S. PROVISIONS AND CONTINGENCIES
(i) Provisions.
Provisions are recognised when the Company has a
present obligation (legal or constructive) as a result
of a past event and it is probable that an outflow
of resources, that can be reliably estimated, will be
required to settle such an obligation.
If the effect of the time value of money is material,
provisions are determined by discounting the
expected future cash flows to net present value
using an appropriate pre-tax discount rate that
reflects current market assessments of the time
value of money and, where appropriate, the risks
specific to the liability. Unwinding of the discount
is recognised in the Statement of Profit and Loss
as a finance cost. Provisions are reviewed at each
reporting date and are adjusted to reflect the
current best estimate.
(ii) Warranties
The estimated liability for product warranties
is recorded when products are sold / project is
completed. These estimates are established using
historical information on the nature, frequency and
average cost of warranty claims. Management
estimates for possible future incidence based on
corrective actions on product failures. The timing
of outflows will vary as and when warranty claims
arise being typically up to five years.
(iii) Contingent Liabilities.
A present obligation that arises from past events
where it is either not probable that an outflow of
resources will be required to settle or a reliable
estimate of the amount cannot be made, is
disclosed as a contingent liability. Contingent
liabilities are also disclosed when there is a
possible obligation arising from past events, the
existence of which 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.
Claims against the Company where the possibility
of any outflow of resources in settlement is remote,
are not disclosed as contingent liabilities.
(iv) Contingent Assets.
Contingent assets are not recognised in standalone
financial statements since this may result in the
recognition of income that may never be realised.
However, when the realisation of income is virtually
certain, then the related asset is not a contingent
asset and is recognised accordingly.
T. OPERATING SEGMENT.
The company is exclusively engaged in the business
of Manufacturing of Power Products and providing
Services in the areas of Power Generation, Power
Transmission, Power Distribution and Power Automation.
Based on the management approach, the allocation of
resources and assessment of segment performance are
focused on the types of goods or services delivered or
provided. The Company is in the business of manufacture
and sale of electric equipment's, which in the context of
Indian Accounting Standard 108 'Operating Segment'
represents a single reportable business segment.
The revenues, total expenses and net profit as
per the Statement of profit and loss represent the
revenue, total expenses and the net profit of the sole
reportable segment.
U. RELATED PARTY TRANSACTIONS.
For details of the related party transactions, as per the
requirements under applicable Accounting Standards,
i.e., Ind AS 24 - Related Party Disclosures, for the period
ended March 31, 2025 and as reported in the Standalone
Financial Statement, see "Standalone Financial
Statement - Notes forming part of the Standalone
Financial Statement”.
V. CORPORATE SOCIAL RESPONSIBILITY ("CSR”)
As per Section 135 of the Companies act, 2013, a
company, meeting the applicability threshold, need
to spend at least 2% of its average net profit for the
immediately preceding three financial years on CSR
activities. The areas for CSR activities are eradication of
hunger and malnutrition, promoting education, art and
culture, health care, destitute care and rehabilitation,
environment sustainability, disaster relief and rural
development projects. The funds were primarily
allocated to a project and utilized through the year on
these activities which are specified in schedule VII of
the Companies Act, 2013.
As per section 135 of the Companies Act, 2013, a
company has formed CSR committee. (Refer Note No
56 to the Standalone Financial Statement).
W. FOREIGN CURRENCY.
i) Functional currency
The functional currency of the Company is the
Indian rupee. These financial statements are
presented in Indian rupees (rounded off to million).
ii) Initial Recognition
On initial recognition, all foreign currency
transactions are recorded by applying to the
foreign currency amount the exchange rate
between the functional currency and the foreign
currency at the date of the transaction.
iii) Subsequent Recognition
As at the reporting date, non-monetary items which
are carried in terms of historical cost denominated
in a foreign currency are reported using the
exchange rate at the date of the transaction. All
non-monetary items which are carried at fair value
or other similar valuation denominated in a foreign
currency are reported using the exchange rates
that existed when the values were determined. All
monetary assets and liabilities in foreign currency
are restated at the end of accounting period.
