p) Provisions (Other than employee benefits)General Provisions
Provisions are recognized when the Company has a
present obligation (legal or constructive) as a result of
a past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of the
amount of the obligation. Expected future operating losses
are not provided for.
Where the Company expects some or all of the expenditure
required to settle a provision will be reimbursed by
another party, the reimbursement is recognised when,
and only when, it is virtually certain that reimbursement
will be received if the entity settles the obligation. The
reimbursement is treated as a separate asset.
Provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and the
risks specific to the liability. The unwinding of the discount
is recognized as finance cost.
Warranty provisions
Provision for warranty related costs are recognized when
the product is sold or service provided and is based on
historical experience. The provision is based on technical
evaluation/ historical warranty data and after weighting
of all possible outcomes by their associated probabilities.
The estimate of such warranty related costs is revised
annually. Where the effect of the time value of money is
material, the amount of a provision is the present value
of the expenditure expected to be required to settle the
obligation.
Contingent liability
A contingent liability is a possible obligation that arises
from past events whose existence will be confirmed by the
occurrence or non-occurrence of one or more uncertain
future events beyond 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. A contingent liability also arises in
extremely rare cases where there is a liability that cannot
be recognized because it cannot be measured reliably.
Contingent asset
Contingent asset is not recognised in the financial
statements since this may result in the recognition of
income that may never be realised. However, when the
realisation of income is virtually certain, then the related
asset is not a contingent asset and is recognized.
Provisions, contingent liabilities and contingent assets are
reviewed at each Balance Sheet date.
q) Employee benefits
i. Short-term employee benefits
All employee benefits payable wholly within
twelve months of receiving employee services are
classified as short-term employee benefits. These
benefits include salaries and wages, bonus and ex-
gratia. Short-term employee benefit obligations
are measured on an undiscounted basis and are
expensed as the related service is provided. A liability
is recognized for the amount expected to be paid, if
the Company has a present legal or constructive
obligation to pay the amount as a result of past
service provided by the employee, and the amount of
obligation can be estimated reliably.
ii. Defined contribution plans
A defined contribution plan is a post-employment
benefit plan under which an entity pays fixed
contributions to a separate entity and will
have no legal or constructive obligation to pay
further amounts. The Company makes specified
monthly contributions to the Regional Provident
Fund Commissioner towards provident fund,
superannuation fund scheme, National Pension
Scheme and employee state insurance scheme
('ESI'). Obligations for contributions to defined
contribution plans are recognized as an employee
benefit expense in the Statement of Profit and Loss
in the periods during which the related services are
rendered by employees. If the contribution payable to
the scheme for service received before the balance
sheet date exceeds the contribution already paid,
the deficit payable to the scheme is recognized as
a liability after deducting the contribution already
paid. If the contribution already paid exceeds the
contribution due for services received before the
balance sheet date, then excess is recognized as an
asset to the extent that the pre-payment will lead to,
for example, a reduction in future payment or a cash
refund.
iii. Defined benefit plans
The Company operates a defined benefit gratuity
plan, which requires contributions to be made to LIC
of India. There are no other obligations other than the
contribution payable to the respective trust.
The Company has an obligation towards gratuity,
a defined benefit retirement plan covering eligible
employees. The Gratuity Plan 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
wage as defined under 'New Labour Codes' and the
tenure of employment (subject to a maximum limit
in accordance with regulatory requirement). Fixed
term employees for tenure above one year are also
considered for the gratuity plan.
A defined benefit plan is a post-employment benefit
plan other than a defined contribution plan. The
Company's net obligation in respect of defined
benefit plans is calculated by estimating the amount
of future benefit that employees have earned in the
current and prior periods, discounting that amount
and deducting the fair value of any plan assets.
The calculation of defined benefit obligation is
performed annually by a qualified actuary using
the projected unit credit method, which recognizes
each year of service as giving rise to additional
unit of employee benefit entitlement and measure
each unit separately to build up the final obligation.
The obligation is measured at the present value of
estimated future cash flows. The discount rates
used for determining the present value of obligation
under defined benefit plans, are based on the market
yields on Government securities as at the Balance
Sheet date, having maturity periods approximating
to the terms of related obligations.
