Ar09 Biocon

DRIVING INNOVATION Delivering Affordability
2009
ANNUAL REPORT
DRIVING INNOVATION Delivering Affordability

The global economic crisis is far from over. Although businesses, large and small, are beginning to demonstrate greater scal prudence and implement tighter regulatory controls, the cycle of wealth creation is yet to be re-engaged. History will record this time for the collapse of conventional business models and linear approaches to growth. But perhaps more signicantly, it will throw the spotlight on those companies that recognize and embrace the transformative power of innovation. Over the last decade, Biocon has persisted along the high road to innovation. While pharma and biotech industries were grappling with methods to stem the exorbitant cost of drug development, Biocon had initiated an innovation strategy rooted in affordability. We were already employing low cost but high value resources and creatively thinking of new ways to deliver more from less, when the slowdown set in. Owing to business foresight, Biocon is today in a position to advance affordable innovation, despite the current riskaverse business environment. Our ability to keep course in turbulent markets is supported by our investment in a prudent and well balanced innovation matrix. Biocons innovation model strongly leverages the India advantage to mitigate the high risk of experimental science and deliver steady returns through incremental innovation. We draw on Indias superior talent pool and low cost base to build on core competencies, explore adjacencies and manufacture therapeutics at a cost more patients can afford. What good is affordable medicine if patients have little access to it? Biocon is located in a country that has the highest number of diabetics in the world. With cases of cancer and other debilitating diseases on the rise, there exists a desperate need to reach life-saving therapies to more people. Here is where Biocons affordability platform can induce a trigger effect. With lower priced drugs in the market, the cost of medical insurance can be driven down, thereby making healthcare coverage affordable and accessible to more. Another factor in Biocons favour is the rising affordability index of Indias 800 million-strong middle class. With prosperity comes demand for improved health-care. Biocons innovation-led strategy focuses on delivering better healthcare solutions to meet the growing expectations and medical requirements of Indias patient population. In good times, there is a tendency to over-extend the innovation spend. In bad, it is imperative to keep the innovation engine revving. Companies that step up with creativity and courage through stormy weather are often those that come out ahead when the tide turns. We are condent that Biocon is one such company. With a tightly focused innovation strategy and a well validated affordability platform, Biocon is capable of sustaining growth in challenging times and accelerating protability when prosperity returns.
The Global Healthcare Crisis

The West cannot sustain the current cost of innovation. National and private insurance organizations are not willing to reimburse high priced new drugs anymore, unless there is a clear cost:benet ratio. In the generics space, drug manufacturing is already moving to India and China as western manufacturers are unable to remain competitive. Clinical trials too are rapidly shifting in the same direction because developed nations do not have adequate patient population to carry out meaningful clinical investigations.
India Focus
This is the decade of the East. India especially, with its English speaking scientic resource base and low cost manufacturing is advantageously positioned to move up the drug value chain from imitation to innovation. Over the years, India has successfully pursued a low risk, low margin generics strategy. Today, with a combination of governmental incentives, cost effective manufacturing and a burgeoning domestic market, the Indian pharma and biotech industry is well prepared to take the next big leap towards high risk, high reward innovation.
The Burgeoning Indian Market

India will soon be a Top 10 global pharma market with enormous demand for drugs, diagnostics and vaccines. Already known as the worlds diabetic capital with a forecast of 70 million diabetics by 2020, other diseases like cancer, autoimmune and infectious illnesses will provide signicant market opportunities for both generics and new drugs catering to unmet needs in all these segments. The mushrooming of hospitals all over India has also stimulated a clinical development culture conducive to new drug development. MNCs are already leveraging Indias investigators and investigation sites to augment there own drug development programs. It is envisaged that by 2025, India will have approximately 800 million people in the middle to high income group who will drive up the affordability index. Insurance will also play a key role in providing this section of our population access and ability to afford generic and new drugs for large unmet medical needs in cancer, diabetes, autoimmune and other chronic diseases.
Incentives
The Indian Government has played a key role in supporting various sectors that are challenged with inherent risk; the biotechnology sector being a front runner in this category. Through innovative incentives and funding models such as BIPP (Biotechnology Industry Partnership Program), SBIRI (Small Business Innovation Research Initiative), NMITLI (New Millennium Innovation Technology Leadership Initiative) and BIRAP (Biotechnology Industry Research Assistance Program), the Government has provided a springboard for Indian biotechnology to move up the value chain. Given our cost base, risk and failure are now affordable therefore providing Indian biotech with an edge in cost competitive innovation.
Biocon products are available in over 1,50,000 pharmacies across India.
Biocon Annual Report 2009 India Focus 03
When you ask people to do more with less, you make them think creatively. Shrinking budgets and diminishing revenues often force research professionals to think out-of-the-box and innovate. Chetana Basavaraj, Laboratory Director - Central Lab, Clinigene
Advantage Biocon
We have on our team the best scientic talent India has to offer. Spread over 90 acres, Biocon has established the largest biotech park in the Asia-Pacic region housing world class, state-of-the-art infrastructure and facilities. In the areas of contract research and clinical services, we partner pharma and biotech majors providing them cost competitiveness and high value research and development. Further along the drug value chain, our capabilities in low cost manufacturing continue to give us a competitive edge. By leveraging the inherent India cost arbitrage we are able to push an innovation strategy that delivers affordability. Syngene has developed world class infrastructure and expertise to offer a spectrum of services on an integrated discovery platform. Clinigene too has acquired expertise in conducting human pharmacological studies and clinical trials for key players in the global biopharmaceutical industry. Both Syngene and Clinigene are positioned to leverage outsourcing opportunities created by drastic cuts in R&D spends and escalating operational costs. As clinical trials increasingly shift to India, Clinigene is well prepared to offer its services. Likewise, Syngenes model partnership with Bristol- Myers Squibb has set the stage for similar collaborations with its other large clients.
People Advantage
We have 3,500 of Indias nest and sharpest minds working together at Biocon. Our innovation culture focuses on internal teamwork, synergistic collaborations with our business partners and an active global peer network to draw inspiration from. Keeping our people motivated and sustaining a creative work ethos is a crucial element of our long term strategy.
Manufacturing & Research Infrastructure Advantage

Biocon has incrementally invested in manufacturing and research infrastructure to meet escalating global demand for generics and biopharmaceutical products. Our strength has been the rapid conceptualization, execution and commissioning of custom research laboratories, and diverse/ exible large scale manufacturing facilities in support of our own programs and those of our international partnerships. The US$ 200 million Special Economic Zone (SEZ), Biocon Park Asia-Pacics largest integrated biotech hub symbolizes the coming of age of Indias biotech industry and its transition into high value innovation.
Service Advantage
India is today shifting its role as the worlds back ofce to that of an innovation epicenter. Leading the foray into partnered services for high value innovation in India is Syngene, our Contract Service Company and Clinigene, our Clinical Research Organization.
Biocons team of 3500 co-workers is focused on delivering innovative healthcare solutions that are accessible and affordable to patients all over the world.
Biocon Annual Report 2009 Advantage Biocon 05
Incremental Innovation is about improving on existing innovation where lowering the cost is generally the driver.
Insulin Glargine
Biocons Insulin Glargine represents a signicant advancement in effective, cost-competitive diabetes therapy. Using a novel pichia technology, Biocon has leveraged its expertise in biological manufacturing to make Insulin Glargine affordable and accessible to patients all over India. Approved for use in patients with type I and type II diabetes mellitus by US FDA and EMEA since 2000, Biocon has successfully completed the development of Insulin Glargine, brand name BASALOGTM. BASALOGTM is a long-acting biosynthetic human insulin analog. Clinical trials of BASALOGTM have been conducted in diabetic patients at 15 different centers all over India. The data from these investigations was accorded marketing approval by the Indian regulatory authority (DCGI). BASALOGTM is now available at pharmacies across India.
Biocons Innovation Matrix
Evolutionary Innovation is about leveraging known innovation to the next level by using existing, well-validated knowledge to create an improved, novel product.
BVX-20
Biocon is in the process of developing BVX-20 which targets CD20 receptors on B cells, as a next generation monoclonal antibody therapy for the treatment of non-Hodgkins lymphoma (NHL) and B cell chronic lymphocytic leukemia (BCLL). BVX-20 is a novel humanized MAb which is expected to provide an improved safety and efcacy prole. Pre-clinical studies in animal models have shown very encouraging results. Taking investigations further, rst in-human phase I clinical trials will be initiated in 2010. By developing this therapy on an affordability platform, Biocon is rapidly moving towards bringing to market an improved novel product for a well validated therapeutic target.
Experimental Innovation is about exploring an emerging eld to create a new class of product that delivers signicantly enhanced value.
T1h
Addressing unmet medical needs in the autoimmune disease segment, Biocon is presently developing a humanized monoclonal antibody (MAb) which targets CD6, a cell surface protein predominantly expressed on human T cells, a natural target for immunomodulation. Two ongoing clinical trials being conducted by Biocon in psoriasis and rheumatoid arthritis patients have clearly established the role of CD6 and the ability of T1h to target CD6 and signicantly improve disease symptoms. With T1h, Biocon will have successfully entered an unexplored territory of science to create a novel yet affordable product that will effectively modulate the immune system and provide long term relief to patients suffering from these chronic diseases.
Biocon has systematically developed an innovation strategy that leverages the India Advantage to develop a robust pipeline of affordable therapies. This pragmatic R&D matrix balances low risk incremental and evolutionary innovation with high risk, high yielding experimental and breakthrough innovation.
In the current market circumstance, our fourdimensional innovation strategy enables us to pursue extremely challenging areas of innovation supported by growing market leadership in known spheres of services and diagnostics, vaccines and therapeutics.
Breakthrough Innovation is about creating radically new technologies and novel products that are derived from experimental innovation where inventions and discoveries are the drivers.
IN 105 (Oral Insulin)
Biocons Oral Insulin IN 105 is a rst-class, anti-diabetic drug that has the potential to alter treatment paradigms, truly exemplifying breakthrough innovation. IN 105 has completed early phases of clinical development and received approval to conduct phase III clinical trials in India. Upon completion of these critical trials, Biocon is well prepared to take this advanced drug to patients. The Oral Insulin program is expected to revolutionize diabetes therapy.
Biocon Annual Report 2009 Biocons Innovation Matrix 07
Innovation holds the key to leadership and protability. It empowers us with the exibility to respond to changing situations and creates competitive advantage through proactive processes and products. In todays challenging environment, innovation alone can help us deliver value added growth.
Chairmans Review
Dear Shareholders, 2009 is a special year as it heralds the advent of our fourth decade as a biotechnology pioneer and our second as a biopharmaceutical front runner. However, for world markets, it has been a year of tremendous upheaval, change and challenge. The global economic downturn has impacted corporate earnings in an unprecedented manner over the last scal. This has been further compounded by foreign currency volatility followed by a surging US Dollar which has led to export driven companies suffering large losses on account of foreign ex-change hedging. Biocons nancial performance has been challenged with all these factors resulting in a sharp decline in post tax prots but redeemed by operating prots and margins that were sustained across Biocon and its subsidiary companies. Fiscal 2008-09 will go down as a year of learning and reckoning. This is the time to strongly leverage Indias affordability advantage and move up the value chain. Now more than ever, the most robust way to grow businesses and sustain a competitive edge is through innovation. I believe innovation empowers us with the exibility to respond to changing situations and provides market leadership through proactive processes and products. Thus, in todays challenging environment, Biocon is developing new ways of delivering high value at low cost. Our partnered services are innovating and augmenting their talent pool to build specialized skills that can deliver higher value services in a cost-effective manner. As imitation of products leads to commoditization and diminishing returns, innovation holds the key to leadership and protability.
The Innovation Matrix: A Strategic Framework

To navigate the challenges of innovation in the next decade we have adopted a well-dened strategic framework that will transform scientic discoveries into advances in human healthcare and generate incremental value for our shareholders. Our Innovation Matrix is a four-dimensional endeavour which extends into the realms of the known and the unknown. Creativity in the known realm builds on existing knowledge and can result in two types of innovation: INCREMENTAL and EVOLUTIONARY. Creativity that challenges unknown boundaries and creates new knowledge is EXPERIMENTAL and TRANSFORMATIONAL in its impact. A portfolio that covers all four spheres enables Biocon to sustain innovation in the short, medium and long term. Our biosimilar insulin, an outcome of incremental innovation, is one of the worlds most affordable therapies for insulin dependent diabetes. Bio-generic monoclonal antibodies are forming the core of our evolutionary innovation strategy. In the more challenging area of experimental innovation, Biocon is at the cutting edge. We are developing conjugated antibodies with a US Biotech start-up, IATRICa, to potentially deliver therapeutic cancer vaccines. We are also pursuing a path of breakthrough innovation through phase III human clinical trials to develop the worlds rst Oral Insulin. Biocon is thus rapidly moving towards commercializing novel biologics with a Made in India label.
Biocon Annual Report 2009 Chairmans Review 09
2009
Revenues increased by 53% Research Services delivered 28% sales growth
Syngene
Over the last 14 years Syngene has grown from strength to strength harnessing capabilities and expertise across multiple research areas to become Indias leading provider of drug discovery services. Today, Syngene offers an integrated discovery platform that opens up avenues for collaborative integrated drug development programs and partnerships. Our partnership with Innate to develop type II virulence blockers is in its third year and moving ahead with much success. We have also entered into an alliance with Sapient Discovery to provide a highly integrated platform for structurebased drug discovery. This partnership is crucial at a time when cost reductions and efciency in the drug discovery process are driving companies to look for suitable outsourcing partners. On another front, we are now alliance partners with DuPont Crop Protection, a logical extension of being a service provider for over six years. Reporting on our signicant partnership with Bristol-Myers Squibb, I am happy to announce that the new research and development facility dedicated to advancing BMSs research endeavours in new drug development was formally inaugurated on March 23, 2009.
2008 by Bio-Spectrum, a pan-Asian biotech publication. Biocon also received the BioSingapore Asia-Pacic Biotechnology Award for The Best Listed Company of 2009. Conrming our position as an emerging global biotechnology player, Med Ad News ranked Biocon as the 20th leading biotechnology company in the world and the 7th largest global employer in the biotechnology sector.
Increasing Our Global Footprint: AxiCorp & NeoBiocon

It has been a year since the German company, AxiCorp came on board as Biocons subsidiary. During this short time, the Company has delivered 30% top line growth to Biocons consolidated numbers. I am pleased to announce that AxiCorp has recently won the German AOK (a leading Public Health Insurer) tender for Metformin, which is an important milestone both in terms of making inroads into the generics market as well as laying the foundation for our diabetes franchise in Germany. Creditably, in 2008, AxiCorp reached the Top 50 position in the German pharmaceutical market and is rated amongst the three fastest growing companies in Germany for Q4/2008. In October 2008, we took a giant step towards consolidating our presence in GCC markets. Our JV in Abu Dhabi, NeoBiocon launched Abraxane in the UAE for the treatment of breast cancer. Abraxane is now available as a single-use 100 mg vial (lyophilized powder, to be reconstituted for intravenous administration).
Clinigene
With India emerging as a credible destination for conducting global clinical trials, Clinigene is poised for dynamic growth. Clinigene has demonstrated scientic expertise and operational excellence in executing the most challenging clinical studies. Our comprehensive database of healthy volunteers and GCP trained investigators drive high volume enrollment in reduced timelines and quality execution of all projects. Clinigenes Clinibase, a database of investigators and investigation sites, provides speed and efciency in clinical trials.
Clinical Advisory Board

It has been my constant endeavour to strengthen the leadership of our organization by engaging with international experts and consultants. To that end, we have recently constituted a Diabetes Clinical Advisory Board with the appointments of Prof. Alan D. Cherrington PhD, Professor &
Global Recognition & Awards

I am proud to announce that our rst innovative drug, BIOMAb EGFR was voted Asia-Pacic Product of the Year
R&D revenue expenditure increased by 27% Dividend recommended at 60% post bonus issue
Chairman of Molecular Physiology & Biophysics and Professor of Medicine & Diabetes Research Vanderbilt University Past President of the American Diabetes Association; Dr. G. Alexander Fleming MD, President and CEO of Kinexum LLC Member of numerous Scientic Advisory Boards and expert committees; and Dr. Harold E Lebovitz MD, FACE, Professor of Medicine, Endocrinology and Diabetes Division, State University of New York, Health Science Center, Brooklyn. It is envisaged that this Advisory Body will enable us to more effectively advance our diabetes pipeline into global, regulated markets such as the US and EU. Our Oral Insulin program is also being developed with the counsel of this Board. We are in the process of setting up similar disease domain specic global advisory boards for oncology and autoimmune diseases.
continue on this path we must maintain a relentless focus on improvement and operational efciency. We are committed to acquiring new skills and new knowledge in order to succeed in the years ahead. At its core, this endeavour is designed to unleash the full potential of our rich talent pool and focus on delivering good returns on our investments.
Looking to the Future

Despite the globally challenging environment we operate in, I believe we are beginning to witness the start of a transformational phase for Biocons various businesses as we strengthen our competitive edge through innovation and differentiation. On the manufacturing front, our innovation efforts are increasingly directed towards delivering the highest quality at the lowest cost. On the services front, Syngene and Clinigene aim to compete by augmenting specialized skills to deliver increasingly higher value services in a cost effective manner. On the research front, we will pursue a strategy that will deliver incremental and transformational innovation in an affordable manner. Underlying these efforts will be an uninching commitment to operational excellence which is now a prerequisite for global competitiveness. I want to take this opportunity to thank the People of Biocon for making a difference, both to our Company and those we serve. Thanks to their efforts, our growth has accelerated, our research pipeline has become stronger and we are rapidly progressing along the path to delivering increasing shareholder value. Yours sincerely,
Corporate Social Responsibility

Biocon recognizes its signicant responsibilities towards delivering better healthcare to the under-served communities of India, especially those in Karnataka. One of the most important initiatives undertaken this scal is the partnered program with the Government of Karnataka and The Embassy of Ireland to build 800 toilets for individual households in Huskur Gram Panchayat, Anekal. The Micro-Health Insurance initiative under the auspices of Arogya Raksha Yojana continues to increase enrollments and has expanded its network of clinics and hospitals. Biocon Foundation has also partnered the Jain Institute of Vascular Sciences in its Mobile Diabetic Foot Clinic which offers free detection and counseling services to diabetic patients in rural communities.
The People of Biocon

Biocon has exhibited a track record of consistency, performance and responsibility. The people of Biocon know that to Kiran Mazumdar-Shaw May 2009
Biocon Annual Report 2009 Chairmans Review 11
Board of Directors
Dr. Neville Bain Chairman, Institute of Directors, UK Board Member, Scottish & Newcastle Plc., Provexis Ltd. Former Group CEO, Coats Viyella Plc. Former Deputy Group Chief Executive and Finance Director, Cadbury Schweppes Plc. Author of several management books on corporate governance, strategy and people management Prof. Charles L. Cooney Professor, Chemical & Biochemical Engineering, MIT, USA Director, Genzyme Inc. and Bio-Processors 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 scientic 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, Cadbury India Ltd., Birla Sun Life Insurance Co. Ltd., L&T Ltd. Area of professional specialization includes corporate law and related elds Legal counsel to numerous Indian companies, multinational corporations and Indian/foreign banks Prof. Catherine Rosenberg Alternate Director, Biocon University Research Chair Professor and Chairman, Department of Electrical and Computer Engineering, University of Waterloo, Canada 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 Ms. Kiran Mazumdar-Shaw Chairman & Managing Director, Biocon First generation entrepreneur with more than 30 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 Chairman, Madura Coats Ltd. between 1991-1998

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. G. Alexander Fleming MD, President and CEO of Kinexum LLC Member of numerous Scientic Advisory Boards and expert committees 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 2009 13
Highlights 2009
Milestones Marketing Research & Development Discovery Research: Syngene Clinical Research: Clinigene Human Resource Quality & Regulatory Environment, Health & Safety Corporate Social Responsibility Product Glossary 16 18 22 24 26 28 29 29 31 36
Milestones
Consolidated revenue (including AxiCorp) increased 53% from Rs. 10,902 million to Rs. 16,732 million Consolidated revenue (excluding AxiCorp) increased 10% from Rs. 10,902 million to Rs. 11,937 million Consolidated EBITDA (including AxiCorp) grew 16% from Rs. 3,350 million to Rs. 3,872 million Operating margins (excluding AxiCorp) maintained at 31% level PAT impacted by MTM declined to Rs. 931 million R&D revenue expenditure increased by 27% to Rs. 598 million Research Services (Syngene + Clinigene) delivered 28% sales growth Healthcare sales grew robustly with six key Biocon brands Biocon bagged IDMA Best Patent of the Year Award BIOMAb EGFR was voted Bio-Spectrum Asia-Pacic Product of the Year, 2008 Biocon received DCGI marketing approval for Insulin Glargine Biocon won BioSingapore Award for Best Listed Biotechnology Company in Asia-Pacic, 2009 Syngene entered into a partnership with Sapient Discovery to expand integrated drug discovery offerings Syngene and DuPont Crop Protection forged an alliance Biocon Bristol-Myers Squibb Research Center (BBRC) inaugurated Patient enrollment commenced for phase III Clinical Trials for IN 105 (Oral Insulin) Patient recruitment completed for phase IIb Clinical Trials for T1h for RA & Psoriasis NeoBiocon launched Abraxane in the GCC markets Biocon is ranked 7th largest global employer in the Biotechnology sector by Med Ad News Biocon is ranked 20th leading Biotechnology Company in the world by Med Ad News Biocon launched ERYPRO safeTM and NUFIL safeTM pre-lled syringes
Affordability Index of Biocon Products

BASALOGTM
More economical than the leading brand
50% 50% 45% 30% 25% 25% 20% 20% 20%

33% 45%
BIOMAb EGFR BESTOR NUFIL safeTM INSUGEN TACROGRAFTM STATIX ERYPRO safeTM MYOKINASETM
Our Intellectual Prole
17%
5%
Doctorate / Post Doctorate Graduate
Post Graduate Others
Employee Strength
Company As on 31.03.2008 As on 31.03.2009
Biocon BBPL Clinigene Syngene Grand Total
1634 98 132 907 2771
1978 99 137 1240 3454
Biocon Annual Report 2009 Highlights 17
Highlights 2009
Marketing
Biocon continues to expand its presence in global markets and increase visibility of its range of pharmaceuticals, among them generics, biosimilars and biologics through aggressive marketing and branding. Our strategic partnerships in developed markets are reaping rich rewards and setting the stage for sustained growth in the coming years. since June 2008 increased Company group sales from 72,1 million in 2007 up to 89,1 million. The Companys product portfolio now stands at 200 products and the number of employees at the Friedrichsdorf site has grown to 200. Just six years since its inception, AxiCorp was awarded most impressive mid-sized German Company of 2008 by The Oskar Patzelt Foundation.
AxiCorp
Biocons German subsidiary AxiCorp is successfully taking Biocons affordable healthcare solutions to the cost-intensive European healthcare market. Over the last two years, tender contracts with statutory health insurance funds have dominated the German generics business. AxiCorps generics company Axcount has already closed several regional contracts with major funds. In a landmark achievement in 2009, AxiCorp was selected as the AOK (a leading German public health insurance fund) tender supplier for Metformin in Germany. This exclusive two-year contract covers 25 million insured persons representing 35% of Germanys patient population. This tender will strengthen AxiCorps growing generics business. Additionally, it will create a base for a diabetes franchise driven by Biocons bio-generic recombinant Human Insulin and Insulin Glargine in the coming years. In 2008, AxiCorp reached Top 50 position in the German pharmaceutical market and is amongst the three fastest growing companies in Q4/2008. A strong growth trend
NeoBiocon
Biocons JV in the United Arab Emirates, NeoBiocon achieved a major milestone with the launch of Abraxane (Paclitaxel protein-bound particles for injectable suspension) (albumin bound) on October 9, 2008 in the UAE, for the treatment of breast cancer after failure of combination therapy for metastatic disease or relapse within six months of adjuvant chemotherapy.
HIGHLIGHTS 2009 Marketing Research & Development Discovery Research: Syngene Clinical Research: Clinigene Human Resource Quality & Regulatory Environment, Health & Safety Corporate Social Responsibility
Abraxane is currently under registration with the Ministry of Health in other GCC countries. Patients response to the drug has been encouraging with much appreciation expressed for its availability and affordability.
Diabetology
Over the last four years, Biocons Diabetology division has emerged a signicant player in the anti-diabetic market. Independent agencies like ORG IMS and C Marc endorse customer perception of Biocon as a dependable partner in offering high quality, anti-diabetic products and services. In the Indian anti-diabetic market, Biocon has moved up in ranking from 40th in 2005 to 12th in 2009. Our agship brand INSUGEN is currently ranked 3rd in the vial market and has increased its market share across specialties. As per ORG (Feb. 09), INSUGEN has gained the highest market share in the extra-urban / interior markets. Priced approx. 25% lower than its competition, INSUGEN reects Biocons focus on affordable therapy. In addition, Biocon provides various value added services to diabetic patients and the medical fraternity in the form of Patient Education Programs, Diabetes Camps, Nurses Education Programs and Medical Education to Doctors through INSUGEN meets. Amongst our oral anti-diabetic formulations, both BLISTOTM (Glimepiride) and METADOZE-IPR (Metformin) used in the treatment of type II diabetes are gaining wide acceptance across specialties. In the anti-obesity segment, the launch of OLISATTM (Orlistat) has been an innovative rst in Indias drug delivery technology. OLISATTM is the only Indian brand with pelletization technology and a dissolution prole that matches international standards.
Cardiology
2008-09 was a year of team building and consolidation for Biocons Cardiology division as Biocon moved up from 91 in 2005, to 39 in 2009 in the cardiology ranking by ORG, with a CAGR of above 100% (ORG MAT Feb. 2009). Enhancing our brand portfolio was a key focus area and the rst brand to launch was MYOKINASETM (r-streptokinase). MYOKINASETM has given hope to over 19,000 patients in India since launch and is now accepted in most reputed medical institutes and hospitals across the country. As the only met-free streptokinase brand in India, MYOKINASETM has established a unique product proposition for itself. Apart from undertaking an intensive brand building exercise for STATIX (Atorvastatin) and TELMISATTM (Telmisartan), Biocons Cardiology division has also catalyzed the introduction of innovative life saving drugs through increased customer acquisition and prescription generation. The launch of CLOTIDETM (Eptibatide) has provided in-roads into interventional cardiology while the launch of a world class Enoxaparin, DYNALIX is targeted for the management of high risk cardiovascular patients. By providing affordable quality products, Biocon continues to carve out a major differentiator in the market. The Cardiology division also launched some important and widely accepted orals like THINRINTM (Clopidogrel) in the anti-platelet segment, and immediate and patterned release Metoprolol, ACTIBLOKTM IPR for patients with hypertension and heart failure. Biocon also introduced other innovative and technically superior molecules in 2009, including BRADIATM (Ivabradine) and BESTOR (Rosuvastatin). While BRADIATM is aimed at treating angina cases through reduction in heart rate, BESTOR is the most potent cholesterol reducing agent. Together these products have widened the treatment scope for cardiologists, diabetologists and physicians.
In fact, OLISATTM pellets have a dissolution prole that is almost ve times higher than powder formulations, thereby offering better efcacy in fat reduction. There was an average weight reduction of 4-5 kgs per subject in a recently concluded safety study of OLISATTM for weight reduction among 440 patients. The rst quarter of 2009 -10, will see the launch of INSUGEN 100 IU and Biocons Insulin Glargine brand, BASALOGTM. INSUGEN 100 IU will facilitate better compliance through a cost effective, quicker and easier way of injecting insulin with lesser volume. BASALOGTM is a 24-hour acting insulin analog that will provide better glucose control and enhanced patient comfort. In a phase III open labeled, randomized, multicentric study conducted, the safety and efcacy of BASALOGTM was found comparable to the international brand in type I diabetes mellitus patients.
Abraxane The Oncotherapeutics division markets another frontline anticancer drug, Abraxane, in-licensed from Abraxis BioSciences. Since its launch in July 2008, over 200 patients have benetted from Abraxane therapy. Abraxane was commercially introduced in the Indian market at a price 60% lower than what it costs in the US. As per US FDA approval, this drug is recommended for treatment of 1st and 2nd line metastatic breast carcinoma (MBC).
Oncotherapeutics
BIOMAb EGFR Biocons Oncotherapeutics division continues to receive accolades for BIOMAb EGFR, the rst humanized monoclonal antibody for the treatment of head and neck cancer. The ongoing BEST trials in locally advanced head and neck cancers has reported a 30-month follow-up date with encouraging results. Cost and debilitating toxicities are the major treatment drawbacks in most anti-EGFR class of drugs. In line with Biocons philosophy of affordable innovation, BIOMAb EGFR is available to Indian patients at less than 50% of the cost of other anti-cancer therapy molecules in the same class and indication. BIOMAb EGFRs superior and proven safety and efcacy prole and its affordable cost makes it the best-in-class antiEGFR monoclonal antibody for the targeted therapy of head and neck cancer. This has been corroborated by studies conducted by our US and Canada consortium partner, YM Biosciences. Lifecycle management for BIOMAb EGFR includes: Adult Glioma: Accrual completed and are on maintenance/ follow up phase NSCLC: Accrual ongoing To harness the robust lifecycle management program of Abraxane in battling various cancers, Abraxis BioSciences has initiated a worldwide head-to-head phase III registration trial for the treatment of non small cell lung cancer (NSCLC). Investigation into its efcacy as a treatment for melanoma will also begin very soon. In November 2008, the National Comprehensive Cancer Network (NCCN) recommended Abraxane as one of the choices for treatment of NSCLC. In February 2009, NCCN also approved the weekly dosing schedule for treatment of MBC. Biocon has the rights to market Abraxane in SAARC countries and the GCC. Abraxane was launched in the UAE on October 9, 2008 and 20 patients have benetted from this therapy so far.
Supportive Care Biocons Oncotherapeutics division also offers therapies for cancer supportive care with eld specialists dedicated to promoting this product portfolio to the oncology community. NUFIL safeTM (GCSF - lgrastim) for the treatment of cancer chemotherapy induced neutropenia is indigenously developed and manufactured by Biocon at Asias largest biomanufacturing hub. It is the only lgrastim in India to be incorporated with an ultra safe passive delivery system to prevent needle-stick injuries. ERYPRO safeTM (recombinant human erythropoietin alfa) for the management of chemotherapy induced anemia is the only erythropoietin in India to be incorporated with an ultra safe passive delivery system to prevent needle-stick injuries. Both NUFIL safeTM and ERYPRO safeTM have received encouraging response in the very rst year of launch.
ERYPRO safeTM End stage renal disease (ESRD) is a growing concern with dialysis requiring frequent visits to the hospital, thus becoming a nancial burden on patients and their families. With the launch of ERYPRO safeTM, Biocons Nephrology division offers patients an innovative safety solution with unique features for erythropoietin end users (developed in collaboration with Becton-Dickenson and Safety Syringe Inc, USA). Additionally, ERYPRO safeTM is 30% more affordable than the innovator drug thus creating a niche position for the Nephrology division, enhancing Biocons scientic image and furthering its commitment to delivering affordable innovation. Immunosuppressants The high cost of immunosuppressants, meant for preventing organ rejection in renal and liver transplant, continues to put considerable nancial stress on its users. Biocons immunosuppressant product portfolio seeks to address this concern through affordable pricing. RAPACANTM (Sirolimus) is priced at a third of the cost of the innovator drug and TACROGRAFTM (Tacrolimus) was launched at a price 25% lower than that of its Indian counterparts. CeRACaL In its endeavor to deliver a differentiated product portfolio, Biocons Nephrology division recently launched CeRACaLTM (Cinacalcet), a new calcimimetic agent that sensitizes the calcium receptors and corrects secondary hyper-parathyroidism. A treatment not available in India till now, CeRACaLTM will greatly help patients undergoing dialysis and suffering from secondary hyper-parathyroidism to have a better quality of life. Also being launched soon is NARITA+, a unique and balanced nutritional supplement meant to correct nutritional imbalance in patients undergoing dialysis. NARITA+ will add value to Biocons well balanced Nephrology portfolio.
Nephrology
Since its inception in March 2007, Biocons Nephrology division has posted outstanding performance with the successful launch of an innovative safety solution and a highly cost-effective immunosuppressant product portfolio that delivers on our promise of affordable and effective therapy.
Research & Development

President Obamas call for biogenerics and affordable healthcare is reective of global concern over the spiraling cost of healthcare and the need to herald a new era of responsible and accessible biotherapeutics. Biocon continues to push its novel and biosimilar products through the complex stages of pre-clinical / clinical development and simultaneously focus on its small molecule generics pipeline. We pursue our programs with an effort to strike an optimum balance between near term prot growth and long term shareholder value. At a time when many sectors face a severe slowdown, we believe that we have a unique opportunity to leverage our affordable R&D base and forge partnerships that will deliver large contract research, manufacturing and co-development opportunities over the next ve years.

