1. During the year ended March 31, 2025 additions to plant and equipments includes INR 7.82 crores (March 31, 2024 : INR 14.38 crores) on account of government assistance in the form of the duty benefit availed under Export Promotion Capital Goods (EPCG) Scheme on import of plant and equipments. Closing balance of Capital work-in-progress as at March 31, 2025 include INR 1.74 crores (as at March 31, 2024 : INR 5.24 crores) for this benefit.
2. Capital work-in-progress as at March 31, 2025 and as at March 31, 2024 includes assets under construction at various plants, head office and production lines which are pending installation. There are no projects which have either exceeds their budget or whose timelines have been deferred.
3. Disclosure of contractual commitments for the acquisition of property, plant and equipment has been provided in note 36.
4. The Company undisputedly possesses the title deeds for all immovable properties held by the Company, other than below, where the deeds is in the process of being executed in favour of the Company, presented under ‘Freehold land’ and ‘Buildings’ in the above schedule:
During the year ended March 31, 2025, an investment property comprising land and building in Uttarakhand, which was held to earn rentals and capital appreciation, was sold for total sales considerations of INR 8 crores. The gain on sale of investment property has been presented under the head ‘other income'.
Fair value hierarchy
The Company has no restrictions on the realisability of its investment property and no contractual obligation to purchase, construct or develop or for repair & maintenance.
Description of valuation technique used:
The Company obtained independent valuations of its investment properties as at the previous year ended March 31, 2024. The fair value of the investment properties have been derived using the direct comparison method. The direct comparison method involves a comparison of the investment properties to similar properties that have actually been sold on arms-length basis or are offered for sale in the same region. This approach demonstrates what buyers have historically been willing to pay (and sellers willing to accept) for similar properties in an open and competitive market, and is particularly useful in estimating the value of the land and properties that are typically traded on a unit basis. This approach leads to a reasonable estimation of the prevailing price. Given that the comparable instances are located in close proximity to the investment properties; these instances have been assessed for their locational comparative advantages and disadvantages while arriving at the indicative price assessment for investment properties.
These valuations are based on valuations performed by an accredited independent valuer who is a specialist in valuing these types of investment properties and is a registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017. A valuation model in accordance with that recommended by the international valuation standards committee has been applied.
Sensitivity analysis of the investment property fair value assumptions
Further the Company performs sensitivity analysis on the assumptions used by the valuer and ensures that the valuation of investment property is appropriate.
The Company undisputedly possessed the title deeds for all properties held by the Company, presented under ‘freehold land and Building’ in the above schedule.
a Capital contribution in Lifestar Pharma LLC has been contributed solely (i.e. 100%) by the Company. In terms of agreement, the non-controlling interest of 10% is restricted to profit sharing only subject to complete repayment of 100 % capital contribution made by Mankind Pharma Limited.
b The Board of directors of Company at its meeting held on February 10, 2025 approved the sale of entire stake held by the Company in Mahananda Spa and Resorts Private Limited (“Mahananda”), a wholly owned subsidiary Company to Chalet Hotels Limited. The proceeds of monetization of non-core assets to be utilized to retire part of its debts and the Company has completed the execution of Share Purchase Agreement on February 11, 2025 for sale of 100% of the Equity Shares and 100% of 0.01% Optionally Convertible Non-Cumulative Redeemable Preference Shares of Mahananda Spa and Resorts Private Limited for a cash consideration of INR 530 crores along with closing adjustments of INR 32.05 crores.
c The Company has subscribed to 0.01% Optionally Convertible Non-Cumulative Redeemable Preference Shares (OCNRPS) of face value of INR 10 with a premium of INR 466.41 each carrying coupon of 0.01% per annum issued by its wholly owned subsidiary i.e. Prolijune Lifesciences Private Limited (‘Prolijune’). Such shares shall be optionally convertible to the equity shares either fully or partly at the option of the issuer Company at any time during the tenure of OCNRPS in one or more tranches. At the time of conversion, each one (1) OCNRPS of face value of INR 10 each, will be entitled to one (1) equity share of face value of INR 10 each of Prolijune, or if OCNRPS is redeemed in cash, the redemption will be made at higher of the fair value of shares of Prolijune on the date of redemption or issue price of OCNRPS i.e. INR 476.41 for each OCNRPS. The tenure of OCNRPS shall be up to September 30, 2038.
d The Company has subscribed to 0.01% Optionally Convertible Non-Cumulative Redeemable Preference Shares (OCNRPS) of face value of INR 10 each carrying coupon of 0.01% per annum issued by its wholly owned subsidiary i.e. Appian Properties Private Limited (‘Appian’). Such shares shall be optionally convertible to the equity shares either fully or partly at the option of the issuer Company at any time during the tenure of OCNRPS in one or more tranches. At the time of conversion, each one (1) OCNRPS of face value of INR 10 each, will be entitled to one (1)
equity share of face value of INR 10 each of Appian, or if OCNRPS is redeemed in cash, the redemption will be made at higher of the fair value of shares of Appian on the date of redemption or issue price of OCNRPS i.e. INR 10 for each OCNRPS. The tenure of OCNRPS shall be up to April 12, 2038 and January 13, 2042.
e The Company has subscribed to 0.01% Optionally Convertible Non-Cumulative Redeemable Preference Shares (OCNRPS) of face value of INR 10 each carrying coupon of 0.01% per annum issued by its wholly owned subsidiary i.e. Mankind Prime Labs Private Limited (‘Prime Labs’). Such shares shall be optionally convertible to the equity shares either fully or partly at the option of the issuer Company at any time during the tenure of OCNRPS in one or more tranches. At the time of conversion, each one (1) OCNRPS of face value of INR 10 each, will be entitled to one (1) equity share of face value of INR 10 each of Prime Labs, or if OCNRPS is redeemed in cash, the redemption will be made at higher of the fair value of shares of Prime Labs on the date of redemption or issue price of OCNRPS i.e. INR 10 for each OCNRPS. The tenure of OCNRPS shall be up to March 31, 2041.
