h) Provision and contingencies
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable
that an out of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of
the amount of obligation. When the Company expects some or all of a provision to be reimbursed, the reimbursement is recognised
as a separate asset, but when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement
of profit and loss net of reimbursement. If the effect of the time value of money is material, provisions are discounted using a current
pre-tax rate that reflects, appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to
the passage of time is recognised finance cost.
i) Cash flow statement
Cash flows are reported using the indirect method, whereby net profit/ (loss) before tax is adjusted for the effects of transactions of a
non- nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular operating, investing
and financing activities of the Company are segregated. Cash and cash equivalents in the cash flow statement comprise cash in hand
and balance in ban current accounts, deposit accounts.
j) Taxes
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities.
The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive
income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are
subject to interpretation and establishes provisions where appropriate
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss
"Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused
tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:
> When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or
liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting
profit nor taxable profit or loss.
> In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint
ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in
the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable
that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax
assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits
will allow the deferred tax asset to be recovered. Deferred tax relating to items recognised outside profit or loss is recognised outside
profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying
transaction either in OCI or directly in equity. Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right
exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same
taxation authority Sales/ value added taxes paid on acquisition of assets or on incurring expenses
Expenses and assets are recognised net of the amount of sales/ value added taxes paid, except:
When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case, the tax paid is
recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable.
> When receivables and Payable s are stated with the amount of tax included
> The net amount of tax recoverable from, or payable to, the taxation authority is included as part of receivables or Payable s in
the balance sheet
2) Other Accounting Policies
a) Business combinations
Business combinations are accounted for using the acquisition method. At the acquisition date, identifiable assets acquired and
liabilities assumed are measured at fair value. For this purpose, the liabilities assumed include contingent liabilities representing
present obligation and they are measured at their acquisition date fair values irrespective of the fact that outflow of resources
embodying economic benefits is not probable. The consideration transferred is measured at fair value at acquisition date and includes
the fair value of any contingent consideration. Contingent consideration (earn out) is remeasured at fair value at each reporting date
and changes in the fair value of the contingent consideration are recognised in the Statement of Profit and Loss. However, deferred
tax asset or liability and any liability or asset relating to employee benefit arrangements arising from a business combination are
measured and recognised in accordance with the requirements of Ind AS 12, Income Taxes and Ind AS 19, Employee Benefits,
respectively.
Where the consideration transferred exceeds the fair value of the net identifiable assets acquired and liabilities assumed, the excess
is recorded as goodwill. Alternatively, in case of a bargain purchase wherein the consideration transferred is lower than the fair value
of the net identifiable assets acquired and liabilities assumed, the Company after assessing fair value of all identified assets and
liabilities, record the difference as a gain in other comprehensive income and accumulate the gain in equity as capital reserve. The
costs of acquisition excluding those relating to issue of equity or debt securities are charged to the Statement of Profit and Loss in the
period in which they are incurred.
In case of business combinations involving entities under common control, the above policy does not apply. Business combinations
involving entities under common control are accounted for using the pooling of interest's method. The net assets of the transferor
entity or business are accounted at their carrying amounts on the date of the acquisition subject to necessary adjustments required to
harmonies accounting policies. Any excess or shortfall of the consideration paid over the share capital of transferor entity or business
is recognised as capital reserve under equity.
b) Government grants and subsidies
Government grants in the nature of promoters' contribution are credited to Capital Grants under Reserves and Surplus and treated as
a part of shareholders' funds. Utilisation thereof is as per covenants of grants received.
Such grants are reduced to the extent of utilisation thereof and depreciation charged and loss on sale or discard of property, plant &
equipments purchased there from Balance remaining in the Grant after completion of its intended purpose, is transferred to General
Reserve. (Grant repayable on Demand shown as current liability)
c) Impairment
Assets that have an indefinite useful life, for example goodwill, are not subject to amortization and are tested for impairment annually
whenever there is an indication that the asset may be impaired. Assets that are subject to depreciation and amortization and assets
represents investments in subsidiary and associate companies are reviewed for impairment, whenever events or changes in
circumstances indicate carrying amount may not be recoverable. Such circumstances include, though are not limited to, significant or
sustained decline in revenue earnings and material adverse changes in the economic environment.
An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit (CGU) exceeds its recoverable
amount. The recoverable amount of an asset is the greater of its fair value less cost to sell and value in use. To calculate value in use,
the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market rates
and the risk specific to the as for an asset that does not generate largely independent cash inflows, the recoverable amount is
determined for the CGU to which the a belongs. Fair value less cost to sell is the best estimate of the amount obtainable from the sale
of an asset in an arm's length transaction between knowledgeable, willing parties, less the cost of disposal.
