2.10 Provisions and contingent liabilities
Provisions are recognized when there is a present obligation as a result of a past event, it is prooable that an outflow
of resources embodying economic benefits will be required to settle the obligation and them is a reliable estimate of
the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the
present obligation at the Balance sheet date.
The Company offers assurance-type warranties for its coating / recoating service for a period of eight years in the
case of coating/ ÝÝecoating services and on certain electro chloriators and supplies for a period of one year in which
period amounts are recoverable from the customers based on pre-defined terms. Estimated costs from warranty
terms standard to the deliverable are 'Ýecognised when revenue is recorded for the related deliverable. The Company
estimates its warranty costs standard to the deliverable based on historical warranty claim experience and applies
this estimate to the revenue stream for delverables under warranty.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects,
when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the
passage of time is recognized as a finance cost.
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 or a reliable estimate of the amount cannot be made.
2.11 Cash and cash equivalents
Cash and cash equivalent in the ba'ance sheet comprise cash at oanks and cash on hand, which are subject to an
insignificant risk of changes in value.
For the purposes of the cash flow statement, cash and cash equivalents include cash on hand and cash in banks.
2.12 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
(a) Financial assets
(i) Initial recognition and measurement
At initial recognition, financial asset is measured at its fair value plus, in the case of a financial asset not
at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the
financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed
in profit or loss.
(ii) Subsequent measurement
For purposes of subsequent measurement, financial assets are classif:ed in following categories:
a) at amortized cost; or
b) at fair value tnrough other comprehensive income; or
c) at fair value through prof t or loss.
The classification depends on the entity’s business model for managing the financial assets and the
contractual terms of the cash flows.
Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows
represent solely payments of principal and interest are measureo at amortized cost. Interest income from
these financial assets is included in finance income using the effective interest >-ate method (EIR).
Fair value through other comprehensive income (FVOCI1: Assets that are held for collection of contractual
cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of
principal and interest, are measured at fair value through other comprehensive income (FVOCI). Movements
in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses,
interest revenue and foreign exchange gains and losses which are recognized in Statement of Profit and
Loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI
is reclassified from equity to Statement of Profit and Loss and recognized in other gains/ (losses). Interest
income from these financial assets is included in other income using the effective interest rate method.
Fair value through profit or loss (FVTPL1: Assets that do rot meet the criteria for amortized cost or FVOCI
are measured at fair value through profit or loss. Fair value income from these financial assets has included
in other income.
Equity instruments: All equity investments in scope of Ind AS 109 are measured at fair value. Equity
instruments which a^e held for trading are classified as at FVTPL. Fo' all other equity instruments, the
Company may make an irrevocable election to present in other comprehensive income subsequent
changes in the fair value. The Company makes such election on an instrument- by-instrument basis. The
classification is made on initial recognition and is irrevocable.
If the Company decides to classify an equity instrument as at FVTOCI, then ail fair value changes on the
instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI
to P&L, even on sale of investment. However, the Company may transfer the cumulative gain or loss within
equity.
Equity instruments included within the FVTPL category are measured at fair vaiue witn ail changes
recognized in the p'o'it and loss.
(iii) Impairment of financial assets
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement
and recognition of impairment loss and credit risk exposure on the financial asseis that are debt instruments
measured at amortised costs e.g. loans, deposits, trade receivables, lease receivable and bank balances.
For recognition of impairment loss on financial assets (trade receivable) and risk exposure, the Company
aetermines that whether there has been a significant increase in the credit risk since initial recognition. If
credit risk has not increased significantly, 15-quarters ECL is used to provide for impairment loss. However,
if credit risk has increased significantly, lifetime ECL is used. If in subsequent years, credit quality of the
instrument improves such that there is no longer a significant increase in credit risk since initial recognition,
then the entity reverts to recognizing impairment loss allowance based on 15 quarters ECL.
