Comparative Statement: Profit & Loss account of Biocon

------------------in Rs. Cr. -----------------Mar '11 Mar '10 Y2-Y1 206.43 8.55 197.00 160.90 96.96 45.59 37.55 3.84 4.20 18.35 36.10 17.8264 28.934 17.4636 21.4754 17.0159 45.6631 44.2807 42.3374 70.3518 23.0615 9.52934

Income Sales Turnover Excise Duty Net Sales Less:-TOTAL COGS Material Consumed Employee Cost Salaries and wages Welfare Expenses Other Expenses Manufacturing Expenses Gross Profit Add:Licensing and development fees Other income Less:Operating Expenses:Administrative Expense Selling and Distribution Expense Interest and finance charges Exceptional items Profit before depreciation and Tax Depreciation Profit before taxes Provision for Income Tax Profit for the year Balance brought forward form the previous year Profit available for appropriation

1,364.43 1,158.00 38.1 29.55 1,325.06 1,128.06 910.13 666.78 145.43 122.35 12.91 10.17 97.92 414.93 749.23 569.82 99.84 84.8 9.07 5.97 79.57 378.83

206.49 60.57

35.01 65.8

171.48 -5.23

489.803 -7.9483

42.55 56.45 2.37 26.67

75.79 40.17 1.99 -5.74

-33.24 16.28 0.38

-43.858 40.5278 19.0955

607.29 90.16 517.13 57.87 459.24

355.95 79.73 276.22 27.87 248.35

251.34 10.43 240.91 30.00 210.89

70.611 13.0817 87.2167 107.643 84.9164

947.02 1406.27

800.92 1049.28

146.10 356.99

18.2415 34.0224

Dividend and Tax thereon Transfer to General reserve Balance transferred to Balance sheet

99.07 45.92 1261.27

77.41 24.83 947.02

21.66 21.09 314.25

27.9809 84.9376 33.183

Commonsize Statement: Profit & Loss account of Biocon Mar'09 12 mths Income Sales Turnover Excise Duty Net Sales Less:-TOTAL COGS Material Consumed Employee Cost Salaries and wages Welfare Expenses Other Expenses Manufacturing Expenses Gross Profit Add:Licensing and development fees Other income

------------------- in Rs. Cr. ------------------Mar '10 12 mths Mar '11 12 mths

878.5 25.71 852.79 581.39 416.08 80.42 66.58 8.46 5.38 84.89 322.82

100 1,158.00 131.82 1,364.43 155.3 100 29.55 114.94 38.1 148.2 100 1,128.06 132.28 1,325.06 155.4 100 100 100 100 100 100 100 100 749.23 128.87 569.82 136.95 99.84 84.8 9.07 5.97 124.15 127.37 107.21 110.97 910.13 156.5 666.78 160.3 145.43 180.8 122.35 183.8 12.91 152.6 10.17 189 97.92 115.3 414.93 128.5

79.57 93.733 378.83 117.35

8.87 74.73

100 100

35.01 65.8

394.7 88.05

206.49 2328 60.57 81.05

Less:Operating Expenses:Administrative Expense Selling and Distribution Expense Interest and finance charges

78.87 34.67 4.94

100 100 100

75.79 96.095 40.17 115.86 1.99 40.283

42.55 53.95 56.45 162.8 2.37 47.98 26.67 29.16

Exceptional items

-91.46

100

-5.74

6.276

Profit before depreciation and Tax Depreciation Profit before taxes Provision for Income Tax Profit for the year Balance brought forrward form the previous year Profit available for appropriation Dividend and Tax thereon Transfer to General reserve Balance transferred to Balance sheet

