17 Provisions, contingent liabilities and contingent assets
A. Provisions
A provision is recognised if
• the Company has present legal or constructive obligation as a result of an event in the past;
• it is probable that an outflow of resources will be required to settle the obligation; and
• the amount of the obligation has been reliably estimated.
Provisions are measured at the management's best estimate of the expenditure required to settle the obligation at the end of the reporting period. If the effect of the time value of money is material, provisions are discounted to reflect its present value using a current pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
The Company provides for general repairs of defects that existed at the time of sale, as required by the law. Provision for warranty related costs are recognised when the product is sold to the customer. Initial recognition is based on historical experience. The estimate of warranty related costs is revised annually.
If the Company has a contract that is onerous, the present obligation under the contract is recognised and measured as a provision. However, before a separate provision for an onerous contract is established, the Company recognises any impairment loss that has occurred on assets dedicated to that contract. An onerous contract is a contract under which the unavoidable costs (i.e., the costs that the Company cannot avoid because it has the contract) of meeting the obligations under the contract exceed the economic benefits expected to be received under it. The unavoidable costs under a contract reflect the least net cost of exiting from the contract, which is the lower of the cost of fulfilling it and any compensation or penalties arising from failure to fulfil it. The cost of fulfilling a contract comprises the costs that relate directly to the contract (i.e., both incremental costs and an allocation of costs directly related to contract activities).
B. Contingent liabilities
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.
A contingent liability recognised in a business combination is initially measured at its fair value. Subsequently, it is measured at the higher of the amount that would be recognised in accordance with the requirements for provisions above or the amount initially recognised less, when appropriate, cumulative amortisation recognised in accordance with the requirements for revenue recognition.
C. Contingent assets
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. A contingent asset is not recognised but disclosed where an inflow of economic benefit is probable.
18 Employee benefits
A. 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 the same period in
which the employees renders the related service and are measured at the amounts expected to be paid when the liabilities are settled.
Retirement benefit in the form of provident fund is a defined contribution plan. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognises contribution payable to the provident fund scheme as an expense, when an employee renders the related services. If the Contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognised as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognised as an asset to the extent that the prepayment will lead to a reduction in future payment or a cash refund.
B. Other long-term employee benefit obligations
The liabilities for earned leave and sick leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in the statement of profit or loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for atleast twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
C. Post-employment obligations
The Company operates the following post¬ employment schemes
(a) defined benefit plans - gratuity and obligation towards shortfall of Provident Fund Trusts
(b) defined contribution plans - Provident fund (RPFC Contributions), superannuation and pension
Defined benefit plans :
The liability or asset recognised in the balance sheet in respect of defined benefit plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets excluding non-qualifying asset (reimbursement right). The defined benefit obligation is calculated annually by 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 net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. 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.
Insurance policy held by the Company from insurers who are related parties are not qualifying insurance policies and hence the right to reimbursement is recognised as a separate assets under other non-current and/or current assets as the case may be.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit or loss as past service cost.
Defined contribution plans :
In respect of certain employees, the Company pays provident fund contributions to publicly administered provident funds as per local regulations. The Company has no further payment obligations once the contributions have been paid. Such contributions are accounted for as employee benefit expense when they are due. Defined contribution to superannuation fund is being made as per the scheme of the Company. Defined contribution to Employees Pension Scheme 1995 is made to Government Provident Fund Authority whereas the contributions for National Pension Scheme is made to Stock Holding Corporation of India Limited.
D. Share based payment
The Company operates a number of equity settled, employee share based compensation plans, under which the Company receives services from employees as consideration for equity shares of the Company. Equity settled share based payment to employees and other providing similar services are measured at fair value of the equity instrument at grant date.
The fair value of the employee services received in exchange for the grant of the options is determined by reference to the fair
value of the options as at the Grant Date and is recognised as an 'employee benefits expense' with a corresponding increase in equity. The total expense is recognised over the vesting period which is the period over which the applicable vesting condition is to be satisfied. The total amount to be expensed is determined by reference to the fair value of the options granted excluding the impact of any service vesting conditions.
At the end of each year, the entity revises its estimates of the number of options that are expected to vest based on the service vesting conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.
If at any point of time after the vesting of the share options, the right to the same expires (either by virtue of lapse of the exercise period or the employee leaving the Company), the fair value of the options accruing in favour of the said employee are written back to the retained earning in the reporting period in which the right expires.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share
Pursuant to the scheme of demerger, the employees also have benefits available in the other group entity. The Company records as a cross charge for such employee share based compensation.
19 Trade credits Suppliers' credit
Supplier's credit also includes amounts payable towards vendor financing entered into with the suppliers. Under this arrangement, the supplier is eligible to receive payment prior to the expiry of extended credit period by assigning such invoices to a third-party purchaser bank based on security in the form of an undertaking issued by the Company to the bank. Further, the supplier charges interest to the Company for the extended credit period which has been presented under Finance Cost.
These are normally settled up to four months. Where these arrangements are for goods used in the normal operations of the Company with a maturity of up to four months, the economic substance of the transaction is determined to be operating in nature and these are recognised as operational suppliers' credit and disclosed on the face of the balance sheet under trade credits. Payments made to vendors are treated as cash item and disclosed as cash flow from operating activity depending on the nature of the underlying transaction.
Customers' credit
Customer credits include receivables which are subject to factoring arrangements and channel financing facilities. Under this arrangement the Company has transferred the relevant receivables to the factor in exchange for cash. The Company continues to recognise the transferred assets in their entirety in its balance sheet with the corresponding liability under customer credits.
20 Segment reporting
An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the entity's chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available.
Operating segments often exhibit similar long-term financial performance if they have similar economic characteristics. Two or more operating segments are aggregated by the Company into a single operating segment if aggregation is consistent with the core principle of Ind AS 108, the segments have similar economic characteristics, and the segments are similar in aspects as defined by Ind AS.
