2.20 Provisions:
Provisions are recognised when the Company has a
present obligation (legal or constructive) as a result of
a past event, it is probable that the Company will be
required to settle the obligation, and a reliable estimate
can be made of the amount of the obligation.
The amount recognised as a provision is the best
estimate of the consideration required to settle the
present obligation at the end of the reporting period,
taking into account the risks and uncertainties
surrounding the obligation.
When some or all of the economic benefits required to
settle a provision are expected to be recovered from a
third party, a receivable is recognised as an asset if it is
virtually certain that reimbursement will be received and
the amount of the receivable can be measured reliably.
2.21 Warranties:
Provisions for the expected cost of warranty obligations
are recognised at the date of sale of the relevant
products as per management's best estimate of the
expenditure required to settle the Company's obligation.
2.22 Financial instrument:
Financial assets and financial liabilities are recognised
when the Company becomes a party to the contractual
provisions of the instruments. Financial assets and
liabilities are offset and the net amount is reported in
the Standalone Balance Sheet where there is a legally
enforceable right to offset the recognised amounts and
there is an intention to settle on a net basis or realise the
assets and settle the liabilities simultaneously.
2.23 Financial asset:
Purchases or sales of financial assets in ordinary
course of business are recognised and derecognised
on a trade date basis. Regular way purchases or sales
are purchases or sales of financial assets that require
delivery of assets within the time frame established by
regulation or convention in the market place.
All financial assets are recognized initially at fair value
plus in the case of financial assets not recorded at fair
value through profit or loss (FVTPL), transaction costs
that are attributable to the acquisition of the financial
asset. However, trade receivables that do not contain
a significant financing component are measured at
transaction price.
All recognised financial assets are subsequently
measured in their entirety at either amortised cost
or fair value, depending on the classification of the
financial assets.
Disputed Dues are those receivables against which
legal cases have been filed with the corresponding
legal authorities. The company writes off a financial
assets when there is information indicating that the
debtor is in severe financial difficulty and there is no
realistic prospect of recovery. Financial assets written
off may still be subject to enforcement activities under
the company's recovery procedure, taking into account
legal advice where appropriate. Any recoveries made
are recognized in Profit or loss.
2.23.1 Financial assets at fair value through profit
and loss (FVTPL):
Financial assets at FVTPL are measured
at fair value at the end of each reporting
period, with any gains or losses arising on
re-measurement recognised in the Statement
of profit and loss. The net gain or loss
recognised in the Statement of profit and
loss incorporates any dividend or interest
earned on the financial asset and is included
in the 'Other income / Other Expenses' line
item. Dividend on financial assets at FVTPL
is recognised when the Company's right
to receive the dividends is established,
it is probable that the economic benefits
associated with the dividend will flow to the
entity and the amount of dividend can be
measured reliably.
2.23.2 Impairment of financial assets:
The Company applies the expected credit
loss model for recognising impairment loss on
financial assets measured at amortised cost,
lease receivables, trade receivables, other
contractual rights to receive cash or other
financial asset, and financial guarantees not
designated as at FVTPL.
For trade receivables or any contractual rights
to receive cash or another financial asset that
results from transactions that are within the
scope of Ind AS 115 “Revenue from Contracts
with Customers”, the Company always
measures their allowances at an amount
equal to lifetime expected credit losses.
Further, for the purpose of measuring lifetime
expected credit loss allowance for trade
receivable, the Company has used a practical
expedient as permitted under Ind AS 109
“Financial Instruments”. This expected credit
loss allowance is computed based on a
provision matrix which takes into account
historical credit loss experience and adjusted
for forward-looking information.
