p) Provisions
A provision is recognised if, as a result of a past event,
the Company has a present legal or constructive
obligation, it is probable that an outflow of resources
will be required to settle the obligation and the amount
can be reliably estimated. Provisions are measured at
the present value of best estimate of the expenditure
required to settle the present obligation at the balance
sheet date.
The discount rate used to determine the present value is
a pre-tax rate that reflects current market assessments
of the time value of money and the risks specific to
the liability. The increase in the provision due to the
passage of time is recognised as interest expense.
Expected future operating losses are not provided for.
Contingencies
Contingent liability is disclosed for:
• Possible obligations which will be confirmed only
by future events not wholly within the control of
the Company; or
• 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. Contingent assets are not recognised.
However, when inflow of economic benefits is
probable, related asset is disclosed.
q) Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily
takes a substantial period of time to get ready for its
intended use or sale are capitalised as part of the cost
of the asset. All other borrowing costs are expensed
in the period in which they occur. Borrowing costs
consist of interest and other costs that an entity incurs
in connection with the borrowing of funds. Borrowing
cost also includes exchange differences to the
extent regarded as an adjustment to the borrowing
costs. Eligible transaction/ ancillary costs incurred in
connection with the arrangement of borrowings are
adjusted with the proceeds of the borrowings.
r) Rounding of amounts
All amounts disclosed in the financial statements
and notes have been rounded off to the nearest
millions as per the requirement of Schedule III, unless
otherwise stated.
s) Current versus non-current classification
The Company presents assets and liabilities in
the Balance Sheet based on the current/non-
current classification.
An asset is treated as current when:
• It is expected to be realised or intended to be sold
or consumed in normal operating cycle;
• It is held primarily for the purpose of trading;
• It is expected to be realised within twelve months
after the reporting period; or
• It is cash or cash equivalent unless restricted from
being exchanged or used to settle a liability for at
least twelve months after the reporting period.
Current assets include the current portion of non¬
current financial assets. The Company classifies all
other assets as non-current.
A liability is treated current when:
• It is expected to be settled in normal operating cycle;
• It is held primarily for the purpose of trading;
• It is due to be settled within twelve months after
the reporting period; or
• There is no unconditional right to defer the
settlement of the liability for at least twelve months
after the reporting period.
Current liabilities include current portion of non-current
financial liabilities. The Company classifies all other
liabilities as non-current.
The operating cycle is the time between the acquisition
of assets for processing and their realisation 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.
2.3 Significant accounting judgements, estimates and
assumptions
The preparation of financial statements in conformity
with Ind AS requires management to make judgements,
estimates and assumptions that affect the application
of accounting policies and the reported amount of
assets, liabilities, income, expenses and disclosures
of contingent assets and liabilities at the date of these
financial statements andthe reported amount of revenues
and expenses for the years presented. Actual results
may differ from the estimates. Estimates and underlying
assumptions are reviewed at each balance sheet date.
Revisions to accounting estimates are recognised
in the period in which the estimates are revised and
future periods affected. In particular, information about
significant areas of estimation uncertainty and critical
judgements in applying accounting policies that have
the most significant effect on the amounts recognised
in the financial statements includes:
a) Provisions
At each balance sheet date basis the management
judgment, changes in facts and legal aspects, the
Company assesses the requirement of provisions
against the outstanding contingent liabilities. However,
the actual future outcome may be different from
this judgement.
b) Contingencies
Contingent liabilities may arise from the ordinary course
of business in relation to claims against the Company,
including legal, contractual and other claims. By their
nature, contingencies will be resolved only when one or
more uncertain future events occur or fail to occur. The
assessment of the existence, and potential quantum,
of contingencies inherently involves the exercise
of significant judgments and the use of estimates
regarding the outcome of future events.
