3. Summary of significant accounting policies
For the year ended 31st March 2025, the Schedule III notified under the Companies Act
2013, has become applicable to the company, for preparation and presentation of its
financial statements. The adoption of Schedule III does not impact recognition and
measurement principles followed for preparation of financial statements. However, it has
significant impact on presentation and disclosures made in the financial statements.
a. Use of estimates
The preparation of financial statements in conformity with Indian GAAP requires the
management to make judgments, estimates and assumptions that affect the reported
amounts of revenues, expenses, assets and liabilities and the 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.
b. Property Plant & equipment
Property, Plant & Equipment are stated at cost, net of accumulated depreciation and
accumulated losses, if any The cost comprises Purchase price, borrowing cost if
capitalization criteria are met and directly attributable cost of bringing the asset to its
working condition for the intended use. Any trade discounts and rebates are deducted in
arriving at the purchase price.
Subsequent expenditure related to an item of property plant & equipment is added to its
book value only if it increase the future benefits from the existing assets beyond its
previously assessed standard of performance. All other expenses on existing fixed assets,
including day to day repair & maintenance expenditure and cost of replacing parts are
charged to the statement of profit & loss for the period during which such expenses are
incurred.
Gains or losses arising from derecognition of property, plant & equipment are measured as
the difference between the net disposal proceeds and the carrying amount of the assets and
are recognized in the statement of profit & loss when the assets is derecognized.
c. Depreciation on Property, Plant and equipment
The company is following Depreciation as per Written Down Value Rate and the in the
manner specified as per the companies Act 2013
Depreciable amount is the cost of an asset, or other amount substituted for cost, less its
residual value. Ordinarily, the residual value of an asset is often insignificant, but it should
generally be not more than 5% of the original cost of an assets.
d. Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost Following
initial recognition, intangible assets are carried at cost less accumulated amortization and
accumulated impairment losses, if any.
Intangible assets are amortised on straight line method over the period of 5 years. Such
intangible assets and intangible assets not yet available for use are tested for impairment
annually, either individually or at the cash-generating unit level. All other intangible assets
are assessed for impairment whenever there is an indication that the intangible asset may
be impaired.
The amortization period and the amortization method are reviewed at least at each financial
year end. If the expected useful life of the asset is significantly different from previous
estimates, the amortization period is changed accordingly. If there has been a significant
change in the expected pattern of economic benefits from the asset, the amortization
method is changed to reflect the changed pattern. Such changes are accounted for in
accordance with AS Net Profit or Loss for the Period, Prior Period Items and Changes in
Accounting Policies.
Gains or losses arising from de-recognition of an intangible asset are measured as the
difference between the net of sale proceeds and the carrying amount of the asset and are
recognized in the statement of profit and loss when the asset is derecognized.
e. Leases
Finance leases, which transfer to title Company substantially all the risks and benefits
incidental to ownership of the leased iteiri, are capitalized at the inception of the lease at the
fair value of the leased asset or, if lower, at the present value of the minimum lease
payments. Lease payments are apportioned between the finance charges and reduction of
the lease liability to achieve a constant rate of interest on the remaining balance of the
liability. Finance charges are charged directly against income. Capitalized lease4 assets are
depreciated over the shorter of the estimated useful life of the asset or the lease ternt.
Leases where the lessor retains substantially all the risks and benefits of ownership of the
asset are classified as operating leases. Operating lease payments are recognized as an
expense in the income statement on a straight-line basis over the lease term.
f. 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 directly attributable to the acquisition, construction or production of an
asset that necessarily takes a substantial period to get ready for its intended use or sale are
capitalized as part of the cost of the respective asset All other borrowing costs are expensed
in the period they occur.
g. Impairment
The assesses at each reporting date whether there is an indication that an asset may be
impaired. If any indication exists, or when annual impairment testing for an asset is
required, the company estimates the asset's recoverable amount. An asset's recoverable
amount is the higher of an assets or cash-generating unit's (CGU) net selling price and its
value in use. The recoverable amount is determined for an individual asset, unless the asset
does not generate cash inflows that are largely independent of those from other assets or
groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable
amount, the asset is considered impaired and is written down to its recoverable amount In
assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset. In determining net selling price, recent market
transactions are considered, if available. If no such transactions can be identified, an
appropriate valuation model is used.
h. 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. All other investments are classified as long-term 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. Long-term investments are carried at cost.
However, provision for diminution in value is made to recognize a decline other than
temporary in the value of the investment.
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.
i. Inventories
Raw materials, components, stores and spares shall be valued at lower of cost and net
realizable value. Work in progress and finished goods are valued at lower of cost and net
realizable value.
j. 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.
k. Interest
Interest income is recognized on a time proportion basis considering the amount
outstanding and the applicable interest rate. Interest income is included under the head
"other income” in the statement of profit & loss.
l. Income tax
a. Tax expense comprises current and deferred tax. Current income-tax is measured at the
amount expected to be paid to the tax authorities in accordance with the Income-tax Act,
1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the
company operates. The tax rates and tax laws used to compute the amount are those that
are enacted or substantively enacted, at the reporting date.
b. Deferred income taxes reflect the impact of timing differences between taxable income and
accounting income originating during the current year and reversal of timing differences for
the earlier years.
m. Foreign Exchange Fluctuation
All differences in the foreign exchange fluctuation on monetary assets/liabilities has been
ognized at the time receipt/payment, unless material.
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