To support our innovation matrix, we created a Diabetes Clinical Advisory Board to help effectively advance our diabetes pipeline into the global-regulated markets such as the US and EU. Additionally, the Board will enable us to draw on important developments in the external knowledge infrastructure to support further development of our core competencies. We are in the process of setting up similar disease area specic global advisory boards for oncology and autoimmune diseases.
R&D Expenditure
R&D expenditure in FY 09 amounted to Rs. 598 million (7% of sales) a rise of 27% compared to Rs. 471 million (5% of sales) in FY 08. As at end of FY 09, around 13% of the workforce was employed in R&D activities.
Pharmaceuticals
Pharma R&D continued to transform its portfolio through process breakthroughs for Biocons generic pharma products. In 2008, signicant progress was achieved in terms of process improvement for existing businesses, development of new processes for existing products and increasing efciency and sustainability. Reduction in the manufacturing cost for generic
Biocons Biologics Pipeline

DRUG
PEG-GCSF Bmab 100 Bmab 200 BVX-20
PRE-CLINICAL
ONCOLOGY ONCOLOGY ONCOLOGY ONCOLOGY
PHASE I
PHASE II
PHASE III
IN 105 (ORAL INSULIN) T1h BIOMAb EGFR (Glioma, NSCLC) INFLAMMATION
DIABETES
ONCOLOGY
molecules has consequently helped Biocon stay ahead in a highly competitive market place. Additionally, we are developing new product classes including chemically synthesized injectable peptides and also looking into a new class of compounds, prostaglandins.
Biosimilars
On the biosimilars front, our development plan for regulatory acceptance by EMEA and US FDA of our recombinant Human Insulin is on track. EMEA has accepted regulatory documents submitted by Biocon and we have recently initiated early phase clinical studies for our biosimilar insulin in Europe. The newest biosimilar that has been approved in India from Biocons pipeline is BASALOGTM, Biocons own Insulin Glargine. BASALOGTM was approved by Indian regulators after a comparative clinical study conducted in diabetic patients demonstrated safety, glycemic control and glycated haemoglobin equivalent to the innovator drug. BASALOGTM is an important addition to the diabetologists armamentarium in helping diabetic patients achieve their glycemic goals. The launch of BASALOGTM is a breakthrough in providing diabetic patients with an advanced, affordable, glucose-lowering therapy. BASALOGTM is also set to enter global clinical development that will enable market authorization in advanced markets such as the US and EU. R&D is focused on building expertise to get more molecules into advanced markets. We are in the early phase of development of the drug PEG-GCSF (peglgrastim) for treating neutropenia caused by cancer chemotherapy. Peglgrastim can stay in the body for much longer time compared to lgrastim and thus patients convenience of once-per-cycle dosing of peglgrastim has potential therapeutic advantages over standard lgrastim, used daily over a 14 day chemotherapy cycle. We are also developing biosimilar antibodies for oncology indications Bmab 100 and Bmab 200 for India, other semi-regulated and highly regulated markets.
The study involved dosing type II diabetes subjects with single doses of 0 mg (placebo), 10 mg, 15 mg, 20 mg and 30 mg tablets of IN 105 in 5 separate periods before a mixed 600 kcal breakfast. The outcome measurements included the safety and tolerability, as well as the pharmacokinetics and pharmacodynamics of IN 105. Results showed that IN 105 was safe and well tolerated by type II diabetic patients and is able to signicantly drop 2-hour post prandial glucose in a dose-related manner. This data supports the feasibility of providing insulin orally to treat postprandial hyperglycemia in diabetic patients afrms Dr. Harold E. Lebovitz MD, FACE, Professor of Medicine, Endocrinology and Diabetes Division, State University of New York, Health Science Center, Brooklyn. Patient enrollment is well under way in our phase III clinical trials.
Novel Biologics
IN 105 Biocon presented the latest data on an ascending dose phase IIa clinical study on type II diabetic patients using IN 105 (Oral Insulin) at The European Association for the Study of Diabetes meeting held in Rome, September, 2008.
T1h A randomized, open label, four arms parallel phase II clinical study to evaluate the safety and efcacy of anti-CD6 monoclonal antibody (T1h) in combination with Methotrexate in MTX-inadequate responders / non-responders with active rheumatoid arthritis has been initiated at multiple investigation sites. The target of enrolling 70 patients in multiple weekly dose arms is complete. The nal study report is expected in the third quarter of 2009.
A phase II clinical trial to evaluate the safety, efcacy and pharmacokinetics of T1h in patients with active psoriasis is also ongoing. This has been designed as a single blind, randomized, multiple dose, multiple schedule, multi-centric, parallel study in patients with active moderate to severe psoriasis, with independent blinded disease activity assessment and quality of life metrics assessment. The target enrollment of 40 patients is complete. The nal study report is expected in the second quarter of 2009. BVX-20 Currently BVX-20 is being evaluated in GLP toxicology studies for safety in relevant animal species. Single and repeat dose pharmacokinetics, immuno genicity testing is being monitored in these studies. Investigations are expected to be completed in the last quarter 2009. Phase I studies in human subjects is expected to start in 2010.
Discovery Research: Syngene

Fifteen years since its inception, Syngene International has the largest market share in India for providing drug discovery services in the areas of Synthetic Chemistry, Medicinal Chemistry and Biology (Avendus Report, Jan. 2009). Syngene has effectively leveraged Indias cost arbitrage to develop internationally benchmarked research infrastructure and enlist the countrys outstanding scientic talent to deliver world class partnered services. Today, Syngene continues to harness capabilities and expertise across multiple research areas to provide vertically integrated, drug discovery services. Syngenes ability to offer an integrated discovery platform signicantly enhances the width and depth of its engagement with all its clients. It also opens up avenues for collaborative integrated discovery programs and partnerships while continuing to maintain leadership in the CRO and CRAM business space. Given Syngenes excellence in cell and molecular biology, and bio-analytical and cGMP production capabilities of biologics, collaborations are not restricted to the discovery of small molecules, but also extend to large biological entities. Syngene also explores opportunities for bridging collaborations that link its areas of expertise with those of complementary companies. To that end, Syngene has entered into strategic collaborations with Strand Life Sciences (www.strandls.com) and Sapient Discovery (www. sapient.com). Both associations are managed by scientists at Syngene, with utmost value attributed to data protection. Another experience of integrated discovery services credited to Syngene is with an international pharmaceutical company, wherein Syngene is actively engaged in discovering compounds for the remedy of a psychotic ailment. With Syngenes expertise in medicinal chemistry and assay development & screening, both of which have already rendered it a competitive edge, the expanded biological and animal facilities give this collaboration a signicant headstart. Experience garnered through previous collaborations has equipped Syngene with expertise to set up animal models for research in these disease areas.
Intellectual Property
Biocons patent portfolio reects growth from a domestic and global perspective. Till 2008-2009, Biocon had a total asset of 415 patent applications of which international PCT applications were 99. In this scal, Biocon was granted 25 patents with 4 in order for grant. Till date, 34 patents are in the US alone. Through acquisitions, Biocons IP asset now stands at 516 of which 94 are granted, bringing the total number of patent applications to 924 and the total number of granted patents to 178.
Infrastructure
Biocon BMS Research Center A fully dedicated research and development facility for one of Syngenes important clients Bristol-Myers Squibb, was formally inaugurated on March 23, 2009. This 200,000 sft. facility has chemical and biological research laboratories built to meet internationally benchmarked standards and specications. The new research facility is dedicated to advancing BMSs work in early drug discovery and development with activities ranging from initial hit-lead optimization to clinical nomination. The facility is currently occupied by 270 scientists but has been designed to accommodate up to 450 employees. Laboratory Animal Research Centre Syngene has established a 45,000 sq ft laboratory animal facility. This world-class facility has been approved by the CPCSEA (Committee for the Purpose of Control and Supervision of Experiments on Animals) and is monitored by the IAEC (Institutional Animal Ethics Committee). It has also recently been audited for AAALAC (American Association for Accreditation of Laboratory Animal Care) accreditation. With additional expertise in the areas of toxicology, in vivo pharmacology, histopathology, and veterinary sciences, Syngene can now offer pharma companies an extended platform of services in pre-clinical development of molecules. This facility will signicantly enhance Syngenes capabilities as a high-end, integrated drug discovery partner. Pilot Plant Facility A new chemical pilot plant recently commissioned has been designed to meet cGMP standards, comply with the needs of international regulatory authorities and meet global client requirements. The plant can handle different quantities of product, ranging from few kilograms to hundreds of kilograms. It is a multiple product plant which can handle a variety of chemical processes. The reactor capacities are from 50L to 3000L, with material of construction including glass lined stainless steel and Hastelloy, all of which are located in two independent suites. Downstream equipment is located in individual fume rooms, with separate personnel and material entry, to prevent any cross-contamination. With this pilot plant, Syngene can scale up and manufacture NCEs, APIs and AIs.
In addition, this plant allows Syngene to manufacture clinicalgrade material with very low operational exposure levels. Biological Pilot Plant Facility The Biological Pilot Plant Facility (BPP) has been built with manufacturing capabilities for microbial fermentation (upto 225L) and mammalian cell culture (upto 300L) based biologics and is in the nal stages of validation. This facility is a multiproduct, cGMP compliant plant which has been designed for contract manufacturing with a high degree of exibility. Each manufacturing suite is appropriately pressurized with respect to its surroundings to mitigate the risk of cross-contamination. Engineers and scientists at the BPP have extensive experience in all aspects of biologics manufacturing, including process development, optimization, scale-up, microbial fermentation, mammalian cell culture, purication and analytical testing. Adding value to Syngenes proven expertise in molecular biology, molecular genetics, and protein sciences, this facility provides an array of cGMP and non-GMP production services for proteins and antibody products for pre-clinical and clinical studies.
Partnerships
Development of Type III Virulence Blockers: Syngene + Innate Pharmaceuticals Over the last two years, Syngene and Innate have worked together on an integrated discovery model wherein both companies evaluated a series of compounds for their
effectiveness in preventing type III secretion events at the cellular level. This collaboration is now going strong in its third year and has endowed Syngene with experience in evaluating different possibilities with emphasis on animal studies and efcacy determination. Having set up a sophisticated vivarium, Syngene will now be self-sufcient in establishing animal models to assess efcacy of candidate molecules / NCEs. The ability to carry out these studies inhouse enhances economic feasibility and timelines associated in such integrated drug discovery projects. Considering Syngenes excellent track record for timely delivery, scientic expertise and organizational commitment, it has been agreed that Syngene will also chair the Steering Committee of this collaboration to decide on further course of action for a successful outcome. Expanding the Integrated Drug Discovery Offering Syngene + Sapient Discovery Syngene entered into a partnership with Sapient Discovery, a US based biotechnology company, in January 2009. Sapient Discovery is a leading structure-guided drug discovery company with a number of proprietary algorithms and capabilities for efcient protein structure based drug discovery and optimization. The Companys proprietary Genes-to-Leads Technology incorporates knowledge of the dynamically exible 3-D structures of drug targets and anti-targets proteins exhibiting structural similarity to the drug target with laboratory screening methods, to generate target-selective initial drug leads in as little as 60 days. Together, Syngene and Sapient intend to provide a highly integrated platform for structure-based drug discovery with a one stop shop for structure-guided discovery, chemistry, biology and structural biology capabilities. This arrangement is crucial at a time when cost reductions and efciency in the drug discovery process is driving companies to look for suitable outsourcing partners. Syngene + DuPont Crop Protection After working for six years with DuPont as a service provider, Syngene is now an alliance partner of DuPont Crop Protection. Syngene has been categorized as a preferred research service provider to DuPont Crop Protection primarily in the eld of
discovery chemistry and biology and will now provide integrated research services, through a one box model, covering a broad range of R&D technical capabilities to support DuPonts discovery pipeline.
Clinical Research: Clinigene

Clinigene has established itself as an experienced, innovative provider of a full range of clinical research services to global biotechnology and pharmaceutical companies. Clinigene is focused on quality and adds value to its clients clinical development programs by evolving various execution strategies to offer timely completion of deliverables, data condentiality and cost-competitive services. Over the past ve years, Clinigene has implemented its main objective of accelerating clinical research for its clients. This is evident from the client base it has serviced, ranging from small venture-capital driven companies to multinational pharmaceutical giants. To achieve this objective, Clinigene has leveraged an adept mix of technology, experience and leadership to meet client needs and deliver value for money, on time. This has also resulted in many of its existing clients offering repeat business, evincing condence in the capabilities of the Clinigene team.
Clinigene is currently undertaking over 30 clinical programs for pharmaceutical and biotechnology companies. Clinical research projects range from bioequivalence / bioavailability, early phase proof of concept studies to late phase programs facilitating registrations. In collaboration with over 160 investigators across India, Clinigene is managing clinical data for more than 4,000 patients. Spread of Clinical Project Sites in India
To achieve its goals, Clinigene has established the following: Manpower: Qualied personnel are trained on relevant international ethical and regulatory guidelines, standard operating procedures and all relevant therapeutic areas to ensure thorough understanding and effective execution of clinical research projects. On-the-job training strengthens project teams and helps sharpen skills and problem-solving capabilities. Experience: Project teams comprising of experienced scientists, managers, clinical research associates and support staff, add value to the design, conduct and timely execution of clinical projects. Their collective experience helps Clinigene to report study results in the fastest possible manner without delays, thus obtaining early approvals for further development or marketing from various international regulatory authorities. Clinigene has been audited by several prospective and current international clients as well as independent auditors. This has ensured robustness of systems and processes adopted. Expertise: Clinigene has vast clinical trial management expertise in conducting complex clinical projects ranging from biological and biotechnology products, small molecules, vaccines and device projects. Its human pharmacology unit, bioanalytical research laboratory and central laboratory facility (afliated to Esoterix Clinical Trial Services, Belgium, a division of Labcorp, USA) cater to early through late phase clinical studies. Bioavailability and bioequivalence studies ranging from simple to complex designs, often involving novel delivery systems and novel route of administration, have been conducted at these units. Laboratory services help investigator sites manage safety of clinical trial participants by delivering quick and accurate data. Project Management: Clinigene ensures effective planning for various stages of a project so that all deliverables are met precisely, in compliance with quality requirements. This includes addressing needs at investigator sites, vendors and in-house study teams viz. training, strategies for recruitment and all-round compliance. With implementation of productivity and project management tools, optimal utilization of current work staff assigned to each project, efcient use of resources, rationalization of costs and tracking of deliverables at each stage of the project are ensured.
Break-up of Patients by Therapeutic Area

84 80 174 373
623
965 1921
Oncology Diabetes Bone & Metabolic Disorders Immunology
Cardiology Dermatology Others
Infrastructure: The state-of-the-art central laboratory (CAP & NABL accredited), bioanalytical research laboratory and human pharmacology unit (equipped with 86 beds and 8 ICU beds) enable Clinigene to offer comprehensive services to meet the exact requirements of a successful early clinical development. The data management and biostatistics group contribute to data analysis using SAS tools and programming capabilities. The Clinigene pharmacy is well-equipped with ambient and refrigerated (2-8C) temperature storage areas with continuous temperature monitoring systems to handle storage requirements for different clinical supplies. All study documents are stored at the on-site temporary archival facility equipped with a re suppression and alarm system. Information Technology: With restructuring and implementation of key IT and web-enabled solutions which are on par with international standards, Clinigene has enhanced its capabilities to ensure speedy ow of information and data warehousing. Adequate power and data back-up is assured and a risk mitigation plan as well as business continuity process ensures projects are least affected by any disasters. Clinigenes focus for the year ahead is to further improve service standards to keep pace with increasingly stringent international regulatory requirements and client needs thus contributing to expansion of its client base. To reinforce differentiated performance measurements/ parameters across levels. To enhance employee engagement through tools like the Gallup Q-12. To identify and develop a second line leadership through an appropriate potential assessment plan. To invigorate our talent pipeline through assessment tools and focused campus collaboration with select biotechnology institutes. In 2008, a number of employee-centric interventions were implemented to create a more engaged and highly competitive talent pool. Some key initiatives undertaken were: Focused engagement with functional heads to develop relevant organic structures that meet present and future organizational needs. Streamlining of department specic manpower plans through involved annual projections with quarter wise phasing and using these as the basis for informed proactive hiring. Strengthening of the Performance Appraisal system 200809 through the combined evaluation of achievement of individuals objectives (weightage ranging between 5070%) and demonstrated competencies like leadership, communication, customer satisfaction, decision making, etc. (weightage ranging between 30-50%). Further shaping of a market competitive compensation structure through biotechnology focused compensation benchmarking studies conducted by Hewitt, Watson Wyatt, Mercer, etc.
Human Resource
Biocons HR strategy for 2009 will focus on the following themes: smart resource allocation, assimilation of the new enterprise wide MIS, competency enhancements, online appraisal and employee engagement. The following priorities have been identied for 2009: To evolve a competency mapping process across the organization, analyze relevant talent gaps and address them through appropriate interventions. To evangelize the online Performance Management process through the Microsoft Enterprise Portal to develop a stronger, more cohesive appraisal system.
Strengthening of employee engagement activities through the concept of People Champions where HR resources are assigned to specic departments for the purpose of building formal and informal relationships to understand department specic scenarios and challenges. The ability to transform goals into realities, create new models for success and sustain high levels of growth lies with our people. The past twelve months have witnessed exciting progress across Biocons multiple initiatives in drug discovery, development and commercialization. At Biocon, our goal is not merely to motivate our employees to accomplish organizational objectives but to surpass them. We provide our people continuous opportunities for active learning and development which will be key drivers for personal growth as well as company success.
Achievements Jordans FDA inspected and approved our facilities for the biological products: Insulin, GCSF & Streptokinase. The Iranian Ministry of Health inspected and approved our oral formulations in the immunosuppressant category: Tacrolimus, Sirolimus and Mycophenolate Mofetil. Our Insulin formulations have been successfully registered in Brazil, Jamaica and Costa Rica. BIOMAb EGFR is successfully registered in Sri Lanka and Nepal. EU GMP completed inspection of our immunosuppressant facility. US FDA approved our statin and immunosuppressant facilities at Biocon Park, Biocon Campus at 20th km and the Parenteral Fill-and-Finish Facility at Biocon Park. National Agency of Food and Drug Control, Indonesia audited the biologics facilities for insulin drug substance and drug product.
Environment, Health & Safety

Biocons EHS commitment is to become a zero incidents site in all activities or operations. This target will be met by: Strongly believing that any incident is preventable. Involving employees, contractors, suppliers and subcontractors in EHS initiatives through brainstorming, inspection, detection and correction, from project startup to completion. Conducting an advanced HAZOP study before a process is started. Strictly adhering to the work permit system/dened procedures set for the organization. In 2008, Biocon upgraded its occupational health systems from OHSAS 18001:1999 to OHSAS 18001:2007. As we grow, it is vital that we have proven EHS compliance assurance and risk management processes in place to deliver on our EHS Policy commitments. While our goals for water and
Quality & Regulatory

For the period April 2008 to May 2009, Biocon underwent approximately 48 successful compliance audits by various national and international customers and regulatory authorities, including the European Qualied Person (QP) for Insulin.
energy use efciency remain the same, we have decided to approach our commitment to biotechnology stewardship in a new way given the rapid growth that the Company is experiencing.
reports on key issues, as well as by inspection. Biocon complies with all applicable local, national and international legislations.
Water Use
Last year, water consumption/unit of product was 195.47m3. This year, consumption was reduced to 185.47 m3. The saving is around 10% as targeted in the previous year. Even though we have achieved our goal, we will continuously strive to further reduce water consumption at all levels of operation. Our target for the next nancial year is to reduce water consumption/kg of product by 15%.
EHS Responsibilities of Employees

Employee Participation and Accountability: Compliance with EHS regulations, policy, standards, rules and procedures is everyones responsibility. All employees are expected to help manage EHS risks and to act responsibly to protect themselves, co-workers, the environment and our facilities. Management Leadership, Participation and Accountability: From top management to front-line supervisors, all are responsible and accountable for EHS compliance and for managing EHS risks of their organizations. Their active participation includes collaborating across organizational lines to integrate EHS risk management practices into our routine business processes.
Commitment to Greenery
As part of our corporate responsibility we have planted 1,500 tree samplings in and around Biocon on June 5, 2008, World Environment Day.
Training
Biocon is committed to high quality training for all personnel working for or on behalf of the organization. We ensure that all our suppliers, contractors and others associated with our business are made to understand our EHS Policy. Last year, total man hours spent on training was 9,433. Our focus will continue to be better training, improved participation and additional training appropriate for routine and non-routine activities. By next scal, we aim to increase participation by 30% over the previous year.
EHS Management Systems

Starting early 2004, Biocon has been certied for ISO 14001 and OHSAS 18001. We have been formalizing our continual improvement processes through adoption of an EHS risk management framework within our product manufacturing and quality organizational units that is consistent with best practices. These units have the responsibility to manage a substantial portion of the EHS risks of the Company. This initiative will involve regular audits that result in a score that rates the effectiveness of the Companys environmental and safety protection management system processes. Our goal is to achieve world-class EHS Standards by 2010.
Regulatory Overview
A variety of governmental agencies oversee the safety and environmental performance of Biocons facilities. These agencies range from local re departments to local, regional and national environmental agencies. Generally, regulatory agencies monitor conditions and developments at Biocons facilities by requiring permits, notications and periodic
Corporate Social Responsibility

Health
ARY (Arogya Raksha Yojana) Primary Healthcare Clinics We have four clinics in the districts of Huskur, Bagalkot, Pavagada and Chikkballapur and two within Bangalore City in Austin Town and Kavalbyrasandra. Under construction are three more in Yarandahalli Village (Hennagara Gram Panchayat), Krishnarajpuram and Whiteeld (Bangalore City). Specialist Services: To augment our primary healthcare services with that of specialized care, we try to bring specialists from leading hospitals to our Clinics for consultation on a regular basis. To that end, a pediatrician from Narayana Hrudayalaya visits the Huskur Clinic once a week and a cardiac consultant from MSR NH Heart Centre is available for Echo, ECG and consultation at our Chikkballapur Clinic, also on a weekly basis. Additionally, the Chikkballapur Clinic offers telemedicine consultation with NH Hospital doctors and online ECG service, 6 days a week. Outreach Services: Health camps are an ongoing feature of all our Clinics. This year, the Bagalkot District hosted multispecialty camps organized in the villages of Kaladgi, Simmikeri, Kulageri. A team of 16 doctors from Jain Institute of Vascular Sciences (Bangalore), Narayana Hrudayalaya (Bangalore), Kerudi Hospital (Bagalkot), M.M. Joshi Eye Hospital (Hubli), Nijalingappa Medical College (Bagalkot) and the ARY Clinic (Kaladgi) worked together over a period of three days to treat 1800+ patients for a range of cardiac, diabetic, ophthalmic, ob/gyn illnesses as well as other minor ailments. The Chikkballapur District also beneted from two cardiac camps held in Nandi and Chikkballapur town. A total of 500 patients were attended to in these camps. Additionally, free medicines were supplied to Shri V. R. Deshpande Memorial Trust for its health camps conducted in the Uttar Kannada District.
Outreach services from our two urban Clinics saw our community health workers make house-to-house visits providing information on best practices in health and hygiene besides educating the neighbourhood about services available at ARY Clinics. Ragpickers Education & Development Scheme (REDS) Deephalli: REDS works with children who survive by collecting waste/ garbage off the streets of Bangalore. The organization runs a resident facility in Deephalli for 60 children between the ages of 4 to 14. The residence is located about 4 kms from the ARY Clinic in Huskur. Our ARY team visits REDS once a week to provide the young residents medical care. Medicines are subsidized and when necessary, children are taken to the Clinic for diagnostic tests.
Mobile Diabetic Foot Clinic: We continue to support the Diabetic Foot Clinic run by Jain Institute of Vascular Sciences. Its bi-monthly visits to our Clinics are much awaited and several 100 patients continue to benet from the advice, diagnosis and treatment provided.
ARY Micro Health Insurance In its fourth year of operation, the ARY Micro Health Insurance scheme has 70,000 members enrolled and is now available in Anekal, Bagalkot, Chikkballapur, Mysore, Mandya, Kolar and Bangalore City. In January 2008, the scheme was launched in Pavagada, a remote taluk located along the state border with Andhra Pradesh. Pavagada has poor access to medical care with the closest multi-specialty hospital 60 kms away in Tumkur. Biocon Foundation is working in collaboration with the Sri Ramakrishna Sevashrama to enroll people from local communities under ARY, thus ensuring that they have access to good affordable healthcare. Surgeries: During the year, 190 surgeries have been carried out of which 10 were heart surgeries. Since the ARY scheme was launched in 2005, over 1,200 patients have been provided tertiary and secondary care at our network of 30 hospitals spread across Karnataka.
management, common illnesses symptoms and treatment, the importance of completing a course of prescribed treatment to HIV/AIDS. Health Cities Narayana Hrudayalaya and Biocon Foundation have entered into a collaboration to offer high technology, affordable healthcare across India. The aim is to set up large health cities in every state capital and large hospitals in every district headquarter, strategically positioning them between government and corporate hospitals. The mission is to create at least 20,000 beds within the next 3-5 years in various parts of the country. The Bangalore Health City has a 1,000-bed heart hospital performing approximately 30 major heart surgeries a day; supported by an eye hospital that performs approximately 300-500 cataract surgeries daily; and a large orthopedic hospital Sparsh equipped with state-of-the-art infrastructure to perform complex orthopedic procedures and address every type of trauma and injury. In 2009, a 1,000-bed, modern cancer hospital will be commissioned at the health city project in Bangalore.
Education
Chinnara Ganitha This year, the Chinnara Ganitha program covered 70,000 children from Classes 1 to 7 in three districts Anekal, Chikkballapur and Coorg. A test of math comprehension and application was administered to 1,000 children in Coorg before they started using the books. This test will be repeated after one year of using the books to help us assess the efcacy of the program and ne tune content where necessary. Kelsa + With the help of Microsoft Research Labs, Bangalore, Biocon Foundation has started a digital literacy program for low income staff on all Biocon campuses. Kelsa+ provides free-touse open-access internet connected PCs for Biocons support staff, including housekeeping, gardening, maintenance, security, and transport workers.
Preventive Health Education

This program was extended to Bangalore City slums, Bagalkot, Chikkballapur and Rayakotta in Tamil Nadu. Workshops were conducted in schools and for womens groups on topics ranging from best practices in health and hygiene, the importance of sanitation, environmental hygiene waste
Through this program we hope to: Increase computer literacy among low income staff despite previous non-exposure, and varying age and literacy levels. Increase understanding, condence, aspirations, self-esteem and hope among our workers Improve communication skills of workers by providing access to English learning material After-School Hours Centre, Coorg Together with a local partner NGO Skanda Foundation, Biocon Foundation is starting an after-school centre for children from low income families. Most of these children are from local tribes, their parents work in coffee plantations or with the forest department. The centre will provide round the year access to computers and expose the children to a range of activities such as drama, music, pottery, spoken English and games.
Infrastructure
Sanitation Under phase I of the sanitation program, 700 toilets have been built in Huskur. Education on the importance of using toilets and keeping them clean continues with womens groups and in schools. In phase II, we will build 500 toilets in Hennagara Gram Panchayat, Anekal Taluk.
We are working with the local government to ensure that people use their toilets while also interacting with governmental agencies to provide equitable supply of water to all members of the community. Schools & Clinics Biocon Foundation has built two government primary schools and provided funds to build a compound wall for an existing government school in Hennagara, Anekal. We have also funded an ARY Clinic in Yarandahalli village.
ARY Micro Health Insurance Scheme 2008-09

Enrollment: Total Surgeries:
Type Ob/Gyn
> HYSTERECTOMIES & DELIVERIES
70,000 132
40 35 30 11 10 6
Cardiac
> OPEN HEART, ANGIOGRAMS & OTHER CARDIAC PROCEDURES
General Ophthalmology Urology/Nephrology Orthopedic
The Institute of Developing Economies (IDE), Japan is currently undertaking research to assess community perceptions and usage of micro insurance programs. The aim is to understand how the poor perceive ARY and micro insurance in general. It also focuses on identifying ways to make ARY more acceptable to potential clients.
Product Glossary
Cardiology
STATIX Active Ingredient: Atorvastatin
10 /20/40 mg
TELMISAT-H Active Ingredient: Telmisartan 40 mg + Hydrochlorothiazide 12.5 mg Indication: In uncontrolled hypertension
Indication: Controls elevated cholesterol levels
STATIX-EZ Active Ingredient: Atorvastatin

10 mg + Ezetimibe 10 mg
TELMISAT-R Active Ingredient: Telmisartan

40 mg + Ramipril 2.5/5 mg tablets
Indication: Controls extremely high levels of cholesterol
Indication: For better blood pressure control in diabetic hypertensives
STATIX-F Active Ingredient: Atorvastatin

10 mg + Micronised Fenobrate
ZARGO Active Ingredient: Losartan

25/50 mg
200mg Indication: Corrects cholesterol levels in Diabetic Dyslipidemics
Indication: Reduces high blood pressure
TELMISAT Active Ingredient: Telmisartan

20/40/80 mg tablets
ZARGO-H Active Ingredient: Losartan

50 mg + Hydrochlorothiazide 12.5 mg
Indication: Offers 24 hour blood pressure control
Indication: Controls blood pressure in high risk patients.
ZIGPRIL Active Ingredient: Ramipril

2.5/5 mg
CLASPRIN Active Ingredient: Aspirin

75/150 mg + Clopidogrel 75 mg
Indication: In patients with risk of CVD
Indication: For early and long term risk reduction in high risk ACS patients
THINRIN Active Ingredient: Clopidogrel 75/150 mg Indication: For early and long term risk reduction in high risk ACS patients
CLOTIDE Active Ingredient: Eptibatide 10ml bolus, 100ml infusion Indication: In patients of Acute Coronary Syndrome, undergoing Percutaneous Coronary Interventions
DYNALIX Active Ingredient: Enoxaparin 20mg, 40mg, 60mg Pre Filled Syringe Indication: In patients of Acute Coronary Syndrome and Prophylaxis of Deep Vein Thrombosis
MYOKINASE Active Ingredient: Recombinant Streptokinase for injection 1,50,000 IU Indication: In patients of Acute Myocardial Infarction BESTOR
ACTIBLOK - IPR Active Ingredient: Metoprolol Immediate & Patterned Release 25/ 50/100 mg tablets Indication: In patients of Hypertension, Angina, IHD and Heart Failure
Active Ingredient: Rosuvastatin Calcium 5/10mg tablets Indication: For the management of Dyslipidemia and Atherosclerosis
BRADIA Active Ingredient: Ivabradine 5 / 7.5 mg tablets Indication: For the management of Stable Angina
Diabetology
INSUGEN-R (Regular) INSUGEN -N(NPH) INSUGEN -30/70 & 50/50 (Biphasic) Active Ingredient: Each ml contains Human Insulin (rDNA origin), Ph Eur 40 IU Indication: In Diabetes, useful when oral agents fail to control blood glucose levels BLISTO Active Ingredient: Glimepiride
1/2/4 mg

INSUGEN-R (Regular) INSUGEN-N(NPH) INSUGEN-30/70 & 50/50 (Biphasic) Active Ingredient: Each ml contains Human Insulin IP 100 IU Indication: In Diabetes, useful when oral agents fail to control blood glucose levels
PIODART Active Ingredient: Pioglitazone

15 /30 mg
Indication: Increases Insulin secretion in Type 2 Diabetes by stimulating pancreas
Indication: Helps Insulin work better in Type 2 Diabetes
BLISTO-1MF/2MF/4MF Active Ingredient: Glimepiride

1/2/4 mg + Metformin1000 mg SR
PIODART-MF Active Ingredient: Pioglitazone

15 mg + Metformin ER 500 mg
Indication: In Type 2 Diabetes, when blood glucose is not controlled with a single medication
Indication: Improves blood sugar control when not controlled by monotherapy
Biocon Annual Report 2009 Products Glossary 37
TriGPM-1/2 Active Ingredient: Glimepiride 1/2 mg + Pioglitazone 15 mg + Metformin

500 mg SR
GMAB Plus Active Ingredient: GLA 100 mg + Methylcobalamin 1500 mcg + ALA 100 mg + Benfothiamine
100 mg + Ele. Zinc 15 mg
Indication: A triple drug combination for uncontrolled Type 2 Diabetes
Indication: Nutritional supplement
ZUKER-MF Active Ingredient: Gliclazide

80 mg + Metformin 500 mg SR
GABIL Active Ingredient: Gabapentin

300 mg + Methylcobalamin 500 mcg
Indication: Comprehensively controls hyperglycemia in Type 2 Diabetes
Indication: In Diabetic Neuropathy
BASALOG Active Ingredient: Each ml contains Insulin Glargine (rDNA Origin) 100 IU Indication: In Diabetes Mellitus, for 24 hrs basal insulin action
OLISAT Active Ingredient: Orlistat 60/120 mg Indication: Weight reducer
METADOZE-IPR Active Ingredient: Metformin

850 mg SR
Indication: Improves action of Insulin in Type 2 Diabetes
Nephrology
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 non-dialysis
CYCLOPHIL ME Active Ingredient: Cyclosporine USP 25/ 50/100 mg capsules Indication: Prophylaxis of allograft rejection in kidney transplantation and as a rescue therapy in patients with rejection episodes
ERYPRO safe Active Ingredient: Recombinant Human Erythropoietin Alpha injection in strengths of 2000 IU/ 3000 IU/ 4000 IU/ 5000 IU/
6000 IU/ 10000 IU
CYCLOPHIL ME (ORAL SOLUTION) Active Ingredient: Cyclosporine Oral Solution USP 100 mg/ml Indication: Prophylaxis of transplant rejection in organ transplantation and as a rescue therapy in patients with rejection episodes
Indication: For the treatment of patients with anemia due to chronic renal failure, either on dialysis or non-dialysis
TACROGRAF Active Ingredient: Tacrolimus

0.5/1/2/5 mg capsules
RENODAPT Active Ingredient: Mycophenolate Mofetil 250 mg capsules and 500 mg tablets Indication: Prophylaxis of transplant rejection in organ transplantation and as a rescue therapy in patients with rejection episodes
Indication: Prophylaxis of transplant rejection in organ transplantation and as a rescue therapy in patients with rejection episodes
RENODAPT-S Active Ingredient: Mycophenolic Acid 360 mg tablets Indication: Prophylaxis of transplant rejection in organ transplantation and as a rescue therapy in patients with rejection episodes
RAPACAN Active Ingredient: Sirolimus

1 mg tablets
Indication: Prevention of rejection and rescue therapy for rejection in renal transplantation
CeRACaL Active Ingredient: Cinacalcet hydrochloride equivalent to Cinacalcet 30/ 60 mg Indication: For the treatment of secondary hyperparathyroidism in dialysis patients
Oncology
BIOMAb EGFR Active Ingredient: Nimotuzumab 200 mg Indication: Humanized monoclonal antibody targeting epidermal growth factor receptor indicated for its use in head and neck cancer Abraxane Active Ingredient: Paclitaxel protein bound particles for injectable suspension (Albumin bound) Indication: 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: Erythropoietin Alfa Indication: For the treatment of chemotherapy induced anemia
NUFIL safe Active Ingredient: Filgrastim (rh - Granulocyte Colony Stimulating Factor) 300 g Indication: For the treatment of chemotherapy induced neutropenia
Biocon Annual Report 2009 Products Glossary 39
Financial Report
Biocon Limited
Financial Highlights Directors Report Management Discussion and Analysis Corporate Governance Report Financial IGAAP Stand Alone
42 47 54 63 77
Biocon Limited & Subsidiaries - IGAAP 113
Financial Highlights
*Based on GAAP Consolidated Financial Statements
Revenue
1673 1600
Revenues By Segment
1800 64
1400 1200 1000 800 600 400 200 793 728 990 (Rupees in Crores) 1090
1600 225
(Rupees in Crores)
1400
1200 36 1000 4 135 800 16 66 90 5 101 85 1384 109 176 46
05
06
07 (Fiscal Year)
08
09
600
400 556 602
832 742
200
05 Pharma Enzymes
06
07
08 Custom Research Others
09
Prots (From Operations)

450 400 350 300 250 200 150 100 50 PBIDT PBT PAT 05 06 07 08 09 239 215 197 234 202 174 211 200 287 260 231 240 225 342 387
(Rupees in Crores)
Current Ratio
900 800 1.9 700 1.8 (Rupees in Crores) 600 500 400 300 200 100 1.1 277 249 140 1.4 360 260 275 301 530 535 437 1.8 792
Current Asset Current Liabilities Current Ratio 05 06 07 08 09
Net Assets
2500
2000 (Rupees in Crores) 1778 1500 1026 1000 841
2106
1299
500
Debt: Equity
05 06 07 08 09 2500 2035 2000 (Rupees in Crores) 1739 1500 1256 1000 993 105 187 255 524
817 76
1484 888 1069
1511
500 741
05 Debt Equity
06
07
08
09
Biocon Annual Report 2009 Financial Highlights 43
Networth
1600 1484 1400 (Rupees in Crores) 1200 1069 1000 800 600 741 888
EPS Before Exceptional Items & Book Value Per Share

1511 80 71.7 70 70.5
60 (Rupees in Crores) 50.9 41.9 40 34.5 30
400 200
50
05 Networth
06
07
08
09
20 10.4 10 10.3 11.6 12.5
9.1
0 05 Book Value EPS before Exceptional Items 06 07 08 09
Revenues (By Company)

1100 1000 900 849 800 (Rupees in Crores) 700 600 500 400 Syngene 300 200 100 66 1 05 06 98 6 07 9 08 18 09 21 3 206 132 160 Clinigene AxiCorp Biocon SA 480 Biocon 689 661 912 963
R&D Spend
70 60 7.1% (Rupees in Crores) 50 6% 40 30 3.6% 20 14 10 10 10 20 21 18 15 Revenue R&D Capital R&D R&D as % of Biocon Revenue 05 06 07 08 09 39 5.8% 47 60 7.8%
Return On Net Assets

2000 1800 33% 1600 (Rupees in Crores) 1400 1200 1000 19% 800 603 600 400 200 199 174 200 225 240 Operational PAT Fixed assets, net working capital & intangible assets Return on net assets 05 06 07 08 09 16% 926 17% 14% 1219 1739
1304
Distribution Of Revenues
1% 7% 1% 16%
14%
50%
Material Costs Employee Costs

