xi. Provisions and contingent liabilities
Provisions are recognised when the Company
has a present obligation (legal or constructive)
as a result of a past event, it is probable
that an outflow of economic benefits will be
required to settle the obligation, and a reliable
estimate can be made of the amount of the
obligation.
The amount recognised as a provision is the
best estimate of the consideration required
to settle the present obligation at the end of
each reporting period, taking into account
the risks and uncertainties surrounding the
obligation.
When some or all of the economic benefits
required to settle a provision are expected
to be recovered from a third party, the
receivable is recognised as an asset, if it is
virtually certain that reimbursement will be
received and the amount of the receivable
can be measured reliably.
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. Contingent
assets are not recognised but are disclosed in
the notes to standalone financial statements
when economic inflow is probable.
xii. Financial instruments
A financial instrument is any contract that
gives rise to a financial asset of one entity
and a financial liability or equity instrument
of another entity.
Financial assets and financial liabilities are
recognised when an entity becomes a party to
the contractual provisions of the instruments.
All financial instruments are initially measured
at fair value. Transaction costs that are
attributable to the acquisition or issue of
the financial assets and financial liabilities
(other than financial assets recorded at fair
value through profit or loss) are added to or
deducted from the fair value of the financial
assets or financial liabilities as appropriate,
on initial recognition. Transaction cost directly
attributable to the acquisition or issue of
financial assets or financial liabilities at fair
value through profit or loss are recognised
immediately in the standalone statement of
profit and loss.
Purchase or sales of financial assets that
require delivery of assets within a time frame
established by regulation or convention in
the market place (regular way trade) are
recognised on trade date.
For the purpose of subsequent measurement,
financial instruments of the Company are
classified in the following categories: non¬
derivative financial assets comprising
amortised cost, debt instruments at fair value
through other comprehensive income (FVTOCI),
equity instruments at fair value through other
comprehensive income (FVTOCI) and fair value
through profit or loss (FVTPL), non-derivative
financial liabilities at amortised cost or FVTPL
and derivative financial instruments (under
the category of financial assets or financial
liabilities) at FVTPL.
The classification of financial instruments
depends on the objective of the business
mod el for which it is held. Management
determines the classification of its financial
instruments at initial recognition.
a) Non-derivative financial assets
(i) Financial assets at amortised cost
A financial asset is measured at amortised
cost if both of the following conditions are
met:
(a) The financial asset is held within a
business model whose objective is to hold
financial assets in order to collect contractual
cash flows, and
(b) The contractual terms of the financial
asset give rise on specified dates to cash flows
that are solely payments of principal and
interest on the principal amount outstanding.
Financial assets are measured initially
at fair value plus transaction costs and
subsequently carried at amortised cost using
the effective interest rate ('EIR') method, less
any impairment loss.
Financial assets at amortised cost are
represented by trade receivables, security
deposits, cash and cash equivalents,
employee and other advances and eligible
current and non-current assets.
(ii) Equity instruments at fair value through
other comprehensive income (FVTOCI)
All equity instruments other than investment in
subsidiaries are measured at fair value. Equity
instruments held for trading is classified as
fair value through profit or loss (FVTPL). For
all other equity instruments, the Company
may make an irrevocable election to present
subsequent changes in the fair value in OCI.
The Company makes such election on an
instrument-by-instrument basis.
If the Company decides to classify an
equity instrument as at FVTOCI, then all fair
value changes on the instrument, excluding
dividend are recognised in OCI. There is no
recycling of the amount from OCI to the
standalone statement of profit and loss,
even on sale of the instrument. However the
Company may transfer the cumulative gain
or loss within the equity.
(iii) Financial assets at fair value through
profit or loss (FVTPL)
FVTPL is a residual category for financial assets.
Any financial asset which does not meet the
criteria for categorisation as at amortised cost
or as FVTOCI, is classified as FVTPL.
In addition, the Company may elect to
designate the financial asset, which otherwise
meets amortised cost or FVTOCI criteria, as
FVTPL if doing so eliminates or significantly
reduces a measurement or recognition
inconsistency.
Financial assets included within the FVTPL
category are measured at fair values with all
changes in the standalone statement of profit
and loss.
