1. Background
Subros Limited (“the Company”) is a public limited company incorporated in 1985 and domiciled in India, listed on
the Bombay Stock Exchange (BSE) Limited and the National Stock Exchange of India Limited (NSE). The address of
its registered office is LGF, World Trade Centre, Barakhamba Lane, New Delhi - 110001. The Company is the leading
manufacturer of thermal products for automotive applications in India, in technical collaboration with Denso Corporation,
Japan. The Company is engaged primarily in the business of manufacturing and sale of thermal products for automotive and
home air-conditioning original equipment manufacturers. The Company is a joint venture with 36.79% ownership by Suri
family of India, 20% ownership by Denso Corporation, Japan and 11.96% ownership by Suzuki Motor Corporation, Japan.
2. Basis of preparation, critical estimates and judgements
2 (a). Basis of preparation
(i) Compliance with Ind AS
The standalone financial statements comply in all material aspects with Indian Accounting Standards (Ind AS)
notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards)
Rules, 2015, as amended] and other relevant provisions of the Act.
(ii) Historical cost convention
The standalone financial statements have been prepared on the historical cost convention except for certain items
that are measured at fair values, as explained in the accounting policies.
All assets and liabilities have been classified as current or non-current according to the Company’s operating
cycle and other criteria set out in the Act. Based on the nature of products and the time between the acquisition
of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its
operating cycle as twelve months for the purpose of current and non-current classification of assets and liabilities.
(iii) New and amended standards adopted by the Company
The Ministry of Corporate Affairs vide notification dated May 7, 2025 and August 13, 2025 notified the Companies
(Indian Accounting Standards) Amendment Rules, 2025 and Companies (Indian Accounting Standards) Second
Amendment Rules, 2025, respectively, which amended certain accounting standards (see below), and are
effective for annual reporting periods beginning on or after April 1, 2025:
(a) Classification of Liabilities as Current or Non-current and Non-current Liabilities with Covenants -
Amendments to Ind AS 1
As a result of the adoption of the amendments to Ind AS 1, the Company changed its accounting policy for
the classification of borrowings:
“Borrowings are classified as current liabilities unless, at the end of the reporting period, the Company has
a right to defer settlement of the liability for at least 12 months after the reporting period.
Covenants that the Company is required to comply with, on or before the end of the reporting period, are
considered in classifying loan arrangements with covenants as current or non-current. Covenants that the
Company is required to comply with after the reporting period do not affect the classification.”
This new policy did not result in a change in the classification of the Company’s borrowings. The Company
did not make retrospective adjustments as a result of adopting the amendments to Ind AS 1.
(b) Supplier Finance Arrangements - Amendments to Ind AS 7 and Ind AS 107
As a result of the adoption of the amendments to Ind AS 7 and Ind AS 107, the Company provided new
disclosures for liabilities under supplier finance arrangements in note 11(c), note 22(b) and note 36.
(c) International Tax Reform - Pillar Two Model Rules - Amendments to Ind AS 12
The Company is not within the scope of the OECD Pillar Two Model Rules, as Pillar Two legislation has not
yet been enacted in the jurisdiction in which the Company operates.
(d) Lack of Exchangeability - Amendments to Ind AS 21
The amended Ind AS 21 have added requirements to help entities to determine whether a currency is
exchangeable into another currency, and the spot exchange rate to use where it is not.
These amendments did not have any material impact on the amounts recognised in prior periods and are
not expected to significantly affect the current or future periods.
(iv) New standards or amendments not yet adopted
Classification of Liabilities as Current or Non-current and Non-current Liabilities with Covenants - Amendments
to Ind AS 1 - This amendment also includes specific provisions that will take effect for reporting periods beginning
on or after April 1, 2026, as outlined below.
Under the existing Ind AS 1, where there is a breach of a material provision of a long-term loan arrangement
on or before the end of the reporting period with the effect that the liability becomes payable on demand on the
reporting date, the entity does not classify the liability as current, if the lender agreed, after the reporting period
and before the approval of the financial statements for issue, not to demand payment as a consequence of the
breach.
However, the amended requirements stipulate that entities will no longer be permitted to consider lender waivers
that are granted after the reporting date but before the financial statements are approved for the purpose of
classification of loans. This amendment is required to be applied retrospectively in accordance with Ind AS 8.
The Company does not expect this amendment to have an impact on its operations or standalone financialstatements.
2 (b). Critical estimates and judgements
The preparation of the standalone financial statements in conformity with Ind AS requires the management
to make estimates, judgments and assumptions that affect the application of accounting policies and the
reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities on the date of
the standalone financial statements and reported amounts of revenues and expenses for the years presented.
Accounting estimates could change from period to period. Actual results could differ from those estimates.
Estimates and underlying assumptions are reviewed at each Balance Sheet date. Appropriate changes in
estimates are made as the management becomes aware of the changes in circumstances surrounding the
estimates. Revisions to accounting estimates are recognized in the period in which the estimates are revised
and future periods affected.
Information about critical judgments in applying accounting policies, as well as estimates and assumptions
that have the significant effect to the carrying amount of assets and liabilities within the next financial year
is included in other notes to the standalone financial statements as mentioned below:
a. Measurement of employee defined benefit obligations - Refer note 28
b. Measurement and likelihood of occurrence of provisions and contingencies - Refer note 26
c. Estimation of provision for warranty - Refer note 12
d. Estimated useful life of property, plant and equipment and intangible assets - Refer note 3 & 4
e. Appropriateness of capitalization of internal development costs related to Intangible assets under
development - Refer note 4
f. Impairment of trade receivables - Refer note 5(d) & 22(b)
g. Provision for inventory obsolescence - Refer note 8
h. Impairment of property, plant and equipment and intangible assets - Refer note 3 & 4
3. Property, plant and equipment and capital work-in-progress
Accounting policy
Freehold land Is carried at historical cost. All other property, plant and equipment Is recognised at historical cost less depreciation.
