k. Provisions and onerous contracts
Provisions are recognised when the Company has a present
legal or constructive obligation as a result of past events, it
is probable that an outflow of resources will be required to
settle the obligation and the amount can reliably estimated.
Provisions are not recognised for future operating losses.
Provisions measured at the present value of management's
best estimate of the expenditure required to settle the
present obligation at the end of the reporting period. The
discount rate used to determine the present value is pre¬
tax rate that reflects current market assessments of the
time value of money and the risks specific to the liability.
The increase in provision due to the passage of time is
recognised as an expense.
A provision for onerous contract is recognised when the
expected benefits to be derived by the Company from a
contract are lower than the unavoidable cost of meeting
its obligations under the contract. The provision is
measured at the present value of the lower of expected
cost of terminating the contract and the expected net
cost of continuing with the contract. Before a provision is
established, the Company recognizes any impairment loss
on the assets associated with the contract.
l. Trade receivables
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 recognised at the transaction
price initially as they do not contain significant financing
components. The Company holds the trade receivables
with the objective of collecting the contractual cash flows
and therefore measures them subsequently at amortised
cost less loss allowance.
m. Inventories
Inventories include raw materials (including stores, spares
and packing material), work in progress and finished
goods. Inventories are stated at the lower of cost and net
realizable value. Cost of raw materials comprises of cost of
purchases, freight and other expenses incurred in bringing
the raw materials to the manufacturing location, excluding
rebates and discounts.
Cost of work in progress and finished goods comprises
direct materials, direct labor and an appropriate portion of
variable and fixed overhead expenditure, the latter being
allocated on the basis of normal operating capacity.
Costs are assigned to individual items on weighted average
cost basis which is calculated on the basis of total cost of
raw materials divided by the quantities purchased. 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.
n. Investment 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), and
• those measured at amortized 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 (not held for trading purpose), 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 fair value
through other comprehensive income.
(ii) Recognition
Regular way purchases and sales of financial assets
are recognised on trade-date, the date on which
the Company commits to purchase or sale the
financial assets.
(iii) Measurement
At initial recognition, the Company measures a
financial asset 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.
(a) Amortized 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 amortized
cost. Interest income from these financial assets
is included in finance income using the effective
interest rate method.
(b) 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 revenue and foreign exchange gains and
losses which are recognised in profit and loss.
When the financial asset is derecognized, the
cumulative gain or loss previously recognised in
OCI is reclassified from equity to profit or loss
and recognised in other gains/ (losses). Interest
income from these financial assets is included
in other income using the effective interest rate
method. Foreign exchange gains and losses are
presented in other expenses and impairment
expenses in other expenses.
(c) Fair value through profit or loss (FVTPL): 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 and presented net within other gains/
(losses) in the period in which it arises. Interest
income from these financial assets is included
in other income.
(iv) Investments in equity instruments of subsidiaries,
joint ventures and associates
The Company measures its investments in equity
instruments of subsidiaries, Joint ventures and
associates at cost in accordance with Ind AS
27 and Ind AS 28.
The management assesses the performance of
these entities including the future proJections,
relevant economic and market conditions in which
they operate to identify if there is any indicator of
impairment in the carrying value of the investments.
In case indicators of impairment exist, the impairment
loss is measured the higher of
(i) 'fair value less cost of disposal' determined using
market information, where available, and
(ii) 'value-in-use' estimates recoverable amounts
determined using discounted cash flow
proJections, where available. The future cash
flow projections are specific to the entity based
on its business plan and may not be the same
as those of market participants. The future cash
flows consider key assumptions such as revenue
projections, EBITDA, terminal growth rates, etc.
with due consideration for the potential risks
given the current economic environment in
which the entity operates. The discount rates
used, with required tax rates, are based on
weighted average cost of capital and reflects
market's assessment of the risks specific to
the asset as well as time value of money. The
recoverable amount estimates are based on
judgments, estimates, assumptions and market
data as on reporting date and ignore subsequent
changes in the economic and market conditions.
(v) Impairment of financial assets:
The Company assesses on a forward looking basis the
expected credit losses associated with its assets carried
at amortized cost. The impairment methodology
applied depends on whether there has been a
significant increase in credit risk. For trade receivables
only, the Company applies the simplified approach
required by Ind AS 109 Financial Instruments, which
requires expected lifetime losses to be recognised
from initial recognition of the receivables.
