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Aurobindo Pharma Ltd.

You can view the entire text of Notes to accounts of the company for the latest year
Market Cap. (₹) 36254.95 Cr. P/BV 2.61 Book Value (₹) 237.07
52 Week High/Low (₹) 838/537 FV/ML 1/1 P/E(X) 15.33
Bookclosure 29/08/2019 EPS (₹) 40.36 Div Yield (%) 0.40
Year End :2018-03 

1. CORPORATE INFORMATION

Aurobindo Pharma Limited (“the Company”) is a public company domiciled in India and was incorporated under the provisions of the Companies Act applicable in India. The registered office of the Company is located at Plot No.2, Maitri Vihar, Ameerpet, Hyderabad - 500038, India and the Corporate office is located at The Water Mark Building, Plot No. 11, Survey No. 9, Hi-tech City, Hyderabad - 500084, India. The Company’s shares are listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) in India.

The Company is principally engaged in manufacturing and marketing of active pharmaceutical ingredients, generic pharmaceuticals and related services. The standalone financial statements for the year ended 31 March 2018 were approved by the Board of Directors and authorised for issue on 28 May 2018.

a) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.1 per share. Each holder of equity shares is entitled to one vote per share.

The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

For the year ended 31 March 2018, the amount of dividend per share declared as distributions to equity shareholders was Rs.2.5 (31 March 2017: Rs.2.5).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

(A) Terms of borrowings

(i) Secured term loans in foreign currency carry interest in the range of LIBOR plus 1.2% to 1.5%. Out of these loans, loans amounting to ‘ Nil (31 March 2017: Rs.1,080.9) are repayable in Nil (31 March 2017: two) equal annual instalments and loan amounting to Rs.651.7 (31 March 2017: Rs.1,945.5) is repayable in equal half yearly installment of one (31 March 2017: three).

(ii) Term loans are secured by first pari passu charge on all the present and future property, plant and equipment, both movable and immovable property of the Company.

(iii) All secured demand loans are secured by first pari passu charge by way of hypothecation of all the stocks, book debts and other current assets (both present and future). All secured packing credit foreign currency loans carry intrest rate in the range of LIBOR plus 20 to 50 basis points.

(iv) All unsecured packing credit foreign currency loans carry interest rate in the range of 1 month’s LIBOR plus -20 to 50 basis points with maturity within 6 months.

Notes:

(a) The Company benefits from the tax holiday available for units set up under the Special Economic Zone Act, 2005.These tax holidays are available for a period of fifteen years from the date of commencement of operations. Under the SEZ scheme, the unit which begins providing services on or after 01 April 2005 will be eligible for deductions of 100% of profits or gains derived from export of services for the first five years, 50% of such profit or gains for a further period of five years and 50% of such profits or gains for the balance period of five years subject to fulfillment of certain conditions. From 01 April 2011 units set up under SEZ scheme are subject to Minimum Alternate Tax (MAT).

(b) During the year ended 31 March 2018 and 31 March 2017, the Company has paid dividend to shareholders, this has resulted in payment of dividend distribution tax to the taxation authorities. The Company believes that dividend distribution tax represents additional payment to tax authorities on behalf of shareholders. Hence, dividend distribution tax paid is charged to equity.

(c) There are no unrecognised deferred tax assets and liabilities as at 31 March 2018 and 31 March 2017.

2 COMMITMENTS AND CONTINGENCIES

A. Leases

Operating lease commitments - Company as lessee

i) The Company has operating leases agreements, which are mainly in the nature of lease of office premises for a period up to five years, with no restrictions and are renewable/ cancellable at the option of either of the parties except for details in (ii) below. These leases include a general clause to enable upward revision of the rental charge on an annual basis according to the prevailing market conditions. There is no other escalation clause in the lease agreement. There are no sub-leases. There are no restrictions imposed by lease arrangements. The aggregate amount of operating lease payments recognised in the statement of profit and loss is Rs.89.5 (31 March 2017: Rs.73.9). The Company has not recognised any contingent rent as expense in the statement of profit and loss.

ii) The Company has entered into non cancellable leases for office premises in current year and previous year. These leases have remaining non cancellable period of 6 months (31 March 2017: 5 months). The lease includes an escalation clause in the lease agreement. Future minimum lease rentals under non cancellable operating leases are as follows:

Finance lease - Company as lessee

Buildings includes factory buildings acquired on finance lease. The lease term is for major part of the economic life of the buildings and the agreement is silent on renewal terms and transfer of legal title at the end of lease term.

