m) Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized if, as a result of a past event, the
Company has a present legal or constructive obligation that
can be estimated reliably, and it is probable that an outflow
of economic benefits will be required to settle the obligation.
Provisions are determined by discounting the expected future
cash flows (representing the best estimate of the expenditure
required to settle the present obligation at the balance sheet
date) at a pre-tax rate that reflects current market assessments
of the time value of money and the risks specific to the liability.
The unwinding of the discount is recognized as finance cost.
Expected future operating losses are not provided for.
A contract is considered onerous when the expected economic
benefits to be derived by the Company from the contract are lower
than the unavoidable cost of meeting its obligations under the
contract. The provision for an onerous contract is measured at the
present value of the lower of the expected cost of terminating the
contract and the expected net cost of continuing with the contract.
Before such a provision is made, the Company recognizes any
impairment loss on the assets associated with that contract.
Contingent liabilities and contingent assets are not recognized
in the financial statements. Contingent liabilities are disclosed in
the financial statements unless the possibility of any outflow in
settlement is remote. Contingent assets are disclosed in the financial
statements where an inflow of economic benefit is probable.
n) Revenue Recognition
Revenue from contracts with customers is recognized when
control of the goods or services are transferred to the customer at
an amount that refects the consideration to which the Company
expects to be entitled in exchange for those goods or services.
Revenue is recognized only to the extent that it is highly probable
a significant reversal will not occur.
i) Sale of Goods
Revenue from the sale of goods is recognized when delivery has
taken place, control of the goods has been transferred to the
customer, and there are no longer any unfulfilled obligations.
The customer obtains control of the goods when the significant
risks and reward of products sold are transferred according to
the specific delivery terms agreed upon with the customer.
Revenue towards satisfaction of a performance obligation
is measured at the transaction price (net of variable
consideration) allocated to that performance obligation,
received or receivable, after deduction of any discounts, price
concessions, volume rebates and any taxes or duties collected
on behalf of the government such as goods and services tax,
etc. Accumulated experience is used to estimate the provision
for such discounts, price concessions and rebates.
In determining the transaction price, the Company considers
the effects of variable consideration, the existence of
significant financing components, noncash consideration, and
consideration payable to the customer (if any). The Company
estimates variable consideration at contract inception until
it is highly probable that a significant revenue reversal in the
amount of cumulative revenue recognised will not occur when
the associated uncertainty with the variable consideration is
subsequently resolved.
ii) Service Income
Revenue from services rendered is recognized in the statement
of profit or loss as the underlying services are performed. upfront
payments received under these arrangements are recognized
as revenue upon satisfaction of performance obligations.
iii) Interest and Dividend Income
Interest income from a financial asset is recognized when it is
probable that the economic benefits will flow to the Company
and the amount of income can be measured reliably. Interest
income is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable,
which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to that
asset's net carrying amount on initial recognition.
Dividend income is recognized when right to receive is
established (provided that it is probable that the economic
benefits will flow to the Company and the amount of income
can be measured reliably).
o) Export Incentive
Export incentives comprise of Duty draw back and RoDTEP
(Remission of duties or Taxes on export Products Scheme) scrips.
duty drawback and RoDTEP is recognised as income when the
right to receive credit as per the terms of the scheme is established
in respect of the exports entitled for this benefit made and where
there is no significant uncertainty regarding the ultimate collection
of the relevant export proceeds. RoDTEP scrips are freely
transferable and can be utilised for the payment of customs duty.
p) Employee Benefits
i) Short term employee benefits
Short term employee benefits that are expected to be settled
wholly within 12 months after the end of the period in which
the employees render the related service are recognized as an
expense at the undiscounted amount in the statement of profit
and loss of the year in which the related service is rendered.
Accumulated compensated absences, which are expected
to be availed or encashed within 12 months from the end
of the year are treated as short-term employee benefits. The
obligation towards the same is measured at the expected cost
of accumulating compensated absences as the additional
amount expected to be paid is as a result of the unused
entitlement as at the year end.
ii) Post-Employment Benefits:
? Defined contribution plans
Employee benefits in the form of contribution to Provident
Fund managed by Government Authorities, Employees
State Insurance Corporation and Labour Welfare Fund are
considered as defined contribution plans and the same
are charged to the statement of profit and loss for the year
in which the employee renders the related service.
? Defined benefit plans
A defined benefit plan is a post-employment benefit plan
other than a defined contribution plan.
