Provisions
Provisions are recognised when, as a result of a
past event, the company has a legal or constructive
obligation; it is probable that an outflow of resources
will be required to settle the obligation; and the amount
can be reliably estimated. The amount so recognised is
a best estimate of the consideration required to settle
the obligation at the reporting date, taking into account
the risks and uncertainties surrounding the obligation.
In an event when the time value of money is material, the
provision is carried at the present value of the cash flows
estimated to settle the obligation.
Operating Segments
Operating segments are reported in a manner consistent
with the internal reporting provided to the chief operating
decision-maker (CODM). The CODM, who is responsible
for allocating resources and assessing performance
of the operating segments, has been identified as the
Corporate Management Committee.
Segments are organised based on business which
have similar economic characteristics as well as exhibit
similarities in nature of products and services offered,
the nature of production processes, the type and class of
customer and distribution methods.
Segment revenue arising from third party customers is
reported on the same basis as revenue in the financial
statements. Inter-segment revenue is reported on the
basis of transactions which are primarily market led.
Segment results represent profits before finance charges,
unallocated corporate expenses and taxes. "Unallocated
Corporate Expenses" include revenue and expenses that
relate to initiatives/costs attributable to the enterprise as
a whole and are not attributable to segments.
Financial and Management Information Systems
The Company's accounting system is designed to comply
with the relevant provisions of the companies Act, 2013,
to provide financial and cost information appropriate to
the businesses and facilitate Internal control.
Use of estimates and judgements
The preparation of financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that
affect the reported amounts of assets and liabilities
and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during
the reporting period end. Although these estimates are
based upon management's best knowledge of current
events and actions, actual results could differ from these
estimates.
The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is
revised if the revision affects only that period, or in the
period of the revision and future periods if the revision
affects both current and future periods.
A. Judgements in applying accounting policies
The judgements, apart from those involving estimations
(see note below), that the company has made in the
process of applying its accounting policies and that have
a significant effect on the amounts recognised in these
financial statements pertain to useful life of intangible
assets. The company is required to determine whether
its intangible assets have indefinite or finite life which is
a subject matter of judgement. Certain trademarks have
been considered of having an indefinite useful life taking
into account that there are no technical, technological or
commercial risks of obsolescence or limitations under
contract or law. Other trademarks have been amortised
over their useful economic life. Refer notes to the
financial statements.
B. Key sources of estimation uncertainty
The following are the key assumptions concerning the
future, and other key sources of estimation uncertainty
at the end of the reporting period that may have a
significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next
financial year.
1. Useful lives of property, plant and equipment
and intangible assets:
As described in the significant accounting policies,
the company reviews the estimated useful lives
of property, plant and equipment and intangible
assets at the end of each reporting period.
2. Fair value measurements and valuation
processes:
Some of the company's assets and liabilities are
measured at fair value for financial reporting
purposes. In estimating the fair value of an asset
or a liability, the company uses market-observable
data to the extent it is available. Where level 1 inputs
are not available, the company engages third party
valuers, where required, to perform the valuation.
Information about the valuation techniques and
inputs used in determining the fair value of various
assets, liabilities and share based payments are
disclosed in the notes to the financial statements.
3. Actuarial Valuation:
The determination of company's liability towards
defined benefit obligation to employees is made
through independent actuarial valuation including
determination of amounts to be recognised in
the statement of profit and loss and in other
comprehensive income. Such valuation depend
upon assumptions determined after taking into
account inflation, seniority, promotion and other
relevant factors such as supply and demand factors
in the employment market. Information about
such valuation is provided in notes to the financial
statements.
4. Claims, Provisions and Contingent Liabilities:
In respect of litigations where an outflow of funds
is believed to be probable and a reliable estimate
of the outcome of the dispute can be made
based on management's assessment of specific
circumstances of each dispute and relevant external
advice, management provides for its best estimate
of the liability. Such accruals are by nature complex
and can take number of years to resolve and can
involve estimation uncertainty. Information about
such litigations is provided in notes to the financial
statements.
No trade receivables are due from directors or other officers of the company or any of them either severally or jointly
with any other person. Further, no trade receivables are due from firms or private companies in which any director is
a partner, a director or a member, other than dues from related parties.
