Provisions are recognised when the Company hasa present obligation (legal or constructive) as aresult of a past event, it is probable that an outflowof resources embodying economic benefits willbe required to settle the obligation and a reliableestimate can be made of the amount of the obligation.When the Company expects some or all of a provisionto be reimbursed, for example, under an insurancecontract, the reimbursement is recognised as aseparate asset, but only when the reimbursement isvirtually certain. The expense relating to a provisionis presented in the statement of profit and loss net ofany reimbursement.
If the effect of the time value of money is material,provisions are discounted using a current pre-tax rate
that reflects, when appropriate, the risks specific tothe liability. When discounting is used, the increase inthe provision due to the passage of time is recognisedas a finance cost.
A contract is considered to be onerous when theexpected economic benefits to be derived by theCompany from the contract are lower than theunavoidable cost of meeting its obligations underthe contract. The provision for an onerous contractis measured at the present value of the lower of theexpected cost of terminating the contract and theexpected net cost of continuing with the contract.Before such a provision is made, the Companyrecognises any impairment loss on the assetsassociated with that contract.
Provision in respect of loss contingencies relating toclaims, litigations, assessments, fines and penaltiesare recognised when it is probable that a liabilityhas been incurred and the amount can be estimatedreliably. Contingent liabilities are recognised whenthere is a possible obligation arising from pastevents, the existence of which will be confirmed onlyby the occurrence or non-occurrence of one or moreuncertain future events not wholly within the controlof the Company or a present obligation that arisesfrom past events where it is either not probable thatan outflow of resources will be required to settle theobligation or a reliable estimate of the amount cannotbe made.
Cash and cash equivalents in the balance sheetcomprises of cheques, cash at banks and on hand andshort-term deposits with an original maturity of threemonths or less, which are subject to an insignificantrisk of changes in value. For the purpose of thestatement of cash flows, cash and cash equivalentsconsist of cash and short-term deposits, as definedabove, net of outstanding bank overdrafts as theyare considered an integral part of the Company'scash Management.
Borrowing costs consist of interest and othercosts that an entity incurs in connection with theborrowing of funds. Borrowing cost also includes
exchange differences to the extent regarded as anadjustment to the borrowing costs. Borrowing costsdirectly attributable to the acquisition, constructionor production of an asset that necessarily takes asubstantial period of time to get ready for its intendeduse or sale are capitalised as part of cost of the asset.All other borrowing costs are expensed in the periodin which they occur.
The Company assesses, at each reporting date,whether there is an indication of impairment. If anyindication exists, or when annual impairment testingfor an asset is required, the Company estimates theasset's recoverable amount. An asset's recoverableamount is the higher of an asset's or cash-generatingunit's (CGU) fair value less costs of disposal and itsvalue in use. Recoverable amount is determinedfor an individual asset, unless the asset does notgenerate cash inflows that are largely independentof those from other assets or groups of assets. Whenthe carrying amount of an asset or CGU exceeds itsrecoverable amount, the asset is considered impairedand is written down to its recoverable amount.
In assessing value in use, the estimated future cashflows are discounted to their present value usinga pre-tax discount rate that reflects current marketassessments of the time value of money and therisks specific to the asset. In determining fair valueless costs of disposal, recent market transactions aretaken into account. If no such transactions can beidentified, an appropriate valuation model is used.These calculations are corroborated by valuationmultiples, quoted share prices for publicly tradedcompanies or other available fair value indicators.
The Company bases its impairment calculation ondetailed budgets and forecast calculations, which areprepared separately for each of the Company's CGUsto which the individual assets are allocated. Thesebudgets and forecast calculations generally cover aperiod of five years. Impairment losses of continuingoperations, are recognised in the statement of profitand loss.
An assessment is made at each reporting dateto determine whether there is an indication thatpreviously recognised impairment losses no longerexist or have decreased. If such indication exists, theCompany estimates the asset's or CGU's recoverable
amount. A previously recognised impairmentloss is reversed only if there has been a changein the assumptions used to determine the asset'srecoverable amount since the last impairment losswas recognised. The reversal is limited so that thecarrying amount of the asset does not exceed itsrecoverable amount, nor exceed the carrying amountthat would have been determined, net of depreciation,had no impairment loss been recognised for the assetin prior periods/ years. Such reversal is recognisedin the statement of profit and loss unless the assetis carried at a revalued amount, in which case, thereversal is treated as a revaluation increase.
