13 SIGNIFICANT ACCOUNTING POLICIES :

13.1 Basis of accounting and preparation of financial statements

The financial statements are prepared to comply in all material aspects under the Historical Cost convention and
in accordance with generally accepted accounting principles in India and the mandatory Accounting Standards
prescribed under Section 133 of the Companies Act 2013 ('Act') read with Rule- 7 of the Companies (Accounts)
Rules, 2014, the provisions of the Act (to the extent notified) and current practices prevailing.

13.2 Use of Estimates

The preparation of financial statements requires estimates and assumptions that affect the reported amount of
assets and liabilities, and disclosure of contingent liabilities at that date of the financial statements and the result
of operations during the reporting period. Although such estimates and assumptions are made on reasonable
and prudent basis taking into account all available information, actual results could differ from these estimates
and assumptions and such differences are recognised in the period in which results are crystallised.

13.3 Fixed Assets

a) Tangible Assets

Fixed Assets are stated at historical cost less accumulated depreciation. Cost includes acquisition cost and
directly attributable cost of bringing the assets to its working condition for its intended use

b) Intangible Assets

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortisation. The
cost comprises purchase price, borrowing costs and directly attributable costs of bringing the asset to its
working condition for the intended use.

c) Capital Work in Progress comprises the cost of fixed assets that are not yet ready for their intended use at the
reporting date.

13.4 Depreciation and Amortization

a) Depreciation on all tangible assets is charged on "Straight Line Method" according to the useful life mentioned

b) Intangible assets including software is amortised over the useful life not exceeding ten years.

c) Leasehold land is amortised over the period of lease.

13.5 Borrowing Cost

Borrowing costs attributable to the acquisition or construction of a qualifying asset are capitalized as part of the
cost of that asset. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its
intended use. Other borrowing costs are recognized as expense in the period in which these are incurred.

13.6 Inventories

Raw materials, stores, components and other consumables are valued at cost and net realisable value whichever
is lower. The work-in-progress is valued at cost on estimate. Generally GST paid on purchases is consider for
inventory valuation except where Input credit of GST paid on purchase is available than Inventories have been
valued excluding GST paid on purchases.

13.7 Cash and cash equivalents

Cash and cash equivalents in the Cash Flow Statement comprise cash at bank and in hand and short-term
investments with an original maturity of three months or less.

13.8 Revenue Recognition

(a) Revenues from the sale of product are recognized upon delivery, which is when title passes to the customer.

(b) Revenue from labour charges is recognized on completion of job. In case of divisible large contracts the
revenue

(c ) Interest income is recognised on time proportion basis taking into account the amount outstanding and rate
applicable (accrual basis)

13.9 Employee benefits

Employee benefits such as salaries, allowances, non-monetary benefits which fall due for payment within a
period of twelve months after rendering service, are charged as expense to the profit and loss account in the
period in which the service is rendered.

Retirement benefit in the form of provident fund is a defined contribution scheme. The contributions to the
provident fund are charged to the Statement of Profit and Loss for the year as an expenditure, when an
employee renders the related service. The Company has no obligation, other than the contribution payable to
the provident fund.

The Company operates defined benefit plan for its employees, viz. gratuity. The costs of providing benefits under
the plan are determined on the basis of actuarial valuation at each year-end. Actuarial valuation is carried out for
the plan using the projected unit credit method. Actuarial gains and losses for defined benefit plan are
recognized in full in the period in which they occur in the Statement of Profit and Loss.

¹³-¹⁰ Impairment Loss

The Company assesses at each Balance Sheet date whether there is any indication that any asset may be
impaired and if such indication exists, the carrying value of such asset is reduced to its recoverable amount and a
provision is made for such impairment loss in the statement of profit and loss. If at the Balance Sheet date, there
is an indication that a previously assess impairment loss no longer exists, the recoverable amount is reassessed
and the asset is reflected at the recoverable amount subject to maximum of depreciated historical costs.

13.11 Earning Per Share

Basic Earnings per share are calculated by dividing the net profit or loss for the period attributable to equity
shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to
equity shareholders and the weighted average number of shares outstanding during the period are adjusted for
the effects of all dilutive potential equity shares.

13.12 Taxation

(a) Tax expense comprises of current tax and deferred tax.

(b) Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax
rates.

(c ) Deferred tax expense or benefit is recognized on timing differences being the difference between taxable
income and accounting income that originate in one period and is likely to reverse in one or more subsequent
periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted
or substantively enacted by the balance sheet date.

In the event of unabsorbed depreciation and carry forward of losses, deferred tax assets are recognized only to
the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income
will be available to realize such assets. In other situations, deferred tax assets are recognized only to the extent
that there is reasonable certainty that sufficient future taxable income will be available to realize these assets.