o) Provisions and contingent liabilities
Provisions are recognized when the Company has a present
legal or constructive obligation as a result of past events, it is
probable that an outflow of resources will be required to settle
the obligation and the amount can be reliably estimated.
Provisions are not recognized 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.
Contingent liabilities are disclosed in respect of possible
obligations that arise from past events but their existence
will be confirmed by the occurrence or non-occurrence of
one or more uncertain future events not wholly within the
control of the Company or where any present obligation
cannot be measured in terms of future outflow of resources or
where a reliable estimate of the obligation cannot be made.
The Company does not recognize a contingent liability but
discloses its existence in the financial statements unless the
probability of outflow of resource is remote.
Provisions and contingent liabilities are reviewed at each
balance sheet date.
p) Employee benefits
(i) Short-term obligations
Liabilities for wages and salaries, including non-monetary
benefits, that are expected to be settled wholly within 12
months after the end of the period in which the employees
render the related service, are recognized in respect of
employees’ services up to the end of the reporting period
and are measured at the amounts expected to be paid
when the liabilities are settled.
(ii) Other long-term employee benefit
The liabilities for earned leave, that are not expected
to be settled wholly within 12 months, are measured
as the present value of expected future payments to be
made in respect of services provided by employees up
to the end of the reporting period using the projected
unit credit method. The benefits are discounted using
the market yields at the end of the reporting period on
Government bonds that have terms approximating to
the terms of the related obligation. Remeasurements as a
result of experience adjustments and changes in actuarial
assumptions are recognized in the statement of profit
and loss.
(iii) Post-employment obligations
The Company operates the following post¬
employment schemes:
(a) defined benefit plans such as gratuity; and
(b) defined contribution plans such as provident fund,
family pension fund and employee’s state insurance
(a) Gratuity obligations
The liability or asset recognised in the balance sheet
in respect of defined benefit gratuity plan is the
present value of the defined benefit obligation at
the end of the reporting period. The defined benefit
obligation is calculated annually by independent
actuary using the projected unit credit method.
The present value of the defined benefit obligation
is determined by discounting the estimated future
cash outflows by reference to market yields at the
end of the reporting period on Government bonds
that have terms approximating to the terms of the
related obligation.
The net interest cost is calculated by applying the
discount rate to the net balance of the defined
benefit obligation. This cost is included in employee
benefits expenses in the statement of profit and loss.
Re-measurement gains and losses arising from
experience adjustments and changes in actuarial
assumptions are recognised in the period in
which they occur, directly in other comprehensive
income. They are included in retained earnings
in the statement of changes in equity and in the
balance sheet.
(b) Defined contribution plans
Defined contribution plans such as contributions to
provident fund, family pension fund and employee’s
state insurance are made to the funds administered
by the Government of India, and are recognized as
an expense when employees have rendered service
entitling them to the contributions.
(iv) Employee share based payments
The Company operates equity settled share-based plan
for the employees (referred to as employee stock option
scheme (ESOS). ESOS granted to the employees are
measured at fair value of the stock options at the grant
date. Such fair value of the equity settled share based
payments is expensed on a straight line basis over the
vesting period, based on the Company’s estimate of equity
shares that will eventually vest, with a corresponding
increase in other equity (share based payment reserve).
At the end of each reporting period, Company revises its
estimate of number of equity shares expected to vest.
The impact of the revision of the original estimates, if
any, is recognized in the Statement of profit and loss such
that cumulative expense reflects the revision estimate,
with a corresponding adjustment to the share based
payment reserve.
The fair value of employee stock options is measured
using the Black-Scholes model. Measurement inputs
include share price on grant date, exercise price of the
option, expected volatility (based on weighted average
historical volatility), expected life of the options, expected
dividends and the risk free interest rate (based on
government bonds).
q) Cash and cash equivalents
For the purpose of presentation in the statement of cash
flows, cash and cash equivalents includes cash at banks and
on hand, bank overdrafts and short-term deposits with an
original maturities of three months or less, which are subject
to an insignificant risk of changes in value.
r) Investment in subsidiaries
A subsidiary is an entity controlled by the Company.
