Corporate Information:

Macpower CNC Machines Limited was incorporated in 2003. The Company is situated o- Plot No. 2234. Near Kranti Gate. GIDC Metoda. Rajkot - 360021 Gujarat. The Company is engaged in the business of manufacturing and sale of CNC and VMC Machines.

1 Basis of Preparation and presentation

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards ("Ind AS") notified under section 133 of the Companies Act 2013. read together with the Companies(lnd^;an Accounting Standards) Rules. 2015. as amended and presentation requirements of Division II of schedule III to the Companies Act. 2013 (as amended), other relever? provisions of the act, and other accounting principles generally accepted in India, on the historical cost basis except tor certain financial instruments that are measured at fair values, as explained in the accounting policies below.

The financial statements have been prepared on accrual basis and under historical cost convention except certain financial assets and liabilities which are measured at fair value.

The Company has prepared the financial statements on the basis that it will continue to operate as a going concern.

2 Summary of significant accounting policies followed by the Company

2.1 Accounting Charges:

(I) The Company follows the mercantile system of accounting and recognises income and expenditure on on accrual basis except in case of significant uncertainties.

(ii) The Company maintains its accounts on accrual basis following historical cost convention, except for certain assets and liabilities that are measured at fair value in accordance with Ir.d AS.

(iii) Estimates and assumptions used in the preparation of these financial statements and disclosures made therein are based upon Management's evaluation of the relevant facts and circumstances as on the date of the financial statements, which may differ from the actual results at a subsequent date

Key Estimates

The preparation of standalone financial statements requires management to make judgments, estimates and assumptions in the application of accounting policies that affect the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Continuous evaluation is done on the estimation and judgments based on historical experience and other factors, including expectations of future events that are believed to be reasonable. Revisions to accounting estimates are recognised prospectively.

Information about critical judgments in applying accounting policies, as well as estimates and assumptions that have the most significant effect to the carrying amounts of assets and liabilities within the next financial year, are included in the following notes:

A. Estimate of Tax

Recognisation of provision of current fax and deferred fax refer- Note 2.5

B. _EstjmaJjg n _gf. useful .1 iyes-.3ridjg.sj dual v.qlu^.QL^QXiet.ty^Elflni g.n;iejauip,[r^t.gn^ijatgrigi die. Qis&U.

C. Lease

Measurement of Right of Use Asset and Lease l abilities refer-Note-2.10

Pi.LQna term Employee benefit pi.gn

Estimation of Long term Employee benefit plan refer Note 2.9 E. Provision. Contingent Liobilities and Contingent Assets:

Estimating amount of provisions refer Note 2.13

2.2 Current vs Non Current Classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is classified as cunrent when it is:-

a. Expected to be realized or intended to sold or consumed in normal operating cycle

b. held pnmarily for the purpose of trading;

c. expected to be realized within twelve months after the reporting period: or

d. cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period

All other assets are classified as non-current.

A liability is current when

a. expected to be settled in normal operating cycle

b. held primarily for the purpose ot trading:

c. due to be settled within twelve months after the reporting period; or

d. there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

All other liabilities are classified as non-current.

Deferred Tax Assets and Liabilities are classified as noncurrenf assets and liabilities respectively.

2.3 Revenue Recognition:

a Revenue from sale of goods is recognised when control of the machine being sold is transferred to the customer and when there are no longer any unfulfilled obligations. The Performance Obligations in the contracts are fulfilled at the time of dispatch, delivery or upon formal customer acceptance depending on customer terms.

b Revenue is measured on the basis of contracted price, alter deduction ol any trade discounts, and any taxes or duties collected on behalf of the Government such as goods and services tax. etc. Revenue is only recognised to the extent that it is highly probable a significant reversal will not occur.

c Income from services rendered is recognised based on agreements/arrangements with the customers as the service is performed and there are no unfulfilled obligations.

d Revenue in respect ol other income is recognised when no significant uncertainty as to its determination or realisation exists.