As a practical expedient, the Company uses a provision matrix, based on the age of the receivables classified
into various age buckets, to determine impairment loss allowance on portfolio of its trade receivables. The
matrix is based on its historically observed default rates over the expected life of the trade receivables and
is adjusted for forward looking estimates. At every reporting date, the historical observed default rates are
updated and changes in the forward looking estimates are analysed
ECL is the difference between all contractual cash flows that are due to the Company in accordance with
the contract and all the cash flows that the entity expects to receive (i.e. all shortfalls), discounted at the
original EIR. When estimating the cash flows, an entity is required to consider all contractual terms of the
financial instrument (including prepayment, extension etc.) over the expected life of the financial instrument.
However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then
the entity is required to use the remaining contractual term of the financial instrument.
In general, it is presumed that credit risk has significantly increased since initial recognition if the payment
is more than 90 oays past due.
ECL impairment loss allowance (or reversal) recognized during the year is recognized as income/expense
in the statement of profit and loss. In balance sheet ECL for financial assets measured at amortized cost is
presented as an allowance, i.e. as an integral part of the measurement of those assets in the balance sheet.
The allowance reduces the net carrying amount. Until the asset meets write off criteria, the Company does
not reduce impairment allowance from the gross carrying amount.
(iv) Derecognition of financial assets
A financial asset is derecognized only when
a) the rights to receive cash flows from the financial asset is transferred or
b) retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual
obligation to pay the cash flows to one or more recipients.
Where the financial asset is transferred then in that case financial asset is derecognized only if substantially
all risks and rewards of ownership of the financial asset is transferred. Where the entity has not transferred
substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognized
(b) Financial liabilities
(i) Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or
loss ana at amortized cost, as appropriate.
All financial liabilities are recognized initially at fair value net of directly attributable transaction costs.
(ii) Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through pro'it or loss include financial liabilities heid for trading and financial
liabilities designated upon initial recognition as at fair value through prof:t or loss Separated embedded
derivatives are also classified as held for trading unless they are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognized in the Statement of Profit and Loss.
(iii) Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or
expires. Wher an existing financial liability is replaced Dy another from the sane lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the derecognition of the original liability and the recogn tion of a new liability. The
difference in the respective carrying amounts is recognized in the Statement of Profit and Loss as finance
costs.
(c) Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a
legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or
realize the asset and settle the liability simultaneously. The legally enforceable rignt must not be contingent on
future events and must be enforceable in the normal course of business and in the event of default, insolvency
or bankruptcy of the Company or the counterparty.
2.13 Employee Benefits
(a) Short-term obligations
Liabilities for salaries and wages, including non-monetary benefits that are expected to be settled wholly within
12 months after the end of the year in which the employees render the related sen/ice aKe recognized in respect
of employees’ services up to the end of the year and are measured at the amounts expected to be paid when the
liabilities are settled. The liabilities are presented as current employee benefit obligations in the oalance sheet.
(b) Other long-term employee benefit obligations
(i) Defined contribution plan
Provident Fund: Contribution towards provident fund is made to the regulatory authorities, where the
Company has no further obligations. Such benefits are classified as Defined Contribution Schemes as
the Company does not carry any further obligations, apart from the contributions made on a monthly basis
which are charged to the Statement of Profit and Loss.
Employee’s State Insurance Scheme: Contribution Towards employees’ state insurance scheme is made
to the regulatory authorities, where the Company has no further obligations. Sucn bone'its are classified
as Defined Contribution Schemes as the Company does not carry any further obligations, apart from the
contributions made on a monthly basis which are charged to the Statement of Profit and Loss.
(ii) Defined benefit plans
Gratuity: The Company provides for gratuity, a definec benefit plan (the “Gratuity Plan’’) covering eligible
employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity F’lan provides a lump sum
payment to vested employees at retirement, death, incapacitation or termination of employment, of an
amount based on the respective employee’s salary. The Company’s liability is actuarially determined (using
the Projected Unit Credit method) at the end of each year. Actuarial losses/gains are recognized in the other
comprehensive income in the year in which they arise.
