m. Provisions and contingent liability
Provisions
Provision are recognized when the Company has a
present obligation (legal or constructive) as a result of
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 the obligation. When the
Company expects some or all of a provision to be
reimbursed, for example, under an insurance contract,
the reimbursement is recognized as a separate asset,
but only when the reimbursement is virtually certain.
The expense relating to a provision is presented in the
statement of profit and loss net of any reimbursement.
If the effect of the time value of money is material,
provisions are discounted using a current pre¬
tax rate that reflects, 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.
Provisions are reviewed at the end of each reporting
period and adjusted to reflect the current best
estimate. If it is no longer probable that an outflow of
resources would be required to settle the obligations,
the provision is reversed.
Contingent liability
Contingent liability is:
(a) a possible obligation arising from past events
and whose existence will be confirmed only by
the occurrence or non-occurrence of one or
more uncertain future events not wholly within
the control of the entity, or
(b) a present obligation that arises from past
events but is not recognized because;
- it is not probable that an outflow of
resources embodying economic benefits
will be required to settle the obligation, or
- the amount of the obligation cannot be
measured with sufficient reliability.
The Company does not recognize a contingent
liability but discloses its existence and other
required disclosures in notes to the financial
statements, unless the possibility of any outflow
in settlement is remote.
n. Retirement and other employee benefits
Retirement benefit in the form of provident fund is a
defined contribution scheme. The Company has no
obligation, other than the contribution payable to the
provident fund. The Company recognizes contribution
payable to the provident fund scheme as an expense,
when an employee renders the related service. If the
contribution payable to the scheme for service received
before the balance sheet date exceeds the contribution
already paid, the deficit payable to the scheme is
recognized as a liability after deducting the contribution
already paid. If the contribution already paid exceeds
the contribution due for services received before the
balance sheet date, then excess is recognized as an
asset to the extent that the pre-payment will lead to, for
example, a reduction in future payment or a cash refund.
The Company operates a defined benefit gratuity
plan and the cost of providing benefits under
the defined benefit plan is determined using the
projected unit credit method.
Remeasurements, comprising of actuarial gains
and losses, the effect of the asset ceiling, excluding
amounts included in net interest on the net defined
benefit liability, are recognised immediately in the
balance sheet with a corresponding debit or credit to
retained earnings through OCI in the period in which
they occur. Remeasurements are not reclassified to
profit or loss in subsequent periods.
Past service costs are recognised in profit or loss on
the earlier of:
- The date of the plan amendment or
curtailment, and
- The date that the Company recognises related
restructuring costs.
Net interest is calculated by applying the discount
rate to the net defined benefit liability. The Company
recognises the following changes in the net defined
benefit obligation as an expense in the Statement of
profit and loss:
- Service costs comprising current service
costs, past-service costs, gains and losses on
curtailments and non-routine settlements; and
- Net interest expense.
Accumulated leave, which is expected to be utilized
within the next 12 months, is treated as short-term
employee benefit. The Company measures the
expected cost of such absences as the additional
amount that it expects to pay as a result of the
unused entitlement that has accumulated at the
reporting date. The Company recognizes expected
cost of short-term employee benefit as an expense,
when an employee renders the related service.
The Company treats accumulated leave expected to
be carried forward beyond twelve months, as long¬
term employee benefit for measurement purposes.
Such long-term compensated absences are provided
for based on the actuarial valuation using the
projected unit credit method at the reporting date.
Actuarial gains/losses are immediately taken to the
statement of profit and loss and are not deferred.
The obligations are presented as current liabilities
in the balance sheet if the entity does not have an
unconditional right to defer the settlement for at
least twelve months after the reporting date.
Termination benefits are payable when employment
is terminated by the company before the normal
retirement date, or when an employee accepts
voluntary redundancy in exchange for these benefits.
These benefits are expensed at the earlier of when the
Company can no longer withdraw the offer of those
benefits and when the Company recognises costs
for a restructuring. In the case of an offer made to
encourage voluntary redundancy, the termination
benefits are measured based on the number of
employees expected to accept the offer. If benefits are
not expected to be settled wholly within 12 months of
the reporting date, then they are discounted.
o. Share-based payments
Employees (including senior executives) of the
Company receive remuneration in the form of
share-based payments, whereby employees render
services as consideration for equity instruments
which are classified as equity-settled transactions.
Equity-settled transactions
The cost of equity-settled transactions is determined
by the fair value at the date when the grant is made
using an appropriate valuation model. That cost is
recognised as an employee benefit expense with a
corresponding increase in ‘Shares Option Outstanding
Account' in other equity, over the period in which the
performance and/or service conditions are fulfilled.
The cumulative expense recognised for equity-settled
transactions at each reporting date until the vesting
date reflects the extent to which the vesting period
has expired and the Company's best estimate of the
number of equity instruments that will ultimately vest.
The expense or credit in the statement of profit and
loss for a year represents the movement in cumulative
expense recognised as at the beginning and end of
that year and is recognised in employee benefits
expense. Further details are provided in note 36.
Service and non-market performance conditions
are not taken into account when determining the
grant date fair value of awards, but the likelihood
of the conditions being met is assessed as part
of the Company's best estimate of the number of
equity instruments that will ultimately vest. Market
performance conditions are reflected within the
grant date fair value. Any other conditions attached
to an award, but without an associated service
requirement, are considered to be non-vesting
conditions. Non-vesting conditions are reflected in
the fair value of an award and lead to an immediate
expensing of an award unless there are also service
and/or performance conditions.
No expense is recognised for awards that do not
ultimately vest because non-market performance
and/or service conditions have not been met. Where
awards include a market or non-vesting condition,
the transactions are treated as vested irrespective
of whether the market or non-vesting condition is
satisfied, provided that all other performance and/or
service conditions are satisfied.
When the terms of an equity-settled award are
modified, the minimum expense recognised is the
expense had the terms not been modified, if the
original terms of the award are met. An additional
expense is recognised for any modification that
increases the total fair value of the share-based
payment transaction, or is otherwise beneficial to the
employee as measured at the date of modification.
Where an award is cancelled by the entity or by the
counterparty, any remaining element of the fair value
of the award is expensed immediately through the
profit or loss.
The dilutive effect of outstanding options is reflected
as additional share dilution in the computation of
diluted earnings per share.
p. Financial Instruments
A financial instrument is any contract that gives
rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.
Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition,
as subsequently measured at amortised cost, fair
value through other comprehensive income (OCI),
and fair value through profit or loss.
The classification of financial assets at initial
recognition depends on the financial asset's
contractual cash flow characteristics and the
Company's business model for managing them. The
Company initially measures a financial asset at its
fair value plus, in the case of a financial asset not at
fair value through profit or loss, transaction costs.
