O. Provisions, contingent liabilities and assets
Provisions are 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 the obligation. The expense relating to a provision is presented in the statement of profit or loss net of any
reimbursement. Provisions are not recognised for future operating losses.
The present obligation under an onerous contract is recognised and measured as a provision. However before a separate provision for
an onerous contract is established, the company recognises any impairment loss that has occurred on assets dedicated to that contract.
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.
Contingent liabilities are possible obligations that arise from past events and whose existence will only be confirmed by the occurrence
or non-occurrence of one or more future events not wholly within the control of the Company. Where it is not probable that an outflow
of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability,
unless the probability of outflow of economic benefits is remote.
A contingent asset is not recognised but disclosed, when probable asset that arises 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.
Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date.
P. Cash and cash equivalents
Cash and cash equivalents include cash on hand, cheques on hand, balance with banks on current accounts and short term, highly
liquid investments with an original maturity of three months or less and which are subject to an insignificant risk of changes in value. For
the purpose of standalone statement of cash flow, cash and cash equivalents consist of cash and short term deposits, net of outstanding
bank overdraft as they being considered as integral part of the company's cash management.
Q. Dividend payable
Dividends and interim dividends payable to a Company's shareholders are recognized as changes in equity in the period in which they
are approved by the shareholder's meeting and the Board of Directors respectively.
R. Non-current assets (or disposal group) held for sale and discontinued operations:
Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying value and fair value less
costs to sell.
Assets and disposal groups are classified as held for sale if their carrying value will be recovered through a sale transaction rather than
through continuing use. This condition is only met when the sale is highly probable and the asset, or disposal group, is available for
immediate sale in its present condition and is marketed for sale at a price that is reasonable in relation to its current fair value.
Where a disposal group represents a separate major line of business or geographical area of operations, or is part of a single coordinated
plan to dispose of a separate major line of business or geographical area of operations, then it is treated as a discontinued operation. The
post-tax profit or loss of the discontinued operation together with the gain or loss recognised on its disposal are disclosed as a single
amount in the statement of profit and loss, with all prior periods being presented on this basis.
S. 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.
A. Financial assets
Classification
The company classifies financial assets as subsequently measured at amortized cost, fair value through other comprehensive
income or fair value through profit or loss on the basis of its business model for managing the financial assets and contractual cash
flow characteristics of the financial asset.
Initial recognition and measurement
All financial assets are recognised initially at fair value. Transaction costs directly attributable to the acquisition or issue of the financial
asset, other than financial assets at fair value through profit or loss, are added to or deducted from the fair value of the financial
assets as appropriate on initial recognition. The financial assets include equity and debt securities, trade and other receivables, loans
and advances, cash and bank balances and derivative financial instruments. Trade receivables that do not contain a significant
financing component are measured at transaction price.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in following categories:
Ý at amortised cost
Ý at fair value through other comprehensive income (FVTOCI)
Ý at fair value through profit or loss (FVTPL)
Financial assets at amortized cost
A "financial asset" is measured at the amortized cost if both the following condition are met:
Ý The assets are held within a business model whose objective is to hold assets for collecting contractual cash flow (business
model test) , and
Ý Contractual terms of the assets give rise on specified dates to cash flows that are solely payments of principle and interest on
the principle amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR)
method. Amortized cost is calculated by taking into account any discount, premium, fee or costs that are an integral part of an
EIR. The EIR amortization is included in finance income in the statement of profit and loss. The losses arising from impairment are
recognized in the statement of profit and loss.
Financial assets at fair value through other comprehensive income
A financial asset is measured at FVTOCI if both the following conditions are met:
Ý The asset is held within a business model in which asset are managed both in order to collect contractual cash flows and for
sale, and
Ý Contractual terms of the assets give rise on specified dates to cash flows that are solely payments of principle and interest on
the principle amount outstanding.
After initial measurement (at fair value minus transaction cost), such financial assets are measured at fair value with changes in fair
value recognized in Other comprehensive income except for:
Ý Interest calculated using EIR
Ý Foreign exchange gain and losses , and
Ý Impairment losses and gains
Financial assets at fair value through profit or loss
Financial assets that are not classified in any of the categories above are classified at fair value through profit or loss (FVTPL).
Equity investments
All equity investments in the scope of Ind AS 109 except investment in subsidiary are measured at fair value. Equity instruments
included within the FVTPL category, if any, are measured at fair value with all changes recognized in statement of profit or loss. The
Company may make an irrevocable election to present in OCI subsequent changes in the fair value. The Company makes such
election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable. When the fair value
has been determined based on level 3 inputs, the difference between the fair value at initial recognition and the transaction price, if
loss, is recognized through retained earnings and after initial recognition subsequent changes in fair value of equity instruments is
recognised as gain or loss to the extent it arises from change in input to valuation technique. If the Company decides to classify an
equity instrument at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in OCI. There is no
recycling of the amounts from OCI to profit or loss, even on sale of investment. However, the Company may transfer the cumulative
gain or loss within equity.
Equity investments in subsidiary are carried at cost less impairment losses, if any, except for the equity investments in subsidiaries
as at the transition date which are carried at deemed cost being fair value as at the date of transition.
De-recognition
A financial asset (or, where applicable, a part of a financial asset) is primarily derecognized when:
Ý The right to receive cash flows from the assets have expired or
Ý The company has transferred substantially all the risks and rewards of the assets, or
Ý The company has neither transferred nor retained substantially all the risks and rewards of the assets, but has transferred
control of the assets.
