annual Report.
 
 OPERATIONS
 
 The Company had a successful year registering an improved performance
 on the key parameters. Consolidated net sales at Rs. 66,927 millions
 grew by 10.3% in 2007, while Profit After Tax registered a robust
 growth of 53% over the previous year.  The performance during the year
 was driven by growth in sales of dosage forms across developed and
 emerging markets, increased operating efficiencies, a continuing focus
 on cost optimization and better management of working capital.
 
 Dosage form sales constituted 94% of global sales in 2007 (91% in 2006)
 reflecting the Companys focus on moving up the value curve. Overseas
 markets contributed 78% of total sales.
 
 DIVIDEND
 
 Interim Dividend of Rs.2.50 per share was paid in November, 2007. Your
 Directors now recommend a final dividend of Rs.  6.00 per share for the
 year ended December 31, 2007, taking the total dividend to Rs. 8.50 per
 share of par value of Rs. 5 each (2006 - total dividend Rs.8.50 per
 share).
 
 CHANGES IN CAPITAL STRUCTURE
 
 Issue of shares on exercise of Employees Stock Options
 
 The Company allotted Equity Shares (on pari-passu basis) pursuant to
 exercise of Stock Options by eligible employees, as summarized below:
 
 Date of Allotment       No. of Shares
 
 April 13, 2007               81,658
 July 12, 2007                95,384
 October 10, 2007            114,966
 January 10, 2008             82,830
 
 SUBSIDIARIES AND JOINT VENTURES
 
 A statement pursuant to section 212 of the Companies Act, 1956,
 relating to subsidiary companies is attached to the accounts. In terms
 of approval granted by the Central Government under section 212(8) of
 the Companies Act, 1956, the audited accounts of the subsidiary
 companies are not attached to this Annual Report. However, the
 consolidated financial statements prepared in accordance with
 Accounting Standard 21 of the Institute of Chartered Accountants of
 India presented in this Annual Report includes the financial
 information of subsidiary companies.
 
 MERGER & ACQUISITIONS
 
 1.  Demerger of New Drug Discovery Research Unit
 
 The Board of Directors of the Company at its meeting held on February
 19, 2008, approved a Scheme of Arrangement for Demerger (Scheme) of New
 Drug Discovery Research (NDDR) Unit of the Company into Ranbaxy Life
 Sciences Research Limited (RLS), a subsidiary of the Company, subject
 to requisite approvals. The Appointed Date for the purpose of demerger
 has been fixed as 1st January 2008. Under the Scheme, shareholders of
 the Company will be entitled to receive one equity share of Re. 1.00
 each of RLS without any payment for every four equity shares of Rs.
 5.00 each held in the Company as on the Record Date to be fixed for
 this purpose. This is a significant step in creating an independent
 pathway for NDDR with dedicated resources and an enhanced focus for
 long-term growth. In terms of the Listing Agreements with the stock
 exchanges, The National Stock Exchange of India Ltd. and Bombay Stock
 Exchange Limited have conveyed their “No Objection” to the Scheme.
 
 2 .  Zenotech Laboratories Limited
 
 The Company increased its equity stake in Zenotech Laboratories Ltd.,
 Hyderabad, from 6.94% to 46.95%. This would provide a strong platform
 in high growth areas like Biologics and Speciality injectables
 including Oncology products, across emerging and developed markets to
 the Company.
 
 3 .  Jupiter BioSciences Limited
 
 The Company acquired a strategic stake of 14.9% in Jupiter Biosciences
 Limited, Hyderabad, through equity warrants.  The total investment for
 this would be Rs. 470 million. This would provide the Company access to
 the fast growing and niche therapeutic segment of Peptides.
 
 4 .  Be-Tabs Pharmaceuticals (Proprietary) Limited (South Africa)
 
 The Company concluded the acquisition of Be-Tabs in South Africa
 through Ranbaxy Netherlands B.V (RNBV), a wholly owned subsidiary of
 the Company. This has resulted in making Ranbaxy the fifth largest
 generic pharmaceutical company in South Africa.
 
 5.  Dermatalogy Brands of Bristol Myers Squibb(USA)
 
 The Company, through RNBV acquired 13 dermatalogy products from Bristol
 Myers Squibb (BMS) in the USA for consideration of US $ 26 Mn. This has
 further strengthened and extended the franchise of the Company in the
 dermatology arena.
 
 MANAGEMENT DISCUSSION AND ANALYSIS REPORT
 
 Management Discussion and Analysis Report, as required under the
 Listing Agreements with the Stock Exchanges, is enclosed at Annexure
 A.
 
 EMPLOYEES STOCK OPTION SCHEME
 
 Information regarding the Employees Stock Option Scheme is enclosed at
 Annexure B.
 
 LISTING AT STOCK EXCHANGE
 
 The Equity Shares of the Company continue to be listed on Bombay Stock
 Exchange Ltd. and The National Stock Exchange of India Ltd. Global
 Depository Shares are listed on the Stock Exchange at Luxembourg and
 Foreign Currency Convertible Bonds are listed on the Singapore Exchange
 Securities Trading Limited. The annual listing fees for the year
 2007-2008 have been paid to these Exchanges.
 
