M. Provision, contingent liabilities and
contingent assets
Provision
A provision is recognised if, as a result of a past event, the
Company has a present legal or constructive obligation that
can be estimated reliably, and it is probable that an outflow
of economic benefits will be required to settle the obligation.
Provisions are determined based on the best estimate required
to settle the obligation at the reporting date. If the effect of
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. The unwinding of the discount
is recognised under finance costs. Expected future operating
losses are not provided for. Provision in respect of loss
contingencies relating to claims, litigations, assessments, fines
and penalties are recognised when it is probable that a liability
has been incurred and the amount can be estimated reliably.
Contingent liabilities and contingent assets
A contingent liability exists when there is a possible but
not probable obligation, or a present obligation that may,
but probably will not, require an outflow of resources, or
a present obligation whose amount cannot be estimated
reliably. Contingent liabilities do not warrant provisions, but
are disclosed unless the possibility of outflow of resources
is remote.
Contingent assets are not recognised in financial statement.
However, when the realisation of income is virtually certain,
then the related asset is no longer a contingent asset, but it is
recognised as an asset.
Contingent Liabilities/Assets to the extent the Management is
aware, are disclosed by way of notes to the financial statements.
Recognition and measurement
Grants & Subsidies received from the Governments are
recognised only when there is reasonable assurance that:
a. The company will comply with the conditions attached to
the grant.
b. There is a reasonable certainty that the grant will be
received.
Government grants related to assets are treated as deferred
income and are recognized in net profit in the statement of
Profit & Loss on a systematic and rational basis over the useful
life of the asset. Government grants related to revenue are
recognized on a systematic basis in net profit in the Statement
of Profit & Loss over the periods necessary to match them with
the related costs which they are intended to compensate.
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
fair value of the loan and the proceeds received. It is recognized
as deferred income and released to statement of Profit & Loss
in proportionate over the loan tenure and presented within
other income. The loan is subsequently measured as per the
accounting policy applicable to financial liabilities.
O. Earnings per share
Basic Earnings Per Share ('EPS') is computed by dividing the net
profit attributable to the equity shareholders by the weighted
average number of equity shares outstanding during the period
excluding the treasury shares in accordance with Ind AS 33
Earnings per share.
Diluted earnings per share is computed by dividing the net
profit by the weighted average number of equity shares
considered for deriving basic earnings per share and also the
weighted average number of equity shares that could have
been issued upon conversion of all dilutive potential equity
shares. Dilutive potential equity shares are deemed converted
as of the beginning of the year, unless issued at a later date. In
computing diluted earnings per share, only potential equity
shares that are dilutive and that either reduces earnings per
share or increases loss per share are included. The number
of shares and potentially dilutive equity shares are adjusted
retrospectively for all periods presented for the share splits.
P. Statement of cash flow
Cash flows are reported using the indirect method, whereby
net profit/(loss) before tax is adjusted for the effects of
transactions of a non-cash nature and any deferrals or accruals
of past or future cash receipts or payments and item of income
or expenses associated with investing or financing cash flows.
The cash flows from regular revenue generating (operating
activities), investing and financing activities of the Company
are segregated. The Company considers all highly liquid
investments that are readily convertible to known amounts of
cash and are subject to an insignificant risk of changes in value
to be cash equivalents.
Q. Cash and cash equivalents
For the purpose of presentation in the statement of cash flows,
cash and cash equivalents includes cash on hand, deposits held
at call with financial institutions, other short-term, highly liquid
investments with original maturities of three months or less that
are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value.
Bank overdrafts and Cash Credit that are repayable on demand
and form an integral part of our cash management are included
as a component of cash and cash equivalents for the purpose
of the statement of cash flows. Whereas they are classified as
borrowings under current liabilities in the balance sheet.
R. Investments in subsidiaries and associates
In the standalone financial statements, investments in
subsidiaries and associates are carried at cost, less any
accumulated impairment losses.
These investments are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying
amount may not be recoverable. If such indications exist, the
investments are tested for impairment in accordance with
Ind AS 36 - Impairment of Assets. Any impairment loss is
recognised in the Statement of Profit and Loss.
Upon disposal of an investment, the difference between the net
disposal proceeds and the carrying amount of the investment is
recognised in the Statement of Profit and Loss.
