q. Provisions and contingent liabilities
The Company recognises a provision when there is a present obligation as a result of an obligating event that
probably requires outflow of resources and a reliable estimate can be made of the amount of 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. When a provision is measured using the cash flows
estimated to settle the present obligation, it's carrying amount is the present value of those cash flows (when the
effect of the time value of money is material). Insurance claims are accounted for on the basis of claims admitted/
expected to be admitted and to the extent that the amount recoverable can be measured reliably and realisation
in respect thereof is virtually certain.
A disclosure of a contingent liability is made when there is a possible obligation or a present obligation that may,
but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation
and the likelihood of outflow of resources is remote, no provision or disclosure of contingent liability is made.
Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.
r. Leases
The Company assesses whether a contract is or contains a lease, at the inception of a contract. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a time in exchange
for a consideration.
i. Company as a lessee
The Company recognises a right-of-use asset and corresponding lease liability at the lease commencement
date with respect to all lease arrangements in which it is a lessee, except for short- term leases (defined as
leases with a lease term of 12 months or less) and leases of low-value assets. For these leases, the Company
recognises the lease payments as an operating expense on a straight-line basis over the term of the lease
unless another systematic basis is more representative of the time pattern in which economic benefits from
the leased assets are consumed.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities
include the net present value of fixed payments (including in-substance fixed payments).
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability
adjusted for any lease payments made at or before the commencement date, plus any initial direct costs
incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying
asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement
date over the lease term and evaluated for any impairment losses and adjusted for any remeasurement of
the lease liability. The Company applies Ind AS 36 to determine whether a right-of-use asset is impaired
and accounts for any identified impairment loss as described in the policy for 'Impairment of tangible and
intangible assets'.
Whenever the Company incurs an obligation for costs to dismantle and remove leased assets, restore
the site on which it is located or restore the underlying asset to the condition required by the terms and
conditions of the lease, a provision is recognised and measured under Ind AS 37. To the extent those costs
relate to a right- of-use asset, the costs are included in the right-of-use asset, unless the costs are incurred
to produce inventories.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the Company's incremental borrowing rate. It is re-measured when
there is a change in future lease payments arising from a change in an index or rate, if there is a change in
the Company's estimate of the amount expected to be payable under a residual value guarantee, or if the
Company changes its assessment of whether it will exercise a purchase, extension or termination option.
When the lease liability is re-measured in this way, a corresponding adjustment is made to the carrying
amount of the right-of-use asset or is recorded in the statement of profit or loss if the carrying amount of
the right-of-use asset has been reduced to zero.
In determining the lease term, management considers all facts and circumstances that create an economic
incentive to exercise an extension option, or not exercise a termination option. Extension options (or
periods after termination options) are only included in the lease term if the lease is reasonably certain to be
extended (or not terminated).
For leases terms, the following factors are normally the most relevant:
- If there are significant penalties to terminate (or not extend), the Company is typically reasonably
certain to extend (or not terminate)
- If any leasehold improvements are expected to have a significant remaining value, the Company is
typically reasonably certain to extend (or not terminate)
- Otherwise, the Company considers other factors including historical lease durations and the costs
and business disruption required to replace the leased asset.
The lease term is reassessed if an option is actually exercised (or not exercised) or the Company becomes
obliged to exercise (or not exercise) it. The assessment of reasonable certainty is only revised if a significant
event or a significant change in circumstances occurs, which affects this assessment, and that is within the
control of the lessee.
Variable lease payments that do not depend on an index or rate are not included in the measurement of
the lease liability and right-of-use asset. The related payments are recognised as an expense in the period
in which the event or condition that triggers those payments occurs and are presented in the line 'Other
Expenses' in the statement of profit or loss.
The right-of-use assets and lease liabilities are presented as a separate line item in the balance sheet.
ii. Company as a lessor
Leases in which the Company does not transfer substantially all the risks and rewards of ownership of the
assets to the lessee are classified as operating leases.
Lease receipts under operating leases are recognised as an income, on a straight-line basis in the statement
of profit and loss over the lease term except where the lease payments are structured to increase in line with
expected general inflation.
The Company does not have any finance lease arrangements.
s. Operating segments
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision-maker (CODM). The CODM, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the divisional Chief Executive Officers.
Segments are organised based on business which have similar economic characteristics as well as exhibit
similarities in nature of products and services offered, the nature of production processes, the type and class of
customer and distribution methods.
Segment revenue arising from third party customers is reported on the same basis as revenue in the standalone
financial statements. Inter-segment revenue is reported on the basis of transactions which are primarily market
led. Segment results represent profits before finance charges, unallocated expenses and taxes.
