2.13 Provisions and contingent liabilities
Provisions
A provision is recognized if, as a result of a past event, the Company has a present obligation that can be estimated reliably, and it is
probable that an outflow of economic benefits will be required to settle the obligation. Provisions are recognized at the best estimate
of the expenditure required to settle the present obligation at the reporting date. Provisions are determined by discounting the
expected future cash flows (where the effect of time value of money is material, representing the best estimate of the expenditure
required to settle the present obligation at the reporting date) at a pre-tax rate that reflects current market assessments of the time
value of money and the risk specific to the liability. The unwinding of discount is recognized as finance cost.
Contingent liabilities
A contingent liability is a possible obligation that arises from past events and the existence of which 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
liabilities are disclosed by way of note to the standalone Ind AS financial statements.
2.14 Investment in subsidiaries and associates
Investment in subsidiaries and associates are shown at cost less impairment losses if any. Where the carrying amount of an
investment is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount and the
difference is transferred to the statement of profit and loss.
On disposal of investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the
statement of profit and loss.
2.15 Financial Instruments
a) Initial recognition and initial measurement
The financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual
provisions of the instrument.
A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially
measured at fair value plus or minus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition
or issue. A trade receivable without a significant financing component is initially measured at the transaction price.
Classification and subsequent measurement
i) Financial assets
On initial recognition, a financial asset is classified and measured at:
• amortized cost;
• fair value through other comprehensive income (FVOCI) - debt investment;
• fair value through other comprehensive income (FVOCI) - equity investment; or
• fair value through profit and loss (FVTPL)
Financial assets are not re-classified subsequent to their initial recognition, except if and in the period the Company changes
its business model for managing financial assets.
A financial asset is measured at amortized cost if it meets both the following conditions and is not designated as at FVTPL:
• the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and
• the contractual terms of the financial assets give rise on a specified date to cash flows that are solely payments of
principal and interest on the principal amounts outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
• the asset is held within a business model whose objective is achieved by both collecting contractual cash flow an
selling financial assets; and
• the contractual terms of the financial assets give rise on a specified date to cash flows that are solely payments of principal and
interest on the principal amounts outstanding.
On initial recognition of an equity investment that is not held for trading, the Company irrevocably elects to present subsequent
changes in the investment's fair value in OCI (designated as FVOCI-equity investment). This election is made on an investment-to-
investment basis.
All financial assets not classified as amortized cost or FVOCI as described above are measured at FVTPL. On initial recognition, the
Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at
FVOCI as at FVTPL, if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
Impairment of financial assets
The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortized cost. The
impairment methodology applied depends on whether there has been a significant increase in credit risk.
In accordance with Ind AS 109, the Company applies expected credit loss ("ECL") model for measurement and recognition of
impairment loss. The Company follows 'simplified approach' for recognition of impairment loss allowance on trade receivables. The
application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognizes impairment
loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has
been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is
used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If in subsequent period,
credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition,
then the Company reverts to recognizing impairment loss allowance based on 12 month ECL.
Derecognition of financial assets
A financial asset is derecognized only when:
• the Company has transferred the rights to receive cash flows from the financial asset; or
• retains the contractual rights to receive the cash flows of the financial asset but assumes a contractual obligation to pay the
cash flows to one or more recipients.
Where the Company has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards
of ownership of the financial asset. In such cases, the financial asset is derecognized. Where the Company has not transferred
substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognized.
Where the Company has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the
financial asset, the financial asset is derecognized if the Company has not retained control of the financial asset.
ii) Financial liabilities
Classification, subsequent measurement and gains and losses
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated
upon initial recognition as at fair value through profit or loss. 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. Separate embedded
derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on
liabilities held for trading are recognized in the profit or loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of
recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable
to changes in own credit risk are recognized in OCI. These gains/ losses are not subsequently transferred to statement of profit and
loss. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are
recognized in the statement of profit or loss. The Company has not designated any financial liability as at fair value through profit
and loss.
Amortized cost
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the Effective
Interest Rate ("EIR") method. Gains and losses are recognized in profit or loss when the liabilities are derecognized.
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.
