2.10 Provisions and Contingent Liabilities
A provision is recognised when the Company has a
present obligation (legal or constructive) as a result
of past event and it is probable that an outflow of
resources will be required to settle the obligation,
in respect of which the reliable estimate can be
made. Provisions (excluding retirement benefits and
compensated absences) are determined at present
value based on best estimate required to settle
the obligation at the balance sheet date. These are
reviewed at each balance sheet date adjusted to
reflect the current best estimates. Provisions for
onerous contracts are recognized when the expected
benefits to be derived by the Company from a
contract are lower than the unavoidable costs of
meeting the future obligations under the contract.
Provisions for onerous contracts are measured at
the present value of lower of the expected net cost
of fulfilling the contract and the expected cost of
terminating the contract.
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 the
obligation or a reliable estimate of the amount cannot
be made. Contingent assets are neither recognised
nor disclosed in the financial statements.
The company does accounting in line with
Ind AS 37 - Provisions, Contingent Liabilities and
Contingent Assets.
2.11 Earnings per equity share
Basic earnings per share is computed by dividing net
income by the weighted average number of shares
outstanding during the financial year adjusted for
treasury shares held. Diluted earnings per share is
computed using the weighted average number of
shares outstanding during the year adjusted for
treasury shares held and dilutive potential shares,
except where the result would be anti-dilutive. The
computations are in line with Ind AS 33 - Earnings
per Share.
2.12 Taxation
I ncome tax comprises current and deferred taxes.
Income tax expense is recognized in the income
statement except when they relate to items that are
recognized outside profit or loss (whether in other
comprehensive income or directly in equity), in
which case tax is also recognized outside profit or
loss, or where they arise from the initial accounting
for business combination.
The company has adopted the new income tax
regime with effect from year ended March 31, 2024.
(i) Current income tax:
Current income tax for the current and prior
periods are measured at the amount expected
to be recovered from or paid to the taxation
authorities based on the taxable income for
the year. The tax rates and tax laws used to
compute the current tax amount are those that
are enacted or substantively enacted as at the
reporting date and applicable for the year. The
Company offsets current tax assets and current
tax liabilities, where it has a legally enforceable
right to set off the recognized amounts and
where it intends either to settle on a net basis, or
to realize the asset and liability simultaneously.
(ii) Deferred income tax:
Deferred income tax is recognized using the
balance sheet approach. Deferred income
tax assets and liabilities are recognized for
deductible and taxable temporary differences
arising between the tax base of assets and
liabilities and their carrying amount in financial
statements, except when the deferred income
tax arises from the initial recognition of goodwill
or an asset or liability in a transaction that is
not a business combination and affects neither
accounting nor taxable profits or loss at the time
of the transaction.
Deferred income tax assets are recognized
to the extent 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 utilized.
Deferred income tax liabilities are recognized
for all taxable temporary differences except
in respect of taxable temporary differences
associated with investments in subsidiaries,
associates and foreign branches where
the timing of the reversal of the temporary
difference can be controlled and it is probable
that the temporary difference will not reverse in
the foreseeable future.
The carrying amount of deferred income 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 income tax asset
to be utilized. Deferred income tax assets and
liabilities are measured at the tax rates that are
expected to apply in the period when the asset
is realized or the liability is settled, based on tax
rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
The Company offsets deferred income tax
assets and liabilities, where it has a legally
enforceable right to offset current tax assets
against current tax liabilities, and they relate to
taxes levied by the same taxation authority on
either the same taxable entity, or on different
taxable entities where there is an intention to
settle the current tax liabilities and assets on a
net basis or their tax assets and liabilities will be
realized simultaneously.
2.13 Employee benefits:
(i) Post-employment benefit plans:
The Company participates in various
employee benefit plans. Pensions and other
post-employment benefits are classified as
either defined contribution plans or defined
benefit plans. Under a defined contribution
plan, the Company's only obligation is to
pay a fixed amount with no obligation to pay
further contributions if the fund does not hold
sufficient assets to pay all employee benefits.
The related actuarial and investment risks fall
on the employee. The expenditure for defined
contribution plans is recognized as an expense
during the year when the employee provides
service. Under a defined benefit plan, it is
the Company's obligation to provide agreed
benefits to the employees. The related actuarial
and investment risks fall on the Company. The
present value of the defined benefit obligations
is calculated by an independent actuary using
the projected unit credit method.