Remeasurements of the net defined benefit liability,
which comprise actuarial gains and losses, the
return on plan assets (excluding interest) and the
effect of the asset ceiling (if any, excluding interest),
are recognised immediately in OCI. The Company
determines the net interest expense (income) on the
net defined benefit liability (asset) for the period by
applying the discount rate determined by reference
to market yields at the end of the reporting period
on government bonds. This rate is applied on the net
defined benefit liability (asset), both as determined at
the start of the annual reporting period, taking into
account any changes in the net defined benefit liability
(asset) during the period as a result of contributions
and benefit payments. Net interest expense and
other expenses related to defined benefit plans are
recognised in profit or loss.
iv. Other long term employee benefits
Compensated absences
The employees can carry forward a portion of the
unutilized accrued compensated absences and
utilize it in future service periods or receive cash
compensation on termination of employment or
during the course of employment in certain grade
of employees. Since the compensated absences do
not fall due wholly within twelve months after the
end of the period in which the employees render
the related service and are also not expected to be
utilized wholly within twelve months after the end
of such period, the benefit is classified as a long¬
term employee benefit. The Company records an
obligation for such compensated absences in the
period in which the employee renders the services
that increase this entitlement. The obligation is
measured on the basis of independent actuarial
valuation using the projected unit credit method.
Further, a certain portion of compensated absence
obligation is classified as current liability based on
the independent actuarial valuation.
r) 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.
Recognition and initial measurement
Trade receivables are initially recognized when they are
originated. All other financial assets and financial liabilities
are initially recognized when the Company becomes a
party to the contractual provisions of the instrument.
A financial asset (unless it is a trade receivable without
a significant financing component) or financial liability is
initially measured at fair value plus or minus, for an item not
at fair value through profit and loss ('FVTPL'), transaction
costs that are directly attributable to its acquisition or
issue. A trade receivable without a significant financing
component is initially measured at the transaction price.
Classification and subsequent measurement
Financial assets
On initial recognition, a financial asset is classified as
measured at:
- Amortized cost;
- fair value through other comprehensive income
(FVOCI) - debt investment;
- fair value through other comprehensive income
(FVOCI) - equity investment, or
- fair value through profit and loss (FVTPL)
Financial assets are not reclassified subsequent to their
initial recognition, except if and in the period the Company
changes its business model for managing financial assets.
A financial asset is measured at amortized cost if it meets
both of the following conditions and is not designated as at
FVTPL:
- the asset is held within a business model whose
objective is to hold assets to collect 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 (SPPI) on the
principal amount outstanding.
After initial measurement, such financial assets are
subsequently measured at amortized cost using the
effective interest rate (EIR) method. Amortized cost is
calculated by taking into account any discount or premium
on acquisition and fees or costs that are an integral part
of the EIR. The EIR amortisation is included in finance
income in the Statement of Profit and Loss. The losses
arising from impairment are recognized in the Statement
of Profit and Loss. This category generally applies to trade
and other receivables. Company has recognized financial
assets viz. security deposit, trade receivables, employee
advances at amortized cost.
A debt instrument is measured at FVOCI if it meets both of
the following conditions and is not designated as at FVTPL:
- the asset is held within a business model whose
objective is achieved by both collecting contractual
cash flows and selling financial assets; and
- the contractual terms of the financial asset give
rise on specified dates to cash flows that are solely
payments of principal and interest (SPPI) on the
principal amount outstanding.
Debt instruments included within the FVOCI category are
measured initially as well as at each reporting date at fair
value. Fair value movements are recognized in the other
comprehensive income (OCI). However, the Company
recognizes interest income, impairment losses & reversals
and foreign exchange gain or loss in the Statement of
Profit and Loss. On de-recognition of the asset, cumulative
gain or loss previously recognized in OCI is re-classified
from the equity to Statement of Profit and Loss. Interest
earned whilst holding FVOCI debt instrument is reported
as interest income using the EIR method.
On initial recognition of an equity investment that is not
held for trading, the Company may irrevocably elect to
present subsequent changes in the investment's fair value
in OCI (designated as FVOCI - equity investment). This
election is made on an investment-by-investment basis.
All financial assets not classified as measured at amortized
cost or FVOCI as described above are measured at FVTPL.
This includes all derivative financial assets. On initial
recognition, the Company may irrevocably designate a
financial asset that otherwise meets the requirements to
be measured at amortized cost or at FVOCI as at FVTPL if
doing so eliminates or significantly reduces an accounting
mismatch that would otherwise arise.
Financial assets: Business model assessment
The Company makes an assessment of the objective
of the business model in which a financial asset is held
at a portfolio level because this best reflects the way
the business is managed and information is provided to
management. The information considered includes:
- t he stated policies and objectives for the portfolio
and the operation of those policies in practice. These
include whether management's strategy focuses on
earning contractual interest income, maintaining a
particular interest rate profile, matching the duration
of the financial assets to the duration of any related
liabilities or expected cash outflows or realising cash
flows through the sale of the assets;
- how the performance of the portfolio is evaluated
and reported to the Company's management;
- the risks that affect the performance of the business
model (and the financial assets held within that
business model) and how those risks are managed;
- the frequency, volume and timing of sales of financial
assets in prior periods, the reasons for such sales
and expectations about future sales activity.
