1.8.11. Provisions, Contingent Liabilities and Contingent
Assets
A provision is recognized if as a result of a past event, the
Company has a present obligation (legal or constructive)
that can be estimated reliably and it is probable that
an outflow of economic benefits will be required to
settle the obligation. Provisions are recognized at the
best estimate of the expenditure required to settle
the present obligation at the balance sheet date. If the
effect of 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.
A contingent liability exists when there is a possible
but not probable obligation, or a present obligation
that may, but probably will not, require an outflow
of resources, or a present obligation whose amount
cannot be estimated reliably. Contingent liabilities do
not warrant provisions but are disclosed unless the
possibility of outflow of resources is remote. Contingent
assets are disclosed in the financial statements when
an inflow of economic benefit is probable. However,
when the realization of income is virtually certain,
then the related asset is not a contingent asset and its
recognition is appropriate.
1.8.12. Foreign currency transactions
Transactions in foreign currencies are translated into
the respective functional currencies of company at the
exchange rates at the dates of the transactions or an
average rate if the average rate approximates the actual
rate at the date of the transaction.
Monetary assets and liabilities denominated in foreign
currencies are translated into the functional currency at
the exchange rate at the reporting date. Non-monetary
assets and liabilities that are measured at fair value in
a foreign currency are translated into the functional
currency at the exchange rate when the fair value was
determined.
Non-monetary assets and liabilities that are measured
based on historical cost in a foreign currency are translated
at the exchange rate at the date of the transaction.
Exchange differences are recognized in profit or loss.
1.8.13. Cash and cash equivalents
Cash and cash equivalents include cash on hand, call
deposits and other short-term, highly liquid investments
with original maturities of three months or less that are
readily convertible to known amounts of cash and which
are subject to an insignificant risk of changes in value.
1.8.14. Income tax
Income tax comprises current and deferred tax. It is
recognized in profit or loss except to the extent that it
relates to a business combination or to an item recognized
directly in equity or in other comprehensive income.
a. Current tax
Current tax comprises the expected tax payable
or receivable on the taxable income or loss for
the year and any adjustment to the tax payable
or receivable in respect of previous years. The
amount of current tax reflects the best estimate of
the tax amount expected to be paid or received
after considering the uncertainty, if any, related to
income taxes. It is measured using tax rates (and
tax laws) enacted or substantively enacted by the
reporting date.
Current tax assets and current tax liabilities are
offset only if there is a legally enforceable right to
set off the recognized amounts, and it is intended
to realize the asset and settle the liability on a net
basis or simultaneously.
b. Deferred tax
Deferred tax is provided on temporary differences
between the tax bases of assets and liabilities
and their carrying amounts for financial reporting
purposes at the reporting date.
Deferred tax assets are recognized for all
deductible temporary differences, the carry
forward of unused tax credits and any unused tax
losses. Deferred tax assets are recognized to the
extent that it is probable that taxable profit will
be available against the deductible temporary
differences, and the carry forward of unused tax
losses can be utilized.
The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced
to the extent that it is no longer probable that
sufficient taxable profit will be available to allow
all or part of the deferred tax asset to be utilized.
Unrecognized deferred tax assets are re-assessed
at each reporting date and are recognized to the
extent that it has become probable that future
taxable profits will allow the deferred tax asset to
be recovered.
Deferred tax assets and liabilities are measured at
the tax rates that are expected to apply in the year
when the asset is realized or the liability is settled,
based on tax rates (and tax laws) that have been
enacted or substantively enacted at the reporting
date.
Deferred tax assets and deferred tax liabilities are
offset if a legally enforceable right exists to set
off current tax assets against current tax liabilities
and the deferred taxes relate to the same taxable
entity and the same taxation authority.
The Company has exercised the option permitted
under Section 115BAA of the Indian Income Tax
Act, 1961.
1.8.15. Borrowing costs
Borrowing costs are interest and other costs (including
exchange differences relating to foreign currency
borrowings to the extent that they are regarded as an
adjustment to interest costs) incurred in connection
with the borrowing of funds. Borrowing costs directly
attributable to acquisition or construction of an asset
which necessarily take a substantial period of time to get
ready for their intended use are capitalized as part of the
cost of that asset. Other borrowing costs are recognized
as an expense in the period in which they are incurred.
1.8.16. Segment reporting
Operating segments are reported in a manner consistent
with the internal reporting provided to the chief
operating decision maker (CODM). Chief operating
decision maker's function is to allocate the resources of
the entity and assess the performance of the operating
segment of the Company.
The Board of Directors (CODM) assesses the financial
performance and position of the company and makes
strategic decisions and is identified as being the chief
operating decision maker for the Group. Refer note 50
for segment information presented.
