1.9 Provisions
Provisions for claims and service warranties are
recognised when the Company has a present legal or
constructive obligation as a result of past events, it is
probable that an outflow of resources will be required
to settle the obligation and the amount can be reliably
estimated. Provisions are not recognised for future
operating losses.
Where there are a number of similar obligations, the
likelihood that an outflow will be required in settlement
is determined by considering the class of obligations as
a whole. A provision is recognized even if the likelihood
of an outflow with respect to any one item included in the
same class of obligations may be small.
Provisions are measured at the present value of
management's best estimate of the expenditure required
to settle the present obligation at the end of the reporting
period. Provisions are discounted only if the impact of
discounting is considered material. The discount rate
used to determine the present value is a pre-tax rate that
reflects current market assessments of the time value of
money and the risks specific to the liability. The increase
in the provision due to the passage of time is recognised
as interest expense.
1.10 Share based payments
Employees of the Company receive remuneration in the
form of Share-based Payments in consideration of the
services rendered. Under the equity settled share-based
payment, the fair value on the grant date of the award
given to employees is recognised as 'employee benefit
expense' with a corresponding increase in equity over the
vesting period. The fair value of the options at the grant
date is calculated by an independent valuer basis 'Black
Scholes model'.
The total amount to be expensed is determined by
reference to the fair value of the options granted:
(i) including any market performance conditions (for
example, the entity's share price)
(ii) excluding impact of any service and non-market
performance vesting conditions
(iii) including the impact of any non-vesting conditions
(e.g the requirement for employees to save or hold
shares for a specific period of time)
The total expense is recognised over the vesting period,
which is the period over which all of the specified vesting
conditions are to be satisfied. At the end of each period,
the Company revises its estimates of the number of
options that are expected to vest based on the non-market
vesting and service conditions. The Company recognises
the impact of the revision to original estimates, if any, in
profit or loss, with a corresponding adjustment to equity.
When shares are forfeited due to a failure by the employee
to satisfy the service conditions, any expenses previously
recognised in related to such shares are reversed
effective from the date of forfeiture.
1.11 Revenue Recognition
The Company manufactures and sells a range of Pumps,
Motors and related components.
Revenue from contracts with customers is recognised
when control of the goods or services are transferred to
the customer at an amount that reflects the consideration
to which the Company expects to be entitled in exchange
for those goods or services. The Company has concluded
that it is the principal in its revenue arrangements,
as it typically controls the goods or services before
transferring them to the customer.
The Company considers the terms of the contract in
determining the transaction price. The transaction
price is based upon the amount the Company expects to
be entitled to in exchange for transferring of promised
goods and services to the customer after deducting
discounts, volume rebates etc. The Company collects
goods and services tax (GST) on behalf of the government
and, therefore, these are not economic benefits flowing
to the Company. Hence, they are excluded from revenue.
Revenue is only recognised to the extent that it is highly
probable that a significant reversal will not occur.
Revenue from sale of goods is recognised at the point
in time when control of the product is transferred to
the customer, which is generally determined when
title, ownership, risk of obsolescence and loss pass
to the customer and the Company has the present
right to payment, all of which occurs at a point in time
upon shipment or delivery of the product or customer
acceptance, as per the respective terms agreed with the
customer. The Company considers freight activities as
costs to fulfil the promise to transfer the related products
and the payments by the customers for freight costs are
recorded as a component of revenue.
The Company provides installation and maintenance
services on its certain products at the time of sale in
terms of the contract with customers. These installation
and maintenance services are sold together with
the sale of product. Each component is treated as a
separate performance obligation because the promises
to transfer the product and to provide the installation
and maintenance services are capable of being distinct.
The transaction price is allocated based on stand-alone
selling prices, determined using observable prices or
estimated using the cost-plus margin method. Revenue
from the sale of product is recognized at the point in time
when control is transferred to the customer. Installation
revenue is recognized upon rendering of installation
service. Maintenance service revenue is recognized on a
straight line basis over the contracted period, reflecting
the continuous transfer of service to the customer.
The Company typically provides warranties for general
repairs of defects that existed at the time of sale, as
required by law. These assurance-type warranties are
accounted for under Ind AS 37 Provisions, Contingent
Liabilities and Contingent Assets. Refer to the accounting
policy on warranty provisions in 1.9 above.
2. Critical estimates and judgements
The preparation of standalone financial statements
requires the use of accounting estimates which, by
definition, will likely differ from the actual results.
Management also needs to exercise judgement in
applying the Company's accounting policies.
This note provides an overview of the areas that involved
a higher degree of judgement or complexity, and of
items which are more likely to be materially adjusted
due to final outcomes deviating from estimates and
assumptions made. Detailed information about each of
these estimates and judgements is included below as
well as in relevant notes together with information about
the basis of calculation for each affected line item in the
financial statements.
Estimates and judgements are continually evaluated.
They are based on historical experience and other factors,
including expectations of future events that might have a
financial impact on the Company and that are believed to
be reasonable under the circumstances.
