i. Provisions (other than for employee benefits)
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but
probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of
which the likelihood of outflow of resources is remote, no provision or disclosure is made.
A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be
estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions
are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to
settle the present obligation at the balance sheet date) at a pre-tax rate that reflects current market assessments of the time
value of money and the risks specific to the liability. 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 economic benefits to be derived by the Company from the
contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision for an onerous
contract is measured at the present value of the lower of the expected cost of terminating the contract and the expected net
cost of continuing with the contract. Before such a provision is made, the Company recognises any impairment loss on the
assets associated with that contract.
j. Revenue recognition:
i. Contract research and manufacturing services income
The Company derives revenues primarily from Contract research and manufacturing services. Revenue is recognised
upon transfer of control of promised services or compounds to customers in an amount that reflects the consideration
we expect to receive in exchange for those services or compounds.
Arrangement with customers for Contract research and manufacturing services income are either on a time-and-material
basis or fixed price.
In respect of contracts involving research services, in case of 'time and materials' contracts, contract research fee are
recognised as services are rendered, in accordance with the terms of the contracts. Revenue from contracts are recorded
net of allowances for estimated rebates and cash discounts, as per contractual terms.
Revenues relating to fixed price contracts are recognised based on the milestones completion and for manufacturing
services (large molecules) revenue is recognised based on the percentage of completion method determined based on
cost incurred as a proportion to total estimated cost. The Company monitors estimates of total contract revenue and
cost on a routine basis throughout the contract period. The cumulative impact of any change in estimates of the contract
revenue or costs is reflected in the period in which the changes become known. In the event that a loss is anticipated on
a particular contract, provision is made for the estimated loss.
In respect of contracts involving sale of compounds arising out of contract research, revenue is recognised when a
promise in a customer contract (performance obligation) has been satisfied by transferring control over the promised
goods to the customer. Control over a promised goods refers to the ability to direct the use of, and obtain substantially all
of the remaining benefits from, those goods. Control is usually transferred upon shipment to the customer/ customer's
acceptance. The amount of revenue to be recognised (transaction price) is based on the consideration expected to be
received in exchange for goods, excluding amounts collected on behalf of third parties such as goods and services tax
or other taxes directly linked to sales. If a contract contains more than one performance obligation, the transaction price
is allocated to each performance obligation based on their relative stand-alone selling prices. Revenue from such sales
are recorded net of allowances for estimated rebates, cash discounts and estimates of product returns, all of which are
established at the time of sale.
The consideration received by the Company in exchange for its goods may be fixed or variable. Variable consideration
is only recognised when it is considered highly probable that a significant revenue reversal will not occur once the
underlying uncertainty related to variable consideration is subsequently resolved.
Contract assets are recognised when there is excess of revenue earned over billings on contracts. Contract assets are
classified as unbilled receivables (only act of invoicing is pending) when there is unconditional right to receive cash, and
only passage of time is required, as per contractual terms.
The Company collects Goods and Services Tax (GST) as applicable, on behalf of the Government and, therefore, it is not
an economic benefit flowing to the Company. Hence, it is excluded from revenue.
ii. Rental income
Rental income from investment property is recognised in statement of profit and loss on a straight-line basis over the
term of the lease except where the rentals are structured to increase in line with expected general inflation. Lease
incentives granted are recognised as an integral part of the total rental income, over the term of the lease.
iii. Contribution received from customers towards property, plant and equipment
Contributions received from customers towards items of property, plant and equipment which require an obligation to
supply services to the customer in the future, are recognised as a credit to deferred revenue. The contribution received is
recognised as revenue from operations over the useful life of the assets. The Company capitalises the gross cost of these
assets as the Company controls these assets.
iv. Dividends
Dividend is recognised when the Company's right to receive the payment is established, which is generally when
shareholders approve the dividend.
v. Interest Income
Interest income is recognised on a time proportion basis taking into account the amount outstanding and the applicable
interest rate. Interest income is included under the head "other income" in the statement of profit and loss.
