Biocon Ltd. — Interim / Quarterly Report 2018

Oct 25, 2018

Biocon limited

20th KM Hosur Road Electronics City Bangalore 560 100, India T 91 BO 2808 2808 F 91 80 2852 3423 CIN : L24234KA 1978PLC003417

www.biocon.com

Date of Submission: October 25, 2018

To	To
The Secretary	The Secretary
BSE Limited	National Stock Exchange of India Limited
Department of Corporate Services	Exchange Plaza, Bandra Kurla Complex
Phiroze Jeejeebhoy Towers,	Mumbai-400 050
Dalal Street, Mumbai- 400 001	Stock Code- Biocon
Scrip Code - 532523

Dear Sir/Madam,

Sub: Outcome of Board meeting held on October 25, 2018

Ref: Regulation 30 of the SEBI Listing Obligations and Disclosure Requirements (LODR) Regulations,

2015

With reference to t he captioned subject, we wish to inform you that :

• 1. The meeting of Board of Directors commenced at 4.45 PM and concluded at 5.40 PM.
• 1. The unaudited Financial Results (Standalone and Consolidated) for the quarter and half year ended September 30, 2018 t ogether with Limited Review Report reviewed by Audit and Risk Committee and considered and approved by t he Board of Directors, has been enclosed herewith.
• 1. Advertisement in newspaper for publication of results as required under the SEBI LODR Regulations, 2015 will be done shortly.

Kindly t ake the above said information on record as per the requirement of SEBI LODR Regulations, 2015.

Thanking You, Yours faithfully For BIOCON LIMITED

Satish Kumar 55 Company Secretary and Compliance Officer Encl · A/A

B S R & Co. LLP

Chartered Accountants

Maruthi lnfo-Ted1 Centre 11-12/1 Inner l~ing Road Koramangala Bangalore 560 071 India

·relephono: + 91 80 3980 6000 Fax: + 91 80 3980 6999

Limited Review report

To The Board of Directors ofBiocon Limited

We have reviewed the accompanying statement of unaudited standalone financial results (nStatemenC1 ) ofBiocon Limited ('the Company') for the quarter and hal r year ended 30 September 20 18 attached herewith, being submitted by the Company pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 20 I 5 ('Listing Regulations').

This Statement is the responsibility of the Company's Management and has been approved by the Board of Directors. Our responsibility is to issue a report on the Statement based on our review.

We conducted our review in accordance with the Standard on Review Engagement (SRE) 2410, 'Review of'Jnterim Financial !J:fimnation Pe1:fimned by the Independent Auditor of the Entity· specified under Section 143( I 0) of the Companies Act, 2013. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the Statement is Ji·ee of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit and accordingly, we do not express an audit opinion.

Based on review conducted as above, nothing has come to our attention that causes us to believe that the accompanying Statement prepared in accordance with applicable accounting standards i.e. lnd-AS prescribed under Section 133 of the Companies Act, 2013 and other recognized accounting practices and policies has not disclosed the information required to be disclosed in terms of Regulation 33 of the Listing Regulations including the manner in which it is to be disclosed, or that it contains any material misstatement.

fiJr B S R & Co. LLP

Chartered Accountants Firm Registration Number: I 0 1248W /W-I 00022

\ ~_J(}Nvf!Nv) ( ~ r'

S Setht raman Partner Membership Number: 203491

Place; I3engaluru Date: 25 October 2018

Rog!storad Ofl!co: 1 Sl FIOOI, Lodh<l ExcGIUS Apollo Mills Conlpound N.M. Joshi Mmg, Mah~lnkshmi Munlbai · 400 011

B S R & Co, LLP

Chartered Accountants

Maruthl lnfo-Tedl Centre 11-12/1 Inner 11ing 11oad Koramangala Bangalore 560 071 India

1olephone: + 91 80 3980 6000 Fax: + 91 80 3980 6999

Limited Review report

To The Board of Directors of Biocon Limited

We have reviewed the accompanying statement of unaudited consolidated flnancial results ("Statement") ofBiocon Limited ('the Company'), its subsidiaries (collectively referred to as 'the Group'), its associates and a joint venture (Refer to Note 3 of the Statement), for the quarter and half year ended 30 September 2018 attached herewith, being submitted by the Company pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations').

