(xi) Provisions (other than employee benefits)
A provision is recognized if, as a result of a past event, the
Company has a present legal or constructive obligation that
can be estimated reliably, and it is probable that an outflow
of economic benefits will be required to settle the obligation.
Provisions are determined by discounting the expected future
cash flows (representing the best estimate of the expenditure
required to settle the present obligation at the balance sheet
date) at a pre-tax rate that reflects current market assessments
of the time value of money and the risks specific to the liability.
The unwinding of the discount is recognised as finance cost.
Expected future operating losses are not provided for.
Decommissioning liability
Decommissioning costs are provided at the present value of
expected costs to settle the obligation using estimated cash
flows and are recognised as part of the cost of the particular
asset. The cash flows are discounted at a current pre-tax rate
that reflects the risks specific to the decommissioning liability.
The unwinding of the discount is expensed as incurred and
recognised in the statement of profit and loss as a finance cost.
The estimated future costs of decommissioning are reviewed
annually and adjusted as appropriate. Changes in the estimated
future costs or in the discount rate applied are added to or
deducted from the cost of the asset.
Contingencies
Provision in respect of loss contingencies relating to claims,
litigation, assessment, fines, penalties, etc. are recognized when
it is probable that a liability has been incurred, and the amount
can be estimated reliably.
(xii) Operating segments
Operating segments are defined as components of an entity
where discrete financial information is evaluated regularly
by the chief operating decision market ("CODM”) in deciding
allocation of resources and in assessing performance. The
Board of Director's is its CODM. The Company's CODM reviews
financial information presented on a consolidated basis for the
purposes of making operating decisions, allocating resources,
and evaluating financial performance. As such, the Company
has determined that it operates in one operating and reportable
segment.
(xiii) Employee benefits
Short-term employee benefits
Short-term employee benefit are measured on an undiscounted
basis and are expensed as the related service is provided. A
liability is recognised for the amount expected to be paid e.g.
under short-term cash bonus, if the Company has a present
legal or constructive obligation to pay this amount as a result
of past service provided by the employee and the amount of
obligation can be estimated reliably.
Share-based payment arrangements
The grant date fair value of equity settled share- based payment
awards granted to employees is generally recognised as an
employee expense, with a corresponding increase in equity, over
the vesting period of the awards. The amount recognised as an
expense is based on the estimate of the number of awards for
which the related service and non-market vesting conditions are
expected to be met, such that the amount ultimately recognised
as an expense is based on the number of awards that do meet
the related service and non-market conditions at the vesting
date. For share-based payment awards with non-vesting
conditions, the grant date fair value of the share-based payment
is measured to reflect such conditions and there is no true-up
for differences between expected and actual outcomes.
Defined contribution plans
A defined contribution plan is a post-employment benefit
plan under which an entity pays specified contributions to
a separate entity and has no obligation to pay any further
amounts. The Company makes specified monthly contributions
towards Government administered provident fund scheme.
The Company's contribution is recognized as an expense in
the Statement of Profit and Loss during the period in which the
employee renders the related service.
Prepaid contributions are recognised as an asset to the extent
that a cash refund or a reduction in future payments is available.
Defined benefit plans
A defined benefit plan is a post-employment benefit plan other
than a defined contribution plan. The Company's gratuity benefit
scheme is a defined benefit plan. The Company's net obligation
in respect of a defined benefit plan is calculated by estimating
the amount of future benefit that employees have earned in
return for their service in the current and prior periods; that
benefit is discounted to determine its present value. The fair
value of plan assets is reduced from the gross obligation under
the defined benefit plans, to recognise the obligation on net
basis. The calculation of the Company's obligation is performed
annually by a qualified actuary using the projected unit credit
method.