(iv) Derecognition of financial assets
The Company derecognises a financial asset
when the contractual rights to the cash flows
from the asset expire, or the financial assets
is transferred and the transfer qualifies for
derecognition. On derecognition of a financial
asset in its entirety, the difference between
the carrying amount (measured at the date
of derecognition) and the consideration
received (including any new assets obtained
less any new liability assumed) shall be
recognised in the standalone statement of
the profit and loss except for debt and equity
instruments carried through FVTOCI which
shall be recognised in OCI.
b) Non-derivative financial liabilities
(i) Financial liabilities at amortised cost
Financial liabilities at amortised cost
represented by trade and other payables
are initially recognised at fair value, and
subsequently carried at amortised cost using
the EIR method.
(ii) Financial liabilities at fair value through
profit or loss (FVTPL)
Financial liabilities at FVTPL are measured at
fair value with all changes recognised in the
standalone statement of profit and loss.
iii) Derecognition of financial liabilities
The Company derecognises financial
liabilities only when, the obligations are
discharged, cancelled or have expired. The
difference between the carrying amount of
the financial liability derecognised and the
consideration paid and payable is recognised
in the standalone statement of profit and loss.
c) Derivative financial instruments
The Company holds derivative financial
instruments such as foreign exchange
forward contracts to mitigate the risk of
changes in foreign exchange rates on foreign
currency assets or liabilities. Derivatives
are recognised and measured at fair value.
Attributable transaction cost are recognised
in the standalone statement of profit and loss.
xiii. Impairment
a) Financial assets
I n accordance with Ind AS 109 - Financial
Instruments, the Company applies expected
credit loss (ECL) model for measurement
and recognition of impairment loss. The
Company follows 'simplified approach' for
recognition of impairment loss allowance on
trade receivable. The application of simplified
approach does not require the Company
to track changes in credit risk. Rather, it
recognises impairment loss allowance based
on lifetime ECLs at each reporting period,
right from its initial recognition.
For recognition of impairment loss on other
financial assets and risk exposure, the
Company determines that whether there has
been a significant increase in the credit risk
since initial recognition.
Lifetime ECLs are the expected credit losses
resulting from all possible default events over
the expected life of a financial instrument.
ECL is the difference between all contractual
cash flows that are due to the Company in
accordance with the contract and all the
cash flows that the entity expects to receive
(i.e. all shortfalls), discounted at the original
EIR. When estimating the cash flows, an entity
is required to consider:
(i) All contractual terms of the financial
instrument (including prepayment, extension
etc.) over the expected life of the financial
instrument. However, in rare cases when
the expected life of the financial instrument
cannot be estimated reliably, then the entity
is required to use the remaining contractual
term of the financial instrument;
(ii) Cash flows from the sale of collateral
held or other credit enhancements that are
integral to the contractual terms.
As a practical expedient, the Company uses
a provision matrix to determine impairment
loss on portfolio of its trade receivable. The
provision matrix is based on its historically
observed default rates over the expected life
of the trade receivable and is adjusted for
forward- looking estimates. At every reporting
date, the historical observed default rates
are updated and changes in forward-looking
estimates are analysed.
ECL impairment loss allowance (or reversal)
recognised during the period is recognised as
income / expense in the statement of profit
and loss. This amount is reflected under
the head other expenses in the standalone
statement of profit and loss. The balance
sheet presentation for various financial
instruments is described below:
Financial assets measured at amortised
cost, contractual revenue receivables.
ECL is presented as an allowance, i.e. as an
integral part of the measurement of those
assets in the balance sheet. The allowance
reduces the net carrying amount. Until the
asset meets write off criteria, the Company
does not reduce impairment allowance from
the gross carrying amount.
b) Non-financial assets
The Company assesses, at each reporting
date, whether there is an indication that
an asset may be impaired. If any indication
exists, or when annual impairment testing for
an asset is required, the Company estimates
the asset's recoverable amount. An asset's
recoverable amount is the higher of an asset's
or cash-generating unit's (CGU) fair value less
costs of disposal and its value in use.
An impairment loss is recognised in the
Statement of Profit and Loss to the extent,
asset's carrying amount exceeds its
recoverable amount. The recoverable amount
is higher of an asset's fair value less cost
of disposal and value in use. Value in use is
based on the estimated future cash flows,
discounted to their present value using pre¬
tax discount rate that reflects current market
assessments of the time value of money and
risk specific to the assets. For the purpose of
assessing impairment, assets are grouped at
the lowest levels into cash generating units
for which there are separately identifiable
cash flows.
