r) Provisions, contingent liabilities and contingent assets
i. Provisions are recognised when there is a present legal or constructive obligation as a result of past events and 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.
Provisions are measured at the present value of management's best estimate of the expenditure required to settle the
present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax
rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase
in the provision due to the passage of time is recognised as interest expense.
ii. A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the
occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present
obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the
obligation or the amount of the obligation cannot be measured with sufficient reliability. The Company does not recognize
a contingent liability but discloses its existence in the financial statements.
iii. A contingent asset is a possible asset 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.
Contingent assets are not recognized in the financial statements. However, contingent assets are assessed continuously
and if it is virtually certain that an inflow of economic benefits will arise, the assets and the related income are recognised
in the period in which the change occurs.
s) Contributed equity
Equity shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in
equity as a deduction, net of tax, from the proceeds.
t) Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank and on hand and short-term deposit with original
maturity upto three months, which are subject to insignificant risk of changes in value.
For the purpose of presentation in the statement of cash flows, cash and cash equivalents consists of cash and short-term
deposit, as defined above, net of outstanding bank overdraft but including other short-term, highly liquid investments with
original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value.
u) Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the
asset or transfer the liability takes place either:
- In the principal market for the asset or liability, or
- In the absence of a principal market, In the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is
measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market
participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market
participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market
participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available
to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All
assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized 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 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e.
as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether
transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is
significant to the fair value measurement as a whole) at the end of each reporting period.
At each reporting date, the management analyses the movements in the values of assets and liabilities which are required to
be remeasured or re-assessed as per the Company's accounting policies. For this analysis, the Management verifies the major
inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant
documents. The Management also compares the change in the fair value of each asset and liability with relevant external
sources to determine whether the change is reasonable.
v) Supplier finance arrangements
The Company has entered into supplier finance arrangements with banks/financial institutions to facilitate settlement of amounts
due to suppliers. The classification of liabilities arising under such arrangements requires management judgment based on the
specific terms and conditions of the arrangement and an assessment of the economic substance of the transaction.
Liabilities subject to supplier finance arrangements continue to be presented as trade payables where the arrangement does not
result in a substantial modification of the original terms of the underlying trade payable and the transaction remains operating
in nature. In such cases, the arrangement is considered a mechanism for facilitating payment to suppliers, and the related
obligation continues to form part of the Company's normal working capital cycle.
Where the supplier finance arrangement results in a substantial modification of the original liability or the economic substance
of the transaction is determined to be financing in nature, including situations where the Company obtains extension of credit
terms such that the obligation no longer forms part of its normal working capital cycle, the original trade payable is derecognized
and a corresponding financial liability is recognized as borrowings. Subsequent measurement of such liabilities is performed in
accordance with the accounting policy applicable to borrowings.
w) Exceptional items
Certain occasions, the size, type, or incidences of the item of income or expenses pertaining to the ordinary activities of the
Company is such that its disclosure improves the understanding of the performance of the Company, such income or expense
is classified as an exceptional item and accordingly, disclosed in the standalone financial statements.
x) Rounding off
All amounts disclosed in the standalone financial statements and notes have been rounded off to the nearest million as per the
requirements of Schedule III, unless otherwise stated. Any amount appearing in financial statements as ' '0' represents amount
less than ' 500,000.
iii) Recent accounting pronouncements
The Ministry of Corporate Affairs (MCA) notifies new standard or amendments to the existing standards under Companies (Indian
Accounting Standards) Rules as issued from time to time. For the year ended 31 March 2026, MCA has notified following amendment
to Ind AS, applicable to the Company w.e.f. 01 April 2025
- Ind AS 21: The Effects of Changes in Foreign Exchange Rates relating to lack of exchangeability.
- Ind AS 12: Income Taxes relating to International Tax Reform - Pillar Two Model Rules - Exception to recognition and disclosure
of deferred tax.
- Ind AS 7: Statement of Cash Flows and Ind AS 107: Financial Instrument: Disclosures, relating to supplier finance arrangements.
- Ind AS 1: Presentation of Financial Statements relating to classification of liabilities as current or non- current and non- current
liabilities with covenants.
The Company has evaluated the new pronouncements and based on its evaluation has determined that it does not have any
significant impact in its standalone financial statements except in relation to amendments w.r.t. supplier finance arrangements which
have been appropriately disclosed in the standalone financial statements.
