2.17 Provisions, contingent liabilities and
contract assets
a) Provisions for legal claims, service warranties,
volume discounts and returns are recognised when
the Company has a present legal or constructive
obligation as a result of past events, it is probable
that an outflow of resources will be required to
settle the obligation and the amount can be reliably
estimated. Provisions are not recognised for future
operating losses.
Provisions for restructuring are recognised by
the Company when it has developed a detailed
formal plan for restructuring and has raised a valid
expectation in those affected that the Company
will carry out the restructuring by starting to
implement the plan or announcing its main features
to those affected by it.
Where there are a number of similar obligations,
the likelihood that an outflow will be required
in settlement is determined by considering the
class of obligations as a whole. A provision is
recognised even if the likelihood of an outflow
with respect to any one item included in the same
class of obligations may be small. Provisions are
measured at the present value of management's
best estimate of the expenditure required to settle
the present obligation at the end of the reporting
period. The discount rate used to determine the
present value is a pre-tax rate that reflects current
market assessments of the time value of money
and the risks specific to the liability. The increase
in the provision due to the passage of time is
recognised as interest expense.
The measurement of provision for restructuring
includes only direct expenditures arising from the
restructuring, which are both necessarily entailed
by the restructuring and not associated with the
ongoing activities of the Company.
The expenses relating to provision is presented
in the statement of profit and loss net of
any reimbursement.
b) Contingent liabilities are disclosed when there
is a possible obligation arising from past events
the existence of which will be confirmed only
by the occurrence or non-occurrence of one or
more uncertain future events not wholly within
the control of the company or a present obligation
that arises from past events where it is either
not probable that an outflow of resources will
be required to settle or a reliable estimate of the
amount cannot be made. The Company does not
recognize a contingent liability but discloses the
same as per the requirements of Ind AS 37.
c) A contingent asset is a possible 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. The
Company does not recognize the contingent asset
in its standalone financial statements since this
may result in the recognition of income that may
never be realised. Where an inflow of economic
benefits are probable, the Company disclose a
brief description of the nature of contingent assets
at the end of the reporting period. However, when
the realisation of income is virtually certain, then
the related asset is not a contingent asset and the
Company recognize such assets.
2.18 Contributed Equity
Equity shares are classified as equity. Incremental
costs directly attributable to the issue of new
shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
The Company has created an Employee Benefit
Trust (EBT) for providing share-based payment
to its employees. The EBT buys shares of the
Company from the market, for giving shares
to employees. The Company treats EBT as its
extension and shares held by EBT are treated as
treasury shares.
Own equity instruments that are reacquired
(treasury shares) are recognised at cost and
deducted from other equity. No gain or loss is
recognised in profit or loss on the purchase, sale,
issue or cancellation of the Company's own equity
instruments. Treasury shares are reduced while
computing basic and diluted earnings per share.
The Company transfers the excess of exercise
price over the cost of acquisition of treasury
shares, net of tax, by EBT to General Reserve.
219 Dividends
Provision is made for the amount of any dividend
declared, being appropriately authorised and no
longer at the discretion of the entity, on or before
the end of the reporting period but not distributed
at the end of the reporting period.
2.20 Earnings per share
a) Basic earnings per share
Basic earnings per share is calculated by dividing:
• the profit attributable to owners of the Company
• by the weighted average number of equity
shares outstanding during the financial year,
adjusted for bonus elements in equity shares
issued during the year and excluding treasury
shares (refer note 33).
b) Diluted earnings per share
Diluted earnings per share adjusts the figures used
in the determination of basic earnings per share to
take into account:
• the after income tax effect of interest and
other financing costs associated with dilutive
potential equity shares, and
• the weighted average number of additional
equity shares that would have been outstanding
assuming the conversion of all dilutive potential
equity shares.
2.21 Business combinations and goodwill
Acquisitions of business are accounted for
using the acquisition method. The consideration
transferred in a business combination is measured
at fair value, which is calculated as the sum of
the acquisition date fair values of the assets
transferred by the Company, liabilities incurred by
the Company to the former owners of the acquiree
and the equity interest issued by the Company in
exchange of control of the acquiree. Acquisition
related costs are recognised in profit and loss
as incurred.
A business combination involving entities or
businesses under common control is a business
combination in which all of the combining entities
or businesses are ultimately controlled by the
same party or parties both before and after the
business combination and the control is not
transitory. The transactions between entities
under common control are specifically covered
by Ind AS 103. Such transactions are accounted
for using the pooling-of-interest method. The
assets and liabilities of the acquired entity are
recognised at their carrying amounts of the
Company's standalone financial statements.
No adjustments are made to reflect fair values
or recognise any new assets or liabilities. The
components of equity of the acquired companies
are added to the same components within the
Company's equity. The difference, if any, between
the amounts recorded as share capital issued plus
any additional consideration in the form of cash or
other assets and the amount of share capital of the
transferor is transferred to capital reserve and is
presented separately from other capital reserves.
The Company's shares issued in consideration for
the acquired companies are recognized from the
moment the acquired companies are included in
these standalone financial statements and the
financial statements of the commonly controlled
entities would be combined, retrospectively, as if
the transaction had occurred at the beginning of
the earliest reporting period presented.
Purchase consideration paid in excess / shortfall
of the fair value of identifiable assets and liabilities
including contingent liabilities and contingent
assets, is recognised as goodwill / capital reserve
respectively, except in case where different
accounting treatment is specified in the court
approved scheme.