The following paragraphs explain areas that are
considered more critical, involving a higher degree of
judgement and complexity.
• Estimation of useful life of Property Plant &
Equipment (Refer note 1.2, 3)
The charge in respect of periodic depreciation is
derived after determining an estimate of an asset's
expected useful life and the expected residual value
at the end of its life. The useful lives and residual
values of the Company's assets are determined by
management at the time the asset is acquired and
reviewed periodically, including at each financial year
end and any change is considered on prospective
basis. The lives are based on historical experience
with similar assets as well as anticipation of future
events, which may impact their life, such as changes
in technology.
• Estimate of expected credit loss (ECL) on trade
receivables (Refer note 1.7, 11 and 46)
The impairment provisions for trade receivables
are based on a provision matrix which considers
assumptions about risk of default and expected
loss rates. The Company uses judgement in making
these assumptions and selecting the inputs to the
impairment calculation, based on Company's past
history, credit risk, existing market conditions as
well as forward looking estimates at the end of each
reporting period.
• Provision for warranty (Refer note 1.9, 20 and 25)
The Company gives warranties for its products,
undertaking to repair or replace the product that fail
to perform satisfactory during the warranty period.
Provision made at the year-end represents the
amount of expected cost of meeting such obligations
of rectification / replacement which is based on
the historical warranty claim information as well
as recent trends that might suggest that past cost
information may differ from future claims. Factors
that could impact the estimated claim information
include the success of the Company's productivity
and quality initiatives. The closing warranty provision
is bifurcated into current and non-current based on
the past settlement trend.
• Revenue recognition in respect of contracts with
multiple performance obligations (Refer note 1.11
and 28)
The Company's revenue recognition process for
contracts with multiple performance obligations
requires management to exercise significant
judgment in several areas. Management identifies
each distinct performance obligation within a
contract and allocates the transaction price to each
based on their relative standalone selling prices.
When standalone selling prices are not directly
observable, management estimates them using a
combination of market data, expected costs, and
profit margins. The assessment of when performance
obligations are satisfied, and thus when revenue is
recognized, involves further judgment, particularly
for services delivered over time. Changes in these
estimates and judgments could significantly affect
the timing and amount of revenue recognized in the
financial statements.
Notes:
1 Inventories are hypothecated with the bankers against term loans and working capital limits at. [Refer note 22(b)]
2 Valued at lower of cost and net realisable value.
3 Write-downs of inventories to net realisable value amounted to Rs. Nil (Previous year: Rs. Nil). These were recognised
as an expense during the year and included in 'changes in inventories of finished goods and work-in-progress' in the
Standalone Statement of Profit and Loss.
4 Provision for slow moving and obsolete inventory amounted to Rs. Nil (Previous year: Rs. 1.72 crores), These were
recognised as an expense during the year and included in 'Cost of materials consumed' in the Standalone Statement of
Profit and Loss.
16.1 Terms and rights attached to the equity shares:
(i) The Company has only one class of equity shares having a par value of Rs. 10/- per share.
(ii) Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees.
The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual
General Meeting except in case of interim dividend.
(iii) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of
the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity
shares held by the shareholders.
16.2 1,80,200 Shares out of Issued shares are forfeited by the company which has not been reissued.
16.6 The Company is a public limited Company and does not have a holding Company.
16.7 During the year, the Treasury committee at its meeting held on July 05, 2025 has approved the allotment of 3,187,365 Equity
Shares of Rs. 10/- each through Qualified Institutional Placement (QIP) under the provisions of Chapter VI of the Securities and
Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended and section 42 and
62 of the Companies Act, 2013, including the rules made thereunder as amended, to the eligible Qualified Institutional Buyers,
at the issue price of Rs. 918.00 per Equity Share (including a premium of 908.00 per Equity Share), aggregating to Rs. 292.60
crores.
16.8 The bonus issue in the ratio of 5:1 i.e. 5 (five) bonus equity shares of Rs. 10 each for every 1 (one) fully paid-up equity share held
was approved by the shareholders of the Company on November 09, 2024. Subsequently, on November 26, 2024, the Company
allotted 100,175,500 equity shares to the shareholders who held equity shares as on the record date of November 25, 2024.
Consequently, Rs. 100.18 crores (representing par value of Rs. 10 per share) was transferred from securities premium to the
share capital.
16.9 There were no shares bought back nor allotted under any contract without receiving payment in cash during the five years
immediately preceding the year ended March 31, 2026.
16.10Shares reserved for issue under options
The company has reserved equity shares for issue under Employee Stock Option Scheme, Refer note 42 Share Based Payments
for details of Employee Stock Option Scheme.
Brief descriptions of items of Other Equity are given below:
Securities premium:
Securities premium is used to record the premium on issue of shares. The reserve is to be utilised in accordance with the
provisions of the Companies Act, 2013.
