Provisions are recognised when the Company has a present
obligation (legal or constructive) as a result of a past event. It
is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. If the
effect of the time value of money is material, provisions are
discounted using equivalent period government securities
interest rate. Unwinding of the discount is recognised in the
statement of profit and loss as a finance cost. Provisions are
reviewed at each Balance Sheet date and are adjusted to
reflect the current best estimate.
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 or a reliable estimate of the amount cannot
be made. Information on contingent liability is disclosed in the
Notes to the Standalone Financial Statements. Contingent assets
are not recognised in financial statement. However, when the
realisation of income is virtually certain, then the related asset is
no longer a contingent asset, but it is recognised as an asset.
(O) Offsetting financial instruments:
Financial assets and liabilities are offset and the net amount
is reported in the Balance Sheet where there is a legally
enforceable rights to offset the recognised amounts and there is
an intention to settle on a net basis or realise the asset and settle
the liability simultaneously. The legally enforceable rights must
not be contingent on future events and must be enforceable
in the normal course of business and in the event of default,
insolvency or bankruptcy of the Company or counterparty.
1.4 Key accounting estimates and judgements
The preparation of the Company’s Standalone Financial
Statements requires the management to make judgements,
estimates and assumptions that affect the reported amounts
of revenues, expenses, assets and liabilities, and the
accompanying disclosures, and the disclosure of contingent
liabilities. Uncertainty about these assumptions and estimates
could result in outcomes that require a material adjustment
to the carrying amount of assets or liabilities affected in
future periods.
a) Depreciation/amortisation and useful lives of property
plant and equipment/intangible assets:
"Property, plant and equipment/intangible assets are
depreciated/amortised over the estimated useful lives of
the assets, after taking into account their estimated residual
value. Management reviews the estimated useful lives and
residual values of the assets annually in order to determine
the amount of depreciation/ amortisation to be recorded
during any reporting period. The useful lives s as specified
in Schedule II to the Companies Act, 2013 and residual values
are based on the Company’s historical experience with similar
assets and take into account anticipated technological
changes, whichever is more appropriate. The depreciation/
amortisation for future periods is revised if there are significant
changes from previous estimates.
b) Provisions:
Provisions and liabilities are recognized in the period when
it becomes probable that there will be a future outflow
of funds resulting from past operations or events and the
amount of cash outflow can be reliably estimated. The timing
of recognition and quantification of the liability require the
application of judgement to existing facts and circumstances,
which can be subject to change. Since the cash outflows can
take place many years in the future, the carrying amounts of
provisions and liabilities are reviewed regularly and revised to
take account of changing facts and circumstances.
c) Defined benefit obligation:
The cost of post-employment benefits is determined using actuarial
valuations. The actuarial valuation involves making assumptions
about discount rates, future salary increases, expected rate of
return on assets and mortality rates. Due to the long term nature of
these plans, such estimates are subject to significant uncertainty.
d) Income Tax:
Company reviews at each balance sheet date the carrying
amount of deferred tax assets. The factors used in estimates
may differ from actual outcome which could lead to an
adjustment to the amounts reported in the Standalone
Financial Statements. Deferred tax assets are recognised
only to the extent that it is probable that taxable profit will be
available against which the unused tax losses or tax credits can
be utilised. This involves an assessment of when those assets
are likely to reverse, and a judgement as to whether or not there
will be sufficient taxable profits available to offset the assets.
This requires assumptions regarding future profitability, which
is inherently uncertain. To the extent assumptions regarding
future profitability change, there can be an increase or decrease
in the amounts recognised in respect of deferred tax assets and
consequential impact in the statement of profit and loss.
e) Recoverability of trade receivables:
Judgements are required in assessing the recoverability of
overdue trade receivables and determining whether a provision
against those receivables is required. Factors considered
include the credit rating of the counterparty, the amount and
timing of anticipated future payments and any possible actions
that can be taken to mitigate the risk of non-payment.
The Company assesses at each reporting date whether there is an
indication that an asset may be impaired. If any indication exists,
or when annual impairment testing for an asset is required, the
Company estimates the asset’s recoverable amount. An asset’s
recoverable amount is the higher of an asset’s or Cash Generating
Units (CGU) fair value less costs of disposal and its value in use. It
is determined for an individual asset, unless the asset does not
generate cash inflows that are largely independent to those from
other assets or groups of assets. Where the carrying amount of an
asset or CGU exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of
money and the risks specific to the asset. In determining fair value
less cost of disposal, recent market transactions are taken into
account. If no such transactions can be identified, an appropriate
valuation model is used. These calculations are corroborated by
valuation multiples or other available fair value indicators.
