m. Provisions, Contingent liabilities and Contingent Assets
The Company recognises a provision when there is a present obligation as a result of past event that
probably requires an outflow of resources and reliable estimates can be made of the amount of obligation.
The provisions are reviewed at the end of each reporting period and are adjusted to reflect the current best
estimates. The timing of recognition requires application of judgement to existing facts and circumstances
which may be subject to change. A disclosure of contingent liability is made when there is possible obligation
or a present obligation that will probably not require outflow of resources or where a reliable estimate of
the obligation cannot be made. Where there is a possible obligation or a present obligation and likelihood of
outflow of resources is remote, no provision or disclosure is made.
Provision for warranty related costs are recognised when the terms and conditions attached to and forming part
ofthe executedportion ofthecontract of sale ofproductsand/orproviding of servicesor both are assessed to have
underlyingobligationstobemetduringthewarrantyperiod.Theestimateofsuchwarrantycostsisrevisedannually
Contingent assets are not recognised but disclosed in the financial statements, where economic inflow is
probable.
17.2 Terms / rights attached to equity shares
The Company has only one class of Equity Shares having a par value of Rs. 5 per share. Each shareholders is eligible for one
vote per share held.
In the event of liquidation of the Company, the holders of equity shares will be entitle to receive any of the remaining assets
of the Company, after distribution of preferential amount, if any. The distribution will in proportion of the number of equity
shares held by the shareholders.
The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuring Annual General
Meeting, except in case of interim dividend.
The Company's investment in Sharika Spintech Private Limited ("Spintech”), comprising of equity and loans, amounting
' 566.25 Lakhs as at 31 March 2025, after reversal of a provision for diminution of ' 285.28 Lakhs. Although Spintech has
accumulated losses of ' 453.07 Lakhs as at 31 March 2025, management believes the carrying value remains appropriate,
supported by a Preliminary Agreement with Brazil's SPIN Engenharia for collaboration on specific smart grid automation
solutions.
The collaboration is expected to enhance value through technological integration and modernization of the power sector. The
fair value, assessed using the discounted cash flow method, is based on key assumptions including technology adoption, cost
efficiencies, and execution of business plans. Based on these factors, supported by an independent valuation, management is
of view that the carrying value of the investment in Spintech as at 31 March 2025 is appropriate."
The Company evaluated the recoverability of its intercorporate loans using the Expected Credit Loss (ECL) model as per
Ind AS 109. Based on this assessment, and considering indicators such as financial stress, default on repayment, and low
probability of recovery, the loans given to other corporates were classified as credit-impaired (Stage 3).
Accordingly, a 100% provision amounting to ' 249.62 Lakhs has been recognised during the year in the Statement of Profit
and Loss under exceptional item."
(a) Defined Contribution Plans
The Company contributes to the Government managed provident and pension fund for all qualifying employees.
Contribution to provident fund of ' 15.33 Lakhs (previous year: ' 16.01 Lakhs) is recognized as an expense and included
in "Contribution to provident and other funds" in Statement of Profit and Loss.
(b) Defined Benefit Plans:
The Company has defined benefit plan for payment of gratuity to all qualifying employees. It is governed by the Payment
of Gratuity Act, 1972. Under this Act, an employee who has completed five years of service is entitled to the specified
benefit. The level of benefits provided depends on the employee's length of service and salary at retirement age. The
Company’s defined benefit plan is unfunded.
There are no other post retirement benefits provided by the Company.
The most recent actuarial valuation of the present value of the defined benefit obligation were carried out as at 31
March 2025 and 31 March 2024 by Mithras Consultants, Fellow of the Institute of the Actuaries of India. The present
value of the defined benefit obligation, the related current service cost and past service cost, were measured using the
projected unit credit method.
Note:-43 Contingent liabilities:
(a) Contingent liabilities as at 31 March 2025 : Rs. Nil (31 March 2024 : Rs. Nil)
Note:-44 Capital and other Commitments
a) Estimatedamountsofcontractsremainingtobe executedon capitalaccountandnotprovidedfor(netofadvances)is
' 210.54 Lakhs (as at 31 March 2024: ' 201.68 Lakhs).
b) BankguaranteesandletterofcreditissuedbytheCompanytoitscustomersfor'1,518.60Lakhs(asat31March2024:
' 843.40 Lakhs).
