Terms and Conditions of transactions with Related Parties
The sale to and purchases from Related parties are made on terms equivalent to those that prevail in arm's length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in Cash. For the year ended 31 March 2026 and 31 March 2025, the Company has not recorded any impairment of receivables relating to amounts owed by Related Parties.
The Company's main business is manufacture, design and servicing of Gearboxes & Gear Products. The Chief Operating Decision Maker (CODM i.e. Board of Directors) review the operating results as a whole for the purposes of making decisions about resources to be allocated and assess its performance and hence, the entire operations are to be classified as a single business segment. The geographical segments considered for disclosure are India and Rest of the World. All the manufacturing facilities are located in India. Accordingly, there are no separate reportable segments as per Ind AS 108 - Operating Segments.
The Company has cancellable operating lease agreements for office space. As per the lease terms an amount of ? 0.36 Crs (Previous year - ? 0.28 Crs) is charged to Statement of Profit and Loss. As lessor, the Company realized an income of ? 1.32 Crs (Previous year - ? 1.29 Crs) on properties under leases. All the lease agreements entered into by the company as a lessee are with lease terms of 12 months or less. The Company applies "Short Term Lease" exemption for these leases.
The management assessed that cash and cash equivalents, trade receivables, current investments, other financial assets, trade payables and other financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:
i. The fair values of investments and mutual funds are derived from quoted market prices in active markets
Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.
Foreign currency exchange rate risk
The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity, where any transaction references more than one currency. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks.
The foreign exchange rate sensitivity is calculated for each currency by aggregation of the net foreign exchange rate exposure of a currency and a simultaneous parallel foreign exchange rates shift in the foreign exchange rates of each currency by 5%.
Foreign Currency Sensitivity
The following tables demonstrate the sensitivity to 5% appreciation in USD and EURO exchange rates on foreign currency exposures as at the year end, with all other variables held constant. The Company's exposure to foreign currency changes for all other currencies is not material.
The Company's capital management is intended to create value for shareholders by facilitating the meeting of longterm and short-term goals of the Company. The Company determines the amount of capital required on the basis of annual operating plans and long-term product and other strategic investment plans. The Company is equity financed and has always been a net cash company with cash and bank balances along with investment which is predominantly invested in liquid and short-term mutual funds.
The Company's principal financial liabilities comprise of trade payables. The Company has various financial assets such as trade receivables and cash and short-term deposits, which arise directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The Company's senior management oversees the management of these risks. The Company's senior management is supported by a Risk Management Committee that advises on financial risks and the appropriate financial risk governance framework for the Company. The Risk Management Committee provides assurance to the Company's senior management 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.
Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks.
Financial instruments that are subject to concentrations of credit risk, principally consist of trade receivables and loans and advances. None of the financial instruments of the Company result in material concentrations of credit risks.
Exposure to credit risk - The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was f 291.41 Crores as at 31 March 2026 and f 321.20 Crores as at 31 March 2025, being the total of the carrying amount of balances with banks, short term deposits with banks, trade receivables, mutual fund investments and other financial assets.
Customer credit risk is managed by the Company subject to the Company's established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored. At 31 March 2026, the Company has 1 customer (31 March 2025: 1 customer), the receivables from whom exceeds 5% of total receivables which amounts to approximately 8% (31 March 2025: 6%) of all the total receivables outstanding.
The ageing of trade receivables as of balance sheet date is given below. The aging analysis has been considered from the due date. The provision for the not due and less than six months receivables represents expected credit loss.
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company invests its surplus funds in bank fixed deposit and liquid and liquid plus schemes of mutual funds, which carry no/low mark to market risks.
(i) . The Company does not have any transactions with Companies struck off under Section 248 of the Companies Act, 2013 or
Section 560 of the Companies Act, 1956.
(ii) . The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(iii) . The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(iv) . No funds (which are material either individually or in the aggregate) 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, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(v) . No funds (which are material either individually or in the aggregate) have been received by the Company from any person(s)
or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf.
(vi) . The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or
disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.)
(vii) . The Company has not been declared as wilful defaulter by any bank or financial Institution or other lender.
(viii) . The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the
Companies (Restriction on number of Layers) Rules, 2017.
(ix) . No Schemes of Arrangements have been applied or approved by the Competent Authority in terms of Section 230 to 237 of
the Companies Act, 2013.
a. The Company has used two accounting software systems for maintaining its books of account. In respect of one of the software systems, the audit trail feature was enabled at the application level for additional tables for the relevant transactions and at the database level for logging direct data changes through the year. The audit trail feature has remained operational from the date of enablement and to the best of the Company's knowledge, has not been tampered with. The Company has retained the audit trail data, to the extent enabled and recorded, in accordance with applicable statutory requirements.
b. With respect to the software used for recording payroll transactions, the audit trail feature was enabled at the application level throughout the year. The database servers for this application are hosted and managed by a third-party service provider. In the absence of Service Organisation Controls (SOC) reports, we are unable to confirm whether the audit trail feature was enabled at the database level throughout the year. The audit trail data, to the extent enabled and recorded, has been preserved in line with statutory requirements.
The amendments to the standards that are notified by the Ministry of Corporate Affairs (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.
(i) 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.
The amendments are effective for annual reporting periods beginning on or after 1 April 2026 retrospectively in accordance with Ind AS 8. The amendments are not expected to have an impact on the financial statements of the Company.
The financial statements were approved by the Board of Directors on 5 May 2026