c) Recognition of deferred tax assets
The extent to which deferred tax assets can be
recognised is based on an assessment of the probability
that future taxable income will be available against
which the deductible temporary differences can be
utilised. In addition, significant judgement is required in
assessing the impact of any legal or economic limits or
uncertainties in various tax jurisdictions.
d) Useful lives of tangible/intangible assets
The Company reviews its estimate of the useful lives
of tangible/intangible assets at each reporting date,
based on the expected utility of the assets.
e) Defined benefit obligation
The cost of the defined benefit plan and other post¬
employment benefits and the present value of such
obligation 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, mortality rates and future
pension increases. In view of 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
reporting date.
f) Impairment of non-financial assets and goodwill
In assessing impairment, Company estimates the
recoverable amount of each asset or cash-generating
units based on expected future cash flows and uses an
interest rate to discount them. Estimation uncertainty
relates to assumptions about future operating results
and the determination of a suitable discount rate.
g) Fair value measurement of financial instruments
When the fair values of financial assets and financial
liabilities recorded in the Balance Sheet cannot be
measured based on quoted prices in active markets,
their fair value is measured using valuation techniques
including the DCF model. The inputs to these models
are taken from observable markets where possible,
but where this is not feasible, a degree of judgment
is required in establishing fair values. Judgements
include considerations of inputs such as liquidity risk,
credit risk and volatility. Changes in assumptions about
these factors could affect the reported fair value of
financial instruments.
h) Measurement of share-based payments;
The fair value of employee stock options is measured
using the Black-Scholes model. Measurement inputs
include share price on grant date, exercise price of
the instrument, expected volatility (based on weighted
average historical volatility), expected life of the
instrument (based on expected exercise behaviour),
expected dividends, and the risk free interest rate
(based on government bonds)
i) Capitalisation of internally developed intangible
assets
The Company applies judgement in determining at
what point the recognition criteria under Ind AS 38
is satisfied with respect to technology development
expenditure being incurred.
2.4 Application of new and revised Indian Accounting
Standard (Ind AS)
For the year ended 31st March 2025, MCA has not
notified any new standards applicable to the Company.
Recent Indian Accounting Standards (Ind AS)
The Ministry of Corporate Affairs vide notification
dated 31st March 2023 notified the Companies (Indian
Accounting Standards) Amendment Rules, 2023, which
amended certain accounting standards (see below),
and are effective 1st April 2024:
1. Amendments to Ind AS 116 - Lease liability in a
sale and leaseback
2. Introduction of Ind AS 117
3. The amendments to Ind AS 21 The Effects of
Changes in Foreign Exchange Rates specify
how an entity should assess whether a currency
is exchangeable and how it should determine
a spot exchange rate when exchangeability is
lacking. The amendments also require disclosure
of information that enables users of its financial
statements to understand how the currency not
being exchangeable into the other currency
affects, or is expected to affect, the entity’s financial
performance, financial position and cash flows.
The Company has reviewed the new pronouncements
and based on its evaluation has determined that these
amendments do not have a significant impact on the
Company’s Standalone Financial Statements.
Notes:
a) Indian Rupee loans repayable on demand from banks
Above working capital loan is secured by first pari passu charge on entire current assets of the Company and
second pari passu charge on the entire moveable fixed assets, present and future, of the company and immovable
fixed assets situated at Gurgaon only.
Repayment and rate of interest:
i) Cash credit as on 31st March 2024 was amounting to INR 9.23 million was repayable on demand carries interest @
floating rate linked with T-bill current year effective rate was 9.15 % p.a.
ii) EPC as on 31st March 2024 was amounting to 1,728.72 million was repayable on demand carries interest @ floating
rate linked with T-bill current year effective rate was the range of 5.18% - 5.54% p.a.
b) Indian Rupee loans repayable on demand from NBFC
The Company enters into factoring arrangements with recourse for its trade receivables with Tata Capital Financial
Services Limited. As at 31 March 2024 the Company had factoring facilities in place for trade receivables amounting
to INR 105.89 million were realised by using these facilities against which the monies were yet to be collected by
the financial institution from the Company’s customer. The Company does not derecognise the receivables from
its books since, it does not transfer substantially all the risks and rewards of ownership of the financial asset
(i.e. receivables) and a corresponding liability towards the banks is recognised in respect of aforementioned
amounts so realised by the Company from the banks but yet to be collected by the financial institution from the
Company’s customers.