Impairment losses, if any, are recognized in the Statement of Profit and Loss and included in depreciation and amortization expense.
Impairment losses are reversed in the Statement of Profit and Loss only to the extent that the asset's carrying amount does not exceed
the carrying amount that would have been determined if no impairment loss had previously been recognized.
d) Research and development costs
Research costs are expense as incurred. Development expenditures on an individual project are recognised as an intangible asset when
Company can demonstrate- - The technical feasibility of completing the intangible asset so that the asset will be available for use or
sale
- Its intention to complete and its ability and intention to use or sell the asset
Ý
- How the asset will generate future economic benefits
- The availability of resources to complete the asset
- The ability to measure reliably the expenditure during development
Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortisation
accumulated impairment losses. Amortisation of the asset begins when development is complete and the asset is available for use. I
amortised over the period of expected future benefit. Amortisation expense is recognised in the statement of profit and loss unless s
expenditure forms part of carrying value of another asset. The cost of software internally generated /acquired for internal use which
is no integral part of the related hardware, is recognized as an intangible asset. Intangible assets are amortized over a period of not
exceeding years, on straight line method. Amortization commences when the assets is available for use.
e) Impairment of non-financial assets
The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists,
or w annual impairment testing for an asset is required, the Company estimates the asset's recoverable amount. An asset's recoverable
amount the higher of an asset's or cash-generating unit's (CGU) fair value less costs of disposal and its value in use. Recoverable
amount determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from
other asset groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered
impaired a written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflect
current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal
recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used.
The calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair
value indicators.
The Company bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each
of Company's CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of
years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year. To estimate
c flow projections beyond periods covered by the most recent budgets/forecasts, the Company extrapolates cash flow projections in
the budget using a steady or declining growth rate for subsequent years, unless an increasing rate can be justified. In any case, this
growth rate does exceed the long-term average growth rate for the products, industries, or country or countries in which the entity
operates, or for the ma in which the asset is used.
Impairment losses of continuing operations are recognised in the statement of profit and loss
For assets, an assessment is made at each reporting date to determine whether there is an indication that previously recognised
impairment losses no longer exist or have decreased. If such indication exists, the Company estimates the asset's or CGU's recoverable
amount previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the
ass recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset
does exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no
impairment loss been recognised for the asset in prior years. Such reversal is recognised in the statement of profit or loss.
f) Foreign currency transaction
The Company's financial statements are presented in INR which is the Company's presentation currency and functional currency of the
company.
1 Initial recognition
Foreign currency transactions are recorded in the functional currency, by applying to the foreign currency amount the exchange
rate between the functional currency and the foreign currency at the date of the transaction.
2 Conversion
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange
at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are
reported using the exchange rate at the date of the transaction. Non-monetary items measured at fair value in a foreign currency
are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of
non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of
the item. (i.e., translation differences on items whose fair value gain or loss is recognised in OCI or profit or loss, respectively).
g) Fair value measurement
The Company measures financial instruments at fair value at each balance sheet date. Fair value is the price that would be received to
sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair
value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
>In the principal market for the asset or liability, or
>In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured
using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in
their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by
using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best
use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within 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 (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly
observable.
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers
have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the
fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature,
characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above. This note summarises
accounting policy for fair value. Other fair value related disclosures are given in the relevant notes.
Disclosures for valuation methods, significant estimates and assumptions (note 50) Contingent consideration (note 39)
Financial instruments (including those carried at amortised cost) (note 50)
h) Leases
A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration
Company as a lessee
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by
the Company. Contracts may contain both lease and non-lease components. The Company allocates the consideration in the contract
to the lease and non-lease components based on their relative stand-alone prices.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value
of the following lease payments:
> Fixed payments (including in-substance fixed payments), less any lease incentives receivable
> Variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement
date
> Amounts expected to be payable by the Company under residual value guarantees
> The exercise price of a purchase option if the Company is reasonably certain to exercise that option, and payments of penalties
for terminating the lease, if the lease term reflects the Company exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. The lease
payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the
case for leases in the Company, the lessee's incremental borrowing rate is used, being the rate that the individual lessee would have
to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment
with similar terms, security and conditions.
To determine the incremental borrowing rate, the Company uses a build-up approach that starts with a risk-free interest rate adjusted
for credit risk for leases held by the Company, which does not have recent third party financing and makes adjustments specific to the
lease, e.g. term, country, currency and security.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period to
produce a constant periodic rate of interest on the remaining balance of the liability for each period. Variable lease payments that
depend on sales are recognized in profit or loss in the period in which the condition that triggers those payments occurs.