Goodwill is tested for impairment annually and whencircumstances indicate that the carrying value may beimpaired. Impairment is determined for goodwill byassessing the recoverable amount of each CGU (orGroup of CGUs) to which the goodwill relates. Whenthe recoverable amount of the CGU is less than itscarrying amount, an impairment loss is recognised.Impairment losses relating to goodwill cannot bereversed in future periods.
A financial instrument is any contract that givesrise to a financial asset of one entity and a financialliability or equity instrument of another entity.
All financial assets are recognised initially at fair valueplus, in the case of financial assets not recorded at fairvalue through profit or loss, transaction costs that areattributable to the acquisition of the financial asset.Purchases or sales of financial assets that requiredelivery of assets within a time frame established byregulation or convention in the market place (regularway trades) are recognised on the trade date, i.e., thedate that the Company commits to purchase or sellthe asset.
Any financial instrument, which does not meet thecriteria for categorization at amortized cost or atFVTOCI (fair value through other comprehensiveincome), is classified at FVTPL (fair value throughprofit and loss). In addition, the company may electto designate a debt instrument, which otherwisemeets amortized cost or FVTOCI criteria, at FVTPL.
However, such election is allowed only if doing soreduces or eliminates a measurement or recognitioninconsistency (referred to as 'accounting mismatch').The Company has not designated any debt instrumentat FVTPL. Debt instruments included within the FVTPLcategory are measured at fair value with all changesrecognized in the statement of profit and loss.
All equity investments in subsidiaries are measured atcost less impairment. All equity investments in scopeof Ind AS 109 - Financial Instruments are measuredat fair value. Equity investments which are held fortrading are classified as FVTPL. For all other equityinvestments, the Company may make an irrevocableelection to present in OCI subsequent changes infair value. The Company makes such election on aninstrument by instrument basis. The classification ismade on initial recognition and is irrevocable.
If the Company decides to classify an equityinstrument at FVOCI, then all fair value changes onthe instrument, excluding dividends, are recognisedin OCI. There is no recycling of amounts from OCIto statement of profit and loss, even on sale ofinvestment. However, the Company may transferthe cumulative gain/loss within equity. Equityinstruments included within the FVTPL category aremeasured at fair value with all changes recognised inthe statement of profit and loss.
A financial asset (or, where applicable, a part of afinancial asset or part of a group of similar financialassets) is primarily derecognised (i.e. removed fromthe Company's balance sheet) when:
i) the rights to receive cash flows from the assethave expired, or
ii) the Company has transferred its rights to receivecash flows from the asset, and the Companyhas transferred substantially all the risks andrewards of the asset, or the Company hasneither transferred nor retained substantiallyall the risks and rewards of the asset, but hastransferred control of the asset.
In accordance with Ind AS 109- Financial instruments,the Company applies expected credit loss (ECL) model
for measurement and recognition of impairment losson the following financial assets:
(i) Financial assets that are debt instruments, andare measured at amortised cost, e.g. loans,deposits, debt securities, etc.
(ii) Trade receivables that result from transactionsthat are within the scope of Ind AS 115- Revenuefrom contracts with customers.
The Company follows 'simplified approach' forrecognition of impairment loss allowance for tradereceivables. The application of simplified approachdoes not require the Company to track changes incredit risk. Rather, it recognises impairment lossallowance based on lifetime ECLs at each reportingdate, right from its initial recognition.
For recognition of impairment loss on other financialassets and risk exposure, the Company determineswhether there has been a significant increase in thecredit risk since initial recognition. If credit risk hasnot increased significantly, 12-month ECL is used toprovide for impairment loss. However, if credit riskhas increased significantly, lifetime ECL is used. If, ina subsequent period, credit quality of the instrumentimproves such that there is no longer a significantincrease in credit risk since initial recognition,then the entity reverts to recognising impairmentloss allowance based on 12-month ECL (simplifiedapproach). Lifetime ECL are the expected creditlosses resulting from all possible default eventsover the expected life of a financial instrument. The12-month ECL is a portion of the lifetime ECL whichresults from default events that are possible within12 months after the reporting date.