The lease agreement did not specify minimum lease payments over the future period. The factory building has been acquired on lease at a consideration of Rs.25.5 (31 March 2017: Rs.25.5).

The net carrying amount of the buildings obtained on finance lease - Rs.8.2 (31 March 2017: Rs.9.5).

Lease commitments - the Company as lessor

The Company has entered into agreement to non cancellable leases for office premises. The Company has identified assets under operating and finance lease based on the factors indicated under Appendix C to Ind AS 17 and terms of the agreement, viz., economic life of the asset vs. lease term, ownership of the asset after the lease term.

Lease commitments - the Company as lessee

The Company has entered into leases for land and office premises. The Company has determined, based on an evaluation of the terms and conditions of the arrangements, such as the lease term not constituting a major part of the economic life of the land and office premises and the fair value of the asset, that it does not retain significant risks and rewards of ownership of the land and the office premises and accounts for the contracts as operating leases.

* in respect of above matters, future cash outflows in respect of contingent liabilities are determinable only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company. The Company is contesting these demands and the Management, including its advisors, believe that its position will likely be upheld in the appellate process. No expense has been accrued in the standalone financial statements for the demands raised. The Management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the Company’s financial position and results of operations.

** Guarantees furnished towards business requirement in respective subsidiaries. The Company has assessed that it is only possible, but not probable, that outflow of economic resources will be required.

A The Company is involved in disputes, claims, Governmental and /or regulatory inspection, inquires, including patents and commercial maters that arise from time to time in the ordinary course of business. The same are subject to uncertain future events not wholly within the control of the Company. The management does not expect the same to have materially adverse effect on its financial position, as it believes the likely hood of any loss is not probable.

3 SHARE BASED PAYMENTS

Employee Stock Option Plan “ESOP-2006”

The Company instituted an Employee Stock Option Plan “ESOP-2006” for issue of shares to eligible employees of the Company as per the special resolution passed in the 19th Annual General Meeting held on 18 September 2006. The compensation committee of the Board of directors accordingly, granted 3,240,500 options under eight grants of 175,000, 25,000, 90,000, 1,205,000, 300,000, 500,000, 915,500 and 30,000 options to eligible employees on 30 October 2006, 31 July 2007, 31 October 2007, 16 December 2011, 19 June 2012, 09 January 2013, 28 January 2013 and 09 August 2013 respectively. The method of settlement under scheme is by issue of equity shares of the Company and there are no cash settlement alternatives for the employees. Each option comprises of one underlying Equity Share of Rs.1/- each. The said options vest on an annual basis at 10%, 15%, 25% and 50% over a period of four years and can be exercised over a period of six years from the date of grant of options. The options have been granted at the then prevailing market price of Rs.120.70, Rs.132.35, Rs.114.50, Rs.91.60, Rs.106.05, Rs.200.70, Rs.187.40 and Rs.161.30 per share respectively. The fair value of share options grants is estimated at the date of grant using Black-Scholes model, taking into account the terms and conditions upon which the share options were granted.

b) Disclosures related to defined benefit plan

The Company has a defined benefit gratuity plan governed by the Payment of Gratuity Act, 1972. Every employee who has completed five years or more of service is entitled to gratuity on departure at 15 days last drawn salary for each completed year of service or part thereof in excess of six months.

This defined benefit plan exposes the Company to acturial risk, such as longevity risk, currency risk, interest rate risk and market (investment) risk.

The plan is funded with Life Insurance Corporation in the form of a qualifying insurance policy. The following tables summarise the components of net benefit expense recognised in the statement of profit and loss, the fund status and amounts recognised in the balance sheet:

Discount rate : The discount rate is based on the prevailing market yields of Indian Governmet securities as at the balance sheet date for the estimated term of obligations.

Salary escalation rate : The estimate of future salary increases considered takes into account the inflation, seniority, promotion and other related factors.

Notes:

1. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

2. The Company expects to contribute Rs.90.0 (31 March 2017: Rs.65.0) during the year ended 31 March 2019 to the qualifying insurance policy .