2.23.3 Derecognition of financial assets:
The Company derecognises a financial asset
when the contractual rights to the cash flows
from the asset expire, or when it transfers
the financial asset and substantially all the
risks and rewards of ownership of the asset
to another party. If the Company neither
transfers nor retains substantially all the risks
and rewards of ownership and continues to
control the transferred asset, the Company
recognises its retained interest in the asset
and an associated liability for amounts it
may have to pay. If the Company retains
substantially all the risks and rewards of
ownership of a transferred financial asset, the
Company continues to recognise the financial
asset and also recognises a collateralised
borrowing for the proceeds received.
2.23.4 Foreign exchange gains and losses:
The fair value of financial assets denominated
in a foreign currency is determined in that
foreign currency and translated at the spot
rate at the end of each reporting period.
For foreign currency denominated financial
assets measured at amortised cost and
FVTPL, exchange differences are recognised
in the Statement of profit and loss, except
for those which are designated as hedging
instruments in a hedging relationship.
2.24 Financial liabilities:
Financial liabilities are subsequently measured at
amortised cost or at FVTPL.
2.24.1 Financial liabilities at FVTPL:
Financial liabilities such as derivative that is
not designated and effective as a hedging
instrument are classified as at FVTPL.
Financial liabilities at FVTPL are stated at
fair value, with any gains or losses arising
on remeasurement recognised in the
Statement of profit and loss. The net gain
or loss recognised in the Statement of profit
and loss is included in the ‘other income /
expense' line item.
2.24.2 Financial liabilities subsequently
measured at amortised cost:
Financial liabilities that are not held for trading
and are not designated as at FVTPL are
measured at amortised cost.
2.24.3 Foreign exchange gains and losses:
For financial liabilities that are denominated
in a foreign currency and are measured at
amortised cost at the end of each reporting
period, the foreign exchange gains or losses
are determined based on the amortised cost
of the instruments and are recognised in
‘Other income / Other Expenses'.
The fair value of financial liabilities
denominated in foreign currency is
determined in that foreign currency and
translated at the spot rate at the end of the
reporting period. For financial liabilities that
are measured at FVTPL, the foreign exchange
component forms part of the fair value gains
or losses and is recognised in the Statement
of profit and loss.
2.24.4 Derecognition of financial liabilities:
The Company de-recognises financial
liabilities when the Company's obligations are
discharged, cancelled or have expired.
2.25 Derivative financial instruments:
The Company enters into foreign exchange forward
contracts to manage its exposure to foreign
exchange rate risks.
Derivatives are initially recognised at fair value at the
date the derivative contracts are entered into and
are subsequently remeasured to their fair value at
the end of each reporting period. The resulting gain
or loss is recognised in the Statement of profit and
loss immediately.
2.26 Contingent liabilities and contingent assets:
Contingent liability is disclosed in the case of:
i) a present obligation arising from a past event,
when it is not probable that an outflow of resources
will be required to settle the obligation
ii) a present obligation when no reliable estimate
is possible, and
iii) a possible obligation, arising from past
events where the probability of outflow of
resources is not remote.
Contingent assets are neither recognised nor disclosed.
Contingent liabilities are reviewed at each balance
sheet date and updated / recognised as appropriate.
3. CRITICAL ACCOUNTING JUDGEMENTS
AND KEY SOURCES OF ESTIMATION
UNCERTAINTY:
In the application of the Company's accounting policies,
which are described in Note 2, the management of the
Company are required to make judgements, estimates
and assumptions about the carrying amounts 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.
The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is
revised if the revision affects only that period, or in the
period of the revision and future periods if the revision
affects both current and future periods.
In the following areas the management of the Company
has made critical judgements and estimates:
a. Employee Benefits:
The present value of the defined benefit
obligations depends on a number of factors that
are determined on an actuarial basis using a
number of assumptions. The assumptions used
in determining the net cost (income) for post
employments plans include the discount rate.
Any changes in these assumptions will impact the
carrying amount of such obligations.
The Company determines the appropriate discount
rate at the end of each year. This is the interest rate
that should be used to determine the present value
of estimated future cash outflows expected to be
required to settle the defined benefit obligations.
