2.21 Provisions, Contingent Liabilities and Contingent Assets
Provisions
Provision is recognized when the Company has a present
obligation (legal or constructive) as a result of a past event,
it is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of
obligation. Provision is not recognized for future operating
losses.
Provisions are made at the management's best estimate
of the expenditure required to settle the present obligation
at the end of the reporting period. If the effect of the time
value of money is material, the amount of provision is
discounted using an appropriate pre-tax rate that reflects
current market assessments of the time value of money
and, when appropriate, the risks specific to the liability.
When discounting is used, the increase in the provision
due to the passage of time is recognized as a finance cost.
Contingent Liability
A Contingent liability is disclosed in case of a present
obligation arising from past events, when it is either not
probable that an outflow of resources will be required to
settle the obligation, or a reliable estimate of the amount
cannot be made. A Contingent Liability is also disclosed
when there is a possible obligation arising from past
events, unless the probability of outflow of resources are
remote.
Contingent Asset
Contingent Assets are not recognized but where an inflow
of economic benefits is probable, contingent assets
are disclosed in the financial statements. Provisions,
contingent liabilities and contingent assets are reviewed
at each Balance Sheet date.
2.22 Revenue Recognition
i. Revenue from contracts with customers
The Company derives revenues primarily from sale of
products and services. Revenue from sale of goods
is recognized net of returns and discounts.
Revenue towards satisfaction of a performance
obligation is measured at the amount of transaction
price (net of variable consideration) allocated to that
performance obligation. The transaction price of
goods sold and services rendered is net of variable
consideration on account of various discounts and
schemes offered by the Company as part of the
contract.
To recognize revenues, the Company applies the
following five step approach:
1. Identify the contract with a customer;
2. Identify the performance obligations in the
contract;
3. Determine the transaction price;
4. Allocate the transaction price to the performance
obligations in the contract; and
5. Recognize revenues when a performance
obligation is satisfied.
Revenue is measured based on the consideration
specified in a contract with a customer and excludes
amounts collected on behalf of third parties.
ii. Trade Receivables
A receivable represents the Company’s right to an
amount of consideration that is unconditional (i.e.,
only the passage of time is required before payment
of the consideration is due).
2.23 Recognition of Dividend Income and Interest Income
i. Interest income
Interest income from a financial asset is recognized
when it is probable that the economic benefits will
flow to the Company and the amount of income can
be measured reliably.
Interest income is accrued on a time basis, by
reference to the principal outstanding and at the
effective interest rate applicable. The effective interest
rate is the rate that exactly discounts estimated
future cash receipts through the expected life of the
financial asset to the gross carrying amount of that
financial asset.
ii. Dividends
Dividend income from investments is recognized
when the Company’s right to receive dividend is
established, it is probable that the economic benefits
associated with the dividend will flow to the Company
and the amount of the dividend can be measured
reliably which is generally when shareholders
approve the dividend.
2.24 Foreign Currency Transactions
On initial recognition, transactions in foreign currencies
are recognized at the rates of exchange prevailing at the
dates of the transactions. At the end of each reporting
period, monetary items denominated in foreign currencies
are translated at the rates prevailing at that date. Non¬
monetary items that are measured at historical cost
denominated in a foreign currency are translated using
the exchange rate as at the date of initial transaction.
Exchange differences on monetary items are recognized
in the Statement of Profit or Loss account in the period in
which they arise.
2.25 Employee Benefits:
Short-term employee benefits:
Employee benefits such as salaries, wages, short term
Compensated Absences, expected cost of bonus and ex-
gratia falling due wholly within twelve months of rendering
the service are classified as short-term employee benefits
and are recognized as an expense at the undiscounted
amount in the Statement of Profit or Loss of the year in
which the related service is rendered.
Long-term employee benefits:
• Defined Contribution Plan:
Provident and Family Pension Fund
The eligible employees of the Company are entitled
to receive post-employment benefits in respect
of provident and family pension fund, in which
both employees and the Company make monthly
contributions at a specified percentage of the
employees’ eligible salary. The contributions are
made to the Provident Fund Account under the
Employees’ Provident Fund and Misc. Provisions
Act, 1952. Provident Fund and Family Pension Fund
are classified as Defined Contribution Plans as the
Company has no further obligations beyond making
the contribution. The Company’s contributions
to Defined Contribution Plan are charged to the
Statement of Profit or Loss as incurred.
