5 Provisions and Contingent Liabilities
Provisions
The company recognises a provision when there is a present obligation (legal or constructive) as a result of past
events and it is more likely than not that an outflow of resources would be required to settle the obligation and a
reliable estimate can be made.
When the company expects some or all of a provision to be reimbursed, for example, under an insurance contract,
the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain.
The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.
If the effect of the 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. When discounting is used, the increase in the provision
due to the passage of time is recognised as a finance cost.
Contingent liability
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by
the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a
present obligation that is not recognised because it is not probable that an outflow of resources will be required to
settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot
be recognised because it cannot be measured reliably. The company does not recognize a contingent liability
but discloses its existence in the financial statements unless the possibility of an outflow of resources embodying
economic benefits is remote. Contingent liabilities and commitments are reviewed by the management at each
balance sheet date.
6 Revenue recognition
a) Dividend income from investments is recognised when the shareholder’s right to receive payment has been
established and it is probable that the economic benefits will flow to the company.
b) Interest income is recognised when it is probable that the economic benefits will flow to the company using
the effective interest rate and the amount of income can be measured reliably. Interest income is accrued on time
basis, by reference to the principal outstanding.
7 Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
a) Current tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid
to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted
or substantively enacted, at the reporting date.
Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss
account i.e. in Other comprehensive income or equity. Management periodically evaluates positions taken in
the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and
establishes provisions where appropriate.
b) Deferred tax
Deferred tax is provided on temporary differences between the tax bases of assets and liabilities and their
carrying amounts at the reporting date.
Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the
reporting date.
Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same
governing tax laws and the company has a legally enforceable right for such set off.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset
to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised
to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be
recovered. Deferred tax assets are recognised for all deductible temporary differences and unused tax losses
only if it is probable that future taxable amounts will be available to utilise those temporary differences and
losses.
Deferred tax relating to items recognised outside profit or loss is recognised in other comprehensive income
or in equity.
8 Employee benefits
Short term employee benefits
Wages and salaries including non monetary benefits that are expected to be settled within the operating cycle after
the end of the period in which the related services are rendered and are measured at the undiscounted amount
expected to be paid.
Defined contribution plans
Provident fund administered through Regional Provident Fund Commissioner and Employees’ State Insurance
Corporation are defined contribution schemes. Contributions to such schemes are charged to the statement
of profit and loss in the year when employees have rendered services entitling them to the contributions. The
company has no obligation, other than the contribution payable to such schemes.
Defined benefit plans
The company has defined benefit plan such as gratuity, provident fund for certain category of employees
administered through a recognised provident fund trust.
Provision for gratuity, provident fund for certain category of employees administered through a recognised
provident fund trust are determined on an actuarial basis at the end of the year and charged to statement of profit
and loss, other than remeasurements. The cost of providing these benefits is determined using the projected unit
credit method.
Remeasurements, comprising of actuarial gains and losses and the effect of the asset ceiling, (excluding amounts
included in net interest on the net defined benefit liability and return on plan assets), are recognised immediately in
the balance sheet with a corresponding debit or credit to retained earnings through other comprehensive income in
the period in which they occur. Re-measurements are not reclassified to statement of profit and loss in subsequent
periods.
Other long term employee benefits
The company also has other long term benefits plan such as compensated absences. Provision for compensated
absences are determined on an actuarial basis at the end of the year and charged to Statement of Profit and Loss.
The cost of providing these benefits is determined using the projected unit credit method.
9 Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders
by the weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity
shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects
of all dilutive potential equity shares.
10 Cash and cash equivalents
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.
11 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 recognized initially at fair value, plus in the case of financial assets not recorded at fair
value through profit or loss (FVTPL), transaction costs that are attributable to the acquisition of the financial
asset. However, trade receivables that do not contain a significant financing component are measured at
transaction price.
Subsequent measurement
For purposes of subsequent measurement, financial assets of the company are classified in three categories:
a) At amortised cost
b) At fair value through profit and loss (FVTPL)
c) At fair value through other comprehensive income (FVTOCI)
Financial asset is measured at amortised cost if both the following conditions are met:
a) The asset is held within a business model whose objective is to hold assets for collecting contractual
cash flows, and
b) 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.
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 other income in the statement of profit and loss. The losses arising from impairment are recognised in the
statement of profit and loss. This category generally applies to trade and other receivables.
Financial assets not classified as measured at amortised cost or FVOCI as are measured at FVTPL. Financial
assets included within the FVTPL category are measured at fair value with all changes recognised in the
statement of profit and loss.
Equity Investments
All equity investments in the scope of Ind AS 109 are measured at fair value. Equity instruments which are
held for trading are measured at fair value through profit and loss.
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 recognised in other comprehensive income. This cumulative gain or loss
is not reclassified to statement of profit and loss on disposal of such instruments.