Deferred tax assets or liabilities, and liabilities or
assets related to employee benefits arrangements
are recognized and measured in accordance with
Ind AS 12 "Income Taxes” and Ind AS 19 "Employee
Benefits” respectively.
Potential tax effects of temporary differences
and carry forwards of an acquiree that exist at
the acquisition date or arise as a result of the
acquisition are accounted in accordance with Ind
AS 12.
Goodwill arising on an acquisition of a business
is carried at cost as established at the date of
acquisition of the business less accumulated
impairment losses, if any.
For the purposes of impairment testing, goodwill
is allocated to each of the Company's cash¬
generating units (or company's of cash-generating
units) that is expected to benefit from the synergies
of the combination.
A cash-generating unit to which goodwill has
been allocated is tested for impairment annually,
or more frequently when there is an indication
that the unit may be impaired. If the recoverable
amount of the cash-generating unit is less than its
carrying amount, the impairment loss is allocated
first to reduce the carrying amount of any goodwill
allocated to the unit and then to the other assets
of the unit pro rata based on the carrying amount
of each asset in the unit. Any impairment loss for
goodwill is recognised directly in statement of
profit and loss. An impairment loss recognised for
goodwill is not reversed in subsequent periods.
On disposal of the relevant cash-generating unit,
the attributable amount of goodwill is included in
the determination of the profit or loss on disposal.
2.22 Climate related matters
The Company considers climate-related matters
in estimates and assumptions, where appropriate.
This assessment includes a wide range of possible
impacts on the Company due to both physical
and transition risks. Even though the Company
believes its business model and products will
still be viable after the transition to a low-carbon
economy, climate-related matters increase
the uncertainty in estimates and assumptions
underpinning several items in the financial
statements. Even though climate-related risks
might not currently have a significant impact on
measurement, the Company is closely monitoring
relevant changes and developments, such as new
climate-related legislation.
2.23 Current versus Non-current classification
The Company presents assets and liabilities
in the balance sheet based on current / non¬
current classification.
a) An asset is treated as current when it is:
• Expected to be realised or intended to be sold
or consumed in normal operating cycle
• Held primarily for the purpose of trading
• Expected to be realised within twelve months
after the reporting period, or
• Cash or cash equivalent unless restricted from
being exchanged or used to settle a liability for
at least twelve months after the reporting period
All other assets are classified as non-current.
b) A liability is current when:
• It is expected to be settled in normal
operating cycle
• It is held primarily for the purpose of trading
• It is due to be settled within twelve months
after the reporting period, or
• There is no unconditional right to defer the
settlement of the liability for at least twelve
months after the reporting period.
The terms of the liability that could, at the option
of the counterparty, result in its settlement by
the issue of equity instruments do not affect
its classification.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as
non-current assets and liabilities.
The operating cycle is the time between the
acquisition of assets for processing and their
realisation in cash and cash equivalents. The
company has identified twelve months as its
operating cycle.
2.24 New and Amended Standards
(i) Ind AS 117 Insurance Contracts
Ind AS 117 Insurance Contracts is a comprehensive
new accounting standard for insurance contracts
covering recognition and measurement,
presentation and disclosure. Ind AS 117 replaces
Ind AS 104 Insurance Contracts. Ind AS 117 applies
to all types of insurance contracts, regardless of
the type of entities that issue them as well as to
certain guarantees and financial instruments with
discretionary participation features; a few scope
exceptions will apply. Ind AS 117 is based on a
general model, supplemented by:
• A specific adaptation for contracts with
direct participation features (the variable fee
approach)
• A simplified approach (the premium allocation
approach) mainly for short-duration contracts
The amendments had no impact on the Company's
standalone financial statements.
(ii) Amendment to Ind AS 116 Leases - Lease
Liability in a Sale and Leaseback
The MCA notified the Companies (Indian
Accounting Standards) Second Amendment Rules,
2024, which amend Ind AS 116, Leases, with
respect to Lease Liability in a Sale and Leaseback.
The amendment specifies the requirements that a
seller-lessee uses in measuring the lease liability
arising in a sale and leaseback transaction, to
ensure the seller-lessee does not recognise any
amount of the gain or loss that relates to the right
of use it retains.
The amendment is effective for annual reporting
periods beginning on or after 1 April 2024 and must
be applied retrospectively to sale and leaseback
transactions entered into after the date of initial
application of Ind AS 116.
The amendments had no impact on the Company's
standalone financial statements.
2.25 Rounding of amounts
All amounts disclosed in the standalone financial
statements and notes have been rounded
off to the nearest crores with two decimal as
per the requirement of Schedule III, unless
otherwise stated.
(vi) Rights, preferences and restrictions attached to equity shares
The company has one class of equity shares having a par value of ? 1 per share (March 31, 2024 : ? 1). Each
shareholder is eligible for one vote per share held. The final 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, the equity
shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential
amounts, in proportion to their shareholding.
(vii) Buyback in the peirod of five years immediately preceeding March 31, 2025
The Company has bought back 1,66,66,666 equity shares of ? 1 each at a price of ? 120 per equity share in
accordance with the provisions of Companies Act, 2013 and SEBI (Buy-Back of Securities) Regulations, 2018.
The settlement of bids by the Clearing Corporation on the stock exchange was completed on July 14, 2021.
