20. PROVISION AND CONTINGENT LIABILITIES
a) A provision is recognised, when the Company has the present obligation as result of past events and it is probable that
an outflow of resources will be required to settle the obligation in respect of which reliable estimate can be made.
b) Where no reliable estimate can be made or when there is a possible obligation or present obligations that may, but
probably will not, require an outflow of resources, disclosure is made as Contingent Liability. Expected reimbursement,
if any, is disclosed under Notes to Accounts.
c) When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is
remote, no provision or disclosure is made.
I. PROVISION FOR WARRANTY
Provision for warranty is recognized on actuarial valuation for Manufacturing and Repair and Overhaul of Aircraft/
Helicopter/Engine/Rotables and Spares and development activities etc.
II. PROVISION FOR LIQUIDATED DAMAGES
Provision for Liquidated Damages is recognized when the expected date of delivery of Goods / rendering of Service in
respect of Manufacturing and Repair and Overhaul of Aircraft/Helicopter/Engine/Rotables, Spares and Development
activities etc is beyond the due date as per delivery schedule and at the rates specified in the Contract with the
Customer.
III. PROVISION FOR ONEROUS CONTRACTS
A provision for onerous contract is recognized when the expected benefits to be derived by the Company from the
contract are lower than the unavoidable cost of meeting its obligations under the contract. Before a provision is
established, the Company recognizes any impairment loss on the assets associated with that contract.
21. BORROWING COSTS
Borrowing cost includes interest, and other costs incurred in connection with the borrowing of funds and exchange differences
arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
Borrowing costs, if any, 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 capitalized as part of the cost of the asset. All other
borrowing costs are expensed in the period in which they are incurred.
22. ESTIMATES AND ERRORS
The Company revises its accounting policies if the change is required due to a change in Ind AS or if the change will provide
more relevant and reliable information to the users of the financial statements. Changes in accounting policies are applied
retrospectively unless it is impracticable to apply.
A change in an accounting estimate that results in changes in the carrying amounts of recognised assets or liabilities or to
statement of profit and loss is applied prospectively in the period(s) of change.
When it is difficult to distinguish a change in an accounting policy from a change in an accounting estimate, the change is
treated as a change in an accounting estimate.
Discovery of material errors results in revisions retrospectively by restating the comparative amounts of assets, liabilities, and
equity of the earliest prior period in which the error is discovered. The opening balances of the earliest period presented are
also restated.
23. EVENTS AFTER THE REPORTING PERIOD
Adjusting events are events that provide further evidence of conditions that existed at the end of the reporting period. The
financial statements are adjusted for such events before authorisation for issue.
Non-adjusting events are events that are indicative of conditions that arose after the end of the reporting period. Non¬
adjusting events after the reporting date are not accounted.
24. EARNINGS PER SHARE
The Company presents basic and diluted earnings per share for its ordinary shares. Basic earnings per share is calculated by
dividing the net profit or loss attributable to equity holders of the Company by the weighted average number of equity shares
outstanding during the period.
Diluted earnings per share is determined by dividing the net profit or loss attributable to equity holders of the Company by
the weighted average number of equity shares outstanding during the period adjusted for the effects of all dilutive potential
equity shares.
iLk U4-
(BARENYA SENAPATI) (DR. D.K. SUNIL)
Director (Finance) & CFO Chairman & Managing Director
DIN: 08525943 DIN: 09639264
(SHAILESH BANSAL)
Place: Bengaluru Company Secretary
Date: 14.05.2025 FCS No. 5064
Nature and Purpose of each Reserve:
1. Research & Development Reserve:
Research and Development Reserve is created by transfer from Retained Earnings an annual contribution of 15% of
Operating Profit After Tax. Research & Development Reserve is created to bring technological superiority to the products in
order to cope with the future technological challenges. The amount of utilisation for Research and Development purposes
during the year is transferred from Research and Development Research to General Reserve.
2. Captial Redemption Reserve:
Capital Redemption Reserve is created on redemption/buyback of equity shares.
