3.15 Provisions (Other than employee benefits)
Provisions are recognised when the Company has a present
obligation (legal or constructive) as a result of a past event,
it is probable that the Company will be required to settle
the obligation, and a reliable estimate can be made of the
amount of the obligation.
The amount recognised as a provision is the best estimate of
the consideration required to settle the present obligation
at the end of the reporting period, taking into account the
risks and uncertainties surrounding the obligation. When
a provision is measured using the cash flows estimated
to settle the present obligation, its carrying amount is the
present value of those cash flows (when the effect of the
time value of money is material).
When some or all of the economic benefits required to
settle a provision are expected to be recovered from a
third party, a receivable is recognised as an asset if it is
virtually certain that reimbursement will be received and
the amount of the receivable can be measured reliably.
3.15.1 Onerous contracts
Present obligations arising under onerous contracts are
recognised and measured as provisions. An onerous
contract is considered to exist where the Company has
a contract under which the unavoidable costs of meeting
the obligations under the contract exceed the economic
benefits expected to be received from the contract.
Before a provision is recognised company will recognise
an impairment loss on the assets associated with
that contract.
3.15.2 Contingent liabilities
Contingent liability is a possible obligation arising from past
events and whose existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain
future events not wholly within the control of the entity or
a present obligation that arises from past events but is not
recognized because it is not probable that an outflow of
resources embodying economic benefits will be required to
settle the obligation or the amount of the obligation cannot
be measured with sufficient reliability. The Company
does not recognize a contingent liability but discloses its
existence in the consolidated financial statements.
3.16 Financial instruments
3.16.1 Investment in subsidiaries, associates and
Joint Ventures
The Company has accounted for its investments in
subsidiaries and associates joint ventures at cost
less impairment.
3.16.2 Other financial assets and financial
liabilities
Other financial assets and financial liabilities are
recognised when Company becomes a party to the
contractual provisions of the instruments.
Initial recognition and measurement:
A financial asset (unless it is a trade receivable without a
significant financing component) is initially measured at
fair value plus, for an item not at FVTPL, transaction costs
that are directly attributable to its acquisition or issue. A
trade receivable without a significant financing component
is initially measured at the transaction price. Financial
liabilities are initially measured at fair value. Transaction
costs that are directly attributable to the acquisition or
issue of financial assets and financial liabilities (other
than financial assets and financial liabilities at fair value
through profit or loss) are added to or deducted from the
fair value of the financial assets or financial liabilities,
as appropriate, on initial recognition. Transaction costs
directly attributable to the acquisition of financial assets
or financial liabilities at fair value through profit or loss are
recognised immediately in statement of profit and loss.
However, trade receivables that do not contain a significant
financing component are measured at transaction price.
Subsequent measurement:
Financial assets at amortised cost
Financial assets are subsequently measured at amortised
cost if these financial assets are held within a business
whose objective is to hold these assets in order to collect
contractual cash flows and contractual terms of financial
asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal
amount outstanding.
Financial assets at fair value through other
comprehensive income
Financial assets are measured at fair value through other
comprehensive income if these financial assets are held
within business whose objective is achieved by both
collecting contractual cash flows on specified dates
that are solely payments of principal and interest on the
principal amount outstanding and selling financial assets.
Financial assets at fair value through profit or loss
Financial assets are measured at fair value through profit
or loss unless it measured at amortised cost or fair value
through other comprehensive income on initial recognition.
The transaction cost directly attributable to the acquisition
of financial assets and liabilities at fair value through profit
or loss are immediately recognised in the statement of
profit and loss.
Financial liabilities
Financial liabilities are measured at amortised cost using
effective interest rate method. For trade and other payables
maturing within one year from the balance sheet date, the
carrying amounts approximate fair value due to the short
maturity of these instruments.
Offsetting
Financial assets and financial liabilities are offset and the
net amount presented in the balance sheet when, and only
when, the Company currently has a legally enforceable
right to set off the amounts and it intends either to settle
them on a net basis or to realise the asset and settle the
liability simultaneously.
