Accounting Policies of Sharika Enterprises Ltd. Company

Mar 31, 2025

Note :-2. Significant accounting policies

2.1 Basis of Preparation

The financial statements of the Company have been prepared in accordance with and to comply in all material
aspects with the applicable Indian Accounting Standards (Ind AS) as notified under the relevant provisions of the
Companies Act, 2013, Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions includ¬
ing Schedule III to the Companies Act, 2013, as amended from time to time.

The financial statements have been prepared on accrual and going concern basis under historical cost convention,
except for the items that have been measured at fair value as required by relevant Ind AS.

Company''s financial statements are presented in Indian Rupees, which is also its functional currency. All amounts
in the financial statements and accompanying notes are presented in Indian Rupees in Lakhs and have been
rounded-off to two decimal places in accordance with the provisions of Schedule III to the Companies Act, 2013,
unless stated otherwise.

2.2 Summary of significant accounting policies

a. Current and non-current classification

Assets and Liabilities are classified as either current or non-current as per the Company''s normal operating
cycle, and other criteria set out in Schedule III to the Companies Act, 2013. Operating cycle for the business
activities of the Company covers the duration of the specific project/contract/product line/service including
the defect liability period, wherever applicable, and extends up to the realisation of receivables (including
retention monies) within the agreed credit period normally applicable to the respective project/contract/
product line/service. Deferred tax assets and deferred tax liabilities are classified as non-current assets and
liabilities.

Further, an asset is classified as current when it satisfies any of the following criteria: it is expected to be real¬
ised in, or is intended for sale or consumption in, the Company''s normal operating cycle.

• It is held primarily for the purpose of being traded;

• It is expected to be realised within 12 months after the reporting date; or

•It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least
12 months after the reporting date.

• All other assets are classified as non-current.

• A liability is classified as current when it satisfies any of the following criteria:

• It is expected to be settled in the Company''s normal operating cycle;

• It is held primarily for the purpose of being traded

• It is due to be settled within 12 months after the reporting date; or the Company does not have an un¬
conditional right to defer settlement of the liability for at least 12 months after the reporting date.
Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity
instruments do not affect its classification."

All other liabilities are classified as non-current.

b. Fair Value measurement

The Company measures financial instruments, such as, derivatives at fair value at each balance sheet date. Fair
value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction

between market participants at the measurement date. The fair value measurement is based on the presump¬
tion that the transaction to sell the asset or transfer the liability takes place either:

A. In the principal market for the asset or liability, or

B. In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would
use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant
that would use the asset in its highest and best use. The Company uses valuation techniques that are appro¬
priate in the circumstances and for which sufficient data is available to measure fair value, maximizing the use
of relevant observable inputs and minimizing the use of unobservable inputs.

Fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the
fair value measurements are observable and the significance of the inputs to the fair value measurement in its
entirety, which are described as follows:

• Level 1 inputs are quoted prices in active markets for identical assets or liabilities that entity can access
at measurement date;

• Level 2 inputs are inputs, other than quoted prices included in Level 1, that are observable for the asset
or liability, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the asset or liability.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company
determines whether transfers have occurred between levels in the hierarchy by re- assessing categorisation
(based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each
reporting period. For the purpose of fair value disclosures, the Company has determined classes of assets and
liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair
value hierarchy as explained above.

c. Foreign currency transactions

The company''s financial statements are presented in INR, which is also the company''s functional currency.

i. 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. Foreign currency monetary items are reported using the closing rate.

iii. Any gain or loss on account of exchange difference arising either on the settlement or on reinstatement
of foreign currency monetary items is recognized as profit/loss, except exchange difference arising on
long term foreign currency monetary items relating to acquisition of depreciable fixed assets, which is
adjusted to the carrying amount of such assets. An asset shall be designated as long term foreign curren¬
cy monetary item, if the asset or liability expressed in foreign currency and has a term of 12 months or
more at the date of origination of the asset or liability.

d. Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and
the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at
the fair value of the consideration received or receivable. taking into account contractually defined terms or
payment and excluding taxes or duties collected on behalf or the Government. The Company has concluded
that it is the principal in all of its revenue arrangements since it is the primary obligor in all the revenue ar¬
rangements as it has pricing latitude and is also exposed to inventory and credit risks. Sales tax/ value added
tax (VAT)/Goods and Service Tax (GST) is not received by the Company on its own account. Rather it is tax
collected on value added to the commodity by the seller on behalf of the Government. Accordingly, it is exclud¬
ed from revenue. The following specific recognition criteria must also be met before revenue is recognized:

Revenue from contracts with customers is recognised when control of the goods or services are transferred to
the customer at an amount that reflects the consideration entitled in exchange for those goods or services.

The Company satisfies a performance obligation and recognizes revenue over time, if one of the following
criteria is met:

(i) The Company''s performance does not create an asset with an alternate use to the Company and the Com¬
pany has as an enforceable right to payment for performance completed to date.

(ii) The Company''s performance creates or enhances an asset that the customer controls as the asset is creat¬
ed or enhanced.