New and amended standards which are issued but not yet effective and has not been early adopted by the Company
Ind AS 1 - The amendment requires that if a covenant breach is rectified after the reporting date, the same will be treated as a non¬
adjusting event and this amendment will be applicable from annual reporting periods beginning on or after the 01 April 2026.
The Company doesn't expect to have a material impact of the above amendment on the standalone financial statements.
3. SIGNIFICANT ESTIMATES, JUDGEMENTS AND ASSUMPTIONS
The preparation of financial statements in conformity with Ind AS requires the management to make estimates, assumptions
and exercise judgement in applying the accounting policies that affect the reported amount of assets, liabilities and disclosure of
contingent liabilities at the date of financial statements and the reported amounts of income and expenses during the year. The
Management believes that these estimates are prudent and reasonable and are based on the Management's best knowledge of
current events and actions. Actual results could differ from these estimates and differences between actual results and estimates are
recognised in the periods in which the results are known or materialised. This note provides an overview of the areas that involves
a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and
assumptions turning out to be different than those originally assessed.
A. Defined benefit obligation
The cost of post-employment and other long term benefits is determined using actuarial valuations. An actuarial valuation
involves making various assumptions that may differ from actual developments in the future. These include determination of
discount rates, expected rate of return on assets, future salary increases and mortality rates. Due to the complexities involved
in the valuation and its long term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All
assumptions are reviewed at each reporting date.
B. Fair value of financial instruments
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. In
applying the valuation techniques, management makes maximum use of market inputs and uses estimates and assumptions
that are, as far as possible, consistent with observable data that market participants would use in pricing the instrument. Where
applicable data is not observable, management uses its best estimate about the assumptions that market participants would
make. These estimates may vary from the actual prices that would be achieved in an arm's length transaction at the reporting
date.
C. Share-based payments
Estimating fair value for share-based payment requires determination of the most appropriate valuation model, which is
dependent on the terms and conditions of the grant. The estimate also requires determination of the most appropriate inputs
to the valuation model including the expected life of the option, volatility and dividend yield and making assumptions about
them.
D. Impairment of Goodwill
I mpairment exists when the carrying value of an asset or cash generating unit (CGU) exceeds its recoverable amount, which
is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based
on available data from binding sales transactions, conducted at arm's length, for similar assets or observable market prices less
incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived
from the budget for the future years and do not include restructuring activities that the Company is not yet committed to or
significant future investments that will enhance the asset's performance of the CGU being tested. The recoverable amount is
sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate. These
budgets and forecast calculations generally cover a period of five years. For longer periods, a long-term growth rate is calculated
and applied to project future cash flows after the fifth year.
E. Impairment of financial assets
The impairment provisions for financial assets disclosed are based on assumptions about risk of default and expected loss rates.
The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on
the Company's past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
The Company reviews carrying value of its investments when there is indication for impairment.
F. Impairment of non-financial assets
At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than biological assets,
investment property, inventories, contract assets and deferred tax assets) to determine whether there is any indication of
impairment. If any such indication exists, then the asset's recoverable amount is estimated.
G. Taxes
The Company records its best estimates of the tax liability/credits in the current tax provision including judgement on whether
tax positions are probable of being sustained in tax assessments. Management periodically evaluates positions taken in the tax
returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions
where appropriate. A tax assessment can involve complex issues, which can only be resolved over extended time periods. The
recognition of taxes that are subject to certain legal or economic limits or uncertainties is assessed individually by management
based on the specific facts and circumstances. The Company periodically assesses its liabilities and contingencies related to
income taxes for all years open to scrutiny based on latest information available. The management believes that they have
adequately provided for the probable outcome of these matters.
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available
against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred
tax assets that can be recognised, based upon the likely timing and the level of future taxable profits.
H. Decommissioning liability/site restoration cost
The Company makes an estimate with respect to the site restoration costs to be incurred in future which are escalated for
inflation and discounted at a discount rate that reflects current market assessment of the time value of money and the risks.
The site restoration activities would be in the future, the exact requirements that may have to be met when the occurrence
of removal events are uncertain. The estimate is made such that the amount of provision reflects the present value of the
expenditures expected to be incurred to settle the obligation. The timing and the future expenditures are reviewed at the end
of each reporting period.
