i. Provisions (other than for employee benefits)
A provision is recognised if, as a result of a past event, the
Company has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an
outflow of economic benefits will be required to settle the
obligation. Provisions are determined by discounting the
expected future cash flows (representing the best estimate
of the expenditure required to settle the present obligation
at the balance sheet date) at a pre-tax rate that reflects
current market assessments of the time value of money
and the risks specific to the liability. The unwinding of the
discount is recognised as finance cost. Expected future
operating losses are not provided for.
Contingent liabilities and contingent assets
A disclosure for a contingent liability is made when there is
a possible obligation or a present obligation that may, but
probably will not, require an outflow of resources. Where
there is a possible obligation or a present obligation in
respect of which the likelihood of outflow of resources is
remote, no provision or disclosure is made.
Contingent assets are not recognised in the standalone
financial statements. A contingent asset is disclosed where
an inflow of economic benefits is probable. Contingent
assets are assessed continually and, if it is virtually certain
that an inflow of economic benefits will arise, the asset
and related income are recognised in the period in which
the change occurs.
Onerous contracts
A contract is considered to be onerous when the expected
economic benefits to be derived by the Company from
the contract are lower than the unavoidable cost of
meeting its obligations under the contract. The provision
for an onerous contract is measured at the present value
of the lower of the expected cost of terminating the
contract and the expected net cost of continuing with the
contract. Before such a provision is made, the Company
recognises any impairment loss on the assets associated
with that contract.
j. Earnings per share (‘EPS’)
The earnings considered in ascertaining the Company’s
Earnings Per Share (EPS) comprise net profit after tax.
The number of shares used in computing basic EPS is the
weighted average number of shares outstanding during
the year. Dilutive potential equity shares are deemed to be
converted as of the beginning of the year, unless they have
been issued at a later date. The number of shares used for
computing the diluted EPS is the weighted average number
of shares outstanding during the year after considering the
dilutive potential equity shares.
k. Segment Reporting
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. Operating segments
are reported in a manner consistent with the internal
reporting provided to the chief operating decision maker.
The Chairperson and Managing Director of the Company
is responsible for allocating resources and assessing
performance of the operating segments and accordingly is
identified as the Chief Operating Decision Maker (CODM).
All operating segments’ operating results are reviewed
regularly by the CODM to make decisions about resources to
be allocated to the segments and assess their performance.
The Company operates in one reportable business
segment i.e. “Pharmaceuticals”.
l. Revenue
i. Sale of goods
Revenue from sale of goods is recognised when
a promise in a customer contract (performance
obligation) has been satisfied by transferring control
over the promised goods to the customer. Control is
usually transferred upon shipment, delivery to, upon
receipt of goods by the customer, in accordance
with the delivery and acceptance terms agreed
with the customers. The amount of revenue to be
recognised is based on the consideration expected
to be received in exchange for goods, excluding
applicable discounts, sales returns and any taxes or
duties collected on behalf of the government which
are levied on sales such as GST where applicable.
Any additional amounts based on terms of agreement
entered into with customers, is recognised in the
period when the collectability becomes probable and
a reliable measure of the same is available.
ii. Sales return allowances
The Company accounts for sales return by recording
an allowance for sales return concurrent with the
recognition of revenue at the time of a product sale.
The allowance is based on Company’s estimate
of expected sales returns. The estimate of sales
return is determined primarily by the Company’s
historical experience in the markets in which the
Company operates.
iii. Export incentives
Export incentives are recognised as income when the
right to receive credit as per the terms of the scheme
is established in respect of the exports made and
where there is no significant uncertainty regarding the
ultimate collection of the relevant export proceeds.
iv. Interest income or expense
Interest income or expense is recognised using the
effective interest method on time proportion method.
v. Dividend income
Dividend income is recognised when the Company’s
right to receive dividend is established, which is
generally when shareholders approve the dividend.
vi. Service income
a) Revenue from technical & manufacturing
know-how and R&D support (presented as
other operating revenue) and management and
support activities (presented as other income)
provided to group entities are recognised over
time as the services measured in line with
contractual arrangements.