f The Company has subscribed to 0.01% Optionally Convertible Non-Cumulative Redeemable Preference Shares (OCNRPS) of face value of INR 10 each carrying coupon of 0.01% per annum issued by its wholly owned subsidiary i.e. Mankind Life Sciences Private Limited (‘Life Sciences’). Such shares shall be optionally convertible to the equity shares either fully or partly at the option of the issuer Company at any time during the tenure of OCNRPS in one or more tranches. At the time of conversion, each one (1) OCNRPS of face value of INR 10 each, will be entitled to one (1) equity share of face value of INR 10 each of Life Sciences, or if OCNRPS is redeemed in cash, the redemption will be made at higher of the fair value of shares of Life Sciences on the date of redemption or issue price of OCNRPS i.e. INR 10 for each OCNRPS. The tenure of OCNRPS shall be up to November 30, 2041.
g The Company has subscribed to 0.01% Optionally Convertible Non-Cumulative Redeemable Preference Shares (OCNRPS) of face value of INR 10 each carrying coupon of 0.01% per annum issued by its wholly owned subsidiary i.e. Mankind Agritech Private Limited (‘Agritech’). Such shares shall be optionally convertible to the equity shares either fully or partly at the option of the issuer Company at any time during the tenure of OCNRPS in one or more tranches. At the time of conversion, each one (1) OCNRPS of face value of INR 10 each, will be entitled to one (1) equity share of face value of INR 10 each of Agritech, or if OCNRPS is redeemed in cash, the redemption will be made at higher of the fair value of shares of Agritech on the date of redemption or issue price of OCNRPS i.e. INR 10 for each OCNRPS. The tenure of OCNRPS shall be up to September 30, 2042.
h The Company has subscribed to 0.01% Optionally Convertible Non-Cumulative Redeemable Preference Shares (OCNRPS) of face value of INR 10 each carrying coupon of 0.01% per annum issued by its wholly owned subsidiary i.e. Mankind Petcare Private Limited (formerly known as Mankind Consumer Healthcare Private Limited) (‘Petcare’). Such shares shall be optionally convertible to the equity shares either fully or partly at the option of the issuer Company at any time during the tenure of OCNRPS in one or more tranches. At the time of conversion, each one (1) OCNRPS of face value of INR 10 each, will be entitled to one (1) equity share of face value of INR 10 each of Petcare, or if OCNRPS is redeemed in cash, the redemption will be made at higher of the fair value of shares of Petcare on the date of redemption or issue price of OCNRPS i.e. INR 10 for each OCNRPS. The tenure of OCNRPS shall be up to January 31, 2042.
i The Company has subscribed to 0.01% Optionally Convertible Non-Cumulative Redeemable Preference Shares (OCNRPS) of face value of INR 10 each carrying coupon of 0.01% per annum issued by its wholly owned subsidiary i.e. Mankind Consumer Products Private Limited (‘Consumer Products’). Such shares shall be optionally convertible to the equity shares either fully or partly at the option of the issuer Company at any time during the tenure of OCNRPS in one or more tranches. At the time of conversion, each one (1) OCNRPS of face value of INR 10 each, will be entitled to one (1) equity share of face value of INR 10 each of Consumer Products, or if OCNRPS is redeemed in cash, the redemption will be made at higher of the fair value of shares of Consumer Products on the date of redemption or issue price of OCNRPS i.e. INR 10 for each OCNRPS. The tenure of OCNRPS shall be up to July 31, 2044.
j Pursuant to scheme of amalgamation, the Company has subscribed to 0.01% Optionally Convertible NonCumulative Redeemable Preference Shares (OCNRPS) of face value of INR 100 at a premium of INR 57.64 each carrying coupon of 0.01% per annum issued by its subsidiary i.e. Packtime Innovations Private Limited (‘Packtime’)
by conversion of unsecured loan including interest thereon amounting to INR 23.64 crores. Such shares shall be optionally convertible to the equity shares either fully or partly at the option of the issuer Company at any time during the tenure of OCNRPS. At the time of conversion, each one (1) OCNRPS of face value of INR 100 each, will be entitled to one (1) equity share of face value of INR 100 each of Packtime, or if OCNRPS is redeemed in cash, the redemption will be made at higher of the fair value of shares of Packtime on the date of redemption or issue price of OCNRPS i.e. INR 157.64 for each OCNRPS. The tenure of OCNRPS shall be upto March 22, 2042.
k During the year, the wholly owned subsidiary Company, Broadway Hospitality Services Private Limited (‘Broadway’)
converted loan advanced amounting to INR 22 crores to 66,525 0.01% Compulsorily Redeemable Preference Share ("CRPS’) of face value of INR 10 each at a premium of INR 3,297 per CRPS, carrying coupon of 0.01% per annum (the dividend rights are non-cumulative). Such shares shall be mandatorily redeemable upon the expiry of the tenure unless the same have been redeemed at any time during its tenure at the discretion of the borrower. The redemption will be made at higher of the fair value of shares of Broadway on the date of redemption or issue price of CRPS i.e. INR 3,307 for each CRPS. The tenure of CRPS shall be up to July 31, 2044.
l Pursuant to scheme of amalgamation, the Company has subscribed to 1% unsecured Optionally Convertible Debentures (OCD) of face value of INR 100 each carrying coupon of 1% per annum issued by its subsidiary i.e. Packtime Innovations Private Limited (‘Packtime’). Such OCD shall be optionally convertible to the equity shares fully or partly at the option of the issuer Company at any time during the tenure of OCD. At the time of conversion, each one (1) OCD of face value of INR 100 each, will be entitled to one (1) equity share of face value of INR 100 each of Packtime, or if OCD is redeemed in cash, the redemption will be made at face value of INR 100 each. The tenure of OCD shall be upto March 30, 2027.
m During the current year, the Company has subscribed to 3,636 (March 31, 2024: 13,497) equity shares of face value GBP 0.01 each at an average issue price of GBP 275 (March 31, 2024: GBP 222.26) per share issued by Actimed Therapeutics Limited.
n Investment in partnership firms and limited liability partnership firms are measured at cost, and are shown as net of contribution, drawings and share of profit/ loss for the respective year.
q Impairment of investments
The Company has performed a detailed analysis to identify indicators of impairment in respect of its investment portfolio considering internal and external factors in accordance with Ind AS 36 "Impairment of assets”. The Company has allocated investments wherever indicators exist to its respective Cash Generating Unit (CGU) i.e. pharmaceutical and healthcare products, real estate and hospitality and performed impairment test to ascertain the recoverable amount. The recoverable amount is determined either based on value in use calculation or net selling price.