Superannuation fund:
The superannuation fund benefits are administrated
by a Trust formed for this purpose through the Group
scheme of Life Insurance Corporation of India. The
Company’s contribution to superannuation fund are
charged to the Statement of Profit or Loss as paid.
• Defined Benefit Plan:
Gratuity
In accordance with applicable Indian laws, the
Company provides for gratuity, a defined benefit
retirement plan ("Gratuity Plan") covering all
employees. The Gratuity Plan provides a lump sum
payment to vested employees, at retirement or death
while in employment or termination of employment,
an amount based on the respective employee’s last
drawn salary and the years of employment with the
Company. Vesting occurs upon completion of five
years of service. Liability with regard to Gratuity
Plan is accrued based on actuarial valuation at the
Balance Sheet date, carried out by an independent
actuary. The Company makes contribution to the
Group Gratuity Scheme with SBI Life Insurance
Company Limited based on an independent actuarial
valuation made at the year-end.
Re-measurement gains and losses arising from
experience adjustments and changes in actuarial
assumptions are recognized 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.
2.26 Compensated Absences
The liabilities for leave are not expected to be settled
wholly within twelve months after the end of the period
in which the employees render the related service. They
are therefore 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 Company provides
for the encashment of absence or absence with pay based
on policy of the Company in this regard. The employees
are entitled to accumulate such absences subject to
certain limits, for the future encashment or absence.
The Company records an obligation for Compensated
Absences in the period in which the employee renders the
services that increases this entitlement. The Company
measures the expected cost of Compensated Absences
as the additional amount that the Company expects to pay
as a result of the unused entitlement that has accumulated
at the Balance Sheet date on the basis of an independent
actuarial valuation.
2.27 Taxes on Income
Current Tax
Tax on income for the current period is determined on
the basis on estimated taxable income and tax credits
computed in accordance with the provisions of the
relevant tax laws and based on the expected outcome of
assessments /appeals.
Current income tax relating to items recognized directly in
equity is recognized in equity and not in the Statement of
Profit or Loss.
Management periodically evaluates positions taken
in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation and
establishes provisions where appropriate.
Deferred Tax
Deferred tax is provided using the Balance Sheet approach
on temporary differences at the reporting date between
the tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes at the reporting
date.
Deferred tax assets are recognized for all deductible
temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets
are recognized to the extent that it is probable that taxable
profit will be available against which the deductible
temporary differences, and the carry forward of unused
tax credits and unused tax losses can be utilized.
The carrying amount of deferred tax assets is reviewed
at each reporting date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be
available to allow all or part of the deferred tax asset to
be utilized.
Unrecognized deferred tax assets are reassessed at each
reporting date and are recognized to the extent that it has
become probable that future taxable profits will allow the
deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply in the year when the asset
is realized or the liability is settled, based on tax rates (and
tax laws) that have been enacted or substantively enacted
at the reporting date.
Deferred tax relating to items recognized outside the
Statement of Profit or Loss is recognized outside the
Statement of Profit or Loss. Deferred tax items are
recognized in correlation to the underlying transaction
either in Other Comprehensive Income or directly in equity.
The break-up of the major components of the deferred
tax assets and liabilities as at Balance Sheet date has
been arrived at after setting off deferred tax assets and
liabilities where the Company have a legally enforceable
right to set-off assets against liabilities and where such
assets and liabilities relate to taxes on income levied by
the same governing taxation laws.
2.28 Leases
As a lessee
The Company, as a lessee, recognizes a right-of-use
asset and a lease liability for its leasing arrangements,
if the contract conveys the right to control the use of an
identified asset.
The contract conveys the right to control the use of an
identified asset, if it involves the use of an identified asset
and the Company has substantially all of the economic
benefits from use of the asset and has right to direct the use
of the identified asset. The cost of the right-of-use asset
shall comprise of the amount of the initial measurement
of the lease liability adjusted for any lease payments made
at or before the commencement date plus any initial direct
costs incurred. The right-of-use assets is subsequently
measured at cost less any accumulated depreciation,
accumulated impairment losses, if any and adjusted for
any re-measurement of the lease liability. The right-of-use
assets is depreciated using the straight-line method from
the commencement date over the shorter of lease term or
useful life of right-of-use asset.