S. Research and development costs (product
development)
Research expenditure is recognized as an expense when it is
incurred. Development expenditure on an individual project
are recognised as an intangible asset when the Company can
demonstrate:
a) The technical feasibility of completing the intangible asset
so that the asset will be available for use or sale.
b) Its intention to complete and its ability and intention to use
or sell the product.
c) How the asset will generate future economic benefits.
d) The availability of resources to complete the asset.
e) The ability to measure reliably the expenditure during
development.
Expenditure on development which does not meet the criteria
for recognition as an intangible asset is recognized as an
expense when it is incurred.
Items of property, plant and equipment and acquired Intangible
Assets utilized for Research and Development are capitalized
and depreciated in accordance with the policies stated for
Property, Plant and Equipment and Intangible Assets.
T. Events after reporting date
Where events occurring after the balance sheet date provide
evidence of conditions that existed at the end of the reporting
period, the impact of such events is adjusted within the financial
statements. Otherwise, events after the balance sheet date of
material size or nature are only disclosed.
U. Cash dividend to equity holders
The Company recognises a liability to make cash distributions
to equity holders of the Company when the distribution is
authorised and the distribution is no longer at the discretion of
the Company. As per the corporate laws in India, a distribution
is authorised when it is approved by the shareholders. A
corresponding amount is recognised directly in other equity.
V. Errors and Estimates
The Company revises it's accounting policies if the change
is required due to a change in Ind AS or if the change will
provide more relevant and reliable information to the users of
the financial statements. Changes in accounting policies are
applied retrospectively, unless it is impracticable to apply.
A change in an accounting estimate that results in changes
in the carrying amounts of recognised assets or liabilities or
to statement of profit and loss is applied prospectively in the
period(s) of change.
W. Recent 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. For the year ended 31 March, 2026, the amendments
to the standards that are notified by the MCA, but not yet
effective, up to the date of issuance of the Company's financial
statements are disclosed below. The Company will adopt these
amendments to the standards, when they become effective.
Standards notified but not yet effective
The new and amended standards that are notified by the
MCA, but not yet effective, up to the date of issuance of the
Company's financial statements are disclosed below. The
Company will adopt these new and amended standards, when
they become effective.
Amendments to Ind AS 1 - Classification of Liabilities as Current
or Non-current and Non-current Liabilities with Covenants and
Ind AS 10 - Events after the Reporting Period.
Ind AS 10 has been amended to remove the previous treatment
under which a lender's post reporting date waiver - granted
before the financial statements were approved for issue — of a
breach of a material covenant in a long-term loan arrangement
that occurred on or before the end of the reporting period,
resulting in the liability becoming payable on demand at the
reporting date, was regarded as an adjusting event.
For annual reporting periods beginning on or after 1 April,
2026, any breach of a covenant — whether material or
immaterial — occurring on or before the reporting date will,
in accordance with Ind AS 1, require the related liability to be
classified as current, unless the lender has granted a waiver of
the breach on or before the reporting date and has agreed not
to demand repayment for at least 12 months after the reporting
date as a consequence of the breach. Such a waiver shall be
treated as an adjusting event.
Acquisition of Applied Research International
Private Limited (ARIPL)
On 14 February 2025, the Company entered into an
agreement to acquire 100% of the equity share capital of
Applied Research International Private Limited ("'ARIPL'") .The
acquisition was completed in two tranches. The first tranche of
76% was acquired in February 2025, and the remaining 24%
was subsequently acquired, making ARIPL a wholly owned
subsidiary of the company.The first tranche of 76% was acquired
for a consideration of ^ 8,850.00 Lakhs and was completed
on 28 February 2025. The second and final tranche of 24%
was completed on 17 October 2025 for a consideration of ^
3,790.30 Lakhs.
Acquisition of Applied Research Labs Private
Limited (ALPL)
100% shares in ALPL have been acquired for a consideration of
^ 250.00 Lakhs on 28 February 2025.
Acquisition of Vector Technics Private Limited
Pursuant to the approval of the Board of Directors on 14 February 2025, the Company acquired 51% of the equity share capital of
Vector Technics Private Limited ("Vector") for a total consideration of R 2,499.88 Lakhs.
