There has been no revaluation of Property, Plant and Equipment (PPE) and Intangible assets during the year ended March 31, 2025 and March 31, 2024. The Company holds the title deeds of all immovable properties in their name.
Considering internal and external sources of information, the Company has evaluated at the end of the reporting period, whether there is any indication that any intangible asset (including intangible assets under development) may be impaired. Where such indication exists, the Company has estimated the recoverable amount of the intangible assets (including intangible assets under development) based on 'value in use' method. The financial projections on the basis of which the future cash flows have been estimated consider (a) reassessment of the discount rates, (b) revisiting the growth rates factored while arriving at terminal value, and these variables have been subjected to a sensitivity analysis. The carrying amount of the intangible assets (including intangible assets under development) represent the Company's best estimate of the recoverable amounts.
Refer Note 34B(a) for the contractual capital commitments for purchase of Property, Plant & Equipment.
Refer Note 38 for assets hypothecated/mortgaged as securities against the Secured Borrowings.
Refer note 46 for details of capital research & development expenditure.
Refer note 51 and 52 for ageing and movement of Capital Work in Progress and Intangible Assets under development.
1. Terms of Redeemable Preference shares (RPS) having nominal value of EURO. 1 each
During the year, the Company has converted the loan given into Redeemable Preference shares (RPS) in the month of August 2024. The issuer has an early redemption option before expiry of 10 years. Post 10 years and up to completion of 20 years, the investor has the redemption option. Redemption will be at face value along with accumulated premium to provide IRR of 7% per annum. Non-cumulative dividend on preference shares shall be payable at 0.1% only in case of adequate profits.
2. Terms of Zero Coupon optionally fully convertible debentures (OFCD) of ^ 10 each
During the year, the Company has converted the loan given by subscribing for optionally fully convertible debentures in the month of October 2024. Both, the issuer and investor shall have an option to convert each OFCD into 1 equity share of ? 10/- each by giving a month notice. The OFCDs are convertible into equity shares of face value of ? 10/- each or at a fair value determined as per Rule 11UA of Income Tax Rules, 1962 whichever is higher as on the date of issue of OFCD, for every 1 OFCD held, at any time. If not converted earlier, Issuer has the option to redeem or convert the outstanding OFCDs on expiry of 10 years from the date of allotment at par.
The credit period on sale of goods and services generally ranges from 7 to 150 days.
The Company has a documented Credit Risk Management Policy for its Pharmaceuticals Manufacturing and Services business. For every new customer (except established large pharma companies), the Company performs a credit rating check using an external credit agency. If a customer clears the credit rating check, the credit limit for that customer is derived using internally documented scoring systems. The credit limits for all the customers are reviewed on an ongoing basis.
Of the Trade Receivables balance as at March 31, 2025 of ? 1,666.69 Crores, (Previous Year: ? 1,331.38 Crores) the top 3 customers of the Company represent the balance of ? 733.16 Crores (Previous year: ? 401.41 Crores). There are three customers (Previous year two Customer) who represent more than 5% of total balance of Trade Receivables.
The Company has used a practical expedient by computing the expected credit loss allowance for External Trade Receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience, adjusted for forward looking information. The Company has concluded that the carrying amount of the trade receivables represent the Company's best estimate of the recoverable amounts. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in the provision matrix.
35. EMPLOYEE BENEFITS:
Brief description of the Plans:
Other Long Term Employee Benefit Obligations:
Leave Encashment, which is expected to be availed or encashed beyond 12 months from the end of the year is treated as other long term employee benefits. The Company's liability is actuarially determined (using the Projected Unit Credit method) at the end of each year. Actuarial losses/gains are recognised in the Statement of Profit and Loss in the year in which they arise.
Long Term Service Award is recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date.
Defined Contribution plans:
The Company's defined contribution plans are Provident Fund (in case of certain employees), Superannuation, Employees State Insurance Fund and Employees' Pension Scheme (under the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952). The Company has no further obligation beyond making the contributions to such plans.
Post-employment benefit plans:
Gratuity for employees in India is as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for the number of years of service. The gratuity plan is a funded plan and the Company makes contributions to recognised funds in India.
The Company's Gratuity Plan is administered by an insurer and the Investments are made in various schemes of the trust. The Company funds the plan on a periodical basis.
