We are pleased to present Thirty-third Annual Report on business and
 operations together with the audited financial statements and the
 auditors report of your company for the financial year ended 31st
 March 2011.
 
 The financial highlights for the year under review are given below:
 
 Results of Operations:
 
                                                      Rs. in Millions
 Particulars for the year ended March 31,             2011       2010
 
 Total Revenues                                     15,921     12,289
 
 Total Expenditure                                   9,824      8,710
 
 Profit before Interest, Depreciation and Tax        6,097      3,579
 
 Interest                                               24         20
 
 Depreciation                                          902        797
 
 Profit before Tax                                   5,171      2,762
 
 Income Tax                                            579        278
 
 Profit after Tax                                    4,592      2,484
 
 Surplus b/f from previous year                      9,470      8,009
 
 Profit available for appropriation                 14,062     10,493
 
 Proposed dividend                                     900        700
 
 Tax on proposed divided                                90         74
 
 Transfer to General Reserve                           459        248
 
 Balance in Profit and Loss account                 12,613      9,470
 
 
 Consolidated Results (Under Indian GAAP):
 
                                                      Rs. in Millions
 Particulars for the year ended March 31,             2011       2010
 
 Total Revenues                                     28,137     24,048
 
 Total Expenditure                                  21,841     18,963
 
 Profit before Interest, Depreciation and Tax        6,296      5,085
 
 Interest                                              257        169
 
 Depreciation                                        1,568      1,401
 
 Profit before Tax and Exceptional Items             4,471      3,515
 
 Income Tax                                            721        487
 
 Profit after Tax, before Minority Interest           3750      3,028
 
 Minority Interest                                    (75)       (96)
 
 Profit after Tax                                    3,675      2,932
 
 
 For the year ended March 31, 2011 consolidated revenues grew by 17%
 driven by a strong growth in biopharmaceutical segment, EBITDA grew by
 24% and Profit after tax (PAT) grew by 25% to Rs. 3,675 million as
 compared to Rs. 2,932 million in the previous financial year.
 
 The highlight of this past year was the strategic partnership with
 Pfizer for taking our biosimilar insulin global.
 
 The standalone financial statements refect higher profits on account of
 transfer of certain intangible to subsidiaries within the group, which
 are eliminated upon consolidation.
 
 A detailed performance analysis is also discussed in the Management
 Discussion and Analysis, which is annexed to this report.
 
 Appropriations
 
 Dividend
 
 Directors are pleased to recommend a final dividend of Rs. 3.00 per
 equity share, which is in addition to the interim dividend of Rs. 1.50
 per share takes the total dividend payout to 90% on the paid up equity
 capital of the Company.
 
 Transfer to Reserves
 
 We propose to transfer Rs. 459 millions to the General Reserves and the
 balance of Rs. 12,613 million is proposed to be retained in the profit
 and loss account.
 
 Business Operations Overview and Outlook:
 
 During the year, Companys revenue increased by 17% from Rs. 24,048
 million to Rs. 28,137 million. The growth in biopharmaceuticals sales
 was driven by a significant increase in sale across business segments
 including statins, immunosuppresants and insulins. The
 immunosuppresants segment specifically grew by over 30%. The domestic
 branded formulations business grew 36% on increasing market share of
 key brands, introduction of new products and the launch of two new
 divisions – Immunotherapy and Comprehensive Care.
 
 We have sought both research and marketing partnerships as a way to
 access global markets and we have forged some key strategic
 partnerships this year. The most visible and high-profile partnership
 that we recently announced was with Pfizer to commercialize our
 insulins portfolio which is going to be a very important growth driver
 in the foreseeable future.
 