? Gratuity
The Company's gratuity benefit scheme is a defined benefit
plan. The Company's net obligation in respect of defined
benefit plan is calculated by estimating the amount of future
benefit that employees have earned in the current and prior
periods, discountingthat amount and deductingthe fair value
of any plan assets. Obligation under the gratuity scheme is
covered under a Scheme of Life Insurance Corporation of
India (LIC) and contributions in respect of such scheme are
recognized in the statement of profit or loss.
The calculation of defined benefit obligation is performed
annually by a qualified actuary using the projected unit
credit method.
Remeasurement of the net defined benefit liability, which
comprise actuarial gains and losses, the return on plan
assets (excluding interest) and the effect of the asset
ceiling (if any, excluding interest), are recognized in
oCI. The Company determines the net interest expense
(income) on the net defined benefit liability (asset) for
the period by applying the discount rate used to measure
the defined benefit obligation at the beginning of the
annual period to the then-net defined benefit liability
(asset), taking into account any changes in the net defined
benefit liability (asset) during the period as a result of
contributions and benefit payments. Net interest expense
and other expenses related to defined benefit plans are
recognized in the statement of profit or loss.
When the benefits of a plan are changed or when a plan
is curtailed, the resulting change in benefit that relates to
past service or the gain or loss on curtailment is recognized
immediately in Statement of Profit and Loss. The Company
recognizes gains and losses on the settlement of a defined
benefit plan when the settlement occurs.
? Compensated absences:
Accumulated compensated absences, which are expected
to be availed or encashed beyond 12 months from the
end of the year are treated as other long term employee
benefits. The Company's liability is actuarially determined
(using the Projected unit Credit method) at the end of
each year. Actuarial losses/gains are recognized in the
statement of profit and loss in the year in which they arise.
q) Share based Payments
The Company operates employee Stock option Plans (ESoP's) for
its employees and for the employees of its Subsidiaries.
ESoP's: The grant date fair value of options, using Black Scholes
model granted to the Company's employees is recognized as an
employee expense and those granted to the Subsidiary Company
employees are recognized under “Investment made in Subsidiary”
for the value of shares of Grant after reducing the Exercise price,
with a corresponding increase in equity, over the period that the
employees become unconditionally entitled to the options. The
expense is recorded for each separately vesting portion of the
award as if the award was, in substance, multiple awards. The
increase in equity recognized in connection with share based
payment transaction is presented as a separate component in
equity under “Employee Stock options outstanding Reserve”. The
amount recognized as an expense/Investment made in Subsidiary,
is adjusted to reflect the actual number of stock options that vest.
The cumulative expense recognized for equity-settled transactions
at each reporting date until the vesting date reflects the extent to
which the vesting period has expired and Company's best estimate
of the number of equity instruments that will ultimately vest. In case
of forfeiture/lapse of stock option, which is not vested/not exercised,
the amortized portion is reversed by credit to employee compensation
expense/Investment made in Subsidiary, as appropriate.
r) Taxation
Tax expense comprises current income tax and deferred income
tax and includes any adjustments related to past periods in current
and/or deferred tax adjustments that may become necessary due
to certain developments or reviews during the relevant period.
i) Current Tax
Current income tax is measured at the amount expected to
be recovered from or paid to the taxation authorities. The tax
rates and tax laws used to compute the amount are those that
are enacted or substantively enacted, at the reporting date.
Current tax assets and current tax liabilities are offset when
there is a legally enforceable right to set off the recognized
amounts and there is an intention to settle the asset and the
liability on a net basis.
ii) Deferred Tax
Deferred income tax is recognized using the balance sheet
approach. Deferred income tax assets and liabilities are
recognized for deductible and taxable temporary differences
arising between the tax base of assets and liabilities and their
carrying amount.
Deferred income tax liabilities are recognized for all taxable
temporary differences. Deferred income tax assets are
recognized to the extent that it is probable that taxable profit
will be available against which the deductible temporary
differences and the carry forward of unused tax credits and
unused tax losses can be utilized.
The carrying amount of deferred income tax assets is reviewed
at each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to
allow all or part of the deferred income tax asset to be utilized.
Deferred tax is measured at the tax rates that are expected to
apply to the period when the asset is realized or the liability
is settled, based on the laws that have been enacted or
substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a
legally enforceable right to offset current tax liabilities and
assets, and they relate to income taxes levied by the same
tax authority on the same taxable entity, or on different tax
entities, but they intend to settle current tax liabilities and
assets on a net basis or their tax assets and liabilities will be
released simultaneously.
s) Earnings Per Share
Basic earnings per share are calculated by dividing the net profit
or loss for the period attributable to equity shareholders by the
weighted average number of equity shares outstanding during the
period.