This Statement is the responsibility of the Company's Management and has been approved by the Board of Directors. Our responsibility is to issue a repori on the Statement based on our review.

We conducted our review in accordance with the Standard on Review Engagement (SRE) 2410, 'Review of" Interim Financial Jnfi>rmation Pe1.fimned by the Independent Auditor of the Entity' specified under Section 143( 1 0) of the Companies Act, 2013. This standard requires that we plan and perform the review to obtai!T moderate assurance as to whether the Statement is free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit and accordingly, we do not express an audit opinion.

We did not review the flnancial information of a subsidiary included in the Statement, whose unaudited financial information reflect total revenue of Rs 951 million and Rs I ,345 million for the qumier ended and half year ended 30 September 2018 respectively and total assets of Rs 26,548 million as at 30 September 2018. The consolidated financial results also include the Group's share ofloss (and other comprehensive income) of Rs 9 million and Rs. 4 million for the quarter and half year ended 30 September 2018 respectively in respect of a joint venture. The unaudited financial information in relation to the subsidiary and a joint venture, both incorporated outside India has been reviewed by other auditors whose reports have been furnished to us. The Company's Management has converted the financial information of the subsidiary and a joint venture both incorporated outside India from accounting principles generally accepted in their respective countries to accounting principles generally accepted in India. We have reviewed these conversion adjustments, if any made by the Company's Management. Our conclusion on the Statement to the extent they have been derived from such unaudited !lnancial information is based solely on the report of such other auditors and the conversion adjustments, if any prepared by the Management of the Company and reviewed by us. Our conclusion is notmodifwd in respect of such matter.

l3 S I~ & Co. {a paltrtGrship linn wi\h 110\JiStratiOI\ NO. 13A6122:l) COIWGfled into B S H & Co. U.P (a Limited Liability Partnership w'rtll U.J' r~egif,tmtiOJ\ No.Mf3·81fl1) willl effect from October 14, 2013

Hoglstorad OUico; 1 :>t Floor, Lodha Excolus Apollo Mills Compound N.M. Joshi Marg, Mal1alakshmi Mumbai- 400 011

8 S R & Co. LLP

Biocon Limited

Limited Review report (continued)

Based on our review conducted as above, nothing has come to our attention that causes us to believe that the accompanying Statement prepared in accordance with applicable accounting standards i.e. lnd AS prescribed under Section i 33 of the Companies Acl, 2013 and other recognized accounting practices and policies has not disclosed the information required to be disclosed in terms of Regulation 33 of the Listing Regulations including the manner in which it is to be disclosed, or that it contains any material m isstatemcn1.

fiJr B S R & Co. LLI' Chartered Accountants Firm Registration Number: I 0 1248W /W-I 00022

S Scthuraman Partner Membership Number: 203491

Place: Bengaluru Date: 25 October 2018

BIOCON LIMITED

CIN: L24234KA1978PLC003417 Website: www.blocon.com

Registered office: 20th KM HDSUR ROAD, ELECTRONIC CITY P.O., BANGALORE • 560 100 STATEMENT OF UNAUDITED STANDALONE FINANCIAL RESULTS FOR THE QUARTER AND HALF YEAR ENDED SEPTEMBER 30, 2018