Derecognition
Financial assets
The Company derecognises a financial asset when:
• the contractual rights to the cash flows from the financial
asset expire; or
• it transfers the rights to receive the contractual cash
flows in a transaction in which either:
— substantially all of the risks and rewards of
ownership of the financial asset are transferred; or
— the Company neither transfers nor retains
substantially all of the risks and rewards of
ownership and it does not retain control of the
financial asset.
The Company enters into transactions whereby it transfers
assets recognised on its balance sheet but retains either
all or substantially all of the risks and rewards of the
transferred assets. In these cases, the transferred assets
are not derecognised.
Financial liabilities
The Company derecognises a financial liability when
its contractual obligations are discharged or cancelled
or expire. The Company also derecognises a financial
liability when its terms are modified and the cash flows of
the modified liability are substantially different, in which
case a new financial liability based on the modified terms
is recognised at fair value.
On derecognition of a financial liability, the difference between
the carrying amount extinguished and the consideration
paid (including any non-cash assets transferred or liabilities
assumed) is recognised in profit or loss.
3.16.3 Equity instruments
An equity instrument is a contract that evidences residual
interest in the assets of the Company after deducting all
of its liabilities. Equity instruments recognised by the
Company are recognised at the proceeds received net off
direct issue cost.
3.16.4 Financial guarantee contracts
At the inception of a financial guarantee contract, a liability
is recognised initially at fair value and then subsequently
at the higher of the estimated loss and amount initially
recognised less, when appropriate, the cumulative
amount of income recognised, the changes in subsequent
measurement being recognised in the statement of profit
and loss. Where a guarantee is issued for a consideration,
a financial asset of an amount equal to the liability is
initially recognised at amortised cost. Where a guarantee
is issued for no consideration, the fair value is recognised
as additional investment in the entity to which the
guarantee relates.
3.16.5 Derivative financial instruments and hedge
accounting
The Company uses various derivative financial instruments
such as interest rate swaps, currency swaps and forward
contracts to mitigate the risk of changes in interest rates
and foreign exchange rates. Such derivative financial
instruments are initially recognised at fair value on the
date on which a derivative contract is entered into and are
also subsequently measured at fair value. Derivatives are
carried as financial assets when the fair value is positive
and as financial liabilities when the fair value is negative.
Any gains or losses arising from changes in the fair value
of derivatives are taken directly to the Statement of Profit
and Loss, except for the effective portion of cash flow
hedges which is recognised in Other Comprehensive
Income and later to the Statement of Profit and Loss when
the hedged item affects profit or loss or treated as basis
adjustment if a hedged forecast transaction subsequently
results in the recognition of a non-financial assets or non¬
financial liability.
Hedges that meet the criteria for hedge accounting are
accounted for as follows:
Cash flow hedge
The Company designates derivative contracts or
non derivative financial assets / liabilities as hedging
instruments to mitigate the risk of movement in interest
rates and foreign exchange rates for foreign exchange
exposure on future cash flows attributable to a recognised
asset or liability or highly probable forecast cash
transactions. When a derivative is designated as a cash
flow hedging instrument, the effective portion of changes in
the fair value of the derivative is recognized in the cash flow
hedging reserve being part of other comprehensive income.
Any ineffective portion of changes in the fair value of the
derivative is recognized immediately in the Statement of
Profit and Loss. If the hedging relationship no longer meets
the criteria for hedge accounting, then hedge accounting
is discontinued prospectively. If the hedging instrument
expires or is sold, terminated or exercised, the cumulative
gain or loss on the hedging instrument recognized in cash
flow hedging reserve till the period the hedge was effective
remains in cash flow hedging reserve until the underlying
transaction occurs. The cumulative gain or loss previously
recognized in the cash flow hedging reserve is transferred
to the Statement of Profit and Loss upon the occurrence of
the underlying transaction. If the forecasted transaction is
no longer expected to occur, then the amount accumulated
in cash flow hedging reserve is reclassified in the Statement
of Profit and Loss.