In determining the appropriate discount rate,
the Company considers the interest rates of
government bonds of maturity approximating the
terms of the related plan liability.
b. Useful lives of property, plant and
equipment & intangible assets (Including
Intangible Asset under development):
The Company reviews the useful life of property,
plant and equipment & intangible assets at the
end of each reporting period. This reassessment
may result in change in depreciation expense in
future periods.
The Company's assessment of carrying value
of intangible under development have inherent
challenge with accurately predicting the future
economic benefits which includes estimate of
volume projection, margin, regulatory changes,
expected capital expenditure for production
phase and judgement around the probability
of acceptance of technology/new product.
Estimate and judgement around these inputs are
critical to assess the carrying value of assets.
The Company undertakes significant levels of
research and development activities for engine
development and its various uses. A periodic
review is undertaken during the life cycle of the
engine. The Company applies judgement to
determine the point at which the recognition
criteria under accounting standard is satisfied.
c. Provision for warranty:
The Company gives warranties for its products,
undertaking to repair or replace the items that
fail to perform satisfactorily during the warranty
period. Provision made at the year-end represents
the amount of expected cost of meeting such
obligations of rectification / replacement.
The timing of the outflows is expected to be within
a period of nine to sixty six months.
d. Provisions and Contingent Liabilities:
A provision is recognised when the Company
has a present obligation as a result of past event
and it is probable that an outflow of resources
will be required to settle the obligation, in respect
of which a reliable estimate can be made.
Provisions (excluding retirement benefits and
compensated absences) are not discounted to
its present value and are determined based on
best estimate required to settle the obligation at
the Balance sheet date. These are reviewed at
each Balance sheet date and adjusted to reflect
the current best estimates. Contingent liabilities
are not recognised in the financial statements.
A contingent asset is neither recognised nor
disclosed in the financial statements.
e. Impairment of Investment in Subsidiaries:
The investments in subsidiaries are carried at cost
and tested for impairment in accordance with
provisions applicable to impairment of non-financial
assets. The recoverable amount is determined
based on value in use. The determination
of recoverable amount involves significant
judgements such as market value, future projection
of revenue, EBITDA, weighted average cost of
capital and terminal growth.
The recoverable amount is significantly dependant
on achievement of revenue growth and any change
in revenue growth projection could have an impact
on recoverable value.
Based on the above, no impairment was identified
as of March 31,2025 as the recoverable amount is
higher than carrying value.
f. Recoverability assessment of Assets:
In assessing the recoverability of assets such
as intangible assets (including intangible assets
under development), investments, inventories,
trade receivables and other assets, based on
current indicators of future economic conditions
the Company expects to recover the carrying
amounts of its assets. The impact of the global
health pandemic, COVID 19, may be different from
that presently estimated and would be recognised
in the financial statements when material changes
to economic conditions arise.
3A. Standards issued but not yet effective:
Ministry of Corporate Affairs (“MCA”) notifies new
standard or amendments to the existing standards
under Companies (Indian Accounting Standards)
Rules as issued from time to time. On March 31, 2023,
MCA amended the Companies (Indian Accounting
Standards) Amendment Rules, 2023, applicable from
April 1, 2023, as below:
(i) Ind AS 8 - Definition of accounting estimates:
The amendments will help entities to distinguish
between accounting policies and accounting
estimates. The definition of a “change in
accounting estimates” has been replaced with
a definition of “accounting estimates.” Under
the new definition, accounting estimates are
“monetary amounts in financial statements that
are subject to measurement uncertainty.” Entities
develop accounting estimates if accounting
policies require items in financial statements to
be measured in a way that involves measurement
uncertainty. The Company does not expect this
amendment to have any significant impact in its
financial statements.