Financial assets that are held for trading or are managed
and whose performance is evaluated on a fair value basis
are measured at FVTPL.
Financial assets: Assessment whether contractual cash
flows are solely payments of principal and interest
For the purpose of this assessment 'Principal' is defined as
the fair value of the financial asset on initial recognition.
'Interest' is defined as consideration for the time value of
money and for the credit risk associated with the principal
amount outstanding during a particular period of time and
for other basic lending risks and costs (e.g. liquidity risk
and administrative costs), as well as a profit margin.
In assessing whether the contractual cash flows are
solely payments of principal and interest, the Company
considers the contractual terms of the instrument. This
includes assessing whether the financial asset contains a
contractual term that could change the timing or amount
of contractual cash flows such that it would not meet
this condition. In making the assessment, the Company
considers:
- contingent events that would change the amounts or
timings of cash flows;
- terms that may adjust the contractual coupon rate,
including variable interest rate features;
- prepayment and extension features; and
- terms that limit the Company's claim to cash flows
from specified assets (e.g. non - recourse features)
A prepayment feature is consistent with the solely
payments of principal and interest criterion if the
prepayment amount substantially represents unpaid
amounts of principal and interest on the principal amount
outstanding, which may include reasonable additional
compensation for early termination of the contract.
Additionally, for a financial asset acquired at a significant
discount or premium to its contractual par amount, as
feature that permits or requires prepayment at an amount
that substantially represents the contractual par amount
plus accrued (but unpaid) contractual interest (which may
also include reasonable additional compensation for early
termination) is treated as consistent with this criterion if
the fair value of the prepayment feature is insignificant at
initial recognition.
Financial assets: Subsequent measurement and gains and
losses
Financial liabilities: Classification, subsequent
measurement and gains and losses
Financial liabilities are classified as measured at amortized
cost or FVTPL. A financial liability is classified as at FVTPL
if it is classified as held for trading, or it is a derivative
or it is designated as such on initial recognition. Financial
liabilities at FVTPL are measured at fair value and net gains
and losses, including any interest expense, are recognized
in profit or loss. Other financial liabilities are subsequently
measured at amortized cost using the effective interest
method. Interest expense and foreign exchange gains and
losses are recognized in profit or loss. Any gain or loss on
derecognition is also recognized in profit or loss.
Derecognition
Financial assets
The Company derecognizes a financial asset when the
contractual rights to the cash flows from the financial asset
expire, or it transfers the rights to receive the contractual
cash flows in a transaction in which substantially all of
the risks and rewards of ownership of the financial asset
are transferred or in which the Company neither transfers
nor retains substantially all of the risks and rewards of
ownership and does not retain control of the financial
asset.
If the Company enters into transactions whereby it
transfers assets recognized on its balance sheet, but
retains either all or substantially all of the risks and
rewards of the transferred assets, the transferred assets
are not derecognized.
Financial liabilities
The Company derecognizes a financial liability when its
contractual obligations are discharged or cancelled, or
expire. The Company also derecognizes a financial liability
when its terms are modified and the cash flows under the
modified terms are substantially different. In this case,
a new financial liability based on the modified terms is
recognized at fair value. The difference between the
carrying amount of the financial liability extinguished and
the new financial liability with modified terms is recognized
in profit or loss.
Offsetting
Financial assets and financial liabilities are offset and the
net amount presented in the balance sheet when, and only
when, the Company currently has a legally enforceable
right to set off the amounts and it intends either to settle
them on a net basis or to realise the asset and settle the
liability simultaneously.
Derivative financial instruments and hedge accounting
The Company uses derivative instruments such as foreign
exchange forward contracts and currency swaps to hedge
its foreign currency and interest rate risk exposure.
Embedded derivatives are separated from the host
contract and accounted for separately if the host contract
is not a financial asset and certain criteria are met.
Derivatives are initially measured at fair value. Subsequent
to initial recognition, derivatives are measured at fair value
and changes therein are generally recognized in profit and
loss.
Impairment of financial assets
The Company recognizes loss allowances for expected
credit losses on:
- Financial assets measured at amortized cost; and
- Financial assets measured at FVOCI - debt
instruments.
At each reporting date, the Company assesses whether
financial assets carried at amortized cost and debt
instruments at FVOCI are credit-impaired. A financial asset
is 'credit-impaired' when one or more events that have a
detrimental impact on the estimated future cash flows of
the financial asset have occurred.
Evidence that a financial asset is credit - impaired includes
the following observable data:
For recognition of impairment loss on financial assets and
risk exposure, the Company determines whether there has
been a significant increase in the credit risk since initial
recognition. If credit risk has not increased significantly,
12 month ECL is used to provide for impairment loss.