ECL is the difference between all contractual cashflows that are due to the Company in accordancewith the contract and all the cash flows that theentity expects to receive (i.e., all cash shortfalls),discounted at the original EIR (effective interest rate).When estimating the cash flows, an entity is requiredto consider:
(i) All contractual terms of the financial instrument(including prepayment, extension, call andsimilar options) over the expected life of thefinancial instrument. However, in rare caseswhen the expected life of the financial instrumentcannot be estimated reliably, then the entity is
required to use the remaining contractual termof the financial instrument
(ii) Cash flows from the sale of collateral held orother credit enhancements that are integral tothe contractual terms.
As a practical expedient, the Company uses a provisionmatrix to determine impairment loss allowance onportfolio of its trade receivables.The provision matrixis based on its historically observed default ratesover the expected life of the trade receivables andis adjusted for forward-looking estimates. At everyreporting date, the historical observed default ratesare updated and changes in the forward-lookingestimates are analysed.
ECL impairment loss allowance (or reversal)recognized during the period is recognized asincome/ expense in the statement of profit andloss. This amount is reflected under the head otherexpenses/other income in the statement of profitand loss. ECL is presented as an allowance, i.e., asan integral part of the measurement of those assetsin the balance sheet. The allowance reduces the netcarrying amount. Until the asset meets write-offcriteria, the Company does not reduce impairmentallowance from the gross carrying amount.
For assessing increase in credit risk and impairmentloss, the Company combines financial instruments onthe basis of shared credit risk characteristics with theobjective of facilitating an analysis that is designedto enable significant increases in credit risk to beidentified on a timely basis. The Company does nothave any purchased or originated credit-impaired(POCI) financial assets, i.e., financial assets which arecredit impaired on purchase/ origination.
Financial liabilities are classified, at initial recognition,as financial liabilities at fair value through profitor loss, loans and borrowings, payables, or asderivatives designated as hedging instruments inan effective hedge, as appropriate. All financialliabilities are recognised initially at fair value and,in the case of loans and borrowings and payables,net of directly attributable transaction costs. TheCompany's financial liabilities include trade and
other payables, loans and borrowings includingbank overdrafts, financial guarantee contracts andderivative financial instruments.
The measurement of financial liabilities depends ontheir classification, as described below:
Financial liabilities at fair value through profit or lossinclude financial liabilities designated upon initialrecognition at fair value through profit or loss.
Financial liabilities designated upon initialrecognition at fair value through profit or loss aredesignated as such at the initial date of recognition,and only if the criteria in Ind AS 109 are satisfied.For liabilities designated as FVTPL, fair value gains/losses attributable to changes in own credit riskare recognized in OCI. These gains/ loss are notsubsequently transferred to statement of profitand loss. However, the Company may transfer thecumulative gain or loss within equity. All otherchanges in fair value of such liability are recognisedin the statement of profit and loss.
A financial liability is derecognised when theobligation under the liability is discharged orcancelled or expires. When an existing financialliability is replaced by another from the samelender on substantially different terms, or the termsof an existing liability are substantially modified,such an exchange or modification is treated asthe derecognition of the original liability and therecognition of a new liability. The difference in therespective carrying amounts is recognised in thestatement of profit and loss.
This is the category most relevant to the Company.After initial recognition, interest-bearing loansand borrowings are subsequently measured atamortised cost using the EIR method. Gains andlosses are recognised in profit or loss when theliabilities are derecognised as well as through the EIRamortisation process.
Amortised cost is calculated by taking into accountany discount or premium on acquisition and feesor costs that are an integral part of the EIR. TheEIR amortisation is included as finance costs in thestatement of profit and loss.