I. Equity investments held through OCI
Management applies judgement in determining whether the Company has joint control or exercises significant influence in
an equity investment in which the Company holds more than 20% stake but does not hold a controlling stake. In applying
the judgement, the Company determines whether it has ability to direct the relevant activities of the investee, whether it has
right of representation on the Board of the investee, whether the decisions about the relevant activities of the investee require
unanimous consent of both the parties, whether it has the power to participate in the financial and operating policy decisions
of the investee Basis these factors, the Company determines whether it exercises significant influence or control on decisions of
the investee.
J. Contingencies
In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company.
Significant judgement is made when evaluating, among other factors, the probability of unfavorable outcome and the ability to
make a reasonable estimate of the amount of potential loss.
K. Leases
I nd AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option
to extend or terminate the lease, if the use of such option is reasonably certain. The Company makes an assessment on the
expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend
or terminate the contract will be exercised. In evaluating the lease term, the Company considers factors such as any significant
leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the importance of
the underlying asset to the Company's operations and the availability of suitable alternatives. The lease term in future periods
is reassessed to ensure that the lease term reflects the current economic circumstances. After considering current and future
economic conditions, the Company has concluded that no changes are required to lease period relating to the existing lease
contracts. The Company uses its incremental borrowing rate to measure lease liabilities.
L. Government Grant
The Company has accrued income for Government grant related to assets in the ratio of fulfilment of obligations associated with
the grant received. Key assumptions involved pertain to estimation on reasonability of compliance with the conditions attached
to grants and benefits availed from Government scheme.
M. Useful life and residual value of property, plant and equipment (PPE) and intangible assets
Useful lives of PPE and intangible assets are based on the life prescribed in Schedule II to the Companies Act, 2013. In cases,
where the useful lives are different from that prescribed in Schedule II, they are based on technical evaluation (internal and/or
external), taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past
history of replacement, anticipated technological changes, manufacturers' warranties and maintenance support. Assumptions
also need to be made, when it is assessed, whether an asset may be capitalized and which components of the cost of the asset
may be capitalized.
Goodwill of ' 1,017 million (31 March 2025: ' 1,017 million) has been allocated to business acquired on amalgamation with Creative
Stylo Packs Private Limited ("CSPL") in the past. The estimated value in use of this cash generating unit is based on future cash flows
using a 3.00% (31 March 2025: 3.00%) annual growth rate for periods subsequent to the forecast period of 5 years and applying
discount rate of 9% p.a. (31 March 2025: 9% p.a.). Sales annual growth rate for the forecast period of 5 years is considered upto 4% (31
March 2025: upto 4%). An analysis of the sensitivity of the computation to a change in key parameters (operating margin, discount
rates and long term average growth rate), based on reasonable assumptions, did not identify any probable scenario in which the
recoverable amount of the CGU would decrease below its carrying amount. Management has determined the values assigned to
each of the above key assumption based on past performance, management's expectations of market development, industry trends.
*Excludes 7.35% (100 shares) held through Lamitube Technologies (Cyprus) Limited
#
i) During the year ended 31 March 2026, the Company has made an additional investment amounting to '1,500 million in a wholly
owned subsidiary named EPL Brasil LTDA.
ii) As on 31 March 2026, the Company has an investment of ' 2,233 million in its wholly owned subsidiary - EPL Brasil LTDA. During
the current year, the subsidiary has earned profit after tax amounting to ' 112 million. While the reported net-worth of the
subsidiary as on 31 March 2026 is positive however it is lower than the exposure in terms of investment which the Company is
carrying as on that date.
The subsidiary commenced its operations in the year ended 31 March 2024 and has demonstrated improvement as well. Based
on the internal management assessment and future business plans of the subsidiary, the Company's management is confident
of realizing the value of its investments in the subsidiary and accordingly, no adjustment is required to be made to the carrying
value of investments in these standalone financial statements.
@
i) The Company holds more than 20% equity shares in Cleanmax Aria Private Limited. However, the Company does not exercise
significant influence/control on decision of the investee. Hence the same is not treated as Associate Company.
ii) These are designated as FVTOCI as they are not held for trading purpose and are not in similar line of business as the Company,
thus disclosing their fair value change in profit and loss will not reflect the purpose of holding.
iii) The Company's maximum exposure to loss in Cleanmax Aria Private Limited is the carrying value as on 31 March 2026. Further,
during the year, the Company has not provided any financial or other support to Cleanmax Aria Private Limited.