The Company has the following employee
benefit plans:
a. Provident fund
In accordance with Indian law, Eligible
employees of the Company receive
benefits from a provident fund, which is a
defined contribution plan. Both, the eligible
employee and the Company make monthly
contributions to the provident fund plan
equal to a specified percentage of the
covered employee's salary. The Company
has no further obligations under this
scheme beyond its periodic contributions.
b. Superannuation
The Company has two superannuation
plans, a defined benefit plan and a defined
contribution plan. An eligible employee on
April 1, 1996 could elect to be a member of
either plan.
Employees who are members of the defined
benefit superannuation plan are entitled to
benefits depending on the years of service
and salary drawn. The monthly pension
benefits after retirement range from 0.75%
to 2% of the annual basic salary for each
year of service. The Company account for
superannuation benefits payable in future
under the plan based on an estimated basis
for the period end and on an independent
actuarial valuation as on the Balance
Sheet date.
Re-measurements, comprising actuarial
gains and losses, the effect of changes to
asset ceiling (if applicable) and the return
on plan assets (excluding net interest),
is recognized in other comprehensive
income in the period in which they occur.
Re-measurements recognized in other
comprehensive income is reflected
immediately in retained earnings and is not
reclassified to profit or loss. Past service
cost is recognized in the Statement of Profit
or Loss in the year of plan amendment.
With effect from April 1, 2003, this plan was
amended, and benefits earned by covered
employees have been protected. Employees
covered by this plan are prospectively
entitled to benefits computed on a basis
that ensures that the annual cost of
providing the pension benefits would not
exceed 15% of salary.
Separate irrevocable trusts are maintained
for employees covered and entitled to
benefits. The Company contribute up to 15%
of the eligible employees' basic salary to
the trust every year. Such contributions are
recognized as an expense when incurred.
The Company has no further obligation
beyond this contribution.
c. Gratuity
The Company has an obligation towards
gratuity, a defined benefit retirement
plan covering eligible employees. The
plan provides for a lump-sum payment
to vested employees at retirement, death
while in employment or on termination
of employment of an amount equivalent
to 15 to 30 days salary payable for each
completed year of service. Vesting occurs
upon completion of five years of service.
The Company makes annual contributions
to gratuity funds established as trusts.
The Company account for the liability for
gratuity benefits payable in the future
based on an estimated basis for the
financial year end and on an independent
actuarial valuation under Projected Unit
Cost method as on the Balance Sheet date.
Re-measurements, comprising actuarial
gains and losses, the effect of changes to
asset ceiling (if applicable) and the return
on plan assets (excluding net interest),
is recognized in other comprehensive
income in the year in which they occur.
Re-measurements recognized in other
comprehensive income is reflected
immediately in retained earnings and is not
reclassified to profit or loss. Past service
cost is recognized in the Statement of Profit
or Loss in the year of plan amendment.
Costs comprising service cost (including
current and past service cost and gains and
losses on curtailments and settlements)
and net interest expense or income is
recognized in profit or loss.
The obligation recognized in the balance
sheet represents the actual deficit or
surplus in the Company's defined benefit
plans. Any surplus resulting from this
calculation is limited to the present value of
any economic benefits available in the form
of refunds from the plans or reductions in
future contributions to the plans.
The obligations are presented as current
liabilities in the balance sheet if the entity
does not have an unconditional right to
defer settlement for at least twelve months
after the reporting period, regardless of
when the actual settlement is expected
to occur.
d. Bhavishya Kalyan Yojana (BKY)
Bhavishya Kalyan Yojana is an unfunded
defined benefit plan for employees of
the Company. The benefits of the plan
include pension in certain cases, payable
up to the date of normal superannuation
had the employee been in service, to an
eligible employee at the time of death or
permanent disablement, while in service,
either as a result of an injury or as certified
by the appropriate authority. The monthly
payment to dependents of the deceased/
disabled employee under the plan equals
50% of the basic salary drawn at the time
of death or accident or a specified amount,
whichever is greater. The Company account
for the liability for BKY benefits payable in
the future based on an estimated basis
for the period end and on an independent
actuarial valuation under Projected Unit
Cost method as on the Balance Sheet date.
Re-measurements, comprising actuarial
gains and losses, the effect of changes to
asset ceiling (if applicable) and the return
on plan assets (excluding net interest),
is recognized in other comprehensive
income in the period in which they occur.
Re-measurements recognized in other
comprehensive income is reflected
immediately in retained earnings and is not
reclassified to profit or loss. Past service
cost is recognized in the Statement of Profit
or Loss in the period of plan amendment.
