Provisions, Contingent Liabilities and Assets
Provisions are recognised when the Company has a
binding present obligation. This may be either legal
because it derives from a contract, legislation or other
operation of law, or constructive because the Company
created valid expectations on the part of third parties
by accepting certain responsibilities. To record such
an obligation it must be probable that an outflow of
resources will be required to settle the obligation and
a reliable estimate can be made for the amount of the
obligation. The amount recognised as a provision and the
indicated time range of the outflow of economic benefits
are the best estimate (most probable outcome) of the
expenditure required to settle the present obligation at
the balance sheet date, taking into account the risks and
uncertainties surrounding the obligation. Non-Current
provisions are discounted for giving the effect of time
value of money.
Contingent liabilities are disclosed when there is a
possible obligation arising from past events, the existence
of which will be confirmed only by the occurrence or non¬
occurrence of one or more uncertain future events not
wholly within the control of the Company or a present
obligation that arises from past events where it is either
not probable that an outflow of resources will be required
to settle the obligation or a reliable estimate of the
amount cannot be made
A contingent asset is not recognised but disclosed in the
financial statements where an inflow of economic benefit
is probable.
Provisions, contingent assets and contingent liabilities
are reviewed at each balance sheet date.
Employee Benefit Plans
The cost of defined benefit gratuity plan and other post¬
employment benefits 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 and mortality
rates. 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.
The parameter most subject to change in the discount
rate. In determining the appropriate discount rate for plans
operated in India, the management considers the interest
rates of government bonds in currencies consistent with
the currencies of the post employment benefit obligation.
The mortality rate is based on publicly available mortality
tables for India. Those mortality tables tend to change
only at interval in response to demographic changes.
Future salary increases are based on expected future
inflation rates for the respective countries.
Further details about gratuity obligations are given in
Note 36.
Property Plant & Equipment
An item of property, plant and equipment (PPE) that
qualifies as an asset is measured on initial recognition
at cost. Following initial recognition, items of PPE are
carried at their cost less accumulated depreciation and
accumulated impairment losses, if any. Item of PPE which
reflects significant cost and has different useful life from
the remaining part of PPE is recognised as a separate
component.
Capital work in progress and Capital advances
Cost of assets not ready for intended use, as on the
Balance Sheet date, is shown as capital work in progress.
Advances given towards acquisition of fixed assets
outstanding at each Balance Sheet date are disclosed
as Other Non-Current Assets.
Depreciation
Assets are depreciated to the residual values on the
straight-line basis over the estimated useful lives.
Estimated useful lives of the assets are as follows:
The Company, based on technical assessment made by
technical expert and management estimate, depreciates
certain items of building, plant and equipment over
estimated useful lives which are different from the useful
life prescribed in Schedule II to the Companies Act, 2013.
The management believes that these estimated useful
lives are realistic and reflect fair approximation of the
period over which the assets are likely to be used.
An item of property, plant and equipment and any
significant part initially recognised is derecognised
upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or loss
arising on derecognition of the asset (calculated as the
difference between the net disposal proceeds and the
carrying amount of the asset) is included in the statement
of profit and loss when the asset is derecognised.
The residual values, useful lives and methods of
depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted
prospectively, if appropriate.
Right of Use of Assets
At the date of commencement of the lease, the
Company recognizes a right-of-use asset (“ROU”) and a
corresponding lease liability for all lease arrangements in
which it is a lessee, except for leases with a term of twelve
months or less (short-term leases) and low value leases.
For these short-term and low value leases, the Company
recognizes the lease payments as an operating expense
on a straight-line basis over the term of the lease.
As a lessee, the Company determines the lease term as
the non-cancellable period of a lease adjusted with any
option to extend or terminate the lease, if the use of such
option is reasonably certain. The Company makes an
assessment on the expected lease term on a lease-by¬
lease basis and thereby assesses whether it is reasonably
certain that any options to extend or terminate the
contract will be exercised. In evaluating the lease term,
the Company considers factors, such as any significant
leasehold improvements undertaken over the lease
term, costs relating to the termination of the lease and
the importance of the underlying asset to the operations
taking into account the location of the underlying asset
and the availability of suitable alternatives. The lease
term in future periods is reassessed to ensure that the
lease term reflects the current economic circumstances.
