Biocon AR2011

Brand Biocon
At the Intersection of Patient + Therapy
ANNUAL REPORT 2011
DIABETOLOGY ONCOTHERAPEUTICS NEPHROLOGY CARDIOLOGY COMPREHENSIVE CARE IMMUNOTHERAPY
Biocon has established itself as an emerging global biopharmaceutical innovator in just over a decade. Strategically leveraging a portfolio approach focused on chronic disease segments and integrating well validated target-to-clinic-to-counter capabilities, we have built considerable brand equity and are on the path to delivering affordable innovation. Within a short span of time, we have brought to market an impressive portfolio of medically vital products. Our growing ability to offer affordable and differentiated medicines positions us at the challenging intersection of patient and therapy.
Biocons comprehensive range of branded products in key disease segments
2011
BRAND BIOCON
At the Intersection of Patient + Therapy
The second largest in volume, 12th in value and by 2015, a USD 20 billion* market potential India is forecast to be among the top 10 pharma destinations of the world. This robust growth has been fueled by increased purchasing power, access to better healthcare, wider adoption of international GCP/GMP norms, an improving IP and regulatory landscape, growing investment in health sector infrastructure, and rapidly developing R&D expertise and funding. Strategically positioned in this expanding market is Biocon. W ith a tailwind of twelve years in biopharmaceuticals and a flexible yet well balanced biopharma strategy, we are committed to factoring more for less into all our offerings. Biocons affordable innovation platform, dovetailed with world class capabilities along the drug value chain has enabled the Companys successful foray into the branded formulations market.
With a tailwind of twelve years in biopharmaceuticals and a flexible yet well balanced biopharma strategy, Biocon is committed to factoring more for less into all its offerings.
Biocons Brandfolio targets chronic diseases from diabetes, cancer, endstage renal illnesses to immune disorders and other life-threatening conditions. Marketed primarily in India, parts of Asia, Latin America, Middle East and Africa, we offer our products to healthcare providers, including physicians, clinics, hospitals and pharmacies. Significantly, we market proprietary molecules and conduct critical clinical trials in therapeutic areas, such as locally advanced head and neck cancers, cervical cancers, brain tumors, etc. that are a huge unmet need in the Global patient population. Beyond therapy, Biocon supports select products with patient friendly initiatives in disease awareness, prevention and management. We also assist healthcare professionals and patients with the treatment of complex medical conditions. To successfully penetrate the Indian branded formulations market, Biocon recognizes the important synergies derived from research and marketing partnerships. We believe, collaborative innovation will accelerate our pace of development, while marketing alliances will help extend our reach into local
geographies. We also aim to leverage partnerships to capture emerging opportunities in biosimilars. In the next 3 to 10 years, as a number of patents expire, Biocon will harness its India advantage to generate these technologically feasible and economically imperative alternatives to expensive biologics. Today, sales from branded formulations (both injectables and oral dosages) account for a sizeable portion of Biocons revenues. Our products are already among the top ten brands in their respective verticals of oncology, cardiology, nephrology and diabetology. Going forward, we aim to step up our presence in the domestic market by aggressively launching more medicines and thereby, increasing the contribution of our brandfolio to more than 25% of total revenues. In achieving this business target, we aim to accomplish a far more significant goal: making better therapies available and accessible to patients in India and eventually the world.
*Pharma Trends 2011
Biocon Annual Report 2011 Brand Biocon 05
01 Brand Biocon
DIABETOLOGY
The spread of diabetes has reached alarming proportions with developing countries bearing the brunt of this epidemic in the 21st century. By next year, India will be home to over 50 million diabetics, making it the worlds diabetes capital. By 2030, that number will hit a staggering 87 million, effecting nearly 8% of the countrys adult population*.
The Market Opportunity

Worlds largest diabetes patient pool Success of newly launched drugs Increasing diagnosis and drug treated rates A rapidly growing market In 2010, total sales of insulin and oral anti-diabetics in India reached INR 28 billion, of which, the market for oral anti-diabetics was worth INR 17 billion**. With the number of diabetics increasing, the market, over the next five years, will be driven by the strong uptake of insulin analogs.
Milestones
Biocon Diabetology is ranked 12th in its represented market in India Insugen has more than 10% market share in India Insugen is now available in Latin America, Middle East, Asia and North Africa Insugen 100 IU was launched in December 2010
Insugen is the fastest growing drug in its class in India
Affordability Index
(as compared to the leading brand in that category)
Biocon Diabetology
Launched in 2004, this division has successfully introduced into the Indian market a range of oral anti-diabetic drugs, human insulins and insulin analogs. In its portfolio is one blockbuster brand and several other high quality, affordable drugs that doctors and patients continue to endorse. In fact, Biocon is the only company, among the 61 players in the antidiabetes space, to have demonstrated success with both, insulins and oral anti-diabetics.
Flagship Brands
Insugen By far the most affordable brand in India, Insugen remains Indias most clinically validated r-DNA insulin. Launched 7 years ago, Insugen has brought about a paradigm shift in the insulin market and is today, a leading drug in its class. BASALOG The launch of BASALOG in the last fiscal boosted divisional sales, garnering considerable market share in the analog market, hitherto dominated by brands from foreign multinational companies. Today, BASALOG is a formidable player, having successfully allayed apprehension about the acceptance of analog insulin in vials.
* International Diabetes Foundation, 2009 ** IMS MAT: Dec 2010
Insugen BASALOG
~20% ~40%
Marketed Products
Insugen 30/70 100 IU Insugen 50/50 100 IU Insugen N 100 IU Insugen R 100 IU INSUGEN 30/70 40 IU INSUGEN 50/50 40 IU INSUGEN N 40 IU INSUGEN R 40 IU BASALOG BLISTO BLISTO MF METADOZE IPR TriGPM ZUKER MF PIODART PIODART MF OLISAT GABIL GMAB Plus
Winning With Diabetes

This patient friendly initiative has greatly enhanced the reputation of BASALOG by helping diabetics improve the quality of their lives through effective medication and self monitoring. Till date, over 12,500 patients have registered with our helpline and 7,400 Breeze 2 glucometers have been delivered to patients on a complimentary basis.
ABIDE
This medical education forum aims to create an enabling IT-based doctorpatient interface for dissemination of medical information and training modules to diabetics and physicians located in remote regions of India.
Biocon Annual Report 2011 Diabetology 07
02 Brand Biocon
ONCOTHERAPEUTICS
Cancer is one of the 10 leading causes of death in India. No longer considered a disease of developed nations, more than 700,000 new cancer cases are being registered in India per annum. The National Cancer Registry Program data indicates that at any given time, there are about 2.5 million cancer patients in India with approximately 450,000 cancer-related deaths each year.

More than 50% increase in breast, ovarian, prostrate and head & neck cancer incidence Rising demand for latest tumor-fighting therapies High unmet need underserved patient population The market for chemotherapeutic drugs in India is estimated to be worth INR 12 billion based on in-hospital sales of anti-cancer drugs. This market is forecast to grow at a CAGR of 16% over the next 5 years to reach INR 26 billion*.
Milestones
Abraxane is ranked 3rd in the hypercompetitive taxanes market NUFIL is ranked among the top four brands in its segment Evertor is the first generic everolimus to be launched in India
Till date, over 2,500 Indian patients have been treated with BIOMAb EGFR
Affordability Index
Biocon Oncotherapeutics
Launched in 2006, Biocon Oncotherapeutics is committed to delivering novel yet affordable cancer therapies. Its comprehensive range of cancerchemotherapy and supportive drugs are led by BIOMAb EGFR (a humanized monoclonal antibody for head and neck cancer), Abraxane (a US FDA approved anti-cancer drug for breast cancer), Evertor (the first generic everolimus for the treatment of advanced renal cell carcinoma) and NUFIL safe (GCSF for chemotherapy induced neutropenia). The division aims to strengthen its position in the Indian market by focusing on growth areas of pain management and haematological malignancies.
Flagship Brands
BIOMAb EGFR In India, BIOMAb EGFR is approved for the treatment of locally advanced head and neck cancers in combination with radiotherapy and/or chemotherapy. Since its launch in September 2006, over 200 oncologists have endorsed BIOMAb EGFR by extending the benefit of this molecule to over 2,500 Indian patients. In line with Biocons focus on affordable innovation, BIOMAb EGFR is available to Indian patients at a cost 40% lower than other anti-cancer therapies in the same class and indication. Abraxane A best-in-class taxane launched in India in 2008, Abraxane, used in the treatment of metastatic breast cancer, is making steady inroads into the highly fragmented and hypercompetitive Indian taxane market. With significant sales growth over the last fiscal, Abraxanes efficacy is increasingly being acknowledged by oncologists.
* Datamonitor
BIOMAb EGFR Abraxane
~40% ~60%
Marketed Products
BIOMAb EGFR Abraxane NUFIL safe NUFIL EvertorTM ERYPRO safe
Biocon Annual Report 2011 Oncotherapeutics 09
03 Brand Biocon
NEPHROLOGY
Chronic kidney disease (CKD) and its progression to end-stage renal disease (ESRD) is rapidly turning into a worldwide public health epidemic. In addition to increasing patient morbidity and mortality risks, these conditions result in major financial strain on healthcare systems. Incidence of chronic diseases like diabetes and hypertension among Indians is alarmingly high and it is estimated that around 25% of people suffering from these diseases are likely to develop CKD.

Cadaveric transplants expected to increase through organ donation awareness Less than10% of ESRD patients receive meaningful renal replacement therapies (RRT) either as dialysis or transplantation Better coordination of tertiary with primary healthcare centers set to push diagnosis and treatment of CKD The Indian Nephrology market is estimated to be growing at an approximate 11% YoY. The domestic dialysis market is driven by strong demand for erythropoietin (EPO) in the management of anemia in CKD, while the immunosuppressant market is driven by a steady growth in organ transplants.
Milestones
Biocon Nephrology has achieved a CAGR of over 20% ERYPRO safe is ranked among the top 5 brands in its category RENODAPT ranks No. 3 in a segment consisting of 25 brands TACROGRAF is in the No. 2 position, overtaking 25 competing brands
TACROGRAF has attained No. 2 position, overtaking 25 brands in its category
Affordability Index
Biocon Nephrology
Biocon Nephrology aims to provide the most comprehensive and cost-effective therapies for ESRD patients. As one of the largest manufacturers of immunosuppressants in the world, Biocon has the widest range of products for the treatment of organ transplantation, coupled with innovative safety solutions for renal anemia management. The division is focused on taking its affordable yet world class brands to global markets while achieving leadership in the Indian nephrology segment.
Flagship Brands
TACROGRAF Occupying No. 2 position in the highly congested tacrolimus market consisting of more than 25 brands, TACROGRAF has the broadest dosage range. Its safety and efficacy have been well established in clinical practice in India. In the coming years, TACROGRAF is expected to play a central role in the immunosuppressive protocols of major transplant centers across India. RENODAPT The mycophenolic acid (MPA) market, the largest in the immunosuppressive space, is also the most crowded and price sensitive. RENODAPT is the third largest brand in the MPA space with huge potential for growth. Since launch in 2007, RENODAPT has well-established efficacy and safety data in Indian transplant recipients.
TACROGRAF ERYPRO safe Advacan
~30% ~24% ~45%
Marketed Products
Immunosuppressants TACROGRAF RENODAPT RENODAPT-S CYCLOPHIL ME RAPACAN Advacan
Doctor Initiatives
Ren@links, a monthly e-newsletter providing scientific updates in the field of nephrology and organ transplantation Post-Transplant Patient Monitoring Data Management Software for management of patient data by transplant centers Stand-alone Conferences to demonstrate strong commitment to good science through international speaker programs in nephrology and transplantation
Dialysis ERYPRO safe ERYPRO ERYPRO PFS Narita + biOSEV CeRACal
Biocon Annual Report 2011 Nephrology 11
04 Brand Biocon
CARDIOLOGY
Heart disease is the number one killer in the world and India carries more than its share of this burden. Moreover, the problem is set to rise: it is predicted that by 2020, India will have 100 million heart patients, amounting to approximately 60% of people suffering from heart disease, globally.

The Indian cardiovascular drug market is growing at a CAGR of around 20%. It is expected to burgeon into a USD 3 billion market opportunity by 2015. Antihypertensive drugs account for the biggest (50%) share of revenue, closely followed by cholesterol lowering drugs.
Milestones
STATIX has established formidable equity with cardiologists in a short span CLOTIDE is the leading eptifibatide brand in India MYOKINASE is the No. 2 brand of streptokinase in India within 12 months of launch
In a market of many brands, STATIX stands out as the purest atorvastatin
Affordability Index
Biocon Cardiology
Since its inception in 2008, Biocon Cardiology has focused on providing differentiated and affordable therapies to patients suffering from cardiovascular diseases. In a span of three successful years, this division has launched an optimum mix of brands all of which performed exceedingly well in the market.
Flagship Brands
STATIX In a market of many brands, STATIX continues to stand out as the purest atorvastatin. Its highly differentiated features offer enhanced efficacy due to faster rate of atorvastatin absorption, and improved stability resulting from smaller and uniform size distribution. STATIX has been endorsed by Indias leading cardiologists and promoted through well attended countrywide lipid camps. MYOKINASE Used in Acute Myocardial Infarction, the methionine-free technology of MYOKINASE has spurred a countrywide revolution. In just 12 months, MYOKINASE has become the No. 2 brand in the country, having saved the lives of 60,000 patients till date. Some of the most reputed hospitals in the country endorse MYOKINASE.
BESTOR MYOKINASE STATIX CLOTIDE
~30% ~10% ~40% ~10%
Patient Friendly Lipid Camps Marketed Products

STATIX STATIX F STATIX-EZ TELMISAT TELMISAT-H TELMISAT-AM ACTIBLOK-IPR ACTIBLOK AM BESTOR BRADIA THINRIN CLASPRIN ZARGO ZARGO H ZIGPRIL MYOKINASE DYNALIX CLOTIDE PRASACT TIROZEST
Biocon Cardiology organizes Lipid Camps across India to profile its leading lipid-lowering brand STATIX and enable more patients to understand their lipid numbers and take early corrective action with the advice of a physician. The Camps were well attended, appreciated by patients and doctors alike.
Biocon Annual Report 2011 Cardiology 13
05 Brand Biocon
COMPREHENSIVE CARE
Hospital-acquired or nosocomial infections are a growing healthcare concern worldwide, with critically ill patients in intensive care units (ICUs) at particular risk. In India, 10-30% of patients admitted to hospitals and nursing homes contract nosocomial infections as against 5% in the West*. It is imperative that the highest priority be assigned to prevention and control of these infections in order to reduce morbidity, mortality and costs of therapy.

Anti-infective is the fastest growing therapy in the hospital market -lactam antibiotics are the most widely prescribed medicines, among injectables The anti-infective segment is the largest therapeutics market in India, growing at a CAGR of 20%. In the coming years, this escalation is expected to continue owing to the development of novel drug classes and increased R&D investments in this therapeutic category. High prevalence of certain viral/bacterial infections among the Indian population and a dramatic increase in resistance towards conventional antibiotics by certain micro-organisms have resulted in opportunities to bring into the market new anti-infective products.
More than 82,000 units of CELRIM/CELRIM TZ were sold within 6 months of launch
Biocon Comprehensive Care

Launched in 2010, Biocon Comprehensive Care positions itself in the critical illness segment with an existing anti-infective portfolio and the introduction of novel therapies in surgical trauma and medical emergencies. Despite being a young entrant into the Indian market, the division has established a strong foothold in major corporate hospitals across the country and its products are widely accepted by the intensive care community.
Flagship Brands
Biopiper TZ Indicated for intra-abdominal infections, skin and skin structure infections, and pneumonia, Biopiper TZ was launched into a highly competitive market. Owing to its effectiveness and affordability, this drug has witnessed steep growth and is en route to becoming a big brand in the market. CELRIM/CELRIM TZ Indicated for the treatment of urinary tract infections, skin and skin structure infections, pneumonia and bacteraemia, CELRIM/CELRIM TZ has been extremely well accepted since its market launch.
Marketed Products
CELRIM CELRIM TZ Biopiper TZ IMICELUM PENMER PENMER 500 ENTAVAR ENTAVAR 600 MEEZAT GENPIROME
*Members of Hospital Infection Society (HIS), India
Biocon Annual Report 2011 Comprehensive Care 15
06 Brand Biocon
IMMUNOTHERAPY
Immunological disorders like atopic dermatitis, vitiligo and psoriasis are amongst the top 10 indications observed by dermatologists in India. It is estimated that over 2% of Indians struggle with the social, psychological and physical complexities associated with immunological disorders.

The immuno-dermatology market in India is growing at a rapid pace. While steroids and its combinations are the most common line of treatment for immunological disorders, the chronic and recurrent nature of these diseases makes non-steroidal or immunomodulators a preferred long term therapy option. The Indian market for immunomodulators is highly promising. Within this segment, the market size for tacrolimus and pimecrolimus is growing at approximately 15%.
Milestones
In addition to 10gm, 30 gm lami tube SKUs were introduced for the first time in India The launch of PSORID (cyclosporine capsules/oral solution) is a first among dermatological companies in India
PICON is poised to become the No.1 brand of pimecrolimus in India
Affordability Index
Biocon Immunotherapy
Launched in Oct 2010, Biocon Immunotherapy is focused on bringing to the market a portfolio of safe, efficacious and affordable immunomodulator drugs for the treatment of immune related disorders in dermatology. With an objective to build a large portfolio of brands and actively support the disease area, the division aims to establish its credentials and reinforce its commitment to the patient and physician communities. To date, we have launched three brands: TBIS, PICON and PSORID.
Flagship Brands
PICON and TBIS PICON is on its way to becoming the No.1 brand of pimecrolimus and TBIS is fast catching up with the brand leader. In just five months of launch, Biocon Immunotherapy has gained formidable market share in the immuno-derma market. The launch of 30 gm SKU is also expected to further strengthen brand equity in the area of immune related dermatological disorders.
PICON
~50%
Marketed Products
TBIS PICON PSORID
Biocon Annual Report 2011 Immunotherapy 17
2011
CHAIRMANS REVIEW
Dear Shareholders, After a transformational start to the millennium, we enter a new decade that will build on our vision to emerge as a global biopharmaceutical enterprise that delivers valuable and affordable products and services to patients, partners and healthcare providers the world over. Our efforts thus far, have seen us take calculated and deliberate steps to build a risk balanced portfolio of biopharmaceutical products and services through a number of valuable research and marketing partnerships. This judicious growth strategy has enabled us to become global suppliers of drug substances like statins, immunosuppressants and insulins. Adopting a portfolio approach for our research pipeline, we have created high value R&D assets that
The Biocon-Pfizer partnership is indeed a significant inflection point in our growth path. Our Companies bring together a winning combination of marketing, manufacturing and research excellence which will build a formidable global footprint in diabetes care
we are periodically unlocking through licensing or via market access. The path ahead is about building Brand Biocon through products that can make a difference to chronic diseases like diabetes, cancer, cardiovascular, autoimmune and renal malfunction. The journey ahead is therefore one of value added transition. From drug substance to drug product. From Drug Master Files (DMFs) to Product Dossiers. Over the last decade, Biocon has built significant brand equity across our customer base. The task before us now, is to extend that brand recognition to our products in the retail market. In building Brand Biocon, we look beyond the market and aim to deliver medical education to healthcare professionals and patients with a view to create greater awareness of disease management and thereby, better out-
come. Brand Biocon is committed to making a difference to patients through affordable drug innovation. I am very happy to share with you the progress we have made in creating this brand recognition. Brand Building through Differentiation and Specialization We have adopted a well researched business strategy to develop products that address chronic therapies in select disease segments. We have identified anchor products to spearhead the launch of our brands into the Indian market. The first such key product was recombinant human insulin branded Insugen that launched our Diabetology division in 2004. Entering at the lowest rung, we have worked our way up the anti-diabetic value chain to be ranked 12th in our represented market last fiscal. Insugen is a leading brand in the country today, rapidly narrowing the gap with its innovator counterparts.
Biocon Annual Report 2011 Chairmans Review 19
01 Net income increased 17% to INR 28,137 million 02 Profits grew 25% to an all time high of INR 3,675 million
Our first insulin analog Glargine, branded BASALOG was introduced into the market in 2010 and is already the No. 2 brand. We have innovatively supported this division by a successful patient engagement program, Winning with Diabetes, and are now creating a medical education forum, ABIDE. This forum enables doctor-patient interface based on an IT platform and aims to disseminate medical information and training modules to diabetics and physicians in remote reaches of the country. Spurred by the success of our insulins, we entered into an exciting agreement with Pfizer to address a large and lucrative global biosimilar insulin opportunity. Biocon has also developed a very strong portfolio around Chronic Kidney Disease. Our Nephrology division has performed exceedingly well with its flagship brands TACROGRAF (tacrolimus) now occupying the No. 2 position in the market and RENODAPT (mycophenolate mofetil) the third largest brand in its category. Impressive branding, high share of noise in the market and a differentiated safety device have propelled the success of
our ERYPRO group of erythropoietin based therapies for the dialysis segment. In Oncology, our brand portfolio has garnered impressive market share. Anchored by our proprietary, anticancer MAb, BIOMAb EGFR and supported by our flagship albumin fusion nanoparticle taxane, Abraxane and our biosimilar Granulocyte Stimulating Factor (GCSF), NUFIL, the division is gaining good traction in the market having recorded a robust YoY growth this fiscal. The fourth division, Cardiology, launched in 2008 has been propelled by our flagship brand STATIX to a ranking of 23 in a highly crowded market. Q3 2011 saw the launch of PRASACT (prasugrel) and TIROZEST (tirofiban) to consolidate our interventional cardiology portfolio. Recent introductions like BESTOR (rosuvastatin) and ACTIBLOK (metoprolol) continue to follow a high growth trajectory. In FY 2011, we added two more divisions, Immunotherapy and Comprehensive Care. The Immunotherapy focus in Phase I, is on introducing molecules for the treatment of
immune-related dermatological disorders, launched with two differentiated molecules in its armory TBIS (tacrolimus) and PICON (pimecrolimus), for the treatment of atopic dermatitis and vitiligo. Both drugs have been well accepted and are performing exceedingly well in the market. To cater to the critical care segment, Biocon launched a Comprehensive Care Division to provide affordable, quality medicines for illness including nosocomial infections, post-surgical complications, trauma and medical emergencies. I am proud to declare that within just six months from launch, this division has gained entry to the countrys best corporate hospitals with its high quality portfolio of specialty products.
Research & Development

Biocons R&D has had a successful, decade long track record of innovation. Our research efforts have generated a pipeline of generic small molecules, biosimilars and novel biologics with the potential of unleashing high value growth in a sustained manner over the foreseeable future.
03 Research Services business crossed INR 3,175 million in revenue 04 Licensing and Development fees grew 201% to INR 1,525 million
Our portfolio of generic molecules has enabled us to garner a dominant position as a supplier of generic APIs viz. statins and immunosuppressants to US, European and Latin American markets. This, I am pleased to say, has yielded good financial returns and has allowed us to forge very strong partnerships with global generics companies. One such partner, Mylan, has extended this relationship in 2009, to a portfolio of biosimilar monoclonal antibodies. In October 2010, we announced a global commercialization partnership with Pfizer for our portfolio of recombinant human insulin and insulin analogs. Given the growing incidence of diabetes the world over, biosimlar insulins offer a large market opportunity from 2014. Our novel pipeline is also rapidly advancing into the clinic. The most advanced programs are IN-105 (oral insulin) and T1h (itolizumab), an anti-CD6 targeting MAb, both of which have completed a Phase II/III proof of efficacy clinical studies. Although oral insulin did not meet its desired primary end-point of HbA1c lowering, this was attributable to an unexpectedly high placebo effect due to frequent self
blood glucose monitoring. However, all secondary end-points were met, indicative of proof of action, another program, BVX-20, a humanized antiCD20 monoclonal antibody being co-developed with Vaccinex, is about to enter the clinic. Two more in early stages of development are: a hybrid peptide with dual pharmacology for type II diabetes being co-developed with Amylin; and immunoconjugated MAbs which will function as tumor vaccines, being developed with IatriCa, a start-up which originated from a discovery made at the Johns Hopkins University. We expect to initiate discussions for partnering a few of these programs in the coming fiscal.
our insulins portfolio. Pfizer will have exclusive and a few co-exclusive rights to commercialize these products globally, while Biocon will be responsible for the clinical development, manufacture and supply of these biosimilar insulin products. We firmly believe this landmark partnership will drive considerable growth in the foreseeable future. Optimer FY 2011 also saw Biocon and Optimer Pharmaceuticals Inc. enter into a long term supply agreement for the commercial manufacturing of the API, fidaxomicin, Optimers new drug for the treatment of C. difficile. I believe, our partnership with Optimer is an emphatic recognition of Biocons capabilities as an R&D partner as well as an acknowledgement of our global biomanufacturing strength. I am delighted to inform you that Optimer has just received US FDA approval for this molecule which positions Biocon as a sole supplier of this drug substance for the market launch.
Strategic Partnerships
Partnering has always been at the heart of Biocons business philosophy and we will continue to build value through strategic partnering. We have sought both research and marketing partnerships as a way to make global impact. Pfizer The most visible and high profile partnership that we recently announced was with the worlds leading pharmaceutical company, Pfizer, to commercialize
05 Human Resources headcount rose to 5,500+ employees 06 Net R&D spend, including clinical development, at INR 1,346 million
Strategic Foreign Direct Investment

World class infrastructure and attractive tax incentives make Malaysia a compelling destination for biotechnology. Investing in Malaysia provides us with an international location with strategic geographical proximity to India. Biocon is pleased to be an early mover in this emerging opportunity and have agreed to invest in establishing a biomanufacturing facility at Bio-XCell, a custom-built biotechnology park in Iskandar Malaysia, Johor. This investment is the largest for the Malaysian biotechnology sector thus far. In the first phase, Biocon proposes to invest around RM 500 million (approximately USD 161 million) to create an insulin manufacturing facility targeted to be operational by 2014.
partnered co-development on a risk sharing platform. Between Syngene and Clinigene, we are uniquely placed to offer end-to-end integrated services in both small and large molecules. Our partnership with Bristol-Myers Squibb is a fore runner of this integrated service model. The customized R&D hub, BBRC, that has been created at Syngene, is enabling BMS to pursue pipeline development through a team of over 450 scientists working seamlessly with BMS labs in the U.S.
GmbH, to the existing group of promoter shareholders. We believe that this is in the best interests of the shareholders of both companies. Axicorp has done an admirable job in sustaining profitability under difficult external circumstances, triggered by German healthcare reforms. Biocon wishes AxiCorps management and employees the very best in their future endeavors.
Corporate Social Responsibility

The year gone by saw Biocon Foundation being focused on integrating its health initiatives to maximize their impact and relevance to the communities it works with. By bringing together the Foundations programs in preventive healthcare, primary healthcare and health insurance for surgery and other hospital care, we aim to make our healthcare interventions more effective, sustainable and scalable. In FY 2011 we concentrated on preventive health, particularly addressing problems related to the paucity of doctors. Keeping this in mind, we train community health workers to be peer educators and
Beyond Borders
NeoBiocon After the successful launch of Abraxane in the UAE region, this year NeoBiocon has introduced a range of branded generic products in therapy areas of cardiology, diabetology and infection management. We are pleased with the progress of this JV and look forward to greater access to this high growth region. AxiCorp Pursuant to our global insulins partnership with Pfizer, I would like to announce that Biocon is divesting its stake in its German subsidiary, AxiCorp
Research Services
Our research services business supported by Syngene and Clinigene, continues to be a key growth driver, delivering a CAGR of 13%. We are well positioned to take advantage of the increasing trend in big pharma to externalize R&D. Additionally, there is a perceptible drift from fee for service and component services to integrated R&D and
07 Domestic branded formulations grew at a robust 36% 08 Interim dividend declared at 30%. Final dividend recommended at 60%
helpers who administer our programs, ranging from a unique mobile phone based cancer screening program, to preventive health education. Biocon and Biocon Foundation have also assisted the Government of Karnataka in building hundreds of homes for displaced families in the Bagalkot district of Karnataka that was severely affected by floods.
Looking Ahead
I strongly believe that what we have achieved so far is the beginning of a new era of growth. The critical mass
we have built in the domestic formulations space gives us the confidence to pursue a larger and more responsive brand position in the market. We are now Asias largest biopharma company and the only Asian company among the top 25 in global biopharma. We are committed to strengthening our growth trajectory through branded formulations, a strong R&D pipeline, an integrated portfolio of research services and strategic partnering that provides a global footprint. I would like to see Brand Biocon build on its core values of quality, affordability, reliability and innovation. That to me is the true and
enduring test of a successful brand in the global arena. Once again, I commend Biocons people for their entrepreneurial spirit, commitment, teamwork and integrity. Inspired by the tremendous possibilities of science, Team Biocon has remained admirably focused on advancing novel therapies, driving our businesses and supporting patient health, the world over. I look forward to the year ahead with a sense of confidence to deliver even greater value to all our stakeholders. Yours sincerely,
Kiran Mazumdar-Shaw May 2011
BIOCON
BOARD OF DIRECTORS
Dr. Neville Bain Chairman, Institute of Directors, UK + Chairman of two major UK pension funds and Director of Provexis Ltd. + Experienced Non-Executive Director with specialization in finance and good governance + Former Group CEO, Coats Viyella Plc. + Former Deputy Group Chief Executive and Finance Director, Cadbury Schweppes Plc. + Author of five management books on corporate governance, strategy and people management Prof. Charles L. Cooney Professor, Chemical & Biochemical Engineering, MIT, USA + Director, Intelligen Inc., Bioscale Inc., and LS9 Inc. + Recipient of prestigious awards, including Gold Medal of the Institute of Biotechnology Studies and Distinguished Service Award from the American Chemical Society
Dr. Bala S. Manian Chairman and Founder, Reametrix Inc. + Co-founder, Quantum Dot Corporation and Surromed Corporation, USA + Expert in the design of electro-optical systems + Authored several peer reviewed scientific publications and holder of many patents + Recognized through numerous awards for contributions as educator, inventor and entrepreneur, including Technical Academy Award in Digital Cinematography by Academy of Motion Pictures, Arts and Sciences Mr. Suresh Talwar Partner, Talwar Thakore & Associates + Director L&T Ltd., Birla Sun Life Insurance Co. Ltd., Blue Star Ltd., and other leading companies + Area of professional specialization includes corporate law and related fields + Legal Counsel to numerous Indian companies, multinational corporations and banks
Ms. Kiran Mazumdar-Shaw Chairman & Managing Director, Biocon + First generation entrepreneur with more than 33 years experience in biotechnology and industrial enzymes + Master Brewer, Ballarat University, Australia + Awarded the Padmabhushan, one of Indias highest civilian awards for her pioneering efforts in Biotechnology, 2005 Mr. John Shaw Vice Chairman, Biocon + Served in senior corporate positions at various locations around the world + Former Chairman, Madura Coats Ltd. Prof. Ravi Mazumdar University Research Chair Professor, Department of Electrical and Computer Engineering, University of Waterloo, Canada + Fellow of the Institute of Electrical and Electronics Engineers (IEEE) and Fellow of the Royal Statistical Society
CLINICAL ADVISORY BOARD
Prof. Catherine Rosenberg Alternate Director to Prof. Ravi Mazumdar, Biocon + Director, Syngene International Limited + University Research Chair Professor & Chairman + Department of Electrical & Computer Engineering, University of Waterloo, Canada Mr. Peter Bains Director, Syngene International Limited + Director, Peter Bains Consulting Limited + Director, Sosei, a Tokyo listed Japanese biotechnology company + Extensive track record of achievement as a senior pharma and life science executive Dr. G. Alexander Fleming MD, President and CEO of Kinexum LLC + Member of numerous Scientific Advisory Boards and Expert Committees Prof. Andrew Morris FMedSci, Professor of Medicine & Director, Biomedical Research Institute, University of Dundee Prof. Alan D. Cherrington PhD, Professor & Chairman of Molecular Physiology & Biophysics and Professor of Medicine & Diabetes Research, Vanderbilt University + Past President of the American Diabetes Association Dr. Kapil Dhingra Managing Member, KAPital Consulting LLC + Former Head, Roche Oncology Leadership Team Dr. Harold E. Lebovitz MD, FACE, Professor of Medicine, Endocrinology and Diabetes Division, State University of New York, Health Science Center, Brooklyn
Biocon Annual Report 2011 BOD + CAB 25
HIGHLIGHTS
28 30 35 39 41 42 44 44 46 52 60
Milestones Healthcare Marketing Research & Development Discovery Research Services: Syngene Clinical Research Services: Clinigene Human Resources Quality & Regulatory Environment, Health & Safety Corporate Social Responsibility Product Glossary Financial Highlights
2011
MILESTONES
01 Biocon and Pfizer enter into a global agreement for the worldwide commercialization of Biocons Biosimilar Insulin and Insulin Analog products.
02 Biocon to establish state-of-the-art biopharmaceutical manufacturing facility at BioXcell, a custom built biotechnology park and ecosystem in Malaysia.
03 Biocon divests stake in its German subsidiary, AxiCorp GmbH, to the existing group of promoter shareholders.
04 Biocons partner Optimer Pharmaceuticals receives FDA approval for Dificid (a first-in-class anti-infective for C. difficile treatment). Biocon is the sole supplier of the API to Optimer.
05 Biocon announces preliminary data on its novel Oral Insulin drug candidate. Topline analysis has shown encouraging results in patients with Type II Diabetes.
06 Biocon launches two new healthcare marketing divisions: Biocon Immunotherapy, targeting the treatment of immune related disorders in dermatology and rheumatology; and Comprehensive Care, focused on therapies for critical care illness like nosocomial infections, post-surgical complications, trauma and medical emergencies.
2011
HIGHLIGHTS
Healthcare Marketing
India Focus: Branded Formulations
Diabetology Biocon Diabetology has set new standards in the way diabetes therapy is marketed in India. Exemplified by our flagship brands, Insugen and BASALOG and supported by a differentiated range of diabetes products, this division has provided Indian diabetics high quality, innovative and affordable diabetes management options. The division is currently ranked 4th in the covered insulin market. With a robust product pipeline and scheduled launch of oral anti-diabetics and insulin devices this year, Biocon Diabetology is forecasted to be a frontrunner in the Indian anti-diabetic market. Insugen 100 IU The recent launch of Insugen 100 IU has reiterated Biocons commitment to introducing international standards, recommended by
WHO, into a market dominated by 40 IU Human Insulin. Insugen 100 IU has been launched with a plethora of patient support services and education activities aimed at improving diabetes management. TriGPM Having posted impressive growth in FY 2010-11, TriGPM has been overwhelmingly accepted by the diabetology market. For the coming years, Biocon Diabetology has ambitious plans to rapidly improve the market ranking of this molecule. OLISAT Ban of two drugs (rimonabant and sibutramine) due to serious side effects has led to the availability of just one drug, orlistat, for the management of obesity. Orlistat is free from systemic side effects because it acts locally and reduces dietary fat absorption. This differentiation is expected to open up new opportunities for orlistat molecule prescriptions, paving the way for the success of Biocon Diabetologys OLISAT, already in the market since March 2007.
Healthcare Marketing Research & Development Discovery Research Services: Syngene Clinical Research Services: Clinigene Human Resources Quality & Regulatory Environment, Health & Safety Corporate Social Responsibility
evaluate the efficacy and safety of this drug in locally advanced inoperable head and neck cancers has now crossed 60 months of follow-up with favorable safety and survival outcomes. Highlights of the 48-month survival data was presented and discussed at ASCO, a premier oncology event, this year. The current financial year was marked with the launch of various marketing initiatives which served to differentiate BIOMAb EGFR in the targeted therapies market. A series of scientific conferences with internationally reputed speakers, attended by eminent oncologists from across the nation, helped establish BIOMAb EGFR as a unique therapy option for head and neck cancers. BIOMAb EGFR made its presence felt as a major player in the targeted therapies space through participation in a number of Indian and international conferences. Initiatives included patient focused activities such as disease awareness campaigns and survivor meets. A robust clinical development program is now underway to further analyze and explore the possible benefits of this molecule to treat various types of cancer. They include a global Phase III trial of nimotuzumab in combination with CTRT, in 700 head and neck cancer (post operative) patients, and a Phase III Indian trial in over 500 patients with locally advanced head and neck cancers. In line with Biocons focus on affordable innovation, BIOMAb EGFR is available
Patient Friendly Services We continue to augment product promotion with patient support programs, ranging from awareness camps about diabetes and its complications, early detection and healthcare, to campaigns promoting self monitoring and control of blood glucose. Every purchase of Insugen 100 IU comes with a 100 IU syringe and each 100 IU prescription includes a travel pack containing three additional syringes, a coolant pouch, injection technique booklet in vernacular languages and a health information booklet explaining diabetes care points. The travel pack also enables patients to get daily diabetes care tips for a period of one month, upon registering with the Winning with Diabetes toll-free helpline. The Winning with Diabetes (WWD) initiative has gained traction and has been very well appreciated by all
stakeholders. Value added services provided by WWD include: BASALOG Breeze 2 Program Liaisoning with field/patients/ doctors/HO Generation and maintenance of database for doctors and patients Diabetic Care Advisors (DCAs) Oncotherapeutics Biocon Oncotherapeutics has succeeded in establishing a stronghold on its market with novel molecules such as BIOMAb EGFR, Abraxane, NUFIL safeTM and EvertorTM . BIOMAb EGFR A humanized monoclonal antibody, BIOMAb EGFR (nimotuzumab) has demonstrated unique safety and efficacy outcomes in clinical trials and in clinic. The BIOMAb EGFR Efficacy & Safety Trial (BEST) conducted in India to
Biocon Annual Report 2011 Highlights 31
to Indian patients at a cost 40% lower than other anti-cancer therapies in the same class and indication. Abraxane Launched just three years ago, Abraxane is making steady inroads into the highly fragmented and hypercompetitive Indian taxane market, with significant sales growth over the last fiscal. While major usage share is held by metastatic breast cancer, Abraxanes efficacy in multiple difficult-to-treat cancers such as ovarian cancer, non-small cell lung cancer, pancreatic cancer, etc. is increasingly being acknowledged by physicians. The current financial year saw the launch of marketing initiatives to boost Abraxanes brand equity. Activities ranged from disease awareness campaigns to video conferences and live national and international speaker programs. Back-to-back speaker meets involving key opinion leaders in oncology have reinforced Abraxane as a formidable alternative to conventional treatment options. NUFIL safe Biocon Oncotherapeutics trademark for filgrastim (r-metHuGCSF), NUFIL safe has been indigenously developed at Biocons world class manufacturing facility. It is incorporated with an Ultrasafe Passive Delivery System which enables protection from needle stick injuries and provides enhanced patient comfort. Since its launch in 2008, NUFIL safe has differentiated itself from the competition and garnered appreciable market share. It is currently the 4th largest brand in the market.
EvertorTM Launched in December 2010, EvertorTM is the first generic of everolimus in India indicated for the treatment of patients with advanced renal cell carcinoma (RCC). In 2010, everolimus received US FDA approval for the treatment of subependymal giant cell astrocytoma (SEGA) associated with tuberous sclerosis (TS) requiring therapeutic intervention but no curative surgical resection. EvertorTM works by inhibiting mTOR, which is a key serine-threonine kinase, the activity of which is known to be upregulated in a number of human cancers. Everolimus is currently being studied in other indications such as breast cancer, NHL, gastric cancer, hepato cellular carcinoma (HCC), neuroendocrine tumors (NET), NSCLC and colorectal cancer. Nephrology Since its launch in 2007, Biocon Nephrology has come a long way in offering the most comprehensive and well balanced portfolio of products for dialysis and transplantation. Operating in a highly competitive and increasingly price sensitive market, with more than 20 active players and newer companies joining every year, Biocon Nephrology has achieved much success in a short span of time. Its flagship brand TACROGRAF now occupies 2nd position in the highly congested tacrolimus market while RENODAPT is the third largest brand in its category with tremendous potential for future growth. The divisions other products ERYPRO,
ERYPRO PFS and ERYPRO safe have also fared exceptionally well over the last year. Impressive branding, strategic marketing and an innovative safety device have propelled Biocons Erypro Group to 4th position in the highly fragmented EPO market. Patient Initiatives Ayushamaan A welcome kit for newly transplanted patients containing educational material on post transplant renal care, mask, pen, etc. Breeze 2 Patient support program, launched in 2010, providing a complimentary Breeze 2 glucometer to patients enrolled on TACROGRAF and RENODAPT TDM levels Unrestricted support to therapeutic drug monitoring of the immunosuppressant portfolio SMBG Camps Conducted to spread awareness about post transplant diabetes mellitus and the importance of self monitoring of blood glucose Cardiology Biocon Cardiology continues to provide therapy to cardiovascular patients across India through high quality products and innovative patient/doctor initiatives. Led by its flagship brands STATIX and MYOKINASE, the divisions marketed products have performed impressively, garnering greater market share and receiving much appreciation from medical and patient communities. STATIX In a market of many brands, Biocons STATIX stands apart as the purest atorvastatin. The distinguishing features and well validated benefits of
this highly differentiated drug will, in the long run, considerably contribute to reducing the risks associated with cardiovascular diseases. Benefits of STATIX to patients: Enhanced efficacy due to faster rate of atorvastatin absorption Improved stability resulting from smaller and uniform size distribution Increased shelf life with no increase in total impurities TELMISAT An important Biocon brand focused on reducing the burden of hypertension, TELMISAT has been strongly supported by an innovative patient initiative. Research indicates that in developing countries like India, more than half of the patients on medication for hypertension drop out due to affordability issues, lack of awareness, etc. Keeping this in mind, Biocon Cardiology designed a Patient Adherence Camp offering one month of free therapy. ACTIBLOKTM IPR Biocon Cardiology has continuously focused on differentiated products for better patient care. ACTIBLOKTM IPR is an innovative brand that has positively impacted the market. It has been well received by cardiologists and its unique IPR-immediate & patterned release technology provides all-day blood pressure control in hypertensive patients. The products efficacy has been endorsed by its ranking which has steadily risen. Another differentiated (methionine-
free technology-based) product is MYOKINASE, used in acute myocardial infarction. Within 12 months, MYOKINASE became the No. 2 brand in India, saving the lives of 60,000 patients till date. Since launch, MYOKINASE has been accepted by some of the most reputed Indian hospitals. This drug has enhanced the reputation of Biocon Cardiology as a serious player in the interventional cardiac market. The divisions other products include eptifibatide, prasugrel and tirofiban. Our brands in this segment are CLOTIDE (eptifibatide), PRASACT (prasugrel) and TIROZEST (tirofiban). All three drugs are used in the management of acute coronary syndrome. Institutional Interventions Strengthening its presence in the hospital segment, Biocon Cardiology conducts a dedicated program for nurses and paramedics called Accel-
erated Cardiac Care. This program trains support staff on various complications involved in handling ICU equipment and patient care. Comprehensive Care Launched in 2010, Biocon Comprehensive Care is focused on providing affordable solutions to critical care illnesses, including nosocomial infections, post-surgical complications, trauma and medical emergencies. Targeting the critical care segment, this new division has a strong all-India presence and a dedicated sales/ marketing team. Since launch, Biocon Comprehensive Care has met with great success and its products have been well accepted by the intensive care community. The divisions robust portfolio of products includes CELRIM (cefepime), CELRIM TZ (cefepime + tazobactam),
Emerging Market Focus

NeoBiocon Biocons Abu-Dhabi-based JV, NeoBiocon posted substantial growth in revenues and profits. Post last years launch and inclusion of Abraxane in leading hospital and health authority formularies, numerous metastatic breast cancer patients in the UAE and GCC region are now beginning to experience the benefits of this medicine. Post Abraxanes launch in the UAE, the Company will advance product registration in other GCC countries. NeoBiocons range of branded generic products, now approved by the UAE Ministry of Health, has successfully been launched to address the therapeutic segments of cardiology, diabetology and infection management. The first UAE-based company to introduce a branded generic of atorvastatin (one of the largest selling molecules in the country) and gabapentin, NeoBiocon has several new products in the pipeline slated to enter the market very soon. To support its marketing efforts, the Company is aggressively expanding its team of professionals. The GCC pharmaceutical market is valued at USD 2.7 billion. To harness its growth potential, NeoBiocon has opened a second office in Dubai Healthcare City to support the activities of the corporate office in Abu Dhabi. Both locations will cater to planned expansion across the Gulf region.
Biopiper TZ (piperacillin + tazobactam), IMICELUM (imipenem + cilastatin), PENMER (meropenem), ENTAVAR (linezolid), MEEZAT (ceftazidime) and GENPIROME (cefpirome sulphate). Immunotherapy One of Biocons newest divisions for branded formulations, Biocon Immunotherapy was launched in 2010 with the aim of introducing a comprehensive portfolio of medicines for the treatment of immune related disorders in dermatology and rheumatology. The division will leverage its strong research capabilities and technology platform to develop a robust pipeline of innovative molecules. Building differentiated brands through aggressive scientific and marketing activities, Biocon Immunotherapy currently has in its portfolio TBIS (tacrolimus) and PICON (pimecrolimus),
indicated for atopic dermatitis and vitiligo. In addition to 10gm lami tubes, 30 gm SKUs were introduced for the first time in India. Another first for Biocon Immunotherapy was the launch of PSORIDTM (cyclosporine capsules/ oral solution). In the pipeline is a wide range of drugs to treat psoriasis and vitiligo. Among the divisions most promising pipeline therapies is a humanized monoclonal antibody, T1h (itolizumab). Early clinical studies in psoriasis have shown encouraging results and a Phase III study for the same indication is in progress in India. Biocons ability to develop this molecule in-house differentiates it as a world class manufacturer and the foremost producer of immunosuppressants in India.
Developed Market Focus

AxiCorp GmbH
FY 2010-11 was very successful for

AxiCorp despite mounting challenges of health reform in Germany. Ranked No. 29 among German pharmaceutical companies (IMS: Jan 2011), the Companys total revenues touched EUR 162 million in 2010 (with a portfolio of 584 products), as compared to EUR 134 million in 2009. While market growth was 13.4% in the last year, AxiCorp grew by an impressive 21%.
that is conducive to good science. It epitomizes Biocons efforts to galvanize the best talent available in India and abroad, and offer them a space where intellectually challenging problems are examined through vigorous debate and sharing of experiences and perspectives. The construction of BRC at Biocon Park in Bangalore is well underway. This center of excellence in discovery will create critical mass in research with a common goal of finding new treatments for unmet medical needs. Once completed, the research site will accommodate approximately 400 scientists with expertise in cancer biology, cancer immunotherapy, oncogene signaling, generation of manufacturing cell lines, protein engineering and antibody technologies. In addition, the facility will house teams of scientists and engineers specializing in process development and protein production. BRC is expected to be ready by mid 2011. Upon completion, it will have approximately 200,000 sq ft of lab space spread over 4,000 sq mts. BRC will work in close collaboration with Biocons clinical development and manufacturing to create and drive invaluable synergies within the group. R&D Expenditure Biocons R&D programs have always been financed predominantly from internal accruals. Total R&D spend, as a proportion of Biocons biopharmaceutical sales, now stands at 10%. This is reflective of our increased investment in pipeline expansion and advancing our novel programs to
Phase II/III human clinical trials. Net R&D expenditure and clinical development cost in FY 2011 amounted to INR 1,346 million (9% of sales), a rise of 47% compared to INR 915 million (8% of sales) in FY 2010. As at end of FY 2011, around 10% of the workforce was employed in R&D activities. Pharmaceuticals During the year, several new APIs were added to our portfolio. Biocon entered the ophthalmic segment with the introduction of synthetic prostaglandins latanoprost, bimatoprost and travoprost. To reinforce our oncology presence, we successfully introduced everolimus and temsirolimus into the domestic market. All these products are niche molecules with very high technology barriers. In the pipeline are several APIs, with peptides identified as an important growth driver. Bivaluridine and Exenatide are expected to be commercialized in FY 2012, followed closely by caspofungin (anti-fungal agent), ivabradine (cardiotonic agent) and brinzolamide (anti-glaucoma agent). Internal Novel Programs IN-105 (Insulin Tregopil) Our flagship oral insulin program, IN-105 has the potential to improve the quality of life of 300 million diabetes patients, worldwide. A 24 weeks, placebo controlled, Phase III clinical study in India was recently completed and data analysis is on-going. This study was undertaken to understand the efficacy and safety of IN-105 in patients with type II
Research & Development