Depreciation methods, estimated useful lives and residual value
Depreciation Is calculated using the straight-line method to allocate their cost, net of their residual values, over their estimated useful lives as
prescribed in Schedule II of the Companies Act, 2013 except in respect of the below mentioned assets where useful life Is determined through
technical evaluation and Is different than those prescribed in schedule II of the Companies Act, 2013,
Plant and machinery : 5-20 years
Leasehold improvements are depreciated over the shorter of their useful life or the lease term, unless the entity expects to
use the assets beyond the lease term,
The residual values are not more than 5% of the original cost of the assets, Depreciation methods, useful lives and residual values are
reviewed at least at each financial year end.
Refer note 40(xii) and 40(xxiii) for the other accounting policies relevant to property, plant and equipment and note 40(viii) for the accounting
policy relevant of impairment of property, plant and equipment,
Notes-
i) Depreciation pertaining to machineries used for manufacture of moulds has been capitalized during the year amounting to Rs 2.50 Lakhs
(Previous year Rs 46.27 Lakhs).
ii) Capital work-in-progress mainly comprises of building and plant and machinery. Additionally, CWIP as at March 31, 2025 also comprised
of freehold land pending approval for its intended use,
iii) Refer note 25 to these Standalone Financial Statements for disclosure of contractual commitments for the acquisition of property, plant
and equipment,
iv) In terms of IND AS - 16 on "Property, plant and equipment”, the Company has reviewed the useful lives and residual values of property,
plant and equipment, On such reviews, it was found that few plant and machinery (mainly comprising of dies, moulds, jigs etc,)
had reached the end of their useful lives with no tangible future economic benefits. Accordingly, this has resulted in an incremental
depreciation charge amounting to Rs. 288.31 Lakhs (Previous year Rs. 495.12 Lakhs) during the year with a consequential impact on
"Profit before tax'' of an equal amount.
v) Refer note 13(a) for government grant related to plant and machinery.
vi) The Company has leased out a part of building having gross and net carrying amount of Rs. 746.97 Lakhs and Rs. 258.02 Lakhs,
respectively, as at March 31, 2026 (March 31, 2025: Rs. 690.58 Lakhs and Rs. 211.27 Lakhs, respectively). (Also refer note 27).
vii) Refer note 32 for carrying amount of property, plant and equipment pledged as security by the Company.
viii) Refer note 19 for borrowing costs capitalised by the Company during the year under Capital work-in-progress.
*The individual names of projects have not been provided as these are related to future projects of original equipment manufacturers and are
confidential in nature.
x) Significant estimate
A. Estimated useful life of property, plant and equipment
The estimated useful lives of property, plant and equipment are based on a number of factors including the effects of obsolescence,
demand, competition, internal assessment of user experience and other economic factors such as the stability of the industry and known
technological advances.
B. Impairment of property, plant and equipment
The estimate for impairment of property, plant, and equipment involves using key assumptions such as discount rates, terminal growth
rates, sales growth and margins based on market conditions and internal forecasts. These estimates are regularly reviewed against actual
performance and regulatory changes to ensure asset values remain accurate and recoverable.
4. Intangible assets and intangible assets under development
Accounting policy
Technical knowhow
Technical knowhow comprises of costs of acquired technical knowledge from technology partner to develop the products required to
manufacture air conditioning systems and related products for new models to be launched by original equipment manufacturers,
Product development cost
Product development costs comprises of costs incurred to design and develop the products required to manufacture air conditioning systems
and related products for new models to be launched by original equipment manufacturers, The costs which can be capitalized include the cost
of material, employee payroll costs and other overheads that are directly attributable to preparing the asset for its intended use,
Technical knowhow are capitalized along with product development costs when technical and commercial feasibility of the products developed
is demonstrated, future economic benefits are probable, the Company has an intention and ability to complete and use or sell the products
and the cost can be measured reliably, in other cases such costs are taken to the Standalone Statement of Profit and Loss.
Capitalized technical knowhow and product development costs are recorded as intangible assets and amortized from the point at which the
asset is available for use,
Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, from the date they are available
for use, Estimated useful lives of intangible assets are as follows:
Technical knowhow : 8 years
Product development : 8 years
Software : 3 years
v) Significant estimates:
A. Appropriateness of capitalization of internal development costs related to Intangible assets under development
In relation to capitalisation of internal development costs in relation to intangible assets under development, significant judgement has
been made by the management in the determination of -
i) whether the costs incurred is towards development of product or in the nature of research,
ii) the costs, including payroll costs, were directly attributable to relevant projects, and
iii) key assumptions such as future revenue, margins and the discount rate used to assess the future cash flows from the expected use of
such assets once developed and capitalised.
B. Estimated useful life of intangible assets
The estimated useful lives of intangible assets are based on a number of factors including the effects of obsolescence, demand, competition,
internal assessment of user experience and other economic factors (such as the stability of the industry, and known technological advances)
to obtain the expected future cash flows from the asset.
C. Impairment of intangible assets
The estimate for impairment of intangible assets involves using key assumptions such as discount rates, terminal growth rates, sales growth
and margins based on market conditions and internal forecasts. These estimates are regularly reviewed against actual performance and
regulatory changes to ensure asset values remain accurate and recoverable.
5. Financial assets
Accounting policies
(i) Classification of financial assets at amortised cost
The Company classifies its financial assets at amortised cost only if both of the following criteria are met:
- the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and
- the contractual terms give rise to cash flows that are solely payments of principal and interest.
Financial assets classified at amortised cost comprise trade receivables, loans, investment in bond and debentures, bank deposits and
security deposits.
