2 Summary of Significant Accounting Policies

2.01 Basis of preparation

The financial statements have been prepared in
accordance with generally accepted accounting
principles in India (Indian GAAP) under the historical
cost convention on an accrual basis in compliance
with all material aspects of the Accounting Standards
(AS) notified under section 133 of the Companies Act
2013, read together with Rule 7 of the Companies
(Accounts) Rules 2014. The accounting policies
adopted in the preparation of financial statements
have been consistently applied except where a newly
issued accounting standard is initially adopted or a
revision to an existing accounting standard requires a
change in the accounting policy until now (hitherto)
in use with those of previous year. The financial
statements have been authorized to be issued by the
Board of Directors of the Company in the meeting held
on May 24, 2025.

"All assets and liabilities have been classified as current
or non-current as per the Company's normal operating
cycle, and other criteria set out in the Schedule III to
the Companies Act, 2013. Based on the nature of
business and the time between the acquisition of
assets for processing and their realization in cash
and cash equivalents, the Company has ascertained
its operating cycle as 12 months for the purpose
of current or non-current classification of assets
and liabilities. "

2.02 Use of estimates

The preparation of financial statements requires the
management to make judgments, estimates and
assumptions that affect the reported amounts of
revenues, expenses, assets and liabilities and disclosure
of contingent liabilities, at the end of the reporting
period. Although, these estimates are based on the
management's best knowledge of current events
and actions, uncertainty about these assumptions
and estimates could result in the outcomes requiring
a material adjustment to the carrying amounts of
assets or liabilities in future periods.

2.03 Property, Plant and Equipment
Tangible assets

"Tangible assets, capital work in progress are stated
at cost, less accumulated depreciation, revaluation
and impairment losses, if any. Cost comprises the
purchase price, borrowing costs, if capitalization
criteria are met and any cost attributable to bringing
the assets to its working condition for its intended
use which includes taxes, freight, and installation and
allocated incidental expenditure during construction/
acquisition and exclusive Input tax credit (IGST/CGST
and SGST) or other tax credit available to the Company.
When parts of an item of tangible assets have different
useful lives, they are accounted for as separate items
(major components) of property, plant and equipment.
Subsequent expenditure relating to tangible assets
is capitalized only if such expenditure results in an
increase in the future benefits from such asset beyond
its previously assessed standard of performance.
Any item of Property, Plant and Equipment is
derecognized on disposal or when no future
economic benefits are expected from its use or
disposal. The gain or loss arising on derecognition
is recognized in the Statement of Profit and Loss.
Any item of Property, Plant and Equipment whose
value is less than ' 5000 is being charged off to Profit
and Loss Account"

Intangible assets

"An intangible asset is recognized when it is probable
that the future economic benefits attributable to the
asset will flow to the enterprise and where its cost
can be reliably measured. Intangible assets are stated
at cost of acquisition less accumulated amortization
and impairment losses, if any. Cost comprises the
purchase price and any cost attributable to bringing

the assets to its working condition for its intended
use which includes taxes, freight, and installation and
allocated incidental expenditure during development /
acquisition and exclusive of Input tax credit (IGST/CGST
and SGST) or other tax credit available to the Company.
Subsequent expenditure relating to intangible assets
is capitalized only if such expenditure results in an
increase in the future benefits from such asset beyond
its previously assessed standard of performance.
Gains or losses arising from the retirement or
disposal of an intangible asset are determined as
the difference between the net disposal proceeds
and the carrying amount of the asset and
recognized as income or expense in the Statement of
Profit and Loss."

2.04 Depreciation on property, plant and
equipments

Based on management's evaluation, useful life
prescribed in Schedule II of the Companies Act,
2013 represent actual useful life of property, plant
and equipment. The Company uses Straight Line
Methods and has used following useful lives to provide
depreciation of different class of its property, plant
and equipment and Intangible assets.

that of the remaining asset. (Component Accounting)
Leasehold improvements are depreciated over their
estimated useful life, or the remaining period of lease
from the date of capitalization, whichever is shorter.
Depreciation on addition to tangible assets is provided
on pro-rata basis from the date the assets are ready for
intended use.Depreciation onsale/discard from tangible
assets is provided for upto the date of sale, deduction
or discard of tangible assets as the case may be.
The useful life, residual value and the depreciation
method are reviewed atleast at each year end. If
the expectations differ from previous estimates, the
changes are accounted for prospectively as a change
in accounting estimate."

2.05 Amortization of Intangible assets

Amortization of intangible assets has been calculated
on straight line basis at the following rates, based on
management estimates, which in the opinion of the
management are reflective of the estimated useful
lives of the Intangible assets.