In respect of pharmaceutical CGU and one of the investments in hospitality CGU, management calculates value in use using a discounted cash flow method. The discounted cash flow calculations uses management assumptions and pre tax cash flow projections based on financed budgets approved by respective entities management covering a 5 to 8 years period. Cash flow projection beyond 5 to 8 years time period are extrapolated using the estimated growth rates which is consistent with forecasts included in industry reports specific to industry in which CGU operates. Management has determined following assumptions for impairment testing of investments in pharmaceutical CGU as stated below.
In respect rest of real estate and hospitality CGU, the recoverable amount is calculated using the direct comparison method. The fair value of investments has been determined by government approved valuer. The direct comparison approach involves a comparison of the properties to similar properties that have actually been sold in arms-length distance from properties or are offered for sale in the same region. This approach demonstrates what buyers have historically been willing to pay (and sellers willing to accept) for similar properties in an open and competitive market, and is particularly useful in estimating the value of the land and properties that are typically traded on
a unit basis. This approach leads to a reasonable estimation of the prevailing price. Given that the comparable instances are located in close proximity to the properties; these instances have been assessed for their locational comparative advantages and disadvantages while arriving at the indicative price assessment for properties. The fair value has been determined by government approved valuer. The main inputs used are the rental growth rates, expected vacancy rates, terminal yields and discount rates based on comparable transactions and industry data. All resulting fair value estimates are included in level 3. In respect of investment in real estate and hospitality, management has considered their fair value considering the direct comparison method.
Management determined budgeted gross margin based on past performance and its expectations of market development. The weighted average growth rates used are consistent with the forecasts included in industry reports. The calculations performed indicate that there is impairment of investments in some investments in real estate sector, hospitality sector and few pharma and pharma packing investments. Management has performed a sensitivity analysis with respect to changes in assumptions for assessment of value-in-use of Investments. Based on this analysis, management believes that adequate headroom is available and change in any of above assumption would not cause any material possible change in carrying value of unit’s CGU over and above its recoverable amount, other than those already accounted.
Sensitivity analysis of assumptions
The Company has performed sensitivity analysis on the key assumptions by /- 2% for each of the assumptions used by the valuer and ensured that the valuation is appropriate and there is no further impairment.
a Includes bank deposits under lien amounting to INR 1.35 crores (March 31, 2024 : INR 5.47 crores) (including interest) marked with banks and are issued to various government authorities/ institutions as margin/ deposits for performance guarantee. It includes interest accrued and not due amounting to INR 1.75 crores (March 31, 2024 : INR Nil) on bank deposits other than under lien.
b Includes bank deposits under lien amounting to INR 16.31 crores (March 31, 2024 : INR 52.20 crores) (including
interest) marked with banks and are issued to various government authorities/ institutions as margin/ deposits for performance guarantee. It includes interest accrued and not due amounting to INR 7.02 crores (March 31, 2024 : INR 10.27 crores) on bank deposits other than under lien.
c During the year, certain bank deposits with remaining maturity of less than 12 months reclassified from other bank balances to other current financial assets. To facilitate comparability of information, the Company has reclassified the comparative figure on same basis. There is no change in total current assets, net current assets or any related ratios.
d I NR 2.92 crores as at March 31, 2024 is recoverable towards share issue expenses incurred in connection with initial public offer of equity shares has been settled during the current year ended March 31, 2025, in accordance with the Companies Act, 2013 and also as per the Offer Agreement entered between the Company and the selling shareholders.
a. I nventory write downs are recognised, considering the nature of inventory, estimated shelf life, ageing of inventory and actual scrapping of inventory as well as provisioning policy of the Company. Write downs of inventories amounted to INR 56.63 crores (March 31, 2024: INR 119 crores). These written down were included in the cost of raw material and components consumed and changes in inventories of finished goods, work-in-progress and stock in trade.
a. The Company has a property at Gurugram which is held for sale as the Company has entered into an agreement with the third party for sale of such property. Accordingly, the same has been recognised as held for sale and measured in accordance with Ind-AS 105 "Non Current Assets Held For Sale and Discontinued Operations” at lower of its carrying amount and fair value less cost to sell. The Company expects to complete the sale by September 30, 2025.
a. The average credit period to domestic customers ranges upto 21 days and to export customers upto 180 days. Our credit terms for government institutions are ranging from 90 to 120 days. No interest is charged on trade receivables upto the due date from the date of the invoice.
b. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on historical credit loss experience and adjusted for forward looking information.
c. No trade or other receivable are due from directors or other officers of the Company either severally or jointly with any other person. Nor any trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member apart from those mentioned below (refer note 42).
Mankind Pharma Limited t Annual Report 2024-25
Mankindlllk-
Jero&yjpi/ci
Notes to the Standalone Financial Statements
for the year ended March 31, 2025
All amounts are in INR crores unless otherwise stated
|
Particulars
|
As at March 31, 2025
|
As at March 31, 2024
|
|
Next Wave (India)
|
-
|
0.00
|
|
Pathkind Diagnostics Private Limited
|
0.02
|
0.01
|
|
Jagdish Chand Juneja Foundation
|
-
|
0.00
|
|
Intercity Corporate Towers LLP
|
-
|
0.00
|
|
Om Sai Pharma Pack
|
-
|
0.00
|
| |
0.02
|
0.01
|
|
d. Movement in allowance for expected credit loss:
|
|
Particulars
|
Year ended March 31, 2025
|
Year ended March 31, 2024
|
|
Balance at the beginning of the year
|
18.86
|
12.79
|
|
Provision for expected credit losses recognised during the year (refer note 34)
|
0.10
|
6.07
|
|
Balance at the end of the year
|
18.96
|
18.86
|
|
Cash and cash equivalents
|
|
Particulars
|
As at March 31, 2025
|
As at March 31, 2024
|
|
Balances with banks
|
|
|
|
on current account
|
65.05
|
127.84
|
|
in deposit account (with original maturity of 3 months or less)
|
135.18
|
83.69
|
|
Cash on hand
|
0.06
|
0.09
|
| |
200.29
|
211.62
|
Note:
a. There are no restrictions with regard to cash and cash equivalents as at the end of the reporting period and prior period.
