3.14 Provisions (Other than employee benefits)
Provisions are recognised when the Company
has a present obligation (legal or constructive)
as a result of a past event, it is probable that the
Company will be required to settle the obligation,
and a reliable estimate can be made of the amount
of the obligation.
The amount recognised as a provision is the
best estimate of the consideration required to
settle the present obligation at the end of the
reporting period, taking into account the risks
and uncertainties surrounding the obligation.
When a provision is measured using the cash
flows estimated to settle the present obligation,
its carrying amount is the present value of those
cash flows (when the effect of the time value of
money is material).
When some or all of the economic benefits required
to settle a provision are expected to be recovered
from a third party, a receivable is recognised as an
asset if it is virtually certain that reimbursement
will be received and the amount of the receivable
can be measured reliably.
3.14.1 Onerous contracts
Present obligations arising under onerous contracts
are recognised and measured as provisions. An
onerous contract is considered to exist where
the Company has a contract under which the
unavoidable costs of meeting the obligations
under the contract exceed the economic benefits
expected to be received from the contract. Before
a provision is recognised company will recognise
an impairment loss on the assets associated with
that contract.
3.14.2 Contingent liabilities
Contingent liability is a possible obligation
arising 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 or a
present obligation that arises from past events
but is not recognized because it is not probable
that an outflow of resources embodying economic
benefits will be required to settle the obligation or
the amount of the obligation cannot be measured
with sufficient reliability. The Company does not
recognize a contingent liability but discloses its
existence in the consolidated financial statements.
3.15 Financial instruments
3.15.1 Investment in subsidiaries, associates and
Joint Ventures
The Company has accounted for its investments in
subsidiaries and associates joint ventures at cost
less impairment.
3.15.2 Other financial assets and financial liabilities
Other financial assets and financial liabilities are
recognised when Company becomes a party to the
contractual provisions of the instruments.
Initial recognition and measurement:
A financial asset (unless it is a trade receivable
without a significant financing component)
is initially measured at fair value plus, for
an item not at FVTPL, transaction costs that
are directly attributable to its acquisition or
issue. A trade receivable without a significant
financing component is initially measured at the
transaction price. Financial liabilities are initially
measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue
of financial assets and financial liabilities (other
than financial assets and financial liabilities at
fair value through profit or loss) are added to
or deducted from the fair value of the financial
assets or financial liabilities, as appropriate, on
initial recognition. Transaction costs directly
attributable to the acquisition of financial assets
or financial liabilities at fair value through profit
or loss are recognised immediately in statement
of profit and loss. However, trade receivables that
do not contain a significant financing component
are measured at transaction price.
Subsequent measurement:
Financial assets at amortised cost
Financial assets are subsequently measured at
amortised cost if these financial assets are held
within a business whose objective is to hold
these assets in order to collect contractual cash
flows and contractual terms of financial asset
give rise on specified dates to cash flows that are
solely payments of principal and interest on the
principal amount outstanding.
Financial assets at fair value through other
comprehensive income
Financial assets are measured at fair value through
other comprehensive income if these financial
assets are held within business whose objective
is achieved by both collecting contractual cash
flows on specified dates that are solely payments
of principal and interest on the principal amount
outstanding and selling financial assets.
Financial assets at fair value through profit or loss
Financial assets are measured at fair value through
profit or loss unless it measured at amortised cost
or fair value through other comprehensive income
on initial recognition. The transaction cost directly
attributable to the acquisition of financial assets
and liabilities at fair value through profit or loss
are immediately recognised in the statement of
profit and loss.
Financial liabilities
Financial liabilities are measured at amortised
cost using effective interest rate method. For trade
and other payables maturing within one year from
the balance sheet date, the carrying amounts
approximate fair value due to the short maturity
of these instruments.
Offsetting
Financial assets and financial liabilities are offset
and the net amount presented in the balance sheet
when, and only when, the Company currently has
a legally enforceable right to set off the amounts
and it intends either to settle them on a net basis
or to realise the asset and settle the liability
simultaneously.
Derecognition
Financial assets
The Company derecognises a financial asset when:
- the contractual rights to the cash flows from the
financial asset expire; or
- it transfers the rights to receive the contractual
cash flows in a transaction in which either:
• substantially all of the risks and rewards
of ownership of the financial asset are
transferred; or
• the Company neither transfers nor retains
substantially all of the risks and rewards of
ownership and it does not retain control of
the financial asset.
