|SEC 1852
(06-2001) | Persons who potentially are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)

o

OR

x

For the fiscal year ended __March 31, 2008_______________________

OR

o

For the transition period from ______________ to  ________________

Commission file number   _ 0-29108____________________________

___________________Biotech Holdings Ltd.__________________________________

(Exact name of Registrant as specified in its charter)

___________________Biotech Holdings Ltd.__________________________________

(Translation of Registrant`s name into English)

______________________Alberta, Canada______________________________________

(Jurisdiction of incorporation or organization)

#160 - 3751 Shell Road

Richmond, British Columbia, Canada, V6X 2W2

______________________________________________________________________

(Address of principal executive offices)



Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class			Name of each exchange on which registered

_____________None_________________     _______________________________

__________________________________     _______________________________

Securities registered or to be registered pursuant to Section 12(g) of the Act.

_________NONE____________________________________________________

(Title of Class)

__________________________________________________________________

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

___________________Common Shares Without Par Value________________

(Title of Class)



Indicate the number of outstanding shares of each of the issuer`s classes of capital or common stock as of the close of the period covered by the annual report.

92,238,112 Common Shares Without Par Value

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x

o

Indicate by check mark which financial statement item the registrant has elected to follow.

x

o

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

p

p



Item 1.	Identity of Directors, Senior Management and Advisers

This information is not required to be provided because it is an annual report filing.

Item 2.	Offer Statistics and Expected Timetable

This information is not required to be provided because it is an annual report filing.

Item 3.	Key Information

The table in this section sets forth selected consolidated financial data.  Such data, for and as of the end of the five previous fiscal periods, are derived from the consolidated financial statements of Biotech Holdings Ltd. (the "Company").  The selected financial data are expressed in Canadian dollars.

The selected financial data should be read in conjunction with the Consolidated Financial Statements of the Company and the Notes thereto contained elsewhere in the Annual Report.

Product Information

The Company`s principal revenue will be derived from its Type II diabetes drug currently distributed in Mexico.  The drug is marketed under brand name Sucanon.  It is also known as DIAB II and Glucanin and for the sake of clarity and brevity is hereinafter referred to as Sucanon.  The clinical trials for Sucanon in China were done under the brand name DIAB II.

Critical Accounting Policies

The Consolidated Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in Canada ("Canadian GAAP").  Differences with generally accepted accounting principles in the United States ("U.S. GAAP") are set forth in Note 18 to the Consolidated Financial Statements of the Company (Item 17 of this Form 20F).  Some accounting policies have a significant impact on the amounts reported in these financial statements. The Consolidated Financial Statements include a section describing the Company`s significant accounting policies.  Note that the preparation of this Form 20-F requires the Company to make estimates and assumptions that:

- may affect the reported amount of assets and liabilities;

- may affect the contingent assets and liabilities as disclosed at the date of the financial statements and;

- may affect the reported amounts of revenues and expenses during the reported period.

There can be no assurance that actual results will not differ from those estimates.

The Company believes, as explained below, that our most critical accounting policies comprise the following:

Revenue Recognition

The Company`s principal revenue will be derived from its Type II diabetes drug currently distributed in Mexico. The Company has entered into agreements with two non-related companies in Mexico.  The first company manufactures and packages the tablets from a pre-mix of active ingredients manufactured by the Company in Canada.  The second company markets the drug.  The Mexican operating company, Pharmaroth Latin America S.A. de C.V., also markets the drug.

Revenue from product sales will be recognized upon the delivery of the product to a retailer or final consumer when persuasive evidence of an arrangement exists, the price is fixed or determinable and collection is reasonably assured and the Company has no future performance obligations under any licensing agreement or other significant post-delivery obligations.

To March 31, 2008, the Company had generated $370,419 (2007: $336,595; 2006: $482,840) in revenues from its Type II diabetes drug.

The Company`s last fiscal period ended March 31 of the current year.  All fiscal periods are for the full year. The following table is a summary of certain selected financial information of the Company, in accordance with Canadian GAAP, for the Company`s most recently completed fiscal period and for the

four preceding fiscal periods of the Company:

|Fiscal year ended          |                |                |                |                  |                 
|-------------------------- | -------------- | -------------- | -------------- | ---------------- | ----------------
|March 31,                  | 2008           | 2007           | 2006           | 2005             | 2004            
|                           |                |                |                |                  |                 
|Revenues                   | $      370,419 | $      336,595 | $      482,840 | $            nil | $            nil
|Loss from continuing       |                |                |                |                  |                 
|Operations                 | (1,406,163)    | (1,733,989)    | (2,095,602)    | (1,815,867)      | (1,460,669)     
|                           |                |                |                |                  |                 
|Profit (Loss) from         |                |                |                |                  |                 
|discontinued operations    |                |                |                |                  |                 
|including amortization of  |                |                |                |                  |                 
|goodwill and gain          |                |                |                |                  |                 
|from debt restructuring    | -              | 199,094        | 76,224         | 239,057          | (846,282)       
|                           |                |                |                |                  |                 
|Net loss for the year      | (1,406,163)    | (1,534,895)    | (2,019,378)    | (1,576,810)      | (2,306,951)     
|Loss per share             | (0.02)         | (0.02)         | (0.02)         | (0.02)           | (0.03)          
|                           |                |                |                |                  |                 
|Working Capital Deficiency | (3,940,788)    | (2,899,934)    | (2,083,586)    | (1,644,095)      | (2,156,781)     
|Total Assets               | 287,436        | 314,020        | 795,570        | 1,759,027        | 2,232,225       
|Long Term Debt             | 224,343        | 224,343        | 224,343        | 224,343          | 224,343         
|Total Liabilities          | 4,350,073      | 3,323,031      | 2,553,069      | 2,437,211        | 2,788,489       
|Shareholders` Equity       |                |                |                |                  |                 
|(Deficiency)               | (4,062,637)    | (3,009,011)    | (1,757,499)    | (678,184)        | (556,264)       
|                           |                |                |                |                  |                 
|Number of issued common    |                |                |                |                  |                 
|Shares at March 31         | 92,238,112     | 92,229,512     | 92,229,512     | 90,134,310       | 87,542,219      
|Dividends per share        | Nil            | Nil            | Nil            | Nil              | Nil             



The figures below are presented in accordance with U.S. GAAP (expressed in Canadian Dollars).

|                           | Year ended     | Year ended     | Year ended     | Year ended      | Year ended     
|-------------------------- | -------------- | -------------- | -------------- | --------------- | ---------------
|                           | March 31,      | March 31,      | March 31,      | March 31,       | March 31,      
|                           | 2008           | 2007           | 2006           | 2005            | 2004           
|                           |                |                |                |                 |                
|Revenues                   | $      370,419 | $      336,595 | $      482,840 | $           nil | $           nil
|Net Loss                   | (1,406,163)    | (1,534,895)    | (2,019,378)    | (1,575,338)     | (4,939,328)    
|Loss per share             | (.02)          | (.02)          | (.02)          | (.02)           | (.06)          
|                           |                |                |                |                 |                
|Working Capital Deficiency | (3,940,788)    | (2,899,934)    | (2,083,586)    | (1,644,095)     | (2,156,781)    
|Total Assets               | 287,436        | 314,020        | 795,570        | 1,757,555       | 2,230,753      
|Long Term Debt             | 224,343        | 224,343        | 224,343        | 224,343         | 224,343        
|Total Liabilities          | 4,350,073      | 3,323,031      | 2,553,069      | 2,437,211       | 2,788,489      
|Shareholders` (Deficiency) | (4,062,637)    | (3,009,011)    | (1,757,499)    | (679,656)       | (557,736)      
|                           |                |                |                |                 |                
|Number of issued common    |                |                |                |                 |                
|Shares at March 31         | 92,238,112     | 92,229,512     | 92,229,512     | 90,134,310      | 87,542,219     
|                           |                |                |                |                 |                
|Dividend per share         | Nil            | Nil            | Nil            | Nil             | Nil            

Exchange Rate Information

The Company`s accounts are maintained in Canadian dollars.  In this Annual Report, all dollar amounts are expressed in Canadian dollars except where otherwise indicated.



The following table sets forth, for the periods indicated, the high and low rates of exchange of Canadian dollars into United States dollars, the average of such exchange rates on the last day of each month during the periods, and the end of period rates.



|Year Ended |        |        |        |        |       
|---------- | ------ | ------ | ------ | ------ | ------
|March 31   | 2008   | 2007   | 2006   | 2005   | 2004  
|           | US$    | US$    | US$    | US$    | US$   
|High       | 1.1038 | 0.9148 | 0.8850 | 0.8532 | 0.7883
|Low        | 0.8621 | 0.8420 | 0.7851 | 0.7138 | 0.6690
|Average    | 0.9708 | 0.8790 | 0.8565 | 0.7842 | 0.7403
|End        | 0.9783 | 0.8655 | 0.8373 | 0.8220 | 0.7648

The closing exchange rate as at August 22, 2008 was US$ 0.9479 and the high and low exchange rates for each of the previous six months was as follows:



|                   | High   | Low   
|------------------ | ------ | ------
|                   | US$    | US$   
|March 2007         | 1.0265 | 0.9698
|April 2007         | 1.0010 | 0.9683
|May 2007           | 1.0180 | 0.9761
|June 2007          | 1.0070 | 0.9685
|July 2007          | 1.0024 | 0.9733
|To August 22, 2007 | 0.9790 | 0.9320

Capitalization and indebtedness

Capitalization and indebtedness is not required for an annual filing.

Risk Factors

This section is intended to be a summary of more detailed discussions elsewhere in this Annual Report.  The risks described below are not the only ones the Company faces.  Additional risks may impair the business operations and the results of operations or financial condition could be materially affected if any of these risks materialize.

In addition to the risk factors inherent in investing in any junior equity, additional risks affecting the Company fall into three principal categories that can be described as follows:

a. Financial

i) risk that the Company will not be able to raise financing sufficient to make up for its ongoing losses

ii) risk that, for the investing public, continuing issuance of equity to make up for losses significantly dilutes the per-share value of the Company`s assets and potential earnings

iii) risk that, in the event that the Company experiences financial difficulty, it may lose control of its primary marketing assets, that is, its rights to market
Sucanon.

iv) risk of diminution or loss of liquidity in the market for the Company`s securities, due either to fluctuations in securities markets or to investor perception of the Company, thus reducing the ability of third parties to use sale of shares as a method of generating capital for funding the Company

v) risk that ongoing losses will reduce the Company`s ability to obtain credit from suppliers, thus increasing the pressure on the Company as a going concern. These concerns are expressed in the Comments by Auditors for U.S. Readers On Canada-U.S. Reporting Differences and Note 1 of the attached Audited Consolidated Financial Statements

vi) risk that major creditors of the Company could place the Company in receivership or bankruptcy by acting on their charges against the Company

b. Drug-related

i) risk that the Company`s principal product will not begin to produce significant revenue in the only markets where it is currently approved (Mexico, China and Peru)

ii) risk that other regulatory approvals will not be forthcoming

iii) risk that competitive products in the Type II Diabetes therapy field will emerge during the next few years and reduce or negate any competitive therapeutic advantages currently offered by Sucanon

iv) risk that Sucanon or other products produced by the Company will lead to lawsuits that are not covered by the Company`s insurance

v)  risk that, although the product is clearly indicated as not for pregnant women, will be taken by women who are or become pregnant and suffer or claim to suffer medical problems related to using the drug

vi) risk that a Type I or insulin-dependent diabetic will take the drug and will suffer a hypoglycemic episode

vii) risk that competitors within the market will in various ways act to reduce the commercial success of the drug

viii) risk that the drug will have unexpected side-effects which may place new constraints on its commercial viability.

c. Risk related to obtaining and enforcing patents

i) the Company relies significantly on trade secrets for the protection of its Type II Diabetes product in jurisdictions where obtaining or enforcing patent rights is either not feasible or not possible; management believes that difficulties in replicating the composition and production process for its Type II Diabetes product will continue to protect the drug from being copied in such markets but acknowledges that one or more competitors could potentially copy essential aspects of  the drug, thus leading to a loss of intellectual knowledge, and potentially having an impact on revenues

d. Management-related

i) risk that management of Biotech Holdings is sharply focused on a few key managers or a single key manager and that loss of the services of these persons or this person for any reason would be severely negative for the prospects of ongoing operations

ii) risk that additional management needed for creating and guiding meaningful growth at the Company will be difficult  to attract

e. Political risk

i) risk that markets in which the drug are sold or are to be sold in Latin America are politically unstable and that one or more of these markets will undergo a significant political change, such as imposition of price controls, which impacts the Company`s ability to sell the drug profitably

Item 4 Information on the Company

History and development of the Company

Biotech Holdings Ltd. (the "Company") was incorporated in Alberta, Canada and is an integrated pharmaceutical company whose common shares traded on The Alberta Stock Exchange (the "ASE") until November 1999 at which time the ASE was merged into The Canadian Venture Exchange (the "CDNX" now called the "TSX Venture Exchange") under the symbol "BIO.V".  In October 12, 2007, the Board of Directors of the Company decided that it was in the best interest of the Company to apply to the TSX Venture Exchange to de-list its shares on a voluntary basis from the Exchange.  As such, the trading of Company`s shares were delisted from the Exchange in Canada while continuing trading of the Company`s shares on the Over the Counter Bulletin Board in the United States.  The Company continues to report to and be accountable to the British Columbia Securities Commission, the Alberta Securities Commission and the U.S. Securities Exchange Commission. The Company trades on the NASD OTC-BB under the symbol "BIOHF".  In 2001 the Company was listed on the Frankfurt Stock Exchange under the symbol "925970.F".

The Company`s business focus is on developing the distribution of the Company`s Type II Diabetes drug known as Sucanon, particularly in Mexico and Latin America.

The Company`s head office and principal office are located at #160 - 1501 Shell Road, Richmond, British Columbia, V6X 2W2, Telephone No. (604) 295-1119.

The Company`s discussion of its anticipated future operations and the other forward looking statements contained in this Form 20-F involve a number of material risks and uncertainties.  In addition to the factors specifically discussed in context hereafter, factors that could cause actual results to differ materially are regulatory requirements imposed upon the Company`s lines of business, international political instability and changes in economic conditions, advances in development of competing products, the Company`s ability to acquire protection for its intellectual property rights, and its ability to obtain financing on acceptable terms when and as required.

History of the Company and Its Subsidiaries

The Company`s history has had the following highlights:

The Company was originally incorporated under the name LMK Technologies Inc. ("LMK") under the provisions of the Business Corporations Act (Alberta) on August 20, 1993.

Pursuant to a prospectus dated February 9, 1994, the Company, acting under the name of Conserve Energy Corporation ("Conserve"), made an initial public offering of

2,500,000 common shares at $0.10 per share.

In January, 1995 the Conserve identified Biotech Holdings Inc. ("Holdings") as a potential acquisition.  On December 14, 1995 the Company`s shareholders approved the acquisition of all of the issued and outstanding shares of Holdings in exchange for 15 million shares issued to the shareholders of Holdings and approved the Company`s name change to Biotech Holdings Ltd. to reflect its corporate direction in the biotechnology field.

On September 11, 1998 Holdings sold its operational assets to Biotech Laboratories Inc. ("Laboratories"), another subsidiary of the Company, in exchange for Laboratories` assumption of $2,000,000 in collateralized debts on the books of Holdings.

In November, 2002 the Company`s primary operating subsidiary, Biotech Laboratories Inc. discontinued operations.

On December 12, 2002, the Company filed a proposal under federal creditor protection legislation in Canada.  The purpose of the filing of the proposal was to protect the interests of all stakeholders of the Company from an action taken by the landlord of Laboratories. The landlord in question undertook to seize Laboratories assets and the filing of the proposal prevented the landlord`s seizure from continuing.

On May 21, 2003, both the Company and Laboratories received approval from the Supreme Court of British Columbia in the matter of two proposals regarding its creditors pursuant to the Bankruptcy and Insolvency Act of Canada.  These proposals, accepted by the required majority of creditors, allows for the operating subsidiary to maintain operations and generate funds from those operations to pay a portion of its pre-proposal liabilities.  Under the proposal, preferred creditors shall be paid in full in priority to all claims of unsecured creditors.  Provision for payment of claims of unsecured creditors shall be made in the lesser amount of 10% or $25,000 on each day, which is one year, one year six months and two years, respectively, after the end of the month of court ratification.

On November 3, 2003, the Company announced that it received formal regulatory approval for the sale of its Type II Diabetes drug in Mexico.

National television and radio advertising for the sale of Sucanon in Mexico began in May 2005.  Revenues from shipments made prior to the launch of the advertising were recognized in the quarter ended June 30, 2005.

November 21, 2005 - the Company announced that the TSXV had completed a compliance review and had identified a number of issues which in the Exchange`s view required clarification, particularly the fact of ongoing relationships that the Company had with a number of companies controlled by the Robert Rieveley and his spouse and contraventions of Exchange policy which had occurred pursuant to that fact.

The resulting clarifications confirmed: that a company called R. Rieveley and Associates has provided financing and was as of June/05 owed $233,348 by the Company; that a company called Wenroth Limited ("Wenroth") provides financing via loans and as of June 30, 2005 was owed $13,497; that the company called Inreg Corporation ("Inreg") provides financing via loans bearing interest at 8% and was owed $96,265 by the Company as of June 30, 2005; that a company called Penne Investments has provided financing to the Company via loans but had no loans to the Company outstanding as of June 30, 2005; that Allburg Holdings Inc. ("Allburg") provides financing to the Company via loans and held as of June 30, 2005 a note payable of $116,927 and bearing interest at 8%; further that Allburg owns 25% of the Company`s 75%-owned subsidiary Smith Rothe Pharmaceutical Inc., which has been granted by the Company an exclusive license to manufacture and market the Company`s Sucanon Type II Diabetes medication in all countries outside Oriental Asia, in return for a royalty equal to 25% of Sucanon profits in any country where the license is granted, which royalties for the three months ended June 30/05 totalled $17,165; that a company called Seabright Holdings Ltd. indirectly finances the Company through Seabright`s owning of the shares of Allburg, Inreg and Wenroth, this ownership also making Allburg the largest creditor of the company; that the Company`s Sucanon medication is manufactured on behalf of the Company by a private company controlled by Robert Rieveley, which transfers Sucanon to the Company at cost, receiving no profit from the manufacturing operation, and the the private company was owed $6,092 as of June 30, 2005; that general security agreements registered with the provincial government in Victoria support the above-described loans and financing arrangements; additionally, that an independent director of the Company, Geoff Herring, owns a company, Grand Poisson & Chemical Consulting, which provides chemical analysis and quality control testing of the Company`s diabetes medication.

The contraventions of Exchange policy were summarized in the report as follows: that the company failed to issue press releases disclosing the existence and terms of the above-noted agreements with the related parties; that the Company failed to disclose the related party agreements in the Company`s Management Discussion and Analysis ("MD&A") reports filed with audited and interim financial statements; that the Company failed to file with the Exchange in a timely manner the majority of related party agreements noted above; that the company failed to file for approval by the Exchange a majority of the agreements with related parties; that the Company had not disclosed all materials facts regarding development progress of Sucanon and the level of market acceptance of Sucanon.

The Exchange also required the Company to provide a clarification regarding the drug or herbal remedy status of Sucanon, in response to which the Company pointed out that Sucanon has a natural or herbal component but that this does not preclude it from being classified as a drug since a class of herbally based drugs, which may be sold on an OTC basis, is available to Mexican regulators, who approved the use of Sucanon for reduction of symptoms of Type II Diabetes.

The Exchange also determined that the Company`s signing policy was in contravention of Exchange policy requiring all company cheques to have two signatures; the Company complied with this requirement by implementing a policy of each cheque to be signed by an officer and by a director who are unrelated to each other.

The Exchange further determined that 429,185 shares plus warrants issued to Mr. Rieveley at $0.375, with an expiry date of January 27, 2006, had been issued in satisfaction of debt and not in consideration of cash and that by failing to file for this share issuance in compliance with Exchange policy the Company had inadvertently made an incorrect filing to the Exchange.

In addition to the above, the Exchange required and the Company acceded to: execution of agreements with Mr. Rieveley whereby he agreed to the cancellation 429,185 warrants at $0.375 per share; an undertaking signed by each of the directors recognizing that any further violations of Exchange requirements could result in a review of the acceptability of each of the directors and officers of the Company to be a director, officer, agent or consultant of any company traded on the Exchange.

The Exchange also required that: the Company will ensure that its future public disclosures do not contain promotional language; that the Company disclose all relevant terms of contracts and agreements completed by the Company; and that the Company issue timely updates informing the marketplace of the status of events that are delayed or are not proceeding.

December 6, 2005- it was announced that trading in the Company`s shares was halted on the TSX Venture Exchange pending the appointment of two independent directors to the Company`s board of directors satisfactory to the Exchange, including possessing the requisite degree of positive public company experience.

February 2, 2006- it was announced that the TSX Venture Exchange had upgraded its halt trading announced in December to a suspension of trading in the Company`s shares on the Exchange.  The Company had presented one directorial candidate who was accepted by the Exchange.  (Subsequent to March 31, 2006, the Exchange accepted a second directorial candidate.)

The following are highlights of the Company`s business during fiscal 2007:

June 23, 2006- it was announced, the Board of Directors replaced  896,000 stock options exercisable at $0.25 per share which expired on January 2, 2006, with new stock options exercisable at $0.16 per share. The replacement options vest on October 22, 2006 and expire on June  22, 2008.  A total of 560,000 of these options were granted to Directors and Officers of the Company and the remaining 336,000 were granted to Consultants to the Company.  The shares were trading at $0.08 per share at the date of the grant.

The Board of Directors also replaced 545,000 stock options exercisable at $0.55 per share which expired or were cancelled by March 24, 2006 with new stock options exercisable at $0.10 per share. These replacement options will vest October 22, 2006 and expire on June 22, 2008. A total of 470,000 of these options were granted to directors and officers and 75,000 were granted to consultants to the company.  The stock options described above comply with the Stock Option Plan approved by the shareholders on September 30, 2005 and are subject to the approval of the TSX Venture Exchange. The shares were trading at $0.08 per share at the date of the grant.