Costs comprising service cost (including
current and past service cost and gains and
losses on curtailments and settlements)
and net interest expense or income is
recognized in profit or loss.
The obligation recognized in the balance
sheet represents the actual deficit or
surplus in the Company's defined benefit
plans. Any surplus resulting from this
calculation is limited to the present value of
any economic benefits available in the form
of refunds from the plans or reductions in
future contributions to the plans.
The obligations are presented as current
liabilities in the balance sheet if the entity
does not have an unconditional right to
defer settlement for at least twelve months
after the reporting period, regardless of
when the actual settlement is expected
to occur.
The Company has replaced its employee
benefit scheme BKY with Group Term Life
Insurance (GTL) policy with effect from
November 2019. Accordingly, with effect
from December 2019, the Company has
continued to carry obligation under this
scheme based on actuarial valuation for
those beneficiaries having claims under this
scheme before the date of discontinuation.
e. Post-retirement medicare scheme
Under this unfunded scheme, employees
of the Company receive medical benefits
subject to certain limits on amounts of
benefits, periods after retirement and
types of benefits, depending on their grade
and location at the time of retirement.
Employees separated from the Company
as part of an Early Separation Scheme,
on medical grounds or due to permanent
disablement are also covered under
the scheme. The Company account for
the liability for post-retirement medical
scheme based on an estimated basis for
the period end and on an independent
actuarial valuation under Projected Unit
Cost method at the financial year end.
Re-measurements, comprising actuarial
gains and losses, the effect of changes to
asset ceiling (if applicable) and the return
on plan assets (excluding net interest),
is recognized in other comprehensive
income in the period in which they occur.
Re-measurements recognized in other
comprehensive income is reflected
immediately in retained earnings and is not
reclassified to profit or loss. Past service
cost is recognized in the Statement of Profit
or Loss in the period of plan amendment.
Costs comprising service cost (including
current and past service cost and gains and
losses on curtailments and settlements)
and net interest expense or income is
recognized in profit or loss.
The obligation recognized in the balance
sheet represents the actual deficit or
surplus in the Company's defined benefit
plans. Any surplus resulting from this
calculation is limited to the present value of
any economic benefits available in the form
of refunds from the plans or reductions in
future contributions to the plans.
The obligations are presented as current
liabilities in the balance sheet if the entity
does not have an unconditional right to
defer settlement for at least twelve months
after the reporting period, regardless of
when the actual settlement is expected
to occur.
The Company has curtailed its Post¬
retirement Medicare scheme which is an
unfunded defined benefit plan to exclude all
employees who will retire after December 31,
2020. Accordingly, with effect from January
2021, the carrying value of liability has been
recognised based on an independent
actuarial valuation under Projected Unit
Cost method for those beneficiaries having
claims under this scheme before the date
of discontinuation.
(ii) Compensated absences
The Company provides for the encashment of
leave or leave with pay subject to certain rules.
The employees are entitled to accumulate leave
subject to certain limits, for future encashment.
The liability is provided based on number of days
of unutilized leave at each balance sheet date
based on an estimated basis for the period end
and on an independent actuarial valuation under
Projected Unit Cost method at the financial
year end.
2.14 Share based payments
Share-based compensation benefits are provided
to the employees via the Share based long term
incentive scheme 2022 ("SLTI 2022").
Equity-settled transactions
The cost of equity-settled transactions is determined
by the fair value at the date when the grant is made
using an appropriate valuation model. That cost is
recognised, together with a corresponding increase
in share options outstanding account in equity,
over the period in which the performance and/or
service conditions are fulfilled in employee benefits
expense. The cumulative expense recognised for
equity-settled transactions at each reporting date
until the vesting date reflects the extent to which
the vesting period has expired and the Company's
best estimate of the number of equity instruments
that will ultimately vest. The statement of profit
and loss expense or credit for a period represents
the movement in cumulative expense recognised
as at the beginning and end of that period and is
recognised in employee benefits expense.
Service and non-market performance conditions
are not taken into account when determining the
grant date fair value of awards, but the likelihood
of the conditions being met is assessed as part
of the Company's best estimate of the number of
equity instruments that will ultimately vest. Market
performance conditions are reflected within the
grant date fair value. Any other conditions attached
to an award, but without an associated service
requirement, are considered to be non-vesting
conditions. Non-vesting conditions are reflected in
the fair value of an award and lead to an immediate
expensing of an award unless there are also service
and/or performance conditions.