Financial guarantee contracts
Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the
holder for a loss it incurs because the specified party fails to make a payment when due in accordance with the terms of a debt
instrument. Financial guarantee contracts are recognized initially as a liability at fair value, adjusted for transaction costs that are
directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss
allowance determined as per impairment requirements of Ind AS 109 and the amount recognized less cumulative amortization.
Derecognition of financial liabilities
The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled or expire. The Company
also derecognizes a financial liability when its terms are modified and the cash flows under the modified terms are substantially
different. In this case, a new financial liability based on the modified terms is recognized at fair value. The difference between the
carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognized in the
statement of profit and loss..
Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the
Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to
realize the asset and settle the liability simultaneously.
2.16 Derivative financial instruments and hedge accounting
The Company holds derivative financial instruments to hedge its foreign currency risk exposure.
Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes
therein are generally recognized in the statement of profit and loss.
The Company designates their derivatives as hedge instruments to hedge the variability in cash flows associated with highly
probable forecast transactions arising from changes in foreign exchange rates.
At inception of designated hedging relationships, the Company documents the risk management objective and strategy for
undertaking the hedge. The Company also documents the economic relationship between the hedged item and the hedging
instrument, including whether the changes in cash flows of the hedged item and hedging instrument are expected to offset each
other.
Cash flow hedges
When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivatives
is recognized in OCI and accumulated in the other equity under 'effective portion of cash flow hedges'. The effective portion of
changes in the fair value of the derivative that is recognized in OCI is limited to the cumulative change in fair value of the hedged
item, determined on a present value basis, from inception of the hedge. Any ineffective portion of changes in the fair value of the
derivative is recognized immediately in the statement of profit and loss.
When the hedged forecast transaction subsequently results in the recognition of a non-financial item such as inventory, the amount
accumulated in other equity is included directly in the initial cost of the non-financial item when it is recognized. For all other hedged
forecast transactions, the amount accumulated in other equity is reclassified to the statement of profit and loss in the same period
or periods during which the hedged expected future cash flows affect the statement of profit and loss.
If a hedge no longer meets the criteria for hedge accounting or the hedging instruments is sold, expires, is terminated or is exercised,
then hedge accounting is discontinued prospectively. When hedge accounting for cash flow hedges is discontinued, the amount
that has been accumulated in other equity remains there until, for a hedge of a transaction resulting in recognition of a non-financial
item, it is included in the non-financial item's cost on its initial recognition or, for other cash flow hedges, it is reclassified to the
statement of profit and loss in the same period or periods as the hedged expected future cash flows affect the statement of profit and
loss.
If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in other equity are
immediately reclassified to the statement of profit and loss.
Changes in fair value of foreign currency derivative instruments not designated as cash flow hedges are recognized in the statement
of profit and loss and reported within foreign exchange gains, net within results from operating activities
2.17 Earnings per equity share
The basic earnings per share is computed by dividing the net profit attributable to owners of the Company for the year by the
weighted average number of equity shares outstanding during the reporting period.
The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving
basic earnings per share and also the weighted average number of equity shares which could have been issued on the conversion
of all dilutive potential equity shares.
Dilutive potential equity shares are deemed converted as of the beginning of the reporting date, unless they have been issued at a
later date. In computing diluted earnings per share, only potential equity shares that is dilutive and which either reduces earnings
per share or increase loss per share are included.
2.18 Cash and cash equivalents
Cash and cash equivalents include cash in hand, demand deposits with banks and other short-term highly liquid investments with
original maturities of three months or less.
For the purpose of statement of cash flows, cash and cash equivalents includes cash in hand, in banks, demand deposits with banks
and other short-term highly liquid investments with original maturities of three months or less, net of outstanding bank overdrafts
that are repayable on demand and are considered part of the cash management system.
2.19 Statement of cash flows
Cash flows are reported using the indirect method, whereby net profit for the period is adjusted for the effects of transactions of a
non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses
associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company
are segregated.
2.20 Dividends
The Company recognizes a liability to make dividend distributions to equity holders of the Company when the distribution is
authorized, and the distribution is no longer at the discretion of the Company. Final dividends on shares are recorded as a liability on
the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company's
Board of Directors.