1.8.17. Earnings per share
Basic EPS is computed using the weighted average
number of equity shares outstanding during the period.
Diluted EPS is computed using the weighted average
number of equity and dilutive equity equivalent shares
outstanding during the period except where the results
would be anti-dilutive.
1.9. 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, accompanying disclosures,
and the disclosure of contingent liabilities. Uncertainty
about these assumptions and estimates could result in
outcomes that require material adjustment to the carrying
amount of assets or liabilities affected in future periods.
The key assumptions and estimate at the reporting
date that have a significant risk of causing a material
adjustment to the carrying amounts of assets and
liabilities are described below. These assumptions and
estimates are based on available parameters as on
the date of preparation of financial statements. These
assumptions and estimates, however, may change due to
market changes or circumstances arising that are beyond
the control of the Company.
a. Business Model Assessment
Classification and measurement of financial
assets depends on the results of the SPPI and the
business model test. The Company determines
the business model at a level that reflects how
groups of financial assets are managed together
to achieve a particular business objective. This
assessment includes judgement reflecting all
relevant evidence including how the performance
of the assets is evaluated and their performance
measured, the risks that affect the performance of
the assets and how these are managed and how
the managers of the assets are compensated.
The Company monitors financial assets measured
at amortized cost or fair value through other
comprehensive income that are derecognized
prior to their maturity to understand the reason
for their disposal and whether the reasons are
consistent with the objective of the business for
which the asset was held. Monitoring is part of the
Company's continuous assessment of whether the
business model for which the remaining financial
assets are held continues to be appropriate and
if it is not appropriate whether there has been a
change in business model and so a prospective
change to the classification of those assets.
b. Operating Lease
The Company has entered into commercial
property leases for its offices. The Company
evaluates if an arrangement qualifies to be a lease
as per the requirements of Ind AS 116. Identification
of a lease requires significant judgment. The
Company uses significant judgement in assessing
the lease term and the applicable discount rate.
The Company has lease contracts which include
extension and termination options, and this
requires exercise of judgement by the Company
in evaluating whether it is reasonably certain
whether or not to exercise the option to renew or
terminate the lease. The discount rate is generally
based on the incremental borrowing rate specific
to the lease period.
c. 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 projections 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 assets' 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.
d. Fair value of investment property
As per the Ind AS, the Company is required to
disclose the fair value of the investment property.
Accordingly, the Company has conducted
valuation to assess the fair values of investment
property as at March 31, 2025. The investment
property was valued by reference to market-based
evidence, using comparable prices adjusted for
specific market factors such as nature, location
and condition of the investment property.
e. Taxes
Income tax expense comprises current tax expense
and the net changes in the deferred tax asset or
liability during the year. Significant judgements are
involved in determining the provision for income
taxes, including amount expected to be paid/
recovered for uncertain tax positions, including
disclosures thereof.
f. 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
various valuation techniques. The inputs to these
models are taken from observable markets where
possible, but where this is not feasible, a degree
of judgment is required in establishing fair values.
Judgments 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.
g. Defined benefit plans
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
annually.
h. Impairment of financial assets
The measurement of impairment losses across all
categories of financial assets requires judgement,
in particular, the estimation of the amount and
timing of future cash flows and collateral values
when determining impairment losses and the
assessment of a significant increase in credit risk.
These estimates are driven by a number of factors,
changes in which can result in different levels of
allowances. It has been the Company's policy to
regularly review its models in the context of actual
loss experience and adjust when necessary.
i. Contingent liabilities and provisions
Provisions and liabilities are recognized in the
period when it becomes probable that there will
be a future outflow of funds resulting from past
operations or events and the amount of cash
outflow can be reliably estimated. The timing
of recognition and quantification of the liability
requires the application of judgement to existing
facts and circumstances, which can be subject to
change. The carrying amounts of provisions and
liabilities are reviewed regularly and revised to
take account of changing facts and circumstances.
22.1 For the movement of items of other equity please refer Standalone "Statement of Changes in Equity"
22.2 Description of the nature and purpose of each reserve within equity is as follows:
a. Capital reserve - The Capital Reserve was created pursuant to business combination entered in earlier years.
b. Securities premium - Securities premium is the amount received in excess of the face value of share capital issued and
subscribed. The reserve can be utilised only for limited purposes in accordance with the provisions of the Companies
Act, 2013.
c. Amalgamation reserve - The reserve was created pursuant to business combination entered in earlier years.
d. Retained Earnings - Retained earnings represents the surplus in the statement of profit and loss and net amount of
appropriation made to/ from retained earnings.
e. Remeasurement of defined benefit liability - It comprises of gains/ (losses) resulting from experience adjustments and
changes in actuarial assumptions. These are recognized directly in other comprehensive income during the period in
which they occur and are presented separately under reserve & surplus.
f. Equity instruments through other comprehensive income - This represents the cumulative gains and losses arising on
fair valuation of equity instruments measured at fair value through other comprehensive income under an irrevocable
option. The realised portion of the gains are directly transferred to retained earnings without routing the same through
statement of profit and loss.
