(x) Contingent Liability, Contingent Asset and
Provisions
Contingent liability
Contingent liabilities are possible obligations
that arise from past events and whose existence
will only be confirmed by the occurrence or non¬
occurrence of one or more uncertain future events
not wholly within the control of the Company.
Where it is not probable that an outflow of
economic benefits will be required, or the amount
cannot be estimated reliably, the obligation is
disclosed as a contingent liability, unless the
probability of outflow of economic benefits
is remote.
Contingent assets
Contingent assets are possible assets that arises
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 Company.
Provisions
The Company creates a provision when there is
present obligation as a result of a past event that
probably requires an outflow of resources and
a reliable estimate can be made of the amount
of obligation.
If the effect of the time value of money is material,
provisions are determined by discounting the
expected future cash flows (representing the
best estimate of the expenditure required to
settle the present obligation at the balance sheet
date) at a pre-tax rate that reflects current market
assessments of the time value of money and the
risks specific to the liability. The unwinding of the
discount is recognised as finance cost.
[xi] Cash and cash equivalents
Cash and cash equivalents include cash on hand,
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, and bank overdrafts. Bank
overdrafts are shown within borrowings in current
financial liabilities in the balance sheet.
[xii] Earnings per share
Basic earnings per share are calculated by dividing
the net profit or loss for the year attributable to
equity shareholders by the weighted average
number of equity shares outstanding during
the period. The weighted average numbers of
equity shares outstanding during the period are
adjusted for events such as bonus issue, share split
or consolidation of shares.
For calculating diluted earnings per share, the net
profit or loss for the year attributable to equity
shareholders and the weighted average number of
shares outstanding during the period are adjusted
for the effects of all dilutive potential equity shares.
The dilutive potential equity shares are deemed
converted into equity shares as at the beginning
of the period, unless they have been issued at a
later date.
[xiii] Share-based payments
The Employee Stock Option Scheme (‘the
Scheme') provides for the grant of equity shares
of the Company to its employees. The Scheme
provides that employees are granted an option to
acquire equity shares of the Company that vests
in a graded manner. The options may be exercised
within a specified period. The Company uses the
grant date fair value to account for its equity settled
share-based payment plans granted to employee,
with a corresponding increase in equity over
the period that the employees unconditionally
become entitled to the awards. Compensation
cost is measured using independent valuation by
Black-Scholes model.
Compensation cost, if any is amortised over the
vesting period. The cost is recorded under the
head “employee benefit expense” in the statement
of profit and loss.
(xiv) Segment reporting
Operating segments are reported in a manner
consistent with the internal reporting provided to
the chief operating decision maker.
In accordance with Ind AS 108 - Operating
Segments, the operating segments used to
present segment information are identified on the
basis of internal reports used by the Company's
Management to allocate resources to the
segments and assess their performance.
Segment profit is used to measure performance as
management believes that such information is the
most relevant in evaluating the results of certain
segments relative to other entities that operate
within these industries. Inter-segment pricing is
determined on an arm's length basis.
The operating segments have been identified
on the basis of the nature of products/
services. Further:
1. Segment revenue includes sales and other
income directly identifiable with / allocable
to the segment.
2. Expenses that are directly identifiable with
/ allocable to segments are considered for
determining the segment result. Expenses
which relate to the Company as a whole and
not allocable to segments are included under
unallowable expenditure.
3. Income which relates to the Company as
a whole and not allocable to segments is
included in unallowable income.
4. Segment assets and liabilities include those
directly identifiable with the respective
segments. Unallowable assets and liabilities
represent the assets and liabilities that relate
to the Company as a whole and not allocable
to any segment.
The Board of Director(s) are collectively the
Company's ‘Chief Operating Decision Maker' or
‘CODM' within the meaning of Ind AS 108. Refer
Note 42 for segment information.
