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Biocon Ltd.

BSE: 532523 Sector: Health care
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OPEN 342.55
VOLUME 48308
52-Week high 420.25
52-Week low 314.90
P/E 457.15
Mkt Cap.(Rs cr) 39,518
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 342.55
CLOSE 337.80
VOLUME 48308
52-Week high 420.25
52-Week low 314.90
P/E 457.15
Mkt Cap.(Rs cr) 39,518
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Biocon Ltd. (BIOCON) - Director Report

Company director report

Dear Shareholders

We are pleased to present the Forty-Second (42nd) Annual Report on thebusiness and operations along with the audited standalone and consolidated financialstatements and the Auditor's report of your Company for the financial year ended March31 2020.


Standalone financial highlights

Consolidated financial highlights

FY20 FY19 FY20 FY19
Total revenue 21901 18946 65286 56588
Expenses 18016 16703 53812 46394
Share of profit/(loss) of joint venture and associates net (289) 9
Profit before tax and exceptional items 3885 2243 11185 10203
Exceptional items net 1597 1987 675 1946
Profit before tax 5482 4230 11860 12149
Tax expense 1119 447 3151 2123
Non-controlling interest 1227 973
Profit for the year from discontinued operations 46 1144
Profit for the year 4409 4927 7482 9053
Other comprehensive income net (77) 131 (1314) (552)
Total comprehensive income 4332 5058 6168 8501
Earnings per Share (EPS) after exceptional items 3.72 4.17* 6.32 7.65*

* Adjusted for the effect of bonus shares

Standalone and Consolidated Financial Statements

The standalone and consolidated financial statements of your Company have been preparedin accordance with the Indian Accounting Standards (‘Ind AS') as notified under theCompanies (Indian Accounting Standards) Rules 2015 as amended. The financial highlightsand the results of the operations including major developments have been furtherdiscussed in detail in the Management Discussion and Analysis Report.

Further a statement containing the salient features of the financial statements of oursubsidiaries pursuant to sub-section 3 of Section 129 of the Companies Act 2013 ('theAct') in the prescribed form AOC-1 is appended as Annexure 1 to the Board's report. Thestatement also provides the details of performance and the financial positions of each ofthe subsidiaries.

State of Affairs

The highlights of your Company's Standalone Financial performance are as under:

Revenue from operations for FY20 stood at R 19884 mn compared to R17857 mn for FY19. Other income for FY20 amounted to R 2017 mn as against R1089 mn in FY19 primarily comprised of income earned from providing utility servicesto subsidiaries R 1256 mn foreign exchange gain R 317 mn income oninvestments at R 304 mn and dividend income from a subsidiary at R 140 mn.

Core operating margins (EBIDTA margins net of licensing impact of forexR&D and dividend from subsidiaries) was 25% compared to 21% in the previous financialyear primarily driven by higher volumes with better margins in the Small Moleculesbusiness.

Profit before tax and exceptional items (excluding discontinued operations)stood at R 3885 mn compared to R 2243 mn in FY19. Effective tax rate (ETR)for the year before exceptional item and discontinuing operations was 20% in line withFY19.

Profit for the year stood at R 4409 mn (including exceptional items R1597 mn) compared to R 4927 mn (including exceptional item R 1987 mn)for FY19.

The highlights of your Company's Consolidated Financial performance are as under:

During the year our consolidated revenues registered a growth of 15% to R65286 mn from R 56588 mn in FY19. From a segment perspective Biologicsrecorded an annual growth of 29% while Small molecules registered a growth of 18% andResearch services grew by 10%.

Core margins (EBITDA margins net of licensing forex and R&D) stood at33% compared to 32% for FY 19.

Profit for the year including non-controlling interest stood at R 8709mn compared to R 10026 mn for FY19.

Effective tax rate (ETR) for the year before exceptional item was 22% (19%in FY19).

Exceptional items (Standalone and Consolidated) and Discontinued Operations(Standalone):

Restructuring of Biologics Business (Standalone and Consolidated Financial Statements)

During the year pursuant to Group restructuring of the Biologics business theCompany has transferred the manufacturing and commercialisation rights of BiosimilarsInsulins and drug substance manufactured in the GPP facility under the Biologics segmenteffective May 01 2019 for a consideration of R 7054 mn and the BrandedFormulations India ("BFI") business effective August 01 2019 for aconsideration of R 621 mn to Biocon Biologics India Limited.

Accordingly results of Biologics and BFI business in FY 20 including gain on transferof Rs. 46 mn net of tax and comparatives for previous year has been disclosed asdiscontinued operations in the standalone financial statements.

On April 01 2019 the Board of Directors ("The Board") of the Companyapproved a scheme of Amalgamation (‘the Scheme') of Biocon Research Limited("BRL") a wholly owned subsidiary with Biocon Biologics India limited("BBIL") a subsidiary with an appointed date of April 01 2019. During thequarter ended March 31 2020 Bengaluru Bench of National Company Law Tribunal("NCLT") has approved the scheme. The Company received 3106 equity shares ofRs. 10 each of BBIL for every 1 equity share held in BRL resulting in the issue of155300000 equity shares of Rs. 10 each. The merger did not have any material impact onthe standalone and consolidated financial statements.

During the year the Company sold its investment in the equity shares of BioconBiologics Limited United Kingdom ("BUK") a wholly owned subsidiary to BBIL fora consideration of Rs. 10810 mn and received dividend of Rs. 456 mn from BUK. The gainarising from such sale of equity shares including dividend income amounting to Rs. 820mn is recorded as an exceptional item in the standalone financial statements.Consequential tax of Rs. 166 mn is included within the tax expense in the standalone andconsolidated financial statements.

