2.12 Provisions and Contingent Liabilities
Provisions are recognized when the Company has a present obligation 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 when a reliable estimate of the
amount of the obligation can be made. Provisions are measured at the best estimate of the expenditure required to settle the
present obligation at the Balance Sheet date. The expenses relating to a provision is presented in the Statement of Profit and
Loss net of any reimbursement.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows
specific to the liability. The unwinding of the discount is recognised as finance cost.
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 the obligation or a reliable estimate of the amount cannot be made.
A contingent asset is not recognised but disclosed in the financial statements where an inflow of economic benefit is probable.
Capital Commitments includes the amount of purchase orders (net of advance) issued to parties for acquisition of assets.
Provisions, contingent assets, contingent liabilities and commitments are reviewed at each balance sheet date.
2.13 Revenue Recognition
Revenue from contracts with customers
As per provision of IND AS 115- ' Revenue from Contracts with Customer-' , revenue is recognised on transfer of control of
goods or services to a customer at an amount that reflects the consideration to which the Company is expected to be entitled
to in exchange for those goods or services. Revenue towards satisfaction of a performance obligation is measured at the
amount of transaction price (net of variable consideration) allocated to that performance obligation. The transaction price of
goods sold, and services rendered is net of variable consideration on account of discounts offered by the Company as part of
the contractual obligation. Revenue (net of variable consideration) is recognised only to the extent that it is highly probable
that the amount will not be subject to significant uncertainty regarding the amount of consideration that will be derived from
the sale of goods. The performance obligation in case of sale of goods is satisfied at a point in time i.e., when the material is
shipped to the customer or on delivery to the customer, as may be specified in the contract.
Sales are recognised when goods are supplied and control over the goods sold is transferred to the buyer which is on
dispatch / delivery as per the terms of contracts. Sales are net of returns, trade discounts, rebates and sales taxes / Goods
and Service Tax (GST).
Income from processing operations is recognised on completion of production / dispatch of the goods, as per the terms of
contract.
Other Operating Revenue
Dividend income is recognised when the right to receive the same is established, it is probable that the economic benefits
associated with the dividend will flow to the Company and the amount of dividend can be measured reliably.
Export Incentives are accrued when there is reasonable assurance that they will be received and the Company will comply
with the conditions associated with such incentives.
Income on assets given on operating lease is recognised on a straight line basis over the lease term in the Statement of Profit
and Loss.
Other Income
For all financial instruments measured at amortised cost, interest income is recorded using the effective interest rate (EIR),
which is the rate that discounts the estimated future cash payments or receipts through the expected life of the financial
instruments or a shorter period, where appropriate, to the net carrying amount of the financial assets. Interest income is
included in other income in the Statement of Profit and Loss.
2.14 Employee Benefits
(i) Short-Term Employee Benefits
All employee benefits payable wholly within twelve months of rendering the service are classified as short term
employee benefits. Benefits such as salaries, performance incentives, etc., are recognized as an expense at the
undiscounted amount in the Statement of Profit and Loss of the year in which the employee renders the related service.
The Company has a scheme of Performance Linked Variable Remuneration (PLVR) which rewards its employees
based on Economic Value Added (EVA) or Profit Before Tax (PBT) and Cashflow. The PLVR amount is related to actual
improvement made in EVA or PBT and Cashflow over the previous year when compared with expected improvements.
(ii) Post Employment Benefits
(a) Defined Contribution Plans
Payments made to a defined contribution plan such as Provident Fund and Family Pension maintained with
Regional Provident Fund Office are charged as an expense in the Statement of Profit and Loss as they fall due.
(b) Defined Benefit Plans
Gratuity Fund
The Company's net obligation in respect of defined benefit plans is calculated separately for each plan by
estimating the amount of future benefit that employees have earned in the current and prior periods, after
discounting the same. The calculation of defined benefit obligations is performed annually by a qualified actuary
using the projected unit credit method. Re-measurement of the net defined benefit liability, which comprise
actuarial gains and losses are recognized immediately in Other Comprehensive Income (OCI). Net interest
expense (income) on the net defined liability (assets) is computed by applying the discount rate, used to measure
the net defined liability (asset). Net interest expense and other expenses related to defined benefit plans are
recognized in Statement of Profit and Loss. When the benefits of a plan are changed or when a plan is curtailed,
the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized
immediately in Statement of Profit and Loss. The Company recognizes gains and losses on the settlement of a
defined benefit plan when the settlement occurs.