k. Government grants
The Company recognises Government grants only at their fair value when there is reasonable assurance that the conditions
attached to them will be complied with, and the grants will be received. Government grants received in relation to assets are
recognised as deferred income and amortised over the useful life of such asset. Grants related to income are recognised in
statement of profit and loss as other operating revenues or deducted in reporting the related expense based on the terms of
the grant, as applicable.
l. Foreign currency Transactions and translations:
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation
of monetary assets and liabilities denominated in foreign currencies at balance sheet date exchange rates are generally
recognised in Statement of Profit and Loss.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date
when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part
of the fair value gain or loss. For example, translation differences on non-monetary assets such as equity investments classified
as FVOCI are recognised in other comprehensive income (OCI).
m. Income taxes
Income tax comprises of current and deferred income tax. Income tax expense is recognised in statement of profit and loss
except to the extent that it relates to an item recognised directly in equity in which case it is recognised in other comprehensive
income. Current income tax for current year and prior periods is recognised at the amount expected to be paid or recovered
from the tax authorities, using the tax rates and laws that have been enacted or substantively enacted by the balance sheet
date. Provision for income tax includes the impact of provisions established for uncertain income tax positions.
Tax assets and liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is
intended to realize the asset and settle the liability on a net basis or simultaneously.
Minimum Alternative Tax ('MAT') under the provisions of the Income-tax Act, 1961 is recognised as current tax in the
Statement of Profit and Loss. The credit available under the Act in respect of MAT paid is recognised as an asset only when
and to the extent there is convincing evidence that the company will pay normal income tax during the period for which the
MAT credit can be carried forward for set-off against the normal tax liability. MAT credit recognised as an asset is reviewed at
each balance sheet date and written down to the extent the aforesaid convincing evidence no longer exists.
Deferred income tax assets and liabilities are recognised for all temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the standalone financial statements except when:
— temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit or loss at the time of transaction; and
— temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the
Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not
reverse in the foreseeable future.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the
related tax benefit will be realised.
Deferred tax assets (DTA) include Minimum Alternate Tax (MAT) paid in accordance with the tax laws in India, which is likely
to give future economic benefits in the form of availability of set off against future income tax liability.
Deferred income tax assets and liabilities are measured using the tax rates and laws that have been enacted or substantively
enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and
liabilities is recognised as income or expense in the period that includes the enactment or substantive enactment date. A
deferred income tax assets is recognised to the extent it is probable that future taxable income will be available against
which the deductible temporary timing differences and tax losses can be utilised. The Company offsets income-tax assets and
liabilities, where it has a legally enforceable right to set off the recognised amounts and where it intends either to settle on a
net basis, or to realise the asset and settle the liability simultaneously.
Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become
probable that future taxable profits will be available against which they can be used.
n. Borrowing cost
Borrowing costs are interest and other costs (including exchange differences relating to foreign currency borrowings to
the extent that they are regarded as an adjustment to interest costs) incurred in connection with the borrowing of funds.
Borrowing costs directly attributable to acquisition or construction of an asset which necessarily take a substantial period of
time to get ready for their intended use are capitalised as part of the cost of that asset. Other borrowing costs are recognised
as an expense in the period in which they are incurred.
Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
o. Leases
(i) The company as lessee:
The company assesses whether a contract contains a lease, at the inception of contract. A contract is, or contains,
a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. To assesses whether a contract conveys the right to control use of an identified asset, the company
assesses whether:
• The contract involves use of an identified asset;
• The company has substantially all the economic benefits from the 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 recognises a Right-of-use assets ("ROU") and a corresponding
liability for all lease arrangements in which it is a lessee, except for leases with the term of twelve months or less (short
term leases) and low value leases. For short term and low value leases, the company recognises the lease payment as an
operating expense on straight line basis over the term of lease.
Certain lease agreements include an option to extend or terminate the lease before the end of lease term. ROU assets
and the lease liabilities includes these options when it is reasonably certain that they will be exercised.
Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease
term and useful life of the underlying asset. Right-of-use assets are evaluated for recoverability whenever events or
changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment
testing, the recoverable amount (i.e., higher of fair value less cost to sell and the value-in-use) is determined on individual
asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such
cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
The lease liability is initially measured at amortised cost at the present value of the future lease payments. The lease
payments are discounted using the interest rate explicit in the lease or, if not readily determinable, using the incremental
borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding
adjustment to the related right-of- use assets if the company changes its assessment if whether it will exercise an
extension or a termination of option.