(vi) Derecognition of financial assets
A financial asset is derecognized only when
• the Company has transferred the rights to
receive cash flows from the financial asset or
• retains the contractual rights to receive the
cash flows of the financial asset but assumes a
contractual obligation to pay the cash flows to
one or more recipients.
Where the Company has transferred an asset, the
Company evaluates whether it has transferred
substantially all risks and rewards of ownership
of the financial asset. In such cases, the financial
asset is derecognized. Where the Company has not
transferred substantially all risks and rewards of
ownership of the financial asset, the financial asset is
not derecognized.
Where the Company has neither transferred a financial
asset nor retains substantially all risks and rewards of
ownership of the financial asset, the financial asset is
derecognized if the Company has not retained control
of the financial asset. Where the Company retains
control of the financial asset, the asset is continued to
be recognised to the extent of continuing involvement
in the financial asset.
(vii) Offsetting
Financial assets and financial liabilities are offset and
the net amount presented in the 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 realise the
asset and settle the liability simultaneously.
o. Property, plant and equipment
All items of property, plant and equipment are stated
at historical cost or deemed cost applied on transition
to Ind AS less depreciation. Capital work-in-progress is
stated at cost. Historical cost includes expenditure that
is directly attributable to the acquisition of the items, net
of refundable taxes. Subsequent costs are included in the
asset's carrying amount or recognised 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. When
significant spare parts of an item of property, plant and
equipment have different useful lives, they are accounted
for as separate items (major components) of property, plant
and equipment. The carrying amount of any component
accounted for as a separate asset is derecognised when
replaced. All other repairs and maintenance are charged
to profit or loss during the reporting period in which
they are incurred.
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 or, in case of certain leased
machineries, the shorter lease term as follows:
The useful lives have been determined based on technical
evaluation done by the management which are different
from those specified by Schedule II to the Companies Act,
2013, in order to reflect the actual usage of the assets.
The residual values are not more than 5% of the original
cost of the asset.
The assets' residual values and useful lives are reviewed,
and adjusted if appropriate, at the end of each reporting
period. Assets in the course of development or construction
are not depreciated.
p. Intangible assets
intangible assets include Computer software and
Technical knowhow. Costs associated with maintaining
software programs are recognised as an expense as
incurred. Technical knowhow comprises of capitalized
product developed costs, being an internally generated
intangible asset.
The Company amortizes intangible assets with finite useful
life using the straight-line method over the following
estimated useful lives:
q. 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. The amounts are unsecured. Trade and
other payables are presented as current liabilities unless
payment is not due within 12 months after the reporting
period. They are recognised initially at their fair value
and subsequently measured at amortized cost using the
effective interest method.
r. Borrowings
Borrowings are initially recognised at fair value, net of
transaction costs incurred. Borrowings are subsequently
measured at amortized cost. Any difference between the
proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of the
borrowings using the effective interest method. Fees paid
on the establishment of loan facilities are recognised 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 prepayment for liquidity services and amortized over
the period of the facility to which it relates.
Borrowings are classified as current liabilities unless the
Company has an unconditional 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.
s. Borrowing costs
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 expensed in the period in which they are incurred.
t. Employee benefits
1. Short-term obligations
Liabilities for wages and salaries, including non¬
monetary benefits that are expected to be settled
wholly within 12 months after the end of the period
in which the employees render the related service are
recognised in respect of employees' services up to
the end of the reporting period and are measured at
the amounts expected to be paid when the liabilities
are settled. The liabilities are presented as current
employee benefit obligations in the Balance sheet.
2. Other long-term employee benefit obligations
Leave obligations are presented as current liabilities in
the balance sheet since the Company 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.
3. Post-employment obligations
The Company operates the following post¬
employment schemes:
(a) defined benefit plans such as gratuity; and
(b) defined contribution plans such as
provident fund and ESI.
(a) Defined benefit plans:
A defined benefit plan is a post-employment
benefit plan other than a defined contribution
plan. The Company's net obligation in respect
of defined benefit plans is calculated separately
for each plan by estimating the amount of
future benefit that employees have earned
in the current and prior periods, discounting
that amount and deducting the fair value of
any plan assets.
Gratuity obligations
The liability or asset recognised in the balance
sheet in respect of gratuity plans is the present
value of the defined benefit obligation at the
end of the reporting period. The defined benefit
obligation is calculated annually by independent
actuaries using the projected unit credit method.
The present value of the defined benefit
obligation is determined by discounting the
estimated future cash outflows by reference
to market yields at the end of the reporting
period on government bonds that have
terms approximating to the terms of the
related obligation.