B. Financial liabilities
Classification
Debt and equity instruments issued by the company are classified as either financial liabilities or as equity in accordance with the
substance of the contractual agreements and the definitions of financial liability and equity instrument.
Initial recognition and measurement
The company recognizes financial liability when it becomes a party to the contractual provision of the instrument. All financial
liabilities are recognized initially at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial
liabilities, other than financial liabilities at fair value through profit or loss, are added to or deducted from the fair value of the
financial liabilities, as appropriate, on initial recognition.
Subsequent measurement
All financial liabilities are subsequently measured at amortised cost using the effective interest method or at FVTPL.
Financial liability at amortized cost
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the Effective
Interest Rate (EIR) method. Gain and losses are recognized in statement of profit and loss when the liabilities are derecognized.
Amortization cost is calculated by taking into account any discount or premium on acquisition and transaction cost. These
amortization is included as finance cost in the statement of profit and loss.
This category generally applies to loans & borrowings.
Financial liability at FVTPL
Financial liabilities are classified at FVTPL when the financial liability is either contingent consideration recognized by the company
as an acquirer in a business combination to which Ind AS 103 applies or is held for trading or it is designed as at FVTPL.
Financial liabilities at FVTPL are stated at fair value, with any gain or loss arises on re-measurement recognized in profit or loss. The
net gain or loss recognized in profit or loss incorporates any interest paid on the financial liability.
Equity Instrument
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.
Equity instruments issued by the company are recognized at the proceeds received, net of direct issue cost.
Repurchase of the company's own equity instruments is recognized and deducted directly in equity. No gain or loss is recognized
in profit or loss on the purchase, sale, issue, or cancellation of the company's own equity instruments.
Financial guarantee contracts :
Financial guarantee contracts issued by the company are those contracts that requires a payment to be made to reimburse the
holder for a loss it incurs because the specific debtors fails to make a payment when due in accordance with the terms of debt
instrument. Financial guarantee contracts are recognised initially as a liability at a fair value, adjusted for transaction costs that are
directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss
allowance determined as per impairment requirement of Ind AS 109 and the amount recognised less cumulative amortization.
De-recognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expired. 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 de-recognition of the original liability and the recognition
of a new liability. The difference in the respective carrying amount recognized in the Statement of Profit and Loss.
C. Offsetting of financial instrument
Financial 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.
D. Equity Share Capital
Ordinary shares are classified as equity instrument is a contract that evidences a residual interest in Company's assets after deducting
all it's liabilities.
Incremental cost directly attributable to the issuance of new equity share and buy back of equity shares are shown as a deduction
from the equity, net off any tax effects.
T. Derivative Financial Instruments and Hedge Accounting
The Company uses various derivative financial instruments to mitigate the risk of changes in interest rates, exchange rates and commodity
prices. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into
and are also subsequently measured at fair value. Derivatives are carried as Financial Assets when the fair value is positive and as Financial
Liabilities when the fair value is negative.
Any gains or losses arising from changes in the fair value of derivatives are taken directly to Statement of Profit and Loss, except for the
effective portion of cash flow hedge which is recognised in Other Comprehensive Income and later to Statement of Profit and Loss
when the hedged item affects profit or loss or is treated as basis adjustment if a hedged forecast transaction subsequently results in the
recognition of a Non-Financial Assets or Non-Financial liability.
Hedges that meet the criteria for hedge accounting are accounted for as follows:
A. Cash Flow Hedge
The Company designates derivative contracts or non-derivative Financial Assets / Liabilities as hedging instruments to mitigate the
risk of movement in interest rates and foreign exchange rates for foreign exchange exposure on highly probable future cash flows
attributable to a recognised asset or liability or forecast cash transactions. When a derivative is designated as a cash flow hedging
instrument, the effective portion of changes in the fair value of the derivative is recognized in the cash flow hedging reserve
being part of Other Comprehensive Income. Any ineffective portion of changes in the fair value of the derivative is recognized
immediately in the Statement of Profit and Loss. If the hedging relationship no longer meets the criteria for hedge accounting,
then hedge accounting is discontinued prospectively. If the hedging instrument expires or is sold, terminated or exercised, the
cumulative gain or loss on the hedging instrument recognized in cash flow hedging reserve till the period the hedge was effective
remains in cash flow hedging reserve until the underlying transaction occurs. The cumulative gain or loss previously recognized in
the cash flow hedging reserve is transferred to the Statement of Profit and Loss upon the occurrence of the underlying transaction. If
the forecasted transaction is no longer expected to occur, then the amount accumulated in cash flow hedging reserve is reclassified
in the Statement of Profit and Loss.
B. Fair Value Hedge
The Company designates derivative contracts or non-derivative Financial Assets / Liabilities as hedging instruments to mitigate
the risk of change in fair value of hedged item due to movement in interest rates, foreign exchange rates and commodity prices.
Changes in the fair value of hedging instruments and hedged items that are designated and qualify as fair value hedges are recorded
in the Statement of Profit and Loss. If the hedging relationship no longer meets the criteria for hedge accounting, the adjustment
to the carrying amount of a hedged item for which the effective interest method is used for amortising to Statement of Profit and
Loss over the period of maturity.
U. Fair value measurement
The Company measures financial instruments at fair value at each balance sheet date.
Fair value is 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. The fair value measurement is based on the presumption that the transaction to sell the asset or
transfer the liability takes place either:
- In the principal market for the asset or liability or
- In the absence of a principal market, in the most advantageous market for the asset or liability
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by
using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best
use.
