22.7 Equity shares extinguished on buy-back
For the year ended on 31 March 2025
22.2 Rights attached to equity shares
The Company has only one class of equity shares with voting rights having a par value of H 2 per share. The Company declares and pays dividends in Indian Rupees. Any interim dividend paid is recognised on the approval by Board of Directors.
Board of Directors have approved buy back of its 10,28,881 equity shares, being 0.82% of the total paid up equity share capital (prior buyback) at H 2,770 per equity share for an aggregate amount of H 284.99 Crores on 02 May 2024. The Company has taken the impact of buyback in the financial year 31 March 2024 and paid in previous financial year. The equity shares bought back were extinguished on 27 June 2024.
For the year ended on 31 March 2024
Board of Directors have approved buy back of its 10,28,881 equity shares, being 0.82% of the total paid up equity share capital (prior buyback) at H 2,770 per equity share for an aggregate amount of H 284.99 Crores on 02 May 2024.
For the year ended on 31 March 2023
The Company bought back 22,10,500 equity shares for an aggregate amount not exceeding of H 315.00 Crore being 2.59% of the total paid up equity share capital (prior buyback) at H 1,425 per equity share. The equity shares bought back were extinguished on 19 April 2023.
For the year ended on 31 March 2022
The Company bought back 11,20,000 equity shares for an aggregate amount not exceeding of H 285.60 Crore being 1.29% of the total paid up equity share capital (prior buyback) at H 2,550 per equity share. The equity shares bought back were extinguished on 28 February 2022.
For the year ended on 31 March 2021
The Company bought back 7,35,000 equity shares for an aggregate amount not exceeding of H 136 Crore being 0.84% of the total paid up equity share capital (prior buyback) at H 1,850 per equity share. The equity shares bought back were extinguished on 30 December 2020.
44. Capital management:
Company's policy is to maintain a strong capital base to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return (EBIT) on capital, as well as the level of dividends to equity shareholders. The Company's objective for capital management is to maximise shareholder value, safeguard business continuity and support the growth of the Company. The Company determines the capital requirement based on annual operating plans, long-term and other strategic investment plans.
46. Employee Benefits
As required by Ind AS 19 'Employee Benefits' the disclosures are as under:
46.1 Defined contribution plans
The Company offers its employee's defined contribution plans in the form of provident fund (PF) and Employees' pension scheme (EPS) with the government, and certain state plans such as Employees' State Insurance (ESI). PF and EPS cover substantially all regular employees and the ESI covers certain employees. Contributions are made to the Government's administered funds. While both the employees and the Company pay predetermined contributions into the Provident Fund and the ESI Scheme, contributions into the Pension fund is made only by the Company. The contributions are normally based on a certain proportion of the employee's salary. The Company does not have any liability beyond depositing these amounts into the government administered fund. During the year, the Company has made the following contributions:
46.2 Defined benefit plans
Gratuity:
The Company makes annual contributions to Employees' Group Gratuity-cum Life Assurance (Cash Accumulation) Scheme of LIC, a funded defined benefit plan for qualifying employees. The Companies scheme provides for payment to vested employees as under:
On normal retirement / early retirement / withdrawal / resignation:
As per the provisions of Code of Wages, 2020 with vesting period of 5 years of service. A benefit ceiling has changed from H 0.20 Crore to no limit for all the employees of the company in earlier years.
On the death in service:
As per the provisions of Code of Wages, 2020 without any vesting period.
The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out as at 31 March 2026. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.
The Government of India has announced four Labour Code and have made them effective from 21st November, 2025. The corresponding all supporting rules under these codes are yet to be notified. The company is in the process of evaluating the full impact of these new labour codes announced. The company has estimated and accounted for incremental liability for own employees and 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.
46.3Leave Encashment
The Company's employees are entitled for compensated absences which are allowed to be accumulated and encashed as per the Company's policies. The liability of compensated absences, which is non-funded, has been provided based on report of independent actuary using “Projected Unit Credit Method".
Accordingly, H 54.41 Crore (Previous Year H 41.39 Crore) being liability as at the year-end for compensated absences as per actuarial valuation has been provided in the accounts.
47. Share-based payments
Company has established as approved in earlier year by the shareholders of the Company and Compensation committee of Board of Directors for key Employees of the Group. The options issued under the above scheme vest in a phased manner.
Valuation of stock options
The fair value of stock options granted during the period has been measured using the Black-Scholes option pricing model at the date of the grant. The Black-Scholes option pricing model includes assumptions regarding dividend yields, expected volatility, expected terms and risk free interest rates. They key inputs and assumptions used are as follows:
Share price: The closing price on NSE as on the date of grant has been considered for valuing the options granted.
Exercise Price: Exercise Price is the market price or face value or such other price as determined by the Remuneration and Compensation Committee.
Expected Volatility: The historical volatility of the stock till the date of grant has been considered to calculate the fair value of the options.
Expected Option Life: Expected Life of option is the period for which the Company expects the options to be live. The minimum life of a stock option is the minimum period before which the options cannot be exercised and the maximum life is the period after which the options cannot be exercised.