 Industry reports cite the insulin market at about US$ 15 billion today
 and estimated to grow to a size of US$ 20 billion by 2020. The insulins
 space accounts for 46% of the total diabetes drug segment. We estimate
 this business will continue to grow at about 6% per annum going
 forward, factoring the advent of biosimilar insulins. Biocons
 partnership with Pfizer aims at addressing this very large opportunity
 first in the emerging markets, which offer sizeable volume and
 thereafter at a later stage, enter the developed markets.  Clinical
 trials for recombinant human insulin for the European Market are in
 progress and patient recruitments are currently underway.  Biocons
 insulin business in India is also beginning to gain traction and
 although our insulins business is merely seven years old, we have
 steadily gained market share. In volume terms, we have around 11% share
 in the insulin vial segment and around 13% market share in the glargine
 vial segment. While the market has grown 11%, Biocons sales in the
 segment has grown by over 12%.
 
 Another significant event in this past year was the supply agreement
 with Optimer Pharmaceuticals for the supply of Fidaxomicin API.  Biocon
 is the currently sole supplier of this product for certain regulated
 markets and has been involved with this project from 2005.
 
 We have made considerable progress in our partnership with Mylan for
 developing biosimilar monoclonal antibodies for the global markets. In
 addition to this, we have some very key strategic research partnerships
 with Amylin, Vaccinex, the Center for Immunology in Havana, and
 IATRICa. What really makes this whole partnering opportunity special
 for us is that we can develop all these programs leveraging Indias
 costs and clinical base in a very cost-effective manner, and we are
 able to take them first to the emerging markets and then on to the
 regulated markets as the program advances.
 
 Within the novel pipeline, the Company released encouraging preliminary
 data from a recently concluded Phase III clinical study conducted in
 India on IN-105, its novel oral insulin candidate for the treatment of
 diabetes. Initial data analysis show that an unexpectedly high placebo
 effect prevented IN-105 from meeting its primary end point of lowering
 HbA1c as compared to placebo by a margin effect.  However, multiple
 secondary endpoints on both efficacy and safety were met, further
 strengthening the emerging profile of IN-105.
 
 Our coveted T1h program for a novel Anti-CD6 targeting monoclonal
 antibody is in Phase III clinical trials for Psoriasis. Additionally,
 our novel anti-CD20 molecule (BVX 20 with Vaccinex) has completed
 preclinical studies and we are scheduled to commence clinical trials
 this year. Our novel programs are expected to unlock substantial value
 upon licensing in the coming years.
 
 Subsidiaries and Joint Ventures:
 
 Syngene International Limited:
 
 Syngene continues to be one of the leading contract research
 organizations in the country which offers integrated services across
 discovery and development continuum. State-of-the-art infrastructure,
 talented and experienced scientific and techno-commercial team,
 flexibility of business models, robust communication systems, ability
 to consistently deliver with quality and speed are some of the reasons
 why Syngene has become a preferred partner of choice for several small,
 medium and large companies around the world. In addition to
 pharmaceutical companies, Syngene has developed a broad customer base
 in other industries including fine chemical, petrochemical, agro,
 cosmetic and electronic companies.
 
 During the year, Syngene continued to successfully manage large
 relationships including those with Bristol-Myers Squibb, Merck and
 DuPont Agro division which involved various aspects of drug discovery
 and development research.
 
 With the emergence of biologics over past few years as important
 medicinal interventions, Syngene also offer services in discovery and
 development of biologic molecules. Syngenes state-of-the-art biologics
 pilot plant is capable of delivering clinical trial material of both
 bacterial and mammalian origin.
 
 During the financial year 2010-11, Syngene registered a strong growth
 of 21% in revenues from Rs. 2,675 million to Rs. 3,231 million.
 Operational Margin (EBITDA) increased from Rs. 877 million to Rs. 1,005
 million representing a 14% increase during the year.
 
 Increased charge on account of depreciation has led to a marginal
 decline in the net profit which was at Rs. 283 million for the year
 against of Rs. 308 million for the previous year.
 
 Clinigene International Limited:
 
 For the year under review, Clinigene registered revenues of Rs. 289
 million Clinigene had a challenging year and has incurred a loss of Rs.
 37 million on account unfavourable market conditions, delay in study
 startup and intensive pricing pressures.
 