The Company enters into transactions whereby it
transfers assets recognised on its balance sheet
but retains either all or substantially all of the risks
and rewards of the transferred assets. In these
cases, the transferred assets are not derecognised.
Financial liabilities
The Company derecognises a financial liability
when its contractual obligations are discharged
or cancelled or expire. The Company also
derecognises a financial liability when its
terms are modified and the cash flows of the
modified liability are substantially different, in
which case a new financial liability based on
the modified terms is recognised at fair value.
On derecognition of a financial liability, the
difference between the carrying amount
extinguished and the consideration paid
(including any non-cash assets transferred or
liabilities assumed) is recognised in profit or loss.
3.15.3 Equity instruments
An equity instrument is a contract that evidences
residual interest in the assets of the Company after
deducting all of its liabilities. Equity instruments
recognised by the Company are recognised at the
proceeds received net off direct issue cost.
3.15.4 Financial guarantee contracts
At the inception of a financial guarantee contract,
a liability is recognised initially at fair value
and then subsequently at the higher of the
estimated loss and amount initially recognised
less, when appropriate, the cumulative amount
of income recognised, the changes in subsequent
measurement being recognised in the statement
of profit and loss. Where a guarantee is issued for
a consideration, a financial asset of an amount
equal to the liability is initially recognised at
amortised cost. Where a guarantee is issued for
no consideration, the fair value is recognised as
additional investment in the entity to which the
guarantee relates.
3.15.5 Derivative financial instruments and hedge
accounting
The Company uses various derivative financial
instruments such as interest rate swaps, currency
swaps and forward contracts to mitigate the risk
of changes in interest rates and foreign exchange
rates. Such derivative financial instruments are
initially recognised at fair value on the date on
which a derivative contract is entered into and
are also subsequently measured at fair value.
Derivatives are carried as financial assets when
the fair value is positive and as financial liabilities
when the fair value is negative.
Any gains or losses arising from changes in the
fair value of derivatives are taken directly to
the Statement of Profit and Loss, except for the
effective portion of cash flow hedges which is
recognised in Other Comprehensive Income and
later to the Statement of Profit and Loss when the
hedged item affects profit or loss or treated as
basis adjustment if a hedged forecast transaction
subsequently results in the recognition of a non¬
financial assets or non-financial liability.
Hedges that meet the criteria for hedge accounting
are accounted for as follows:
Cash flow hedge
The Company designates derivative contracts
or non derivative financial assets / liabilities
as hedging instruments to mitigate the risk of
movement in interest rates and foreign exchange
rates for foreign exchange exposure on future cash
flows attributable to a recognised asset or liability
or highly probable forecast cash transactions.
When a derivative is designated as a cash flow
hedging instrument, the effective portion of
changes in the fair value of the derivative is
recognized in the cash flow hedging reserve
being part of other comprehensive income. Any
ineffective portion of changes in the fair value
of the derivative is recognized immediately in
the Statement of Profit and Loss. If the hedging
relationship no longer meets the criteria for hedge
accounting, then hedge accounting is discontinued
prospectively. If the hedging instrument expires
or is sold, terminated or exercised, the cumulative
gain or loss on the hedging instrument recognized
in cash flow hedging reserve till the period the
hedge was effective remains in cash flow hedging
reserve until the underlying transaction occurs.
The cumulative gain or loss previously recognized
in the cash flow hedging reserve is transferred
to the Statement of Profit and Loss upon the
occurrence of the underlying transaction. If the
forecasted transaction is no longer expected to
occur, then the amount accumulated in cash flow
hedging reserve is reclassified in the Statement of
Profit and Loss.
3.16 Exceptional items
When an item of income or expense within profit
or loss from ordinary activity is of such size, nature
or incidence that their disclosure is relevant to
explain the performance of the Company for the
year, the nature and amount of such items is
disclosed as exceptional items.
3.17 Cash and cash equivalents
Cash and cash equivalents consist of cash at banks
and on hand and short-term deposits with an
original maturity of three months or less, highly
liquid investments that are readily convertible
into known amounts of cash and which are
subject to insignificant risk of changes in value.
Bank overdrafts that are repayable on demand
and form an integral part of our cash management
are included as a component of cash and cash
equivalents for the purpose of the statement of
cash flows.
