A disclosure for a contingent liability is made when there is a possibleobligation or a present obligation that may, but probably will not,require an outflow of resources. When there is a possible obligationor a present obligation in respect of which the likelihood of outflow ofresources is remote, no provision or disclosure is made.
A provision is recognised if, as a result of a past event, the Companyhas a present legal or constructive obligation that can be estimatedreliably, and it is probable that an outflow of economic benefits willbe required to settle the obligation. Provisions are determined bydiscounting the expected future cash flows (representing the bestestimate of the expenditure required to settle the present obligationat the balance sheet date) at a pre-tax rate that reflects current marketassessments of the time value of money and the risks specific to theliability. The unwinding of the discount is recognised as finance cost.Expected future operating losses are not provided for.
Onerous contracts
A contract is considered to be onerous when the expected economicbenefits to be derived by the Company from the contract are lowerthan the unavoidable cost of meeting its obligations under thecontract. The provision for an onerous contract is measured at thepresent value of the lower of the expected cost of terminating thecontract and the expected net cost of continuing with the contract.Before such a provision is made, the Company recognises anyimpairment loss on the assets associated with that contract.
i. Sale of goods
Revenue is recognised when a promise in a customer contract(performance obligation) has been satisfied by transferringcontrol over the promised goods to the customer. Control overa promised goods refers to the ability to direct the use of, andobtain substantially all of the remaining benefits from, thosegoods. Control is usually transferred upon shipment, deliveryto, upon receipt of goods by the customer, in accordance withthe delivery and acceptance terms agreed with the customers.However, in certain cases, revenue is recognized on sale ofproducts where shipment is on hold at specific request of thecustomer provided performance obligation conditions has beensatisfied and control is transferred, with customer taking title ofthe goods. The amount of revenue to be recognised (transactionprice) is based on the consideration expected to be receivedin exchange for goods, excluding amounts collected on behalfof third parties such as goods and services tax or other taxesdirectly linked to sales. If a contract contains more than oneperformance obligation, the transaction price is allocated toeach performance obligation based on their relative stand-aloneselling prices. Revenue from product sales are recorded net ofallowances for estimated rebates, cash discounts and estimatesof product returns, all of which are established at the time of sale.
For contracts with distributors, no sales are recognised whengoods are physically transferred to the distributor under a
consignment arrangement, or if the distributor acts as an agent.In such cases, sales are recognised when control over the goodstransfers to the end-customer, and distributor's commissions arepresented within marketing and distribution.
The consideration received by the Company in exchange forits goods may be fixed or variable. Variable consideration isonly recognised when it is considered highly probable that asignificant revenue reversal will not occur once the underlyinguncertainty related to variable consideration is subsequentlyresolved.
ii. Milestone payments and out licensing arrangements
The Company enters into certain dossier sales, licensing andsupply arrangements that, in certain instances, include certainperformance obligations. Based on an evaluation of whetheror not these obligations are inconsequential or perfunctory, theCompany recognise or defer the upfront payments receivedunder these arrangements.
Income from out-licensing agreements typically arises from thereceipt ofupfront, milestone and other similar payments from thirdparties for granting a license to product- or technology- relatedintellectual property (IP). These agreements may be enteredinto with no further obligation or may include commitments toregulatory approval, co-marketing or manufacturing. These maybe settled by a combination of upfront payments, milestonepayments and other fees. These arrangements typically alsoconsist of subsequent payments dependent on achievingcertain milestones in accordance with the terms prescribed inthe agreement. Milestone payments which are contingent onachieving certain clinical milestones are recognised as revenueseither on achievement of such milestones, if the milestones areconsidered substantive, or over the period we have continuingperformance obligations, if the milestones are not consideredsubstantive. Whether to consider these commitments as a singleperformance obligation or separate ones, or even being in scopeof Ind-AS 115'Revenues from Contracts with Customers, is notstraightforward and requires some judgement. Depending onthe conclusion, this may result in all revenue being calculatedat inception and either being recognised at point in time orspread over the term of a longer performance obligation.Where performance obligations may not be distinct, this willbundled with the subsequent product supply obligations. Thenew standard provides an exemption for sales-based royaltiesfor licenses of intellectual property which will continue to berecognised as revenue as underlying sales are incurred.
The Company recognises a deferred income (contract liability)if consideration has been received (or has become receivable)before the company transfers the promised goods or servicesto the customer. Deferred income mainly relates to remainingperformance obligations in (partially) unsatisfied long-termcontracts or are related to amounts the Company expects toreceive for goods and services that have not yet been transferredto customers under existing, non-cancellable or otherwiseenforceable contracts.