2.21 Segment reporting
An operating segment is a component of the Company that engages in business activities from which it may earn revenues and
incur expenses (including revenues and expenses relating to transactions with other components of the Company), whose operating
results are regularly reviewed by the Company's chief operating decision maker to make decisions about resources to be allocated
to the segment and assess its performance, and for which discrete financial information is available. Operating segments of the
Company are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
2.22 New Standards, Interpretations and Amendments adopted by the Company
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. The Ministry of corporate Affairs ("MCA") notified amendments on 7 May
2025 and 13 August 2025 under the Companies (Indian Accounting Standards) Amendment Rules, 2025 and the Companies
(Indian Accounting Standards) Second Amendment Rules, 2025, respectively, which is effective from annual reporting periods
beginning on or after 1 April 2025.
a) Amendment to Ind AS 7 and Ind AS 107 - Supplier Finance Arrangement:
The amendments to Ind AS 7 'Statement of Cash Flows' and Ind AS 107 'Financial Instruments: Disclosures' clarify the
characteristics of supplier finance arrangements and require additional disclosures for such arrangements. The disclosure
requirements in the amendments are intended to assist users of financial statements in understanding the effects of supplier
finance arrangements on an entity's liabilities, cash flows and exposure to liquidity risk.
Adequate disclosure for supplier finance arrangements have been made in these standalone financial statements (refer
Note 18).
b) Amendments to Ind AS 1 - Classification of liabilities as current or non-current and non-current liabilities with
covenants:
The amendments aim to clarify the below:
i) An entity's right to defer settlement of a liability for at least twelve months after the reporting period must have
substance and must exist at the end of the reporting period. The classification of a liability as current or non-current is
unaffected by the likelihood that the entity will exercise its right to defer settlement.
ii) If an entity's right to defer settlement of a liability is subject to covenants, such covenants affect whether that right
exists at the end of the reporting period only if the entity is required to comply with the covenant on or before the end
of the reporting period;
iii) In case of a liability that can be settled, at the option of the counterparty, by the transfer of the entity's own equity
instruments, such settlement terms do not affect the classification of the liability as current or non-current only if the
option is classified as an equity instrument.
These amendments have no effect on the measurement of any items in the standalone financial statements of the Company.
The Company did not make retrospective adjustments as a result of adopting the amendments to Ind AS 1.
c) Amendment to Ind AS 12 - Pillar-Two Tax Reforms
The Company is not within the scope of the OECD Pillar Two Model Rules, as Pillar Two legislation has not yet been enacted in
any of the jurisdiction in which the Company operates.
d) Amendment to Ind AS 21-Lack of exchangeability
The Amendments introduces requirement to assess when a currency is exchangeable into another currency and when it is
not. The amendment requires an entity to estimate the spot exchange rate when it concludes that a currency is not
exchangeable into another currency. These amendments had no effect on the standalone financial statements of the
Company.
The below amendments are notified but not yet effective
e) Amendment to Ind AS 1 'Presentation of Financial Statements'- Classification of Liabilities as current or non-current and non¬
current liabilities with covenants:
The amendment includes specific provisions that will take effect for reporting periods beginning on or after 1 April 2026,
retrospectively, as outlined below:
i) Breach of material covenant for long-term loan arrangement on or before end of reporting period with effect that
liability becomes payable on demand as on reporting date, then it shall be classified as current liability, if lender agreed
after reporting period and before approval of financial statements to not demand payment as a consequence of breach.
ii) Classify as non-current liability, if lender agreed by end of reporting period to provide grace period ending at least 12
months after reporting period within which entity can rectify the breach provided lender does not demand immediate
repayment.
iii) Disclose information about the timing of settlement to understand the impact of the liability on the financial statements.
The Company does not expect this amendment to have an impact on its operations or financial statements.
Notes:
13.1 Any profit or loss on purchase, sale, issue or cancellation of the Company's own equity instruments is transferred to capital
reserves. The reserve is not available for distribution.
13.2 Amounts received on issue of shares in excess of the par value have been classified as securities premium. The reserve can be
utilized in accordance with the provisions of the Companies Act, 2013.
13.3 This represents appropriation of profit by the Company. General reserve is used from time to time to transfer profits from retained
earnings for appropriation purposes.
13.4 Retained earnings comprise of the Company's undistributed earnings after taxes. The amount can be distributed by the Company
as dividends to its equity shareholders.