Investments representing equity interest in subsidiaries are carried at cost less any provision for impairment.
Derecognition
A financial asset (or, where applicable, a part of a financial asset) is primarily derecognised (i.e. removed from
the balance sheet) when:
a) The rights to receive cash flows from the asset have expired, or
b) 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 (i) the company has transferred substantially all the risks and rewards of the
asset, or (ii) 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 recognizes 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.
Impairment of financial assets
The company recognizes loss allowance using the expected credit loss (ECL) model for the financial assets
which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant
financing component is measured at an amount equal to lifetime ECL. For all financial assets with contractual
cash flows other than trade receivable, ECLs are measured at an amount equal to the 12-month ECL, unless
there has been a significant increase in credit risk from initial recognition in which case those are measured
at lifetime ECL. The amount of ECL (or reversal) that is required to adjust the loss allowance at the reporting
date is recognised as an impairment gain or loss in the Statement of Profit and Loss.
B) Financial liabilities and Equity instruments
Initial recognition and measurement
All financial liabilities are recognised initially at fair value, net of directly attributable transaction costs, if any.
The company’s financial liabilities include borrowings and trade and other payables.
Subsequent measurement
Borrowings
Borrowings are subsequently measured at amortised cost. Any differences between the proceeds(net of
transaction cost) and the redemption/repayment amount is recognised in profit and loss over the period of the
borrowings using the Effective interest rate method.
Trade and other payables
Trade and other payables represent the liabilities for goods and services provided to the company prior to the
end of the financial year which are unpaid.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there
is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a
net basis, to realise the assets and settle the liabilities simultaneously.
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.
Equity Instruments
Equity Instruments are any contract that evidences a residual interest in the assets of an entity after deducting
all of its liabilities.
Debt or equity instruments issued by the company are classified as either financial liability or as equity in
accordance with the substance of contractual arrangements and the definitions of a financial liabilities and an
equity instruments.
12 Fair value measurement
The company measures some of its financial instruments at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability takes place either:
a) In the principal market for the asset or liability, or
b) In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the company. The fair value of an asset or
a liability is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest. A fair value measurement of a non-financial
asset takes into account a market participant’s ability to generate economic benefits by using the asset in its
highest and best use or by selling it to another market participant that would use the asset in its highest and best
use. The company uses valuation techniques that are appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximising the use of relevant observable inputs and minimising the
use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial
statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input
that is significant to the fair value measurement as a whole:
a) Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
b) Level 2 — inputs other than quoted prices included in Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
c) Level 3 — inputs for the asset or liability that are not based on observable market data (unobservable inputs).
For assets and liabilities that are recognised in the financial statements on a recurring basis, the company
determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation
(based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each
reporting period.
For the purpose of fair value disclosures, the company has determined classes of assets and liabilities on the basis
of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained
above.
13 Dividend
The Company recognises a liability to make cash distributions to equity holders 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 equity.
C Accounting judgements, estimates and assumptions
The preparation of financial statements requires management to make judgments, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates.
Judgements, estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimates are revised and in any future periods affected. In
particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting
policies that have the most significant effect on the amounts recognised in the financial statements is included in the
following notes.
• Assessment of useful life of property, plant and equipment
• Estimation of obligations relating to employee benefits (including actuarial assumptions)
b) Terms/ rights attached to equity shares:
The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares
is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The final dividend, if
any, proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General
Meeting. The Board may from time to time pay to the members such interim dividends as appear to it to be justified by
the profits of the Company.
During the year ended March 31, 2025, Board has declared first interim dividend of Rs. 16 per share and second
interim dividend of Rs. 17.75 per share, aggregating Rs. 10,830.56 lakhs (Previous year: first interim dividend Rs. 82
per share (before issue of bonus shares) and second interim dividend of Rs. 19 per share (after issue of bonus share),
aggregating Rs. 11,360.06 lakhs).
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.
d) There are no shares reserved for issue under options and contracts/commitments for the sale of shares or disinvestment,
including the terms and amounts.
e) Bonus shares issued during the five years preceding the reporting date
a During the year 2023-24, the Company has issued and allotted 256,72,460 fully paid up Bonus Equity shares of
Rs. 10 each in the ratio of 4:1 (i.e. 4 Bonus Equity shares for every 1 existing equity share of the Company) to the
shareholders who held shares on October 17, 2023 (Record date).
f) Equity Shares Extinguished on Buy-Back
The Board of Directors of the Company, at its meeting held on December 12, 2022 had approved a proposal to buyback
upto 34,500 equity shares of the Company being 0.53% of the total number of equity shares in the paid up equity
share capital of the Company at a price of Rs. 14,500 per equity share for an aggregate amount not exceeding Rs.