In order for a financial asset to be classified and
measured at amortised cost or fair value through OCI, it
needs to give rise to cash flows that are 'solely payments
of principal and interest (SPPI)' on the principal amount
outstanding. This assessment is referred to as the SPPI
test and is performed at an instrument level. Financial
assets with cash flows that are not SPPI are classified
and measured at fair value through profit or loss,
irrespective of the business model.
The Company's business model for managing
financial assets refers to how it manages its financial
assets in order to generate cash flows. The business
model determines whether cash flows will result
from collecting contractual cash flows, selling the
financial assets, or both. Financial assets classified
and measured at amortised cost are held within a
business model with the objective to hold financial
assets in order to collect contractual cash flows
while financial assets classified and measured at
fair value through OCI are held within a business
model with the objective of both holding to collect
contractual cash flows and selling.
Subsequent measurement
For purposes of subsequent measurement, financial
assets are classified in two categories:
- Financial assets at amortised cost
- Financial assets at fair value through profit or loss
- Financial assets at fair value through
other comprehensive income (FVTOCI)
(debt instruments)
- Financial assets designated at fair value
through OCI (equity instruments)
Financial assets at amortised cost
A 'financial asset' is measured at the amortised cost
if both the following conditions are met:
(i) The asset is held within a business model
whose objective is to hold assets for collecting
contractual cash flows, and
(ii) Contractual terms of the asset give rise on
specified dates to cash flows that are solely
payments of principal and interest (SPPI) on the
principal amount outstanding.
After initial measurement, financial assets are
subsequently measured at amortized cost using the
effective interest rate (EIR) method and are subject
to impairment as per the accounting policy applicable
to ‘Impairment of financial assets'. Amortised cost
is calculated by taking into account any discount or
premium on acquisition and fees or costs that are an
integral part of EIR.
The EIR amortisation is included in "Other income" in
the statement of profit or loss. The losses arising from
impairment are recognised in the statement of profit
or loss. The Company's financial assets at amortised
cost includes loan to employees, security deposits,
amount recoverable from others, bank deposits.
Financial assets at FVTPL
Financial assets in this category are those that are
held for trading and have been either designated
by management upon initial recognition or are
mandatorily required to be measured at fair value
under Ind AS 109 i.e. they do not meet the criteria
for classification as measured at amortised cost or
FVOCI. Management only designates an instrument
at FVTPL upon initial recognition, if the designation
eliminates, or significantly reduces, the inconsistent
treatment that would otherwise arise from measuring
the assets or liabilities or recognising gains or losses
on them on a different basis. Such designation is
determined on an instrument-by-instrument basis.
For the Company, this category includes mutual
fund investments.
Financial assets at fair value through profit or loss
are carried in the balance sheet at fair value with net
changes in fair value recognised in the statement of
profit and loss.
Financial assets at fair value through other
comprehensive income (FVTOCI) (debt instruments)
A ‘financial asset' is classified as at the FVTOCI if
both of the following criteria are met:
a) The objective of the business model is achieved
both by collecting contractual cash flows and
selling the financial assets, and
b) The asset's contractual cash flows
represent SPPI.
Debt instruments included within the FVTOCI
category are measured initially as well as at each
reporting date at fair value. For debt instruments,
at fair value through OCI, interest income, foreign
exchange revaluation and impairment losses or
reversals are recognised in the profit or loss and
computed in the same manner as for financial assets
measured at amortised cost. The remaining fair value
changes are recognised in OCI. Upon derecognition,
the cumulative fair value changes recognised in OCI
is reclassified from the equity to profit or loss.
Financial assets designated at fair value through
OCI (equity instruments)
Upon initial recognition, the Company can elect to
classify irrevocably its equity investments as equity
instruments designated at fair value through OCI
when they meet the definition of equity under Ind
AS 32 Financial Instruments: Presentation for the
issuer and are not held for trading. The classification
is determined on an instrument-by-instrument basis.
Equity investment which are held for trading and
contingent consideration recognised by an acquirer
in a business combination to which Ind AS 103
applies are classified as at FVTPL.
Gains and losses on these financial assets are never
recycled to profit or loss. Dividends are recognised as
other income in the statement of profit and loss when
the right of payment has been established, except
when the Company benefits from such proceeds as
a recovery of part of the cost of the financial asset,
in which case, such gains are recorded in OCI. Equity
instruments designated at fair value through OCI are
not subject to impairment assessment.
Derecognition
A financial asset, or part of a financial assets,
is primarily derecognised (i.e. removed from the
Company's balance sheet) when :
(i) The rights to receive cash flows from the assets
have expired , or
(ii) The Company has transferred its rights to receive
cash flows from the asset or has assumed an
obligation to pay the received cash flows in full
without material delay to a third party under
a ‘pass-through' arrangement; and either (a)
the Company has transferred substantially all
the risks and rewards of the asset, or (b) the
Company has neither transferred nor retained
substantially all the risks and rewards of the
asset, but has transferred control of the asset.
When the Company has transferred its rights to
receive cash flows from an asset or has entered into
a pass-through arrangement, it evaluates if and to
what extent it has retained the risks and rewards
of ownership. When it has neither transferred nor
retained substantially all of the risks and rewards of
the asset, nor transferred control of the asset, the
Company continues to recognise the transferred
asset to the extent of the Company's continuing
involvement. In that case, the Company also
recognises an associated liability. The transferred
asset and the associated liability are measured on a
basis that reflects the rights and obligations that the
Company has retained.
Impairment of financial assets
The Company recognises an allowance for expected
credit losses (ECLs) for all debt instruments not held
at fair value through profit or loss. ECLs are based on
the difference between the contractual cash flows due
in accordance with the contract and all the cash flows
that the Company expects to receive, discounted at
an approximation of the original effective interest rate.
The expected cash flows will include cash flows from
the sale of collateral held or other credit enhancements
that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures
for which there has not been a significant increase in
credit risk since initial recognition, ECLs are provided
for credit losses that result from default events that
are possible within the next 12-months (a 12-month
ECL). For those credit exposures for which there has
been a significant increase in credit risk since initial
recognition, a loss allowance is required for credit
losses expected over the remaining life of the exposure,
irrespective of the timing of the default (a lifetime ECL).
For financial assets measured at amortised cost, the
Company applies a simplified approach in calculating
ECLs. Therefore, the Company does not track changes
in credit risk, but instead recognises a loss allowance
based on lifetime ECLs at each reporting date. The
Company has established a provision matrix that
is based on its historical credit loss experience,
adjusted for forward-looking factors specific to the
debtors and the economic environment.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition,
as financial liabilities at fair value through profit or
loss, loans and borrowings, payables. All financial
liabilities are recognised initially at fair value and, in
the case of loans and borrowings and payables, net
of directly attributable transaction costs.