b) The Company provides product development
activities which are linked to the products
manufactured. Usually these services are
provided over a period of time with specific
milestones. Revenue from such services is
recognised over time, as the Company’s
performance creates or enhances an asset that
the customer controls.
m. Contract Balances
i. Contract assets
A contract asset is the right to consideration in
exchange for goods or services transferred to the
customer. If the Company performs by transferring
goods or services to a customer before the
customer pays consideration or before payment is
due, a contract asset is recognised for the earned
consideration that is conditional.
ii. Trade receivable
A receivable is recognised if an amount of
consideration that is unconditional (i.e., only the
passage of time is required before payment of the
consideration is due). Refer to accounting policies of
financial assets in section (a) Financial instruments -
initial recognition and subsequent measurement.
iii. Contract liabilities
A contract liability is the obligation to transfer
goods or services to a customer for which the
Company has received consideration (or an amount
of consideration is due) from the customer. If a
customer pays consideration before the Company
transfers goods or services to the customer, a
contract liability is recognised when the payment is
made or the payment is due (whichever is earlier).
Contract liabilities are recognised as revenue when
the Company performs under the contract.
n. Leases
Lessee
The Company’s lease asset classes primarily consist of
leases for buildings and plant and machinery.
At inception of a contract, the Company assesses whether
a contract is, or contains, a lease as per the requirement
of Ind AS 116. At inception or on reassessment of a
contract that contains a lease component, the Company
allocates the consideration in the contract to each lease
component on the basis of their relative stand-alone
prices. However, for the leases of buildings in which it is
a lessee, the Company has elected not to separate non¬
lease components and account for the lease and non¬
lease components as a single lease component.
The Company elected to use the following practical
expedients on initial application:
• Applied a single discount rate to a portfolio of leases
with similar characteristics.
• Applied the exemption not to recognise right-of-use
assets and liabilities for leases with less than 12 months
of lease term on the date of initial application.
Excluded the initial direct costs from the measurement of
the right-of-use asset at the date of initial application.
The Company recognises a right-of-use asset and a lease
liability at the lease commencement date. The right-of-use
asset is initially measured at cost, which comprises the
initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date,
plus any initial direct costs incurred and an estimate of
costs to dismantle and remove the underlying asset or
to restore the underlying asset or the site on which it is
located, less any lease incentives received.
The right-of-use assets is subsequently measured at
cost less any accumulated depreciation, accumulated
impairment losses, if any and adjusted for any
remeasurement of the lease liability. The right-of-use
assets is depreciated using the straight-line method from
the commencement date over the useful life of right-of-
use asset. Right-of-use assets are tested for impairment
whenever there is any indication that their carrying
amounts may not be recoverable. Impairment loss, if any,
is recognised in the Statement of Profit and Loss.
The lease liability is initially measured at the present
value of the lease payments that are not paid at the
commencement date, discounted using the Company's
incremental borrowing rate. The lease liability is
subsequently remeasured by increasing the carrying
amount to reflect interest on the lease liability, reducing
the carrying amount to reflect the lease payments made
and remeasuring the carrying amount to reflect any
reassessment or lease modifications or to reflect revised
in-substance fixed lease payments. The Company
recognises the amount of the re-measurement of lease
liability due to modification as an adjustment to the right-
of-use asset and statement of profit and loss depending
upon the nature of modification. Where the carrying
amount of the right-of-use asset is reduced to zero and
there is a further reduction in the measurement of the lease
liability, the Company recognises any remaining amount of
the re-measurement in Statement of Profit and Loss.
Lease payments included in the measurement of the lease
liability comprise the following:
a. Fixed payments including in-substance
fixed payments;
b. Variable lease payments that depend on an index or
a rate, initially measured using the index or rate as at
the commencement date;
c. Amounts expected to be payable under a residual
value guarantee; and
d. the exercise price under a purchase option that
the Company is reasonably certain to exercise,
lease payments in an optional renewal period if
the Company is reasonably certain to exercise an
extension option, and penalties for early termination
of a lease unless the Company is reasonably certain
not to terminate early.