(xv) Leases
The Company as a lessee
The Company's lease asset classes primarily consist
of leases for land and buildings. The Company
assesses whether a contract contains a lease, at
inception of a contract. A contract is, or contains,
a lease if the contract conveys the right to control
the use of an identified asset for a period of time
in exchange for consideration. To assess whether a
contract conveys the right to control the use of an
identified asset, the Company assesses whether:
♦ the contract involves the use of an
identified asset
♦ the Company has substantially all the economic
benefits from use of the asset through the
period of the lease and
♦ the Company has the right to direct the use of
the asset.
At the date of commencement of the lease, the
Company recognises a right-of-use (ROU) asset
and a corresponding lease liability for all lease
arrangements in which it is a lessee, except for
leases with a term of 12 months or less (short-term
leases) and low value leases. For these short-term
and low-value leases, the Company recognises
the lease payments as an operating expense on a
straight-line basis over the term of the lease.
Certain lease arrangements include the options
to extend or terminate the lease before the end
of the lease term. ROU assets and lease liabilities
includes these options when it is reasonably
certain that they will be exercised.
The ROU assets are initially recognised at cost,
which comprises the initial amount of the lease
liability adjusted for any lease payments made at
or prior to the commencement date of the lease
plus any initial direct costs less any lease incentives.
They are subsequently measured at cost less
accumulated depreciation and impairment losses.
ROU assets are depreciated from the
commencement date on a straight-line basis
over the shorter of the lease term and useful life
of the underlying asset. ROU assets are evaluated
for recoverability whenever events or changes
in circumstances indicate that their carrying
amounts may not be recoverable. For the purpose
of impairment testing, the recoverable amount
(i.e. the higher of the fair value less cost to sell and
the value-in-use) is determined on an individual
asset basis unless the asset does not generate
cash flows that are largely independent of those
from other assets. In such cases, the recoverable
amount is determined for the Cash Generating
Unit (CGU) to which the asset belongs.
The lease liability is initially measured at amortised
cost at the present value of the future lease
payments. The lease payments are discounted
using the interest rate implicit in the lease or, if
not readily determinable, using the incremental
borrowing rates in the country of domicile of
these leases. Lease liabilities are remeasured with
a corresponding adjustment to the related ROU
asset if the Company changes its assessment
of whether it will exercise an extension or a
termination option.
Lease liability and ROU assets have been
separately presented in the Balance Sheet and
lease payments have been classified as financing
cash flows.
The Company as a lessor
Leases for which the Company is a lessor is
classified as a finance or operating lease. Whenever
the terms of the lease transfer substantially all the
risks and rewards of ownership to the lessee, the
contract is classified as a finance lease. All other
leases are classified as operating leases.
When the Company is an intermediate lessor, it
accounts for its interests in the head lease and the
sublease separately. The sublease is classified as a
finance or operating lease by reference to the ROU
asset arising from the head lease.
For operating leases, rental income is recognised on
astraight-linebasisoverthetermoftherelevantlease.
Footnote :
(i) There are no internally generated intangible assets.
(ii) The Company has not carried out any revaluation of intangible assets for the year ended March 31, 2026
and year ended March 31, 2025.
(iii) The company have not acquired intangible assets free of charge, or for nominal consideration, by way
of a government grant.
Liquidation
In the event of liquidation of the Company, the holders of equity shares shall be entitled to receive all of
the remaining assets of the Company after distribution of all preferential amounts, if any. Such distribution
amounts will be in proportion to the number of equity shares held by the shareholders.
Footnotes:-
HDFC Bank Ltd
(a.) The company has also availed Overdraft facility / LC limit (Sanctioned Limit H48.60 Mn) from HDFC Bank
Ltd, Which is secured against pari passu charge on pledged of fixed deposits.
The loan carries a floating rate of interest of 8.40% per annum (Repo rate Spread).
(b.) The company has also availed overdraft facility (Sanctioned Limit H 10.00 Mn) from HDFC Bank Ltd,
which is on the basis of personal guarantee of H 10 Mn from Managing Director (Mr. Hardeep Singh).