2.07 Borrowing Costs

"Borrowing cost includes interest, amortization
of ancillary costs incurred in connection with the
arrangement of borrowings and exchange differences
arising from foreign currency borrowings to the extent
they are regarded as an adjustment to the interest cost.
Borrowing costs that are directly attributable to the
acquisition, construction or production of an asset
that takes a substantial period of time to get ready
for its intended use or sale are capitalized until such
time as the assets are substantially ready for their
intended use or sale. All other borrowing costs are
recognized as expenditure in the period in which they
are incurred."

2.08 Investment

"Investments, which are readily realizable and
intended to be held for not more than one year
from the date on which such investments are
made, are classified as current investments.
On initial recognition, all investments are
measured at cost. The cost comprises purchase
price and directly attributable acquisition

charges such as brokerage, fees and duties.
Current investments are carried in the financial
statements at lower of cost and fair value determined
on an individual investment basis. However, provision
for diminution in value is made to recognize a decline
other than temporary in the value of the investments.
On disposal of an investment, the difference between
its carrying amount and net disposal proceeds is
charged or credited to the Statement of Profit and
Loss"

2.09 Foreign currency translation
Initial recognition:

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

Subsequent recognition:

Foreign currency monetary items are reported using
the closing rate. Non-monetary items which are
carried in terms of historical cost denominated in a
foreign currency are reported using the exchange rate
at the date of the transaction; non-monetary items
which are carried at fair value or other similar valuation
denominated in a foreign currency are reported using
the exchange rates that existed when such values
were determined.

Exchange differences:

Exchange differences arising on the settlement of
monetary items or on reporting the Company's

monetary items at rates different from those at which
they were initially recorded during the year, or reported
in previous financial statements, are recognized as
income or as expenses in the year in which they occur"

2.10 Revenue recognition

Revenue is recognized to the extent, that it is probable
that the economic benefits will flow to the Company
and the revenue can be reliably measured.

Revenue from sale of goods

Revenue from sale of goods is recognized when the
significant risks and rewards of ownership of the goods
are transferred to the buyer and are recorded net of
trade discounts, rebates, and Goods and Service Tax
'Unbilled receivables' included in trade receivables
represent cost and earnings in excess of billings as at
the balance sheet date. "

Revenue from services

Revenue from services is recognized pro-rata over
the period of the contract as and when services are
rendered and the collectability is reasonably assured.
The revenue is recognized net of Goods and service tax.
'Unearned revenues' included in other current liabilities
represent billing in excess of revenue recognized."

Interest Income

Interest Income is recognized on a time proportion
basis taking into account the amount outstanding and
applicable interest rate.

Dividend Income

"Dividend is recognized when the Company's right to
receive dividend is established."

2.11 Retirement and other employee benefits
Short Term Employee Benefits

Employee benefits payable wholly within twelve
months of rendering of the service are classified as
short term employee benefits and are recognised in
the period in which the employee renders the related
service.

Defined contribution plan

The Company makes defined contribution to
Government Employee Provident Fund, Government
Employee Pension Fund, Employee Deposit Linked
Insurance, ESI and Superannuation Schemes, which
are recognized in the Statement of Profit and Loss on
accrual basis.

Defined Benefit Plan- Gratuity

The Company provides for retirement benefits in
the form of Gratuity. Benefits payable to eligible
employees of the company with respect to gratuity,

a defined benefit plan is accounted for on the basis of
an actuarial valuation as at the Balance Sheet date. In
accordance with the Payment of Gratuity Act, 1972,
the plan provides for lump sum payments to vested
employees on retirement, death while in service or
on termination of employment an amount equivalent
to 15 days basic salary for each completed year of
service. Vesting occurs upon completion of five years
of service. The present value of such obligation is
determined by the projected unit credit method and
adjusted for past service cost and fair value of plan
assets as at the balance sheet date through which the
obligations are to be settled. The resultant actuarial
gain or loss on change in present value of the defined
benefit obligation or change in return of the plan
assets is recognized as an income or expense in the
Statement of Profit and Loss.

Other long-term benefits
Leave encashment- Encashable

"The employees are entitled for 15 days leave during
the calendar year, which can be accumulated up to 30
days. The company provides for the liability at year
end on account of unavailed leave as per the actuarial
valuation using the Projected Unit Credit Method.
Actuarial gains and losses are recognized in the
Statement of Profit and Loss as and when incurred."

2.12 Cash and cash equivalents

"Cash and cash equivalents include cash in hand,
demand deposits with banks, other short term highly
liquid investments with original maturities of three
months or less."