In case of certain employees, Provident fund is administered through an in-house trust. Periodic contributions to the trust are invested in various instruments considering the return, maturity, safety, etc., within the overall ambit of the Provident Fund Trust Rules and investment pattern notified through the Ministry of Labour investment guidelines for exempted provident funds.
These plans typically expose the Group to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.
Investment risk
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. Plan investment is a mix of investments in government securities, equity, mutual funds and other debt instruments.
Interest risk
A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan's debt investments.
Longevity risk
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan's liability.
Salary risk
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan's liability.
The gratuity plan is a funded plan and the Company makes contributions to trust administered by the Company. The Company does not fully fund the liability and maintains a target level of funding to be maintained over a period of time based on estimations of expected gratuity payments. In respect of certain employees, Provident Fund contributions are made to a Trust administered by the Company. The contributions made to the trust are recognised as plan assets. Plan assets in the Provident fund trust are governed by local regulations, including limits on contributions in each class of investments.
The Company actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising from the employee benefit obligations, with the objective that assets of the gratuity/provident fund obligations match the benefit payments as they fall due. Investments are well diversified, such that the failure of any single investment would not have a material impact on the overall level of assets.
A large portion of assets consists of government and corporate bonds, although the Company also invests in equities, cash and mutual funds. The plan asset mix is in compliance with the requirements of the regulations in case of Provident fund.
The expected rate of return on plan assets is based on market expectations at the closing of the year. The rate of return on longterm government bonds is taken as reference for this purpose.
In case of certain employees, the Provident Fund contribution is made to a Trust administered by the Company. In terms of the Guidance note issued by the Institute of Actuaries of India, the actuary has provided a valuation of Provident fund liability based on the assumptions listed above and determined that there is no shortfall at the end of each reporting period.
* Attrition rate (30% per annum for service of 4 years and below and 8.5% per annum for service 5 years and above for year ending March 25 and March 24) considered is the management's estimate based on the past long-term trend of employee turnover in the Company. The tenure has been considered taking into account the past long-term trend of employees' average remaining service life which reflects the average estimated term of post-employment benefit obligation.
The Company's Gratuity Plan is administered by an insurer and the Investments are made in various schemes of the trust. The Company funds the plan on a periodical basis.
In case of certain employees, Provident fund is administered through an in-house trust. Periodic contributions to the trust are invested in various instruments considering the return, maturity, safety, etc., within the overall ambit of the Provident Fund Trust Rules and investment pattern notified through the Ministry of Labour investment guidelines for exempted provident funds.
Weighted average duration of the defined benefit obligation is 8 years. (Previous year: 6 years)
The above sensitivity analysis are based on change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The 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.
The liability for Leave Encashment (Non-Funded) as at March 31,2025 is ? 42.31 Crores. (Previous year: ? 43.07 crores)
The liability for Long term Service Awards (Non-Funded) as at March 31,2025 is ? 3.56 Crores. (Previous year: ? 3.04 crores)
42. Earnings Per Share (EPS) -The Company presents basic and diluted earnings per share ("EPS") data for its ordinary shares. Basic EPS is calculated by dividing the net profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year.
The weighted average number of shares outstanding during the previous year is adjusted for events such as rights issue (including the bonus element) that have changed the number of shares outstanding.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding is adjusted for the effects of all dilutive potential ordinary shares such as Employee stock options etc.
45. RISK MANAGEMENT
The Company's activities expose it to market risk, liquidity risk and credit risk. The Company has an independent and dedicated Enterprise Risk Management (ERM) system to identify, manage and mitigate business risks. The Senior Management along with a centralized treasury manages the liquidity and interest rate risk on the balance sheet.
(iii) The Company has generated lease rent income amounting to ? 3.26 Crores (Previous year: ? 3.97 Crores ) from leasing out building premises. This is included in miscellaneous income.
(iv) Total cash out flow for above leases amounts to ? 10.13 crores (Previous year: ? 7.85 crores)
44. CAPITAL MANAGEMENT
The Company manages its capital to ensure that it will be able to continue as going concern 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 17 & 20 offset by cash and bank balances) and total equity of the Company.