Transfer of Fusion Proteins (Standalone Financial Statements)

During the year the Company granted a license to develop manufacture andcommercialize fusion proteins to Bicara Therapeutics Inc a wholly owned subsidiary. Thegain on such licensing of Rs. 550 mn has been recorded as an exceptional income in thestandalone financial statements. Consequential tax impact of Rs. 192 mn has been recordedin the standalone and consolidated financial statements within tax expense.

Sales of Syngene shares (Standalone Financial statements)

During the year Biocon Limited Employees Welfare Trust ("RSU Trust")sold 812249 equity shares of Syngene in the open market. Pursuant to the consolidation ofthe RSU trust with the standalone financial statements such gain arising from the sale ofthe equity shares of Syngene amounting to Rs. 259 mn has been recorded as an exceptionalitem in the standalone financial statements.

During FY 19 the Company along with its subsidiary Biocon Research Limited(‘BRL') sold 3.3% stake in Syngene. Gain on such sale net of expenses amounting to Rs1987 mn was recorded as exceptional gain in the standalone financial statements.

Fire incident in Syngene (Consolidated Financial statements)

Pursuant to a fire incident on December 12 2016 at Syngene certain fixed assetsinventory and other contents in one of the buildings were damaged. Syngene had recorded aloss of Rs. 1057 mn arising from such incident and received the disbursements of Rs.1770 mn from the insurance company against the loss till March 31 2020. Theaforementioned loss and the disbursements from the insurance claim has been presented on anet basis as s 713 mn under exceptional items in the standalone and consolidatedfinancial statements. Consequential tax and non-controlling interest of Rs. 254 mn and Rs.137 mn respectively is included within tax expense and non-controlling interest in theconsolidated financial statements.

Investment in Associate (Consolidated Financial statements)

During FY 19 Equillium initiated its initial public offering (IPO) process andconsequently had changes in its Board composition which resulted in loss of significantinfluence over the investee. The Company fair valued its investment on the date of loss ofsignificant influence which resulted in a gain of Rs 1762 mn net of tax expensesof R 184 mn which was disclosed as an exceptional item.

Impact of the COVID-19 pandemic

The COVID-19 pandemic has intensified into a global crisis driving the nation toenforce lock-down of all economic activity for the last few months. We remain committed tothe health and safety of our employees and their families as well as business continuityto safeguard the interests of our patients partners customers and other stakeholders.The impact of the pandemic on our business performance is outlined in the Financial FAQsand under the Management and Discussion Analysis Report.

Subsidiaries and Joint Ventures

Your Company has 16 subsidiaries and 1 joint venture as on March 31 2020. A report onthe performance and financial position of each subsidiary and joint venture is outlined inAOC-1 which is annexed to this report as Annexure - 1.

In accordance with the provisions of Section 136 of the Companies Act 2013 and theamendments thereto read with the SEBI Listing Regulations the audited financialstatements including the consolidated financial statements and related information of theCompany and financial statements of the subsidiary companies is available on our

The Company has also formulated a policy for determining ‘material' subsidiariespursuant to the provisions of SEBI Listing Regulations. The policy is available at thewebsite of the Company at

A report of the salient features and a summary of the financial performance of each ofthe subsidiaries is presented as below:

Syngene International Limited India

Syngene International Limited is an innovation-focused global discovery developmentand manufacturing organisation providing integrated scientific services to thepharmaceutical biotechnology nutrition animal health consumer goods and specialtychemical industries around the world. Its services include integrated drug discovery anddevelopment capabilities in chemistry biology in vivo and in vitro pharmacologytoxicology custom synthesis process R&D cGMP manufacturing formulation andanalytical development along with clinical development services. Syngene is a publiclimited company incorporated and domiciled in India and has its registered office inBengaluru Karnataka India. The Company's shares are listed on the Bombay Stock Exchange(BSE) and the National Stock Exchange (NSE) in India.

During the year ended March 31 2020 Syngene (consolidated) registered a revenuegrowth of 10% to R 20935 mn (FY19 - R 19007 mn). EBIDTA margin for theyear was 33 % with the operating margin at R 6995 mn (FY19 - R 6119 mn)registering a growth of 14%.

Syngene USA Inc.

Syngene USA Inc. a wholly owned subsidiary of Syngene incorporated on August 24 2017with its registered office in the State of Delaware United States of America (USA). Thecompany provides sales and business support services to the operations of Syngene in USA.During FY20 Syngene USA Inc posted a revenue of R 104 mn and reported a netprofit of R 6 mn.

Biocon Biologics India Limited India

Biocon Biologics India Limited ("BBIL") was incorporated on June 08 2016 inIndia with an objective to set up greenfield biosimilar biologics facilities. During theyear the Company transferred its shareholding in Biocon Biologics Limited("BUK") to BBIL.

Biocon Biologics is uniquely positioned as a fully integrated global ‘pure play'biosimilars organization and aspires to transform patient lives through innovative andinclusive healthcare solutions. BBIL's portfolio of biosimilar molecules includes a richpipeline of approved and in-development biosimilars; outcome of its world class R&Dand global scale manufacturing expertise. BBIL has commercialized three of its biosimilarsin developed markets like EU U.S. Japan and Australia. It is a leading global insulinsplayer with over 15 years of experience in addressing the needs of patients with diabeteshaving provided over 2 billion doses of human insulin worldwide.

During the year with an objective to consolidate the entire Biosimilars business underBBIL the Company transferred the existing biosimilar business approved by the Board on aslump sale basis effective May 1 2019 to BBIL. Further the Board also approved thetransfer of its Branded Formulations India (BFI) Business on a ‘going concern' basisto BBIL effective August 1 2019. The transfer of such BFI business on a slump sale basiswill lead to a consolidation of the marketing and manufacturing activities relating to theBFI business under a single entity with a common leadership and achieve synergies andvalue creation accretion for the group.

During the year Biocon Research Limited a wholly owned subsidiary of the Company wasamalgamated with BBIL pursuant to the scheme of merger sanctioned by the Bengaluru Benchof National Company Law Tribunal on February 4 2020 effective from April 1 2019.