Non-current investment in equity shares of subsidiaries is
recognized at cost, unless there are indications of a permanent
diminution in the value of investment, as per Ind AS 27. The
cost comprises price paid to acquire investment and directly
attributable cost. Non-current investments in preference
shares and compulsory convertible debentures of subsidiaries
is recognized at fair value through profit and loss.
s) Investment in joint ventures and associates
A joint venture is a type of joint arrangement whereby the
parties that have joint control of the arrangement have rights
to the net assets of the joint venture. Joint control is the
contractually agreed sharing of control of an arrangement,
which exists only when decisions about the relevant activities
require unanimous consent of the parties sharing control.
An associate is an entity over which the Company has
significant influence.
The investment in joint ventures and associates are carried at
cost. The cost comprises price paid to acquire investment and
directly attributable cost.
t) Financial instruments
A financial instrument is any contract that gives rise to a
financial asset of one entity and a financial liability or equity
instrument of another entity.
(i) Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as
subsequently measured at amortized cost, fair value
through other comprehensive income (OCI), and fair value
through profit or loss.
In order for a financial asset to be classified and measured
at amortized cost or fair value through OCI, it needs
to give rise to cash flows that are ‘solely payments of
principal and interest (SPPI)’ on the principal amount
outstanding. This assessment is referred to as the SPPI
test and is performed at an instrument level. Financial
assets with cash flows that are not SPPI are classified and
measured at fair value through profit or loss, irrespective
of the business model.
All financial assets are recognized initially at fair value
plus, in the case of financial assets not recorded at fair
value through profit or loss, transaction costs that are
attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at fair value
through profit or loss are expensed to statement of profit
and loss. Purchases or sales of financial assets that
require delivery of assets within a time frame established
by regulation or convention in the marketplace (regular
way trades) are recognized on the trade date, i.e., the
date on which the Company commits to purchase or sell
the asset.
Subsequent measurement
Subsequent measurement of financial assets depends on
the Company’s business model for managing the asset
and the cash flow characteristics of the asset. For the
purposes of subsequent measurement, financial assets
are classified in four categories:
- Financial assets at amortized cost (debt instruments)
- Financial assets at fair value through other
comprehensive income (FVTOCI) with recycling of
cumulative gains and losses (debt instruments)
- Financial assets designated at fair value through
OCI with no recycling of cumulative gains and losses
upon derecognition (equity instruments); and
- Financial assets at fair value through profit or loss
Financial assets at amortized cost (debt instruments)
A ‘financial asset’ is measured at the amortized cost if
both the following conditions are met:
a) The asset is held within a business model whose
objective is to hold assets for collecting contractual
cash flows, and
b) Contractual terms of the asset give rise on specified
dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal
amount outstanding.
After initial measurement, such financial assets are
subsequently measured at amortized cost using the
effective interest rate (EIR) method. Amortized cost
is calculated by taking into account any discount or
premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortization is included
in finance income in the statement of profit and loss.
The losses arising from impairment are recognized in the
statement of profit and loss.
Financial assets at FVTOCI (debt instrument)
A ‘financial asset’ is classified as at the FVTOCI if both of
the following criteria are met:
a) The objective of the business model is achieved both
by collecting contractual cash flows and selling the
financial assets, and
b) The asset’s contractual cash flows represent SPPI.
Debt instruments included within the FVTOCI category are
measured initially as well as at each reporting date at fair
value. Fair value movements are recognized in the other
comprehensive income (OCI). However, the Company
recognizes interest income, impairment losses & reversals
and foreign exchange gain or loss in the statement of
profit and loss. On derecognition of the asset, cumulative
gain or loss previously recognized in OCI is reclassified
from the equity to the statement of profit and loss. Interest
earned whilst holding FVTOCI debt instrument is reported
as interest income using the EIR method.
Financial assets designated at fair value through OCI
(equity instruments)
In the case of equity instruments which are not held for
trading and where the Company has taken irrevocable
election to present the subsequent changes in fair
value in other comprehensive income, these elected
investments are initially measured at fair value plus
transaction costs and subsequently, they are measured
at fair value with gains and losses arising from changes in
fair value recognized in other comprehensive income and
accumulated in the ‘Equity instruments through other
comprehensive income’ under the head ‘Other Equity’.
The cumulative gain or loss is not reclassified to profit or
loss on disposal of the investments. The Company makes
such election on an instrument -by-instrument basis.