The Company determines classification of financialassets and liabilities on initial recognition. Afterinitial recognition, no reclassification is made forfinancial assets which are equity instruments andfinancial liabilities. For financial assets which aredebt instruments, a reclassification is made only ifthere is a change in the business model for managingthose assets. Changes to the business model areexpected to be infrequent. The Company's seniorManagement determines the change in the businessmodel as a result of external or internal changeswhich are significant to the Company's operations.Such changes are evident to the external parties.A change in the business model occurs when theCompany either begins or ceases to perform anactivity that is significant to its operations. If theCompany reclassifies financial assets, it applies thereclassification prospectively from the reclassificationdate which is the first day of the immediately nextreporting period following the change in businessmodel.The Company does not restate any previouslyrecognised gains, losses (including impairment gainsor losses) or interest.
Financial assets and financial liabilities are offset andthe net amount is reported in the balance sheet ifthere is a currently enforceable legal right to offsetthe recognised amounts and there is an intention tosettle on a net basis, to realise the assets and settlethe liabilities simultaneously.
The Company uses derivative financial instruments,such as forward currency contracts to hedge itsforeign currency risks. Such derivative financialinstruments are initially recognised at fair value onthe date on which a derivative contract is entered intoand are subsequently re-measured at fair value.
Derivatives are carried as financial assets when thefair value is positive and as financial liabilities whenthe fair value is negative. The forward contracts thatmeet the definition of a derivative under Ind AS 109are recognised in the statement of profit and loss.Any gains or losses arising from changes in the fairvalue of derivatives are taken directly to profit or loss.
s. Dividend distribution to equity holders of theCompany
The Company recognises a liability to make dividenddistribution to equity holders when the distributionis authorised and the distribution is no longer at thediscretion of the Company. As per the Corporate lawsin India, a final dividend distribution is authorisedwhen it is approved by the shareholders whereasfor interim dividend when authorised by board ofdirectors of the Company. A corresponding amountis recognised directly in equity. Non cash distributionare measured at fair value of the assets distributedwith fair value re-measurement recognised directlyin equity.
t. Discontinued Operations
A discontinued operation is a 'component' of theCompany's business that represents a separate line ofbusiness that has been disposed of or is held for sale,or is a subsidiary acquired exclusively with a viewto resale. Classification as a discontinued operationoccurs upon the earlier of disposal or when the
operation meets the criteria to be classified as held forsale. The Company considers the guidance in Ind AS105 Non-Current assets held for sale and discontinuedoperations to assess whether a divestment assetwould qualify the definition of 'component' prior toclassification into discontinued operation
u. Ministry of Corporate Affairs ("MCA") notifies newstandards or amendments to the existing standardsunder Companies (Indian Accounting Standards)Rules as issued from time to time.
For the year ended March 31,2025, MCA has notifiedInd AS - 117 Insurance Contracts and amendmentsto Ind AS 116 - Leases, relating to sale and leasebacktransactions, applicable to the Company w.e.f.April 1, 2024. The Company has reviewed the newpronouncements and based on its evaluation hasdetermined that it does not have any significantimpact in its financial statements
Goodwill is tested for impairment annually and when circumstances indicate that the carrying value may be impaired.The recoverable amounts of the cash generating units (CGU) have been assessed using a value-in-use model. Value-in-use is generally calculated as the net present value of the projected post-tax cash flows plus a terminal value of theCGU to which the goodwill is allocated. Initially, a post-tax discount rate is applied to calculate the net present value ofthe post-tax cash flows.
Key assumptions upon which the company has based its determinations of value-in-use include :
a) Estimated cash flows for five years, based on management's projections.
b) A terminal value arrived at by extrapolating the last forecasted year cash flows to perpetuity, using a constant long¬term growth rate ranging from 0-2%.This long term growth rate takes into consideration external macroeconomicsources of data. Such long-term growth rate considered does not exceed that of the relevant business andindustry sector.
c) The after tax discount rates used are based on the Company's weighted average cost of capital.
d) The after tax discount rate used range from 15%-18% for various cash generating units.
The Company believes that any reasonably possible change in the key assumptions on which a recoverable amountis based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the cash¬generating unit.
Note:
1. The Board of Directors of the Company at its meeting held on August 10, 2024 approved further investment inGLS Pharma Limited through acquisition of 590,361 equity shares from the selling shareholders for an aggregateconsideration of ' 225 (constituting 49% of the equity share capital of GLS) following which GLS has become thewholly owned subsidiary of the Company with effect from October 25, 2024.