During the year ended 31 March 2025, the Company acquired partly paid equity shares of Vector for a consideration of R 1,069.89
Lakhs. Out of the equity shares acquired, 8,143 equity shares were partly paid as at 31 March 2025, with the unpaid portion
representing 65% of the issue price amounting to R 1,429.99 Lakhs, callable within 12 months from the issue date.
During the year ended 31 March 2026, the Company paid the balance consideration of R 1,429.99 Lakhs towards the call money
on the equity shares, in accordance with the terms of the acquisition agreement. Consequently, the said equity shares stand fully
paid as at 31 March 2026.
Investment in Zen Technologies Inc, USA.
During the year ended 31 March 2025, the Company has invested US$ 10 million (R 8,686.00 Lakhs) in its wholly owned subsidiary
Zen Technologies USA, Inc. to enable expansion of the Company's footprint in North America and to leverage on new growth
opportunities in the region.
Investment in Bhairav Robotics Private Limited
Pursuant to the approval of the Board of Directors, on 14 February 2025, the Company has acquired 45.33% of shares in Bhairav
Robotics Private Limited for a consideration of R 399.96 Lakhs.
Investment in TISA Aerospace Private Limited
Pursuant to the approval of the Board of Directors, on 22 June 2025, the Company has acquired 76% of shares in TISA Aerospace
Private Limited for a consideration of R 656.18 Lakhs.
Investment in Anawave Systems and Solutions Private Limited
Pursuant to the approval of the Board of Directors, on 21 November 2025, the Company has acquired 76% of shares in Anawave
Systems and Solutions Private Limited for a consideration of R 700.00 Lakhs.
Disposal in AiTuring Technologies Private Limited
During the year ended 31 March 2026, the Company's shareholding in AiTuring Technologies Private Limited reduced from 51%
to 49%, pursuant to issue of new equity shares by AiTuring to other investors, without any corresponding acquisition or sale of
shares by the Company. Consequently, the Company lost control over AiTuring and it has been reclassified from a subsidiary to an
associate. The investment of 10,409 equity shares of R 10/- each, fully paid up, held in AiTuring has accordingly been reclassified
from "Investment in Subsidiary" to "Investment in Associate"
For the year ended 31 March 2025, in accordance with provisions of the Companies Act, 2013 and other related laws, the Company
has allotted 62,46,096 Equity Shares of face value of T1 per Equity Share at price of T1,601 per Equity Share, aggregating to
T1,00,000 lakhs through Qualified Institutional Placement (QIP).
(iii) Terms/rights attached to equity shares
The Company has only one class of equity shares having par value of T1/- each. Each equity share holder is entitled to one vote per
equity share held.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company,
after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the
shareholders.
(vi) Shares Reserved for issue under options
For details of shares reserved for issue under the employee stock option ("ESOP") plan of the company, refer note 46.
(vii) No class of shares have been issued as bonus shares or for consideration other than cash by the Company during the period of
five years immediately preceding the current year end.
(viii) No class of shares have been bought back by the Company during the period of five years immediately preceding the current
year end.
Notes:
1. The Company has not used borrowings taken from banks and financial institutions for the purpose other than for which it was
taken.
2. Quarterly returns or statements of current assets filed with banks are in agreement with the books of account of the Company.
Security:
The Company's borrowings, from banks and NBFCs, are secured by first pari passu charge on the property, plant and equipments,
both present and future. Working capital loans have first pari passu charge on the Company's entire current assets, both present
and future, and second pari passu charge on the Company's property, plant and equipments, both present and future as per the
borrowing terms.
Provision for impairment of investment:
During the year ended 31 March 2025, the Company had recognised an impairment loss of R 37.50 lakhs on its investment in Zen
Medical Technologies Private Limited, in accordance with Ind AS 36 - Impairment of Assets. Consequently, the carrying value of
the said investment as at 31 March 2025 stood at R 37.70 lakhs.During the current year, the Company has carried out a further
assessment of the recoverable amount of the said investment. Based on the assessment of future cash flows, business performance,
and other relevant indicators, the carrying amount of the investment was determined to be fully impaired. Accordingly, the carrying
value of R 37.70 lakhs has been recognised as an impairment loss in the Statement of Profit and Loss for the year ended 31 March
2026.As a result, the carrying value of the investment in Zen Medical Technologies Private Limited as at 31 March 2026 is RNil (31
March: R37.70 Lakhs) (Refer Note 5).