No expense is recognised for awards that do not
ultimately vest because non-market performance
and/or service conditions have not been met. Where
awards include a market or non-vesting condition,
the transactions are treated as vested irrespective
of whether the market or non-vesting condition is
satisfied, provided that all other performance and/
or service conditions are satisfied.
The dilutive effect of outstanding options is reflected
as additional share dilution in the computation of
diluted earnings per share.
Cash-settled transactions
The cost of cash-settled transactions is measured
initially at fair value at the grant date. This fair value
is expensed over the period until the vesting date
with recognition of a corresponding liability. The
liability is remeasured to fair value at each reporting
date up to, and including the settlement date, with
changes in fair value recognised in employee benefits
expense. There are no cash-settled schemes or
transaction outstanding.
2.15 Dividends
Dividends on shares are recorded as a liability on
the date of approval by the shareholders and interim
dividends are recorded as a liability on the date of
declaration by the Company's Board of Directors as
per Ind AS 10.
2.16 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 The Company accounts for
each lease component within the contract as a
lease separately from non-lease components of
the contract and allocates the consideration in the
contract to each lease component on the basis of the
relative stand-alone price of the lease component
and the aggregate stand-alone price of the non¬
lease components.
Company as a lessee
The Company recognises right-of-use asset
representing its right to use the underlying asset
for the lease term at the lease commencement
date. The cost of the right-of-use asset measured
at inception shall comprise of the amount of the
initial measurement of the lease liability adjusted
for any lease payments made at or before the
commencement date less any lease incentives
received, plus any initial direct costs incurred and
an estimate of costs to be incurred by the lessee
in dismantling and removing the underlying asset
or restoring the underlying asset or site on which it
is located. The right-of-use assets is subsequently
measured at cost less any accumulated depreciation,
accumulated impairment losses, if any and adjusted
for any remeasurement of the lease liability. The
right-of-use assets is depreciated using the straight¬
line method from the commencement date over
the shorter of lease term or useful life of right-of-
use asset. The estimated useful lives of right-of use
assets are determined on the same basis as those of
property, plant and equipment. 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.
The Company measures the lease liability at the
present value of the lease payments that are not
paid at the commencement date of the lease. The
lease payments are discounted using the interest
rate implicit in the lease, if that rate can be readily
determined. If that rate cannot be readily determined,
the Company uses incremental borrowing rate. For
leases with reasonably similar characteristics, the
Company, on a lease by lease basis, may adopt
either the incremental borrowing rate specific to
the lease or the incremental borrowing rate for the
portfolio as a whole. The lease payments shall include
fixed payments, variable lease payments, residual
value guarantees, exercise price of a purchase
option where the Company is reasonably certain to
exercise that option and payments of penalties for
terminating the lease, if the lease term reflects the
lessee exercising an option to terminate the lease.
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. Where the carrying
amount of the right-of-use asset is reduced to zero
and there is a further reduction in the measurement
of the lease liability, the Company recognises
any remaining amount of the re-measurement in
statement of profit and loss.
The Company has elected not to apply the
requirements of Ind AS 116 Leases to short-term
leases of all assets that have a lease term of 12
months or less and leases for which the underlying
asset is of low value. The lease payments associated
with these leases are recognized as an expense on a
straight-line basis over the lease term.
Company as a lessor
At the inception of the lease the Company classifies
each of its leases as either an operating lease or
a finance lease. The Company recognises lease
payments received under operating leases as income
on a straight- line basis over the lease term. In case of
a finance lease, finance income is recognised over the
lease term based on a pattern reflecting a constant
periodic rate of return on the lessor's net investment
in the lease. When the Company is an intermediate
lessor it accounts for its interests in the head lease
and the sub-lease separately. It assesses the lease
classification of a sub-lease with reference to the
right-of-use asset arising from the head lease, not
with reference to the underlying asset. If a head lease
is a short term lease to which the Company applies
the exemption described above, then it classifies the
sub-lease as an operating lease.
I f an arrangement contains lease and non-lease
components, the Company applies Ind AS 115
Revenue from contracts with customers to allocate
the consideration in the contract.
Sub lease
At the inception of the sub lease contract, the
Company classifies the sub lease as a finance lease
or an operating lease based on criteria in Ind AS
116 Lease.
The sub lease, which is classified as an operating
lease, the lease Liability and Right-to-Use of the head
lease is not derecognised. The lease income which
would be received from the sub lease over the lease
term is recognised as other income in the Statement
of Profit or Loss Account.
