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Company Information

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ALFA TRANSFORMERS LTD.

07 August 2025 | 04:01

Industry >> Electric Equipment - Transformers

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ISIN No INE209C01015 BSE Code / NSE Code 517546 / ALFATRAN Book Value (Rs.) 12.13 Face Value 10.00
Bookclosure 21/08/2024 52Week High 163 EPS 1.10 P/E 57.62
Market Cap. 58.11 Cr. 52Week Low 60 P/BV / Div Yield (%) 5.23 / 0.00 Market Lot 1.00
Security Type Other

ACCOUNTING POLICY

You can view the entire text of Accounting Policy of the company for the latest year.
Year End :2025-03 

6. Significant accounting policies

6.1- Property, Plant and Equipment & Depreciation:

Property, plant and equipment are stated at cost, less accumulated depreciation and
accumulated impairment losses. The initial cost of an asset comprises its purchase price
including import duties and non-refundable purchase taxes or construction cost, any costs
directly attributable to bringing the asset into the location and condition necessary for it to be
capable of operating in the manner intended by management, the initial estimate of any
decommissioning obligation, if any, and finance costs if any. The purchase price or
construction cost is the aggregate amount paid and the fair value of any other consideration
given to acquire the asset. Assets in the course of construction are initially kept under assets
under construction and are capitalized when the assets is available for use as intended by the
management.

(I) Cost of day-to-day servicing of property, plant and equipments are recognised in the
Statement of Profit and Loss as incurred. Major overhaul expenditure is capitalized as the
activities undertaken to improve the economic benefits expected to arise from the asset.
Where an asset or part of an asset that was separately depreciated is replaced and it is
probable that future economic benefits associated with the item will flow to the Company,
such expenditure is capitalized and the carrying amount of the replaced asset is
derecognized. Inspection costs associated with major maintenance programs are
capitalized and amortized over the period to the next inspection.

(ii) Depreciation on property, plant and equipments (Other than revalued assets) is provided
on Straight Line Method in accordance with the rates specified under Schedule II to the
Companies Act, 2013.

(iii) Other property, plant and equipment are depreciated based on useful life of the asset
under "Straight Line Method" in the manner specified in Schedule II to the Companies
Act., 2013. When any part of an item of property, plant and equipment, have different
useful lives and cost is significant in relation to the total cost of the asset, they are
accounted for and depreciated separately. Depreciation on additions / deletions during
the year is provided on pro rata basis with reference to the date of additions / deletions
except low value items not exceeding Rs. 5,000 which are fully depreciated at the time of
addition. The typical useful lives of other property, plant and equipment (major items) are
asfollows:

Plant &Machinery 05to40years

Testing Equipment 10to25years

Material Handling Equipment 25 to40years

Electrical Installation 10 to 30years

Auxiliary Equipment 25to40years

Factory Building 50to70years

Office Equipment O3to15years

Furniture & Fixtures 5to20years

(i) For these classes of assets, based on technical evaluation carried out by external technical
experts, the Company believes that the useful lives as given above best represent the
period over which Company expects to use these assets.

(ii) The charge over and above the depreciation calculated on the original cost of the
revalued assets are transferred from Fixed Asset Revaluation Reserve to General Reserve
and shown as a deduction from Revaluation Reserve.

(iii) An item of property, plant and equipment is derecognized upon disposal or when no
future economic benefits are expected to arise from the continued use of the asset. Any
gain or loss arising on de-recognition of the asset (calculated as the difference between
the net disposal proceeds and the carrying amount of the item) is included in the income
statement in the period in which the item is derecognized. Any Tangible asset, when
determined to be of no further use, is deleted from the Gross Block of assets. The deleted
assets are carried as 'Assets awaiting disposal1 under Inventories at lower of Rs. 1000 or
5% of the original costand the balance Written down Value, is charged off.

(i) Physical verification of the fixed assets are carried out by the Company in a phased
manner to cover all the items over a period of three years. The discrepancies, if any,
noticed are accounted for after reconciliation of the same.

(ii) Capital work-in-progress in respect of assets which are not ready for their intended use
are carried at cost, comprising of direct costs, related incidental expenses and attributable
interest.

Subsequent Expenditure

Subsequent expenditure is capitalised only if it is probable that the future economic benefits
associated with the expenditure will flow to the Group.

6.2 Intangible assets

Costs of intangible assets are capitalized when the asset is ready for its intended use.
Intangible assets include expenditure on computer software and technical Knowhow which
are stated at the amount initially recognized less accumulated amortization and accumulated
impairment losses.

Cost of computer software is amortized over the useful life not exceeding 10 years from the
date of capitalization.;

Anyintangibleasset, when determined of no further use, iswritten off.

