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Meenakshi (India) Ltd. இன் கணக்கு குறிப்புகள்
16) Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognised when the Company has a present legal or constructive 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
a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating
losses.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation
at the reporting date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of
the time value of money is material, provisions are measured at the present value of the expenditure expected to be
required to settle the obligation.
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 where there is a present obligation arising from past events but it is 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 liabilities are disclosed in the Notes to the Financial Statements.
Contingent assets are not recognised in the Financial Statements but are disclosed where an inflow of economic
benefits is probable.
17) Financial instrumentsa) Initial Recognition
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual
provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value, except for trade receivables that do
not contain a significant financing component, which are initially measured at the transaction price. Transaction
costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, other than
those measured at fair value through profit or loss ("FVTPLâ), are added to or deducted from the fair value of the
respective financial asset or financial liability, as appropriate. Transaction costs directly attributable to financial
assets or financial liabilities measured at FVTPL are recognised immediately in the Statement of Profit and Loss.
b) Subsequent Measurement - Financial assetsi. Financial assets at amortised cost
Financial assets are subsequently measured at amortised cost if they are held within a business model whose
objective is to hold the assets in order to collect contractual cash flows and 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.
Such financial assets are subsequently measured at amortised cost using the effective interest rate method
and are subject to impairment.
ii. Financial Assets at Fair Value through Other Comprehensive Income (FVOCI)
Financial assets are measured at fair value through Other Comprehensive Income if they are held within a
business model whose objective is achieved by both collecting contractual cash flows and selling financial
assets and 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.
iii. Financial Assets at Fair Value through Profit or Loss (FVTPL)
Financial assets that do not meet the criteria for measurement at amortised cost or FVOCI are measured at fair
value through profit or loss
For financial assets maturing within one year from the reporting date, the carrying amounts generally
approximate their fair values due to the short-term nature of such instruments.
c) Impairment of Financial Assets
The Company recognises loss allowances for expected credit losses ("ECLâ) on financial assets measured at
amortised cost and debt instruments measured at FVOCI.
For trade receivables and contract assets, the Company applies the simplified approach permitted under Ind
AS 109 - Financial Instruments and recognises lifetime expected credit losses. The expected credit losses are
determined using a provision matrix based on historical credit loss experience, adjusted for current and forward¬
looking information, wherever appropriate.
For other financial assets, where credit risk has not increased significantly since initial recognition, a loss allowance
equal to twelve-month expected credit losses is recognised. Where credit risk has increased significantly since
initial recognition, a loss allowance equal to lifetime expected credit losses is recognised.
d) Derecognition of Financial Assets
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset
expire or when it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109.
If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to
control the transferred asset, the Company recognises its retained interest in the asset and an associated liability
for amounts it may have to pay.
If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the
Company continues to recognise the financial asset and also recognises a collateralised borrowing for the
proceeds received.
On derecognition of a financial asset in its entirety, the difference between the carrying amount of the asset and
the consideration received is recognised in the Statement of Profit and Loss, as applicable.
e) Financial Liabilities and Equity Instruments
Financial liabilities are initially measured at fair value, net of directly attributable transaction costs, where applicable,
and are subsequently measured at amortised cost using the effective interest rate method, except for financial
liabilities measured at FVTPL.
For trade and other payables maturing within one year from the reporting date, the carrying amounts generally
approximate their fair values due to their short-term nature.
f) Borrowings and Security Deposits
Borrowings and other financial liabilities are subsequently measured at amortised cost using the effective
interest rate method. Any difference between the proceeds, net of transaction costs, and the amount payable
on settlement is recognised in the Statement of Profit and Loss over the period of the liability using the effective
interest rate method.
An equity instrument is a contract that evidences a residual interest in the assets of the Company after deducting
all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of
directly attributable issue costs.
h) Foreign Exchange Gains and Losses
For financial assets and financial liabilities denominated in a foreign currency and measured at amortised cost,
exchange differences are recognised in the Statement of Profit and Loss in accordance with the Company''s
accounting policy on foreign currency transactions. For financial instruments measured at FVTPL, the foreign
exchange component forms part of the fair value gain or loss recognised in the Statement of Profit and Loss.
i) Derecognition of Financial Liabilities
A financial liability, or a part thereof, is derecognised when the obligation specified in the contract is discharged,
cancelled or expires. Where an existing financial liability is replaced by another liability from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified, such modification is
accounted for as derecognition of the original liability and recognition of a new liability, with the difference in the
respective carrying amounts recognised in the Statement of Profit and Loss.
j) Derivative Financial Instruments
The Company enters into foreign exchange forward contracts to manage its exposure to fluctuations in foreign
currency exchange rates. Such derivative financial instruments are used for risk management purposes and not
for speculative purposes.