(ii) Classification of financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income (FVOCI) comprise:
- Equity securities (listed and unlisted) which are not held for trading, and for which the Company has irrevocably elected at initial
recognition to recognise changes in fair value through OCI rather than profit or loss. There are currently no equity securities which
are carried at FVOCI.
- Debt securities where the contractual cash flows are solely principal and interest and the objective of the Company's business model is
achieved both by collecting contractual cash flows and selling financial assets. There are currently no debt securities which are carried at
FVOCI.
(ii) Classification of financial assets at fair value through profit or loss
The Company classifies the following financial assets at fair value through profit or loss (FVTPL):
- investment in mutual funds and alternative investment funds
- equity investments for which the entity has not elected to recognise fair value gains and losses through OCI.
Derivatives
The Company enters into foreign exchange forward contracts to manage its exposure to foreign exchange rate risks.
Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently remeasured to
their fair value at the end of each reporting period. Derivatives are carried as financial assets when the fair value is positive and as financial
liabilities when the fair value is negative. The resulting gain or loss is recognised in Standalone Statement of Profit and Loss immediately.
Offsetting:
Financial assets and financial liabilities are offset and the net amount presented in the Standalone Balance Sheet when, and only when, the
Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the
asset and settle the liability simultaneously.
Refer note 40(xi) for the remaining relevant accounting policies and refer note 40(ii) for the accounting policy related to investment in joint
venture.
5(d). Trade receivables
Accounting policy
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business and reflects
Company's unconditional right to consideration (that is, payment is due only on the passage of time). Trade receivables are recognized initially
at the transaction price as they do not contain significant financing components. The Company holds the trade receivables with the objective
to collect the contractual cash flows and therefore measures them subsequently at amortized cost using the effective interest method, less
loss allowance.
For trade receivables, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected
lifetime losses to be recognized from initial recognition of the receivables. (Also refer note 22(b)).
The Company has supplier's credit arrangements where suppliers of goods and services are initially paid by Receivables Exchange of India
("Exchange”) and settlement with Exchange is done according to the terms and conditions of the arrangements. These arrangements provide
the entity with extended payment terms, or the entity's suppliers with early payment terms, compared to the related invoice payment due date.
The Company has entered into a reverse factoring arrangement for its trade payables to it's suppliers ("sellers”). For this purpose, the Company, as
"buyer,” has executed a master agreement with the Exchange for supplier financing. The Exchange operates the platform under the brand name
"RXIL”. It acts as an intermediary that connects the buyer, the seller, and participating financiers (banks or financial institutions) on a common
platform for the factoring or reverse factoring of invoices. The Company uploads the invoice details of the suppliers along with other relevant
information on the RXIL portal, where financiers bid to provide financing. Once the bid is accepted by the Company, suppliers are paid by the
financiers on or before the due date of their invoice and the Company pays the financier upto 90 days from the date of acceptance depending on
the terms. The Company bears the interest in the range of 5.25% - 8% p.a.
The primary objective of this facility is to ensure suppliers are paid on or before their due dates while enhancing the Company's working capital
position through access to financing.
Presentation in the Standalone Balance Sheet and Standalone Statement of Cash Flows
The Company derecognises the original trade payables when those payables become part of the supplier's credit arrangement. The related
Supplier's credit are presented as a separate line item on the face of the Standalone Balance Sheet, because they represent financing obtained by
the Company and are sufficiently different from trade payables. All supplier's credit are classified as current, since they are required to be settled
within 90 days from the date of acceptance.
Management considers that the finance provider settles the invoices as a payment agent on behalf of the entity. The payments made by the
finance provider are therefore presented as operating cash outflows and financing cash inflows in equal but opposite amounts at the point when
the finance provider pays the supplier. When the Company subsequently pays the amount outstanding to the finance provider, this is presented
as a financing cash outflow.
i) Information about individual provisions and critical estimates
Provision for employee benefits:
The provision for employee benefits include leave encashment, long service award and gratuity (refer note 40(xviii) for accounting policies).
Provision for warranty:
Significant estimate: Provision is made for estimated warranty claims in respect of products sold which are still under warranty at the end
of the reporting period. The Company generally offers 24 months warranties for its products. Management estimates the provision based
on historical warranty claim information and any recent trends that may suggest future claims could differ from historical amounts. The
assumptions made in relation to the current period are consistent with those in the prior years. Factors that could impact the estimated claim
information include the success of the Company's productivity and quality initiatives.
Sensitivity analysis
As at March 31, 2026, provision for warranty had a carrying amount of Rs. 530.07 Lakhs (March 31, 2025: Rs. 425.62 Lakhs). If warranty
claim costs were to differ by 10% of the management's estimates, the provision would be an estimated Rs. 53.01 Lakhs higher or lower
(March 31, 2025: Rs. 42.56 Lakhs higher or lower).
13 (a). Other non-current liabilities
Accounting policy
Government grants
Government grants relating to income are deferred and recognised in the profit or loss over the period necessary to match them with the costs
that they are intended to compensate and presented as net of the related expense.
Government grants related to assets is presented in the Standalone Balance Sheet by setting up the grant as deferred income, The grant set
up as deferred income is recognised in profit or loss on a systematic basis over the useful life of the assets and presented within other income.
Further, government grants relating to the purchase of property, plant and equipment which is not similar in nature to the other grant, are
deducted from the cost of the related assets in arriving at the carrying value of the assets,
Refer note 40(v) for the other accounting policies relevant to government grant.