22.3. The company at its board meeting held on November 12, 2024, has declared interim dividend for financial year 2024-25 of Rs.
0.70 per share. The said dividend is in compliance with section 123 of The Companies Act, 2013.
The company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and
current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax
authority.
Significant management judgment is required in determining provision for income tax, deferred income tax assets and
liabilities and recoverability of deferred income tax assets. The recoverability of deferred income tax assets is based on
estimates of taxable income and the period over which deferred income tax assets will be recovered. Any changes in future
taxable income would impact the recoverability of deferred tax assets.
B. Measurement of fair values
The following provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value,
grouped into Level 1 to Level 3;
Level 1 : Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2 : Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either
directly or indirectly.
Level 3 : Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable
market data and other financial assets & liabilities approximates their carrying amounts largely due to short term maturities of
these instruments.
a. The investments measured at fair value and falling under fair value hierarchy Level 3 are valued on the basis of valuation
reports provided by external valuers.
b. The fair value of the financial instruments that are not traded in an active market is determined using valuation
techniques. The company uses its judgement to select a variety of methods and make assumptions that are mainly
based on market conditions existing at the end of each reporting period.
c. There have been no transfers between Level 1 and Level 2 for the year ended March 31,2025 and March 31,2024.
(i) Financial risk management
The Company has exposure to the following risks arising from financial instruments:
A. Credit risk ;
B. Liquidity risk ; and
C. Market risk
Risk management framework
The Company's board of directors has overall responsibility for the establishment and oversight of the Company's risk
management framework. The Company's risk management policies are established to identify and analyse the risks faced
by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management
policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities. The
Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive
control environment in which all employees understand their roles and obligations.
The audit committee oversees how management monitors compliance with the company's risk management policies and
procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the company. The
audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and adhoc reviews of
risk management controls and procedures, the results of which are reported to the audit committee.
A. Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet
its contractual obligations, and arises principally from the Company's receivables from customers, loans and advances to
related parties and investments at amortised cost. Credit risk is managed through credit approvals, establishing credit
limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the
normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents
its estimate of incurred losses in respect of trade and other receivables, loans and advances and investments.
Trade and other receivables
The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer.
The company operates primarily leasing business and manufacturing business of electrical equipments. The company
is not substantially exposed to credit risk in leasing business as company collects security deposits from lessees. For
receivables from manufacturing business, credit risk is managed as per Company's established policy, procedures and
control relating to customer credit management. Outstanding customer receivables are regularly monitored.
Expected credit loss assessment for customers as at March 31, 2025 and March 31, 2024
Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine
incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant
credit losses. Given that the macro economic indicators affecting customers of the Company have not undergone any
substantial change, the Company expects the historical trend of minimal credit losses to continue. Further, management
believes that the unimpaired amounts that are past due by more than 365 days are still collectible in full, based on
historical payment behaviour and extensive analysis of customer credit risk.
Cash and cash equivalents
The Company held cash and cash equivalents with credit worthy banks and NBFCs of Rs. 265.41 and Rs. 197.14 as at
March 31, 2025 and March 31, 2024 respectively. The credit worthiness of such banks and NBFCs is evaluated by the
management on an ongoing basis and is considered to be good.
Loans and advances to related parties
The Company does not expect any losses from non-performance by these counter-parties as these are subsidiaries,
associates and entities held under common control.
B. Liquidity risk
Liquidity risk is the risk that the company will not be able to meet its financial obligations that are settled in cash or
another financial assets on their respective due dates. The company manages its liquidity risk by ensuring, as far as
possible, that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions,
without incurring unacceptable losses or risk to the company's reputation.
The company has obtained fund based working capital lines from banks and financial institutions. The company also
constantly monitors funding options available in the debt and capital markets with a view to maintaining financial
flexibility.
The company has sufficient current assets comprising of trade receivables, cash & cash equivalents, investments in
equity & mutual funds, other bank balances, loans, inventories and other current financial assets to manage the liquidity
risk, if any in relation to current financial liabilities.
h Market risk
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in
market rates and prices (such as interest rates, foreign currency exchange rates) or in the price of market risk-sensitive
instruments as a result of such adverse changes in market rates and prices. Market risk is attributable to all market risk-
sensitive financial instruments, all foreign currency receivables and payables and all short term and long-term debt. The
Company is exposed to market risk primarily related to foreign exchange rate risk, interest rate risk and the market
value of its investments.