The Company reports separately, information about an operating segment that meets any of quantitative thresholds as defined by Ind AS. Operating segments that do not meet any of the quantitative thresholds, are considered reportable and separately disclosed, only if management of the Company believes that information about the segment would be useful to users of the financial statements
Information about other business activities and operating segments that are not reportable separately are combined and disclosed in an 'all other segments' category
21 Dividends
The Company recognises a liability to pay dividend to equity holders when the distribution is authorised and is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity. Interim dividends are recorded as a liability on the date of declaration by the Company's Board of Directors.
22 Assets held for sale and discontinued operations
The Company classifies non-current assets and disposal Companys as held for sale if their carrying amounts will be recovered principally through a sale rather than through continuing use. Non-current assets and disposal Companys classified as held for sale are measured at the lower of their carrying amount and fair
value less costs to sell. Costs to sell are the incremental costs directly attributable to the disposal of an asset (disposal Company), excluding finance costs and income tax expense.
The criteria for held for sale classification is regarded as met only when the sale is highly probable, and the asset or disposal Company is available for immediate sale in its present condition. Actions required to complete the sale/ distribution should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell will be withdrawn. Management must be committed to the sale and the sale expected within one year from the date of classification. For these purposes, sale transactions include exchanges of non-current assets for other non-current assets when the exchange has commercial substance. The criteria for held for sale classification is regarded met only when the assets or disposal Company is available for immediate sale in its present condition, subject only to terms that are usual and customary for sales of such assets (or disposal Companys), its sale is highly probable; and it will genuinely be sold, not abandoned.
The Company treats sale of the asset or disposal Company to be highly probable when:
• The appropriate level of management is committed to a plan to sell the asset (or disposal Company),
• An active programme to locate a buyer and complete the plan has been initiated (if applicable),
• The asset (or disposal Company) is being actively marketed for sale at a price that is reasonable in relation to its current fair value,
• The sale is expected to qualify for recognition as a completed sale within one year from the date of classification, and
• Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
Property, plant and equipment and intangible are not depreciated, or amortised assets once classified as held for sale. Assets and liabilities classified as held for sale are presented separately from other items in the balance sheet.
Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or loss after tax from discontinued operations in the statement of profit and loss. All other notes to the financial statements mainly include amounts for continuing operations, unless otherwise mentioned.
23 Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of
equity shares outstanding during the year. Earnings / (loss) considered in ascertaining the Company's earnings per share is the net profit / (loss) for the year. The weighted average number equity shares outstanding during the year and all year presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares, that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit of loss for the period attributable to equity shareholders and the weighted average number of share outstanding during the year is adjusted for the effects of all dilutive potential equity shares.
24 Investment in Associate
Investment in associates are accounted at cost in accordance with Ind AS 28.
25 All amounts disclosed in the standalone financial statements and notes have been rounded off to the nearest lakh (upto two decimals) as per the requirement of Schedule III, unless otherwise stated.
1C NEW AND AMENDED STANDARDS
The Company applied for the first-time certain standards and amendments, which are effective for annual periods beginning on or after 1 April 2024. The Company has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
(i) Ind AS 117 Insurance Contracts
The Ministry of corporate Affairs (MCA) notified the Ind AS 117, Insurance Contracts, vide notification dated 12 August 2024, under the Companies (Indian Accounting Standards) Amendment Rules, 2024, which is effective from annual reporting periods beginning on or after 1 April 2024.
Ind AS 117 Insurance Contracts is a comprehensive new accounting standard for insurance contracts covering recognition and measurement, presentation and disclosure. Ind AS 117 replaces Ind AS 104 Insurance Contracts. Ind AS 117 applies to all types of insurance contracts, regardless of the type of entities that issue them as well as to certain guarantees and financial instruments with discretionary participation features; a few scope exceptions will apply. Ind AS 117 is based on a general model, supplemented by:
• A specific adaptation for contracts with direct participation features (the variable fee approach)
• A simplified approach (the premium allocation approach) mainly for short-duration contracts
The application of Ind AS 117 had no impact on the Company's standalone financial statements as the Company has not entered any contracts in the nature of insurance contracts covered under Ind AS 117.
(ii) Amendment to Ind AS 116 Leases - Lease Liability in a Sale and Leaseback
The MCA notified the Companies (Indian Accounting Standards) Second Amendment Rules, 2024, which amend Ind AS 116, Leases, with respect to Lease Liability in a Sale and Leaseback.
The amendment specifies the requirements that a seller-lessee uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure the seller- lessee does not recognise any amount of the gain or loss that relates to the right of use it retains. The amendment is effective for annual reporting periods beginning on or after 1 April 2024 and must be applied retrospectively to sale and leaseback transactions entered into after the date of initial application of Ind AS 116.
The amendment does not have any impact on the Company's standalone financial statements
STANDARDS ISSUED BUT NOT YET EFFECTIVE
There are no standards that are notified and not yet effective as on the date.
CLIMATE RELATED MATTERS
The Company considers climate-related matters in estimates and assumptions, where appropriate and based on its overall assessment, believes that the climate-related risks might not currently have a significant impact on the Company. However, the Company will continue to closely monitor relevant changes and developments, such as any new climate- related legislation as and when they become applicable
1D SUMMARY OF CRITICAL ESTIMATES, JUDGEMENTS AND ASSUMPTIONS
The preparation of standalone financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. The management also needs to exercise judgment in applying the Company's accounting policies. This note provides an overview of the areas that involved a higher degree of judgment or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgments is included below.