						(Rs. In Million, except per equity share data)
					3 months ended 3 months ended 3 months ended 6 months ended 6 months ended		Previous Year
Sl. NIJ.	Particulars	30.09.2018	30.06.2018	30.09.2017	30.09.2018	30.09.2017	ended
							31.03.2018
		(Unaudited)	{Unaudited)	(Unaudited)	{Unaudited)	(Unaudited)	{Audited)
1	Income
	Revenue from operations	7,089	6,722	6,047	13,811	11,853	24,255
	Other income	563	405	457	968	718	1,247
	Total income	7,6S2	7,127	6,504	14,779	12,S71	2S,S02
2	Expenses
	a) Cost of raw materials and packing materials consumed	2,990	2,860	1,922	5,850	4,417	9,587
	b) Purchases of traded goods	434	280	240	714	411	925
	c) Changes In inventories of finished goods, work-in-progress and stock-in-trade	(270)	(99)	556	(369)	328	(18)
	d) Excise duty			-		63	63
	e) Employee benefits expense	1,289	1,118	964	2,407	1,925	4,086
	f) Finance costs	12		2	12	11	10
	g) Depreciation and amortisation expenses	402	317	334	719	706	1,361
	h) Other expenses	1,802	1,750	1,645	3,552	3,127	6,479
		6,659	6,226	S,663	12,885	10,988	22,493
	Less: Recovery of cost from co-development partners (net)	(69)	(8)	{9)	(77)	(9)	(49)
	Total expenses	6,590	6,218	5,6S4	12,808	10,979	22,444
3	Profit before tax and e•ceptional item {1-2)	1,062	909	850	1,971	1,S92	3,0S8
4	Exceptional items I refer note 7 below]	347	1,640		1,987
5	Profit before tax (3 + 4)	1,409	2,549	850	3,958	1,592	3,058
6	Tax expense	211	252	166	463	363	673
7	Profit for the period/year (5 - 6)	1,198	2,297	684	3,495	1,229	2,385
8	Other comprehensive Income
	A (i) Items that will not be reclassified to profit or loss	158	(3)	(7)	155	(14)	(11)
	(ii) Income tax rel~ling to items that will not be reclassified to profit or loss	82			82		4
	B (i) Items that will be reclassified to profit or loss	(80)	(65)	(44)	(145)	(55)	(89)
	(ii) Income tax relating to items that will be reclassified to profit or loss	27	23	15	50	19	31
	Other comprehensive income, net of taxes	187	(45)	(36)	142	(SO)	(65)
9	Total comprehensive income for the period (7+8)	1,385	2,252	648	3,637	1,179	2,320
10	Paid-up equity share capital (Face value of Rs. 5 each)	3,000	3,000	3,000	3,000	3,000	3,000
11	Reserves i.e. Other equity						64,386
13	Earnings per share (of Rs. 5 each)				(not annualised) (not annualised) (not annualised) (not annualised) (not annualised)		(annualised)
	(a) Basic	2.03	3.89	1.16	5.91	2.09	4.04
	(b) Diluted	2.01	3.85	1.15	5.87	2.07	4.02
	See accompanying notes to the financial results

BIOCON LIMITED St andalone Balance Sheet

{Rs. in Million)

		As at Se[!tember 30, 2018 (Unaudited}	As at March 31, 2018 {Audit ed)
ASSETS A
1 Non-current assets (a) Property, plant and equipment		10,318	8,341
		1,493	3,185
(b) Capital work-in-progress (c) Investment property		428	438
(d) Intangible assets		246	247
(e) Financial assets
Investments		38,500	37,452
Loans		1,652	2,817
Other financial asset s		400	379
(g) Income tax asset, net		617	648
(h) Deferred tax asset, net		1,852	1,022
(i) Other non-current assets		2,322	2,163
Total non-current assets		S7,828	S6,692
2 Current assets (a) Inventories		6,783	5,617
(b) Financia l assets
Investments		2,689	4,538
Trade receivables		8,503	7,399
Cash and cash equivalents		3,593	891
Ot her ba nk balances		2,048	1,078
Ot her fina ncial assets		653	759
(c) Other current assets		327	295
Total current assets		24,596	20,577
TOTAL - ASSETS		82,424	77,269
EQUITY AND LIABILITIES B
1 Equit y
(a) Equity share capital		3,000	3,000
(b) Other equity		67,278	64,386
Total Equity		70,278	67,386
2 Non-current liabilities
(a) Financia l liabilities
Borrowings		14	672
Other financial liabilities		64	7
(b) Provisions		172	172
(c) Other non-current liabilities		995	716
Total non-current liabilities		1,24S	1,567
3 Current liabilities
(a) Financial liabilities		6,592	5,797
Trade payables		2,212	1,130
Ot her f ina ncial liabilities (b) Provisions		412	316
		1,249	740
(c) Income tax liability, net (d) Other current liabilities		436	333
Total current liabilities		10,901	8,316
	r:-
TOTAL - EQUITY AND LIABILITIES	\ )	82,424
	~~"· 1'_,.~ ~1.' -

