We have audited the standalone financial statements of Biocon Limited(the ‘Company"), its Employee Welfare Trusts ("Trust") which comprisethe standalone balance sheet as at 31 March 2025, and the standalonestatement of profit and loss (including other comprehensive income),standalone statement of changes in equity and standalone statement ofcash flows for the year then ended, and notes to the standalone financialstatements, including material accounting policies and other explanatoryinformation (herein referred to as the "standalone financial statements").
In our opinion and to the best of our information and according to theexplanations given to us, the aforesaid standalone financial statements givethe information required by the Companies Act, 2013 (‘Act") in the mannerso required and give a true and fair view in conformity with the accountingprinciples generally accepted in India, of the state of affairs of the Companyas at 31 March 2025, and its profit and other comprehensive income,changes in equity and its cash flows for the year ended on that date.
We conducted our audit in accordance with the Standards on Auditing(SAs) specified under Section 143(10) of the Act. Our responsibilities underthose SAs are further described in the Auditor's Responsibilities for theAudit of the Standalone Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issuedby the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules thereunder, andwe have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidencewe have obtained is sufficient and appropriate to provide a basis for ouropinion on the standalone financial statements.
Key audit matters are those matters that, in our professional judgment, wereof most significance in our audit of the standalone financial statementsof the current period. These matters were addressed in the context of ouraudit of the standalone financial statements as a whole, and in formingour opinion thereon, and we do not provide a separate opinion on thesematters.
Impairment assessment of long term investments in subsidiaries
See Note 6 and 2(a) to standalone financial statements
The key audit matter
How the matter was addressed in our audit
The Company has long term investments in subsidiaries aggregating toRs. 113,496 million as at 31 March 2025. The Company accounts for theseinvestments at cost less any provision for impairment loss. Changes in thebusiness environment, including market or economic environment andgeneral inflationary trend could have significant impact on the valuation ofthese investments. Investments where an indication based on these factorsexist, are tested for impairment at the end of the reporting period.
The Company determines the recoverable value of such investments andcompares it to the carrying value if there are indicators of impairment. Therecoverable value is the higher of the market value or the Value in Use (VIU).The recoverable value is determined using the following assumptions:
• projected future cash inflows
• expected growth rate, discount rate, terminal growth rate
• comparison of price and market multiples
The assessment of discount rate and terminal growth rate requiresspecialized skills and knowledge. Changes in these assumptions, couldimpact the recoverable value of the investments Further, these significantassumptions are forward looking and could be affected by future economicand market conditions. The impairment testing is significant to our audit,because of the materiality of the investments as well as the involvementof estimates and judgements.
Our audit procedures to obtain sufficient audit evidence included:
• Assessed the design, implementation and operating effectivenessof the relevant key controls in respect of company's e impairmentassessment process, including approval of forecasts and valuationmodels;
• Performed a retrospective analysis to assess the reasonableness ofCompany's projections by comparing historical forecast to actualresults;
• Evaluated the reasonableness of the overall impairment modelincluding assumptions by involving valuation specialist and comparingthese inputs with externally available data, consistency with Boardapproved forecasts and knowledge of the industry and verified overallmathematical accuracy of calculations;
• Performed sensitivity analysis of key assumptions. These include futurerevenue growth rates, terminal growth rate and discount rate appliedin the valuation.
Going concern
See Note 1.2 to standalone financial statements
In respect of agreements entered into by the Company with certain financialinvestors for acquisition of biosimilar business by its subsidiary, there areput option obligations on the Company to provide exit to the investors.The Company also has certain long-term borrowings that carry drag alongrights which require the Company to repay the debts if the put options,as mentioned above, are triggered. As at 31 March 2025, these contractualagreements indicate possible obligations as described in note 34(ii) to thefinancial statements.
Management assessed its financial position as at 31 March 2025, its forecastsfor the period of fifteen months from the date of these financial statements,its ability to re-negotiate the exit terms with investors, ability to raise fundsby issuance of further shares as stated in note 46(b) to the standalonefinancial statements and support liquidity from its non-current assets.
These factors involve subjectivity considering the fact that some of theseare driven by external environment and hence outcomes could be differentfrom those factored by the Company. Considering the significance of thisissue it is considered as a Key Audit Matter.