The interest cost is calculated by applying the
discount rate to the net balance of the defined
benefit obligation. This cost is included in
employee benefit expense in the statement of
profit and loss.
Remeasurement gains and losses arising
from experience adjustments and changes in
actuarial assumptions are recognised in the
period in which they occur, directly in other
comprehensive income. They are included in
retained earnings in the statement of changes in
equity and in the balance sheet.
(b) Defined Contribution Plans:
A defined contribution plan is a post-employment
benefit plan where the Company's legal or
constructive obligation is limited to the amount
that it contributes to a separate legal entity.
The Company makes specified monthly
contributions towards Employees Provident Fund
Organisation and Employees State Insurance
Corporation. Obligations for contributions to
defined contribution plans are expensed as an
employee benefits expense in the statement of
profit and loss in period in which the related
service is provided by the employee. Prepaid
contributions are recognised as an asset to the
extent that a cash refund or a reduction in future
payments is available.
4. Share-based payments
Share-based compensation benefits are provided to
employees through the Aequs Stock Option Plan.
The fair value of options granted under the Aequs
Employee Stock Option Plan is recognised as an
employee benefits expense with a corresponding
increase in equity.
The total amount to be expensed is determined by
reference to the fair value of the options granted:
- including any market performance conditions
(e.g., the entity's share price), and
- including the impact of any service and non¬
market performance vesting conditions.
The total expense is recognised on an accelerate
basis over the vesting period, which is the period
over which all of the specified vesting conditions are
to be satisfied. At the end of each period, the entity
revises its estimates of the number of options that are
expected to vest based on the non-market vesting
and service conditions. It recognizes the impact of the
revision to original estimates, if any, in profit or loss,
with a corresponding adjustment to equity.
u. Financial guarantee contracts
Financial guarantee contracts are recognised as a financial
liability at the time the guarantee is issued. The liability
is initially measured at fair value and subsequently at the
higher of the (i) amount determined in accordance with
the expected credit loss model as per Ind AS 109 and (ii)
the amount initially recognised less, where appropriate,
cumulative amount of income recognised in accordance
with the principles Ind AS 115. The income is presented as
Other income in the statement of profit or loss. The fair
value of financial guarantees is determined as the present
value of the difference in net cash flows between the
contractual payments under the debt instrument and the
payments that would be required without the guarantee,
or the estimated amount that would be payable to a third
party for assuming the obligation.
Where guarantees in relation to loans or other payables
of subsidiaries and associates are provided for no
compensation, the fair values are accounted for as
contributions and recognised as part of the cost of
the investments.
Upon cancellation or termination of a financial guarantee
contract, the related liability is derecognised when the
Company is released from its obligation. Any unamortised
balance is recognised immediately in the statement of
profit and loss.
v. Contributed equity
Incremental costs directly attributable to the issue of new
shares are shown in equity as a deduction, net of tax, from
securities premium.
w. Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing:
• the profit/(loss) attributable to the equity holders
of the Company.
• by the weighted average number of equity shares
outstanding during the year, net of treasury shares
Diluted earnings per share
Diluted earnings per share adjusts the figures used
in the determination of basic earnings per share to
take into account:
• the after income tax effect of interest and other
financing costs associated with dilutive potential
equity shares, and
• the weighted average number of additional equity
shares that would have been outstanding assuming
the conversion of all dilutive potential equity shares.
Potential equity shares are deemed to be dilutive only if
their conversion to equity shares would decrease the net
profit per share or increase the net loss per share. Potential
dilutive equity shares are deemed to be converted as at the
beginning of the period, unless they have been issued at a
later date. Dilutive potential equity shares are determined
independently for each period presented.
x. Exceptional items
Exceptional items are material items of income or expenses
that are disclosed separately due to the significance of their
nature or amount, to provide further understanding of the
financial performance of the Company.
y. Use of judgements and estimates
The preparation of financial statements in conformity with
Ind AS requires estimates and judgements that affect the
reported amounts of assets and liabilities, revenues and
expenses, and related disclosures of contingent liabilities in
the financial statements and accompanying notes. Estimates
are used for, but not limited to useful lives of property,
plant and equipment and intangible assets, share-based
compensation, defined benefit obligations, Impairment of
investments in subsidiaries, associates and joint ventures
and estimation of deferred tax expenses/benefits. Actual
results could differ materially from these estimates.
In preparing these financial statements, management has
made judgements and estimates that affect the application
of the Company's accounting policies and the reported
amounts of assets, liabilities, income and expenses. Actual
results may differ from these estimates.
Estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to estimates are
recognised prospectively.
(i) Judgements
Information about judgements made in applying
accounting policies that have the most significant effects
on the amounts recognised in the financial statements is
included in the following notes:
Note 7: investments accounted for using the equity
method: whether the Company has significant influence
over an investee;
Note 5: lease term: whether the Company is reasonably
certain to exercise extension options.
(ii) Assumption and estimation uncertainties
Information about assumptions and estimation
uncertainties at the reporting date that have a risk of
resulting in a material adjustment to the carrying amounts
of assets and liabilities within the next financial period /
year is included in the following notes:
Note 12: measurement of defined benefit obligations: key
actuarial assumptions;
Note 25: recognition of deferred tax assets: availability of
future taxable profit against which deductible temporary
differences and tax losses carried forward can be utilised;
Notes 29: recognition and measurement of provisions and
contingencies: key assumptions about the likelihood and
magnitude of an outflow of resources;
Note 27: measurement of ECL allowance for trade
receivables: key assumptions in determining the weighted-
average loss rate.
(viii) During the year ended March 31,2025 the Company has converted 407,115,771 Compulsorily Convertible Preference Shares(CCPS)
into 157,069,937 equity shares of H10 each fully paid up. Of these, 46,818,017 equity shares were issued at premium of H19.48 and
110,251,920 equity shares were issued at premium of H30.63 per share.
(ix) For details of shares reserved for issue under the employee stock option (ESOP) plan of the Company, refer note 10B.
ESOP Trust was created for the welfare and benefit of employees and directors of the Company. The Board of Directors has
approved the employee stock option plan of the Company. On October 25, 2013, July 25, 2016 , December 15, 2021, December
22, 2021, July 8, 2025 and July 14,2025 the trust purchased 5,500,000, 2,900,000, 3,000,000, 3,000,000,3,000,000 and 3,000,000
equity shares respectively of the Company using the proceeds from interest free loan of H670.00 obtained from the Company.
(x) There are no shares which are reserved for issuance and there are no securities issued/ outstanding which are convertible into
equity shares, except ESOP.
Note 10B - Stock option plan
Aequs Limited (formerly known as Aequs Private Limited) granted stock options to the employees of the Company and its subsidiaries.
ESOP scheme is administered through an ESOP Trust called as "Aequs Stock Option Plan Trust" ('ESOP Trust') that has been constituted
on May 14, 2013. The object of the ESOP Trust is to manage schemes made available for the benefit of the employees. During the year
ended March 31, 2025, four stock option plans viz., ESOP scheme 2013, ESOP scheme 2016, ESOP scheme 2020 and ESOP scheme
2022 were in existence. The Company has amended and consolidated the previous employee stock option plans as mentioned above
to Aequs Employee Stock Option Plan 2025 (ESOP 2025) in compliance with SEBI (Share Based Employee Benefits and Sweat Equity)
Regulations, 2021 with effect from April 01, 2025. Vesting under each of these schemes is subject to satisfaction of the presc\ribed
vesting conditions viz., continuing employment, employee performance and certain performance conditions. These vesting conditions
vary depending on the role and seniority of the employees.
On July 4, 2013, the Board of Directors approved the equity settled ESOP scheme 2013 for issue of stock options to the key employees,
consultants and directors of the Company and its subsidiaries, Joint ventures and associates. According to the ESOP scheme 2013, the
employee selected by the ESOP committee from time to time will be entitled to 20,000 to 500,000 options, subject to satisfaction of
the prescribed vesting conditions viz., continuing employment of 5 years, employee performance and certain performance conditions.
The weighted average remaining contractual life is 8.74 years. The other relevant terms of the grant are as below:
ESOP Scheme 2016
The Board of Directors approved the Employee Share Option Plan 2016 structured to reward employees. Accordingly, the Parent
Company has created 2,900,000 share option pool to be allocated and granted from time to time to employees. As Employee Stock
Option Plan (ESOP) committee has been formed with powers delegated from the Board of Directors to manage the ESOP scheme,
subject to satisfaction of the prescribed vesting conditions specified in the grant letter viz., service condition, employee performance
and certain performance conditions. The weighted average remaining contractual life is 9.16 years.
