Pursuant to the Sheme of Arrangement which is effective 9th September 2025 (Refer Note No 59) the trading business was transferred to the resulting entity. Consequent to this restructuring, the Company has commenced letting out the said property with effect from 1st October 2025, to earn rental income.
The Company was utilizing its land and building for its trading operations until Demerger of its trading business.
In accordance with the requirements of Ind AS 40 - Investment Property, the land and building have been reclassified from Property, Plant and Equipment to Investment Property and accordingly disclosed in the Balance Sheet for the year ended 31st March 2026.
The figure for the previous year ended 31st March 2025 is also reclassified for comparison purpose The reclassification is on the basis of carrying amount as on 31st March 2025
Estimation of fair value
The best evidence of fair values is current prices in an active market for similar properties. Since investment properties are leased out by the Company, the market rate for sale/purchase of such premises are representative of fair values. Company's investment properties are at a location where active market is available for similar kind of properties. Hence fair value is ascertained on the basis of market rates prevailing for similar properties in those location as determined by an Independent registered valuer as defined under Rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 and consequently classified as a level 2 valuation.
Note
During the previous year, the company has not revalued any intangible assets.
Pursuant to the Scheme of Arrangement, with appointed date being 01st April, 2024, Intangible Assets relating to the trading business of the company has been transferred to the resulting company viz. Shankara Buildpro Limited, Bengaluru.
1) The amount shown as deemed equity investments as per Ind AS 109, is in respect of financial guarantee given to subsidiaries.
2) Subsidiary company namely Steel Network (Holdings) Pte Limited, incorporated in Singapore, which did not have any operations, applied before the Accounting and Corporate Regulatory Authority ( ACRA) Singapore for strike off from the Register. The name of the subsidiary was struck off from the Register on 26th December 2025. Hence the Investment in subsidiary is written off as on 31st March 2026.
3) The Hon'ble National Company Law Tribunal , Bengaluru Bench (“NCLT") vide its order dated 21st August 2025 approved the Scheme of Demerger between Shankara Building Products Limited (Demerged Company) and Shankara Buildpro Limited ( Resulting Company). Consequent to the order, as per clause 20.1 of the scheme, the shareholding of demerged company in the resulting company shall stand cancelled (Refer Note no. 59)
b) Rights, preferences and restrictions
(i) Rights, preferences and restrictions attached to shares and terms of conversion of other securities into equity.
The company has one class of equity shares having par value of Rs.10 each. Each share holder is eligible for one vote per share held and carry a right to dividend. In the event of liquidation, the equity share holders are eligible to receive 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.
(ii) There are no restrictions attached to equity shares .
General Reserve
General Reserve is an accumulation of retained earnings of the Company, apart from the balance in the statement of profit and loss which can be utilised for meeting future obligations.
Capital Reserve
Reserve is primarily created on amalgamation as per statutory requirement.
Securities Premium
This consists of premium realised on issue of shares and will be applied/ utilised in accordance with the provisions of the Companies Act, 2013.
Retained earnings
Surplus in Statement of Profit and Loss is part of retained earnings.This is available for distribution to shareholders as dividend and capitalisation.
26. INCOME TAXES
Indian companies are subject to Indian income tax on a standalone basis. Each entity is assessed to tax on taxable profits determined for each fiscal year beginning on April 1 and ending on March 31.
Incomes are assessed based on book profits prepared under generally accepted accounting principles in India adjusted in accordance with the provisions of the Income tax Act, 1961. Such adjustments generally relate to depreciation of fixed assets, disallowances of certain provisions and accruals, the set-off of tax losses and depreciation carried forward and retirement benefit costs.
The Company has opted to exercise the option permitted under section 115BAA of the Income-tax Act, 1961. The Company has incurred losses and has not made a tax provision. The Company re-measured its deferred tax at the rate prescribed by the section.Income tax is charged at 22% plus surcharge of 10% plus health and education cess of 4%.