The Entity uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair
value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value
hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or
indirectly observable
Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For the purpose of fair value disclosures, the Company has determined classes of assets & liabilities on the basis of the nature,
characteristics and the risks of the asset or liability and the level of the fair value hierarchy as explained above.
V. Employee benefit plans:
• Short-term obligations
Short-term obligations for wages and salaries, including nonmonetary benefits that are expected to be settled wholly within twelve
months after the end of the period, are recognised as an expense at the undiscounted amounts of expected liabilities in the year in
which the related service is rendered.
• Defined contribution plans
The Company pays provident and other fund contributions to publicly administered funds as per related Government regulations. The
Company has no further obligation other than the contributions payable to the respective funds. The Company recognizes contribution
payable to such funds as an expense when an employee renders the related service.
• Defined benefit plans
The Company provides for gratuity, a defined benefit retirement plan (‘ the Gratuity Plan') covering eligible employees of the Company.
The Gratuity Plan provides a lumpsum payment to vested employees at retirement, death, or termination of employment, of an amount
based on the respective employee's salary and the tenure of employment with the company.
The cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuation being carried out at each
balance sheet date.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and is included in
finance cost expenses in the Statement of Profit and Loss.
The service cost on the net defined benefit liability/ (asset) is included in employees benefit expenses in the statement of profit and loss.
Past service cost is recognised as an expense when the plan amendment or curtailment occurs or when any related restructuring costs
or termination benefits are recognised, whichever is earlier.
Re- measurement gain and loss arising from experience adjustments and change actuarial assumptions are recognised in the periods
in which they occur, directly in other comprehensive income. Re- measurement are not classified to the Statement of Profit and Loss in
subsequent periods.
• Compensated absences
The employees of the Company are entitled to compensated absences that are both accumulating and non accumulating in nature.
The expected cost of accumulating compensated absences is determined by actuarial valuation using the projected unit credit method
for the unused entitlement accumulated at the balance sheet date. The benefits are discounted using the market yields at the end of
the balance sheet date that has terms approximating the terms of the related obligation. Re-measurements resulting from experience
adjustments and changes in actuarial assumptions are recognized in profit or loss.
• Voluntary Retirement Scheme
Expenditure on voluntary retirement scheme is charged to the Statement of Profit and Loss in the year in which it is incurred.
W. Equity settled share based payments
Employee share based payment pursuant to securities and exchange board of India (share based employee benefits and sweat
equity) regulation,2021 (SEBI Regulation) the shareholders of the company had approved certain share based payment scheme for the
employees. the company has created a trust "DBO Employees Welfare Trust (the ‘DBO Trust') for day to day operation and managing
these schemes. The company in its standalone financial statements considering the trust as its extension inspite of being a separate legal
entity and shares held by the trust are considered as treasury share and disclosed as treasury share reserve under other equity.
X. Operating segments
The Company's operating segments are established on the basis of those components of the Company that are evaluated regularly by
the Board of Directors (the ‘Chief Operating Decision Maker' as defined in Ind AS 108 - ‘Operating Segments'), in deciding how to allocate
resources and in assessing performance. These have been identified taking into account nature of products and services, the differing
risks and returns and the internal business reporting systems.
Revenue and Expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue
and Expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Un¬
allocable".
Segment Assets and Segment Liabilities represent Assets and Liabilities in respective segments. Assets and liabilities that cannot be
allocated to a segment on reasonable basis have been disclosed as "Un-allocable"
Y. Statement of Cash flow
Cash flows are stated using the indirect method, whereby profit/loss before tax is adjusted for the effects of transactions of a non-cash
nature, any deferrals or accruals of past or future operating cash receipts or payments and items of incomes and expenses associated
with investing or financing flows. The cash flows from operating, investing and financing activities of the Company are segregated.
Z. Earnings per share
Basic earnings per share are calculated by dividing the profit/(loss) for the year (before other comprehensive income), attributable to the
equity shareholders, by the weighted average number of equity shares outstanding during the year.
Diluted earnings per share are calculated by dividing the profit/(loss) for the year (before other comprehensive income), adjusting
the after tax effect of interest and other financing costs associated with dilutive potential equity shares, attributable to the equity
shareholders, by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted
average number of equity shares which could be issued on the conversion of all dilutive potential equity shares.
2.4 Use of Estimates and management judgements
The preparation of standalone financial statements in conformity with the accounting policy and measurement principles under Ind
AS requires the management of the company to develop accounting estimates that affect the application of accounting policy and
the reported amounts of revenues, expenses, assets, liabilities including accompanying disclosures and the disclosure of contingent
liabilities and contingent assets. Developing accounting estimates involves the use of measurement technique and other inputs
including judgement or assumption based on the latest available, reliable information. Although these accounting estimates are based
upon the management's best knowledge of current events and actions, actual results could differ from these accounting estimates.
The accounting estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates due to
change in an input or change in a measurement technique, 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 areas
involving critical judgements are as follows:
(i) Estimated useful life of property, plant and equipment (PPE) / intangible asset
PPE & Intangible asset represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation/
amortisation is derived after determining an estimate of an asset's expected useful life and the expected residual value at the end of
its life. The useful lives and residual value of the asset are determined by the management when the asset is acquired and reviewed
periodically including at each financial year end. The lives are based on technical evaluation made by the management of the expected
usage of the asset, the physical wear and tear and technical or commercial obsolescence of the asset. Due to the judgements involved
in such estimations, the useful life and residual value are sensitive to the actual usage in future period.