Biocons R&D continues to generate future growth opportunities through novel and innovative approaches in drug development. Advancing creative solutions for affordable healthcare, R&D focuses on new products that will strongly support Biocons core businesses. To expedite the Companys growth, we have worked to steadily renew and expand our product portfolio and optimize production processes. Being closely aligned to market needs, our R&D initiatives are subjected to a continuous process of adjustment, guided by an international network of collaborations with leading universities, public sector research institutes and partner companies. By pooling expertise this way, we aim to rapidly translate new ideas into successful products. Biocon Research Center (BRC) Biocon Research Center, being established by Biocon Research Limited, was conceived to nurture and promote a research environment
R&D Product Pipeline

Novel, High Potential Programs that leverage the India Advantage
Therapeutic Areas
Product
Discovery Preclinical Phase I
Phase II
Phase III
Market
Diabetes
IN-105 (Oral Insulin)
Oncology Autoimmune
Anti-CD6 MAb (Itolizumab)
Oncology NOVEL MOLECULES
Anti-EGFR MAb (Nimotuzumab)
Oncology
BVX-20 (Anti-CD20 MAb)
Diabetes
Hybrid Peptide
Oncology
Fusion MAbs (Tumour Vaccines)
* Proof-of-concept Phase III trials
* *
diabetes mellitus who have inadequate glucose control with metformin. It involved a titration phase to investigate optimum dosage and a maintenance phase to study the effect of oral insulin on lowering of HbA1c. Doses tried out were 10 mg, 15 mg, 20 mg and 30 mg, along with their matching placebo. Preliminary data has shown encouraging results. Although the drug did not meet its primary end-point of showing superiority over placebo in reducing HbA1c, it was superior in effectively reducing post-prandial glycemic excursions in patients with type II diabetes. Biocon is also conducting a Phase I study in patients with type I diabetes mellitus to test the pharmacokinetics and pharmacodynamics of IN-105 under US IND. In terms of safety, no clinically relevant hypoglycemia was observed, there were no serious adverse events, the drug appears to be non-immunogenic and weight neutral. We do plan to initiate partnering discussions very soon and propose to conduct further studies after a partnership is established. T1h (Itolizumab) T1h is our advanced immune-modulating, anti-CD6 antibody that is moving through the pipeline successfully. Immune-modulating antibodies are a promising, new approach to autoimmune diseases and we are presently evaluating this particular drug for two indications: psoriasis and rheumatoid arthritis. Significantly, early pre-clinical studies are increasingly revealing that anti-CD6 antibody has potential uses in several other indications, including psoriatic
arthritis, multiple sclerosis, lupus and type I diabetes. Given its growing importance across key disease areas, we consider T1h to be a pipeline within a product. Initial investigations will focus on rheumatoid arthritis and psoriasis, followed closely by multiple sclerosis. With these three indications alone, we will be targeting a market size of over USD 20 billion by 2015. For psoriasis, we have seen some very good responses to treatment as assessed by a standardized measure known as Psoriasis Area and Severity Index (PASI). For patients treated with T1h, scores with mean PASI improved by 50% in four weeks and 75% by 12 weeks. In addition, we have seen significant changes in the quality of life parameters. In the area of rheumatoid arthritis, studies have revealed good ACR* 50 and ACR 70 scores, hitherto not seen in the methotrexate control arm. T1h was an add-on therapy to patients on methotrexate and not doing too well. Again, we have observed some very important improvements in, both quality of life and disability parameters, as well as tender and swollen joint counts which had substantially reduced and sustained over a 24-week period. A comparison of T1h with other biologics targeting rheumatoid arthritis highlighted two strong differentiators: lower infection rates and reduced dosage compared to other antibodies. It is these differentiators that we will focus on when we evaluate T1h in future studies. The clinical plan, therefore, is to continue with psoriasis and
rheumatoid arthritis. Patient enrolment in the psoriasis trial has been completed and we plan to obtain primary endpoint data during the year. In the later half of FY 2012, we hope to apply for an Indian registration and have Pre-IND advice from US FDA at the same time. A longer term RA study using T1h is to begin soon. We plan to complete it by next year and apply for a US IND in FY 2013.
* The ACR score is a standardized measure of change in rheumatoid arthritis symptoms, typically used in a clinical study setting. It incorporates numerical values for various clinically relevant criteria such as the numbers of swollen and tender joints, pain, quality of life, physician and patient assessments. ACR 50 refers to a 50% improvement in the standardized measurement.
Global Alliances
Biocon & Amylin This exclusive agreement to jointly develop, manufacture and commercialize a novel therapeutic agent for the treatment of diabetes is well on track. This compound has recently entered early stage pre-clinical development to support forthcoming Phase I studies. We hope to complete Phase I supporting pre-clinical toxicology studies, being conducted in the US, during the first half of this year. During the later half of this fiscal, Biocon and Amylin plan to jointly file an IND application with the US FDA. The IND will be necessary to start testing of this molecule in humans (Phase I) in order to primarily understand the safety parameters of the compound.
Global Research & Co-development Alliances

Partner AMYLIN IATRICa MYLAN OPTIMER VACCINEX Product Novel Peptide MAb-fusion Proteins Biosimilars Novel API Bio-better MAbs Therapeutic Areas Diabetes Oncology Oncology/Autoimmune Diseases Anti-Infective Oncology
Biocon & IATRICa During the year gone by, clones were developed to produce a recombinant protein in E.coli, which could be used as a component of adjuvant therapy in cancer. A preliminary upstream and downstream process for production of sufficient quantity of protein, suitable for proof-of-concept studies, was developed. An in vitro assay for estimating potency was established. In vivo experiments in two mouse tumor models, conducted along with chemotherapy, provided encouraging results prolonged survival, validation of the proof-of-concept. Future goals being pursued include development of the purification process, production of recombinant protein for developing analytical assays and formulation development. Several novel MAb-fusion proteins useful for treatment of cancer have been designed which need to be verified for further development in preliminary expression studies.
Biocon & Mylan In FY 2010-11, several batches of two biosimilar products were manufactured and characterized extensively. Single and multiple dose PK and toxicity tests were completed as per guidelines. Non-clinical studies in animal models have begun for one of the products in Europe. Three other biosimilar projects are undergoing process development. Biocon & Optimer In February 2011, The New England Journal of Medicine published results of fidaxomicin Phase III trials showing significantly lower recurrence rates and improved global cure rates compared to vancomycin in patients with Clostridium difficile Infection (CDI). CDI is caused by Clostridium difficile, a spore forming bacterium that can result in serious infection of the human colon by multiplying and producing toxins resulting in inflammation, severe diarrhea and in serious cases, death.
Over the past six years, Biocon has been an important partner in Optimers fidaxomicin development program. During this period, we have offered developmental, manufacturing and regulatory support to Optimer. The Biocon-Optimer alliance has been further strengthened with the signing of a long term supply agreement for commercial manufacturing of fidaxomicin. Biocon & Vaccinex Biocon is codeveloping an enhanced humanized antibody BVX-20 with Vaccinexs platform technology. Pre-clinical data (which includes primate studies) has revealed that this particular antibody is comparable with rituximab in most respects, but it has superior tumorkilling properties. This potentially indicates that a lower dose is possible and it could have a higher efficacy in indications such as CLL.
The current clinical plan is to conduct a Phase I/II trial on refractory-NHL patients or relapsed-NHL patients, (approximately 50) with a primary endpoint being safety and a follow-up for two years. We will evaluate PK on first and last doses and we hope to file a US IND in the later part of the ensuing fiscal. Biocon and Pfizer In October, 2010, Biocon signed a definitive global agreement with Pfizer Inc., the worlds leading biopharmaceutical company, for the worldwide commercialization of Biocons biosimilar versions of insulin and insulin analog products. Pfizer will have exclusive rights to commercialize these products globally, with certain exceptions, including co-exclusive rights for all of the products with Biocon in certain other markets. Pfizer will also have coexclusive rights with existing Biocon licensees, with respect to some of the products, primarily in a number of developing markets. Biocon will remain responsible for the clinical development, manufacture and supply of these biosimilar insulin products, as well as for regulatory activities to secure their approval in various geographies. Biocons recombinant human insulin formulations are approved in 27 countries in developing markets, and commercialized in 23, while glargine has been launched in its first market, India.
Under the terms of the agreement, Pfizer will make upfront payments totaling USD 200 million. Biocon is also eligible to receive development and regulatory milestone payments of up to USD 150 million and will receive additional payments linked to Pfizers sales of its four insulin biosimilar products across global markets. The 2010 market for diabetes drugs and devices is estimated at over USD 40 billion with insulins accounting for 35% of the diabetes segment. By 2015, a number of insulin analogs are expected to lose patent protection, resulting in a significant opportunity for the biosimilars market. With this alliance, Pfizer and Biocon expect to be well positioned to be first movers in this potentially large market opportunity.
Discovery Research Services: Syngene

Syngene remains amongst Indias largest contract research organizations with a portfolio that spans the entire drug discovery and development continuum. Discovery services offered include scaffold and library synthesis, medicinal chemistry, computer-aided drug design (CADD), DMPK profiling, crystallography, in vivo pharmacology and toxicology. Syngene also provides development services from API process development, polymer chemistry, cGMP manufacturing of APIs and advanced intermediates, oral and injectable formulation development to cGMP manufacture of drug product for first-in-human and Phase II clinical studies. Paradigm Shift in Discovery & Development Services Over the past few years, pharmaceutical companies have undergone a paradigm shift not only in the way research is conducted in-house, but also in the way it is outsourced to contract research organizations. Ever since innovator companies have shifted from the traditional approach of conducting research in silos to a more integrated, multidisciplinary approach, the same is expected from contract research companies. Keeping pace with this development, Syngene has developed internal expertise and practices to offer integrated services, in both discovery and development. Together with the clinical development partnership of Clinigene, Syngene is in
Intellectual Property
Biocon was granted 40 patents in FY 2010-11. Our total IP asset stands at 1,075 patent applications, of which 148 are PCT applications and 245 are granted patents. Biocons BASALOG was registered in Russia, New Zealand and Mexico, while Insugen was registered in Japan and New Zealand during the last fiscal. A total of 32 trademarks from Biocons Healthcare portfolio were registered in India during last fiscal year. In recognition of our impressive IP asset, Biocon received the prestigious Pharmexcil/Government of India Patents Award 2009-10 in September 2010.
a unique position to offer completely integrated drug discovery, development and clinical research services. Emergence of Biological Entities In the past few years, the global pharmaceutical industry has witnessed the emergence of biologics as promising new medicine. Led by recombinant proteins, monoclonal antibodies and newer nucleotide and cell-based therapies, it is estimated that more than 50% of drugs under development will be biological entities. Today, biologics form a significant part of the drug pipeline of large multinational pharmaceutical companies as well as small, innovative, research-based companies. Recognizing the biologics opportunity and leveraging its experience and vast expertise, Syngene has made major investments in the past three years to establish the following capabilities within the scope of biologics: Cell & Molecular Biology The Biology Group, already supporting discovery of chemical entities, provides services in biotherapeutic discovery and development, starting with protein expression, hybridoma generation, screening of monoclonal antibodies, protein/antibody engineering to biological characterization and cell line development. Process & Formulation Development The Process Development Group specializes in efficient and high yielding
processes for proteins and antibodies. These laboratories can handle a variety of proteins from microbial hosts such as E. coli and pichia pastoris to mammalian cell lines such as CHO. The Formulation Group focuses on developing stable, ready-to-use and lyophilized formulations of protein therapeutics using robust manufacturing processes. Analytical Development Syngene has state-of-the-art analytical capabilities to study the physicochemical properties of proteins and antibodies, including their glycosylation profile, other post-translational modifications, variants and impurities. Services are provided on a stand-alone basis or integrated with process development. Pilot Plant Syngene has built a world class pilot plant for manufacturing clinical
material from bacterial as well as mammalian origin, in two separate suites. This facility can deliver several hundred grams of protein per batch for toxicological and clinical studies. Compliant with current US FDA and EU guidelines for GMP, operations are closely monitored by Quality Control and Quality Assurance units. Partnerships Syngene & Bristol-Myers Squibb (BMS): Discovery & Development of New Chemical Entities (NCEs) This collaboration encompasses various aspects of new drug discovery and development research. What makes this relationship unique is that a multinational big pharma has invested in building state-of-the-art facilities to be operated by Syngene for exclusive use. The Syngene-BMS research center offers services ranging from lead optimization
and toxicology services to API scale-up and early clinical formulations. Syngene & Endo Pharmaceuticals: Development of Novel Therapeutic Molecules against Cancer In early 2010, Syngene initiated a collaborative research program with Endo Pharmaceuticals, USA to develop novel biologic molecules for targeted cancer therapy. This unique association, now entering its second year, has successfully delivered on several crucial milestones. The innovation and challenges involved have provided Syngene invaluable experience and expertise in integrated biotherapeutic discovery and development for pharma companies. This learning will now be leveraged to secure further collaborations of a similar nature. Syngene & DuPont Crop Protection: Discovery & Development Services for Agrochemical Companies Building on its long term relationship as a preferred service provider, Syngenes alliance with DuPonts Crop Protection supports the companys discovery pipeline through integrated R&D services. The Syngene-DuPont collaboration, which has reached its 10th year milestone, includes discovery and development services in the area of crop protection, such as design of novel molecules, custom synthesis of promising candidates and advance intermediates, and synthesis and characterization of reference and impurity standards.
Clinical Research Services: Clinigene

Clinigene has successfully completed a decade of excellence in offering quality clinical research solutions to pharmaceutical and biotechnology companies in India and several regulated markets, including EU, US and UK. Till date, Clinigene has conducted more than 80 BA/BE and early phase studies and over 60 Phase I-IV clinical trials involving more than 5,500 patients. Clinigenes ability to offer innovative services was further augmented in 2010, when it acquired the well established, experience-rich bioanalytical research facility for large molecules (previously part of Biocon R&D). Built to meet international standards and specifications, this GLP-compliant laboratory has state-of-the-art infrastructure and specializes in method development and testing services (for pharmacokinetic, toxicokinetic and immunogenicity analysis of new biologics, biosimilars, some small molecules, antibodies, recombinant proteins, cytokines and growth hormones), to support early and late phase trials for global registrations. Possibly the first-of-its-kind available with an Indian CRO, this facility will greatly enhance Clinigenes capabilities and reaffirm its leadership position in the clinical evaluation of biologics. Regulatory Approvals A major achievement for Clinigene this year has been the successful
completion of US FDA inspection of the Human Pharmacology Unit (HPU) and Bioanalytical Research Laboratory. This was the first time Clinigene was being audited by US FDA. No critical observations were identified. This is an authentication of quality deliverables offered to clients in support of their clinical development programs. A Clinigene managed study site located in India and participating in a global, Phase III diabetes trial was successfully audited by US FDA with no critical findings. HPU and Bioanalytical Research Laboratory for small molecules also underwent an audit by an EMA regulatory body. HPU and Bioanalytical Research Laboratory were inspected and approved by UAE Ministry of Health. Clinigenes Central Laboratory successfully completed the NABL ISO 15189 accreditation audit. The Lab recently procured an IVD certified Flow Cytometer, enabling Clinigene to extend its services in the area of biomarker analysis for new biologics and biosimilars. Clinical Development Oral Insulin Program (IN-105) Clinigene completed Phase III clinical trials in 264 type II diabetes patients, across 15 sites. A clinical development program for IN-105 in type I diabetes patients was also initiated. Anti-CD6 MAb Program (T1h) A Phase III clinical trial to evaluate safety and efficacy of Biocons anti-CD6
monoclonal antibody T1h, in 250 patients with active psoriasis, is ongoing. Clinigene completed patient recruitment well within the scheduled timeline, across 20 study sites. Biocon, Mylan & Vaccinex Programs Clinigene has initiated pre-study activities for early phase studies in various indications. Erythropoietin Program Clinigene recently completed a Phase II clinical trial with long-acting erythropoietin in 30 CKD patients. The results obtained were positive for both efficacy and safety. While other CROs were unable to recruit patients for this difficult protocol, Clinigene successfully implemented it. Looking to the Future Clinigene is focusing on conducting intense Phase I patient PK/PD studies in oncology, cardiology, immunology and respiratory diseases and is currently facilitating setting up of a state-ofthe-art Phase I unit at the MazumdarShaw Cancer Center, Bangalore. Clinigene and Syngene will together offer integrated drug development solutions to small and large pharma and biotech companies based on an efficient discovery to decision paradigm. The newly acquired Bioanalytical Laboratory for large molecules aims at obtaining Indian Good Laboratory Practice (GLP) certification shortly. The lab also plans on investing in a state-ofthe-art Laboratory Information Management System (LIMS) and advanced multiplexing instrumentation.
With the implementation of key IT and web-enabled solutions, Clinigene will enhance its ability to provide sponsors and project teams real-time access to study specific documents. In this regard, Clinigene also offers a unified IWRS and EDC solution.
Human Resources
Biocon and its subsidiary companies are today a dynamic force of 5,500+ coworkers, making the HR function more critical, challenging and rewarding. Whether through recruiting, upgrading performance management or designing and implementing leadership development programs, Biocon HR continues to shape the Companys high performing teams and culture. In 2010-11, a number of employee centric interventions were implemented across Biocon to motivate a more engaged and competitive talent pool. Key Initiatives for 2010-11 Launching a Leadership Development Initiative for Biocons top 150 leaders to arrive at a common leadership language across the organization. In the first phase, an organizational diagnostic study was carried out to examine the current leadership framework, Biocon imperatives, changing organizational requirements, developmental gaps and the overall program content. Establishing Recruitment Alliances with tier-1 business schools (ISB, IIMs, XLRI, NMIMS, NITIE, MDI) and well reputed engineering/pharmacy
colleges (IITs, BITS-Pilani & Goa, NIPER and UICT) to ensure a steady stream of high quality talent. We have also utilized customized technology solutions to manage the employee hiring lifecycle more efficiently. In the year gone by, we enlarged our pool of consultants and executive search firms to hire for leadership positions, while optimally leveraging social media for niche positions. Strengthening the Goal-Setting Process for the organization by dovetailing vertical goals with individual objectives. Based on focus-group discussions centered around the results of Expressions-2010 (engagement survey conducted in-house), relevant process improvement changes were made to the online Performance Management System fulfilling department-specific requirements. Stabilizing our Online Training Tool, iLearn during the year to better facilitate management of technical as well as behavioral training programs. Technical training programs were conducted by reputed international trainers on subjects like OOS & CAPA, CTD dossier requirements, etc. as well as on operational excellence through programs such as Kaizen and TPM. Focus areas in behavioral training were personal effectiveness, effective communication, teamwork, decision making, conflict management and creative problem solving. Developing Industry-ready Talent, through an MOU signed with
Employee Strength
Company as on 31.03.2010 as on 31.03.2011
Intellectual Profile
13%
Biocon Syngene AxiCorp Clinigene BBPL BRL Grand Total
2,575 1,401 258 139 105
3,467 1,496 285
5% 45%
36%
167 129 41
Post Graduate Graduate Doctorate/Post Doctorate Others 45% 36% 5% 13%
4,478
5,585
Introducing First Step, a Pilot Employee Engagement Initiative at Healthcare Marketing to capture feedback on the on-boarding and post-induction experience of new joinees. Findings have helped in identifying key areas of focus to strengthen the on-boarding process. Priorities for 2011-12 Formalizing an Employee Referral Scheme to activate talent supply through internal referrals. Institutionalizing an Internal Job Posting Program to provide employees the opportunity to apply against vacant positions. Training of recruitment/panel teams to sharpen interviewing skills. Implementing strategies and policies to aid in attracting quality talent to the organization.
Siddhaganga Institute of Technology to support its Finishing School. In addition, we encourage our people to visit various technical colleges as faculty. We are also in the process of initiating a practical, industry-relevant Post Graduate Diploma in Biotechnology through Kuvempu University. Conducting an All-India Assessment Program for Healthcare Marketing to identify talent from within and build a strong talent pool for future requirements. This program included tools which comprehensively assessed participants on competencies defined for the next level. A thorough competency mapping exercise has also been initiated to define the career path for each role.
Reviewing the Performance Appraisal Process with inputs from cross-functional teams. This will help identify changes for the next financial year thereby enhancing the efficacy of the Performance Management System. Reinforcing training design and delivery process for increased alignment with business needs, specifically, customized learning initiatives for various departments. Designing and executing interventions to develop people skills for managers. Setting up a Finishing School for biopharma graduates/postgraduates to develop a pool of quality talent ready to be absorbed into the industry. Further strengthening the brand value of Biocon leadership through phase 2 of the Leadership Development Initiative. This would be achieved by development center and training
recombinant protein fill finish facility in December 2010. The Ministry of Health (MOH), Sultanate of Oman, audited Biocon Campus, Biocon Park, and our contract manufacturing site for the manufacture of immunosuppressant formulations in January 2011. National Drug Authority of Uganda (NDA) audited the biological products manufacturing facilities at Biocon Campus and Biocon Park in January 2011. Product Approvals Tacrolimus capsules have been registered in Paraguay. Sirolimus tablets were registered in Iran, MOH and Guatemala, MOH. Over 200 MAA (Marketing Authorization Applications)/variations were approved for atorvastatin in Europe, Canada, Australia and Israel, and over 150 MAA/variations were approved for fluvastatin sodium in Europe. Tacrolimus was commercialized in over 25 European countries through the approval of customers MAA and in the US through ANDA. Rosuvastatin calcium and atorvastatin calcium approved in Brazil.
programs for participants, followed by a series of executive coaching sessions to ensure positive reinforcement of the required values, behaviors and competencies. Addressing the ever increasing talent requirement, especially for Biocons Healthcare Marketing, by building a bench strength of freshers to meet critical business requirements at any given point of time.
Quality & Regulatory

During the last financial year, Biocon has been audited/inspected by health /regulatory authorities from eight countries for cGMP compliance and our registration dossiers have been successfully accepted and approved by them. Site Audits & Approvals COFEPRIS, the Mexican Health Authority, inspected and approved the
immunosuppressants and recombinant proteins manufacturing facilities at Biocon Campus in April 2010. Ministry of Health, Islamic Republic of Iran, inspected and approved our contract manufacturing site for manufacture of Biocons finished formulations in June 2010. Ministry of Public Health and Population, Republic of Yemen, inspected and approved our contract manufacturing site for manufacture of Biocons immunosuppressant formulations in June 2010. Saudi Food and Drug Authority (SFDA) inspected the human insulin (rDNA origin) manufacturing facility at Biocon Campus in September 2010. AFSSAPS, the French Health Authority, inspected the statins manufacturing facility in November-December 2010. Both sites have been considered cGMP compliant. Medicines Control Authority of Zimbabwe (MCAZ) audited the
Environment, Health & Safety

At Biocon, sustainability is about balance and integration. Integration, of the sometimes competing demands of economic, social and environmental aspects of our actions; and balance, of short term needs with long term
development. Sustainable development at Biocon is manifested through applying sustainable thinking to the everyday choices we make, ensuring that they are integral to our strategic vision and its implementation. Biocon is committed to maintaining the highest standards of EHS by complying with applicable laws and regulations. To minimize the environmental impact of our operations, we have a comprehensive EHS Policy and are continually implementing EHS measures through specialized EHS teams, systems and programs. EHS Management Systems Biocon has been certified ISO 14001: 2004 and OHSAS 18001: 2007 by TV Nord. We are formalizing continual improvement processes through adoption of an EHS risk management framework within our product manufacturing and quality organizational units, consistent with best practices. These units have the responsibility to manage a substantial portion of the EHS risks of the Company and commit to safe work environment practices. This initiative will involve regular audits, eventually resulting in a score that rates the effectiveness of the Companys environmental and safety protection management system processes. We have 10 lead auditors on our team. Environment Management As a new initiative, in this year we have organized cross-functional teams to reduce water consumption across all manufacturing units. The outcome
of this effort has been reduction of water consumption by 10%. All available recycled water is being used for utilities. Waste minimization teams were formed at all manufacturing units to achieve significant effluent load reduction Rooftop rain harvesting system was adopted and collected rainwater is being used for gardening. Safety Update : Training Biocon is committed to high quality training for all personnel. In this year, we have implemented an integrated, modular-based, training program for our workmen. This system consists of 12 modules which include chemical safety, laboratory safety, safety in process operations, operation of emergency safety equipment, EHS systems, EHS legislations, emergency response procedure, and safety in maintenance activities, contractor safety, and specialized trainings. In the last year, 11 safety related incidents were reported across all locations, all of which were minor, first aid incidents. We have also initiated a system of cross-unit audits of all manufacturing units and a total of 37 safety audits were conducted and 240 observations were noted. For 90% of audit observations, corrective actions were implemented and closed as in February, 2011. Five new safety guidelines and six audit protocols were released during the year.
Safety Awareness & Emergency Preparedness 94 safety campaigns were carried out on themes like emergency management, work permit system, etc. across our manufacturing sites. Safety month was observed in facilities to promote a culture of safety at the work place. 577 internal training programs (equivalent to 20,479 man hours of training) on safety were conducted by internal faculty. Some specialized external training programs like dust explosion hazard, tank farm and warehouse management, safe handling of chemicals, were also organized. During the year, 24 mock drills, 45 fire drills and 8 first aid training programs were conducted. As on date, 369 trained first aiders, 794 trained fire fighters are available at various locations. Process Safety Management Our focus during the year was on embedding EHS aspects into our existing and new product development processes. The objective was to make our manufacturing processes safer, through a comprehensive method for analyzing process hazards. We have implemented an integrated process safety management system for all existing processes and for new developments with integration of all 14 elements of process safety management. An EHS guideline for conducting risk analysis of API manufacturing processes was put in place. Aspects of process hazard identification, risk analysis and
measures towards risk reduction were considered in the guideline. Industrial Hygiene Management System Special focus on industrial hygiene has been embedded into our existing and new product development process. Objective of the initiative is to make our manufacturing processes safer, specially pertaining to health of workmen, Industrial hygiene qualitative risk assessment was carried out at all manufacturing facilities using in-house tools, based on the hazard and control banding concept. An EHS guideline for conducting occupational health risk analysis of API manufacturing processes was put in place. Aspects of health hazard identification, health risk analysis and measures towards risk reduction were considered in the guideline. Three training programs, including sessions by globally recognized certified industrial hygienists, ABIH were organized. Annual medical examinations were conducted for all employees and contract workmen across Biocon. Regulatory Overview All governmental agencies oversee the safety and environmental performance of Biocons facilities. These agencies range from the local factories department, fire departments to local, regional and national environmental agencies. Biocon Group complies with all applicable local, national and international legislations.
Commitment To Greenery As part of our corporate responsibility, we have planted 2,500 tree saplings in and around Biocon on June 5, 2010 commemorating World Environment Day. Achievements Award from CII for meritorious achievements in EHS First Prize in State Level Competition for First Aid conducted by St. Johns Ambulance, Bangalore
Early detection, prevention and management of chronic illnesses like cardiovascular diseases, diabetes, cancer and tuberculosis. Maternal and Childcare related health issues including immunization, antenatal, anemia and nutrition. Methods for dissemination and assistance include: Preventive Health Education through workshops and door-to-door interactions carried out by our community health workers. They discuss best practices in personal and environmental hygiene, including good sanitation and hand washing habits. Building or assisting with construction of better sanitation facilities. We have built 800 toilets in Huskur, Anekal Taluk. We are now trying to find ways to optimize this program by helping people use government resources that are available to them. Developing a mobile phone-based diagnostic tool that community health workers can use to get provisional diagnoses that can be sent to the doctor at the ARY clinic hub. This will help the doctor decide if the patient can be treated on the spot or needs to be brought into the clinic. Screening and counseling for people with chronic illnesses like CVD/diabetes/ cancer/TB through health screening camps and mobile phone-based screening tools. An oral cancer screening program established in collaboration with the Mazumdar-Shaw Cancer Centre (MSCC) in Bangalore, India.
Corporate Social Responsibility

Biocon Foundation: Integrated Healthcare Delivery Program This year, the team at Biocon Foundation has focussed on integrating its health programs to increase their effectiveness. With ARY clinics as nodal points in their respective districts, we have structured and broadened the scope of our preventive health program, both in terms of educating communities about best practices in health/hygiene and assisting/encouraging them to implement what they learn. The healthcare delivery program works on three interdependent levels. Level 1: Preventive Health The importance of preventive health cannot be overstated or emphasized enough. Our program focuses on: Water borne and hygiene related illnesses, including typhoid, malaria, dysentery, dehydration and dengue.
Mobile diabetic foot detection, treatment and counseling in collaboration with the Jain Institute of Vascular Sciences, Bangalore. Maintenance of antenatal and immunization records. Nutrition advice and counseling by community health workers. Mobile Phone-based Oral Cancer Screening Protocol Healthcare services need to reach the poorest of the poor who live in the most remote areas. Biocon Foundation is acutely aware that for a healthcare program to be truly effective, it must find ways to reach people no matter where they live or how poor they may be. To this end, our Arogya Raksha Yojana (ARY) network of clinics has been actively engaging members of local communities to become peer health educators, who we train in basic best practices of health and hygiene. They are our interface with the community. Through them, we are able to convey vital health information in a non-threatening and therefore, more acceptable manner. Low cost mobile technology provides a simple, fast and efficacious channel for health screening programs, as well as to disseminate preventive and other public health messages. We are confident that this technology will benefit our communities and help in strengthening our disease management programs. Mazumdar-Shaw Cancer Centre (MSCC) and SANA (a student team from MIT,
USA that has developed a mobile platform for improving healthcare accessibility), have together developed a mobile oral cancer screening program. We are excited about the potential of this program to detect oral cancer in the early stages, thereby enabling the possibility to make lifestyle changes for mitigating risks. With the help of this technology, the community health worker (CHW) asks a simple set of questions, the answers to which are checked off on his/her mobile phone. A picture of the patient/ lesion is also taken via the phone and the combined information is messaged directly to the central server located at MSCC. This method of screening can potentially help identify patients who have a high risk of oral cancer, thus increasing their survival rate and reducing their treatment costs.
Biocon Foundation is ideally positioned to implement the MSCC-SANA oral cancer screening program through its established clinics and networks of CHWs attached to each clinic. We have begun by launching the program in Chikkballapur. CHWs in the other six clinics are being currently trained so that we can extend the program to all ARY clinics in Bagalkot, Mandya, Anekal, Bangalore City, and in our newest clinic in Pollali, near Mangalore. Implementation follows two clear steps: 1. Training of Health Workers (CHWs) Appropriate training of CHWs is critical to the success of this program. To prepare them for the process of screening, we give them training in: The basics of oral cancer causes, recognition of symptoms, and treatment. The objectives of the cancer screening program.
People friendly and non-threatening ways to approach those with risk factors. Use of the mobile phone, especially, the touch screen. We have ensured that they are comfortable with the instrument and every aspect of the module. Explaining the need for a picture of the lesion, if any. The CHW must be able to communicate this to the individual in a reassuring manner. Explaining the action that needs to be taken in case of referral to the hospital. This includes health insurance access and benefits. 2. Training in Step-by-step Screening Procedure Extricate information about families that have people who are 40+ and exhibit one or more of the risk factors for oral cancer (e.g. chewing tobacco). This list is sourced from the baseline survey that the CHWs have already completed in many villages. Go back to these families, introduce the cancer screening program, get consent and proceed with the screening. Once screening is complete, all the data collected, including picture of the patient/lesion, is messaged to the MSCC and Biocon Foundation servers. MSCC contacts the patient and follows up with diagnosis and treatment. Biocon Foundation keeps track of the patient and ensures, as best as possible, that treatment is availed of as prescribed. Level 2: Primary Healthcare through ARY Clinics We provide competent clinical care, generic medicines and basic diagnostic tests through our network of eight clinics. Our clinics constantly work towards improving clinical competencies through shared standards and protocols. We are developing and introducing patient-based clinical record systems and health information, including tracking, monitoring and analysis of symptoms, diagnosis and treatment, compliance, and disease profiles of communities. We provide antenatal/postnatal tracking and mothers are counseled about institutional deliveries which they can access using the ARY Health Insurance scheme. Clinics serve as referrals for scaling up to hospitals. We actively promote linkage with the ARY Health Insurance Scheme to ensure that critical illnesses are treated in time by competent medical personnel. The clinics are also hubs from which we run parallel activities like: Mobile diabetic foot detection, treatment and counseling in collaboration with the Jain Institute of Vascular Sciences, Bangalore. Maintenance of antenatal and immunization records Nutrition advice and counseling by community health workers. Biocon Foundation currently runs eight ARY clinics, in both urban and rural areas, each of which serves about 50,000 people living in surrounding areas. They include: Bangalore City: Austin Town and Krishnarajpuram Anekal Taluk: Huskur and Hennagara
Advantages of Integrated Healthcare Services
Robust outreach through: Preventive Health Education & Implementation Maternal & Child Health Immunization Early Detection and Management of Illnesses
Primary Health Affordable & Accessible Primary Healthcare
Informed Health Seeking Behavior More people understand the value of health insurance and therefore, buy protection Reduce hospitalization claims & risk for insurer
Lower Insurance Premiums
Increase in Customer Base as more people can afford Health Protection
Sustainable & Improved Healthcare Services
Healthy Communities
Karnataka: Districts of Mandya, Chickballapur, Bagalkote, Mandya and Polali (Dakshin Kannada) Level 3: Tertiary & Secondary Care (Hospitalization) Arogya Raksha Yojana (ARY) Micro Health Insurance Scheme ARY Health Insurance has enrolled 1,00,000 members who can avail of the services of highly qualified surgeons and doctors. In the five years of its operation, our scheme has facilitated more that 1,000 surgeries, 225 of which have been cardiac procedures and surgeries, and 250 OB/GYN related. In Huksur, where we launched the scheme in 2005, we have achieved 100% renewal rate, and in Chikkballapur more than 50% of the 10,000 members have enrolled for the fourth year in succession. This is a significant endorsement of our services from the community. To facilitate automation and scaling up of the enrolment process, we have advanced from a paper-based, manual member enrolment system to a mobile phone-based solution that is transmitted directly to a centralized server. This shift has considerably reduced errors during transmission and related data loss. Each year, we touch more than 2,00,000 lives through our holistic approach to healthcare. We believe that we can enhance the impact of our services by expanding our network of clinics, improving our preventive health and disease prevention activities and bettering the quality of care at our
clinics and in the ARY network hospitals. Most importantly, by expanding and improving our services, we hope to scale up into a nationwide, effective and sustainable healthcare operation. Education The education initiatives of Biocon Foundation have grown in the number of children reached as well as in the nature of interventions rolled out. The Chinnara Ganitha (self learning math) program was launched in 2006 and initially targeted children studying in 1st and 2nd Grade in Government schools. By the academic year 2008-09, the program included students from 1st to 7th Grade, reaching over 50,000 students in 500 schools. In 2010-11, this module reached over 70,000 children in 800 schools in three districts of Karnataka. During this year, the content for each class was reviewed keeping in mind changes and additions made to the curriculum. The focus this year was clearly on the lower primary classes being introduced to the activity-based Nali Kali program initiated by the Government. With the intention of supporting this innovative attempt at enriching the learning environment in Government schools, we reworked the entire content of the main book for Grades 1 and 2 and introduced workbooks as well. The response from students and teachers from all classes have been encouraging. Older children find the books engaging and fun and tend to complete the activities quite
fast. For younger classes, the teachers say the books supplement their daily teaching and the workbooks help children improve their writing skills as well. The quality of the content and the books themselves have been much appreciated. The Foundation has increased its interaction with teachers and students through coordinators appointed in the area where the program is rolled out, thus enabling constant innovation vis--vis needs expressed by the communities. As an extension of the Chinnara Ganitha program, we initiated a Travelling Science and Math Mela called the Chinnara Mela in November, 2010. A unique mela and the first of its kind, we launched it in Huskur village (near Bangalore) with the help of 15 volunteers from Biocon. Through the mela, we reached 250 children from the local primary school who participated in this fun-filled event designed around basic science and math concepts. Biocon Foundation aims to have a number of such events in the coming years. The Aata Pata Wadi program saw three batches of children from mainly tribal communities avail of its services this year. Each batch consisted of 22-25 children from lower income groups. They were given access to high quality, digital learning material in Kannada and English created by the Azim Premji Foundation. They were also involved in focussed, activity-based learning in the fields of functional english, life skills, art and crafts, personality development
and sports. As part of their daily routine, the children were exposed to the Centres Childrens Library where they were encouraged to read in English and Kannada to increase their vocabulary, general knowledge and interests. A number of workshops and field trips were organised in the summer vacations which the children thoroughly enjoyed. During the Music Workshop, the children were exposed to the idea of creating music out of everyday objects. They got the opportunity to interact with musicians and play instruments like the guitar, keyboard, bongos and the tambourine, which many of them
experienced for the first time. The level of enthusiasm displayed by the children spoke volumes about the need for access to recreational learning. Another workshop on pottery allowed the children to explore clay as a medium of expression, also introducing them to the idea of pottery as a profession. The children were also taken on a fun-filled recreation trip to Madikeri and its surrounding areas. The Flood Relief and Rehabilitation efforts of the Foundation are ongoing through our involvement with the Government-led Aasare a public private partnership that channelizes
private sector assistance for the reconstruction of villages on higher ground to protect them from future calamities. Biocon is also building houses in Mangalgudda village, Badami Taluk.
2011
PRODUCT GLOSSARY
Affordability Index of Biocon Products

Abraxane ~60%
PICON
~50%
More economical than the leading brand in its category
Advacan
~45%
BASALOG
~40%
BIOMAb EGFR
~40%
STATIX
~40%
NUFIL safe
~30%
TACROGRAF
~30%
BESTOR
~30%
ERYPRO safe
~24%
Insugen
~20%
MYOKINASE
~10%
Cardiology
STATIx Active Ingredient: Atorvastatin 10/20/40/80 mg tablets Indication: Controls elevated cholesterol levels
STATIx f Active Ingredient: Atorvastatin 10 mg + Micronised Fenofibrate 200 mg tablets Indication: For Diabetic Dyslipidemia
STATIx - Ez Active Ingredient: Atorvastatin 10 mg + Ezetimibe 10 mg tablets Indication: Controls extremely high levels of cholesterol
TELMISAT Active Ingredient: Telmisartan 20/40/80 mg tablets Indication: Offers 24 hour blood pressure control
TELMISAT-h Active Ingredient: Telmisartan 40/80 mg + Hydrochlorothiazide 12.5 mg tablets Indication: In uncontrolled Hypertension
TELMISAT AM Active Ingredient: Telmisartan 40 mg + Amlodipine 5 mg tablets Indication: In Diabetic Hypertensives
ACTIBLOK - IPR Active Ingredient: Metoprolol Immediate & Patterned Release 25/50/100 mg tablets Indication: In patients of Hypertension, Angina, IHD and Heart Failure
ACTIBLOK AM Active Ingredient: Metoprolol Succinate IPR 25/50 mg + Amlodipine 5 mg tablets Indication: In Uncontrolled Hypertension
BESTOR Active Ingredient: Rosuvastatin Calcium 5/10/20 mg tablets Indication: For the management of Dyslipidemia and Atherosclerosis
BRADIA Active Ingredient: Ivabradine 5 mg tablets Indication: For the management of Stable Angina
Biocon Annual Report 2011 Product Glossary 53
CLASPRIN Active Ingredient: Aspirin 75/150 mg + Clopidogrel 75 mg capsules Indication: For early and long term risk reduction in high risk ACS patients
zARgO Active Ingredient: Losartan Potassium 25/50 mg tablets Indication: In hypertensive patients with CV co-morbidity
zARgO - h Active Ingredient: Losartan Potassium 50 mg + Hydrochlorothiazide 12.5 mg tablets Indication: In severe Hypertensive patients
MYOKINASE Active Ingredient: Recombinant Streptokinase for injection 1,500,000 IU Indication: In patients of Acute Myocardial Infarction
DYNALIx Active Ingredient: Enoxaparin 40/60 mg Pre Filled Syringe Indication: In patients of Acute Coronary Syndrome and Prophylaxis of Deep Vein Thrombosis
CLOTIDE Active Ingredient: Eptifibatide 10 ml bolus/100 ml for infusion Indication: In patients of Acute Coronary Syndrome, undergoing Percutaneous Coronary Interventions
PRASACTTM Active Ingredient: Prasugrel 5/10 mg tablets Indication: Reduces thrombotic CV events
TIROzESTTM Active Ingredient: Tirozest HCL 5 mg/100 ml vial Indication: In high risk ACS patients with Acute MI
Diabetology
INSUgEN 30/70 40 IU INSUgEN 50/50 40 IU
Insugen 30/70 100 IU Insugen 50/50 100 IU Insugen N 100 IU Insugen R 100 IU Active Ingredient: Each ml contains Human Insulin (rDNA origin), IP 100 IU Indication: In Diabetes, useful when oral agents fail to control blood glucose levels
INSUgEN N 40 IU INSUgEN R 40 IU
Active Ingredient: Each ml contains Human Insulin (rDNA origin), IP 40 IU Indication: In Diabetes, useful when oral agents fail to control blood glucose levels
BASALOg Active Ingredient: Each ml contains Insulin Glargine (rDNA Origin) 100 IU Indication: In Diabetes Mellitus, for 24 hrs basal insulin action
BLISTO Active Ingredient: Glimepiride 1/2/4 mg Indication: Oral antidiabetic agent that acts by stimulating beta cells leading to insulin secretion
BLISTO Mf Active Ingredient: Glimepiride 1 mg + Metformin 500 mg SR & Glimepiride 2/4 mg + Metformin 1000 mg SR Indication: Oral anti-diabetic agent that combination therapy that controls hyperglycaemia in Type 2 Diabetes
METADOzE-IPR Active Ingredient: Metformin 500/ 850 mg IPR Indication: Oral antidiabetic agent that improves action of Insulin in Type 2 Diabetes
TrigPM Active Ingredient: Glimepiride 1/2 mg + Pioglitazone 15 mg + Metformin 500 mg ER Indication: A triple drug combination for the management of Type 2 diabetes, uncontrolled with combination therapy of two drugs
zUKER-Mf Active Ingredient: Gliclazide 80 mg + Metformin 500 mg SR Indication: Oral anti-diabetic combination therapy for controlling hyperglycaemia in Type 2 diabetes
PIODART Active Ingredient: Pioglitazone 15/30 mg Indication: Oral anti-diabetic agent that improves action of insulin in Type 2 Diabetes
PIODART-Mf Active Ingredient: Pioglitazone 15 mg + Metformin ER 500 mg Indication: Improves blood sugar control when hyperglycaemia is not controlled by monotherapy
OLISAT Active Ingredient: Orlistat 60/120 mg Indication: Helps in Weight reduction
gABIL Active Ingredient: Gabapentin 300 mg + Methylcobalamin 500 mcg Indication: For reduction in diabetic neuropathy symptoms
gMAB Plus Active Ingredient: GLA 100 mg + Methylcobalamin 1500 mcg + ALA 100 mg + Benfothiamine 100 mg + Elemental Zinc 15 mg Indication: Nutritional supplement used along with other anti-diabetic medications
Nephrology
ERYPRO safe Active Ingredient: Recombinant Human Erythropoietin Alpha injection in strengths of 2000 IU/3000 IU/ 4000 IU/5000 IU/6000 IU/10000 IU Indication: For the treatment of patients with anemia due to chronic renal failure, either on dialysis or not on dialysis TACROgRAf Active Ingredient: Tacrolimus 0.5/1/2/3/5 mg capsules Indication: Prophylaxis of organ rejection in patients receiving allogenic liver, kidney or heart transplantation
ERYPRO Active Ingredient: Recombinant Human Erythropoietin Alpha 2000 IU/4000 IU/10000 IU Indication: For the treatment of patients with anemia due to chronic renal failure, either on dialysis or not on dialysis
RENODAPT Active Ingredient: Mycophenolate Mofetil 250 mg capsules and 500/ 750 mg tablets Indication: Prophylaxis of organ rejection in patients receiving allogenic renal, heart or liver transplants
RENODAPT-S Active Ingredient: Mycophenolic Acid 180/360/540 mg tablets Indication: Prophylaxis of organ rejection in patients receiving allogenic renal transplants
CYCLOPhIL ME (ORAL SOLUTION) Active Ingredient: Cyclosporine Oral Solution USP 100 mg/ml Indication: Prophylaxis of organ rejection in kidney, liver and heart allogenic transplants
CYCLOPhIL ME Active Ingredient: Cyclosporine USP 25/50/100 mg capsules Indication: Prophylaxis of organ rejection in kidney, liver and heart allogenic transplants
RAPACAN Active Ingredient: Sirolimus 1/2 mg tablets Indication: Prophylaxis of organ rejection in patients aged 13yrs or older receiving renal transplants
Narita+ Active Ingredient: Whey protein supplement fortified with vitamins and minerals, 200 gm tin Indication: Used as a nutritional supplement in chronic kidney patients undergoing dialysis
CeRACaL Active Ingredient: Cinacalcet hydrochloride equivalent to Cinacalcet 30/60 mg tablets Indication: Treatment of secondary hyperparathyroidism in dialysis patients
biOSEV Active Ingredient: Sevelamer HCl 400/800 mg tablets Indication: Control of serum phosphorous in patients with chronic kidney disease on dialysis
Advacan Active Ingredient: Everolimus 0.25/0.5 mg tablets Indication: Prophylaxis of organ rejection in adult patients at low to moderate immunologic risk receiving a kidney or cardiac transplant
Oncotherapeutics
BIOMAb EgfR Active Ingredient: Nimotuzumab 200 mg humanized monoclonal antibody targeting epidermal growth factor receptor Indication: For the treatment of locally advanced squamous cell carcinoma of head and neck, along with radiation and/or chemotherapy
Abraxane Active Ingredient: Paclitaxel protein-bound particles for injectable suspension (albumin-bound) Indication: Abraxane for Injectable Suspension is indicated for the treatment of breast cancer after failure of combination chemotherapy for metastatic disease or relapse within 6 months of adjuvant chemotherapy
ERYPRO safe Active Ingredient: Recombinant Human Erythropoietin Alpha 10000 IU/40000 IU Indication: For the treatment of chemotherapy induced anemia
NUfIL safe Active Ingredient: Filgrastim (Recombinant Human Granulocyte Colony Stimulating Factor) 300 g Indication: For the treatment of chemotherapy induced neutropenia
NUfIL Active Ingredient: Filgrastim (Recombinant Human Granulocyte Colony Stimulating Factor) 300 g Indication: For the treatment of chemotherapy induced neutropenia Evertor Active Ingredient: Everolimus 5 mg/10 mg Indication: For the treatment of advanced renal cell carcinoma after failure of treatment with Sutent or Sunitinib.
Immunology
PICON Active Ingredient: Pimecrolimus cream 1% w/w Indication: Mild to Moderate atopic Dermatitis
TBIS Active Ingredient: Tacrolimus ointment 0.03%/0.1% w/w Indication: Moderate to Severe Dermatitis
Comprehensive Care
CELRIM Active Ingredient: Cefepime 1gr Indication: Pneumonia Febrile Neutropenia Urinary Tract Infections Uncomplicated Skin and Skin Structure Infections Complicated Intra-abdominal Infections
MEEzAT Active Ingredient: Ceftazidime 1g Indication: Lower Respiratory Tract Infections Skin and Skin-Structure Infections Urinary Tract Infections Bacterial Septicemia Bone and Joint Infections Gynecologic Infections Intra-abdominal Infections Central Nervous System Infections
Biopiper Tz Active Ingredient: Piperacillin 4 g & Tazobactam 0.5 g Indication: Intra- abdominal Infections Skin and skin structure infections Postpartum endometritis or pelvic inflammatory disease Community-acquired pneumonia
CELRIM Tz Active Ingredient: Cefepime 1g & Tazo bactam 0.125 g Indication: Urinary tract infections Skin and skin structure infections and Complicated intra-abdominal infections
IMICELUM Active Ingredient: Imipenem 500 mg & Cilastatin 500 mg Indication: Lower respiratory tract infections Urinary tract infections Intra-abdominal infections Gyneacologic infections Bacterial septicemia Bone and joint infections Skin and skin structure infections Endocarditis ENTAVAR 600 Active Ingredient: Linezolid Tablet 600 mg Indication: In Gram-Positive infections VRE infections Nosocomial pneumonia Skin and skin structure infections Diabetic foot infections
PENMER 500 Active Ingredient: Meropenem 500 mg Indication: Skin and Skin Structure Infections Intraabdominal Infections Bacterial Meningitis
gENPIROME Active Ingredient: Cefpirome 1g Indication: Lower respiratory tract infections Complicated upper and lower urinary tract infections Bacteremia/ Septicaemia Febrile neutropenia Skin and soft tissue infections
ENTAVAR Active Ingredient: Linezolid I.V 200 mg/300 ml Indication: In Gram-Positive infections: VRE infections Nosocomial pneumonia Skin and skin structure infections Diabetic foot infections
PENMER Active Ingredient: Meropenem 1g Indication: Skin and Skin Structure Infections Intraabdominal Infections Bacterial Meningitis
2011
FINANCIAL HIGHLIGHTS
*Based on GAAP Consolidated Financial Statements Revenue
3000 (Rupees in Crores) 2500 2000 1673 1500 1000 500 990 1090 2405 2814
07
08
09 (Fiscal Year)
10
11
Profits (From Operations)