Diluted earnings per share are computed by dividing the profit after
tax as adjusted for dividend, interest and other charges to expense
or income (net of any attributable taxes) relating to the dilutive
potential equity shares, by the weighted average number of equity
shares considered for deriving basic earnings per share and the
weighted average number of equity shares which could have been
issued on conversion of all dilutive potential equity shares.
t) Operating Segments
Operating segments are reported in the manner consistent with the
internal reporting to the chief operating decision maker (CODM).
An operating segment is a component of the Company that
engages in business activities from which it may earn revenues
and incur expenses, including revenues and expenses that relate
to transactions with any of the Company's other components, and
for which discrete financial information is available. All operating
segments' operating results are reviewed regularly by the
Company's board of directors to make decisions about resources
to be allocated to the segments and assess their performance.
The Company is engaged in the sole activity of carrying on the
business of “Pharmaceutical Formulations” and therefore, has
only one reportable segment in accordance with Ind AS 108
“Operating Segments”. Hence no separate segment reporting is
applicable to the company.
u) Dividends to Shareholders
The Company recognises Final dividend to the shareholders as a
liability in the period in which the dividends are approved by the
shareholders. Any Interim Dividend paid is recognised based on
the approval by the Board of Directors.
v) Recent Accounting 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.
Ind AS 21 - The Effects of Changes in Foreign Exchange Rates:
In May 2025, MCA notified amendments to Ind AS 21 - The Effects of
Changes in Foreign Exchange Rates, applicable w.e.f. April 1, 2025.
The amendment specifies the exchange rate to use in reporting
foreign currency transactions when exchangeability between two
currencies is temporarily lacking. The Group has reviewed the
amendment and based on its evaluation has determined that it does
not have any significant impact in its financial statements.
In August 2025, MCA notified the following amendments to:
1) Ind AS 1, Presentation of Financial Statements, applicable
w.e.f. April 1, 2025 - The amendment relates to classification
of liabilities as current or non-current and non-current liabilities
with covenants. In the context of classifying a liability as current,
it removes the requirement of existence of a right to defer
settlement for at least 12 months after the reporting date and
instead requires that the said right should exist on the reporting
date and have substance.
The amendment also introduces guidance on classification
of liabilities with covenants. The Group has no impact of these
amendments in its classification criteria of current and noncurrent
liabilities.
2) Ind AS 7, Statement of Cash Flows and Ind AS 107, Financial
Instruments: Disclosures, applicable w.e.f. April 1, 2025 - The
amendment in Ind AS 7 requires to inform users of financial
statements of the existence of supplier finance arrangements
and explain the nature of the arrangements, the carrying amount
of liabilities and the range of payment due dates. Ind AS 107
has been amended to add supplier finance arrangements as a
factor that may cause concentration of liquidity risk. The Group
has reviewed the amendment and based on its evaluation has
determined that it does not have any significant impact in its
financial statements.
3) Ind AS 12, International Tax Reform - Piller Two Model Rules
The amendments provide a temporary mandatory relief from
deferred tax accounting for top-up tax and disclose that they
have applied the relief. This relief is immediate and applies
retrospectively. The Group has reviewed the amendment and
based on its evaluation has determined that it does not have any
significant impact in its financial statements.
(i) The title deeds of immovable properties included in Property, Plant & Equipment are held in the name of the Company, except for a land and building
for ' 17.38 Crores purchased by the Company during the financial year 2020-21 through e-auction from Punjab National Bank under the SARFAESI Act,
2002 and rules thereof, for which the transfer of title is in progress.
(ii) In respect of immovable properties taken on lease and disclosed as property, plant and equipment in the financial statements, the lease agreements
are in the name of the Company.
(iii) Gross Block for 31st March 2026 includes ' 8.26 Crores (PY: ' 7.24 Crores) of government grant in the nature of waiver of duty on purchase of plant
and machinery & lab equipment. Accumulated Depreciation for Plant & Machinery as at 31st March 2026 includes ' 5.41 Crores (PY: ' 4.77 Crores)
on such government grant.
(i) The title deeds of immovable properties included in Property, Plant & Equipment are held in the name of the Company, except for a land and
building for ' 17.38 Crores purchased by the Company during the financial year 2020-21 through e-auction from Punjab National Bank under the
SARFAESI Act, 2002 and rules thereof, for which the transfer of title is in progress.