1 Warranty provision
The Company generally offers 1-2 years standard warranties for its products. The Company has taken warranty insurance under which most of the products are covered. The Company recognises warranty provision basis assumptions, on serviceable sales and cost to service those serviceable sales. The warranty insurance premium paid is charged off to the statement of profit and loss account and warranty insurance assets is created on an estimated basis. The insurance claims received are then netted against the said warranty insurance assets.
The Company also sells certain lighting fitting to its customers. In few lighting fittings products, the drivers are an essential part and are expected to last for a longer period. In such cases, the Company provides warranties beyond fixing defects that existed at the time of sale. Basis this, the Company recognises this as a separate performance obligation and recognises revenue only in the period in which such service is provided based on time elapsed.
2 Impairment allowance for trade receivables
The Company makes allowances for doubtful accounts receivable using a simplified approach which is a dual policy of an ageing based provision and historical / anticipated customer experience. Management believes that this simplified model closely represents the expected credit loss model to be applied on financial assets as per Ind AS 109. Further, in case of operationally closed projects, Company makes specific assessment of the overdue balances by considering the customer's historical payment patterns, latest correspondences with the customers for recovery of the amounts outstanding and credit status of the significant counterparties where available. Accordingly, a best judgment estimate is made to record the impairment allowance in respect of operationally closed projects.
3 Project revenue and costs
Revenue from construction contracts is recognised based on the stage of completion determined with reference to the actual costs incurred up to reporting date on the construction contract and the estimated cost to complete the project. The percentage-of- completion method places considerable importance on accurate estimates to the extent of progress towards completion and may involve estimates on the scope of deliveries and services required for fulfilling the contractually defined obligations. These significant estimates include total contract costs, total contract revenues, contract risks, including technical, political and regulatory risks, and other judgments. The Company re-assesses these estimates on periodic basis and makes appropriate revisions accordingly.
4 Fair value measurement
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using appropriate valuation techniques. The inputs for these valuations are taken from observable sources where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of various inputs including liquidity risk, credit risk, volatility etc. Changes in assumptions/ judgements about these factors could affect the reported fair value of financial instruments. Refer Note 34 of financial statements for the fair value disclosures and related sensitivity.
5 Employee benefits
The cost of the defined benefit gratuity plan and other post-employment leave benefits are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases are based on expected future inflation rates. Refer note 21 of financial statements for disclosure.
6 Leases
Estimates are required to determine the appropriate discount rate used to measure lease liabilities. The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Company 'would have to pay', which requires estimation when no observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease. The Company estimates the IBR using observable inputs (such as market interest rates, bank rates to the Company for a loan of a similar tenure, etc). The Company has applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date.
7 Impairment of non-financial assets
The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating unit's (CGU) fair value less costs of disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or Companys of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
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. In determining fair value less costs
of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
The Company bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Company's CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of five years. For longer periods, a long¬ term growth rate is calculated and applied to project future cash flows after the fifth year. To estimate cash flow projections beyond periods covered by the most recent budgets/forecasts, the Company extrapolates cash flow projections in the budget using a steady or declining growth rate for subsequent years, unless an increasing rate can be justified. In any case, this growth rate does not exceed the long-term average growth rate for the products, industries, or country or countries in which the Company operates, or for the market in which the asset is used.
Impairment losses of continuing operations, including impairment on inventories, are recognised in the statement of profit and loss, except for properties previously revalued with the revaluation surplus taken to OCI. For such properties, the impairment is recognised in OCI up to the amount of any previous revaluation surplus.
For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses no longer exist or have decreased. If such indication exists, the Company estimates the asset's or CGU's recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset's recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the statement of profit and loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase.
8 Retailer Bonding Program
The Company has a loyalty points program, "Retailer Bonding Program", which allows customers to accumulate points that can be redeemed for free products, upto a limited time period. The loyalty points give rise to a separate performance obligation as they provide a material right to the customer. A portion of the transaction price is allocated to the loyalty points awarded to customers based on relative stand-alone selling price and recognized as deferred revenue
until the points are redeemed. Revenue is recognized upon redemption of products by the customer. When estimating the stand-alone selling price of the loyalty points, the Company considers the likelihood that the customer will redeem the points. The Company considers various judgement and estimates like determination of cost of redemption, redeemed points, expiry date, etc. The Company updates its estimates on a quarterly basis and any adjustments to the deferred revenue are charged against revenue.
9 Share based payments
The Company initially measures the cost of cash- settled transactions with employees using a binomial model to determine the fair value of the liability incurred. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent
on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them.
10 Taxes
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.
11 For judgements relating to contingent liabilities, refer note 40(a).
Nature and purpose of reserves Securities Premium
Securities Premium Reserve is used to record the premium on issue of shares and is utilised in accordance with the provisions of the Companies Act, 2013.
General Reserve
Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then the total dividend distribution is less than the total distributable results for that year. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013.
Share options outstanding account
The fair value of the equity-settled share based payment transactions is recognised in Statement of Profit and Loss with corresponding credit to Employee Stock Options Outstanding Account.
Effective Portion of Cashflow Hedges
The Company uses hedging instruments as part of its management of foreign currency risk and interest rate risk associated on borrowings. For hedging foreign currency and interest rate risk, the Company uses foreign currency forward contracts, cross currency swaps, foreign currency option contracts and interest rate swaps. To the extent these hedges are effective, the change in fair value of the hedging instrument is recognised in the effective portion of cash flow hedges. Amounts recognised in the effective portion of cash flow hedges is reclassified to the statement of profit and loss when the hedged item affects profit or loss.
Amalgamation adjustment reserve
The Company creates amalgamation adjustment reserve on account of business combination pursuant to any schemes for merger/demerger, etc.
Note 17 : Other Equity (Contd..)
Retained earnings
Retained earnings are the profits/(loss) that the Company has earned/incurred till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings include re-measurement loss / (gain) on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss.
