q. Provisions and Contingent liability
Provisions
General
Provisions are recognised when the Company has
a present obligation (legal or constructive) as a
result of a past event, it is probable that an outflow
of resources embodying economic benefits will
be required to settle the obligation and a reliable
estimate can be made of the amount of the
obligation. When the Company expects some or
all of a provision to be reimbursed, for example,
under an insurance contract, the reimbursement
is recognised as a separate asset, but only when
the reimbursement is virtually certain. The expense
relating to a provision is presented in the statement
of profit and loss net of any reimbursement.
If the effect of the time value of money is material,
provisions are discounted using a current pre-tax
rate that reflects, when appropriate, the risks
specific to the liability. When discounting is used,
the increase in the provision due to the passage
of time is recognised as a finance cost.
Contingent Liability
Contingent liability is:
(i) a possible obligation arising from past events
and whose existence will be confirmed only
by the occurrence or non-occurrence of one
or more uncertain future events not wholly
within the control of the entity or
(ii) a present obligation that arises from past
events but is not recognized because;
- it is not probable that an outflow
of resources embodying economic
benefits will be required to settle the
obligation, or
- the amount of the obligation cannot be
measured with sufficient reliability
The Company does not recognize a
contingent liability but discloses its existence
and other required disclosures in notes to the
financial statements, unless the possibility of
any outflow in settlement is remote.
r. Segment Reporting
The Executive Management Committee is the
Chief Operating Decision Maker (CODM) and
monitors the operating results of its business units
separately for the purpose of making decisions
about resource allocation and performance
assessment. Segment performance is evaluated
based on profit or loss and is measured
consistently with profit or loss in the standalone
financial statements. The Company's loan given
to subsidiaries and Investment made, interest
receivables, finance income and income taxes,
deferred tax are managed on a Company basis
and are not allocated to operating segments.
Transfer prices between operating segments are
on an arm's length basis in a manner similar to
transactions with third parties.
s. Cash and Cash Equivalents
Cash and cash equivalent in the balance sheet
comprise cash at banks and on hand and
short-term deposits with an original maturity
of three months or less, which are subject
to an insignificant risk of changes in value.
For the purpose of the statement of cash flows,
cash and cash equivalents consist of cash and
short-term deposits, as defined above as they are
considered an integral part of the Company's cash
management.
t. Earnings per share
Basic earnings per share are calculated by
dividing the net profit or loss (after tax) for the
year attributable to equity shareholders by the
weighted average number of equity shares
outstanding during the year.
Diluted earnings per share when applicable are
calculated by dividing the net profit or loss (after
tax) for the year attributable to equity shareholders
by the weighted average number of equity shares
which would be issued on the conversion of all the
dilutive potential equity shares into equity shares.
Dilutive potential equity shares when applicable
are deemed converted as of the beginning of
the period, unless they have been issued at a
later date.
u. Share Based Payments
Employees (including senior executives) of
the Company and its one subsidiary, receive
remuneration in the form of share-based
payments, whereby employees render services
as consideration for equity instruments
(equity-settled transactions).
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. Further details are given in Note 42.
That cost is recognised, together with a
corresponding increase in share-based payment
(SBP) reserves 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 Group's best estimate of the
number of equity instruments that will ultimately
vest. The expense or credit in the statement
of profit and loss 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.
With respect to ESOP granted to employee of
subsidiary Company, the same has been treated
as deemed investment in the financial statements
of the Company and equity contribution in the
financial statements of subsidiary company.
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 Group'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.
When the terms of an equity-settled award are
modified, the minimum expense recognised
is the grant date fair value of the unmodified
award, provided the original vesting terms of the
award are met. An additional expense, measured
as at the date of modification, is recognised for
any modification that increases the total fair
value of the share-based payment transaction,
or is otherwise beneficial to the employee.
Where an award is cancelled by the entity or by
the counterparty, any remaining element of the
fair value of the award is expensed immediately
through profit or loss.
The dilutive effect of outstanding options is
reflected as additional share dilution in the
computation of diluted earnings per share.
v. Supplier finance arrangement
The Company enters into supplier finance
arrangements (commonly known as reverse
factoring) with RBI regulated digital TReDS
(Trade Receivables Discounting System) platform.
Under these arrangements, the participating
parties settles supplier invoices on their respective
due dates or earlier. The Company subsequently
settles the obligation directly with the TReDS in
accordance with extended payment terms.
Because these arrangements provide extended
credit periods and involve a financial intermediary
acting as a primary obligor of the deferred
payment, the Company has determined that
the economic substance of these obligations
represents a financing arrangement rather than
a traditional trade payable. Consequently, these
liabilities are classified as Trade credits from banks
and others on the balance sheet. Interest expense
and fees associated with these arrangements are
recognized in Finance costs.
w. Events after the reporting period
If the Company receives information after the
reporting period, but prior to the date of approved
for issue, about conditions that existed at the end
of the reporting period, it will assess whether the
information affects the amounts that it recognises
in its separate financial statements. The Company
will adjust the amounts recognised in its financial
statements to reflect any adjusting events after
the reporting period and update the disclosures
that relate to those conditions in light of the new
information. For non-adjusting events after the
reporting period, the Company will not change
the amounts recognised in its separate financial
statements but will disclose the nature of the
non-adjusting event and an estimate of its financial
effect, or a statement that such an estimate cannot
be made, if applicable.
2.3 New and amended Standard adopted by the
Company
The Company applied for the first-time certain
standards and amendments, which are effective for
annual periods beginning on or after 1 April 2025.
The Company has not early adopted any standard,
interpretation or amendment that has been issued but
is not yet effective.
a. Lack of exchangeability - Amendments to
Ind AS 21
The Ministry of Corporate Affairs notified
amendments to Ind AS 21- The Effects of Changes
in Foreign Exchange Rates to specify how an entity
should assess whether a currency is exchangeable
and how it should determine a spot exchange rate
when exchangeability is lacking. The amendments
also require disclosure of information that enables
users of its financial statements to understand
how the currency not being exchangeable into the
other currency affects, or is expected to affect, the
entity's financial performance, financial position
and cash flows.
The application of above amendments does not
have material impact on the Company's separate
financial statements.
b. Amendments to Ind AS 7 and Ind AS 107 - Supplier
Finance Arrangements
In August 2025, the MCA notified amendments
to Ind AS 7 Statement of Cash Flows and Ind
AS 107 Financial Instruments: Disclosures to
clarify the characteristics of supplier finance
arrangements and require additional disclosure of
such arrangements. The disclosure requirements
in the amendments are intended to assist users of
financial statements in understanding the effects
of supplier finance arrangements on an entity's
liabilities, cash flows and exposure to liquidity risk.