The Board of Directors approved the Employee Share Option Plan 2020 structured to reward employees. Accordingly, the Parent
Company has created 3,000,000 share option pool to be allocated and granted from time to time to employees. As Employee Stock
Option Plan (ESOP) committee has been formed with powers delegated from the Board of Directors to manage the ESOP scheme,
subject to satisfaction of the prescribed vesting conditions specified in the grant letter viz., service condition, employee performance
and certain performance conditions. The weighted average remaining contractual life is 12.88 years
ESOP Scheme 2022
The Board of Directors approved the Employee Share Option Plan 2022 structured to reward employees. Accordingly, the Parent
Company has created 6,000,000 share option pool to be allocated and granted from time to time to employees. As Employee Stock
Option Plan (ESOP) committee has been formed with powers delegated from the Board of Directors to manage the ESOP scheme,
subject to satisfaction of the prescribed vesting conditions specified in the grant letter viz., service condition, employee performance
and certain performance conditions. The weighted average remaining contractual life is 12.87 years
Nature and purpose of reserves
a. Retained earnings
The cumulative gain or loss arising from the operations which is retained by the entity is recognised and accumulated under the
heading of retained earnings. At the end of the year, the total profit / loss is transferred from the statement of profit and loss to
retained earnings.
a. Securities premium
Securities premium is used to record the premium on issue of shares and is utilized in accordance with the provisions of the Act.
b. Share option outstanding account
The share options outstanding account is used to recognise the fair value of options issued to employees under Aequs Stock
Option Plan. Refer note 10B.
c. Treasury shares
This represents the Company's own equity shares held by its ESOP Trust, which are recognized at cost and disclosed as a
deduction from equity.
d. Other reserves
Other reserves includes fair value of financial guarantee given by Aequs SEZ Private Limited and any other adjustments as may
be required under Ind AS.
(i) Leave obligations
The leave obligations cover the Company's liability for earned leave. The amount of the provision is presented as current.
However, based on past experience, the Company does not expect all employees to take the full amount of accrued leave or
require payment within the next 12 months.
Note 12 - Provision for employee benefits (Contd..)
(ii) Defined contribution plans
The Company has defined contribution plans in the form of provident fund and Employees' State Insurance (ESI) for qualifying
employees. The contributions are made to provident fund for employees at the rate of 12% of wages as per regulations. The
contributions are made to registered provident fund administered by the government. The obligation of the Company is limited
to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the
year towards defined contribution plan is INR 7.25 (March 31, 2025 : INR 5.42).
(iii) Defined benefit obligations
Gratuity
The Company provides for gratuity for employees in India. 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 wages per month
computed proportionately for 15 days multiplied for the number of years of service.
The gratuity plan is a funded plan and the Company makes contribution to recognised fund in India. The Company makes annual
contribution for the Gratuity plan to an Insurance Company. Such contributions are recognised as plan assets. The Company
make contribution to the planned assets based on the expected payout. Final liability is actuarially valued and recognised in the
books as at the end of each year by the Company. Upon actuarial valuation at the year end, any resultant difference between the
liability and fair value of the fund is recognised in the books of accounts as liability.
Note 12 - Provision for employee benefits (Contd..)
The method used to calculate the liability in these scenarios is by keeping all the other parameters and the data same as in the
base liability calculation except the parameters to be stressed.
There have been no changes from the previous periods in the methods and assumptions used in preparing the sensitivity analyses.
The mortality and attrition does not have a significant impact on the liability hence are not considered as significant actuarial
assumption for the purpose of sensitivity analysis.
Risk exposure
Through its defined benefit plans, the Company is exposed to number of risks, the most significant of which are detailed below:
(i) Market risk (discount rate)
Market risk is a collective term for risks that are related to the changes and fluctuations of the financial markets. The
discount rate reflects the time value of money. An increase in discount rate leads to decrease in Defined Benefit Obligation
of the plan benefits and vice versa. This assumption depends on the yields on the corporate/government bonds and hence
the valuation of liability is exposed to fluctuations in the yields as at the valuation date.
(ii) Longevity risk
The impact of longevity risk will depend on whether the benefits are paid before retirement age or after. Typically for the
benefits paid on or before the retirement age, the longevity risk is not very material.
(iii) Annual risk
Salary increase assumption
Actual salary increase that are higher than the assumed salary escalation, will result in increase to the obligation at a rate
that is higher than expected.
Attrition/withdrawal assumption
If actual withdrawal rates are higher than assumed withdrawal rate assumption, then the benefits will be paid earlier than
expected. The impact of this will depend on whether the benefits are vested as at the resignation date.
