MIRA INFORM REPORT

Report No. :	350613
Report Date :	23.11.2015

IDENTIFICATION DETAILS

Name :	BIOCON LIMITED
Registered Office :	20th KM, Hosur Main Road, Hebbagodi, Electronics City, Bangalore – 560100, Karnataka
Tel. No.:	91-80-28422169/28523434/ 28082808 / 40144014/ 67751107/ 67751128
Country :	India
Financials (as on) :	31.03.2015
Date of Incorporation :	29.11.1978
Com. Reg. No.:	08-003417
Capital Investment / Paid-up Capital :	Rs.1000.000 Million
CIN No.: [Company Identification No.]	L24234KA1978PLC003417
IEC No.:	0788000560
TAN No.: [Tax Deduction & Collection Account No.]	BLRB00214E
PAN No.: [Permanent Account No.]	AAACB7461R
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Subject engaged in manufacture of biotechnology products for the pharmaceutical sector.
No. of Employees :	4197 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

Aa (75)

RATING		STATUS	PROPOSED CREDIT LINE
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large

Maximum Credit Limit :	USD 73800000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Exist
Comments :	Subject was incorporated 1978 and it is a manufacturer of generic active pharmaceutical ingredients biosimilar Insulins. It offers contract manufacturing and research services. For the financial year ended 2015, company has reported marginal growth of 5.63% in its revenue profile and it has maintained average profitability margins at 2.86% during the year under a review. Rating continue to reflect Biocon’s diversified revenue profile and established market position in the bio pharma segment in the domestic market. The ratings also factor in Biocon’s robust financial profile marked by sound gearing and healthy debt protection metrics. Trade relations are reported as fair. Payments are reported to be regular and as per commitment. The company can be considered good for normal business dealings at usual trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – March 31, 2015

Country Name	Previous Rating (31.12.2014)	Current Rating (31.03.2015)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

EXTERNAL AGENCY RATING

Rating Agency Name	CRISIL
Rating	Long Term Rating : “AA+”
Rating Explanation	High degree of safety and very low credit risk.
Date	13 July 2015

Rating Agency Name	CRISIL
Rating	Short Term Rating : “A1+”
Rating Explanation	Very strong degree of safety and carry lowest credit risk
Date	13 July 2015

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2015.

INFORMATION DENIED BY

Name :	Mr. Siddharth Mittal
Designation :	Chief Financail Officer
Contact No.:	91-80-28422169
Date :	18.11.2015

LOCATIONS

Registered Office /Factory 1 / Corporate Headquarters:	20^th KM, Hosur Main Road, Hebbagodi, Electronics City, Bangalore – 560100, Karnataka, India
Tel. No.:	91-80-28422169/28523434/ 28082808 / 40144014/ 67751107/ 67751128
Fax No.:	91-80-28422623/25531662/28523423
E-Mail :	info@biocon.com contact.us@bioconindia.com contact.us@biocon.com usha.tn@biocon.com kiran.kumar@biocon.com rani.desai@biocon.com
Website :	http://www.biocon.com
Sez Unit: (Special Economic Zone)	Plot No. 2 to 5 phase, IV-BIAA, Bangalore - 560 099, Karnatka, India
Factory 2 :	Plot No 113/C2, Bommasandra Industrial Area, Bommasandra, Bangalore – 560099, Karnataka, India
Factory 3 :	Plot No 2,3,4 and 5, Bommasandra – Jigani Link Road, Bangalore – 560099, Karnataka, India
Factory 4 :	Plot 213-215 IDA Phase – II,pashamlaram Medak District – 502307, Andhara Pradesh, India

DIRECTORS

As on: 31.03.2015

Name :	Ms. Kiran Mazumdar-Shaw
Designation :	Chairman and Managing Director
Address :	Glenmore, No. 58 Goolimangala Village, Sarjapur Hobli, Anekal Taluk, Bangalore - Karnataka, 562106, , India
Date of Birth/Age :	20.11.1978
Qualification :	B.Sc. (Hons.), PG Diploma in Malting and Brewing
Date Of Appointment :	01.12.1978
Name :	Mr. John Shaw
Designation :	Vice Chairman
Address :	Glenmore, Survey No. 58, Goolimangala Village, Sarjapur Hobli, Anekal Taluk, Bangalore-562106, Karnataka, India
Date Of Appointment :	12.01.1998
Name :	Ms. Mary Harney
Designation :	Non-Executive, Independent Director
Address :	Wynnsward Park, Dublin 14, Dublin, 14, Ireland
Date of Appointment :	26.04.2012
Name :	Prof. Ravi Mazumdar
Designation :	Non-Executive, Independent Director
Address :	565, Hemingway Place, Waterloo On, N2T1Z4, Canada
Date of Birth/Age :	14.07.1940
Date of Appointment :	08.08.2000
Name :	Mr. John Russell Fotheringham Walls
Designation :	Non-Executive, Independent Director
Address :	40 IBIS Lane, Grove Park, Chiswick, London, W43UP, United Kingdom
Date of Appointment :	28.04.211
Name :	Mr. Daniel M. Bradbury
Designation :	Non-Executive, Independent Director
Address :	5462 , Soledad Road, LA Jolla, California, 92037, United States of America
Date of Appointment :	25.04.2013
Name :	Dr. Arun Chandavarkar
Designation :	Chief Executive Officer & Joint Managing Director
Address :	#376, Malabar Mansion, 13th Main, III Block, Koramangala, Bangalore-560034, Karnataka, India
Date Of Appointment :	24.04.2014
Name :	Dr. Levin M Jeremy
Designation :	Additional Independent Director
Address :	110 Riverside Door 13A, New York, New York, NA, United States of America
Date Of Appointment :	22.01.2015
Name :	Dr. Vijay Kumar Kuchroo
Designation :	Additional Independent Director
Address :	30 Fairhaven Road, Newton, Massachusetts, Massachusetts, 02459, United States of America
Date Of Appointment :	22.01.2015
Name :	Prof. Charles L. Cooney
Designation :	Non-Executive, Independent Director
Name :	Dr. Bala S. Manian
Designation :	Non-Executive, Independent Director
Name :	Mr. Suresh N. Talwar
Designation :	Non-Executive, Independent Director
Name :	Mr. Peter Bains
Designation :	Chief Exectuive Officers and Director, Syngene
Name :	Prof. Catherine Rosenberg
Designation :	Director, Syngene