The Company has bought back 1,62,50,000 equity shares of ? 1 each at a price of ? 120 per equity share in
accordance with the provisions of Companies Act, 2013 and SEBI (Buy-Back of Securities) Regulations, 2018.
The settlement of bids by the Clearing Corporation on the stock exchange was completed on May 29, 2023.
[Refer Note 34]
The Company has bought back 1,26,55,970 equity shares of ? 1 each at a price of ? 220 per equity share in
accordance with the provisions of Companies Act, 2013 and SEBI (Buy-Back of Securities) Regulations, 2018.
The settlement of bids by the Clearing Corporation on the stock exchange was completed on August 23, 2024.
[Refer Note 34]
(a) Capital Redemption Reserve
Capital Redemption Reserve is created 1) when preference shares are redeemed out of profits of the
Company, a sum equal to the nominal amount of the shares to be redeemed has to be transferred to this
reserve and 2) when company purchases its own shares out of free reserves, a sum equal to the nominal
value of shares so purchased has to be transferred to this reserve. This reserve may be used for paying up
unissued shares of the Company to be issued to members of the Company as fully paid bonus shares.
(b) Capital Reserve
Out of total, Capital Reserve of ? 138.94 crore related to Gujarat high court approved composite scheme of
arrangement between group companies. Balance ? 4.82 crore was accrued on Forfeiture of Share warrants.
Capital reserve is not available for distribution.
(c) Securities Premium
Securities premium Account is used to record the premium on issue of shares. The reserve is utilised in
accordance with the provisions of the Companies Act, 2013.
(d) General Reserve
General Reserve is a free reserve and is available for distribution as dividend, issue of bonus shares, buyback
of the Company's securities. It was created by transfer of amounts out of distributable profits.
(e) Share-based Payment Reserve
The share options-based payment reserve is used to recognise the grant date fair value of options issued
to employees under Employee stock option plan. [Refer Note 45]
(f) FVOCI equity instruments
The management has elected to recognise changes in the fair value of certain investments in equity securities
in other comprehensive income. These changes are accumulated within the FVOCI equity investments
reserve within equity. The management transfers amounts from this reserve to retained earnings when the
relevant equity securities are derecognised.
(g) Treasury Shares
These shares represents own equity shares held by Welspun Living Employees Welfare Trust (formerly known
as Welspun India Employees Welfare Trust)
The Shareholders of the Company, by resolutions passed by way of Postal Ballot, results of which were
declared on July 30, 2022, approved, inter alia, acquisition of equity shares by Welspun Living Employees
Welfare Trust for implementation of Welspun Living Employee Benefit Scheme - 2022. Welspun Living
Employees Welfare Trust ("Trust”) was formed with objects of welfare of employees of the Company and
subsidiaries, inter alia, by way of acquiring, holding and allocating equity shares of the Company to eligible
employees by way of stock options. By March 31, 2025, the Trust has acquired cumulative equity shares
97,68,566 of the Company for a total acquisition cost of ? 74.71 crores.
The Trust is holding 56,68,566 unappropriated shares which were required to be disposed off pursuant to
SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 by or before March 31, 2025. The
Company has applied to SEBI seeking extension of date of disposal of such shares and is awaiting further
directions from SEBI.
(h) Hedging Reserve
The Company uses hedging instruments as part of its management of foreign currency risk associated with its
highly probable forecast sale and inventory purchases and interest rate risk associated with variable interest
rate borrowings as described within note 26. For hedging foreign currency risk, the company uses foreign
currency forward contracts and foreign currency option contracts, both of which are designated as cash
flow hedges.To the extent these hedges are effective; the change in fair value of the hedging instrument
is recognised in the cash flow hedging reserve. Amounts recognised in the cash flow hedging reserve is
reclassified to profit or loss when the hedged item affects profit or loss (e.g. sales and interest payments).
When the forecast transaction results in the recognition of a non-financial asset (e.g. inventory), the amount
recognised in the cash flow hedging reserve is adjusted against the carrying amount of the nonfinancial asset.
The Company designates the spot component of foreign currency forward contracts and the intrinsic value
of foreign currency option contracts as hedging instruments in cash flow hedge relationships. The company
defers changes in the forward element of foreign currency forward contracts and the time value element
of foreign currency option contracts in the costs of hedging reserve. The deferred costs of hedging are
included in the initial cost of the related inventory when it is recognised or reclassified to profit or loss when
the hedged item affects profit or loss.
(i) Retained earnings
Retained earnings are the profits/(loss) that the Company has earned/incurred till date, less any transfers
to general reserve, dividends or other distributions paid to shareholders. Retained earnings include re¬
measurement loss / (gain) on defined benefit plans, net of taxes that will not be reclassified to Statement of
Profit and Loss.
The carrying amount of trade receivable, current loans, current portion of interest accrued on fixed deposit,
bonds and certificates, cash and cash equivalents, bank balances other than cash and cash equivalents,
trade payable, capital creditors, current security deposits (liability) and other current financial liabilities
are considered to be approximately same as their fair value, due to their short-term nature and have been
classified as level 3 in the fair value hierarchy. Similarly, carrying values of government grants, TUF and
incentive and interest subvention due to it sovereign nature and expected collection term are considered to
approximate their fair value and have been classified as level 3 in the fair value hierarchy.