3. The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period by varying one actuarial assumption, keeping all other actuarial assumptions constant.

4 In respect of the amounts mentioned under section 125 of the Companies Act, 2013 there are no dues that are to be credited to the Investor Education and Protection Fund as at 31 March 2018 (31 March 2017: ’ Nil).

5 RELATED PARTY DISCLOSURES

Names of related parties and description of relationship Subsidiaries

1 APL Pharma Thai Limited, Thailand

2 All Pharma (Shanghai) Trading Company Limited, China

3 Aurobindo Pharma USA Inc., USA

4 Aurobindo Pharma Industria Farmaceutica Ltda, Brazil

5 Helix Healthcare B.V., The Netherlands

6 Aurobindo Pharma Produtos Farmaceuticos Limitada, Brazil

7 APL Healthcare Limited, India

8 Auronext Pharma Private Limited, India

9 APL Research Centre Limited, India

10 Auro Pharma Inc., Canada

11 Aurobindo Pharma (Pty) Limited, South Africa

12 Agile Pharma B.V, The Netherlands

13 Auro Healthcare (Nigeria) Limited, Nigeria

14 Aurobindo Ilac Sanayi Ve Ticaret Limited Sirketi, Turkey (liquidated w.e.f. 31 October 2017)

15 Aurobindo Pharma Japan K.K., Japan

16 Aurex B.V (formerly Pharmacin B.V.), The Netherlands

17 Aurobindo Pharma GmbH, Germany

18 Aurobindo Pharma (Portugal) Unipessoal Limitada., Portugal**

19 Laboratorios Aurobindo S. L., Spain

20 Aurobindo Pharma B.V, The Netherlands (formerly known as Actavis B.V.)

21 Aurobindo Pharma (Romania) S.r.l, Romania

22 Aurobindo Pharma (Italia) S.r.l, Italy

23 Aurobindo Pharma (Malta) Limited, Malta

24 APL Swift Services (Malta) Limited, Malta

25 Milpharm Limited, UK

26 Aurolife Pharma LLC, USA

27 Auro Peptides Limited, India

28 Auromedics Pharma USA LLC, USA (dissolved w.e.f. 31 March 2018)

29 Aurovida Farmaceutica S.A. DE C.V., Mexico

30 Curepro Parenterals Limited, India

31 Hyacinths Pharma Private Limited, India

32 Silicon life sciences Private Limited, India

33 AuroZymes Limited, India

34 Aurobindo Pharma Colombia S.A.S, Columbia

35 Aurovitas, Unipessoal LDA, Portugal**

36 Arrow Generiques SAS, France

37 Auro Health LLC, USA

38 Pharmacin B.V. (formerly Aurex B.V.), The Netherlands

39 1980 Puren Pharma GmbH (formerly Actavis Management GmbH), Germany

40 Puren Pharma GmbH & Co., KG (formerly Actavis Deutschland GmbH & Co., KG), Germany

41 Aurovitas Spain SA (formerly Actavis Spain SA)

42 Natrol LLC, USA

43 Aurovitas Pharma Polska, Poland (w.e.f 31 March 2017)

44 Aurogen South Africa (Pty) Ltd, South Africa (w.e.f. 25 January 2017)

45 Aurobindo Pharma USA LLC, USA (w.e.f 14 April 2016 and dissolved w.e.f. 31 March 2018)

46 Auro AR LLC, USA (w.e.f. 2 May 2017)

47 Auro Vaccines LLC, USA (w.e.f. 27 January 2017)

48 Auro Logistics LLC, USA (w.e.f. 28 April 2017)

49 Acrotech Biopharma LLC, USA (w.e.f. 05 January 2018)

50 Generis Farmaceutica S.A, Portugal (w.e.f. 01 May 2017)

51 Mer Medicamentos, Lda, Portugal (w.e.f. 01 May 2017)**

52 Generis Phar Unipessoal Lda., Portugal (w.e.f. 01 May 2017)

53 Farma APS - Promogao de Medicamentos, Unipessoal Lda. (w.e.f. 01 May 2017 and dissolved w.e.f. 25 January 2018)

54 Aurobindo Pharma Saudi Arabia Limited Company (w.e.f 08 May 2017)