 Clinigene is continuing to evolve and adapt its capability platforms
 and service offerings against a background of continued macro market
 pressure as global R&D spends are being reduced, consolidation of
 market players continues and the shift to globally capable preferred
 partnerships accelerates. In addition to our standard service
 platforms, we have identified several more specialized areas, for
 example patient based early studies, complex BA/BE studies and
 immunoanalytical services where Clinigene offers strong capabilities.
 We believe that, these new speciality services, which have relatively
 high entry barriers, will allow us to drive new and differential
 revenue opportunities.
 
 Biocon Biopharmaceuticals Private Limited:
 
 During the year Biocon Biopharmaceuticals Private Limited (BBPL) became
 a wholly owned subsidiary of the Company.
 
 For the year under review, BBPL earned revenues of Rs. 491 million as
 against Rs. 381 million in the previous year. The net profits for the
 year stood at Rs. 192 million as against Rs. 26 million in the previous
 year.
 
 Biocon Research Limited:
 
 Biocon Research Limited (BRL) is a wholly owned subsidiary set up to
 undertake discovery and development research work in biologics,
 antibody molecules and proteins.
 
 For the current year BRL registered revenues of Rs. 649 million as
 against Rs. 392 million in the previous year. BRL continues to progress
 the development activity on the monoclonal antibody program in joint
 collaboration with Mylan. BRL has reported a net loss of Rs. 322
 Million for the year ended March 31, 2011 against a loss of Rs. 51
 million in the previous year.
 
 Being a research driven enterprise, the Company is in the initial stage
 of operations and has enlarged its scope to other challenging research
 projects during the year.
 
 Biocon SA:
 
 Biocon SA, a wholly owned subsidiary in Switzerland is primarily
 engaged in development and commercialisation of biopharmaceuticals
 across the globe. Clinical Development of Insulin is currently ongoing
 in the European region.
 
 AxiCorp GmbH:
 
 AxiCorp is a specialized Pharma marketing and distribution company
 based in Germany.
 
 For the current financial year AxiCorp revenues rose from Rs. 9,117
 million to Rs. 9,800 million. The Company earned a net profit of Rs.
 353 million for the year against Rs. 299 million for the previous year.
 Given the synergies brought about by the Pfizer partnership, the
 Company has decided to divest its 78% stake in AxiCorp to the existing
 group of promoter shareholders.
 
 NeoBiocon FZ LLC:
 
 NeoBiocon FZ LLC is a pharmaceutical research and marketing company
 based at Abu Dhabi. Incorporated in January 2008, NeoBiocon is an equal
 joint venture with Dr. B.R. Shetty of NeoPharma.
 
 During the current year, NeoBiocon registered significant growth in
 revenue to Rs. 60 million and a net profit of Rs. 21 million.
 
 In addition to launching oncology products. NeoBiocons range of
 branded generic products, now approved by the UAE Ministry of Health,
 has been successfully launched to address the therapeutic segments of
 cardiology, diabetology and infection management.
 
 Biocon SDN. BHD.
 
 During the year, Company has incorporated a wholly owned subsidiary in
 Malaysia to set up a state of the art manufacturing facility at
 BioXcell a biotechnology park promoted by the Government of Malaysia.
 
 In the first phase of capital outlay the Company envisages an
 investment of US$ 161 million and expects the facility to go on stream
 by year 2015.
 
 Consolidated financial statements:
 
 The consolidated financial statements have been prepared by the Company
 in accordance with the Accounting Standards as prescribed by the
 Companies (Accounting Standards) Rules, 2006. The audited consolidated
 financial statements together with Auditors Report thereon also form
 part of the Annual report.
 
 Accounts of subsidiary companies:
 
 The Ministry of Company Affairs has granted General Exemption to
 Companies from attaching the financial accounts of the subsidiary
 companies to this Report pursuant to Section 212 of the Companies Act,
 1956. However, a statement showing the relevant details of the
 Subsidiaries is enclosed and is a part of the Annual Report. The
 members can write to the Company for obtaining the annual accounts of
 the subsidiary companies and copies will also be available for
 inspection at the registered office in Bangalore, India.
 