The Company measures the lease liability at the present
value of the lease payments that are not paid at the
commencement date of the lease. The lease payments
are discounted using the interest rate implicit in the lease,
if that rate can be readily determined. If that rate cannot
be readily determined, the Company uses incremental
borrowing rate.
Short-term leases and leases of low-value assets
The Company has elected not to recognize right-of-use
assets and lease liabilities for short-term leases that have
a lease term ending within 12 months and The Company
recognizes the lease payments associated with these
leases as an expense on a straight-line basis over the
lease term.
As a lessor
A lease is classified as an operating lease if it does not
transfer substantially all the risks and rewards incidental
to ownership of an underlying asset. Lease income
from operating leases where the Company is a lessor
are recognized on either a straight-line basis or another
systematic basis. The Company shall apply another
systematic basis if that basis is more representative of
the pattern in which benefit from the use of the underlying
asset is diminished. The Company present underlying
assets subject to operating leases in its balance sheet
according to the nature of the underlying asset.
2.29 Earnings Per Share
The basic earnings per share are computed by dividing
the net profit attributable to the equity shareholders for
the year by the weighted average number of equity shares
outstanding during the reporting period. Diluted earnings
per share is computed by dividing the net profit attributable
to the equity shareholders, adjusted for after income tax
effect of interest and other financing costs associated
with dilutive potential equity shares for the year by the
weighted average number of equity and dilutive equity
equivalent shares outstanding during the year, except
where the results would be anti-dilutive.
2.30 Share issue expenses
The Company incurs various costs in issuing or acquiring
its own equity instruments. The transaction costs of an
equity transaction are accounted for as a deduction from
equity to the extent they are incremental costs directly
attributable to the equity transaction that otherwise would
have been avoided. The costs of an equity transaction
that is abandoned are recognized as an expense in the
statement of profit and loss.
2.31 Research and Development
Revenue expenditure on research and development is
charged to Statement of Profit or Loss in the year in
which it is incurred. Capital expenditure on research and
development is considered as an addition to Property,
Plant and Equipment / Intangible Assets.
2.32 Government Grants and Subsidies:
Government grants are not recognized until there is
reasonable assurance that the Company will comply with
the conditions attached to them and that the grants will
be received.
Government grants are recognized in the Statement of
Profit and Loss on a systematic basis over the years in
which the Company recognizes as expenses the related
costs for which the grants are intended to compensate or
when performance obligations are met.
Government grants that are receivable as compensation
for expenses or losses already incurred or for the purpose
of giving immediate financial support to the Company
with no future related costs are recognized in Statement
of Profit and Loss in the period in which they become
receivable.
Government Grant relating to asset is reduced from the
carrying value of the relevant assets. Such grant is then
gets recognized in the Statement of Profit and Loss over
the useful life of the depreciable asset by way of a reduced
depreciation charge.
Government grants in the nature of export incentives
are accounted for in the period of export of goods if the
entitlements can be estimated with reasonable accuracy
and conditions precedent to claim are reasonably expected
to be fulfilled.
2.33 Use of Judgments, Estimates and assumptions
The preparation of the financial statements requires
the management to make judgments, estimates and
assumptions in the application of accounting policies
and that have the most significant effect on reported
amounts of assets, liabilities, incomes and expenses,
and accompanying disclosures, and the disclosure of
contingent liabilities. The estimates and associated
assumptions are based on historical experience and
other factors that are considered to be relevant. Actual
results may differ from these estimates. The estimates
and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognized
in the period in which the estimate is revised if the revision
affects only that period or in the period of the revision
and future periods if the revision affects both current and
future periods.
The assumptions concerning the future and other major
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:
Income taxes
Significant judgments are involved in determining the
provision for income taxes, including amount expected
to be paid/recovered for uncertain tax positions as also
to determine the amount of deferred tax that can be
recognized, based upon the likely timing and the level of
future taxable profits. Also, Refer Note 36.
Property, Plant and Equipment/Intangible Assets
Property, Plant and Equipment/ Other Intangible Assets
are depreciated / amortized over their estimated useful
lives, after taking into account estimated residual value.