6.3 Development Expenditure:

Testing and material expense for Development are amortized within the use full life of
that particular transformers. The accounting in this regards is as follows:

If transformers goes for testing as failed and a substantial expense (if the total cost is
realization value) being incurred for testing if ready for realization than the company
needs to keep proper documentation for the expenses along with the supporting
evidence.

In such case the expenses so incurred to be treated as R&D expense and in place of
debited to Profit and Loss account it should be kept as an asset.

Such amount standing in the asset side needs to be written off within use full life of the
transformers

6.4 Impairment of property, plant & equipment (PPE) and intangible assets, other than
Goodwill.

At the end of each reporting period, the Company reviews the carrying amounts of its
property, plant & equipment (including capital work in progress) to determine whether there
is any indication that those assets have suffered an impairment loss. If any of such indication
exists, the recoverable amount of the cash generating unit(CGU) is estimated in order to
determine the extent of the impairment loss (if any). Corporate assets and common service
assets are also allocated to individual cash-generating units on a reasonable and consistent
basis.

Intangible assets are tested for impairment at least annually, and whenever there is an
indication that the asset may be impaired the recoverable amount of the asset is estimated in
order to determine the extent of the impairment loss (if any).

If recoverable amount is the higher of fair value less costs of disposal and value in use. 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 for which the estimates of future cash flows have not
been adjusted. If the recoverable amount of a CGU is estimated to be less than its carrying
amount, the carrying amount of the asset or group of assets covered under the CGU is
reduced to its recoverable amount. An impairment loss is recognized immediately in the
statement of profit and loss.

When an impairment loss subsequently reverses, the carrying amount of the asset or group of
assets covered under the CGU is increased to the revised estimate of its recoverable amount,
so that the increased carrying amount does not exceed the carrying amount that would have
been determined had no impairment has loss been recognized for the asset or group of assets
covered under the CGU in prior years. A reversal of an impairment loss is recognized
immediately in the statement of profit and loss.

6.5 Revenue recognition

• Revenue from operations includes sale of goods, services and adjusted for discounts (net),
and gain/ loss on corresponding hedge contracts.

• Revenue from sale of goods are measured at the fair value of the consideration received or
receivable, taking into account contractually defined terms of payment and excluding
taxes or duties collected on behalf of the government and considering the warranty
obligations as compliance to IND AS 115.

• Revenue from sale of goods are recognised when the significant risks and rewards of
ownership have been transferred to the buyer, recovery of the consideration is probable,
the associated cost can be estimated reliably, there is no continuing effective control or
managerial involvement with the goods, and the amount of revenue can be measured
reliably.

• Revenue from rendering of services are recognized when the performance of agreed
contractual task has been completed.

• Dividend Revenue are recognised when the Company's right to receive the payment has
been established.

Insurance claims:

• Insurance claims are accounted for on the basis of claims admitted / expected to be
admitted and to the extent that the amount recoverable can be measured reliably and it is
reasonable to expect the ultimate collection.

6.6 Adjustment pertaining to Earlier Years:

Income/Expenditure relating to a prior period, which do not exceed 5% of the Gross Block of
the Property, Plant & Equipment in each case, are treated as income/expenditure of current
year.

6.7 Leasing

Leases are classified as finance leases whenever the terms of the lease transfer substantially all
the risks and rewards of ownership to the lessee. All other leases are classified as operating
leases.

i) The Company as lessor

Rental income from operating leases is recognized on a straight-line basis over the term of the
relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are
added to the carrying amount of the leased asset and recognized on a straight-line basis over
the lease term.

ii) The Company as lessee

Lease payments are apportioned between finance expenses and reduction of the lease
obligation so as to achieve a constant rate of interest on the remaining balance of the liability.
Finance expenses are recognized immediately in the statement of profit and loss, unless they
are directly attributable to qualifying assets, in which case they are capitalized in accordance
with the Company's general policy on borrowing costs.

Operating lease payments are recognized as an expense on a straight-line basis over the lease
term, except where another systematic basis is more representative of the time pattern in
which economic benefits from the leased asset are obtained/availed by the Company.

In the event that lease incentives are received to enter into operating leases, such incentives
are recognized as a liability. The aggregate benefit of incentives is recognized as a reduction
of rental expense on a straight-line basis, except where another systematic basis is more
representative of the time pattern in which economic benefits from the leased asset are are
obtained/availed by the Company.

6.8 Foreign currency transactions and translations

(i) In preparing the financial statements of the Company, transactions in currencies other
than the entity's functional currency (foreign currencies) are recognized at the rates of
exchange prevailing at the dates of the transactions. At the end of each reporting period,
monetary items denominated in foreign currencies are retranslated at the rates
prevailing at that date. Non-monetary items carried at fair value that are denominated in
foreign currencies are retranslated at the rates prevailing at the date when the fair value
was determined. Non-monetary items that are measured in terms of historical cost in a
foreign currency are not retranslated.