11%
Interest Depreciation Tax Operational PAT
Other Expenses
Biocon Annual Report 2009 Financial Highlights 45
Biocon Limited
Directors Report
Dear Shareholders, We are pleased to present the Thirty First Annual Report on business and operations together with the audited nancial statements and the auditors report of your Company for the nancial year ended 31st March 2009. The nancial highlights for the year under review are given below: Corporate Results: Particulars for the year ended March 31, Total Revenues Total Expenditure Prot before Interest Depreciation and Tax Interest Depreciation Prot before Tax and Exceptional items Income Tax Prot after Tax, before Exceptional items Exceptional items (net of tax) Prot after Exceptional Items Surplus b/f from previous year Prot available for appropriation Proposed dividend on equity shares Tax on proposed divided Transfer to General Reserve Balance in Prot and Loss account Consolidated Results (Under Indian GAAP): Particulars for the year ended March 31, Total Revenues Prot before Interest Depreciation and Tax Interest Depreciation Prot before Tax and Exceptional items Income Tax Prot after Tax, before Exceptional items Minority Interest Share of losses in associate company Prot after Tax and Minority Interest, before exceptional items Exceptional items (net of tax) Prot after Exceptional Items 2009 16,732 3,878 176 1,102 2,600 119 2,481 (71) (7) 2,403 (1,472) 931 2009 9,871 6,937 2,934 49 743 2,142 104 2,038 (920) 1,118 7,705 8,823 600 102 112 8,009 Rs in Millions 2008 9,292 6,511 2,781 29 690 2,062 106 1,956 2,394 4,349 4,376 8,725 500 85 435 7,705 Rs in Millions 2008 10,902 3,350 102 939 2,309 129 2,180 65 2,245 2,394 4,639
Results of Operations: During the year under review, consolidated revenues grew by 53%, Prots (EBITDA) and Prot after Tax, before exceptional items grew by 16% and 7% respectively. The Net Prot for the year was impacted by loss under exceptional item of Rs 1,472 million, on account of Mark to Market (MTM) loss incurred due to volatility in the foreign exchange rates. Inspite of the global economic meltdown the company was able to achieve growth due to its strong focus on operational efciencies and aggressive defending of market position in the face of competition in the generic API space. A detailed performance analysis is given in the Management Discussion and Analysis, which is annexed to this report. Appropriations Dividend Directors are pleased to recommend a dividend of 60%, which is Rs 3 per equity share. Transfer to Reserves We propose to transfer Rs 112 millions to the General Reserves. An amount of Rs 8,009 Million is proposed to be retained in the prot and loss account. Consolidated nancial statements: The consolidated nancial 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 nancial statements together with Auditors Report thereon form part of the Annual report. The consolidated net prots of the Group before exceptional items for the year ended 31st March 2009 amounted to Rs 2,403 Million as compared to Rs 2,245 Million in the previous nancial year. For the year under review, prot (after exceptional items) amounted to Rs 931 Million, resulting in basic earnings per share Rs 4.8 per share. Business Operations overview and Outlook: During the year, total revenues of the Company increased by 6% from Rs 9,292 Million to 9,871 Million. Statins registered a 12% growth and Immunosuppressants basket grew by 35% for the year under review. Our branded formulations business under our Healthcare umbrella has made rapid strides in garnering market share for our key brands in Cardiology, Diabetology, Nephrology and Oncology. We see this as being a high growth segment in our business strategy going ahead. Our future prospects are being driven by a robust R&D engine where we are making good progress both in our bio-generics and novel biologics programs. This will call for signicant incremental investments going forward which are expected to realize signicant returns over the medium to long term. Patient enrollment is well under way in our Phase III clinical trials for IN105 (Oral Insulin). Our T1h (Anti CD6) monoclonal antibody program has completed patient recruitment for Phase II clinical trials for both Rheumatoid Arthritis as well as Psoriasis. On the bio-generics front, our development plan for regulatory acceptance by EMEA and USFDA of our recombinant human Insulin is also on track. Insulin analogue, Glargine is now set to enter into a similar development path for global registrations. Subsidiaries and Joint Ventures: Syngene International Limited: Syngene International Limited is a wholly owned subsidiary of your Company focused on Custom Research & Synthesis. In March 2009, Syngene opened a fully dedicated research and development facility for Bristol-Myers Squibb, USA (BMS). The 200,000 square-foot facility is located at Biocon Park. During the year under review Syngene increased its headcount to 1,240 from 908 in the previous year. For the current nancial year, Syngene registered a 29% growth in revenues from Rs 1,604 million in the previous year to Rs 2,065 million. Operational margin (EBITDA) increased from Rs 517 Million to Rs 606 Million representing a 17% increase. During the year, Syngenes prots were impacted by MTM loss of Rs 551 million due to volatility in the foreign currency rates. After considering the exceptional items, Syngene incurred a net loss of Rs 225 million for the year ending March 31, 2009. Syngene earned net prot before exceptional items of Rs 326 million for the year as against Rs 331 million for the previous year. During the year, Syngene incurred MTM losses of Rs 551 million due to volatility in the foreign exchange rates. After considering the exceptional items, the company incurred a net loss of Rs 225 million. Clinigene International Limited: Clinigene International Limited is a wholly owned subsidiary of your Company focused on Clinical Development. For the year under review, Clinigene registered revenues of Rs 330 million as against Rs 227 million in the previous year and earned a prot of Rs 45 million as against a prot Rs 24 million in the previous year. Being a full-service clinical research organization, covering early- to late phase clinical development programs, Clinigene is well positioned to cater to clinical development requirements for its partners globally. Biocon Biopharmaceuticals Private Limited: Biocon Biopharmaceuticals Private Limited (BBPL) is Biocons 51:49 JV with CIMAB SA, to manufacture monoclonal antibodies and other Recombinant Therapeutics. BBPL commenced full edged operations only recently and has primarily been engaged in the manufacture of BIOMAb-EGFR for oncology application. For the year under review, BBPL earned revenues of Rs 186 Million as against Rs 137 Million and pared its losses to Rs 51 Million from Rs 133 million in the previous year. During the ensuing nancial year, it expects to receive product approvals for new indications and commence sales to global markets.
FINANCIAL REPORT Biocon Limited
Biocon SA In April 2008, Company incorporated a wholly owned subsidiary Biocon SA in Switzerland. Biocon SA is primarily engaged in development and marketing of biopharmaceuticals in the European region and has commenced Clinical Development of Insulin in the European markets. During the year, Biocon SA acquired 78% stake in AxiCorp GmbH. Biocon SA, during the year has registered revenues of Rs 34 Million and recorded prot of Rs 29 Million. AxiCorp GmbH: AxiCorp is a specialized Pharma marketing and distribution company based in Germany. Biocon acquired 78% stake in AxiCorp GmbH through its wholly owned subsidiary Biocon SA. For the current nancial year i.e. from date of acquisition to December 2008, AxiCorp earned revenues of Rs 4,797 million and a prot of Rs 100 million. The year under review being the initial year of consolidation previous years numbers are not applicable. On a consolidated basis AxiCorp has contributed 29% to the group revenues and 7.5% to the group net prot. NeoBiocon FZ LLC: 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. During the year under review, NeoBiocon has set-up its operations and has successfully commenced marketing of oncology products in the GCC markets. NeoBiocon is also in the process of obtaining regulatory approvals for an entire range of formulations and expects to launch the same. Biocon Research Limited: During the year, the Company formed a wholly owned subsidiary M/s. Biocon Research Limited to undertake discovery led development research work in biologics, antibody molecules and proteins. Accounts of subsidiary companies: The Company has obtained exemption from the Government of India, Ministry of Company affairs from attaching the nancial 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. Capital Structure During the year under review, the company issued Bonus shares in the ratio of one equity share for every equity share held by capitalizing the reserves in the securities premium. Correspondingly the paid-up share capital has increased from Rs 50 Crores to Rs 100 Crores. 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 31 March 2009 are set out in the Annexure to the Directors Report 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 certicate from the auditors conrming 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 was carried out by Dr Neville Bain, 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 process included a tailored questionnaire which was circulated to each of the Board members and Core management team which covered leadership, board composition, board meetings, professional development of Board members, performance evaluation, management development, succession planning, and the control environment. The feedback from the review was provided in the form of a written report and presentation to the Board, which then discussed the ndings. The review concluded with nal comments which showed overall condence in the company and the Boards oversight of the performance against the strategic plan. There were no issues with the board composition and internal controls were considered robust. While there were no areas considered to be weak but there were areas where the processes and the emphasis given could be strengthened. Areas identied for improvement included management development, succession planning, quality and timeliness of board papers, induction process for new board members and continuing with the performance evaluation on an ongoing basis. The Board is currently implementing these improvements Directors: Mr. John Shaw and Mr. Suresh N. Talwar retire by rotation at the ensuing Annual General Meeting, and being eligible, offer themselves for re-appointment. Auditors: The Statutory Auditors M/s. S. R. Batliboi & Associates, Chartered Accountants, Bangalore, retire at the ensuing Annual General Meeting, and have conrmed their eligibility and willingness to accept ofce, if re-appointed.
Biocon Annual Report 2009 Financials 49
Management Discussion and Analysis Report The report as required under the Listing agreements with the Stock Exchanges is annexed and forms a part of the Directors Report. Cumulative disclosure under the stock option scheme as on 31st March 2009: Disclosure of the particulars of stock options schemes as on the above date, as per SEBI guidelines:
Particulars First Grant (Post Equity Share split and bonus) 3,337,580 Rs 0.2 N.A. 3,337,580 3,337,580 3,337,580 Nil None Rs 678,016 Nil Nil Second Grant (Post Equity Share Split and Bonus) 132,055 4,900 Rs 5 each Rs 2.5 each 136,955 129,605 118,825 10,290 None Rs 589,225 7,840 7,840 Third Grant (Post Equity Share Split and Bonus) 387,250 57,350 Rs 315 each Rs 157.5 each 426,450 238,775 238,775 93,500 None Rs 74,938,500 112,950 112,950 Fourth Grant (Post Equity Share Split and Bonus) 3,114,054 2,657,284 20% discount to Market Price 2,176,578 179,280 27,380 977,332 None Rs 46,458,500 1,997,298 5,293,888
a. i) Options Granted (Net of Options cancelled) b. ii) Additional Options on account of bonus entitlement + Exercise price i) Pre-bonus of 2008 ii) Post-bonus of 2008 c. Options vested d. Options exercised e. Total number of Equity Shares to be transferred from the ESOP Trust as a result of exercise of options f. Options lapsed g. Variation in the terms of options h. Money realized by exercise of options i. Option pending exercise j. Total number of options in force k. Person-wise details of options granted to: i) Directors and key managerial employees
Please see Table (1) below for details regarding options granted to Directors and key managerial employees Nil
Nil
Nil
Please see Table (1) below for details regarding options granted to Directors and key managerial employees Nil
ii) any other employee who received a grant in any one year amounting to 5% or more of the options granted during that year iii) Identied employees who have been granted options during any one year equal to or exceeding 1% of the issued apital (excluding outstanding warrants and conversions) of the Company at the time of grant l. Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of options
Nil
Nil
Nil
Nil
Nil
Nil
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 2003, 2004, 2005 and 2006.
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 January of 2005, 2006, 2007 and 2008.
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.
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 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) No lock-in, subject to a minimum vesting period of 1 year.
m. Vesting schedule
n. Lock-in
No lock-in, subject to a minimum vesting period of 1 year.
+ Consequent to the issue of bonus shares in the ratio 1:1 on Sept 15, 2008, employees who had not exercised their options would be entitled for bonus based on ESOP Plan (Eligibility for corporate action).
(THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK)
Table (1) details regarding options granted to Directors and key managerial employees are provided below: Sl. Name of Director or key managerial No. personnel Directors 1. 2. 3. 4. 5. 6. 7. 8. Dr. Neville Bain Prof. Charles Cooney Dr. Arun Chandavarkar Mr. Shrikumar Suryanarayanan Mr. Murali Krishnan K N Dr. Goutam Das Mr. Rakesh Bamzai Mr. Chinappa M B 195,902 195,902 195,902 195,902 195,902 195,902 122,430 122,439 Nil Nil Nil Nil Nil Nil Nil 75,000* First Grant (Post Equity Share split and bonus) (No. of Options Granted) Fourth Grant (Post Equity Share split and bonus) (No. of Options Granted)
Key managerial employees (of the group)
*Adjusted for 2008 Bonus issue. Fixed Deposits: The Company has not accepted any xed deposits from public. Directors responsibility statement: Pursuant to Section 217(2AA) of the Companies Act, 1956, the Board of Directors hereby conrm as under: In preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; 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 nancial year and of the prot of the Company for that period; We have taken proper and sufcient 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; 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 The information required to be furnished under 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. Acknowledgements Your Directors greatly appreciate the commitment and dedication of all the employees at all levels that has 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. Your Directors thank the Government of India, Government of Karnataka, Ministry of Commerce and Industry, Ministry of Finance, Ministry of Information Technology and Biotechnology, Customs and Excise Departments, Income Tax Department, CSEZ 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, 2009
John Shaw Vice Chairman
Annexure to the Directors Report

Particulars under Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 for the year ended 31st March 2009
A. Conservation of Energy
During the year, the Company has taken signicant measures to reduce the energy consumption by using energy-efcient machines and equipment.
FORM A
For the year ended March 31, 2009 For the year ended March 31, 2008
A. Power and Fuel Consumption

1. Electricity a. Electricity Purchase Unit (000) Total Amount (Rs in lakhs) Rate per Unit b. Own Generation from Diesel Generator Unit (000) Total Amount (Rs in lakhs) Rate per Unit 2. Furnace Oil Unit (K. Ltrs ) Total Cost (Rs in lakhs) Average/K. Ltrs 7,150 1,766 24,695 8,536 1,696 19,869 16,493 1,490 9.04 38,009 3,194 8.4 77,280 3,620 4.68 55,288 2,464 4.46
B. Consumption per unit of Production

The disclosure of consumption gures per unit of production is not meaningful as the operations of the Company is not power intensive and involves multiple products. FORM B 1. Specic 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 2. Benets derived as a result of R&D activities. - Scale-up of key Biosimilars with improved productivity and process efciencies - 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 - Generation of high quality data compliant with International Regulatory requirements - Established intellectual property with 924 Patents/ PCT applications led in Indian and International markets - Safe and environment friendly processes 3. 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 - Progress our R&D programs in respect of Monoclonal antibodies against CD6, EGFR, CD20 and Oral insulin
4. Expenditure on scientic Research & Development:

Rs in million March 31, 2009 (a) Capital (b) Recurring Total Total R & D expenditure as percentage of sales 146 598 744 7.5% March 31, 2008 175 471 646 6.9%
5. Technology Absorption, Adoption and Innovation:

No technology was imported by the Company during the year.
6. Foreign Exchange earnings and outgo:

Foreign exchange earned and used for the year ended March 31, 2009. Rs in million March 31, 2009 Gross Earnings Outow* Net foreign exchange earnings 4,718 3,362 1,356 March 31, 2008 5,226 3,255 1,971
*For details please refer to information given in the notes to accounts to the annual accounts of the Company in Schedule 23 Notes to accounts Item (d) (iv) to (vii).
Section 212
Statement pursuant to Section 212 of the Companies Act, 1956 relating to Holding Companys interest in the Subsidiary Companies
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 (b) Extent of interest on above dated 2. Net aggregate amount of the Subsidiary Company's Prot/ (Loss) so far it concerns members of the Holding Company and (a) is not dealt in the Company's account (i) for the nancial year ended March 31, 2009 (ii) for the previous nancial years, since it became a subsidiary (b) is dealt in the Company's account (i) for the nancial year ended March 31, 2009 (ii) for the previous nancial years, since it became a subsidiary Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil (224,950) 1,716,420 45,302 (27,342) (26,385) (165,231) (1,987) (2,349) 29,479 71,143 March 31, 2009 28,74,830 equity shares of Rs 10/- each 99.99% Clinigene International Limited March 31, 2009 50,000 equity shares of Rs 10/- each 100% Biocon Biopharmaceuticals Private Limited March 31, 2009 6,732,000 equity shares of Rs 10/- each 51% Biocon Research Limited March 31, 2009 500,000 equity shares of Re 1/- each 100% NeoBiocon FZ LLC March 31, 2009 150 equity shares of 1,000/- AED each 50% Biocon SA AxiCorp GmbH December 31, 2008 177,100 equity shares of 1/- Euro each 71%
March 31, 2009 100,000 equity shares of 1/- CHF each 100%
Managements Discussion and Analysis

(All amounts in Indian Rupees thousands, except share data including share price and amounts expressed in foreign currency)
1. INDUSTRY STRUCTURE AND DEVELOPMENT

The global pharmaceutical market was $770 billion in 2008 (IMS data) and biotechnology drugs/biologics accounted for $120 billion and generics for $80 billion of the global market. The three top therapeutic categories were CNS drugs at $118 billion, cardiovascular drugs at $ 105 billion and Cancer drugs at $70 billion of sales. In biologics the top three categories were monoclonal antibodies at $33 billion, Vaccines at $24 billion and TNF inhibitors at $18 billion sales in 2008.
2. OUTLOOK
Global pharmaceutical sales is expected to rise at a lower rate of 4.5%-5.5% this year to top $820 billion, but the US market will grow by 4% to reach $292-$302 billion, as per the US National Association of Pharmaceutical Representatives (NAPRx). Initial expectations for growth in the US market of 4%-6% have been revised downward because of the economic climate, and also reect continuing patent expiries and fewer new product launches this year. Nevertheless, the healthcare industry continues to be a star in the US economy, says NAPRx, which is the largest US trade association for pharmaceutical sales people. The top ve European Union (EU) countries - France, Germany, Italy, Spain and the UK are expected to grow 3%-4% this year, reaching sales of $162-$172 billion. EU-wide growth will be driven by the aging population and rising demand for preventive care but tempered by the increased impact of Health Technology Assessments (HTAs), the use of contracting by payers as a means of controlling costs and the decentralisation of government healthcare budgets. It is estimated that Japan, the worlds second-largest market, will see higher growth, between 4%-5% to $84-$88 billion, boosted by approvals for new anti-cancer agents, disease prevention programs and the absence this year of the governments biennial price cuts. The pharmerging markets - China, Brazil, India, South Korea, Mexico, Turkey and Russia - are expected to grow at a combined rate of 14%-15%, producing overall sales of $105-$115 billion. Along with the pharmaceutical industrys growing focus on these high-growth markets, they are beneting from increased government spending on healthcare and broader public and private healthcare funding, which is driving greater access to and demand for innovative medicines.
3. OPPORTUNITIES
The surge in generics together with the expected patent expiry of key immunosuppressant drugs provides Biocon with attractive opportunities in the near to medium term. In addition the opening up of bio-similars in US and Europe is seen as a large opportunity in the medium term. Success in Biocons Research and Development initiatives into new drug discovery could also yield signicant benets.
4. RISKS & 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 signicant additional competition in key products could erode our market shares and result in reduced prices and protability. 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 US Dollar. The Company carries out a detailed Risk Management exercise or purposes of identication 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.
5. 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 qualied 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 rm of Chartered Accountants. The Audit committee addresses signicant issues raised by the Internal & Statutory Auditors.
6. HUMAN RESOURCES:
Biocon recognizes that nurturing and recruiting the best talent is vital to the long term success of the enterprise. Employees are provided with continuous opportunities for active learning and development which are viewed as key drivers of their personal growth and the success of Biocon. The remuneration structure links rewards directly with performance. This performance management system reinforces our work ethics. Employees also participate in the Employee Stock Option Plan and about 10% of the Company is owned by Employees and a Trust formed for the benet of Employees. The total employee strength of the Company and its subsidiaries as at March 31, 2009 was 3,673 as against 2,772 at the end of the previous nancial year.
7. CAUTIONARY STATEMENT:
The statements made in this report and those appearing elsewhere, may be forward looking statements that set forth anticipated results based on management plans and assumptions. These statements are likely to address the Companys growth strategy, nancial results, product development, product approvals, product potential and development programs. Achievement of future results is subject to
risks, uncertainties and inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from past results and those anticipated, estimated or projected. Among the factors that could cause actual results to differ materially are: a. success of our research and development initiatives ; b. the impact of existing and future regulatory provisions on product exclusivity ; c. competitive developments affecting our product portfolio ; d. interest rate and foreign currency exchange rate uctuations ; e. statutory legislations and regulations affecting domestic and foreign operations, including tax obligations; and other allied factors
8. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT OF OPERATIONAL PERFORMANCE

Overview The nancial statements have been prepared in compliance with the requirements of the Companies Act, 1956, and Generally Accepted Accounting Principles (GAAP) in India. BALANCE SHEET - MARCH 31,
SOURCES OF FUNDS Shareholders Funds Share Capital Reserves and Surplus Loan Funds Secured loans Unsecured loans Deferred Tax Liability APPLICATION OF FUNDS Fixed Assets Cost Less: Accumulated depreciation Net book value 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 Net Current Assets 1,945,224 3,101,713 60,427 2,662,748 7,770,112 2,956,942 4,813,170 15,798,588 Share Capital (Issued, Subscribed & Paid up) Year ended March Balance at the beginning of the year Bonus Share issued during the year Balance at the end of the year 2009 Nos. 100,000,000 100,000,000 200,000,000 Amount 500,000 500,000 1,000,000 2008 Nos. 100,000,000 100,000,000 Amount 500,000 500,000 1,677,350 2,256,629 81,244 1,235,457 5,250,680 2,345,166 2,905,514 15,119,053 16% 37% -26% 116% 48% 26% 66% 4% 9,486,156 2,733,315 6,752,841 376,872 7,129,713 388,850 3,466,855 8,525,081 2,006,485 6,518,596 646,341 7,164,937 276,000 4,772,602 11% 36% 4% -42% 0% 41% -27% 1,014,565 624,862 1,639,427 410,408 15,798,588 892,634 546,219 1,438,853 398,237 15,119,053 14% 14% 14% 3% 4% 1,000,000 12,748,753 13,748,753 500,000 12,781,963 13,281,963 100% 0% 4%
(All amounts in Indian Rupees thousands)

2009 2008 Change %
The company has only one class of shares viz. equity shares of par value of Rs 5 each. The authorized share capital of the company was raised from Rs 20,000 in 2002-03 to Rs 1,100,000 in 2008-09 represented by 220,000,000 equity shares of Rs 5 each. The Company carried out a sub-division of equity shares of face value of Rs 10 each into 2 equity shares of Rs 5 each. Consequently, the issued, subscribed and paid -up capital of Rs 18,377 has been divided into 3,675,300 shares of Rs 5 each. The Company in 2003-04 issued 86,324,700 equity shares of Rs 5 each as bonus shares in the ratio of 23.4877958 shares for every one share held to the shareholders existing as on November 11, 2003, which was the approved record date for this purpose, by capitalisation of the balance in the prot and loss account of Rs 431,624. In March 2004, the Company made an IPO of 10,000,000 fresh equity shares of Rs 5 each at a price of Rs 315 per share. The Company in 2008-09 allotted 100,000,000 equity shares of Rs 5 each as bonus shares in the ratio of one share for every one share held to the shareholders on September 15, 2008 by capitalisation of reserves in the securities premium account of Rs 500,000.
Reserves and surplus The total reserves and surplus has decreased from Rs 12,781,963 in March 31, 2008 to Rs 12,748,753 in March 31, 2009 due to capitalisation of reserves to the extent of Rs 500,000 for issue of bonus shares. Other movements are on account of net prots made during the year of Rs 1,117,997, net of exceptional item of Rs 920,124,(which is on account of MTM loss), adjusted for the proposed dividend of Rs 701,970 inclusive of Dividend distribution tax. Loan funds There has been an increase in the loans outstanding from Rs 1,438,853 in March 2008 to Rs 1,639,427 in March 2009. Secured loans increased by Rs 121,931 on account of increase in borrowings. Unsecured loans increased by 78,643 primarily on account of accumulation of interest free deferred sales tax liability in respect of sales made during the year. The deferred sales tax liability outstanding to the extent of Rs 1,392 is repayable in four years in eight equal half yearly installments commencing from August 2007. The sales tax liability outstanding to the extent of Rs 610,158 deferred over a period of 12 years is repayable over ve years in ten equal half yearly installments commencing August 2012. During the year, the Department of Scientic and Industrial Research (DSIR) has sanctioned nancial assistance of Rs 17,000 to the Company for part nancing one of its research projects. Of the said sanctioned amount, the company has received the rst installment of Rs 10,000 during the year. The Research project is ongoing and is expected to be commissioned in June 2009.The assistance is repayable in the form of royalty payments post commercialization of the product in ve annual installments Fixed Assets Cost Less: Accumulated depreciation Net Block Net Asset turnover ratio Add: capital work in progress Net xed assets 2009 9,486,156 2,733,315 6,752,841 1.35 376,872 7,129,713 2008 8,525,081 2,006,485 6,518,596 1.35 646,341 7,164,937 % 11% 36% 4% -42%
During the year 2009, the Company has capitalized xed assets to the extent of Rs 961,075. The Company has started depreciating these assets over their estimated useful lives during the year thereby resulting in an increase in accumulated depreciation. The capital work in progress as at March 31, 2009 represents advances paid towards acquisition of xed assets and the cost of assets not put to use. The company has a capital commitment of Rs 106,501 as at March 31, 2009 as compared to Rs 391,260 as of March 31, 2008. Investments The Company as at March 31, 2009 held investments of Rs 3,466,855 as compared to Rs 4,772,602 as of March 31, 2008. During the year, the Company formed a wholly owned subsidiary M/s. Biocon Research Limited to focus on research and development activities. The Company also formed a wholly owned subsidiary Biocon SA, Switzerland to focus on the research and market development in European region. During the year ended March 09, the Company has subscribed to 100,000 shares amounting to Rs 3,960. Additional investments during the year include investment of Rs 50,750 in IATRICa Inc. The company continues to hold its investments in 2 wholly owned subsidiaries Syngene and Clinigene and joint venture companies viz., Biocon Biopharmaceuticals Private Limited, Neo Biocon. The joint research collaboration program with Vaccinex is on stream and no further investments were made during the year ending March 31, 2009 by the Company. Intangible Assets In March, 2006 Company acquired patents relating to certain technologies for oral insulin, oral BNP and Apaza (collectively IPs) for a total cost of Rs 521,138 from Nobex. In December 2007, as a matter of prudence, the Company recorded a total impairment of Rs 220,000, in respect of acquired by the Company during the year ended March 31, 2006, for drug development. The Company determined adverse reports and decline in sales trend of Natrear / Neseritide, a competing drug. The Oral Insulin product is in the development stage, and hence no amortisation has been recorded by the Company. During the year ended March 31, 2009, the Company acquired marketing rights for certain products from BBPL for a sum of Rs 128,850. These rights give the Company an exclusive right of marketing the products in certain territories. Pending receipt of regulatory approvals from the authorities of such countries, no amortisation has been recorded by the Company. Current assets, loans and advances The current assets, loans and advances have increased from Rs 5,250,680 to Rs 7,770,112, an increase of 48% over the previous year. This was mainly due to -Increase in inventories from Rs 1,677,350 to Rs 1.945,224 largely on account of increase in purchase of raw materials and work-inprogress by Rs 33,671 and Rs 242,520 respectively as compared to the previous year.
-Sundry debtors stood at Rs 3,101,713 (net of provision for doubtful debts of Rs 56,231) as at March 31, 2009 as compared to Rs 2,256,629 (net of provision for doubtful debts of Rs 40,454) as at March 31, 2008. These debtors are considered good and realisable. Provision for doubtful receivables as on March 31, 2009 has been made for debtors overdue for more than 360 days subject to review of collectability of specic dues. Debtors represent an outstanding of 109 days and 99 days of revenue as at March 31, 2009 and March 31, 2008 respectively on a moving average of 3 months sales Provision for doubtful debts represents 0.17% and 0.12% of gross sales for the year ended March 31, 2009 and March 31, 2008 respectively. Loans and advances have increased from Rs 1,235,457 to Rs 2,662,748 as on March 31, 2009. This increase is mainly on account of increase in loan to subsidiary / joint venture company, which has increased from Rs 581,540 to Rs.2,024,938 and MAT credit entitlement of Rs 87,068. Current liabilities and provisions The current liabilities and provisions have increased by 26 % from Rs 2,345,166 as at March 31, 2008 to Rs 2,956,942 as at March 31, 2009. This increase is primarily due to proposed dividend of Rs 600,000 (60%, post bonus share capital) for the year ended March 31, 2009 as against 500,000 (100%) in the previous year and deferred revenues of Rs 484,424.
Revenues PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2009
2009 INCOME Gross sales Less: Excise duty Net sales Licensing and Development fees Other income EXPENDITURE Material costs Employee costs Operating and other expenses Interest and nance charges PROFIT BEFORE DEPRECIATION, EXCEPTIONAL ITEMS AND TAXES Depreciation and Amortisation (net of transfers) PROFIT BEFORE TAXES AND EXCEPTIONAL ITEMS Provision for Income Tax Current Tax Less: MAT Credit Entitlement Deferred taxes Fringe benet tax PROFIT AFTER TAXES AND EXCEPTIONAL ITEMS EXCEPTIONAL ITEMS NET OF TAX NET PROFIT FOR THE YEAR Balance brought forward from the previous year PROFIT AVAILABLE FOR APPROPRIATION Proposed dividend on equity shares Tax on proposed dividend Transfer to general reserve BALANCE, END OF THE YEAR Biocons total income for the year ended March 31, 2009 has three components: Sales of Biopharmaceuticals products; Technical Licensing fees; and Other income. 164,394 (87,068) 12,171 14,470 2,038,121 (920,124) 1,117,997 7,704,962 8,822,959 600,000 101,970 111,799 8,009,190 93,036 668 12,680 1,955,591 2,393,654 4,349,245 4,375,617 8,724,862 500,000 84,975 434,925 7,704,962 77% N.A. 1722% 14% 4% -138% -74% 76% 1% 20% 20% -74% 4% 4,041,146 820,641 2,075,027 49,371 6,986,185 2,884,918 742,830 2,142,088 3,914,284 696,263 1,900,804 28,698 6,540,049 2,751,955 689,980 2,061,975 3% 18% 9% 72% 7% 5% 8% 4% 9,291,494 257,134 9,034,360 89,005 747,738 9,871,103 8,587,496 266,657 8,320,839 448,413 522,752 9,292,004 8% -4% 9% -80% 43% 6% 2008 %
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, 2009 and March 31, 2008:
Sales Sale of Products Biopharmaceuticals Enzymes Technical Licensing Fees Other Income Total Income 91.5% 0.9% 7.6% 100.0% 84.6% 4.9% 4.8% 5.6% 100.0% 2009 2008
Share of revenues from net sales between domestic and export markets are as follows: Share of revenues Domestic Exports Total 2009 4,405,521 4,628,839 9,034,360 % 48.8% 51.2% 100.0% 2008 3,544,564 4,776,275 8,320,839 % 42.6% 57.4% 100.0%
Biocons net sales grew by 8% to Rs 9,034,360 in 2008-09 while the total income grew by 6% to Rs 9,871,103. Companys export revenues from product sales have decreased by 3%, and domestic sales have increased by 24%. The increase in domestic sales are mainly driven by increase in sale of bio-pharmaceutical products. Segment and product-wise performance The segmentation of Biocons sales is as follows: 2009 Biopharmaceuticals Enzymes Total 9,034,360 9,034,360 % 100.0% 100.0% 2008 7,863,823 457,016 8,320,839 % 94.5% 5.5% 100.0%
There was no sale from Enzymes in scal 2009 since the Company divested the enzymes business effective 1st October 2007. Bio-pharmaceuticals In Pharma, we focus on the manufacture and marketing of APIs that require fermentation and synthetic chemistry skills. Our biopharmaceuticals business contributed 100% & 94.5% of our sales in 2008-09 and 2007-08 respectively. Statins: Statins are cholesterol-lowering agents used to treat and prevent coronary diseases and are amongst the largest selling drugs worldwide. The Companys statins portfolio presently comprises lovastatin, simvastatin, pravastatin, atorvastatin besides other statins under development. Biocon is currently exporting simvastatin to the US, Europe, Japan and Canada, lovastatin to the U.S. and pravastatin to the US and European markets. Company continues to have pricing pressure in this segment due to increased competition and changing industry price dynamics. The US patent for Simvastatin and Pravastatin expired during scal 2007 and the company has commenced exports to USA in the 2nd half of scal 2007. 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. In addition to the sales of MMF and tacrolimus in domestic market, company has also commenced the exports to US Market and certain countries in the EU region. Company has led a DMF for MMF, tacrolimus and sirolimus to address the US markets following patent expiry. Other biopharmaceutical products: Biocon also supplies a range of other Biopharmaceutical products. Biocon markets recombinant human insulin in India under its own brand name INSUGEN and has also registered the Insulin in several export markets. In addition Biocon has supply arrangements with Pharma Majors and device companies to supply recombinant human insulin for use in their novel insulin formulations. Some of these delivery systems are undergoing clinical trials. Sale of Formulations: Biocon has a dedicated marketing team for nished formulations. This segment, though in the nascent stage, has been growing rapidly. With a focus on the anti-diabetic and cardio-vascular market, Biocons own insulin brand Insugen is also marketed by the formulation team. The formulation segment currently has a team which comprises of eld staff spread across the country, with sales registering impressive growth in scal 2009 as compared to scal 2008. During the year, Technical Licensing Fees These fees represent income received by Biocon towards transfer of proprietary technology in respect of certain bio-generics under long term contracts. They also include fees received by Biocon towards out-licensing its proprietary products. During the year, company has registered licensing income of Rs 89,005, which was much lower compared to Rs 448,413 realised in the previous year, driven in slowdown in world economy.
Other Income The Other income has registered a increase of 43% compared to the previous year. Other income consists primarily of dividend income from investment amounting to Rs 215,945 as compared to Rs 138,746 in scal 2008. It also includes service charges billed to other companies in the area of utilities which has increased from Rs 169,202 in the scal 2008 to Rs 303,355 in the scal 2009. Material costs Material costs include Biocons consumption of raw materials and traded goods and increases or decreases in stock. Materials costs have increased by 3.2% from Rs 3,914,284 to Rs 4,041,146 over the previous year. But as a percentage of sales, the material cost has decreased by 2.3% mainly on account of increased manufacturing activity. Employee costs Staff cost comprises: Salaries, wages, allowances and bonuses; Contributions to provident fund; Contributions towards gratuity and leave provisions; Amortisation of Employees stock compensation expenses, and Welfare expenses (including employee insurance schemes, school tuition program and other miscellaneous employee benets) Staff costs have increased from Rs 696,263 for the scal year 2008 to Rs 820,641 for the scal year 2009. The increase in employee costs is due to a. Increase in gratuity and leave provisions; b. Staff salary increment c. Addition to employees Operating and other expenses Operating and other expenses comprises of rent; traveling and conveyance; communication; professional charges; power and fuel; patent fees; consumables; repairs and maintenance; general expenses; freight outwards; sales promotion; commissions; bad debts write off; provisions for bad and doubtful debts; printing and stationary; insurance; rates, taxes and fees; and losses on sales of assets. Operating and other expenses have increased by 9% from Rs 1,900,804 for the year 2008 to Rs 2,075,027 for the year 2009 mainly on account of a. 28% increase in Lab Consumables from Rs 87,483 to Rs 112,205, due to increase in research activity. b. 48% increase in research and development expenses from Rs 191,169 to Rs 283,002 in the previous year on account of increase in our ongoing research initiatives across projects c. 10% increase in selling expenses from Rs 314,246 to Rs 346,660 on account volume increase. d. 8% decrease in Power and fuel charges from Rs 761,171 to Rs 712,231 Interest and Finance Charges Interest and nance charges have increased from Rs 28,698 in scal 2008 to Rs 49,371in scal 2009 due to increase in average borrowings to nance the working capital. Depreciation During the year depreciation has increased by Rs 52, 850 amounting to an increase of 8% over scal 2008 on account capitalization of assets. This cost as a percentage of sales has also increased from 7.4 % in scal 2008 to 7.5% in scal 2009. Provision for Taxes Provision for current, fringe benets and deferred taxes in the year ended March 31, 2009 was Rs 103,967 as against Rs 106,384 in scal 2008. Tax reversal on MTM losses was Rs 77,326. Net Prot Net prot for scal year 2009 before exceptional items has increased by 4% to Rs 2,038,121. Post Mark to Market losses on account of foreign exchange forward contracts, net prot stood at Rs 1,117,997, resulting in basic EPS of Rs.5.8 per share. Liquidity Our primary liquidity needs have been to nance our working capital requirements and our capital expenditures. These costs have been funded principally by cash ows from operations and short term borrowings. 2009 Net cash generated from operating activities Net cash used for investing activities Net cash generated from/(Used) in nancing activities Net increase/(decrease) in cash and cash equivalents 1,159,899 (746,332) (434,384) (20,817) 2008 2,648,634 (2,661,632) 18,963 5,965
As at March 31, 2009, cash and cash equivalents amounted to Rs 56,561. The principal source of cash and cash equivalents in scal 2008 was from cash ows from operations amounting to Rs 1,091,946 which was partly invested in xed assets to the extent of Rs 839,132. Operating activities Net Cash ows from operating activities for scal 2009 decreased by 56% over scal 2008. This is due to sale of Enzyme business in scal 2008 and increase in working capital during the year. Investing activities The Companys cash ows from investing activities were used primarily to fund purchase of xed assets and trade investments. Financing activities The net cash outows from nancing activities are due to decrease in short term borrowings. PERFORMANCE OF SUBSIDIARIES Syngene International Limited Syngene is a 99.99% owned subsidiary of Company. Syngene was incorporated on November 18, 1993. Syngene works in two main research areas: Synthetic chemistry and molecular biology. Syngene is also involved in custom chemical synthesis. In March, 2009, Syngene opened a fully dedicated research and development facility for Bristol-Myers Squibb (BMS). The 200,000 square-foot facility is located in Biocon Park and employs 270 researchers, to help BMSs discovery and early drug development efforts. Syngenes total income primarily consists of net sales from contract research services and sales of compounds. Substantially all Syngenes contracts are based on time and material management. Revenue from these contracts is recognised as and when services are rendered, in accordance with the terms of the contract. Syngenes total revenue has increased from Rs 1,604,283 to Rs 2,064,815 representing a growth of 29%. This growth in revenue is on account of increase in the number of clients. Syngenes expenses mainly comprise of raw-material costs and staff costs. Raw material cost consists of lab consumables used for research. The increase in revenue was mainly offset by increase in material cost by 8% from Rs 483,715 in scal 2008 to Rs 524,175 in scal 2009 and a 44% increase in staff costs from Rs 366,834 to Rs 527,074. Increase in material cost and staff cost are due to increased business and increase in head count. Other costs increased by 72% from Rs 236,439 to Rs 406,831 in the scal 2009. Net prot before exceptional items for scal 2009 has decreased by Rs 4,974 to Rs 326,798 from Rs 331,772 primarily due to increase in depreciation by Rs 72,669. During the year Syngene incurred Mark to Market loss of Rs 551,761 due to adverse exchange uctuation resulting a net loss of Rs 224,963. Abbreviated prot and loss statement - Syngene 2009 Total Income Prot before tax before exceptional items PBT Margin Prot after tax before exceptional items Net Margin Exceptional Items Prot/(Loss) after tax 2,064,815 344,009 16.7% 326,798 15.8% (551,761) (224,963) 2008 1,604,283 354,652 22.1% 331,772 20.7% 331,772
Syngene contributes 12.3% to the consolidated income and 12.4% to the consolidated prots (from Operations) of the group. In the previous year, Syngene contributed 14.7% and 14.8% to the consolidated income and prots of the group respectively. Clinigene International Limited Clinigene is a 100% owned subsidiary of Biocon Limited. Clinigene was incorporated on August 4, 2000 with an authorised share capital of Rs 5,000. 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 xed 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 xed price contracts is recognised based on the percentage completion method. Total revenue of Clinigene increased from Rs 227,163 in scal 2008 to Rs 330,520 in the scal 2009, primarily on account of increase in clinical research fees. Clinigenes expenses comprise of research material costs, consultancy fees, staff cost, other operating expense, interest cost, depreciation and provisions for fringe benet tax. Consultancy fees has increased by 2% from Rs 11,075 to Rs 11,316 as compared to 2008. Clinigenes staff cost has increased by 24% from Rs 47,147 to Rs 58,339 as compared to previous year. Interest expenses have decreased from Rs 9,807 to Rs 7,594 on account of repayment of term loan. As at March 31, 2009, it has wiped out all the accumulated losses and has carried forward a prot of Rs 14,095. Prot for the year ended March 31, 2009 of Rs 45,302 as against Rs 23,739 in the previous year ,has been consolidated with the prots of the group in the consolidated nancial statements.
Biocon Biopharmaceuticals Private Limited Biocon Biopharmaceuticals Private Limited is a 51% joint venture company with CIMAB. BBPL was incorporated on June 17, 2002 and currently has an authorised share capital of Rs 440,000. Currently paid-up share capital of the company is Rs 176,000. For the year under review, BBPL earned revenues of Rs 185,590 as against Rs 137,057 in the previous year. BBPL commenced full edged operations only recently and for the year under review incurred a loss of Rs 51,736 as against a loss of Rs 133,121 in the previous year. As at March 31, 2009, BBPL has accumulated losses of Rs 377,347. 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, Managing Director of NeoPharma. During the current year, NeoBiocon has set-up its operations and has successfully launched Oncology products in UAE. Financials of NeoBiocon were consolidated based on the Accounting Standard 23 - Accounting for Investments in Associates in Consolidated Financial Statements issued by ICAI. Accordingly, only 50% of the operations incorporated for the consolidation purpose. NeoBiocon registered a turnover of Rs 4,251 and incurred loss of Rs 3,974 for the year ending March 31, 2009. IATRICa Inc Biocon has made a strategic investment of Rs 90,370 in a US based research company IATRICa Inc to jointly develop novel immunoconjugates for the treatment of cancer and infectious disorders. The research initiatives of IATRICa are underway and it has initiated work on two new molecules. Biocon held a 22% stake in IATRICa and has provided for a sum of Rs 7,199 towards share of losses of IATRICa in the consolidated nancial statements. Biocon SA During the year, the Company incorporated a wholly owned subsidiary Biocon SA in Switzerland. The company was incorporated with a capital of 100,000 CHF. Biocon SA was formed with primarily objective of development and marketing of biopharmaceuticals and pursue investment opportunities in Biopharmaceutical sector in EU region. Biocon SA, during the year has registered revenues of Rs 33,730 and recorded prot of Rs 29,479. AxiCorp GmbH During the year, Biocon SA acquired 71% stake in Axicorp GmbH, a company incorporated in Germany. AxiCorp is a specialized marketing and distribution company established in 2002 by a group of industry experts to address the lucrative generics and parallel distribution market in Germany. AxiCorp is ISO 9001certied and works on a differentiated distribution model which is aligned to the radically altered way the German pharmaceutical market currently functions. Axicorp operations consolidated with Biocon with a 3 month lag and consolidated from April 2008 to December 2008. The company registered revenue of Rs 4,797,341 and recorded a prot after tax of Rs 99,641. Previous years numbers are not applicable since current year is the initial year of consolidation. On a consolidated basis AxiCorp has contributed 29 % to the group revenues and 7.5 % to the group prots. Consolidated nancial statements Biocon has prepared the consolidated nancials in accordance with Indian GAAP by consolidating its subsidiaries Syngene, Clinigene, Biocon Research, Biocon SA and AxiCorp and Joint Ventures BBPL and Neo Biocon and associate company IATRICa Inc. The abbreviated consolidated Indian GAAP prot and loss account is as under: Abbreviated consolidated prot and loss statement - Indian GAAP 2009 Total Income Prot before tax (PBT) PBT margin PAT after minority interest, before exceptional items Net margin Exceptional Items Prot after Tax 16,732,254 2,599,991 15.5% 2,403,102 14.3% (1,471,885) 931,217 2008 10,902,049 2,310,927 21.2% 2,245,440 20.6% 2,393,654 4,639,094
Annexure to Directors Report