The useful lives and residual values are based on the
Company’s historical experience with similar assets and
taking into account anticipated technological changes
or commercial obsolescence. Management reviews the
estimated useful lives and residual values of the assets
annually in order to determine the amount of depreciation
/ amortization to be recorded during any reporting period.
The depreciation / amortization for future periods is
revised, if there are significant changes from previous
estimates and accordingly, the unamortized / depreciable
amount is charged over the remaining useful life of the
assets.
Employee Benefit Plans
The cost of the defined benefit gratuity plan and other-
post employment benefits and the present value of
gratuity obligations and Compensated Absences are
determined based on 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, attrition and mortality rates. Due to the
complexities involved in the valuation and its long-term
nature, these liabilities are highly sensitive to changes in
these assumptions. All assumptions are reviewed at each
reporting date.
Impairment of Financial Assets
The impairment provisions for financial assets are based
on assumptions about risk of default and expected cash
loss rates. The Company uses judgment in making these
assumptions and selecting the inputs to the impairment
calculation, based on the Company’s past history, existing
market conditions as well as forward looking estimates at
the end of each reporting period.
The Company reviews its carrying value of investments
carried at amortized cost annually, or more frequently
when there is indication for impairment. If the recoverable
amount is less than its carrying amount, the impairment
loss is accounted for.
Recoverability of Trade Receivables
Judgments are required in assessing the recoverability
of overdue trade receivables and 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 the risk
of non-payment.
Fair Value measurements of Financial Instruments
When the fair values of financial assets and financial
liabilities recorded in the balance sheet cannot be
measured based on quoted prices in active markets (Net
Assets Value in case of units of Mutual Funds), their fair
value is measured using valuation techniques including
the Discounted Cash Flow (DCF) model. The inputs to
these models are taken from observable markets where
possible, but where this is not feasible, a degree of judgment
is required in establishing fair values. Judgments include
considerations of inputs such as liquidity risk, credit
risk and volatility. Changes in assumptions about these
factors could affect the reported fair value of financial
instruments.
Impairment of Assets
The Company has used certain judgments and estimates
to work out future projections and discount rates to
compute value in use of cash generating unit and to
access impairment. In case of certain assets independent
external valuation has been carried out to compute
recoverable values of these assets.
Provisions
Provisions and liabilities are recognized in the period when
it becomes probable that there will be a future outflow of
funds resulting from past operations or events and the
amount of cash outflow can be reliably estimated. The
timing of recognition and quantification of the liability
requires the application of judgment to existing facts
and circumstances, which can be subject to change. The
carrying amounts of provisions and liabilities are reviewed
regularly and revised to take account of changing facts
and circumstances.
Financial Guarantee Contract
The Company on case-to-case basis elects to account
for financial guarantee contracts as financial instruments
or as an insurance contract, as specified in Ind AS 109
on Financial Instruments and Ind AS 104 on Insurance
Contracts. The Company has regarded its financial
guarantee contracts as insurance contracts on contract-
by-contract basis. At the end of each reporting period
the Company performs liability adequacy test, (i.e., it
assesses the likelihood of a pay-out based on current
undiscounted estimates of future cash flows) on financial
guarantee contracts regarded as insurance contracts, and
the deficiency is recognized in the Statement of Profit and
Loss.
18.2 Rights, preferences and restrictions :
i. The Company has only one class of shares referred to as Equity Shares having par value of ' 1/- each. Each holder of Equity
Shares is entitled to one vote per share.
ii. Preferential Issue
Pursuant to the approval by the Board of Directors at its meeting held on November 14, 2022 and approval by the members of
the Company at their Extra-Ordinary General Meeting held on December 09, 2022 ('EGM'), the Company has allotted 2,21,61,749
warrants, each convertible into one equity share, on preferential basis at an issue price of ' 95.00 each, upon receipt of 30% of
the issue price (i.e. ' 28.50 per warrant) as warrant subscription money. Balance 70% of the issue price (i.e. ' 66.50 per warrant)
is payable within 18 months from the allotment date, at the time of exercising the option to apply for fully paid-up equity share
of ' 1/- each (Face Value) of the Company, against each warrant held by the warrant holder. During the financial year, the
Company had converted the remaining 1,60,00,009 warrants have been fully converted into equity shares, in accordance with
the terms of the issue. Consequently, the Company has allotted 2,21,61,749 fully paid-up equity shares of face value ' 1/- each
against conversion of an equivalent number of warrants.
iii. 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.