Note:
a) The Company has recognised government grant relating to Gujarat Industrial Incentive Scheme 2016-21 for Karsanpura plant, The
conditions relating to the grant required the Company to set up new industrial undertaking in specified areas along with compliance with
various other specified conditions in the scheme. These conditions have been complied with and there is reasonable assurance that the
grant will be received,
During the year ended March 31, 2026, the Company has recognized a recognized a grant receivable of Rs. 5,535.65 Lakhs (previous
year: Rs. 1,133.33 Lakhs) with a corresponding credit to deferred income to be recognized as income on a systematic basis over
the useful life of the assets. The Company has recognized Rs. 1,477.69 Lakhs (previous year: Rs. 230.73 Lakhs) as income in the
Standalone Statement of Profit and Loss for the year ended March 31, 2026 corresponding to the useful life elapsed up to that date.
b) The Company has also received government grant from Ozone Cell (Ministry of Environment, Forest and Climate Change, Government of
India) related to property, plant and equipment to be procured at Nalagarh plant under the scheme 'India HCFC Phase-out Management
Plan Stage III' to phase out the consumption of HCFCs (Hydrochlorofluorocarbons) and incremental operating costs incurred for reduction
of consumption of HCFCs, As on March 31, 2025, the Company was yet to comply with the conditions attached to this grant with respect
to installation of property, plant and equipment and other conditions stated in the scheme, These conditions have been complied with
during the year ended March 31, 2026,
During the year ended March 31, 2026, the Company has received the government grant amounting to Rs. 36.24 Lakhs related to
property, plant and equipment which along with opening balance of Rs. 8.48 Lakhs has been adjusted from the cost of related assets.
Further, an amount of Rs. 70.24 Lakhs receivable against incremental operating costs has been recognised as income in the Standalone
Statement of Profit and Loss as there is reasonable assurance that the grant will be received.
c) The Company has also benefited from other forms of government assistance as mentioned in Note 18.
14. Revenue from operations
Accounting policy
a) Sale of goods
The Company manufactures and sells thermal products for automotive and home alr-condltlonlng original equipment manufacturers. Revenue
from sale of goods is recognized when control of the goods has transferred, being when the goods are delivered to the customer, the customer
has full discretion over the channel and price to sell the goods, and there is no unfulfilled obligation that could affect the customer's
acceptance of the goods. Delivery occurs when the goods have been shipped to the customer location, the risks of obsolescence and loss
have been transferred to the customer and either the customer has accepted the goods in accordance with the sales contract, the acceptance
provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have been satisfied.
Revenue from sale of goods is recognized based on the price specified in the contract, net of the estimated rebates / discounts.The goods are
sold to after-market customers with rebates / discounts based on sales targets over a 12 months period. Accumulated experience is used to
estimate and provide for the rebates / discounts, using the most likely amount method, and revenue is only recognized to the extent that it is
highly probable that a significant reversal will not occur.
The Company's obligation to repair or replace faulty products under the standard warranty terms is recognized as a provision, see note 12.
A receivable is recognized when the goods are delivered and accepted by the Customer as this is the point in time that the consideration is
unconditional because only the passage of time is required before the payment is due.
A contract liability is the obligation to transfer goods to a customer for which the Company has received consideration from the customer. If
a customer pays consideration before the Company transfers goods to the customer, a contract liability is recognised when the payment is
received.
b) Sale of services
Income from services rendered is recognized based on agreements/arrangements with the customers on the performance of service. Revenue
from services is recognized in the accounting period in which the services are rendered.
If the services rendered by the Company exceed the payment, a contract asset is recognized. If the payments exceed the services rendered,
a contract liability is recognized.
c) Financing component
The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer
and payment by the customer exceeds one year. The sales are made with credit terms, which vary from 30 days to 60 days, which is
consistent with market practice. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices in the active market. This includes listed bonds &
debentures that have quoted price and open ended mutual funds that have NAV (Net Assets Value) price available in the active market. The
fair value of investment in bonds & debentures and mutual funds which are traded in the stock exchanges and open market, respectively, is
valued using the closing price as at the reporting period end.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which
maximize the use of observable market data and rely as little as possible on entity-specif ic estimates. If all significant inputs required to fair
value an instrument are observable, the instrument is included in level 2,
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
There has been no transfer between level 1, level 2 and level 3 for the years ended March 31, 2026 and March 31, 2025.
Valuation technique used to determine fair value : The Company has entered into variety of foreign currency forward contracts to manage
its exposure to fluctuations in foreign exchange rates. These financial exposures are managed in accordance with the Company's risk
management policies and procedures. Fair value of derivative financial instruments are determined using valuation techniques based on
information derived from observable market data. Further, Investment in equity shares included in Level 3 of the fair value hierarchy have
been valued using the income approach to arrive at their fair value. In this approach the discounted cash flow method is used to capture the
present value of the expected future economic benefits to be derived from the ownership of this investment.
The carrying amounts of short term financial assets and liabilities like trade receivables, investments, cash and cash equivalents, deposit with
banks, government grant receivable, sale of property plant and equipment, insurance claim recoverable, trade payables, supplier's credit,
capital creditors, security deposit received, payable to employees are considered to be the same as their fair values, due to their short-term
nature,
The fair value of other non-current financial assets and liabilities is determined as the amount at which the instrument could be exchanged in
a current transaction between willing parties, other than in a forced or liquidation sale, The Company evaluates fair value using parameters
such as prevailing interest rates, relevant risk factors, the individual creditworthiness of the counterparty, and the specific risk characteristics
of the financial assets and liabilities. Based on this assessment, the fair value is considered to be approximately equal to the carrying amount.
Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in any
estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily
indicative of all the amounts that the Company could have realized or paid in sale transactions as of respective dates, As such, the fair value
of the financial instruments subsequent to the respective reporting dates may be different from the amounts reported at each year end.
For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.
22(b). Financial risk management
The Company's activities expose it to credit risk, liquidity risk and market risk. In order to minimize any adverse effects on the financial
performance of the Company, derivative financial instruments, such as foreign exchange forward contracts are entered to hedge certain foreign
currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.