The Company's financial liabilities include trade
and other payables, lease liabilities and borrowings
(including bank overdrafts).
Subsequent measurement
For purposes of subsequent measurement, financial
liabilities are classified in two categories:
- Financial liabilities at fair value
through profit or loss
- Financial liabilities at amortised cost (loans
and borrowings)
Financial liabilities at fair value through profit or
loss
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.
Gains or losses on liabilities held for trading are
recognised in the statement of profit or loss.
Financial liabilities are designated upon initial
recognition as at fair value through profit or loss
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 P&L. However, the
Company may transfer the cumulative gain or loss
within equity. All other changes in fair value of such
liability are recognised in the statement of profit and
loss. The Company has not designated any financial
liability as at fair value through profit or loss.
Financial liabilities at amortised cost
After initial recognition, interest-bearing borrowings
are subsequently measured at amortised cost using
the Effective Interest Rate ("EIR") method. Gains
and losses are recognised in profit or loss when the
liabilities are derecognised as well as through the EIR
amortisation process.
Amortised 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 amortisation is included as finance costs in the
statement of profit and loss. This category generally
applies to borrowings.
Supplier finance arrangement
The Company has existing supplier finance
arrangements, refer note 18. The Company
evaluates whether financial liabilities covering
such arrangements continue to be classified within
trade payables, or they need to be classified as a
borrowing or as part of other financial liabilities/ as a
separate line item on the face of the balance sheet.
Such evaluation requires exercise of judgment basis
specific terms of the arrangement.
The Company classifies financial liabilities covered
under supplier finance arrangement within trade
payables in the balance sheet only if (i) the obligation
represents a liability to pay for goods and services,
(ii) is invoiced and formally agreed with the supplier,
(iii) is part of the working capital used in its normal
operating cycle, (iv) the company is not legally
released from its original obligation to the supplier,
and has not assumed a new obligation toward the
bank and/or another party (iv) there is no substantial
modification to the terms of the liability.
If one or more of the above criteria are not met, the
Company derecognises its original liability toward
the supplier and recognise a new liability toward
the bank which is classified as bank borrowing or
other financial liability, depending on factors such
as whether the Company (i) has obligation toward
bank, (ii) is getting extended credit period such that
obligation is no longer part of its working capital
cycle, (iii) is paying interest directly or indirectly, (iv)
has provided guarantee or security, and/ or (v) is
recognized as borrower in the bank books.
Cash flows related to liabilities arising from supplier
finance arrangements that continue to be classified
in trade payables in the balance sheet are included
in operating activities in the statement of cash flows,
when the Company finally settles the liability.
In cases, where the Company has derecognised its
original liability toward the supplier and recognise
a new liability toward the bank, the Company has
assessed that the bank is acting as its agent in
making payment to the supplier. Accordingly, the
Company presents operating cash outflow and
financing cash inflow, when banks make payment
to the supplier. The payment made by the Company
to the bank toward interest, if any, as well as on
settlement is presented as financing cash outflow.
Derecognition
A financial liability is derecognised when the obligation
under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced
by another from the same lender on substantially
different terms, or the terms of an existing liability
are substantially modified, such an exchange or
modification is treated as the derecognition of the
original liability and the recognition of a new liability.
The difference in the respective carrying amounts is
recognised in the statement of profit and loss.
Offsetting of financial instruments:
Financials assets and financial liabilities are offset
and the net amount is reported in the balance sheet
if there is a currently enforceable legal right to offset
the recognized amounts and there is an intention to
settle on a net basis, to realize the assets and settle
the liabilities simultaneously.
Reclassification of financial assets:
The Company determines classification of financial
assets and liabilities on initial recognition. After
initial recognition, no reclassification is made for
financial assets which are equity instruments and
financial liabilities. For financial assets which are
debt instruments, a reclassification is made only if
there is a change in the business model for managing
those assets. Changes to the business model are
expected to be infrequent.
The Company's senior management determines
change in the business model as a result of external
or internal changes which are significant to the
Company's operations. Such changes are evident
to external parties. A change in the business model
occurs when the Company either begins or ceases
to perform an activity that is significant to its
operations. If the Company reclassifies financial
assets, it applies the reclassification prospectively
from the reclassification date which is the first day
of the immediately next reporting period following
the change in business model. The Company does
not restate any previously recognised gains, losses
(including impairment gains or losses) or interest.
q. Segment reporting
Operating segments are reported in a manner
consistent with the internal reporting provided to
the decision making authority. The decision making
authority monitors the operating results of all segments
separately for the purpose of making decisions about
resource allocation and performance assessment.
The operating segments have been identified on the
basis of the nature of products/services. Further:
- Segment revenue includes sales and other
income directly identifiable with / allocable to
the segment including inter - segment revenue.
- Expenses that are directly identifiable with
/ allocable to segments are considered for
determining the segment result. Expenses
which relate to the Company as a whole and
not allocable to segments are included under
unallocable expenditure.
- Income which relates to the Company as a
whole and not allocable to segments is included
in un-allocable income.
- Segment assets and liabilities include those
directly identifiable with the respective
segments. Un-allocable assets and liabilities
represent the assets and liabilities that relate
to the Company as a whole and not allocable
to any segment.
r. Cash and cash equivalents
Cash and cash equivalents in the balance sheet
comprise cash at banks and on hand and short-term
deposits with an original maturity of three months or
less, that are readily convertible to a known amount
of cash and subject to an insignificant risk of changes
in value. Further, it includes amount receivable with
respect to credit card receivable, electronic wallet,
UPI, etc. which are normally received within one
day from the date of transaction and are subject to
insignificant risk of changes in value.
s. Dividend distribution to equity holders
The Company recognises a liability to pay dividend to
equity holders of the Company when the distribution
is authorised and the distribution is no longer at
the discretion of the Company. As per the corporate
laws in India, a distribution is authorised when it
is approved by the shareholders. A corresponding
amount is recognised directly in equity.
t. Earnings per share
Basic earnings per share is calculated by dividing the
net profit or loss attributable to equity shareholders
by the weighted average number of equity shares
outstanding during the period. The weighted average
number of equity shares outstanding during the
period is adjusted for events such as bonus issue,
bonus element in a rights issue, share split, and
reverse share split that have changed the number of
equity shares outstanding, without a corresponding
change in resources.