The sub lease, which is classified as a finance lease, the
lease liability of the head lease is not derecognised,
instead the Right to Use asset of the head lease is
derecognised and net investment in sub lease is
recognised. The interest income received on the Net
Investment in sub lease is recognised in Statement
of Profit or Loss Account over the lease term.
2.17 Cost recognition
Costs and expenses are recognised when incurred
and have been classified according to their nature.
2.18 Exceptional items
The Company considers exceptional items to be
those which derive from events or transactions
which are significant for separate disclosure by
virtue of their size or incidence in order for the user
to obtain a proper understanding of the Company's
financial performance. These items include, but are
not limited to, acquisition costs, impairment charges,
restructuring costs and profits and losses on disposal
of subsidiaries and other one-off items which meet
this definition. To provide a better understanding of
the underlying results of the year, exceptional items
are reported separately in the Statement of Profit
and Loss.
2.19 Recent Indian Accounting Standards (Ind AS) and
Pronouncements
Ministry of Corporate Affairs ("MCA") notifies new
standards or amendments to the existing standards
under Companies (Indian Accounting Standards)
Rules as issued from time to time.
In May 2025, MCA notified amendments to Ind AS 21
- The Effects of Changes in Foreign Exchange Rates,
applicable w.e.f. April 1, 2025. The Group has reviewed
the amendment and based on its evaluation has
determined that it does not have any significant
impact in its financial statements.
In August 2025, MCA notified the following
amendments to:
1. I nd AS 1, Presentation of Financial Statements,
applicable w.e.f April 1, 2025 - The amendment
relates to classification of liabilities as current
or non-current and non-current liabilities
with covenants. In the context of classifying a
liability as current, it removes the requirement
of existence of a right to defer settlement for
at least 12 months after the reporting date,
and instead requires that the said right should
exist on the reporting date and have substance.
The amendment also introduces guidance on
classification of liabilities with covenants. The
Group has no impact of these amendments in
its classification criteria of current and non¬
current liabilities.
2. Ind AS 7, Statement of Cash Flows and Ind
AS 107, Financial Instruments - Disclosures,
applicable w.e.f April 1, 2025 - The amendment
in Ind AS 7 requires to inform users of financial
statements of the existence of supplier finance
arrangements and explain the nature of the
arrangements, the carrying amount of liabilities
and the range of payment due dates. Ind AS
107 has been amended to add supplier finance
arrangements as a factor that may cause
concentration of liquidity risk. The Group has
reviewed the amendment and based on its
evaluation has determined that it does not have
any significant impact in its financial statements.
3. I nd AS 12, International Tax Reform - Pillar Two
Model Rules applicable immediately - The
amendments provide a temporary mandatory
relief from deferred tax accounting for top-up
tax and disclose that they have applied the
relief. The Group has reviewed the amendment
and based on its evaluation has determined
that it does not have any significant impact in
its financial statements.
Notes:
(i) Securities Premium identified separately for consolidation adjustment
During 2010, based on the approval of Shareholders of the Company at the Extra-Ordinary General Meeting
held on March 5, 2010 and the Order of the Honourable High Court of Judicature at Mumbai dated April 16,
2010, the Company had utilized balance in the securities premium account to the tune of ' 46.66 crore towards
one time charges/cost (including change in accounting policy for provision for doubtful debts) incurred by
the Company and its subsidiary companies. The amounts relating to the Company amounting to ' 17.32 crore
had been adjusted to the Securities Premium Account. An amount of ' 29.34 crore equivalent to the total
amount of adjustments relating to the subsidiaries had been identified and segregated from the balance
in the Securities Premium Account for adjustment on consolidation. Of this total adjustment made ' 1.58
crore and ' 16.58 crore relates to provision for doubtful debts of the Company and its subsidiary companies
respectively on account of change in accounting policy with regard to provision for doubtful debts.
Consequently, such excess provisions for doubtful debts on account of the said collections have been written
back to the Securities Premium Account. The subsidiary companies have realized from doubtful debts up to
March 31, 2021'6.18 crores. Accordingly the said amount has been transferred from the Securities Premium
identified separately for consolidated adjustment to Securities Premium Account and the balance amount
of ' 23.16 crores (March 31, 2025: ' 23.16 crores) relating to the subsidiaries is continued to be disclosed
separately as securities premium account for adjustment on consolidation.