Contract assets are recognised when there is excess of revenueearned over billings on contracts. Contract assets are classified asunbilled receivables (only act of invoicing is pending) when thereis unconditional right to receive cash, and only passage of time isrequired, as per contractual terms.
iii. Royalty income and profit share
The Royalty income and profit share earned through a License orcollaboration partners is recognised as the underlying sales arerecorded by the Licensee or collaboration partners.
iv. Sales Return Allowances
The Company accounts for sales return by recording anallowance for sales return concurrent with the recognition ofrevenue at the time of a product sale. The allowance is based onCompany's estimate of expected sales returns. The estimate ofsales return is determined primarily by the Company's historicalexperience in the markets in which the Company operates.
v. Dividends
Dividend is recognised when the Company's right to receive thepayment is established, which is generally when shareholdersapprove the dividend.
vi. Rental income
Rental income from investment property is recognised instatement of profit and loss on a straight-line basis over the termof the lease except where the rentals are structured to increase inline with expected general inflation. Lease incentives granted arerecognised as an integral part of the total rental income, over theterm of the lease.
vii. Contribution received from customers/co-developmentpartners towards plant and equipment
Contributions received from customers/co-developmentpartners towards items of property, plant and equipmentwhich require an obligation to supply goods to the customer inthe future, are recognised as a credit to deferred revenue. Thecontribution received is recognised as revenue from operationsover the useful life of the assets. The Company capitalises thegross cost of these assets as the Company controls these assets.
viii. Interest income and expense
Interest income or expense is recognised using the effectiveinterest method.
The Company recognises government grants at their fair value onlywhen there is reasonable assurance that the conditions attachedto them will be complied with, and the grants will be received.Government grants received in relation to assets are recognised asdeferred income and amortised over the useful life of such asset.Government grants, which are revenue in nature are either recognisedas income or deducted in reporting the related expense based on theterms of the grant, as applicable.
Income tax comprises of current and deferred income tax. Income taxexpense is recognised in statement of profit and loss except to theextent that it relates to an item recognised directly in equity in whichcase it is recognised in other comprehensive income. Current incometax for current year and prior periods is recognised at the amountexpected to be paid or recovered from the tax authorities, using thetax rates and laws that have been enacted or substantively enacted bythe balance sheet date.
Current tax assets and liabilities are offset only if there is a legallyenforceable right to set off the recognised amounts, and it isintended to realise the asset and settle the liability on a net basis orsimultaneously.
Deferred income tax assets and liabilities are recognised for alltemporary differences arising between the tax bases of assets andliabilities and their carrying amounts in the financial statements exceptwhen:
— temporary differences arising on the initial recognition of assetsor liabilities in a transaction that is not a business combinationand that affects neither accounting nor taxable profit or loss atthe time of transaction; and
— temporary differences related to investments in subsidiaries,associates and joint arrangements to the extent that theCompany is able to control the timing of the reversal of thetemporary differences and it is probable that they will not reversein the foreseeable future.
Deferred tax assets are reviewed at each reporting date and arereduced to the extent that it is no longer probable that the related taxbenefit will be realised.
Deferred tax assets (DTA) in accordance with the tax laws in India, whichis likely to give future economic benefits in the form of availability ofset off against future income tax liability.
Deferred income tax assets and liabilities are measured using the taxrates and laws that have been enacted or substantively enacted bythe balance sheet date and are expected to apply to taxable incomein the years in which those temporary differences are expected to berecovered or settled. The effect of changes in tax rates on deferredincome tax assets and liabilities is recognised as income or expensein the period that includes the enactment or substantive enactmentdate. A deferred income tax assets is recognised to the extent it isprobable that future taxable income will be available against whichthe deductible temporary timing differences and tax losses can beutilised. The Company offsets income-tax assets and liabilities, where ithas a legally enforceable right to set off the recognised amounts andwhere it intends either to settle on a net basis, or to realise the assetand settle the liability simultaneously.
Unrecognised deferred tax assets are reassessed at each reportingdate and recognised to the extent that it has become probable thatfuture taxable profits will be available against which they can be used
Borrowing costs are interest and other costs (including exchangedifferences relating to foreign currency borrowings to the extentthat they are regarded as an adjustment to interest costs) incurredin connection with the borrowing of funds. Borrowing costs directlyattributable to acquisition or construction of an asset which necessarilytake a substantial period of time to get ready for their intended use arecapitalised as part of the cost of that asset. Other borrowing costs arerecognised as an expense in the period in which they are incurred.