3.1S Earnings per share
Basic Earnings Per Share ('EPS') is computed by
dividing the net profit(or loss) attributable to the
equity shareholders by the weighted average
number of equity shares outstanding during the
year. Diluted earnings per share is computed by
dividing the adjusted profit(or loss) by the weighted
average number of equity shares considered for
deriving basic earnings per share and also the
weighted average number of equity shares that
could have been issued upon conversion of all
dilutive potential equity shares. Dilutive potential
equity shares are deemed converted as of the
beginning of the year, unless issued at a later date.
In computing diluted earnings per share, only
potential equity shares that are dilutive and that
either reduces earnings per share or increases
loss per share are included. The number of shares
and potentially dilutive equity shares are adjusted
retrospectively for all periods presented in case of
share splits.
3.19 Dermerger of CDMO and Softgelatin business
Softgel Business division of Strides Pharma
Science Limited has been carved out on the basis
of the following judgement:
a. Property, Plant and Equipment (PPE) situated
at Softgel block in KRS Gardens, Bangalore
including respective depreciation and capital
work in progress
b. Registration and brands consisting of
Intellectual property rights for distribution
and marketing of softgelatin products
including intangibles under developments
and awaiting approvals
c. Capital Creditors and Advances directly
relating to the above PPE and intangibles have
been identified and carved out.
d. Employees directly and exclusively involved
in the manufacture of Softgelatin products
and employee directly attributable/ involved
in distribution of softgel products also form
part of the Softgel Division. The employees are
in the rolls of Strides Pharma Science Limited
(SPSL). As SPSL is administratively managing
the softgel business, the corresponding cost
of these employees are disclosed as employee
benefit expenses. The related employee
liabilities and advances have also been carved
out with respect to the employees.
e. Inventories situated in KRS Gardens relating
to Softgelatin products consisting of Finished
goods, Semi finished Goods, Raw materials
and packing materials directly attributable
or related to manufacture of Soft Gelatin
product.
f. Trade Receivables relating to Softgel products
directly identified and carved out.
g. Borrowings from Banks and financial
institutions which were identified, assigned
to Softgel business under appropriate
mechanism with the confirmation from the
lenders. The balance towards letter of credits
for Softgel Division have been identified at
specific invoice levels.
h. Trade Payables which are directly relating to
Softgel business were identified and carved
out.
i. Revenues of the Softgel business were
directly identified and carved out with the
corresponding cost of materials consumed
based on the underlying softgel products'
description.
j. Other Expenses which were directly
identifiable to Softgel business have been
carved out and common costs are allocated
to Softgel business using reasonable and
appropriate basis.
Directly Attributable: Balances and transactions
representing assets, liabilities, incomes and
expenditures that are identifiable and attributable
to Softgel Business division of Strides Pharma
Science Limited as specified in items (a) to (f), (h)
and (i) above are carved out.
Allocable balances or transactions: Balances
and transactions other than that are directly
attributable are allocated based on appropriate
method as specified in items (g) and (j) above.
3.20 Recent pronouncements
Ministry of Corporate Affairs (“MCA”) notifies
new standards or amendments to the existing
standards under Companies (Indian Accounting
Standards) Rules as issued from time to time.
During the year ended March 31, 2025, MCA has
notified Ind AS 117 - Insurance Contracts and
amendments to Ind As 116 - Leases, relating to sale
and lease back transactions, applicable from April
1, 2024. The Company has assessed that there is
no significant impact on its financial statements.
On May 9, 2025, MCA notifies the amendments to
Ind AS 21 - Effects of Changes in Foreign Exchange
Rates. These amendments aim to provide clearer
guidance on assessing currency exchangeability
and estimating exchange rates when currencies
are not readily exchangeable. The amendments are
effective for annual periods beginning on or after
April 1, 2025. The Company is currently assessing
the probable impact of these amendments on its
financial statements.
(iii) Fair value of investment properties
The fair value of the Company’s investment properties as at March 31, 2025 has been arrived at ' 973.50
Million (as at March 31, 2024 : ' 910.90 Million) on the basis of an agreement to sale has been entered with
third party customer. The Company has obtained relevant NOC for sale of the same and is expected to be
completed in the financial year 2026.
(iv) Investment properties are pledged as security towards term loan (first pari passu charge) and working capital
borrowings (second pari passu charge) by the Company. (refer note 20)
The discount rates used are based on weighted average cost of capital.
The growth rates of the above cash generating unit have been considered based on the market conditions
prevalent in the country that would fall in respective cash generating unit.