55 Auro Pharma India Private Limited, India (w.e.f 20 December 2017)

56 Aurovitas Pharma Ceska Republica s.r.o , Czech Republic ( w.e.f.23 December 2017)

57 Generis MZ, Lda., Mozambique (w.e.f. 01 May 2017 and dissolved w.e.f. 19 March 2018)

58 Aurovitas Pharma (Tazihou) Ltd, China( w.e.f. 29 January 2018)

**Mer Medicamentos, Lda, Portugal, Aurovitas, Unipessoal LDA, Portugal and Aurobindo Pharma (Portugal) Unipessoal Limitada., Portugal were merged with Generis Farmaceutica S.A., w.e.f. 01 April 2018.

Joint ventures

1 Novagen Pharma (Pty) Limited, South Africa (Joint Venture of a Subsidiary, Aurobindo Pharma (Pty) Limited, South Africa)

2 Eugia Pharma Specialities Limited, India

3 Tergene Biotech Private Limited, India (w.e.f. 01 April 2015)

4 Raidurgam developers limited, India (formerly known as Aurobindo Antibiotics limited, India)

Enterprises over which key management personnel or their relatives exercise significant influence

1 Pravesha Industries Private Limited, India

2 Sri Sai Packaging, India (Partnership firm)

3 Trident Chemphar Limited, India

4 Auropro Soft Systems Private Limited, India

5 Axis Clinicals Limited, India

6 Pranit Projects Private Limited, India

7 Pranit Packaging Private Limited, India

8 SGD Pharma India Limited (formerly Cogent Glass Limited), India

9 Orem Access Bio Inc, India

10 Veritaz Healthcare Limited, India

11 Alex Merchant PTE. LTD, Singapore

12 Trident Petrochemicals DMCC, Dubai

13 Axis Clinicals LLC, USA

14 Alex Merchant DMCC, Dubai

15 Crest Cellulose Private Limited, India

16 East Pharma Technologies, India (Partnership firm)

17 Axis Clinicals Latina SA DE CV, Mexico

18 Viwyn Pharma Private limited, India

19 Gelcaps Industries, India

Key managerial personnel

1 Mr. K. Nityananda Reddy, Whole-time Director

2 Dr. M. Sivakumaran, Whole-time Director

3 Mr. M. Madan Mohan Reddy, Whole-time Director

4 Mr. P. Sarath Chandra Reddy, Whole-time Director (from 01 June 2016)

5 Mr. N. Govindarajan, Managing Director

6 Mr. Santhanam Subramanian, Chief Financial Officer

7 Mr. A. Mohan Rami Reddy, Company Secretary (upto 31 May 2016 )

8 Mr. B. Adireddy, Company Secretary (w.e.f. 01 June 2016)

9 Mr. K. Ragunathan, Independent Director

10 Mr. M. Sitarama Murty, Independent Director

11 Mr. D. Rajagopala Reddy, Independent Director (Upto 08 February 2017 )

12 Dr. (Mrs.) Avnit Bimal Singh, Independent Director

13 Mr.Rangaswamy Rathakrishnan Iyer, Independent Director (Upto 09 December 2017)

14 Mr.P.Venkata Ramprasad Reddy, Non Executive promoter director

15 Mrs.Savitha Mahajan, Independent Diretor (w.e.f. 16 December 2017)

Relatives to key managerial personnel

1 Mr. Vishnu M Sriram (son-in-law of Dr. M. Sivakumaran, Wholetime Director)

j. Details of advances due from private companies in which Company’s director is a director.

Pranit Packaging Private Limited, India ‘ Nil (March 31, 2017 ‘ Nil)

k. i) Details of trade receivables due from private companies in which Company’s director is a director.

Pravesha Industries Private Limited, India ‘Nil (March 31, 2017: ‘0.1)

ii) Details of trade receivables due from partnership firm in which Company’s director is a partner.

