n. Provisions, contingent liabilities and contingent assets
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past events
and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation.
If the effect of the 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. When discounting is used, the increase in the provision due to the passage of
time is recognised as a finance cost.
Contingent liability is disclosed in the case of:
• a present obligation arising from past events, when it is not probable that an outflow of resources will be required to
settle the obligation;
• a present obligation arising from past events, when no reliable estimate is possible
Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date.
Earnings per share
Basic earnings per equity share is computed by dividing the net profit after tax attributable to the equity shareholders by
the weighted average number of equity shares outstanding during the year. Diluted earnings per equity share is computed
by dividing adjusted net profit after tax by the aggregate of weighted average number of equity shares and dilutive potential
equity shares during the year.
. Recent accounting pronouncements
Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as issued from time to time. During the year ended March 31,2025, MCA has notified
Ind AS 117 - Insurance Contracts and amendments to Ind AS 116 - Leases, relating to sell and leaseback transactions,
applicable from April 1,2024. The Company has assessed that there is no significant impact on its financial statements.
On May 9, 2025, MCA notifies the amendments to IND AS 21- Effects of changes in Foreign Exchange Rates. These
amendments aim to provide clearer guidance on assessing currency exchangeability and estimating exchanges rates
when currencies are not readily exchangeable. The amendments are effective for annual periods beginning on or after April
1, 2025. The Company is currently assessing the probable impact of these amendments in its financial statements.
. Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand, cheques on hand and short-term
deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as
defined above.
. Fair value measurement
The Company measures financial instruments such as derivatives and certain investments, at fair value at each balance
sheet date.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the
fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement
as a whole:
• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable
• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable
For assets and liabilities that are recognized in the balance sheet on a recurring basis, the Company determines whether
transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that
is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity,
a) Financial assets
Classification
The Company classifies financial assets as subsequently measured at amortized cost, fair value through other
comprehensive income or fair value through profit or loss on the basis of its business model for managing the financial
assets and the contractual cash flows characteristics of the financial asset.
Initial recognition and measurement
All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value
through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
Subsequent measurement
For purposes of subsequent measurement financial assets are classified in below categories:
• Financial assets carried at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective
is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give
rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount
outstanding.
• Financial assets at fair value through other comprehensive income
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a
business model whose objective is achieved by both collecting contractual cash flows and selling financial assets
and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding. The Company has made an irrevocable election
for its investments which are classified as equity instruments to present the subsequent changes in fair value in
other comprehensive income based on its business model.
• Financial assets at fair value through profit or loss
A financial asset which is not classified in any of the above categories are subsequently fair valued through profit
or loss.
Derecognition
A financial asset is primarily derecognized when the rights to receive cash flows from the asset have expired or the
Company has transferred its rights to receive cash flows from the asset.
Investment in subsidiaries, joint ventures and associates
The Company has accounted for its investment in subsidiaries, joint ventures and associates at cost less impairment
loss, if any.
Impairment of financial assets
The Company assesses impairment based on expected credit losses (ECL) model for measurement and recognition of
impairment loss, the calculation of which is based on historical data, on the financial assets that are trade receivables
or contract revenue receivables and all lease receivables.
The Company follows ‘simplified approach’ for recognition of impairment loss allowance on trade receivables or
contract revenue receivables and all lease receivables resulting from transactions within the scope of Ind AS 116.
The application of simplified approach does not require the Company to track changes in credit risk. Rather, it
recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines that
whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased
significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly,
lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer
a significant increase in credit risk since initial recognition, then the entity reverts to recognizing impairment loss
allowance based on 12-month ECL.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a
financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are
possible within 12 months after the reporting date.
ECL is the difference between all contractual cash flows that are due to the group in accordance with the contract
and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. When
estimating the cash flows, an entity is required to consider:
• All contractual terms of the financial instrument (including prepayment, extension, call and similar options) over
the expected life of the financial instrument.
• Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms
As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on portfolio
of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life
of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed
default rates are updated and changes in the forward-looking estimates are analysed. On that basis, the Company
estimates the following provision matrix at the reporting date:
Less than 6 months 6 months -1 year 1-2 years 2-3 years More than 3 years
Default rate 0.05% 1.00% 50.00% 75.00% 100.00%
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the
statement of profit and loss (P&L). This amount is reflected under the head ‘other expenses’ in the P&L.
b) Financial liabilities
Classification
The Company classifies all financial liabilities as subsequently measured at amortized cost, except for financial
liabilities at fair value through profit or loss. Such liabilities, including derivatives that are liabilities, shall be subsequently
measured at fair value.
Initial recognition and measurement
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of
directly attributable transaction costs. The Company’s financial liabilities include trade and other payables, loans and
borrowings including bank overdrafts, and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
• Financial liabilities at amortised cost
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost
using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as
well as through the EIR amortization process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that
are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and
loss.
• Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair value through profit or loss. financial liabilities are classified
as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes
derivative financial instruments entered into by the Company that are not designated as hedging instruments in
hedge relationships as defined by Ind AS 109. Separated embedded derivatives are also classified as held for
trading unless they are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognized in the statement of profit and loss.
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When
an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms
of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition
of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is
recognized in the statement of profit and loss.
c) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a
currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to
realize the assets and settle the liabilities simultaneously.
d) Derivative financial instruments
The Company uses derivative financial instruments, such as forward currency contracts, interest rate swaps, full
currency swaps and forward commodity contracts, to hedge its foreign currency risks, interest rate risks and commodity
price risks, respectively. Such derivative financial instruments are initially recognized at fair value on the date on which
a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial
assets when the fair value is positive and as financial liabilities when the fair value is negative.
Any gains or losses arising from changes in the fair value of derivatives are taken directly to statement of profit and
loss.
e) Government grants
Government grants are recognized where there is reasonable assurance that the grant will be received and all
attached conditions will be complied with.
When the grant relates to an asset, the cost of the asset is shown at gross value and grant thereon is treated as
capital grant which is recognized as income in statement of profit and loss over the period and in proportion in which
depreciation is charged.
When the grant relates to an expense item, it is recognized as income on a systematic basis over the periods that the
related costs, for which it is intended to compensate, are expensed.
When the Company receives grants of non-monetary assets, the asset and the grant are recorded at fair value
amounts and released to profit or loss over the expected useful life in a pattern of consumption of the benefit of the
underlying asset.
When loans or similar assistance are provided by governments or related institutions, with an interest rate below the
current applicable market rate, the effect of this favourable interest is regarded as a government grant. The loan or
assistance is initially recognized and measured at fair value and the government grant is measured as the difference
between the initial carrying value of the loan and the proceeds received. The loan is subsequently measured as per
the accounting policy applicable to financial liabilities.
f) Unless specifically stated to be otherwise, these policies are consistently followed.
2.3 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, and the accompanying disclosures, and the
disclosure of contingent liabilities at the date of the financial statements. Estimates and assumptions are continuously evaluated
and are based on management’s experience and other factors, including expectations of future events that are believed to be
reasonable under the circumstances. Uncertainty about these assumptions and estimates could result in outcomes that require
a material adjustment to the carrying amount of assets or liabilities affected in future periods.
In particular, the Company has identified the following areas where significant judgements, estimates and assumptions are
required. Further information on each of these areas and how they impact the various accounting policies are described below
and also in the relevant notes to the financial statements. Changes in estimates are accounted for prospectively.
In the process of applying the Company’s accounting policies, management has made the following judgements, which have
the most significant effect on the amounts recognized in the financial statements:
Contingencies
Contingent liabilities may arise from the ordinary course of business in relation to claims against the Company, including legal,
contractor, land access and other claims. By their nature, contingencies will be resolved only when one or more uncertain future
events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the
exercise of significant judgments and the use of estimates regarding the outcome of future events.
Estimates and assumptions
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 amounts of assets and liabilities within the next financial
year, are described below. The Company based its assumptions and estimates on parameters available when the financial
statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to
market change or circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions
when they occur.