The fair value for loans, security deposits, advance recoverable in cash, fixed deposit with bank, interest
accrued on fixed deposit and investments in preference shares is calculated based on cash flows discounted
using a current lending rates. Further, security deposits, advance recoverable in cash and investments
in preference share are classified as level 3 fair value in the fair value hierarchy due to the inclusion of
unobservable inputs including counterparty credit risk.
The fair value for long term security deposits are based on discounted cash flow using a current borrowing
rate. They are classified as level 3 fair value in the fair value hierarchy due to the use of unobservable inputs,
including own credit risk.
The carrying amount of long term borrowings is approximately equal to it's fair value since the borrowings
are at floating rate of interest. Also, the carrying amount of short term borrowing is considered to be
approximately same as it's fair value due to it's short term nature.
For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the
fair values.
(ii) Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial
instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for
which fair values are disclosed in the standalone financial statements. To provide an indication about the
reliability of the inputs used in determining fair value, the company has classified its financial instruments into
the three levels prescribed under the accounting standard. An explanation of each level follows underneath
the table.
Assets and Liabilities that are disclosed at Amortised Cost for which Fair values are
disclosed and are classified as Level 3
Current financial asset and current financial liabilities have fair values that approximate to their carrying
amounts due to their short-term nature. Non current financial assets and non current financial liabilities
have fair values that approximate to their carrying amounts as it is based on the net present value of the
anticipated future cash flows.
The above mentioned grouping into Level 1 to Level 3, is described below.
Level 1: This hierarchy includes financial instruments measured using quoted prices. This includes listed
equity instruments, exchange traded funds and mutual funds that have quoted price. The fair value of all
equity instruments which are traded in the stock exchanges is valued using the closing price as at the
reporting period.
Level 2: The fair value of financial instruments that are not traded in an active market (such as traded bonds,
debentures, government securities and commercial papers) is determined using Fixed Income Money Market
and Derivatives Association of India (FIMMDA) inputs and valuation techniques which maximise the use of
observable market data and rely as little as possible on entity-specific estimates. If all significant inputs
required to fair value an instrument are observable, the instrument is included in level 2. The mutual funds
are valued using the closing Net Assets Value (NAV). NAV represents the price at which the issuer will issue
further units and will redeem such units of mutual fund to and from the investors.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is
included in level 3. This is the case for unlisted preference shares and security deposits included in level 3.
There are no internal transfers of financial assets and financial liabilities between Level 1, Level 2 and Level 3
during the period. The Company's policy is to recognise transfers into and transfers out of fair value hierarchy
level as at the end of reporting period.
iii) Valuation technique used to determine fair value:
Specific valuation techniques used to value financial instruments include:
• the use of quoted market prices or dealer quotes for similar instruments
• NAV quoted by mutual funds
• the fair value of forward foreign exchange contracts is determined using forward exchange rates at the
balance sheet date
• the fair value of the remaining financial instruments is determined using discounted cash flow analysis.
(iv) Fair value measurements using significant unobservable inputs (level 3) for FVPL
instruments
The following table presents the changes in level 3 items for the periods ended March 31, 2025 and
March 31, 2024:
vi) Valuation processes :
The finance department of the Company includes a team that performs the valuations of financial assets and
liabilities required for financial reporting purposes, including level 3 fair values. This team reports directly to
the chief financial officer (CFO).
Discussions of valuation processes and results are held between the CFO, and the valuation team meets
once every three months, in line with the Company's quarterly reporting periods.
The main level 3 inputs for preference shares used by the Company are derived and evaluated as follows:
• Discount rates are determined using a capital asset pricing model to calculate a pre-tax rate that reflects
current market assessments of the time value of money and the risk specific to the asset.
• Risk adjustments specific to the counterparties (including assumptions about credit default rates) are
derived from credit risk grading determined by the Company's internal credit risk management team.
• Earnings growth factor for unlisted equity securities are estimated based on market information for
similar types of companies.
Changes in level 2 and 3 fair values are analysed at the end of each reporting period during the quarterly
valuation discussion between the CFO and the valuation team. As part of this discussion the team presents
a report that explains the reason for the fair value movements.
Note 26 : Financial Risk Management
The Company's principal financial liabilities, other than derivatives, comprise loans and borrowings, trade
payables, and financial guarantee contracts. The main purpose of these financial liabilities is to finance the
Company's operations and to provide guarantees to support its operations. The Company's principal financial
assets include loans, trade receivables, and cash and cash equivalents that derive directly from its operations.
The Company also holds investments in debt and equity instruments and enters into derivative transactions.
The Company is exposed to market risk, credit risk and liquidity risk. The Company's senior management oversees
the management of these risks. The Company's senior management is supported by a financial risk committee
that advises on financial risks and the appropriate financial risk governance framework for the Company. The
financial risk committee provides assurance to the Company's senior management that the Company's financial
risk activities are governed by appropriate policies and procedures and that financial risks are identified,
measured and managed in accordance with the Company's policies and risk objectives. All derivative activities
for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and
supervision. It is the Company's policy that no trading in derivatives for speculative purposes may be undertaken.
The Company's risk management is carried out by a central treasury department under policies approved
by the Board of Directors. Company's treasury team identifies, evaluates and hedges financial risks in close
cooperation with the Company's respective department heads. The Board provides written principles for overall
risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk,
credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of
excess liquidity.