(II) The Company has reversed the impairment loss previously recognised on investment in its joint venture, SQuAD Forging India
Private Limited considering the Improved performance and business,
(III) The Company has reversed an Impairment loss previously recognised against Its receivables In Aequs End Solutions Private
Limited upon actual recovery,
(Iv) During the year ended March 31, 2026, the Company has Incurred H 476,22 Mn towards Initial Public Offer ('IPO') expenses
Including Pre-IPO, Of this, H 39,02 Mn has been expensed off to the Consolidated Statement of Profit and Loss as an exceptional
loss and the balance H 437,20 Mn has been reduced from Securities Premium as cost of fresh Issue,
(v) 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 labor laws, The Ministry of Labour and Employment published Central Rules and FAQs to
enable assessment of the financial Impact due to the changes In regulations, The Company has assessed and disclosed the
Incremental Impact of these changes on the basis of actuarial opinion obtained and 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 under 'Exceptional Items' In
the Consolidated Statement of Profit and Loss, The Incremental Impact on gratuity of H 7,92 Mn primarily arising due to change
in wage definition,
(a) Transfer pricing;
The Finance Act, 2001, has introduced, with effect from assessment year 2002-03 (effective April 1, 2001), detailed Transfer
Pricing Regulations (the regulations) for computing the taxable income and expenditure from 'international transactions
'between 'associated enterprises' on an arm's length' basis. Further, the Finance Act, 2012 has widened the ambit of transfer
pricing provisions to cover specified domestic transactions. The regulations, inter alia, also require the maintenance of
prescribed documents and information including furnishing a report from an accountant within the due date of filing the
return of income.
For the year ended March 31, 2025, the Company had undertaken a study to comply with the said transfer pricing regulations
for which the prescribed certificate of the accountant has been obtained which does not envisage any tax liability. For the
year ended March 31, 2026, the Company would be carrying out a study to comply with transfer pricing regulations for
which the prescribed certificate of accountant will be obtained. In the opinion of management, no adjustment is expected
to arise based on completion of Transfer Pricing Study.
(i) Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are;
(a) recognised and measured at fair value.
(b) recognised and measured at amortised cost and for which fair values are disclosed in the standalone financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its
financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows
underneath the table;
Level 1; Level 1 hierarchy includes financial instruments measured using quoted prices.
Level 2; The fair value of financial instruments that are not traded in an active market (derivative mainly forward contract) is
determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-
specific 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.
(ii) Fair value of financial assets and liabilities measured at amortised cost
The carrying amounts of loans, trade receivables, cash and cash equivalents and other bank balances, bank balance other than
above, other financial assets, borrowings, lease liability, trade payables, and other financial liabilities are considered to be the
same as their fair values, due to their short-term nature.
The fair values for interest free security deposits were calculated based on cash flows discounted using a risk free rate of interest.
The lease liabilities are discounted using the interest rate implicit in the lease. If the rate cannot be readily determined, as in the
case of lease of buildings, the Company's incremental borrowing rate is used.
For financial assets and financial liabilities that are measured at fair value, the carrying amounts are equal to fair values.
(iii) Significant estimates
The fair value of financial instruments that are not traded in an active market is determined using valuation technique. The
Company uses its Judgement to select a variety of methods and makes assumptions that are mainly based on market conditions
existing at the end of each reporting period.
Note 27 - Financial risk management
The Company's business activities exposes it to a variety of financial risks such as liquidity risk, credit risk and market risk. The
Company's senior management under the supervision of the Board of Directors and its Risk Management Committee has the overall
responsibility for establishing and governing the Company's risk management and have established policies to identify and analyse
the risks faced by the Company. They help in identification, measurement, mitigation and reporting all risks associated with the
activities of the Company. These risks are identified on a continuous basis and assesses for the impact on the financial performance.
The below table broadly summarises the sources of financial risk to which the entity is exposed to and how the entity manages the risk.
A. Credit risk
Credit risk is a risk where the counterparty will not meet its obligations under a financial instruments leading to a financial loss.
Credit risk arises from cash and cash equivalents and deposits with banks, as well as credit exposures to customers including
outstanding receivables, other receivables and loans and deposits.
(i) Credit risk management
Credit risk is a risk where the counterparty will not meet its obligations under a financial instrument leading to a financial
loss. Credit risk arises from cash and cash equivalents and deposits with banks, as well as credit exposures to customers
including outstanding receivables, other receivables and loans and deposits.
(ii) Provision for expected credit losses.
The Company's financial assets mainly comprise of loans & lease deposits, deposits with bank, trade receivables, investments.