Capital reserve
In case of business combinations, if the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Company re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in OCI and accumulated in equity as capital reserve. However, if there is no clear evidence of bargain purchase, the entity recognises the gain directly in equity as capital reserve, without routing the same through OCI.
Capital redemption reserve
The Company in the past had redeemed certain preference shares of H 1,000.00 lakhs. The Company had set aside an equal amount from retained earnings into capital redemption reserve. Further, the said capital redemption reserve was used for issue of bonus shares in the year ended March 31, 2008 and an amount of H 864.29 lakhs was utilised from the said reserve.
Note 18 : Borrowings
There are no borrowings outstanding as at 31st March 2025 and 31st March 2024.
Note a : Below are the details of the assets hypothecated and immovable properties charged towards the facility of fund and non¬ fund based limits with the Company
First pari passu charge by way of hypothecation of inventories, book debts and all movable assets under the head property, plant and equipment
First pari passu charge on the Company's immovable properties at
- Wardha premises - Plot no. 36, Block no. 17, Mouza no. 225, Bacharaj road, Gandhi Chowk, Wardha
- Hari Kunj - Flat No. 103 and 104, 'B' wing, Sindhi Society, Chembur East, Mumbai - 400071
Second pari passu charge over present and future property, plant and equipment of the Company, situated at
- Chakan Unit : Village Mahalunge, Chakan Talegaon Road, Khed, Pune - 410501;
- Showroom on Ground floor and Office Premises on Second Floor at Bajaj Bhawan 226, Jamnalal Bajaj Marg, Nariman Point, Mumbai 400 021.
- Office Premises No : 001, 502 and 701, 'Rustomjee Aspiree', Bhanu Shankar Yagnik Marg, Off Eastern Highway, Sion (East), Mumbai - 400 022
- R & D centre at Plot no. 27/ pt 2/ at Millennium Business Park, TTC Industrial area, Mahape, Navi Mumbai The Company has not defaulted on any loans which were due for repayment during the year.
Note b : The Company has funded and non-funded borrowing limits from banks and financial institutions and has utilised the same for the specific purpose for which it was taken. Further, these limits are on the basis of security of current assets and the Company has filed quarterly returns / statement of current assets with banks or financial institutions which are in agreement with the books of accounts.
a) Funding arrangements and Funding Policy
The scheme is managed on funded basis. Payment for present liability of future payment of PF is made by the Company towards shortfall of Bajaj Electricals Limited Employees' Provident Fund Trust and Matchwel Electricals (India) Ltd Employees' Provident Fund Trust. The investments for the same are managed by Trustees as per advice and recommendations of a professional consultant and in compliance of obligatory pattern of investments as per government notification in official gazette for the pattern of investment for EPF exempted establishments. Any deficit in the assets of PF Trusts is funded by the Company. The provident fund for certain employees is a defined contribution plans covered under RPFC Contributions
Considering the emerging practices in India and globally, the Company has certain obligations on behalf of suppliers or customers and in certain cases bears portion of interest cost. The company has treated the same as a separate line item as trade credit arrangements on the face of the balance sheet under financial liabilities to provide users to assess impact on liabilities, cash flows and liquidity risks more clearly. Suppliers credit was hitherto included in trade payables and customer channel financing was included in other financial liabilities. These are not due as on the date of the balance sheet.
* Customer credits include receivables which are subject to factoring arrangements and channel financing facilities. Under this arrangement the Company has transferred the relevant receivables to the factor in exchange for cash. The Company continues to recognise the transferred assets in their entirety in its balance sheet with the corresponding liability under customer credits.
** Supplier's credit also includes amounts payable towards vendor financing entered into with the suppliers. Under this arrangement, the supplier is eligible to receive payment prior to the expiry of extended credit period by assigning such invoices to a third-party purchaser bank based on security in the form of an undertaking issued by the Company to the bank. Further, the supplier charges interest to the Company for the extended credit period which has been presented under Finance Cost
Note 33 : Employee stock options : (Contd..)
Assumptions:
Stock Price: Closing price on National Stock Exchange on the date of grant has been considered
Volatility: The expected price volatility is based on the historic volatility, adjusted for any expected changes to future volatility due to publicly available information. The volatility is calculated considering the daily volatility of the stock prices on National Stock Exchange of India Ltd. (NSE), over a period prior to the date of grant corresponding with the expected life of the options.
Risk-free rate of return: The risk-free interest rate being considered for the calculation is the interest rate applicable for a maturity equal to the expected life of the options based on the zero-coupon yield curve for Government Securities
Exercise Price: Exercise Price of each specific grant has been considered.
Time to Maturity: Time to Maturity / Expected Life of options is the period for which the Company expects the options to be live.
Expected divided yield: Expected dividend yield has been calculated as an average of dividend yields for five financial years preceding the date of the grant
The Company's principal financial liabilities comprise of trade payables, trade credits, lease liabilities and other financial liabilities. The main purpose of these financial liabilities is to finance the entity's operations and to provide support for its operations. The Company's principal financial assets include trade receivables, investments, cash and cash equivalents and bank balances, loans and other financial assets, that derive directly from its operations.
The Company lays down appropriate policies and procedures to ensure that financial risks are identified, measured and managed in accordance with the entity's policies and risk objectives.
The Company is exposed to credit risk, liquidity risk and market risk, which are explained in detail below:
(A) Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counter-party fails to meet its contractual obligations. Credit risk encompasses the direct risk of default, the risk of deterioration of creditworthiness as well as concentration risks. The Company is exposed to credit risk from its operating activities mainly in relation to trade and other receivables and bank deposits and investments.