"Unallocated expenses" represents revenue and expenses attributable to the Company as a whole and are not
attributable to segments.
t. 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. Financial assets and financial liabilities are recognised when the Company
becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are
initially measured at fair value except for trade receivables that do not have a significant financing component
which are measured at transaction price.
Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities
(other than financial assets and financial liabilities at fair value through profit and loss) are added to or deducted
from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction
costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit
and loss are recognised immediately in the statement of profit and loss.
Financial assets and liabilities are offset and the net amount is included in the 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 asset and settle the liability simultaneously.
u. Financial assets
All regular way purchases or sales of financial assets 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 marketplace.
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.
Classification
Management determines the classification of an asset at initial recognition depending on the purpose for which
the assets were acquired. The subsequent measurement of financial assets depends on such classification.
Financial assets are classified as those measured at:
(a) Amortised cost, where the financial assets are held solely for collection of contractual cash flows and the
contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
(b) Fair value through other comprehensive income, where the financial assets are held not only for collection of
cash flows arising from payments of principal and interest but also from the sale of such assets. Such assets are
subsequently measured at fair value, with unrealised gains and losses arising from changes in the fair value
being recognised in other comprehensive income.
(c) Fair value through profit and loss, where the assets are managed in accordance with an approved investment
strategy that triggers purchase and sale decisions based on the fair value of such assets. Such assets are
subsequently measured at fair value, with unrealised gains and losses arising from changes in the fair value
being recognised in the statement of profit and loss in the period in which they arise.
Trade receivables, cash and cash equivalents, other bank balances, loans and other financial assets are classified
for measurement at amortised cost. Derivative instruments are measured at fair value through profit and loss
while investments may fall under any of the aforesaid classes. However, in respect of particular investments in
equity instruments that would otherwise be measured at fair value through profit and loss, an irrevocable election
at initial recognition may be made to present subsequent changes in fair value through other comprehensive
income.
Financial assets at amortised cost are subsequently measured at amortised cost using effective interest method.
The effective interest method is a method of calculating the amortised cost of an instrument and of allocating
interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated
future cash receipts (including all fees and points paid or received that form an integral part of the effective
interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument,
or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
Trade Receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course
of business and reflects the Company's unconditional right to consideration (i.e., payment is due only on
the passage of time). Trade receivables are recognised initially at the transaction price as they do not contain
significant financing components. The Company holds the trade receivables with the objective of collecting the
contractual cash flows and therefore measures it subsequently net of loss allowances.
Cash and Cash Equivalents
For the purpose of presentation in the Statement of Cash Flows, cash and cash equivalents includes cash on
hand, deposits held at call with financial institutions, other short term, highly liquid investments with original
maturities of three months or less that are readily convertible to known amounts of cash and which are subject
to an in significant risk of changes in value.
Recognition
Financial assets include investments, trade receivables, derivative instruments, cash and cash equivalents, other
bank balances, loans and other financial assets. Such assets are initially recognised at transaction price when the
Company becomes party to contractual obligations. The transaction price includes transaction costs unless the
asset is being fair valued through the statement of profit and loss.
Impairment
At each reporting date a financial asset such as investment, trade receivable, loans and other financial assets held
at amortised cost and financial assets that are measured at fair value through other comprehensive income are
tested for impairment based on evidence or information that is available without undue cost or effort. Expected
credit loss is assessed and loss allowance is recognised if the credit quality of that financial asset has deteriorated
significantly since initial recognition.
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of
the assets. For debt securities at fair value through other comprehensive income, the loss allowance is recognised
in other comprehensive income and is not reduced from the carrying amount of the financial asset in the balance
sheet.
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no
realistic prospect of recovery. This is generally the case when the Company determines that the trade receivable
does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject
to the write-off. However, financial assets that are written off could still be subject to enforcement activities
under the Company's recovery procedures, taking into account legal advice where appropriate. Any recoveries
made are recognised in statement of profit and loss.
Reclassification
When and only when the business model is changed the Company shall reclassify all affected financial assets
prospectively from the reclassification date as subsequently measured at amortised cost, fair value through other
comprehensive income, fair value through profit and loss without restating the previously recognised gains,
losses or interest and in terms of the reclassification principles laid down in the Ind AS relating to financial
instruments.
De-recognition
Financial assets are derecognised when the right to receive cash flows from the assets has expired, or has
been transferred, and the Company has transferred substantially all of the risks and rewards of ownership.
Consequently, if the asset is one that is measured at:
(a) Amortised cost, the gain or loss is recognised in the statement of profit and loss.