Derivative financial instruments are initially recognised at fair value on the date on which the derivative contract
is entered into and are subsequently remeasured at fair value at each reporting date. Changes in fair value are
recognised in the Statement of Profit and Loss where the Company does not apply hedge accounting.
18) Corporate Social Responsibility (''CSR'') expenditure The Company recognises expenditure incurred towards
Corporate Social Responsibility ("CSRâ) activities in the Statement of Profit and Loss in the year in which the obligation
is incurred.
19) Cash and Cash Equivalents:
For the purpose of presentation in the Statement of Cash Flows, cash and cash equivalents comprise cash on
hand, balances with banks in current accounts, balances with wallets and credit card companies, and highly liquid
investments with original maturities of three months or less that are readily convertible into known amounts of cash
and are subject to an insignificant risk of changes in value.
Bank overdrafts that are repayable on demand and form an integral part of the Company''s cash management are
included as a component of cash and cash equivalents for the purpose of the Statement of Cash Flows. Such bank
overdrafts are presented under borrowings in current liabilities in the Balance Sheet.
Equity shares are classified as equity. The par value of equity shares is recognised as share capital and the amount
received in excess of the par value is recognised as securities premium.
Significant costs directly attributable to the issue of equity shares are recognised as a deduction from equity, net of
any related tax effects.
Borrowings are initially recognised at fair value, net of directly attributable transaction costs. Subsequent to initial
recognition, borrowings are measured at amortised cost using the effective interest rate method. Any difference
between the proceeds, net of transaction costs, and the redemption amount is recognised in the Statement of Profit
and Loss over the period of the borrowings using the effective interest rate method.
Borrowing costs comprise interest and other costs incurred in connection with the borrowing of funds. Borrowing
costs are recognised in the Statement of Profit and Loss using the effective interest method, except to the extent that
they are directly attributable to the acquisition, construction or production of a qualifying asset, in which case they
are capitalised as part of the cost of such asset. A qualifying asset is an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale.
In respect of foreign currency borrowings, exchange differences arising from such borrowings are regarded as
an adjustment to borrowing costs to the extent that they represent an adjustment to interest costs. The amount
of exchange difference treated as borrowing cost is restricted to the difference between the interest cost on a
comparable borrowing in the functional currency and the interest cost on the foreign currency borrowing. Where
an exchange loss has previously been recognised as an adjustment to borrowing costs, any subsequent exchange
gain on the same borrowing is recognised as an adjustment to borrowing costs to the extent of the loss previously
so recognised.
Government grants, including non-monetary grants at fair value, are recognised when there is reasonable assurance
that the Company will comply with the conditions attached to them and that the grants will be received.
Government grants whose primary condition is that the Company should purchase, construct or otherwise acquire
non-current assets are recognised as deferred income and presented as a liability in the Balance Sheet. Such deferred
income is recognised in the Statement of Profit and Loss on a systematic basis over the useful lives of the related
assets.
Non-monetary grants are recognised at fair value, where applicable.
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating
Decision Maker ("CODMâ). The CODM is responsible for allocating resources and assessing the performance of the
operating segments.
Based on the manner in which the operating results are reviewed by the CODM for the purpose of resource allocation
and performance assessment, the Company has identified the following reportable segments:
(i) Apparels & Textiles - comprising manufacture and trading of readymade garments and textiles; and
(ii) Others - comprising rental income, investment activities, steel and allied activities.
Segment information is presented in accordance with Ind AS 108 - Operating Segments and is disclosed in Note 39
to the financial statements.
25) Earnings per Share
Basic Earnings per Share
Basic earnings per share is calculated by dividing the profit attributable to the equity shareholders of the Company
by the weighted average number of equity shares outstanding during the financial year.
Diluted earnings per share is calculated by adjusting the profit attributable to the equity shareholders and the
weighted average number of equity shares outstanding for the effects of all dilutive potential equity shares, if any.
Based on the nature of products / activities of the Company and the normal time between the acquisition of assets
and their realisation in cash or cash equivalents, the Company has determined its operating cycle as twelve months
for the purpose of classification of its assets and liabilities as current and non-current.