All the loans were repaid during the year.
Valuation technique to determine fair value
Cash and cash equivalents, other bank balances, trade receivables, current investment, other current financial assets, trade
payables, current borrowings and other current financial liabilities approximate their carrying amounts largely due to the
short-term maturities of these instruments. The fair value of the financial assets and liabilities is the amount at which the
instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. For
valuation techniqe to determine fair value of derivative financial assets refer note 48.
(b) Fair value hierarchy
To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its
financial assets/liabilities into the three levels prescribed under the accounting standard. An explanation of each level
follows underneath.
(a) Credit Risk Management
(i) Credit risk rating
The Company assesses and manages credit risk of financial assets based on following categories arrived on the basis
of assumptions, inputs and factors specific to the class of financial assets.
a) Low credit risk
b) Moderate credit risk
c) High credit risk
Based on business environment in which the Company operates, a default on a financial asset is considered when the
counter party fails to make payments within the agreed time period as per contract. Loss rates reflecting defaults are
based on actual credit loss experience and considering differences between current and historical economic conditions.
Assets are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or a
litigation decided against the Company. The Company continues to engage with parties whose balances are written off
and attempts to enforce repayment. Recoveries made are recognised in statement of profit and loss.
There are no transfers amongst levels during the year
Level 1: It includes financial instruments measured using quoted prices in active markets for identical assets or liabilities.
Level 2: Directly (i.e. as prices) or indirectly (i.e. derived from prices) observable market inputs other than Level 1
inputs; and
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in
level 3.
33 FINANCIAL RISK MANAGEMENT
The Company’s principal financial liabilities comprise loans and borrowings, trade payables and other financial liabilities.
The main purpose of these financial liabilities is to provide finance to the Company to support its operations. The
Company’s principal financial assets include loans, trade and other receivables; cash and bank balances etc. that derive
directly from its operations.
The Company’s activities expose it to the financial risk of market risk, credit risk and liquidity risk . The Company enters
into a certain derivative financial instrument to manage its exposure to foreign currency. There have been no major
changes to the Company’s exposure to market risk or the manner in which it manages and measures the risk in recent
past. The Company’s senior management oversees the management of these risks. The Company’s senior management
ensures that the Company’s financial risk activities are governed by appropriate policies and procedures and that
financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives.
(A) Credit risk
Credit risk is the risk that a customer or counterparty to a financial instrument fails to discharge an obligation to the
Company. The Company’s maximum exposure to credit risk is limited to the carrying amount of following types of
financial assets.
- Cash and cash equivalents
- Trade receivables
- Loans carried at amortised cost, and
- Other financial assets
- Derivative financial assets
Cash & cash equivalents and bank deposits
Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated banks and
diversifying bank deposits and accounts in different banks across the country. In respect of derivative assets, the credit
risk is considered negligible as counterparties are banks.
Trade receivables
To mitigate the credit risk related to trade receivables, the Company closely monitors the credit-worthiness of the trade
receivables through internal systems that are configured to define credit limits of customers, thereby, limiting the credit
risk to pre-calculated amounts. The Company assesses increase in credit risk on an ongoing basis for amounts receivable
that become past due and default is considered to have occurred when amounts receivable become past due.
(b) Expected credit losses for financial assets (other than trade receivables)
i) Financial assets (other than trade receivables)
Company provides for expected credit losses on loans and advances other than trade receivables by assessing
individual financial instruments for expectation of any credit losses.
