(p) Provisions and Contingent Liabilities & Assets
Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events
and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent
Assets are neither recognised nor disclosed in the financial statements.
(q) Investment in Subsidiaries
Investments in subsidiaries are recognised at cost as per Ind AS 27.
(r) 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 recognised 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 Obligations
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 Government Securities (G-Sec) at the end of the reporting period that have terms
approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial
assumptions are recognised in the Statement of Profit and Loss.
(iii) Post-employment Benefits
The Company operates the following post-employment schemes:
(a) Defined benefit plans such as Gratuity and Pension; and
(b) Defined contribution plans such as Provident Fund.
Defined Benefit Plans
The liability or asset recognised in the balance sheet in respect of defined benefit pension and gratuity plans is the present value of the
defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated
annually by actuaries 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 and the fair value of plan
assets. This cost is included in employee benefit expense in the Statement of Profit and Loss.
Remeasurement 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.
Defined Contribution Plans
Defined Contribution Plans such as Provident Fund etc., are charged to the Statement of Profit and Loss as incurred. Further for certain
employees, the monthly contribution for Provident Fund is made to a Trust administered by the Company. The interest payable by the Trust
is notified by the Government. The Company has an obligation to make good the shortfall, if any.
Termination Benefits
Termination benefits are payable when employment is terminated by the Company before the normal retirement date, or when an employee
accepts voluntary redundancy in exchange for these benefits. The Company recognises termination benefits at the earlier of the following
dates: (a) when the Company can no longer withdraw the offer of those benefits; and (b) when the Company recognises costs for a
restructuring that is within the scope of Ind AS 37 and involves the payment of terminations benefits. In the case of an offer made to
encourage voluntary redundancy, the termination benefits are measured based on the number of employees expected to accept the offer.
Benefits falling due for more than 12 months after the end of the reporting period are discounted to present value.
(s) Earnings Per Share
Earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average
number of equity shares outstanding during the year.
(t) Income Taxes
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the
expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at
the balance sheet date. Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses. Current and deferred tax is recognised in profit
or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also
recognised in other comprehensive income or directly in equity, respectively. Current tax is determined as the amount of tax payable in respect
of taxable income for the period as per the provisions of Income Tax Act,1961.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the balance sheet
date, and any adjustment to tax payable in respect of previous years.
(u) Significant Accounting Judgements, Estimates and Assumptions
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results.
Management also needs to exercise judgement in applying the Company's accounting policies. The management overview the areas that involve
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.
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company
has based assumptions and estimates on parameters available when the financial statements were prepared. However existing circumstances
and assumptions about future developments may change due to market changes or circumstances arising that are beyond the control of the
Company. Such changes are reflected in the assumptions as and when they occur.
i. Taxes
The Company provides for tax considering the applicable tax regulations and based on reasonable estimates, management periodically
evaluates positions taken in the tax returns giving due considerations to tax laws and establishes provisions in the event if required as a
result of differing interpretation or due to retrospective amendments, if any. The recognition of deferred tax assets is based on availability
of sufficient taxable profits in the Company against which such assets can be utilised.
ii. Defined Benefit Obligations
The cost of the defined benefit plans and the present value of the obligation are determined using actuarial valuations. An actuarial
valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of
the discount rate, 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. The
parameters subject to change is the discount rate, escalation rate, expected rate of return and mortality rate. Future salary increases are
based on expected future inflation rates.
iii. Recoverability of Trade Receivables
Required judgements are used in assessing the recoverability of overdue trade receivables and for determining whether a provision against
those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future
payments and any possible actions that can be taken to mitigate risk of non-payment.
(ii) Terms/ Rights attached to Equity Shares
The Company has only one class of equity shares having a par value of ' 10/-. Each shareholder of equity shares is entitled to one
vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining
assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares
held by the shareholders. The Company declares and pays dividend in Indian rupees.
Final Dividend of ' 12/- per equity share for the Financial year ended 31st March 2026 proposed by Board of Directors in its meeting
held on 6th May 2026 (' 12/- per equity share for FY 2024-25) is in compliance with Section 123 of the Companies Act 2013 and is
subject to approval of shareholders in the ensuing Annual General Meeting and if approved, would result in Cash outflow of ' 27.88
Crores.