As a result of implementing the amendments,
the Company has provided additional disclosures
about its supplier finance arrangement.
The application of above amendments does not
have material impact on the Company's separate
financial statements.
c. International Tax Reform—Pillar Two Model
Rules - Amendments to Ind AS 12
In August 2025, the MCA notified amendments to
Ind AS 12 Income Taxes in response to the OECD's
BEPS Pillar Two rules and include:
(i) A mandatory temporary exception to the
recognition and disclosure of deferred taxes
arising from the jurisdictional implementation
of the Pillar Two model rules; and
(ii) Disclosure requirements for affected entities
to help users of the financial statements better
understand an entity's exposure to Pillar Two
income taxes arising from that legislation,
particularly before its effective date.
The mandatory temporary exception - the
use of which is required to be disclosed -
applies immediately. The remaining disclosure
requirements apply for annual reporting periods
beginning on or after 1 April 2025, but not for any
interim periods ending on or before 31st March 2026.
The amendments had no impact on the Company's
consolidated financial statements as the Company
is not in scope of the Pillar Two model rules."
d. Amendments to Ind AS 1 - Classification of
Liabilities as Current or Non-current and Non¬
current Liabilities with Covenants
In August 2025, the MCA notified amendments
to paragraphs 69 to 76 of Ind AS 1 to specify the
requirements for classifying liabilities as current or
non-current. The amendments clarify:
• What is meant by a right to defer settlement
• That a right to defer must exist at the end of
the reporting period
• That classification is unaffected by the
likelihood that an entity will exercise its
deferral right
• That only if an embedded derivative
in a convertible liability is itself an
equity instrument would the terms of
a liability not impact its classification
In addition, a requirement has been introduced
to require disclosure when a liability arising
from a loan agreement is classified as
non-current and the entity's right to defer
settlement is contingent on compliance with
future covenants within twelve months.
If there is a breach of a material covenant of a
long term loan arrangement on or before the end
of the reporting period, resulting in the liability
becoming payable on demand as at the reporting
date, and the lender agrees—after the reporting
period but before the financial statements are
approved for issue—not to demand repayment
for at least 12 months as a consequence of the
breach, this shall be treated as an adjusting event.
Accordingly, the entity is not required to classify
the liability as current.
The amendments are effective for annual
reporting periods beginning on or after 1
April 2025 retrospectively in accordance with Ind
AS 8. The amendments had no impact on the
Company's standalone financial statements.
2.4 Climate - related matters
The Company considers climate-related matters
in estimates and assumptions, where appropriate.
This assessment includes a wide range of possible
impacts on the Company due to both physical and
transition risks. Even though the Company believes its
business model and products will still be viable after the
transition to a low-carbon economy, climate-related
matters increase the uncertainty in estimates and
assumptions underpinning several items in the financial
statements. Even though climate-related risks might not
currently have a significant impact on measurement, the
Company is closely monitoring relevant changes and
developments, such as new climate-related legislation.
2.5 Standards issued but not yet effective
The new and amended standards that are notified by
the Ministry of Corporate Affairs (MCA), but not yet
effective, up to the date of issuance of the Company's
financial statements are disclosed below. The Company
will adopt these amendments to the standards, when
they become effective.
(i) Amendments to Ind AS 1 - Classification of
Liabilities as Current or Non-current and Non¬
current Liabilities with Covenants
In accordance with Ind AS 1 currently applicable,
breach of an immaterial covenant is ignored
deciding in current vs. non-current classification
of liabilities. Also, in case of breach of a material
covenant of a non-current loan on or before the
reporting date, the entity can obtain waiver from
the lender after the reporting date and continue
to classify the loan as non-current liability.
In accordance with changes to Ind AS 1 already
notified by the MCA, the above relaxations to
classify loan as non-current liability will not be
available from FY 2026-27 onward and need to
be applied retrospectively. Consequently:
• A breach of either material or immaterial
covenant will trigger current classification of
liability.
• To continue classifying loan as non-current
liability, entities will need to obtain waiver from
the breach on or before the reporting date.
The Company is currently assessing the impact the
amendments will have on its financial statements.
Notes:
i) On transition to Ind AS (i.e. 1 April 2016), the Company had elected to continue with the carrying value of all
property, plant and equipment measured as per previous GAAP and use that carrying value as the deemed cost
of property, plant and equipment.
ii) Capital work-in-progress
Capital work-in progress is comprised of expenditure on buildings under construction in respect of factory
buildings and capital expenditure on plant and machinery.
iii) Property plant and equipment pledged as security
Refer note 11(A) and 11(B) for information on property, plant and equipment pledged as security for borrowings
by the Company.
iv) Contractual obligations
Refer note 32(A) for disclosure of contractual commitments for the acquisition of property, plant and
equipment.
v) Capitalised borrowing cost
Borrowing cost capitalised in case of property, plant and equipment under construction for the year ended
31st March 2026 of Rs 623.19 lacs (31st March 2025: Rs 369.23 lacs). The rate used to determine the amount of
borrowing costs eligible for capitalisation was 9.20% (31st March 2025: 9.65%) which is the effective interest rate
of the specific borrowing.
vi) Assets held in the name of the Company
The title deeds of all immovable properties (i.e. land and building) are held in the name of the Company as at
31st March 2026 and 31st March 2025.
(a) includes deemed investment of Rs. 15.18 lacs (March 31st, 2025: 46.03 lacs ) on account of employee stock options
granted to the employees of Malwa Power Pvt. Ltd., subsidiary company which has been considered as deemed
investment by the Company in its subsidiary company.
(b) The Company has made investment in its subsidiary "Dee Piping Systems Thailand Co., Ltd" to have wider market
spread and overall growth of group. The subsidiary company is in initial stage of its operation and therefore it
has accumulated loss, which are envisaged. The subsidiary company has started making profits from current year.
The Company has assessed the recoverability of its investments (including loans and interest thereon) considering
discounted cash flow method and has concluded that there is no impairment of its investments.
(c) The Company has made investment in its wholly owned subsidiary, which is a non profit making company formed
under the provisions of section 8 of the Companies Act, 2013.
(d) During the year, the Company acquired 35,000 equity shares of Molsieve Designs Limited, having a face value of
Rs 10 each, fully paid-up, for a total consideration of Rs 658.82 lacs, thereby obtaining 70% equity shareholding
and control over the investee. Accordingly, Molsieve Designs Limited has become a subsidiary of the Company
with effect from the date of acquisition.
