2.19 Provision and Contingent Liabilities
Provisions are recognized for liabilities that can be measured
only by using substantial degree of estimation, if
a. t he company has a present obligation as a result of past
event,
b. a probable outflow of resources is expected to settle the
obligation; and
c. the amount of the obligation can be reliably estimated.
Contingent liability is disclosed in case of
i. a present obligation arising from past events, when it is not
probable that an outflow of resources will be required to
settle the obligation;
ii. a present obligation arising from past events, when no
reliable estimate is possible; and
iii. a possible obligation arising from past events where the
probability of outflow of resources is not remote.
Provisions and contingent liabilities are reviewed at each
Balance Sheet date.
2.20 Cash Flow Statement
Standalone Cash flows are reported using the indirect method,
whereby Profit 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. The cash flows from regular
revenue generating, financing and investing activities of the
company are segregated.
2.21 Segment reporting
The Company's business activity primarily falls within a single
segment i.e. Process and Product Engineering. The geographical
segments considered are "within India" and "outside India".
The analysis of geographical segments is based on geographical
location of the customers.
2.22 Standards / Amendments Effective from 1 April 2025
Ministry of Corporate Affairs ('MCA") notifies standards or
amendments to the existing standards under Companies (Indian
Accounting Standards) Rules as issued from time to time for the
year ended March 31, 2026.
The Ministry of Corporate Affairs has notified the Companies
(Indian Accounting Standards) Amendment Rules, 2025, effective
from April 1, 2025. The following amendments are applicable to
the Company:
Ind AS 1 - Presentation of Financial Statements
Under the existing Ind AS 1, where there is a breach of a
material provision of a long-term loan arrangement on or
before the end of the reporting period with the effect that the
liability becomes payable on demand on the reporting date,
the entity does not classify the liability as current if the lender
agrees, after the reporting period but before the approval of the
financial statements, not to demand repayment. However, the
amended requirements stipulate that such waivers obtained
after the reporting date cannot be considered for the purpose
of classification of liabilities. Accordingly, classification shall
be strictly based on the conditions existing as at the reporting
date. This amendment is required to be applied retrospectively in
accordance with Ind AS 8.
Ind AS 7 - Statement of Cash Flows and Ind AS 107 -
Financial Instruments: Disclosures
Under the existing standards, there are limited specific disclosure
requirements in respect of Supplier Finance Arrangements. The
amendments introduce enhanced disclosure requirements to
improve transparency of such arrangements, including disclosure
of key terms and conditions, carrying amounts of liabilities subject
to such arrangements, and the related liquidity risk exposures.
The Company does not expect these amendments to have an
impact on its financial statements.
Ind AS 12 - Income Taxes
Under the existing Ind AS 12, deferred taxes are recognised
on all temporary differences subject to certain exceptions. The
amendments introduce a temporary exception from recognising
deferred tax assets and liabilities arising from the implementation
of the Pillar Two (Global Minimum Tax) rules, along with
additional disclosure requirements to enable users to understand
the entity's exposure to such taxes.
The Company does not expect this amendment to have an impact
on its financial statements.
Ind AS 21 - The Effects of Changes in Foreign Exchange
Rates
Under the existing Ind AS 21, exchange rates are determined
based on observable market conditions. The amendments
provide additional guidance in situations where a currency is
not exchangeable, including the use of estimation techniques to
determine an appropriate exchange rate, and require disclosures
regarding the nature of restrictions, estimation methods applied
and the financial impact thereof.
The Company does not expect this amendment to have an impact
on its financial statements.
14.2 The Company has only one class of shares referred to as Equity shares having par value of ' 2/-. The holder of Equity Share is entitled to one
vote per share.
14.3 In the event of liquidation of the Company, the residual interest in the company's net assets shall be distributed to the shareholders in the
proportion to the equity shares held.
14.4 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.
(a) 'During the year, the parent company has paid a final dividend of '1.50 per share for FY 24-25 and an interim dividend of '2.00 per
share for FY 25-26 which resulted in total dividend payment '2,016.15 lakhs (previous year ' 1,267.29 lakhs).