The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the
carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease
modifications or to reflect revised in-substance fixed lease payments. The Company recognises the amount of the re-measurement of
lease liability due to modification as an adjustment to the right-of-use asset and statement of profit and loss depending upon the
nature of modification.
"Right-of-use assets are measured at cost comprising the following:
a) the amount of the initial measurement of lease liability
b) any lease payments made at or before the commencement date less any lease incentives received
c) any initial direct costs, and
d) restoration costs.
The right-of-use asset is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and
adjusted for any remeasurement of the lease liability. Right-of-use assets are generally depreciated over the shorter of the asset's
useful life and the lease term on a straight-line basis. The estimated useful lives of right-of-use assets are determined on the same
basis as those of property, plant and equipment. If the Company is reasonably certain to exercise a purchase option, the right-of-use
asset is depreciated over the underlying asset's useful life. Right-of-use assets are tested for impairment whenever there is any
indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in the statement of profit and
loss.
Payments associated with short-term leases of equipment and all leases of low-value assets are recognized on a straight-line basis as
an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
i) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial
period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are
expense in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with
the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing
costs.
j) Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity
of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the financial statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined
above, net of outstanding bank overdrafts (if any) as they are considered an integral part of the Company's cash management.
k) Earnings per share ('EPS')
Basic earnings per share is calculated by dividing the net profit or loss attributable to equity holder of the company (after deducting
preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly
paid up equity shares are treated as a fraction of an equity share to the extent that they are entitled to participate in dividends relative
to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period
is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares)
that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders of the
company and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential
equity shares.
l) Share Based Payments
Equity settled share-based payments to employees and other providing similar services are measured at fair value of the equity
instruments at grant date.
The fair value determined at the grant date of the equity-settled share-based payment is expense on a straight-line basis over the
vesting period, based on the Company's estimate of equity instruments that will eventually vest, with a corresponding increase in
equity. At the end of each reporting period, the Company revises its estimates of the number of equity instruments expected to vest.
The impact of the revision of the original estimates, if any is, recongised in Statement of Profit and Loss such that the cumulative
expenses reflects the revised estimate, with a corresponding adjustment to the shared option outstanding account.
No expense is recognised for options that do not ultimately vest because non market performance and/or service conditions have not
been met.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.
m) Inventories
I. Raw materials, components, stores and spares are valued at lower of cost and net realizable value. However, materials and other
items held for use in the production of inventories are not written down below cost if the finished products in which they will be
incorporated are expected to be sold at or above cost. Cost of raw materials, components and stores and spares is determined
on First in First Out (FIFO) Basis.
II. Work-in-progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials and
labour and a proportion of manufacturing overheads based on normal/actual operating capacity as per the Indian Accounting
standard 2.
III. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and
estimated costs necessary to make the sale.
n) Non-current Assets held for sale
The Company classifies non-current assets as held for sale if their carrying amounts will be recovered principally through a sale rather
than through continuing use of the assets and actions required to complete such sale indicate that it is unlikely that significant changes
to the plan to sell will be made or that the decision to sell will be withdrawn. Also, such assets are classified as held for sale only if the
management expects to complete the sale within one year from the date of classification.
Non-current assets classified as held for sale are measured at the lower of their carrying amount and the fair value less cost to sell.
o) Current versus non-current classification
The Company presents its assets and liabilities in the Balance Sheet based on current / non- current classification. An asset is treated
as current when it is:
a) expected to be realised or intended to be sold or consumed in normal operating cycle;
b) held primarily for the purpose of trading;
c) expected to be realised within twelve months after the reporting period; or
d) cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the
reporting period.
All other assets are classified as non-current. A liability is current when:
a) it is expected to be settled in normal operating cycle;
b) it is held primarily for the purpose of trading;
c) it is due to be settled within twelve months after the reporting period; or
d) there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The
Company has identified twelve months as its operating cycle.
p) Cash dividend
The Company recognises a liability to make cash or non-cash distributions to equity holders when the distribution is authorised and
the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorised when it is
approved by the shareholders. A corresponding amount is recognised directly in equity
q) Contingent Liabilities
Disclosure of contingent liability is made when there is a possible obligation arising from past events, the existence of which
will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of
the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources
embodying economic benefits will be required to settle or a reliable estimate of amount cannot be made.
r) Application of New IND AS Pronouncement Note on IND AS 7, IND AS 107 & IND AS 1
The company has applied following IND AS pronouncements pursuant to issuance of the Companies (Indian Accounting Standards)
Second Amendments Rules, 2025 with effect from 1st April, 2025.