(ii) Recognition and measurement of defined benefit obligations
The obligation arising from defined benefit plan is determined on the basis of actuarial assumptions. Key actuarial assumption includes
discount rate, trends in salary escalation and attrition rate. The discount rate is determined by reference to market yields at the end of the
reporting period on government securities. The period to maturity of the underlying securities correspond to the probable maturity of the
post-employment benefit obligations. However any changes in these assumptions may have a material impact on resulting calculations.
(iii) Fair value measurement of financial instruments
When the fair value of the financial assets and liabilities recorded in the financial statements cannot be measured based on the quoted
market price in activate markets, their fair value is measured using valuation technique. The input to these models are taken from the
observable market where possible, but if this is not feasible, a review of judgment is required in establishing fair values. Changes in
assumption relating to these assumption could affect the fair value of financial instrument.
(iv) Provisions , Contingent liabilities and Contingent assets
The timing of recognition and quantification of the provisions, contingent liabilities and contingent assets require the application of
judgement to existing facts and circumstances which are subject to change on the actual occurrence or happening. Judgement is
required for estimating the possible outflow of resources, if any, in respect of contingencies/ claims/ litigations against the Company
and possible inflow of resources in respect of the claims made by the Company which has been considered to be contingent in nature.
These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
(v) Impairment of trade receivables
The Company has a stringent policy of ascertaining impairments, if any, as a result of detailed scrutiny of major cases and through
determining expected credit losses. Despite best estimates and periodic credit appraisals of customers, the Company's receivables are
exposed to delinquency risks due to material adverse changes in business, financial or economic conditions that are expected to cause
a significant change to the party's ability to meet its obligations. All such parameters relating to impairment or potential impairment are
reviewed at each reporting date.
(vi) Current taxes and deferred taxes
Significant judgement is required in the determination of the taxability of certain income and deductibility of certain expenses during
the estimation of the provision for current income taxes and option to be exercised for application of reduced rates of taxation on
possible cessation of tax deduction and exhaustion of MAT credit entitlement in future years based on estimates of future taxable profits
for estimation of the deferred taxes.
Deferred tax assets are recognised for all deductible temporary differences, the unused tax losses and the unused tax credit to the extent
that it is probable that taxable profit would be available against which these could be utilized. 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 together with future tax planning strategies. The deferred tax assets and liabilities are reviewed at each balance sheet date
and adjusted to reflect the current best estimates.
(vii) Leases
The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. Identification of a lease requires
significant judgment. The Company uses significant judgement in assessing the lease term (including anticipated renewals) and the
applicable discount rate.
The Company determines the lease term as the non-cancellable period of a lease, together with both periods covered by an option to
extend the lease if the Company is reasonably certain to exercise that option; and periods covered by an option to terminate the lease
if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably certain to exercise an
option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an
economic incentive for the Company to exercise the option to extend the lease, or not to exercise the option to terminate the lease. The
Company revises the lease term if there is a change in the non-cancellable period of a lease.
The discount rate is generally based on the incremental borrowing rate specific to the lease being evaluated or for a portfolio of leases
with similar characteristics.
(viii) Net realisable value of an item of inventory
Significant judgement is required in the estimation of net realisable value of an item of inventory specifically of an item which is not
actively traded in the market. The management considers various factors such as prevailing unit specific market price of the item of
inventory, minimum sale price/ controlled price of the products, contracted rates for the contracted quantity, Government Policies, price
trend in domestic and international market, monthly sale quota, estimated sale expenses etc. in determination of the net realisable value
of the item of inventory actively traded in the market. The management also considers the expected final yeild of the finished products
for deriving the net realisable value of the tailor made by product is not actively traded in the market. The final net realisation of the item
of inventory is dependent on the market conditions prevailing at the time of its ultimate sale and hence could differ from the reported
amount in the financial statements.
c. Terms and rights attached to Equity Shares
The Company has a single class of equity shares having face value of H10 per share. Accordingly, all equity shares rank equally with regard
to dividends and share in the Company's residual assets. The voting rights of an equity shareholder are in proportion to its share of the
paid-up equity capital of the Company. Voting rights cannot be exercised in respect of share on which any call or other sums presently
payable have not been paid.
The Company declares and pays dividend in Indian rupees. The holders of the equity shares are entitled to receive dividends as declared
from time to time. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after
distribution of all preferential amounts, in proportion to their shareholding.
d. Dividend
The Board of Directors of the Company in its meeting held on Saturday, May 30, 2026 recommended final dividend of 15% (i.e. H1.5 per
share on face value of H10 per share) for the financial year 2025-26.
During the current year, the Company has paid final dividend of H1.25 per equity share for the financial year 2024-25.
g. Aggregate number and class of shares bought back:
The Company has not bought back shares in the last five years immediately preceding the balance sheet date.
h. No equity shares were allotted as fully paid up by way of bonus shares during the last five years as at the date of balance sheet. However
6,63,87,590 Equity shares have been allotted on May 23, 2022 in terms of Scheme of Arrangement without payment received in cash.
i. Out of the total paid-up equity share capital of 66387590 shares, 599000 equity shares, as on March 31,2026, are held by DBO Employee
welfare trust (March 31,2025: Nil). Refer Note 52.