13.5 The cash flow hedging reserve represents effective portion of gains or losses (net of taxes, if any) arising on changes in fair value
of designated portion of hedging instruments entered into for cash flow hedges. Such gains or losses will be reclassified to
statement of profit and loss when the hedged items (sales of goods) affects profit or loss .
Note 15.1 : On 21 November 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,
collectively referred to as the 'New Labour Codes', consolidating 29 existing labour laws. The Ministry of Labour and Employment has
published draft Central Rules and FAQs to facilitate the assessment of the financial impact arising from the regulatory changes.
Accordingly, the Company, considering best available information, has made a preliminary assessment and accounted for the incremental
impact under Employee benefits expenses in the Statement of Profit and Loss during the year. The Government is in the process of notifying
related Central / State rules to the New Labour Codes and the consequent impact of these will be evaluated and accounted for, as needed,
in accordance with applicable accounting standards in the period in which they are notified.
Note 15.2 : Employee benefit
The Company operates the following post-employment defined benefit plan.
Defined benefit plan
The Company operates post-employment defined benefit plan that provide gratuity, governed by the Payment of Gratuity Act,1972.
Employees who are in continuous service for a period of 5 years (1 year in case of fixed term employees which includes contract employees)
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 number of years of service or part thereof in excess of six months. The
gratuity plan is a funded plan. There is no maximum limit for the payment of gratuity benefit. The present value of obligation is determined
based on an actuarial valuation as at the reporting date using the Projected Unit Credit Method.
These defined benefit plans expose the Company to actuarial risks, such as longevity risk, currency risk, interest rate risk and market
(investment) risk.
A) Funding
The Company's gratuity scheme for employees is administered through insurance fund. The funding requirements are based on the
gratuity fund's actuarial measurement framework set out in the funding policies of the plan. The funding is based on a separate actuarial
valuation for funding purposes for which the assumptions may differ from the assumptions set out in (E). Employees do not contribute to
the plan.
Notes:
i) The discount rate is based on the prevailing market yield on indian government bonds as at the balance sheet date for the estimated
term of obligations.
ii) The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets
held, assessed risks of asset management, historical results of the return on plan assets and the Company's policy for plan asset
management.
iii) The estimate of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other
relevant factors such as supply and demand in the employment market.
Note-17.1: The weighted average effective interest rate (net of subsidy) on the bank loans is 9.29% per annum (9.58% as at 31 March
2025).
Note-17.2: Working capital limits secured by pari passu charge by way of hypothecation of stock and book debts of the Company and in
case of working capital loan from one bank, there is an additional security by way of first charge over fixed assets of the Company.
Note-17.3: The Company have filed the quarterly returns or statement with the banks/financial institutions according to the sanctioned
working capital facilities, which are in agreement with books of accounts.
Information about the Company's exposure to interest rate, currency and liquidity risk are disclosed in note 33.
Note 28.1 : The above amounts have been arrived at based on the notice of demand or the assessment orders, as the case may be, and the
Company is contesting these claims with the respective authorities. Outflows including interest and other consequential payments, if any,
arising out of these claims would depend on the outcome of the decisions of the appellate authorities and the Company's rights for future
appeals before the judiciary. The Company doesn't expect any reimbursements in respect of the above contingent liabilities.
Note 28.2 :
a) Contingent liabilities under Income Tax Act 1961 of ^ 1,453.75 lacs (31 March 2025 : ^ 418.45 lacs) includes:
i) Disputed demands of ? 30.50 Lacs (31 March 2025 : ? 30.50 Lacs) pertain to AY 2006-07 and AY 2009-10, being disallowance of
corporate expenses, disallowance under Section 14A and disallowance of interest under section 36(1)(iii).
ii) Disputed demands of ? 287.17 Lacs (31 March 2025 : ? 287.17 Lacs) pertain to AY 2018-19, AY 2019-20 and AY 2020-21 relates to
withholding of taxes for payment made outside India for consultancy and marketing services.
iii) Other disputed demands of ? 100.78 Lacs (31 March 2025 : 100.78 Lacs) pertain to AY 2008-09 and AY 2016-17 related to Transfer
pricing adjustments on account of interest on loan, commission on guarantees provided to subsidiaries etc.
iv) Other disputed demands of ? 1,035.30 Lacs pertains to AY 2021-22 related to Transfer pricing adjustments on account of marketing
support HEL, sale of power, sale of steam.
b) Contingent liabilities under Custom, service tax and excise duties of ^ 1,335.49 Lacs (31 March 2025 : ^ 1,335.49 Lacs
includes:
i) Disputed demand of ? 668.90 Lacs (31 March 2025 : ? 668.90 Lacs) relating to transfer price adjustments on certain transactions
with related parties.
ii) Disputed demand of ? 641.46 Lacs (31 March 2025 : ? 641.46 Lacs) on account of classification of imported Textile Sizing Chemical.
iii) Disputed demand of ? 25.13 Lacs (31 March 2025 : 25.13) relating to Goods and Service Tax (GST) input.