SI. No. 1. 2. 3. 4. Name Designation & Nature of Duties Dr. Arun Chandavarkar Chief Operating Ofcer Mr. Akash Puranik General Manager Dr. Anuj Goel Chief Sci.Manager Mr. Anindya Sircar General Manager Ms. Arpita Sengupta Senior Manager Mr. Atul Raja Senior Manager Mr. Harish V lyer General Manager Mr. John Shaw Vice Chairman Mr. Kedarnath N Sastry Chief Sci.Manager Ms. Kiran Mazumdar Shaw Chairman & Managing Director Mr. Lourde Raj Joseph General Manager Mr. Murali Krishnan K N President Mr. Prasad B S V General Manager Mr. Rakesh Bamzai President Mr. Radhakrishnan G General Manager Dr. Ramakrishnan MS Chief Sci.Manager Mr. Ramalingeshwara Rao. K* General Manager Mr. Ravi.C Dasgupta General Manager Mr. Sandeep Rao General Manager Dr. Sriram A V General Manager Mr. Sreenivasan Raman General Manager Mr. Sundaresh S.R. General Manager Dr. Srinivas P V Chief Sci.Manager Mr. Shukrit S Chimote General Manager Age Remuneration Rs Qualication & Experience Date of Commencement of employment 8-Nov-90 21-Jul-97 15-Apr-96 3-Mar-97 Technical Sales Ofcer Khandelwal Lab Ltd. Mumbai Last employment
48 36 44 40
12,188,655 Ph.D 18 Years 3,545,264 B Pharm., M.Sc.(Tech) 13Years 2,527,468 Ph.D 13Years 4,659,092 M.Sc., Ph.D (Micro)., Ph. D (Law) 12 Years 2,454,204 BA(Hons) 15 Years 2,443,985 B.Sc, MBA 15 Years 3,575,440 Ph.D 14 Years 7,368,900 M.A (Hons) 37 Years 3,144,564 Ph.D 28 Years 11,283,803 B.Sc (Hons), PGD in Malting & Brewing 34 Years 2,479,865 DEE 23 Years 11,494,791 B.Com., (CA) 27 Years 3,664,072 M.Sc., M.Tech 17 Years 12,652,791 B.Sc 20 Years 3,561,036 B.Sc, DBM, CNE, CNA, MCPS 23 Years 2,567,004 Ph.D 10 Years 3,844,936 B.Sc. 30 Years 3,621,360 B.Sc., PGD(PM&IR).,LLB 21 Years 4,540,872 M.Sc, PGDM 10 Years 2,556,608 Ph.D 14 Years 2,930,762 M. Tech 20 Years 3,673,063 B,Sc, PGDBA 24 Years 2,484,069 Ph.D 22 Years 2,495,450 M.S, MBA, MIA, 9 Years
5. 6. 7. 8. 9. 10.
39 42 40 60 54 56
1-Jun-04 27-Oct-07 18-Dec-01 1-Apr-99 1-Feb-01 1-Dec-78
Account Director Brand. Comm DGM - Marketing Bharti Airtel Ltd. Senior Scientist IDEC Pharmaceuticals, Inc President-Berghaus International Fashion Group, Holland R&D - Director Bangalore Genei Pvt.Ltd. Technnical Consultant Jupiter Breweries Ltd. Maintenance In-charge Peninsula Process Foods Ltd. Deputy Manager - Projects Gujarat Themis Biosyn Ltd. Business Development Manager Advanced Biochemical Ltd. Director, CAMS Pvt. Ltd. Director Business Development Novo Nordisk India Pvt Ltd. Director - HR Allergan (I) Pvt.Ltd. Senior Scientist Indus Biotheraputics Ltd. Associate Director - Fermentation Ranbaxy Laboratories, Director - Commercial Maini Material Movement Pvt. Ltd. Scientist - Indian Institute of Chemical Technology Assoc. Director, Global Marketing Bristol Myers Squibb
11. 12. 13. 14. 15.
44 53 42 44 47
22-Jun-92 9-Nov-81 15-Sep-99 19-Apr-95 1-Jan-96
16. 17. 18.
45 58 45
4-Jan-99 5-Mar-03 23-Feb-07
19. 20. 21. 22.
36 46 44 51
15-Jun-99 22-Apr-03 7-Apr-04 2-Feb-04
23. 24.
43 35
16-Jul-07 2-Feb-08
*Employed for the part of the year.
Annexure to Directors Report
Report on Corporate Governance

1. Companys Philosophy on Corporate Governance:
Biocon is committed to doing business in an efcient, 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 Companys 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 benets 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 7 members including two executive directors, ve non-executive directors, of which four are independent directors. Kiran Mazumdar-Shaw is the Chairman and Managing Director of the Company and John Shaw is the Vice-Chairman. Kiran Mazumdar-Shaw and 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 elds. The brief prole of the Companys Board of directors is as under: Dr. Kiran Mazumdar-Shaw, 56 years, Chairman and Managing Director, is a rst generation entrepreneur with more than 30 years experience in the eld 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 eld 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 the founder promoter and has led the Company since its inception in 1978. She is currently the Director of Syngene International Limited, Clinigene International Limited, Biocon Biopharmaceuticals Private Limited, Biocon Research Limited, Glentec International, Narayana Institute for Advanced Research Private Limited and Narayana Hrudayalaya Private Limited. 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 & Youngs 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 also a member of the Prime Ministers Council on Trade and Industry and has recently accepted to serve as Member, Governing Body and General Body of the Indian Pharmacopoeia Commission, an Autonomous Body of the Government of India. Mr. John Shaw, 60 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. (Hons.) in History and Political Economy from Glasgow University, U.K. in 1970. At the time of joining Biocon, he had served 27 years with Coats Viyella plc. in various capacities including nance and general administration. He was the Chairman of Madura Coats Ltd. from 1991-98. Mr Shaw came on the Board of Biocon Limited in 1999. Dr. Neville Bain, 69 years, has vast experience in the eld of nance, strategy and general management. He graduated from Otago University, New Zealand, with a Master of Commerce (Hons) degree and double Bachelor degree 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 Ofcer of Coats Viyella plc, and then as Chairman and Director of various organisations. He is the Chairman of the Institute of Directors and also a board member of Scottish Newcastle Pension Trustees Limited. He has published books on Corporate Governance, Strategy and the effective utilisation of people in organisations. He also serves as a director on the board of Syngene International Limited which is a subsidiary of Biocon Limited. Prof. Charles L Cooney, 64 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. He also serves as a director on the board of Syngene International Limited which is a subsidiary of Biocon Limited.
Mr. Suresh N Talwar, 70 years, is a partner in Talwar Thakore & Associates, a law rm 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 rm. He is also a director of several leading companies in India. Prof. Ravi Mazumdar, 54 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., Mc Gill 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, 64 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.Sc. 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 Rochesters Institute of Optics for four years, teaching courses in optical fabrication and testing, optical instrumentation and holography. He also currently serves as a member of the Board of Trustees at the University of Rochester. Pursuant to the provisions of the Companies Act, 1956 and in accordance with our Articles of Association, the Board has appointed Prof. Catherine Rosenberg as 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 Ofce/Designation Executive/ Non-executive 1. 2. 3. 4. 5. 6. 7. 8. Dr. Kiran Mazumdar-Shaw Mr. John Shaw Dr. Neville Bain Prof. Charles L Cooney Mr. Suresh N Talwar Prof. Ravi Mazumdar Dr. Bala S Manian Prof. Catherine Rosenberg Chairman & M D Vice Chairman Director Director Director Director Director Alternate Director Executive Executive Non-Executive Non-Executive Non-Executive Non-Executive Non-Executive Non-Executive Independent/ Non-independent Non-independent Non-independent Independent Independent Independent Non-Independent Independent Non-independent
More than 50% of the Board comprises of non-executive Directors and more than half of the Board comprises of 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 nancial year ended March 31, 2009, the Board met four times on April 22, 2008, July 17, 2008, October 16, 2008 and January 21, 2009. 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 No. of Board meetings attended 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) 4 4 3 4 4 3 4 1 Attendance at the last AGM Yes Yes Yes Yes Yes Yes Yes Yes No. of other Directorships (*) 6 5 3 4 4 52* 4 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 and annual results for the Company and its divisions. Minutes of meetings of Audit Committee, Remuneration Committee, Investors Grievance Committee and Share Transfer Committee. The information on recruitment and remuneration of senior ofcers 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 efuent or pollution problems. Any material default in nancial 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. Signicant development in Human Resources/Industrial Relations front like signing of wage agreement, implementation of Voluntary Retirement Scheme, etc. 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, 2009 are given below:
Name of Company/Firm Dr. Kiran Mazumdar-Shaw Syngene International Limited Clinigene International Limited Biocon Biopharmaceuticals Private Limited Biocon Research Limited Biocon SA IATRICa Glentec International Narayana Institute for Advanced Research Private Limited Narayana Hrudayalaya Private Limited Director Director Managing Director Director Director Director Director Director Director Nature of Interest
Mr. John Shaw Syngene International Limited Clinigene International Limited Biocon Biopharmaceuticals Private Limited Biocon Research Limited Glentec international Director Director Director Director Director
Prof. Ravi Mazumdar Glentec International Clinigene International Limited Syngene International Limited Director Director Alternate Director
Dr. Neville C Bain Scottish & Newcastle Pension Trustees Limited Syngene International Limited Neville Bain Developments Limited Provexis Limited Director Director Director Director
Prof. Charles Cooney Syngene International Limited Genzyme Corporation LS9, Inc. PolyPore International Inc. Director Director Director Director
Mr. Suresh N Talwar PZ Cussons India Pvt. Ltd. FCI OEN Connectors Ltd. Trans Warranty Finance Limited Armstrong World Industries (India) Ltd. Merck Ltd. Collin Stewart Inga Pvt. Ltd. Romil Finance & Investments Pvt. Ltd. Sidham Finance and Investments Pvt. Ltd. 20th Century Fox Corpn (I) Pvt. Ltd. Aon Global Insurance Services Pvt. Ltd. Birla Sun Life Insurance Co Ltd. Birla Sun Life Trustee Co Ltd. Blue Star Ltd. Blue Star Infotech Ltd. Cadbury India Limited Chowgule and Company Ltd. Decagon Investments Pvt. Ltd. Elantas Beck India Limited Emerson Process Management (India) Pvt. Ltd. Carborundum Universal Ltd. Cholamandalam MS General Insurance Co. Ltd. Collins Stewarat Inga Pvt. Ltd. Epitome Global Services Pvt. Ltd. Esab India Limited Greaves Cotton Ltd. India Debt Management Pvt. Ltd. India Value Fund Trustee Co. Pvt. Ltd. IVF Trustee Company Private Limited IVF (Mauritius) PCC IVF (Mauritius) Ltd. Indium IV (Mauritius) Holding Limited Indium IV (Mauritius) Limited John Fowler (India) Pvt. Ltd. Larsen & Toubro Ltd. MF Global (India) Pvt. Ltd. Morgan Stanley India Co. Pvt. Ltd. Rediffusion Dentsu, Young & Rubicam Pvt. Ltd. Rakeen Development PJSc Reva Electric Car Co. Pvt. Ltd. Sandvik Asia Ltd. Shrenuj & Co. Ltd. Solvay Pharma India Limited Snowchem Paints Pvt. Ltd. Showdiff Worldwide Pvt. Ltd. Sonata Software Limited Swiss Re Shared Services (India) Pvt. Ltd. TTK Healthcare TPA Private Limited Warner Bros Pictures (India) Pvt. Ltd. Wave Suspension Systems India Private Ltd. Wyeth Limited Albright & Wilson Chemicals India Ltd. Garware-Wall Ropes Ltd. Hindustan Gun & Chemicals India Ltd. Johnson & Johnson Ltd. Uhde India Pvt. Limited Dr. Bala S Manian ReaMetrix Inc., USA ReaMetrix India Private Limited ICICI Knowledge Park Vaccinex Inc. Prof. Catherine Rosenberg Syngene International Limited Director Director Director Director Director Chairman & Alterante Director Chairman & Alterante Director Chairman & Alterante Director Chairman 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 Director Director Director Director Director Director Director Alternate Director Alternate Director Alternate Director Alternate Director Alternate Director
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. Dr. Kiran Mazumdar-Shaw Mr. John Shaw Prof. Ravi Mazumdar Dr. Neville Bain Prof. Charles Cooney Mr. Suresh Talwar Biocon Ltd. Biocon Ltd. Biocon Ltd. Biocon Ltd. Biocon Ltd. Biocon Ltd. Blue Star Ltd. Blue Star Infotech Ltd. Cadbury India Ltd. Elantas Beck India Ltd. FCI OEN Connectors Ltd. Greaves Cotton Ltd. Merck Ltd. Sandvik Asia Ltd. Solvay Pharma India Ltd. 7. Dr. Bala S Manian 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 Audit Committee None Member Member None Chairman Chairman Member Member Chairman Member Member Member Chairman Member Chairman Member Member None Name Name of the Company Nature of the Committee* Member/Chairman
*For this purpose Membership/Chairmanship in Audit Committee and Investors Grievance Committee are reported and other committee Membership/ 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 the same is posted on the Website of the Company. The certicate 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. Certicate 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 Code of Ethics and Business Conduct which is adopted by the Company is applicable to all directors, ofcers and employees, of the group. I hereby certify that all the Board Members and Senior Management have afrmed their compliance with the Code of Ethics and Business Conduct, under a certicate of Code of Conduct for the year 2008-09. For Biocon Limited
(Sd/-) Bangalore March 31, 2009 2. vi. Shareholding of Directors

Name 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 ) *Joint Holding Nature of Directorship Executive Executive Non-Executive Non-Executive Non-Executive Non-Executive Non-Executive Non-Executive No. of shares held as on 31.3.2009 79,287,564 1,407,558 1,310,714* 1,000,000 419,522 32,000 2,500 *
Dr. Kiran Mazumdar-Shaw Chairman and Managing Director
2. vii. Re-appointment of Directors: The Directors, Mr. John Shaw and Mr. Suresh Talwar 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 nancial 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) Dr. Neville Bain b) Prof. Charles Cooney c) Mr. Suresh Talwar (w.e.f. July 2003) The members of the committee are non-executive and independent directors and possess sound knowledge of accounts, nance, audit and legal matters. Dr. Neville Bain is the Chairman of the Committee. 3. iii. Meeting and attendance during the year: Name Dr. Neville Bain Prof. Charles L Cooney Mr. Suresh Talwar No. of meetings held 4 4 4 No. of meetings attended 4 4 4
During the year 2008-09, the Committee met 4 times on April 21, 2008, July 16, 2008, October 15, 2008 and January 20, 2009. The Senior Management and Auditors were invited to attend all the meetings of the Audit Committee. The Company Secretary acts as the Secretary to the Audit Committee. The Committee reviewed the nancial 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, as Statutory Auditors of the Company from conclusion of Thirty First 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. The internal auditors M/s. Grant Thornton to review the control processes in place and report to the Audit Committee on a quarterly basis. 3. iv. Subsidiary Companies: The Company has ve subsidiary companies, Syngene International Limited, Clinigene International Limited, Biocon Research Limited, Biocon SA, Axicorp GmbH and two joint ventures, Biocon Biopharmaceuticals Private Limited and NeoBiocon. None of the Indian subsidiary companies represent more than 20% of consolidated turnover or net worth of the Company in the immediately preceding nancial year. However, two independent Directors of the Company are on the Board of Syngene International Limited. The Audit committee of the Company also reviews the nancial statements of all the subsidiary companies. The minutes of the Board Meetings of subsidiary companies are placed at the Board Meetings of the Company and reviewed. 3. v. CEO/CFO Certication: 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 certied, in terms of Clause 49 of the Listing Agreement to the Board that the nancial 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 (ESOP) 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 16th April 2001. The following directors are the current members of the Committee: a) Prof. Charles L Cooney b) 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. Meeting and Attendance during the year: During the year 2008-09, the Committee met 4 times on April 21, 2008, July 16, 2008, October 15, 2008 and January 20, 2009 and all the members attended all the meetings. 4. iv. Remuneration Policy The remuneration policy of the Company is broadly based on the following criteria: a) Job responsibilities b) Key performance areas of the employees/directors c) Industry trend 4. v. Details of Remuneration: The details of remuneration and sitting fees paid or each of the Directors during the year ended March 31, 2009 are given below:
Name Salary and perquisites Rs Fixed pay Perquisites Variable pay (performance Bonus) 1,617,600 Retiral benets 485,280 60,000 180,000 180,000 140,000 80,000 20,000 Sitting Fees Rs
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)
6,874,800 6,411,900 -
2,791,403 957,000 -
*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 20, 2005. Pecuniary relations or transactions of the Non-executive directors: There were no pecuniary relationship or transactions of non-executive directors vis--vis the Company which has potential conict with the interests of the Company at large. Prof. Charles L Cooney and Dr. Bala S Manian are Chairman and member of the Scientic Advisory Board respectively and are paid sitting fees for attending the meetings of the Scientic Advisory Board.
The nancial transactions with the Non-Executive Directors during year were:
Sl. No. 1. 2. Name Prof. Charles L Cooney Dr. Bala S Manian Nature of transaction Sitting fees as Chairman of the Scientic Advisory Board Sitting fees as Member of the Scientic Advisory Board Amount (Rs) 454,250 202,250
Compensation/Fees paid to Non-Executive Directors: The Non-executive directors were paid sitting fees for attending the Board and Committee Meetings. Criteria for making payment to Non-Executive Directors: The role of non-executive/independent Directors of the Company is not just restricted to corporate governance or outlook of the Company but also to involve and contribute to the evolution of the Company. The non-executive and independent directors of the Company are eminent scientists, researchers, technocrats and professionals. The Company seeks their expert advice on various matters in science, technology, legal or IP. Hence the compensation to the non-executive directors towards the professional services to the Company is recommended. Shareholders have given their approval for the same at their annual general meeting held on July 19, 2006.
5. Shareholders:
5. i. Investor Grievances Committee: Prior to the Initial Public offering of the Company, i.e. on January 17, 2004, the Board constituted this committee with the following members: a) Dr. Neville Bain, Chairman b) Dr. Kiran Mazumdar Shaw c) Mr. John Shaw The Committee was formed to specically 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 2008-09, the Committee met 4 times on April 21, 2008, July 16, 2008, October 15, 2008 and January 20, 2009 and all the members attended all the meetings. 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 ofcer: Mr. Kiran Kumar G, Company Secretary was designated as the compliance ofcer under SEBI (Disclosure and Investor Protection) Guidelines, 2000 for overseeing/ addressing the investor complaints. 5. iii. Details of Shareholders Complaints Details of the shareholders complaints received and redressed during the year:
Complaints Received 242 Complaints solved 241 Pending 1
There have been no material grievances raised and all items referred have been dealt with. As on April 28, 2009 the above said, pending grievance also stands resolved.
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 nancial year. The details of the previous Annual General Meetings are as below:
Year 2005-06 2006-07 2007-08 Date and Time 19th July 2006, 3.30 p.m. 18th July 2007, 3.30 p.m. 17th July 2008, 3.30 p.m. Venue Sathya Sai Samskruta Sadanam, No. 20, Hosur Road, Bangalore - 560 029 Sathya Sai Samskruta Sadanam, No. 20, Hosur Road, Bangalore - 560 029 Taj Residency, 41/3, Mahatma Gandhi Road, Bangalore - 560 001 2 Nil Special resolutions passed Nil
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. 6. iii. Postal Ballot Matters required to be passed by the Company through postal ballot under the provisions of Section 192A of the Companies Act, 1956: The Company divested its Enzymes business (other than Human Healthcare Related Enzymes) to Novozymes South Asia Private Limited, a subsidiary of Novozymes A/s effective October 1, 2007 for which the Company sought an approval from the members by means of a postal ballot. The results of the postal ballot were announced on September 3, 2007.
7. Disclosures
7. i. Related party transactions: Audit Committee reviews periodically the signicant related party transactions i.e. transactions of the Company, which are of material nature, with its subsidiaries, directors or relatives or the management. Details of such transactions are provided in Note 22 of the Notes forming part of the Financial Statements in accordance with provisions of Accounting Standard 18, issued by the Institute of the Chartered Accountants of India. 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 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 nancial 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 satised 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 and yearly nancial 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 Standard 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 and on the Electronic Data Information Filing and Retrieval (EDIFAR) website maintained by SEBI in association with the National Informatics Centre (NIC). The Companys website also displays all ofcial news releases. The Company organizes investor conference calls to discuss its nancial results every quarter where investor queries are answered by the Executive Management of the Company. The transcripts of the conference calls are also posted on our website.
Management Discussion and Analysis on the operations of the Company forms part of Directors Report.
9. General Shareholder Information:

i) Annual General Meeting: Date and Time Venue ii) Financial Calendar for 2009-10 First Quarterly results Half-yearly Results Third Quarterly Results Annual results 2009-10 AGM for the year 2009-10 iii) Dates of Book Closure : : : : : : : : : July 23, 2009 at 3.30 p.m. Sathya Sai Samskruta Sadanam, No. 20, Hosur Road, Near Forum Mall, Bangalore - 560 029 The following are tentative dates: July 23, 2009 October 22, 2009 January 21, 2010 April 27, 2010 July 22, 2010 Wednesday, July 15, 2009 to Thursday, July 23, 2009 (Both days inclusive) On or after July 24, 2009 The National Stock Exchange of India Ltd. Exchange Plaza, Bandra-Kurla Complex Bandra (East), Mumbai - 400 051 and The Bombay Stock Exchange Ltd. P J Towers, Dalal Street, Mumbai - 400 001 Listing is effective from April 07, 2004 NSE BIOCON BSE 532523 INE 376G01013
iv) Dividend payment date v) Listing on Stock Exchanges
: :
vi) Stock Code/Symbol vii) International Securities Identication Number
: :
viii) Market Price data during 2008-09: The monthly high/low prices of shares of the Company from April 1, 2008 to March 31, 2009 are given below:
BSE Sl. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. April-08 May-08 June-08 July-08 August-08 September-08* October-08 November-08 December-08 January-09 February-09 March-09 Month High (Rs) 551.50 494.95 498.70 411.60 414.95 426.95 180.00 124.90 130.50 132.85 111.00 153.50 Low (Rs) 420.10 448.00 391.00 336.00 375.00 160.00 92.00 86.55 87.00 96.00 96.55 90.10 Volume of Shares 2,991,235 914,875 1,027,774 1,228,269 635,191 883,944 1,044,027 1,163,140 1,377,468 1,377,468 617,120 2,587,559 High (Rs) 551.70 496.00 499.00 410.90 413.35 426.00 184.00 125.45 124.80 132.15 110.50 152.00 NSE Low (Rs) 421.00 446.20 390.00 336.50 378.00 159.00 89.50 85.30 85.00 91.00 96.00 88.90 Volume of Shares 5,749,302 2,151,228 2,291,591 2,314,345 1,343,396 2,309,395 2,482,696 2,814,367 2,283,854 3,413,854 1,753,696 5,578,523
* The Company shares were ex-bonus (1:1) on September 11, 2008 - ex-bonus date 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, 2008 to March 31, 2009. The Company had declared bonus issue in the ratio of 1:1 and the
Biocon - S&P Nifty Price Chart

485 435 385 335 5200 4900 4600 4300 4000 285 3700 235 185 135 85 1-Apr-08 1-Jul-08 30-Sep-08 30-Dec-08 31-Mar-09 3400 3100 2800 2500
Biocon Close
S&P CNX Nifty Close
Index Value
Rs.
Biocon - BSE Sensex Price Chart

485 435 385 335 17150 16150 15150
Rs.
13150 285 12150 235 185 135 85 1-Apr-08 11150 10150 9150 8150 1-Jul-08 30-Sep-08 30-Dec-08 31-Mar-09
Biocon Close
BSE Sensex Close
shares of the Company were ex-bonus w.e.f. September 11, 2008. 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. 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 within the time limits specied in the Listing Agreement. xii) Distribution of the Shareholding: The distribution of shareholding as on March 31, 2009, pursuant to Clause 35 of the listing agreement is as under: A. Shareholders - by Category:
Total Shareholding As a % of Total No. of Shares Cat Code (I) (A) (1) (a) Category of Shareholder No. of Shareholders (iii) Total No. 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) (viii) As a % (ix)=(viii)/ (iv)*100
(ii) Promoter And Promoter Group Indian Individuals /HUF Sub-Total (A)(1)
5 5
80,892,224 80,892,224
80,876,394 80,876,394
40.45 40.45
40.45 40.45
Index Value
14150
0 0
NA NA
(2) (a) (b)
Foreign Individuals (NRIs/Foreign Individuals) Bodies Corporate Sub-Total (A)(2) Total Share Holding of Promoter and Promoter Group (A)=(A) (1)+(A)(2) 1 1 2 1,407,558 39,535,194 40,942,752 1,407,558 39,535,194 40,942,752 0.70 19.77 20.47 0.70 19.77 20.47 0 0 0 NA NA NA
121,834,976
121,819,146
60.92
60.92
NA
(B) (1) (a) (b) (c)
Public Shareholding Institutions Mutual Funds /UTI Financial Inst./Banks Foreign Institutional Investors 33 18 46 20,052,224 1,935,572 11,959,540 20,052,224 1,935,572 11,959,540 10.03 0.97 5.98 10.03 0.97 5.98
Sub-Total (B)(1)
97
33,947,336
33,947,336
16.97
16.97
NA Shares Pledged or Otherwise Encumbered No. of Shares (viii) (viii) As a % (ix) = (viii)/ (iv)*100
Total Shareholding As a % of Total No. of Shares Cat Code (I) (2) (a) (b) Non-Institutions Bodies Corporate Individuals (i) Individual shareholders holding nominal share capital up to Rs 1 lakh Individual shareholders holding nominal share capital in excess of Rs 1 lakh 1,375 2,673,138 2,673,138 1.34 1.34 Category of Shareholder No. of Shareholder (iii) Total No. Shares (iv) No. of Shares Held In Dematerialized Form (v) As a % of (A + B) (vi) As a % of (A + B + C) (vii)
(ii)
91,015
15,642,109
15,585,409
7.82
7.82
(ii)
58
13,034,658
12,936,706
6.52
6.52
(c)
Any Others Clearing Members Foreign Bodies Foreign Nationals Non-Resident Indians Trusts Sub-Total (B)(2) Total Public Share Holding (B)=(B) (1) + (B)(2) Total (A) + (B) GRAND TOTAL (A) + (B): 226 1 8 1,634 14 94,331 94,428 94,435 94,435 167,666 105,374 712,890 1,089,889 10,791,964 44,217,688 78,165,024 200,000,000 200,000,000 167,666 105,374 438,818 917,495 10,791,964 43,616,570 77,563,906 199,383,052 199,383,052 0.08 0.05 0.36 0.54 5.40 22.11 39.08 100.00 100.00 0.08 0.05 0.36 0.54 5.40 22.11 39.08 100.00 100.00 NA NA
B. Distribution of shareholding by no. of shares: Distribution Schedule as on March 31, 2009

Sl. No. 1. 2. 3. 4. 5. 6. 7. 8. Category From 1 5001 10001 20001 30001 40001 50001 To 5000 10000 20000 30000 40000 50000 100000 92,044 1,264 523 187 76 72 99 170 97.44 1.34 0.58 0.19 0.08 0.08 0.10 0.18 55,550,180 9,718,355 7,626,615 4,744,415 2,666,760 3,359,375 7,158,210 909,176,090 5.69 0.99 0.81 0.47 0.28 0.34 0.73 90.69 Number of Cases % of Cases Amount % of Amount
100001 & Above
Total
94,435
100.00
1,000,000,000
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 certicate to 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 veries the genuineness of the edit list. After verication of edit list and effecting the corrections, if any, the Registrar updates the nal Demat Register. The Registrar forwards the conrmation report to CDSL/NSDL or rejection report as the case may be. The Registrar does the reconciliation and conrmation of capital. The Registrar also corresponds with the DP and shareholders in case of rejection. As on March 31, 2009, 6,16,948 shares (0.30%) of the shares of Company were in physical form. 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 ii) Plot No. 113/C2, Bommasandra Industrial Area, Bommasandra, Bangalore - 560 009 iii) Biocon Park Plot No 2, 3, 4 and 5 Bommasundra Jigani Link Road Bangalore - 560 100 xv) Address for correspondence: Investor correspondence may be addressed to: a) Kiran Kumar G Company Secretary (Compliance Ofcer) Biocon Limited 20th KM, Hosur Road, Electronics City P.O., Bangalore - 560 100 Mail id: [email protected] or [email protected] b) Karvy Computershare Private Limited Plot No. 17 24, Vittal Rao Nagar, Madhapur, Hyderabad 500 081 Mail id: [email protected] or [email protected]
Auditors Certicate on Corporate Governance

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, 2009, 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 nancial 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 efciency or effectiveness with which the management has conducted the affairs of the Company.
For S. R. BATLIBOI & ASSOCIATES Chartered Accountants
per Sunil Bhumralkar Partner Membership No.: 35141 Bangalore. June 06, 2009
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, 2009 and also the Prot and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These nancial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these nancial 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 nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the nancial statements. An audit also includes assessing the accounting principles used and signicant estimates made by management, as well as evaluating the overall nancial 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 specied 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, prot and loss account and cash ow statement dealt with by this report are in agreement with the books of account; iv. In our opinion, the balance sheet, prot and loss account and cash ow 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, 2009, and taken on record by the Board of Directors, we report that none of the directors is disqualied as on March 31, 2009 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, 2009; (b) in the case of the prot and loss account, of the prot for the year ended on that date; and (c) in the case of cash ow statement, of the cash ows for the year ended on that date.
For S.R. BATLIBOI & ASSOCIATES Chartered Accountants
per Sunil Bhumralkar Partner Membership No.: 35141 Bangalore April 28, 2009
Annexure referred to in paragraph 3 of our report of even date

Re: BIOCON LIMITED (i) The Company has maintained proper records showing full particulars, including quantitative details and situation, of xed assets. Fixed assets have been physically veried by the management during the year in accordance with a regular programme of verication, intended to cover all the xed 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. As informed, no material discrepancies were noticed on such verication. There was no disposal of xed assets during the year. (ii) The management has conducted physical verication of inventory at reasonable intervals during the year. The procedures of physical verication of inventory (except for goods in bond and in transit) followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. The Company is maintaining proper records of inventory and there were no material discrepancies noticed on physical verication. (iii) As informed, 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 Rs 2,237,590 thousands and the balance outstanding as at March 31, 2009 is Rs 2,024,938 thousands. 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. In respect of loans granted, repayment of the principal amount is as stipulated and payment of interest, wherever applicable, has been regular. 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 Companies Act, 1956. The Company has not taken/granted any other loans from/to companies, rms 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 xed 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 xed 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. (v) 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. In respect of transactions made in pursuance of such contracts or arrangements exceeding value of Rupees ve lakhs entered into during the nancial 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) Undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it have generally been regularly deposited with the appropriate authorities. 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, cess 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. According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:
Name of the statute The Central Excise Act, 1944 The Central Excise Act, 1944 The Customs Act, 1962 The Customs Act, 1962 The Central Excise Act, 1944 Finance Act, 1994 Karnataka Tax on Entry of Goods Act, 1979 Income-tax Act, 1961 Nature of dues Excise duty Excise duty Customs duty Customs duty Excise duty Service tax Entry tax Income tax Amount (Rs in thousands) 633* 859 1,491 1,514* 88,209 1,437 1,537 2,077* Period to which the amount relates 1994-1995 2005-2006 2004-2005 2004-2005 April 2005 till March 2008 2004-2005 2002-2003 1993-1994 Forum where dispute is pending Assistant Collector of Central Excise. Customs, Excise and Service Tax Appellate Tribunal, Chennai Customs, Excise and Service Tax Appellate Tribunal, Chennai Customs, Excise and Service Tax Appellate Tribunal, Chennai Customs, Excise and Service Tax Appellate Tribunal, Chennai Customs, Excise and Service Tax Appellate Tribunal, Chennai The Company is in the process of ling an appeal with High Court High Court of Karnataka.
Name of the statute 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 Income-tax Act, 1961
Nature of dues Income tax Income tax Income tax Income tax Income tax Income tax Income tax Income tax Income tax
Amount (Rs in thousands) 2,874* 2,952* 3,879* 4,040* 1071* 17,619 *(14,968 paid) 30,551* 18,940* 15,062
Period to which the amount relates 1994-1995 1995-1996 1996-1997 1997-1998 1999-2000 2002-2003 2003-2004 2004-2005 2005-2006
Forum where dispute is pending Supreme Court Supreme Court 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)
* These amounts are paid (x) The Company has no accumulated losses at the end of the nancial year and it has not incurred any cash losses in the current and immediately preceding nancial year. (xi) 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 a nancial institution, bank or debenture holders. (xii) 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. (xiii) As informed to us, the Company is not a chit fund or a nidhi/ mutual benet fund/ society. Therefore, the provisions of Clause 4(xiii) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company. (xiv) As informed to us, 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. (xv) According to the information and explanations given to us, the Company has given guarantee for loans taken by others from banks or nancial institutions, the terms and conditions whereof in our opinion are not prima - facie prejudicial to the interest of the Company. (xvi) The Company did not have any term loans outstanding during the year. (xvii) 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. (xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956. (xix) The Company did not have any outstanding debentures during the year. (xx) The Company has not raised any money through a public issue during the year. (xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the nancial 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 Chartered Accountants per Sunil Bhumralkar Partner Membership No.: 35141 Bangalore April 28, 2009
BIOCON LIMITED
Balance Sheet as at March 31, 2009