Provident Fund
Provident Fund Contributions other than those made to the Regional Provident Fund Office of the Government
which are made to the Trust administered by the Company are considered as Defined Benefit Plans. The interest
rate payable to the members of the Trust shall not be lower than the statutory rate of interest declared by the
Central Government under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall,
if any which is determined on the basis of an actuarial valuation, shall be made good by the Company.
The calculation of defined benefit obligations is performed at each reporting period by a qualified actuary
using the projected unit credit method. When the calculation results in a potential asset for the Company, the
recognised asset is limited to the present value of economic benefits available in the form of any future refunds
from the plan or reductions in future contributions to the plan. To calculate the present value of economic
benefits, consideration is given to any applicable minimum funding requirements.
Pension
Pension plan for eligible employees are considered as defined benefit obligations and are provided for on the
basis of an actuarial valuation, using the Projected Unit Credit Method, as at the date of the Balance Sheet.
(iii) Other Long-Term Employee Benefits
The Company's net obligation in respect of other long-term employee benefits is the amount of future benefit that
employees have earned in return for their service in the current and prior periods and are provided for on the basis of
an actuarial valuation, using the Projected Unit Credit Method, as at the date of the Balance Sheet. Remeasurement of
net obligation are recognised immediately in the Statement of Profit and Loss.
(iv) Termination Benefits
All terminal benefits are recognized as an expense in the period in which they are incurred.
2.15 Share-Based Payments
Employees of the Company also receive remuneration in the form of share based payments in consideration of the services
rendered.
Under the equity settled share based payment, the fair value on the grant date of the awards given to employees is recognised
as 'employee benefit expenses' with a corresponding increase in equity over the vesting period. The fair value of the options
at the grant date is calculated on the basis of the Black Scholes model. At the end of each reporting period, apart from the non
market vesting condition, the expense is reviewed and adjusted to reflect changes to the level of options expected to vest.
When the options are exercised, the Company issues fresh equity shares.
When the terms of an equity-settled award are modified, an additional expense is recognised for any modification that
increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee as measured
at the date of modification.
2.16 Leases
Effective 1st April, 2019, the company adopted IND AS 116 - Leases.
At the inception it is assessed, whether a contract is a lease or contains a lease. A contract is a lease or contains a lease if it
conveys the right to control the use of an identified asset, for a period of time, in exchange for consideration.
To assess whether a contract conveys the right to control the use of an identified asset, company assesses whether the
contract involves the use of an identified asset. Use may be specified explicitly or implicitly.
(i) Use should be physically distinct or represent substantially all of the capacity of a physically distinct asset.
(ii) If the supplier has a substantive substitution right, then the asset is not identified.
(iii) Company has the right to obtain substantially all of the economic benefits from use of the asset throughout the period
of use.
(iv) Company has the right to direct the use of the asset.
(v) In cases where the usage of the asset is predetermined the right to direct the use of the asset is determined when the
company has the right to use the asset or the Company designed the asset in a way that predetermines how and for
what purpose it will be used.
At the commencement or modification of a contract, that contains a lease component, company allocates the consideration
in the contract, to each lease component, on the basis of its relative standalone prices. For leases of property, it is elected not
to separate non-lease components and account for the lease and non-lease components as a single lease component.
As a Lessee:
Company recognizes a right-of-use asset and a lease liability at the lease commencement date.
Right-of-use asset (ROU):
The right-of-use asset is initially measured at cost. Cost comprises of the initial amount of the lease liability adjusted for any
lease payments made at or before the commencement date, any initial direct costs incurred by the lessee, an estimate of costs
to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located less any lease
incentives received.
After the commencement date, a lessee shall measure the right-of-use asset applying cost model, which is Cost less any
accumulated depreciation and any accumulated impairment losses and also adjusted for certain re-measurements of the
lease liability.