Qualifying assets are assets that necessarily take a substantial period oftime to get ready for their intended use or sale.
Basic earnings per share is computed using the weighted averagenumber of equity shares outstanding during the period adjusted fortreasury shares held. Diluted earnings per share is computed using theweighted-average number of equity and dilutive equivalent sharesoutstanding during the period, using the treasury stock method foroptions and warrants, except where the results would be anti-dilutive.
(i) The Company as lessee:
The Company assesses whether a contract contains a lease, atthe inception of contract. A contract is, or contains, a lease if thecontract conveys the right to control the use of an identifiedasset for a period of time in exchange for consideration. Toassesses whether a contract conveys the right to control use ofan identified asset, the Company assesses whether:
• The contract involves use of an identified asset;
• The Company has substantially all the economic benefits fromthe use of the asset through the period of lease; and
• The Company has the right to direct the use of an asset.
At the date of commencement of lease, the Company recognisesa Right-of-use asset ("ROU") and a corresponding liability forall lease arrangements in which it is a lessee, except for leaseswith the term of twelve months or less (short term leases)and low value leases. For short term and low value leases, theCompany recognises the lease payment as an operating expenseon straight line basis over the term of lease. Certain leaseagreements include an option to extend or terminate the leasebefore the end of lease term. ROU assets and the lease liabilitiesincludes these options when it is reasonably certain that they willbe exercised.
Right-of-use assets are depreciated from the commencementdate on a straight-line basis over the shorter of the lease termand useful life of the underlying asset. Right-of-use assets areevaluated for recoverability whenever events or changes incircumstances indicate that their carrying amounts may notbe recoverable. For the purpose of impairment testing, therecoverable amount (i.e., higher of fair value less cost to sell
and the value-in-use) is determined on individual asset basisunless the asset does not generate cash flows that are largelyindependent of those from other assets. In such cases, therecoverable amount is determined for the Cash Generating Unit(CGU) to which the asset belongs.
The lease liability is initially measured at amortised cost at thepresent value of the future lease payments. The lease paymentsare discounted using the interest rate explicit in the lease or, ifnot readily determinable, using the incremental borrowingrates in the country of domicile of these leases. Lease liabilitiesare remeasured with a corresponding adjustment to the relatedright-of- use assets if the Company changes its assessment ifwhether it will exercise an extension or a termination of option.
Lease liability and ROU asset have been separately presented inthe Balance Sheet and the lease payments have been classifiedas financing cash flows.
(ii) The Company as a Lessor:
Leases for which the Company is a lessor is classified as a financeor operating lease. Whenever the terms of the lease transfersubstantially all the risk and rewards of ownership to the lessee,the contract is classified as finance lease. All other leases areclassified as operating lease.
The Company classifies an asset as current asset when:
Ý it expects to realise the asset, or intends to sell or consume it, inits normal operating cycle;
Ý it holds the asset primarily for the purpose of trading;
Ý it expects to realise the asset within twelve months after thereporting period; or
Ý the asset is cash or a cash equivalent unless the asset is restrictedfrom being exchanged or used to settle a liability for at leasttwelve months after the reporting period.
All other assets are classified as non-current.
A liability is classified as current when -
Ý it expects to settle the liability, or consume it, in its normaloperating cycle;
Ý it holds the liability primarily for the purpose of trading;
Ý the liability is due to be settled within twelve months after thereporting period; or
Ý it does not have an unconditional right to defer settlement ofthe liability for at least twelve months after the reporting period.Terms of a liability that could, at the option of the counterparty,result in its settlement by the issue of equity instruments do notaffect its classification.
All other liabilities are classified as non-current.
The operating cycle is the time between the acquisition of assets forprocessing and their realisation in cash and cash equivalents. TheCompany has identified twelve months as its operating cycle.
Exceptional items refer to items of income or expense within thestatement of profit and loss from ordinary activities which are non¬recurring and are of such size, nature or incidence that their separatedisclosure is considered necessary to explain the performance of theCompany.
Ministry of Corporate Affairs ("MCA") notifies new standards oramendments to the existing standards under Companies (IndianAccounting Standards) Rules as issued from time to time. For theyear ended March 31, 2025, MCA has notified Ind AS - 117 InsuranceContracts and amendments to Ind AS 116 - Leases, relating to sale andleaseback transactions, applicable to the Company w.e.f. April 1,2024.The Company has reviewed the new pronouncements and based onits evaluation has determined that it does not have any significantimpact in its financial statements.