Remeasurements of the net defined benefit liability, which
comprise actuarial gains and losses, the return on plan assets
(excluding interest), are recognised in OCI. The Company
determines the net interest expense (income) on the net defined
benefit liability (asset) for the period by applying the discount
rate, determined by reference to market yields at the end of the
reporting period on government bonds, used to measure the
defined benefit obligation at the beginning of the annual period to
the then-net defined benefit liability (asset), taking into account
any changes in the net defined benefit liability (asset) during the
period as a result of contributions and benefit payments. Net
interest expense and other expenses related to defined benefit
plans are recognised in statement of profit and loss.
When the benefits of a plan are changed or when a plan is
curtailed, the resulting change in benefit that relates to past
service ('past service cost' or 'past service gain') or the gain or
loss on curtailment is recognised immediately in statement of
profit and loss. The Company recognises gains and losses on
the settlement of a defined benefit plan when the settlement
occurs.
Other long-term employee benefits - compensated
absences
Accumulated absences expected to be carried forward beyond
twelve months is treated as long-term employee benefit for
measurement purposes. The Company's net obligation in
respect of other long-term employee benefit of accumulating
compensated absences is the amount of future benefit that
employees have accumulated at the end of the year. That benefit
is discounted to determine its present value. The obligation is
measured annually by a qualified actuary using the projected
unit credit method. Remeasurements are recognised in
statement of profit and loss in the period in which they arise.
The obligations are presented as current liabilities in the
balance sheet if the Company does not have an unconditional
right to defer the settlement for at least twelve months after the
reporting date.
Termination benefits
Termination benefits are expensed at the earlier of when the
Company can no longer withdraw the offer of those benefits
and when the Company recognises costs for a restructuring. If
benefits are not expected to be settled wholly within 12 months
of the reporting date, then they are discounted.
(xiv) Income taxes
Income tax comprises current and deferred tax. It is recognised
in statement of profit and loss except to the extent that it relates
to a business combination, or an item recognised directly in
equity or in Other comprehensive income.
Current tax
Current tax comprises the expected tax payable or receivable on
the taxable income or loss for the year and any adjustment to
the tax payable or receivable in respect of previous years. The
amount of current tax payable or receivable is the best estimate
of the tax amount expected to be paid or received that reflects
uncertainty related to income taxes, if any. It is measured using
tax rates enacted or substantively enacted at the reporting date.
Current tax assets and current tax liabilities are offset only if
there is a legally enforceable right to set off the recognised
amounts, and it is intended to realise the asset and settle the
liability on a net basis or simultaneously.
Deferred tax
Deferred tax is recognised in respect of temporary differences
between the carrying amounts of assets and liabilities for
financial reporting purposes and the corresponding amounts
used for taxation purposes. Deferred tax is also recognised in
respect of carried forward tax losses and tax credits. Deferred
tax is not recognised for:
- temporary differences arising on the initial recognition of
assets or liabilities in a transaction that is not a business
combination and affects neither accounting nor taxable
profit or loss at the time of the transaction;
- taxable temporary differences arising on the initial
recognition of goodwill.
Deferred tax is recognized based on the expected manner of
realization or settlement of the carrying amount of assets and
liabilities using tax rates enacted, or substantially enacted at the
reporting period.
Deferred tax assets are recognized only to the extent that is
probable that future taxable profits will be available against
which the assets can be utilized. Deferred tax assets are
reviewed at each reporting date and are reduced to the extent
that it is no longer probable that the related tax benefits will
be realized.
Deferred tax assets and liabilities are offset if there is a legally
enforceable right to offset current tax liabilities and assets, and
they relate to income taxes levied by the same tax authority on
the same taxable entity, or on different tax entities, but they
intend to settle current tax liabilities and assets on a net basis
or their tax assets and liabilities will be realised simultaneously.
(xv) Earnings per share
Basic earnings per share is calculated by dividing the net profit
(or loss) for the year attributable to the equity shareholders
by the weighted average number of equity shares outstanding
during the year. The weighted average numbers of equity
shares outstanding during the year are adjusted for events such
as bonus issue and share split.