(b) Fair value through other comprehensive income, the cumulative fair value adjustments previously taken to
reserves are reclassified to the statement of profit and loss unless the asset represents an equity investment
in which case the cumulative fair value adjustments previously taken to reserves is reclassified within
equity.
v. Financial liabilities and equity instruments
Classification:
Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in
accordance with the substance of the contractual arrangements and the definitions of a financial liability and an
equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting
all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received.
Financial liabilities
Borrowings, trade payables and other financial liabilities are initially recognised at the value of the respective
contractual obligations. They are subsequently measured at amortised cost. Any discount or premium on
redemption / settlement is recognised in the statement of profit and loss as finance cost over the life of the
liability using the effective interest method and adjusted to the liability figure disclosed in the balance sheet.
Financial liabilities are derecognised when the liability is extinguished, i.e., when the contractual obligation is
discharged, cancelled and on expiry.
Trade Payables and Other Financial Liabilities
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial
year which are unpaid. The amounts are unsecured and are usually paid within 30-60 days of recognition. Trade
and other payables are presented as current liabilities unless payment is not due within 12 months after the
reporting period. Other financial liabilities are recognised when the Company becomes a party to the contractual
provisions of the instrument. Other financial liabilities are initially measured at the amortised cost unless at initial
recognition, they are classified as fair value through profit or loss. Other financial liabilities are subsequently
measured at amortised cost using the effective interest rate method. A financial liability is derecognised when
the obligation specified in the contract is discharged, cancelled or expired.
De-recognition
The Company de-recognises financial liabilities when, and only when, the Company's obligations are discharged,
cancelled or they expire.
w. Earning per share
Basic earnings per share are calculated by dividing the profit and loss for the year attributable to shareholders
by the weighted average number of shares outstanding during the year. For the purpose of calculating diluted
earnings per share, the profit and loss for the year attributable to shareholders and weighted average number of
shares outstanding during the year is adjusted for the effects of all dilutive potential shares.
x. Goodwill
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the
business less accumulated impairment losses, if any.
Goodwill is not amortised but is reviewed for impairment at least annually. For the purposes of impairment
testing, goodwill is allocated to each of the Company's cash-generating units (or groups of cash-generating
units) that is expected to benefit from the synergies of the combination. A cash-generating unit to which goodwill
has been allocated is tested for impairment annually, or more frequently when there is an indication that the
unit may be impaired. If the recoverable amount of the cash-generating unit is less than it's carrying amount, the
impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to
the other assets of the unit pro-rata based on the carrying amount of each asset in the unit. Any impairment loss
for goodwill is recognised directly in the statement of profit or loss. An impairment loss recognised for goodwill
is not reversed in subsequent periods. On disposal of the relevant cash-generating unit, the attributable amount
of goodwill is included in the determination of the profit or loss on disposal.
2. USE OF ESTIMATES AND JUDGEMENTS
The preparation of standalone financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent liabilities at the date of the standalone financial statements and the results of operations
during the reporting period end. Although these estimates are based upon management's best knowledge of current
events and actions, actual results could differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the
revision and future periods if the revision affects both current and future periods.
In particular, information about the significant areas of estimation, uncertainty and critical judgements in applying
accounting policies that have the most significant effect on the amounts recognised in the standalone financial
statements are related to:
(i) Useful life of property, plant and equipment and intangible assets
(ii) Provision for product warranties
(iii) Provision for employee benefits
(iv) Provisions and contingent liabilities
(v) Impairment of investments
(vi) Leases
(vii) Inventory valuation
(viii) Impairment of Goodwill
Useful life of property, plant and equipment and intangible assets - (refer note 1B(e), note 1B(g), note 3A and note
3B):
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. The Company is required to determine
whether its intangible assets have indefinite or finite life which is a subject matter of judgement.
Provision for product warranties - (refer note 1B(p) and note 18):
Provision is estimated in respect of warranty cost in the year of sale of goods and it represents the present value of
the management's best estimate of the future outflow of economic benefit that will be required under the Company's
obligation for warranties. It is estimated by the management on the basis of a technical evaluation and based on
specific warranties, claims and claim history.
The determination of provision for product warranties takes into account assumptions which is a subject matter of
judgement. This reassessment may result in change in depreciation and amortisation expense in future periods.
Provision for employee benefits (refer note 1B(m) and note 32):
The determination of Company's liability towards defined benefit obligation and other long-term employee benefits
to employees is made through independent actuarial valuation including determination of amounts to be recognised
in the statement of profit and loss and in other comprehensive income. Such valuation depends upon assumptions
determined after taking into account inflation, seniority, promotion and other relevant factors such as supply and
demand factors in the employment market. Information about such valuation is provided in notes to accounts.