700 600 500 400 342 300 200 100 287 211 200 231 225 387 260 509 447 351 293 240 PBDIT PBT PAT 07 08 09 (Fiscal Year) 10 11 368 630
(Rupees in Crores)
Debt: Equity
2500 2272 2035 2000 (Rupees in Crores) 1739 1500 1256 187 1000 741 1069 500 Equity Debt 07 08 09 (Fiscal Year) 10 11 1484 1511 1758 255 524 514 2367 334
2033
Networth
2400 (Rupees in Crores) 2000 1600 1200 800 400 1069 1758 1484 1511 2033
07
08
09 (Fiscal Year)
10
11
Current Ratio (Excluding Pre-received Income)

1600 1400 (Rupees in Crores) 1200 1000 800 600 400 275 200 530 535 301 1.9 1.8 792 580 437 Current Assests Current Liabilities 07 08 09 (Fiscal Year) 10 11 Current Ratio 1.8 1092 1.9 1503 2.1
708
R&D Spend (Net)

100 90 80 7.8% 70 (Rupees in Crores) 60 5.8% 50 40 30 20 10 10 19 15 13 Revenue R&D Capital R&D 07 08 09 (Fiscal Year) 10 11 R&D as % of Biocon Revenue 39 47 7.1% 60 80 7.6%
78
6.5%
18
Biocon Annual Report 2011 Financial Highlights 61
Net Assests
(Rupees in Crores)
2500 2106 2000 1500 1000 500 1299 1778
2356
2454
07
08
09 (Fiscal Year)
10
11
EPS Before Exceptional Items & Book Value Per Share

160 148 140 120 (Rupees in Crores) 100 80 60 40 20 15 10 19 Book Value EPS Before Exceptional Items 07 08 09 (Fiscal Year) 11 Note: 2009 Post Bonus 76 107 88
102
10
12
12
Return On Net Assets

2000 1926 1800 1739 1600 (Rupees in Crores) 1400 1200 1000 800 600 400 200 200 225 17% 16% 14% 240 293 368 Operational PAT Fixed Assets, Net Working Capital & Intangible Assets 07 08 09 (Fiscal Year) 10 11 Return On Net Assets 15% 18% 1219 1304
1994
Revenues By Segment
3000 43 37 281 2453 1800 64 225 1200 4 135 109 741 742 36 176 46 832 2087 318
2400 (Rupees in Crores)
1384
Others Custom Research Enzymes Pharma
600
07
08
09 (Fiscal Year)
10
11
Distribution of Revenues - FY11
15% 3% 7% 1%
Material Costs Employee Costs Other Expenses
64% 13% 14% 1% 7% 3% 15%
14%
64%
Interest Depreciation Tax Operational PAT
13%
Biocon Annual Report 2011 Financial Highlights 63
FINANCIAL REPORT
66 73 83 95
Directors Report Management Discussion & Analysis Corporate Governance Report Financial IGAAP Stand Alone
129
Biocon Limited & Subsidiaries IGAAP
2011
BIOCON LIMITED
Directors Report
Dear Shareholders, We are pleased to present Thirty-third Annual Report on business and operations together with the audited financial statements and the auditors report of your company for the financial year ended 31st March 2011. The financial highlights for the year under review are given below:
Results of Operations:
` in Millions
Particulars for the year ended March 31, Total Revenues Total Expenditure Profit before Interest, Depreciation and Tax Interest Depreciation Profit before Tax Income Tax Profit after Tax Surplus b/f from previous year Profit available for appropriation Proposed dividend Tax on proposed divided Transfer to General Reserve Balance in Profit and Loss account 2011 15,921 9,824 6,097 24 902 5,171 579 4,592 9,470 14,062 900 90 459 12,613 2010 12,289 8,710 3,579 20 797 2,762 278 2,484 8,009 10,493 700 74 248 9,470
Consolidated Results (Under Indian GAAP):

` in Millions
Particulars for the year ended March 31, Total Revenues Total Expenditure Profit before Interest, Depreciation and Tax Interest Depreciation Profit before Tax and Exceptional Items Income Tax Profit after Tax, before Minority Interest Minority Interest Profit after Tax 2011 28,137 21,841 6,296 257 1,568 4,471 721 3750 (75) 3,675 2010 24,048 18,963 5,085 169 1,401 3,515 487 3,028 (96) 2,932
Biocon Limited
For the year ended March 31, 2011 consolidated revenues grew by 17% driven by a strong growth in biopharmaceutical segment, EBITDA grew by 24% and Profit after tax (PAT) grew by 25% to ` 3,675 million as compared to ` 2,932 million in the previous financial year. The highlight of this past year was the strategic partnership with Pfizer for taking our biosimilar insulin global. The standalone financial statements reflect higher profits on account of transfer of certain intangible to subsidiaries within the group, which are eliminated upon consolidation. A detailed performance analysis is also discussed in the Management Discussion and Analysis, which is annexed to this report.
Appropriations
Dividend Directors are pleased to recommend a final dividend of ` 3.00 per equity share, which is in addition to the interim dividend of ` 1.50 per share takes the total dividend payout to 90% on the paid up equity capital of the Company. Transfer to Reserves We propose to transfer ` 459 millions to the General Reserves and the balance of ` 12,613 million is proposed to be retained in the profit and loss account.
Business Operations Overview and Outlook:

During the year, Companys revenue increased by 17% from ` 24,048 million to ` 28,137 million. The growth in biopharmaceuticals sales was driven by a significant increase in sale across business segments including statins, immunosuppresants and insulins. The immunosuppresants segment specifically grew by over 30%. The domestic branded formulations business grew 36% on increasing market share of key brands, introduction of new products and the launch of two new divisions Immunotherapy and Comprehensive Care. We have sought both research and marketing partnerships as a way to access global markets and we have forged some key strategic partnerships this year. The most visible and high-profile partnership that we recently announced was with Pfizer to commercialize our insulins portfolio which is going to be a very important growth driver in the foreseeable future. Industry reports cite the insulin market at about US$ 15 billion today and estimated to grow to a size of US$ 20 billion by 2020. The insulins space accounts for 46% of the total diabetes drug segment. We estimate this business will continue to grow at about 6% per annum going forward, factoring the advent of biosimilar insulins. Biocons partnership with Pfizer aims at addressing this very large opportunity first in the emerging markets, which offer sizeable volume and thereafter at a later stage, enter the developed markets. Clinical trials for recombinant human insulin for the European Market are in progress and patient recruitments are currently underway. Biocons insulin business in India is also beginning to gain traction and although our insulins business is merely seven years old, we have steadily gained market share. In volume terms, we have around 11% share in the insulin vial segment and around 13% market share in the glargine vial segment. While the market has grown 11%, Biocons sales in the segment has grown by over 12%. Another significant event in this past year was the supply agreement with Optimer Pharmaceuticals for the supply of Fidaxomicin API. Biocon is the currently sole supplier of this product for certain regulated markets and has been involved with this project from 2005. We have made considerable progress in our partnership with Mylan for developing biosimilar monoclonal antibodies for the global markets. In addition to this, we have some very key strategic research partnerships with Amylin, Vaccinex, the Center for Immunology in Havana, and IATRICa. What really makes this whole partnering opportunity special for us is that we can develop all these programs leveraging Indias costs and clinical base in a very cost-effective manner, and we are able to take them first to the emerging markets and then on to the regulated markets as the program advances. Within the novel pipeline, the Company released encouraging preliminary data from a recently concluded Phase III clinical study conducted in India on IN-105, its novel oral insulin candidate for the treatment of diabetes. Initial data analysis show that an unexpectedly high placebo effect prevented IN-105 from meeting its primary end point of lowering HbA1c as compared to placebo by a margin effect. However, multiple secondary endpoints on both efficacy and safety were met, further strengthening the emerging profile of IN-105. Our coveted T1h program for a novel Anti-CD6 targeting monoclonal antibody is in Phase III clinical trials for Psoriasis. Additionally, our novel anti-CD20 molecule (BVX 20 with Vaccinex) has completed preclinical studies and we are scheduled to commence clinical trials this year. Our novel programs are expected to unlock substantial value upon licensing in the coming years.
Subsidiaries and Joint Ventures:

Syngene International Limited: Syngene continues to be one of the leading contract research organizations in the country which offers integrated services across discovery and development continuum. State-of-the-art infrastructure, talented and experienced scientific and techno-commercial team, flexibility of business models, robust communication systems, ability to consistently deliver with quality and speed are some of the reasons why Syngene has become a preferred partner of choice for several small, medium and large companies around the world. In addition to pharmaceutical companies, Syngene has developed a broad customer base in other industries including fine chemical, petrochemical, agro, cosmetic and electronic companies. During the year, Syngene continued to successfully manage large relationships including those with Bristol-Myers Squibb, Merck and DuPont Agro division which involved various aspects of drug discovery and development research. With the emergence of biologics over past few years as important medicinal interventions, Syngene also offer services in discovery and development of biologic molecules. Syngenes state-of-the-art biologics pilot plant is capable of delivering clinical trial material of both bacterial and mammalian origin. During the financial year 2010-11, Syngene registered a strong growth of 21% in revenues from ` 2,675 million to ` 3,231 million. Operational Margin (EBITDA) increased from ` 877 million to ` 1,005 million representing a 14% increase during the year.
Biocon Annual Report 2011 Financials 67
Increased charge on account of depreciation has led to a marginal decline in the net profit which was at ` 283 million for the year against of ` 308 million for the previous year. Clinigene International Limited: For the year under review, Clinigene registered revenues of ` 289 million Clinigene had a challenging year and has incurred a loss of ` 37 million on account unfavourable market conditions, delay in study startup and intensive pricing pressures. Clinigene is continuing to evolve and adapt its capability platforms and service offerings against a background of continued macro market pressure as global R&D spends are being reduced, consolidation of market players continues and the shift to globally capable preferred partnerships accelerates. In addition to our standard service platforms, we have identified several more specialized areas, for example patient based early studies, complex BA/BE studies and immunoanalytical services where Clinigene offers strong capabilities. We believe that, these new speciality services, which have relatively high entry barriers, will allow us to drive new and differential revenue opportunities. Biocon Biopharmaceuticals Private Limited: During the year Biocon Biopharmaceuticals Private Limited (BBPL) became a wholly owned subsidiary of the Company. For the year under review, BBPL earned revenues of ` 491 million as against ` 381 million in the previous year. The net profits for the year stood at ` 192 million as against ` 26 million in the previous year. Biocon Research Limited: Biocon Research Limited (BRL) is a wholly owned subsidiary set up to undertake discovery and development research work in biologics, antibody molecules and proteins. For the current year BRL registered revenues of ` 649 million as against ` 392 million in the previous year. BRL continues to progress the development activity on the monoclonal antibody program in joint collaboration with Mylan. BRL has reported a net loss of ` 322 Million for the year ended March 31, 2011 against a loss of ` 51 million in the previous year. Being a research driven enterprise, the Company is in the initial stage of operations and has enlarged its scope to other challenging research projects during the year. Biocon SA: Biocon SA, a wholly owned subsidiary in Switzerland is primarily engaged in development and commercialisation of biopharmaceuticals across the globe. Clinical Development of Insulin is currently ongoing in the European region. AxiCorp GmbH: AxiCorp is a specialized Pharma marketing and distribution company based in Germany. For the current financial year AxiCorp revenues rose from ` 9,117 million to ` 9,800 million. The Company earned a net profit of ` 353 million for the year against ` 299 million for the previous year. Given the synergies brought about by the Pfizer partnership, the Company has decided to divest its 78% stake in AxiCorp to the existing group of promoter shareholders. NeoBiocon FZ LLC: NeoBiocon FZ LLC is a pharmaceutical research and marketing company based at Abu Dhabi. Incorporated in January 2008, NeoBiocon is an equal joint venture with Dr. B.R. Shetty of NeoPharma. During the current year, NeoBiocon registered significant growth in revenue to ` 60 million and a net profit of ` 21 million. In addition to launching oncology products. NeoBiocons range of branded generic products, now approved by the UAE Ministry of Health, has been successfully launched to address the therapeutic segments of cardiology, diabetology and infection management. Biocon SDN. BHD. During the year, Company has incorporated a wholly owned subsidiary in Malaysia to set up a state of the art manufacturing facility at BioXcell a biotechnology park promoted by the Government of Malaysia. In the first phase of capital outlay the Company envisages an investment of US$ 161 million and expects the facility to go on stream by year 2015.
Consolidated financial statements:

The consolidated financial statements have been prepared by the Company in accordance with the Accounting Standards as prescribed by the Companies (Accounting Standards) Rules, 2006. The audited consolidated financial statements together with Auditors Report thereon also form part of the Annual report.
Accounts of subsidiary companies:

The Ministry of Company Affairs has granted General Exemption to Companies from attaching the financial accounts of the subsidiary companies to this Report pursuant to Section 212 of the Companies Act, 1956. However, a statement showing the relevant details of the Subsidiaries is enclosed and is a part of the Annual Report. The members can write to the Company for obtaining the annual accounts of the subsidiary companies and copies will also be available for inspection at the registered office in Bangalore, India.
Employees Stock Option Plan (ESOP):

Pursuant to the provisions of Guideline 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme), Guidelines, 1999, as amended, the details of stock options as on March 31, 2011 are set out in the Annexure to the Directors Report.
Biocon Limited
Corporate Governance:
We strive to attain high standards of corporate governance while interacting with all our stakeholders. The Company has complied with the corporate governance code as stipulated under the listing agreement with the stock exchanges. A separate section on Corporate Governance along with a certificate from the auditors confirming the level of compliance is annexed and forms a part of the Directors report.
Evaluation of Board effectiveness:

The evaluation of the performance of the Board is periodically carried out by the Chairman of the Audit Committee to measure the effectiveness of the Board. Dr Bain has considerable experience in Board reviews and has carried out similar exercises for other companies in the United Kingdom and elsewhere. The review conducted earlier showed overall confidence in the company and the Boards oversight of corporate strategies. Action plans for certain improvements in key areas were reviewed and evaluated for implementation.
Directors:
Dr. Neville Bain and Mr. Bala Manian shall retire by rotation at the ensuing Annual General Meeting, and being eligible, offer themselves for re-appointment. Mr. Russell Walls was inducted as Additional Director by the board of directors on 28th April 2011. A resolution confirming his appointment as a director liable to retire by rotation is proposed at the Annual General Meeting.
Auditors:
The Statutory Auditors M/s. S. R. Batliboi & Associates (Firm Registration No. 10104910), Chartered Accountants, Bangalore, retire at the ensuing Annual General Meeting, and have confirmed their eligibility and willingness to accept office, if re-appointed.
Cost Audit:
Pursuant to Section 233B of the Companies Act, 1956, the Central Government has prescribed cost audit of the Companys bulk drug and formulation division. The board has appointed the Cost Auditors and they have been duly approved by the Central Government.
Management Discussion and Analysis Report:

The report as required under the Listing agreements with the Stock Exchanges is annexed and forms part of the Directors Report.
Cumulative disclosure under the stock option scheme as on March 31, 2011:
Disclosure of the particulars of stock options schemes as on the above date, as per SEBI guidelines: Particulars a. b. i) Options Granted (Post equity split and bonus, net of options cancelled) Pre-bonus of 2008 Post-bonus of 2008 Third Grant 444,600 Fourth Grant 5,701,628 Fifth Grant 235,428
Exercise price i) ii) ` 315 each 20% discount to Market Price on date of Grant ` 157.5 each 426,450 340,275 340,275 104,950 None 909 Nil Nil Nil 4,411,433 3,068,317 3,068,317 1,721,946 None 4,459 1,343,115 1,590,526 Please see Table (1) below for details regarding options granted to key managerial employees None 235,428 Nil Market Price on date of Grant
c. d. e. f. g. h. i. j. k.
Options vested Options exercised Total number of Equity Shares to be transferred from the ESOP Trust as a result of exercise of options Options lapsed Variation in the terms of options Money realized by exercise of options (` lacs) Option pending exercise Total number of options in force Person-wise details of options granted to: i. Directors and key managerial employees
l. m.
Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of options Vesting schedule
Not applicable since shares will be transferred by the ESOP Trust upon exercise of the options and the Company will not be required to issue any new shares 25% each in April of 2005, 2006, 2007 and 2008. Year 1-25% Year 2-35% Year 3-40% (Year 1 being 3 years from date of joining or 1 year from July 19, 2006, whichever is later) Year 1-25% Year 2-35% Year 3-40% (Year 1 being 3 years from date of joining)
n.
Lock-in
No lock-in, subject to a minimum vesting period of 1 year.
There are no employees who have received a grant in any one year amounting to 5% or more of the options granted during that year. There are no employees who have been granted options during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant. Consequent to the bonus shares in the ratio 1:1 on Sept 15, 2008, employees who had not exercised their options were credited with bonus entitlements based on ESOP Plan (Eligibility for corporate action).
Table (1) details regarding options granted to key managerial employees are provided below: Sl. No. 1. 2. 3. Name of Director or key managerial personnel Mr. Chinappa M B Mr. Sandeep Rao Mr. Harish Iyer Fourth Grant (No. of Options Granted)* 75,000* 60,000* 60,000* Key managerial employees
*Adjusted for 2008 Bonus issue.
Fixed Deposits:
The Company has not accepted any fixed deposits from public.
Directors responsibility statement:

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Board of Directors hereby confirm as under: i) In preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; ii) We have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; iii) We have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) We have prepared the annual accounts on a going concern basis.
Particulars of Research and Development, Conservation of energy, technology absorption etc:

Particulars required under Section 217 (I) (e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in the annexure to the Report.
Particulars of employees
In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended, is annexed and is a part of this report. However, having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.
Acknowledgements
The Board greatly appreciates the commitment and dedication of employees at all levels who have contributed to the growth and success of the Company. We would also thank all our clients, vendors, investors, bankers and other business associates for their continued support and encouragement during the year. We also thank the Government of India, Government of Karnataka, Min istry of Information Technology and Biotechnology, Ministry of Commerce and Industry, Ministry of Finance, Department of Scientific & Industrial Research, Customs and Excise Departments, Income Tax Department, CSEZ, LTU Bangalore and all other Government agencies for their support during the year and look forward to their continued support in the future.
For and on behalf of the Board
Kiran Mazumdar-Shaw Chairman and Managing Director April 28, 2011
John Shaw Vice Chairman
Biocon Limited
Annexure to the Directors Report

Particulars under Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 for the year ended March 31, 2011. Conservation of Energy During the year, the Company has taken significant measures to reduce the energy consumption by using energy-efficient machines and equipment. FORM A
Year ended March 31, 2011 A. Power and Fuel Consumption 1. a) Electricity Electricity Purchase Unit (000) Total Amount (` in Lakhs) Rate per Unit b) Own Generation from Diesel Generator Unit (000) Total Amount (` in Lakhs) Rate per Unit 2. Furnace Oil * Unit (K.Ltrs) Total Cost (` in Lakhs) Average/K. Ltrs 8,356 2,282 27,311 8,343 1,841 22,063 12,247 1,139 9.30 11,119 869 7.81 99,478 5,060 5.09 94,726 4,649 4.91 Year ended March 31, 2010
* Including used for production B. Consumption per unit of Production
The disclosure of consumption figures per unit of production is not meaningful as the operations of the Company is not power intensive and involves multiple products. FORM B 1. 2. 3. Specific areas in which R&D work has been carried out by the Company Process and Clinical Development of Novel Biotherapeutics in Oncology, Diabetes, Rheumatology and Cardiovascular segments. Process and Clinical Development of Biosimilars in Oncology, Metabolic disorders, Diabetes, Rheumatology and Cardiovascular segments. Development of Synthetic and Fermentation based Generic Small Molecules for Anti-infective, Cardio-vascular, Nephrology and Transplantation segments. Generation of Intellectual Property Development Process Patents for manufacture of key Generic Small Molecules and Biotherapeutics and unraveling the mechanism of action of novel biotherapeutics Development of globally competitive manufacturing processes Clinical Development of new drug combinations Benefits derived as a result of R&D activities Scale-up of key Biosimilars with improved productivity and process efficiencies Strategic collaborations for development of new Biotherapeutics Global presence in supply of fermentation based Small Molecules to the Generic Industry in regulated markets Rich pipeline of Generic Small Molecules catering to varied therapeutic areas Internationally competitive prices and product quality Established intellectual property with 1076 Patents/ PCT applications filed in Indian and International markets Safe and environment friendly processes Future Plan of Action Greater importance in the research areas of New Drug Discovery Clinical Development of existing pipeline of Biotherapeutics for Regulated markets Strategic Collaborations for increased speed and cost competitiveness in Drug Discovery Continued emphasis on Monoclonal Antibodies and Biotherapeutics leveraging on Biocons in-house process development and analytical skills Continue to strengthen R&D capabilities in the area of New Biotherapeutics
4.
Expenditure on scientific Research & Development: ` in Million

March 31, 2011 March 31, 2010 129 1,126 1,255 502 754 10.8%
a) b)
Capital Recurring Total Less: Recharge Net R & D Expenses Total R& D expenditure as percentage of sales
183 1,062 1,245 725 520 8.1%
5. 6.
Technology Absorption, Adoption and Innovation: No technology was imported by the Company during the year. Foreign Exchange earnings and outgo: Foreign exchange earned and used for the year: ` in Million
March 31, 2011 March 31, 2010 5,057 4,595 462
Gross Earnings Outflow* Net foreign exchange earnings
6,935 4,881 2,054
*For details please refer to information given in the notes to accounts to the annual accounts of the Company Schedule 17 item no. 7 (d) to (g).
Section 212
Statement pursuant to Section 212 of the Companies Act, 1956 relating to Holding Companys interest in the Subsidiary Companies All amounts in Indian Rupees thousands Syngene International Limited Financial year of the subsidiary ended on 1. (a) Number of shares held by Biocon Limited at the end of the above date March 31, 2011 28,74,830 equity shares of ` 10/- each 99.99% Clinigene International Limited March 31, 2011 50,000 equity shares of ` 10/- each 100% Biocon Biopharmaceuticals Private Limited March 31, 2011 17,600,000 equity shares of ` 10/- each 100% Biocon Research Limited March 31, 2011 5,00,000 equity shares of ` 1/- each 100% Biocon SA AxiCorp GmbH December 31, 2010 177,100 equity shares of 1/- Euro each 78%
March 31, 2011 100,000 equity shares of 1/- CHF each 100%
(b) 2.
Extent of interest on above dated
Net aggregate amount of the Subsidiary Companys Profit/(Loss) so far it concerns members of the Holding Company and (a) (i) (ii) (b) (i) (ii) is not dealt in the Companys account for the financial year ended March 31, 2011 for the previous financial years, since it became a subsidiary is dealt in the Companys account for the financial year ended March 31, 2011 for the previous financial years, since it became a subsidiary Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil 282,744 1,799,584 (37,988) 39,971 192,047 (178,324) (322,438) (50,620) 72,805 (29,696) 275,516 370,465
Biocon Limited
Management Discussion and Analysis

(All amounts in Indian Rupees thousands, except share data including share price and amounts expressed in foreign currency) This discussion may contain forward-looking statements that involve risks and uncertainties.
1. Industry Overview, Opportunities and Outlook

India has attained global acceptance as a key pharmaceutical manufacturing hub with the largest number of USFDA and EMEA approvals outside the US and EU. Good technical expertise combined with an increasing number of drugs turning generic has enabled the Indian Pharmaceutical Industry to emerge as one of the worlds largest producer of generic drugs with annual exports worth $ 11 Billion in 2010. Indias Pharma Industry: A $50 billion sector by 2015 (OPPI) 60 50 40
US$ in billions
30 20 10 0
2002-03
2007-08E
Domestic Formulation Bulk Drug Exports
2011-12P
Contract Research
2015-16P
Formulation Exports
IMS expects the global pharma market in 2011 to top US$ 880 billion with a growth of 5-7%
US Size : US $320 330 bn Growth : 3 5%
Top 5 Europe Size : US $ 135 145bn Growth : 1 3% Japan Size : US $ 95 100bn Growth : 5 7% Rest of the World Size : US $ 145 155bn Growth : 3 5%
Pharmerging markets Size : US $ 170 180bn Growth : 15 17% Global Market Size : US $ 880 890bn Growth : 5 7%
Source: IMS Health, Market Prognosis Sep. 2010. Vietnam (VT) are expected to maintain double-digit growth
2011 Sales & Growth
Though several APAC markets will slow, China (CH), India (IND), Indonesia (INA) and
APAC Historical and Project Growth

Projected Growth 2010 - 2014 (LCD/MNF)
30% 25% 20% 15% 10%

AUS INA VT CH IND
KOR MY PH TH
5% 0% 0%
TW
5%
10%
15%
20%
25%
30%
Historical Growth 2005 - 2009 CAGR (LCD/MNF) Bubble size corresponds to 2014 Sales Source: IMS Market Prognosis Sep. 2010.
Drawing from this success, the Indian Pharmaceutical sector is now aiming for the next big opportunity in pharmaceutical manufacturing viz. Biologics, especially bio-similars. India therefore has the opportunity to become the global bio-manufacturing hub thus enhancing its stature as the worlds apothecary. The biopharmaceutical market is currently worth nearly US $137 billion and growing rapidly. Industry experts estimate that it could be worth US $319 billion by 2020. Moreover, at least 48 biologic products with combined sales of nearly US $60 billion are due to come off patent over the next decade. Today Indias share of the Bio-pharmaceutical market is a mere 1.4% but the potential for India to become a manufacturing hub for biopharmaceuticals is enormous.
2. Business and Operational Overview

During this year, Biocons total revenues increased by 17% from ` 24,048 million to ` 28,136 million. The growth in biopharmaceuticals sales was driven by a significant increase in sales across business segment including statins, immunosuppresants and insulins. The immunosuppresants segment grew over 30%. The domestic branded formulations business grew 36% on key brands successfully increasing market share and the introduction of new products in two new divisions Immunotherapy and Comprehensive Care. Portfolio approach Biocon has successfully developed comprehensive portfolios of statins and immunosuppressants as generic APIs in the small molecule space and this has contributed to 75% of our revenues and delivered a sustainable 5-year CAGR of 24%. The path ahead is to expand our small molecule portfolios to prostaglandins and peptides. Biocon is selective about the portfolios that it chooses and hopes to move up the value curve from APIs to dossiers, especially in the ANDAs. We believe that this approach will give us and drive much higher value growth for us in the year ahead. Our approach in large molecules has been, again, a portfolio approach where we have focused on 2 broad portfolios; the first is the insulins which includes recombinant human insulin and insulin analogs, and the second portfolio is the monoclonal antibodies basket. In the large molecule space, however, we have chosen to straddle both biosimilars as well as novel programs as a risk-balanced strategy where we believe that the novel programs have the potential of large upside, if successful. Our portfolio approach has yielded good financial returns and has allowed us to forge very strong partnerships. Research and Marketing partnerships are the way to go We have sought both research and marketing partnerships as a way to access global markets and we have forged key strategic partnerships this year. The most visible and high-profile partnership that we recently announced was with Pfizer to commercialize our insulins portfolio which is going to be a very important growth driver for your Company in the foreseeable future. Industry reports cite the insulin market at about US$ 15 billion today and estimated to grow to a size of US$ 20 billion by 2020. The insulins space accounts for 46% of the diabetes drug segment. We estimate this business will continue to grow at about 6% per annum going forward, factoring in the advent of biosimilar insulins. Of course, it is well-recognized that insulin analogs are rapidly outpacing recombinant human insulin and it is also well-accepted that biosimilar insulins are inevitable.
8 7 6
% (percentage)
7% 6%
5 4 3 2 1 0
4%
Global Pharma Sales
Diabetes Sales
Biologics Sales
Source: EvaluatePharma
50 40
US$ billion
5.2% 38
4.8% 4.7%
41
4.9%
42
5%
5.0% 4.8% 4.6% 4.4% 4.2%
30 20
30
32
33
35
4.5% 4.4% 4.3%
10 0
2010
2011
2012
2013
2014
2015
2016
4.0%
Global Diabetes Sales (US$ billion)

Source: EvaluatePharma
% of Global Pharma Sales
Biocon Limited
We think there are compelling reasons for biosimilar insulins to enter the regulated markets, driven by escalating concerns on cost of therapies in these markets, clarity on regulatory path ways and expiry of patents on product analogues. We highlight them below 1. Cost compulsions are likely to escalate in the regulated markets over the next few years with ageing populations and this makes a strong case for biosimilars; 2. Regulatory pathways for approval more or less clear; 3. Product patents on the analogues expiring through 2019. Market data indicates the growth of diabetic population across the world and more pronounced in developing economies specifically in Asia and MENA. In the age group of 20 to 79 years, it is estimated that 7.8% of the Worlds population will be diabetic by 2030. Prevalence of diabetes in people aged 20-79 years.
15
13.6%
2010
2030
12 % (percentage)
9.7% 10.1% 8.6% 7.7%
11.7%
9 6 3 0
3.2% 3.7%
7.8% 6.3%
8.4% 7.0% 6.4% 5.0%
7.8% 6.6%
North America & Caribbean
Europe
MENA
SouthEast Asia
South Central America
Western Pacific
Africa
Global
Source: IDF Diabetes Atlas, 4th edition, 2010, RBS report on Pharmaceuticals, April 21, 2011 Biocons partnership with Pfizer aims at addressing this very large opportunity first in the emerging markets, which themselves offer sizeable markets and then at a later stage, enter the U.S. and European markets. Clinical trials for recombinant human insulin for the European Market are currently underway with the aim of an entry within the next few year. Biocons insulin business in India is also beginning to gain traction and although our insulins business is merely seven years old, we have steadily gained market share in volume. In volume terms, we have around 11% share in the insulin vial segment and 13% market share in the Glargine vial segment. We expect to roll out devices in the second half of 2011 and this, we believe, will enable us to increase market share. At a growth level, we have outpaced both the market and the market leader in the insulin vial segment. While the market has grown 11%. Biocon has grown by 13% in value terms. We also are going to be sharing the Indian market with Pfizer starting this year, and this co-exclusive marketing arrangement is expected to help get us higher market share going forward. We have made considerable progress in our partnership with Mylan for developing biosimilar monoclonal antibodies for the global markets. In addition to this, we have some very key strategic research partnerships with Amylin, Vaccinex, Center for Immunology in Havana, and IATRICa. All of these programs are developed, leveraging Indias costs and clinical base in a cost-effective manner. We expect to initiate discussions for partnering many of these programs in the coming fiscal. Another supply partnership in this past year is with Optimer Pharmaceuticals for the supply of Fidaxomicin API. Biocon is the sole supplier of this product for North America. Biocon has been involved with this project from 2005 and has been able to successfully scale up the process. Fidaxomicin is used for the treatment of CDI Clostridium Difficile Infection, which is a major threat in hospitals across the US. Late-stage Novel programs to see unlocking of value Our novel pipeline comprises of products in diabetes, oncology and auto-immune diseases. Within our novel pipeline, your Company released encouraging preliminary data from a recently concluded clinical study conducted in India, on IN-105, its novel oral insulin candidate for the treatment of diabetes. Initial data analyses show that an unexpectedly high placebo effect prevented IN-105 from meeting its primary end point of lowering HbA1c levels by a marginal effect as compared to placebo. However, multiple secondary endpoints on both efficacy and safety were met, further strengthening the emerging profile of IN-105. Our coveted T1h program for a novel Anti-CD6 targeting monoclonal antibody is in Phase III clinical trials for Psoriasis. The target indications are expected to address a market size of US$ 20 billion by 2015. Additionally, our novel anti-CD20 molecule has completed preclinical studies and is expected to get into the clinic in India this year. Our novel programs are expected to unlock substantial value upon licensing. Emerging Markets are large and offer great growth opportunities The emerging markets are going to be high growth, high-return markets for Biocon. We have already delivered a 40% growth in our emerging markets business this year and we expect to improve on this in the years ahead. Biosimilar insulins are certainly going to be very
important for these emerging market strategies. The current emerging market estimate for this insulin business is about US$ 1.5 billion with a 5-year CAGR of 15%. Estimated at US$ 5 billion by 2020, the insulin market in the emerging economies account for 70% of the worlds diabetic population they offer us quick market entry. Biosimilar Mabs in the emerging markets are also a very important opportunity for us. Generics, again, are going to be extremely important for this as APAC alone accounts for 16% of the US$ 124 billion generics market with the fastest growth rate. Trend of Externalizing R&D continues on a firmer path The research services landscape continued to be challenging this year. While Big Pharma is still externalizing over 22% of its R&D, we also see risk sharing and resource sharing models evolve along with a move from component to integrated discovery programs and from chemistry to biologics. It is no longer cost, time and productivity arbitrage that are rationales for externalizing research. Finally, although Big Pharma can in-license from small biotechs in order to fill up the research pipelines, it is amply clear that this is not adequate. This is the main reason why externalizing the development of biologics is becoming a big opportunity for our research services companies, Syngene and Clinigene. Both are very well-positioned to offer this integrated platform of end-to-end solutions for both NCEs and NBEs. An important partnership that we have developed in this risk sharing integrated model is BBRC, which is a dedicated, integrated R&D hub customized for Bristol-Myers Squibb to pursue pipeline development. This facility has over 450 scientists and it works in a seamless way with its labs back in the US.
People
People are our key assets. Our goal is to create a culture of excellence. Our human resource department strives to hire the best talent available, keep them engaged and competitive and create a harmonious, satisfactory work culture. Some key initiatives taken this year Launch of leadership development initiative targeted at middle and senior managements Establishing recruitment alliances with tier-1 business schools (ISB, IIMs, XLRI, NMIMS, NITIE, MDI) and reputed engineering/pharmacy colleges (IITs, BITs-Pilani & Goa, NIPER and UICT) to ensure a steady stream of high quality talent. Strengthening the goal-setting process by dovetailing vertical goals with individual objectives. An online training tool for technical and behavioral training programs was developed in house. Conducting an all India assessment program for Healthcare Marketing to build a strong talent pool. A breakup of the talent profile across the group is as below:
Biocon Group
Education PhD Post Grad Graduate Engineers CA/MBA/ICWA/CS/LLB Graduate / Undergraduates Total 2009-10 273 2035 102 172 1896 4478 2010-11 260 2328 210 214 2573 5585
The following priorities have been identified for 2011: Strengthening the brand value of Biocon leadership through Phase 2 of the Leadership Development Initiative. Setting up collaborations with finishing schools to develop a pool of quality talent. Strengthening the performance appraisal process Reinforcing training design and delivery process Implement strategies to aid in attracting quality talent Employee engagement and organization development programs.
Biocon Limited
3. Financial Performance
Overview The financial statements have been prepared in compliance with the requirements of the Companies Act, 1956, and Generally Accepted Accounting Principles (GAAP) in India. (All amounts in Indian Rupees thousands)
March 31, 2011 Sources of Funds Shareholders Funds Share capital Reserves and surplus Loan Funds Secured loans Unsecured loans Deferred Tax Liability (Net) Application of Funds Fixed Assets Gross Block Less: Accumulated depreciation Net Block Capital work-in-progress Intangible Assets Investments Current Assets, Loans and Advances Inventories Sundry debtors Cash and bank balances Loans and advances Less: Current Liabilities and Provisions Current Liabilities Provisions Net Current Assets 3,153,719 1,101,908 4,255,627 8,861,991 21,549,995 3,816,243 832,476 4,648,719 6,437,640 17,991,337 -17% 32% -8% 38% 20% 2,747,374 4,181,044 2,102,320 4,086,880 13,117,618 2,447,986 3,836,444 771,218 4,030,711 11,086,359 12% 9% 173% 1% 18% 10,924,574 4,262,198 6,662,376 1,032,909 7,695,285 134,490 4,858,229 10,018,002 3,418,093 6,599,909 583,344 7,183,253 184,062 4,186,382 9% 25% 1% 77% 7% -27% 16% 740,643 945,743 1,686,386 395,518 21,549,995 896,834 1,021,228 1,918,062 410,408 17,991,337 -17% -7% -12% -4% 20% 1,000,000 18,468,091 19,468,091 1,000,000 14,662,867 15,662,867 0% 26% 24% March 31, 2010 Change
Share Capital
The Company has only one class of shares i.e. equity share capital comprising of 200,000,000 equity shares of ` 5 each. During the year there has been no change in the equity capital of the Company. Reserves and surplus The total reserves and surplus has increased from ` 14,662,867 in March 31, 2010 to ` 18,468,091 in March 31, 2011. The increase is primarily on account accumulations of profits made during the year of ` 4,592,495 net of Dividend distribution. Loan funds There has been a decrease in total loans outstanding from ` 1,918,062 in March 2010 to ` 1,686,386 in March 2011. Unsecured loans decreased by ` 75,485 primarily on account of decrease in short term borrowings from the banks. During the year, the Company received financial assistance of ` 62,100 under Industrial Partnership Programs and Drugs and Pharmaceutical Research Programs sponsored by government bodies for financing its research projects. The loan is repayable over a period of 5-10 years from date of completion of the projects. As at March 31, 2011, the Company has utilized ` 648,624 under deferred sales tax payment facility. The sales tax liability is repayable in ten half yearly installments from August 2012. Secured loans decreased by ` 156,191 due to decrease in bank borrowings.
Fixed Assets 2011 Cost Less : Accumulated depreciation Net Block Add : Capital work-in-progress Net fixed assets Net Asset turnover ratio 10,924,574 4,262,198 6,662,376 1,032,909 7,695,285 1.72 2010 10,018,002 3,418,093 6,599,909 583,344 7,183,253 1.57 Change 9% 25% 1% 77% 7% 22%
During the year 2011, the Company has capitalized fixed assets to the extent of ` 942,162. The primarily additions are in plant and machinery of ` 532,874 and research and development equipments of ` 250,320. The capital work in progress as at March 31, 2011, represents advances paid towards purchase of fixed assets and the acquisition costs relating to assets not put to use. The Company has a capital commitment of ` 405,066 as at March 31, 2011 as compared to ` 947,617 as of March 31, 2010. Investments The Company as at March 31, 2011 held current investments in mutual funds of ` 3,939,289 as compared to ` 3,526,917 as of March 31, 2010. During the year, the funds generated from operating activities were invested in current investments as reflected in Liquidity section below. The long-term investments have increased from ` 659,465 to ` 918,940 over the previous year. Additional investments during the year include investment of ` 121,552 for purchase of 49% stake in Biocon Biopharmaceuticals Private Limited (BBPL). As at March 31, 2011, the entire share capital of BBPL is held by the Company. During the year 2011, Biocon Sdn.Bhd was incorporated as wholly owned subsidiary in Malaysia. The joint research collaboration program with Vaccinex Inc and IATRICa Inc. are on going. The Company continues to hold its investments in its subsidiaries Syngene, Clinigene, BBPL, Biocon SA, Biocon Research Limited and joint venture NeoBiocon. Intangible Assets During the year ended March 31, 2009, the Company acquired marketing rights of certain products from BBPL for a sum of ` 128,850. These rights give the Company an exclusive right of marketing the products outside India. The Company has during the year made an application for registration of the products and consequently commenced amortisation of these intangibles over a period of five years from April 2010. As at March 31, 2011 net value of intangibles assets are ` 134,490. Current assets, loans and advances The current assets, loans and advances have increased from ` 11,086,359 to ` 13,117,618 an increase of 18% over the previous year. This was mainly due to - Increase in cash and bank balances from ` 771,218 to ` 2,102,320. - Increase in inventories from ` 2,447,986 to ` 2,747,374 largely on account of incremental growth in sales. - Sundry debtors stood at ` 4,181,044 (net of provision for doubtful debts of ` 69,136) as at March 31, 2011 as compared to ` 3,836,444 (net of provision for doubtful debts of ` 71,537) as at March 31, 2010. These debtors are considered good and realisable. Debtors represent an outstanding of 109 days and 110 days of revenue as at March 31, 2011 and March 31, 2010 respectively on a moving average of trailing 3 months sales. Current liabilities and provisions The current liabilities and provisions have decreased by 8.5% from ` 4,648,719 as at March 31, 2010 to ` 4,255,627, as at March 31, 2011. This decrease in current liabilities is primarily due to - Decrease in deferred revenues from ` 1,313,624 to ` 751,906 largely on account of income being recognized over time based on completion of obligation. - Decrease in sundry creditors from ` 1,856,471 to ` 1,834,522 primarily on account of decrease in creditors for raw materials. The increase in provision from ` 832,476 to ` 1,101,908 is mainly on account of increased dividend to ` 900,000 for the year ended March 31, 2011 as against ` 700,000 in the previous year.
Profit and Loss Account

Biocons total income for the year ended March 31, 2011 comprised of three components: Sales of Biopharmaceuticals products;
Biocon Limited
Licensing and development fees; and Other income. The following table sets out the contribution of each of these components of Biocons income expressed as a percentage of Biocons total income for the years ended March 31, 2011 and March 31, 2010:
March 31, 2011 Income Gross sales Less: Excise duty Net sales Licensing and development fees Other income Expenditure Manufacturing, contract research and other expenses Interest and finance charges Profit Before Depreciation and Taxes Depreciation/Amortisation, net Profit Before Taxes Provision for income-tax Profit for the year Balance brought forward from previous year Profit Available for Appropriation Dividend and tax thereon Transfer to general reserve Balance Transferred to Balance Sheet Sales 2011 Biopharmaceuticals Licensing and Development Fees Other Income Total Income 83% 13% 4% 100% 2010 92% 3% 5% 100% 9,824,660 23,778 9,848,438 6,072,901 901,691 5,171,210 578,715 4,592,495 9,470,267 14,062,762 990,783 459,250 12,612,729 8,709,669 19,910 8,729,579 3,559,573 797,290 2,762,283 278,713 2,483,570 8,009,190 10,492,760 774,136 248,357 9,470,267 13% 19% 13% 71% 14% 87% 108% 85% 18% 34% 28% 85% 33% 13,644,384 393,724 13,250,660 2,064,963 605,716 15,921,339 11,580,976 300,281 11,280,695 350,130 658,327 12,289,152 18% 31% 17% 490% -8% 30% March 31, 2010 Change
Share of revenues from net sales between domestic and export markets are as follows:
Share of revenues 2011 Domestic Exports Total 8,007,257 5,243,403 13,250,660 % 60% 40% 100% 2010 6,404,589 4,876,106 11,280,695 % 57% 43% 100%
Biocons net sales grew by 17% to ` 13,250,660 in 2010-11 while the licensing and development fees grew by 490% to ` 2,064,963. Companys domestic revenues from product sales have increased by 25%, and exports sales have increased by 8%. The increases in domestic sales are mainly driven by increase in sale of bio-pharmaceutical products and branded formulations.
4. Segment-Wise Performance
Biopharmaceuticals Our business focus is on the manufacturing and marketing of biopharmaceuticals that require fermentation and synthetic chemistry skills. Statins and Orlistat: Statins are cholesterol-lowering agents used to treat and prevent coronary diseases and are amongst the largest selling drugs worldwide. Our statins portfolio presently comprises Simvastatin, Pravastatin, Atorvastatin, Fluvastatin, Lovastatin and Rosuvastatin. Biocon is primarily selling Statins across India, USA and Europe. Our Statins segment grew 13% YoY despite pricing pressures owing to enhanced capacity enabled by improved productivity. The Statins portfolio witnessed a changing product mix in this financial year. Atorvastatin and Rosuvastatin gained share in Statins portfolio. Orlistat a drug in the anti obesity saw a significant sales growth primarily an account of ban on its peers. Insulins: Insulin is a hormone that regulates the energy and glucose metabolism in the body. Biocon markets recombinant human insulin in India under its own brand name INSUGEN and has also registered the same in several emerging markets. In addition, Biocon has supply arrangements with pharmaceutical majors and other companies to supply recombinant human insulin for use in their novel insulin formulations. Insulin sales have been growing steadily by 12% YoY in the ROW markets. The formulation sales business recorded the highest growth in last 3 years.
Immunosuppressants: Immunosuppressants prevent organ and tissue rejection in transplants and require high technology based manufacturing capabilities. Currently Biocon produces mycophenolate mofetil (MMF), sirolimus and tacrolimus. This segment posted a 35% YoY growth driven by patent expiry despite pricing pressures. Branded Formulations: Branded formulations are finished dosages currently sold in India and emerging market geographies. Our Company is present in six therapeutic areas Diabetology, Oncology, Cardiology, Nephrology, Dermatology and Comprehensive Care. Branded formulations grew 36% YoY on the back of strong sales in diabetology and oncology segments. Our Company is positioning itself as a key player in diabetes therapy on a global scale. There was significant revival in the insulins franchise both in the Insugen and Basalog. The launch of Insugen 100, the global standard, has been widely accepted by diabetic fraternity. Biocon has focused its efforts to improving diabetes care in India through an awareness campaign on monitoring and control of blood glucose and early detection of the disease. The Comprehensive Care and immunology division was launched in the current fiscal with a vision of providing quality and affordable therapy in the critical care segment. Biocons pipeline of innovative and biosimilar molecules as well as marketing partnerships will be the driving force to expand in India and other markets in the years to come. The Biocons formulation division dedicated marketing team of over 1,100 people for the finished dosages business.
5. Other Financial Data