(ii) Exchange differences on monetary items are recognized in the statement of profit and
loss in the period in which they arise except for:

(a) exchange differences on foreign currency borrowings relating to assets under
construction for future productive use, which are included in the cost of those assets
when they are regarded as an adjustment to interest costs on those foreign currency
borrowings;

(b) exchange differences on monetary items receivable from or payable to a foreign
operation for which settlement is neither planned nor likely to occur (therefore forming
part of the net investment in the foreign operation), are recognized initially in other
comprehensive income and reclassified from equity to the statement of profit and loss on
repayment of the monetary items.

(iii) Forward Exchange Contracts not intended for trading or speculation purpose: The
premium or discount arising at the inception of forward exchange contracts is amortized
as expenses or income over the life of the respective contracts. Exchange differences on
such contracts are recognized in the statement of profit and loss on the period in which
the exchange rates change. Any profit or loss arising on cancellation or renewal of forward
exchange contract is recognized as income or expense for the year.

6.9 Borrowing costs

(i) Borrowing costs directly attributable to the acquisition, construction or production of
qualifying assets, which are assets that necessarily take a substantial period of time to get
ready for their intended use for sale, are added to the cost of those assets, until such time
as the assets are substantially ready for their intended use for sale and also includes
exchange difference arising from Foreign Currency borrowings to the extent that they are
regarded as an adjustment to interest cost.

(ii) All other borrowing costs are recognized in the statement of profit and loss in the period
in which they are incurred.

6.10 Government grants

The Company may receive government grants that require compliance with certain
conditions related to the Company's operating activities or are provided to the Company by
way of financial assistance on the basis of certain qualifying criteria.

Government grants are recognised when there is reasonable assurance that the grant will be
received, and the Company will comply with the conditions attached to the grant.
Accordingly, government grants:

(a) Related to or used for assets are included in the Balance Sheet as deferred income and
recognized as income over the useful life of the assets.

(b) Related to incurring specific expenditures are taken to the Statement of Profit and Loss on
the same basis and in the same periods as the expenditures incurred.

© Byway of financial assistance on the basis of certain qualifying criteria are recognised as
they become receivable.

In the unlikely event that a grant previously recognised is ultimately not received, it is treated
as a change in estimate and the amount cumulatively recognised is expensed in the Statement
of Profit and Loss.

6.11 Employee benefits:

6.11.1 Retirement benefit costs and termination benefits:

(i) Short Term Employee Benefits:

All employee benefits payable wholly within twelve months of rendering service are
classified as short term employees benefits. Benefits such as salaries, wages, short term
compensated absences, etc and the expected cost of bonus, ex-gratia are recognized in
the period in which the employees renderthe related service.

(ii) Defined Contribution Plans.

Provident Fund, Superannuation Fund/Annuity Fund and Employees State Insurance
Scheme are defined contribution plans. The contribution paid/ payable under the
schemes is recognized during the period in which the employees renders the related
services.

(iii) Defined Benefits Plans

Gratuity on account of services gratuity is covered under Gratuity-cum-Life Assurance
Scheme of Life Insurance Corporation of India. Annual premium paid for the scheme is
charged to Statement of Profit and Loss

Re-measurement of the defined benefit liability and asset, comprising actuarial gains and
losses, and the return on plan assets (excluding amounts included in net interest
described above) are recognized in other comprehensive income in the period in which
they occur and are not subsequently reclassified to the statement of profit and loss.

6.12 Taxation

Income tax expense represents the aggregate of current tax and deferred tax.

6.12.1 Current tax

Current tax is the amount of income tax payable based on taxable profit for the period.
Taxable profit differs from 'profit before tax' as reported in the statement of profit and loss
because of items of income or expense that are taxable or deductible in other years and items
that are never taxable or deductible. The Company's current tax is calculated using tax rates
and the prevailing tax laws that have been enacted or substantively enacted by the end of the
reporting period.

AHA TRANSFORMERS LIMITED

6.12.2 Deferred Tax

(i) Deferred taxis recognized on the temporary differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax bases used in
the computation of taxable profit. Deferred tax liabilities are generally recognized for all
taxable temporary differences. Deferred tax assets are generally recognized for all
deductible temporary differences to the extent that it is probable that taxable profits will
be available against which those deductible temporary differences can be utilized.

(ii) The carrying amount of deferred tax assets is reviewed at the end of each reporting period
and reduced to the extent that it is no longer probable that sufficient taxable profits will be
available to allow the benefits of all or part of the deferred tax asset to be utilized. Any
such reduction shall be reversed to the extent that it becomes probable that sufficient
taxable profit will be available.

(iii) Deferred tax liabilities and assets are measured at the tax rates that are expected to apply
in the period in which the liability is settled or the asset realised, based on tax rates (and
tax laws) that have been enacted or substantively enacted by the end of the reporting
period.