18.3 Dividend
The Board of Directors in their meeting held on May 19, 2025, have proposed a final dividend of ' 0.30 per equity share (Previous
year ' 0.30 per Equity Share) for the financial year ended March 31, 2025. The proposal is subject to the approval of the
shareholders in the ensuing Annual General Meeting.
Securities Premium : Securities Premium is used to record the premium received on issue of shares. The Transaction cost
incurred towards issue of preferential allotment of warrant convertible into Equity shares (Share Issue Expenses) has been
reduced from the proceeds of Securities Premium received during the previous year. In case of equity-settled share based
payment transactions, the difference between fair value on grant date and nominal value of share is accounted as securities
premium. It is utilized in accordance with the provisions of the Companies Act, 2013.
General Reserve : The General Reserve comprises of transfer of profits from retained earnings for appropriation purposes. The
reserve can be distributed/utilized by the Company in accordance with the Companies Act, 2013.
Share Options Outstanding Account : The Share options outstanding account is used to record the fair value of equity-
settled share based payment transactions with employees. The amounts recorded in share options outstanding account are
transferred to securities premium upon exercise of stock options and transferred to general reserve on account of stock options
not exercised by employees.
Retained Earnings : Retained Earnings are the profits that the Company has earned till date and is net of amount transferred to
other reserves such as general reserves etc., amount distributed as dividends and adjustments on account of transition to Ind
AS.
Equity instrument through other comprehensive income : The fair value change of the equity instruments measured at fair
value through other comprehensive income is recognized in Equity instruments through Other Comprehensive Income.
Money Received Against Share Warrants : Application money received from warrant holders comprises of the convertible
warrants into equity shares, allotted to warrant holders upon receipt of 30% of the consideration amount pursuant to Securities
and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018.
Share Application money pending allotment : The share application money pending allotment pertains to the funds received
from employees of the Company for the issuance of Equity Shares under ESOP Scheme. These funds will be transferred to the
share capital and securities premium accounts upon the completion of the allotment process.
On February 03, 2022, pursuant to approval by the shareholders in the AGM, the Board has been authorized to introduce, offer, issue
and provide share-based incentives to eligible employees of the Company "Foods & Inns Limited - Employee Stock Option Plan
2021 ' ("ESOP 2021"/ "Plan") for grants of 14,66,760 Options equivalent to same number of equity shares of the Company. The vested
ESOPs shall be excisable not earlier than a minimum period of 1 (one) year and not later than a maximum period of 4 (four) years
from the date of the grant. As of the date of this report, employees have exercised a total of 9,14,615 options. The balance of the
unexercised options to be converted into equity are potentially dilutive in nature and have been considered in the diluted earnings per
share computation above.
Pursuant to the approval by the Board of Directors at its meeting held on November 14, 2022 and approval by the members of the
Company at their Extra-Ordinary General Meeting held on December 09, 2022 ('EGM'), the Company has allotted 2,21,61,749 warrants,
each convertible into one equity share, on preferential basis at an issue price of ' 95/- each, upon receipt of 30% of the issue price
(i.e. ' 28.50 per warrant) as warrant subscription money. Balance 70% of the issue price (i.e. ' 66.50 per warrant) is payable within 18
months from the allotment date, at the time of exercising the option to apply for fully paid-up equity share of ' 1/- each (Face Value) of
the Company, against each warrant held by the warrant holder. During the financial year, the remaining 1,60,00,009 warrants were fully
converted into equity shares, in accordance with the terms of the issue. Consequently, the Company has allotted a total of 2,21,61,749
fully paid-up equity shares of face value ' 1/- each upon conversion of an equivalent number of warrants.
b) Rental expense recorded for short-term leases was ' 632.65 Lakhs for the year ended March 31,2025 (' 470.03 Lakhs for the
year ended March 31,2024).
c) The maturity analysis of lease liabilities are disclosed in Note 41D. The Company does not face a significant liquidity risk with
regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when
they fall due.
d) The period of these leasing arrangements, range between three to five years and some of them are renewable by mutual
consent.
e) Future lease payments which will start from April 01,2025 is ' Nil (' 330.00 Lakhs from April 01,2024)
As Lessor
Operating Lease
Rental income recognized on assets given on operating lease is for the year ended March 31, 2025 was ' 72.12 Lakhs and
(' 72.12 Lakhs for the year ended March 31,2024).