2. Investment of '4.1(March 31,2023 '4.1) on account of fair valuation of corporate guarantee given by the Companyon behalf of Lyfius Pharma Private Limited, a wholly - owned subsidiary of Aurobindo Antibiotics Private Limited
3. Provision made during the year is pertains to investements in Tergene Biotech Private Limited
"Investments are tested for impairment annually and when circumstances indicate that the carrying value may beimpaired. Impairment is determined by assessing the recoverable amount of each investment. When the recoverableamount of the investment is less than its carrying amount, an impairment loss is recognised.
The recoverable amounts of the above investments have been assessed using a value-in-use model. Value in use isgenerally calculated as the net present value of the projected post-tax cash flows plus a terminal value of the business.Initially, a post-tax discount rate is applied to calculate the net present value of the post-tax cash flows.
a) Estimated cash flows based on internal budgets and industry outlook for a period of five years and a terminal growthrate thereafter.
c) The after tax discount rates used reflect the current market assessment of the risks specific to the investment, thediscount rate is estimated based on the weighted average cost of capital for respective investment. After tax discountrate used range from 15%-18%
* in respect of above matters, future cash outflows in respect of contingent liabilities are determinable only by the occurrence ornon occurrence of one or more uncertain future events not wholly within the control of the Company.The Company is contestingthese demands (including certain demands which are not treated as contingent based on assessment) and the Management,including its advisors, believe that its position will likely be upheld in the appellate process. No expense has been accruedin the stand alone financial statements for the demands raised. The Management believes that the ultimate outcome of thisproceeding will not have a material adverse effect on the Company’s financial position and results of operations. The abovedoes not include show cause notices received by the Company against which no demand has been levied by the department.
A The Company is involved in disputes, claims, Governmental and /or regulatory inspection, inquires, including patents andcommercial maters that arise from time to time in the ordinary course of business. The same are subject to uncertain futureevents not wholly within the control of the Company. The Management does not expect the same to have materially adverseeffect on its financial position, as it believes the likely hood of any loss is not probable.
Corporate guarantee (includes Debt shortfall undertaking) given by the Company are in relation to its subsidiarieswhich aggregate to ' 9,220 (March 31, 2024'17,630). Subsidiaries have availed loan against the said corporateguarantee which have been considered as contingent liabilities (refer note 37).
In addition to the above, the Company along with a subsidiary is a party to certain pending disputes with regulatoryauthorities relating to allotment of certain lands that have taken place in earlier years. During the year 2018¬19, pursuant to the order of the Honorable Appellate Tribunal, land belonging to APL Research Centre Limited,subsidiary, which were attached earlier, were released after placing a fixed deposit of '131.6 with a bank as a securitydeposit with Enforcement Directorate. While the disposal of the cases are subject to final judgement from theCentral Bureau of Investigation (CBI) Special Court, in the assessment of the Management and as legally advised,the allegations are unlikely to have a significant material impact on the financial statements of the Company.
This defined benefit plan exposes the Company to actuarial risk, such as investment risk, interest rate risk,longevity risk and salary risk.
Investment Risk - The present value of the defined benefit plan liability denominated in Indian Rupee iscalculated using a discount rate determined by reference to market yields at the end of the reporting periodon government bonds.
Interest Risk - A decrease in the bond interest rate will increase the plan liability; however, this will be partiallyoffset by an increase in the return on the plan Assets.
Longevity risk - The present value of the defined benefit plan liability is calculated by reference to the bestestimate of the mortality of plan participants both during and after their employment. An increase in the lifeexpectancy of the plan participants will increase the plan's liability.
Salary risk- The present value of the defined benefit plan liability is calculated by reference to the future salariesof plan participants. As such, an increase in the salary of the plan participants will increase the plan's liability.