Certain lease arrangements include the options to extend
or terminate the lease before the end of the lease term.
ROU assets and lease liabilities include these options
when it is reasonably certain that they will be exercised.
The right-of-use assets are initially recognized at cost,
which comprises the initial amount of the lease liability
adjusted for any lease payments made at or prior to the
commencement date of the lease plus any initial direct
costs less any lease incentives. They are subsequently
measured at cost less accumulated depreciation and
impairment losses.
Right-of-use assets are depreciated from the
commencement date on a straight-line basis over the
shorter of the lease term and useful life of the underlying
asset. Right-of-use assets are evaluated for recoverability
whenever events or changes in circumstances indicate
that their carrying amounts may not be recoverable.
For impairment testing, the recoverable amount (i.e. the
higher of the fair value less cost to sell and the value-in¬
use) is determined on an individual asset basis unless
the asset does not generate cash flows that are largely
independent of those from other assets. In such cases,
the recoverable amount is determined for the Cash
Generating Unit (CGU) to which the asset belongs.
Intangible Asset
Intangible assets acquired separately are measured on
initial recognition at cost. The cost of intangible assets
acquired in a business combination is their fair value
at the date of acquisition. Following initial recognition,
intangible assets are carried at cost less any accumulated
amortisation and accumulated impairment losses.
Amortisation
Software is amortized over management estimate of its
useful life of 5 years on straight line basis.
Financial Instruments
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
Initial recognition and measurement
All financial assets are recognised 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 four categories:
• Financial assets at amortised cost
• Financial assets at fair value through other
comprehensive income (FVTOCI)
• Financial assets at fair value through profit or
loss (FVTPL)
• Equity instruments measured at fair value
through other comprehensive income (FVTOCI)
Financial assets at amortised cost
A ‘Financial asset’ is measured at the amortised cost
if both the following conditions are met:
• The financial asset is held within a business
model whose objective is to hold assets for
collecting contractual cash flows, and
• Contractual terms of the asset give rise on
specified dates to cash flows that are solely
payments of principal and interest (SPPI) on the
principal amount outstanding.
This category is the most relevant to the Company.
After initial measurement, such financial assets are
subsequently measured at amortised cost using the
effective interest rate (EIR) method. Amortised 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 amortisation is
included in finance income in the profit or loss. The
losses arising from impairment are recognised in the
profit or loss. This category generally applies to trade
receivables. For more information on receivables,
refer to note 7 of the financial statements.
Financial assets at fair value through Other
Comprehensive Income
Financial assets are measured at FVTOCI if these
financial assets are held within a business model
whose objective is achieved both by collecting
contractual cash flows and selling the financial
assets and the asset’s contractual cash flow
represents SPPI.
Financial instruments included within the FVTOCI
category are measured initially as well as at each
reporting date at fair value. Fair value movements
are recognized in the other comprehensive income
(OCI). However, the Company recognizes dividend
income in the Statement of Profit and Loss. On
derecognition of the asset, cumulative gain or loss
previously recognised in OCI is reclassified from the
equity to Statement of Profit and Loss.
Financial assets at fair value through profit or
loss
FVTPL is a residual category for financial assets. Any
financial assets, which does not meet the criteria for
categorization as at amortized cost or as FVTOCI, is
classified as at FVTPL.
In addition, the company may elect to designate a
financial asset, which otherwise meets amortized
cost or FVTOCI criteria, as at FVTPL. However,
such election is allowed only if doing so reduces
or eliminates a measurement or recognition
inconsistency (referred to as ‘accounting mismatch’).
Financial assets included within the FVTPL
category are measured at fair value with all changes
recognized in the P&L.
