Q. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
Provisions are recognised when there is a present legal or constructive obligation as a result of past events and it is probable that
an outflow of resources embodying economic benefits will be required to settle the obligation and the amount can be reliably
estimated.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present
obligation at the end of the reporting period. 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.
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not
recognized because it is not probable that an outflow of resources will be required to settle the obligation or the amount of the
obligation cannot be measured with sufficient reliability. The Company does not recognize a contingent liability but discloses its
existence in the financial statements.
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of the Company. Contingent assets are
not recognized, but its existence is disclosed in the financial statements.
R. REVENUE RECOGNITION:
Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer
returns, rebates and other similar allowances.
• Sale of services
The Company recognizes revenue on accrual basis when the significant terms of the arrangement are enforceable, services have
been delivered and the collectability is reasonably assured. The method of recognizing the revenues and costs depends on the
nature of the services rendered. Revenue is recognized when no significant uncertainty exists as to its realization or collection.
• Sale of goods:
Revenue from the sale of goods is recognised when the goods are delivered, titles have passed and all the following conditions
are satisfied:
i. the company has transferred to the buyer the significant risks and rewards of ownership of the goods;
ii. the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective
control over the goods sold;
iii. the amount of revenue can be measured reliably;
iv. it is probable that the economic benefits associated with the transaction will flow to the company; and
v. the costs incurred or to be incurred in respect of the transaction can be measured reliably.
The amount recognised as revenue in its Statement of Profit and Loss is exclusive of Goods and Service Tax, Service Tax and
Value Added Taxes (VAT).
• Other Income:
Interest income from a financial asset is recognized when it is probable that the economic benefit will flow to the company and
the amount of income can be measured reliably.
S. EMPLOYEE BENEFITS:
• Short term employee benefits
All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits
and they are recognized in the period in which the employee renders the related service. The Company recognizes the
undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered as a liability after
deducting any amount already paid.
• Long Term Employment benefits:
Defined Contribution Plan
The Company makes contributions to Provident Fund, etc. for eligible employees and these contributions are charged to The
Statement of Profit and Loss on accrual basis.
Defined Benefit Plan
The Company have a defined benefit plan for its employees, which requires contribution to be made to a separately Administrated
Fund.
Liability for defined benefit plans i.e. Gratuity is determined based on the actuarial valuation carried out by an independent actuary
at the year end. As these liabilities are relatively long term in nature, the actuarial assumptions take in account the requirements
of the relevant Ind AS coupled with a long term view of the underlying variables / trends, wherever required.
Service cost and net interest cost on the defined benefit liabilities/assets are recognized in the statement of profit and loss as
employee benefit expense. Gains and losses on re measurement of defined benefits liabilities/plan assets arising from changes in
actuarial assumptions and experience adjustments are recognised in the other comprehensive income and are included in retained
earnings in the balance sheet.
T. FOREIGN CURRENCY TRANSLATION:
The functional Currency of the Company is Indian Rupee.
Transactions and translations:
All transactions in foreign currency are recorded at the rates of the exchange prevailing on the dates when the relevant transactions
took place. Any gain/ loss on account of the fluctuations in the rate of exchange is recognized in the Statement of Profit and Loss.
Monetary items in the form of loans, current assets and current liabilities in foreign currencies at the close of the year are converted
in the Indian currency at the appropriate rate of exchange prevailing on the dates of the Balance Sheet. Resultant gain or loss on
account of fluctuation in the rate of exchange is recognized in the Statement of Profit and Loss.
U. INCOME TAX:
• Current and deferred tax for the year
Income tax expense comprises of current tax expense and the net change in the deferred tax asset or liability during the year.
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other
comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive
income or directly in equity respectively.
• Current Tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from ‘Profit Before Tax’ as reported in the
statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are
never taxable or deductible. Current tax is determined on the basis of taxable income in accordance with the applicable tax rates
and the provisions of applicable tax laws.
• Deferred Tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally
recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary
differences to the extent that it is probable that taxable profits will be available against which those deductible temporary
differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the
initial recognition of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is
settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the
reporting period.
v. Earnings per Equity Share
Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the
weighted average number of equity shares outstanding during the period. Diluted earnings per equity share is computed by
dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares
considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have
been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the
proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity
shares). Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date.
Dilutive potential equity shares are determined independently for each period presented.
The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any
share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board
of Directors.
V. CRITICAL ACCOUNTING JUDGMENT AND ESTIMATES:
The preparation of financial statements in conformity with Ind AS requires the Management to make estimates, judgements and
assumptions. These estimates, judgements and assumptions affect the applicability of accounting policies and the reported
amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statement and
reported amounts of revenue and expenses during the period. The application of accounting policies that require critical accounting
estimates involving complex and subjective judgements and the use of assumptions in these statements have been disclosed.
Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes
in the estimates are made as the Management become aware of changes in circumstances surrounding the estimates. Changes in
estimates are reflected in the financial statements in the period in which the changes are made and, if material. Their effects are
disclosed in the notes to the financial statement.
a. Financial Risk Management objects and policies
In its ordinary operations, the company’s activities expose it to the various types of risks, which are associated with the financial
instruments and markets in which it operates. The Company has a risk management policy which covers the foreign exchanges
risks and other risks associated with the financial assets and liabilities such as interest rate risks and credit risks. The risk
management policy is approved by the board of directors. The following is the summary of the main risks.
• Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates (currency risk) and interest rates (interest
rate risk), will affect the Company’s income or value of its holding of financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
i. Interest Rate Risk
Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk
of changes in fair value of fixed interest-bearing investments because of fluctuations in the interest rates. Cash flow interest
rate risk is the risk that the future cash flows of floating interest-bearing investments will fluctuate because of fluctuations in
the interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s
debt obligations.
The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the
USD related to the imports of its raw material and capital assets. Foreign exchange risk arises from future commercial
transactions and recognized assets and liabilities denominated in a currency that is not the Company’s functional currency
(INR).
• Credit Risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading
to a financial loss.
The company’s revenue combination is of government and private parties, the company is having majority of receivables from
Government undertakings and hence they are secured from credit losses in the future.
In case of private customers, the Company considers factors such as credit track record in the market and past dealings for
extension of credit to customers. The Company monitors the payment track record of the customers. Outstanding customer
receivables are regularly monitored. The Company evaluates the concentration of risk with respect to trade receivables as low,
as its customers are located in several jurisdictions and industries and operate in largely independent markets.
The impairment for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses
judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Company’s past
history, existing market conditions as well as forward looking estimates at the end of each balance sheet date.
Financial assets are written off when there is no reasonable expectation of recovery, however, the Company continues to
attempt to recover the receivables. Where recoveries are made, these are recognised in the Statement of Profit and Loss.
b. Capital Management
For the purpose of the Company’s capital management, capital includes issued equity capital, securities premium and all other
equity reserves attributable to the equity shareholders of the Company. The Company’s objective when managing capital is to
safeguard its ability to continue as a going concern so that it can continue to provide returns to shareholders and other
stakeholders.
The Company manages its capital structure and makes adjustments in light of changes in the financial condition and the
requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend
payment to shareholders, return capital to shareholders (buy back its shares) or issue new shares.
In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets
financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. The
Company has complied with these covenants and there have been no breaches in the financial covenants of any interest-bearing
loans and borrowings. No changes were made in the objectives, policies or processes for managing capital during the year ended
March 31, 2025 and March 31, 2024.
As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its
average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for
CSR activities are eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and
rehabilitation, environment sustainability, disaster relief, COVID-19 relief and rural development projects. A CSR committee has been
(a) Details of crypto currency or virtual currency
The Company has neither traded nor invested in Crypto currency or Virtual Currency for the year ended on March 31, 2025,
March 31, 2024. Further, the Company has also not received any deposits or advances from any person for the purpose of
trading or investing in Crypto Currency or Virtual Currency.
(b) Compliance with approved scheme of arrangements
Company is not engaged in any scheme of arrangements.
(c) Undisclosed income
During the year ended on March 31, 2025, March 31, 2024., the Company has not surrendered or disclosed as income any
transactions not recorded in the books of accounts in the course of tax assessments under the Income Tax Act, 1961 (such
as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
(d) Relationship with struck off companies
The Company does not have any transactions with the companies struck off under section 248 of the Companies Act, 2013
or section 560 of the Companies Act, 1956 during the year ended on March 31, 2025, M arch 31, 2024.
(e) Compliance with numbers of layers of companies
The Company is in compliance with the number of layers of companies in accordance with clause 87 of Section 2 of the
Act read with the Companies (Restriction on number of Layers) Rules, 2017 during the year ended on March 31, 2025,
March 31, 2024.
(f) Utilisation of borrowed funds and share premium
During the year ended on March 31, 2025, March 31, 2024, the Company has not advanced or Loans or invested funds
(either borrowed funds or share premium or kind of funds) to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall:
i) 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
ii) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.
During the year ended on March 31, 2025, March 31, 2024, the Company has 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:
i) 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
ii) provide any guarantee, security, or the like on behalf of the ultimate beneficiaries.
(g) The Company has not been declared Wilful Defaulter by any bank or financial institution or government or any government
authority.
(h) No proceeding have been initiated nor pending against the company for holding any benami property under the Benami
Transactions (Prohibition) Act,1988 (45 of 1988) and rules made thereunder.
(i) The Company has not revalued its tangible & intangible assets in the year ended March 31, 2025, 2024
(j) The Company does not have any intangible assets under development as on March 31, 2025, 2024
(k) The Company does not have any Immovable Property whose title deeds are not registered in the name of company.
(l) The Company has not been sanctioned working capital limits at any points of time during the year, from banks or financial
institutions on the basis of security of current assets
(m) The Company has not granted any loans & Advances to Promoters, directors, KMPs and related parties during the reporting
period.
44 Previous Year Figures:
The financial statements have been prepared in accordance with the Companies (Indian Accounting Standards) Rules, 2015 (Ind AS)
prescribed under Section 133 of the Companies Act, 2013 and other recognised accounting practices and policies to the extent
applicable. The previous year’s figures have been regrouped / reclassified wherever necessary, to make them comparable.
As per Our Separate Report of Even Date For and On behalf of the Board
For A Y & Company For Loyal Equipments Limited
Chartered Accountants
Firm Registration No. : 020829C
Alkesh R Patel Jyotsanaben R Patel
Managing Director Director
CA Arpit Gupta DIN 02672297 DIN 01307770
Partner
M.No. 421544
UDIN: 25421544BMIUXC4681
Amit C Patel Neha Jangid
Chief Financial Officer Company Secretary
Place : Dahegam, Gujarat M.No. 56820
Date: 09.05.2025
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