i) IND AS 7 - Statement of Cash Flows and IND AS 107 - Financial Instruments: Disclosures:
The amendment requires disclosure of the effects of supplier finance arrangements on the Company's liabilities, cash flows
and exposure to liquidity risk. The Company has assessed the impact of such arrangements on the financial statements and
has provided requisite disclosures in accordance with the amendments. These amendments do not have any other impact
on the financial statements.
ii) IND AS 1 - Presentation of financial statements:
The amendments primarily impact classification of liabilities. In accordance with the amendments, the requirement of
classification of liabilities as non-current based on the existence of right to defer settlement for at least 12 months after the
reporting date has been revised to require that such right must exist, with substance, at the end of the reporting period. The
amendments also require assessment of compliance with covenants for the purpose of classification of liabilities, along with
enhanced disclosures. The company has assessed the impact of these amendments and has applied the revised requirements
for classification of liabilities as current or noncurrent including compliance with covenants, where applicable. These
amendments do not have any other impact on the financial statements.
Notes:
1. Loans are measured at amortised cost.
2. Loans are non-derivative financial assets which may or may not generate a fixed or variable interest income for the Company. The
carrying value may be affected by changes in the credit risk of the counterparties.
3. Refer Note 50 for fair value disclosure of financial assets and financial liabilities and for fair value hierarchy.
4. Refer Note 51 on risk management objectives and policies for financial instruments.
5. Refer Note 49 on disclosures of related party transactions.
Terms/Rights attached to the equity shares
The Company has a single class of equity shares having a face value of INR 10 each. 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 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.
On winding up 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.
Note on Fully Paid up Right Issue:
Refer note no. 57 on Fully Paid up Right Issue Shares
1) General reserve is created by the Company in earlier years pursuant to the provisions of the Companies Act,1956 where in certain
percentage of profits was required to be transferred to General Reserve before declaring dividends. As per Companies Act 2013,
the requirements to transfer profits to General Reserve is not mandatory. General Reserve is a free reserve available to the
Company.
2) Securities Premium is credited when shares are issued at premium. It is utilised in accordance with the provisions of the Act, to
issue bonus shares, to provide for premium on redemption of shares or debentures, equity related expenses like underwriting
costs, etc.
1. Aggregate secured borrowings as on 31st March, 2026 of ^ 625.33 lakhs.
2. Aggregate unsecured borrowings as on 31st March, 2026 is ^ Nil lakhs.
3. Borrowings are measured at amortised cost.
4. Company's fund and non-fund based working capital facilities availed from ICICI Bank aggregating to ^ 2,200.00 lakhs are secured to
the extent of ^ 2,200.00 lakhs by way of hypothecation (First Charge) on the whole of the current assets of the Company both present
and future in favour of the bank.
5. Company availed overdraft facility of ^ 400.00 Lakhs from SVC Bank by way of hypothecation against Dalamal Tower office premises
Mumbai, Kubera Chambers Pune and Nagpur Office Premises.
6. Refer Note 50 for fair value disclosure of financial assets and financial liabilities and fair value hierarchy.
7. For explanations on the company's Interest risk, foreign currency risk and liquidity risk management processes, refer to Note 51.
‘ • ' ; ' '
1. Also refer Note 21: Provisions (Non-current).
2. Employee benefits obligations
a. Gratuity
The Company provides gratuity for employees as per the Gratuity Act, 1972 and Company's Internal Gratuity Scheme.
Employees who are in continuous service for a period of five years are eligible for gratuity and as per new labour code fixed
term employees receive gratuity on pro-rata basis after just one year of continuous service. The amount of gratuity is payable
on retirement or termination whichever is earlier. The level of benefits provided depends on the member's length of service
and salary on retirement / termination.
b. Compensated absences
The leave obligation covers the Company's liability for earned leaves.
3. For detailed disclosure, refer Note 38.
38. Disclosure pursuant to Ind AS 19 "Employee Benefits"
a) Defined contribution plans:
The Company has a defined benefit gratuity plan for its employees. The gratuity plan is governed by the Payment of Gratuity Act, 1972.
Under the Act, every employee who has completed five years of service is entitled to specific benefit and as per new labour code fixed term
employees receive gratuity on pro-rata basis after just one year of continuous service. The level of benefits provided depends on the
employee's length of service and salary at retirement age. Every employee who has completed five years or more of service gets a gratuity
on departure at 15 days salary (last drawn) for each completed year of service as per the provisions of the Payment of Gratuity Act, 1972.
b) Defined benefit plans:
The Company has a defined benefit gratuity plan for its employees. The gratuity plan is governed by the Payment of Gratuity Act, 1972.