3.17 Exceptional items
When an item of income or expense within profit or loss
from ordinary activity is of such size, nature or incidence
that their disclosure is relevant to explain the performance
of the Company for the year, the nature and amount of such
items is disclosed as exceptional items.
3.18 Cash and cash equivalents
Cash and cash equivalents consist of cash at banks and
on hand and short-term deposits with an original maturity
of three months or less, highly liquid investments that
are readily convertible into known amounts of cash and
which are subject to insignificant risk of changes in value.
Bank overdrafts that are repayable on demand and form
an integral part of our cash management are included as a
component of cash and cash equivalents for the purpose
of the statement of cash flows.
3.19 Earnings per share
Basic Earnings Per Share (‘EPS') is computed by dividing the
net profit(or loss) attributable to the equity shareholders by
the weighted average number of equity shares outstanding
during the year. Diluted earnings per share is computed
by dividing the adjusted profit(or loss) by the weighted
average number of equity shares considered for deriving
basic earnings per share and also the weighted average
number of equity shares that could have been issued
upon conversion of all dilutive potential equity shares.
Dilutive potential equity shares are deemed converted as
of the beginning of the year, unless issued at a later date. In
computing diluted earnings per share, only potential equity
shares that are dilutive and that either reduces earnings
per share or increases loss per share are included. The
number of shares and potentially dilutive equity shares are
adjusted retrospectively for all periods presented in case
of share splits.
3.20 Demerger of CDMO and Softgelatin business
Softgel Business division of Strides Pharma Science
Limited has been carved out during the year ended 31st
March 2025 on the basis of the following judgement:
a. Property, Plant and Equipment (PPE) situated at
Softgel block in KRS Gardens, Bangalore including
respective depreciation and capital work in progress
b. Registration and brands consisting of Intellectual
property rights for distribution and marketing of
softgelatin products including intangibles under
developments and awaiting approvals
c. Capital Creditors and Advances directly relating to
the above PPE and intangibles have been identified
and carved out.
d. Employees directly and exclusively involved in the
manufacture of Softgelatin products and employee
directly attributable/ involved in distribution of
softgel products also form part of the Softgel Division.
The employees are in the rolls of Strides Pharma
Science Limited (SPSL). As SPSL is administratively
managing the softgel business, the corresponding
cost of these employees are disclosed as employee
benefit expenses. The related employee liabilities and
advances have also been carved out with respect to
the employees.
e. Inventories situated in KRS Gardens relating
to Softgelatin products consisting of Finished
goods, Semi finished Goods, Raw materials and
packing materials directly attributable or related to
manufacture of Soft Gelatin product.
f. Trade Receivables relating to Softgel products directly
identified and carved out.
g. Borrowings from Banks and financial institutions
which were identified, assigned to Softgel business
under appropriate mechanism with the confirmation
from the lenders. The balance towards letter of
credits for Softgel Division have been identified at
specific invoice levels.
h. Trade Payables which are directly relating to Softgel
business were identified and carved out.
i. Revenues of the Softgel business were directly
identified and carved out with the corresponding
cost of materials consumed based on the underlying
softgel products' description.
j. Other Expenses which were directly identifiable to
Softgel business have been carved out and common
costs are allocated to Softgel business using
reasonable and appropriate basis.
Directly Attributable: Balances and transactions
representing assets, liabilities, incomes and
expenditures that are identifiable and attributable to
Softgel Business division of Strides Pharma Science
Limited as specified in items (a) to (f), (h) and (i) above
are carved out.
Allocable balances or transactions: Balances and
transactions other than that are directly attributable
are allocated based on appropriate method as
specified in items (g) and (j) above.
3.21Recent 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. On August, 2025, MCA notifies
the amendments to Ind AS 1 - Presentation of Financial
Statements, Ind AS 7 - Statement of Cash Flows, Ind AS
107 - Financial Instruments and Ind AS 12 - Income Taxes.