The absolute figures are rounded off to nearest million.
$
During the current year, the Company has made investments aggregating ' 301 million in a newly incorporated subsidiary - EPL
Packaging (Thailand) Co.Ltd.
b) Terms/rights attached to equity shares
The Company has only one class of equity shares having a par value of ' 2 per share. Each holder of equity shares is entitled to one
vote per share. The Company declares and pays dividend in Indian rupees. The final dividend proposed by the Board of Directors, if
any, is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets of the
Company, after distribution of preferential amount. The distribution will be in proportion to the number of equity shares held by the
shareholders.
f) Employees Stock Option Scheme (ESOPS):
During year ended 31 March 2021, the Company had instituted an EPL Employee Stock Option Scheme 2020 ("the Scheme") as
approved by the Board of Directors for issuance of stock options to the eligible employees of the Company and of its subsidiaries,
other than promoters or person belonging to promoter group.
During year ended 31 March 2021, pursuant to the said Scheme 2020, 3,836,089 stock options convertible into 3,377,134 equity shares
of ' 2 each at an exercise price of ' 161 per share and 458,955 equity shares of ' 2 each at an exercise price of ' 268 per share were
granted to eligible employees, being the market price as defined in the Securities and Exchange Board of India (Share Based Employee
Benefits) Regulation, 2014 (SEBI Regulation). During year ended 31 March 2022, 1,526,718 stock options convertible into equivalent
equity shares of ' 2 each at an exercise price of ' 161 per share were granted to eligible employee. During the year ended 31 March
2023, 108,226 stock options convertible into equivalent equity shares of ' 2 each at an exercise price of ' 161 per share were granted
to eligible employee. During the year ended 31 March 2024, 1,095,474 stock options convertible into equivalent equity shares of
' 2 each at an exercise price of ' 161 per share were granted to eligible employee. During the previous year, 590,908 stock options
convertible into equivalent equity shares of ' 2 each at an exercise price of ' 161 per share were granted to eligible employee. During
the current year, further 38,168 stock options convertible into equivalent equity shares of ' 2 each at an exercise price of ' 161 per
share and 1,538,655 stock options convertible into equivalent equity shares of ' 2 each at an exercise price of ' 185 per share were
granted to eligible employee.
During the current year, the Holding Company had instituted an EPL Employee Stock Option Scheme 2025 (""Scheme 2025"") as
approved by the Board of Directors for issuance of stock options to the eligible employees of the Holding Company and of its
subsidiaries, other than the promoters or person belonging to promoter group.
Pursuant to the said Scheme 2025, 933,290 stock options convertible into 384,664 equity shares of ' 2 each at an exercise price of '
185 per share and 548,626 equity shares of ' 2 each at an exercise price of ' 165 per share were granted to eligible employees, being
the market price as defined in the Securities and Exchange Board of India (Share Based Employee Benefits) Regulation, 2014 (SEBI
Regulation).
Subject to terms and conditions of the Scheme 2025, the said options will vest in a phased manner in every year during the next three
to five years, as per the provisions of the Scheme 2025.
Refer note 41 for additional information related to the Scheme(s).
g) There are no shares bought back or shares issued for consideration other than cash during five years preceding 31 March 2026.
h) Forfeited equity shares consist of 35,725 partly paid up equity shares and 21,395 fully paid up bonus shares forfeited during earlier
year. The amount of ' 0.1 million in relation to the forfeiture will be transferred to reserves upon cancellation of these shares.
Notes:
a) Represents arrangement with banks for payment to suppliers. The nature and function of such financial liability is not different
from other trade payables.
b) For Trade payables ageing, refer note 60.
Supplier Financing Arrangement:
The Company enters into supplier finance arrangements with finance providers to facilitate the early payment of dues on its behalf
to some of the Company's vendors who may elect to factor their invoice through such finance provider. The finance providers pay
the amounts to a participating vendor in respect of invoices owed by the Company and receive settlement from the Company at a
later date. Payment dates and terms for the Company do not vary based on whether the supplier chooses to factor their receivable.
The economic substance of the transaction is determined to be in nature of operating activity where the original contract with the
vendors does not get substantially modified on entering into arrangement. These arrangement continue to hold characteristics of
trade payables and are disclosed as such.
