Accounting Policies of Energy-Mission Machineries (India) Ltd. Company

Mar 31, 2025

3. Summary of Significant accounting policies

(a) 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 balances of assets and liabilities and disclosure of contingent assets and 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. Any revision
to accounting estimates is recognised in current and future periods.

(b) Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation and
impairment losses, if any. Cost comprises purchase price and any direcdy attributable
cost for bringing the asset to its intended use. Any trade discounts and rebates are
deducted in arriving at the purchase price. Expenditure an account of restoration/
modification/ alteration in plant and machinery, which increases the future benefit from
the existing asset beyond its previously assessed standard of performance/ estimated
useful life is capitalised. Insurance spares/ stand by equipment’s is capitalised as part of
respective principal assets.

(c) Intangible assets

Intangible assets are stated at cost less amortisation less impairment, if any. Cost
comprises the purchase price and other directly attributable costs

(d) Depreciation and Amortization

Depreciation on fixed assets is provided on the written down value method, computed
on the basis of useful life prescribed in Schedule II to the Companies Act, 2013, on a
pro-rata basis from the date the asset is ready to put to use subject to transitional
provisions of Schedule II.

Useful life as per Schedule II
Plant & Machinery 15 Years

Vehicles 8 Years

Computers 3 Years

Factory Building 60 Years

Furniture & Fixtures 10 Years

Office Equipment 5 Years

(e) Impairment of property, plant and equipment and intangible assets

The carrying amounts of assets are reviewed at each balance sheet date if there is any
indication of impairment based on internal/extemal 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 estimated future cash flows are disconnected to their present
value using a pre-tax discount rate that reflects current market assessments of the time
value of money and risks specified to the asset.

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

(f) Leases

Leases where the lesser effectively retain substantially all the risks and benefits of
ownership of the leased term are classified as operating leases. Operating lease payments

(h) 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. ''The following specific
recognition criteria must also be met before revenue is recognized:

(i) Sale of goods: Revenue from the sale of goods is recognized when all the significant
risks and rewards of ownership of the goods have been passed to the buyer, usually on
delivery of the goods. The Company collects GST on behalf of the government and,
therefore, these are not economic benefits flowing to the Company. Hence, they are
excluded from revenue.

(ii) Interest Income: Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the applicable interest rate. Interest income is
included under the head "other income" in the statement of profit and loss.

(iii) Export benefits/incentive: Export entitiements under duty drawback scheme is
recognized in the statement of profit and loss when the right to receive credit as per the
terms of the scheme is established in respect of the exports made.

(i) 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 the transaction.

(ii) Conversion

Foreign currency monetary items are reposted 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 data of the transaction; and 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) Exchange differences

Exchange differences arising on the setdement of monetary items or on reporting
Company''s monetary items at rites different from those at which they were initially
recorded during the year or reported is previous financial statements, are recognised as
income or as expenses in the year in which they arise.

(j) Retirement and other employee benefits

(i) The company contributes provident hand into employee provident fund scheme
managed by regional provident fund commissioner, the contributions are charged to the
Statement Profit and Loss. There are no other obligations other than the contribution
payable.

(ii) Gratuity liability is defined benefit obligations and is provided for on the basis of an
actuarial valuation on projected unit credit method made at the end of each financial
year. The Company presents its leave and gratuity liability as current and non-current
based on reports of actuarial valuation.

(iii) Accumulated leave, which is expected to be utilised within the next 12 months, is
treated as short-term employee benefit. The Company measures the expected cost of
such absences us the additional amount that it expects to pay as a result of the unused
entitlement that has accumulated at the reporting date. The Company treats accumulated
leave expected to be carried forward beyond twelve months, as long-term employee
benefit for measurement purposes. Such long-term compensated absences are provided
for based on the actuarial valuation using the projected unit credit method at the year
end.

(iv) Actuarial gains/losses are immediately taken to Statement of Profit and Loss and are
not deferred.

