1.13 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provision
Provisions are recognised when the company has a present legal or constructive obligation as a result of past events, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount
can be reliably estimated. Provisions are not recognised for future operating losses.
Provisions are measured at the present value of management's best estimate of the expenditure required to settle the
present obligation at the end of the reporting period. The discount rate used to determine the present value is a current pre¬
tax rate. The increase in the provision due to the passage of time is recognised as interest expense.
Contingent Liability
Contingent liability is a possible obligation arising from past events and whose existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or a
present obligation that arises from past events but is not recognized because it is not probable that an outflow of resources
embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured
with sufficient reliability. The Company does not recognize a contingent liability but discloses its existence in the consolidated
financial statements.
Contingent Asset
Contingent asset is not recognised in 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 recognized. Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.
1.14 REVENUE RECOGNITION
The Company derives revenue primarily from manufacture and trading of Ceramic Capacitors both Multilayer and Single
Layer.
The Revenue is recognised upon transfer of control of promised products to customers at the amount of transaction price
(net of variable consideration) that reflects the consideration the Company expects to receive in exchange for those products.
Revenue is measured based on the fair value of consideration specified in the contract with customer and excludes amounts
collected on behalf of third parties.
Sale of Goods
Revenue from sale of goods is recognised when control of the products being sold is transferred to our customers and there
are no longer any unfulfilled obligations. The performance obligations in our contracts are fulfilled at the time of dispatch,
delivery or upon formal customer acceptance depending on customer terms.
Other Revenue
Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable rate
of interest.
Revenue in respect of insurance/other claims etc, is recognized only when it is reasonably certain that the ultimate collection
will be made.
1.15 TAXES ON INCOME
Current Tax:
Tax on income for the current period is determined on the basis on estimated taxable income and tax credits computed in
accordance with the provisions of the relevant tax laws and based on the expected outcome of assessments / appeals.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of profit
and loss.
Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax:
Deferred tax is provided using the balance sheet approach on temporary differences at the reporting date between the tax
bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any
unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available
against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can
be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised
deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that
future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is
realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the
reporting date.
Deferred tax relating to items recognised outside the statement of profit and loss is recognised outside the statement of
profit and loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive
income or directly in equity.
The break-up of the major components of the deferred tax assets and liabilities as at balance sheet date has been arrived at
after setting off deferred tax assets and liabilities where the Company have a legally enforceable right to set-off assets against
liabilities.
1.16 GRATUITY AND OTHER POST - EMPLOYEE BENEFITS
a) Short-term obligations
Short-term employee benefits are measured on an undiscounted basis and expensed as the related service is provided.
A liability is recognised for the amount expected to be paid under short-term cash bonus, if the Company has a present
legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation
can be estimated reliably.
b) Post-employment obligations
The Company operates the following post-employment schemes:
• defined benefit plans such as gratuity; and
• defined contribution plans such as provident fund.
Defined Benefits Plans
The liability or asset recognized in the balance sheet in respect of defined benefit gratuity plans is the present value of
the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit
obligation is calculated annually by actuaries using the projected unit credit method. The present value of the defined
benefit obligation denominated in INR is determined by discounting the estimated future cash outflows by reference
to market yields at the end of the reporting period on government bonds that have terms approximating to the terms
of the related obligation. The net interest cost is calculated by applying the discount rate to the net balance of the
defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the
Statement of Profit and Loss. Remeasurement gains and losses arising from experience adjustments and changes in
actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They
are included in retained earnings in the statement of changes in equity and in the balance sheet. Changes in the present
value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in
Statement of Profit and Loss as past service cost.
Defined contribution plans
The company pays provident fund contributions to publicly administered provident funds as per local regulations. The
company has no further payment obligations once the contributions have been paid. The contributions are accounted
for as defined contribution plans and the contributions are recognised as employee benefit expense when they are due.
Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments
is available.
c) Other long-term employee benefit obligations
The liabilities for leave are not expected to be settled wholly within 12 months after the end of the period in which the
employees render the related service. They are therefore measured as the present value of expected future payments
to be made in respect of services provided by employees up to the end of the reporting period using the projected
unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have
terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and
changes in actuarial assumptions are recognised in statement of profit and loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right
to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is
expected to occur.
1.17 EARNINGS PER SHARE (EPS)
Basic earnings per share Basic earnings per share is calculated by dividing the profit (or loss) attributable to the owners of the
Company by the weighted average number of equity shares outstanding during the year. The weighted average number of
equity shares outstanding during the year is adjusted for bonus issue, bonus element in a rights issue to existing shareholders,
share split and reverse share split (consolidation of shares).