Non-cash changes
There were no material business combinations or foreign exchange differences that affected the liabilities under the supplier finance
arrangements in either period. Payments made by the finance providers to the vendors are treated as a non-cash item and settlement
of dues to the finance provider by the Company under this arrangement is treated as operating cash outflows because they continue
to be part of normal operating cycle and reflect the substance of the payment for purchase of goods and services.
ii) Fair value hierarchya) Financial Instrument measured at Fair Value
The fair values of the financial assets and liabilities are the amount that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants at the measurement date.
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
Company has classified its financial instruments into three levels prescribed under the Indian Accounting Standards. An
explanation for each level is given below.
Level 1: Level 1 hierarchy includes financial instruments measured using closing net asset value.
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. Instruments in
the level 2 category for the Company include foreign exchange forward contracts.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in this
level. Instrument in the level 3 category for the company includes investment in others. The fair value is determined using
discounted cashflow method where the significant observable input used is risk adjusted discount rate. Instruments in the
level 3 category for the Company include investment in equity shares of others.
b) Financial Instrument measured at Amortised cost
The carrying amount of financial assets and financial liabilities measured at amortised cost in the Financial Statements are
a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would
be significantly different from the values that would eventually be received or settled in short term.
Fair value of other non-current financial assets approximate their carrying amounts due to the fact that it is estimated by
discounting future cash flows using market rates of interest applicable as at reporting dates.
Fair value of long term borrowings approximate their carrying amounts due to the fact that long term borrowings are
measured at amortised cost using the floating rates/fixed rates of interest, which in turn are based on interest rates
prevailing in the market for similar transaction.
v) Valuation techniques used to determine fair value:
The fair value of mutual funds is determined using unquoted price available from the mutual fund house; the fair value of foreign
exchange forward contracts is determined using forward exchange rates as quoted by the bank; and the fair value of investment
in others is determined either by involving a valuation expert who in turn uses discounted cashflow method using risk adjusted
discount rate at the valuation date or by reference to the price at which equity transaction has been undertaken in the investee
Company near to the balance sheet date.
Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its
contractual obligations.
The Company is exposed to credit risk from its operating activities (primarily trade receivables), lease rental deposits, deposits
with banks and other financial instruments. Credit risk arises from the possibility that counter party may not be able to settle their
obligations as agreed.
i) Trade receivables
The Company extends credit to customers (including related parties) in the normal course of business. The Company
considers factors such as financial conditions/market practices, credit track record in the market, analysis of historical bad
debts and past dealings for extension of credit to customers. Individual credit limits are set accordingly. The Company
monitors the payment track record of the customers and ageing of receivables. Outstanding customer receivables are
regularly monitored. The Company considers the concentration of risk with respect to trade receivables as low, as its
customers are located in several jurisdictions and industries and operate in largely independent markets. The Company
also takes advances and security deposits from some of its customers, which mitigate the credit risk to an extent.
The Company has used a practical expedient for computing the Expected Credit Loss ('ECL') allowance for trade receivables
based on a provision matrix. The provision matrix is prepared based on historically observed default rates over the
expected life of trade receivables and is adjusted for forward-looking estimates. The ECL allowance is based on the ageing
of the receivables. ECL on trade receivables is provided based on past trends, current conditions and Company's view of
economic conditions over the expected lives of the receivables. The expected credit loss rate at the end of reporting period
for receivable ageing from 3 to 6 months is 11% and for more than 6 months is 29%. (31 March 2025: 3 to 6 months is 12%
and more than 6 months is 43%)
iv) Other financial instruments- assets
The Company considers factors such as track record, size of the institution, market reputation, financial strength/rating
and service standards to select the banks with which balances and deposits are maintained. Generally, the balances are
maintained with the institutions from whom the Company has also availed borrowings. Security deposits against leasing of
premises/equipments are refundable upon closure of the lease. Mutual fund investments are made in liquid and overnight
plans of renowned asset management company only. The credit risk associated with non current investments measured
at amortized cost, bank, security deposits and mutual fund investments is relatively low. For these financial assets, the
Company presumes significant increase in credit risk when certain conditions or events compromise the counter-party
ability to fulfill its financial obligations.
i) Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a
reasonable price. For the Company, liquidity risk arises from obligations on account of financial liabilities - borrowings,
trade payables, derivative instruments and other financial liabilities.
