Pursuant to the directions of the Hon’ble National Company Law Tribunal (‘NCLT’), the Company’s books of accounts were re-casted and re-audited for the financial years 2014-15 to 2018-19. The said re-casted accounts were taken on record by the NCLT on 26 October, 2021, and the consequential voluntary revision of the books of accounts for the financial years 2019-20 and 2020-21 were carried out by the Company. In this connection, the Company fled an application with the Central Board of Direct Taxes (‘CBDT’) seeking approval to revise the income tax returns based on the re-casted / revised books of accounts for the financial years 2014-15 to 2019-20. However, the CBDT, vide its order dated 29 February, 2024, rejected the Company’s application.
Aggrieved by this rejection order, the Company fled a Writ Petition before the Hon’ble Bombay High Court. The Hon’ble Bombay High Court, in its order dated 30 April, 2024, issued the following directions:
(a) Allowing the Company to file its revised income tax returns based on the re-casted / revised accounts for the financial years 2014-15 to 2019-20.
(b) Directing the Income Tax Department to complete the assessment of these revised returns. In compliance with the Hon’ble Bombay High Court’s order, the Company fled the revised income tax returns based on the re-casted accounts for the financial years 2014-15 to 2019-20.
Subsequently, the Company received assessment orders based on the revised income tax returns fled. Due to various disallowances / additions made, completed assessment orders resulted in tax demands of ' 634.36 crores for the financial years 2014-15 to 2019-20 for which appeals have been fled. The said tax demand has been subsequently stayed by the department subject to the condition that ' 79.19 crores (payment under protest) required to be pay in installments. The Company has paid ' 22.20 crores under protest as at 31 March, 2026. Based on management assessment, duly supported by legal opinion from senior counsels, the Company believes that it has strong case on merit that these disallowances / additions are in principle not tenable under law including in relation to the periods for which revised income tax returns are fled, as applicable. Accordingly, no adjustments are considered necessary in the standalone financial statements in this regard.
(i) The Company has issued following equity shares under employee stock option scheme:
During the year 597260 equity shares of the face value ' 2 each per equity share, for an aggregate consideration of ' 20.02 crores. (Previous year 1536230 equity shares of the face value ' 2 each per equity share, for an aggregate consideration of ' 32.35 crores).
(ii) The Company has issued following equity shares by way of Qualified Institutional Placement (QIP):
During the year ended 31 March, 2026, the Company has raised funds amounting to ' 3000.00 crores by way Qualified Institutional Placement (QIP) and allotted 45,454,545 equity shares at an issue price ' 660.00 per equity share (including a premium of ' 658.00 per equity share) on 04 July, 2025.
(b) Terms / rights attached to equity shares:
The Company has one class of share capital, i.e., equity shares having face value of ' 2 per share. Each holder of equity share is entitled to one vote per share.
In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
(a) Dividend paid and proposed:
The Company has declared and paid interim dividend of ' 1.30 per share, resulting in a dividend payout of ' 204.74 crores for the financial year 2025-26 (previous year ' 1.30 per share, resulting in a dividend payout of ' 198.75 crores).
(b) Nature and purpose of items in other equity:
(i) Retained earnings:
Retained earnings are the profits that the Company has earned till date and includes any transfers to general reserve, dividends or other distributions paid to the shareholders.
(ii) General reserve:
General reserve comprises of transfer of profits from retained earnings for appropriation purpose, the reserves can be distributed / utilised by the Company in accordance with the provisions of the Companies Act, 2013.
(iii) Capital reserve:
Capital reserve mainly represents the amount recognised on demerger of consumer product business and can be utilised in accordance with the provisions of the Companies Act, 2013.
(iv) Capital redemption reserve:
Capital redemption reserve was created on buy back of shares. The Company may issue bonus shares to its members out of the capital redemption reserve.
(v) Securities premium:
Securities premium reserve is used to record the premium on issue of shares and can be utilised in accordance with the provisions of the Companies Act, 2013.
(vi) Share options outstanding account:
Share options outstanding account represents fair value of the options granted which is to be expensed out over the life of the vesting period as employee compensation costs reflecting period of receipt of service.
Supplier Finance Arrangements:
The Company participates in a supplier finance arrangement (SCF) with the banks. Under this arrangement, the banks pay amount to participating suppliers on behalf of the Company in respect of invoices raised on the Company before its due date.
If suppliers choose to receive early payment, they pay a fee to the banks. In order for the banks to pay the invoices, the goods must have been received or supplied and the invoices approved by the Company.
The Company settles the original invoice by paying the banks in line with the original invoice maturity date.
The Company provides no security to the banks and have no recourse on the Company and there is no change in the Company's original obligation towards the suppliers.