The lease liability is measured at amortised cost using the
effective interest method. It is remeasured when there is
a change in future lease payments arising from a change
in an index or rate, if there is a change in the Company's
estimate of the amount expected to be payable under
a residual value guarantee, if the Company changes
its assessment of whether it will exercise a purchase,
extension or termination option or if there is a revised in¬
substance fixed lease payment.
When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying amount
of the right-of-use asset, or is recorded in profit or loss
if the carrying amount of the right-of-use asset has been
reduced to zero. The Company presents right-of-use assets
that do not meet the definition of investment property
in ‘property, plant and equipment’ and lease liabilities in
‘financial liabilities’ in the statement of financial position.
o. Income tax
Income tax comprises current and deferred income tax.
Income tax expense is recognised in statement of profit
and loss or in other comprehensive income.
i. Current tax
Current tax comprises the expected tax payable
or receivable on the taxable income or loss for
the year and any adjustment to the tax payable or
receivable in respect of previous years. Current tax
for current year and prior periods is recognised at
the amount expected to be paid or recovered from
the tax authorities, using the tax rates and laws that
have been enacted or substantively enacted by the
balance sheet date.
Current tax assets and current tax liabilities are offset
only if there is a legally enforceable right to set off
the recognised amounts and it is intended to realise
the asset and settle the liability on a net basis or
simultaneously.
ii. Deferred tax
Deferred income tax assets and liabilities are
recognised for all temporary differences arising
between the tax bases of assets and liabilities
and their carrying amounts in the standalone
financial statements.
Deferred tax assets are reviewed at each reporting
date and are reduced to the extent that it is no longer
probable that the related tax benefit will be realised.
Deferred income tax assets and liabilities are
measured using the tax rates and laws that have
been enacted or substantively enacted by the
balance sheet date and are expected to apply to
taxable income in the years in which those temporary
differences are expected to be recovered or settled.
The effect of changes in tax rates on deferred income
tax assets and liabilities is recognised as income or
expense in the period that includes the enactment or
substantive enactment date. A deferred income tax
assets is recognised to the extent it is probable that
future taxable income will be available against which
the deductible temporary timing differences and tax
losses can be utilised.
Deferred tax assets and deferred tax liabilities are
offset only if there is a legally enforceable right to
set off the recognised amounts and it is intended to
realise the asset and settle the liability on a net basis
or simultaneously.
p. Borrowing cost
Borrowing costs are interest and other costs (including
exchange differences relating to foreign currency
borrowings to the extent that they are regarded as an
adjustment to interest costs) incurred in connection
with the borrowing of funds. Borrowing costs directly
attributable to acquisition or construction of an asset
which necessarily take a substantial period of time to get
ready for their intended use are capitalised as part of the
cost of that asset. Borrowing cost also includes exchange
differences to the extent regarded as an adjustment to the
borrowing costs. Other borrowing costs are recognised as
an expense in the period in which they are incurred.
q. Recent pronouncements
Ministry of Corporate Affairs (“MCA”) notifies new
standards or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued
from time to time.
In May 2025, MCA notified amendments to Ind AS 21
- The Effects of Changes in Foreign Exchange Rates,
applicable w.e.f. April 1, 2025. The Company has
reviewed the amendment and based on its evaluation has
determined that it does not have any significant impact in
its financial statements.
In August 2025, MCA notified the following
amendments to:
1. Ind AS 1, Presentation of Financial Statements,
applicable w.e.f. April 1, 2025 - The amendment
relates to classification of liabilities as current or non¬
current and non-current liabilities with covenants.
In the context of classifying a liability as current, it
removes the requirement of existence of a right to
defer settlement for at least 12 months after the
reporting date and instead requires that the said
right should exist on the reporting date and have
substance. The amendment also introduces guidance
on classification of liabilities with covenants. The
Company has no impact of these amendments
in its classification criteria of current and non¬
current liabilities.
2. Ind AS 7, Statement of Cash Flows and Ind AS
107, Financial Instruments: Disclosures, applicable
w.e.f. April 1, 2025 - The amendment in Ind AS 7
requires to inform users of financial statements of
the existence of supplier finance arrangements and
explain the nature of the arrangements, the carrying
amount of liabilities and the range of payment due
dates. Ind AS 107 has been amended to add supplier
finance arrangements as a factor that may cause
concentration of liquidity risk. The Company has
reviewed the amendment and based on its evaluation
has determined that it does not have any significant
impact in its financial statements.
