P & L Account

CONSOLIDATED STATEMENTS OF INCOME (All amounts in Rupees Million, unless otherwise stated)   Year ended December 31,   2006 2005 Revenues Product sales 60,275.71 50,468.67 Service income 406.47 273.75 Other operating revenue 738.11 856.11   61,420.29 51,598.53 Cost of sales (excluding depreciation and amortization) 29,465.74 27,143.85 Gross profit 31,954.55 24,454.68 Operating expenses   Selling, general and administrative expenses 19,651.83 17,274.06   Research and development expenses 3,982.42 5,055.33   Depreciation and amortization 2,894.31 1,718.00   Foreign exchange (gain) / loss (682.06) 978.98 Total operating expenses 25,846.50 25,026.37 Operating income / (loss) 6,108.05 (571.69) Equity in gain of affiliate 50.30 4.71 Interest expense (1,789.20) (669.60) Interest income 207.05 173.99 Other income 431.28 300.49 Income / (loss) from continuing operations before income taxes, discontinued operations and minority interest 5,007.48 (762.10) Income tax expense / (benefit) on continuing operations 889.58 (1,020.91) Income from continuing operations before discontinued operation and minority interest 4,117.90 258.81 Minority interest (57.31) (26.38) Income from continuing operations 4,060.59 232.43 Gain on disposal of discontinued operations, net of tax - 161.88 Income from discontinued operations, net of tax - 384.72 Net income 4,060.59 779.03 Earnings per equity share Basic   Continuing operations Rs. 10.90 Rs. 0.62   Discontinued operations – Rs. 1.47 Net income Rs. 10.90 Rs. 2.09 Diluted       Continuing operations Rs. 10.88 Rs. 0.62   Discontinued operations – Rs. 1.47 Net income Rs. 10.88 Rs. 2.09 Weighted average number of equity shares used in computing earnings per equity share     Basic 372,595,730 372,216,805 Effect of dilutive securities-employee stock option 746,412 1,089,479 Diluted 373,342,142 373,306,284 The accompanying notes are an integral part of these consolidated financial statements.