Accounting Policies of De Neers Tools Ltd. Company

Mar 31, 2025

2. Significant Accounting Policies
Basis of Preparation of Financial Statements

The Financial Statements of the Company have been prepared and presented in accordance with the Generally Accepted
Accounting Principles in India (''Indian GAAP''). It comprises the Accounting Standards notified u/s 133 read with section 469
of the Companies Act, 2013. The accounting policies have been framed, keeping in view the fundamental accounting
assumptions of Going Concern, Consistency and Accrual, and also the basic considerations of Prudence, Substance over form,
and Materiality. Based on the nature of products and the time between acquisition of assets and their realisation 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. These financial statements have been prepared on historical cost basis except certain
items like Financial Leases and Defined Benefit Plans are measured at fair value.

Use of Estimates

The preparation of financial statements requires the management to make certain estimates and assumptions that affect the
amounts reported in the financial statements and notes thereto. The management believes that these estimates and
assumptions are reasonable and prudent but the actual results may differ from them. They are reviewed on an on-going basis
and any revision to accounting estimates is recognised prospectively in current and future periods. Accounting estimates and
assumptions that have a significant effect on the amounts reported in the financial statements include:

i) Net Realisable value of items of Inventories

ii) Useful life and Residual value of Property, Plant and Equipment and Intangible Assets

iii) Defined Benefit obligations

iv) Deferred Tax asset or liability

v) Provisions for Trade Receivables

vi) Other Provisions and Contingencies

Property, Plant and Equipments

Property, plant and equipments are initially recognised at cost. Cost includes purchase price, taxes and duties and other costs
directly attributable to bringing the asset to the working condition for its intended use. However, cost excludes duties and
taxes wherever credit of such duties and taxes is availed. It is thereafter carried at its cost less accumulated depreciation and
accumulated impairment losses, if any.

Depreciation is provided under the ''Written-Down Value'' method as per the useful life specified in Schedule II to the
Companies Act, 2013. Residual values of assets are measured at 5% of their original cost. For assets added or disposed during
the year, depreciation is charged on pro-rata basis from the date of addition or till the date of disposal.

Impairment of Assets

At the end of each reporting period, the carrying amounts of Property, Plant & Equipment, and Intangible assets are tested
for impairment. An Impairment loss is recognised for an amount by which the asset''s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset''s fair value less costs of disposal and Value-in-use.
Value-in-use is the present value of future cash flows discounted using a rate which reflects the current market rates and the
risks specific to the asset.

For the purposes of assessing impairment, assets are grouped at the lowest levels (cash-generating units) for which
independent cash inflows can be identified. Impairment losses, if any, are recognised in the Statement of Profit and Loss and
included in depreciation and amortisation expenses.

Investments

Long-term investments are valued at cost less provision for diminution in value, if the diminution is other than temporary.
Current investments are valued at lower of cost and fair value. Gain or loss arising on the sale of investments is computed as
a difference between carrying amount and the proceeds from sale, net of any expenses. Such gain or loss is recognised in the
Statement of Profit and Loss.

Inventories

Inventories are valued at the lower of cost and net realisable value. Cost is computed on a ''First In First Out'' basis.

Cost of raw materials and stores and spares includes cost of purchase and other costs incurred in bringing the inventories to
their present location and condition. The aforesaid items are valued at net realisable value if the finished products in which
they are to be incorporated are expected to be sold at a loss. Cost of finished goods and work-in-progress include all costs of
purchases, conversion costs and other costs incurred in bringing the inventories to their present location and condition. The
net realisable value is the estimated selling price in the

ordinary course of business less the estimated costs of completion and estimated costs necessary to make the sale.

Trade Receivables and Loans and Advances

Trade Receivables and Loans and Advances are presented after making adequate provision for any shortfall in their recovery.
The provision and any subsequent recovery is recognised in the Profit and Loss statement. Bad debts are written off when
they are identified.

Cash and cash equivalents

All highly liquid financial instruments, which are readily convertible into known amount of cash that are subject to an
insignificant risk of change in value and having original maturities of three months or less from the date of purchase are
considered to be cash equivalents.