If the Company decides to classify an equity instrument as
at FVTOCI, then all fair value changes on the instrument,
excluding dividends, are recognized in the OCI. There is
no recycling of the amounts from OCI to statement of
profit and loss, even on sale of investment. However,
the Company may transfer the cumulative gain or loss
within equity.
Dividends are recognized as other income in the
statement of profit and loss when the right of payment
has been established, except when the Company benefits
from such proceeds as a recovery of part of the cost of the
financial asset, in which case, such gains are recorded in
OCI. Equity instruments designated at fair value through
OCI are not subject to impairment assessment.
A financial asset is held for trading if:
O it has been acquired principally for the purpose of
selling it in the near term; or
O on initial recognition it is part of a portfolio of
identified financial instruments that the Company
manages together and has a recent actual pattern of
short-term profit-taking; or
O it is a derivative that is not designated and effective
as a hedging instrument or a financial guarantee.
Financial assets at FVTPL (equity instruments)
Financial assets at fair value through profit or loss are
carried in the balance sheet at fair value with net changes
in fair value recognized in the statement of profit and loss.
In case of equity instruments which are held for trading are
initially measured at fair value plus transaction costs and
subsequently, they are measured at fair value with gains
and losses arising from changes in fair value recognized in
statement of profit and loss.
This category includes derivative instruments and
listed equity investments which the Company had not
irrevocably elected to classify at fair value through OCI.
Dividends on listed equity investments are recognized in
the statement of profit and loss when the right of payment
has been established.
Investment in Subsidiaries
Investment in subsidiaries is carried at cost in the separate
financial statements.
Investment in joint ventures and associates
Investment in joint ventures and associates is carried
at cost.
Derecognition
A financial asset (or, where applicable, a part of a financial
asset or part of a group of similar financial assets) is
primarily derecognized when:
- The rights to receive cash flows from the asset have
expired, or
- The Company has transferred its rights to receive cash
flows from the asset or has assumed an obligation to
pay the received cash flows in full without material
delay to a third party under a ‘pass-through’
arrangement; and either (a) the Company has
transferred substantially all the risks and rewards of
the asset, or (b) the Company has neither transferred
nor retained substantially all the risks and rewards of
the asset, but has transferred control of the asset.
Impairment of financial assets
The Company applies the expected credit loss model
for recognizing impairment loss on financial assets
measured at amortized cost, debt instruments at FVTOCI,
trade receivables and other contractual rights to receive
cash or other financial asset.
Expected credit losses are the weighted average of credit
losses with the respective risks of default occurring as
the weights. Credit loss is the difference between all
contractual cash flows that are due to the Company in
accordance with the contract and all the cash flows that
the Company expects to receive (i.e. all cash shortfalls),
discounted at the original effective interest rate (or
credit-adjusted effective interest rate for purchased or
originated credit impaired financial assets). The Company
estimates cash flows by considering all contractual terms
of the financial instrument (for example, prepayment,
extension, call and similar options) through the expected
life of that financial instrument.
The Company measures the loss allowance for a financial
instrument at an amount equal to the lifetime expected
credit losses if the credit risk on that financial instrument
has increased significantly since initial recognition. If the
credit risk on a financial instrument has not increased
significantly since initial recognition, the Company
measures the loss allowance for that financial instrument
at an amount equal to 12-month expected credit losses.
12-month expected credit losses are portion of the life¬
time expected credit losses and represent the lifetime
cash shortfalls that will result if default occurs within the
12 months after the reporting date and thus, are not cash
shortfalls that are predicted over the next 12 months.
For trade receivables, the Company follows “simplified
approach for recognition of impairment loss. The
application of simplified approach does not require the
Company to track changes in credit risk.
Further, for the purpose of measuring lifetime expected
credit loss allowance for trade receivables, the Company
has used a practical expedient as permitted under Ind
AS 109. This expected credit loss allowance is computed
based on a provision matrix which takes into account
historical credit loss experience and adjusted for forward
looking information.
