2.16 Provisions
A provision is recognised when the Company has a
present obligation (legal or constructive) as a result of
past event, 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.
a) Warranty Provisions
Provision for assurance type warranty-
related costs are recognised when the
product is sold or service is provided to
customer. Initial recognition is based
on historical experience. The Company
periodically reviews the adequacy of
product warranties and adjust warranty
percentage and warranty provisions
for actual experience, if necessary. The
timing of outflow is expected to be with in
one to five years.
b) Decommissioning Liability
Decommissioning costs are provided at
the present value of expected costs to
settle the obligation using estimated cash
flows and are recognised as part of the
cost of the particular asset.
c) Contingent Liabilities
A contingent liability is a possible
obligation that arises from past events
whose existence will be confirmed by the
occurrence or non-occurrence of one
or more uncertain future events beyond
the control of the Company or a present
obligation that is not recognised because it
is not probable that an outflow of resources
will be required to settle the obligation. A
contingent liability also arises in extremely
rare cases, where there is a liability that
cannot be recognised because it cannot
be measured reliably. The Company
does not recognize a contingent liability
but discloses its existence in the financial
statements unless the probability of
outflow of resources is remote. Provisions,
contingent liabilities, contingent assets
and commitments are reviewed at each
Balance Sheet date.
2.17 Retirement and other employee benefits
a) Defined benefit Plan
The liability or asset recognised 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 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 recognised 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 recognised
immediately in profit or loss as past service cost.
b) Defined Contribution Plan
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) Short-term Obligations
Liabilities for wages, salaries and bonus,
including non-monetary benefits that are
expected to be settled wholly within 3 months
after the end of the period in which the
employees render the related service are
recognised in respect of employees' services
up to the end of the reporting period and are
measured at the amounts expected to be paid
when the liabilities are settled. The liabilities
are presented as current employee benefit
obligations in the balance sheet.
d) Post-Employment Obligations
The Company operates the following post¬
employment schemes:
- defined benefit plans for gratuity, and
- defined contribution plans for
provident fund.
2.18 Investment in Subsidiaries
The investment in subsidiaries, associate and Joint
venture are carried at cost as per Ind AS 27.
2.19 Segment Reporting
Operating segments are reported in a manner
consistent with the internal reporting provided
to the management. The Management monitors
the operating results of all strategic business units
separately for the purpose of making decisions about
resource allocation and performance assessment.
Segment performance is evaluated based on profit
and loss and is measured consistently with profit
and loss in the financial statements.
2.20 Cash and cash equivalent
Cash and cash equivalents in the Balance Sheet
comprise cash at banks and on hand and shortterm
deposits with an original maturity of three months or
less, that are readily convertible to a known amount
of cash and which are subject to insignificant risk of
changes in value.
2.21 Cash flow statement
Cash flows are reported using the indirect method,
whereby profit for the period is adjusted for the
effects of transactions of a non-cash nature, any
deferrals or accruals of past or future operating
cash receipts or payments and item of income or
expenses associated with investing or financing cash
flows. The cash flows from operating, investing and
financing activities of the Company are segregated.
2.22 Finance costs
Borrowing costs are recognised in the statement of
profit and loss using the effective interest method.
The associated cash flows are classified as financing
activities in the statement of cash flows.
2.23 Rounding of amounts
All amounts disclosed in the financial statements
and notes have been rounded off to the nearest
INR as per the requirement of Schedule III, unless
otherwise stated.
2.24 Earning Per share
A) Basic EPS
Basic earnings per share is calculated by
dividing the net profit or loss for the period
attributable to equity shareholders of the
Company (after deducting preference
dividends and attributable taxes) by the
weighted average number of equity shares
outstanding during the period.
B) Diluted EPS
For the purpose of calculating diluted earnings
per share, the net profit or loss for the period
attributable to equity shareholders and
the weighted average number of shares
outstanding during the period are adjusted for
the effects of all dilutive potential equity shares.
2.25 Approval of Financial Statements
The financial statements were approved for issue by
the board of directors on May 6, 2025.
Note:
During the year the Board of the Directors of the company has recommend the payment of final dividend of Re
0.05 per equity shares of face value of Rs 1 each , on 3rd June 2024. The Dividend was paid to those members whose
name was appears in the register of members as on Record date 20th September 2024. Such final dividend was
paid out of General Reserve.
Proposed Dividend
After Reporting Date, the Board Directors of Company has recommended a final dividend of Rs 0.05 per equity
share for the financial year 2024-2025 (Rs 0.05 per share for the financial year 2023-2024)
The final dividend proposed by the Directors are subject to approval at the annual general meeting and has not
been accounted as liability in these standalone financial Statements. The same will be recognised as a liability
and deducted from shareholder's equity in the period in which the final dividends are approved by the equity
shareholders in the general meeting.