These amendments aim to provide clearer guidance on
classification of liabilities with covenants as current or
non-current, inform users of financial statements of the
existence of supplier finance arrangements and provide
temporary mandatory relief from deferred tax accounting
for top-up tax. The amendments are effective for annual
periods beginning on or after April 1, 2025. The Company
is currently assessing the probable impact of these
amendments on its financial statements.
The discount rates used are based on weighted average cost of capital.
The growth rates of the above cash generating unit have been considered based on the market conditions prevalent in the country
that would fall in respective cash generating unit.
The management believes that the projections used by the management for determining the “value in use” of cash generating unit
reflect past experience and external sources of information and any reasonably possible change in the key assumptions on which
recoverable amount is based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the
cash generating unit.
Nature and purpose of other reserve
(a) Capital reserve
Capital reserve is created on account of FCCB's, Mergers and acquisitions and Demergers. It is utilised in accordance with the
provisions of the Companies Act, 2013.
(b) 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.
(c) Reserve for Business Restructure
The Scheme of restructuring approved by the shareholders on April 13, 2009 included a Scheme of Arrangement that envisaged
the creation of a Reserve for Business Restructure (BRR) as set out in the Scheme. The Reserve was to be utilized by December
31, 2012 for specified purposes by either the Company or its subsidiaries. The balance of I 3,846.38 million identified under
the Securities Premium Account represents amounts utilized by the subsidiaries of the Company from the Reserve prior to
December 31, 2012 and have been earmarked for set off on consolidation.
(d) Capital redemption reserve
Capital redemption reserve is a statutory, non-distributable reserve into which the amounts are transferred following the
redemption or purchase of Company's own shares. It is utilised in accordance with the provisions of the Companies Act, 2013.
(e) Share options outstanding account
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.
(f) General reserve
General reserves are the retained earnings of a Company which are apportioned out of Company's profits. General reserve is
a free reserve which can be utilized for any purpose after fulfilling certain conditions in accordance with the provisions of the
Companies Act, 2013.
(g) Retained earnings
Retained earnings are the profits that the Company has earned till date, less any transfers to other reserves, dividends or other
distributions paid to its equity shareholders.
(h) Cash flow hedging reserve
The cash flow hedging reserve represents the cumulative effective portion of gains or losses (net of taxes, if any) arising on
changes in fair value of designated portion of hedging instruments entered into for cash flow hedges.
(i) Remeasurement of the defined benefit liabilities / (asset)
The cumulative balances of actuarial gain or loss arising on remeasurements of defined benefit plan is accumulated and
recognised with in this component of other comprehensive income. Items included in actuarial gain or loss reserve will not be
reclassified subsequently to statement of profit and loss.
(j) Share warrants
Board of Directors of the Company on March 14, 2022 approved the issuance of upto 2,000,000 Equity Warrants at a price of I
442/- per warrant, to Karuna Business Solutions LLP, a promoter group entity, with a right to apply for and get allotted, within
a period of 18 (Eighteen) months from the date of allotment of Warrants, 1 (one) Equity Share of face value of I 10/- (Rupee Ten
Only) each for each Warrant, for cash. The issue was approved by the shareholders of the Company at the Extra Ordinary General
Meeting held on April 7, 2022 and has also received requisite listing approvals. An amount of I 221 million equivalent to 25% of
the Warrant Price was paid to the Company at the time of subscription and the balance 75% of the Warrant Price was payable
by the Warrant holder against each Warrant at the time of allotment of Equity Shares pursuant to exercise of the options. During
the year ended March 31,2023, on exercise of options by Karuna Business Solutions LLP and on receipt of subscription money
of I 150 million, the Company has converted 452,490 convertible warrants into Ordinary Shares.
During the year ended March 31, 2024, on exercise of options by Karuna Business Solutions LLP and on receipt of balance
subscription money of I 513 million, the Company has fully converted 1,547,510 convertible warrants into Ordinary Shares.
The Company has fully utilised the amounts of I 884 million towards capital resources and operations.
Refer note 11 for significant components of deferred tax assets and liabilities.