(ii) Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as
financial liabilities at fair value through profit or loss, loans
and borrowings, payables, or as derivatives. All financial
liabilities are recognized initially at fair value and, in the
case of loans and borrowings and payables, net of directly
attributable transaction costs. The Company’s financial
liabilities include trade and other payables, loans and
borrowings including derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their
classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss
(FVTPL) include financial liabilities held for trading and
financial liabilities designated upon initial recognition
as at FVTPL. Financial liabilities are classified as held
for trading if they are incurred for the purpose of
repurchasing in the near term. This category also includes
derivative financial instruments entered into by the
Company that are not designated as hedging instruments
in hedge relationships as defined by Ind AS 109 ‘Financial
instruments’.
Gains or losses on liabilities held for trading are recognized
in the statement of profit and loss.
Financial liabilities at amortized cost (Loans and
borrowings)
After initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortized cost
using the EIR method. Gains and losses are recognized
in statement of profit and loss when the liabilities are
derecognized as well as through the EIR amortization
process. Amortized cost is calculated by taking into
account any discount or premium on acquisition and
fees or costs that are an integral part of the EIR. The EIR
amortization is included as finance costs in the statement
of profit and loss. This category generally applies
to borrowings.
Derecognition
A financial liability is derecognized when the obligation
under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another
financial liability from the same lender on substantially
different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification
is treated as the derecognition of the original liability
and the recognition of a new liability. The difference in
the respective carrying amounts is recognized in the
statement of profit and loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the
net amount is reported in the balance sheet if there is a
currently enforceable legal right to offset the recognized
amounts and there is an intention to settle on a net basis, to
realise the assets and settle the liabilities simultaneously.
u) Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the
net profit or loss for the year attributable to the equity
shareholders of the Company by the weighted average
number of equity shares outstanding during the year.
(ii) Diluted earnings per share
For the purpose of calculating diluted earnings per
share, the net profit or loss for the year attributable
to equity shareholders of the Company and weighted
average number of equity shares outstanding during the
year are adjusted for the effect of all potentially dilutive
equity shares.
v) Recent pronouncements
Ministry of Corporate Affairs (“MCA”) notifies new standards
or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as issued from time to
time. For the year ended 31st March, 2026, MCA has notified
following Amendment to Ind AS, applicable to the Company
w.e.f. 1st April, 2025.
- Ind AS - 21 The Effects of Changes in Foreign Exchange
Rates 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.
- Amendments to Ind AS 7 - Cash flow statement and Ind
AS 107 - Financial Instrument Disclosures relating to
supplier finance arrangements
- Ind AS 1-Presentation of Financial Statements
Classification of Liabilities as current or non- current and
non- current liabilities with covenants.
The Company has reviewed the new pronouncements and
based on its evaluation has determined that it does not have
any significant impact in its Standalone financial statements.
Notes:
1) Trade receivable represents the amount of consideration, in exchange for goods or services transferred to the customers, that is
unconditional. There are no contract assets and contract liabilities.
2) No trade receivables are due from directors or other officers of the Company either severally or jointly with any other person. Trade
receivable of H3,851.40 Lakh (March 31, 2025: 240.94 Lakh) is due from a private company in which some directors of the Company are
interested as director/member.
3) Trade receivables include HNil (March 31, 2025: H13.33 Lakh) due from a subsidiary company.
4) Refer note 37.0 & 38.0 for information about fair value measurement, credit risk and market risk of trade receivables.
5) Refer note 40.0 for ageing schedule of trade receivables.
ii) The rights, preferences and restrictions attached to each class of shares including restrictions on the distribution
of dividends and the repayment of capital:
The Company has only one class of equity shares having par value of H10 per share. Each holder of equity shares is entitled to one vote
per share. The dividend proposed by the board of directors is subject to the approval of the shareholders in the ensuing annual general
meeting except in the case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining
assets of the Company, after distribution of all preferential amounts, in proportion to their shareholding.
Nature and purpose of reserves
Capital redemption reserve
Capital redemption reserve was created for redemption of preference share capital and it is a non-distributable reserve.
Capital reserve
Capital reserve represent capital subsidy received and amount received on forfeiture of shares of the Company. Capital reserve is utilized in
accordance with the provisions of the Companies Act, 2013.
13.0 Other equity (Contd.)
Share based payment reserve
Share based payment reserve represents the fair value of the stock options granted by the Company under the Employees Stock Option
Plan accumulated over the vesting period. 23,532 (March 31, 2025 : 2,131) options have been exercised during the year. The remaining
reserve will be utilised on exercise of the remaining options already granted by the Company.