During the year BBIL had received a primary investment from Activ Pine LLP("Investor") for R 5360 Mn that translates to a 2.44% minority stake forthe Group.

The infusion by the Investor will enable the expansion of Biosimilars' R&D andmanufacturing capabilities to meet the growing demands of patients worldwide fuellingfuture growth of the business.

During the year ended March 31 2020 BBIL posted revenue growth of 33% to Rs. 17911mn (FY19 - Rs. 13451 mn) and a net profit of Rs. 2883 mn (FY19 – Rs. 1792 mn).BBIL has prepared its financial statements as per the applicable Indian AccountingStandard under common control. Accordingly previous year numbers are restated.

Biocon Biologics Limited UK

Biocon Biologics Limited ("BUK") which was incorporated in the United Kingdomon March 2016 is a wholly owned subsidiary of BBIL. In addition to the biosimilarPegfilgrastim which was launched in the United States under the brand name Fulphilabiosimilar Trastuzumab branded as Ogivri TM was commercialised in the European union andthe United States during the year.

During the year ended March 31 2020 BUK earned Rs. 12458 mn as revenue and reporteda net profit of Rs. 2631 mn as against revenue of Rs. 8044 mn and net profit of Rs.3276 mn in FY19. This growth was a combination of increase in base business as well asthe launch of co-developed products in new territories.

Biocon Sdn. Bhd. Malaysia

Biocon Sdn. Bhd. Malaysia is a wholly owned subsidiary of BUK. Biocon Sdn. Bhd. wasestablished with an objective to set up the group's first overseas manufacturing facilityat Malaysia. The facility is located within BioXcell a biotechnology park in IskandarPuteri Johor. The facility is approved for manufacture of Human insulin and Glargine drugproduct from National Pharmaceutical Regulatory Authority ("NPRA") MalaysiacGMP certification from HPRA ("EMA") and received EIR from U.S. Food and DrugAdministration ("USFDA"). Biocon Sdn. Bhd. holds the commercial and developmentrights of human insulin and analogs and continues the related Research and Developmentactivities.

During the year Biocon Sdn. Bhd. reported a total revenue of Rs. 2740 mn and net lossof Rs. 2794 mn in FY20 against a total revenue of Rs. 3029 mn and a net loss of Rs.1158 mn in FY19.

Biocon Healthcare Sdn. Bhd. Malaysia

Biocon Healthcare Sdn. Bhd. ("BHSB") was incorporated in August 2017. TheCompany had approved the winding up of operations of BHSB a wholly-owned subsidiary ofthe Company as the entity has no significant operations. Further BUK expressed interestto acquire BHSB Malaysia to set up marketing operations for biologics in Malaysiainstead of setting up a new entity in Malaysia. Hence the Company transferred itsshareholding in BHSB to BUK a step down subsidiary of the Company.

During the year ended March 31 2020 BHSB earned Rs. 4 mn as revenue and reported anet loss of Rs. 8 mn.

BHSB was set up to carry on the business as importers and distributors of drugs anddevices in the Malaysian market.

Biocon Biologics Inc. USA

Biocon Biologics Inc USA ("BBIU") is a subsidiary of Biocon BiologicsLimited UK which was set-up during the year to undertake all activities relating topharmaceuticals bio-pharmaceuticals and biologics products i.e. commercializationdistribution etc. in the USA and other geographies.

BBIU is yet to commence commercial operations.

Biocon Pharma Limited India

Biocon Pharma Limited ("BPL") is a wholly owned subsidiary of the Company.BPL is engaged in the development and manufacture of generic formulations for sale inglobal markets with a focus on opportunities in the US and EU. BPL has setup itsformulations manufacturing facility for oral solid dosages at Bengaluru. BPL hascapitalised R 361 Crores in the March 2020.

Commercial operations have commenced in March 2020.

Biocon Pharma Inc USA

Biocon Pharma Inc. ("BPI") a wholly owned subsidiary of Biocon PharmaLimited was incorporated in July 2015 in USA. BPI is engaged in the commercialization ofgeneric formulations in the United States. During the financial year ended March 31 2020BPI revenues more than doubled from FY 19 driven by the full year results of the launch ofAtorvastatin in FY 19.

BPI registered a turnover of R 3923 mn and reported a net profit of R 277mn against a revenue of R 1574 mn and a net profit of R 23 mn in FY 19.

Biocon Pharma UK Limited UK

Biocon Pharma UK Limited ("BPUK") a wholly owned subsidiary of Biocon PharmaLimited was incorporated in December 2018 in the United Kingdom. BPUK is engaged in thecommercialization of generic formulations in the United Kingdom. As on March 31 2020BPUK has not commenced its commercial operations. During the financial year ended March31 2020 BPUK reported a loss of R 45 mn.

Biocon Pharma Ireland Limited Ireland

Biocon Pharma Ireland Limited ("BPIL") a wholly owned subsidiary of BioconPharma Limited was incorporated in December 2018 in Ireland. BPIL is engaged incommercialization of generic formulations in Ireland. As on March 31 2020 BPIL is yet tocommence commercial operations. During the financial year ended March 31 2020 BPILreported a loss of R 16 mn.

Biocon Biosphere Limited India

During the year the Company decided to set up a new greenfield facility in Vizag tode-risk fermentation manufacturing at Bengaluru. Consequently for this greenfieldfacility in Vizag Biocon Biosphere Limited ("BBL") was incorporated onDecember 24 2019 as a wholly owned subsidiary of the Company under the Companies Act2013. The registered office of BBL is situated at 20th KM Hosur Road Electronic CityBengaluru Karnataka – 560 100 India.

As on March 31 2020 BBL has not commenced commercial operations.