An impairment loss recognised in prior years
are reversed if there has been a change in the
estimates used to determine the recoverable
amount. An impairment loss is reversed
only to the extent that the asset's carrying
amount does not exceed the carrying amount
that would have been determined, net of
depreciation or amortisation, if no impairment
had been recognised in previous year
xiv. Earnings per share (EPS)
Basic EPS is computed by dividing the net
profit for the period attributable to the
equity shareholders by the weighted average
number of equity shares outstanding during
the period.
Diluted EPS is computed by dividing the net
profit after tax by the weighted average
number of equity shares considered for
deriving basic EPS and also weighted average
number of equity shares that could have
been issued upon conversion of all dilutive
potential equity shares. Dilutive potential
equity shares are deemed converted as of
the beginning of the period, unless issued at
a later date. Dilutive potential equity shares
are determined independently for each period
presented. The number of equity shares and
potentially dilutive equity shares are adjusted
for bonus shares, as appropriate.
xv. Leases
The Company assesses at contract inception
whether a contract is, or contains, a lease.
That is, if the contract conveys the right to
control the use of an identified asset for a
period of time in exchange for consideration.
The determination of whether an arrangement
is,or contains, a lease is based on the
substance of the arrangement at the inception
of the lease. The arrangement is, or contains,
a lease if fulfilment of the arrangement is
dependent on the use of a specific asset or
assets and the arrangement conveys a right
to use the asset or assets, even if that right
is not explicitly specified in an arrangement.
Company as a lessee
The Company applies a single recognition
and measurement approach for all leases,
except for short-term leases and leases of
low-value assets. The Company recognises
lease liabilities to make lease payments and
right-of-use assets representing the right to
use the underlying assets.
i) Right-of-use assets (ROU)
The Company recognises right-of-use
assets at the commencement date of the
lease (i.e., the date the underlying asset is
available for use). Right-of-use assets are
measured at cost, less any accumulated
depreciation and impairment losses,
and adjusted for any remeasurement
of lease liabilities. The cost of right-of-
use assets includes the amount of lease
liabilities recognised, initial direct costs
incurred, and lease payments made at
or before the commencement date less
any lease incentives received. Right-of-
use assets are depreciated on a straight¬
line basis over the of the lease term.
If ownership of the leased asset
transfers to the Company at the end
of the lease term or the cost reflects
the exercise of a purchase option,
depreciation is calculated using the
estimated useful life of the asset.
The right-of-use assets are also subject
to impairment. Refer to the accounting
policies (xiii)(b) Impairment of non¬
financial assets.
Right-of-use assets are depreciated on a
straight-line basis over the shorter of the
lease term and the estimated useful lives
of the assets, as follows:
Company as a lessor
Leases in which the company does not transfer
substantially all the risks and rewards incidental
to ownership of an asset are classified as
operating leases. Rental income arising is
accounted for on a straight-line basis over
the lease terms. Initial direct costs incurred
in negotiating and arranging an operating
lease are added to the carrying amount of the
leased assets and recognised over the lease
terms on the same basis as rental income.
ii) Lease liabilities
At the commencement date of the lease,
the Company recognises lease liabilities
measured at the present value of lease
payments to be made over the lease term.
The lease payments include fixed payments
(including in substance fixed payments)
less any lease incentives receivable,
variable lease payments that depend on
an index or a rate, and amounts expected
to be paid under residual value guarantees.
In calculating the present value of
lease payments, the Company uses its
incremental borrowing rate at the lease
commencement date because the interest
rate implicit in the lease is not readily
determinable. After the commencement
date, the amount of lease liabilities
is increased to reflect the accretion
of interest and reduced for the lease
payments made. In addition, the carrying
amount of lease liabilities is remeasured
if there is a modification, a change in the
lease term, a change in the lease payments
(e.g., changes to future payments resulting
from a change in an index or rate used
to determine such lease payments) or a
change in the assessment of an option to
purchase the underlying asset.
iii) Short-term leases and leases of low-
value assets:
The Company applies the short-term
lease recognition exemption to its short¬
term leases of office premises (i.e., those
leases that have a lease term of 12
months or less from the commencement
date and do not contain a purchase
option). It also applies the lease of low-
value assets recognition exemption to
leases that are considered to be low
value. Lease payments on short-term
leases and leases of low-value assets are
recognised as expense on a straight-line
basis over the lease term.