The loan carries a floating rate of interest of 9.47% per annum (Repo rate Spread).
2. Corporate Social Responsibility expenses
As per section 135 of the Companies Act, 2013, a Company, meeting the applicability threshold,
needs to spend at least 2% of average net profit for the immediately preceding three financial year on
Corporate Social Responsibility (‘CSR') activities. The area for CSR activities are eradication of hunger
and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation,
environment sustainability, disaster relief and rural development projects. A CSR committee has been
formed by the group as per the Act.
42 SEGMENT REPORTINGA. Basis for Segmentation
An operating segment is a component that engages in business activities from which it may earn revenues
and incur expenses, including revenues and expenses that relate to transactions with any of the other
components, and for which discrete financial information is available.
The board of directors have been identified as the Chief Operating Decision Maker ('CODM'), since they are
responsible for all major decision w.r.t. the preparation and execution of business plan, preparation of budget,
planning, expansion, alliance, joint venture, merger and acquisition, and expansion of any facility.
The Company's board reviews the results of each segment on a quarterly basis. The company's board of
directors uses Profit before tax ('PBT') to assess the performance of the operating segments. Accordingly,
there is only one reportable segment for the Company which is "Sale of Product", hence, no specific
disclosures have been made.
Entity wide disclosuresB. Information about reportable segments
The Company deals in one business segment namely Manufacturing of LED Lighting therefore, product
wise revenue disclosures are not applicable to the Company.
i) Information about geographical areas
Company operates primarily under a single geographic location i.e. India and accordingly, there are no
separate reportable geographical segments.
C. Revenue from Major customer.
In IKIO Technologies Limited, Revenue generated from one customer which is more than 10% amounting
to H 1460. 08 Mn. (March 31, 2025 H 1905.81 Mn.) of the total revenue of the company.
43 EMPLOYEES STOCK OPTION PLAN
The Company has the ILL Employee Stock Option Scheme 2022 ESOP Scheme:
The Board has, in its meeting held on September 14, 2022, authorised and given its in principle approval
to constitute the ILL Employee Stock Option Scheme 2022, the constitution of the ILL Employee Stock
Option Scheme 2022 has been further approved by the shareholders of the Company on September 16,
2022. The ILL Employee Stock Option Scheme 2022 has been formally adopted and approved by the
Board and the shareholders of the Company in their respective meetings held on September 14, 2022 &
September 16, 2022.
Pursuant to SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, the ILL Employee
Stock Option Scheme 2022 ESOP Scheme has been ratified by the Shareholders of the Company in the
8th Annual General Meeting held on 20th August 2024.
Further, Based on the Recommendation of Nomination & Remuneration (NRC) Committee members, the
Board has approved the Grant of 8,70,000 Stock Options to the Eligible employees of the Company and
its subsidiaries Company on 8th January 2025, 195,000 Stock Options on May 13, 2025 and 17,500 Stock
Options August 02, 2025 respectively.
(C) Fair Value methodology and Assumptions - ILL Employees Stock Option Scheme, 2022
Fair value: The Company has adopted ‘fair value method' using the Black-Scholes options pricing model for
accounting employee share based compensation cost. Under the fair value method, fair value of options are
expensed on straight-line basis over the vesting period as employee share based compensation cost.
Stock Market Price: As the parent company is listed on a Stock Exchange thus, the historical share price for
the relevant period is readily available. The fair value of the underlying stock based on the latest available
closing MarketPrice on stock exchange has been considered for valuing the grant.
Expected Volatility: Volatility is a measure of the amount by which a price has fluctuated or is expected
to fluctuate during the period. The measure of volatility as used in the Black Scholes option-pricing model
is the annualized standard deviation of the continuously compounded rates of return on the stock over
a period of time. The period to be considered for volatility has to be adequate to represent a consistent
trend in the price movements. It is also important that movement due to abnormal events get evened out.
The expected volatility for the options issued by the company has been determined after observing the
Company's historical volatility is 25.64%.