(iii) Other long term employee oenefit obligations
All employee benefits (other than post-employment benefits and termination benefits) which do not fall
due wholly within twelve months after the end of the period in which the employees render the related
services are determined based on actuarial valuation or discounred present value method carried out at
each balance sheet date. The expected cost of accumulating compensated absences is determined by
actuarial valuation performed by an independent actuary as at every year end using projected unit credit
method on the additional amount expected to be paid / availed as a result of the unused entitlement that
has accumulated at the balance sheet date. Expense on non-accumulating compensated absences is
recognised in the period in which the absences occur. The Company presents the entire leave as a current
liability in the balance sheet, since it does not have an unconditional right to defer its settlement for 12
months after the reporting date.
2.14 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 considered in ascertaining
the Company’s earnings per share is the net profit or loss for the year after deducting preference dividends and any
attributable tax thereto for the year. The weighted average number of equity shares outstanding during the year and
for all the years 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 or loss for the year attributable to equity
shareholders and the weighted average number of shares outstanding during the year is adjusted for the effects of all
dilutive potential equity shares.
3 Significant accounting judgments, estimates and assumptions
In tno preparation of the financial statements, the Company makes judgements, estimates and assumptions about
the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other factors that are considered to be relevant.
Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised prospectively.
Information about assumptions, judgements and estimation uncertainties that have a significant risk of resulting in a
material adjustment in the year ending March 31,2026 are as below :
3.1 Estimates and assumptions
The key assumptions concerning the future and otner key sources of estimation uncertainty at the year eno date,
that have a significant risk of causing a material adjustment to the carding amounts of assets and liabilities within the
next financial year, are described below. The Company based its assumptions and estimates on parameters available
when the financial statements were prepared. Existing circumstances and assumptions about future developments,
however, may change due to market cnanges or circumstances arising that are beyond the control of the Company.
Such changes are reflected in the assumptions wher they occur.
(a) Useful lives of property, plant and equipment and intangible assets
As described in the Material accounting policies, the Company reviews the estimated useful lives of property,
plant and equipment and intangible assets at the end of each reporting period. Useful lives of intangible assets
is determined on the basis of estimated benefits to be derived from use of such intangible assets. These
reassessments may result in change in the deoreciation /amortisation expense in future periods.
(b) Actuarial Valuat'on
The determination of Company’s liability towards oefined 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 Otner Comprehensive Income. Such valuation depend upon assumptions determined
after taking into account discount rate, salary growth rate, expected rate of return, mortality and attrition rate.
Information about such valuation is provided in notes to the financial statements.
(c) Expected cred'l loss on trade receivable
The impairment provisions for trade receivables are based on assumptions about risk of default and expected loss
rates. The Company uses judgements in making these assumptions and selecting the inputs fo the impairment
calculation, based on Company’s past history, existing market conditions as well as forward looking estimates at
the end of each reporting period.
(d) Warranty expenses
The Company offers assurance-type warranties for its coating / recoating service for a period of eight years in
the case of coating/ recoating sendees and or certain electro chloriators and supplies for a pehod of one year
in which period amounts are recoverable from the customers based on pre-defireo terms. Estimated costs from
warranty terns standard to the deliverable are recognised wnen revenue is recorded for the related deliverable.
The Company estimates its warranty costs standard to the deliverable based on historical warranty claim
experience and applies this estimate to the revenue stream for deliverables under warranty.
4 New and amended standards adopted by the Company
The Ministry of Corporate Af'airs vide noti'ication dated 7 May 2025 and 13 August 2025 notified the Companies
(Indian Accounting Standards) Amendment Rules, 2025 and Companies (Indian Accounting Standards) Second
Amendment Rules 2025, respectively, which amended certain accounting standards (see below), and are effective
for annual reporting periods beginning on or after 1 April 2025:
• Classification of Liabilities as Current or Non-current ana Mon-current Liabilities with Covenants-Amendments
to Ind AS 1,
• Supplier Finance Arrangements - Amendments to Ind AS 7 and Ind AS 107,
• International Tax Reform - Pillar Two Model Rules - Amendments to Ind AS 12,
• Lack of Exchangeability - Amendments to Ind AS 21,
• Lease Liability in Sale and Leaseback - Amendments to Ind AS 116
These amendments did not have any material impact on the amounts recognised in prior periods and are not expected
to significantly affect the current or future periods.