 DISCLOSURE OF PARTICULARS
 
 As required by the Companies (Disclosure of Particulars in the Report
 of Board of Directors) Rules 1988, the relevant information and data is
 given at Annexure C.
 
 FIXED DEPOSITS
 
 The Company has not invited / received any fixed deposits during the
 year.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 In terms of provisions of Section 217(2AA) of the Companies Act, 1956,
 (Act) your Directors confirm that:
 
 (i) In the preparation of the annual accounts, the applicable
 accounting standards have been followed along with proper explanation
 relating to material departures, wherever applicable.
 
 (ii) The Directors have selected such accounting policies and applied
 them consistently and made judgments and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company as at the end of the accounting year and of the profit
 of the Company for the year.
 
 (iii) The Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of this Act for safeguarding the assets of the Company and
 for preventing and detecting fraud and other irregularities.
 
 (iv) The Directors have prepared the annual accounts on a going concern
 basis.
 
 DIRECTORS
 
 Mr. Harpal Singh was elected as Non-Executive Chairman of the Board of
 Directors effective April 27, 2007 consequent to resignation of Mr.
 Tejendra Khanna from the position of Chairman and Director on his
 appointment as Lieutenant Governor of Delhi.
 
 Dr. Brian W. Tempest retired as Chief Mentor and Executive Vice
 Chairman of the Board of Directors of the Company effective close of
 business hours on December 31, 2007 on completion of his term. He was
 subsequently appointed as an Additional Director (Non-executive) of the
 Company effective January 17, 2008 and holds office upto the date of
 this Annual General Meeting.
 
 Mr. Shivinder Mohan Singh was appointed as a Director of the Company
 effective January 18, 2006 in the casual vacancy caused by resignation
 of Mr. J.W. Balani and holds office upto the date of this Annual
 General Meeting.
 
 Mr. Sunil Godhwani was appointed as a Director of the Company on April
 27, 2007 in the casual vacancy caused by resignation of Mr. Tejendra
 Khanna and held office of Director upto the conclusion of the Annual
 General Meeting (AGM) held on May 31, 2007. Subsequent to the AGM, the
 Board appointed him as an Additional Director of the Company effective
 May 31, 2007.
 
 The Company has received Notices along with requisite fee from members
 under Section 257 of the Companies Act, 1956 proposing the candidatures
 of Dr. Brian W. Tempest, Mr. Shivinder Mohan Singh and Mr. Sunil
 Godhwani as Directors of the Company.
 
 In accordance with the Articles of Association of the Company, Mr.
 Surendra Daulet-Singh, Mr. Nimesh N. Kampani, Mr. Harpal Singh and Mr.
 V. K. Kaul, retire by rotation as Directors at the ensuing Annual
 General Meeting and are eligible for re-appointment.
 
 CORPORATE GOVERNANCE
 
 Report on Corporate Governance along with the Certificate of the
 Auditors, M/s Walker, Chandiok & Co. confirming compliance of
 conditions of Corporate Governance as stipulated under Clause 49 of the
 Listing Agreements with the stock exchanges form part of the Annual
 Report.
 
 COST AUDIT
 
 The reports of M/s R J. Goel & Co., Cost Accountants, in respect of
 audit of the cost accounts relating to formulations and bulk drugs for
 the year ended December 31, 2007, will be submitted to the Central
 Government in due course.
 
 AUDITORS
 
 M/s Walker, Chandiok & Co., Chartered Accountants, retire as Auditors
 of the Company at the conclusion of the ensuing Annual General Meeting
 and have confirmed their eligibility and willingness to accept the
 office of the Auditors, if re- appointed.
 
 STATEMENT OF EMPLOYEES
 
 Statement of particulars of employees as required under Section 217(2A)
 of the Companies Act, 1956 (“the Act”) and Rules framed there under
 forms part of this Report. However, in terms of the provisions of
 Section 219(1)(b)(iv) of the Act, this Report and Accounts are being
 sent to all the shareholders excluding the Statement of particulars of
 employees under Section 217(2A) of the Act. Any shareholder interested
 in obtaining a copy of the statement may write to the Company Secretary
 at the Registered Office of the Company.
 
 ACKNOWLEDGEMENTS
 
 Your Company continues to occupy a place of respect amongst the many
 publics it is associated with, most of all our valuable customers. The
 Directors commend the continued commitment and dedication of employees
 at all levels. The Directors also wish to acknowledge with thanks all
 other stakeholders for their valuable sustained support and
 encouragement. It is this unity of purpose that breeds success and your
 Directors look forward to receiving similar support and encouragement
 from the larger Ranbaxy family in the years ahead.
 
                            On behalf of the Board of Directors
 
 Gurgaon                              HARPAL SINGH
 March 29, 2008                         CHAIRMAN