(iii) The customer simultaneously receives and consumes the benefits provided by the Company''s per¬
formance as the Company performs. For performance obligations where one of the above conditions are not
met, revenue is recognized at the point in time at which the performance obligation is satisfied.

Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price
(net of variable consideration) allocated to that performance obligation. Revenue is recognized to the extent
it is probable that the economic benefits will flow to the Company and the revenue and costs, if applicable,
can be measured reliably. Taxes (Goods and Services Tax) collected on behalf of the government are excluded
from Revenue. The transaction price of goods sold and services rendered is net of variable consideration on
account returns, discounts, customer claims and rebates, etc.

Variable consideration includes volume discounts, price concessions, incentives, etc. The Company estimates
the variable consideration with respect to above based on an analysis of accumulated historical experience.
The variable consideration is adjusted as and when the expectation regarding the same changes. Revenue
from Sale of Goods Performance obligation in case of Revenue from sale of goods is satisfied at a point in time
and is recognized when control of goods is transferred to the customers. Generally, control is transferred upon
shipment of goods to the customer or when the goods are made available to the customer, provided transfer
of title to the customer occurs and the Company has not retained any significant risks of ownership or future
obligations with respect to the goods shipped.

Revenue from Turnkey Projects/Contracts Performance obligation in case of revenue from Turnkey Projects/
Contracts is satisfied over the period of time, since the customer controls the assets as they are created and
the Company has enforceable right to payment for performance completed to date. Revenue from Turnkey
Projects/Contracts, where the outcome can be estimated reliably is recognised under the percentage of com¬
pletion method by reference to the stage of completion of contract activity. The stage of completion is meas¬
ured by input method i.e. the proportion that the cost incurred to date bear to the estimated total cost of a con¬
tract. The estimates of contract costs and the revenue thereon are reviewed periodically by the management
and the cumulative effect of any changes in the estimates is recognised in the period in which such changes
are determined. Where it is probable that contract expenses will exceed total revenue from a contract, the
expected loss is recognised immediately as an expense in the Statement of Profit and Loss.

If contract revenue recognised is in excess of interim/progressive billing, the same is recognised as "con¬
tract asset” (unbilled revenue). Similarly, if interim/progressive billing exceeds contract revenue, the same
is recognised as "contract liabilities” (excess billed over revenue). Amounts received before the related work
is performed are disclosed in the Balance Sheet as "Mobilisation and Other Advances from Customers”. The
amounts billed to customers for work performed and are unconditionally due for payment i.e. only passage of
time is required before payment falls due, are disclosed in the Balance Sheet as trade receivables. The amount
of retention money receivable from project customers do not contain any significant financing element as
these are retained by the customers for satisfactory performance of the underlying contracts.

Export benefits availed as per applicable policy/schemes are accrued each year in which the goods are export¬
ed and when no significant uncertainty exist regarding the ultimate collection.

Interest income is recognised on time proportion basis. Dividend income is recognised when the right to
receive payment is established.

Income from sales

Sales are recognized on dispatch of goods and are accounted net of trade discount, returns and volume
rebates, GST.

Income from services

Revenue on account of service / consultancy and commission is recognized as and when services have been
rendered in terms of agreement.

Interest

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

e. Financial instruments

Financial assets and financial liabilities are recognised when a group Company becomes a party to the con¬
tractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair
value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and fi¬
nancial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are
added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial
recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities
at fair value through profit or loss are recognised immediately in profit or loss.

A] Financial assets

a) Initial recognition and measurement:

Financial assets are recognised when a group Company becomes a party to the contractual provi¬
sions of the instrument. On initial recognition, a financial asset is recognised at fair value, in case of
financial assets which are recognised at fair value through profit and loss (FVTPL), its transaction
costs are recognised in the statement of profit and loss. In other cases, the transaction costs are
attributed to the acquisition value of the financial asset.

b) Effective interest method:

The effective interest method is a method of calculating the amortised cost of a debt instrument
and of allocating interest income over the relevant period. The effective interest rate is the rate
that exactly discounts estimated future cash receipts (including all fees and points paid or received
that form an integral part of the effective interest rate, transaction costs and other premiums or
discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period,
to the net carrying amount on initial recognition.

Income is recognised on an effective interest basis for debt instruments other than those financial
assets classified as at FVTPL. Interest income is recognised in profit or loss and is included in the
''Other income'' line item.

c) Subsequent measurement:

For subsequent measurement, the Company classifies a financial asset in accordance with the be¬
low criteria:

i. The Company''s business model for managing the financial asset and

ii. The contractual cash flow characteristics of the financial asset.

Based on the above criteria, the Company classifies its financial assets into the following categories:

i. Financial assets measured at amortized cost:

A financial asset is measured at the amortized cost if both the following conditions are met:

a) The Company''s business model objective for managing the financial asset is to hold finan¬
cial assets in order to collect contractual cash flows, and

b) The contractual terms of the financial asset give rise on specified dates to cash flows that
are solely payments of principal and interest on the principal amount outstanding.