General reserve:
The Company has created this reserve by appropriation of certain amount out of the profit in earlier years. The
accumulated amount in this reserve is a free reserve.
Retained earnings:
Amount of retained earnings represents accumulated profit and losses of the Company as on reporting date. Such profits
and losses are after adjustment of payment of dividend, transfer to any reserves as statutorily required, actuarial gain/
loss arising out of remeasurement of defined benefit plans. The accumulated amount in this reserve is available for
distribution of dividends.
Capital reserve:
The Company has created capital reserve pursuant to past mergers and acquisitions.
Share based payment reserve:
The share based payment reserve is used to recognise the grant date fair value of options issued to employees under
Shakti Pumps (India) Limited Employee Stock Option Plan 2024.
Foreign currency translation reserve:
Exchange differences arising on translation of the foreign operations are recognised in other comprehensive income
as described in accounting policy and accumulated in a separate reserve within equity. The cumulative amount is
reclassified to profit or loss when the net investment is disposed of.
(a) Interest rate of the above loans other than related party are in the range between 4.41% to 9.80% (Previous year: 5.62% to
9.85%). Interest on loan from related party range between 7.95 % to 12%.
(b) These facilities are secured by way of :
(i) First pari passu charge on both present and/or future, current assets including inventories and receivables.
(ii) Second pari passu charge on both present and/or future, movable and immoveable property, plant and equipment.
(c) Borrowings are subsequently measured at amortised cost and therefore accrued interest is included in the carrying
amount of the respective borrowing.
(d) The facilities other than loan from related party have terms of repayment ranging between 3-6 months. Certain WCDL
facilities and loan from related party are repayable on demand.
(e) Supplier finance arrangements
Supplier finance arrangements are characterized by one or more finance providers offering to pay amounts that an entity
owes its suppliers and the entity agreeing to pay according to the terms and conditions of the arrangements at the same
date as, or a date later than, when suppliers are paid. These arrangements provide the entity with extended payment
terms, or the entity's suppliers with early payment terms, compared to the related invoice payment due date.
The company has entered into a reverse factoring arrangement for its trade payables to micro, small and medium
enterprises (MSME suppliers or "sellers"). For this purpose, the Company, as "buyer," has executed a master agreement
with A. Treds Limited, Mynd Solutions Private Limited and ICICI Bank Limited (the "Exchange") for supplier financing. The
Exchange operates the platform under the brand name "lnvoicemart", "Mlxchange" and "ICICI Bank" (together referred to
as the "Portal"). It acts as an intermediary that connects the buyer, the seller, and participating financiers on a common
platform for the factoring or reverse factoring of invoices. The company initiates each transaction by uploading the
payable invoice and relevant supporting documents on the Portal, where financiers (banks and other financial institutions)
bid to provide financing. The primary objective of this facility is to ensure MSME suppliers are paid by their statutory due
dates while enhancing the company's working capital position through access to financing.
Key terms and conditions of the arrangement are:
(i) The company decides which invoices will be financed.
(iv) There were no material business combinations or foreign exchange differences that would affect the liabilities under
the supplier finance arrangement in either period.
(v) Amounts are reclassified from trade payables to borrowings once those trade payables become part of supplier
finance arrangement. This reclassification is treated as a non-cash change, as no cash payment occurs at that point.
There were non-cash transfers from trade payables to liabilities under the supplier finance arrangement of Rs.118.81
crore and Rs.45.41 crore in 2025-26 and 2024-25 respectively. Refer presentation in the statement of cash flows.
The carrying amounts of liabilities under the supplier finance arrangement are considered to be reasonable
approximations of their fair values, due to their short-term nature.
Presentation in the balance sheet and statement of cash flows
The Company derecognises the original trade payables when those payables become part of the supplier finance
arrangement. The related liabilities under the supplier finance arrangement are presented within 'Borrowings', because
they represent financing obtained by the Company and are sufficiently different from trade payables. All liabilities under
the arrangement are classified as current, since they are required to be settled in less than 365 days from the date of the
invoice.
For the purpose of the statement of cash flows, management has determined that the amounts are not part of the working
capital used in the entity's principal revenue-producing activities, so it presents the cash outflows to settle the supplier
finance liability in financing.
Management considers that the finance provider settles the invoices as a payment agent on behalf of the entity. The
payments made by the finance provider are therefore presented as operating cash outflows and financing cash inflows in
equal but opposite amounts at the point when the finance provider pays the supplier. When the Company subsequently
pays the amount outstanding to the finance provider, this is presented as a financing cash outflow.
(f) Net debt reconciliation
The section sets out an analysis of net debt and movements in net debt for each of the periods presented.
41 Employee benefit obligations41.1 Defined Contribution Plan :
The Company has certain defined contribution plans. Contributions are made to provident fund, employee state insurance
commission (ESIC) in India and national pension fund for employees at the specified percentage of salary as per regulations.