(All amounts in Indian Rupees thousands) Notes SOURCES OF FUNDS Shareholders Funds Share capital Reserves and surplus 3 4 1,000,000 12,748,753 13,748,753 500,000 12,781,963 13,281,963 March 31, 2009 March 31, 2008
Loan Funds Secured loans Unsecured loans 5 6 1,014,565 624,862 1,639,427 Deferred Tax Liability (Net) 7 410,408 15,798,588 892,634 546,219 1,438,853 398,237 15,119,053
APPLICATION OF FUNDS Fixed Assets Cost Less: Accumulated depreciation Net book value Capital work-in-progress [including capital advances of Rs 4,454 (March 31, 2008 - Rs 171,947)] 376,872 7,129,713 Intangible Assets Investments Current Assets, Loans and Advances Inventories Sundry debtors Cash and bank balances Loans and advances 10 11 12 13 1,945,224 3,101,713 60,427 2,662,748 7,770,112 Less: Current Liabilities and Provisions Liabilities Provisions 14 2,196,970 759,972 2,956,942 Net Current Assets 4,813,170 15,798,588 1,663,514 681,652 2,345,166 2,905,514 15,119,053 1,677,350 2,256,629 81,244 1,235,457 5,250,680 8 (ii) 9 388,850 3,466,855 646,341 7,164,937 276,000 4,772,602 8(i) 9,486,156 2,733,315 6,752,841 8,525,081 2,006,485 6,518,596
The accompanying Notes form an integral part of the Balance Sheet. As per our report of even date
For and on behalf of the Board of Directors of Biocon Limited
per Sunil Bhumralkar Partner Membership No: 35141 Bangalore April 28, 2009
Kiran Mazumdar Shaw Managing Director
John Shaw Director
Murali Krishnan K N President - Group Finance
Kiran Kumar Company Secretary
BIOCON LIMITED
Prot and Loss Account for the year ended March 31, 2009
(All amounts in Indian Rupees thousands, except share data and per share data) Notes INCOME Gross sales Less: Excise duty Net sales Licensing and development fees Other income EXPENDITURE Manufacturing, contract research and other expenses Interest and nance charges PROFIT BEFORE DEPRECIATION, EXCEPTIONAL ITEMS AND TAXES Depreciation/Amortisation Less: Amount transferred from revaluation reserve PROFIT BEFORE TAXES AND EXCEPTIONAL ITEMS [Includes Rs Nil (March 31, 2008 - Rs 38,795), being prot from discontinued operations] Provision for income-tax Current tax Less - MAT credit entitlement Deferred taxes Fringe benets [Includes Rs Nil (March 31, 2008) Rs 10,533, being tax on prot from discontinued operations] PROFIT AFTER TAXES, BEFORE EXCEPTIONAL ITEMS [Includes Rs Nil (March 31, 2008 - Rs 28,262), being prot from discontinued operations] Exceptional items, net Add/(Less): Tax effect on exceptional items PROFIT FOR THE YEAR Balance brought forward from previous year PROFIT AVAILABLE FOR APPROPRIATION Proposed dividend on equity shares Tax on proposed dividend Transfer to general reserve BALANCE TRANSFERRED TO BALANCE SHEET Earnings per share (equity shares, par value of Rs 5 each) Basic (in Rs) Diluted (in Rs) Weighted average number of shares used in computing earnings per share Basic Diluted 20 20 192,944,832 198,359,510 193,192,482 199,186,140 5.79 5.64 22.51 21.84 21 (997,450) 77,326 1,117,997 7,704,962 8,822,959 600,000 101,970 111,799 8,009,190 3,077,546 (683,892) 4,349,245 4,375,617 8,724,862 500,000 84,975 434,925 7,704,962 2,038,121 1,955,591 164,394 (87,068) 12,171 14,470 93,036 668 12,680 8 (i) & 8 (ii) 4 16 18 6,936,814 49,371 6,986,185 2,884,918 742,830 742,830 2,142,088 6,511,351 28,698 6,540,049 2,751,955 691,581 1,601 689,980 2,061,975 15 9,291,494 257,134 9,034,360 89,005 747,738 9,871,103 8,587,496 266,657 8,320,839 448,413 522,752 9,292,004 March 31, 2009 March 31, 2008
The accompanying Notes form an integral part of the Prot and Loss Account.
As per our report of even date
John Shaw Director
BIOCON LIMITED
Statement of Cash Flows for the year ended March 31, 2009
(All amounts in Indian Rupees thousands) March 31, 2009 I. CASH FLOWS FROM OPERATING ACTIVITIES : Net prot including exceptional items, before tax Adjustments for Depreciation and Amortisation Unrealised exchange (gain)/loss Employee Stock Compensation Expense Exceptional items, net (a) Provision for contingencies writeback (b) Unrealised mark to market loss on foreign exchange forward contracts (c) Net gain on sale of net assets of discontinued operations (d) Impairment of intellactual property 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 assets sold Operating prot 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 II. CASH FLOWS FROM INVESTING ACTIVITIES : Purchase of Fixed assets Acquisition of Intangible assets Income from exceptional items, net of taxes on exceptional item Interest received Dividend received Loan to Subsidiary/Joint Venture Companies, net Investment in Subsidiary/ Joint Venture/ Associate Companies Sale of investments Movement in reserves of ESOP trust Purchase of shares by ESOP Trust Purchase of investments Long term Current Net cash used for investing activities III. 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) nancing activities IV. NET CHANGE IN CASH AND CASH EQUIVALENTS (I + II + III) V. CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR VI. 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 deposit accounts - in unpaid dividend accounts* * - These balances are not available for use by the Company as they represent corresponding unpaid dividend liabilities. 1,144,638 742,830 (90,328) 15,754 (20,000) 221,000 15,777 7 39,529 (25,174) (215,945) (734) 1,827,354 (267,874) (834,808) 54,986 431,689 1,211,347 (51,448) 1,159,899 (839,132) (128,850) 25,174 215,945 (1,349,879) (55,179) 20,098,723 23,929 (30,860) (18,706,203) (746,332) 100,456 78,643 (500,000) (84,975) (39,588) 11,080 (434,384) (20,817) 81,244 60,427 2,515 46,478 7,568 3,866 60,427 March 31, 2008 5,139,521 689,980 (17,894) 27,637 (3,297,546) 220,000 10,899 97 30,925 (11,551) (138,746) (729) 36 2,652,629 (170,761) 494,473 (150,487) (36,470) 2,789,384 (140,750) 2,648,634 (960,856) 2,668,447 11,593 138,746 (265,093) 17,060,738 47,166 (89,893) (50,028) (21,222,452) (2,661,632) 311,799 65,817 (300,000) (50,985) (30,925) 23,257 18,963 5,965 75,279 81,244 3,997 43,695 32,142 1,410 81,244
As per our report of even date For S.R. BATLIBOI & ASSOCIATES Chartered Accountants
John Shaw Director
Notes to the Financial Statements for the year ended March 31, 2009
(All amounts in Indian Rupees and US Dollars are in thousands, except share and per share data) 1. Background a. Incorporation and history 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. Biocon entered into an agreement to set up a Joint Venture Company Biocon Biopharmaceuticals Private Limited (BBPL) with CIMAB SA (CIMAB), to manufacture and market products using technology and to carry out research activities. BBPL was incorporated on June 17, 2002. On April 18, 2003, Biocon acquired a 51 per cent shareholding in BBPL. On January 10, 2008, Biocon entered into an agreement to set up a Joint Venture Company with Dr. B.R. Shetty to form a joint venture company NeoBiocon FZ-LLC, incorporated in Dubai (NeoBiocon). The Company has also established Biocon Research Limited, a subsidiary of the Company to undertake research in novel and innovative drug initiatives. Effective April 30, 2008, Biocon acquired 71% equity interest in AxiCorp GmbH, Germany 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 GmbH. Biocon is engaged in the manufacture of biotechnology products in the pharmaceutical sector through fermentation based technology and is also engaged in the formulation business. During the year ended March 31, 2007, the Company has received an approval as the developer as Biocon SEZ at the Biocon Park facility at also received an approval for SEZ unit to be located within Biocon SEZ. 2. Statement of signicant accounting policies a. (i) Basis of preparation The nancial statements have been prepared to comply in all material respects with the Accounting Standards, notied by the Companies Accounting Standards Rules, 2006 and the relevant provisions of the Companies Act, 1956. The nancial 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). The ESOP trust is consolidated with the accounts of the Company. (ii) Use of estimates The preparation of nancial 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 nancial 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. (iii) Changes in Accounting Policies Exchange Differences on Long Term Foreign Currency Monetary Items Upto March 31, 2008, the Company was charging off exchange differences arising on foreign currency monetary assets and liabilities to the prot and loss account. During the year ended March 31, 2009, pursuant to Companies (Accounting Standards) Amendment Rules, 2009, notied on March 31, 2009, the Company has exercised the option of deferring the charge to the Prot and Loss Account arising on exchange differences, in respect of accounting periods commencing on or after December 7, 2006, on long-term foreign currency monetary items (i.e. monetary assets or liabilities expressed in foreign currency and having a term of 12 months or more at the date of origination). As a result, such exchange differences so far as they relate to the acquisition of a depreciable capital asset have been adjusted with the cost of such asset and would be depreciated over the balance life of the asset, and in other cases, have been accumulated in Foreign Currency Monetary Item Translation Difference Account and would be amortized over the balance period of such long-term asset/ liability but not beyond, accounting period ending on or before March 31, 2011. There has been no impact of the above adoption on the nancial results of the Company for the year ended March 31, 2009. 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 xed 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 Research and development equipment Furniture and xtures 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 time whichever lower. 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 prot and loss account. Assets individually costing less than Rs 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 ows are discounted to their present value at the weighted average cost of capital. 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 Costs relating to intellectual property rights which are acquired are capitalised and amortised on a straight-line basis over their estimated useful lives or ten years whichever is lower. 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 benets. Research and development expenditure of a capital nature is added to xed 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 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 nished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a rst-in-rst-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 nished 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 nished 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 (i) Revenue is recognised when the signicant 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 nancial statements, sales are reected gross and net of excise duty in the prot and loss account. (ii) The Company enters into certain dossier sales, licensing and supply agreements and revenue from such agreements are recognised in the period in which the Company completes all its performance obligations. g. Investments Investments that are readily realisable and intended to be held for not more than twelve months are classied as current investments. All other investments are classied 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 benets (i) Retirement benets in the form of Provident Fund is a dened contribution scheme and the contributions are charged to the Prot and Loss Account of the year when the contributions to the government funds are due. (ii) Gratuity liability is a dened benet obligations and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each nancial year. The gratuity benet of the Company is administered by a trust formed for this purpose through the group gratuity scheme. Actuarial gains/losses are immediately taken to prot and loss account and are not deferred. (iii) Leave encashment liability is in accordance with the rules of the Company. 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 nancial year. 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 Companys net investment in a non-integral foreign operation is accumulated in a foreign currency translation reserve in the nancial 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 nancial 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 nancial statements and amortised 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 nancial 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 prot and loss in the year in which the exchange rates change. Any prot 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. j. Income tax Tax expense comprises of current, deferred and fringe benet tax. Current income tax and fringe benet tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reects 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 are recognised only to the extent that there is reasonable certainty that sufcient 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 prots. 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 sufcient 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 sufcient 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 sufcient 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 specied period. In the year in which the MAT credit becomes eligible to be recognised 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 prot 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 specied period. k. 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 amortised over the vesting period of the option on a straight line basis. l. Earnings per share (EPS) Basic earnings per share are calculated by dividing the net prot or loss for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes) 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 prot 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. m. 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 classied 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 xed 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. n. Segment reporting Identication 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 Companys 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 nancial statements of the Company as a whole. o. Provisions A provision is recognised when an enterprise has a present obligation as a result of past event; it is probable that an outfow 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 reect the current best estimates.
p. 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 indirectly 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 Prot 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. q. Cash and Cash Equivalents Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term investments with an original maturity of three months or less. r. 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 prot and loss account. Net gains are ignored.
3. Share capital Authorised: 220,000,000 (March 31, 2008 - 120,000,000) equity shares of Rs 5 each (March 31, 2008 - Rs 5 each) Issued, subscribed and paid-up: 200,000,000 (March 31, 2008 - 100,000,000) equity shares of Rs 5 each (March 31, 2008 - Rs 5 each), fully paid (a) Of the above equity shares:
March 31, 2009
March 31, 2008
1,100,000
600,000
1,000,000
500,000
(i) 30,800 equity shares of Rs 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 Rs 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 through the issue of 202,780 equity shares of Rs 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 Rs 403.8 per equity share has been credited to securities premium account. (b) Also refer to Note 19 for shares allotted under the Employees Stock Option Plan. (c) On November 11, 2003, the Company issued 86,324,700 equity shares of Rs 5 each as fully paid-up bonus shares by capitalisation of balance in the prot and loss account of Rs 431,624. (d) On September 15, 2008 the Company issued 100,000,000 equity shares of Rs 5 each as fully paid bonus shares by capitalisation of balance in the securities premium account of Rs 500,000.
4. Reserves and surplus Revaluation Reserve Balance Less: Transfer to prot and loss account Securities Premium Balance Less: Utilised during the year for issuance of bonus shares ESOP trust Balance Add: Dividend, interest income and prot on sale of shares, net General Reserve Balance Add: Transfer from Prot and Loss Account Stock compensation adjustment (Also see note 19) Stock options outstanding Additions during the year Deletions during the year Less: Deferred employee stock compensation expense Balance in prot and loss account
March 31, 2009
March 31, 2008
9,489 9,489 3,288,478 (500,000) 2,788,478 145,856 23,929 169,785 1,415,552 111,799 1,527,351 313,950 3,836 23,981 293,805 49,345 244,460 8,009,190 12,748,753
11,090 1,601 9,489 3,288,478 3,288,478 98,690 47,166 145,856 980,627 434,925 1,415,552 324,318 10,368 313,950 96,324 217,626 7,704,962 12,781,963
(i) Deferred employee stock compensation expense (Also see note 19): 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 during the year* Stock compensation expense charged to Subsidiaries during the year Closing balance of deferred employee stock compensation expense 96,324 3,836 (23,981) (15,754) (11,080) 49,345 162,415 (10,368) (32,466) (23,257) 96,324
* Including a sum of Rs Nil (March 31, 2008 - Rs 4,829) being the compensation cost for employees of the discontinued operations.
5. Secured loans From banks Cash credit, packing credit, etc.
March 31, 2009 1,014,565 1,014,565
March 31, 2008 892,634 892,634
(a) Cash credit, packing credit, etc. (i) The Company has fund based working capital facilities with State Bank of India (SBI). These facilities are repayable on demand, secured by a pari-passu rst charge on current assets. The Company has utilised Rs 291 [March 31, 2008 - Rs 443,148 inclusive of foreign currency loans of Rs Nil (US$ Nil) (March 31, 2008 - Rs 432,944) (US$ 10,841)]. (ii) The Company has fund based working capital facilities with Hongkong and Shanghai Banking Corporation (HSBC). These facilities are repayable on demand, secured by pari-passu rst charge on current assets. As on March 31, 2009, the Company has utilised fund based limits of Rs 784,274 (March 31,2008 - Rs 242,738), inclusive of foreign currency denominated loans of Rs 763,050 (US$ 15 Million) [March 31, 2008 - Rs 239,820 (US$ 6,000)]. (iii) The Company has working capital facilities with Canara Bank (CB). These facilities are repayable on demand, secured by a pari-passu rst charge on current assets of the Company. As on March 31, 2009, the Company has utilised Rs Nil (March 31, 2008 - Rs 206,748) inclusive of foreign currency denominated loans of Rs Nil (US$ Nil ) [March 31, 2008 - Rs 196,372 (US$ 4,913)]. (iv) The Company has fund based working capital facility with ABN Amro Bank . These facilities are repayable on demand, secured by a pari-passu rst charge on the current assets of the Company. As on March 31, 2009 the Company has utilised Rs 230,000 (March 31, 2008 - Rs Nil). (v) All the above banks have entered into an inter-se agreement for operational convenience for the above working capital limits effecting the modication of the above charge and creation of a pari-passu charge on the current assets of the Company in favour of all the above banks. 6. Unsecured loans Deferred payment liability NMITLI - CSIR Loan Financial assistance from DSIR March 31, 2009 611,550 3,312 10,000 624,862 March 31, 2008 543,039 3,180 546,219
(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 Rs 24,375. As at March 31, 2009, the Company has utilised Rs 354 (March 31, 2008 - Rs 354). (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 Rs 648,938. As at March 31, 2009, the Company has utilised Rs 611,196 (March 31, 2008 - Rs 542,685). (iii) On March 31, 2005, the Company entered into an agreement with the Council of Scientic and Industrial Research (CSIR), for an unsecured loan of Rs 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 annual equal installments starting from April 2009 and carry an interest rate of 3 per cent per annum. The amount due for repayment within one year is Rs 331. (iv) During the year ended March 31, 2009, the Department of Scientic and Industrial Research (DSIR) has sanctioned nancial assistance for a sum of Rs 17,000 to the Company for part nancing one of its research projects. Of the said sanctioned amount, the Company has received the rst installment of Rs 10,000 during the year. The research project is ongoing and is expected to be completed in June 2009. The assistance is repayable in the form of royalty payments post commercialisation of the project in ve annual installments.
7. Deferred tax liability (net)
Deferred tax (asset)/ liability as at March 31, 2008 429,076 (13,941) (13,599) (3,299) 398,237 397,569
Current year charge/(credit) 21,836 (4,302) (5,363) 12,171 668
Deferred tax (asset)/ liability as at March 31, 2009 450,912 (18,243) (18,962) (3,299) 410,408 398,237
Depreciation/Amortisation Employee retirement benets Provision for doubtful debts Others Year ended March 31, 2008
The Company has export oriented units 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.
8. (i) Fixed assets Cost/Valuation Land Freehold (revalued) Freehold (others) Leasehold Buildings (revalued) Buildings (others) Leasehold improvements Plant and machinery Research and development equipment Furniture and xtures Vehicles Year ended March 31, 2008 Accumulated depreciation Buildings (revalued) Buildings (others) Leasehold improvements Plant and machinery Research and development equipment Furniture and xtures Vehicles Year ended March 31, 2008 Net book value Land Freehold (revalued) Freehold (others) Leasehold Buildings (revalued) Buildings (others) Leasehold improvements Plant and machinery Research and development equipment Furniture and xtures Vehicles Year ended March 31, 2008
Balance at the beginning of the year
Additions during the year
Deletions during the year
Balance at the end of the year
8,967 52,088 226,420 16,561 1,658,489 3,191 5,714,294 760,915 67,093 17,063 8,525,081 8,099,852 16,561 198,552 795 1,507,913 239,688 36,613 6,363 2,006,485 1,449,958
159,801 641,665 139,604 19,604 401 961,075 595,401 69,227 319 553,015 90,975 10,849 2,445 726,830 675,581
170,172 119,054
8,967 52,088 226,420 16,561 1,818,290 3,191 6,355,959 900,519 86,697 17,464 9,486,156 8,525,081 16,561 267,779 1,114 2,060,928 330,663 47,462 8,808 2,733,315 2,006,485
8,967 52,088 226,420 1,459,937 2,396 4,206,381 521,227 30,480 10,700 6,518,596 6,649,894
8,967 52,088 226,420 1,550,511 2,077 4,295,031 569,856 39,235 8,656 6,752,841 6,518,596
Notes: (a) Certain freehold land and buildings were revalued on November 1, 1994, based on the estimated replacement cost after considering depreciation upto that date, as per valuers reports and the resultant surplus of Rs 34,529 was credited to revaluation reserve. Of this reserve, Rs 25,040 (March 31, 2008 - Rs 25,040) has been transferred to the prot 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 Rs 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 Rs 99,417 from KIADB. During the quarter ended June 30, 2005, the Company paid an advance of Rs 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 certicate 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, Vishakapatnam, Andhra Pradesh, on a long-term lease basis for a consideration of Rs 260,100. As at March 31, 2009, the Company has paid the entire consideration towards the lease and is in the process of completing the formalities for registering the said lease in favour of the Company.
8. (ii) Intangible assets
Balance at the beginning of the year
Amortisation/ Impairment during the year
Balance at the end of the year
Cost / Acquisition Intellectual Properties from Nobex - Under development - Under commercialisation Marketing rights for products Year ended March 31, 2008 Accumulated Amortisation Intellectual Properties from Nobex - Under commercialisation Year ended March 31, 2008 Net Value Intellectual Properties from Nobex - Under development - Under commercialisation Marketing rights for products Year ended March 31, 2008 220,000 56,000 276,000 512,000 220,000 40,000 128,850 388,850 276,000 25,138 25,138 9,138 16,000 16,000 16,000 41,138 41,138 25,138 220,000 81,138 301,138 521,138 128,850 128,850 220,000 220,000 81,138 128,850 429,988 301,138
(i) The Company acquired patents relating to certain technologies for oral insulin, oral BNP and Apaza (collectively IP's) for a total cost of Rs 521,138. In the Board meeting of October 18, 2006, the Company decided to license out it's IP (Apaza) and certain other IP's for further development and commercialisation, and amortised Apaza over a period of 5 years effective October 2006. In December 2007, as a matter of prudence, the Company recorded a total impairment of Rs 220,000, in respect of one of it's intellectual property (Oral BNP) acquired by the Company during the year ended March 31, 2006 for drug development. The Company determined to expense the intangible assets in view of adverse reports and decline in sales trend of Natrear/Neseritide, a competing drug. (ii) The Oral Insulin product is in the development stage, and hence no amortisation has been recorded by the Company. (iii) During the year ended March 31, 2009, the Company acquired marketing rights of certain products from BBPL for a sum of Rs 128,850. These rights give the Company an exclusive right of marketing the products in certain territories. Pending receipt of regulatory approvals from the authorities of such countries, no amortisation has been recorded by the Company
9. Investments Long-term investments (At cost) A) Non trade: National Savings Certicates B) Trade investments: In subsidiary companies: Unquoted and fully paid-up 50,000 (March 31, 2008 - 50,000) equity shares of Rs 10 each of Clinigene International Limited 2,874,830 (March 31, 2008 - 2,874,830) equity shares of Rs 10 each of Syngene International Limited 499,400 (March 31, 2008 - Nil) equity shares of Re 1 each of Biocon Research Limited 100,000 (March 31, 2008 - Nil) equity shares of CHF 1 each of Biocon SA, Switzerland In Joint Venture Companies: Unquoted and fully paid-up 8,976,000 (March 31, 2008 - 8,976,000) equity shares of Rs 10 each of Biocon Biopharmaceuticals Private Limited 150 (March 31, 2008 - 150) equity shares of United Arab Emirates Dirham (AED) 1,000 each of Neo Biocon FZ LLC C) Others Shares of the Company held by ESOP Trust (Quoted) Unquoted and fully paid-up 2,722,014 (March 31, 2008 - 2,722,014) Series B1 Preferred convertible Stock at US$ 1.55 each, fully paid, par value US $0.001 each of Vaccinex Inc., USA 2,857,142 (March 31, 2008 - 1,428,571) Series A Preferred Stock at US$ 0.70 each, fully paid, par value US$ 0.00001 each of IATRICa Inc., USA
March 31, 2009
March 31, 2008
13 13
13 13
500 84,328 499 3,960
500 84,328 -
89,760 1,613
89,760 1,613
121,438
90,578
185,795 90,370 578,263 578,276
185,795 39,650 492,224 492,237
(i) During the year ended March 31, 2009, Biocon Research Limited was incorporated as a wholly owned subsidiary for undertaking research in novel and innovative drug initiatives. As at March 31, 2009 Biocon Research Limited is yet to commence commercial activities. (ii) During the year ended March 31, 2009, Biocon SA a wholly owned subsidiary was incorporated in Switzerland for development and marketing of biopharmaceuticals in European markets. As at March 31, 2009, Biocon SA acquired 78% equity interest in AxiCorp GmbH, Germany and has commenced clinical development of insulin for the European markets. (iii) Biocon Biopharmaceuticals Private Limited (BBPL), Bangalore, India is a 51% joint venture between the Company and CIMAB SA, engaged in research, development, manufacturing and marketing of Biopharmaceuticals. At March 31, 2009, the aggregate amount of Biocons interest in the assets, liabilities, income and expenses of BBPL is Rs 449,718 (March 31, 2008 - Rs 446,075), Rs 422,992 (March 31, 2008 - Rs 378,751), Rs 94,651(March 31, 2008 - Rs 69,899) and Rs 121,036 (March 31, 2008 - Rs 137,791) respectively. Further, the Company has granted a long-term loan of Rs 317,511 (March 31, 2008 - Rs 281,617) to fund the operations of BBPL repayable over a period of 5 years and carry an interest of 10.5% p.a. [See Note 22]. The share of the Company in the accumulated losses of BBPL as at March 31, 2009 stood at Rs 192,447 (March 31, 2008 - Rs 166,062). Since BBPL has commenced full edged operations only recently, and considering the future business potential, management believes that there is no diminution in the value of the investment. (iv) NeoBiocon FZ LLC (NeoBiocon), was incorporated in Dubai as a 50% joint venture between the Company and B R Shetty, is engaged in development, marketing and distribution of biopharmaceuticals in the Gulf region. As at March 31, 2009, the aggregate amount of Biocons interest in the assets, liabilities, income and expenses of NeoBiocon is Rs 5,059 (March 31, 2008 - Rs 3,093) and Rs 3,595 (March 31, 2008 - Rs 3,902), Rs 4,251 (March 31, 2008 - Rs Nil) and Rs 8,225 (March 31, 2008 - Rs 2,441 respectively). The share of the Company in the accumulated losses of NeoBiocon as at March 31, 2009 stood at Rs 6,792 (March 31, 2008 - 2,441). Since NeoBiocon has commenced marketing/distribution activities during the current year, the management believes that, there is no diminution in the value of the investment. (v) As on March 31, 2009, the ESOP Trust held 7,055,168 shares (March 31, 2008 - 3,403,759) of the Company towards grant/exercise of shares to/by employees of the Company and its subsidiaries under the ESOP Scheme. Also refer Note 19. (vi) The Company has entered into a Securities Purchase Agreement with Vaccinex Inc., USA (Vaccinex) on November 3, 2004 to invest an amount of US$ 4 million (US$ 1 million in Series B1 Preferred Convertible Stock and US$ 3 million in Series B Convertible Promissory Notes). Further, the Company has entered into a Research and Collaboration Agreement to discover, develop, and commercialize human therapeutic monoclonal antibodies. Vaccinex is engaged in research and development activities and has been incurring losses. As Vaccinex is a development stage enterprise and of strategic importance to the Company, it believes that there is no diminution in the value of this investment. (vii) The Company has entered into a Securities Purchase Agreement with IATRICa Inc, USA (IATRICa) on January 18, 2008 to invest an amount of US$ 3 Million in Series A Preferred Stock. Further, the Company has entered into a Development and License Agreement to research, develop and commercialise novel immuno conjugates for treatment of cancer and infectious disorders. The Company has 22% voting rights in IATRICa.
Other Investments Current and unquoted (at lower of cost and fair market value) 29,108,926 units (March 31, 2008 - Nil) of Rs 10 each in Birla Sun Life Liquid Plus [Market Value Rs 291,287 (March 31, 2008 - Rs Nil)] 7,231,070 units (March 31, 2008 - Nil) of Rs10 each in Birla Sun Life Short Term Fund [Market Value Rs 72,351 (March 31, 2008 - Rs Nil)] 27,811,567 units (March 31, 2008 - Nil) of Rs10 each in Fortis Money Plus Fund Institutional Plan [Market Value Rs 278,202 (March 31, 2008 - Rs Nil)] 67,895,791 units (March 31, 2008 - Nil) of Rs10 each in HDFC Cash Management Fund [Market Value Rs 681,097 (March 31, 2008 - Rs Nil)] 60,485,439 units (March 31, 2008 - 2,854,677) of Rs10 each in ICICI Prudential Flexible Income Plan [Market Value Rs 639,543 (March 31, 2008 - Rs Nil)] 4,332,133 units (March 31, 2008 - 4,040,196) of Rs10 each in Kotak Flexi Debt Fund [Market Value Rs 43,527 (March 31, 2008 - Rs Nil)] 826,143 units (March 31, 2008 - 194,118) of Rs 1001 each in Reliance Liquid Plus Fund [Market Value Rs 827,085 (March 31, 2008 - Rs Nil)] 2,274,143 units (March 31, 2008 - Nil) of Rs 10 each in Tata Floater Fund [Market Value Rs 22,822 (March 31, 2008 - Rs Nil)] 19,81,816 units (March 31, 2008 - Nil) of Rs 10 each in HSBC Cash Institutional Fund [Market Value Rs 20,690 (March 31, 2008 - Rs Nil)] 11,96,345 units (March 31, 2008 - Nil) of Rs 10 each in HSBC Ultra Short Term Bond Fund [Market Value Rs 11,981 (March 31, 2008 - Rs Nil)] Nil units (March 31, 2008 - 1,025,462) of Rs 10 each in HSBC Liquid Plus Fund [Market Value Rs Nil (March 31, 2008 - Rs 100,381)] Nil units (March 31, 2008 - 54,880,236) of Rs 10 each in Templeton Floating Rate Fund [Market Value Rs Nil (March 31, 2008 - Rs 549,357)] Nil units (March 31, 2008 - 2,029,909) of Rs 10 each in HSBC Flexi Debt Fund [Market Value Rs Nil (March 31, 2008 - Rs 20,299)] Nil units (March 31, 2008 - 56,042) of Rs 10 each in ICICI Prudential Liquid Plan [Market Value Rs Nil (March 31, 2008 - Rs 560)] Nil units (March 31, 2008 - 41,846,818) of Rs 10 each in ING Liquid Plus Fund [Market Value Rs Nil (March 31, 2008 - Rs 418,606)] Nil units (March 31, 2008 - 47,443,051) of Rs 10 each in Lotus India Liquid Plus [Market Value Rs Nil (March 31, 2008 - Rs 475,175)] Nil units (March 31, 2008 - 194,118) of Rs 1001 each in Reliance Liquid Plus Fund [Market Value Rs Nil (March 31, 2008 - Rs 194,338)] Nil units (March 31, 2008 - 4033,100) of Rs 10 each in UTI Mutual Fund - FMP [Market Value Rs Nil (March 31, 2008 - Rs 40,363)] Nil units (March 31, 2008 - 50,301) of Rs 1,000 each in UTI Liquid Plus Fund [Market Value Rs Nil (March 31, 2008 - Rs 50,312)] Nil units (March 31, 2008 - 13,122,113) of Rs 10 each in Sundaram BNP Liquid Plus [Market Value Rs Nil (March 31, 2008 - Rs 131,549)] Nil units (March 31, 2008 - 2,854,677) of Rs 10 each in ICICI Flexible [Market Value Rs Nil (March 31, 2008 - Rs 30,184)] Nil units (March 31, 2008 - 48,920,390) of Rs 10 each in JM Money Manager Fund [Market Value Rs Nil (March 31, 2008 - Rs 489,404)] Nil units (March 31, 2008 - 50,238) of Rs 1,000 each in Mirae Asset Liquid Plus [Market Value Rs Nil (March 31, 2008 - Rs 50,308)] Nil units (March 31, 2008 - 4,040,196) of Rs 10 each in Kotak Flexi Debt Scheme [Market Value Rs Nil (March 31, 2008 - Rs 40,528)] Nil units (March 31, 2008 - 10,000,000) of Rs 10 each in ING Mutual Fund - FMP [Market Value Rs Nil (March 31, 2008 - Rs 100,484)] Nil units (March 31, 2008 - 56,015) of Rs 10 each in Reliance Liquidity Fund [Market Value Rs Nil (March 31, 2008 - Rs 560)] Nil units (March 31, 2008 - 30,116,289) of Rs 10 each in Tata Mutual Fund - FMP [Market Value Rs Nil (March 31, 2008 - Rs 301,475)] Nil units (March 31, 2008 - 61,893) of Rs 1,000 each in DSP Liquid Plus Fund [Market Value Rs Nil (March 31, 2008 - Rs 61,930)] Nil units (March 31, 2008 - 20,395,756) of Rs 11 Each in Birla Dynamic Bond Fund [Market Value Rs Nil (March 31, 2008 - Rs 214,904)] Nil units (March 31, 2008 - 35,000,000) of Rs 10 each in UTI Mutual Fund - FMP [Market Value Rs Nil (March 31, 2008 - Rs 350,532)] Nil units (March 31, 2008 - 26,915,214) of Rs 10 each in DWS Credit Opportunities Fund [Market Value Rs Nil (March 31, 2008 - Rs 270,627)] Nil units (March 31, 2008 - 29,000,000) of Rs 10 each in Lotus Mutual Fund - FMP [Market Value Rs Nil (March 31, 2008 - Rs 290,487)] Nil units (March 31, 2008 - 10,000,000) of Rs 10 each in Lotus Mutual Fund - FMP [Market Value Rs Nil (March 31, 2008 - Rs 101,097)]
March 31, 2009 291,287 72,351 278,202 681,097 639,543 43,527 827,079 22,822 20,690 11,981 2,888,579 3,466,855 3,345,417 121,438 1,009,947
March 31, 2008 100,381 549,357 20,299 560 418,606 475,175 194,337 40,331 50,312 131,533 30,184 489,404 50,238 40,528 100,484 560 301,475 61,917 214,674 350,000 270,010 290,000 100,000 4,280,365 4,772,602 4,682,024 90,578 1,447,108
Aggregate value of unquoted investments Aggregate value of quoted investments (cost) Aggregate value of quoted investments (market value) (a) Other Investments include current and unquoted investments of the ESOP Trust of Rs 32,671 (March 31, 2008 - Rs Nil)
The following investments were purchased and sold during the year : Purchase and Sale of 250,050 Units (March 31, 2008 - Nil ) of Rs 1,000 each in Bharti AXA Liquid Fund Purchase and Sale of 252,936 Units (March 31, 2008 - Nil ) of Rs 1,000 each in Bharti AXA Treasury Plus Fund Purchase and Sale of 4,990,940 Units (March 31, 2008 - 64,873,497) of Rs 10 each in Birla Sun Life Cash Plus Fund Purchase and Sale of 7,056,224 Units (March 31, 2008 - Nil ) of Rs10 each in Birla Sun Life Interval Income Fund Purchase and Sale of 24,479,518 Units (March 31, 2008 - 74,968,767) of Rs 10 each in Birla Sun Life Liquid Plus Fund Purchase and Sale of 10,255,095 Units (March 31, 2008 - Nil ) of Rs 10 each in Canara Robeco Fixed Maturity Plan Purchase and Sale of 29,973,324 Units (March 31, 2008 - Nil ) of Rs 10 each in Canara Robeco Monthly Interval Fund Purchase and Sale of 1,994,067 Units (March 31, 2008 - Nil ) of Rs 10 each in DBS Chola Liquidity Fund Purchase and Sale of 1,430,419 Units (March 31, 2008 - 300,046) of Rs 10 each in DWS Money Plus Fund Purchase and Sale of 36,380,936 Units (March 31, 2008 - 430,005,712) of Rs 10 each in Fortis Money Plus Fund Purchase and Sale of 8,000,666 Units (March 31, 2008 - Nil ) of Rs 10 each in Fortis Overnight Fund Purchase and Sale of 37,431,798 Units (March 31, 2008 - Nil ) of Rs 19 each in HDFC Cash Management Fund Purchase and Sale of 102,757,805 Units (March 31, 2008 - Nil ) of Rs 10 each in HDFC Cash Management Fund Purchase and Sale of 13,732,221 Units (March 31, 2008 - Nil ) of Rs 10 each in HDFC Liquid Fund Purchase and Sale of 28,553,280 Units (March 31, 2008 - Nil ) of Rs 12 each in HDFC Liquid Fund Purchase and Sale of 55,735,034 Units (March 31, 2008 - 140,823,674) of Rs 10 each in HSBC Cash Fund Purchase and Sale of 20,754,520 Units (March 31, 2008 - Nil ) of Rs 10 each in HSBC Fixed Term Series - 48 Purchase and Sale of 21,154,352 Units (March 31, 2008 - Nil ) of Rs 10 each in HSBC Floating Rate Fund Purchase and Sale of 20,365,559 Units (March 31, 2008 - Nil ) of Rs 10 each in HSBC Interval Fund Plan Purchase and Sale of 71,381,134 Units (March 31, 2008 - 165,187,063) of Rs 10 each in HSBC Ultra Short Term Bond Fund Purchase and Sale of 7,539,028 Units (March 31, 2008 - Nil ) of Rs 11 each in ICICI Monthly Interval Plan Purchase and Sale of 19,357,623 Units (March 31, 2008 - 47,270,636) of Rs 11 each in ICICI Prudential Flexible Income Plan Purchase and Sale of 20,467,500 Units (March 31, 2008 - Nil ) of Rs 16 each in ICICI Prudential Flexible Income Plan Purchase and Sale of 55,507,786 Units (March 31, 2008 - 124,993,750) of Rs 10 each in ICICI Prudential Institutional Liquid Plan Purchase and Sale of 5,993,748 Units (March 31, 2008 - 45,944,407) of Rs 10 each in ING Liquid Fund Purchase and Sale of 24,131,620 Units (March 31, 2008 - 291,137,540 ) of Rs 10 each in ING Liquid Plus Fund Purchase and Sale of 4,226,120 Units (March 31, 2008 - 38,335,504) of Rs 10 each in Kotak Flexi Debt Fund Purchase and Sale of 3,464,165 Units (March 31, 2008 - 34,756,013) of Rs 12 each in Kotak Liquid Fund Purchase and Sale of 4,198,700 Units (March 31, 2008 - Nil ) of Rs 10 each in Kotak Monthly Interval Plan Purchase and Sale of 25,524,426 Units (March 31, 2008 - Nil ) of Rs 10 each in Lotus India Fixed Maturity Plan - 3 Months Series Purchase and Sale of 60,352,195 Units (March 31, 2008 - 83,490,531) of Rs 10 each in Lotus India Liquid Fund Purchase and Sale of 138,391,858 Units (March 31, 2008 - 97,344,072) of Rs 10 each in Lotus India Liquid Plus Fund Purchase and Sale of 22,427,340 Units (March 31, 2008 - Nil ) of Rs 12 each in Lotus India Liquid Plus Fund Purchase and Sale of 20,018,000 Units (March 31, 2008 - Nil ) of Rs 10 each in Lotus India Quarterly Interval Fund Purchase and Sale of 20,217,183 Units (March 31, 2008 - Nil ) of Rs 10 each in Lotus India Quarterly Interval Fund Purchase and Sale of 5,118,028 Units (March 31, 2008 - Nil ) of Rs 10 each in Lotus India Quarterly Interval Fund Purchase and Sale of 67,003,421 Units (March 31, 2008 - Nil ) of Rs 10 each in Lotus Liquidity Fund Purchase and Sale of 70,079 Units (March 31, 2008 - Nil ) of Rs 1,001 each in Mirae Asset Liquid Fund Purchase and Sale of 308,387 Units (March 31, 2008 - Nil ) of Rs 959 each in Mirae Asset Liquid Plus Fund Purchase and Sale of 114,871 Units (March 31, 2008 - 859,644) of Rs 1,001 each in Reliance Liquid Plus Fund Purchase and Sale of 81,996,902 Units (March 31, 2008 - 98,613,398) of Rs 10 each in Reliance Liquidity Fund Purchase and Sale of 25,025,738 Units (March 31, 2008 - 24,999,000 ) of Rs 17 each in Reliance Medium Term Fund Purchase and Sale of 20,935,560 Units (March 31, 2008 - Nil ) of Rs 10 each in SBI Premier Liquid Fund Purchase and Sale of 7,585,400 Units (March 31, 2008 - Nil ) of Rs 10 each in Standard Chartered Floating Rate Fund Purchase and Sale of 39,998 Units (March 31, 2008 - Nil ) of Rs 550 each in Standard Chartered Liquidity Manager Fund Purchase and Sale of 21,285,796 Units (March 31, 2008 - Nil ) of Rs 10 each in State Bank of India Short Term Horizon Fund Purchase and Sale of 14,937,416 Units (March 31, 2008 - Nil ) of Rs 10 each in Sundaram BNP Liquid Fund Purchase and Sale of 15,140,275 Units (March 31, 2008 - 4,835,148) of Rs 10 each in Sundaram BNP Liquid Plus Plan Purchase and Sale of 9,795,486 Units (March 31, 2008 - Nil ) of Rs10 each in TATA Dynamic Bond Fund Purchase and Sale of 35,872,295 Units (March 31, 2008 - Nil ) of Rs10 each in Tata Floater Fund Purchase and Sale of 264,736 Units (March 31, 2008 - Nil ) of Rs 1,115 each in Tata Liquid Fund Purchase and Sale of 99,740 Units (March 31, 2008 - Nil ) of Rs 1,003 each in TATA Treasury Manager Ship Purchase and Sale of 10,093,900 Units (March 31, 2008 - Nil ) of Rs 10 each in Taurus Fixed Maturity Plan Purchase and Sale of 25,206,125 Units (March 31, 2008 - Nil ) of Rs 10 each in Taurus Fixed Maturity Plan Purchase and Sale of 5,003,172 Units (March 31, 2008 - Nil ) of Rs 10 each in Templeton Ultra Short Bond Fund Purchase and Sale of 225,883 Units (March 31, 2008 - 49,046) of Rs 1,019 each in UTI Liquid Fund - Cash Plan Purchase and Sale of 431,045 Units (March 31, 2008 - Nil ) of Rs 1,000 each in UTI Liquid Plus Fund - Institutional Plan Purchase and Sale of 1,376,156 Units (March 31, 2008 - Nil ) of Rs 18 each in UTI Money Market Plan Purchase and Sale of Nil Units (March 31, 2008 - 237,993) of Rs 1,001 each in DSP Liquid Plus Fund Purchase and Sale of Nil Units (March 31, 2008 - 48,031,044) of Rs 10 each in DWS Credit Oppurtunities Fund Purchase and sale of Nil units (March 31, 2008 - 46,000,000) of Rs 10 each in ABN Amro Cash Fund Purchase and sale of Nil units (March 31, 2008 - 74,850,299) of Rs 10 each in DWS Insta Cash Plus Fund Purchase and sale of Nil units (March 31, 2008 - 87,499,125) of Rs 10 each in Fidelity Cash Fund Purchase and sale of Nil units (March 31, 2008 - 87,514,175) of Rs 10 each in Fidelity Liquid Plus Purchase and sale of Nil units (March 31, 2008 -5,499,557 ) of Rs 10 each in Grindlays FRF Purchase and sale of Nil units (March 31, 2008 - 54,988) of Rs 1,000 each in Grindlays Liquidity Manager Purchase and sale of Nil units (March 31, 2008 - 14,991,108 ) of Rs 10 each in JP Morgan Liquid Plus Fund Purchase and sale of Nil units (March 31, 2008 - 9,995,502) of Rs 10 each in Reliance Monthly Interval Fund Purchase and Sale of Nil Units (March 31, 2008 - 29,950,582) of Rs 10 each in JM High Liquidity Purchase and sale Nil of units (March 31, 2008 - 9,425,515) of Rs 11 each in Reliance Short Term Fund
March 31, 2009 250,050 252,936 49,909 70,562 244,795 102,551 299,733 19,941 14,304 363,809 80,007 707,461 1,027,578 140,069 351,205 557,350 207,545 211,544 203,656 713,811 79,914 203,255 327,480 555,078 59,937 241,316 42,261 42,263 43,247 255,244 603,522 1,383,919 260,157 200,180 202,172 51,180 670,034 70,128 308,819 114,997 819,969 427,940 209,356 75,854 22,003 212,858 150,868 151,403 100,894 358,723 295,075 100,039 100,939 252,061 50,032 230,265 431,131 25,046 -
March 31, 2008 650,000 750,197 300,046 430,059 1,409,025 1,653,946 499,816 1,250,000 460,000 291,472 384,547 425,000 835,011 974,969 860,586 986,440 250,005 48,467 50,000 238,122 482,788 460,001 750,000 875,000 875,233 55,012 55,000 150,045 100,006 300,000 99,406
10. 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 Rs 116,360 and Rs 67,705 respectively
March 31, 2009 627,420 73,220 51,733 1,044,012 148,839 1,945,224
March 31, 2008 593,749 137,438 20,711 801,492 123,960 1,677,350 March 31, 2008
11. 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. Biocon SA 12. Cash and bank balances Cash on hand Balances with scheduled banks: In current accounts In exchange earners foreign currency account In deposit accounts
March 31, 2009
229,036 56,231 2,872,677 3,157,944 56,231 3,101,713 64,353 7,474 4,203 139,984 March 31, 2009 2,515 41,645 8,699 7,568 60,427
80,435 40,454 2,176,194 2,297,083 40,454 2,256,629 March 31, 2008 3,997 44,534 571 32,142 81,244
(a) Balances with scheduled banks in current accounts include balances in unclaimed dividend account of Rs 3,866 (March 31, 2008 - Rs 1,410). (b) Balances with scheduled banks in current accounts and deposit account include the balances of the ESOP Trust of Rs 4,800 (March 31, 2008 - Rs 41,719) and Rs 2,168 (March 31, 2008 - Rs 2,142), respectively. 13. Loans and advances (Unsecured and considered good ) Advances recoverable in cash or in kind or for value to be received Intercorporate loans to Subsidiary/Joint Venture Company Other Receivables Duty drawback receivable, net of provision of Rs 238 (March 31, 2008 - Rs 1,984) Deposits Balances with Customs, Excise and Sales Tax Authorities MAT Credit entitlement Advance income-tax, net of provision March 31, 2009 170,798 2,024,938 6,208 70,961 243,488 87,068 59,287 2,662,748 March 31, 2008 142,083 581,540 36,255 14,371 69,708 281,568 109,932 1,235,457
(a) Advances recoverable in cash or in kind or for value to be received include amounts due from employees to the ESOP Trust of Rs 6,226 (March 31, 2008 Rs 6,428). (b) Included under advance tax is Rs 13,998 (March 31, 2008 - Rs 13,998) and provision for taxation of Rs 9,520 (March 31, 2008 - Rs 9,031) of the ESOP Trust. March 31, 2009 (c) Included under Intercorporate loans are amounts due from Companies under the same management: (a) Subsidiary Clinigene Maximum amount outstanding at any time during the year Biocon SA Maximum amount outstanding at any time during the year (b) Joint Venture Company BBPL Maximum amount outstanding at any time during the year (d) Dues from companies under the same management (a) BBPL Maximum amount outstanding at any time during the year (b) Biocon SA Maximum amount outstanding at any time during the year 1,073 1,200 45,976 45,976 317,511 388,746 281,617 300,025 290,735 359,629 1,416,692 1,489,215 299,923 329,177 March 31, 2008
14. Current liabilities and provisions Liabilities Sundry Creditors Capital Others Advances from customers Defered 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
March 31, 2009
March 31, 2008
153,825 1,064,437 24,789 484,424 279 3,866 465,350 2,196,970
301,351 1,030,374 58,271 21,089 338 1,410 250,681 1,663,514
Provisions Proposed dividend Tax on proposed dividend Provision for Contingencies Leave encashment Gratuity Superannuation Fringe benet tax, net of advance tax 600,000 101,970 45,813 9,653 2,536 759,972 2,956,942 500,000 84,975 50,000 42,945 641 2,536 555 681,652 2,345,166
(a) Other liabilities include Rs 691 (March 31, 2008 - Rs 559) due to Ms Kiran Mazumdar Shaw, Managing Director and the maximum amount outstanding at any time during the year was Rs 1,162 (March 31, 2008 - Rs 3,556). (b) Disclosure required under Clause 22 of Micro, Small and Medium Enterprise Development Act, 2006 (MSMED Act) March 31, 2009 (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 9,144 70 102,485 1,484 264 264 March 31, 2008 15,982 139 43,931 856 194 194
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.
15. Other income
March 31, 2009
March 31, 2008
Interest income from intercorporate loans and others [gross of tax deducted at source - Rs 5,434 (March 31, 2008 - Rs 2,112)] Dividend earned On Current investments (trade) Gain on investments sold, net Miscellaneous income (including cross charge to subsidiary companies)
25,174
9,324
215,945 734 505,885 747,738
138,746 729 373,953 522,752
16. Manufacturing, contract research and other expenses Raw materials and packing materials consumed, net of duty drawback of Rs 7,465 (March 31, 2008 - Rs14,810) Purchase of goods for resale Employee costs Salaries, wages and bonus Group's contribution to provident fund Gratuity and leave encashment Employee stock compensation expense Directors sitting fees 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 Rs 4,354 (March 31,2008- Rs 10,257) 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 Exchange uctuation (net) Loss/(gain) on forward / option contracts, net Printing and stationery Loss on sale of assets, net Research & development expenses Miscellaneous expenses (Increase)/decrease in inventories of nished 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, 2009 3,988,697 320,103 665,824 31,766 22,001 15,754 660 84,636 11,304 15,075 33,211 129,096 104,743 712,231 17,053 11,339 112,205 125,367 14,783 74,749 67,389 187,349 91,922 (255) 7 15,777 (4,810) 12,871 283,002 60,619 7,204,468
March 31, 2008 3,742,542 291,344 571,936 29,909 (6,802) 27,637 570 73,013 11,882 9,667 31,274 120,737 107,772 761,171 22,748 (4,529) 87,483 116,037 16,008 77,880 65,208 134,993 114,045 (4,212) 97 10,899 (18,683) (28,085) 10,498 36 191,169 66,709 6,630,953
121,943 801,492 923,435 (147,077) (1,044,012) (1,191,089) (267,654) 6,936,814
86,557 717,276 803,833 (121,943) (801,492) (923,435) (119,602) 6,511,351
17. Research and development expenses Research and development expenses aggregate to Rs 743,717 (March 31, 2008 - Rs 646,459) and include Rs 139,604 (March 31, 2008 - Rs 170,335) on research and development equipment and Rs 6,051 (March 31, 2008 - Rs 5,003) on buildings and the remaining expenses incurred by the Company have been disclosed under the appropriate account heads.
18. Interest and nance charges Interest paid on: Packing credit, cash credit from banks Bank charges
March 31, 2009
March 31, 2008
39,529 9,842 49,371
22,010 6,688 28,698
19. 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 specically for this purpose, called the Biocon India Limited 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 inows 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 On September 27, 2001, the Company granted 71,510 options under the ESOP Plan 2000 to be exercised at a grant price of Rs 10 (before adjusting bonus and share split). The options vested with the employees equally over a four year period. Grant II Effective January 1, 2004, the Company granted 142,100 options (shares of Rs 5 each ) under ESOP Plan 2000 to be exercised at a price of Rs 5 per share. The options vest with the employees equally over a four year period. Details of Grant II Particulars March 31, 2009 No. of Options Outstanding at the beginning of the year Granted during the year Forfeited during the year Adjustment for issuance of Bonus share 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 On January 18, 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, pursuant to which the Compensation Committee on March 19, 2004 granted 422,000 options under the ESOP Plan 2004 to be exercised at a grant price of Rs 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, 2009 No. of Options Outstanding at the beginning of the year Granted during the year Forfeited during the year Adjustment for issuance of Bonus shares 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. 58,750 57,350 3,150 112,950 112,950 2 Weighted Average Exercise Price (Rs) 315.0 227.5 157.5* 157.5* March 31, 2008 No. of Options 76,000 17,250 58,750 58,750 3 Weighted Average Exercise Price (Rs) 315 315 315 315 10,780 4,900 7,840 7,840 7,840 1 Weighted Average Exercise Price (Rs) 5.0 4.4 2.5* 2.5* March 31, 2008 No. of Options 27,440 490 16,170 10,780 10,780 2 Weighted Average Exercise Price (Rs) 5.0 5.0 5.0 5.0 5.0 -
Grant IV On July 19, 2006, the Company approved the grant of 3,478,200 options 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 rst, second, third year from July 18, 2006, 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 IV Particulars March 31, 2009 No. of Options Outstanding at the beginning of the year Granted during the year Forfeited during the year Adjustment for issuance of Bonus shares 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 (Rs) *adjusted for the effect of bonus shares. The average market price of the Companys share during the year ended March 31, 2009 was Rs 163.42 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 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 prot and earnings per share under the fair value approach is as given below : Particulars Net Prot after taxes Add: Employee stock compensation under intrinsic value Less: Employee stock compensation under fair value Proforma prot Earnings per Shares - Basic - As reported - Proforma Earnings per Shares - Diluted - As reported - Proforma 5.64 5.51 21.84 21.70 5.79 5.66 22.51 22.38 March 31, 2009 1,117,997 15,754 41,665 1,092,086 March 31, 2008 4,349,245 27,637 54,167 4,322,715 March 31, 2009 2.9 147* 37.62% 34.29% 6.20 2.45 7.80% 0.57% March 31, 2008 3.9 289 37.62% 34.29% 6.20 2.45 7.80% 0.57% 2,927,299 34.855 298,170 2,657,284 27,380 5,293,888 1,997,298 2.9 110.0 Weighted Average Exercise Price (Rs) 289.0 463.0 306.0 171.0* 147.0* 137.5* March 31, 2008 No. of Options 3,251,640 311,821 484,262 151,900 2,927,299 201,025 3.9 161.2 Weighted Average Exercise Price (Rs) 278 395 275 275 289 275 -
A summary of movement in respect of the shares held by the ESOP Trust is as follows: Particulars Opening balance of equity shares not granted to employees and available with the ESOP Trust Add: Shares purchased by the ESOP trust Less: Shares alloted to the employees Add: Bonus shares (1:1) Closing balance of shares not granted to 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 3,403,759 300,000 (38,370) 3,389,779 7,055,168 2,118,088 3,296,590 3,355,080 216,749 (168,070) 3,403,759 270,555 2,726,274 March 31, 2009 March 31, 2008
20. Reconciliation of basic and diluted shares used in computing earnings per share Basic outstanding shares Less: Shares with the ESOP Trust
March 31, 2009 200,000,000 7,055,168 192,944,832
March 31, 2008 200,000,000 6,807,518 193,192,482 5,993,658 199,186,140
Add: Effect of dilutive options granted but not exercised/not eligible for exercise Weighted average shares outstanding and potential options outstanding in the ratio 1:1. 21. Exceptional items, net Exceptional items [income/(expense)], net, for the year ended March 31, 2009 comprise of the following: Gross i. Mark to market losses in respect of foreign exchange forward contracts ii. Writeback of unutilised provision for contingencies created in the prior year related to the transfer of enzymes business. Total (997,450) (1,017,450) 20,000
5,414,678 198,359,510
Note: The data on number of shares for year ended March 31, 2008 have been adjusted for the bonus shares issued by the Company on September 15, 2008
Tax effect 77,326 77,326
Net (940,124) 20,000 (920,124)
Exceptional items [income/(expense)], net, for the year ended March 31, 2008 comprise of the following: Gross i. Net gain on sale of net assets of discontinued operations ii. Impairment of intellectual property Total 3,297,546 (220,000) 3,077,546 Tax effect (758,670) 74,778 (683,892) Net 2,538,876 (145,222) 2,393,654
i. During the year ended March 31, 2009, the Company had entered into foreign exchange forward contracts to hedge highly probable forecasted transactions. The Company recorded mark to market losses in respect of foreign exchange forward contracts including realised gains/losses on termination/cancellation of said contracts. ii. Effective October 1, 2007, the Company transferred the net assets of the Enzymes business amounting to Rs 464,122 to a third party for a consideration of Rs 3,957,566 and recorded a gain of Rs 3,297,546, net of expenses including (provision for contingencies Rs 50,000) incidental and attributable to the sale of the business. iii. In December 2007, as a matter of prudence, the Company recorded a total impairment of Rs 220,000, in respect of one of its intellectual property (Oral BNP) acquired by the Company during the year ended March 31, 2006 for drug development. The Company determined to expense the intangible assets in view of adverse reports and decline in sales of Natrear/Nasertide, a competing drug.
22. Related party transactions Sl No Name of the related party Description April 1, 2008 to March 31, 2009 April 1, 2007 to March 31, 2008
Relationship
1 2 3
Kiran Mazumdar Shaw John Shaw Syngene
Managing Director Director Subsidiary
Clinigene
BBPL
Biocon SA
AxiCorp GmbH
NeoBiocon FZ LLC
Balance as at March 31, 2009 (Payable)/receivable (691) (2,135) 54,525 9,828 (26,630) 290,735 (590) 1,073 (1,660) 317,511 3,891 (13,310) (12,577) 3,583 139,984 1,416,692 45,976 3,960 4,203 2,886 2,314 (11,769) (7,369) 3,090 156,131 14,935 11,996 2,400 1,200 (109,940) (1,336) (3,564) (9,188) 23,987 814 1,200 (8,739) 35,894 (128,850) (308) 11,014 420 (52,370) (121,467) 37,175 414,297 1,416,692 45,976 3,960 (1,763) 4,203 2,886 2,314 (27,844) 50,720 (2,628) (206) 499 90,370 499 (11,592) (7,662) 2,704 (1,085) 104,104 104 19,115 2,400 280 140 1,200 (46,677) 4,096 (1,938) 135,543 9,324 942 1,200 (3,323) 129,950 5,649 46 (51,690) (93,285) 54,649 1,613 (11,867) 39,650 (1,400) (207) -
IATRICa Inc.
10 11 12
Glentec International P K Associates Biocon Research Limited
Salary and perquisites Salary and perquisites Rent income Rent deposit received Power and facility charges recovered Sale of goods ESOP Compensation recovery Management charges received Subsidiary Power charges Rent income Management charges received Fees for research services ESOP Compensation recovery Lab service charges (Health Checkup) Unsecured Loan 51% Joint Venture Interest income on unsecured loan Rent income Rent deposit received Management charges received Personnel Deputation Charges Unsecured Loan Purchase of Intangible assets Rent paid Vialling charges recovered ESOP Compensation recovery Power and Facility charges paid Purchase of materials Power and Facility charges recovered Subsidiary Licensing fees of products Unsecured Loan Expenses recoverable Equity contribution Fellow Subsidiary Purchase of lab consumables Recharge of expenses 50% Joint Venture Sale of goods Recharge of Expenses Equity contribution Associate Company Research and Development fees paid Investment in preferred stock Enterprise owned by key management personnel Lease Rentals Properietary rm of Relative of Director Lease Rentals Subsidiary Equity contribution
Balance as at March 31, 2008 (Payable)/receivable (559) (2,135) (9,669) 299,923 (590) 281,617 (7,666) 1,613 39,650 (1,400) (14) -
(a) The Company has given corporate guarantees of Rs 217,500 (March 31, 2008 - Rs 217,500) to the Customs and Excise department ('CED') on behalf of Syngene and Syngene has furnished a corporate guarantee of Rs 465,000 (March 31, 2008 - Rs 465,000) on behalf of the Company to the CED. (b) Effective January 1, 2004, the Company entered into an agreement with Syngene, Clinigene and BBPL to provide general management support, for which an agreed upon management charge is levied. (c) The Company has given corporate guarantee of Rs 131,352 (March 31, 2008 - Rs 131,352) to the Customs and Excise Department ('CED') on behalf of BBPL and a corporate guarantee of Rs 650,000 (March 31, 2008 - Rs 650,000) to the State Bank of India (SBI) towards term loan granted, to BBPL. (d) The Company has given corporate guarantee of Rs 27,205 (March 31, 2008 - Rs 27,205) to the Customs and Excise Department ('CED') on behalf of Clinigene. (e) The Company has entered into an agreement with Clinigene to provide professional services in the nature of clinical trials for its projects. (f) Effective October 1, 2006, the Company's 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. (g) The Company has taken ofce premises on lease at a monthly rental of Rs 121 from Glentec International effective from October 1, 2007. (h) The Company has transferred certain development and marketing rights to Biocon SA for certain products for the European region at a Consideration of Rs 414,297 (Euro 6,500). Pending receipt of regulatory approvals, the same has been treated as deferred revenues by the Company at March 31, 2009. (i) The Company has entered into an agreement with IATRICa Inc. for research and development of certain products. (j) Prof. Charles L Cooney and Dr. Bala S Manian, non-executive directors of the Company, are Chairman and member of the Scientic Advisory Board of the Company and are paid sitting fees of Rs 454 (March 31, 2008 Rs 420) and Rs 202 (March 31, 2008 Rs 420) respectively.
Biocon Limited
FINANCIAL REPORT
23. Supplementary prot and loss data (i) Payments to auditors (included in professional charges) a) Statutory audit (including limited review of quarterly results) b) Tax audit c) Other matters (certication and other services) d) Reimbursement of out-of-pocket expenses (ii) Managerial remuneration a) Remuneration to Managing Director Salary Perquisites Contribution to provident fund b) Remuneration to whole-time Director Salary Perquisites c) Computation of net prots in accordance with Section 349 of the Companies Act, 1956 (the Act) Net prot for the year before tax (before exceptional items) Less: Exceptional items being mark to market loss in respect of foreign exchange forward contracts
March 31, 2009 1,275 125 275 310 1,985 8,493 2,791 485 11,769 6,412 957 7,369
March 31, 2008 1,450 125 200 269 2,044 8,236 2,897 459 11,592 6,705 957 7,662
2,142,088 (1,017,450) 1,124,638
2,061,975 2,061,975 689,980 19,254 10,899 2,782,108 689,980 689,980 2,092,128 209,213 11,592 7,662
Add: Depreciation provided in the accounts Managerial remuneration Provision for bad and doubtful debts Less: Depreciation under Section 350 of the Act Net Prot for Section 198 of the Act Maximum remuneration payable to whole-time Directors Remuneration paid to Managing Director Remuneration paid to whole-time Director 742,830 742,830 1,159,552 115,955 11,769 7,369 742,830 19,138 15,777 1,902,383
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. (iii) Information pursuant to the provisions of paragraphs 3, 4C and 4D of Part II of Schedule VI of the Companies Act, 1956 (the Act): a) Licensed capacity, installed capacity and actual production : Class of goods Licensed Capacity Kg Biochemicals: Enzymes * Pharmaceutical * * * ** ** 8,590,394 2,132,314 7,234,395 Installed Capacity Kg Actual Production March 31, 2009 Kg March 31, 2008 Kg
* Exempted from the licensing provisions of the Industries (Development and Regulation) Act, 1951 in terms of notication 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.
b) Inventories and sales Description Opening Stock Quantity Kg March 31, 2009 Biochemicals Manufacturing: Pharmaceutical Trading: Bio Pharmaceuticals 25,784,953 (Nos.) 123,960 March 31, 2008 Biochemicals Manufacturing: Enzymes Pharmaceutical Trading: Enzymes Bio Pharmaceuticals 11,906 11,807,323 (Nos.) 92,786 c) Purchase of traded goods: March 31, 2009 Quantity Biopharmaceuticals Units - Kgs. Units - Nos. Enzymes 3,305 76,182,924 Value 320,103 March 31, 2008 Quantity 80,798,549 Nil 19,689 Value 282,598 2,950 29,406 31,595 66,820,919 (Nos.) 8,587,496 11,696 534,332 25,784,953 (Nos.) 123,960 67,705 28,982 124,521 3,055 57,375 2,161,296 7,335,456 482,195 7,559,273 23,460 56,255 67,705 75,610,054 (Nos.) 9,291,494 682,568 26,357,823 (Nos.) 148,839 116,360 23,460 56,255 8,577,159 8,608,926 36,695 32,479 Value Rs Sales Quantity Kg Value Rs Closing Stock Quantity Kg Value Rs
8,746
Note: Closing stock quantities are after a djusting write off items due to obolescence, difference at the time of physical count etc. d) Details of consumption of raw materials, packing materials and stores: March 31, 2009 Quantity (Kg) Bio Chemicals Packing materials 14,967,609 14,967,609 Amount 3,921,916 66,781 3,988,697 March 31, 2008 Quantity (Kg) 32,765,282 32,765,282 Amount 3,672,283 70,259 3,742,542
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, 2009 Value Imported Indigenous 2,566,684 1,422,013 3,988,697 Percent 64 36 100 March 31, 2008 Value 2,445,663 1,296,879 3,742,542 Percent 65 35 100
March 31, 2009 (iv) Value of imports calculated on C.I.F. basis: (on accrual basis) Raw materials Packing materials Maintenance Spares Capital goods 2,622,733 32,513 13,821 239,037 2,908,104 (v) Earnings in foreign currency: (on accrual basis) Export of goods on FOB basis Recovery of freight, insurance etc. on exports Technical licensing fees 4,628,839 89,005 4,717,844 (vi) Dividend to non-resident shareholders: (remitted in foreign currency) Final Dividend Number of shareholders Number of shares held Dividend remitted (Rs in thousands) Year to which it relates (vii) Expenditure in foreign currency: (on accrual basis) Sales commission Interest on Packing credit Travel and Conveyance Professional Charges, Clinical Trials and Patent Fees Consumables Maintenance expenditure Others 79,556 35,241 11,919 82,545 45,315 21,218 73,181 348,975 (viii) Research & Development Expenses (other than on equipments and buildings) Salaries, wages and bonus Employee stock compensation expense Lab consumables Travel and Conveyance Patent and Informatic search fees Amortisation of IP Assets Others 131,625 2,903 112,205 8,192 39,827 16,000 287,310 598,062 16 21,138,617 105,693 2008
March 31, 2008
2,518,296 20,723 26,087 300,946 2,866,052
4,776,275 1,480 448,413 5,226,168
17 21,390,007 64,170 2007
80,325 18,303 10,817 138,156 13,527 8,940 55,374 325,442
118,411 5,622 87,483 12,557 38,909 16,000 192,138 471,121
24. Commitments (a) Capital commitments Estimated amount of contracts remaining to be executed on capital account and not provided for, net of advances . Also refer Note 9 (vii) in respect of Companys committment to invest US$ 1 Million in Iatrica (b) Operating lease commitments Where the Company is a lessee: (i) Rent The Company has entered into various agreements for lease of building/ofce space which expires over a period upto September 2016. Gross rental expenses for the year aggregates to Rs 15,075 (March 31, 2008 - Rs 8,267). The committed lease rental in future are as follows : Not later than one year Later than one year and not later than ve years Later than ve years (ii) Vehicles The Company has taken vehicles for certain employees under operating leases, which expire in March 2013. Gross rental expenses for the year aggregate to Rs 8,984 (March 31, 2008 - Rs 7,517). The committed lease rental in the future are: Not later than one year Later than one year and not later than ve years Where the Company is a Lessor: (i) Rent The Company has leased out certain parts of its building (including touts) and land on an operating lease, which expire over a period upto 2016. Gross rental income for the year aggregate to Rs 25,313 (March 31, 2008 - Rs 14,858). Further, minimum lease receipts under operating lease are as follows: Not later than one year Later than one year and not later than ve years Later than ve years
March 31, 2009
March 31, 2008
106,501
391,260
14,097 21,604 1,981
10,735 21,331 4,273
9,024 13,246
6,697 11,529
24,688 92,474 72,337
24,464 98,365 94,556
25. Contingent liabilities (a) Taxation matters under appeal (b) Corporate guarantees (i) Corporate guarantee 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.
March 31, 2009 141,268
March 31, 2008 44,336
217,500 465,000
217,500 465,000
131,352
131,352
27,205
27,205
650,000
650,000
26. 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, 2009, the Company has forward exchange contracts to sell US$ 54,000 (March 31, 2008 - US$ 58,000) and sell EUR 20,000 (March 31, 2008 - nil) in respect of the forecasted transaction. In addition as at March 31, 2009, the Company has European style option contracts of US$ 24,000 (March 31, 2008 - nil) with periodical maturity dates upto March 2011. The unhedged foreign currency exposure as at the Balance Sheet date is as given below: March 31, 2009 The unhedged foreign currency exposure as at the Balance Sheet date is as given below: Receivables Unsecured Loan to Subsidiary Sundry Creditors Packing Credit 477,240 67,460 492,038 763,050 218,712 354,238 869,507 March 31, 2008
27. Employee Benet Plans