The assessment of ECL is done as follows:
1) Deposits :
Deposits comprises of mainly refundable security deposits made on buildings (leased premises). Deposits have
negligible or nil risk based on past history of defaults and reasonable forward looking information. Hence, no provision
for expected credit losses are made in the financial statements.
2) Deposits with bank :
They are considered to be having negligible risk or nil risk, as they are maintained with banks having strong credit
ratings and the period of such deposits is generally not exceeding one year.
3) Trade receivables and other dues from related parties
No significant expected credit loss provision has been created for trade receivables and other dues from related
parties. Further, receivables and dues are expected to be collected considering the past trend of very limited defaults
and that the balances are not significantly aged. Full provision is made for balances that management believes are
credit impaired.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and
when estimating ECLs, the Company considers reasonable and supportable information that is relevant and available
without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the
Company's historical experience and informed credit assessment, that includes forward-looking information.
B. Liquidity risk
Liquidity risk is a risk where an entity will encounter difficulty in meeting obligations associated with financial liabilities that are
settled by delivering cash or another financial asset. Prudent liquidity risk management implies maintaining sufficient cash and
the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the
dynamic nature of the underlying businesses, Company's treasury maintains flexibility in funding by maintaining availability of
required funds.
Management monitors rolling forecasts of the Company's liquidity position and cash and cash equivalents on the basis of
expected cash flows.
C. Market risk
Market risk Is a risk where the fair value or future cash flows of a financial Instrument will fluctuate because of changes
in market prices.
(i) Foreign currency risk
The Company is exposed to foreign exchange risk arising from foreign currency transactions. Foreign exchange risk
arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the
Company's functional currency (INR). The risk is measured through sensitivity analysis of probable movement in exchange
rate as at the reporting period.
The Company primarily imports materials which are denominated in foreign currency which exposes it to foreign currency
risk. The Company has a natural hedge in terms of its receivables and payables being in USD and Euro. Further, any
additional exposure is continuously monitored and hedging options like forward contracts are taken whenever they are
expected to be cost effective.
(a) Foreign currency risk exposure
The Company's exposure to foreign currency risk at the end of the reporting period expressed in INR as against
respective foreign currency are as follows as at March 31, 2026
Note 28 - Capital management
For the purpose of Company's capital management, capital includes issued equity share capital, instruments entirely equity in nature
and all other reserves attributable to the equity holders of the Company.
The Company's objectives when managing capital are to:
(i) 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
(ii) Maintain an optimal capital structure to reduce the cost of capital.
The Company monitors capital using gearing ratio and is measured by net debt (total borrowings net of cash and cash
equivalents) to equity.
(i) A few cases have been filed against the Company in District Labour court, Belagavi. If the Labour Court passes an award against
the Company, the probable compensation would amount to H20.00 (March 31, 2025: H24.80) . The Company is however confident
of winning this case based on the counsel advice and hence the same is not provided in the standalone financial statements.
(ii) The Company has received demand order u/s 156 of the Income Tax Act, 1961 amounting to H25.23 (March 31, 2025: H25.23) for
the FY 2016-17 (AY 2017-18) and has appealed the said order before Commissioner Appeals and the Company believes it has
strong merits in its case.
(iii) The Company has received an order during the period / year ended March 31, 2022 under Section 143(3) of the Income Tax Act,
1961 relating to financial period / year 2017-18 (assessment period / year 2018-19) with a demand of H 779.56. The Company
had filed a writ petition with the Hon'ble High Court of Karnataka against the Order and the Company has received a favorable
High court order in the current year whereby the assessment order raising demand has been set aside and the matter has been
remanded back to AO for fresh assessment. Hence, the Company has reversed the contingent liability.
(iv) Income tax refund claimed by the Parent Company (pertaining from FY 18-19 to 24-25 amounting to H39.82) has been adjusted
by Tax department against the outstanding demand. The said adjustment is not accepted by the Parent Company and is treated
as payments made under protest.
(v) The Company has evaluated the impact of the Supreme Court Judgment in case of "Vivekananda Vidyamandir And Others Vs
The Regional Provident Fund Commissioner (II) West Bengal" and the related circular (Circular No. C-I/1(33)2019/Vivekananda
Vidya Mandir/284) dated March 20, 2019 issued by the Employees' Provident Fund Organisation in relation to non-exclusion of
certain allowances from the definition of "basic wages" of the relevant employees for the purposes of determining contribution
to provident fund under the Employees' Provident Funds & Miscellaneous Provisions Act, 1952. In the assessment of the
management which is supported by legal advice, the Company expects that the aforesaid matter is not likely to have a significant
impact and accordingly, no provision has been made in the financial statements. Further, the Company has complied with the
above judgement and has revised the wages of its employees with effect from April 01, 2019.
