r. Provisions, contingent liabilities and contingent assets
Provisions are recognized only when there is a present obligation, as a result of past events, and when a reliable estimate of the amount of obligation can be made at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. Provisions are discounted to their present values, where the time value of money is material.
Contingent liability is disclosed for:
• Possible obligations which will be confirmed only by future events not wholly within the control of the Company; or
• Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
Contingent assets are neither recognized nor disclosed. However, when realization of income is virtually certain, related asset is recognized.
s. Exceptional items
Exceptional items are transactions which due to their size or incidence are separately disclosed to enable a full understanding of the Company's financial performance. Items which may be considered exceptional are
significant restructuring charges, gains or losses on disposal of investments in subsidiaries, impairment losses/write down in value of investment in subsidiaries, significant disposal of property, plant and equipment, investment property etc.
(iii) Standards (including amendments) issued but not yet effective
Amendment to Ind AS 1 'Presentation of Financial Statements'- Classification of Liabilities as current or non-current and non-current liabilities with covenants:
The amendment includes specific provisions that will take effect for reporting periods beginning on or after 1 April 2026, retrospectively, as outlined below:
a) Breach of material covenant for long-term loan arrangement on or before end of reporting period with effect that liability becomes payable on demand as on reporting date, then it shall be classified as current liability, if lender agreed after reporting period and before approval of financial statements to not demand payment as a consequence of breach.
b) Classify as non-current liability, if lender agreed by end of reporting period to provide grace period ending at least 12 months after reporting period within which entity can rectify the breach provided lender does not demand immediate repayment.
c) Disclose information about the timing of settlement to understand the impact of the liability on the financial statements.
The Company does not expect this amendment to have an impact on its operations or financial statements.
1 Project execution plans are reviewed periodically on the basis of management judgement and estimates w.r.t future technology and development/economy/industry/regulatory environment and all the projects are assessed as per periodic plans.
2 During the year the Company has capitalised interest costs on specified borrowings amounting to ? 148.93 (March 31, 2025: ? Nil) with the effective interest rate for capitalisation was approx 7.3% (March 31,2025: Nil).
3 Contractual Obligation: Refer Note 39 for details of contractual Commitments for acquiring Property, plant and equipment.
Investments in JETL and PETL are in the nature of investments in equity instruments which are not held for trading. Instead, they are held for long term strategic purpose. Upon the application of Ind AS 109, the Company has chosen to designate these investments in equity instruments at fair value through other comprehensive income ('FVTOCI'), irrevocably, as the Management believes that this provides a more meaningful presentation for long term strategic investments, than reflecting changes in fair value immediately in profit or loss.
The investment was recognised initially at transaction cost and irrevocably designated at FVTOCI.
Refer Note 31 for fair value measurement and Note 32 for information about the company's exposure to financial risks.
ii. Rights, preferences and restrictions attached to equity shares:
The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to approval of shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts in proportion of their shareholding. The Company has only one class of equity shares having a par value of ?10 per share. Each holder of equity shares is entitled to one vote per share.
(b) The above loans are secured by pari-passu first charge on property, plant and equipment (both present and future) and second charge (hypothecation) on the current assets of the Company.
(c) Vehicles loans outstanding to the tune of ? 609.67 (March 31, 2025: ? ? 527.71) are secured by hypothecation of specific vehicles against which the loan was availed. These vehicle loans are repayable in instalments in 48 months from the date of the loan.
(d) All the above loans carry interest in the range of 1.8% to 8.9% per annum as at March 31, 2026 (March 31, 2025: 1.8% to 9.0% per annum) being floating and fixed rate.
(e) The Company has utilised the Borrowings for the pupose for which it has obtained as mentioned in the respective agreements.
(f) Refer Note 32 for the Maturity profile of borrowings including current maturities.
(g) Refer Note 31 for fair value measurement.
