iii) Provision for product warranties
The Company recognises provision for warranties in respect of the products that it sells. Provisions are
discounted, where necessary, to its present value based on the best estimate required to settle the
obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to
reflect the current best estimates.
iv) Fair value of financial assets and liabilities and investments
The Company measures certain financial assets and liabilities on fair value basis at each balance sheet
date or at the time they are assessed for impairment. Fair value measurement that are based on
significant unobservable inputs (Level 3) requires estimates of operating margin, discount rate, future
growth rate, terminal values, etc. based on management's best estimate about future developments.
v) Defined Benefits and other long term benefits
The cost of the defined benefit plans such as gratuity and leave encashment are determined using
actuarial valuations. An actuarial valuation involves making various assumptions that may differ from
actual developments in the future. These include the determination of the discount rate, future salary
increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature,
a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are
reviewed at each year end.
The principal assumptions are the discount and salary growth rate. The discount rate is based upon the
market yields available on government bonds at the accounting date with a term that matches that of
liabilities. Salary increase rate takes into account inflation, seniority, promotion and other relevant
factors on long-term basis.
vi) Income Taxes
Current Tax
Current tax is determined as the amount of tax payable in respect of taxable income for the year. The
Company's current tax is calculated using tax rates that have been enacted or substantively enacted by
the end of the reporting period.
Deferred tax
Deferred tax is the effect of timing differences between taxable income and accounting income that
originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is
measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet
date. Deferred tax assets are reviewed at each balance sheet date and recognized/derecognized only to
the extent that there is reasonable/virtual certainty, depending on the nature of the timing differences,
that sufficient future taxable income will be available against which such deferred tax assets can be
realized.
Minimum Alternate Tax (MAT)
Minimum Alternate Tax (MAT) credit is recognized as an asset only when and to the extent there is
convincing evidence that the Company will pay normal income tax during the specified period. In the
period in which MAT credit becomes eligible to be recognized as an asset in accordance with the
recommendations contained in guidance note issued by the Institute of Chartered Accountants of India,
the said asset is created by way of a credit to the Statement of profit and loss and shown as MAT credit
entitlement. The Company reviews the same at each balance sheet date and writes down the carrying
amount of MAT credit entitlement to the extent it is not reasonably certain that the Company will pay
normal income tax during the specified period.
Current and Deferred Tax for the Year
Current and Deferred tax are recognized in profit or 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.
vii) Leases
As a Lessee
The Company accounts for assets taken under lease arrangement in the following manner:
The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The
right-of-use asset is initially measured at cost, which comprises the present value of the lease liability
adjusted for any lease payments made at or before the commencement date, plus any initial direct costs
incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the
underlying asset or the site on which it is located, less any lease incentive received.
The right-of-use asset is included within the same line item as that within which the corresponding
underlying asset would be presented if they were owned. The right-of-use asset is disclosed under the
Leasehold Land in the balance sheet. The right of use asset is subsequently depreciated using the
straight-line method from the commencement date to the end of committed lease term. The estimated
useful lives of right-of-use are determined as lease term. In addition, the right-of-use asset is periodically
reduced by impairment losses, if any, and adjusted for certain re-measurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at
the commencement date, discounted using the Company's incremental borrowing rate. Lease payments
included in the measurement of the lease liability comprise the fixed payments, including in substance
fixed payments. The lease liability is measured at amortised cost using the effective interest method. It
is remeasured when there is a change in future lease payments arising from a change in an index or rate,
if there is a change in Company's estimate of the amount expected to be payable under a residual value
guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension
or termination option.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying
amount of the right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use
asset has been reduced to zero.
Short-term leases and leases of low-value assets
The Company has elected not to recognise right-of use assets and lease liabilities for short term leases
that have a lease term of 12 months or less and leases of low value assets. The Company recognises the
lease payments associated with these leases as an expense on a straight- line basis over the lease term.
26. CASH FLOW STATEMENT
Accounting Policies
Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of
transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash
flows from operating, investing and financing activities of the Company are segregated. The Company considers all
highly liquid investments that are readily convertible to known amounts of cash to be cash equivalents.
27. PROPERTY, PLANT AND EQUIPMENT
Leasehold as shown under Property Plant & Equipment comprises of lands situated at Export Promotion Industrial
Park, Phase-II, Baddi where in current manufacturing facilities of company are in operations and land situated near
Bhud Barrier Baddi which will be used for setting up of anchor unit for setting up of new crane pant.