(b) 'The Board of Directors, in its meeting held on 18th May, 2026 has proposed a final dividend of '2.00per equity share for the financial
year ended 31st March 2026. The proposal is subject to the approval of shareholders at the Annual General Meeting and if approved
would result in payment of approximately '1152.08 lakhs.
14.5 Aggregate numbers of bonus shares issued by the Company, during the period of five years immediately preceding the reporting periods
including current year:
Foreign Currency Loan of '1,038.62 Lakhs (Previous Year ' 576.58 Lakhs) from Indian Bank are secured by First pari-passu charge shared
with DBS Bank by way of Hypothecation of entire present and future current assets and movable fixed assets (other than those exclusively
charged to term lender) and First and exclusive charge on company's Factory Leasehold Land and Building situated at 16-18, New
Electronics Complex, Chambaghat, Solan, H.P.
Foreign Currency Loan of ' 1,474.30 Lakhs (Previous Year ' 938.90 Lakhs ) from DBS Bank is secured by First pari-passu charge shared with
Indian Bank on entire present and future current assets and movable fixed assets (other than those exclusively charged to term lender) and
First and exclusive charge by way of Equitable Mortgage of factory land and building situated at Kather, Chambaghat, Solan, H.P.
Foreign Currency Loan of ' 421.78 Lakhs (Previous Year ' NIL) from Axis Bank availed during the year is are secured by First pari-passu
charge shared with DBS Bank & Indian Bank both by way of Hypothecation of entire present and future current assets and movable fixed
assets (other than those exclusively charged to other banks) . The company has filed first pari-passu charge in favour of Axis Bank with MCA,
however pari-passu letter from DBS Bank & Indian Bank is still awaited to render the filed charge, as operational.
30.1 Disclosure pursuant to Ind AS 19 "Employee Benefits":
The disclosures required under Ind AS 19 "Employee Benefit" notified under Section 133 of the Companies Act, 2013 read with Companies
(Indian Accounting Standard) Rules, 2015 (as amended from time to time) and other relevant provisions of the Act are given below:
(I) Defined Contribution Plan
(a) Provident Fund
(b) State defined contribution plans
-Employees' Pension Scheme 1995
The Provident Fund and State defined contribution plan are operated by the regional provident fund commissioner. Under the scheme, the
company is required to contribute a specified percentage of payroll cost to the retirement benefit scheme to fund the benefits. These funds
are recognized by the Income tax authorities.
32.2 CSR Expenditure
As per Section 135 of the Companies Act, 2013 (ACT), a Company, which meets the applicable threshold limits as prescribed, needs to
spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR)
activities. The areas for CSR activities are promotion of education,Promoting healthcare, promotion of sports,Eradicting hunger, women
empowerment and skill development, environmental sustainability,Infrastructure facilities and rural development projects. A CSR committee
has been formed by the Company as per the Act.
The funds were utilized during the year on these activities which are specified in Schedule VII of the Act:
(C) Export Obligation
The Company has imported raw materials under Advance Authorization scheme thereby availing Customs duty exemption to
the tune of ' 663.26 Lakhs ( Previous year ' ' 683.87 Lakhs) and also duty exemption to the tune of ' 23.76( Previous Year
' 7.23 lakhs) under EPCG Scheme for which the Company has executed Bond(s). Further, the Company expects to fulfill it's export
obligation under the Scheme(s) to offset the Duties saved.
(D) Domestic Sales Obligation
The Company has imported certain materials under the "Imports Under Concessional Rate of Duty (IGCR) Scheme" and availed
duty exemption to the tune of ' ' 9.35 lakhs (Previous Year ' 41.25 lakhs) for which the company has executed a bond to fulfill
Sales Obligation. Further, the Company expects to fulfill its obligation under the scheme to offset the duties saved.