Note:-45 Balance confirmation
The Company has a system of obtaining periodic confirmation of balances from banks, trade receivables/payables/advances
to vendors and other parties (other than disputed parties). Adjustments/restatement/impairment loss/provisions on
advances, if any will be accounted for on confirmation/reconciliation of the same, which in the opinion of the management
will not have a material impact on the standalone financial statement.
Note:-46 Segment information
The Company is primarily engaged in Engineering, Procurement and Construction business (EPC) relating to Electrical and
other Cables, Capacitors, Wires and Conductors, etc. and Turnkey Projects predominantly relating thereto. Information is
reported to and evaluated regularly by the Chief Operating Decision Maker (CODM) for the purpose of resource allocation and
assessing performance, focuses on the business as a whole and accordingly, there is a single reportable segment in the context
of the Operating Segment as defined under Ind AS 108.
(B) Contract balances
All the Trade Receivables and Contract Liabilities have been separately presented in notes to accounts.
Outstanding Trade Receivables are usually non-interest bearing and are generally on credit terms upto 90 days except retention
money and certain other recoverable amounts withheld by the customer(s) as per the governing terms and conditions of the
underlying contract(s)/turnkey contracts. The outstanding Trade Receivables relating to turnkey contracts are generally non¬
interest bearing and credit terms thereunder are specific to each of such contracts. During the Current year, the Company has
recognised a provision for expected credit loss on Trade Receivables of ' 33.55 lakhs (previous year : ' 236.17 lakhs).
Note:-48 The company has a comprehensive system of maintenance of information and documents as required by the
Goods and Services Act ("GST Act”). Since the GST Act requires existence of such information and documentation to
becontemporaneous in nature, books of accounts of the company are also subject to filing of GST Periodic and Annual Return
as per applicable provisions of GST Act to determine whether the all transactions have been duly recorded and reconcile with
the GST Portal. Adjustments, if any, arising while filing the GST Annual Return shall be accounted for as and when the return
is filed for the current financial year. However, the management is of the opinion that the aforesaid annual return will not have
any material impact on the Standalone financial statements.
Note:-49 The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and post-employment
benefits has received Presidential assent on 28 September 2020. The Code has been published in the Gazette of India. However,
the effective date of the Code is yet to be notified and final rules for quantifying the financial impact are also yet to be issued.
In view of this, the Company will assess the impact of the Code when relevant provisions are notified and will record related
impact, if any, in the period the Code becomes effective.
For the purpose of the Company's capital management, capital includes issued equity share capital, security
premium and all other equity reserves attributable to the equity holders of the Company.
The Company' s capital management objectives are:
• to ensure the Company's ability to continue as a going concern
• to provide an adequate return to shareholders by pricing products and services commensurately with the level
of risk.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions
and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may
adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company
monitors capital using a gearing ratio, which is net debt divided by total equity. The Company includes within net
debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents, excluding
discontinued operations, if any.
Investment in subsidiaries are classified as equity investments have been accounted at historical cost. Since these
are scope out of Ind As 109 for the purpose of measurement, the same have not been disclosed in the table
above.
'The carrying amount reflected above represents the Company’s maximum exposure to credit risk for such financial
assets.
(ii) Financial risk management
The Company’s finance function provides services to the business, coordinates access to financial market, monitors
and manages the financial risks relating to the operations of the Company through internal risk reports which
analyse exposures by degree and magnitude of the risk. These risks include market risk (including currency risk,
interest rate risk and other price risk), credit risk and liquidity risk.
The use of financial derivatives is governed by the Company’s policies approved by the Board of Directors of the
Company, which provide written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial
derivatives and non-derivative financial instruments and the investment of the excess liquidity. Compliance with
policies and exposure limits is reviewed by the Company on a continuous basis. The Company does not enter into
or trade financial instruments including derivative financial instruments for speculative purpose.
(iii) Market Risk
The Company's activities expose it primarily to the financial risks of changes in foreign currency exchange rates
and interest rates.
(iv) (a) Foreign Currency risk management
The Company is subject to the risk that changes in foreign currency values mainly impact the Company's cost of
imports of materials/capital goods, royalty expenses and borrowings etc.