(A) Credit risk
Credit risk arises from cash and cash equivalents, investments carried at amortised cost and deposits
with banks and financial institutions, as well as credit exposures to wholesale customers including
outstanding receivables.
(i) Credit Risk Management
Credit risk is the risk that counterparty will not meet its obligation under a financial instrument or customer
contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities
(primarily trade receivables) and from its financing activities, including deposits with bank and financial
institution, foreign exchange transactions and other financial instruments. The Company only deals with
parties which has good credit rating/ worthiness given by external rating agencies or based on Company's
internal assessment.
The Company determines default by considering the business environment in which the Company operates
and other macro-economic factors. 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 a default occurring on the asset as at the reporting date with the risk of default as at the date of initial
recognition. It considers reasonable and supportive forwarding-looking information such as:
i) Actual or expected significant adverse changes in business;
ii) Actual or expected significant changes in the operating results of the counterparty;
iii) Financial or economic conditions that are expected to cause a significant change to the counterparty's
ability to meet its obligations;
iv) Significant increase in credit risk on other financial instruments of the same counterparty;
v) Significant changes in the value of the collateral supporting the obligation or in the quality of the third-
party guarantees.
Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing
to engage in a repayment plan with the company.
Trade Receivable
Trade receivables are typically unsecured and are derived from revenue earned from customers. Credit risk
has been managed by the Company through credit approvals, establishing credit limits and continuously
monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course
of business. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess
the impairment loss or gain. The Company uses a provision matrix and forward-looking information and an
assessment of the credit risk over the expected life of the financial asset to compute the expected credit
loss allowance for trade receivables.
Concentrations of credit risk with respect to trade receivables are limited, due to major customers being
subsidiaries of the Company which in turn have a large and diverse customer base. No companies (other
than the Group Companies) contributed for 10% or more of the revenue in any of the years presented.
Expected credit loss for trade receivables as at March 31, 2025 is 1.47 crores (March 31, 2024:
? 1.43 crores)
The Company does not expect to receive future cash flows or recoveries from collection of cash flows
previously written off.
Other financial assets
The Company maintains exposure in cash and cash equivalents, term deposits with banks, Derivative
financial instruments, investments in government securities and bonds, and investments in mutual funds.
The Company has diversified portfolio of investment with various number of counter-parties which have good
credit ratings, good reputation, good past track records and reviews and hence the risk is reduced. Individual
risk limits are set for each counter-party based on financial position, credit rating and past experience. Credit
limits and concentration of exposures are actively monitored by the Company.
(B) Liquidity Risk
Liquidity risk refers to the risk that the Company will encounter difficulty in meeting obligations associated
with financial liabilities that are settled by delivering cash or other financial assets. The Company manages
liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by
continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial
assets and liabilities.
Note 27 : Capital management
(a) Risk Management
The Company's objectives when managing capital is to safeguard continuity, maintain a strong credit rating
and healthy capital ratios in order to support its business and provide adequate return to shareholders
through continuing growth. The Company's overall strategy remains unchanged from previous year.
The Company sets the amount of capital required on the basis of annual business and long-term operating
plans which include capital and other strategic investments.
The funding requirements are met through a mixture of equity, internal fund generation and other long
term borrowings. The Company's policy is to use short-term and long-term borrowings to meet anticipated
funding requirements.
The Company monitors capital on the basis of the net debt to equity ratio. The Company is not subject to
any externally imposed capital requirements.
Net debt are long term and short term debts as reduced by cash and cash equivalents. Equity comprises of
all components including other equity.
The Company's strategy is to maintain a gearing ratio within 2:1. The gearing ratios were as follows:
The following table summarizes the capital of the Company:
(ii) Terms and conditions:
(a) Sales of goods including services
The sales to related parties are made on terms equivalent to those that prevail in arm's length transactions
and in the ordinary course of business. Sales transactions are based on prevailing price lists and
memorandum of understanding/agreements signed with related parties. For the year ended March
31, 2025, the Company has not recorded any impairment of receivables relating to amounts owed by
related parties.
(b) Purchase of goods
The purchases from related parties (including services) are made on terms equivalent to those that
prevail in arm's length transactions and in the ordinary course of business. Purchase transactions are
made on normal commercial terms and conditions and market rates.
(c) Loans to subsidiaries
The Company had given loans to a subsidiary for general corporate purposes. The terms of loan including
interest rate are at arm's length. The loan has been utilized by the subsidiary for the purpose it was
obtained. For the year ended March 31, 2025, the Company has not recorded any impairment on loans
due from the subsidiary.
(d) Guarantees to subsidiaries
Guarantees provided to the lenders of the subsidiaries are for availing term loans and working capital
facilities from the lender banks. The Company recovers corporate guarantee commission from the
subsidiaries are at terms equivalent to these that prevailing at arm's length transactions of the guarantee
provided on their behalf. These transactions are in the ordinary course of business.
The transactions with related parties other than mentioned above are also made on terms equivalent
to those that prevail in arm's length transactions. Outstanding balances at the year-end are unsecured
and settlement occurs in cash.