50,02,50,000. A Letter of Offer was made to all eligible shareholders. The Company bought back 34,500 equity shares
out of the shares that were tendered by eligible shareholders and extinguished the equity shares bought back on 24
February 2023. The Company has utilised its Retained Earnings (Rs. 4,999.05 Lakhs) and General Reserve (Rs.
3.45 Lakhs) for the buyback of its equity shares and tax of Rs. 1,164.58 Lakhs was offset from retained earnings. In
accordance with Section 69 of the Companies Act 2013, the Company has created Capital Redemption Reserve of Rs.
3.45 Lakhs equal to the nominal value of the shares bought back as an appropriation from the General Reserve.
23. Post-Employment Benefit Plans:
The Company sponsors funded defined benefit plans for qualifying employees. The defined benefit plans are administered
by separate funds which are legally separate from the Company. These plans are:
Provident fund for certain category of employees administered through a recognised provident fund trust.
(i) These plans typically expose the company to actuarial risks such as investment risk, interest rate risk, longevity risk and
salary risk.
Investment Risk
The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.
Salary Risk
The present value of defined benefit plan is calculated with the assumption of salary increase rate of plan participants
in future. Deviation in rate of increase in salary in future for plan participants from the rate of increase in salary used to
determine the present value of obligation will have a bearing on the plan’s liability.
Interest Risk
The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the
ultimate cost of providing the above benefit and will thus result in an increase in value of the liability.
Longevity Risk
The present value of defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan
participants both during and after employment. An increase in the life expectancy of the plan participants will increase
the plans liability.
(a) Defined Contribution Plans:
Contributions paid / payable to defined contribution plans comprising of provident fund, pension fund, superannuation
fund etc., in accordance with the applicable laws and regulations are recognised as expenses during the period when
the contributions to the respective funds are due.
30. Financial Instruments & Risk management
30.1 Capital management
The Company is cash surplus and has issued only equity share capital . The Company is a Core Investment Company
(CIC) within the meaning of Core Investment Companies (Reserve Bank) Directions, 2016 and does not require
registration with Reserve Bank of India under the said directions.
The cash surpluses are currently invested in equity instruments and inter -corporate loans depending on economic
conditions in line with investment policy set by the Management. Safety of capital is of prime importance to ensure
availability of capital for operations. Investment objective is to provide safety and adequate return on the surplus funds.
The Company does not have any borrowings.
30.2 Financial Risk Management
The Company being a Core Investment Company as per the Core Investment Companies (RBI) Directions, 2016 is
required to invest or lend majority of it’s fund to subsidiaries. The Company’s principal financial liabilities comprise trade
and other payables. The main purpose of these financial liabilities is to support Company’s operations. The Company’s
principal financial assets include inter corporate deposits, loans, cash and cash equivalents and other receivables.
The Company is exposed to market risk, credit risk, liquidity risk and operational and business risk. The Company’s
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 major risks are summarised below:
Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in market prices. In the case of the Company, market risk primarily impacts financial instruments measured at fair value
through profit or loss.
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 does not have exposure to the risk of changes in market interest rate
as it does not have debt obligations.
Credit risk
Credit risk is the risk that the counterparty will not meet its obligations under a financial instrument or a customer
contract, leading to a financial loss. The Company is exposed to credit risk from its financing activities towards inter
corporate deposits to subsidiaries, where no significant impact on credit risk has been identified.
Equity price risk:
The Company’s investment in subsidiaries are accounted at cost in the financial statement net of impairment. The
expected cash flow from these entities are regularly monitored to identify impairment indicators.
Liquidity risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or
at a reasonable price. The Company’s corporate treasury department is responsible for liquidity, funding as well as
settlement management. In addition, processes and policies related to such risks are overseen by senior management.
The Company manages its liquidity requirement by analysing the maturity pattern of the Company’s cash flow of
financial assets and financial liabilities . The Company’s objective is to maintain a balance between continuity of funding
and flexibility through issuance of equity shares etc. The Company invests its surplus funds in subsidiary companies.
The table below analyse the Company’s financial liabilities into relevant maturity profiles based on their contractual
maturities:
In terms of our report of even date For and on behalf of the Board of Directors
For V SAHAI TRIPATHI & CO.
Chartered Accountants
Regn. No. 000262N
Vishwas Tripathi Kartik Bharat Ram Jagdeep Singh Rikhy
Partner Chairman Director
M.No. 086897 (DIN:00008557) (DIN: 00944954)
Place : New Delhi Place : Gurugram, Haryana Place : Gurugram, Haryana
Date : 30th May, 2025 Date : 30th May, 2025 Date :30th May, 2025
Ekta Maheshwari
Whole Time Director
CFO, & Company Secretary
(DIN: 02071432)
Place : Gurugram, Haryana
Date : 30th May, 2025
|