Under the Act, every employee who has completed five years of service is entitled to specific benefit and as per new labour code fixed term
employees receive gratuity on pro-rata basis after just one year of continuous service. The level of benefits provided depends on the
employee's length of service and salary at retirement age. Every employee who has completed five years or more of service gets a gratuity
on departure at 15 days salary (last drawn) for each completed year of service as per the provisions of the Payment of Gratuity Act, 1972.
K :
The above sensitivity analysis is based on a change in assumption while holding all other assumptions constant. In practice, this is unlikely to
occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to
significant actuarial assumptions the same method (present value of defined benefit obligation calculated with the Projected Unit Credit
Method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The method and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
a) Risk Exposure
Through its defined benefit plan, the Company is exposed to a number of risks, the most significant of which are detailed below:
i. Discount rate risk:
Variations in the discount rate used to compute the present value of the liabilities may see small, but in practise can have a
significant impact on the defined benefit liabilities.
ii. Future salary escalation and inflation risk:
Since price inflation and salary growth are linked economically, they are combined for disclosure purposes. Rising salaries will
often result in higher future defined benefit payments resulting in a higher present value of liabilities especially unexpected salary
increases provided at management's discretion may lead to uncertainties in estimating this increasing risk.
iii. Asset-Liability mismatch risk:
Risk which arises if there is a mismatch in the duration of the assets relative to the liabilities. By matching duration with the
defined benefit liabilities, the company is successfully able to neutralize valuation swings caused by interest rate movements.
b) Funding policy:
There is no compulsion on the part of the Company to prefund the liability of the Plan. The Company's philosophy is to fund these benefits
based on its own liquidity and the level of underfunding of the plan.
c) Compensated Absence
The company provides for accumulation of compensated absences by its employees. The employees can carry forward a portion of the
unutilised compensated absences and utilise it in future periods to receive cash in lieu thereof as per company policy. The company records
an obligation for compensated absences in the period in which the employee renders the service that increases this entitlement. The total
liability recorded by the company towards this benefit As at 31st March, 2026 is ^ 65.56 Lakhs 31st March, 2025: ^ 81.57 Lakhs.
43. Disclosure pursuant to Indian Accounting Standard (Ind AS) 108 "Operating Segment"
"Based on the guiding principle given in the Indian Accounting Standard (Ind AS) 108 "Operating Segment"" the company's Primary Segments
as following.
1) Consultancy and Training
2) Project Services
3) Wind Power Generation
The above business segments have been identified considering as
a) The nature of the products/ operation
b) The related risks and returns
c) The internal financial reporting systems of the organisation
The Segment revenue, results, assets and liabilities have been accounted for on the basis of their relationship to the operating activities of
the segment and amounts allocated on a reasonable basis.
Note: Wind power generation business is subject to Seasonal variations in winds, hence the results for the year are not necessarily
comparable with the results of the previous years.
Refer: Segment report"
d. Other Information
Nature of leasing activity
The Company has leases for Office Spaces. Certain lease contracts provide for payments to increase each year by inflation or and in
others to be reset periodically to market rental rates. While other lease contracts comprise only fixed payments over the lease terms.
Extension and termination options
The use of extension and termination options gives the Company added flexibility in the event it has identified more suitable premises
in terms of cost and/or location or determined that it is advantageous to remain in a location beyond the original lease term. An option
is only exercised when consistent with the Company's regional markets strategy and the economic benefits of exercising the option
exceeds the expected overall cost. Existing lease agreement do not have any extension option.
II) Where the Company is a lessor:
a. Finance Lease
Company does not have any finance lease arrangement.
b. Operating Lease
Operating leases, in which the Company is the lessor, mainly relate to Office premises with lease term ranging from 01 to 16
years.
48. Disclosure pursuant to Ind AS 115 "Revenue from Contracts with Customers
a. Disaggregation of revenue
The company disaggregates the revenue from customers by types of goods or services rendered (example, major product Liens),
geography, market or type of customer (for example, government and non-government), type of contract (e.g. fixed price and time-and-
material contracts), contract duration. The Company believe that this disaggregation best depicts how the nature, amount, timing and
uncertainty of our revenues and cash flows are affected by industry, market and other economic factors.
51. Financial instruments risk management objectives and policies
The Company's principal financial liabilities comprise of borrowings, trade and other Payables. The main purpose of these financial liabilities
is to finance the company's operations. The company's principal financial assets include trade and other receivables, investments and cash
and cash equivalents that it derives directly from its operations.