- No trade or other receivable are due from directors or other officers of the Company either severally or jointly
with any other person. Nor any trade or other receivable are due from firms or private companies, respectively
in which any director is a partner, a director or a member other than those disclosed in note 31.
- For terms and conditions relating to related party receivables, refer note 31
- Trade receivables are non-interest bearing and are generally on terms of 30 to 180 days.
- Pursuant to an arrangement with the customers, the Company has sold certain of its trade receivables to the
customer's designated supplier chain finance provider on a non-recourse basis. The receivables sold were
mutually agreed upon with the respective bank after considering the creditworthiness and contractual terms with
the customer. The Company has derecognized trade receivables amounting INR 15,938.75 lacs (March 31, 2025:
INR 4,186.33 lacs ) as it had transferred the contractual right and substantially transferred all risks and rewards of
ownership of these receivables and there is no significant continuing involvement
* Deposits given as margin money against non fund based facilities (letter of credit, buyer's credit, bank guarantee)
and collateral security
As at 31st March 2026, the Company has INR 1,304.77 lacs (31st March 2025: INR 4,964.13 lacs) of undrawn borrowing
facilities from various banks.
Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for
varying periods of between one day and three months, depending on the immediate cash requirements of the
Company, and earn interest at the respective short-term deposit rates.
Changes in liabilities arising from financing activities
(B) i) Terms/ rights attached to equity shares:
The Company has only one class of equity shares having par value of INR 10 per share. Each shareholder is entitled
to one vote per share. The dividend except interim dividend proposed by the Board of Directors is subject to the
approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company,
the equity shareholders will be entitled to receive the remaining assets of the Company after distribution of all
preferential amounts, in proportion to their shareholding."
ii) Terms/ rights attached to preference shares
Each convertible preference share has a par value of INR 10 per share and is convertible at the option of the
shareholders into Equity shares of the Company. The preference shares rank ahead of the equity shares in the
event of a liquidation. The Company has not issued the preference share capital."
iii) Share reserved for issue under options
For details of share reserved for issue under the share based payments plan of the Company, please refer note 42."
General reserve
Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at
a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that
if a dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then
the total dividend distribution is less than the total distributable results for that year. Consequent to introduction
of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general
reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only
in accordance with the specific requirements of Companies Act, 2013.
Capital redemption reserve
The Capital redemption reserve has been created in accordance with provision of the Companies Act, 2013 with respect
to buy back of equity shares from the market during the previous year.
Retained earnings
Retained earnings are the profits/(loss) that the Company has earned/incurred till date, less any transfers to general
reserve, dividends or other distributions paid to shareholders. Retained earnings include re-measurement loss / (gain)
on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss.
Employee stock option outstanding reserve
Employee stock option outstanding reserve is used to record the fair value of equity-settled share based payment
transactions with employees.
i) Security clauses
a) Term loan of Rs. 15,676.32 lacs (31st March 2025: INR 7,562.53 lacs) is secured by way of
i) First pari-passu charge on the fixed assets and current assets of the Piping Unit of the Company ii) exclusive
charges on the current assets of the 8 MW power plant, of the Company iii) first pari-passu charges on the Land
& Building situated at plant No-1 and 2, Tatarpur Road, District. Palwal iv) first pari-passu charge on the property
situated at Jatola Road, Tatarpur Industrial Area Maidapur, Tehsil & Distt. Palwal measuring 1,770.00 sq. Yards, v)
first pari-passu charge on the fixed deposit of Rs. 350 lacs. vi) second pari-passu charge on the basis of equitable
mortgage over residential house situated at 1255, sector 14 Faridabad, ownership in the name of Mr. Krishan Lalit
Bansal [(Chairman and Managing Director) (area 500 Sq. yards)], vii) first pari-passu charges basis on net block of
the 8 MW power unit at Gaddadhob, Tehsil - Abohar, Distt - Firozpur, Punjab viii) first pari-passu charge on the
property situated at Unit 11, Unit 12 and Unit 13, First Floor, Block No: II SIDCO Electronic Complex, Thiru VI Ka
Industrial Estate, Gundy, Chennai, measuring 5,231.07 Sq. ft. in the name of the Company. ix) Pari-passu charge
with other Term Lender for the new unit on the project asset funded out of Term Loan by way of hypothecation
on entire plant and machineries and MFA of that unit. x) Pari-passu charge by way of Equitable Mortgage of
factory land and building at the proposed plant measuring 9 Acres (approx) situated at REVENUE Survey No.
28 P/1, Village - Lakhapar, State Highway Satapar Lakhapar Road, Taluka Anjaar, Dist Kutch, Gujarat, with other
Term Lender of the new unit xi) Pari-passu charge by way of Equitable Mortgage of factory land, building and
sheds at the proposed plant on land measuring of 34 Acres 28 Guntha (approx) situated at revenue survey No.
576/1, 567/2, 568/1, 579/Paiki 3, 579/Paiki 2, 578, 577/Paiki 1, with other Term Lender of the new unit.
b) Further, term loan are secured by Irrevocable and unconditional, joint and several personal guarantee of the
promoters and corporate guarantee of DDE Piping Components Private Limited.
c) Vehicle loan
Term loan of INR 225.97 lacs (31st March 2025: INR 267.38 lacs) is secured by way of charges on vehicle owned
by the Company against which such loan is obtained.
d) Unsecured Loan
Loan of INR 102.98 lacs is taken from Cisco Systems Capital (India) Private Limited
ii) Loan Covenants:
Term loan contain certain debt covenants relating to security cover, debt-equity ratio the Company has satisfied
all debt covenants prescribed in the terms of term loan.
iii) The Company has not defaulted on any loans payable.
iv) All term loans availed by the Company have been utilised for the purpose for which they have been obtained.