Note 34 : Buy-back of equity shares
The Company had made an offer for buy-back of fully paid-up equity shares of ? 1 each of the Company, at
a price ? 220 per equity share (maximum buy-back price) and for an amount of ? 278.44 crore (maximum
buy-back size) by way of tender offer in accordance with the provisions contained in the SEBI (Buy-back of
Securities) Regulations, 2018 and the Companies Act, 2013 and rules made thereunder. The tendering period
for the buy back offer commenced on August 09, 2024 and ended on August 16, 2024. The Company bought
back 1,26,55,970 equity shares at a price of ? 220 per equity share and total amount utilised in buy-back was
? 278.43 crore. The settlement of bids by the Clearing Corporation on the stock exchange was completed on
August 23, 2024. Accordingly, equity share capital has reduced by ? 1.27 crore and the premium on buy-back,
its related expenses and tax on buy-back of ?277.16 crores, ? 2.55 crores and ? 64.57 crores respectively have
been adjusted against retained earnings.
In Previous year, The Company had made an offer for buy-back of fully paid-up equity shares of ? 1 each of the
Company, at a price of ? 120 per equity share (maximum buy-back price) and for an amount of ? 195.00 crore
(maximum buy-back size) by way of tender offer in accordance with the provisions contained in the SEBI (Buy¬
Back of Securities) Regulations, 2018 and the companies Act, 2013 and rules made thereunder. The tendering
period for the buy back offer commenced on May 16, 2023 and ended on May 22, 2023. The Company bought
back 1,62,50,000 equity shares at a price of ? 120 per equity share and total amount utilised in buy-back was
? 195.00 crores. The settlement of bids by the Clearing Corporation on the stock exchange was completed on
May 29, 2023. Accordingly, the equity share capital was reduced by ? 1.63 crores and the premium on buy-back
of ? 193.37 crores was adjusted against securities premium account ? 122.18 crore and retained earnings ? 71.19
crore. Consequently the company has transferred an amount of ? 1.63 crores being the nominal value of share
purchased from securities premium reserve to capital redemption reserve as per the requirement of section
69 of the Companies Act 2013. Further, expenses related to buy back of ? 1.68 crores and tax on buy back of
? 45.05 crores has been debited to retained earnings.
The Company had total cash outflows for leases of ? 15.11 crore in March 31, 2025 (? 10.65 crore in March 31,
2024). There are no non-cash additions to right-of-use assets and lease liabilities. There are no future cash
outflows relating to leases that have not yet commenced.
The Company has several lease contracts that include extension and termination options. These options are
negotiated by management to provide flexibility in managing the leased-asset portfolio and align with the
Company's business needs. Management exercises significant judgement in determining whether these extension
and termination options are reasonably certain to be exercised.
Company as lessor
The Company has entered in to lease agreement with Welspun Captive Power Generation Limited in respect of
Boiler. This is accounted as finance lease as the material risks and rewards are transferred to the lessee.
The effective interest rate contracted is Nil (FY 2023-24: 7.35%).
The following amounts are included in the Balance Sheet:
Note 45 : Share Based Payments
On July 31, 2021 and November 26, 2021, Nomination and Remuneration Committee of the company made
grants of 30,00,000 and 300,000 stock options ("ESOPs") respectively, under Welspun Living Limited Employee
Stock Option Scheme "WELSOP 2005" (formerly Welspun India Limited Employee Stock Option Scheme WELSOP
2005) representing an equal number of equity shares of face value of ? 1 each in the Company, at an exercise
price (closing market price on date of grants) to certain employees of the Company and certain employees / non¬
independent directors of the subsidiaries. The salient features of the Scheme are as under:
(i) Vesting: Options to vest over a period of four years from the date of their grants as under
- 20% of the Options granted to vest at each of the 1st and 2nd anniversaries of the date of grant.
- 30% of the Options granted to vest at each of the 3rd and 4th anniversaries of the date of grant.
(ii) Exercise: Options vested with an employee will be exercisable within 3 years from the date of their vesting
by subscribing to the number of equity shares in the ratio of one equity share for every option at the Exercise
Price. In the event of cessation of employment due to death, resignation or otherwise, the Options may lapse
or be exercisable in the manner specifically provided for in the Scheme.
(iii) Method Used: The Fair value of Equity-settled share-based payment are estimated using Black-Scholes-
Merton formula.
On April 22, 2024 and June 26, 2024, Nomination and Remuneration Committee of the company made
grants of 4,000,000 and 500,000 stock options (ESOPs) respectively, under Welspun Living Employee
Benefit Scheme-2022 (Scheme) representing an equal number of equity shares of face value of ? 1 each
of the Company, at an exercise price of ? 100 to certain employees and directors of the Company and its
subsidiaries. The salient features of the Scheme are as under:
(i) Vesting: Options to vest over a period of four years from the date of their grants as under
- 25% of the Options granted to vest at each of the 1st , 2nd ,3rd and 4thanniversaries of the date of grant.
(ii) Exercise: Options vested with an employee will be exercisable within four years from the date of their vesting
by subscribing to the number of equity shares in the ratio of one equity share for every option at the Exercise
Price. In the event of cessation of employment due to death, resignation or otherwise, the Options may lapse
or be exercisable in the manner specifically provided for in the Scheme.
(iii) Method Used: The Fair value of Equity-settled share-based payment are estimated using Black-Scholes-
Merton formula.
The expense recognised for employee services received during the year is shown in the following table:
The inputs to the model include the share price at date of grant, exercise price, expected volatility, expected
dividends, expected term and the risk free rate of interest. The expected term of the share options and SARs
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 necessarily be the actual outcome.