Code on Social Security, 2020
The Indian Parliament has approved the Code on Social Security, 2020which would impact the contributions by the Company towardsProvident Fund and Gratuity. The Ministry of Labour and Employmenthad released draft rules for the Code on Social Security, 2020 onNovember 13, 2020. The Company will assess the impact and itsevaluation once the subject rules are notified. The Company will giveappropriate impact in its financial statements in the period in which,the Code becomes effective and the related rules to determine thefinancial impact are published.
(a) During the year, the Company has recognised rental income of Rs 411 (March 31,2024 Rs 433) from investment property and the same is included inother income (refer note 22).
(b) The fair value of investment property is Rs 2,701 (March 31,2024 Rs 2,115), based on market observable data and the same is categorised as a level 3 fairvalue. The Company has not engaged any registered valuer for determining the above fair value.
(c) The Company's investment properties consist of land and building which are leased to group companies. Each of these leases contain an initial non¬cancellable period of 5 years. Subsequent renewals are negotiated with the lessee and historically the average renewal period is 5 years.
(d) The Company has no restriction on realisability of its investment property.
(a) The Company has external commercial borrowing (ECB) from Bank repayable in 3 yearly instalments commencing from June 15, 2025 and carry interest@ SOFR agreed spread per annum. The loan is secured by exclusive charge on the property, plant and equipment created out of the term loan facility.
(b) During the year ended March 31,2023, the Company has issued 107,000 redeemable Non-Convertible Debentures (NCD) in 3 series each having a facevalue of Rs 1,00,000 with a minimum return of 12% per annum plus agreed variable coupon payable upon redemption. The variable coupon is linked tothe equity share price of a subsidiary. Tenure of the NCD is 5 years from the date of allotment or earlier based on put option terms requiring the companyto provide exit to the lender if exit terms do not occur by the specified date in the agreement. The agreement also has drag along rights allowing thelender to seek redemption of NCD if the put option as described in note 34 (ii) is exercised. The NCD are secured by way of pledge over 38,113,557 equityshares of a subsidiary held by the Company. The NCD proceeds were utilised for repayment of mezzanine borrowing which was raised for investing inthe subsidiary.
During the year ended March 31, 2024, the Company has issued 50,000 redeemable Non-Convertible Debentures (NCD) having a face value of Rs1,00,000 with a minimum return of 12% per annum plus agreed variable coupon payable upon redemption. The variable coupon is linked to the equityshare price of a subsidiary. Tenure of the NCD is 4 years from the date of allotment or earlier based on put option terms requiring the company to provideexit to the lender if exit terms do not occur by the specified date in the agreement. The agreement also has drag along rights allowing the lender toseek redemption of NCD if the put option as described in note 34 (ii) is exercised. The NCD are secured by way of pledge over 17,810,073 equity sharesof a subsidiary held by the Company. The NCD proceeds were utilised for repayment of mezzanine borrowing which was raised for investing in thesubsidiary."
(c) On January 29, 2025, the Company has issued 11,400 Commercial Paper (CP) securities having a face value of Rs. 5,00,000 on private placement basis infavour of Nippon India Mutual Funds at a discount rate of 8.75% per annum for a tenure of 90 days. CP is due for repayment on April 29, 2025.
(d) Working capital loan availed during the year of Rs. 1,680 at 7.8%-8.4% p.a and repaid as on March 31,2025
(e) The Company's exposure to liquidity, interest rate and currency risks are disclosed in note 36.
On September 27, 2001, Biocon's Board of Directors approved the Biocon Employee Stock Option Plan ('ESOP Plan 2000') for the grant of stock optionsto the employees of the Company and its subsidiaries / joint venture company. The Nomination and Remuneration Committee ('RemunerationCommittee') administers the plan through a trust established specifically for this purpose, called the Biocon India Limited Employee Welfare Trust (ESOPTrust).
The ESOP Trust shall make additional purchase of equity shares of the Company using the proceeds from the loan obtained from the Company, othercash inflows from allotment of shares to employees under the ESOP Plan and shall subscribe, when allotted to such number of shares as is necessary fortransferring to the employees. The ESOP Trust may also receive shares from the promoters for the purpose of issuance to the employees under the ESOPPlan. The Remuneration Committee shall determine the exercise price which will not be less than the face value of the shares.