 Employees Stock Option Plan (ESOP):
 
 Pursuant to the provisions of Guideline 12 of the Securities and
 Exchange Board of India (Employee Stock Option Scheme and Employee
 Stock Purchase Scheme), Guidelines, 1999, as amended, the details of
 stock options as on March 31, 2011 are set out in the Annexure to the
 Directors Report.
 
 Corporate Governance:
 
 We strive to attain high standards of corporate governance while
 interacting with all our stakeholders. The Company has complied with
 the corporate governance code as stipulated under the listing agreement
 with the stock exchanges. A separate section on Corporate Governance
 along with a certificate from the auditors confirming the level of
 compliance is annexed and forms a part of the Directors report.
 
 Evaluation of Board effectiveness:
 
 The evaluation of the performance of the Board is periodically carried
 out by the Chairman of the Audit Committee to measure the effectiveness
 of the Board. Dr Bain has considerable experience in Board reviews and
 has carried out similar exercises for other companies in the United
 Kingdom and elsewhere.
 
 The review conducted earlier showed overall confidence in the company
 and the Boards oversight of corporate strategies. Action plans for
 certain improvements in key areas were reviewed and evaluated for
 implementation.
 
 Directors:
 
 Dr. Neville Bain and Mr. Bala Manian shall retire by rotation at the
 ensuing Annual General Meeting, and being eligible, offer themselves
 for re-appointment.
 
 Mr. Russell Walls was inducted as Additional Director by the board of
 directors on 28th April 2011. A resolution confirming his appointment
 as a director liable to retire by rotation is proposed at the Annual
 General Meeting.
 
 Auditors:
 
 The Statutory Auditors M/s. S. R. Batliboi & Associates (Firm
 Registration No. 10104910), Chartered Accountants, Bangalore, retire at
 the ensuing Annual General Meeting, and have confirmed their
 eligibility and willingness to accept office, if re-appointed.
 
 Cost Audit:
 
 Pursuant to Section 233B of the Companies Act, 1956, the Central
 Government has prescribed cost audit of the Companys bulk drug and
 formulation division.
 
 The board has appointed the Cost Auditors and they have been duly
 approved by the Central Government.
 
 Management Discussion and Analysis Report:
 
 The report as required under the Listing agreements with the Stock
 Exchanges is annexed and forms part of the Directors Report.
 
 Cumulative disclosure under the stock option scheme as on March 31,
 2011:
 
 Disclosure of the particulars of stock options schemes as on the above
 date, as per SEBI guidelines:
 
 Particulars                    Third Grant   Fourth Grant   Fifth Grant
 
 a.  i) Options Granted (Post 
     equity split and bonus, 
     net of                         444,600      5,701,628       235,428
     options cancelled)
 
 b.  Exercise price
 
     i) Pre-bonus of 2008      Rs. 315 each   20% discount  Market Price
                                                 to Market    on date of
                                                  Price on         Grant
                                             date of Grant
 
     ii) Post-bonus of 2008  Rs. 157.5 each
 
 c.  Options vested                 426,450      4,411,433             -
 
 d.  Options exercised              340,275      3,068,317             -
 
 e.  Total number of Equity 
     Shares to be transferred 
     from the                       340,275      3,068,317             -
     ESOP Trust as a result of 
     exercise of options
 
 f.  Options lapsed                 104,950      1,721,946             -
 
 g.  Variation in the terms of 
     options                           None           None          None 
 
 h.  Money realized by exercise 
     of options (Rs. lacs)              909          4,459             - 
 
 i.  Option pending exercise            Nil      1,343,115             - 
 
 j.  Total number of options in force   Nil      1,590,526       235,428 
 
 k.  Person-wise details of options 
     granted to:
 
 i.  Directors and key managerial 
     employees                          Nil     Please see           Nil 
                                                 Table (1)
                                                 below for
                                                   details 
                                                 regarding 
                                                   options 
                                                   granted
                                                    to key 
                                                managerial 
                                                 employees
 
 l.  Diluted Earnings Per Share
     (EPS) pursuant to issue of 
     shares on exercise of options   Not applicable since shares will be 
                                      transferred by the ESOP Trust upon
                                         exercise of the options and the 
                                   Company will not be required to issue 
                                                          any new shares
 
 m.  Vesting schedule  25% each in April of     Year 1-25%    Year 1-25%
                       2005, 2006, 2007 and
 
                                                Year 2-35%    Year 2-35%
 
                                       2008.
 
