Note: 2 Significant Accounting Policies
1 Basis of Preparation:
The Statement of Assets and Liabilities of the Company
as on 31st March, 2025, and the Statement of Profit and
Loss and Statements of Cash Flows for the financial
year ended on 31st March, 2025 and the annexure
thereto (collectively, the "Financial Statements")
have been compiled by the management from the
Financial Statements of the Company for the financial
year ended on 31st March, 2025.
These financial statements are prepared in accordance
with Indian Generally Accepted Accounting Principles
(GAAP) under the historical cost convention on the
accrual basis. GAAP comprises mandatory accounting
standards as prescribed under Section 133 of the
Companies Act, 2013 ('Act') read with Rule 7 of the
Companies (Accounts) Rules, 2021
2 Revenue Recognition:
The company derives its revenues primarily from
engaging in the business of electrical contractors,
estimators, planners, designers, research workers,
dealers in electrical, mechanical, automobiles,
railway equipment and machinery in all branches of
engineering. Revenue from services provided under
fixed price contracts, where the outcome can be
estimated reliably, is recognized based on contract
activity. Revenue on time-and-material contracts are
recognized as the related services are performed
and the revenues from the end of the last billing to
the balance sheet date are recognized as unbilled
revenues.
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 in
accordance with AS-9, Revenue Recognition. Sales are
recognized on accrual basis, and only after transfer of
services to the customer.
Interest Income: Revenue is recognized on the time
proportion basis after taking into account the amount
outstanding and the rate applicable i.e, on the basis
of matching concept.
Dividend Income: Dividend Income is recognized
when the owner's right to receive payment is
established. No dividend income was recognized
during the financial year 2024-25, as no such income
was received.
Other Income: Other items of income and
expenditure are recognized on accrual basis and as a
going concern basis, and the accounting policies are
consistent with the generally accepted accounting
policies.
3 Property, Plant and Equipment Including
Intangible Assets:
Property, Plant and Equipments are stated at cost,
less accumulated depreciation. Cost includes cost of
acquisition including material cost, freight, installation
cost, duties and taxes, and other incidental expenses,
incurred up to the installation stage, related to
such acquisition. Property, Plant and Equipments
purchased in India by foreign currency are recorded
in Rupees, converted at the exchange rate prevailed
on the date of purchase. Intangible assets that are
acquired by the Company are measured initially at
cost. After initial recognition, an intangible asset is
carried at its cost less any accumulated amortisation
and any accumulated impairment loss.
4 Depreciation & Amortisation:
The Company has applied the estimated useful lives
as specified in Schedule II of the Companies Act, 2013
and calculated the depreciation as per the Straight
Line Method (SLM). Depreciation on new assets
acquired during the year is provided at the rates
applicable from the date of acquisition to the end of
the financial year. In respect of the assets sold during
the year, depreciation is provided from the beginning
of the year till the date of its disposal.
Intangible assets are amortised on a straight-line basis
over the estimated useful life as specified in Schedule II
of the Companies Act, 2013. The amortisation expense
on intangible assets with finite lives is recognised in the
statement of profit and loss. In respect of the assets
sold during the year, amortisation is provided from the
beginning of the year till the date of its disposal.
Capital work in-progress represents expenditure
incurred in respect of assets which are yet to be
brought to it working condition for its intended use and
are carried at cost. Cost includes related acquisition
expenses, construction or development cost, borrowing
costs capitalised and other direct expenditure.
5 Impairment of Assets:
The Management periodically assesses using, external
and internal sources, whether there is an indication
that an asset may be impaired. An impairment loss
is recognised wherever the carrying value of an asset
exceeds its recoverable amount. The recoverable
amount is higher of the asset's net selling price and
value in use, which means the present value of future
cash flows expected to arise from the continuing use
of the asset and its eventual disposal. Reversal of
impairment loss is recognised immediately as income
in the profit and loss account.
6 Use of Estimates:
The preparation of the financial statements in
conformity with Generally Accepted Accounting
Principles requires the management to make estimates
and assumptions that affect the reported balances
of assets and liabilities and disclosures relating to
contingent assets and liabilities as at the date of the
financial statements and the reported amounts of
income and expenses during the year. Examples of
such estimates include provisions for doubtful debts,
income taxes, post - sales customer support and the
useful lives of Property, Plant and Equipments and
intangible assets.
7 Inventories:
Inventory of consumables/spares and loose tools are
valued at lower of cost and net realisable value. The
cost is calculated at purchase price and expenditure
directly attributable to the acquisition of such
inventories for bringing them to their present location
and condition.
8 Trade Receivables:
A receivable represents the Company's right to an
amount of consideration that is unconditional (i.e.,
only the passage of time is required before payment
of the consideration is due).
9 Borrowing Costs :
Borrowing costs that are attributable to acquisition,
construction or production of qualifying assets, are
capitalized as part of the cost of such qualifying assets.
A qualifying asset is an asset that necessarily takes a
substantial period of time to get ready for intended
use. All other borrowing costs are charged to the
Statement of profit and loss in the period in which
they occur. Borrowing costs consist of interest and
other costs that an entity incurs in connection with the
borrowing of funds.
10 Foreign Currency Transactions:
Domestic Operation:
I . Initial Recognition :
A foreign currency transactions are recorded,
on initial recognition in the reporting currency,
by applying to the foreign currency amount the
exchange rate between the reporting currency
and the foreign currency at the date of the
transaction.
II . Measurement :
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 the values
were determined.
III . Treatment of Foreign Exchange :
Exchange differences arising on settlement/
restatement of foreign currency monetary assets
and liabilities of the Company are recognised as
income or expenses in the Statement of Profit
and Loss.
11 Employee Benefits:
Benefits such as salaries, wages and performance
incentives are charged to the statement of profit and
loss at the actual amounts due in the period in which
the employee renders the related service. However
the Company has not adopted any policy for payment
of Bonus and thus no amount has been charged to
profit and loss account or provisioned in the balance
sheet.
A. Post-Employment Benefits:
Defined Benefit Plan:
Gratuity liability is a defined benefit obligation and
is unfunded. The Company accounts for liability
for future gratuity benefits based on the actuarial
valuation using Projected Unit Credit Method
carried out as at the end of each financial year.
Defined Contribution Plan:
Provident Fund: Eligible employees receive
benefit from provident fund covered under the
Provident Fund Act. Both the employee and
the company make monthly contributions. The
employer contribution is charged off to Profit &
Loss Account as an expense.
12 Taxes on Income:
Income Tax expense is accounted for in accordance
with AS-22 "Accounting for Taxes on Income" for both
Current Tax and Deferred Tax stated below:
A. Current Tax:
Provision for current tax is made in accordance
with the provisions of the Income Tax Act,
1961.
B. Deferred Tax:
Deferred tax is recognised, subject to the
consideration of prudence, as the tax effect of
timing difference between the taxable income
and accounting income computed for the current
accounting year using the tax rates and tax laws
that have been enacted or substantially enacted
by the balance sheet date.
Deferred tax assets are recognised and carried
forward to the extent that there is a reasonable
certainty, except arising from unabsorbed
depreciation and carried forward losses, that
sufficient future taxable income will be available
against which such deferred tax assets can be
realised.
|