Provision for impairment of advances:
During the year ended 31 March 2025, the Company had recognised an impairment of R 252.84 lakhs on advance given to Paladin
AI INC, considering the recoverability doubtful.
37. EARNINGS PER SHARE
Basic EPS is calculated by dividing the profit for the year attributable to equity holders by the weighted average number of Equity
shares outstanding during the year.
Diluted earnings per share is calculated by dividing the profit attributable to equity holders by the weighted average number of
equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion
of all the dilutive potential equity shares into equity shares.
(b) Defined benefit plan
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of continuous service is
eligible to receive gratuity calculated at 15 days of last drawn basic salary for each completed year of service. The scheme is funded
through a qualifying insurance policy.
Effective 21 November 2025, The Government of India has consolidated multiple existing labour legislations into a unified framework
comprising four Labour codes collectively referred to as the 'New Labour Codes'. Under Ind AS 19, changes to employee benefit
plans arising from legislative amendments constitute a plan amendment, requiring recognition of past service cost immediately in
the statement of profit and loss.
The company has assessed the impact of the labour codes on its employee benefit obligations based on the provisions notified and
the current employee compensation structure. Based on such assessment, the company has concluded that the implementation
of the labour codes does not result in any material impact on the employee benefit obligations or the financial statements for the
current reporting period. The company will continue to evaluate the impact of any future amendments, notifications or rules issued
under the labour codes and account for the same, if any, in the period in which such changes become effective.
Notes:
1. Liabilities are sensitive to discount rate, salary inflation and withdrawal rate.
2. Liabilities are less sensitive to change in mortality assumptions. Hence, sensitivities due to change in mortality not provided..
39. CONTINGENT LIABILITIES AND COMMITMENTS
(a) Contingent liabilities
I) Claims against the Company not acknowledged as debts
i) On account of Direct Tax matters - T387.44 lakhs (31 March 2025: T 441.48 Lakhs)
ii) On account of Indirect Tax matters (Central Excise Duty) - T823.42 lakhs (31 March 2025: T823.42 lakhs)
The Company is contesting the demands raised by the tax authorities. The Company's Management and its tax advisors, believe
that its position will likely be upheld in the appellate process with respect to Direct Tax and Indirect tax matters. No tax expense has
been provided in the financial statements for the tax demand raised. The Management believes that the ultimate outcome of this
proceeding will not have a material adverse effect on the Company's financial position and results of operations.
Income tax demands mainly include the appeals filed by the Company before various appellate authorities against the disallowance
by income tax authorities of certain expenses being claimed and the computation of, or eligibility of, the Company's use of certain
tax incentives or allowances.
II) Guarantees and Capital commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for
At 31 March 2026, the Company has capital commitments of T 3,095.55 lakhs relating to construction of new factory building and
others. (31 March 2025: T 591.98 lakhs relating to construction of new factory building).
40. RELATED PARTY TRANSACTIONS
Information on names of related parties and nature of relationship as required by Ind AS 24 on related party disclosures are given
below:
42. DISCLOSURES UNDER IND AS 108: OPERATING SEGMENTS AND IND AS 115: REVENUE
FROM CONTRACTS WITH CUSTOMERS
Operating Segments
The Company has identified 'Defence and Homeland', as its only primary reportable segment. The Board of Directors of the Company
has been identified as the Chief Operating Decision Maker (CODM) as defined under Ind AS 108. CODM reviews overall financial
information of the Company together for performance evaluation and allocation of resources and does not review any discrete
information to evaluate performance of any individual product or geography.
A. Satisfaction of performance obligation
i) Revenue from the sale of products is recognised at a point in time when control of the goods is transferred to the customer,
which typically occurs upon delivery in accordance with the terms of the contract.