3. Ind AS 12, International Tax Reform - Pillar
Two Model Rules applicable immediately - The
amendments provide a temporary mandatory
relief from deferred tax accounting for top-up tax
and disclose that they have applied the relief. The
Company has reviewed the amendment and based
on its evaluation has determined that it does not have
any significant impact in its financial statements.
8.5 Employee stock option plan
For details of shares reserved for issue under Employee stock option scheme (ESOS) of the Company, refer note 27.
8.6 There are no shares issued pursuant to contract without payment being received in cash or by way of bonus shares during the
period of five years immediately preceding the reporting date.
9. Other equity
(Refer disclosure of other equity in Statement of changes in equity)
Securities premium
Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of the
Companies Act, 2013.
Capital redemption reserve
As per Companies Act, 2013, capital redemption reserve is created when company purchases its own shares out of free reserves or
securities premium. A sum equal to the nominal value of the shares so purchased is transferred to capital redemption reserve. The
reserve is utilised in accordance with the provisions of section 69 of the Companies Act, 2013.
General reserve
It represents the portion of the net profit which the Company has transferred, before declaring dividend pursuant to the earlier
provision of Companies Act 1956. Mandatory transfer to general reserve is not required under the Companies Act 2013.
Retained earnings
The amount that can be distributed by the Company as dividends to its equity shareholders.
Share based payment reserve
The Company has established various equity settled share based payment plans for certain categories of employees of the Company.
Refer Note 27 for further details on these plans.
Capital reserve
Capital reserve arising pursuant to scheme of amalgamation.
Dividends
The following dividends were paid by the Company
Money received against share warrants
The Board of Directors of the Company, in their meeting held on December 23, 2025 have approved a issuance of 25,000,000
warrants, which are convertible into fully paid-up Equity Shares of the Company, on preferential basis to the Promoter and Non¬
Promoter investor category of the Company, up to an amount of H 14,625 million, at a issue price of H 585/- per Warrant (derived
pursuant to SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018).
Each Warrant will be convertible into One Equity Share of the Company and the rights attached to Warrants can be exercised in one
or more tranches at anytime within a period of 18 months from the date of allotment of Warrants.
Shareholders of the Company, in Extra-ordinary General Meeting held on January 22, 2026, approved the issuance of Warrants on
preferential basis. During the year ended March 31,2026, the Company received an aggregate consideration of H 3,656.25 million
on February 23, 2026 towards minimum 25% of the total consideration of the Warrants.
i) All secured current borrowings from banks are secured by a paripassu first charge on the current assets of present and future
of the Company and a paripassu second charge of the property, plant and equipment of present and future of the Company.
ii) The Company has outstanding foreign currency denominated loans carrying an interest rate ranging 4.40% to 4.60% p.a
benchmark linked to SOFR (March 31,2025: 5.25% to 5.50% p.a ) from banks. The facility is repayable within 180 days from
the date of its origination.
iii) The Company has unsecured loan carrying an interest rate of 6.75% per annum. The facility is repayable within 90 days from
the date of its origination
iv) The Company's exposure to interest rate, foreign currency and liquidity risks is included in note 33.
v) As on March 31,2026, the Company has obtained various borrowings from banks on basis of security of current assets wherein
the returns/statements filed with the banks are in agreement with the audited / unaudited books of accounts.
vi) Details of Current maturities of non-current borrowings
23. Exceptional Items
During the year ended March 31,2026, the Company has incurred transaction costs in relation to the acquisition of Senn Chemicals
AG amounting to H 121.60 million. The same has been recognised as an expense and disclosed separately as exceptional items.
During the year ended March 31, 2025, the Company received an insurance claim towards business interruption arising from the
information security incident encountered during the year ended March 31, 2024. The same has been recognised as income and
disclosed separately as exceptional items
The Company is involved in taxation matters that arise from time to time in the ordinary course of business. Management is of
the view that above claims are not tenable and will not have any material adverse effect on the Company’s financial position and
results of operations.
