Accounting Policies of Storage Technologies & Automation Ltd. Company

Mar 31, 2025

1. Corporate Information

Storage Technologies & Automation Limited ("the Company") is a public limited company incorporated in India and domiciled in Bengaluru, Karnataka. It was originally incorporated on March 19, 2010, as a private limited company and was converted into a public limited company on October 12, 2023 having its registered office at No 10, Survey No 21/6A, 21/7A, 21/7B and 21/8 Singanayakanahalli, Yelahanka, Bangalore, Bangalore, Karnataka, India, 560064. The Company is engaged in the business of designing, manufacturing, supplying, and installing metal storage racks, automated warehousing systems, and related automation solutions. The Company was listed in BSE SME Start-up Platform as on 25th MAY 2024.

These Financial Statements were authorized for issue by the Board of Directors on 30th May 2025.

2. Basis of Preparation of Financial Statements (AS 1)

(i) Statement of compliance and basis of preparation

These Financial statements of the Company has been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 2013.

These financial statements have been prepared to comply in all material aspects with the Accounting Standards notified under Rule 7of the Companies (Accounts) Rules, 2014 in respect of section 133 of the Companies Act, 2013 and other recognized accounting practices and policies.

The Accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

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 Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has determined its operating cycle as twelve months for the purpose of current - non-current classification of assets and liabilities.

(ii) Basis of measurement

These financial statements have been prepared on a under historical cost convention and on accrual basis and on principles of going concern.

Rounding of amounts

All amounts disclosed in the financial statements and notes have been rounded off to the Nearest Lakhs as per the requirement of Schedule III, unless otherwise stated.

(iii) Use of Estimates

''The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialize.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

(iv) Cash and Cash Equivalents

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that readily convertible into known amounts of cash and which are subject to insignificant risk changes in value.

3. Inventories (AS 2)

(a) Inventories are measured at lower of cost or net realizable value & work in progress are measured at percentage of completion as on 31-03-2025. The cost of inventories is based on the first-in, first-out principle.Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

(b) Inventories comprises of Raw Material, Stores and spares, Work in progress and Finished Goods.

(c) During the year the company recognized inventory in books of Rs. 1,314.99 lakhs.

4. Cash Flow Statement (AS 3)

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of non cash items and changes in working capital. Cash and cash equivalents include cash in hand, balances with banks and short term highly liquid investments with original maturities of three months or less.

5. Contingencies and Events Occurring After the Balance Sheet Date (AS 4)

During the current reporting period, there are no contingencies or events occurring after the balance sheet date that require adjustment to or disclosure in the financial statements.

6. Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies (AS 5)

If there are any prior period expenditure / (income) exceeding Rs 20,000/- per transaction is shown under the head "Prior Period Adjustments Account "in the Statement of Profit and Loss for the year in line with Accounting standard 5 "Net Profit or Loss for the period, prior period Items and change in accounting Policies".

During the current reporting period, no prior period items, exceptional items, or changes in accounting policies have been reported.

7. Revenue Recognition (AS 9)

Sale of goods: Revenue is recognised when control and significant risks and rewards of ownership are transferred to the customer, generally on dispatch/delivery as per terms, the amount can be measured reliably, and collection is reasonably assured. Sales are net of returns, trade discounts and volume rebates, and inclusive/exclusive of taxes as per Schedule III. Rendering of services: Revenue from services is recognized, when services have been performed as per terms of contract, amount can be measured and there is no significant uncertainty as to collection. The Company adopts accrual concepts in preparation of accounts. Claims /Refunds not ascertainable with reasonable certainty are accounted for, on final settlement.

Other income: Interest income is recognised on a time-proportion basis using the effective interest rate; dividend income is recognised when the right to receive is established.

8. Property, Plant and Equipment (AS 10)

Property, plant and equipment is stated at acquisition cost net of accumulated depreciation and accumulated impairment losses, if any. Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the Statement of Profit and Loss during the period in which they are incurred.

Gains or losses arising on retirement or disposal of property, plant and equipment are recognized in the Statement of Profit and Loss.

Component accounting: Significant parts of an item of PPE with different useful lives are recognised separately and depreciated accordingly.

Depreciation: Depreciation is provided on the written down value method over the useful lives prescribed in Schedule II to the Act or based on technical estimates where different. Residual values and useful lives are reviewed at each year end.

9. The Effects of Changes in Foreign Exchange Rates (AS 11)

Foreign currency transactions are recorded at the exchange rates prevailing on the date of the transaction.

Monetary items denominated in foreign currency are restated at the closing exchange rates at the balance sheet date; exchange differences are recognised in the Statement of Profit and Loss. Non monetary items are carried at historical cost or fair value as per the original recognition. During the current reporting period, no material exchange differences or foreign currency translation impacts requiring specific disclosure have arisen.