196.48 74.28 122.2 10.4 111.8 770.49 882.29 70.19 11.17 800.91

100 100 100 100 100 100 100 100 100 100

355.95 79.73 276.22 27.87 248.35

181.16 107.34 226.04 267.98 222.14

607.29 90.16 517.13 57.87 459.24

309.1 121.4 423.2 556.4 410.8

800.92 103.95 1049.28 118.93 77.41 110.29 24.83 222.29 947.02 118.24

947.02 122.9 1406.27 159.4 99.07 141.1 45.92 411.1 1261.27 157.5

Analysis:
1) Biocons net sales grew by 17% to 1325crores in 2010-11 while the licensing and development fees grew by 490% to 206 crores.Companys domestic revenues from product sales have increased by 25%, and exports sales have increased by 8%.The growth in biopharmaceuticals saleswas driven by a significant increase in sale across business segments including statins, immunosuppresants and insulins. The increases in domestic sales are mainly driven by increase in sale of bio-pharmaceutical products and branded formulations. Excise Duty has increased by 28% due to increase in sales. 2) The Total COGS have increased by 21% to 910 crores. This is mainly due to: Materials costs have increased by 17% from 569 crore to 666 crore over the previous year. As a percentage of sales, the material costhas remained constant . Staff costs have increased from ` 99 crores for the fiscal year 2010 to ` 146 crores for the fiscal year 2011. The increase in employee costsis due to:a) Staff increment which was 15% YoY. b) Addition of over 5600 employees. Increase in Manufacturing expenses by 23% due to increase in sales. 3) GP ratio has fallen to 30 % from 33 % which shows the costs has increased and company was unable to pass it completely to the coustomers. 4) Licensing and Development Fees These fees represent income received by Biocon towards transfer of proprietary technology with respect to certain bio-generics under long-termcontracts and outlicensing its proprietary products. During the year, the Company has a registered

licensing income of 206croresan increaseof 171 croresas compared to previous year. This includes transfer of certain intangible to subsidiary within the group. 5)The Other income has registered a decrease of 8% compared to the previous year. Other income consists primarily of dividend incomefrom investments amounting to `16.7 crores as compared to 10 crores million in fiscal 2010. It also includes cross charge of utility and other common costs towards use of Biocon Park facility (SEZ Developer) to subsidiaries which has decreased from 33.6 crores in the fiscal 2010 to 29.7crores in the fiscal 2011. 6)Operating and other expenses comprises traveling and conveyance; communication; professional charges; power and fuel; lab consumables; repairs and maintenance; selling expenses like freight outwards; sales promotion and commissions; research anddevelopment costs, provision for doubtful debts; exchange fluctuations and other general expenses. Operating and other expenses have decreased by 12% from 224crores for the year 2010 to 197 crores for the year 2011 mainly on account of a) Foreign exchange gain of `26 crores as compared to loss of 3 crores in the previous fiscal. b) 16% decrease in professional charges from 17.5 croresto 14.8 crores c) The decrease is offset by a 41% increase in selling expenses from 40 crores to 56 crores primarily on account of increase in freight charges and sales; and d) 21% increase in power charges from ` 67crores to 81 cores and 19% increase in repair and maintenance charges from 28crores to 33 crores. e)Fall in administration expense by 40% due to control measures adopted by the company. 7) Interest and finance charges have increased from 1.99 crore in fiscal 2010 to 2.37 crore in fiscal 2011 due to increase in bank charges. 8)During the year depreciation has increased by 10.44 crores an increase of 13% on account capitalization of assets. Depreciation as a percentage of sales has remained constant at 7%. 9)Provision for current tax in the year ended March 31, 2011 was 58 crores as against 28 croresnet of provision for current and deferred tax .The Company availed tax benefit in respect of profit from its EOU and SEZ operations. 10)Net profit for the fiscal year 2011 has increased by 85% to 459crores resulting in a basic EPS of 23.49.Net Profit rose 85% on accountof increase in sales, income from licensing and development fees and reduction in administration expenses. NP ratio is 34% whereas GP ratio is 31 % which shows that with reduction in operating expenses company is still able to sell larger quantities.