The regulations, instructions, implementation rules and in particular, the regular communication throughout the tightly controlled management
process consisting of planning, controlling and monitoring collectively form the risk management system used to define, record and minimize
operating, financial and strategic risks. The note explains the sources of risk which the entity is exposed to and how the entity manages the
risks :
Credit risk
The credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual
obligations towards the Company and arises principally from the Company's receivables from customers, investment in bonds and debentures
and deposits with banking institutions. The maximum amount of the credit exposure is equal to the carrying amounts of these receivables.
For banks and financial institutions, only high rated banks/institutions are accepted. The Company has deposited liquid funds at various
banking institutions. Primary banking institutions are major Indian banks. In long term credit ratings, these banking institutions are considered
to be investment grade. Also, no impairment loss has been recorded in respect of fixed deposits that are with recognized commercial banks
and are subject to insignificant credit risk.
The Company has formulated a investment policy to govern its investments made in bonds, non-convertible debentures and other instruments.
Investments is made only in those instruments, as approved in policy, issued by entities considering credit rating by agencies. Exposure to any
single issuer or scheme is limited to reduce concentration risk. All credit exposures are reviewed periodically. The policy also includes ongoing
monitoring of market developments, issuer financials, and macroeconomic conditions to proactively manage credit risks.
The Company has developed guidelines for the management of credit risk from trade receivables. The Company's primary customers are
major Indian automobile manufacturers and Air-conditioner manufacturer (OEMs) with good credit ratings. Non-OEM clients are subjected
to credit assessments as a precautionary measure, and the adherence of payment due dates is closely monitored on an on-going basis for all
customers, thereby significantly reducing the risk of default.
A default on a financial asset is when the counterparty, fails to make contractual payments within the agreed number of days of when they
fall due. This definition is determined by considering the business environment in which entity operates and other macro-economic factors.
The Company's historical experience of collecting receivables, supported by the level of default, is that credit risk is low. All customer balances
which are overdue for more than 180 days are evaluated for provisioning and considered for impairment on an individual basis. The customer
balances are written-off as bad debts, when legal remedies available to the Company are exhausted and / or it becomes certain that said
balances will not be recovered.
Significant estimate: The loss allowance for trade receivables disclosed above are based on assumptions about risk of default and expected
loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the
Company's past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Liquidity risk
The liquidity risk encompasses any risk that the Company cannot fully meet its financial obligations. To manage the liquidity risk, the
Company's finance division monitors rolling forecasts of its liquidity requirements to ensure it has sufficient cash to meet the operational
needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach
borrowing limits or covenants (where applicable) on any of its borrowing facilities. The Company raises short term rupee borrowings for cash
flow mismatches and hence carries no significant liquidity risk.
As disclosed in note 11(c), the Company has entered into a supplier's credit arrangement. This has improved the Company's working capital.
The Company has no significant concentration of liquidity risk with any individual finance provider.
Market risk
(i) Foreign currency risk
The Company has exposure to foreign currency risk on account of its payables. The Company has a foreign currency exchange risk policy to
mitigate this risk by entering into appropriate hedging instruments depending on the future outlook on currencies as considered necessary
from time to time for which it has entered into derivative financial instruments such as foreign exchange forward contracts.
Foreign currency sensitivity analysis
The Company is mainly exposed to JPY7 CNH and CHF (March 31, 2025: USD, JPY7 CNH and EUR) since it is unhedged as
at reporting date.
The following table details the Company’s sensitivity to a 10% increase and decrease in the INR against the relevant foreign
currencies. The sensitivity analysis includes only outstanding foreign currency denominated monetary items as tabulated
above and adjusts their translation at the period end for a 10% change in foreign currency rates. A positive number below
indicates an increase in profit and vice-versa.
(iii) Price risk
Fluctuation in commodity price in global market affects directly and indirectly the price of raw material and components used by the Company.
Due to the competitive market, major OEMs demand price cuts which in turn may affect the profitability of the Company.
The Company has arrangements with its major customers for passing on the price impact. The Company is regularly taking initiatives like
VA VE (value addition, value engineering) to reduce its raw material costs to meet targets set up by its customers for cost downs. In respect
of customer nominated parts, the Company has back to back arrangements for cost savings with its suppliers.
22(c). Capital management
The Company's objectives when managing capital are to:
a) safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other
stakeholders, and
b) maintain an optimal capital structure to reduce the cost of capital.
The Board of Directors recommended a final dividend of Rs. 3 per share (nominal value of Rs. 2 per share) for the financial year 2025-26
(March 31, 2025: Rs. 2.6 per share for the financial year 2024-25). This dividend is subject to approval by the shareholders at the Annual
General Meeting and has not been accounted as liability in these Standalone Financial Statements, The total estimated dividend to be paid is
Rs. 1,957.07 Lakhs (March 31, 2025: Rs. 1,696.13 Lakhs).
23. Segment information
The Company is primarily in the business of manufacturing of thermal products,
The Board of Directors of the Company, which has been identified as being the chief operating decision maker (CODM), evaluates the
Company's performance, allocate resources based on the analysis of the various performance indicators of the Company as a single unit,
Therefore, there is no reportable segment for the Company. Export sales constitute an insignificant portion of total business of the Company.
Hence, there is no geographical segment as well,
a) Domestic information includes sales of products and services rendered to customers located in India,
b) Overseas information includes sales of products and services rendered to customers located outside India,
c) Non current segment assets includes property, plant and equipment, right-of-use assets, capital work- in- progress, intangible assets,
intangible assets under development and capital advances,
d) Revenue from transactions with a single external customer amounting to 10 per cent or more of the Company's revenues is Rs. 297,668.12
Lakhs from one customer (previous year: Rs. 283,249.87 Lakhs).