The Company is subject to complexities with respect to various tax positions on matters such as deductibility of transactions,
availability of tax incentives and exemptions for earlier years and cross border transfer pricing arrangements, wherein it faces litigation
from the authorities over the years.
Uncertainty in a tax position may arise as tax laws are subject to interpretation. Judgment is required in assessing the range of possible
outcomes for some of these tax matters. These judgments could change over time as each of the matter progresses depending on
experience on actual assessment proceedings by tax authorities and other judicial precedents. The Company makes an assessment
(including obtaining opinion from external legal experts) to determine the outcome of these uncertain tax positions and decides to
make an accrual or consider it to be a possible contingent liability. Where the amount of tax liabilities are uncertain, the Company
recognizes accruals which reflect its best estimate of the outcome based on the facts known.
37. Merger and acquisitions
37.1 Business combination under common control
During the year ended 31st March 2025, the Scheme of Amalgamation u/s 230 to 232 of the Companies Act, 2013, between Strides
(the transferee company), Strides Alathur Private Limited (formerly known as Vivimed Lifesciences Private Limited) (the transferor
company) with an appointed date of April 1,2023 was approved by the National Company Law Tribunal (‘NCLT') Mumbai bench, vide
their order dated August 13, 2024 and a certified copy has been filed by the Company with the Registrar of Companies, Mumbai,
Maharashtra, on September 12, 2024.
Salient features of the Scheme
1. As the Transferee Company is the ultimate holding company of the Transferor Company, there shall not be any issue of shares
as purchase consideration to the shareholders of the Transferor Companies. Further, upon the scheme becoming effective the
investments in the share capital of the Transferor company, appearing in the books of accounts of the Transferee Company, if
any, stands cancelled.
2. Upon the Scheme becoming effective, the authorised share capital of the Transferor Company shall stand combined with
the authorised share capital of the Transferee Company. Accordingly, the authorised share capital of the Company will be
I 2,183,700,000, comprising 218,370,000 equity shares of I 10 each.
3. On the Scheme becoming effective and with effect from the Appointed Date, the merger of the Transferor Company with the
Transferee Company is accounted by the Transferee Company as per the applicable accounting principles prescribed under
the Indian Accounting Standard (Ind AS) 103, ‘Business Combinations' notified under Section 133 of the Act and/ or any other
applicable Ind AS, as amended from time to time.
4. The goodwill and adjustments to plant, property and equipments and intangibles recorded in the consolidated financial
statements of the company in earlier years on account of the business combination of Strides Alathur Private Limited (formerly
Vivimed Lifesciences Private Limited) have now been recorded in these standalone financial statements of the company with
a corresponding credit to capital reserve.
38. Demerger of Soft gelatine business undertaken during the year ended 31 March, 2025
On September 25, 2023, the Board of directors of the Company approved the Scheme of Arrangement (Scheme) between Strides
Pharma Science Limited, OneSource Specialty Pharma Limited (formerly Stelis Biopharma Limited (Stelis) and Steriscience
Specialties Private Limited for demerger of CDMO and Soft Gelatin Business (demerged business) of the Company. The Company
has received the National Company Law Tribunal (NCLT) order approving the Scheme on November 14, 2024 with appointed date
of April 01, 2024. Upon filing with the Registrar of Companies “ROC”, the Scheme became effective from November 27, 2024.
Pursuant to the approval by NCLT, as of April 01, 2024 the demerger has been accounted for as per the Guidance in Appendix A of
Ind AS 10 (Distribution of Non-cash assets to the owners) and consequently the Company has restated the financial results for the
quarter ended 31 December 2024. Accordingly, all the assets and liabilities pertaining to the demerged business stood transferred
and vested into Stelis from the appointed date i.e. 1 April 2024. The demerged business was not previously classified as held-
for-sale or as a discontinued operation pending the NCLT approval. Pursuant to the approval of the Scheme by the NCLT on 14
November 2024, demerged business has been classified as discontinued operation.
