MATRIX ANNOUNCES ITS ANNUAL RESULTS FOR YEAR ENDED
31st MARCH, 2008

Hyderabad, India; 30 June, 2008 -- Matrix Laboratories Ltd. (Mumbai Stock Exchange, 524794; National Stock Exchange, MATRIXLABS) announced that the Board of Directors of the Company, at their meeting held today, the 30th day of June, 2008, approved the audited financials of the Company for the year ended 31st March, 2008.

Results : Matrix India Limited

Matrix Laboratories has posted a Net Sales of Rs.9386.33 Mio on a stand alone basis reflecting an increase of 25.3% over the previous financial year. Out of the total revenues, APIs (active pharmaceutical ingredients) accounted for 77% and FDFs (finished dosage forms) accounted for the balance. The profit before tax and exceptional items rose to Rs 1413.02 mio (by 31.4 %) reflecting the underlying strength in the business.

The sales of API increased marginally over the previous financial year due to lower export realization caused by the appreciation of Rupee against US Dollar by about 12%, by increased price pressures, and the increased use of API for captive consumption. The revenue from finished formulations grew four fold primarily on account of launch of Anti Retrovirals (ARV’s) during FY08, as well as increase in milestone payments against contracts for development of finished dosage forms.

The company continued to make good progress in development - of both APIs and FDFs. During FY08, the company has made 41 FDF filings in regulated markets (28 ANDAs, 2 with the European regulatory agencies and 11 with WHO). On the API side, the company made filings of 22 US Drug Master Files (DMFs) and 18 EU DMFs/CEPs, making it one of the top three globally in terms of DMF filings. This impressive performance was achieved with a limited increase in R & D costs.

Consolidated results : Matrix Group of companies

The Matrix Group posted consolidated net sales of Rs. 17,281 Mio for the financial year ended 31st March 2008 which represents year-over-year growth of 5% (previous year: Rs 16,480 Mio). The consolidated profit before tax and exceptional items for the year ended 31st March 2008 was Rs.790 Mio (previous year Rs. 1,021 Mio)

While other JVs and Subsidiaries have performed in line with the expectations, the business of the Belgium subsidiary, Docpharma, has been adversely affected due to change in the underlying business conditions in its operating environment. The Board, after a detailed review of the situation decided to write down Goodwill in the consolidated books for an aggregate amount of Rs.4871.21 million and a provision for diminution in value of investments in stand alone financials of Matrix Laboratories Limited, India of Rs.4011.83 Mio.

While EBITDRA increased by 15.4% YoY, EBITDA increased by 4% over FY07 due to increase in the R&D spend. During the year under review, the R&D spend was at Rs.1,423 million, showing an increase of 41% over the previous year.

In relation to the exceptional item provided for, the company would like to elaborate as follows : Docpharma NV has presence in Belgium, Netherlands, and Luxemburg markets and had plans for entry in the French and Italian markets. Besides pharmaceuticals, Docpharma was also into the business of parallel imports and hospital supplies and devices. Docpharma has witnessed a decline in the performance due to the following reasons:

• introduction of tender system in the Belgium and Netherlands,
• parallel import business becoming less attractive and therefore not a high growth driver,
• increased hurdles in obtaining regulatory approvals in Belgium resulting in delayed launches and
• decline in performance of hospital business caused by the termination of contract consequent to the acquisition of Inamed by Allegran.

The Board of Matrix, at its meeting held at 28th February, 2008 approved to pursue strategic alternatives including potential divestment of Docpharma. The Board at its meeting held today, the 30th day of June, 2008 decided to continue efforts to realize the vertical integration benefits possible through Matrix’s API and FDF capabilities. "After further review, at this time, Matrix’s Board of Directors has determined unanimously to retain ownership of Docpharma” said Robert J.Coury, Matrix Board Non-Executive Chairman. “Our current decision is based on the ongoing changing market dynamics and the value we see in maintaining ownership of Docpharma".

The other JV’s and subsidiaries – Astrix, Concord, FCC and Mchem - continued to achieve their goals and contribute in line with expectations.

The Company continues to be optimistic about its future based on the strong underlying fundamentals of the generics business, its ability to create intellectual assets and execute its plans in a timely manner.