Impairment of non-financial assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication
exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its value in use. It is
determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from
other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is
considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair
value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an
appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly
traded subsidiaries or other available fair value indicators.
Defined benefit plans
The cost of the defined benefit plan and other post-employment benefits and the present value of such 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, mortality rates and future pension
increases. 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 at each reporting date.
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 valuation techniques including the DCF model. 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. Judgements 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.
Impairment of financial assets
The impairment provisions for financial assets are based on assumptions about risk of default and expected loss rates. The
Company uses judgments in making these assumptions and selecting the inputs to the impairment calculation, based on
Company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
i m a lu i c aim pui puoc ui icscivcs
a) Securities premium
The amount received in excess of face value of the equity shares is recognised in securities premium.
b) Actuarial gains / losses on defined benefit employee obligations
The amount of actuarial gains / losses recognised on post employment defined benefit employee obligations till date. Actuarial gains / losses
are differences between any changes in the liabilities over the year due to changes in actuarial assumptions or experience adjustments within
the plans which are recognised in ‘other comprehensive income’ and subsequently not reclassified to the statement of profit and loss.
c) Employee Stock Options reserve
The Company has share option scheme under which options to subscribe for the Company’s shares have been granted to certain executives
and senior employees.
The employee stock options reserve is used to recognise the value of equity-settled share-based payments provided to employees, including
key management personnel, as part of their remuneration. Refer Note 36 for further details of these plans.
d) General reserve
he general reserve is free reserve which is created from time to time on transfer of profits from retained earnings. General reserve is created
by transfer from one component of equity to another and is not an item of other comprehensive income, items included in general reserve
will not be reclassified subsequently to profit or loss.
e) Retained earnings
Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions
paid to investors.
36. Employee Share-based Payments
Refer Note k for accounting policy on Employee Share-based Payments
The Company has formulated employee share-based payment schemes with the objective to reward the employees for their
association and performance, to motivate them to contribute to the growth and profitability of the Company, to create a variable pay
structure for the different employees, incentivize them in line with Company’s performance, to retain and motivate senior and critical
human resources, to promote loyalty to the Company and to achieve sustained growth and create shareholder’s value by aligning the
interests of the employees with the long-term interests of the Company.
The shareholders of the Company by way of special resolution dated 16th September, 2022 approved the Plan authorizing the
Committee to Grant not exceeding 7,00,000 Options to the permanent employees of the company, its subsidiaries, joint venture
and directors (excluding promoter directors and independent directors), collectively eligible employees, in one or more tranches,
from time to time, which in aggregate shall be exercisable into not more than 7,00,000 Shares of face value of ' 10 each fully paid
up (which is 5% of the paid up capital of the Company as on date), with each such Option conferring a right upon the Employees to
apply for one Share in the Company in accordance with the terms and conditions as may be decided under the Plan.
The maximum number of Options that may be granted per Employee and in aggregate shall be decided by the Committee depending
upon the designation and the appraisal/ assessment process. However, the Grant of Options to identified Employees, shall not, at
any time exceed the total Option pool size approved by the shareholders for ESOP 2022.
This Employee Stock Option Plan is called ‘PPAP Employee Stock Option Plan 2022’ (“ESOP 2022”/ “Plan”) : The ESOP 2022 is
established with effect from date of shareholders’ approval i.e. 16th September, 2022 on which the shareholders of the Company have
approved it and shall continue to be in force until (i) its termination by the Board/ Committee as per provisions of Applicable Laws, or (ii)
the date on which all of the Options available for issuance under the ESOP 2022 have been issued and exercised, whichever is earlier.
The fair value at grant date of stock options granted during the year ended 31/03/2025 was ' 173.91 (31st March, 2024: ' 234.45). The
fair valuation has been carried out by an independent valuer by applying Black and Scholes Model. The inputs to the model include
the exercise price, the term of option, the share price at grant date and the expected volatility, expected dividends and the risk free
rate of interest for terms of options.