The Company determines the amount of capital required on the basis of annual as well as long term operating plans and other strategic investment plans. The funding requirements are met through non convertible debt securities or other long-term / shortterm borrowings. The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
a. Liquidity Risk Management
Liquidity Risk refers to insufficiency of funds to meet the financial obligations. Liquidity Risk Management implies maintenance of sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit lines to meet obligations when due.
The Senior Management along with centralized treasury is responsible 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 by continuously monitoring forecast and actual cash flows, and by assessing the maturity profiles of financial assets and liabilities. The Company has access to undrawn borrowing facilities at the end of each reporting period, as detailed below:
This includes Short Term Borrowings limits including but not limited to Working Capital Demand Loans, Packing Credits, Letter of Credits, etc. where credit rating has been obtained and which can be issued, if required, within a short period of time.
The following table details the Company's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The table have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows. To the extent that interest flows are floating rate, the rate applicable as of reporting period ends respectively has been considered.
In assessing whether the going concern assumption is appropriate, the Company has considered a range of factors relating to current and expected profitability, debt repayment schedule and potential sources of replacement financing. The Company has performed sensitivity analysis on such factors considered and based on current indicators of future economic conditions; there is a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future.
The balances disclosed in the table above are the contractual undiscounted cash flows.
b. Interest Rate Risk Management
The Company is exposed to interest rate risk as it has assets and liabilities based on floating interest rates as well. Senior Management along with centralised treasury assess the interest rate risk run by it and provide appropriate guidelines to the treasury to manage the risk. The Senior Management along with centralised treasury reviews the interest rate risk on periodic basis and decides on the asset profile and the appropriate funding mix. The Senior Management along with centralised treasury reviews the interest rate gap statement and the interest rate sensitivity analysis.
The sensitivity analysis below have been determined based on the exposure to interest rates for liabilities at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liabilities outstanding at the end of the reporting period was outstanding for the whole year and the rates are reset as per the applicable reset dates. The basis risk between various benchmarks used to reset the floating rate liabilities has been considered to be insignificant.
If interest rates related to borrowings had been 100 basis points higher/lower and all other variables were held constant, the Company's Profit before tax for the year ended/Other Equity (pre-tax) as on March 31, 2025 would decrease/increase by ? 12.17 Crores for total borrowings (Previous year: ? 11.30 Crores). This is attributable to the Company's exposure to borrowings at floating interest rates.
If interest rates related to loans given had been 100 basis points higher/lower and all other variables were held constant, the Company's Profit before tax for the year ended/Other Equity (pre-tax) as on March 31, 2025 would increase/decrease by ? 4.48 Crores (Previous year: ? 13.70 Crores). This is attributable to the Company's exposure to lendings at floating interest rates.
c. Foreign Currency Risk Management
The Company is exposed to Currency Risk arising from its trade exposures and Capital receipt/payments denominated, in other than the Functional Currency. The Company has a detailed policy which includes setting of the recognition parameters, benchmark targets, the boundaries within which the treasury has to perform and also lays down the checks and controls to ensure the effectiveness of the treasury function.
The Company has defined strategies for addressing the risks for each category of exposures (e.g. for exports , for imports, for loans, etc.). The centralised treasury function aggregates the foreign exchange exposure and takes prudent measures to hedge the exposure based on prevalent macro-economic conditions.
d. Accounting for cash flow hedge
The objective of hedge accounting is to represent, in the Company's financial statements, the effect of the Company's use of financial instruments to manage exposures arising from particular risks that could affect profit or loss. As part of its risk management strategy, the Company makes use of financial derivative instruments in the form of forward exchange contracts for hedging the risk arising on account of highly probable foreign currency forecast sales.
For derivative contracts designated as hedge, the Company documents, at inception, the economic relationship between the hedging instrument and the hedged item, the hedge ratio, the risk management objective for undertaking the hedge and the methods used to assess the hedge effectiveness. The derivative contracts have been taken to hedge foreign currency fluctuations risk arising on account of highly probable foreign currency forecast sales.
The Company applies cash flow hedge to hedge the variability arising out of foreign exchange currency fluctuations on account of highly probable forecast sales. Such contracts are generally designated as cash flow hedges.
The Company determines the existence of an economic relationship between the hedging instrument and hedged item based on the currency, amount and timing of their respective cash flows. The forward exchange forward contracts are denominated in the same currency as the highly probable future sales, therefore the hedge ratio is 1:1. Further, the entity has excluded the foreign currency basis spread and takes such excluded element through the income statement. Accordingly, the Company designates only the spot rate in the hedging relationship.