KEY EXECUTIVES

CORE COMMITTEE
Name :	Ms. Kiran Mazumdar-Shaw
Designation :	Chairman and Managing Director
Name :	Mr. John Shaw
Designation :	Vice Chairman
Name :	Mr. Siddharth Mittal
Designation :	Chief Financial Officer,
Name :	Mr. Ravi Limaye
Designation :	President, Marketing
Name :	Mr. Amitava Saha
Designation :	Senior Vice President, Human Resources,
Name :	Dr. Arun Chandavarkar
Designation :	Chief Executive Officer
Scientific Advisory Board
Name :	Prof. Alan D. Cherrington
Designation :	Ph.D., Professor & Chairman
Name :	Dr. G. Alexander Fleming
Designation :	M.D., President and CEO
Name :	Dr. Lawrence Steinman
Designation :	M.D., Key Research
Name :	Dr. David M. Essayan
Designation :	M.D., Key Research
Name :	Dr. Harold E. Lebovitz
Designation :	M.D., FACE, Professor of Medicine
Name :	Dr. Vijay Kuchroo
Designation :	D.V.M., Ph.D. Key Research
Name :	Dr. Kiran Kumar
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON: 30.09.2015

Category of Shareholder	Total No. of Shares	As a %
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	79839766	39.92
Sub Total	79839766	39.92
(2) Foreign
Individuals (Non-Residents Individuals / Foreign Individuals)	2673486	1.34
Bodies Corporate	39535194	19.77
Sub Total	42208680	21.10
Total shareholding of Promoter and Promoter Group (A)	122048446	61.02
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	6208448	3.10
Financial Institutions / Banks	8547429	4.27
Foreign Institutional Investors	23669896	11.83
Sub Total	38425773	19.21
(2) Non-Institutions
Bodies Corporate	2876892	1.44
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 Million	15982801	8.01
Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	10816359	5.54
Any Others (Specify)	9362465	4.77
Non Resident Indians	1074679	0.62
Trusts	8180081	4.09
Clearing Members	107705	0.05
Sub Total	39038517	19.76
Total Public shareholding (B)	77464290	38.98
Total (A)+(B)	199512736	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	0	0.00
(1)	0	0.00
(2)	0	0.00
Sub Total	0	0.00
Total (A)+(B)+(C)	199512736	100.00

BUSINESS DETAILS

Line of Business :

Subject engaged in manufacture of biotechnology products for the pharmaceutical sector.

Products :

ITC Code No.	Products Description
350790	Enzymes for Pharmaceutical Use
280000 and 290000	Organic and Inorganic Chemicals

Brand Names :

Not Divulged

Agencies Held :

Not Divulged

Exports :

Not Divulged

Imports :

Not Divulged

Terms :

Not Divulged

PRODUCTION STATUS NOT AVAILABLE

GENERAL INFORMATION

Suppliers :

Reference :	Not Divulged
Name of the Person :	Not Divulged
Contact No.:	Not Divulged
Since How Long Known :	Not Divulged
Maximum Limit Dealt :	Not Divulged
Experience :	Not Divulged
Remark:	Not Divulged

Customers :

Reference :	Not Divulged
Name of the Person :	Not Divulged
Contact No.:	Not Divulged
Since How Long Known :	Not Divulged
Maximum Limit Dealt :	Not Divulged
Experience :	Not Divulged
Remark:	Not Divulged

No. of Employees :

4197 (Approximately)

Bankers :

· State Bank of India, Overseas Branch, No. 65, St. Marks Road, Bangalore - 560001, Karnataka, India

• The Hongkong and Shanghai Banking Corporation Limited, 7 M.G. Road, Bangalore - 560001, Karnataka, India

Bank Name	Not Divulged
Branch	Not Divulged
Person Name (With Designation)	Not Divulged
Contact Number	Not Divulged
Name of Account Holder	Not Divulged
Account Number	Not Divulged
Account Since (Date/Year of Account Opening)	Not Divulged
Average Balance Maintained (If Possible)	Not Divulged
Credit Facilities Enjoyed (If any)	Not Divulged
Account Operation	Not Divulged
Remarks (If any)	Not Divulged

Facilities :

SECURED LOAN	31.03.2015 (Rs in Million)	31.03.2014 (Rs in Million)
SHORT TERM BORROWINGS
From banks / financial institution
Packing credit foreign currency loan (secured)	0.000	541.000
Cash Credit	0.000	274.000
Total	0.000	815.000

Banking Relations :	Department of Biotechnology, 6-8th Floor, Block No. 2, CGO Complex, New Delhi - 110003, INDIA
Auditors :
Name :	S. R. Batliboi and Associates Chartered Accountants
Address :	Bangalore, Karnataka, India
Memberships :	--
Collaborators :	--
Subsidiary :	Syngene International Limited Biocon Research Limited Biocon Pharma Limited Biocon SA Biocon Sdn. Bhd. NeoBiocon FZ LLC Glentec International Biocon Academy Biocon Limited Biocon Foundation Narayana Hrudayalaya Private Limited

CAPITAL STRUCTURE

As on 31.03.2015

Authorised Capital :

No. of Shares	Type	Value	Amount
220000000	Equity shares	Rs.5/- each	Rs. 1100.000 Million

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
200000000	Equity shares	Rs.5/- each	Rs. 1000.000 Million

As on 31.03.2015

(a) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period

Equity Shares	31.03.2015
	No.	Rs. In Million
At the beginning of the year	200,000,000	1000.000
Issued during the year	--	--
Outstanding at the end of the year	200,000,000	1000.000

(b) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 5 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

• During the year ended March 31, 2015, the Board of Directors approved interim dividends for distribution to equity shareholders of Rs. 5 per share (March 31, 2014 – Rs. Nil). Final dividends proposed for distribution to equity shareholders was Rs Nil (March 31, 2014 - Rs 5) per share, subject to shareholders approval.

• In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts, if any. The distribution will be in proportion to the number of equity shares held by the shareholders.

(c) Details of shareholders holding more than 5% shares in the Company

iv. Details of shareholders holding more than 5% shares in the Company

Equity Shares	31.03.2015
Equity shares of Rs. 5 each fully paid	No.	% holding
Dr Kiran Mazumdar Shaw	79,287,564	39.64%
Glentec International	39,535,194	19.77%

As per of the Company, including its register of shareholders/members, the above shareholding represents both legal and beneficial ownerships of shares.

d) Shares reserved for issue under options

For details of shares reserved for issue under the employee stock option (ESOP) plan of the Company.

