u Provisions, Contingent Liabilities, Contingent Assets
and Commitments
Provisions
Provisions are recognised when the Company has a
present legal or constructive obligation as a result of past
events; it is probable that an outflow of resources will be
I I kA
required to settle the obligation; and the amount has been
reliably estimated.
Where the effect of the time value of money is material,
provisions are measured at the present value ofthe estimated
future cash flows required to settle the obligation using a
current pre-tax discount rate that reflects the risks specific
to the liability. The unwinding of the discount is recognised
as a finance cost in the Statement of Profit and Loss..
Provision expenses are recognised in the Statement of
Profit and Loss.
Contingent Liabilities
Contingent liabilities are disclosed, unless the possibility of
outflow of resources is remote, when there is
-A possible obligation arising from past events, the
existence of which will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events
not wholly within the control of the Company or
-A present obligation that arises from past events where
it is either not probable that an outflow of resources will
be required to settle the obligation or reliable estimate of
the amount cannot be made
Contingent Assets
A contingent asset is a possible asset that arises from past
events and whose existence will be confirmed only by- the
occurrence or non-occurrence of one or more uncertain
future events not wholly within the control of the entity.
The Company does not recognise the contingent asset in
its standalone financial statements since this may result
in the recognition of income that may never be realised.
Where an inflow of economic benefits are probable,
the Company disclose a brief description of the nature
of contingent assets at the end of the reporting period.
However, when the realisation of income is virtually
certain, then the related asset is not a contingent asset
and the Company recognise such assets.
Commitments
Commitments include the amount of purchase order (net
of advances) issued to parties for completion of assets.
Provisions, contingent liabilities, contingent assets and
commitments are reviewed at each balance sheet date.
v) Exceptional Items
Exceptional items are disclosed separately in the financial
statements where it is necessary to do so to provide
further understanding of the financial performance of the
Company. These are material items of income or expense
that have to be shown separately due to the significance
of their nature or amount.
w) Critical estimates and Judgements
The preparation of the financial statements in conformity
with Ind AS requires Management to make estimates,
judgements and assumptions. These estimates,
judgements and assumptions affect the application of
accounting policies and the reported amounts of assets
and liabilities, the disclosures of contingent assets and
liabilities at the date of the financial statements and
reported amounts of revenues and expenses during
the period. Accounting estimates could change from
period to period. Actual results could differ from those
estimates. Appropriate changes in estimates are made as
management becomes aware of changes in circumstances
surrounding the estimates. Changes in estimates are
reflected in the financial statements in the period in
which changes are made and, if material, their effects are
disclosed in the notes to the financial statements.
The areas involving critical estimates or judgements are:
1. Estimation of current tax expense and payable
2. Estimated Useful life of Depreciable assets /
intangible assets
3. Estimation of defined benefit obligation
4. Recognition of revenue
5. Recognition of deferred tax assets for carried
forward losses
6. Recoverability of advances/receivable
7. Evaluation of indicators for Impairment of assets
8. Valuation of inventories
9. Determination of cost for right-of-use assets and
lease term
10. Contingencies
11. Financial instruments
12. Fair value measurement of financial instruments
13. Share based payments
14. Depreciation on property, plant, equipment, and
amortisation of intangible assets
Estimates and judgements are continually evaluated.
They are based on historical experience and other factors,
including expectations of future events that may have a
financial impact on the Company and that are believed to
be reasonable under the circumstances.
x) Recent Accounting pronouncements
Ministry of Corporate Affairs ("MCA") notifies new
standards or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued
from time to time.
In August 2025, MCA notified the following amendments
to: 1. Ind AS 1, Presentation of Financial Statements,
applicable w.e.f April 1,2025 - The amendment relates to
classification of liabilities as current or non -current and
non-current liabilities with covenants. In the context of
classifying a liability as current, it removes the requirement
of existence of a right to defer settlement for at least 12
months after the reporting date, and instead requires that
the said right should exist on the reporting date and have
substance. The amendment also introduces guidance on
classification of liabilities with covenants. The Group has
no impact of these amendments in its classification criteria
of current and non-current liabilities.