Equity Investments
All equity investments in scope of Ind AS 109 are
measured at fair value. Equity instruments which
are held for trading and contingent consideration
recognised by an acquirer in a business combination
to which Ind AS 103 applies are classified as at
FVTPL. For all other equity instruments, the company
may make an irrevocable election to present in other
comprehensive income subsequent changes in the
fair value. The company makes such election on an
instrument-by-instrument basis. The classification is
made on initial recognition and is irrevocable.
If the Company decides to classify an equity
instrument as at FVTOCI, then all fair value
changes on the instrument, excluding dividends,
are recognized in the OCI. There is no recycling
of the amounts from OCI to P&L, even on sale of
investment. However, the Company may transfer the
cumulative gain or loss within equity.
Equity instruments included within the FVTPL
category are measured at fair value with all changes
recognized in the P&L.
Investment in Subsidiaries
The Company has elected to recognise its
investments in subsidiary at cost in accordance with
the option available in Ind AS 27, ‘Separate Financial
Statements’. Cost includes cash consideration paid
on initial recognition and fair value of non-cash
considerations, adjusted for embedded derivative
and estimated contingent consideration (earn out),
if any. The details of such investments are given
in Note 6(a). Impairment policy applicable on such
investments is explained in note below.
Derecognition
A financial asset (or, where applicable, a part of a
financial asset or part of a group of similar financial
assets) is primarily derecognised (i.e. removed from
the Company’s balance sheet) 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 or has
assumed an obligation to pay the received
cash flows in full without material delay
to a third party under a ‘pass-through’
arrangement; and either (a) the Company
has transferred substantially all the risks and
rewards of the asset, or (b) the Company has
neither transferred nor retained substantially
all the risks and rewards of the asset, but has
transferred control of the asset.
When the Company has transferred its rights to
receive cash flows from an asset or has entered
into a pass-through arrangement, it evaluates if and
to what extent it has retained the risks and rewards
of ownership. When it has neither transferred nor
retained substantially all of the risks and rewards of
the asset, nor transferred control of the asset, the
Company continues to recognise the transferred
asset to the extent of the Company’s continuing
involvement. In that case, the company also
recognises an associated liability. The transferred
asset and the associated liability are measured on
a basis that reflects the rights and obligations that
the Company has retained.
Continuing involvement that takes the form of a
guarantee over the transferred asset is measured
at the lower of the original carrying amount of the
asset and the maximum amount of consideration
that the Company could be required to repay.
Impairment
Assessment for impairment is done at each Balance
Sheet date as to whether there is any indication
that a non-financial asset may be impaired. Assets
that have an indefinite useful life are not subject
to amortisation and are tested for impairment
annually and whenever there is an indication that
the asset may be impaired. For the purpose of
impairment testing, goodwill acquired in a business
combination is allocated to each of the Company’s
cash generating units (CGUs) that are expected to
benefit from the combination.
Assets that are subject to depreciation and
amortisation and assets representing investments
in subsidiary and associate companies are reviewed
for impairment, whenever events or changes in
circumstances indicate that carrying amount may not
be recoverable. Such circumstances include, though
are not limited to, significant or sustained decline in
revenues or earnings and material adverse changes
in the economic environment.
An impairment loss is recognised whenever the
carrying amount of an asset or its CGU exceeds
its recoverable amount. The recoverable amount
of an asset is the greater of its fair value less cost
to sell and value in use. To calculate value in use,
the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that
reflects current market rates and the risk specific
to the asset. For an asset that does not generate
largely independent cash inflows, the recoverable
amount is determined for the CGU to which the
asset belongs. Fair value less cost to sell is the best
estimate of the amount obtainable from the sale of
an asset in an arm’s length transaction between
knowledgeable, willing parties, less the cost of
disposal.
Impairment losses, if any, are recognised in the
Statement of Profit and Loss and included in
depreciation and amortisation expense. Impairment
losses, on assets other than goodwill are reversed
in the Statement of Profit and Loss only to the
extent that the asset’s carrying amount does not
exceed the carrying amount that would have been
determined if no impairment loss had previously
been recognised.
b) Financial Liabilities
(i) Initial recognition and measurement of
Financial Liabilities
Financial liabilities are classified, at initial
recognition, as financial liabilities at fair value
through profit or loss, loans and borrowings,
payables, or as derivatives designated as
hedging instruments in an effective hedge, as
appropriate.