Note 29: Leases
The Company has lease contracts for various items of plant and machinery used in its operations. Leases of plant and machinery generally
have lease terms between 5 and 10 years. The Company's obligations under its leases are secured by the lessor's title to the right-of use
assets. The Company also has certain leases with lease terms of 12 months or less and leases with low value. The Company applies the
'short-term lease' and 'lease of low-value assets' recognition exemptions for these leases.
Note 30 : Segment reporting
The Executive Vice Chairman & Managing Director of the Company has been identified as the Chief Operating Decision Maker (CODM)
as defined by Ind AS 108, Operating Segments. The Company is structured into a single segment of Textiles value chain, and accordingly
the CODM evaluates the Company's performance and allocates resources based on an analysis of various performance indicators by the
textiles and segment information has been presented accordingly.
Notes to the Standalone Financial Statements for the year ended 31 March 2026
The geographical information analyses the Company's revenue from external customer and non-current assets of its single reportable
segment by the Company's country of domicile (i.e. India) and other countries. In presenting the geographical information, segment
revenue has been based on the geographical location of the customer and segment assets which have been based on the geographical
location of the assets.
Revenue generated from major customers
Revenue from three customers (31 March 2025 : two customers) individually contributing 10% or more of Company's revenue was 42.49%
from customer one (subsidiary), 14.65% from customer two and 10.48% from customer three. (31 March 2025 : 51.48% from customer
one (subsidiary) and 15.35% from customer two) of the total revenue respectively.
The Company assessed that fair values of cash and cash equivalents, Bank balances other than cash and cash equivalents, trade receivables,
other financial assets, lease liabilities, trade payables and other financial liabilities approximate their respective carrying amounts. The
following methods and assumptions were used to estimate the fair values for other assets and liabilities:
i) The fair values of the Company fixed rate interest-bearing debt securities, borrowings and subordinated liabilities are determined by
applying discounted cash flows ('DCF') method, using discount rate that reflects the issuer's borrowing rate as at the end of the reporting
period for a variable rate interest-bearing debt securities, borrowings and subordinated liabilities, carrying value represents best estimate
of their fair value as these are subject to changes in underlying interest rate indices as and when the changes happen.
Accounting classification and fair value
The following table shows the carrying amount and fair value of financial assets and financial liabilities including their levels in fair value
hierarchy:
Fair value hierarchy
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the-counter
derivatives) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on
entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case
for unquoted equity securities.
Fair valuation method
The fair value of the financial assets and liabilities is 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:
Financial assets:
The Company has not disclosed the fair values for loans, trade receivables, cash and cash equivalents including other bank balances and
other financial assets because management believes that their carrying amounts are a reasonable approximation of their fair value.
Investments: Costs of unquoted equity instruments has been considered as an appropriate estimate of fair value because of a wide range
of possible fair value measurements and cost represents the best estimate of fair value within that range.
Derivative assets / liabilities: Fair value is arrived from future cash flows based on forward exchange rates from observable forward
exchange rates at the end of the reporting period and contract forward rates, discounted at a rate that reflects the credit risk of various
counterparties.
Financial liabilities:
Borrowings: It includes loans taken from banks and financial institution, cash credit and bill discounting facilities. Borrowings are classified
and subsequently measured in the financial statements at amortized cost. Considering that the interest rate on loans is reset on a monthly/
quarterly basis, the carrying amount of the loan would be a reasonable approximation of its fair value.
Trade payables and other financial liabilities: Fair values of trade payables and other financial liabilities are measured at carrying value,
as most of them are settled within a short period and so their fair values are assumed almost equal to the carrying values.
Note 33.2 : Financial risk management:
The Company's activities expose to financial risks: credit risk, liquidity risk and market risk.