The management believes that the projections used by the management for determining the “value in use” of
cash generating unit reflect past experience and external sources of information and any reasonably possible
change in the key assumptions on which recoverable amount is based would not cause the aggregate carrying
amount to exceed the aggregate recoverable amount of the cash generating unit.
*Includes receivables from related parties (Refer note 45)
The Company has availed bill discounting facilities from the banks which do not meet the derecognition criteria
for transfer of contractual rights to receive cash flows from the respective trade receivables since they are with
recourse to the Company. Accordingly as at March 31, 2025, trade receivables balances include NIL (As at March
31, 2024: ' 695.90 Million) and the corresponding financial liability to the banks is included as part of working
capital loan under short- term borrowings.
(ii) Detail of the rights, preferences and restrictions attaching to each class of shares outstanding equity
shares of ' 10/- each:
The Company has only one class of equity shares, having a par value of '10/-. The 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 approval by the shareholders at the ensuing annual general
meeting. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive
any of the remaining assets of the Company, after distribution to all preferential amounts. The distribution
will be in proportion to number of equity shares held by the shareholders.
(a) Capital reserve
Capital reserve is created on account of FCCB’s, Mergers and acquisitions and Demergers. It is utilised in
accordance with the provisions of the Companies Act, 2013.
(b) Securities premium
Securities premium is used to record the premium received on issue of shares. It is utilised in accordance
with the provisions of the Companies Act, 2013.
(c) Reserve for Business Restructure
The Scheme of restructuring approved by the shareholders on April 13, 2009 included a Scheme of Arrangement
that envisaged the creation of a Reserve for Business Restructure(BRR) as set out in the Scheme. The Reserve
was to be utilized by December 31, 2012 for specified purposes by either the Company or its subsidiaries. The
balance of ' 3,846.38 Million identified under the Securities Premium Account represents amounts utilized
by the subsidiaries of the Company from the Reserve prior to December 31, 2012 and have been earmarked
for set off on consolidation.
(d) Capital redemption reserve
Capital redemption reserve is a statutory, non-distributable reserve into which the amounts are transferred
following the redemption or purchase of Company’s own shares. It is utilised in accordance with the
provisions of the Companies Act, 2013.
(e) Share options outstanding account
The fair value of the equity-settled share based payment transactions with employees is recognised in
statement of profit and loss with corresponding credit to employee stock options outstanding account. The
amount of cost recognised is transferred to share premium on exercise of the related stock options.
(f) General reserve
General reserves are the retained earnings of a Company which are apportioned out of Company’s profits.
General reserve is a free reserve which can be utilized for any purpose after fulfilling certain conditions in
accordance with the provisions of the Companies Act, 2013.
(g) Retained earnings
Retained earnings are the profits that the Company has earned till date, less any transfers to other reserves,
dividends or other distributions paid to its equity shareholders.
(h) Cash flow hedging reserve
The cash flow hedging reserve represents the cumulative effective portion of gains or losses (net of taxes,
if any) arising on changes in fair value of designated portion of hedging instruments entered into for cash
flow hedges.
19 Other equity (contd)
(i) Remeasurement of the defined benefit liabilities / (asset)
The cumulative balances of actuarial gain or loss arising on remeasurements of defined benefit plan is
accumulated and recognised with in this component of other comprehensive income. Items included in
actuarial gain or loss reserve will not be reclassified subsequently to statement of profit and loss.
(j) Share warrants
Board of Directors of the Company on March 14, 2022 approved the issuance of upto 2,000,000 Equity Warrants
at a price of ' 442/- per warrant, to Karuna Business Solutions LLP, a promoter group entity, with a right to
apply for and get allotted, within a period of 18 (Eighteen) months from the date of allotment of Warrants,
1 (one) Equity Share of face value of ' 10/- (Rupee Ten Only) each for each Warrant, for cash. The issue was
approved by the shareholders of the Company at the Extra Ordinary General Meeting held on April 7, 2022
and has also received requisite listing approvals. An amount of ' 221 million equivalent to 25% of the Warrant
Price was paid to the Company at the time of subscription and the balance 75% of the Warrant Price was
payable by the Warrant holder against each Warrant at the time of allotment of Equity Shares pursuant to
exercise of the options. During the year ended March 31, 2023, on exercise of options by Karuna Business
Solutions LLP and on receipt of subscription money of '150 million, the Company has converted 452,490
convertible warrants into Ordinary Shares.