Sri Sai Packaging, India ‘Nil (March 31, 2017: ‘0.0)

6 The Board of Directors at their meeting held on 12 September 2013, had approved to transfer its Injectable Unit of the Company on a going concern basis comprising assets and liabilities pertaining to the said Unit to its wholly owned subsidiary viz., Curepro Parenterals Limited. The same was subject to requisite consents, approvals or permissions of the statutory or regulatory authorities. Pending such approvals, no effect of this Scheme has been given till date. The Board of Directors at their meeting held on 29 May 2017 decided not to transfer the Unit, considering the expansion and growth plans of the Company

7 HEDGING ACTIVITIES AND DERIVATIVES - DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS

The Company uses foreign currency denominated borrowings and foreign exchange forward contracts to manage some of its transaction exposures. The foreign exchange forward contracts are not designated as cash flow hedges and are entered into for periods consistent with foreign currency exposure of the underlying transactions, generally from one week to twelve months.

A. Measurement of fair values

i. Valuation techinque and significant unobservable inputs

The following tables show the valuation techniques used in measuring Level 2 and Level 3 fair values, for financial instruments measured at fair value in the balance sheet, as well as the significant unobservable inputs used:

ii. Transfer between Level 1 and 2

There have been no transfers from Level 2 to Level 1 or vice-versa in 2017-18 and no transfers in either direction in 2016-17.

B. Risk management framework

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.

The Company’s risk management policies are estabilished to identify and analyse the risks being 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 regularly to reflect changes in market conditions and the company’s activities. The Company, through its training and managment standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company’s audit committee oversees how management monitors compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framwork in relation to the risks faced by the company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and adhoc reviews of risk managment controls and procedures, the result of which are reported to the audit committee.

The Company is exposed primarily to credit risk, liquidity risk and market risk (including currency risk, interest rate risk and other price risk). The Company uses derivative financial instruments such as forwards to minimise any adverse effect on its financial performance.

i. Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, investments, derivative financial instruments, cash and cash equivalents, loans and other financial assets. 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.

Trade receivables

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, the Management also evaluates the factors that may influence the credit risk of its customer base, including the default risk and country in which the customers operate. The Management has established a credit policy under which each new customer is analysed individually for creditworthiness before the Company’s standard payment and delivery terms and conditions are offered. The Company’s review includes external ratings, if available, financial statements, credit agency information, industry information and in some case bank references. Sales limits are established for each customer and reviewed quarterly.

The Companies receivables turnover is quick and historically, there was no significant default on account of trade and other receivables. An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The company assesses at each reporting date whether a financial asset or a group of financial assets is impaired. Expected credit losses are measured at an amount equal to the 12 months expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The maximum exposure to credit risk at the reporting date is the carrying value of trade and other receivables. 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 operate in largely independent markets.

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 Rs.7.9 (31 March 2017 : Rs.407.0).

The Company’s maximum exposure to credit risk as at 31 March 2018 and 31 March 2017 is the carrying value of each class of financial assets.

ii. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. The following are the remaining contractual maturities of financial liabilities at reporting date:

iii. 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.

a) Foreign Currency risk:

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the Company. The Company is subject to foreign exchange risk primarily due to its foreign currency revenues, expenses and borrowings. Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar, Euro and 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 which evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks and advises the Management of any material adverse effect on the Company. It hedges a part of these risks by using derivative financial instruments in line with its risk management policies. The information on foreign exchange risk from derivative instruments and non derivative instruments is as follows:

The summary of quantitative data about the Company’s exposure to currency risk (based on the notional amounts) as reported to the management is as follows:

b) interest rate risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of change in market interest rates. The Company’s exposure to risk of change in market interest rates because it borrows funds at both fixed and floating interest rates. The Company manages its interest rate risk by having a balances portfolio of fixed and variable rate loans and borrowings. As the company has no significant interest bearing assets, the income and operating cash flows are substantially independent of changes in market interest rates.

c) commodity risk:

Exposure to market risk with respect to commodity prices primarily arises from the Company’s purchase of active pharmaceutical 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 materials generally fluctuate in line with commodity cycles, although the prices of raw materials used in the Company’s 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 31 March 2018, the Company had not entered into any derivative contracts to hedge exposure to fluctuations in commodity prices.

8 CAPITIAL MANAGEMENT

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company’s capital management is to maximise the shareholder value.

9 SEGMENT REPORTING

In accordance with Indian Accounting Standard (Ind AS) 108 on Operating segments, segment information has been given in the consolidated financial statements of the Company, and therefore no separate disclosure on segment information is given in these financial statements.

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