A summary of the gratuity plan is as follows: Fund balance March 31, 2009 Dened benet obligation Fair value of plan assets Plan Liability The change in benet obligation and funded status of the gratuity plan is as follows: Change in benet obligation Benet obligation at the beginning of the year Current Service cost Past Service cost Interest cost Benets paid Actuarial (gain)/loss Benet 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 Benets paid Fair value of plan assets at end of the year Net gratuity cost: Components of net benet 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 The assumptions used for gratuity valuation are as below: Interest rate Discount rate Expected Return on Plan Assets Salary increase Attrition rate upto age 44 Attrition rate above age 44 Retirement age - Years 7.00% 7.00% 8.00% 8.00% 20.00% 15.00% 58 8.20% 8.20% 8.20% 9.00% 17.00% 16.00% 58 7,402 4,580 (3,876) 1,547 9,653 6,646 7,041 4,250 (4,838) (4,273) 2,180 4,838 48,440 3,876 2,770 641 (1,271) 54,456 59,952 4,838 (16,350) 48,440 49,081 7,402 4,580 (1,271) 4,317 64,109 58,413 7,041 4,250 (16,350) (4,273) 49,081 64,109 54,456 9,653 March 31, 2008 49,081 48,440 641
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, 2010, is approximately Rs 10,064. (March 31, 2008 - Rs 641) The nature of allocation of the fund is only in debt based funds of high credit rating.
28. Segmental information Business segments The primary reporting of the Company has been performed on the basis of business segment. For the year ended March 31, 2009 consequent to the transfer of the enzymes business, the Company operated in a single business segment of pharmaceuticals. The Company is managed as one entity and is governed by similar sets of risks and rewards. Accordingly no additional disclosures are required as per Accounting Standard 17 on Segment Reporting for the year ended March 31, 2009. Business Segment for the year April 1, 2007 to March 31, 2008 Particulars Discontinued Operations [Enzymes] 457,016 20,231 477,247 (358,734) 118,513 (7,984) Pharma Unallocated Eliminations Total
Revenues External sales Inter-segment transfers Total revenues Costs Segment costs Inter-segment transfers Result Segment result Corporate expenses Other income Interest income Operating prot Depreciation Interest expense Income taxes - Current and deferred Net prot before Exceptional items Exceptional Income Impairment Losses Income Tax on Exceptional items Prot after taxes Other information Segment assets Unallocated corporate assets Total assets Segment liabilities Unallocated corporate liabilities Total liabilities Capital expenditure 595,401 595,401 3,149,044 1,033,212 3,149,044 1,033,212 4,182,256 12,029,589 5,434,630 12,029,589 5,434,630 17,464,219 (220,000) 3,297,546 (683,892) (681,996) (28,698) (106,384) 3,235,234 (1,095,846) 513,428 9,324 3,353,747 (1,095,846) 513,428 9,324 2,780,653 (689,980) (28,698) (106,384) 1,955,591 3,297,546 (220,000) (683,892) 4,349,245 (5,056,771) (20,231) 20,231 (5,415,505) 8,312,236 8,312,236 (20,231) (20,231) 8,769,252 8,769,252
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 Sales 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, 2009 India Outside India 15,365,799 3,389,731 18,755,530 March 31, 2008 15,787,045 1,677,174 17,464,219 April 1, 2008 to March 31, 2009 4,405,521 4,717,844 9,123,365 April 1, 2007 to March 31, 2008 3,544,564 5,224,688 8,769,252
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 xed assets, investments and current assets. Segment liabilities comprise of loan funds which can be identied directly against the respective segments and includes segment current liabilities and provisions. Assets and liabilities that have not been allocated between segments are shown as part of unallocated corporate assets and liabilities respectively. 29. Discontinuing Operations On July 18, 2007, the Board of Directors of Biocon approved the sale of the Companys Enzymes business along with its assets and liabilities to a third party. On September 3, 2007, the shareholders of the Company approved the sale by way of a postal ballot. Effective October 1, 2007, the Company transferred the net assets of the Enzymes business amounting to Rs 464 million for a consideration of Rs 3,958 million and recorded a gain of Rs 3,297 million net of expenses incidental and attributable to the sale of the business, including provision for contingencies of Rs 50,000. As part of the sale agreement, the Company also entered into an agreement to lease certain xed assets to such third party to carry on manufacturing activities out of such facilities, and to provide certain specied support services, effective October 1, 2007. The net assets of the Enzymes Business as on the date of transfer are as follows. As at October 1, 2007 Fixed assets Current assets Current liabilities Net assets
The net cash ows attributable to the Enzymes business are as follows:
50,417 445,350 104,093 391,674 March 31, 2008
Operating Investing Financing Net inow/(outows) The following are the disclosures pertaining to the operating activities of the discontinued operations:
72,097 3,060,718 (1,427) 3,131,388 March 31, 2008
Revenues Operating costs Prot/(Loss) from operating activities Finance cost Prot/(Loss) before tax Income tax expense Prot/(Loss) after tax 30. Prior years comparatives The previous years gures have been re-grouped, where necessary to conform to current years classication.
477,247 437,025 40,222 1,427 38,795 10,533 28,262
As per our report of even date For S.R. BATLIBOI & ASSOCIATES Chartered Accountants For and on behalf of the Board of Directors of Biocon Limited
per Sunil Bhumralkar Partner Membership No. 35141 Bangalore April 28, 2009
Kiran Mazumdar Shaw Managing Director Murali Krishnan K N President - Group Finance
John Shaw Director Kiran Kumar Company Secretary
Balance Sheet Abstract and Companys General Business Prole

(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 Long term Investments Net Current Assets (d) PERFORMANCE OF THE COMPANY Turnover Total expenditure Prot before tax Prot 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 Item Code No. (ITC Code) Product Description 280000 & 290000 Organic & Inorganic Chemicals 350790 Enzymes for Pharmaceutical use 9,871,103 7,729,015 1,144,638 1,117,997 5.79 60 7,141,691 376,872 3,466,855 4,813,170 1,000,000 12,748,753 1,014,565 624,862 410,408 18,755,530 18,755,530 Nil 500,000 Nil 3417 08 March 31, 2009
Kiran Mazumdar Shaw Managing Director Bangalore April 28, 2009
FINANCIAL REPORT Biocon Limited & Subsidiaries - IGAAP
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 ventures (together referred to as the Group), as at March 31, 2009, and also the consolidated prot and loss account and the consolidated cash ow statement for the year ended on that date annexed thereto. These nancial statements are the responsibility of the Companys management and have been prepared by the management on the basis of separate nancial statements and other nancial information regarding components. Our responsibility is to express an opinion on these nancial 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 nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the nancial statements. An audit also includes assessing the accounting principles used and signicant estimates made by management, as well as evaluating the overall nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We did not audit the nancial statements of a subsidiary, whose nancial statements reect total assets of Rs 2,613 million as at March 31, 2009, total revenue of Rs 34 million and net cash inows amounting to Rs 37 million for the year then ended. We also did not audit the nancial statements of another subsidiary, whose nancial statements reect total assets of Rs 2,493 million as at December 31, 2008, total revenue of Rs 4,696 million and net cash inows amounting to Rs 11 million for the nine months period ended December 31, 2008. The consolidated nancial statements include total assets of Rs 5 million as at March 31, 2009 and total revenue of Rs 4 million and net cash outow of Rs 1 million for the year then ended, being the proportionate share in a joint venture company which are based on nancial statements audited by the other auditors. The nancial statements and other nancial 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 nancial statements have been prepared by the Companys management in accordance with the requirements of Accounting Standards (AS) 21, Consolidated nancial statements, Accounting Standards (AS) 23, Accounting for Investments in Associates in Consolidated Financial Statements and Accounting Standard (AS) 27, Financial Reporting of Interests in Joint Ventures [notied pursuant to the Companies (Accounting Standards) Rules, 2006]. Based on our audit and on consideration of reports of other auditors on separate nancial statements and on the other nancial 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 nancial statements give a true and fair view in conformity with the accounting principles generally accepted in India: in the case of the consolidated balance sheet, of the state of affairs of the Group as at March 31, 2009; in the case of the consolidated prot and loss account, of the prot for the year ended on that date; and in the case of the consolidated cash ow statement, of the cash ows for the year ended on that date.
per Sunil Bhumralkar Partner Membership No: 35141 Bangalore June 19, 2009
BIOCON LIMITED
Consolidated Balance Sheet as at March 31, 2009