Nature and Purpose of Other Reserves:1 Capital Redemption Reserve
Capital Redemption Reserve is towards the redemption of preference shares allotted to Industrial Development Bank of India (IDBI)
in FY 2014 - 15.
2 Securities Premium
Securities Premium Reserve is towards the premium on issue of equity shares. This reserve is utilised in accordance with the
provisions of The Companies Act, 2013.
3 Capital Reserve
Capital Reserve of ' 44.39 Crores was created on demerger of manufacturing business of erstwhile Garware Chemicals Limited (GCL)
as per the scheme of arrangement between the Company and GCL under provisions of section 391 - 394 of the Companies Act, 1956
and ' 618.42 Crores (net of deferred tax) on account of fair valuation of property, plant and equipment done as at the transition date
of Ind AS. Capital Reserve also includes revaluation reserve amounting to ' 45.85 Crores pertains to revaluation of land at Mumbai at
Vile Parle in 2007 and ' 187.56 crores revaluation of land situated at Aurangabad and Nashik in FY 2012 - 13 and ' (132.35) crores
pertains to impairment of assets taken over from GCL in FY 2012 - 13 and ' 0.02 Crores amount paid up on cancellation of 82,756
shares.
4 General Reserve
General Reserve is created from time to time by way of transfer of profits from retained earnings for appropriation purposes. General
reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income.
5 Retained Earnings
This reserve represents undistributed accumulated earnings of the Company as on the balance sheet date.
6 Fair Value Through Other Comprehensive Income (FVTOCI) Equity Instruments
The Company has elected to recognise changes in fair value of certain investments in equity instruments through other comprehensive
income. These changes are accumulated within the FVTOCI equity instruments reserve within equity. The Company transfers amounts
from this reserve to retained earnings when the relevant equity instruments are derecognised.
i) There were no instances during the year that required the Company to register a new charge or file for the satisfaction of an existing charge.
ii) Quarterly return / statements of current assets filed by the Company with banks are in agreement with the books of accounts.
iii) The Company has not been declared as Wilful Defaulter by any bank or financial institution.
iv) No funds have been received by the company from any person or entity including foreign entity (Funding Parties), with the understanding
whether recorded in writing or otherwise that the Company shall whether 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 provide any guarantee, security or the
like on behalf of the Ultimate Beneficiaries.
v) Funds raised on short term basis are not used for long term purpose.
vi) Short term bank facilities availed from banks are secured by hypothecation of all the current assets including inventory, book debts etc. and
second charge on property, plant and equipment of the Company excluding Vile Parle, Mumbai property and Nasik property.
b) The Company has given counter-guarantees for ' 60.58 Crores (March 31,2025: ' 60.24 Crores) to banks in respect of guarantees
given by the banks to third parties for purchase of equipments, supply of goods, clearance of goods from customs, excise bonds, etc.
c) Letters of Credit opened on behalf of the Company by Banks for purchase of materials and equipment amount to ' 83.25 Crores
(March 31, 2025: ' 42.76 Crores).
d) Capital Commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for ' 65.60 Crores (March 31,2025:
' 119.52 Crores) against which an advance of ' 27.97 Crores (March 31, 2025: ' 25.69 crores) has been paid.
e) Company has procured certain Plant and Machinery under Export Promotion Capital Goods scheme. Export obligation outstanding
against the same is NIL (March 31,2025: ' 65.86 Crores).
A Defined Contribution Plan
The Company has certain defined contribution plans. Contributions are made to provident fund / Superannuation fund / National
Pension Scheme contribution for employees at the rate as per regulation of basic salary . The contributions are made to registered
provident fund administered by the government, however certain employees are covered under the contributory plans with trust
“Garware Polyester Limited Office Staff and Officers Provident Fund”.
B Compensated Absences
The leave obligations is towards encashment of balance leave. The provision made during the year is ' 1.66 Crores (March 31, 2025
- provided ' 3.21 Crores)
C Gratuity
The Company provides for gratuity for employees as per the Payment of Gratuity Act, 1972. The gratuity plan is a funded plan.
2 Discount Rate Risk : Variations in the discount rate used to compute the present value of the liabilities may seem small, but in
practise can have a significant impact on the defined benefit liabilities.