Right-of-use asset is depreciated using straight-line method from the commencement date to the earlier of end of the useful
life of the ROU asset or the end of the lease term. If the lease transfers the ownership of the underlying asset to the Company
at the earlier of the useful life of the ROU asset or the end of the lease term or/if the cost of the right-of-use asset reflects
that the Company will exercise the purchase option, ROU will be depreciated from the commencement date to the end of the
useful life of the underlying asset.
Lease liability:
Lease liability is initially measured at the present value of lease payments that are not paid at the commencement date.
Discounting is done using the implicit interest rate in the lease, if that rate cannot be readily determined, then using company's
incremental borrowing rate. Incremental borrowing rate is determined based on entity's borrowing rate adjusted for terms of
the lease and type of the asset leased.
Lease payments included in the measurement of the lease liability comprises of fixed payments (including in substance fixed
payments), variable lease payments that depends on an index or a rate, initially measured using the index or rate at the
commencement date, amount expected to be payable under a residual value guarantee, the exercise price under a purchase
option that the company is reasonably certain to exercise, lease payments in an optional renewal period if the company
is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the company is
reasonably certain not to terminate early.
Lease liability is measured at amortised cost using the effective interest method. Lease liability is re-measured when there is a
change in the lease term, a change in its assessment of whether it will exercise a purchase, extension or termination option or
a revised in-substance fixed lease payment, a change in the amounts expected to be payable under a residual value guarantee
and a change in future lease payments arising from change in an index or rate.
When the lease liability is re-measured corresponding adjustment is made to the carrying amount of the right-of-use asset.
If the carrying amount of the right-of-use asset has been reduced to zero it will be recorded in statement of profit and loss.
Right-of-use asset is presented as a separate category under "Non-current assets” and lease liabilities are presented under
"Financial liabilities” in the balance sheet.
Company has elected not to recognise right-of-use assets and lease liabilities for short term leases. The lease payments
associated with these leases are recognised as an expense on a straight-line basis over the lease term."
Lessor:
At the commencement or modification of a contract, that contains a lease component, the Company allocates the
consideration in the contract, to each lease component, on the basis of its relative standalone prices.
At the inception of the lease, it is determined whether it is a finance lease or an operating lease. If the lease transfers
substantially all of the risks and rewards incidental to ownership of the underlying asset, then it is a financial lease, otherwise
it is an operating lease.
If the lease arrangement contains lease and non-lease components, then the consideration in the contract is allocated using
the principles of IND AS 115. The Company tests for the impairment losses at the year end. Payment received under operating
lease is recognised as income on straight line basis, over the lease term.
2.17 Research and Development Expenditure
Revenue expenditure on Research & Development is charged to the Statement of Profit and Loss of the year in which it is
incurred. Capital expenditure incurred during the year on Research & Development is included under additions to Property,
Plant and Equipment (PPE).
2.18 Borrowing Costs
Borrowing costs are interest and other costs that the Company incurs in connection with the borrowing of funds and is
measured with reference to the effective interest rate applicable to the respective borrowing. Borrowing costs that are
directly attributable to the acquisition of an asset that necessarily takes a substantial period of time to get ready for its
intended use are capitalised as part of the cost of that asset till the date it is put to use. Other borrowing costs are recognised
as an expense in the period in which they are incurred.
2.19 Foreign Exchange Transactions
(i) The standalone financial statements of the Company are presented in Indian Rupee (INR), which is the Company's
functional and presentation currency.
(ii) Transactions in foreign currency are recorded at exchange rates prevailing on the date of the transaction. Monetary
assets and liabilities denominated in foreign currency, remaining unsettled at the period end are translated at closing
rates. The difference in translation of monetary assets and liabilities and realised gains and losses on foreign currency
transactions are recognised in the Statement of Profit and Loss. Non-monetary items that are measured based on
historical cost in a foreign currency are translated at the exchange rate at the date of the transaction.
(iii) Realised gains or losses on cancellation of forward exchange contracts are recognised in the Standalone Statement of
Profit and Loss of the period in which they are cancelled.
2.20 Taxes on Income
Income tax expense comprises current and deferred tax and is recognized in the Statement of Profit and Loss except to the
extent that it relates to items recognized directly in equity or in OCI.
(i) Current Tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any
adjustment to the tax payable or receivable in respect of previous years. It is measured using tax rates enacted or
substantively enacted at the reporting date.