Gratuity
The Company has a defined benefit funded gratuity plan and it operates through Neuland Laboratories Limited employee group gratuity trust ("the Trust") except for contract workman engaged through contractors. Every employee who has completed service of five years or more and one year or more in case of fixed term employees gets a gratuity on departure at 15 days wages (as defined as per New Labour Code) for each completed year of service. The Company has subscribed to a group gratuity scheme of Life Insurance Corporation of India (LIC) and SBI Life and contributes the gratuity liability to the Trust. Under the said policy, the eligible employees are entitled for gratuity upon their resignation or in the event of death in lumpsum after deduction of necessary taxes up to a maximum limit of ?20.
The following table set out the status of the gratuity plan and the reconciliation of opening and closing balances of the present value and defined benefit obligation.
Notes:
(i) The Company has access to financing facilities in the form of Letter of Credit / Bank Guarantee / Buyers Credit / Cash Credit facilities of ? 60,000.00 out of which ? 26,662.55 were not used (March 31, 2025 : ? 35,140.00 out of which ? 30,082.26 were not used) at the end of the reporting period.
(ii) The loans with all working capital lenders are secured by way of pari-passu first charge on all the current assets of the Company and pari-passu second charge on Company's property, plant and equipment.
(iii) The quarterly returns/statements submitted with banks are in agreement with the books of accounts.
Performance Obligation:
Sale of products: Performance obligation in respect of sale of goods is satisfied when control of the goods is transferred to the customer, generally on delivery of the goods and payment is generally due as per the terms of contract with customers.
Sale of services: The performance obligation in respect of maintenance services is satisfied over a period of time and acceptance of the customer. In respect of these services, payment is generally due upon completion of maintenance period based on time elapsed and acceptance of the customer. In certain non-standard contracts, where the Company provides warranties in service of consumer durable goods, the same is accounted for as a separate performance obligation and a portion of the transaction price is allocated based on its relative standalone prices. The performance obligation for the warranty service is satisfied over a period of time based on time elapsed.
Remaining performance obligations
The aggregate value of transaction price allocated to unsatisfied (or partially satisfied) performance obligations in case of contracts for which revenues are recorded over a period of time is ?232.20 (March 31,2025: ?211.36), which is expected to be fully recognised as revenue in the next year. No consideration from contracts with customers is excluded from the amount mentioned above and contract asset relating to partially satisfied performance obligations aggregates to ?117.28 as at March 31, 2026 (March 31, 2025: ?49.83)
(i) Details of CSR expenditure :
As per Section 135 of the Companies Act, 2013, the required CSR expenditure for the year ended March 31,2026 was ? 608.99 (March 31,2025: ? 491.52). During the year, amounts were primarily utilised towards promoting education, skill development, women's empowerment, health and well-being, clean water and sanitation, development of village infrastructure, and environmental sustainability.
31. FAIR VALUE MEASUREMENTS (i) Fair value hierarchy
Financial assets and financial liabilities measured at fair value in the Balance Sheet are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data either directly or indirectly.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
32. FINANCIAL INSTRUMENTS RISK MANAGEMENT
The Company is exposed to various financial risks arising from its operations and the use of financial instruments. The key financial risks include market risk, credit risk and liquidity risk. The Company's risk management policies are established to identify and analyse the risks faced by the Company and seek to, where appropriate, minimize potential impact of the risk and to control and monitor such risks. The Company's risk management is coordinated by the Board of Directors and focuses on securing long term and short term cash flows. The Company does not engage in trading of financial assets for speculative purposes.
The following sections provide details regarding the Company's exposure to the financial risks associated with financial instruments held in the ordinary course of business and the objectives, policies and processes for management of these risks.
A. 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. Market risk comprises two types of risk: interest rate risk and currency risk. Financial instruments affected by market risk include borrowings, deposits, trade receivables and other financial instruments.