Licensing and Development Fees These fees represent income received by Biocon towards transfer of proprietary technology with respect to certain bio-generics under long-term contracts and out-licensing its proprietary products. During the year, the Company has a registered licensing income of ` 2,064,963, an increase of ` 1,714,833 as compared to previous year. This includes transfer of certain intangible to subsidiary within the group. Other Income The Other income has registered a decrease of 8% compared to the previous year. Other income consists primarily of dividend income from investments amounting to ` 167,114 as compared to ` 98,604 in fiscal 2010. It also includes cross charge of utility and other common costs towards use of Biocon Park facility (SEZ Developer) to subsidiaries which has decreased from ` 336,046 in the fiscal 2010 to ` 297,690 in the fiscal 2011. Material costs Materials costs have increased by 17% from ` 5,472,390 to ` 6,392,513 over the previous year. As a percentage of sales, the material cost has remained constant at 48% YoY. Employee costs Staff cost comprises: Salaries, wages, allowances and bonuses; Contributions to provident fund; Gratuity and leave provisions; Amortisation of Employees stock compensation expenses; and Welfare expenses (including employee insurance schemes) Staff costs have increased from ` 997,275 for the fiscal year 2010 to ` 1,460,020 for the fiscal year 2011. The increase in employee costs is due to a) Staff increment which was 15% YoY. b) Addition of employees. Operating and other expenses Operating and other expenses comprises traveling and conveyance; communication; professional charges; power and fuel; lab consumables; repairs and maintenance; selling expenses like freight outwards; sales promotion and commissions; research and development costs, provision for doubtful debts; exchange fluctuations and other general expenses. Operating and other expenses have decreased by 12% from ` 2,240,004 for the year 2010 to ` 1,972,127 for the year 2011 mainly on account of a) Foreign exchange gain of ` 262,377 as compared to loss of ` 33,179 in the previous fiscal. b) 16% decrease in professional charges from ` 175,928 to ` 148,242 c) The decrease is offset by a 41% increase in selling expenses from ` 401,733 to ` 564,493 primarily on account of increase in freight charges; and d) 21% increase in power charges from ` 672,485 to ` 816,291and 19% increase in repair and maintenance charges from ` 280,911 to ` 334,686. Interest and Finance Charges Interest and finance charges have increased from ` 19,910 in fiscal 2010 to ` 23,778 in fiscal 2011 due to increase in bank charges.
Biocon Limited
Depreciation During the year depreciation has increased by ` 104,401 an increase of 13% on account capitalization of assets. Depreciation as a percentage of sales has remained constant at 7%. Provision for Taxes Provision for current tax in the year ended March 31, 2011 was ` 578,715 as against ` 278,713 net of provision for current and deferred tax The Company availed tax benefit in respect of profit from its EOU and SEZ operations. Net Profit Net profit for the fiscal year 2011 has increased by 85% to ` 4,592,495 resulting in a basic EPS of ` 23.49. Liquidity Our primary liquidity requirements are for financing working capital requirements and funding capital expenditure. The financing needs are met primarily through cash flows from operations and short term borrowings.
2011 Net cash generated from operating activities Net cash used for : Capital expenditure Dividend including dividend tax Investments in associate / subsidiary companies Loans to subsidiaries / joint ventures companies Borrowings from banks Others Net cash equivalents Net (purchase) / redemption of current investments Cash at beginning of year Cash at end of year 3,649,661 (1,232,442) (767,584) (121,552) 121,548 (286,359) 343,121 1,706,393 (412,313) 793,751 2,065,298 2010 2,307,341 (806,524) (701,970) (48,100) (39,580) 301,491 359,005 1,371,663 (638,339) 60,427 793,751
6. Performance of Subsidiaries, Joint Ventures and Associates

Syngene International Limited Syngene is a 99.99% owned subsidiary of the Company. Syngene was incorporated on November 18, 1993. Syngene operates in two main research areas: Synthetic Chemistry and Molecular Biology. Syngene is also involved in custom chemical synthesis. During the year, Syngene has confidently moved into Integrated Drug Discovery services. Syngenes total income primarily consists of net sales from Contract research and manufacturing services income. Substantially all of Syngenes contracts are based on time and material management. Revenue from these contracts is recognized when services are rendered, in accordance with the terms of the contract. Syngenes total revenue has increased from ` 2,675,660 to ` 3,231,378 representing a growth of 21%. The growth in operations is supported by increase in revenues from existing and new customers. Syngenes expenses mainly comprise of raw-material costs and staff costs. Raw material cost consists of lab consumables used for research. The raw material costs increased by 27% from ` 688,117 to ` 876,148 in fiscal 2011 and the staff costs increased by 20% from ` 666,393 to ` 800,278. Increase in material cost and increase in staff costs are due to a growth in sales. Other costs increased by 24% from ` 443,585 to ` 550,195. Net profit for the year has decreased by ` 25,400 from ` 308,144 to ` 282,744 mainly due to increase in depreciation by ` 58,277 from ` 450,872 in the year ended March 31, 2010 to ` 509,149 in the year ended March 31, 2011. Clinigene International Limited Clinigene is a 100% owned subsidiary of Biocon Limited. Clinigene was established to undertake clinical and other trials and validation for drugs and pharmaceuticals and to conduct research in the area of medical sciences for development of new and improve upon existing medical diagnostic, surgical and therapeutic techniques. Clinigenes total income principally consists of income from clinical research fees and also Bio-analytical and Bio-equivalence studies. Clinigene enters either into time and material contracts and/or fixed price arrangements. Revenue from time and material contracts are recognised on a monthly basis as services are rendered in accordance with the terms of the applicable contracts. Revenue from fixed price contracts is recognized based on the percentage completion method. For the year ended March 31, 2011, Clinigene has total revenue of ` 289,337. Clinigene is continuing to evolve and adapt its capability platforms and service offerings against a background of continued macro market pressure as global R&D spends are being reduced, consolidation of market players continues and the shift to globally capable preferred partnerships accelerates. During the year, the Company has identified several more specialized services for example patient based early studies, complex BA/BE studies and bio-analytical services. These new specialty services, which have relatively high entry barriers, will drive new and differential revenue opportunities. Studies conducted by Clinigene were successfully audited by the USFDA and EMA. Biocon Biopharmaceuticals Private Limited BBPL was incorporated on June 17, 2002 and currently has paid-up share capital is ` 176,000. In April 2010, Biocon SA acquired the 49% equity stake held by CIMAB SA in BBPL. In March 2011, Biocon purchased the 49% equity stake in BBPL from Biocon SA. Consequently, as at March 31, 2011 all the equity shares of BBPL are held by Biocon. For the year under review, BBPL earned revenues of ` 491,611 as against ` 381,302 in the previous year. BBPL has commenced full fledged operations and for the year under review posted a net profit of ` 192,047 as against ` 26,062 in the previous year. As at March 31, 2011, BBPL had accumulated losses of ` 159,238.
Biocon Research Limited Biocon Research Limited (BRL) was incorporated in 2008, as a wholly owned subsidiary of Biocon Limited and is engaged in carrying out research and development of new drugs, drug delivery systems and contract research. Total revenue of BRL increased from ` 392,944 to ` 649,591 in fiscal 2011. BRL spends in research and developments expenses increased from ` 416,649 to ` 940,991 in fiscal 2011. NeoBiocon NeoBiocon FZ LLC. is a research and marketing pharmaceutical Company based in Abu Dhabi. Incorporated in January 2008, NeoBiocon is a 50:50 joint venture with Dr. B.R. Shetty, of NeoPharma. Financials of NeoBiocon were consolidated based on the Accounting Standard 27 Financial Reporting of Interests in Joint Venture issued by ICAI. Accordingly, only 50% of the operations incorporated for the consolidation purpose. NeoBiocons turnover has increased from ` 23,927 to ` 59,608 representing a significant growth in business and net profit has increased from ` 2,713 to ` 21,243 for fiscal 2011. IATRICa Inc Biocon has made a strategic investment of ` 138,470 in a US based research Company IATRICa Inc to jointly develop novel immunoconjugates for the treatment of cancer and infectious disorders. As at March 31, 2011, Biocon has a 30% stake in IATRICa. The research initiatives of IATRICa are underway and it has initiated work on two molecules. Biocon SA Biocon SA a wholly owned subsidiary was incorporated in year 2009 in Switzerland. Biocon SA undertakes development and marketing of biopharmaceuticals and pursue investment opportunities in Biopharmaceutical sector. Germany. During the year, the Company has made significant progress in clinical the development of insulin for the European markets. In October 2010, Biocon SA has entered into a global alliance with Pfizer for commercializing biosimilar Insulin and Insulin analogs. During the year ended March 31, 2011, the Company earned revenues of ` 732,248 and profit of ` 69,465. AxiCorp GmbH During the year 2009, Biocon SA acquired 71% stake in AxiCorp GmbH, Germany. AxiCorp is a specialized marketing and distribution Company established in 2002 to address the lucrative generics and parallel distribution market in Germany. Axicorp operations are consolidated with the financial results of the group with a 3 month lag. The Company registered revenue of ` 9,800,683 and PAT of ` 353,225 for year ended December 31, 2010 as against revenue of ` 9,117,360 and of ` 299,322 for year ended December 31, 2009. Axicorp has contributed 35 % to the group revenues and 8% to the group net profit for the year ended March 31, 2011. Consequent to an offer made by the minority shareholders of AxiCorp, Biocon would divest its stake in its German subsidiary, AxiCorp GmbH, to the existing group of promoter shareholders. Biocon had entered into a global alliance with Pfizer in October 2010. This divestment is in line with the objectives of the global alliance wherein the synergies derived from global development and investments can be leveraged for the German market as well. Consolidated financial statements Biocon has prepared consolidated financial statements in accordance with Indian GAAP by consolidating its subsidiaries Syngene, Clinigene, BBPL, Biocon Research Limited, Biocon SA and AxiCorp and Joint Venture Neo Biocon and associate Company IATRICa Inc. The abbreviated consolidated Indian GAAP profit and loss account is as under:
Abbreviated consolidated profit and loss statement Indian GAAP 2011 Total Income Profit before tax (PBT) PBT margin Profit after Tax Net margin 28,136,602 4,471,689 15.9% 3,675,150 13.1% 2010 24,048,363 3,514,742 14.6% 2,932,442 12.2%
7. Risks and Concern

The Generic Industry is subject to patent litigation and regulatory issues. Patent challenges or delay in receipt of regulatory approvals could delay our product launch in key markets. In addition significant additional competition in key products could erode our market shares and result in reduced prices and profitability. The consolidation of the generic industry could result in larger generic players acquiring manufacturing capabilities thereby reducing the market for third party manufacturers. The failure to obtain regulatory approval for new drugs under development could affect long-term business opportunities. Other key risks related to our business include loss of key personnel, increase in input costs and adverse movement of the Indian Rupee against the major currencies (US$ & Euro). Risk of managing research partnership and commercialisation of novel molecules, regulatory delays and clarity on regulatory pathways could affect product launch. The Company carries out a detailed Risk Management exercise or purposes of identification of risks and putting in place processes and controls to mitigate these risks. The audit committee reviews the Companys risk management framework and approves risk management action plans.
8. Internal Controls
Biocon has well established internal control systems for operations of the Company and its subsidiaries. The Finance Department is well staffed with experienced and qualified personnel who play an important role in implementing and monitoring the internal control environment and compliance with statutory requirements. The Internal Audit is conducted by an independent firm of Chartered Accountants. The Audit committee addresses significant issues raised by the Internal and Statutory Auditor
Biocon Limited
Corporate Governance Report

The detailed report on Corporate Governance for the financial year from April 1, 2010 to March 31, 2011, as per the format prescribed by Securities and Exchange Board of India (SEBI) and incorporated in the revised Clause 49 of the Listing Agreement is set out below:
1. Company's philosophy on Corporate Governance:

Biocon is committed to doing business in an efficient, responsible, honest and ethical manner. Good corporate governance goes beyond compliance and involves a Company wide commitment. This commitment starts with the Board of Directors, which executes its corporate governance responsibilities by focusing on the Company's strategic and operational excellence in the best interests of all our stakeholders, in particular, shareholders, employees and our customers in a balanced fashion with long-term benefits to all. The core values of the Companys governance process include independence, integrity, accountability, transparency, responsibility and fairness. The business policies are based on ethical conduct, health, safety and a commitment to building long-term sustainable relationships. Biocon is committed to continually evolving and adopting appropriate corporate governance best practices.
2. Board of Directors:
2. i. Composition: The Board of Directors comprises seven members including two executive directors, five non-executive directors, of which four are independent directors. Dr. Kiran Mazumdar-Shaw is the Chairman and Managing Director (CMD) of the Company and Mr. John Shaw is the Vice-Chairman. Dr. Kiran Mazumdar-Shaw and Mr. John Shaw conduct the day-to-day management of the Company, subject to the supervision and control of the Board of Directors. The independent directors on the Board are scientists, professionals and technocrats who are senior, competent and highly respected persons from their respective fields. The brief profile of the Company's Board of Directors is as under: Dr. Kiran Mazumdar-Shaw, 58 years, Chairman and Managing Director, is a first generation entrepreneur with more than 33 years experience in the field of biotechnology. After graduating in B.Sc. (Zoology Hons.) from Bangalore University in 1973, she completed her post-graduate degree in malting and brewing from Ballarat College, Melbourne University in 1975. She has been awarded with several honorary degrees including Honorary Doctorate of Science from Ballarat University, in recognition of pre-eminent contribution to the field of Biotechnology, 2004, Doctor of Technology from the University of Abertay Dundee, 2007, Doctor of Science from the University of Glasgow, 2008 and Doctor of Science from the Heriot-Watt University, Edinburgh, 2008. She is a founder promoter and has led the Company since its inception in 1978. She is the recipient of several awards, the most noteworthy being the Padmabhushan Award (one of the highest civilian awards in India) in 2005 conferred by the President of India, the Nikkei Asia Prize, 2009 for Regional Growth, Express Pharmaceutical Leadership Summit Award 2009 for Dynamic Entrepreneur, the Economic Times Businesswoman of the Year, the Veuve Clicquot Initiative for Economic Development For Asia, Ernst & Young's Entrepreneur of the Year Award for Life Sciences & Healthcare, Technology Pioneer recognition by World Economic Forum and The Indian Chamber of Commerce Lifetime Achievement Award. She heads several biotechnology task forces including the Karnataka Vision Group on Biotechnology, an initiative by the Government of Karnataka and the National Taskforce on Biotechnology for the Confederation of Indian Industry (CII). She is a member of the Prime Ministers Council on Trade and Industry and also serves as a Member, Governing Body and General Body of the Indian Pharmacopoeia Commission, an Autonomous Body of the Government of India. She has been nominated as a Member of the Board of Trade, Directorate General of Foreign Trade, Ministry of Commerce & Industry. Mr. John Shaw, 62 years, Vice Chairman, is a foreign promoter and a whole-time director of the Company. He is also a controlling shareholder and director of Glentec International. He completed his M.A. (Economic Hons.) in History and Political Economy from Glasgow University, U.K. in 1970. He had 27 years experience with Coats Viyella plc. in various capacities including finance and general administration. He had served as Finance Director and Managing Director of Coats Viyella group companies in various locations around the world, before he came on the Board of Biocon Limited in 1999. Dr. Neville Bain, 70 years, has vast experience in the field of finance, strategy and general management. He graduated from Otago University, New Zealand, with a Master of Commerce (Hons) degree and double Bachelor degrees in Accounting and Economics. He has also been awarded the degree of Doctor of Law, is a Fellow Chartered Accountant, a Fellow Cost and Management Accountant, a Fellow Chartered Secretary and a Fellow of the Institute of Directors. He spent 27 years with the Cadbury Schweppes group, having responsibility for the world-wide confectionery business and then as Deputy Chief Executive and Finance Director. This was followed by a six-year term as Chief Executive Officer of Coats Viyella plc, and then as Chairman and Director of various organisations. He is the Chairman of the UK Institute of Directors, a Chairman of the Board of Scottish Newcastle Pension Trustees Limited as well as Hogg Robinson Group. He has published 5 books on corporate governance, strategy and the effective utilisation of people in organisations. Prof. Charles Cooney, 67 years, is the Professor of Chemical & Biochemical Engineering, Faculty Director of the Deshpande Center for Technological Innovation. He obtained his Bachelors degree in Chemical Engineering from the University of Pennsylvania in 1966, his Masters degree and his Ph.D. in Biochemical Engineering from MIT in 1967 and 1970 respectively. His research interests span topics in biochemical engineering and pharmaceutical manufacturing. He is a recipient of several prestigious awards, including Gold Medal of the Institute of Biotechnology Studies (London), the Food, Pharmaceutical and Bioengineering Award from the American Institute of Chemical Engineers and the James Van Lanen Distinguished Service Award from the American Chemical Society. He serves as a consultant to and director of a number of biotech and pharmaceutical companies globally and is on the editorial boards of several professional journals. Mr. Suresh Talwar, 72 years, is a partner in Talwar Thakore & Associates, a law firm of repute. He completed his B.Com from the University of Bombay in 1959, his LL.B. from the Government Law College, Bombay in 1961 and is a solicitor of the Incorporated Law
Society, Mumbai in 1966. His area of professional specialisation is in corporate law and other related matters. He has been the legal counsel to numerous Indian companies, multinational corporations as well as Indian and foreign banks. He was a partner of Crawford Bayley & Co., a reputed Indian law firm. He is also a director of several leading companies in India. Prof. Ravi Mazumdar, 56 years, completed his Ph.D. from the University of California, Los Angeles, USA in 1983. Prior to this, he obtained his B.Tech from the Indian Institute of Technology, Bombay in 1977 and his Masters in Science from the Imperial College of Science, London in 1978. He is a professor in University of Waterloo, Canada and has been professor in several prestigious universities including Purdue University, U.S.A, Columbia University, U.S.A., University of Essex, U.K., McGill University, Canada and the Indian Institute of Science, Bangalore. He has over 100 referred publications in international journals in the area of applied probability and stochastic processes, non-linear dynamical systems, statistical signal processing, queuing theory and in the control and design of high-speed networks. He has been a member of several advisory committees and working groups, including the US Congress Sub-Committee on Science and Technology. He is a Fellow of the Royal Statistical Society and Fellow of the Institute of Electrical and Electronics Engineers, Inc. He is the younger brother of Dr. Kiran Mazumdar-Shaw. Dr. Bala S. Manian, 65 years, has been a part of the Silicon Valley entrepreneurial community over the last three decades and is responsible for successfully starting several life science companies. Dr. Manian is a co-founder of Quantum Dot Corporation and a co-founder of SurroMed Corporation. He was also chairman of Entigen Corporation, a Bioinformatics company. He was the founder and chairman of Biometric Imaging, Inc. Prior to founding Biometric Imaging, Inc., Dr. Manian founded Digital Optics Corporation, an optical instrumentation and systems development company in 1980 and two other companies, Lumisys and Molecular Dynamics in June 1987. Dr. Manian is presently the CEO of ReaMetrix Inc. He has been recognized through several awards for his contributions as an educator, inventor and an entrepreneur. In February 1999, the Academy of Motion Picture Arts and Sciences awarded a Technical Academy Award to Dr. Manian for advances in digital cinematography. He has a B.S. in Physics from the University of Madras, a M.S. in Applied Optics from the University of Rochester and a Ph.D. in mechanical engineering from Purdue University. He was a faculty member of the University of Rochester's Institute of Optics for four years, teaching courses in optical fabrication and testing, optical instrumentation and holography. At present, he serves as a member of the Board of Trustees of University of Rochester. In accordance with our Articles of Association, the Board can appoint an alternate director pursuant to the provisions of the Companies Act, 1956. Prof. Catherine Rosenberg is presently the alternate director to Prof. Ravi Mazumdar. Status of directors: Statement showing the status of directors as executive/non-executive and independent/ non-independent during the year is set out below:
Name of the Director 1 2 3 4 5 6 7 8 Dr. Kiran Mazumdar-Shaw Mr. John Shaw Prof. Ravi Mazumdar Dr. Neville Bain Prof. Charles Cooney Mr. Suresh Talwar Dr. Bala S. Manian Prof. Catherine Rosenberg Office/Designation CMD Vice Chairman Director Director Director Director Director Alternate Director Executive/ Non-executive Executive Executive Non-executive Non-executive Non-executive Non-executive Non-executive Non-executive Independent/ Non-independent Non-independent Non-independent Non-independent Independent Independent Independent Independent Non-independent
More than 50% of the Board comprises of non-executive independent directors. The Company has obtained the necessary information from all the directors of the Company and performed the necessary steps to arrive at this conclusion. 2. ii. Meetings and attendance record of directors and other directorships: During the financial year ended March 31, 2011, Board of Directors met 4 times on April 29, 2010, July 23, 2010, October 22, 2010 and January 20, 2011. The composition of the Board of Directors and their attendance at the Board meeting during the year and at the last Annual General Meeting together with the number of other directorships are given below:
Name of the Director Dr. Kiran Mazumdar-Shaw Mr. John Shaw Prof. Ravi Mazumdar Dr. Neville Bain Prof. Charles Cooney Mr. Suresh Talwar Dr. Bala S Manian Prof. Catherine Rosenberg (Alternate Director to Prof. Ravi Mazumdar) No. of Board meetings attended 4 4 3 3 4 4 4 1 Attendance at the last AGM Yes Yes Yes No Yes Yes Yes Yes No. of other Directorships (*) 13 8 3 5 5 47 5 1
* Includes private limited companies and foreign body corporate and alternate directorships. Availability of information to the Members of the Board Annual operating plans and budgets, capital budgets and any updates thereto. Quarterly results for the Company and its divisions. Minutes of meetings of Audit Committee, Remuneration Committee, Investors Grievance Committee and Share Transfer Committee.
Biocon Limited
The information on recruitment and remuneration of senior officers just below the Board level, including the Company Secretary. General notice of interest. Dividend data and bonus, if applicable. Show cause, demand, prosecution notices and penalty notices which are materially important. Fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems. Any material default in financial obligations to and by the Company, or substantial non-payment for goods sold by the Company. Any issue, which involves possible public or product liability claims of substantial nature. Details of any joint venture, acquisition, technology or collaboration agreement. Transactions that involve substantial payment towards goodwill, brand equity or intellectual property. Significant development in Human Resources/Industrial Relations. Sale of material nature, of investments, subsidiaries, assets, which is not in the normal course of business. Quarterly details of foreign exchange exposures and the steps taken by management to limit the risks of adverse exchange rate movement, if material. Non-compliance of any regulatory, statutory nature or listing requirements and shareholders service such as non- payment of dividend, delay in share transfer, etc.
2. iii. Details of directorships in other companies: The details of directorships of the Companys directors in other companies as on March 31, 2011 are given below:
Name of Company/ Firm Dr. Kiran Mazumdar-Shaw Syngene International Limited Clinigene International Limited Biocon Biopharmaceuticals Private Limited Biocon Research Limited IATRICa Inc. Biocon SA Biocon Sdn. Bhd. Glentec International Narayana Institute for Advanced Research Pvt. Ltd. Narayana Hrudayalaya Private Limited United Breweries Limited Indian School of Business Pvt. Ltd. Glenloch Properties Private Limited Mr. John Shaw Syngene International Limited Clinigene International Limited Biocon Biopharmaceuticals Private Limited Biocon Research Limited Biocon SA Biocon Sdn. Bhd. Glentec International Glenloch Properties Private Limited Prof. Ravi Mazumdar Glentec International Clinigene International Limited Syngene International Limited Dr. Neville Bain Scottish & Newcastle Pension Trustees Limited Syngene International Limited Neville Bain Developments Limited Provexis Limited Hogg Robinson Pensions Director Director Director Director Director Director Director Alternate Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Nature of Interest
Name of Company/ Firm Prof. Charles Cooney Syngene International Limited LS9, Inc. PolyPore International, Inc. Mitra Life Sciences Green Light Bioscience Inc. Mr. Suresh Talwar PZ Cussons India Pvt. Ltd. FCI OEN Connectors Ltd. Transwarranty Finance Ltd. Armstrong World Industries (India) Pvt. Ltd. Merck Ltd. Sidham Finance & Investments Pvt. Ltd. Samson Maritime Ltd. Birla Sun Life Insurance Co. Ltd. Birla Sun Life Trustee Co. Pvt. Ltd. Blue Star Ltd. Blue Star Infotech Ltd. Chowgule and Company Pvt. Ltd. Chowgule Ports and Infrastructure Pvt. Ltd. Decagon Investments Pvt. Ltd. Elantas Beck India Ltd. Emerson Process Management (India) Pvt. Ltd. Epitome Global Services Pvt. Ltd. Esab India Ltd. Greaves Cotton Ltd. India Value Fund Trustee Co. Pvt. Ltd. IVF Trustee Company Pvt. Ltd. IVF (Mauritius) PCC. IVF (Mauritius) Ltd. Indium III (Mauritius) Holding Ltd. Indium III (Mauritius) Ltd. Indium IV (Mauritius) Holding Ltd. Indium IV (Mauritius) Ltd. John Fowler (India) Pvt. Ltd. Larsen & Toubro Ltd. MF Global (India) Pvt. Ltd. Morgan Stanley India Capital Pvt. Ltd. Rediffusion Dentsu, Young & Rubicam Pvt. Ltd. Rakeen Development PJSc. Sandvik Asia Pvt. Ltd. Shrenuj & Co. Ltd. Solvay Pharma India Ltd. Snowcem Paints Pvt. Ltd. Sonata Software Ltd. Swiss Re Shared Services (India) Pvt. Ltd. S. Kumars Nationwide Ltd. TTK Healthcare TPA Pvt. Ltd. Warner Bros Pictures (India) Pvt. Ltd. Albright & Wilson Chemicals India Ltd. Garware-Wall Ropes Ltd. Hindustan Gum & Chemicals India Ltd. Johnson & Johnson Ltd. Uhde India Pvt. Ltd. Dr. Bala S Manian ReaMetrix Inc., USA ReaMetrix India Pvt. Ltd. ICICI Knowledge Park Vaccinex Inc. IKP Investment Management Company (IKPIMC) Prof. Catherine Rosenberg Syngene International Limited
Nature of Interest Director Director Director Director Director Chairman & Alternate Director Chairman & Alternate Director Chairman & Alternate Director Chairman Chairman Chairman Chairman Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Alternate Director Alternate Director Alternate Director Alternate Director Alternate Director
Director Director Director Director Director
Director
Biocon Limited
2. iv. Details of membership/chairmanship of directors in Board Committees: Following is the list of memberships/chairmanships of directors in the committees* of the Indian public limited companies in which they are holding directorships:Sl. No. 1 2 3 4 5 6 Name of the Director Dr. Kiran Mazumdar-Shaw Mr. John Shaw Prof. Ravi Mazumdar Dr. Neville Bain Prof. Charles Cooney Mr. Suresh Talwar Name of the Indian Public Limited Company Nature of the Committee* Biocon Ltd. Biocon Ltd. Biocon Ltd. Biocon Ltd. Biocon Ltd. Biocon Ltd. Blue Star Ltd. Blue Star Infotech Ltd. Elantas Beck India Ltd. FCI OEN Connectors Ltd. Greaves Cotton Ltd. Morgan Stanley India Capital Pvt. Ltd. Merck Ltd. Solvay Pharma India Ltd. Biocon Ltd. Investors Grievance Investors Grievance None Audit Committee Investors Grievance Audit Committee Audit Committee Audit Committee Audit Committee Audit Committee Audit Committee Audit Committee Audit Committee Audit Committee Audit Committee None Member/Chairman Member Member None Chairman Chairman Member Member Chairman Member Member Chairman Member Member Chairman Member None
Dr. Bala S Manian
None of the directors of the Company hold memberships of more than ten Committees nor is any director the chairman of more than five Committees of the Board of all companies where he holds directorships. *For this purpose membership or chairmanship in Audit Committee and Investors Grievance Committee are reported and other committee membership or chairmanship has not been included in this report. 2. v. Code of Conduct: The Board has laid down a code of conduct for all Board members and senior management of the Company and it is posted on the website of the Company. The certificate from Chairman and Managing Director with regard to compliance of code of conduct by Board members and senior management is enclosed and forms part of this report. Certificate of Code of Conduct: Biocon Group is committed to conducting its business in accordance with the applicable laws, rules and regulations and with highest standards of business ethics. The Company has adopted a Code of Ethics and Business Conduct which is applicable to all directors, officers and employees. I hereby certify that all the Board Members and Senior Management have affirmed the compliance with the Code of Ethics and Business Conduct, under a certificate of Code of Conduct for the year 2010-11. For Biocon Limited (Sd/-) Dr. Kiran Mazumdar-Shaw Chairman and Managing Director
Bangalore March 31, 2011 2. vi. Shareholding of directors:

Name of the Director Dr. Kiran Mazumdar-Shaw Mr. John Shaw Prof. Ravi Mazumdar Dr. Neville C Bain Prof. Charles Cooney Mr. Suresh N Talwar Dr. Bala S Manian Prof. Catherine Rosenberg (Alternate Director ) Nature of Directorship Executive Executive Non-Executive Non-Executive Non-Executive Non-Executive Non-Executive Non-Executive
No. of shares held as on 31.03.2011 79,287,564 1,407,558 1,310,714* 500,000 1,59,522 32,000 2,500 *
* Joint Holding 2. vii. Re-appointment of directors: The directors, Dr. Neville Bain and Dr. Bala Manian shall retire by rotation at the ensuing Annual General Meeting and are eligible for re-appointment. Their brief resumes and details of their other directorships and committee memberships, including their shareholding have already been provided in the Notice as well as in this report. 2. viii. Notice of interest by Senior Management personnel: The Board has noted the notice by senior management disclosing all material financial and commercial transactions where they have personal interest.
3. Audit Committee:
3. i. Terms of reference: The terms of reference of Audit Committee are as per the revised guidelines set out in the Listing Agreement with Stock Exchanges read with Section 292A of the Companies Act, 1956 and includes such other functions as may be assigned to it by Board from time to time. The Audit Committee has been entrusted with all required authority and powers to play an effective role as envisaged under revised Clause 49 of the Listing Agreement.
3. ii. Composition: The Board constituted the Audit Committee on April 16, 2001. The following directors are the current members of the Committee: a) b) c) Dr. Neville Bain Prof. Charles Cooney Mr. Suresh Talwar
The members of the Committee are non-executive and independent directors and possess sound knowledge of accounts, finance, audit and legal matters. Dr. Neville Bain is the Chairman of the Committee. 3. iii. Meetings and attendance during the year:
Name Dr. Neville Bain Prof. Charles Cooney Mr. Suresh Talwar No. of meetings held 4 4 4 No. of meetings attended 3 4 4
During the year 2010-11, the Committee met 4 times on April 28, 2010, July 22, 2010, October 21, 2010 and January 19, 2011. The Senior Management and Auditors were invited to attend the meetings of the Audit Committee and attended all meetings. The Company Secretary acts as the Secretary to the Audit Committee. The Committee reviewed the financial results of the Company prepared in accordance with Indian GAAP (including consolidated results) and recommended the same to the Board of Directors for their adoption. The Committee also recommended to the Board of Directors the re-appointment of M/s S. R. Batliboi & Associates, Chartered Accountants (Firm Registration No. 101049W), as Statutory Auditors of the Company from conclusion of 2011 Annual General Meeting to the forthcoming Annual General Meeting. The Committee also reviewed Internal Audit reports, Internal Control Systems, risk management policies, related party transactions, etc. from time to time. Audit Committee members are advised of the work of independent internal auditors. M/s Grant Thornton was appointed to review the control processes in place and report quarterly to the Audit Committee. Considering the best practice of rotation of internal audit function, M/s. KPMG Pvt. Ltd. was appointed as internal auditors for the forthcoming financial year. 3. iv. Subsidiary Companies: The Company has seven subsidiary companies, Syngene International Limited, Clinigene International Limited, Biocon Biopharmaceuticals Private Limited, Biocon Research Limited, Biocon SA, Biocon Sdn. Bhd. and Axicorp GmbH and one joint venture, NeoBiocon, as explained in the Directors Report. None of the subsidiary companies represent more than 20% of the consolidated turnover or net worth of the Company in the immediately preceding financial year. However, two independent directors of the Company are on the Board of Syngene International Limited. The Audit Committee of the Company reviews the financial statements of all the subsidiary companies. The minutes of the Board meetings of the subsidiary companies are placed before the Board meetings of the Company and reviewed. 3. v. CEO/CFO Certification: The Board has recognized the Chairman and Managing Director of the Company as the CEO and President Group Finance as the CFO for the limited purpose of compliance under the Listing Agreement. The CEO and CFO have certified, in terms of revised Clause 49 of the Listing Agreement, to the Board that the financial statements present a true and fair view of the Companys affairs and are in compliance with existing accounting standards.
4. Remuneration Committee:
4. i. Terms of reference: The terms of reference of the Remuneration Committee, inter alia, includes determination of compensation package of executive directors and senior management of the Company, determination and supervision of the bonus scheme of the Company and to investigate any activities within the terms of reference, etc. The Committee also oversees the employee stock option scheme and recommends the same for the approval of the Board/shareholders. The Committee is empowered to decide the eligibility of the category of employees and the terms and conditions of grants to be extended under the ESOP schemes of the Company. 4. ii. Constitution: The Board constituted the Remuneration Committee on April 16, 2001. The following directors are the current members of the Committee: a) b) Prof. Charles Cooney Dr. Neville Bain
The members of the committee are non-executive and independent directors. Prof. Charles Cooney is the Chairman of the Committee. 4. iii. Meetings and attendance during the year:
Name Dr. Neville Bain Prof. Charles Cooney No. of meetings held 4 4 No. of meetings attended 3 4
During the year 2010-11, the Committee met 4 times on April 28, 2010, July 22, 2010, October 21, 2010 and January 19, 2011. 4. iv. Remuneration policy: The remuneration policy of the Company is broadly based on the following criteria: a) b) c) Job responsibilities Key performance areas of the employees/directors Industry trend
Biocon Limited
4. v. Details of remuneration: The details of remuneration and sitting fees paid or provided to each of the directors during the year ended March 31, 2011 are given below: (Amount is Rupees)
Name of the Director Fixed pay Salary and perquisites Perquisites Variable pay (performance bonus) 1,992,000 Retiral benefits 597,600 1,000,000 1,000,000 1,000,000 1,000,000 60,000 135,000 180,000 160,000 80,000 20,000 14,407,949 7,290,953 60,000 1,135,000 1,180,000 1,160,000 1,080,000 20,000 Commission Sitting Fees Total
Dr. Kiran Mazumdar-Shaw Mr. John Shaw Prof. Ravi Mazumdar Dr. Neville Bain Prof. Charles Cooney Mr. Suresh Talwar Dr. Bala S Manian Prof. Catherine Rosenberg (Alternate Director)
8,696,316 6,398,873 -
3,122,033 892,080 -
*Of the Board members, only Dr. Kiran Mazumdar-Shaw and Mr. John Shaw are executive directors and others are non-executive directors. No options under the ESOP were granted to the directors during the year. The Chairman & Managing Director and the Vice-Chairman were paid remuneration, including performance bonuses, as approved by the shareholders in the Annual General Meeting held on July 23, 2010. Pecuniary relations or transactions of the non-executive directors: There were no pecuniary relationships or transactions of non-executive directors vis-a-vis the Company which has potential conflict with the interests of the Company at large. Compensation/fees paid to non-executive directors: The non-executive directors were paid sitting fees for attending the Board and Committee Meetings. Further, the non-executive independent directors of the Company were paid remuneration by way of commission at a sum not exceeding 1% per annum of the net profits subject to the limit of ` 1,000,000 per annum per director as approved by the special resolution passed by the members of the Company at the Annual General Meeting held on July 23, 2010.
5. Shareholders:
5. i. Investors Grievance Committee: The Board constituted Investors Grievance Committee on January 17, 2004, the following are the current members of the committee: a) b) c) Dr. Neville Bain, Chairman Dr. Kiran Mazumdar-Shaw Mr. John Shaw
The Committee was formed to specifically redress the shareholders and investors complaints like transfer of shares, non-receipt of balance sheet, non-receipt of dividends, etc. Dr. Neville Bain, Chairman of the Committee is a non-executive and independent director. During the year 2010-11, the Committee met 4 times on April 28, 2010, July 22, 2010, October 21, 2010 and January 19, 2011 and oversaw the investors grievances redressal. The Board had also constituted a Share Transfer Committee consisting of Dr. Kiran Mazumdar-Shaw, Chairman & Managing Director, Mr. John Shaw, Vice Chairman of the Company, to attend to the share transfer formalities, as and when required. 5. ii. Compliance officer: Mr. Kiran Kumar G, Company Secretary was designated as the compliance officer under SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 for overseeing/ addressing the investors complaints. 5. iii. Details of shareholders complaints: Details of the shareholders complaints received and redressed during the year:
Opening 1 Complaints received 248 Complaints solved 249 Pending 0
There have been no material grievances raised and all items referred have been dealt with.
6. General Body Meetings:

6. i. Location and time of the General Body Meetings: Generally, the Annual General Meetings of the Company are convened within four months of the close of the financial year. The details of the previous Annual General Meetings are as below:
Year 2007-08 2008-09
Date and Time July 17, 2008, 3.30 p.m July 23, 2009, 3.30 p.m
Venue Taj Residency, 41/3, Mahatma Gandhi Road, Bangalore 560 001 Sathya Sai Samskruta Sadanam, No. 20, Hosur Road, Bangalore - 560 029 Sathya Sai Samskruta Sadanam, No. 20, Hosur Road, Bangalore - 560 029
Special resolutions passed 2 Nil
2009-10
July 23, 2010, 3.30 p.m
6. ii. Special Resolutions: At the Annual General Meeting of the Company held on July 17, 2008, Special Resolutions were passed for (a) Increase in the Authorised Share Capital and alteration of the Articles of Association of the Company and (b) For issue of Bonus Shares to the equity shareholders of the Company. Further, at the Annual General Meeting of the Company held on July 23, 2010, Special Resolution was passed for approving the payment of commission to non-executive independent directors of the Company.
7. Disclosures:
7. i. Related party transactions: Audit Committee reviews periodically the significant related party transactions i.e. transactions of the Company, which are of material nature, with its subsidiaries, directors or relatives or the management that may have potential conflict with the interests of the Company at large. Details are provided in Note 5 of Schedule 18 forming part of the Accounts in accordance with provisions of Accounting Standard 18, recommended under the Section 211 (3C) of the Companies Act, 1956. The Company has entered into transactions of sale of products to a private Company amounting to ` 2,980,000 during the year ended March 31, 2011 (March 31, 2010 - ` 1,812,000), the require prior approval from Central Government under Section 297 of the Companies Act, 1956. These transactions, entered into at prevailing market prices have been approved by the Board of Directors of the Company. The Company has filed an application with the Central Government for such approval and for condonation of delay in making such application. 7. ii. Details of non-compliance: There were no penalties or strictures imposed on the Company by Stock Exchanges, SEBI or any statutory authority in any matter related to capital markets during the last 3 years. 7. iii. Whistle Blower Policy: The Company has laid down a Whistle Blower Policy and the same has been posted on the Intranet of the Company. The e-mail address of the Chairman of the Audit Committee has been given in the policy for the employees to report the matters of concern. No employee is denied the opportunity to meet the Audit Committee members of the Company. 7. iv. Compliance with non-mandatory requirements of Clause 49 of the Listing Agreement: The Company has complied with the non-mandatory requirements relating to Remuneration Committee and Whistle Blower policy to the extent detailed above and has not complied with other non-mandatory requirements. 7. v. Accounting treatment: The Companys financial statements are prepared in accordance with Generally Accepted Accounting Principles and comply with the Accounting Standards as prescribed by the Companies (Accounting Standards) Rules, 2006 which is in line with the Accounting Standards recommended by the Institute of the Chartered Accountants of India. 7. vi. Risk management: The Audit Committee regularly reviews the risk assessment and control process in the Company and is satisfied that the process is appropriate to the Company needs. The Board also periodically reviews the risk assessment procedure and risk mitigation procedures laid down by the Company.
8. Means of communication:
The quarterly, half-yearly and yearly financial results are sent to the Stock Exchanges immediately after the Board approves the same. These results are also published in English newspaper, usually in Business Line and Kannada newspaper, Samyukta Karnataka. The results along with presentations made by the Company to analysts are also posted on the website of the Company, viz. www.biocon.com. The Company's website also displays all official news releases. The Company organizes investor conference calls to discuss its financial results every quarter where investor queries are answered by the Executive Management of the Company. The transcripts of the conference calls are posted on our website. Management Discussion and Analysis has been done by the Directors and forms part of the Directors Report.
9. General Shareholders' Information:

i) Annual General Meeting: Date and Time Venue : July 21, 2011 at 3.30 p.m. : Sathya Sai Samskruta Sadanam, No. 20, Hosur Road, Near Forum Mall, Bangalore - 560 029
Biocon Limited
ii)
Financial Calendar for 2011-12 First quarterly results Half-yearly Results Third quarterly Results Annual Results 2011-12 AGM for the year 2011-12
: The following are tentative dates: : July 21, 2011 : October 20, 2011 : January 25, 2012 : May 10, 2012 : July 26, 2012 : Saturday, July 9, 2011 to Thursday, July 21, 2011 (Both days inclusive)
iii)
Dates of Book Closure
iv)
Dividend payment date Interim Dividend Final Dividend Listing on Stock Exchanges
: Paid on May 12, 2011 : On or after July 22, 2011 : The National Stock Exchange of India Ltd Exchange Plaza, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051 and The Bombay Stock Exchange Limited P J Towers, Dalal Street, Mumbai - 400 001 Listing is effective from April 7, 2004
v)
vi)
Stock Code/Symbol
: NSE - BIOCON BSE 532523
vii) International Securities Identification Number : INE 376G01013 viii) Market Price data during 2010-11: The monthly high/low prices of shares of the Company from April 1, 2010 to March 31, 2011 are given below:
BSE Sl. No. 1 2 3 4 5 6 7 8 9 10 11 12 Month April-10 May-10 June-10 July-10 August-10 September-10 October-10 November-10 December-10 January-11 February-11 March-11 High (` ) 307.60 296.30 325.40 331.35 353.25 367.35 455.00 433.25 421.75 428.25 344.50 343.95 Low (` ) 293.80 278.45 286.00 309.35 311.90 340.50 365.90 378.30 381.45 345.35 305.05 312.05 Volume of Shares 2,758,856 1,238,294 3,205,943 2,730,486 3,411,255 1,760,668 10,732,524 1,960,456 2,169,231 2,834,850 1,574,851 1,118,041 High (` ) 307.70 296.10 325.45 331.15 353.80 367.70 454.95 433.50 420.85 427.50 345.35 345.05 NSE Low (` ) 294.05 279.35 286.25 309.55 312.30 341.20 366.25 378.30 381.40 346.45 305.35 312.95 Volume of Shares 12,235,322 7,169,025 12,247,249 10,230,539 16,062,565 8,946,587 43,556,982 10,583,364 10,436,275 14,011,311 7,970,478 6,585,651
ix) Relative movement chart: The chart below gives the relative movement of the closing price of the Companys share and the BSE Sensex/NSE Nifty relative to the closing price. The period covered is April 01, 2010 to March 31, 2011. The Biocon Management cautions that the stock price movement shown in the graph below should not be considered indicative of potential future stock price performance.
Biocon - BSE Sensex Price Chart

470 445 420 395 22000 21000 20000 19000 18000 17000 16000 April June September Dececember March
370 345 320 295 270
Biocon Close
BSE Sensex Close
Index Value
Rs.
Biocon - S&P Nifty Price Chart

470 445 420 395 6600 6300
370 345 320 295 270 April June September December March
5700 5400 5100 4800
Biocon Close
S&P CNX Nifty Close
x) Registrar and Transfer Agents
Karvy Computershare Private Limited Karvy House, 46, Avenue 4, Street No. 1, Banjara Hills, Hyderabad - 500 034
xi) Share transfer system: The shares of the Company are traded in the compulsory dematerialised form for all investors. The Share Transfer Committee approves the transfer of shares in the physical form as per the time limits specified in the Listing Agreement. xii) Distribution of the shareholding: The distribution of shareholding as on March 31, 2011, pursuant to Clause 35 of the Listing Agreement is as under: A. Shareholders - by category:
Total Shareholding as a percentage of Total No. of Shares Ct. Code (I) (A) (1) (a) (b) (c) (d) (e) (2) (a) (b) (c) (d) Category of Shareholders No. of Shareholders (III) Total Number of Shares (IV) No. of Shares held in Dematerialized form (V) As a % of (A+B) (VI) As a % of (A+B+C) (VII) Shares Pledged or otherwise encumbered No. of Shares (VIII) As a %
Index Value
6000
Rs.
(II) Promoter and Promoter Group Indian Individuals/Hindu Undivided Family Central Government/State Government(s) Bodies Corporate Financial Institutions/Banks Any Others Sub-Total (A)(1) : Foreign Individuals (NRIs/Foreign Individuals) Bodies Corporate Institutions Any Others Sub-Total (A)(2) : Total Shareholding of Promoter and Promoter Group (A)=(A)(1)+(A)(2)
(Ix)=(VIII)/ (IV)*100
5 5 1 1 2 7
80,892,224 80,892,224 1,407,558 39,535,194 40,942,752 121,834,976
80,876,394 80,876,394 1,407,558 39,535,194 40,942,752 121,819,146
40.45 0.00 0.00 0.00 0.00 40.45 0.70 19.77 0.00 0.00 20.47 60.92
40.45 0.00 0.00 0.00 0.00 40.45 0.70 19.77 0.00 0.00 20.47 60.92
0 0 0 0 0 0 0 0 0 0 0 0 NA NA
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 NA NA
(B) (1) (a) (b) (c) (d) (e) (f) (g) (h) (2) (a) (b)
Public Shareholding Institutions Mutual Funds/UTI Financial Institutions/Banks Central Government/State Government(s) Venture Capital Funds Insurance Companies Foreign Institutional Investors Foreign Venture Capital Investors Any Others Sub-Total (B)(1): Non-Institutions Bodies Corporate Individuals (i) Individual shareholders holding nominal share capital up to ` 1 lakh (ii) Individual shareholders holding nominal share capital in excess of ` 1 lakh 100,636 57 15,454,724 10,997,419 15,410,217 10,997,419 7.73 5.50 7.73 5.50 1,379 7,360,434 7,360,434 3.68 3.68 49 26 84 159 11,833,999 10,357,310 11,750,275 33,941,584 11,833,999 10,357,310 11,750,275 33,941,584 5.92 5.18 0.00 0.00 0.00 5.88 0.00 0.00 16.97 5.92 5.18 0.00 0.00 0.00 5.88 0.00 0.00 16.97
NA
NA
Biocon Limited
Total Shareholding as a percentage of Total No. of Shares Ct. Code (I) (c) Any Others Clearing Members Foreign Bodies Foreign Nationals Non Resident Indians Trusts Sub-Total (B)(2) : Total Public Shareholding (B)=(B)(1)+(B)(2): Total (A)+(B) : (C) Shares held by custodians, against which Depository Receipts have been issued GRAND TOTAL (A)+(B)+(C) : 185 1 9 2,158 16 104,441 104,600 104,607 92,495 105,374 713,190 1,125,120 8,374,684 44,223,440 78,165,024 200,000,000 92,495 105,374 439,118 952,726 8,374,684 43,732,467 77,674,051 199,493,197 0.05 0.05 0.36 0.56 4.19 22.11 39.08 100.00 0.00 0.05 0.05 0.36 0.56 4.19 22.11 39.08 100.00 0.00 Category of Shareholders No. of Shareholders (III) Total Number of Shares (IV) No. of Shares held in Dematerialized form (V) As a % of (A+B) (VI) As a % of (A+B+C) (VII)
Shares Pledged or otherwise encumbered No. of Shares (VIII) As a %
(II)
(Ix)=(VIII)/ (IV)*100
NA NA
NA NA
104,607
200,000,000
199,493,197
100.00
100.00
0.00
0.00
B. Distribution of shareholding by no. of shares: Distribution Schedule as on March 31, 2011