Leasehold land allotted by Industrial Area Development Agency at Baddi, Himachal Pradesh is amortized only on the
cost of lease paid by Company on Straight Line Basis. The management is hopeful that it may sell such land in future
whereby the Company as per terms of lease agreement will be entitled to its portion of Fair Value in the said land
which has been recognised as an asset above at Fair value.
In addition to above the company has been allotted an additional parcel of land measuring 30 acers by government of
Himachal Pradesh. It is situated at Kirpalpur Nalagarh and will be used for development of Auto Park for manufacture
of auto components. Company has paid advance of Rs 1.13 Lacs on signing of agreement to lease for this land. Since
lease deed is yet to be executed, company has shown this capital advance under the head Capital Advance in Note 11.
Accounting Policies
a) Recognition and measurement
The cost of an item of property, plant and equipment comprises its purchase price, including import duties and
other non-refundable taxes or levies, freight, any directly attributable cost of bringing the asset to its working
condition for its intended use and estimated cost of dismantling and restoring onsite; any trade discounts and
rebates are deducted in arriving at the purchase price.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Company and
the cost of the item can be measured reliably.
The carrying amount of any component accounted for as a separate asset is de-recognized when replaced.
All other repairs and maintenance are charged to profit or loss during the reporting period in which they are
incurred.
Advances paid towards acquisition of property, plant and equipment outstanding at each Balance Sheet date
are shown under other non-current assets and cost of assets not ready for intended use before the year end,
are shown as capital work-in-progress.
In the case of leasehold land, any unearned increase not attributable to the lessor and on which Company has
right to sell is recognized as own asset and hence the same was not amortized. Any unearned increase not
attributable to lessor when the asset is sold is valued at Fair Value and no amortization is provided on the same.
b) Subsequent Expenditure
Subsequent expenditure is recognised only if it is probable that the future economic benefits associated with
the expenditure will flow to the Company and the cost of the item can be measured reliably.
c) Depreciation
Depreciation is provided on straight line basis on the original cost/ acquisition cost of assets or other amounts
substituted for cost of property, plant and equipment as per the useful life specified in Part 'C' of Schedule II of
the Act, read with notification dated August 29, 2014 of the Ministry of Corporate Affairs, except for certain
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if
appropriate.
Based on technical evaluation and consequent advice, the management believes that its estimates of useful lives as
given above best represent the period over which management expects to use these assets.
Depreciation on additions/(disposals) is provided on a pro-rata basis i.e., from/ (upto) the date on which asset is ready
or use/ (disposed off).
Depreciation on leasehold land is provided over the lease period and only on leasehold cost paid by the Company.
Any unearned increase not attributable to lessor when the asset is sold is valued at Fair Value and no amortization is
provided on the same.
d) Capital advances
Advances paid towards the acquisition of property, plant and equipment, outstanding at each balance sheet
date is classified as capital advances under “other non-current assets"
e) De-recognition
An item of property, plant and equipment and any significant part initially recognized is de-recognized upon
disposal or when no future economic benefits are expected from its use or disposal. 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 asset) is included in the Standalone Statement of Profit and Loss when the asset is de-recognized.
28. CAPITAL WORK-IN-PROGRESS
Movement in Capital work-in-progress:
• Development Expenditure
Development expenditure including regulatory cost and legal expenses leading to product registration/
market authorisation relating to the new and/or improved product and/or process development is
capitalised only if development costs can be measured reliably, the product or process is technically and
commercially feasible, future economic benefits are probable, and the Company intends to and has
sufficient resources to complete development and to use the asset. The expenditure capitalized includes
the cost of materials, direct labour, overhead costs that are directly attributable to preparing the asset
for its intended use, and directly attributable finance costs (in the same manner as in the case of
property, plant and equipment). Other development expenditure is recognised in the Statement of
Profit and Loss as incurred.
• Software Expenditure
The expenditure incurred is amortized over the estimated economic life of the asset from the year in
which expenditure is incurred.
• Others
The expenditure incurred is amortized over the estimated period of benefit.
Intangible assets that are acquired (including goodwill recognized for business combinations) are
measured initially at cost. After initial recognition, an intangible asset is carried at its cost less
accumulated amortization (for finite lives intangible assets) and any accumulated impairment loss.
Subsequent expenditure is capitalized only when it increases the future economic benefits from the
specific asset to which it relates.
b) Subsequent Expenditure
Subsequent costs are capitalised only when it increases the future economic benefits embodied in the specific
asset to which it relates. All other expenditure on intangible assets is recognised in the Standalone Statement
of Profit and Loss, as incurred.
c) Amortisation
Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using the
straightline method over their estimated useful lives and is generally recognised in depreciation and
amortisation expense in the Standalone Statement of Profit and Loss.