(ii) Deferred Tax
Deferred income tax is recognised using the balance sheet approach in respect of temporary differences arising
between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for
taxation purposes.
Deferred tax assets are recognized for unused tax losses, unused tax credits and deductible temporary differences to
the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax
assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related
tax benefit will be realized; such reductions are reversed when the probability of future taxable profits improves.
Unrecognized deferred tax assets are reassessed at each reporting date and recognized to the extent that it has become
probable that future taxable profits will be available against which they can be used.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse,
using tax rates enacted or substantively enacted at the reporting date.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the
Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred Tax assets and liabilities are offset only if:
a) the entity has a legally enforceable right to set off current tax assets against current tax liabilities; and
b) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority
on the same taxable entity.
2.21 Earnings Per Share
Basic Earnings per share is calculated by dividing the profit / (loss) for the period attributable to the equity shareholders by
the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings
per share, the profit / (loss) for the period attributable to the equity shareholders and the weighted average number of equity
shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
2.22 Business Combinations
Business combinations are accounted for using the acquisition accounting method as at the date of the acquisition, which is
the date at which control is transferred to the Company. The consideration transferred in the acquisition and the identifiable
assets acquired and liabilities assumed are recognised at fair values on their acquisition date. Goodwill is initially measured
at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling
interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed.
Notes:
1 There are no loans which have significant increase in credit risk.
2 The Company had advanced an amount of ' 10.33 crore under diverse loan-cum-pledge agreements to certain individuals who had pledged
certain equity shares as security. The Company enforced its security and lodged the shares for transfer in its name. The said transfer application
of the Company was rejected, and the Company had preferred an application to the Company Law Board (CLB) against rejection of the said
transfer application. The CLB rejected the application of the Company and advised the parties to approach the High Court. The Company filed an
appeal before the Hon'ble Bombay High Court against the order of the Company Law Board under section 10F of the Companies Act, which was
disposed with the direction that the transfer of shares be kept in abeyance till the pendency of the arbitration proceedings between the parties.
The Hon'ble Bombay High Court had by its order dated September 18, 2012, restrained the Company from inter alia, dealing, selling or creating
third party rights, etc. in the pledged shares and referred the matter to arbitration. The Company filed a Special Leave Petition (SLP) before the
Supreme Court against this interim order of the Hon'ble Bombay High Court which was dismissed by the Hon'ble Supreme Court. The Ld. Sole
Arbitrator, Justice (Retired), A.P. Shah on June 29, 2019 passed an Award ruling that the Company shall return all the pledged shares along with
the original loan-cum-pledge agreements and the power of attorneys executed by the said individuals in favour of the Company to the said
individuals upon the said individuals repaying an amount of ' 10.33 crores to the Company.
The Company has challenged this Award before the Hon'ble High Court of Bombay by way of Section 34 petition under the Arbitration &
Conciliation Act, 1996. The Hon'ble Bombay High Court by its Order dated September 13, 2019 has stayed the operation and execution of the said
Award dated June 29, 2019 till the final disposal of the said Section 34 Petition. The matter is pending for final hearing before the Hon'ble Bombay
High Court.
The management is confident of recovery of this amount as the underlying value of the said shares is substantially greater than the amount of loan
advanced. However, on a conservative basis, the Company has provided for the entire amount of ' 10.33 crore in the books of account.
3 Details of Loans under section 186 (4) of Companies Act, 2013.
B Nature and purpose of reserve
1 Capital Redemption Reserve : The Company recognised Capital Redemption Reserve on buyback of equity shares from its retained earnings.
2 Securities Premium Account : The amount received in excess of face value of the equity shares is recognised in Securities Premium Account.
In case of equity-settled share based payment transactions, the difference between fair value on grant date and nominal value of share is
accounted as securities premium reserve. This Reserve can be used only for the purposes specified in the Companies Act, 2013.
3 Capital Reserve : During amalgamation, the excess of net assets taken, over the cost of consideration paid is treated as capital reserve.
4 Employee Stock Grants Outstanding : The fair value of the equity-settled share based payment transactions with employees is recognised in
Statement of Profit and Loss with corresponding credit to Employee Stock Options Outstanding Account.