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Mar 31, 2024

2. Significant accounting policies

a. Basis of preparation of financial statements

The Financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). These have been prepared to comply in all material respects with the Accounting Standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared under the historical cost convention, on accrual basis and on principles of going concern. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

b. Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates. Differences between the actual results and estimates are recognized in the period in which the results are known / materialize.

c. 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. Specifically,

i) Revenue from sale of goods are recognized on accrual basis and only after transfer of goods to the customer. Sales are net of taxes applicable and sales returns.

ii) Revenue from rendering of services are recognized when the related services are performed. Services are net of taxes applicable.

in) Interest income is recognized on time proportion basis taking into account the amount outstanding and the rate applicable.

iv) Dividend on investments are recognized on receipt basis.

d. Property, Plant & Equipment

i) Tangibles

Tangible fixed assets are stated at cost of acquisition or construction, or at revalued amounts, net of impairment loss if any, less accumulated depreciation/amortization. The Company capitalizes all costs relating to the acquisition and installation ofFixed Assets.

e. Depreciation/Amortization

i) Depreciation on Tangible assets:

Depreciation is provided on written down value method at the rates and in the manner based on the useful lives prescribed under Schedule II of the Companies Act 2013 and the depreciation/amortization have been provided accordingly.

f. Impairment

The carrying amounts of assets are reviewed at each balance sheet date to assess whether there is any indication of impairment based on internal /external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset’s net selling price and value in use, which is determined by the present value of the estimated future cash flows. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

g. Investments

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as non-current investments. Current investments are valued at lower of cost and fair value determined on an individual investment basis. Changes in the carrying amount of current investments are recognized in the statement of profit and loss account. Non-current investments are valued at cost. However, provision for diminution in value is made to recognize a decline that is other than temporary in the value of investments, wherever considered necessary. Cost comprises cost of acquisition and related expenses such as brokerage and stamp duties.

h. Inventories

Inventories consisting of Stock in Trade are valued at the lower of cost and net realizable value. Cost is ascertained on a first in first out basis.

i. Employee benefits

All employee benefits payable/available within twelve months of rendering the services are classified as short term employee benefits. Benefits such as salaries, wages and bonus etc. are recognized in Profit & Loss A/c in the period in which the employee renders the related service.

i) Defined Contribution Plan:

Contributions as per the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 towards provident fund and pension fund are charged to the Statement of Profit and Loss for the year when the contributions to the respective funds are due. There is no other obligation other than the contribution payable to the respective funds.

ii) Defined Benefit Plan:

Gratuity being unfunded and are provided based on actuarial valuation made at the end of each financial year using the projected unit credit method. Or Provision for Employees’ Gratuity is provided for as on the date ofbalance sheet

j. Borrowing costs

i) Borrowing costs that are directly attributable to the acquisition of qualifying assets are capitalized for the period until the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use.

ii) Other Borrowing costs are recognized as expense in the period in which they are incurred.

k. Taxes on Income

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 Indian Income Tax Act, 1961 and tax laws prevailing in the respective tax jurisdictions where the Company operates.

Deferred Tax arising on account of "timing differences" and which are capable of reversal in one or more subsequent periods is recognized, using the tax rates and tax laws that are enacted or substantively enacted.

Deferred tax asset is recognized only to the extent there is reasonable certainty with respect to reversal of the same in future years as a matter of prudence.

l. Earnings per Share (EPS)

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by weighted average number of equity shares outstanding during the period. The weighted average number of equity shares is adjusted for events such as bonus issue and shares split 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 attributable to equity shareholders and the weighted average number of shares outstanding are adjusted for the effects of all dilutive potential equity shares if any.

m. Prior Period Items

Prior Period and Extraordinary items and Changes in Accounting Policies having material impact on the financial affairs of the Company are disclosed in financial statements.

n. Foreign currency transactions

i) Initial Recognition

Foreign currency transactions are recorded 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 transaction.

ii) Conversion

Foreign currency monetary items which are unsettled at the year-end are reported using the closing rate.

Exchange differences arising on the settlement of monetary items or on reporting 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 arise.

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Mar 31, 2023

1. Corporate information

De Neers Tools Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 2013.The Company is primarily engaged in the business of wholesale trading of Hardware T ools.