The contributions are made to registered provident fund, ESIC fund and national pension fund administered by the
government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any
constructive obligation. The expense recognised in the Statement of Profit and Loss during the year towards employer's
contribution to the fund is as below:
41.2 Compensated absences
The leave obligations cover the Company's liability for earned leave which are classified as other long-term benefits.
The entire amount of the provision of Rs. 1.12 crores (Previous year : Rs. 0.67 crores) is presented as current, since the Company
does not have an unconditional right to defer settlement for any of these obligations. However, based on past experience, the
Company does not expect all employees to avail the full amount of accrued leave or require payment for such leave within the
next 12 months. Leave obligations as at March 31, 2026 not expected to be settled within the next 12 months is Rs. 1.03 crores
(Previous year : Rs. 0.63 crores).
41.3 Gratuity
In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (Gratuity
Scheme) covering certain categories of employees. The Gratuity Scheme provides a lump sum payment to vested employees,
at retirement or termination of employment, an amount based on the respective employee's last drawn salary and the years of
employment with the Company. The Company provides the gratuity benefit through annual contributions to the fund managed
by the Life Insurance Corporation of India (LIC), under this plan the settlement obligation remains with the Company. The
Company funds the liability based on estimations of expected gratuity valuation provided by the Actuary.
(vii) Risk exposure:
Through its defined benefit plans the Company is exposed to a number of risks, the most significant of which are detailed
below:
(i) Interest Rate Risk: While calculating the defined benefit obligation a discount rate based on government bonds
yields of matching tenure is used to arrive at the present value of future obligations. If the bond yield falls, the defined
benefit obligation will tend to increase and plan assets will decrease.
(ii) Salary Risk: Higher than expected increases in salary will increase the defined benefit obligation.
(iii) 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 obligations
is not straight forward and depends on 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.
41.4 On November 21, 2025, the Government of India notified the four Labour Codes consolidating 29 existing labour laws. The
Ministry of Labour & Employment has also issued draft Central Rules and FAQs to help assess the financial impact of these
changes. Based on internal management assessment, actuary report and the best information available, and in line with ICAI
guidance, the Company has recognised an incremental impact of gratuity and long term compensated absences of Rs. 3.79
crores, mainly due to the revised wage definition. It has been disclosed under Employee Benefit Expenses in the Standalone
Statement of Profit and Loss. The Company continues to monitor the finalisation of Central/State Rules and further
Government clarifications and will account for any additional impact as required.
42 Share-based payments(a) Employee option plan
The establishment of the Shakti Pumps (India) Limited Employee Stock Option Plan 2024 was approved by the shareholders
at the annual general meeting held in the financial year 2024-25. The Employee Stock Option Plan is designed to provide
an incentive for senior employees to deliver long-term shareholder returns. Under the plan, participants are granted
options which vest upon completion of specified years of service from the grant date. Participation in the plan is at
the Board's discretion and no individual has a contractual right to participate in the plan or to receive any guaranteed
benefits.
Once vested, the options remain exercisable for a period of three months from end of the vesting period.
Fair value of option granted:
The fair value at grant date was Rs. 813.30 per option. The fair value at grant date is independently determined using the
Black-Scholes Model which takes into account the exercise price, the term of the option, the share price at grant date
and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the
term of the option
The model inputs for options granted included:
(a) Options are granted for no consideration and vest upon completion of service for a period of three years and one
month. Vested options are exercisable for a period of three months after vesting.
(b) Exercise price: Rs.83
(c) Grant date: February 27, 2025
(d) Expiry date: March 31, 2028
(e) Share price at grant date: Rs.880.20
(f) Expected price volatility of the company's shares: 45.72%
(g) Risk-free interest rate: 6.69%
The fair value of Cash and cash equivalents, other bank balances, trade receivables, trade payables, current borrowings and
other current financial assets and liabilities approximate their carrying amount largely due to the short-term maturities of
these instruments and hence not disclosed separately.
The fair value of other non-current financial assets approximates its carrying amount.
Fair value hierarchy
This section explains the judgements and estimates made in determining the fair value of the financial instruments. The fair
value of financial instruments as referred to in note above have been classified into three categories depending on the inputs
used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active market for identical assets
or liabilities (level 1 measurements) and lowest priority to unobservable inputs (level 3 measurements).
(a) recognised and measured at fair value and
(b) measured at amortised cost and for which fair values are disclosed in the financial statements
The categories used are as follows :
Level 1 : Level 1 hierarchy includes financial instruments measured using quoted prices.
Level 2 : The fair value of financial instruments that are not traded in an active market (for example, over-the counter
derivatives) is determined using valuation techniques which maximise the use of observable market data and
rely as little as possible on entity-specific estimates. Considering that all significant inputs required to fair value
such instruments are observable, these are included in level 2.
Level 3 : If one or more of the significant inputs is not based on observable market data, the instrument is included in
level 3.
For all financial instruments referred above that have been measured at amortised cost, their carrying values are
reasonable approximations of their fair values. These are classified as level 3 financial instruments.
There were no transfers between Level 1, Level 2 and Level 3 during the year.