However, if credit risk has increased significantly, lifetime
ECL is used. If, in a subsequent period, 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 12 month ECL.
Measurement of expected credit losses
Expected credit losses are a probability-weighted estimate
of credit losses. Credit losses are measured as the present
value of all cash shortfalls (i.e. the difference between the
cash flows due to the Company in accordance with the
contract and the cash flows that the Company expects to
receive).
Presentation of allowance for expected credit losses in the
balance sheet
Loss allowance for financial assets measured at amortized
cost are deducted from the gross carrying amount of the
assets.
For debt securities at FVOCI, the loss allowance is charged
to Statement of the Profit and Loss and is recognized in
OCI.
Write-off
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 debtor 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 in order to
comply with Company's procedures for the recovery of
amount due.
Impairment of financial instruments
In accordance with Ind AS 109, the Company applies
expected credit loss (ECL) model for the measurement and
recognition of impairment loss on the following financial
assets and credit risk exposure:
a. Financial assets that are debt instruments, and
are measured at amortized cost e.g., deposits and
advances
b. Trade receivables that result from transactions that
are within the scope of Ind AS 115
c. Financial guarantee contracts that are not measured
as at FVTPL.
The Company follows 'simplified approach' for recognition
of impairment loss allowance on Trade receivables.
The application of simplified approach does not require
the Company to track changes in credit risk. Rather,
it recognizes impairment loss allowance based on
lifetime ECLs at each reporting date, right from its initial
recognition.
For recognition of impairment loss on other financial
assets and risk exposure, the Company determines that
whether there has been a significant increase in the
credit risk since initial recognition. If credit risk has not
increased significantly, 12-month ECL is used to provide
for impairment loss. However, if credit risk has increased
significantly, lifetime ECL is used. If, in a subsequent
period, 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 recognising
impairment loss allowance based on 12-month ECL.
Lifetime ECL are the expected credit losses resulting
from all possible default events over the expected life of
a financial instrument. The 12-month ECL is a portion of
the lifetime ECL which results from default events that are
possible within 12 months after the reporting date.
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 cash 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, call and similar
options) 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
• Cash flows from the sale of collateral held or
other credit enhancements that are integral to the
contractual terms
ECL impairment loss allowance (or reversal) recognized
during the period is recognized as income/ expense in
the Statement of Profit and Loss. This amount is reflected
under the head 'other expenses' in the Statement of Profit
and Loss. The balance sheet presentation for various
financial instruments is described below:
• Financial assets measured as at amortized cost and
contractual revenue receivables: ECL 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.
• Loan commitments and financial guarantee contracts:
ECL is presented as a provision in the balance sheet,
i.e. as a liability.
For assessing increase in credit risk and impairment loss,
the Company combines financial instruments on the basis
of shared credit risk characteristics with the objective of
facilitating an analysis that is designed to enable significant
increases in credit risk to be identified on a timely basis.
The allowance for expected credit losses for trade
receivables and contract assets are calculated at individual
level when there is an indication of impairment.
s) Cash and cash equivalents
Cash and cash equivalents in the Balance Sheet comprise
cash at banks, cash on hand and short-term deposits with
a maturity of three months or less, which are subject to an
insignificant risk of changes in value.
t) Cash dividend and non-cash distribution to equity holders
of the parent
The Company recognizes a liability to make cash
distributions to equity holders when the distribution
is authorized and the distribution is no longer at the
discretion of the Company. As per the corporate laws in
India, a distribution is authorized when it is approved by
the shareholders. A corresponding amount is recognized
directly in equity.
u) Corporate Social Responsibility ("CSR") expenditure
CSR expenditure incurred by the Company is charged to
the Statement of the Profit and Loss.
v) Research and development
Expenditure on research and development activities is
recognized in the Statement of Profit and Loss as incurred.
Development expenditure is capitalized as part of cost of
the resulting intangible asset only if the expenditure can
be measured reliably, the product or process is technically
and commercially feasible, future economic benefits are
probable, and the Company intends to and has sufficient
resources to complete development and to use or sell
the asset. Otherwise, it is recognized in profit or loss as
incurred. Subsequent to initial recognition, the asset is
measured at cost less accumulated amortisation and any
accumulated impairment losses, if any.
w) Cash Flow Statement
Cash flows are reported using the indirect method,
whereby profit for the period is adjusted for the effects of
transactions of a non-cash nature, any deferrals or accruals
of past or future operating cash receipts or payments and
items of income or expenses associated with investing
or financing cash flows. The cash flows from operating,
investing and financing activities of the company are
aggregated.
x) Exceptional items
On certain occasions, the size, type or incidence of an item
of income or expense, pertaining to the ordinary activities
of the Company is such that its disclosure improves the
understanding of the performance of the Company. Such
income or expense is classified as an exceptional item and
accordingly, disclosed in the financial statements.
y) Recently issued accounting pronouncements
Ministry of Corporate Affairs ("MCA”) notifies new
standards or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued
from time to time.