37A Note on Exceptional Items
The Government of India has consolidated 29 existing labour legislations into a unified framework comprising four New Labour codes, viz Code on Wages 2019, Code on Social Security 2020, Industrial Relations Code , 2020 and Occupational Safety, Health and Working Conditions Code 2020. These codes are effective November 21,2025. The corresponding supporting Rules under these codes are to be notified by the Government . Based on the Management's assessment, the company has considered an incremental gratuity liability of Rs 0.17 Crore arising from the implementation of New Labour Codes and accordingly the financial impact of the same has been considered as an exceptional item .
b) As lessee:
Various Buildings have been taken on operating lease with lease term between 11 and 144 months for office premises, storage space and retail shop, which are renewable on a periodic basis by mutual consent of both parties. There is no restriction imposed by lease arrangements, such as those concerning dividends, additional debts.
Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The reporting entity makes an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised.
For the short-term and low value leases, the reporting entity recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
b) Defined benefit plan
(i) Gratuity
The Company has funded the gratuity liability ascertained on actuarial basis, wherein every employee who has completed five years or more of service is entitled to gratuity on retirement or resignation or death calculated at 15 days salary for each completed year of service, subject to a maximum of '20 lacs per employee. The vesting period for Gratuity as payable under The Payment of Gratuity Act,1972 is 5 years.
The plans in India typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.
Investment risk: The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to government bond yields; if the return on plan asset is below this rate, it will create a plan deficit.
Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan’s debt investments.
Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.
Salary risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.
There are no other post-retirement benefits provided to employees.
The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out at 31-03-2026. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.
The Company expects to contribute ^0.22 crores (previous year ^0.65 crores) to its gratuity plan for the next year.
In assessing the Company’s post retirement liabilities, the Company monitors mortality assumptions and uses up-to date mortality tables, the base being the Indian assured lives mortality (2012-14) ultimate.
Expected return on plan assets is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations after considering several applicable factors such as the composition of plan assets, investment strategy, market scenario, etc.
The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
The discount rate is based on the prevailing market yields of Government of India securities as at the balance sheet date for the estimated term of the obligations.
Effective March 29, 2018, the Government of India has notified the Payment of Gratuity (Amendment) Act,
2018 to raise the statutory ceiling on gratuity benefit payable to each employee to ^20 lakhs from ^10 lakhs Accordingly the amended and improved benefits, if any, are recognised as current year's expense as required under paragraph 103, Ind AS 19.
Sensitivity Analysis:
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
The average expected remaining lifetime of the plan members is 4 years (31-03-2025 - 6 years) as at the valuation date which represents the weighted average of the expected remaining lifetime of all plan participants.
The Company had deployed its investment assets in an insurance plan which is invested in market linked bonds. The investment returns of the market-linked plan are sensitive to the changes in interest rates as compared with the investment returns from the smooth return investment plan. The liabilities' duration is not matched with the assets' duration.
The liabilities of the fund are funded by assets. The company aims to maintain a close to full-funding position at each Balance Sheet date. Future expected contributions are disclosed based on this principle.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
1. Due to transitional arrangements, the Company executed certain sales and purchase transactions on behalf of Shankara Buildpro Limited, Bengaluru (Resulting Company) during the period commencing from 1st October 2025 to 31st March 2026. These transactions have been recorded at cost, and no profit or loss has been recognised . An amount of Rs 128.55 crores has been accounted for sales, with a corresponding amount recognised as purchase in the standalone financial statement.
2. As the future liability for gratuity is provided on an actuarial basis for the company as a whole, the amount pertaining to individual is not ascertainable and therefore not included above
3. Advances granted to subsidiaries are in the nature of Capital Advances
4. The transactions /balance outstanding for the years ended 31st March 2026 and 31st March 2025 are related to the remaining business of Shankara Building products Limited, Bengaluru
Terms and Conditions
All outstanding balances are unsecured and are repayable in cash Guarantees furnished to subsidiaries:
Guarantees furnished to the lenders of the subsidiaries are for availing working capital facilities from the lender banks.
Guarantees furnished by subsidiaries:
Guarantees furnished to the lenders of the company are for availing working capital facilities from the lender banks.
Guarantees furnished by managing director:
Personal guarantee furnished by the managing director to the company are for availing working capital facilities from the lender banks.