The sensitivity analyses in the following sections relate to the position as at March 31,2026 and March 31,2025. The analysis exclude the impact of movements in market variables on the carrying values of gratuity and other post retirement obligations; provisions; and non-financial assets and liabilities.
i. Interest rate risk:
I nterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company has loan facilities on floating interest rate, which exposes the Company to risk of changes in interest rates. The management monitors the interest rate movement and manages the interest rate risk based on its policies, which include entering into interest rate swaps as considered necessary. The Company's investment in deposits with banks are for short durations and therefore do not expose the Company to significant interest rate risk. Below are the details of exposure to fixed rate and variable rate instruments:
The Company's principal financial liabilities comprise borrowings, lease liabilities, trade and other payables. The main purpose of these financial liabilities is to finance the Company's operations. The Company's principal financial assets comprise of investments, trade and other receivables, cash and cash equivalents and other bank balances derived directly from its operations.
(iv) The carrying amounts of trade receivables, trade payables and cash and cash equivalents are considered to be the same as their fair values, due to their short-term nature. Difference between carrying amounts and fair values of bank deposits, other financial assets, other financial liabilities and borrowings subsequently measured at amortised cost is not significant in each of the years presented. For all other amortised cost instruments, carrying value represents the best estimate of fair value. For financial assets measured at fair values, the carrying amounts are equal to the fair values.
Every 0.5% increase/decrease in the interest rate component applicable to the respective borrowings would effect the Company's net profit before tax resulting in an expense/income of ?89.78 and ?55.51 for the year ended March 31,2026 and March 31, 2025 respectively.
ii. Foreign currency risk:
Foreign currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. The Company's exposure to the risk of change in foreign exchange rates relates primarily to the Company's operating activities (when revenue or expense is denominated in foreign currency) and financing activities (when borrowings are denominated in foreign currency), The foreign currencies in which these transactions are denominated are US Dollars, Euros, Japanese Yen, Great British Pound and Swiss Franc.
B. Credit risk
Credit risk is the risk that a counterparty fails to discharge an obligation to the Company, leading to a financial loss. The Company is mainly exposed to the risk of its balances with the bankers and trade and other receivables. None of the Company's cash equivalents, other bank balances, loans and security deposits were past due or impaired as at March 31, 2026 and March 31, 2025.
C. Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company's reputation.
Management monitors rolling forecasts of the Company's liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows.
Maturities of financial liabilities
The tables below analyse the Company's financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows:
33. CAPITAL RISK MANAGEMENT
The Company's objective when managing capital is to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and benefits for stakeholders and to maintain an optimal capital structure to reduce the cost of capital. Hence, the Company may adjust any dividend payments, return capital to shareholders or issue new shares or sell assets to reduce debt. Total capital is the equity as shown in the statement of financial position. Currently, the Company primarily monitors its capital structure on the basis of the following gearing ratio. Management is continuously evolving strategies to optimize the returns and reduce the risks. It includes plans to optimize the financial leverage of the Company.
36(b) During the previous year, the Company has fully transferred an investment property located in Nanakramguda, Hyderabad, Telangana, through perpetual lease, resulting in total profit of ? 7,640.36 lakhs being the profit is exceptional in nature, it has been disclosed as a separate line item.
37. GOODWILL
Pursuant to the Scheme of Amalgamation and Arrangement ("the Scheme") duly approved by the National Company Law Tribunal, Hyderabad Bench vide their order dated March 21, 2018, Neuland Health Sciences Private Limited ("NHSPL") and Neuland Pharma Research Private Limited ("NPRPL") (together referred to as "Transferor Companies"), were merged with the Company with appointed date of April 01,2016. NHSPL is engaged in the business of conducting research and development of Peptides and NPRPL is in the business of contract research services.
The purchase consideration of ?31,084.99 paid by way of issue of 22,70,635 equity shares of ?10 each [in accordance with the Scheme, 45,90,608 equity shares of ?10 each held by NHSPL in the Company stands cancelled and the Company has issued 68,61,095 and 148 fully paid-up equity shares of ?10 each to the shareholders of NHSPL and NPRPL respectively] at a premium of ?1,359 per equity share.
(d) Remuneration to KMP excludes contribution for gratuity and compensated absences as the increment liability has been accounted for the Company as a whole.