Note 16.1 : Nature and purpose of reserves
(i) Capital Reserve
Capital reserve was created on transfer of demerged undertakings to the Company under the Scheme of Demerger and represent the
excess of book value of assets transferred over the book value of liability assumed and amount of share capital issued.
(ii) Storage fund/reserve for molasses
The storage fund for molasses has been created to meet the cost of construction and maintenance of molasses storage tank as required
under Uttar Pradesh Sheera Niyantran (Sansodhan) Adesh, 1974.
(iii) Retained Earnings
Retained earnings represents the undistributed profit / amount of accumulated earnings of the Company.
(iv) Share Based Payment Reserve
Share based payment reserve represents accumulated cost of Employee stock options (issued under DBO Emloyee Stock Option Scheme
2025 (ESOS 2025)) which have been charged to Statement of Profit & Loss and will be adjusted as per accounting policy stated in note
2.3 Also Refer Note 52 for further details.
(v) Shares held with DBO Employee Welfare Trust
Treasury Shares Reserve represents cost of own outstanding shares of the Company held by DBO Employee Welfare Trust 'DBO Trust' at
the year end. Refer Note 52 for further details.
(vi) Other Comprehensive Income
Other comprehensive income (OCI) represents the balance in equity relating to re-measurement gain/(loss) of defined benefit obligation
which will not be reclassified to the statement of profit and loss.
III. Legal Cases
i) Honorable Allahabad High Court in the case of PIL Rashtriya Kisan Mazdoor Sangathan VS State of U.P. passed a final order on March
09, 2017 directing the Cane Commissioner to decide afresh the issue as to whether the Sugar Mills are entitled for waiver of interest
on the delayed payment of the price of sugarcane for the seasons 2012-13, 2013-14 and 2014-15 under the provisions of Section
17(3) of the U.P Sugarcane (Regulations of Supply and Purchase) Act, 1953 (in short 'the Act').The matter is yet to be finalised and
pending before Supreme Court for adjudication. Based on the legal review of the facts of the case and considering past practice, no
liability is likely to crystalise on the Company in this matter.
ii) Cane societies are in dispute with the State Government of Uttar Pradesh with regard to retrospective partial waiver of society
commission payable by the sugar mills for the crushing seasons 2012-13, 2014-15 and 2015-16. Company was the beneficiary of
such waiver. The matter is yet to be finalised and pending before Supreme Court for adjudication. Based on the legal review of the
facts of the case and considering past practice, no liability is likely to crystalise on the Company in this matter.
iii) The Hon'ble Supreme Court vide its Order dated October 23, 2024, had upheld the State's authority to regulate industrial alcohol.
Consequently, the office of Assistant Excise Commissioner had asked the Company to calculate and deposit export fees on denatured
alcohol for the period from 2018-19 to 2024-25. The Company has contested the matter through the Industry Association and
Lucknow Bench of Hon'ble Allahabad Court has granted interim stay in the said matter. However, the aggregate amount calculated
by the Company on this account is H 14.17 Crores. Based on the legal review of the facts of the case and considering past practice,
no liability is likely to crystalise on the Company in this matter.
The disclosures pertaining to disaggregation of revenue and performance obligation in terms of Ind AS 115 - Revenue from contracts
with customers are as follows:
(a) Sugar
The Sugar segment of the Company principally generates revenue from manufacturing and sale of sugar and its by-products. Domestic
sales of sugar is made on ex-factory terms/agreed terms to wholesale /institutional buyers/merchant exporters within the country. Non
instituitional Domestic sugar sales are majorly done on advance payment basis. Instituitional sugar sales are made as per Company's
credit policy whereby the credit exposure of each party is fixed alongwith credit period.
Export sales of sugar to merchant exporters are done on ex-factory /delivered basis in terms of the agreement and revenue is recognised
when the goods have been shipped to / delivered to the buyers' specific location (as per agreed terms). The sale price and payment
terms is fixed as per contracted terms.
Power is supplied to distribution companies from the Company's facilities in accordance with the sale price, payment terms and other
conditions as per the Power Purchase Agreements ("PPA").
Bagasse and pressmud are sold generally on advance payment terms agreed to wholesaler /institutional buyer /to customers on ex¬
factory basis in terms of the agreement and revenue is recognised when the goods have been shipped to/delivered to the buyer.
(b) Bio Fuels & Spirits
The Bio Fuels & Spirits segment of the Company principally generates revenue from sale of industrial alcohol which mainly constitutes
ethanol sold under contracts with Public and Private Oil Marketing Companies ("OMCs") and other products to institutional buyers.
For sale of ethanol under contracts with OMCs, sale price is pre-determined based on Expression of Interest ("EOI")/Tender floated from
OMCs. The prices are on delivered cost basis at OMC's locations inclusive of all duties/levies/taxes/charges etc. Payment terms for sale of
ethanol is upto 45 days after delivery of material and submission of original invoices.
Other products like ENA, SDS etc. are sold on bulk basis to institutional buyers on ex-factory basis as per agreed terms. Revenue is
recognised when goods have been shipped to the buyers' specific location as per agreed terms. The payment terms are fixed as per
Company's credit policy which are upto 45 days.