For the purpose of calculating diluted earnings per
share, the net profit or loss for the period attributable
to equity shareholders of the Company and the
weighted average number of shares outstanding
during the period are adjusted for the effects of all
dilutive potential equity shares.
u. Events after the reporting period
If the Company receives information after the
reporting period, but prior to the date of approved
for issue, about conditions that existed at the end
of the reporting period, it will assess whether the
information affects the amounts that it recognises
in its separate financial statements. The Company
will adjust the amounts recognised in its financial
statements to reflect any adjusting events after
the reporting period and update the disclosures
that relate to those conditions in light of the new
information. For non-adjusting events after the
reporting period, the Company will not change the
amounts recognised in its financial statements but
will disclose the nature of the non-adjusting event
and an estimate of its financial effect, or a statement
that such an estimate cannot be made, if applicable.
v. Exceptional item
Exceptional items are those items of income or
expense that are material in nature, size, or incidence,
and whose separate disclosure is considered
necessary to explain the financial performance of
the Company for the period.
The classification of an item as exceptional is based
on management's judgement, having regard to the
nature, frequency, and magnitude of the transaction.
Items that are expected to occur frequently or arise
in the ordinary course of business are not classified
as exceptional, even if material.
2.3 New and amended standards
The Company applied for the first-time certain standards
and amendments, which are effective for annual periods
beginning on or after April 01, 2025. The Company has not
early adopted any standard, interpretation or amendment
that has been issued but is not yet effective.
(i) Amendments to Ind AS 21 - Lack of exchangeability
The Ministry of Corporate Affairs (MCA) notified
the Companies (Indian Accounting Standards)
Amendment Rules, 2025, which amend Ind AS 21,
The Effects of Changes in Foreign Exchange Rates
to specify how an entity should assess whether
a currency is exchangeable and how it should
determine a spot exchange rate when exchangeability
is lacking. The amendments also require disclosure
of information that enables users of its financial
statements to understand how the currency not
being exchangeable into the other currency affects,
or is expected to affect, the entity's financial
performance, financial position and cash flows.
The amendments are effective for annual reporting
periods beginning on or after April 01, 2025. When
applying the amendments, an entity cannot restate
comparative information.
The amendments do not have a material impact on
the Company's financial statements
(ii) Amendments to Ind AS 1 - Classification of Liabilities
as Current or Non-current and Non-current Liabilities
with Covenants
In August 2025, the MCA notified amendments
to paragraphs 69 to 76 of Ind AS 1 to specify the
requirements for classifying liabilities as current or
non-current. The amendments clarify:
• What is meant by a right to defer settlement
• That a right to defer must exist at the end of the
reporting period
• That classification is unaffected by the likelihood
that an entity will exercise its deferral right
• That only if an embedded derivative in a
convertible liability is itself an equity instrument
would the terms of a liability not impact
its classification
In addition, a requirement has been introduced to
require disclosure when a liability arising from a loan
agreement is classified as non-current and the entity's
right to defer settlement is contingent on compliance
with future covenants within twelve months.
If there is a breach of a material covenant of a long
term loan arrangement on or before the end of the
reporting period, resulting in the liability becoming
payable on demand as at the reporting date, and the
lender agrees—after the reporting period but before
the financial statements are approved for issue—not
to demand repayment for at least 12 months as a
consequence of the breach, this shall be treated
as an adjusting event. Accordingly, the entity is not
required to classify the liability as current.
The amendments are effective for annual reporting
periods beginning on or after April 01, 2025
retrospectively in accordance with Ind AS 8.
The amendments have not resulted in additional
disclosures and have not had any impact on the
classification of Company's liabilities.
(iii) Amendments to Ind AS 7 and Ind AS 107 - Supplier
Finance Arrangements
In August 2025, the MCA notified amendments to
Ind AS 7 Statement of Cash Flows and Ind AS 107
Financial Instruments: Disclosures to clarify the
characteristics of supplier finance arrangements and
require additional disclosure of 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.
As a result of implementing the amendments, the
Company has provided additional disclosures about
its supplier finance arrangement. Please refer to
note 18 and note 41.
(iv) International Tax Reform-Pillar Two Model Rules -
Amendments to Ind AS 12
In August 2025, the MCA notified amendments to Ind
AS 12 Income Taxes in response to the OECD's BEPS
Pillar Two rules and include:
• A mandatory temporary exception to the
recognition and disclosure of deferred taxes
arising from the jurisdictional implementation
of the Pillar Two model rules; and
• Disclosure requirements for affected entities
to help users of the financial statements better
understand an entity's exposure to Pillar Two
income taxes arising from that legislation,
particularly before its effective date
The mandatory temporary exception - the use
of which is required to be disclosed - applies
immediately. The remaining disclosure requirements
apply for annual reporting periods beginning on or
after April 01, 2025, but not for any interim periods
ending on or before March 31, 2026.
The amendments had no impact on the Company's
financial statements as the Company is not in scope
of the Pillar Two model rules.
2.4 Standards notified but not yet effective
The amendments to the standards that are notified
by the Ministry of Corporate Affairs (MCA), but not yet
effective, up to the date of issuance of the Company's
financial statements are disclosed below. The Company
will adopt these amendments to the standards, when they
become effective.
(i) Amendments to Ind AS 1 - Classification of
Liabilities as Current or Non-current and Non¬
current Liabilities with Covenants and Ind AS 10
Events after the Reporting Period
In accordance with Ind AS 1 currently applicable,
breach of an immaterial covenant is ignored deciding
in current vs. non-current classification of liabilities.
Also, in case of breach of a material covenant of a
non-current loan on or before the reporting date, the
entity can obtain waiver from the lender after the
reporting date and continue to classify the loan as
non-current liability.
In accordance with changes to Ind AS 1 already
notified by the MCA, the above relaxations to classify
loan as non-current liability will not be available
from FY 2026-27 onward and need to be applied
retrospectively. Consequently:
- A breachof either materialor immaterial covenant
will trigger current classification of liability.
- To continue classifying loan as non-current
liability, entities will need to obtain waiver from
the breach on or before the reporting date.
The Company is currently assessing the impact the
amendments will have on its financial statements.
(i) Note: Impairment of goodwill and other intangible assets
The Company has performed impairment testing for goodwill (including other intangible assets) acquired on acquisition of
Limeroad business in earlier years. For the purposes of impairment testing, goodwill is allocated to the Cash Generating Unit
(CGU) which represents the lowest level at which the goodwill is monitored for internal management reporting purposes.
The recoverable amount has been determined based on value in use calculated using cash flow projections from financial
budgets approved by the management covering a period of five-year period. The pre-tax discount rate applied to cash flow
projections for impairment testing during the current year is 26.20% - 40% (March 31, 2025: 24.50% - 50%) and cash flows
beyond the five-year period are extrapolated using a 5% growth rate (March 31, 2025: 5%) which is same as the long-term
average growth rate. As a result of testing, the management has concluded that the recoverable amount is higher than the
carrying amount and accordingly, there is no impairment.
Further, management has also performed the sensitivity around various key assumptions considered for value-in-use
calculation. Management believes that any reasonable possible changes in the projected financial budgets and other
assumptions would not cause the carrying amount to exceed the recoverable amount.