Grant VII
In July 2014, the Company approved the grant to its employees under the existing ESOP Plan 2000. The options under this grant would vest to theemployees as 10%, 20%, 30% and 40% of the total grant at the end of first, second, third and fourth year from the date of grant, respectively, with anexercise period ending one year from the end of last vesting. The vesting conditions include service terms and performance grade of the employees.These options are exercisable at the closing market price of Company's shares existing on the date preceding to the date of grant.
Grant X
In June 2016, the Company approved the grant to its employees under the existing ESOP Plan 2000. The options under this grant would vest to theemployees as 10%, 20%, 30% and 40% of the total grant at the end of first, second, third and fourth year from the date of grant, respectively, with anexercise period ending one year from the end of last vesting. The vesting conditions include service terms and performance grade of the employees.These options are exercisable at 50% of the closing price as per National Stock Exchange as on the preceding day to the date of grant.
On March 11,2015, Biocon's Remuneration Committee approved the Biocon - Restricted Stock Units (RSUs) of Syngene ('RSU Plan 2015') for the grantof RSUs to the employees of the Company and its subsidiaries other than Syngene. The Remuneration Committee administers the plan through a trust,called the Biocon Limited Employee Welfare Trust. For this purpose, on March 31,2015, the Company transferred 2,000,000 equity shares of Syngene toBiocon Limited Employees Welfare Trust.
In April 2015, the Company approved the grant to its employees under the RSU Plan 2015. The RSUs under this grant would vest to the employees as10%, 20%, 30% and 40% of the total grant at the end of first, second, third and fourth year from the date of grant, respectively, with an exercise periodending one year from the end of last vesting. The vesting conditions include service terms and performance grade of the employees. Exercise price ofRSUs will be Nil.
(c) RSU Plan 2019
On January 7, 2019, Biocon's Nomination and Remuneration Committee ('NRC') and the Board of Directors approved the Biocon Biologics - RestrictedStock Units (RSUs) of Biocon Biologics India Limited ('RSU Plan 2019') for grant of RSUs to employees of the Group. The NRC administers the plan thougha trust called, Biocon Limited Employee Welfare Trust. For this purpose on January 8, 2020, the Company transferred 2,161,904 equity shares of BioconBiologics India Limited to Biocon Limited Employee Welfare Trust.
During the previous year, modification in vesting was approved by NRC. Based on revised approval, the options under this grant would vest to theemployees as 25% in first year after the grant date, 25% on the event of IPO, 25% after the expiry of one year from IPO date and 25% after the expiry of2 years from the IPO date. The options are exercisable only on the event of an IPO and exercise period shall be one year from the date of last vesting.
(d) RSU Plan 2020
On May 14, 2020, Biocon's Nomination and Remuneration Committee ('NRC') and the Board of Directors approved the Biocon Restricted Stock Units(RSUs) Long Term Incentive Plan FY2020-24 ("RSU Plan 2020") for grant of RSUs to present and/or future employees of the Company and its present andfuture subsidiary companies. The plan is implemented though a trust called, Biocon India Limited Employee Welfare Trust wherein the Company willissue shares to the trust by way of fresh allotment over a period of time.
The RSUs granted under this Plan shall vest over a period of time (service condition) and based upon the performance of the employee. The period ofvesting shall be determined as per the date of grant and the maximum period of vesting shall not extend beyond August 1,2024. The actual number ofRSUs to be vested each year for each Grantee shall be based on his individual performance conditions, the key parameters of which shall be measuredthrough growth in revenue and profits, delivering on key strategic initiatives and shareholders' value creation and such other conditions as may bedetermined by the Managing Director and Chief Executive Officer of the Company in accordance with the overall terms set by the NRC.
(e) RSU Plan 2025
On Sep 4, 2024, Biocon's Nomination and Remuneration Committee ('NRC') and the Board of Directors approved the Biocon Restricted Stock Units(RSUs) Long Term Incentive Plan Financial Year 2025-29 ("RSU Plan 2025") for grant of RSUs to present and/or future employees of the Company and itspresent and future subsidiary companies. The plan is implemented though a trust called, Biocon India Limited Employee Welfare Trust.
The RSUs granted under this Plan shall vest over a period of time (service condition) and based upon the performance of the employee. The periodof vesting shall be determined as per the date of grant and the maximum period of vesting shall not extend beyond September 1, 2029. The actualnumber of RSUs to be vested each year for each Grantee shall be based on his individual performance conditions, the key parameters of which shall bemeasured through growth in revenue and profits, delivering on key strategic initiatives and shareholders' value creation and such other conditions asmay be determined by the Managing Director and Chief Executive Officer of the Company in accordance with the overall terms set by the NRC.
