3.10 Provision and Contingent Liabilities
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past
events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be
reliably estimated. Provisions are not recognised for future operating losses.
Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence
will be confirmed by the occurrence or non occurrence of one or more uncertain future events not wholly within the
control of the Company or where any present obligation cannot be measured in terms of future outflow of resources
or where a reliable estimate of the obligation cannot be made.
3.11 Revenue Recognition
Revenue from contract with customers is recognised when the Company satisfies performance obligation by
transferring promised goods and services to the customer. Performance obligations are satisfied at the point of
time when the customer obtains controls of the asset.
Revenue is measured based on transaction price, which is the fair value of the consideration received or receivable,
stated net of discounts, returns and taxes. Transaction price is recognised based on the price specified in the
contract,net of discount.
Revenue from Services
Revenue from services is recognised in the accounting period in which the services are rendered.
Other Operating Revenue - Export Incentives
"Export Incentives under various schemes are accounted in the year of export.
Interest Income
Interest income is recognized using the effective interest rate (EIR) method
Dividend Income
Dividend income on investments is recognised when the right to receive dividend is established.
3.12 Foreign Currency Translation
The Company's financial statements are presented in Indian currency, which is also the company's functional
currency.
Transactions and Balances
Transactions in foreign currencies are initially recorded in functional currency spot rates at the date the transaction
first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot
rates of exchange at the reporting date.
Exchange differences arising on settlement or translation of monetary items are recognised in profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
3.13 Income Tax
Income tax comprises current and deferred tax. Income tax expense is recognized in the statement of profit and
loss except to the extent it relates to items directly recognized in other comprehensive income.
Current Tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit before tax as
reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in
other years and items that are never taxable or deductible. The Company's current tax is calculated using tax rates
that have been enacted or substantively enacted by the end of the reporting period. The Company offsets current
tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and
where it intends either to settle on a net basis, or to realize the asset and liability simultaneously.
Deferred Tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in
the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred
tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally
recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be
available against which those deductible temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to
be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in
which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period.
The Company offsets deferred income tax assets and liabilities, where it has a legally enforceable right to offset
current tax assets against current tax liabilities, and they relate to taxes levied by the same taxation authority on
either the same taxable entity, or on different taxable entities where there is an intention to settle the current tax
liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.
3.14 Earning Per Share
Basic earnings per share is computed by dividing the profit after tax by the weighted average number of equity
shares outstanding during the year.
Diluted earnings per share is computed by dividing the profit after tax as adjusted for dividend, interest and other
charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of
equity shares considered for deriving basic earnings per share and the weighted average number of equity shares
which could have been issued on the conversion of all dilutive potential equity shares.
3.15 Borrowing Cost
Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of
borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as
an adjustment to the interest cost. Borrowing costs directly attributable to the acquisition, construction or production
of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized
as part of the cost of the respective asset. All other borrowing costs are expensed in the period they are incurred.
3.16 Government Grants
Government grants are not recognised until there is reasonable assurance that the Company will comply with the
conditions attaching to them and that the grants will be received.
Government grants are recognised in profit or loss on a systematic basis over the periods in which the Company
recognises as expenses the related costs for which the grants are intended to compensate.
Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities
as deferred income and are credited to Profit and Loss on a straight - line basis over the expected lives of related
assets and presented within other income.
3.17 Share Based Payment
Equity-settled share-based payments to employees are measured at the fair value of the equity instruments at the
grant date.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight¬
line basis over the vesting period, based on the Company's estimate of equity instruments that will eventually vest,
with a corresponding increase in equity. At the end of each reporting period, the Company revises its estimate
of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any,
is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding
adjustment to the equity-settled employee benefits reserve.
3.18 Critical Estimates and Judgements
The preparation of financial statements requires the use of accounting estimates which by definition will seldom
equal the actual results. Management also need to exercise judgement in applying the Group's accounting policies.
This note provides an overview of the areas that involved a higher degree of judgement or complexity, and items
which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than
those originally assessed. Detailed information about each of these estimates and judgements is included in
relevant notes together with information about the basis of calculation for each affected line item in the financial
statements.
The areas involving critical Estimates or Judgement are:
Estimation of Defined benefit obligation
Estimation of current tax expenses and Payable
Useful lives of depreciable assets
Provision and contingent liability
Carry value of investment in subsidiary and associates
43. EXPORT PROMOTION CAPITAL GOODS (EPCG)
Export Promotion Capital Goods (EPCG) scheme allows import of certain capital goods at concessional duty subject to
an export obligation for the duty saved on capital goods imported under EPCG scheme. The duty saved on capital goods
imported under EPCG scheme being Government Grant, is accounted as stated in the Accounting policy on Government
Grant.
46. SEGMENT REPORTING DISCLOSURE
The company primarily operates in the Fashion apparels and accessories segment. The Fashion apparels and accessories
segment includes Leather products, Textiles products and intermediaries.
As defined in Ind AS 108, the chief operating decision maker (CODM) evaluates the Group's performance, allocate
resources based on the analysis of the various performance indicator of the Group as a single unit. Therefore, there is no
reportable segment for the Group as per the requirement of Ind AS 108 "Operating Segments".