16 Other bank balances (carried at amortised cost)
|
Particulars
|
As at March 31, 2025
|
As at March 31, 2024
|
|
Fixed deposits with original maturity of more than three months but remaining maturity of less than twelve months
|
105.58
|
272.26
|
| |
105.58
|
272.26
|
Notes:
a. Bank deposits includes interest accrued and not due on deposit account with banks amounting to INR 2.25 crores and INR 3.34 crores as at March 31, 2025 and as at March 31, 2024 resspectively.
b. Short-term deposits are made of varying periods between 3 to 12 months depending on the cash requirements of the Company and earn interest at the respective short-term deposits rates.
Notes to the Standalone Financial Statements
for the year ended March 31, 2025
All amounts are in INR crores unless otherwise stated
17 Loans (carried at amortised cost)
|
Particulars
|
As at March 31, 2025
|
As at March 31, 2024
|
|
Non-current
|
|
|
|
(unsecured and considered good)
|
|
|
|
Loan to related parties (refer note 42) (also refer note b below)
|
9.46
|
8.74
|
| |
9.46
|
8.74
|
|
Current
|
|
|
|
(unsecured and considered good)
|
|
|
|
Loan to related parties (refer note 42) (also refer note b below)
|
8.15
|
37.72
|
|
Loan to employees
|
2.47
|
2.27
|
|
(unsecured and considered doubtful)
|
|
|
|
Loan to related party (refer note 42)
|
19.34
|
19.34
|
|
Less: Impairment allowance for loan to related party (refer note (a) below)
|
(19.34)
|
(19.34)
|
| |
10.62
|
39.99
|
|
(a) Movement in impairment allowance for loan to related party
|
|
Particulars
|
Year ended March 31, 2025
|
Year ended March 31, 2024
|
|
Balance as at the beginning of the year
|
19.34
|
-
|
|
Provision recognised during the year
|
-
|
19.34
|
|
Balance as at the end of the year
|
19.34
|
19.34
|
Notes:
a. The loans classified as current are repayable on demand and management expected to realise within next financial year.
b. Loans are non-derivative financial assets which generate a fixed interest income @ 7.25% p.a. to 8% p.a. (March 31, 2024 : 7.25% p.a. to 8% p.a.),repayable by equated monthly installments.
c. During the year, the Company has assessed recoverability of loans given to subsidiaries. Considering the current financial position of the Company, on going market conditions in which the subsidiary operates and wherever required an impairment allowance has been made.
d. Break up of financial assets carried at amortised cost:
|
Particulars
|
As at March 31, 2025
|
As at March 31, 2024
|
|
Trade receivables (current)
|
894.67
|
769.04
|
|
Cash and cash equivalents (current)
|
200.29
|
211.62
|
|
Other bank balances (current)
|
105.58
|
272.26
|
|
Loans (current)
|
10.62
|
39.99
|
|
Loans (non-current)
|
9.46
|
8.74
|
|
Other financial assets (current)
|
231.14
|
344.71
|
|
Other financial assets (non-current)
|
146.16
|
18.37
|
e. The Company has not granted loans or advances in the nature of loans to promoters, directors, key managerial personnel (KMPs). Further, the Company has granted loans to its subsidiaries which are repayable on demand, that are:
(i) Rights, preferences and restrictions attached to equity shares
The Company has only one class of equity shares having a par value of INR 1 per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, holder of equity shares will be entitled to receive 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 and purpose of reserve:
Retained earnings are the profits/(loss) that the Company has earned/incurred till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings include re-measurement loss / (gain) on defined benefit plans, net of taxes that will not be reclassified to statement of profit and loss.
The amount that can be distributed by the Company as dividends to its equity shareholders, is determined based on the requirements of Companies Act, 2013. Thus, the amounts reported above are not distributable in entirety.
Nature and purpose of reserve:
The negative capital reserve of INR 415.60 crores represents net assets transferred during the year ended March 31, 2019 in respect of the Company’s leasing business to a related party, Appian Multiventures Private Limited (formerly known as Mankind Biosys Private Limited) in accordance with the scheme of demerger approved by the Hon’ble National Company Law Tribunal on May 18, 2018.
Nature of security of borrowings and other terms are as under:
(a) Non-convertible debentures:
The Company had issued rated, listed, secured, transferable, redeemable, non-convertible debentures (“NCDs”) of a face value of INR 1,00,000 each by private placement in three series.
NCD Series 1- 1,25,000 NCDs, of the aggregate nominal value of up to INR 1,250 crores, carries interest at a rate of 7.99% p.a. payable semi annually and tenure of NCDs is 18 months and repayable on April 16, 2026.
NCD Series 2- 1,25,000 NCDs, of the aggregate nominal value of up to INR 1,250 crores, carries interest at a rate of 7.99% p.a. payable semi annually and tenure of NCDs is 24 months and repayable on October 16, 2026.
NCD Series 3- 2,50,000 NCDs, of the aggregate nominal value of up to INR 2,500 crores, carries interest at a rate of 7.97% p.a. payable semi annually and tenure of NCDs is 37 months and repayable on November 16, 2027.
NCDs are secured by exclusive pledge of shares and securities of Bharat Serums and Vaccines Limited acquired by the Company.
The Company has complied with all financial covenants as at the reporting date and there is no indication of any default or breach of these covenants. These covenants are tested semi-annually as per the terms of the debenture trust deed.