The Company has a process whereby periodically all long-term contracts are assessed for material foreseeable losses. At the year
end, the Company has reviewed and ensured that there are no material foreseeable losses on such long term contracts which needs
to be provided for in the books of account.
The Company has reviewed all its pending litigations including legal proceedings initiated in the ordinary course of business except
as disclosed above. The Company does not expect the outcome of these proceedings to have a material and adverse effect on its
financial position and accordingly no adjustment in respect thereof is expected.
time to time be allowed to be eligible for the benefits of the stock options under applicable laws and regulations prevailing from
time to time (all such persons are hereinafter collectively referred to as ‘Eligible Employees’), except persons who are promoters
or belong to the promoter group or a Director who either himself or through his relative or through any Body corporate, directly or
indirectly, holds more than ten per cent of the outstanding equity shares of the company and Independent Directors, at such price
or prices, in one or more tranches and on such terms and conditions, as may be fixed or determined by the Board in accordance
with the ESOS 2017.
Under the above Scheme till date, options were granted in one tranche viz. Grant I. The options granted under the Plan shall start
vesting in tranches after one year from the date of grant and not more than three years under Grant I from the respective date of
grant of the options.
The Black-Scholes-Merton model includes assumptions regarding dividend yields, expected volatility, expected terms and risk free
interest rates. In respect of exercise price of options granted, the expected term of an option (or “option life”) is estimated based on
the vesting term, contractual term, as well as expected exercise behavior of the employees receiving the option. In respect of fair
market value of the options granted, the option life is estimated based on the simplified method. Expected volatility of the option
is based on historical volatility, of the observed market prices of the Company’s publicly traded equity shares. Dividend yield of the
options is based on recent dividend activity. 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.
27. Share based payments
Granules India Limited - Employee Stock Option Scheme 2009 & 2017 (ESOS-2009 & ESOS-2017)
Pursuant to the decision of the shareholders at their meeting held on 25th September, 2009, the Company has formulated an
Employee Stock Option Scheme 2009 to be administered by the Nomination & Remuneration Committee of the Board of Directors.
This scheme has been formulated in accordance with the Securities Exchange Board of India (Employee Stock Option Scheme and
Employee Stock Purchase Scheme) Guidelines, 1999.
Under the Plan, options not exceeding 10,048,070 have been reserved to be issued to the eligible directors and employees (Employees
under permanent employment of the Company and its subsidiary company(ies), including eligible Directors of the Company and its
subsidiary, whether whole time or not, whether working in India or abroad or otherwise, except the Promoter Directors and Promoter
group employees) with each option conferring a right upon the Optionee to apply for one equity share.
The exercise price of the options is the closing market price of the shares on that stock exchange where there is highest trading
volume prior to the date of the grant i.e. the date of the Compensation & Remuneration Committee / Board meeting at which the
grant of options is approved.
Under the above Scheme till date, options were granted in eight tranches. The options granted under the Plan shall start vesting
in tranches after one year from the date of grant and not more than four years under Grant VIII from the respective date of grant
of the options.
Pursuant to the decision of the shareholders at their meeting held on 28th September, 2017, the Company has formulated an
Employee Stock Option Scheme 2017 to be administered by the Nomination & Remuneration Committee of the Board of Directors.
This scheme has been formulated in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits)
Regulations, 2014 (‘SEBI Regulations’) for the time being in force and as may be modified from time to time.
Under the Plan, options not exceeding 11,435,100 have been reserved to such person(s) who are in the permanent employment of
the Company, whether working in India or out of India and to the Directors of the Company and to such other persons as may from
i) As the future liability for gratuity and leave encashment is provided on an actuarial basis for the Company as a whole, the
amount pertaining to the Key Management Personnel and their relatives is not ascertainable and, therefore, not included above.
ii) *Foreign currency balances included above have been shown at restated values arrived by using the closing exchange rates
iii) The Company has established a comprehensive system of maintenance of information and documents as required by the
transfer pricing regulations under Sections 92-92F of the Income-Tax Act, 1961. Since the law requires existence of such
information and documentation to be contemporaneous in nature, the Company continuously updates its documents for the
international transactions entered into with the associated enterprises during the financial year. The management is of the
opinion that its international transactions are at arm’s length so that the aforesaid legislation will not have any impact on the
standalone financial statements, particularly on the amount of tax expense for the year and that of provision for taxation.
iv) There were no loans or advances in the nature of loans granted by the Company to promoters, Directors, Key managerial
persons and the related parties (as defined under Companies Act, 2013), either severally or jointly with any other person, that
were repayable on demand or without specifying any terms or period of repayment.
v) Granules USA Inc., USA was merged with Granules Pharmaceuticals Inc., USA with effect from April 1,2025.