3. Indigenization Fund Reserve:
I ndigenization Fund Reserve is created by transfer from Retained Earnings an amount equal to 3 % of Operating Profit
After Tax which will be utilised to encourage Indigenization of items which are being sourced from foreign sources at
present.
4. General Reserve:
General Reserve is created out of the profits of the Company and out of Research & Development Reserve on utilization of
Research & Development purposes. This is a free reserve.
33 Financial Risk Management
The Company is exposed to market risk, credit risk and liquidity risk which may impact the fair value of its financial
instruments. The Company, based on its business operation, evaluated the following risks:
a) Foreign currency risk:
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of
changes in exchange rates. The Company's exposure to the risk of changes in exchange rates relates primarily to
the Company's imports for which the payment has to be done in currencies other than the functional currency
of the Company. The fluctuation in exchange rates in respect to the Indian rupee may have very restricted
impact on company as any fluctuations in foreign exchange are in general reimbursed by the customers of the
Company in terms of the contractual obligations which the Company has with its customers.
b) Credit risk:
Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument
fails to meet its contractual obligations resulting in a financial loss to the Company. Credit risk arises principally
from trade receivables, loans & advances, advances given to suppliers (for procurement of goods, services and
capital goods), cash & cash equivalents and deposits with banks and financial institutions. The Company for
the Financial Year (FY) derived 97% (Previous year: 95%) of its total sales from sales to the Indian Defence
Services. The Company expects to continue to derive most of its sales from the Indian Defence Services under
the contracts of the Ministry of Defence (MoD), Government of India (GoI) the Company's principal shareholder
and administrative ministry.
c) Provision for expected credit losses:
As the Company's debtors are predominantly the Government of India (Indian Defence Services, Ministry of
External Affairs), Central Public Sector Undertakings where the counter - parties have sufficient capacity to
meet the obligations and where the risk of default is nil / negligible. Accordingly, impairment on account of
expected credit losses is being assessed on a case to case basis in respect of dues outstanding for significant
period of time as per the accounting policy of the Company. Further, management believes that the unimpaired
amounts that are due is collectable in full, based on historical payment behaviour and extensive analysis of
customer credit risk.
d) Liquidity risk:
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its
financial liabilities that are settled by delivering cash or another financial asset. Typically, the Company ensures
that it has sufficient cash on demand to meet expected operational expenses including the servicing of financial
obligations. The Company's standard contract terms provide that, the Company receives advance payments
from customers pursuant to the applicable contracts, including the Government of India and the Indian Defence
Services at the time of signing of any contract and milestone payments on achievement of physical milestones.
These payments are utilized to meet the Company's working capital needs (for the Company required to
maintain a high level of working capital because the Company's activities are characterized by long product
development periods and production cycles). A majority of the Company's research, design and development
costs are funded by the Indian Defence services. Services and supply of spares are governed by the Fixed Price
Quotation (FPQ) policy for fixation of the prices wherein the prices are fixed for the base year with escalation
parameters for a pricing period of 5-7 years. The process of fixation of prices and approvals takes a minimum
period of two years after the expiry of previous pricing period. In the interim, the approved prices of the
previous pricing period are continued and payments are accordingly realised and on finalisation of the revised
prices, the differential prices are paid to the Company. Further, certain costs not forming part of selling price are
reimbursed by customer on incurrence of expenditure. The reimbursement is based on verification and issuance
of audit certificate by the payees. There are delays in the above process due to unanticipated variations/
adjustments in the scope and schedule of the Company's obligations due to subsequent modifications by the
customers and delays in receipt of approvals from the customer. Further, payments to the Company by the
Indian Defence Services are reliant on the continuing availability of budgetary appropriations by Government of
India and any disruptions to the availability of such appropriations could adversely affect the Company's cashflows.
43A Gratuity:
The Company has a Gratuity Scheme for its employees, which is a funded plan. Every year the Company funds to the
Gratuity Trust to the extent of shortfall of the assets over the fund obligations, which is determined through actuarial
valuation. As per the Gratuity Scheme, Gratuity is payable to an employee on the cessation of his employment
after he has rendered continuous service for not less than 5 (five) years in the Company. For every completed year
of service or part thereof in excess of six months, the Company shall pay Gratuity to an employee at the rate of
15 (fifteen) days' emoluments based on the emoluments last drawn with a ceiling of ' 20 (twenty) Lakhs.