Revenue attributable to AMC services is recognised over time, as the customer simultaneously receives and consumes the
benefits of the service throughout the contract period.
ii) Company's Contract normally do not contain significant financial component and any advance payment received and/or
amount retained by customer is with intention of protecting either parties to the contract.
iii) Variable consideration primarily consist of liquidated damages. The amount of revenue recognised in respect of the same is
determined based on the methodology specified in the contract . The amount is recognised as revenue based on contractual
terms.
iv) The company's turnover mainly includes supply of training & counter drone solutions and other operational equipment
including Annual Maintenance Contracts (AMC).
v) Warranties provided are primarily in the nature of performance warranties. If the terms of contract require the company to
provide the customer with a service in addition to the assurance that the product complies with agreed-upon specification, the
Company accounts for the promised warranty as a performance obligation.
vi) In case of AMC contracts, output method is used to recognise revenue where passage of time is the criteria for satisfaction of
performance obligation.
i) Advance received from customer and milestone bills raised are classified as contract liability and progressively adjusted on
completion of performance obligation. Balance amount receivable after adjusting advance is classified as Trade Receivable.
ii) Compensation accrued to the company upon satisfaction of the performance obligation but is not due as payment milestones
are not achieved is recognised as "Contract Asset'! Such balances are transferred to Trade receivable, when payment milestones
are achieved.
iii) The amount of revenue recognised from advances from customers at the beginning of the year is ^ 2,337.15 Lakhs (31 March
2025: ^ 16,691.64 Lakhs)
D. Value of remaining Performance Obligations
As at 31 March 2026, unrecognised revenue from contracts with customer which are partially satisfied or unsatisfied amounted to
^ 1,22,254.92 Lakhs (31 March 2025: ^ 69,194.10 Lakhs)
E. Payment Terms
Payment Terms from the customer comprises of advances and stage payments which differs from contract to contract.
43. FINANCIAL INSTRUMENTS
A. Measurement of fair values
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 Company has established the following fair value hierarchy that categorises the values into 3 levels. The inputs to valuation
techniques used to measure fair value of financial instruments are:
Level 1: This hierarchy uses quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which
maximize the use of observable market data and rely as little as possible on Company specific estimates.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.
B. Accounting classifications and fair values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the
fair value hierarchy.
The fair value of trade receivables, other financial assets, cash
and cash equivalents, other bank balances, loans, borrowings,
trade payables and other financial liabilities approximate their
carrying amount largely due to short-term nature of these
instruments.
Investment in subsidiaries & associates have been accounted
at historical cost. Since, these are scoped out of Ind AS 109 for
the purpose of measurement, the same are not disclosed in the
table above.
There have been no transfers among Level 1, Level 2 and Level
3 during the years ended 31 March 2026 and 31 March 2025.
44. FINANCIAL RISK MANAGEMENT
OBJECTIVES AND POLICIES
The Company's primary financial liabilities consist of borrowings,
trade and other payables. These liabilities are primarily used to
finance the Company's operations. The Company's principal
financial assets include trade receivables, other receivables,
investments, and cash and cash equivalents, all of which arise
directly from its operating activities.
The Company has an integrated financial risk management
system that proactively identifies and monitors key risks, while
implementing precautionary and mitigatory measures to
address them effectively.
The Company is exposed to market risk, credit risk, and liquidity
risk. These risks are managed under the supervision of the Board
of Directors, which independently evaluates and controls the
overall financial risk management framework. The Board of
Directors reviews and approves the risk management policies
for each category of risk, as summarized below.
i) Market risk
Market risk refers to the potential impact of fluctuations in
market prices on the fair value or future cash flows of financial
instruments. It encompasses interest rate risk, foreign currency
risk and other price risks. Financial instruments subject to
market risk include trade receivables and other receivables,
borrowings and trade payables. The Company's management
is responsible for managing market risk through active oversight
of cash positions, foreign currency risk mitigation strategies,
borrowing arrangements, and adherence to internal market risk
thresholds.
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.
The Company is exposed to interest rate risk because it
borrows funds at both fixed and floating interest rates. The risk
is managed by the Company by maintaining an appropriate mix
between fixed and floating rate borrowings.
The Company holds deposits with banks and hence is exposed
to interest rate sensitivity. 1% changes in interest rate will
increase/ decrease interest income by Rs. 1,144.48 Lakhs (31
March 2025: Rs.1,017.81 Lakhs).
b. Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash
flows from an asset/liability will fluctuate because of changes
in foreign exchange rates. The Companies exposure to the risk
of changes in foreign exchange rates relates primarily to the
Company's operating activities (when revenue or expense is
denominated in a foreign currency).