47. The Company has assessed the financial impact arising from the implementation of the New Labour Codes. Although
the impact is not material, the same has been recognised in the financial results quarter 31st December, 2025 and year
ended 31st March, 2026. The Company has presented the impact under the head Employee Benefit Expenses amounting
to Rs. 187.59 lakhs in the standalone financial results for the period under review. The Company continues to monitor
.further developments and any additional impact, if identified, will be evaluated and accounted for appropriately.
48. During the year the company has taken temporary interest bearing unsecured loan from Bhartiya Urban Private Limited
(Associate Company) for meeting its short term fund requirements. The maximum outstanding balance of the loan during
the year was INR 30 crores and the closing balance of the loan asat31st March 2026 is NIL.
49. The Net worth of a subsidiary has been substantial eroded and there is a consequent possibility of impairment of equity
investment of Rs. 4.78 crore. Looking into the subsidiary future plans, growth prospects and determining it's valuation
based on forecasting and discounting future cashflows, such impairment in the opinion of management is considered
to be temporary in nature and no impairment in value of the investment is required to be made in the accounts of the
company.
51. FAIR VALUE MEASUREMENT
The fair value of the financial assets and liabilities are included at the amount that would be received to sell an asset and
paid to transfer a liability in an orderly transaction between market participants.
The following methods and assumptions were used to estimate the fair values:
Trade receivables, cash and cash equivalents, other bank balances, short term loans, other current financial assets,
current borrowings, trade payables and other current financial liabilities, : approximate their carrying amounts largely
due to the short-term maturities of these instruments.
Investments traded in active markets are determined by reference to quotes from the financial institutions; for example:
Net asset value (NAV) for investments in mutual funds declared by mutual fund house.
The fair values for loans, security deposits were calculated based on cash hows discounted using a current lending rate.
They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including
counter party credit risk.
The fair values of non-current borrowings are based on discounted cash hows using a current borrowing rate. They are
classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.
The Company uses the following hierarchy for determining and disclosing the fair value of financial
instruments by valuation techniques.
The following is the basis for categorising the financial instruments measured at fair value into Level 1 to Level 3 :
Level 1: This level includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets
for identical assets or liabilities.
52. CAPITAL 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 of the Company. The primary objective of the Company's capital
management is to maximise the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the
requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend
payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a
gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest
bearing loans and borrowings less cash and cash equivalents.
In order to achieve this overall objective, the Company's capital management, amongst other things, aims to ensure that it
meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements.
Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have
been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.
No changes were made in the objectives, policies or processes for managing capital during the years ended March 31,
2026 and March 31,2025.
53. FINANCIAL RISK MANAGEMENT
The Company's management monitors and manages the financial risks relating to the operations of the Company. These
risks include credit risk, liquidity risk and market risk (including currency risk, interest rate risk and other price risk).
Credit Risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Company. To manage this, the Company periodically assesses financial reliability of customers and other counter parties,
taking into account the financial condition, current economic trends , and analysis of historical bad debts and ageing of
financial assets.
Financial instruments that are subject to concentrations of credit risk, principally consist of balance with banks, investments
in debt instruments/bonds, trade receivables, loans and advances. None of the financial instruments of the Company
result in material concentrations ofcredit risks.
The age analysis of trade receivables as of the balance sheet date have been considered from the due date and disclosed
in below table.
Liquidity Risk
The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing
facilities, by continuously monitoring forecast and actual cash hows, and by matching the maturity profiles of financial
assets and liabilities.
The surplus funds with the Company and operational cash hows will be sufficient to dispose the financial liabilities within
the maturity period.
Market Risk
Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash hows that May, result from a
change in the price of a financial instrument. The Company's activities expose it primarily to the financial risks of changes
in foreign currency exchange rates and interest rates risk/liquidity risk which impact returns on investments. Market risk
exposuresare measured using sensitivityanalysis.
Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash hows of a financial instrument will fluctuate because of changes
in market interest rates. The Company's exposure to the risk of changes in market interest rates relates primarily to the
debt obligations with floating interest rates. The Company manages its interest rate risk by having a balanced portfolio
of fixed and variable rate loans and borrowings.
Foreign Currency Risk Management
The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate
fluctuations arise. The carrying amounts of the Company's foreign currency denominated monetary assets and monetary
liabilities at the end of the reporting period are as follows:
Foreign Currency Sensitivity
The following table details the Company's sensitivity to a 5% change in rupee value against the relevant foreign
currencies, which is used when reporting foreign currency risk internally to key management personnel and represents
management's assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes
only outstanding foreign currency denominated monetary items and adjusts their translation at the period end.
In management's opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the
exposure at the end of the reporting period does not reflect the exposure during the year.
Disclosure Regarding Derivative Instruments.
The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations
relating to accounts receivable . The use of foreign currency forward contracts is governed by the Company's strategy
approved by the Board of Directors, which provide principles on the use of such forward contracts consistent with the
Company's Risk Management Policy. The Company does not use forward contracts for speculative purposes.
The following are outstanding forward contracts.
|