5 General Reserve : The Company has transferred a portion of the net profit of the Company before declaring dividend to general reserve pursuant
to the earlier provisions of Companies Act 1956. Mandatory transfer to general reserve is not required under the Companies Act 2013.
6 Retained Earnings : Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or
other distributions paid to shareholders. These are stated net of amount relating to Remeasurement of defined benefit plans.
b) The Company participates in a supplier finance arrangement under which its suppliers may elect to receive early payment of
their invoices from a bank. Under the arrangement, the bank agrees to pay amounts due to participating suppliers in respect of
invoices owed by the Company and the Company repays the bank at a later date. The principal purpose of this arrangement is to
facilitate efficient payment processing and provide the willing suppliers early payment terms, compared with the related invoice
payment due date.
The Company has not derecognised the original original trade payables/capital creditors relating to the arrangement because
neither a legal release was obtained nor was the original liability substantially modified on entering into the arrangement.
Notes:
1 The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required
and disclosed as Contingent Liabilities where applicable, in its financial statements. The Company does not expect the outcome of these
proceedings to have a materially adverse effect on its financial statements.
2 It is not practical for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective
proceedings as it is determinable only on receipt of judgements/decisions pending with various forums/authorities.
3 The Company had received a notice from a Lessor demanding differential rent amounting to ' 175.07 crore upto March 31, 2026, for certain
plots of land situated at Wadala. The Company had filed detailed replies denying any liability to pay such differential lease rental. Management
had obtained legal advice, basis which, the Company believes that it has a very strong case and accordingly, no provision for the same has been
made in the financial statements but has been considered as a Contingent Liability.
4 Detail of Guarantee given covered under section 186 (4) of the Companies Act, 2013 :
The Corporate surety bond of ' 31.65 crore ( previous year ' 31.65 crore) is in respect of refund received from excise authority for exempted
units (North East) of Godrej Consumer Products Limited, an Associate company.
1 DEFINED CONTRIBUTION PLAN
Provident Fund :
The contributions to the Provident Fund and Family Pension Fund of certain employees are made to a Government
administered Provident Fund and there are no further obligations beyond making such contribution.
2 DEFINED BENEFIT PLAN
Gratuity :
The Company participates in the Employees' Group Gratuity-cum-Life Assurance Scheme of ICICI Prudential Life Insurance Co. Ltd, HDFC
Standard Life Insurance Co. Ltd. and SBI Life Insurance Co. Ltd, a funded defined benefit plan for qualifying employees. Gratuity is payable to
all eligible employees on death or on separation / termination in terms of the provisions of the Payment of Gratuity (Amendment) Act, 1997,
or as per the Company's scheme whichever is more beneficial to the employees.
The liability for the Defined Benefit Plan is provided on the basis of a valuation, using the Projected Unit Credit Method, as at the Balance
Sheet date, carried out by an independent actuary.
Provident Fund :
The Company manages the Provident Fund plan through a Provident Fund Trust for a majority of its employees which is permitted under The
Employees' Provident Fund and Miscellaneous Provisions Act, 1952. The plan envisages contribution by the employer and employees and
guarantees interest at the rate notified by the Provident Fund authority. The contribution by employer and employee, together with interest,
are payable at the time of separation from service or retirement, whichever is earlier.
The Company has an obligation to fund any shortfall on the yield of the trust's investments over the administered interest rates on an annual
basis. These administered rates are determined annually predominantly considering the social rather than economic factors and the actual
return earned by the Company has been higher in the past years. The actuary has provided a valuation for provident fund liabilities on the
basis of guidance issued by Actuarial Society of India and based on the below provided assumptions there is no shortfall as at March 31, 2026.
The Company has Pension plan for eligible employees. The liability for the Defined Benefit Plan is provided on the basis of a valuation, using
the Projected Unit Credit Method, as at the Balance Sheet date, carried out by an independent actuary.
3 Basis Used to Determine Expected Rate of Return on Assets :
The expected return on plan assets of 7.23% p.a. (previous year 6.65%) has been considered based on the current investment pattern in
Government securities.