Any movement in the functional currency of the various
operations of the Company against major foreign currencies may
impact the Company's revenue in international geographies.
The Company evaluates the impact of foreign exchange rate
fluctuations by assessing its exposure to exchange rate risks.
ii) Credit Risk
Credit risk refers to the risk that a counter party will default
on its contractual obligations resulting in financial loss to the
Company. Credit risk arises from credit exposures from trade
receivables, advances given to suppliers (for procurement of
goods, services and capital goods), cash and cash equivalent
with banks, security deposits and loans.
Trade Receivables and Other Receivables
The credit risk of the Company is managed at a corporate level
by the risk management committee which has established the
credit policy norms for its customers. The Company expects to
continue to derive most of its revenue from the Indian Defence
forces, consequent to which the Company has a negligible
credit risk associated with such receivables.
As the Company's debtors are predominantly the Indian Defense
Forces where the counter-parties has sufficient capacity to
meet the obligations, the risk of default is considered negligible.
Accordingly, impairment on account of expected credit losses
is being assessed on a case to case basis in respect of dues
outstanding for significant period of time as per the accounting
policy. Further, the management believes that the unimpaired
amounts that are due is collectable in full, based on historical
payment behaviour and extensive analysis of customer credit
risk.
In a few cases credit is extended to customers based on market
conditions after assessing the solvency of the customer and
the necessary due diligence to determine credit worthiness.
Advance payments are made against bank guarantee which
safeguards the credit risk associated with such payments.
Impairment losses on financial assets have been made after
factoring contractual terms and other indicators.
Financial instruments and cash deposits
The cash and cash equivalent with banks are in the form of
short term deposits with maturity period of up to 1 year. The
Company has a well structured Risk Mitigation Policy whereby
there are present limits for each bank based on its net worth
and earning capacity which is reviewed on a periodic basis.
The Company has not incurred any losses on account of default
from banks on deposits.
Investments of surplus funds are made only with
approved counterparties and within credit limits assigned to
each counterparty. Counterparty credit limits are reviewed by
the top management on an annual basis, and may be updated
throughout the year subject to approval of the Company's
Board of Directors.
The limits are set to minimize the concentration of risks and
therefore mitigate financial loss through counterparty's
potential failure to make payments.
Refer Note 10 for ageing for Trade Receivables.
iii) Liquidity Risk
Liquidity risk is the risk that the Company will not be able to
settle or meet its obligations on time or at a reasonable price.
The Company has an established liquidity risk management
framework for managing its short term, medium term and
long term funding and liquidity management requirements.
The Company's exposure to liquidity risk arises primarily from
mismatches of the maturities/recovery of financial assets
and liabilities. The Company manages the liquidity risk by
maintaining adequate funds in cash and cash equivalents. The
Company also has adequate credit facilities agreed with banks
to ensure that there is sufficient cash to meet all its normal
operating commitments in a timely manner.
45. CAPITAL MANAGEMENT
For the purposes of managing capital, the Company considers its equity share capital, securities premium, and other equity reserves
attributable to shareholders as components of capital. The key objective of capital management is to enhance long-term shareholder
value. The Company actively reviews and adjusts its capital structure in response to evolving economic conditions and compliance
with financial covenants. This may involve modifying dividend payouts, returning capital to shareholders, or issuing additional equity.
Capital adequacy is monitored through the gearing ratio, calculated as net debt divided by the sum of net debt and total equity. Net
debt comprises interest-bearing borrowings, net of cash, cash equivalents, and bank balances.
Gearing ratio:
The company monitors capital using gearing ratio, which is
net debt divided by total capital plus net debt. The company's
policy is to keep the gearing ratio within 50%. In order to achieve
this overall objective, the Company makes adjustments in light
of changes in economic conditions and the requirements of the
financial covenants. The Company aims to ensure that it meets
the financial covenants attached to the interest bearing loans
and borrowings that define the capital structure requirements.
Breaches in meeting the financial covenants would permit the
bank to immediately call loans and borrowings. There have
been no breaches in the financial covenants of any interest¬
bearing loans and borrowings in the current year.