Foreign exchange transactions are covered with in limits placed on the amount of uncovered exposure, if any, at any
point in time. The aim of the Company’s approach to management of currency risk is to leave the Company with
minimised residual risk.
(iv) (b) Foreign Currency sensitivity analysis
The Company is exposed to foreign exchange risk arising from various currency exposures, primarily with
respect to US Dollar.
A 10% strengthening of the INR against key currencies to which the Company is exposed (net of hedge) would
have led to additional gain in the Statement of Profit and Loss. A 10% weakening of the INR against these
currencies would have led to an equal but opposite effect.
The following table details the Company's sensitivity to a 10% increase and decrease in the Rupees against the
relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally
to key management personnel and represents management's assessment of the reasonably possible change in
foreign exchange rates. The sensitivity analysis includes unhedged external loans, receivables and payables in
currency other than the functional currency of the Company.
Interest rate risk refers to the possibility that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market interest rate. The Company is exposed to interest rate risk because it
borrows funds at both fixed and floating interest rates. The risk is managed by the Company by maintaining an
appropriate mix between fixed and floating rate borrowings.
(V) (b) Interest rate sensitivity analysis
The sensitivity analysis below have been determined based on the exposure to interest rates for floating rate
liabilities at the end of the reporting period. For floating rate liabilities, a 50 basis point increase or decrease is
used when reporting interest rate risk internally to key management personnel and represents management's
assessment of the reasonably possible change in interest rates.
If interest rates had been 50 basis points higher/lower and all other variables were held constant, the
Company’s profit for the year ended 31 March 2025 would decrease/increase by ' 5.59 Lakhs net of tax (for
the year ended 31 March 2024 decrease/increase by ' 3.20 Lakhs net of tax). This is mainly attributable to the
Company's exposure to interest rates on its variable rate borrowings.
(vi) Other price risks
Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market
traded price. Other price risk arises from financial assets such as investments in equity instruments and
mutual funds. The Company does not have investment in equity instruments, other than investments in
subsidiary which are held for strategic rather than trading purposes. The Company does not actively trade
these investments. The Company’s investment in mutual funds are in debt funds. Hence the Company’s
exposure to equity price risk is minimal.
(vii) Credit risk management
Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial
loss to the Company. Credit risk arises primarily from financial assets such as trade receivables, investment in
mutual funds, derivative financial instruments, other balances with banks, loans and other receivables.
(a) Trade receivables
Credit risk arising from trade receivables is managed in accordance with the Company's established
policy, procedures and control relating to customer credit risk management. The Company considers
such amounts as due only on completion of related milestones. Accordingly, risk of recovery of such
amounts is mitigated. All trade receivables are reviewed and assessed for default at each reporting
period.
For trade receivables, as a practical expedient, the Company computes credit loss allowance based on a
provision matrix. The provision matrix is prepared based on historically observed default rates over the
expected life of trade receivables and is adjusted for forward-looking estimates. The provision matrix at
the end of the reporting period is as follows and during the year the Company has changed the provision
matrix considering the long term outstanding and credit risk.
b) Loans and Receivables
The Company applies expected credit losses (ECL) model for measurement and recognition of loss allowance
on the loans given by the Company to the external parties. ECL is the difference between all contractual cash
flows that are due to the Company in accordance with the contract and all the cash flows that the Company
expects to receive (i.e., all cash shortfalls), discounted at the original effective interest rate.
The Company determines if there has been a significant increase in credit risk of the financial asset since initial
recognition. If the credit risk of such assets has not increased significantly, an amount equal to 12-month ECL
is measured and recognized as loss allowance. However, if credit risk has increased significantly, an amount
equal to lifetime ECL is measured and recognized as loss allowance.
12 months ECL are a portion of the lifetime ECL which result from default events that are possible within 12
months from the reporting date. Lifetime ECL are the expected credit losses resulting from all possible default
events over the expected life of a financial asset.