(c) Country Liquor
The Country Liquor segment of the Company principally generates revenue from sale of country liquor to CL2 Licence holders within
state (i.e. Uttar Pradesh). Sales price of Country liquor includes freight cost and all duties including excise duty. The payment terms are
fixed as per Company's credit policy whereby the credit exposure of each party is fixed alongwith credit period.
a) The Central Government, vide its Notification No. 1(10)/2018-SP-I dated July 19, 2018, notified a Scheme with a view to increase
production of ethanol by enhancing the number of working days of existing in a year by installation new Incineration boilers or by
adoption any other matter approved by Central Pollution Control Board (CPCB) for Zero Liquid Discharge (ZLD) in a distillery. Every Sugar
Mill which fulfil the conditions stipulated in the scheme will be eligible for the interest subvention @ 6% per annum or 50% of the rate of
interest charged by bank, whichever is lower, on the loans to be extended by banks, shall be borne by central Government for five years.
Till March 31, 2026, the Company has complied with all the conditions as stated in the scheme and submitted the claim for interest
subvention. The interest subvention accrued under the Scheme till March 31,2026 is H10.86 Crore (March 31,2025: H 11.19 Crore) and out
of which H6.36 Crore (March 31,2025: H3.73 Crore) has been received till March 31,2026.
The Central Government vide it's notification on April 22, 2022, notified a scheme for extending financial assistance to Project proponents
for enhancement of their distillery capacity or to set up distillery for producing 1st Generation (1G) ethanol from feed stocks such as
cereals (rice, wheat, barley, corn & sorghum), sugarcane, sugar beet etc. Sugar Mill which fulfils the conditions stipulated in the scheme
is eligible for the interest subvention @ 6% per annum or 50% of the rate of interest charged by bank, whichever is lower, on the loans
extended by bank.
Till March 31, 2026, the Company has complied with all the conditions as stated in the scheme and submitted the claim for interest
subvention. The interest subvention accrued under the Scheme till March 31,2026 is H2.82 Crore (March 31,2025: Nil).
b) The State Government, with a view to improve the liquidity position of private sector sugar mills of the State enabling them to clear the
cane price arrears of crushing seasons 2016-17 and 2017-18 and timely settlement of cane price as per State Advised Price (SAP) fixed by
the State Government, to the sugarcane farmers, has notified the scheme, namely "Scheme for Extending Financial Assistance to Sugar
Undertakings-2018" vide notification No.: 15 /2018/1719/46-3-18-3 (36-A) / 2018 dated October 16, 2018. The Company had availed the
term loan in the F.Y 2018-19 under the Scheme, wherein, the government grant has been received in form of Subsidized rate of interest.
The loan was repaid in the FY 2024-25.
Note 45: Segment Reporting
I) Identification of Segments
The Company's operating segments are established on the basis of those components of the Company that are evaluated regularly by
the Board of Director's (the 'Chief Operating Decision Maker' as defined in Ind AS 108 - 'Operating Segments').
The chief operational decision maker monitors the operating results of its Business Segments separately for the purpose of making
decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is
measured consistently with profit or loss in the financial statements. Operating Segments have been identified by the management
and reported taking into account, the nature of products and services, the differing risks and returns, the organization structure, and the
internal financial reporting systems.
II) Operating Segments
The Company is organized into three main business segments, namely:
- Sugar which consists of manufacture and sale of Sugar and its byproducts along with co-genration and sale of power,
- Bio Fuels & Spirits which consists of manufacture and sale of SDS, ENA, Ethanol, sanitizer etc.
- Country liquor.
No operating segments have been aggregated in arriving at the aforesaid reportable segments of the Company.
III) Geographical segments
Since the Company's activities/ operations are primarily within the country and considering the nature of products/ services it deals in,
the risks and returns are same and as such there is only one geographical segment.
IV) Segment Accounting Policies:
In addition to the significant accounting policies applicable to the operating segments as set out in note 2, the accounting policies in
relation to segment accounting are as under:
a) Segment revenue and results:
Revenue and expenses directly attributable to segments are reported under each reportable segment. Other expenses and incomes
which are not directly attributable to any business segment are shown as unallocable expenses (net of unallocated income).
b) Segment assets and liabilities:
Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. Unallocated
assets include deferred tax, investments, interest bearing deposits loans to subsidiary and income tax refund. Unallocated liabilities
include interest bearing liabilities, tax provisions and deferred tax. Capital expenditure pertains to additions made to fixed assets during
the year and includes capital work in progress.
c) Inter segment sales/transfer:
Transactions between segments are primarily for materials which are transferred at cost /market determined prices. These transactions
are eliminated in consolidation.
C. Terms and Conditions of Settlement
The transactions with the related parties are made on term equivalent to those that prevail in arm's length transactions. The assessment
is under taken each financial year through examining the financial position of the related party and in the market in which the related
party operates. Outstanding balances at the year end are un-secured and settlement occurs in cash.
(ii) Defined benefit plan :
In respect of defined benefit scheme of gratuity (Based on actuarial valuation) :
The gratuity plan is governed by the payment of Gratuity Act,1972. Under the said Act an employee who has completed five years
of services is entitled to specific benefit. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death,
incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment
with the Company.
In respect of defined scheme of Compensated absences
The accumulated Compensated absences, expected to be carried forward beyond the period of twelve months from the reporting
date as per Company's policy, are measured on Acturial valuation using projected unit credit method for the unused entitlement and
respective employee's salary.
The Company is exposed to various risks in providing the above defined benefit which are as follows:
Interest Rate risk : The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the
ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in financial statements).
Salary escalation risk : The present value of the defined benefit plan is calculated with the assumption of salary increase 0.50% per
annum of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in
salary used to determine the present value of obligation will have a bearing on the plan's liability.
Actual mortality & disability : Deaths & disability cases proving lower or higher than assumed in the valuation can impact the liabilities.