(ii) On transition to Ind AS (i.e. April 01, 2016), the Company has elected to continue with the carrying value of all other intangible
assets measured as per previous GAAP and use that carrying value as the deemed cost of other intangible assets.
(c) Terms / rights attached to equity shares
The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is
entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the
Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive 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.
Note:
During the year ended March 31, 2026, the Board of Directors of the Company, in their meeting held on May 02, 2025,
had proposed for issue of bonus equity shares in the ratio of 3:1 i.e. 3 (three) new fully paid-up equity shares of Rs. 10
each for every 1 (one) existing fully paid-up equity share of Rs. 10 each, to the eligible equity shareholder as on the record
date. Subsequent to approval of existing equity shareholders, the Company has allotted bonus equity shares to its existing
shareholders in the ratio of 3:1 by capitalization of securities premium to those shareholders who held shares as on record
date i.e. June 23, 2025.
(g) In respect of total outstanding dues of micro and small enterprises beyond the period of 45 days from the due date and also
as mentioned in the form MSME-1 filed by the Company with Registrar of Companies, there has been delay in payment to
these MSME vendors due to quality issues. Hence, the Company has been unable to process their payments and the delay is
not attributable to the Company.
(b) Terms and conditions of the supplier finance arrangement
The Company participates in supplier finance arrangements through digital invoice discounting platforms, including the
Trade Receivables Discounting System (TReDS). Such arrangement is primarily available to suppliers opting for settlement
of invoices under the supplier finance arrangement. Participating suppliers are paid for their invoices by third-party finance
providers, primarily scheduled banks.
Upon payment to suppliers by the finance providers, the Company's liability to the supplier is extinguished and therefore
corresponding trade payable is derecognised and a new financial liability towards the finance provider is recognised under the
head “other financial liabilities” as payable under supplier finance arrangement. The arrangement has been established to
ease the administrative burden of managing invoices from a significant number of suppliers, rather than to obtain financing.
Financing and interest costs, where borne by the Company, are settled upfront with the finance providers on the date of
discounting. Invoice settled by finance provider with suppliers are without recourse to suppliers. The Company typically
settles these liabilities with the finance providers within 90 days of discounting and provides no security or collateral under
these platforms. Also, no fund based or other limits provided by the banks is utilised for this arrangement.
31 Earnings per share
Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number
of equity shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average number of
equity shares outstanding during the year plus the weighted average number of equity shares that would be issued under ESOP
Scheme to employees.
Note:
(i) During the current year, the Board of Directors of the Company, in its meeting held on May 02, 2025, approved issuance
of 3 bonus shares on 1 fully paid up equity share having face value of Rs. 10/- each, held by shareholders of the Company
at record date i.e. June 23, 2025. Accordingly, the earning per share (basic and diluted) for the previous year has been
recalculated taking impact of bonus shares.
32 Significant accounting judgements, estimates and assumptions
The preparation of the Company's financial statements requires management to make judgements, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the
disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a
material adjustment to the carrying amount of assets or liabilities affected in future periods.
Other disclosures relating to the Company's exposure to risks and uncertainties includes:
i. Capital management (Refer note 40)
ii. Financial risk management objectives and policies (Refer note 41)
iii. Sensitivity analyses disclosures (Refer note 5 and 41)
I Judgements
In the process of applying the Company's accounting policies, management has made the following judgements, which have
the most significant effect on the amounts recognised in the financial statements:
a) Determining the lease term of contracts with renewal and termination options - Company as lessee
The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by
an option to terminate the lease, if it is reasonably certain not to be exercised.
The Company has several lease contracts that include extension and termination options. The Company applies
judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the
lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or
termination. After the commencement date, the Company reassesses the lease term if there is a significant event or
change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew
or to terminate (e.g., leasehold improvements or costs relating to the termination of the lease, and the importance of the
underlying asset to Company's operations taking into account the location of the underlying asset and the availability of
suitable alternatives).
For leases which are expired and under discussion for renewal, the Company considers such leases as short term leases
since, lease can be renewed only based on mutual agreement of landlord and the Company.
Refer note 46 for reassessment of lease term during the year ended March 31, 2025 and impact thereon.
b) Contingencies
Contingent liabilities may arise from the ordinary course of business in relation to claims against the Company, including
legal, contractor, land access and other claims. By their nature, contingencies will be resolved only when one or more
uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies
inherently involves the exercise of significant judgments and the use of estimates regarding the outcome of future events.
c) Recognition of deferred tax
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be
available against which the losses can be utilised. Significant management judgement is required to determine the
amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits.
II Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have
a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
year, are described below. The Company based its assumptions and estimates on parameters available when the financial
statements were prepared. Existing circumstances and assumptions about future developments, however, may change due
to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the
assumptions when they occur.
a) Useful lives and residual values of property, plant and equipment
The Company reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected
utility of the assets.
b) Defined benefit obligation
The cost of the defined benefit plan and other post-employment benefits and the present value of such obligation are
determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from
actual developments in the future. These include the determination of the discount rate, future trends salary increases,
mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation
is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
The calculation is most sensitive to changes in the discount rate. In determining the appropriate discount rate , the
management considers the interest rates of government bonds where remaining maturity of such bond correspond to
expected term of defined benefit obligation.
The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval
in response to demographic changes. Future salary increases and gratuity increases are based on expected future
inflation rates.
Further details about gratuity obligations are given in note 35.
c) Impairment of non-financial assets and goodwill
Impairment exists when the carrying value of an asset or cash generating unit (“CGU”) exceeds its recoverable amount,
which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal
calculation is based on available data from binding sales transactions, conducted at arm's length, for similar assets or
observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a
Discounted Cash Flow (“DCF”) model.
The cash flows are derived from the budget for the next five years and do not include restructuring activities that the
Company is not yet committed to or significant future investments that will enhance the asset's performance of the CGU
being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected
future cash-inflows and the growth rate used for extrapolation purposes. These estimates are most relevant to goodwill
and other intangibles recognised by the Company. The key assumptions used to determine the recoverability of Goodwill
are disclosed and further explained in note 5.
d) Share based payments
Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation
model, which depends on the terms and conditions of the grant. This estimate also requires determination of the most
appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and
making assumptions about them.
For the measurement of the fair value of equity-settled transactions with employees at the grant date, the Company
uses a Black Scholes model. The assumptions and models used for estimating fair value for share-based payment
transactions are disclosed in note 36.
e) Assessment of inventory markdown
The Company at each reporting date makes an assessment of potential markdown due to aged inventory. In doing so, it
estimates the net realisable value of aged inventory based on historic trend of sale of similar aged inventory. Further, it
also estimate the provision for shrink based on past trends which it believes is more than or near to actual shrink to be
booked as and when stores are counted annually.
f) Leases - Estimating the incremental borrowing rate
The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing
rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow
over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-
use asset in a similar economic environment. The IBR therefore reflects what the Company ‘would have to pay', which
requires estimation when no observable rates are available. The Company estimates the IBR using observable inputs
(such as market interest rates) when available and is required to make certain entity-specific estimates.