Lease liability and ROU asset have been separately presented in the Balance Sheet and the lease payments have been
classified as financing cash flows.
(ii) The Company as a Lessor:
Leases for which the company is a lessor is classified as a finance or operating lease. Whenever the terms of the lease
transfer substantially all the risk and rewards of ownership to the lessee, the contract is classified as finance lease. All
other leases are classified as operating lease.
p. Earnings per share
Basic earnings per share is computed using the weighted average number of equity shares outstanding during the period
adjusted for treasury shares held and vested employee stock options (ESOPs). Diluted earnings per share is computed using
the weighted-average number of equity and dilutive equivalent shares outstanding during the period, using the treasury stock
method for options and warrants, except where the results would be anti-dilutive.
q. Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker.
r. Non-current assets (or disposal groups) held for sale and discontinued operations
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally
through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at
the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising
from employee benefits, financial assets and contractual rights under insurance contracts, which are specifically exempt from
this requirement.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value less
costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal group),
but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the
date of the sale of the non-current asset (or disposal group) is recognised at the date of de-recognition.
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are
classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for
sale continue to be recognized.
Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are presented
separately from the other assets in the balance sheet. The liabilities of a disposal group classified as held for sale are presented
separately from other liabilities in the balance sheet.
A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and that
represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to dispose
of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of
discontinued operations are presented separately in the statement of profit and loss.
s. Exceptional items
Exceptional items refer to items of income or expense within the statement of profit and loss from ordinary activities which
are non-recurring and are of such size, nature or incidence that their separate disclosure is considered necessary to explain
the performance of the Company.
t. Recent pronouncements
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as issued from time to time.
In May 2025, MCA notified amendments to Ind AS 21 - The Effects of Changes in Foreign Exchange Rates, applicable w.e.f.
April 1, 2025. The Company has reviewed the amendment and based on its evaluation has determined that it does not have
any significant impact in its financial statements.
In August 2025, MCA notified the following amendments to:
1. Ind AS 1, Presentation of Financial Statements, applicable w.e.f. April 1, 2025 - The amendment relates to classification
of liabilities as current or non-current and non-current liabilities with covenants. In the context of classifying a liability as
current, it removes the requirement of existence of a right to defer settlement for at least 12 months after the reporting
date and instead requires that the said right should exist on the reporting date and have substance. The amendment also
introduces guidance on classification of liabilities with covenants. The Company has no impact of these amendments in
its classification criteria of current and non-current liabilities.
2. Ind AS 7, Statement of Cash Flows and Ind AS 107, Financial Instruments: Disclosures, applicable w.e.f. April 1, 2025
- The amendment in Ind AS 7 requires to inform users of financial statements of the existence of supplier finance
arrangements and explain the nature of the arrangements, the carrying amount of liabilities and the range of payment
due dates. Ind AS 107 has been amended to add supplier finance arrangements as a factor that may cause concentration
of liquidity risk. The Company has reviewed the amendment and based on its evaluation has determined that it does not
have any significant impact in its financial statements.
3. Ind AS 12, International Tax Reform - Pillar Two Model Rules applicable immediately - The amendments provide a
temporary mandatory relief from deferred tax accounting for top-up tax and disclose that they have applied the relief.
This relief is immediate and applies retrospectively. The Company has reviewed the amendment and based on its
evaluation has determined that it does not have any significant impact in its financial statements.
Note:
(a) Investment property with a gross carrying amount of Rs. 146 (31 March 2025 : Rs. 146) have been constructed on leasehold
land obtained by the Company on lease basis from Biocon Limited.
(b) Refer note 31 (ii) for disclosure of contractual commitments for the acquisition of investment property.
(C) The fair value of investment property is Rs 316 (March 31, 2024 Rs 343), based on market observable data and the same is
categorised as a level 3 fair value. The Company has not engaged any registered valuer for determining the above fair value.
(d) The Company has no restriction on realisability of its investment property.