32. Fair Values
The management assessed that loans, cash and cash equivalents, trade receivables, current borrowings, trade payables and other
current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current
transaction between willing parties, other than in a forced or liquidation sale.
33. Financial risk management
Framework
The Company is exposed primarily to Credit Risk, Liquidity Risk and Market risk (fluctuations in foreign currency exchange rates and
interest rate), which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of
the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.
Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to
a financial loss. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well
as concentration of risks. Credit risk is controlled by analyzing credit limits and creditworthiness of customers on a continuous
basis to whom the credit has been granted after obtaining necessary approvals for credit. Financial instruments that are subject to
concentrations of credit risk principally consist of trade receivables, investments, loans, cash and cash equivalents, bank deposits
and other financial assets. None of the financial instruments of the Company result in material concentration of credit risk, except
for trade receivables.
Ind AS requires expected credit losses to be measured through a loss allowance. The Company assesses at each date of statements
of financial position whether a financial asset or a group of financial assets is impaired. Expected credit losses are measured at an
amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk
on the financial asset has increased significantly since initial recognition. The Company has used a practical expedient by computing
the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account
historical credit loss experience and adjusted for forward-looking information. Company’s exposure to customers is diversified
and major customer contributes around 63% and 59% of outstanding trade receivable as of March 31, 2026 and March 31,2025.
The maximum exposure to credit risk was H 12,535.31 millions and H 12,988.14 millions as of March 31, 2026 and March 31,2025
respectively, being the total of the carrying amount of balances with trade receivables, loans and other financial assets excluding
derivative assets.
Before accepting any new customer, the Company uses an external/internal credit scoring system to assess the potential customer's
credit quality and defines credit limits of customer. Limits and scoring attributed to customers are reviewed at periodic intervals.
The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in the
provision matrix.
Credit risk on financial assets, except trade receivables is limited as the Company generally transacts with banks and financial
institutions with high credit rating assigned by international and domestic credit rating agencies. Investment primarily include
investment in subsidiaries whose carrying value is evaluated by the management at the end of every reporting period for impairment.
As at the end of the reporting period, there are no indicators of impairment of investments.
Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
prices. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, interest
rates and other market changes. The Company’s exposure to market risk is primarily on account of foreign currency exchange rate
risk and interest rate risk.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of change in market
interest rates. All the debt obligations of the Company are with floating interest rates which is subject to exposure to the risk of
changes in market interest rates.
Interest rate sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of borrowings affected.
With all other variables held constant, the Company’s profit before tax is affected through the impact on borrowings, as follows:
Liquidity risk
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is
to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk
by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual
cash flows, and by matching the maturity profiles of financial assets and liabilities.
Foreign Currency exchange rate risk
The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other comprehensive
income and equity, where any transaction references more than one currency or where assets / liabilities are denominated in a
currency other than the functional currency of the respective entities. Considering the countries and economic environment in which
the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks
primarily relate to fluctuations in USD/EURO against the functional currencies of the Company.
Commodity rate risk
Exposure to market risk with respect to commodity prices primarily arises from the Company’s purchases and sales of active
pharmaceutical ingredients, including the raw material components for such active pharmaceutical ingredients. These are commodity
products, whose prices may fluctuate significantly over short periods of time. The prices of the Company’s raw materials generally
actuate in line with commodity cycles, although the prices of raw materials used in the Company’s active pharmaceutical ingredients
business are generally more volatile. The cost of raw materials forms the largest portion of the Company’s operating expenses.
Commodity price risk exposure is evaluated and managed through operating procedures and sourcing policies. As of March 31,
2026, the Company had not entered into any material derivative contracts to hedge exposure to fluctuations in commodity prices.