ECL are measured in a manner that they reflect unbiased and probability weighted amounts determined by a
range of outcomes, taking into account the time value of money and other reasonable information available as
a result of past events, current conditions and forecasts of future economic conditions.
c) Other financial assets
Credit risk arising from investment in debt funds, derivative financial instruments and other balances with
banks is limited because the counterparties are banks and recognised financial institutions with high credit
ratings assigned by the various credit rating agencies. There are no collaterals held against such investments
Liquidity Risk Management
Ultimate responsibility for liquidity risk management rests with the committee of board of directors of the
Company, which has established an appropriate liquidity risk management framework for the management of
the Company’s short, medium and long-term funding and liquidity management requirements. The Company
manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities,
by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial
assets and liabilities.
Liquidity and interest risk tables
The following table detail the analysis of derivative as well as non-derivative financial liabilities of the Company
into relevant maturity groupings based on the remaining period from the reporting date to the contractual
maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.
During the period, there were no transfers between Level 1 and level 2
(ix) Fair value of financial assets and financial liabilities that are not measured at fair value (but fair value disclosures are
required)
The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements
are a reasonable approximation of their fair values since the company does not anticipate that the carrying amounts
would be significantly different from the values that would eventually be received or settled.
Note:-61 Corporate Social Responsibility (CSR)
The provision for CSR is not applicable to the company and accordingly no amount has been spent on any CSR activity during
the year.
Note:-62 Other statutory information's:
(i) The company does not have any transaction with the companies struck off under Section 248 of the Companies Act
2013 or Section 560 of the Companies Act 1956 during the year ended 31 March 2025 and 31 March 2024.
(ii) There are no charges or satisfaction which are to be registered with the registrar of companies during the year ended
31 March 2025 and 31 March 2024.
(iii) The Company complies with the number of layers of companies in accordance with clause 87 of Section 2 of the Act
read with the Companies (Restriction on number of layers) rules 2017 during the year ended 31 March 2025 and 31
March 2024.
(iv) The Company has not invested or traded in cryptocurrency or virtual currency during the year ended 31 March 2025
and 31 March 2024.
(v) No proceedings have been initiated on or are pending against the company for holding Benami property under the
Prohibition of Benami Property Transaction Act 1988 (as amended in 2016) (formally the Benami Transactions
(Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder during the year ended 31 March 2025 and 31 March
2024.
(vi) The Company has not been declared a wilful defaulter by any bank or financial institution or government or any
government authorities during the year ended 31 March 2025 and 31 March 2024.
(vii) The Company has not entered into any scheme of arrangement approved by the competent authority in terms of
sections 232 to 237 of the Companies Act 2013 during the year ended 31 March 2025 and 31 March 2024.
(viii) During the year ended 31 March 2025 and 31 March 2024, the Company has not surrendered or disclosed as income
any transactions not recorded in the books of accounts in the course of tax assessments under the Income Tax Act, 1961
(such as search or survey or any other relevant provisions of the Income Tax Act 1961).
(ix) During the year ended 31 March 2025 and 31 March 2024, the Company has not advanced or loaned or invested funds
(either borrowed funds or the share premium or kind of funds) to any other person or entities, including foreign
entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the intermediary
shall:
a. directly or indirectly land or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the company (ultimate beneficiaries) or
b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.
(x) During the year ended 31 March 2025 and 31 March 2024, the Company has not received any funds from any persons or
entities 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.
(xi) The Company does not have any transaction which is not recorded in the books of accounts but 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 provisions of the Income Tax Act, 1961).
(xii) Quarterly returns or statements of the current assets filed by the Company with banks or financial institutions are in
agreement with books of accounts.
Note:-63 Events after the reporting period
There were no significant adjusting events that occurred subsequent to the reporting period other than the events
disclosed in the relevant notes.
Note:-64 Previous year comparatives
Previous year’s figures have been regrouped / reclassified, wherever necessary, to conform to current year
classification.
As per our Report of even date attached
For R D V & Associates For and on behalf of the Board of Directors of
Chartered Accountants SHARIKA ENTERPRISES LIMITED
(ICAI Firm Reg. No: 006128C)
Rajinder Kaul Sanjay Verma
Vaibhav Goel Managing Director Executive Director
(Partner) DIN - 01609805 DIN-08139841
Membership No. 0547918
Date : 28/05/2025 Garvita Asati Pushpa Yadav
Place: New Delhi Chief Financial Officer Company Secretary
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