(i) In the year ended 31 March 2021, the Company invested Rs. 100 in Immuneel Therapeutics Private Limited (Immuneel).
On account of fair valuation being recorded in prior years, the Company has recorded gains of Rs. 129 during FY 2021 till
FY 2024. During the year ended 31 March 2025, the Company, based on fair valuation recorded a fair value increase in its
investment carrying value by Rs. 18.
(ii) Terms of conversion: 1 compulsory convertible preference share of face value Rs. 100/- each will convert to 1 equity share of
face value Rs. 100/- at end of the tenure of 20 years from allotment.
(iii) Terms of conversion: 1 compulsory convertible debentures of face value Rs. 1000/- each will convert to 1 equity share of face
value Rs. 100/- at end of the tenure of 20 years from allotment.
(iv) Terms of conversion/redemption: 1 optionally convertible redeemable preference shares of Rs 10 each will convert to 1 equity
share of face value Rs. 10/- at any time during the tenure of 10 years from allotment. Redeemable at any time during the
tenure of the OCRPS at its face value.
(v) Terms of conversion: 1 compulsory convertible preference share of face value Rs. 10/- each will convert to 1 equity share of
face value Rs. 10/- at end of the tenure of 20 years from allotment.
(ii) Terms / rights attached to equity shares
The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled
to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of
Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the
Company, after distribution of all preferential amounts, if any. The distribution will be in proportion to the number of equity
shares held by the shareholders.
12(b). Other equity
Securities premium
Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of the
Companies Act, 2013.
Capital Reserve
The amount represents surplus of fair value of tangible assets and other balances taken over compared to the purchase price in
relation to the acquisition through slump sale of Unit 3 biologics manufacturing facility in Bangalore, India, from Stelis Biopharma
Limited (SBL).
Retained earnings
The amount represents surplus in statement of profit and loss not transferred to any reserve and can be distributed by the
Company as dividends / issue of bonus shares to its equity shareholders. The amount also includes retained earnings of Syngene
Employee Welfare Trust.
Treasury shares
The amount represents cost of own equity instruments that are acquired [treasury shares] by the ESOP trust and is disclosed as a
deduction from other equity.
Re-measurement on defined benefit plans
The amount represents re-measurements of defined benefit plans owing to Actuarial (gain) / loss arising from: Demographic
assumptions, Financial assumptions and Experience adjustment along with re-measurement on account of return on plan assets,
excluding amounts included in interest expense / (income).
Special Economic Zone (SEZ) reinvestment reserve
The SEZ Re-Investment reserve has been created out of profit of eligible SEZ units in terms of the provisions of Section 10AA(1)(ii)
of the Income-Tax Act, 1961. The reserve has been utilised for acquiring new plant and machinery for the purpose of its business
in terms of section 10AA(2) of the Income-Tax Act, 1961.
Share based payment reserve
The fair value of the equity-settled share based payment transactions with employees is recognised in statement of profit and loss
with corresponding credit to employee stock options outstanding account. The amount of cost recognised is transferred to share
premium on exercise of the related stock options. Also refer Note 33 for further details on these plans.
Cash flow hedging reserves
The cash flow hedging reserve represents the cumulative effective portion of gains or losses (net of tax) arising on changes in fair
value of designated portion of hedging instruments entered into for cash flow hedges. Any reclassification of amounts from other
comprehensive income to profit and loss will reduce the cumulative effective portion.
Other Items of other comprehensive income
Other Items of other comprehensive income represents re-measurements of the equity instruments at fair value through OCI.
Notes:
(i) The Company had entered into a foreign currency term loan agreement dated March 30, 2021, to borrow USD 20 million
(Rs. 1,644) for a term loan facility. The facility is borrowed to incur capital expenditure at the Bengaluru, Hyderabad and
Mangaluru premises of the Company and was used for this specific purpose. The facility carries an interest rate of 6M
SOFR 1.17% and is to be paid in three instalments of 15%, 25% and 60% from the end of 3 years, 4 years and 5 years
respectively from the origination date. The facility is secured by first priority pari passu charge on fixed assets (movable plant
and machinery) and second charge on current assets of the Company. The Company is compliant with the financial covenants
stipulated under the agreement.