Provisions and contingent liabilities (refer note 1B(q) and note 36):
Legal proceedings covering some of the matters are pending against the Company. Due to the uncertainty inherent
in such matters, it is often difficult to predict the final outcome. Where an outflow of funds is believed to be probable
and a reliable estimate of the outcome of the dispute can be made based on management's assessment of specific
circumstances of each dispute and relevant external advice, management provides for its best estimate of the
liability. Such accruals are by nature complex and can take number of years to resolve and can involve estimation
uncertainty.
Impairment of Investment (refer note 1B(k) and note 5):
The Company estimates the recoverable value of its investments based on future cash flows after considering current
economic trends, estimated future operating results and growth rates. The estimated cash flows are developed using
internal forecasts with key assumptions. The cash flow forecasts are discounted using a suitable discount rate in order
to calculate the present value.
Lease liabilities and Right of use assets - (refer note 1B(r) and note 34:
The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116 "Leases".
Identification of a lease requires significant judgement in assessing the lease term including anticipated renewals and
the applicable discount rate. The lease payments are discounted using the interest rate implicit in the lease, if that rate
can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate.
Inventory Valuation- (refer note 1B(l) and note 10):
The allocation of fixed production overheads is based on the normal capacity of the production facilities. The actual
capacity of production may be used if it approximates normal capacity. Unallocated overheads are recognized as
an expense in the period in which they are incurred. Variable production overheads are allocated to each unit of
production on the basis of the actual use of the production facilities.
Impairment of Goodwill
Determing whether goodwill is impaired requires an estimation of the value is use of the cash generating usits of
which goodwill has been allocated. The value is use calculation requires the Company to estimate the future cashflows
expected to arise trom the cash-generating unit and a suitable discount rate in order to calculate present value which
is a subject matter of judgement.
The Company obtains independent valuations for its investment properties annually. The evidences for fair value is
current prices in an active market for similar properties. Alternatively the Company considers information from a variety
of sources including current prices in an active market for properties of different nature or recent prices of similar
properties in less active market adjusted to reflect those differences.
The fair values of investment properties have been determined by Nag Chowdhury Associates who is a registered
valuer as defined under Rule 2 of Companies (Registered Valuer and Valuation) Rules, 2017. A valuation model (market
approach) has been adopted and all resulting fair value estimates for investment properties are included in level 3
category. There has been no change in the valuation technique as compared to 31 March 2024.
(iv) The Company has no restrictions on the realisability of its investment properties and no contractual obligations to either
purchase, construct or develop investment properties or for repairs, maintenance and enhancements.
(v) All the title deeds of the investment properties are held in the name of the Company.
Rights, preferences and restrictions attached to equity shares
The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and
share in the Company's residual assets. The equity shares are entitled to receive dividend as declared from time to time. The
voting rights of an equity shareholder on a poll (not on show of hands) are in proportion to its share of the paid-up equity
capital of the Company.
Voting rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been
paid.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the residual assets of the
Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.
factory lands with buildings/ structures/ sheds constructed thereupon and located at Mouza: Bamunari, Pargana: Boro,
P.D.: Dankuni, District: Hooghly, PIN-712250, West Bengal as collateral security until full repayment & settlement of
the principal amount of loan(s)/ credit facility(ies) together with commission, interests, costs & other dues thereof.
The said loan is being paid in equal quarterly installments of Rs. 0.52 crores and with a final installment payment of Rs.
0.53 crores, the same would be discharged by October 2028. The interest rate is 7.25% p.a.
(b) For sanction of term loans amounting to Rs. 50.00 crores (including Capex Letter of Credit amounting to Rs. 15 crores
as its sub-limit) by ICICI Bank Ltd. (Balance as at 31 March 2025 is Rs. 14.00 crores and balance as at 31 March 2024
is Rs. 22.00 crores), following securities have been created:
- Exclusive charge over the movable properties including movable plant and machinery, machinery spares, tools and
accessories and other movables, both present and future, whether installed or not and whether now lying loose or
in cases or which are now lying or stored in or about or shall hereafter from time to time during the continuance of
the security of these presents be brought into or upon or be stored or be in or about all the Company's engineering
stamping business's factories, premises and godowns or wherever else the same may be or be held by any party to the
order or disposition of the Company or in the course of transit or in high seas or on order, or delivery, howsoever and
wheresoever in the possession of the Company and either by way of substitution or addition in such manner that the
security cover of 1.25 times is maintained. The said borrowings of Stamping Division is being repaid in 20 quarterly
installments of Rs. 1.75 crores starting from 19 May 2022. The same would be discharged by February 2027. The rate of
interest is sum of I-MCLR-6M and Spread per annum, subject to a minimum Of I-MCLR-6M.