New standards or amendments not yet adopted
• Classification of Liaoilities as Current or Non-current and Non-current Liaoilities with Covenants - Amendments
to Ind AS 1. This amendment also includes specific provisions that will fake effect for reporting periods beginning
on or after 1 April 2026.
De Nora India Limited does not expect this amendment to have an impact on its operations or financial
statements.
(c) Rights, preferences and restrictions attached to shares
The Company has only one class of eqjity shares having a par value of Rs 10 per share, Bach holder of equity
shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The
Board of Directors at its meeting held on May 04, 2026 has recommended a final dividend of INR 4/- per equity
share of INR 10/- each (previous year: Nil) subject to the approval of the shareholders at the ensuing Annual
General Meeting.
In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining
assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the
number of equity shares held by the shareholders.
(D) Terms and conditions of transactions with related parties
The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions.
Outstanding balances at the year-end are unsecureo and interest free except for borrowings and settlement occurs
in cash. There have been no guarantees provided or received for any related party receivables o* payables. For the
year ended March 31,2026, tne Company has not recorded any impairment of receivables relating to amounts owed
by related parties (March 31,2025 - Nil).
The Company’s international / domestic transfer pricing certification is carried out by an independent firm of Chartered
Accountants. The Company has estaDlished a system of maintenance of oocuments and information as required by
tne transfer priciny legislation u/'s. 92-92F of the Income Tax Act, 1961. Up to 31 March, 2025, the last date fo1' which
tne transfer pricing certification was carried out, there were no adjustments made to the transactions entered into with
‘associated enterprises’ as defined in section 92A of the Income Tax Act, 1961. The Management believes that the
international transactions and specified domestic transactions entered into with ‘associated enterprises’ during the
financial year are at arm’s length price and that there will be no impact on the amount of tax expense or the provision
of tax on the applicarion of the transfer pricing legislation to such transactions.
37 Segment Reporting
The chief operating decision maker (CODM) has decided to look at the company performance at single unit level.
Accordingly, the CODM has identified Electrode Technologies as its only reportable segment in accordance with the
requirements of ind AS 108- Operating Segments and no segment information has been provided.
Below is information from entity wide disclosure required in accordance with Ind AS 108 - Ope-ating Segments:
Geographical information
38 Fair values of financial assets and financial liabilities
A. Accounting classification and fair values
Note 39 shows the carrying amounts and fair values of financial assess and financial liabilities, including their
levels in the fair value hierarchy. It does not include fair value information for financial assets and financial
liabilities not measured at fair vaiue if the carrying amount is a reasonable approximation of fair value.
B. Measurement of fair value
The fair values of the financial assets and liabilities are included at the amount at which the instrument could be
exchanged in a current transaction between willing paities, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values:
1. Fair value of cash, bank balances, short-term deposits, trade and other short-term receivables, trade
payables, short term borrowings and other financial liabilities approximate their carrying amounts largely
due to short-term maturities of these Financial instruments.
2. The fair value of non-current financial assets comprising of security term deposits at amortised cost using
Effective Interest Rate (EIR) are not significantly different from the carrying amount.
3. Financial assets that are neither past due nor impaired include cash and cash equivalents, investment in
equity shares and mutual funds, security deposits, term deposits, and other financial assets.
39 Fair value hierarchy
The following is the hierarchy for determining and disclosing the fair value of financial instruments by valuation
technique:
Level 1 : The fair value of financial instruments traded in active markets (such as equity securities) is based on quoted
market prices at the end of the reporting period. The mutual funds are valued using the closing NAV. The quoted market
price used for financial assets held by the group is the current bid price. These instruments are included in level 1.
Level 2: The fair value Of financial instruments that are not traded in an active market is determined using valuation
techniques which maxim.se the use of observable market data and rely as little as possible on entity-specific estimates.
If all significant inputs required to fair value an instrument are observable, the instrument is included in leve1 2.
Level 3: If one or more Of the significant inputs is not based on observable market data, the instrument is included in,
level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in
level 3.
40 Financial risk management objectives and polices
The Company is exposed to various financial risks. These risks are categorized into market risk, credit risk and liquidity
risk. The Company's risx management is coordinated by the Board of Directors and focuses on securing long term and
short term cash flows. The Company does not engage in trading of financial assets for speculative purposes.