------------------- in Rs. Cr. -------------------

Comparative Statement Balance Sheet of Biocon

Mar '11 Sources Of Funds Total Share Capital Equity Share Capital Reserves and surplus Revaluation Reserves Securities premium General reserve Transfer from PNL A/C to general reserve Others Balance in profit and los account Mar '10 Y2-Y1 Y2-Y1/Y1*100

100 100 1,846.81 0.95 27.88 177.57 45.92 333.22 1261.27

100 100 1,466.29 0.95 27.88 152.73 24.83 312.6 947.03

0 0 380.52 0 0 24.84 21.09 20.62 314.24

0 0 25.95 0 0 16.26 84.94 6.596 33.18

Net worth/Owners fund Secured Loans Unsecured Loans Total Debt / Owed funds Deferred Tax Liabilities (Net) Total Liabilities Application Of Funds Net Fixed Assets Tangible Plant $ Machinery including computers R&D equipments Building Freehold Leaseholds Others A) AT COST B) Less:- Accumulated Depreciation plant and machinery including computer R and D equipments Building Leasehold Others C)Net Block D)Capital Work in progress NET FIXED ASSETS E)Intangibles

1,946.81 74.06 94.57 168.63 39.55 2,155.00

1,566.29 89.68 102.12 191.8 40.14 1,799.00

380.52 -15.62 -7.55 -23.17 -0.59 356

24.29 -17.4 -7.39 -12.1 -1.47 19.79

714.63 123.7 206.35 11.16 22.64 13.97 1092.45 426.21 320.04 53.37 43.75 0.13 8.92 666.24 103.29 769.54 13.4

662.07 101.12 192.82 11.16 22.64 11.99 1001.8 341.81 256.19 42.78 35.77 0.12 6.95 659.99 58.33 718.32 18.4

52.56 22.58 13.53 0 0 1.98 90.65 84.4 63.85 10.59 7.98 0.01 1.97 6.25 44.96 51.22 -5

7.939 22.33 7.017 0 0 16.51 9.049 24.69 24.92 24.75 22.31 8.333 28.35 0.947 77.08 7.131 -27.2

Investments Trade investments Non Trade (Shares of the company held by ESOP trust) In subsidiary Companies others Working Capital

485.82 35.82 26.01 30.06 393.92

418.64 44.79 12.21 8.93 352.6

67.18 -8.97 13.8 21.13 41.32

16.05 -20 113 236.6 11.72

Current assets, Loans and advances Inventories Sundry Debtors Cash and Bank Balance Loans and advances Current Liabilities and Provisions Total Current Liabilities Sundry creditors Advance from customers Deferred Revenues Other liabilities Provisions Interim Dividend Proposed Dividend Tax on Dividend Others Net Current assets/Working capital Total Assets