This category applies to cash and bank balances, trade receivables, loans and other financial
assets of the Company. Such financial assets are subsequently measured at amortized cost us¬
ing the effective interest method.

The amortized cost of a financial asset is also adjusted for loss allowance, if any.

ii. Financial assets measured at FVTOCI:

A financial asset is measured at FVTOCI if both of the following conditions are met:

a) The Company''s business model objective for managing the financial asset is achieved
both by collecting contractual cash flows and selling the financial assets, and

b) The contractual terms of the financial asset give rise on specified dates to cash flows that
are solely payments of principal and interest on the principal amount outstanding.

Investments in equity instruments, classified under financial assets, are initially measured
at fair value. The Company may, on initial recognition, irrevocably elect to measure the
same either at FVTOCI or FVTPL. The Company makes such elections on an instrument-by¬
instrument basis. Fair value changes on an equity instrument are recognised as other income
in the Statement of Profit and Loss unless the Company has elected to measure such instrument
at FVTOCI.

The Company does not have any financial assets in this category.

iii. Financial assets measured at FVTPL:

A financial asset is measured at FVTPL unless it is measured at amortized cost or at FVTOCI as
explained above.

This is a residual category applied to all other investments of the Company. Such financial
assets are subsequently measured at fair value at each reporting date. Fair value changes are
recognized in the Statement of Profit and Loss.

d) Derecognition:

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar fi¬
nancial assets) is derecognized (i.e. removed from the Company''s Balance Sheet) when any of the
following occurs:

i. The contractual rights to the cash flows from the financial asset expires;

ii. The Company transfers its contractual rights to receive cash flows of the financial asset and has
substantially transferred all the risks and rewards of ownership of the financial asset;

iii. The Company retains the contractual rights to receive cash flows but assumes a contractu¬
al obligation to pay the cash flows without material delay to one or more recipients under a
''pass- through'' arrangement (thereby substantially transferring all the risks and rewards of
ownership of the financial asset);

iv. The Company neither transfers nor retains substantially all risk and rewards of ownership and
does not retain control over the financial asset.

In cases where the Company has neither transferred nor retained substantially all of the risks and
rewards of the financial asset but retains control of the financial asset, the Company continues to
recognize such financial asset to the extent of its continuing involvement in the financial asset. In
that case, the Company also recognizes an associated liability.

The financial asset and the associated liability are measured on a basis that reflects the rights and
obligations that the Company has retained.

On derecognition of a financial asset, the difference between the asset''s carrying amount and the
sum of the consideration received and receivable and the cumulative gain or loss that had been rec¬
ognised in other comprehensive income and accumulated in equity is recognised in profit or loss if
such gain or loss would have otherwise been recognised in profit or loss on disposal of that financial
asset.

e) Impairment of financial assets:

The Company applies the expected credit losses (ECL) model for measurement and recognition of
loss allowance on the following:

i. Trade receivables

ii. Financial assets measured at amortized cost (other than trade receivables)

iii. Financial assets measured at fair value through other comprehensive income (FVTOCI)

In the case of trade receivables, the Company follows a simplified approach wherein an amount
equal to lifetime ECL is measured and recognized as loss allowance.

In the case of other assets (listed as ii and iii above), the Company determines if there has been a
significant increase in the credit risk of the financial asset since initial recognition. If the credit risk

of such assets has not increased significantly, an amount equal to a 12-month ECL is measured and
recognized as a loss allowance. However, if credit risk has increased significantly, an amount equal
to lifetime ECL is measured and recognized as loss allowance.

Subsequently, if the credit quality of the financial asset improves such that there is no longer a
significant increase in credit risk since initial recognition, the Company reverts to recognizing im¬
pairment loss allowance based on a 12-month ECL.

ECL is the difference between all contractual cash flows that are due to the Company in accordance
with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls),
discounted at the original effective interest rate.

12-month ECL is a portion of the lifetime ECL which result from default events that are possible
within 12 months from the reporting date. Lifetime ECL is the expected credit losses resulting from
all possible default events over the expected life of a financial asset.

ECL is measured in a manner that reflects unbiased and probability-weighted amounts determined
by a range of outcomes, taking into account the time value of money and other reasonable infor¬
mation available as a result of past events, current conditions and forecasts of future economic
conditions.

As a practical expedient, the Company uses a provision matrix to measure lifetime ECL on its port¬
folio of trade receivables. The provision matrix is prepared based on historically observed default
rates over the expected life of trade receivables and is adjusted for forward-looking estimates. At
each reporting date, the historically observed default rates and changes in the forward-looking es¬
timates are updated.

ECL impairment loss allowance (or reversal) recognized during the year is recognized as expense/
income in the Statement of Profit and Loss under the head ''Other expenses'' / '' Other income''.

B] Financial liabilities and equity instruments

Debt and equity instruments issued by the Company are classified as either financial liabilities or
as equity in accordance with the substance of the contractual arrangements and the definitions of a
financial liability and an equity instrument.

i. Equity instruments:

An equity instrument is any contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments issued by the Company member are recognised at
the proceeds received, net of direct issue costs.