39*| EMPLOYEE BENEFITS
The Company has classified various employee benefits as under:
A. Defined Contribution Plans
The Company contributes to following funds which are considered as defined contribution plans
Provident Fund
Superannuation Fund
State Defined Contribution Plans
Employers’ Contribution to Employees’ State Insurance
Employers’ Contribution to Employees’ Pension Scheme 1995
The Provident Fund and the State Defined Contribution Plans are operated by the Regional Provident Fund Commissioner and
the Superannuation Fund is administered by the LIC of India as applicable for all eligible employees. Under the schemes, the
Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.
These funds are recognized by the Income Tax Authorities.
vi. The expected rate of return on plan assets is determined after considering several applicable factors such as the
composition of the plan assets, investment strategy, market scenario, etc. In order to protect the capital and optimize
returns within acceptable risk parameters, the plan assets are well diversified.
vii. 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.
viii. The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and
other relevant factors.
Note on other risks:
Investment risk - The funds are invested by SBI Life Insurance Company Limited and they provide returns basis the
prevalent bond yields, SBI Life Insurance Company Limited on an annual basis requests for contributions to the fund, while
the contribution requested may not be on the same interest rate as the bond yields provided, basis the past experience it is
low risk.
Interest Risk - SBI Life Insurance Company Limited does not provide market value of assets, rather maintains a running
statement with interest rates declared annually - The fall in interest rate is not therefore offset by increase in value of
Bonds, hence may pose a risk.
Longevity Risk - Since the gratuity payment happens at the retirement age of 60, longevity impact is very low at this age,
hence this is a non-risk.
Salary risk - The liability is calculated taking into account the salary increases, basis past experience of the Company’s
actual salary increases with the assumptions used, they are in line, hence this risk is low risk.
41*| CAPITAL MANAGEMENT AND FINANCIAL RISK MANAGEMENT POLICY
A. Capital Management
For the purpose of the Company’s Capital Management, Capital includes issued Equity Capital and all Other Reserves attributable
to the Equity shareholders of the Company. The Primary objective of the Company’s Capital Management is to maximize the
shareholders’ value. The Company’s Capital Management objectives are to maintain equity including all reserves to protect
economic viability and to finance any growth opportunities that may be available in future so as to maximize shareholder’s
value.
The Company’s capital requirement is mainly to fund its business expansion and repayment of borrowings. The principal source
of funding of the Company has been, and is expected to continue to be, cash generated from its operations supplemented by
funding from bank borrowings and the capital markets.
The Company has adhered to material externally imposed conditions relating to capital requirements and there has not been any
delay or default during the period covered under these financial statements with respect to payment of principal and interest. No
lender has raised any matter that may lead to breach of covenants stipulated in the underlying documents.
The Company is monitoring Capital using debt equity ratio as its base, which is debt to equity. The Company monitors capital
using debt-equity ratio, which is total debt divided by total equity.
B. Financial Risk Management and Policies
Risk is events, situation or circumstances which may lead to negative consequences on the Company’s business. Risk
management is a structure approach to manage uncertainty. The Company’s financial risk management is an integral part
of how to plan and execute its business strategies. The risk management policy is approved by the Company’s Board. The
Company’s principal financial liabilities comprise of loans and borrowings, trade and other payables. The main purpose of
these financial liabilities is to finance the Company’s operations and to provide guarantees to support its operations in select
instances. The Company’s principal financial assets include trade and other receivables, and cash and cash equivalents that
derive directly from its operations and investments. The Company is exposed to market risk, credit risk, liquidity risk etc. The
objective of the Company’s financing policy are to secure solvency, limit financial risks and optimize the cost of capital. The
Company’s capital structure is managed using equity and debt ratios as part of the Company’s financial planning.
a. 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
market prices.
Market risk comprises three types of risk : interest rate risk, currency risk and other price risk, such as equity price risk.
Financial instruments affected by market risk include loans and borrowings, deposits, investments and derivative financial
instruments. The Company has designed risk management frame work to control various risks effectively to achieve the
business objectives. This includes identification of risk, its assessment, control and monitoring at timely intervals.