During the current year ended March 31, 2024, on exercise of options by Karuna Business Solutions LLP
and on receipt of balance subscription money of ' 513 million, the Company has fully converted 1,547,510
convertible warrants into Ordinary Shares.
The Company has fully utilised the amounts of ' 884 million towards capital resources and operations.
Refer note 11 for significant components of deferred tax assets and liabilities.
The Company is subject to complexities with respect to various tax positions on matters such as deductibility
of transactions, availability of tax incentives and exemptions for earlier years and cross border transfer pricing
arrangements, wherein it faces litigation from the authorities over the years.
Uncertainty in a tax position may arise as tax laws are subject to interpretation. Judgment is required in assessing
the range of possible outcomes for some of these tax matters. These judgments could change over time as each
of the matter progresses depending on experience on actual assessment proceedings by tax authorities and
other judicial precedents. The Company makes an assessment (including obtaining opinion from external legal
experts) to determine the outcome of these uncertain tax positions and decides to make an accrual or consider
it to be a possible contingent liability. Where the amount of tax liabilities are uncertain, the Company recognizes
accruals which reflect its best estimate of the outcome based on the facts known.
Salient features of the Scheme
1. As the Transferee Company is the ultimate holding company of the Transferor Company, there shall not be
any issue of shares as purchase consideration to the shareholders of the Transferor Companies. Further, upon
the scheme becoming effective the investments in the share capital of the Transferor company, appearing
in the books of accounts of the Transferee Company, if any, stands cancelled.
2. Upon the Scheme becoming effective, the authorised share capital of the Transferor Company shall stand
combined with the authorised share capital of the Transferee Company. Accordingly, the authorised share
capital of the Company will be ' 2,183,700,000, comprising 218,370,000 equity shares of ' 10 each.
3. On the Scheme becoming effective and with effect from the Appointed Date, the merger of the Transferor
Company with the Transferee Company is accounted by the Transferee Company as per the applicable
accounting principles prescribed under the Indian Accounting Standard (Ind AS) 103, ‘Business Combinations’
notified under Section 133 of the Act and/ or any other applicable Ind AS, as amended from time to time.
4. The goodwill and adjustments to plant, property and equipments and intangibles recorded in the consolidated
financial statements of the company in earlier years on account of the business combination of Strides
Alathur Private Limited (formerly Vivimed Lifesciences Private Limited) have now been recorded in these
standalone financial statements of the company with a corresponding credit to capital reserve.
5. The Company has incurred ' 0.27 miilions (Previous year ' 53.65 millions) on account of scheme of
amalgamation.
38. Demerger of Soft gelatine business
On September 25, 2023, the Board of directors of the Company approved the Scheme of Arrangement (Scheme)
between Strides Pharma Science Limited, OneSource Specialty Pharma Limited (formerly Stelis Biopharma
Limited (Stelis) and Steriscience Specialties Private Limited for demerger of CDMO and Soft Gelatin Business
(demerged business) of the Company. The Company has received the National Company Law Tribunal (NCLT)
order approving the Scheme on November 14, 2024 with appointed date of April 01, 2024. Upon filing with the
Registrar of Companies “ROC”, the Scheme became effective from November 27, 2024. Pursuant to the approval
by NCLT, as of April 01, 2024 the demerger has been accounted for as per the Guidance in Appendix A of Ind AS 10
(Distribution of Non-cash assets to the owners) and consequently the Company has restated the financial results
for the quarter ended 31 December 2024. Accordingly, all the assets and liabilities pertaining to the demerged
business stood transferred and vested into Stelis from the appointed date i.e. 1 April 2024. The demerged business
was not previously classified as held-for-sale or as a discontinued operation pending the NCLT approval. Pursuant
to the approval of the Scheme by the NCLT on 14 November 2024, demerged business has been classified as
discontinued operation. The comparative standalone statement of profit and loss account has been re-presented
to show the discontinued operation separately from continuing operations.
In line with the accounting prescribed in the Scheme, the difference between the net assets transferred and the
fair value of consideration amounting to ' 28,271 million has been credited to statement of profit and loss as Gain
on disposal of assets attributable to discontinued operations with corresponding debit of ' 3,755.99 million and
' 28,270.55 million to the Securities Premium account and Retained earnings respectively. The profit from the
discontinued operation of ' 28,270.55 million is attributable entirely to the owners of the Company.