FINANCIAL DATA

[all figures are in Rupees Million]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2015	31.03.2014	31.03.2013
I. EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	1000.000	1000.000	1000.000
(b) Reserves & Surplus	24844.000	23177.000	21068.000
(c) Money received against share warrants	0.000	0.000	0.000
(2) Share Application money pending allotment	0.000	0.000	0.000
Total Shareholders’ Funds (1) + (2)	25844.000	24177.000	22068.000
(3) Non-Current Liabilities
(a) long-term borrowings	114.000	259.000	400.000
(b) Deferred tax liabilities (Net)	368.000	400.000	302.000
(c) Other long term liabilities	1364.000	1311.000	1083.000
(d) long-term provisions	0.000	0.000	0.000
Total Non-current Liabilities (3)	1846.000	1970.000	1785.000
(4) Current Liabilities
(a) Short term borrowings	561.000	815.000	773.000
(b) Trade payables	3008.000	2685.000	2650.000
(c) Other current liabilities	603.000	899.000	679.000
(d) Short-term provisions	1468.000	1639.000	2177.000
Total Current Liabilities (4)	5640.000	6038.000	6279.000
TOTAL	33330.000	32185.000	30132 .000
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	8986.000	9410.000	8455.000
(ii) Intangible Assets	157.000	83.000	59.000
(iii) Capital work-in-progress	576.000	1018.000	512.000
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	804.000	1449.000	1660.000
(c) Deferred tax assets (net)	0.000	0.000	0.000
(d) Long-term Loan and Advances	5435.000	5546.000	4713.000
(e) Other Non-current assets	13.000	6.000	0.000
Total Non-Current Assets	15971.000	17512.000	15399.000
(2) Current assets
(a) Current investments	843.000	3483.000	4530.000
(b) Inventories	4063.000	3576.000	3589.000
(c) Trade receivables	5551.000	4946.000	4270.000
(d) Cash and cash equivalents	6212.000	2042.000	1792.000
(e) Short-term loans and advances	552.000	568.000	510.000
(f) Other current assets	138.000	58.000	42.000
Total Current Assets	17359.000	14673.000	14733.000
TOTAL	33330.000	32185.000	30132.000

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2015	31.03.2014	31.03.2013
	SALES
		Income	22416.000	22025.000	19380.000
		Other Income	1491.000	606.000	515.000
		TOTAL (A)	23907.000	22631.000	19895.000
Less	EXPENSES
		Cost of raw materials and packing materials consumed	9565.000	8876.000	8300.000
		Purchases of traded goods	880.000	1039.000	857.000
		Employee benefits expense	2844.000	2664.000	2276.000
		Other expenses	5239.000	4741.000	4110.000
		Exceptional items	218.000	0.000	139.000
		(Increase)/Decrease in inventories of finished goods, traded goods and work-in-progress	(392.000)	13.000	(179.000)
		Recovery of Product development costs from co-development partner	(19.000)	(41.000)	(41.000)
		TOTAL (B)	18335.000	17292.000	15462.000
	PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		5572.000	5339.000	4433.000
Less	FINANCIAL EXPENSES (D)		8.000	9.000	12.000
	PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		5564.000	5330.000	4421.000
Less/ Add	DEPRECIATION/ AMORTISATION (F)		1281.000	1244.000	951.000
	PROFIT/ (LOSS) BEFORE TAX (E-F) (G)		4283.000	4086.000	3470.000
Less	TAX (H)		671.000	842.000	713.000
	PROFIT/ (LOSS) AFTER TAX (G-H) (I)		3612.000	3244.000	2757.000
Add	Impact of scheme of merger for earlier year (L)		0.000	55.000	0.000
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		16137.000	14476.000	13750.000
Less	APPROPRIATIONS
		Transfer to General Reserve	361.000	330.000	276.000
		Dividend	30.000	170.000	1500.000
		Tax on Dividend	1000.000	1000.000	255.000
	BALANCE CARRIED TO THE B/S		18358.000	16275.000	14476.000
	EARNINGS IN FOREIGN CURRENCY
		Export of goods on FOB basis	10339.000	10669.000	9450.000
		Licensing and development fees	283.000	37.000	114.000
		Other operating revenue	60.000	97.000	342.000
		Capacity reservation fees	311.000	0.000	0.000
	TOTAL EARNINGS		10993.000	10803.000	9906.000
	IMPORTS
		Raw Materials	5337.000	5239.000	4917.000
		Packing materials	332.000	247.000	177.000
		Traded goods	293.000	408.000	250.000
		Maintenance spares	5.000	66.000	49.000
		Capital goods	135.000	613.000	168.000
	TOTAL IMPORTS		6102.000	6573.000	5561.000
	Earnings / (Loss) Per Share (Rs.)
	Basic		18.06	16.81	14.08
	Diluted		18.06	16.62	13.95

CURRENT MATURITIES OF LONG TERM DEBT DETAILS

Particulars	31.03.2015	31.03.2014	31.03.2013
Current Maturities of Long term debt	140.000	140.000	140.000
Cash generated from operations	2079.000	2788.000	4190.000
Net Cash flows from operating activities	1250.000	1858.000	3480.000

QUARTERLY RESULTS

PARTICULARS	1 Quarter	2 Quarter
Unaudited	30.06.2015	30.09.2015
Net Sales	5911.100	5584.800
Total Expenditure	4590.200	4516.100
PBIDT (Excl OI)	1320.900	1068.700
Other Income	333.100	403.800
Operating Profit	1654.000	1472.500
Interest	2.200	0.800
Exceptional Items	NA	5130.700
PBDT	1651.800	6602.400
Depreciation	320.800	323.600
Profit Before Tax	1331.000	6278.800
Tax	296.700	1292.400
Provisions and contingencies	NA	NA
Profit After Tax	1034.300	4986.400

KEY RATIOS

PARTICULARS		31.03.2015	31.03.2014	31.03.2013
Net Profit Margin (PAT / Sales)	(%)	16.11	14.73	14.23
Operating Profit Margin (PBIDT/Sales)	(%)	24.86	24.24	22.87
Return on Total Assets (PBT/Total Assets}	(%)	13.41	13.75	12.41
Return on Investment (ROI) (PBT/Networth)		0.17	0.17	0.16
Debt Equity Ratio (Total Debt /Networth)		0.03	0.05	0.06
Current Ratio (Current Asset/Current Liability)		3.08	2.43	2.35

STOCK PRICES

Face Value	Rs. 5.00/-
Market Value	Rs. 450/-

FINANCIAL ANALYSIS

[all figures are in Rupees Million]