All financial liabilities are recognised initially at
fair value minus, in the case of financial liabilities
not recorded at fair value through profit or loss,
transaction costs that are attributable to the
issue of the financial liabilities.
The Company’s financial liabilities include trade
and other payables, loans and borrowings and
derivative financial instruments.
(ii) Subsequent measurement of financial
liabilities
The measurement of financial liabilities
depends on their classification, as described
below:
• 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.
Gains or losses on liabilities held for
trading are recognised in the profit or
loss.
Financial liabilities designated upon initial
recognition at fair value through profit
or loss are designated at the initial date
of recognition, and only if the criteria in
Ind-AS 109 are satisfied. For liabilities
designated as FVTPL, fair value gains/
losses attributable to changes in own credit
risks are recognized in OCI. These gains/
loss are not subsequently transferred to
P&L. However, the Company may transfer
the cumulative gain or loss within equity.
All other changes in fair value of such
liability are recognised in the statement
of profit or loss. The Company has not
designated any financial liability as at fair
value through profit and loss.
• Loans and Borrowings
This is the category most relevant to
the Company. After initial recognition,
interest-bearing borrowings are
subsequently measured at amortised cost
using the EIR method. Gains and losses
are recognised in profit or loss when the
liabilities are derecognised as well as
through the EIR amortisation process.
Amortised 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
amortisation is included as finance costs
in the statement of profit and loss.
This category generally applies to
borrowings.
• Trade and other payables
Trade payables are initially measured
at fair value, and are subsequently
measured at amortised cost, using the
effective interest rate method. If payment
is expected in one year or less, they are
classified as current liabilities. If not, they
are presented as non-current liabilities.
Derecognition
A financial liability is derecognised 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 recognised in the
statement of profit or loss.
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. The inputs to these models are taken
from observable markets where possible, but where
this is not feasible, a degree ofjudgement 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.
Offsetting of financial asset and liabilities
Financial assets and liabilities are offset and the
net amount reported in the balance sheet where
Company currently has a legally enforceable right
to offset the recognized amounts, and there is an
intention to settle on a net basis or realize the asset
and settle the liability simultaneously.
Inventory
Inventories are valued at the lower of cost and net
realisable value.
Costs incurred in bringing each product to its
present location and condition are accounted for
as follows:
• Raw materials: cost includes cost of purchase
and other costs incurred in bringing the
inventories to their present location and
condition. Cost is determined on weighted
average basis.
• Stores & spare parts: Cost is determined on
First In First Out (FIFO) basis
• Finished goods and work in progress: cost
includes cost of direct materials and labour
and a proportion of manufacturing overheads
based on the actual operating capacity, but
excluding borrowing costs. Cost is determined
on weighted average basis.
Net realisable value is the estimated selling price
in the ordinary course of business, less estimated
costs of completion and the estimated costs
necessary to make the sale.
Cash & Cash Equivalent
Cash and cash equivalent in the balance sheet
comprise cash at banks and 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, net of outstanding bank
overdrafts as they are considered an integral part of
the Company’s cash management.
Earnings per Share
Basic earnings per equity share is computed by
dividing the net profit attributable to the equity
holders of the Company by the weighted average
number of equity shares outstanding during the
period. The Company has no potentially dilutive
equity shares.
Dividend
The final dividend on shares is recorded as a liability
on the date of approval by the shareholders and
interim dividends are recorded as a liability on the
date of declaration by the Company's Board of
Directors. Income tax consequences of dividends
on financial instruments classified as equity will be
recognized according to where the entity originally
recognized those past transactions or events that
generated distributable profits.
The Company declares and pays dividends in Indian
rupees. Companies are required to pay / distribute
dividend after deducting applicable taxes. The
remittance of dividends outside India is governed by
Indian law on foreign exchange and is also subject
to withholding tax at applicable rates. Refer note
35 for details for dividend declared during the year.