The Company has a Board approved policy, adopted at group level on assessment, measurement and monitoring of hedge effectiveness which provides a guideline for the evaluation of hedge effectiveness, treatment and monitoring of the hedge effective position from an accounting and risk monitoring perspective. Hedge effectiveness is ascertained at the time of inception of the hedge and periodically thereafter. The Company assesses hedge effectiveness on prospective basis. The prospective hedge effectiveness test is a forward looking evaluation of whether or not the changes in the fair value or cash flows of the hedging position are expected to be highly effective in offsetting the changes in the fair value or cash flows of the hedged position over the term of the relationship.
Hedge effectiveness is assessed through the application of dollar offset method and designation of spot rate as the hedging instrument. The excluded portion of the foreign currency basis spread is taken directly through income statement.
(i) The table below enumerates the Company's hedging strategy, typical composition of the Company's hedge portfolio, the instruments used to hedge risk exposures and the type of hedging relationship for the year ended March 31, 2025 and March 31, 2024:
The Company considers that carrying amounts of financial assets and financial liabilities disclosed above approximate their fair values. b) Fair Value Hierarchy and Method of Valuation
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the group has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Except for those financial instruments for which the carrying amounts are mentioned in the above table, the Company considers that the carrying amounts recognised in the financial statements approximate their fair values.
For financial assets/liabilities that are measured at fair value, the carrying amounts are equal to the fair values.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments and mutual funds that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. Valuation techniques used to determine the fair values:
i. This includes mutual funds and equity shares which are fair valued using quoted prices and closing NAV in the market.
ii. This includes forward exchange contracts. The fair value of the forward exchange contract is determined using forward exchange rate at the balance sheet date.
iii. This includes investment in equity shares whose fair value approximates cost as there hasn't been a material event to suggest the change in value.
54. The Company has not been declared as wilful defaulter by any bank or financial institution or any other lender.
55. The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.
56. The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
57. The Company has not traded or invested in crypto currency or virtual currency during the financial year.
58. Quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the unaudited books of account of the Company of the respective quarters. The statement for the quarter ended March 31, 2025 will be submitted to the bank basis audited financial statements for the year ended March 31, 2025.
59. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
60. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
62. AUDIT SERVER BACKUP:
As per MCA notification dated August 05, 2022, the Central Government has notified the Companies (Accounts) Fourth Amendment
Rules, 2022. As per the amended rules, the company has maintained relevant back up of the books of account and other relevant
books and papers in electronic mode that should be accessible in India at all the time. Also, the company has created back up on
servers physically located in India on a daily basis.
Audit trail:
(a) Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 (hereinafter referred as "the Account Rules") states that for the financial year commencing on or after the April 1, 2023, every Company which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.
(b) The audit trail feature as required was enabled in accounting software(s) for maintaining its books of account throughout the year. The audit trail was enabled at the database level to log any direct data changes except in respect of one of its divisions, where audit trail at the database level was enabled from April 25, 2024 onwards.
(c) The Company has not tampered with the audit trail feature in respect of the accounting software(s) for the period for which the audit trail feature was operating.
(d) As the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 regarding the preservation of audit trail is applicable from April 1, 2023, the Company has retained audit trails, except that in respect of one of its divisions where audit trail retention at application level and master table level was maintained from June 29, 2023 and September 9, 2023 respectively.
The above goodwill relates to acquisition of Hemmo Pharmaceuticals Private Limited of ? 145.05 Crores (Previous year: ? 145.05 Crores), Convergence Chemicals Private Limited of 8.08 Crores (Previous year: ? 8.08 crores) and pharma business of Piramal Enterprises Limited (demerged undertaking as defined in the scheme) of ? 7.42 Crores (Previous year: ? 7.42 Crores).
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to the cash generating units (CGU) or group of CGUs, which are benefited from the synergies of the acquisition. Goodwill is reviewed for any impairment at the operating segment, which is represented through group of CGUs.
The recoverable amount of a CGU is the higher of its fair value less cost to sell and its value-in-use.