Terms and conditions:
a) All transactions with related parties are in ordinary course of business and on arm's length basis,
b) All outstanding balances are unsecured and will be settled through normal banking channels.
c) All transactions are exclusive of applicable taxes for which input credit is allowed,
25. Capital commitments
Estimated value of contracts on capital account remaining to be executed and not provided for is Rs. 10,786.70 Lakhs (net of capital
advances of Rs.1,740.35 Lakhs) (March 31, 2025: Rs. 3,076.23 Lakhs (net of capital advances of Rs. 355.37 Lakhs)).
Notes:
i, It is not practicable for the Company to estimate the timings and amount of cash outflows, if any, in respect of the above pending resolution
of the respective proceedings,
ii, The Company does not expect any reimbursements in respect of the above contingent liabilities,
Significant estimate: The assessments undertaken in recognising provisions and contingencies have been made in accordance with Ind AS 37,
'Provisions, Contingent Liabilities and Contingent Assets'. The evaluation of the likelihood of the contingent events requires best judgement
by management considering the probability of exposure to potential loss, Judgement includes consideration of experts opinion, facts of the
matter, underlying documentation and historical experience, Changes in assumptions about these factors could affect the reported value of
contingencies and provisions,
27. Leases
Accounting policy
As a lessee
The Company leases certain premises and plant and machinery. The lease term is for 11 months - 35 years except in case of leasehold land
where lease term is upto 99 years, but may have an extension option as described in (ii)(b) below,
Contracts may contain both lease and non-lease components, The Company allocates the consideration in the contract to the lease and
non-lease components based on their relative stand-alone prices, However, for leases of real estate for which the Company is a lessee, it has
elected not to separate lease and non-lease components and instead accounts for these as a single lease component,
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally
the case for leases in the Company, the lessee's incremental borrowing rate is used, being the rate that the Company would have to pay to
borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms,
security and conditions. To determine the incremental borrowing rate, the Company obtains the interest rate from its bankers for borrowings
for a tenure that is substantially similar to the lease terms, with a similar security and the similar economic environment for leases held by
the Company.
Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. If the
Company is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset's useful life.
Payments associated with short term leases are recognised on a straight-line basis as an expense in Standalone Statement of Profit and Loss.
Short-term leases are leases with a lease term of 12 months or less.
Refer note 40(vii) for the other accounting policies relevant to leases.
(a) Variable lease payments
The Company does not have any leases with variable lease payments.
(b) Extension and termination options
Extension and termination options are included in number of leases across the Company. These are used to maximise operational flexibility in
terms of managing the assets used in the Company's operations. The majority of extension and termination options held are exercisable only
by the Company and not by the respective lessor.
(c) Residual value guarantees
The Company does not provide any residual value guarantee in relation to its leases.
The Company as a lessor
One office premise is let out by the Company on operating lease and its cancellable in nature. Lease rental income is set out in note 15 to
these Standalone Financial Statements as "Rental income” in "Other income”.
The table below sets out the maturity analysis of lease payments showing the undiscounted lease payments to be received after the reporting
period: -
b) Defined benefit plans
Contribution to gratuity funds - The Company provides for gratuity for employees as per The Payment of Gratuity Act, 1972. Employees who
are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement / termination is the
employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The
gratuity plan is a funded plan and Company makes contribution to recognized funds in India. Also refer note 39.
These plans typically expose the Company to actuarial risks such as investment risk, interest rate risk, longevity risk and salary risk.
Investment risk
The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.
Interest risk
The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of
providing the above benefit and will thus result in an increase in the value of the liability.
Longevity risk
The present value of defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both
during and after employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.
Salary risk
The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation
in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of
obligation will have a bearing on the plan’s liability.
c) Other long term employee benefits - Leave encashment/compensated absence - The leave obligations cover the Company's liability for
earned leave, sick leave and casual leave. The entire amount of the provisions of Rs. 673.49 Lakhs (March 31, 2025: Rs. 473.78 Lakhs)
is presented as current, since the Company does not have an unconditional right to defer settlement for any of these obligations. However,
based on past experience, the company does not expect all employees to avail the full amount of accrued leave or require payment for such
leave within the next 12 months.
Significant estimate: Employee benefit obligations are determined using actuarial valuation. An actuarial valuation involves making appropriate
assumptions that may differ from actual developments in the future. These include the determination of the discount rate and future salary
increases. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is sensitive to changes in
these assumptions. All assumptions are reviewed at each reporting date.
29. Research and development expenses
The Company has one in-house Research and Development Centre in Noida, approved by the Department of Scientific and Industrial
Research, Ministry of Science and Technology, Government of India. The details of research and development expenses is as under :-
(ii) Borrowing secured against current assets
The Company has sanctioned limits for borrowings from banks on the basis of security of current assets. The Company has filed quarterly
returns or statements of current assets with banks which are not in agreement with the un audited books of accounts, however such
differences between the amount disclosed to the banks and those as per the unaudited books of accounts have been reconciled. Refer Note
35 for the reconciliations.
(iii) Wilful defaulter
The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
(iv) Relationship with struck off companies
The Company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.
(v) Compliance with number of layers of companies
The Company has complied with the number of layers prescribed under the Companies Act, 2013.
(vi) Compliance with approved scheme(s) of arrangements
The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.
(vii) Utilisation of borrowed funds and share premium
The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries)
with the understanding that the Intermediary shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company
(Ultimate Beneficiaries) or
b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries
The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding
(whether recorded in writing or otherwise) that the company shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party
(Ultimate Beneficiaries) or
b. provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
(viii) Undisclosed income
There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act,
1961, that has not been recorded in the books of account.
(ix) Details of crypto currency or virtual currency
The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.
(x) Valuation of property, plant and equipment and intangible assets
The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current
or previous year.
(xi) Loans and advances to promoters, directors, Key management personnel (KMPs) and related parties
The Company has not granted any loans and advances to promoters, directors, KMPs and related parties during the current or previous year.