Note 6a. Investments (contd.)
1. During the year ended 31st March, 2025, the Company has acquired 41,74,209 Equity Shares of ' 10 each, representing
100% fully paid up Equity Share Capital of Monga Strayfield Private Limited from its existing shareholders for an aggregate
consideration of ' 12,300 Lakhs. The consideration for such acquisition has been discharged partly by way of cash
amounting to ' 10,302.50 lakhs and partly by way of fresh issue of 4,70,000 Equity Shares of the Company having face value
of ' 10 each at a premium of ' 415. Accordingly, Monga Strayfield Private Limited has become a wholly-owned Subsidiary
of the Company w.e.f. 27th January, 2025.
2. During the year ended 31st March, 2024, the Company had acquired 15,84,320 Equity Shares of ' 10 each, representing
100% fully paid up Equity Share Capital of M. E Energy Private Limited from its existing shareholders for an aggregate
consideration of ' 9,869.96 Lakhs. The consideration for such acquisition has been discharged partly by way of cash
amounting to ' 7,545.96 lakhs and partly by way of fresh issue of 14,00,000 Equity Shares of the Company having face
value of ' 10 each at a premium of ' 156. Accordingly, M. E Energy Private Limited became a wholly-owned subsidiary of
the Company w.e.f 20th February 2024.
3. Consequent to the initiation of Corporate Insolvency Resolution Process (CIRP) and appointment of Insolvency Professional
in case of McNally Bharat Engineering Company Limited, the Company has fair valued its investment to nominal value of
' 0.01 per share pending execution of approved resolution plan of McNally Bharat Engineering Company Limited.
Note 15: Other Equity
Capital Redemption Reserve - The Company had made an offer of buyback of its own fully paid up Equity Shares through the
methodology of "Open Market Purchase through Stock Exchange” pursuant to the approval of Board of Directors at their meeting
held on 29th January, 2009. The Company bought back 2,40,032 Equity Shares for an aggregate amount of ' 63.54 lacs by
utilising Securties Premium Account to the extent of ' 39.53 lacs. Capital Redemption Reserve of ' 24.00 lacs has been created
being the nominal value of the shares bought back.
Securities Premium - Where the Company issues shares at a premium, whether for cash or otherwise, a sum equal to the
aggregate amount of the premium received on those shares shall be transferred to “Securities Premium”. The Company may
issue fully paid-up bonus shares to its members out of the Securities Premium and the Company can use this reserve for buy¬
back of shares.
Capital Reserve - Capital Reserve contains profit on re-issue of forfeited shares.
General Reserve - General Reserve is created out of the profits earned by the Company by way of transfer from surplus in the
Statement of Profit and Loss. The Company can use this reserve for payment of dividend and issue of fully paid-up bonus shares.
Retained Earnings- Retained Earnings represents surplus at the Balance Sheet date i.e Cumultaive balance of statement of Profit
& Loss at the balance sheet date.
FVOCI - Net gain/(loss) on FVOCI equity investments - As per Ind AS 109, Investment in Equity Shares are to be initially measured
at fair value and subsequently at fair value through profit and loss or other comprehensive income. At initial recognition, an
entity may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of an
investment in an equity instrument within the scope of this Standard that is neither held for trading nor contingent consideration
recognised by an acquirer in a business combination to which Ind AS 103 applies.
The Company represents that its investments are long term strategic investments and the Company intends to hold the same
for an indefinite period. Thus, the Company has decided to subsequently measure Investments at fair value through other
comprehensive income.
Item of other Comprehensive Income (Re-Measurement of defined benefit plans): Re-measurement, comprising actuarial gains
and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is
reflected immediately in the Balance Sheet with a charge or credit recognised in Other Comprehensive Income (OCI) in the period
in which they occur. Re-measurement recognised in OCI will not be reclassified to Statement of Profit and Loss.
