Rights, preferences and restrictions in respect of equity shares issued by the Company
The equity shareholders are entitled to receive dividend as and when declared, a right to vote in proportion of holding etc. and their rights, preferences and restrictions are governed by / in terms of their issue and the provisions of the Companies Act, 2013.
A. General reserve is created from time to time by transferring profits from retained earnings and can be utilised for the purposes such as payment of dividends.
B. Securities Premium Reserve represents premium received on equity shares issued which can be utilised only in accordance with the provisions of the Companies Act , 2013 for specified purposes.
C. Retained Earnings is generally available for distribution of dividend subject to the provisions of the Companies Act, 2013.
13(b) The quarterly returns/statements of current assets as revised filed by the Company with banks/financial institutions are in agreement with the books of accounts.
13(c) The Company has applied the monies raised by way of term loans for the purposes for which they were obtained. 13(d) The Company has not utilised the funds raised on short term basis for long term purposes.
13(e) The Company has not been declared wilful defaulter by any bank or financial institution or other lender.
19(i) The Company has not entered into any supplier finance arrangements within the scope of paragraphs 44JJ and 44JK of Ind AS 107. Certain suppliers may independently obtain bill discounting facilities from banks, and the Company is not a party to such arrangements. Accordingly, no separate disclosure in respect of supplier finance arrangements is required.
31.1 Impact of Labour Codes
On November 21, 2025, the Government of India notified provisions of 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, ("Labour Codes") which consolidate twenty-nine existing labour laws into a unified framework governing employee benefits during employment and post-employment. The Labour Codes, amongst other things introduces changes, including a uniform definition of wages and enhanced benefits relating to leave. The Company has assessed the financial implications of these changes which has resulted in increase in gratuity liability arising out of past service cost by Rs. 115.11 lakhs and increase in leave liability by Rs.22.10 lakhs. Considering the impact arising out of an enactment of the new legislation is an event of non-recurring nature, the Company has presented this incremental amount as "Impact of Labour Codes" under ""Exceptional Item"" in the Statement of Profit and Loss for the year ended March 31, 2026. The Company continues to monitor the developments pertaining to Labour Codes and will evaluate impact if any on the measurement of the employee benefits liability.
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33 CONTINGENT LIABILITY
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Particulars
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March 31, 2026
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March 31, 2025
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Rs in lakhs
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Rs in lakhs
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Claims against the Company not acknowledged as debts
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(a) Bank Guarantees
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15.85
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15.85
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(b) Income Tax matters under appeal*
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21.10
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21.10
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(c) Others
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17.15
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18.24
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* Future cash outflows in respect of the above are determinable only on receipt of judgement/decisions pending with various
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forums/authorities.
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34
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Particulars
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March 31, 2026
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March 31, 2025
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Rs in lakhs
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Rs in lakhs
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Commitments
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(a) Capital commitments (net of advances) not provided for
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220.01
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277.50
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(b) Outstanding Letters of Credit
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119.86
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33.61
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The outflow in respect of the above is not practicable to ascertain in the view of uncertainity involved.
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Deferred tax for the year ended 31 March 2026 has been recognized at an effective tax rate of 25.63%, computed in accordance with the rates prescribed under the provisions of the Income Tax Act, 2025 (applicable from 01.04.2026), including the base tax rate, applicable surcharge, and cess.
Deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the carrying values of assets and liabilities and their respective tax bases, and unutilized depreciation carry-forwards and tax credits. Deferred tax assets are recognized to the extent that it is probable that future taxable income will be available against which the deductible temporary differences, depreciation carry-forwards and unused tax credits could be utilized.
Defined Benefit Plan Gratuity :
The Company operates gratuity plan through approved gratuity fund with Life Insurance Corporation of India. Every employee is entitled to the benefit in accordance with The Payment of Gratuity Act, 1972, as applicable from time to time, except in the case of Managing Director where there is no maximum limit. The present value of obligation is determined based on actuarial valuation.
Leave Salary Encashment :
Eligible employees can carry forward and encash leave on superannuation or death or permanent disablement subject to a maximum accumulation of 60 days except in the case of Managing Director where there is no limit to maximum accumulation. The present value of obligation is determined based on actuarial valuation.