Expected dividends: Expected dividend yield has been calculated as an average of dividend yields for four years preceding the date of the grant.
Risk free interest rate: The risk-free interest rate on the date of grant considered for the calculation is the interest rate applicable for a maturity equal to the expected life of the options based on the zero-coupon yield curve for Government Securities.
These assumptions reflect management's best estimates, but these assumptions involve inherent market uncertainties based on market conditions generally outside of the Company's control. As a result, if other assumptions had been used in the current period, stock-based compensation expense could have been materially impacted. Further, if management uses different assumptions in future periods, stock-based compensation expense could be materially impacted in future years. The Company has granted stock options to employees of a subsidiary, the estimated fair value of stock options issued are included in the carrying value of the investment in the said subsidiary on a straight-line basis over the requisite service period of each separately vesting portion of the award.
Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes mutual funds that have declared buyback NAV. The mutual funds are valued using the closing NAV.
Level 2: The fair value of financial instruments that are not traded in an active market (like mutual funds, Mark to market derivatives and Non-convertible market link debenture) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value as instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
Risk management framework
Company's board of directors has overall responsibility for the establishment and oversight of the Company's risk management framework. Management is responsible for developing and monitoring the Company's risk management policies, under the guidance of Audit Committee.
Company's risk management policies are established to identify and analyse the risks faced by it, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities. Company, through its training and procedures aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
Company's Audit committee oversees how management monitors compliance with the Company's risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit committee.
i. Credit risk
Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and mutual funds, foreign exchange transactions and other financial instruments.
(a) Trade receivables
Customer credit risk is managed by each business unit subject to the Company's established policy, procedures and control relating to customer credit risk management. Trade receivables, which are non-interest bearing, are mainly from stockists, distributors and customers and are generally on 14 days to 270 days credit term excluding wholly owned subsidiaries. Outstanding customer receivables are regularly monitored. The Company has no concentration of credit risk as the customer base is widely distributed both economically and geographically.
As at 31 March 2026, Company had 37 customers (31 March 2025, 34 customers), excluding wholly owned subsidiaries that owed the company more than H 0.50 crore each and accounted for approximately 35% and 27% respectively of the total outstanding as at 31 March 2026 and 31 March 2025.
Expected credit loss assessment
As per simplified approach, the Company makes provision of expected credit losses on trade receivable using a provision matrix to mitigate the risk of default payment and make appropriate provision at each reporting date wherever required. The trend of the bad debts is negligible.
There are no unbilled receivables, hence the same is not disclosed in the ageing schedule.
There are no other trade receivables which have significant increase in credit risk.
The loss allowance on trade receivable has been computed on the basis of Ind AS 109, Financial Instruments which require such allowance to be made even for trade receivable considered good on the basis that credit risk exists even though it may be very low.
(b) Financial instruments
Company limits its exposure to credit risk by investing in liquid securities issued by mutual funds having a credit ranking of at least 3 and above from CRISIL or equivalent rating agency. Company monitors changes in credit risk by tracking published external credit ranking. Based on its on-going assessment of counterparty risk, the Company adjusts its exposure to various counterparties.
ii. Liquidity risk
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company's objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including bilateral loans, debt, and overdraft from banks at an optimised cost. Working capital requirements are adequately addressed by internally generated funds. Trade receivables are kept within manageable levels.
Company aims to maintain the level of its cash and cash equivalents and other highly marketable debt investments at an amount in excess of expected cash outflows on financial liabilities over the next six months. The ratio of cash and cash equivalents and other highly marketable debt investments to outflows is 0.73 at 31 March 2026 (0.69 at 31 March 2025).
iii. Market risk
Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the company's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. Financial instruments affected by market risk include loans and borrowings, deposits, investments, and derivative financial instruments.
The Company's activities expose it to a variety of financial risks, including the effects of changes in foreign currency exchange rates and interest rates. The Company uses derivative financial instruments such as foreign exchange contracts to manage its exposures to foreign exchange fluctuations. All such transactions are carried out within the guidelines set by the risk management committee.
Sensitivity Analysis on Interest rate
The Company's fixed rate bank deposits and securities are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flow will fluctuate because of a change in market interest rates.
Sensitivity Analysis on Equity prices
The Company has invested its surplus funds primarily in debt based mutual funds. The value of investment in these mutual fund schemes is reflected though Net Asset Value (NAV) declared by the Asset Management Company on daily basis. The Company has not performed a sensitivity analysis on these mutual funds based on estimated fluctuations in their NAV as in management's opinion, such analysis would not display a correct picture.
iv. Currency risk
Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchases and borrowings are denominated and the functional currency of Company. The currencies in which these transactions are primarily denominated are US dollars, Australian dollars, Great Britain Pound and Euro.
At any point in time, Company covers foreign currency risk by taking appropriate percentage of its foreign currency exposure, as approved by risk management committee in line with the laid down policy approved by the Board. Company uses forward exchange contracts to mitigate its currency risk, most with a maturity of less than one year from the reporting date. In respect of other monetary assets and liabilities denominated in foreign currencies, the Company's policy is to ensure that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.