Securities premium
Securities premium is used to record the premium on issue of shares. The reserve is utilized in accordance with the provisions of the
Companies Act, 2013.
Application money against convertible share warrants
The Company had allotted 14,49,000 convertible share warrants during the financial year 2023-24 to a promoter group company upon
receipt of upfront payment being 25% of total consideration receivable. 13,39,000 warrants were outstanding as on March 31, 2025 for
conversion. During the year, Company has converted entire 13,39,000 warrants into equity upon receipt of balance allotment money.
General reserve
General reserve is used to transfer profits from retained earnings for general purposes. The reserve is utilized in accordance with the
provisions of the Companies Act, 2013.
Notes:
i) Refer note 14.1 for the details of effective interest rate, repayment terms and security details for the borrowings.
ii) The carrying amount of financial and non financial assets as security for secured borrowings is disclosed in note 29.0.
iii) Refer note 38.0 for liquidity risk.
iv) Loans discounted to their present value using the average interest rate on borrowings and the differential loan amount has been
disclosed as government grant.
v) The Company has filed quarterly statements of current assets with the banks that are in agreement with the books of accounts.
Note:
a) Refer note 38.0 for information about liquidity risk and market risk of trade payables.
b) Refer note 41.0 for ageing schedule of trade payables.
c) Trade payable includes H283.71 Lakh (March 31, 2025 H Nil) outstanding due to subsidiary company.
d) Dues to micro and small enterprises*:
The Company has certain dues to suppliers registered under Micro, Small and Medium Enterprises Development Act, 2006 (‘MSMED
Act’). The disclosure pursuant to the said MSMED Act are as follows:
31.0 Gratuity and other post-employment benefit plans
31.1 Gratuity
The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972 (upto November 20, 2025) and Code
on Social Security, 2020 (effective November 21, 2025). Employees who are in continuous service for a period of 5 years are eligible for
gratuity. The amount of gratuity payable on retirement/ termination is the employees last drawn basic salary per month computed
proportionately for 15 days salary multiplied for the numbers of years of services. The gratuity plan is an unfunded plan.
31.0 Gratuity and other post-employment benefit plans (Contd.)
Fair value and changes in fair value of plan assets during the year ended March 31, 2026:
a) Gratuity obligations are not funded.
b) As per the policy of the Company, no gratuity is payable to the executive directors of the Company.
c) The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and
other relevant factors.
31.2Defined contribution plans
The Company also has certain defined contribution plans, such as provident fund, family pension fund and employee’s state insurance
for benefit of employees. Contributions are made to funds administered by the Government. The obligation of the Company is limited
to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognized during the year
towards contribution to defined contribution plans is H310.87 Lakh (March 31, 2025: H295.69 Lakh).
31.3 Leave obligation
The Company provides for leave obligations based on actuarial valuation carried at the year end using the projected unit credit method.
33.0 Leases - short term leases
The Company has certain operating leases primarily consisting of leases for office premises, guest houses and warehouses having
different lease terms. Such leases are generally with the option of renewal against increased rent and premature termination clause.
Rental expense recorded for short-term leases and low value asset leases is H154.06 Lakh for the year ended March 31, 2026 (March 31,
2025: H137.13 Lakh).
The Company has taken certain land on long term lease for factory purposes (disclosed under "Right of use assets"). Since entire lease
payments have been prepaid, the Company does not have any future lease liability towards the same.
For details pertaining to the carrying value of right of use asset and amortization charged thereon during the year, refer note 3.3 of the
financial statements.
35.0 Segment information
35.1 Primary segment (by business segment):
Ind AS 108 establishes standards for the way that the Company report information about operating segments and related disclosures
about products and services, geographic areas and major customers. The Company’s operations comprises of only one segment
i.e. sale of polyester staple fibre and polyester yarn which are mainly having similar risks and returns. Based on the “management
approach” as defined in Ind AS 108, the management also reviews and measure the operating results taking the whole business as
one segment (synthetic textile). In view of the same, separate primary segment information is not required to be given as per the
requirements of Ind AS 108 on “Operating Segments”.