For loans comprising security deposits paid - Credit risk is considered low because the Company is in possession of the
underlying asset.
For other financial assets - Credit risk is evaluated based on Company knowledge of the Credit worthiness of those
parties and loss allowance is measured. Since this category includes loans and receivables of varied natures and
purpose, there is no trend that the Company can draw to apply consistently to entire population. For such financial
assets, the Company policy is to provide for 12 month expected credit losses upon initial recognition and provide for
lifetime expected credit losses upon significant increase in credit risk. The Company does not have any expected loss
based impairment recognised on such assets.
ii) Expected credit loss for trade receivables under simplified approach
The Company recognises lifetime expected credit losses on trade receivables using a simplified approach. In accordance
with Ind AS 109, the Company uses expected credit loss model to assess the impairment loss. The Company uses
a provision matrix to compute the expected credit loss allowance of trade receivables. The provision matrix takes
into account available external and internal credit risk factors such as default risk of industry, historical experience for
customers etc. However, the allowance for lifetime expected credit loss on customer balances for the year ended 31st
March 2025, and for the year ended 31st March 2024 is insignificant. Considering the nature of trade receivables, and
entity’s history of credit with those receivables, entity has rebutted the presumption of having significant increases in
credit risk since initial recognition for financial assets which are more than 30 days past due.
(C) Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
market prices. Market risk comprises three types of risk: currency rate risk, interest rate risk and other price risks, such as
equity price risk and commodity price risk. Financial instruments affected by market risks include loans and borrowings,
deposits and foreign currency receivables and payables. The sensitivity of the relevant profit and loss item is the effect
of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities.
(i) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Company is exposed to risk of changes in borrowing rates. The Board continuously
monitors the prevailing interest rates in the market.
(B) Liquidity risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at
reasonable price. The Company’s objective is to at all times maintain optimum levels of liquidity to meet its cash and
liquidity requirements. The Company closely monitors its liquidity position and maintains adequate source of financing
through the use of short term bank deposits, demand loans and cash credit facility. Processes and policies related to
such risks are overseen by senior management.
(i) Maturities of financial liabilities
The table below provides details regarding the non-derivative financial liabilities have contractual undiscounted
maturities as summarised below:
(ii) Foreign currency risk
The company operates internationally and is exposed to foreign exchange risk arising from foreign currency transactions,
primarily with respect to the trade receivables and payables. Foreign exchange risk arises from future commercial
transactions and recognised assets and liabilities denominated in a currency that is not the Company’s functional
currency (INR ) also refer note 48.
34 CAPITAL MANAGEMENT
For the purposes of the Company’s capital management, capital includes equity attributable to the equity holders of the
Company and all other equity reserves. The primary objective of the Company’s capital management is to ensure that
it maintains an efficient capital structure and maximise shareholder value. The Company manages its capital structure
and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To
maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders or issue new
shares. The Company is not subject to any externally imposed capital requirements.
The Company monitors capital using net debt to equity ratio, which is net debt (as reduced by cash and cash equivalent)
divided by total equity.
XI The average duration of the defined benefit plan obligation at the end of the reporting period is 5-6.20 years (31st March
2024: 5-6.23 years)
XII The estimates of rate of escalation in salary considered in actuarial valuation are after taking into account inflation,
seniority, promotion and other relevant factors including supply and demand in the employment market. The above
information is as certified by the Actuary. The sensitivity analysis above have been determined based on a method that
extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at
the end of the reporting period. The expected contribution to the plan is expected to be similar to that of current year.
XIII Plan is governed by the Payment of Gratuity Act, 1972. Under the Gratuity Act, employees are entitled to specific benefit
at the time of retirement or termination of the employment on completion of five years or death while in employement.
The level of benefit provided depends on the member’s length of service and salary at the time of retirement/
termination age.