46. Financial risk management
The Company's activities exposes it to market risk, liquidity risk and credit risk. This note explains the sources of risk which
the Company is exposed to and how the Company manages the risk.
1. Credit risk :
The Company is exposed to credit risk from its operating activities (primarily trade receivables) and deposits with banks
and other financial instruments. For banks and other financial institutions, only high rated banks/ financial institutions
are accepted. The balances with banks, security deposits are subject to low credit risk and the risk of default is negligible
or nil. Hence, no provision has been created for expected credit loss for credit risk arising from these financial assets. The
Company considers the probability of default upon initial recognition of asset and whether there has been a significant
increase in the credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant
increase in credit risk the company compares the risk of a default occurring on the asset as at the reporting date with
the risk of default as at the date of initial recognition. It considers available reasonable and supportive forward-looking
information, for e.g., external credit rating (to the extent available), actual or expected significant adverse changes in
business, financial or economic conditions that are expected to cause a significant change to Counterparty's ability to
meet its obligations.
Trade receivables
Credit risk arises from the possibility that customer will not be able to settle their obligations as and when agreed. To
manage this, the Company analyses the credit limits and credit worthiness of the customers on an ongoing basis, taking
into account the financial condition, current economic trends, analysis of historical bad debts, ageing of accounts
receivable and forward looking information. Individual credit limits are set/updated accordingly.
The Company uses the Expected Credit Loss (ECL) model to assess the impairment loss on trade receivables. As per
ECL simplified approach, the Company uses a provision matrix to compute the expected credit loss allowance for trade
receivables. The provision matrix takes into account a continuing credit evaluation of Company's customers' financial
condition; aging of trade receivable; the value and adequacy of collateral received from the customers (if any); the
Company's historical loss experience; and adjustment based on forward looking information. The Company defines
default as an event when there is no reasonable expectation of recovery. The branch supplies goods to the Government
of Uganda, which is a sovereign party. The receivables from the Government of Uganda are not considered for calculation
under the expected credit loss calculation.
Of the trade receivables balance as at March 31, 2026, Rs. 644.45 crores (March 31, 2025: Rs. 761.26 crores) is due from 1
(March 31, 2025: 3) customers being the Company's largest customers. There are no other customers who represent more
than 10% of the total balance of trade receivables.
2. Liquidity risk :
Liquidity risk refers to the risk that the Company will not be able to meet its financial obligations as they become due.
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.
As disclosed in Note 22, the company has entered into a supplier finance arrangement. This has improved the company's
working capital, and the company has no significant concentration of liquidity risk with any individual finance provider.
The Company had access to the following undrawn borrowing facilities at the end of the reporting period:
3. Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency
exchange rates, interest rates, credit, liquidity and other market changes. The Company's exposure to market risk is
primarily on account of foreign currency exchange rate risk.
a) Foreign currency exchange rate risk :
The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss
and other comprehensive income and equity, where any transaction references more than one currency or where
assets / liabilities are denominated in a currency other than the functional currency of the Company. Considering
the countries and economic environment in which the Company operates, its operations are subject to risks arising
from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar and
Euro against the functional currency of the Company. The Company, as per its risk management policy, evaluates the
impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks and uses derivative
instruments primarily to hedge foreign exchange (if required).
47 Capital management
(a) Risk management
The Company's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it
can continue to provide returns for shareholders and benefits for other stakeholders, and maintain an optimal capital
structure to reduce the cost of capital. For the purpose of the Company's capital management, capital includes issued
equity capital and all other equity reserves attributable to the equity holders. The primary objective of the Company's
capital management is to maximise the shareholders value. The Company manages its capital structure and makes
adjustments in light of changes in economic conditions.
(c) Loan covenants
Under the terms of major borrowings facilities, the company is required to comply with financial covenants at the end of
each annual reporting period.
The company has complied with these covenants throughout the reporting period.
There are no indications that the company would have difficulties complying with the covenants when they will be next
tested as at the March 31, 2027 reporting date.
48 Segment information
Since the segment information as per Ind AS 108 - Operating Segments is provided on the basis of consolidated financial
statements, the same is not provided separately in the standalone financial statements.
As of March 31, 2026, revenue for unsatisfied performance obligations expected to be recognised in the future is Rs. 68.12
crores (March 31, 2025: Rs. 37.12 crores), which primarily relates to operation and maintenance obligations. Management
expects that of the transaction price allocated to the unsatisfied contracts as of March 31, 2026, Rs. 24.38 crores (March
31, 2025 , Rs. 8.00 crores) will be recognised as revenue in the next year and the remaining Rs. 43.74 crores (March 31, 2025
, Rs. 29.12 crores) will be recognised over subsequent four financial years. These amounts include only fixed consideration
and does not include contracts with an original expected term of one year or less.