Nature and purpose of reserves
Securities premium reserve:
The amount received in excess of face value of the equity shares is recognised in securities premium reserve . The reserve is utilised
in accordance with the provisions of companies Act 2013.
General Reserve:
General reserve is used from time to time to transfer the profits from retained earnings for appropriation purpose.
Retained Earnings:
Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other
distribution to share holders
Other Comprehensive Income:
Difference between the interest income on plan assets and the return actually achieved, any changes in the liabilities over the
year due to changes in actuarial assumptions or experience adjustments within the plans, are recognised in other comprehensive
income and subsequently not reclassified into statement of profit and loss.
Employee Stock Options Reserve:
The fair value of the equity-settled share based payment transactions is recognised in statement of profit and loss with corresponding
credit to Employee Stock Options Outstanding Account
Dues to micro and small enterprises:
With the promulgation of the Micro, Small and Medium Enterprises Development Act, 2006, the Company is required to identify
Micro and Small Suppliers and pay them interest on overdue beyond the specified period irrespective of the terms with the suppliers.
The Company has circulated letter to all suppliers seeking their status. Response from few suppliers has been received and is still
awaited from other suppliers. In view of this, the liability of interest calculated and the required disclosures made, in the below
table, to the extent of information available with the Company.
in continuous service for a minimum period of five years are eligible for gratuity benefits. The gratuity liability is calculated based on the
last drawn wages, in line with the definition of "wages", at the rate of 15 days' wages for each completed year of service or part thereof.
The gratuity scheme is a funded defined benefit plan. The Company makes contributions to an approved gratuity fund trust, which
in turn invests the funds with the Life Insurance Corporation of India (LIC). The liability in respect of gratuity is determined based
on actuarial valuation using the projected unit credit method at the reporting date. Remeasurements arising from experience
adjustments and changes in actuarial assumptions are recognised in Other Comprehensive Income.
*The Compensated Absences (Leave Obligations) covers the company's liability for earned leave which is classified as other long-term benefits.
The liabilities for earned leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render
the related service. They are therefore measured at the present value of expected future payments to be made in respect of services provided by
employees up to the end of the reporting period using the projected unit credit method. The benefit is discounted using the market yields at the
end of the reporting period that have terms approximating to the terms of the related obligations
**Post-employment obligations- Gratuity (Defined benefit plan)
The Company provides gratuity benefits to its employees in accordance with the New Labour Code (Code on wages,2019), (to the
extent notified) and the applicable provisions of the Payment of Gratuity Act, 1972, as amended from time to time. Employees who are
The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this
is unlikely to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined
benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated
with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit
liability recognised in the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not
change compared to the prior period.
The Company has purchased an insurance policy to provide for payment of gratuity to the employees. Every year, the insurance
company carries out a funding valuation based on the latest employee data provided by the Company. Any deficit in the assets
arising as a result of such valuation is funded by the Company.
Risk exposure
Through its defined benefit plans, the company is exposed to a number of risks, the most significant of which are detailed below:
Asset Volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets under
perform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and
in government securities. A portion of the fund is invested in equity securities and in alternative investments which have low
correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute
to the plan deficit. The company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level
is maintained at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. The company intends to
maintain the investment mix in the continuing years.
Changes in bond yields: A decrease in bond yields will increase plan liabilities, although this will be partially off-set by an increase
in the value of the plan's bond holdings.
Inflation risk: In the pension plans, the pensions in payment are not linked to inflation, so this is a less material risk.
Life expectancy: The pension obligation are to provide benefits for the life of the member, so increase in life expectancy will
result in an increase in the plan's liabilities. This is particularly significant where inflationary increases result in higher sensitivity to
changes in life expectancy.