3.4 Fair Value
The Fair Values of the properties are H 1,625.21 Lakhs (March 31, 2024: 2,898.00 Lakhs). This valuation is based on the valuations
performed by an Registered Valuer. The main inputs used are the rental growth rates and a study of the micro market in discussion with
industry experts or local brokers and sales comparison method in which the sales instances of the similar properties or properties with
similar attributes in the same region are traced and the market rates are derived by using the experience and expertise of the Valuer. The
fair value measurement for the investment property has been categorized as a level 3 fair value based on the inputs to the valuation
techniques used.
3.5 The Company has no restrictions on the realisability of its investment properties and no contractual obligations to purchase, construct
or develop investment properties for repairs, maintenance and enhancement.
16.5 Rights of Equity Shareholders
The Company has only one class of equity shares having a face value of H 10/- per share. Each shareholder is eligible for one vote per
share held. In the event of liquidation of the Company, the equity shareholders will be entitled to receive any of 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.
16.6 Under Paras Defence and Space Technologies Limited - Employee Stock Option Plan 2024, 7,95,000 options have been apporved by the
shareholders and out of this 78,450 (as at 31st March 2024 Nil) options have been granted (Refer Note No. 41)
16.7 Subsequent to year end, the Board of Director at their meeting held on April 30, 2025 proposes, sub-division/split of the existing equity
shares of face value of H 10/- fully paid up into two equity shares of face value of H 5/- fully paidup subject to shareholders’ approval.
Note 17.1 Nature And Purpose Of Reserves
Capital Reserves
The Capital Reserve was created pursuant to the scheme of amalgamation of Mechvac India Limited and Concept Shapers & Electronics Private
Limited. It shall be utilised in accordance with the provisions of the Companies Act, 2013.
Securities Premium
Securities Premium was created when shares were issued at premium. It shall be utilised in accordance with the provisions of the
Companies Act, 2013.
Revaluation Reserve
Revaluation Reserve was created for revaluation of Land and Building. It shall be utilised in accordance with the provisions of the
Companies Act, 2013.
Note: 17 Other Equity(Contd..)
General Reserve
The General Reserve shall be utilised in accordance with the provisions of the Companies Act, 2013.
Retained Earnings
Retained Earnings represent the accumulated Profits / (losses) made by the company over the years.
Share Based payments
Share based payment reserve is created against Paras Defence and Space Technologies Limited - Employee Stock Option Plan 2024 and will
be utilised against excercise of the option by the employees on issuance of the Equity Shares.
Other Comprehensive Income
Other Comprehensive Income (OCI) represents the amount recognised in other equity consequent to remeasurement of Defined Benefit Plan.
22.1 The working capital loans from banks includes:
(i) H NIL (March 31, 2024: H 1,385.15 lakhs) secured by way of hypothecation of stocks & book-debts and further secured by collateral
mortgage of 1) Plot no. 108 A, survey no. 261, IDA, Cherlapally, Dist. Ranga reddy, Hyderabad-500062. 2) Plot no. D112, TTC Industrial
Area, MIDC, Shiravane, Nerul, Navi Mumbai 400076, 3) Penthouse No. 11, 13th & 14th floors, A Wing, Maruti Paradise, Sector No. 15
at CBD Belapur, Navi Mumbai - 400614 owned by Mr Munjal Shah and 4) Plot no. M-6, MIDC, Additional Ambernath Industrial Area,
Ambernath-421506, Maharashtra, India.
(ii) H NIL (March 31, 2024: H 1,782.86 lakhs ) secured by Pari Passu Charge on all existing and future current assets and movable fixed
assets and Collateral mortgage of 1) Plot no. 108 A, survey no. 261, IDA, Cherlapally, Dist. Ranga reddy, Hyderabad-500062. 2) Plot
no. D112, TTC Industrial Area, MIDC, Shiravane, Nerul, Navi Mumbai 400076, 3) Penthouse No. 11, 13th & 14th floors, A Wing, Maruti
Paradise, Sector No. 15 at CBD Belapur, Navi Mumbai - 400614 owned by Mr Munjal Shah and 4) Plot no. M-6, MIDC, Additional
Ambernath Industrial Area, Ambernath-421506, Maharashtra, India.
(iii) H NIL (March 31, 2024: H 188.27 lakhs) secured by Pari Passu Charge on all existing and future current assets and movable fixed
assets and Collateral Security of 1) Plot no. 108 A, survey no. 261, IDA, Cherlapally, Dist. Ranga reddy, Hyderabad-500062. 2) Plot no.