August 29, 2006- It was announced that the TSX Venture Exchange approved two new independent directors for the Company, a requirement outlined in the press release, dated November 21, 2005 titled "TSX Venture Exchange Compliance Review Completed".

The two approved directors are Mr. Art Cowie and Mr. Ross Wilmot.

Mr. Cowie is a director and vice-chair of Sungold International Holdings Corp., of Toronto, Ontario (SGIHF.OB). Mr. Cowie is a former elected member of the British Columbia legislative assembly, a former member of Vancouver City Council and the founding principal of a landscape architecture firm in Vancouver.

Mr. Wilmot is a Chartered Accountant (CA) and is a director and/or officer of the following publicly traded companies: Orex Ventures (REX.V), Orko Silver (OK.V), Avigo Resources (TMX.H.V), Verb Exchange (VEI.V) and Arvana Inc. (OTCBB), as well as privately held  CTF Technologies.

The Company`s audit committee is comprised of Mr. Rieveley, Mr. Cowie, Mr. Wilmot and Mr. De
Rooy.

The Company was suspended from trading on the TSX Venture Exchange on December 6, 2005 while concerns raised by the TSX Venture Exchange were addressed to the TSX Venture Exchange`s satisfaction- the most difficult issue being the appointment of 2 additional independent directors satisfactory to the Exchange. With the appointment of Mr. Cowie and Mr. Wilmot, the TSX Venture Exchange resumed trading of the Company`s shares on August 30, 2006.

With the appointment as director, and reinstatement of trading of the Company`s shares, Mr. Wilmot received as of June 26, 2006, 300,0000 share options at $0.10 per share, vesting October 26, 2006 and expiring June 25, 2008. The shares were trading at $0.06 per share at the date of the grant.

November 23, 2006 - the Company granted a total 275,000 share options at $.10 US stock options to three of the Company`s employees.  The options vest March 23, 2007 and expire November 22, 2008.

January 16, 2007- the Company reported that sales for the quarter ended December 31, 2006 exceeded the combined sales of the first two quarters, ended September 30, 2006, by $55,692 or 73%.  The sales during the quarter ended December 31, 2006, at $127,194, exceeds sales of $99,137 generated during the quarter ended December 31, 2005, and is the second-largest quarterly sales total recorded to date.

In addition to the year-over-year sales increase, sales during the December 31, 2006 quarter itself increased each month, suggesting a trend of sales growth following the Company`s resumption of advertising support for the product and the Company`s managers taking over the marketing of Sucanon in Mexico in September 2006.

February 19, 2007 - The Company, announced that a private placement application previously announced on November 7, 2005 for 984,666 shares to be issued for funds was cancelled effective February 16, 2007.  On this date, the Board of Directors approved the conversion of the funds, which had been advanced by an insider, from a secured non-interest bearing loan to a secured loan bearing interest at 8% from the effective date.

The following are highlights of the Company`s business during fiscal 2008:

April 12, 2007- the Company announced that the Company applied to the TSX Venture Exchange (the "Exchange") to replace 700,000 options that had expired and to issue new options.  The grant was for a total of 5,034,000 options allocated among officers, directors, employees and consultants and had an exercise price of $.11 per share, vesting October 12, 2007 and expiring April 12, 2009.

May 30, 2007- The Company reported that it had signed an agreement for distribution of Sucanon, a Type II diabetes drug, in four markets in Latin America.  Sucanon is already widely sold in Mexico.

The four additional markets- Colombia, Peru, Ecuador and Costa Rica- will be served by a private company based in Bogota, Colombia.  The private company, unrelated to Biotech Holdings, focuses on sales of antibiotic products and has subsidiary operations in several Latin American countries.

Biotech will carry out tableting and blister-packing of Sucanon tablets through a company which it sub-contracts in Mexico, and sell the blisterpacked product to the Colombian company.  The Colombian company will add country-specific external packaging for each of the different markets for which it is licensed and distribute to those markets.

Colombia, with approximately 44 million people, is the largest of these markets. The four markets have a combined population of approximately 90 million and are typified by high rates of Type II Diabetes, affecting approximately 15% of the adult population.  .(There is no assurance that regulatory approval will be obtained in any specific market nor any assurance that sales, once begun, will be material).

June 1, 2007 - the Company reported that it launched a website, www.sucanonhealth.com, for internet sales of Sucanon, a Type II diabetes drug.  Sucanon, which is broadly classed as an insulin-sensitizing drug, has been shown to be an effective and very safe treatment for Type II Diabetes, without the side-effects that are associated with several competing Type II Diabetes medications including the glitazone medications which are now the subject of a "black box" warning by the U.S. FDA.

June 21, 2007 - the Company reported that the Mexican Diabetes Federation gave  Biotech`s "Sucanon" diabetes drug its support in an overview of diabetic drugs published in the May-June 2007 issue of Diabetes Hoy, the Diabetic Federation`s scientific and medical magazine for doctors and other health professionals.

July 12, 2007 - the Company reported that it filed a Material Change Report stating that the Company has changed auditors, from STS Partners ("STS") of Vancouver, B.C. to Cinnamon Jang Willoughby ("CJW") of Burnaby, B.C.

September 4, 2007- The Company`s shares were halted on the TSX Venture Exchange pending clarification of Company affairs.

October 12, 2007 - the Board of Directors of the Company decided that it was in the best interest of the Company to apply to the Exchange to de-list its shares on a voluntary basis from the Exchange.  As such, the Company has applied to the Exchange to de-list its shares on a voluntary basis from the Exchange in Canada while continuing trading of the Company`s shares on the Over the Counter Bulletin Board in the United States.  The Company continues to report to and be accountable to the British Columbia Securities Commission, the Alberta Securities Commission and the U.S. Securities Exchange Commission.

October 15, 2007- Ross Wilmot resigned as a Director of the Company.

October 25, 2007- the Company announced that it signed an agreement with a private company based in El Salvador for marketing and distribution of its Sucanon Type II diabetes drug in four Central American countries, Guatemala, Honduras, Nicaragua and El Salvador.  The four new markets targeted in connection with this agreement have a total population of approximately 33 million people, with an estimated 775,000 cases of Type II Diabetes in the region. The Central American markets will be served by Sucanon deliveries from the Company`s contract-packager, based in Mexico City.  The distributor will co-ordinate its advertising in the Central American region with advertising arranged by Biotech`s office in Mexico. (There is no assurance that regulatory approval will be obtained in any specific market nor any assurance that sales, once begun, will be material).

November 26, 2007- the Company announced that it signed an agreement with a private company for marketing and distribution of its Sucanon Type II diabetes drug in the United Arab Emirates (the UAE) including Dubai.  (There is no assurance that regulatory approval will be obtained in any specific market nor any assurance that sales, once begun, will be material).

In April, 2008, the Company announced that it had granted a total of 1,838,600 options allocated among officers, directors, employees and consultants.   All of the options have an exercise price of $.10 per share, would vest October 31, 2008 and expire March 31, 2010.

September 15, 2008 - the Company was is saddened to report the sudden passing of its
President and CEO, Robert Rieveley. Mr.
Rieveley died unexpectedly of a heart attack on Tuesday, September 9, 2008. The
Company wishes to express its heartfelt condolences to his family. He will be
sadly missed by all.

Biotech`s
Board of Directors has appointed Lorne Brown, CFO Biotech Holdings Ltd., as
interim CEO. As part of its ongoing
governance practices, Biotech`s Board of Directors has formed a Special
Committee of independent Directors to identify and help the Board select a
permanent President and CEO.

Biotech`s Board of Directors will recommend the nomination of Gregory Robert Rieveley to
the board at the next annual general meeting on September 26, 2008.
Mr. Rieveley, a Chartered Accountant, is currently Vice-President
Internal Audit and Business Development at Harry Winston Diamond Corporation.

Capital Expenditures

The following table details the Company`s principal capital expenditures under the two categories of Property and Equipment and Technology Interests since March 31, 2005:

|Property and Equipment for
Continuing Operations |                  
|------------------------------------------------ | -----------------
|                                                 |                  
|Cost March 31, 2005                              | $         407,790
|Additions                                        |                  
|Laboratory Equipment                             | 3,792            
|Cost March 31, 2006                              | $         411,582
|Additions                                        |                  
|Computer Equipment                               | 1,282            
|Cost March 31, 2007 and 2008                     | $      412,864   
|                                                 |                  
|Technology Interests                             |                  
|Cost March 31, 2005, 2006, 2007 and 2008         | $      4,461,282 
|Technology Interests have a net book value       | of $1            

The Company currently has no major capital expenditures in progress and has no commitments for such capital expenditures as at the date of this filing.

Public Takeover Offers

There have been no public takeover offers by third parties in respect of the Company`s shares or by the Company in respect of other companies` shares in the last and current financial year.

B.	Business Overview

The Company`s business focus is on developing the distribution of the Company`s Type II Diabetes drug known as
Sucanon.

Sales and Revenue Activity Analysis

During the past three fiscal years, sales and revenue from the distribution of the Company`s Type II Diabetes drug in Mexico, have had the following distribution amongst activities and geographic markets:

|                     | Fiscal      | Fiscal      | Fiscal               
|-------------------- | ----------- | ----------- | ---------------------
|                     | 2008        | 2007        | 2006                 
|Drug Sales in Mexico | $   370,419 | $   336,595 | $             482,840
|                     |             |             |                      
|Total Sales in Year  | $   370,419 | $   336,595 | $             482,840



Pharmaceutical Business

Although the pharmaceutical business has not yet reached profitability, the Company has significant investment in capital and has expended considerable efforts in getting its Type II Diabetes drug registered in various countries in Latin America and elsewhere.  The potential of the drug has enabled the Company to receive financial support from its investors.

The pharmaceutical business is divided into the following regions:

China and other "Asia Countries" which are defined as Indonesia, Philippines, Malaysia, Kampuchea (Cambodia), Thailand, Laos, China, Mongolia, Japan, North Korea, South Korea, Vietnam, Hong Kong, Macao, and Singapore and;

All other countries.



Structure of the Chinese Pharmaceutical Business

The history and structure of the Company`s operations in China is described in the Company`s 20-F filings for the years March 31, 2005 and prior.  The Company suspended its Chinese operations during the fiscal year ended March 31, 2003 due to economic reasons.

Structure of Other Countries Pharmaceutical Business

Allburg Holdings Inc.

Allburg Holdings Inc. ("Allburg"), previously known as Wanchi Inc., has been granted an exclusive license to manufacture and sell Sucanon, make any claims and to use all patent rights in all countries outside Oriental Asia.  As a condition of this license Allburg must sub-license these rights, and this sub-license may only be granted to companies that are at least 50% owned by the Company (see Exhibit 3.8 to the Company`s Registration Statement previously filed with the March 31, 1996 Form 20-F).  Allburg granted an exclusive license to sub-contract the manufacture and marketing of the Company`s Type II diabetes drug Sucanon, make claims and to use all patent rights in countries outside Oriental Asia to Smithe Rothe Pharmaceutical, Inc. ("Smith Rothe").

During 1999, Allburg sold a 25% interest in Sucanon to Immunis Corp. for $2.43 million worth of shares in Immunis.  In January 2001, the Company purchased that 25% interest from Immunis Corp. by issuing 8,613,419 of its common shares at $0.26 per share to Immunis Corp. for a total consideration of $2,239,489.  The Company has a 75% interest in rights to DIAB II in countries other than the Asia Countries.

Pursuant to US GAAP, shares should be valued at the date of issue.  The closing price of 26 cents per share represents a 12 percent discount of the weighted average share price before and after the date of the transaction.  As per the above analysis, the number of shares issued represents a considerable discount from their intrinsic worth.

In December 2002, a Director of the Company purchased Allburg.  This purchase resulted in his indirect ownership of 25% of Smith Rothe.

History of Operations and Business Structure

Approval for the sale of the diabetes drug was received from Peruvian regulatory authorities in November 2001.  The Company couldn`t agree on terms with a suitable distributor in Peru because under the terms of the approval, as a prescription product, the drug could only be marketed directly through doctors.

Approval for the sale of the diabetes drug Sucanon was received from Mexican regulatory authorities in November, 2003 as a non-prescription medication for the reduction of symptoms of Type II diabetes.

During the year ended March 31, 2005, the Company entered into agreements with two non-related companies in Mexico.  The first company manufactures and packages the tablets from a pre-mix of active ingredients manufactured by the Company in Canada.  The second company distributes and markets the drug.

On December 1, 2004 the Company announced that it had received its first order for Sucanon.  Shipments of Sucanon were made starting in December 2004. Due to delays in the launch of the Company`s advertising campaign, it was felt that the Company had had future performance obligations to meet prior to recognizing initial sales. As a result, revenues of $50,278 in shipments made in the period from December 2004 to March 31, 2005 were deferred until the first quarter of the fiscal year ended March 31, 2006.

During the year ended March 31, 2006, Smith Rothe incorporated an operating company in Mexico, Pharmaroth Latin America S.A. de C.V. to co-ordinate the production and marketing of Sucanon in Mexico.

Clinical Information for the Type II Diabetes Medication

Clinical Trials

This drug is used both as a prophylactic and a therapeutic.  The clinical trials, which were undertaken under the name "DIAB II" (Sucanon), have shown this drug to be effective and safe.  Although the clinical trial protocols are similar to those required for FDA approval, the stages specified below relate to the Chinese drug approval authorities.  Clinical trials were done in China because of the lower cost than would be the case in North America.

Stage I trials were conducted on rat muscle cells.  Binding and internalization of insulin was evaluated as well as monitoring changes in intracellular glucose metabolism under dosage.

Stage II trials were conducted on both dogs and rats.  Tests included general pharmacology, pharmokinetics, acute toxicity including establishing an LD50 rate, and long term toxicity.

Stage III trials were conducted using three hospitals and sixty doctors.  Over 1,500 patients were interviewed and tested with the results from 370 patients submitted for approval in the first quarter of 1995.  Trials were conducted on a double blind basis.  Participation time for each applicant was six months including one month each before and after Sucanon treatment or placebos.  Dietary intake was strictly controlled with breakfast, lunch and dinner provided to participants.  Twice per week through the duration of the trial fasting glucose, fasting cholesterol and blood tests were conducted.  Once every two weeks 100 gram oral glucose tolerance tests were conducted.

Although an approval has been received to market Sucanon in China and in Mexico (during the 2004 fiscal year), there can be no assurance supplemental clinical trials will demonstrate the required efficacy to obtain approval in other countries.  Failure to successfully complete the existing clinical trials or other clinical trials contemplated on a timely basis could have a material adverse effect on the Company`s future business, financial condition and results of operations.

Summary of Results

Sucanon is a synthesized compound that includes a synthetic and a herbal component, the two together having a significant hypoglycemic effect in Non-Insulin Dependent Diabetes Mellitus (NIDDM) patients.  Animal tests and clinical trials have shown that this product increases the binding and internalization of insulin in peripheral cells.  Sucanon is a promising new product for NIDDM therapy, especially for those with IGT and mild/medium NIDDM (<230 mg/dL, or <13
mmole/L).

The results of the clinical trials were positive, achieving a high patient satisfaction rate and successfully reducing the clinical symptoms and signs of diabetes.  The dosage form utilized was successful, and the product has been approved for use as a drug in China, indicated as a therapy for NIDDM and IGT.  The following conclusions were reached by Clinical Trial Centers and approved by the Chinese Government:

Sucanon reduces the clinical symptoms and signs of diabetes, which include polyuria, polydipsia, polyphagia, and fatigue.

Sucanon significantly lowers fasting venous plasma glucose levels and significantly improves the 2-hour glucose tolerance in NIDDM patients.

Sucanon is effective in 87% of the NIDDM patients in the clinical trial.

Sucanon significantly lowers fasting venous plasma cholesterol and triglyceride levels in NIDDM patients.

The dosage form of Sucanon is acceptable for clinical uses.

No adverse side effect was observed in the clinical trials.

This product has also shown significant benefit in combination uses with other oral hypoglycaemics, e.g. sulfonylureas and/or biguanides.  When used in combination with current hypoglycaemics, Sucanon is shown to decrease the primary and secondary failure to respond to these other agents, thus significantly improving the overall clinical success rate.

Manufacturing of the Drug

Sucanon is a pressed tablet that is coated and then packaged in a blister-pack form for distribution.  In order to safe-guard the proprietary information of the drug, the active ingredient in the drug is manufactured at the Company`s facility in Vancouver, British Columbia and then shipped to Mexico (and in the past to China) for tableting.  The tableting and packaging of the drug in Mexico is being undertaken on a contract basis by unaffiliated manufacturers.

Marketing of Sucanon

It is intended that Sucanon will be marketed throughout the world under licenses granted by Volkspharm.  Volque has been granted an exclusive license to market Sucanon to all Asia Countries.  Allburg has been granted an exclusive license to market Sucanon to all countries other than Asia Countries.  Allburg must sub-license these rights, and the sub-license may only be granted to companies that are at least 50% owned by the Company or its subsidiaries.  The Company has a 75% interest in rights to Sucanon in countries other than the Asia Countries.  The 25% minority interest in these rights is owned by a Company controlled by a Director of the Company.

Sucanon is an oral hypoglycemic that typically requires a doctor`s prescription (in Peru and China), though the regulatory approval received in Mexico also permits Sucanon to be dispensed by a pharmacist  without prescription.  Prescriptions are filled through a pharmacy or through a hospital.  Pricing of the drug has been established so that it is affordable for the majority of the urban population in Mexico.

The primary market for Sucanon is IGT (Impaired Glucose Tolerance) and mild-medium NIDDM (Non-Insulin Dependent Diabetes Mellitus) patients.  At present, dietary therapy is the primary recommended regimen for IGT sufferers.

That regimen involves the close monitoring of a patient`s diet to reduce calorie intake in order to decrease blood sugar (glucose) levels.  However, complications arise due to the difficulty in monitoring the patient`s diet in order to achieve satisfactory blood sugar, nutrient and energy levels; similarly, as IGT and NIDDM severity increases, this dietary treatment has decreased effectiveness.

Sucanon has been tested successfully as an alternative to dietary therapy in treating IGT and mild-medium NIDDM patients, as it not only provides control of blood sugar levels but also gives patients a feeling of well being and enhances the metabolism of glucose at the cellular level.

In Mexico and Peru, where regulatory approval has been received, marketing of Sucanon is to be carried out by marketing companies which are unrelated to the Company.

Sale of Sucanon Outside of Asia Countries

Allburg may grant the rights to sell Sucanon II outside of Asia Countries, but only to companies in which the Company owns at least a 50% interest.  The name Sucanon has been trademarked for the marketing of the drug in North America.

During the 2004 fiscal year, the Company located a suitable space in the Vancouver, Canada area where equipment specifically related to Sucanon pre-mix manufacture was installed.  The facilities are used for pre-mixing of Sucanon powder for supply to tableters.  Tableting for the Mexico and Peru markets- the Company`s first markets outside China --- is carried out by a tableter in Mexico.

Company Highlights of Fiscal 2008

The following are highlights of the Company`s business during fiscal 2008:

April 12, 2007- the Company announced that the Company applied to the TSX Venture Exchange (the "Exchange") to replace 700,000 options that had expired and to issue new options.  The grant was for a total of 5,034,000 options allocated among officers, directors, employees and consultants and had an exercise price of $.11 per share, vesting October 12, 2007 and expiring April 12, 2009.

May 30, 2007- The Company reported that it had signed an agreement for distribution of Sucanon, a Type II diabetes drug, in four markets in Latin America.  Sucanon is already widely sold in Mexico.

The four additional markets- Colombia, Peru, Ecuador and Costa Rica- will be served by a private company based in Bogota, Colombia.  The private company, unrelated to Biotech Holdings, focuses on sales of antibiotic products and has subsidiary operations in several Latin American countries.

Biotech will carry out tableting and blister-packing of Sucanon tablets through a company which it sub-contracts in Mexico, and sell the blisterpacked product to the Colombian company.  The Colombian company will add country-specific external packaging for each of the different markets for which it is licensed and distribute to those markets.

Colombia, with approximately 44 million people, is the largest of these markets. The four markets have a combined population of approximately 90 million and are typified by high rates of Type II Diabetes, affecting approximately 15% of the adult population.(There is no assurance that regulatory approval will be obtained in any specific market nor any assurance that sales, once begun, will be material).

June 1, 2007 - the Company reported that it launched a website, www.sucanonhealth.com, for internet sales of Sucanon, a Type II diabetes drug.  Sucanon, which is broadly classed as an insulin-sensitizing drug, has been shown to be an effective and very safe treatment for Type II Diabetes, without the side-effects that are associated with several competing Type II Diabetes medications including the glitazone medications which are now the subject of a "black box" warning by the U.S. FDA.

June 21, 2007 - the Company reported that the Mexican Diabetes Federation gave  Biotech`s "Sucanon" diabetes drug its support in an overview of diabetic drugs published in the May-June 2007 issue of Diabetes Hoy, the Diabetic Federation`s scientific and medical magazine for doctors and other health professionals.

July 12, 2007 - the Company reported that it filed a Material Change Report stating that the Company has changed auditors, from STS Partners ("STS") of Vancouver, B.C. to Cinnamon Jang Willoughby ("CJW") of Burnaby, B.C.

September 4, 2007- The Company`s shares were halted on the TSX Venture Exchange pending clarification of Company affairs.

October 12, 2007 - the Board of Directors of the Company decided that it was in the best interest of the Company to apply to the Exchange to de-list its shares on a voluntary basis from the Exchange.  As such, the Company has applied to the Exchange to de-list its shares on a voluntary basis from the Exchange in Canada while continuing trading of the Company`s shares on the Over the Counter Bulletin Board in the United States.  The Company continues to report to and be accountable to the British Columbia Securities Commission, the Alberta Securities Commission and the U.S. Securities Exchange Commission.

October 15, 2007- Ross Wilmot resigned as a Director of the Company.

October 25, 2007- the Company announced that it signed an agreement with a private company based in El Salvador for marketing and distribution of its Sucanon Type II diabetes drug in four Central American countries, Guatemala, Honduras, Nicaragua and El Salvador.  The four new markets targeted in connection with this agreement have a total population of approximately 33 million people, with an estimated 775,000 cases of Type II Diabetes in the region. The Central American markets will be served by Sucanon deliveries from the Company`s contract-packager, based in Mexico City.  The distributor will co-ordinate its advertising in the Central American region with advertising arranged by Biotech`s office in Mexico. (There is no assurance that regulatory approval will be obtained in any specific market nor any assurance that sales, once begun, will be material).