Risk management framework
The Company's Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management
framework. The Company's risk management policies are established to identify and analyse the risks faced by the Company, to set
appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed
regularly to reflect changes in market conditions and the Company's activities. The Company, through its training and management
standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their
roles and obligations. Risk Management Committee examines the priority of risks and mitigation actions.
The Company's Audit Committee oversees how management monitors compliance with the Company's risk management policies and
procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit
Committee is assisted in its oversight role by internal auditor. Internal Audit function includes both regular and ad hoc reviews of risk
management controls and procedures, the results of which are reported to the Audit Committee.
i) Credit risk:
Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or
obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as
concentration of risks. Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom
the credit has been granted after obtaining necessary approvals for credit.
Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, investments, derivative
financial instruments, cash and cash equivalents, bank deposits and other financial assets. Bank deposits includes an amount of ? 4,011.84
Lacs (31 March 2025 : ? 9,390.20 Lacs) held with banks having high quality credit rating which is individually in excess of 10% or more of
the Company's total bank deposits for the year ended 31 March 2026. None of the other financial instruments of the Company result in
material concentration of credit risk.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk is ? 2,37,164.02
Lacs and ? 2,17,395.96 Lacs as at 31 March 2026, and 31 March 2025, respectively, being the total of the carrying amount of balances with
banks, bank deposits, current investments, trade receivables and other financial assets excluding cash in hand and equity investments.
ii) Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its
liquidity risk by ensuring, 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 risk to the Company's reputation. The Company believes that the
working capital and its cash and cash equivalents are sufficient to meet its short and medium term requirements.
Management monitors rolling forecast of the Company's liquidity position and cash and bank balances on the basis of expected cash
flows. This is generally carried out by the Management of the Company in accordance with practice and limits set by the Company. In
addition, the Company's liquidity management policy involves projecting cash flows and considering the level of liquid assets necessary
to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt
financing plans.
The Company has also entered into supply chain finance arrangement to smoothen the payment process of the suppliers. Although the
payment terms are not significantly extended beyond the normal credit terms agreed upon with other suppliers, the cashflows became
more predictable.
A) Financing arrangement
The Company maintains the following line of credit:
a) Terms loans taken from banks aggregating to ? 50,006.92 Lacs (31 March 2025: ? 40,896.17 Lacs) repayable in various quarterly
and yearly installments with interest rate ranging from 8.92 % to 14.04 % (31 March 2025: 9.94% to 12.52%) per annum. Term
loans, non convertible debentures and foreign currency convertible bonds from financial institutions aggregating to ? 1,21,276.35
lacs (31 March 2025: ? 1,08,224.13 Lacs) with interest rate ranging from 4.50% - 14.77% (31 March 2025: 4.50% - 13.56%) per
annum.
b) Working capital loans from banks carry an effective interest rate of 9.29% (31 March 2025: 9.58%) per annum, computed on a
monthly basis on the actual amount utilized, and are repayable as per terms of the facility. Refer note 17.2 for details of security.
c) The Company has taken receivable bill discounting facility from banks which are payable within 180 days from date of bill
discounted.
As disclosed in note 14.1, the Company has secured loan from banks and financial institutions that contains loan covenants. A future
breach of covenant may require the Company to repay the loan earlier than indicated in the above table. Except for these financial liabilities,
it is not expected that cash flows included in maturity analysis could occur significantly earlier. The above does not include corporate
guarantee provided to step down subsidiary, refer note 34.3 for details.
iii) Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Company's income or
the value of its holdings of financial instruments. Market risk is attributable to all market risk sensitive financial instruments including
foreign currency receivables and payables and long term debt. The objective of market risk management is to manage and control market
risk exposures within acceptable parameters, while optimising the return.
a) Foreign currency risk:
The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchases and
borrowings are denominated and the respective functional currency of the Company. The functional currency of the Company is ?. The
currencies in which these transactions are primarily denominated are USD, GBP, EURO etc.