D112, TTC Industrial Area, MIDC, Shiravane, Nerul, Navi Mumbai 400076 and 3) Plot no. M-6, MIDC, Additional Ambernath Industrial
Area, Ambernath-421506, Maharashtra, India.
22.2 The Working Capital Rupee loans referred to above are guaranteed by Managing Director of the company.
30.4 Risk exposures
These plans typically expose the company to actuarial risks as Salary Risk, Discount Rate, Employee Turnover rate/Withdrawal rate and
Mortality / Disability.
Salary Risk
Salary escalation & attrition rate are considered as advised by the company; they appear to be in line with the industry practice
considering promotion and demand & supply of the employees.
Discount rate
In case the yield on the government bonds drops in the future period then it may result in increase in the liability.
Employee Turnover rate/Withdrawal rate
If the actual withdrawal rate in the future turns out to be more or less than expected then it may result in increase in the liability.
Mortality / Disability
Maturity Analysis of Benefit Payments is undiscounted cash flows considering future salary, attrition & death in respective year for
members as mentioned above.
Details of Asset-Liability Matching Strategy:-
Gratuity benefits liabilities of the company are Funded. There are no minimum funding requirements for a Gratuity benefits plan in India and there
is no compulsion on the part of the Company to fully or partially pre-fund the liabilities under the Plan. The trustees of the plan have outsourced the
investment management of the fund to insurance companies which are regulated by IRDA. Due to the restrictions in the type of investments that
can be held by the fund, it may not be possible to explicitly follow an asset-liability matching strategy to manage risk actively in a conventional fund.
30.5 The average duration of the defined benefit plan obligation at the end of the reporting period is 5.00 years ( March 31, 2024 : 9.00 years).
Note : 38 Fair Values (Contd..)
38.2 Fair Valuation techniques used to determine Fair Value
The Company maintains procedures to value its financial assets or financial liabilities using the best and most relevant data available.
The Fair Values of the financial assets and liabilities are included at the amount 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 following methods and assumptions were used to estimate the Fair Values:
i) Fair Value of Cash and Cash Equivalents, Other Bank Balances, Trade Receivable, Trade Payables, Current Loans, Current
Borrowings, and Other Current Financial Assets and Liabilities are approximate at their carrying amounts largely due to the short¬
term maturities of these instruments.
ii) The fair values of non-current borrowings and Margin money are approximate at their carrying amount due to interest bearing
features of these instruments.
iii) 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.
38.3 Fair Value Hierarchy
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation techniques:-
i) Level 1 :- Quoted prices / published Net Assets Value (unadjusted) in active markets for identical assets or liabilities. It includes
fair value of financial instruments traded in active markets and are based on quoted market prices at the Balance Sheet date and
financial instruments like mutual funds for which Net Assets Value is published by mutual fund operators at the Balance Sheet date.
ii) Level 2 :- Inputs other than quoted prices included within level 1, that are observable for the asset or liability, either directly (that
is, as prices) or indirectly (that is, derived from prices). It includes fair value of the financial instruments that are not traded in an
active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques
maximise the use of observable market data where it is available and rely as little as possible on the Company specific estimates. If
all significant inputs required to fair value an instrument are observable then instrument is included in level 2.
iii) Level 3 :- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). If one or more
of the significant inputs is not based on observable market data, the instrument is included in level 3.
The following table provides hierarchy of the fair value measurement of Company’s asset and liabilities, grouped into Level 1 (Quoted
prices in active markets), Level 2 (Significant observable inputs) and Level 3 (Significant unobservable inputs) as described below:
Note: 39 Financial Risk Management - Objective And Policies
The Company is exposed to market risk, credit risk, liquidity risk and competition and price risk. Risk management is carried out by the
company under policies approved by the Board of Directors. This Risk management plan defines how risks associated with the
Company will be identified, analysed and managed. It outlines how risk management activities will be performed, recorded and monitored
by the Company. The basic objective of risk management plan is to implement an integrated risk management approach to ensure all
significant areas of risks are identified, understood and effectively managed to promote a shared vision of risk management and encourage
discussion on risks at all levels of the organization to provide a clear understanding of risk / benefit trade-offs, to deploy appropriate risk
management methodologies and tools for use in identifying, assessing, managing and reporting on risks and to determine the appropriate
balance between cost and control of risk and deploy appropriate resources to manage/optimize key risks. Activities are developed to
provide feedback to management and other interested parties (e.g. Audit committee, Board etc.). The results of these activities ensure that risk
management plan is effective in the long term.