November 26, 2007- the Company announced that it signed an agreement with a private company for marketing and distribution of its Sucanon Type II diabetes drug in the United Arab Emirates (the UAE) including Dubai.  (There is no assurance that regulatory approval will be obtained in any specific market nor any assurance that sales, once begun, will be material).

Subsequent to March 31, 2008, the following announcements were made:

In April, 2008, the Company announced that it had granted a total of 1,838,600 options allocated among officers, directors, employees and consultants.   All of the options have an exercise price of $.10 per share, would vest October 31, 2008 and expire March 31, 2010.

In July, 2008, the Company announced that it had granted a total of 1,225,000 replacement options for 1,432,400 options that had recently expired or were cancelled. The options were allocated among officers and directors (990,000), employees (40,000) and consultants (195,000).   All of the options have an exercise price of $.10 per share, would vest December 11, 2008 and expire July 10, 2010.

September
15, 2008 - the Company was is saddened to report the sudden passing of its
President and CEO, Robert Rieveley. Mr.
Rieveley died unexpectedly of a heart attack on Tuesday, September 9, 2008. The
Company wishes to express its heartfelt condolences to his family. He will be
sadly missed by all.

Biotech`s
Board of Directors has appointed Lorne Brown, CFO Biotech Holdings Ltd., as
interim CEO.As part of its ongoing
governance practices, Biotech`s Board of Directors has formed a Special
Committee of independent Directors to identify and help the Board select a
permanent President and CEO.

Biotech`s Board of Directors will recommend the nomination of Gregory Robert Rieveley to
the board at the next annual general meeting on September 26, 2008.;
Mr. Rieveley, a Chartered Accountant, is currently Vice-President
Internal Audit and Business Development at Harry Winston Diamond Corporation.

Research & Development - the Company`s Type II Diabetes drug

Research expenditures are expensed in the year in which they are incurred.  During fiscal 2008 the Company did not incur any in drug related research costs during 2006, 2007 or 2008.

It is the Company`s policy to defer all costs that relate to the development of new products where management is satisfied as to the technological, commercial and financial viability of individual products.  These costs are amortized on a straight-line basis over a five year period.  All deferred development costs were fully amortized in the year ended March 31, 2005 and no additional amounts were capitalized.

Patents and Proprietary Information

The Company, itself and through Volque, pursues a policy of seeking patent protection where possible for the valuable patentable subject matter of its proprietary technology.  The Company believes that patent and trade secret protection is important in its business, and that its success will depend, in part, on its ability to obtain and enforce strong patents, to maintain trade secret protection and to operate without infringing the proprietary rights of others.  Volkspharm has patent applications pending in Canada on Sucanon for which the Company, through Allburg (see "Associated Company" above), has been granted exclusive licensing rights to countries other than Asia Countries.  See Exhibit 3.8 "Assignment of 50% Interest Rights" of the Company`s Registration Statement (previously filed with the March 31, 1996 Form 20F).

No assurance can be given that patents will issue from any pending applications or that claims now or in the future, if any, allowed under issued patents will be sufficiently broad to protect the Company`s technology.  In addition, no assurance can be given that patents issued or licensed by the Company will not be challenged, invalidated, infringed or circumvented, or that the rights granted thereunder will provide competitive advantages to the Company.  The commercial success of the Company will also depend in part on the Company or any of its affiliates not infringing patents or proprietary rights of others and not breaching the licenses granted to the Company.

Although the Company is presently unaware of the need for or risk of any such action, litigation, which could result in substantial cost to the Company, may also be necessary to enforce any patents issued to the Company and/or Volkspharm or to determine the scope and validity of other parties` proprietary rights, which may affect the Company`s products and technology.  If the outcome of any such litigation is adverse to the Company, the Company`s business could be materially affected.  To determine the priority of invention, the Company and/or Volkspharm may also have to participate in interference proceedings declared by the United States Patent and Trademark Office, which could result in substantial cost to the Company.

Patent protection is provided in the People`s Republic of China "PRC" through the Patent Law of the People`s Republic of China of 1984 ("PRC Patent Law").  For a discussion of the differences between U.S. and PRC patent law, please refer to the Company`s Registration Statement previously filed with the March 31, 1996 Form 20F.

There has been, and the Company believes that there may be in the future, significant litigation in the industry regarding patent and other intellectual property rights and that, if the Company becomes involved in such litigation, it could consume substantial resources.  Significant legal issues frequently arise regarding the extent to which patent protection is afforded in the pharmaceutical field.  The Company, therefore, also relies upon trade secrets, know-how, and continuing technological advancement to develop and maintain its competitive position.  Disclosure and use of the Company`s know-how is generally controlled in part under confidentiality agreements with the parties involved.  In addition, the Company has confidentiality agreements or non-disclosure agreements with certain of its key employees, consultants, officers and directors.  There can be no assurance, however, that all confidentiality agreements will be honored, that others will not independently develop equivalent technology, that disputes will not arise as to ownership of intellectual property, or that disclosure of the Company`s trade secrets will not occur.  Furthermore, there can be no assurance that others have not obtained or will not obtain patent protection that will exclude the Company from using its trade secrets and confidential information.  Non-disclosure or confidentiality agreements would be difficult and expensive to enforce, and may not be upheld by the courts, especially those of foreign nations.  Inability to protect any patents or enforce its non-disclosure or confidentiality agreements, especially in foreign countries where much of the Company`s business may be established, could enable others to take advantage of the Company`s technology without compensation, causing it substantial economic loss.

The Company believes its competitive position in the diabetes therapy market has some strengths.  First, the Company`s Sucanon product is clinically effective and may have fewer side effects than competing products as a diabetes monotherapy.  In addition, Sucanon may also be an effective combination therapy. The President of the Company received, during calendar year 2000, two U.S. patents covering use of an insulin-sensitizing drug in a combination with a standard therapy for Type II Diabetes.  These rights, as they pertain to Sucanon, were assigned to the Company in December 2001.  Third, the Company believes that industrial processing and trade secrets are sufficient to maintain confidentiality and control over the production of Sucanon, whether patents for the product are granted or not.

Competition

The pharmaceutical and biotechnology industries are characterized by rapidly evolving technology and intense competition.  The Company anticipates that it will face increased competition in the future as new products enter the market and advanced technologies become available.  There can be no assurance that existing products or new products developed by the Company`s competitors will not be more effective, or be more effectively marketed and sold, than any that may be developed by the Company.  Competitive products may render the Company`s products obsolete and non-competitive prior to the Company`s recovering research, development or commercialization expenses incurred with respect to any such products.  The Company`s competitors include major pharmaceutical, diagnostic, chemical and biotechnology companies, many of which have financial, technical, and marketing resources significantly greater than those of the Company.  Many of the Company`s existing or potential competitors, particularly large pharmaceutical companies, also have significantly greater experience than the Company in undertaking research, preclinical studies and human clinical trials of new pharmaceutical products, obtaining FDA and other regulatory approvals, and manufacturing and marketing such products.  Accordingly, the Company`s competitors may succeed in commercializing products more rapidly or effectively than the Company, which could have a material adverse affect on the Company`s business, financial condition or results of operations.

In addition, many biotechnology companies have formed collaborations with large, established pharmaceutical companies to support research, development and commercialization of products that may be competitive with those of the Company.  Academic institutions, government agencies and other public and private research organizations are also conducting research and seeking patent protection and may commercialize products on their own or through joint ventures.  The Company is aware of certain products manufactured or under development by competitors that are used for the detection or treatment of diabetes, the markets which the Company has targeted for product commercialization.  The existence of these products, or other products or treatments of which the Company is not aware, or products or treatments that may be developed in the future, may adversely affect the marketability of products developed by the Company.

Many pharmaceutical and biotechnology companies, alone and in collaboration with larger pharmaceutical companies, have developed and are marketing, or are developing, various products for the treatment of diabetes.

There are three basic classes of existing drugs for the treatment of NIDDM: sulfonylureas, biguanides and insulin sensitizers.  Acarbose is being marketed at the present as a fourth class; however, for the purposes of this document it will be considered as similar to the biguanides.  The primary mechanism of the sulfonylurea group of drugs is to stimulate increased insulin production from the pancreas in an attempt to enhance glucose utilization.  The biguanide and acarbose group of drugs in general act to decrease glucose absorption in the digestive tract.  By comparison the insulin sensitizers act to re-sensitize the cell membrane to enhance the uptake of glucose. Some drugs frequently described as biguanides, such as metformin, also have significant insulin-sensitizing characteristics and can also be classified as insulin-sensitizers.

Other than biguanides with insulin-sensitizing action, there are, in addition to Sucanon, only two insulin sensitizers which currently have regulatory approval anywhere in the world; a third one, troglitazone (brand name "Rezulin") was withdrawn from the market world-wide due to concerns regarding liver toxicity.  Leaving asides the biguanides with insulin-sensitizing action and Sucanon, the existing insulin-sensitizers are all in the glitazone or TZD (thiazolidinendione) class and are generally described as peroxisome proliferator-activated receptor agonists ("PPAR agonists").  The main action of these agents is to enhance glucose uptake by peripheral cells.  The activity of PPAR`s is believed to be strongest in white fat tissue.  The "glitazones" have a number of side-effects reported during the trial process including increased liver dysfunction and weight gain.

The mechanism of action of Sucanon on the other hand as an insulin sensitizer is to enhance the binding of insulin to the receptor sites primarily in muscle cells, increasing the sensitivity of such cells to insulin.  This increased sensitivity results in enhanced absorption and consequently, utilization of glucose in the muscle cells.

All drugs in these classes have been shown to be effective in resolving the medical condition of high blood sugar levels; however, there is a considerable variance amongst the drug classes in the degree of side effects experienced and the long term efficacy in all patients.  It is intended that Sucanon will be marketed based on the benign nature of the drug as well as the subjective benefits associated with the increased utilization of glucose experienced during Sucanon usage.

Generally, sulfonylureas and biguanides are prescribed to NIDDM patients with serum blood glucose levels above 140 mg/dL only after dietary regimens fail to control the condition.  Diabetes Mellitus is a prolonged disease, and it is clinically difficult to administer sulfonylureas for too long a period.  The difficulties for long term use arise from a wide variety of side-effects and drug resistance.

For Sucanon, an important factor in competition may be the timing of market introduction of the Company`s or competitors` products.  Accordingly, the relative speed with which the Company`s competitors can develop products, complete the clinical trials and approval processes, and supply commercial quantities of the product to the market are key factors for competitiveness.  The Company`s competition will be determined in part by the potential indications for which the Company`s products receive approval by regulatory authorities.  The development by competitors of new treatment methods for diabetes could render the Company`s drug non-competitive or obsolete.  The Company expects that competition among products approved for sale will be based, among other things, on product efficacy, safety, reliability, availability, price and intellectual property protection.

The Company`s competitive position also depends upon its ability to secure market acceptance for its Type II Diabetes drug.  There can be no assurance that Sucanon will achieve market acceptance.  The degree of market acceptance will depend upon a number of factors, including the receipt of regulatory approvals, the establishment and demonstration in the medical community of the clinical efficacy and safety of Sucanon, and the establishment and demonstration of the potential advantages over existing and new treatment methods and reimbursement policies of government and third party payors.  There can be no assurance that physicians, patients, payors or the medical community in general will accept and utilize Sucanon.  Additionally, the Company`s competitive position depends upon its ability to attract and retain qualified personnel, obtain patent or other proprietary protection, establish collaborative relationships and secure manufacturing.

As noted above in reference to TZD drugs, the principal competitors to Sucanon for diabetes therapy are "Avandia" from GlaxoSmithKline and "Actos" from Eli Lilly.  The Company believes that its Sucanon product will be able to compete effectively in the marketplace based on studies that have been carried out showing that Sucanon is clinically effective and may have fewer side effects than the competitor drugs.

Government Regulation

Regulation by governmental authorities in Canada, the United States and other countries is a significant factor in the production and marketing of Sucanon and the Company`s ongoing research and development activities. Sucanon has received approval for sale in China, Peru and Mexico. In November 3, 2003 the Company announced that it received formal written approval from the Mexican national regulator for the sale of Sucanon in Mexico.

Pharmaceutical and biological products intended for therapeutic or prophylactic use for humans are governed by the FDA in the United States, by the Health Protection Branch ("HPB") in Canada and by comparable agencies in other countries.  For most of these products, the regulations require extensive clinical trials and other testing and government review and final approval prior to marketing the product.  This procedure is likely to take a number of years and involves the expenditure of substantial resources.  For example, before obtaining regulatory approval for the commercial sale of Sucanon in Canada and the United States, the Company must demonstrate through preclinical studies and clinical trials that the product is safe and efficacious.  The results from the Company`s preclinical studies and early clinical trials may not be predictive of results obtained in large-scale clinical trials, and there can be no assurance that the Company`s or its collaborators` clinical trials will demonstrate safety and efficacy even though the results indicating safety and efficacy were achieved in human clinical trials results in China.  There can be no assurance that regulatory approval will be received for any countries other than those already received (China, Peru and Mexico).  A number of companies in the biotechnology industry have suffered significant setbacks in advanced clinical trials, even after achieving promising results in earlier trials.  In addition, government regulations specify standards for manufacturing and marketing pharmaceutical products.  Any failure by the Company or its collaborators or licensees to obtain, or any delay in obtaining, regulatory approvals, could adversely affect the marketing of Sucanon and its ability to receive product or royalty revenue.  There can be no assurance that Sucanon will be approved by the FDA, HPB or any other government agency on a timely basis, if at all.

Sales of therapeutic products outside Canada and the United States are subject to regulatory requirements that vary widely from country to country.  Whether or not FDA or HPB approval has been obtained, final approval of a product by comparable regulatory authorities of other countries must be obtained prior to the commencement of marketing the product in those countries.  The time required to obtain any such approval may be longer or shorter than that required by FDA or HPB approval.

International Operations

It is management`s intention that marketing of Sucanon will be conducted through a partnership with either local distributors or through the creation of a strategic alliance with a large multi-national pharmaceutical company.  To that end, management of the Company has had preliminary discussions with a number of multi-national corporations.  These discussions have involved licensing of the product for distribution in selected areas of the world.  The Company has also received a number of enquiries from distribution firms around the world with respect to the licensing of this drug.  The Company is taking contact with potential national distributors in Latin American countries and elsewhere in the world that may be interested in purchasing Sucanon pre-mix and producing, packaging, marketing  and distributing Sucanon tablets in their own markets.

Most of the Company`s sales of Sucanon are expected to be made in international markets.  The Company will require regulatory approval prior to undertaking sales activity in a particular country.  Sales of Sucanon in international markets are subject to certain risks common to such sales, including government regulation, export and import license requirements, risks of tariffs or trade barriers and political and economic instability.  There can be no assurance that these risks will not materially adversely affect the Company in the future.

The Company expects to price sales of its products in the currency of the country in which it is sold.  Accordingly, the prices of its products in Canadian dollars will vary as the value of the Canadian dollar fluctuates against such local currencies.  In addition, any royalty payments to be made to the Company will be made as a percentage of sales denominated in the currency of the country where sales are made.  There can be no assurance that there will not be increases in the value of the Canadian dollar against such currencies, reducing the Canadian dollar return to the Company on the sales of its products.  Furthermore, there can be no assurance that significant fluctuations in foreign currency values will not occur that will create sufficient differences in the relative prices of the products in different countries, such that the Company will find it necessary to reduce its prices in certain local currencies in order to bring the relative cost of its products into line.  Although the Company may seek to implement hedging techniques with respect to its foreign currency transactions in the future, it does not currently do so, and there can be no assurance that such techniques, if employed, would be successful.

In Mexico, where the Company initiated sales of Sucanon in the first quarter of fiscal 2006, distribution and marketing of Sucanon under the trade name Sucanon has been carried out by an independent Mexican marketing group. The Company opened an office in Mexico to co-ordinate the marketing efforts and the supply of Sucanon to the market in Mexico.  The Company does not plan to be involved in the sales and marketing of Sucanon in other Latin American countries and plans to engage the services of third-party marketing companies to achieve its distribution and marketing goals.

Product Liability

The use of any of the Company`s products in clinical trials, and the sale of any approved products, may expose the Company to liability claims resulting from the use of its products.  These claims might be made directly by consumers, healthcare providers or by pharmaceutical companies or others selling such products.  The Company currently has liability insurance which includes all products sold by the Company in Canada and the United States.  The Company`s product liability insurance does not cover liability claims with respect to clinical trial products or for any product sold by Volque.  There can be no assurance that the Company will be able to obtain or maintain sufficient, commercially reasonable product liability insurance for any products approved for marketing.  A product liability claim brought against the Company could have a material adverse effect on its business, financial condition or results of operations.

C.   Organizational Structure

The following table provides details of the Company`s significant present subsidiaries:

|                                                                    |                |             | Percent     | Biotech`s  
|------------------------------------------------------------------- | -------------- | ----------- | ----------- | -----------
|                                                                    |                | Percent     | of Direct   | Proportion 
|                                                                    | Country of     | of Direct   | & Indirect  | of Voting  
|Subsidiary Name                                                     | Incorporation  | Ownership   | Ownership   | Power      
|                                                                    |                |             |             |            
|Biotech Laboratories Inc.                                           | Canada         | 100.0%      | 100.0%      | 100.0%     
|401718 B.C. Ltd. (formerly                                          |                |             |             |            
|Biotech Holdings Inc.)                                              | Canada         | 100.0%      | 100.0%      | 100.0%     
|314202 B.C. Ltd                                                     | Canada         | 100.0%      | 100.0%      | 100.0%     
|Volkspharm Healthcare Incorporated                                  | Canada         | 0.0%        | 37.5%       | 50.0%      
|Volque Pharmaceutical Company Ltd.
Smith Rothe Pharmaceutical, Inc. | China
Barbados | 40.0%
75.0% | 59.1%
75.0% | 59.1%
75.0%
|                                                                    |                |             |             |            

During the year ended March 31, 2006, Smith Rothe incorporated an operating company in Mexico, Pharmaroth Latin America S.A. de C.V. to co-ordinate the production and marketing of Sucanon in Mexico.

D. Description of Property

Manufacturing Facility

In January, 2004 the Company leased a location in the Vancouver, BC area, totaling approximately 2,400 square feet, for housing equipment and facilities for production of pre-mix powder for Sucanon, which is at present the Company`s sole product.

The equipment in the former manufacturing facility was moved out of the former production facilities and equipment not related to the production of the Type II Diabetes drug has been stored and is held for resale.  The proceeds from the equipment sale will be applied to secured outstanding debts of the Company.

There are a number of related-party notes payable issued which have been collateralized by the assets of this facility totaling approximately $2.415 million (2007: $1.533 million).  (See Note 4 of the Consolidated Financial statements attached.)

Tableting, Filling and Packaging

When the Company discontinued its lotions and creams operation in fiscal 2003, the Company retained critical pieces of equipment for manufacture of Sucanon pre-mix powder and for quality control of ingredients and the final product.  This equipment, plus the subsequent purchases of additional equipment is adequate to meet production  requirements of Sucanon in the Mexico and other Latin American markets.

Sales and Administration Office

The sales and administration office is a 2,600 square foot leased premises located in suburban Vancouver.  The use of this office is expected to be meet the Company`s requirements at least for the next three years.

Item 5 Operating and Financial Review and Prospects

A. Operating Results

US Generally Accepted Accounting Principles

The Consolidated Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in Canada ("Canadian GAAP").  Differences with generally accepted accounting principles in the United States ("U.S. GAAP"), are set forth in Note 18 to the Consolidated Financial Statements of the Company (Item 17 of this Form 20F).  Some accounting policies have a significant impact on the amounts reported in these financial statements. The Consolidated Financial Statements includes a section describing the Company`s significant accounting policies

Year Ended March 31, 2008 Compared

With Year Ended March 31, 2007

Operating Results

Revenues from the sale of Sucanon in the year ended March 31, 2008 were $370,419 which resulted in a Gross Profit of $219,908.  The revenues in the year ended March 31, 2007 were $336,595 and the Gross Profit was $224,847.  Annual revenues increased by $33,824 or 10% over 2007 and the Gross Profit decreased by $4,939 or 2.2% over 2007.

There was a significant increase in the Canadian dollar against both Mexican peso and the US Dollar.  The Company`s Mexican subsidiary reports in US dollars but had purchases and sales in Mexican pesos.  The average exchange rate between the US Dollar and the Canadian dollar declined from $1.1388 in the year ended March 31, 2007 to $1.0330 in the year ended March 31, 2008 and the year end rate fell from $1.1559 to $1.0232.  This factor was the most significant cause of the revenue decline.  The Company shipped approximately 15% more packages of Sucanon in the year ended March 31, 2008 than in 2007.   The Gross Profit declined in relation to Revenues because a significant portion of these expenses were incurred in Canada and were not cushioned by the Canadian dollars strengthening in relation to the peso and the US Dollar.

Operating expenses totaled $1,626,071 representing a $332,765 (17.0%) decrease from the $1,958,836 expenses incurred in the year ended March 31, 2007.

Amortization declined from $436,446 in 2007 to $12,772.  Technology interests were fully amortized in 2007 which accounted for the $423,674 decline.

Interest expenses increased from $96,833 to $177,524 (83.3%) due to the increased borrowing from related parties that was required to finance the operations.

Stock based compensation increased from $283,383 to $351,677 (24.1%) in the year due to the options granted and fully vested in the year.

Professional fees decreased from $112,800 to $68,912 because the 2007 amount includes the audit fees for 2006 plus a $50,000 accrual for the current audit.

Operating expenditures include $240,965 (2007 - $321,426) in product marketing costs.

The net loss for the year ended March 31, 2008 was $1,406,163 (2007: $1,534,895) and the loss per common share was $0.02 in 2008 and $0.02 in 2007.