Accounting Policies
a) Recognition and measurement
Intangible assets that are acquired are recognised only if it is probable that the expected future economic
benefits that are attributable to the asset will flow to the Company and the cost of assets can be measured
reliably. The intangible assets are recorded at cost of acquisition including incidental costs related to acquisition
and are carried at cost less accumulated amortisation and impairment losses, if any.
Internally generated goodwill is not recognized as an asset. With regard to other intangible assets:
• Technical Knowhow
The expenditure incurred is amortised over the estimated period of benefit, commencing with the year
of purchase of the technology.
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if
appropriate.
d) Derecognition
An item of intangible assets is derecognised upon disposal or when no future economic benefits are expected
from its use or disposal. 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 asset) is included in the Standalone
Statement of Profit and Loss when the asset is derecognised.
30. CURRENT AND NON-CURRENT CLASSIFICATION
Accounting Policies
The Company presents assets and liabilities in the Balance Sheet based on current/non-current classification.
a) It is expected to be realized or intended to be sold or consumed in normal operating cycle;
b) It is held primarily for the purpose of trading;
c) It is expected to be realized within twelve months after the reporting period; or
d) It is cash and cash equivalent unless restricted from being exchanged or used to settle a liability for at least
twelve months after the reporting period.
The Company classifies all other assets as non-current.
A liability is current when:
a) It is expected to be settled in normal operating cycle:
b) It is held primarily for the purpose of trading;
c) It is due to be settled within twelve months after reporting period; or
d) There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period.
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities respectively.
The operating cycle is the time between the acquisition of assets for processing and their realization in cash
and cash equivalents. The Company has identified twelve months as its operating cycle for the purpose of
current-non-current classification of assets and liabilities.
31. FOREIGN CURRENCY TRANSLATIONS
Accounting Policies
a) Functional and Presentation Currency
These financial statements are presented in Indian Rs. Lacs, which is also the Company's functional currency.
b) Transactions and balances
Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated into the
functional currency at the exchange rate at the reporting date. Exchange differences arising on the settlement
of monetary items or on translating monetary items at rates different from those at which they were translated
on initial recognition during the period or in previous period are recognized in the statement on Profit and loss
account in the period.
c) Initial Recognition
Investments in foreign entities if any, are recorded at the exchange rate prevailing on the date of making the
investment. Transactions denominated in foreign currencies are recorded at the exchange rates prevailing on
the date of the transaction.
d) Conversion
Monetary assets and liabilities denominated in foreign currencies, as at the balance sheet date, not covered by
forward exchange contracts, are translated at year end rates.
e) Exchange Differences
Exchange differences arising on the settlement of monetary items or on reporting company's monetary items
at rates different from those at which they were initially recorded during the year, or reported in the previous
financial statements, are recognized as income or expense in the year in which they arise. The exchange
difference on foreign currency denominated long term borrowings relating to the acquisition of depreciable
capital assets are adjusted in the carrying cost of such assets for current year.
32. INVENTORIES
Accounting Policies
Inventories are valued at lower of cost and net realisable value except scrap, which is valued at net estimated realisable
value.
The Company uses FIFO method to determine cost for all categories of inventories except for goods in transit which is
valued at specifically identified purchase cost and other direct costs incurred. Cost includes all costs of purchase, and
other costs incurred in bringing the inventories to their present location and condition inclusive of non-refundable
(adjustable) taxes wherever applicable.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs necessary to
make the sale. The comparison of cost and net realisable value is made on an item-by-item basis.
33. FINANCIAL INSTRUMENTS
a) Accounting classification
The following table shows the carrying amounts of financial assets and financial liabilities.
b) Fair value hierarchy
The fair value of financial instruments as referred to in note (A) above has been classified into three category
depending on the inputs used in valuation technique. The hierarchy gives the highest priority to quoted price
in active markets for identical assets or liabilities [Level 1 measurements] and lowest priority to unobservable
inputs [Level 3 measurements].
The categories used are 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).
c) Financial Risk Management
The Company is exposed to various types of financial risks in conduct of its business activities. The main risks
to which it is exposed includes market risk, liquidity risk and credit risk.
The Company's Board of Directors has overall responsibility for the establishment and oversight of the
company's risk management framework.