Sl.No. 1 2 3 4 5 6 7 8 Category From To 0001 - 5000 5001 - 10000 10001 - 20000 20001 - 30000 30001 - 40000 40001 - 50000 50001 - 100000 100001 & ABOVE TOTAL Number of Cases 102,210 1,155 564 212 85 71 108 202 104,607 % of Cases 97.71 1.10 0.54 0.20 0.08 0.07 0.10 0.19 100.00 Amount in ` 54,868,290 8,765,235 8,313,360 5,356,650 3,038,630 3,280,470 7,995,405 908,381,960 1,000,000,000 % of Amount 5.49 0.88 0.83 0.54 0.30 0.33 0.80 90.84 100.00
xiii) Dematerialization of shares and liquidity: Procedure for dematerialization/rematerialization of scrips Shareholders are required to submit demat/remat request to Depository Participants (DP) with whom they maintain a demat account. DP sends the request for demat of shares along with the physical share certificate to the Registrar and Transfer Agents of the Company. The Registrar liaison with Depository Participants (DP), National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Ltd. (CDSL) within 10 days from the date of log in of the request in the system and acknowledges the receipt of physical shares for demat and verifies the genuineness of the edit list. After verification of edit list and effecting the corrections, if any, the Registrar updates the final Demat Register. The Registrar forwards the confirmation report or rejection report to CDSL/NSDL, as the case may be. The Registrar does the reconciliation and confirmation of capital. The Registrar also corresponds with the DP and shareholders in case of rejection. As on March 31, 2011, 506,803 shares (0.25%) of the shares of Company were in physical form. Consequent to the IPO of 10% of the Companys paid-up capital, in March 2004, 20,000,000 shares held by the Promoters of Biocon, representing 20% of the total paid-up share capital, was locked in for 3 years from the date of allotment under the IPO, i.e. till March 31, 2007, as per the SEBI (DIP) Guidelines, 2000. Outstanding GDRs/ADRs/Warrants and convertible instruments, conversion date and likely impact on equity: Not applicable. xiv) Plant locations: i) 20th KM, Hosur Road, Electronics City P.O. Bangalore - 560 100 Plot 213-215 IDA Phase-II, Pashamylaram Medak District - 502307 Andhra Pradesh, India Kiran Kumar G. Company Secretary (Compliance Officer) Biocon Limited, 20th KM, Hosur Road, Electronics City P.O., Bangalore - 560 100 T 91 80 2808 3037 (Direct)/2808 (Board) Mail id: co.secretary@biocon.com or investor.relations@biocon.com b) Karvy Computershare Private Limited (Unit: Biocon Limited), Plot No. 17 24, Vittal Rao Nagar, Madhapur, Hyderabad - 500 081 Mail id: vlakshmi@karvy.com or Jayaramanvk@karvy.com
ii)
Biocon Park Plot No. 2, 3, 4 and 5 Bommasundra Jigani Link Road Bangalore - 560 100
iii)
xv) Address for correspondence: Investor correspondence may be addressed to: a)
Auditors Certificate
To The Members of Biocon Limited We have examined the compliance of conditions of corporate governance by Biocon Limited, for the year ended on March 31, 2011, as stipulated in clause 49 of the Listing Agreement of the said Company with stock exchange(s). The compliance of conditions of corporate governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement. We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.
For S.R. BATLIBOI & ASSOCIATES Firm registration number: 101049W Chartered Accountants
per Aditya Vikram Bhauwala Partner Membership No. 208382 Bangalore April 28, 2011
(THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK)
Biocon Limited
Auditors Report
To the Members of Biocon Limited 1. We have audited the attached Balance Sheet of Biocon Limited (the Company) as at March 31, 2011 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the 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. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. 4. Further to our comments in the Annexure referred to above, we report that: i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; ii. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; iii. The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account; iv. In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956. v. On the basis of the written representations received from the directors, as on March 31, 2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2011 from being appointed as a director in terms of Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956. vi. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India; (a) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2011; (b) in the case of the profit and loss account, of the profit for the year ended on that date; and (c) in the case of cash flow statement, of the cash flows for the year ended on that date.
per Aditya Vikram Bhauwala Partner Membership No.: 208382 Bangalore April 28, 2011
Annexure referred to in paragraph 3 of our report of even date

Re: BIOCON LIMITED (the Company) The Company has maintained proper records showing full particulars, including quantitative details and situation, of fixed assets. (b) Fixed assets have been physically verified by the management during the year in accordance with a regular programme of verification, intended to cover all the fixed assets of the Company over a period of two years, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Based on the information and explanation provided to us, no material discrepancies were noticed on such verification. (c) There was no substantial disposal of fixed assets during the year. (ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year. (b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. (c) The Company is maintaining proper records of inventory and there were no material discrepancies noticed on physical verification. (iii) (a) The Company has granted unsecured loans to three companies listed in the register maintained under Section 301 of the Companies Act, 1956 (the Act). The maximum amount involved during the year was ` 3,061,806 thousands and the balance outstanding at March 31, 2011 is ` 1,801,779 thousands. (b) In our opinion and according to the information and explanations given to us, the rate of interest, where applicable, and other terms and conditions of the loans given by the Company, are not prima facie prejudicial to the interest of the Company. (c) In respect of loans granted, repayment of the principal amount is as stipulated and payment of interest, wherever applicable, has been regular. (d) Based on our audit procedures and the information and explanation made available to us, there is no overdue amount of the loan granted by the Company to the companies listed in the register maintained under section 301 of the Act. (e) The Company has not taken any loans from companies, firms or other parties listed in the register maintained under Section 301 of the Act. (iv) In our opinion and according to the information and explanations given to us, as well as taking into consideration the management representation that certain items of fixed assets are of special nature for which alternative quotations are not available, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of fixed assets and inventory and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system of the Company. (v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act, that need to be entered into the register maintained under Section 301 have been so entered. (b) In respect of transactions made in pursuance of such contracts or arrangements exceeding value of Rupees five lakhs entered into during the financial year, because of the unique and specialized nature of items involved and absence of any comparable prices, we are unable to comment whether the transactions are made at prevailing market prices at the relevant time. (vi) The Company has not accepted any deposits from the public. (vii) In our opinion, the Company has an internal audit system, commensurate with the size and nature of its business. (viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. (ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, or employees state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and other material statutory dues applicable to it have generally been regularly deposited with the appropriate authorities. Further, since the Central Government has till date not prescribed the amount of cess payable under Section 441 A of the Act, we are not in a position to comment upon the regularity or otherwise of the Company in depositing the same. (b) According to the information and explanations given to us, there were no undisputed dues in respect of provident fund, investor education and protection fund, employees state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty and other statutory dues which were outstanding, at the year end for a period of more than six months from the date they became payable. (c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, custom duty, excise duty and cess on account of any dispute, are as follows: (i) (a)
Biocon Limited
Name of the statute The Central Excise Act, 1944
Nature of dues Excise Duty
Amount Period to which the (` in thousands) amount relates 633* 1994-1995
Forum where dispute is pending Assistant Collector of Central Excise.
The Central Excise Act, 1944 The Central Excise Act, 1944 The Central Excise Act, 1944 The Customs Act, 1962
Excise Duty Excise Duty Excise Duty Customs Duty
859 2005-2006 88,209 April 2005 till March 2008 10,414 2010-2011 3,005 2004-2005 (1514*) 21,606 * 2010-2011 5,583 2005-2006 (1164*) 3,879* 1996-1997 4,040* 1997-1998 17,619* 2002-2003 12,713* 2003-2004 18,940* 2004-2005 15,062* 2005-2006 24,625 2006-2007 (17,838*) 837 2007-2008
Customs, Excise and Service Tax Appellate Tribunal, Chennai Customs, Excise and Service Tax Appellate Tribunal, Chennai Commissioner Appeal, Chennai Customs, Excise and Service Tax Appellate Tribunal, Chennai Commissioner Appeal Bangalore Joint Commissioner Appeal Bangalore Supreme Court High Court of Karnataka Commissioner of Income Tax (Appeals) Commissioner of Income Tax (Appeals) Commissioner of Income Tax (Appeals) Commissioner of Income Tax (Appeals) Commissioner of Income Tax (Appeals) Commissioner of Income Tax (Appeals)
The Customs Act, 1962 VAT Act Income-tax Act, 1961 Income-tax Act, 1961 Income-tax Act, 1961 Income-tax Act, 1961 Income-tax Act, 1961 Income-tax Act, 1961 Income-tax Act, 1961 Income-tax Act, 1961
Customs Duty VAT Income Tax Income Tax Income Tax Income Tax Income Tax Income Tax Income Tax Income Tax
* These amounts are paid in protest. (xi) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year. (xii) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institution and banks. The Company does not have any borrowing by way of debenture. (xiii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. (xiv) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company. (xv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company. (xvi) According to the information and explanations given to us, the Company has given guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof in our opinion are not prima-facie prejudicial to the interest of the Company. (xvii) The Company did not have any term loans outstanding during the year. (xviii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment. (xix) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Act. (xx) The Company did not have any outstanding debentures during the year. (xxi) The Company has not raised any money through a public issue during the year. (xxii) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.
For S.R. BATLIBOI & ASSOCIATES Firm registraion number: 101049W Chartered Accountants per Aditya Vikram Bhauwala Partner Membership No.: 208382 Bangalore April 28, 2011
Balance Sheet as at March 31, 2011

(All amounts in Indian Rupees thousands) Schedule SOURCES OF FUNDS Shareholders Funds Share capital Reserves and surplus Loan Funds Secured loans Unsecured loans Deferred Tax Liability (Net) APPLICATION OF FUNDS Fixed Assets Gross Block Less: Accumulated depreciation Net Block Capital work-in-progress [including capital advances of ` 4,802 (March 31, 2010 - ` 60,269)] Intangible Assets Investments Current Assets, Loans and Advances Inventories Sundry debtors Cash and bank balances Loans and advances Less: Current Liabilities and Provisions Current Liabilities Provisions Net Current Assets Notes to Accounts 17 8 9 10 11 12 3,153,719 1,101,908 4,255,627 8,861,991 21,549,995 3,816,243 832,476 4,648,719 6,437,640 17,991,337 2,747,374 4,181,044 2,102,320 4,086,880 13,117,618 2,447,986 3,836,444 771,218 4,030,711 11,086,359 6 (ii) 7 1,032,909 7,695,285 134,490 4,858,229 583,344 7,183,253 184,062 4,186,382 6 (i) 10,924,574 4,262,198 6,662,376 10,018,002 3,418,093 6,599,909 3 4 5 740,643 945,743 1,686,386 395,518 21,549,995 896,834 1,021,228 1,918,062 410,408 17,991,337 1 2 1,000,000 18,468,091 19,468,091 1,000,000 14,662,867 15,662,867 March 31, 2011 March 31, 2010
The Schedules referred to above and Notes to Accounts form an integral part of the Balance Sheet. As per our report of even date For S. R. BATLIBOI & ASSOCIATES Firm Registration No.: 101049W Chartered Accountants per Aditya Vikram Bhauwala Partner Membership No.: 208382 Bangalore April 28, 2011 For and on behalf of the Board of Directors of Biocon Limited
Kiran Mazumdar Shaw Managing Director
John Shaw Director
Murali Krishnan K N President - Group Finance
Kiran Kumar Company Secretary
Biocon Limited
Profit and Loss Account for the year ended March 31, 2011
(All amounts in Indian Rupees thousands, except share data and per share data) Schedule INCOME Gross sales Less: Excise duty Net sales Licensing and development fees Other income EXPENDITURE Manufacturing, contract research and other expenses Interest and finance charges PROFIT BEFORE DEPRECIATION AND TAXES Depreciation /Amortisation Less: Amount recovered from co-development partner PROFIT BEFORE TAXES Provision for income-tax Current tax Deferred taxes PROFIT FOR THE YEAR Balance brought forward from previous year PROFIT AVAILABLE FOR APPROPRIATION Interim dividend on equity shares Proposed final dividend on equity shares Tax on interim dividend Tax on proposed final dividend, net of reversal of earlier year ` 6,552 (March 31, 2010 ` Nil) Transfer to general reserve BALANCE TRANSFERRED TO BALANCE SHEET Earnings per share (equity shares, par value of ` 5 each) Basic (in ` ) Diluted (in ` ) Weighted average number of shares used in computing earnings per share Basic Diluted Notes to Accounts 17(4) 17(4) 17 195,542,464 197,368,418 194,490,677 197,626,701 23.49 23.27 12.77 12.57 459,250 12,612,729 248,357 9,470,267 5 593,605 (14,890) 4,592,495 9,470,267 14,062,762 300,000 600,000 90,783 278,713 2,483,570 8,009,190 10,492,760 700,000 74,136 6 (i) & 6 (ii) 6 (i) (e) 14 16 9,824,660 23,778 9,848,438 6,072,901 907,000 5,309 901,691 5,171,210 8,709,669 19,910 8,729,579 3,559,573 797,290 797,290 2,762,283 13 13,644,384 393,724 13,250,660 2,064,963 605,716 15,921,339 11,580,976 300,281 11,280,695 350,130 658,327 12,289,152 March 31, 2011 March 31, 2010
The Schedules referred to above and Notes to accounts form an integral part of the Profit and Loss Account. As per our report of even date For S. R. BATLIBOI & ASSOCIATES Firm Registration No.: 101049W Chartered Accountants per Aditya Vikram Bhauwala Partner Membership No.: 208382 Bangalore April 28, 2011 For and on behalf of the Board of Directors of Biocon Limited
John Shaw Director
Statement of Cash Flows for the year ended March 31, 2011
(All amounts in Indian Rupees thousands) I March 31, 2011 CASH FLOWS FROM OPERATING ACTIVITIES : Net profit including exceptional items, before tax Adjustments for Depreciation and amortisation Unrealised exchange (gain)/loss Employee stock compensation expense Provision / (reversal of provision) for bad and doubtful debts Bad debts written off Interest expense Interest income Dividend earned Gain on sale of investment in mutual funds Loss on fixed assets sold Operating profit before working capital changes Movements in working capital Inventories Sundry debtors Loans and advances Current liabilities and provisions Cash generated from operations Tax paid (net of refunds) Net cash from operating activities CASH FLOWS FROM INVESTING ACTIVITIES : Purchase of fixed assets, net of reimbursements under co-development arrangements Acquisition of intangible assets Proceeds from sales of fixed assets Interest received Dividend received Loan to subsidiaries / joint venture companies, net Investment in subsidiary / joint venture / associate companies Sale of investments (current) Movement in reserves of ESOP trust Issue of shares under ESOP scheme Purchase of shares by ESOP Trust Purchase of investments -Long term -Current Net cash used for investing activities CASH FLOWS FROM FINANCING ACTIVITIES : Short term borrowings from banks, net Unsecured loans Dividend paid Dividend tax paid Interest paid Recovery of ESOP compensation expense from subsidiaries Net cash generated from / (used for) financing activities NET CHANGE IN CASH AND CASH EQUIVALENTS (I + II + III) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR (IV + V ) COMPONENTS OF CASH AND CASH EQUIVALENTS AS AT THE END OF THE YEAR Cash on hand Cheques on hand Balances with banks - in current accounts (excluding Unclaimed Dividend) - in deposit accounts - in unpaid dividend accounts* Gain / (Loss) on exchange differences on cash and cash equivalents held in foreign currency CASH AND CASH EQUIVALENTS IN CASH FLOW STATEMENT 5,171,210 901,691 (75,742) 1,129 (2,401) 9,860 10,113 (39,757) (167,114) (59) 3,032 5,811,962 (299,388) (333,656) (222,702) (797,362) 4,158,855 (509,194) 3,649,661 (1,232,442) 19,235 39,757 167,114 121,548 (121,552) 17,632,354 198,691 183 (138,104) (18,044,667) (1,357,884) (286,359) 61,415 (700,000) (67,584) (8,861) 3,692 (997,697) 1,294,080 771,218 2,065,298 1,283 129,810 1,715,648 250,303 5,276 (37,022) 2,065,298 March 31, 2010 2,762,283 797,290 40,628 (1,800) 15,306 1,656 11,755 (88,315) (98,604) 28,282 3,468,481 (502,762) (979,878) (1,243,260) 1,750,671 2,493,252 (185,911) 2,307,341 (767,509) (39,015) 17,887 44,111 98,604 (39,580) (48,100) 18,751,040 202,469 317 (1,000) (32,406) (19,389,379) (1,202,560) (58,109) 396,366 (600,000) (101,970) (11,755) 4,011 (371,457) 733,324 60,427 793,751 2,104 764,367 103 4,644 22,533 793,751
II
III
IV V VI
*These balances are not available for use by the Company as they represent corresponding unpaid dividend liabilities.
As per our report of even date For S. R. BATLIBOI & ASSOCIATES Firm Registration No.: 101049W Chartered Accountants per Aditya Vikram Bhauwala Partner Membership No.: 208382 Bangalore April 28, 2011 For and on behalf of the Board of Directors of Biocon Limited
John Shaw Director
Biocon Limited
March 31, 2011
March 31, 2010
1. Share capital
Authorised: 220,000,000 (March 31, 2010 - 220,000,000) equity shares of ` 5 each (March 31, 2010 - ` 5 each) Issued, subscribed and paid-up: 200,000,000 (March 31, 2010 - 200,000,000) equity shares of ` 5 each (March 31, 2010 - ` 5 each), fully paid (a) Of the above equity shares: (i) 30,800 equity shares of ` 100 each were allotted as fully paid bonus shares by capitalisation of general reserve in the year ended March 31, 1997. (ii) 23,471 equity shares of ` 100 each were allotted as fully paid-up shares in the year ended March 31, 2000 pursuant to a contract for consideration other than cash. (iii) On March 30, 2002, the Company acquired 99.9 per cent equity in Syngene International Limited (Syngene) through the issue of 202,780 equity shares of ` 10 each. The consideration was determined on the basis of a fair valuation, as approved by the statutory authorities in India. The related securities premium at ` 403.8 per equity share had been credited to securities premium account. (b) Also refer to Note 3 in Schedule 17 for shares allotted under the Employees Stock Option Plan. (c) On November 11, 2003, the Company issued 86,324,700 equity shares of ` 5 each as fully paid-up bonus shares by capitalisation of balance in the profit and loss account of ` 431,624. (d) On September 15, 2008, the Company issued 100,000,000 equity shares of ` 5 each as fully paid bonus shares by capitalisation of balance in the securities premium account of ` 500,000. 1,000,000 1,000,000 1,100,000 1,100,000
March 31, 2011
March 31, 2010
2. Reserves and surplus

Revaluation Reserve Balance Securities Premium Balance ESOP Trust Balance Add: Dividend, interest income and profit on sale of shares, net General Reserve Balance Add: Transfer from Profit and Loss Account Stock compensation adjustment (Also see Note 3 in Schedule 17) Stock options outstanding Additions during the year Deletions during the year Less: Deferred employee stock compensation expense Balance in profit and loss account Deferred employee stock compensation expense (Also see Note 3 in Schedule 17): Stock compensation expense outstanding at the beginning of the year Stock options granted during the year Stock options cancelled/forfeited during the year Stock compensation expense (amortised)/reversed during the year Stock compensation expense charged to Subsidiaries during the year Closing balance of deferred employee stock compensation expense 17,061 (7,599) (1,129) (3,692) 4,641 49,345 (30,073) 1,800 (4,011) 17,061 263,732 7,599 256,133 4,641 251,492 12,612,729 18,468,091 293,805 30,073 263,732 17,061 246,671 9,470,267 14,662,867 1,775,708 459,250 2,234,958 1,527,351 248,357 1,775,708 372,254 198,691 570,945 169,785 202,469 372,254 2,788,478 2,788,478 9,489 9,489
Biocon Limited
March 31, 2011
March 31, 2010
3. Secured loans
From banks Cash credit, packing credit, etc. 740,643 740,643 896,834 896,834
(i) The Company has working capital facilities with Hongkong and Shanghai Banking Corporation (HSBC). These facilities are repayable on demand, secured by pari-passu first charge on current assets. As on March 31, 2011, the Company has utilised fund based limits of ` 740,229 (March 31, 2010 - ` 694,435), inclusive of foreign currency denominated loans of ` 668,100 (US$ 15 Million ) [March 31, 2010 - ` 427,025 (US$ 9.5 million)]. (ii) The Company has working capital facilities with Canara Bank (CB). These facilities are repayable on demand, secured by a pari-passu first charge on current assets of the Company. As on March 31, 2011, the Company has utilised ` 414 (March 31, 2010 - ` 124). (iii) The Company has working capital facilities with ABN Amro Bank. These facilities are repayable on demand, secured by a pari-passu first charge on the current assets of the Company. As on March 31, 2011, the Company has utilised Nil (March 31, 2010- ` 202,275) inclusive of foreign currency denominated loans of Nil (US$ Nil) [March 31, 2010- ` 202,275 (US$ 4.5 million)]. March 31, 2011 March 31, 2010
4. Unsecured loans
Deferred Sales Tax Liability NMITLI - CSIR Loan Financial assistance from DSIR Financial assistance from DBT Financial assistance from DST Short- term loan from a bank 648,624 2,319 21,000 37,100 14,000 222,700 945,743 648,978 2,650 10,000 359,600 1,021,228
(i) Under the Industrial Policy of the Government of Karnataka, the Company on February 4, 1998 obtained an order from the Karnataka Sales Tax Authority for allowing deferment of sales tax (including turnover tax) for a period upto 8 years with respect to sales from its Bommasandra manufacturing facility for an amount not exceeding ` 24,375. As at March 31, 2011, the Company has utilised ` Nil (March 31, 2010 - ` 354). During the year, the Company has repaid the entire amount. (ii) Under the Agro Food Processing Industrial Policy of the Government of Karnataka, the Company on February 9, 2000 obtained an order from the Karnataka Sales Tax Authority for allowing deferment of sales tax (including turnover tax) for a period upto 12 years with respect to sales from its Hebbagodi manufacturing facility for an amount not exceeding ` 648,938. As at March 31, 2011, the Company has utilised ` 648,624 (March 31, 2010 - ` 648,624). The amount due for repayment during 2011-12 is ` Nil (March 31, 2010 - ` Nil). (iii) On March 31, 2005, the Company entered into an agreement with the Council of Scientific and Industrial Research (CSIR), for an unsecured loan of ` 3,312 for carrying out part of the research and development project under the New Millennium Indian Technology Leadership Initiative (NMITLI) Scheme. The loan is repayable over 10 equal annual installments starting from April, 2009 and carrying an interest rate of 3 percent per annum. The amount due for repayment within one year is ` Nil (March 31, 2010- Nil). The amount due for repayment in 2011-12 being ` 331 has been paid as at March 31, 2011. (iv) On March 31, 2009, the Department of Scientific and Industrial Research (DSIR) has sanctioned financial assistance for a sum of ` 17,000 to the Company for part financing one of its research projects. Of the said sanctioned amount, the Company has received the first installment of ` 10,000 during the year 2008-09. The Research project has been completed during the year ended March 31, 2010. The assistance is repayable in the form of royalty payments post commercialisation of the project in five equal annual installements. During the year, the Company has received the remaining ` 7,000 towards the Pilot Plant project. In addition, DSIR has further sanctioned ` 4,000 towards a development project and the same was received in August, 2010. The amount due for repayment during 2011-12 is ` Nil (March 31, 2010 - ` Nil). (v) On November 3, 2009, the Department of Biotechnology (DBT) under the Biotechnology Industrial Partnership Programme (BIPP) has sanctioned financial assistance for a sum of ` 53,000 to the Company for financing one of its research projects. Of the said sanctioned amount, the Company has received a sum of ` 37,100 during the year 2010-11. The loan is repayable over 10 half yearly installments after one year from the date of completion of the project, and carries an interest rate of 2 percent per annum. The amount due for repayment during 2011-12 is ` Nil (March 31, 2010 - ` Nil). (vi) On August 25, 2010, the Department of Science and Technology (DST) under the Drugs and Pharmaceutical Research Programme (DPRP) has sanctioned financial assistance for a sum of ` 70,000 to the Company for financing one of its research projects. Of the said sanctioned amount, the Company has received the first installment of ` 14,000 during the year 2010-11. The loan is repayable over 10 annual installments starting from July 1, 2012, and carries an interest rate of 3 percent per annum. (vii) The Company has obtained foreign currency loan of ` 222,700 (US$ 5 million) from BNP Paribas as at March 31, 2011. The loan is repayable by September 18, 2011. As at March 31, 2010, the Company had availed foreign currency loan of ` 359,600 (US$ 8 million) from HDFC Bank.
Deferred tax (asset) / liability as at March 31, 2010
Current year charge / (credit)
Deferred tax (asset) / liability as at March 31, 2011 432,688 (11,583) (22,288) (3,299) 395,518 410,408
5. Deferred tax liability (net)

Depreciation / Amortisation Employee retirement benefits Provision for doubtful debts Others Year ended March 31, 2010 452,977 (15,105) (24,165) (3,299) 410,408 410,408 (20,289) 3,522 1,877 (14,890) -
The Company has units / operations in a Special Economic Zone (SEZ) which claim deduction of income under the provisions of the Income Tax Act, 1961. Deferred Tax (assets) / liabilities are recognised in respect of timing differences which originate in the reporting period, but are expected to reverse after the tax holiday period.
Balance at the beginning of the year
Additions during the year
Deletions during the year
Balance at the end of the year
6. (i) Fixed assets

Gross Block Land Freehold (revalued) Freehold (others) Leasehold Buildings (revalued) Buildings (others) Leasehold improvements Plant and machinery (including Computers) Research and development equipment Furniture and fixtures Vehicles Year ended March 31, 2010 Accumulated depreciation Buildings (revalued) Buildings (others) Leasehold improvements Plant and machinery (including Computers) Research and development equipment Furniture and fixtures Vehicles Year ended March 31, 2010 Net Block Land Freehold (revalued) Freehold (others) Leasehold Buildings (revalued) Buildings (others) Leasehold improvements Plant and machinery (including Computers) Research and development equipment Furniture and fixtures Vehicles Year ended March 31, 2010 8,967 102,713 226,420 1,570,508 1,949 4,058,755 586,403 35,293 8,901 6,599,909 6,752,841 8,967 102,713 226,420 1,626,052 1,821 3,945,964 699,282 39,415 11,742 6,662,376 6,599,909 16,561 341,184 1,242 2,561,948 427,880 59,254 10,024 3,418,093 2,733,315 79,770 128 639,994 121,479 13,386 2,671 857,428 773,487 1,541 11,611 171 13,323 88,709 16,561 420,954 1,370 3,200,401 537,748 72,640 12,524 4,262,198 3,418,093 8,967 102,713 226,420 16,561 1,911,692 3,191 6,620,703 1,014,283 94,547 18,925 10,018,002 9,486,156 135,314 532,874 250,320 17,508 6,146 942,162 666,724 7,212 27,573 805 35,590 134,878 8,967 102,713 226,420 16,561 2,047,006 3,191 7,146,365 1,237,030 112,055 24,266 10,924,574 10,018,002
Notes: (a) Certain freehold land and buildings were revalued on November 1, 1994, based on the estimated replacement cost after considering depreciation up to that date, as per valuers reports and the resultant surplus of ` 34,529 was credited to revaluation reserve. Of this reserve, ` 25,040 (March 31, 2010 - ` 25,040) has been transferred to the profit and loss account for depreciation on these assets or adjusted on the sale of these assets. (b) On December 5, 2002, Karnataka Industrial Areas Development Board (KIADB) allotted land aggregating to 26.75 acres to the Company for ` 64,200 on a lease-cum-sale basis for a period of 6 years, extended subsequently for further period of 14 years. During the year ended March 31, 2005, the Company acquired an additional 41.25 acres of land for ` 99,417 from KIADB. During the quarter ended June 30, 2005, the Company paid an advance of ` 56,320 towards allotment of additional 19.68 acres of land, offered to the Company by KIADB on December 20, 2003. The Company has received the possession certificate from KIADB in January 2006 and entered into an agreement with KIADB to acquire this plot of land on lease-cum-sale basis for a period of 20 years during the year ended March 31, 2007. The registration for a part of the land under this lease is pending settlement of certain disputes in respect of claims made against KIADB. (c) During the year ended March 31, 2008, the Company has been allotted land measuring approximately 50 acres at the Jawaharlal Nehru Pharma City Vishakhapatnam, Andhra Pradesh, on a long-term lease basis for a consideration of ` 260,100. The Company has paid the entire consideration towards the cost of the lease as at March 31, 2011 and pending completion of registration formalities, the amount has been recorded as capital work-in-progress. (d) On December 1, 2009 the Company completed the purchase of Active Pharma Ingredient business of M/s IDL Speciality Chemicals Limited. The assets acquired have been capitalised at their fair values in the books of the Company. (e) Additions to fixed assets during the year ended March 31, 2011, include assets of ` 172,816 (March 31, 2010 - Nil) of which, ` 86,408 (March 31, 2010 - ` Nil) has been funded by the co-development partner. The Company has capitalised and depreciated the gross cost of these assets. The funding received from the co-development partner is reflected as Deferred revenues in Schedule 12 and the depreciation charge for the year has been adjusted for the proportionate amount recovered from the co-development partner.
Biocon Limited
Sale during the year
6. (ii) Intangible assets

Cost / Acquisition Intellectual Properties from Nobex - Under commercialisation Marketing rights for products Computer software Year ended March 31, 2010 Accumulated Amortisation Intellectual Properties from Nobex - Under commercialisation Marketing rights for products Computer software Year ended March 31, 2010 Net Value Intellectual Properties from Nobex - Under commercialisation Marketing rights for products Computer software Year ended March 31, 2010 24,000 128,850 31,212 184,062 388,850 8,000 103,081 23,409 134,490 184,062 57,138 7,803 64,941 41,138 16,000 25,769 7,803 49,572 23,803 73,138 25,769 15,606 114,513 64,941 81,138 128,850 39,015 249,003 429,988 39,015 220,000 81,138 128,850 39,015 249,003 249,003
(a) The Company acquired patents relating to certain technologies (collectively IPs) from M/s Nobex Inc. During the year ended March 31, 2007, the Company licensed out the IP-Apaza for further development and commercialisation. Effective October 2006, the Company commenced amortisation of Apaza over a period of 5 years. During the year ended March 31, 2010, the Company transferred the right to develop and commercialise Oral Insulin to Biocon Research Ltd, a wholly owned subsidiary (BRL) for a consideration of ` 673,260 (US$ 14 Million). As the development and marketing rights of Oral Insulin have certain obligations of the parties to conclude the arrangements, the same has been treated as deferred revenues by the Company at March 31, 2011. (b) During the year ended March 31, 2010, the Company transferred the rights relating to development and marketing of certain monoclonal antibodies to Biocon Research Limited for a consideration of ` 480,500. Having regard to certain obligations for the development of the products, the income has been recognised over the period of the process development, estimated to be 18 months from the date of agreement. (c) During the year ended March 31, 2009, the Company acquired marketing rights of hR3 and EPO from Biocon Biopharmaceuticals Private Limited (BBPL) for a sum of ` 128,850. These rights give the Company an exclusive right of marketing the products in certain territories. The Company has during the year ended March 31, 2011, made an application for registration of the products in the territory. The Company has commenced amortisation of these intangibles over a period of five years from April 2010.
March 31, 2011
March 31, 2010
7. Investments
Long-term investments (At cost) A) Trade investments: Unquoted and fully paid up 2,722,014 (March 31, 2010 - 2,722,014) Series B1 Preferred Convertible Stock at US$ 1.55 each, fully paid, par value US $0.001 each of Vaccinex Inc., USA 217,972 (March 31, 2010 - 217,972) Series B2 Preferred Convertible Stock at US$ 3.10 each, fully paid, par value US $0.001 each of Vaccinex Inc., USA 4,285,714 (March 31, 2010 - 4,285,714) Series A Preferred Stock at US$ 0.70 each, fully paid, par value US $ 0.00001 each of IATRICa Inc., USA (Associate Company) In Joint Venture Companies: Unquoted and fully paid-up Nil (March 31, 2010 - 8,976,000) equity shares of ` 10 each of Biocon Biopharmaceuticals Private Limited 150 (March 31, 2010 - 150) equity shares of United Arab Emirates Dirham (AED) 1,000 each of NeoBiocon FZ LLC B) Non-trade: National Savings Certificates (Unquoted) Shares of the Company held by ESOP Trust (Quoted) C) In subsidiary companies: Unquoted and fully paid up 50,000 (March 31, 2010 - 50,000) equity shares of ` 10 each of Clinigene International Limited 2,874,830 (March 31, 2010 - 2,874,830) equity shares of ` 10 each of Syngene International Limited 500,000 (March 31, 2010 - 500,000) equity shares of ` 1 each of Biocon Research Limited 100,000 (March 31, 2010 -100,000) equity shares of CHF 1 each of Biocon SA, Switzerland 17,600,000 equity shares of ` 10 each of Biocon Biopharmaceuticals Private Limited 3 (March 31, 2010 - Nil) equity shares of RM 10 each of Biocon Sdn.Bhd, Malaysia 500 84,328 500 3,960 211,312 1 300,601 918,940 500 84,328 500 3,960 89,288 659,465 62 260,043 260,105 62 122,121 122,183 1,613 358,234 89,760 1,613 447,994 185,795 32,356 138,470 185,795 32,356 138,470
(a) During the year ended March 31, 2009, Biocon Research Limited (BRL) was incorporated as a wholly owned subsidiary for undertaking research in novel and innovative drug initiatives. BRL commenced commercial activities during the year ended March 31, 2010 and as at March 31, 2011 has a negative net worth of ` 372,559 due to its early stage of operations and research activities. BRL is a research and development company and of strategic importance to the Company. Accordingly, the management is of the view that there is no diminution in the value of the investment. Further, the Company has given a letter of financial support to BRL to fund its operations. (b) During the year ended March 31, 2009, Biocon SA a wholly owned subsidiary was incorporated in Switzerland for development and marketing of biopharmaceutical products in various markets outside India. As at March 31, 2011, Biocon SA holds 78% (March 31, 2010 - 78%) equity interest in AxiCorp GmbH, Germany and has commenced clinical development of insulin for the European markets. Also refer Note 5 in Schedule 17. (c ) BBPL was incorporated as a 51% joint venture between the Company and CIMAB, SA engaged in research, development, manufacturing and marketing of biopharmaceuticals. During the year, the Company purchased the 49% stake in BBPL. Also refer Note 1 to Schedule 17. Further, the Company has granted a long-term loan of ` 1,342,690 (March 31, 2010 - ` 258,259) to fund the operations of BBPL repayable over a period of 5 years. As at March 2011, the entire share capital of BBPL is held by the Company. BBPL is of strategic importance to the Company. Accordingly, the management is of the view that there is no dimunition in the value of the investment. (d) NeoBiocon was incorporated in Dubai as a 50% joint venture between the Company and Mr.B R Shetty and is engaged in development, marketing and distribution of biopharmaceuticals in the Middle-East region. As at March 31, 2011, the aggregate amount of Biocons interest in the assets, liabilities, income and expenses of NeoBiocon is ` 47,039 (March 31, 2010 - ` 17,033) and ` 22,559 (March 31, 2010 - ` 10,049), ` 59,608 (March 31, 2010 - ` 23,927) and ` 38,002 (March 31, 2010 - ` 21,214) respectively. The share of the Company in the accumulated profit of NeoBiocon as at March 31, 2011 stood at ` 17,164 (loss as on March 31, 2010 - ` 4,080). Since NeoBiocon has commenced marketing / distribution activities recently, management believes that there is no other than temporary diminution in the value of the investment. (e) As on March 31, 2011, the ESOP Trust held 4,457,536 shares (March 31, 2010 - 5,509,323) of the Company towards grant / exercise of shares to / by employees of the Company and its subsidiaries under the ESOP Scheme. Also refer Note 3 in Schedule 17. (f) Vaccinex Inc., USA (Vaccinex) is engaged in research and development activities and has been incurring losses and has a negative net worth. As Vaccinex is a development stage enterprise and of strategic importance to the Company, management believes that there is no other than temporary diminution in the value of this investment. (g) The Company has 30% (March 31, 2010 - 30%) voting rights in IATRICa Inc., USA. (h) During the year ending March 31, 2011 Biocon Sdn.Bhd was incorporated as a wholly owned subsidiary in Malaysia. Biocon Sdn.Bhd is yet to commence operations as at March 31, 2011.
Biocon Limited
d) Other Investments
Face Value
Units March 31, 2011 5,613,963 6,099,719 20,000,000 15,453,855 12,000,000 15,000,000 7,000,000 2,451,915 30,087,869 35,024,594 1,661,746 10,000,000 13,729,884 15,179,781 29,868,082 284,038 19,990,005 20,000,000 391,605 7,198,633 15,000,000 17,587,104 9,087,531 12,728
Cost March 31, 2011 56,140 61,039 200,000 154,539 120,000 150,000 70,000 24,596 304,175 350,509 175,705 100,000 137,319 153,009 303,316 284,428 200,000 200,000 392,276 72,030 150,000 176,497 90,981 12,730 3,939,289 4,858,229
Market Value March 31, 2011 56,181 61,039 201,940 154,837 120,700 151,307 71,225 24,596 304,209 350,509 175,705 100,243 137,319 153,009 303,316 284,428 200,052 201,378 392,276 72,030 151,509 176,497 90,981 12,731
Units March 31, 2010 9,012,700 5,718,324 7,500,000 41,552,642 6,514,416 1,786,439 30,146,400 8,156,446 3,988,697 33,337,871 15,000,000 1,069 10,616,070 328,204 5,023,859 10,033,109 20,000,000 10,043,228 65,566,225 9,998,600 -
Cost March 31, 2010 90,188 57,183 75,000 415,652 73,199 188,889 301,464 81,575 40,076 336,038 150,000 16 181,487 328,577 50,245 100,682 200,000 100,590 656,056 100,000 3,526,917 4,186,382 4,064,261 122,121 1,567,127
Market Value March 31, 2010 90,188 57,183 75,000 415,652 73,199 188,889 301,464 81,575 40,076 336,038 150,000 16 181,487 328,577 50,246 100,682 200,000 100,590 656,056 100,000 -
Birla Sun Life Floating Rate Fund - Long Term Plan - Daily Dividend Birla Sun Life Savings Fund - Institutional - Daily Dividend Birla Sunlife Interval Income Fund - Institutional - Quarterly - Series 1 Dividend Birla Sunlife Interval Income Fund - Institutional - Quarterly - Series 2 Dividend Birla Sunlife Fixed Term Plan Series CO Dividend Payout Birla Sunlife Qtly Interval - Series 4 - Dividend Reinvestment Birla Sunlife Short Term FMP - Series 6 Dividend payout Birla Sunlife Short Term FMP - Series 9 Dividend payout DWS Fixed Term fund - Series 73 - Dividend Plan - Payout Fortis Money Plus Fund Institutional Plan - Daily Dividend HDFC Cash Management Fund - Treasury Advantage Plan Wholesale Daily Dividend HSBC Floating Rate - Long Term Plan - Institutional - Weekly Dividend HSBC Ultra Short Term Bond Fund - Institutional Plan - Daily Dividend ICICI Prudential Blended Plan B Institutional Daily Dividend Option-II ICICI Prudential Flexible Income Plan Premium - Daily Dividend IDFC Fixed Maturity Monthly Series - 30 Dividend IDFC Fixed Maturity Plan - Half Yearly Series - Plan A Dividend IDFC Money Manager Fund - Treasury Plan - Institutional Plan C Daily Dividend IDFC Money Manager Fund - Treasury Plan - Super Institutional Plan C Kotak Flexi Debt Fund - Institutional - Daily Dividend Kotak Floater Long Term - Daily dividend Kotak Quarterly Interval Plan Series 6 - Dividend L&T Freedom Income STP Institutional - Daily Dividend Reliance Liquid Fund - Treasury Plan - Daily Dividend Reliance Medium Term Fund - Institutional - Daily Dividend Reliance Money Manager Fund - Institutional - Daily Dividend Reliance Monthly Interval Fund - Series II - Institutional Dividend Plan Religare Active Income Fund - Institutional - Monthly Dividend Religare Credit Oppurtunities Fund - Institutional - Monthly Dividend Religare Fixed Maturity Plan-Series-II Plan A (13 Months) Religare Ultra Short Term Fund - Institutional Daily Dividend Religare Ultra Short Term Fund - Institutional Daily Dividend - Series A SBI SHF Ultra Short Term Fund - Institutional Daily Dividend TATA Fixed Income Portfolio Fund Scheme B3 - Institutional Quarterly TATA Fixed Maturity Plan Series 28 Scheme A Dividend TATA Floater Fund - Daily Dividend Templeton India Ultra Short Bond Fund - Super Institutional Plan Daily Dividend UTI Treasury Advantage Fund - Institutional Plan Daily Dividend Reinvestment
10 10 10 10 10 10 10 10 10 10 10 11 10 10 106 10 10 10 10 10 10 10 10 15 17 1,001 10 10 10 10 1,002 10 10 10 10 10 10 1,000
Aggregate value of unquoted investments Aggregate value of quoted investments (cost) Aggregate value of quoted investments (market value)
4,598,186 260,043 1,537,850
(a) Other Investments include current and unquoted investments of the ESOP Trust of ` 304,175 (March 31, 2010 - ` 73,198)
The following investments were purchased and sold during the year:
Axis Liquid Fund - Institutional Daily Dividend Axis Treasury Advantage Fund - Institutional Daily Dividend Birla Sun Life Cash Manager - Institutional Plan - Daily Dividend Birla Sun Life Cash Plus - Institutional - Daily Dividend Birla Sun Life Floating Rate Fund - Long Term Plan - Daily Dividend Birla Sun Life Savings Fund - Institutional - Daily Dividend Birla Sun Life Floating Rate Fund - Long Term - Institutional - Weekly Dividend Birla Sun Life Interval Income Fund - Institutional - Quarterly - series 1 Dividend Birla Sun Life Interval Income Fund - Institutional - Quarterly - series 2 Dividend Birla Sun Life Quarterly Interval - Series 4 - Dividend Reinvestment Fortis Money Plus Fund Institutional Plan - Daily Dividend Fortis Overnight Fund Institutional Plan - Daily Dividend Templeton India Ultra Short Bond Fund - Super Institutional Plan - Daily Dividend HDFC Cash Management Fund - Treasury Advantage Plan - Wholesale Daily Dividend HDFC Liquid Fund - Daily Dividend HDFC Liquid Fund Premium - Daily Dividend ICICI Interval Monthly - 1 Institutional Dividend ICICI Prudential Flexible Income Plan Premium - Daily Dividend ICICI Prudential Interval Fund IV - Quarterly Institutional Dividend ICICI Prudential Liquid Super Institutional - Daily Dividend IDFC Cash Fund - Plan C - Daily Dividend IDFC Cash Fund - Super Institutional Plan C - Daily Dividend IDFC Fixed Maturity Plan - Half yearly Series - Plan A Dividend IDFC Fixed Maturity Plan - Monthly Series 27 - Dividend IDFC Money Manager Fund - Investment Plan - Institutional Plan B - Daily Dividend IDFC Money Manager Fund - Treasury Plan - Institutional Plan C - Daily Dividend IDFC Money Manager Fund - Treasury Plan - Super Institutional Plan C - Daily Dividend Kotak Flexi Debt Scheme Institutional - Daily Dividend Kotak Floater Long Term - Daily Dividend Kotak Floater Short Term - Daily dividend Kotak Liquid - Daily Dividend Kotak Liquid - Institutional - Daily Dividend L&T FMP - II (December 91 DA) - Dividend Payout L&T FMP - I (July 91DA) - Dividend Payout L&T Freedom Income STP Institutional - Daily Dividend L&T Liquid Institutional Daily Dividend LICMF Income Plus Fund - Daily Dividend LICMF Liquid Fund - Daily Dividend LICMF Savings Plus Fund - Daily Dividend Reliance Floating Rate Fund - Short Term Plan - Daily Dividend Reliance Liquid Fund - Cash Plan - Daily Dividend Reliance Liquid Fund - Treasury Plan IP - Daily Dividend Reliance Liquidity Fund - Daily Dividend Reliance Medium Term Fund - Institutional - Daily Dividend Reliance Money Manager Fund - Institutional - Daily Dividend Reliance Monthly Interval Fund - Series I Institutional Plan Reliance Monthly Interval Fund - Series II Institutional Plan Reliance Monthly Interval Fund Series II - Inst - Dividend Plan Religare Active Income Fund Inst - Monthly Dividend Religare Credit Opportunities Fund - Inst Monthly Dividend Religare Liquid Fund - Super Institutional Daily Dividend Religare Ultra Short Term Fund - Institutional Daily Dividend SBI SHF Ultra Short Term Fund - Institutional Daily Dividend TATA Fixed Income Portfolio Fund Scheme A3 Institutional Plan Tata Fixed Income Portfolio Fund Scheme B3 Institutional Quarterly Dividend TATA Floater Fund - Daily Dividend TATA Liquid Super High Invest Fund - Daily Dividend UTI Liquid Cash Plan Institutional - Daily Income Option - Reinvestment UTI Treasury Advantage Fund - Institutional Plan Daily Dividend Reinvestment HSBC Cash Fund - Institutional Plan - Daily Dividend HSBC Floating Rate Fund - Long Term Plan - Institutional - Weekly Dividend HSBC Ultra Short Term Bond Fund - Institutional Plan - Daily Dividend Birla Sun Life Short Term Fund - Institutional - Daily Dividend HDFC Liquid Fund - Daily Dividend ICICI Prudential Liquid Plan - Daily Dividend ICICI Prudential Flexible Income Plan Premium - Daily Dividend ICICI Prudential Liquid Plan - Daily Dividend IDFC Cash Fund - Super Institutional Plan C - Daily Dividend SBI Premier Liquid Fund - Institutional - Daily Dividend TATA Treasury Manager Ship - Daily Dividend
Units March 31, 2011 50,005 50,422 1,510,906 72,717,297 35,000,000 72,591,761 12,118,042 70,208 88,098 10,000,000 40,951,725 39,392,425 24,971,034 8,971,739 7,649,234 2,855,185 32,712,811 10,940,706 15,000,000 5,673,802 2,187,011 11,198,447 619,113 26,500,000 7,542,307 23,499,403 29,181 33,436,565 71,188,901 1,483,951 27,153,565 30,834,934 25,000,000 5,000,000 1,969,434 3,756,889 10,012,680 9,108,161 10,036,856 21,128,662 3,143,528 13,476,861 25,381,113 4,874,549 919,483 16,407,758 14,058,797 45,638,382 14,949,732 199,883 17,490,259 44,010,067 28,383,613 15,063,136 20,525,024 61,780,063 83,367 538,590 620,688 22,032,270 16,233,205 12,068,978 -
Units March 31,2010 123,757,882 154,030,601 91,471,644 91,772,468 60,513,900 8,334,804 5,911,004 3,475,872 9,998,500 8,351,695 35,110,752 37,411,934 108,914,648 7,997,521 56,419,662 2,049,832 33,478,574 23,562,223 57,602,068 497,972 18,007,490 13,348,402 9,326,178 38,980,147 23,494,971 30,030,105 5,388,814 47,988,003 64,789,434 22,781
Face Value (`) 1,000 1,000 10 10 10 10 10 10 10 10 10 10 10 10 10 12 10 106 10 100 10 10 10 10 10 10 10 10 10 10 12 12 10 10 10 10 10 11 10 10 11 15 10 17 1,001 10 10 10 10 10 10 10 10 10 10 10 1,115 1,019 1,000 10 11 10 10 11 10 11 100 10 10 1,003
Cost March 31, 2011 50,006 50,422 15,114 728,591 350,000 726,411 121,206 702 881 100,000 409,682 394,042 250,000 90,000 78,008 35,004 327,128 1,156,816 150,000 567,507 21,876 112,012 6,191 265,000 75,536 235,029 294 335,954 717,570 15,012 332,037 377,053 250,000 50,000 20,000 38,006 100,127 100,009 100,369 212,766 35,024 206,026 253,941 83,339 920,821 164,132 140,612 456,466 149,565 2,001 175,039 440,867 284,006 150,631 205,292 620,000 92,914 549,063 620,821 230,019 182,387 122,000 -
Cost March 31,2010 1,239,992 1,541,353 915,000 918,000 607,045 85,000 625,000 35,003 100,000 83,914 353,909 457,477 1,665,000 80,000 964,522 2,052,162 335,000 235,992 578,071 555,000 18,800 15,000 93,313 432,000 235,000 317,523 539,000 480,000 650,000 23,016
Biocon Limited
March 31, 2011
March 31, 2010
8. Inventories (at lower of cost and net realisable value)