Financial Highlights

The loss from operations for the year ended March 31, 2008 was $1,406,163 (2007: $1,733,989) and after adding back non-cash items, Operations used $767,357 (2007: $837,255).  The $757,993 (2007: $793,616) increase in due to related parties provided financing to maintain operations.  There were 8,600 (2007: Nil) shares issued during the 2008 fiscal year for $860.

The Company has incurred recurring operating losses and has an accumulated deficit of $32,679,973 and a Shareholders` Deficiency of $4,062,637 at March 31, 2008.  These factors, among others, raise doubt about the Company`s ability to be able to continue as a going concern.  The future of the Company and the realization of its asset values will depend upon the Company`s ability to obtain adequate financing and continuing support from shareholders and creditors including refinancing and to attain profitable operations.

Management plans to raise debt and equity capital on a private placement basis to finance the operating and capital requirements of the Company.  It is management`s intention to continue using debt and equity to finance planned capital expansion and initial market development in Mexico and Latin America and other markets and operations until such time as the Company`s operations are self-sustaining.

While the Company is expending its best efforts to achieve the above plans, there is no assurance that any such activity will generate sufficient funds for operations.

As at March 31, 2008, the Company had cash and deposits totaling $14,854.

Year Ended March 31, 2007 Compared

With Year Ended March 31, 2006

Revenues from the sale of Sucanon in the year ended March 31, 2007 were $336,595 which resulted in a Gross Profit of $224,847.  The revenues in the year ended March 31, 2006 were $482,840 and the Gross Profit was $335,553.  Management is disappointed with the $146,245 (30.2%) decline in revenues in comparison with the prior year.  The following factors contributed to the decline:

Because the Company had had future performance obligations to meet prior to recognizing initial sales, revenues in the prior year included $50,278 in shipments made in the period from December 2004 to March 31, 2005;

Revenues in the year ended March 31, 2006 included initial orders from retailers which, by their nature, are larger than repeat orders;

The Company severely constrained its advertising during the quarter as it had a lack of capital partially caused by its not trading on the Company`s exchange in Canada.  This factor severely impacted sales.  Trading in the Company`s shares resumed in August 2006.

The Company had a dispute with its independent marketing Company since early 2006 due to the latter`s under-performance.  In September 2006, the Company assumed the responsibility for the marketing of Sucanon in Mexico.  The marketing company continues to sell Sucanon to the customers that it introduced during 2005.

As is discussed below, with the change in marketing efforts and the resumption of advertising, revenues in the quarter ended December 31, 2006 rebounded and this trend continued through the fourth quarter.

Operating expenses totaled $1,958,836 representing a $490,319 (20.0%) decrease from the $2,449,155 expenses incurred in the year ended March 31, 2006. Amortization declined from $610,112 in 2006 to $436,446.  Technology interests were fully amortized in the year which accounted for the $173,666 decline.

Stock based compensation decreased from $366,277 to $283,383 in the year after considering the prior period adjustment to stock-based compensation.

Professional fees increased from $64,728 to $112,800 because the 2007 amount includes the audit fees for 2006 and a $50,000 accrual for the current audit.

Operating expenditures include $321,426 (2006 - $571,985) in product marketing costs. In the first 3 quarters of the fiscal year ended March 31, 2006, these expenditures were included in amounts receivable because they were considered to be advances to the marketing company for advertising and were wholly repayable once sales levels reached a certain contracted level.  During the 2006 year-end audit, management and the audit committee met to review developments with regard to these amounts.  This review led to a determination to expense a significant portion ($571,985) of these advances in the quarter ended March 31, 2006

The net loss for the year ended March 31, 2007 was $1,534,895 (2006: $2,019,378) and the loss per common share was $0.02 for both periods.

Financial Highlights

The loss from operations for the year ended March 31, 2007 was $1,733,989 (2006: $2,095,602) and after adding back non-cash items, Operations used $837,255 (2006: $1,140,259).  The $793,616 (2006: $151,212) increase in due to related parties provided financing to maintain operations.  There were no shares issued during the 2007 fiscal year, however, the Company raised a net of $573,786 in cash through the issuance of shares through private placements and stock options during the 2006 fiscal year.

The Company has incurred recurring operating losses and has an accumulated deficit of $31,273,810 and a Shareholders` Deficiency of $3,009,011 at March 31, 2007.  These factors, among others, raise doubt about the Company`s ability to be able to continue as a going concern.  The future of the Company and the realization of its asset values will depend upon the Company`s ability to obtain adequate financing and continuing support from shareholders and creditors including refinancing and to attain profitable operations.

Management plans to raise debt and equity capital on a private placement basis to finance the operating and capital requirements of the Company.  It is management`s intention to continue using debt and equity to finance planned capital expansion and initial market development in Mexico and Latin America and other markets and operations until such time as the Company`s operations are self-sustaining.

While the Company is expending its best efforts to achieve the above plans, there is no assurance that any such activity will generate sufficient funds for operations.

As at March 31, 2007, the Company had cash and deposits totaling $23,358.

Foreign Currency Fluctuations

The Company`s main source of revenues and purchases are from Canada and the United States.  During the 2008 fiscal year there was a significant increase in the Canadian dollar against both Mexican peso and the US Dollar.  The Company`s Mexican subsidiary reports in US dollars but had purchases and sales in Mexican pesos.  The average exchange rate between the US Dollar and the Canadian dollar declined from $1.1388 in the year ended March 31, 2007 to $1.0330 in the year ended March 31, 2008 and the year end rate fell from $1.1559 to $1.0232.  This factor was the most significant cause of the revenue decline.  The Company shipped approximately 15% more packages of Sucanon in the year ended March 31, 2008 than in 2007.   The Gross Profit declined in relation to Revenues because a significant portion of these expenses were incurred in Canada and were not cushioned by the Canadian dollars strengthening in relation to the peso and the US Dollar.

Legal Proceedings

On December 12, 2002, the Company filed a proposal under federal creditor protection legislation in Canada.  The purpose of the filing of the proposal was to protect the interests of all stakeholders of the Company from an action taken by the landlord of Laboratories.  The lease of the plant was in the Company`s name.  The landlord in question undertook to seize Laboratories assets and the filing of the proposal prevented the landlord`s seizure from continuing.

On May 21, 2003, both the Company and Laboratories received approval from the Supreme Court of British Columbia in the matter of two proposals regarding its creditors pursuant to the Bankruptcy and Insolvency Act of Canada.  These proposals, accepted by the required majority of creditors, allows for the operating subsidiary to maintain operations and generate funds from those operations to pay a portion of its pre-proposal liabilities.  Under the proposal, preferred creditors shall be paid in full in priority to all claims of unsecured creditors.  Provision for payment of claims of unsecured creditors shall be made in the lesser amount of 10% and $25,000 on each day, which is one year, one year six months and two years, respectively, after the end of the month of court ratification.  The proposals also allow the companies to provide ongoing business to its suppliers.  Creditors of the subsidiary after the filing of the proposal will be paid in full, in priority to preferred and general unsecured creditors.

In July 2006 the trustee acting in the proposal of the Company filed a certificate with the Supreme Court of British Columbia that certified that the Company had fully performed its obligations required under the proposal.  At the same time, the trustee acting in the proposal of Biotech Laboratories Inc. filed a notice of default with the Supreme Court of British Columbia stating that the creditors could take proceedings to place Biotech Laboratories Inc. in bankruptcy at their own expense.

The Company is the subject of legal disputes arising from the normal course of business.  In 1998, Cheron Holdings Ltd., one of Holdings` previous suppliers, filed a claim against Biotech Holdings Inc. in B.C. Supreme Court, Kamloops Division, for $711,000 which exceeds the payable amount on Holdings` books by approximately $250,000.  This supplier is claiming non-payment of outstanding amounts.  Management has issued a $1 million counter claim to this suit. On September 11, 1998 Holdings sold the operational assets to Biotech Laboratories Inc., another subsidiary of Biotech, in exchange for the assumption of $2,000,000 in collateralized debts on the books of Holdings.  This action was taken in order to continue operations until settlement of both the claim and the counter suit.  The operations of Holdings are now being carried on by Laboratories. The outcome of the legal disputes is not determinable; however, in the opinion of management, they would not have a material adverse financial impact on the Company.  There has been no legal activity on this claim since the filing of the Company`s $1 million counter claim.

Governmental, Economic, Fiscal and Political Influences

None of the above influences have materially affected the operations of the Company in the past.  Canada is an original partner in the North American Free Trade Agreement (NAFTA) and as a result enjoys the economic benefits that this agreement provides.

B. Liquidity and Capital Resources

As referred to previously, the Company has incurred operating losses in each of the last three fiscal years and has an accumulated deficit of $32,679,973 and a Shareholders` Deficiency of $4,062,637 at March 31, 2008.  These factors, among others, raise substantial doubt about the Company`s ability to be able to continue as a going concern.  The future of the Company and the realization of its asset values will depend upon the Company`s ability to obtain adequate financing and continuing support from shareholders and creditors including refinancing and to attain profitable operations.

Management plans to raise debt and equity capital on a private placement basis to finance the operating and capital requirements of the Company.  It is management`s intention to continue using debt and equity to finance planned capital expansion and initial market development in Latin America and other markets and operations until such time as the Company`s operations are self-sustaining.

The loss from operations for the year ended March 31, 2008 was $1,406,163 (2007: $1,733,989) and after adding back non-cash items, Operations used $767,357 (20076: $837,255).  The $757,993 (2007: $793,616) increase in due to related parties provided financing to maintain operations.  There were 8,600 shares issued during the 2008 fiscal year (2007: Nil) for $860.

As at March 31, 2008, the Company had cash and deposits totaling $14,854.

Commitments for Capital Expenditures

The Company has not made any material commitments for capital expenditures during the year or during the subsequent interim period.

Research and Development

Research expenditures are expensed in the year in which they are incurred.  The Company did not incur any drug related research costs during the fiscal years 2006 to 2008.

It is the Company`s policy to defer all costs that relate to the development of new products where management is satisfied as to the technological, commercial and financial viability of individual products.  These costs are amortized on a straight-line basis over a five year period.  All deferred development costs were fully amortized in the year ended March 31, 2005 and no additional amounts were capitalized.

D.     Trend Information

The Company intends to maintain fixed monthly overhead in the $120,000 range during the balance of the 2008 fiscal year while focusing on advancing Sucanon production and distribution primarily on markets in Latin America. Maintenance of overhead at these relatively low levels is expected to be achieved by limiting any expansion of overhead at the head office in Vancouver and the subsidiary office in Mexico City while sub-contracting sales and marketing to arms` length companies in the Latin American markets where Sucanon is planned to be launched as part of the ongoing expansion of Sucanon distribution.

Mexico, where Sucanon is currently distributed, is the eighth-largest pharmaceutical market in the world by dollar value.  In June 2007, the Company signed an agreement for distribution of Sucanon in four other Latin American markets, specifically Colombia, Peru, Ecuador and Costa Rica, all of which have the elevated prevalence of Type II Diabetes that typifies Latin America.

In October 25, 2007, the Company announced that it signed an agreement with a private company based in El Salvador for marketing and distribution of its Sucanon Type II diabetes drug in four Central American countries, Guatemala, Honduras, Nicaragua and El Salvador.  The four new markets targeted in connection with this agreement have a total population of approximately 33 million people, with an estimated 775,000 cases of Type II Diabetes in the region. The Central American markets will be served by Sucanon deliveries from the Company`s contract-packager, based in Mexico City.  The distributor will co-ordinate its advertising in the Central American region with advertising arranged by Biotech`s office in Mexico.

In November 26, 2007, the Company announced that it signed an agreement with a private company for marketing and distribution of its Sucanon Type II diabetes drug in the United Arab Emirates (the UAE) including Dubai.

There is no assurance that regulatory approval will be obtained in any specific market nor any assurance that sales, once begun, will be material.

In all of these countries, the Company intends to submit essentially the same regulatory information that has led to regulatory approval in Mexico.  Given that sales in these markets are projected to have relatively high profit margins, entry into these markets would likely have a significantly positive effect on both the Company`s revenues and its bottom line.

The Company has been working to also open markets in Argentina, Brazil and Chile.

Item 6 Directors, Senior Management and Employees

Directors , senior management and key employees

The following is a list of the current directors, senior officers and key employees of the Company, their municipalities of residence, their current position with the Company and their principal occupations during the past five years:

|Name and Municipality of | Positions and Offices Held                 | Principal Occupation                                 
|------------------------ | ------------------------------------------ | -----------------------------------------------------
|Residence                | with the Corporation                       |                                                      
|                         |                                            |                                                      
|Robert B. Rieveley       | President and Chief                        | President and Chief Executive Officer of Biotech     
|Vancouver, BC            | Executive Officer, director                | Holdings Ltd.,  President of Biotech Laboratories    
|                         | and member of the audit                    | Inc., Vancouver, BC, Canada. Regrettably, Mr
Rieveley
|                         | Committee since 1995                       | passed away in September 2008.                       
|                         |                                            |                                                      
|Johan de Rooy, FCA       | Director and Chairman of                   | Retired lecturer in the Faculty of Commerce and      
|Vancouver, BC            | the Audit Committee since                  | Business Administration at the University of British 
|                         | 1998                                       | Columbia. He has served as a National Director       
|                         |                                            | for the Canadian Cancer Society, as the President    
|                         |                                            | of the British Columbia Cancer Agency and as a       
|                         |                                            | Member of Council for the Institute of Chartered     
|                         |                                            | Accountants of B.C.                                  
|                         |                                            |                                                      
|Gale Belding             | Executive Vice-President                   | Executive Vice-President of Biotech Holdings Ltd.    
|Vancouver, BC            | and director since 1995                    |                                                      
|                         |                                            |                                                      
|Cheryl Rieveley          | Director since 1995                        | Secretary/Treasurer of the Company and RCAR          
|Vancouver, BC            |                                            | Investments Limited, Vancouver, BC                   
|                         |                                            |                                                      
|Art Cowie                | Director.  Appointed by the                | Planning Consultant (community planner), for         
|Vancouver, BC            | Directors and approved by the              | professional firms, private and government clients.  
|                         | TSX Venture Exchange                       | Additionally, he has experience in public service on 
|                         | (February 22, 2006) to fill a              | private and public planning issues and served as     
|                         | vacancy created by the                     | Chair of the Vancouver Port Authority and as         
|                         | resignation of Dr. Geoff                   | director for the Pacific National Exhibition and Su  
|                         | Herring                                    | Sungold International Holding Corp. Former MLA for   
|                         |                                            | British Columbia.                                    
|                         |                                            |                                                      
|Lorne Brown              | Chief Financial Officer since              | Chief Financial Officer for the Company, prior       
|Langley, BC              | June, 1999. Appointed Interim              | thereto Controller and Director A&A International    
|                         | Chief Executive Officer
  September, 2008, | Industries Inc., Port Coquitlam, BC.                 

There are no arrangements or understandings between any of the officers or directors of the Company as to their election or employment, and no family relationships other than Robert and Cheryl Rieveley, who are husband and wife.

B.    Compensation of Directors and Officers

The Company does not pay any cash compensation to directors in their capacity as directors.

The compensation paid to the Company`s directors, officers and senior management during the fiscal period ended March 31, 2008 was $319,239.

In addition to the foregoing, all of the executive officers of the Company are also entitled to reimbursement of all reasonable business expenses and, from time to time, the grant of stock options (see "Options to Purchase Securities from Company or Subsidiaries - Stock Options", below).

No plan exists, and no amount has been set aside or accrued by the Company or any of its subsidiaries, to provide pension, retirement or similar benefits for directors and officers of the Company, or any of its subsidiaries.

Other than as herein set forth, the Corporation did not pay any additional compensation to the executive officers or directors (including personal benefits and securities or properties paid or distributed, which compensation was not offered on the same terms to all full time employees) during the last fiscal year.

C    Board Practices

The directors of the Company are elected by the shareholders at each Annual General Meeting and typically hold office until the next Annual General Meeting at which time they may be re-elected or replaced.

The articles of the Company permit the directors to appoint directors to fill any vacancies that may occur on the board.  The articles of the Company also permit the directors to add additional directors to the board between successive Annual General Meetings so long as the number appointed does not exceed by more than one third of the number of directors appointed at the last Annual General Meeting.  Individuals appointed as directors to fill vacancies on the board or added as additional directors hold office like any other director until the next Annual General Meeting at which time they may be re-elected or replaced.

Stock options were the only form of directors compensation in fiscal 2007 (see "Options to Purchase Securities from Company or Subsidiaries - Stock Options").  No stock options were exercised by directors or officers during the year ended March 31, 2008.

Apart from the above, the Company does not have any service contracts with any Director or provide any benefits upon termination of employment.

The Company`s audit committee consists of two independent Directors Mr. Johan de Rooy, FCA, Committee Chairman, and Mr. Art Cowie together with Mr. Robert Rieveley, the Company`s President and Chief Executive Officer.  The audit committee meets with the Company`s independent auditors annually where the role and responsibilities of both the auditor and the committee are reviewed.  The independent Directors also meet with the auditor separately from management to discuss any outstanding issues.  The Committee also meets on a quarterly basis to review and discuss the quarterly financial statements.  All financial statements are approved by the Committee and their recommendations for approval are passed on to the Board of Directors for final approval.

The Company`s Compensation Committee consists of the two independent Directors and
the C.E.O.  The charter of the Committee is as follows:

Biotech Holdings Ltd. (the "Company")

Compensation Committee

The Compensation Committee`s Mandate is to report to and to assist the Board in carrying out its responsibilities by reviewing compensation and human resources issues and making recommendations and/or reports to the Board. Because of the small size of the Company and the Board, the responsibilities of the Committee are:

Annually review the compensation packages for the officers of the Company;

On an on-going basis, review any salary, budget, and succession recommendations from the C.E.O.;

Negotiate and set the compensation package for any new officer hired by the Company.

The Committee will set its owns terms of reference for the above, as they see fit, depending on the resources of the Company.

Composition

a.	The Committee shall consist of at least three directors.  Members of the Committee shall be appointed by the Board after each Annual General Meeting and may be removed by the Board at its discretion.

b.	To the extent possible, the majority of the members shall be independent directors.

c.	The members of the Committee shall elect a Chairman from among their number.

d.	The Committee shall appoint one member to act as Secretary.

Quorum

Because of the small size of the Committee, all three directors must be present at each meeting in order to have a quorum.

Meetings

Meetings should be held at least semi-annually or may be called by a director if necessary. There should be 48 hours notice given, with the agenda prepared by the Chair of the Committee.

D    Employees

At March 31, 2008 the Company had 5 (2007- 5; 2005- 5) employees in Canada and 3 in Mexico (2007- 3; 2006 - 3).  Temporary employees are periodically required in periods of high volume production.  The Company is not unionized.

E    Share Ownership

The following is a list of Common Shares held by the directors, officers and employees referred to in Item 6 A. above as at August 22, 2008 (the Company`s record date for its Annual General Meeting):

|Directors, Officers and
Employees      | Common     | Percent | Series I    | Percent   | Total         | Percent
|-------------------------------------- | ---------- | ------- | ----------- | --------- | ------------- | -------
|                                       | Shares     | of      | Convertible | of        | Voting        | of     
|                                       | Held       | Common  | Preferred   | Preferred | Shares Held   | Voting 
|                                       | or         | Shares  | Shares      | Shares    | or Controlled | Shares 
|                                       | Controlled |         | Held        |           |               |        
|                                       |            |         |             |           |               |        
|Robert Rieveley, C.E.O. (1)            | 20,336,531 | 22.0%   | 13,806,907  | 100.0%    | 34,143,438    | 32.2%  
|Gale Belding, Director, Executive V.P. | 310,000    | 0.3%    |             |           | 310,000       | 0.3%   
|Johan de Rooy, Director                | 1,742,600  | 1.9%    |             |           | 1,742,600     | 1.6%   
|Art Cowie, Director                    | 55,000     | 0.1%    |             |           | 55,000        | 0.1%   
|Cheryl Rieveley, Director (1)          | 0          | 0.0%    |             |           | 0             | 0.0%   
|                                       |            |         |             |           |               |        
|Lorne Brown, C.F.O.                    | 50,000     | 0.1%    |             |           | 50,000        | 0.0%   
|                                       |            |         |             |           |               |        
|Total Held                             | 22,494,131 | 24.4%   | 13,806,907  | 100.0%    | 36,301,038    | 34.2%  
|                                       |            |         |             |           |               |        
|Shares outstanding at Record Date      | 92,238,112 |         | 13,806,907  |           | 106,045,019   |        

(1)  Shares held directly and indirectly by the Rieveley Family Trust.  Robert and Cheryl Rieveley are directors and officers of Biotech Holdings Ltd. They also have a beneficial interest in the Rieveley Family Trust which is owed over
$2.1 million.