Trade and other receivables
Trade and other receivables of the Company are typically unsecured and credit risk is managed through credit approvals and periodical monitoring of the creditworthiness of customers to which the Company grants credit terms. In respect of trade receivables, the Company typically operates in two segments:
Consumer products
The Company sells the products mainly through various channels i.e. dealers and distributors, institutions and e-commerce and through government sector. The appointment of dealers, distributors, institutions is strictly driven as per the standard operating procedures and credit policy followed by the Company. In case of government sector, the credit risk is low.
Lighting Solutions
In case of Business to Consumer (B2C) sub-segment, the credit risk of the receivables are similar to consumer products.
In case of Business to Business (B2B) sub-segment, the Company undertakes projects for government institutions (including local bodies) and private institutional customers. The credit concentration is more towards government institutions. These projects are normally of duration of 6 months to 1 year. Such projects normally are regular tender business with the terms and conditions agreed as per the tender. The Company enters into such projects after careful consideration of strategy, terms of payment, past experience etc.
In case of private institutional customers, before tendering for the projects company evaluate the creditworthiness, general feedback about the customer in the market, past experience, if any with customer, and accordingly negotiates the terms and conditions with the customer.
The Company assesses its trade and other receivables for impairment at the end of each reporting period. In determining whether an impairment loss should be recorded in profit or loss, the Company makes judgements as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from such trade and other receivables. In respect of trade receivables the Company has a provisioning policy that is commensurate to the expected losses. The provisioning policy is based on past experience, customer creditability, and also on the nature and specifics of business. In case of B2B sub-segment in Lighting Solutions, the Company also provides on more case-to-case basis.
The maximum exposure to credit risk as at March 31, 2025 and March 31, 2024 is the carrying value of such trade and other receivables as shown in note 6, 8 and 13 of the standalone financial statements.
Bank deposits & Investments
The Company maintains its cash and bank balances with credit worthy banks and financial institutions and reviews it on an on-going basis. Moreover, the interest-bearing deposits are with banks and financial institutions of reputation, good past track record and high- quality credit rating. Hence, the credit risk is assessed to be low. The maximum exposure to credit risk as at March 31, 2025 and March 31, 2024 is the carrying value of such cash and cash equivalents and deposits with banks as shown in note 8, 12 and 13 of the financials.
B) Liquidity risk
The Company has a central treasury department, which is responsible for maintaining adequate liquidity in the system to fund business growth, capital expenditures, as also ensure the repayment of financial liabilities. The department obtains business plans from business units including the capex budget, which is then consolidated and borrowing requirements are ascertained in terms of long term funds and short-term funds. Treasury maintains flexibility in funding by maintaining availability under committed credit lines in the form of fund based and non-fund based (LC and BG) limits.
The limits sanctioned and utilised are then monitored monthly, fortnightly and daily basis to ensure that mismatches in cash flows are taken care of, all operational and financial commitments are honoured on time and there is proper movement of funds between the banks from cashflow and interest arbitrage perspective.
(C) Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk such as commodity risk.
(i) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates.
The Company operates in the global market and is therefore exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the US Dollar ('USD'), Euro ('EUR'), Great Britain Pound ('GBP'), Chinese Yuan Renminbi ('RMB'), United Arab Emirates Dirham ('AED'), and Canadian Dollar ('CAD'). Exposure is largely in exports receivables and Imports payables arising out of trade in the normal course of business. As these commercial transactions are recorded in currency other than the functional currency (INR), the Company is exposed to Foreign Exchange risk arising from future commercial transactions and recognised assets and liabilities. The Company is a net importer as its imports and other forex liabilities exceeds the exports. It ascertains its forex exposure and bifurcates the same into forex receivables and payables. These exposures are covered by taking appropriate forward cover from the banks.
The Company takes a forward cover based on the underlying liability for the estimated period which would be closed to the likely maturity date of the forex liability proposed to be hedged. On maturity date, the forward contracts are utilized for settlement of the underlying transactions or cancelled.
(ii) 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. In case of short term borrowings, the interest rate is fixed in a large number of cases. Hence, interest rate risk is assessed to be low. Accordingly, the sensitivity / exposure to change in interest rate is insignificant
(iii) Commodity Price risk
The Company's revenue is exposed to market risk of price fluctuations related to the sales of its products. Market forces generally determine the prices for the products sold by the Company. This prices may be influenced by the factors such as supply, demand, production cost (including the cost of raw materials), regional and global economic conditions and growth. Adverse changes in any of the factors may reduce the revenue that Company earns from sale of its products. The Company is therefore subject to fluctuations in prices for the purpose of raw materials like Aluminium, Copper and other raw material inputs.
Commodity hedging is used primarily as a risk management tool to secure the future cash flow in case of volatility by entering into commodity forward contracts. The Company has entered into commodity forward contracts for aluminium and Copper. Hedging the price volatility of forecast aluminium and copper purchases is in accordance with the risk management strategy outlined by the Board of Directors. Hedging commodity is based on procurement schedule and price risk. Commodity is undertaken as a risk offsetting exercise and depending upon market conditions, hedges may extend beyond the financial year.
There is an economic relationship between the hedged items and the hedging instruments as the terms of the foreign exchange and commodity forward contracts match the terms of the expected highly probable forecast transactions (i.e., notional amount and expected payment date). The Company has established a hedge ratio of 1:1 for the hedging relationships as the underlying risk of the foreign exchange and commodity forward contracts are identical to the hedged risk components. To test the hedge effectiveness, the Company uses the hypothetical derivative method and compares the changes in the fair value of the hedging instruments against the changes in fair value of the hedged items attributable to the hedged risks.
The hedge ineffectiveness can arise from:
• Differences in the timing of the cash flows of the hedged items and the hedging instruments
• Different indexes (and accordingly different curves) linked to the hedged risk of the hedged items and hedging instruments
Note 35: Financial risk management objectives and policies (Contd..)
• The counterparties' credit risk differently impacting the fair value movements of the hedging instruments and hedged items
• Changes to the forecasted amount of cash flows of hedged items and hedging instruments There are no commodity future contracts held as on 31st March 2025 and 31st March 2024.