The Company has exposure to the following risks arising from financial instruments: -
- credit risk
- liquidity risk
- market risk
The company primarily focuses on manging financial risks to reduce potential adverse effects of these risks on
its financial performance.
The financial risks are managed by Policy approved by Board of Directors in this regard.
i) Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial
instrument fails to meet its contractual obligations.
The carrying amounts of financial assets represent the maximum credit exposure.
Loans comprise loans given to employees, which would be adjusted against salary of the employees and
hence credit risk associated with such amount is also relatively low. It also includes advance given to its
subsidiary which is showing positive results since its incorporation, hence credit risk associated with it is
also low.
Investments in Shares are measured at mark to market hence, the credit risk associated with these
investments already considered in valuation as on reporting date.
Other financial assets include:
• Security deposits given for operational activities of the Company which will be returned to the
Company as per the contracts with respective parties. The Company monitors the credit ratings of
the counterparties on regular basis. These security deposits carry very minimal credit risk based
on the Company's historical experience of dealing with the parties.
• Balance with revenue authorities comprises of GST input credit that can be claimed in future by
the Company. The revenue authorities here refer to the Government department of Goods and
Service tax. These balances carry very minimal or no credit risk as these are outstanding with the
government authorities.
Expected credit losses for trade receivables
Credit risks related to receivables is managed by Company's management by implementing policies,
procedures and controls relating to customer credit risk management. Outstanding customer
receivables are regularly monitored. An impairment analysis is performed at each reporting date on
trade receivables by using lifetime expected credit losses as per simplified approach wherein the
weighted average loss rates are analysed from the historical trends of defaults relating to each business
segment. Such provision matrix has been considered to recognize lifetime expected credit losses on
trade receivables (other than those where defaults criteria are met).
The Company evaluates the concentration of risk with respect to trade receivables low, since its
customers are from various industries, jurisdictions and operate in independent markets. These
receivables are written off when there is no reasonable expectation of recovery.
There are no receivables which are in default as at year end but the management allows for the
impairment of trade receivables based on its historical experience of collection from its customers.
Expected credit losses for financial assets other than trade receivables
The Company maintains its cash and cash equivalents and bank deposits with reputed banks. The credit
risk on these instruments is limited because the counterparties are bank with high credit ratings assigned
by domestic credit rating agencies. Hence, the credit risk associated with cash and cash equivalent and
bank deposits is relatively low.
ii) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting its obligations associated
with financial liabilities. The investment philosophy of the Company is capital preservation and liquidity
in preference to returns. The Company consistently generates sufficient cash flows from operations and
has access to multiple sources of funding to meet the financial obligations and maintain adequate
liquidity for use. The Company manages liquidity risk by maintaining adequate reserve, banking facilities
and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by
matching the maturity profiles of financial assets and liabilities.
Accounting Policies
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
i) Initial recognition and measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair
value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
Purchases or sales of financial assets that require delivery of assets within a time frame established by
regulation or convention in the marketplace (regular way trades) are recognised on the trade date, i.e. the date
that the Company commits to purchase or sell the asset.
ii) Subsequent Measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
a) Debt instruments at amortised cost
A 'debt instrument' is measured at the amortised cost if the asset is held within a business model whose
objective is to hold assets for collecting contractual cash flows, and 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. The effective interest rate is the rate that exactly discounts
estimated future cash payments or receipts through the expected life of the financial instrument to the
gross carrying amount of the financial asset or the amortised cost of the financial liability. 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.
b) Debt instrument at fair value through Other Comprehensive Income (FVTOCI):
A 'debt instrument' is classified as at the FVTOCI if the objective of the business model is achieved both
by collecting contractual cash flows and selling the financial assets, and the asset's contractual cash
flows represent SPPI.
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting
date at fair value. Fair value movements are recognised in the other comprehensive income (OCI). On
derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified to the
Statement of Profit and Loss. Interest earned whilst holding FVTOCI debt instrument is reported as
interest income using the EIR method.
c) Debt instrument, Derivatives and Equity instruments at fair value through profit or loss FVTPL:
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria
for categorization as at amortised cost or as FVTOCI, is classified as at FVTPL. In addition, at initial
recognition, the Company may irrevocably elect to designate a debt instrument, which otherwise meets
amortised cost or FVTOCI criteria, as at FVTPL (Refer Note 4). However, such an election is allowed only
if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as 'accounting
mismatch').
Debt instruments included within the FVTPL category are measured at fair value with all changes
recognised in the Statement of Profit and Loss.
