a) Statement of compliance & Basis of Preparation
The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under
Section 133 of the Companies Act, 2013 ('the Act') read together with the Companies (Indian Accounting Standards) Rules,
2015 and related amendments as notified from time to time (hereinafter referred as 'Ind AS').
Accordingly, the Company has prepared these Financial Statements which comprise the Balance Sheet as at 31 March,
2026, the Statement of Profit and Loss for the year ended 31 March 2025, the Statement of Cash Flows for the year ended
31 March 2026 and the Statement of Changes in Equity for the year ended as on that date, and accounting policies and other
explanatory information (together hereinafter referred to as 'financial statements').
These financial statements are approved for issue by the Board of Directors on 28th May, 2026.
The financial statements have been prepared on accrual and going concern basis. The accounting policies are applied
consistently to all the periods presented in the financial statements. All assets and liabilities have been classified as current
or non-current as per the Company's normal operating cycle and other criteria as set out in the Division II of Schedule III to
the Companies Act, 2013.
b) Basis of measurement
The financial statements have been prepared on a historical cost basis, except for the following items, which are measured
on an alternative basis on each reporting date.
• Certain financial assets and liabilities (including derivative instruments) are measured at fair value.
• Defined benefit plans - plan assets are measured at fair value.
c) Rounding of amounts
All amounts disclosed in the Financial Statements including notes have been rounded off to the nearest lakhs in Indian
Rupee (INR 00,000) as per the requirements of Schedule III of the Companies Act, 2013; unless otherwise indicated.
a) Property, plant and equipment
• Recognition and measurement
Freehold land is carried at historical cost. All other items of property, plant and equipment are stated at Cost of
acquisition less accumulated depreciation and accumulated impairment loss, if any. Cost comprises of purchase
price, non-refundable taxes and duties and any directly attributable costs of bringing the asset to its working
condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.
Borrowing costs attributable to construction or acquisition of a qualifying asset for the period up to the date,
the asset is ready for its intended use are included in the cost of the asset to which they relate. Pre-operative
expenditure including trial run expenses comprising of revenue expenses incurred as reduced by the revenue
generated during the period up to the date, the asset is ready for its intended use are treated as part of costs of
that asset.
Capital work-in-progress comprises of the cost of property, plant and equipment that are not yet completely ready
for their intended use as at the balance sheet date.
• Subsequent costs
The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying amount
of the item if it is probable that the future economic benefits embodied within the part will flow to the company
and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. Repairs and
maintenance cost are recognized in the statement of profit and loss when incurred.
• Derecognition
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
expected from its use or disposal. Gains and losses on disposal of an item of property, plant and equipmentare
determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment,
and are recognised net and disclosed within other income or expenses in the statement of profit and loss.
• Depreciation methods, estimated useful lives and residual value
Depreciation is provided on the Straight Line Method (SLM) over the estimated useful lives of the assets
considering the nature, estimated usage, operating conditions, past history of replacement, anticipated
technological changes, manufacturer's warranties and maintenance support. Taking into account these factors,
the Company has decided to retain the useful life hitherto adopted for various categories of property, plant and
equipments which are different from those prescribed in Schedule II of the Act.
Type of Asset Estimated useful llfe (Years)
b) Intangible assets
• Recognition and measurement
Intangible assets are recognised when the asset is identifiable, is within the control of the company, it is probable
that the future economic benefits that are attributable to the asset will flow to the company and cost of the asset
can be reliably measured.
Intangible assets acquired by the company that have finite useful lives are measured at cost less accumulated
amortisation and any accumulated impairment losses.
Research costs are charged to the statement of Profit and Loss in the year in which they are incurred. Product
development costs incurred on new vehicle platform, engines, transmission and new products are recognised
as intangible assets, when feasibility has been established, the Company has committed technical, financial and
other resources to complete the development and it is probable that asset will generate future economic benefits.
The cost of an internally generated intangible asset is the sum of directly attributable expenditure incurred from
the date when the intangible asset first meets the recognition criteria to the completion of its development. Interest
cost incurred is capitalised up to the date the asset is ready for its intended use for qualifying assets, based on
borrowings incurred specifically for financing the asset or the weighted average rate of all other borrowings if no
specific borrowings have been incurred for the asset. Product development expenditure is measured at cost less
accumulated amortisation and impairment, if any amortisation is not recorded on product engineering in progress
until development is complete.