Raw materials Goods-in-bond / goods-in-transit (Raw materials) Packing materials Work-in-progress Finished goods, including traded goods of ` 185,115 (March 31, 2010 - ` 75,124) 690,338 121,106 69,769 1,535,562 330,599 2,747,374 March 31, 2011 740,140 81,572 42,665 1,385,135 198,474 2,447,986 March 31, 2010
9. Sundry debtors (unsecured)

Debts outstanding for a period exceeding six months Considered good Considered doubtful Other debts Considered good Less: Provision for doubtful debts (a) Included in sundry debtors are dues from companies under the same management: i. Syngene ii. BBPL iii. AxiCorp iv. NeoBiocon 109,238 69,136 4,071,806 4,250,180 69,136 4,181,044 750 15,074 2,189 22,622 March 31, 2011 158,340 71,537 3,678,104 3,907,981 71,537 3,836,444 80,607 7,490 4,339 17,165 March 31, 2010 2,104 206,294 4,644 558,073 103 771,218
10. Cash and bank balances

Cash on hand Cheques on hand Balances with scheduled banks: In current accounts Restricted - Unpaid Dividend Accounts In exchange earners foreign currency account In fixed deposit accounts 1,283 129,810 7,709 5,276
1,707,939 250,303 2,102,320 (a) Balances with scheduled banks in current accounts include the balances of the ESOP Trust of ` 7,165 (March 31, 2010 - ` 188,786). (b) Fixed Deposts include margin money deposits against bank guarantees ` 303 (March 31, 2010 - ` 103). March 31, 2011
March 31, 2010
11. Loans and advances (Unsecured and considered good, unless otherwise stated)
Advances recoverable in cash or in kind or for value to be received Intercorporate loans to Subsidiaries / Joint Venture Company Other Receivables Duty drawback receivable, net of provision of ` 4,159 (March 31, 2010 - ` 3,797) Deposits Balances with Customs, Excise and Sales Tax Authorities Advance income-tax, net of provision 92,694 1,801,774 1,580,089 7,621 142,299 462,403 4,086,880 300,193 1,914,754 1,278,937 4,610 121,237 357,427 53,553 4,030,711
(a) Advances recoverable in cash or in kind or for value to be received include amounts due from employees to the ESOP Trust of ` 5,724 (March 31, 2010 - ` 5,724). (b) Included under advance tax is ` Nil (March 31, 2010 - ` Nil) and provision for taxation of ` 6,159 (March 31, 2010 - ` 17,403) of the ESOP Trust. (c) Included under intercorporate loans are amounts due from companies under the same management : Clinigene Maximum amount outstanding at any time during the year Biocon SA Maximum amount outstanding at any time during the year BBPL Maximum amount outstanding at any time during the year (d) Included under other receivables are amounts due from companies under the same management : (i) BBPL Maximum amount outstanding at any time during the year (ii) Syngene Maximum amount outstanding at any time during the year (iii) Biocon SA Maximum amount outstanding at any time during the year (iv) Biocon Research Maximum amount outstanding at any time during the year (v) Clinigene Maximum amount outstanding at any time during the year 231,667 288,720 227,417 1,430,396 1,342,690 1,342,690 5,937 105,229 68,574 88,298 261,699 1,440,712 1,440,712 19,842 19,842 288,720 293,785 1,367,775 1,616,762 258,259 970,375 727 1,200 68,574 207,008 220,105 220,105 976,199 1,221,567 -
March 31, 2011
March 31, 2010
12. Current liabilities and provisions

Current liabilities Sundry creditors Capital Others Advances from customers Deferred revenues Balance in current account with bank representing book overdraft Interest accrued but not due Investor Education and Protection Fund shall be credited by - Unclaimed dividend Other liabilities Provisions Interim dividend Proposed final dividend Tax on dividends Leave encashment Gratuity Superannuation Income tax, including Minimum Alternate Tax, net of advance tax 300,000 600,000 97,335 49,280 21,899 2,536 30,858 1,101,908 4,255,627 700,000 74,136 36,886 18,918 2,536 832,476 4,648,719 5,276 520,834 3,153,719 4,644 536,452 3,816,243 332,389 1,502,133 37,468 751,906 1,971 1,742 259,512 1,596,959 84,527 1,313,624 20,035 490
(a) Other liabilities include ` 670 (March 31, 2010 - ` 2,190) due to Ms Kiran Mazumdar Shaw, Managing Director and the maximum amount outstanding at any time during the year was ` 2,190 (March 31, 2010 - ` 3,700). (b) Disclosure required under Clause 22 of Micro, Small and Medium Enterprise Development Act, 2006 (MSMED Act) March 31, 2011 (i) Principal amount due Interest due thereon remaining unpaid as at the end of the year (ii) Interest, if any paid in terms of Section 16 of the MSMED Act, 2006 Amount of delayed payments actually made to the suppliers during the year (iii) Interest due and payable for the period of delay in making payment during the year (iv) Interest accrued and remaining unpaid at the end of the year (v) Interest remaining due and payable in succeeding years, in terms of Section 23 of the MSMED Act, 2006 51,789 1,018 432,959 10,004 5,011 5,011 March 31, 2010 38,948 3,728 157,944 3,288 3,992 3,992
The above disclosures are provided by the Company based on the information available with the Company in respect of the registration status of its vendors / suppliers. March 31, 2011 (c) Included under sundry creditors are dues to companies under the same management : Clinigene BBPL Syngene AxiCorp GmbH 11,339 12,662 4,450 262 51,529 83,237 46,907 287 March 31, 2010
March 31, 2011
March 31, 2010
13. Other income

Interest income from intercorporate loans and others [gross of tax deducted at source - ` 3,976 (March 31, 2010 - ` 9,655)] Dividend earned On Current investments (non trade) Gain on investments sold, net Miscellaneous income (including cross charge to subsidiaries) 39,757 167,114 59 398,786 605,716 88,315 98,604 471,408 658,327
Biocon Limited
March 31, 2011
March 31, 2010
14. Manufacturing, contract research and other expenses

Raw materials and packing materials consumed, net of duty drawback of ` 8,478 (March 31, 2010 - ` 2,529) Purchase of goods for resale Employee costs Salaries, wages and bonus Groups contribution to provident fund Gratuity and leave encashment Employee stock compensation expense Directors fees including commission Welfare expenses Operation and other expenses: Royalty and technical fees** Rent Communication expenses Travelling and conveyance Professional charges Power and fuel Insurance Rates, taxes and fees, net of refunds of taxes Lab consumables Repairs and maintenance* Plant and machinery Buildings Others Selling expenses Freight outwards and clearing charges Sales promotion expenses Commission and brokerage (other than sole selling agents)** Excise duty on closing stock*** Bad debts written off Provision for bad and doubtful debts Foreign Exchange fluctuation, net Printing and stationery Loss on sale of assets, net Research and development expenses Miscellaneous expenses Recharge of product development expenses to other parties for Co-Development of Product (Increase)/decrease in inventories of finished goods and work-in-progress: Opening inventories: Finished goods, net of excise duty Work-in-progress Closing inventories: Finished goods, net of excise duty Work-in-progress (323,431) (1,535,562) (1,858,993) (278,385) 9,824,660 *Includes spare parts of ` 126,334 (March 31, 2010 - ` 91,060) of which ` 95,857 (March 31, 2010 - ` 65,252) were purchased indigenously. **Royalty & technical fees and Commission and Brokerage on sales are net of write back of provision no longer required of ` 25,342 (March 31, 2010 ` Nil) and ` 29,704 (March 31, 2010 ` Nil), respectively. *** Excise Duty on Sales amounting to ` 393,724 (March 31, 2010 - ` 300,281) has been reduced from sales in profit and loss account and excise duty on increase/decrease in stock amounting to ` 4,167 (March 31, 2010 - ` 1,239) has been considered as (income)/expense in Schedule 14. (195,473) (1,385,135) (1,580,608) (389,519) 8,709,669 195,473 1,385,135 1,580,608 147,077 1,044,012 1,191,089 126,036 344,315 94,142 (4,167) 9,860 (2,401) (262,377) 26,955 3,032 448,586 67,078 10,908,206 (805,161) 10,103,045 79,933 236,164 85,636 (1,239) 1,656 15,306 33,179 13,987 28,282 594,520 70,440 9,654,457 (555,269) 9,099,188 171,305 14,262 149,119 109,924 21,002 149,985 (8,382) 22,698 54,436 237,983 148,242 816,291 16,778 36,642 262,688 13,312 16,039 39,919 175,618 175,928 672,485 18,714 21,226 222,018 1,223,515 62,466 39,130 1,129 4,635 129,145 848,094 35,968 23,613 (1,800) 635 90,765 502,563 321,739 6,172,502 5,541,409
March 31, 2011
March 31, 2010
15. Research and development expenses

Research & Development Expenses (other than on equipments and buildings) Salaries, wages and bonus Employee stock compensation expense Lab consumables Travel and Conveyance Amortisation of intangible Assets Research and development expenses Professional charges Others Recharge of Research expenses for Co-Development Product 198,606 968 262,688 15,398 16,000 448,586 89,136 30,317 (724,609) 337,090 161,363 3,300 222,018 14,031 16,000 594,520 110,151 4,950 (501,502) 624,831
Research and development expenses aggregate to ` 520,217 (March 31, 2010 - ` 754,128) and include ` 150,475 (March 31, 2010 - ` 114,756) on research and development equipments and other assets (net of disposals) and ` 32,652 (March 31, 2010 - ` 14,541) on buildings and the remaining expenses incurred by the Company have been disclosed under the appropriate account heads. March 31, 2011 March 31, 2010
16. Interest and finance charges

Interest paid on : Packing credit, cash credit from banks Bank charges 10,113 13,665 23,778 11,755 8,155 19,910
Biocon Limited
Schedule 17: Notes to Accounts for the year ended March 31, 2011
(All amounts in Indian Rupees, US Dollars and Euro are in thousands, except share and per share data)
1. Background
Biocon Limited ('Biocon' or 'the Company'), was incorporated at Bangalore in 1978 for manufacture of biotechnology products. Syngene International Limited ('Syngene'), promoted by Dr Kiran Mazumdar Shaw, was incorporated at Bangalore in 1993. In March 2002, Biocon acquired 99.99 per cent of the equity shares of Syngene and, resultantly, Syngene became the subsidiary of Biocon. Clinigene International Limited ('Clinigene') was incorporated on August 4, 2000 at Bangalore and became a wholly owned subsidiary of Biocon on March 31, 2001. On January 10, 2008, Biocon entered into an agreement with Dr. B.R. Shetty to set up a joint venture company NeoBiocon FZ-LLC, incorporated in Dubai (NeoBiocon). The Company has also established Biocon Research Limited (BRL), a subsidiary of the Company to undertake research and development in novel and innovative drug initiatives. Effective April 30, 2008, Biocon acquired 71% equity interest in AxiCorp GmbH, Germany (AxiCorp) through its newly incorporated wholly owned subsidiary company Biocon SA, Switzerland. In February 2009, Biocon SA acquired an additional 7.4% equity interest in AxiCorp. Also, refer note 5 of Schedule 17. Biocon entered into an agreement with CIMAB SA (CIMAB) to set up a Joint Venture Company Biocon Biopharmaceuticals Private Limited (BBPL) to manufacture and market products and carry out research activities. BBPL was incorporated on June 17, 2002 with Biocon holding 51 per cent of share capital. In April 2010, Biocon SA acquired the 49% equity stake held by CIMAB SA in BBPL. In March 2011, Biocon purchased the 49% equity stake in BBPL from Biocon SA. Consequently, as at March 31, 2011 all the equity shares of BBPL are held by Biocon. Biocon is an integrated healthcare company engaged in manufacture of biotechnology products for the pharmaceutical sector. The Company is also engaged in research and development in the biotechnology sector. During the year ended March 31, 2007, the Company had received an approval as the developer as Biocon SEZ at the Biocon Park facility and also received an approval for SEZ unit to be located within Biocon SEZ.
2. Statement of significant accounting policies

a. (i) Basis of preparation The financial statements have been prepared to comply in all material respects with the Accounting Standards, notified by the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention except in case of assets for which provision for impairment is made and revaluation is carried out, on an accrual basis. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in accounting policy hitherto in use. For the purpose of administration of the employee stock option plans of the Company, the Company has established the Biocon India Limited Employee Welfare Trust (ESOP Trust). In accordance with the guidelines framed by the Securities and Exchange Board of India (SEBI), financial statements of the Company have been prepared as if the Company itself is administering the ESOP Scheme. (ii) Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon managements best knowledge of current events and actions, actual results could differ from these estimates. b. Fixed assets and depreciation
Fixed assets are stated at cost, except for revalued freehold land and buildings, which are shown at estimated replacement cost as determined by valuers less impairment loss, if any, and accumulated depreciation. The Company capitalises all costs relating to the acquisition and installation of fixed assets. Assets partly funded by third parties are capitalised at gross value and the funds so received are recorded as deferred revenue and amortised over the useful life of the assets. Fixed assets, other than freehold land, but including revalued buildings, are depreciated pro rata to the period of use, on the straight line method at the annual rates based on the estimated useful lives, or at the rates prescribed under schedule XIV of the Companies Act, 1956 whichever is higher as follows:
Nature of Asset Buildings Plant and machinery (including Computers) Research and development equipment Furniture and fixtures Vehicles Per cent 4.00 9.09 - 33.33 11.11 16.67 16.67
Leasehold land on a lease-cum-sale basis are capitalised at the allotment rates charged by the Municipal Authorities. Leasehold improvements are being depreciated over the lease term or useful life whichever is lower. Used assets acquired from third parties are depreciated on a straight line basis over their remaining useful life of such assets. The depreciation charge over and above the depreciation calculated on the original cost of the revalued assets is transferred from the revaluation reserve to the profit and loss account. Assets individually costing less than ` 5 are fully depreciated in the year of purchase.
c. Impairment of assets The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life. A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.
d.
Intangible assets
Intellectual Property rights/marketing rights Costs relating to intellectual property/marketing rights are capitalised and amortised on a straight-line basis over the period of expected future sales from the use of the said intangible asset, i.e. over their estimated useful lives not exceeding ten years. Computer Software Software which is not an integral part of the related hardware is classified as an intangible asset and is being amortised over a period of three - five years, being its estimated useful life. Research and Development Costs Research and development costs, including technical know-how fees, incurred for development of products are expensed as incurred, except for development costs which relate to the design and testing of new or improved materials, products or processes or for existing products in new territories which are recognised as an intangible asset to the extent that it is expected that such assets will generate future economic benefits. Research and development expenditure of a capital nature is added to fixed assets. Development costs carried forward is amortised on a straight line basis, over the period of expected future sales from the related project, not exceeding ten years. The carrying value of intellectual property/marketing rights and development costs is reviewed for impairment annually when the asset is not yet in use, and otherwise when events or changes in circumstances indicate that the carrying value may not be recoverable.
e.
Inventories
Inventories are valued as follows: Raw materials and packing materials Lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a first-in-first-out basis. Customs duty on imported raw materials (excluding stocks in the bonded warehouse) is treated as part of the cost of the inventories. Lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty. Lower of cost and net realizable value. Cost includes the purchase price and other associated costs directly incurred in bringing the inventory to its present location.
Work-in-progress and finished goods Traded goods
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.
f.
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. (i) Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and are recorded net of excise duty, sales tax and other levies. For the purposes of disclosure in these financial statements, sales are reflected gross and net of excise duty in the profit and loss account. (ii) The Company enters into certain dossier sales, licensing and supply agreements relating to various products. Revenue from such arrangements is recognised upon completion of performance obligations or on a proportional performance basis over the period the
Biocon Limited
Company performs its obligations, under the terms of the agreements. Proportionate performance is measured based upon the efforts incurred to date in relation to the total estimated efforts to complete the contract. The Company monitors estimates of the total contract revenue and cost on a routine basis throughout the contract period. The cumulative impact of any change in estimates of the contract revenue or costs is reflected in the period in which the changes become known. In the event that the loss is anticipated on a particular contract, provision is made for the estimated loss. (iii) Interest income is recognised on an accrual basis. Dividends are accounted for when the right to receive the payment is established.
g. Investments Investments that are readily realisable and intended to be held for not more than twelve months are classified as current investments. All other investments are classified as long-term investments. Long-term investments are stated at cost. However, provision for diminution in value is made to recognise a decline other than temporary in the value of the investments. Current investments are carried at lower of cost and fair value and determined on an individual investment basis.
h. Retirement benefits (i) Retirement benefit in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the government funds are due. (ii) Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. The gratuity benefit of the Company is administered by a trust formed for this purpose through the group gratuity scheme. (iii) Short-term compensated absences are provided for based on estimates. Long-term compensated absences are provided for based on actuarial valuation made at the end of each financial year. The actuarial valuation is done as per projected unit credit method made at the end of each financial year. (iv) Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.
i.
Foreign currency transactions
Initial Recognition Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
Conversion Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.
Exchange Differences Exchange differences arising on a monetary item that, in substance, form part of the Company's net investment in a non-integral foreign operation is accumulated in a foreign currency translation reserve in the financial statements until the disposal of the net investment, at which time they are recognised as income or as expenses. Exchange differences, in respect of accounting periods commencing on or after December 7, 2006, arising on reporting of long-term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition of a depreciable capital asset, are added to or deducted from the cost of the asset and are depreciated over the balance life of the asset, and in other cases, are accumulated in a Foreign Currency Monetary Item Translation Difference Account in the financial statements and amortized over the balance period of such long-term asset/liability but not beyond accounting period ending on or before March 31, 2011. Exchange differences arising on the settlement of monetary items not covered above, or on reporting such monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses in the year in which they arise.
Forward Exchange Contracts not intended for trading or speculation purposes The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognised as income or as expense on the date of such cancellation/renewal. However, exchange difference in respect of accounting period commencing on or after December 7, 2006 arising on the forward exchange contract undertaken to hedge the long term foreign currency monetary item, in so far as they
relate to the acquisition of depreciable capital asset, are added to or deducted from the cost of asset and in other cases, are accumulated in Foreign Currency Monetary Item Translation Difference Account and amortised over the balance period of such long-term asset / liability but not beyond March 31, 2011.
j. Income tax Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act 1961. Deferred income taxes reflects the impact of current period timing differences between taxable income and accounting income for the year net of reversals of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits. At each balance sheet date the Company re-assesses unrecognised deferred tax assets. It recognises unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realised. The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available. Minimum Alternative Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in the Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period.
k. Borrowing costs Borrowing costs that are attributable to the acquisition and construction of a qualifying asset are capitalised as a part of the cost of the asset. Other borrowing costs are recognised as an expense in the year in which they are incurred.
l. Employee stock compensation costs Measurement and disclosure of the employee share-based payment plans is done in accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on Accounting for Employee Share-based Payments, issued by the Institute of Chartered Accountants of India. The Company measures compensation cost relating to employee stock options using the intrinsic value method. Compensation expense is amortized over the vesting period of the option on a straight line basis.
m. Earnings per share (EPS) Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting year. The weighted average number of equity shares outstanding during the year is adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares). For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
n. Operating lease Where the Company is a Lessee Leases of assets under which all the risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under operating leases are recognised as an expense on a straight-line basis over the lease term.
Where the Company is a Lessor Assets subject to operating leases are included in fixed assets. Lease income is recognised on a straight-line basis over the lease term. Costs, including depreciation are recognised as an expense. Initial direct costs such as legal costs, brokerage costs, etc are recognised immediately.
Biocon Limited
o. Segment reporting Identification of segments The Companys operating businesses are organised and managed separately according to the nature of products manufactured/traded, with each segment representing a strategic business unit that offers different products to different markets. The analysis of geographical segments is based on the areas in which the Company's products are sold. Inter-segment Transfers The Company generally accounts for inter-segment sales and transfers at an agreed marked-up price. Allocation of common costs Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs. Unallocated items The Corporate and other segment include general corporate income and expense items which are not allocated to any business segment. Segment policies The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.
p. Provisions A provision is recognised when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
q. Expenditure on new projects and substantial expansion Expenditure directly relating to construction activity is capitalised. Indirect expenditure incurred during construction period is capitalised as part of the indirect construction cost to the extent to which the expenditure is directly related to construction or is incidental thereto. Other indirect expenditure (including borrowing costs) incurred during the construction period which is not related to the construction activity nor is incidental thereto is charged to the Profit and Loss Account. Income earned during construction period is deducted from the total of the indirect expenditure. All direct capital expenditure on expansion is capitalised. As regards indirect expenditure on expansion, only that portion is capitalised which represents the marginal increase in such expenditure involved as a result of capital expansion. Both direct and indirect expenditure are capitalised only if they increase the value of the asset beyond its original standard of performance.
r. Cash and Cash Equivalents Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.
s. Derivative Instruments As per the ICAI Announcement, accounting for derivative contracts, other than those covered under AS-11, are marked to market on a portfolio basis, and the net loss after considering the offsetting effect on the underlying hedge item is charged to the profit and loss account. Net gains are ignored.
3. Employee stock compensation

On September 27, 2001, Biocons Board of Directors approved the Biocon Employee Stock Option Plan (ESOP Plan 2000) for the grant of stock options to the employees of the Company and its subsidiaries/joint venture company. A Compensation Committee has been constituted to administer the plan through a trust established specifically for this purpose, called the Biocon India Limited Employee Welfare Trust (ESOP Trust). The ESOP Trust shall make additional purchase of equity shares of the Company using the proceeds from the loan obtained from the Company, other cash inflows from allotment of shares to employees under the ESOP Plan and shall subscribe, when allotted to such number of shares as is necessary for transferring to the employees. The ESOP Trust may also receive shares from the promoters for the purpose of issuance to the employees under the ESOP Plan. The Compensation Committee shall determine the exercise price which will not be less than the face value of the shares. Grant I In September 2001, the Company granted 71,510 options under the ESOP Plan 2000 to be exercised at a grant price of ` 10 (before adjusting bonus and share split). The options vested with the employees equally over a four year period.
Grant II In January 2004, the Company granted 142,100 options (shares of ` 5 each) under ESOP Plan 2000 to be exercised at a price of ` 5 per share. The options vest with the employees equally over a four year period. Details of Grant II Particulars March 31, 2011 No of Options Outstanding at the beginning of the year Granted during the year Forfeited during the year Exercised during the year Expired during the year Outstanding at the end of the year Exercisable at the end of the year Weighted average remaining contractual life (in years) *adjusted for the effect of bonus shares Grant III In January 2004, the Board of Directors announced the Biocon Employee Stock Option Plan (ESOP Plan 2004) for the grant of stock options to the employees of the Company and its subsidiaries / joint venture company, pursuant to which the Compensation Committee on March 19, 2004 granted 422,000 options (face value of shares - ` 5 each) under the ESOP Plan 2004 to be exercised at a grant price of ` 315 being the issue price determined for the IPO through the book building process. The options vest with the employees equally over a four year period. Details of Grant III Particulars March 31, 2011 No of Options * Outstanding at the beginning of the year Granted during the year Forfeited during the year Exercised during the year Expired during the year Outstanding at the end of the year Exercisable at the end of the year Weighted average remaining contractual life (in years) *adjusted for the effect of bonus shares Grant IV In July 2006, the Company approved the grant of 3,478,200 options (face value of shares - ` 5 each) to its employees under the existing ESOP Plan 2000. The options under this grant would vest to the employees as 25%, 35% and 40% of the total grant at the end of first, second, third year from from the date of the grant, respectively, with an exercise period of three years for each grant. The vesting conditions include service terms and performance grade of the employees. These options are exercisable at a discount of 20% to the market price of Companys shares on the date of grant. Details of Grant IV Particulars March 31, 2011 No. of Options* Outstanding at the beginning of the year Granted during the year Forfeited during the year Exercised during the year Expired during the year Outstanding at the end of the year Exercisable at the end of the year Weighted average remaining contractual life (in years) *adjusted for the effect of bonus shares. Grant V In April 2008, the Company approved the grant of 813,860 options (face value of shares - ` 5 each) to its employees under the existing ESOP Plan 2000. The options under this grant would vest to the employees as 25%, 35% and 40% of the total grant at the end of first, second, third year from the date of grant, respectively, with an exercise period of three years for each grant. The vesting conditions include service terms and performance grade of the employees. These options are exercisable at the market price of Companys shares on the date of grant. 3,030,129 3,066 1,436,537 1,590,526 1,343,115 1.5 Weighted Average Exercise Price (` )* 150 139 139 160.0 157.8 March 31, 2010 No. of Options* 5,224,178 741,548 1,452,500 3,030,129 1,388,545 2.3 Weighted Average Exercise Price (` )* 147.0 153.0 137.5 150.0 137.5 17,700 6,250 11,450 Weighted Average Exercise Price (` )* 157.5 157.5 157.5 March 31, 2010 No of Options * 112,950 95,250 17,700 17,700 1 Weighted Average Exercise Price (` )* 157.5 157.5 157.5 157.5 Weighted Average Exercise Price (` ) March 31, 2010 No of Options * 7,840 1,960 5,880 Weighted Average Exercise Price (` )* 2.5 2.5 2.5 -
Biocon Limited
Details of Grant V Particulars March 31, 2011 No. of Options* Outstanding at the beginning of the year Granted during the year Forfeited during the year Exercised during the year Expired during the year Outstanding at the end of the year Exercisable at the end of the year Weighted average remaining contractual life (in years) Weighted average fair value of options granted (` ) *adjusted for the effect of bonus shares. The average market price of the Companys share during the year ended March 31, 2011 is ` 347 (March 31, 2010 ` 237) per share (after adjustment for the bonus shares) Assumptions used in determination of the fair value of the stock options under the Black Scholes Model are as follows: Particulars Weighted Average Remaining Contractual Life in options (Years) Weighted Average Exercise Price* Expected volatility Historical volatility Life of the options granted (vesting and exercise period) in years Expected dividends per share Average risk-free interest rate Expected dividend rate *adjusted for the effect of bonus shares. Since the Company uses the intrinsic value method for determination of the employee stock compensation expense, the impact on the reported net profit and earnings per share under the fair value approach is as given below: Particulars Net Profit after taxes Add: Employee stock compensation under intrinsic value Less: Employee stock compensation under fair value Proforma profit Earnings per Share - Basic - As reported - Proforma Earnings per Share - Diluted - As reported - Proforma A summary of movement in respect of the shares held by the ESOP Trust is as follows: Particulars Opening balance of equity shares not exercised by employees and available with the ESOP Trust Add: Shares purchased by the ESOP trust Less: Shares exercised by employees Closing balance of shares not exercised by employees and available with the ESOP Trust Options granted and eligible for exercise at end of the year Options granted but not eligible for exercise at end of the year March 31, 2011 5,509,323 391,000 (1,442,787) 4,457,536 1,343,115 482,839 March 31, 2010 7,055,168 3,865 (1,549,710) 5,509,323 1,406,245 1,729,779 23.27 23.22 12.57 12.58 23.49 23.44 12.77 12.78 March 31, 2011 4,592,495 1,129 10,185 4,583,439 March 31, 2010 2,483,570 (1,800) (3,903) 2,485,673 March 31, 2011 5.1 265.0 39.05% 35.59% 7.2 4.50 8.00% 1.30% March 31, 2010 6.0 170.9 37.62% 34.29% 7.2 3.50 7.80% 1.23% 235,428 5.1 88,195 147,233 Weighted Average Exercise Price (` )* 171 321 265.0 129.0 March 31, 2010 No. of Options* 69,710 63,460 44,975 88,195 6.0 Weighted Average Exercise Price (` )* 231.5 151.5 235.7 170.9 130.0
4. Reconciliation of basic and diluted shares used in computing earnings per share
March 31, 2011 Basic outstanding shares Less: Shares with the ESOP Trust Add: Effect of dilutive options granted but not exercised/not eligible for exercise Weighted average shares outstanding and potential options outstanding 200,000,000 4,457,536 195,542,464 1,825,954 197,368,418 March 31, 2010 200,000,000 5,509,323 194,490,677 3,136,024 197,626,701
5. Subsequent event
Consequent to an offer made by the minority shareholders of AxiCorp, on April 28, 2011 the Board of Directors of the Company accorded their in-principle approval for the sale of all the shares held by Biocon SA, Switzerland (Biocon SA) in AxiCorp to such group of shareholders. The consideration would be settled through a combination of cash and re-acquisition of the exclusive marketing rights of Insulin and Glargine for the German market.
6. Related party transactions

Description April 1, 2010 to March 31, 2011 Income/(expenses) (14,408) (7,291) 243,103 4,300 (20,500) 20,766 360 (162,484) (95,312) 19,728 1,362 (5,828) 1,363 44,344 536 1,200 3,910 2,332 (38,740) 32,275 (6,774) (139,554) 105,229 (2,135) 42,300 750 (4,450) 217,500 (465,000) 19,842 (11,339) 231,667 150,000 27,205 (8,072) 233,256 3,309 20,032 1,919 15,163 (118,877) (110,569) 1,872 (3,355) 42,609 40,986 488 1,200 11,881 1,670 (52,376) (223,940) (7,598) (134,993) (670) (14,140) Balance as at March 31, 2011 (Payable)/receivable April 1, 2009 to March 31, 2010 Income/(expenses) Balance as at March 31, 2010 (Payable)/receivable (2,190) (2,135) 42,300 80,607 68,574 (46,907) 217,500 (465,000) (51,529) 288,720 27,205 -
Sl. No.
Name of the related party
Relationship
1 Other liabilities Salary and perquisites Power and facility charges recovered Rent income Purchase of fixed asset Expenses incurred on behalf of the related party Sale of goods Sale of fixed asset Research services received Rent deposit received Advance given Sundry debtors Other receivables Sundry creditors Guarantee given on behalf of related party to Custom & Excise Department (CED) Guarantee given by related party to CED on behalf of the Company Research services received Sale of fixed assets Expenses incurred on behalf of the related party Welfare expenses - health checkup Other receivables Sundry creditors Unsecured loan given, net Guarantee given to bank on behalf of related party for loan facility Guarantee given on behalf of related party to CED Interest income on unsecured loan given Power and facility charges recovered Rent income Management charges received Vialling charges recovered Expenses incurred on behalf of the related party Research and development expenses Repairs and maintenance - facility charges Sale of consumables Professional charges - personnel deputation charges Purchase of materials Sale of fixed assets
Kiran Mazumdar Shaw
Managing Director
Salary and perquisites
John Shaw
Director
Syngene
Subsidiary
Clinigene
Subsidiary
BBPL
Subsidiary
(Also see Note (i) below)
Sl. No. Unsecured loan given, net Sundry debtors Other receivables Sundry creditors Rent deposit received Guarantee given on behalf of related party to CED Guarantee given to bank on behalf of related party for term loan Rent income Sale of intangible asset Research and development cross charge Product development expenses cross charge Expenses incurred on behalf of the related party Other receivable Interest income Licensing and development fees Expenses incurred on behalf of the related party Unsecured loan Purchase of 49% stake in BBPL Other receivable Purchase of lab consumables Expenses incurred on behalf of the related party Sundry debtors Sundry creditors Sale of goods Expenses incurred on behalf of the related party Sundry debtors Research and development expenses Investment in preferred stock Rent expenses paid (1,530) 16,522 27,936 110 (44,700) (2,196) (121,552) 1,129,336 6,948 1,358,298 33,234 22,579 1,440,712 227,417 88,298 2,189 (262) 22,622 138,470 (915) 751,536 139,350 1,046 131,352 (590) 801 1,153,760 501,502 53,767 48,132 44,204 (8,045) 2,266 15,247 (30,058) (2,369) (12,662) 5,937 15,074 1,342,690 -
Name of the related party
Relationship
Description
April 1, 2010 to March 31, 2011 Income/(expenses)
Balance as at March 31, 2011 (Payable)/receivable
April 1, 2009 to March 31, 2010 Income/(expenses)
Balance as at March 31, 2010 (Payable)/receivable 258,259 7,490 727 (83,237) (590) 131,352 650,000 976,199 1,367,775 220,105 4,339 (287) 17,165 138,470 -
BRL
Subsidiary
Biocon SA
Subsidiary
AxiCorp GmbH
Subsidiary
NeoBiocon FZ LLC
50% Joint Venture
10
IATRICa Inc.
Associate
11
Glentec International
Enterprise owned by key management personnel Rent expenses paid
12
P K Associates
Proprietary firm of relative of Director
(396)
(380)
(a) During the year ended March 31, 2009, the Company had transferred development and marketing rights to Biocon SA for certain products for the European region at a consideration of ` 350,559 (Euro 5.5 million) and during the year ended March 31, 2011, the Company has transferred additional development and marketing rights for various other regions for ` 944,001 (USD 22 million). Further during the year ended March 31, 2009, the Company had transferred global development rights to Biocon SA for a product amounting to ` 63,738 (Euro 1 million). (b) During the year ended March 31, 2010, the Company has transferred certain development and marketing rights to BRL for Oral Insulin and certain products for certain territories at a consideration of ` 673,260 (US$ 14 million) and ` 480,500 (US$ 10 million) respectively. Also refer Schedule 6(ii). (c) During the year ended March 31, 2011, the Company has transferred certain development and marketing rights to BRL for Peg GCSF at a consideration of ` 139,350 (USD 3 Million). (d) Expenses incurred on behalf of the related party include recharge of software license fees, canteen expenses, and employee stock compensation charges. (e) The Company has granted an unsecured loan facility to BBPL to support BBPLs operational costs and capital expenditure. As at March 31, 2011, the loan does not carry any interest and is repayable by March 31, 2013. (f) The Company has granted an interest free unsecured loan facility to Clinigene, to support its operations. The said facility is repayable by March 31, 2013. (g) The Company has granted an unsecured loan denominated in Euros to Biocon SA to support its operational and development expenses. The said loan is repayable on demand and carries an interest rate of 3% per annum. (h) Effective October 1, 2006, the Companys SEZ Developer Division has entered into service contracts with SEZ unit of BBPL and SEZ unit of Syngene for provision of certain facilities and services. (i) In March, 2011, the Company has acquired the 49% stake in BBPL from Biocon SA for a consideration of ` 121,552, whereby BBPL has become a 100% subsidiary of the Company. Also refer Note 1 to Schedule 17.
Biocon Limited
7. Supplementary profit and loss data

(a) Payments to auditors (included in professional charges), excluding service tax i) Statutory audit (including limited review of quarterly results) ii) Tax audit iii) Other matters (certification and other services) iv) Reimbursement of out-of-pocket expenses (b) Managerial remuneration i) Remuneration to Managing Director Salary Perquisites Leave encashment Contribution to provident fund ii) Remuneration to whole-time Director Salary Perquisites iii) Remuneration/Fees to Independent Directors iv) Computation of net profits in accordance with Section 349 of the Companies Act, 1956 (the Act) Net profit for the year before tax Add: Depreciation/amortisation provided in the accounts Loss on sale of fixed asset Managerial remuneration Provision for bad and doubtful debts B Less: Depreciation/amortisation under Section 350 of the Act C Net Profit under Section 198 of the Act (A+B-C) Maximum remuneration payable to whole-time directors Remuneration paid to Managing Director Remuneration paid to whole time Director A
March 31, 2011
March 31, 2010
2,650 150 275 399 3,474
2,475 125 275 339 3,214
10,688 3,025 97 598 14,408 6,399 892 7,291 4,000
9,833 2,661 1,119 527 14,140 7,254 818 8,072 -
5,171,210 907,000 3,032 25,699 (2,400) 933,331 907,000 907,000 5,197,541 519,754 14,408 7,291
2,762,283 797,290 28,282 22,212 15,306 863,090 797,290 797,290 2,828,083 282,808 14,140 8,072
As the future liability for gratuity and leave encashment is provided on an actuarial basis for the Company as a whole, the amount pertaining to the directors is not ascertainable and, therefore, not included above. (c) Information pursuant to the provisions of paragraphs 3, 4C and 4D of Part II of Schedule VI of the Companies Act, 1956 (the Act): i) Licensed capacity, installed capacity and actual production : Class of goods Licensed capacity Installed capacity Kg. Kg. Biochemicals: Bio Pharmaceutical * ** 15,700,047 11,779,973 * Exempted from the licensing provisions of the Industries (Development and Regulation) Act, 1951 in terms of notification No. S.O.477(E) dated July 25, 1991. ** Installed capacity has not been disclosed as these are variable and subject to changes in product mix and utilisation of manufacturing facilities, given the nature of operations. Actual production March 31, 2011 Kg. March 31, 2010 Kg.
Biocon Limited
ii) Inventories and sales Description Opening Stock Quantity Kg. March 31, 2011 Biochemicals Manufacturing: Pharmaceutical Trading: Bio Pharmaceuticals 26,562,235 (Nos) 198,474 March 31, 2010 Biochemicals Manufacturing: Pharmaceutical Trading: Bio Pharmaceuticals 41,801,137 (Nos) 148,839 96,200 102,307,813 (Nos) 11,580,976 1,066,814 26,562,235 (Nos) 198,474 75,124 36,700 52,639 11,314,663 10,514,162 502,010 123,350 75,124 10,235 122,823,935 (Nos) 13,644,384 1,398,923 26,440 33,682,683 (Nos) 330,599 185,115 502,010 123,350 16,096,727 12,245,461 105,330 145,484 Value ` Sales Quantity Kg. Value ` Closing Stock Quantity Kg. Value `
iii) Purchase of traded goods: March 31, 2011 Quantity Bio Pharmaceuticals Units - Kgs Units - Nos 202,115 139,941,228 502,563 71,208 87,068,911 321,739 Value March 31, 2010 Quantity Value
Note: Closing stock quantities are after adjusting write off of items due to obsolescence, differences at the time of physical count etc. iv) Details of consumption of raw materials, packing materials and stores: March 31, 2011 Quantity (Kg) Bio Chemicals Packing materials 26,862,317 26,862,317 Amount 6,001,506 170,996 6,172,502 March 31, 2010 Quantity (Kg) 37,574,109 37,574,109 Amount 5,435,808 105,601 5,541,409
Consumption quantities and values have been derived on the basis of opening stock plus purchases less closing stock and therefore include adjustments ascertained during physical count, write off of obsolete items etc. March 31, 2011 Value Imported Indigenous 4,201,518 1,970,984 6,172,502 Percent 68 32 100 March 31, 2010 Value 3,499,678 2,041,731 5,541,409 Percent 63 37 100
March 31, 2011 (d) Value of imports calculated on C.I.F. basis: (on accrual basis) Raw materials Packing materials Maintenance spares Capital goods (e) Earnings in foreign currency: (on accrual basis) Export of goods on FOB basis Licensing and development fees Other income Interest on foreign currency loan given to subsidiary company (f) Dividend to non-resident shareholders: (remitted in foreign currency) Final dividend Number of shareholders Number of shares held Dividend remitted (` in thousands) Year to which it relates (g) Expenditure in foreign currency: (on accrual basis) Sales commission Interest on packing credit Travel and conveyance Professional charges Consumables Others 48,981 6,714 18,901 52,481 78,174 131,829 337,080 16 41,517,234 145,310 2010 5,243,403 1,658,269 33,234 6,934,906 3,821,639 45,249 30,477 502,097 4,399,462
March 31, 2010 3,823,858 30,784 25,808 208,571 4,089,021 4,828,653 136,093 48,090 44,204 5,057,040
16 41,599,142 125,932 2009 50,135 9,050 14,229 99,834 66,811 112,764 352,823
8. Commitments
March 31, 2011 (a) Capital commitments Estimated amount of contracts remaining to be executed on capital account and not provided for, net of advances. (b) Operating lease commitments Where the Company is a lessee: (i) Rent The Company has entered into various agreements for lease of building / office space which expires over a period upto October 2019. Some of these lease arrangements have price escalation clause. There are no restrictions imposed under the lease arrangements. Gross rental expenses for the year aggregates to ` 22,698. (March 31, 2010 - ` 16,039). The committed lease rentals in future are as follows: Not later than one year Later than one year and not later than five years Later than five years (ii) Vehicles The Company has taken vehicles for certain employees under operating leases, which expire in September 2014. Gross rental expenses for the year aggregate to ` 11,524 (March 31, 2010 ` 10,697). The committed lease rental in the future are: Not later than one year Later than one year and not later than five years Where the Company is a Lessor: (i) Rent The Company has leased out certain parts of its building (including fit outs), which expire over a period up to September 2017. Gross rental income for the year aggregate to ` 25,678 (March 31, 2010 - ` 25,403). Further, minimum lease receipts under operating lease are as follows: Not later than one year Later than one year and not later than five years Later than five years 28,367 112,069 78,539 24,790 89,832 50,760 10,596 13,751 13,010 22,699 21,570 34,314 9,136 11,313 22,486 13,048 405,066 947,617 March 31, 2010
Biocon Limited
March 31, 2011
March 31, 2010
9. Contingent liabilities
(a) Taxation matters under appeal (Direct and Indirect taxes) (b) (i) Corporate guarantees given in favour of the Central Excise Department (CED) in respect of certain performance obligations of Syngene. Syngene has informed that necessary terms and conditions have been complied with and no liabilities have arisen. (ii) Corporate guarantee given by Syngene in favour of the CED in respect of certain performance obligations of Biocon. (c) Corporate guarantees given in favour of the CED in respect of certain performance obligations of BBPL. BBPL has informed that the necessary terms and conditions have been complied with and no liabilities have arisen. (d) Corporate guarantees given in favour of the CED in respect of certain performance obligations of Clinigene. Clinigene has informed that the necessary terms and conditions have been complied with and no liabilities have arisen. (e) Corporate guarantees given in favour of the State Bank of India (SBI), towards Term loan granted to BBPL. BBPL has informed that the necessary terms and conditions have been complied with and no liabilities have arisen. (f) Corporate guarantees given in favour of the State Bank of India (SBI), towards Term loan granted to Clinigene. Clinigene has informed that the necessary terms and conditions have been complied with and no liabilities have arisen. (g) Corporate guarantees given in favour of the HDFC Bank Ltd., towards Packing Credit granted to Clinigene. Clinigene has informed that the necessary terms and conditions have been complied with and no liabilities have arisen. (h) Corporate guarantees given in favour of the HDFC Bank Ltd., towards Short Term Demand Loan granted to Clinigene. Clinigene has informed that the necessary terms and conditions have been complied with and no liabilities have arisen. (i) Certain claims made against the Company which the management of the Company believes are not tenable and hence, these claims have not been acknowledged as debts. 236,069 217,500 157,664 217,500
465,000 131,352
465,000 131,352
27,205
27,205
650,000
14,270
56,769
10,000
21,026
10. Foreign exchange forward contracts and unhedged foreign currency exposures
The Company has entered into foreign exchange forward and option contracts to hedge highly probable forecasted transactions in foreign currency. As at March 31, 2011 and 2010, the Company had the following outstanding contracts: March 31, 2011 In respect of foreign currency loans taken and granted: Foreign exchange forward contracts to buy Foreign exchange forward contracts to sell (Euro to USD) Foreign exchange forward contracts to sell (USD to INR) In respect of highly probable forecasted sales/export collection: European style option contracts with periodical maturity dates up to August 2011 The unhedged foreign currency exposure as at the Balance Sheet date is as given below: Sundry debtors Other receivables Exchange earners foreign currency account Loan to subsidiary Sundry creditors Packing credit 1,373,963 98,298 1,707,939 227,412 774,750 890,800 755,201 230,938 558,073 152,000 869,092 USD 11,000 USD 59,000 Nil Nil Nil USD 16,000 EURO 20,000 USD 30,000 March 31, 2010
11. Employee Benefit Plans