There are no hedging transactions during the year ended as on 31st March 2025 and 31st March 2024.
There are no hedging gain/loss during the year ended as on 31st March 2025 and 31st March 2024.
Note 36: Capital Management
The Company has cash surplus and has no capital other than equity and reserves.
The cash surpluses are currently invested in income generating debt instruments (including through mutual funds) and money market instruments depending on economic conditions in line with the guidelines set out by the Management. Safety of capital is of prime importance to ensure availability of capital for operations. Further the objective of the Company's capital management is to safeguard its ability to continue as going concern, maintain strong credit rating, preserve cash and to ensure that it maintains an efficient capital structure and maximize shareholder value.
The Company does not have any borrowings and does not borrow funds unless circumstances require. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders or issue new shares. The Company is not subject to any externally imposed capital requirements. No changes were made in the objectives, policies or processes for managing capital during the year ended March 31, 2025 and March 31, 2024.
# As the future liability for defined benefit obligations and other long term employment benefits is provided on an actuarial basis for the Company as a whole, the amounts pertaining to key managerial personnel is not ascertainable and hence not included above.
There are no loans or advances granted to promoters, directors, KMPs and the related parties that are repayable on demand or without any terms or period of repayment
" Refer note 40(xi) and 40(xii) for transactions entered between Bajaj Electricals Limited and Bajel Projects Limited pursuant to the scheme of demerger.
As on March 31, 2025, the Company has granted 240,738 employee stock options to Key Managerial Personnel. Of this, 17,875 options are vested, 16,113 options are unvested, 74,750 options are exercised and 132,000 options are cancelled.
Terms and conditions of major transactions with related parties
(i) Sales to related parties and concerned balances
Sales are made to related parties on the same terms as applicable to third parties in an arm's length transaction and in the ordinary course of business. The Company mutually negotiates and agrees sales price, discount and payment terms with the related parties by benchmarking the same to transactions with non-related parties, who purchase goods and services of the Company in similar quantities. Such sales generally include payment terms requiring related party to make payment within 30 to 60 days from the date of invoice.
Trade receivables outstanding balances are unsecured, interest free and require settlement in cash. No guarantee or other security has been received against these receivables. The amounts are recoverable within 30 to 60 days from the reporting date (31 March 2024: 30 to 60 days from the reporting date). For the year ended 31 March 2025, the Company has not recorded any impairment on receivables due from related parties (31 March 2024: Nil)
(ii) Purchase of goods and concerned balances
Purchases are made from related parties on the same terms as applicable to third parties in an arm's length transaction and in the ordinary course of business. The Company mutually negotiates and agrees purchase price and payment terms with the related parties by benchmarking the same to sale transactions with non-related parties entered into by the counter-party and similar purchase transactions entered into by the Company with the other non-related parties. Such purchases generally include payment terms requiring the Company to make payment within 30 to 60 days from the date of invoice.
Trade payables outstanding balances are unsecured, interest free and require settlement in cash. No guarantee or other security has been given against these payables. The amounts are payable within 30 to 60 days from the reporting date (31 March 2024: 30 to 60 days from the reporting date).
(iii) Compensation to KMP of the Company
The amounts disclosed above are the amounts recognised as an expense during the financial year related to KMP. The amounts do not include expense, if any, recognised toward post-employment benefits and other long-term benefits of key managerial personnel. Such expenses are measured based on an actuarial valuation done for each Company in the Company as a whole. Hence, amounts attributable
to KMPs are not separately determinable. Short-term employee benefits includes the sitting fees and commission as approved by the Board. Long-term employee benefits includes contribution to provident fund. Post-employment benefits includes contribution to super annunation fund. Further non-executive directors do not receive any gratuity or post-employment benefits from the Company.
(iv) Transactions with group entity (Bajel Projects Limited)
The transactions entered with Bajel Projects Limited mainly includes transactions like cross charge for shared services, reimbursement of expenses and rental for a let-out property. All of these transactions are on the same terms as applicable to third parties in an arm's length transaction and in the ordinary course of business. During the year, the Company has also entered into a transaction, where the Company has places fixed deposits on behalf of the group entity. The Company has carried out a benchmark analysis and is adequately compensated for the risk undertaken. Outstanding balances are unsecured, interest free and require settlement in cash. No guarantee or other security has been received against these outstanding. The amounts are recoverable within 30 to 60 days from the reporting date (31 March 2024: 30 to 60 days from the reporting date). For the year ended 31 March 2025, the Company has not recorded any impairment on these outstanding due from related parties (31 March 2024: Nil)
The Company has also given certain performance guarantees to third parties on behalf of the group entity. The Company has entered into a back-to-back indemnity arrangement by way of an Undertaking cum Corporate Guarantee ("UGC"), whereby the group entity shall, inter alia, agree to indemnify the Company for any loss, if any, suffered in the event that any Guarantee is invoked by a customer during this interim period. For the year ended 31 March 2025, the Company has not recorded any impairment on guarantee arrangement (31 March 2024: Nil). Refer note 40(xi) and 40(xii) for more details
(v) Transactions with group entity (Bajaj Allianz General Insurance Company Limited)
The Company has taken certain general insurances like warranty insurance and others from the group entity Bajaj Allianz General Insurance Company Limited. All of these transactions are on the same terms as applicable to third parties in an arm's length transaction and in the ordinary course of business. The Company has certain insurance claims receivable for warranty insurances as on the balance sheet date. For the year ended 31 March 2025, the Company has not recorded any impairment on these outstanding due from the group entity (31 March 2024: Nil)
(vi) Transactions with group entity (Bajaj Allianz Life Insurance Co Limited)
The Company has taken insurance policies towards the gratuity and earned leave obligations towards the employees. These insurance policies are actuarially valued by an independent valuer. For the year ended 31 March 2025, the Company has not recorded any impairment on these outstanding due from the group entity (31 March 2024: Nil)
(vii) Transactions with group entity (Bajaj Finance Limited)
The Company has invested the surplus funds in fixed deposits with the the group entity, Bajaj Finance Limited. The rate of interest offered are on the same terms as applicable to third parties in an arm's length transaction and in the ordinary course of business. For the year ended 31 March 2025, the Company has not recorded any impairment on these outstanding due from the group entity (31 March 2024: Nil)
viii) The E-waste Rules, 2022 replaced E-waste (Management) Rules, 2016 and became effective from April 1, 2023. The Company manufactures wide range of products like, consumer electrical and electronics, and large and small electrical and electronic equipment, which are covered under the E-waste Rules, 2022.