• Derecognition
An item of intangible asset is derecognised upon disposal or when no future economic benefits are expected
from its use or disposal. Gains and losses on disposal of intangible asset are determined by comparing the
proceeds from disposal with the carrying amount of intangible asset and are recognised net and disclosed within
other income or expenses in the statement of profit and loss.
• Amortisation
Amortisation is calculated over the cost of the asset, or other amount substituted for cost. Amortisation is
recognised in statement of profit and loss on a straight-line basis over the estimated useful lives of intangible
assets from the date that they are available for use, since this most closely reflects the expected pattern of
consumption of the future economic benefits embodied in the asset.
c) Leases
The Company as a lessee
The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use
asset is initially measured at cost.
The right-of-use assets are subsequently depreciated over the shorter of the asset's useful life and the lease term on
a straight-line basis. In addition, the right-of-use asset is reduced by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability.
The lease liability is initially measured at amortised cost at the present value of the future lease payments, discounted
using the interest rate implicit in the lease or, if that rate cannot be readily determined, using the incremental borrowing
rate.
It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is
a change in the Company's estimate of the amount expected to be payable under a residual value guarantee, or if the
Company changes its assessment of whether it will exercise a purchase, extension or termination option.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the
right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to
zero.
The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have
a lease term of 12 months or less and leases of low-value assets. The Company recognises the lease payments
associated with these leases as an expense on a straight-line basis over the lease term.
The Company as lessor
When the Company acts as a lessor, it determines at lease inception whether each lease is a finance lease or an
operating lease.
Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract
is classified as a finance lease. All other leases are classified as operating leases.
When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sublease separately.
The sublease is classified as a finance or operating lease by reference to the right-of-use asset arising from the head
lease.
The Company recognises lease payments received under operating leases as income on a straight-line basis over the
lease term.
d) Impairment of assets
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets
and investments in associate and joint ventures to determine whether there is any indication that those assets have
suffered an impairment loss.
If any such indication exists, the recoverable amount, which is the higher of the value in use or fair value less cost to
sell, of the asset or cash-generating unit, as the case may be, is estimated and impairment loss (if any) is recognised
and the carrying amount is reduced to its recoverable amount.
In assessing the value in use, the estimated future cash flows are discounted to their present value. When it is not
possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of
the cash-generating unit to which the asset belongs.
Except for goodwill, when an impairment loss subsequently reverses, the carrying amount of the asset or a cash¬
generating unit is increased to the revised estimate of its recoverable amount, so that the increased carrying amount
does not exceed the carrying amount that would have been determined had no impairment loss been recognised for
the asset (or cash-generating unit) earlier.
Goodwill, intangible assets and intangible assets not yet available for use are tested for impairment at least annually
and whenever there is an indication that the asset may be impaired.
Reversal of impairment loss
An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is Reversed only to the
extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been recognised.
e) Inventories
Inventories are valued at the lower of cost and net realisable value.
Cost of raw materials, components and consumables are ascertained on a moving weighted average basis. Cost,
including fixed and variable production overheads, are allocated to work-in-progress and finished goods determined
on a full absorption cost basis.
Cost of inventories also include all other costs incurred in bringing the inventories to their present location and condition.
Net realisable value is the estimated selling price in the ordinary course of business less estimated cost of completion
and selling expenses.
f) Cash and cash equivalents
Cash and Cash Equivalent include Cash on hand, Demand deposit with Banks, Other short-term highly liquid
investments with original maturities of three months or less. Bank overdrafts are shown within short-term borrowings
in the balance sheet.
g) Revenue recognition
i) Sale of Products
The Company recognises revenues from sale of products measured at the amount of transaction price (net of
variable consideration), when it satisfies its performance obligation at a point in time which is when products are
delivered to buyers. Accordingly revenue is recognised when all significant risks and rewards of ownership of
the goods are passed on to the buyer, recovery of the consideration is probable, the associated costs can be
estimated reliably, there is no continuing effective control over, or managerial involvement with, the goods, and
the amount of revenue can be measured reliably. It excludes Goods and Service tax (GST), sales tax wherever
applicable. The transaction price of goods sold is net of variable consideration on account of various discounts
and schemes offered by the Company as part of the contract.
ii) Sale of Services
Sale of services includes maintenance services provided to the customers.
h) Other income
• Interest income
Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to
the Company and the amount of income can be measured reliably. Interest income is accrued on, 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 asset's net
carrying amount on initial recognition.
• Dividend
Dividends are recognised in the statement of profit and loss only when the right to receive the payment is
established, it is probable that the economic benefits associated with the dividend will flow to the company, and
the amount can be measured reliably.