The following tables summaries the components of net benefit expense recognized in the statement of Profit and Loss
Note: 47(b): With effect from November 21, 2025, the Government of India has consolidated existing labour legislations into a unified
framework comprising four Labour Codes collectively referred to as the 'New Labour Codes'. However, the corresponding Rules under these
New Labour Codes are yet to be notified. The Company has estimated and recorded defined benefit obligation based on the best available
information and review of the existing wage structure. The Company continues to monitor the finalisation of Central/State Rules and
clarifications from the Government of India on several aspects of the New Labour Codes and would provide appropriate accounting effects
based on such developments and consequent management decisions in this regard.
III. Fair Value Hierarchy
The fair value of the financial assets and financial liabilities are 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.
All the assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised with in the fair value
hierarchy described as follows, based on lowest level input i.e. significant to the fair value measurement as a whole.
The following table provides the fair value measurement hierarchy of Company's asset and liabilities, grouped into Level 1 to Level 3 as
described below:-
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs)."
Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in
any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily
indicative of the amounts that the Company could have realized or paid in sale transactions as of respective dates. As such, the fair value
of financial instruments subsequent to the reporting dates may be different from the amounts reported at each reporting date.
Note 50: Financial Risk Management
The Company has in place comprehensive risk management policy in order to identify measure, monitor and mitigate various risks pertaining
to its business. Along with the risk management policy, an adequate internal control system, commensurate to the size and complexity of
its business, is maintained to align with the philosophy of the company. Together they help in achieving the business goals and objectives
consistent with the Company's strategies to prevent inconsistencies and gaps between its policies and practices. The Board of Directors/
committees reviews the adequacy and effectiveness of the risk management policy and internal control system. The Company's financial risk
management is an integral part of how to plan and execute its business strategies. The Company has exposure to the following risks arising
from financial instruments:
Ý Credit risk
Ý Liquidity risk and
Ý Market risk
I. Credit risk
The Company's non instituitional domestic sales are mostly on advance payments. Sale of sugar to instituitional buyers and sale of
Country Liquor are made as per terms of arangment on credit.
Expected credit loss for trade receivable on simplified approach :
The ageing analysis of the trade receivables (gross of provision) has been considered from the date the invoice falls due:
Expected credit loss for Trade and other receivables:
The Company uses a provision matrix to determine impairment loss on portfolio of its trade & other receivables. The provision matrix is
based on its historically observed default data over the expected life of the trade & other receivable and is adjusted for forward- looking
estimates. At every reporting date, the historical observed default rates are updated and changes in forward-looking estimates are
analysed. In case of probability of non collection, default rate is 100%.
Liquidity risk is defined as the risk that company will not be able to settle or meet its obligation on time or at a reasonable price. The
Company's objective is to at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company's
management is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such
risk are overseen by senior management. Management monitors the company's net liquidity position through rolling, forecast on the
basis of expected cash flows.
(i) Maturities of financial liabilities
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and
undiscounted, and excluding contractual interest payments and exclude the impact of netting agreements.
III. 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 risks, such as regulatory risk and commodity price
risk. Financial instruments affected by market risk include loans and borrowings, trade receivables and trade payables involving foreign
currency exposure, and inventories.
The sensitivity analysis in the following sections relate to the position as at March 31, 2026 and March 31, 2025. The sensitivity of the
relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and
financial liabilities held at March 31,2026 and March 31,2025.
(a) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign
exchange rates. The Company used foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations
relating to certain firm commitments. The use of foreign currency forward contracts is governed by the Company's strategy
approved by the Board of Directors, which provide principles on the use of such forward contracts consistent with the Company's
Risk Management. The Company has not entered into any forward exchange contract and no foreign currency monetory assets and
liabilities are outstanding at the end of current year as well as previous year.
Derivative financial instruments
The Company does not hold any derivative financial instruments at the end of current year as well as previous year.
(b) Regulatory risk
Sugar industry is regulated both by Central Government as well as State Government. Central and State Governments policies and
regulations affects the Sugar industry and the Company's operations and profitability. Distillery business is also dependent on the
Government policy.
(c) Commodity price risk
Sugar industry being cyclical in nature, realizations get adversely affected during downturn. Higher cane price or higher production
than the demand ultimately affect profitability. The Company has mitigated this risk by well integrated business model by
diversifying into co-generation and distillation, thereby utilizing the by-products.
(d) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
interest rates.
As the Company does not have exposure to any floating-interest bearing assets, or any significant long-term fixed interest bearing
assets, its interest income and related cash inflows are not affected by changes in market interest rates. Consequently, the Company's
interest rate risk arises mainly from borrowings obligations with floating interest rates.
The company's exposure to equity securities price risk arises from investments held by the company and classified in the balance
sheet at fair value through Statement of profit and loss. Since the company does not have any material equity investments measured
at fair value though Statement of profit and loss, there is no material price risk exposure at the end of the financial year.
Note 51: Capital Management
For the purpose of the Company's capital management, capital includes issued equity capital, securities premium and all other equity
reserves attributable to the equity shareholders of the Company. The Company's capital management is intended to maximize the return
to shareholders for meeting the long-term and short-term goals of the Company through the optimization of the debt and equity balance.
The Company manages its capital structure and makes adjustments in light of changes in the financial condition and the requirements of
the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return
capital to shareholders (buy back its shares) or issue new shares. The Capital structure of the company consists of net debt (borrowings offset
by cash and bank balances) and equity of the Company (Comprising issued capital, reserves and retained earnings).