Notes:
i) Security clauses
a) The rate of interest for loan taken from banks is ranging from 4.08 % p.a. to 10.75% p.a. (31st March, 2025 - 3.36
% p.a. to 11.75% p.a.)
b) Cash credit facilities, Bills Discounting, Working Capital Demand Loan, Buyer credit and Export Packing Credit of
INR 47,658.31 lacs (31st March 2025: INR 26,352.84 lacs) is secured by way of
i) first pari-passu charge on the fixed assets and current assets of the Piping Unit of the Company ii) exclusive
charges on the current assets of the 8 MW power plant, of the Company iii) first pari-passu charges on the Land
& Building situated at plant No-1 and 2, Tatarpur Road, District. Palwal iv) first pari-passu charge on the property
situated at Jatola Road, Tatarpur Industrial Area Maidapur, Tehsil & Distt. Palwal measuring 1,770.00 sq. Yards, v)
first pari-passu charge on the fixed deposit of INR 350 lacs, vi) first on pari-passu basis by way of equitable
mortgage over residential house situated at 1255, sector 14 Faridabad, ownership in the name of Mr. Krishan Lalit
Bansal [(Chairman and Managing Director) (area 500 Sq yards)], vii) first pari-passu charges basis on net block of
the 8 MW power unit at Gaddadhob, Tehsil - Abohar, Distt - Firozpur, Punjab viii) first pari-passu charge on the
property situated at Unit 11, Unit 12 and Unit 13 First Floor, Block No: II SIDCO Electronic Complex, Thiru VI Ka
Industrial Estate, Gundy, Chennai, measuring 2,053 sq. ft. in the name of the Company. ix) 2nd charge on Pari-Passu
basis on the Fixed assets of Gujarat Unit (Lakhapar) of the Company. x) 2nd charge on Pari-Passu basis on the Fixed
assets of Piping Unit of the company( Excluding properties charged under 1sr Pari passu basis & Gujarat Unit) xi)
exclusive charge by way of Pledge of TDR of Face Value Rs. 15 Lacs.
c) Further, Cash credit, WCDL and Buyer Credit are secured by Irrevocable and unconditional, joint and several
personal guarantee of the promoters and corporate guarantee of DDE Piping Components Private Limited.
d) The rate of interest for loan taken from Non Banking Financial Company is 7.22% p.a. ( 31st March 2025: 11.75 %
p.a. to 15.00% p.a.).
e) Unsecured and non-interest bearing loan from director.
Performance obligation
Information about the Company's performance obligations for material contracts are summarised below:
The performance obligation of the Company in case of sale of products is satisfied once the goods are transported
as per terms of order and control is transferred to the customers.
The customer makes the payment for contracted price as per terms stipulated under customers purchase order.
Information about the Company's performance obligations for electricity supply contract are summarised below:
The performance obligation of the Company in case of sale of electricity is based on supply of electricity through
installed meters. Revenue from sales of electricity is accounted for on the basis of billing to customer based on billing
cycles followed by the Company.
The customer makes the payment for electricity supplied during the billing cycle at contracted price as per terms
stipulated under agreement.
28 Earnings per share (EPS)
Basic EPS amounts is calculated by dividing the profit for the year attributable to equity holders of the Company by
the weighted average number of equity shares outstanding during the year.
Diluted EPS amounts is calculated by dividing the profit attributable to equity shareholders of the Company by the
weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity
shares that would be issued on conversion of all the dilutive potential Equity shares into equity shares.
29 Significant accounting judgements, estimates and assumptions
The preparation of the Company's financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying
disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result
in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Other disclosures relating to the Company's exposure to risks and uncertainties includes:
• Capital management Note 37
• Financial risk management objectives and policies Note 36
• Sensitivity analyses disclosures Notes 36
Judgements
In the process of applying the Company's accounting policies, management has made the following judgements,
which have the most significant effect on the amounts recognised in the Standalone financial statements.
Determining the lease term of contracts with renewal and termination options - Company as lessee
The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered
by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to
terminate the lease, if it is reasonably certain not to be exercised.
The Company has several lease contracts that include extension and termination options. The Company applies
judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate
the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal
or termination. After the commencement date, the Company reassesses the lease term if there is a significant event
or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to
renew or to terminate (e.g., construction of significant leasehold improvements or significant customisation to the
right-of-use assets).
The Company included the renewal period as part of the lease term for leases of land with shorter non-cancellable
period (i.e., three to five years). The Company typically exercises its option to renew for these leases because there
will be a significant negative effect on production if factory land is not readily available.
Refer to Note 38 for information on potential future rental payments of leases.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date,
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
next financial year, are described below. The Company based its assumptions and estimates on parameters available
when the financial statements were prepared. Existing circumstances and assumptions about future developments,
however, may change due to market changes or circumstances arising that are beyond the control of the Company.
Such changes are reflected in the assumptions when they occur.
Valuation of Investment in subsidiaries
Investments in subsidiaries are carried at cost. At each balance sheet date, the management assesses the indicators of
impairment of such investments. This requires assessment of several external and internal factor including capitalisation
rate, key assumption used in discounted cash flow models (such as revenue growth, unit price and discount rates) or
sales comparison method which may affect the carrying value of investments in subsidiaries.
Impairment of non-financial assets
Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which
is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation
is based on available data from binding sales transactions, conducted at arm's length, for similar assets or observable
market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model.
The cash flows are derived from the budget for the next five years and do not include restructuring activities that the
Company is not yet committed to or significant future investments that will enhance the asset's performance of the
CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the
expected future cash-inflows and the growth rate used for extrapolation purposes.
Intangible asset under development
Leases - Estimating the incremental borrowing rate
The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing
rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow
over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-
use asset in a similar economic environment. The IBR therefore reflects what the Company 'would have to pay', which
requires estimation when no observable rates are available. The Company estimates the IBR using observable inputs
(such as market interest rates) when available and is required to make certain entity-specific estimates (such as the
subsidiary's stand-alone credit rating).
Taxes
Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which
the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax
assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future
tax planning strategies.
Defined benefit plans (gratuity)
The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined
using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual
developments in the future. These include the determination of the discount rate; future salary increases and mortality
rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly
sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
The calculation is most sensitive to changes in the discount rate. In determining the appropriate discount rate for plans
operated in India, the management considers the interest rates of government bonds where remaining maturity of
such bond correspond to expected term of defined benefit obligation.
The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval
in response to demographic changes. Future salary increases and gratuity increases are based on expected future
inflation rates.
Further details about gratuity obligations are given in Note 30.
Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured
based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF
model. The inputs to these models are taken from observable markets where possible, but where this is not feasible,
a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as
liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value
of financial instruments. Refer note 34 for further disclosures.
Useful Lives of Property Plant and Equipment
The Company reviews the estimated residual values and expected useful lives of assets at least annually. In particular,
the Company considers the impact of health, safety and environmental legislation in its assessment of expected useful
lives and estimated residual values. Refer note (2(h)) in accounting policies.
Share-based payments
Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation
model, which depends on the terms and conditions of the grant. This estimate also requires determination of the most
appropriate inputs to the valuation model including the expected life of the share option or appreciation right, volatility
and dividend yield and making assumptions about them. For the measurement of the fair value of equity-settled
transactions with employees at the grant date, the Company uses Black-Scholes Model for share Option Plan given
to employees. The assumptions and models used for estimating fair value for share-based payment transactions are
disclosed in Note 42.