(v) The above disclosures include related parties as per IND-AS 24 on "Related Party Disclosures" and Companies Act, 2013.
(vi) All outstanding balances are unsecured and repayable in cash.
27. Employee benefit plans
(i) The Group has a defined benefit gratuity plan governed by the Indian Law. Plan entitles an employee, who has rendered at
least five years of continuous service, to gratuity payable on termination of his employment at the rate of fifteen days wages
for every completed year of service or part thereof in excess of six months, based on the rate of wages last drawn by the
employee concerned.
"In accordance with Indian law, Syngene International Limited and its subsidiaries in India operate a scheme of gratuity which
is a defined benefit plan. The gratuity plan provides for a lump sum payment to vested employees at retirement, death while
in employment or on termination of employment in accordance with the provisions under the Code on Social Security, 2020
or as per the Company Scheme, as applicable. Vesting occurs upon completion of contractual period of continuous years of
service as defined in the Code on Social Security, 2020. The Company manages the plan through a trust. Trustees administer
contributions made to the trust. Up to FY25 plan assets are maintained with HDFC Life Insurance Company Limited (HDFC
Life) in respect of gratuity scheme for employees of the Company. The Company actively monitors how the duration
and expected yield of the investments are matching the expected outflows arising from the employee benefit obligations.
Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
Level 3 investments comprises of unquoted equity instruments. The fair value of Level 3 investments are based on the market
comparable approach of similar companies using discounted revenue multiples. They are classified as level 3 fair values in the fair
value hierarchy due to the use of unobservable inputs, including own credit risk.
(a) The carrying amount of financial assets and financial liabilities measured at amortised cost in the Standalone Financial
Statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying
amounts would be significantly different from the values that would eventually be received or settled.
(b) There has been no transfers between level 1, 2 and 3.
(c) The Company enters into derivative financial instruments with various counterparties. Derivatives are valued using valuation
techniques in consultation with market expert. The most frequently applied valuation technique include forward pricing, swap
models and Black Scholes Merton Model (for options valuation), using present value calculations. The models incorporate
B. Financial risk management
The Company's activities expose it to a variety of financial risks : credit risk, market risk and liquidity risk.
(i) Risk management framework
The Company's risk management is carried out by the treasury department under policies approved by the Board of
Directors. The Board provides written 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.
(ii) Credit risk
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
unbilled revenues) and from its investment activities, including deposits with banks and financial institutions, investments
in mutual funds and other financial instruments.
The Company has established a credit mechanism under which each new customer is analysed individually for
creditworthiness before the Company's standard payment and delivery terms and conditions are offered. The Company's
review includes external ratings, where available, and other publicly available financial information. Outstanding
customer receivables are regularly monitored.
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 and
unbilled revenue amounting to Rs. 4325 (31 March 2025: Rs 4,694). The movement in allowance for impairment in
respect of trade receivables during the year was as follows:
Other than trade receivables the Company has no significant class of financial assets that is past due but not impaired.
There is no receivable from single customer which is more than 10 percent of the Company's total receivables during the
current and previous financial year.
Credit risk on investments, cash and cash equivalent and derivatives is limited as the Company generally transacts with
banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies.
All these banks and financial institutions are high-rate funds of minimum AA and above. Investments primarily include
investment in liquid mutual fund units and inter-corporate deposits with financial institutions.
(iii) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another financial asset. The Company's approach to managing liquidity
is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both
normal and stressed conditions, without incurring unacceptable losses or risking damage to 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 table below provides details regarding the undiscounted contractual maturities of significant financial liabilities as of
31 March 2026:
(iv) Market risk
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 foreign exchange rates, interest rates and equity prices.
Foreign currency risk
The Company operates internationally and a major portion of the business is transacted in several currencies and
consequently, the Company is exposed to foreign exchange risk through operating and borrowing activities in foreign
currency. The Company holds derivative instruments such as foreign exchange forward and option contracts to mitigate
the risk of changes in exchange rates and foreign currency exposure.