The Company has only one class of equity shares having face value of f 2/- each. The holder of the equity share is
entitled to dividend right and voting right in the same proportion as the capital paid-up on such equity share bears
to the total paid-up equity share capital of the company. The dividend proposed by Board of Directors is subject to
approval of the shareholders in the ensuing annual general meeting, except in case of interim dividend. In the event
of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the
company in the same proportion as the capital paid-up on the equity shares held by them bears to the total paid-up
equity share capital of the company.
Note 14.4: ESOPs
(a) During the year the company has granted 2,64,000 (pr. yr. nil) options at a price of f 42.50/- per option plus all
applicable taxes, as may be levied on the company in this regard to eligible employees. The options would vest
over a maximum period of 1 year from the date of grant based on specific criteria.
(b) In respect of stock options granted pursuant to the company's stock options schemes, the intrinsic value of the
options (excess of market price of the share over the exercise price of the option) is treated as discount and
accounted as employee compensation over the vesting period.
(c) Expense on employee stock option schemes debited to the statement of profit and loss during 2025-26 is
f 65,60,704/- (previous year:? nil), pursuant to the employee stock option schemes (Note 26). The entire amount
pertains to equity-settled employee share-based payment plans.
Nature and purpose of reserves
1) Securities premium
The amount received in excess of face value of the equity shares is recognised in securities premium. The reserve is
utilised in accordance with the provisions of the Companies Act, 2013.
2) General reserve
This reserve is created by an appropriation from one component of equity (generally retained earnings) to another,
not being an item of other comprehensive income. The same can be utilised in accordance with the provisions of the
Companies Act, 2013.
3) Capital reserve
Capital reserve represents the amount forfeited on not exercising the option attached to the conversion of warrants
into equity shares within a scheduled time.
4) Retained earnings
This reserve represents the cumulative profits of the Company and effects of re-measurement of defined benefit
obligations. This reserve can be utilised in accordance with the provisions of the companies act, 2013.
5) Equity instruments through other comprehensive income
This reserve represents the cumulative gains (net of losses) arising on the revaluation of equity instruments measured
at fair value through other comprehensive income, net of amounts reclassified, if any, to retained earnings when
those instruments are disposed of.
(a) Term loan from Yes Bank is secured against hypothecation of car no. MH 01 DX 9934. The loan is repayable in
60 equated monthly instalments of ? 37,079/- each commencing from 15.06.2023 and the last instalment is payble
on 15.05.2027. Rate of Interest as on 31.03.2026 is @7.51% There was no continuing default in the repayment of
instalment and interest thereon.
(b) Term loan from Kotak Bank is secured against hypothecation of car no. MH 01 FB 5312. The loan is repayable in 60
equated monthly instalments of ? 1,31,564/- each commencing from 05.12.2025 and the last instalment is payble
on 05.10.2030. Rate of Interest as on 31.03.2026 is @ 8.00 % There was no continuing default in the repayment of
instalment and interest thereon.
Financial instruments and related disclosures
1. Capital management:
The Company's financial strategy aims to support its strategic priorities and provide adequate capital to its businesses
for growth and creation of sustainable stakeholder value. The company funds its operations through internal accruals,
borrowings etc. The company aims at maintaining a strong capital base largely towards supporting the future growth
of its businesses as a going concern.
2. Categories of financial instruments and fair value:
Carrying amounts and fair value of financial assets and financial liabilities, including their levels in the fair value
hierarchy, are presented below. It does not include fair value information for financial assets and financial liabilities
not measured at fair value if the carrying amount is a reasonable approximation of fair value.
Level 1: Quoted price (unadjusted) in active market for
identities assets or liabilities.
Level 2: Inputs other than quoted prices included in
Level 1 that are observable for the asset or liability either
directly (i.e. prices) or indirectly (i.e. derived from prices).
Level 3: Inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
C) Financial Risk Management
The Company has a system-based approach to risk
management, anchored to policies and procedures
and internal financial controls aimed at ensuring
early identification, evaluation and management of
key financial risks (such as market risk, credit risk and
liquidity risk) that may arise as a consequence of its
business operations as well as its investing and financing
activities. Accordingly, the company's risk management
framework has the objective of ensuring that such
risks are managed within acceptable and approved risk
parameters in a disciplined and consistent manner and
in compliance with applicable regulation. It also seeks to
drive accountability in this regard.