2 4 Property, plant and equipment and intangible Assets

Property, plant and equipment

a Property, plant and equipment are stated at cost less accumulated depreciation / amortisation and impairment loss, if any. except freehold land which is carried at cost. The cos! comprises its purchases price, borrowing cost and any cost directly attributable to the bringing the assets to its working condition for its intended use, net charges on foreign exchange contracts and adjustment arising from exchange rate variations attributable to the assets. Subsequent expenditures related to an item of Property, plant and equipment are added to its book value only if they increases the future benefits from the existing asset beyond its previously assessed standard of performance.

b Property, plant and equipments which are not ready tor intended use as on the date of Balance Sheet are disclosed as "Capital work-in-progress".

c Own construction or manufactured PPE is copitalised at cost including administrative and other general overhead expenses that are specifically attributable to construction or acquisition of PPE or bringing the PPE to working condition are allocated and capitalised as a port of the cost of the PPE.

d All other expenses on Property, plant and equipment, including repair and maintenance expenditure and replacement expenditure of parts, are charged to Statement of Profit and Loss for the period during the which such expenses are incurred.

e Gains or losses thaf arise on disposal or retirement of an asset are measured as the difference between net disposal proceeds and the carrying value ot on asset and are recognised >n the statement of profit and loss when the asset is derecognised.

f Depreciation methods, estimated useful lives and residual value:

The management of the company believes that the useful lives as given below best represent the useful lives of these assets based on internal assessment and supported by technical advice wherever necessary which is as prescribed under Part C of Schedule II of the Companies Act 2013.

Intangible Assets

a Intangible assets purchased are initially measured at cost. The cost of an intangible asset comprises its purchase price including duties and taxes and any costs directly attributable to making the osset ready for their intended use.

b Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure are recognised in standalone statement of profit or loss as incurred.

c Subsequently, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses, if any.

d Amortization methods, estimated useful lives and residual value:-

The useful lives of intangible assets are assessed as either finite or infinite. Finite life intangible assets are amortised on a straight-line basis over the period of their estimated useful lives. Estimated useful lives by _major class of finite-life intangible assets are as follows:_

Impairment of Assets

At the date of balance sheet, if there are indications of impairment and the carrying amount of the cash generating unit exceeds its recoverable amount ji.e. the higher of the fair value less costs of disposal and value in use), an impairment loss is recognised. The carrying amount is reduced to the recoverable amount and the reduction is recognised as on impairment loss in the profit or loss. The impairment loss recognised in the prior accounting period is reversed if there has been a change in the estimate of recoverable amount. Post impairment, depreciation is provided on the revised carrying value of the impaired asset over its remaining useful life.

Reasonable assumptions are made by the management in estimating the value-in-use ond fair value less costs of disposal. Management has considered the indicators required for impairment testing and estimated reliably that there is no impairment loss for the purpose of Ind AS 36 and AS 28.

2.5 Taxation

Income tax expenses or credit for the period comprised of tax payable on the current period's taxable income based on the applicable income tax rate, the changes in deferred tax assets ana liabilities attributable to temporary differences and to unused tax losses and previous year tax adjustments.

Tax is recognised in the Statement of Profit and Loss, except to the extent that it relates to items recognised directly in equity or other comprehensive income, in such cases the tax is also recognised directly in equity or in other comprehensive income. Any subsequent change in direct tax on items initially recognised in equity or other comprehensive income is also recognised in equity or other comprehensive income, such change could be for change in tax rate.

The current income tax charge or credit is calculated on the basis of the tax law enacted after considering allowances, exemptions and unused tax losses under the provisions of the applicable Income Tax Laws. Current tax assets and current tax liabilities are off set, and presented as net Deferred income tax is recognised, using the balance sheet method, on temporary differences arising between the tax base of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined using fax rates and laws that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax liabilities are recognised tor all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if ir is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax assets and deferred tax liabilities are off set. and presented os net.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available against which the temporary differences can be utilised.

2.6 Financial Instruments

(a) Other investments and financial assets

(i) Classification

The Company classifies its financial assets in the following measurement categories:

Those to be measured subsequently, of fair value (either through other comprehensive income, or through profit or loss), and those already measured, at amortised cost.