(c) For sanction of credit facilities amounting to Rs. 60.00 crores and Rs. 10.00 crores by DBS Bank India Ltd. (Balance
as at 31 March 2025 is Nil and balance as at 31 March 2024 is Rs. 3.10 crores), following securities have been created:
- Hypothecation by way of first and exclusive floating charge over all present and future movables plant and machinery,
equipment, appliances, furniture, vehicles, machinery, spares and stores, tools and accessories and other moveables
whether or not installed and whether lying loose or in cases or which are now lying or stored in or about and may
hereafter from time to time during the currency of this deed be brought into or upon or be stored in or about all the
Company's factories, premises, warehouses and godowns or wherever else the same may be or be held by any party to
the order or disposition of the Company or in the courses of transit or on high seas or on order, or delivery, howsoever
and wheresoever in the possession of the Company and either by way of substitution or addition (all pertaining to
Company's units located at Kolkata and Bangalore) stored or to be stored at the Company's Godowns or premises or
wherever else the same may be except asset charged specifically for debt availed, if any for purchase of conventional
press line subject to NOC being sought from DBS. This Term Loan repaid during the year.
(d) For sanction of external commercial borrowings amounting to USD 2.00 crores by Standard Chartered Bank,
London, (Amount as at 31 March 2025: Nil and amount as at 31 March 2024: USD 0.37 crores) following securities
have been created:
- Hypothecation by way of first and exclusive charge over all present and future moveable properties of the Company's
manufacturing unit of air conditioners in Goa and on the existing plant and machinery of washing machine division
at Goa (Verna) plant (except exclusive charge to term lenders), including without limitations its moveable plant and
machinery, furniture and fittings, equipments, computers, hardware, computer software, machinery spares, tools and
accessories and other movables, both whether now lying loose or in cases or which are now lying or stored in or
about or shall hereafter from time to time during the continuance of the security of these presents be brought into or
upon or be stored or be in or about all the Company's premises, warehouses, stockyards and godowns or those of the
Company's agents, affiliates, associates or representatives or at various worksites or at any upcountry place or places
wherever else the same maybe or be held by any party including, without limitation, the following plot no. N-7, Phase
IV, Survey No. 261/10, Verna Industrial Estate, Verna, Goa - 403722. This external commercial borrowings has been
repaid during the year.
a. Provision is estimated in respect ot warranty cost in the year of sale of goods and it represents the present value ot
the management's best estimate ot the future outflow ot economic benefit that will be required under the Company's
obligation tor warranties. It also includes provision in respect ot warranty and installation cost in the year ot sale ot
goods by an associate tor which the Company has earned revenue tor providing services. The revenue earned by the
Company tor the same is included under 'Sale ot services' in Note 21.
b. Provision tor warranty is expected to be utilised over a period ot 1 to 5 years.
c. The estimates may vary as a result ot product quality, availability ot spare parts, price ot raw materials, altered
manutacturing processes and discount rates.
d. Warranty costs are estimated by the management on the basis ot a technical evaluation and based on specific warranties,
claims and claim history.
(i) There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory
period.
(ii) The borrowing obtained from banks have been applied for the purpose for which such loans were taken.
(iii) Charge and hypothecation details are as follows:
(A) For sanction of working capital facilities amounting to Rs 100 crores by Standard Chartered Bank (Balance as
at 31 March 2025 - Rs. 35.84 crores and 31 March 2024 Nil) following securities have been created
First pari passu charge on the entire current assets of the Company, both present and future. The rate of interest is
Marginal Cost of Funds Lending Rate and Mumbai Interbank Offered Rate for a designated maturity of 1 month
and 3 months, as published by Financial Benchmarks of India Limited.
(B) For sanction of working credit facilities amounting to Rs. 60.00 crores by Kotak Mahindra Bank Ltd (Amount
as at 31 March 2025 - Rs. 40.00 crores and 31 March 2024 Nil), following securities have been created:
- First Pari Passu hypothecation charge on all existing and future current assets of the Company including:
(a) book-debts, receivables, outstanding moneys, claims, demands, bills, contracts, engagements and
securities belonging to or held by the Company and which are now due and owing or accruing and
which may at any time hereafter during the continuance of the security become due and owing or accrue
to the Company.