Foreign currency inflow and out flow FY 24-25:

a. Inflow in foreign exchange: 282.33 Lakhs

b. Outflow in foreign exchange: 13.64 Lakhs

10. Accounting for Government Grants (AS 12)

During the current reporting period, the Company has not received any government grants, subsidies, or assistance of the nature covered under this Standard.

11. Investments (AS-13)

As per AS-13, Investments, which are readily realizable and intended to be held for not more than one year, are classified as current investments. All other investments are classified as long term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.

Non-current investments are carried at cost less any other-than-temporary diminution in value, determined on the specific identification basis.

Profit or loss on sale of investments is determined as the difference between the sale price and carrying value of investment, determined individually for each investment. Cost of investments sold is arrived using average method.

12. Employee Benefits (AS-15)

As per AS-15, Employee benefits include provident fund and Employee State Insurance. Contribution to provident fund and Employee State Insurance is charges as an expense as they fall due based on the amount of contribution required to be made.

a. Defined contribution plan: Company''s contributions due/ payable during the year towards provident fund are recognized in the profit and loss account. The Company has no obligation other than the contribution payable to the contribution payable to the provident fund and Employee state insurance.

b. Defined Benefit Plan: The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service without any monetary limit. Vesting occurs upon completion of five years of service.

13. Borrowing Costs (AS 16)

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of the asset. Other borrowing costs are recognised as expense in the period in which they are incurred.

14. Segment Reporting (AS 17)

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Inter-segment revenue is accounted on the basis of transactions which are primarily determined based on market / fair value factors. Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "unallocated revenue / expenses / assets / liabilities".

Based on internal reporting, the Company operates in a single business/geographical segment; hence, segment reporting is not applicable.

16. Accounting of Lease (AS-19)

The Company as a lessee

The Company assesses whether a contract contains a lease in it''s financials audited and the same procures have been following for current financial year. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

1. The contract involves the use of an identified asset

2. The Company has substantially all of the economic benefits from use of the asset through the period of the lease and

3. The Company has the right to direct the use of the asset.

At the date of commencement of lease, the company has assessed the lease to be of low value and for a term of less than 12 months. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.

17. Earnings per Share (AS 20)

During the current reporting period, the Company has computed and disclosed Earnings per Share (EPS) in accordance with AS 20. Basic EPS is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Diluted EPS is computed by adjusting the net profit or loss attributable to equity shareholders and the weighted average number of shares outstanding for the effects of all dilutive potential equity shares. During the current reporting period, no instruments having dilutive potential equity shares are outstanding, and accordingly, Basic and Diluted EPS are the same.

18. Accounting for Taxes on Income (AS 22)

Current Tax: Income taxes are accounted for in accordance with Accounting Standard (AS-22) -"Accounting for taxes on income", notified under Companies (Accounting Standard) Rules, 2014. Income tax comprises of both current and deferred tax. Current tax is measured on the basis of estimated taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred Tax: The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. They are measured using substantially enacted tax rates and tax regulations as of the Balance Sheet date.

Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognized, only if there is virtual certainty of its realization, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is a reasonable certainty of its realization.

Deferred tax liabilities are recognized for the taxable timing differences. Deferred tax assets including the unrecognized deferred tax assets, if any, at each reporting date, are recognized for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which deferred tax assets can be realized. The carrying amount of deferred tax assets/liabilities are reviewed at each reporting date and are adjusted for its appropriateness.

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 deferred tax assets and deferred taxes relate to the same taxable entity and the same taxation authority. the Company has recognised current tax liabilities as per the Income-tax Act, 1961, and no material deferred tax assets/liabilities requiring additional disclosure have arisen.

19. Intangible Assets (AS 26)

The Company has followed AS 26 for recognition, measurement, and amortisation of intangible assets. Intangible assets are recorded at cost of acquisition/implementation and are amortised over their estimated useful lives on a systematic basis. The Company reviews the useful lives and carrying values of intangible assets at each reporting date and makes adjustments, if required, in accordance with the Standard. During the current reporting period, the Company does not hold any intangible assets such as patents, trademarks, or software requiring disclosure under this Standard.

20. Impairment of Assets (AS 28)

The Company has assessed the carrying amounts of its assets in accordance with AS 28 to determine whether there is any indication of impairment as at the reporting date. If any indication exists, the recoverable amount of the asset is estimated and compared with its carrying amount. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount. Reversal of impairment losses is recognised when there is an indication that the impairment loss recognised in prior periods no longer exists or has decreased. During the current reporting period, the Company has not identified any indications of impairment in respect of its assets and accordingly no impairment loss has been recognised.

21. Provisions, Contingent Liabilities and Contingent Assets (AS 29)

The Company has evaluated all obligations in accordance with AS 29 to determine whether a provision should be recognised or a contingent liability should be disclosed. Provisions are recognised only when the Company has a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Contingent liabilities are disclosed when there is a possible obligation depending on future uncertain events, or a present obligation where an outflow is not probable or the amount cannot be reliably estimated. Contingent assets are not recognised but disclosed where an inflow of economic benefits is probable.