Secured borrowings and assets pledged as security
1) ICICI Bank had sanctioned Term loan of Rs. 600.00 Lacs on 01.12.2022, 360.50 Lacs on 13.04.2023, 185.30 Lacs on
26.04.2023, 154.20 Lacs on 14.06.2023 & 300 Lacs on 30.11.2023. Out of above Rs 600 Lacs against Property and 1000
Lacs towards Machineries. The said loan is repayable in upto 84 equal monthly installments.Outstanding balance
as on 31.03.2025 was Rs. 1136.63 Lacs (Previous year 1363.25 Lacs) , Payable within one year Rs 227.29 Lacs (Previous
year 227.29 Lacs) .
2) Punjab National Bank had Disbursed term loan of Rs. 325 Lacs on 20.05.2024 toward Machineries. The loan
is repayable in 52 installments. Oustanding Balance as on 31.03.2025 Was Rs 260.56 Lacs ,Payable within one
year Rs 75 Lakhs
3) Punjab National Bank had Disbursed term loan of Rs. 120.24 Lacs on 30.10.2024 toward Machineries. The loan is
repayable in 30 installments. Oustanding Balance as on 31.03.2025 Was Rs 100.21 Lacs , Payable within one year
Rs 46.15 Lakhs
4) Punjab National Bank had sanctioned working capital term loan of Rs. 247 Lacs on 18.07.2020 under GECL Scheme
to meet operational liabilities and restart the business effected due to COVID-19. The loan is repayable in 36
installments after one year moratorium period. Loan has been fully repaid during the year (Previous year Balance
Rs. 20.58 Lacs)
5) Punjab National Bank had sanctioned working capital term loan of Rs. 172.96 Lacs on 15.12.2021 under GECL Scheme
to meet operational liabilities. The loan is repayable in 36 installments after 2 years moratorium period. Outstanding
as on 31.03.2025 was Rs. 96.08 Lacs (Previous year Rs. 153.74 Lacs) payable within one year Rs. 57.65 Lacs (Previous
year Rs. 57.65Lacs)
6) Various banks had sanctioned vehicle loans on different dates of Rs. 345.47 Lacs (Previous year Rs. 231.79 Lacs)
secured against hypothecation of vehicles . The said loans are repayable upto 63 installments of different
amounts and payable on different dates. Outstanding balance as on 31.03.2025 was Rs. 243.38 Lacs (Previous year
Rs. 111.50.00 Lacs) , Payable within one year Rs. 74.03 Lacs (Previous year Rs. 33.33 Lacs) .
*Punjab National Bank had renewed fund based limit of Cash Credit Rs 5552 Lacs & Term Loan Rs 448 Lacs (Previous year Rs 4600 Lacs towards
Cash Credit and Term Loan of Rs 1000 Lacs) and non fund based limit of Rs.1500 Lacs (Previous year Rs 1500 Lacs) towards Bank Guarantee/Letter
of Credit on 04.01.2025. These limit are secured against hypothecation of inventories, books debts, other current assets, fixed deposits, Plant and
machineries and all other fixed assets of the company, besides equitable mortgage of properties of company and its directors. Current assets
are having pari passu charge with HDFC Bank and ICICI Bank.
*HDFC Bank had renewed Fund Based Limit of Cash Credit Rs.3500 Lacs including WCDL of Rs. 1800 Lacs and Bank Guarantee of Rs 500 Lakhs
being sublimit of Cash Credit facility(Previous year Cash Credit Limit of Rs 2000 Lacs Including WCDL of Rs 1800 Lacs being sublimit of Cash Credit
facility) and Non Fund Based Limit of Rs 3500( Previous year Rs 2000 Lacs) towards Bank Guarantee/Letter of Credit on 24.10.2024. These limits are
secured by exchange of Pari passu charge on current assets with ICICI Bank and Punjab National Bank
*ICICI Bank had renewed Fund Based Limit of Rs.2400 Lacs including WCDL of Rs. 1900, Letter of Credit Rs 400 Lacs and buyer credits of 400 Lacs
being sublimit of Cash Credit (Previous Year Cash Credit Limit of Rs 1400 Lacs Inclding Working Capital Demand Loan of Rs 800 Lacs, Letter of
Credit of Rs 200 Lacs and Buyer Credits of Rs 200 Lacs which is sublimit of Cash Credit), Non Fund Based Limit of Rs 2000 Lacs towards Bank
Guarantee/Letter of Credit ( Previous Year Rs 1000 Lacs) and Rs 1283.40 ( Previous year Rs 1600 Lacs) towards Term Loan of on 18.09.2024. These
limit are secured by Exchange of Pari passu charge on current assets with Punjab National Bank & HDFC Bank.