The following tables summarise the components of net benefit expense recognised in the Statement of Profit and
Loss and the funded status and amounts recognised in the Balance Sheet for the plan as furnished in the Disclosure
Report provided by the Actuary:
Gratuity is a lump sum plan and the cost of providing these benefits is typically less sensitive to small changes in
demographic assumptions. Sensitivity analysis indicates the influence of a reasonable change in certain significant
assumptions on the outcome of the Present value of obligation(PVO) and aids in understanding the uncertainty of
reported amounts. Sensitivity analysis is done by varying one parameter at a time and studying its impact. The key
actuarial assumptions to which the benefit obligation results are particularly sensitive to are discount rate and future
salary escalation rate. The following table summarizes the impact in percentage terms on the reported defined
benefit obligation at the end of the reporting period arising on account of an increase or decrease in the reported
assumption by 100 basis points.
43B(i) The exempt provident fund set up by the company is a defined benefit plan under Ind AS 19 Employee Benefits.
Provident Fund for eligible employees is managed by the Company through a trust in line with the Provident
Fund and Miscellaneous Provision Act, 1952. The plan guarantees interest at the notified by the Provident Fund
Authorities. The contribution by the employer and employee together with the interest accumulated thereon are
payable to employees at the time of separation from the Company or retirement, whichever is earlier. The benefits
vests immediately on rendering of the services by the employee.
The minimum interest rate payable by the trust to the beneficiaries every year is notified by the Government. The
Company has an obligation to make good the shortfall, if any, between the return from the investments of the trust
(including investment risk fall) and the notified interest rate.
The Company has obtained report on the determination and disclosure of interest rate Guarantee & Diminution
of Asset Values as per Ind AS19 of Employees Exempt Provident Fund of HAL for the period ended 31st March
2025. Based on the actuarial valuation of provident fund the liability for the year has been created of ' 4602 lakhs
(Previous year: ' 5372 lakhs).
As per the approval of Board an amount of ' 8089 lakhs released to various PF Trusts of HAL towards deficit arising
out of investments made in DHFL and Sintex during the year 2023-24, Nil for 2024-25.
43C(i) The Company has provided Performance Related Pay for the year as per the Guidelines issued by Department of
Public Enterprises.
43C(ii) During the year 2011, C&AG observed that the profits earned from short term deposits is an incidental activity and
not a core activity of the Company and inclusion of the interest income from these deposits for PRP computation
had led to excess of payment of ' 4318 lakhs to its executives. Based on HAL reply on difficulties in recovery, the
C&AG vide letter dated 11th November 2024, suggested that the issue of difficulties in retrospective recovery of
excess amount of ' 4318 lakhs paid on account of PRP for the year 2009-10 to 2011-12 be placed before the Board
for obtaining waiver and disclose in the Financial statements.
In compliance with the C&AG letter, the issue of difficulties in retrospective recovery of excess amount paid on
account of PRP for the year 2009-10 to 2011-12 to its Executives was placed before HAL Board in its 488th Meeting
held on 16th December 2024.
After deliberation, HAL Board approved the waiver from recovery of ' 4318 lakhs of excess payment of PRP for the
Year 2009-10 to 2011-12 to its Executives.
Necessary accounting treatment has been done in the accounts for the year ended 31.03.2025.
43D(i) Pension:
In line with the Guidelines issued by the Department of Public Enterprises, Ministry of Heavy Industries & Public
Enterprises, Govt. of India for revision of the Salary Structure of Executives of CPSEs with effect from 1st January,
2007 and as per the approval accorded by the Board of Directors and Department of Defence Production, Ministry
of defence, a Defined Contribution Pension Scheme was notified in the Company on 16th July, 2014 in respect of
Executives retired etc., from 1st January, 2007.