xvi. Cash and cash equivalents
Cash and cash equivalent in the balance
sheet comprise cash at banks and on hand
and short-term deposits with an original
maturity of three months or less, that are
readily convertible to a known amount of cash
and which are subject to an insignificant risk
of changes in value.
xvii. Cash Dividend
The Company recognises a liability to pay
dividend to equity holders of the Company
when the distribution is authorised and the
distribution is no longer at the discretion of the
Company. As per the corporate laws in India, a
distribution is authorised when it is approved
by the shareholders. A corresponding amount
is recognised directly in equity.
xviii. Fair value measurement
Fair value is the price that would be received
to sell an asset or paid to transfer a liability
in an orderly transaction between market
participants at the measurement date. The
fair value measurement is based on the
presumption that the transaction to sell the
asset or transfer the liability takes place either:
• I n the principal market for the asset or
liability or
• I n the absence of a principal market, in
the most advantageous market for the
asset or liability.
The principal or the most advantageous
market must be accessible by the Company.
The fair value of an asset or a liability is
measured using the assumptions that market
participants would use when pricing the asset
or liability, assuming that market participants
act in their economic best interest.
The Company uses valuation techniques
that are appropriate in the circumstances
and for which sufficient data are available
to measure fair value, maximising the use of
relevant observable inputs and minimising the
use of unobservable inputs.
All assets and liabilities for which fair value
is measured or disclosed in the standalone
financial statements are categorised within
the fair value hierarchy, described as follows,
based on the lowest level input that is
significant to the fair value measurement as
a whole:
• Level 1 — Quoted (unadjusted) market
prices in active markets for identical
assets or liabilities
• Level 2 — Valuation techniques for which
the lowest level input that is significant
to the fair value measurement is directly
or indirectly observable
• Level 3 — Valuation techniques for which
the lowest level input that is significant
to the fair value measurement is
unobservable
For assets and liabilities that are recognised in
the financial statements on a recurring basis,
the Company determines whether transfers
have occurred between levels in the hierarchy
by re-assessing categorisation (based on the
lowest level input that is significant to the fair
value measurement as a whole) at the end of
each reporting period.
For the purpose of fair value disclosures, the
Company has determined classes of assets
and liabilities on the basis of the nature,
characteristics and risks of the asset or
liability and the level of the fair value hierarchy
as explained above.
xix. Exceptional items
Exceptional items include income or expense
that are considered to be part of ordinary
activities, however, are of such significance
and nature that separate disclosure
enables the user of Financial Statements to
understand the impact in a more meaningful
manner. Exceptional items are identified by
virtue of either their size or nature so as to
facilitate comparison with prior periods and
to assess underlying trends in the financial
performance of the Company
xx. Accounting and reporting of information for
Operating Segments
Based on "Management Approach" as defined
in Ind AS 108 - Operating Segments, the
Chief Operating Decision Maker evaluates
the Company's performance and allocates
the resources based on an analysis of
various performance indicators by business
segments. The Company prepares its
segment information in conformity with the
accounting policies adopted for preparing
and presenting the financial statements of the
Company as a whole. Geographical segments
are ascertained based on the geographical
location of the customers.
2.5 Use of estimates and management judgments
I n application of the accounting policies, which
are described in note 2.4, the management of
the Company is required to make judgements,
estimates and assumptions about the carrying
amounts of assets and liabilities that are not readily
apparent from other sources. The estimates and
assumptions are based on historical experience and
other factors that are considered to be relevant.
Actual results may differ from these estimates.
The estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions
to accounting estimates are recognised in the
period in which the estimates are revised if the
revision affects only that period, or in the period
of revision and future periods if the revision affects
both current and future periods. In particular,
information about significant areas of estimation,
uncertainty and critical judgements used in
applying accounting policies that have the most
significant effect on the amounts recognised in
the standalone financial statements is included in
the following notes:
i. Useful life of property, plant and equipment
and intangible assets
The useful life of the assets are determined in
accordance with Schedule II of the Companies
Act, 2013. In cases, where the useful life is
different from that or is not prescribed in
Schedule II, it is based on technical advice,
taking into account amongst other things, the
nature of the asset, the estimated usage of the
asset, the operating conditions of the asset,
past history of replacement, anticipated
technological changes, manufacturers
warranties and maintenance.