(A) 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 equity price risk and commodity risk. Financial instruments affected by market risx include
borrowings and derivative financial instruments.
(i) lnterest rate risK
Interest rate risk is the risk that the fair value or future case flows of a financial instrument will fluctuate
because of changes in market interest rates. The Company does not have exposure to the risk of changes
in market interest rates as the Company does not have any debt obligations outstanding as at March 31
2026 and March 31,2025.
(ii) Foreign currency risk
Foreign 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’s exposure to the risk of changes in foreign
exchange rates relates primarily to the Company’s operating activities (when revenue or expense is
denominated in a different currency from the Company’s functional currency). The risk is measured through
monitoring the net exposure to various foreign currencies and the same is minimized to the extent possible.
(b) Foreign currency sensitivity analysis
The following table demonstrates the sensitivity to a reasonably possible change in the US dollar
and EURO exchange rate (or any other material currency), with all other variables held constant, of
the Company’s profit before tax (due to changes in the fa.r value of monetary assets and liabilities).
The Company’s exposure to foreign currency changes for all other currencies is not material. The
sensitivity analysis includes only net outstanding foreign currency denominated monetary items and
adjusts their translation at the period end for 1% change in foreign currency rates.
The Company is mainly exposed to the price risk due to its investment in mutual funds and equity shares.
The price risk arises due to uncertainties about the future market values of these investments.
As at March 31,2026, the investments in mutual funds amounts to Rs. 5668.51 Lakhs (March 31,2025: Rs.
5164.21 Lakhs). These are exposed to price risk.
The Company has laid policies and guidelines which it adheres to in order to minimize price risk arising from
investments in Debt mutual funds.
1% increase in prices would have led to approximately an additional Rs. 56.68 lakhs gain in the Statement
ol Profit and I oss (2024-25: Rs 51.64 lakhs gain). 1 % decrease in orices would have led to app-oximately
an additional Rs. 56.68 lakhs loss in the Statement of Pro'it and l oss (2024-25: Rs.51.64 lakhs 'oss).
(B) Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails
to moot its contractual obligations. Credit risk arises principally from the Company’s receivables from statutory
deposits with regulatory agencies and also arises from cash held with banks and financial institutions. The
maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing
counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the
counterparties, taking into account their financial position, past experience and other factors.
Credit risk is managed through credit app-ovals establishing credit limits and continuously monitoring the
creditworthiness of customers to which the Company grants credit terms in the normal course of business. The
Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred
losses in respect of trade ana other receivaoies ana investments.
However, the credit risk arising on cash and cash equivalents is limited as the Company invest in deposits with
banks and financial institution with good credit ratings and strong repayment capacity. Investment in securities
Drimarify include investment in liquid mutual funds and equity shares.
Trade receivables
The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer.
The demographics of the customer, including the default risk of the industry and country in which the customer
operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals,
establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company
grants credit terms in the normal course of business.
Expected credit loss assessment
The Company allocates each exposure to a credit risk grade based on a variety of data that is determined to be
predictive of the risk of loss (e.g. timeliness of payments, available press information etc.) and applying experienced
credit juagement. The company follows simplified approach for recognition of impairment loss allowance on Trade
receivables, in respect of receivable from related parties and receivables from specifiea customers, the company
does not use expected credit loss model to assess the impairment loss as there is no credit risk involved and no
past histcy of default from related parties and those specified customers.
Cash and cash equivalent
As at the year end, the Company held cash and cash equivalents Rs 1696.12 Lakhs (March 31, 2025 - Rs.
80^ 65 Lakhs). Credit risk 'rom cash and cash equivalent is managed by the Company's finance department in
accordance with Company's Policy..
Other bank balances
Other bank balances are held with banks with good credit rating.
Investments
The Company limits its exposure to credit risK by generally investing in liquid mutual funds and securities of
counterparties that have a good credit rating. The Company does not expect any losses from non-performance
oy these counter-parties.
Other financial assets
Other financial assets are neither past due nor has any indicators which indicates impairment triggers.
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due.
The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity
to meet its liabilities when due.