6 Other litigations:
There are various labour, legal metrology, food adulteration and other cases under other acts pending against the
Company, the liability of which cannot be ascertained. However, the management does not expect significant or material
liability devolving on the Company.
In respect of all litigations mentioned above, based on the opinion taken from independent consultants/lawyers and
based on assessment, the management believes that the outcome of these cases will be favourable and does not result
into outflow of any economic resources. Accordingly, no adjustment is required in the financial statements.
(b) Terms and conditions of transactions with related parties
Purchases of goods and related balances
For terms of transaction
Purchases are made from related parties on the same terms as applicable to third parties in an arm's length transaction and
in the ordinary course of business. The Company mutually negotiates and agrees purchase price and payment terms with the
related parties by benchmarking the same to sale transactions with non-related parties entered into by the counter-party and
similar purchase transactions entered into by the Company with the other non-related parties.
For terms of outstanding balances
Trade payables outstanding balances are unsecured, interest free and require settlement in cash. No guarantee or other
security has been given against these payables. The amounts are payable within 30 to 60 days from the reporting date.
For terms of loans
As at March 31, 2026, the Company has not granted any loans to the promoters, directors, KMPs and the related parties (as
defined under Companies Act, 2013), either severally or jointly with any other person (March 31, 2025: Nil).
(i) Gross salary as per pay sheet including bonus, contribution to PF and LWF. It does not include the provisions made for
gratuity, employee stock option scheme expense and leave benefits as they are determined for the Company as a whole.
(ii) Perquisite value with respect to stock options exercised amounts to Rs. 107 lakhs (March 31, 2025: Rs. 49 lakhs) for
Mr. Anand Agarwal, Rs. 88 lakhs (March 31, 2025: Rs. 88 lakhs) for Mr. Snehal Shah and Rs. 8 lakhs (March 31, 2025:
Nil) for Mrs. Megha Tandon.
(iii) All the related party transactions are excluding Goods and Services Tax (GST) and related party balances are net of TDS.
The Company has a defined benefit gratuity plan which is not funded. The gratuity plan is governed by the Payment of
Gratuity Act, 1972 read with the Code on Social Security, 2020. Under the Act, employee who have completed five years of
service is entitled to specific benefit. The level of benefits provided depends on the member's length of service and salary at
retirement age.
35 Employee benefits obligation
A. Defined contribution plan
The Company makes provident and other funds contributions to defined contribution plans for qualifying employees. Under the
Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. Accordingly,
the Company recognised expense amounting to Rs. 2,681 lakhs (March 31, 2025: Rs. 2,326 lakhs) for contribution to
provident and other funds in the Statement of profit or loss (Refer note 25).
The sensitivity analyses above have been determined based on a method that extrapolates the impact on defined
benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. In
presenting the above sensitivity analysis, the present value of defined benefit obligation has been calculated using the
projected credit unit method at the end of reporting period, which is the same as that applied in calculating the defined
obligation liability recognized in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to
the prior period.
(i) Risk analysis
The Company is exposed to a number of risks in the defined benefit plans. Most significant risks pertaining to defined
benefits plans and management estimation of the impact of these risks are as follows:
Interest rate risk
The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields falls, the
defined benefit obligation will tend to increase.
Salary Inflation risk
Higher than expected increases in salary will increase the defined benefit obligation.
Demographic risk
This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal,
disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and
depends upon the combination of salary Increase, discount rate and vesting criteria. It is important not to overstate
withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per
year as compared to a long service employee.
Detailed information to the extent provided by the actuary in the actuarial certificate has been included in the
disclosure given above.
36 Share Based Payments
Employee Stock Options (ESOP)
The Company has implemented an Employee Stock Option Scheme, which was approved by the Board of Directors and the
shareholders vide resolution dated July 02, 2012 and July 10, 2012 respectively (‘the V-Mart ESOP Scheme 2012' or the
“Scheme”), consequent to which 3,00,000 equity shares with a nominal value of Rs.10 each will be granted upon exercise of
stock options (ESOPs) to eligible employees. Further, the Members of the Company in its meeting held on September 18, 2017
had further approved the amendment in the V-Mart ESOP scheme, 2012 by increasing the total number of options from 3,00,000
to 6,00,000 options. The exercise price of these options will be determined by the Remuneration Committee and the options will
vest over a period of twelve months to thirty six months of continued employment from the grant date. Options must be exercised
within-eight years from the date of grant.
The Company had introduced new Employee Stock Option Scheme which was approved by Board of Directors and the shareholders
vide resolution dated August 10, 2020 and September 30, 2020 respectively (‘the V-Mart ESOP Scheme 2020' or the “Scheme”),
consequent to which equity shares with the nominal value of Rs 10 each was granted to the eligible employees above certain level
and based on certain portion of their remuneration subject to achievement of Company's performance and individual performance
at the cut-off date. Options issued under the scheme will vest over a period of twelve to forty eight months of continued employment
from the grant date. Options must be exercised within-eight years from the date of grant.
(i) The expected life of the stock is based on historical data and current expectations and is not necessarily indicative
of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a
period similar to the life of the options is indicative of future trends, which may not also necessary be the actual outcome.
37 Segment information
The Company has two different lines of business i.e. retail business and digital marketplace, which has altogether different
risk and rewards.
(a) Operating segments
Retail trade : Domestic sale to customer at stores
Digital marketplace : Commission and other income by providing Limeroad platform to vendors
(b) Identification of segments
The Chief Operating Decision Makers (CODM) also views both the business lines separately and accordingly identified and
considered as two different segments in terms of the requirements of Ind AS 108 ‘Operating Segments'. Accordingly, the
financial statements for the year end include segment reporting.
40 Capital management
The Company's objectives when managing capital are to safeguard continuity as a going concern, provide appropriate return
to shareholders and maintain a cost efficient capital structure. The Company determines the amount of capital required on the
basis of an annual budget and a five year plan, including, for working capital, capital investment in its retail stores. The Company's
funding requirements are met through internal accruals and loans repayable on demand. Also, the Company has established a
supplier finance arrangement to manage its working capital. The Company does not have any long term borrowings from bank.
The Company has sanctioned working capital limits amounting to Rs. 34,500 lakhs (March 31, 2025: Rs. 34,500 lakhs) from
State Bank of India, ICICI Bank, Axis Bank and HDFC Bank. An amount of Rs. 24,499 lakhs remains undrawn as at March 31, 2026
(March 31, 2025: Rs. 19,604 lakhs).