(ii) Capital redemption reserve
As per Companies Act, 2013, capital redemption reserve is created when company purchases its own shares
out of free reserves or securities premium. A sum equal to the nominal value of the shares so purchased is
transferred to capital redemption reserve. The Company has transferred the amount to Capital redemption
reserve from Securities Premium.
(iii) General reserve
The Company has transferred a portion of the net profit of the Company before declaring dividend to general
reserve pursuant to the earlier provisions of Companies Act 1956. Mandatory transfer to general reserve is
not required under the Companies Act, 2013.
(iv) Share options outstanding account
The Share options outstanding account is used to record the fair value of equity-settled share-based payment
transactions with employees. The amounts recorded in share options outstanding account are transferred
to securities premium upon exercise of stock options and transferred to the general reserve on account of
stock options not exercised by employees.
(v) Retained earnings
Retained earnings comprises of the Company's undistributed earnings after taxes.
(vi) Securities premium
Securities premium The amount received in excess of face value of the equity shares is recognised in
Securities Premium.
Notes:
(i) Statutory bonus at the revised rates pertaining to year retrospective to the notification dated on 01.01.2016 (i.e.
from 01.04.2014 to 31.12.2015) was not provided pending similar cases contesting retrospective applicability
of the said notification in various Honourable High Courts. During November 2016, considering the industry
practices, the management after internal deliberations decided to and has paid the incremental bonus covering
the fiscal year of the said notification i.e. from 01.04.2015 to 31.12.2015 aggregating to ' 5.55 crore, which has
been presented as exceptional item in the financials for the year ended March 31, 2017. The incremental
bonus for the FY 2014-15 is continued as contingent liability pending similar cases contesting retrospective
applicability of the said notification in various Honourable High Courts.
(ii) The Company has ongoing disputes with Income Tax Authorities relating to tax treatment of certain items.
These mainly include disallowed expenses for Corporate tax, the tax treatment of certain expenses claimed
by the Company as deductions and the computation of certain allowances.
(iii) (a) Pertains to disputes in relation to Goods and service Tax Law on delayed export revenue realization for
financial year 2023-24. The alleged IGST demand is ' 1.30 crore along with interest of ' 0.29 crore (March
31, 2025: ' Nil crore).
(b) Rejection of Input tax credit amounting to ' 1.90 crore (March 31, 2025: ' Nil crore) along with interest of
' 2.11 crore and penalty of ' 2.08 crore (March 31, 2025: ' Nil crore) alleging that the eligibility conditions
as mentioned in Section 16 and 17 of CGST Act, 2017 have not been fulfilled.
(c) Demand for non-payment of GST liability under Reverse Charge Mechanism (RCM). The alleged GST
demand is ' 0.35 crore along with interest of ' 0.36 crore and penalty of ' 0.35 crore (March 31, 2025:
' Nil crore).
Considering the merit of the case, confirmation of demand is likely to be remote, hence contingent
liability has been disclosed to the tune of ' 8.74 crore (March 31, 2025: ' Nil crore) consisting of demand
of ' 3.55 crore (March 31, 2025: ' Nil crore), interest of ' 2.76 crore and penalty of ' 2.43 crore (March 31,
2025: ' Nil crore).
(iv) Service Tax Department had raised demand amounting to ' 5.10 crore (for the period April 2008 to September
2008 - ' 1.57 crore and for the period October 2008 to September 2009 - ' 3.54 crore) for delay in filing
the prescribed declaration for availing cenvat credit. Aggrieved by the order, company had preferred an
appeal with CESTAT. The appeal was decided in favour of the company during January 2016. Subsequently
service tax department filed an appeal with High Court in 2017. The case being question of law, the High Court
admitted the appeal in December 2018. Considering the merit of the case, confirmation of demand is likely to
be remote, hence contingent liability has been disclosed to the tune of ' 19.97 crore (March 31, 2025: ' 19.20
crore) consisting of demand of ' 5.10 crore and interest of ' 14.87 crore (March 31, 2025: ' 14.09 crore).
(v) It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above
pending resolution of the respective proceedings as it is determinable only on the receipt of the judgements/
decisions pending with various forums/authorities.
(vi) The Company does not expect any reimbursements in respect of the above contingent liabilities.
29 Segment reporting
Where a financial report contains both consolidated financial statements and separate financial statements of the
parent, segment information needs to be presented only in case of consolidated financial statements. Accordingly,
segment information has been provided only in the consolidated financial statements.