Equity instruments included within the FVTPL category are measured at fair value with all changes
recognised in the Statement of Profit and Loss.
Dividend income from investments is recognised in statement of profit and loss on the date that the
right to receive payment is established.
d) Equity instrument at fair value through Other comprehensive income FVTOCI:
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 the OCI. There is no recycling of the amounts from
OCI to the Statement of Profit and Loss, even on sale of investment. However, the Company may transfer
the cumulative gain or loss to retained earnings.
iii) Impairment of Financial Assets
The Company recognises loss allowance using the expected credit loss (ECL) model for 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.
iv) Derecognition of Financial Assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is
primarily derecognised (i.e., removed from the Company's balance sheet) when:
a) The rights to receive cash flow from the asset have expired, or
b) The company has transferred its rights to receive cash flow from the asset or has assumed an obligation
to pay the received cash flow in full without material delay to the third party under a 'pass-through'
arrangement and either (a) the Company has transferred substantially all the risk and rewards of the
assets, or (b) the Company has neither transferred nor retained substantially all the risk and rewards of
the asset, but transferred control of the assets.
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 recognises 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.
Write off of financial assets the gross carrying amount of a financial asset is written off when the Company has
no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. The Company
expects no significant recovery from the amount written off.
B) FINANCIAL LIABILITIES
i) Initial Recognition and Measurement
Financial Liabilities are classified, at initial recognition, as financial liabilities at fair value through Profit or Loss
and financial liabilities at amortised cost, as appropriate.
All Financial Liabilities are recognized initially at fair value and, in the case of liabilities subsequently measured
at amortised cost, they are measured net of directly attributable transaction cost. In the case of Financial
Liabilities measured at fair value through Profit or Loss, transactions costs directly attributable to the acquisition
of financial liabilities are recognized immediately in the statement of Profit or Loss.
The company's Financial Liabilities include trade and other payables, loans and borrowings including financial
guarantee contracts and derivative financial instruments.
ii) Subsequent Measurement
a) Financial Liabilities at Fair Value through Profit or Loss:
Financial Liabilities at fair value through profit or loss include financial liabilities held for trading and
financial liabilities designated upon initial recognition as at fair value through the Statement of Profit
and Loss. Financial Liabilities are classified as held for trading if they are incurred for the purpose of
repurchasing in the near term. This category also includes derivative financial instruments entered into
by the Company that are not designated as hedging instruments in hedge relationships as defined by
Ind AS 109. Gains or losses on liabilities held for trading are recognised in the Statement of Profit and
Loss.
b) Financial Liabilities at Amortised Cost:
Financial Liabilities that are not held-for-trading and are not designated as at FVTPL are measured at
amortised cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities
that are subsequently measured at amortised cost are determined based on the effective interest
method. Gains and losses are recognised in the Statement of Profit and Loss when the liabilities are
derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into
account any discount or premium on acquisition and fees or cost that are an integral part of the EIR. The
EIR amortisation is included as finance costs in the Statement of Profit and Loss.
c) Financial Guarantee Contracts:
Financial guarantee contracts issued by the Company are those contracts that require a payment to be
made to reimburse the holder for a loss it incurs because the specified debtor fails to make the payment
when due in accordance with the terms of a debt instrument. Financial guarantee contracts are
recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable
to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of
loss allowance determined as per impairment requirements of Ind AS 109 and the amount initially
recognised less cumulative income recognised in accordance with principles of Ind AS 115.
iii) Derecognition of Financial Liabilities
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 and Loss.
36. INCOME TAX
A. Current Tax
Provision for Current Income Tax has been made as per Income Tax Act, 1961, based on legal opinion obtained
by the Company from its income tax consultant and the statutory auditors have relied upon the said lega
opinion for the purpose of current income tax.
B. Deferred Tax
In compliance with Indian Accounting Standard (Ind AS 12) relating to “Income Tax" issued under Companie
(Indian Accounting Standards) Rules, 2016 as amended up to date, the Company has provided Deferred Ta:
Asset accruing during the year aggregating to Rs. 373.64 Lacs (Previous Year Deferred Tax Liabilities Rs. 89.6i
Lacs) and it has been recognized in the Statement of Profit & Loss. In accordance with Indian Accountin
Standard (Ind AS 12) Deferred Tax Assets and Deferred Tax Liabilities have been set.
37. CASH AND CASH EQUIVALENTS
Accounting Policies
Cash and cash equivalents include cash in hand, demand deposits with banks and other short-term highly liquid
investments with original maturities of three months or less.