Performance obligation
The performance obligation for sale of products and scrap are satisfied upon delivery/dispatch of goods depending
upon terms with customers and payment is generally due within 15 to 90 days from delivery. Some contracts provide
customers with a right of return, volume discount, rebates and other promotion incentive schemes, which gives rise
to variable consideration subject to constraint. The contracts do not have a significant financing component. The
company offers standard warranty on selected products. The company makes provisions for same as per principles
laid down under Ind AS-37. The performance obligation for the product repair services is satisfied over the period of time
and payment is generally due upon completion of service and acceptance of the customer. There are no unsatisfied
or partially satisfied performance obligation as at March 31, 2025 and March 31, 2024. During the year ended March 31,
2025, revenue recognised from amount included in contract liability at the beginning of the year.
This section explains the judgements and estimates made in determining the fair values of the financial instruments
that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are
disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair
value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes mutual funds that
have quoted price and are valued using the closing NAV.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, 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: If one or more of the significant inputs is not based on observable market data, the instrument is included in level3.
Note 24.2 Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
- the use of quoted market prices
Note 24.3 Fair value of financial assets and liabilities measured at amortised cost
The carrying amounts of financial assets comprising trade receivables, cash and cash equivalents, fixed deposits with
banks, security and other deposits and carrying value of financial liabilities comprising borrowings and trade paybles
and other payables are considered to be the same as their fair values, due to their short-term nature and covered
under level 3 category.
Note 25 Financial risk management
The Company's activities expose it to market risk, liquidity risk and credit risk. In order to minimise any adverse effects on
the financial performance, derivative financial instruments, such as foreign exchange forward contracts and commodity
forward contracts, are entered to hedge certain foreign currency risk exposures and commodity price risk exposures.
The Company's risk management is carried out by a central treasury department under policies approved by the
board of directors. The Company treasury identifies, evaluates and hedges financial risks in close co-operation with
the Company's operating units. The board provides written principles for overall risk management, as well as policies
covering specific areas, such as foreign exchange risk, commodity price risk, credit risk, use of derivative financial
instruments and non-derivative financial instruments, and investment of excess liquidity.
Note 25.1 Credit risk management
The risk of financial loss due to counterparty's failure to honour its obligations arises principally in relation to transactions
where the Company provides goods on deferred terms.
The Company's policies are aimed at minimising such losses, and require that deferred terms are granted only to
customers who demonstrate an appropriate payment history and satisfy creditworthiness procedures. Individual
exposures are monitored with customers subject to credit limits to ensure that the Company's exposure to bad debts
is not significant. The maximum exposure to credit risk regarding financial assets is the carrying amount as disclosed
in the balance sheet. With respect to credit risk arising from all other financial assets of the Company, the Company's
exposure to credit risk arises from default of the counterparty, with a maximum exposure equal to the corresponding
carrying amount of these instruments.
On account of the adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss
or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables.
The provision matrix takes into account available external and internal credit risk factors such as historical experience
for customers. The Company's receivable are high quality with negligible credit risk and the counter-party has strong
capacity to meet the obligations and where the risk of default is negligible or nil. Accordingly, no provision for expected
credit loss is recognised.
Note 25.2 Liquidity risk management
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability
of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out
market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in
funding by maintaining availability under committed credit lines.
Management monitors rolling forecasts of the Company's liquidity position (comprising the undrawn borrowing
facilities below) and cash and cash equivalents on the basis of expected cash flows. In addition, the Company's
liquidity management policy involves monitoring balance sheet liquidity ratios against internal and external regulatory
requirements and maintaining debt financing plans.
Maturities of financial liabilities
The tables below analyse the Company's financial liabilities into relevant maturity groupings based on their contractual
maturities for:
- all non-derivative financial liabilities, and
- net settled derivative financial instruments for which the contractual maturities are essential for an understanding
of the timing of the cash flows.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12months equal
their carrying balances as the impact of discounting is not significant.
Note 25.3 Market risk management
Interest rate risk
The Company's main interest rate risk arises from borrowings with variable rates, which expose the Company to cash
flow interest rate risk. During 31 March 2025 and 31 March 2024, the Company's borrowings at variable rate were mainly
denominated in INR.