Repurchase of the Company''s own equity instruments is recognised and deducted directly in equity.
No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Com¬
pany''s own equity instruments.

ii. Financial liabilities:

a) Initial recognition and measurement:

Financial liabilities are recognised when the company becomes a party to the contractual
provisions of the instrument. Financial liabilities are initially measured at fair value.

b) Subsequent measurement:

Financial liabilities are subsequently measured at amortised cost using the effective interest
rate method. Financial liabilities carried at fair value through profit or loss are measured at fair
value with all changes in fair value recognised in the Statement of Profit and Loss.

The Company has not designated any financial liability as at FVTPL.

c) Derecognition of financial liabilities:

A financial liability is derecognized when the obligation under the liability is discharged or
cancelled or expires. When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as the derecognition of the original li¬
ability and the recognition of a new liability. The difference between the carrying amount of
the financial liability derecognized and the consideration paid is recognized in the Statement
of Profit and Loss.

f. Borrowing Cost

Borrowing costs directly attributable to the acquisition. construction or production of an asset that necessar¬
ily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost
of the asset. All other borrowing costs arc expensed 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. Borrowing cost
also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

g. Leases

The determination of whether an arrangement is (or contains) a lease is based on the substance of the ar¬
rangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrange¬
ment is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset
or assets, even if that right is not explicitly specified in an arrangement.

Company as a lessee

A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers sub¬
stantially all the risks and rewards incidental to ownership to the Company is classified as a finance lease. The
Company recognises a Right-of-use Asset and a lease liability at the lease commencement date. The Right-of-
use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any
lease payments made at or before the commencement date, plus any initial costs incurred. The Right-of-use
Asset is subsequently depreciated using the straight-line method from the commencement date to the end of
the lease term. The lease liability is initially measured at the present value of the lease payments that are not
paid at the commencement date, discounted using the Company''s incremental borrowing rate. Subsequently,
lease liabilities are measured on amortised cost basis.

The Company has elected not to recognise Right-of-use Assets and lease liabilities for short-term leases that
have a lease term of 12 months or less and leases of low-value assets and the corresponding lease rental paid
are directly charged to the Statement of Profit and Loss.

Company as a lessor

Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an
asset are classified as operating leases. Rental income from operating lease is recognised on a straight-line
basis over the term of the relevant lease.

h. Inventories

Inventories are valued at the lower of cost and net realisable value.

Costs incurred in bringing each product to its present location and condition are accounted for as follows:

> Raw materials: cost includes cost of purchase and other costs incurred in bringing the inventories to
their present location and condition. Cost is determined on weighted average basis.

> Finished goods and work in progress: cost includes cost of direct materials and labour and a proportion
of manufacturing overheads based on the normal operating capacity, but excluding borrowing costs. Cost
is determined on weighted average basis.

> Traded goods: cost includes cost of purchase and other costs incurred in bringing the inventories to their
present location and condition. Cost is determined on weighted average basis.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of
completion and the estimated costs necessary to make the sale.

Provision for obsolescence on inventories is made wherever technically considered necessary by the manage¬
ment.

i. Property, plant and equipment

An item of Property, plant and equipment (PPE) that qualifies as an asset is measured on initial recognition at
cost. Following initial recognition, property, plant and equipment are carried at cost, as reduced by accumu¬
lated depreciation and impairment losses, if any.

The Company identifies and determines the cost of each part of an item of property, plant and equipment sep¬
arately, if the part has a cost which is significant to the total cost of that item of property, plant and equipment
and has a useful life that is materially different from that of the remaining item.

Cost comprises of purchase price/cost of construction, including non-refundable taxes or levies and any ex¬
penses attributable to bringing the PPE to its working condition for its intended use. Project pre-operative
expenses and expenditures incurred during the construction period are capitalized to various eligible PPE.
Borrowing costs directly attributable to the acquisition or construction of qualifying PPE are capitalized.

Spare parts, stand-by equipment and servicing equipment that meet the definition of property, plant and
equipment are capitalized at cost and depreciated over their useful life. Costs in nature of repairs and mainte¬
nance are recognized in the Statement of Profit and Loss as and when incurred.

The cost of assets not ready for intended use, as on the Balance Sheet date, is shown as capital work in pro¬
gress. Advances given towards acquisition of property, plant and equipment outstanding at each Balance
Sheet date are disclosed as Other Non-Current Assets.

Depreciation is recognised to write off the cost of PPE (other than freehold land and properties under con¬
struction) less their residual values over their useful lives, using the straight-line method. The useful lives
prescribed in Schedule II to the Companies Act, 2013 are considered as the minimum lives. If the manage¬
ment''s estimate of the useful life of property, plant and equipment at the time of acquisition of the asset or the
remaining useful life on a subsequent review is shorter than that envisaged in the aforesaid schedule, depreci¬
ation is provided at a higher rate based on the management''s estimate of the useful life/remaining useful life.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting
year, with the effect of any changes in estimate accounted for on a prospective basis.

PPE is depreciated over its estimated useful lives, determined as under:

• Freehold land is not depreciated.