(b) stocks of raw materials, finished and semi-finished goods, goods in process and consumable stores,
which are now lying or stored in or which may hereafter from time to time during the continuance of the
security be lying or stored in or brought into or be in or about the factories and godowns of the Company
or warehouses, wherever situated; and
(c) related moveables in the course of transit or delivery, whether now belonging or which may hereafter
belong to the Company or which may be held by the person at any place within or outside India to
the order or disposition of the Company and all documents of title including bills of lading, shipping
documents, policies of Insurance and other instruments and documents relating to such moveables
together with benefits of all rights thereto.
- Second pari passu charge on the moveable fixed assets (except those charge to term lenders) if provided
to other working capital bankers.
The rate of interest is Marginal Cost of Funds Lending Rate for a designated period.
(C) Hypothecation details of working capital demand loan by Federal Bank Limited (Amount as at 31 March 2025:
Nil and amount as at 31 March 2024 : Rs. 1.50 crores):
Working capital facilities sanctioned by The Federal Bank Limited is Rs.38.00 crores Out of the sanctioned limit
Rs. 32.00 crores can be used inter-changeably between fund based and non-fund based. Following securities has
32. (i) Defined benefit plan - Gratuity
The Company operates a defined benefit plan for gratuity for its employees.The Company provides for gratuity for its
employees in India who are in continuous service for a period of 5 years or more. It is administered through approved trust in
accordance with its trust deeds and rules. The concerned trust is managed by trustees who provide guidance with regard to
the management of their assets and liabilities and review their performance periodically. Risk mitigation systems are in place
to ensure that the health of the portfolio is regularly reviewed, investments do not pose any significant risk of impairment
and to ensure the adequacy of internal controls.
The Company accounts for the liability for the gratuity benefits payable in the future years based on year end actuarial
valuations.The actuary uses the projected unit credit method.
Risk management
The risks commonly affecting the gratuity liability are expected to be:
1. Interest rate risk - The defined benefit obligation calculated uses a discount rate based on government bonds. If bond
yield falls, the defined benefit obligations will tend to increase.
2. Salary i nflation risk - The present value of the defined benefit obligation is calculated by reference to the salaries of plan
participants. Higher the expected increase in salary, higher the defined benefit obligation.
3. Demographic risk - This is the risk of variability of outcome due to unsystematic nature of decrements that include
mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation
is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It
is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career
employee typically costs less per year as compared to a long service employee.
NOTES :
- The Company is primarily engaged in business of home appliances, engineering (fine blanked components and stamping),
motor and steel. Accordingly the Company considers the above business segment as the primary segment. Segment
revenue, segment results, segment assets and segment liabilities include the respective amount identifiable to each of the
segments as also amounts allocated on reasonable basis. The expenses, which are not directly relatable to the business
segment, are shown as unallocable cost and grouped as "Unallocated". Assets and liabilities that cannot be allocated
between the segments are shown as unallocable assets and liabilities and are grouped as "Unallocated". These segments
have been reported in the manner consistent with the internal reporting to divisional Chief executive officer's, who are the
chief operating decision makers.
- The geographical information considered for disclosure are revenue within India and revenue outside India.
- The Company is not reliant on revenues from transactions with any single external customer and does not receive 10% or
more of its revenues from transactions with any single external customer.
* Investments exclude investment in a subsidiary amounting to Rs. 21.60 crores (31 March 2024: Rs. 21.60 crores) and in an
associate amounting to Rs. 97.00 crores (31 March 2024: Rs. 97.00 crores) which are shown at cost in the standalone financial
statements as per Ind AS 27 - 'Separate Financial Statements'.
(iii) Financial risk management objectives
The Company has a system-based approach to risk management, anchored to policies and procedures and internal
financial controls aimed at ensuring early identification, evaluation and management of key financial risks (such as market
risk, credit risk and liquidity risk) that may arise as a consequence of its business operations as well as its investing and
financing activities. Accordingly, the Company's risk management framework has the objective of ensuring that such risks
are managed within acceptable and approved risk parameters in a disciplined and consistent manner and in compliance
with applicable regulation. It also seeks to drive accountability in this regard.
a) Liquidity risks
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquid risk
management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.
The Company has obtained fund and non-fund based working capital lines from banks. Furthermore, the Company
has sufficient quantities of finished goods and stock-in-trade which are liquid and readily saleable. Hence the risk
that the Company may not be able to settle its financial liabilities as they become due does not exist.
b) Market risks
The Company does not trade in equities. Treasury activities, focused on managing investments in debt and equity
instruments, are decentralised but administered under a set of approved policies and procedures guided by the
tenets of liquidity, safety and returns. This ensures that investments are only made within the acceptable risk
parameters after due evaluation
The Company's investments are predominantly held in debt mutual funds. Such investments are susceptible
to market risks that arise mainly from changes in interest rate which may impact the return and value of such
investments. Mark to market movements in respect of these investments are measured at fair value through profit
or loss.