(xii) Title deeds of immovable properties held in name of the company
The title deeds of all the immovable properties (other than properties where the company is the lessee and the lease agreements are duly
executed in favour of the lessee), as disclosed in note 3 to the Standalone Financial Statements, are held in the name of the Company.
(xiii) Registration of charges or satisfaction with Registrar of Companies
There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.
(xiv) Utilisation of borrowings availed from banks and financial institutions
The borrowings obtained by the Company from banks have been applied for the purposes for which such loans were taken. There are no
borrowings obtained from financial institutions.
38. The Supreme Court of India has passed an order dated February 28, 2019 in the matter of The Regional Provident Fund Commissioner
(II) West Bengal vs. Vivekananda Vidyamandir & Ors in Civil Appeal No. 6221 of 2011 and few other linked cases. In the said order, the
Supreme Court has clarified the definition of the Basic Wage under the Employees' Provident Funds & Miscellaneous Provisions Act, 1952.
In the assessment of the management, the aforesaid matter is not likely to have a significant financial impact and accordingly, no provision
has been made in these Standalone Financial Statements. The Company will continue to monitor and evaluate its position based on future
events and developments.
39. On November 21, 2025, the Government of India notified the four Labour Codes - the Code on Wages, 2019, the Industrial Relations
Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020 - consolidating 29
existing labour laws. The Ministry of Labour and Employment published Central Rules on May 8, 2026 and FAQs to enable assessment of
the financial impact due to changes in regulations. The Company has assessed and disclosed the incremental impact of these changes on the
basis of the best information available, consistent with the guidance provided by the Institute of Chartered Accountants of India. Considering
the materiality and regulatory-driven, non-recurring nature of this impact, the Company has presented such incremental impact as "Impact of
Labour Codes” under "Exceptional item” in the Standalone Financial Statements for the year ended March 31, 2026. The incremental impact
consisting of gratuity of Rs. 690.58 Lakhs and leave encashment of Rs. 117.13 Lakhs primarily arises due to change in wage definition. The
Company continues to monitor the Central Rules in conjunction with draft State Rules and clarifications from the Government on other aspects
of the Labour Code and would provide appropriate accounting effect on the basis of such developments as needed.
40. Summary of other accounting policies:
i) Rounding of amounts
All amounts disclosed in the standalone financial statements and notes have been rounded off to the nearest Lakhs as per the requirement of
Schedule III, unless otherwise stated.
ii) Investment in Joint Venture
Investment in joint venture is carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying
amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investment in joint venture, the
difference between net disposal proceeds and the carrying amounts are recognized in the Standalone Statement of Profit and Loss.
iii) Segment reporting
The Company is primarily in the business of manufacturing and sale of thermal products (Automotive and home air conditioning systems and
parts thereof).
The Board of Directors of the Company, which has been identified as being the chief operating decision maker (CODM), evaluates the
Company's performance, allocate resources based on the analysis of the various performance indicator of the Company as a single unit. Refer
note 23 for segment information presented.
iv) Foreign currency translation
Functional and presentation currency:
Items included in the Standalone Financial Statements are measured using the currency of the primary economic environment in which the
entity operates ('the functional currency'). The Standalone Financial Statements are presented in Indian rupee (INR), which is Company's
functional and presentation currency.
Transactions and balances:
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities
denominated in foreign currencies at year end exchange rates are recognized in profit or loss. Non-monetary assets and non-monetary
liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair
value was determined. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost
are translated at the exchange rate prevalent at the date of the transaction.
Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the Standalone Statement of Profit and Loss,
within finance costs. All other foreign exchange gains and losses are presented in the Standalone Statement of Profit and Loss on a net basis
within other income or other expenses.
v) Government grants
Grants from the government are recognized at their fair value where there is a reasonable assurance that the grant will be received and the
Company will comply with all attached conditions. Note 13(a) provides further information on how the Company accounts for government
grants.
vi) Income tax
The income tax expense or credit for the period is the tax payable on the current period's taxable income based on the applicable income tax
rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to
interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Company measures
its tax balances either based on the most likely amount or the expected value, depending on which method provides a better prediction of the
resolution of the uncertainty.
Deferred income tax is provided in full, using the liability method, on the temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the standalone financial statements. Deferred tax is not accounted for if it arises from initial recognition
of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit
nor taxable profit (tax loss). Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by
the end of the reporting period and are expected to apply when the related deferred income tax asset is realized or the deferred income tax
liability is settled.
Deferred tax assets are recognized for all deductible temporary differences only if it is probable that future taxable amounts will be available
to utilize those temporary differences.
Deferred tax liabilities are not recognized for temporary differences between the carrying amount and tax bases of investments in subsidiary
and joint venture where the Company is able to control the timing of the reversal of the temporary differences and it is probable that the
differences will not reverse in the foreseeable future.
Deferred tax assets are not recognized for temporary differences between the carrying amount and tax bases of investments in subsidiary and
joint venture where it is not probable that the differences will reverse in the foreseeable future and taxable profit will not be available against
which the temporary difference can be utilized.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when
the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally
enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Current tax and deferred tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive
income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively.
vii) Leases
As a lessee
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities includes the net present value of the
following lease payments:
• fixed payments (including in-substance fixed payments), less any lease incentives receivable
• variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date
• amount expected to be payable by the Company under residual value guarantees
• the exercise price of a purchase option if the Company is reasonably certain to exercise that option; and
• payments of penalties for terminating the lease, if the lease term reflects the Company exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to
produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability,
• any lease payments made at or before the commencement date less any lease incentives received,
• any initial direct costs, and
• restoration costs.
As a lessor
Lease income from operating leases where the Company is lessor is recognised in income on a straight-line basis over the lease term. Initial
direct costs incurred in obtaining an operating lease are added to the carrying amount of the underlying asset and recognised as expense over
the lease term on the same basis as lease income. The respective leased assets are included in Standalone Balance Sheet based on their nature.