• On other items of PPE, on the basis of useful life as per Part C of Schedule II to the Companies Act, 2013.

The management believes that these estimated useful lives are realistic and reflect a fair approximation of the
period over which the assets are likely to be used.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits
are expected to arise from its use or disposal. Any gain or loss arising on the disposal or retirement of an item
of property, plant and equipment is determined as the difference between the sales proceeds and the carrying
amount of the asset and is recognised in profit or loss.

j. Impairment of Non-Financial Assets

Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognised for the amount by which the asset''s carry¬
ing amount exceeds its recoverable amount and the impairment loss is recognized in the Statement of Profit
and Loss. The recoverable amount is the higher of an asset''s fair value less costs of disposal and value in use.
The recoverable amount is determined for an individual asset, unless the asset does not generate cash in¬
flows that are largely independent of those from other assets or group of assets. In assessing value is use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assumptions of the time value of money and the risks specified to the asset. In determining
net selling price, recent market transactions are taken into account, if available. If no such transactions can be
identified, an appropriate valuation model is used

k. Taxes

Current income tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid
to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted
or substantively enacted, at the reporting date.

Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (ei¬
ther in other comprehensive income or in equity).

Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equi¬
ty. Management periodically evaluates positions taken in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable temporary differences.

Deferred tax assets are recognised for all deductible temporary differences. Deferred tax assets are recog¬
nised to the extent that it is probable that taxable profit will be available against which the deductible tem¬
porary differences, and the carry forward of unused tax credits and unused tax losses can be utilised. The
carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is
no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to
be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the
extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or sub¬
stantively enacted at the reporting date.

Deterred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in
other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying
transaction either in OCI or directly in equity.

Deferred tax assets and deferred tax liabilities are onset if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same
taxation authority.

l. Retirement and other employee benefits
Defined Contribution Plan

Contribution to approved Superannuation Fund as per Company''s scheme and Employees Recognised Prov¬
ident Fund administered by Employees Provident Fund Organisation (EPFO), is recognised as an expense in
the Statement of Profit and Loss for the year when the employee renders the related service.

Defined Benefit Plan

Gratuity, Pension and Compensated Absences benefits, payable as per Company''s schemes are considered as
defined benefit schemes and are charged to Statement of Profit and Loss on the basis of actuarial valuation
carried out at the end of each financial year by independent actuaries using Projected Unit Credit Method.
For the purpose of presentation of defined benefit plans, the allocation between short term and long term
provisions is made as determined by the independent actuaries. Actuarial gains and losses are recognised in
the Other Comprehensive Income.

Ex-gratia or other amount disbursed on account of selective employees separation scheme or otherwise are
charged to Statement of Profit and Loss as and when incurred/determined.

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Mar 31, 2024

(A) Overview and Significant Accounting Policies1. Corporate Information

Sharika Enterprises Limited is a listed company, registered under the Companies Act, 2013. It was incorporated on 06 th May 1998 and has its registered office at C-504, ATS Bouquet, Sector-132, Noida, Uttar Pradesh 201305.Shares of the Company are listed on Bombay Stock Exchange (BSE). The company is primarily engaged in the business of Management Consultancy & Project Execution services primarily in the power sector for Indian and International Power Equipment Manufacturers.The company has added trading of Electrical items primarily comprising of LED lights and other related products and components. Its operations also include a composite range of activities comprising of engineering, procurement, construction and servicing etc of Power plants and equipments.

2. Significant accounting policies2.1 Basis of Preparation

The Financial Statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Section 133 of the Companies Act, 2013 read together with paragraph 7 of the Companies (Accountants) Rules, 2014 (Indian GAAP).

Financial statements are presented in INR and all values are rounded to the nearest lakh (INR 00), except when otherwise indicated.

2.2 Summary of significant accounting policiesa. Current and non-current classification

The Company presents assets and liabilities in the balance sheet based on current / non-current classification.

An asset is classified as current when it satisfies any of the following criteria: it is expected to be realised in, or is intended for sale or consumption in, the Company''s normal operating cycle.

• It is held primarily for the purpose of being traded;

• It is expected to be realised within 12 months after the reporting date; or

• It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

• All other assets are classified as non-current.

• A liability is classified as current when it satisfies any of the following criteria:

• It is expected to be settled in the Company''s normal operating cycle;

• It is held primarily for the purpose of being traded

• It is due to be settled within 12 months after the reporting date; or the Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as non-current only

b. Fair Value measurement

The Company measures financial instruments, such as, derivatives at fair value at each balance sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability inan orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

A. In the principal market for the asset or liability, or

B. In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate

economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

Fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

• Level 1 inputs are quoted prices in active markets for identical assets or liabilities that entity can access at measurement date;

• Level 2 inputs are inputs, other than quoted prices included in Level 1, that are observable for the asset or liability, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the asset or liability.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

c. Foreign currency transactions

The company''s financial statements are presented in INR, which is also the company''s functional currency.

i. 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. Foreign currency monetary items are reported using the closing rate.