Biocon Academy India

Biocon Academy spearheads Biocon Group's CSR initiatives in technical and professionaleducation. The Academy was established as a Centre of Excellence for Advanced Learning inBiosciences in 2014. Biocon Academy leverages the rich industry experience of Biocon itssubject matter expertise alongside international Education Partners such as Keck GraduateInstitute of Claremont California (USA) and BITS-Pilani India to deliverindustry-oriented advanced learning and skill building programs for pharma and biotechgraduates. Biocon Academy is dedicated exclusively to industry-oriented bioscienceseducation. The programs offered by the Academy aim to empower the Biotechnology andEngineering graduates with advanced learning industrial proficiency and job-skillsdevelopment the essential building blocks for a promising career in the Biotech industry.

Bicara Therapeutics Inc. USA

Bicara Therapeutics Inc. USA ("Bicara") a wholly owned subsidiary of theCompany was incorporated in December 2018 in the United States of America. Bicara isanchoring the development of a pipeline of functional antibodies that exploit the recentadvances in immuno-oncology.

During the year the Company to further develop and market Fusion MAB moleculesout-licensed the rights related to Fusion MAB molecules to Bicara for further developmentand commercialization

During the financial year ended March 31 2020 Bicara recorded a revenue of Rs. 31 mn(FY 19- Nil) and reported a net loss of Rs. 649 mn (FY 19 - Nil).

Biocon SA Switzerland

Biocon SA ("BSA") a wholly owned subsidiary of the Company is primarilyengaged in identifying and developing novel molecules into commercial products orlicensable assets through strategic partnerships.

During the year BSA registered a net loss of Rs. 32 mn against a profit of Rs. 40 mnin FY 19.


Biocon FZ LLC is a wholly owned subsidiary of the Company based in Dubai. Incorporatedin June 2015 Biocon FZ LLC was established as a marketing entity for pharmaceuticalproducts to target markets in the Middle East and GCC. During the year ended March 312020 Biocon FZ LLC earned Rs. 834 mn in revenue and reported a net profit of Rs. 65 mnagainst a revenue of Rs. 1729 mn and a net loss of Rs. 23 mn in FY 19.

Neo Biocon FZ LLC UAE

Neo Biocon FZ LLC UAE (‘NB') is a joint venture (‘JV') based in Dubai.Incorporated in 2007 NB was established as a market entity for the pharmaceuticalproducts to target markets in the Middle East and GCC. During the year ended March 312020 NB reported Rs. 786 mn as revenue and a net loss of Rs. 590 mn as against a revenueof Rs. 168 mn and a net profit of Rs. 18 mn in FY 19.

Bonus Issue

During the year the Board at its meeting held on April 25 2019 approved andrecommended the issue of bonus shares in the ratio of 1 equity share for every 1 equityshare held as on the record date to commemorate the 40th anniversary of the company. Themembers approved the issue of bonus shares through postal ballot. Thereafter the Companyallotted 600000000 equity shares of face value Rs 5 each and these bonus shareswere credited to the accounts of eligible members during June 2019.


Your Company is committed towards enhancing shareholder value for its investors. TheBoard has pursued a policy of providing a consistent distribution of return. Howeverafter careful consideration and taking a holistic view of the unprecedented circumstancesof the COVID-19 pandemic the Company has considered it prudent not to recommend thedividend for FY 2019-20 in order to maintain its liquidity position.

Dividend Distribution Policy

In terms of Regulation 43A of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (‘SEBI Listing Regulations') the Board hasformulated and adopted the Dividend Distribution Policy. The Policy is annexed as Annexure2 to the Board's report and is also available on our website at

Management's Discussion and Analysis

Pursuant to Regulation 34 of the SEBI (Listing Regulations) the Management Discussionand Analysis Report for the year is presented in a separate section forming part of theAnnual Report.

Corporate Governance

Your Company is committed to maintain the highest standards of corporate governance. Webelieve in adherence to good corporate practices implement policies and guidelines anddevelop a culture of the best management practices and compliance with the law coupledwith the highest standards of integrity transparency accountability and ethics in allbusiness matters to enhance and retain investor trust long-term shareholder value andrespect minority rights in all our business decisions.

The Corporate Governance Report along with the requisite certificate from the statutoryauditors of the Company confirming compliance with the conditions of corporate governanceas stipulated under SEBI Listing Regulations forms part of the Annual Report.

Business Responsibility Report

As mandated by the Securities and Exchange Board of India (‘SEBI') the BusinessResponsibility Report (‘BRR') forms part of the Annual Report. The report on the nineprinciples of the National Voluntary Guidelines on social environmental and economicresponsibilities of business as framed by the Ministry of Corporate Affairs is provided inrelevant sections of the BRR.

Employee Stock Option Plan (ESOP)

Biocon's Employee Stock Option Plan ("the Plan") is administered by theBiocon India Limited Employees' Welfare Trust (ESOP Trust) under the instructions andsupervision of the Nomination and Remuneration Committee (NRC). The Plan is implementedthrough a trust route in accordance with SEBI (Share Based Employee Benefits) Regulations2014 ("SEBI SBEB Regulations") with a view to attracting and retaining the besttalent encouraging employees to align individual performances with Company objectivesand promoting increased participation by them in the growth of the Company.

During the year a total of 3670776 shares were transferred from the ESOP Trust tothe eligible employees under the Company's prevailing ESOP plan. As on March 31 2020 theESOP Trust held 14811872 equity shares of the Company. During the year ended March 312020 there has been no material change in the Company's existing plan and the plan is incompliance with SEBI SBEB Regulations.

The applicable disclosures as stipulated under the SEBI SBEB Regulations as on March31 2020 are appended herewith as Annexure 3 to the Board's report. The details of thePlan form part of the notes to accounts of the Financial Statements in this Annual Report.The Company has received a certificate from the statutory auditors that the scheme hasbeen implemented in accordance with SEBI SBEB Regulations and the resolutions passed bythe shareholders. The certificate would be placed at the Annual General Meeting forinspection by the members.