(a) Expenses incurred on behalf of the related party include Salary cost, ESOP cost and amount paid on behalf of the related party to vendors.
(b) The Company's SEZ Developer division has entered into agreements to lease land and provide certain facilities such as power, utilities etc. to SEZ units ofBiocon Biologics Limited, Biocon Pharma Limited and Syngene International Limited, in respect of which the Company recovers rent and facilities usagecharges.
(c) The above disclosures include related parties as per Ind AS 24 on "Related Party Disclosures".
(d) The remuneration to key management personnel doesn't include the provisions made for gratuity and compensated absences amounting to Rs 12(March 31,2024: Rs 13), as they are obtained on an actuarial basis for the Company as a whole.
(e) Share based compensation expense allocable to key management personnel is Rs 66 (March 31,2024 - Rs 59), which is not included in the remunerationdisclosed above.
(f) All transactions with these related parties are priced on an arm's length basis and none of the balances are secured.
(g) The loans to related parties is presented net of repayments due to multiple transactions. Loans repaid includes loan subsequently converted intopreference shares. The loan given to subsidiaries are for Business purposes and interest rates are at arm's length. The Loans are payable on demand.
(h) Trade receivables from related parties have a credit period of 30 - 60 days.
(i) As stated in note 15(b) the Company has issued 50,000 Non-Convertible Debentures (NCD). Simultaneously, the Company entered into a debenturesubscription agreement with Biocon Biologics Limited, a subsidiary of the company to subscribe Optionally Convertible Debenture ("OCD") on the sameterms and conditions as of the original agreement with the lender. An interest income of Rs. 894 (March 31,2024: Rs. 704) has been accrued for the yearended March 31, 2025.
(b) During FY 2019-20, the Company and Biocon Biologics Limited had entered into an agreement with Active Pine LLP ('Investor I) whereby theInvestor has infused Rs 5,363 against issuance of equity shares of a subsidiary company, Biocon Biologics Limited. As per the agreement, theCompany will be required to provide various options to enable the Investor to exit over a period of time. In the event, such exit events do not occur,the Investor may require the Company, to buy them out at certain prices agreed under the arrangement.
(c) During FY 2020-21, the Company and Biocon Biologics Limited had entered into an agreement with Beta Oryx Limited, a wholly owned subsidiaryof ADQ (Investor II) whereby the Investor has infused Rs 5,550 against issuance of equity shares of a subsidiary company, Biocon Biologics Limited.As per the agreement, the Company will be required to provide various options to enable the Investor to exit over a period of time. In the event,such exit events do not occur, the Investor may require the Company, to buy them out at certain prices agreed under the arrangement.
During the year ended March 31, 2025, the Company purchased equity shares in Biocon Biologics Limited, from Beta Oryx Limited pursuantto liquidity option exercised under the shareholder's agreement for Rs. 5,550. Other investors have deferred their exit rights till March 31, 2026and accordingly the derivative liability has been disclosed as Non-current liability in the financial statements considering that these rights areexercisable post March 31,2026.
(d) During FY 2020-21, the Company and Biocon Biologics Limited has entered into an agreement with Tata Capital Growth Fund II (Investor III) wherebythe Investor has infused Rs 2,250 against issuance of equity shares of a subsidiary company, Biocon Biologics Limited. As per the agreement, theCompany will be required to provide various options to enable the Investor to exit over a period of time. In the event, such exit events do not occur,the Investor may require the Company, to buy them out at certain prices agreed under the arrangement.
(e) During the FY 2023-24, the Company and the Biocon Biologics Limited has entered into an agreement with ESOF III Investment Fund & EdelweissAlternative Asset Advisors Limited ("Investor") whereby the investor has infused Rs. 3,000 by way of compulsorily convertible debentures ("CCD")as a private placement basis in Biocon Biologics Limited. As per the agreement, the Company will be required to provide various options to enablethe investor to exit over a period of time. In the event such exit events do not occur, the investor may require the Company, to buy them out atcertain prices agreed under the arrangement.
(i) The Company has a defined benefit gratuity plan as per the Payment of Gratuity Act, 1972. Under this legislation, employee who has completedfive years of service is entitled to specific benefit. The level of benefits provided depends on the employee's length of service and salary atretirement/termination age and does not have any maximum monetary limit for payments. The gratuity plan is a funded plan and the Companymakes contributions to a recognised fund in India.