Cash flow hedges
Foreign currency risk:
Foreign exchange forward contracts are designated as hedging instruments in cash flow hedges of forecast sales in US dollar.
Further, Euro denominated debt are designated as hedging instruments in cash flow hedges of forecast sales in Euro. These forecast
transactions are highly probable. The foreign exchange forward contract balances vary with the level of expected foreign currency
sales and changes in foreign exchange forward rates.
There is an economic relationship between the hedged items and the hedging instruments as the terms of the foreign exchange
forward contracts and loans match the terms of the expected highly probable forecast transactions (i.e., notional amount and
expected payment date). The Company has established a hedge ratio of 1:1 for the hedging relationships as the underlying risk of
the foreign exchange forward contracts and loans are identical to the hedged risk components. To test the hedge effectiveness, the
Company uses the hypothetical derivative method and compares the changes in the fair value of the hedging instruments against
the changes in fair value of the hedged items attributable to the hedged risks.
The hedge ineffectiveness can arise from:
• Differences in the timing of the cash flows of the hedged items and the hedging instruments
• The counterparties’ credit risk differently impacting the fair value movements of the hedging instruments and hedged items
34. Segment reporting
A. Basis for segmentation
The operations of the Company are limited to one segment viz. Pharmaceutical products including ingredients and intermediaries.
The products being sold under this segment are of similar nature and comprises of pharmaceutical products only. The Company's
Chief Operating Decision Maker (CODM) reviews the internal management reports prepared based on aggregation of financial
information of the Company on a periodic basis, for the purpose of allocation of resources and evaluation of performance. Accordingly,
management has identified pharmaceutical segment as the only operating segment for the Company.
B. Segment information for secondary segment reporting (by geographical segment)
The Company has reportable geographical segments based on location of its customers:
(i) Revenue from customers within India - Domestic
(ii) Revenue from customers outside India - Exports
Revenue from one external customer does not exceed 10% of Company’s total revenue from operations during the current or
previous year. Revenue from subsidiaries is disclosed in note 31.
The Company is engaged in the manufacture of Pharmaceuticals, which in the context of Ind AS 108 is considered only
business segment.
Note:
i) Non-current assets for this purpose consist of property, plant and equipment, capital work in progress, right-of-use assets,
intangible assets, intangible assets under development and other non-current assets.
35. Capital management
For the purpose of the Company's capital management, capital includes issued equity capital, securities premium and all other
equity reserves attributable to the equity holders. The primary objective of the Company’s capital management is to maximise the
shareholder value.
The Company manages its capital structure in consideration to the changes in economic conditions and the requirements of the
financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided by equity. Net debt consists
of borrowings including interest accrued on borrowings, lease liabilities, less cash and cash equivalents and other bank balances.
36. Other Statutory information
i) There are no proceedings initiated or pending against the Company as at March 31,2026, under Prohibition of Benami Property
Transaction Act, 1988 and rules made thereunder (As amended in 2016).
ii) The Company does not have any transactions with companies struck off as per Section 248 of the Companies Act, 2013 and
Section 560 of the Companies Act, 1956.
iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
v) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
vi) 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.
vii) 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 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).
ix) The Company has complied with the relevant provisions of the Foreign Exchange Management Act, 1999 (42 of 1999) and the
Companies Act for the above transactions and the transactions are not violative of the Prevention of Money-Laundering Act,
2002 (15 of 2003).
x) Title deeds of all immovable properties were held in the name of the Company.
37. Acquisition of Granules Pharmaceuticals GmbH
The Company has acquired a 100% equity stake in M/s Granules Pharmaceuticals GmbH (formerly known as “Optus 1039. GmbH”),
Germany for a consideration of EUR 28,400 on November 20, 2025.
38. Labour Code:
The Company has estimated and recognized the impact of implementation of the New Labour Codes under Employee benefits
expense for the year ended March 31, 2026. The impact of the same is not material.
40. Subsequent event
No significant subsequent events have been observed till April 29, 2026 which may require any additional disclosure or an adjustment
to the standalone financial statements other than proposed dividend as disclosed in note 9.
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