(ii) Ind AS 12 - Income Taxes The amendments
narrowed the scope of the recognition exemption
in paragraphs 15 and 24 of Ind AS 12. At the date
of transition to Ind ASs, a first-time adopter shall
recognize a deferred tax asset to the extent that
it is probable that taxable profit will be available
against which the deductible temporary difference
can be utilized. Similarly, a deferred tax liability for
all deductible and taxable temporary differences
associated with:
a) right-of-use assets and lease liabilities.
b) decommissioning, restoration and
similar liabilities and the corresponding
amounts recognized as part of the cost of
the related asset.
Therefore, if a Company has not yet recognised
deferred tax on right-of-use assets and lease
liabilities or has recognised deferred tax on net
basis, the same need to recognize on gross basis
based on the carrying amount of right-of-use
assets and lease liabilities. The Company does
not expect this amendment to have any significant
impact in its financial statements.
(iii) Ind AS 103 - Common control Business
Combination The amendments modify the
disclosure requirement for business combination
under common control in the first financial statement
following the business combination. It requires to
disclose the date on which the transferee obtains
control of the transferor. The Company does not
expect this amendment to have any significant
impact in its financial statements.
Footnotes to Loans:
1. a) During the year, the Company granted loan of' 33 Crore (Previous year '30 Crore) to Greaves Finance Limited (wholly
owned subsidiary) at an interest rate of 10% p.a. for its working capital requirements. This loan is repayable with interest
within 12-24 months or such extended period as may be agreed mutually. Further Greaves Finance Limited repaid an amount
of' 63 Crore (Previous year ' 30 Crore). (Amount outstanding Nil).
b) During the year, the Company granted loan of ' 6.40 Crore (previous year ' 1 Crore) to its wholly owned subsidiary Greaves
Technologies Limited for its working capital requirements at an interest rate of 10% p.a. Further Greaves Technologies
Limited repaid an amount of ' 1 Crore. (Amount outstanding ' 8.40 Crore). This Loan is repayable with interest within 12
months or such extended period as may be agreed mutually.
c) Maximum amount outstanding at any point of time during the year
- ' 38 Crore by Greaves Finance Limited
- ' 8.40 Crore by Greaves Technologies Limited
2. The Company has not advanced or lent or invested funds (either borrowed funds or share premium or any other sources or kind
of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded
in writing or otherwise) that the Intermediary shall directly or indirectly lend to or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries).
* Secured trade receivables are against letters of credit, factoring arrangements, bank guarantees and security deposits.
Footnotes:
a. Provision matrix
The Company has policy of expected credit loss provisioning. The Overdue debtors are critically reviewed and necessary
expected credit loss provisions are made.
b. Short Term non fund based limits are secured by hypothecation of all inventory, spares, tools and book debts, present and future,
of the Company, which includes Letters of credit and bank guarantees of ' 28.19 Crore (previous year ' 19.88 Crore) and
' 16.29 Crore (previous year ' 18.57 Crore) respectively.
c. The Company writes off a trade receivable when there is information indicating that the customer is in severe financial difficulty
and there is no realistic prospect of recovery, e.g. when the customerhas been placed underliquidation or has entered into bankruptcy
proceedings etc. None of the trade receivables that have been written off is subject to enforcement activities.
d. Also refer Note 31B
* % change during the year has been computed on the basis of the number of shares at the beginning of the year.
As per records of the Company, including its register of shareholders/members and other declarations received from shareholders
regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of equity shares.
There were no shares issued for consideration other than cash during the period of 5 years immediately preceding the reporting date.
14E Dividend
The amount that can be distributed as dividend by the Company to its equity shareholders is determined considering
the requirements of the Companies Act, 2013.
On April 30, 2025, the Board of Directors has proposed final dividend of ' 2 per share (previous year ' 2 per share)
on face value of ' 2 each (total dividend payout ' 46.6 Crore, (previous year ' 46.5 Crore)). The proposed dividend is
subject to approval of the shareholders in the ensuing Annual General Meeting.
2. Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of
the Companies Act, 2013.