Provision for expected credit losses of trade receivables
The Company uses a provision matrix to calculate ECLs for trade receivables. The provision rates are based on days
past due for companyings of various customer segments that have similar loss patterns (i.e., by geography, product
type, customer type and rating, and coverage by letters of credit and other forms of credit insurance).
The provision matrix is initially based on the Company's historical observed default rates. The Company will calibrate
the matrix to adjust the historical credit loss experience with forward-looking information. For instance, if forecast
economic conditions (i.e., gross domestic product) are expected to deteriorate over the next year which can lead to an
increased number of defaults in the manufacturing sector, the historical default rates are adjusted. At every reporting
date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.
The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a
significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions.
The Company's historical credit loss experience and forecast of economic conditions may also not be representative of
customer's actual default in the future. The information about the ECLs on the Company's trade receivables is disclosed
in Note 6(A).
30 Gratuity and other post-employment benefit plans
A. Defined benefit plans - general description
The Company has a defined gratuity benefit plan. Every employee who completes service of five years or more gets
a gratuity of 15 days salary (last drawn salary) for each completed year of service. The obligation towards gratuity is
being measured using projected credit line method. The Company has funded its gratuity liability.
The following tables summaries the components of net benefit expense recognised in the Statement of Profit and
Loss and the funded status and amounts recognised in the balance sheet for the plan (based on actuarial valuation) :
(E) Terms and conditions of transactions with related parties
(i) Sales to related parties and concerned balances:
For terms of transaction
Sales are made to related parties on the same terms as applicable to third parties in an arm's length transaction
and in the ordinary course of business. The Company mutually negotiates and agrees sales price, discount
and payment terms with the related parties by benchmarking the same to transactions with non-related
parties, who purchase goods and services of the Company in similar quantities. Such sales generally include
payment terms requiring related party to make payment within 30 to 180 days from the date of invoice.
For terms of balance
(ii) Trade receivables outstanding balances are unsecured, interest free and require settlement in cash. No guarantee
or other security has been received against these receivables. The amounts are recoverable within 30 to 180 days from
the reporting date (31st March 2025: 30 to 180 days from the reporting date). For the year ended 31st March 2026, the
Company has not recorded any impairment on receivables due from related parties (31st March 2025: Nil)"
(ii) Purchases of goods and related balances
For terms of transaction
Purchases are made from related parties on the same terms as applicable to third parties in an arm's length transaction
and in the ordinary course of business. The Company mutually negotiates and agrees purchase price and payment
terms with the related parties by benchmarking the same to sale transactions with non-related parties entered into by
the counter-party and similar purchase transactions entered into by the Company with the other non-related parties.
Such purchases generally include payment terms requiring the Company to make payment within 0 to 75 days from
the date of invoice.
For terms of balance
Trade payables outstanding balances are unsecured, interest free and require settlement in cash. No guarantee or
other security has been given against these payables. The amounts are payable within 0 to 75 days from the reporting
date (31st March 2025: 0 to 75 days from the reporting date).
(iii) Services received from related parties
a) Job work
The Company has received the Job work services on the same terms as applicable to third parties in an arm's length
transaction and in the ordinary course of business. The Company mutually negotiated and agrees the price and
payment terms with the related parties by benchmarking the same to the services to non-related parties entered
into by the counter-party and similar services received by the Company from other non-related parties. The service
agreement included payment terms requiring the Company to make payment within 0 to 75 days from the date of
invoice. The amount was fully repaid at the reporting date. "
b) Rent
The Company has taken factory building on lease from subsidiary Company on short term basis. At the end of
lease term, the lease agreement is renewable based on mutual negotiation and agreement. For the year ended
31st March 2026, the Company has not recorded any impairment on lease payments due from the related party
(31st March 2025: Nil).
(iv) Items of Property, Plant and Equipment (PPE) purchased from the related party
During the year 2025-26, the Company has purchased items of PPE from DEE Fabricom India Private Limited.
The purchase was made on the same terms as applicable to third parties in an arm's length transaction and in the
ordinary course of business. The Company mutually negotiated and agreed purchase price and payment terms with
DEE Fabricom India Private Limited by benchmarking the same to sale transactions with non-related parties entered
into by the counter-party and similar purchase transactions entered into by the Company with the other non-related
parties. Such purchases generally include payment terms requiring the Company to make payment within 30 to 60
days from the date of invoice. The amount was fully repaid at the reporting date.
(v) Loans given to related parties
The loans granted to subsidiaries was given in the previous years to finance the setup of plant and to support
working capital requirements of these subsidiaries. The loan has been utilized by the subsidiaries for the purpose
it was obtained. The loans are un-secured. For the year ended 31st March 2026, the Company has not recorded any
impairment on loans due from subsidiaries (31st March 2025: Nil).
(vi) Guarantees given on behalf of related parties
The Company has given guarantee against loan amounting to INR 4,216.33 lacs obtained by Malwa Power Private
Limited and DEE Fabricom India Private Limited in current year. The loan has been utilized by these subsidiaries for the
purpose it was obtained. The loan is first secured against the equipment purchased from the loan. The Guarantee given
by the Company will require it to make specified payments to reimburse the bank for the loss it incurs if subsidiaries fails
to make payment when due in accordance with the original terms of the loan arrangement. The Company is entitled
to recover losses from subsidiaries if it needs to make any payment to bank under the guarantee arrangement.
The Company has not received any commission from subsidiaries for providing the guarantee. The Company expects
that subsidiaries will make payment to the bank when loan is repayable. For the year ended 31st March 2026, the
Company has not recorded any impairment on guarantee arrangement (31st March 2025: Nil).
(vii) Settlement of liabilities by the Company on behalf of the related party
The Company makes certain payment on behalf of related parties. In such cases, reimbursement from the related
party are due within period of 15 to 30 days. The amount recoverable are unsecured and interest free. The Company
has not recorded any impairment on such amount due from the related parties (31st March 2025: Nil).
(viii) Compensation to KMP of the Company
The amounts disclosed in the table are the amounts recognised as an expense during the financial year related to KMP.
