The following discussion is intended to convey our managements perspective on our financial condition and operating performance as at and for the Fiscals 2025, 2024 and 2023, including the notes thereto and reports thereon, each included in this document, and our assessment of the factors that may affect our prospects and performance in future periods. Our Audited Financial Statements are prepared in accordance with Ind AS, the Companies Act, which differ in certain material respects from IFRS, U.S. GAAP and GAAP in other countries. Accordingly, the degree to which our Audited Financial Statements in this document will provide meaningful information to a prospective investor in countries other than India is entirely dependent on the readers level of familiarity with Ind AS. For details, see "Risk Factors We have included certain Non-GAAP Measures, industry metrics and key performance indicators related to our operations and financial performance in this Draft Red Herring Prospectus that are subject to inherent measurement challenges. These Non-GAAP Measures, industry metrics and key performance indicators may not be comparable with financial, or industry-related statistical information of similar nomenclature computed and presented by other companies. Such supplemental financial and operational information is therefore of limited utility as an analytical tool for investors and there can be no assurance that there will not be any issues or such tools will be accurate going forward" on page 77. The Restated Financial Information is based on our Audited Financial Statements and is restated in accordance with the Companies Act, 2013, and the SEBI ICDR Regulations. Our audited financial statements are prepared in accordance with Indian Accounting Standards, which differs in certain material respects with IFRS and U.S. GAAP.
Some of the information in this section, including information with respect to our business plans and strategies, contain forward-looking statements that involve risks and uncertainties. Prospective investors should read "Forward-Looking Statements" beginning on page 23 for a discussion of the risks and uncertainties related to those statements along with "Risk Factors", "Industry Overview" and "Financial Information" and "Managements Discussion and Analysis of Financial Condition and Results of Operations" beginning on pages 46, 164, 328 and 383, respectively, for a discussion of certain factors that may affect our business, financial condition or results of operations. Our actual results may differ materially from those expressed in or implied by these forward-looking statements.
Our Companys financial year commences on April 1 and ends on March 31 of the immediately subsequent year, and references to a particular Fiscal year are to the 12 months period ended March 31 of that particular year. Unless otherwise indicated or the context otherwise requires, the financial information for Fiscal 2025, Fiscal 2024 and Fiscal 2023, included herein is based on or derived from our Restated Financial Information included in this Draft Red Herring Prospectus. For further information, see "Restated Consolidated Financial Information" beginning on page 328. Please also refer to "Definitions and Abbreviations" on page 1 for certain terms used in this section. Unless the context otherwise requires, in this section, references to "we", "us", "our" "our Company" or "the Company" refers to Knack Packaging Limited.
Unless otherwise indicated, industry and market data used in this section has been derived from the industry report titled "Industry Report on Specialized Packaging Sector" dated September 3, 2025 (the "Technopak
Report", and the date of the Report, the "Report Date") which is exclusively prepared for the purpose of the
Offer and issued by Technopak Advisors Private Limited ("Technopak") and is exclusively commissioned for an agreed fee and paid for by the Company in connection with the Offer. Technopak was appointed pursuant to an letter of authorisation entered into with our Company dated February 17, 2025. Technopak is not related to our Company. The data included herein includes excerpts from the Report and may have been re-ordered by us for the purposes of presentation. Further, the Report was prepared on the basis of information as of specific dates and opinions in the Report may be based on estimates, projections, forecasts and assumptions that may be as of such dates. A copy of the Report is available on the website of our Company at http://www.knackpackaging.com/INV/Industry_Report.pdf from the date of the Draft Red Herring Prospectus until the Bid/ Offer Closing Date. Further, the Report is not a recommendation to invest or disinvest For more information and risks in relation to commissioned reports, see "Risk Factors Industry information included in this Draft Red Herring Prospectus has been derived from an industry report exclusively commissioned and paid for by our Company." on page 75. Also see, "Certain Conventions, Presentation of Financial, Industry and Market Data Industry and Market Data" on page 19.
OVERVIEW
We are one of the leading, integrated, innovation-oriented, export led and sustainable oriented packaging solutions provider, offering a diverse range of packaging solutions, including Printed and Laminated Woven Polypropylene ("PLWPP") bags and PLWPP Pinch Bottom bags that are customized, high-strength packaging solutions for a wide range of sectors, including food products and pet foods. Our solutions enhance brand visibility on packaging, reduce the risk of counterfeiting, and improve operational performance. We hold approximately 10.1% of market share in the Indian market for flexible bulk PLWPP bags, including PLWPP pinch bottom bags in Fiscal 2025. (Source: Technopak Report). We are also one of the early movers in the manufacturing of BOPP/ PLWPP bags, and the first company in India (and Asia) to provide laser cut and easy-open feature integrated into their PLWPP pinch bottom bags (Source: Technopak Report).With a legacy of over two decades of our Promoters, we offer a wide array of bulk packaging solution which has been developed over the decades through technological enhancements and industry experience. We also provide add-on solutions such as circular & back seam construction, half, full & register window, zig-zag cut, heatcut & bladecut etc., providing customers with enhanced and customized packaging options. Our diverse range of packaging solutions along with customised add-ons, makes us a one stop solution for our customers.
We have been serving top brands under a B2B2C model, including household Indian names such as Baba Agro Food Limited, Drools Pet Food Private Limited, Ebro India Private Limited, Laxmi Protein Products Pvt. Limited, Mosaic India Private Limited, KRBL Limited, Shriram Woven Sacks and DCM Shriram Limited, as well as international brands across 68 countries like Cristo S.A., Sacos y Empaques Internacionales S.A. de C.V., Cargill and Repi Soap and Detergent PLC. These brands use our 5kg to 50kg packaging solutions, to offer their products which are typically in powder or granule form, to their respective customers. The key industries which we serve include grains and pulses rice, dal, lentils, etc., flour & spices, sugar, salts, fruits & nuts, animal & pet foods, agriculture, seeds, charcoal, detergents powders & granules, fertilizers, chemicals, cement, tile adhesives, building materials, mineral bags etc. (Source: Technopak Report)
Besides having the fastest growth in profitability, with a 50.30% CAGR growth in PAT and 36.50% CAGR growth in EBITDA between Fiscal 2022 to 2024, we have the second highest Return on Equity (ROE) and Return on Capital Employed (ROCE) amongst the selected direct peer group in the Fiscal 2024. Additionally, in the, same year, our Company recorded the highest EBITDA Margin and PAT Margin (Source: Technopak Report).
We follow vertically integrated manufacturing processes (from PP granule processing to tapes, fabric, printing, lamination and packaging the final products of PLWPP bags and PLWPP pinch bottom bags) at our manufacturing facilities in Gujarat, spanning a net land area of 1,118,629.09 sq. ft. with 726,636.00 sq. ft.of constructed space respectively. We also have a dedicated workforce of 1,300 employees including both on-roll and contractual staff, as of July 31, 2025. Further, these facilities are equipped with advanced machineries ensuring aggregate production capacity of 36,400 MTPA.
Through our in-house printing facility, we offer end-to-end design services to clients, including artwork selection or creation and cylinder development. As of July 31, 2025, we possess 67,000+ cylinders developed for over 1,900 customers and 12,000+ SKUs, through which we serve as custodians of our customers branding material, thereby fostering long-term customer retention. We maintain a 92,065.00 sq. ft warehouse dedicated to cylinder storage. This service helps us maintain consistent print quality across our products, which is essential for maintaining brand consistency for our customers.
While our product portfolio includes a variety of flexible packaging solutions, our PLWPP Bags with laser cut and easy open features stand out due to its several advantages over conventional woven bags, including:
Enhanced Strength & Durability: Our pinch-bottom structure coupled with heat-sealed laser-cut closure ensures a secure, leak-proof finish that withstands handling and transportation stress.
Six-Sides Branding: Our bag offers six-side branding facility (like a brick shape) which provides ample surface area for high-impact branding on all sides, offering shelf visibility and stronger retail presence. Thereby this results in increase in customers sales & profitability
Tamper-Proof & Security Features: We offer optional hot stamping, along with RFID, barcode, QR code, and NFC tagging, with our bags to help prevent duplication and ensure product authenticity.
Protection from Moisture & Bacteria: The sealed pinch closure of our bag safeguards contents from environmental exposure which helps in maintaining product quality and hygiene.
User-Friendly Design: We offer easy-open and zipper closure options with our bags which allows users to conveniently open, reseal, and securely store the product after each use.
Space Efficiency: Our bags improve stacking stability and optimize space, which is ideal for export, storage, and logistics.
Our company has globally recognized certifications such as ISO 90001:2015 for quality management systems, ISO 14001:2015 for environment management systems, ISO 45001:2015 for occupational health and safety management systems, issued by ISOQAR and EN 15343 for recycled plastic content traceability. We also have the BRCGS packaging material certification and ECOVADIS (Bronze) medal in the year 2024, certifying our compliance with global quality standards and sustainability management. We have also been officially recognized as a Two Star Export House by the Government of India.
For Fiscal 2020 and Fiscal 2021 we were awarded second-best exporter of Woven Sacks/Bags/Fabric (other than FIBCs) and in Fiscal 2023, we were awarded the best exporter in the same category, at the Export Excellence Awards organized by the Plastics Export Promotion Council, under the aegis of the Ministry of Commerce & Industry. This pan-India presence and export to 68 countries enable us to efficiently serve a diverse customer base, respond swiftly to market demands, and expand our reach in both domestic and export segments. Our diverse customer base across globe is represented below:
Our key performance indicators for Fiscals 2025, 2024 and 2023, based on the Restated Consolidated Financial Information, are set forth in the table below.
| Particulars | Units | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 |
| Financial Performance Indicators | ||||
| 1 Revenue from Operations | ( in millions) | 7,364.90 | 6,545.59 | 5,184.42 |
| 2 Revenue Growth | (%) | 12.52% | 26.25% | 13.99% |
| 3 Gross Profit | ( in millions) | 2,917.22 | 2,615.20 | 1,767.20 |
| 4 Gross Profit Margin | (%) | 39.61% | 39.95% | 34.09% |
| 5 EBITDA | ( in millions) | 1,443.37 | 1,013.74 | 548.35 |
| 6 EBITDA Margin | (%) | 19.31% | 15.38% | 10.58% |
| 7 Profit after tax (PAT) | ( in millions) | 738.10 | 459.77 | 198.70 |
| 8 PAT Margin | (%) | 9.88% | 6.98% | 3.83% |
| 9 Return on capital employed (RoCE) | (%) | 50.36% | 45.42% | 29.19% |
| 10 Return on Invested capital (RoIC) | (%) | 34.62% | 29.51% | 18.95% |
| 11 Debt Equity Ratio | (in times) | 0.80 | 1.23 | 1.29 |
| 12 Return on Equity | (%) | 41.70% | 38.38% | 24.60% |
| Operational Performance Indicators | ||||
| 13 Total Quantity Sold | (MT) | 34,471.76 | 30,590.10 | 24,214.19 |
| 14 EBITDA per KG | ( ) | 41.87 | 33.14 | 22.65 |
Notes:
1. Revenue from Operations means the revenue from contract with customers and other operating income of our company as recognized in the Restated Consolidated Financial Information.
2. Revenue Growth (%) is calculated as a percentage of Revenue from Operations of the relevant year minus Revenue from Operations of the preceding year, divided by Revenue from Operations of the preceding year.