(i) Currency risk
The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit and
loss, where any transaction references more than one currency or where assets/ liabilities are denominated in a
currency other than the functional currency of the entity.
Considering the countries and economic environment in which the Company operates, its operations are subject
to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in
U.S. dollar against the functional currency of the company.
Interest rate sensitivity - fixed rate instruments
The Company does not account for any fixed-rate financial assets or financial liabilities at fair value through profit
or loss, therefore, a change in interest rates at the reporting date would not affect profit or loss for any of these
fixed interest bearing financial instruments.
Interest rate sensitivity - variable rate instruments
A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased/
decreased profit or loss by amounts shown below. This analyses assumes that all other variables, in particular,
foreign currency exchange rates, remain constant. This calculation also assumes that the change occurs at the
balance sheet date and has been calculated based on risk exposures outstanding as at that date. The year end
balances are not necessarily representative of the average debt outstanding during the year.
(iii) Other price risk
a. The company is exposed to equity price risk arising from investments held by the company and classified
in the balance sheet either as fair value through OCI or at fair value through profit or loss.
To manage its price risk arising from investments in equity securities, the company diversifies its portfolio.
Diversification of the portfolio is done in accordance with the limits set by the company.
The majority of the company's equity investments are listed on the Bombay Stock Exchange (BSE) or the
National Stock Exchange (NSE) in India.
b. Sensitivity analysis- equity price risk: The table below summarises the impact of increase/decrease of the
index of the company's equity and profit for the year. The analysis is based on the assumption that the
equity/index had increased by 100 basis points or decreased by 100 basis with all other variables, held
constant, and that all the company's investments in equity instruments moved in line with index.
Note 50 Capital Management
The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain
future development of the business. It sets the amount of capital required on the basis of annual business and long-term operating
plans which include capital and other strategic investments. The Company manages its capital structure and makes adjustments to it
is the light of changes in economic conditions and the risk characteristics of the underlying assets.
The funding requirements are met through a mixture of equity, preference shares and other borrowings. The Group's policy is to use
short-term and long-term borrowings to meet anticipated funding requirements.
The Company monitors capital using a ratio of 'Net debt' to 'Total Equity'. For this purpose, net debt is defined as total liabilities,
comprising total borrowings and obligations under finance leases, less cash and cash equivalents. Total equity comprises all
components of equity including share capital.
Note 57
The Company has used accounting software "Tally" for maintaining its books of account which has a feature of audit trail (edit
log) enabled at the entry level but not at the application level as a whole. Further more, the company is maintaining the records of
property, plant and equipment and investments manually and hence audit trail is not applicable to those records. Further, there are
no instances of audit trail feature being tampered with . The audit trail has been preserved by the Company as per the statutory
requirements for record retention.
Note 58 Additional regulatory information required by Schedule III to The Companies Act, 2013
(i) The Company does not have any benami property held in their name. No proceedings have been initiated on or are pending
against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and
Rules made thereunder.
(ii) The Company has not been declared wilful defaulter by any bank or financial institution or other lender or government or any
government authority.
(iii) 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.
(iv) Utilisation of borrowed funds and share premium -
I. The Company has 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 persons or entities identified in any manner whatsoever by or on
behalf of the Parent Company (Ultimate Beneficiaries) or
(b) Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries
II. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with
the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries
(v) There are no transactions relating to previously unrecorded income that have been surrendered or disclosed as income during
the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of
the Income Tax Act, 1961).
(vi) The company does not have any transactions/ balances outstanding with struck off companies.
(vii) The Company has not traded or invested in crypto currency or virtual currency during the year.
(viii) The Company does not have any charges or satisfaction of charges which is yet to be registered with ROC beyond the
statutory period.
(ix) The Company does not have working capital facilities sanctioned by bank on the basis of security of current assets.
Note 59
Previous year figures have been regrouped/ rearranged to conform to current year presentation, wherever considered necessary.
As per our Report of even date attached For & on behalf of the Board of Directors
Lodha & Co LLP
Chartered Accountants
Firm's Registration No. 301051E/ E300284
Vikram Matta Deepak Kumar K.R. Anil Kumar
Partner Chairman & Managing Director Director
Membership No. 054087 (DIN: 07512769) (DIN: 00505651)
Rushabh Ajmera Deepak Kumar Ajmera
Place : Mumbai Company Secretary Chief Financial Officer
Date : May 15, 2025
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