Diluted earnings per share is computed by dividing the profit
(considered in determination of basic earnings per share) after
considering the effect of interest and other financing costs
or income (net of attributable taxes) associated with dilutive
potential equity shares by the weighted average number of
equity shares considered for deriving basic earnings per share
adjusted for the weighted average number of equity shares that
would have been issued upon conversion of all dilutive potential
equity shares.
(xvi) Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash
at banks and on hand and short term deposits with 'original
maturities' of three months or less, which are subject to an
insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash
equivalents consist of cash as defined above, net of outstanding
bank overdrafts as they are considered an integral part of the
Company's cash management.
(xvii) Cash flow statement
Cash flows are reported using the indirect method, whereby
profit before tax is adjusted for the effects of transactions of
a non-cash nature, any deferrals or accruals of past or future
operating cash receipts or payments and item of income or
expense associated with investing or financing cash flows. The
cash flows from operating, investing and financing activities of
the Company are segregated.
(xviii) Contingent liabilities
A contingent liability is a possible obligation that arises 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 Company
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 can not
be measured with sufficient reliability. The Company does not
recognize a contingent liability but discloses its existence in the
financial statements.
Contingent Assets
Contingent asset is not recognised in the financial statements
since this may result in the recognition of income that may
never be realised. However, when the realisation of income is
virtually certain, then the related asset is not a contingent asset
and is recognized.
Provisions, contingent liabilities and contingent assets are
reviewed at each Balance Sheet date.
(xix) Dividends
Provision is made for the amount of any dividend declared,
being appropriately authorized and no longer at the discretion
of the entity, on or before the end of the reporting period but not
distributed at the end of the reporting period. The final dividend
on shares is recorded as a liability on the date of approval
by the shareholders and interim dividends are recorded as
a liability on the date of declaration by the Company's Board
of Directors. Company declares and pays dividends in Indian
rupees. Companies are required to pay/distribute dividend after
deducting applicable taxes.
(xx) Recent Accounting 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. For
accounting periods beginning on or after 1 April 2026, when an
entity breaches any covenant of a long-term loan arrangement
on or before the end of the reporting period with the effect
that the liability becomes payable on demand, it classifies the
liability as current, even if the lender agreed, after the reporting
period and before the approval of the financial statements for
issue, not to demand payment as a consequence of the breach.
An entity classifies the liability as current because, at the end
of the reporting period, it does not have the right to defer its
settlement for at least 12 months after that date. However, an
entity classifies the liability as non-current if the lender agreed
by the end of the reporting period to provide a period of grace
ending at least 12 months after the reporting period, within
which the entity can rectify the breach and during which the
lender cannot demand immediate repayment. This amendment
is to be applied retrospectively for annual reporting periods
beginning on or after 1 April 2026, in accordance with Ind AS 8,
Accounting Policies, Accounting Estimates and Errors.
Refer note 44 for information about liquidity risk of financial liabilities.
e) All the title deeds of Immovable properties (other than properties where company is the lessee and the lease
agreements are duly executed in favour of lessee) are held in the name of Company.
Notes:
- The Company incurred Rs. 4.70 crore (31 March 2025: Rs. 9.31 crore) towards expenses relating to short-term leases and leases
of low-value assets (refer note 36).
- The Company's leases mainly comprise of land, retail stores, office and warehousing facilities.
- The leases are typically with a non-cancellable lease term of 3-10 years.
Rights, preferences and restrictions attached to equity shares
(a) The Company has only one class of equity shares having par value of Rs. 5 per share. Each holder of equity shares is entitled
to one vote per share. The dividend, if declared, are paid in Indian rupees.
The dividend, if any, proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual
General Meeting.
(b) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the
Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares
held by shareholders.
Employee stock options
Terms attached to stock options granted to employees are disclosed in note 41 regrading share-based payments.
Nature and purpose of reserves
(a) Retained earnings is the profit accumulated as on Balance Sheet date.
(b) Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions
of the Companies Act, 2013.