2.00 RECENT ACCOUNTING PRONOUNCEMENTS
Ministry of Corporate Affairs ('MCA') notifies new standards or amendments to the existing standards under the companies
(Indian Accounting standards) Rules, 2015 as amended from time to time. For the year ended March 31, 2026, the MCA
has notified IND AS 1 Presentation of Financial statement relating to classification of liabilities as current or non-current
and non-current liabilities with Covenants, Ind AS 7 Statement of Cash Flows and Ind AS 107 Financial Instruments relating
to disclosure of supplier finance arrangements and Ind AS 12 Income Taxes relating to International tax reform - Pillar Two
Model Rules, applicable to company, w.e.f. April 2025.The company has reviewed the new pronouncement and based on its
evaluation has determined that the new pronouncement is not applicable to the company.
Description of the nature and purpose of each reserve within equity is as follows:
Retained Earnings:
Retained earnings are the profits that the Company has earned till date and is net of amount transferred to other reserves
such as general reserves etc., amount distributed as dividend and adjustments on account of transition to Ind AS.
Capital Redemption Reserve:
The Capital Redemption Reserve is created on redemption of 0.5% 10,00,000 Redeemable Non-Cumulative Preference
Shares of Rs.100/- in the Financial Year 2025-2026 pursuant to Section 69 of the Companies Act, 2013.
Other Comprehensive Income:
This comprises changes in the fair value of Defined Benefit Plans recognised in Other Comprehensive Income (OCI).
During the year, the Company redeemed its entire outstanding 9,81,500 0.5% Non-Cumulative Redeemable Preference
Shares of ^100 each, aggregating to ^981.50 lakhs, at par out of distributable profits in compliance with Section 55 of
the Companies Act, 2013. Accordingly, no preference shares remain outstanding as at March 31, 2026, and the requisite
amount has been transferred to the Capital Redemption Reserve. The redemption was effected pursuant to the extended
redemption period approved by the National Company Law Tribunal vide Order dated November 24, 2023.
c) Defined Benefit Plans:
The Company has a defined benefit gratuity plan in India (funded). The Company's defined benefit gratuity plan is a
final salary plan for India employees, which requires contributions to be made to a separately administered fund. The
gratuity plan is governed by the Code on Social Security, 2020. The gratuity plan provides a lump sum payment to vested
employees at retirement, death, incapacitation or termination of employment, of an amount equivalent to 15 days'
salary for each completed year of service. Vesting occurs upon completion of Five (5) continuous years of service as
governed by the Code on Social Security, 2020. The Present value of the defined benefit obligations and related current
service cost were measured using the Projected Unit Credit Method, with actuarial valuation being carried out at each
Balance Sheet date.The Gratuity Plan is administered by "Gujarat Poly Electronics Limited" and Gujarat Poly Electronics
Limited Trust, that is legally separated from the Company. The company expects to pay Rs. 7.20 lacs /- in contributions
to defined benefit plans in financial year 2026-27.
40 Capital Management
Risk management
The Company's objective in managing capital is to safeguard its ability to continue as a going concern while maintaining an
optimal capital structure and maximising shareholder value. The Company monitors its capital structure based on its net
debt position, which comprises lease liabilities and other borrowings, net of cash and cash equivalents.
As at March 31, 2026, the Company was in a net cash position, with cash and cash equivalents exceeding its outstanding
lease liabilities. Accordingly, the Company continued to maintain a strong liquidity position with no external borrowings
outstanding as at the reporting date. The Company reviews its capital structure periodically and makes adjustments, where
considered appropriate, in light of changes in economic conditions, business requirements and financing needs. Consequent
to such capital structure, the Company is not subject to any externally imposed capital requirements.
The proposed dividend has not been recognised as a liability as at March 31, 2026.
The Board has recommended a dividend of Rs. 0.50 per share (5% of face value of Rs. 10/- each) for F.Y. 2025-26. Dividend
declarations consider factors including profitability, retained earnings, liquidity position and future capital requirements.
The Company's capital management approach ensures compliance with statutory requirements while maintaining sufficient
resources to support ongoing operations and strategic initiatives. Regular reviews are conducted to assess the adequacy
and efficiency of the capital structure in light of changing business needs and market conditions.
42 Financial Instruments :
(i) Methods & assumption used to estimates the fair values
The fair values of the financial assets and liabilities are 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 values:
(a) The carrying amounts of receivables and payables which are short term in nature such as trade receivables, other
bank balances, deposits, loans to employees, trade payables, other financial liabilities and cash and cash equivalents
are considered to be the same as their fair values.
(b) The fair values for long term security deposits given and remaining non current financial assets were calculated based
on cash flows discounted using a current rate at 9%. They are classified as level 3 fair values in the fair value hierarchy
due to the inclusion of unobservable inputs.