The Board of the Company in its meeting held on 10th February 2025 has approved execution of an agreement for purchase
of plot of land measuring 33,423 (thirty three thousand four hundred twenty three) square yards equivalent to 27,945.89
(twenty seven thousand nine hundred forty five point eight eight five) square meters forming part of the industrial plot
bearing no. 115 and half of plot no. 114 located in Sector 24, Faridabad, Haryana from Escort Kubota, adjacent to the land of
Railway Equipment Division (“RED”) business of Escorts Kubota, for total consideration of INR 1100 million, which may help
in its future expansion plans.
43 LEASES
i) The Company has entered into lease arrangements for land, building and plant and machinery that are renewable on a
periodic basis with approval of both lessor and lessee.
ii) The Company does not have any lease commitments towards variable rent as per the contract.
iii) Each lease generally imposes a restriction that, unless there is a contractual right for the Company to sublet the asset
to another party, the right-of-use asset can only be used by the Company. The Company is prohibited from selling or
pledging the underlying leased assets as security. For leases over land and building the Company must keep those
properties in a good state of repair and return the properties in their original condition, except for normal wear and tear,
at the end of the lease. Further, the Company shall insure items owned by it and incur maintenance fees on such items
in accordance with the lease contracts.
The Company has elected not to recognise a lease liability for short-term leases (leases with an expected term of 12
months or less) and for leases of low value assets.
The Company determines the leases term as either the non-cancellable period of the lease and any additional periods
when there is an enforceable option to extend the lease and it is reasonably certain that the Company will extend the
term, or a lease period in which it is reasonably certain that the Company will not exercise a right to terminate. The lease
term is reassessed if there is a significant change in circumstances.
44 REVENUE FROM CONTRACTS WITH CUSTOMERS
(a) Disaggregation of revenue
The Company has performed a disaggregated analysis of revenues considering the nature, amount, timing and
uncertainty of revenues. This includes disclosure of revenues by geography and timing of recognition.
a) Share-based payments
Employee Stock Option Scheme Sona BLW Precision Forging Limited- 2020 (‘Sona BLW ESOP Plan-2020’) was approved
by the shareholders of the Sona BLW Precision Forgings Limited on 30th September 2020. The maximum number of
Options granted under the Sona BLW ESOP Plan-2020 shall be 3,342,672 Options which shall upon exercise convert
into maximum 3,342,672 Shares. The Sona BLW ESOP Plan entitles employees of the Company to excercise shares
in the Company at the stipulated exercise price, subject to compliance with vesting conditions. A description of the
share-based payment arrangement of the Company is given below:
Stock options will be settled by issue of equity shares of the Company. As per the plan, holders of vested options are
entitled to purchase one equity share for every option at an exercise price of INR 38.34 per option which against the fair
market value of INR 79.17 per share determined on the date of grant, i.e. 1st October 2020.
The total amount to be expensed over the vesting period is determined by reference to the fair value of the options
granted. The fair values of options granted were determined using Black-Scholes option pricing model that takes into
account factors specific to the share incentive plans along with other external inputs. Expected volatility has been
determined by reference to the average volatility for comparable companies for corresponding option term. Total
Company share-based payment to employees amounting INR Nil for the year ended 31st March 2025 ( INR 8.70 million
for the year ended 31st March 2024) is recognised in the statement of profit and loss of the Companny pertaining
to options issued to employees of the Company . The following principal assumptions were used in the valuation:
Expected volatility was determined by comparison with peer companies, as the Company’s shares were not publicly
traded at that time. The expected option life and average expected period to exercise, is assumed to be equal to the
contractual maturity of the option. Dividend yield is taken as 1.6% based on the the expected dividend payout by the
management. The risk-free rate is the rate associated with a risk-free security with the same maturity as the option.
At each balance sheet date, the Company reviewed its estimates of the number of options that are expected to vest.