A Defined Contribution Pension Scheme in respect of Workmen retired after 1st January, 2012 was notified on
2nd June, 2015 which was agreed as a part of the Workmen's Wage Revision effective from 1st January, 2012.
Contribution to the corpus of the above schemes by the Management may vary from year to year as the same is
dependent on profits generated, affordability & sustainability by the Company.
The Scheme is managed by a duly constituted Trust.
43D(ii) Ministry vide OM dated 12.07.2023 has conveyed the approval for increasing the Company's contribution to the
Pension Scheme of Executives from existing 7% to 10% of Basic Pay DA w.e.f. 0.1.01.2017. Revision of Pension
contribution from 7% to 10% of Basic Pay DA w.e.f 01.01.2017 has been made in respect of Executives who are
on the rolls of the Company as on the date of implementation of the revised ceiling i.e. 01.01.2017. In respect of
new incumbents who joined the Company post 01.01.2017, it will be effective from the date of appointment.
The additional liability accruing to the Company due to the increased ceiling, is ' 21776 lakh pertaining to the
period from 1 January, 2017 to 31 March, 2024 (' 3719 lakh for the year ended 31 March, 2025). The total
additional financial impact on revision of Pension contribution up to 31st March 2024 has been given effect in the
books of accounts during the year ended 31 March, 2024. Accordingly, employees cost for the current year is not
comparable with the corresponding previous year.
In respect of Workmen, Company issued Circular dated 24.04.2025 has conveyed the approval for increasing the
Company's contribution to the Pension Scheme from existing 7% to 10% of Basic Pay DA w.e.f. 01.01.2025.
Revision of Pension contribution from 7% to 10% of Basic Pay DA w.e.f 01.01.2025 has been made in respect of
workmen who were on the rolls of the Company as on the date of implementation of the revised ceiling.
The additional liability accruing to the Company due to the increased ceiling is ' 1051 lakh pertaining to the period
from 1 January, 2025 to 31 March, 2025. The total additional financial impact on revision of Pension contribution
has been given effect in the books of accounts during the year ended 31 March, 2025. Accordingly, employees cost
for the current year is not comparable with the corresponding previous year.
43E Post Superannuation Group Health Insurance Schemes:
In line with the Guidelines issued by the Department of Public Enterprises, Ministry of Heavy Industries & Public
Enterprises, Government of India and as per the approval accorded by the Board of Directors and Department of
Defence Production, Ministry of defence, Post Superannuation Group Health Insurance Schemes in respect of (a)
Employees (Officers & Workmen) retired before 1st January, 2007 and (b) Executives retired on or after 1st January,
2007 were introduced with effect from 1st February, 2014.
A Post Superannuation Group Health Insurance Scheme in respect of Workmen of the Company retired, etc. after
1st January, 2007 has been introduced in the Company with effect from 1st February, 2015 which was agreed as a
part of the Workmen's Wage Revision effective from 1st January, 2012.
Benefits under the Schemes may vary from year to year, as contribution to the Corpus of the Schemes is dependent
on Profits generated, Affordability & Sustainability by the Company.
The Schemes are managed by a duly constituted Trust.
43F HAL Employees Group Life Insurance Trust:
As per the approval accorded by the Board, the Company has notified an insurance scheme namely the HAL
Employees Group Life Insurance Trust to cover its employees, in case of death due to any reason other than suicide.
The contribution towards the scheme are borne equally by employees and the Management. In the event of Death
of an employee due to any reason other than suicide, the dependent family members will be paid the sum assured
(' 10 lakhs). The Company has made contribution of ' 118 lakhs (previous year : ' 135 lakhs) to the trust for the
year ended 31.03.2025 with employees contributing an equal amount.
43G Revision of pay scales of executives and workmen, with effect from 01.01.2017 was implemented in accordance
with the guidelines issued by Department of Public Enterprises vide OM dated 03.08.2017 for Executives and in
accordance with the Wage Agreement entered into between Management and Employees Union representative in
2019-20 in respect of Workmen.
On an interpretation on pay refixation and pursuant to the directives of the Administrative Ministry, the pay fixation
to be revised and the excess amount paid is to be recovered from the employees. Based on the directives Company
issued a Circular dated 24.07.2021 and the communication dated 26.07.2021 for recovery of the excess amount.