3. The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. There is no
policy of regular transfer. As the general reserve is created by a transfer from one component of equity to another and is not an
item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to the Statement
of Profit and Loss.
*Refer Statement of changes in equity for movement during the year.
15A Employee Stock option Plan
I
A. During the earlier years, the Company introduced and implemented ‘Greaves Cotton- Employees Stock option Plan
2020’ (ESOP 2020), with following terms:
i. Create, grant, offer, issue and allot stock options at any time in one or more tranches as determined by the
Nomination and Remuneration Committee, based on employee’s grade, performance rating and such other
criteria as may be considered appropriate to or for the benefit of such person(s) who are in the permanent
employment of the Company, whether working in India or outside India, including Director of the Company,
whether Whole-time Director or not, and such other persons as may from time to time be allowed to be eligible,
but excluding Promoter, Promoter group and Independent Directors.
ii. Such number of stock options convertible into Equity Shares of the Company, in one or more tranches, not
exceeding 2.00% of the paid-up share capital of the Company of the face value of ' 2/- each (Rupees Two only)
to the eligible employees of the Company, at such price or prices, and on such terms and conditions as may
be fixed or determined by the Board.
iii. The options would vest after 1 year but not later than 8 years from the date of individual grant as decided by
the Nomination and Remuneration Committee.
iv. Exercise Price is the par value of the Share payable by the Eligible Employee for the Exercise of each Option
Granted under the Scheme for the allotment of one Share.
v. The Company will follow fair value method for computing the compensation cost, if any, for the Options Granted,
in accordance with the applicable Law.
B. The scheme was approved by the Shareholders on July 11,2020.
31 - RISK MANAGEMENT
The Company's activities expose it to a variety of financial risks: market risk, credit risk, and liquidity risk. The Company's
primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its
financial performance.
31A Capital risk management :
The Company's objective for capital management is to maximize shareholder wealth, safeguard business continuity and
support the growth of the Company. The Company determines the capital management requirement based on annual
operating plans and long term and other strategic investment plan.
31B Financial instruments :
The Material Accounting Policies in respect of each class of financial asset, financial liability and equity instrument
including criteria for their recognition, the basis of measurement are as disclosed in Note No. 6, 7, 8, 11, 12, 13, 16, 19
& 38 to the financial statements. These Notes also mention the basis on which the income & expenses are recognised.
*The Management considers carrying amount of financials assets and financial liabilities in the financial statements as
approximate fair values of respective financial assets and liabilities.
31C Financial and liquidity risk management objectives :
i) Liquidity risk is the risk that the Company may encounter difficulty in meeting its obligations. The Company monitors
the rolling forecast of its liquidity position based on expected cash flows. The Company's approach is to ensure
that it has sufficient liquidity or borrowing headroom to meet its obligations at all points in time. The Company has
sufficient short-term fund-based lines, which provide healthy liquidity and these carry the highest credit quality
rating from a reputed credit rating agency.
ii) The Company has a policy of investing surplus funds in fixed deposits with banks and in overnight debt mutual funds.
iii) The average payment terms of creditors (trade payables) is in the range of 60-180 days. In case of MSMED
creditors the payment terms are within 45 days. Other financial liabilities viz. employee payments, dealer deposits
are payable within one year.
iv) Trade receivables are secured against letters of credit, factoring arrangements, bank guarantees and security
deposits. At the end of the year, there is no significant concentration of credit risk for trade receivables as
only four parties have more than 5% of the total outstanding amount and one of them is fully secured against
factoring arrangement.
v) Of the total outstanding as at reporting date, 37.8% of the reported trade receivables are secured receivables.
In case of unsecured receivables, the Company has a credit policy where the provision for debts outstanding
is made based on provision matrix to compute the expected credit loss allowance taking into account historical
experience of collection from customers and the credit limits as determined by the management.
31D Foreign currency risk management :
Foreign currency risk is the risk that the fair value of future cash flows of exposure 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 foreign currency).