6.12.3 Current and deferred tax for the year

Current and deferred tax are recognized in the statement of profit and loss, except when they
relate to items that are recognized in other comprehensive income or directly in equity, in
which case, the current and deferred tax are also recognized in other comprehensive income
or directly in equity respectively.

6.13.INVESTMENT PROPERTY

Investment properties are properties held to earn rentals and/or for capital appreciation
(including property under construction for such purposes). The shops, fiats and other
properties held under operating leases to earn rentals or for capital appreciation purposes are
accounted for as investment properties. Investment properties are measured initially at cost,
including transaction costs. Subsequent to initial recognition the, investment properties are
stated at cost less accumulated depreciation.

An investment property is derecognized upon disposal or when the investment property is
permanently withdrawn from use and no future economic benefits are expected from its
disposal. Any gain or loss arising on de-recognition of the property (calculated as the
difference between the net disposal proceeds and the carrying amount of the asset) is
included in profit or loss in the period in which the property is derecognized.

AHA TRANSFORMERS LIMITED

6.14 Inventories

Stock of Raw Materials, Components and stores are valued at lower of cost and net realizable
value. Cost of raw material is determined on average method, excluding GST paid on
purchases. Scrap isvalued at estimated realisable value.

Stock of Materials-in-Process and Finished Goods are valued at lower of cost and net
realizable value. Average cost excludes GST paid on inputs.

Stores and spares are valued at average cost or net realizable value whichever is lower.
Physical verification of inventories is carried out by the Company to cover all the items during
the year.

6.15 Provisions and Contingent Liabilities:

A provision is recognised when the Company has a present obligation as a result of past
events and it is probable that an outflow of resources will be required to settle the obligation
in respect of which a reliable estimate can be made. If effect of the time value of money is
material, provisions are discounted using an appropriate discount 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 liabilities are disclosed in the Notes to the Financial Statements. Contingent
liabilities are disclosed for:

i) Possible obligations which will be confirmed only by future events not wholly within the
control of the Company, or

ii) Present obligations arising from past events where it is not probable that an outflow of
resources will be required to settle the obligation or a reliable estimate of the amount of
the obligation cannot be made.

iii) Details of dues of Income Tax, Sales Tax, Service Tax, Excise Duty and Value Added Tax
which have not been deposited as at March 31, 2025 on account of dispute are given
below:

6.12.2 Deferred Tax

(i) Deferred taxis recognized on the temporary differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax bases used in
the computation of taxable profit. Deferred tax liabilities are generally recognized for all
taxable temporary differences. Deferred tax assets are generally recognized for all
deductible temporary differences to the extent that it is probable that taxable profits will
be available against which those deductible temporary differences can be utilized.

(ii) The carrying amount of deferred tax assets is reviewed at the end of each reporting period
and reduced to the extent that it is no longer probable that sufficient taxable profits will be
available to allow the benefits of all or part of the deferred tax asset to be utilized. Any
such reduction shall be reversed to the extent that it becomes probable that sufficient
taxable profit will be available.

(iii) Deferred tax liabilities and assets are measured at the tax rates that are expected to apply
in the period in which the liability is settled or the asset realised, based on tax rates (and
tax laws) that have been enacted or substantively enacted by the end of the reporting
period.

6.12.3 Current and deferred tax for the year

Current and deferred tax are recognized in the statement of profit and loss, except when they
relate to items that are recognized in other comprehensive income or directly in equity, in
which case, the current and deferred tax are also recognized in other comprehensive income
or directly in equity respectively.

6.13.INVESTMENT PROPERTY

Investment properties are properties held to earn rentals and/or for capital appreciation
(including property under construction for such purposes). The shops, fiats and other
properties held under operating leases to earn rentals or for capital appreciation purposes are
accounted for as investment properties. Investment properties are measured initially at cost,
including transaction costs. Subsequent to initial recognition the, investment properties are
stated at cost less accumulated depreciation.

An investment property is derecognized upon disposal or when the investment property is
permanently withdrawn from use and no future economic benefits are expected from its
disposal. Any gain or loss arising on de-recognition of the property (calculated as the
difference between the net disposal proceeds and the carrying amount of the asset) is
included in profit or loss in the period in which the property is derecognized.

6.14 Inventories

Stock of Raw Materials, Components and stores are valued at lower of cost and net realizable
value. Cost of raw material is determined on average method, excluding GST paid on
purchases. Scrap isvalued at estimated realisable value.

Stock of Materials-in-Process and Finished Goods are valued at lower of cost and net
realizable value. Average cost excludes GST paid on inputs.

Stores and spares are valued at average cost or net realizable value whichever is lower.
Physical verification of inventories is carried out by the Company to cover all the items during
the year.