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. A summary of the gratuity plan is as follows: March 31, 2011 Fund balance Defined benefit obligation Fair value of plan assets Plan Liability The change in benefit obligation and funded status of the gratuity plan is as follows: Change in benefit obligation Benefit obligation at the beginning of the year Current service cost Past service cost Interest cost Benefits paid Actuarial (gain)/loss Benefit obligation at the end of the year Change in fair value of plan assets Fair value of plan assets at beginning of the year Expected return on plan assets Actuarial gain/(loss) Actual contribution Benefits paid Fair value of plan assets at end of the year Net gratuity cost: Components of net benefit cost Current service cost Past service cost Interest cost Expected return on plan assets Net actuarial (gain)/loss recognised during the year Net gratuity cost Actual return on plan assets Experience adjustment March 31, 2011 Defined benefit obligation Plan assets Surplus/(Deficit) Experience adjustments on plan liabilities gain/(loss) Experience adjustments on plan assets gain/(loss) The assumptions used for gratuity valuation are as below: March 31,2011 Interest rate Discount rate Expected return on plan assets Salary increase Attrition rate up to age 44 Attrition rate above age 44 Retirement age - Years 8.00% 8.00% 8.50% 9.00% 25.00% 10.00% 58 March 31,2010 7.50% 7.50% 8.50% 8.00% 25.00% 14.00% 58 97,785 75,887 (21,898) (13,261) (1,265) March 31, 2010 75,957 57,039 (18,918) (3,195) 371 March 31, 2009 64,109 54,456 (9,653) (256) 2,770 March 31, 2008 49,081 48,440 (641) -* -* March 31, 2007 58,412 59,951 1,539 -* -* 7,437 5,697 (4,848) 13,613 21,899 3,583 10,090 4,488 (4,274) (1,039) 9,265 4,644 57,039 4,848 (1,266) 18,918 (3,653) 75,886 54,456 4,274 371 (2,062) 57,039 75,957 7,437 5,697 (3,653) 12,347 97,785 64,109 10,090 4,488 (2,062) (668) 75,957 97,785 75,886 21,899 75,957 57,039 18,918 March 31, 2010
*Experience adjustment Information is available with the Company from March 31, 2009.
The Company evaluates these assumptions based on its long-term plans of growth and industry standards and the expected contribution to the fund during the year ending March 31, 2012, is approximately ` 26,278 (March 31, 2011 - ` 11,118) The nature of allocation of the fund is only in debt based mutual funds of high credit rating.
Biocon Limited
12. Segmental information

Business segments The primary reporting of the Company has been performed on the basis of business segment. The Company operates in a single business segment of Pharmaceuticals. Accordingly no additional disclosures are required as per Accounting Standard 17 on Segment Reporting. Geographical segments Secondary segmental reporting is performed on the basis of the geographical location of customers. The management views the Indian market and export markets as distinct geographical segments. The following is the distribution of the Companys sale by geographical markets Revenues, net India Exports Total The following is the carrying amount of segment assets by geographical area in which the assets are located: Carrying amount of segment assets March 31, 2011 India* Outside India *All fixed assets and intangibles are located in India. 23,263,810 2,541,812 25,805,622 March 31, 2010 19,053,340 3,586,716 22,640,056 April 1, 2010 to March 31, 2011 8,413,951 6,901,672 15,315,623 April 1, 2009 to March 31, 2010 6,666,079 4,964,746 11,630,825
13. Other Notes

(a) The Company has entered into transactions of sale of products to a private company amounting to ` 2,980, during the year ended March 31, 2011 (March 31, 2010 - ` 1,812), that require prior approval from Central Government under Section 297 of the Companies Act, 1956. These transactions, entered into at prevailing market prices have been approved by the Board of Directors of the Company. The Company has filed an application with the Central Government for such approval and for condonation of delay in making such application. (b) In terms of Section 115O (6) of the Income Tax Act, 1961, the Company has not provided for Dividend Distribution Tax on final dividend distributed for the year ended March 31, 2010 and for the interim dividend declared and final proposed dividend for the year ended March 31, 2011 to the extent such distributable profits pertain to the profits of the Companys SEZ Developers operations under Section 10AA of Income tax Act, 1961.
14. Prior years comparatives

The previous years figures have been re-grouped, where necessary to conform to current years classification.
John Shaw Director
Balance sheet abstract and Companys general business profile

(All amounts in thousands of Rupees) (a) Registration Details Registration No. State Code Balance Sheet Date (b) Capital raised during the year Public Issue Right Issue Bonus Issue Private Placement (c) Position of Mobilisation and Deployment of Funds Total Liabilities and shareholders funds Total Assets Sources of Funds Paid up Capital Reserves Secured Loans Unsecured Loans Deferred tax liability Application of Funds Net Fixed Assets Capital work in progress Intangible Assets Investments Net Current Assets (d) Performance of the Company Turnover Total expenditure Profit before tax Profit after tax Earnings per share in Rupees Dividend rate % (e) Generic Name of principal products of the Company Item Code No.(ITC Code) Product Description 280000 & 290000 Organic & Inorganic Chemicals 15,921,339 9,848,438 5,171,210 4,592,495 23.49 90 6,662,376 1,032,909 134,490 4,858,229 8,861,991 1,000,000 18,468,091 740,643 945,743 395,518 25,805,622 25,805,622 Nil Nil Nil Nil 3417 08 March 31, 2011
For and on behalf of the Board of Directors of Biocon Limited
John Shaw Director
Bangalore April 28, 2011
Biocon Limited & Subsidiaries - IGAAP
Auditors Report
To the Board of Directors of Biocon Limited We have audited the attached consolidated balance sheet of Biocon Limited (the Company) and its subsidiaries, associate and joint venture [together referred to as the Group], as at March 31, 2011, and also the consolidated profit and loss account and the consolidated cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management and have been prepared by the management on the basis of separate financial statements and other financial information regarding components. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the 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. We believe that our audit provides a reasonable basis for our opinion. We did not audit the financial statements of a subsidiary, whose financial statements reflect total assets of Rs 5,461 million as at March 31, 2011, total revenue of Rs 732 million and net cash inflows amounting to Rs 1,359million for the year then ended. We did not audit the financial statements of another subsidiary, whose financial statements reflect total assets of Rs 3,001 million as at December 31, 2010, total revenue of Rs 9,801 million and net cash outflows amounting to Rs 72 million for the year then ended. The consolidated financial statements include total assets of Rs 47 million as at March 31, 2011 and total revenue of Rs 60 million and net cash inflow of Rs 2 million for the year then ended, being the proportionate share in the joint venture company which are based on financial statements audited by the other auditors. The financial statements and other financial information of the above subsidiaries and joint venture company have been audited by other auditors whose report has been furnished to us, and our opinion is based solely on the report of other auditors. We report that the consolidated financial statements have been prepared by the Companys management in accordance with the requirements of Accounting Standard (AS) 21, Consolidated financial statements, Accounting Standard (AS) 23, Accounting for investments in Associates in Consolidated Financial Statements and Accounting Standard (AS) 27, Financial Reporting of Interests in Joint Ventures [notified pursuant to the Companies (Accounting Standards) Rules, 2006 (as amended)]. Based on our audit and on consideration of reports of other auditors on separate financial statements and on the other financial information of the components, and to the best of our information and according to the explanations given to us, we are of the opinion that the attached consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India: (a) (b) (c) in the case of the consolidated balance sheet, of the state of affairs of the Group as at March 31, 2011; in the case of the consolidated profit and loss account, of the profit for the year ended on that date; and in the case of the consolidated cash flow statement, of the cash flows for the year ended on that date.
per Aditya Vikram Bhauwala Partner Membership No.: 208382 Bangalore April 28, 2011
Consolidated Balance Sheet as at March 31, 2011

(All amounts in Indian Rupees thousands) Schedule SOURCES OF FUNDS Shareholders Funds Share Capital Reserves and surplus 1 2 1,000,000 19,327,904 20,327,904 MINORITY INTEREST Loan Funds Secured loans Unsecured loans Deferred Tax Liability, Net APPLICATION OF FUNDS Fixed Assets Gross block Less: Accumulated depreciation Net block Capital work-in-progress [including capital advances of ` 115,828 (March 31, 2010 - ` 84,634)] Intangible Assets Investments Current Assets, Loans and Advances Inventories Sundry debtors Cash and bank balances Loans and advances Less: Current Liabilities and Provisions Current Liabilities Provisions Net Current Assets Notes to Consolidated Accounts 18 9 10 11 12 13 9,855,215 1,141,420 10,996,635 4,033,282 24,544,328 4,909,044 890,869 5,799,913 5,120,600 23,560,819 4,136,868 5,124,111 4,413,868 1,355,070 15,029,917 3,716,442 4,461,274 1,399,252 1,343,545 10,920,513 7(ii) 8 1,795,694 13,564,432 2,342,047 4,604,567 755,175 12,408,255 1,726,186 4,305,778 7(i) 18,096,302 6,327,564 11,768,738 16,514,605 4,861,525 11,653,080 4 5 6 2,038,874 1,303,498 3,342,372 496,756 24,544,328 3,314,989 1,821,089 5,136,078 508,306 23,560,819 3 377,296 1,000,000 16,578,535 17,578,535 337,900 March 31, 2011 March 31, 2010
The schedules referred to above and Notes to Accounts form an integral part of the Consolidated Balance Sheet As per our report of even date For S. R. BATLIBOI & ASSOCIATES Firm Registration No.: 101049W Chartered Accountants per Aditya Vikram Bhauwala Partner Membership No.: 208382 Bangalore April 28, 2011 For and on behalf of the Board of Directors of Biocon Limited
John Shaw Director
Consolidated Profit and Loss Account for the year ended March 31, 2011
(All amounts in Indian Rupees thousands, except share data and per share data) Schedule INCOME Gross sales Less: Excise Duty Net sales Contract research and manufacturing services Licensing and development fees Other income EXPENDITURE Manufacturing, contract research and other expenses Interest and finance charges PROFIT BEFORE DEPRECIATION AND TAXES Depreciation and Amortisation Less: Amount recovered from co-development partner PROFIT BEFORE TAXES Provision for income-tax Current tax Less: MAT Credit Entitlement Deferred taxes PROFIT AFTER TAXES Minority interest PROFIT FOR THE YEAR Balance brought forward from previous year PROFIT AVAILABLE FOR APPROPRIATION Interim dividend on equity shares Proposed final dividend on equity shares Tax on interim dividend Tax on proposed final dividend, net of reversal of earlier year ` 6,552 (March 31, 2010 ` Nil) Transfer to general reserve BALANCE, TRANSFERRED TO BALANCE SHEET Earnings per share (equity shares, par value of ` 5 each) Basic (in `) Diluted (in `) Weighted average number of shares used in computing earnings per share Basic Diluted Notes to Consolidated Accounts 18 18(4) 195,542,464 197,368,418 194,490,677 197,626,701 18.79 18.62 15.08 14.84 459,250 13,498,893 248,357 11,273,776 6 745,649 (12,892) (11,550) 3,750,482 (75,332) 3,675,150 11,273,776 14,948,926 300,000 600,000 90,783 457,739 (13,117) 42,059 3,028,061 (95,619) 2,932,442 9,363,827 12,296,269 700,000 74,136 7 (i) & 7 (ii) 15 17 21,840,144 257,022 22,097,166 6,039,436 1,578,459 (10,712) 4,471,689 18,963,300 168,920 19,132,220 4,916,143 1,401,401 3,514,742 14 24,002,962 997,752 23,005,210 3,176,766 1,525,336 429,290 28,136,602 21,009,564 645,944 20,363,620 2,807,178 507,357 370,208 24,048,363 March 31, 2011 March 31, 2010
The Schedules referred to above and Notes to Accounts form an integral part of the Consolidated Profit and Loss Account. As per our report of even date For S. R. BATLIBOI & ASSOCIATES Firm Registration No.: 101049W Chartered Accountants per Aditya Vikram Bhauwala Partner Membership No.: 208382 Bangalore April 28, 2011 For and on behalf of the Board of Directors of Biocon Limited
John Shaw Director
Consolidated Statement of Cash Flows for the year ended March 31, 2011
(All amounts in Indian Rupees thousands) I. March 31, 2011 CASH FLOWS FROM OPERATING ACTIVITIES: Net profit before tax Adjustments for: Depreciation and Amortisation Miscellaneous expenses (Refer Note (v) in Schedule 7 (ii)) Clinical trial and development expenses (Refer Note (iii) in Schedule 7 (ii)) Unrealised exchange (gain)/loss Employee Stock Compensation Expense Provision for bad and doubtful debts Bad debts written off Interest expense Interest income Dividend earned Gain on sale of investment in mutual funds (Gain)/loss on assets sold, net Operating profit before working capital changes Movements in working capital Inventories Sundry debtors Loans and advances Current liabilities and provisions Cash generated from operations Tax paid (net of refunds) Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of fixed assets, net of reimbursements from customers/co-development partners Acquisition of Intangible assets Investment in Associate Acquisition of minority interest (Refer Note (v) & Note (vii) in Schedule 7 (ii)) Interest received Dividend received Sale of investments Proceeds from sale of fixed assets Movement in reserves of ESOP trust Issue of shares by ESOP Trust Purchase of shares by ESOP Trust Purchase of investments Other Long term Current Net cash used for investing activities CASH FLOWS FROM FINANCING ACTIVITIES : Long-term borrowings Repayment of long-term borrowings Short-term borrowings, net Other unsecured Loans Interest paid Dividend paid Dividend tax paid Net cash used for financing activities NET CHANGE IN CASH AND CASH EQUIVALENTS ( I + II + III) FOREIGN CURRENCY TRANSLATION RESERVE CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR (IV + V) COMPONENTS OF CASH AND CASH EQUIVALENTS AS AT THE END OF THE YEAR Cash on Hand Balances with Banks - in current accounts (excluding Unclaimed Dividend) - in exchange earners foreign currency account - in deposit accounts - in unpaid dividend accounts* (Gain)/Loss on exchange differences on cash and cash equivalents held in foreign currency CASH AND CASH EQUIVALENTS IN CASH FLOW STATEMENT 4,471,689 1,567,747 155,245 (55,814) 4,821 19 9,860 239,393 (10,140) (178,625) (150) 7,503 6,211,548 (509,886) (703,365) (42,870) 3,947,174 8,902,601 (812,972) 8,089,629 (1,891,381) (508,410) (121,552) 10,140 178,625 21,104,837 5,916 198,691 183 (138,104) (21,265,555) (2,426,610) 566,465 (1,769,126) (594,457) 57,490 (238,131) (700,000) (67,584) (2,745,343) 2,917,676 56,976 1,399,252 4,373,904 1,789 712,565 2,268,663 1,425,575 5,276 4,413,868 (39,964) 4,373,904 March 31, 2010 3,514,742 1,401,401 82,576 6,977 2,211 16,852 1,656 157,434 (2,064) (113,583) 43,059 5,111,261 (626,210) (797,294) (338,274) 1,416,522 4,766,005 (327,936) 4,438,069 (1,670,343) (193,827) (48,100) (102,515) 2,064 113,583 23,276,452 17,987 202,469 317 (1,000) (32,406) (23,825,377) (2,260,696) 92,898 (697,738) 215,633 399,892 (160,782) (600,000) (101,970) (852,067) 1,325,306 (12,376) 118,051 1,430,981 2,173 773,040 619,292 103 4,644 1,399,252 31,729 1,430,981
II.
III.
IV. V. VI. VII.
* These balances are not available for use by the Company as they represent corresponding unpaid dividend liabilities.
John Shaw Director
1. Share capital
Authorised: 220,000,000 (March 31, 2010 - 220,000,000) equity shares of ` 5 each (March 31, 2010 ` 5 each) Issued, subscribed and paid-up: 200,000,000 (March 31, 2010 - 200,000,000) equity shares of ` 5 each (March 31, 2010 - ` 5 each), fully paid (a) Of the above equity shares:
March 31, 2011
March 31, 2010
1,100,000
1,100,000
1,000,000
1,000,000
(i) 30,800 equity shares of ` 100 each were allotted as fully paid bonus shares by capitalisation of general reserve in the year ended March 31, 1997. (ii) 23,471 equity shares of ` 100 each were allotted as fully paid-up shares in the year ended March 31, 2000 pursuant to a contract for consideration other than cash. (iii) On March 30, 2002, the Company acquired 99.9 per cent equity in Syngene International Limited (Syngene) through the issue of 202,780 equity shares of ` 10 each. The consideration was determined on the basis of a fair valuation, as approved by the statutory authorities in India. The related securities premium at ` 403.8 per equity share had been credited to securities premium account. (b) Also refer Note 3 in Schedule 18 for shares allotted under the Employees Stock Option Plan. (c) On November 11, 2003, the Company issued 86,324,700 equity shares of ` 5 each as fully paid up bonus shares by capitalisation of the balance in the profit and loss account of ` 431,624. (d) On September 15, 2008, the Company issued 100,000,000 equity shares of ` 5 each as fully paid bonus shares by capitalisation of balance in the share premium account of ` 500,000.
2. Reserves and surplus

Capital Reserve Revaluation Reserve Foreign Exchange Retranslation Reserve Account Balance as per last account Add: Exchange difference during the year on net investment in Non-integral operations Securities Premium General Reserve Balance as per last account Add: Transfer from Profit and Loss Account ESOP Trust Balance as per last account Add: Dividend, interest income and profit on sale of shares, net Stock compensation adjustment (Also see Note 3 in Schedule 18) Stock options outstanding Stock options granted during the year Stock options cancelled/ forfeited during the year Less: Deferred employee stock compensation expense Balance in profit and loss account (a) Deferred employee stock compensation expense (See Note 3 in Schedule 18): Stock compensation expense outstanding Stock options granted during the year Stock options cancelled/forfeited during the year Stock compensation expense (amortised)/reversed during the year Closing balance of deferred employee stock compensation expense
March 31, 2011 17,094 17,094 9,489 9,489 94,062 (138,511) (44,449) 2,788,478 2,788,478 1,776,711 459,250 2,235,961 372,254 198,692 570,946 263,732 7,599 256,133 4,641 251,492 13,498,893 19,327,904 17,061 (7,599) (4,821) 4,641
March 31, 2010 17,094 17,094 9,489 9,489 (14,048) 108,110 94,062 2,788,478 2,788,478 1,528,354 248,357 1,776,711 169,785 202,469 372,254 293,805 30,073 263,732 17,061 246,671 11,273,776 16,578,535 49,345 (30,073) (2,211) 17,061
3. Minority interest
Minority interest represents that part of the net profit and net assets of (a) Syngene to the extent of 170 shares (0.01 per cent) and (b) 22% of AxiCorp, which are attributable to interests which are not owned, directly or indirectly by Biocon. Also refer Note 13 in Schedule 18. March 31, 2011 The share of the net assets attributable to the minority shareholders is as follows: As per last balance sheet Foreign currency translation adjustment Profit/(loss) for the year attributable to minority shareholders * 337,900 (35,936) 75,332 377,296 247,686 (5,405) 95,619 337,900 March 31, 2010
* Amount for the year ended March 31, 2011 includes ` Nil (March 31, 2010 - ` 31,894) pertaining to shares of losses of JV Partner in BBPL absorbed by Biocon. Also refer Note 1 in Schedule 18.
4. Secured loans
From banks Short Term Cash credit, packing credit, buyers credit etc. Long Term Buyers credit (a) Cash credit, packing credit, buyers credit, etc
March 31, 2011
March 31, 2010
1,894,691 144,183 2,038,874
2,982,661 332,328 3,314,989
(i) Biocon has working capital facilities with Hongkong and Shanghai Banking Corporation (HSBC). These facilities are repayable on demand, secured by pari passu first charge on current assets of the Company. As on March 31, 2011, the Company has utilised fund based limits of ` 740,229 (March 31, 2010 - ` 694,435), inclusive of foreign currency denominated loans of ` 668,100 (US$ 15 Million ) [March 31, 2010 - ` 427,025 (US$ 9.5 million)]. (ii) Biocon has working capital facilities with Canara Bank (CB). These facilities are repayable on demand and are secured by a pari passu first charge on current assets of the Company. As on March 31, 2011, the Company has utilised ` 414 (March 31, 2010 - ` 124). (iii) Biocon has working capital facilities with ABN Amro Bank. These facilities are repayable on demand and are secured by a pari pasu first charge on the current assets of the Company. As on March 31, 2011, the Company has utilised Nil (March 31,2010- ` 202,275) inclusive of foreign currency denominated loans of Nil (US$ Nil) [March 31, 2010- ` 202,275(US$ 4.5 million)]. (iv) Syngene has obtained foreign currency denominated pre-shipment credit loan from State Bank of India (SBI) of ` 82,401 (US$ 1.85 Million) as at March 31, 2011 [(March 31, 2010- ` 681,085) (US$ 15.15 Million)] which is secured by a pari passu charge on the present and future current assets comprising inventory, receivable and other current assets and fixed assets of Syngene. (v) As of March 31, 2011, Syngene has obtained foreign currency denominated buyers credit loans (short and long term) of ` 960,068 (US$ 24.47 Million) [March 31, 2010 -` 1,026,932 (US$ 22.85 Million)] and pre-shipment credit loan of ` 95,761 (US$ 2.15 Million) [March 31, 2010 -` Nil (US$ Nil)] with HSBC, which are secured by a charge on the present and future movable plant and machinery and current assets of Syngene. (vi) As of March 31, 2011, Syngene has obtained foreign currency denominated buyers credit loans (short and long-term) of ` 26,422 ( US$ 0.59 Million) [March 31,2010 - ` 72,115 (US$ 1.60 Million)] and pre-shipment credit loan of ` Nil (US$ Nil) [March 31, 2010 - ` 224,750 (US$ 5.00 Million)] from The Royal Bank of Scotland (RBS), secured by a pari passu charge on the present and future current assets including inventory, receivables and fixed assets of Syngene. (vii) Syngene has obtained foreign currency denominated pre-shipment credit loan of ` 66,810 (US$ 1.50 Million) [March 31, 2010 - ` Nil (US$ Nil)] as of March 31, 2011 from The Bank of Nova Scotia, secured by a pari passu charge on the current assets and movable fixed assets of Syngene. (viii) On April 26, 2010, Clinigene entered into an agreement with HDFC Bank Ltd for ` 100,000 Packing Credit facility. This loan is repayable on demand secured by first charge on the current assets of Clinigene and Corporate gurantee by Biocon. As at March 31, 2011, ` 56,769 is outstanding. (ix) On September 27, 2010, Clinigene entered into an agreement with HDFC Bank Ltd for ` 50,000 short term loan. This loan is repayable on demand secured by first charge on the current assets of Clinigene and Corporate gurantee by Biocon. As at March 31, 2011, ` 10,000 is outstanding. (x) On September 7, 2008, Clinigene entered into an agreement with State Bank of India for a loan of ` 100,000. As of March 31, 2011, the loan has been repaid. The loan was secured by first charge on the current assets of Clinigene and corporate guarantee by Biocon. As of March 31, 2010, Clinigene had utilised ` 14,270. (xi) AxiCorp has obtained working capital facilities from its bankers. These facilities are secured by a pledge of Axicorps inventories and investments. As at December 31, 2010, AxiCorp has utilised Nil (December 31, 2009 - ` 399, 003 (EUR 6,000)).
5. Unsecured loans
Loans from Banks - Short-term loans - Buyers credit Deferred sales tax liability Financial assistance from DSIR Financial assistance from BIPP Financial assistance from DPRP NMITLI - CSIR Loan Loan from others
March 31, 2011 222,700 233,390 648,624 21,000 37,100 14,000 2,319 124,365 1,303,498
March 31, 2010 1,009,600 648,978 10,000 2,650 149,861 1,821,089
(i) Under the Industrial Policy of the Government of Karnataka, the Company on February 4, 1998 obtained an order from the Karnataka Sales Tax Authority for allowing deferment of sales tax (including turnover tax)for a period upto 8 years with respect to sales from its Bommasandra manufacturing facility for an amount not exceeding ` 24,375. As at March 31, 2011, the Company has utilised ` Nil (March 31, 2010 - ` 354). During the year, the Company has repaid the entire amount. (ii) Under the Agro Food Processing Industrial Policy of the Government of Karnataka, the Company on February 9, 2000 obtained an order from the Karnataka Sales Tax Authority for allowing deferment of sales tax (including turnover tax) for a period upto 12 years with respect to sales from its Hebbagodi manufacturing facility for an amount not exceeding ` 648,938. As at March 31, 2011, the Company has utilised ` 648,624 (March 31, 2010 - ` 648,624). The amount due during 2011-12 is ` Nil (March 31, 2010 - ` Nil). (iii) On March 31, 2005, Biocon entered into an agreement with the Council of Scientific and Industrial Research (CSIR), for an unsecured loan of ` 3,312 for carrying out part of the research and development project under the New Millennium Indian Technology Leadership Initiative (NMITLI) Scheme. The loan is repayable over 10 equal annual installments starting from April 2009 and carry an interest rate of 3 percent per annum. The amount due for repayment within one year is ` Nil (March 31, 2010- Nil). The amount due during 2011-12 being ` 331 has been paid as at March 31, 2011. (iv) On March 31, 2009, the Department of Scientific and Industrial Research (DSIR) has sanctioned financial assistance for a sum of ` 17,000 to the Company for part financing one of its research projects. Of the said sanctioned amount, the Company has received the first installment of ` 10,000 during the year 2008-09. The Research project has been completed during the year ended March 31, 2010. The assistance is repayable in the form of royalty payments post commercialisation of the project in five equal annual installements. During the year, the Company has received the remaining ` 7,000 towards the Pilot Plant project. In addition, DSIR has further sanctioned ` 4,000 towards a development project and the same was received in August, 2010. The amount due for repayment during 2011-12 is ` Nil (March 31, 2010-` Nil). (v) On November 3, 2009, the Department of Biotechnology (DBT) under the Biotechnology Industrial Partnership Programme (BIPP) has sanctioned financial assistance for a sum of ` 53,000 to the Company for financing one of its research projects. Of the said sanctioned amount, the Company has received a sum of ` 37,100 during the year 2010-11. The loan is repayable over 10 half yearly installments after one year from the date of completion of the project, and carries an interest rate of 2 percent p.a. The amount due during 2011-12 is ` Nil (March 31, 2010- ` Nil). (vi) On August 25, 2010, the Department of Science and Technology (DST) under the Drugs and Pharmaceutical Research Programme (DPRP) has sanctioned financial assistance for a sum of ` 70,000 to the Company for financing one of its research projects. Of the said sanctioned amount, the Company has received the first installment of ` 14,000 during the year 2010-11. The loan is repayable over 10 annual installments starting from July 1, 2012, and carries an interest rate of 3 percent p.a. (vii) Biocon has obtained foreign currency loan of ` 222,700 (US$ 5 million) from BNP Paribas as at March 31,2011. The loan is repayable on September 18, 2011. As at March 31, 2010, the Company has availed foreign currency loan of ` 359,600 (US$ 8 million) from HDFC bank. (viii) During the year ended March 31, 2011, BBPL has repaid ` 650,000 borrowed from State bank of India, against Corporate Guarentee given by Biocon. The loan carried an interest of 5.6%. (ix) Syngene has obtained foreign currency denominated pre-shipment credit loan of ` 233,390 (US$ 5.24 Million) [March 31,2010 - ` Nil (US$ Nil)] as of March 31, 2011from HDFC Bank. (x) NeoBiocon and Axicorp have obtained the unsecured loan from their other shareholders which are interest free and repayable on demand. - NeoBiocon ` 5,475 (March 31,2010 - ` 9,343) - Axicorp ` 118,890 (March 31, 2010 - ` 140,518)
6. Deferred tax liability, net

Depreciation Employee retirement benefits Provision for doubtful debts Others Year ended March 31, 2010
Deferred tax (asset)/liability as at April 1, 2010 564,007 (28,224) (24,169) (3,308) 508,306 466,247
Current year charge/(credit) (13,688) 261 1,877 (11,550) 42,059
Deferred tax (asset)/liability as at March 31, 2011 550,319 (27,963) (22,292) (3,308) 496,756 508,306
The Group has units located in Special Economic Zones (SEZ) which claim deduction of income under the provisions of the Income tax Act,1961. Deferred tax (asset)/liability is recognised in respect of timing differences which originate in the reporting period but is expected to reverse after the tax holiday period.
7. (i) Fixed assets

Gross block Land Freehold (revalued) Freehold (others) Leasehold Buildings (revalued) Buildings (others) Leasehold improvements Plant and machinery Research and development equipment Furniture and fixtures Vehicles Year ended March 31, 2010 Accumulated depreciation Buildings (revalued) Buildings (others) Leasehold improvements Plant and machinery Research and development equipment Furniture and fixtures Vehicles Year ended March 31, 2010 Net block Land Freehold (revalued) Freehold (others) Leasehold Buildings (revalued) Buildings (others) Leasehold improvements Plant and machinery Research and development equipment Furniture and fixtures Vehicles Year ended March 31, 2010 Notes :
Foreign Currency Translation Adjustment
Deletions during the year
8,967 94,331 277,045 16,561 3,343,531 3,191 11,514,350 1,014,283 218,147 24,199 16,514,605 14,097,863 16,561 481,420 924 3,795,922 427,869 126,885 11,944 4,861,525 3,612,885
(13,329) (663) (13,992) (1,317) (5,254) (474) (5,728) (586)
177,534 1,173,623 257,592 21,637 6,146 1,636,532 2,568,316 137,636 128 1,213,419 121,774 28,005 3,422 1,504,384 1,351,927
32,207 6,388 2,248 40,843 150,257 24,819 6,595 1,203 32,617 102,701
8,967 94,331 277,045 16,561 3,521,065 3,191 12,642,437 1,271,875 232,733 28,097 18,096,302 16,514,605 16,561 619,056 1,052 4,979,268 549,643 147,821 14,163 6,327,564 4,861,525
8,967 94,331 277,045 2,862,111 2,267 7,718,428 586,414 91,262 12,255 11,653,080 10,484,978
8,967 94,331 277,045 2,902,009 2,139 7,663,169 722,232 84,912 13,934 11,768,738 11,653,080
(i) Certain freehold land and buildings were revalued on November 1, 1994, based on the estimated replacement cost after considering depreciation up to that date, as per valuers reports and the resultant surplus of ` 34,529 was credited to revaluation reserve. Of this reserve, ` 25,040 (March 31, 2010 - ` 25,040) has been transferred to the profit and loss account for depreciation on these assets or adjusted on the sale of these assets. (ii) On December 5, 2002, Karnataka Industrial Areas Development Board (KIADB) allotted land aggregating to 26.75 acres to the Company for ` 64,200 on a lease-cum-sale basis for a period of 6 years, extended subsequently for further period of 14 years. During the year ended March 31, 2005, the Company acquired an additional 41.25 acres of land for ` 99,417 from KIADB. During the quarter ended June 30, 2005, the Company paid an advance of ` 56,320 towards allotment of additional 19.68 acres of land, offered to the Company by KIADB on December 20, 2003. The Company has received the possession certificate from KIADB in January 2006 and entered into an agreement with KIADB to acquire this plot of land on lease cum sale basis for a period of 20 years during the year ended March 31, 2007. The registration for a part of the land under this lease is pending settlement of certain disputes in respect of claims made against KIADB. (iii) During the year ended March 31, 2008, the Company has been allotted land measuring approximately 50 acres at the Jawaharlal Nehru Pharma City Vishakhapatnam, Andhra Pradesh, on a long-term lease basis for a consideration of ` 260,100. The Company has paid the entire consideration towards the cost of the lease as at March 31, 2011 and pending completion of registration formalities, the amount has been recorded as capital work in progress. (iv) Foreign exchange loss of ` 12,946 for the year ended March 31, 2011 (March 31, 2010- ` 43,768 gain ) on long-term foreign currency monetary liabilities relating to acquisition of a depreciable capital asset has been adjusted with the cost of such asset and is being depreciated over the balance life of the assets. (v) Additions to fixed assets and capital work-in-progress during the year ended March 31, 2011, include ` Nil (March 31, 2010- ` 9,603) being interest and ` Nil (March 31, 2010- ` (13,403)) being foreign exchange loss/(gain), incurred on foreign currency denominated loans being capitalised/adjusted under AS-16 - Borrowing costs. (vi) Additions to fixed assets and capital work-in-progress during the year ended March 31, 2011 include direct expenses of power, utility expenses amounting to ` Nil [March 31, 2010- ` 10,325] and ` Nil [March 31, 2010- ` 8,076], respectively, attributable to the construction of the assets. (vii) Syngene has entered in to an agreement with a customer, which grants the latter an option to purchase fixed assets with gross block of ` 1,726,169 (March 31, 2010 - ` 1,544,027) as at March 31,2011 relating to a particular project, upon satisfaction of certain terms and conditions. (viii) During the year ended March 31, 2011, Biocon Research Limited (BRL) has obtained certain equipments on loan basis from co-development partner for use in the joint development program valued at ` 67,997. (ix) On December 1, 2009 the Company completed the purchase of Active Pharma Ingredient business of M/s IDL Speciality Chemicals Limited. The assets acquired have been capitalised at their fair values in the books of the Company. (x) Additions to fixed assets during the year ended March 31, 2011, include assets of ` 590,891 (March 31, 2010 - ` 233,486) of which, ` 359,263 (March 31, 2010 - ` 233,486) has been funded by co-development partner/customer. The Company has capitalised and depreciated the gross value of these assets. The funding received from the co-development partner is reflected as Deferred Revenues in Schedule 13 and the depreciation charge has been adjusted for the proportionate amount recovered from the co-development partner/customer. (xi) Depreciation for the year ended March 31, 2011 has been adjusted by ` 6,108 (March 31, 2010 - ` Nil) pertaining to excess charge of earlier years. (xii) Plant and Machinery, includes computer equipments.
7. (ii) Intangible Assets

Cost/Acquisition Intellectual Properties from Nobex - Under development - Under commercialisation Development costs for products (Insulin) Computer software Product licenses Manufacturing Rights for hR3 Goodwill on AxiCorp Acquisition Goodwill on acquisition of additional stake in BBPL Marketing Rights for T1H Year ended March 31, 2010 Accumulated Amortisation Intellectual Properties from Nobex - Under development - Under commercialisation Computer software Product licenses Year ended March 31, 2010 Net Value Intellectual Properties from Nobex - Under development - Under commercialisation Development costs for products (Insulin) Computer software Product licenses Manufacturing Rights for hR3 Goodwill on AxiCorp Acquisition Goodwill on acquisition of additional stake in BBPL Marketing Rights for T1H Year ended March 31, 2010
Foreign Currency Translation Adjustment
Sale/Adjustments during the year
220,000 81,138 156,604 60,923 153,131 63,760 1,121,124 1,856,680 1,719,164
(1,359) (2,128) (16,430) (42,027) (61,944) (37,390)
164,336 14,513 15,108 121,552 754,037 1,069,546 194,168
319,581 464 10,999 331,044 19,262
220,000 81,138 72,844 140,810 63,760 1,079,097 121,552 754,037 2,533,238 1,856,680
57,138 11,340 62,016 130,494 88,508
(306) (6,724) (7,030) (673)
22,000 16,000 13,895 22,180 74,075 49,474
464 5,884 6,348 6,815
22,000 73,138 24,465 71,588 191,191 130,494
220,000 24,000 156,604 49,583 91,115 63,760 1,121,124 1,726,186 1,630,656
198,000 8,000 48,379 69,222 63,760 1,079,097 121,552 754,037 2,342,047 1,726,186
(i) The Company acquired patents relating to certain technologies (collectively IPs) from M/s Nobex Inc. During the year ended March 31, 2007, the Company licensed out its IP Apaza for further development and commercialisation. Effective October 2006, the Company commenced amortisation of certain IPs including Apaza over a period of 5 years. During the year ended March 31, 2011, the Group completed the intial Phase III clinical trials for IN 105 and as accordingly, commenced the amortization of IN 105 over an estimated life of 10 years. (ii) The Company has entered into an agreement with M/s CIMAB, Cuba to acquire manufacturing rights for certain products in specified territories for a total cost of ` 63,760 (USD 1.5 Million). The Company is in the process of obtaining regulatory approvals from the respective countries. Pending such regulatory approvals, no amortisation has been done for the year ended March 31, 2011. (iii) During the year ended March 31, 2011, Biocon SA entered into an Agreement with Pfizer Pharmaceuticals for the development and commercialisation of Insulin products for various markets. Pursuant to the said arrangement, cost of the development of the products of ` 319,581 have been considered as the contract expenses. (iv) Effective April 30, 2008, Biocon SA acquired 71% equity interest in AxiCorp GmbH, Germany, through purchase from existing shareholders and additional subscription of shares in AxiCorp for an aggregate consideration of Euro 29.58 million (` 1,995 million). The consideration was settled by cash of Euro 15.58 million (` 1,051 million) and by way of transfer of intellectual property rights of certain products to AxiCorp for Euro 14 million (` 944 million). Accordingly, the Group recorded a goodwill of Euro 17.44 million (` 1,177million), being the excess of consideration over the net assets of AxiCorp, as on the date of acquisition. Further, on February 28, 2009, Biocon SA acquired another 7% equity shares in AxiCorp from a minority shareholder for a cash consideration of Euro 762,000 (` 51 million), resulting in a capital reserve of Euro 659,000 (` 44 million) as on date of acquisition. Accordingly, a net goodwill of Euro 16.78 million has been recorded on the aforesaid acquisition. Also refer Note 13 in Schedule 18. (v) During the year ended December 31, 2009 AxiCorp acquired shares held by minority shareholders in Axcount Generika AG for a consideration of Euro 1,507. Axicorp recorded a goodwill of Euro 293 (` 19,490) and has expensed Euro 1,214 (` 82,576) being the excess of the purchase consideration over the fair value of the underlying shares (included under Miscellaneous expenses). (vi) During the year ended March 31, 2011, Biocon SA has entered into an agreement with M/s CIMAB , Cuba for marketing rights of T1H product relating to certain territories for a total consideration of ` 754,600 ( Euro 11,936). The product is currently under development and pending commercialisation of the product in the said territories, no amortisation has been recorded by the Company. (vii) During the year ended March 31, 2011, the Group acquired the interest of minority shareholders in BBPL . Accordingly, ` 121,552 being the excess consideration paid over the net assets of BBPL as on the date of acquisition has been recognised as goodwill. Also, refer Note 1 in Schedule 18.
8. Investments
Long-term investments (At cost) A) Non-trade: National Savings Certificates (Unquoted) Shares of the Company held by ESOP Trust (Quoted) B) Trade investments: Unquoted and fully paid-up 2,722,014 (March 31, 2010 - 2,722,014) Series B1 Preferred Convertible Stock at US$ 1.55 each, fully paid, par value US $0.001 each of Vaccinex Inc., USA 217,972 (March 31, 2010 - 217,972) Series B2 Preferred Convertible Stock at US$ 3.10 each, fully paid, par value US $0.001 each of Vaccinex Inc., USA 4,285,714 (March 31, 2010 - 4,285,714) Series A Preferred Stock at US$ 0.70 each, fully paid, par value US $ 0.00001 each of IATRICa Inc., USA (Associate)
March 31, 2011
March 31, 2010
62 260,043 260,105
62 122,121 122,183
185,795 32,356 131,271 349,422
185,795 32,356 131,271 349,422
(a) Biocon has 30% (March 31, 2010 - 30%) voting rights in IATRICa Inc., USA. The above is net of the Groups share of losses in IATRICa amounting to ` 7,199 as at March 31, 2011 (March 31, 2010 ` 7,199). (b) As on March 31, 2011, the ESOP Trust held 4,457,536 shares (March 31, 2010 - 5,509,323) of the Company towards grant / exercise of shares to/ by employees of the Company and its subsidiaries under the ESOP Scheme. Also refer Note 3 in Schedule 18. (c) Vaccinex Inc., USA (Vaccinex) is engaged in research and development activities and has been incurring losses and has a negative net-worth. As Vaccinex is a development stage enterprise and of strategic importance to the Company, management believes that there is no other than temporary diminution in the value of this investment.
C) Current and unquoted (at lower of cost and fair market value): FUND Units March 31, 2011 Birla Sun Life Floating Rate Fund - Long Term Plan - Daily Dividend Birla Sun Life Savings Fund - Institutional - Daily Dividend Birla Sunlife Interval Income Fund - Institutional - Quarterly Series 1 Dividend Birla Sunlife Interval Income Fund - Institutional - Quarterly Series 2 Dividend Birla Sunlife Fixed Term Plan Series CO Dividend Payout Birla Sunlife Qtly Interval - Series 4 - Dividend Reinvestment Birla Sunlife Short Term FMP - Series 6 Dividend payout Birla Sunlife Short Term FMP - Series 9 Dividend payout DWS Fixed Term fund - Series 73 - Dividend Plan - Payout Fortis Money Plus Fund Institutional Plan - Daily Dividend HDFC Cash Management Fund - Treasury Advantage Plan - Wholesale Daily Dividend HSBC Floating Rate - Long Term Plan - Institutional - Weekly Dividend HSBC Ultra Short Term Bond Fund - Institutional Plan - Daily Dividend ICICI Prudential Blended Plan B Institutional Daily Dividend Option - II ICICI Prudential Flexible Income Plan Premium - Daily Dividend ICICI Prudential Liquid Super institutional Plan Daily Dividend Reinvestment IDFC Fixed Maturity Monthly Series - 30 Dividend IDFC Fixed Maturity Plan - Half Yearly Series - Plan A Dividend IDFC Money Manager Fund - Treasury Plan - Institutional Plan C - Daily Dividend IDFC Money Manager Fund - Treasury Plan - Super Institutional Plan C Kotak Flexi Debt Fund - Institutional - Daily Dividend Kotak Floater Long Term - Daily dividend Kotak Quarterly Interval Plan Series 6 - Dividend L&T Freedom Income STP Institutional - Daily Dividend Reliance Liquid Fund - Treasury Plan - Daily Dividend 5,613,963 8,216,394 20,000,000 15,453,855 12,000,000 15,000,000 7,000,000 2,451,915 30,087,869 35,024,594 1,661,746 261,931 10,000,000 13,729,884 15,179,781 29,868,082 March 31, 2011 Face Value Cost March 31, 2011 56,140 82,220 200,000 154,539 120,000 150,000 70,000 24,596 304,175 350,509 175,705 26,199 100,000 137,319 153,009 303,316 Market Value March 31, 2011 56,181 March 31, 2010 Units Face Cost Market March 31, Value March 31, Value 2010 2010 March 31, 2010 10 10 10 10 11 106 10 10 10 10 10 15 131,555 157,183 75,000 415,652 73,200 188,889 301,464 81,575 148,786 336,038 150,000 16 131,555 157,183 75,000 415,652 73,200 188,889 301,464 81,575 148,786 336,038 150,000 16
10 10 10 10 10 10 10 10 10 10 106 100 10 10 10 10 -
82,220 13,146,597 - 15,718,324 201,940 154,837 120,700 151,307 71,225 24,596 304,209 350,509 175,705 26,199 100,243 137,319 7,500,000 6,514,416 1,786,439 8,156,446
- 41,552,642
- 30,146,400
- 14,808,310 153,009 33,337,871 - 15,000,000 303,316 1,069
C) Current and unquoted (at lower of cost and fair market value): FUND Units March 31, 2011 Reliance Medium Term Fund - institutional - Daily Dividend Reliance Money Manager Fund - Institutional - Daily Dividend Religare Active Income Fund - Institutional - Monthly Dividend Religare Credit Oppurtunities Fund - Institutional - Monthly Dividend Religare Fixed Maturity Plan-Series - II Plan A (13 Months) Religare Ultra Short Term Fund - Institutional Daily Dividend SBI SHF Ultra Short Term Fund - Institutional Daily Dividend TATA Fixed Income Portfolio Fund Scheme B3 - Institutional Quarterly TATA Fixed Maturity Plan Series 28 Scheme A Dividend TATA Floater Fund - Daily Dividend Templeton India Ultra Short Bond Fund - Super Institutional Plan - Daily Dividend UTI Treasury Advantage Fund - Institutional Plan Daily Dividend Reinvestment Grand Total 292,397 20,000,000 391,605 7,198,633 15,000,000 17,587,104 9,087,531 12,728 March 31, 2011 Face Value Cost March 31, 2011 292,798 200,000 200,000 392,276 72,030 150,000 176,497 90,981 12,731 3,995,040 4,604,567 (a) Other Investments include current and unquoted investments of the ESOP Trust of ` 304,175 (March 31, 2010 - ` 73,198). Market Value March 31, 2011 292,798 200,052 March 31, 2010 Units Face Cost Market March 31, Value March 31, Value 2010 2010 March 31, 2010 17 1,001 10 10 10 10 10 10 181,487 385,754 50,246 100,682 200,000 100,590 656,056 100,000 3,834,173 4,305,778 181,487 385,754 50,246 100,682 200,000 100,590 656,056 100,000 385,316 5,023,859
1,001 10 10 1,002 10 10 10 10 1,000
- 10,616,070
Reliance Monthly Interval Fund - Series II - Institutional Dividen Plan 19,990,005
- 10,033,109 201,378 20,000,000 392,276 10,043,228 72,030 65,566,225 151,509 176,497 90,981 12,731 9,998,600 -
9. Inventories (at lower of cost or net realisable value)

Raw materials Goods-in-bond/goods-in-transit (Raw materials) Packing materials Work-in-progress Finished goods, including traded goods of ` 185,115 (March 31,2010 - ` 75,124)
March 31, 2011 1,515,516 121,106 104,574 1,538,946 856,726 4,136,868
March 31, 2010 1,431,927 81,572 83,711 1,416,558 702,674 3,716,442 March 31, 2010 169,249 73,049 4,292,025 4,534,323 73,049 4,461,274
10. Sundry debtors (Unsecured)

Debts outstanding for a period exceeding six-months Considered good Considered doubtful Other debts Considered good Less: Provision for doubtful debts
March 31, 2011 121,524 73,068 5,002,587 5,197,179 73,068 5,124,111
Other debts include unbilled revenues of ` 166,738 (March 31, 2010 - ` 45,659) with respect to services rendered to customers.
11. Cash and bank balances

Cash on hand Balances with banks: In current accounts Restricted - Unpaid Dividend Accounts In exchange earners foreign currency account In fixed deposit accounts
March 31, 2011 1,789 712,565 5,276 2,268,663 1,425,575 4,413,868
March 31, 2010 2,173 773,040 4,644 619,292 103 1,399,252
(a) Balances with scheduled banks in current accounts include the balances of the ESOP Trust of ` 7,165 (March 31, 2010 - ` 188,786) (b) Fixed Deposts include margin money deposits against bank guarantees ` 303 (March 31, 2010 - ` 103).
12. Loans and advances (Unsecured and considered good, unless otherwise stated)
Advances recoverable in cash or in kind or for value to be received Duty drawback receivable, net of provision of ` 4,159 (March 31, 2010 - ` 3,797) Other Receivables Deposits Balances with Customs, Excise and Sales tax Authorities MAT Credit entitlement Advance income-tax, net of provision
March 31, 2011 187,601 7,621 188,926 107,613 552,842 50,296 260,171 1,355,070
March 31, 2010 423,422 4,610 153,581 86,762 456,240 37,404 181,526 1,343,545
(a) Advances recoverable in cash or in kind or for value to be received include amounts due from employees to the ESOP Trust of ` 5,724 (March 31, 2010 - ` 5,724) (b) Included under advance tax is ` Nil (March 31, 2010 - Nil) and provision for taxation of ` 6,159 (March 31, 2010 - ` 17,403) of the ESOP Trust.
13. Current liabilities and provisions