In line with the accounting prescribed in the Scheme, the difference between the net assets transferred and the fair value of
consideration amounting to I 28,271 million has been credited to statement of profit and loss as Gain on disposal of assets
attributable to discontinued operations with corresponding debit of I 3,755.99 million and I 28,270.55 million to the Securities
Premium account and Retained earnings respectively. The profit from the discontinued operation of I 28,270.55 million is
attributable entirely to the owners of the Company.
The appointed date as per the Scheme is different from the effective date of the Scheme (the date on which the scheme is filed with
ROC). Accordingly, had this not been an NCLT approved Scheme, the demerged business would have continued to be part of the
Company till November 27, 2024 and the impact of the same on the comparative information in these financial statements is as
below:
• Revenue would have been higher by I 2,044 million.
• Profit after tax would have been lower by I 329 million.
• Gain on disposal would have been higher by I 27,219 million.
The details of income/(loss) referred above have been recognised during the year ended 31 March, 2025 under discontinued operations
as under:
39. Segment information
Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated
regularly by the chief operating decision maker (CODM) in deciding how to allocate resources and assessing performance. The
Group's CODM is the Managing Director.
Based on the “management approach” as defined in Ind AS 108 - Operating Segments, the Chief Operating Decision Maker (“CODM”)
evaluates the Compamy's performance based on an analysis of various performance indicators. The accounting principles used in
the preparation of these financial statements are consistently applied to record revenue and expenditure in individual segments.
Pursuant to the Scheme of demerger explained in Note 38, the CODM has started evaluating the business, including resource
allocation and performance assessment as a single segment, i.e. “Pharmaceutical”. Consequently, the Company has only one
reportable segment. Disclosures as required under Ind AS 108, are made in current and comparative period.
Pharmaceutical segment represents the business of development, manufacture and Commercialization of pharmaceutical products
other than biological drugs.”
Disclosures regarding geographical information: The geographical information of the Company's revenues and assets are shown
separately in the table below. Segment revenues has been disclosed based on geographical location of the customers. Segment
assets has been disclosed based on the geographical location of the respective assets.
43. Share-based payments
a. Details of the employee share option plan of the Company:
(a) The ESOP titled “Strides ESOP 2016“ (formerly known as Strides Shasun ESOP 2016) (ESOP 2016) was approved by the
shareholders on April 21, 2016. 3,000,000 options are covered under the Plan which are convertible into equal number of equity
shares of the Company. The vesting period of these options range over a period of three years. The options must be exercised
within a period of one year from the date of vesting. Company has granted nil options (Previous year: 25,000) under this scheme
during the current year.
44. Employee Benefits Plans
Defined contribution plan
The Company makes contributions to provident fund and employee state insurance schemes which are defined contribution plans, for qualifying
employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll cost to fund the benefits. The Company
recognised I 194.20 millions (Previous year: I 181.12 millions) for provident fund contributions, I 0.79 millions (Previous year: I 0.59 millions) for
employee state insurance scheme contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at
rates specified in the rules of the schemes.
Defined benefit plan
The Company offers gratuity benefits, a defined employee benefit scheme to its employees.
Composition of the plan assets
The fund is managed by LIC, the fund manager. The details of composition of plan assets managed by the fund manager is not available with the
Company. However, the said funds are subject to Market risk (such as interest risk, investment risk, etc.).
The said benefit plan is exposed to actuarial risks such as longevity risk and salary risk.
Significant actuarial assumptions for the determination of the defined obligation are discount rate and expected salary increase. The
sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at
the end of the reporting period, while holding all other assumptions constant.
If the discount rate increases/(decrease) by 1%, the defined benefit obligation would be I 644.95 million/(1 725.97) million as at
March 31,2026.
If the expected salary growth increases/(decrease) by 1%, the defined benefit obligation would be I 716.97 million/(1 651.87) million
as at March 31,2026.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is
unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated
using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined
benefit obligation liability recognised in the balance sheet.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years. There has been no
change in the process used by the Company to manage its risks from prior periods.