(b) Packing credit facility from bank:
Packing credit facility obtained by Company from ICICI Bank and Kotak Mahindra Bank at rate of interest-4.89% p.a. to 5.33% p.a. (March 31, 2024 : Nil). These facilities are secured by following:-
(i) Exclusive charge on present and future inventory and book debts of Company.
(c) Cash credit facility from bank:
Pursuant to scheme of amalgamation, cash credit facility availed to INR 30 crores (March 31, 2024 : INR 35 crores), outstanding at INR 29 crores (March 31, 2024 : 14.93 crores), rate of interest- 8.50% p.a. (March 31, 2024 : 8.50% p.a.) obtained from ICICI Bank (previous year from HDFC Bank) and INR 3.48 crores (March 31, 2024 : INR Nil), outstanding at INR 3.48 crores (March 31, 2024 : INR Nil), rate of interest- 8.50% p.a. (March 31, 2024 : Nil) obtained from Kotak Mahindra Bank, transferred to the Company are secured by way of following of JPR Labs Private Limited (transferor Company), (refer note 49):
i) Hypothecation by way of first and exclusive charges on all present and future current assets inclusive of stocks and book debts of JPR Labs Private Limited (transferor Company).
(d) Loan from bank:
Pursuant to scheme of amalgamation, loan to INR 10 crores (March 31, 2024 : INR Nil), outstanding at INR 6.26 crores (March 31, 2024 : INR Nil), rate of interest- 8.50% p.a. (March 31, 2024 : Nil) obtained from ICICI Bank for capital expenditure and loan against property obtained from HDFC Bank, outstanding at INR 1.87 crores (March 31, 2024 : INR Nil), transferred to the Company are secured by way of following of JPR Labs Private Limited (transferor company). (refer note 49):
i) Hypothecation by way of first and exclusive charges on all present and future current assets inclusive of stocks and book debts of JPR Labs Private Limited (transferor company).
ii) Equitable mortgage of the self occupied properties at Plot no. 74/A, Pharma City, Thanam Village, Parwada Mandal, Vishakhapatnam.
(e) Commercial papers:
The Company had issued rated, listed, transferable, rupee denominated commercial paper (CP) having a face value of INR 5,00,000 each in three series:
CP Series 1- 60,000 CPs, of the aggregate nominal value of up to INR 3,000 crores, carries upfront discount at a rate of 7.45% p.a. and tenure of CPs is 91 days and fully repaid during the current year on January 16, 2025.
CP Series 2- 10,000 CPs, of the aggregate nominal value of up to INR 500 crores, carries upfront discount at a rate of 7.65% p.a. and tenure of CPs is 182 days and was repaid on April 17, 2025.
CP Series 3- 30,000 CPs, of the aggregate nominal value of up to INR 1,500 crores, carries upfront discount at a rate of 7.85% p.a. and tenure of CPs is 365 days and is repayable on October 17, 2025.
a. During the year ended March 31, 2025, the Company has reassessed presentation of outstanding employee salaries and wages, which were previously presented under ‘Trade payables’ within ‘Current financial liabilities’. In line the recent opinion issued by the Expert Advisory Committee (EAC) of the Institute of Chartered Accountants of India (ICAI) on the “Classification and Presentation of Accrued Wages and Salaries to Employees”, the Company has concluded that presenting such amounts under ‘Other financial liabilities’, within ‘Current financial liabilities’, results in improved presentation and better reflects the nature of these obligations. Accordingly, amounts aggregating to INR 368.17 crores as at March 31, 2025 (March 31, 2024 : INR 325.74 crores), previously classified under ‘Trade payables’, have been reclassified under the head ‘Other financial liabilities’. Both line items form part of the main heading ‘Financial liabilities’.
b. As at March 31, 2024, Other payables includes outstanding balance of share issue expenses payable to the selling shareholders.
The average credit period to domestic customers ranges upto 21 days and to export customers upto 180 days. Our credit terms for government institutions are typically ranging from 90 to 120 days. No interest is charged on trade receivables upto the due date from the date of the invoice.
Contract liabilities consist of short-term advances received against supply of goods to customer. Such advances are adjusted against supply of goods within a range of 3 months from the reporting date and the revenue is recognised out of the contract liabilities.
(d) Performance obligations
Sales of goods: The performance obligation is satisfied when control of the goods are transferred to the customers based on the contractual terms. Payment terms with customers vary depending upon the contractual terms of each contract.
Sales of services: The performance obligation in respect of professional services is satisfied over a period of time and acceptance of the customer. In respect of these services, payment is generally due upon completion of services.
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36 Contingent liabilities and commitments (to the extent not provided for) A. Contingent liabilities
(a) Claims against the Company not acknowledged as debts
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Particulars
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As at March 31, 2025
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As at March 31, 2024
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i. Goods and Service Tax including Sales Tax (paid under protest INR 0.08 crores (March 31, 2024 : INR 0.07 crores)
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24.66
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0.99
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ii. Income tax demands on various matters (paid under protest INR 31.11 crores (March 31, 2024 : INR 31.68 crores)
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810.02
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95.93
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(b) Particulars
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As at March 31, 2025
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As at March 31, 2024
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Contingent in respect of input credit availed under GST Act (refer note (iii) below)
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-
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8.05
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(c) Other litigations
There are some litigations filed against the Company on account of design, trademarks and patent infringements, labour matters etc. relating to conduct of its business. These cases are at various stage of proceedings and the extent of claim or damages is indeterminate at this stage. The Company is contesting these cases and based on views of internal legal counsel and in consultation with external legal counsel representing the Company, it believes there is no liability which would devolve over the Company in respect of such cases and believes its position will be upheld in the jurisdictional authorities as at close of respective financial year. The Company has also filed certain cases in nature of recovery suit, cases under Section 138 of the Negotiable Instrument Act, 1881, trademark infringement etc. The Company is pursuing these cases and have made adequate accrual for allowance for doubtful debts in respect of such cases, wherever considered necessary.