The use of foreign currency forward contracts is governed by the Company's Risk Management Policy. The Company
uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to
certain firm commitments and forecasted transactions for amounts in excess of natural hedge available on export
realisations against import payments. The Company does not use forward contracts for speculative purposes.
The Carrying amounts of the Company's foreign currency denominated unhedged monetary assets and liabilities at the
end of each reporting period are as follows.
31E Credit risk management :
The Company has credit management policy for its trade receivables. To minimise the risk, the Company takes letters
of credit, bank guarantees and security deposits from the customers based on the credit worthiness. Ongoing credit
evaluation is performed on the financial condition of trade receivables.
Trade receivables are secured against letters of credit, factoring arrangements, bank guarantees and security
deposits. At the end of the year, there is no significant concentration of credit risk for trade receivables as
only four parties have more than 5% of the total outstanding amount and one of them is fully secured against
factoring arrangement.
There is no single customer dependency. As at March 31 2025, the Company has top five unsecured customers that
owed to the Company ' 73.0 Crore which accounted for 26% of the total trade receivables. (As at March 31 2024, the
Company has top five unsecured customers that owed to the Company ' 36.7 Crore which accounted for 18% of the
total trade receivables).
*Contingent consideration relating to acquisition of Excel Controlinkage Private Limited is measured at its acquisition-date
fair value No gain or loss for the year relating to this contingent consideration has been recognized in profit or loss.
Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability
that are not based on observable market data (unobservable inputs).
There were no transfers between Level 1 and 2 during the current or prior year.
31G 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 two types of risks: Currency risk and interest rate risk. Financial instruments
affected by market risk include investments, trade payables, trade receivables and loans.
31H 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. Interest rate change does not affect significantly to the company. Company does not
have any exposure to the future cash flows resulting from change in interest rate as the Company's net obligations and
assets carries fixed interest rate.
32 - SEGMENT INFORMATION
In accordance with Ind AS 108 ‘Operating Segments', segment information has been given in the consolidated financial
statements of the Company and therefore, no separate disclosure on segment information is given in standalone
financial statements.
The Company has undertaken to provide financial support, on need basis to one subsidiary.
38 - LEASES
On adoption of Ind AS 116 : Leases, the Company recognised lease liabilities in relation to leases which had previously
been classified as ‘operating leases' under the principles of Ind AS 17 Leases. These liabilities are measured at the
present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate, presently
determined at 8.50% p.a.
On application of Ind AS 116, the nature of expenses has changed from lease rent to depreciation cost for the right-of-
use assets, and finance cost for interest accrued on lease liability.
41 - ADDITIONAL REGULATORY INFORMATION
i. The Company does not have any Benami property, where any proceeding has been initiated or pending against the
Group for holding any Benami property.
ii. The Company has Working Capital Limits sanctioned from banks on the basis of security of Stock and Book Debts.
The quarterly returns or statements of Stock and Book Debts filed by the Company with banks are in agreement with
the Unaudited books of accounts.
iii. The Company does not have any transactions with companies struck off u/s 248(5) of the Companies Act, 2013
except for the following entities:
*Receivables from above struck off companies are fully provided in books.
@ Represents amount less than ' 1 lakh
The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.
The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
vi. The Company has not received any funds from any person(s) or entity(ies), including foreign entities (Funding Party)
with the understanding (whether recorded in writing or otherwise) 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,
vii. The Company does not have any such transaction which is not recorded in the books of account that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such
as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
42 - The figures for the corresponding previous year have been regrouped, wherever necessary, to make them comparable
with the figures of the current year.
For and on behalf of the Board
Parag Satpute Raja Venkataraman
Managing Director & Group CEO Director
DIN : 06872200 DIN :00669376
Akhila Balachandar Atindra Basu
Chief Financial Officer Group General Counsel & Company Secretary
Mumbai, April 30, 2025
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