The following table shows how much of the revenue recognised in the current reporting period relates to carried-forward
contract liabilities :
(e) The Company provides installation and maintenance services on its certain products at the time of sale in terms of the
contract with customers. These installation and maintenance services are sold together with the sale of product. Under
Ind AS 115, these are considered as three separate performance obligations and accordingly the sale of the solar pumps
is treated as a sale of product and installation and maintenance is considered as sale of service. The sale of services
during the year is Rs. 119.72 crores (Previous year Rs. 86.59 crore) based on the transaction price allocation under Ind AS
115.
50. Summary of Other Accounting Policies
This note provides a list of other accounting policies adopted in the preparation of these standalone financial statements to
the extent they have not already been disclosed in the other notes above. These policies have been consistently applied to all
the years presented.
50.1 Intangible assets
Intangible assets are stated at acquisition cost net of tax/ duty credits availed, if any, and net of accumulated amortization.
Gains or losses arising from the retirement or disposal of an intangible asset are determined as the difference between the net
disposal proceeds and the carrying amount of the asset and recognized as income or expense in the profit or loss. Intangible
assets are amortized on the straight-line method as follows:
Computer Software are amortised on straight line basis over the estimated useful life of 3 years.
The amortisation period and the amortisation method are reviewed at least at each financial year end. If the expected useful
life of the asset is significantly different from previous estimates, the amortisation period is changed accordingly.
50.2 Investment in subsidiaries
The investments in subsidiaries are carried in the financial statements at historical cost.
Investments in subsidiaries carried at cost are tested for impairment in accordance with Ind AS 36 Impairment of Assets. The
carrying amount of the investment is tested for impairment as a single asset by comparing its recoverable amount with its
carrying amount, any impairment loss recognised reduces the carrying amount of the investment.
50.3 Foreign currency transactions(i) Functional and presentation currency
'Items included in the financial statements of the Company are measured using the currency of the primary economic
environment in which the entity operates ('the functional currency'). The financial statements have been prepared and
presented in Indian Rupees (INR), which is the Company's functional and presentation currency.
(ii) Transactions and Balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are recognized
in profit or loss on a net basis.
Foreign exchange gains and losses arising on foreign currency borrowings are presented in the statement of profit and
loss, within finance costs. All other foreign exchange gains and losses are presented in the statement of profit and loss
on a net basis within other income/other expenses, as appropriate.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the
date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported
as part of the fair value gain or loss.
(iii) Foreign operations
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy)
that have a functional currency different from the presentation currency are translated into the presentation currency as
follows:
• assets and liabilities are translated at the closing rate at the date of that balance sheet
• income and expenses are translated at average exchange rates (unless this is not a reasonable approximation of the
cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated
at the dates of the transactions), and
• all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and
of borrowings and other financial instruments designated as hedges of such investments, are recognised in other
comprehensive income. When a foreign operation is sold, the associated exchange differences are reclassified to profit
or loss, as part of the gain or loss on sale.
50.4 Employee benefits(i) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months
after the end of the period in which the employees render the related service are recognized in respect of employees'
services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities
are settled. The liabilities are presented as current employee benefits obligations in the balance sheet.
(ii) Post-employment benefits obligations
The Company operates the following post-employment schemes:
Defined contribution plan
Defined contribution plans are provident fund scheme, Employee State Insurance Commission (ESIC) scheme and
national pension fund scheme. The Company pays provident fund, ESIC and national pension fund scheme contribution
to publicly administered provident funds, ESIC funds and national pension fund as per local regulations. The Company has
no further payment obligations once the contributions have been made. The contribution are accounted for as defined
contribution plans and contributions are recognised as employee benefit expenses when they are due.
Defined Benefit Plans for gratuity
The Company provides for gratuity, a defined benefit plan (the "Gratuity Plan") covering eligible employees. The Gratuity
Plan provides a lump sum payment to vested employees at retirement, death or termination of employment, of an amount
based on the respective employee's salary and the tenure of employment.
The liability or asset recognized in the balance sheet in respect of defined benefit gratuity plan is the present value of
the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit
obligation is calculated annually by actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by
reference to market yields at the end of the reporting period on government bonds that have terms approximating to the
terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and
the fair value of plan assets.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are
recognized in the period in which they occur, directly in other comprehensive income. They are included in retained
earnings in the statement of changes in equity and in the balance sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are
recognized immediately in profit or loss as past service cost.
Other long-term employee benefit obligations
The Company has liabilities for earned leave which are not expected to be settled wholly within 12 months after the end
of the year in which the employees render the related service. These obligations are therefore measured as the present
value of expected future payments to be made in respect of services provided by employees up to the end of the reporting
period using the projected unit credit method. The benefits are discounted using the appropriate market yields at the
end of the reporting period that have terms approximating to the terms of the related obligation. Re-measurements as a
result of experience adjustments and changes in actuarial assumptions are recognised in profit or loss.
The obligations are presented as current liabilities in the balance sheet if the Company does not have an unconditional
right, at the end of the reporting period, to defer settlement for at least twelve months after the reporting period,
regardless of when the actual settlement is expected to occur.