The company ensures that the investment positions are managed within an asset-liability matching (ALM) framework that has been
developed to achieve long term investments that are in line with the obligations under the employee benefit plans. Within this
framework, the company's ALM objective is to match the assets to the pension obligations by investing in long term fixed interest
securities with maturities that match the benefit payments as they fall due and in the appropriate currency.
The company actively monitors how the duration and the expected yield of the investments are matching the expected cash
outflows arising from the employee benefit obligations. The company has not changed the processes used to manage its risks
from previous periods.
Interest Rate : A decrease in bond yields will increase plan liabilities, although this will be partially off-set by an increase in the
value of the plan's bond holdings.
Investment Risk: If actual return on plan assets as below this rate , it will create a plan deficit
Salary Risk: Higher than expected increase in salaries increases the defined benefit obligations
Demographic Risk: The present value of defined benefit plan liability is calculated by reference to the best estimate of the mortality
of plan participants both during and after their employment . An increase in the life expectancy of the plan participants will increase
the plans liability
Other Long term benefit plans
(ii) Compensated Absences
The Company provides for accumulation of compensated absences in respect of certain categories of employees. These employees
can carry forward a portion of the unutilised compensated absences and utilise them in future periods or receive cash in lieu there
of as company policy
Actuarial valuation for compensated absences is done as at the year end and provision is made as per company policy with
corresponding (gain)/Charge to the statement of profit and loss amounting to C144.06 lakhs (March 31,2025 : C179.10 lakhs)
(i) Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a)
recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial
statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified
its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows
underneath the table.
Level 3: Inputs are not based on observable market data( unobservable inputs).
There were no transfers between Level 1 and 2 in the periods.
The management considers that the carrying amount of financial assets and financial liabilities carried at amortised cost approximates
their fair value.
Note 24: Financial Risk management
The Company's board of directors has overall responsibility for the establishment and oversight of the Company's risk management
framework. The board of directors has established the Risk Management Committee, which is responsible for developing and
monitoring the Company's risk management policies. The committee reports to the board of directors on its activities.
(ii) Financial Instruments and Cash Deposits
The company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have
good credit ratings. The company does not expect any loss from non performance by these counter parties and does not have
any significant concentration of exposure to specific industry sectors or specific country risks
(B) Liquidity Risk:
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding
through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions.
Due to dynamic nature of the underlying business, company treasury maintains flexibility in funding by maintaining availability
under committed credit lines.
Management monitors rolling forecasts of the company's liquidity position(comprising the undrawn borrowing facilities
below) and cash and cash equivalents on the basis of expected cash flows. This is generally carried out at local level in the
company in accordance with practice and limits set by the company. These limits vary by location to take into account the
liquidity of the market in which the entity operates. In addition, the company's liquidity management policy involves projecting
cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet
liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.
The company's risk management is carried out by the management. Company treasury identifies, evaluates and hedges financial risk
in close cooperation with the company's operating units. The management provides written principles for overall risk management,
as well as policies covering specific areas, such as foreign exchange risk, credit risk, and investment of excess liquidity.
(A) Credit Risk Management
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 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.
(i) Trade Receivables
The company has used an expected credit loss (ECL) model for assessing the impairment loss. For the purpose , the company
uses a provision matrix to compute the expected credit loss amount. The provisions matrix takes into account external and
internal risk factors and historical data of credit losses from various customers
C) 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, credit, liquidity 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.
(i) Foreign Currency Risk
The Company's foreign exchange risk arises from its foreign operations, foreign currency revenues and expenses, (primarily
in US Dollars). As a result, if the value of the Indian rupee appreciates relative to these foreign currencies, the Company's
revenues and expenses measured in Indian rupees may decrease exchange rates in respect of its highly probable forecasted
transactions and recognised assets and liabilities
Note 25: Capital Management
(a) Risk management
The Company's objective when managing capital are to:
1. Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and
benefits for other stakeholders, and
2. Maintain an optimal capital structure to reduce the cost of capital
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce debts
Consistent with others in the industry, the company monitors capital on the basis of the following gearing ratio: -Net debt (total
borrowings net of cash and cash equivalents) divided by total equity (as shown in the balance sheet)
Note 26: Segment Information
a) The Company is engaged in a single operating segment of providing Research and Development services. Accordingly, there
are no additional disclosures required under Ind AS 108 'Operating Segments' other than those already provided in the financial
statements.
b) Segment information for secondary segment reporting ( by geographical segment)
The Company has reportable geographical segments based on location of its customers:
(i) India-The company provides Analytical Services.