27) Recent pronouncementsChange in Accounting Policies and Disclosures - New Standards and Amendments
The Company has applied for the first time certain amendments to Indian Accounting Standards, which are effective
for annual periods beginning on or after April 1,2025. The Company has not early adopted any standard, interpretation
or amendment that has been issued but is not yet effective.
(i) Amendments to Ind AS 21 - Lack of Exchangeability
The Ministry of Corporate Affairs ("MCAâ) 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 prescribe related
disclosure requirements.
The amendments are effective for annual reporting periods beginning on or after April 1,2025. The adoption of
these amendments did not have any material impact on the Financial Statements of the Company.
(ii) Amendments to Ind AS 1 - Classification of Liabilities as Current or Non-current and Non-current
Liabilities with Covenants
The MCA notified amendments to Ind AS 1 - Presentation of Financial Statements relating to the classification of
liabilities as current or non-current. The amendments clarify, inter alia, the meaning of a right to defer settlement,
that such right must exist at the end of the reporting period and that classification is unaffected by the likelihood
that an entity will exercise its right to defer settlement. The amendments also prescribe additional disclosures in
respect of certain non-current liabilities subject to covenants.
The amendments are effective for annual reporting periods beginning on or after April 1,2025. The adoption of
these amendments did not have any material impact on the Financial Statements of the Company.
(iii) Amendments to Ind AS 7 and Ind AS 107 - Supplier Finance Arrangements
The MCA notified amendments to Ind AS 7 - Statement of Cash Flows and Ind AS 107 - Financial Instruments:
Disclosures relating to supplier finance arrangements. The amendments prescribe additional disclosures to
enable users of financial statements to assess the effects of such arrangements on an entity''s liabilities, cash flows
and exposure to liquidity risk.
The adoption of these amendments did not have any material impact on the Financial Statements of the
Company, as the Company does not have any supplier finance arrangements.
(iv) Amendments to Ind AS 12 - International Tax Reform - Pillar Two Model Rules
The MCA notified amendments to Ind AS 12 - Income Taxes in relation to the OECD Pillar Two Model Rules. The
amendments provide a mandatory temporary exception from recognition and disclosure of deferred taxes arising
from the implementation of the Pillar Two Model Rules and prescribe certain additional disclosure requirements
for entities within the scope of such rules.
The adoption of these amendments did not have any material impact on the Financial Statements of the
Company.
28) Critical accounting judgments, assumptions and key sources of estimation and uncertainty
The preparation of the financial statements in conformity with the measurement principle of Ind AS requires
management to make estimates, judgments and assumptions. These estimates, judgments and assumptions
affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of
contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and
expenses during the period. Accounting estimates could change from period to period. Actual results could differ
from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in
circumstances surrounding the estimates. Differences between the actual results and estimates are recognized in
the year in which the results are known / materialized and, if material, their effects are disclosed in the notes to the
financial statements.
Application of accounting policies that require significant areas of estimation, uncertainty and critical judgments
and the use of assumptions in the financial statements have been disclosed below. The key assumptions concerning
the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk
of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are
discussed below:
a) Depreciation / amortization and impairment on property, plant and equipment / intangible assets:
Property, plant and equipment, right-of-use assets and intangible assets are depreciated / amortised on a straight¬
line basis over their estimated useful lives or lease term, where applicable, considering the estimated residual
values.
The Company reviews the carrying amounts of its property, plant and equipment, right-of-use assets and
intangible assets whenever there is an indication that the assets may be impaired. Where such indication exists,
the recoverable amount of the asset or cash-generating unit ("CGU") is estimated. The recoverable amount is the
higher of fair value less costs of disposal and value in use. In assessing value in use, estimated future cash flows are
discounted using an appropriate pre-tax discount rate reflecting current market assessments of the time value of
money and risks specific to the asset. The Company reviews the estimated useful lives and residual values of the
assets periodically. Changes in such estimates are accounted for prospectively.
b) Arrangement contains leases and classification of leases
Ind AS 116 requires the Company to determine the lease term as the non-cancellable period of a lease together
with periods covered by an option to extend the lease, where the Company is reasonably certain to exercise such
option, and periods covered by an option to terminate the lease, where the Company is reasonably certain not to
exercise such option.