30 Employee benefit plans
The Company's contribution to defined contribution plan for each reporting year ended has been recognised in
the statement of Profit and Loss as follows:
In respect of the plan in India, the actuarial valuation of the plan assets and the present value of the definec
benefit obligation are carried out for year ended March 31, 2026 and year ended March 31, 2025 by Willis Tower:
Watson, Fellow of the Institute of Actuaries of India. The present value of the defined benefit obligation, and the
related current service cost and past service cost, are measured using the projected unit credit method on a
proportionate basis.
The fair value of plan assets are majorly balance mix of investments in government securities and other deb
instruments. The Trust activities are managed by mix of professional employees representing managemen
and employees.
(iv) Changes in tax rate - The applicable Indian statutory tax rate for the financial year 2025-26 is 25.17% and financial
year 2024-25 is 25.17%.
33 Capital Management
(a) Risk Management
The Company's capital comprises equity share capital, share premium, retained earnings and other equity
attributable to equity holders.
The Company's objectives when managing capital are to:
- safeguard their ability to continue as a going concern, so that they can continue to provide returns for
shareholders and benefits for other stakeholders, and
- maintain an optimal capital structure to reduce the cost of capital.
As there is no debt in Company, hence the debt ratio is not applicable.
The company has provided a Financial Corporate Guarantee for a long-term bank debt borrowed by one of it's
wholly owned subsidiaries. The company earns fees on this guarantee as per standard terms.
No changes were made in the objectives, policies or processes for managing capital of the Company during the
current year and previous year.
54 Employee Stock Option Plan (ESOP)
Share based long term incentive scheme 2022 (SLTI 2022)
On July 01, 2022, pursuant to approval by shareholders in Annual General Meeting, the board has been authorised
to introduce, offer, issue and provide share based incentives to eligible employees of the company and its
subsidiaries under Share based long term incentive scheme 2022 (SLTI 2022). Further the SLTI 2022 was ratified
by the shareholders through special resolution through postal ballot on March 15, 2024. The maximum number
of shares under plan shall not exceed 2,800,000 equity shares. The options would vest on achievement of
defined performance parameters as determined by Nomination and Remuneration committee. The performance
parameters are based on operating performance metrics of the company as decided by Nomination and
Remuneration committee. Each of the performance parameters will be distinct for the purpose of calculation of
36. (b) Dividends
During the year ended March 31, 2026, the Company has paid a total dividend of ' 11.70 per share (final
dividend ' 8.35 per share and one-time special dividend of ' 3.35 per share) in respect of the previous year
ended March 31, 2025 which was proposed by the Board of Directors on April 25, 2025, and was subsequently
approved by the shareholders at the Annual General Meeting, held on June 23, 2025, which has resulted in a
cash outflow of ' 474.63 crore.
Dividends are declared based on the profits available for distribution. On May 04, 2026, the Board of Directors
have proposed a final dividend of ' 8.35 per share and a one-time special dividend of ' 3.35 per share in
respect of the year ended March 31, 2026. The total proposed dividend for the year ended March 31, 2026
would be ' 11.70 per share, subject to approval of shareholders at the Annual General Meeting, and if approved,
would result in a cash outflow of approximately ' 475.00 crore.
36 (c). During the year ended March 31, 2026, the Company, through it's wholly owned subsidiary, Tata Technologies
Pte Ltd (Singapore) completed 100% acquisition of Es-Tec GmbH, Germany and its subsidiaries (collectively
called the Es-Tec Group), which are into the business of high end automotive engineering services with deep
know-how in ADAS, Connected Driving and Digital Engineering.
36 (d). Tata Motors Limited ("presently known as Tata Motors Passenger Vehicles Limited) ("TML"), the Holding
Company of Tata Technologies Limited, at its Board of Directors meeting held on August 01, 2024, approved
a Composite Scheme of Arrangement ("scheme") involving the demerger of its Commercial Vehicle ("CV")
business undertaking into TML Commercial Vehicles Limited and the merger of erstwhile Tata Motors
Passenger Vehicles Limited with the existing listed company TML thereby resulting in two separate listed
companies for the CV and Passenger Vehicle businesses. The scheme was approved by the Hon'ble National
Company Law Tribunal, Mumbai Bench, with appointed date of July 01, 2025. Pursuant to the approval of the
scheme being effective from October 01, 2025, Tata Motors Passenger Vehicle Limited (formerly Tata Motors
Limited) is the Holding Company of Tata Technologies Limited.