While so, the Employees Union and Officers Association have filed Writ Petition with Hon'ble High Court of
Karnataka to stay recovery of excess amount of salary paid by the Company. The Hon'ble High court given verdict
in favour of Officers Associations by setting aside the Circular dated 24.07.2021 and the communication dated
26.07.2021 issued by the Management. The order of the Hon'ble High Court in favour of Officers was put up to
the Board in its 490th Meeting held on 12.02.2025. Board has noted the judgement of the Hon'ble High Court
and accorded approval to abide by the Court order. Accordingly, the differential amount withheld by the
Management in respect of Ex-officers has to be released /refunded to the concerned Ex-officers/Nominees along
with applicable interest.
As per the Board approval, one increment impact amount of ' 2712 lakhs recovered from the retired/deceased/
resigned employees has been paid during 2024-25. Further, in respect of officers an amount of ' 18565 lakhs
credited to salaries and wages in the earlier years and kept under claims receivable has been reversed during
2024-25. Accordingly, employees cost for the current year is not comparable with the corresponding previous year.
In respect of Workmen, the order is awaited, hence, reduction of salaries and wages in respect of workmen
continued for the year ended 31st March 2025 and ' 2444 lakhs effect given in the books towards this. Excess
amount credited to salaries and Wages in respect of Workmen has been shown under claims receivable(Gross) of
' 16390 lakhs as at 31st March 2025 (previous year: ' 14282 lakhs).
Based on the final verdict, decision in respect of workmen will be taken and suitable effect will be carried out in the
accounts.
43H Financial Assistance Scheme for Dependents of Deceased Employee
As per the approval accorded by the Board, the Company has notified "Financial Assistance Scheme for dependents
of Deceased Employees (FASDDE)" to pay a fixed amount on monthly basis to surviving spouse or dependent
children if the spouse is not surviving, till the notional date of superannuation of the deceased employee. The prime
objective of the scheme is to provide financial support for dependent beneficiaries of the employees who expire
while in service, to enable them to lead a normal life. The scheme will be applicable in all cases of Death of an
employee due to any other reason other than suicide. Fund of ' 4000 lakhs during 2021-22 & ' 1500 lakhs during
2022-23 transferred to trust for management of the Corpus. The income generated from the Corpus which will be
invested with M/s LIC will be utilized to make payments under the Scheme.
During the year ' NIL lakhs (previous year: ' 56 lakhs) has been incurred as expenditure under Financial Assistance
Scheme for Dependents of Deceased Employee which is included in Note 40 - Staff Welfare expenditure.
(b) As and when the instalments in respect of deferred debts falls due for payment to the Russian Federation, the same
is paid by applying the exchange rate ruling on the date of actual payment and liability discharged. The differences
arising due to recalculation of debts at the applicable /ruling rate is charged to the revenue at the time of payment
and recognised as sales when realised from the customer except to the extent it pertains to Capital Assets. The
sales for Exchange Rate Variation (ERV) considered is ' 6074 lakhs (Previous year - ' 4873 lakhs). The Assets and
Liabilities relating to deferred credit transaction are reinstated under Non-current Other Financial Assets, Current
Other Financial Assets (recoverable within one year), Non-current Other Financial Liabilities and Current Other
Financial Liabilities (to be settled within one year).
45B The Board in its 406th meeting held on 22nd September 2017, accorded in principle approval for voluntary winding
up / closure of the three Joint Ventures i.e. M/s. HAL-Edgewood Technologies Private Limited, M/s. Tata HAL
Technologies Ltd and M/s. Multirole Transport Aircraft Ltd. enabling the Company to take further action in the
matter.
Further, the Board authorized the Company to seek approval of Ministry of Defence (MoD), for short closure of
the Contracts associated with the M/s Multirole Transport Aircraft (MTA) project and requested MoD, to initiate
necessary action for closure of IGA, as it is a prerequisite for winding up of the MTA - Joint Venture Company.