Our audit procedures to assess the going concern assumption included the
following:
• Obtained the forecasted cashflows prepared by the Management forthe next 15 months and examined the basis and details supportingthe estimations considered therein;
• Evaluated the reasonability of the cash flow forecast includingassumptions by comparing these inputs with available data,consistency with Board approved forecasts and knowledge of theindustry and verified overall mathematical accuracy of calculations;
• Performed sensitivity analysis on the forecasted cash flows byconsidering plausible changes to the key assumptions;
• Discussed with Audit Committee and key senior managementpersonnel regarding the Company's plan to meet the obligations;
• Assessed the adequacy of the disclosures - refer note 1.2 to thefinancial statements.
Taxation
See Note 2(m), 33 and 34 to standalone financial statements
The Company's tax provision involves complexities & judgements withrespect to various tax positions including the following:
- deductibility of transactions
- availability of tax incentives and exemptions for earlier years, ,
- Uncertainty in a tax position that may arise as tax laws are subject tointerpretation.
Judgment is required in assessing the range of possible outcomes for someof these tax matters. These judgments could change over time as each ofthe matters progresses depending on experience on actual assessmentproceedings by tax authorities and other judicial precedents.
The Company makes an assessment (including obtaining opinion fromexternal legal experts) to determine the outcome of these uncertain taxpositions and decides to make an accrual or consider it to be a possiblecontingent liability. Where the amount of tax liabilities are uncertain, theCompany recognizes accruals which reflect its best estimate of the outcomebased on the facts known. Accordingly, this was an area of focus for theengagement team during the audit for the year ended 31 March 2025.
Our audit procedures in relation to Taxation include the following:
• We tested the design and operating effectiveness of the Company'scontrols around the tax computation and tax matters;
• We obtained an understanding of the key uncertain tax positionsbased on list of ongoing litigations and tax computations for thecurrent year;
• We reviewed the tax demand / assessment orders and anlaysed theimplications of observation ns in those orders to identify anyadditional uncertain tax positions;
• We analysed the Company's judgment regarding the eventualresolution of matters with various tax authorities. In this regard, weunderstood how the Company has considered past experience, whereavailable, with the tax authorities in the respective jurisdictions;
• We also reviewed external legal opinions and consultations made bythe Company for key tax matters during current and past periods; and
• We involved tax specialists to assist us in evaluating the technical meritsof tax position to form a judgement and the key assumptions made bythe Company in tax computations and assessing the adequacy of theCompany's disclosures in respect of contingent liabilities and provisionfor tax matters.
The Company's Management and Board of Directors are responsible for the other information. The other information comprises the information includedin the Management Board's Report, Management Discussion and Analysis, Corporate Governance Report and Business Responsibility Report, but does notinclude the financial statements and auditor's report thereon, which we obtained prior to the date of this auditor's report, and the remaining sections of theCompany's Annual Report, which are expected to be made available to us after that date.
Our opinion on the standalone financial statements does not cover theother information and we do not and will not express any form of assuranceconclusion thereon.
In connection with our audit of the standalone financial statements, ourresponsibility is to read the other information identified above and, in doingso, consider whether the other information is materially inconsistent withthe standalone financial statements or our knowledge obtained in theaudit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that weobtained prior to the date of this auditor's report, we conclude that there isa material misstatement of this other information, we are required to reportthat fact. We have nothing to report in this regard.
When we read the other sections of the Annual Report (other than thosementioned above), if we conclude that there is a material misstatementtherein, we are required to communicate the matter to those charged withgovernance and take necessary actions, as applicable under the applicablelaws and regulations.