(ix) Key managerial personnel' interest in the Employee Stock Option Scheme 2023
Equity settled share options held by the Key Managerial Personnel along with their relatives of the Company under
the Employee Stock Option Scheme 2023 to purchase equity shares have the following vesting date, expiry dates and
exercise prices:
a) The Income Tax Authorities have raised demands on account of disallowances of certain expenditures pertaining
to different assessment years. The Company is contesting these demands, which are pending at various appellate
levels. Based on the advice from independent tax experts and the development on the appeals, the management
is confident that additional tax so demanded with reference to these cases will not be sustained on completion
of the appellate proceedings and accordingly, pending the decision by the appellate authorities, no provision has
been considered in the financial statements. Further, the income tax authorities have issued notices for initiation
of penalty proceedings in respect of various assessment years, which has been appropriately responded by the
Company and there is no further demands raised by the income tax authorities.
b) The Excise/ GST Authorities have raised demands on account of non payment of excise duty on certain goods.
The Company is contesting these demands, which are pending at various appellate levels. Based on the advice
from independent experts and the development on the appeals, the management is confident that the demands
raised by Excise/GST Authorities is not tenable and accordingly no provision has been considered in the financial
statements.
c) The Company is of the view that it will be able to fulfil its underlying export obligations amounting to INR 20,237.29
lacs for the year ended March 31, 2026. Accordingly, no adjustment is required in the financial statements
d) The Company is currently involved in a legal dispute with Hyundai Merchant Marine India Private Limited (HMMIPL)
relating to the import of raw materials in earlier years. The Company has raised claims of INR 127.89 lakhs against
HMMIPL and in response, HMMIPL has lodged counterclaims amounting to INR 178.49 lakhs. Currently in ongoing
litigation, the Company is confident in its legal position based on evaluations and advice, and believes that there
will be no outflow of the company's economic resources and accordingly no provision has been considered in
the financial statements.
e) The Company had received a Demand notice from the Commissioner of Customs demanding payment of
customs duty of INR 815.09 lacs and imposed penalty of INR 305.00 lacs. This demand was made due to alleged
non-compliance with pre-import and physical export conditions related to raw materials imported in previous
years. The Company has evaluated the demand raised by the authorities and company had filled appeal before
honourable CESTAT after paying 7.5% of INR 815.09 lacs under protest. Based on the advice from independent
experts, the management is confident that the demands raised by Custom Authorities is not tenable.
f) On May 19, 2023, the Enforcement Directorate issued a notice in accordance with FEMA regulations, requesting
specific information related to the Company's operations and financial transactions. The Company duly furnished
the required information to the relevant authority on August 25, 2023, ensuring compliance with FEMA regulations.
g) The Customs Authorities have issued a demand for antidumping duty regarding imports of seamless carbon steel
pipes in earlier years. The notice requires payment of the necessary antidumping duty amounting to Rs 72.43
lacs. Based on expert advice, the Company has made provision of Rs 38.15 lacs for potential exposure, and the
remaining demanded duty balance of Rs 34.28 lacs is not payable as the goods were imported under an advance
authorization.
h) The Customs Authorities have asked the Company to submit the Bank Realization Certificate (BRC) or any
other documentary evidence establishing realization of export proceeds in foreign exchange in respect of few
Shipping Bills.
C. Guarantees
The Company has given corporate guarantee for loans taken by subsidiary companies, to the extent loan amount
outstanding as on balance sheet date. The carrying amounts of the related financial guarantee contracts were INR
668.89 lacs at 31st March 2026 and INR 5,220.12 lacs at 31st March 2025 respectively.
33 Segment reporting
A Basis for segmentation
The Executive Management Committee monitors the operating results of its business units separately for the purpose
of making decisions about resource allocation and performance assessment. Segment performance is evaluated
based on profit or loss and is measured consistently with profit or loss in the standalone financial statements.
Operating segment have been identified on the basis of nature of products and other quantitative criteria specified
in the Ind AS 108.
On the basis of nature of businesses and information reviewed by Executive Management Committee, the Company
has determined two reportable segments, as follows:
- The piping segment which is mainly engaged in manufacturing of pre-fabricated engineering products, pipe
fittings, piping systems.
- The power segment, which is engaged in biomass based power generation
No operating segments have been aggregated to form the above reportable operating segments.
Segment revenue and results:
The expenses / income which are not directly attributable to any segment are shown as unallocable expenditure.
The assets/ liabilities which are not directly attributable to any segment are shown as unallocable assets / liabilities'
Segment assets and liabilities:
Segment assets include all operating assets used by the operating segment and mainly consist of property, plant and
equipment, capital work in progress, intangible assets, right of use assets, trade receivables, cash and bank balances,
term deposits, Inventory and other operating assets. Segment liabilities primarily include trade payable, lease liabilities,
borrowings and other liabilities. Common assets and liabilities which can not be allocated to any of the segment are
shown as unallocable assets / liabilities.
Note:-
The management assessed that fair value of trade receivables, cash and cash equivalents, security deposits, inter
corporate loan to related party, other short-term financial assets, short-term borrowings, Trade credits from banks
and other, trade payables and other short-term financial liabilities approximate their carrying amounts largely due to
the short-term maturities of these instruments.
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged
in a current transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values:
a. Foreign exchange forward contracts- The Company enters into derivative financial instruments with various
counterparties, principally financial institutions with investment grade credit ratings. Foreign exchange forward
contracts are valued using valuation techniques, which employs the use of market observable inputs. The most
frequently applied valuation techniques include forward pricing , using present value calculations. The models
incorporate various inputs including the credit quality of counterparties, foreign exchange spot and forward
rates, yield curves of the respective currencies, currency basis spreads between the respective currencies. As at
31st March 2026, the mark-to-market value of other derivative asset positions is net of a credit valuation adjustment
attributable to derivative counterparty default risk.
b. Non-current borrowings - The fair value of non-current borrowings is estimated by discounting future cash flows
using rates currently available for debt on similar terms, credit risk and remaining maturities. The carrying value
and fair value of the borrowings has been considered the same since the existing interest rate approximates its
fair value.
c. The fair value of security deposit has been estimated using DCF model which consider certain assumptions viz.
forecast cash flows, discount rate, credit risk and volatility.
d. The fair value of loan to related parties including interest accrued has been estimated using DCF model which
consider certain assumptions viz. forecast cash flows, discount rate, credit risk and volatility.
e. The fair value of bank deposits has been estimated using DCF model which consider certain assumptions viz.
discount rate, credit risk and volatility etc.
35 Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are:
(a) recognised and measured at fair value and
(b) measured at amortised cost and for which fair values are disclosed in the financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the Company has
classified its financial instruments into the three levels prescribed under the accounting standard. An explanation
of each level follows underneath the table.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair
value measurement as a whole:
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement
is directly or indirectly observable
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable
36 Financial risk management objectives and policies
The Company's principal financial liabilities comprise borrowings, trade and other payables. The main purpose of these
financial liabilities is to finance the Company's operations. The Company's principal financial assets include security
deposits given, loan to related party, employee advances, trade and other receivables, cash and cash equivalents and
other assets.