Pursuant to the 2024 Amendment Rules, the Central Pollution Control Board (CPCB) also introduced the Guidelines for Environment Compensation under the E-Waste (Management) Rules, 2022 dated 9th September 2024 ("CPCB Guidelines"), which, fixed the lowest price for the purposes of non - fulfilment of EPR target end - product wise, for Electrical and Electronic Equipment ("EEE") products, anywhere between INR 22 per kilogram to INR 41 per kilogram. Many companies/ producers have proceeded to file Writ Petitions before the Hon'ble High Court of Delhi under Article 226 of the Constitution of India, 1950, inter alia challenging the validity of the 2024 Amendment Rules and the CPCB Guidelines.
The Company has also taken a legal opinion on this matter challenging the same as ultravires. Pursuant to the above the Company has fulfilled its EPR obligations of FY25 at the rates prevailing/charged in the market by the EPR agencies, which is around H 7-10 per kilogram. However, since the matter above is sub-judice, the Company is disclosing H 1,193 lakhs as a contingent liability.
The amounts recognised in the financial statements towards fulfilment of EPR obligations for FY25 is H 1,001.68 lakhs which is shown under other expenses (note 30).
ix) These represent legal claims filed against the Company by various parties and these matters are in litigation. Management has assessed that in all these cases the outflow of resources embodying economic benefits is not probable.
x) The Company had in earlier years terminated employment agreements of few die casting workmen at the Chakan plant. On 3rd July, 2018, the Honourable Hight Court of Bombay had awarded the appeal in favour of the Company. On 27th June, 2019, the appeal on the matter has been admitted in the Honourable Supreme Court. Management has assessed that the outflow of resources embodying economic benefits is not probable and has accordingly considered the claim of H 354.17 lakhs as contingent liability as at March 31, 2025 (H 328.70 as at March 31, 2024).
xi) For certain customer contracts that formed part of the demerged undertaking (erstwhile EPC Segment of the Company), the Company had provided certain performance bank guarantees. For smooth transitioning, the Company had allowed these guarantees to remain in place for a limited period post the effective date (September 1, 2023) until such time as Bajel Projects Limited (BPL) is able to have them replaced by its own bank guarantees. In turn, BPL and the Company has entered into a back-to- back indemnity arrangement by way of an Undertaking cum Corporate Guarantee ("UGC"), whereby BPL shall, inter alia, agree to indemnify the Company for any loss, if any, suffered in the event that any Guarantee is invoked by a customer during this interim period. The open exposure as on March 31, 2025 and March 31, 2024 is H 1,571.86 lakhs and H 14,101.96 lakhs, respectively.
xii) Before the Scheme of Demerger between the Company and Bajel Projects Limited ('BPL') (erstwhile EPC segment of the
Company), took effect, the Company had secured a contract for developing the electric supply infrastructure in Sasaram and Munger, Bihar, by South Bihar Power Distribution Company Limited ("Contract"). Following the Scheme, this Contract stands transferred and vested in Bajel Projects Limited.
To facilitate this transition of the Contract smoothly, it was proposed to form a Tripartite Agreement among Bajel Projects Limited, the Company, and South Bihar Power Distribution Company Limited, alongside an Irrevocable Indemnity Cum Undertaking between Bajel Projects Limited and the Company.
b. Commitments
i. Estimated amounts of contracts remaining to be executed in capital account (net of capital advances) is H 1,546.99 lakhs (March 31, 2024, H 755.58 lakhs).
Contract assets are initially recognised for revenue earned from supply of materials and erection services provided when the performance obligation is met. Upon achievement and acceptance of milestones mentioned by the customer, the amounts recognised as contract assets are reclassified to trade receivables.
Contract liabilities are relates to payments received in advance of performance under the contract and billing in excess of contract revenue recognised. Contract liabilities are recognised as revenue when the Company satisfies the performance obligation under the contract.
(iii) Performance obligations
Information about the Company's performance obligations under Consumer Products & Lighting Solutions segment are summarised below:
Consumer Product and B2C sub-segment of Lighting Solutions Segment:
a) Delivery of goods:
The Company sells fans, appliances and lighting products to the customers. The performance obligation is satisfied and revenue is recognised on dispatch of the goods to the customers. The stand alone selling price of the performance obligation is determined after taking the variable consideration and right to return. The contracts do not have a significant financing component. The Company offers standard warranty on selected products. The Company makes provision for same as per the principles laid down under Ind AS 37. The payment is generally due within 30 to 60 days across various streams of customers.
b) Loyalty program:
The Company operates a customer loyalty program (for retailers), where the customer is awarded certain points on purchase of selected products from the Company. The customer (retailer) can redeem these points in future. The Company treats the redemption of customer loyalty points as a separate performance obligation. Accordingly, the revenue is recognised by allocating the total transaction price on the stand alone selling prices of sale of goods and loyalty points.
c) Extended warranties:
The Company provides a warranty beyond fixing defects that existed at the time of sale. These service-type warranties are bundled together with the sale of products. Contracts for bundled sales of products and a service-type warranty comprise two performance obligations because the product and service-type warranty are both sold on a stand-alone basis and are distinct within the context of contract. Using the relative stand-alone selling price method, a portion of the transaction price is allocated to the service-type warranty and recognised as deferred revenue. Revenue for service-type warranties is recognised over the period in which the service is provided based on the time elapsed.