Further, MOD vide its letter dated 14th October 2021 notified the termination of the agreement between the Govt.
of the Republic of India and Govt. of Russian Federation. In this respect the Russian Federation vide its letter dated
20th April 2022 intimated that the decision of the Indian side has been taken into consideration.
Further in 435th meeting held on 16th March 2020, the Board has directed the Company to expedite the closure of
M/s. Multirole Transport Aircraft Ltd at the earliest after taking clearance from Russian partners from their Board(refer
Clause No.10).
The Board in its 440th meeting held on 9th December 2020, accorded in principle approval for voluntary
winding up / closure of Joint Venture M/s. Infotech HAL Limited(IHL) enabling the Company to take further action
in the matter.
45B(i) The Company had signed an agreement with Safran Helicopter Engines SAS for setting up a joint venture to
carry out business of design, development, certification, production, sale and support of helicopter engines.
Pursuant to the same a Joint Venture Company with Safran Helicopter Engines SAS by name SAFHAL Helicopter
Engines Private Limited has been incorporated on 09 November 2023. Each JV partner has subscribed for 1000000
equity shares of ' 10 each amounting to ' 100 lakhs.
45B(ii) During the current financial year, the Company has reversed the impairment provided in earlier years on its
investment in the Joint Ventures for ' 855 lakhs for International Aerospace Manufacturing Pvt Limited and
' 61 lakh for BAe-HAL Software Limited. For this purpose, the investments made in IAMPL and BAeHAL were
evaluated taking into account certain key financial parameters of the Joint Ventures. Based on the evaluation, it
was assessed that there has been an overall improvement in the financial health of both the companies. The total
financial effect of the reversal is ' 916 lakhs.
45C Defence Innovation Organisation ("DIO"):
A Section 8 Company has been formed (Under Companies Act 2013) in the name of "Defence Innovation
Organisation" with M/s BEL with an authorised Capital of ' 100 lakhs (Paid up capital as on 31st March 2025 is
' 1 Lakh( HAL 50% Share and BEL 50% Share). The registered office of DIO is situated at Centre for Learning and
Development, Bharat Electronics Limited, Jalahalli, Bengaluru - 560013, Karnataka, India. DIO was incorporated to
implement the scheme of defence innovation fund initiative by creation of an ecosystem to foster innovation and
technology development in defence.
HAL Board in its 417th meeting held on 30th July 2018 had accorded approval for release of ' 5000 lakhs to
DIO towards initial corpus fund in form of Grant in Aid in a staggered manner. Accordingly ' 500 lakhs has been
released to DIO in the month of August 2018 and the balance amount of ' 4500 lakhs has been released to
DIO during August 2024.
45D The Board in its 434th meeting was informed that Government approval is not required for transfer of lease hold
land to M/S Helicopter Engines MRO Private Limited (HE-MRO), as it is neither defence land nor it is a land owned by
HAL. Board reconsidered the decision taken in its 431st meeting and approved transfer of land without Government
approval to M/s HE-MRO.
In line with the Board Approval in its 431st and 434th meetings, Tripartite Deed of Lease was executed on the
18th May 2023 between Goa Industrial Development Corporation (GIDC), M/s Helicopter Engines MRO Private
Limited (HE MRO) and HAL MRO Division for transfer of Lease hold rights of industrial plot admeasuring 7.41 acres
to HE MRO.
Further, the Sale of Deed was executed between HAL-MRO Division and HE -MRO on 8th June 2023 for sale of
Building and Plant & Machinery and Other Assets for a total consideration of ' 1029 lakhs.
Accordingly necessary accounting treatment has been made in the Books of Accounts.
45E The Company paid ' 950 lakhs towards subscription of 950000 equity shares of the face value of ' 100 each to its
Joint Venture Company, Helicopter Engines MRO Private Limited, on 8 January, 2024 towards equity participation
in Rights issue of the Joint Venture Company. Pursuant to the same, the investment of the Company in the Joint
Venture has increased from ' 1510 lakh to ' 2460 lakh during the FY 2023-24.