The Company's fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk
as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change
in market interest rates.
The long term variable interest rate borrowings are not significant and accordingly, no such sensitivity for interest rate
cash flow has been disclosed.
Price risk
The Company's significant exposure for price risk is relating to commodity forward contracts. However, no open
commodity forward contract is outstanding as on the reporting date and accordingly, doesn't have related price risk.
Note 26 Capital management
Note 26.1 Risk management
The Company's objectives when managing capital are to
- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders
and benefits for other stakeholders, and
- Maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company issue new shares. Consistent with others in the industry,
the Company monitors capital on the basis of the following gearing ratio: Net debt (total borrowings net of cash and
cash equivalents) divided by Total 'equity' (as shown in the balance sheet.
Note 26.2 Loan covenants
The Company has complied with all loan covenants required under borrowing facilities.
Note 27 Related party transactions
Note 27.1 Controlling shareholders
Mr. Raman Bhatia
M/s Raman Bhatia HUF
Ms. Sarika Bhatia
Note 27.2 Fellow Subsidiaries
Rebreathe Medical Devices India Private Limited
Techbec Industries Limited
Techbec Green Energy Private Limited
Servotech EV Infra Private Limited
Servotech sports and entertainment Pvt ltd
Servotech Siliguri strikers Private Limited
Associate Company
NIL
Note 27.3 Key management personnel and their relatives
A number of key management personnel, or their related parties, hold positions in other entities that result in them having
control or significant influence over those entities. A number of these personnel transacted with the Company during
the reporting period. The terms and conditions of the transactions with key management personnel and their related
parties were no more favourable than those available, or those which might reasonably be expected to be available, in
respect of similar transactions with non-key management personnel related entities on an arm's length basis.
Name of key management personnel, their relatives and entities over which they have control or significant influence with
whom transaction were entered during the year or balance was outstanding at the balance sheet date are as follows:
Other Matters
(a) The VAT Department of Government of Haryana at Kundli had assessed the Sales Turnover of the company up to
30.06.2017 and created the demand of Rs.8.81 Lacs (Including Interest) for short submission of statutory forms on
12th March 2021. The Company paid the amount of Rs 2.28 lacs on 29th June,2020. Hence net demand of Rs 6.52 Lacs
is payable as on balance sheet date. The company had charged the said amount to profit & loss account and
reduce the advance payment Rs. 40.92 Lacs from the said Government Department .
(b) The income tax department has created demand of Rs 252.12 Lacs for the A.Y. 2017-18 on 26th of December 2019. The
company had filed an appeal before Commissioner of Income Tax, New Delhi on 21st January 2020 and deposited
Rs. 2.50 Lac against the same. The appeal is pending.
(c ) The income tax department has created demand of Rs 143.36 Lacs for the A.Y. 2016-17 on 28th March 2022. The company
had filed an appeal before Commissioner of Income Tax, New Delhi on 19th of April 2022. The appeal is pending.
(d) In the opinion of the Board, the current assets, loans and advances have a value on realization in the ordinary
course of business, at least equal to the aggregate amount as shown in the Balance Sheet
( e ) The company had received Rs.411.74 Lacs from different customers against supply / to be supply of goods has
been shown as advance from customers in books of accounts, will be adjusted against their outstanding after
reconciliation of their accounts.
(f) The outstanding balances of sundry debtors ,creditors & securities are as per the books of accounts of the
Company which are subject to confirmations and reconciliation, if any.
(g) Previous year figures have been regrouped/rearranged wherever found necessary.
(h) Note 1 to 33 are forming part of Balance Sheet, Profit & Loss & Cash Flow Statement and have been authenticated
by the directors.
Events occurring after the reporting period
There have been no material events other than disclosed in the financial statements after reporting date which
would require disclosure or adjustments to the financial statements as of and for the year ended 31st March 2025
Significant accounting policies 1&2
Notes on Financial Statements
The accompanying notes are an integral part of the financial statements.
As per our report of even date
For Rohit KC Jain & Co. For and on behalf of the Board of Directors of
Chartered Accountants Servotech Renewable Power System Limited
FRN: 020422N ( Formerly known as Servotech Power Systems Limited)
Raman Bhatia Sarika Bhatia
(Managing Director) (Whole-time Director)
DIN-00153827 DIN-00155602
CA Rohit Jain Rupinder Kaur Vikas Bhatia
Partner (Company Secretary ) (Chief Financial Officer)
MN. 099444 M.No.- A38697 PAN- AJNPB0303P
UDIN: 25099444BMMLTN9696
Place: Delhi
Date: 06-05-2025
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