Your Company has not accepted any deposit and as such no amount of principal andinterest were outstanding as at the Balance Sheet date.

Particulars of Loans Guarantees or Investments

Details of loans guarantees and investments covered under the provisions of Section186 of the Companies Act 2013 form part of the notes to the Financial Statements.

Policy on Directors' Appointment and Remuneration

The Company's current policy is to have an appropriate mix of Executive and IndependentDirectors to maintain the independence of the Board and separate its functions ofgovernance and management.

For the purpose of selection of any Director the Nomination and Remuneration Committeeidentifies persons of integrity who possess relevant expertise experience and leadershipqualities required for the position. The Committee also ensures that the incumbent fulfilssuch criteria with regard to qualifications positive attributes independence age andother criteria as laid down under the Act Listing Regulations or other applicable laws.The Board has on the recommendation of the Nomination and Remuneration Committee framed apolicy on the remuneration of Directors Key Managerial Personnel and other Employees asrequired under sub-section (3) of Section 178 of the Companies Act 2013.The policy of theCompany on director's appointment and remuneration is uploaded on to the Company's websiteand available at

As on March 31 2020 the Board of Directors comprised of nine members including twowomen members consisting of two Executive Directors two Non-Executive Directors andfive Independent Directors. The Board periodically evaluates the need for change in itscomposition and size.

Board Diversity

Adequate diversity on the Board is essential to meet the challenges of businessglobalisation rapid deployment of technology greater social responsibility increasingemphasis on corporate governance and enhanced need for risk management. The Board enablesefficient functioning through differences in perspective and skill and fostersdifferentiated thought processes at the back of varied industrial and managementexpertise gender knowledge and geographical backgrounds. The Board recognises theimportance of a diverse composition and has adopted a Board Diversity Policy which setsout its approach to diversity. The policy is available at the website of the Company at

Declaration by Independent Directors

All Independent Directors of the Company have submitted the requisite declarationsconfirming that they meet the criteria of independence as prescribed under Section 149(6)of the Act read with Regulation 16 and 25(8) of SEBI Listing Regulations. The IndependentDirectors have also confirmed that they have complied with Schedule IV of the Act and theCompany's Code of Conduct.

Independent Directors have also confirmed that they are not aware of any circumstanceor situation which exists or may be reasonably anticipated that could impair or impacttheir ability to discharge their duties. Further the Independent Directors have alsosubmitted their declaration in compliance with the provision of Rule 6(3) of Companies(Appointment and Qualification of Directors) Rules 2014 which mandated the inclusion ofan Independent Director's name in the data bank of Indian Institute of Corporate Affairs("IICA") for a period of one year or five years or life time till they continuesto hold the office of an independent director.

In the opinion of the Board all the independent directors are persons of integritypossesses relevant expertise and experience.

Board Evaluation

Pursuant to the provisions of Section 134 of the Companies Act 2013 and Regulation 19of SEBI Listing Regulations the Board has carried out the annual performance evaluationof its own performance the directors individually as well as the evaluation of theworking of its various committees as per the criteria laid down by the Nomination andRemuneration Committee. A structured questionnaire was prepared after taking intoconsideration inputs received from the directors covering various aspects of the Board'sfunctioning such as adequacy of the composition of the Board and its Committees Boardculture execution and performance of specific duties obligations independencegovernance ethics and values adherence to corporate governance norms interpersonalrelationships attendance and contribution at meetings etc.

A separate exercise was carried out to evaluate the performance of individual directorsincluding the Chairperson of the Board who were evaluated on parameters such asparticipation and contribution by a director commitment including guidance provided tothe senior management outside of Board / committee meetings effective deployment ofknowledge and expertise effective management of relationship with various stakeholdersindependence of behaviour and judgment etc. The performance evaluation of the IndependentDirectors was carried out by the entire Board. The performance evaluation of theChairperson and Managing Director was carried out by the Independent Directors. Theevaluation process has been explained in the corporate governance report. The Boardreviewed the evaluation results as collated by the Nomination and Remuneration Committee.


As on March 31 2020 the Board comprised of nine members including two women members.The Board has an appropriate mix of Executive Directors (‘EDs') Non-ExecutiveDirectors (‘NEDs') and Independent Directors (‘ID') which is compliant with theCompanies Act 2013 the SEBI Listing Regulations and is also aligned with the bestpractices of Corporate Governance.


During the year Mr. Siddharth Mittal was elevated to the position of the ChiefExecutive Officer (‘CEO') and Joint Managing Director of the Company with effect fromDecember 1 2019 for a period of five years.

Effective April 1 2020 he was elevated to the position of Managing Director and CEOof the Company. The Board has recommended his appointment and the same shall be placed formembers approval at the ensuing AGM.

Mr. Siddharth Mittal has served as the Chief Financial Officer (‘CFO') of theCompany from August 1 2014 to November 30 2019.


Mr. John Shaw Non-Executive Director retires by rotation at the ensuing AGM and beingeligible seeks re-appointment. The Board recommends his re-appointment and this shall beplaced for members approval at the ensuing AGM.

The Board based on the recommendation of the Nomination and Remuneration Committee atits meeting held on January 23 2020 approved the re-appointment of Ms. KiranMazumdar-Shaw as an Executive Director (‘designated as an Executive Chairperson') ofthe Company for a period of five years effective from April 1 2020 on such terms andconditions including remuneration as may be approved by the Board. This shall be placedfor members approval at the ensuing AGM.

To ensure enhanced corporate governance practices the Securities and Exchange Board ofIndia (‘SEBI') had mandated a clear separation in the roles of Chairperson andManaging Director; the Chairperson should be a Non-Executive Director and not related tothe Managing Director or the CEO.