The classification is done depending upon the Company's business mode! for managing the financial assets and the contractual terms of the cash flows. For assets measured at fair value, gains and losses will be recorded in profit or loss.

(ii) Measurement

At initial recognition

At initial recognition, the Company measures a financial asset at Its fair value.

Subsequent Measurement

All recognised financial assets are subsequently measured in (hen entirety either at amortised cost or at fair value as follows:

I. investments in debt instruments that are designated as fair value through profit or loss (FVTPL) - at fair value. Debt instruments at FVTPL is a residual category for debt instruments, if any. and all changes are recognised in profit or loss.

7. Investments in debt instruments that meet the following conditions are subsequently measured at amortised cost (unless the same designated as fair value through profit or loss):

(i) The asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows:

and

(ii) The contractual terms of instrument g ve rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

3. Investment in debt instruments that meet the following conditions are subsequently measured at fair value through other comprehensive income [FVFOCI] (unless the same are designated as fair value through profit or loss).

(i) The asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets: and

(ii) The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of principal ond interest on the principal amount outstanding.

4. Trade receivables, security deposits, cash and cash equivalents, employee and other advances - at amortised cost.

(iii) Impairment of financial assets

The Company assesses on a forward looking basis of the expected credit losses associated with its assets carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk and if so. assess the need to provide for the same in the Statement of Profit and Loss.

(Iv) Derecognition of financial assets

A financial asset is derecognised only when Company has transferred the rights to receive cash flows from the financial asset. Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised.

(v) Income recognition Interest Income

Interest income from fixed deposits is recognised using the effective interest rate method. When calculating the effective interest rate, the Company estimates the expected cash flows by considering ail the contractual terms of the financial instrument.

(b) Financial Liability

(i) Classification as debt or Equity

Debt and equity instruments issued by the Compqny qre classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definition of a financial liability and an equity instrument.

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

(ii) Initial recognition and measurement

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Company's financial liabilities include borrowings, trade payables and other financial liabilities.

(iii) Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

a. Trade and other payable

These amounts represent obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. These payable are classified as current liabilities' if payments are due within one year or less otherwise they are presented as ‘non-current liabilities'. Trade payables are subsequently measured at amortised cost using the effective interest method.

b. Derecognition

Liability is removed from the balance sheel when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non cash assets transferred or liabilities assumed, is recognised in profit or loss as other gains/ (losses).

When an existing financial liability is replaced by another from the some lender or substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss

2.7 Foreign Currency Transactions:

items included in the financial statements are measured and presented in Indian rupee {INR). which is Company’s functional ana presentation currency.

a Initial Recognition:

Foreign currency transactions are recorded in the reporting currency by applying to the foreign currency amount the exchange rate between the reporting current and the foreign currency at the date of the transactions.

b Conversion:

Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non- monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transactions. Non- monetary items, which are measured at fair value or others similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.

c Exchange Differences:

The company accounts for exchange differences ansing on translation/ settlement ol foreign currency monetary are recognized as Income or as expenses in the period in which they arise.

2.8 Inventories:

Inventories are valued after providing for obsolescence, as under:

Raw Materials. Work In-Prcgress and Finished Goods are valued at Cost or Net Realizable Value whichever is lower using FIFO method. Waste and Scrap are valued at Ne* Realisable Value.

Cost of Inventories comprises cost of purchase, cost of conversion and other costs incurred in bringing the inventories to the present location and condition.

2.9 Employee Benefits:

A Short-term employee benefits:

a

Employee benefits such as salaries, wages, bonus, etc falling due wholly within twelve months of rendenng the service are classified as short-term employee benefits and are expensed in the period in which the employee renders the service.

B Long term employee benefits

a Retirement benefit in the form of provident fund is a defined contribution scheme. The company has no obligation, other than the contribution payable to the provident fund. The company recognizes contributions payable to the provident fund scheme as an expenditure, when an employee renders the related services.

b The Company has defined benefit plans for its employees, viz., gratuity. The cost of providing benefits under this plans 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 plans are recognised in full in the period in which they occurs in the statement of profit and loss.