The Company's activities expose it to market risk including currency risk, interest rate risk and other price risk), credit risk, and liquidity risk.
Company's overall risk management focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on
its financial performance. The Company may use derivatives for hedging purposes. However, derivatives are not used for trading or as
speculative instruments.
a. Market risk
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial
instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates,
commodity prices, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all
market risk sensitive financial instruments including investments and deposits, foreign currency receivables, Payables and borrowings.
i. Foreign exchange rate:
The company is exposed to foreign exchange risk mainly through its capital purchases from overseas suppliers in various foreign currencies.
The company evaluates exchange rate exposure arising from foreign currency transactions and the company follows established risk
management policies, including when required, use of derivatives like foreign exchange forward contracts to hedge exposure to foreign
currency risk, where the economic conditions match the company's policy.
ii. Interest rate risk:
The Company's exposure to changes in interest rates relates primarily to the Company's outstanding floating rate debt. The Company's
significant outstanding debt in local currency and foreign currency are on floating rate basis and linked to like PLR, MCLR and LIBOR. The
Company does not hedge a portion of these risks by way of derivatives instruments like Interest rate swaps and currency swaps.
b. Credit Risk:
Credit risk arises when a customer or counterparty does 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) and from its
financing/investing activities, including deposits with banks, mutual fund investments, foreign exchange transactions and financial
guarantees. The Company has no significant concentration of credit risk with any counterparty.
Trade receivables
Majority of the Company's transactions are earned in cash or cash equivalents. The Trade Receivables comprise mainly of receivables from
Insurance Companies, Corporate customers, Public Sector Undertakings, State/Central Governments. The Insurance Companies are required
to maintain minimum reserve levels and the Corporate Customers are enterprises with high credit ratings. Accordingly, the Company's
exposure to credit risk in relation to trade receivables is considered low. Before accepting any new credit customer, the Company uses an
internal credit scoring system to assess the potential customer's credit quality and defines credit limits by customer. Limits and scoring
attributed to customers are reviewed annually. The outstanding with the debtors is reviewed periodically.
Total Trade receivable as on 31st March, 2026 is ^ 2,468.24 lakhs (31st March, 2025 - ^ 2,417.74 lakhs).
The Company has a large customer base and thus has no concentration of credit risks on a single customer.
As per simplified approach, the Company makes provision of expected credit losses on trade receivables using a provision matrix to mitigate
the risk of default payments and makes appropriate provision at each reporting date wherever outstanding is for longer period and involves
higher risk.
As per policy receivables are classified into two buckets based on the overdue period of more than one year & less than one year. Total
Balance outstanding for more than one year is Rs. 639.95 lakhs and provision taken against same is Rs. Nil lakhs. Company expects to recover
the differential amount as per their communication with customers.
Corporate / Financial Guarantees
The Company has given corporate guarantees as on 31st March, 2026 amounting to ^ 11,266.00 lakhs (31st March, 2025 ^ 11,266.00 lakhs)
and finance guarantee as on 31st March, 2026 of ^ 145.19 lakhs (31st March, 2025 ^ 145.19 lakhs) in favour of its Subsidiaries.
iii. Liquidity risk management:
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. Prudent
liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed
credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses,
company maintains flexibility in funding by maintaining availability under committed credit Liens.
Management monitors rolling forecasts of the Company's liquidity position (comprising the undrawn borrowing facilities below) and cash
and cash equivalents on the basis of expected cash flows. This is carried out in accordance with practice and limits set by the Company. In
addition, the company's liquidity management policy involves projecting cash flows and considering the level of liquid assets necessary to
meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing
plans.
52. Capital management
The capital management objective of the Company is to (a) maximise shareholder value and provide benefits to other stakeholder and (b)
maintain an optimal capital structure to reduce the cost of capital.
For the purposes of the Company's capital management, capital includes issued equity share capital, share premium and all other equity.
In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders, return capital to
shareholders, issue new shares or sell assets to reduce debt. The Company monitors capital using debt-equity ratio, which is total debt less
liquid investments and bank deposits divided by total equity.
Note -
1. Total current assets for FY 2025-26 Rs. 6,104.22 Lakhs (Previous year FY 2024-25 Rs. 3075.92 Lakhs) & Total Current liabilities in FY 2025¬
26 Rs. 2,508.76 Lakhs (Previous year FY 2024-25 Rs. 2,127.22 Lakhs). Increase in current ratio is due to increase in total current assets
during the FY 2025-26.