iii. Any gain or loss on account of exchange difference arising either on the settlement or on reinstatement of foreign currency monetary items is recognized as profit/loss, except exchange difference arising on long term foreign currency monetary items relating to acquisition of depreciable fixed assets, which is adjusted to the carrying amount of such assets. An asset shall be designated as long term foreign currency monetary item, if the asset or liability expressed in foreign currency and has a term of 12 months or more at the date of origination of the asset or liability.

d. Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable. taking into account contractually defined terms or payment and excluding taxes or duties collected on behalf or the Government. The Company has concluded that it is the principal in all of its revenue arrangements since it is the primary obligor in all the revenue arrangements as it has pricing latitude and is also exposed to inventory and credit risks. Sales tax/ value added tax (VAT)/Goods and Service Tax (GST) is not received by the Company on its own account. Rather it is tax collected on value added to the commodity by the seller on behalf of the Government. Accordingly, it is excluded from revenue. The following specific recognition criteria must also be met before revenue is recognized: Income from sales

Sales are recognized on dispatch of goods and are accounted net of trade discount, returns and volume rebates, GST.

Income from services

Revenue on account of service / consultancy and commission is recognized as and when services have been rendered in terms of agreement.

Interest

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

e. Financial instruments

Financial assets and financial liabilities are recognised when a group Company becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

A] Financial assets

a) Initial recognition and measurement:

Financial assets are recognised when a group Company becomes a party to the contractual provisions of the instrument. On initial recognition, a financial asset is recognised at fair value, in case of financial assets which are recognised at fair value through profit and loss (FVTPL), its transaction costs are recognised in the statement of profit and loss. In other cases, the transaction costs are attributed to the acquisition value of the financial asset.

b) Effective interest method:

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL. Interest income is recognised in profit or loss and is included in the ''Other income'' line item.

c) Subsequent measurement:

For subsequent measurement, the Company classifies a financial asset in accordance with the below criteria:

i. The Company''s business model for managing the financial asset and

ii. The contractual cash flow characteristics of the financial asset.

Based on the above criteria, the Company classifies its financial assets into the following categories:

i. Financial assets measured at amortized cost.

A financial asset is measured at the amortized cost if both the following conditions are met:

a) The Company''s business model objective for managing the financial asset is to hold financial assets in order to collect contractual cash flows, and

b) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

This category applies to cash and bank balances, trade receivables, loans and other financial assets of the Company. Such financial assets are subsequently measured at amortized cost using the effective interest method.

The amortized cost of a financial asset is also adjusted for loss allowance, if any.

ii. Financial assets measured at FVTOCI:

A financial asset is measured at FVTOCI if both of the following conditions are met:

a) The Company''s business model objective for managing the financial asset is achieved both by collecting contractual cash flows and selling the financial assets, and

b) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Investments in equity instruments, classified under financial assets, are initially measured at fair value. The Company may, on initial recognition, irrevocably elect to measure the same either at FVTOCI or FVTPL. The Company makes such elections on an instrument-by-instrument basis. Fair value changes on an equity instrument are recognised as other income in the Statement of Profit and Loss unless the Company has elected to measure such instrument at FVTOCI.

The Company does not have any financial assets in this category.

iii. Financial assets measured at FVTPL:

A financial asset is measured at FVTPL unless it is measured at amortized cost or at FVTOCI as explained above.

This is a residual category applied to all other investments of the Company. Such financial assets are subsequently measured at fair value at each reporting date. Fair value changes are recognized in the Statement of Profit and Loss.

d) Derecognition:

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized (i.e. removed from the Company''s Balance Sheet) when any of the following oc curs:

i. The contractual rights to the cash flows from the financial asset expires;

ii. The Company transfers its contractual rights to receive cash flows of the financial asset and has substantially transferred all the risks and rewards of ownership of the financial asset;

iii. The Company retains the contractual rights to receive cash flows but assumes a contractual obligation to pay the cash flows without material delay to one or more recipients under a ''pass-through'' arrangement (thereby substantially transferring all the risks and rewards of ownership of the financial asset);

iv. The Company neither transfers nor retains substantially all risk and rewards of ownership and does not retain control over the financial asset.

In cases where the Company has neither transferred nor retained substantially all of the risks and rewards of the financial asset but retains control of the financial asset, the Company continues to recognize such financial asset to the extent of its continuing involvement in the financial asset. In that case, the Company also recognizes an associated liability.

The financial asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

On derecognition of a financial asset, the difference between the asset''s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss if such gain or loss would have otherwise been recognised in profit or loss on disposal of that financial asset.

e) Impairment of financial assets:

The Company applies the expected credit losses (ECL) model for measurement and recognition of loss allowance on the following:

i. Trade receivables

ii. Financial assets measured at amortized cost (other than trade receivables)

iii. Financial assets measured at fair value through other comprehensive income (FVTOCI)

In the case of trade receivables, the Company follows a simplified approach wherein an amount equal to lifetime ECL is measured and recognized as loss allowance.