2. Significant accounting policiesa. Basis of preparation of financial statements

The Financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). These have been prepared to comply in all material respects with the Accounting Standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared under the historical cost convention, on accrual basis. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

b. Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

c. Fixed assets (i) Tangibles

(a) Tangible fixed assets are stated at cost of acquisition or construction, or at revalued amounts, net of impairment loss if any, less accumulated depreciation/amortisation. The Company capitalizes all costs including costs of borrowed funds and duties & taxes attributable to acquisition or construction of fixed assets, upto the date the assets are put to use. Assessment of indication of impairment of an asset is made at the year end and impairment loss, if any, recognized.

d. Depreciation/Amortisation on Fixed Assetsi) Depreciation on Tangible assets:

Depreciation is provided on written down value method at the rates and in the manner based on the useful lives prescribed under Schedule II of the Companies Act 2013 and the depreciation/amortization have been provided accordingly.

e. 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 of time 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.

f. Impairment

The carrying amounts of assets are reviewed at each balance sheet date to assess whether there is any indication of impairment based on internal /external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset''s net selling price and value in use. In assessing value in use, the Company measures it on the basis of undiscounted cash flows of next five years projections estimated based on current prices.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

g. 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. Specifically,

i) Revenue from sale of goods are recognized at the time of dispatch of goods to the customer. Sales are net of taxes applicable and sales returns.

ii) Revenue from rendering of services are recognized when the related services are performed. Services are net of taxes applicable.

iii) Interest income is recognized on time proportion basis taking into account the amount outstanding and the rate applicable.

h. Foreign currency transactions

Initial Recognition

Foreign currency transactions are recorded 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 transaction.

Conversion

Foreign currency monetary items which are unsettled at the year-end are reported using the closing rate.

Exchange differences arising on the settlement of monetary items or on reporting 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 arise.

i. Investments

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments or short term investments. All other investments are classified as non-current investments or long-term investments. Current investments are valued at lower of cost and fair value determined on an individual investment basis. Changes in the carrying amount of current investments are recognized in the statement of profit and loss account. Non-current investments are valued at cost. However, provision for diminution in value is made to recognize a decline that is other than temporary in the value of investments, wherever considered necessary. Cost comprises cost of acquisition and related expenses such as brokerage and stamp duties.

j. Inventories

Inventories are valued at the lower of cost and net realizable value. Cost is ascertained on FIFO Basis.

k. Employee benefits

i) All employee benefits payable/available within twelve months of rendering the services are classified as short term employee benefits. Benefits such as salaries, wages and bonus etc. are recognized in Profit & Loss A/c in the period in which the employee renders the related service.

ii) All employees are covered under contributory provident fund benefit of a contribution of 12% of salary and certain allowances. It is a defined contribution scheme and the contribution is charged to the statement of profit and loss account of the year when the contribution to the respective fund is due. There is no obligation other than the contribution payable to the respective fund.

iii) Provision for Employees'' Gratuity is provided for as on the date of balance sheet.

The Company has adopted AS-15 (Revised) on disclosure in respect of “Employee Benefits” prescribed by the Companies (Accounting Standards) Rules, 2006. There was no material differential liability arising due to adoption of this standard accordingly no adjustments were made to opening balance of Profit & Loss Account under the transitional provision of AS-15 (Revised).

l. Income and deferred taxes

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 Indian Income Tax Act, 1961 and tax laws prevailing in the respective tax jurisdictions where the Company operates.

Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantially enacted at the balance sheet date.

Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Deferred tax asset on unabsorbed depreciation and carry forward losses is recognized only to the extent that there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

At each balance sheet date, the Company reassesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Minimum Alternate Tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e. the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset, the said asset is created by way of credit to the statement of profit and loss and shown as “MAT Credit Entitlement”. The Company reviews the “MAT Credit Entitlement” asset at each reporting date and writes it down to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period and utilize the MAT Credit Entitlement.

m. Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by weighted average number of equity shares outstanding during the period. The weighted average number of equity shares is adjusted for events such as bonus issue and shares split 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 attributable to equity shareholders and the weighted average number of shares outstanding are adjusted for the effects of all dilutive potential equity shares if any.

n. Provisions

A provision is recognized when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

o. Contingent liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is probable that an outflow of resources will be required to settle the obligations. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.

p. Cash and Bank Balances

Cash and bank balances comprise cash at bank and cash/cheques on hand and deposits with Banks.