The plans assets are maintained with HDFC Life in respect of gratuity scheme for certain employees of the Company. The details of investmentsmaintained by Life Insurance Corporation are not available with the Company, hence not disclosed. The expected rate of return on plan assets is6.6% p.a. (31 March 2024: 7.2 % p.a.).
The cost of the defined benefit plans and other long term benefits are determined using actuarial valuations. Actuarial valuations involve makingvarious assumptions that may differ from actual developments in the future. These includes the determination of the discount rate, future salaryincreases and mortality rate. Due to these complexity involved in the valuation it is highly sensitive to the changes in these assumptions. Allassumptions are reviewed at reporting date. The present value of the defined benefit obligation and the related current service cost and plannedservice cost were measured using the projected unit cost method.
(a) The fair value of trade receivables, trade payables and other financial assets and liabilities is considered to be equal to the carrying amounts of theseitems due to their short - term nature
(b) There have been no transfers between level 1,2 and 3 needs to be made.
(c) The Company enters into derivative financial instruments with various counterparties. Derivatives are valued using valuation techniques in consultationwith market expert. The most frequently applied valuation technique include forward pricing, swap models and Black Scholes Merton Model (foroptions valuation), using present value calculations. The models incorporate various inputs including foreign exchange forward rates, interest rate curveand forward rates curve.
* Investment in equity shares in subsidiaries, associate and joint venture and investment in preference shares of associates has been accounted at cost as perInd AS 27 "Consolidated and Separate Financial Statements".
# These includes investment in preference shares in subsidiaries which are convertible (variable number of equity shares) / redeemable, at its face value,any time during the tenure of the instrument at the option of the holder. Owing to this feature, the instrument has been disclosed at its fair value which isequivalent to the face value.
Fair value of liquid mutual funds are based on quoted price. Derivative financial instruments are valued based on quoted prices for similar assets and liabilitiesin active markets or inputs that are directly or indirectly observable in the market place.
For the fair values of range forward contracts of foreign currencies and interest rate swap, reasonably possible changes at the reporting date to one of thesignificant observable inputs, holding other inputs constant, would have the following effects in other comprehensive income (OCI).
The Company's risk management is carried out by the treasury department under policies approved by the Board of Directors. The Board provideswritten principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk,use of derivative and non-derivative financial instruments and investment of excess liquidity.
Credit risk is the risk that the counterparty will not meet its obligation under a financial instrument or customer contract, leading to financial loss.The credit risk arises principally from its operating activities (primarily trade receivables) and from its financing activities, including deposits withbanks and financial institutions and other financial instruments.
Customer credit risk is managed by each business unit subject to Company's established policy, procedures and control relating to customercredit risk management. The Audit and Risk Management Committee has established a credit policy under which each new customer is analysedindividually for creditworthiness before the Company's standard payment and delivery terms and conditions are offered. The Company's reviewincludes external ratings, where available, and other publicly available financial information. Outstanding customer receivables are regularlymonitored and any shipments to major customers are generally covered by letters of credit or other forms of credit insurance.
The Company establishes an allowance for impairment that represents its estimate of expected losses in respect of trade and other receivables.The maximum exposure to credit risk as at reporting date is primarily from trade receivables amounting to Rs. 8,294 (March 31,2024: Rs. 10,481).The movement in allowance for impairment in respect of trade and other receivables during the year was as follows:
The Company is no significantly exposed to geographical credit risk as the counterparties operate across various countries across the globe. Alsorefer geographical Revenues disclosure in Note 21.1.
Credit risk on cash and cash equivalent and derivatives is limited as the Company generally transacts with banks and financial institutions with highcredit ratings assigned by international and domestic credit rating agencies which are rated A or AAA. Investments primarily include investmentin liquid mutual fund units, bonds and non-convertible debentures.
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settledby delivering cash or another financial asset. The Company's approach to managing liquidity is to ensure, as far as possible, that it will have sufficientliquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damageto the Company's reputation.
The Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.
The following are the contractual maturities of financial liabilities and excluding interest payments. The tables have been drawn up based on theundiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay:
(a) Other financial liabilities amounting to Rs. 8 (March 31,2024: Rs. 221) relates to mark to market valuation of the put options fully described in note34(ii)(b), (c), (d) and (e) to these financial statements. The gross amount of these arrangements have been accounted for as an equity in the separatefinancial statements of the subsidiary and as a non current liability in the consolidated financial statements of the company for the year endedMarch 31,2025.
(b) Borrowings include non-convertible debentures amounting to Rs. 20,913 (March 31,2024: Rs. 18,324) related to agreements with the lenderscontaining certain put options fully described in note 15(b) to these financial statements.