39. Government Grant
Under the EPCG Scheme, the company imports eligible capital goods without payment of custom duty, subject to fulfillment of Export
Obligations. The benefits availed under the Export Promotion Capital Goods (EPCG) scheme are treated as government grants related to
assets and have been adjusted against the cost of the respective property, plant and equipment. The impact of such grants is recognized
over the useful life of the assets through reduced depreciation. Total Amount of such grant during the year is ' 23.76 lakhs ( Previous Year
'7.23 lakhs)
40. Leases
The Company's significant operating lease arrangements are in respect of premises (residential, offices, godown etc.). These leasing
arrangements, which are cancellable, range from 11 months to 9 years generally and are usually renewable by mutual agreeable terms. The
aggregate lease rentals of leases less than 12 months are charged as expenses. Rental payments under such leases amounting to ' '103.02
lakhs(Previous Year ' 153.01 lakhs) have been included under "Rent, Rates and Taxes" expense in note 32.
40.1 Lease Payments:
The table below provides details regarding the contractual maturities of lease liabilities as at March 31, 2026 and March 31, 2025 on an
undiscounted basis:
41 . The Company's activities involve predominantly one operating segment i.e. Process and product Engineering, which are considered to
be within a single operating segment since these are subject to similar risks and returns. Accordingly, Process and Product Engineering
comprise the primary basis of segmental information as set out in these financial statements, which therefore reflect the information
required by Ind AS 108- Segment Reporting has been disclosed as below.
Fair Value Measurement
i) Carrying amount of Financial assets and financial liabilities recorded at amortized cost approximates their fair value.
ii) Investment in Equity instrument of other companies is measured at its fair value using Level 3 valuation techniques.
43.2 Financial Risk Management
The Company's activities expose it to market risk, liquidity risk, Foreign Currency Risk and credit risk. The Company's primary focus
is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. Risk
management policies and systems are reviewed regularly to reflect changes in the market conditions and the Company's activities to
provide reliable information to the Management and the Board to evaluate the adequacy of the risk management framework in relation
to the risk faced by the company. The Company's board of directors has overall responsibility for the establishment and oversight of the
Company's risk management framework.
43.3 Credit risk
Credit risk is the risk that a counterparty will default on its contractual obligations resulting in financial loss to the company. Credit risk
encompasses both, direct risk of default and the risk of deterioration of creditworthiness.
a) Credit risk management
The Company assesses and manages credit risk based on internal credit rating system, continuously monitoring defaults of customers and
other counterparties, identified either individually or by the company, and incorporates this information into its credit risk controls. The
company has a policy of only dealing with credit worthy parties and obtain sufficient collateral where appropriate as a means of mitigating
the risk of financial loss from defaults.
Cash and cash equivalents and bank deposits
Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated banks and diversifying bank
deposits and accounts in different banks across the country.
Trade receivables
The Company closely monitors the credit-worthiness of the debtors through internal systems that are configured to define credit limits of
customers, thereby, limiting the credit risk to pre-calculated amounts. The Company assesses increase in credit risk on an ongoing basis for
amounts receivable that become past due.
Other financial assets measured at amortised cost
Other financial assets measured at amortized cost includes loans and advances to employees, security deposits and others. Credit risk
related to these other financial assets is managed by monitoring the recoverability of such amounts continuously, while at the same time
internal control system in place ensure the amounts are within defined limits.
b) Expected credit losses
The Company provides for expected credit losses based on the following:
The company recognizes lifetime expected credit losses on trade receivables using a simplified approach, wherein Company has defined
percentage of provision by 'analysing historical trend of default based on the criteria defined above. And such provision percentage
determined have been 'considered to recognise life time expected credit losses on trade receivables.
43.4 Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of
committed credit facilities to meet obligations when due.
Management monitors rolling forecasts of the Company's liquidity position and cash and cash equivalents on the basis of expected cash
flows. The Company takes into account the liquidity of the market in which the entity operates. In addition, the Company's liquidity
management measures involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these
obligations."
Maturities of financial liabilities
The tables below analyses the Company's financial liabilities into relevant maturity based on their contractual maturities for all non¬
derivative financial liabilities.
The amounts disclosed in the table are the contractual undiscounted cash flows. For balances due within 12 months amounts equal their
carrying values as the impact of discounting is not significant.
Outstanding amount of Letters of Credit ,"LCs", established by Bank in favour of Suppliers , as on balance Sheet date, aggregate to
'1,223.31 lakhs (Previous year ' 1,215.40 lakhs) towards import of materials. As and when materials relating thereto are received, the
payment against the same shall be made resulting into maturing of respective LCs.