In May 2025, MCA notified amendments to Ind AS 21 - The
Effects of Changes in Foreign Exchange Rates, applicable
w.e.f. April 1, 2025. The Company has reviewed the
amendment and based on its evaluation has determined
that it does not have any significant impact in its financial
statements.
In August 2025, MCA notified the following amendments to:
1. Ind AS 1, Presentation of Financial Statements,
applicable w.e.f. April 1, 2025 - The amendment
relates to classification of liabilities as current
or non-current and non-current liabilities with
covenants. In the context of classifying a liability as
current, it removes the requirement of existence of a
right to defer settlement for at least 12 months after
the reporting date and instead requires that the said
right should exist on the reporting date and have
substance. The amendment also introduces guidance
on classification of liabilities with covenants. The
Company has no impact of these amendments in
its classification criteria of current and non-current
liabilities.
2. Ind AS 7, Statement of Cash Flows and Ind AS 107,
Financial Instruments: Disclosures, applicable
w.e.f. April 1, 2025 - The amendment in Ind AS 7
requires to inform users of financial statements of
the existence of supplier finance arrangements and
explain the nature of the arrangements, the carrying
amount of liabilities and the range of payment due
dates. Ind AS 107 has been amended to add supplier
finance arrangements as a factor that may cause
concentration of liquidity risk. The Company has
reviewed the amendment and based on its evaluation
has determined that it does not have any significant
impact in its financial statements.
3. Ind AS 12, International Tax Reform - Pillar Two Model
Rules applicable immediately - The amendments
provide a temporary mandatory relief from deferred
tax accounting for top-up tax and disclose that they
have applied the relief. This relief is immediate and
applies retrospectively. The Company has reviewed
the amendment and based on its evaluation has
determined that it does not have any significant
impact in its financial statements.
Notes:-
1) Refer note 40 for disclosure of leases under Ind AS 116.
2) During the year ended 31 March 2025, the Company decided to surrender its vacant leasehold land at Sanand to the lessor. Owing to the
said decision, the written down value of the Investment property amounting to INR 443.51 Lakhs was derecognised and corresponding
lease liability amounting to INR 412.29 Lakhs was reversed to profit and loss account. Additionally, amount recovered for the scrap
value of the building amounting to INR 105.00 lakhs was credited to the profit and loss account. Accordingly, the Company recorded
the net gain of INR 73.78 lakhs on above adjustments as "Exceptional item” (refer note 32).
# There are no amount due for payment to the Investor Education & Protection Fund under Section 125 of the Companies Act, 2013.
The Company's exposure to currency and liquidity risks related to the above financial liabilities is disclosed in note 47.
* Derivative instruments at fair value through profit or loss reflect the change in fair value of those forward contracts that are not
designated in hedge relationships, but are, nevertheless, intended to reduce the level of foreign currency risk for external currency
payables.
@ There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at the
year end. The information as required to be disclosed in relation to Micro and Small Enterprises has been determined to the extent
such parties have been identified on the basis of information available with the Company (refer note 20).
b) Performance obligation
The Company's contracts with customers includes promises to transfer products and rendering of services to the customer. The
Company assesses the products/services promised and identifies distinct performance obligations in the contract. Identification of
distinct performance obligation involves judgement to determine the deliverables and the ability of the customer to benefit independently
from such deliverables. The Company uses judgement to determine an appropriate selling price for a performance obligation. The
Company allocates the transaction price to each performance obligation on the basis of the relative selling price of each distinct
product or service promised in the contract. The Company exercises judgement in determining whether the performance obligation
is satisfied at a point in time or over a period of time. The Company considers indicators such as how customer consumes benefits of
significant risks and who controls the asset as it is being created or existence of enforceable right to payment for performance to date
and alternate use of such product or service, transfer of significant risk and rewards to the customer, acceptance of delivery by the
customer etc. Based on the above assessment performance obligation is satisfied at point in time. Company have payment terms of
32 days to 90 days in case of domestic customers and 130 days in case of export customers.
* During the year ended 31 March 2026, a voluntary separation scheme ('VSS') was offered to the workmen and the Company has
incurred cost of INR 352.26 lakhs. Accordingly, the Company has recorded the VSS cost as an exceptional item.