Derivative financial instruments
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 forcasted
transactions like sales and purchases. When a derivative is entered for hedging, the Company matches the terms of
those derivatives to the underlying exposure. All identified exposures are managed as per the policy duly approved by
the Board of Directors.
The following table gives details in respect of outstanding foreign exchange forward and option contracts as of 31
March 2026:
Cash flow and fair value interest rate risk
The Company's main interest rate risk arises from long-term borrowings with variable rates, which expose the Company
to cash flow interest rate risk. During the year ended 31 March 2026 and 31 March 2025 the Company's borrowings at
variable rate were mainly denominated in USD.
(b) Sensitivity
Variable rate borrowings:
A reasonably possible increased / (decreased) of 100 bps would impact profit and loss and equity by Rs. Nill (31 March
2025 : Rs. 10).
29. Capital management
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 uphold investor, creditor and customer confidence and to ensure future development of its business. The Company
focused on keeping strong total equity base to ensure independence, security, as well as a high financial flexibility for potential
future borrowings, if required without impacting the risk profile of the Company.
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 31 March 2026 and 31 March 2025 was as follows:
32. Segmental Information
Operating segments
The Company is engaged in a single operating segment of providing contract research and manufacturing services. Accordingly,
there are no additional disclosures to be provided Ind AS 108 'Operating Segments' other than those already provided in
these standalone financial statements.
Geographical information
The geographical information analyses the Company's revenues and non-current assets by the Company's country of domicile
(i.e. India) and other countries. In presenting the geographical information, revenue has been based on the geographic
location of the customers and assets which have been based on the geographical location of the assets.
Major customer
Revenue from two customers of the Company's Revenue from operations aggregates to Rs.12,196 (31 March 2025 - Rs.
13,621) which is more than 10 percent of the Company's total revenue.
33. Share based compensation
(1) Syngene ESOP Plan 2011
On 20 July 2012, Syngene Employee Welfare Trust ('Trust') was created for the welfare and benefit of the employees and
directors of the Company and administrated by the Nomination and Remuneration Committee. The Board of Directors
approved the employee stock option plan of the Company. On 31 October 2012, the Trust subscribed into the equity shares
of the Company using the proceeds from interest free loan of Rs. 150 obtained from the Company.
Grant
Pursuant to the Scheme, the Company has granted options to eligible employees of the Company under Syngene Employee
Stock Option Plan - 2011. Each option entitles for one equity share. The options under this grant will vest to the employees as
25%, 35% and 40% of the total grant at end of second, third and fourth year from the date of grant, respectively, with an
exercise period of three years for each grant. The vesting conditions include service terms and performance of the employees.
These options are exercisable at an exercise price of Rs. 11.25 [31 March 2025 : Rs. 11.25] per share (Face Value of Rs. 10 per
share).
(2) Syngene Restricted Stock Unit Long Term Incentive Plan 2020
The Board of Directors of the Company on 24 April 2019 and the Shareholders of the Company in the Annual General
Meeting held on 24 July 2019 approved the Syngene Restricted Stock Unit Long Term Incentive Plan FY 2020. Each option
entitles for one equity share. The options under this grant will vest to the employees as 25%, 25%, 25% and 25% of the
total grant at the end of first, second, third and fourth year from the date of first grant, respectively, with an exercise period
of 5 years for each grant. The vesting conditions include service terms and performance of the employees. These options are
exercisable at an exercise price of Rs. 10 per share (Face Value of Rs. 10 per share).
The weighted average remaining contractual life for the stock options outstanding as at 31 March 2026 is 1.34 years [31
March 2025 : 2.34 years ].
Assumptions used in determination of the fair value of the stock options under the Black Scholes Model are as follows:
Expected volatility has been based on an evaluation of the historical volatility of the Company's share price, particularly
over the historical period commensurate with the expected term. The expected term of the instruments has been based on
historical experience and general option holder behaviour.