DEBT EQUITY RATIO

Particular	31.03.2013	31.03.2014	31.03.2015
	(Rs. In Million)	(Rs. In Million)	(Rs. In Million)
Share Capital	1000.000	1000.000	1000.000
Reserves & Surplus	21068.000	23177.000	24844.000
Money received against share warrants	0.000	0.000	0.000
Share Application money pending allotment	0.000	0.000	0.000
Net worth	22068.000	24177.000	25844.000
long-term borrowings	400.000	259.000	114.000
Short term borrowings	773.000	815.000	561.000
Current Maturities of Long Term Debt	140.000	140.000	140.000
Total borrowings	1313.000	1214.000	815.000
Debt/Equity ratio	0.059	0.050	0.032

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.03.2013	31.03.2014	31.03.2015
	(Rs. In Million)	(Rs. In Million)	(Rs. In Million)
Sales	19380.000	22025.000	22416.000
		13.648	1.775

NET PROFIT MARGIN

Net Profit Margin	31.03.2013	31.03.2014	31.03.2015
	(Rs. In Million)	(Rs. In Million)	(Rs. In Million)
Sales	19380.000	22025.000	22416.000
Profit	2757.000	3244.000	3612.000
	14.23%	14.73%	16.11%

LOCAL AGENCY FURTHER INFORMATION

Sr. No.	Check list by info agents	Available in Report (Yes/No)
1	Year of establishment	Yes
2	Constitution of the entity -Incorporation details	Yes
3	Locality of the entity	Yes
4	Premises details	No
5	Buyer visit details	--
6	Contact numbers	Yes
7	Name of the person contacted	Yes
8	Designation of contact person	Yes
9	Promoter’s background	Yes
10	Date of Birth of Proprietor / Partners / Directors	Yes
11	Pan Card No. of Proprietor / Partners	No
12	Voter Id Card No. of Proprietor / Partners	No
13	Type of business	Yes
14	Line of Business	Yes
15	Export/import details (if applicable)	No
16	No. of employees	Yes
17	Details of sister concerns	Yes
18	Major suppliers	No
19	Major customers	No
20	Banking Details	Yes
21	Banking facility details	Yes
22	Conduct of the banking account	--
23	Financials, if provided	Yes
24	Capital in the business	Yes
25	Last accounts filed at ROC, if applicable	Yes
26	Turnover of firm for last three years	Yes
27	Reasons for variation <> 20%	--
28	Estimation for coming financial year	No
29	Profitability for last three years	Yes
30	Major shareholders, if available	Yes
31	External Agency Rating, if available	Yes
32	Litigations that the firm/promoter involved in	Yes
33	Market information	---
34	Payments terms	No
35	Negative Reporting by Auditors in the Annual Report	No

LITIGATION DETAILS

High Court of Karnataka - Bengaluru Bench

ITA 436/2014

Petitioner/Appnt.	THE COMMISSIONER OF INCOME - TAX
Respondent/Defnt. Name	M/S BIOCON LIMITED
Petnr./Appnt. Advocate	ARAVIND K V
Respnt./Defnt. Advocate	-
Date Filed	07/10/2014	Classification
District	Bangaluru City

Stage	PENDING FOR ADMISSION Last Posted for: Admission
Last Action Taken	ADJOURNED Last Date of Action 01.06.2015 Next hearing date
Before Hon'ble Judge/s	MOHAN M. SHANT ANAGOUDAR ARAVIND KUMAR

Lower court Details (Appeal from below case)

Case No	Court name	Disposal Dt
ITA 34/2009	COMMISSIONER OF INCOME TAX (APPEALS) LTU BLORE	-
ITA1206/2010	INCOME TAX APPELLATE TRIBUNAL BANGALORE	30.01.2014

PERFORMANCE OVERVIEW

The highlights of the Company’s performance are as under:

• Revenue from operations grew by a modest 2% to Rs. 22,416.000 Million

• Other Income grew to Rs. 1,491.000 Million due to dividend income of Rs. 997.000 Million from Syngene

• Profit before tax and exceptional items grew by 10% to Rs 4,501.000 Million

• Profit after tax for the year stood at Rs. 3,612.000 Million, up 11% from FY’14

During the year, their consolidated revenues registered a growth of 7% to Rs. 31,429.000 Million from Rs. 29,332.000 Million in FY14. From a segment perspective, the core biopharmaceutical segment recorded a growth of 5% while the research services business registered a year on year increase of 15%. On account of certain business challenges, the growth in the biopharmaceutical segment was modest. However, the performance in the research services segment was driven by strong orders and capacity expansion. The company also witnessed moderate expansion in exports which contributed 64% to the total revenues as compared to 62% in FY14. The Consolidated PAT grew by 20% from Rs. 4,138.000 Million to Rs. 4,974.000 Million factoring one time exceptional gain from the sale of Syngene shares by Biocon Research Limited pursuant to its agreement with Silver Leaf Oak (Mauritius) Limited. A detailed performance analysis is provided in the Management Discussion and Analysis segment which is annexed to this report.

OUTLOOK:

FY15 was an important year for the company. While they registered 7% revenue growth, they also took significant steps to address the key challenges of the business. They have reinforced their business strategy in the biopharmaceutical space, and over the next few years, they anticipate to overcome the business headwinds with an optimized revenue mix of high margin niche APIs and their generic formulations, biosimilar exports and Branded Formulations. They believe the Malaysian facility will be an important catalyst for addressing the capacity challenges for Insulins. That along with licensing and sales of Trastuzumab would add thrust to the biosimilars sales in emerging markets in the medium term. Further movement in their biosimilar development pipeline with more molecules progressing in the clinic and their eventual launch in developed markets would be a key determinant in the success of the biosimilars business. In research services, Syngene is well positioned to capitalize on its strengths to maintain its growth and going forward intends to evolve as a holistic contract research and manufacturing company.

CORPORATE INFORMATION

The Company, was incorporated at Bangalore in 1978 for manufacture of biotechnology products. Biocon is an integrated healthcare company engaged in manufacture of biotechnology products for the pharmaceutical sector. The Company is also engaged in research and development in the biotechnology sector. During the year ended March 31, 2007, the Company had received an approval for operation of SEZ Developer and for setting up SEZ Unit operations to be located within Biocon SEZ. 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. As at March 31, 2015, 83.61% of the equity interest in Syngene is held by Biocon and 0.93% is held by Biocon Research Limited (‘BRL’).