48. Financial Instruments A. Capital Management (1) Capital risk management
The Company's capital requirements are mainly to fund its expansion, working capital and strategic acquisitions. The principal source of funding of the Company has been, and is expected to continue to be, cash generated from its operations supplemented by borrowings from bank and funds from capital markets. The Company is not subject to any externally imposed capital requirements.
The Company regularly considers other financing and refinancing opportunities to diversify its debt profile, reduce finance cost and closely monitors its judicious allocation amongst competing expansion projects and strategic acquisitions, to capture market opportunities at minimum risk.
The Company monitors its capital using gearing ratio, which is net debt divided to total equity. Net debt includes, interest bearing loans and borrowings less cash and cash equivalents.
C. Financial risk management
The Company has an Audit & Risk Management Committee established by its Board of Directors for overseeing the Risk Management Framework and developing and monitoring the Company's risk management policies. The risk management policies are established to ensure timely identification and evaluation of risks, setting acceptable risk thresholds, identifying and mapping controls against these risks, monitor the risks and their limits, improve risk awareness and transparency. Risk management policies and systems are reviewed regularly to reflect changes in the market conditions and the Company's activities to provide reliable information to the Management and the Board to evaluate the adequacy of the risk management framework in relation to the risk faced by the Company.
The risk management policies aims to mitigate the following risks arising from the financial instruments:
- Market risk
- Credit risk; and
- Liquidity risk"
(1) Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in the market prices (i) Currency Risk
Sensitivity
Currency risks related to the amounts of foreign currency loans are fully hedged using derivatives that mature on the same dates as the loans are due for repayment.
(ii) Commodity price risk:
The Company's revenue is exposed to the market risk of price fluctuations related to the sale of its steel and other building products. Market forces generally determine prices for the steel products sold by the Company. These prices may be influenced by factors such as supply and demand, production costs (including the costs of raw material inputs) and global and regional economic conditions and growth. Adverse changes in any of these factors may reduce the revenue that the Company earns from the sale of its steel products.
The Company purchases the steel and other building products in the open market from third parties as well as from subsidiaries at prevailing market price. The Company is therefore subject to fluctuations in the prices of steel coil, steel pipes,sanitary wares etc.
The Company aims to sell the products at prevailing market prices. Similarly the Company procures the products based on prevailing market rates as the selling prices of steel products and the prices of inputs move in the same direction.
Inventory Sensitivity Analysis (Stock in trade)
A reasonably possible changes of 1% in prices of inventory at the reporting date, would have increased (decreased) equity and profit or loss by the amounts shown below. The analysis assumes that all other variables remain constant.
(iii) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk since funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the Company are principally denominated in rupees. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings.
(2) Credit risk management:
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of credit worthiness as well as concentration risks.
Company's credit risk arises principally from the trade receivables, advances and financial guarantees furnished to the lenders of the subsidiaries.
(i) Trade receivables:
Customer credit risk is managed centrally by the company and subject to established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on financial position, past performance, business/ economic conditions, market reputation, expected business etc. Based on that credit limit & credit terms are decided. Outstanding customer receivables are regularly monitored
Trade receivables consist of a large number of customers spread across diverse industries and geographical areas with no significant concentration of credit risk. The outstanding trade receivables are regularly monitored and appropriate action is taken for collection of overdue receivables.
(3) Liquidity risk management
Liquidity risk refers to the risk of financial distress or extraordinary high financing costs arising due to shortage of liquid funds in a situation where business conditions unexpectedly deteriorate and requiring financing. The Company requires funds both for short term operational needs as well as for strategic acquisitions. The Company generates sufficient cash flow for operations, which together with the available cash and cash equivalents and borrowings provide liquidity. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
The following tables detail the Company's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods and its non-derivative financial assets. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows.
With respect to floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the Company may be required to pay.
The amount of guarantees furnished on behalf of subsidiaries included in note no.47(c) represents the maximum amount the Company could be forced to settle for the full guaranteed amount. Based on the expectation at the end of the reporting period, the Company considers that it is more likely than not that such an amount will not be payable under the arrangement.
Collateral
The Company has hypothecated part of its financial assets in order to fulfill certain collateral requirements for the banking facilities extended to the Company. There is an obligation to return the securities to the Company once these banking facilities are surrendered. (refer note no 44)
The carrying amounts of trade receivables, trade payables, cash and cash equivalents, other bank balances and other financial assets and liabilities other than those disclosed in the above table, are considered to be the same as their fair values, due to their short term nature.