36 (e). On November 21, 2025, the Government of India notified the four Labour Codes - The Code on Wages, 2019, The
Industrial Relations Code, 2020, The Code on Social Security, 2020, and The Occupational Safety, Health and
Working Conditions Code, 2020 - consolidating 29 existing labour laws. The Ministry of Labour & Employment
published draft Central Rules and FAQs to enable assessment of the financial impact due to changes in
Regulations. The Company has evaluated and disclosed the incremental impact of these changes using the
best information currently available, consistent with the guidance provided by the Institute of Chartered
Accountants of India. The incremental impact for the year ended March 31, 2026, consisting of gratuity of
'56.82 crores and long-term compensated absences of '26.92 crores primarily arises due to change in wage
definition. During the quarter ended March 31, 2026, the Company has taken certain clarifications on the
gratuity payable and accordingly revised the provision arising due to Labour codes. The Company continues
to monitor the finalisation of Central/State Rules and clarifications from the Government on other aspects of
the Labour Code and would provide appropriate accounting effect based on such developments as needed.
36. (f) Additional regulatory information required by Schedule III
(i) Details of benami property held
No proceedings have been initiated or pending against the company under the Benami Transactions
(Prohibition) Act, 1988 (45 of 1988), the amendment in 2016 and the rules made thereunder.
(ii) Wilful defaulter
The Company is not declared wilful defaulter by any bank or financial Institution or government or any
government authority.
(iii) Borrowings secured against current assets
The Company does not have any borrowings from banks and financial institutions that are secured against
current assets during the year.
(iv) Relationship with struck off companies
The Company has no transactions with companies struck off under section 248 of the Companies Act, 2013
or section 560 of Companies Act, 1956.
(v) 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
Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017.
(vi) Compliance with approved scheme(s) of arrangements
The Company has not entered into any scheme of arrangement which has an accounting impact on current
or previous financial year.
(vii) 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.
(viii) 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.
(ix) Details of crypto currency or virtual currency
The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(x) Valuation of PPE, intangible asset and investment property
The Company has not revalued its Property, Plant and Equipment (including Right-of-Use Assets) or intangible
assets during the current or previous year.
(xi) Title deeds of immovable properties not held in name of the company
The title deeds of all the immovable property (other than properties where the Company is the lessee and
the lease agreements are duly executed in favour of the lessee) are held in the name of the company.
(xii) Registration of charges or satisfaction with Registrar of Companies (ROC)
There are no charges or satisfaction which are yet to be registered with ROC beyond the statutory period.
(xiii) Utilisation of borrowings availed from bank and financial institutions
The Company does not have any borrowings from banks and financial institutions as at the balance sheet date.
37. Subsequent events
The Company has evaluated all events or transactions that occurred between reporting date March 31, 2026 and
May 04, 2026, the date the financial statements were authorised for issue by the Board of Directors.
38. During the previous year, the Company had incorporated an associate company viz. BMW TechWorks India Private
Limited (BTIPL) pursuant to its agreement with BMW Holding B.V (other investor). Pursuant to this agreement with
BMW Holding B.V. (other investor), the partners have call and put options for purchase/sale of stake in the BMW
TechWorks India Private Limited (BTIPL). As required by Ind AS 109, the call/put option is a financial instrument
which has been measured at fair value at inception and the gain on initial recognition of the financial instrument is
recognized on a systematic basis over the period as defined in the agreement. Accordingly, other income includes
an amount of ' 33.24 crore (' 16.62 crore for the year ended March 31, 2025) from unwinding of liability and ' 9.15
crore (' 2.47 crore for the year ended March 31, 2025) towards fair valuation of financial asset for the year ended
March 31, 2026. Refer Note 35.2(b) on the disclosure of financial instruments.
39. Previous period's figures have been regrouped/reclassified wherever necessary to correspond with current
period's classification/disclosure.
As per our report of even date attached
For B S R & Co. LLP For and on behalf of the Board
Chartered Accountants
Firm Registration No: 101248W/W -100022
Swapnil Dakshindas Ajoyendra Mukherjee Warren Harris
Partner Chairman Managing Director
Membership No: 113896 DIN: 00350269 DIN: 02098548
Uttam Gujrati Raghav Mulay
Chief Financial Officer Company Secretary
Membership No: ACS 25793
Mumbai: May 04, 2026 Mumbai: May 04, 2026
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