35.2 Commitments
a) Capital Commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for INR 1515.927 Lakhs (As at 31st March
2024 : INR 102.09 Lakh)
b) Financial Guarantee
Term Deposits with Bank of India, Janpath Branch New Delhi amounting to INR 85.43 lakhs (As at 31st March 2024 : INR 315.09 lakhs), Term
Deposit with Bank of Baroda, Janpath Branch, New Delhi amounting to INR 140.82 lakhs ( As at 31st March 2024: INR 132.46 lakhs) and
Term Deposit with DBS Bank India Limited, Sector 63,Gautam Budh Nagar, Noida amounting to INR 410.00 lakhs (As at 31st March 2021:
INR 255.00 lakhs) are pledged with respective Banks as Margin on Bank Guarantees, Letter of Credit and Foreign bills purchased by them.
37 CAPITAL MANAGEMENT
The Company's policy is to maintain a strong capital base so as to ensure that the Company is able to continue as going concern to
sustain future development of the business. The capital structure of the Company is based on management's judgement of its strategic
and day-to-day needs with a focus on total equity so as to maintain investor, creditors and market conditions. The policy is also adjusted
based on underlying macro-economic factors affecting business environment, financial and market conditions. Its guiding Principles
are as below:-
i) Maintenance of financial strength to ensure the highest ratings;
ii) Ensure financial flexibility and diversify sources at financing;
iii) 'Manage Company exposure in forex to mitigate risks to earnings;
iv) 'Leverage optimally in order to maximum shareholders returns while maintaining strength and flexibility of the balance sheet.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which
maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to
fair value an instrument are observable, the instrument is included in level 2. In the case of Derivative contracts, the Company has valued
the same using the forward exchange rate as at the reporting date.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
b) Calculation of fair values:
i) Financial assets and liabilities measured at fair value as at Balance Sheet date:
The fair values of the derivative financial instruments has been determined using valuation techniques with market observable inputs.
The models incorporate various inputs including the credit quality of counter-parties and foreign exchange forward rates.
ii) Other financial assets and liabilities:-
-Cash and cash equivalents , trade receivables, other financial assets (except derivative financial instruments), trade payables, and other
financial liabilities (except derivative financial instruments) have fair values that approximate to their carrying amounts due to their
short-term nature.
-Loans have fair values that approximate to their carrying amounts as it is based on the net present value of the anticipated future cash
flows using rates currently available for debt on similar terms, credit risk and remaining maturities.
39 FINANCIAL RISK MANAGEMENT
Risk Management framework and policies
The Company's business activities are exposed to a variety of financial risks, namely liquidity risk, market risks and credit risk. The
Company's senior management has the overall responsibility for establishing and governing the Company's risk management framework.
The Company has constituted a Risk Management Committee, which is responsible for developing and monitoring the Company's risk
management policies. The Company's risk management policies are established to identify and analyse the risks faced by the Company,
to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in
the policy accordingly. The key risks and mitigating actions are also placed before the Audit Committee of the Company.
The Company has exposure to the following risks arising from financial instruments:
A) Credit Risk
B) Liquidity Risk
C) Market Risk
D) Interest Rate Risk
The table below explains the sources of risk which the entity is exposed to and how the entity manages the risk and the
impact in the financial statements:-
A) Credit Risk
Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the
Company. Credit Risk arises from credit exposures from customers, cash and cash equivalent with banks, security deposits
and loans.
The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics
of the customer and including the default risk of the industry, also has an influence on credit risk assessment. Credit risk is
managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers
to which the Company grants credit terms in the normal course of business. The Company uses an allowance matrix to measure
the expected credit losses of trade receivables. The loss rates are computed using a 'roll rate' method based on the probability of
receivable progressing through successive stages of delinquency to write off.
The following table provides information about the exposure to credit risk and ECLs for trade receivables:
B) Liquidity Risk
Liquidity Risk is the risk that a company could encounter if it faces difficulty in meeting the obligations associated with financial liabilities
by delivering cash and other financial asset or the risk that the Company will face difficulty in raising financial resources required to fullfill
its commitments. The Company's exposure to liquidity risk is very minimal as it has a prudent liquidity risk management process in place
which ensures maintaining adequate cash and marketable securities to pay its liabilities when they are due. To ensure continuity of
funding , the Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities , by
continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
C) Market Risk
The Company operates internationally and a major portion of the business is transacted in several currencies. Consequently the
company is exposed to foreign exchange risk through its sales and services in the US and elsewhere, and purchases from the overseas
suppliers in various foreign currencies. The Company holds derivative financial instruments such as foreign exchange forward contract
to mitigate the risk of changes in exchange rates on foreign currency exposure. The exchange rate between rupee and foreign currency
has changed substantially in recent years and may fluctuate substantially in future. Consequently ,the results of the Company's operation
are adversely affected as the rupee appreciates/ depreciates against these currencies.
47 The Company's operations predominantly comprises of only one segment- Pumps & Spares, therefore operationally segment reporting
does not apply.
48 During the financial year, the Board of Directors of the Company at its meeting held on 17th May 2025 had approved payment of an Final
dividend at rate of INR 0.80 per equity share of face value INR 1/- each on 6,28,15,220 equity shares.
49 The Company has not entered into any transactions with the Companies struck off under section 248 of the Companies Act 2013 or
Section 560 of Companies Act 1956.
50 There is no Immovable Properties, Title deeds of those are not held in the name of the Company.
51 The Company neither have any Benami property, nor any proceeding has been initiated or pending against the Company for holding any
Benami property under the Benami Transactions (Prohibition) Act,1988 and rule made thereunder.
52 The Company does not have any charges or satisfaction which is yet to be registered with Registrar Of Companies (ROC) beyond the
statutory period.
53 The company is not declared wilful defaulter by any bank or financial institution or other lender.
54 The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed
as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions
of the Income Tax Act, 1961.
55 The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year ended 31 March 2025 and 31
March 2024.
56 No revaluation of Property, Plant & Equipment & Intangible assets has been carried out during the year.
57 The subsidiaries are within the limit prescribed under clause 87 of Section 2 of the Act read with Companies (Restriction on
number of layers) Rule, 2017.
58 Previous Year's figures have been re-grouped/re-arranged wherever necessary to render them comparable with the current year's figures
and better disclosure requirements.
59 Figures have been rounded off to the INR Lakhs. Amounts appearing as zero "0” in financial are below the rounding off norm adopted by
the Company
As per our report of even date.
For and on behalf of the Board
For R.N Marwah & Co LLP (HARISH CHANDRA GUPTA) (ANURAG GUPTA)
Chartered Accountants Chairman & Managing Director Jt. Manging Director
(Registration No.0001211N/N500019) (DIN : 00334405) (DIN : 00334160)
SUNIL NARWAL (PRADEEP JAIN) (ASHWANI K VERMA)
PARTNER Chief Financial Officer Company Secretary
Membership No.511190 (PAN : AAEPJ6827A) (M.No : F9296)
PLACE: DELHI
DATE : 17.05.2025
|