Management monitors the movement in foreign currency and the Company's exposure in each of the foreign currency. Based on the
analysis and study of movement in foreign currency, the Company decides to hedge its foreign currency. A majority portion of the
Company's revenues are in foreign currencies, while a significant portion of its costs are in Indian rupees. As a result, if the value of the
Indian rupee appreciates relative to foreign currencies, the Company's revenues measured in Indian rupees may decrease. The exchange
rate between the Indian rupee and foreign currencies has changed substantially in recent periods and may continue to fluctuate
substantially in the future. Consequently, the Company uses derivative and non-derivative financial instruments, such as foreign exchange
forward contracts to mitigate the risk of changes in foreign currency exchange rates in respect of its highly probable forecasted transactions
and recognised assets and liabilities.
Interest rate risk
Interest rate risk primarily arises from floating rate borrowings, including various revolving and other lines of credit. The Company's
investments are primarily in short-term investments, which do not expose it to significant interest rate risk. The Company's borrowings
comprises of term loans, working capital loans and bill discounting which carries variable rate of interest, which expose it to interest rate
risk.
Note 33.3 : Capital management
The Company's policy is to maintain a stable and strong capital base structure with a focus on total equity so as to uphold investor, creditor
and market confidence and to sustain future development and growth of the business. The Company monitors the return on capital as well
as the level of dividends on its equity shares. The Company's objective when managing capital is to maintain an optimal structure so as to
maximize shareholder value and safeguard its ability to continue as a going concern.
Note 38 : Transfer pricing
The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing
legislation under Sections 92-92F of the Income-tax Act. Since the law requires existence of such information and documentation to be
contemporaneous in nature, the Company is in the process of updating the documentation for the international transactions entered into
with the associated enterprise during the financial year and expects such records to be in existence latest by the end of the stipulated
timeline, as required by law. The Management is of the opinion that its international transactions are at arm's length so that the aforesaid
legislation will not have any impact on the standalone financial statements, particularly on the amount of tax expenses and that of provision
for taxation.
Note 39 : Other statutory Information
i) No proceedings have been initiated or pending against the Company for holding any Benami property under the Benami
Transactions (Prohibitions) Act, 1988 and the rules made thereunder.
ii) The Company do not have any transactions with companies struck off under section 248 of Companies Act 2013.
iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
iv) The Company have not traded or invested in Crypto currency or Virtual Currency during the current or previous year.
v) The Company have 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 have 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 on behalf of the Ultimate Beneficiaries,
vii) The Company did not have any such transaction which is not recorded in the books of accounts that has been surrendered or
disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other
relevant provisions of the Income Tax Act, 1961
viii) The Company has not been declared willful defaulter by any bank or financial institution or government or any government
authority.
ix)
a) In regard to accounting software (SAP)
The Company has used an accounting software for maintaining its books of account which has a feature of recording audit
trail (edit log) facility and the same has been operated throughout the year for all relevant transactions recorded in the
software. Further, we did not come across any instance of audit trail feature being tampered with at application level.
Additionally, the audit trail has been preserved by the Company as per the statutory requirements for record retention for
application level.
However, with respect to the database level of the said software which has been managed and maintained by a third-party
service provider, in the absence of sufficient and appropriate audit evidence adequate coverage in SOC report we are unable
to assess whether the database of the software to log any direct changes has a feature of recording audit trail (edit log) facility
and whether the same has been enabled and operated throughout the year for all relevant transaction recorded or whether
there is any instance of audit trail feature being tampered with. Also, we are unable to assess whether the audit trail feature of
prior years have been preserved by the Company as per the statutory requirements for record retention at database level.
b) In regard to accounting software (Saral and Zing HR)
The Company has used certain accounting softwares for maintaining its books of account (managed and maintained by a
third-party software service provider) which have a feature of recording audit trail (edit log) facility and the same has been
operated throughout the year for all the relevant transactions recorded in the softwares. Further, the audit trail of prior years
has been preserved by the Company as per the statutory requirements for record retention.
Note 40 : Events after the reporting period
i) On 27 May 2026, the Board of Directors of the Company approved the issuance of non-convertible debentures (NCD) upto INR 600
Crores with green shoe option of upto INR 250 Crores on private placement basis at coupon/interest of 11.50 % p.a. payable
quarterly.
ii) On 27 May 2026, the Board of Directors recommended a final dividend of ? 0.25 per equity share to be paid to the shareholders for
financial year 2025-26, which needs to be approved by shareholders at the Annual General Meeting, and if approved, would result
in a cash outflow of approximately ? 314.36 Lacs.
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