Fair value hierarchy
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or
unobservable and consist of the following three levels:
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 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
Fair value of the Company's financial assets and financial liabilities that are measured at fair value on a
recurring basis
Some of the Company's financial assets and financial liabilities are measured at fair value at the end of each reporting period.
The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in
particular, the valuation technique(s) and inputs used).
48.2 Fair value of financial assets and financial liabilities that are not measured at fair value (but fair
value disclosures are required)
The Company considers that the carrying amounts of financial assets and financial liabilities recognised in the financial statements
at amortized cost will reasonably approximate their fair values.
48.3 Financial risk management
The Company's activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company's primary focus
is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.
The primary market risk to the Company is foreign exchange risk. The Company uses derivatives financial instruments to mitigate
foreign exchange related risk exposures. All derivative activities for risk management purposes are carried out by teams that have
the appropriate skills, experience and supervision. It is the Company's policy that no trading in derivatives for speculative purposes
maybe undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:
Foreign currency risk management
The Company is exposed to foreign exchange risk due to:
• debt availed in foreign currency
• net investments in subsidiaries and joint ventures that are in foreign currencies
• exposure arising from transactions relating to purchases, revenues, expenses, etc., to be settled (within and outside the group)
in currencies other than the functional currency (i.e Indian rupees)
Exchange rate exposures are managed within approved policy parameters by utilising forward foreign exchange contracts.
48.3.1 Forward foreign exchange contracts
It is the policy of the Company to enter into forward foreign exchange contracts to cover the risk associated with anticipated sales
transactions out to 6 months within 50% to 70% of the exposure generated.
48.3.2 Foreign currency sensitivity analysis
Financial instruments affected by changes in foreign exchange rates include loans in foreign currencies and receivables/payables
from/to subsidiaries and joint ventures. The Company considers US Dollar, Australian Dollar and the Euro to be principal currencies
which require monitoring and risk mitigation. The Company is exposed to volatility in other currencies including the Great Britain
Pounds (GBP), United States Dollar (USD), Euro (EUR), Canadian Dollar (CAD), Singapore Dollar (SGD) and the Australian Dollar (AUD).
The impact on account of 5% appreciation / depreciation in the exchange rate of the above foreign currencies against Rs. is given
below:
The impact on profit has been arrived at by applying the effects of appreciation / deprecation effects of currency on the net position
(Assets in foreign currency - Liabilities in foreign currency) in the respective currencies.
For the purposes of the above table, it is assumed that the carrying value of the financial assets and liabilities as at the end of the
respective financial years remains constant thereafter. The exchange rate considered for the sensitivity analysis is the exchange rate
prevalent as at each year end.
The sensitivity analysis might not be representative of inherent foreign exchange risk due to the fact that the foreign exposure at the
end of the reporting period might not reflect the exposure during the year.
48.4 Interest rate risk management
Interest rate risk arises from borrowings. Debt issued at variable rates exposes the Company to cash flow risk. Debt issued at fixed
rate exposes the Company to fair value risk.
48.4.1 Interest rate sensitivity analysis
Financial instruments affected by interest rate changes include secured long term loans from banks and secured long term loans
from others. The impact of a 1% change in interest rates on the profit of an annual period will be I 114.81 million (March 31, 2025:
115.63 million) assuming the loans at each year end remain constant during the respective years. This computation does not involve
a revaluation of the fair value of loans as a consequence of changes in interest rates. The computation also assumes that an increase
in interest rates on floating rate liabilities will not necessarily involve an increase in interest rates on floating rate financial assets.
48.5 Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company.
Credit risk to the company primarily arises from trade receivables. Credit risk also arises from cash and cash equivalents, financial
instruments and deposits with banks and financial institutions and other financial assets.
Credit risk is controlled by analysing the credit limits and credit worthiness of customers on a continuous basis to whom credit has
been given after obtaining necessary approvals.
The Company is not significantly exposed to geographical credit risk as the counterparties operate across various countries
across the globe.
Credit risk on 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.