The following table provides a list of stock options outstanding, granted, exercised and expired during the year ended March 31, 2008:

|          |           |           |              |             |                  |            |            |              |            
|--------- | --------- | --------- | ------------ | ----------- | ---------------- | ---------- | ---------- | ------------ | -----------
|          |           |           |              |             | ---------------- | Directors  | & Officers | Only-------- |            
|Grant     | Vest      | Expiry    | Option       | Total       | Directors        | Expired or | Granted    | Directors    | Total      
|Date      | Date      | Date      | Price        | Outstanding | & Officers       | Cancelled  | in Year    | & Officers   | Outstanding
|          |           |           |              | 31-Mar-07   | Outstanding      | in Year    |            | Outstanding  | 31-Mar-08  
|          |           |           |              |             | 31-Mar-07        |            |            | 31-Mar-08    |            
|24-Nov-04 | 24-Apr-07 | 24-Mar-08 | $     0.550  | 1,190,000   | 900,000          | 900,000    |            | 0            | 0          
|22-Feb-06 | 22-Jun-06 | 22-Feb-08 | $     0.135  | 300,000     | 300,000          | 300,000    |            | 0            | 0          
|23-Jun-06 | 22-Oct-06 | 22-Jun-08 | $     0.160  | 896,000     | 560,000          |            |            | 560,000      | 896,000    
|23-Jun-06 | 22-Oct-06 | 22-Jun-08 | $     0.100  | 545,000     | 430,000          |            |            | 430,000      | 536,400    
|26-Jun-06 | 26-Oct-06 | 25-Jun-08 | $     0.100  | 300,000     | 300,000          | 300,000    |            | 0            | 0          
|23-Nov-06 | 23-Mar-07 | 23-Nov-08 | $0.10 USD    | 275,000     | 0                |            | 0          | 0            | 275,000    
|12-Apr-07 | 12-Oct-07 | 12-Apr-09 | $      0.110 | 0           | 0                | 200,000    | 4,310,000  | 4,110,000    | 4,834,000  
|          |           |           |              |             |                  |            |            |              |            
|          |           |           |              | 3,506,000   | 2,490,000        | 1,700,000  | 4,310,000  | 5,100,000    | 6,541,400  



A breakdown of outstanding options as at March 31, 2008 to Directors and Officers was as follows:



| | Grant Date      |                   | 23-Jun-06 | 23-Jun-06 | 12-Apr-07 |  |          
| | --------------- | ----------------- | --------- | --------- | --------- |  | ---------
| | Exercise Date   |                   | 22-Oct-06 | 22-Oct-06 | 12-Oct-07 |  |          
| | Expiry Date     |                   | 22-Jun-08 | 22-Jun-08 | 12-Apr-09 |  |          
| | Option Price    |                   | $0.16     | $0.10     | $0.11     |  | Total    
| |                 |                   |           |           |           |  |          
| | Cheryl Rieveley | Director          | 90,000    | 70,000    | 340,000   |  | 500,000  
| | Gale Belding    | Director          | 0         | 70,000    | 430,000   |  | 500,000  
| | Johan de Rooy   | Director          | 90,000    | 50,000    | 360,000   |  | 500,000  
| | Robert Rieveley | Director & C.E.O. | 190,000   | 150,000   | 2,660,000 |  | 3,000,000
| | Art Cowie       | Director          | 0         | 50,000    | 150,000   |  | 200,000  
| | Lorne Brown     | C.F.O.            | 190,000   | 40,000    | 170,000   |  | 400,000  
| |                 |                   |           |           |           |  |          
| | TOTAL           |                   | 560,000   | 430,000   | 4,110,000 |  | 5,100,000

There are no arrangements involving the employees in the capital of the Company, including any arrangement involving the issue or granting of options or shares or securities of the Company.

Private Placements and Common Share Warrants

There were no private placements issued during the year ended March 31, 2008.

During the year ended March 31, 2006, the Company completed with related party investors ("the Investors") a private placement of 2,020,202 common shares for gross proceeds of $621,181 cash (net proceeds of $556,536 after a finders fee of $64,645).  The Investors also received 2,020,202 warrants to acquire common shares at $ 0.40 per share, expiring on October 6, 2006.

Warrants to Purchase Common Shares

The following table summarizes the number of fully exercisable common share warrants outstanding and the exercise price thereof:

| |                                  |  | 2008 |  | 2007        |  | 2006       
| | -------------------------------- |  | ---- |  | ----------- |  | -----------
| |                                  |  |      |  |             |  |            
| | Outstanding, beginning of year   |  | -    |  | 3,548,682   |  | 3,244,146  
| | Issued at $0.400 per share       |  |      |  |             |  |            
| | expiring October 6, 2006         |  | -    |  | -           |  | 2,020,202  
| | Expired January 27, 2006 $0.375  |  | -    |  | -           |  | (1,715,666)
| | Expired October 6, 2006 $0.400   |  | -    |  | (2,020,202) |  |            
| | Expired December 16, 2006 $0.550 |  | -    |  | (1,528,480) |  | -          
| | Outstanding, end of year         |  | -    |  | -           |  | 3,548,682  

There were no outstanding warrants to purchase common shares at March 31, 2008.

Preferred Shares and Outstanding Warrants

At March 31, 2007 and 2006, 13,806,907 convertible preferred shares were outstanding from the exercise of preferred share warrants during 2004.  No cash dividend has been declared to date.  However, the 8% per annum dividend on these shares for the year ended March 31, 2008 would have amounted to $110,455 (2007: $110,455; 2006: $110,455).  The cumulative effect to March 31, 2008 of the dividend at 8% per annum from date of issuance would have amounted to $509,720.  This would have an insignificant effect on net loss or on basic and diluted loss per share.

No preferred share purchase warrants were outstanding or exercisable as of March 31, 2008, 2007 or 2006.

Item 7 Major Shareholders and Related Party Transactions

A    Major Shareholders

On December 14, 1995, the shareholders of Conserve, now the Company, approved the acquisition of Holdings.  Control of the Company changed upon the closing of the share exchange on January 25, 1996 (see Exhibit 3.1 previously filed with the March 31, 1996 Form 20F).  With the issuance of 15,000,000 of a total of 18,241,665 common shares, the shareholders of Holdings then held approximately 82% of the issued and outstanding shares of the Company.  As at the Annual General Meeting ("AGM") record date (August 22, 2008), the Company had a total of 92,238,112 (2007: 92,238,112) common shares issued and outstanding. Also, there were 13,806,907 Series I Convertible Preferred Shares issued and outstanding on March 31, 2007 and 2006.  These preferred shares are voting and are convertible into Common Shares on a 1:1 basis.  They have a cumulative cash dividend of 8% of the original amount contributed plus accrued interest.

|Class of Shares     |                          | Shares Owned  | Percent of  | Percent Held | Percent Held
|------------------- | ------------------------ | ------------- | ----------- | ------------ | ------------
|                    |                          | Aug. 22, 2008 | Class       | In 2007      | In 2006     
|                    |                          |               |             |              |             
|Common              | Rieveley Family Trust    | 20,336,531    | 22.0%       | 22.0%        | 22.1%       
|                    |                          |               |             |              |             
|                    | Total Outstanding Shares |               |             |              |             
|                    | as of AGM record date    | 92,238,112    | 92,238,112  | 92,238,112   | 92,229,512  
|                    |                          |               |             |              |             
|Preferred           | Rieveley Family Trust    | 13,806,907    | 100.0%      | 100.0%       | 100.0%      
|                    |                          |               |             |              |             
|Total Voting Shares | Rieveley Family Trust    | 34,143,438    | 32.2%       | 31.5%        | 31.5%       
|                    |                          |               |             |              |             
|                    | Total Outstanding Shares |               |             |              |             
|                    | as of AGM record date    |               | 106,045,419 | 106,036,419  | 106,036,419 

The major shareholders of the Company do not have different voting rights in comparison with other shareholders.

U.S. Shareholders

The following table indicates the approximate number of registered holders of common shares with United States addresses and the portion and percentage of common shares so held in the United States.  On August 22, 2008 (the record date for the Annual General Meeting), 92,238,112 common shares were outstanding.

|Total Number of Registered Holders
257 | Number of U.S. Registered Holders
211 | Number of Registered Common Shares Held in the U.S.
8,585,426 | Percentage of Registered Common Shares Held in the U.S.
9.3%
|-------------------------------------- | ------------------------------------- | ------------------------------------------------------------- | ------------------------------------------------------------

The computation of the number and percentage of common shares held in the United States is based upon the number of common shares held by record holders with United States addresses and by trusts, estates or accounts with United States addresses as disclosed to the Company following inquiry to all record holders known to the trustees, executors, guardians, custodians, or the fiduciaries holding common shares for one or more trusts, estates or accounts.  United States residents may beneficially own common shares held of record by non-United States residents.

Control

Except as disclosed above, to the best of the Company`s knowledge, the Company is not directly or indirectly owned or controlled by another corporation(s), any foreign government, or by any other natural or legal person(s) severally or jointly.  Furthermore, the Company is not aware of any arrangements for the change of control of the Company or subsequent arrangements that would result in a change of its control.

B    Related Party Transactions

Allburg Holdings Inc. ("Allburg"), previously known as Wanchi Inc., has been granted an exclusive license to manufacture and sell the Company`s Type II Diabetes drug Sucanon, make any claims and to use all patent rights in all countries outside Oriental Asia.  As a condition of this license Allburg must sub-license these rights, and this sub-license may only be granted to companies that are at least 50% owned by the Company (see Exhibit 3.8 to the Company`s Registration Statement previously filed with the March 31, 1996 Form 20-F).  During 1999, Allburg sold a 25% interest in Sucanon to Immunis Corp.  In January 2001, the Company purchased that 25% interest from Immunis Corp. by issuing 8,613,419 of its common shares at $0.26 per share to Immunis Corp.  Pursuant to US GAAP, shares should be valued at the date of issue.  The closing price of 26 cents per share represents a 12 percent discount of the weighted average share price before and after the date of the transaction.  As per the above analysis, the number of shares issued represents a discount from their intrinsic worth.

Note 10 to the Consolidated Financial Statements highlights the following amounts paid or payable to related parties based on exchange values which represented the amounts agreed upon by the related parties:

| |                                                      |  | 2008      |  | 2007      |  | 2006     
| | ---------------------------------------------------- |  | --------- |  | --------- |  | ---------
| |                                                      |  |           |  |           |  |          
| | Management fees paid to an officer/director          |  | $	144,000 |  | $	144,000 |  | $	144,000
| | Salaries and benefits paid to officers and directors |  | 183,540   |  | 173,481   |  | 172,976  
| | Interest accrued on Notes Payable                    |  | 150,785   |  | 96,833    |  | 56,766   
| | Rent and services paid to companies controlled by    |  |           |  |           |  |          
| | directors                                            |  | 88,896    |  | 81,943    |  | 86,216   

Note: The Company does not pay any cash compensation to directors in their capacity as directors.

Ongoing related party associations:

The Company has ongoing relationships with the following related parties. The following related parties are controlled by Mr. Robert Rieveley`s
estate and his spouse, Cheryl Rieveley. These entities perform the following services to the Company and are party to the following agreements with the Company:

Secured Debt controlled by Mr. Robert Rieveley`s estate and his spouse, Cheryl Rieveley

The following notes bear interest at the rate of 8% per annum compounded annually and due on demand. They are collateralized by a General Security Agreement providing a charge over the assets of the Company:



|                             | Balance Mar 31, 2008
|---------------------------- | --------------------
|R Rieveley & Associates      | $   2,134,424       
|Wenroth Limited ("Wenroth")  | 16,690              
|InReg Corporation ("InReg")  | 119,041             
|Allburg Holdings ("Allburg") | 144,591             

The General Security Agreements mentioned above have been registered with the Personal Property Security Registry in Victoria, B.C. Once the respective loans are paid in full the registration becomes null and void.

#20 Seabright Holdings Ltd. indirectly finances the Company as it owns the shares of Allburg, InReg, and Wenroth making it the Company`s largest creditor. Additionally, #20 Seabright Holdings Ltd. is a secured creditor of the Company through its ownership of Allburg, InReg and Wenroth. The terms and amounts due to Allburg, InReg and Wenroth are described above.

In addition to interest charged on the above-mentioned notes, the Company had the following transactions with the secured creditors:

The Company retained the services of Mr. Rieveley through an employment agreement with his company, R Rieveley & Associates.  Management Fees paid to R Rieveley and Associates in the year ended March 31, 2008 amounted to $144,000.  During the year ended March 31, 2008 R Rieveley and Associates advanced $731,163 to the Company.

The Company owns 75% of Smith Rothe Pharmaceutical Inc.  ("Smith Rothe"). Smith Rothe has been granted an exclusive license to sub-contract the manufacture and marketing of the Company`s Type II diabetes drug Sucanon make claims and to use all patent rights in countries outside Oriental Asia.  The 25% non-controlling interest of Smith Rothe is held by Allburg and the 25% amount earned by the non-controlling interest will be reflected as single line items on both the Consolidated Balance Sheet and Consolidated Statements of Operations once marketing profits are realized.

Other companies controlled by Mr. Robert Rieveley`s
estate and his spouse, Cheryl Rieveley

Notes payable to RCAR Investment Ltd., are unsecured, bear interest at the rate of 8% per annum compounded annually and due on demand.  As of March 31, 2008 the Company owed RCAR $322,271.

Sucanon is manufactured on behalf of the Company by a private company controlled by R. Rieveley.  The manufacturing process is performed by employees of the Company.  The private company transfers Sucanon to the Company at cost and receives no profit for this manufacturing operation. The Company uses this private company to maintain confidentiality regarding the manufacturing process for Sucanon. As of March 31, 2008, the Company owed the private company $8,320.

First Choice Communications provides the Company with office space and computer services. Expenses paid to this company for services in the year ended March 31, 2008 totaled $51,247.

Penne Investments Services Inc. ("Penne") provides financing to the Company via loans.  As March 31, 2008 the Company had no amounts owing to Penne.

Due to Related Parties

The following table summarizes amounts due to related parties on March 31 of each year:

|                                                                                 | 2008         | 2007         | 2006       
|-------------------------------------------------------------------------------- | ------------ | ------------ | -----------
|Due to Related Parties- Unsecured                                                |              |              |            
|Amounts due to a director and companies controlled by a                          |              |              |            
|director are unsecured, payable on demand and bear no                            |              |              |            
|interest.                                                                        | $    38,185  | $    11,353  | $    33,179
|                                                                                 |              |              |            
|Notes payable to a company controlled by the Company`s                           |              |              |            
|president, are unsecured, payable on demand and bear interest                    |              |              |            
|at 8% per annum compounded annually.  During 2008 $23,872                        |              |              |            
|(2007 - $22,104; 2006 - $20,466) in interest was accrued.                        | 322,271      | 298,399      | 276,295    
|Total Unsecured                                                                  | $  360,456   | $  309,752   | $  309,474 
|                                                                                 |              |              |            
|Due to Related Parties- Secured                                                  |              |              |            
|                                                                                 |              |              |            
|Notes payable bearing interest at a rate of 8% per annum compounded              |              |              |            
|annually and due on demand.  Collateralized by a general security                |              |              |            
|agreement providing a charge over the assets of the Company.                     |              |              |            
|                                                                                 |              |              |            
|During the year ended March 31, 2008, the notes were increased by                |              |              |            
|advances of $731,163 (2007: $815,442, 2006: $37,000)increased with               |              |              |            
|the addition of the $118,160 non-interest bearing balance owing at               |              |              |            
|March 31, 2006 and were reduced by $Nil (2006-$Nil) paid directly to the lender. |              |              |            
|During the year ended March 31, 2007, interest expense of $130,016               |              |              |            
|was accrued (2007: $74,729; 2006: $36,300)                                       | 2,414,745    | 1,532,797    | 524,466    
|                                                                                 |              |              |            
|Amounts advanced by a company controlled by a Director secured by a              |              |              |            
|general security agreement, non-interest bearing and payable on                  |              |              |            
|demand.  During the year ended March 31, 2007, the balance was                   |              |              |            
|combined with the interest bearing note payable                                  | 0            | 0            | 118,160    
|Total Secured                                                                    | 2,414,745    | 1,532,797    | 642,626    
|                                                                                 |              |              |            
|Total Due to Related Parties                                                     | $  2,775,201 | $  1,842,549 | $  952,100 



Item 8    Financial Information

Audited Consolidated Financial Statements for March 31, 2008, together with the report of the auditors are attached at the end of this filing.  The Consolidated Balance Sheets provide a two year comparison, all other statements provide three year comparative statements.

Sales and capital assets by geographic region are summarized in Note 15 of the Audited Consolidated Financial Statements.

Legal Proceedings

On December 12, 2002, the Company filed a proposal under federal creditor protection legislation in Canada.  The purpose of the filing of the proposal was to protect the interests of all stakeholders of the Company from an action taken by the landlord of Laboratories.  The lease of the plant was in the Company`s name.  The landlord in question undertook to seize Laboratories assets and the filing of the proposal prevented the landlord`s seizure from continuing.

On May 21, 2003, both the Company and Laboratories received approval from the Supreme Court of British Columbia in the matter of two proposals regarding its creditors pursuant to the Bankruptcy and Insolvency Act of Canada.  These proposals, accepted by the required majority of creditors, allows for the operating subsidiary to maintain operations and generate funds from those operations to pay a portion of its pre-proposal liabilities.  Under the proposal, preferred creditors shall be paid in full in priority to all claims of unsecured creditors.  Provision for payment of claims of unsecured creditors shall be made in the lesser amount of 10% and $25,000 on each day, which is one year, one year six months and two years, respectively, after the end of the month of court ratification.  The proposals also allow the companies to provide ongoing business to its suppliers.  Creditors of the subsidiary after the filing of the proposal will be paid in full, in priority to preferred and general unsecured creditors.

In July 2006 the trustee acting in the proposal of the Company filed a certificate with the Supreme Court of British Columbia that certified that the Company had fully performed its obligations required under the proposal.  At the same time, the trustee acting in the proposal of Biotech Laboratories Inc. filed a notice of default with the Supreme Court of British Columbia stating that the creditors could take proceedings to place Biotech Laboratories Inc. in bankruptcy at their own expense.

The Company is the subject of legal disputes arising from the normal course of business.  In 1998, Cheron Holdings Ltd., one of Holdings` previous suppliers, filed a claim against Biotech Holdings Inc. in B.C. Supreme Court, Kamloops Division, for $711,000 which exceeds the payable amount on Holdings` books by approximately $250,000.  This supplier is claiming non-payment of outstanding amounts.  Management has issued a $1 million counter claim to this suit. On September 11, 1998 Holdings sold the operational assets to Biotech Laboratories Inc., another subsidiary of Biotech, in exchange for the assumption of $2,000,000 in collateralized debts on the books of Holdings.  This action was taken in order to continue operations until settlement of both the claim and the counter suit.  The operations of Holdings are now being carried on by Laboratories. The outcome of the legal disputes is not determinable; however, in the opinion of management, they would not have a material adverse financial impact on the Company.  There has been no legal activity on this claim since the filing of the Company`s $1 million counter claim.

Dividend Policy

The Company has not paid dividends on the common shares in any of its last three fiscal years.  The directors of the Company will determine if and when dividends should be declared and paid in the future based on the Company`s financial position at the relevant time.  All of the common shares of the Company are entitled to an equal share in any dividends declared and paid.

Significant Changes

There have been no significant changes to the Company`s operations since March 31, 2008.

Item 9   The Offer and Listing

Biotech Holdings Ltd. (the "Company") was incorporated in Alberta, Canada and is an integrated pharmaceutical company whose common shares traded on The Alberta Stock Exchange (the "ASE") until November 1999 at which time the ASE was merged into The Canadian Venture Exchange (the "CDNX" now called the "TSX Venture Exchange") under the symbol "BIO.V".  In October 12, 2007, the Board of Directors of the Company decided that it was in the best interest of the Company to apply to the TSX Venture Exchange to de-list its shares on a voluntary basis from the Exchange.  As such, the trading of Company`s shares were delisted from the Exchange in Canada while continuing trading of the Company`s shares on the Over the Counter Bulletin Board in the United States.  The Company continues to report to and be accountable to the British Columbia Securities Commission, the Alberta Securities Commission and the U.S. Securities Exchange Commission. The Company trades on the NASD OTC-BB under the symbol "BIOHF".  In 2001 the Company was listed on the Frankfurt Stock Exchange under the symbol "925970.F".

The following summarizes the high, low and closing prices of the Company`s common shares on the NASD- OTC-BB:

Monthly Data (last six months):

|Date        | High (US$) | Low (US$) | Close (US$)
|----------- | ---------- | --------- | -----------
|August 2008 | 0.03       | 0.01      | 0.02       
|July 2008   | 0.05       | 0.02      | 0.03       
|June 2008   | 0.05       | 0.04      | 0.04       
|May 2008    | 0.07       | 0.04      | 0.06       
|April 2008  | 0.06       | 0.04      | 0.06       
|March 2008  | 0.06       | 0.04      | 0.04       

Quarterly Data:

|Date Range         | High (US$) | Low (US$) | Close (US$)
|------------------ | ---------- | --------- | -----------
|                   |            |           |            
|April- June 2008   | 0.06       | 0.04      | 0.04       
|January- Mar. 2008 | 0.08       | 0.04      | 0.04       
|October- Dec. 2007 | 0.14       | 0.05      | 0.07       
|July- Sept. 2007   | 0.17       | 0.08      | 0.10       
|April- June 2007   | 0.21       | 0.08      | 0.17       
|January- Mar. 2007 | 0.07       | 0.04      | 0.06       
|October- Dec. 2006 | 0.06       | 0.05      | 0.05       
|July- Sept. 2006   | 0.11       | 0.05      | 0.06       
|April- June 2006   | 0.11       | 0.06      | 0.07       

On August 22, 2008, 92,238,112 Common Shares and 13,806,907 Series I Convertible Preferred Shares were outstanding.

There have been no significant trading suspensions on the OTC-BB in the past three years.  However, as mentioned previously, on December 6, 2005 it was announced that trading in the Company`s shares was halted on the TSX Venture Exchange pending the appointment of two independent directors to the Company`s board of directors satisfactory to the Exchange, including possessing the requisite degree of positive public company experience.

On February 2, 2006 it was announced that the TSX Venture Exchange had upgraded its halt trading announced in December to a suspension of trading in the Company`s shares on the Exchange.  The Company had presented one directorial candidate who was accepted by the Exchange.  (Subsequent to March 31, 2006, the Exchange accepted a second directorial candidate.)

As of August 30, 2006, the Company shares resumed trading on the TSX Venture Exchange. In October, 2008, the Board of Directors of the Company decided that it was in the best interest of the Company to apply to the TSX Venture Exchange to de-list its shares on a voluntary basis from the Exchange.  As such, the trading of Company`s shares were delisted from the Exchange in Canada while continuing trading of the Company`s shares on the Over the Counter Bulletin Board in the United States.

Item 10   Additional Data

A   Share Capital

This information is not required to be provided because it is an annual report filing.

B   Memorandum and Articles of Association

The Company`s Articles of Incorporation. Bylaws and other agreements were filed with the Company`s original 20-F filing received by the SEC on March 11, 1997.

CMaterial Contracts

The Company has not entered into any material contracts in the past two years other than during the ordinary course of business or have been previously disclosed in this filing.

D   Exchange Controls

Canada has no system of currency exchange controls.  There are no governmental laws, decrees or regulations in Canada that restrict the export or import of capital, including but not limited to, foreign exchange controls, or that affect the remittance of dividends, interest or other payments to non-resident holders of the Company`s securities.