(3) Syngene Long Term Incentive Performance Share Plan 2023
The Board of Directors of the Company on 22 March 2023 and the Shareholders of the Company on 23 April 2023 approved
the Syngene Long Term Incentive Performance Share Plan 2023. Each option entitles for one equity share. The plan comprises
of 3 metrics basis which performance is evaluated and the units shall vest between FY 2026 to FY 2028 on 31 May after the
close of each the third financial year for which the performance is being considered i.e. 31 May 2025, with an exercise period
of 5 years for each grant. The vesting conditions include service terms of the employees. These options are exercisable at an
exercise price of Rs. 10 per share (Face Value of Rs. 10 per share).
(4) Syngene Long Term Incentive Outperformance Share Plan 2023
The Board of Directors of the Company on 22 March 2023 and the Shareholders of the Company on 23 April 2023 approved
the Syngene Long Term Incentive Outperformance Share Plan 2023. The performance assessment period for the said plan is
FY 2023 to FY 2027 (i.e. 5 years). However, no grants were given to any employees during the year ended 31 March 2026.
Accordingly, no accounting has been done in the current financial year.
(5) Syngene Phantom Stock Option plan 2025(PSOP)
The Board of Directors of the Company on 08 October 2025 approved the Syngene Phantom Stock Option plan 2025. Each
option entitles for Cash equivalent to the excess of threshold being determined as on the date of Vesting. The plan comprises
of 3 metrics basis which performance is evaluated and the units shall vest on FY 2026 to FY 2028 on 31 May after the close
of the third financial year for which the performance is being considered i.e. 31 May 2025, with an exercise period of 3 years
for each grant. The vesting conditions include service terms of the employees. The PSOP are classified as liability awards and
expensed over the employee requisite service period (three years) based on the fair market value of a Share of the Company
as determined by a registered valuer as of each balance sheet date.
34. Leases
The Company has entered into lease agreements for use of land, buildings, plant and equipment and vehicles which expires over
a period ranging upto the year of 2038. Gross payments for the year aggregate to Rs. 268 (31 March 2025 - Rs. 318).
The weighted average borrowing rate of 8% has been applied to lease liabilities recognised in the balance sheet at the date of
initial application.
The following is the movement in lease liabilities during the year ended 31 March 2026:
35. Exceptional items
(a) On November 21, 2025, the Government of India notified the four Labour Codes - the Code on Wages, 2019, the Industrial
Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions
Code, 2020 - consolidating 29 existing labour laws. The Ministry of Labour & Employment published draft Central Rules and
Frequently Asked Questions(FAQs) to enable assessment of the financial impact due to changes in regulations. The Group
initially assessed and disclosed the incremental impact of these changes on the basis its existing remuneration structure.
Considering the materiality and regulatory-driven, non-recurring nature of this impact, the Group presented such incremental
impact under "Exceptional Items" in the standalone financial result for the period ended December 31,2025. The incremental
expense consisting of gratuity of Rs. 658 million in the standalone financial statement primarily arose due to change in wage
definition.
During the quarter ended 31 March 2026, the management re-assessed the impact of the new labour codes based on the
revised remuneration structure. Accordingly, the gratuity obligation was re-measured, resulting in a credit of Rs. 229 million
in the standalone financial statement for the current quarter.
For the year ended 31 March 2026, the net expense recognised under Exceptional Items amounted to Rs. 429 million in the
standalone financial statement.
The Company continues to monitor the finalisation of Central / State Rules and clarifications from the Government on other
aspects of the Labour Code and would accordingly take necessary steps for compliance thereof and also provide appropriate
accounting effect on the basis of such developments, as needed.
(b) During the quarter ended 31 March 2026, termination benefits amounting to INR 304 million were extended to employees
in accordance with the approved policy. Considering the nature, significance and frequency of these benefits, these are
disclosed as "Exceptional items" in the standalone financial Statements.
(c) During the year ended 31 March 2025, the Company have received its final claim of Rs 320 million from the insurance
company for the loss of fixed assets in a fire incident on 12 December 2016, and the same has been presented in this
standalone financial statements under the 'Exceptional Items'.
Explanation for variance more than 25% in the above ratios:
(i) Improvement in debt equity ratio is due to repayment of borrowings for Rs. 1025 during the year ended 31 March 2026.
(ii) Decline in debt service coverage ratio is primarily due to lesser repayment of borrowings as compared to preceeding financial
year.