-...........-.:_ .. "'

	CIN: L24234KA1978PLC003417 Website: www.blocon.com Registered office: 20th KM HOSUR ROAD, ELECTRONIC CITY P.O., BANGAl ORE - 560 100 STATEMENT OF UNAUDITED CONSOLIDATED FINANCIAl RESUlTS FOR THE QUARTER AND HAl F YEAR ENDED SEPTEMBER 30, 2018
51. No.	Particulars		3 months ended 3 months ended 3 months ended 6 months ended 6 months ended Previous Year			(Rs. In Million, except per equity share data)
		30.09.2018	30.06.2018	30.09.2017	30.09.2018	30.09.2017	ended
							31.03.2018
		(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Audited)
1	Income
	Revenue from operations	13,210	11,238	9,686	24,448	19,023	41,297
	Other income	544	688	508	1,232	1,048	2,062
	Total Income	13,754	11,926	10,194	25,680	20,071	43,359
2	Expenses
	a) Cost of raw materials and packing materials consumed	4,369	4,411	3,077	8,780	6,624	14,450
	b) Purchases of traded goods	434	280	718	714	1,222	2,328
	c) Changes in inventories of finished goods, work-in-progress and	(336)	(352)	(19)	(688)	(475)	(417)
	stock-in-trade
	d) Excise duty			-		63	63
	e) Employee benefits expense	2,889	2,614	2,255	5,503	4,388	9,311
	f) Finance costs	188	176	138	364	299	615
	g) Depreciation and amortisation expenses	1,122	991	936	2,113	1,924	3,851
	h) Other expenses	3,290	2,527	2,208	5,817 22,603	4,207	9,018
	Less: Recovery of cost from co-development partners (net)	11,956 (832)	10,647 (620)	9,313 (376)	(1,452)	18,252 (750)	39,219 (1,747)
	Total expenses	11,124	10,027	8,937	21,151	17,502	37,472
3	Profit before share of profit of joint venture and associates, exceptional Item s	2,630	1,899	1,257	4,529	2,569	5,887
	and tax (1-2)
4	Share of profit of joint venture and associates, net	(9)	5	59	(4)	100	213
5	Profit before t ax and exceptional Items (3·4)	2,621	1,904	1,316	4,525	2,669	6,100
6	Exceptional items (net) [refer note 4 and 5 below]	1,888 4,509	1,904	1,316	1,888 6,413	2,669
7	Profit before t ax (5-6) Tax expense	732	521	425	1,253	801	6,100
8 9	Profit for the period I ea~ before non-controlling Interest (7-8)	3,777	1,383	891	5,160	1,868	1,569 4,531
10	Non-controlling interest	(230)	(186)	(203)	(416)	(367)	(807)
11	Profit for t he period I year (9-10)	3,547	1,197	688	4,744	1,501	3,724
12	Other comprehensive Income
	A (i) Items that will not be reclassified to profit or loss	148	(39)	(14)	109	(28)	(19)
	(ii) Income tax relating to items that will not be reclassified to profit or loss	82	8	1	90	2	6
	B (i) Items that will be reclassified to profit or loss	(1,261)	(1,345)	62	(2,606)	122	166
	(ii) Income tax relating to items that will be reclassified to profit or loss	425	403	12	828
	Total other comprehensive Income, net of t ax	(606)	(973)	61	(1,579)	96	153
13	Non-controlling interest	380	373	1	753	(15)	(23)
14	Other comprehensive Income attributable to Shareholders (12+13)	(226)	(600)	62	(826)	81	130
	Total comprehensive Income attributable t o:
	Shareholders of the Company	3,321	597	750	3,918	1,582	3,854
	Non-controlling Interest	(150)	(187) 410	202 952	(337) 3,581	382 1,964	830
	Total comprehensive income Paid-up equity share capital (Face value of Rs. 5 each)	3,171 3,000	3,000	3,000	3,000	3,000	4,684
15 16	Reserves i.e. Other equity						3,000 48,808
17	Earnings per share (of Rs. 5 each)		(not annualised) (not annualised) (not annualised) (not annualised) (not annualised)				(annualised)
	(a) Basic	6.00	2.03	1.17	8.03	2.55	6.31
	(b) Diluted	5.95	2.01	1.16	7.96	2.53	6.27
	See accompanying notes to the financial results