3 Future Salary Increase and Inflation Risk : Since price inflation and salary growth are linked economically, they are combined for
disclosure purposes. Rising salaries will often result in higher future defined benefit payments resulting in a higher present value of
liabilities especially unexpected salary increases provided at management's discretion may lead to uncertainties in estimating this
increasing risk.
4 Asset-Liability Mismatch Risk : Risk arises if there is a mismatch in the duration of the assets relative to the liabilities. By matching
duration with the defined benefit liabilities, the Company is successfully able to neutralize valuation swings caused by interest rate
movements.
Level 1: Hierarchy includes financial instruments measured using quoted prices. This includes quoted equity instruments. The fair value of
all the equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period.
Level 2: The fair value of derivatives and investment in unquoted equity and unquoted mutual funds instruments 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.The mutual funds are valued
using the closing NAV.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
ii) Valuation Technique Used to Determine Fair Value
Specific valuation techniques used to value financial instruments include:
The use of quoted market prices or dealer quotes for similar instruments
The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date
The fair value of mutual funds is calculated by valuing them at closing NAV
iii) Fair Value of Financial Assets and Liabilities 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.
32. FINANCIAL RISK MANAGEMENT
The Company's activities exposes it to market risk, liquidity risk and credit risk. In order to minimise any adverse effects on the financial
performance of the Company, derivative financial instruments, such as foreign exchange forward contracts are taken.
The Company's risk management is carried out by the Company's treasury department under policies approved by the Board of Directors. The
Board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest
rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.
(A) Credit Risk
Credit Risk refers to a risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The
Company is exposed to credit risk from its operating activities primarily trade receivables, derivative financial instruments, investment in
mutual funds, deposits held with banks, loans and other receivables.
The Company has a policy of only dealing with counterparties that have sufficiently high credit rating. The Company's exposure and
credit ratings of its customers are continuously monitored and the aggregate value of transactions is reasonably spread amongst the
counterparties.
For investment in mutual funds, derivative financial instruments and balances held with banks, banks and recognised financial institutions
with only high credit rating are accepted.
(i) Trade Receivables
Credit risk arises from the possibility that customer will not be able to settle their obligations as and when agreed. To manage this,
the Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic
trends, analysis of historical bad debts, ageing of accounts receivable and forward looking information. Individual credit limits are set
accordingly.
(B) Liquidity Risk
Liquidity Risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial instruments
that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close
to its fair value.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an
adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature
of the underlying business, the Company's treasury maintains flexibility in funding by maintaining availability under committed credit lines.
I) Foreign Currency Risk
Foreign Currency Risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange
rates. The Company is engaged in international trade and thereby exposed to foreign exchange risk arising from foreign currency
transactions, primarily with respect to the USD, GBP and EUR. Foreign exchange risk arises from future commercial transactions
and recognised assets and liabilities denominated in a currency that is not the company's functional currency ('). The Company's risk
management policy is to hedge sales and purchases. The Company uses foreign exchange forward contracts to hedge its exposure
in foreign currency risk.
II) Interest Rate Risk
Interest Rate Risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market
interest rates. The Company is exposed to interest rate risk on financial liabilities such as borrowings, both non - current and current.
The Company has not used any interest rate derivatives. The Company is also exposed to interest rate risk on its financial assets
that include fixed deposits and liquid investments such as deposits which are part of cash and cash equivalents. Since all these are
generally for short durations, the Company believes it has manageable risk for achieving satisfactory returns.
III) Equity Price Risk
Equity Price Risk is related to the change in market reference price of the investments in quoted equity securities. The fair value of
some of the Company's investments exposes the Company to equity price risks. In general, these securities are not held for trading
purposes.
33. CAPITAL MANAGEMENT
a) Risk Management
The Company's objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to
provide returns for shareholders and benefits for other stakeholders, and maintain an optimal capital structure to reduce the cost of capital.
For the purpose of the Company's capital management, capital includes issued equity capital and all other equity reserves attributable to
the equity holders of the parent. The primary objective of the Company's capital management is to maximise the shareholders value. The
Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the
financial covenants.
36. PERVIOUS YEAR FIGURES HAVE BEEN RECLASSIFIED/REGROUPED TO CONFORM TO THIS YEAR’S CLASSIFICATION.
37. APPROVAL OF FINANCIAL STATEMENTS
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