3. Gross Profit is calculated as Revenue from Operations as reduced by cost of materials consumed, purchase of stock in trade, change in inventories of finished goods, work-in-progress, stock-in-trade.
4. Gross profit margin is calculated as Gross Profit for the year divided by Revenue from Operations.
5. EBITDA is calculated as restated profit before tax/(loss) for the year and adding back finance cost and depreciation and amortisation expense.
6. EBITDA Margin (%) is computed as EBITDA as a percentage of total income. Total income is computed as revenue from operations and other income as appearing in the Restated Consolidated Financial Information.
7. Profit after tax for the year ("PAT") as appearing in the Restated Consolidated Financial Information.
8. PAT Margin (%) is calculated as Profit after tax for the year as a % of Total Income. Total income is computed as revenue from operations and other income as appearing in the Restated Consolidated Financial Information.
9. Return on Capital Employed (RoCE) is calculated as Earnings before interest and taxes (EBIT) divided by average Capital Employed. EBIT is calculated as EBITDA minus depreciation and amortisation. Capital Employed is computed as Total Equity (equity share capital plus other equity plus non-controlling interest) and total non-current liabilities except non-current lease liabilities and deferred tax liability.
10. Return on Invested capital (%) is calculated as Earnings before interest and taxes (EBIT) divided by Average Invested Capital. EBIT is calculated as EBITDA minus depreciation & amortisation. Invested Capital is computed as Total Equity (equity share capital plus other equity plus non-controlling interest) plus total borrowings (current and non-current) except lease liabilities, and minus cash & cash equivalents, other balances with banks and capital work in progress.
11. Debt-equity ratio is calculated by dividing total debt (including both current and non-current borrowings) by the total equity for the year.
Total Equity is computed as the aggregate value of Share Capital and Other Equity.
12. Return on Equity is calculated as Total Comprehensive Income for the year divided by Average Total Equity for the year. Total Equity is calculated as equity share capital plus other equity and non-controlling interest. 13. Total quantity sold.
14. EBITDA per KG is calculated by dividing total EDBITA by total quantity sold in KG.
We are also focused on sustainability through the use of renewable and recycled materials. At present, 80% of our energy requirements are met by renewable energy sources, with a target to reach 90% by 2030. We recycle the wastewater generated in our operations across our manufacturing facilities. To minimize waste, we reprocess production scrap into value-added products such as black PP fabrics, plastic chairs, and plastic pallets. These initiatives will lead to a 5% reduction in production wastage and we are further working toward achieving a 10% reduction in energy consumption per kilogram of production, along with a 30% reduction in greenhouse gas emissions per kilogram, by 2030.
Our Journey
In 2006, the companys Promoter, Mr. Rashmin Patel, set up Knack Packaging as proprietorship firm for manufacturing of BOPP/ Printed and Laminated Woven Polypropylene bags. Furthermore, Knack Packaging was one of the early movers in the manufacturing of BOPP/ Printed and Laminated Woven Polypropylene bags. Subsequently in 2012, the Promoter along with other partners namely Alpeshbhai Tulsibhai Patel, Rashminbhai Tulsibhai Patel, Pravinkumar Ambalal Patel, Tulsibhai Keshavlal Patel and Patel Kamlesh Ambalal set up Knack Packaging as a Partnership Firm.
In 2013, our company was incorporated as a private limited company, with an initial production capacity of 400 MT/month. In 2014, we diversified our portfolio by introducing Printed and Laminated Four Layer Metallized bags with Windows. Further product development in 2016 included Printed and Laminated Woven PP Block Bottom Bags, matt/gloss effect bags and registered window bags. Thereafter, shopping bags and bottom gusseted bags were introduced in 2017. By 2018 we focused our export market growth more into US and Europe. Our expansion continued in 2020, as we began setting up an additional manufacturing facility at Indrad, Gujarat with new production lines.
In 2021, our Company acquired its subsidiary Knack Packaging SA (RF) Proprietary Limited in the Republic of South Africa, which is engaged in the business of importing and selling our products, including HDPE/PP Tapes,
Woven Fabrics, Woven Bags and PLWPP Bags. In 2022, our product portfolio expanded to include Printed and Laminated Woven PP Pinch Bottom Bags.
Further, our commitment to sustainability led to the installation of rooftop solar panels in 2022, followed by the commissioning of a windmill in 2023. In Fiscal 2025, we operationalized a solar farm with an installed capacity of 11.00 MW. For further details, please see "Our Business Infrastructure & Utilities" on page 279. Our Company entered in a joint venture agreement with SACOS Y Empaques Internacionales to establish Sayem Knack S.A. de C.V. ("Sayem Knack"), to deepen our strategic expansion in Latin America and the USA.
SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATION AND FINANCIAL CONDITION
The results of our operations and our financial conditions are affected by numerous factors and uncertainties, many of which may be beyond our control, including as discussed in "Our Business" and "Risk Factors", on pages 257 and 46. Set forth below is a discussion of certain factors that we believe may be expected to have a significant effect on our financial condition and results of operations:
Growth and diversification of end-user industries in which our customers operate
We serve various reputed customers in India and globally, across wide range of diversified end-user industries including pulses, rice, lentils, fertilizers, pet food, etc. This diversification allows us to mitigate risks concentration risk associated with any particular market, product, end-use industry, or geography. Each product category is tailored to meet the specific needs of our customers.
The general economic environment and consumer purchase patterns in these industries may have an impact on our revenue and operations. Variations in customer demand for our products in these industries may also impact our production volumes. Our inability to expand to other end-user industries may increase our exposure to the growth of the end-user industries we currently serve. The end-user industries we serve may be impacted by general economic conditions, which can therefore impact our results of operations.
Our Product Mix
We specialise in the manufacturing of a large basket of branded flexible packaging solutions including Printed and Laminated Woven Polypropylene ("PLWPP") bags, PLWPP pinch bottom bag, etc. A diverse product mix increases sales, reduces risks of dependency on any single or few products or product categories and optimizes costs and resources. It also enables us to meet a wider range of customer needs and creates new sources of revenue leading to economies of scale. Our ability to grow our revenue from operations depends on our ability to introduce new products, which address the requirements of our customers. Our ability to expand our product portfolio will also depend on new product development based on emerging market trends and customer needs. For details of revenue in relation to each of our product categories, see "Our Business Our Products" on page 267.
Raw Material Prices
Our cost of material consumed contains primarily Poly Propylene Granules ("PP Granules"). and also includes
BOPP films, Inks and chemicals like adhesive etc. Set out below are details of our cost of materials consumed (which includes cost of raw materials) for the periods indicated:
| Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | ||||
| Particulars | Amount ( million) | % of total expenses | Amount ( million) | % of total expenses | Amount ( million) | % of total expenses |
| Cost of materials consumed | 4,382.65 | 67.62 | 3,959.86 | 66.30 | 3,378.68 | 68.65 |
While we have historically been able to largely pass on changes in raw material prices to our customers, the ability to do so depends on the customer segment. For certain customers, prices are linked to raw material fluctuations (both upward and downward), whereas for others, pricing is fixed based on the purchase order terms.
Our procurement team effectively monitors and controls the average price of our primary raw material, PP Granules. We maintain an optimum level of stock of PP Granules to fulfil the scheduled sale orders and simultaneously manage pending sales orders. This strategy helps mitigate the risk of price fluctuations in PP Granules, ensuring stability and continuity in our operations.
Relationship with and dependence on key suppliers
We are significantly dependent on our top 10 suppliers for raw materials, with whom we do not have long-term contracts for the purchase of raw material, and we purchase such raw materials and inputs on spot order basis. The table below sets forth the aggregate contribution of our largest supplier, our top 5 suppliers and top 10 suppliers (determined based on cost of material consumed attributable to such suppliers) to our total cost of raw material consumed for the periods stated:
| Particulars | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | |||
| Amount ( million) | % of total raw materials purchased | Amount ( million) | % of total raw materials purchased | Amount ( million) | % of total raw materials purchased | |
| Our largest Supplier | 1,418.39 | 31.96 | 1,305.61 | 32.55 | 1,023.92 | 30.03 |
| Top 5 Suppliers | 2,614.43 | 58.92 | 2,508.93 | 62.55 | 2,004.38 | 58.78 |
| Top 10 Suppliers | 3,261.83 | 73.51 | 3,088.31 | 76.99 | 2,541.21 | 74.53 |
For details, please see, "Risk Factor We are significantly dependent on our key suppliers for sourcing raw materials and we do not have any contractual arrangements with them. Accordingly, our inability to maintain relationship with key suppliers may adversely impact our business, operations and financial results." on page 51.
Capacity utilization
Our Company currently has three manufacturing facilities in Gujarat, India. Our ability to manage our capacity utilization is critical to maintaining our operating efficiencies. Optimum levels of capacity utilization and an enhanced standard of quality at our manufacturing facilities is essential to sustain the growth of our operations, which in turn impacts our competitiveness and profitability. While our customers provide us with volume projections, they do not make commitments. Since the number of purchase orders that our customers place with us may fluctuate from quarter to quarter, our revenues, results of operations and cash flows have varied in the past and may continue to do so in the future.
The key driver in the growth of our revenue from operations is the volume of products manufactured and sold by us. Increased sales volume favourably affects our results of operations as it enables us to benefit from economies of scale in procurement and manufacturing and improves our operating margins through our ability to leverage our relatively fixed cost base. For details of our capacity utilization, see "Our Business Capacity and Capacity Utilization" on page 272. While our capacity utilization is dependent upon our ability to optimally operate our manufacturing facilities, which are subject to various risks, including those beyond our control, such as the breakdown and failure of equipment or industrial accidents, severe weather conditions and natural disasters, having an extensive manufacturing network enables us to benefit from diversification and manage risks.
Consumer Perceptions and Demand for Sustainable Packaging and stringent regulations governing plastic products
Our business is susceptible to changing consumer perceptions and the increasing demand for sustainable packaging. Growing environmental awareness among consumers has led to heightened scrutiny of packaging practices, particularly regarding plastic use.
Governments in India and globally are implementing stricter regulations and policies aimed at reducing plastic waste, increasing recycling rates and promoting sustainable materials. These regulations will require us to ensure compliance in India and our export markets, which would increase our customers compliance costs which in turn could impact our revenues and profitability. For further details, please see, "Risk Factor Certain customers or regulatory requirements necessitate process modifications, which may result in increased costs, operational complexity or delays in implementation." on page 55.
Our business is also subject to various statutory and regulatory permits, licenses, registrations and approvals. For more details, see "Government and Other Approvals" on page 425. These permits, licenses, registrations and approvals are subject to periodic renewals and may impose certain terms and conditions, both of which require us to incur significant costs. The terms and conditions which govern our license and approvals may become more stringent in the future and require significant capital expenditure to introduce new technology and machinery to comply with such changes. Any changes in government policies relating to the plastics packaging industry could adversely affect our business and results of operations. For further details, please see, "Risk Factor We require a number of approvals, NOCs, licences, registrations and permits in the ordinary course for our existing business and any failure to obtain the same will adversely affect our operations, business and profitability Market Competition" on page 53.
We operate in a highly competitive and dynamic environment, both in Indian and overseas markets. The industry is highly fragmented and characterized by significant diversity, serving a broad spectrum of products and industries. This competition is intensified by several factors, such as introduction of sustainable alternative, changing regulatory landscape, government initiatives and incentives, and export focus.