ii. Impairment
An impairment loss is recognised for the
amount by which an asset's / investments
or cash-generating unit's carrying amount
exceeds its recoverable amount. To determine
the recoverable amount, management
estimates expected discounted future cash
flows from each asset or cash-generating unit.
iii. Deferred tax
Deferred income tax liabilities are recognised
for all taxable temporary differences. Deferred
income tax assets are recognised to the
extent that it is probable that taxable profit
will be available against which the deductible
temporary differences, and the carry forward
of unused tax credits and unused tax losses
can be utilised.
iv. Fair value
Management uses valuation techniques
in measuring the fair value of financial
instruments where active market quotes
are not available. In applying the valuation
techniques, management makes maximum
use of market inputs and uses estimates and
assumptions that are, as far as possible,
consistent with observable data that
market participants would use in pricing
the instrument. Where applicable data is
not observable, management uses its best
estimate about the assumptions that market
participants would make. These estimates
may vary from the actual prices that would
be achieved in an arm's length transaction at
the reporting date.
v. Post-retirement benefit plans
The obligation arising from the defined benefit
plan is determined on the basis of actuarial
assumptions which include discount rate,
trends in salary escalation and vested future
benefits and life expectancy. The discount
rate is determined with reference to market
yields at each financial year end on the
government bonds.
vi. Provisions and contingencies
The recognition and measurement of other
provisions are based on the assessment of the
probability of an outflow of resources, and
on past experience and circumstances known
at the reporting date. The actual outflow of
resources at a future date may therefore
vary from the figure estimated at end of each
reporting period.
vii. Share based payments
Estimating fair value for share-based payment
transactions requires determination of the
most appropriate valuation model, which
is dependent on the terms and conditions
of the grant. This estimate also requires
determination of the most appropriate inputs
to the valuation model including the expected
life of the share option, volatility and dividend
yield and making assumptions about them.
For the measurement of the fair value of
equity-settled transactions with employees
at the grant date, the Company uses black
scholes model Employee Share Option Plan.
The assumptions used for estimating fair
value for share-based payment transactions
are disclosed in Note 45.
Nature and purpose of Reserves
(a) Capital reserve
Capital reserves pertains to amalgamation of subsidiary company
(b) Securities premium account
Securities premium includes the difference between the face value of the equity shares and the consideration
received in respect of shares issued. The reserves can be utilized only for limited purposes such as issuance
of bonus shares in accordance with the provisions of the Companies Act, 2013.
(c) Share options outstanding account
This relate to shares granted to the employees of the Company and its subsidiaries.
(d) General reserve
Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of
net income at a specified percentage in accordance with applicable regulations. The purpose of these
transfers was to ensure that if a dividend distribution in a given year is more than 10% of the paid-up
capital of the Company for that year, then the total dividend distribution is less than the total distributable
results for that year. Consequent to introduction of Companies Act 2013, the requirement to mandatorily
transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the
amount previously transferred to the general reserve can be utilised only in accordance with the specific
requirements of Companies Act, 2013.
(e) Retained earnings
Retained earnings are the profits / (loss) that the Company has earned / incurred till date, less any transfers
to general reserve and dividends or other distributions paid to shareholders.
(f) Reserve for equity instruments through other comprehensive income
Reserve for equity instruments through other comprehensive income represents the cumulative gains (net
of losses) arising on revaluation of equity instruments measured at fair value through other comprehensive
income, net of amount reclassified, if any, to retained earnings when those instruments are disposed off.
(g) Treasury reserve
Treasury reserve represents the shares of the Company held by SeQuent Scientific Employee Stock Option
Plan Trust.
Notes:
(i) Trade payables (other than due to micro, small and medium enterprises) are non-interest bearing and
are normally settled in 90 - 120 days.
(ii) The Company's exposures to currency and liquidity risks related to trade payables is disclosed in note 49.
(iii) Refer note 44.3 for dues payable to related parties
(iv) The Company has entered into an agreement with financial institutions for the supply chain financing
arrangement. As per the arrangement, the suppliers may elect to factor their receivable from the
Company and receive the payment due from the financial institutions before the due date. As per the
arrangement, the financial institutions agrees to pay amounts which Company owes to it's suppliers
and the Company agrees to pay the financial institutions at a date later than suppliers are paid.