The plan is funded with Life Insurance Corporation in the form of a qualifying insurance policy. The followingtables summarise the components of net benefit expense recognised in the statement of profit and loss, thefund status and amounts recognised in the balance sheet:
In respect of Gratuity, a defined benefit plan, the plan is funded with Life Insurance Corporation in the formof a qualifying insurance policy governed by the payment of Gratuity Act, 1972. Under the Gratuity Act, Everyemployee who has completed five years or more of service is entitled to gratuity on departure at 15 days lastdrawn salary for each completed year of service or part thereof in excess of six months. The level of benefitprovided depends on the member's length of service and salary at the time of retirement/termination age.Provision for gratuity is based on actuarial valuation done by an independent actuary as at the year end. Eachyear, the Company reviews the level of funding in gratuity fund and decides its contribution. The Companyaims to keep annual contributions relatively stable at a level such that the fund assets meets the requirementsof gratuity payments in short to medium term.
There have been no transfers between Level 1 andLevel 2 or vice-versa in 2024-25 and no transfers ineither direction in 2023-24.
The Company's board of directors has overallresponsibility for the establishment and oversightof the Company's risk management framework.The board of directors has established the RiskManagement Committee, which is responsible fordeveloping and monitoring the Company's riskmanagement policies. The committee reports to theboard of directors on its activities.
The Company's risk management policies areestablished to identify and analyse the risks beingfaced by the Company, to set appropriate risk limitsand controls and to monitor risks and adherenceto limits. Risk management policies and systemsare reviewed regularly to reflect changes in marketconditions and the Company's activities. TheCompany, through its training and managementstandards and procedures, aims to maintain adisciplined and constructive control environmentin which all employees understand their rolesand obligations.
The Company's audit committee overseeshow management monitors compliance withthe Company's risk management policies andprocedures, and reviews the adequacy of the riskmanagement framework in relation to the risks facedby the Company. The audit committee is assisted inits oversight role by internal audit. Internal auditundertakes both regular and ad hoc reviews of riskmanagement controls and procedures, the result ofwhich are reported to the audit committee.
The Company is exposed primarily to credit risk,liquidity risk and market risk (including fluctuationsin foreign currency exchange rates , interest rate riskand other price risk). The Company uses derivativefinancial instruments such as forwards to minimiseany adverse effect on its financial performance.
Credit risk is the risk that counterparty will notmeet its obligations under a financial instrument orcustomer contract, leading to a financial loss. Creditrisk encompasses of both, the direct risk of defaultand the risk of deterioration of credit worthiness as
well as concentration of risks. Credit risk is controlledby analysing credit limits and credit worthinessof customers on a continuous basis to whom thecredit has been granted after obtaining necessaryapprovals for credit. Financial instruments that aresubject to concentrations of credit risk principallyconsist of trade receivables, investments, derivativefinancial instruments, cash and cash equivalents,loans and other financial assets. The Companyestablishes an allowance for doubtful receivables andimpairment that represents its estimate of incurredlosses in respect of trade and other receivablesand investments.
The Company's exposure to credit risk is influencedmainly by the individual characteristics of eachcustomer. However, the Management also evaluatesthe factors that may influence the credit risk of itscustomer base, including the default risk and countryin which the customers operate. The Managementhas established a credit policy under which eachnew customer is analysed individually for creditworthiness before the Company's standard paymentand delivery terms are offered. The Company'sreview includes external ratings, if available, financialstatements, credit agency information, industryinformation and in some case bank references.Sales limits are established for each customer andreviewed quarterly.
The Company's receivables turnover is quick andhistorically, there was no significant default onaccount of trade and other receivables.The Companyassesses at each reporting date whether a financialasset or a group of financial assets is impaired.Expected credit losses are measured at an amountequal to the 12 months expected credit losses or at anamount equal to the life time expected credit lossesif the credit risk on the financial asset has increasedsignificantly since initial recognition. The Companyhas used a practical expedient by computing theexpected credit loss allowance for trade receivablesbased on a provision matrix. The provision matrixtakes into account historical credit loss experienceand is adjusted for forward looking information. Themaximum exposure to credit risk at the reporting dateis the carrying value of trade and other receivables.The Company does not hold collateral as security.The Company evaluates the concentration of risk withrespect to trade receivables as low, as its customersare located in several jurisdictions and operate inlargely independent markets.
Loan given to subsidiaries
Credit risk related to loan given to subsidiaries is not expected to be material.