39.1 Market Risk and Sensitivity:
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 risk comprise two types of risk: foreign currency rate risk and interest rate risk. Financial instruments affected by market risk
include loans, borrowings, deposits and investments.
The sensitivity analysis relate to the position as at March 31, 2025 and March 31, 2024
Foreign exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in foreign currency exchange rates. The Company’s exposure to the risk of changes in foreign currency exchange rates relates
primarily to the Company’s operating activities and its Investment. The Company transacts business primarily in USD and Euro.
The Company has foreign currency trade payables and receivables and is therefore, exposed to foreign currency exchange risk. The
Company regularly reviews and evaluates exchange rate exposure arising from foreign currency transactions.
The following table demonstrates the sensitivity in the USD, GBP and Euro to the Indian Rupee with all other variables held
constant. The impact on the Company’s profit before tax (PBT) due to changes in the fair values of monetary assets and liabilities
is given below:
(b) Interest Rate Risk and Sensitivity :-
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. During the previous year, the Company was having non current borrowings in the form of term loans and
current borrowings in the form of working capital. There is a fixed rate of interest in case of vehicle loans and hence, there is no
interest rate risk associated with these borrowings. The Company is exposed to interest rate risk associated with working
capital facility due to floating rate of interest.
39.2 Credit Risk
Credit risk is the risk that a counter party 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) and from its financing
activities including deposits with banks and other financial instruments.
a) Trade Receivables:-
The Company measures the expected credit loss of trade receivables, which are subject to credit risk based on historical trend,
industry practices and the business environment in which the entity operates and adjusted for forward looking information. Loss
rates are based on actual credit loss experience and past trends.
The Company has used practical expedient by computing the expected credit loss allowance for trade receivables based on
provision matrix. The provision matrix taken into account historical credit loss experience and adjusted for forward looking
information. The expected credit loss allowance is based on ageing of the days the receivables are due.
The following table summarizes the Gross carrying amount of the trade receivables and provision made.
The Company considers factors such as track record, size of the institution, market reputation and service standards to select the
banks with which balances are maintained. Credit risk from balances with bank is managed by the Company's finance
department. Investment of surplus funds are also managed by finance department. The Company does not maintain significant
cash in hand. Excess balance of cash other than those required for its day to day operations is deposited into the bank.
For other financial instruments, the finance department assesses and manage credit risk based on internal assessment. Internal
assessment is performed for each class of financial instrument with different characteristics.
39.3 Liquidity Risk :
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and 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 relies on short term borrowings and operating cash flows in the form of working capital to meet its need for
fund. The Company does not breach any covenants wherever applicable on any of its borrowing facilities. The Company has access to a
sufficient variety of sources of funding as per requirements.
39.4 Competition and Price Risk
The Company faces competition from local and foreign competitors. Nevertheless, it believes that it has competitive advantage in terms
of high quality products and by continuously upgrading its expertise and range of products to meet the needs of its customers.
Note: 40 Capital Risk Management
For the purpose of Company's capital management, capital includes issued capital, all other equity reserves and net debts. The primary
objective of the Company’s capital management is to maximise shareholders value. The Company manages its capital structure and
makes adjustments in the light of changes in economic environment and the requirements of the financial covenants.
The Company monitors capital using gearing ratio, which is net debt divided by total capital (equity plus net debt). Net debt are non current
debts plus current debts as reduced by cash and cash equivalents. Equity comprises all components including other comprehensive income.
Note: 41 Employee share based payment:
41.1 The Company offers equity based option plan to its employees through the Company’s stock option plan.
41.2 Paras Defence and Space Technologies Limited - Employee Stock Option Plan 2024" (“Paras Defence ESOP 2024”)''
During the Year, the Board of Directors and Shareholders of the Company have approved the "Paras Defence and Space Technologies
Limited - Employee Stock Option Plan 2024" (“Paras Defence ESOP 2024”) for the employees of the Company, its subsidiary companies
and/or associate companies, group companies (present and future) comprising of equity shares of the Company, not exceeding 7,95,000
equity shares of face value of H 10/- each, in one or more tranches. The specific Employees to whom the Options are granted and their
Eligibility Criteria are determined by the Nomination and Remuneration Committee. the Company has granted 78,450 options in 3
different tranches to the eligible employees on 22nd January, 2025 with exercise price of H 1,000 per share. Exercise period is 5 years from
the date of respective vesting of options.