(ii) In respect of immovable properties taken on lease and disclosed as property, plant and equipment in the financial statements, the lease agreements
are in the name of the Company.
(iii) Gross Block for 31st March 2025 includes ' 7.24 Crores (PY: ' 6.76 Crores) of government grant in the nature of waiver of duty on purchase of plant
and machinery & lab equipment. Accumulated Depreciation for Plant & Machinery as at 31st March 2025 includes ' 4.77 Crores (PY: ' 4.06 Crores)
on such government grant.
Terms of Borrowings
(i) Unsecured loan to related party consists of loan to subsidiary company amounting to ' 267.54 Crores (March 31, 2025: ' 245.80 Crores)
towards capex projects.
(ii) Interest rate for the loan is currently 11.00 % p.a. (PY : 10.75% p.a.) (SBI's one year MCLR 2% Risk premium), payable with monthly rests, from
the date of first disbursement.
(iii) The principal is repayable over a period of 5 years after completion of the moratorium period.
b) Rights, preference & restrictions attached to shares
Equity Shares
The Company has only one class of equity shares having a par value of ' 2/- per share. Each holder of equity share is entitled to one vote
per share.
The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except
in case of interim dividend.
In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company, after distribution of all
preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
Nature of Reserve
a) Capital Reserve
The Capital Reserve has been created on restructuring of the capital of the Company under a scheme of amalgamation.
b) Securities Premium
Securities premium account has been created on issue of shares under employee stock option scheme.
c) General Reserve
The General reserve is created by time to time transfer of profits from retained earnings for appropriation purposes. As the General reserve is
created by transfer from one component of equity to another and is not an item of other comprehensive income, items included in the General
reserve will not be reclassified subsequently to the statement of profit and loss.
NOTE 37: BALANCES WITH SCHEDULED BANKS IN DEPOSIT ACCOUNTS INCLUDES:
Bank deposit accounts under Note no: 11 for the current year include ' 0.37 Crores (as at 31.03.2025'0.24 Crores) earmarked as lien towards margin
for letter of credit and bank guarantee.
NOTE 38: EMPLOYEE BENEFITS(i) Defined Contribution Plan:
Contributions to defined contribution scheme as employees' state insurance, labour welfare fund, etc are charged as expense based on the amount
of contribution required to be made as and when services are rendered by the employees. Company's provident fund contributions is made to a
government administered fund and charged as expense to the statement of profit and loss. The contributions payable to these plans are at the
rates specified in the rules of the schemes.
The company recognized ' 2.49 crores (previous year ' 2.51 crores ) towards provident and pension fund contributions, ' 0.17 crores (previous year
' 0.20 Crores) towards ESI in the statement of profit and loss. [refer note-29 & 32 (i)]
(ii) Defined Benefit Plan:a. Gratuity
The company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides a lump sum
payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days
salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The company makes contributions to Life
Insurance Corporation of India (LIC). The company accounts for the liability for gratuity benefits payable in the future based on actuarial valuation.
b. Compensated Absences
The expected cost of accumulating compensated absences is determined by actuarial valuation performed by an independent actuary at
each Balance Sheet date using projected unit credit method on the additional amount expected to be paid/availed as a result of the unused
entitlement that has accumulated at the balance sheet date.
The Company is exposed to various risks in providing the above gratuity benefit which are as follows:
Interest Rate risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the
ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in financial statements).
Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.
Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants
in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the
present value of obligation will have a bearing on the plan's liability.
Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to
the risk of actual experience turning out to be worse compared to the assumption.
Longevity risk: The present value of the defined benefit obligation is calculated by reference to the best estimate of the mortality of plan
participants during their employment. An increase in the life expectancy of the plan participants will increase the plan's liability.
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 of assumptions used in preparing the sensitivity analysis from prior years.
(iii) Employee Stock Option Scheme
Valuation of Stock Options
The fair value of services received in return for stock options granted to employees is measured by reference to the fair value of stock options
granted. The fair value of stock options granted under the Caplin Point Employee Stock option Plan 2015, 2017 & 2021 has been measured using
the Black-Scholes-Merton model at the date of the grant.
The Black-Scholes-Merton model includes assumptions regarding expected volatility, expected terms and risk free interest rates. In respect of par
value options granted, the expected term of an option (or “option life”) is estimated based on the vesting term and contractual term, as well as the
expected exercise behavior of the employees receiving the option.