CGUs to which goodwill has been allocated are tested for impairment annually, or more frequently when there is indication for impairment. The financial projections basis which the future cash flows have been estimated consider (a) reassessment of the discount rates, (b) revisiting the growth rates factored while arriving at terminal value and subjecting these variables to sensitivity analysis. If the recoverable amount of a CGU is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit on a pro-rata basis of the carrying amount of each asset in the unit.
The recoverable amount being fair value was computed using the discounted cash flow method for which the estimated cash flows for a period of 5 years were developed using internal forecasts, and a post-tax discount rate of 12.50% (Previous year-14.72%) and growth rate of 7% (Previous year-5%) (Fair Value Hierarchy - Level 3).
The management believes that any reasonably possible changes in the key assumptions would not cause the carrying amount to exceed the recoverable amount of cash generating unit.
Based on the above, no impairment was identified as of March 31, 2025 as the recoverable value of the CGUs exceeded the carrying values.
64. RIGHTS ISSUE OF EQUITY SHARES
a) During the previous year, the Committee of Directors (Rights Issue) at its meeting held on July 27, 2023, has inter alia considered and approved the rights issue of 129,629,630 fully paid-up Equity Shares price at ? 81 per equity share [including a premium of ? 71 per Equity Share] on Rights basis to the eligible equity shareholders in the ratio of 5 rights equity shares for every 46 equity shares held by the eligible equity shareholder for amount aggregating up to ? 1,050 crores. Out of the aforesaid issue, 129,604,598 and 25,032 equity shares were allotted by the Company on August 22, 2023 and on September 27, 2023, respectively.
These assumptions reflect management's best estimates, but these assumptions involve inherent market uncertainties based on market conditions generally outside of the Company's control. As a result, if other assumptions had been used in the current period, stock-based compensation expense could have been materially impacted. Further, if management uses different assumptions in future periods, stock-based compensation expense could be materially impacted in future years.
The estimated fair value of stock options is recognised in the statement of profit and loss on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in-substance, multiple awards.
65. ESOP DISCLOSURE
Piramal Pharma Limited - Employee Stock Option and Incentive Plan 2022 ("PPL Plan 2022")
The Company constituted the PPL 2022 Plan for all eligible employees pursuant to the special resolution approved by the shareholders in the Annual General Meeting held on July 28, 2022. The PPL 2022 Plan covers all employees and directors (excluding promoter, promoter group and directors holding more than 10% of the outstanding equity shares of the Company) of the Company and its subsidiaries (collectively, "eligible employees"). The Nomination and Remuneration Committee of the Board of the Company (the "Committee") administers the PPL 2022 Plan and grants stock options to eligible employees. The Committee determines which eligible employees will receive options, the number of options to be granted, the exercise price, the vesting period and the exercise period. The vesting period is determined for all options issued on the date of grant. The share options can be exercised up to three years or five years after the end of the vesting period and therefore, the contractual term of the options granted is 1 to 8 years.
Pursuant to the special resolution approved by the shareholders in the Annual General Meeting held on July 28, 2022, the Piramal Pharma Limited Employees Welfare Trust (the "ESOP Trust") was formed to support the Piramal Pharma Limited - Employee Stock Option and Incentive Plan 2022 by acquiring, from the Company or through secondary market acquisitions, equity shares which are used for issuance to eligible employees (as defined therein) upon exercise of stock options thereunder.
66. The financial statements have been approved for issue by Company's Board of Directors on May 14, 2025.
(b) Fair Value of stock options granted:
The fair value of services received in return for stock options granted to employees is measured by reference to the fair value of stock options granted. The fair value of stock options granted under the PPL 2022 Plan has been measured using the Black Scholes Option Pricing Model ('BS Model') at the date of the grant.
The Black Scholes Option Pricing Model ('BS Model') includes assumptions regarding dividend yields, expected volatility, expected terms and risk free interest rates. In respect of options granted, the expected term of an option (or "Life of Option") is estimated based on the vesting term and contractual term, as well as the expected exercise behaviour of the employees receiving the option. Expected volatility of the option is based on historical volatility of comparable companies during a period equivalent to the option life, of the observed market prices of the comparable companies publicly traded equity shares as historical volatility of PPL not considered due to limited trading history. Dividend yield of the options is based on recent dividend activity. Risk-free interest rates are based on the government securities yield in effect at the time of the grant.
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