Risk-free rate of return: This is based on the yields on government bonds of term equivalent to the expected
life of the option as on the date of grant. The risk free rate of return taken 6.51%.
Exercise Price: As per clause 7.2 of ILL Employees Stock Option Scheme, 2022, The exercise price shall in
no event be a price that is less then the face value of the share(s.) that will be issued or acquired pursuant to
the exercise of an option.
Weighted average remaining contractual life: Time to Maturity / Expected Life of Options is the period for
which the company expects the Options to be alive. The minimum life of a stock option is the minimum
period before which the Options cannot be exercised and the maximum life is the period after which the
Options cannot be exercised. The expected life of the option has been taken based on the inputs on expected
exercise year provided by the parent company.
44 EMPLOYEE BENEFITS
The Company contributes to the following post-employment defined benefit plans in India.
1. Defined contribution plans:
The Company makes contributions, determined as a specified percentage of employee salaries,
in respect of qualifying employees towards provident fund, administered and managed by the
government of India. The Company has no obligations other than to make the specified contributions.
The contributions are charged to the statement of profit and loss as they accrue.
2. Defined benefit plan:
Gratuity
The Company operates a post-employment defined benefit plan for Gratuity. This plan entitles an
employee to receive half month's salary for each year of completed service at the time of retirement/
exit. The gratuity liability is entirely funded.
The present value of obligation is determined based on actuarial valuation using the Projected Unit
Credit Method, which recognise each period of service as giving rise to additional employee benefit
entitlement and measures each unit separately to build up the final obligation.
The most recent actuarial valuation of present value of the defined benefit obligation for gratuity were
carried out as at March 31, 2026. The present value of the defined benefit obligations and the related
current service cost and past service cost, were measured using the Projected Unit Credit Method.
a) Economic Assumptions
The principal assumptions are the discount rate and salary growth rate. The discount rate is based
upon the market yields available on government bonds at the accounting date with a term that
matches that of liabilities. Salary increase rate takes into account of inflation, seniority, promotion
and other relevant factors on long term basis. Valuation assumptions are as follows which have
been selected by the company.
Although the analysis does not take account of the full distribution of cash flows expected under the
plan, it does provide an approximation of the sensitivity of the assumptions shown.
Sensitivities due to mortality is not material and hence impact of change not calculated.
Sensitivities as to rate of inflation, rate of increase of pensions in payment, rate of increase of pensions
before retirement and life expectancy are not applicable being a lump sum benefit on retirement.
Description of Risk Exposures:
Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such
company is exposed to various risks as follows:
i. Salary Increases- More than expected increase in the future salary levels may results in increase in
the liabilities.
ii. Discount Rate: In case of yield on the government bonds drops in the future period then it may
result in increase in liability.
iii. Withdrawals - if the actual withdrawal rate is turn out to be more or less than expected then it may
result in increase in the liabilities.
iv. Mortality - if the actual mortality rate in the future turns out to be more or less than expected then
it may result increase in the liabilities.
Terms and conditions of transactions with the related parties
i. The terms and conditions of the transactions with key management personnel were no more
favourable than those available, or which might reasonably be expected to be available, on similar
transactions to non-key management personnel related entities on an arm's length basis.
ii. All outstanding balances with these related parties are priced on an arm's length basis and are to
be settled in cash. None of the balances are secured.
iii. Provision for incremental gratuity liability and leave encashment for the current year in respect
of key management personnels has not been considered above, since the provision is based on a
actuarial basis for the Company as a whole.
Level 1: It includes financial instruments measured using quoted prices.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using
valuation techniques which maximize the use of observable market data and rely as little as possible on
entity specific estimates. If all significant inputs required to fair value an instrument are observable, the
instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument
is included in level 3. The fair value of financial assets and liabilities included in Level 3 is determined in
accordance with generally accepted pricing models based on discounted cash flow analysis using prices
from observable current market transactions and dealer quotes of similar instruments.