Upon such requirement coming into effect either on April 1 2022 or later at suchextended date as may be determined by the SEBI Ms. Kiran Mazumdar-Shaw shall cease to bean Executive Director of the Company and would continue in the capacity of a Non-ExecutiveDirector (designated as ‘Non-Executive Chairperson') of the Company on suchremuneration as applicable to other Non-Executive Directors of the Company as may bedetermined by the Board of the Company from time to time.

The profile and particulars of experience attributes and skills of the above Directorsis disclosed in the Notice of the AGM and matters are placed for members approval at theensuing AGM.


During the year Mr. Russell Walls an Independent Director who had attained the ageof 75 years stepped down as an Independent Director at the conclusion of 41st AGM of theCompany held on July 26 2019. Dr. Arun Suresh Chandavarkar CEO and Joint ManagingDirector of the Company retired on November 30 2019 after spending three decades withthe Company.

Dr. Levin M Jeremy an Independent Director resigned from the Board with effect fromJanuary 23 2020 owing to his expanding commitments in the United States which hadrestricted his availability to attend meetings at Biocon.

The Board expressed its gratitude for the outstanding contribution made by the abovedirectors in the evolution and success of Biocon during their tenure.

Key Managerial Personnel

The Key Managerial Personnel(s) of the Company as on March 31 2020 are Ms. KiranMazumdar-Shaw Chairperson & Managing Director Mr. Siddharth Mittal CEO & JointManaging Director and Mr. Mayank Verma Company Secretary & Compliance Officer.

Committees of the Board

Currently the Company has five Board level Committees: Audit Committee("AC") Risk Management Committee ("RMC") Nomination and RemunerationCommittee ("NRC") Stakeholders' Relationship Committee ("SRC") andCorporate Social Responsibility Committee ("CSR"). The composition of the abovecommittees as on March 31 2020 is disclosed as under:

S. No. Name of Members Category AC


1 Ms. Kiran Mazumdar-Shaw Chairperson and Managing Director*
2 Mr. John Shaw Non-Executive Director
3 Mr. Siddharth Mittal CEO and Joint Managing Director*
4 Prof. Ravi Mazumdar Non-Executive Director
5 Mr. Bobby Parikh Independent Director
6 Mr. Daniel Mark Bradbury Independent Director
7 Mr. Meleveetil Damodaran Independent Director
8 Ms. Mary Harney Independent Director
9 Dr. Vijay Kuchroo Independent Director

*Ms. Kiran Mazumdar-Shaw is Executive Chairperson effective from April 1 2020 and Mr.Siddharth Mittal is Managing Director and CEO of the Company effective from April 1 2020.C: Chairperson and M: Member.

Meetings of the Board

The meetings of the Board are scheduled at regular intervals to discuss and decide onmatters of business performance policies strategies and other matters of significance.The schedule of the meetings is circulated in advance to ensure proper planning andeffective participation. In certain exigencies decisions of the Board are also accordedthrough circulation.

During the year the Board met six times. The maximum interval between any two meetingsdid not exceed 120 days as prescribed in the Companies Act 2013. Detailed informationregarding the meetings of the Board are included in the report on Corporate Governancewhich forms part of the annual report.

Related Party Contracts or Arrangements

There were no materially significant related party transactions entered between theCompany Directors management and their relatives except for those disclosed in thefinancial statements. All the contracts/arrangements/transactions entered by the Companywith the related parties during FY 2019-20 were in the ordinary course of business and onan arm's length basis and whenever required the Company has obtained necessary approval asper the related transaction policy of the Company.

Accordingly particulars of contracts or arrangements with related parties referred toin Section 188(1) along with the justification for entering into such a contract orarrangement in Form AOC-2 does not form a part of the Report.

The Company formulated the policy on ‘Materiality of Related Party' transactionsand on dealing with Related Party Transactions' and the same is available at detailsof related party disclosures form part of the notes to the Financial Statements providedin the Annual Report.

Credit Ratings

ICRA and CRISIL continued to reafirm their rating of AA+/ Stable and A1+ respectivelyfor various banking facilities throughout the year enabling your Company to availfacilities from banks at attractive rates indicating a very strong degree of safety fortimely payment of financial obligations.

Conservation of Energy Technology Absorption Foreign Exchange Earnings & Outgo

The particulars as prescribed under sub-section (3)(m) of Section 134 of the CompaniesAct 2013 read with the Companies (Accounts) Rules 2014 is appended herewith asAnnexure 4 to the Boards' report.


Statutory Auditors

M/s. B S R & Co. LLP Chartered Accountants (ICAI Registration No.101248W/W-100022) were appointed as the Statutory Auditors of the Company to hold officefrom the conclusion of the 38th AGM held on June 30 2016 until the conclusion of the 43rdAGM of the Company to be held in the calendar year 2021.

The Auditors' Report on the financial statements of the Company for the financial yearending March 31 2020 is unmodified i.e. it does not contain any qualificationreservation or adverse remark. The Auditors' Report is enclosed with the financialstatements forming part of the annual report.

Cost Auditors

The Cost Records of the Company are maintained in accordance with the provisions ofSection 148(1) of the Act as specified by the Central Government. The Cost Audit Reportfor the financial year ended March 31 2019 was filed with the Central Government withinthe prescribed time. The Board on recommendation of the Audit Committee had appointedM/s Rao & Murthy Cost Accountants (Firm Registration Number 000065) as the CostAuditors to conduct the audit of Company's cost records for the financial year ended March31 2020. The Cost Auditors have confirmed that their appointment is within the limits ofSection 141(3) (g) of the Companies Act 2013 and have also certified that they are freefrom any disqualifications specified under Section 141(3) and proviso to Section 148(3)read with Section 141(4) of the Companies Act 2013. The Audit Committee has also receiveda certificate from the Cost Auditors certifying their independence and arm's lengthrelationship with the Company.