45E(i) A Section 8 Company has been formed (Under Companies Act 2013) in the name of "Electronic Warfare (Defence)
Testing Foundation(EWDTF)". The total project cost ' 46.96 Crs comprising of Govt. Grant-in-Aid of ' 35.22 Crs
and SPV partners contribution ' 11.74 Crs. Wherein M/s BEL will be the lead with equity contribution of 40%,
HAL-20%, IOL-20%, BDL-10% & TIDCO-10%. EWDTF was incorporated for Development, Operation and
Management of DTI for Electronic Warfare. EWDTF was incorporated on 21st May 2024. HAL has made an investment
of ' 235 lakhs (20% stake) towards subscription of 23480 Equity shares of ' 1000 each on 27th June 2024.
45E(ii) A Section 8 Company has been formed (Under Companies Act 2013) in the name of "Communication (Defence)
Testing Foundation (CDTF)". The total project cost ' 41.81 Crs comprising of Govt. Grant-in-Aid of ' 31.36 Crs
and SPV partners contribution ' 10.45 Crs. Wherein M/s BEL will be the lead with equity contribution of 40%,
HAL-25%, BEML-25%, & AWEIL-10%. CDTF was incorporated for Development, Operation and Management
of DTI for Communication domain. CDTF was incorporated on 31st May 2024. HAL has made an investment of
' 261 lakhs (25% stake) towards subscription of 26125 Equity shares of ' 1000 each on 27th June 2024.
45E(iii) A Section 8 Company has been formed (Under Companies Act 2013) in the name of UAS Testing Foundation
(UASTF)". The total project cost ' 60 Crs comprising of Govt. Grant-in-Aid of ' 45 Crs and SPV partners contribution
' 15 Crs. Wherein M/s HAL will be the lead with equity contribution of 33.33%, BEL-20%, BEML-20%, YIL-10%,
GIL-10% & Endure Air-6.67%. UASTF was incorporated for Development, Operation and Management of DTI
for Unmanned Aerial Systems(UAS). UASTF was incorporated on 21st June 2024. HAL has made an investment of
' 500 lakhs (33.33% stake) towards subscription of 50000 Equity shares of ' 1000 each on 18th July 2024.
45E(iv) A Section 8 Company has been formed (Under Companies Act 2013) in the name of "Advanced Materials (Defence)
Testing Foundation (AMDTF)". The total project cost ' 54.36 Crs comprising of Govt. Grant-in-Aid of ' 40.70 Crs
and SPV partners contribution ' 13.66 Crs. Wherein M/s MIDHANI will be the lead with equity contribution of
20%, HAL-20%, BDL-20%, YIL-20% & PTC-20%. AMDTF was incorporated for Development, Operation and
Management of DTI for Mechanical & Material(M&M) testing. AMDTF was incorporated on 4th June 2024. HAL has
made an investment of ' 273.20 lakhs (20% stake) towards subscription of 27320 Equity shares of ' 1000 each on
8th July 2024.
45E(v) A Section 8 Company has been formed (Under Companies Act 2013) in the name of "Systems Testing and
Research for Advanced Materials Foundation (STREAM)". The total project cost ' 49.68 Crs comprising of Govt.
Grant-in-Aid of ' 36.864 Crs and SPV partners contribution ' 12.816 Crs. Wherein M/s Microlab will be the lead
with equity contribution of 20%, BEML-20%, HAL-20%, Vaidheswaran Industries-10%, & TIDCO-30%. STREAM
was incorporated with a vision of creating easy access and addressing the testing needs of domestic defence
industry. STREAM was incorporated on 18th September 2024. HAL has made an investment of ' 20 lakhs towards
subscription of 20000 Equity shares of ' 100 each on 18th November 2024. Further HAL made an investment
of ' 41.25 lakhs towards subscription of 41250 Equity Shares of ' 100 each, pending allotment, the amount of
investment shown under share application money under current financial assets.