On January 10, 2008, Biocon entered into an agreement with Dr. B.R. Shetty to set up a joint venture Company NeoBiocon FZ-LLC, with a 50% equity interest incorporated in Dubai (‘NeoBiocon’). On July 01, 2014, the Company acquired an additional equity stake of 1% in NeoBiocon, taking its holding to 51%. Accordingly, effective July 01, 2014, NeoBiocon has become a subsidiary of the Company. The Company has also established BRL, a subsidiary of the Company to undertake research and development in novel and innovative drug initiatives. During the year ended March 31, 2009, Biocon set up a wholly owned subsidiary Company in Switzerland, Biocon SA (“BSA”) to undertake research and development in novel and innovative drug initiatives. During the year ended March 31, 2011, Biocon set up a wholly owned subsidiary company in Malaysia, Biocon Sdn. Bhd. (‘Biocon Malaysia’) for development and manufacture of bio-pharmaceuticals. During the year ended March 31, 2014, the Company established Biocon Academy, a not for profit company under Companies Act, 1956 to provide educational courses, training and research in the biosciences, life sciences and all fields of study. On October 31, 2014, the Company incorporated Biocon Pharma Limited, a wholly owned subsidiary of Biocon, to engage in the business of formulation, development and sale of biopharmaceutical products.

MANAGEMENT DISCUSSION AND ANALYSIS

Industry Landscape, Opportunity and Outlook

Global pharmaceutical market

The global economy is still not entirely out of the financial crisis that emerged in the past, yet 2014 was another year of growth for the pharmaceutical industry world over. Global pharmaceutical sales grew by 8% during the year with the developed economies showing an uptick of 7% y-o-y and the emerging markets saw average growth at 11-12%. From a macro standpoint, the developed countries continue to grapple with the legacies of the financial crisis that unfolded in the past and the emerging economies are less dynamic than they earlier used to be. In 2014, the overall demand for medicines continued to expand, the tailwinds included expiring patents, growing use of generic medicines, regulatory transformations, and headwinds being the geopolitical tensions, slowdown in Europe and Japan, and increasing spent on innovation for combating the shrinking healthcare budgets.

The outlook for the pharmaceutical industry, going forward, remains positive. According to IMS Health forecast, drug spending world over will be at least 30% higher at about US$1.3 trillion1 in 2018 over 2013. This market growth of 4-7% will largely be driven by population growth, aging population, the introduction of new specialty medicines and improved accessibility for patients in Pharmerging markets. While the developed markets drive the increased growth, the Pharmerging countries will increase their contribution and would account for nearly 50% of total growth over the next five years. The Pharmerging markets are likely to grow at a CAGR of 8-11% and a large percentage of their volumes (almost 80%) will be through non-branded medicines. Amongst the new drugs, it is worthwhile to mention that of the 41 new drugs approved by FDA in 2014, 11 were biologics. From a therapeutic perspective, 40% of the total growth is likely to be driven by oncology, autoimmune, respiratory, antivirals and immune suppressant therapy areas. The growth is expected to be on the back of new therapies, cures and the administrative improvements in hospitalization. Innovation in cancer drug research will move up the oncology related drugs spending to US$100 bn in 2018, up by over US$35 bn from the 2013 levels. The global drug spending in the diabetes space will exceed US$78 bn with incidence of diabetes accelerating particularly in low- and middle-income countries.

Whilst the increasing life expectancy in recent decades coupled with a growing ageing population is driving demand for pharmaceutical sales, the governments across the world are under tremendous pressure for healthcare budget restrictions. This clearly points towards innovation and medicinal alternatives being the need of the hour to address the cost imperatives in the pharmaceutical sector spend.

Besides the US$121 bn off patent molecule opportunity for generics, the governments are also giving thrust to biosimilars which are likely to drive big savings in healthcare cost. As per a recent study conducted by RAND, biosimilars in the US alone are expected to bring about a US$44 bn reduction in direct spending on biologic drugs between 2014- 2024. With US$48 bn worth of patents on a number of blockbuster biologics slated to expire going forward, they expect the global biosimilar market to continue expanding at a rapid pace. From a geographical perspective, the emerging markets are likely to have the faster adoption rate for biosimilars followed by Europe and other advanced markets and the US.

To sum up, the pharmaceutical industry world over will witness another leap in growth with generics and biosimilars being the foremost to address the need of innovation and combat the rising pharmaceutical spending.

The Indian Pharmaceutical Industry:

Indian pharmaceutical industry, primarily dominated by the generics, is estimated to register a turnover of around US$50 bn at a CAGR of 10% through 2020 (according to PWC analysis, Pharma 2020). The key factors for this double digit growth would be the increasing diagnosis and treatment of chronic ailments, fuelled by ascending trend in the per capita income.

During the current fiscal, the standalone domestic pharmaceutical market reached a size of ~Rs. 864 bn4 (US$13.8 bn) 5. The pharma sales coupled with economic growth and healthcare spending improved and recovered from the slump in the 2013 caused by the market’s reaction to the new drug pricing policy. A significant proportion of the increase is due to high growth in chronic therapies. The demand remained robust in Oncology (23%), Anti-Diabetic (25%), Dermatology (17%) and Ophthalmology and Otology (33%) 4. An uptick was also witnessed in the anti-infective, cardiac and pain management therapies. The domestic market has also downplayed the effect of the new pricing policy owing to price hike taken for the products under DPCO and the volume uptick in the National List of Essential Medicines (NLEM) listed drugs.

Going forward, the domestic market is likely to drive the industry growth further with the government’s increased focus on health and cleanliness. The Government is also supporting the long term growth of the sector through budgetary allocation of Rs. 297 bn6 (US$4.7 bn) 5 for healthcare, and higher investments in allied infrastructure.

The impact of the anticipated expansion of price control list is unlikely to impair the structural growth outlook for the industry. The sector will also give immense opportunity for new brands that will differentiate the product baskets. Given the increasing per capita income coupled with increasing population and changing lifestyle, the industry remains a sustained and attractive business opportunity for pharma companies.