                                                Year 3-40%    Year 3-40%
 
                                             (Year 1 being (Year 1 being
                                              3 years from 3 years from
                                           date of joining      date of 
                                            or 1 year from     joining)
                                            July, 19 2006,
                                       whichever is later)
 
 n.  Lock-in              No lock-in, subject to a minimum 
                                 vesting period of 1 year.
 
 
 There are no employees who have received a grant in any one year
 amounting to 5% or more of the options granted during that year.
 
 There are no employees who have been granted options during any one
 year equal to or exceeding 1% of the issued capital (excluding
 outstanding warrants and conversions) of the Company at the time of
 grant.
 
 Consequent to the bonus shares in the ratio 1:1 on Sept 15, 2008,
 employees who had not exercised their options were credited with bonus
 entitlements based on ESOP Plan (Eligibility for corporate action).
 
 Table (1) details regarding options granted to key managerial employees
 are provided below:
 
 Sl. Name of Director or key managerial personnel   Fourth Grant (No. of
 No.                                                Options Granted)* 
 
 Key managerial employees
 
 1.  Mr. Chinappa M B                                    75,000*
 
 2.  Mr. Sandeep Rao                                     60,000*
 
 3.  Mr. Harish Iyer                                     60,000*
 
 
 *Adjusted for 2008 Bonus issue.
 
 Fixed Deposits:
 
 The Company has not accepted any fixed deposits from public.
 
 Directors responsibility statement:
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956, the Board of
 Directors hereby confirm as under:
 
 i) In preparation of annual accounts, the applicable accounting
 standards have been followed along with proper explanation relating to
 material departures, if any;
 
 ii) We have selected such accounting policies and applied them
 consistently and made judgments and estimates that are reasonable and
 prudent so as to give a true and fair view of the state of affairs of
 the Company at the end of the financial year and of the profit of the
 Company for that period;
 
 iii) We have taken proper and sufficient care for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities;
 
 iv) We have prepared the annual accounts on a going concern basis.
 
 Particulars of Research and Development, Conservation of energy,
 technology absorption etc:
 
 Particulars required under Section 217 (I) (e) of the Companies Act,
 1956 read with Rule 2 of the Companies (Disclosure of Particulars in
 the Report of Board of Directors) Rules, 1988 is given in the annexure
 to the Report.
 
 Particulars of employees
 
 In terms of the provisions of Section 217(2A) of the Companies Act,
 1956 read with Companies (Particulars of Employees) Rules, 1975, as
 amended, is annexed and is a part of this report.
 
 However, having regard to the provisions of Section 219(1)(b)(iv) of
 the said Act, the Annual Report excluding the aforesaid information is
 being sent to all the members of the Company and others entitled
 thereto. Any member interested in obtaining such particulars may write
 to the Company Secretary at the registered office of the Company.
 
 Acknowledgements
 
 The Board greatly appreciates the commitment and dedication of
 employees at all levels who have contributed to the growth and success
 of the Company. We would also thank all our clients, vendors,
 investors, bankers and other business associates for their continued
 support and encouragement during the year.
 
 We also thank the Government of India, Government of Karnataka,
 Ministry of Information Technology and Biotechnology, Ministry of
 Commerce and Industry, Ministry of Finance, Department of Scientific &
 Industrial Research, Customs and Excise Departments, Income Tax
 Department, CSEZ, LTU Bangalore and all other Government agencies for
 their support during the year and look forward to their continued
 support in the future.
 
 
 
 
 For and on behalf of the Board
 
 
 
 Kiran Mazumdar-Shaw                            John Shaw
 Chairman and Managing Director             Vice Chairman
 
 
 
 April 28, 2011