The Company assesses the expected lease term on a lease-by-lease basis. In making such assessment, the
Company considers factors such as significant leasehold improvements, costs associated with termination or
relocation, importance of the underlying asset to the Company''s operations, location of the asset and availability
of suitable alternatives. The lease term is reassessed when there is a significant event or change in circumstances
that is within the control of the Company.
Significant judgement is required in determining the taxability of certain income and deductibility of certain
expenses while estimating the provision for income taxes. Deferred tax assets are recognised for deductible
temporary differences, unused tax losses and tax credits to the extent that it is probable that future taxable profits
will be available against which such amounts can be utilised.
Management judgement is required in estimating the possible outflow of resources, if any, in respect of claims,
litigations and other contingencies against the Company, as the outcome of such matters may not be predicted
with certainty. Based on the facts and circumstances of each matter and management''s best estimate, appropriate
provision is recognised or disclosure is made in the Financial Statements, as applicable.
e) Defined benefit obligation (DBO):
The measurement of defined benefit obligations involves significant estimates and assumptions including
discount rates, salary escalation rates, employee attrition, mortality and other actuarial assumptions. These
assumptions are determined based on actuarial valuation carried out by an independent actuary. Changes in
these assumptions may have a significant impact on the defined benefit obligation.
f) Inventory valuation
Inventories are valued at the lower of cost and net realisable value. The determination of net realisable value and
provision for slow-moving, obsolete and non-moving inventories involves estimates and judgements based on
the age and condition of inventories, historical and expected future usage, expected selling prices and prevailing
market conditions. Changes in these estimates may affect the carrying amount of inventories and the related
expense recognised in the Statement of Profit and Loss.
Revenue recognition involves judgement in determining the point at which control of goods is transferred to the
customer, particularly in respect of export sales having different contractual and shipping terms. The Company
also makes estimates in respect of variable consideration such as discounts, rebates, incentives and expected
sales returns, wherever applicable. Such estimates and judgements are based on contractual terms, historical
experience and other relevant factors and are reviewed at each reporting date.
17.2 Terms/Rights attached to equity shares
The Company has only one class of equity shares having par value of Rs.10 per share. Each holder of equity shares is entitled
to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of
directors is subject to the approval of the share holders in the ensuing Annual General Meeting. In the event of liquidation
of the company, the owners of equity shares will be entitled to receive any of the remaining assets of the company after
distribution of preferential amount, in proportion to their shareholding."
The Board of Directors, at its meeting held on March 03, 2025, recommended the issue of bonus shares in the ratio of
2:1, i.e., two new fully paid-up equity shares of ''10 each for every one existing fully paid-up equity share of ''10 each by
capitalisation of the Retained earnoings. The proposal was approved by the shareholders through a postal ballot on April 07,
2025 and the bonus was duly issued during the year at the Board meeting held on May 26, 2025.
a. General Reserve represents appropriation of profit. Under the erstwhile Companies Act, 1956, a general reserve was
created through an annual transfer of net profit at a specified percentage in accordance with applicable regulations.
Consequent to the introduction of the Companies Act, 2013, the requirement to mandatory transfer a specified
percentage of net profit to general reserve has been withdrawn.
b. Retained Earnings represent the undistributed profits / amount of accumulated earnings of the company. Such profits
and losses are after adjustment of payment of dividend, transfer to any reserves as statutorily required and adjustment
for realised gain/loss on derecognition of equity instruments measured at FVTOCI. Actuarial Gain/ Loss arising out of
Actuarial valuation is immediately transferred to Retained Earning.
c. Retained earnings are the profits/(loss) that the Company has earned/incurred till date, less any transfers to general reserve,
dividends or other distributions paid to shareholders. Retained earnings include re-measurement loss / (gain) on defined
benefit plans, net of taxes that will not be reclassified to Ind AS Statement of Profit and Loss.
21.1 Nature of security for secured borrowings
Loans repayable on demand from Banks
a) Packing Credit :
Secured by Hypothecation of Raw Materials, stock in process and finished goods meant for export and Book Debt with
interest subvention of 2.75% from Ministry of Textiles, India.
b) Bill Discounting :
Secured by documents of title to goods
All the above Loans are further secured by way of first charge by deposit of title deeds of the Land & Building at
Ambattur, Chennai and Office premises at Royapettah, Chennai and other fixed assets of the company and stands
guaranteed by the Managing Director of the company.
c) Overdraft Facility :
Secured against Fixed Deposit (Refer Note 11)
19.1 Nature of security for secured borrowings are given below :a) Term Loans from Banks
Secured by hypothecation of present & future movable and immovable fixed assets located at Salem, Land & Building
at Ambattur, Chennai and Office premises at Royapettah, Chennai and other Plant & Machineries of the company and
stands guaranteed by Managing Director of the company.