** On November 21,2025, the Government of India notified the four Labour Codes, consolidating 29 existing labour laws. Pursuant to the
Central Rules and FAQs issued by the Ministry of Labour & Employment, the Company has evaluated the impact of these changes and
restructured employee compensation accordingly. Based on this assessment, past service cost of INR 245.28 lakhs relating to gratuity
payable to certain employees has been recognised as an exceptional item. Considering its regulatory-driven and non-recurring nature,
the amount has been presented as an exceptional item in the Statement of Profit and Loss for the year ended 31 March 2026. The
Company continues to monitor further developments and will account for any additional impact, as required.
*** During the year ended 31 March 2025, the Company decided to surrender its vacant leasehold land at Sanand to the lessor. Owing to
the said decision, the written down value of the Investment property amounting to INR 443.51 Lakhs was charged to profit and loss
account and corresponding lease liability amounting to INR 412.29 Lakhs was reversed to profit and loss account. Additionally, amount
recovered for the scrap value of the building amounting to INR 105.00 lakhs was credited to the profit and loss account. Accordingly,
the Company recorded the net gain of INR 73.78 lakhs on above adjustments as "Exceptional item”
Notes:-
(i) Contribution to provident fund
Pursuant to judgement by the Hon'ble Supreme Court dated 28 February 2019, it was held that basic wages, for the purpose of
provident fund, to include special allowances which are common for all employees. However, there is uncertainty with respect
to the applicability of the judgement and period from which the same applies. Owing to the aforesaid uncertainty and pending
clarification from the authority in this regard, the Company has not recognised any provision for the previous years ended 31
March 2019. Further, management also believes that the impact of the same on the Company will not be material.
# The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are
required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the
outcome of these proceedings to have a materially adverse effect on its financial position.
The Company has assessed that it is only possible, but not probable, that outflow of economic resources will be required.
* Additionally, the Company is involved in other disputes, lawsuits, claims and/or regulatory inspections including commercial
matters that arise from time to time in ordinary course of business. The Company believes that none of these matters, either
individually or in aggregate, are expected to have any material adverse effect on its financial statements.
38. Employee benefit obligationsA. Defined Contribution Plan
The Company makes contributions, determined as a specified percentage of employee salaries, towards Provident Fund, Punjab
Labour Welfare Fund (PLWF), Employee State Insurance scheme ('ESI') and National Pension Scheme (NPS) which are collectively
defined as defined contribution plan. The Company has no obligations other than to make the specified contributions. The contributions
are charged to the Statement of Profit and Loss as they accrued. The amount recognized as an expense includes following:
B. Defined benefit plan
The employees' gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of
obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service
as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The
Company made annual contributions to the LIC of India of an amount advised by the LIC.
The above defined benefit plan exposes the Company to following risks:
Interest rate risk:
The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit
obligation will tend to increase
Salary inflation risk:
Higher than expected increases in salary will increase the defined benefit obligation.
Demographic risk:
This is the risk of variability of results 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.
The Company actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows
arising from the employee benefit obligations. The Company has not changed the processes used to manage its risks from previous
periods. The funds are managed by specialised team of Life Insurance Corporation of India.
The sensitivity analysis above have been determined based on reasonably possible changes of the respective assumptions
occurring at the end of the year and may not be representative of the actual change. It is based on a change in the key assumption
while holding all other assumptions constant.
Sensevities due to mortality and withdrawals are not material and hence impact of change is not calculated. Sensivity as to
rate of inflation, rate of increase of pensions in payment, rate of increase of pensions before retirement and life expectancy not
applicable being a lump sum benefit on retirement.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to prior period.
C. Other long-term employee benefits
During the year ended 31 March 2026, the Company has created provision for compensated absences towards earned leave amounting
to INR 422.73 lakhs (previous year expense of INR 498.92 lakhs). The Company determines the expense for compensated absences
basis the actuarial valuation of present value of the obligation, using the Projected Unit Credit Method.
39. Related party disclosures
For the purpose of these financial statements, parties are considered to be related to the Company, if the Company has the ability, directly
or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa,
or where the Company and the party are subject to common control or common significant influence. Related parties may be individuals or
other entities.
The Company has leases for land, office buildings, warehouses and related facilities, cars and other office equipments. With the exception
of short-term leases, leases of low-value underlying assets and leases with variable lease payments, each lease is reflected on the balance
sheet as a right-of-use asset and a lease liability. Variable lease payments which do not depend on an index or a rate are excluded from the
initial measurement of the lease liability and right of use assets.
Each lease generally imposes a restriction that, unless there is a contractual right for the Company to sub-lease the asset to another party,
the right-of-use asset can only be used by the Company. Some leases contain an option to extend the lease for a further term. The Company
is prohibited from selling or pledging the underlying leased assets as security. For leases over office buildings and other premises the
Company must keep those properties in a good state of repair and return the properties in their original condition at the end of the lease.
Further, the Company is required to pay maintenance fees in accordance with the lease contracts.