Entity-specific details about the Company's leasing policy are provided in note 27.
viii) Impairment of property, plant and equipment and intangible assets
At the end of each reporting period, the Company 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).
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money
and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
ix) Cash and cash equivalents
For the purpose of presentation in the Statement of Cash Flows, cash and cash equivalents include cash on hand, deposits held at call with
financial institutions, 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.
x) Inventories
Raw material and spares, work in progress, stores and finished goods are stated at the lower of cost and net realizable value. Cost of raw
materials and spares and stores comprises cost of purchases. Cost of work-in-progress and finished goods comprises direct material, direct
labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating
capacity. Costs of inventories also include all other costs incurred in bringing the inventories to their present location and condition. Costs of
purchased inventory are determined after deducting rebates and discounts. Net realizable value is the estimated selling price in the ordinary
course of business less the estimated costs of completion and the estimated costs necessary to make the sale.
Entity-specific details about inventories are provided in note 8.
xi) Investments and other financial assets
(i) Classification
The Company classifies its financial assets in the following measurement categories:
- those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss)
- those to be measured at amortised cost.
The classification depends on the entity's business model for managing the financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments
in equity instruments that are not held for trading, this will depend on whether the Company has made an irrevocable election at the time of
initial recognition to account for the equity investment at FVOCI.
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model
for managing financial assets.
(ii) Recognition and derecognition
Regular way purchases and sales of financial assets are recognised on trade-date, being the date on which the Company commits to purchase
or sell the financial asset. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or
have been transferred and the Company has transferred substantially all the risks and rewards of ownership.
(iii) Measurement
At initial recognition, the Company measures a financial asset (excluding trade receivables which do not contain a significant financing
component) at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly
attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed
in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of
principal and interest,
Debt instruments
Subsequent measurement of debt instruments depends on the Company's business model for managing the asset and the cash flow
characteristics of the asset. There are three measurement categories into which the Company classifies its debt instruments:
- Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal
and interest are measured at amortised cost. Interest income from these financial assets is included in Other Income using the effective
interest rate method. Foreign exchange gains and losses and impairment gains or losses are recognised in profit or loss. Any gain or loss arising
on derecognition is recognised directly in profit or loss.
- Fair value through other comprehensive income (FVOCI): Assets that are held for collection of contractual cash flows and for selling the
financial assets, where the assets' cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the
carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains
and losses which are recognised in profit and loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised
in OCI is reclassified from equity to profit or loss.
- Fair value through profit or loss: Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit
or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss is recognised in profit or loss in
the period in which it arises. Interest income from these financial assets is included in other income.
Equity instruments
The Company subsequently measures all equity investments at fair value, Where the Company's management has elected to present fair value
gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to
profit or loss following the derecognition of the investment. Dividends from such investments are recognised in profit or loss as other income
when the Company's right to receive payments is established,
Changes in the fair value of financial assets at fair value through profit or loss are recognised in profit or loss. Impairment losses (and reversal
of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value,
(iv) Impairment of financial assets:
The Company recognizes a loss allowance for expected credit losses on a financial asset that is at amortized cost. Loss allowance in respect of
financial assets is measured at an amount equal to life time expected credit losses and is calculated as the difference between their carrying
amount and the present value of the expected future cash flows discounted at the original effective interest rate.
Entity-specific details about investments and other financial assets are provided in note 5.
xii) Property, plant and equipment
The Company's accounting policy for land is explained in note 3,Historical cost includes expenditure that is directly attributable to the
acquisition of items, The cost of self generated assets comprises of raw material, components, direct labour, other direct cost and related
production overheads. Such assets are classified to the appropriate categories of property, plant and equipment when completed and ready
for intended use,
Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that
future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying
amount of any component accounted for as a separate asset is derecognized when replaced, All other repairs and maintenance are charged
to profit or loss during the reporting period in which they are incurred.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated
recoverable amount.
Gains and losses in disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss within other
income / other expenses.
xiii) Intangible assets
Software
Costs associated with maintaining software are recognised as an expense as incurred.
Separately purchased intangible assets are initially measured at cost. Subsequently, intangible assets are carried at cost less accumulated
amortisation and accumulated impairment losses, if any.
Research and development
Research expenditure and development expenditure that do not meet the criteria for capitalization are recognized as an expense as incurred.
Development costs previously recognized as an expense are not recognized as an asset in a subsequent period.
Entity-specific details about intangible assets are provided in note 4.
xiv) Trade and other payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid.
Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are
recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method.
xv) Borrowings
Borrowings are initially recognized at fair value, net of transaction cost incurred. Borrowings are subsequently measured at amortized cost.
Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the
borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan
to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs.
To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalized as a pre-payment
for liquidity services and amortized over the period of the facility to which it relates.
Borrowings are removed from the Standalone Balance Sheet when the obligation specified in the contract is discharged, cancelled or
expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the
consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.
Borrowings are classified as current liabilities unless, at the end of the reporting period, the Company has a right to defer settlement of the
liability for at least 12 months after the reporting period. Where there is a breach of a material provision of a long-term loan arrangement on
or before the end of the reporting period with the effect that the liability becomes payable on demand on the reporting date, the entity does
not classify the liability as current, if the lender agreed, after the reporting period and before the approval of the financial statements for issue,
not to demand payment as a consequence of the breach.
Covenants that the Company is required to comply with, on or before the end of the reporting period, are considered in classifying loan
arrangements with covenants as current or non-current. Covenants that the Company is required to comply with after the reporting period do
not affect the classification at the reporting date.
xvi) Borrowing cost
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are
capitalized during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets
that necessarily take a substantial period of time to get ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from
the borrowing costs eligible for capitalization.
Other borrowing costs are recognized as an expense in the period in which these are incurred.
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