(d) Income tax search
During the financial year 2023-24, the Income Tax Department ("the department”) conducted a search under section 132 of the Income Tax Act, 1961 ("the Act”) at Company’s registered office, corporate office, few of its manufacturing locations, residence of few of its employees / key managerial personnel, other premises and few of its group entities. During the search proceedings, the Company provided necessary information and responses to the department. Also, certain documents, data backups and other information were also taken by the department for further investigation. Consequent to search proceedings initiated during the financial year 2023-24, the Income Tax Department ("the department”) issued notices under section 148 of the Act which required the Company to furnish income tax returns (ITR) in response thereto for the Assessment Years for which notices were issued. The Company in response to such notices, furnished the requisite ITR/computation of Income, as applicable.
Subsequent to above, the Company received notices under section 143(2)/142(1) of the Act which required the Company to submit certain documents/information in response thereto for the Assessment Years for which notices were issued. The Company duly submitted details for all the years for which the notices were issued.
Recently the orders for all the relevant assessment years have duly been received wherein adjustments have been made to disallow (either fully or partially) certain expenditure aggregating to INR 1,534.40 crores u/s 37(1) of the Act, INR 257.13 crores being partial disallowance of the deduction claimed by the Company u/s 80IC/80IE of the Act and INR 34.13 crores under other miscellaneous sections. The Company basis a detailed assessment of the above said orders is of the view that these orders do not capture the impact of expenditure already considered as a disallowance in the return of income already filed (original/revised) and corresponding taxes paid thereon.
The Company believes that the demand raised in the orders passed is not tenable in law as there are adequate factual and legal grounds to substantiate its position in appeals against the said orders. The Company has already initiated the process of filing appeals against the orders received for the respective assessment years with the relevant tax authorities. Additionally, the management basis its assessment of the matter and based on opinion obtained from its tax consultant is of the view that there are no adjustments that will have any material impact on these financials statements or operations of the Company in respect of the above-said orders.
Notes:
(i) Claims / suits filed against the Company not acknowledged as debts which represents various legal cases filed against the Company. The Company has disclaimed the liability and defending the action. The Company has been advised by its legal counsel that its position is likely to be upheld in the litigation process and accordingly no provision for any liability has been made in the financial statements.
(ii) The Company is contesting the demands of income tax, sales tax and Goods and Service tax, and the management, including its tax advisors, believe that its position will likely be upheld in the appellate process. The management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the Company financial position and results of operations.
(iii) I n the previous year, contingencies in respect of input credit availed under GST pertained to credits claimed by the Company in earlier years, which were subsequently paid to the GST authorities pursuant to an audit conducted by the Office of the Commissioner, Central GST Audit, Gurugram.
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B. Commitments
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Particulars
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As at March 31, 2025
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As at March 31, 2024
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(i) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances March 31, 2025: INR 28.66 crores and March 31, 2024: INR 17.76 crores) excluding capital advances fully provided (refer note 11)
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173.50
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189.07
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(ii) The Company has issued corporate guarantees to banks on behalf of and in respect of fund and non fund based credit facilities availed by its subsidiaries / group companies in accordance with the policy of the Company. (refer note 44)
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358.63
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142.03
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C. Undrawn committed borrowing facility
(i) The Company has a secured working capital demand loan facility from Citibank N.A. amounting to INR 295 crores (March 31, 2024: INR 295 crores). This loan is secured by way of first pari passu hypothecation charge on current assets (book debts), both present and future of the Company. An amount of INR 295 crores (March 31, 2024: INR 295 crores) remains undrawn as at the year end.
(ii) The Company has a secured working capital demand loan facility of INR 300 crores (March 31, 2024: INR Nil) from State Bank of India. This loan is secured by way of first pari passu hypothecation charge on current assets (stocks and book debts & receivables) of the Company. An amount of INR 300 crores (March 31, 2024: INR Nil) remains undrawn as at the year end.
(iii) The Company has a secured working capital demand loan facility of INR 250 crores (March 31, 2024: INR 250 crores) from HDFC Bank. This loan is secured by way of first pari passu charge on stock in trade and book debts of the Company. An amount of INR 250 crores (March 31, 2024: INR 250 crores) remains undrawn as at the year end.
(iv) Pursuant to scheme of amalgamation, The Company has a secured working capital demand loan facility of INR 50 crores (March 31, 2024: INR 50 crores) from HDFC Bank. This loan is secured by way of first pari passu
charge on stocks and book debts of the Company. An amount of INR 50 crores (March 31, 2024: INR 35.07 crores) remains undrawn as at the year end.
(v) The Company has a secured working capital demand loan facility of INR 170 crores (March 31, 2024: INR 170 crores) from Kotak Mahindra Bank. This loan is secured by the way of first pari-passu hypothecation charge on all existing and future current assets of the Company. An amount of INR 127.27 crores (March 31, 2024: INR 170 crores) remains undrawn as at the year end.
(vi) Pursuant to scheme of amalgamation, The Company has a secured working capital demand loan facility/ overdraft facility against fixed deposit (OD against FD) of INR 5.50 crores (March 31, 2024: INR Nil) from Kotak Mahindra Bank. This loan is secured by the way of first pari-passu hypothecation charge on all existing and future current assets of the Company and lien shall be marked on the FD till such time as the obligation under overdraft facility is fully satisfied. An amount of INR 2.02 crores (March 31, 2024: INR Nil) remains undrawn as at the year end.
(vii) The Company has a secured overdraft facility of INR 200 crores from ICICI Bank (March 31, 2024: INR 180 crores) for working capital requirement. This loan is secured by way of first pari passu hypothecation charge on stock and book debts, both present and future of the Company. An amount of INR 93.20 crores (March 31, 2024: INR 180 crores) remains undrawn as at the year end.
(viii) Pursuant to scheme of amalgamation, The Company has a secured overdraft facility of INR 40 crores from ICICI Bank (March 31, 2024: INR Nil) for working capital requirement. This loan is secured by way of first pari passu hypothecation charge on all current assets, both present and future of the Company. An amount of INR 4.74 crores (March 31, 2024: INR Nil) remains undrawn as at the year end.