Other financial assets
The Company maintains exposure in cash and cash equivalents and derivative instruments with financial institutions.The Company has loan receivables outstanding from its wholly owned subsidiaries amounting to '16,506.6 (March31, 2024 : ' 14,261.4 ).
The Company's maximum exposure to credit risk as at March 31, 2025 and March 31, 2024 is the carrying value ofeach class of financial assets.
ii. Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated withits financial liabilities that are settled by delivering cash or another financial asset. The Company's approach tomanaging liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities whenthey are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damageto the Company's reputation.
The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available foruse as per requirements.The Company manages liquidity risk by maintaining adequate reserves, banking facilitiesand reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching thematurity profiles of financial assets and liabilities.The following are the remaining contractual maturities of financialliabilities at reporting date:
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because ofchanges in market prices. Such changes in the values of financial instruments may result from changes in theforeign currency exchange rates, interest rates, credit, liquidity and other market changes.The Company's exposureto market risk is primarily on account of foreign currency exchange rate risk and interest rate risk.
The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit orloss, where any transaction references more than one currency or where assets / liabilities are denominatedin a currency other than the functional currency of the Company.The Company is subject to foreign exchangerisk primarily due to its foreign currency revenues, expenses and borrowings. Considering the countriesand economic environment in which the Company operates, its operations are subject to risks arising fromfluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar, Euroand GBP against the functional currency of the Company. The Company, as per its risk management policy,uses derivative instruments primarily to hedge foreign exchange. The Company has a treasury team whichevaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risksand advises the Management of any material adverse effect on the Company. It hedges a part of these risksby using derivative financial instruments in line with its risk management policies.The information on foreignexchange risk from derivative instruments and non derivative instruments is as follows:
I nterest rate sensitivity analysis: The sensitivity analysis below has been determined based on the exposure tointerest rates at the end of the reporting period for floating rate borrowings only. For floating rate borrowings, theanalysis is prepared assuming the amount of the borrowing outstanding at the end of the reporting period wasoutstanding for the entire year. A 0.5% increase or decrease is used when reporting interest rate risk internallyto key management personnel and represents management's assessment of the reasonably possible change ininterest rates.
If interest rates had been 0.5% higher/lower and all other variables were held constant, the Company's Profit forthe year ended March 31,2025 would decrease/increase by ' 226.3, (March 31,2024: '140.9). Equity net of tax is Rs167.6 (March 31,2024'111.2).This is mainly attributable to the Company's exposure to interest rates on its variablerate borrowings.
Exposure to market risk with respect to commodity prices primarily arises from the Company's purchase of activepharmaceutical ingredients and other raw material components for its products. These are commodity products,whose prices may fluctuate significantly over short periods of time. The prices of the Company's raw materialsgenerally fluctuate in line with commodity cycles, although the prices of raw materials used in the Company'sbusiness are generally more volatile. Cost of raw materials forms the largest portion of the Company's cost ofrevenues. Commodity price risk exposure is evaluated and managed through operating procedures and sourcingpolicies. As of March 31, 2025, the Company has not entered into any derivative contracts to hedge exposure tofluctuations in commodity prices.
The board at its meeting held on February 9, 2023 and April 01, 2023 had approved the transfer of certain activepharmaceutical ingredients (API) business units to its wholly owned subsidiary, Apitoria Pharma Private Limited(APPL) (formerly known as Auro Pharma India Private Limited") on a going concern basis by way of a slump salew.e.f April 1, 2023 subject to certain conditions precedent including receipt of requisite approval. Consequent toreceipt of such approvals, the Company and APPL entered into a amended agreement to make the transfer effectivefrom October 1, 2023.
The Company obtained approval from the Hyderabad bench of National Company Law Tribunal on April 29,2024 for the scheme of amalgamation between Mviyes Pharma Ventures Private Limited (Transferor Company I),Auronext Pharma Private Limited (Transferor Company II), (both wholly owned subsidiaries) and Aurobindo PharmaLimited (Transferee Company) with an appointed date of April 01, 2023. The transaction being a common controlbusiness combination, has been accounted under the Pooling of Interest Method in accordance with Ind AS 103 -Business combination.