1311.76 274.74 418.1 210.02 408.68

1108.63 244.8 383.64 77.12 403.07

203.13 29.94 34.46 132.9 5.61

18.32 12.23 8.982 172.3 1.392

315.4 183.45 3.74 75.19 52.99 110.19 30 60 9.73 10.46 886.2 2155

381.62 185.64 8.45 131.36 56.17 83.24 0 70 7.41 5.83 643.7 1799

-66.22 -2.19 -4.71 -56.17 -3.18 26.95 30 -10 2.32 4.63 242.5 356

-17.4 -1.18 -55.7 -42.8 -5.66 32.38 100 -14.3 31.31 79.42 37.67 19.79

Analysis:
1) The Company has only one class of shares i.e. equity share capital comprising of 200,000,000 equity shares of ` 5 each. During the year there has been no change in the equity capital of the Company. 2) The total reserves and surplus has increased from 1465 crores in March 31, 2010 to 1845 croresin March 31, 2011. The increase isprimarily on account accumulations of profits made during the year of 459 crores net of Dividend distribution. 3) There has been a decrease in total loans outstanding from 191 crores in March 2010 to 168 crores in March 2011. Unsecured loans decreased by 7.55 croresprimarily on account of decrease in short term borrowings from the banks. During the year, the Company received financial assistance of 6.2 croresunder Industrial Partnership Programs and Drugs andPharmaceutical Research Programs sponsored by government bodies for financing its research projects. The loan is repayable over a periodof 5-10 years from date of completion of the projects.The Company has repaid back some of the loans. 4) During the year 2011, the Company has capitalized fixed assets to the extent of 94 crores. The primarily additions are in plant and machinery of 53 croresand research and development equipments of 25 crores .The capital work in progress as at March 31, 2011, represents advances paid towards purchase of fixed assets and the acquisition costs

relating to assets not put to use.Depreciation has also increased largely but still the net fixed assets have increased by 51 crores which shows increase in purchases id greater than increase in depreciation. 5) The Company as at March 31, 2011 held current investments in mutual funds of 393 crores as compared to 352 crores as of March 31, 2010. During the year, the funds generated from operating activities were invested in current investments. The long-term investments have increased from 66 croresto 91 crores over the previous year. Additional investments during the yearinclude investment of 12.1 croresfor purchase of 49% stake in Biocon Biopharmaceuticals Private Limited (BBPL). As at March 31, 2011,the entire share capital of BBPL is held by the Company. During the year 2011, BioconSdn.Bhd was incorporated as wholly owned subsidiary in Malaysia.The joint research collaboration program with VaccinexInc and IATRICa Inc. are on going.The Company continues to hold its investments in its subsidiaries Syngene, Clinigene, BBPL, Biocon SA, Biocon Research Limited and joint ventureNeoBiocon. 6) During the year ended March 31, 2009, the Company acquired marketing rights of certain products from BBPL for a sum of ` 12.8 crores.These rights give the Company an exclusive right of marketing the products outside India. The Company has during the year made anapplication for registration of the products and consequently commenced amortisation of these intangibles over a period of five yearsfrom April 2010.As at March 31, 2011 net value of intangibles assets are 13 crores 7) The working Capital has increased by 242 crores which is application of funds. The working Capital has increased due to increase in current assets and fall in current liabilities .The current assets, loans and advances have increased from 1112 crores to1315 croresan increase of 18% over the previous year. Thiswas mainly due to - Increase in cash and bank balances from 77 to 185 crores - Increase in inventories from 244 to 274 crores largely on account of incremental growth in sales. - Sundry debtors stood at 418 crores (net of provision for doubtful debts of ` 69,136) as at March 31, 2011 as compared to 383 crores (net of provision for doubtful debts of ` 71,537) as at March 31, 2010. These debtors are considered good and realisable. Debtors represent an outstanding of 109 days and 110 days of revenue as at March 31, 2011 and March 31, 2010 respectively on amoving average of trailing 3 months sales.

8) The current liabilities and provisions have decreased by 8.5% from 510 crores to 468 crores .This decrease in current liabilities is primarily due to decrease in sundry creditors from 185 crores to 182 crores primarily on account of decrease in creditors for raw materials.The increase in provision from 83 crores to 110 crores is mainly on account of increased dividend to 90 crores for the year endedMarch 31, 2011 as against 70 crores in the previous year.
Commonsize Statement Balance Sheet of Biocon ------------------in Rs. Cr. -----------------Mar '11 12 mths Sources Of Funds Total Share Capital Equity Share Capital Reserves and surplus Revaluation Reserves Securities premium General reserve Transfer from PNL A/C to genral reserve Others Balance in profit and los account

Mar '10 12 mths

100 4.64037 100 4.64037 1,846.81 0.95 27.88 177.57 45.92 333.22 1261.27

100 5.55864 100 5.55864

85.6988 1,466.29 81.5058 0.04408 0.95 0.05281 1.29374 27.88 1.54975 8.23991 152.73 8.48972 2.13086 24.83 1.38021 15.4626 312.6 17.3763 58.5276 947.03 52.642