In the case of other assets (listed as ii and iii above), the Company determines if there has been a significant increase in the credit risk of the financial asset since initial recognition. If the credit risk of such assets has not increased significantly, an amount equal to a 12-month ECL is measured and recognized as a loss allowance. However, if credit risk has increased significantly, an amount equal to lifetime ECL is measured and recognized as loss allowance.

Subsequently, if the credit quality of the financial asset improves such that there is no longer a significant increase in credit risk since initial recognition, the Company reverts to recognizing impairment loss allowance based on a 12-month ECL

ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original effective interest rate.

12-month ECL is a portion of the lifetime ECL which result from default events that are possible within

12 months from the reporting date. Lifetime ECL is the expected credit losses resulting from all possible default events over the expected life of a financial asset.

ECL is measured in a manner that reflects unbiased and probability-weighted amounts determined by a range of outcomes, taking into account the time value of money and other reasonable information available as a result of past events, current conditions and forecasts of future economic conditions.

As a practical expedient, the Company uses a provision matrix to measure lifetime ECL on its portfolio of trade receivables. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward-looking estimates. At each reporting date, the historically observed default rates and changes in the forward-looking estimates are updated.

ECL impairment loss allowance (or reversal) recognized during the year is recognized as expense/ income in the Statement of Profit and Loss under the head ''Other expenses'' / '' Other income''

B] Financial liabilities and equity instruments

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

i. Equity instruments:

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company member are recognised at the proceeds received, net of direct issue costs.

Repurchase of the Company''s own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company''s own equity instruments.

ii. Financial liabilities:a) Initial recognition and measurement:

Financial liabilities are recognised when the company becomes a party to the contractual provisions of the instrument. Financial liabilities are initially measured at fair value.

b) Subsequent measurement:

Financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognised in the Statement of Profit and Loss.

The Company has not designated any financial liability as at FVTPL.

c) Derecognition of financial liabilities:

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference between the carrying amount of the financial liability derecognized and the consideration paid is recognized in the Statement of Profit and Loss.

f. Borrowing 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 capitalised as part of the cost of the asset. All other borrowing costs arc expensed 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. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

g. Leases

The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset orassets, even if that right is not explicitly specified in an arrangement

Company as a lessee

A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to the Company is classified as a finance lease.

Operating lease payments arc recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term

Company as a lessor

Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Rental incomefrom operating lease is recognised on a straight-line basis over the term of the relevant lease.

h. Inventories

Inventories are valued at the lower of cost and net realisable value.

Costs incurred in bringing each product to its present location and condition are accounted for as follows:

> Raw materials: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on weighted average basis.

> Finished goods and work in progress: cost includes cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity, but excluding borrowing costs. Cost is determined on weighted average basis.

> Traded goods: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined onweighted average basis.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

Provision for obsolescence on inventories is made wherever technically considered necessary by the management.

i. Property, plant and equipment

An item of Property, plant and equipment (PPE) that qualifies as an asset is measured on initial recognition at cost. Following initial recognition, property, plant and equipment are carried at cost, as reduced by accumulated depreciation and impairment losses, if any.

The Company identifies and determines the cost of each part of an item of property, plant and equipment separately, if the part has a cost which is significant to the total cost of that item of property, plant and equipment and has a useful life that is materially different from that of the remaining item.

Cost comprises of purchase price/cost of construction, including non-refundable taxes or levies and any expenses attributable to bringing the PPE to its working condition for its intended use. Project pre-operative expenses and expenditures incurred during the construction period are capitalized to various eligible PPE. Borrowing costs directly attributable to the acquisition or construction of qualifying PPE are capitalized.

Spare parts, stand-by equipment and servicing equipment that meet the definition of property, plant and equipment are capitalized at cost and depreciated over their useful life. Costs in nature of repairs and maintenance are recognized in the Statement of Profit and Loss as and when incurred.

The cost of assets not ready for intended use, as on the Balance Sheet date, is shown as capital work

in progress. Advances given towards acquisition of property, plant and equipment outstanding at each Balance Sheet date are disclosed as Other Non-Current Assets.

Depreciation is recognised to write off the cost of PPE (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method. The useful lives prescribed in Schedule II to the Companies Act, 2013 are considered as the minimum lives. If the management''s estimate of the useful life of property, plant and equipment at the time of acquisition of the asset or the remaining useful life on a subsequent review is shorter than that envisaged in the aforesaid schedule, depreciation is provided at a higher rate based on the management''s estimate of the useful life/remaining useful life. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting year, with the effect of any changes in estimate accounted for on a prospective basis.

PPE is depreciated over its estimated useful lives, determined as under:

• Freehold land is not depreciated.

• On other items of PPE, on the basis of useful life as per Part C of Schedule II to the Companies Act, 2013.

The management believes that these estimated useful lives are realistic and reflect a fair approximation of the period over which the assets are likely to be used.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from its use or disposal. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

j. Impairment of Non-Financial Assets

Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset''s carrying amount exceeds its recoverable amount and the impairment loss is recognized in the Statement of Profit and Loss. The recoverable amount is the higher of an asset''s fair value less costs of disposal and 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 group of assets. In assessing value is use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assumptions of the time value of money and the risks specified to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.

k. TaxesCurrent income tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity).

Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable temporary differences.

Deferred tax assets are recognised for all deductible temporary differences. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deterred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.

Deferred tax assets and deferred tax liabilities are onset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

l. Retirement and other employee benefits

Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme as an expense, when an employee renders the related service. If the contribution payable to the scheme for service received before the balance sheet elate exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.

Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short term employee benefit. The Company measures the expected cost of such absences as 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 purpose. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end. The Company presents the entire leave as current liability in the balance sheet, since it does not have an unconditional right to defer its settlement for 12 months after the reporting date.

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Mar 31, 2018

1. Significant Accounting Policies

a) Basis of Preparation of Financial Statements

The Financial Statements of the Company are prepared on accrual basis under the historical cost convention and are consistent with the accounting policies followed in the previous year. The Financial statements have been prepared with the Generally Accepted Accounting Principles in India to comply with the Accounting Standards specified under section 133 of the Companies Act, 2013 (the Act) read with Rule 7 of the Companies (Accounts) Rules,2014 in conformity with accounting principles generally accepted in India. Accounting Policies, not specifically referred to, are consistent and in consonance with generally accepted accounting principles.

b) Use of Estimates

The preparation of financial statements require the management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the year. Examples of such estimates include provisions for doubtful debts, employee benefits, provision for income taxes and the useful lives of depreciable fixed assets.

c) Fixed Assets

Fixed Assets are stated at cost, less accumulated depreciation /amortization. Costs include all expenses incurred to bring the assets to its present location and condition.

d) Depreciation/Amortisation

Fixed assets are accounted at cost less accumulated depreciation. Depreciation is provided on a pro-rata basis on Written Down Value Method (WDV) using the rates arrived based on the useful lives of assets specified in Part C of Schedule II thereto of the Companies Act, 2013 as follows:

e) Non- Current Investments

The Non current investments are taken at Cost less diminution in their value on account of accumulated losses of the Companies in which Investments are made. The provision for diminution is made if in the opinion of the Management, the decline is other than temporary.

f) Employee Benefits

i) Provident Fund

The contributions remitted to government administered Provident and Pension Fund on behalf of its employees in accordance with the relevant statute are charged to the Statement of Profit and Loss as and when due. The Company has no further obligations for future Provident/Pension fund benefits other than its monthly contributions.

ii) Post Employment Benefit Plans

In the absence of any actuarial valuation done by the Management for retirement and superannuation benefits, no Provision tor

Gratuity payable to staff has been made during the year as required by Accounting Standard (AS)-15 “Employee Benefits issued by the Instiitute of Chartered Accountants of India.

iii) Other Employee Benefits

The short term employee benefits expected to be paid in exchange for the services rendered by employees is recognized during the period when the employee renders the services.

g) Revenue Recognition Sales

As per AS-9, Revenue is primarily derived from sale of Machines and their components and accessories. The sales are net of Sales Tax and Excise. Revenue from sales is recognized at the point of dispatch when risk and reward of ownership stand transferred to the customers.

Other Operating Income

Revenue on account of services/ consultancy and commission is recognized as and when services have been rendered in terms of the agreement.

Other Income

Interest and other Income is recognized on time proportion basis.

h) Foreign Currency Transactions

Transactions in foreign currency are recorded in Indian Rupees at the exchange rate prevailing on the date of the transactions. Exchange gains or losses on settlement, if any, are treated as income or expenditure respectively in the Statement of Profit and Loss. Liabilities in foreign currency as well as receivables in foreign currency as on the date of the Balance Sheet have been restated into Indian rupees at the rates of exchange prevailing as on the date of Balance Sheet.

i) Borrowing Costs

According,0 AS-ie, borrowing costs that are direct,, attributable incurred,

j) Taxation

Deferred tax assets are recognized on* if tbere is reasonable certain,, that the, will be realized and are recognized b, wa, of pnjdence in accordance with tbe Accounting Standard AS 22-’• Accounting for taxes on Income .ssued b, the Institute 0, Chartered Accountants of India. Deferred tax assets or llabiiities are established at the enacted tax rates.

Provision for Income Tax has been has been made in accordance with the assessable profits determined under the provisions of the Income Tax Act.

k) Inventories

Inventories are valued at lower of cost or net realisable value.

I) Provisions, Contingent Liabilities & Contingent Assets Etc.

A provision is recognized when the Company has a present obligation as a result of past events and it is probable that an outflow resources will be required to settle the obligation, in respect of which reliable estimate can be made.

Contingent Liabilities are not recognized but are disclosed, if any, in the Notes to Accounts.

Contingent Assets are neither recognized nor disclosed in the Financial Statements,

m) Public Issue Expenditure

Expenditure incurred on the Public Issue of Shares of the Compan, Is being written off out of the Security Premium Reserve created out of the premium proceeds on account of issue of Equity shares at Premium.

n) Prior Period and Extra Ordinary items and Changes in Accounting Policies, having a material bearing on the financial affairs of the Company are disclosed separately.