(ii) USA -The company provides Analytical Services.
(iii) Europe-The company provides Analytical Services.
(iv) Rest of the world -The company provides Analytical Services.
Note:
The EPS (Basic and Diluted) of the corresponding periods have been adjusted appropriately for the bonus element in respect of
rights issue made..There is no dilution to the Basic Earnings per share as there are no dilutive potential equity shares
Note 30: Impairment of the Investment in Suven Neurosciences, Inc.:
The company stay focused on clinical development of NCEs targeting various Neurodegenerative diseases under Central Nervous
System disorders and keep developing protocols for continuing the studies on clinical development programs for various indications,
for which the company has invested $116.74 Mn (C912.85 crores) since 2015 in Suven Neurosciences, Inc., the wholly owned
subsidiary in USA. and the investment there on continue to remain unimpaired.
Note 31: Preferential Issue
Preferential Issue: The Board of Directors of the Company approved the issue of 6,40,02,999 convertible warrants on a preferential
basis to 23 allottees in its meeting held on 13th May, 2025, in accordance with the provisions of the Companies Act, 2013 and the
SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. Subsequently, shareholders of the Company approved the
issue of convertible warrants in their meeting held on 05th June, 2025.
Each warrant is convertible into one equity share of face value C1/- at an exercise price of C134/- per share, within a period of 18
months from the date of allotment
Out of the above, 4,54,32,866 warrant holders have paid the full consideration and their warrants have been converted into equity
shares of the Company. The remaining 1,85,70,133 warrants are yet to be converted into equity shares; the holders of these warrants
have paid 62.5% of the consideration and the balance 37.5% amounting to C93.31 Crores remains receivable as at the balance sheet
date. Accordingly, the total consideration received as at the balance sheet date aggregates to C764.33 Crores. As per the notice
to shareholders dated 13th May 2025, the warrant holders have the option to convert their warrants into equity shares within 18
months from the date of allotment of the share warrants.
Note : The utilisation figures reported above are based on the funds actually received as at the 31st March 2026 (C764.33 Crores).
The balance consideration of C93.31 Crores, receivable from holders of the remaining 1,85,70,133 warrants, has not been considered
for utilisation purposes.
Note 32: Employee Stock Option Scheme (ESOP 2020):
The board of directors/ compensation committee has approved the Suven Life Stock Option Scheme (ESOP) 2020 for issue of stock
options to eligible employees of the Company. According to the Scheme, the options granted vest within a period of five years,
subject to the terms and conditions specified in the scheme. Options granted shall vest so long as the employee continues to be in
*Note : The Company is currently in the research and development (R&D) and the revenue from operations are related to services rendered leveraging
the R&D capabilities. They are not adequate to cover the entire expenses and hence these ratios cannot be meaningfully comparable. During the
year, funds raised through a preferential issue in earlier periods were temporarily invested in fixed deposits and subsequently withdrawn to meet
R&D expenses. These factors, along with the increased R&D expenditure and absence of borrowings, have collectively resulted in significant variances
across several financial ratios.
Note 34 : Other statutory information
(i) The Company does not have any Benami property and no proceedings have been initiated or are pending against the Company
for holding any Benami property.
(ii) The Company does not have any transactions with companies struck off.
(iii) The Company does not have any charges or satisfaction of charges pending for registration with the Registrar of Companies
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 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 Group 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
Note 35 : Previous year figures have been regrouped and reclassified wherever considered necessary to conform to the current
year's classifications. The impact of such regrouping/reclassification is not material to the financial statements.
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