(All amounts in Indian Rupees thousands) Notes SOURCES OF FUNDS Shareholders' Funds Share Capital Reserves and Surplus 3 4 1,000,000 14,107,439 15,107,439 500,000 14,341,476 14,841,476 March 31, 2009 March 31, 2008
Minority Interest Loan Funds Secured Loans Unsecured Loans
247,686
(73,218)
6 7
3,957,338 1,281,820 5,239,158
1,350,434 1,200,121 2,550,555
Deferred Tax Liability
466,247 21,060,530
464,984 17,783,797
APPLICATION OF FUNDS Fixed Assets Cost Less: Accumulated Depreciation Net Book Value Capital Work-in-Progress [Including Capital Advances of Rs 94,555 (March 31, 2008 - Rs 252,265)] 1,720,220 12,205,198 1,382,108 10,418,935 9(i) 14,097,863 3,612,885 10,484,978 11,547,886 2,511,059 9,036,827
Intangible Assets Investments Current Assets, Loans and Advances Inventories Sundry Debtors Cash and Bank Balances Loans and Advances
9(ii) 10
1,630,656 3,676,225
276,000 4,747,673
11 12 13 14
3,191,811 3,666,829 118,051 947,202 7,923,893
1,789,783 2,591,254 96,165 869,203 5,346,405
Less: Current Liabilities and Provisions Liabilities Provisions
15 3,569,682 805,760 4,375,442 2,300,282 704,934 3,005,216 2,341,189 17,783,797
Net Current Assets
3,548,451 21,060,530
The accompanying notes form an integral part of the Consolidated Balance Sheet. As per our report of even date For S.R. BATLIBOI & ASSOCIATES Chartered Accountants
per Sunil Bhumralkar Partner Membership No.: 35141 Bangalore June 19, 2009
Kiran Mazumdar-Shaw Managing Director
John Shaw Director
Murali Krishnan K N President - Group Finance Bangalore April 28, 2009
BIOCON LIMITED
Consolidated Prot and Loss Account for the year ended March 31, 2009
(All amounts in Indian Rupees thousands, except share data and per share data) Notes March 31, 2009 March 31, 2008
INCOME Gross sales Less: Excise Duty Net sales Contract research Licensing and development fees Other income EXPENDITURE Manufacturing, contract research and other expenses Interest and nance charges PROFIT BEFORE DEPRECIATION, EXCEPTIONAL ITEMS AND TAXES Depreciation and Amortisation Less: Amount transferred from revaluation reserve PROFIT BEFORE TAXES AND EXCEPTIONAL ITEMS [Includes Rs Nil (March 31, 2008 - Rs 38,795), being prot from discontinued operations] Provision for income-tax Current tax Less: MAT Credit Entitlement Deferred taxes Fringe Benets [Includes Rs Nil (March 31, 2008 - Rs 10,532), being tax on prot from discontinued operations] PROFIT AFTER TAXES, BEFORE EXCEPTIONAL ITEMS [Includes Rs Nil (March 31, 2008 - Rs 28,263), being prot from discontinued operations] Share of losses in Associate Company Minority interest PROFIT AFTER TAXES, AFTER MINORITY INTEREST Exceptional items, net Less: Provision for Tax PROFIT AFTER TAXES Balance brought forward from previous year PROFIT AVAILABLE FOR APPROPRIATION Proposed dividend on equity shares Tax on proposed dividend Transfer to general reserve BALANCE, TRANSFERRED TO BALANCE SHEET Earnings per share (equity shares, par value of Rs 5 each) Basic (in Rs) Diluted (in Rs) Weighted average number of shares used in computing earnings per share Basic Diluted 21 192,944,832 198,359,510 193,192,482 199,186,140 21 4.83 4.69 24.01 23.29 22 5 (7,199) (71,306) 2,403,102 (1,549,211) 77,326 931,217 9,246,379 10,177,596 600,000 101,970 111,799 9,363,827 65,229 2,245,440 3,077,546 (683,892) 4,639,094 5,627,185 10,266,279 500,000 84,975 434,925 9,246,379 2,481,607 2,180,211 8 190,095 (92,201) 1,263 19,227 116,297 (19,154) 16,674 15,066 9 (i), 9 (ii) 4 17 19 12,853,129 176,615 13,029,744 3,702,510 1,102,519 1,102,519 2,599,991 7,551,950 101,801 7,653,751 3,248,298 940,805 1,601 939,204 2,309,094 16 14,119,750 401,265 13,718,485 2,245,502 122,735 645,532 16,732,254 8,600,699 266,657 8,334,042 1,755,486 448,413 364,108 10,902,049
The accompanying Notes form an integral part of the Consolidated Prot and Loss Account. As per our report of even date For S.R. BATLIBOI & ASSOCIATES Chartered Accountants per Sunil Bhumralkar Partner Membership No.: 35141 Bangalore June 19, 2009 For and on behalf of the Board of Directors of Biocon Limited Kiran Mazumdar-Shaw Managing Director Murali Krishnan K N President - Group Finance Bangalore April 28, 2009 John Shaw Director Kiran Kumar Company Secretary
BIOCON LIMITED
Consolidated Statement of Cash Flows for the year ended March 31, 2009
(All amounts in Indian Rupees thousands) March 31, 2009 I. CASH FLOWS FROM OPERATING ACTIVITIES : Net prot including exceptional items, before tax Adjustments for Depreciation and Amortisation Unrealised exchange (gain)/loss Exceptional items, net (a) Provision for contingencies writeback (b) Unrealised mark to market loss on foreign exchange forward contracts (c) Net gain on sale of net assets of discontinued operations (d) Impairment of intellectual property Loss of associate 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 Operating prot 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 : Fixed assets Purchase Income from sale of business, net of taxes Acquisition of Intangible assets Acquisition of subsidiary, net of cash Rs 4,609 Interest received Dividend received Sale of investments Movement in reserves of ESOP Trust Purchase of shares by ESOP Trust Purchase of investments Long term Current Net cash used for investing activities CASH FLOWS FROM FINANCING ACTIVITIES : Long term borrowings from banks, net Short term borrowings from banks, net Repayment of loans Unsecured Loans Interest paid Dividend paid Dividend tax paid Net cash provided by investing 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 + VI) 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 deposit accounts - in unpaid dividend accounts* 1,043,581 1,102,519 (85,965) (20,000) 388,267 7,199 26,834 15,777 7 163,972 (1,425) (236,772) (1,047) (506) 2,402,441 (827,184) (768,358) 81,475 231,994 1,120,368 (169,414) 950,954 March 31, 2008 5,386,640 939,204 (5,097) (3,297,546) 220,000 50,894 10,899 372 103,655 (1,854) (162,165) (952) 4,333 3,248,383 (176,577) 464,753 (206,808) 92,032 3,421,783 (242,678) 3,179,105
II.
(2,815,256) (140,140) (693,414) 1,425 236,772 22,440,035 23,929 (30,860) (51,767) (21,292,579) (2,321,855) 341,437 1,758,376 (70,000) 81,366 (156,941) (500,000) (84,975) 1,369,263 (1,638) 23,524 96,165 118,051 3,062 103,555 7,568 3,866 118,051
(2,325,289) 2,668,447 1,896 162,165 19,588,245 47,166 (89,893) (48,415) (23,405,790) (3,401,468) 27,880 669,269 (80,000) 69,729 (103,655) (300,000) (50,985) 232,238 9,875 86,290 96,165 7,095 49,531 38,129 1,410 96,165
III.
IV. V. VI. VII.
* - 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 Chartered Accountants For and on behalf of the Board of Directors of Biocon Limited
Kiran Mazumdar-Shaw Managing Director Murali Krishnan K N President - Group Finance Bangalore April 28, 2009
Notes to the Consolidated Financial Statements for the year ended March 31, 2009
(All amounts in Indian Rupees and US Dollars 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. Biocon entered into an agreement to set up a Joint Venture Company Biocon Biopharmaceuticals Private Limited (BBPL) with CIMAB SA (CIMAB), a Company organised and existing under the laws of Cuba to manufacture and market products using technology and to carry out research activities. BBPL was incorporated on June 17, 2002. On April 18, 2003, Biocon acquired a 51 per cent shareholding in BBPL. On January 10, 2008, Biocon entered into an agreement to set up a Joint Venture Company with Dr. B.R. Shetty to form a joint venture company NeoBiocon FZ-LLC, incorporated in Dubai (NeoBiocon). The Company has also established Biocon Research Limited, a subsidiary of the Company to undertake research in novel and innovative drug initiatives. Effective April 30, 2008, Biocon acquired 71% equity interest in AxiCorp GmbH, Germany 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 GmbH. Pursuant to the Securities Purchase Agreement with IATRICa Inc, USA, (IATRICa) the Company has invested in Series A Preferred Stock in IATRICa. The Company has signicant inuence over the nancial and operating policies of IATRICa by virtue of its holding of 22% of the voting rights in IATRICa and representation on the board of directors of IATRICa. Biocon and its subsidiaries and joint venture companies (the Group) are engaged in the manufacture of biotechnology products in the pharmaceutical sector through fermentation based technology and are also engaged in the formulation business. The Group is also engaged in providing contract research services to overseas customers in the eld 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 has 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 signicant accounting policies a. (i) Basis of presentation and consolidation The consolidated nancial 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 nancial statements have been prepared to comply in all material respects with accounting standards, as applicable, notied by the Companies Accounting Standards Rules, 2006 to reect the nancial position and the results of operations of Biocon together with its subsidiaries, joint venture companies 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 associates under the equity method as per which the share of prot/(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 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. The consolidated nancial statements of AxiCorp are drawn up to December 31, 2008 for the purpose of consolidation. Accordingly, the consolidated balance sheet as at March 31, 2009 and the nancial results of the Group for the year then ended, include the consolidated balance sheet of AxiCorp as at December 31, 2008 and nancial results for the period April 1, 2008 to December 31, 2008. The nancial statements of other subsidiaries, joint ventures companies and associate company have been drawn upto the same reporting date as that of the Company i.e. March 31, 2009. All material inter-company transactions and balances between the entities included in the consolidated nancial statements have been eliminated. For the purpose of administration of the employee stock option plans of the Group, the Company has established the Biocon India Limited Employee Welfare Trust (ESOP Trust). The ESOP trust is consolidated with the accounts of the Company. (ii) Use of estimates The preparation of consolidated nancial 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 nancial 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.
(iii) Changes in Accounting Policies Exchange Differences on Long Term Foreign Currency Monetary Items Upto March 31, 2008, the Group was charging off exchange differences arising on foreign currency monetary assets and liabilities to the prot and loss account. During the year ended March 31, 2009, pursuant to Companies (Accounting Standards) Amendments Rules, 2009, notied on March 31, 2009, the Group has exercised the option of deferring the charge to the Prot and Loss Account arising on exchange differences, in respect of accounting periods commencing on or after 7th December, 2006, on long-term foreign currency monetary items (i.e. monetary assets or liabilities expressed in foreign currency and having a term of 12 months or more at the date of origination). As a result, such exchange differences so far as they relate to the acquisition of a depreciable capital asset have been adjusted with the cost of such asset and would be depreciated over the balance life of the asset, and in other cases, have been accumulated in Foreign Currency Monetary Item Translation Difference Account and would be amortized over the balance period of such long term asset/ liability but not beyond, accounting period ending on or before 31st March 2011. During the year ended March 31, 2009, the Group has adjusted foreign exchange losses incurred on a long term foreign currency monetary items so far as they relate to acquisition of a depreciable capital asset, to the cost of such asset. Had the Group continued to use the earlier basis of accounting for exchange differences arising on long-term foreign currency monetary items, the charge to the Prot and Loss Account after tax for the current year would have been higher by Rs 35,270, and net block of xed assets and capital work-inprogress would have been lower by the same amount. 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 xed 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 Research and development equipment Furniture and xtures 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 currently charged by the Municipal Authorities. Leasehold improvements are being depreciated over the lease term or useful life whichever is lower. 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 prot and loss account. Assets individually costing less than Rs 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 ows are discounted to their present value at the weighted average cost of capital. 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 periodic basis. Intellectual Property rights, contract rights and product licenses Costs relating to intellectual property rights, contract rights and product licenses which are acquired are capitalized and amortized on a straight-line basis over their estimated useful lives or ten years whichever is lower. Computer Software Software which is not an integral part of the related hardware is classied as an intangible asset and is being amortised over a period of 3 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 benets. Research and development expenditure of a capital nature is added to xed 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 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 nished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a rst-in-rst out basis. Customs duties on imported raw materials (excluding stocks in the bonded warehouse) are 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 nished 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 nished 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 Sale of pharmaceuticals and compounds Revenue is recognised when the signicant 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 nancial statements, sales are reected gross and net of excise duty in the consolidated prot and loss account. Technical license agreements The Group enters into certain dossier sales, licensing and supply agreements and revenue from such agreements are recognised in the period in which the Group completes all its performance obligations. Contract research agreements The Group enters into two basic types of contract research agreements and the revenues there from are recognised on the following basis: i. Time and material management Revenues are recognised as services are rendered, in accordance with contractual agreements. ii. Fixed price arrangements Revenues relating to xed price contracts are recognised based on the percentage of completion method. g. Investments Investments that are readily realisable and intended to be held for not more than twelve months are classied as current investments. All other investments are classied 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 benets Retirement benet in the form of Provident Fund is a dened contribution scheme and the contributions are charged to the Prot and Loss Account of the year when the contributions to the government funds are due. Gratuity liability is a dened benet obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each nancial year. The gratuity benet of the Group is administered by a trust formed for this purpose through the group gratuity scheme. Actuarial gains/losses are immediately taken to prot and loss account and are not deferred. 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 nancial year In case of foreign subsidiary companies, contributions are made as per the respective country laws and regulations. The same is charged to Prot 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 7th December, 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 nancial 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 nancial statements and amortized over the balance period of such long-term asset/ liability but not beyond accounting period ending on or before 31st March, 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 nancial 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 prot and loss in the year in which the exchange rates change. Any prot 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 7th December ,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 31st March, 2011 Translation of Integral and Non-integral foreign operation The nancial 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 nancial statements of a non-integral foreign operation for incorporation in nancial 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 classication of a foreign operation, the translation procedures applicable to the revised classication are applied from the date of the change in the classication. j. Income tax Tax expense comprises current, deferred and fringe benet tax. Current income tax and fringe benet tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act. Deferred income taxes reects 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 are recognised only to the extent that there is reasonable certainty that sufcient 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 prots. 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 sufcient 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 sufcient 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 sufcient 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 specied 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 prot 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 specied 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 prot or loss for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes) 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 are 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 prot 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 classied 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 xed 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 Identication 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 Groups products are sold. Inter-segment Transfers: The Group generally accounts for intersegment 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 includes 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 nancial 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 outow 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 reect 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 indirectly 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 Prot 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 & Cash Equivalents Cash and cash equivalents in the balance sheet 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 prot and loss account. Net gains are ignored.
3. Share capital
March 31, 2009
March 31, 2008
Authorised: 220,000,000 (March 31, 2008 - 120,000,000) equity shares of Rs 5 each (March 31, 2008 - Rs 5 each) Issued, subscribed and paid-up: 200,000,000 (March 31, 2008 - 100,000,000) equity shares of Rs 5 each (March 31, 2008 - Rs 5 each), fully paid (a) Of the above equity shares: (i) 30,800 equity shares of Rs 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 Rs 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 through the issue of 202,780 equity shares of Rs 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 Rs 403.8 per equity share has been credited to securities premium account. (b) Also refer note 20 for shares allotted under Employee Stock Option Plan. (c) On November 11, 2003, the Company issued 86,324,700 equity shares of Rs 5 each as fully paid up bonus shares by capitalisation of the balance in the prot and loss account of Rs 431,624. (d) On September 15, 2008 the Company issued 100,000,000 equity shares of Rs 5 each as fully paid bonus shares by capitalisation of balance in the share premium account of Rs.500,000. 1,000,000 500,000 1,100,000 600,000
4. Reserves and surplus
March 31, 2009 17,094 17,094
March 31, 2008 17,094 17,094 11,089 1,601 9,488 3,288,478 3,288,478 981,630 434,925 1,416,555 98,690 47,166 145,856 324,318 10,368 313,950 96,324 217,626 9,246,379 14,341,476 March 31, 2008 162,415 (10,368) (55,723) 96,324
Capital Reserve Revaluation Reserve Balance Less: Transfer to prot and loss account Foreign Exchange Retranslation Reserve Account Balance Securities Premium Balance Utilised during the year for issuance of Bonus Shares General Reserve Balance Add: Transfer from Prot and Loss Account ESOP trust Balance Add: Dividend, prot on sale of shares and interest income, net Stock compensation adjustment (Also see note 20) Stock options outstanding Additions during the year Deletions during the year Less: Deferred employee stock compensation expense Balance in prot and loss account
9,488 9,488 (14,047) 3,288,478 (500,000) 2,788,478 1,416,555 111,799 1,528,354 145,856 23,929 169,785 313,950 3,836 23,981 293,805 49,345 244,460 9,363,827 14,107,439 March 31, 2009
(ii) Deferred employee stock compensation expense (See Note 20): Stock compensation expense outstanding Stock options granted during the year Stock options cancelled/ forfeited during the year Stock compensation expense amortised during the year* Closing balance of deferred employee stock compensation expense 5. Minority interest Minority interest represents that part of the net prot and net assets of Syngene to the extent of 170 shares (0.01 per cent) and BBPL to the extent of 8,612,000. shares (49 per cent) and 22% of AxiCorp, which are attributable to interests which are not owned, directly or indirectly by Biocon. March 31, 2009 The share of the net assets attributabe to the minority shareholders is as follows: As per last balance sheet Interest of Minority Shareholders of AxiCorp GmbH Prot/(loss) for the year attributable to minority shareholders* (73,218) 249,598 71,306 247,686 (7,989) (65,229) (73,218) March 31, 2008 96,324 3,836 (23,981) (26,834) 49,345
* Including a sum of Rs Nil ( March 31, 2008 - Rs 4,829) being the cost pertaining to employees of the discontinued operations.
* Amount for the year ended March 31, 2009 includes Rs 41,414 pertaining to share of losses of the joint venture partner in BBPL absorbed by Biocon.
6. Secured loans From banks Short Term Cash credit, packing credit, buyers credit etc. Long Term Buyers credit Term loans [Amount payable withing one year - Rs 7,071 (March 31, 2008 - Rs 70,000)]
March 31, 2009
March 31, 2008
3,574,151 383,187 3,957,338
1,252,554 27,880 70,000 1,350,434
(a) Cash credit, packing credit, buyers credit etc. (i) Biocon has working capital facilities with State Bank of India (SBI) .These facilities are repayable on demand, secured by a pari-passu rst charge on current assets. As at March 31, 2009 Biocon has utilised Rs 291 (March 31, 2008 - Rs 443,148) inclusive of foreign currency loans of Rs Nil (US$ Nil ) [(March 31, 2008 - Rs 432,944) (US$ 10,841)]. (ii) Biocon has working capital facilities with Hongkong and Shanghai Banking Corporation (HSBC). These facilities are repayable on demand, secured by pari-passu rst charge on current assets. As at March 31, 2009 Biocon has utilised fund based limits of Rs 784,274 (March 31, 2008 - Rs 242,738), inclusive of foreign currency denominated loans of Rs 763,050 (US$ 15 Million) [March 31, 2008 Rs 239,820 (US$ 6,000)]. (iii) Biocon has working capital facilities with Canara Bank (CB). These facilities are repayable on demand,secured by a pari-passu rst charge on current assets. As at March 31, 2009 Biocon has utilised Rs Nil (March 31, 2008 - Rs 206,748) inclusive of foreign currency denominated loans of Rs Nil (US$ Nil ) [March 31, 2008 - Rs 196,372 (US$ 4,913)]. (iv) Biocon has working capital facility with ABN Amro Bank. These facilities are repayable on demand,secured by a pari-passu rst charge on the current assets of Biocon. As at March 31, 2009 Biocon has utilised Rs 230,000 (March 31, 2008 - Rs Nil). (v) All the above banks have entered into an inter-se agreement for operational convenience for the above working capital limits effecting the modication of the above charge and creation of a pari-passu charge on the current assets of the Company in favour of all the above banks. (vi) Syngene has working capital facilities from State Bank Of India (SBI) for Rs.800 million (March 31, 2008 - Rs 800 million), which is secured by a pari-passu charge on the present and future movable assets and xed assets. As at March 31, 2009, Syngene has utilised Rs.702,481 (US$ 13.75 million) [March 31, 2008 - Rs 119,910 (US$ 3 million)]. (vii) Syngene has obtained foreign currency denominated buyers credit loans (short term and long term) of Rs 755, 707 (US$ 14.85 million) as of March 31, 2009 [March 31, 2008 Rs Nil] and preshipment credit loans of Rs 686,745 (US$ 13.5 million) as of March 31, 2009 [March 31, 2008 Rs 119,910 (US$ 3 million)] with Hongkong and Shanghai Banking Corporation (HSBC), which are secured by a pari-passu charge on the present and future movable assets. (viii) Syngene has obtained foreign currency denominated buyers credit loans (short-term and long term) of Rs.51,437 (US$ 1.01 million) [March 31, 2008 - Rs.27,880 (US$ 0.70 million)] and pre-shipment credit loans of Rs.225,000 [March 31, 2008 -Rs 119,820 (US$ 3 Million)] from ABN Amro Bank, secured by a pari-passu charge on the present and future movable assets and xed assets. Of the above, only the buyers credit loan is denominated in foreign currency. (ix) On September, 7, 2008, Clinigene entered into an agreement with State Bank of India for working capital facility of Rs 100,000. These facilities are repayable on demand and are secured by rst charge on the current assets of Clinigene. Clinigene has utilised Rs 71,314 (March 31, 2008 - Rs Nil) of the said facility. (x) AxiCorp has obtained working capital facilities from its bankers, Apobank and Taunus Sparkasse. These facilities are secured by a pledge of companys inventories and investments. As at December 31, 2008, Axicorp has utilised Rs 450,089 (EUR 6,672). (b) Term Loan (i) On June 22, 2006, the Clinigene entered into an agreement with Citibank N.A. for a long term rupee loan facility of Rs 150,000. The loan was secured by an equitable mortgage on the immovable property. The loan has been repaid as at March 31, 2009 (March 31, 2008 - Rs 70,000). 7. Unsecured loans Deferred payment liability Term Loan from State Bank of India Loan from Neo pharma Financial assistance from DSIR NMITLI - CSIR Loan March 31, 2009 611,550 650,000 6,958 10,000 3,312 1,281,820 March 31, 2008 543,039 650,000 3,902 3,180 1,200,121
(i) Under the Industrial Policy of the Government of Karnataka, Biocon 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 Rs 24,375. As at March 31, 2009, Biocon has utilised Rs 354 (March 31, 2008 - Rs 354). (ii) Under the Agro Food Processing Industrial Policy of the Government of Karnataka, Biocon 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 Rs 648,938. As at March 31, 2009, Biocon has utilised Rs 611,196 (March 31, 2008 - Rs 542,685 ).
(iii) On March 31, 2005, Biocon entered into an agreement with the Council of Scientic and Industrial Research (CSIR), for an unsecured loan of Rs 3,312 for carrying out part of the research and development project under the New Millenium Indian Technology Leadership Initiative (NMITLI) Scheme. The loan is repayable over 10 annual equal installments starting from April 2009 and carry an interest rate of 3 percent per annum. The amount due for repayment within one year is Rs.331. (iv) During the year ended March 31, 2009, the Department of Scientic and Industrial Research (DSIR) has sanctioned nancial assistance for a sum of Rs 17,000 to Biocon for part nancing one of its research projects. Of the said sanctioned amount, Biocon has received the rst installment of Rs 10,000 during the year. The research project is ongoing and is expected to be completed in June 2009. The assistance is repayable in the form of royalty payments post commercialisation of the project in ve annual installments. (v) BBPL has borrowed Rs 650,000 from State Bank of India, against Corporate Guarantee given by Biocon. The loan currently carries an interest rate of 10.25% and is repayable in October 2009.
8. Deferred tax liability
Deferred tax (asset)/ liability as at April 1, 2008 502,061 (20,166) (13,603) (3,308) 464,984 448,310
Current year charge/(credit) 14,482 (7,856) (5,363) 1,263 16,674
Deferred tax (asset)/liability as at March 31, 2009 516,543 (28,022) (18,966) (3,308) 466,247 464,984
Depreciation Employee retirement benets Provision for doubtful debts Others Year ended March 31, 2008
The Group has export oriented units and 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 repect of timing differences which originate in the reporting period but is expected to reverse after the tax holiday period.
9. (i) Fixed assets Cost/Valuation Land Freehold (revalued) Freehold (others) Leasehold Buildings (revalued) Buildings (others) Leasehold improvements Plant and machinery Research and development equipment Furniture and xtures Vehicles Year ended March 31, 2008 Accumulated depreciation Buildings (revalued) Buildings (others) Leasehold improvements Plant and machinery Research and development equipment Furniture and xtures Vehicles Year ended March 31, 2008 Net book value Land Freehold (revalued) Freehold (others) Leasehold Buildings (revalued) Buildings (others) Leasehold improvements Plant and machinery Research and development equipment Furniture and xtures Vehicles Year ended March 31, 2008
Balance at the
Acquisitions
Deletions
Balance at the
beginning of the year during the year
during the year end of the year
8,967 94,331 226,420 16,561 2,452,062 3,191 7,805,994 760,916 158,601 20,843 11,547,886 10,149,058 16,561 248,934 477 1,933,025 239,677 64,967 7,418 2,511,059 1,712,101
76,859 6,339 83,198 28,969 3,463 32,432 -
458,989 1,837,385 139,604 35,579 401 2,471,968 1,586,747 104,043 319 841,867 90,975 29,437 2,853 1,069,494 924,805
68 4,494 627 5,189 187,919 5 95 100 125,847
8,967 94,331 226,420 16,561 2,910,993 3,191 9,715,744 900,520 200,519 20,617 14,097,863 11,547,886 16,561 352,972 796 2,803,861 330,652 97,867 10,176 3,612,885 2,511,059
8,967 94,331 226,420 2,203,128 2,714 5,872,969 521,239 93,634 13,425 9,036,827 8,436,957
8,967 94,331 226,420 2,558,021 2,395 6,911,883 569,868 102,652 10,441 10,484,978 9,036,827
Notes: (a) Certain freehold land and buildings were revalued on November 1, 1994, based on the estimated replacement cost after considering depreciation upto that date, as per valuers reports and the resultant surplus of Rs 34,529 was credited to revaluation reserve. Of this reserve, Rs 25,040 (March 31, 2008 - Rs 25,040) has been transferred to the prot 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 Biocon for Rs 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, Biocon acquired an additional 41.25 acres of land for Rs 99,417 from KIADB. During the quarter ended June 30, 2005, Biocon further paid an advance of Rs 56,320 towards allotment of additional 19.68 acres of land, offered by KIADB on December 20, 2003. Biocon received the possession certicate 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, Biocon has been allotted land measuring approximately 50 acres at the Jawaharlal Nehru Pharma City Vishakapatnam, Andhra Pradesh, on a long term lease basis for a consideration of Rs 260,100. As at March 31, 2009 , Biocon has paid the entire consideration towards the lease and is in the process of completing the formalities for registering the said lease in its favour. (d) Effective April 1, 2008, foreign exchange loss of Rs 35,270 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 asset. Also refer note 2 (a) (iii).
(e) Additions to Fixed Assets and Capital Work in Progress during the year ended March 31, 2009 include Rs 43,177 (March 31, 2008 Rs.Nil) being interest and Rs 73,201 (March 31, 2008 Rs 1,963) being foreign exchange loss, incurred on foreign currency denominated loans capitalized under AS 16 - Borrowing costs. (f) Syngene has entered into an agreement with a customer, which grants the latter an option to purchase xed assets with gross block of Rs 1,314,320 as at March 31, 2009 relating to a particular project, upon satisfaction of certain terms and conditions. (g) Consequent to the acquisition of majority equity holding in AxiCorp GmbH by Biocon SA, additions to the gross block and accumulated depreciation relating to AxiCorp have been included in adjustments. 9. (ii) Intangible assets Balance at the Acquisitions Additions beginning of the year during the year during the year Cost/Acquisition Intellectual Properties from Nobex - Under development - Under commercialisation Development costs for products (Insulin) Computer software Product licences Manufacturing Rights for hR3 Goodwill Year ended March 31, 2008 Accumulated Amortisation Intellectual Properties from Nobex - Under commercialisation Computer software Product licences Year ended March 31, 2008 Net Value Intellectual Properties from Nobex - Under development and commercialisation - Under commercialisation Development costs for products (Insulin) Computer software Product licences Manufacturing Rights for hR3 Goodwill Year ended March 31, 2008 Deletions/ Balance at the Adjustments end of the year during the year
220,000 81,138 301,138 521,138
17,126 127,672 144,798 -
44,213 4,409 31,451 63,760 1,132,128 1,275,961 -
2,733 2,733 220,000
220,000 81,138 44,213 21,535 156,390 63,760 1,132,128 1,719,164 301,138
25,138 25,138 9,138
3,561 26,921 30,482 -
16,000 2,964 14,061 33,025 16,000
137 137 -
41,138 6,525 40,845 88,508 25,138
220,000 56,000 276,000 512,000
220,000 40,000 44,213 15,010 115,545 63,760 1,132,128 1,630,656 276,000
(i) Biocon acquired patents relating to certain technologies for oral insulin, oral BNP and Apaza (collectively IPs) for a total cost of Rs 521,138. In the Board meeting of October 18, 2006 , Biocon decided to licence out its IP (Apaza) and certain other IPs for further development and commercialisation, and amortised Apaza over a period of 5 years effective October 2006. In December 2007, as a matter of prudence, the Company recorded a total impairment of Rs 220,000, in respect of one of its intellectual property (Oral BNP) acquired by the Company during the year ended March 31, 2006 for drug development. The Company determined to expense the intangible assets in view of adverse reports and decline in sales trend of Natrear / Neseritide, a competing drug. (ii) The Oral Insulin product is in the development stage, and hence no amortisation has been recorded by the Company. (iii) BBPL has entered into an agreement with M/s CIMAB, a joint venture partner for certain manufacturing rights relating to use of plant capacity for a total consideration of Rs 63,760 ( US$ 1,500), post approval by the regulatory authority for sale of the products by the JV partner. Pending receipt of regulatory approvals from authorities of such territories, no amortisation has been recorded by the Company. (iv) Consequent to the acquisition of majority equity holding in AxiCorp GmbH by Biocon SA, additions to intangible assets include gross additions and accumulated amortisation of intangibles held by AxiCorp as on the acquisition date. (v) Development costs for products (Insulin) relate to the costs of the clinical development of the Groups Insulin product in the European markets. (vi) 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 (Rs 1,995 million). The consideration was settled by cash of Euro 15.58 million (Rs 1,051 million) and by way of transfer of intellectual property rights of certain products to AxiCorp for Euro 14 million (Rs 944 million). Accordingly, the Group recorded a goodwill of Euro 17.44 million (Rs 1,177 million), 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 (Rs 51 million), resulting in a capital reserve of Euro 659,000 (Rs 44 million) as on date of acquisition. Accordingly, a net goodwill of Euro 16.78 million (Rs 1,132million) has been recorded on the aforesaid acquisition.
10. Investment (At cost) Long term investments A) Non trade: National Savings Certicates B) Trade investments: Unquoted and fully paid up 2,722,014 (March 31, 2008 - 2,722,014) Series B1 Preferred Convertible Stock at US$ 1.55 each, fully paid, par value US $0.001 each of Vaccinex Inc., USA 2,857,142 (March 31, 2008 - 1,428,571) Series A Preferred Stock at US$ 0.70 each, fully paid, par value US $ 0.01 each of IATRICa Inc., USA C) Other Shares of the Company held by ESOP Trust (Quoted) Other investments by AxiCorp
March 31, 2009
March 31, 2008
13 13
13 13
185,795 83,171 121,438 563 390,967
185,795 39,650 90,578 316,023
(i) Biocon has entered into a Securities Purchase Agreement with Vaccinex Inc., USA (Vaccinex) on November 3, 2004 to invest an amount of US$ 4 million (US$ 1 million in Series B1 Convertible Preferred Stock and US$ 3 million in Series B Convertible Promissory Notes). Further, the Company has entered into a Research and Collaboration Agreement to discover, develop, and commercialize human therapeutic monoclonal antibodies. Vaccinex is engaged in research and development activities and has been incurring losses. As Vaccinex is a development stage enterprise and of strategic importance, management believes that there is no dimunition in the value of this investment. (ii) Biocon has entered into a Secutities Purchase Agreement with IATRICa Inc, USA (IATRICa) on January 18, 2008 to invest an amount of US$ 3 Million in Series A Preferred Stock . Further, Biocon has entered into a Development and License Agreement to research,develop and commercialize novel immuno conjugates for treatment of cancer and infectious disorders. Biocon has 22% voting rights in IATRICa as at March 31, 2009 The above is net of the Groups share of losses in IATRICa amounting to Rs 7,199 for the year ended March 31, 2009 (March 31, 2008 Nil) (iii) As on March 31, 2009, the ESOP Trust held 7,055,168 shares (March 31, 2008 - 3,403,759) of the Company towards grant / exercise of shares to/ by employees of the Group under the ESOP Scheme. Also refer Note 20.
Other Investments Current and unquoted (at lower of cost and fair market value) 29,108,926 units (March 31, 2008 - Nil) of Rs 10 Each in Birla Sun Life Liquid Plus [Market Value Rs 291,287 (March 31, 2008 - Rs Nil)] 7,231,070 units (March 31, 2008 - Nil) of Rs.10 each in Birla Sun Life Short Term Fund [Market Value Rs 72,350 (March 31, 2008 - Rs Nil)] 27,811,567 units (March 31, 2008 - Nil) of Rs.10 each in Fortis Money Plus Fund Institutional Plan [Market Value Rs 278,202 (March 31, 2008 - Rs Nil)] 84,935,060 units (March 31, 2008 - Nil) of Rs.10 each in HDFC Cash Management Fund [Market Value Rs 852,026 (March 31, 2008 - Rs Nil)] 76,626,096 units (March 31, 2008 - Nil) of Rs 10 each in ICICI Prudential Flexible Income Plan [Market Value Rs 810,206 (March 31, 2008 - Rs Nil)] 4,332,133 units (March 31, 2008 - Nil) of Rs.10 each in Kotak Flexi Debt Fund [Market Value Rs 43,527 (March 31, 2008 - Rs Nil)] 826,143 units (March 31, 2008 - Nil) of Rs.1001 Each in Reliance Liquid Plus Fund [Market Value Rs 827,085 (March 31, 2008 - Rs Nil)] 7,762,070 units (March 31, 2008 - Nil) of Rs.10 each in Tata Floater Fund [Market Value Rs 77,897 (March 31, 2008 - Rs Nil)] [Market Value Rs 170,929 (March 31, 2008 - Rs Nil)] 19,81,816 units (March 31, 2008 - Nil) of Rs 10 each in HSBC Cash Fund [Market Value Rs 20,690 (March 31, 2008 - Rs Nil)] 11,96,345 units (March 31, 2008 - Nil) of Rs 10 each in HSBC Ultra Short Term Bond Fund [Market Value Rs 11,981 (March 31, 2008 - Rs Nil)] Nil units (March 31, 2008 - 5,097,457) of Rs 10 each in ABN AMRO Liquid Fund [Market Value Rs Nil (March 31, 2008 - Rs 50,976)] Nil units (March 31, 2008 - 9,550,985) of Rs 10 each in Tata Mutual Fund - FMP [Market Value Rs Nil (March 31, 2008 - Rs 100,315)] Nil units (March 31, 2008 - 1,025,462) of Rs 10 each in HSBC Liquid Plus Fund [Market Value Rs Nil (March 31, 2008 - Rs 100,381)] Nil units (March 31, 2008 - 54,877,590) of Rs 10 each in Templeton Floating Rate Fund [Market Value Rs Nil (March 31, 2008 - Rs 549,357)] 549,357 100,381 100,315 50,976 11,981 20,690 77,897 827,079 43,527 810,206 852,026 278,202 72,350 291,287 -
March 31, 2009
March 31, 2008

Other Investments Nil units (March 31, 2008 - 2,029,909) of Rs 10 each in HSBC Flexi Debt Fund [Market Value Rs Nil (March 31, 2008 - Rs 20,299)] Nil units (March 31, 2008 - 56,042) of Rs 10 each in ICICI Prudential Liquid Plan [Market Value Rs Nil (March 31, 2008 - Rs 560)] Nil units (March 31, 2008 - 41,846,818) of Rs 10 each in ING Liquid Plus Fund [Market Value Rs Nil (March 31, 2008 - Rs 418,606)] Nil units (March 31, 2008 - 47,443,051) of Rs 10 each in Lotus India Liquid Plus [Market Value Rs Nil (March 31, 2008 - Rs 475,175)] Nil units (March 31, 2008 - 194,118) of Rs 10 each in Reliance Liquid Plus Fund [Market Value Rs Nil (March 31, 2008 - Rs 194,338)] Nil units (March 31, 2008 - 4033,100) of Rs 10 each in UTI Mutual Fund - FMP [Market Value Rs Nil (March 31, 2008 - Rs 40,363)] Nil units (March 31, 2008 - 50,301) of Rs 1,000 each in UTI Liquid Plus Fund [Market Value Rs Nil (March 31, 2008 - Rs 50,312)] Nil units (March 31, 2008 - 13,122,113) of Rs 10 each in Sundaram BNP Liquid Plus [Market Value Rs Nil (March 31, 2008 - Rs 131,549)] Nil units (March 31, 2008 - 2,854,677) of Rs 10 each in ICICI Flexible [Market Value Rs Nil (March 31, 2008 - Rs 30,184)] Nil units (March 31, 2008 - 48,920,390l) of Rs 10 each in JM Money Manager Fund [Market Value Rs Nil (March 31, 2008 - Rs 489,404)] Nil units (March 31, 2008 - 50,238) of Rs 1,000 each in Mirae Asset Liquid Plus [Market Value Rs Nil (March 31, 2008 - Rs 50,308)] Nil units (March 31, 2008 - 4,040,196) of Rs 10 each in Kotak Flexi Debt Scheme [Market Value Rs Nil (March 31, 2008 - Rs 40,528)] Nil units (March 31, 2008 - 10,000,000) of Rs 10 each in ING Mutual Fund - FMP [Market Value Rs Nil (March 31, 2007 - Rs 100,484)] Nil units (March 31, 2008 - 56,015) of Rs 10 each in Reliance Liquidity Fund [Market Value Rs Nil (March 31, 2008 - Rs 560)] Nil units (March 31, 2008 - 30,116,289) of Rs 10 each in Tata Mutual Fund - FMP [Market Value Rs Nil (March 31, 2007 - Rs 301,475)] Nil units (March 31, 2008 - 61,893) of Rs 1,000 each in DSP Liquid Plus Fund [Market Value Rs Nil (March 31, 2008 - Rs 61,930)] Nil units (March 31, 2008 - 20,395,756) of Rs 11 Each inBirla Dynamic Bond Fund [Market Value Rs Nil (March 31, 2008 - Rs 214,904)] Nil units (March 31, 2008 - 35,000,000) of Rs 10 each in UTI Mutual Fund - FMP [Market Value Rs Nil (March 31, 2008 - Rs 350,532)] Nil units (March 31, 2008 - 26,915,214) of Rs 10 each in DWS Credit Opportunities Fund [Market Value Rs Nil (March 31, 2007 - Rs 270,627)] Nil units (March 31, 2008 - 29,000,000) of Rs 10 each in Lotus Mutual Fund - FMP [Market Value Rs Nil (March 31, 2008 - Rs 290,487)] Nil units (March 31, 2008 - 10,000,000) of Rs 10 each in Lotus Mutual Fund - FMP [Market Value Rs Nil (March 31, 2008 - Rs 101,097)] 3,285,245 3,676,225 (a) Other Investments include investments in units of mutual funds made by the ESOP Trust of Rs 32,671 (March 31, 2008 - Rs Nil) 4,431,637 4,747,673 100,000 290,000 270,010 350,000 214,674 61,917 301,475 560 100,484 40,528 50,238 489,404 30,184 131,533 50,312 40,331 194,337 475,156 418,606 560
March 31, 2009