Exchange differences on restatement of all other
monetary items are recognised in the Statement of
Profit and Loss.
X. CURRENT AND NON-CURRENT CLASSIFICATION.
The Company presents assets and liabilities in
the balance sheet based on current/ non-current
classification. An asset is treated as current when it is:
• Expected to be realised or intended to be sold or
consumed in normal operating cycle
• Held primarily for the purpose of trading.
• Expected to be realised within twelve months after
the reporting period, or
• Cash or cash equivalent unless restricted from
being exchanged or used to settle a liability for at
least twelve months after the reporting period
All other assets are classified as non-current.
A liability is current when:
• It is expected to be settled in normal operating cycle
• It is held primarily for the purpose of trading
• It is due to be settled within twelve months after the
reporting period, or
• There is no unconditional right to defer the
settlement of the liability for at least twelve months
after the reporting period
The company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non¬
current assets and liabilities
Y. SUBSEQUENT EVENTS OCCURRED AFTER BALANCE
SHEET DATE.
No subsequent events occurred after the
balance sheet date.
Z. OTHERS.
Figures have been rearranged and regrouped wherever
practicable and considered necessary.
AA. Non-Current Assets Held for Sale and Discontinued
Operations
Classification as Held for Sale:
The Company classifies non-current assets or disposal
groups as held for sale if their carrying amounts will be
recovered principally through a sale transaction rather than
through continuing use. For this to be the case, the asset (or
disposal group) must be available for immediate sale in its
present condition and its sale must be highly probable.
Management must be committed to the plan to sell the
asset, and the sale should be expected to qualify for
recognition as a completed sale within one year from
the date of classification.
Measurement:
Non-current assets or disposal groups classified as
held for sale are measured at the lower of their carrying
amount and fair value less costs to sell. Depreciation
on such assets ceases from the date they are classified
as held for sale.
Discontinued Operations:
A discontinued operation is a component of the
Company that either has been disposed of or is classified
as held for sale and represents a separate major line of
business or geographical area of operations, is part of a
single coordinated plan to dispose of a separate major
line of business or geographical area of operations, or is
a subsidiary acquired exclusively with a view to resale.
The results of discontinued operations are presented
separately in the Statement of Profit and Loss.
Presentation and Disclosure:
Assets and liabilities classified as held for sale are
presented separately under the current section of the
Balance Sheet. The results of discontinued operations
are presented separately from continuing operations
in the Statement of Profit and Loss, including the
comparative period. Relevant disclosures are made in
accordance with the requirements of Ind AS 105
BB. Recent Accounting Pronouncement:
The Ministry of Corporate Affairs vide notification dated
9 September 2024 and 28 September 2024 notified
the Companies (Indian Accounting Standards) Second
Amendment Rules, 2024 and Companies (Indian
Accounting Standards) Third Amendment Rules, 2024,
respectively, which amended/ notified certain accounting
standards (see below), and are effective for annual
reporting periods beginning on or after 1 April 2024:
• Insurance contracts - Ind AS 117; and
• Lease Liability in Sale and Leaseback -
Amendments to Ind AS 116
These amendments did not have any material impact
on the amounts recognised in prior periods and are
not expected to significantly affect the current or
future periods.
Further MCA has notified amendments to Ind AS 21 -
The Effects of Changes in Foreign Exchange Rates,
with respect to lack of exchangeability and this will be
applicable to the Group for reporting periods beginning
on or after 1 April 2025.
3. SIGNIFICANT ACCOUNTING, JUDGEMENTS
ESTIMATES AND ASSUMPTIONS.
In the application of the Company's accounting policies,
which are described in Note 2, Management is required
to make judgements, estimates and assumptions about
the carrying amounts of assets and liabilities that are
not readily apparent from other sources. The estimates
and associated assumptions are based on historical
experience and other factors that are considered to be
relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimates are
revised if the revision affects only that period or in the
period of the revision and future periods if the revision
affects both current and future periods.