The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.
These plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.
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Investment risk
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The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to the market yields on government bonds denominated in Indian Rupees. If the actual return on plan asset is below this rate, it will create a plan deficit.
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Interest risk
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A decrease in the bond interest rate will increase the plan liability. However, this will be partially offset by an increase in the return on the plan's debt investments.
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Longevity risk
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The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan's liability.
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Salary risk
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The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.
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The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from previous year.
The weighted average duration of the benefit obligation (gratuity) as at March 31, 2026 is 9.503 years (as at March 31, 2025: 9.869 years).
42 Financial Instruments
Capital management
The Company manages its capital to ensure that entities in the Company will be able to continue as going concerns while maximising the return to stakeholders through the optimisation of the debt and equity balance.
The Company determines the amount of capital required on the basis of annual operating plans and long-term product and other strategic investment plans. The funding requirements are met through equity, non-convertible debt securities, and other long-term/short-term borrowings.
The capital structure of the Company consists of net debt (borrowings as detailed in notes 13 and 17, and offset by cash and bank balances) and total equity of the Company. The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
Financial risk management objectives
The treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.
Market risk
Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the price of a financial instrument. The Company's activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates.
Movement in the functional currencies of the various operations of the Company against major foreign currencies may impact the Company's revenues from its operations. Any weakening of the functional currency may impact the Company's cost of imports and cost of borrowings and consequently may increase the cost of financing the Company's capital expenditures.
The following table details the Company's sensitivity movement in the foreign currencies. The foreign exchange rate sensitivity is calculated for each currency by aggregation of the net foreign exchange rate exposure of a currency and a simultaneous parallel foreign exchange rates shift in the foreign exchange rates of each currency by 2%. 2% represents management's assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 2% change in foreign currency rates.
The sensitivity analyses below have been determined based on the exposure to interest rates for non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 25 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 25 basis points higher/lower and all other variables were held constant, the Company's profit for the year ended March 31, 2026 would decrease/increase by Rs.29.96 lakhs (March 31, 2025: decrease/increase by Rs.24.81 lakhs). This is mainly attributable to the Company's exposure to interest rates on its variable rate borrowings.
Equity price risk
Equity price risk is related to the change in market reference price of the investments in equity securities. Fair and nominal value of shares are same since entire nominal value will be payable on sale back of shares as per the agreement and the shares are not held for trading purpose.
Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company's exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties.
Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable.
The Company does not have significant credit risk exposure
The company sells predominantly to local and export customers which are on credit basis. The average credit period is 30 days to 180 days.
The Company did not have material credit risk exposure in the past 3 years and there were no material bad debt during the mentioned period but the Company makes an allowance for doubtful debts on a case to case basis.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure is the total of the carrying amount of balances with banks, short term deposits with banks, trade receivables, margin money and other financial assets excluding equity investments.
Liquidity risk management
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.
The Company has obtained fund and non-fund based working capital lines from various banks. The Company is also working with banks for obtaining separate facility for financing of Dies. Promoters will support by way of fund infusion on need basis.
Fair value of financial assets and financial liabilities that are not measured at fair value (but fair value disclosures are required):
The Management considers that the carrying amounts of financial assets and financial liabilities recognised in the financial statements approximate their fair values.
43. Segment Information
"The Managing Director of the Company has been identified as being the chief operating decision maker. Based on the internal reporting to the Chief operating decision maker, the Company has identified that the Company has only one segment which is manufacture and sale of Auto Component - Piston Rings, Differential Gears, Pole Wheel and other Transmission Components and accordingly there are no other reportable segments. The Company is domiciled in India. Information about entity wide disclosures as mandated under Ind AS 108 are as below:
Lease terms are negotiated on an individual basis and contain a range of different terms and conditions. The lease agreements do not impose any covenants other than that the company cannot provide the leased asset as security for its borrowings etc, nor can it be subleased without the permission of the lessor.
The lease payment are discounted using the company's incremental borrowing rate(8.75% and 9.50%) being the rate that the company would have to pay to borrow funds necessary to obtain an asset of similar value to ROU asset in a similar economic environment with similar terms, security and conditions.
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