2.13 Inventories

Raw materials, components, stores and spares, and
packing material are valued at cost. However, these
items are considered to be realizable at replacement
cost if the finished goods, in which they will be used,
are expected to be sold below cost.

"Cost of inventories is computed on a weighted-
average basis. Cost includes purchase price, (excluding
those subsequently recoverable by the enterprise from
the concerned revenue authorities), freight inwards
and other expenditure incurred in bringing such
inventories to their present location and condition.
Work in progress and manufactured finished goods are
valued at the lower of cost and net realizable value.
Cost of work in progress and manufactured finished
goods is determined on the weighted average basis
and comprises direct material, Cost of conversion and
other costs incurred in bringing these inventories to
their present location and condition. Cost of traded

goods is determined on a weighted average basis.
Provision of obsolescence on inventories is considered
on the basis of management's estimate based on
demand and market of the inventories."

Net realizable value is the estimated selling price in
the ordinary course of business, less the estimated
cost of completion and the estimated costs necessary
to make the sale. The comparison of cost and net
realizable value is made on item by item basis.

2.14 Income Taxes

"Tax expense for the period comprises of current
tax, deferred tax and Minimum alternate tax credit
(Wherever applicable).

Provision for current tax is made on the basis of
estimated taxable income for the current accounting
year in accordance with the Income-tax Act, 1961.
Current tax assets and current tax liabilities are offset
when there is a legally enforceable right to set off
the recognized amounts, and there is an intention to
settle the asset and the liability on a net basis. "

"The deferred tax for timing differences between
the book and tax profits for the year is accounted
for, using the tax rates and laws that have been
substantively enacted as of the reporting date.
Deferred tax charge or credit reflects the tax effects
of timing differences between accounting income and
taxable income for the period. The deferred tax charge
or credit and the corresponding deferred tax liabilities
or assets are recognized using the tax rates that have
been enacted or substantively enacted by the balance
sheet date. Deferred tax assets are recognized
only to the extent there is reasonable certainty
that the assets can be realized in future; however,
where there is unabsorbed depreciation or carry
forward of losses, deferred tax assets are recognized
only if there is a virtual certainty of realization of
such assets. Deferred tax assets are reviewed at
each balance sheet date and are written-down or
written up to reflect the amount that is reasonably/
virtually certain (as the case may be) to be realized.
At each reporting date, the Company reassesses the
unrecognized deferred tax assets, if any."

2.15 As a Lessee:

Finance leases, which effectively transfers to the
Company substantially all the risks and benefits
incidental to ownership of the leased item, are
capitalized at the inception of the lease term at the
lower of the fair value of the leased property and
present value of minimum lease payments. Lease
payments are apportioned between the finance

charges and reduction of the lease liability so as to
achieve a constant rate of interest on the remaining
balance of the liability. Finance charges are recognized
as finance costs in the Statement of Profit and
Loss. Lease management fees, legal charges and
other initial direct costs of lease are capitalized.
A leased asset is depreciated on a straight-line basis
over the useful life of the asset assessed by the
management (or the useful life envisaged in Schedule
II to the Companies Act, 2013, whichever is lower).
However, if there is no reasonable certainty that the
Company will obtain the ownership by the end of the
lease term, the capitalized asset is depreciated on a
straight-line basis over the shorter of the estimated
useful life of the asset (the lease term or the useful life
envisaged in Schedule II to the Companies Act, 2013).
Leases, where the lessor effectively retains
substantially all the risks and benefits of ownership
of the leased item, are classified as operating leases.
Operating lease payments are recognized as an
expense in the Statement of Profit and Loss on a
straight-line basis over the lease term."

“As a Lessor:

Leases in which the Company transfers substantially
all the risks and benefits of ownership of the asset are
classified as finance leases. Assets given under finance
lease are recognized as a receivable at an amount
equal to the net investment in the lease. After initial
recognition, the Company apportions lease rentals
between the principal repayment and interest income
so as to achieve a constant periodic rate of return
on the net investment outstanding in respect of the
finance lease. The interest income is recognized in the
Statement of Profit and Loss. Initial direct costs such
as legal costs, brokerage costs, etc. are recognized
immediately in the Statement of Profit and Loss.
Leases in which the Company does not transfer
substantially all the risks and benefits of ownership
of the asset are classified as operating leases. Assets
subject to operating leases are included in property,
plant and equipment assets. Lease income on an
operating lease is recognized in the Statement of
Profit and Loss on a straight-line basis over the lease
term. Costs, including depreciation, are recognized as
an expense in the Statement of Profit and Loss. Initial
direct costs such as legal costs, brokerage costs, etc.
are recognized immediately in the Statement of Profit
and Loss"