1.1 Company Overview
Indo Farm Equipment Limited (the company) is a public limited company incorporated under the provisions of
the Companies Act, 1956 on 5th October 1994 and commenced its operations of manufacture of Tractor and its
components in the year 2000.
1.2 Basis of Preparation of Financial Statements
i) Statement of Compliance
These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS)
as per the Companies (Indian Accounting Standards) Rules, 2015 as amended notified under Section 133
of Companies Act, 2013, (“the Act") and other relevant provisions of the Act. All the amounts included
in the financial statements are reported in lakhs of Indian Rs. and are rounded off to two decimals,
except per share data.
Accounting policies have been consistently applied except where a newly issued accounting standard is
initially adopted or a revision to an existing accounting standard requires a change in the accounting
policy hitherto in use. The material accounting policies information used in preparation of audited
standalone financial statements have been discussed in the respective notes.
The financial statements were approved by the company's Board of Directors and authorized for issue
on 28th May 2025.
ii) Use of estimates and judgements
The preparation of financial statements in conformity with Ind AS 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 at the date of these financial statements
and the reported amounts of revenues and expenses for the years presented. Actual results may differ
from these estimates.
Estimates and underlying assumptions are reviewed at each balance sheet date. Revisions to accounting
estimates are recognized in the year in which the estimate is revised and future years affected.
Key sources of estimation uncertainty at the date of financial statements, which may cause a material
adjustment to the carrying amounts of assets and liabilities within the next financial year, is in respect
of useful lives of property, plant and equipment, intangible assets, provision for product warranties, fair
value of financial assets/liabilities and impairment of investments.
The application of accounting policies that require critical accounting estimates involving complex and
subjective judgements and the use of assumption in these financial statements have been disclosed in
Note - 1.3 below.
iii) Measurement of Fair Values
A number of the accounting policies and disclosures require measurement of fair values, for both
financial and non-financial assets and liabilities.
Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the
valuation techniques as follows:
-----Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
-----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).
-----Level 3: inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
The Company has an established control framework with respect to the measurement of fair values.
This includes a finance team that has overall responsibility for overseeing all significant fair value
measurements, including Level 3 fair values.
When measuring the fair value of an asset or a liability, the Company uses observable market data as far
as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels
of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same
level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.
The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting
period during which the change has occurred.
1.3 Critical Accounting Estimates and Judgements
i) Revenue Recognition
Revenue is recognized to the extent that it can be reliably measured and is probable that the economic
benefits will flow to the Company.
a) Sale of Goods:
Revenue from sale of goods is recognized when the significant risks and rewards of ownership of
the goods are transferred to the customer and is stated net of sales returns and sales tax but
including export benefits accruing on export sales.
Revenue is also recognised for goods sold but not dispatched, where the property in such goods is
transferred from the seller to the buyers and where dispatches could not be made on account of
practical difficulties at the buyers' end.
b) Interest:
Interest is recognized on a time proportion basis taking into account the amount of underlying
outstanding and the rate applicable.
c) Dividends:
Dividend from investments is recognized in the Profit and Loss Account when the right to receive
payment is established.
d) Export Benefits:
Export benefits and other benefits are accounted for on accrual basis.
ii) Useful lives of property, plant and equipment and intangible assets
The Company reviews the useful lives of property, plant and equipment and intangible assets at the end
of each reporting period. This reassessment may result in change in depreciation and amortisation
expense in future periods.
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