The Company's borrowings have been contracted at floating rates of interest. Accordingly, the carrying value
of such borrowings (including interest accrued but not due) which approximates fair value.
The carrying amounts of trade receivables, trade payables, cash and cash equivalents and other financial
assets and liabilities, approximates the fair values, due to their short-term nature. Fair value of non-current
financial assets which includes bank deposits (due for maturity after twelve months from the reporting date)
and security deposits is similar to the carrying value as there is no significant differences between carrying
value and fair value.
The fair value for security deposits were calculated based on discounted cash flows using a current lending
rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable
inputs including counterparty credit risk.
Valuation processes
The Management performs the valuations of financial assets and liabilities required for financial reporting
purposes on a periodic basis, including level 3 fair values.
b) Financial risk management
The Company has exposure to the following risks arising from financial instruments:
♦ Credit risk
♦ Liquidity risk
♦ 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 Board of Directors have authorised senior management to
establish the processes and ensure control over risks through the mechanism of properly defined framework
in line with the businesses of the company.
The Company's risk management policies are established to identify and analyse the risks faced by
the Company, to set appropriate risks limits and controls, to monitor risks and adherence to limits.
Risk management policies are reviewed regularly to reflect changes in market conditions and the
Company's activities.
The Company has policies covering specific areas, such as interest rate risk, foreign currency risk, other price
risk, credit risk, liquidity risk, and the use of derivative and non-derivative financial instruments. Compliance
with policies and exposure limits is reviewed on a continuous basis.
i. Credit risk
The maximum exposure to credit risks is represented by the total carrying amount of these financial assets
in the balance sheet
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 given and investments made.
The Company's credit risk is primarily to the amount due from customer and investments. The Company
maintains a defined credit policy and monitors the exposures to these credit risks on an ongoing basis. Credit
risk on cash and cash equivalents is limited as the Company generally invests in deposits with scheduled
commercial banks with high credit ratings assigned by domestic credit rating agencies.
The maximum exposure to the credit risk at the reporting date is primarily from trade receivables. Trade
receivables are unsecured and are derived from revenue earned from customers primarily located in India.
The Company does monitor the economic environment in which it operates. The Company manages its
Credit risk through credit approvals, establishing credit limits and continuously monitoring credit worthiness
of customers to which the Company grants credit terms in the normal course of business.
On adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss or
gain. The Company establishes an allowance for impairment that represents its expected credit losses in
respect of trade receivable. The management uses a simplified approach (i.e. based on lifetime ECL) for the
purpose of impairment loss allowance.
ii. Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with
its financial liabilities that are settled by delivering cash or another financial asset. The Company's approach
to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities
when they are fallen due, under both normal and stressed conditions, without incurring unacceptable losses
or risking damage to the Company's reputation.
The Company believes that its liquidity position, including total cash (including bank deposits under lien and
excluding interest accrued but not due) of H 434.13 millions as at March 31, 2026 (March 31, 2025 H 970.68
millions) and the anticipated future internally generated funds from operations will enable it to meet its
future known obligations in the ordinary course of business.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the
availability of funding through an adequate amount of credit facilities to meet obligations when due. The
Company's policy is to regularly monitor its liquidity requirements to ensure that it maintains sufficient
reserves of cash and funding from group companies to meet its liquidity requirements in the short and
long term.
The Company's liquidity management process as monitored by management, includes the following:
♦ Day to day funding, managed by monitoring future cash flows to ensure that requirements can be met.
♦ Maintaining rolling forecasts of the Company's liquidity position on the basis of expected cash flows.
iii. Market Risk
Market risk is the risk that the future cash flows of a financial instrument will fluctuate because of
changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and
other price risk, the Company mainly has exposure to two type of market risk namely: currency risk
and interest rate risk. The objective of market risk management is to manage and control market risk
exposures within acceptable parameters, while optimizing the return.