19.2 Terms of repayment of the Term Loans from Banks
a. Vehicle Loan 137573728 of 120 Lakhs - Repayable in 39 Instalments of Rs. 3.52 Lakhs p.m with last instalment falling due
on 07th April 2026. The rate of interest is 8.30% p.a. The loan secured against hypothecation of Vehicle.
b. Term Loan 87088773 - Outstanding as on 31.03.2026 - Rs. 19.16 Lakhs - Repayable in 60 Instalments of Rs. 0.94 Lakhs p.m
with last instalment falling due on 07th January 2028. The rate of interest is 8.00% p.a
c. Term Loan CNIF230142 with SIDBI - Outstanding as on 31.03.2026 - Rs. 40.27 Lakhs - Repayable in 54 Instalments starting
from June 2024 of Rs. 2.16 Lakhs p.m excluding interest with last instalment falling due on 10th November 2027. The
rate of interest is 7.45% p.a. .
Note: Impact of New Labour Codes
The Government of India has brought into force the four new Labour Codes with effect from November 21,2025, namely the
Code on Social Security, 2020, the Occupational Safety, Health and Working Conditions Code, 2020, the Industrial Relations
Code, 2020 and the Code on Wages, 2019, which subsume and replace various existing Central labour legislations.
Based on the Company''s assessment and best estimate of the impact arising from the revised definition of wages and
the consequential employee benefit obligations, the Company has recognised a provision of ''17.36 lakhs during the year
ended March 31,2026. The said amount has been disclosed as an Exceptional Item in the Statement of Profit and Loss for the
year ended March 31,2026 and the related deferred tax impact has been recognised, wherever applicable.
The provision has been determined based on the information and implementation guidance available up to the date of
approval of these Financial Statements and is subject to revision, if any, based on further clarifications, notifications and
implementation guidance.
C. The Company does not have any Benami property, where any proceeding has been initiated or pending against the
Company for holding any Benami property.
D. There are no transactions and / or balance outstanding with companies struck off under section 248 of the Companies
Act, 2013.
E. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory
period.
F. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
G. The Company has not advanced or given loan or invested funds to any other person(s) or entity(ies), including foreign
entities (Intermediaries) with the understanding that the Intermediary shall:
i) 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
ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
H. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with
the understanding (whether recorded in writing or otherwise) that the company shall:
i) 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
ii) provided any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
I. The Company does not have any transactions which are not recorded in the books of account that have been surrendered
or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey
or any other relevant provisions of the Income Tax Act, 1961)
J. The company does not have any investments through more than two layers of investment companies as per section
2(87) and section 186 of Companies Act, 2013.
K. The Company has not been declared as wilful defaulter by any bank or financial institution or other lender.
6. Net profit ratio decreased mainly due to significant reduction in profit after taxes during the year compared with the
previous year
7. Change in Return on Capital employed ratio is on account of lower operating profit during the year while capital
employed remained at a higher level
^Significant investments held by the Company is for strategic purposes. Benchmarking the return on annual basis will
not reflect yield from such investments.
M The company does not have any Investment Property
N The company has filed quarterly returns or statements with Bank in lieu of sanctioned working capital facilities, which
are in agreement with books of accounts.
O As per the Company''s accounting policy, Property, Plant and Equipment (including Right of Use Assets) and intangible
assets are carried at historical cost (less accumulated depreciation & impairment, if any), hence the revaluation related
disclosures required as per Additional Regulatory Information of Schedule III (revised) to the Companies Act, is not
applicable.
1. Debt equity ratio is decreased due to repayment of borrowings and shareholders equity increased during the year
resulted in lower debt equity ratio.
2. Debt service coverage ratio decreased due to lower earnings available for service in the debt during the year
compared with the previous year
3. Return on equity ratio decreased due to lower profit after taxes during the year compared with the previous year
4. Change in inventory turnover ratio is mainly due to lower cost of goods sold and higher average inventory levels
during the year
5. Change in Trade payable ratio is mainly due to increase in average trade payables at the end of the year compared
with the previous year
The above information has been determined to the extent such parties have been identified on the basis of information
available with the Company.
43. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company''s principal financial liabilities comprise borrowings, lease liabilities, trade payables and other financial liabilities.
The principal financial assets include trade receivables, cash and cash equivalents, bank balances, investments and other
financial assets.
In the course of its business, the Company is exposed to market risk, credit risk and liquidity risk arising from its financial
instruments. The Company has established risk management policies and procedures for identifying, assessing and
managing such risks. The Company''s senior management oversees the management of these risks in accordance with the
policies and procedures approved by the Board of Directors. The objective of the risk management framework is to minimise
the potential adverse impact of financial risks on the Company''s financial performance and to provide greater predictability
to its earnings and cash flows.
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market prices. Market risk primarily comprises foreign currency risk, interest rate risk and price risk.
(i) Foreign Currency Risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in foreign exchange rates.
The Company is exposed to foreign currency risk primarily on account of export receivables and forecast export transactions
denominated in foreign currencies. The Company evaluates its foreign currency exposures on an ongoing basis and enters
into foreign exchange forward contracts, where considered appropriate, to mitigate the risk arising from fluctuations in
foreign exchange rates. Such derivative contracts are entered into for risk management purposes and not for speculative
purposes.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in market interest rates.
The Company''s exposure to interest rate risk arises principally from borrowings carrying floating rates of interest. The
Company monitors interest rate movements and manages its financing arrangements having regard to prevailing market
conditions.
The following table demonstrates the sensitivity of profit before tax to a reasonably possible change in interest rates on the
portion of borrowings exposed to floating interest rates, with all other variables held constant:
The Company is exposed to price risk arising from investments in listed equity instruments, mutual funds and portfolio
investments which are measured at fair value through profit or loss.
The Company manages such risk through diversification of its investment portfolio and periodic review of investment
performance and market conditions.
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.
The Company is exposed to credit risk principally from trade receivables, cash and bank balances, deposits, investments,
derivative financial instruments and other financial assets. The carrying amount of financial assets, net of loss allowance,
represents the maximum exposure to credit risk at the reporting date.
Customer credit risk is managed in accordance with the Company''s established credit policies and procedures. The
creditworthiness of customers is evaluated having regard to their financial position, past experience, ageing of receivables
and other relevant factors.
Export receivables are substantially covered by export credit insurance / ECGC, where applicable. Outstanding trade
receivables are reviewed periodically and loss allowances are recognised in accordance with the credit loss requirements of
Ind AS 109.
The Company has concentration of credit risk in respect of certain major customers. The concentration is monitored by
management on an ongoing basis as part of its credit risk management process.
Cash, Bank Deposits and Investments
Credit risk relating to balances with banks and financial institutions is managed by dealing with counterparties having
acceptable credit profiles. Investments of surplus funds and derivative transactions are undertaken with approved
counterparties, having regard to counterparty credit limits and concentration of exposure.
C. Liquidity risk
Liquidity risk is the risk that the Company may encounter difficulty in meeting its financial obligations as they fall due.
The objective of liquidity risk management is to maintain sufficient liquidity and ensure that adequate funds are available to
meet the Company''s obligations. The Company manages liquidity risk by maintaining adequate cash and cash equivalents,
bank balances and available banking facilities and by monitoring forecast and actual cash flows.
The Company also monitors the maturity profile of its financial liabilities and available sources of funds to meet its obligations
as they fall due.
The primary objective of the Company''s capital management is to maintain an appropriate capital structure to support its
business operations, safeguard its ability to continue as a going concern and maximise shareholder value.
The Company manages its capital structure and makes adjustments having regard to changes in economic conditions and
business requirements.
The Company monitors capital using the net debt to equity ratio. Net debt is calculated as total borrowings less cash and
cash equivalents. A negative net debt balance represents a net cash position.
44 DERIVATIVE FINANCIAL INSTRUMENTS
The Company enters into foreign exchange forward contracts to manage its exposure to fluctuations in foreign currency
exchange rates arising primarily from export receivables and forecast export transactions. These derivative contracts are
entered into for risk management purposes and not for speculative purposes.
The counterparties to the derivative contracts are banks and financial institutions with acceptable credit profiles. The
Company considers the counterparty credit risk arising from such contracts to be not material.