(c) The Company has established various equity-settled share-based payment plans for certain categories of employees of the
Company. The reserve is used to recognise the grant date fair value of options issued under these plans to employees. See note
41 for further details on these plans.
Notes:
(i) Working capital loan from HDFC bank are repayable on demand carry interest rate of 8.25% and are secured by:
1. Movable fixed assets - Exclusive charge on all movable fixed assets (present and future, excluding Ganuar Unit & other
movable fixed assets as excluding specifically charged to any lender).
Only for Ganaur, Sonepat unit, Axis bank will have exclusive charge on movable fixed assets.
2. Stock and book debt- First pari-passu charge on all current assets (present and future).
3. Factory land and building: Exclusive charge on properties:- Plot C-9, Dehradun, Plot C-10 Dehradun and Plot no 61, Baddi.
4. Factory land and building: Exclusive charge on (1) Factory land and building at plot no 39-40, Sector-8A, IIE BHEL, Haridwar,
Uttarakhand, and Property bearing No J-17, Udyog Nagar, Rohtak Road, New Delhi - 110041.
(ii) Working capital facilites from CTBC bank are repayable on demand.and carry interest rate ranging from 6.65% to 8.49% and are
secured by first pari-passu charge over current assets both present and future.
(iii) The Company has filed quarterly returns/statement of current assets with banks and these are in agreement with books of
accounts for the year ended 31 March 2026 and year ended 31 March 2025.
The Company's exposure to currency and liquidity risk related to trade payable is disclosed in note 44.
The company participates in a supplier finance arrangement under which its suppliers may elect to receive early payment of
their invoices from a bank. Under the arrangement, the bank agrees to pay amounts due to participating suppliers in respect
of invoices owed by the company and the company repays the bank at a later date. The principal purpose of this arrangement
is to facilitate efficient payment processing and provide the willing suppliers early payment terms, compared with the related
invoice payment due date. The company has not derecognised the original trade payables relating to the arrangement because
neither a legal release was obtained nor was the original liability substantially modified on entering into the arrangement.
From the company's perspective, the arrangement does not significantly extend payment terms beyond the normal terms agreed
with other suppliers that are not participating; however, the arrangement does provide participating suppliers with the benefit
of early payment. Additionally, the company does not incur any additional interest towards the bank on the amounts due to the
suppliers. The company therefore includes the amounts subject to the arrangement within trade payables because the nature and
function of these payables remains the same as those of other trade payables. All payables under the arrangement are classified as
current as at 31 March 2026 and 31 March 2025.
The Company has entered into an arrangement of bill discounting facility with ICICI Bank Limited for the purpose of providing
revolving line of credit to the vendor(s) for discounting the bills of exchange drawn by the vendors and accepted by the Company
towards the goods or services received. The overall limit of this facility is restricted to Rs. 150 crore during the year ended 31 March
2026 (31 March 2025: Rs. 150 crore).
38. EARNINGS PER EQUITY SHARE (EPS)
Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number
of equity shares outstanding during the year.
Diluted EPS are calculated by dividing the profit for the year attributable to the equity holders by weighted average number of equity
shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the
dilutive potential equity shares into equity shares.
The Company believes that it has merit in these cases and it is only possible, but not probable, that these cases may be decided
against the Company. Hence, these have been disclosed as contingent liability and no provision for any liability has been deemed
necessary in the financial statements.
The Government of India has consolidated 29 existing labour legislations into a united framework comprising four Labour Code viz
Code on wages 2019, Code on Social Security 2020, Industrial Relation Code 2020, and Occupational Safety, Health and Working
Condition Code 2020 (collectively referred to as the New Labour Codes}. These Codes have been made effective from 21st November,
2025. The Company has no material incremental liability for own employees under new labour code announced. The Company
continues to monitor the clarifications from the Government on various aspects of the Labour Code and would provide appropriate
accounting effect on the basis of such developments as needed.