(b) Nature of other provisions:
(i) Product warranties: The Company gives warranties on certain products and services in the nature of repairs / replacement, which fail to perform satisfactorily during the warranty period. Provision made represents the amount of the expected cost of meeting such obligation on account of rectification / replacement. The timing of outflows is generally expected to be within a period of two years from the date of balance sheet.
(ii) Provision for tax related litigations include liability on account of non-collection of declaration forms and other legal matters related to Sales Tax, Excise Duty, Custom Duty, Service Tax and Goods & Service Tax which are in appeal under the relevant Act / Rules. The above provision represents expected future outflows relating to various tax related matters, timing of which cannot be ascertained. The assumptions used to calculate the provisions are based on past experience of similar matters and professional consultations.
(iii) Provision for other litigation related obligations represents estimated liabilities that are expected to materialise in respect of other matters under litigation. The above provision represents expected future outflows relating to litigation related matters, timing of which cannot be ascertained. The assumptions used to calculate the provisions are based on past experience of similar matters and professional consultations.
Contract assets:
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration and are transferred to trade receivables on completion of milestones and its related invoicing.
Contract liabilities:
A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company satisfies the performance obligation.
37. CONTINGENT LIABILITIES AND COMMITMENTS
a) Matters wherein management has concluded the Company's liability to be probable have accordingly been provided for in the books (Refer note 27).
b) Matters wherein management has concluded the Company's liability to be possible have accordingly been disclosed under Note A, Contingent liabilities below.
c) Matters wherein management is confident of succeeding in these litigations and have concluded the Company's liability to be remote. This based on the relevant facts of judicial precedents and as advised by legal counsel which involves various legal proceedings and claims, in different stages of process.
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' crores
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As at 31-03-2026
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As at 31-03-2025
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A.
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Contingent liabilities (Refer notes below):
(to the extent not provided for)
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|
|
|
(a)
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Claims against the Company not acknowledged as debts (Refer note (i) below)
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3.74
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3.74
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(b)
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Sales tax / VAT / goods and service tax liability that may arise in respect of matters in appeal (Refer note (iii) below)
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2.44
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3.94
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(c)
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Excise duty / customs duty / service tax liability that may arise in respect of matters in appeal (Refer note (iv) below)
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8.06
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8.78
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(d)
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Income tax liability that may arise in respect of matters in appeal (Refer note (v) and (vi) below)
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|
|
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B.
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Commitments:
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|
|
| |
Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)
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482.10
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180.12
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Notes:
(i) From time to time, the Company is involved in claims and legal matters arising in the ordinary course of business. Management is not currently aware of any matters that will have a material adverse effect on the financial position, results of operations, or cash flows of the Company.
(ii) It is not practicable to estimate the timing of cash outflows, if any, in respect of matters at A(a) to A(d) above, pending resolution of the arbitration / appellate proceedings.
(iii) Sales tax / VAT / goods and service tax cases include disputes pertaining to disallowances of input tax credit and non-submission of various forms with authorities.
(iv) Excise duty / custom duty / service tax cases include disputes pertaining to inadmissibility of cenvat credit, short payment of service tax on work contracts, refund of excise duty on export of transformers, interest payment on provisional assessment cases, etc.
(v) Contingent liabilities for Income tax cases pertains to disallowance of expenses amounting to ' 0.56 crores (as at 31 March, 2025 ' 0.56 crores).
(vi) The Company had received Assessment Order dated 27 February, 2024 under section 143(3) of the Income Tax Act, 1961, pertaining to financial year 2021-22. As per Assessment Order, tax demand payable is ' 188.79 crores. The Company has filed appeal before Commissioner of Income Tax (Appeals). Considering the facts, demand raised is mainly on account of disallowance of claims for settlement of corporate guarantee and non-granting of set-off tax losses. The management strongly believes that the demand is not sustainable, bad in law and will be reversed at appellate levels. The Company has obtained stay on tax demand by paying ' 4.89 crores, as per stay order issued by the Deputy commissioner of Income tax.
During the year, the Company had received Final Assessment Order for financial year 2020-21. As per Assessment Order, the tax demand payable is ' 484.40 crores. Aggrieved by the said order, the Company has filed appeal before the Hon'ble Income Tax Appellate Tribunal (ITAT). The management strongly believes that the demand is not sustainable, bad in law and will be reversed at appellate levels. The Company has obtained stay on tax demand by paying ' 93.55 crores, as per stay order issued by the Deputy commissioner of Income tax.
Refer note 9 for details in relation to assessment of revised income tax returns based on the re-casted / revised accounts.
38. LEASES
(i) Company as a lessee
The Company has lease contracts for various items of land and buildings used in its operation. Lease of land generally have lease terms between 10 to 99 years while buildings generally have lease terms between 2 to 9 years. The Company's obligation under the lease is secured by the lessor's title to leased assets.