36.5 No amount has been written off or written back during the year in respect of debts due from or to related parties.
37.0 Financial instruments
The fair value of financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current
transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values
A. The fair values of derivatives such as forward/ derivative contracts are on mark to market basis as per bank.
B. The Company has adopted effective interest rate for calculating interest expense. Processing fees and transaction costs relating
to each loan has been considered for calculating effective interest rate. The fair values of non-current borrowings are classified as
level 3 in the fair value hierarchy due to the use of unobservable inputs including own credit risk.
37.0 Financial instruments (Contd.)
C. Loans, investments (other than quoted investments in market) and other non-current financial assets are evaluated by the
Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this
evaluation, allowances are taken into account for expected losses of these receivables. The fair value of loans, investments and
other non-current financial assets has been considered as equal to their carrying amount. These fair values are classified as level
3 in the fair value hierarchy due to the inclusion of unobservable inputs including counter party credit risk.
D. The fair value of investments, which are quoted in market, are on mark to market basis.
E. Fair values of cash and cash equivalents, trade receivables, bank balances, current investments, current loans, other current
financial assets, trade payables, current borrowings and other financial liabilities are considered to be the same as their carrying
amount due to short-term maturities of these instruments.
Fair value hierarchy
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).
38.0 Financial risk management
The Company realizes that risks are inherent and integral aspect of any business. The primary focus is to foresee the unpredictability
of financial markets and seek to minimize potential adverse effects on its financial performance. The Company’s financial risk
management is an integral part of how to plan and execute its business strategies. The Company’s senior management oversees the
management of these risks.
The Company has exposure to the following risks (arising from financial instruments):
- Credit risk
- Liquidity risk
- Market risk
A. Credit risk
Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. The Company is
exposed to credit risk mainly from trade receivables, loans given and other financial assets.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant
increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit
risk, the Company compares the risk of default occurring on assets as at the reporting date with the risk of default as at the date
of initial recognition.
Trade receivables are typically unsecured and derived from revenue earned from customers located in India and abroad. Credit
risk is managed by the Company through customer assessment, credit approvals, establishing credit limits and continuously
monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business. The
Company measures the expected credit loss of trade receivables and uses a provision matrix to compute the expected credit loss
amount for trade receivables. The provision matrix takes into account external and internal credit risk factors and historical data
of credit losses from various customers based on historical trend. The maximum exposure to credit risk at the reporting date is the
carrying value of trade receivables and other financial assets.
B. Liquidity risk
Liquidity risk is the risk that the Company will encounter 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.
i) Financing arrangements
The Company believes that it has sufficient working capital to meet its current requirements. Accordingly, no liquidity risk
is perceived. Further, the Company is having cash credit facilities from banks of H18,000.00 Lakh (March 31, 2025: H14,750.00
Lakh), repayable on demand which carry floating rate of interest.
C. Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of fluctuation in market
prices. These comprise three types of risk i.e., currency rate, interest rate and other price related risks. Financial instruments
affected by market risk include borrowings, loans given, deposits, foreign currency receivables and payables and derivative
financial instruments such as forward contracts. Foreign currency risk is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in foreign exchange rates. 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. Regular interaction with bankers,
intermediaries and the market participants help us to mitigate such risk.
i) Foreign currency risk
The Company is exposed to foreign currency risk through operating and financing activities in foreign currency. The Company
uses derivative financial instruments, such as foreign currency sale and purchase forward contracts , to reduce foreign
currency risk exposure and follows its risk management policies.
The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimise returns
to its shareholders. The capital structure of the Company is based on management’s judgement of the appropriate balance of key
elements in order to meet its strategic and day-to-day needs. The Company considers the amount of capital in proportion to risk
and manage the capital structure in light of changes in economic conditions and the risk characteristics of the underlying assets. The
Company’s policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor’s, creditor’s
and market’s confidence and to sustain future development and growth of its business. The Company will take appropriate steps in
order to maintain, or if necessary adjust, its capital structure in consonance with its long term strategic plans.
43.0 Ganesha Ecosphere Employees' Stock Option Scheme-2021
The Company had introduced Ganesha Ecosphere Employees’ Stock Option Scheme 2021 (“ESOP Scheme”) to provide Employee
Stock Options (“options”) to all the eligible employees of the Company and its subsidiaries. The ESOP Scheme is administered by
the Nomination and Remuneration Committee (NRC) of the Company and implemented through Ganesha Employees' Welfare Trust
(“Trust”).
