Significant accounting policies followed by the Company
(A) Basis of preparation of financial statements:
(i) Compliance with Ind AS:
The financial statements comply in all material
aspects with Indian Accounting Standards (Ind
AS) notified under Section 133 of the Companies
Act, 2013 and other relevant provisions of the Act.
The Standalone Financial Statements are
approved for issue by the Companies Board of
Directors dated May 23, 2025.
These standalone financial statements have
been prepared on historical cost basis except
for certain financial instruments and defined
benefit plans which are measured at fair value or
amortised cost at the end of each reporting period.
Historical cost is generally based on the fair value
of the consideration given in exchange for goods
and services.Fair value is the price that would
be received to sell an asset or paid to transfer a
liability in an orderly transaction between market
participants at the measurement date. All assets
and liabilities have been classified as current
and non-current as per the Companies normal
operating cycle. Based on the nature of services
rendered to customers and time elapsed between
deployment of resources and the realisation in
cash and cash equivalents of the consideration
for such services rendered, the Company has
considered an operating cycle of 12 months.
(B) Use of estimates:
The preparation of financial statements in conformity
with the generally accepted accounting principles
requires estimates and assumptions to be made by the
management that affect the reported amount of assets
and liabilities on the date of the financial statements
and the reported amount of revenues and expenses
during the reporting period. Differences between actual
results and estimates are recognised in the period in
which the results are crystallised.
Estimates and underlying assumptions are reviewed on
ongoing basis. Revisions to estimates are recognised
prospectively.
(C) Revenue recognition:
(a) Revenue from the sale of goods is recognised
upon the passage of title to the customers, which
generally coincides with delivery.
(b) Export sales are accounted based on the dates of
Bill of Lading.
(c) Interest Income is accrued on time proportion
basis over the period of loan / deposit / investment
except in case of significant uncertainties.
(D) Property, Plant and Equipment:
(a) All items of property, plant and equipment
are stated at historical cost less depreciation.
Historical cost includes expenditure that is directly
attributable to the acquisition of the items. Cost
may also include hedges of foreign currency
purchases of property, plant and equipment.
Subsequent costs are included in the asset’s
carrying amount or recognised as a separate
asset, as appropriate, only when it is probable
that future economic benefits associates with
the item will flow to the Company and the cost
of the item can be measured reliably. All other
repairs and maintenance are charged to profit or
loss during the reporting period in which they are
incurred.
(b) Depreciation methods, estimated useful lives and
residual value:
(i) Depreciation: The Company has ascertained
the useful life of its various assets and
charged depreciation in accordance with
Schedule II of the Companies Act, 2013
except in case of Precision Components
division the useful life of shop toolings
fixtures has been determined as 2 years.
(ii) Leasehold Land is amortised over the period
of lease.
(iii) The useful lives have been determined
based on technical evaluation done by the
management’s expert in order to reflect the
actual usage of the assets. The residual
values are not more than 5% of the original
cost of the asset. The assets’ residual values
and useful lives are reviewed, and adjusted
if appropriate, at the end of each reporting
period.
(iv) An asset’s carrying amount is written down
immediately to its recoverable amount if the
asset’s carrying amount is greater than its
estimated recoverable amount.
(v) Gains and losses on disposals are determined
by comparing proceeds with carrying
amount. These are included in statement of
profit and loss.
(E) Intangible Assets:
Computer Software and Technical Know-How are
amortised over a period of 3 years from the date of
acquisition.
(F) Capital Work in Progress:
Expenditure during construction period including
development cost incurred on the projects under
implementation are treated as pre-operative expenses
pending allocation to the assets and are included
under "Capital Work in Progress". These expenses
are apportioned to fixed assets on commencement of
commercial production.
(G) Impairment of Assets:
An asset is treated as impaired when the carrying cost of
the asset exceeds its recoverable value. An impairment
loss, if any, is charged to statement of profit and loss in
the year in which an asset is identified as impaired. The
impairment loss recognised in prior accounting period
is reversed if there has been a change in the estimate of
recoverable amount.
(H) Valuation of Inventory:
(a) Raw Materials and components, semi-finished
goods, finished goods, stores and spares, goods
for trade are valued at cost or net realisable value
whichever is lower. Cost formula used is weighted
average cost. Cost comprises of cost of purchase,
cost of conversion and other cost incurred in
bringing the inventory to its present location and
condition.
(b) Goods / Materials in Transit are valued at cost to
date.
(c) Scrap is valued at its estimated realisable value.