-
March 31, 2008

20,299
11. 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 Rs 101,388 and Rs 55,794 respectively 12. Sundry debtors (Unsecured) Debts Considered good Considered doubtful Less: Provision for doubtful debts Other debts include unbilled revenues of Rs 35,394 (March 31, 2008 - Rs 10,963) with respect to services rendered to customers. 13. Cash and bank balances Cash on hand Balances with banks: In current accounts In exchange earners foreign currency account In deposit accounts
March 31, 2009 1,302,990 73,220 68,266 1,126,704 620,631 3,191,811
March 31, 2008 677,071 137,438 20,711 828,678 125,885 1,789,783
3,666,829 56,231 3,723,060 56,231 3,666,829
2,591,254 40,454 2,631,708 40,454 2,591,254
3,062 98,722 8,699 7,568 118,051
7,095 50,941 38,129 96,165
(a) Balances with banks include balance in unclaimed dividend account of Rs 3,866 (March 31, 2008 - Rs 1,410). (b) Balances with banks include the balances of the ESOP Trust of Rs 6,968 (March 31, 2008 - Rs 43,861). 14. Loans and advances (Unsecured and considered good, except as stated) Advances recoverable in cash or in kind or for value to be received Duty drawback receivable, net of provision of Rs 238 (March 31, 2008 - Rs 1,984) Other Receivables Deposits Balances with Customs, Excise and Sales tax Authorities MAT Credit entitlement Advance income-tax, net of provision March 31, 2009 199,000 6,208 75,288 346,866 111,355 208,485 947,202 March 31, 2008 174,514 14,371 36,255 75,129 351,009 19,154 198,771 869,203
(a) Advances recoverable in cash or in kind or for value to be received include amounts due from employees to the ESOP Trust of Rs 6,226 (March 31, 2008 - Rs 6,428). (b) Included under advance tax is Rs 13,998 (March 31, 2008 - Rs 13,998) and provision for taxation of Rs 9,520 (March 31, 2008 Rs 9,031) of the ESOP Trust.
15. Current liabilities and provisions 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 Other liabilities Provisions Proposed dividend Tax on proposed dividend Contingencies Leave encashment Gratuity Superannuation Provision for fringe benet tax, net of advance tax
March 31, 2009
March 31, 2008
539,995 1,543,147 124,718 231,760 100,483 7,370 3,866 1,018,343 3,569,682 600,000 101,970 86,279 14,866 2,645 805,760 4,375,442
554,954 1,168,880 203,420 54,679 338 1,410 316,601 2,300,282 500,000 84,975 50,000 63,721 2,938 2,645 655 704,934 3,005,216
(a) Other liabilities include Rs 691 (March 31, 2008 - Rs 559) due to Dr. Kiran Mazumdar-Shaw, Managing Director and the maximum amount outstanding at any time during the year was Rs 1,162 (March 31, 2008 - Rs 3,556). 16. Other income Interest income Dividend income, on Current investment, trade Gain on investments sold Gain on xed assets sold Miscellaneous income* * Includes sale of raw materials of Rs 101,237, (March 31, 2008 - Rs Nil) March 31, 2009 1,425 236,772 1,047 506 404,782 645,532 March 31, 2008 162,165 979 200,964 364,108
17. Manufacturing, contract research and other expenses Raw materials consumed, net of duty drawback of Rs 7,465 (March 31, 2008 - Rs 14,810) Purchase of goods for resale Employee costs Salaries, wages and bonus Groups contribution to provident and other fund Gratuity and leave encashment (net of reversals) Employee stock compensation expense Directors sitting fees 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 Rs 4,354 (March 31,2008 - Rs 10,257) Lab consumables Repairs and maintenance Plant and machinery Buildings Others Selling expenses Freight outwards and clearing charges Sales promotion expenses Commission and brokerage Excise duty on closing stock, net Bad debts written off Provision for bad and doubtful debts Exchange uctuation (net) Loss/(gain) on forward/option contracts, net Printing and stationery Loss on sale of assets (net) Research & development expenses Miscellaneous expenses (Increase)/decrease in inventories of nished goods and work in progress Opening inventories: Finished goods Work-in-progress Add: Stocks acquired on acquisition of AxiCorp Closing inventories: Finished goods Work-in-progress
March 31, 2009 8,722,830 208,588 1,502,799 56,600 39,201 26,834 780 161,722 11,304 36,799 65,193 178,363 144,469 693,320 42,676 15,428 110,442 127,311 23,006 95,103 110,351 263,286 100,342 (252) 7 15,777 112,318 23,659 253,879 257,982 13,400,117
March 31, 2008 4,273,451 225,688 942,171 48,074 (405) 50,894 690 85,357 11,882 8,624 45,354 145,380 123,261 765,631 27,043 (2,080) 87,483 147,047 22,676 63,521 70,757 140,375 114,184 (4,212) 372 10,899 (9,366) (13,255) 17,508 4,332 144,492 152,835 7,700,663
123,868 828,678 246,039 1,198,585 (618,869) (1,126,704) (1,745,573) (546,988) 12,853,129
86,557 717,276 803,833 (123,868) (828,678) (952,546) (148,713) 7,551,950
18. Research and development expenses Research and development expenses aggregate to Rs 743,717 (March 31, 2008 - Rs 646,459) and include Rs 139,604 (March 31, 2008 - Rs 170,335) on research and development equipment and Rs 6,051 (March 31, 2008 - Rs 5,003) on buildings and the remaining expenses incurred by the Company have been disclosed under the appropriate account heads. 19. Interest and nance charges Interest paid on : Packing credit, cash credit from banks [net of amounts capitalised to xed assets Rs 43,177 (March 31, 2008 - Rs 1,025)] Bank charges 20. 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 specically for this purpose, called the Biocon India Limited 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 inows 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 On September 27 , 2001 , the Company granted 71,510 options under the ESOP Plan 2000 to be exercised at a grant price of Rs 10 (before adjusting bonus and share split) . The options vested with the employees equally over a four year period. Grant II Effective January 1, 2004, the Company granted 142,100 options (shares of Rs 5 each ) under ESOP Plan 2000 to be exercised at a price of Rs 5 per share. The options vest with the employees equally over a four year period. Details of Grant II Particulars March 31, 2009 March 31, 2008 No. of Shares Weighted Average No. of Options Weighted Average Exercise Price (Rs) Exercise Price (Rs) 10,780 5.0 27,440 5.0 5.0 490 5.0 4,900 NA 7,840 4.4 16,170 5.0 7,840 2.5* 10,780 5.0 7,840 2.5* 10,780 5.0 1 2 12,643 176,615 11,437 101,801 163,972 90,364 March 31, 2009 March 31, 2008
Outstanding at the beginning of the year Granted during the year Forfeited during the year Adjustment for issuance of Bonus Shares 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
On January 18, 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 under the ESOP Plan 2004 to be exericsed at a grant price of Rs 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 March 31, 2009 March 31, 2008 No. of Options Weighted Average No. of Options Weighted Average Exercise Price (Rs) Exercise Price (Rs) Outstanding at the beginning of the year 58,750 315.0 76,000 315.0 Granted during the year Forfeited during the year 17,250 315.0 Adjustment for issuance of Bonus Shares during the year 57,350 NA 3,150 227.5 Exercised during the year Expired during the year Outstanding at the end of the year 112,950 157.5* 58,750 315.0 112,950 157.5* 58,750 315.0 Exercisable at the end of the year Weighted average remaining contractual life (in years) 2 3 * adjusted for the effect of bonus shares Particulars
Grant IV On July 19, 2006, the Company approved the grant of 3,478,200 stock options 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 rst, second, third year from July 18, 2006 , 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% on the market price of companys shares on the date of grant. Details of Grant Particulars March 31, 2009 March 31, 2008 Weighted Avg Exercise Price (Rs) 278 395 275 275 289 275 -
No. of Options Weighted Average No. of Options Exercise Price (Rs) Outstanding at the beginning of the year Granted during the year Forfeited during the year Adjustment for issuance of Bonus Shares 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 during the year (Rs) * adjusted for the effect of bonus shares 2,927,299 34,855 298,170 2,657,284 27,380 5,293,888 1,997,298 2.9 110.0 289.0 463.0 306.0 171.0* 147.0* 137.5* 3,251,640 311,821 484,262 NA 151,900 2,927,299 201,025 3.9 161.2
The average market price of the Companys share during the year ended March 31, 2009 was Rs 163.42 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: March 31, 2009 Weighted Average Remaining Contractual Life in options (Yrs) Weighted Average Exercise Price Expected volatility Historical volatility Life of the options granted (vesting and exercise period) in years Expected dividends 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 prot and earnings per share under the fair value approach is as given below : Particulars Prot as reported Add: Employee stock compensation under intrinsic value Less: Employee stock compensation under fair value Proforma prot Earnings per Shares - Basic - As reported - Proforma Earnings per Shares - Diluted - As reported - Proforma March 31, 2009 931,217 26,834 65,021 893,030 4.83 4.63 4.69 4.50 March 31, 2008 4,639,094 50,894 104,085 4,585,903 24.01 23.74 23.29 23.02 2.9 147* 37.62% 34.29% 6.20 2.45 7.80% 0.57% March 31, 2008 3.9 289 37.62% 34.29% 6.20 2.45 7.80% 0.57%
A summary of movement in respect of the shares held by the Trust is as follows: Particulars Opening balance of equity shares not granted to employees and available with the Trust Add: Shares purchased by the trust Less: Shares alloted to the employees Add: Bonus shares allotted (1:1) Closing balance of shares not granted to employees and available with the Trust Options granted and eligible for exercise at end of year Options granted but not eligible for exercise at end of year 21. Reconciliation of basic and diluted shares used in computing EPS 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, 2009 3,403,759 300,000 (38,370) 3,389,779 7,055,168 2,118,088 3,296,590 March 31, 2009 200,000,000 7,055,168 192,944,832 5,414,678 198,359,510 March 31, 2008 3,355,080 216,749 (168,070) 3,403,759 270,555 2,726,274 March 31, 2008 200,000,000 6,807,518 193,192,482 5,993,658 199,186,140
Note: The data on number of shares for year ended March 31, 2008 have been adjusted for the bonus shares issued by the Company on September 15, 2008 in the ratio 1:1. 22. Exceptional items, net Exceptional items [income/(expense)], net, for the year ended March 31, 2009 comprise of the following: Gross i. Mark to market losses in respect of foreign exchange forward contracts ii. Writeback of unutilised provision for contingencies created in the prior year related to the transfer of enzymes business. Total Exceptional items, net, for the year ended March 31, 2008 comprise of the following: Gross i. Net gain on sale of net assets of discontinued operations ii. Impairment of intellectual property Total 3,297,546 (220,000) 3,077,546 Tax effect (758,670) 74,778 (683,892) Net 2,538,876 (145,222) 2,393,654 20,000 (1,549,211) 77,326 20,000 (1,471,885) (1,569,211) Tax effect 77,326 Net (1,491,885)
i. During the year ended March 31, 2009, the Group had entered into foreign exchange forward contracts to hedge highly probable forecasted transactions. The Group recorded mark to market losses in respect of foreign exchange forward contracts including realised gains / losses on termination / cancellation of such contracts. ii. During the year ended March 31, 2009, Biocon recorded a writeback of unutilised provision for contingencies relating to transfers of its enzyme business of Rs 20,000, created in previous year. iii. Effective October 1, 2007, Biocon transferred the net assets of its Enzymes business amounting to Rs 464,122 to a third party for a consideration of Rs 3,957,566 and recorded a gain of Rs 3,297,546, net of expenses (including provision for contingencies Rs 50,000) incidental and attributable to the sale of the business. iv. In December 2007, as a matter of prudence, Biocon recorded a total impairment of Rs 220,000, in respect of one of its intellectual property (Oral BNP) acquired during the year ended March 31, 2006 for drug development. Biocon determined to expense the intangible assets in view of adverse reports and decline in sales of Natrear / Nasertide, a competing drug.
23. Related party transactions

Sl. Name of the related Relationship Description April 1, 2008 to March 31, 2009 Balance as at April 1, 2007 to March 31, 2009 (Payable)/ receivable 1. 2. 3. Kiran Mazumdar-Shaw John Shaw CIMAB Managing Director Director Joint Venture Partner Salary and perquisites Salary and perquisites Purchase of raw materials Sales of products Purchase of Intangible Rights 4. 5. 6. Glentec International P K Associates NeoBiocon FZ LLC Enterprise owned by Key Management Personnel Properietary rm of Relative of Director Joint Venture Sale of Goods Recharge of expenses Equity contribution 7. IATRICa Inc. Associate Company Research and Development fees paid Investment in preferred stock 50,720 90,370 39,650 39,650 2,886 2,314 (27,844) 2,886 2,314 1,613 (11,867) 1,613 Lease Rentals (206) (207) (14) Lease of Premises (2,628) (1,400) (1,400) (11,769) (7,369) (25,483) 2,056 (63,760) (691) (13,900) 6,361 (11,592) (7,662) (31,148) 14,957 March 31, 2008 Balance as at March 31, 2008 (Payable)/ receivable (559) (31,148) 14,957 No. party
(a) The Company has taken ofce premises on lease at a monthly rental of Rs 121 from Glentec International effective from October 1, 2007. (b) The Company has entered into an agreement with IATRICa Inc. for research and development of certain products. (c) Prof. Charles L Cooney and Dr. Bala S Manian, non-executive directors of the Company, are Chairman and member of the Scientic Advisory Board of the Company and are paid sitting fees of Rs 454 (March 31, 2008 - Rs 420) and Rs 202 (March 31, 2008 - Rs 420) respectively. 24. Commitments (a) Capital commitments Estimated amount of contracts remaining to be executed on capital account and not provided for, net of advances Also refer Note 10(ii) in respect of Biocons committment to invest US$ 1 Million in Iatrica (b) Operating lease commitments Where the Group is a lessee (i) Rent: The Group has entered into various agreements for lease of building/ofce space which expires over a period upto September 2016. Gross rental expenses for the year aggregate to Rs 19,168 (March 31, 2008 - Rs 8,667). The committed lease rentals in the future are: March 31, 2009 Not later than one year Later than one year and not later than ve years Later than ve years (ii) Vehicles: The Group has taken vehicles for certain employees under operating leases, which expire in March 2013. Gross rental expenses for the year aggregate to Rs 14,365 (March 31, 2008 - Rs10,694). The committed lease rental in the future are: March 31, 2009 Not later than one year Later than one year and not later than ve years Where the Group is a Lessor: (i) Rent The Group has leased out certain parts of its building (including t outs) and land on an operating lease, which expire over a period upto 2016. Gross rental income for the year aggregate to Rs 21,408 (March 31, 2008 - Rs 10,152). Further, minimum lease rentals under operating lease are as follows: March 31, 2009 Not later than one year Later than one year and not later than ve years Later than 5 Years 20,856 81,216 71,064 March 31, 2008 20,304 81,216 91,368 15,353 24,008 March 31, 2008 10,285 17,720 18,931 26,320 3,277 March 31, 2008 10,735 21,331 4,273 141,278 1,243,396 March 31, 2009 March 31, 2008
25. Contingent liabilities (a) Direct and indirect matters under appeal (b) Corporate guarantees given to the Central Excise Department There are certain claims amounting to Rs 43 Million made against the Company which the management of the Company believes are not tenable and hence these claims have not been acknowledged as debts. 26. Foreign exchange exposure
March 31, 2009 427,207 841,057
March 31, 2008 167,348 841,057
The Group has entered into foreign exchange forward and option contracts to hedge highly probable forcasted transactions in foreign currency. As at March 31, 2009, the Group has forward exchange contracts to sell US$ 144,000 (March 31, 2008 -US$ 98,000) and sell EUR 20,000 and US$ 24,000 (March 31, 2008 - Nil) in respect of the forecasted transaction. In addition as at March 31, 2009, the Group has European style option contracts of US$ 88,000 (March 31, 2008 - Nil) with periodical maturity dates upto June 2012 The unhedged foreign currency exposure as at the Balance Sheet date is as given below: March 31, 2009 Receivables Payables Foreign currency denominated loans 27. Investments in Joint Venture Company NeoBiocon FZ LLC (NeoBiocon), was incorporated in Dubai as a 50% joint venture between the Company and B R Shetty, is engaged in development, marketing and distribution of biopharmaceuticals in the Gulf region. As at March 31, 2009, the aggregate amount of Biocons interest in the assets, liabilities, income and expenses of NeoBiocon is Rs 5,059 (March 31, 2008 - Rs 3,093) and Rs 3,595 (March 31, 2008 - Rs 3,902), Rs 4,251 (March 31, 2008 - Rs Nil) and Rs 8,225 (March 31, 2008- Rs 2,441) respectively. The share of the Company in the accumulated losses of NeoBiocon as at March 31, 2009 stood at Rs 6,792 (March 31, 2008 - 2,441). 28. Discontinuing Operations On July 18, 2007, the Board of Directors of Biocon approved the sale of the Companys Enzymes business along with its assets and liabilities to a third party. On September 3, 2007, the shareholders of the Company approved the sale by way of a postal ballot. Effective October 1, 2007, the Company transferred the net assets of the Enzymes business amounting to Rs 464 million for a consideration of Rs 3,958 million and recorded a gain of Rs 3,297 million net of expenses incidental and attributable to the sale of the business, including provision for contingencies of Rs 50,000. As part of the sale agreement, the Company also entered into an agreement to lease certain xed assets to such third party to carry on manufacturing activities out of such facilities, and to provide certain specied support services, effective October 1, 2007. The net assets of the Enzymes Business as on the date of transfer are as follows. 604,116 701,468 1,735,521 March 31, 2008 265,169 499,721 1,257,307
As at October 1, 2007 Fixed assets Current assets Current liabilities Net assets The net cash ows attributable to the Enzymes business are as follows: March 31, 2008 Operating Investing Financing Net inow/(outows) The following are the disclosures pertaining to the operating activities of the discontinued operations: March 31, 2008 Revenues Operating costs Prot/(Loss) from operating activities Finance cost Prot/(Loss) before tax Income tax expense Prot/loss after tax 477,247 437,025 40,222 1,427 38,795 10,533 28,262 72,097 3,060,718 (1,427) 3,131,388 50,417 445,350 104,093 391,674
29. Employee Benet Plans A summary of the gratuity plan is as follows : Fund balance Dened benet obligation Fair value of plan assets Plan Liability The change in benet obligation and funded status of the gratuity planis as follows: Change in benet obligation Benet obligation at the beginning of the year Current Service cost Past Service cost Interest cost Benets paid Actuarial (gain)/loss Benet 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 Benets paid Fair value of plan assets at end of year Net gratuity cost: Components of net benet 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 The assumptions used in accounting for the gratuity plan are as below: Discount rate Expected Return on Plan Assets Salary increase Attrition rate upto age 44 Attrition rate above age 44 Retirement age Experience adjustment 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 year ending March 31, 2010, is approximately Rs 15,000. (March 31, 2008 - Rs 2,938) The nature of the asset allocation of the fund is only in debt based mutual funds of high credit ratings. 7.00% 8.00% 8.00% 20.00% 15.00% 58 8.20% 8.20% 9.00% 17.00% 16.00% 58 12,291 6,587 (5,480) 1,934 15,332 9,732 11,228 5,464 (6,721) (5,494) 4,477 6,721 66,391 5,480 4,252 3,402 (2,597) 76,928 73,415 6,721 3,231 (16,976) 66,391 69,328 12,291 6,587 (2,597) 6,185 91,794 75,106 11,228 5,464 (16,976) (5,494) 69,328 March 31, 2009 91,794 76,928 14,866 March 31, 2008 69,328 66,391 2,938
30. Segmental information Business segments The primary reporting of the Group has been performed on the basis of business segments. The Group is organised into two business segments, active pharmaceutical ingredients (Pharma) and contract research services. Segments have been identied and reported based on the nature of the products, the risks and returns, the organisation structure and the internal nancial reporting systems. During the year ended March 31, 2008, the Group sold its enzymes business. (Also refer note 28). April 1, 2008 to March 31, 2009
Particulars Revenues External sales Inter-segment transfers Total revenues Costs Segment costs Inter-segment transfers Result Segment result Corporate expenses Other income Operating prot Depreciation Interest expense Income taxes - Current and deferred Share of losses in Associate Company Minority Interest Net prot before exceptional item Exceptional items Income Tax on Exceptional item Prot after taxes Other information Segment assets Unallocated corporate assets Total assets Segment liabilities Unallocated corporate liabilities Minority Interest Total liabilities Capital expenditure* *Includes additions through acquisitions. Pharma Contract Research 13,841,220 14,935 13,856,155 (9,717,831) (113,883) 4,024,441 (834,922) (997,450) 2,245,502 113,883 2,359,385 (1,679,875) (14,935) 664,575 (267,597) (551,761) (1,354,186) 544,295 (176,615) (118,384) (7,199) (71,306) 77,326 (128,818) (128,818) 128,818 16,086,722 16,086,722 (11,397,706) 4,689,016 (1,354,186) 544,295 3,879,125 (1,102,519) (176,615) (118,384) (7,199) (71,306) 2,403,102 (1,549,211) 77,326 931,217 22,299,103 3,135,869 25,434,972 8,967,022 1,112,378 247,686 10,327,086 3,975,925 Unallocated Eliminations Total
16,611,898 5,290,800 2,481,805
5,687,205 3,676,222 1,494,120
3,135,869 1,112,378 247,686 -
April 1, 2007 to March 31, 2008

Particulars Revenues External sales/income, net Inter-segment transfers Total revenues/ income Costs Segment costs Inter-segment transfers Result Segment result Corporate expenses Other income Operating prot Depreciation Interest expense Income taxes - Current and deferred Minority Interest Net prot before Exceptional Income Exceptional Income, net Impairment Losses Income Tax on Exceptional item Prot after taxes Other information Segment assets Unallocated corporate assets Total assets Segment liabilities Unallocated corporate liabilities Minority Interest Total liabilities Capital expenditure Discontinued Operations 457,016 20,231 477,247 (358,734) 118,513 (7,984) 8,325,439 8,325,439 (5,019,354) (72,522) 3,233,563 (746,446) (220,000) Pharma Contract Research 1,755,486 52,291 1,807,777 (1,229,567) 578,210 (184,774) (944,295) 364,108 (101,801) (128,883) 65,229 3,297,546 (683,892) (72,522) (72,522) 72,522 10,537,941 10,537,941 (6,607,655) 3,930,286 (944,295) 364,108 3,350,099 (939,204) (101,801) (128,883) 65,229 2,245,440 3,297,546 (220,000) (683,892) 4,639,094 16,108,293 4,680,720 20,789,013 4,982,888 1,037,867 (73,218) 5,947,537 1,586,747 Unallocated Eliminations Total
12,860,112
3,248,181 4,680,720
3,873,604 561,940
1,109,284 1,024,807
1,037,867 (73,218) -
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: Sales Revenues, net India Outside India Total April 1, 2008 to March 31, 2009 4,417,092 11,669,630 16,086,722 April 1, 2007 to March 31, 2008 3,570,542 6,967,399 10,537,941
The following is the carrying amount of assets by geographical area in which the assets are located: Carrying amount of segment assets 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 xed assets and current assets. Segment liabilities comprise of liabilities which can be identied 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. 31. Prior year comparatives The previous years gures have been re-grouped/reclassied, where necessary to conform to current years classication. As per our report of even date For S.R. BATLIBOI & ASSOCIATES Chartered Accountants For and on behalf of the Board of Directors of Biocon Limited March 31, 2009 18,948,245 6,486,727 25,434,972 March 31, 2008 18,830,536 1,958,477 20,789,013
Kiran Mazumdar-Shaw Managing Director Murali Krishnan K N President - Group Finance Bangalore April 28, 2009
Summarised Statement for Subsidiary Companies

Syngene International Limited Capital Reserves Total Assets Total Liabilites Investment (except in subsidiaries) Turnover Prot/(Loss) before taxation Provision for taxation Operational Prot/(Loss) after taxation Exceptional items, net of tax Prot/(Loss) after taxation Conversion Rate as at March 31, 2009 1 EUR = INR 67.46 1 AED = INR 14.21 28,750 1,624,632 5,219,324 3,565,942 396,667 2,031,377 344,009 17,211 326,798 (551,761) (224,963) Clinigene International Limited 500 15,098 494,587 478,989 330,520 46,777 1,475 45,302 45,302 Biocon Biopharmaceuticals Private Limited 176,000 1,322,907 1,146,907 114,273 (76,472) (24,736) (51,736) (51,736) 500 500 Biocon Research Limited
(Amounts in Indian Rupees thousands) NeoBiocon FZ LLC 3,226 (14,213) Biocon SA 3,960 29,983 AxiCorp GmbH 16,730 1,375,750 2,492,635 1,179,483 563 4,695,867 117,014 17,373 99,641 99,641
10,118 2,613,642 21,105 2,579,699 8,502 (7,948) (7,948) (7,948) 33,730 32,574 3,094 29,480 29,480
The Company has obtained exemption from the Ministry of Company affairs, Government of India, from attaching the nancial accounts of the subsidiary companies to this Report. The members can, however, obtain the copy of the detailed annual accounts of the subsidiary companies and related information by making a request to that effect. A copy of the same shall also be available for inspection at the registered ofce of the Company.
Glossary
ANDA Mab API BSE CAP CDSL cGMP COS CRC CRO DMF DPCO EBITDA EDQM EGFR EPS ESOP ETP EU FTE GCC GCP ICAI ICH IGAAP IPO IPR MMF MRP NCEs NSDL NSE OHSAS OTC PCT PK / PD R&D ROW SEBI TGA TRIPS US GAAP USFDA WTO Abbreviated New Drug Application Monoclonal Antibodies Active Pharmaceutical Ingredient Mumbai Stock Exchange College of American Pathologists Central Depository Services (India) Limited Current Good Manufacturing Practices Certicate of Suitability Custom Research Company Contract Research Organisation Drug Master File Drug Price Control Order Earnings Before Interest, Depreciation and Taxes European Directorate for Quality of Medicines Epidermal Growth Factor Receptor Earnings Per Share Employees Stock Options Plan Efuent Treatment Plant European Union Full Time Equivalent Gulf Co-operation Council Good Clinical Practice Institute of Chartered Accountants of India International Conference on Harmonisation Indian Generally accepted Accounting principles Intial Public Offering Intellectual Property Rights Mycophenolate Mofetil Mutual Recognition Procedure New Chemical Entities National Securities Depository Limited National Stock Exchange Occupational Health Safety Assesment Series Over the Counter Patent Co-operation Treaty Pharmaco Kinetic / Pharmaco Dynamic Research and Development Rest of the world Securities Exchange Board of India Therapeutics Good Adminstration Trade Related Aspects of Intellectual Property Rights United States Generally Accepted Accounting Principles United States Food and Drug Aminstration World Trade Organisation
Currency Abbreviation AED CHF EUR USD / US$ UAE Dirhams Swiss Francs Euros United States Dollar
Group Companies
COMPANY SECRETARY: [email protected]
CORPORATE COMMUNICATIONS: [email protected]
INVESTOR RELATIONS: [email protected]
This Annual Report may contain forward-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 risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, the statements. Biocon assumes no obligation to publicly 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.
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Biocon Corporate Communications | tsk
DESIGN [email protected]
Photography: Ryan Lobo Mallikarjun Katakol Senthil
Biocon Limited 20th KM Hosur Road Electronic City Bangalore 560 100 India T 91 80 2808 2808 F 91 80 2852 3423 www.biocon.com
Notice
NOTICE is hereby given that the Thirty First Annual General Meeting of the members of Biocon Limited will be held on Thursday, July 23, 2009, at 3.30 p.m. at Sathya Sai Samskruta Sadanam, No. 20, Hosur Road, Near Forum Mall, Bangalore - 560 029, to transact the following business: Ordinary Business: 1. To receive, consider, approve and adopt the audited Balance Sheet as at March 31, 2009 and audited Prot and Loss Account for the year ended on that date together with the reports of the Directors and the Auditors thereon. To approve payment of dividend of 60% i.e. Rs 3/- per equity share for the year ended March 31, 2009. To appoint a director in place of Mr. John Shaw who retires by rotation and being eligible, offers himself for re-appointment. To appoint a director in place of Mr. Suresh Talwar who retires by rotation and being eligible, offers himself for re-appointment. To appoint Statutory Auditors to hold ofce from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting and to authorise the Board of Directors to x their remuneration. The retiring auditors M/s. S R Batliboi & Associates, Chartered Accountants are eligible for re-appointment and have conrmed their willingness to accept ofce, if re-appointed.
2. 3. 4. 5.
By Order of the Board of Directors For Biocon Limited
Place: Bangalore Date: April 28, 2009. Registered ofce: 20th KM, Hosur Road Electronics City P. O. Bangalore - 560 100 Karnataka, India
Kiran Mazumdar-Shaw Chairman and Managing Director
Biocon Annual Report 2009 AGM Notice
NOTES: 1. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY. THE INSTRUMENT APPOINTING A PROXY, SHOULD HOWEVER BE DEPOSITED AT THE REGISTERED OFFICE OF THE COMPANY, NOT LESS THAN 48 HOURS BEFORE THE COMMENCEMENT OF THE MEETING. Members/proxies should bring duly lled Attendance Slips sent herewith to attend the meeting. The Register of Directors Shareholding, maintained under Section 307 of the Companies Act, 1956 will be available for inspection by the members at the meeting. The Register of Contracts, maintained under Section 301 of the Companies Act, 1956 and all documents as mentioned in the resolutions and or explanatory statement will be available for inspection by the members at the registered ofce of the Company. The Register of Members and Share Transfer Books of the Company will remain closed from July 15, 2009 to July 23, 2009 (both days inclusive). Subject to the provisions of Section 206A of the Companies Act, 1956 dividend as recommended by the Board of Directors of the Company, if declared at the meeting, will be payable on or after July 24, 2009 to those members whose name appear on the Register of Members as on the opening of July 15, 2009. Payment of dividend through ECS: Members holding shares in Electronic (demat) form are advised to inform the particulars of their bank account and any change of address to their respective Depository Participants only and not to the Company or to the Registrars. 8. Members holding shares in physical form are advised to submit particulars of their bank account, viz. Name and address of the branch of the bank, 9 digit MICR code of the branch, type of account and account number and any change of address to the share transfer agents of the Company viz. Karvy Computershare Private Ltd. (Unit: Biocon Ltd.), Plot No. 17-24, Vittal Rao Nagar, Madhapur, Hyderabad 500 081. Members are requested to address all correspondences, including dividend matters to the Share Transfer Agents, Karvy Computershare Private Ltd. (Unit: Biocon Ltd.), Plot No. 17-24, Vittal Rao Nagar, Madhapur, Hyderabad 500 081.
2. 3.
4.
5.
6.
7.
9.
10. Members seeking any information relating to the Accounts may write to the Company at 20th KM, Hosur Road, Electronics City P.O., Bangalore - 560 100 for the attention to Company Secretary at least seven days before the date of the thirty rst annual general meeting. Information pursuant to revised Clause 49 of the listing agreement regarding the re-appointment of Directors: Mr. John Shaw Mr. John Shaw, 60 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. (Hons.) in History and Political Economy from Glasgow University, U.K. in 1970. At the time of joining Biocon, he had served 27 years with Coats Viyella plc. in various capacities including nance and general administration. He was the Chairman of Madura Coats Ltd. from 1991-98.
Other Details:* Date of Birth Date of Appointment on the Board Shareholding in Equity shares of the Company and percentage of holding in share capital. 12/04/1949 12/01/1998 1,407,558 (0.70%)
Mr. Suresh N Talwar Mr. Suresh N Talwar, 71 years, is a partner in Talwar Thakore & Associates, a law rm 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 rm. He is also a director of several leading companies in India.
Other details:* Date of Birth Date of Appointment on the Board Shareholding in Equity shares of the Company and percentage of holding in share capital. * The details of directorship in other companies & details of membership in Board Committees as on March 31, 2009, is set out in the Report on Corporate Governance appearing on page 65 of the Annual Report for nancial year 2009. 21/11/1938 17/05/2003 32,000 (0.016%)
PROXY FORM Regd. Folio No. / DP ID/Client ID________________________________________________________________
Afx 1 Rupee Revenue Stamp
I/We................................ of .......................... being a member/members of Biocon Limited hereby appoint .of .... as my/our Proxy or failing him/her...... of ....... as my/our proxy to vote for me/us on my/our behalf at the Thirty First Annual General Meeting of the Company to be held on Thursday, July 23, 2009 at 3.30 p.m. at Sathya Sai Samskruta Sadanam, No. 20, Hosur Road, Near Forum Mall, Bangalore - 560 029 India and at any adjournment(s) thereof.
Signed this.. day of..2009
Note: The proxy form in order to be effective, should be duly stamped, completed and deposited at the Registered Ofce of the Company at 20th KM, Hosur Road, Electronics City P.O., Bangalore - 560 100 not less than 48 hours before the time for holding the meeting.
BIOCON LIMITED 20th K M, Hosur Road, Electronics City P.O., Bangalore 560 100.
Cut Here
ATTENDANCE SLIP Thirty First Annual General Meeting July 23, 2009 Regd. Folio No./ DP ID/ Client ID________________________________________________________________ No. of shares held _________________ I certify that I am registered shareholder/proxy for the registered shareholder of the Company. I hereby record my presence at the Thirty First Annual General Meeting of the Company held on Thursday, July 23, 2009 at 3.30 p.m. at Sathya Sai Samskruta Sadanam, No. 20, Hosur Road, near Forum Mall, Bangalore - 560 029.
Name of the member/proxy (in BLOCK letters)
Signature of member/proxy
Note: Please ll up this attendance slip and hand it over at the entrance of the meeting hall. Shareholders are informed that no duplicate attendance slips will be issued at the venue of meeting. Members are requested to bring their copies of the Annual Report to the meeting.
BIOCON LIMITED 20th K M, Hosur Road, Electronics City P.O., Bangalore 560 100.
Dear Shareholder, RE: PAYMENT OF DIVIDEND THROUGH ECS As per Securities and Exchange Board of India (SEBI) Circular No. DCC/FITT/CIR 3/2001, all companies should make mandatory use of Electronic Clearing Services (ECS) facility wherever available which is introduced by Reserve Bank of India for distributing dividends, wherein dividend amount would be directly credited to shareholders Bank account. We wish to inform you that all your relevant records are maintained by your Depository Participants (DP). The companies retrieve the data maintained by DPs through NSDL/CDSL. Hence, you are advised to intimate any changes in your Bank details immediately to your DP. THE INFORMATION SHOULD ONLY BE SENT TO YOUR DP AND NOT TO THE COMPANY OR TO THE REGISTRAR OF THE COMPANY. After remitting the dividend to your Banks directly, an intimation of payment of dividend will be sent to you. In case of absence of ECS facility, Company will send the dividend through Dividend Warrants/Demand Drafts payable at the Branch of the Dividend Banker which is nearest to the registered address of the member. The Company is required to print the bank account details on the Dividend Warrants for distribution of dividends. Hence existing bank details are required to be led with your DP, even when the payments are made through Dividend warrants. Please send these details to your DP together with any other document requested by your DP immediately. Note: The Company or its Registrars cannot act on the Mandate. Hence you are requested to get the Mandate registered with your DP and not send the same to the Company or Registrar. Format of letter/mandate to the DP is enclosed for this purpose.
Cut Here
MANDATE FORM- ELECTRONIC CLEARING SERVICE (ECS) To, ______________________________________________ ______________________________________________ Please register the following details for receipt of Dividend: Type of Instruction Name DP ID Client ID Bank Details Remittance of amount through Electronic Clearance Service ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ Bank Name : ____________________________________________________ Bank Address: ___________________________________________________ ________________________________________________________________ Account Type and No.: SB/ CA/ CC No.: _____________________________ 9 Digit MICR Code: ______________________________________________ Please nd enclosed a photocopy of cancelled blank cheque for your verication. (Name of the Depository Participant) (Address of the Depository Participant)
_________________________________ Signature of the shareholders and date

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DRIVING INNOVATION Delivering Affordability

DRIVING INNOVATION Delivering Affordability

The Global Healthcare Crisis

The Burgeoning Indian Market

Biocon products are available in over 1,50,000 pharmacies across India.

Biocon Annual Report 2009 India Focus 03

Manufacturing & Research Infrastructure Advantage

Biocon Annual Report 2009 Advantage Biocon 05

Biocons Innovation Matrix

Biocon Annual Report 2009 Biocons Innovation Matrix 07

The Innovation Matrix: A Strategic Framework

Biocon Annual Report 2009 Chairmans Review 09

Increasing Our Global Footprint: AxiCorp & NeoBiocon

Clinical Advisory Board

Global Recognition & Awards

Looking to the Future

Corporate Social Responsibility

The People of Biocon

Biocon Annual Report 2009 Chairmans Review 11

Clinical Advisory Board

Biocon Annual Report 2009 13

Affordability Index of Biocon Products

More economical than the leading brand

50% 50% 45% 30% 25% 25% 20% 20% 20%

Our Intellectual Prole

Doctorate / Post Doctorate Graduate

Post Graduate Others

Biocon BBPL Clinigene Syngene Grand Total

1634 98 132 907 2771

1978 99 137 1240 3454

Biocon Annual Report 2009 Highlights 17

Biocon Annual Report 2009 Highlights 19

Biocon Annual Report 2009 Highlights 21

Research & Development

Clinical Advisory Board

Biocons Biologics Pipeline

IN 105 (ORAL INSULIN) T1h BIOMAb EGFR (Glioma, NSCLC) INFLAMMATION

Biocon Annual Report 2009 Highlights 23

Discovery Research: Syngene

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Clinical Research: Clinigene

Break-up of Patients by Therapeutic Area

Oncology Diabetes Bone & Metabolic Disorders Immunology

Cardiology Dermatology Others

Biocon Annual Report 2009 Highlights 27

Environment, Health & Safety

Quality & Regulatory

Biocon Annual Report 2009 Highlights 29

EHS Responsibilities of Employees

EHS Management Systems

Corporate Social Responsibility

Biocon Annual Report 2009 Highlights 31

Preventive Health Education

Biocon Annual Report 2009 Highlights 33

ARY Micro Health Insurance Scheme 2008-09

General Ophthalmology Urology/Nephrology Orthopedic

Biocon Annual Report 2009 Highlights 35

TELMISAT-H Active Ingredient: Telmisartan 40 mg + Hydrochlorothiazide 12.5 mg Indication: In uncontrolled hypertension

Indication: Controls elevated cholesterol levels