2. Cost of purchase and other expenses for the year FY 2025-26 Rs. 3,162.21 Lakhs (Previous year FY 2024-25 Rs. 2,281.55 Lakhs) & Average
trade payable in FY 2025-26 Rs. 698.70 Lakhs (Previous year FY 2024-25 Rs. 801.37 Lakhs). Increase in trade payable turnover ratio is
due to Increase in cost of purchase and other expenses & decrease in average trade payable during the FY 2025-26.
3. Revenue from operations for the year FY 2025-26 Rs. 6,012.05 Lakhs (Previous year FY 2024-25 Rs. 5,119.62 Lakhs) & working capital in
FY 2025-26 Rs. 3,595.46 Lakhs (Previous year FY 2024-25 Rs. 948.70 Lakhs). Decrease in net working capital turnover ratio is due to
increase in revenue from operations and increase in working capital during the FY 2025-26.
4. Cost of goods sold for the year FY 2025-26 Rs. 851.68 Lakhs (Previous year FY 2024-25 Rs. 434.01 Lakhs) & Average inventory in FY 2025¬
26 Rs. 111.68 Lakhs (Previous year FY 2024-25 Rs. 98.54 Lakhs). Increase in inventory turnover ratio is due to increase in cost of goods
sold and increase in average inventory during the FY 2025-26.
54. Tuition fees received from MKCL
MITCON is a Training provider to Maharashtra Knowledge Corporation Limited (MKCL) for their MS-CIT and other courses. Fees of these
training courses are directly collected by MKCL. On completion of these training programmes Tuition fees are shared by MKCL with the
Company as per the Terms of Agreement. However, as the Company's share of fees is not independently determinable by the Company prior
to actual receipt thereof, these are accounted for on accrual basis.
56(a). Employee Share Based Payment Plans
During the year ended 31st March, 2022, the Company approved MITCON's Employee Stock Option Plan 2021 ("ESOP 2021 / Plan"). The
plan was approved by the Nomination and Remuneration Committee in its meeting held on 22nd September 2021 for grant and allot from
time to time, in one or more tranches, not exceeding 670,000 (Six Lakhs Seventy Thousand Only) options under the ESOP 2021, to or to
the benefit of such person(s) who are in the permanent employment of the Company and its Subsidiary Company/ies working in India, and
to the Directors of the Company, whether whole-time or not, and its Subsidiary Company(ies) and to such other persons, other than
Directors holding directly or indirectly more than 10% of the outstanding Equity Shares of the Company, on a pre-determined date in
MITCON Group, convertible into not more than 670,000 (Six Lakhs Seventy Thousand Only) fully paid-up Equity Shares in the Company in
aggregate of face value of INR 10/- each, at such price or prices, in one or more tranches and on such terms and conditions, as may be
determined by the Board in accordance with the provisions of the ESOP 2021 and in due compliance with the applicable laws and
regulations. The Options granted under ESOP 2021 would vest not earlier than one year and not later than five years from the date of grant
of such Options.
Further the plan was approved by the members vide Postal Ballot Notice dated 31st October 2021. Company has received in-principle
approval for listing of Shares to be issued under the ESOP 2021 on 20th April, 2022 from National Stock Exchange of India.
During FY 2022-23, the Nomination and Remuneration Committee in its meeting held on 26th May 2022 approved to grant stock options
to 168 employees ("Option Grantees") at an Exercise Price of INR 87.20, exercisable into equal number of Equity Shares of the Company
of face value of INR 10/- (Rupees Ten) each fully paid-up on payment of the requisite exercise price to the Company on such terms and
conditions of the ESOP scheme.
Applicable Disclosures in connection with the ESOP 2021 as per SEBI (Share Based Employee Benefits) Regulations, 2014 and Section 62 of
the Companies Act, 2013 read with Rule 12(9) of Companies (Share Capital and Debenture) Rules, 2014 are hosted on the website of the
Company and can be viewed at https://www.mitconindia.com/investors/
Further as on 31st March, 2024, since the options were partially exercised so relevant disclosures in terms of accounting standards as
applicable are given in Note 16(d)
Further as on 31st March, 2025, since the options were partially exercised so relevant disclosures in terms of accounting standards as
applicable are given in Note 16(d)
During the year ended as on 31st March 2025, Pursuant to the provisions of the Securities and Exchange Board of India (Share Based
Employee Benefits and Sweat Equity) Regulations 2021, Companies Act 2013 and "MITCON's Employee Stock Option Plan 2021" ('ESOP
2021').
The Company granted 1,78,250 stock options on 7th November 2024 at an exercise price of INR 87.20 per stock option to the Employees
of the Company and its Subsidiary Company/ies under ESOP 2021. Options granted under ESOP 2021 would vest not earlier than one year
and not later than five years from the date of grant of such Options. The Exercise Period shall be five years from the date of grant of
Options.