4 Amounts Recognised as Expense :
i) Defined Contribution Plan
Employer's Contribution to Provident Fund amounting to ' 8.07 crore (previous year ' 6.65 crore) has been included in Note 31
Employee Benefits Expenses
ii) Defined Benefit Plan
Gratuity cost amounting to ' 4.30 crore (previous year ' 3.10 crore) has been included in Note 31 Employee Benefits Expenses.
Employer's Contribution to Provident Fund amounting to ' NIL (previous year NIL) has been included in Note 31 Employee Benefits
Expenses.
Note 40 : Employee Stock Benefit Plans
1 Employee Stock Grant Scheme
(a) The Company had set up the Employees Stock Grant Scheme 2011 (ESGS) pursuant to the approval by the Shareholders at their Meeting
held on January 17, 2011.
(b) The ESGS Scheme is effective from April 1, 2011, (the "Effective Date") and shall continue to be in force until (i) its termination by the
Board or (ii) the date on which all of the shares to be vested under Employee Stock Grant Scheme 2011 have been vested in the Eligible
Employees and all restrictions on such Stock Grants awarded under the terms of ESGS Scheme, if any, have lapsed, whichever is earlier.
(c) The Scheme applies to the Eligible Employees who are in whole time employment of the Company or its Subsidiary Companies. The
entitlement of each employee would be decided by the Compensation Committee of the respective Company based on the employee's
performance, level, grade, etc.
(d) The total number of Stock Grants to be awarded under the ESGS Scheme are restricted to 25,00,000 (Twenty Five Lac) fully paid up
equity shares of the Company. Not more than 5,00,000 (Five Lac) fully paid up equity shares or 1% of the issued equity share capital at
the time of awarding the Stock Grant, whichever is lower, can be awarded to any one employee in any one year.
(e) The Stock Grants shall vest in the Eligible Employees pursuant to the ESGS Scheme in the proportion of 1/3rd at the end of each year
from the date on which the Stock Grants are awarded for a period of three consecutive years, or as may be determined by Compensation
Committee, subject to the condition that the Eligible Employee continues to be in employment of the Company or the Subsidiary
company as the case may be.
(f) The Eligible Employee shall exercise her / his right to acquire the shares vested in her / him all at one time within 1 month from the date
on which the shares vested in her / him or such other period as may be determined by the Compensation Committee.
(g) The Exercise Price of the shares has been fixed at Re 1 per share. The fair value of the employee share options has been measured using
the Black-Scholes Option Pricing Model and charged to the Statement of Profit and Loss. The value of the options is treated as a part of
employee compensation in the financial statements and is amortised over the vesting period.
Refer Note 2 sub note 2.8 to 2.9 for accounting policy on Financial Instruments.
The fair values of the financial assets and 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.
1 Accounting classification and fair values
Carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy, are as follows.
* The fair value in respect of the unquoted equity investments cannot be reliably estimated. The Company has currently measured them at net book
value as per the latest audited financial statements available.
The Fair value of cash and cash equivalents, other bank balances, trade receivables, trade payables approximated their carrying value largely due to
short term maturities of these instruments.
Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual
credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for expected losses of these receivables. Accordingly,
fair value of such instruments is not materially different from their carrying amounts.
2 Measurement of fair values
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or
indirectly.
Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
a. The fair values of investments in mutual fund units is based on the net asset value ('NAV') as stated by the issuers of these mutual fund
units in the published statements as at Balance Sheet date. NAV represents the price at which the issuer will issue further units of mutual
fund and the price at which issuers will redeem such units from the investors.
b. The Company uses the Discounted Cash Flow valuation technique (in relation to financial assets measured at amortised cost and fair
value through profit or loss) which involves determination of present value of expected receipt/ payment discounted using appropriate
discounting rates. The fair value so determined for financial asset measured at fair value through profit and loss are classified as Level 2.
c. The Company uses the discounted cash flow valuation technique (in relation to financial liabilities measured at amortised cost) which
involves determination of the present value of expected payments, discounted using bank rate. The fair value of non-convertible
debentures is valued using FIMMDA guidelines.
Note 43 : Financial Risk Management
1 Financial Risk Management objectives and policies
The Company's business activities are exposed to a variety of financial risks, namely Credit risk, Liquidity risk, Currency risk, Interest risks and
Commodity price risk. The Company's Senior Management has the overall responsibility for establishing and governing the Company's risk
management framework. The Company has constituted a Risk Management Committee, which is responsible for developing and monitoring
the Company's risk management policies. The committee reports regularly to the Board of Directors on its activities.