(k) Taxation

Tax expense comprises of 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. Deferred income taxes reflect the impact of the current year
timing differences between taxable income and accounting income for the year and
reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively
enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities are
offset, if a legally enforceable right exists to set off current tax assets against current tax
liabilities and the deferred tax assets and deferred tax liabilities relate is the taxes on
income levied by same governing taxation laws. Deferred Tax assets are recognised 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. In situations where
the Company has unabsorbed depreciation or carry forward tax losses, deferred tax
assets are recognised only if 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.

The carrying amount of deferred tax assets are reviewed at each balance sheet date. The
Company writes down the carrying amount of a deferred tax assets to the extent it is no
longer reasonably certain or virtually certain, as the case may be, that sufficient future
taxable income will be available against which deferred tax asset can be realised. Any
such written down is reversed to the extent that it becomes reasonably certain, as the
case may be, that sufficient future taxable income will not be available.

(l) Earning per share

Basic earnings per share are calculated by dividing the net profit or loss for the period
attributable to equity shareholders by the weighted average number of equities shares
outstanding during the period. 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 shares outstanding during the period are adjusted for the effects of all
dilutive potential equity shares.

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Mar 31, 2024

1. Corporate Information:

Energy-Mission Machineries (India) Ltd. (formerly known as Energy-Mission Machineries (India) Pvt. Ltd.) (“the Company”) was incorporated in January 2011 and is engaged in the business of manufacturing of Hydraulic Shearing machine, NC Hydraulic Shearing machine, Hydraulic Press-brake, NC Hydraulic Press-brake, CNC Syncro Hydraulic Press-brake, Iron worker ‘Sigma’, Deep drawing press, general purpose Hydraulic presses and special purpose machines. The company has its registered office at Sanand, Ahmedabad, Gujarat.

In accordance with the relevant provisions of the Companies Act 2013 (the ‘Act’), the members of the Company at their Extraordinary General Meeting held on 31^st July, 2023 accorded their approval to change the name of the Company. The Company has since received a fresh certificate of incorporation consequent upon change of name from the Registrar of Companies Ahmedabad dated 11^th August, 2023 in respect of the said change. Accordingly, the name of the Company was changed from " Energy-Mission Machineries (India) Pvt. Ltd." to " Energy-Mission Machineries (India) Ltd." effective from 11^th August, 2023.

2. Basis of preparation of Financial Statements

These financial statements are prepared in accordance with Indian generally accepted accounting principles (GAAP) which Includes mandatory accounting standards as prescribed under section 133 of companies Act, 2013 (‘Act’) read with the companies (Accounting Standards) Rules, 2021 and other accounting principles generally accepted in India. The financial statements have been prepared on a going concern basis under the historical cost convention on accrual basis in accordance with the generally accepted accounting principles in India. The accounting policies have been consistently applied by the company.

Current and non-current classifications:

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 Act. Deferred tax assets and liabilities are classified as non-current assets and non-current liabilities, as the case may be.

3. Summary of Significant accounting policies

(a) 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 balances of assets and liabilities and disclosure of contingent assets and 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. Any revision to accounting estimates is recognised in current and future periods.

(b) Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises purchase price and any directly attributable cost for bringing the asset to its intended use. Any trade discounts and rebates are deducted in arriving at the purchase price. Expenditure an account of restoration/ modification/ alteration in plant and machinery, which increases the future benefit from the existing asset beyond its previously assessed standard of performance/ estimated useful life is capitalised. Insurance spares/ stand by equipment’s is capitalised as part of respective principal assets.

(c) Intangible assets

Intangible assets are stated at cost less amortisation less impairment, if any. Cost comprises the purchase price and other directly attributable costs

During the Financial Year 2022-23 the company had changed its accounting policy to charge depreciation on the Intangible Assets (Softwares) from at the rate of 10% to 45.07% i.e new changed life adopted by the company is 5 years.