The activities of the company exposes it to a number of
financial risks namely market risk, credit risk and liquidity
risk. The company seeks to minimise the potential impact
of unpredictability of the financial markets on its financial
performance. The company does regularly monitor,
analyse and manage the risks faced by the company and
to set and monitor appropriate risk limits and controls
for mitigation of the risks.
A. Management of market risk:
Market risk is the risk that the fair value or future cash
flows of a financial instrument will fluctuate because of
changes in market prices. Market risk comprises of three
types of risks: interest rate risk, price risk and currency
rate risk. Financial instruments affected by market risk
includes borrowings and investments instruments. The
company is exposed to a variety of market risks, including
currency and interest rate risks.
(i) Management of interest rate risk:
Interest rate risk is the risk that the fair value or future
cash flows of a financial instrument will fluctuate because
of changes in market interest rates. The company does
not have any major exposure to interest rate risks since
its borrowings and investments are majorly in fixed rate
instruments. Investments are largely in subsidiaries and
associates and are on long term basis.
(ii) Management of price risk:
The Company invests its surplus funds in deposits
with banks on short term tenors on fixed interest rate
and the same is not exposed to any price risk. This risk
is mitigated by the company by investing the funds in
various tenors depending on the liquidity needs of the
company.
(iii) Management of currency risk:
Currency risk is the risk that the fair value or future cash
flows of a financial instrument will fluctuate because of
changes in foreign exchange rates. The Company has
no foreign currency transactions and is, therefore, not
exposed to foreign exchange risk.
The Company is not an active investor in equity markets;
it continues to hold certain investments in equity for long
term value accretion which are accordingly measured at
fair value through other comprehensive income. The
value of investments in such equity instruments as at
31st March, 2026 is ? 3,141.34 lakhs (PY - ?6,090.54 lakhs).
Accordingly, fair value fluctuations arising from market
volatility is recognised in other comprehensive income.
As the company is virtually debt-free and its deferred
payment liabilities do not carry interest, the exposure
to interest rate risk from the perspective of financial
liabilities is negligible. The investment is guided by
tenets of liquidity, safety and returns. This ensures
that investments are only made within acceptable risk
parameters after due evaluation.
Fixed deposits are held with highly rated banks and
have a short tenure and are not subject to interest rate
volatility.
B. Management of credit risk:
Credit risk refers to the risk of default on its obligations
by a counterparty to the company resulting in a financial
loss to the company. The Company is exposed to credit
risk from its operating activities (trade receivables) and
from its financing activities including investments in
deposits with banks.
Credit risk from trade receivables is managed through the
company's policies, procedures and controls relating to
customer credit risk management by establishing credit
limits, credit approvals and monitoring creditworthiness
of the customers to which the company extends credit
in the normal course of business. Outstanding customer
receivables are regularly monitored.
Further, credit is extended in business interest.
C. Management of liquidity risk:
Liquidity risk is the risk that the company may not be
able to meet its present and future cash obligations
without incurring unacceptable losses. The company's
objective is to maintain at all times, optimum levels of
liquidity to meet its obligations. The company closely
monitors its liquidity position and has a robust cash
management system. The company maintains adequate
sources of financing including debt and overdraft from
domestic and international banks and financial markets
at optimised cost.
The Company's current assets aggregate to ? 15,026.30
lakhs (PY -? 18,489.69 lakhs) including cash and cash
equivalents and other bank balances of ? 80.63 lakhs (PY
-? 37.88 lakhs) against an aggregate current liability of
? 105.59 lakhs (PY -? 109.23 lakhs); non-current liabilities
due between one year to three years amounting to
? 45.91 lakhs (PY ? 4.78 lakhs) and non-current liability
due after three years amounting to ? NIL (PY NIL) on the
reporting date. Further, while the company's total equity
stands at ? 36,421.36 lakhs (PY -? 35,618.61 lakhs), it has
current borrowings of ? 20.24 lakhs (PY -? 4.08 lakhs).
In such circumstances, liquidity risk or the risk that the
company may not be able to settle or meet its obligations
as they become due does not exist.