BIOCON LIMITED

BIOCON LIMITED Consolidated Balance Sheet

		(Rs. in Million)
	As at Se11tember 30, 2018 (Unaudited)	As at March 31, 2018 (Audited)
A ASSETS
1 Non-current assets
(a) Property, plant and equipment	41,445	36,297
(b) Capital work-in-progress	8,467	7,789
(c) Goodwill	264	264
(d) Other intangible assets	653	434
(e) Intangible assets under development	6,346	5,239
(f) Investments in associates and a joint venture	634	638
(g) Financial assets	4,124
Investments Derivative assets	609	1,109
Other financial assets	284	248
(h) Income t ax asset, net	1,350	1,273
(i) Deferred tax asset, net	3,835	1,934
(j) Other non-current assets	3,261	3,186
Non-current assets	71,272	58,411
2 Current assets
(a) Inventories	8,776	7,225
(b) Financial assets
Investments	4,700	6,114
Trade receivables	10,389	10,639
Ca.sh and cash equivalents	5,763	5,012
Other bank balances	6,595	8,216
Derivative assets	574 4,814	995
Other financial assets (c) Other current assets	1,556	1,915 1,370
Current assets	43,167	41,486
TOTAL- ASSETS	1,14,439	99,897
B EQUITY AND LIABILITIES
1 Equity
(a) Equity share capital	3,000	3,000
(b) Other equity	54,036	48,808
Equity attributable to owners of the Company	57,036	51,808
Non-controlling interests Total Equity	4,855 61,891	4,677 56,485
2 Non-current liabilities (a) Financial liabilities
Borrowings	18,464	17,898
Derivative liability	1,802	183
Other financial liabilities	1	2
(b) Provisions	531	493
(c) Other non-current liabilities Non-current liabilities	6,333 27,131	3,423 21,999
3 Current liabilities (a) Financial liabilities
Borrowings	2,702	1,303
Trade payables	10,728	10,053
Derivative liability	669	62
Other financial liabilities	6,749	5,563
(b) Provisions	599	465
(c) Income tax liability, net	1,954	891
(d) Other current liabilities Current liabilities	2,016 25,417	3,076 21,413
/
TOTAL - EQUITY AND LIABILITIES	1,14,439