(ix) The Company had a secured working capital facility from HDFC Bank amounting to INR Nil (March 31, 2024: INR 10 crores) and secured by way of exclusive first charge on the current assets of the Company. An amount of INR Nil (March 31, 2024: INR 10 crores) remains undrawn as at year end and the Company closed the facility during the current year.
There are no restrictions with regard to above undrawn borrowing facility as at the end of the reporting period
and prior period.
D. The Company did not have any long term contracts including derivative contracts for which there were any material
foreseeable losses.
37 Government grant
a. Deferred government grant includes assistance in the form of duty benefit availed under Export Promotion Capital Goods (EPCG) Scheme on import of property, plant and equipment accounted for as government grant and being amortised over the period of contractual obligation.
b. Government grant receivable includes assistance in the form of export incentives under Foreign Trade Policy and budgetary support in respect of GST paid as per the notification dated October 15, 2017, Ministry of Commerce & Industry Department of Industrial Policy and Promotions.
38 Gratuity and other post-employment benefit plans
Disclosures pursuant to Ind AS - 19 "Employee Benefits” are given below :
a. Contribution to defined contribution plan, recognised as expense for the year is as under:
The Company’s contribution to the Employees Provident Fund is deposited with the Regional Provident Fund Commissioner for qualifying employees. Under the scheme, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit plan to fund the benefits.
The Company recognised INR 93.23 crores (March 31, 2024 : INR 89.19 crores), including INR 2.47 crores (March 31, 2024 : INR 4.60 crores) related to discontinued operations, towards Provident Fund, Employee State Insurance, National Pension Scheme and others contribution in the statement of profit and loss. The contribution payable to the plan by the Company is at the rate specified in rules to the scheme.
Hon’ble Supreme Court of India vide its judgement dated February 28, 2019 on Provident Fund required the Companies to include allowances for the purpose of PF contribution. Subsequently, the Company vide assessment letter no. 28212 dated August 04, 2020 received from Employees Provident Fund Organisation wherein the provident fund department has completed their assessment for FY 2015-16 to FY 2019-20. Hence, the Company is of the view, that there is no further liability on account of the Judgement.
The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. Certain sections of the Code came into effect on May 03, 2024. However, the final rules/ interpretation have not yet been issued. Based on a preliminary assessment, the Company believes the impact of the change will not be significant.
b. Defined benefit plan - gratuity plan
In accordance with the Payment of Gratuity Act of 1972, the Company contributes to a defined benefit plan ("the Gratuity Plan”). The gratuity plan provides a lump sum payment to vested employees at retirement, withdrawal, resignation and death of an employee. The gratuity liability is calculated on the basis of fifteen days salary (i.e. last drawn basic salary) for each completed year of service subject to completion of four years and two hundred and forty days in service.
Based on actuarial valuations conducted as at year end, a provision is recognised in full for the benefit obligation over and above the funds held in the gratuity plan.
In accordance with Payment of Gratuity Act, 1972, the Company contributes to a defined benefit plan ("the gratuity plan”) run by Mankind Pharma Private Limited Employees Gratuity Trust Fund, Lifestar Pharma Private Limited Employees Group Gratuity Scheme and Magnet Labs Private Limited Employees Group Gratuity Cum Life Assurance Scheme ("the trusts”). The trusts has taken a Group Gratuity Scheme which is administered by Life Insurance Corporation ("LIC”) of India and Bajaj Allianz Life Insurance Company Limited.
(i) Risks associated with plan provisions
Risks associated with the plan provisions are actuarial risks. These risks are:- (i) investment risk, (ii) interest rate risk (discount rate risk), (iii) mortality risk and (iv) salary growth risk.
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Investment risk
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The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to government bonds yield. If plan liability is funded and return on plan assets is below this rate, it will create a plan deficit.
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Interest rate risk (discount rate risk)
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A decrease in the bond interest rate (discount rate) will increase the plan liability.
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Mortality risk
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The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants. For this report we have used Indian Assured Lives Mortality (2012-14) ultimate table.
A change in mortality rate will have a bearing on the plan’s liability.
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Salary growth risk
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The present value of the defined benefit plan liability 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.
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The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as at March 31, 2025. The present value of defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.
1 The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of obligations.
2 The expected return is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.
3 The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.
The plan assets of the Company managed through trusts namely Mankind Pharma Private Limited Employees Gratuity Trust Fund, Lifestar Pharma Private Limited Employees Group Gratuity Scheme and Magnet Labs Private Limited Employees Group Gratuity Cum Life Assurance Scheme ("the trusts”). The trusts have taken group gratuity scheme which is administered by Life Insurance Corporation (“LIC”) of India and Bajaj Allianz Life Insurance Company Limited. The plan assets of the Company are managed through the trusts. The details of investments relating to these assets are not shown by them. Hence, the composition of each major category of plan assets, the percentage or amount that each major category constitutes to the fair value of the total plan assets has not been disclosed.
f. Sensitivity analysis
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate and expected salary increase. The sensitivity analysis below have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting year, while holding all other assumptions constant.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit liability recognised in the balance sheet.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
39 Capital management
For the purposes of Company’s capital management, capital includes equity attributable to the equity holders of the Company and all other equity reserves. The primary objective of the Company’s capital management is to safeguard its ability to continue as going concern and to ensure that it maintains an efficient capital structure and maximize shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Company is not subject to any externally imposed capital requirements. No changes were made in the objectives, policies or processes for managing capital during the year ended March 31, 2025 and March 31, 2024. Capital gearing ratio is net debt divided by total capital plus net debt and net debt is calculated as borrowings including lease liabilities less cash and cash equivalents. The Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
40 Financial instruments
A. Financial risk management objective and policies
The Company’s principal financial liabilities comprise borrowings, trade payables and other financial liabilities. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include investments in mutual funds, trade and other receivables and cash and cash equivalents that are derived directly from its operations.
The Company’s financial risk management is an integral part of how to plan and execute its business strategies. The Company is exposed to market risk, credit risk and liquidity risk.