The Cost Auditor will submit their report for the FY 2019-20 on or before the due date.In accordance with the provisions of Section 148 of the Act read with the Companies (Auditand Auditors) Rules 2014 since the remuneration payable to the Cost Auditor for FY2020-21 is required to be ratified by the members the Board recommends the same forapproval by members at the ensuing AGM.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act 2013 and rulesthereunder M/s V. Sreedharan & Associates Practicing Company Secretaries wereappointed to conduct the secretarial audit of the Company for the financial year 2019-20.The secretarial audit report for financial year 2019-20 is appended herewith as Annexure 5to the Boards' report.

Pursuant to the SEBI circular vide no. CIR/CFD/CMD/1/27/2019 dated February 8 2019the Company has submitted the Annual Secretarial Compliance Report issued by M/s. V.Sreedharan & Associates Practicing Company Secretaries with the stock exchanges whereshares of the Company are listed.

Reporting of fraud by auditors

During the year the statutory auditors have not reported to the Audit Committee anymaterial fraud on the Company by its officers or employees under Section 143(12) of theCompanies Act 2013 the details of which need to be provided in this report.

Risk Management Policy

The Company has put in place an enterprise wide Risk Management Framework with theobjective of timely identification of risks assessment and evaluation of such risks inline with the overall business objectives or strategies and define adequate mitigationstrategy. On a quarterly basis the Risk Management Committee reviews critical risks on arotation basis in line with the risk management plan to measure effectiveness ofmitigation actions defined against critical risks and its impact on overall risk exposureof the Company. All the critical risk areas are covered at least once a year. All criticalrisk areas as identified by the Company are re-evaluated annually. During the course ofyear appropriate changes were made to the risk register considering internal or externalchanges.

Internal Financial Control

The Company has laid down guidelines processes and structures which enableimplementation of appropriate internal financial controls across the organisation. Suchinternal financial controls encompass policies and procedures adopted by the Company forensuring the orderly and efficient conduct of business including adherence to itspolicies safeguarding of its assets prevention and detection of frauds and errors theaccuracy and completeness of accounting records and the timely preparation of reliablefinancial information. These include controls in the nature of manual or automated (ITapplications including the ERP applications wherein the transactions are approved andrecorded). Appropriate review and control mechanisms are put in place to ensure that suchcontrol systems are adequate and are operating effectively on an ongoing basis.

Due to the inherent limitations of internal financial controls including thepossibility of collusion or improper management override of controls materialmisstatements in financial reporting due to error or fraud may occur and not be detected.Also evaluation of the internal financial controls are subject to the risk that theinternal financial control may become inadequate because of changes in conditions or thatthe compliance with the policies or procedures may deteriorate.

The Company has in all material respects an adequate internal financial controlsystem and such internal financial controls which were operating effectively based on theinternal control criteria established by the Company considering the essential componentsof internal control stated in the guidance note on audit of internal control overfinancial reporting issued by the Institute of Chartered Accountants of India.

Vigil Mechanism

The Vigil Mechanism as envisaged in the Companies Act 2013 the rules prescribedthereunder and the SEBI Listing Regulations is implemented through the Company's WhistleBlower Policy to enable the Directors employees and all stakeholders of the Company toreport genuine concerns to provide for adequate safeguards against victimisation ofpersons who use such mechanism and make provision for direct access to the Chairman of theAudit Committee.

Whistle Blower Policy of your Company is available on the Company's website and can beaccessed at the web-link:

Directors' Responsibility Statement

Pursuant to the requirement under Section 134 (3) (c) of the Companies Act 2013 yourdirectors confirm that:

(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures.

(b) they have selected such accounting policies and applied them consistently and madejudgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit and loss of the Company for that period.

(c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.

(d) they have prepared the annual accounts on a going concern basis.

(e) they have laid down internal financial controls based on the internal controlsframework established by the Company which were adequate and are operating effectivelyand

(f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

Particulars of Employees

The statement containing particulars in terms of Section 197(12) of the Companies Act2013 read with rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 forms part of this report and is appended herewith as Annexure 6 tothe Boards' report.

The statement containing particulars in terms of Section 197(12) of the Companies Act2013 read with rule 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 forms part of this report.

The statement containing the particulars of employees employed throughout the year andin receipt of remuneration of R 1.02 crore or more per annum and employees employedfor a part of the year and in receipt of remuneration of R 8.5 Lakhs or more permonth as required under Section 197(12) of the Companies Act 2013 is available on thewebsite of the Company at

Considering the first proviso to Section 136(1) of the Companies Act 2013 the AnnualReport excluding the aforesaid information is being sent to the members of the Companyand others entitled thereto. The said information is available for inspection at theregistered office of the Company during business hours on working days of the Company upto the date of the ensuing Annual General Meeting. Any shareholder interested in obtaininga copy thereof may write to the secretarial team of the Company in this regard.

Corporate Social Responsibility (CSR)

At Biocon CSR has been an integral part of our business since its inception. With theincorporation of Biocon Foundation in 2004 the Company formally structured its CSRactivity. Today the Company span its CSR efforts through the Biocon Foundation theBiocon Academy and select partnership programs with like-minded private organizations andGovernment. The Company promotes social and economic inclusion for the marginalizedcommunities with its integrated system focussing on the following areas:

Primary Healthcare- The Company believes that the most cost-efficient method ofensuring the health of a community is by preventing the occurrence of disease. The Companyprovides affordable primary and preventive healthcare services of assured quality. Theinitiative provides cushion to low and middle income groups from health shocks caused byhigh out-of-pocket health expenditure and it is catering to the healthcare needs of apopulation of more than 10 lakhs living predominantly in the rural areas peri-urban areasand slums in Karnataka & Rajasthan.

Promotion of Education- The Company believes in ensuring inclusive and equitablequality education for all. An afterschool enrichment program on English and Phonics LifeSkills Art and Craft Digital Literacy and games for children of Government schools isalso ongoing successfully. The Biocon Academy is an initiative to create a globallycompetitive Biotech ecosystem in India.