The nature and function of the liabilities remain the same even after factoring as the Company is
neither legally released from its original obligation to the supplier nor the terms of the original liability
are amended in a way that is considered a substantial modification. Hence, the Company has not
derecognised the liabilities which are factored by the suppliers and disclosed the said amount within
trade payables. Further, no additional interest has been paid to the financial institution by the Company
on the amounts due to the suppliers. The payable under supply chain financing arrangement amounts
to ' 19.06 million as at 31 March 2025 (31 March 2024: ' 119.78 million).
Apart from the above, the Company has also entered into arrangements, wherein the Company
requests the financial institutions to make payments on the due date agreed with the suppliers and
the Company pays to the financial institutions at the end of the extended period of payment. In this
case, the Company derecognizes the liabilities towards the suppliers on the date of payment by the
financial institutions to the suppliers and recognizes the amounts paid within Borrowings. During the
year ended March 31, 2025, the Company has recognized interest expense amounting to ' 15.26 million
(31 March 2024: ' 10.75 million) under the aforementioned arrangement. The payable to the financial
institution amounts to ' 241.16 million as at 31 March 2025 (31 March 2024: ' 152.69 million) under this
arrangement which has been recognized under "Short Term Borrowings" in the financial statements.
Note:
(a) The Board of Directors of the Company at their meeting held on 26 September 2024 have approved the
Composite Scheme of Amalgamation (the Scheme) amongst the Company, Sequent Research Limited (wholly
owned subsidiary of the Company), Viyash Life Sciences Private Limited, Symed Labs Limited, Vandana Life
Sciences Private Limited, Appcure Labs Private Limited, Vindhya Pharma (India) Private Limited, SV Labs
Private Limited, Vindhya Organics Private Limited, Genin Life Sciences Private Limited in terms of Section
230-232 and other applicable provisions of Companies Act, 2013. The Scheme would become effective after
receipt of all requisite approval. Pending receipt of necessary approvals, no effect of the Scheme has been
given in the financial statement for the year ended 31 March 2025. In this regard, the Company has incurred
transaction costs pertaining to Scheme amounting to '52.61 million for the year ended 31 March 2025.
(b) During the year ended 31 March 2025, based on confirmation from vendor, the Company has reversed provision
by '3.80 million related to domain expert advisory fees towards revamping of manufacturing and procurement
processes, in respect of which expense of '34.22 million was recorded for the year ended 31 March 2024.
Further, during the year ended 31 March 2024, the Company had incurred the following non-recurring
expenses towards restructuring of its operations by closing its API manufacturing facility at MIDC, Tarapur,
Maharashtra :
(i) Provision for diminution in value of immovable assets at Tarapur manufacturing facility aggregating to
'19.74 million.
(ii) Settlement payment to the employees at Tarapur manufacturing facility aggregating to '8.58 million.
(D) The Company has not opted for section 115BAA introduced under Taxation Law (Amendment)
Ordinance, 2019, considering the accumulated MAT credit and other benefits available under the
Income Tax Act, 1961.
40 Employee benefit plans
(i) Defined contribution plans:
The Company makes Provident Fund and Employee State Insurance Scheme contributions which are
defined contribution plans, for qualifying employees. Under the schemes, the Company is required to
contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised
' 12.82 (31 March 2024 : ' 13.01) for Provident Fund contributions and ' 1.21 (31 March 2024 : ' 1.48) for
Employee State Insurance Scheme contributions in the standalone statement of profit and loss. As at
31 March 2025, contribution of '2.25 (31 March 2024 : '2.08) is outstanding which is paid subsequent
to the end of respective reporting periods.
Notes:
(i) Refer note 2.4(xviii) under Material accounting policies for recognition and measurement of financial assets.
(ii) The fair value of the investments in equity is based on the quoted price.
(iii) Price risk- The Company's listed and non-listed equity securities are susceptible to market price risk arising
from uncertainties about future values of the investment securities.
49.2 Financial risk management objectives and policies
The Company's principal financial liabilities comprise loans and borrowings, trade payables and other payables.
The main purpose of these financial liabilities is to finance the Company's operations. The Company's principal
financial assets include investments, loans, trade and other receivables, cash and deposits that are derived
directly from its operations.
The Company is exposed to the following risks from its use of financial instruments:
- Credit risk
- Liquidity risk
- Market risk
This note presents information about the Company's exposure to each of the above risks, the Company's
objectives, policies and processes for measuring and managing risk, and the Company's management of capital.