The Company’s senior management oversees the management of these risks. The senior professionals working to manage the financial risks and the appropriate financial risk governance framework for the Company are accountable to the Board of Directors and Audit Committee. This process provides assurance to Company’s senior management that the Company’s financial risk-taking activities are governed by appropriate policies and procedures and that financial risk are identified, measured and managed in accordance with Company policies and Company risk objective.
3) 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).
B. Fair value measurements
The management assessed that cash and cash equivalents, other bank balances, trade receivables, loans, other current financial assets, trade payables and other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. The fair value of the other 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. The following methods and assumptions were used to estimate the fair values:
1) The fair value of unquoted instruments is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. The valuation requires management to use unobservable inputs in the model, of which the significant unobservable inputs are disclosed in the tables below. Management regularly assesses a range of reasonably possible alternatives for those significant unobservable inputs and determines their impact on the total fair value.
2) Long-term receivables/payables are evaluated by the Company based on parameters such as interest rates, risk factors, individual creditworthiness of the counterparty and the risk characteristics of the financed project. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.
Notes:
i. Investment in mutual funds traded in active markets are determined by reference to quotes from the financial institutions; for example: Net asset value (NAV) for investments in mutual funds declared by mutual fund house.
ii. I n the absence of observable inputs to measure fair value the assets and liabilities have been classified as level 3. The Company has not given further disclosures since the amount involved is not material.
The management considers that the carrying amounts of financial assets and financial liabilities having short term maturities recognised in the financial statement approximates their fair values.
Risk management objectives
Risk management framework
The Company has exposure to the following risks arising from financial instruments:
- Market risk
- Liquidity risk
- Credit risk
The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework.
The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed periodically to reflect changes in market conditions 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 ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.
a) Market risk :
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprises three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity price risk. Financial instruments affected by market risks include loans and borrowings, deposits, investments and foreign currency receivables and payables. The sensitivity analysis in the following sections relate to the position as at reporting date. The sensitivity of the relevant profit and loss item and equity is the effect of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities held as of March 31, 2025 and March 31, 2024.
(i) Price risk
The Company manages surplus funds through investments in mutual fund plans. The NAV declared by Asset Management Companies (AMC) has generally remained constant on the mutual fund plans taken by the Company. However, if the NAV of the fund is increased/ (decreased) by 5%, the sensitivity analysis has been mentioned below:
(ii) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in foreign currency). The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies.
Foreign currency risk sensitivity
The following tables demonstrate the sensitivity to a reasonably possible change in USD, EUR, NPR, AUD, CAD, CNY, THB, RUB, AED, CHF, GBP and SGD exchange rates, with all other variables held constant. The impact on the Company profit before tax and equity is due to changes in the fair value of monetary assets and liabilities. Foreign currency exposures recognised by the Company are as under:
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 fluctuate in line with commodity cycles, although the prices of raw materials used in the Company’s active pharmaceutical ingredients business are generally more volatile. Cost of raw materials forms the largest portion of the Company’s cost of revenues. Commodity price risk exposure is evaluated and managed through operating procedures and sourcing policies. As of reporting period end, the Company has not entered into any material derivative contracts to hedge exposure to fluctuations in commodity prices.
b) Liquidity risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. The Company’s objective is to at all times maintain optimum levels of liquidity to meet its cash and liquidity requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate source of financing through the use of short term bank deposits, liquid investments in mutual funds and cash credit facility. Processes and policies related to such risks are overseen by senior management. Management monitors the Company’s liquidity position through rolling forecasts on the basis of expected cash flows. The Company assessed the concentration of risk with respect to its debt and concluded it to be low. The Company remains committed to maintaining a healthy liquidity, gearing ratio, deleveraging and strengthening our balance sheet. The maturity profile of the Company’s financial liabilities based on the remaining period from the date of balance sheet to the contractual maturity date is given in the table below. The figures reflect the contractual undiscounted cash obligation of the Company.
Credit risk is the risk that the counter party will not meet its obligation 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, foreign exchange transactions and other financial instruments.
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Possible credit risk
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Credit risk management
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Credit risk related to trade receivables and loans
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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 in securities and loans given. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments. The loans advanced by the Company carries interest and are granted after evaluating the purpose and credit worthiness of the counter party.
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Moreover, given the diverse nature of the Company’s businesses trade receivables are spread over a number of customers with no significant concentration of credit risk. No single customer accounted for 10% or more of trade receivable on a % basis in any of the years indicated.
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Receivables are deemed to be past due or impaired with reference to the Company’s normal terms and conditions of business. These terms and conditions are determined on a case to case basis with reference to the customer’s credit quality and prevailing market conditions. Receivables that are classified as ‘past due’ are those that have not been settled within the terms and conditions that have been agreed with that customer.
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An impairment analysis is performed at each reporting date on trade receivables by lifetime expected credit loss method measured at simplified approach. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.
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Credit risk related to bank balances
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The Company holds bank balances with reputed and creditworthy banking institution within the approved exposures limit of each bank. None of the Company’s cash equivalents, including time deposits with banks, are past due or impaired. Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made in mutual funds, bank deposits and other risk free securities. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.
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The Company’s maximum exposure to credit risk for the components of the balance sheet at March 31, 2025 is the carrying amounts. The Company’s maximum exposure relating to financial instrument is noted in liquidity table below.
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Trade receivables and other financial assets are written off when there is no reasonable expectation of recovery, such as debtor failing to engage in the repayment plan with the Company.
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41 Segment information
41.1 Description of segment and principal activities
As per Ind AS-108 "Operating Segments” {specified under the section 133 of the Companies Act, 2013 ("the Act”) read with Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and other relevant provision of the Act} the Company’s chief operating decision maker, i.e. Managing Director (‘CODM’) has identified pharmaceuticals and other related products as the reportable segments.
The Company is engaged in manufacturing and trading of pharmaceuticals and healthcare products. Accordingly, the Company has only one reportable segment ‘Pharmaceuticals’ and disclosures as per Ind AS 108 "Operating Segments” are not applicable.
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