Amongst the global markets, despite stringent requirements, the Indian companies have done fairly well and increased their market shares. As per IMS7, the Indian share in the US generic market by prescription has gone up to 29% in 2014 from 18% in 2009. Indian companies also filed over 735 ANDAs in the year8. Though, US market continues to remain the largest market for India generic exports, it is witnessing a slowdown in product approvals and increased channel consolidation which has impacted overall pricing and margins for the industry. Without being reliant on a single market, the Indian Pharma companies have also expedited their efforts to establish their strong presence in markets such as Brazil, Mexico, Venezuela and other markets in Latin America and also in some east European markets. The Indian pharma companies are in the important phase of their evolution and are likely to take Centre stage with Complex Generics in the US and EU markets. Sustainable growth will depend on the ability of companies to align their product portfolio towards chronic therapies for diseases that are on the rise. Amongst the biosimilar, the Indian companies in the foreseeable future will perhaps have the largest basket of products aimed at emerging countries followed by the developed countries. Though few, but the beginning of Novel Molecular Entity (‘NME’) development by Indian companies is a sign of Indian generic companies moving up in the chain. The outlook for the industry remains strong, both on the domestic and the export segments.

UNSECURED LOAN

PARTICULARS	31.03.2015 (Rs in Million)	31.03.2014 (Rs in Million)
LONG TERM BORROWINGS
Deferred sales tax Liability	64.000	195.000
Other loans and advance
NMITU – CSIR Loan	1.000	1.000
Financial Assistance From DSIR	7.000	14.000
Financial Assistance From DST	42.000	49.000
SHORT TERM BORROWINGS
From banks/Financial institutions
Packing credit foreign currency loan (unsecured)	561.000	0.000
Total	675.000	259.000

INDEX OF CAHREGS:

S. NO.	CHARGE ID	DATE OF CHARGE CREATION/MODIFICATION	CHARGE AMOUNT SECURED	CHARGE HOLDER	ADDRESS	SERVICE REQUEST NUMBER (SRN)
1	10300393	29/06/2011	44,267,000.00	DEPARTMENT OF BIOTECHNOLOGY	6-8TH FLOOR, BLOCK NO. 2, CGO COMPLEX, NEW DELHI - 110003, INDIA	B18143230
2	10255822	12/11/2010	57,081,000.00	DEPARTMENT OF BIOTECHNOLOGY	6-8TH FLOOR, BLOCK NO. 2, CGO COMPLEX, NEW DELHI - 110003, INDIA	B01390137
3	10059940	17/02/2007	650,000,000.00	STATE BANK OF INDIA	OVERSEAS BRANCH, NO. 65, ST. MARKS ROAD, BANGALORE - 560001, KARNATAKA, INDIA	A11660974
4	10060347	17/02/2007	650,000,000.00	STATE BANK OF INDIA	OVERSEAS BRANCH, NO. 65, ST. MARKS ROAD, BANGALORE - 560001, KARNATAKA, INDIA	A11661360
5	80022593	23/07/2010 *	1,773,500,000.00	THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMI  TED	7 M.G.ROAD, BANGALORE, KARNATAKA, INDIA	A90645920

* Date of charge modification

CONTINGENT LIABILITIES:

(Rs. in million)

PARTICULARS	31.03.2015
Claims against the Company not acknowledged as debt (Includes taxation matters under dispute (Direct and Indirect taxes) Rs. 480.000 (March 31, 2013 – Rs. 464.000) The Company is involved in taxation and other disputes, lawsuits, proceedings etc. including patent and commercial matters that arise from time to time in the ordinary course of business. Management is of the view that such claims are not tenable and will not have any material adverse effect on the Company’s financial position and results of operations.)	1241.000
Guarantees
Corporate guarantees given in favour of the Central Excise Department in respect of certain performance obligations of the subsidiaries.
Syngene	242.000
Corporate guarantee given by Syngene in favour of the CED in respect of certain performance obligations of Biocon.	500.000
Corporate guarantees given in favour of a bank towards loans obtained by Subsidiaries
BRL	685.000
Biocon Malaysia	8096.000
Guarantees given by banks on behalf of the Company for contractual obligations of the Company. Guarantees given by banks on behalf of the Company for contractual obligations of the Company. Includes share of the Company in respect of guarantees issued by Neo Biocon (of Rs Nil (March 31, 2014- Rs. 1)	63.000

FIXED ASSETS

Tangible Assets

· Land

· Buildings

· Leasehold Improvements

· Plant and Equipment

· Research and Development Equipments

· Furniture and Fixtures

· Vehicles

Intangible Assets

· Intellectual Property Rights

· Computer Software

· Marketing Rights

UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED AND SIX MONTHS ON 30.09.2015

[RS. IN MILLIONS]

PARTICULARS	3 Months Ended		6 Months Ended
	30.09.2015 [Unaudited]	30.06.2015 [Unaudited]	30.09.2015 [Unaudited]
1. Income from operations
(a) Net sates/income from operations (Net of excise duty)	5271.000	5151.100	10422.100
(b) Other Operating Income	313.800	760.000	1073.800
Total income from operations (net)	5584.800	5911.100	11495.900
Expenses
(a) Cost of materials consumed	2691.300	2214.400	4905.700
(b) Purchases of stock-in trade	191.000	158.600	349.600
(c) Changes in inventories of finished goods. work-in-progress and stock in trade	(410.400)	199.100	(211.300)
(d) Employee benefits expense	764.400	809.600	1574.000
(e) Depreciation and Amortization Expenses	323.600	320.800	644.400
(f) Other Expenses	1281.500	1221.000	2502.500
(g) Recovery Products	(1.700)	(12.500)	(14.200)
Total expenses	4839.700	4911.000	9750.700
Profit/ (Loss) from operations before other Income, finance costs and exceptional Items (1-2)	745.100	1000.100	1745.200
Other Income	403.800	333.100	736.900
Profit/ (Loss) from operations before other income, finance costs and exceptional items (3+4)	1148.900	1333.200	2482.100
Finance Costs	0.800	2.200	3.000
Profit/ (Loss) from ordinary activities after finance cost but before exceptional items (5-6)	1148.100	1331.000	2479.100
Exceptional items	(5130.700)	0.000	(5130.700)
Profit/ (Loss) from ordinary activities before tax (7+8)	6278.800	1331.000	7609.800
Tax expenses	1292.400	296.700	1589.100
Net Profit / (Loss) from ordinary activities after tax (9-10)	4986.400	1034.300	6020.700
Extraordinary item (net of tax expense)	0.000	0.000	0.000
Net Profit / (Loss) for the period (11-12)	4986.400	1034.300	6020.700
Share of profit' (loss) of associates
Minority Interest
Net Profit/ (Loss) after taxes, minority interest and share of profit/(loss) of associates (13+14+15)
Paid up equity share capital (Face Value of Rs 10/-each)	1000	1000	1000
Reserve excluding Revaluation Reserve as per Balance Sheet of previous accounting year	- -	- -	- -
Earnings per share (before extraordinary items) of Rs.10/- each (not annualized):	-	-	-
(a) Basic	24.93	5.17	30.1
(b) Diluted	24.93	5.17	30.1
PARTICULARS OF SHAREHOLDING
A. Public Shareholding
- Number of shares	74230413	74339776	74230413
- Percentage of shareholding	37.12	37.17	37.12
Promoters and Promoter group shareholding
a) Pledged / Encumbered
- Number of shares	50000	50000	50000
- Percentage of shares (as a % of the total shareholding of Promoter & Promoter group)	0.04	0.04	0.04
- Percentage of shares (as a % of the total Share Capital of the Company)	0.03	0.03	0.03
b) Non Encumbered
- Number of shares	121998446	121998446	121998446
- Percentage of shares (as a % of the total shareholding of Promoter & Promoter group)	99.96	99.96	99.96
- Percentage of shares (as a % of the total Share Capital of the Company)	60.99	60.99	60.99