50.5 LeasesWhere the Company is a lessee
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
• 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 lessee's incremental borrowing rate, being the rate that the 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.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease
period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability.
• any lease payments at or before the commencement date less any lease incentives received
• any initial direct costs
• restoration costs
Right-of-use assets are depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. 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.
For short term leases of warehouses, the Company recognises the lease payments as an operating expense on a straight line
basis over the lease term. Short term leases are leases with a lease term of 12 months or less.
50.6 Contingent Liabilities
Contingent liabilities are disclosed 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
will be required to settle or a reliable estimate of the amount cannot be made.
50.7Financial Instrument:
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the
instrument.
Financial Assets
a) Classification
The Company classifies its financial assets in the following measurement categories:
• those to be measured subsequently at fair value (either through other comprehensive income, or through profit or
loss), and
• those measured at amortised cost.
(i) Classification of financial assets at amortised cost
The Company classifies its financial assets at amortised cost only if both of the following criteria are met:
• the asset is held within a business model whose objective is to collect the contractual cash flows, and
• the contractual terms give rise to cash flows that are solely payments of principal and interest.
(ii) Classification of financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income (FVOCI) comprise:
• Equity securities (listed and unlisted) which are not held for trading, and for which the Company has irrevocably
elected at initial recognition to present changes in fair value through OCI rather than profit or loss. These are
strategic investments and the Company considers this classification to be more relevant. There are currently no
equity securities which are carried at FVOCI.
• Debt securities where the contractual cash flows are solely payments of principal and interest and the objective
of the Company's business model is achieved both by collecting contractual cash flows and by selling financial
assets. There are currently no debt securities which are carried at FVOCI.
(iii) Classification of financial assets at fair value through profit or loss
The Company classifies the following financial assets at fair value through profit or loss (FVTPL):
• debt instruments that do not qualify for measurement at either amortised cost or FVOCI,
• equity investments that are held for trading, and
• equity investments for which the entity has not elected to recognise fair value gains and losses through OCI.
The classification depends on the entity's business model for managing the financial assets and the contractual
terms of the cash flows.
• For assets measured at fair value, gains and losses will either be recorded in the statement of profit and loss or
other comprehensive income;
• For investments in equity instruments that are not held for trading, this will depend on whether the Company has
made an irrevocable election at the time of initial recognition to account for the equity investment at fair value
through other comprehensive income.
The Company reclassifies debt instruments when and only when its business model for managing those assets
changes.
b) Initial recognition and measurement
Financial assets are recognized when the Company becomes a party to the contractual provisions of the instrument.
Financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through
Statement of Profit and Loss, transaction costs that are attributable to the acquisition of the financial asset. Transaction
costs of financial assets carried at fair value through Profit and Loss are expensed in the Statement of Profit and Loss.
c) Subsequent measurement
Subsequent measurement of financial assets depends on the Company's business model for managing the asset and the
cash flow characteristics of the asset.
Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely
payments of principal and interest are measured at amortised cost. Interest income from these financial assets is
included in other income using the effective interest rate method. Any gain or loss arising on derecognition is recognised
directly in profit or loss.
Fair value through other comprehensive income (FVOCI): Assets that are held for collection of contractual cash flows
and for selling the financial assets, where the assets' cash flows represent solely payments of principal and interest, are
measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment
gains or losses, interest income and foreign exchange gains and losses which are recognised in profit and loss. When
the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity
to profit or loss and recognised in other gains/(losses). Interest income from these financial assets is included in other
income using the effective interest rate method. Foreign exchange gains and losses are presented in other income /
expenses.
Fair value through profit or loss: Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair
value through profit or loss. A gain or loss on a financial asset that is subsequently measured at fair value through profit or
loss is recognised in profit or loss and presented within other income / expenses in the period in which it arises. Interest
income from these financial assets is included in other income.
d) Impairment of financial assets
The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at
amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been
a significant increase in credit risk. Note 46 details how the Company determines whether there has been a significant
increase in credit risk.
e) Derecognition of financial assets
A financial asset is derecognised only when the Company:
(i) has transferred the rights to receive cash flows from the financial asset; or
(ii) retains the contractual rights to receive the cash flows of the financial asset but assumes a contractual obligation to
pay the cash flows to one or more recipients.
Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks
and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised. Where the entity
has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not
derecognised.
50.8 Income recognition on financial assets
• Interest Income
Interest income on financial assets at amortised cost is recognised in profit or loss as part of other income.
Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset
except for financial assets that subsequently become credit impaired. For credit-impaired financial assets the effective
interest rate is applied to the net carrying amount of the financial asset (after deduction of loss allowance).
• Dividends
Dividends are recognised as other income in the statement of profit and loss only when the right to receive payment is
established, it is probable that the economic benefits associated with the dividend will flow to the Company, and the
amount of the dividend can be measured reliably.