The Company's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity
to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or
risking damage to the Company's reputation. The Company manages liquidity risk by maintaining adequate reserves, by
continuously monitoring forecast and actual cash flows and matching the maturity profiles of the financial assets and
liabilities. The Company regularly monitors liquidity position through rolling forecast based on estimated free cash flow
generated from business. It maintains adequate sources of financing including loans, debt, and overdraft from banks. It also
enjoys strong access to domestic capital markets across various debt instruments.
ii) Exposure to liquidity risk
The following are the contractual maturities of financial liabilities at the reporting date. The contractual cash flow amounts
are gross and undiscounted:
C Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices 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 sensitivity analysis excludes
the impact of movements in market variables on the carrying value of post-employment benefit obligations provisions and on
the non-financial assets and liabilities. The sensitivity of the relevant profit and loss item is the effect of the assumed changes in
respective market risks.
The Company's activities expose it to risks on account of changes in foreign currency exchange rates and interest rates. The
Company uses derivative financial instruments such as foreign exchange forward contracts of varying maturity depending upon
the underlying contract as a risk management strategy to manage its exposures to foreign exchange fluctuations and interest
rate.
i Foreign currency risk ^
Currency risk is the risk that the fair value or future cash flows fluctuate because of changes in market prices. The Company
is exposed to foreign exchange risk on their receivables, payables and foreign currency loans which are mainly held in
the United State Dollar ("USD"), the Japanese Yen ("JPY"), the Pound Sterling ("GBP"), the Euro ("EUR"), the Swiss Franc
("CHF") and Chinese Yuan ("CNY"). Consequently, the Company is exposed primarily to the risk that the exchange rate of
the Indian Rupee ("INR") relative to the USD, the JPY, the GBP, the EUR, the CHF, and the CNY may change in a manner that
has a material effect on the reported values of the Company's assets and liabilities that are denominated in these foreign
currencies.
The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk
management policies, including minimising cross currency transactions, using natural hedge and the use of derivatives
like foreign exchange forward contracts to minimise the impact to results of the exchange rate movements. The unhedged
exposures are maintained and kept to minimum feasible.
ii Interest rate risk
This refers to risk to Company's cash flow and profits on account of movement in market interest rates.
For the Company the interest risk arises mainly from interest bearing borrowings which are at floating interest rates. To
mitigate interest rate risk, the Company closely monitors market interest and as appropriate makes use of hedged products
and optimise borrowing mix/composition.
iii Mutual fund price risk
The value of mutual fund investments determined using closing published net asset value and measured at fair value
through profit and loss as at 31 March 2026 is ' 100 million (31 March 2025: ' 250 million). A 10% change in price for year
ended 31 March 2026 would result in an impact of ' 10 million (31 March 2025: ' 25 million) on profit before tax and equity.
40 (B) CAPITAL MANAGEMENT
Risk management
The Company manages its capital structure and makes necessary adjustments in light of changes in economic conditions and the
requirement of financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to
shareholders, return capital to shareholders, issue new shares or raise/retire debt. The primary objective of the Company's capital
management is to maximise the shareholders' value.
For the purpose of the Company's capital management, equity includes issued capital, securities premium and other reserves. Net
debt includes borrowings less cash and cash equivalents. The Company manages capital by monitoring gearing ratio which is net
debt divided by total equity plus net debt.
Loan covenants
Borrowing contain certain debt covenants relating to limitation on indebtedness, debt-equity ratio, debt to EBITDA ratio, interest
service coverage ratio and debt service coverage ratio. The limitation on indebtedness covenant gets suspended once the Company
meets certain prescribed criteria. The debt covenant related to limitation on indebtedness remained suspended as of the date of
adoption of the financial statements. The Company has also satisfied all other aforesaid debt covenants, to the extent prescribed in
the respective sanction of bank loan.
41 SHARE-BASED PAYMENTSEmployee stock option plan 2020
a) During year ended 31 March 2021, the Company had instituted an EPL Employee Stock Option Scheme 2020 ("Scheme 2020")
as approved by the Board of Directors for issuance of stock options to the eligible employees of the Holding Company and of its
subsidiaries, other than the promoters or person belonging to promoter group.