Note 29 - Contingent liabilities (Contd..)
(vI) Refer Note 31(B) for Corporate guarantees given to third parties by the Company for loans taken by related parties of the Company.
(vii) It is not practicable to estimate for the Company to estimate the timing of cash outflows, if any, in respect of the above matters
pending resolution of the above matters.
(vIII) The Company does not expect any reimbursement in respect of the above contingent liabilities.
Notes:
1. Reason for variances less than 25% Is not required to be provided, as exempted by Schedule III of the Act.
2. Increase in current assets as result of funds received from IPO.
3. Increase in equity and decrease in debt
4. Increase in profit before tax and decrease in amount of debt service
5. Increase in profit after tax.
6. Increase in cost of goods sold
7. Increase in working capital at higher rate than increase in revenue
8. Increase in earnings before interest and taxes
9. Increase in income from investment while there is decrease in average total assets
Note 34 - Additional regulatory information required by Schedule III
(i) Details of benami property held: No proceedings have been initiated on or are pending against the Company for holding benami
property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
(ii) Willful defaulter: The Company has not been declared willful defaulter by any bank or financial institution or government or any
government authority.
(iii) Relationship with struck off companies: The Company has no transactions with the companies struck off under Companies Act,
2013 or Companies Act, 1956.
(iv) Compliance with number of layers of companies: The Company has complied with the number of layers prescribed under the
Companies Act, 2013.
(v) 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.
(vi) (a) The company has not advanced or loaned or invested the funds to any other person(s) or entity(ies), including foreign
entities (Intermediaries) with the understanding that the Intermediary shall:
(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of
the Funding Party (Ultimate Beneficiaries) or
Note 34 - Additional regulatory information required by Schedule III (Contd..)
(II) provide any guarantee or security or the like on behalf of the Ultimate Beneficiaries.
(vi) (b) The Company has not received any funds from any person(s) or entity(ies), Including foreign entities (Funding Party) with
the understanding (whether recorded In writing or otherwise) the Company shall:
(I) directly or Indirectly lend or Invest In other persons or entities Identified In any manner whatsoever by or on behalf of
the Funding Party (Ultimate Beneficiaries) or
(II) provide any guarantee or security or the like on behalf of the Ultimate Beneficiaries.
(vii) 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.
(viii) The Company has not traded or Invested In crypto currency or virtual currency during the current or previous year.
(Ix) The Company has not revalued Its Property, plant and equipment or Intangible assets during the current or previous year.
(x) The Company does not own any Immovable properties.
(xi) There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.
(xii) The borrowings obtained by the Company from bank have been applied for the purposes for which such loans were taken.
(xiii) The Company was not required to recognise any provision as at March 31, 2026 under the applicable law or accounting standards,
as It does not have any material foreseeable losses on long-term contracts. The Company did not have any derivative contracts
as at March 31, 2026.
(xiv) The Company does not have Core Investment Company (CIC) as part of the Group, as defined In the regulations made by the
Reserve Bank of India as on March 31, 2026.
(xv) The Company has borrowings from banks and financial Institutions on the basis of security of current assets. Refer note 13
(i)(C) for details of quarterly statements of current assets filed by the company with the bank and reconciliation with the
books of accounts.
Note 35 - Subsequent events
1. a) The Company, vide its board resolution dated April 23, 2026, has approved the Scheme of Amalgamation of certain wholly
owned subsidiaries i.e, AeroStructures Manufacturing India Private Limited, Aequs Engineered Plastics Private Limited and
Aequs Force Consumer Products Private Limited with itself. As of the date of adoption of these financial statements, the
Scheme and the related applications are yet to be filed with requisite authorities, and necessary approvals are still pending.
Upon receiving the requisite approvals and completing all formalities associated with the merger, the Company will
account for the transaction in accordance with the applicable accounting principles prescribed under Appendix C of the
Indian Accounting Standard (Ind AS) 103, 'Business Combinations' notified under Section 133 of the Act and/ or any other
applicable Ind AS, as amended from time to time as this will be a transaction between entities under common control.
Following the merger, these wholly owned subsidiaries will be subsumed into the Company and will cease to exist as
separate legal entities.
Note 36 - The financial statements were approved for issue by the Board of Directors on May 26, 2026.
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