(Also Refer Standalone Statement of Changes in Equity)
A. Term Loan
1) Rate of Interest - 11.10% -11.40% (linked to Bank's 6 months MCLR)
2) Subservient charge over current assets and moveable fixed assets
B. Cash Credit from Banks
1) First Pari-Passu Charge by way of equitable mortgage on the Company's immovable property situated at Plot No. 6,
Kalyan Bhiwandi Industrial Area, Thane.
2) First Pari-Passu Charge by way of hypothecation on the entire Movable Fixed Assets of the Company both present
and future.
3) Hypothecation of present and future stocks of raw materials, semi-finished goods, finished goods, consumable stores,
book debts and other current assets by way of first charge.
C. Loan from a Subsidiary Company
Rate of Interest - 8.00% p.a.
Notes
1) The Company has used the borrowings from banks for the specific purposes for which it was taken.
2) The Company has not been declared as a wilful defaulter by any bank or other lenders, as at the reporting date .
3) The Company has been sanctioned working capital limits in excess of Rupees Five Crore in aggregate during the year, from
banks on the basis of security of current assets. The quarterly return/statements filed by the Company with such banks are
in agreement with the books of account of the Company.
B. Defined Benefit Plans:
The Company has following post employment benefits which are in the nature of defined benefit plans:
Gratuity
The Company has a defined benefit gratuity plan in India (funded). The Company’s defined benefit gratuity plan is a final salary
plan for employees, which requires contributions to be made to a separately administered fund. The gratuity plan is a funded
plan and the company makes contributions to the recognised funds in India. The company does not fully fund the liability and
maintains a target level of funding to be maintained over a period of time based on the estimations of expected gratuity payments.
Gratuity is a defined benefit plan and Company is exposed to the following risks:
Interest rate risk : A fall in the discount rate which is linked to the Government Securities Rate will increase the present value
of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets
depending on the duration of asset.
Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members.
As such, an increase in the salary of the members more than assumed level will increase the plan's liability.
Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined
by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this
rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government
securities, and other debt instruments.
Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule
101 of Income Tax Rules, 1962, this generally reduces ALM risk.
Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan
does not have any longevity risk.
Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance company and a default
will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.
During the year, there were no plan amendments, curtailments and settlements in the Defined Benefit Plan.
The management assessed that cash and cash equivalents, bank balances other than cash and cash equivalents, trade
receivables, other current financial assets, contract assets, trade payables, short term borrowings and other current financial
liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
Note 41 : Fair Value Hierarchy
The fair values of the financial assets and liabilities is 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 categories the values into 3 heads. The inputs to valuation
technique used to measure the fair value of the financial instruments are:
Level 1: Quoted prices (unadjusted ) in the active markets for identical assets or liabilities that the entity can access at the
measurement date.
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or
indirectly i.e. fair value of financial instruments that are not traded in an active market is determined using valuation techniques
which maximises the use of observable market data and rely as little as possible on Company specific estimates. If all the
significant inputs required to fair value an instrument are observable, the instruments is included in level 2.
Level 3: Unobservable inputs for the assets or liability i.e. if one or more of the significant inputs is not based on observable
market data, the instruments is included in level 3.
The following table provides the fair value measurement hierarchy of the Company’s assets and liabilities.
Note 42: Financial risk management objectives and policies
The Company’s business activities expose it to market risk, liquidity risk and credit risk. The management develops and monitors
the Company's risk management policies. The key risks and mitigating actions are also placed before the Board of directors of
the Company. The Company's risk management policies are established to identify and analyse the risks faced by the Company,
to set appropriate risk limits and to control and monitor risks and adherence to limits.
Finance team and experts of respective business divisions provides assurance 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 activities are designed to:
- Protect the Company's financial results and position from financial risks
- Maintain market risks within acceptable parameters, while optimising returns; and
- Protect the Company’s financial investments, while maximising returns.
This note explains the sources of risk which the Company is exposed to and how the Company manages the risk.
A. Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
prices. Market prices comprise currency rate risk and interest rate risk. Financial instruments affected by market risk include loans
and borrowings, financial investments, trade receivables, trade payables and derivative financial instruments.