The details of options granted, the key assumptions for Fair Value on the date of grant are as under:
(i) A demand of ' 41.37 lakhs has been raised for the assessment year 2017-18 for disallowance of 25% of royalty expense.
The company has filed an appeal before Income Tax Appellate Tribunal , Delhi Bench “F”, New Delhi against the order of
CIT(Appeals) for disallowance of the royalty amount. The Hon’ble Income Tax Appellate Tribunal , Delhi Bench F, New Delhi has
deleted the disallowance vide its order dated 08/10/2024.
(ii) Demand of excise duty of ' 1.06 lakhs along with penalty of ' 1.06 lakhs was imposed on the Company by Additional Commissioner,
Central Excise, Delhi, for cenvat credit taken on payment of duty through DEPB license, under the Central Excise Act, 1944. The
Company had filed an appeal against the aforesaid order with Commissioner of Central Excise, Okhla. The Commissioner of central
excise has rejected the appeal. Thereafter, the Company has filed the appeal with the Central Excise & Service Tax Appellate Tribunal
(CESTAT) and the appeal is pending.
(iii) Demand of excise duty of ' 35.36 lakhs along with penalty of ' 35.36 lakhs was imposed on the Company by Additional Commissioner,
Central Excise, Delhi, for cenvat credit taken on payment of duty through DEPB license, under the Central Excise Act, 1944 and
was outstanding as on 31.03.2016.The Company had filed the appeal with the Central Excise & Service Tax Appellate Tribunal
(CESTAT) and CESTAT has decided the case in favour of Company and set aside the demand. The Company approached the
Delhi High Court against the order of CESTAT and the High Court has remanded the case back to CESTAT for hearing it again. The
matter is pending in CESTAT, Delhi.
(iv) Demand of ' 5.97 Lakh plus interest @ 18% p.a. and penalty of ' 0.74 lakhs was issued by Central GST, Bhiwadi, Rajasthan
for availment of excess ITC for FY 2018-19. The department has disallowed the ITC on account of non-filing of GSTR- 3B by
suppliers. The company has disputed the demand and filed an appeal with The Joint/ Additional Commissioner (Appeals),
CGST, Jaipur. The basic demand of ?5.97 lakh has been deposited on 24.03.2025 under Amnesty Scheme and the basic liability
has been accordingly adjusted with demand. On payment of demand under amnesty scheme, the penalty and interest are to
be waived by the department. We will file the necessary form to avail the waiver of interest and penalty imposed by the GST
Authority within time limit of 30th June, 2025.
(v) Demand of ' 33.66 Lakh against penalty on short paid GST was issued by Central GST, Bhiwadi, Rajasthan related to FY 2017-18.
The company had disputed the demand and filed an appeal with The Joint/ Additional Commissioner (Appeals), CGST, Jaipur. The
Appeal has been decided in favour of the company and the entire demand has been dropped.
(vi) Demand of ' 1.60 Lakh along with interest of ' 1.60 lakhs and penalty of ' 0.20 lakh was imposed on the Company by SGST,
Delhi for incorrect admissibility of ITC of tax paid or deemed to been paid related to FY 2017-18. The company has disputed the
demand and filed an appeal with Appellate Authority/ Spl. Commissioner SGST, Department of Trade and Taxes, New Delhi.
(vii) Demand of ' 25.12 lakhs along with interest of ' 24.40 lakhs and penalty of ' 2.51 lakh was imposed on the Company by SGST,
Gujarat for availment of excess ITC for FY 2018-19 on 23rd April, 2024. The company had disputed the demand and filed the appeal
with first appellate authority, Ahmedabad within the limitation period of 3 months from the date of demand order passed on 19th July
2024.
(viii) Demand of ' 6.14 lakhs along with applicable interest and an equivalent amount of penalty was imposed on the Company by the
Central GST Authorities, Rajasthan, vide Order No. ZD081224065470K dated 23.12.2024. The demand pertains to the alleged
wrongful availment of ITC for the F.Y. 2019-20.The Company has disputed the demand and filed an appeal before the First
Appellate Authority, Jaipur, Rajasthan, on 30th December 2024.