41 Financial risk management
A wide range of risks may affect the Company's business and operational / financial performance. The risks that could have
significant influence on the Company are market risk, credit risk and liquidity risk. The Company's Board of Directors reviews and
sets out policies for managing these risks and monitors suitable actions taken by management to minimise potential adverse
effects of such risks on the Company's operational and financial performance.
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 for the Company arises primarily from interest rate risk, credit risk and product price risk. Financial
instruments affected by market risk include borrowings, security deposits and investments in mutual funds.
The sensitivity analysis in the following sections relate to the position as at March 31, 2026 and March 31, 2025. The analysis
exclude the impact of movements in market variables on: the carrying values of gratuity, other post retirement obligations and
the non-financial assets and liabilities.
i) Interest 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's exposure to the risk of changes in market interest rates relates
primarily to the Company's short-term debt obligations with floating interest rates. The following table demonstrates the
sensitivity to a reasonably possible change in interest rates. With all other variables held constant, the Company's profit
before tax is affected through the impact on floating rate borrowings, as follows:
ii) Product price risk: In a potentially inflationary economy, the Company expects periodical price increases across its
retail product lines. Product price increases which are not in line with the levels of customers' discretionary spends, may
affect the business/retail sales volumes. In such a scenario, the risk is managed by offering judicious product discounts
to retail customers to sustain volumes. The Company negotiates with its vendors for purchase price rebates such that
the rebates substantially absorb the product discounts offered to the retail customers. This helps the Company protect
itself from significant product margin losses. This mechanism also works in case of a downturn in the retail sector,
although overall volumes would get affected.
iii) Currency risk: The Company does not have any foreign currency transactions hence the Company is not exposed
to currency risk.
b) Liquidity risk:
The Company's objective is to maintain a balance between continuity of funding and flexibility through the use of bank
overdrafts, working capital demand loans and lease contracts. The Company assessed the concentration of risk with respect
to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding and
debt maturing within 12 months can be rolled over with existing lenders.
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.
Excessive risk concentration
Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same
geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly
affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company's
performance to developments affecting a particular industry.
In order to avoid excessive concentrations of risk, the Company's policies and procedures include specific guidelines to focus
on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.
A substantial portion of the Company's trade payables are included in the Company's supplier finance arrangement and are
thus, with a single counterparty rather than individual suppliers. This results in the Company being required to settle a significant
amount with a single counterparty, rather than less significant amounts with several counterparties. Management does not
consider the supplier finance arrangement to result in excessive concentrations of liquidity risk. Further, the arrangement has
been established to ease the administrative burden of managing invoices from a significant number of suppliers, rather than
to obtain financing. Refer note Note 18 for disclosures regarding payable under supplier finance arrangement.
d) Credit risk:
Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. To manage
this, the Company periodically assesses the financial reliability of customers, taking into account the financial condition,
current economic trends and analysis of historical bad debts and ageing of account receivables. Individual risk limits are also
set accordingly.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant
increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase
in credit risk, the Company compares the risk of default occurring on the asset as at the reporting date with the risk of default
as at the date of initial recognition. The Company considers reasonable and supportive forward-looking information.
Trade receivables and contract assets
There are no contract assets and trade receivables as the Company operate retail stores and where collections are primarily
made in cash or through UPI or credit card payments.
Financial instruments and cash deposits
Credit risk from balances with banks and financial institutions is managed by the Company's treasury department in
accordance with the Company's policy. Investments of surplus funds are made only with approved counterparties and within
credit limits assigned to each counterparty.
The Company's maximum exposure to credit risk for the components of the balance sheet at March 31, 2026 and March 31,
2025 is carrying amounts as disclosed in note 8.
The management assessed that loans, cash and cash equivalents, other financial assets, trade payables, borrowings, lease
liabilities and other financial liabilities approximate their carrying amounts largely due to the short-term maturities of these
instruments. 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 fair value of non-current portion of lease liabilities and financial assets (primarily includes security deposits) are based on
present value of cashflows expected on settlement date which are discounted based on applicable discount rates.
The following methods and assumptions were used to estimate the fair values:
The fair value of unquoted investments are based on NAV as on the reporting date.
43 Fair value hierarchy
The following table provides the fair value measurement hierarchy of the Company's assets:
Further, the limits available is secured by way of:
(i) Pari passu hypothecation charge with all the working capital lenders on entire current assets including stock and all the
present and future book debts.
(ii) Pari passu first hypothecation charge with all the working capital lenders on all the present and future property, plant and
equipment of the Company excluding vehicle and assets financed by other banks under the finance lease and term loan.
(iii) Personal guarantee of Mr. Lalit Agarwal, Mr. Madan Gopal Agarwal and Mrs. Sangeeta Agarwal is given to SBI bank
(iv) Personal guarantee of Mr. Lalit Agarwal and Mr. Madan Gopal Agarwal is given to ICICI bank and Axis Bank
(v) Personal guarantee of Mr. Lalit Agarwal is given to HDFC bank
(vi) Lien on 11,323 mutual fund units of SBI Liquid fund direct growth (Folio no 13912346) to State Bank of India.
(vii) Exclusive charge over fixed deposits of Rs. 100 lakhs (March 31, 2025: Rs. 94 lakhs) to State Bank of India.
(viii) Exclusive charge on residential building owned by Mr. Lalit Agarwal bearing survey no. BPB081, 08th floor, Wing-B, DLF City,
Phase-3, Gurugram, Haryana admeasuring Total Area: 1714 sq. feet. to State Bank of India.
45 Leases
Company as a lessee
The Company has lease contracts for its retail stores, office premises, warehouse and plant and machinery used in its operations.
Leases have lock in period ranging from 1 to 3 years and lease term ranging from 3 to 15 years (previous year: 3 to 6 years, also
refer note 46). There are several lease contracts that include extension and termination options and variable lease payments. The
lease are further renewable on expiry of total lease term at the option of the Company.
The Company also has certain leases of factory outlets, machinery etc with lease term of 12 months or less. The Company applies
the "Short-term lease' recognition exemptions for these leases.
A 1% increase in revenue for respective stores would increase total lease payments by 1%.
(f) The Company had total cash outflows for leases of Rs. 27,763 lakhs in financial year 2025-26 (Rs. 23,473 lakhs in
financial year 2024-25).
(g) Note:
(i) Incremental borrowing rate of 7% p.a. considered for measurement of lease liabilities (March 31, 2025: 7% p.a.)