The above mentioned risks may affect the Company’s income and expenses, or the value of its financial instruments. The
Company’s exposure to and management of these risks are explained below:
The Company is subject to the risk that changes in foreign currency values impact the Company’s export, import and
other payables.
The Company is exposed to foreign exchange risk arising from various currency exposures, primarily with respect
to US Dollar (US$), Euro (EUR), Great Britain Pound (GBP), United Arab Emirates Dirham (AED) and Canadian Dollar
(CAD).
The Company manages currency exposures within prescribed limits, through use of derivative instruments such as
Options, futures and Forward contracts etc. Foreign currency transactions are covered with strict limits placed on the
amount of uncovered exposure, if any, at any point in time.
The carrying amount of the Company’s foreign currency denominated monetary assets and liabilities as at the end of
the reporting period is as follows :
The sensitivity disclosed in the above table is attributable to variable interest rate borrowings and the interest swaps.
The above sensitivity analysis is based on a reasonably possible change in the under-lying interest rate of the
Company’s borrowings in ', US$ (being the significant currencies in which it has borrowed funds), while assuming all
other variables (in particular foreign currency rates) to be constant.
The sensitivity disclosed in the above table is attributable to variable interest rate borrowings . The above sensitivity
analysis is based on a reasonably possible change in the under-lying interest rate of the Company’s borrowings in ' &
US$ (being the significant currencies last year in which it has borrowed funds), while assuming all other variables (in
particular foreign currency rates) to be constant.
iv. Price risk
The Company is exposed to price risk due to its Investment in equity instruments and mutual funds. The fair value of
a financial instrument will fluctuate due to changes in market traded price. As at March 31,2025, the carrying value
of such equity instruments recognized at FVTOCI amounts to ' 22.20 Lakhs (As at March 31, 2024'26.01 Lakhs)
and carrying value of such mutual funds recongnised at FVTPL amounts to ' 34.21 Lakhs (As at March 31, 2024
' 821.14 Lakhs).
Price risk sensitivity:
10% increase or decrease in prices will have the following impact on profit/(loss) before tax and on other components
of equity.
C. Credit Risk
Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company by
failing to discharge its contractual obligations as agreed. The Company’s exposure to credit risk arises primarily from financial
assets such as trade receivables, derivative financial instruments, other balances with banks, loans and other receivables. The
outstanding trade receivables are regularly monitored and appropriate action is taken for collection of overdue receivables.
Credit risk arising from derivative financial instruments and other balances with banks is limited and there is no collateral held
against these because the counterparties are banks and recognized financial institutions with high credit ratings assigned by
the international credit rating agencies. The companies exposure are continuously monitored.
In addition, the Company is exposes to credit risk in relation to financial guarantees given to banks for the facilities availed by
subsidiary. The Company’s maximum exposures in this respect is the maximum amount the Company would have to pay if the
guarantee is called upon.
The Company uses a provision matrix to determine impairment loss on portfolio of its Trade Receivables. The provision matrix
is based on its historically observed default rates over the expected life of the Trade Receivable and is adjusted for forward¬
looking estimates. At every reporting date, the historically observed default rates are updated and changes in forward-looking
estimates are analysed. The Company follows a simplified approach (i.e. based on life time ECL) for recognition of impairment
loss allowances on trade receivables. For the purpose of measuring the life time ECL allowance for trade receivables, the
Company uses a provision matrix which comprises a customer spread across the geographical areas and the same are grouped
into homogenous group and assessed for impairment collectively. The outstanding trade receivables are regularly monitored
and appropriate action is taken for collection of overdue receivables.
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities 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 The Company maintains a cautious liquidity strategy, with a positive cash balance throughout the year.
Management monitors the Company’s liquidity position through rolling forecasts on the basis of expected cash flows. Cash
flow from operating activities provides the funds to service and finance the financial liabilities. The Company’s approach for
managing liquidity is to ensure that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage to Company’s reputation. In addition, processes
and policies related to such risks are overseen by the senior management. The management monitors the Company’s net
liquidity position through rolling forecasts on the basis of expected cash flows.
Financing arrangement
The Company has sufficient sanctioned line of credit from its bankers / financiers; commensurate to its business requirements.