(ix) Demand of ' 100.12 lakhs along with interest ' 84.23 lakhs and penalty '10.21 lakhs was imposed by CGST,Noida vide Order
No.ZD090225380630F dated 27.02.2025 for alleged incorrect admissibility of ITC/ short payment of tax on outward supplies for
FY 2020-21. The Company has disputed the demand and filed an appeal before the Commissioner of CGST (Appeals), Noida
on 15.05.2025.
41. Segment information
According to Ind AS 108, identification of operating segments is based on Chief Operating Decision Maker (CODM) approach for
making decisions about allocating resources to the segment and assessing its performance. Based on the consideration of dominant
sources and nature of risk & returns, the company is considered an automotive components manufacturer. Most of the activities are
revolving around this business and accordingly has only one reportable segment. The geographical location of its main operations
and the internal organization / reporting and management structure supports such treatment.
42. Dues to micro and small enterprises
The dues to micro and small enterprises as required under the Micro, Small and Medium Enterprises Development Act, 2006
(MSMED Act, 2006), to the extent information available with the Company is given below:
‘Investment value excludes investment in joint venture of ' 4,853 lakhs (31st March, 2024: ' 4,853 lakhs) and investment in
wholly owned subsidiary companies of ' 1429.92 lakhs (31st March, 2024'1,429.92 lakhs) which are shown at cost in balance
sheet as per Ind AS 27 ‘ Separate Financial Statements’.
i) The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged
in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and
assumptions were used to estimate the fair value.
ii) The fair values of the Company’s interest-bearing borrowings are determined by using effective interest rate (EIR) method
using discount rate that reflects the issuer’s borrowing rate as at the end of the reporting period. The own non-performance
risk as at 31st March, 2025 was assessed to be insignificant.
iii) Long-term receivables / payables are evaluated by the Company based on parameters such as interest rates, risk factors,
individual creditworthiness of the counterparty and the risk characteristics of the financed project. Based on this evaluation,
allowances are taken into account for the expected credit losses of these receivables.
iv) The fair value of security deposit has been estimated using DCF model which consider certain assumptions viz. forecast
cash flows, discount rate, credit risk and volatility.
v) The fair values of the investment in mutual fund has been determined based on net assets value (NAV) available in open
market.
vi) The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date.
vii) Cost of unquoted preference shares has been considered as an appropriate estimate of fair value because of a wide
range of possible fair value measurements and cost represents the best estimate of fair value within that range. These
investments in preference shares are not held for trading. Instead, they are held for medium or long-term strategic purpose.
(ii) Fair value hierarchy
All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy, described
as follows, based on the lowest level input that is significant to the fair value measurements as a whole.
Level 1: The fair value of financial instruments traded in active markets.This includes listed equity instruments, traded bonds
and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock
exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the
counter derivatives) is determined using valuation techniques which maximise 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: valuation techniques for which the lowest level input which has a significant effect on fair value measurement is not
based on observable market data.
There have been no transfers between Level 1 and Level 2 during the financial year 2023-24 and 2024-25.
The following table provides the fair value measurement hierarchy of the Company’s assets and liabilities, other than those
whose fair values are close approximations of their carrying values.
44. Financial risk management objectives and policies
The Company’s principal financial liabilities, comprise borrowings, trade payables, and creditors for expenses. The Company’s
principal financial assets include investments, long term deposits, trade receivables, cash and short-term deposits / loan that derive
directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management
of these risks. The Company’s senior management is supported by the Board of Directors that advises on financial risks and the
appropriate financial risk governance framework for the Company. The Board provides assurance to the Company’s management
that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified,
measured and managed in accordance with the Company’s policies and risk objectives. The management reviews and agrees
policies for managing each of these risks, which are summarised below.
i. Market risk
Market risk is the risk that the fair value of 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, such as equity price risk
and commodity risk. Financial instruments affected by market risk include, deposits and FVTPL investments.