Networth/Owners fund Secured Loans Unsecured Loans Total Debt / Owed funds Defered Tax Liabilities (Net) Total Liabilities

1,946.81 74.06 94.57 168.63 39.55 2,155.00 Mar '11 12 mths

90.3392 1,566.29 87.0645 3.43666 89.68 4.98499 4.3884 102.12 5.67649 7.82506 191.8 10.6615 1.83527 40.14 2.23124 100 1,799.00 100 Mar '10 12 mths

Application Of Funds Net Fixed Assets Tangible Plant $ Machinery including computers R and D equipments Builiding Freehold

714.63 123.7 206.35 11.16

33.1615 5.74014 9.57541 0.51787

662.07 36.8021 101.12 5.6209 192.82 10.7182 11.16 0.62034

Leaseholds Others A) AT COST B) Less:- Accumulated Depreciation plant and machinery including computer R and D equipments Building Leasehold Others C)Net Block D)Capital Work in progress E)Intangibles

22.64 1.05058 13.97 0.64826 1092.45 50.6937 426.21 19.7777 320.04 53.37 43.75 0.13 8.92 14.851 2.47657 2.03016 0.00603 0.41392

22.64 1.25848 11.99 0.66648 1001.8 55.6865 341.81 256.19 42.78 35.77 0.12 6.95 19 14.2407 2.37799 1.98833 0.00667 0.38633

666.24 30.916 103.29 4.79304 13.4 0.62181

659.99 36.6865 58.33 3.24236 18.4 1.02279

Investments Trade investments Non Trade (Shares of the company held by ESOP trust) In subsidiary Companies others Working Capital Current assets,Loans and advances Inventories Sundry Debtors Cash and Bank Balance Loans and advances Current Liabilities and Provisions Total Current Liabilities Sundry creditors Advance from customers Deferred Revenues Other liabilities Provisions Interim Dividend Proposed Dividend Tax on Dividend Others Net Current assets/Working capital Total Assets

485.82 22.5439 35.82 1.66218 26.01 1.20696 30.06 1.3949 393.92 18.2794

418.64 23.2707 44.79 2.48972 12.21 0.67871 8.93 0.49639 352.6 19.5998

1311.76 274.74 418.1 210.02 408.68

60.8705 12.749 19.4014 9.74571 18.9643

1108.63 244.8 383.64 77.12 403.07

61.6248 13.6076 21.3252 4.28683 22.4052

315.4 183.45 3.74 75.19 52.99 110.19 30 60 9.73 10.46 886.2 2155

14.6357 8.51276 0.17355 3.4891 2.45893 5.11323 1.39211 2.78422 0.45151 0.48538 41.123 100

381.62 185.64 8.45 131.36 56.17

21.2129 10.3191 0.46971 7.30183 3.12229

83.24 4.62702 0 0 70 3.89105 7.41 0.4119 5.83 0.32407 643.7 1799 35.781 100

Analysis:
1) Reserves and surplus has increased over the 3 years by 44% . The increase is primarily on account accumulations of profits made during the year of 459 crores net of Dividend distribution in 2011. 2) Loan funds as such shows no trend. It first increases from 163 crores to 191 crores and then falls back to 168 crores. It increases in the year 2010 as unsecured loan has increased from 1.33 crores to 102 crores on account of short term borrowings. Whereas in 2011 unsecured loans decreased by 7.55 crores primarily on account of decrease in short term borrowings from the banks. 3) Fixed assets has shown an upward trend as capitalization of fixed assets has increased over the years. Depreciaiton has also shown un upward trend on account of acquisition of more fixed assets. 4) Investment is growing by 20%. This is due to increase in current investments in mutual funds (increased from 288 to 352 to 393 crores) and increase in long term investments from 58 to 66 to 91 crores over period of 3 years. 5) Inventories have grown by 25% largely due to increase in sales by 25%.Sundry debtors have also shown an upward trend with increase in sales. Loans and advances have increased drastically by 50% in 2010.This increase is mainly on account of increase in other receivables, which has increased from Rs 18crores to Rs 141 croresmainly due to increase in receivables of 97crores from Biocon Research Limited due to transfer of intangibles assets and research and development expenses crosscharged during the year. Total current liabilities and provisions has shown an upward trend. It increases drastically in 2010 by 50% mainly due to increase in creditors from Rs 106crores to Rs 159 croresprimarily on account of increase in sundry creditors for raw materials and packing materials.