The Company recognises the impact of the revision to original estimates, if any, in the profit or loss in statement of
comprehensive income, with a corresponding adjustment to ‘retained earnings’ in equity. The fair value of option using
Black Scholes model and the inputs used for the valuation for options that have been granted during the reporting
period are summarised as follows:
(b) Share-based payments
Employee Stock Option Scheme Sona BLW Precision Forging Limited- 2023 (‘Sona BLW ESOP Plan-2023’) was approved
by the shareholders of the Sona BLW Precision Forgings Limited on 19th July 2023. The maximum number of Options
to be granted under the Sona BLW ESOP Plan-2023 shall be 7,610,402 Options which shall upon exercise shall convert
into maximum 7,610,402 Shares. The Sona BLW ESOP Plan - 2023 entitles employees of the Company to excercise
shares in the Company at the stipulated exercise price, subject to compliance with vesting conditions. A description of
the Share-based payment arrangement of the Company is given below:
Stock options will be settled by issue of equity shares of the Company. As per the plan, holders of vested options are
entitled to purchase one equity share for every option at an exercise price of INR 508.95/ INR 641.60 per option against
the fair market value of INR 508.95/INR 641.60 per share determined on the date of grant, i.e. 25th October 2023 and
15th March 2024 respectively.
The total amount to be expensed over the vesting period is determined by reference to the fair value of the options
granted. The fair values of options granted were determined using Black-Scholes option pricing model that takes into
account factors specific to the share incentive plans along with other external inputs. Expected volatility has been
determined by reference to the average volatility for comparable companies for corresponding option term. Total
Company share-based payment to employees amounting INR 269.27 million (excluding INR 18.42 million capitalised)
for the year ended 31st March 2025 (31st March 2024 INR 138.31 million (excluding INR 11.57 million capitalised))
is recognised in the statement of profit and loss of the Companny pertaining to options issued to employees of the
Company . The following principal assumptions were used in the valuation: Expected volatility was determined basis
50% weight to Sona BLW Precision Forgings Limited and a balance of 50% weight equally to the other comparable
companies. The expected option life and average expected period to exercise, is assumed to be equal to the contractual
maturity of the option. Dividend yield is taken as 0.55% and 0.48% based on the the expected dividend payout by the
management. The risk-free rate is the rate associated with a risk-free security with the same maturity as the option.
At each balance sheet date, the Company reviewed its estimates of the number of options that are expected to vest.
The Company recognises the impact of the revision to original estimates, if any, in the profit or loss in statement of
comprehensive income, with a corresponding adjustment to ‘retained earnings’ in equity. The fair value of option using
Black Scholes model and the inputs used for the valuation for options that have been granted during the reporting
period are summarised as follows:
46 (a) Intangible assets impairment testing
Goodwill
As per note no. 4 , Company has recognised an amount of INR 1,582.24 million as Goodwill including assembled
workforce and future customers. Annual test for impairment of goodwill was carried out as at 31st March 2025 and
31st March 2024, details of which are outlined below. The outcome of the test indicated that the value in use of business
was higher than its carrying value in those CGU’s (Cash generating unit). Accordingly, no impairment charge has been
recognised in the standalone statement of profit and loss.
The recoverable amount of each CGU was determined based on value-in-use calculations using a discount rate ranging
between 13.00%-14.50% reflecting current market assessments of the time value of money and risks specific to the
business, covering a detailed five-year forecast , followed by an extrapolation of expected cash flows using a terminal
growth rate of approximately 3.5% - 4.5% as determined by the management.
Brand
On 1st August 2018, the Company acquired SONA Intellectual property rights (“”Sona IP””) and all rights thereto from
SONA Management Services Limited (“”SMSL””) having indefinite useful lives, pursuant to which the company had
recognised brand amounting to INR 687.40 million. This was due to the expectation of permanent use of acquired
brand. The Company tests on an annual basis whether the brand is impaired based on the value-in-use concept of
the entity basis certain inputs outlined below. In March 2025 and March 2024, there was no impairment identified for
the brand.