However, there is no assurance that these initiatives will fully offset the competitive pressures we face. Many competitors may be larger and benefit from greater economies of scale and operating efficiencies. Failure to compete effectively could adversely affect our business, financial condition, and results of operations.
SIGNIFICANT ACCOUNTING POLICIES
Set forth below is a summary of our most significant accounting policies adopted in preparation of the Restated Consolidated Financial Information.
Basis of Preparation and Presentation of Consolidated Ind AS Financial Statements
The Consolidated Ind AS Financial Statements has been prepared on the historical cost basis except for certain financial instruments measured at fair values at the end of each reporting year, as explained in the accounting policies below.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. 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, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the group takes in account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of Ind AS 102, leasing transactions that are within the scope of Ind AS 116, fair value of plan within the scope of Ind AS 19 and measurements that have some similarities to fair value but are not fair value, such as net realisable value in Ind AS 2 or value in use in Ind AS 36.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurements in its entirety, which are described as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.
The material accounting policy information related to preparation of the Consolidated Financial Statements have been discussed in the respective notes.
The Consolidated Ind AS Financial Statements are presented in Rs. and all values are rounded to the nearest Millions (Transactions below Rs. 5,000.00 denoted as Rs. 0.00), unless otherwise indicated.
Current and non-current classifications
An Asset is classified as current when it satisfies any of the following criteria: i. It is expected to be realized or intended to be sold or consumed in normal operating cycle ii. It is held primarily for the purpose of trading iii. It is expected to be realized within twelve months after the reporting period, or iv. It is Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is classified as current when it satisfies any of the following criteria: i. It is expected to be settled in normal operating cycle ii. It is held primarily for the purpose of trading iii. It is due to be settled within twelve months after the reporting period, or iv. There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
All other liabilities are classified as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The group has identified twelve months as its operating cycle for the purpose of current and non-current classification of assets and liabilities.
(i) Basis of Consolidation
Subsidiary:
The Consolidated Financial Statements incorporate the financial statements of the Parent and its subsidiary. Control is achieved where the Company: has power over the investee is exposed to, or has rights, to variable returns from its involvement with the investee; and has the ability to use its power to affect its returns
The Company reassess whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.
When the Company has less than majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the
Companys voting rights in an investee are sufficient to give it power, including:
The size of the Companys holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
Potential voting rights held by the Company, other vote holders or other parties; Rights arising from other contractual arrangements; and
Any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders meetings.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit and loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary.
Consolidation procedure:
Combination of Assets, Liabilities, Equity, Income, Expenses, and Cash Flows
The assets, liabilities, equity, income, expenses, and cash flows of the Parent Company and its subsidiary are combined in the consolidated Financial Statements. For this purpose, the income and expenses of the subsidiary are based on the values of the assets and liabilities recognized as of the acquisition date.
Elimination of Investment and Equity
The carrying amount of the Parent Companys investment in its subsidiary is offset (eliminated) against the Parent Companys share of the equity in its subsidiary. The business combinations policy will outline the treatment of any associated goodwill.
Elimination of Intragroup Transactions
Intragroup assets, liabilities, equity, income, expenses, and cash flows arising from transactions between entities within the group are eliminated in full. This includes the elimination of profits or losses resulting from intragroup transactions that are recognized in assets, such as inventory and fixed assets. Additionally, intragroup losses may signal an impairment, which requires recognition in the Consolidated Financial Statements. Temporary differences arising from the elimination of intragroup profits and losses are subject to the application of Ind AS 12 - Income Taxes.
Attribution of Profit or Loss and Other Comprehensive Income
The profit or loss, as well as each component of other comprehensive income, is attributed to the Parent Company. In cases where necessary, adjustments are made to the financial statements of subsidiaries to align their accounting policies with those of the group.
The Parent Company has following investments in subsidiary:
| Ownership Interest as at | |||||
| Name of the company | Country of Incorporation | Relationship | March 31, 2025 | March 31, 2024 | March 31 , 2023 |
| Knack Packaging SA (RF) PTY Ltd | South Africa | Subsidiary | 100% | 100% | 100% |
(iii) Business Combination
Business combinations are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. For this purpose, the liabilities assumed include contingent liabilities representing present obligation and they are measured at their acquisition date fair values irrespective of the fact that outflow of resources embodying economic benefits is not probable. Acquisition-related costs are generally recognised in Statement of Profit and Loss as incurred. At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value at the acquisition date, except that:
Deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised and measured in accordance with Ind AS 12 Income Taxes and Ind AS 19 Employee Benefits respectively;
Liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based payment arrangements of the Group entered into to replace share-based payment arrangements of the acquiree are measured in accordance with Ind AS 102 Share-based Payments at the acquisition date; and
Assets (or disposal groups) that are classified as held for sale in accordance with Ind AS 105, "Non-current Assets Held for Sale and Discontinued Operations" are measured in accordance with that Standard.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirers previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.
In case of bargain purchase, before recognizing gain in respect thereof, the Group determines whether there exists clear evidence of the underlying reasons for classifying the business combination as a bargain purchase. Thereafter, the Group reassesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and recognizes any additional assets or liabilities that are identified in that reassessment. The Group then reviews the procedures used to measure the amounts that Ind AS requires for the purposes of calculating the bargain purchase. If the gain remains after this reassessment and review, the Group recognizes it in other comprehensive income and accumulates the same in equity as capital reserve. This gain is attributed to the acquirer. If there does not exist clear evidence of the underlying reasons for classifying the business combination as a bargain purchase, the Group recognises the gain, after reassessing and reviewing, directly in equity as capital reserve.
When a business combination is achieved in stages, the Groups previously held equity interest in the acquiree is remeasured to fair value at the acquisition date (i.e. the date when the Group obtains control) and the resulting gain or loss, if any, is recognised in the Statement of Profit and Loss.
If the initial accounting for a business combination is incomplete by the end of the financial year, the provisional amounts for which the accounting is incomplete shall be disclosed in the financial statements and provisional amounts recognized at the acquisition date shall be retrospectively adjusted during the measurement period. During the measurement period, the group shall also recognize additional assets or liabilities if the new information is obtained about facts and circumstances that existed as of the acquisition date and if known, would have resulted in the recognition of those assets and liabilities as of that date. However, the measurement period shall not exceed the period of one year from the acquisition date.
(iv) Significant accounting judgements, accounting estimates and assumptions
The preparation of the Consolidated Financial Statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities (including contingent liabilities) and the accompanying disclosures. Estimates and underlying assumptions are reviewed on an ongoing basis.
Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of The Group. Such changes are reflected in the assumptions when they occur.
Material estimates and assumptions are required in particular for:
i. Useful life of property, plant and equipment:
This involves determination of the estimated useful life of property, plant and equipment. Useful life of these assets is based on the life prescribed in Schedule II to the Companies Act, 2013 which are as follows:
| Asset Group | Useful Life |
| Building | 30 years |
| Plant & Machinery | 8 years |
| Furniture & Fixture | 10 Years |
| Office Equipment | 3-5 years |
| Vehicles | 8-10 years |
| Windmill | 22 years |
| Computers | 3 years |
| Software and Licences | 3 years |
| Cylinder | 2 years |
| Factory Road | 10 years |
| Solar Power Equipment | 10 years |
ii. Taxes
Pursuant to the announcement of the changes in the corporate tax regime, the Companies have an option to either opt for the new tax regime or continue to pay taxes as per the old tax regime together with the other benefits available to the Companies including utilisation of the MAT credit. During the year ended March 31, 2025, the Parent Company had elected to exercise the option permitted under Section 115BAA of the Income Tax Act, 1961 to pay corporate income tax at 22% plus surcharge and cess (aggregating to tax rate of 25.168%). Accordingly, the Parent Company has measured its current tax and deferred tax charge for the year ended March 31, 2025 on the basis of the new tax regime.
iii. Fair value measurements
When the fair values of financial assets or financial liabilities recorded or disclosed in the financial statements cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include consideration of inputs such as liquidity risk, credit risk and volatility.
iv. Impairment
a) Investments
The Group reviews carrying value of its investments carried at cost annually, or more frequently when there is indication for impairments. If the recoverable amount is less than it carrying amount, the impairment loss is accounted for.
b) Other than Investment
The Group applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the financial assets and credit risk exposure. The group follows Simplified Approach for recognition of impairment loss allowance on all trade receivables or contractual receivables. Under the simplified approach the Company does not track changes in credit risk, but it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. ECL is the difference between all contracted cash flows that are due to the group in accordance with the contract and all the cash flows that the group expects to receive, discounted at the original EIR. ECL impairment loss allowance (or reversal) recognised during the period is recognised as income/ (expense) in the statement of profit and loss.
v. Inventories
Inventories are stated at the lower of cost and net realisable value. In estimating the net realisable value of inventories, the Group makes an estimate of average selling prices reduced by gross profit.
(ii) Investment Property
Assets which are held for long-term rental yields or for capital appreciation or both, are classified as Investment Properties. Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any.
The Group has elected to regard previous GAAP carrying values of investment properties as deemed cost at the date of transition to Ind AS i.e. April 01, 2022. The Group depreciates investment properties over their estimated useful lives as specified in Schedule II to the Companies Act, 2013. Investment properties are derecognised / transferred when they have been disposed off, have been used for own purpose of the group or when they have permanently withdrawn from use and no future economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognised in Statement of Profit and Loss in the period in which the property is derecognised.
(iii) Revenue recognition
Sale of Goods
The Group recognises revenue when control over the promised goods or services is transferred to the customer at an amount that reflects the consideration to which the group expects to be entitled in exchange for those goods or services.
Revenue is adjusted for variable consideration such as discounts, rebates, refunds, credits, price concessions, incentives, or other similar items in a contract when they are highly probable to be provided. The amount of revenue excludes any amount collected on behalf of third parties. The Group recognises revenue generally at the point in time when the products are delivered to customers. In contracts where freights are arranged by group and recovered from the customers, the same is treated as a separate performance obligation and revenue is recognised when such freight services are render
Contract Balances:
i. Contract assets:
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration.
ii. Trade receivables:
A receivable is recognised when the goods are delivered and to the extent that it has an unconditional contractual right to receive cash or other financial assets (i.e., only the passage of time is required before payment of the consideration is due). Trade receivables are derecognised when the group transfers substantially all the risks and rewards of ownership of the asset to another party including discounting of bills on a non-recourse basis.
iii. Contract liabilities:
A contract liability is the obligation to transfer goods or services to a customer for which the company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the group transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the group performs under the contract including Advance received from customer.
iv. Refund liabilities:
In the case of sales returns, a refund liability is recognized. The group issues a credit note for the sales return, and the amount is adjusted against the customers next bill.
v. Interest Income
Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the group and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that assets net carrying amount on initial recognition.
(iv) Leases
The Group 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.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.
Right-of-use assets
The Group 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 re-measurement 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 shorter of the lease term and the estimated useful lives of the assets.
If ownership of the leased asset transfers to the Group 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.
Lease Liability
At the commencement date of the lease, the Group 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. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group 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 re-measured 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.
Short term Leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases (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 of office equipment that are considered to be low value. Leae payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.
Group as a lessor
Leases in which the Group does not transfer substantially all the risks and rewards of ownership of an asset is classified as operating leases. Rental income from operating lease is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.
Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from the Group to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the Groups net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.
(v) Foreign Currencies
The functional currency of the Group is determined on the basis of the primary economic environment in which it operates. The functional currency of the group is Indian National Rupee (INR).