(d) Depreciation and Amortization

Depreciation on fixed assets is provided on the written down value method, computed on the basis of useful life prescribed in Schedule II to the Companies Act, 2013, on a pro-rata basis from the date the asset is ready to put to use subject to transitional provisions of Schedule II.

Useful life as per Schedule II Plant & Machinery 15 Years

Vehicles 8 Years

Computers 3 Years

Factory Building 60 Years

Furniture & Fixtures 10 Years

Office Equipment 5 Years

(e) Impairment of property, plant and equipment and intangible assets

The carrying amounts of assets are reviewed at each balance sheet date if 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 estimated future cash flows are disconnected to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specified to the asset.

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

(f) Leases

Leases where the lesser effectively retain substantially all the risks and benefits of ownership of the leased term 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.

(g) Inventories Inventories are valued as follows: -Raw materials, components, stores, and spares and packing material	Lower of cost and net realizable value. Cost represents purchase price and other direct costs and is determined on a moving average cost basis. However, materials and other items held for use in the production of inventory are not written down below cost, if the finished products in which they will be incorporated are expected to be sold at or above cost.
Work in progress and manufactured finished goods	Lower of cost and net realizable value. Cost includes direct materials and labour and a proposition of manufacturing overheads operating capacity. The cost of finished goods is determined on a moving average cost basis.

(h) 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. ''The following specific recognition criteria must also be met before revenue is recognized:

(i) Sale of goods: Revenue from the sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. The Company collects GST on behalf of the government and, therefore, these are not economic benefits flowing to the Company. Hence, they are excluded from revenue.

(ii) Interest Income: Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head "other income" in the statement of profit and loss.

(iii) Export benefits /incentive: Export entitlements under duty drawback scheme is recognized in the statement of profit and loss when the right to receive credit as per the terms of the scheme is established in respect of the exports made.

(i) 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 the transaction.

(ii) Conversion

Foreign currency monetary items are reposted 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 data of the transaction; and 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) Exchange differences

Exchange differences arising on the settlement of monetary items or on reporting Company''s monetary items at rites different from those at which they were initially recorded during the year or reported is previous financial statements, are recognised as income or as expenses in the year in which they arise.

(j) Retirement and other employee benefits

(i) The company contributes provident fund into employee provident fund scheme managed by regional provident fund commissioner, the contributions are charged to the Statement Profit and Loss. There are no other obligations other than the contribution payable.

(ii) Gratuity liability is defined benefit obligations and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. The Company presents its leave and gratuity liability as current and non-current based on reports of actuarial valuation.

(iii) Accumulated leave, which is expected to be utilised within the next 12 months, is treated as short-term employee benefit. The Company measures the expected cost of such absences us the additional amount that it expects to pay as a result of the unused entidement that has accumulated at the reporting date. The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year end.

(iv) Actuarial gains/losses are immediately taken to Statement of Profit and Loss and are not deferred.

(k) Taxation

Tax expense comprises of 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. Deferred income taxes reflect the impact of the current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate is the taxes on income levied by same governing taxation laws. Deferred Tax assets are recognised 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. In situations where the Company has unabsorbed depreciation or carry forward tax losses, deferred tax assets are recognised only if 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.

The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Company writes down the carrying amount of a deferred tax assets to the extent it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such written down is reversed to the extent that it becomes reasonably certain, as the case may be, that sufficient future taxable income will not be available.

(l) Earning per share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equities shares outstanding during the period. 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 shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

(m) Provisions

A provision is recognized when an enterprise has a present obligation because of past event and it is probable that an outflow of resources will be required to setde 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 the best estimate required to setde the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

(n) Contingent liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confined 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 not probable that an outflow of resources will be required to setde the obligation. 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.

(o) Cash and cash equivalent

Cash and cash equivalents for the purposes of cash how statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

(p) Segment reporting policies

The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.