(ii) Defined benefit plan:
Gratuity
The Company operates a post-employment defined benefit plan for Gratuity. This plan entitles an employee to receive 15 day's salary
for each year of completed service at the time of retirement/exit.Vesting occurs upon completion of five years of service. The present
value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognize each period
of service as giving rise to additional employee benefit entitlement and measures each unit separately to build up the final obligation.
The most recent actuarial valuation of the present value of the defined benefit obligation for gratuity was carried out as at 31 March
2026. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured
using the Projected Unit Credit Method.
A. Based on the actuarial valuation obtained in this respect, the following table sets out the status of the gratuity plan and the
amounts recognised in the Company's financial information as at reporting date:
43. CORPORATE SOCIAL RESPONSIBILITY
As per Section 135 of the Companies Act, 2013, a Company, meeting the applicability threshold, needs to spend at least 2% of its
average net profit for the immediately preceding three financial years on Corporate social responsibility (CSR) activities. A CSR
Committee has been formed by the Company as per the Act. The CSR Committee and Board had approved the Rs. 2.94 (31 March
2025: Rs. 2.97 crore) crore to be spent on the projects with specific outlay on the activities as specified in Schedule VII of the act, in
pursuant of the CSR policy.
h) Nature of CSR Activities:
i) Utilized towards providing free and subsidized dialysis at the Sewa Bharti Diagnostic & Dialysis Center, Ashok Vihar, in line with
approved project objective.
ii) Utilized for Educational Initiative for Children of Tribal, Rural & Remote areas through the adoption and operation of Ekal
Vidyalayas under Ekal Abhiyan in the Villages of Himachal Pradesh and Uttarakhand.
iii) Utilized for Tailoring and Stiching Course and Beauty Academy, aimed at empowering women and enabling them to achieve
self-sufficiency.
iv) Organized Eight (8) structured running events to promote youth fitness, leadership, and sports engagement.
v) Utilized towards the Construction of a hostel building to support institutional accommodation and improve student related
infrastructure facilities.
44. FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT
I. Fair Value Hierarchy and Measurements
Accounting classifications and fair values
All assets and liabilities for which fair value is measured or disclosed in the Financial Statements are categorised within the fair value
hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes mutual funds, bonds and
debentures that have quoted price.
Level 2: The fair value of financial instruments that are not traded in an active market 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.
(a) The Company's borrowings have fair values that
approximate to their carrying amounts as they are based
on the net present value of the anticipated future cash
flows using rates currently available for debts on similar
terms, credit risk and remaining maturities.
(b) The carrying amount of loans, trade receivables, cash
and cash equivalents, bank balances other than those
included in cash and cash equivalents, other current
financial assets, trade payable and other current financial
liabilities approximates the fair values, due to their short
term nature.
(c) The carrying value of non-current financial assets and
Other non-current financial liabilities approximate the
fair values as on the reporting date, as these are carried
at amortised cost and are based on the net present value
of the anticipated future cash flows using applicable
discount rate.
(d) The carrying value of lease liabilities approximates the
fair values as on the reporting date, as these are carried
at amortised cost and are based on the net present value
of the anticipated future cash flows using applicable
discount rate.
There are no transfer between Level 1, Level 2 and Level 3
during the year ended 31 March 2026 and 31 March 2025.
II. Financial risk management
Risk Management Framework
The Company's Board of directors has overall responsibility
for the establishment and oversight of the Company's risk
management framework and also responsible for developing
and monitoring the Company's risk management policy.
The Company's risk management policies are established
to identify and analyse the risk faced by the Company, to set
appropriate risk limits and controls and to monitor risks and
adherence to limits. Risk management policies and systems
are reviewed regularly to reflect changes in market conditions
and the Company's activities. The Company, through its training
and management standards and procedures, aims to maintain
a disciplined and constructive control environment in which all
employees understand their roles and obligations. The Board
of directors with top management oversee the formulation and
implementation of the risk management framework. The risks
are identified at business unit level and mitigation plans are
identified, deliberated and reviewed at appropriate forums.