The transactions in currencies other than the entitys functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting year, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the reporting date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences arising on settlement or translation of monetary items are recognised in statement of profit and loss in the year in which they arise except for:
Exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings;
Exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to Statement of Profit and Loss on repayment of the monetary items.
(vi) Borrowing Cost
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in the Statement of Profit and Loss in the year in which they are incurred. The Group determines the amount of borrowing costs eligible for capitalisation as the actual borrowing costs incurred on that borrowing during the year less any interest income earned on temporary investment of specific borrowings pending their expenditure on qualifying assets, to the extent that an entity borrows funds specifically for the purpose of obtaining a qualifying asset. In case if the group borrows generally and uses the funds for obtaining a qualifying asset, borrowing costs eligible for capitalisation are determined by applying a capitalisation rate to the expenditures on that asset.
(vii) Government Grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset.
When the Group receives grants of non-monetary assets, the asset and the grant are recorded at fair value amounts and released to profit or loss over the expected useful life in a pattern of consumption of the benefit of the underlying asset by equal annual instalments. When loans or similar assistance are provided by governments or related institutions, with an interest rate below the current applicable market rate, the effect of this favourable interest is regarded as a government grant.
The loan or assistance is initially recognised and measured at fair value and the government grant is measured as the difference between the initial carrying value of the loan and the proceeds received. The loan is subsequently measured as per the accounting policy applicable to financial liabilities.
Export incentives under various schemes are recognized as income when the right to receive such entitlements/ credit as per the terms of the respective schemes is established and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.
(viii) Employee benefits
Short Term Employee Benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick/ contingency leave in the year the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.
Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.
Retirement and other employee benefits:
Defined contribution plans
A defined contribution plan is post-employment benefit plan under which an entity pays specified contributions to separate entity and has no obligation to pay any further amounts. The group makes specified obligations towards employee provident fund and employee state insurance to Government administered provident fund scheme and ESI scheme which is a defined contribution plan. The groups contributions are recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.
Defined Benefit Plan:
Gratuity being a defined benefit scheme is accrued based on actuarial valuations, carried out by an independent actuary as at the balance sheet date using the projected unit credit method. These contributions are covered through Group Gratuity Scheme with Life Insurance Corporation of India and are charged against revenue.
Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the Balance Sheet with a charge or credit recognised in other comprehensive income in the year in which they occur.
Re-measurement recognised in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to Statement of Profit and Loss. Past service cost is recognised in Statement of Profit and Loss in the year of a plan amendment or when the Group recognizes corresponding restructuring cost whichever is earlier.
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. Defined benefit costs are categorised as follows: 1. service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements); 2. net interest expense or income; and
3. re-measurement
The Group presents the first two components of defined benefit costs in Statement of Profit and Loss in the line item ‘Employee benefits expenses.
Curtailment gains and losses are accounted for as past service costs. The retirement benefit obligation recognised in the Balance Sheet represents the actual deficit or surplus in the Groups defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.
For the purpose of presentation of defined benefit plans, the allocation between short term and long-term provisions has been made as determined by an actuary.
Compensated absences:
Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The group measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.
(ix) Taxes
Income tax expense represents the sum of the tax currently payable and the net change in the deferred tax asset or liability during the year. Current and deferred taxes are recognised in Statement of Profit and Loss, except when they relate to items that are recognised in other comprehensive income or directly in equity.
Current Tax
Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-Tax Act, 1961 enacted in India. The tax rates and tax laws used to compute the amount are those that are enacted or substantially enacted, at the reporting date.
Current income tax relating to items recognised outside the statement of profit and loss is recognised outside the statement of profit and loss (either in other comprehensive income (OCI) or in equity). Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Further, deferred tax is not recognised on the items that does not give rise to equal taxable and deductible temporary differences. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.
The carrying amount of deferred tax assets is reviewed at the end of each reporting year and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting year.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Current and deferred tax are recognised in profit and loss except when they are relating to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.
(x) Property, plant and equipment (herein referred to as "PPE") Tangible Fixed Assets: Recognition and Measurement:
Fixed assets are stated at cost of acquisition or construction. They are stated at historical cost less accumulated depreciation and impairment losses, if any. The cost of property, plant and equipment comprises its purchase price net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use, including relevant borrowing costs for qualifying assets and any expected costs of decommissioning.
Subsequent Expenditure:
Subsequent expenditure relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated with the expenditure will flow to the group and the cost of the item can be measured reliably. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the consolidated Statement of Profit and Loss for the period during which such expenses are incurred. Major shut-down and overhaul expenditure is capitalised as the activities undertaken improves the economic benefits expected to arise from the asset.
Depreciation and amortisation methods and useful lives: i. Pursuant to the enactment of the Companies Act 2013, the Parent Company has applied the estimated useful lives as specified in Schedule-II, which is described below. Accordingly, the unamortized carrying value is being depreciated over the revised/remaining useful lives. ii. Depreciation on fixed assets is provided on Straight Line Method as per useful life prescribed in Schedule II to the Companies Act, 2013 except otherwise mentioned:
| Asset Group | Useful Life |
| Cylinders | 2 years |
| Solar Power Plant | 10 years |
| Office Equipment | 3-5years |
iii. Depreciation on asset acquired / disposed off during the period is provided on pro-rata basis with reference to the date of put to use/disposal. iv. When Significant parts of plant and equipment are required to be replaced at intervals, the
Parent Company depreciates them based on remaining useful life of property, plant and equipment. v. Freehold lands are not depreciated.
Residual values
The group reviews the residual value, useful lives and depreciation method annually and, if expectations differ from previous estimates, the change is accounted for as a change in accounting estimate on a prospective basis.
De-recognition of PPE
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in Statement of Profit and Loss.
Gain and loss on disposal of item of PPE
Gains or losses arising from de recognition/ sale proceeds of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized.
Capital Work in Progress:
Assets in the course of construction are capitalised in the assets under Capital work in progress. At the point when an asset is operating at managements intended use, the cost of construction is transferred to the appropriate category of property, plant and equipment and depreciation commences. Costs associated with the commissioning of an asset and any obligatory decommissioning costs are capitalised where the asset is available for use but incapable of operating at normal levels, revenue (net of cost) generated from production during the trial period is capitalised.
Assets Held for Use:
Property, plant and equipment held for use in the production, supply or administrative purposes, are stated in the balance sheet at cost less accumulated depreciation and accumulated impairment losses, if any.
(xi) Impairment of non-financial assets
At the end of each reporting year, the group reviews the carrying amounts of its property, plant and equipment and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the group is not yet committed to or significant future investments that will enhance the assets performance being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are most relevant to goodwill and other intangibles with indefinite useful lives recognised by the group.
(xii) Inventories
Inventories are stated at the lower of cost and net realisable value.
Cost means:
Cost of raw materials and stock-in-trade include cost of purchase and other costs incurred in bringing the inventories to their present location and condition.
Cost of semi-finished, finished goods and work in progress include cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity but excluding borrowing costs.
NRV means:
Net realizable value is the estimated selling price in the ordinary course of business, less estimated cost of completion and estimated cost necessary to make the sale.
The basis of determining cost for various categories of inventories are as follows:
Raw Material: Weighted average basis Stores & Spares: Weighted average basis
Semi-finished and Finished Goods: Cost or NRV, whichever is lower
Stock-in-trade: Cost or NRV, whichever is lower
(xiii) Provision, Contingent Liabilities and Contingent Assets
Provisions
Provisions are recognised when the group has a present obligation (legal or constructive), as a result of past events, and it is probable that an outflow of resources, that can be reliably estimated, will be required to settle such an obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a 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 Liability
A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the group or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Group does not recognize a contingent liability but discloses it in the Consolidated Financial Statements, unless the possibility of an outflow of resources embodying economic benefits is remote.
In the normal course of business, contingent liabilities may arise from litigation and other claims against the group. Potential liabilities that are possible but not probable of crystalizing or are very difficult to quantify reliably are treated as contingent liabilities. Such liabilities are disclosed in the notes but are not recognised. The cases which have been determined as remote by the group are not disclosed.
Contingent Assets
Contingent assets are neither recognised nor disclosed in the Consolidated Financial Statements unless when an inflow of economic benefits is probable.
(xiv) Financial Instrument
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 (except trade receivable, measured at transaction cost) and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through Statement of Profit and Loss (FVTPL)) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit and loss are recognised immediately in Statement of Profit and Loss.
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by a group are recognised at the proceeds received, net of direct issue costs.
Financial Assets
a) Recognition and initial measurement:
All Financial assets (except investment in subsidiary) is initially recognised at fair value and, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. Purchases and sales of financial assets are recognised on the trade date, which is the date on which the group becomes a party to the contractual provisions of the instrument.
b) Classification of financial assets:
Financial assets are classified, at initial recognition and subsequently measured at amortised cost, fair value through other comprehensive income (FVOCI), and fair value through profit and loss (FVTPL). A financial asset is measured at amortised cost if it meets both of the following conditions:
The asset is held within a business model whose objective is to hold assets 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.
This category is the most relevant to the group. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss. This category generally applies to trade and other receivables.
A financial asset is measured through Other Comprehensive Income (FVOCI) if it meets both of the following conditions:
The asset is 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.
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognised in the Other Comprehensive Income (OCI). However, the group recognises interest income, impairment losses & reversals and foreign exchange gain or loss in the Statement of Profit and Loss. On de-recognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity to Statement of Profit and Loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.
A financial asset is measured through Profit and Loss account (FVTPL) if it meets both of the following conditions:
The asset is 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.
FVTPL is a residual category for debt instruments and default category for equity instruments. Financial assets included within the FVTPL category are measured at fair value with all changes recognised in the statement of profit and loss.
In addition, the group may elect to designate a debt instrument, which otherwise meets amortised cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch). The group has not designated any debt instrument as at FVTPL.
c) De-recognition of financial assets:
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.
On de-recognition of a financial asset, the difference between the assets carrying amount and the sum of the consideration received and receivable, the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss if such gain or loss would have otherwise been recognised in profit or loss on disposal of that financial asset.
d) Impairment of financial assets:
The Group applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the financial assets and credit risk exposure. The group follows Simplified Approach for recognition of impairment loss allowance on all trade receivables or contractual receivables.
Under the simplified approach the group does not track changes in credit risk, but it recognises impairment loss allowance based on lifetime ECL at each reporting date, right from its initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used.
ECL is the difference between all contracted cash flows that are due to the group in accordance with the contract and all the cash flows that the group expects to receive, discounted at the original EIR. ECL impairment loss allowance (or reversal) recognised during the period is recognised as income / (expense) in the statement of profit and loss.
e) Effective Interest Method:
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL. Interest income is recognized in the statement of profit and loss and is included in the ‘Other income line item.
Financial Liabilities
a) Recognition and initial measurement:
Financial liabilities are classified as either financial liabilities ‘at FVTPL or ‘other financial liabilities.
Financial liabilities at FVTPL:
Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is designated as at FVTPL.
A financial liability is classified as held for trading if:
It has been incurred principally for the purpose of repurchasing it in the near term; or
on initial recognition it is part of a portfolio of identified financial instruments that the group manages together and has a recent actual pattern of short-term profit-taking; or it is a derivative that is not designated and effective as a hedging instrument.