The Company's risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits
and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in
market conditions and the Company's activities.
The audit committee oversees how Management monitors compliance with the Company's risk management policies and procedures, and
reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its
oversight role by internal audit. Internal audit undertakes both regular and adhoc reviews of risk management controls and procedures, the
results of which are reported to the audit committee.
2 Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Company's receivables from customers and loans and advances and Bank balances and derivative
transactions.
The carrying amount of following financial assets represents the maximum credit exposure:
Trade receivables and loans and advances
The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which
it operates. Credit risk is managed 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.
The Company has a policy under which each new customer is analysed individually for creditworthiness before offering credit period and
delivery terms and conditions. The Company's export sales are backed by letters of credit and insured through Export Credit Guarantee
Corporation. The Company bifurcates the Domestic Customers into Large Corporates, Distributors and others for Credit monitoring.
The Company maintains adequate security deposits for sales made to its distributors. For other trade receivables, the Company individually
monitors the sanctioned credit limits as against the outstanding balances. Accordingly, the Company makes specific loss allowance against
such trade receivables wherever required and monitors the same at periodic intervals.
The Company monitors individual loans and advances given and makes any specific loss allowance wherever required.
Based on prior experience and an assessment of the current economic environment, Management believes there is no credit risk provision
required. Also Company does not have any significant concentration of credit risk.
The ageing analysis of trade receivables is disclosed in Note 11
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are
settled by delivering cash or another financial asset. The Company's approach to managing liquidity is to ensure, as far as possible, that it will
have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable
losses or risking damage to the Company's reputation.
Management monitors rolling forecasts of the Company's liquidity position on the basis of expected cash flows. This monitoring includes
financial ratios and takes into account the accessibility of cash and cash equivalents.
The Company has access to funds from debt markets through loan from banks, commercial papers, fixed deposits from public and other Debt
instruments. The Company invests its surplus funds in bank fixed deposits and debt based mutual funds.
Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates - will affect the Company's income or the
value of its holdings of financial instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign
currency receivables and payables and long term debt. The Company's exposure to market risk primarily related to foreign exchange rate
risk, interest rate risk and the market value of investments. The objective of market risk management is to manage and control market risk
exposures within acceptable parameters, while optimising the return.
4(i) Currency risk
The Company is exposed to currency risk on account of its Receivables for Exports and Payables for Imports in foreign currency. The functional
currency of the Company is Indian Rupee. The Company manages currency exposures within prescribed limits, through use of forward
exchange contracts. Foreign exchange transactions are covered with strict limits placed on the amount of uncovered exposure, if any, at any
point in time.
Sensitivity analysis
A reasonably possible strengthening / (weakening) of the Indian Rupee against the foreign currencies at March 31 would have affected
the measurement of financial instruments denominated in foreign currencies and affected equity and profit or loss by the amounts shown
below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and
purchases.
4(ii) 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. Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes
in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the
future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates.
The Management is responsible for the monitoring of the Company's interest rate position. Various variables are considered by the Management
in structuring the Company's borrowings to achieve a reasonable, competitive, cost of funding.
Exposure to interest rate risk
Company's interest rate risk arises from borrowings. The interest rate profile of the Company's interest-bearing financial instruments as
reported to the Management of the Company is as follows:
Fair value sensitivity analysis for fixed-rate instruments
The Company does not account for any fixed-rate financial assets or financial liabilities at fair value through profit or loss. Therefore, a change
in interest rates at the reporting date would not affect profit or loss.
Cash flow sensitivity analysis for variable-rate instruments
A reasonably possible change of 100 basis points in interest rate would have resulted in variation in the interest expense for the Company by
the amounts indicated in the table below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain
constant. This calculation also assumes that the change occurs at the balance sheet date and has been calculated based on risk exposures
outstanding as at that date. The year end balances are not necessarily representative of the average debt outstanding during the period.