The Company is exposed to market risk, credit risk and liquidity risk. The Company's senior management oversees the
management of these risks. All derivative activities for risk management purposes are carried out by specialist teams
that have the appropriate skills, experience and supervision. It is the Company's policy that no trading in derivatives
for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each
of these risks, which are summarised below.
Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in market prices. Market risk comprises interest rate risk and currency risk. Financial instruments affected by market
risk include borrowings and foreign exchange forward contracts.
The sensitivity analysis in the following sections relate to the position as at 31st March 2026 and 31st March 2025.
The sensitivity analysis has been prepared on the basis that the amount of net debt, the ratio of floating to fixed
interest rates of the debt and the proportion of financial instruments in foreign currencies are all constant in place at
31st March 2026.
The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other
post-retirement obligations and provisions.
The following assumptions have been made in calculating the sensitivity analysis:
The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is
based on the financial assets and financial liabilities held at 31st March 2026 and 31st March 2025.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market interest rates. The Company's exposure to the risk of changes in market interest rates relates
primarily to the Company's obligations with floating interest rates.
The Company is exposed to interest rate risk because Company borrows funds at floating interest rates. These exposures
are reviewed by appropriate levels of management. The Company regularly monitors the market rate of interest to
mitigate the risk exposure. The following table demonstrates the sensitivity to a reasonably possible change in interest
rates on that portion of borrowings affected. With all other variables held constant, the Company's profit before tax
is affected through the impact on floating rate borrowings, as follows:
The assumed movement in interest rates for the interest rate sensitivity analysis is based on the currently observable
market environment, showing a significantly higher volatility than in prior years.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes
in foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates relates primarily
to the Company's operating activities (when revenue or expense is denominated in a foreign currency).
The Company manages its foreign currency risk by purchasing foreign currency forward contracts for purchase
transactions that are expected to occur within a maximum 12-month forecasted period. The following tables
demonstrate the unhedged foreign currency exposure and sensitivity to a reasonably possible change in foreign
exchange rates, with all other variables held constant. The impact on the Company's profit before tax is due to changes
in the fair value of monetary assets and liabilities are as follows:
Foreign currency sensitivity
The following tables demonstrate the sensitivity to a reasonably possible change in US Dollars (USD), Thai baht (THB)
Japanese yen (yen) and EURO exchange rates, with all other variables held constant. The impact on the Company's
profit before tax is due to changes in the fair value of monetary assets and liabilities including non-designated foreign
currency derivatives.
Commodity price risk
The Company is exposed to movement in price of steel commodity. Profitability of Company may get affected by
movement in the prices of steel. The strategic move of the Company from fixed price contracts to variable price
contracts helps mitigate steel price fluctuation risk.
Equity price risk
Equity price risk is the risk that the value of a equity financial instrument will fluctuate due to changes in market prices.
The Company does not hold any quoted or marketable equity financial instruments, hence, is not exposed to any
movement in market prices.
Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract,
leading to a financial loss. The Company is exposed to credit risk from its operating activities including trade receivables,
deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.
Trade receivables
Trade receivables do not have any significant potential credit risk for the Company as the business of the Company is
majorly cash based. An impairment analysis is performed by the management at each reporting date on an individual
basis for major clients.
Trade receivables
Customer credit risk is managed by each business unit subject to the Company's established policy, procedures and
control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive
credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer
receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit
or other forms of credit insurance obtained from reputable banks and other financial institutions. At 31st March 2026,
the Company had 25 customers (31st March 2025: 19 customers) that owed the Company more than INR 200 lacs each
and accounted for approximately 96% (31st March 2025: 87%) of all the receivables outstanding. There were eight
customers (31st March 2025: six customers) with balances greater than INR 1,000 lacs accounting for just over 71%
(31st March 2025: 33%) of the total amount receivable.
An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses.
The provision rates are based on days past due for groupings of various customer segments with similar loss patterns
(i.e., by geographical region, product type, customer type and rating, and coverage by letters of credit or other forms of
credit insurance). The calculation reflects the probability-weighted outcome, the time value of money and reasonable
and supportable information that is available at the reporting date about past events, current conditions and forecasts
of future economic conditions. The maximum exposure to credit risk at the reporting date is the carrying value of each
class of financial assets disclosed in Note 6. The Company does not hold collateral as security. The Company evaluates
the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions
and industries and operate in largely independent markets.
Financial instruments and cash deposits
Credit risk from balances with banks is managed by the Company's treasury department in accordance with the
Company's policy. Investments of surplus funds are made only with approved counterparties and within credit limits
assigned to each counterparty. Counterparty credit limits are reviewed by the key management personnel on an annual
basis and may be updated throughout the year. The limits are set to minimise the concentration of risks and therefore
mitigate financial loss through counterparty's potential failure to make payments.
The Company's maximum exposure to credit risk for the components of the balance sheet at 31st March 2026 and
31st March 2025 is the carrying amounts as illustrated in note 6(C).
Liquidity risk
The Company's objective is to maintain a balance between continuity of funding and flexibility through the use of
cash credits and bank loans. Approximately 21% of the Company's long-term borrowings will mature in less than
one year from/ as at at 31st March 2026 (31st March 2025: 31%) based on the carrying value of borrowings reflected
in the financial statements. The Company assessed the concentration of risk with respect to refinancing its debt and
concluded it to be low. The Company has access to a sufficient variety of sources of funding and debt maturing within
12 months can be rolled over with existing lenders.
The table below summarises the maturity profile of the Company's financial liabilities based on contractual
undiscounted payments.
37 Capital management
For the purpose of the Company's capital management, capital includes issued equity share capital and all other equity
reserves attributable to the shareholders of the Company. The primary objective of the Company's capital management
is to maximise the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and
the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the
dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital
using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt,
interest bearing loans and borrowings, lease liabilities, less cash and cash equivalents.
38 Company as a lessee
i) The Company's leased assets primarily consists of lease for factory lands, computers, data processing equipment
and plant and machinery having lease term of 5-10 years.
The Company recorded the lease liability at the present value of the remaining lease payments discounted at the
incremental borrowing rate as on the date of transition and has measured right of use asset at an amount equal to
lease liability adjusted for previously recognised prepaid or accrued lease payments. Further, lease arrangements
where the Company is lessor, lease rentals are recognized on straight line basis over the non-cancellable period.