During the year, company has nor incurred any borrowing cost which is required to be capitalised. However the policy for the same is as under:

a Borrowing cost includes interest and ancillary costs incurred in connection with the arrangement of borrowings.

b Borrowing costs directly attributable to the construction of an asset that necessarily take a substantial period of time to get ready for its intended use are capitalized as part of the cost of the respective asset. All of these borrowing costs are expensed in the period they are incurred.

2.10 Lease:

Company as lessee measures the right-of-use asset at cost by recognition of nght-of-use asset and a lease liability on initial measurement of the right-of-use asset at the commencement date of the lease. The cost of the right-of-use asset comprises:

i) the amount of the initio- measurement of the lease liability.

ii) any lease payments made at or before the commencement date less any incentives received. iil| any initial direct costs incurred,

iv) an estimate of costs to be incurred in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease, unless those costs ore incurred to produce inventories.

Lease liability is initially measured at the present value of the lease payments that ore not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if the rate cannot be readily determined incremental borrowing rate is considered. Interest on lease liability in each period during the lease is the amount that produces a constant periodic rate of interest on the remaining balance of the lease liability.

Lease payments comprises the following payments for the right to use asset during the lease term thai are not paid at the commencement date:

i) fixed payments less any lease incentives receivable

ii) variable lease payments

ill) amounts expected to be payable under residual value guarantees

iv) the exercise price of a purchase option, if the Company is reasonably certain to exercise that option

v) payments of penalties for terminating the lease, if the lease term reflects the Company exercising an option to terminate the lease.

Subsequent measurement of the right-ol-use asset after the commencement date is at cost model, the value of right-of-use asset is Initially measured cost less accumulated depreciation and any accumulated impairment loss and aajustment for any re-measurement of the lease liability.

The nght-of-use asset is depreciated from the commencement date to the earlier of the end of the useful life of the asset or the end of lease term, unless lease transfers ownership of the underlying asset to the company by the end of the lease term or if the cost of the right-cf-asset reflects that the Company will exercise a purchase option, in such case the Company depreciates asset to the end of the useful life. Subsequent measurement of the lease liability after the commencement date reflects the nitially measured liability increased by interest on lease liability, reduced by lease payments and re measuring the carrying amount to reflect any re-assessment or lease modification.

Right-of-use asset and lease liability are presented on the face of balance sheet. Depreciation charge on righf-tc-use is presented under depreciation expense as a separate line item. Interest charge on lease liability is presented under finance cost as a separate line item. Under the cash (low statement, cash flow from lease payments including interest are presented under financing activities.

2.11 Cash and cash equivalents

Cash and cash equivalents includes cash on hand and at bank, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less that are readily convertible ?o a known amount of cash and are subject to an insignificant risk of changes in value and are held for the purpose of meeting short term cash commitments. For the purpose of the Statement of Cash Rows, cash and cash equivalents consists of cash and short term deposits, as defined above, net of outstanding bank overdraft as they are being considered as integral part of the Company's cash management.

2.12 Earning Per Share:

Basic earnings per share is 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. Eomings considered in ascertaining the Company's earnings per share is the net profit tor the period. The weighted average number of equity shares outstanding during the period and all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares, that have changed the number of equity shares outstanding, without a corresponding change in resources. 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 share outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

2.13 Provision. Contingent Liabilities and Contingent Assets:

a Provision is recognised in the accounts when there is a present obligation as a result of past event(s) and it is probable that an outflow of resources will be required to settle the obligation and reliable estimate can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates reviewed at each reporting date and adjusted to reflect the current best estimate.

b Contingent liabilities are disclosed unless the possibility of outflow of resources is remote. Contingent assets are not recognised in the financial statements.

2.14 Statement of Cash Flows

Statement of Cash Flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flow from operating activities is reported using indirect method, adjusting the profit before tax excluding exceptional items tor the effects of:

(i) changes during the period in inventories and operating receivables and payables, transactions of a non-cash nature;

(ii) non-cash items such as depreciation, provisions, unrealised foreign currency gains and losses; and

(iii) all other items for which the cash effects are investing or financing cash flows.