The foreign exchange forward contracts are recognised at fair value in accordance with the Company''s accounting policy for
financial instruments. Changes in fair value are recognised in the Statement of Profit and Loss, as applicable.
44.4 Unhedged Foreign Currency Exposure
Unhedged foreign currency exposure relating to trade payables as at March 31,2026 and March 31,2025 was Nil.
45. INVESTMENT IN MIL STEEL AND POWER PRIVATE LIMITED
The Company holds 19.27% equity interest in MIL Steel and Power Private Limited as at March 31, 2026. The Company
had sold 112,500 equity shares of MIL Steel and Power Private Limited on September 29, 2023, consequent to which the
Company ceased to exercise significant influence over the investee. Accordingly, MIL Steel and Power Private Limited ceased
to be classified as an associate of the Company with effect from that date. The investment is accounted for in accordance
with Ind AS 109 - Financial Instruments.
46 DISCLOSURE PURSUANT TO SECTION 186(4) OF THE COMPANIES ACT, 2013
(a) Investments
Particulars of investments made by the Company are disclosed in Note 5 - Non-current Investments and Note 13 - Current
Investments to the financial statements.
48. REVENUE FROM CONTRACTS WITH CUSTOMERS - IND AS 115
The Company recognises revenue from contracts with customers when control of the goods or services is transferred to the
customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those
goods or services. The disclosures relating to revenue from contracts with customers are set out below:
The fair values of the financial assets and liabilities are included at the amount 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 following methods and assumptions were used to estimate the fair values:
1. The fair value of cash and cash equivalents, trade receivables, trade payables, current financial liabilities and borrowings
approximate their carrying amount largely due to the short-term nature of these instruments. Monetary assets and
liabilities denominated in foreign currencies, including export receivables and balances in foreign currency bank
accounts, are translated at the closing exchange rate in accordance with Ind AS 21, "The Effects of Changes in Foreign
Exchange Ratesâ Such foreign currency translation does not, by itself, constitute fair value measurement.
2. Long-term debt has been contracted at floating rates of interest, which are reset at short intervals. Fair value of variable
interest rate borrowings approximates their carrying value of such long-term debt approximates fair value subject to
adjustments made for transaction cost.
3. Investments in listed equity instruments and mutual funds for which quoted market prices are available are measured
using quoted market prices / published net asset values, as applicable, at the reporting date.
Investments managed through Portfolio Management Services are measured based on the fair values of the underlying
investments as reported by the respective portfolio managers. The appropriate fair value hierarchy classification is
determined based on the observability of the inputs used in such valuation.
4. The fair value of derivative financial instruments is determined based on observable market inputs including currency
spot and forward rates, yield curves, interest rates and currency volatility. Derivative financial instruments are valued
using generally accepted valuation models based on contractual terms, period to maturity and other observable market
parameters. Management has evaluated the credit risk and non-performance risk associated with the counterparties
and considers such risks to be insignificant and not requiring any material credit valuation adjustment.
Fair value hierarchy
The Company categorizes assets and liabilities measured at fair value into one of three levels depending on the ability
to observe inputs employed in their measurement which are described as follows:
During the years ended March 31,2026 and March 31,2025, there were no transfers between Level 1 and Level 2 fair value
measurements. Derivative financial instruments are classified within Level 2 of the fair value hierarchy.
Derivative financial instruments are classified under Level 2 since their fair values are determined using observable market
inputs. The principal inputs used in valuing foreign exchange forward contracts include forward foreign currency exchange
rates and interest rates used to discount future cash flows.
The fair value of liquid mutual funds is based on quoted price.
Derivative financial instruments are valued based on quoted prices for similar assets and liabilities in active markets or inputs
that are directly or indirectly observable in the marketplace. The inputs used under level II market valuation technique for
forward contracts are Forward foreign currency exchange rates and Interest rates to discount future cash flow.
50 EVENTS AFTER THE REPORTING PERIOD
There were no material adjusting or non-adjusting events occurring between March 31,2026 and the date on which these
financial statements were approved by the Board of Directors that require adjustment to, or disclosure in, these financial
statements.
The Company has used accounting software for maintaining its books of account which has a feature of recording audit
trail (edit log) facility. The audit trail feature has operated throughout the year for all relevant transactions recorded in the
software and the audit trail has been preserved by the Company in accordance with the statutory requirements for record
retention, to the extent applicable
Previous year figures have been regrouped / reclassified, wherever necessary, to conform to the current year''s presentation.
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