RATIOS
Formula

31st March 2011 Calculations Ratio

31 st March 2010 Calculations Ratio

Revenue Ratios
GP Ratio NP Ratio GP/Net Sales*100 NP/Net Sales*100 Operating Expense/Nets sales*100 COGS/Avg.Inventory 414/1325.06*100 459/1325.06*100 31 378.3/1128.06 34 248/1128.06 33 22

Operating Expense Inventory Turnover

102/1325*100 910/264

7.70% 117/1128*100 3.43 750/220

10.37% 3.4

Balance Sheet Ratio

Current Ratio Quick Ratio Net Worth Stock to Working cap currents assets/current liabilities Quick assets/quick liabilities Own Funds/Total Cap Employed Stock/Working capital Long Term Debt/Shareholders fund 1311.76/425.59 1037.02/425.59 1946.81/2155 274/886.2 3.08 1108.63/464.86 2.4 863.83/464.86 0.9 1566/1799 0.31 245/643.7 2.38 1.85 0.87 0.38

Debt Equity Ratio

168.63/1946

0.08 191.8/1566

0.12

Composite Ratios
ROCE Return on Propreitors Fund Return on Equity share cap EPS EBIT/CE*100 517/2155 23 276/1799 15

PAT/Own Funds*100 PAT-PD/Equity Share Cap PAT-PD/No of Equity Shares Dividend declared/No.of equity shares

459/1946

23 248/1566

15

459/100 459/20

4.59 248/100 22.95 248/20

2.48 12.4

DPS Dividend Payout Yield

90/20

4.5 70/20 0.19 3.5/12.4 1.30% 3.5/285

3.5 0.28 1.20%

DPS/EPS 4.5/22.95 DPS/Market Price Per share 4.5/344

Debtors Turnover Ratio Material Consumed Ratio

Net Sale/Avg Debtors 1325/400 Material Consumed/Net Sales*100 Total Sales/Gross Fixed Assets COGS-Material Consumed/Net Sales*100

3.31 1128/347

3.25

666.7/1325*100

50.32 570/1128*100

50.5

Fixed Assets Turnover

1325/1092 910667/1325*100

1.21 1128/1001 75018.33 570/1128*100

1.12

Conversion Cost Ratios

15.95

Analysis:
1)The current ratio and quick ratio for year end 2011 is 3.08 and 2.4 respectively which are above the normal standards. This shows good short term financial strength of the company to meet itobligations.The quick ratio also indicates that company could have better utilised it funds rather than keeping it idle. 2)Stock to working capital is around 31% which is good for the company as less of working capital is blocked in stock indication more rotation of stock. 3)Net Worth or Propreitory ratio is 90% indicating the extent to which assets are financed by the proprietor. The company is more stable and has greater proprietors interest in business. 4)Debt Equity ratio is 0.08 which is quite low showing long term stability of the company. It also indicates stability and flexibility in arranging finance for future finance.It also shows company is not enjoying benefits of trading on equity. 5)GP ratio is 31 % and NP ratio has increased to 33 % from 22% showing that company is a highly profitable company. It is able to sell larger quantities at lower operating expense. Operating Expense ratio has fallen from 10% to 7% which is again good for the company. 6)Inventory turnover ratio is 3.43times per year or 106 days. It shows that stock is moving fast and company has a better inventory management. 7)Debtors turnover ratio is 3.31 and credit period given is 110days.