The appointed date as per the Scheme is different from the effective date of the Scheme (the date on which the
scheme is filed with ROC). Accordingly, had this not been an NCLT approved Scheme, the demerged business
would have continued to be part of the Company till November 27, 2024 and the impact of the same on these
financial statements is as below:
39. Segment information
Operating segments are defined as components of an enterprise for which discrete financial information is
available that is evaluated regularly by the chief operating decision maker (CODM) in deciding how to allocate
resources and assessing performance. The Group’s CODM is the Managing Director.
Based on the “management approach” as defined in Ind AS 108 - Operating Segments, the Chief Operating Decision
Maker (“CODM”) evaluates the Compamy’s performance based on an analysis of various performance indicators.
The accounting principles used in the preparation of these financial statements are consistently applied to record
revenue and expenditure in individual segments.
Pursuant to the Scheme of demerger explained in note 38, the CODM has started evaluating the business, including
resource allocation and performance assessment as a single segment, i.e “Pharmaceutical”. Consequently, the
Company has only one reportable segment and accordingly no disclosures are made as required under Ind AS
108, in current and comparative periods.
Pharmaceutical segment represents the business of development, manufacture and Commercialization of
pharmaceutical products other than biological drugs.
Disclosures regarding geographical information: The geographical information of the Company’s revenues and
assets are shown separately in the table below. Segment revenues has been disclosed based on geographical
location of the customers. Segment assets has been disclosed based on the geographical location of the respective
assets.
As per the judgment of Honourable Supreme Court dated February 28, 2019 on the definition of “Basic Wages”
under the Employees Provident Funds & Misc. Provisions Act, 1952 and based on Company’s evaluation, there are
significant uncertainties and numerous interpretative issues relating to the judgement and hence it is unclear
as to whether the clarified definition of Basic Wages would be applicable prospectively or retrospectively. The
amount of the obligation therefore cannot be measured with sufficient reliability for past periods and hence has
currently been considered to be a contingent liability.
Other than the matters disclosed above, the Company is also involved in other disputes including patent and
commercial matters that arise from time to time in the ordinary course of business. Management is of the view
that the resolution of these disputes will not have any material adverse effect on the Company’s financial position
or results of operations.
43. Share-based payments
a. Details of the employee share option plan of the Company:
(a) The ESOP titled “Strides ESOP 2016” (formerly known as Strides Shasun ESOP 2016) (ESOP 2016) was approved
by the shareholders on April 21, 2016. 3,000,000 options are covered under the Plan which are convertible
into equal number of equity shares of the Company. The vesting period of these options range over a period
of three years. The options must be exercised within a period of one year from the date of vesting. Company
has granted 25,000 options (Previous year: 10,000) under this scheme during the current year.
(b) During the current year, Employee compensation costs of ' 14.57 million (for the year ended March 31, 2024:
' 13.49 million) relating to the above referred Employee Stock Option Plans have been recognised in the
Statement of Profit and Loss.
(c) During the current year, employees were given an option to accelarate exercise of stock options vested
pursuant to the scheme of demerger. Accordingly employees holding 151,000 options have exercised the
option.
Fair value of share options granted during the year
The fair value of the share options granted during the year under ESOP 2016 Lot XVII are ' 359. Options were
priced using a Black- Scholes method of valuation at grant date. Expected volatility is based on the historical
share price volatility over the past one year.
* Includes options vested but not exercised as at March 31, 2025 : Nil (March 31, 2024: Nil)
** Includes options exercised but not allotted as at March 31, 2025 : Nil (March 31, 2024: 5,000)
The weighted average remaining contractual life is 1.18 years (March 31, 2024: 1.81 years) and the range of exercise
price is ' 206 to ' 567 (March 31, 2024: ' 231 to ' 311)
44. Employee Benefits Plans
Defined contribution plan
The Company makes contributions to provident fund and employee state insurance schemes which are defined
contribution plans, for qualifying employees. Under the schemes, the Company is required to contribute a
specified percentage of the payroll cost to fund the benefits. The Company recognised ' 181.12 millions (Previous
year: ' 157.06 millions) for provident fund contributions, ' 0.59 millions (Previous year: ' 2.61 millions) for
employee state insurance scheme contributions in the Statement of Profit and Loss. The contributions payable
to these plans by the Company are at rates specified in the rules of the schemes.
Defined benefit plan
The Company offers gratuity benefits, a defined employee benefit scheme to its employees.