4(iii) Commodity Price risk
The Company is exposed to commodity risks mainly due to price volatility in Palm oil derivatives and Rapeseed Oil. We enter into fixed price
contracts with suppliers and in certain cases, enter into back to back sale contract with customers. We periodically review the open exposure
of Raw material regularly.
Forward Contracts
The Company uses forward exchange contracts to hedge its foreign exchange exposure relating to the underlying transactions and firm
commitment in accordance with its forex policy as determined by its Forex Committee. The Company does not use foreign exchange forward
contracts for trading or speculation purposes.
Note 44 : Capital Management
For the purpose of the Company's capital management, capital includes issued capital and other equity reserves. The primary objective of the
Company's Capital Management is to maximise shareholders value. The Company manages its capital structure and makes adjustments in the light
of changes in economic environment and the requirements of the financial covenants.
The Company monitors capital using Adjusted net debt to equity ratio. For this purpose, adjusted net debt is defined as total debt less cash and bank
balances and current investments.
Note 47 : Ratios (continued)
Formulae used for Calculation of Key Ratios and Financial indicators:
Debt Equity Ratio (Gross) = Total Debt /Equity
(Net) Debt - Equity Ratio = DEBT [Borrowings (excluding Lease Liabilities accounted as per Ind AS 116) - Cash and Bank Balance (includes FD) -
Liquid Investments] / Equity
Debt Service Coverage Ratio = EBIDA / [Interest Expense Repayment of Long Term Borrowings during the period (netted off to the extent of Long
term Loans availed during the same period for the repayments)]
Interest Service Coverage Ratio = EBIDA / Interest Expense
EBIDA = Net Profit/(Loss) After Tax Interest Expense Depreciation and Amortisation Expenses Loss/(Profit) (net) on sale of Property, Plant and
Equipment
Current Ratio = Current Assets/Current Liabilities
Long term Debt to Working Capital = Non Current Borrowing / (Current assets-Current Liabilities)
Bad Debts to Accounts Receivable Ratio = Bad Debts/Accounts Receivable
Current Liability Ratio = Current Liabilities /Total Liabilities
Total Debt to Total Assets = (Non Current Borrowing Current Borrowing)/Total Assets
Debtors Turnover = Revenue from Operations / Average Trade Receivable
Inventory Turnover = (Cost of Materials Consumed Purchases of Stock in Trade Changes in Inventories of Finished Goods, Stock in Trade and
Work in Progress) / Average Inventory
Operating profit ratio = (Earnings before exceptional item, interest, taxes, depreciation, amortization expenses less Other Income)/ Revenue from
operations
Net Profit Margin = Profit/(Loss) for the period/ Revenue from Operations
Return on Equity Ratio= Net Profits after taxes /Average Shareholder's Equity
Trade payables turnover ratio = Net Credit Purchases / Average Trade Payables
Net capital turnover ratio = Net Sales/Working Capital
Return on capital employed (ROCE) =Earning before interest and taxes/Capital Employed
Capital Employed = Tangible Net worth Total Debt Deferred Tax Liabilities
Return on investment= Income generated from invested funds/ Average value of investments
* as working capital is negative Net Capital Turnover ratio has not been provided.
Note 48 : Utilisation of Borrowed Funds and Share Premium
a) To the best of our knowledge and belief, other than the details mentioned below, the Company has not advanced or loaned or invested (either
from borrowed funds or share premium or any other sources or kind of funds) to or in any other person(s) or entity(ies), including foreign
entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, 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
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
b) To the best of our knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign
entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, 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 provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
Note 49 : Struck off Companies
The Company did not have transaction or has balance outstanding with any Struck off Company for financial year 2025-26 or previous financial year
2024-25.
Note 50 : Dividend On Equity Shares
The Company has not declared or paid any dividend during the financial year 2025-26.
Note 51
The Company has presented segment information in the consolidated Ind-AS financial statements which are presented in the same financial
report. Accordingly, in terms of Ind AS 108 'Operating Segments', no disclosures related to segments are presented in these standalone financial
statements.
Note 52
Corporate Social Responsibility contribution required to be made as per provisions of Section 135 of the Companies Act, 2013 is NIL for the current
year and previous year.
Note 53
There are no significant subsequent events that would require adjustments or disclosures in these standalone financial statements as on the Balance
Sheet date.
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