Further quantitative disclosures are included throughout these standalone financial statements.
Risk management framework
The Company's activities makes it susceptible to various risks. The Company has taken adequate measures to
address such concerns by developing adequate systems and practices. The Company's overall risk management
program focuses on the unpredictability of markets and seeks to manage the impact of these risks on the
Company's financial performance.
The Board of Directors has overall responsibility for the establishment and oversight of the Company's risk
management framework.
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
49.2 Financial risk management objectives and policies (Contd)
Company, through its training and management standards and procedures, aims to develop a disciplined and
constructive control environment in which all employees understand their roles and obligations.
The Company has established Audit Committee and its constitution, quorum and scope is in line with the
Companies Act, 2013, provisions of Listing Agreement as entered with the Stock Exchange / Regulations.
The Audit Committee oversees how management ensures compliance of Internal Control Systems, 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.
The Audit Committee also reviews the adequacy of internal audit function, including the structure of the internal
audit department, staffing and seniority of the official heading the department, reporting structure coverage
and frequency of internal audit In order to ensure that all checks and balances are in place and all internal
control systems are in order, regular and exhaustive internal audits are conducted by experienced firms of
Chartered Accountants.
49.3 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 resulting in a financial loss to the Company. Credit risk arises principally
from the Company's trade receivables. Credit risk arises from cash held with banks and financial institutions,
as well as credit exposure to customers, including outstanding accounts receivable. The maximum exposure to
credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit
risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking
into account their financial position, past experience and other factors.
The Company's trade and other receivables are actively monitored to review credit worthiness of the customers
to whom credit terms are granted and also avoid significant concentrations of credit risks.
- The Company continuously monitors defaults of customers and other counterparties identified and incorporates
this information into its credit risk controls.
- Trade receivables consist of a large number of customers spread across diverse industries and geographical
areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable and where
appropriate, credit guarantee insurance cover is purchased for export customers.
- The Company limits its exposure to credit risk by generally investing in liquid securities and only with
counterparties that have a good credit rating.
Information about major customer
Revenue from single external customer group is approximately ' 283.28 (31 March 2024: ' 202.23) representing
17% (31 March 2024: 13%) of Company's total revenue from business for the year ended 31 March 2025 and total
exposure in receivables is 3% for the year ended 31 March 2025 (31 March 2024: 20%). Apart from the aforesaid
single customer, the Company does not have a significant credit risk exposure to any other single counterparty.
In addition, the Company is exposed to credit risk in relation to financial guarantees given to banks provided by
the company. The Company's maximum exposure in this respect is the maximum amount the Company may have
to pay if the guarantee is called on. These financial guarantees have been issued to banks and other parties with
whom loan agreements have been entered by the subsidiary (refer note 44.3 for details of outstanding financial
guarantees).
49.4 Liquidity risk
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 always have sufficient liquidity to meet its liabilities
when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage
to the Company's reputation.
The Company has an appropriate liquidity risk management framework for the management of short, medium and
long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining
adequate cash reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast
and actual cash flows and matching the maturity profiles of financial assets and liabilities.
The Company's treasury department is responsible for managing the short-term and long-term liquidity
requirements of the Company. Short-term liquidity situation is reviewed on a regular basis by the treasury
function within the Company. Long-term liquidity position is reviewed on a regular basis by the Board of Directors
and appropriate decisions are taken according to the situation.
Typically the Company ensures that it has sufficient funds on demand to meet expected operational expenses
for a period of 60 days, including the servicing of financial obligations; this excludes the potential impact of
extreme circumstances that cannot reasonably be predicted, such as natural disasters.
The table below provides details regarding the contractual maturities of significant financial liabilities as at 31
March 2025 and 31 March 2024:
49.5 Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity
prices will affect the Company's income or the value of its holdings of financial instruments. The objective of
market risk management is to manage and control market risk exposures within acceptable parameters, while
optimising the return.
The Company is exposed to interest rate risk arising mainly from debt. The Company is exposed to interest rate
risk because the fair value of fixed rate borrowings and the cash flows associated with floating rate borrowings
will fluctuate with changes in interest rates.
The Company is also exposed to foreign currency risk on certain transactions that are denominated in a currency
other than the Company's functional currency; hence exposures to exchange rate fluctuations arise. Considering
the country and economic environment in which the Company operates, its operations are subject to risks arising
from fluctuations in exchange rate in those countries. The risk is that the functional currency value of cash flows
will vary as a result of movements in exchange rates.