During year ended 31 March 2021, pursuant to the said Scheme 2020, 3,836,089 stock options convertible into 3,377,134 equity
shares of ' 2 each at an exercise price of ' 161 per share and 458,955 equity shares of ' 2 each at an exercise price of ' 268
per share were granted to eligible employees, being the market price as defined in the Securities and Exchange Board of India
(Share Based Employee Benefits) Regulation, 2014 (SEBI Regulation). During year ended 31 March 2022, 1,526,718 stock options
convertible into equivalent equity shares of ' 2 each at an exercise price of ' 161 per share were granted to eligible employee.
During the year ended 31 March 2023, 108,226 stock options convertible into equivalent equity shares of ' 2 each at an exercise
price of ' 161 per share were granted to eligible employee. During the year ended 31 March 2024, 1,095,474 stock options
convertible into equivalent equity shares of ' 2 each at an exercise price of ' 161 per share were granted to eligible employee.
During the previous year, 590,908 stock options convertible into equivalent equity shares of ' 2 each at an exercise price of ' 161
per share were granted to eligible employee. During the current year, further 38,168 stock options convertible into equivalent
equity shares of ' 2 each at an exercise price of ' 161 per share and 1,538,655 stock options convertible into equivalent equity
shares of ' 2 each at an exercise price of ' 185 per share were granted to eligible employee.
Subject to terms and conditions of the Scheme 2020, the said options will vest in a phased manner in every year during the next
five years, as per the provisions of the Scheme 2020.
b) During the current year, the Company had instituted an EPL Employee Stock Option Scheme 2025 ("Scheme 2025") as approved
by the Board of Directors for issuance of stock options to the eligible employees of the Company and of its subsidiaries, other
than the promoters or person belonging to promoter group.
(i) The weighted average share price at the date of exercise of options exercised during the year ended 31 March 2026 was
' 225.60 (31 March 2025 was ' 226.66).
(ii) Lapsed on account of employees resigned without exercising.
(iii) The weighted average remaining life of options outstanding at the end of year 31 March 2026 is 4.47 years (31 March 2025
is 3.24 years).
42 EMPLOYEE BENEFIT OBLIGATION
The disclosures of employee benefits as defined in the Ind AS 19 - "Employee Benefits" are given below:
a. The Company makes annual contributions to the employees' gratuity fund scheme, a funded defined benefit plan which is
managed by the Life Insurance Corporation of India and HDFC Bank. The gratuity benefit plan is governed by the provisions of
the Code on Social Security, 2020. Employees are eligible for gratuity upon completion of the contractual period of continuous
service as defined under the Code on Social Security, 2020. The level of benefit provided depends on the member's length of
service and salary at the time of retirement/termination age. The present value of obligation is determined based on actuarial
valuation using the projected unit credit method, which recognizes each period of service as giving rise to additional unit of
employee benefit entitlement and measures each unit separately to build up the final obligation.
The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions
occurring at the end of the reporting period, while holding all other assumptions constant.
The sensitivity analysis presented above may not be representative of the actual change in the Defined Benefit Obligation
as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may
be correlated.
In presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using
the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating
the defined benefit obligation as recognised in the balance sheet.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
1 Amounts recognized as an expense and included in the note 31 "Employee benefits expense" are gratuity ' 17 million
(31 March 2025 ' 15 million) and leave entitlement ' 29 million (31 March 2025'31 million). Net interest cost on
defined benefit obligation recognised in note 32 under "Finance costs" is ' 15 million (31 March 2025'14 million).
2 The estimate of future salary increases considered in the actuarial valuation takes into account the rate of inflation,
seniority, promotion and other relevant factors, such as supply and demand in the employment market.
3 Contribution to provident fund, employee state insurance and labour welfare fund, which is a defined contribution
plan is recognized as an expense in financial statements (Refer note 31).
4 Weighted average duration of defined benefit obligation is 9 years (31 March 2025: 7 years).
5 Expected contributions to the plan for the year ending 31 March 2027 is ' 40 million (31 March 2026: ' 20 million).
6 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. If the return on plan asset is
below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments
in government securities, and other debt instruments
7 Amounts recognized as an exceptional expense and included in the note 35 "Exceptional items" are gratuity ' 51
million (31 March 2025: Nil) and leave entitlement ' 8 million (31 March 2025: Nil).
iv. The following is the summary of practical expedients elected on initial application:
a. Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than twelve months of lease
term on the date of initial application.
b. Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application.
v. Other disclosures:
a. The principal portion and interest portion of the lease payments aggregating ' 204 million (31 March 2025: ' 167 million)
have been separately disclosed in the statement of cash flows under cash flows from financing activities.
b. Lease contracts entered by the Company, majorly pertains for buildings taken on lease to conduct its business in the
ordinary course and data and technology equipment taken on lease for data storage and data hosting. The Company does
not have any major lease restrictions and commitment towards variable rent as per the contract.