• Export Incentive
Export incentives are recognised when the right to receive credit as per the terms of incentives is established in
respect of the exports made and when there is no significant uncertainty regarding the ultimate collection of the
relevant export proceeds.
i) Borrowing costs:
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 profit or loss in the period in which they are incurred.
j) Foreign currency transactions and balances
Transactions in foreign currency are recorded at exchange rates prevailing at the date of transactions. Exchange
differences arising on foreign exchange transactions settled during the year are recognized in the statement of profit
and loss of the year.
Monetary assets and liabilities denominated in foreign currencies which are outstanding, as at the reporting period are
translated at the closing exchange rates and the resultant exchange differences are recognized in the statement of
profit and loss.
Non-monetary assets and liabilities denominated in foreign currencies that are measured in terms of historical cost are
translated using the exchange rate at the date of the transaction.
The date of the transaction for the purpose of determining the exchange rate to use on the initial recognition of the
related asset, expense or income (or part of it) is the date on which entity initially recognizes the non-monetary asset
or non-monetary liability arising from the payment or receipt of advance.
k) Employee Benefits
Short-term employee benefits
All employee benefits payable wholly within twelve months of rendering the services are classified as short¬
term employee benefits. Benefits such as salaries, wages, expected cost of bonus and short-term compensated
absences,performance pay etc. are recognized in the period in which the employee renders the related service.
Post-employment benefits
Defined Contribution plans
The company's approved Superannuation Scheme, Central Provident Fund Scheme and National Pension Scheme
are a defined contribution plan. The company has no further payment obligations once the contributions have been
paid. The contributions are recognised as employee benefit expenses when they are due.
Defined contribution to Employees Pension Scheme 1995 is made to Government Provident Fund Authority and
recognized as expense as and when due.
Defined Benefit plans
The Company operates a defined benefit gratuity plan, which requires contributions to be made to a fund set up by
Life Insurance Corporation of India. The present value of the obligation under such defined benefit plans is determined
based on actuarial valuation using the projected unit credit method, which recognises each period of service as
giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final
obligation.
The obligation is measured at the present value of the estimated future cash flows. The discount rates used for
determining the present value of the obligation under defined benefit plans, is based on the market yields on government
securities as at the reporting date, having maturity periods approximating to the terms of related obligations.
Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included
in net interest on the net defined benefit liability and the return on plan assets, are recognised immediately in the
balance sheet with a corresponding debit or credit to retained earnings through Other Comprehensive Income (OCI) in
the period in which they occur. Remeasurements are not reclassified to the statement of profit and loss in subsequent
periods.
In case of funded plans, the fair value of the plan's assets is reduced from the gross obligation under the defined
benefit plans, to recognise the obligation on net basis.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are
recognised immediately in profit or loss as past service cost.
Net interest is calculated by applying the discount rate to the net defined benefit liability or the fair value of the plan
asset. The cost is included in employee benefit expense in the statement of profit and loss.
Other long-term employee benefits
The liabilities for earned leave which are not expected to be settled within twelve months after the end of the reporting
period in which the employee render the related service. They are therefore measured as the present value of expected
future payments to be made in respect of services provided by employee up to the end of the reporting period using the
projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that
have terms approximating the terms of the related obligation. Remeasurements as a result of experience adjustments
and change in actuarial assumptions are recognised in the Statement of Profit and Loss. The obligations are presented
as current liabilities in the Balance Sheet if the entity does not have an unconditional right to defer settlement for at
least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
l) Taxation
Current tax is determined as the amount of tax payable in respect of taxable income for the year. The Company's
current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting
period.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes at the reporting date.Deferred tax liabilities are
recognised for all taxable temporary differences, except:
• When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction
that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss and does not give rise to equal taxable and deductible temporary differences;
• In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests
in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable
that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and
any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences, and the carry forward of unused tax credits and unused
tax losses can be utilised, except
• When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of
an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss and does not give rise to equal taxable and deductible
temporary differences;
• In respect of deductible temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the
temporary differences will reverse in the foreseeable future and taxable profit will be available against which the
temporary differences can be utilised.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other
comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction
either in other comprehensive income or directly in equity.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period 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.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period 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 period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the
manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of
its assets and liabilities.
m) Government Grant:
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 revenue, it is recognised in the Statement of Profit and Loss
on a systematic basis over the periods to which they relate.
When the grant relates to an asset, it is treated as deferred income and recognised in the Statement of Profit and Loss
on a systematic basis over the useful life of the asset using capital approach.
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