The Company's obligations under its leases are secured by the lessor's title to the leased
assets. Generally, the Company is restricted from assigning and subleasing the leased assets .
The Company also has certain leases of machinery with lease terms of 12 months or less and leases of office
equipment with low value. The Company applies the 'short-term lease' and 'lease of low-value assets' recognition
exemptions for these leases.
39 Impact of Labour Code
The Government of India, vide Notification dated November 21, 2025, has notified 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 (collectively referred to as ""the Labour Codes""), which consolidate and replace existing
multiple labour legislations. In accordance with Ind AS 19 - Employee benefits, changes to employee benefit plans
amounting to INR 119.23 Lacs, resulting from the new labour codes are treated as plan amendments, requiring
immediate recognition of the past service cost as expense in the statement of profit and loss for the year ended
March 31, 2026 in accordance with Ind AS 19 Employee benefits.
40 Other statutory information:
(i) The Company do not have any Benami Property, where any proceeding has been initiated or pending against
the company for holding any Benami Property.
(ii) The Company do not have any transactions with companies struck off.
(iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.
(iv) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company have not advanced or loaned or invested funds to any other person(s) or entity (ies), including
foreign entities (intermediaries) with the understanding that the intermediary shall:
(a) Directly or indirectly lend or invest in other person or entities identified in any manner whatsoever by or on
behalf of the company (Ultimate Beneficiaries) or
(b) Provide any guarantee, security, or the like to or on behalf of the Ultimate Beneficiaries.
(vi) The Company have 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 group shall:
(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the funding party (Ultimate Beneficiaries) or
(b) Provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
(vii) The Company does not have any such transaction which is not recorded in the books of accounts that has been
surrendered or disclosed as income during the period in the tax assessment under the income tax Act,1961 (Such
as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
(viii) The Company has not been declared as wilful defaulter.
(ix) 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.
42 Employee Share Based Payment
Employee Stock Option Scheme "ESOP-2023" (herein referred as DEE Development Engineers Limited ESOP-2023)
was approved by our Board of Directors in their meeting held on 22nd September, 2023 and by our shareholders in
their meeting dated 23rd September 2023 respectively. Under ESOP-2023, Nomination and Remuneration Committee is
authorised to grant 3,88,920 options to eligible employees of the Company or to the employees if any of its subsisdiary
company in one or more tranches. Options granted under ESOP-2023 shall not vest earlier than a minimum vesting
period of one year and not later than a maximum vesting period of three years from date of grant. The exercise period
in respect of vested options shall be subject to maximum period of four years commencing from the date of vesting.
The options granted under ESOP-2023 carry no rights to dividends and no voting rights till the date of exercise.
The fair value of the share options is estimated at the grant date using Black- Scholes Model, taking into account the
terms and conditions upon which the share options were granted.
The Company has recognised an expense of INR 117.46 lacs (March 31, 2025 : INR 308.16 lacs) on grant of 3.89 lacs
ESOP granted during the period in accordance with Ind AS 102 "Share Based Payments". The carrying amount of ESOP
reserve as at 31 March 2026 is INR 246.24 lacs including INR 21.95 lacs issued to the employees of subsidiary Company
(March 31, 2025: INR 602.53 lacs including INR 46.02 lacs). Further, Share option granted to employees of subsidiary
company is treated as deemed investment in the books of the Company.
The expected life of the share options is based on historical data and current expectations and is not necessarily
indicative of exercise patterns that may occur. The volatility is based on annualised standard deviation of the
continuously compounded rates of return based on the peer companies and competitive stocks over a period of
time. The Company has determined the market price on grant date based on latest equity valuation report available
with the Company preceding the grant date.
43 Business combinations
Acquisitions during the year ended 31st March 2026
On 19 May 2025, the Company has acquired 70% stake in Molsieve Designs Limited, an unlisted company incorporated
in India that specializes in on-site gas generation, purification, and processing systems.
Contingent consideration
There is no contingent consideration for above acquisition.
44. The Company has used three accounting software for maintaining its books of account which has a feature of recording
audit trail (edit log) facility and the same has operated for all relevant transactions recorded in the software except that
in respect of one application, audit trail is not enabled for certain master data and audit trail at database layer for the
same application was enabled from June 05, 2025. For the second application, audit trail feature was not enabled. For
the third applications audit trail is not enabled for certain master data. Further, we did not come across any instance
of audit trail feature being tampered with, in respect of accounting software where the audit trail has been enabled.
Additionally, the audit trail of relevant prior years has been preserved by the Company as per the statutory requirements
for record retention, to the extent it was enabled and recorded in those respective years.
45. The Company maintains its books of account in electronic mode using three accounting software applications, hosted
on servers physically located in India, however, with respect to one software, the backup of the books of account
and other books and papers were not take on daily basis. The management is taking necessary steps to ensure that
process for daily backup is defined as required under the applicable statute.
46. The Company had entered into a 30-year Power Purchase Agreement (PPA) with Punjab State Power Corporation
Limited ('PSPCL') for its 8 MW biomass plant at Abohar, Punjab, expiring on December 31, 2040, with tariff revision
provisions after 13 and 20 years. Upon completion of 13 years, the Company filed a petition with Punjab State Electricity
Regulatory Commission ('PSERC') seeking an upward revision from Rs.7.48 per unit due to increased costs.
PSERC (order dated May 15, 2025) reduced the tariff to Rs.5.26 per unit retrospectively from January 1, 2024, resulting
in a payable of Rs.1,682.87 Lacs towards excess revenue billed. The Company filed a review petition, and PSERC (order
dated August 20, 2025) revised the tariff to Rs.5.88 per unit, reducing the payable to Rs.1,384.96 Lacs. PSERC also
directed that recovery of excess revenue be capped at 50% of monthly bills.
PSPCL has challenged the order passed by PSERC dated August 20, 2025, before APTEL, and the matter is under
review. Separately, the Company has filed a writ petition before the Punjab & Haryana High Court challenging the
tariff determination methodology (seeking "cost-plus" basis under Section 62). The High Court, via interim order dated
September 23, 2025, has stayed the PSERC order.
Basis the management assessment supported by legal opinion obtained by the management, it believes that there is
strong likelihood of succeeding in respect of above matter. As the matters are sub judice and the PSERC orders are
stayed, no adjustments have been made in the standalone financial statements for the excess revenue billed.
47. The figures for the corresponding previous year have been regrouped/ reclassified, wherever considered necessary,
to make them comparable with current year classification.
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