Composition of the plan assets
The fund is managed by LIC, the fund manager. The details of composition of plan assets managed by the fund
manager is not available with the Company. However, the said funds are subject to Market risk (such as interest
risk, investment risk, etc.).
Significant actuarial assumptions for the determination of the defined obligation are discount rate and expected
salary increase. The sensitivity analysis below have been determined based on reasonably possible changes of
the respective assumptions occurring at the end of the reporting period, while holding all other assumptions
constant.
If the discount rate increases/(decrease) by 1%, the defined benefit obligation would be ' 620.54 Million/(' 693.62)
Million as at March 31, 2025.
If the expected salary growth increases/(decrease) by 1%, the defined benefit obligation would be ' 684.35 Million/
(' 626.27) Million as at March 31, 2025.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit
obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of
the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has
been calculated using the projected unit credit method at the end of the reporting period, which is the same as
that applied in calculating the defined benefit obligation liability recognised in the balance sheet.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
There has been no change in the process used by the Company to manage its risks from prior periods.
Expected company contributions for FY 24-25 is ' 92.51 millions
48.1 Categories of financial instruments (contd)
Fair value hierarchy
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are
either observable or unobservable and consist of the following three levels:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
Fair value of the Company's financial assets and financial liabilities that are measured at fair value
on a recurring basis
Some of the Company's financial assets and financial liabilities are measured at fair value at the end of each
reporting period. The following table gives information about how the fair values of these financial assets and
financial liabilities are determined (in particular, the valuation technique(s) and inputs used).
48.2 Fair value of financial assets and financial liabilities that are not measured at fair value (but fair value
disclosures are required)
The Company considers that the carrying amounts of financial assets and financial liabilities recognised in the
financial statements at amortized cost will reasonably approximate their fair values.
48.3 Financial risk management
The Company’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The
Company’s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential
adverse effects on its financial performance. The primary market risk to the Company is foreign exchange risk.
The Company uses derivatives financial instruments to mitigate foreign exchange related risk exposures. All
derivative activities for risk management purposes are carried out by teams that have the appropriate skills,
experience and supervision. It is the Company’s policy that no trading in derivatives for speculative purposes
maybe undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which
are summarised below:
48.3 Financial risk management (contd)
Foreign currency risk management
The Company is exposed to foreign exchange risk due to:
- debt availed in foreign currency
- net investments in subsidiaries and joint ventures that are in foreign currencies
- exposure arising from transactions relating to purchases, revenues, expenses, etc., to be settled (within and
outside the group) in currencies other than the functional currency (i.e Indian rupees)
Exchange rate exposures are managed within approved policy parameters by utilising forward foreign exchange
contracts.
48.3.1 Forward foreign exchange contracts
It is the policy of the Company to enter into forward foreign exchange contracts to cover the risk associated with
anticipated sales transactions out to 6 months within 50% to 70% of the exposure generated.
The following table details the forward foreign currency contracts outstanding at the end of the reporting period:
48.3.2 Foreign currency sensitivity analysis
Financial instruments affected by changes in foreign exchange rates include loans in foreign currencies and
receivables/payables from/to subsidiaries and joint ventures. The Company considers US Dollar, Australian Dollar
and the Euro to be principal currencies which require monitoring and risk mitigation. The Company is exposed
to volatility in other currencies including the Great Britain Pounds (GBP), United States Dollar (USD), Euro (EUR),
Canadian Dollar (CAD), Singapore Dollar (SGD) and the Australian Dollar (AUD). The impact on account of 5%
appreciation / depreciation in the exchange rate of the above foreign currencies against ' is given below:
The impact on profit has been arrived at by applying the effects of appreciation / deprecation effects of currency
on the net position (Assets in foreign currency - Liabilities in foreign currency) in the respective currencies.
For the purposes of the above table, it is assumed that the carrying value of the financial assets and liabilities
as at the end of the respective financial years remains constant thereafter. The exchange rate considered for the
sensitivity analysis is the exchange rate prevalent as at each year end.
The sensitivity analysis might not be representative of inherent foreign exchange risk due to the fact that the
foreign exposure at the end of the reporting period might not reflect the exposure during the year.
48.4 Interest rate risk management
Interest rate risk arises from borrowings. Debt issued at variable rates exposes the Company to cash flow risk.
Debt issued at fixed rate exposes the Company to fair value risk.