In order to achieve this overall objective, the Company's capital management, amongst other things, aims to ensure that it meets financial
covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. The Company has complied
with these covenants and there have been no breaches in the financial covenants of any interest-bearing loans and borrowings.
The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future
development of the business. The primary objective of the Company's Capital Management is to maximize the shareholder's value.
Management also monitors the return on capital. The Board of Directors seek to maintain a balance between the higher returns that might
be possible with higher levels of borrowing and the advantages and security afforded by a sound capital position.
Note 52: Share Based Payments
The Company has implemented DBO Employee Stock Option Scheme 2025 (ESOS 2025 Scheme) pursuant to the resolution passed by the
shareholders of the Company dated May 4, 2025 via Postal Ballot and as approved by the Nomination and Remuneration Committee of the
Company ("Committee") in its meeting held on July 25, 2025, through Trust Route . The scheme entitles eligible employees and directors
of the Company to acquire shares of the Company at the stipulated exercise price, subject to compliance with vesting conditions. The
nomination and remuneration committee of the Board of the Company administers the DBO Employee Stock Option Scheme 2025 (ESOS
2025) and grants stock options to eligible employees.
The Company formed DBO Employees Welfare Trust (the 'DBO Trust'), for the purpose of implementation of the ESOS 2025 Scheme and
granted interest free loan of H5.50 Crores as on March 31, 2026, which has been utilized by the Trust for acquisition of 5,99,000 shares of
the Company from the open market at an average price of H86.01 per share during the current year. The Company considers the Trust as
an extension of the entity and accordingly, incorporated the assets and liabilities of the Trust in the standalone financial statements of the
Company. The shares of the Company held by the Trust are shown under 'Shares held with DBO Employee Welfare Trust' in 'Other equity' and
acquisition cost of shares held by the Trust is presented as reduction in 'Other Equity' (Refer Note 16).
The vesting conditions are mix of service and performance based conditions. Further, the minimum vesting period is 1 year from the grant
of shares. 25% of the Options will vest each year, over a period of 4 years from the Grant Date, subject to meeting of performance criteria as
determined by the Nomination and Remuneration Committee and communicated to the eligible employees in Grant Letter. Each option
entitles the holder to exercise the right to apply for and seek allotment of one equity share of face value H10 each on payment of exercise price
Share based payment expense for the year ended March 31,2026 is H0.28 Crore (also Refer Note 31).
The fair values of options are measured based on the 'Black-Scholes Option Pricing Model'. The significant assumptions and inputs to estimate
the fair value or options granted during the year are as follows:
Note 54: Events occurring after the balance sheet date
Subsequent to the reporting date, the Company entered into a Business Transfer Agreement ("BTA") on April 20, 2026 for transfer of the one
of its sugar manufacturing undertaking comprising sugar and co-generation plant located at Meerganj, Bareilly, Uttar Pradesh, ("Meerganj
Unit") on slump sale basis for an aggregate consideration of H 305 crores which has also been approved by the shareholders in the EGM held
on May 18, 2026. The sale is expected to be completed within 60 days from the date of execution of the BTA which may be extended as per
mutual agreement between the Company and the Buyer in accordance with the terms of the BTA.
The Company evaluates events and transactions that occur subsequent to the balance sheet date but prior to approval of financial statement
to determine the necessity for recognition and/or reporting of any of these events and transactions in the financial statements. As of May
30, 2026 there were no other material subsequent events, except stated above, to be recognized or reported that are not already disclosed.
Note 55: Offsetting financial instruments
There are no financial instruments which are offset, or subject to enforceable master netting arrangements and other similar agreements but
not offset, as at each reporting date.
Note 56: Reconciliation of quarterly bank returns
Note for discrepancies :
The Bank returns were prepared and filed before the completion of all financial statement closure activities including Ind AS related
adjustments/ reclassifications, as applicable, which led to these differences between the final books of accounts and the bank return which
were based on provisional books of accounts. Further difference also arises on account of different valuation methodology adopted for
valuing the finished goods stock in the books and for the purpose of reporting in the bank return. In the books, stock of finished goods is
recorded at lower of cost or net realisable value but for bank purposes it is taken at net realisable value which is determined as per bank
norms.
However there is no material difference in reporting the quantity of stock in the bank returns as compared to books of accounts.
(ii) Creation of charges of term loans availed from the lenders in respect of mortgage of land and building and hypothecation of fixed assets
are duly executed as per the respective agreements executed.
(iii) The Company has not traded or invested in Crypto currency or Virtual Currency during the reporting period.
(iv) 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.
(v) 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.
(vi) The Company does not have any 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).
(vii) The company has not granted any loans or advances in the nature of loans to promoters, directors, KMPs, and the related parties(as
defined under Companies Act, 2013), either severally or jointly with any other person, that are:
a) repayable on demand; or
b) granted without specifying any terms or period of repayment"
(viii) The Company has not declared a wilful defaulter by any banks or any other financial institution at any time during the financial year.
(ix) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies
(Restriction on number of layers) Rules, 2017 as amended.
Note 58: Other Notes
(i) In the opinion of the Board of Directors, trade receivables, other current financial assets, and other current assets have a value on
realization in the ordinary course of the company's business, which is at least equal to the amount at which they are stated in the balance
sheet.
(ii) The Board of Directors at its meeting held on May 30, 2026 has approved the Standalone Financial Statement for the year ended March
31, 2026.
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