50.9 Financial Liabilities
a) Initial Recognition and Measurement
Financial liabilities are initially recognised at fair value, reduced by transaction costs (in case of financial liability not at
fair value through profit or loss), that are directly attributable to the issue of financial liability. After initial recognition,
financial liabilities are measured at amortised cost using effective interest method. The effective interest rate is the rate
that exactly discounts estimated future cash outflow (including all fees paid, transaction cost, and other premiums or
discounts) through the expected life of the financial liability, or, where appropriate, a shorter period, to the net carrying
amount on initial recognition. At the time of initial recognition, there is no financial liability irrevocably designated as
measured at fair value through profit or loss.
b) Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an
existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of
an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the
original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in
the statement of profit and loss.
50.10 Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable
right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the
liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the
normal course of business and in the event of default, insolvency or bankruptcy of the Company or counterparty.
50.11 Cash and Cash Equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits
held at call with financial institutions, other short term, highly liquid investments with original maturities of three months or
less that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value,
and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
50.12 Impairment of non-financial assets
Non-financial assets are tested for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds
its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of disposal and value in use.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable
cash inflows which are largely independent of the cash inflows from other assets or group of assets (cash-generating units).
Non-financial assets that suffered an impairment are reviewed for possible reversal of the impairment at the end of each
reporting period.
50.13 Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the Company by the weighted
average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares
issued during the year.
(ii) Diluted earnings per share:
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
the after income tax effect of interest and other financing costs associated with dilutive potential equity shares and the
weighted average number of additional equity shares that would have been outstanding assuming the conversion of all
dilutive potential equity shares.
50.14 Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker comprise of the Company's Chairman, Managing Director and Chief Financial
Officer.
50.15 Government grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be
received and the Company will comply with all attached conditions.
Government grants relating to income are deferred and recognised in the profit or loss over the period necessary to match
them with the costs that they are intended to compensate and presented within other income.
Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as
deferred income and are credited to profit or loss on a straight-line basis over the expected useful lives of the related assets
and presented within other income.
50.16 Contributed Equity
Equity shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
50.17 Dividends
The Company recognises a liability to make 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 in case of final dividend.
Explanation:
-1 Total Debt represents Current Borrowings Non Current Borrowings Lease liabilities.
-2 Shareholders Equity represents Equity Share Capital Other equity
-3 Earnings available for debt service represents Profit for the year Non-cash operating expenses like depreciation and
other amortisations Interest Loss on sale of Property, Plant and Equipment etc.
-4 Debt Service represents Interest on Debt Scheduled Principal Repayment of Non Current Borrowings
-5 Net Sales represents Domestic Sales Export Sales Scrap Sales
-6 Capital Employed represents Total Equity Borrowings Lease liabilities
-7 Cost of goods sold represents Cost of materials consumed Changes in inventories of finished goods and work-in¬
progress
-8 EBIT represents Profit for the year Total tax expense Interest expense
Reason for variance :
-1 The increase is driven by increase in borrowings during the year.
-2 The decrease is on account of decrease in earnings available for debt service due to lower profits in the current year.
-3 The decrease is on account of lower profit and EBIT despite increase in revenue and working capital in the current year.
52 Other regulatory information required by Schedule III:
(i) Relationship with struck off companies
The Company has no transactions with companies struck off under the Companies Act, 2013 or Companies Act, 1956.
(ii) Wilful defaulter
The Company has not been declared wilful defaulter by any bank or financial institution or other lender.
(iii) Details of crypto currency or virtual currency
The Company has not traded or invested in Crypto currency or Virtual Currency during the current and previous year
(iv) Compliance with approved scheme of arrangements
The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous
financial year.
(v) Details of benami property held
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.
(vi) Registration of charges or satisfaction with Registrar of Companies
There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory
period.
(vii) Undisclosed income
There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under
the Income Tax Act, 1961, that has not been recorded in the books of account.
(viii) Utilisation of borrowed funds and share premium
The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources
or kind of funds) to any other person(s) or entity(ies), including foreign entities ("Intermediaries") with the understanding
(whether recorded in writing or otherwise) that the Intermediary shall:
(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.
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.
(ix) Borrowing secured against current assets
The Company has borrowings from banks on the basis of security of current assets. The quarterly returns or statements
of current assets filed by the Company with banks are in agreement with the unaudited books of account.
(x) Compliance with number of layers of Companies
The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with
Companies (Restriction on number of Layers) Rules, 2017.
(xi) Valuation of property, plant and equipment, right-of-use assets and intangible assets
The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or
both during the current or previous year.
(xii) Title deeds of immovable properties not held in name of the Company
The title deeds of all the immovable properties (other than properties where the Company is the lessee and the lease
agreements are duly executed in favour of the lessee), as disclosed in Note 3 to the standalone financial statements, are
held in the name of the Company.
(xiii) Utilisation of borrowings availed from banks and financial institutions
The borrowings obtained by the Company from banks and financial institutions have been applied for the purposes for
which such loans were taken.
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