Note 46 : Significant accounting judgements, estimates and assumptions:
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom
equal the actual results. Management also needs to exercise judgement in applying the Company's accounting
policies. This note provides an overview of the areas that involved a higher degree of judgement or complexity,
and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be
different than those originally assessed. Detailed information about each of these estimates and judgements is
included in relevant notes together with information about the basis of calculation for each affected line item in
the standalone financial statements.
Critical estimates and judgements
a) Current tax expense and deferred tax
The calculation of the Company's tax charge necessarily involves a degree of estimation and judgement in
respect of certain items whose tax treatment cannot be finally determined until resolution has been reached
with the relevant tax authority or, as appropriate, through a formal legal process. The final resolution of some
of these items may give rise to material profits/losses and/or cash flows. Significant judgments are involved
in determining the provision for income taxes, including amount expected to be paid/recovered for uncertain
tax positions (refer note 24).
Uncertain tax position and tax related contingency
The Company has taken certain tax positions particularly those relating to deductions / allowance under
Section 80 IA and Section 36(1)(iii) of the Income Tax Act, 1961 by the Company. The taxation authorities may
challenge these tax deductions and accordingly these matters are / might be subject to legal proceedings in
the ordinary course of business. The outcome of the legal proceedings might be different from that estimated
on the date of approval of these standalone IndAS financial statements.
b) Provisions & Contingent Liabilities
The Company exercises judgement in measuring and recognising provisions and the exposures to contingent
liabilities which is related to pending litigation or other outstanding claims. Judgement is necessary in
assessing the likelihood that a pending claim will succeed, or a liability will arise, and to quantify the possible
range of the financial settlement. Because of the inherent uncertainty in this evaluation process, actual
liability may be different from the originally estimated as provision (refer note 30).
c) Provision / Liability
A provision / liability is a present obligation of the entity arising from past events, the settlement of which
is expected to result in an outflow from the entity of resources embodying economic benefits that can be
reasonably estimated. Estimation involves judgements based on the latest available, reliable information.
An estimate may need revision if changes occur in the circumstances on which the estimate was based or
as a result of new information or more experience. The Company actualises the provision / liability when the
invoices are received and the resultant income / expense are recognised in the statement of the profit and
loss. The Company also periodically reviews the provision / liability which are no longer required and the
same are reversed and recognised as an income in the statement of profit and loss.
d) Useful life of Property, Plant and Equipment and Intangible assets
Property, Plant and Equipment represent a significant proportion of the asset base of the Company. The
charge in respect of periodic depreciation (for property, plant and equipment and intangible assets) 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 values of Company's assets are determined by management at the time
the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on
historical experience with similar assets as well as anticipation of future events, which may impact their life,
such as changes in technology. For the relative size of the Company's property, plant and equipment and
intangible assets (refer Notes 3 and 4).
e) Provision for Inventory
The Company writes down inventories to net realisable value based on an estimate of the realisability of
inventories. Write downs on inventories are recorded where events or changes in circumstances indicate
that the balances may not realised. The identification of write-downs requires the use of estimates of net
selling prices, age and condition / quality of the down-graded inventories. Where the expectation is different
from the original estimate, such difference will impact the carrying value of inventories and write-downs of
inventories in the periods in which such estimate has been changed. Refer note 9 for details of inventory
and provisions.
f) Impairment for Investments in Subsidiaries
To test the impairment of investment of subsidiaries, market related information and estimates are used to
determine the recoverable amount. Key assumptions on which management has based its determination of
recoverable amount include estimated long term growth rates (including perpetuity growth rate), discount
rate, identification of a cash generating unit and estimated operating margins. Cash flow projections take into
account past experience and represent management's best estimate about future developments. Changes
in the assumptions selected by management could significantly affect the Company's impairment evaluation
and hence results.
g) Defined Benefit Obligation
The present value of the defined benefit obligations depends on a number of factors that are determined on
an actuarial basis using a number of assumptions. The assumptions used in determining the net cost (income)
for post employments plans include the discount rate. Any changes in these assumptions will impact the
carrying amount of such obligations.
The Company determines the appropriate discount rate at the end of each year. This is the interest rate that
should be used to determine the present value of estimated future cash outflows expected to be required to
settle the defined benefit obligations. In determining the appropriate discount rate, the Company considers
the interest rates of government bonds of maturity approximating the terms of the related plan liability. Refer
note 20 for the details of the assumptions used in estimating the defined benefit obligation.
h) Government Grants
The Company has accrued income for Government grant related to fixed assets, in the ratio of related
expenses, based on eligibility amount. Critical judgement is involved in determining whether the Company
has fulfilled the conditions related to the grant. Estimates are involved in calculation of grant income where
the Company is complying with all the terms and conditions of the grant and an application has been made to
the government and the eligibility certificate/approval of grant is awaited. Further, key assumptions used in
calculation of government grant to be recognised as revenue, receivables and deferred income include, the
future sales growth rate, mix of inter and intra state purchases and corresponding input tax credit, utilisation
of input tax credit, indirect tax rates on the products, period of eligibility etc. Changes in the assumptions
selected by the management could significantly affect the recognition of revenue, receivables and deferred
income related to such government grants.
i) Fair value of Financial Instruments
The fair value of financial instruments that are not traded in an active market is determined using valuation
techniques. The Management uses its judgement to select a variety of methods and make assumptions
that are mainly based on market conditions existing at the end of each reporting period. The key judgement
includes selection of valuation methodology and key assumptions include the discount rates etc. Changes
to the valuation methodology, discount rates etc. could have a significant impact on the valuation of these
financial instruments (Refer note 25 and 26).
j) Ind AS 115 - Revenue from Contracts with Customers
Ind AS 115 applies, with limited exceptions, to all revenue arising from contracts with its customers. Ind AS
115 establishes a five-step model to account for revenue arising from contracts with customers and requires
that revenue be recognised at an amount that reflects the consideration to which an entity expects to be
entitled in exchange for transferring goods or services to a customer.