(d) Adequate provisions are made for obsolete
inventory based on technical estimates made by
the Company.
(I) Foreign Currency Transactions:
Transactions arising in foreign currencies during the
year are converted at the rates closely approximating
the rates ruling on the transaction dates. Liabilities
and receivables in foreign currency are restated at the
year end exchange rates. All exchange rate differences
arising from conversion in terms of the above are
included in the statement of profit and loss.
In case of items which are covered by forward exchange
contracts, the difference between the year end rate and
rate on the date of contract is recognised as exchange
difference and the premium paid on forward contracts
is recognised over the life of the contract.
(J) Employee Benefits:
(i) Short-term obligations:
Liabilities for wages and salaries, including non¬
monetary benefits that are expected to be settled
wholly within 12 months after the end of the
period in which the employees render the related
service are recognised in respect of employees’
services up to the end of the reporting period and
are measured at the amounts expected to be paid
when the liabilities are settled. The Liabilities are
presented under current liabilities in the balance
sheet.
(ii) Other long-term employee benefit obligations:
The liabilities for earned leave are measured as
the present value of expected future payments
to be made in respect of services provided by
employees up to the end of the reporting period
using the projected unit credit method. The
benefits are discounted using the market yields
at the end of the reporting period that have
terms approximating to the terms of the related
obligation. Remeasurements as a result of
experience adjustments and changes in actuarial
assumptions are recognised in statement of profit
and loss.
(iii) Post-employment obligations:
(a) Defined contribution plans: Company’s
contribution to the provident fund scheme
is recognised during the year in which the
related service is rendered.
(b) Defined benefit plans: The liability or asset
recognised in the balance sheet in respect
of gratuity plans is the present value of
the defined benefit obligation at the end of
the reporting period less the fair value of
plan assets. The defined benefit obligation
is calculated annually by actuaries using
projected unit credit method.
(c) The net interest cost is calculated by
applying the discount rate to the net balance
of the defined benefit obligation and the fair
value of plan assets. This cost is included in
employee benefit expense in the statement
of profit and loss.
(d) Remeasurement gains and losses arising
from experience adjustments and changes in
actuarial assumptions are recognised in the
period in which they occur, directly in other
comprehensive income. They are included
in retained earnings in the statement of
changes in equity and in the balance sheet.
(e) Changes in present value of the defined
benefit obligation resulting from plan
amendments or curtailments are recognised
immediately in profit or loss as past service
cost.
(f) Long Term compensated absences are
provided on the basis of an actuarial
valuation.
(K) Research and Development Costs:
Revenue expenditure, including overheads on research
and development, is charged as an expense through the
natural heads of account in the year in which incurred.
Expenditure incurred at development phase, where it
is reasonably certain that outcome of research will be
commercially exploited to yield economic benefits to
the Company, is considered as an Intangible assets and
depreciation is provided on such assets as applicable.
(L) Investments:
Current investments are carried at lower of cost or fair
value. Long term investments are carried at cost less
provision for other than temporary decline in the value
of such investments. Investment in subsidiaries are
valued at cost.
(M) Borrowing Cost:
General and specific borrowing costs that are
directly attributable to the acquisition, construction
or production of a qualifying asset are capitalised
during the period of time that is required to complete
and prepare the assets for its intended use or sale.
Qualifying assets are assets that necessarily take a
substantial period of time to get ready for their intended
use or sale. Other borrowing costs are expensed in the
period in which they are incurred.
(N) Taxation:
Income tax expense comprises Current tax and
Deferred tax charge or credit. Provision for Current
tax is made on the assessable income at the tax rate
applicable to the relevant assessment year. Minimum
alternative tax (MAT) paid in accordance with the tax
laws, which gives rise to future economic benefits in
the form of adjustment of future income tax liability, is
considered as an asset if there is convincing evidence
that the Company will pay normal income tax.
Accordingly, MAT is recognised as an asset in the
balance sheet when it is probable that the future
economic benefit associated with it will flow to the
Company and the asset can be measured reliably.
The deferred tax asset and/or deferred tax liability
is calculated by applying substantively enacted rate
as at balance sheet date. Deferred tax assets arising
mainly on account of brought forward losses and
unabsorbed depreciation is recognised if and only if
there is virtual certainty backed by convincing evidence
of its realisation. At each balance sheet date, carrying
amount of deferred tax assets is reviewed to reassure
realisation.
(O) Share Issue Expenses:
Issue expenses are adjusted against the Share
Premium.
(P) Government Grant/Loan:
Capital grants for project capital subsidy are credited to
capital reserves.
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