The NRC at its meeting held on March 7, 2024 had granted 39,194 options to the eligible employees of the Company and its Subsidiaries.
Each option granted under the scheme entitles the holder to one equity share of the Company at an exercise price of H543/- per share.
Options granted under the Scheme shall be exercisable within 3 years from the date of vesting. The NRC has re-allocated 200 options
on forfeiture of similar number of options during the financial year ended March 31, 2026.
44. The Company has migrated to an upgraded version of accounting software MICROSOFT DYNAMICS BUSINESS CENTRAL from earlier
version of MICROSOFT DYNAMICS NAV effective from April 01, 2025, 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 these softwares, except that audit trail feature
was enabled at the database level from July 18, 2025 due to the technical issues faced during migration to new software. Further, no
instance of audit trail feature being tampered with was noted in respect of accounting software. Additionally, the audit trail has been
preserved by the Company as per the statutory requirement for record retention, to the extent it was enabled.
45. During the year, the Company has made an allotment of 13,39,000 Fully Paid-up Equity Shares having face value of H10/- each, at an
issue price of H1,035/- per share (including a premium of H 1,025/- per share), to the Promoter Group, pursuant to the exercise of the right
of conversion of 13,39,000 warrants into equity shares, on preferential basis under Chapter V of the SEBI (Issue of Capital & Disclosure
Requirements) Regulations, 2018. The amount raised against said allotment was utilized for the purpose for which funds were raised.
The equity shares allotted aforesaid rank pari-passu with the existing equity shares of the Company in all respects.
46. On November 21, 2025, the Government of India notified the four Labour Codes - the Code on Wages, 2019, the Industrial Relations
Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020 - consolidating
29 existing labour laws. The Ministry of Labour & Employment published draft Central Rules and FAQs to enable assessment of the
financial impact due to changes in regulations. The Company has made changes to salary structure due to change in definition of
“wages” and assessed the financial implications of these changes based on actuarial valuation, which has resulted in increase in gratuity
and leave liability by H199.90 Lakh arising out of past service cost and the same has been included in employee benefit expenses in the
statement of profit and loss.
47. Disclosures as per Section 186(4) of the Companies Act, 2013
The details of the loans, guarantees and investments under Section 186 of the Companies Act, 2013 are as follows:
(i) Details of investments made and loans given are provided under the respective heads.
(ii) The Company has given corporate guarantees of H37,273.71 Lakh (March 31, 2025: H39,770.34 Lakh) to various banks for securing
the amounts lent by them to Subsidiaries of the Company.
49.0 Other statutory information
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for
holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 and the Rules made thereunder.
(ii) The Company does not have any transactions with struck off companies under Section 248 of the Companies Act, 2013 or Section
560 of the Companies Act, 1956.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies beyond the
statutory period.
(iv) The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.
(v) 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:
(a) 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
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(vi) 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:
(a) 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
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(vii) The Company does not have any transactions which are 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).
(viii) The Company is regular in paying its dues and has not been declared as wilful defaulter by any bank or financial institution
(as defined under the Companies Act, 2013) or consortium thereof or other lender in accordance with the guidelines on wilful
defaulters issued by the Reserve Bank of India.
(ix) The Company is in compliance with the number of layers for its holding in downstream companies prescribed under clause (87) of
Section 2 of the Companies Act, 2013 read with the Companies (Restrictions on number of Layers) Rules, 2017.
(x) The Company has not entered into any scheme of arrangement, during the year, which has any impact on financial results or
position of the Company.
(xi) The Company has not revalued any of its property, plant and equipment (including right-of-use assets) or intangible assets during
the year.
(xii) The Company has not granted any loans or advances in the nature of loans to promoters, directors, KMPs and the related parties
(as defined under Companies Act, 2013) either severally or jointly with any other person that are repayable on demand or without
specifying any terms or period of repayment.
(xiii) The Company has used the borrowings from banks for the purpose for which it was taken.
50.0 Previous year figures have been regrouped/ rearranged, wherever considered necessary to conform to current year’s classification.
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