For the purpose of cash flow statement, cash and cash equivalent includes cash in hand, in banks, and other short¬
term highly liquid investments with original maturities of three months or less, net of outstanding bank overdrafts that
are repayable on demand and are considered part of the cash management system.
38. SHARE CAPITAL
i) The Company has only one class of equity shares having a par value of Rs. 10 each. Each holder of equity
shares is entitled to one vote per share. In the event of liquidation of the Company, holders of equity shares
will be entitled to receive any of the 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.
ii) The company doesn't have any holding company.
iii) Reconciliation of share capital
* Including Shares issued as bonus shares
Equity Share movement during the 5 years preceding March 31,2025:
1. The company has allotted 86,00,000 equity shares of Rs 10 each at premium of Rs 205 per share under the
fresh issue through Initial Public Offering (IPO) on 3rd January 2025 pursuant to the passing of Board Resolution
passed at Board of Directors meeting dated 3rd January, 2025
2. The company has allotted 54,100 equity shares of Rs. 10 each at a premium of Rs. 175 towards preferential
Allotment/Private Placement on 29th May 2024 pursuant to the passing of an Special Resolution by the
shareholders in Extra Ordinary General Meeting held on 28th May 2024 after taking consent of shareholders.
3. The company has allotted 9,95,900 equity shares of Rs. 10 each at a premium of Rs. 175 towards preferential
Allotment/Private Placement on 24th May 2024 pursuant to the passing of an Special Resolution by the
shareholders in Extra Ordinary General Meeting held on 17th May 2024 after taking consent of shareholders.
4. The company has allotted 2,50,000 equity shares of Rs. 10 each at a premium of Rs. 175 towards preferential
Allotment/Private Placement on 30th April 2024 pursuant to the passing of an Special Resolution by the
shareholders in Extra Ordinary General Meeting held on 18th April 2024 after taking consent of shareholders.
5. The company has allotted 6,00,000 equity shares of Rs. 10 each at a premium of Rs. 175 towards preferential
Allotment/Private Placement on 16th April 2024 pursuant to the passing of an Special Resolution by the
shareholders in Extra Ordinary General Meeting held on 19th March 2024 after taking consent of shareholders.
6. The Company has allotted 1,87,75,800 equity shares as fully paid-up bonus shares to its existing equity
shareholders in the ratio of 1:1 by capitalisation of profits transferred from free reserves amounting to Rs.
1,877.58 lakhs on 22nd August 2023 pursuant to a special resolution passed by the shareholders in Extra
Ordinary General Meeting after taking consent of shareholders.
7. The Company allotted 93,87,900 equity shares as fully paid-up bonus shares by capitalisation of profits
transferred from securities premium account amounting to Rs. 568.00 Lakhs, and general reserve amounting
to Rs. 370.79 Lakhs on 08 th February, 2022, pursuant to an ordinary resolution passed after taking the consent
of shareholders.
40 EMPLOYEE BENEFITS PLAN
a) Defined Benefit Plans
In accordance with the Payment of Gratuity Act, 1972, the Company provides for gratuity, as defined benefit
plan. The gratuity plan provides for a lump sum payment to the employees at the time of separation from the
service on completion of vested year of employment i.e. five years. The liability of gratuity plan is provided
based on actuarial valuation as at the end of each financial year based on which the Company contributes the
ascertained liability to Life Insurance Corporation of India by whom the plan assets are maintained.
These plans typically expose the Company to actuarial risks such as: investment risk, inherent interest rate risk,
longevity risk and salary risk.
Investment Risk
The present value of the defined benefit plan liability (denominated in Indian Rupee) is calculated using a
discount rate which is determined by reference to market yields at the end of the reporting year on government
bonds.
Interest Rate Risk
The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall,
the defined benefit obligation will tend to increase.
Longevity Risk
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the
mortality of plan participants both during and after their employment. An increase in the life expectancy of the
plan participants will increase the plan's liability.
Salary Risk
Higher than expected increases in salary will increase the defined benefit obligation.
The present value of the defined benefit obligation, and the related current service cost, were measured using
the projected unit credit method.