The Company has exposure to the following risks arising from
financial instruments:
- Credit risk;
- Liquidity risk; and
- Market risk
i. Credit risk
Credit risk is the risk of financial loss to the Company if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations resulting in a financial loss to the
Company. Credit risk arises principally from trade receivables,
loans, advances, cash and cash equivalents and deposits with
banks. The carrying amounts of financial assets represent the
maximum credit risk exposure.
Cash and cash equivalents and deposits with banks
Cash and cash equivalents of the Company are held with banks
which have high credit rating. The Company considers that its
cash and cash equivalents have low credit risk based on the
external credit ratings of the counterparties.
Security deposits
The Company has furnished security deposits to its lessors for
obtaining the premises on lease. The Company considers that its
deposits have low credit risk or negligible risk of default as the
parties are well established entities and have strong capacity to
meet the obligations. Also, where Company expects that there is
an uncertainty in the recovery of deposit, it provides for suitable
impairment on the same.
Trade receivables
The Company exposure to credit risk is influenced mainly
by the individual characteristics of each customer. However,
management also considers the factors that may influence the
credit risk of its customer base, including the default risk of the
industry and country in which customers operate.
The management has established a credit policy under which
each new customer is analysed individually for creditworthiness
before the standard payments and delivery terms and conditions
are offered. The average credit period provided to customers
varies from 0 to 90 days. For new customers, in addition to
feedback from retail traders, they start doing the business with
Company on advance payment terms. Post a business for 3
months and a successful payment track record, the customers
are then converted to business with standard credit terms.
During the year, trade receivable with a contractual amount of Rs. 8.73 crore were written off (31 March 2025: Rs. 5.43 crore) and
the Company does not expect to receive future cash flows or recoveries from collection of receivables previously written off. The
Company's management also pursues all legal options for recovery of dues, wherever necessary, based on its internal assessment.
The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a
provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward looking information.
The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as per Company's policy.
For trade receivables balance from related parties, there are no indications at the period/year end for default in payments. Accordingly,
the Company does not anticipate risk of recovery and expected credit loss in respect thereof.
ii. Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities
that are settled by delivering cash or another financial asset. The Company's approach to managing liquidity is to ensure, as far as
possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the Company's reputation.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the cash flow generated from
operations to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses,
Company treasury maintains flexibility in funding by maintaining availability under committed credit lines.
Management monitors rolling forecasts of the Company's liquidity position (comprising the undrawn borrowing facilities) and cash
and cash equivalents on the basis of expected cash flows. This is generally carried out in accordance with practice and limits set
by the Company. In addition, the Company's liquidity management policy involves projecting cash flows in major currencies and
considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external
regulatory requirements and maintaining debt financing plans.
As described in Note 24, the company also participates in a supplier finance arrangement with the principal purpose of facilitating
efficient payment processing of supplier invoices and providing the willing suppliers early payment terms compared with the related
invoice payment due date. The arrangement allows the company to centralise payments of trade payables to the bank rather than
paying each supplier individually.
iii. Market risk
Market risk is the risk that changes in market prices such as
foreign exchange rates will affect the Company's income or the
value of its holdings of financial instruments. The objective of
market risk management is to manage and control market risk
exposures within acceptable parameters, while optimising the
return.
The Company's business activities are exposed to a variety of
market risks, namely:
• Currency risk;
• Commodity risk.
Currency risk
The Company is exposed to foreign currency risk to the extent
that there is a mismatch between the currencies in which sales
and purchases are denominated and the functional currency
of the Company, hence exposure to exchange rate fluctuations
arises. The risk is that the functional currency value of cash
flows will vary as a result of movements in exchange rates. The
functional currency of the Company is Rs. and the currency in
which these transactions are primarily denominated is USD
and CNY.
The Company is exposed to foreign currency risk to the extent
that there is a mismatch between the currencies in which sales
and purchases are denominated and the functional currency
of the Company, hence exposure to exchange rate fluctuations
arises. The risk is that the functional currency value of cash
flows will vary as a result of movements in exchange rates. The
functional currency of the Company is Rs..