In respect of fair market value options granted, the option life is estimated based on the simplified method. Expected volatility of the option is based
on historical volatility, during a period equivalent to the option life, of the observed market prices of the Company's publicly traded equity shares.
Risk-free interest rates are based on the government securities yield in effect at the time of the grant. 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 estimated fair value of stock options is recognized in the standalone income statement on a straight-line basis over the requisite service
period for each separately vesting portion of the award as if the award was, in substance, multiple awards.
NOTE 41: AMOUNT DUE TO INVESTOR EDUCATION AND PROTECTION FUND
The due amount of ' 0.36 Crores (PY : ' 0.45 Crores) were transferred to investor education and protection fund and there is no outstanding due amount
to be transferred to investor education and protection fund.
NOTE 43: FINANCIAL INSTRUMENTSFINANCIAL INSTRUMENTS - FAIR VALUE AND RISK MANAGEMENTA. Accounting classification and fair values:
Carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy, are presented below.
It does not include the fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a
reasonable approximation of fair value.
Fair value hierarchy
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).
(i) The Company estimates that the fair value of these investments are not materially different as compared to its cost
B. Measurement of fair values:
Valuation techniques and significant unobservable inputs:
The following tables show the valuation techniques used in measuring Level 2 and Level 3 fair values, for financial instruments measured at fair
value in the statement of financial position, as well as the significant unobservable inputs used:
C. Financial risk management:
The Company has exposure to the following risks arising from financial instruments:
- Credit risk;
- Liquidity risk; and
- Market risk
The Company's board of directors have overall responsibility for the establishment and oversight of the Company's risk management framework. The
board of directors have established the risk management framework. The Company's risk management policies are established to set appropriate
risk limits and to monitor risks and adherence to limits. Risk management policies and systems are reviewed periodically to reflect changes in
market condition and the Company's activities. The Company through its training, standards and procedures, aims to maintain a disciplined and
constructive control environment in which all employees understand their roles and obligations.
The 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 adhoc 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 of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Company's receivables from customers and investment securities. Credit risk is managed through
credit approvals, establishing credit limits and continuously monitoring the credit worthiness of the customers to which the Company grants
credit terms in the normal course of business.
Expected credit loss assessment
The Company allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of loss (e.g
timeliness of payments, available information, etc) and applying experienced credit judgement.
Exposures to the customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected
credit losses, if any. Historical trends of impairment of trade receivables reflects no credit losses. Given that the macroeconomic indicators
affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of “no credit loss”
to continue.
No allowance for impairment in respect of trade and other receivables was provided during the year and immediate preceding year.
Cash and cash equivalents
As at the year end, the Company held cash and cash equivalents of ' 44.09 Crores (31.03.2025'99.64 Crores). The cash and cash equivalents
are held with banks with good credit rating.
Other Bank balances
As at the year end, the Company held other Bank balance of ' 161.99 Crores (31.03.2025'115.07 Crores). The balances are held with banks
with good credit rating.
Investment in mutual funds, Corporate Bond, Debentures, Commercial Paper and Term Deposits (Intercorporate & Banks).
As at the year end, the Company held Investment in Mutual Fund ' 89.73 Crores (31.03.2025 '96.45 Crores), Corporate Bonds of ' 2.00 Crores
(31.03.2025'2.00 Crores) and Debentures ' 611.96 crores (31.03.2025'380.87 Crores). The Company limits its exposure to credit risk by
generally investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from
non - performance by these counter-parties.
As at the year end, the Company held Inter Corporate Deposits/Bank Deposits of ' 100 Crores (31.03.2025'105 Crores) under Investments.
ii. Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations with its financial liabilities that are settled by
delivering cash or another financial asset. The Company's approach to managing liquidity is to ensure that it will have sufficient liquidity to meet
its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the
Company's reputation.
The company was sanctioned working capital limits to the extent of ' 52.10 crores by various Banks. The Company invests its surplus funds in bank
fixed deposit and liquid and liquid plus schemes of mutual funds which carry no/low mark to market risks. The Company monitors funding options
available in the debt and capital markets with a view to maintain financial flexibility.