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices, such as foreignexchange rates, interest rates and equity prices.
The Company operates internationally and a major portion of the business is transacted in several currencies and consequently, the Company is exposedto foreign exchange risk through operating and borrowing activities in foreign currency. The Company holds derivative instruments such as foreignexchange forward, interest rate swaps and option contracts to mitigate the risk of changes in exchange rates and foreign currency exposure.
The Company uses derivative financial instruments exclusively for hedging financial risks that arise from its commercial business or financing activities.The Company's treasury team manages its foreign currency risk by hedging forecasted transactions like sales, purchases and capital expenditures.When a derivative is entered for hedging, the Company matches the terms of those derivatives to the underlying exposure. All identified exposures aremanaged as per the policy duly approved by the Board of Directors.
The key objective of the Company's capital management is to ensure that it maintains a stable capital structure with the focus on total equity to upholdinvestor, creditor, and customer confidence and to ensure future development of its business. The Company focused on keeping strong total equity baseto ensure independence, security, as well as a high financial flexibility for potential future borrowings, if required without impacting the risk profile of theCompany.
The Company's goal is to continue to be able to return excess liquidity to shareholders by continuing to distribute annual dividends in future periods.
The amount of future dividends of equity shares will be balanced with efforts to continue to maintain an adequate liquidity status.
The capital structure as of March 31,2025 and March 31,2024 was as follows:
Nature of CSR activities conducted by the company during year ended March 31,2025 and March 31,2024 are as follows:
1. Promoting Education
2. Mass Transit System
3. Lake Rejuvenation
Refer Note 32 for details of related party transactions
41. The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislationunder sections 92-92F of the Income-tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneousin nature, the Company is in the process of updating the documentation for the international transactions entered into with the associated enterprisesduring the financial year. The Company is required to update and put in place the information latest by the due date of filing its income tax return. Themanagement is of the opinion that its international transactions are at arm's length so that the aforesaid legislation will not have any impact on thefinancial statements, particularly on the amount of tax expenses and that of provision for tax.
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding anyBenami property under Benami Transactions (Prohibition) Act, 1988 (45 of 1988).
(ii) The Company does not have any material transactions with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 ofCompanies Act, 1956 during the financial year.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies beyond the statutory period.
(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company is not declared as wilful defaulter by any bank or financial institution or government or any government authority.
43. No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by thecompany to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries") with the understanding, whether recorded in writing orotherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the company (Ultimate Beneficiaries).
Further, the Company has not received any fund from any party(s) (Funding Party) with the understanding that the company shall whether, directly orindirectly lend or invest in other persons or entities identified by or on behalf of the funding party ("Ultimate Beneficiaries") or provide any guarantee,security or the like on behalf of the Ultimate Beneficiaries.
(a) During the year, the Company has sold 8,000,000 equity shares of Syngene International limited in the open market. The gain arising from sale ofaforesaid equity shares amounting to Rs. 6,075 has been recorded as an exceptional item.
(b) During the previous year, the Company has sold 834,402 equity shares of Biocon Biologics Limited to one of its subsidiary Biocon Pharma Limited. Thegain arising from the sale of aforesaid equity shares amounting to Rs. 197 has been recorded as an exceptional item.
(a) On May 08, 2025, the Board of Directors of the Company has proposed a final dividend of 10% i.e. Rs. 0.50 per equity share of face value of Rs. 5/- eachamounting to Rs. 600 as on the record date for distribution of final dividend. The proposed dividend is subject to approval of the shareholders inthe ensuing Annual General Meeting of the Company. The dividend declared is in accordance with section 123 of the Act to the extent it applies todeclaration of dividend.
(b) The Board of Directors at its meeting held on April 23, 2025, has approved raising of funds by the Company by way of issuance of any instrument orsecurities for an aggregate amount of upto Rs. 45,000 in one or more tranches.
The accompanying notes are an integral part of the standalone financial statements.
As per our report of even date attached
for B S R & Co. LLP for and on behalf of the Board of Directors of Biocon Limited
Chartered Accountants
Firm Registration Number: 101248W/W-100022
Sudhir Soni Kiran Mazumdar-Shaw Siddharth Mittal
Partner Executive Chairperson Managing Director & CEO
Membership No.: 041870 DIN: 00347229 DIN: 03230757
Mukesh Kamath
Interim Chief Financial Officer
Mumbai Bengaluru
May 08, 2025 May 08, 2025