There is no limitation on the right of non-resident or foreign owners to hold such securities or vote, imposed by Canadian law or by the charter or other constituent documents of the Company, as to the common shares of the Company to be registered hereunder.

The Company`s accounts are maintained in Canadian dollars.  In this Annual Report, all dollar amounts are expressed in Canadian dollars except where otherwise indicated.

E   Taxation

Under the Canada-United States Tax Convention Act of 1984, dividends paid by a Canadian company to residents of the United States are subject to a 15% withholding tax in Canada. However, the withholding tax is reduced to 10% of the gross amount if the beneficial owner in the United States is a company which owns at least 10% of the voting stock of the Canadian company.

F   Dividends and Paying Agents

This information is not required to be provided because it is an annual report filing.

G   Statement of Experts

This information is not required to be provided because it is an annual report filing.

H   Documents on Display

The Company`s Articles of Incorporation. Bylaws and other agreements were filed with the Company`s original 20-F filing received by the SEC on March 11, 1997.

Item 11   Quantitative and Qualitative Disclosures About Market Risk

Not applicable at this time.

Item 12   Description of Securities Other than Equity Securities

Not applicable.

Item 13   Defaults, Dividend Arrearages and Delinquencies

At March 31, 2008 and 2007, 13,806,907 convertible preferred shares were outstanding from the exercise of preferred share warrants during 2004.  No cash dividend has been declared to date.  However, the 8% per annum dividend on these shares for the year ended March 31, 2008 would have amounted to $110,455 (2007: $110,455; 2006: $110,455).  The cumulative effect to March 31, 2007 of the dividend at 8% per annum from date of issuance would have amounted to $509,720.  This would have an insignificant effect on net loss or on basic and diluted loss per share.

Item 14   Material Modifications to the Rights of Security Holders and Use of Proceeds

There have been no material modifications to the rights of Security Holders.

Item 15   [Reserved]

Not applicable.

Item 16   [Reserved]

Not applicable.

CONTROLS AND PROCEDURES

As of March 31, 2008, we, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, performed an evaluation of the effectiveness of our disclosure controls and procedures.  Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective for gathering, analyzing and disclosing the information we are required to disclose in the reports we file under the Securities Exchange Act of 1934, within the time periods specified in the SEC`s rules and forms.  Our management necessarily applied its judgement in assessing the costs and benefits of those controls and procedures, which by their nature can provide only reasonable assurance regarding management`s control objectives.

There have been no changes in our internal controls over financial reporting that occurred during the period covered by this annual report that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Item 17    Financial Statements

The financial statements of the Company are annexed hereto and have been prepared by the Company in accordance with generally accepted accounting principles in Canada, which differ in certain respects from generally accepted accounting principles in the United States as outlined in the financial statements.  The table of contents to the consolidated financial statements and accompanying notes to the consolidated financial statements is attached to this Form 20-F.

The Consolidated Financial Statements are filed as part of this registration statement.

Financial Statements

The following financial statements are attached to and form part of this Annual Report:

|Consolidated Financial Statements of the Company                                              | Page(s)
|--------------------------------------------------------------------------------------------- | -------
|                                                                                              |        
|Report of Independent Registered Chartered Accountants                                        | 43     
|                                                                                              |        
|Comments by Independent Registered Chartered Accountants for U.S. Readers                     |        
|on Canada-United States of America Reporting Differences                                      | 43     
|                                                                                              |        
|Consolidated Balance Sheets as of 31 March 2008 and 2007                                      | 44     
|                                                                                              |        
|Consolidated Statements of Operations for the fiscal years ended March 31, 2008, 2007         |        
|and 2006                                                                                      | 45     
|                                                                                              |        
|Consolidated Statements of Changes in Shareholders` Deficiency for the fiscal years           |        
|ended March 31, 2008, 2007 and 2006                                                           | 46     
|                                                                                              |        
|Consolidated Statements of Cash Flows for the fiscal years ended March 31, 2008, 2007         |        
|and 2006                                                                                      | 47     
|                                                                                              |        
|Summary of Significant Accounting Policies and Notes to the Consolidated Financial Statements | 48- 72 

All financial statement schedules described in Regulation S-X are omitted because the information is not required, is not material or is otherwise included in the consolidated financial statements or the related notes thereto.

Item 19    Exhibits

No Exhibits are attached to this filing



CERTIFICATION required by Rule 13a-14(b) (17 CFR 240.13a-14(a)) or Rule 15d-14(a) 
(17 CFR 240.15d-14(a)) under the Securities and Exchange Act of 1934, as amended

I, Lorne D. Brown, the Chief Financial Officer and Interim Chief Executive
Officer of Biotech Holdings Ltd., certify that:

I have reviewed this Annual Report ("report")on Form 20-F for the fiscal year ended March 31, 2008 of Biotech Holdings Ltd. (the "Company")

Based on my knowledge, this report does not contain any untrue statement of a material fact  or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

The company`s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the company and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the company`s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by his report based on such evaluation; and

Disclosed in this report any change in the company`s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company`s internal control over financial reporting; and

The company`s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company`s auditors and the audit committee of the company`s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company`s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the company`s internal control over financial reporting.

Date: 22 September, 2008

/s/ Lorne D. Brown

Lorne D. Brown, Chief Financial Officer and Interim Chief Executive Officer

CERTIFICATION PURSUANT TO
18 U.S.C. Section 1350 as adopted pursuant to Section 906
Of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of Biotech Holdings Ltd. (the "Company") on Form 20-F for the year ended March 31, 2008, as filed with the Securities Exchange Commission on the date hereof (the "REPORT"), I, Lorne D. Brown, Chief Financial Officer
and Interim Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

The Annual Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

The information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:   September _

/s/ Lorne D. Brown

______________________________________

Lorne D. Brown, C.F.O. and Interim C.E.O.



SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.



Date _22 September, 2008

Biotech Holdings Ltd.

/s/ Lorne Brown

__________________________

Lorne Brown, Chief Financial Officer

and Interim Chief Executive Officer







Biotech Holdings Ltd.

Consolidated Financial Statements

(Expressed in Canadian Dollars)

For the years ended March 31, 2008 and 2007





















Biotech Holdings Ltd.

Consolidated Financial Statements

(Expressed in Canadian Dollars)

For the years ended March 31, 2008 and 2007

|                                                    | Contents
|--------------------------------------------------- | --------
|                                                    |         
|Independent Auditors` Report                        | 3       
|Consolidated Financial Statements                   |         
|Balance Sheets                                      | 4       
|Statements of Operations                            | 5       
|Statements of Changes in Shareholders' (Deficiency) | 6       
|Statements of Cash Flows                            | 7       
|Summary of Significant Accounting Policies          | 8 - 11  
|Adoption of New Accounting Policies                 | 12 - 14 
|Notes
    to the Financial Statements               | 15 - 31 
|                                                    |         









INDEPENDENT AUDITORS` REPORT

To the Shareholders of Biotech Holdings Ltd.:

We have audited the consolidated balance sheets of Biotech Holdings Ltd. as at March 31, 2008 and 2007 and the consolidated statements of operations and deficit, changes in shareholders' equity, and cash flows for the years then ended.  These consolidated financial statements are the responsibility of the company's management.  Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with Canadian generally accepted auditing standards and with the standards of the Public Company Accounting Oversight Board (''PCAOB'')(United States).  Those standards require that we plan and perform an audit to obtain reasonable assurance whether the consolidated financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the company as at March 31, 2008 and 2007 and the results of its operations and its cash flows for the years then ended in accordance with Canadian generally accepted accounting principles.

Comments by Auditors for U.S. Readers on Canada - United States Reporting Differences

United States reporting standards for auditors require the addition of an explanatory paragraph following the opinion paragraph when the financial statements are affected by conditions and events that cast substantial doubt on the company's ability to continue as a going concern, such as those described in Note 1 to the financial statements.  Our report to the shareholders dated June 26, 2008 is expressed in accordance with Canadian reporting standards which do not permit reference to such conditions and events in the auditors' report these are adequately disclosed in the financial statements.



"Cinnamon Jang Willoughby & Company"

Chartered Accountants

Burnaby, BC, Canada

June 26, 2008



Biotech Holdings Ltd.

Consolidated Balance Sheets

(Expressed in Canadian Dollars)

|March 31                                   |                                                           | 2008    |              | 2007   
|------------------------------------------ | --------------------------------------------------------- | ------- | ------------ | -------
|                                          
|Assets                                    
|                                           |                                                           |         |              |        
|Current                                    |                                                           |         |              |        
|                                           | Cash and cash equivalents                                 |         | $	14,854     |        
|                                           | Accounts receivable- net                                  |         | 165,431      |        
|                                           | Inventory                                                 |         | 4,657        |        
|                                           |                                                           |         |              |        
|                                           |                                                           |         | 184,942      |        
|Property and equipment                     |                                                           |         |              |        
|                                           | Continuing operations (Notes 2 and 12)                    |         | 102,492      |        
|                                           | Held for resale (Notes 2 and 12)                          |         | 1            |        
|                                           |                                                           |         |              |        
|Technology interests(Note 3)               |                                                           | 1       |              | 1      
|                                           |                                                           |         |              |        
|                                           |                                                           |         | $	287,436    |        
|Liabilities and Shareholders' (Deficiency)
|Liabilities                                |                                                           |         |              |        
|                                           |                                                           |         |              |        
|Current                                    |                                                           |         |              |        
|                                           | Accounts payable and accrued liabilities (Notes 11 and15) |         | $	1,350,529  |        
|                                           | Due to related parties (Note 4)                           |         | 2,775,201    |        
|                                           |                                                           |         |              |        
|                                           |                                                           |         | 4,125,730    |        
|                                           |                                                           |         |              |        
|Notes payable(Note 5)                      |                                                           | 224,343 |              | 224,343
|                                           |                                                           |         |              |        
|                                           |                                                           |         | 4,350,073    |        
|Shareholders' (deficiency)                 |                                                           |         |              |        
|                                           | Share capital (Note 6) - common shares                    |         | 25,734,583   |        
|                                           | - convertible preferred shares                            |         | 1,380,691    |        
|                                           | Contributed surplus                                       |         | 1,502,062    |        
|                                           | Deficit                                                   |         | (32,679,973) |        
|                                           |                                                           |         |              |        
|                                           |                                                           |         | (4,062,637)  |        
|                                           |                                                           |         |              |        
|                                           |                                                           |         | $	287,436    |        

Commitments and contractual agreements (Note 10); Contingency (Note 11);

Subsequent events (Note 17)

Approved by the Board:	 /s/  Robert Rieveley	Director    /s/  Gale Belding	Director

The accompanying summary of significant accounting policies and notes are an integral part of these consolidated financial statements.



Biotech Holdings Ltd.

Consolidated Statements of Operations

(Expressed in Canadian Dollars)

|For the years ended March 31                         | 2008                                             | 2007             | 2006(Restated- See Note 18)
|---------------------------------------------------- | ------------------------------------------------ | ---------------- | ---------------------------
|                                                     |                                                  |                  |                            
|Sales                                                | $	370,419                                        | $	336,595        | $	482,840                  
|                                                     |                                                  |                  |                            
|Cost of sales                                        | 150,511                                          | 111,748          | 129,287                    
|                                                     |                                                  |                  |                            
|Gross profit                                         | 219,908                                          | 224,847          | 353,553                    
|                                                     |                                                  |                  |                            
|Expenses                                             |                                                  |                  |                            
|                                                     | General, administrative and selling              | 368,940          | 298,988                    
|                                                     | Stock-based compensation                         | 351,677          | 283,383                    
|                                                     | Salaries and Benefits                            | 276,328          | 249,929                    
|                                                     | Product marketing costs                          | 240,965          | 321,426                    
|                                                     | Interest- current debt and other                 | 177,524          | 96,833                     
|                                                     | Bad Debts                                        | 73,687           | 83,046                     
|                                                     | Professional fees                                | 68,912           | 112,800                    
|                                                     | Office rent, utilities and maintenance           | 44,834           | 62,497                     
|                                                     | Amortization                                     | 12,772           | 436,446                    
|                                                     | Foreign exchange                                 | 10,432           | 13,488                     
|                                                     |                                                  |                  |                            
|                                                     |                                                  | 1,626,071        | 1,958,836                  
|                                                     |                                                  |                  |                            
|Loss from continuing operations                      | (1,406,163)                                      | (1,733,989)      | (2,095,602)                
|                                                     |                                                  |                  |                            
|Loss from discontinued operations                    |                                                  |                  |                            
|                                                     | - gain from settlement of debt and restructuring | -                | 199,094                    
|                                                     | - gain from sale of equipment                    | -                | -                          
|                                                     |                                                  |                  |                            
|Net loss for the year                                | $	(1,406,163)                                    | $	(1,534,895)    | $   	(2,019,378)           
|                                                     |                                                  |                  |                            
|Basic and diluted loss per common share              |                                                  |                  |                            
|                                                     |                                                  |                  |                            
|                                                     | From continuing operations                       | $         (0.02) | $        (0.02)            
|                                                     |                                                  |                  |                            
|                                                     | From discontinued operations                     | (0.00)           | (0.00)                     
|                                                     |                                                  |                  |                            
|Net loss for the year                                | $         (0.02)                                 | $         (0.02) | $         (0.02)           
|                                                     |                                                  |                  |                            
|Weighted average number of common shares outstanding | 92,235,833                                       | 92,229,512       | 91,829,966                 



The accompanying summary of significant accounting policies and notes are an integral part of these consolidated financial statements.



Biotech Holdings Ltd

Consolidated Statements of Changes in Shareholders' (Deficiency)

(Expressed in Canadian Dollars)





|For the years ended March 31, 2008, 2007 and 2006   
|----------------------------------------------------
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|Balance, March 31, 2005                             
|Common shares issued:                               
|For cash -                                          
|by private placement                                
|by stock options exercised                          
|Stock-based compensation                            
|Private placement finders fee                       
|Options exercised for which stock-based compensation
|has been recorded                                   
|Net loss                                            
|Balance, March 31, 2006                             
|Stock-based compensation                            
|Net loss                                            
|Balance, March 31, 2007                             
|Common shares issued:                               
|For cash -                                          
|by stock options exercised                          
|Stock-based compensation                            
|Options exercised for which stock-based compensation
|has been recorded                                   
|Net loss                                            
|Balance, March 31, 2008                             





he accompanying summary of significant accounting policies and notes are an integral part of these consolidated financial statements.





Biotech Holdings Ltd.

Consolidated Statements of Cash Flows

(Expressed in Canadian Dollars)



|For the years ended March 31                                                         |                                                                | 2008     |             | 2007     |             | 2006
(Restated- See Note 18)
|------------------------------------------------------------------------------------ | -------------------------------------------------------------- | -------- | ----------- | -------- | ----------- | ----------------------------
|                                                                                     |                                                                |          |             |          |             |                             
|Cash provided by (used in):                                                          |                                                                |          |             |          |             |                             
|Operating activities                                                                 |                                                                |          |             |          |             |                             
|                                                                                     | Net loss for the period                                        |          | (1,406,163) |          | (1,534,895) |                             
|                                                                                     | (Gain) from discontinued operations                            |          | -           |          | (199,094)   |                             
|                                                                                     |                                                                |          |             |          |             |                             
|                                                                                     | Net loss from continuing operations                            |          | (1,406,163) |          | (1,733,989) |                             
|                                                                                     | Items not involving cash:                                      |          |             |          |             |                             
|                                                                                     | Amortization                                                   |          | 12,772      |          | 436,446     |                             
|                                                                                     | Accrued interest                                               |          | 174,657     |          | 96,833      |                             
|                                                                                     | Stock-based compensation                                       |          | 351,677     |          | 283,383     |                             
|                                                                                     | Write-down of advances                                         |          | -           |          | 54,053      |                             
|                                                                                     | Changes in non-cash operating working capital items (Note 7)   |          | 99,700      |          | 26,019      |                             
|                                                                                     | Net cash (used in) operating activities from                   |          |             |          |             |                             
|                                                                                     | continuing operations                                          |          | (767,357)   |          | (837,255)   |                             
|                                                                                     |                                                                |          |             |          |             |                             
|Financing activities                                                                 |                                                                |          |             |          |             |                             
|                                                                                     | Due to related parties (decrease)                              |          | 757,993     |          | 793,616     |                             
|                                                                                     | Private placement finders fee paid                             |          | -           |          | -           |                             
|                                                                                     | Issuance of common shares                                      |          | 860         |          | -           |                             
|                                                                                     |                                                                |          |             |          |             |                             
|                                                                                     |                                                                |          | 758,853     |          | 793,616     |                             
|Investing activities                                                                 |                                                                |          |             |          |             |                             
|                                                                                     | Purchase of property and equipment                             |          | -           |          | (1,282)     |                             
|                                                                                     | Proceeds on disposal of property and
equipment held for resale |          | -           |          | -           |                             
|                                                                                     |                                                                |          |             |          |             |                             
|                                                                                     |                                                                | -        |             | (1,282)  |             | 42,936                      
|                                                                                     |                                                                |          |             |          |             |                             
|Increase (Decrease) in cash and cash equivalents                                     |                                                                | (8,504)  |             | (44,921) |             | (372,325)                   
|Cash and cash equivalents, beginning of year                                         |                                                                | 23,358   |             | 68,279   |             | 440,604                     
|                                                                                     |                                                                |          |             |          |             |                             
|Cash and cash equivalents, end of year                                               |                                                                | $	14,854 |             | $	23,358 |             | $	68,279                    
|                                                                                     |                                                                |          |             |          |             |                             
|Supplemental disclosure of cash flow information and non-cash transactions  (Note 7) |                                                                |          |             |          |             |                             

The accompanying summary of significant accounting policies and notes are an integral part of these consolidated financial statements.





Biotech Holdings Ltd.

Summary of Significant Accounting Policies

(Expressed in Canadian Dollars)

March 31, 2008 and 2007

These consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles ("Canadian GAAP"), which in these circumstances conform in all material respects with United States generally accepted principles ("US GAAP") except as described in Note 16.

Basis of Consolidation

These consolidated financial statements include the accounts of Biotech Holdings Ltd. ("Biotech") (the "Company") and its subsidiaries:  401718 B.C. Ltd. (formerly Biotech Holdings Inc.) ("Holdings"), Biotech Laboratories Inc. ("Laboratories"), 314202 B.C. Ltd. ("314202"), Biotech Pharmaceutical Ltd., Echo Health & Beauty Ltd. ("Echo"), Volque Pharmaceutical Company Ltd. ("Volque"), and 75% of Smith Rothe Pharmaceutical, Inc. ("Smith Rothe"). The Mexican operating company,Pharmaroth Latin America S.A. de C.V., is owned by Smith Rothe.Smith Rothe has been granted an exclusive license to sub-contract the manufacture and marketing of the Company`s Type II diabetes drug known variously as DIAB II, Sucanon and Glucanin make claims and to use all patent rights in countries outside Oriental Asia.  The 25% non-controlling interest of Smith Rothe is held by a company that is controlled by a Director of Biotech.  All significant intercompany transactions and balances have been eliminated on consolidation.

Use of Estimates

The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods.  Actual results may differ from those estimates.

Going Concern

These consolidated financial statements have been prepared on a going concern basis which contemplates that Biotech will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business.  The Company`s ability to continue as a going concern is dependent upon the raising of additional financing, if, as, and when required, and, ultimately, the attainment of profitable operations.

These consolidated financial statements do not give effect to adjustments that would be necessary to the carrying values and classifications of assets and liabilities should the Company be unable to continue as a going concern.

Cash and Cash Equivalents

Cash and cash equivalents consist of deposits in banks and highly liquid money market securities and investment deposits issued by banks with an original maturity of three months or less.

Allowance for Doubtful Accounts

The Company provides an allowance for doubtful accounts when management estimates collectibility to be uncertain. Accounts receivable are continually reviewed to determine which, if any, accounts are doubtful of collection. In making the determination of the appropriate allowance amount, the Company considers current economic and industry conditions, relationships with each significant customer, overall customer credit-worthiness and historical experience.





Biotech Holdings Ltd.

Summary of Significant Accounting Policies

(Expressed in Canadian Dollars)

March 31, 2008 and 2007



Property and Equipment

Property and equipment are recorded at cost less any impairment losses recognized in accordance with the policy for impairment of long-lived assets as set out below.

Amortization of property and equipment used in continuing operations is provided over the estimated useful lives of the assets using the following bases and annual rates:

Furniture and fixtures          - 10% declining-balance basis

Laboratory equipment         - 10% declining-balance basis

Production equipment         - 10% declining-balance basis

Computer equipment           - 30% declining-balance basis

No amortization is provided for property and equipment held for resale.

The Company reviews the carrying value of its property and equipment on a regular basis and where these carrying values are estimated to exceed the net recoverable amounts, provision is made for these decreases in value.

Revenue Recognition

The Company`s principal revenue will be derived from its Type II diabetes drug currently distributed in Mexico. The Company has entered into agreements with two non-related companies in Mexico.  The first company manufactures and packages the tablets from a pre-mix of active ingredients manufactured by the Company in Canada.  The second company markets the drug.  The Mexican operating company,Pharmaroth Latin America S.A. de C.V., also markets the drug.

Revenue from product sales will be recognized upon the delivery of the product to a retailer or final consumer when persuasive evidence of an arrangement exists, the price is fixed or determinable and collection is reasonably assured and the Company has no future performance obligations under any licensing agreement or other significant post-delivery obligations.

Inventory

Inventory is valued at the lower of cost and market. The market value is determined based on the net realizable value of finished goods and the replacement cost for raw materials.  Cost is determined on a first-in, first-out basis.

Product Marketing Costs

Product marketing costs of $240,965 were expensed in the year (2007 - $321,426 and 2006 - $571,985).

Foreign Exchange Translation

The Company`s functional currency is the Canadian dollar. Monetary assets and liabilities denominated in foreign currencies are translated to Canadian dollars at the year-end exchange rate and all income and expenses are translated at average exchange rates prevailing during the period.  Non-monetary assets and liabilities are translated at the rates prevailing at the dates the assets were acquired or liabilities incurred.  Exchange gains and losses arising on translation are included in earnings.

Exchange rates between the United States dollar and the Canadian dollar for the years reported in these financial statements are as follows:



Biotech Holdings Ltd.