41. Segment information
The Company is engaged in the business of manufacturing and assembling of automotive components. The Board of Directors being the
Chief Operating Decision Maker (CODM) evaluates the Company's performance and allocates resources based on an analysis of various
performance indicators by industry classes. All operating segments' operating results are reviewed regularly by CODM to make decisions
about resources to be allocated to the segments and assess their performance. CODM believes that these are governed by same set of risk
and returns hence CODM reviews as one balance sheet component. Further, the economic environment in which the company operates
is significantly similar and not subject to materially different risk and rewards. The revenues, total expenses and net profit as per the
Statement of Profit and Loss represents the revenue, total expenses and the net profit of the sole reportable segment.
i) Fair values hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial statements that are
(a) recognised and measured at fair value and
(b) measured at amortised cost and for which fair values are disclosed in the financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the company has classified its financial
instruments into three levels prescribed under the accounting standard.
All financial instruments for which fair value is recognised or disclosed are categorised with in the fair value hierarchy, described as
follows, based on the lowest level input that is significant to the fair value measurement as a whole.
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices)
or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
ii) Financial instruments by category & fair value
Set out below, is a comparison by class of the carrying amounts and fair value of the Company's financial instruments.
a. Fair valuation of financial assets and liabilities with short term maturities is considered as approximate to respective carrying
amount due to the short term maturities of these instruments.
b. Fair value of non-current financial assets and liabilities have not been disclosed as there is no significant differences between
carrying value and fair value.
c. Fair value of borrowing is considered to be the same as its carrying value, as there is no change or are at the market rates.
d. Fair value of the derivative financial instruments has been determined using valuation techniques with market observable
inputs. The model incorporate various inputs include the credit quality of counter-parties and foreign exchange forward rates.
There are no transfers between Level 1, Level 2 and Level 3 during the year ended 31 March 2026 and 31 March 2025.
46. Other Statutory Information
i) No proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions
(Prohibitions) Act, 1988 (45 of 1988) and the rules made thereunder.
ii) The Company has no transactions with companies struck off under section 248 of the Companies Act, 2013 or Section 560 of the
Companies Act, 1956.
iii) There are no charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
vii) The Company does not have any such transaction which are not recorded in the books of accounts and 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).
viii) The Company has not been declared as a wilful defaulter by any bank or financial institution or other lender.
ix) The Company has complied with the number of layers for its holding in downstream companies prescribed under clause (87) of
Section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017.
x) The Company has not revalued its Property, Plant and equipments and intangible assets and Investment property including Right-of-
use assets.
xi) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable
losses.
47. Financial risk management
The Company's risk management is carried out by a central treasury department (of the Company) under policies approved by the Board of
Directors. The Board of Directors provides written principles for overall risk management, as well as policies covering specific areas, such
as foreign exchange risk, interest rate risk, credit risk and investment of excess liquidity.
The Company is primarily engaged in the manufacturing of steering systems and other auto components for passenger and utility vehicle
manufactures. The Company's principal financial liabilities, comprise of loans and borrowings, trade and other payables. The main purpose
of these financial liabilities is to support the Company's operations. The Company's principal financial assets, trade and other receivables,
security deposits, cash and employee advances that derive directly from its operations. The Company also enters into derivative transactions
viz. Cross Currency Interest Rate Swap as required.
The Company has exposure to the following risks arising from financial instruments
- Credit risk [see (A)];
- Liquidity risk [see (B)]; and .
- Market risk [see (C)].
Risk Management Framework
The Company's activities makes it susceptible to various risks. The company has taken adequate measures to address such concerns by
developing adequate systems and practices. The Company's overall risk management program focuses on the unpredictability of markets
and seeks to manage the impact of these risks on the Company's financial performance.
The Company's senior management oversee the management of these risks and advises on financial risks and the appropriate financial
risk governance framework for the Company. The board provides assurance to the shareholders that the Company's financial risk activities
are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the
Company's policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have
the appropriate skills, experience and supervision. It is the Company's policy that no trading in derivatives for speculative purposes may be
undertaken.
The Company's risk management policies are established to identify and analyse the risks faced by the company, to set appropriate risk
limits and controls and to monitor risks and adherence to limits. Risk management policies are reviewed regularly to reflect changes
in market conditions and company's activities. The company, through its training and management standards and procedures, aims to
maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
The Company's those charged with governance including Audit Committee oversees how management monitors compliance with the
company's risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks
faced by the company. The Audit Committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad
hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to
a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables), including foreign
exchange transactions and other financial instruments
Trade receivables
Ind AS requires expected credit losses to be measured through a loss allowance. The Company assesses at each date of balance
sheet position whether a financial asset or a company of financial assets is impaired. The Company recognises lifetime expected
losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all other financial assets,
expected credit losses are measured at an amount equal to the 12 months expected credit losses or at an amount equal to the life time
expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. Company's exposure
to customers is diversified and more than 90% revenue is recognised from OEM's. However there was no default on account of these
customers in the history of Company.