Ind AS 115 requires entities to exercise judgement, taking into consideration all of the relevant facts and
circumstances when applying each step of the model to contracts with their customers. The standard also
specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to
fulfilling a contract. In addition, the standard requires extensive disclosures.
k) Determination of control/significant influence
Significant management judgement is involved in determining whether the Company has control/ significant
influence over another entity in which investment has been made by the Company. The judgement affects the
determination of whether an entity is a subsidiary / associate and consequently required to be consolidated
in the consolidated financial statements of the Company or not consolidated and required to be carried
at fair value through profit or loss account / other comprehensive income or at amortised cost. Refer note
5 & 6(a).
l) 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 or when
they need to be adjusted to reflect the terms and conditions of the lease. The Company estimates the IBR
using observable inputs (such as market interest rates) when available.
The Company determines the lease term as the non-cancellable term of the lease, together with any periods
covered by an option to extend the lease if it is reasonably certain to be exercised, or 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.
Note 47 (a) : Other Statutory Information
1. The Company does not have any Benami property, where any proceeding has been initiated or pending
against the Company for holding any Benami property.
2. The following table depicts the details of balances outstanding in respect of transactions undertaken with
a company struck-off under section 248 of the Companies Act, 2013:
3. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.
4. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
5. 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
6. 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
7. The Company does not have any such transaction which is not recorded in the books of accounts that has
been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act,
1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961)
8. The Company has not been declared wilful defaulter by any bank or financial institution or other lender.
Note 47 (b) : Audit trail feature and back-up of books of accounts
(i) The Company is maintaining proper books of accounts as required by the law and the back up of books
of accounts is performed on daily basis on server located in India. However, necessary evidence of daily
back-up from April 1, 2024 to October 15, 2024 in case of one supporting software is not available with
the Company.
(ii) The Company has used accounting software(s) 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 for certain changes
made using certain privileged access rights to underlying database. Further no instance of audit trail feature
being tampered with was noted in respect of accounting software(s) where the audit trail has been enabled.
Additionally, the audit trail has been preserved as per the statutory requirements for record retention to the
extent it was enabled and recorded in the respective years.
Note 48 : Amalgamation of Anjar integrated Textile Park Developers Private
Limited (AITPDPL), Anjar Terry Towels Limited (ATTL), Besa Developers and
Infrastructure Private Limited (BESA), Welspun Zucchi Textiles Limited (WZTL),
Welspun Flooring Limited (WFL) (wholly owned subsidiary companies ("WOS")
with the Company.
The Board of Directors of the Company, at its meeting held on July 31, 2023, approved the Scheme of Amalgamation
under section 230 to 232 of the Companies Act, 2013 providing for amalgamation of Anjar integrated Textile
Park Developers Private Limited, Anjar Terry Towels Limited, Besa Developers and Infrastructure Private Limited,
Welspun Zucchi Textiles Limited and Welspun Flooring Limited, wholly owned subsidiaries of the Company with
the Company with effect from appointed date of April 01, 2023.
The amalgamating companies are engaged in the business as given below:
Anjar integrated Textile Park Developers Private Limited is engaged in the business of development of textile park,
Anjar Terry Towels Limited is engaged in the business of manufacturing of textile products, Besa Developers and
Infrastructure Private Limited is engaged in the business of infrastructure development, Welspun Zucchi Textiles
Limited is engaged in the business of home textile and Welspun Flooring Limited is engaged in the business of
manufacturing and selling of Carpet Tiles, Stone Polymer Composite Tiles and other Flooring Solutions.
The Hon'ble National Company Law Tribunal, Hyderabad Bench vide order dated March 12, 2024, and the Hon'ble
National Company Law Tribunal, Ahmedabad Bench vide order dated April 09, 2024, have sanctioned the said
Scheme of Amalgamation. Accordingly, the said Scheme of Amalgamation has become effective from the date
of order of the Hon'ble National Company Law Tribunal, Ahmedabad Bench.
Further, pursuant to the Scheme of Amalgamation, the authorised share capital of the Company has been
increased to ? 417.79 Crores. (Previous Year : ? 155.55 Crores)
Amalgamation was a business combination under common control and hence accounted as per the "Pooling of
interest method” as prescribed in Appendix C of Ind AS 103: Business combinations.
As per our report of even date attached
For S R B C & CO LLP For and on behalf of the Board of Directors
Chartered Accountants
ICAI Firm's Registration No: 324982E/
E300003
per Jai Prakash Yadav Balkrishan Goenka Rajesh Mandawewala Dipali Goenka
Partner Chairman Executive Vice Chairman Managing Director and CEO
Membership No. 066943 DIN 00270175 DIN 00007179 DIN 00007199
Sanjay Gupta Shashikant Thorat
Chief Financial Officer Company Secretary
FCS - 6505
Place: Mumbai Place: Mumbai
Date: May 29, 2025 Date: May 29, 2025
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