	PARTICULARS	3 Months Ended 30.09.2015
B	Investor complaints (Nos.)
	Pending at the beginning of the quarter	-
	Received during the Quarter	6
	Disposed of during the quarter	6
	Remaining unresolved at the end of the quarter	-

(RS. IN MILLIONS)

SOURCES OF FUNDS	30.09.2015 [Unaudited]
I. EQUITY AND LIABILITIES
(1) Shareholders' Funds
(a) Share Capital	1000.000
(b) Reserves & Surplus	30895.000
Total Shareholders’ Funds	31895.000
(2) Share Application Money Pending Allotment	0.000
(3) Non-Current Liabilities
(a) long-term borrowings	39.100
(b) Deferred tax liabilities (Net)	324.300
(c) Other long term liabilities	1298.500
(d) long-term provisions	0.000
Total Non-current Liabilities (3)	1661.900
(4) Current Liabilities
(a) Short term borrowings	589.700
(b) Trade payables	3929.400
(c) Other current liabilities	904.600
(d) Short-term provisions	1438.400
Total Current Liabilities (4)	6862.100
TOTAL	40419.000
II. ASSETS
(1) Non-current assets
(a) Fixed Assets	9765.500
(b) Non-current Investments	795.000
(c) Deferred tax assets (net)	0.000
(d) Long-term Loan and Advances	7182.000
(e) Other Non-current assets	2031.800
Total Non-Current Assets	19774.300
(2) Current assets
(a) Current investments	3602.800
(b) Inventories	4576.400
(c) Trade receivables	5232.200
(d) Cash and cash equivalents	5826.700
(e) Short-term loans and advances	1188.000
(f) Other current assets	218.600
Total Current Assets	20644.700
TOTAL	40419.000

SEGMENTWISE REVENUE, RESULTS AND CAPITAL EMPLOYED UNDER CLAUSE 41 OF THE LISTING AGREEMENT FOR THE QUARTER AND SIX MONTHS ENDED 30.09.2015

(Rs. In Millions)

Particulars	3 Months Ended		6 Months Ended
	30.09.2015 [Unaudited]	30.06.2015 [Unaudited]	30.09.2015 [Unaudited]
1. Segment Revenue
Pharma	5811.200	6038.700	11849.900
Contract Research and Manufacturing services	2615.200	2335.500	4950.700
Total	8426.400	8374.200	16800.600
Less : Inter Segment Revenue	54.400	44.300	98.700
Net Sales	8372.000	8329.900	16701.900
2. Segment Result
Profit before tax and interest from each segment
Pharma	2428.200	2641.900	5070.100
Contract Research and Manufacturing services	957.700	799.600	1757.300
Total	3385.900	3441.500	6827.400
Less : Interest	29.300	44.200	73.500
Depreciation and Amortization	596.100	578.000	1174.100
Unallocated Corporate Expense	1409.300	1319.700	2729.000
Unallocated Corporate income	(246.000)	(235.200)	(481.200)
Profit from ordinary activities before tax	1597.200	1734.800	3332.000
3. Capital Employed (Segment Assets-Segment Liabilities)
Pharma	18647.400	18606.500	18647.400
Contract Research and Manufacturing services	9593.900	9105.700	9593.900
Unallowable	11093.200	8101.500	11093.200
Minority	(3074.900)	(1837.00)	(3074.900)
Total	36259.600	33976.700	36259.600

Note:

1. The unaudited financial results of the Company and the unaudited consolidated financial results for the three month period ended September 30, 2015 have been reviewed by the Audit Committee and approved by the Board of Directors of the Company at their meeting held on October 20, 2015. The above results have been subjected to limited review by the statutory auditors of the Company.

2. During the year ended March 31, 2012, based on an evaluation of the prevalent regulatory framework, industry practices and ethics/governance requirements relating to clinical trials and the regulatory submissions already initiated /filed, Biocon SA, a wholly owned subsidiary of the Company (together referred to as 'Biocon'), had determined that it had continuing obligations to complete clinical development and regulatory activities relating to Biocon's Biosimilar Insulin portfolio comprising of Biosimilar Insulin and Biosimilar Insulin Analogs. Accordingly, pursuant to the termination of the customer contract in March 2012, Biocon deferred the remainder of the upfront amounts received from the customer, to be recognized in the consolidated statement of profit and loss in subsequent periods in line with costs incurred towards such clinical trials and development activities.

In February 2013, Biocon SA entered into an agreement with another customer for the global development and commercialization of Biosimilar Insulin Analogs (the Agreement), granting the customer exclusive rights to commercialize Biosimilar Insulin Analogs in certain countries. The clinical development and regulatory activities in respect of such Biosimilar Insulin Analogs is now being carried out in accordance with the Agreement As such, Biocon has therefore determined that it does not have continuing obligations for clinical trials and development activities in respect of Biosimilar Insulin Analogs. Accordingly, based on an allocation in proportion of estimated future development spends on these programs, Rs. 21,501 million of deferred revenues allocated to Biosimilar Insulin Analogs (net of amounts already recognized in the consolidated statement of profit and loss) was recognized as an exceptional income in the consolidated statement of profit and loss for the year ended March 31, 2013. Considering that Biocon has continuing obligations in respect of Biosimilar Insulin, the remainder of deferred amounts as at March 31, 2013, of Rs. 2800.100 million, continues to be recognized in the consolidated statement of profit and loss in line with costs to be incurred towards clinical trials and development activities of Biosimilar Insulin. For the quarter ended September 30, 2015 and June 30, 2015, of the deferred amounts, Rs. 15.600 million and Rs 34.800 million, respectively have been netted off against expenses incurred towards such clinical trial and development activities.