The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an on-going basis
to meet operational needs. Any short term surplus cash generated, over and above the amount required for
working capital management and other operational requirements, is retained as cash and cash equivalents (to
the extent required) and any excess is invested in interest bearing term deposits and liquid mutual funds with
appropriate maturities to optimize the cash returns on investments while ensuring sufficient liquidity to meet its
liabilities.
IVaturities of financial liabilities
The following table shows the maturity analysis of the Company’s financial liabilities based on contractually
agreed undiscounted cash flows along with its carrying value as at the Balance Sheet date.
41 Capita] management
For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all
other equity reserves attributable to the equity holders. The primary objective of the Company’s capital management
is to maximize the shareholder value and to ensure the Company's ability to continue as a going concern. The
Company is debt free company and accordingly computation of gearing ratio is not applicable to the company.
42 Provision for warranty
Warranties/ recoating
The Company offers assurance-type warranties for its coating / rocoating service for a period of eight years in the
case of coating/ recoating services and on certain electro chloriators and supplies for a period of one year in which
period amounts are recoverable from the customers based on pre-defined terms. Estimated costs from warranty
terms standard to the deliverable are recognised when revenue is recorded for the related deliverable. The Company
estimates its warranty costs standard to the del.verable based on historical warranty claim experience and applies
this estimate to the revenue stream for deliverables under warranty.
The warranty accrual is reviewed periodically to verify that it properly reflects the remaining obligation based on the
anticipated expenditures over the remaining period. Adjustments a^e made when the actual warranty claim experience
differs from estimates.
Factors that could impact the estimated claim information include the Company’s productivity, costs of materials,
power and labour and the actual recoveries on support contracts.
During the year ended March 31,2026, the Company has recognized provisions of INR 1428.57 lakhs (FY 2024-25:
INR 1439.81 lakhs) relating to warranty. These provisions are determined based on reported, anticipated warranty
claims and other pertinent factors..
(i) The increase in the ratio is attributable to higher profitability, which resulted from an increase in turnover and net
profit margin during the current year.
(ii) The increase in the ratio is attributable to an increase in turnover during the current year.
(iii) Not applicable as the company does not have debt as at March 31,2026 and March 31 202b.
(iv) The increase in the ratio is due to higher turnover, which has led to an increase in the cost of goods sold.
45 Corporate Social Responsibility
As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at
least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility
(CSR) activities. The areas for CSR activities are Listed in Table D below. A CSR committee has been formed by the
company as per the Act. The funds are utilized through the year on these activities which are specified in Schedule
VII of the Companies Act, 2013.
For the year ended March 31,2026, CSR provisions are not applicable to the entity.
46 The Conpany has not traded or invested in Crypto currency or Virtual Currency during the financial year.
47 Undisclosed income
The Company does not have any undisclosed income which is not recorded in the books of account that has been
surrendered or disclosed as income during the year (and previous 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).
48 Details of Benami Property held
The Company does not have any Benami property, where any proceeding has been initiated or pending against the
company for ho'ding any Benami property.
49 Utilisation of Borrowed funds and share premium:
(i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies;, including
‘oreign entities (Intemieaiaiies) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons o'- 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
(ii) The Company has not received any fund from any oerson(s) or entity(ies), including foreign entities (Funding
Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) d rectly 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.
50 The Company has not been declared wilful defaulter Dy any oank or financial institution or government or any
government authority.
51 Relationship with Struck off Companies under section 248 of the Companies Act. 2013 or section 560 of
Companies Act, 1956,
The Company does not have any transactions with companies struck off under section 248 of the Companies Act,
2013 ot section 560 of Companies Act, 1956.
52 Registration ot charges 01 satisfaction with Registrar of Companies
The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory
perioo.
53 The company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with
the Companies (Restriction on number of Layers) Rules, 2017.
54 The company has not entered into any scheme of arrangement which has an accounting impact on cur-ent or previous
financial year.
55 The Company has not revalued its Property, plant and equipment or intangible assets or both during the current year
or previous year.
56 The Title deeds of all the immovable properties other than properties where the company is the lessee and lease
arrangements are duly executed in favour ot the lessee are held in the name of the company.
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