A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial recognition if: such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the groups documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or it forms part of a contract containing one or more embedded derivatives, and Ind AS 109 permits the entire combined contract to be designated as at FVTPL in accordance with Ind AS 109.
(xv) Segment reporting
The Group is engaged in the business of producing PP/HDPE Woven Sacks and BOPP Laminated PP Woven Bags, hence there are no separate reportable segments as per Ind AS 108. There are no material individual markets for geographical segments for the segment revenues or results or assets.
(xvi) Cash Flows and Cash and Cash Equivalents
Consolidated Statement of cash flows is prepared in accordance with the indirect method prescribed in the IND AS 7. For the purpose of presentation in the consolidated statement of cash flows, cash and cash equivalents includes cash on hand, cheques and drafts on hand, deposits held with Banks, other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and book overdrafts. However, Book overdrafts are shown within borrowings in current liabilities in the balance sheet for the purpose of presentation.
(xvii) Earnings Per Share
Basic Earnings Per Share is computed by dividing the net profit attributable to the equity shareholders of the company to the weighted average number of Shares outstanding during the period & Diluted earnings per share is computed by dividing the net profit attributable to the equity shareholders of the group after adjusting the effect of all dilutive potential equity shares that were outstanding during the period. The weighted average number of shares outstanding during the period includes the weighted average number of equity shares that could have issued upon conversion of all dilutive potential.
(xviii) Events occurring after the balance sheet date
The group evaluates events and transactions that occur subsequent to the balance sheet date but prior to approval of the financial statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the financial statements. There are no subsequent events to be recognised or reported that are not already disclosed.
(xix) Insurance Claims
The group accounts for insurance claims as under:
In case of total loss of asset by transferring, either the carrying cost of the relevant asset or insurance value (subject to deductibles), whichever is lower under the head "Claims Recoverable Insurance" on intimation to Insurer. In case insurance claim is less than carrying cost, the difference is charged to statement of profit and loss. In case of partial or other losses, expenditure incurred / payments made to put such assets back into use, to meet third party or other liabilities (less policy deductibles) if any, are accounted for as "Claims Recoverable
Insurance". Insurance Policy deductibles are expensed in the year the corresponding expenditure is incurred. As and when claims are finally received from Insurer, the difference, if any, between Claims Recoverable Insurance and claim received is adjusted to Profit and Loss Account.
(xx) Standards (Including Amendments) Issued but not yet effective
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2025, MCA has not notified any new standards or amendments to the existing standards applicable to the group.
3A. First time Adoption of Ind AS
The Parent Company has adopted Ind AS from April 01, 2023 and the date of transition to Ind AS is April 01, 2022. These being the first financial statements in compliance with Ind AS the impact of transition has been accounted for in opening reserves and comparable periods have been restated in accordance with Ind AS 101 "First-time Adoption of Indian Accounting Standards". The Parent Company has presented a reconciliation of its equity under Previous GAAP to its equity under Ind AS as at April 01, 2023 and March 31, 2024 and of the total comprehensive income for the year ended March 31, 2024 as required by Ind AS 101. Following are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from Previous GAAP to Ind AS.
a) Deemed cost of property, plant and equipment and intangible assets
The Parent Company has elected to continue with the carrying value of all its property, plant and equipments and intangible assets recognised as of April 01, 2022 measured as per the Previous GAAP and use that carrying value as its deemed cost on transition date
b) Deemed cost of investments in subsidiaries, joint ventures and associates
The Parent Company has elected to continue with the carrying value of its investment in subsidiaries, joint ventures and associates recognised as of April 01, 2022 measured as per the Previous GAAP and use that carrying value as its deemed cost of transition date
c) Derecognition of financial assets and financial liabilities
The Parent Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after transition date.
d) Classification and measurement of financial assets
The Parent Company has assessed classification and measurement of financial assets on the basis of facts and circumstances that exist as on transition date.
e) Impairment of financial assets
The Company has applied impairment requirements of Ind AS 109 retrospectively; however, as permitted by Ind AS 101, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognised in order to compare it with the credit risk at the transition date.
KEY COMPONENTS OF OUR STATEMENT OF PROFIT AND LOSS
Set forth below are the key components of our statement of profit and loss from our continuing operations:
Total Income
Our total income comprises of (i) revenue from operations; and (ii) other income.
Revenue from Operations
Revenue from operations comprise revenue from contracts with customers (consisting of revenue from sale of manufactured products, revenue from sale of traded goods and revenue from sale of services) and other operating revenue (consisting of export incentives and scrap sale).
Other Income
Our other income comprises of interest income from bank deposits and other deposits, foreign currency translation gain (net), net gain on disposal of property, plant and equipment, commission income, subsidy received and miscellaneous income.
Expenses
Our expenses comprise
(i) cost of material consumed;
(ii) Purchase of stock-in-trade
(iii) Change in inventories of finished goods, work-in-progress and stock-in-trade
(iv) employee benefit expense;
(v) finance cost;
(vi) depreciation and amortisation expense; and
(vii) other expenses.
Cost of materials consumed
Cost of materials consumed comprises the raw material at the beginning of the year, increased by net purchases and reduced by the discount received and the closing stock of such raw materials at the end of the year. Our raw materials primarily comprise poly propylene granules, BOPP films, inks and chemicals like adhesive.
Purchase of stock-in-trade
Purchase of stock-in-trade comprises purchase of traded goods.
Change in inventories of finished goods, work-in-progress and stock-in-trade
Change in inventories of finished goods, work-in-progress and stock-in-trade comprise net increase or decrease in stock of finished goods, work-in-progress and stock-in-trade.
Employee Benefit Expense
Employee benefit expense comprise
(i) salaries, wages and bonus
(ii) contribution to provident and other funds and
(iii) staff welfare expenses.
Finance Cost
Finance costs comprise interest and other borrowing cost on borrowings from banks or financial institutions, interest on unsecured loans, interest on lease liabilities and other borrowing costs. Other borrowing cost comprise bank charges levied in relation to our borrowings and interest on statutory dues.
Depreciation and Amortisation Expenses
Depreciation and amortisation expense primarily comprise
(i) depreciation on property, plant and equipment;
(ii) depreciation on right of use assets; and
(iii) amortization of intangible assets.
Other Expense
Other expenses comprise of consumption of stores and spare, consumption of power, fuel and electricity, freight and forwarding charges, contract labour expenses, selling and distribution, legal and professional fees repairs & maintenance, travelling and conveyance expenses.
Tax expense
Tax expense comprise of current tax, taxation related to earlier years and deferred tax.
RESULTS OF OPERATIONS
The following tables set forth our selected financial data from our restated consolidated statement of profit and loss for Fiscal 2025, Fiscal 2024 and Fiscal 2023, the components of which are also expressed as a percentage of total income for such years:
(in million, unless otherwise stated)
| Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | ||||
| Particulars | Amount | As a percentage of total Income | Amount | As a percentage of total Income | Amount | As a percentage of total Income |
| Revenue from operations | 7,364.90 | 98.54 | 6,545.59 | 99.32 | 5,184.42 | 99.99 |
| Other income | 108.85 | 1.46 | 44.49 | 0.68 | 0.32 | 0.01 |
| Total income | 7,473.75 | 100.00 | 6,590.08 | 100.00 | 5,184.74 | 100.00 |
| Cost of materials consumed | 4,382.65 | 58.64 | 3,959.86 | 60.09 | 3,378.68 | 65.17 |
| Purchase of stock-in-trade | 55.03 | 0.74 | 39.57 | 0.60 | 31.56 | 0.61 |
| Change in inventories of finished goods, work-in- progress and stock-in-trade | 10.01 | 0.13 | (69.04) | (1.05) | 6.98 | 0.13 |
| Employee benefits expense | 420.29 | 5.62 | 455.12 | 6.91 | 321.10 | 6.19 |
| Finance costs | 169.57 | 2.27 | 152.90 | 2.32 | 104.01 | 2.01 |
| Depreciation and amortization expense | 281.52 | 3.77 | 243.35 | 3.69 | 181.43 | 3.50 |
| Other expense | 1162.40 | 15.55 | 1190.82 | 18.07 | 898.08 | 17.32 |
| Total expenses | 6,481.47 | 86.72 | 5,972.58 | 90.63 | 4,921.84 | 94.93 |
| Restated Profit before tax | 992.28 | 13.28 | 617.50 | 9.37 | 262.90 | 5.07 |
| Current tax | 238.97 | 3.20 | 149.05 | 2.26 | 81.29 | 1.57 |
| Deferred tax | 15.21 | 0.20 | 8.68 | 0.13 | (17.09) | -0.33 |
| Profit / (loss) for the period/ year | 738.10 | 9.88 |
459.77 | 6.98 |
198.70 | 3.83 |
FISCAL 2025 COMPARED TO FISCAL 2024
Total Income
Total income increased by 13.41 % from 6,590.08 million in Fiscal 2024 to 7,473.75 million in Fiscal 2025 primarily due to reasons discussed below.
Revenue from operations
Revenue from operations increased by 12.52% to 7,364.90 million in Fiscal 2025 from 6,545.59 million in
Fiscal 2024 due to reasons discussed below.
Revenue from contracts with customers increased by 11.93% to 7,284.57 million in Fiscal 2025 from 6,508.28 million in Fiscal 2024 primarily due to increase in revenue from sale of manufactured products by 12.14% to 6,863.37 million in the Fiscal 2025 from 6,120.10 million in the Fiscal 2024, which is primarily attributable to the increase in the sales volumes on account of growth in business with our existing and new customers and organic growth; and revenue from sale of traded goods increased by 9.43% to 353.83 million in the Fiscal 2025 from 323.34 million in the Fiscal 2024 primarily due to increase in sale volume of our subsidiary. Our sale of services is marginally increased by 3.90% to 67.37 million in the Fiscal 2025 from 64.85 million in the Fiscal 2024 primarily due to increase in revenue from product development and design services.
Further, other operating revenue increased substantially by 115.34% to 80.33 million in the Fiscal 2025 from 37.30 million in the Fiscal 2024, due to increase in (i) export incentives by 323.66% to 24.18 million for the Fiscal 2025 from 5.71 million for the Fiscal 2024; (ii) scrap sales by 77.71% to 56.15 million in Fiscal 2025 from 31.59 million for the Fiscal 2024.
Other income
Other income increased by 144.67 % to 108.85 million in the Fiscal 2025 from 44.49 million in the Fiscal 2024 primarily due to (i) increase in interest income from banks and other by 684.74% to 7.31 million in the Fiscal 2025 from 0.93 million in the Fiscal 2024; (ii) increase in gain on disposal of plant, property and equipment to 2.32 million in the Fiscal 2025 from nil in the Fiscal 2024; (iii) increase in foreign currency translation gain by 26.01% to 54.88 million in the Fiscal 2025 from 43.55 million in the Fiscal 2024; (iv) Recognition of one time income of insurance claim of 13.31 million, Income of subsidy received of 19.17 million and commission income of 5.96 million in the Fiscal 2025 and which were not there in the Fiscal 2024.
Total Expenses
Total expenses increased by 8.52 % to 6,481.47 million in the Fiscal 2025 from 5,972.58 million in Fiscal 2024 primarily due to the reasons discussed below.
Cost of raw materials consumed
Cost of raw materials consumed increased by 10.68 % to 4,382.65 million in the Fiscal 2025 from 3,959.86 million in the Fiscal 2024 primarily due to increase in production volumes.