44 The Board of Directors, at its meeting held on July 18, 2024 approved a proposal to buyback 5,136,986 fully paid-up equity shares amounting to ' 7,500.0 million [Buyback Size, excluding transaction costs and applicable taxes]at a price of ' 1,460 per share from the eligible equity shareholders. The buyback was offered to all eligible equityshareholders including the promoters and promoter group of the Company on proportionate basis through the"Tender offer" route in accordance with Securities and Exchange Board of India [Buyback of Securities] Regulations,2018, as amended and other applicable laws. The Buyback period was from July 18, 2024 to August 28, 2024. TheCompany had bought back and extinguished 5,136,986 equity shares, comprising of 0.88% of pre-buyback paidup equity share capital of the Company. The buyback resulted in a cash outflow of ' 9,302.4 million [includingapplicable taxes and transaction costs]. The Company has utilized its Securities Premium and General Reserve forBuyback of shares. In accordance with Section 69 of the Companies Act, 2013, the Company has credited "CapitalRedemption Reserve" with an amount of to ' 5.1 million, being amount equivalent to the face value of the EquityShares bought back as an appropriation from General Reserve
(i) No proceedings have been initiated on or are pending against the Company for holding benami property underthe Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder
(ii) The Company is not declared a willful defaulter by any bank or financial Institution or other lender.
(iii) There is no income surrendered or disclosed as income during the current or previous year in the taxassessments under the Income Tax Act, 1961, that has not been recorded in the books of accounts
(iv) The Company has no transaction with the companies struck off under the Companies Act, 2013 or CompaniesAct, 1956.
(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity (ies), inludingforeign entities (intermediaries) with the understanding that the intermediary shall;
a) directly or indirectly lend or invest in other persons or entities idendtified in any manner whatsoever byor on behalf of the Company (Ultimate beneficary) or
b) provide any guaranty,security or the like to or on behalf of ultimate beneficiaries
(vi) The company has not received any fund from any person (s) or entity (ies), including foreign entities (Fundingparty) with the understanding (whehter recorded in writing or otherwise) that the company shall;
a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by oron behalf of the Funding party (Ultimate beneficiaries) or
b) provide any gurantee,security or the like on behalf of the ultimate beneficiaries
(vii) There are no charges or satisfaction which are yet to be registered with Registrar of Companies beyond thestatutory period.
(viii) All quarterly returns or statements of current assets are filed by the Company with banks or financial institutionsare in agreement with the books of account.
(ix) The loan has been utilised for the purpose for which it was obtained and no short term funds have been usedfor long term purpose.
(x) The Company has not traded or invested in Crypto currency or virtual currency during the current or previous year
(xi) The Company has not entered into any scheme of arrangements other than disclosed in note 42 and 43 of thisfinancials statements which has an accounting impact on current or previous year.
(xii) The Company has complied with the number of layers prescribed under the Companies Act, 2013, read withthe Companies (Restriction on number of layers) Rules, 2017
*The ratios reported for the current year are not comparable with that of the previous year on account of transfer of APIBusiness (refer note 42)
52 In connection with the preparation of the standalone financial statements for the year ended March 31, 2025, theBoard of Directors have confirmed the propriety of the contracts / agreements entered into by / on behalf of theCompany and the resultant revenue earned / expenses incurred arising out of the same after reviewing the levelsof authorisation and the available documentary evidences and the overall control environment. Further, the Boardof Directors have also reviewed the realizable value of all the current assets of the Company and have confirmedthat the value of such assets in the ordinary course of business will not be less than the value at which these arerecognised in the standalone financial statements. In addition, the Board has also confirmed the carrying value ofthe non-current assets in the financial statements. The Board, duly taking into account all the relevant disclosuresmade, has approved these standalone financial statements in its meeting held on May 26, 2025 in accordance withthe provisions of Companies Act, 2013.
For and on behalf of the Board of Directors of
Aurobindo Pharma Limited
K. Nithyananda Reddy M. Madan Mohan Reddy
Vice Chairman & Managing Director Director
DIN-01284195 DIN-01284266
Santhanam Subramanian B. Adi Reddy
Chief Financial Officer Company Secretary
Membership No: 13709
Place: Hyderabad
Date: May 26, 2025