The recoverable amount of the entity was determined on the basis of value in use based on the present value of the
expected future cash flows. This calculation uses cash flow projections based on the financial planning covering a five-
year period in total. The management believes that any reasonable possible changes in the key assumptions would not
cause the Brand’s carrying amount to exceed its recoverable amount.
The recoverable amount of the brand was determined based on value-in-use calculations for the company using a
discount rate ranging between 13%-14% reflecting current market assessments of the time value of money and risks
specific to the business as at the respective dates, covering a detailed five-year forecast , followed by an extrapolation
of expected cash flows using a terminal growth rate ranging between 4%-5% as determined by the management.
Intangible assets under development
In accordance with IND AS 36 - “Impairment of Assets”, the Company has carried out commercial feasibility assessment
of intangibles under development (‘IAUD’) amounting to INR 627.11 million (March 31st 2024: INR 453.29 million) and has
not identified any impairment which is required to be recorded in the financial statements. (refer note 5)
Growth rates
The growth rates used are in line with the growth rate of the industry and the countries in which the entities operates
and are consistent with the internal/external sources of information.
Discount rates
The discount rates take into the consideration market risk and specific risk factors of the entity. The cash flow projections
are based on the forecasts made by the management.
Terminal growth rate
The terminal growth rate is the constant rate at which an entity is expected to grow at the end of the last forecasted cash
flow period in a discounted cash flow model and goes into perpetuity.
Sensitivity
The management believes that any reasonable possible changes in the key assumptions would not cause the cash
generating unit’s carrying amount to exceed its recoverable amount.
(b) Investment in Novelic d.o.o. Beograd Zvezdara
During the previous year, the Company had acquired 54% stake (representing 54% voting interest) of Novelic d.o.o., world’s
leading self-sustaining provider of mmWave radar sensors, perception solutions, and full stack embedded systems on
6th September 2023 for its unique & patented mmWave radar technology which is the best solution for in-cabin sensing.
As on 31st March 2025 amount of INR 728.44 million (31st March 2024: INR 1397.56 million) payable under a deferred
payment mechanism to founders of Novelic d.o.o. and Novelic d.o.o., as per the Share purchase agreement and
shareholder agreement.
(c) Impairment of Investment in Novelic d.o.o. Beograd Zvezdara
As mentioned in the note no. 5, the Company has invested an amount of INR 3,506.37 million (March 31st 2024:
INR 3,506.37 million) ( for acquisition of 54% voting rights of Novelic d.o.o. Beograd Zvezdara. Test for impairment of
this investment was carried out as at 31st March 2025, details of which are outlined below. The outcome of the test
indicated that the value in use of investment was higher than its carrying value as at 31st March 2025 and 31st March
2024. Accordingly, no impairment charge has been recognised in the standalone statement of profit and loss.
The recoverable amount of this investment was determined based on value-in-use calculations using a discount rate
ranging between 22.00%-25.00% reflecting current market assessments of the time value of money and risks specific
to the business, covering a detailed ten-year forecast , followed by an extrapolation of expected cash flows using a
terminal growth rate of approximately 3.00% - 4.00% as determined by the management.
47 During the year, the Company raised funds through Qualified Institutional Placement (QIP) of 34,782,608 Equity
Shares of the face value of INR 10 each at a premium of INR 680.00 per share aggregating to INR 24,000.00 million
(INR 23,695.00 million net of issue expenses) for certain specific purposes as stated in the Placement Document. Out
of the above QIP proceeds, INR 14,502.94 million has been utilised for the repayment of borrowings, purchase of fixed
assets and general corporate purposes and the balance INR 9,192.06 million has been temporarily invested in approved
financial instruments, pending utilisation as on 31st March 2025. The equity shares issued as a result of QIP have been
considered in calculating earnings per share (EPS) for the relevant periods.