Summary of Significant Accounting Policies

(Expressed in Canadian Dollars)

March 31, 2008 and 2007

Foreign Exchange Translation (continued)

|                       | 2008       | 2007       | 2006      
|---------------------- | ---------- | ---------- | ----------
|Average for year`s end | $   1.0330 | $   1.1388 | $   1.1676
|As at end of year      | $   1.0232 | $   1.1559 | $   1.1943

Exchange rates between the Mexican peso and the Canadian dollar for the years reported in these financial statements are as follows:

| |                        | 2008       | 2007       | 2006      
| | ---------------------- | ---------- | ---------- | ----------
| | Average for year`s end | $   0.0951 | $   0.1036 | $   0.1112
| | As at end of year      | $   0.0958 | $   0.1049 | $   0.1068

Technology Interests

Technology interests are stated at amortized cost less any impairment losses recognized in accordance with the policy for impairment of long-lived assets as set out below.  The Company evaluates the recoverability of these interests when facts and circumstances suggest the asset could be impaired.  Amortization of technology interests is being recorded on a straight-line basis over the shorter of the estimated useful lives or ten years.

Impairment of Long-Lived Assets

Property and equipment and other long-lived assets are regularly reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.  Impairment is assessed by comparing the carrying amount of an asset to be held and used with the sum of undiscounted cash flows expected from its use and disposal.  If such assets are considered impaired, the impairment loss to be recognized is measured by the amount by which the carrying amount of the assets exceeds its fair value generally determined on a discounted cash flow basis.  Any impairment results in a write-down of the asset and a charge to income during the year.

Loss Per Share

Common equivalent shares (consisting of shares issuable on exercise of stock options and warrants) totaling 6,541,400 (2007- 3,506,000) were not included in the computation of diluted earnings per share because the effect was anti-dilutive.

Fair Value of Financial Instruments

Financial instruments include cash and cash equivalents, accounts receivable, advances, accounts payable and accrued liabilities and amounts due to related parties.  Management of the Company does not believe that the Company is subject to significant interest, currency or credit risks arising from these financial instruments.  Unless otherwise stated, the respective carrying values of financial instruments approximate their fair values. Fair values were assumed to approximate carrying values since they are short-term in nature or they are receivable or payable on demand.  The fair values of notes payable was not practicable to determine. The Company does not use any derivative instruments to reduce its



Biotech Holdings Ltd.

Summary of Significant Accounting Policies

(Expressed in Canadian Dollars)

March 31, 2008 and 2007

Fair Value of Financial Instruments (continued)

exposure to fluctuations in interest rates and foreign currency exchange rates.

Stock-Based Compensation

The Company applies the fair value method for valuing stock option grants. Under this method, compensation costs, attributable to share options granted to employees, contractors, officers and directors, are measured at fair value at the grant date and recorded to stock compensation expense over the vesting period of the related option with a corresponding increase to contributed surplus. Upon the exercise of the stock options, consideration paid, together with the amount previously recognized in contributed surplus, is recorded as an increase to share capital.

Future Income Taxes

Income taxes are accounted for by the asset and liability method.  Under this method, future income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  Future income tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on future tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment. Management believes that it is not sufficiently likely that the Company will generate sufficient taxable income to allow the  realization of future tax assets and therefore the Company has fully provided for these assets.



Biotech Holdings Ltd.

Adoption of New Accounting Policies

(Expressed in Canadian Dollars)

March 31, 2008 and 2007

Effective April 1, 2007 the Company adopted the following new accounting standards issued by the Canadian Institute of Chartered Accountants ("CICA");  "Financial Instruments- Recognition and Measurement" (Section 3855), "Financial Instruments- Disclosure and Presentation" (Section 3861), and "Comprehensive Income" (Section 1530).  These new standards have been adopted prospectively.  Adoption of these standards did not impact April 1, 2007 opening balances.

1. Financial instruments- Recognition and Measurement- Section 3855

This section establishes standards for the recognition, measurement disclosure and presentation of financial instruments.  Under the new standard, financial assets and liabilities are initially recognized at fair value and are subsequently measured based on their classification as held-for-trading, held-to-maturity, loans and receivables, available-for-sale, or other financial liabilities, as described below:

1. Held-for-trading

Financial assets and financial liabilities that are purchased and incurred with the intention of generating profits in the near term are classified as held-for-trading.  Any financial instrument can be designated as held for trading as long as its fair value can be reliably measured.  These instruments are measured at fair value with subsequent changes in fair value included in earnings.

The company has classified cash and cash equivalents as held-for-trading, which accordingly are carried at their fair values.  Held-for-trading assets are not subject to significant credit, foreign exchange or interest rate risk.

1. Held-to-maturity

Financial assets that have a fixed maturity date and fixed or determinable payments, where the company intends and has the ability to hold the financial asset to maturity are classified as held-to-maturity and measured at amortized cost using the effective interest rate method.  Any gains and losses arising from the sale of held-to-maturity financial assets are included in earnings.

Currently, the company has no held-to-maturity financial assets.

1. Loans and receivables

Items classified as loans and receivables are measured at amortized cost using the effective interest method.  Any gains or losses on the realization of loans and receivables are included in earnings.

The company has classified receivables loans and receivables, which are accordingly measured at amortized cost.  Due to their short-term natures, the fair values of loans and receivables approximate their carrying values, and they are not subject to significant credit or interest rate risk.





Biotech Holdings Ltd.

Adoption of New Accounting Policies

(Expressed in Canadian Dollars)

March 31, 2008 and 2007

1. Available-for-sale

Available-for-sale assets are those financial assets that are not classified as held-for-trading, held-to-maturity or loans or receivables, and are carried at fair value.  Any gains or losses arising from the change in fair value are recorded as other comprehensive income.  Available-for-sale securities are written down to fair value through earnings whenever it is necessary to reflect other-than-temporary impairment.  Cumulative gains and losses arising upon the sale of the instrument are included in earnings.

Currently, the company has no available-for-sale financial assets.

1. Other financial liabilities

Financial liabilities that are not classified as held for trading are classified as other financial liabilities, and are carried at amortized cost using the effective interest method.  Any gains or losses arising from the realization of other financial liabilities are included in earnings.

The company has classified accounts payable and due to related parties and long-term debt as other financial instruments, which are accordingly carried at amortized cost.  Due to its short-term nature, the fair value of accounts payable and accrued liabilities approximate their carrying value, and they are not subject to significant credit, foreign exchange or interest rate risk.

Long term debt consists of notes payable which are unsecured, non-interest bearing and repayable only from a pro-rata share of profits commencing January 26, 2001.  Payments are limited to the principal amounts of the notes outstanding and no principal repayments are anticipated in 2009.  The fair value of these notes was not practicable to determine.

1. Financial instruments- Disclosure and Presentation- Section 3861

This section establishes standards for presentation of financial instruments and identifies the information which should be disclosed about them.  Under the new standards, policies followed for years prior to the effective date are generally not reversed, and therefore the comparative figures have not been restated.

1. Comprehensive income- Section 1530

This section establishes standards for reporting and presentation of comprehensive income, which is comprised of net earnings or loss and other comprehensive income.  Other comprehensive income represents the change in net equity for the period that arises from unrealized gains and losses on available-for-sale financial instruments, and changes in the fair market value of derivative instruments designated as cash flow hedges.  Amounts included in other comprehensive income are shown net of tax.  Cumulative changes in other comprehensive



Biotech Holdings Ltd.

Adoption of New Accounting Policies

(Expressed in Canadian Dollars)

March 31, 2008 and 2007

income are included in accumulated other comprehensive income which is presented (if applicable) as a new category in shareholders` equity.  The Company did not have any transactions during the yea ended 2007 that give rise to other comprehensive income, and therefore has no balance of other accumulated other comprehensive income.

1. Risk management

Because the financial instruments are not subject to significant foreign exchange or interest rate risk, the company has not adopted risk management policies.

1. Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and accounts receivable. The Company deposits cash with financial institutions it believes to be creditworthy. Cash balances at these financial institutions may exceed the federally guaranteed amount.

The Company`s accounts receivable are primarily derived from input tax credits receivable and trade receivables for mineral concentrate sales. The Company will maintain an allowance for doubtful accounts receivable in those cases for which the expected collectability of accounts receivable is in question.

The Company's financial instruments consist of cash, accounts receivable, accounts payable and accrued liabilities, prepaid expenses, due to related parties and long term debt. Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest, currency, or credit risks arising from these financial instruments. The fair values of the financial instruments other than long term debt approximate their carrying values, unless otherwise noted.



Biotech Holdings Ltd.

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

March 31, 2008 and 2007

1. Nature of Business and Ability to Continue Operations

The Company`s business focus is on developing the distribution of the Company`s Type II diabetes  drug known variously as DIAB II, Sucanon and Glucanin, particularly in Mexico and Latin America.  The operations of the Company are not subject to any seasonal or cyclical factors

These consolidated financial statements are stated in Canadian dollars and have been prepared in accordance with generally accepted accounting principles in Canada, on a going-concern basis, which contemplates the realization of assets and the liquidation of liabilities in the ordinary course of business.  They do not include any adjustments to the recoverability and classification of recorded asset amounts and liabilities that might be necessary should the Company be unable to continue as a going concern.  The Company has incurred recurring operating losses and has an accumulated deficit of $32,679,973 and a Shareholders` Deficiency of $4,062,637 at March 31, 2008.  These factors, among others, raise substantial doubt about the Company's ability to be able to continue as a going concern.  The future of the Company and the realization of its asset values will depend upon the Company's ability to obtain adequate financing and continuing support from shareholders and creditors including refinancing and to attain profitable operations.

Management plans to raise debt and equity capital on a private placement basis to finance the operating and capital requirements of the Company.  It is management's intention to continue using debt and equity to finance planned capital expansion and initial market development in Mexico and Latin America and other markets and operations until such time as the Company's operations are self-sustaining.

While the Company is expending its best efforts to achieve the above plans, there is no assurance that any such activity will generate sufficient funds for operations.

1. Property and Equipment

a) Continuing Operations



|2008                                                                                | Cost                                      | Accumulated
Amortization                  | Net Book
Value                        
|----------------------------------------------------------------------------------- | ----------------------------------------- | ----------------------------------------- | --------------------------------------
|Production equipment
Laboratory equipment
Furniture and fixtures
Computer equipment | $	46,779
240,627
6,000
119,458

$ 412,864 | $	16,087
176,732
2,457
115,096

$ 310,372 | $	30,692
63,895
3,543
4,362

$ 102,492





Biotech Holdings Ltd.

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

March 31, 2008 and 2007

1. Property and Equipment (continued)

1. Continuing Operations (continued)



|2007                                                                                | Cost                                         | Accumulated
Amortization                 | Net Book
Value                       
|----------------------------------------------------------------------------------- | -------------------------------------------- | ---------------------------------------- | -------------------------------------
|Production equipment
Laboratory equipment
Furniture and fixtures
Computer equipment | $   	46,779
240,627
6,000
119,458
$  412,864 | $	12,678
169,632
2,063
113,227
$ 297,600 | $	34,101
70,995
3,937
6,231
$ 115,264



b)	Held for Resale



|2008                 | Cost        | Accumulated
Amortization | Net Book
Value
|-------------------- | ----------- | ------------------------ | --------------
|Production equipment | $ 1,063,936 | $ 1,063,935              | $ 1           



|2007                 | Cost         | Accumulated
Amortization | Net Book
Value
|-------------------- | ------------ | ------------------------ | --------------
|Production equipment | $  1,063,936 | $ 1,063,935              | $ 1           

During the year ended March 31, 2008, amortization expense for the continuing operations was $12,772 (2007: $14,510, and 2006: $16,398) and $Nil (2007: $Nil, and 2006: $Nil) for property and equipment held for resale.

3. Technology Interests



|2008 | Cost        | Accumulated
Amortization | Net Book
Value
|---- | ----------- | ------------------------ | --------------
|     | $ 4,461,282 | $ 4,461,281              | $ 1           



|2007 | Cost        | Accumulated
Amortization | Net Book
Value
|---- | ----------- | ------------------------ | --------------
|     | $ 4,461,282 | $ 4,461,281              | $ 1           

During the year ended March 31, 2008, amortization expense for technology interests was $Nil (2007: $421,936 and 2006: $593,713).







Biotech Holdings Ltd

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

March 31, 2008 and 2007

4. Due to Related Parties

|   |                                                                                                                                                                                                                                                                  |  | 2008      |  | 2007     
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------- |  | ---------
|a) | Unsecured                                                                                                                                                                                                                                                        |  |           |  |          
|   |                                                                                                                                                                                                                                                                  |  |           |  |          
|   | (i)	Notes payable to RCAR Investment Ltd., a company controlled by the Company`s president, are unsecured, payable on demand and bear interest at 8% per annum compounded annually.  During 2008 $23,872 (2007 -$22,104, 2006 -$20,466) in interest was accrued. |  | $	322,271 |  | $	298,399
|   | (ii)	Amounts payable to a Director are unsecured, payable on demand and bear no interest.                                                                                                                                                                        |  | 28,996    |  | 4,551    
|   | (iii)	Amounts payable to companies controlled by a Director are unsecured, payable on demand and bear no interest.                                                                                                                                               |  | 9,189     |  | 6,802    
|   | Total unsecured                                                                                                                                                                                                                                                  |  | 360,456   |  | 309,752  

b)	Secured

| | Notes payable bearing interest at the rate of 8% per annum compounded annually and due on demand.  Collateralized by a general security agreement providing a charge over the assets of the Company. |  |             |  |            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------- |  | -----------
| |                                                                                                                                                                                                      |  |             |  |            
| | During the year ended March 31, 2008, the notes
were increased by advances of $731,163 (2007: $815,442.                                                                                              |  |             |  |            
| | During the year, interest expense of $130,016 was accrued (2007: $74,729; 2006: $36,300)                                                                                                             |  | 2,414,745   |  | 1,532,797  
| |                                                                                                                                                                                                      |  |             |  |            
| | Total Secured                                                                                                                                                                                        |  | 2,414,745   |  | 1,532,797  
| |                                                                                                                                                                                                      |  |             |  |            
| | Total                                                                                                                                                                                                |  | $	2,775,201 |  | $	1,842,549

5. Notes Payable- long term



|These amounts are unsecured, non-interest bearing and repayable only from a pro-rata share of profits commencing January 26, 2001.  Payments will be limited to the principal amounts of the notes outstanding and no principal repayments are anticipated in 2009.  The fair value of these notes was not practicable to determine. |  | $	224,343 |  | $ 224,343
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------- |  | ---------







Biotech Holdings Ltd.

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

March 31, 2008 and 2007

6. Share Capital

Authorized

The Company is authorized to issue an unlimited number of Series Convertible Preferred shares and common shares without par value.  The preferred shares are voting and are convertible into common shares on a 1:1 basis.  They have a cumulative cash dividend of 8% of the original amount contributed plus accrued interest, and no redemption provisions.  The Company's Articles of Incorporation were amended in 2005 to amend the cumulative cash dividend rate of the Series I Convertible Preferred shares from $0.0368 per share to 8% per
annum.



1. Private Placements of Common Shares

During the year ended March 31, 2008 and 2007, no private placements were issued.

During the year ended March 31, 2007, the Company cancelled a private placement application previously announced on November 7, 2005 for 984,666 shares to be issued for funds was cancelled effective February 16, 2007. On this date, the Board of Directors approved the conversion of the funds, which had been advanced by an insider, from a secured non-interest bearing loan to a secured loan bearing interest at 8% from the effective date.

1. Warrants to Purchase Common Shares

The following table summarizes the number of fully exercisable common share warrants outstanding and the exercise price thereof:

| |                                 |  | 2008 |  | 2007        |  | 2006       
| | ------------------------------- |  | ---- |  | ----------- |  | -----------
| |                                 |  |      |  |             |  |            
| | Outstanding, beginning of year  |  | Nil  |  | 3,548,682   |  | 3,244,146  
| | Issued at $0.400 per share      |  |      |  |             |  |            
| | expiring October 6, 2006        |  | -    |  | -           |  | 2,020,202  
| | Expired January 27, 2006 $0.375 |  | -    |  | -           |  | (1,715,666)
| | Expired October 6, 2006 $0.400  |  | -    |  | (2,020,202) |  | -          
| | Expired December 16, 2006 $0.55 |  | -    |  | (1,528,480) |  | -          
| |                                 |  |      |  |             |  |            
| |                                 |  |      |  |             |  |            
| | Outstanding, end of year        |  | Nil  |  | Nil         |  | 3,548,682  

There were no outstanding warrants to purchase common shares at March 31, 2008.



Biotech Holdings Ltd.

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

March 31, 2008 and 2007

6. Share Capital (continued)

1. Stock Options- Common Shares

On July 25, 2005 the Board of Directors approved a "fixed" Stock Option Plan which limits the number of options to be granted. At the Annual General Meeting held on September 30, 2005, the shareholders approved a "fixed" Stock Option Plan (the "Plan"). The highlights of the Plan are as follows:

1. The maximum number of options granted at any time shall not exceed 8,820,971 less the number of options exercised since September 30, 2005 (the date of approval);
2. No one person may hold options of more than 5% of the issued and outstanding Shares;
3. Options granted under the plan may be exercised for a term of up to five years from the date of grant;
4. Shares issued on exercise of the stock options are payable in full on exercise, and;
5. Under the Plan, a stock option is non-assignable and terminates the day the Optionee ceases to be a director, officer or employee of the Corporation or for any reason other than death of the Optionee, in which case the stock option terminates ninety (90) days after the death of the
  Optionee.

The following table summarizes the number of shares under option and the exercise price thereof:



|                                    | 2008        | 2007      | 2006     
|----------------------------------- | ----------- | --------- | ---------
|Balance, beginning of year          | 3,506,000   | 2,415,000 | 3,851,000
|Granted (per share)                 |             |           |          
|$0.11 (expiring Apr 12 09)          | 5,034,000   | -         | -        
|$0.16 (expiring Jun 22 08)          | -           | 896,000   | -        
|$0.10 (expiring Jun 22 08)          | -           | 545,000   | -        
|$0.10 (expiring Jun 25 08)          | -           | 300,000   | -        
|US$0.10 (expiring Nov 23 08)        | -           | 275,000   | -        
|$0.135 (expiring Feb 22 08)         | -           | -         | 300,000  
|Exercised in year (per share)       |             |           |          
|$0.10 (expiring Jun 22 08)          | (8,600)     | -         | -        
|$0.23 (expiring May 3 05)           | -           | -         | (75,000) 
|Expired in year (per share)         |             |           |          
|$0.10 Expired Feb 22 08             | (300,000)   | -         | -        
|$0.55 Expired Mar 24 08             | (1,190,000) | -         | -        
|$0.54 Expired Aug 11 06             | -           | (75,000)  | -        
|$0.55 Expired Mar 24 07             | -           | (150,000) | -        
|$0.55 Expired Mar 24 06             | -           | (700,000) | -        
|$0.25 Expired Jan 2 06              | -           | -         | (495,000)
|$0.14 Expired Dec 15 05             | -           | -         | (896,000)
|Cancelled in year (per share)       | -           | -         | (50,000) 
|$0.10 Expiring Jun 25 08            | (300,000)   | -         | -        
|$0.11 Expired Apr 12 09             | (200,000)   | -         | -        
|$0.55 Expired Mar 24 05             |             |           | (220,000)
|Balance, end of year                | 6,541,000   | 3,506,000 | 2,415,000
|Exercisable, end of year            | 6,541,000   | 2,316,000 | 225,000  
|Weighted
    average exercise price | $   0.12    | $    0.27 | $   0.50 





Biotech Holdings Ltd.

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

March 31, 2008 and 2007



6. Share Capital (continued)

c) Stock Options- Common Shares (cont`d)

Using the fair value method to value stock options, $351,677 was recorded to stock-based compensation expense. This amount was determined using a Black-Scholes option pricing model assuming no dividends are to be paid, vesting occurring on the date of grant, exercising on the last day before expiry, a weighted average volatility of the Company`s share price of 169% (2007 - 159%; 2006- 100%) and a weighted average risk free rate of 4.20% (2007- 4.17%; 2006- 3.03%).  The stock compensation expense is netted with any recovery of compensation expense previously recognized on unvested options granted in prior years.

Stock options outstanding at March 31, 2008 were as follows:



|Exercise Price | Number    | Expiry           
|-------------- | --------- | -----------------
|$0.16          | 896,000   | June 22, 2008    
|$0.10          | 536,400   | June 22, 2008    
|$0.10 US       | 275,000   | November 23, 2008
|$0.11          | 4,834,000 | April 12, 2009   
|               | 6,541,400 |                  

1. Convertible Preferred Shares and Warrants to Purchase Preferred Shares

At March 31, 2008 and 2007, 13,806,907 convertible preferred shares were outstanding from the exercise of preferred share warrants during 2004.  No cash dividend has been declared to date.  However, the 8% per annum dividend on these shares for the year ended March 31, 2008 would have amounted to $110,455 (2007: $110,455; 2006: $110,455).  The cumulative effect to March 31, 2007 of the dividend at 8% per annum from date of issuance would have amounted to $509,720.  This would have an insignificant effect on net loss or on basic and diluted loss per share.

No preferred share purchase warrants were outstanding or exercisable as of March 31, 2008, 2007 or 2006.





Biotech Holdings Ltd.

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

March 31, 2008 and 2007

7.	Supplemental Disclosure of Cash Flow Information and Non-Cash Transactions

a) Changes in non-cash operating working capital items:



| |                                          |  | For the years ended March 31
| | ---------------------------------------- |  | ----------------------------
| |                                          |  | 2008                        
| |                                          |  |                             
| | Accounts receivable                      |  | $	(856)                     
| | Advances                                 |  | -                           
| | Inventory                                |  | 6,166                       
| | Accounts payable and accrued liabilities |  | 94,390                      
| |                                          |  |                             
| |                                          |  | $	99,700                    

b) Other Supplemental Information

No income taxes were paid and no interest was received in any of the periods presented.