The Company reviews its line of credit available with bankers and lenders from time to time to ensure that at all point of time
there is sufficient availability of line of credit.
The Company pays special attention to the net operating working capital invested in the business. In this regard, as in previous
years, considerable work has been performed to control and reduce collection periods for trade and other receivables, as well as
to optimize accounts payable with the support of banking arrangements to mobilize funds.
42. FINANCIAL INSTRUMENTS
The fair values of the financial assets and liabilities are defined as the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date.
Valuation
i. The fair values of investment in government securities and quoted investment in equity shares is based on the current bid
price of respective investment as at the Balance Sheet date.
ii. The fair value of Foreign Currency Forward contracts is determined using forward exchange rates at the balance sheet
date.
iii. The carrying amount of financial assets and financial liabilities measured at amortized 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.
iv. The fair values for long term loans, long term security deposits given and remaining non current financial assets were
calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair
value hierarchy due to the inclusion of unobservable inputs.
v. The fair values of long term security deposits taken and non-current borrowings are based on discounted cash flows using
a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable
inputs.
Fair Value measurement hierarchy
The fair value of financial instruments as referred below have been classified into three categories depending on the inputs used
in the valuation technique.
The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurements)
and lowest priority to unobservable inputs (Level 3 measurements).
The categories used are as follows:
Level 1: Unadjusted quoted prices for identical instruments in an active market;
Level 2: Directly or indirectly observable market inputs, other than Level 1 inputs; and
Level 3: Inputs which are not based on observable market data.
51*| ADDITIONAL REGULATORY INFORMATION DETAILED IN CLAUSE 6L OF GENERAL INSTRUCTIONS GIVEN IN PART I OF
DIVISION II OF THE SCHEDULE III TO THE COMPANIES ACT, 2013 ARE FURNISHED TO THE EXTENT APPLICABLE TO THE
COMPANY.
(i) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets during
the year ended March 31,2025 and March 31,2024.
(ii) The Company does not hold any Investment Property. Accordingly, reporting on fair valuation of Investment Property is not
applicable.
(iii) The Company does not hold any Intangibles assets under development. Accordingly, reporting on Intangibles assets under
development ageing and completion schedule is not applicable.
(iv) The Company does not have any benami property, where any proceeding has been initiated or pending against the
Company for holding any benami property.
(v) The Company has borrowings from banks on the basis of security of current assets and quarterly returns or statements of
stock filed by the Company are in agreement with the books of accounts.
(vi) The Company is not declared as willful defaulter by any bank or financials institution or lender during the year.
(vii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(viii) The Company does 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.
(ix) The Company has complied with the number of layers for its holding in downstream companies prescribed under clause
(87) of section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017.
(x) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of
the Company (Ultimate Beneficiaries) or
b. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(xi) 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
(xii) The Company has not undertaken any transactions with companies struck off under section 248 of the Companies Act,
2013 or section 560 of the Companies Act, 1956.
52. As per the Ministry of Corporate Affairs (MCA) notification, proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014, for
the financial year commencing April 01, 2023, every company which uses accounting software for maintaining its books of
account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction,
creating an edit log of each change made in the books of account along with the date when such changes were made and
ensuring that the audit trail cannot be disabled. The interpretation and guidance on what level edit log and audit trail needs to
be maintained evolved during the year and continues to evolve.
In Company’s SAP software, the audit trail is enabled at an application level for all the tables and fields for maintenance of
books of accounts and relevant transactions. However, Company has not been enabled with the feature of audit trail log at the
database layer to log direct transactional changes, due to present design of ERP
The audit trail has been preserved by the Company as per the statutory requirements for record retention.
As per our report of even date attached
For G. M. KAPADIA & CO. For and on behalf of the Board of Directors
Chartered Accountants
Firm Registration No.104767W
SATYA RANJAN DHALL BHUPENDRA DALAL MILAN DALAL MOLOY SAHA
Partner Chairman Managing Director Chief Executive Officer
Membership No. 214046 (DIN : 00061492) (DIN : 00062453)
ANAND KRISHNAN AMEYA MASURKAR
Chief Financial Officer Company Secretary
Date : May 19, 2025 Date : May 19, 2025
Place : Mumbai Place : Mumbai
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