Gender Equality & Empowerment of Women- Promoting gender equality and empoweringwomen is amongst the most important CSR objectives of the Company. The Biocon Foundationhas set up hostels for women who come from weaker sections of ociety. The donation ofpatrol vehicles to a special cell of Hebbagodi Police for ensuring safety of women isanother initiative undertaken towards providing a safe environment.

Environmental sustainability- The Company promotes the conservation of naturalresources and improvements in the ecosystem to maintain the quality of soil air andwater. The Company has undertaken lake rejuvenation programs.

Heritage Art & Culture- The Company places high emphasis on the protection of ournational heritage art and culture. We have offered grants to restore many institutions ofgreat public importance including India Foundation for the Arts in Bengaluru.

Technology Incubation- The Company is keenly aware of the power of technology intransforming the development indicators and accordingly we support technology incubatorswhich are approved by the Central Government. Under this initiative the Biocon Foundationhas provided grants to The Institute of Bioinformatics and Applied Biotechnology (IBAB)Team Indus & Science Gallery Bengaluru.

Rural Development- The Company works towards combatting the social and economicproblems to ensure the prosperity of rural India. The Biocon Foundation has undertakenmany projects to bridge the rural-urban divide in terms of infrastructure. Some of ourinitiatives include the construction of roads school buildings community centrescommunity toilets and drinking water facilities. In an effort to ensuring rejuvenation oflakes in Bengaluru the Biocon Foundation has treated the Hebbagodi lake withbio-remediation processes. Similar work on the revival of Yarandahalli Lake is underway.

In compliance with the provisions of Section 135 of the Companies Act 2013 the Boardhas formed a Corporate Social Responsibility Committee which monitors and overseesvarious CSR initiatives and activities of the Company. The CSR Committee comprises of Ms.Mary Harney (Chairperson) Dr. Vijay Kuchroo and Prof. Ravi Mazumdar.

A detailed report regarding Corporate Social Responsibility is appended herewith asAnnexure 7 to the Boards' report. The Policy on Corporate Social Responsibility has beenuploaded on to the website of the Company and is available at

Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013. An internal Complaints Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment. All employees (permanent contractual temporarytrainees) are covered under this Policy. The Policy is gender neutral. During thefinancial year under review 3 complaints with allegations of sexual harassment werefiled of which 2 were disposed-o_ and 1 is pending closure as per the provisions ofSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.

Transfer of Unpaid and Unclaimed Amounts to IEPF

Pursuant to the provisions of Section 124(5) of the Companies Act 2013 read with theIEPF Authority (Accounting Audit Transfer and Refund) Rules 2016 all dividends whichremains unpaid or unclaimed for a period of seven years from the date of their transfer tothe unpaid dividend account are required to be transferred by the Company to the InvestorEducation and Protection Fund ("IEPF") established by the Central Government.Further as per IEPF Rules the shares on which dividend has not been paid or claimed bythe members for seven consecutive years or more shall also be transferred to the demataccount of the IEPF Authority.

During the year the Company has transferred unpaid and unclaimed dividends of R 1323535for the financial year 2011-12 and 9566 corresponding shares on which dividends wereunclaimed for seven consecutive years were transferred as per requirements of the IEPFRules.

Further as per Rule 6(8) of IEPF Rules all benefits such as bonus shares splitconsolidation except right issue accruing on shares which are transferred to IEPF shallalso be credited to the demat account of the IEPF authority. During the year the Companyhas transferred 38891 bonus shares to the IEPF authority.

Significant and Material Orders

There are no significant and material orders passed during the year by the regulatorscourts or tribunals impacting the going concern status and Company's operations in thefuture.

Statutory Disclosures

None of the Directors of your Company are disqualified as per the provisions of Section164(2) of the Companies Act 2013. Your Directors have made necessary disclosures asrequired under various provisions of the Companies Act and SEBI Listing Regulations.

Material Changes and Commitments

No material changes and commitments affecting the financial position of the Companyhave occurred between March 31 2020 and the date of this report.

Change in Nature of Business

There has been no change in the nature of the business of the Company. Your Companycontinues to be a pioneer biopharmaceutical company engaged in manufacturing activepharmaceutical ingredients and formulations including biosimilar drugs for diabeticsoncology and autoimmune diseases with sales in markets across the globe.

Annual Return

The Extract of annual return in Form MGT-9 as per the provisions of Section 134(3)(a)and 92(3) of the Companies Act 2013 is annexed to this report as Annexure 8 and also isavailable on the website of the Company at

Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI)

The Company is compliant with and has proper systems to ensure compliance under theprovisions of the applicable Secretarial Standards issued by the Institute of CompanySecretaries of India ("the ICSI").

Green Initiative

We request all the shareholders to support the ‘Green Initiative' of the Ministryof Corporate Affairs and Biocon's continuance towards greener environment by enabling theservice of the Annual Report AGM Notice and other documents electronically to your emailaddress registered with your Depository Participant/ Registrar and Share Transfer Agent.

We also request all the investors whose email id is not registered to take necessarysteps to register their email id with the Depository Participant/ Registrar and ShareTransfer Agent.


We place on record our appreciation for the committed services by every member of theBiocon family globally whose contribution was significant to the growth and success of theCompany. We would like to thank all our clients partners vendors investors bankers andother business associates for their continued support and encouragement during the year.

We also thank the Government of India and Malaysia Government of Karnataka Governmentof Telangana Government of AP Ministry of Information Technology and BiotechnologyMinistry of Health Ministry of Commerce and Industry Ministry of Finance Department ofPharmaceuticals Department of Scientific and Industrial Research Ministry of CorporateAffairs Central Board of Indirect Taxes and Customs Income Tax Department CSEZ and allother regulatory agencies for their assistance and co-operation during the year and lookforward to their continued support in the future.

For and on behalf of the Board
Kiran Mazumdar-Shaw
Bengaluru Executive Chairperson
May 14 2020 DIN: 00347229