The Company’s activities expose it to a variety of financial risks, including the effects of changes in foreign currency exchange
rates and interest rate movement. The Company uses derivative financial instruments such as foreign exchange forward contracts
to manage its exposures to foreign exchange fluctuations.
Note 42: Financial risk management objectives and policies (contd)
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.
The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. The
Company also enters into cross currency interest rate swaps, in which it agrees to exchange, at specified intervals, the difference
between fixed and variable rate interest amounts calculated by reference to an agreed-upon principal amount.
b. Foreign Currency Risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign
exchange rates. The Company’s 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).
The Company manages its foreign currency risk by taking foreign exchange forward contracts.
When a derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to
match the terms of the hedged exposure.
The Company hedges its exposure to fluctuations on the translation into ' of its foreign operations by using foreign exchange
forward contracts.
B. Equity Price Risk
The Company's investment consists of investments in publicly traded companies held for the purpose other than trading. The
investee company McNally Bharat Engineering Company Limited have been admitted under Corporate Insolvency Resolution
Process under the provisions of Insolvency and Bankruptcy Code, as at the Balance Sheet date. Accordingly, the Company has
fair valued its investment to nominal value of ' 0.01 per share pending execution of approved resolution plan of McNally Bharat
Engineering Company Limited. The other quoted investments have been reported as per prevailing market prices in the stock
market, as at the balance sheet date. As at 31 March 2025, the exposure to listed equity securities at fair value was ' 844.24 lacs
(31 March 2024: ' 923.60 lacs). A decrease / increase of 10% on the BSE market index could have an impact of approximately
' 84.42 lacs (31 March 2024: ' 92.36 lacs) respectively on the OCI and equity. These changes would not have an effect on profit
or loss.
C. 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), from its
investing activities (primarily inter-corporate deposits) and from its financing activities, including deposits with banks and financial
institutions, foreign exchange transactions and other financial instruments.
a. Trade Receivables
Customer credit risk is managed as per the Company’s established policy, procedures and controls relating to customer credit
risk management. Trade receivables are non-interest bearing and are generally on credit term in line with respective industry
norms. Outstanding customer receivables are regularly monitored. The Company has no concentration of credit risk as the
customer base is widely distributed both economically and geographically.
The requirement for impairment is analysed at each reporting date. Refer Note 7 for details on the impairment of trade receivables.
D. Liquidity Risk
Liquidity risk is the risk that the Company may not be able to make its present and future collateral obligations without incurring
unacceptable losses. The Company's objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral
requirements. The Company closely monitors its liquidity position and maintains adequate sources for financing including debts,
cash credits and overdrafts at an optimised cost.
Contract assets are recognised when there is excess of revenue earned over billings on contracts. Unbilled receivables where
further subsequent performance obligation is pending are classified as contract assets when the company does not have
unconditional right to receive cash as per contractual terms. Contract Assets are transferred to trade receivables when the
Company raises invoices on the customers based on the terms as agreed in the contacts.
Contract Liability is recognised when there are billings in excess of revenues and it also includes consideration received from
customers for whom the company has pending obligation to transfer goods or services. The billing schedules agreed with
customers include periodic performance based payments and / or milestone based progress payments. Invoices are payable
within contractually agreed credit period.
Trade receivables are generally non-interest bearing and are on terms of 30 to 90 days.
Performance Obligations:
The Company enters into different types of contracts with its customers which have different performance obligations as follows:
Designing, Engineering and Manufacturing Equpiments and Systems:
These manufacturing contracts are for designing, engineering and manufacturing critically customised process solutions ranging
for a period of 3 to 12 months. Since, these equipments are highly customised and do not have any alternative use and as per
the terms as agreed in the contracts, in case the contracts get terminated during the design or construction phase, the Company
will be entitled to the costs incurred till that date, plus reasonable profit margin. Thus, the Company recognises revenue for these
contracts over the time in accordance with the provisions of para 35 (c) of Ind AS 115.
These contracts usually have a liquidated damages clause for delay in delivery of these equipments beyond the scheduled
dates as agreed in the contracts.