The sensitivity analysis of the above mentioned risk in the following sections relate to the position as at 31st March, 2025 and
31st March, 2024.
The analyses exclude the impact of movements in market variables on the carrying values of gratuity and other post-retirement
obligations; provisions; and the non-financial assets and liabilities.
The following assumptions have been made in calculating the sensitivity analyses:
- The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is
based on the financial assets and financial liabilities held at 31st March, 2025 and 31st March, 2024.
A. Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the
Company’s debt obligations with floating interest rates.
ii. Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading
to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its
financing activities, including deposits with banks and financial institutions.
Credit risk from investments with banks and other financial institutions is managed by the treasury functions in accordance with the
management policies. Investments of surplus funds are only made with approved counterparties who meet the appropriate rating and
/or other criteria, and are only made within approved limits. The management continually re-assess the Company’s policy and update
as required. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty failure.
The maximum credit risk exposure relating to financial assets is represented by the carrying value as at the balance sheet date.
A. Trade receivables
Customer credit risk is managed by each business unit subject to the Company’s established policy, procedures and
control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit
review and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are
regularly monitored.
At the year end the Company does not have any significant concentrations of bad debt risk other than disclosed in Note 12.
An impairment analysis is performed at each reporting date on an individual basis for major clients. The calculation is
based on historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class
of financial assets disclosed in Note 43. The Company does not hold collateral as security. The Company evaluates the
concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and
operate in largely independent markets.
B. Financial instruments and cash deposits
Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in
accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties.
60. Additional disclosure / Regulatory Information as required by Notification no. GSR 207(E) dated 24.03.2021 which are not
covered in any of the notes above
(i) No proceedings have been initiated or pending against the company for holding any benami property under benami property
under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.
(ii) Reconciliation of quarterly statement of current assets filed with banks or financial statements
There are no material variations between the quarterly statement of current assets filed during the year with the banks and the
books of accounts.
(iii) Wilful Defaulter
No bank has declared the company as “willful defaulter”.
(iv) Registration of charges or satisfaction with Registrar of Companies:
All applicable cases where registration of charges or satisfaction is required with Registrar of Companies have been done. No
registration or satisfaction is pending at end of financial year 2024-2025.
(v) Scheme of arrangements:
No scheme of arrangements has been approved by the competent authority in terms of Section 230 to 237 of the Companies
Act, 2013.
(vi) Utilisation of Borrowed funds and share premium:
59. Critical judgements, estimates and assumptions
1. Impairment of property, plant and equipment
The Company assesses the carrying amount of property, plant and equipment to determine whether there is any indication that
those assets have suffered an impairment loss. Where the carrying amount exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount. An impairment loss (if any) is recognised in the statement of profit and loss.
While assessing the recoverable amount, the Company used the discounted cash flow approach including various significant
estimates and assumptions such as forecast of future revenue, operating margins, growth rate and selection of the discount rates.
2. Loss Allowance on trade receivables
An impairment analysis of trade receivables is performed at each reporting period based on the Company’s history of collections,
customer’s creditworthiness, existing market conditions as well as forward looking estimates. Basis this assessment, the allowance
for doubtful trade receivables as at March 31,2025 is considered adequate.
(vii) 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.
(viii) Details of Crypto Currency or Virtual Currency
The Company does not deal in Crypto Currency. Therefore further disclosures are not given.
In terms of our report of even date annexed For and on behalf of the Board
For T R Chadha & Co. LLP PPAP Automotive Limited
Chartered Accountants
FRN No. 006711N/N500028
Neena Goel Ajay Kumar Jain Abhishek Jain
Partner Chairman & Managing Director CEO & Managing Director
Membership No: 057986 DIN: 00148839 DIN: 00137651
Sachin Jain Pankhuri Agarwal
Chief Financial Officer Company Secretary
Place: Noida Place: Noida
Date: 16th May, 2025 Date: 16th May, 2025
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