Currency risk
Currency risk is the risk that the future cash flows of a financial instrument will fluctuate because
of changes in foreign exchange rates. The Company is exposed to the effects of fluctuation in the
prevailing foreign currency exchange rates on its financial position and cash flows to the extent of
earnings and expenses in foreign currencies. Exposure arises primarily due to exchange rate fluctuations
between the functional currency and other currencies from the Company's operating, investing and
financing activities.
Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because
of changes in market interest rates. The Company's main interest rate risk arises from long-term
borrowings with variable rates, which expose the Company to cash flow interest rate risk.
Exposure to interest rate risk
The Company's interest rate risk arises majorly from the term loans from banks carrying floating rate
of interest. These obligations exposes the Company to cash flow interest rate risk. The exposure of
the Company's borrowing to interest rate changes as reported to the management at the end of the
reporting period are as follows:
49 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 equity holders of the Company.
Management assesses the Company's capital requirements in order to maintain an efficient overall financing
structure. The Company manages the capital structure and makes adjustments to it in the light of changes
in economic conditions and the risk characteristics of the underlying assets.
To maintain or adjust the capital structure, the Company may return capital to shareholders, raise new debt
or issue new shares.
The Company monitors capital on the basis of the debt to total equity, which is calculated as interest-bearing
debts divided by total equity (equity attributable to owners of the parent).
Notes:-
i. Current Ratio:- decreased due to decrease in current assets and liabilities.
ii. Debt Equity Ratio: - In current year, debts repaid fully.
iii. Debt Service Coverage Ratio:- The Ratio has been improved due to repayment of borrowings in
current year.
iv. Return on Equity Ratio:- In current year, net profit of the Company decreased.
v. Net Capital Turnover Ratio :- The ratio has increased due to decrease in revenue.
vi. Return on Capital Employed :- The ratio has increased due to decrease in earnings.
vii. Return on Investment :- Due to decrease in net profit and increase in average total assets during the year
52 DISCLOSURE REQUIREMENT FOR MAINTENANCE AND RETENTION OF AUDIT TRAIL"
The Company has used an 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 the respective software, except for the instances mentioned below:
(a.) The feature of recording audit trail (edit log) facility was not enabled at the database level to log any
direct data changes for the accounting software used for maintaining the books of account relating to
payroll of the accounting software used for maintaining general ledger.
Further, during the the year ended March 31, 2026 and March 31, 2025 there were no instance of audit trail
feature being tampered with.
Additionally, we have preserved audit trail as per the statutory requirements for the retention of record.
53 DETAILS WITH RESPECT TO THE BENAMI PROPERTIES:
No proceedings have been initiated or pending against the entity under the Benami Transactions (prohibition)
Act, 1988 for the year ended March 31, 2026 and year ended March 31, 2025.
54 UNDISCLOSED INCOME
There is no such income which has not been disclosed in the books of accounts. No such income is
surrendered or disclosed as income during the year in the tax assessments under Income Tax Act, 1961.
(b) During the year the company has invested in the subsidiaries of E 520.02 Million (previous year:E 827.55 million out of money raised through IPO (including share premium).57 WILFUL DEFAULTER:
No bank or financial institution has declared the company as "Wilful defaulter".
58 RELATIONSHIP WITH STRUCK OFF COMPANIES:
No transaction has been made with the company struck off under section 248 of The Companies Act, 2013 or
section 560 of Companies Act, 1956 during the year ended March 31, 2026 and year ended March 31, 2025.
62 The Ministry of Labour & Employment (MoLE), Government of India, has announced the implementation
of four Labour Codes viz. 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, effective
21st November, 2025. On the basis of information available, the Company has assessed the incremental
impact for these changes at current estimate and the incremental impact is immaterial. The Company
continues to monitor the finalisation of Central/State Rules and clarifications from the Government on
other aspects of the Labour Codes and would consider appropriate accounting effect on the basis of such
developments as needed.
63 Figure less than H 5000.00 are disclosed as 0.00
64 Previous year's figures have been regrouped / reclassified as per the current year presentation for the
purpose of comparability.
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