The principal assumptions (demographic and financial) used for the purposes of the actuarial valuations were
as follows:-
c) Defined contribution plans
The Company makes contributions, determined as a specified percentage of employee salaries, in respect of
qualifying employees towards provident fund and employee state insurance scheme which are defined
contribution plans. The Company has no obligations other than to make the specified contributions. The
contributions are charged to the standalone statement of profit and loss as they accrue. The amount recognized
as an expense towards contribution to provident and other funds for the year aggregated to ^145.76 lakhs
(March 31, 2024: ^ 132.55 lakhs)
Accounting Policies
Liabilities in respect of employee benefits to employees are provided for as follows:
i) Current Employee Benefits
a) Short-term employee benefits are measured on an undiscounted basis and expensed as the
related service is provided. A liability is recognised for the amount expected to be paid under short¬
term cash bonus, if the Company has a present legal or constructive obligation to pay this amount
as a result of past service provided by the employee and the obligation can be estimated reliably.
b) Employees' State Insurance ('ESI') is provided on the basis of actual liability accrued and paid to
authorities.
c) The Company has adopted a policy on compensated absences which are both accumulating and
non-accumulating in nature. The expected cost of accumulating compensated absences is
determined by actuarial valuation performed by an independent actuary at each balance sheet
date using projected unit credit method on the additional amount expected to be paid / availed as
a result of the unused entitlement that has accumulated at the balance sheet date. Expense on
non-accumulating compensated absences is recognized in the period in which the absences occur.
d) Expense in respect of other short-term benefits is recognized on the basis of the amount paid or
payable for the period during which services are rendered by the employee.
ii) Post separation employee benefit plan
a) Defined Benefit Plan
Gratuity liability accounted for on the basis of actuarial valuation as per Ind AS 19 'Employee
Benefits'. Liability recognized in the Standalone Balance Sheet in respect of gratuity is the present
value of the defined benefit obligation at the end of each reporting period less the fair value of
plan assets. The defined benefit obligation is calculated annually by an independent actuary using
the projected unit credit method. The present value of defined benefit is determined by
discounting the estimated future cash outflows by reference to market yield at the end of each
reporting period on government bonds that have terms approximate to the terms of the related
obligation. The net interest cost is calculated by applying the discount rate to the net balance of
the defined benefit obligation and the fair value of plan assets. This cost is included in employee
benefit expense in the Standalone Statement of Profit and Loss.
Actuarial gain / loss pertaining to gratuity, post separation benefits and PF trust are accounted for
as OCI. All remaining components of costs are accounted for in Standalone Statement of Profit and
Loss.
b) Defined contribution plan
A defined contribution plan is a post-employment benefit plan where the Company legal or
constructive obligation is limited to the amount that it contributes to a separate legal entity.
The Company makes specified monthly contributions towards Government administered
provident fund scheme.
Contribution to Provident Fund is made in accordance with provision of Employees Provident Fund
Act, 1952, and is recognized as an expense in the statement of Profit and Loss in the period in
which the contribution is due.
DEFERRED INCOME
Accounting Policies
Government grants are not recognised until there is reasonable assurance that the Company will comply with the
conditions attached to them and that the grants will be received.
Government grants are recognised in the Statement of Profit and Loss on a systematic basis over the years in which
the Company recognises as expenses the related costs for which the grants are intended to compensate or when
performance obligations are met.
Government grants, whose primary condition is that the Company should purchase, construct or otherwise acquire
non-current assets and nonmonetary grants are recognised and disclosed as 'deferred income' under non-current
liability in the Balance Sheet and transferred to the Statement of Profit and Loss on a systematic and rational basis
over the useful lives of the related assets.
Amount due to entities covered under micro enterprises and small enterprises as defined in the Micro, Small, Medium
Enterprises Development Act, 2006, have been identified on the basis of information available with the Company. The
total amount due as on 31.03.2025 was 280.87 Lacs (Previous year 838.74 Lacs) and interest on late payment was Nil
(Previous year Nil).
43 PROVISIONS
Accounting Policies
A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that
can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the
obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks
specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised
as a finance cost.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation
at reporting date, taking into account the risks and uncertainties surrounding the obligation. When some or all of the
economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is
recognised as an asset if it is virtually certain that reimbursement will be received, and the amount of the receivable
can be measured reliably.
A contract is considered to be onerous when the expected economic benefits to be derived by the Company from the
contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision for an
onerous contract is measured at the present value of the lower of the expected cost of terminating the contract and
the expected net cost of continuing with the contract. Before such a provision is made, the Company recognises any
impairment loss on the assets associated with that contract.
Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer
probable that the outflow of resources would be required to settle the obligation, the provision is reversed.
Warranties
A provision for warranties is recognised when the underlying products or services are sold, based on historical
warranty data and a weighting of possible outcomes against their associated probabilities.