49 OTHER STATUTORY INFORMATION
(i) The Company do not have any Benami property, where any proceeding has been initiated or pending against the
Company for holding any Benami property.
(ii) The Company do not have any transactions with struck off companies during the current and previous year.
(iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory
period,
(iv) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign
entities (Intermediaries) with the understanding 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.
(vi) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with
the understanding (whether recorded in writing or otherwise) that the Company shall:
The Company’s hedging policy only allows for effective hedge relationships to be established. Hedge effectiveness is
determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessment to ensure
that an economic relationship exists between the hedged item and hedging instrument.
For forward contracts, hedge effectiveness is measured using hypothetical derivative method. Ineffectiveness is measured
by comparing the change in the fair value of the actual derivative i.e. forward contracts designated as the hedging instrument
and the change in the fair value of a hypothetical derivative representing the hedged item i.e. highly probable forecast sales.
Hypothetical derivative matches the critical terms i.e. maturity date, currency and amount of highly probable forecast sales.
In hedges of foreign currency forcast sales, ineffectiveness mainly arises because of Change in timing of hedged item
from that of the hedging instrument and cost of hedging. The ineffectiveness arised in the hedges have been disclosed in
above table.
(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.
(vii) The Company have not any such transaction which is not recorded in the books of accounts that has been surrendered
or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or
survey or any other relevant provisions of the Income Tax Act, 1961.
50 EXCEPTIONAL ITEM
(a) The Company has signed a Business Transfer Agreement (BTA) dated 23rd October 2024 with Escorts Kubota Limited
(EKL) to acquire its Railway Equipment Division (RED) which is a leading supplier of critical components like brakes and
suspension systems to Indian Railways, as a going concern on slump sale basis, for a consideration of INR 16,000.00
million, subject to the terms of the said agreement. On 10th February 2025 the agreement was amended, amongst
others, to revise the timeline for transfer of certain business related registrations and conditions related therewith in
order to bring forward the expected date of completion of sale/transfer of RED Business from end of September 2025
to 1st May 2025 or such other date as mutually agreed by the Parties. Parties have subsequently mutually agreed to
extend the closing date to 1st June 2025 or such other date as mutually agreed by the Parties. Since all the conditions
necessary for closing the transaction have not been met, no effect has been given in the financial statements with
respect to this business acquisition.
The exceptional item is related to costs incurred in relation to various acquisition opportunities.
(b) During previous financial year, the Company had completed the acquisition of 54% voting rights in Novelic d.o.o. on 6th
September 2023, through acquisition of 51% voting rights from the existing shareholders and 3% voting rights as a result
of capital infusion in Novelic d.o.o., as per the Share purchase agreement and shareholder agreement. The exceptional
item is related to diligence work and other expenses incurred on for the said acquisition.
Notes:-
i) HDFC,SBI, CITI and Yes Banks are represented as Working capital lenders.
* Above information is given as per the norms of working capital lenders.
53 Previous year’s figures has been regrouped and/ or reclassed wherever necessary to confirm to the current year’s
groupings and classifications. The impact of such reclassification/regrouping is not material to the financial statements.
54 Authorisation of Standalone financial statements
The Standalone financial Statements for the year ended 31st March 2025 were approved by the Board of Directors on
30th April 2025.
This is the summary of material accounting policy information and other explanatory information form an integral part of these Standalone
financial statements.
For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of
Chartered Accountants Sona Blw Precision Forgings Limited
Firm Registration No.: 001076N/N500013
Arun Tandon Sunjay Kapur Vivek Vikram Singh
Partner Non-Executive Chairman Managing Director and
Membership No.: 517273 DIN: 00145529 Group Chief Executive Officer
DIN: 07698495
Rohit Nanda Ajay Pratap Singh
Group Chief Financial Officer Company Secretary
Membership No.: FCS 5253
Place: New Delhi Place: Gurugram
Date: 30th April 2025 Date: 30th April 2025
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