(e) Transaction with related parties
In accordance with the applicable provisions of the Income Tax Act, 1961, the Company is required to use certain specified methods in assessing that the transactions with the subsidiaries, are carried at an arm's length price and is also required to maintain prescribed information and documents to support such assessment. The appropriate method to be adopted will depend on the nature of transactions / class of transactions, class of associated persons, functions performed and other factors as prescribed. Based on certain internal analysis carried out, management believes that transactions entered into with the related parties were carried out at arms length prices.
39. COMMITMENTS
Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) amounts to ?15,418.48 (March 31, 2025: ?8,325.51).
Notes:
Other Disputes/Matters:
(a) Our Company purchased land in Survey No. 490/2 situated at Bonthapally Village, Jinnaram Mandal, Medak District. The Revenue department issued notices to our Company for resumption of the said land on the ground that the same was "assigned land". Our Company has filed an application before the Collector, Medak District for regularization of the said land as per the applicable laws. Our Company also filed a writ petition before the High Court praying for an order not to take any coercive steps. The High Court vide its order dated March 18, 2011 directed the revenue department to not take any coercive steps till the disposal of the representation filed by our Company. The matter is pending before the Collector, Medak District. The management believes that the outcome will be in favour of the Company and hence no adjustment is made in the financial statements.
(b) During the financial year ended March 31,2008, the Commissioner and Inspector General of Stamps and Registration (CIGSR), Andhra Pradesh has vide it's order dated February 22, 2008 has cancelled the registration of the land parcel owned by the Company situated at Bonthapally pursuant to complaint made by one of the seller. Aggrieved by the aforesaid order the Company has filed a writ petition challenging order of CIGSR with Hon'ble High Court of Telangana (the 'Court') as the Company was not involved during the proceedings. The Court has vide its order dated December 31, 2010 has directed to maintain the status quo with regards to the possession of the property till further orders passed. Proceedings of the case are still pending with the court. The management is confident that orders will be in the favour of the Company, hence no adjustment is deemed necessary to these standalone financial statements.
(c) The Company received demand notices from the electricity authority (TSSPDCL) for amounts related to surplus power adjustments between 2005 and 2007. Following a High Court ruling that allowed revised billing, the authority demanded both principal amount and surcharge (interest).
The Company has already paid the principal amount under protest. Based on legal advice, management believes no additional liability (particularly for surcharge) will arise.
Notes:
1. The aggregate depreciation expense on right-of-use assets of ? 1,002.40 (March 31,2025: ? 491.56) is included under depreciation and amortization expense in the Statement of Profit and Loss.
2. Rental expense recorded for short-term and low value leases was ? 98.56 (March 31,2025: ? 77.84) for the year ended March 31, 2026 (Refer Note 28).
3. The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.
44. SEGMENT REPORTING
In accordance with Ind AS 108 - 'Operating segments', segment information has been given in the consolidated financial statements of the Company and therefore no separate disclosure on segment information is given in these standalone financial statements.
45. 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 FAQs to enable assessment of the financial impact due to changes in regulations. The Company has considered the impact of the changes, consistent with the Labour Codes, draft rules, FAQs and legal opinion. 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 provide appropriate accounting effect on the basis of such developments as needed.
46. The Company has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the Company did not have any long-term contracts (including derivative contracts) for which there were any material foreseeable losses.
47. OTHER STATUTORY INFORMATION:
i The Company does not have any Benami property, where any proceeding has been initiated or pending against the company for holding any Benami property.
i i The Company has not been declared wilful defaulter by any bank or financial institution or government or any
government authority.
iii The Company does not have any transactions with companies struck off under section 248 of the Act or section 560 of Companies Act, 1956.
iv The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies beyond the statutory period.
v The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.
vi The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.
vii 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 the Company to or in any other person(s) or entity(ies), 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).
viii The Company has not received any fund from any party(s) (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.
ix The Company does not have any undisclosed income which is not recorded in the books of account that has been surrendered or disclosed as income during the year (and previous year) in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
x The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.
xi The Company has not revalued its property, plant and equipment (including right-of-use assets) and intangible assets during the current year and previous year.
48. The standalone financial statements are approved for issue by the Company's Board of Directors on May 12, 2026.
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