Fixed deposits are held with highly rated banks and generally have a short tenure and are not subject to interest rate
volatility.
The Company has short-term borrowings which are generally not susceptible to interest rate volatility since they
are for short tenure. Long term loans from banks are at highly competitive rates. Hence interest rate fluctuations on
borrowings does not affect the Company significantly.
c) Foreign currency risk
The Company undertakes transactions denominated in foreign currency (mainly US Dollar, GBP, SGD, Euro, RMB,
JPY and AED) which are subject to the risk of exchange rate fluctuations.
iii) Foreign currency sensitivity
For every percentage point change in the underlying exchange rate of the outstanding foreign currency
denominated assets and liabilities, holding all other variables constant, the profit before tax would change by
Rs. 2.74 crores for the year ended 31 March 2025 (31 March 2024: Rs 2.25 crores).
d) Credit risk
Credit risk arise from the possibility that the counter party may not be able to settle their obligations. Financial
instruments that are subject to such risk primarily consists of investments, trade receivables, bank deposits, loans,
derivative instruments and other financial assets.
Bank deposits are primarily held with highly rated and different banks.
The Company's customer base is large and diverse limiting the risk arising out of credit concentration. Further the
credit is extended in business interest in accordance with guidelines issued centrally and business-specific credit
policies that are consistent with such guidelines. Exceptions are managed and approved by appropriate authorities
after due consideration of the counter parties credentials and financial capacity, trade practices and prevailing
business and economic conditions.
In respect of financial guarantee provided by the Company to banks/financial institutions, the maximum exposure
which the Company is exposed to is the maximum amount which the Company would have to pay if the guarantee
is called upon. Based on the expectation at the end of the reporting period, the Company considers that it is more
likely than not that such an amount will not be payable under the guarantees provided.
The Company's historical experience of collecting receivables and the level of default indicates that the credit risk
is low and generally uniform across markets. Loss allowances are recognised where considered appropriate by the
management.
e) 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 the market interest rates. The Company's exposure to the risk of changes in market interest rate
relates primarily to the companies debt obligations with floating interest rates. The risk estimates provided assume
a parallel shift of 50 basis points interest rate across all yield curves. This calculation also assumes that the change
occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date. The
year end balances are not necessarily representative of the average debt outstanding during the period.
For every 50 basis point interest rate change, holding all other variables constant, the profit before tax would change
by Rs. 0.49 crores for the year ended 31 March 2025 (31 March 2024: Rs. 0.34 crores).
f) Commodity-price risk
Exposure to market risk with respect to commodity prices primarily arises from the Company's purchase of imported
raw materials for production of finished goods. Cost of raw materials forms the largest portion of the Company's
cost of sales. Market forces generally determine prices for such raw materials purchased by the Company. These
prices may be influenced by factors such as supply and demand, production costs and global and regional economic
conditions and growth. Adverse changes in any of these factors may impact the results of the Company. Commodity
price risk exposure is evaluated and managed through operating procedures and sourcing policies.
AA For investment in equity shares (other than subsidiary and associate), the fair value has been determined using the
discounted cash flow method. The significant unobservable inputs used are earning growth rate and risk adjusted
discount rates. For movement in such investment refer note 22 (v).
All the other financial assets and liabilities that are measured at amortised costs are classified as level 3 fair values in the
fair value hierarchy due to the inclusion of unobservable inputs including counter-party credit risk.
Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent
limitations in any estimation techniques. Therefore for substantially all financial instruments, the fair value estimates
presented above not necessarily indicative of the amounts that the company could have realised or paid in sale transactions
as of respective dates. The Company's policy is to recognise transfers into and out of fair value heirarchy levels as at the
end of the reporting period. There are no transfers between level 1 and 2 during the current and previous year.
Goodwill as stated above is carried at cost and annually tested for impairment in line with applicable Indian Accounting
Standards. The recoverable value of such goodwill has been assessed at value in use using cash flow forecasts based on current
economic trends, estimated future operating results and growth rates. The cash flow forecasts cover a period of five years and
future projections taking the analysis out to perpetuity. The Company has used certain key-assumptions including volume
growth, earnings before interest, tax and depreciation, post-tax discount rate of 19.9% (31 March 2024: 15%) and long-term
growth rate of 3% (31 March 2024: 3%). The outcome of the impairment assessment as on 31 March 2025 for recoverable value
of goodwill has not resulted in any impairment. The management has conducted sensitivity analysis including sensitivity in
respect of discount rates, on the impairment assessment of the recoverable value of goodwill. The Management believes that
no reasonably possible change in any of the key assumptions used in the model would cause the carrying value of goodwill to
materially exceed its recoverable value.