BIOCON LIMITED

CIN: l24234KA1978PLC003417 Website: www.blocon.com

Registered office :20TH KM HOSUR ROAD, ELECTRONIC CITY P.O., BAN GALORE· S60 100

SEGMENT DETAILS OF UNAUDITED CONSOLIDATED RESULTS FOR THE QUARTER AND HALF YEAR ENDED SEPTEMBER 30, 2018

							(Rs. In Million)
		3 mont hs	3 months	3 months	6 months	6 months	Previo us Year
	Particulars	e nded	e nded	e nded	ended	e nded	e nded
		30.09.2018	30.06.2018	30.09.2017	30.09.2018	30.09.2017	31.03.2018
		(Unaudite d)	(Unaudited)	(Unaudited)	(Unaudited)	(Una udited)	(Audited)
	Segment revenue
a.	Small molecules	4,319	4,001	3,505	8,320	7,134	15,077
b.	Biologics	3,675	2,497	1,557	6,172	3,396	7,702
c.	Branded formulations	1,639	1,473	1,759	3,112	3,063	6,115
d.	Research services	4,186	4,060	3,352	8,246	6,263	14,231
	Total	13,819	12,031	10,173	25,850	19,856	43,125
	less: Inter-segment revenue	(609)	(793)	(487)	(1,402)	(833)	(1,828)
	Net sales I Income from continuing operations	13,210	11,238	9,686	24,448	19,023	41,297
	Segment results
	Profit before interest and tax from each segment
a.	Small molecules	869	728	467	1,597	1,171	2,843
b.	Biologics II	908	269	(205)	1,177	(265)	(119)
c.	Branded formulations#	118	181	186	299	226	428
d.	Research services	969	831	944	1,800	1,704	3,725
	Total	2,864	2,009	1,392	4,873	2,836	6,877
	less: Interest	105	97	86	202	196	388
	Other un-allocable expenditure I (income), net Profit before tax a nd before exceptional items#	138	8	(10)	146	(29)	389
		2,621	1,904	1,316	4,525	2,669	6,100
	Segment assets
a.	Small molecules	19,116	17,916	17,062	19,116	17,062
b	Biologics	43,737	39,082	33,217	43,737	33,217	17,681 36,038
c.	Branded formulations	3,329	3,166	2,931	3,329	2,931	2,927
d	Research services	32,905	33,582	27,710	32,905	27,710	31,890
		99,087	93,746	80,920	99,087	80,920	88,536
e.	Unallocable	15,352	14,824	13,830	15,352	13,830	11,361
	Total segment a ssets	1,14,439	1,08,570	94,750	1,14,439	94,750	99,897
	Segment liabilities
a.	Small molecules	4,833	4,719	4,153	4,833	4,153	4,320
b.	Biologics	9,503	9,896	6,560	9,503	6,560	7,704
c.	Branded formulations	2,303	2,189	2,085	2,303	2,085	1,872
d	Research services	17,094	17,053	12,285	17,094	12,285	14,686
		33,733	33,857	25,083	33,733	25,083	28,582
e.	Unallocable	18,815	16,193	16,158	18,815	16,158	14,830
	Total segment liabilities	52,548	50,050	41,241	52,548	41,241	43,412
	Capital employed
a.	Small molecules	14,283	13,197	12,909	14,283	12,909	13,361
b	Biologics	34,234	29,186	26,657	34,234	26,657	28,334
c.	Branded formulations	1,026	977	846	1,026	846	1,055
d	Research services	15,811	16,529	15,425	15,811	15,425	17,204
		65,354	59,889	55,837	65,354	55,837	59,954
e.	Unallocable	(3,463)	(1,369)	(2,328)	(3,463)	(2,328)	(3,469)
	Tota l capita l employed	61,891	58,520	53,509	61,891	53,509	56,485
	#includes sha re of profit/loss of joint venture and
	associates

Biocon Limited

Unaudited financial results for the quarter and half year ended September 30, 2018

Notes:

• 1. The unaudited standalone and consolidated financial results for the quarter and half year ended September 30, 2018 in respect of Biocon Limited ('t he Company') have been reviewed by the Audit Committee and approved by t he Board of Directors of the Company at their respective meetings held on October 25, 2018. The above results have been subjected to limited review by the statutory auditors of the Company. The reports of the statutory auditors are unqualified.
• 1. These financial results have been prepared in accordance with Indian Accounting Standards ('lnd AS') prescribed under Section 133 of the Companies Act, 2013 and other accounting principles generally accepted in India and in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
• 1. The consolidated financial results include the financial results of the parent company Biocon Limited and the financial results of the following subsidiaries:
• Syngene International Limited ('Syngene')
• Biocon Research Limited ("BRL")
• Biocon Pharma Limited
• Biocon Academy
• Biocon SA
• Biocon SDN. BHD
• Biocon FZ LLC
• Biocon Biologics Limited
• Biocon Pharma Inc .
• Biocon Biologics India Limited
• Biocon Healthcare SDN. BHD
• Syngene USA Inc .

In addit ion to the above, the consolidated financial results also include the financial results in respect of Biocon India Limited Employee Welfare Trust and Syngene Employees Welfare Trust. The Company has also accounted for its share of interest in the joint venture i.e. NeoBiocon FZ-LLC and share of investment in the associates i.e. latrica Inc. and Equillium Inc., (also refer note 5) if any under the equity method. Biocon Limited, its subsidiaries, associate and a joint vent ure are collectively referred to as 'the Group'.