Purchase of stock-in-trade
Purchase of stock-in-trade increased by 39.08% to 55.03 million in the Fiscal 2025 from 39.57 million in the Fiscal 2024 due to fluctuations in customer requirements in the ordinary course of business.
Change in inventories of finished goods, work-in-progress and stock-in-trade
Changes in inventories of finished goods, work-in-progress and stock-in-trade were 10.01 million in Fiscal 2025 as compared to (69.04) million in Fiscal 2024, which reflects our increase in change in finished goods, work-in-progress and stock-in-trade inventories.
Employee benefit expense
Employee benefits expense decreased by 7.65% to 420.29 million in Fiscal 2025 from 455.12 million in Fiscal 2024 primarily due to decrease in salary, wages & bonus by 5.99% to 397.50 million in Fiscal 2025 from 422.81 million in Fiscal 2024 primarily on account of reduction in directors remuneration during the year; and decrease in staff welfare expenses by 38.37% to 15.60 million in the Fiscal 2025 from 25.31 million in the
Fiscal 2024. This marginal decrease in employee benefits expense was partially offset by increase in contribution to provident and other funds by 2.68% to 7.19 million in the Fiscal 2025 from 7.00 million in the Fiscal 2024.
Finance costs
Finance costs increased by 10.90% to 169.57 million in the Fiscal 2025 from 152.90 million in Fiscal 2024 primarily due to increase in Interest expense by 11.59% to 160.17 million in the Fiscal 2025 from 143.53 million in the Fiscal 2024 on account of increase in the utilisation of working capital loan resulting in increase in interest cost.
Depreciation and amortisation expense
Depreciation and amortisation expense increased by 15.69% to 281.52 million in the Fiscal 2025 from 243.35 million in Fiscal 2024 primarily due to increase in depreciation on property, plant and machinery by 16.02% to 263.74 million in the Fiscal 2025 from 227.32 million in the Fiscal 2024; increase in depreciation on Intangible assets by 71.39% to 1.21 million in the Fiscal 2025 from 0.71 million in the Fiscal 2024; and increase in depreciation on Right of use assets by 8.16% to 16.57 million in the Fiscal 2025 from 15.32 million in the Fiscal 2024.
Other expenses
Other expenses decreased by 2.39 % to 1,162.40 million in the Fiscal 2025 from 1190.82 million in Fiscal 2024 primarily due to decrease in Consumption of power, fuel and electricity by 13.90% to 214.20 million in the Fiscal 2025 from 248.79 million in the Fiscal 2024; decrease in selling and distribution expenses by 32.17% to 113.76 million in the Fiscal 2025 from 167.70 million in the Fiscal 2024, decrease in repair and maintenance by 1.41% to 71.27 million in the Fiscal 2025 from 72.29 million in the Fiscal 2024 and decrease in legal and professional fees by 24.92% to 28.34 million in the Fiscal 2025 from 37.75 million in the Fiscal 2024. The marginal decrease in the other expenses was partially offset by increase in consumption of stores and spares by 5.96% to 158.57 million in the Fiscal 2025 from 149.64 million in the Fiscal 2024; increase in freight and forwarding charges by 10.28% to 259.27 million in the Fiscal 2025 from 235.10 million in the Fiscal 2024, increase in contract labour expenses by 23.49% to 211.15 million in the Fiscal 2025 from 170.99 million in the Fiscal 2024; and increase in travelling and conveyance expenses by 15.37% to 54.25 million in the Fiscal 2025 to 47.03 million in the
Fiscal 2024.
Restated Profit before tax
As a result of the foregoing, our profit before tax increased by 60.69% to 992.28 million in Fiscal 2025 from 617.50 million in the Fiscal 2024.
Tax Expense
Total tax expense increased by 61.14% to 254.18 million in the Fiscal 2025 from 157.73 million in Fiscal 2024 primarily on account of increase in profits during the year. Current tax increased by 60.32% to 238.97 million in the Fiscal 2025 from 149.05 million in the Fiscal 2024 primarily on account of increase in profits during the year. Deferred tax expenses increased by 75.11% to 15.21 million in the Fiscal 2025 from 8.68 million in the
Fiscal 2024 primarily on account of increase in provision for deferred tax in the subsidiary.
Restated Profit for the year
For the various reasons discussed above, profit for the year increased by 60.54% to 738.10 million in the Fiscal 2025 from 459.77 million in the Fiscal 2024.
FISCAL 2024 COMPARED TO FISCAL 2023
Total Income
Total income increased by 27.11 % to 6,590.08 million in the Fiscal 2024 from 5,184.74 million in Fiscal 2023 primarily due to the reasons discussed below.
Revenue from operations
Revenue from operations increased by 26.25% to 6,545.59 million in Fiscal 2024 from 5,184.42 million in Fiscal 2023 due to reasons discussed below.
Revenue from contracts with customers increased by 26.42% to 6,508.28 million in Fiscal 2024 from 5,148.22 million in Fiscal 2023 primarily due to increase in revenue from sale of manufactured products by 23.34% to
6,120.10 million in the Fiscal 2024 from 4,961.94 million in the Fiscal 2023, which is primarily attributable to the increase in the sales volumes on account of growth in business with our existing and new customers and organic growth; and revenue from sale of traded goods increased by 106.32% to 323.34 million in the Fiscal 2024 from 156.71 million in the Fiscal 2023 primarily due to increase in sale volume of subsidiary. Our sale of services is substantially increased by 119.35% to 64.85 million in the Fiscal 2024 from 29.56 million in the Fiscal 2023 primarily due to increase in revenue from product development and design services.
Further, other operating revenue increased by 3.01% to 37.30 million in the Fiscal 2024 from 36.21 million in the Fiscal 2023, due to increase in scrap sales by 115.97% to 31.59 million in Fiscal 2024 from 14.63 million for the Fiscal 2023. This increase in other operating revenue is partly offset by decrease in export incentives by
73.55% to 5.71 million in the Fiscal 2024 from 21.58 million in the Fiscal 2023.
Other income
Other income increased substantially by 13,595.61% to 44.49 million in the Fiscal 2024 from 0.32 million in Fiscal 2023 primarily due to recognition of foreign currency translation gain by 43.55 million in the Fiscal 2024 which was not there in the Fiscal 2023.
Total Expenses
Total expenses increased by 21.35% to 5,972.58 million in the Fiscal 2024 from 4,921.84 million in Fiscal 2023 primarily due to the reasons discussed below and in line with the increase of 26.25% in our revenue from operations during the same Fiscals.
Cost of raw materials consumed
Cost of raw materials consumed increased by 17.20% to 3,959.86 million in Fiscal 2024 from 3,378.68 million in Fiscal 2023 primarily due to increase in sales volume.
Purchase of stock-in-trade
Purchase of stock-in-trade increased by 25.38% to 39.57 million in Fiscal 2024 from 31.56 million in Fiscal
2023 primarily due to increase in clients requirements in the ordinary course of the business.
Change in inventories of finished goods, work-in-progress and stock-in-trade
Changes in inventories of finished goods, work-in-progress and stock-in-trade was (69.04) million in Fiscal 2024 as compared to 6.98 million in Fiscal 2023, which reflects our decrease in change in finished goods, work-in-progress and stock-in-trade inventories.
Employee benefit expense
Employee benefits expense increased by 41.74% to 455.12 million in Fiscal 2024 from 321.10 million in Fiscal 2023 primarily due to increase in salary, wages & bonus by 41.17% to 422.81 million in Fiscal 2024 from 299.51 million in Fiscal 2023 primarily on account of increase in directors remuneration, increase in contribution to provident and other funds by 8.33% to 7.00 million in the Fiscal 2024 from 6.46 million in the Fiscal 2023, increase in staff welfare expenses by 67.31% to 25.31 million in the Fiscal 2024 from 15.13 million in the Fiscal
2023.
Finance costs
Finance costs increased by 47.00% to 152.90 million in the Fiscal 2024 from 104.01 million in Fiscal 2023 primarily due to increase in Interest expense by 53.78% to 143.53 million in the Fiscal 2024 from 93.33 million in the Fiscal 2023 on account of new term loan taken to fund windmill installation resulting in increase in interest cost. This increase in finance costs was partly offset by decrease in bank charges by 12.29% to 9.37 million in the Fiscal 2024 from 10.68 million in the Fiscal 2023.
Depreciation and amortisation expense
Depreciation and amortisation expense increased by 34.12% to 243.35 million in the Fiscal 2024 from 181.43 million in Fiscal 2023 primarily due to increase in depreciation on property, plant and machinery by 35.91% to
227.32 million in the Fiscal 2024 from 167.26 million in the Fiscal 2023; and increase in depreciation on Right of use assets by 14.65% to 15.32 million in the Fiscal 2024 from 13.36 million in the Fiscal 2023. This increase depreciation and amortisation expenses was partly offset by decrease in depreciation on Intangible assets by
13.26% to 0.71 million in the Fiscal 2024 from 0.81 million in the Fiscal 2023.
Other expenses
Other expenses increased by 32.60 % to 1,190.82 million in the Fiscal 2024 from 898.08 million in Fiscal 2023 primarily due to increase in consumption of stores and spares by 56.22% to 149.64 million in the Fiscal 2024 from 95.79 million in the Fiscal 2023; increase in Consumption of power, fuel and electricity by 45.86% to
248.79 million in the Fiscal 2024 from 170.56 million in the Fiscal 2023; increase in contract labour expenses by 20.59% to 170.99 million in the Fiscal 2024 from 141.79 million in the Fiscal 2023; increase in selling and distribution expenses by 90.13% to 167.70 million in the Fiscal 2024 from 88.20 million in the Fiscal 2023; increase in legal and professional fees by 22.12% to 37.75 million in the Fiscal 2024 from 30.91 million in the Fiscal 2023; and increase in repairs and maintenance by 177.17% to 72.29 million in the Fiscal 2024 from 26.08 million in the Fiscal 2023; and increase in travelling and conveyance expenses by 10.69% to 47.03 million in the Fiscal 2024 to 42.48 million in the Fiscal 2023. The increase in other expenses is partially offset by marginal decrease in freight and forwarding charges by 0.08% to 235.10 million in the Fiscal 2024 from 235.30 million in the Fiscal 2023.
Restated Profit before tax
Our profit before tax increased by 134.88% to 617.50 million in Fiscal 2024 from 262.90 million in the Fiscal
2023.
Tax Expense
Total tax expense increased by 145.71% to 157.73 million in the Fiscal 2024 from 64.20 million in Fiscal 2023 primarily on account of increase in profits during the year. Current tax increased by 83.36% to 149.05 million in the Fiscal 2024 from 81.29 million in the Fiscal 2023 primarily on account of increase in profits during the year.
The increase in total tax expense is also due to increase in deferred tax expenses by 150.81% to 8.68 million in the Fiscal 2024 from (17.09) million in the Fiscal 2023
Restated Profit for the year
For the various reasons discussed above, profit for the Fiscal 2024 increased by 131.38% to 459.77 million in the Fiscal 2024 from 198.70 million in the Fiscal 2023.