41. The Company has disaggregated revenues from contract with customers for the year by the type of goods and services. The
Company believes that this disaggregation best depicts how the nature, amount, timing and uncertainty of revenues and cash
flows are affected by industry, market and other economic factors. Refer notes 21 and 33 for revenue disaggregation.
The following table includes revenue expected to be recognised in the future related to annual maintenance contracts and
extended warranty services and advance from customers.
As on 31st March 2024, trade payables includes Rs. 15.63 crores for liabilities under supplier financing. The weighted average of
which have extended the settlement of such original payable to 87 days after physical supply and are due for settlement within
47 days after the year end.
The Company has entered into supplier financing arrangement to ensure easy access of credit to its supplier. The
arrangement is mostly operating in nature as the financing element in the transaction is insignificant and the time
frame in the financing arrangement is mostly consistent with the supplier terms available to the Company. The amount
payable w.r.t. such supplier financing is classified as trade payables.
44. As per the E-Waste (Management) Rules, 2022, as amended, companies dealing in certain categories of products as
specified in Schedule-I therein are required to undertake Extended Producer Responsibility (EPR) for its end-of-life
products. The obligation for a financial year is measured based on sales made in the preceding 9th/10th year and
the Company has met its obligations for the current year. In accordance with Appendix B of Ind AS 37, 'Provisions,
Contingent Liabilities and Contingent Assets', the Company will have an e-waste obligation for future years, only if it
participates in the market in those years.
45. No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami
Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
48. The Company has complied with the number of layers prescribed under the Companies Act, 2013, read with the Companies
(Restriction on number of layers) Rules, 2017.
49. The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both
during the current or previous year.
50. The Company has not entered into any scheme of arrangement which has an accounting impact in current or previous financial
year.
51. (a) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources
or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"),
with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(b) No funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding
Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
52. The Company is not a Core Investment Company ("CIC") as defined in the regulations made by the Reserve Bank of India.
Further, there are no CICs in the Group (as defined in the Core Investment Companies (Reserve Bank) Directions, 2016) of
which the Company is a part.
53. The Company has filed quarterly returns or statements with the banks for its sanctioned working capital facilities, which are in
agreement with the books of accounts other than those as set out below:
The Company has filed the revised quarterly returns/statements with such banks for above instances, subsequent to the year
ended 31 March 2025, which are in agreement with the books of account. Also for Kotak Mahindra Bank Limited the Company
has filed quaterly returns / statements for the quarters ended 30 September 2024 and 31 December 2024 subsequent to the
year ended 31 March 2025. The Company is yet to submit the returns for the quarter ended 31 March 2025. The quarterly
returns / statements for the year ended 31 March 2024 are materially in agreement with the books of account and there was no
discrepancies that were identified.
54. Audit Trail:
The Ministry of Corporate Affairs (MCA) has made it mandatory for every company, which uses accounting software for
maintaining its books of account, to use only such accounting software which has a feature of recording audit trail of each and
every transaction, creating an edit log of each change made in books of account along with the date when such changes were
made and ensuring that the audit trail cannot be disabled.
The Company uses SAP software to maintain its books of accounts. Implementation of the above notification to ensure enabling
appropriate audit log on financial tables in aforesaid software, which have high frequency database operations would lead to a
severe system performance degradation thereby adversely impacting business operations and users.
In this regard, the Company has designed and implemented adequate review process over direct change at database level.
55. Previous year's numbers have been regrouped / rearranged, where considered appropriate.
56. There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the
Income Tax Act, 1961, that has not been recorded in the books of account.
57. The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.
Signatures to notes 1 to 57
For Price Waterhouse & Co Chartered Accountants LLP For and on behalf of the Board of Directors of IFB Industries Limited
Firm Registration Number: 304026E / E - 300009 Chairman Bikramjit Nag, DIN: 00827155
Executive Director and Service Business Head, HAD Amar Singh Negi, DIN: 08941850
Pinaki Chowdhury Managing Director, Engineering Division P H Narayanan, DIN: 10158148
Partner Chief Financial Officer Soumitra Goswami
Membership Number: 057572 Company Secretary Ritesh Agarwal, M. No: ACS 17266
Kolkata, 28 May 2025 Kolkata , 28 May 2025
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