43.5 Market Risk
The company is exposed in the ordinary course of its business to risks related to changes in foreign currency exchange rates, commodity
prices and interest rates. The company seeks to minimize the effects of these risks by minutely observing the variation and fluctuation on
regular basis. Compliance of exposure volume is reviewed by the management on real time basis and taking corrective measures as and
when required.
43.6 Foreign Currency risk
The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the US Dollar and
Euro. The exchange rate between the Indian rupees and foreign currencies has changed substantially in recent years and may fluctuate
substantially in the future. Consequently, the results of the Company's operations are adversely affected as the rupee appreciates/depreciates
against the currencies. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the
functional currency of the Company.
43.7 Interest rate risk
i) Liabilities
Interest rate risk is the risk that the fair value or future cash flows of a financial Assets/Liabilities because of changes in market interest
rates. The company is exposed to interest rate risk because funds are borrowed at both fixed and floating interest rates. Interest rate
risk is measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the company are principally
denominated in rupees, US dollars and Euros with a mix of fixed and floating rates of interest. The Company has exposure to interest
rate risk, arising principally on changes in marginal cost of fund based Repo rates and SOFR Rates.
ii) Assets
The Company's fixed deposits are carried at amortised cost and are fixed rate deposits. 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.
Interest rate risk exposure
Below is the overall exposure of the Company to interest rate risk:
43.8 Commodity Price Risk
The Company has managed the Commodity Price Risk by having back to back contracts with customers.
44. Capital Management
The Company's capital management objectives are;
- to maintain healthy Credit rating, Capital Ratios and Leverage.
- to maximise return to the Shareholders.
Management assesses the Company's capital requirements in order to maintain an efficient overall financing structure while avoiding
excessive leverage. This takes into account the subordination levels of the Company's various classes of debt. The Company manages the
capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying
assets. The Principal source of funding of the company has been, and is expected to continue to be, cash generated from its operations
supplemented by funding from bank borrowings.
45. Additional regulatory information not disclosed elsewhere in the Standalone Financial Statements
(a) The Company does not have any Benami property, further no proceeding has been initiated or pending against the company for
holding any Benami Property.
(b) The Title deeds of all Immovable Properties (other than the properties where the Company is the lessee and the lease agreements are
duly executed in favour of the company) are held in the name of the Company.
(c) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(d) The Company has not traded or invested in Crypto Currency or Virtual Currency during the respective financial year period.
(e) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of
funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries") with the understanding,
whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company
(Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the
Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company
("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
(f) The Company has not revalued its Property, Plant and Equipment, Investment Property & Intangible Assets.
(g) The company does not have any transactions 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).
(h) The company has not been declared willful defaulter by any bank or financial Institution or other lender.
(i) No Scheme of Arrangements which have been approved by the Competent Authority in terms of Sections 230 to 237 of the Act in
relation to the Company.
(j) The Company has complied with the number of layers prescribed under of section 2(87) of the Act read with the companies (Restriction
on number of layers) Rules, 2017.
(k) The Company has not granted Loans or Advances in the nature of loans to promoters, directors, KMPs, and the related parties (as
defined under Companies Act, 2013,) either severally or jointly with any other person, that are:
(a) repayable on demand or
(b) without specifying any terms or period of repayment."
(l) The Company has duly filed monthly statements with the banks for the sanctioned working capital facilities against security of current
assets, which are in agreement with the books of account
46. Previous year's figures have been regrouped/ reclassified wherever necessary, the impact of such reclassification/ regrouping is not material
to the financial results.
47. On November 21, 2025, the Government of India notified the four Labour Codes - the Code on Wages, 2019, the Industrial Relations
Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020 (collectively
"new Labour Codes") - consolidating 29 existing labour laws. In accordance with the new Labour Codes, the Company has estimated the
incremental impact on retiral benefits to be ' 79.06 Lakhs. This has been presented under "Exceptional Items" in the standalone statement
of profit and loss. The Company continues to monitor developments on the Rules to be notified by regulatory authorities, including
clarifications/ additional guidance from authorities and will continue to assess the accounting implications, basis such developments/
guidance.
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