The Company's Management and Board of Directors are responsible for thematters stated in Section 134(5) of the Act with respect to the preparationof these standalone financial statements that give a true and fair view of thestate of affairs, profit/ loss and other comprehensive income, changes inequity and cash flows of the Company in accordance with the accountingprinciples generally accepted in India, including the Indian AccountingStandards (Ind AS) specified under Section 133 of the Act. The respectiveManagement and Board of Directors of the company/Board of Trustees ofthe Trust are responsible for maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assetsof the Company/Trust and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; anddesign, implementation and maintenance of adequate internal financialcontrols, that were operating effectively for ensuring the accuracy andcompleteness of the accounting records, relevant to the preparation andpresentation of the standalone financial statements that give a true and fairview and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the respectiveManagement and Board of Directors/Board of Trustees are responsible forassessing the ability of the Company/Trust to continue as a going concern,disclosing, as applicable, matters related to going concern and using thegoing concern basis of accounting unless the respective Board of Directors/Board of Trustees either intends to liquidate the Company/Trust or to ceaseoperations, or has no realistic alternative but to do so.
The respective Board of Directors/Board of Trustees are responsible foroverseeing the financial reporting process of the Company/Trust.
Our objectives are to obtain reasonable assurance about whetherthe standalone financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor's reportthat includes our opinion. Reasonable assurance is a high level of assurance,but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatementscan arise from fraud or error and are considered material if, individuallyor in the aggregate, they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financialstatements.
As part of an audit in accordance with SAs, we exercise professionaljudgment and maintain professional skepticism throughout the audit. We
also:
• Identify and assess the risks of material misstatement of the standalonefinancial statements, whether due to fraud or error, design and performaudit procedures responsive to those risks, and obtain audit evidencethat is sufficient and appropriate to provide a basis for our opinion. Therisk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error, as fraud may involve collusion,forgery, intentional omissions, misrepresentations, or the override ofinternal control.
• Obtain an understanding of internal control relevant to the auditin order to design audit procedures that are appropriate in thecircumstances. Under Section 143(3)0) of the Act, we are alsoresponsible for expressing our opinion on whether the companyhas adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures madeby the Management and Board of Directors.
• Conclude on the appropriateness of the Management and Board ofDirectors use of the going concern basis of accounting in preparationof standalone financial statements and, based on the audit evidenceobtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company's ability tocontinue as a going concern. If we conclude that a material uncertaintyexists, we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or, if suchdisclosures are inadequate, to modify our opinion. Our conclusions arebased on the audit evidence obtained up to the date of our auditor'sreport. However, future events or conditions may cause the Companyto cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of thestandalone financial statements, including the disclosures, andwhether the standalone financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance of the Companyregarding, among other matters, the planned scope and timing of theaudit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence,and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable,related safeguards.
From the matters communicated with those charged with governance, wedetermine those matters that were of most significance in the audit of thestandalone financial statements of the current period and are therefore thekey audit matters. We describe these matters in our auditor's report unlesslaw or regulation precludes public disclosure about the matter or when, inextremely rare circumstances, we determine that a matter should not becommunicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefitsof such communication.
1. As required by the Companies (Auditor's Report) Order, 2020 ("theOrder") issued by the Central Government of India in terms of Section143(11) of the Act, we give in the "Annexure A" a statement on thematters specified in paragraphs 3 and 4 of the Order, to the extentapplicable.
2 A. As required by Section 143(3) of the Act, we report that:
a. We have sought and obtained all the information andexplanations which to the best of our knowledge and beliefwere necessary for the purposes of our audit.
b. In our opinion, proper books of account as required by lawhave been kept by the Company so far as it appears fromour examination of those books except for the mattersstated in the paragraph 2B(f) below on reporting underRule 11(g) of the Companies (Audit and Auditors) Rules,2014.
c. The standalone balance sheet, the standalone statementof profit and loss (including other comprehensive income),the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by thisReport are in agreement with the books of account.
d. In our opinion, the aforesaid standalone financialstatements comply with the Ind AS specified under Section133 of the Act.
e. On the basis of the written representations received fromthe directors as on 1 April 2025 and 3 April 2025 taken onrecord by the Board of Directors, none of the directors isdisqualified as on 31 March 2025 from being appointed as adirector in terms of Section 164(2) of the Act.
f. The modification relating to the maintenance of accountsand other matters connected therewith are as stated in theparagraph 2A(b) above on reporting under Section 143(3)(b) and paragraph 2B(f) below on reporting under Rule11(g) of the Companies (Audit and Auditors) Rules, 2014.
g. With respect to the adequacy of the internal financialcontrols with reference to financial statements of theCompany and the operating effectiveness of such controls,refer to our separate Report in "Annexure B".