Current Liabilities Sundry creditors Capital Others Advances from customers Deferred revenues Balance in current account with bank represents book overdraft Interest accrued but not due, on loans Investor Education and Protection Fund to be credited by: Unclaimed dividend
March 31, 2011
March 31, 2010
827,946 2,209,134 137,769 5,114,564 160,416 5,495 5,276 1,394,615 9,855,215
438,785 1,869,785 284,654 951,438 67,562 4,233 4,644 1,287,943 4,909,044 700,000 74,136 79,262 34,826 2,645 890,869 5,799,913 March 31, 2010 2,064 113,583 254,561 370,208
Other liabilities Provisions Interim dividend Proposed dividend - final Tax on dividend Leave encashment Gratuity Superannuation
300,000 600,000 97,335 93,051 48,389 2,645 1,141,420 10,996,635
14. Other income

Interest income Dividend income, on current investments, non-trade Gain on investments sold, net Miscellaneous income
March 31, 2011 10,140 178,625 150 240,375 429,290
15. Manufacturing, contract research and other expenses

Raw materials and packing material consumed, net of duty drawback of ` 8,478 (March 31, 2010 - ` 2,529) Sub-Contracting and Outsourcing Expenses Purchase of goods for resale Employee costs Salaries, wages and bonus Groups contribution to provident and other fund Gratuity and leave encashment Employee stock compensation expense Directors fees including commission Welfare expenses Operation and other expenses: Royalty and technical fees * Rent Communication expenses Travelling and conveyance Professional charges Power and fuel Insurance Rates, taxes and fees, net of refunds of taxes Lab consumables Repairs and maintenance: Plant and machinery Buildings Others Selling expenses: Freight outwards and clearing charges Sales promotion expenses Commission and brokerage (other than sole selling agents)* Excise duty on closing stock, net ** Bad debts written off Provision for bad and doubtful debts Foreign exchange fluctuation (net) Printing and stationery Loss on sale of assets (net) Research and development expenses Clinical trial and development expenses Miscellaneous expenses Recharge of product development expenses to other party for Co-Development of Product (Increase)/decrease in inventories of finished goods and work-in-progress Opening inventories: Finished goods, net of excise duty Work-in-progress Closing inventories: Finished goods, net of excise duty Work-in-progress
March 31, 2011 15,121,513 96,768 381,527 2,671,254 206,780 55,190 4,821 4,795 185,208 (7,768) 70,024 77,466 297,914 360,463 825,289 78,529 42,167 263,878 244,745 27,081 155,756 206,122 428,718 99,249 (4,167) 9,860 19 (214,936) 44,357 7,503 374,254 507,996 208,703 22,831,078 (718,661)
March 31, 2010 13,560,571 83,029 186,748 2,105,859 157,448 39,502 2,211 805 144,805 13,312 67,869 65,108 232,835 267,651 676,267 77,670 26,145 218,792 176,462 36,553 129,535 140,647 338,137 86,160 (1,239) 1,656 16,852 58,982 30,563 43,059 189,434 181,098 321,389 19,675,914 (341,956)
699,673 1,416,558 2,116,231 (849,558) (1,538,946) (2,388,504) (272,273) 21,840,144
618,869 1,126,704 1,745,573 (699,673) (1,416,558) (2,116,231) (370,658) 18,963,300
*Royalty & technical fees and Commission and brokerage are net of write back of provision no longer required of ` 25,342 (March 31, 2010 ` Nil) and ` 29,704 (March 31, 2010 ` Nil), respectively. ** Excise Duty on Sales amounting to ` 997,752 (March 31, 2010 - ` 645,944) has been reduced from sales in profit and loss account and excise duty on increase/decrease in stock amounting to ` 4,167 (March 31, 2010 - ` 1,239) has been considered as (income)/expense in Schedule 15 of financial statements
16. Research and development expenses

Research and development expenses aggregate to ` 994,603 (March 31, 2010 - ` 915,117) and include ` 157,747 (March 31, 2010 - ` 114,756) on research and development equipment and other assets and ` 32,652 (March 31, 2010 - ` 14,541) on buildings and the remaining expenses incurred by the Company have been disclosed under the appropriate account heads.
17. Interest and finance charges

Interest paid on: Packing credit, cash credit and other loans from banks and others [net of amounts capitalised to fixed assets Nil (March 31, 2010 - ` 9,603)] Bank charges
March 31, 2011
March 31, 2010
239,393 17,629 257,022
157,434 11,486 168,920
Schedule 18: Notes to Accounts for the year ended March 31, 2011
(All amounts in Indian Rupees, US Dollars and Euro are in thousands, except share and per share data)
1. Background
Biocon Limited ('Biocon' or 'the Company'), was incorporated at Bangalore in 1978 for manufacture of biotechnology products. Syngene International Limited ('Syngene'), promoted by Dr Kiran Mazumdar Shaw, was incorporated at Bangalore in 1993. In March 2002, Biocon acquired 99.99 per cent of the equity shares of Syngene and, resultantly, Syngene became the subsidiary of Biocon. Clinigene International Limited ('Clinigene') was incorporated on August 4, 2000 at Bangalore and became a wholly owned subsidiary of Biocon on March 31, 2001. On January 10, 2008, Biocon entered into an agreement with Dr B R Shetty to set up a joint venture company NeoBiocon FZ-LLC, incorporated in Dubai (NeoBiocon). NeoBiocon is engaged in development, marketing and distribution of biopharmaceuticals in the Middle East region. The Company has also established Biocon Research Limited (BRL), a subsidiary of the Company to undertake research and development in novel and innovative drug initiatives. Effective April 30, 2008, Biocon acquired 71% equity interest in AxiCorp GmbH, Germany (AxiCorp) through its newly incorporated wholly owned subsidiary company Biocon SA., Switzerland. In February 2009, Biocon SA acquired an additional 7.4% equity interest in AxiCorp. Also, refer Note 13 below. Biocon entered into an agreement with CIMAB SA (CIMAB) to set up a Joint Venture Company Biocon Biopharmaceuticals Private Limited (BBPL) to manufacture and market products and carry out research activities. BBPL was incorporated on June 17, 2002 with Biocon holding 51 per cent of share capital. In April 2010, Biocon SA acquired the 49% equity stake held by CIMAB SA in BBPL. In March 2011, Biocon purchased the 49% equity stake in BBPL from Biocon SA. Consequently, as at March 31, 2011 all the equity shares of BBPL are held by Biocon. The Company has 30% voting rights in IATRICa Inc. incorporated in USA. IATRICa Inc. is involved in research and development activities.. Biocon and its subsidiaries (the Group) and joint venture/associate companies are engaged in manufacture of biotechnology products for the pharmaceutical sector. The Company is also engaged in research and development in the biotechnology sector. The Group is also engaged in providing contract research services to overseas customers in the field of synthetic chemistry and molecular biology, sale of products arising from research activities and undertakes clinical research activities on discovering new biomarkers and is extending its activity to discovering new diseases subsets and novel data based on pharmacogenomics. During the year ended March 31, 2007, the Company had received an approval as the developer as Biocon SEZ at the Biocon Park facility and also received an approval for SEZ unit to be located within Biocon SEZ.
2. Statement of significant accounting policies

a) (i) Basis of presentation and consolidation The consolidated financial statements have been prepared under the historical cost convention except in case of assets for which provision for impairment is made and revaluation is carried out, on an accrual basis. The consolidated financial statements have been prepared to comply in all material respects with accounting standards, notified by the Companies (Accounting Standards) Rules, 2006 (as amended) to reflect the financial position and the results of operations of Biocon together with its subsidiaries, joint venture company and associate company. In accordance with Accounting Standard 27, Financial Reporting of Interests in Joint ventures, the interest in the joint venture company is accounted using proportionate consolidation on a line-by-line basis. In accordance with Accounting Standard 23, Accounting for Investments in Associates in Consolidated Financial Statements, the Group has accounted for its investments in associate under the equity method as per which the share of profit/(loss) of the associate company has been added to/reduced from the cost of investment. The accounting policies have been consistently applied by the Group and are consistent with those used in the previous year. The consolidated financial statements of AxiCorp are drawn up to December 31, 2010 for the purpose of consolidation. Accordingly, the consolidated balance sheet as at March 31, 2011 and the financial results of the Group for the year then ended, include the consolidated balance sheet of AxiCorp as at December 31, 2010 and financial results for the period January 1, 2010 to December 31, 2010. The financial statements of other subsidiaries, joint ventres company and associate company have been drawn upto the same reporting date as that of the Company i.e. March 31, 2011. All material inter-company transactions and balances between the entities included in the consolidated financial statements have been eliminated. The excess of the purchase price over the proportionate share of the book value of the net assets of the acquired subsidiary company on the date of investment is recognised in the consolidated financial statements as goodwill and disclosed under Intangible Assets. In case the cost of investment in subsidiary companies is less than the proportionate share of the book value of the net assets of the acquired subsidiary company on the date of investment, the difference is treated as capital reserve and shown under Reserves and surplus. For the purpose of administration of the employee stock option plans of the Company, the Company has established the Biocon India Limited Employee Welfare Trust (ESOP Trust). In accordance with the guidelines framed by the Securities and Exchange Board of India (SEBI), financial statements of the Company have been prepared as if the Company itself is administering the ESOP Scheme.
(ii) Use of estimates The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon managements best knowledge of current events and actions, actual results could differ from these estimates. b) Fixed assets and depreciation Fixed assets are stated at cost, except for revalued freehold land and buildings, which are shown at estimated replacement cost as determined by valuers less impairment loss, if any, and accumulated depreciation. The Group capitalises all costs relating to the acquisition and installation of fixed assets. Fixed assets, other than freehold land, but including revalued buildings, are depreciated pro rata to the period of use, on the straight line method at the annual rates based on the estimated useful lives, as follows:
Nature of asset Buildings Plant and machinery (including Computers) Research and development equipment Furniture and fixtures Vehicles Per cent 4.00 9.09 33.33 11.11 8.33 -16.67 16.67
Leasehold land on a lease-cum-sale basis are capitalised at the allotment rates currently charged by the Municipal Authorities. Leasehold improvements are being depreciated over the lease term or useful life whichever is lower. Used assets acquired from third parties are depreciated on a straight line basis over their remaining useful life of such assets. The depreciation charge over-and-above the depreciation calculated on the original cost of the revalued assets is transferred from the revaluation reserve to the consolidated profit and loss account. Assets individually costing less than ` 5 are fully depreciated in the year of purchase.
c) Impairment of assets The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life. A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment. d) Intangible assets Goodwill Goodwill represents the excess of the purchase price over the book value of the net assets of the acquired subsidiary company on the date of investment. Goodwill is not amortised but is tested for impairment on a yearly basis. Intellectual Property rights, contract rights, manufacturing/marketing rights and product licenses Costs relating to intellectual property rights, contract rights, manufacturing/marketing rights and product licenses are capitalized and amortized on a straight-line basis over the period of expected future sales from the use of the said intangible asset, i.e. over their estimated useful lives not exceeding ten years.
Computer Software Software which is not an integral part of the related hardware is classified as an intangible asset and is being amortised over a period of three-five years, being its estimated useful life.
Research and Development Costs Research and development costs, including technical know-how fees, incurred for development of products are expensed as incurred, except for development costs which relate to the design and testing of new or improved materials, products or processes which are recognised as an intangible asset to the extent that it is expected that such assets will generate future economic benefits. Research and development expenditure of a capital nature is added to fixed assets. Development costs carried forward is amortised over the period of expected future sales from the related project, not exceeding ten years. The carrying value of development costs is reviewed for impairment annually when the asset is not yet in use, and otherwise when events or changes in circumstances indicate that the carrying value may not be recoverable.
e) Inventories Inventories are valued as follows: Raw materials, chemicals & reagents, consumables and packing materials Lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a first-in-first-out basis. Customs duties on imported raw materials (excluding stocks in the bonded warehouse) are treated as part of the cost of the inventories. Consumables in the nature of Columns are amortised over a period of twelve months from the date of issue for consumption.
Work-in-progress and finished Lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of goods manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty. Traded goods Lower of cost and net realizable value. Cost includes the purchase price and other associated costs directly incurred in bringing the inventory to its present location.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.
f) Revenue recognition Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Sale of pharmaceuticals and compounds Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and are recorded net of excise duty, sales tax and other levies. For the purpose of disclosure in these consolidated financial statements, sales are reflected gross and net of excise duty in the consolidated profit and loss account. Technical license agreements The Group enters into certain dossier sales, licensing and supply agreements relating to various products. Revenue from such arrangements is recognised upon completion of performance obligations or on a proportional performance basis over the period the Group performs its obligations, under the terms of the agreements. Proportionate performance is measured based upon the efforts incurred to date in relation to the total estimated efforts to complete the contract. The Group monitors estimates of the total contract revenue and cost on a routine basis throughout the contract period. The cumulative impact of any change in estimates of the contract revenue or costs is reflected in the period in which the changes become known. In the event that the loss is anticipated on a particular contract, provision is made for the estimated loss. Contract research agreements In respect of contracts involving research services and in case of time and materials contracts, contract research fees are recognised as services are rendered, in accordance with the terms of the contracts in case of services performed on time and material basis. Revenues relating to fixed price contracts are recognised based on the percentage of completion method determined based on efforts expended as a proportion to total estimated efforts. In respect of contracts involving sale of compounds arising out of contract research services for which separate invoices are raised, revenues is recognized when the significant risks and rewards of ownership of the compounds have passed to the buyer, and comprise of amounts invoiced for compounds sold. Interest and Dividend Income Interest income is recognised on an accrual basis. Dividends are accounted for when the right to receive the payment is established.
g) Investments Investments that are readily realisable and intended to be held for not more than twelve months are classified as current investments. All other investments are classified as long-term investments. Long-term investments are stated at cost. However, provision for diminution in value is made to recognise a decline other than temporary in the value of the investments. Current investments are carried at lower of cost and fair value and determined on an individual investment basis.
h) Retirement benefits (i) Retirement benefit in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the government funds are due. (ii) Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. The gratuity benefit of the Group is administered by a trust formed for this purpose through the group gratuity scheme.
(iii) Leave encashment liability is in accordance with the rules of the Group. Short-term compensated absences are provided for based on estimates. Long-term compensated absences are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method made at the end of each financial year. (iv) Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.
(v) In case of foreign subsidiary companies, contributions are made as per the respective country laws and regulations. The same is charged to Profit and Loss Account on accrual basis. There are no obligations beyond the companys contribution.
i) Foreign currency transactions Initial Recognition Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. Conversion Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.
Exchange Differences Exchange differences, in respect of accounting periods commencing on or after December 7, 2006, arising on reporting of long-term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition of a depreciable capital asset, are added to or deducted from the cost of the asset and are depreciated over the balance life of the asset, and in other cases, are accumulated in a Foreign Currency Monetary Item Translation Difference Account in the financial statements and amortized over the balance period of such long-term asset/ liability but not beyond accounting period ending on or before March 31, 2011. Exchange differences arising on the settlement of monetary items not covered above, or on reporting such monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.
Forward Exchange Contracts not intended for trading or speculation purposes The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognised as income or as expense for the year. However, exchange difference in respect of accounting period commencing on or after December 7, 2006 arising on the forward exchange contract undertaken to hedge the long term foreign currency monetary item, in so far as they relate to the acquisition of depreciable capital asset, are added to or deducted from the cost of asset and in other cases, are accumulated in Foreign Currency Monetary Item Translation Difference Account and amortised over the balance period of such long term asset/liability but not beyond March 31, 2011
Translation of Integral and Non-integral foreign operation The financial statements of an integral foreign operation are translated as if the transactions of the foreign operation have been those of the Group itself. In translating the financial statements of a non-integral foreign operation for incorporation in financial statements, the assets and liabilities, both monetary and non-monetary, of the non-integral foreign operation are translated at the closing rate; income and expense items of the non-integral foreign operation are translated at exchange rates at the dates of the transactions; and all resulting exchange differences are accumulated in a foreign currency translation reserve until the disposal of the net investment. On the disposal of a non-integral foreign operation, the cumulative amount of the exchange differences which have been deferred and which relate to that operation are recognised as income or as expenses in the same period in which the gain or loss on disposal is recognised. When there is a change in the classification of a foreign operation, the translation procedures applicable to the revised classification are applied from the date of the change in the classification.
j) Income tax Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act. Deferred income taxes reflects the impact of current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Group has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits. At each balance sheet date the Group re-assesses unrecognised deferred tax assets. It recognises unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realised. The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Group writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available Minimum Alternative Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that company will pay normal Income Tax during the specified period.
k) Borrowing costs Borrowing costs that are attributable to the acquisition and construction of a qualifying asset are capitalised as a part of the cost of the asset. Other borrowing costs are recognised as an expense in the year in which they are incurred.
l) Employee stock compensation costs Measurement and disclosure of the employee share-based payment plans is done in accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on Accounting for Employee Share-based Payments, issued by the Institute of Chartered Accountants of India. The Group measures compensation cost relating to employee stock options using the intrinsic value method. Compensation expense is amortized over the vesting period of the option on a straight line basis.
m) Earnings per share (EPS) Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting year. The weighted average number of equity shares outstanding during the year is adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split and reverse share split (consolidation of shares). For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
n) Operating lease Where the Company is a Lessee: Leases of assets under which all the risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under operating leases are recognised as an expense on a straight-line basis over the lease term. Where the Company is a Lessor: Assets subject to operating leases are included in fixed assets. Lease income is recognised on a straight-line basis over the lease term. Costs, including depreciation are recognised as an expense. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately.
o) Segment reporting Identification of segments: The Groups operating businesses are organized and managed separately according to the nature of products manufactured/traded, with each segment representing a strategic business unit that offers different products to different markets. The analysis of geographical segments is based on the areas in which the Group's products are sold.
Inter-segment Transfers: The Group generally accounts for inter-segment sales and transfers at an agreed marked-up price.
Allocation of common costs: Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.
Unallocated items: The Corporate and other segment include general corporate income and expense items which are not allocated to any business segment.
Segment policies: The Group prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Group as a whole.
p) Provisions A provision is recognised for a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
q) Expenditure on new projects and substantial expansion Expenditure directly relating to construction activity is capitalized. Indirect expenditure incurred during construction period is capitalized as part of the indirect construction cost to the extent to which the expenditure is directly related to construction or is incidental thereto. Other indirect expenditure (including borrowing costs) incurred during the construction period which is not related to the construction activity nor is incidental thereto is charged to the Profit and Loss Account. Income earned during construction period is deducted from the total of the indirect expenditure. All direct capital expenditure on expansion is capitalized. As regards indirect expenditure on expansion, only that portion is capitalized which represents the marginal increase in such expenditure involved as a result of capital expansion. Both direct and indirect expenditure are capitalized only if they increase the value of the asset beyond its original standard of performance.
r) Cash and Cash Equivalents Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.
s) Derivate Instruments As per the ICAI Announcement, accounting for derivative contracts, other than those covered under AS-11, are marked to market on a portfolio basis, and the net loss after considering the offsetting effect on the underlying hedge item is charged to the profit and loss account. Net gains are ignored.
3. Employee stock compensation

On September 27, 2001, Biocons Board of Directors approved the Biocon Employee Stock Option Plan (ESOP Plan 2000) for the grant of stock options to the employees of the Company and its subsidiaries. A Compensation Committee has been constituted to administer the plan through a trust established specifically for this purpose, called the Biocon India Limited Employee Welfare Trust (ESOP Trust). The ESOP Trust shall make additional purchase of equity shares of the Company using the proceeds from the loan obtained from the Company, other cash inflows from allotment of shares to employees under the ESOP Plan and shall subscribe, when allotted to such number of shares as is necessary for transferring to the employees. The ESOP Trust may also receive shares from the promoters for the purpose of issuance to the employees under the ESOP Plan. The Compensation Committee shall determine the exercise price which will not be less than the face value of the shares. Grant I In September 2001, the Company granted 71,510 options under the ESOP Plan 2000 to be exercised at a grant price of ` 10 (before adjusting bonus and share split). The options vested with the employees equally over a four year period. Grant II In January 2004, the Company granted 142,100 options (face value of shares - ` 5 each) under ESOP Plan 2000 to be exercised at a price of ` 5 per share. The options vest with the employees equally over a four year period. Details of Grant II Particulars March 31, 2011 No. of Options Outstanding at the beginning of the year Granted during the year Forfeited during the year Exercised during the year Expired during the year Outstanding at the end of the year Exercisable at the end of the year Weighted average remaining contractual life (in years) * adjusted for the effect of bonus shares Grant III In January, 2004, the Board of Directors announced the Biocon Employee Stock Option Plan (ESOP Plan 2004) for the grant of stock options to the employees of the Company, pursuant to which the compensation committee on March 19, 2004 granted 422,000 options (face value of shares - ` 5 each) under the ESOP Plan 2004 to be exercised at a grant price of ` 315 being the issue price determined for the IPO through the book building process. The options will vest with the employees equally over a four year period. Details of Grant III Particulars March 31, 2011 No. of Options* Outstanding at the beginning of the year Granted during the year Forfeited during the year Exercised during the year Expired during the year Outstanding at the end of the year Exercisable at the end of the year Weighted average remaining contractual life (in years) * adjusted for the effect of bonus shares Grant IV On July 19, 2006, the Company approved the grant of 3,478,200 options (face value of shares - ` 5 each) to its employees under the existing ESOP Plan 2000. The options under this grant would vest to the employees as 25%, 35% and 40% of the total grant at the end of first, second, third year from the date of the grant, respectively, with an exercise period of three years for each grant. The vesting conditions include completion of two years of service and performance grade of the employees. These options are exercisable at a discount of 20% to the market price of Companys shares on the date of grant. Details of Grant Particulars March 31, 2011 No. of Options* Outstanding at the beginning of the year Granted during the year Forfeited during the year Exercised during the year Expired during the year Outstanding at the end of the year Exercisable at the end of the year Weighted average remaining contractual life (in years) * adjusted for the effect of bonus shares 3,030,129 3,066 1,436,537 1,590,526 1,343,115 1.5 Weighted Average Exercise Price (`)* 150.0 139.0 139.0 160.0 157.8 March 31, 2010 No. of Options* 5,224,178 741,548 1,452,500 3,030,129 1,388,545 2.3 Weighted Average Exercise Price (`)* 147.0 153.0 137.5 150.0 137.5 17,700 6,250 11,450 Weighted Average Exercise Price (`)* 157.5 157.5 157.5 March 31, 2010 No. of Options* 112,950 95,250 17,700 17,700 1 Weighted Average Exercise Price (`)* 157.5 157.5 157.5 157.5 Weighted Average Exercise Price (`) March 31, 2010 No. of Options* 7,840 1,960 5,880 Weighted Average Exercise Price (`)* 2.5 2.5 2.5 -
Grant V In April 2008, the Company approved the grant of 813,860 options (face value of shares - ` 5 each) to its employees under the existing ESOP Plan 2000. The options under this grant would vest to the employees as 25%, 35% and 40% of the total grant at the end of first, second, third year from the date of grant, respectively, with an exercise period of three years for each grant. The vesting conditions include service terms and performance grade of the employees. These options are exercisable at the market price of Companys shares on the date of grant. Details of Grant V Particulars March 31, 2011 No. of Options* Outstanding at the beginning of the year Granted during the year Forfeited during the year Exercised during the year Expired during the year Outstanding at the end of the year Exercisable at the end of the year Weighted average remaining contractual life (in years) Weighted average fair value of options granted (`) * adjusted for the effect of bonus shares The average market price of the Companys share during the year ended March 31, 2011 is ` 347 (March 31, 2010 ` 237) per share. (after adjustment for the bonus shares) Assumptions used in determination of the fair value of the stock options under the Black Scholes Model as follows: Particulars Weighted Average Remaining Contractual Life in options (Years) Weighted Average Exercise Price* Expected volatility Historical volatility Life of the options granted (vesting and exercise period) in years Expected dividends per share Average risk-free interest rate Expected dividend rate * adjusted for the effect of bonus shares Since the Company uses the intrinsic value method for determination of the employee stock compensation expense, the impact on the reported net profit and earnings per share under the fair value approach is as given below: Particulars Net Profit after taxes Add: Employee stock compensation under intrinsic value Less: Employee stock compensation under fair value Proforma profit Earnings per Share - Basic - As reported - Proforma Earnings per Share - Diluted - As reported - Proforma A summary of movement in respect of the shares held by the Trust is as follows: Particulars Opening balance of equity shares not exercised by employees and available with the ESOP Trust Add: Shares purchased by the ESOP trust Less: Shares exercised by employees Closing balance of shares not exercised by employees and available with the ESOP Trust Options granted and eligible for exercise at end of the year Options granted but not eligible for exercise at end of the year March 31, 2011 5,509,323 391,000 (1,442,787) 4,457,536 1,343,115 482,839 March 31, 2010 7,055,168 3,865 (1,549,710) 5,509,323 1,406,245 1,729,779 18.62 18.49 14.84 14.85 18.79 18.67 15.08 15.09 March 31, 2011 3,675,150 4,821 29,775 3,650,196 March 31, 2010 2,932,442 2,211 (59) 2,934,712 March 31, 2011 5.10 265.0 39.05% 35.59% 7.20 4.50 8.00% 1.30% March 31, 2010 6.00 170.9 37.62% 34.29% 7.20 3.50 7.80% 1.23% 88,195 147,233 235,428 5.1 Weighted Average Exercise Price (`)* 171.0 321.0 265.0 129.0 March 31, 2010 No. of Options* 69,710 63,460 44,975 88,195 6.0 Weighted Average Exercise Price (`)* 231.5 151.5 235.7 170.9 130.0*
4. Reconciliation of basic and diluted shares used in computing EPS

Particulars Basic weighted average shares outstanding Less: Shares held by ESOP Trust Add: Effect of dilutive shares granted but not exercised/not eligible for exercise Weighted average shares outstanding and potential shares outstanding March 31, 2011 200,000,000 4,457,536 195,542,464 1,825,954 197,368,418 March 31, 2010 200,000,000 5,509,323 194,490,677 3,136,024 197,626,701
5. Related party transactions

Sl. No. Name of the related party Relationship Description April 1, 2010 to Balance as at April 1, 2009 to Balance as at March 31, 2011 March 31, 2011 March 31, 2010 March 31, 2010 Income/ (Payable)/ Income/ (Payable)/ (expenses) receivable (expenses) receivable (14,408) (7,291) (754,037) (121,552) (2,196) (396) 13,968 55 (44,700) (670) (88,319) (915) 11,311 138,470 (14,140) (8,072) (33,753) 13,775 (2,369) (380) 7,623 (30,058) (2,190) 13,596 (24,160) 8,583 138,470
1 2 3
Kiran Mazumdar Shaw Managing Director John Shaw CIMAB Director Joint Venture Partner Refer Note (b) below
Salary and perquisites Other liability Salary and perquisites Purchase of raw materials Sale of products Purchase of Intangible Rights Purchase of 49% equity stake in BBPL Sundry Debtors Sundry Creditors
4 5 6
Glentec International P K Associates NeoBiocon FZ LLC
Enterprise owned by Key Lease of Premises Management Personnel Proprietary firm of Relative of Director Joint Venture Lease Rentals Sale of products Recharge of expenses Sundry Debtors
IATRICa Inc.
Associate
Research and Development fees paid Investment in preferred stock
(a) During the year ended March 31, 2011, Biocon SA has acquired marketing and distribution rights of certain products for certain territories from CIMAB for a consideration of ` 754,037. (b) In April 2010, Biocon SA acquired the 49% equity stake held by CIMAB SA in BBPL. In March 2011, Biocon purchased the 49% equity stake in BBPL from Biocon SA. Consequently, as at March 31, 2011 all the equity shares of BBPL are held by Biocon. Refer Note 1 in Schedule 18.
6. Commitments
March 31, 2011 (a) Capital commitments Estimated amount of contracts remaining to be executed on capital account and not provided for, net of advances (b) Operating lease commitments Where the Group is a lessee (i) Rent: The Group has entered into various agreements for lease of building / office space which expires over a period up to October 2019. Gross rental expenses for the year aggregates to ` 35,495 (March 31, 2010 - ` 30,059) The committed lease rentals in the future are: March 31, 2011 Not later than one year Later than one year and not later than five years Later than five years (ii) Vehicles: The Group has taken vehicles for certain employees under operating leases, which expire in September 2014. Gross rental expenses for the year aggregate to ` 18,996 (March 31, 2010 - ` 18,323). The committed lease rental in the future are: March 31, 2011 Not later than one year Later than one year and not later than five years Where the Group is a Lessor: (i) Rent The Company has leased out certain parts of its building (including fit outs) and land on an operating lease, which expire over a period up to September 2017. Gross rental income for the year aggregate to ` 20,304 (March 31, 2010 - ` 21,456). Further, minimum lease rentals under operating lease are as follows: March 31, 2011 Not Later than one year Later than one year and not later than five years Later than 5 Years 20,304 81,216 30,456 March 31, 2010 20,304 81,216 50,760 17,170 19,276 March 31, 2010 20,422 32,088 31,936 41,438 9,136 March 31, 2010 20,770 26,968 13,048 1,326,595 1,149,262 March 31, 2010
7. Contingent liabilities
March 31, 2011 (a) Direct and indirect tax matters under appeal (b) Corporate guarantees given to the Central Excise Department (c) Certain claims made against the Company which the management of the Company believes are not tenable and hence these claims have not been acknowledged as debts 895,517 841,057 4,920 March 31, 2010 672,108 841,057 24,530
8. Foreign exchange forward contracts and unhedged foreign currency exposure

The Group has entered into foreign exchange forward and option contracts to hedge highly probable forecasted transactions in foreign currency. Currency In respect of highly probable forecasted sales/export collection: Foreign exchange forward contracts European style option contracts with periodical maturity dates up to September 2015 European style option contracts with periodical maturity dates upto December 2011 In respect of foreign currency loans taken and granted: European style option contracts with periodical maturity dates up to August 2011 Foreign exchange forward contracts to sell (Euro to USD) Foreign exchange forward contracts to sell (USD to INR) European style option contracts with maturity up to April 2011 The unhedged foreign currency exposure as at the Balance Sheet date is as given below: March 31, 2011 Balances with banks - Current account - Exchange earners foreign currency account - Fixed deposit accounts Receivables Sundry creditors Packing credit/short-term loans 86,276 2,268,663 985,742 1,542,890 1,406,073 947,569 619,292 965,203 1,037,456 March 31, 2010 USD EURO USD USD 33,600 16,000 20,000 30,000 45,000 USD USD EURO 62,000 106,000 3,000 54,000 197,000 March 31, 2011 March 31, 2010
9. Interest in Joint Venture

The Company has 50% interest in the assets, liabilities,expenses and income of NeoBiocon incorporated in Dubai. The share of the Company in the accumulated profit of NeoBiocon as at March 31, 2011 stood at ` 17,164 (loss as on March 31, 2010 - ` 4,080). Refer note 1 in Schedule 18. The aggregate amount of Biocons interest in NeoBiocon is as follows: March 31, 2011 Assets Liabilities Income Expenses 47,039 22,559 59,608 38,002 March 31, 2010 17,033 10,049 23,927 21,214
10. Employee Benefit Plans

The Group has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. A summary of the gratuity plan is as follows: March 31,2011 Fund balance Defined benefit obligation Fair value of plan assets Plan Liability The change in benefit obligation and funded status of the gratuity plan is as follows: Change in benefit obligation Benefit obligation at the beginning of the year Current service cost Past service cost Interest cost Benefits paid Actuarial (gain)/loss Benefit obligation at the end of the year Change in fair value of plan assets Fair value of plan assets at beginning of the year Expected return on plan assets Actuarial gain / (loss) Actual contribution Benefits paid Fair value of plan assets at end of year Net gratuity cost : Components of net benefit cost Current service cost Interest cost Expected return on plan assets Net actuarial (gain) / loss recognised during the year Net gratuity cost Actual return on plan assets Experience adjustment March 31, 2011 Defined benefit obligation Plan assets Surplus / (Deficit) Experience adjustments on plan liabilities gain / (loss) Experience adjustments on plan assets gain / (loss) * Experience adjustment Information available from March 31, 2009. The assumptions used for gratuity valuation are as below: March 31,2011 Discount rate Expected Return on Plan Assets Salary increase Attrition rate up to age 44 Attrition rate above age 44 Retirement age 8.00% 8.00% 8.50% 18 to 25% 7 to 10% 58 March 31,2010 7.50% 8.50% 8.00% 14 to 25% 10 to 14% 58 143,683 95,294 (48,389) (16,742) (2,014) March 31, 2010 115,438 80,612 (34,826) (6,382) 535 March 31, 2009 91,794 76,928 (14,866) 1,287 4,253 March 31, 2008 69,328 66,391 (2,937) -* -* March 31, 2007 75,106 73,414 (1,692) -* -* 15,189 8,659 (6,851) 16,215 33,212 4,838 17,794 6,425 (6,038) 1,780 19,961 6,574 80,612 6,851 (2,014) 19,649 (9,804) 95,294 76,928 6,038 536 (2,890) 80,612 115,438 15,189 8,659 (9,804) 14,201 143,683 91,794 17,794 6,425 (2,890) 2,315 115,438 143,683 95,294 48,389 115,438 80,612 34,826 March 31,2010
The Group evaluates these assumptions based on its long-term plans of growth and industry standards and the expected contribution to the fund during the next year, is approximately ` 39,855 (March 31, 2010 - ` 23,954) The nature of the asset allocation of the fund is only in debt based mutual funds of high credit ratings.
11. Segmental information

Business segments The primary reporting of the Group has been performed on the basis of business segment. The Group is organised into two business segments, active pharmaceutical ingredients (Pharma) and contract research and manufacturing services (contract research). Segments have been identified and reported based on the nature of the products, the risks and returns, the organisation structure and the internal financial reporting systems. April 1, 2010 to March 31, 2011 Particulars Revenues External sales Inter-segment transfers Total revenues Costs Segment costs Inter-segment transfers Result Segment result Corporate expenses Other income Operating profit Depreciation/amortisation Interest expense Income taxes - Current and deferred Minority Interest Profit after taxes Other information Segment assets Unallocated corporate assets Total assets Segment liabilities Unallocated corporate liabilities Minority Interest Total liabilities Capital expenditure April 1, 2009 to March 31, 2010 Particulars Revenues External sales Inter-segment transfers Total revenues Costs Segment costs Inter-segment transfers Result Segment result Corporate expenses Other income Operating profit Depreciation / amortisation Interest expense Income taxes - Current and deferred Minority Interest Profit after taxes Other information Segment assets Unallocated corporate assets Total assets Segment liabilities Unallocated corporate liabilities Minority Interest Total liabilities Capital expenditure 1,211,355 586,084 7,103,284 3,156,469 1,184,544 337,900 18,775,929 5,493,778 5,091,025 24,269,707 5,091,025 29,360,732 10,259,753 1,184,544 337,900 11,782,197 1,797,439 (911,829) (489,572) (168,920) (486,681) (95,619) 5,915,731 907,598 (2,108,474) 370,208 6,823,329 (2,108,474) 370,208 5,085,063 (1,401,401) (168,920) (486,681) (95,619) 2,932,442 (14,722,154) (233,092) (2,132,672) 233,092 (16,854,826) 20,870,977 20,870,977 2,807,178 233,092 3,040,270 (233,092) (233,092) 23,678,155 23,678,155 Pharma Contract Research Unallocated Eliminations Total 3,400,655 345,942 10,687,687 3,073,040 1,075,036 377,296 21,467,522 5,490,405 8,583,036 26,957,927 8,583,036 35,540,963 13,760,727 1,075,036 377,296 15,213,059 3,746,597 (1,021,858) (545,889) (257,022) (721,207) (75,332) 7,091,944 937,083 (2,161,859) 429,290 8,029,027 (2,161,859) 429,290 6,296,458 (1,567,747) (257,022) (721,207) (75,332) 3,675,150 (17,166,384) (272,218) (2,511,901) 272,218 (19,678,285) 24,530,546 24,530,546 3,176,766 272,218 3,448,984 (272,218) (272,218) 27,707,312 27,707,312 Pharma Contract Research Unallocated Eliminations Total
Geographical segments Secondary segmental reporting is performed on the basis of the geographical location of customers. The management views the Indian market and export markets as distinct geographical segments. The following is the distribution of the Groups sale by geographical markets: April 1, 2010 to March 31, 2011 Revenues, net India Outside India Total The following is the carrying amount of assets by geographical area in which the assets are located: Carrying amount of segment assets March 31, 2011 India Outside India Segment revenue and result The expenses that are not directly attributable and that cannot be allocated to a business segment on a reasonable basis are shown as unallocated corporate expenses. Segment assets and liabilities Segment assets include all operating assets used by the business segment and consist principally of fixed assets and current assets. Segment liabilities comprise of liabilities which can be identified directly against the respective segments. Assets and liabilities that have not been allocated between segments are shown as part of unallocated corporate assets and liabilities respectively. 27,187,723 8,353,240 35,540,963 March 31, 2010 23,488,185 5,872,547 29,360,732 Capital expenditure March 31, 2011 2,779,849 966,748 3,746,597 March 31, 2010 1,593,009 204,430 1,797,439 8,139,405 19,567,907 27,707,312 6,505,534 17,172,622 23,678,155 April 1, 2009 to March 31, 2010
12. Other Notes

(a) The Company has entered into transactions of sale of products to a private company amounting to ` 2,980, during the year ended March 31, 2011 (March 31, 2010 - ` 1,812), that require prior approval from Central Government under Section 297 of the Companies Act, 1956. These transactions, entered into at prevailing market prices have been approved by the Board of Directors of the Company. The Company has filed an application with the Central Government for such approval and for condonation of delay in making such application. (b) In terms of Section 115O (6) of the Income Tax Act, 1961, the Company has not provided for Dividend Distribution Tax on final dividend distributed for the year ended March 31,2010 and for the interim dividend declared and final proposed dividend for the year ended March 31, 2011 to the extent such distributable profits pertain to the profits of the Companys SEZ Developers operations under section 10AA of Income tax Act,1961.
13. Subsequent Event

Consequent to an offer made by the minority shareholders of AxiCorp, on April 28, 2011 the Board of Directors of the Company accorded their in-principle approval for the sale of all the shares held by Biocon SA, Switzerland (Biocon SA) in AxiCorp to such group of shareholders. The consideration would be settled through a combination of cash and re-acquisition of the exclusive marketing rights of Insulin and Glargine for the German market.
14. Prior year comparatives

The previous years figures have been re-grouped/reclassified, where necessary to conform to current years classification.
John Shaw Director
Summarised Statement for Subsidiary Companies for year ended March 31, 2011
Reporting Currency INR INR INR INR EURO MYR EURO 15,666 1,866,894 3,189,437 1,306,877 10,264,427 517,156 141,578 1 1 4,044 44,373 5,416,068 5,367,651 767,457 81,712 8,907 500 (373,058) 1,192,852 1,565,411 29,551 649,591 (322,438) 176,000 (159,238) 2,038,323 2,021,561 491,611 192,047 192,047 (322,438) 72,805 375,579 500 (879) 443,285 443,664 289,337 (37,988) (37,988) 28,750 2,215,520 5,078,266 2,833,996 26,199 3,231,378 286,084 3,340 282,744 Capital Reserves Total Assets Total Liabilities Investment (except in Subsidiaries) Turnover Profit/(Loss) before taxation Provision for taxation Operational Profit/(Loss) after taxation Proposed Dividend Country
(All amounts in Indian Rupees thousands)
Syngene International Limited
India India India India Switzerland Malaysia Germany
Clinigene International Limited
Biocon Biopharamaceuticals Private Limited
Biocon Research Limited
Biocon SA
Biocon Sdn.Bhd
AxiCorp GmbH
Balance Sheet - Conversion rate
As at March 31, 2011
1 Euro = INR 63.17
1 MYR= INR 14.95
Notes: 1) The Ministry of Corporate Affairs has granted general exemption to Companies from attaching the financial accounts of the subsidiary companies pursuant to Section 212 of the Companies Act, 1956. The members can, however, obtain the detailed annual accounts of the subsidiary companies and related information by making a request to that effect. The copies of the same will be available for inspection at the registered office in Bangalore, India. 2) The details mentioned above for overseas subsidiaries have been arrived at by using exchange rate of March 31, 2011.
Glossary
ABIH AFSSAPS ANDA API APAC ASCO BBRC BEST BSE CAP CADD CAPA CAGR CDI CDSL cGMP CHO CHW COS CRC CRO CLL CTRT COFEPRIS CTD DCA DMF DMPK DPCO EBITDA EDQM EGFR EPS EPO ESRD ESOP ETP EU FTE GCC GCP HCC ICAI ICH IGAAP IPO IPR IVD Mab MCAZ MMF MPA MRP mTOR NCEs NET American Board of Industrial Hygiene Agence Franaise de Scurit Sanitaire des Produits de Sant Abbreviated New Drug Application Active Pharmaceutical Ingredient Asia-Pacific American Society of Clinical Oncology Biocon - Bristol-Myers Squibb Research Center BIOMAb EGFR Efficacy & Safety Trial The Bombay Stock Exchange Limited College of American Pathologists Computer Aided Drug Design Corrective and Preventive Action Compound Annual Growth Rate Clostridium Difficile Infection Central Depository Services (India) Limited Current Good Manufacturing Practices Chinese Hamster Ovary Community Health Workers Certificate of Suitability Custom Research Company Contract Research Organisation Chronic Lymphocytic Leukemia Chemo Therapy and Radio Therapy Comisin Federal para la Proteccin contra Riesgos Sanitarios Common Technical Dossier Diabetes Care Advisors Drug Master File Drug Metabolism and Pharmacokinetics Drug Price Control Order Earnings Before Interest, Depreciation and Taxes European Directorate for Quality of Medicines Epidermal Growth Factor Receptor Earnings Per Share Erythropoietin End Stage Renal Disease Employees Stock Options Plan Effluent Treatment Plant European Union Full Time Equivalent Gulf Co-operation Council Good Clinical Practice Hepato Cellular Carcinoma Institute of Chartered Accountants of India International Conference on Harmonisation Indian Generally Accepted Accounting Principles Intial Public Offering Intellectual Property Rights In Vitro Diagnostics Monoclonal Antibodies Medicines Control Authority of Zimbabwe Mycophenolate Mofetil Mycophenolic Acid Mutual Recognition Procedure Mammalian Target of Rapamycin New Chemical Entities Neuro Endocrine Tumors
NHL NSCLC NSDL NSE LIMS OHSAS OPPI OTC OOS PASI PCT PK / PD R&D RCC r-met HuG-CSF ROW SEBI SEGA SMBG SKU TPM TS TGA TDM TRIPS USFDA WTO WWD YOY Currency Abbreviation AED CHF EUR USD / US$ INR
Non-Hodgkins lymphoma Non-Small Cell Lung Carcinoma National Securities Depository Limited The National Stock Exchange of India Limited Laboratory Information Management system Occupational Health Safety Assesment Series Organisation of Pharmaceutical Producers of India Over the Counter Out Of Specification Psoriasis Area and Severity Index Patent Co-operation Treaty Pharmaco Kinetic / Pharmaco Dynamic Research and Development Renal Cell Carcinoma Recombinant methionyl human Granulocyte colony stimulating factor Rest of the world Securities Exchange Board of India Sub Ependymal Giant Cell Carcinoma Self-Monitoring of Blood Glucose Stock Keeping Unit Total Productive Maintenance Tuberous Sclerosis Therapeutics Good Adminstration Therapeutic Drug Monitoring Level Trade Related Aspects of Intellectual Property Rights United States Food and Drug Aminstration World Trade Organisation Winning With Diabetes Year On year
UAE Dirhams Swiss Francs Euros United States Dollar Indian Rupee
COMPANY SECRETARY: co.secretary@biocon.com
CORPORATE COMMUNICATIONS: corporate.communications@biocon.com
INVESTOR RELATIONS: investor.relations@biocon.com
This Annual Report may containforward-looking information, including statements concerning the companys outlook for the future, as well as other statements of beliefs, future plans and strategies or anticipated events and similar expressions concerning matters that are not historical facts. The forwardlooking information and statements are subject to and uncertainties that could cause actual results differ materially from those expressed in, or implied by the statements. Biocon assumes no obligation to publicity update or revise these forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein do not materialize.
Biocon Corporate Communications | tsk design www.tsk-design.com Photography: Ryan Lobo Mallikarjun Katakol Shibu Arakkal
www.biocon.com
Biocon limited 20th KM Hosur Road Electronic City Bangalore 560 100 India T 91 80 2808 2808 F 91 80 2852 3423

Biocon AR2011

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Brand Biocon

At the Intersection of Patient + Therapy

ANNUAL REPORT 2011

DIABETOLOGY ONCOTHERAPEUTICS NEPHROLOGY CARDIOLOGY COMPREHENSIVE CARE IMMUNOTHERAPY

Biocons comprehensive range of branded products in key disease segments

*Pharma Trends 2011

Biocon Annual Report 2011 Brand Biocon 05

The Market Opportunity

Insugen is the fastest growing drug in its class in India

Winning With Diabetes

The Market Opportunity

BIOMAb EGFR Abraxane

Biocon Annual Report 2011 Oncotherapeutics 09

The Market Opportunity

TACROGRAF has attained No. 2 position, overtaking 25 brands in its category

TACROGRAF ERYPRO safe Advacan

~30% ~24% ~45%

Dialysis ERYPRO safe ERYPRO ERYPRO PFS Narita + biOSEV CeRACal

Biocon Annual Report 2011 Nephrology 11

The Market Opportunity

In a market of many brands, STATIX stands out as the purest atorvastatin

BESTOR MYOKINASE STATIX CLOTIDE

~30% ~10% ~40% ~10%

Patient Friendly Lipid Camps Marketed Products

Biocon Annual Report 2011 Cardiology 13

The Market Opportunity

Biocon Comprehensive Care

*Members of Hospital Infection Society (HIS), India

Biocon Annual Report 2011 Comprehensive Care 15

The Market Opportunity

PICON is poised to become the No.1 brand of pimecrolimus in India

Biocon Annual Report 2011 Immunotherapy 17

Research & Development

Biocon Annual Report 2011 Chairmans Review 21

Strategic Foreign Direct Investment

Corporate Social Responsibility

Kiran Mazumdar-Shaw May 2011

Biocon Annual Report 2011 Chairmans Review 23

CLINICAL ADVISORY BOARD

Biocon Annual Report 2011 BOD + CAB 25

Biocon Annual Report 2011 Highlights 31

Biocon Annual Report 2011 Highlights 33

Emerging Market Focus

Developed Market Focus

FY 2010-11 was very successful for

Research & Development

R&D Product Pipeline

Discovery Preclinical Phase I

IN-105 (Oral Insulin)

Anti-CD6 MAb (Itolizumab)

Oncology NOVEL MOLECULES

Anti-EGFR MAb (Nimotuzumab)

BVX-20 (Anti-CD20 MAb)

Fusion MAbs (Tumour Vaccines)

* Proof-of-concept Phase III trials

Biocon Annual Report 2011 Highlights 37

Global Research & Co-development Alliances

Discovery Research Services: Syngene

Clinical Research Services: Clinigene

Biocon Annual Report 2011 Highlights 41