The statutory auditors of the Company have drawn an Emphasis of Matter in this regard, in their limited review report on the consolidated unaudited financial results.

3. Exceptional items for the quarter ended and year ended March 31, 2015 comprise of the following:

a. During the quarter ended September 30, 2014, Biocon Research Limited ('BRL'), a wholly owned subsidiary of the Company purchased from GE Equity International Mauritius, 7.69% equity stake in Syngene International Limited ('Syngene'), a research services subsidiary of the Company for a consideration of Rs 2153.800 million and also subscribed to additional equity shares in Syngene pursuant to Rights Issue thereby taking BRL's shareholding in Syngene to 10.93%. The resultant difference of Rs. 1663.500 million, between the aggregate consideration paid and the net assets of Syngene as on the date of purchase/Rights Issue was recorded as goodwill in the consolidated financial results for the quarter ended September 30, 2014.

On September 18, 2014, BRL entered into a definitive agreement with Silver Leaf Oak (Mauritius) Limited ('Silver Leaf) to sell 10% equity stake in Syngene for a consideration of Rs. 3800.000 million. In January 2015, Silver Leaf assigned its rights and obligations to purchase the aforesaid 10% equity stake in Syngene to IVF Trustee Company Private Limited ('1VF'), a fund advised by India Value Fund Advisors. The gain arising on such sale of shares to IVF amounting to Rs. 1347.700 million, net of transaction cost, was recorded as exceptional item in the consolidated financial results.

Tax incidence in the hands of BRL on the sale of shares has been fully offset against business losses of BRL. BRL had created deferred tax asset of Rs. 99.000 million as at December 31, 2014 which was utilised on consummation of such sale.

b. Considering the financial position and uncertain future cash flows of Vaccinex Inc, the Company on a prudent basis, created a provision of Rs. 218.100 million for diminution other than temporary, in the value of its investments in Vaccinex Inc, in the standalone and consolidated financial statements.

c. The Company transferred equity shares of Syngene constituting 1% of equity capital at cost to Biocon Limited Employees Welfare Trust, a Trust formed for administration of a Scheme for the benefit of employees of the Group (excluding the employees of Syngene). Accordingly, the Company recorded a loss of Rs 79.000 million in the consolidated financial results for the quarter and year ended March 31, 2015.

4. Exceptional items for the quarter ended and period ended September 30, 2015 comprise of following:

a. In March 2010, Biocon SA, a wholly owned subsidiary of the Company, acquired marketing rights of T1H product for US and Canada region ('Territory') from M/s CIMAB, Cuba.

Pursuant to ongoing efforts to license such product to potential partners in the USA, Biocon S.A was informed of the need to obtain prior authorization from the Office of Foreign Assets Control, USA ('OFAC'). The US regulations restrict any U.S. company or a subsidiary of a U.S. company from engaging in any transaction in which a Cuban entity has at any time since July 1963 had any interest whatsoever, whether direct or indirect without prior authorization from OFAC. Biocon SA evaluated options to obtain waiver from this requirement. However, during the current quarter, the outcome was not favourable. Consequent to such developments and after evaluating the requirements of OFAC and related timelines, management concluded that the same has now created an uncertainty to license this product for development and commercialization in the Territory.

Hence, during the quarter ended September 30, 2015, Biocon SA has recorded an impairment of the carrying value of the aforesaid intangible asset amounting to Rs 1078.000 million. The same has been recorded as an exceptional item in the consolidated financial results for the quarter and six months ended September 30, 2015. The Company holds marketing rights in other territories including Europe where these restrictions do not apply and continues to develop the molecule for such territories.

b. During the quarter ended September 30, 2015, Syngene completed its Initial Public Offering (IPO), through an offer for sale of 22,000,000 equity shares of 10 each, by the Company. Post the sale, the Company's holding in equity shares of Syngene has reduced from 84.54% to 73.54%. The equity shares of Syngene were listed on National Stock Exchange of India Limited and BSE Limited on August 11, 2015. Gain arising from such sale of equity shares, net of related expenses and cost of equity shares, amounting to Rs. 5130.700 million and Rs 4148.000 million has been recorded as an exceptional item in the standalone and consolidated financial results, respectively. Consequential tax of Rs. 1042.000 million has been recorded on such gains in the standalone and consolidated financial results.

5. The Company has acquired the business assets of the pharmaceutical manufacturing unit of M/s. Acacia Lifesciences Private Limited located at Vishakapatnam with effect from October 01, 2015 on a going concern basis.

6. Other income in the standalone results of the Company for the quarter and six months ended September 30, 2014 and year ended March 31, 2015, includes interim dividend income of Rs. 997.400 million received from Syngene, a subsidiary of the Company.

7. Other operating income for the quarter ended June 30, 2015 and six months period ended September 30, 2015 {standalone and consolidated) includes Rs 446.300 million towards one time compensation from a customer to absolve the customer from capacity reservation fees.

8. For the purpose of administration of the employee stock option plans of the Company, the Company had established the Biocon India Limited Employee Welfare Trust ('The ESOP Trust'). Linder the erstwhile SEBI (Employee stock option scheme and employee stock purchase scheme) Guidelines, 1999, financial statements of the Company were prepared as if the Company itself is administering the ESOP scheme.

However, consequent to SEBI (Share Based Employee Benefits) Regulations, 2014 issued on October 28, 2014, the ESOP Trust is not consolidated in the standalone and consolidated financial statements effective as at and for the year ended March 31, 2015. As at September 30, 2014, total assets, total liabilities and reserves and surplus of the ESOP Trust amounting to Rs. 9,52.200 million, Rs. 29.200 million and Rs. 9,23.000 million, respectively were included in the standalone and consolidated financial statements of the Company.

9. Segment Reporting:

a. Standalone financial results: The Company operates in a single business segment of biopharmaceuticals.

b. Consolidated financial results: The primary segment reporting has been performed on the basis of business segments. Segments have been identified and reported based on the nature of products, risks and returns, organizational structure and internal financial reporting systems.

10. Prior period / year figures have been reclassified wherever required to conform to the classification of the current period.

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.66.09
UK Pound	1	Rs.101.04
Euro	1	Rs.70.86

INFORMATION DETAILS

Information Gathered by :	PRT
Analysis Done by :	KRN
Report Prepared by :	MTN

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	9
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	9
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILITY	1~10	8
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	8
--RESERVES	1~10	8
--CREDIT LINES	1~10	8
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	YES
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		75

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
--	NB	New Business	--

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.