1. Pursuant to a fire incident on December 12, 2016 at Syngene, certain fixed asset s, inventory and other contents in one of t he buildings were damaged. Syngene lodged an estimate of loss with the insurance company and the survey is currently ongoing. The Company had recorded a loss of Rs. 1,032 million arising from such incident ti ll March 31, 2018. Syngene has recorded a further loss of Rs. 23 million during the quarter resulting in a total loss of Rs. 1,055 million from the date of the incident t ill September 30, 2018. Syngene also recognised a minimum Insurance claim receivable for equivalent amounts in t he respect ive periods. The aforementioned loss and t he corresponding credit arising from insurance claim receivable has been presented on a net basis (Rs. Nil) under Exceptional items in these financial results.

In addition, Syngene is in the process of determining its final claim for loss of fixed assets and Business Interruption and has accordingly not recorded any further claim arising therefrom at this stage.

Biocon limited

Unaudited financial results for the quarter and half year ended September 30, 2018

• 1. During the year ended March 31, 2018, the Group, had accounted for its 19.5% equity investment in Equillium Inc. as an associate. During the quarter ended September 30, 2018, Equillium initiated its initial public offering (IPO) process and consequently had changes in its Board composition, which resulted in loss of significant influence over the investee. In accordance with lnd AS 23: Investments in Associates and Joint Ventures, the Company fair valued its investment on the date of loss of significant influence which resulted in a gain of Rs.1,707 million, net of tax expenses of Rs. 181 million for the quarter and half year ended September 30, 2018, which has been disclosed as an Exceptional item in these financial results. The Group, going forward has designated its investment in equity of Equillium to be accounted for at Fair value through other comprehensive income (FVOCI). Subsequent to the quarter end, Equillium completed its IPO and listed on NASDAQ on October 12, 2018.
• 1. Segment Reporting in Consolidated financial results: Based on the "management approach" as defined in lnd AS 108-0perating Segments, the Chief Operating Decision Marker evaluates the Group's performance and allocates resources based on an analysis of various performance indicators by business segments. Accordingly, information has been presented along these business segments. The accounting principles used in the preparation of these financial results are consistently applied to record revenue and expenditure in individual segments.
• . . 7. During the quarter and half year ended September 30, 2018, the Company along with its subsidiary BRL sold 1,000,000 and 6,597,130 equity shares of Rs. 10 each of Syngene respectively in the open market. Post the sale, the Company and its subsidiary's holding in equity shares of Syngene has reduced to 70.24% as on September 30, 2018. Gain arising from such sale of equity shares, net of related expense and cost of equity shares amounting to Rs. 347 and Rs. 1,987 has been recorded as exceptional item in the standalone financial results for the quarter and half year ended September 30, 2018.

The gain arising from such sale of equity shares, net of related expenses and cost of equity shares, for the quarter and half year ended September 30, 2018 has been accounted in equity reserves in the consolidated financial results for the quarter and half year ended September 30, 2018, as there is no loss of control.

1. Pursuant to the requirements of lnd AS 115: Revenues from Contracts with Customers, the Group evaluated its open arrangements on out-licensing with reference to upfront non-refundable fees received in earlier periods and concluded that some of the performance obligations may not be distinct and hence would need to be bundled with the subsequent product supply obligations.

Accordingly, the Group has recognised an incremental deferred revenue relating to such open contracts. The adoption of this standard and the consequential impact on change in some of the licensing arrangements did not have a material impact on the Revenue from Operations and results for the quarter and half year ended September 30, 2018. The cumulative effect of transition recorded as of April 1, 2018 on retained earnings is Rs. 1,580 with the corresponding effect on deferred revenue and deferred tax asset amounting to Rs. 1,847 and Rs. 267 respectively. Comparative periods were not restated given the Group adopted the standard using the cumulative effect approach.

Biocon Limited

Unaudited financial results for the quarter and half year ended September 30, 2018

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

Bangalore, October 25, 2018