48.4.1 Interest rate sensitivity analysis
Financial instruments affected by interest rate changes include secured long term loans from banks and secured
long term loans from others. The impact of a 1% change in interest rates on the profit of an annual period will
be ' 115.63 Million (March 31, 2024: 159.6 Million) assuming the loans at each year end remain constant during
the respective years. This computation does not involve a revaluation of the fair value of loans as a consequence
of changes in interest rates. The computation also assumes that an increase in interest rates on floating rate
liabilities will not necessarily involve an increase in interest rates on floating rate financial assets.
48.5 Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial
loss to the Company. Credit risk to the company primarily arises from trade receivables. Credit risk also arises
from cash and cash equivalents, financial instruments and deposits with banks and financial institutions and
other financial assets.
Credit risk is controlled by analysing the credit limits and credit worthiness of customers on a continuous basis
to whom credit has been given after obtaining necessary approvals.
The Company is not significantly exposed to geographical credit risk as the counterparties operate across various
countries across the globe.
Credit risk on cash and cash equivalent and derivatives is limited as the Company generally transacts with banks
and financial institutions with high credit ratings assigned by international and domestic credit rating agencies.
In determining the allowance for doubtful trade receivables, the Company has used a practical expedient by
computing the expected credit 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 expected
credit loss allowance is based on the ageing of the receivables that are due and rates as given in the provision
matrix. The Provision matrix at the end of reporting period as follows:
48.6 Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of directors, which has established an
appropriate liquidity risk management framework for the management of the Company's short-term, medium-
term and long-term funding and liquidity management requirements. The Company manages liquidity risk by
maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring
forecast and actual short term and long term cash flows, and by matching the maturity profiles of financial assets
and liabilities. A portion of the company's surplus cash is retained as investments in liquid mutual funds or fixed
deposits to fund short term requirements.
48.6.1 Liquidity analysis for non-derivative liabilities
The table below summarises the maturity profile of the Company’s financial liabilities at the reporting date. The
amounts are based on undiscounted contractual financial liabilities.
49. Capital management
The Company manages its capital to ensure that entities in the Group will be able to continue as going concerns
while maximising the return to stakeholders through the optimisation of the debt and equity balance. The
capital structure of the Company consists of net debt (borrowings as detailed in note 20 offset by cash and bank
balances) and total equity.
(d) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(e) 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:
(i) 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
(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
51. Other Statutory Information (contd)
(f) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding
Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(i) 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
(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
(g) The Company has not done 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.
(h) The Company has complied with the number of layers prescribed under the Companies Act, 2013.
(i) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible
assets or both during the current or previous year.
(j) The Company has borrowings from banks and financial institutions on the basis of security of current
assets. The quarterly returns or statements of current assets filed by the Company with banks and financial
institutions are in agreement with the books of accounts.
(k) The Company have not been declared as wilful defaulter by any bank or financial institution or government
or any government authority.
52. The detailed transfer pricing regulations (‘regulations’) for computing the income from “domestic transactions”
with specified parties and international transactions between ‘associated enterprises’ on an ‘arm’s length’
basis is applicable to the Company. These regulations, inter alia, also require the maintenance of prescribed
documents and information including furnishing a report from an Accountant which is to be filed with the
Income tax authorities.
The Company has undertaken necessary steps to comply with the transfer pricing regulations. The
Management is of the opinion that the transactions with associated enterprises and domestic transactions
are at arm’s length, and hence the aforesaid legislation will not have any material impact on the financial
statements, particularly on the amount of tax expense and that of provision for taxation.
53. During the year ended March 31, 2025, the Company has made provision, as required under the applicable
law or accounting standards, for material foreseeable losses on long-term contracts including derivative
contracts (refer note 10 & 21).
54. The Board of Directors have proposed a final dividend of ' 4 per share which shall result in cash outflow of
' 369 millions (approx). The proposed dividend is subject to the approval of the shareholders in the Annual
General Meeting.
The accompanying notes are an integral part of the standalone financial statements
As per our report of even date attached
for B S R & Co. LLP for and on behalf of Board of Directors of
Chartered Accountants Strides Pharma Science Limited
Firm Registration Number:
101248W/ W-100022 Arun Kumar Badree Komandur
Non-Executive Director & Chairperson Managing Director & Group CEO
DIN:00084845 DIN:07803242
G Prakash Manjula R. Vikesh Kumar
Partner Company Secretary Group CFO
Membership Number: 099696 Membership Number: A30515
Bengaluru, May 22, 2025 Bengaluru, May 22, 2025
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