Key sources of estimation uncertainty.
The following are the key assumptions concerning the
future, and other key sources of estimation uncertainty
at the reporting date, that have a significant risk of
causing a material adjustment to the carrying amount
of assets and liabilities within the next financial year:
(i) Cost to Complete.
Management estimates the costs to complete
for each project for the purpose of revenue
recognition and recognition of anticipated losses
on projects, if any. In the process of calculating the
cost to complete, Management conducts regular
and systematic reviews of actual results and future
projections with comparison against budget.
This process requires monitoring controls including
financial and operational controls and identifying
major risks facing the Company and developing
and implementing initiatives to manage those risks.
The Company's Management is confident that the
costs to complete the project are fairly estimated.
(ii) Percentage of Completion.
Management's estimate of the percentage of
completion on each project for the purpose of
revenue recognition is through conducting some
weight analysis to assess the actual quantity of
the work for each activity performed during the
reporting period and estimate any future costs for
comparison against the initial project budget.
This process requires monitoring of financial
and operational controls. Management is of the
opinion that the percentage of completion of the
projects is fairly estimated. As required by Ind AS
115, in applying the percentage of completion on
its long-term projects, the Company is required to
recognise any anticipated losses on it contracts.
(iii) Impairment of financial assets and contract assets.
The Company's Management reviews periodically
items classified as receivables and contract assets
to assess whether a provision for impairment should
be recorded in the statement of profit and loss.
Management estimates the amount and timing
of future cash flows when determining the level of
provisions required. Such estimates are necessarily
based on assumptions about several factors involving
varying degrees of judgement and uncertainty.
The Company reviews its carrying value of
investments annually, or more frequently when
there is indication for impairment. If the recoverable
amount is less than it's carrying amount, the
impairment loss is accounted for.
(iv) Litigations.
From time to time, the Company is subject to legal
proceedings the ultimate outcome of each being
always subject to many uncertainties inherent in
litigation. A provision for litigation is made when it is
considered probable that a payment will be made, and
the amount of the loss can be reasonably estimated.
Significant judgement is made when evaluating,
among other factors, the probability of unfavourable
outcome and the ability to make a reasonable
estimate of the amount of potential loss. Litigation
provisions are reviewed at each Balance Sheet
date and revisions made for the changes in facts
and circumstances. Provision for litigations and
contingent liabilities are disclosed in Note 44 (B).
(v) Defined Benefit plans.
The cost of the defined benefit plans and the
present value of the defined benefit obligation are
based on actuarial valuation using the projected
unit credit method. 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. All
assumptions are reviewed at each Balance Sheet
date and disclosed in Note 36.
(vi) Useful lives of property, plant and equipment and
intangible assets.
The Company has estimated useful life of each
class of assets based on the nature of assets,
the estimated usage of the asset, the operating
condition of the asset, past history of replacement,
anticipated technological changes, etc. The
Company reviews the useful life of property, plant
and equipment and intangible assets as at the end
of each reporting period. This reassessment may
result in change in depreciation and amortisation
expense in future periods.
(vii) Warranty provisions
The Company gives warranties for its products,
undertaking to repair or replace the product that
fail to perform satisfactory during the warranty
period. Provision made at the year-end represents
the amount of expected cost of meeting such
obligations of rectification / replacement which is
based on the historical warranty claim information
as well as recent trends that might suggest that
past cost information may differ from future claims.
Factors that could impact the estimated claim
information include the success of the Company's
productivity and quality initiatives.
For and on behalf of the Board of Directors of
QUALITY POWER ELECTRICAL EQUIPMENTS LIMITED
Thalavaidurai Pandyan Bharanidharan Pandyan Chitra Pandyan
Chairman & Managing Director Joint Managing Director Whole Time Director
DIN: 00439782 DIN: 01298247 DIN: 02602659
Deepak Suryawanshi Rajesh Jayaraman
Company Secretary Chief Financial Officer
PAN: CJKPS2065J PAN: ABHPR6320E
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