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. Market risk is attributable to all market risk sensitive financial instruments including
foreign currency receivable and payable. We are exposed to market risk primarily related to foreign exchange rate risk as the Company's product
is exported to various countries and a certain portion of its export is sourced through import. Thus our exposure to market risk is a function of
revenue generating and operating activities in foreign currency. The objective of market risk management is to avoid excessive exposure in our
foreign currency revenues and costs. The Company does not use any derivative to manage market risk since certain degree of a natural hedge
available in the form of foreign currency realised from exports are paid against imports.
Currency risk
The Company is exposed to currency risk on account of its export and import of pharmaceuticals and import of raw material, capital goods,etc .
The functional currency of the Company is Indian Rupee, where as majority of its export and imports are settled through uSD($).
Sensitivity analysis
A reasonable strengthening (weakening) of the Indian Rupee against US dollars as at March 31 would have affected the measurement of
financial instruments denominated in uS dollars and affected equity and profit or loss by the amount shown below. This analysis assumes that
all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.
1% appreciation/depreciation of the respective foreign currencies with respect to functional currency of the Company would result in increase/
decrease in the profit before taxes by approximately ' 2.69 Crores for the year ended March 31, 2026 (' 1.78 Crores for the year ended March
31, 2025)
Interest rate risk
Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes
in fair values of fixed interest bearing financial assets or borrowings because of fluctuations in the interest rates, if such assets/borrowings
are measured at fair value through profit or loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing
borrowings will fluctuate because of fluctuations in the interest rates.
Exposure to interest rate risk
As on 31 March 2026 and 31 March 2025, the Company has not availed any long term borrowings. Further, the Company has not availed any
fund based working capital lines.
Fair value sensitivity analysis for fixed rate instruments
The Company does not account for any fixed-rate borrowings at fair value through profit or loss. Therefore, change in interest rates at the
reporting date would not affect profit or loss.
Commodity rate risk
The Company's operating activity involve purchase of Active Pharmaceutical Ingredients (API) and other direct materials, whose prices are
exposed to the risk of fluctuation over short period of time. The commodity price risk exposure is evaluated and managed through procurement
and other related operating policies. As on March 31, 2026 and March 31, 2025, the Company had not entered into any material derivative
contracts to hedge exposure to fluctuations in commodity prices.
The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the
business. Management monitors the return on the capital as well as the level of dividends to ordinary shareholders.
As on date the Company has no borrowings.
NOTE 46: SEGMENT REPORTING
The company is engaged in manufacture of pharmaceuticals formulations which is the only business segment determined in accordance with the IndAS
108, “Operating segment”. Hence there are no reportable business segments to be disclosed as required by the said standard.
(i) The Company did not have any transactions with companies struck off under Section 248 of the Companies Act, 2013 during the financial year.
(ii) The Company does not have any benami property held in its name. 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.
(iii) The Company does not have any borrowings from banks or financial institutions against security of its current assets.
(iv) The Company has not been declared wilful defaulter by any bank or financial institution or other lender or government or any government authority.
(v) The Company has complied with the requirement with respect to number of layers as prescribed under section 2(87) of the Companies Act, 2013
read with the Companies (restriction on number of layers) rules, 2017.
(vi) No Scheme of Arrangements has been approved by the competent Authority in terms of sections 230 to 237 of the Companies Act 2013,during the year.
(vii) utilisation of borrowed funds and share premium
I 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.
II 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.
(viii) 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 (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.
(ix) The Company has not traded or invested in crypto currency or virtual currency during the year.
(x) The Company does not have any charges or satisfaction of charges which is yet to be registered with registrar of Companies beyond the statutory period.
NOTE 50: DISCLOSURE AS PER REGULATION 34(3) OF THE SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015
The Company has given Project Loan to Caplin Steriles Ltd (Subsidiary Company) amounting to ' 267.54 Crs as at 31st March 2026 (' 245.80 Crs as
at 31st March 2025) (The maximum amount of loan outstanding during the year is ' 267.54 Crs) for its Capex purposes. The terms of such transaction
have been recorded in writing.
Pursuant to the Notification of the New Labour Codes effective 21st November, 2025 by the Government of India whereby multiple existing labour
legislations have been consolidated into a unified framework, the Company has assessed the implications of the revised definition of ‘wages' for
employees. The assessment has resulted in an increase of employee benefit obligations relating to gratuity and compensated absences aggregating
to ' 0.84 Crores. The impact has been recognised in the financial statements. The company continues to monitor developments pertaining to the new
Labour Codes, and the impact thereof, if any, will be accounted for in accordance with the applicable accounting standards.
NOTE 52: Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year's classification/disclosure.
The accompanying notes are an integral part of the standalone financial statements.
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