(ii) Profit on termination of lease (net)
On account of closure of stores, the Company has recognised profit on termination of lease of Rs. 365 lakhs (March 31,
2025: Rs. 232 lakhs) under the head 'Other income' in the Statement of profit and loss on account of :
(A) Reversal of lease liabilities of Rs. 1,082 lakhs (March 31, 2025: Rs. 1,387 lakhs) and right of use assets of Rs. 716
lakhs (March 31, 2025: Rs. 1,165 lakhs). (Refer note 22)
(B) Restatement of security deposits discounted earlier to original value resulting in loss of Rs. 1 lakh (March 31, 2025: Nil)
(iii) The Company does not face a significant liquidity risk with regard to its lease liabilities as the Company believes that it
will able to generate sufficient cash to meet the obligations related to lease liabilities as and when they fall due.
46 Reassessment of lease term - Company as a lessee
During the previous year ended March 31, 2025, the Company reassessed its lease term estimates for store leases in accordance
with Ind AS 116 'Leases'. This reassessment reflects the evolving nature of the Company's store portfolio based on historical
trends as well as future operating strategy. Accordingly, lease term estimates have been revised to closely align with the period
over which management reasonably expects to exercise option to renew its lease contracts.
This has led to a reassessment of the estimates of measurement and recognition of Right of use assets (including associated
security deposits) and corresponding lease liabilities under Ind AS 116. Further, this has also resulted in an incremental depreciation
charge for the year on leasehold improvements and other immovable property, plant & equipment. The above reassessment
resulted in the recognition of a net exceptional gain of H2,418 lakhs during the year ended March 31, 2025. Breakup of exceptional
gain is as under:
47 During the previous year, fire broke out in one of the retail stores of the Company in Law Garden, Gujarat and the Company has
incurred losses against property, plant and equipment and inventories amounting to Rs. 60 lakhs and Rs. 70 lakhs respectively.
The Company has filed claim with the insurance company. The said claim was not approved by the Insurance Company till March
31, 2025. Accordingly, the Company has accounted for such losses in the books of account as at March 31, 2025. During the year
ended March 31, 2026, the Company has received insurance claim amounting to Rs. 125 lakhs which has been recognised under
the head "Miscellaneous income" in Other income head of Statement of profit and loss.
48 The Company has capitalised following expenses which directly or indirectly relates to opening new stores. Consequently,
expenses disclosed under the respective notes are net of amounts capitalised by the Company:
49 On November 21, 2025, the Government of India notified four new Labour Codes (the Cod on Wages, 2019, the Code on Social
Security, 2020, the Industrial Relations Code, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020)
consolidating 29 existing labour laws. The Ministry of Labour & Employment published draft Central Rules and FAQs to enable
assessment of the financial impact due to changes in regulations. The Company has assessed and accounted the incremental
impact of these changes with the best information available and as per guidance provided by the Institute of Chartered Accountants
of India. The impact of the above change amounting to Rs. 119 lakhs has been disclosed as “Exceptional item” in the statement of
profit and loss for the year ended March 31, 2026. The Company continues to monitor the finalization of Central/ State Rules and
clarifications from the Government on other aspects of the Labour Codes and would provide appropriate accounting effect as and
when such clarifications are issued/rules are notified.
50 The Company made an investment in commercial papers of Infrastructure Leasing & Financial Services (IL&FS) in earlier
years amounting to Rs. 980 lakhs, which were due for redemption on September 18, 2018. The aforesaid amount and interest
thereon has not been received as on date. In view of the fact that there is uncertainty on recovery of the entire amount and the
management is carrying a provision of full amount Rs. 980 lakhs (March 31, 2025: Rs. 980 lakhs) against the said investment. The
Company, had filed an intervention appeal on February 08, 2019 regarding the same, which is pending for disposals.
51 Other statutory information
(i) The Company does not have any benami property, where any proceeding has been initiated or pending against the Company for
holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(ii) The Company have any following balances with companies struck off under Section 248 of the Companies Act, 2013.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(iv) The Company has not traded or invested in crypto currency or virtual currency during the financial year.
(v) The Company has not advanced or loaned to or invested funds in any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Company (Ultimate Beneficiaries); or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(vii) 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 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 wilful defaulter by any bank or financial institution or government or any government
authority or other lender, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.
(ix) The Company has complied with the number of layers prescribed under clause (87) of Section 2 of the Companies Act, 2013
read with the Companies (Restriction on number of Layers) Rules, 2017 from the date of their implementation.
(x) The Company has been sanctioned working capital limits in excess of Rs. 500 lakhs in aggregate from bank during the year
on the basis of security of current assets of the Company and quarterly statements filed by the Company with such banks are
in agreement with the books of accounts of the Company.
Note:
(a) Shareholder's equity represents total equity
(b) The Company is into retail business and there are no trade receivable in the Company, accordingly ratio is not applicable
to the Company.
(c) Capital Employed = Tangible net worth Total debt (including lease liabilities) - Goodwill - other intangible assets - deferred
tax assets (net)
53 The Company was awarded projects, under the ‘Deen Dayal Upadhaya-Grameen Kaushalya Yojana' (DDUGKY) from various
state governments for encouraging youth employment. Out of total approval received till Balance Sheet date amounting to Rs.
6,857 lakhs (March 31, 2025: Rs. 7,031 lakhs), the Company has incurred expenses to the extent of Rs. 7,702 lakhs (March 31,
2025: Rs. 7,339 lakhs). Out of the total expenses incurred, the Company has filed the claims amounting to Rs. 6,607 lakhs (March
31, 2025: Rs. 5,864 lakhs) and is in the process of filing the claim for the remaining amount.
Against the total claim filed by the Company, the amount received till the balance sheet date amounted to Rs. 4,330 lakhs (March
31, 2025: Rs. 4,117 lakhs) and balance amount appearing as other assets amounting to Rs. 2,277 lakhs (March 31, 2025 Rs.
3,222 lakhs) (Refer note 11). During the current year, in cases where the actual expenditure incurred exceeded the amount of
eligible expenditure approved by the respective state governments, the Company has written off balance recoverable amounting
to Rs. 1,095 lakhs including balance against which provision of Rs. 402 lakhs made in earlier years. For balance outstanding as at
March 31, 2026, the management believes that amount is good and recoverable.
54 The Company has used Ginesys accounting software for maintaining its books of account which has a feature of recording
audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software,
except that audit trail feature is not enabled at the database level. Further no instance of audit trail feature being tampered with
was noted in respect of accounting software where the audit trail has been enabled. Additionally, the audit trail of prior year has
been preserved by the Company as per the statutory requirements for record retention to the extent it was enabled and recorded
in the prior year.
55 Events after the reporting period
The board of directors of the Company have proposed dividend after the balance sheet date which is subject to approval by the
shareholders at the annual general meeting. Refer note 14(h) for further details.
56 The figures for the corresponding previous year have been regrouped/reclassified, wherever considered necessary to make
them comparable with current year classification.