(iii) Improvement in net capital turnover ratio is on account of higher revenue from operation and lesser net working capital.
(iv) Improvement in inventory turnover ratio is on account of lower inventory levels.
39. Other Statutory Information :
(i) The Company does not have any Benami property or any proceeding is pending against the Company for holding any Benami
property.
(ii) The Company do not have any transactions with companies struck off.
(iii) The Company do 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 has not advanced or loaned or invested any funds (either from borrowed funds or share premium or any other
sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries")
with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified
by or on behalf of the Company (Ultimate Beneficiaries).
(vi) The Company has not received any fund from any parties (Funding Party) with the understanding that the Company shall
whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company ("Ultimate
Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(vii) The Company is not classifed as wilful defaulter by Reserve Bank of India."
(viii) The Company doesn't have any transaction which is not recorded in the books of accounts that has been surrendered or
disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 such as search or survey.
(ix) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both
during the current or previous year.
40. (a) On 23 April 2025, the Board of Directors of the Company have approved an allotment of 402,439 equity shares of Rs.
10/- (Rupees Ten each) of the Company to Syngene Employees Welfare Trust at face value pursuant to special resolution
passed through Postal Ballot on 23 April 2023 to allot fresh equity shares upto 0.55% (2,200,000 shares) of the paid-
up equity capital of the Company in tranches for the purpose of implementation of the Syngene Long Term Incentive
Performance Share Plan 2023.
(b) On 24 April 2024, the Board of Directors of the Company have approved an allotment of 521,981 equity shares of Rs.
10/- (Rupees Ten each) of the Company to Syngene Employee Welfare Trust at face value pursuant to the shareholder's
approval at the Annual General Meeting on 24 July 2019 to allot fresh equity shares upto 1.67% of the paid-up equity
capital of the Company in tranches for the purpose of implementation of the Syngene International Limited - Restricted
Stock Unit Long Term Incentive Plan FY 2020."
41. On 23 April 2025, the Board of Directors recommended a final dividend of Rs. 1.25 per equity share of Rs. 10/-. The proposed
dividend was subject to the approval of the shareholders in the Annual General Meeting. The shareholders approved the
dividend in the Annual General Meeting held on 23 July 2025 and was subsequently paid.
42. During the quarter ended 31 March 2025, Syngene USA Inc. (wholly-owned subsidiary of the Company) has acquired
biologics site in the USA fitted with multiple monoclonal antibody (mAbs) manufacturing lines from Emergent Manufacturing
Operations Baltimore, LLC (a subsidiary of Emergent BioSolutions Inc.). This acquisition will increase the company's total single¬
use bioreactor capacity to 50,000L for large molecule discovery, development, and manufacturing services. This acquisition
will also increase the options that can be offered to global customers, providing commercial scale biologics manufacturing
capabilities across the Group's global network. The transaction was accounted for as an 'asset acquisition' under Ind AS 103
during the year ended 31 March 2025. The cost incurred till 31 March 25 eligible for capitalization was accumulated as
Capital Work in Progress amounting to Rs. 2,981 million (USD 34.89 million). An amount of Rs. 311 million (USD 3.64 million)
was capitalized as Land. These amounts included pre-transaction costs of Rs. 101 million (USD 1.18 million). During the year
ended 31 March 2026, additional pre-operating cost of Rs. 787 million (USD 8.4 million) eligible for capitalisation has been
accumulated under capital work in progress.
43. During the quarter ended 30 September 2025, Rs. 277 million net (Rs. 202 million after tax) was written off as unrecoverable
balances in receivables due to cumulative changes in foreign exchange rates.
44. Events after reporting period
a) On 29 April 2026, the Board of Directors of the Company have approved an allotment of 7,29,727 equity shares
of Rs. 10/- (Rupees Ten each) of the Company to Syngene Employees Welfare Trust at face value for the purpose of
implementation of the Syngene Long Term Incentive Performance Share Plan 2023.
(b) On 29 April 2026, the Board of Directors recommended a final dividend of Rs. 1.25 per equity share of Rs. 10/-. The
proposed dividend is subject to the approval of the shareholders in the Annual General Meeting.
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