NOTE 32: DISCLOSURES IN RESPECT OF RELATED
PARTIES PURSUANT TO IND AS 24(i) Subsidiary:
01) Aeroflex Neu Limited (formerly Sah Polymers
Limited)
02) Aeroflex Finance Private Limited
03) Aeroflex Industries Limited
04) Italica Global, FZC, UAE
05) M.R. Organisation Limited
(ii) Step down subsidiary:
Fibcorp Polyweave Private Limited
Hyd Air Engineering Private Limited
M.R. Organisation (USA) LLC
M.R. Organisation Europe BVBA
Standard Air Limited UK
Madhura Compressors Private Limited
ABP Impex Unipessoal LDA
(iii) Key Managerial Persons
01) Mrs. Shehnaz D Ali, Wholetime Director
02) Mr. Harikant Turgalia, Wholetime Director and Chief
Financial Officer
03) Ms. Alka Premkumar Gupta, Company Secretary
In case of other parties balance is NIL.
No amount in respect of the related parties have been written off/back are provided for during the year.
NOTE 33: DISCLOSURES PURSUANT TO SECTION 186 (4) OF THE COMPANIES ACT, 2013
(i) For investment refer to NOTE 5.
(ii) For guarantee refer to NOTE 30(b). Guarantee has been utilised by the recipient for business.
(iii) No security has been provided.
(iv) Details of the loans provided during the year are as under:
NOTE 35: EMPLOYEE BENEFITS
a) Defined Benefit Plan
Gratuity:
The Company participates in the employees' group gratuity-scheme of Life Insurance Corporation Limited, a funded
defined benefit plan for qualifying employees. Gratuity is payable to all eligible employees on death or on separation/
termination in terms of the provisions of The Payment of Gratuity (Amendment) Act, 1997, or as per the company's
scheme whichever is more beneficial to the employees.
b) Amounts Recognised as Expense:
i) Defined Benefit Plan
Gratuity cost amounting to f 3.73 lakhs (Previous Year f 2.19 lakhs) has been included in NOTE 25 under contribution
to other funds.
NOTE 36:
The Government of India has notified the four Labour Codes ("New Labour Codes") effective November 21,2025. The
Ministry of Labour & Employment has also issued draft Central Rules and FAQs to facilitate assessment of the financial
impact arising from implementation of the New Labour Codes. Based on an valuation, management's best estimates
and the guidance issued by the Institute of Chartered Accountants of India, The Company continues to monitor the
finalisation of the Central/State Rules and further clarifications from the Government on various aspects of the New
Labour Codes, and any resulting impact on the estimates will be recognised in the period in which such changes
become ascertainable.
NOTE 37:
There are no micro, small and medium enterprises, to whom the company owes dues (principal and/or interest), which
are outstanding for more than 45 days as at the balance sheet date. During the year, there have been no payments
made to micro, small and medium enterprises beyond 45 days. There were no amounts on account of interest due
that were payable for the period where the principal has been paid but interest under the MSMED Act, 2006 not paid.
Further, there were no amounts towards interest accrued that were remaining unpaid at the end of accounting year.
Accordingly, there were no amounts due to further interest due and payable in the succeeding years. The above
information regarding micro, small and medium enterprises has been determined to the extent such parties have
been identified on the basis of information available with the company.
NOTE 38: SEGMENT INFORMATION
Segment information in accordance with Ind AS 108, 'Operating Segments', segment information has been given in the
consolidated financial statements of Aeroflex Enterprises Limited (sssformerly Sat Industries Limited) and, therefore,
no separate disclosure on segment information is given in the standalone financial statements.
Balances of banks, sundry debtors and trade payables, current liabilities etc. as on 31.03.2026 are subject to
confirmation and reconciliation.
NOTE 41:
In the opinion of the management, there is no impairment of assets in accordance with the Ind AS - 36 as on the
balance sheet date.
NOTE 42:
There are no significant subsequent events that would require adjustments or disclosures in the financial statements
as on the balance sheet date.
NOTE 43:
These financial statements were approved for issue with a resolution of the board of directors on May 13, 2026.
NOTE 44:
All amounts disclosed in the financial statements and NOTEs have been rounded off to the nearest lakhs and decimal
thereof as per the requirements of schedule III to the companies Act, 2013, unless otherwise stated.
NOTE 45:
Previous year's figures have been reclassified/regrouped wherever necessary to conform with the current financial
statements.