LIQUIDITY AND CAPITAL RESOURCES
Our liquidity requirements are primarily for working capital, investment in our business such as capital expenditure towards setting up manufacturing facilities and investment in technology, repayment of borrowing and debt service obligations. Historically, our primary source of liquidity has included cash generated from operations and from borrowings, both short term and long-term, including term loans and working capital facilities. As of March 31, 2025, we had 106.92 million in cash and cash equivalents. We believe that, after taking into account the expected cash to be generated from operations and our borrowings, we will have sufficient liquidity for our present requirements and anticipated requirements for capital expenditure, working capital, debt repayments, interest on debt obligations and other operating needs under our current business plans for the next 12 months. We evaluate our funding requirements periodically in light of our net cash flow from operating activities, the requirements of our business and operations and market conditions.
Cash
Our anticipated cash flows are dependent on various factors that are beyond our control. See "Risk Factors" beginning on page 46. The following table sets forth certain information relating to our cash flows in Fiscal 2025, 2024 and 2023:
(in million)
| Particulars | For the year ended March 31, 2025 | For the year ended March 31, 2024 | For the year ended March 31, 2023 |
| Net cash from/ (used) in operating activities | 931.71 | 331.67 | 410.82 |
| Net cash flows from/ (used) in investing activities | (662.92) | (692.72) | (477.62) |
| Net cash flows from/ (used) in financing activities | (191.55) | 344.22 | 67.71 |
| Net increase/ (decrease) in cash and cash equivalents | 77.24 | (16.83) | 0.91 |
| Cash and cash equivalents at the end of the year/ period | 106.92 | 29.68 | 46.51 |
Cash Flows from Operating Activities
Fiscal 2025
Net cash generated from operating activities was 931.71 million in the Fiscal 2025. Restated profit before tax for Fiscal 2025 was 992.28 million in the Fiscal 2025 which was then adjusted for non-cash/non-operating items such as depreciation and amortisation expense of 281.52 million, finance cost of 169.57 million and unrealised foreign exchange difference (net) of 13.30 million. This was partially offset by expected credit loss (net) of 3.60 million, net gain on sale of property, plant and equipment of 2.32 million, subsidy income of 19.17 million and interest income of 7.31 million. Our operating profit before working capital changes was 1,424.27 in the Fiscal
2025. Adjustments for changes in working capital comprised of the increase in inventories of 80.14 million, increase in trade and other receivables of 145.39 million and decrease in trade and other payables of 46.09 million. As a result, cash generated from operations for the Fiscal 2025 was 1,152.65 million and income tax paid (net) including interest was 220.94 million in the Fiscal 2025.
Fiscal 2024
Net cash generated from operating activities was 331.67 million in the Fiscal 2024. Restated profit before tax for
Fiscal 2024 was 617.50 million in the Fiscal 2024 which was then adjusted for non-cash/non-operating items such as depreciation and amortisation expense of 243.35 million, finance cost of 152.90 million, expected credit loss (net) of 9.27 million and net loss on sale of property, plant and equipment of 5.12 million. This was partially offset by interest income of 0.93 million and unrealised foreign exchange difference (net) of 8.85 million. Our operating profit before working capital changes was 1,018.36 in the Fiscal 2024. Adjustments for changes in working capital comprised of the increase in inventories of 143.31 million and increase in trade and other receivables of 538.61 million and this was partially offset by increase in trade and other payables of 135.87 million. As a result, cash generated from operations for the Fiscal 2024 was 472.31 million and income tax paid (net) including interest was 140.64 million in the Fiscal 2024.
Fiscal 2023
Net cash generated from operating activities was 410.82 million in the Fiscal 2023. Restated profit before tax for
Fiscal 2023 was 262.90 million in the Fiscal 2023 which was adjusted for non-cash/non-operating items such as depreciation and amortisation expense of 181.43 million, finance cost of 104.01 million, expected credit loss (net) of 19.27 million and net loss on sale of property, plant and equipment of 1.26 million. This was partially offset by unrealised foreign exchange difference (net) of 0.44 million and interest income of 0.33 million. Our operating profit before working capital changes was 568.10 in the Fiscal 2023. Adjustments for changes in working capital primarily comprised of the increase in inventories of 39.67 million and increase in trade and other receivables of 120.58 million. This was partially offset by increase in trade and other payables of 84.89 million. As a result, cash generated from operations for the Fiscal 2023 was 492.74 million and income tax paid (net) was 81.92 million in the Fiscal 2023.
Cash Flow used in Investing Activities
Fiscal 2025
Net cash used in investing activities was 662.92 million in Fiscal 2025, primarily comprising purchase of Property, plant and equipment (including capital work in progress, capital advances and capital creditors) of 576.57 million and the loans given of 98.02 million. This was partially offset by proceeds from sale of property, plant and equipment of 4.46 million and interest income of 7.21 million.
Fiscal 2024
Net cash used in investing activities was 692.72 million in Fiscal 2024, primarily comprising purchase of Property, plant and equipment (including capital work in progress, capital advances and capital creditors) of
703.00 million. This was partially offset by proceeds from sale of property, plant and equipment of 8.96 million, the loans received back of 0.39 million and interest income of 0.93 million.
Fiscal 2023
Net cash used in investing activities was 477.62 million in Fiscal 2023, primarily comprising purchase of Property, plant and equipment (including capital work in progress, capital advances and capital creditors) of 509.82 million and loan given of 2.18 million. This was partially offset by proceeds from sale of property, plant and equipment of 34.05 million and interest income of 0.33 million.
Cash Flow from/used in Financing Activities
Fiscal 2025
Net cash used in financing activities was 191.55 million in Fiscal 2025, primarily on account of repayment of long term borrowings of 168.24 million, interest paid of 154.42 million and repayment of lease liabilities of 26.78 million. This was partially offset by proceeds from long term borrowings of 152.69 million and proceeds from short term borrowings of 5.20 million.
Fiscal 2024
Net cash generated from financing activities was 344.22 million in Fiscal 2024, primarily on account of proceeds from short term borrowings of 353.17 million and proceeds from long term borrowings of 262.28 million. This was partially offset by interest paid of 137.31 million, repayment of long term borrowings of 111.16 million and payment of lease liabilities of 22.76 million.
Fiscal 2023
Net cash generated from financing activities was 67.71 million in Fiscal 2023, primarily on account of proceeds from long term borrowings of 222.85 million and proceeds from short term borrowings of 72.32 million. This was partially offset by repayment of long term borrowings of 116.31 million, interest paid of 90.92 million and payment of lease liabilities of 20.23 million.
FINANCIAL INDEBTEDNESS
As of July 31, 2025we had total borrowings of 1,780.65 million. Our total borrowing to equity ratio was 0.80 as of March 31, 2025. For further information on our indebtedness, see "Financial Indebtedness" on page 418.
The following table sets forth certain information relating to our outstanding indebtedness as of March 31, 2025, March 31, 2024 and March 31, 2023:
(in million)
| Particulars | As at March 31, 2025 | As at March 31, 2024 | As at March 31, 2023 |
| Non-current borrowings | 499.64 | 561.03 | 471.58 |
| Current borrowings | 1,220.96 | 1,169.90 | 755.06 |
| Total Borrowings | 1,720.60 | 1,730.93 | 1,226.64 |
CONTINGENT LIABILITIES AND OFF-BALANCE SHEET ARRANGEMENTS
As of March 31, 2025, March 31, 2024 and March 31, 2023 our contingent liabilities as per Ind AS 37 - Provisions, Contingent Liabilities and Contingent Assets, that have not been provided for, were as follows:
(in million)
| Particulars | As at March 31, 2025 | As at March 31, 2024 | As at March 31, 2023 |
| A) Other money for which company is contingently liable | |||
| i) Tax matters in dispute under | |||
| Appeal: | |||
| - Goods and Services Tax | Nil | 23.63 | 11.82 |
| - Income Tax | 0.72 | 0.72 | 0.72 |
| B) Bank guarantees given | |||
| i) Outstanding bank guarantees | 50.35 | 35.05 | 18.63 |
| ii) corporate guarantees given to related party | - | 467.00 | 330.00 |
| C) Commitments | |||
| i) Estimated amount of contracts remaining to be executed on capital account and not provided for | 238.23 | 141.26 | 7.59 |
| ii) Other commitments* | 43.26 | Nil | Nil |
* Our Company entered into a joint venture agreement on April 28, 2025, with "Sacos Y Empaques Internacionales S.A. de C.V." and "Mauricio Ferretis Diaz Infante" to establish a jointly controlled entity named Sayem Knack S.A. de C.V., in which our Company holds a 50% ownership interest. Sacos Y Empaques Internacionales S.A. de C.V. - a key strategic customer of our Company is engaged in the manufacture of packaging products in Mexico and is not a publicly listed entity. On August 6, 2025, the Company fulfilled its capital commitment of USD 500,000 towards the jointly controlled entity.
For further information on our contingent liabilities as at March 31, 2025, March 31, 2024 and March 31, 2023 as per Ind AS 37, see "Restated Consolidated Financial Information Note 37 Contingent Liabilities and Commitments" on page 367 .
There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that we believe are material to investors.
CONTRACTUAL OBLIGATIONS AND COMMITMENTS
The following table sets forth certain information relating to future payments due under known contractual commitments as of March 31, 2025, March 31, 2024 and March 31, 2023 aggregated by type of contractual obligation:
(in million)
| Particulars | Less than 12 months | 1 to 5 years | Above 5 years | Total |
| Year ended March 31, 2025 | ||||
| Trade payables | 363.31 | - | - | 363.31 |
| Borrowings | 1,220.96 | 499.64 | - | 1,720.60 |
| Lease Liabilities | 26.84 | 96.36 | 280.58 | 403.78 |
| Other liabilities | 31.84 | - | - | 31.84 |
| Year ended March 31, 2024 | - | - | - | |
| Trade payables | 411.84 | - | - | 411.84 |
| Borrowings | 1,169.90 | 558.43 | 2.60 | 1,730.93 |
| Lease Liabilities | 26.09 | 108.70 | 281.36 | 416.15 |
| Other liabilities | 29.09 | - | - | 29.09 |
| Year ended March 31, 2023 | - | - | - | |
| Trade payables | 302.08 | - | - | 302.08 |
| Borrowings | 755.06 | 428.67 | 42.91 | 1,226.64 |
| Lease Liabilities | 21.04 | 94.74 | 118.24 | 234.02 |
| Other liabilities | 24.55 | - | - | 24.55 |
CAPITAL EXPENDITURES
In the Fiscal 2025, Fiscal 2024 and Fiscal 2023, our capital expenditure incurred primarily towards additions to property, plant and equipment including capital work in progress, other intangible assets and right-of-use assets were 404.25 million, 811.04 million and 461.21 million respectively.
RELATED PARTY TRANSACTIONS
We enter into various transactions with related parties in the ordinary course of business. These transactions principally include remuneration paid to directors and key managerial personnel, unsecured loan take and repaid, interest paid on unsecured loan, rent expenses, sale and purchase of goods, job work services and sale and purchase of assets including capital work in progress. For further information relating to our related party transactions, see
" Restated Consolidated Financial Information Note 47 Related Party Transactions" on page 374.
CHANGES IN ACCOUNTING POLICIES
There have been no changes in our accounting policies during the Fiscals 2025, 2024 and 2023.
AUDITORS OBSERVATIONS
Except as disclosed below, there are no reservations/qualifications/adverse remarks/emphasis of matters highlighted by our Statutory Auditors in their examination report on the Restated Consolidated Financial Information.