E. Inventory turnover ratio= Cost of goods sold / average inventory
This ratio is not applicable as there is no inventory.
F. Trade receivables turnover ratio = Sales / Average trade receivables
This ratio is not applicable as there is no Revenue from Operations. (Refer Note No. 33)
G. Trade payables turnover ratio = Purchases / Average trade payables
This ratio is not applicable as there are no purchases. (Refer Note No. 33)
H. Net capital turnover ratio = Revenue from operations / Working capital
This ratio is not applicable as there is no Revenue from Operations. (Refer Note No. 33)
I. Net profit ratio = Net profit after tax / Revenue from operations
This ratio is not applicable as there is no Revenue from Operations. (Refer Note No. 33)
(i) EBIT = Profit before taxes finance cost
(ii) Capital employed = Total equity Long term borrowings Short term borrowings -Cash and cash equivalents
(iii) Average Capital employed = (Capital Employed at beginning of respective year Capital Employed at end of respective year) divided by 2
Reason for change more than 25%: Decrease in EBIT
K.Return on investment = Income generated from investments / average investments
This is not applicable as the invetsments are made only in the subsidiaries. Benchmarking the return on annual basis will not reflect yield from such investments.
*Average applied only for the current year and with respect to the previous year ratios have been computed based on the year end figure without averaging.
52. No proceedings have been initiated or pending against the Company for holding Benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the Rules made there under
53. 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 what so ever 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 beneficiary
54. 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 on behalf of the Ultimate Beneficiaries
55. The Company has not operated in any crypto currency or Virtual Currency transactions
56. Balances outstanding with nature of transactions with struck off comapanies as per section 248 of the companies act , 2013 :
To the extent information is available with the company the details of struck off companies , as per the master data base in Ministry of Corporate Affairs (MCA) Portal is provided.
57. During the year the Company has not disclosed or surrendered, any income other than the income recoginsed in the books of accounts in the tax assessments under Income Tax Act, 1961.
58. The Company has complied with the number of layers prescribed under clause (87) of Section 2 of the Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017.
59. Compliance with Approved Scheme of Arrangement ["Scheme"]
The Board of Directors of the company at their meeting held on 18th December, 2023 approved a Scheme of Arrangement under section 230-232 and read with applicable provisions of the Companies Act,2013 for demerger of the Demerged undertaking (“Trading Business “) of Shankara Building Products Limited ( “Demerged Company”) in to Shankara Buildpro Limited (“Resulting Company”) and their respective Shareholders and creditors (“Scheme”).
The appointed date of the Scheme is 01.04.2024 The Scheme inter-alia provides for :
(i) Demerger, transfer and vesting of Trading business from the Demerged Company into the Resulting company on a going concern basis
(ii) Reduction and cancellation of equity share capital of the Resulting Company held by the Demerged company
(iii) Issuance and allotment of Equity shares by the Resulting Company to all the shareholders of the Demerged company as per the Share Entitlement Ratio ie for every 1 (one) fully paid equity share of face value of INR 10/- (Indian Rupees Ten only) each, held in the Demerged Company as on the Record date (as defined in the scheme) the equity shareholders of the Demerged Company shall be issued 1 (one) fully paid equity share of face value of INR 10 /- (Indian Rupees Ten only) each in the Resulting Company, in consideration of transfer of the Demerged undertaking
On 21st August, 2025, the Hon'ble National Company Law Tribunal , Bengaluru Bench (‘NCLT') approved the Scheme. The Scheme has become effective on 9th September 2025 upon filing of the certified copies of the NCLT Order sanctioning the Scheme , with the respective Jurisdictional Registrar of Companies.
The figures for the year ended 31st March 2025 have been restated by the Company so as to contain figures of only the remaining business of the company
Pursuant to the scheme, the assets and liabilities relating to the Trading business of the Demerged Company as at 1st April 2024 , stand vested to the Resulting Company , as detailed hereunder :
61. The financial statements has been approved by the Board of directors at their meeting held on 5th May, 2026.
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