56(b). The Employee Stock Option Plan (ESOP)2021, issued by the Company vested during the year /period and partly paid Right issue of Equity
Shares have a potential dilutive effect on Earning per Share (EPS). Hence, they have been considered for computing diluted Earnings Per
Share during the year/ period.
57. Note on Fully Paid up Right issue
The Right issue proceeds received during the year have been fully utlised for Rs.2268.55 lakhs as at 31st March 2026, Thus the total right
issue proceeds of Rs.3074.40 lakhs (Rs.805.85 during FY 2024-25) have been fully utilised. There is no deviation in the use of proceeds
from the object stated in the offer document.
58(a). During the year ended 31st March, 2026, MITCON Water Ltd. incorporated on 5th September 2025 and MITCON Soil Health Ltd.
incorporated on 9th September 2025 as wholly owned subsidiaries with authorised and paid up capital of Rs.1 Lakh each. Paid up capital
has been introduced on 27th October 2025. The Board approved the incorporation of companies on 28th July 2025.
58(b). During the year ended 31st March, 2026, a wholly owned subsidiary company namely MITCON Sun Power Ltd. has sold 23% of its stakes
to Valtustech India Private Limited in its wholly owned subsidiary namely MITCON Impact Asset Management Private Ltd approved by the
Board on 10th November 2025. Post sale, shareholding of MITCON Sun Power Ltd. is 77%.
59. New project acquisition
During the year ended 31st March, 2026, MITCON Consultancy & Engineering Services Limited, acquired 49% stake in MINVEN Group SPVs
viz., MINVEN Solar 02 Private Limited and MINVEN Solar 03 Private Limited for consideration of Rs. 86,400/- each, formed for implementing
an aggregate of 32 MW Solar Power Project under the Mukhyamantri Saur Krushi Vahini Yojana 2.0 - Scheme launched for implementation
of feeder level solarisation under component C of PM-KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan) Scheme in
Maharashtra. The acquisition of MINVEN approved by Board on 26th March 2025. The share purchase agreement approved by Board on
16th March 2026. The financials of companies consolidated as per IND as 28 using equity method.
60. Impact of New Labour Code
The Government of India has consolidated 29 existing labour legislations into a unified framework comprising four labour codes viz the Code
on Wages, 2019, the Code on Social Security, 2020, the Industrial Relations Code, 2020, and the Occupational Safety, Health and Working
Conditions Code, 2020 (collectively referred to as the "Codes"). The Codes have been made effective from November 21, 2025. The Ministry
of Labour & Employment published draft Central Rules and FAQs to enable assessment of the financial impact due to changes in regulations.
The incremental financial impact of these changes, assessed by the Company, on the basis of the information available, consistent with the
guidance provided by the Institute of Chartered Accountants of India, has been provided in the financial statement as at 31st March 2026.
There is no material impact.
Impact of Labour Codes On November 21, 2025, the Government of India notified provisions of 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, ('Labour
Codes') which consolidate twenty-nine existing labour laws into a unified framework governing employee benefits during employment and
post-employment. The Labour Codes, amongst other things introduces changes, including a uniform definition of wages and enhanced
^ benefits relating to leave. The Company continues to monitor the developments pertaining to Labour Codes and will evaluate impact if any
on the measurement of the employee benefits liability. There is no material impact
61. Additional Regulatory Information Required by Schedule III to The Companies ACT, 2013
(i) The Company does not have any benami property held in its name. 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.
(ii) The Company has not been declared wilful defaulter by any bank or financial institution or other lender or government or any
government authority.
(iii) The Company has complied with the requirement with respect to number of layers as prescribed under section 2(87) of the Companies
Act, 2013 read with the Companies (Restriction on number of layers) Rules, 2017.
(iv) Utilisation of borrowed funds and share premium.
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.
II. 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.
(v) There is no income surrendered or disclosed as income during the year in tax assessments under the Income Tax Act, 1961 (such as
search or survey), that has not been recorded in the books of account.
(vi) The Company has not traded or invested in crypto currency or virtual currency during the year.
(vii) The Company does not have any charges or satisfaction of charges which is yet to be registered with Registrar of Companies beyond
the statutory period.
62. The Trade Receivables, Trade Payables and Loans are subject to balance confirmations and reconciliations.
63. None of the directors are disqualified under section 164 of the companies Act 2023 to be appointed as Director.
64. Previous year figure have been regrouped / reclassified / rearranged / restated wherever necessary to confirm with current year's
classification / disclosure.
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