NOTE 46:
No proceeding has been initiated or pending against the company for holding any benami property under the Benami
Transactions (Prohibition) Act,1988 and rules made thereunder.
The Company has taken no borrowings from banks on the basis of security of current assets of the company.
NOTE 48:
The Company is not a declared willful defaulter by any bank or financial institution or other lender.
NOTE 49:
The Company has no transaction with companies struck off under section 248 of the Companies Act, 2013 or
section 560 of Companies Act,1956.
NOTE 50:
There is no charges or satisfaction yet to be registered with ROC beyond the statutory period.
NOTE 51:
The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Companies
Act, 2013 read with the Companies (Restriction on number of layers) Rules, 2017.
NOTE 53: SIGNIFICANT ARRANGEMENTS
IN TERMS OF SECTION 230 TO 237 OF THE
COMPANIES ACT, 2013 DURING THE YEAR
During the year no scheme of arrangement has been
approved by the competent authority in terms of sections
230 to 237 of the Companies Act, 2013.
NOTE 54: UTILISATION OF BORROWED FUNDS
AND SHARE PREMIUM:
(a) The Company has not advanced or loaned or
invested funds (either borrowed funds or share
premium or any other source or kind of funds) to
any other person(s) or entity(ies), including foreign
entities (intermediaries) with the understanding
(whether recorded in writing or otherwise) that
the intermediary (i) directly or indirectly lend or
invest in other persons or entities identified in any
manner whatsoever by or on behalf of the company
(ultimate beneficiaries) or (ii) provide any guarantee,
security or the like to or on behalf of the ultimate
beneficiaries.
(b) The Company has not received any fund from any
other person(s) or entity(ies), including foreign
entities (intermediaries) with the understanding
(whether recorded in writing or otherwise) that the
company shall (i) directly or indirectly lend or invest
in other persons or entities identified in any manner
whatsoever by or on behalf of the funding party
(ultimate beneficiaries) or (ii) provide any guarantee,
security or the like to or on behalf of the ultimate
beneficiaries.
NOTE 55:
There is no transaction not recorded in the books of
account that has been surrendered or disclosed as
income during the year in the tax assessments under
the Income Tax Act, 1961. Further there is no previously
unrecorded income and related assets requiring
recording in the books of account during the year.
NOTE 56:
The Company has done an assessment to identify core
investment company (CIC) [including CICs in the group]
as per the necessary guidelines of Reserve Bank of
India [including Core Investment Companies (Reserve
Bank) Directions, 2016]. The company is not a CIC and
no entities have been identified as CIC in the group, of
which company is a part.
NOTE 57:
The Company has not traded or invested in crypto
curency or virtual currency during the finanxcial year.
NOTE 58:
The board of directors of the company has recommended
a final dividend of ? 0.40 (20%) per equity share for the
financial year ended 31st March, 2026 (for the year ended
31st March, 2025 -? 0.30 (15%) per euity share) to be
paid on fully paid equity shares amounting to ? 452.34
lakhs. The final dividend is subject to the approval of
shareholders at the annual general meeting and has not
been included as a liability in these financial statements.
(a) As approved by the shareholders a dividend of ?
0.30 (15%) per equity share aggregating to ? 339.26
lakhs in respect of year ended 31st March, 2025 has
been paid during the year.
NOTE 59: DISCLOSURE PURSUANT TO INDIAN
ACCOUNTING STANDARDS (IND AS) - 10:
EVENTS AFTER REPORTING PERIOD
(a) The board of directors have recommended dividend
of ? 0.40 (20%) per fully paid up equity share of ? 2/-
each for the financial year 2025-26.
(b) On 21.04.2026 the Company further acquired 1,03,350 equity shares of f 10/- each in M R Organisation Limited,
a subsidiary company, for a purchase consideration of f 557.57 lakhs, increasing its stake in the latter from 64%
to 68%.
(c) Consequent upon the sale of the Company's entire stake in MR Organisation Limited (MRO) (68%) to Ingersoll-
Rand Industrial U.S. Inc for a sale consideration of f 22,742 lakhs, MRO ceased to be a subsidiary of the Company
with effect from 30.04.2026. The financial impact of the transaction presently indeterminable has not been
computed.
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