43 Financial Risk Management
The Company's financial risk management is an integral part of how to plan and execute its business strategies. The
Company's financial risk management policy is set by the Board of Directors. The details of different types of risk and
management policy to address these risks are listed below:
The Company's activities are exposed to various risks viz. Credit risk, Liquidity risk and Market risk. In order to minimise any
adverse effects on the financial performance of the Company, it uses various instruments and follows polices set up by the
Board of Directors / Management.
(i) Credit risk
Credit risk arises from the possibility that counter party will cause financial loss to the company by failing to discharge
its obligation as agreed.
The Company has specific policies for managing customer credit risk; these policies factor in the customers' financial
position, past experience and other customer specific factors. The Company uses the allowance matrix to measure the
expected credit loss of trade receivables from customers.
Based on the industry practices and business environment in which the Company operates, management considers that
the trade receivables are in default if the payment are more than 12 months past due.
(ii) Liquidity Risk
Liquidity risk is risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities
that are settled by delivering cash or another financial asset. The objective of liquidity risk management is to maintain
sufficient liquidity and ensure that funds are available for use as per requirements. The Company's principal sources of
liquidity are cash and cash equivalents, borrowings and the cash flow that is generated from operations. The Company
has consistently generated sufficient cash flows from its operations and believes that these cash flows along with its
current cash and cash equivalents and funding arrangements are sufficient to meet its financial obligations as and when
they fall due. Accordingly, liquidity risk is perceived to be low.
44.2 There are no Non Current Assets other than in India.
44.3 During the year ended March 31, 2026, revenue from one customer exceeded 10% of the Company's total revenue. Further,
as at March 31, 2026, the outstanding trade receivable from one customer exceeded 10% of the total trade receivables.
45 During the year, the Company reviewed the carrying value of inventories in view of technological changes, commercial
considerations and inventory ageing. Based on the assessment, inventories identified as slow-moving or obsolete were
written down/written off to their net realisable value, wherever necessary, and the resultant loss has been recognised in
the Statement of Profit and Loss.
47 Other Statutory Information
(a) The Company does not hold any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988)
and the rules made thereunder. Hence any proceeding has not been initiated or pending against the company for
holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made
thereunder.
(b) The Company does not have any transactions with companies struck off.
(c) The Company does not have any such transaction which is not recorded in the books of accounts that 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).
(d) The Company has not traded or invested in crypto currency or virtual currency during the financial year.
(e) The company does not have any charges or satisfaction, which is yet to be registered with ROC beyond the statutory
period.
(f) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign
entities (Intermediaries) with the understanding that the Intermediary shall:
- directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of
the company (Ultimate Beneficiaries) or
- provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(g) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with
the understanding (whether recorded in writing or otherwise) that the Company shall:
- 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
- provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
(h) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or
both during the current or previous year.
(i) The Company has no borrowings from banks and financial institutions on the basis of security of current assets.
(j) The Company has not been declared wilful defaulter by any bank or financial institution or government or any
government authority.
(k) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous
financial year.
(l) The Company has complied with the number of layers prescribed under the companies Act 2013
48 Supplementary statutory information required to be given pursuant to Schedule V of Regulation 34(3) and 53(f) of the
SEBI (Listing obligation & Disclosure requirement) Regulations,2015
The Company has complied with the requirements to the extent applicable, which forms part of annual report.
49 Audit Trail Compliance
The Company uses an accounting software for maintaining its books of accounts which has a feature of recording audit trail
(edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the accounting
software SAP B-1. In case of SAP B-1, the audit trail operated throughout the year for all transactions recorded at application
level and such audit trail feature has not been tampered with. The audit trail feature is not enabled for direct changes at
database level. Further the audit trail feature, where enabled, has been preserved by the Company as per the statutory
requirements of record retention
50 Recent Pronouncement
Ministry of Corporate Affairs ('MCA') notifies new standards or amendments to the existing standards under the Companies
(Indian Accounting Standards) Rules, 2015 as amended from time to time. For the year ended March 31, 2026, the MCA
has notified IND AS 1 Presentation of Financial statements relating to classification of liabilities as current or non-current
and non-current liabilities with covenants which are applicable, w.e.f. April 2026. The Company has reviewed the new
pronouncement and based on its evaluation has determined that the new pronouncement is not applicable to the Company.
Note: There were no outstanding balances with related parties as at March 31, 2026, except as disclosed elsewhere in the
financial statements.
1 The preference shares held by the Holding Company were redeemed during the year at par in accordance with Section 55
of the Companies Act, 2013
2 Short term employee benefits does not include the provision made for gratuity & leave benefits , contribution to provident
fund and superannuation fund.
3 As the post-employment benefits related to defined benefit plans is provided on actuarial basis for the company as a
whole, the the amount attributable to Key Management Personnel is not separately ascertainable and therefore not
included above.
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