" F.Y. 2024-25
The auditors report on the consolidated Ind AS financial statements issued by us) as at and for the year ended March 31, 2025 included the following matters which does not require any adjustments in the Restated consolidated financial information:
"Emphasis of Matter paragraph" Basis of preparation and Restriction on Distribution and Use
We draw attention to Note 2 and Note 3(i) to the Consolidated Ind AS Financial Statements which states these consolidated financial statements have been prepared in accordance with the Indian accounting
Standards ("Ind AS") as prescribed under Section 133 of the Companies Act, 2013 read with Companies
(Indian Accounting Standards) Rules, 2015, as amended, other accounting principles generally accepted in India.
The consolidated Ind AS financial statements are prepared to assist the Company for the purpose of preparation of Restated Consolidated Financial Information to be included in the Draft Red Hearing
Prospectus ("DRHP") of the Company in relation to its proposed initial public offering of equity shares as required by Section 26 of Part I of Chapter III of the Act, the SEBI ICDR Regulations and the Guidance Note and SEBI E-mail. As a result, the Consolidated Ind AS Financial Statements may not be suitable for another purpose.
Our report is intended solely for the use of Company to comply with the requirements of the SEBI ICDR Regulations, Guidance Note and SEBI E-mail. Hence, this report should not be distributed to or used by any other parties. Further, we do not accept or assume any liability or any duty of care for any other purpose or to any other person to whom this report is shown or into whose hands it may come without our prior consent in writing.
Our opinion is not modified in respect of this matter.
F.Y. 2023-24 and F.Y. 2022-23
The auditors report on the special purpose consolidated Ind AS financial statements issued by us as at and for the year ended March 31, 2024 and March 31, 2023 included the following matters which does not require any adjustments in the Restated consolidated financial information:
"Emphasis of Matter paragraph" Basis of preparation and Restriction on Distribution and Use
We draw attention to Note 2 and Note 3(i) to the Special Purpose Consolidated Ind AS Financial Statements which states these special purpose consolidated financial statements have been prepared in accordance with the Indian accounting Standards ("Ind AS") as prescribed under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2015, as amended, other accounting principles generally accepted in India.
The special purpose consolidated Ind AS financial statements are prepared to assist the Company for the purpose of preparation of Restated Consolidated Financial Information to be included in the Draft
Red Hearing Prospectus ("DRHP") of the Company in relation to its proposed initial public offering of equity shares as required by Section 26 of Part I of Chapter III of the Act, the SEBI ICDR Regulations and the Guidance Note and SEBI E-mail. As a result, the Special Purpose Consolidated Ind AS Financial Statements may not be suitable for another purpose.
Our report is intended solely for the use of Company to comply with the requirements of the SEBI ICDR Regulations, Guidance Note and SEBI E-mail. Hence, this report should not be distributed to or used by any other parties. Further, we do not accept or assume any liability or any duty of care for any other purpose or to any other person to whom this report is shown or into whose hands it may come without our prior consent in writing.
Our opinion is not modified in respect of this matter."
For further details, please see, "Risk Factor Our Statutory Auditors have made certain Emphasis of Matters in our Restated Financial Statements. Any failure to timely address these concerns may adversely affect our business, financial condition, and reputation."
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risks that are related to the normal course of our operations such as interest rate, liquidity risk, foreign exchange risk and reputational risk, which may affect economic growth in India and the value of our financial liabilities, our cash flows and our results of operations:
Credit Risk
Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. The carrying amount of financial assets represent the maximum credit risk exposure. Financial instruments that are subject to credit risk consist of trade receivables, cash & bank balances.
Trade receivables
The companys exposure to credit risk is influenced mainly by the individual characteristics of each customer. The credit period on sale of goods ranges from 0 to 90 days with or without security. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in the provision matrix. Refer Note 9 for ECL. The credit risk on cash & cash equivalent are insignificant as counterparties are banks or mutual funds with high credit ratings assigned by the rating agencies of international repute.
Movement in the expected credit loss allowance:
( in million)
| Particulars | As at March 31, 2025 | As at March 31, 2024 | As at March 31, 2023 |
| Balance at the beginning of the year | 23.23 | 14.58 | 9.73 |
| Net measurement of loss allowance | (3.11) | 8.65 | 4.85 |
| Balance at the end of the year | 20.12 | 23.23 | 14.58 |
Liquidity Risk
Liquidity Risk arises when the Company is unable to meet its short term financial obligations as and when they fall due. The Company maintains adequate liquidity in the system so as to meet its all financial liabilities timely, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the companys reputation. In addition to this, the Companys overall financial position is strong so as to meet any eventuality of liquidity tightness.
The table below summarises the maturity profile of the Companys financial liabilities based on contractual payments as at March 31, 2025:
( in million)
| Particulars | Less than 1 year | 1 year to 5 years | More than 5 years | Total |
| Borrowings | 1,220.96 | 499.64 | - | 1,720.60 |
| Trade Payables | 363.31 | - | - | 363.31 |
| Lease liabilities # | 26.84 | 96.36 | 280.58 | 403.78 |
| Other financial liabilities including export advance # | 31.84 | - | - | 31.84 |
| Total | 1,642.95 | 596.00 | 280.58 | 2,519.53 |
# excluding future interest
The table below summarises the maturity profile of the Companys financial liabilities based on contractual payments as at March 31, 2024:
( in million)
| Particulars | Less than 1 year | 1 year to 5 years | More than 5 years | Total |
| Borrowings | 1,169.90 | 558.43 | 2.60 | 1,730.93 |
| Trade Payables | 411.84 | - | - | 411.84 |
| Lease liabilities# | 26.09 | 108.70 | 281.36 | 416.15 |
| Other financial liabilities including export advance# | 29.09 | - | - | 29.09 |
| Total | 1,636.92 | 667.13 | 283.96 | 2,588.01 |
# excluding future interest
The table below summarises the maturity profile of the Companys financial liabilities based on contractual payments as at March 31, 2023:
( in million)
| Particulars | Less than 1 year | 1 year to 5 years | More than 5 years | Total |
| Borrowings | 755.06 | 428.67 | 42.91 | 1,226.64 |
| Trade Payables | 302.08 | - | - | 302.08 |
| Lease liabilities # | 21.04 | 94.74 | 118.24 | 234.02 |
| Other financial liabilities including export advance # | 24.55 | - | - | 24.55 |
| Total | 1,102.73 | 523.41 | 161.15 | 1,787.29 |
# excluding future interest
Market Risk
We are exposed to various types of market risks during the normal course of business. Market risk is the risk that fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companys exposure to the risk of changes in market interest rates relates primarily to the Companys long-term debt obligations with floating interest rates. The borrowings of the Company are denominated in rupees with a mix of floating and fixed interest rate and is subject to interest rate risk on account of any fluctuation in the base prime lending rate (BPLR) fixed by the banks. Every fluctuation in the BPLR of the bank either on the higher or lower side will result into financial loss or gain to the company. Our exposure of borrowings to interest rate changes as of the dates indicated are as follows:
( in million)
| Particulars | As of March 31, 2025 | As of March 31, 2024 | As of March 31, 2023 |
| Fixed rate borrowings | 13.37 | 128.13 | 74.85 |
| Floating rate borrowings | 1,707.22 | 1,602.80 | 1,151.80 |
| Lease liabilities | 161.25 | 165.59 | 123.65 |
| Total | 1,881.84 | 1,896.52 | 1,350.30 |
For further information, see "Financial Indebtedness" on page 418.
Inflation Risk
In recent years, India has experienced relatively high rates of inflation. Rising inflation has significantly affected the packaging industry, particularly through increased costs for energy, fuel, and labour.
UNUSUAL OR INFREQUENT EVENTS OR TRANSACTIONS
Except as described in this Draft Red Herring Prospectus, to our knowledge, there have been no unusual or infrequent events or transactions that have in the past or may in the future affect our business operations or future financial performance.
KNOWN TRENDS OR UNCERTAINTIES
Our business has been and we expect it to continue to be subject to significant economic changes arising from the trends identified above in " Significant Factors Affecting our Results of Operations" and the uncertainties described in "Risk Factors" on pages 387 and 46, respectively. To our knowledge, [except as discussed in this Draft Red Herring Prospectus, there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on revenues or income of our Company from continuing operations.
FUTURE RELATIONSHIP BETWEEN COST AND INCOME
Other than as described in "Risk Factors", "Our Business" and "Managements Discussion and Analysis of
Financial Condition and Results of Operations" on pages 46, 257 and 383 respectively, to our knowledge, there are no known factors that may adversely affect our business prospects, results of operations and financial condition.
NEW PRODUCTS OR BUSINESS SEGMENTS
Except as set out in this Draft Red Herring Prospectus in the sections "Our Business" on page 257, we have not announced and do not expect to announce in the near future any new products or business segments.
EXTENT TO WHICH MATERIAL INCREASES IN NET SALES OR REVENUE FROM OPERATIONS ARE DUE TO INCREASED SALES VOLUME, INTRODUCTION OF NEW PRODUCTS OR SERVICES OR INCREASED SALE PRICES
Except as set out in this Draft Red Herring Prospectus, there is no material increase in net sales or revenue from operations due to increased sales volume, introduction of new products or services or increased sale prices.
COMPETITIVE CONDITIONS
We operate in a competitive environment and expect to continue to compete with existing and potential competitors. See "Risk Factors", "Industry Overview" and "Our Business" on pages 46, 164 and 257, respectively, for further details on competitive conditions that we face across our various business segments.
SIGNIFICANT DEPENDENCE ON SINGLE OR FEW SUPPLIERS OR CUSTOMERS
Except as set out in this Draft Red Herring Prospectus, we do not depend on a limited number of suppliers or customers for our revenues and operations. For details, please see, "Risk Factor We are significantly dependent on our key suppliers for sourcing raw materials and we do not have any contractual arrangements with them. Accordingly, our inability to maintain relationship with key suppliers may adversely impact our business, operations and financial results." and "Risk Factor - A significant portion of our revenue from operations is derived from our existing customers. Additionally, we derive a substantial portion of our revenue from operations from few customers, and we do not have any contractual arrangements with them. Our failure to retain these customers may adversely impact our business, operations, and financial performance.
SEASONALITY/ CYCLICALITY OF BUSINESS
Our business is not seasonal in nature.
MATERIAL DEVELOPMENTS AFTER MARCH 31, 2025 THAT MAY AFFECT OUR FUTURE RESULTS OF OPERATIONS
Except as disclosed below and elsewhere in this Draft Red Herring Prospectus, there have been no significant developments the date of the last financial statements contained in this Draft Red Herring Prospectus, to the date of filing of this Draft Red Herring Prospectus, which materially and adversely affects, or is likely to affect, our trading or profitability, or the value of our assets, or our ability to pay our liabilities within the next 12 months:
1. Our Company has entered into the Joint venture agreement dated April 28, 2025 with Sayem Knack S.A. De C.V. in which our Company has joint control and a 50% ownership interest. It is one of our Companys strategic customers and is principally engaged in the production of packaging material in Mexico. SAYEM KNACK S.A. DE C.V. is not publicly listed. Our Company has agreed to make capital contributions in proportion to their interests amounting to USD 5,00,000. Our Company has made an application to RBI for approval of the aforesaid commitment.
2. Subsequent to March 31, 2025, our Company at their meeting held on May 14, 2025 approved capitalization of free reserves for issuance of 19 bonus shares for every one fully paid-up equity share having a face value of Rs. 10 each. Accordingly, the Company issued and allotted 9,50,00,000 shares as fully paid-up bonus shares by way of board resolution dated May 19, 2025.
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