i. Current Assets = Inventories (Note - 13) Investments (Note -14) Trade receivables (Note -15) Contract Assets
(Note -15A) Cash and Cash Equivalents (Note - 16) Bank Balances other than Cash and Cash Equivalents (Note-
17) Loans (Note -18) Other Financial Assets (Note 19) Current tax Assets (net) (Note - 20) Other Current
Assets (Note - 21)
ii. Current Liabilities = Borrowings (Note - 30) Lease liability (Note 30A) Trade Payables (Note - 31) Other Financial
liabilities (Note - 32) Other current liabilities (Note - 33) Provisions (Note - 34) Current Tax Liabilities (Net)
(Note - 35)
iii. Total Debt = Non-current borrowing (Note-24) Current borrowing working capital loan - Cash Credit (Note - 30)
Current borrowing from Banks - Commercial paper (Note - 30)
iv. Shareholders Equity = Equity Share Capital (Note - 22) Other Equity (Note - 23)
v. Earnings available for debt service = Profit after Tax Depreciation and amortisation (Note - 42) Finance Cost
(Note - 41) Loss on sale of assets
vi. Debt Service = Finance cost (Note - 41) Principal repayment
vii. Net Profits after taxes = Profit (Loss) for the period
viii. Average Shareholder's Equity = (Shareholder's Equity for current period previous year) /2
ix. Average Inventory = (Inventories (Note-13) for current period previous year) / 2
x. Average Accounts Receivable = (Trade Receivables (Note-8 and Note -15) for current period previous year) / 2
xi. Average Trade Payables = (Trade payables (Note - 25 and Note - 31) for current period previous year) / 2
xii. Average Working Capital = (Total Current Assets - Total Current Liabilities for current period previous year) / 2
xiii. Net Profit = Profit(Loss) for the period from continuing operations
xiv. Earning before interest and taxes = Profit Before Tax Finance Cost (Note - 41)
xv. Capital Employed = Shares holder's Equity Long Term Borrowings(Note - 24) Deferred tax liability (Note - 28)
55H Utilisation of borrowed funds and share Premium through intermediaries or for benefit of third party
beneficiaries:
No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other
sources or kind of funds) by the Company, its subsidiary, associate to or in any other person(s) or entity(ies),including
foreign entities (Intermediaries") with the understanding, whether recorded in writing or otherwise, that the
Intermediary shall lend or invest in party identified by or on behalf of the Company, its subsidiary, associate, (Ultimate
Beneficiaries).
The Company have not received any fund from any party(s) (Funding Party) with the understanding that the
Company, its subsidiary, associate, shall whether, directly or indirectly lend or invest in other persons or entities
identified by or on behalf of the Company, its subsidiary, associate ("Ultimate Beneficiaries") or provide any
guarantee, security or the like on behalf of the Ultimate Beneficiaries.
55I Undisclosed Income
No transaction that has been not recorded in the books of accounts which are 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), unless there is immunity for disclosure under any scheme and
previously unrecorded income and related assets that have been properly recorded in the books of accounts during
the year.
55L Recent pronouncements
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued from time to time. On 7th May, 2025, MCA amended the
Companies (Indian Accounting Standards) Amendment Rules, 2023, as below. The amendment will be effective
from 01st April, 2025.
Ind AS 21, Effects of change in foreign exchange rates - This amendment has defined the exchangeability of a
currency. The Company has evaluated the amendment and the impact of the amendment is insignificant in the
standalone financial statements.
56 The financial statements were approved for issue by the Board of Directors at their meeting held on 14th May 2025.
These financial statements are presented in Indian rupees (rounded off to lakhs).
Material accounting policies and accompanying notes no.1 to 49 form an integral part of the financial statements.
As per our report of even date attached
For and on behalf of the Board of Directors
For GUPTA NAYAR & CO .Hr, \ .
Chartered Accountants, IU*A_' LjL\-
Firm Registration No: 008376N
(BARENYA SENAPATI) (Dr. D.K. SUNIL)
I Director (Finance) & CFO Chairman & Managing Director
DIN: 08525943 DIN: 09639264
CA NANDLAL AGARWAL Q . q
Partner
Membership No: 091272 (SHAILESH BANSAL)
Place: Bengaluru Company Secretary
Date: 14.05.2025 FCS No. 5064
|