*Net Gearing Ratio for 31 March 2026 and 31 March 2025 not
calculated since net debt is negative
*No changes were made in the objectives, policies or
processes for managing capital during the years ended 31
March 2026 and 31 March 2025.
46. EMPLOYEE STOCK OPTION SCHEME
The objective of the Employee Stock Option Scheme is to
attract and retain talent and align the interest of employees with
the Zen Technologies Limited as well as to motivate them to
contribute to its growth and profitability. The Company adopts
Senior Executive Plan in granting Stock options to its Senior
Employees. (Employee Stock Option Plan-2021).
During the Annual General Meeting held on 28th August 2021,
Zen Technologies Limited introduced the Employee Stock
Option Plan-2021, which was subsequently ratified by the
shareholders on 29th September 2022, in accordance with
the earlier SEBI (Share Based Employee Benefits) Regulations,
2014. The plan received in-principle approval from the
National Stock Exchange of India Limited and BSE Limited to
issue a maximum of 40,00,000 equity shares with a face value
of Re.1/- each, under the Zen Technologies Limited Employee
Stock Option Plan-2021.
To facilitate the implementation of the ESOP scheme, the ESOS
Trust had purchased 4,81,524 shares from the secondary
market, for allocation to eligible employees under the ESOS
scheme. During the year ended 31 March 2024, ESOS trust
borrowed funds of R5.75 Crores and utilised such funds to
purchase additional 1,59,876 shares from secondary Market .
As at 31 March 2025, the ESOP Trust purchased in aggregate
6,41,400 shares from secondary market at consideration of
R1,567.66 lakhs.
During the year ended 31 March 25 the Nomination and
Remuneration Committee had further granted 5,000 options
on 4 May 2024 at an exercise price of R100 per option; 10,500
options on 28 July 2024 at an exercise price of R500 per option;
47,000 options on 14 February 2025 at an exercise price of
R500 per option; and 1,37,000 options on 28 March 2025 at
an exercise price of R500 per option. During the year ended 31
March 26 the Nomination and Remuneration Committee had
granted 37,750 options on 25 October 2025 at an exercise
price of R250 per option and 1,27,500 options on 30 March
2026 at an exercise price of R250 per option.
In the standalone financial statements, the Company had
adopted the policy of consolidating the ESOP Trust, the related
loan and advances appearing in the standalone financial
statements of the Company were eliminated and investment in
own shares the Company held by the trust is shown as treasury
shares in "other equity".
49. RESEARCH & DEVELOPMENT EXPENSES
The Company has 2 locations where in its in which Research & Development (R&D) is conducted.
Unit - I: B-42 Industrial Estate, Sanath Nagar, Hyderabad - 500018
Unit - II: Signature Towers, Opposite Botanical Garden, Kondapur, Hyderabad - 500084
The R&D expenses for the year are provided below:
51. OTHER STATUTORY INFORMATION
(i) The Company does not hold any Investment Property.
(ii) The Company has not revalued its property, plant and
equipment and intangible assets during the year.
(iii) The Company do not have any Benami property, where
any proceeding has been initiated or pending against
the Company for holding any Benami property under the
Benami Transactions (Prohibition) Act, 1988 (45 of 1988)
and rules made thereunder.
(iv) The Company has not been declared as wilful Defaulter by
any bank or financial institution or other lender.
(v) The Company do not have any transactions with
companies struck off under section 248 of the Companies
Act, 2013 or section 560 of Companies Act, 1956.
(vi) The Company do not have any charges or satisfaction
which is yet to be registered with ROC beyond the
statutory period.
(vii) The Company have 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:
(a) 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
(b) provide any guarantee, security or the like to or on
behalf of the Ultimate Beneficiaries.
(viii) The Company have 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:
(a) 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
(b) provide any guarantee, security or the like on behalf
of the Ultimate Beneficiaries.
(ix) The Company have not traded or invested in Crypto
currency or Virtual Currency during the financial year.
(x) The Company have not 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.
(xi) The Company has borrowings and credit limits from banks
and NBFCs, secured by hypothecation of inventories
and by charge on book debts and other assets of the
Company, and quarterly returns or statements of current
assets filed by the Company are in agreement with books
of accounts without any material discrepancies.
52. Previous year figures have been reclassified/regrouped to
confirm to those of current year.
| 