Before accepting any new customer, the Company assesses the potential customer's credit quality and defines credit limits to
customer. Limits and scoring attributed to customers are reviewed on periodic basis. The Company performs credit assessment for
customers on an annual basis and recognizes credit risk, on the basis lifetime expected losses.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the
reporting date was:
Credit risk from balances with banks and financial institutions is managed by the Corporate finance department in accordance with
the Company's policy. Investments of surplus funds are made only in schemes of alternate investment fund/or other appropriate
avenues including term and recurring deposits with approved counterparties and within credit limits assigned to each counterparty.
Counterparty credit limits are reviewed by the Company's Board of Directors on an annual basis. The limits are set to minimise
the concentration of risks and therefore mitigate financial loss through counterparty's potential failure to make payments.
The Company places its cash and cash equivalents and term deposits with banks with high investment grade ratings, limits the
amount of credit exposure with any one bank and conducts ongoing evaluation of the credit worthiness of the banks with which
it does business. Given the high credit ratings of these banks, the Company does not expect these banks to fail in meeting their
obligations. The maximum exposure to credit risk for the components of the balance sheet at 31 March 2026 and 31 March 2025
is represented by the carrying amount of each financial asset.
(B) Liquidity risk
Liquidity risk refers to the risk that the company cannot meet its financial obligations. The objective of liquidity risk management is
to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk
by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual
cash flows, and by matching the maturity profiles of financial assets and liabilities.
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 following types of risk: interest rate risk, currency risk and price risk. Financial instruments affected by
market risk include loans and borrowings, deposits, advances and derivative financial instruments.
The sensitivity analysis in the following sections relate to the position as at 31 March 2026 and 31 March 2025. The sensitivity analysis
have been prepared on the basis that the amount of net debt, the ratio of floating to fixed interest rates of the debt and derivatives and
the proportion of financial instruments in foreign currencies are all constant in place at 31 March 2026.
The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other post-retirement
obligations; provisions.
The following assumptions have been made in calculating the sensitivity analysis:
- The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the
financial assets and financial liabilities held at 31 March 2026 and 31 March 2025.
(a) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign
exchange rates. The Company'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 Company manages its foreign currency risk by entering into derivatives. When a derivative is entered into for the purpose of
hedging, the Company negotiates the terms of those derivatives to match the terms of the hedged exposure.
(i) Foreign currency risk exposure
Details of unhedged foreign currency exposures is as follows:
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
interest rates. The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's long-term
debt obligations with fixed interest rates.
(i) Liabilities
The Company's policy is to minimise interest rate cash flow risk exposures on long-term financing. At 31 March 2026, the
Company is exposed to changes in market interest rates through bank borrowings at variable interest rates. The Company's
investments in Fixed Deposits are all at fixed interest rates.
(ii) Assets
The Company's fixed deposits are carried at amortised cost and are fixed rate deposits. They are therefore not subject to interest
rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change
in market interest rates.
48. Capital management(i) The Company' s capital management objectives are
The Board policy is to maintain a strong capital base so as to maintain the confidence of investor, creditor and market and to sustain
future development of the business. The Board of Directors monitors the return on capital employed, as well as the level of dividends
to equity shareholders. The Company manages capital risk by maintaining sound/optimal capital structure through monitoring of
49. On November 21,2025, the Government of India notified the four Labour Codes - the Code on Wages, 2019, the Industrial Relations Code,
2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020 - consolidating 29 existing
labour laws. The Ministry of Labour & Employment published Central Rules and FAQs to enable assessment of the financial impact due to
changes in regulations. The Company has considered restructured compensation of its employees, and assessed the impact of the changes,
consistent with the Labour Codes, rules, FAQs. Incremental impact was identified for certain employees and regonised as expetional item
(refer note 32). Considering the regulatory-driven and non-recurring nature of this impact, the Company has presented such incremental
impact as exceptional Items in the statement of profit and loss for the year ended 31 March 2026. The Company continues to monitor the
finalisation of State Rules and clarifications from the Government on other aspects of the Labour Code and would provide appropriate
accounting effect on the basis of such developments as needed.
50. Transfer pricing :
The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing
legislation under Sections 92-92F of the Income-tax Act, 1961. The Company is in the process of updating the documentation of the
international transactions entered into with the associated enterprises from April 2025 and expects such records to be in existence latest
by October 2026 as required by law. The management is of the opinion that its international transactions are at arm's length so that the
aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision
for taxation.
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