Set out below are the carrying amounts of right of use assets and lease liabilities included under financial liabilities and the movements during the year:
(i) The actuarial valuation of plan assets and the present value of the defined benefit obligation were carried out as at 31 March, 2026 and as at 31 March, 2025. The present value of the defined benefit obligation and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.
(ii) Discount rate is based on the prevailing market yields of Indian Government Securities as at the balance sheet date for the estimated term of the obligations.
(iii) The salary escalation rate is arrived after taking into consideration the seniority, the promotion and other relevant factors, such as, demand and supply in employment market.
(iv) Risk analysis:
Interest rate risk: A fall in the discount rate which is linked to the Government Securities rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
Salary risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan’s liability.
Investment risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
43. SEGMENT REPORTING
The Company has the following reportable segments:
Power Systems : Transformer, Switchgear and Turnkey Projects
Industrial Systems : Electric Motors, Alternators, Drives, Traction Electronics and SCADA
Identification of segments:
The Chief Operational Decision Maker (CODM) monitors the operating results of its Business Segments 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 segments have been identified on the basis of the nature of products / services and have been identified as per the quantitative criteria specified in the Ind AS.
Segment revenue and results:
The expenses and incomes which are not directly attributable to any business segment are shown as unallocable expenditure (net of unallocated income).
Segment assets and liabilities:
Segment assets include all operating assets used by the operating segment and mainly consist of property, plant and equipment, trade receivables and inventories etc. Segment liabilities primarily include trade payables and other liabilities. Common assets and liabilities which cannot be allocated to any of the segments are shown as a part of unallocable assets / liabilities.
Inter segment transfer:
Inter segment prices are normally negotiated amongst segments with reference to the costs, market price and business risks. Profit or loss on inter segment transfers are eliminated at the Company level.
1. The transactions with related parties are made on terms equivalent to and those applicable to all unrelated parties on arm’s length transactions. The Company mutually negotiates and agrees transaction value and payment terms with the related parties by benchmarking the same to transactions with non-related parties. Outstanding trade and other receivable / trade and other payable balances are unsecured, interest free and require settlement in cash. No security has been received against these receivables / has been given against these payables. As at 31 March, 2026, the Company has credit impairment of trade receivables relating to amounts owed by related parties amounting to ' 17.35 crores (as at 31 March, 2025'63.40 crores) (Refer note 13).
2. The Company maintains gratuity trust for the purpose of administering the gratuity payment to its employees (CG Gratuity Fund). During the year, the Company contributed ' 16.39 crores (previous year ' 16.26 crores).
3. Following subsidiary is under liquidation process:
CG Sales Networks Malaysia Sdn. Bhd.
4. Investment in subsidiaries and associate has been disclosed in note 6.
46. FAIR VALUE MEASUREMENTS
The fair values of the financial assets and liabilities are 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:
1. The Company has not disclosed the fair value of financial instruments such as trade receivables, cash and cash equivalents, bank balances other than cash and cash equivalents, current and non-current financial assets - loans, current and non-current financial assets - others, current and non-current financial liabilities - borrowings, trade payables and current and non current other financial liabilities because their carrying amounts are a reasonable approximation of fair value and hence these have not been categorised in any level in the table given below. Further, for financial assets, the Company has taken into consideration the allowances for expected credit losses and adjusted the carrying values where applicable.
2. The fair values of the quoted investments / units of mutual fund schemes are based on market price / net asset value at the reporting date.
3. The fair values for loans given are calculated based on discounted cash flows using current lending rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for expected losses of these loans given. Accordingly, fair value of such instruments are not materially different from their carrying values.
4. Fair values of the Company’s interest-bearing borrowings are determined by using discounted cash flow method using the current borrowing rates. Fair value of such instruments are not materially different from their carrying values.
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments:
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 directly or indirectly unobservable.
a) During the current year, Company has written off investment of ' 1.15 crores in PT Crompton Prima Switchgear Indonesia (previous year, Company has written off investment of ' 7.58 crores and loans and advances of ' 730.63 crores given to subsidiary CG International B.V.). The Company has also reversed the provision of equivalent amount ' 1.15 crores (previous year ' 738.21 crores (Refer note 44).
b) During the current year, Company has written off advances of ' 35.14 crores.The Company has also reversed the provision of equivalent amount made during the earlier year.
c) During the current year, Company has written off trade receivable of ' 46.06 crores.The Company has also reversed the provision of equivalent amount made during the earlier year (Refer note 44).
d) The Government of India has notified New Labour Codes effective from 21 November, 2025, impact of these have been assessed based on legal opinion and best information available, which has resulted in additional gratuity and leave liability by ' 35.57 crores. Considering the materiality and non-recurring nature of this impact, the Company has presented the same under ‘Exceptional items’. The Company will continue to monitor the clarifications in this regard and provide necessary accounting effect as and when such clarifications are issued.
47. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company's activities expose it to certain financial risks namely credit risk, market risk and liquidity risk. The financial risks are managed in accordance with the Company's risk management policy which has been approved by its Board of Directors.
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 of risk such as:currency risk, interest rate risk and other price risk. Financial instruments affected by market risk include foreign currency receivables, payables, loans and borrowings and derivative financial instruments.
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 debt obligations with floating interest rates. The Company has managed its interest rate risk by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.
Foreign currency risk
The Company's functional currency is Indian Rupee. The Company undertakes transactions denominated in foreign currencies and consequently the Company is exposed to foreign exchange risk. Foreign currency exchange rate exposure is partly balanced by purchasing of goods, commodities and services in the respective currencies. The Company evaluates exchange rate exposure arising from foreign currency transactions and the Company follows established risk management policies.
Credit risk
Credit risk refers to 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 (primarily trade receivables) and from its financing activities including loans, foreign exchange transactions and other financial instruments. Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are generally set to manage credit risk. General payment terms include credit period ranging from 45 to 90 days and where applicable, mobilisation advance, progress payments and certain retention money to be released at the end of the project.
Where the loans or receivables are impaired, the Company continues to engage in enforcement activity to attempt to recover the receivable due.
The Company is exposed to credit risk for trade receivables, cash and cash equivalents, investments, other bank balances, loans given, other financial assets and financial guarantees.
In respect of financial guarantees provided by the Company to banks and financial institutions, the maximum exposure which the Company is exposed to is the maximum amount which the Company would have to pay if the guarantee is called upon or in case where settlement is agreed, the settlement amount. Based on the expectation at the end of the reporting period, the Company considers that it is more likely than not that such an amount will not be payable under the guarantees provided except as otherwise stated in respect of guarantees where settlement is agreed.
Liquidity risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
48. CAPITAL MANAGEMENT
For the purposes of the Company's capital management, capital includes issued capital and all other equity reserves. The primary objective of the Company's capital management is to maximise shareholder value. The Company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial covenants. The Company monitors capital using gearing ratio, which is total debt divided by total capital (debt and equity).
(v) The Company has not received any fund from any persons or entities, including foreign entities (Funding Parties) with the understanding (whether recorded in writing or otherwise) that the Company shall:
56. During the year ended 31 March, 2026, the Company has raised funds amounting to ' 3000.00 crores by way of Qualified Institutional Placement (QIP) and allotted 45,454,545 equity shares at an issue price ' 660.00 per equity share (including a premium of ' 658.00 per equity share) on 04 July, 2025 in accordance with provisions of Securities and Exchange Board of India (SEBI) Issue of Capital and Disclosure Requirements (ICDR) Regulations as amended, along with Section 42, 62 and other related provisions of the Companies Act, 2013.
(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.
(vi) The Company has not made any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act,1961 (such as search or survey or any other relevant provision of the Income Tax Act, 1961).
(vii) The Company does not have any transactions with companies which has been struck off by ROC under Section 248 of the Companies Act, 2013.
(viii) The Company has not been declared wilful defaulter by any bank or financial institution or other lender or government or any government authority.
The unutilised fund as on 31 March, 2026 amounting to ' 2619.20 crores have been temporarily invested in fixed deposits, mutual fund and balance is kept in monitoring account.
* The Company had incurred expenses amounting to ' 22.93 crores (excluding GST), towards issuance of equity shares which have been debited to securities premium.
57. Amounts shown as ' 0.00 represents amount below ' 50,000 (Rupees Fifty Thousand).
(ix) The Company has complied with the requirement with respect to number of layers as prescribed under section 2(87) of the Companies Act, 2013 read with the Companies (Restriction on number of layers) Rules, 2017.
54. UPDATES ON INVESTIGATION FOR PAST YEARS
In respect of ongoing investigation by Serious Fraud Investigation Office (‘SFIO') and other regulatory authorities such as Central Bureau of Investigation (‘CBI’) and Enforcement Directorate (‘ED') on the affairs of the Company pertaining to the past periods and against erstwhile promoters and management relating to the transactions that took place when the Company was under the control of the erstwhile promoters / management, the Company is fully co-operating with the regulators on such matters. Based on the legal advice obtained by the management, there is no impact on financials of the Company in respect of these matters.
55. The Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in such software, except that -
1. In respect of SAP application, the audit trail feature was not enabled at the database level to log any direct changes to database when using certain access rights from 01 April, 2025 to 15 September, 2025; and
2. In respect of other accounting software used for payroll processing, the audit trail feature was not enabled at the database level to log any direct changes to data for the period from 01 April, 2025 to 02 September, 2025, respectively.
Further, no instance of audit trail feature being tempered with was noted in respect of accounting software where the audit trail has been enabled.
Additionally, the audit trail of 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 the respective years.
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