50 Capital Management
For the purpose of Company's capital management, capital includes issued equity capital and all other equity
reserves attributable to the equity share holders of the Company. The primary objective of the Company's
capital management is to maximise the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions
and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may
adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company
monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company
includes within net debt, interest bearing borrowings less cash and cash equivalents
In order to achieve this overall objective, the Company's capital management, amongst other things, aims to
ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital
structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call
loans and borrowings. As at 31 March 2025, there is no breach of covenant attached to the borrowings.
The Company manages its capital to ensure that Company will be able to continue as going concern while
maximising the return to stakeholders through the optimisation of the debt and equity balance.
The capital structure of the Company consists of net debt (offset by cash and bank balances) and total equity
of the Company.
Note:
The provisions of Section 135 of the Companies Act, 2013 for Corporate Social Responsibility (CSR) are applicable
to the Company. Basis the assessment of spend criteria as defined in the section, the Company is not required
to spend on CSR for the current year considering the average net loss incurred in preceding three years.
52 The Company does not have any Benami property, where any proceeding has been initiated or pending
against the Company for holding any Benami property under the Benami Transaction Prohinition Act, 1988
and rules made thereunder.
53 There is no income surrendered or disclosed as income during the current or previous year in the tax
assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.
54 The Company does not have any charges or satisfaction which are yet to be registered with Registrar of
Companies beyond the statutory period.
55 The Company has not traded or invested in crypto currency or virtual currency during the current or previous
year.
57 The Company has not been declared as wilful defaulter by any bank or financial institution or government
or any government authority.
58 The Company has complied with the number of layers of subsidiaries prescribed under Section 2(87) of the
Companies Act, 2013
59 The quarterly returns or statements of current assets filed by the Company (including revised returns or
statements) with banks or financial institutions are in agreement with the books of accounts.
60 A. During the year ended 31 March 2025, the Company has not advanced or loaned or invested funds to
any other persons or entity, 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.
B. During the year ended 31 March 2025, the Company has not received any fund from any persons or entity,
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.
61 The Company has used two accounting software for maintaining its books of account which have 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, if any, using privileged / administrative access rights to the underlying database. Further no instance
of audit trail feature being tampered with was noted in respect of these software. Additionally, the audit
trail of prior year has been preserved by the Company as per the statutory requirements for record retention
to the extent it was enabled and recorded in the respective years.
62 With effect from August 5, 2022, the Ministry of Corporate Affairs (MCA) has amended the Companies
(Accounts) Rules, 2014, relating to maintenance of electronic books of account and other relevant books
and papers. Pursuant to this amendment, the Company has maintained the books of account which are
accessible in India at all times and their backup is kept on servers located in India on a daily basis, except
that backup was not performed on June 19, 2024.
63 The new and amended standards and interpretations that are issued, but not yet effective, up to the date
of issuance of the Company's financial statements are disclosed below. The Company will adopt this new
and amended standard, when it become effective.
Lack of exchangeability - Amendments to Ind AS 21
The Ministry of Corporate Affairs notified amendments to Ind AS 21 The Effects of Changes in Foreign
Exchange Rates to specify how an entity should assess whether a currency is exchangeable and how it
should determine a spot exchange rate when exchangeability is lacking. The amendments also require
disclosure of information that enables users of its financial statements to understand how the currency
not being exchangeable into the other currency affects, or is expected to affect, the entity's financial
performance, financial position and cash flows.
The amendments are effective for annual reporting periods beginning on or after 1 April 2025. When applying
the amendments, an entity cannot restate comparative information.
The amendments are not expected to have a material impact on the Company's financial statements.
64 The figures for the corresponding previous year have been regrouped/reclassified wherever necessary, to
make them comparable.
65 The standalone financial statements were approved for issue by the board of directors on 20 May 2025.
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 registration number- 324982E / E300003
Per Anil Jobanputra Rajaram Narayanan Vedprakash Ragate
Partner Managing Director & Whole-time Director
Membership No: 1 10759 Chief Executive Officer DIN:10578409
DIN:02977405
Saurav Bhala Yoshita Vora
Chief Financial Officer Company Secretary
Thane, 20 May 2025 Membership No: A-22220
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