B2B sub-segment of Lighting Solutions:
The performance obligations is the supply of materials and erection services. The supply of materials and erection services are promised goods and services which are not individually distinct. Hence both of them are counted as a single performance obligation under the contract. The satisfaction of this performance obligation happens over time, as the performance or enhancement of the obligation is controlled by the customer. Also, the performance of the obligation creates an asset without any alternative use to the customer. The Company uses the input method to determine the progress of the satisfaction of the performance obligation and accordingly recognises revenue.
The standalone selling price of the performance obligation is determined after taking the variable consideration and significant financing component.
The Company for the consumer products segment, generally takes godowns on lease to store the goods at various locations. These godowns generally have a term of 1 year to 3 years. There are few godowns with a longer lease period of 5 years or more also. Further, the Company has few guest houses, residential premises and office premises also on leases which generally for a longer period ranging from 2-5 years.
The Company's obligations under its leases are secured by the lessor's title to the leased assets. Upon adoption of Ind AS 116, the Company applied a single recognition and measurement approach for all leases for which it is the lessee, except for short-term leases and leases of low-value assets. The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets, on the commencement of the lease. There are several lease contracts that include extension and termination options. The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. The leases which the Company enters, does not have any variable payments. The lease rents are fixed in nature with gradual escalation in lease rent.
Apart from the above, the Company also has various leases which are either short term in nature or the assets which are taken on the leases are generally low value assets (e.g. printers). Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.
1. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
2. The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies beyond the statutory period,
3. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
4. 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
5. 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,
6. The Company has not had or does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961
7. The Company has not granted any loans or advances in nature of loans to promoters, directors and KMPs either severally or jointly with any other person during the year ended March 31, 2025 and March 31, 2024.
8. The Company has not been declared wilful defaulter by any bank, financial institution, government or government authority.
9. The Company has not revalued its property, plant and equipment (including right-to-use assets) or intangible assets during the year ended March 31, 2025 and March 31, 2024.
10. Transactions with the companies which are struck off are as under
11. The Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software except that the Company is unable to comment on whether certain features of the audit trail of the said software has operated from the period September 8, 2024, to February 11, 2025 or whether there were any instances of audit trail feature being tampered during the said period in the absence of log of changes to certain audit features. Additionally, the audit trail of prior year has been preserved by the Company as per the statutory requirements for record retention to the extent it was enabled and recorded in the respective year. The same has been remediated as on date of adoption of these standalone financial statements.
Note 49: Subsequent events
The Company has evaluated subsequent events from the balance sheet date through May 12, 2025, the date at which the standalone financial statements were available to be issued, and determined that there are no material items to disclose.
Note 50: Business Combinations
Merger of Nirlep Appliances Private Limited (NAPL) into the Company
The Hon'ble National Company Law Tribunal, Mumbai Bench, vide its order dated March 01, 2024 ("Order") [passed in the matter of Company Scheme Petition No. C.P (C.A.A)/250(MB)2023 connected with C.A. (CAA)/246(MB)2022) ("Petition") in respect of the Scheme], had inter-alia approved the Scheme of Merger by Absorption of Nirlep Appliances Private Limited ("Transferor Company") with Bajaj Electricals Limited ("Transferee Company") and their respective shareholders under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 ("Scheme").
Accordingly, the Company had accounted for the merger under the pooling of interest method in financial year 2023-24 as prescribed in IND AS 103 Business Combinations of entities under common control. The Company had recorded the assets and liabilities, of the Transferor Company vested in it pursuant to this Scheme, at the carrying values of the Transferee Company. The identity of the reserves of the Transferor Company had been preserved and the Transferee Company had recorded the reserves of the Transferor Company in the same form and at the carrying amount.
Demerger of EPC segment
During the previous year, Hon'ble National Company Law Tribunal, Mumbai Bench (""NCLT"") had approved the Scheme of Arrangement between Bajaj Electricals Limited "Demerged Company") and Bajel Projects Limited ("Resulting Company") and their respective shareholders (""Scheme""). On July 5, 2023, the Company had received a certified true copy of the order dated June 8, 2023 (""Order"") passed by the Hon'ble NCLT approving the Scheme. The Company had completed the process of obtaining the requisite consent, approval or permission of the appropriate authorities, which by applicable law or contract, agreement, were necessary for the effective transfer of business and/or implementation of the Scheme. The Scheme, has been made effective from September 1, 2023.
Accordingly, effect of the de-merger had been considered in the standalone financial statements for the year ended March 31, 2024. The assets and liabilities relating to the demerged undertaking have been de-recognised from the books and have been adjusted against the retained earnings in the said standalone financial statements.
Note 51: Previous year's figures have been regrouped / reclassed wherever necessary to correspond with the current year's classification / disclosure.
As per our report attached of even date For and on behalf of the Board of directors
For S R B C & CO LLP of Bajaj Electricals Limited
ICAI Firm Registration No. 324982E/E300003
Chartered Accountants Shekhar Bajaj Sanjay Sachdeva
Chairman Managing Director & Chief Executive Officer
DIN: 00089358 DIN: 11017868
per Aruna Kumaraswamy Prashant Dalvi EC Prasad Shailesh Haribhakti
Partner Company Secretary Chief Financial Officer Chairman - Audit Committee
Membership No.219350 DIN: 00007347
Mumbai, May 12, 2025 Mumbai, May 12, 2025
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