8. Related Party Transactions

Amounts paid to related parties were based on exchange amounts which represented the amounts agreed upon by the related parties.  No cash compensation is paid to directors in their capacity as directors.  Amounts paid or payable to related parties not disclosed elsewhere include:

| |                                                   |  | 2008      |  | 2007      |  | 2006     
| | ------------------------------------------------- |  | --------- |  | --------- |  | ---------
| |                                                   |  |           |  |           |  |          
| | Management fees paid to an related party          |  | $	144,000 |  | $	144,000 |  | $	144,000
| | Salaries and benefits paid to related parties     |  | 183,540   |  | 173,481   |  | 172,976  
| | Interest accrued on Notes Payable (Note 4)        |  | 150,785   |  | 96,833    |  | 56,766   
| | Rent and services paid to companies controlled by |  |           |  |           |  |          
| | related parties (Note 4)                          |  | 88,896    |  | 81,943    |  | 86,216   









Biotech Holdings Ltd.

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

March 31, 2008 and 2007

1. Income Taxes

Income taxes vary from the amount that would be computed by applying the estimated statutory income tax rate (31%) for the following reasons:



| |                                                       |  | 2008            |  | 2007            |  | 2006           
| | ----------------------------------------------------- |  | --------------- |  | --------------- |  | ---------------
| |                                                       |  |                 |  |                 |  |                
| | Loss before income taxes                              |  | $(1,406,082)    |  | $(1,534,895)    |  | $2,019,378     
| | Income Tax Rate                                       |  | 31%             |  | 36%             |  | 36%            
| |                                                       |  |                 |  |                 |  |                
| | Provision (benefit) at Canadian statutory rate        |  | $	    (436,000) |  | $	    (552,000) |  | $	    (331,000)
| | Impact of lower statutory rates on foreign subsidiary |  | 5,000           |  | 10,000          |  | -              
| | Effect of rate changes in effective tax rates         |  | 785,000         |  | -               |  | -              
| | Permanent differences                                 |  | 120,000         |  | 113,000         |  | 167,000        
| | Expiry of loss carry forwards                         |  | 552,000         |  | 621,000         |  | 396,000        
| | (Decrease) increase in valuation allowance            |  | (1,026,000)     |  | (192,000)       |  | (232,000)      
| |                                                       |  | $           
-  |  | $            
- |  | $           
- 

The tax effects of temporary differences that give rise to significant components of the Company`s future income tax assets at March 31, are as follows:

| |                                    |  | 2008            |  | 2007        
| | ---------------------------------- |  | --------------- |  | ------------
| |                                    |  |                 |  |             
| | Unclaimed non-capital losses       |  | $	2,863,000     |  | $	3,604,000 
| | Property and equipment             |  | 508,000         |  | 585,000     
| | Technology interests               |  | 1,068,000       |  | 1,240,000   
| | Deferred costs                     |  | 220,000         |  | 256,000     
| | Valuation allowance                |  | (4,659,000)     |  | (5,685,000) 
| | Net deferred tax asset (liability) |  | $            
- |  | $         
-

The Company evaluates its valuation allowance requirements based on projected future operations.  When circumstances change and this causes a change in management`s judgment about the recoverability of future income tax assets, the impact of the change on the valuation allowance is reflected in current income.

The Company has non-capital losses carry forwards available to reduce future taxable income.  These loss carry forwards expire as follows:



|2009
2010
2011
2015
2026
2027
2028 | $   1,993,713
   1,378,313
   2,367,554  
1,149,702     
308,607     
796,616   1,239,108$ 9,233,613
|---------------------------------- | ----------------------------------------------------------------------------------------------------

No benefit (if any) of these tax losses has been recorded in these financial statements.



Biotech Holdings Ltd.

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

March 31, 2008 and 2007

10. Commitments and Contractual Agreements

a) In May 2004, the Company entered into a 5 year agreement with a marketing company in Mexico for the sale of Sucanon in Mexico.  The agreement, among other items, grants the marketing company the exclusive rights to sell Sucanon in Mexico, specifies the price at which the Company will sell Sucanon to the marketing company, establishes a maximum retail price and minimum monthly sales levels and sets out the terms of repayment for amounts advanced for advertising by the Company.  The agreement has a 5 year renewal clause.  Upon any breach of the terms specified in the agreement, the Company has the option to terminate the agreement.  In September 2006, the marketing company waived its exclusive rights to sell Sucanon in Mexico.  The Company assumed responsibility for advertising in Mexico and the marketing company agreed to a price increase to compensate the Company for the advertising costs.

b) In November 2004, the Company entered into an agreement with a Mexican manufacturing company for the production of Sucanon.  The agreement specifies that the Company will provide the manufacturer with pre-mix and the manufacturer will tablet the product within production specifications and package Sucanon for a per package price as specified in the agreement.

c) The Company pays rent on a month-to-month basis.

d) During the year ended March 31, 2002, the Company entered into a world-wide patent licensing agreement with the President of the Company regarding the use of DIAB II (also known under the trademarks Sucanon and Glucanin) as a combination therapy. Combination therapies as defined in the agreement include those therapies for Type II Diabetes in which DIAB II is combined with or used together with other Type II Diabetes drugs.  This agreement would require payment by the Company, to the President, of 25% of such royalty revenue received by the Company, either from licensing such combinations to third parties or from the Company itself producing such a combination.  The payment of this royalty for combination therapy use was determined by agreement between outside directors and the President.  This agreement will have no impact on revenues received by the Company on sales of DIAB II as a monotherapy, and, in the opinion of the management, this agreement is not anticipated to have a significant impact on expected total revenues.

11. Contingency

The Company is the subject of legal disputes which have arisen in the normal course of business.  In June 1998, one of the Company's suppliers issued a claim that exceeds the amount accrued by approximately $250,000.  The Company has filed a counter claim against the supplier and the matter is presently in litigation.  In the opinion of management, the outcome of the legal disputes is not presently determinable.  However, it is the opinion of management that this will not have a material adverse financial impact on the Company.



Biotech Holdings Ltd.

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

March 31, 2008 and 2007

12.	Segmented Information

The Company currently operates in one business segment, being the development  and distribution of its Type II diabetes drug.

Sales (returns) by geographic region are summarized as follows:



|       |  | For the years ended March 31
|------ |  | ----------------------------
|       |  | 2008                        
|       |  |                             
|Mexico |  | $  370,419                  
|       |  | $	370,419                   

Property and equipment by geographic region as of March 31, are summarized as follows:



|                               | 2008      | 2007     
|------------------------------ | --------- | ---------
|                               |           |          
|Canada (continuing operations) | $	102,492 | $	115,264
|Canada (held for resale)       | 1         | 1        
|                               |           |          
|                               | $	102,493 | $	115,265

Major Customers

Current Operations

The Company`s principal revenue is derived from its Type II diabetes drug currently distributed in Mexico. The Company has entered into agreements with two non-related companies in Mexico.  The first company manufactures and packages the tablets from a pre-mix of active ingredients manufactured by the Company in Canada.  The second company markets the drug.

In September 2006, the marketing company waived its exclusive rights to sell Sucanon in Mexico.  The Company assumed responsibility for advertising in Mexico and the marketing company agreed to a price increase to compensate the Company for the advertising costs.

During 2008, 20.5% of the Company`s sales (2007: 37.3%; 2006: 100%) were made to the Mexican marketing company, whose orders for product correspond to orders that they receive from their retail customers.  During 2008, the Company developed its own customer base and a primary customer accounted for 39.8% (2007: 49.6%; 2006: 0%) of total sales.  During 2008, two new customers exceeded 10% of the Company`s sales.  One customer accounted for 13.0% of total sales while the other accounted for 11.5%.

13. Reclassifications

Certain comparative figures have been reclassified to conform to the current year`s financial statement presentation.





Biotech Holdings Ltd.

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

March 31, 2008 and 2007

14.	Discontinued Operations

The Company`s primary operating subsidiary, Biotech Laboratories Inc., discontinued operations during the year ended March 31, 2003.  A general security agreement registered as a first charge, was granted to the subsidiary, subject to collateral, including inventory, equipment, accounts receivable, intangibles and other personal property of the lessee, to secure payment or performance of obligations and indebtedness of the subsidiary.

The remaining assets and liabilities of the discontinued operations at March 31, 2008 are as follows:



| | Current assets                         | $          
-
| | -------------------------------------- | -------------
| | Property and equipment- net book value | 1            
| |                                        |              
| |                                        | 1            
| | Less: current liabilities              | (636,382)    
| |                                        |              
| |                                        | $	(636,381)  

Revenue for the year ended March 31, 2008 from the discontinued operations was $Nil, (2007 - $Nil; 2006 - $Nil) resulting in an operating loss of $Nil (2007 - $Nil; 2006 - $Nil).

15. Proposal to Creditors

On May 21, 2003, the Company`s primary operating subsidiary, Biotech Laboratories Inc., as well as the Company, received approval from the Supreme Court of British Columbia in the matter of two proposals regarding its creditors pursuant to the Bankruptcy and Insolvency Act of Canada.  These proposals, accepted by the required majority of creditors, allows for the operating subsidiary to maintain operations and generate funds from those operations to pay a portion of its pre-proposal liabilities.  For Biotech Laboratories Inc., secured creditors, all being related parties, claimed $9,808,057 of which the net value of the security was estimated to be $568,096.  Unsecured creditors claimed $9,605,170, which included $9,239,961 unsecured debt by secured creditors.  For the Company, all being related parties, claimed $2,702,961.  Unsecured creditors claimed $153,560.  Under the proposal, preferred creditors shall be paid in full in priority to all claims of unsecured creditors.  Provision for payment of claims of unsecured creditors shall be made in the lesser amount of 10% and $25,000 on each day, which is one year, one year six months and two years, respectively, after the end of the month of court ratification.  The proposals also allow the companies to provide ongoing business to its suppliers.  Creditors of the subsidiary after the filing of the proposal will be paid in full, in priority to preferred and general unsecured creditors.

In July 2006 the trustee acting in the proposal of the Company filed a certificate with the Supreme Court of British Columbia that certified that the Company had fully performed its obligations required under the proposal.  At the same time, the trustee acting in the proposal of Biotech Laboratories Inc. filed a notice with the Supreme Court of British Columbia stating that Biotech Laboratories Inc. was in default in performing its obligations required under its proposal and its creditors could take proceedings to place Biotech Laboratories Inc. in bankruptcy at their own expense



Biotech Holdings Ltd.

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

March 31, 2008 and 2007



16.	Reconciliation of Certain Differences Between U.S and Canadian Generally Accepted Accounting Principles

The consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles ("Canadian GAAP") which, in the case of the Company, conform in all material respects with those of the United States ("US GAAP") and with the requirements of the Securities and Exchange Commission ("SEC"), except as follows:

1. The Company had a policy of capitalizing a portion of its development costs which relate to the development of proprietary formulas for the Company's discontinued operations respecting its healthcare product line.  Additionally, in prior years, the Company capitalized certain deferred costs.  US GAAP would require these expenditures to be expensed in the year incurred.

The effect of the above on total assets (per US GAAP) would be to reduce total assets at March 31, 2008 by $Nil (2007 - $Nil, 2006 - $Nil).



| |                                               |  |               |  |               |  |              
| | --------------------------------------------- |  | ------------- |  | ------------- |  | -------------
| |                                               |  | 2008          |  | 2007          |  | 2006         
| |                                               |  |               |  |               |  |              
| | Net loss for the year per Canadian GAAP       |  | $	(1,451,119) |  | $	(1,534,895) |  | $	(2,019,378)
| | Amortization and write-off of deferred costs, |  |               |  |               |  |              
| | net of development expenses during            |  |               |  |               |  |              
| | the year (a)                                  |  | -             |  | -             |  | -            
| |                                               |  |               |  |               |  |              
| | Net loss and comprehensive loss               |  |               |  |               |  |              
| | per US GAAP                                   |  | $ (1,451,119) |  | $	(1,534,895) |  | $	(2,019,378)
| |                                               |  |               |  |               |  |              
| | Loss per share in accordance with US GAAP     |  | $	(0.02)      |  | $	(0.02)      |  | $	(0.02)     



| | The impact of the above-noted differences on total shareholders` deficiency is as follows:
| | ------------------------------------------------------------------------------------------
| |                                                                                           
| |                                                                                           
| | Shareholders' equity (deficiency) per
Canadian GAAP                                       
| | Unamortized balance of deferred costs (a)                                                 
| |                                                                                           
| | Shareholders' (capital deficit)                                                           
| | per US GAAP                                                                               







Biotech Holdings Ltd.

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

March 31, 2008 and 2007

17. Subsequent Event

In April, 2008, the Company announced that it had granted a total of 1,838,600 options allocated among officers, directors, employees and consultants.   All of the options have an exercise price of $.10 per share, would vest October 31, 2008 and expire March 31, 2010.

18. Restatements as a Result of Correcting Stock Compensation Expense

The Company`s balance sheet, statements of operations, statements of cash flows, and statements of changes in shareholders` deficiency have been restated for the years ended March 31, 2006 and 2005.  In determining the stock-based compensation expense for the years ended March 31, 2006 and 2005, the Company amortized stock based compensation expense for unvested employee stock options over the life of the options.  In the Company`s March 31, 2007 review of stock compensation expense, the Company determined that it had not considered CICA Handbook Section 3870.49- Stock-based Compensation and Other Stock-based Payments.

To correctly account for the stock options granted to employees,  the stock based compensation expense should have been recognized over the service period, which is presumed to be the period from the grant date to the date that the award is vested and its exercisability does not depend on continued employee service.

The following presents the effect on the Company`s previously issued financial statements for the years ended March 31, 2006 and 2005:

Balance sheet as at March 31, 2006 -



|                    | Previously Reported | Increase (Decrease) | Restated    
|------------------- | ------------------- | ------------------- | ------------
|                    |                     |                     |             
|Contributed Surplus | 723,935             | 143,472             | 867,407     
|Deficit             | (29,595,443)        | (143,472)           | (29,738,915)







Biotech Holdings Ltd.

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

March 31, 2008 and 2007

18. 	Restatements as a Result of Correcting Stock Compensation Expense (continued)

Statement of operations for the year ended March 31, 2006-



|                                | Previously Reported | Increase (Decrease) | Restated   
|------------------------------- | ------------------- | ------------------- | -----------
|                                |                     |                     |            
|Stock-based compensation        | 283,544             | 82,733              | 366,277    
|Loss from continuing operations | (2,012,869)         | (82,733)            | (2,095,602)
|Net loss for the year           | (1,936,645)         | (82,733)            | (2,019,378)



Statement of cash flows for the year ended March 31, 2006-





|                                | Previously Reported | Increase (Decrease) | Restated   
|------------------------------- | ------------------- | ------------------- | -----------
|                                |                     |                     |            
|Loss from continuing operations | (2,012,869)         | (82,733)            | (2,095,602)
|Stock-based compensation        | 283,544             | 82,733              | 366,277    

19. Recent Accounting Pronouncements

This Section details recent accounting pronouncements that impact these and future financial statements.

International Financial Reporting Standards ("IFRS")

In 2006, the Canadian Accounting Standards Board ("AcSB") published a new strategic plan that will significantly

affect financial reporting requirements for Canadian companies. The AcSB strategic plan outlines the convergence of Canadian GAAP with IFRS over an expected five year transitional period. In February 2008 the AcSB announced that 2011 is the changeover date for publicly-listed companies to use IFRS, replacing Canada`s own GAAP. The date is for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011. The transition date of January 1, 2011 will require the restatement for comparative purposes of amounts reported by the Company for the year ended December 31, 2010. While the Company has begun assessing the adoption of IFRS for 2011, the financial reporting impact of the transition to IFRS cannot be reasonably estimated at this time.

Inventories

In March 2007, the AcSB approved a new standard with respect to inventories effective for fiscal years beginning on or after January 1, 2008. The new standard requires inventories to be measured at the lower of cost or net realizable value; disallows the use of a last-in, first-out inventory costing methodology; and requires that, when circumstances that previously caused inventories to be written down below cost no longer exist, the amount of the write-down is to be





Biotech Holdings Ltd.

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

March 31, 2008 and 2007

19. Recent Accounting Pronouncements (continued)

reversed. The adoption of this new standard is not expected to have a material impact on the Company`s earnings.

Capital Disclosures

As a result of new Section 1535, Capital Disclosures, the Company will be required to include additional information in the notes to the financial statements about its capital and the manner in which it is managed. This additional disclosure includes quantitative and qualitative information regarding an entity`s objectives, policies and procedures for managing capital. This Section is applicable for the fiscal year beginning on April 1, 2008.

Disclosure and Presentation of Financial Instruments

New accounting recommendations for disclosure and presentation of financial instruments are effective for the Company beginning April 1, 2008. The new recommendations require disclosures of both qualitative and quantitative information that enables users of financial statements to evaluate the nature and extent of risks from financial instruments to which the Company is exposed.

Goodwill and Intangible Assets

The Accounting Standards Board has also issued a new Section 3064, Goodwill and Intangible Assets, to replace current Section 3062, Goodwill and Other Intangible Assets. The new section establishes revised standards for recognizing, measuring, presenting and disclosing goodwill and intangible assets. CICA 3064 is effective for fiscal years beginning on or after October 1, 2008 and will be adopted by the Company for the year ending March  31, 2009.

Recent Accounting Pronouncements (US)

Fair value measurement

In September 2006, the Financial Accounting Standards Board ("FASB") issued SFAS No. 157, "Fair Value Measurement" ("SFAS 157"). The Statement provides guidance for using fair value to measure assets and liabilities. The Statement also expands disclosures about the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurement on earnings. This Statement applies under other accounting pronouncements that require or permit fair value measurements. This Statement does not expand the use of fair value measurements in any new circumstances. Under this Statement, fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the entity transacts. SFAS 157 is effective for the Company for fair value measurements and disclosures made by the Company in its fiscal year beginning on April 1, 2008. The Company is currently reviewing the impact of this statement.

Employers accounting for defined benefit pension and other postretirement plans

In September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans - an amendment of FASB Statements No. 87, 88, 106 and 132(R)" (SFAS 158"). SFAS 158 requires an employer that sponsors one or more single-



Biotech Holdings Ltd.

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

March 31, 2008 and 2007

19. Recent Accounting Pronouncements (continued)

employer defined benefit plans to (a) recognize the overfunded or underfunded status of a benefit plan in its statement of financial position, (b) recognize as a component of other comprehensive income, net of tax, the gains or losses and prior service costs or credits that arise during the period but are not recognized as components of net periodic benefit cost pursuant to SFAS 87, "Employers' Accounting for Pensions", or SFAS 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions", (c) measure defined benefit plan assets and obligations as of the date of the employer's fiscal year-end, and (d) disclose in the notes to financial statements additional information about certain effects on net periodic benefit cost for the next fiscal year that arise from delayed recognition of the gains or losses, prior service costs or credits, and transition asset or obligation. SFAS 158 is effective for the Company's fiscal year ending March 31, 2008. The adoption of SFAS No. 158 is not expected to have a material impact on the Company's financial position, results of operations or cash flows.

Accounting for servicing of financial assets

In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of Financial Assets", which amends SFAS No. 140 "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities". SFAS No. 156 may be adopted as early as 1 January 2006, for calendar year-end entities, provided that no interim financial statements have been issued. Those not choosing to early adopt are required to apply the provisions as of the beginning of the first fiscal year that begins after 15 September 2006 (e.g. 1 January 2007, for calendar year-end entities).  The intention of the new statement is to simplify accounting for separately recognized servicing assets and liabilities, such as those common with mortgage securitization activities, as well as to simplify efforts to obtain hedge-like accounting.

Specifically, the FASB said SFAS No. 156 permits a service using derivative financial instruments to report both the derivative financial instrument and related servicing asset or liability by using a consistent measurement attribute, or fair value.  The adoption of SFAS No. 156 is not expected to have a material impact on the Company's financial position, results of operations or cash flows.

Accounting for certain hybrid instruments

In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid Financial Instruments", which amends SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" and SFAS No. 140. SFAS No. 155 permits fair value measurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation, establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or hybrid financial instruments containing embedded derivatives. The adoption of SFAS No. 155 is not expected to have a material impact on the Company's financial position, results of operations or cash flows.

The Fair Value Option for Financial Assets

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities- Including an amendment of FASB Statement No. 115."  SFAS No. 159 permits entities to measure eligible assets and liabilities at fair value.  Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings.  SFAS No. 159 is effective for fiscal years beginning after November 15, 2007.  The Company is



Biotech Holdings Ltd.

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

March 31, 2008 and 2007

19. Recent Accounting Pronouncements (continued)

currently investigating the impact of this pronouncement and has not yet determined the impact on the consolidated financial statements.

Business Combinations

In December 2007, the FASB issued Statement No. 141(Revised 2007), "Business Combinations" (SFAS No. 141(R)).  SFAS No. 141(R) requires an acquiring entity to recognize all the assets acquired and liabilities assumed in a transaction at the acquisition-date fair value with limited exceptions.  SFAS No. 141(R) also changes the accounting treatment for certain specific items.  SFAS No. 141(R) applies prospectively to business combinations for which the acquisition date is on or after the first annual reporting period beginning on or after December 15, 2008.  The Company is currently investigating the impact of this pronouncement and has not yet determined the impact on the consolidated financial statements.

Non-controlling Interests in Consolidated Financial Statements

In December 2007, the FASB issued SFAS No. 160, "Non-controlling Interests in Consolidated Financial Statements- An Amendment of ARB No. 51."  SFAS No. 160 establishes new accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary.  This statement requires the recognition of a non-controlling interest (minority interest) as equity in the consolidated financial statements and separate from the parent`s equity.  SFAS No. 160 is effective for fiscal years and interim periods within those fiscal years beginning on or after December 15, 2008.  The Company does not expect adoption of this pronouncement to have a material impact on the consolidated financial statements.

Accounting for Collaborative Arrangements Related to the Development and Commercialization of Intellectual Property

In December 2007, the FASB ratified the consensus reached on EITF 07-1, "Accounting for Collaborative Arrangements Related to the Development and Commercialization of Intellectual Property."  EITF 07-1 defines collaborative arrangements and establishes reporting requirements for transactions between participants in a collaborative arrangement and between participants in the arrangement and third parties.  EITF 07-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years.  The Company does not expect adoption of this pronouncement to have a material impact on the consolidated financial statements