48.6 Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of directors, which has established an appropriate liquidity
risk management framework for the management of the Company's short-term, medium-term and long-term funding and liquidity
management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve
borrowing facilities, by continuously monitoring forecast and actual short term and long term cash flows, and by matching the maturity
profiles of financial assets and liabilities. A portion of the company's surplus cash is retained as investments in liquid mutual funds
or fixed deposits to fund short term requirements.
48.6.1 Liquidity analysis for non-derivative liabilities
The table below summarises the maturity profile of the Company's financial liabilities at the reporting date. The amounts are based
on undiscounted contractual financial liabilities.
49. Capital management
The Company manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising
the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the Company consists
of net debt (borrowings as detailed in note 20 offset by cash and bank balances) and total equity.
The Company reviews the capital structure on a quarterly basis to ensure that it is in compliance with the required covenants. As of
the date of the issue of financial results, the management of the Company have substantially met all the financial covenants. The
Company has a target gearing ratio of 1:1 determined as the proportion of net debt to total equity. The gearing ratio at March 31, 2026
is 0.33
51. Other Statutory Information
(a) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company
for holding any Benami property.
(b) The following table summarises the transactions with the companies struck off under section 248 of the Companies Act, 2013
or section 560 of Companies Act, 1956 for the year ended/ as at March 31, 2026.
(d) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(e) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that:
(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
company (Ultimate Beneficiaries) or
(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(f) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the Company shall:
(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party (Ultimate Beneficiaries) or
(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
(g) The Company has not done any such 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 or any
other relevant provisions of the Income Tax Act, 1961.
(h) The Company has complied with the number of layers prescribed under the Companies Act, 2013.
(i) 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.
(j) The Company has borrowings from banks and financial institutions on the basis of security of current assets. The quarterly
returns or statements of current assets filed by the Company with banks and financial institutions are in agreement with the
books of accounts.
(k) The Company have not been declared as wilful defaulter by any bank or financial institution or government or any
government authority.
52 . The detailed transfer pricing regulations (‘regulations') for computing the income from “domestic transactions”
with specified parties and international transactions between ‘associated enterprises' on an ‘arm's length' basis
is applicable to the Company. These regulations, inter alia, also require the maintenance of prescribed documents
and information including furnishing a report from an Accountant which is to be filed with the Income tax authorities.
The Company has undertaken necessary steps to comply with the transfer pricing regulations. The Management is of the opinion
that the transactions with associated enterprises and domestic transactions are at arm's length, and hence the aforesaid
legislation will not have any material impact on the financial statements, particularly on the amount of tax expense and that of
provision for taxation.
53. As per the Master Direction on Import of Goods and Services issued by the Reserve Bank of India (RBI) (or the FEMA Regulations),
the Company is required to make payments towards import of goods and services within timelines (of six months) as stipulated
under the respective direction. The receivables as at March 31, 2026 includes certain foreign denominated receivables I 174.09
millions which are outstanding for more than 270 days. The payables as at March 31, 2026 includes certain foreign denominated
payables I 203.34 which are outstanding for more than six months and requiring approval from AD banker for settlement of such
balances. Management has initiated discussions with the Authorised Dealer Banker and is in the process to regularise these
delays. While management is confident of getting the necessary approvals and remitting the balances without incurring any
significant amounts of fines/ penalties, pending the final outcome, no adjustment has been made to these financial statements.
54. 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 arising from changes in the regulations. Amongst other
things, the New Labour Codes prescribes a uniform definition of wages based on which certain employee benefits
such as gratuity, leave encashment, contributions to provident fund and statutory bonus are required to be computed.
On the basis of the best information available, consistent with the guidance provided by the Institute of Chartered Accountants
of India the Company has assessed that it has no material impact on its provision for employee benefits for the quarter and year
ended March 31, 2026 on account of new Labour codes.
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.”
55. During the year ended March 31, 2026, the Company did not have any long-term contracts including derivatives for which there
were any material foreseeable losses.
56. The Board of Directors have proposed a final dividend of I 5 per share which shall result in cash outflow of I 461 millions (approx).
The proposed dividend is subject to the approval of the shareholders in the Annual General Meeting.
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