Note 45: IND AS 115 - Revenue from Contracts with Customers (contd.)
Supply of other drying equipments and spares:
These contracts are for supply of other drying equipments and spares. These are standard equipments and spares which were
manufactured and sold by the Company with a little modification as per the requirements of the customer. Revenue from these
contracts are recognised when the significant risks and rewards of ownership of goods have passed to the buyer, usually on
delivery of the goods to the customer as per the inco-terms as agreed in the contracts. Revenue is measured at the fair value of
consideration received or receivable net of return, trade allowances and rebates.
Service Income:
The Company recognises service income over the time based on the terms as agreed in the contracts entered into with the
customers.
The payment terms for all the above contracts depend upon the milestones as agreed in the contracts and are independent of
the performance obligations to be satisfied.
The Company has not disclosed information regarding transaction price allocated to the remaining performance obligations as
all the contracts of the Company have an original expected duration of one year or less.
Note 48(A): Disclosure in relation to undisclosed income
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 ended 31st March, 2025 and 31st March, 2024 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).
Note 48(B): Details of Benami Property held
The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company,
during the year ended 31st March, 2025 and 31st March, 2024 for holding any Benami property under the Prohibition of Benami
Property Transactions Act, 1988 and the rules made thereunder.
Note 48(C) : Registration of Charge
The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
Note 48(D): Corporate Social Responsibility
As per section 135 of the Companies Act, 2013, a CSR committee has been formed by the Company. The proposed areas of
CSR activities are eradication of hunger and poverty, promoting of education and rural development, disaster management
including disaster relief, rehabilitation and reconstruction and promoting health care including preventing health care. The
expenditure incurred during the year on these activities are approved by the CSR Committee and as specified in schedule VII
to the Companies Act, 2013.
Note 48(E): Details of Crypto Currency or Virtual Currency
The Company has not traded or invested in Crypto currency or Virtual Currency during the year ended 31st March, 2025 and
31st March, 2024.
Note 48(F) : Relationship with Struck off Companies
The Company did not have any transactions with companies struck off u/s 248 of the Companies Act, 2013 or section 560 of
the Companies Act, 1956, during the year ended 31st March, 2025 and 31st March, 2024.
Note 48(G) : Utilisation of Borrowed Funds and Share Premium
During the year ended 31st March 2025, the Company has not advanced or loaned or invested funds (either borrowed funds or
share premium or any other sources or kinds of funds) to any other person (s) or entity(ies).
During the year ended 31st March, 2025, the Company has not received any fund from any person(s) or entity(ies), Including
foreign entities with the understanding (whether recorded in writing or otherwise) that the company shall directly or indirectly
lend or invest or provide any guarantee or security.
Note 48(H)
The Company has complied with the requirements with respect to number of layers as prescribed under section 2(87) of the
Companies Act, 2013 read with the Companies (Restriction on the number of layers) Rules, 2017
Note 51 : Subsequent Events
5,50,000 Convertible Warrants of face value of ' 10 each were issued at a premium of ' 156 during the Financial Year 2023-24
upon receipt of 25% application money amounting to ' 228.25 Lakhs. Subsequent to the year ended 31st March, 2025, upon
receipt of balance 75% thereof aggregating to ' 684.75 Lakhs, the warrants were converted by issue of equivalent number of
fully paid-up Equity Shares.
Note 52 :
Previous year figures have been regrouped/ reclassified wherever neccesary, to make them comparable with the current year
figures.
As per our Report of even date
For V. Singhi & Associates For and on behalf of the Board of Directors of
Chartered Accountants Kilburn Engineering Limited
Firm Registration No.: 311017E
(Sampat Lal Singhvi) (Anil Karnad) (Ranjit Pamo Lala)
Partner Whole Time Director-Operations Managing Director
Membership No.: 083300 DIN : 07551892 DIN : 07266678
Place : Kolkata (Sachin Vijayakar) (Arvind Kumar Bajoria)
Date : 21st May, 2025 Chief Financial Officer Company Secretary
Membership No.: 15390
| 