Note: 45 SEGMENT REPORTING
A. Segment information as per Indian Accounting Standard - 108 - "Operating Segments" :
As per Indian Accounting Standard 108 'Operating Segments', the chief operating decision maker of the Company has identified following
reportable segments of its business:
Segment comprise of:
Optics & Optronic Systems:
- Optical Components and Sub-Systems like Space Optics/Gratings/Mirrors, Infra-Red Lenses for Night Vision Devices, Opto¬
mechanical Assemblies and Precision Diamond Turned components etc.
- Opto-Electronic Systems comprising of Submarine Periscope, hyperspectral camera etc.
- EO/IR Systems.
Defence Engineering:
- Defence Electronics compromising of Defence Automation & Control systems, Rugged Command & Control Consoles,
Avionic suite etc.
- Heavy Engineering comprising of Flow Formed Rockets/ Missile Motor Tubes, Electromechanical assemblies, Remote Controlled
Border Defence System and Turnkey projects.
- Electromagnetic Pulse Protection Solutions.
Unallocated
Consists of other income, expenses, assets and liabilities which cannot be directly identified to any of the above segments.
B. Segment Identification, Reportable Segments and definition of each segment :
a. Reportable Segments:
The chief operating decision maker monitors the operating results of its Business Segments separately for the purpose of making
decisions about resource allocation and performance assessment. Segment performance is evaluated based on the internal
reporting system and is measured consistently with profit or loss in the Standalone Financial Statements. Operating segment
have been identified on the basis of the nature of products / services and have been identified as per the quantitative criteria
specified in Ind AS.
b. Primary / Secondary Segment Reporting Format:
i. The risk-return profile of the company's business is determined predominantly by the nature of its products. Accordingly, the
business segments constitute the Primary Segments for disclosure of segment information.
ii. Revenue disaggregation by geography (Refer Note No. 27.2)
iii. No Non-Current Assets of the Company is located outside India as on March 31, 2025 and March 31, 2024
IV Segment revenue, results, assets and liabilities:
Revenue and results have been identified to a segment on the basis of relationship to operating activities of the segment.
Revenue and expenses which is related to enterprise as a whole and are not allocable to a segment on reasonable basis have
been disclosed as “Unallocable”.
Note: 45 SEGMENT REPORTING (Contd..)
Segment assets and segment liabilities represent assets and liabilities in respective segments. Segment assets include
all operating assets used by the operating segment and mainly includes property, plant and equipment, trade receivable,
inventories and other receivables. Segment liabilities primarily include trade payables and other liabilities. Common assets
and liabilities which cannot be allocated to any of the segments are shown as a part of unallocable assets and liabilities.
V Information about major customers:
Revenue from operations include H 21,169.01 Lakhs (March 31, 2024 : H 10,586.37 Lakhs) from three customers (March 31,
2024: three customers) having more than 10% of the total revenue.
Note : 48 Other Statutory Information
i) There are no balances outstanding on account of any transaction with companies strike off under section 248 of the Companies Act, 2013
or section 560 of Companies Act, 1956.
ii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
iii) The Company does not have any such transaction which is not recorded in the books of account surrendered or disclosed as income
during the year in the tax assessments under the Income-tax act, 1961.
iv) No proceeding has been initiated or pending against the Company for holding any benami property under the Benami Transactions
(Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
v) The Company is not declared wilful defaulter by any bank or financial institution or other lender.
vi) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries)
with the understanding (whether recorded in writing or otherwise) that the Intermediary shall: (a) Directly or indirectly lend or invest in
other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or (b) provide any
guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
vii) The Company has not received any fund from any person(s) or entityies(s), including entities (Funding Party) with the understanding
(whether recorded in writing or otherwise) that the (a) directly or indirectly lend or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (b) Provide any guarantee, security or the like on
behalf of the Ultimate Beneficiaries.
viii) There is no charge or satisfaction which is yet to be registered with Registrar of Companies beyond the statutory period.
Note: 49 The Management and Authorities have the power to amend the Financial Statements in accordance with section 130 And 131 of the
Companies Act, 2013.
Note: 50 The figures for the corresponding previous periods/ year have been regrouped/rearranged wherever necessary, to make
them comparable.
As per our report of even date For and on behalf of the Board of Directors
For Chaturvedi & Shah LLP
Chartered Accountants
(Firm Registration No. 101720W/W100355)
MUNJALSHAH SHARADSHAH
Managing Director Chairman and Director
DIN:01080863 DIN: 00622001
RUPESH SHAH HARSH BHANSALI JAJVALYA RAGHAVAN
Partner Chief Financial Officer Company Secretary
Membership No. 117964 Membership No: F11942
Date: April 30, 2025
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