B. With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Auditand Auditors) Rules, 2014, in our opinion and to the best of ourinformation and according to the explanations given to us
a. The Company has disclosed the impact of pendinglitigations as at 31 March 2025 on its financial position inits standalone financial statements - Refer Note 34 to thestandalone financial statements.
b. The Company has made provision, as required underthe applicable law or accounting standards, for materialforeseeable losses, if any, on long-term contracts includingderivative contracts - Refer Note 36 to the standalonefinancial statements.
c. There has been no delay in transferring amounts, requiredto be transferred, to the Investor Education and ProtectionFund by the Company.
d (i) The management of the Company represented tous that, to the best of its knowledge and belief, asdisclosed in the Note 43 to the standalone financialstatements, no funds have been advanced or loanedor invested (either from borrowed funds or sharepremium or any other sources or kind of funds) by theCompany to or in any other person(s) or entity(ies),including foreign entities ("Intermediaries"), withthe understanding, whether recorded in writing orotherwise, that the Intermediary shall directly orindirectly lend or invest in other persons or entitiesidentified in any manner whatsoever by or on behalfof the Company ("Ultimate Beneficiaries") or provideany guarantee, security or the like on behalf of theUltimate Beneficiaries.
(ii) The management of the Company representedto us that, to the best of its knowledge and belief,as disclosed in the Note 43 to the standalonefinancial statements, no funds have been receivedby the Company from any person(s) or entity(ies),including foreign entities ("Funding Parties"), withthe understanding, whether recorded in writingor otherwise, that the Company shall directly orindirectly, lend or invest in other persons or entitiesidentified in any manner whatsoever by or on behalfof the Funding Parties ("Ultimate Beneficiaries") orprovide any guarantee, security or the like on behalfof the Ultimate Beneficiaries.
(iii) Based on the audit procedures that have beenconsidered reasonable and appropriate in thecircumstances, nothing has come to our notice thathas caused us to believe that the representationsunder sub-clause (i) and (ii) of Rule 11(e), as providedunder (i) and (ii) above, contain any materialmisstatement.
?. The final dividend paid by the Company during the year,
in respect of the same declared for the previous year, isin accordance with Section 123 of the Act to the extent itapplies to payment of dividend.
As stated in Note 46(a) to the standalone financialstatements, the Board of Directors of the Company hasproposed final dividend for the year which is subject to theapproval of the members at the ensuing Annual GeneralMeeting. The dividend declared is in accordance withSection 123 of the Act to the extent it applies to declarationof dividend.
. Based on our examination which included test checks, theCompany has used an accounting software for maintainingits books of account which has a feature of audit trail (editlog) facility and the same has operated throughout the yearfor all relevant transactions recorded in the software exceptthat the audit trail was not enabled (i) at the database levelfor the period from 1 April 2024 to 24 October 2024. Also,for one database user, the audit trail was not enabled forthe period from 1 April 2024 to 25 February 2025; (ii) at theapplication level for certain fields / tables relating to all thesignificant processes and (iii) for certain changes at theapplication level which were performed by users havingprivileged access rights.
Further, for the periods where audit trail (edit log) facilitywas enabled and operated, we did not come acrossany instance of audit trail feature being tampered with.Additionally, except where the audit trail was not enabledin the previous year, the audit trail has been preserved bythe Company as per the statutory requirements for recordretention.
C. With respect to the matter to be included in the Auditor's Reportunder Section 197(16) of the Act:
In our opinion and according to the information and explanationsgiven to us the remuneration paid by the Company to its directorsduring the current year is in accordance with the provisions ofSection 197 of the Act. The remuneration paid to any directorby the Company is not in excess of the limit laid down underSection 197 of the Act. The Ministry of Corporate Affairs has notprescribed other details under Section 197(16) of the Act whichare required to be commented upon by us.
For B S R & Co. LLP
Chartered AccountantsFirm's Registration No.:101248W/W-100022
Sudhir Soni
Partner
Place: Mumbai Membership No.: 041870
Date: 08 May 2025 ICAI UDIN:25041870BMOMLH7802