50. Disaggregation of revenue
The operations of the Company are limited to only one segment viz. pharmaceuticals and related products. Revenue from contract with customers is from sale of manufactured goods and traded goods. Sale of goods are made at a point in time and revenue is recognised upon satisfaction of the performance obligations which is typically upon dispatch / delivery. The Company has a credit evaluation policy based on which the credit limits for the trade receivables are established. There is no significant financing component as the credit period provided by the Company is not significant.
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52. Contingent Liabilities and commitments Contingent Liabilities
H in Crore
|
|
Particulars
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As at 31 March 2026
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As at 31 March 2025
|
|
Claims against the Company not acknowledged as debt
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|
|
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i. Liabilities disputed - appeals filed/to be filed with respect to:
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|
|
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a. Excise duty, Service Tax, VAT and GST
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4.28
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4.28
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b. Income tax on account of additions
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3.23
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3.23
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ii. Other matter
|
0.61
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0.61
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The Company has two ongoing patent litigations as on 31 March 2026. No liability is expected to arise from these litigations.
The Company does not expect the outcome of the matters stated above to have a material adverse impact on the Company's financial condition, results of operations or cash flows.
Future cash outflows in respect of liability under clauses (i) to (ii) is dependent on decisions by relevant authorities of respective disputes.
Income Tax Search
In August 2025, the Income Tax Authorities carried out search operations at certain premises of the Company. Subsequently, the Company received a notice dated 6 February 2026 under Section 158BC of the Income tax Act, 1961, requiring the Company to file a true and correct return of undisclosed income for the block period from 1 April 2019 to 17 November 2025.
The Company filed the return for the said block period on 6 April 2026, with no undisclosed income reported. Pending any subsequent communication from the concerned authorities in this regard, the consequent impact on the standalone financial statements for the year ended 31 March 2026, if any, is currently not ascertainable.
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Commitments
H in Crore
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|
S
Particulars
No.
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As at 31 March 2026
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As at 31 March 2025
|
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1. Estimated amounts of contracts remaining to be executed on capital account and not provided for, net of advances
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296.09
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133.29
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2. Pending Exports obligation under Advance License / EPCG Scheme
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7.45
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2.87
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3. Unpaid allotment money in respect of
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|
|
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Share of Ajanta Pharma Ireland Limited, wholly owned subsidiary, equivalent to EUR 50,000 (Previous Year EUR Nil).
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0.54
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-
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Based on the internal and external transfer pricing review and validation, the Company believes that all transactions with associated enterprises are undertaken on the basis of arm's length principle. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. Details related to ESOP given to Employees of Subsidiary are provided in note 47
54. Contribution towards Corporate Social Responsibility ("CSR"):
As per section 135 of the Act, a CSR committee has been formed by the Company. The funds are utilised during the year on the activities which are specified in schedule VII of the Act. The utilisation is done by way of direct and indirect contribution towards various activities.
60. Utilisation of borrowed funds and share premium
A. 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 the Intermediary shall:
(a) 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
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
B. 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:
(a) 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
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
61. Impairment of Investment in Subsidiary
The Company in prior years has made full provision for investment in aggregate value of unquoted investment in Ajanta Pharma Nigeria Limited and the carrying value of investment is considered as Nil.
62. Assets classified as held for sale
The Company had previously classified one of its freehold land assets as “Assets Held for Sale" at a carrying amount of H 8.85 Crore pursuant to a proposed sale transaction. However, as the transaction was not concluded and no new binding agreement has been executed, the criteria for such classification are no longer met. Accordingly, during the year ended March 31, 2026, the Company has reclassified the said asset from “Assets Held for Sale" to “Property, Plant and Equipment" at its carrying amount of H 8.85 Crore.
The charge relating to temporary differences during the year ended 31 March 2026 are primarily on account of property plant and equipment and gain on investment at FVTPL partially offset by provision for return of expired goods, provision for loss allowance, compensated absences. The credit to temporary differences during the year ended 31 March 2025 are primarily on account of property plant and equipment and gain on investment at FVTPL partially offset by provision for return of expired goods, provision for loss allowance, compensated absences. Current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same authority.
64. Additional regulatory information pursuant to the requirement in Division II of Schedule III to the Companies Act 2013
A. Relationship with struck off company
There is no such transaction with the companies struck off under Companies Act, 2013.
B. Undisclosed income
There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.
C. Utilisation of borrowings availed from banks
The borrowings obtained by the company from banks have been applied for the purposes for which such loans were taken.
D. Details of benami property held
No proceedings have been initiated on or are pending against the company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
E. The back-up for all the books of account maintained, is taken on a daily basis as per the requirements of Section 128 of the Companies Act, 2013 read with Rule 3 of the Companies (Accounts) Rules, 2014, as amended from time to time. During the period from 15 August 2025 to 17 August 2025, no transactions were recorded in the Company as the server was being shifted from the Kandivali office to the Andheri office. Consequently, daily back-ups were not taken during this period.
F. Wilful defaulter
The company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
G. Compliance with number of layers of companies
The company has complied with the number of layers prescribed under the Companies Act, 2013.
H. Compliance with approved scheme(s) of arrangements
The company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.
I. Details of crypto currency or virtual currency
The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.
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