44 SEGMENT INFORMATION
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating
Decision Maker (“CODM"). The board of directors assess the financial performance and position of the Company, and
makes strategic decisions and therefore the board would be the chief operating decision maker. Revenues, expenses,
assets and liabilities, which are common to the enterprise as a whole and are not allocable to segments on a reasonable
basis, have been treated as “unallocated revenues/ expenses/ assets/ liabilities", as the case may be.
The Company has determined following reportable segments based on the information reviewed by the Company's
management:
i) Tractor: It includes sale of tractors, its spare parts and scrap sales generated during manufacturing process.
ii) Crane: It includes sale of cranes.
iii) Others: These include sale of casting division scrap.
Each of these operating segments is managed separately as each requires different technologies, marketing
approaches and other resources.
For management purposes, the Company uses the same measurement policies as those used in its financial
statements. In addition, corporate assets which are not directly attributable to the business activities of any operating
segment are not allocated to a segment.
c) Revenue from major customers:
The Company is not reliant on revenues on transactions with any single external customer and does not receive 10%
or more of its revenues from transactions with any single external customer.
Notes:
i. Operating segments have been identified by the company taking into account nature of services, associated
risks and returns and internal reporting system that reflects the manner in which operating results are regularly
reviewed by the Chief Operating Decision Maker for purpose of making decisions on resources to be allocated
to such segments and assess their performance.
ii. Segment revenue, segment results, segment assets and segment liabilities include the respective amount
identifiable for each operating segment.
45 BORROWING COSTS
Accounting Policies
Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of
borrowings.
Borrowing cost which are not relatable to the qualifying asset are recognized as an expense in the period in which they
are incurred. Borrowing cost on specific loans, used on acquisition or construction of fixed assets, which necessarily
take a substantial period of time to be ready for their intended use, are capitalised. Other borrowing costs are
recognized as an expense in the period in which they are incurred.
Comments for variations above 25%, if any:
1. The current ratio has improved as a result of a reduction in current liabilities, primarily due to the repayment of
working capital limits during the financial year.
2. The debt-equity ratio has declined following the company's capital infusion through the allotment of 19,00,000 equity
shares of ^10 each at a premium of ^175 via preferential allotment/private placement, and the issuance of 86,00,000
equity shares of ^10 each at a premium of ^205 through an Initial Public Offering (IPO).
3. Trade Payable ratio has improved due to reduction in trade payable at the end of financial year.
4. Net Capital Turnover Ratio has declined owing to a reduction in current liabilities resulting from the repayment of
working capital limits during the year.
5. Net Profit has increased due to a lower tax expense, attributed to deferred tax adjustments during the current financial
year.
56 INITIAL PUBLIC OFFER
During the year ended March 31st 2024, the company completed its initial public offer (IPO) of 1,21,00,000 equity
shares of face value of Rs. 10 each at an issue price of Rs. 215 each (including a share premium of Rs. 205 per share).
The issue comprised of fresh issue of 86,00,000 equity shares aggregating to Rs. 18,490.00 Lakhs and offer for sale of
35,00,000 equity shares aggregating to Rs. 7,525.00 Lakhs. The equity shares of the Company were listed on the
National Stock Exchange of India Limited (NSE) and BSE Limited (BSE) on January 07, 2025.
Consequent to allotment of fresh issue, the paid-up equity share capital of the Company stands increased from
3,945.16 lakhs consisting of 3,94,51,600 equity shares of Rs. 10 each to Rs. 4,805.16 lakhs.
57 The company has reclassified previous year's figures to confirm to current year's classification. The company's
Financial Statements are presented in Indian Rupees and all values are rounded to the nearest Lacs ('00000') or two
decimals' places thereof, except when otherwise indicated.
As per our report of even date
For Indo Farm Equipment Limited For DEEPAK JINDAL & CO.
CIN: L29219CH1994PLC015132 Chartered Accountants
Firm Regn. No.: 023023N
R.S. Khadwalia Anshul Khadwalia
Chairman cum Managing Director Director
(DIN:00062154) (DIN:05243344)
Navpreet Kaur Deepak Jindal
Varun Sharma Company Secretary (Partner)
Chief Financial Officer PAN:ANMPK5801G M. No.: 514745
PAN:FNHPS7649L UDIN.: 25514745BMOEWQ6296
Gurvinder Singh Chadha
General Manager
(PAN :AH EPC6779P)
Place: Chandigarh Place: Chandigarh
Date: 28-05-2025 Date: 28-05-2025
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