The Company manages foreign currency risk by hedging its
transactions using foreign currency forward contracts. The
foreign exchange forward contracts are not designated as cash
flow hedges, and are entered into for periods consistent with
foreign currency exposure of the underlying transactions.
Commodity Risk
Exposure of the Company to Commodity and Commodity Risks faced by the Company throughout the year.
Commodities form a major part of the raw materials required for Company's products portfolio and hence commodity price risk is one
of the important market risk for the Company. The Company is exposed to the risk of changes in commodity prices in relation to its
purchase of raw materials. The Company's price arrangements with its suppliers are typically linked to the spot prices of such raw
materials, and any increase in the spot prices may result in an increase in the price of such raw materials procured from its suppliers.
The Company has adequate risk assessment and minimization system in place including for Commodities. The risk is hedged through
additional and strategic buying from time to time. Further, the Company typically pass on some portion of the change in the raw
material price to the customers.
Purchases sensitivity analysis
A reasonably possible change of 1% in prices of purchases during the year, would have increased/(decreased) equity and profit or
loss by the amounts shown below. This analysis assumes that all other variables remain constant:
Interest rate risk
Currently the Company's borrowings are within acceptable risk levels, as determined by the management, hence the Company has
not taken any swaps to hedge the interest rate risk.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market interest rates. The Company's exposure to the risk changes in market interest relates primarily to the Company's long term
debt obligations with floating interest rates. The Company is carrying its borrowings primarily at variable rate.
45. CAPITAL MANAGEMENT
For the purpose of the Company's capital management, capital includes issued equity capital, securities 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. Management monitors the return on capital, as well as the level of dividends to ordinary
shareholders.
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 equity. Net debt is calculated as total liabilities (as shown in the balance sheet) less cash and cash equivalents and other bank
balances. The Company's net debt to equity ratio i.e. capital gearing ratio is as follows:
46. SEGMENT REPORTING
Segment information is presented in respect of the Company's key operating segments. The operating segments are based on the
Company's management and internal reporting structure.
Operating segments
The Company has identified the business as single operating segment i.e. Footwear and Accessories. Accordingly, there is only one
Reportable Segment for the Company which is "Footwear and Accessories”, hence no specific disclosures have been made.
49. ADDITIONAL REGULATORY INFORMATION
REQUIRED BY SCHEDULE III
a. The Company does not have any Benami property, where
any proceeding has been initiated or pending against the
Company for holding any Benami property.
b. The Company has not traded or invested in Crypto currency
or Virtual Currency during the financial year.
c. The Company has not been declared as wilful defaulter
by any bank or financial institution or government or any
government authority.
d. The Company does not have any transactions with
companies struck off.
e. The Company has not 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.
f. There are no charges or satisfaction yet to be registered
with ROC beyond the statutory period.
g. 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 the Intermediary shall:
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.
h. 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.
i. The Company (as per the provisions of the Core Investment
Companies (Reserve Bank) Directions, 2016) does not have
any CIC as part of the Company.
j. The Company does not have any subsidiary, hence clause
(87) of section 2 of the Act read with Companies (Restriction
on number of Layers) Rules, 2017 is not applicable to the
Company.
k. 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.
50. During the current year, the Company has changed its
method of inventory valuation from First in First Out (FIFO) to
weighted average. The change was made to better reflect the
consumption pattern and cost flow of inventory, and to enhance
the relevance and reliability of financial information presented.
In accordance with Ind AS 8, this change has been applied
retrospectively. The impact of this change on the in the current
year and corresponding year is not material. Management
believes that the new method provides a more accurate
representation of inventory costs and aligns with industry
practices.
51. EVENTS OCCURRING AFTER THE REPORTING PERIOD
Refer to note 20 for the final dividend recommended by the directors which is subject to the approval of shareholders in the ensuing
annual general meeting.
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