Notes:
i) Material transactions with related parties are made on arm's length basis in the ordinary course of business and are in
compliance with section 177 and 188 of the Act, as applicable. The outstanding balances at year end are unsecured and
due to be settled for consideration in cash/cash equivalent.
ii) The above disclosures are excluding Ind AS adjustments.
iii) Others comprise of related parties which individually does not constitute more than 10% of underlying transaction or
outstanding balance amount.
iv) The closing amount pertaining to investments made in subsidiaries is not considered as part of disclosure on outstanding
balance due from subsidiaries.
v) During the current year, the Company has issued a letter of financial support to the subsidiary, EPL Deutschland GmbH
& Co. KG, under which it undertakes to provide financial support to meet its obligations, if required, till 31 May 2027. The
support does not create any rights for third party.
*The absolute figures are rounded off to nearest million, however the sum total is ' 9 million (31 March 2025: ' 11 million).
Refer note 45(B)(ii) for financial commitment.
Notes: (a) Remuneration for key management personnel disclosed above is excluding share based payment expenses
of ' 29 million (31 March 2025: ' 19 million) which will be subject to vesting conditions in accordance ESOP
scheme 2020.
(b) The performance bonus for the current year has been provided in the accounts on estimated basis.
(c) Figures does not include provision for gratuity, leave entitlement since it is actuarially determined for the
Company as a whole.
51 Dividend of' 1.36 million (31 March 2025'2.30 million) unclaimed for a period of more than seven years is transferred to Investor
Education and Protection Fund during the year. There is no amount due and outstanding to be credited to Investor Education and
Protection Fund as at reporting dates.
52 CORPORATE SOCIAL RESPONSIBILITY (CSR)
As per the Section 135 of the Companies Act, 2013 every year the Company is required to spend at least 2% of its average net profit
made during the immediately three preceding financial years on the Corporate Social Responsibility (CSR) activities. Following is the
information regarding projects undertaken and expenses incurred on CSR activities.
a. Gross amount required to be spent by the Company during the year: ' 36 million (31 March 2025: ' 35 million).
b. Amount spent during the year on CSR activities: ' 36 million (31 March 2025: ' 33 million) the details of which are as given below
has been approved by the Board of Directors.
*Includes sale of scrap and excludes export and other incentives.
e) In normal business course, the Company's payment terms are 30 to 75 days.
f) For details of Geographical segment revenue from operations by location of customers, refer note 47.
55 ADDITIONAL DISCLOSURES AS PER SCHEDULE III TO THE ACT:
a) 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.
61 Ministry of Corporate Affairs (MCA) introduced requirement for companies under the proviso to Rule 3(1) of the Companies (Accounts)
Rules, 2014 inserted by the Companies (Accounts) Amendment Rules, 2021 requiring companies, 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 is not disabled.
The Company has used an accounting software - SAP for maintaining its standalone books of account which has a feature of recording
audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software at
an application level. However, the audit trail feature was not enabled at database level during the year. Further, the Company has
complied with the retention of the audit trail records as statutorily required and the audit trail feature is not tampered with in respect
of accounting software, where such feature is enabled.
62 The Board of Directors of the Company, at its meeting held on 29 March 2026 approved the Scheme of amalgamation (by way of
merger by absorption) of Indovida India Private Limited ("Indovida India") with the Company and their respective shareholders on a
going concern basis, under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 and the rules framed
thereunder, in consideration for the issuance and allotment of the equity shares of the Company to the shareholders of Indovida India
in accordance with the share exchange ratio stipulated in the Scheme ("Merger"). The Merger is subject to necessary statutory and
regulatory approvals under the applicable laws.
Owing to the proposed merger, the Company has incurred a cost of ' 156 million towards various services for the year ended
31 March 2026 (31 March 2025: Nil).
63 The Company has evaluated the potential impact of the ongoing geopolitical developments/war situation on its financial position,
performance and cash flows. Based on the assessment performed, the management is of the view that there is no material impact
on the standalone financial statements at present. The Company will continue to monitor any future developments and assess their
impact, if any.
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