23. Dividend

The board considered and recommend Dividend of Rs.0.30 (@3%) per equity share of face value of RS. 10 each for the Financial Year 2024-25, subject to the approval by the Shareholders of the company at the ensuing Annual General Meeting (AGM).

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Mar 31, 2024

1. Company Overview

Storage Technologies and Automation Private Limited is a Private Limited Company in India and Incorporated under the provisions of the Companies Act, 1956. It came into existence on 19^th Mar 2010 vide CIN: U74900KA2010PTC052918.

The Company has been converted from Private Company to Public Company w.e.f. 12^th October 2023 and the name of the said Company is changed to "STORAGE TECHNOLOGIES AND AUTOMATION LIMITED" vide CIN: U74900KA2010PLC052918. The Company was listed in BSE SME Startup platform on 08^th MAY 2024.

The Company is mainly carrying out the business of Manufacturing, Trading and services of Iron Racks. Within its short span of operation, the company has achieved many milestones in the above-mentioned fields. The address of its registered office is Storage Technologies and Automation Pvt Ltd No.10, Survey No.21/6A, 21/7A, 21/7B and 21/8 Singanayakanahalli, Yelahanka, Bangalore, Bangalore, Karnataka, India, 560064.

These Financial Statements were authorized for issue by the Board of Directors on 30^th May 2024

2. Significant Accounting Policies:

AS: 1 Basis of preparation of financial statements:

1) Statement of compliance and basis of preparation

These Financial statements of the Company has been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 2013.

These financial statements have been prepared to comply in all material aspects with the Accounting Standards notified under Rule 7of the Companies (Accounts) Rules, 2014 in respect of section 133 of the Companies Act, 2013 and other recognized accounting practices and policies.

The Accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

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 Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has determined its operating cycle as twelve months for the purpose of current - non-current classification of assets and liabilities.

2) Basis of measurement

These financial statements have been prepared on an under historical cost convention and on accrual basis and on principles of going concern.

Rounding of amounts

All amounts disclosed in the financial statements and notes have been rounded off to the nearest Lakhs as per the requirement of Schedule III, unless otherwise stated.

3) Uses of Estimates:

''The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialize.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

4) Cash and Cash Equivalents:

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that readily convertible into known amounts of cash and which are subject to insignificant risk changes in value.

3. AS-2: Changes in Inventory:

a. Inventories are measured at lower of cost or net realizable value & work in progress are measured at percentage of completion as on 31-03-2024. The cost of inventories is based on the first-in, first-out principle.Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

b. Inventories are comprised of Raw Material, Stores and spares, Work in progress and Finished Goods.

c. During the year the company recognized inventory in books of Rs.1160.76 lakhs.

4. AS-4: Contingencies & Events Occurring After Balance Sheet Date:

There are no material Contingencies & Events which occurred after the Balance Sheet date which required adjustment in financial statements.

5. AS-5: Prior period Adjustments

If there are any prior period expenditure / (income) exceeding Rs 20,000/- per transaction is shown under the head "Prior Period Adjustments Account "in the Statement of Profit and Loss for the year in line with accounting standard 5 "Net Profit or Loss for the period, prior period Items and change in accounting Policies".

6. AS-9: Revenue Recognition:

Revenue from sale of goods is Recognized only when significant risk and rewards of ownership has been transferred to the buyer and it can be reliably measured and its reasonable to expect ultimate collection of it. Gross sales are net trade discount & rebates.

Revenue from services is recognized when services have been performed as per terms of contract, the amount can be measured and there is no significant uncertainty as to collection. The Company adopts accrual concepts in preparation of accounts. Claims/Refunds not ascertainable with reasonable certainty are accounted for, on final settlement.

Other income:

Other Income is accounted for when the right to receive such income is established.

All the income accrued during the year is recognised as per AS-9.

7. AS-10: Property, Plant and Equipment

Property, Plant and Equipments are recognised & provided depreciation as per AS-10.

(i) Property, Plant & Equipment

Property, plant and equipment is stated at acquisition cost net of accumulated depreciation and accumulated impairment losses, if any. Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the Statement of Profit and Loss during the period in which they are incurred.

Gains or losses arising from retirement or disposal of property, plant and equipment are recognized in the Statement of Profit and Loss.

(ii) AS- 26: Intangible Assets

''Intangible Assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any.

DEPRECIATION / AMORTISATION

Depreciation on fixed assets is calculated on a Written - Down value method using the rates arrived at based on the useful lives estimated by the management, or those prescribed under Schedule II to the Companies Act, 2013.

8. AS-11: Foreign Exchange Transactions/Translations:

Income and expenses in foreign currencies are converted at exchange rates prevailing on the date of the transaction. Any income or expense on account of exchange difference either on settlement or on translation at the balance sheet date is recognized in Profit & Loss Account in the year in which it arises.

Foreign currency inflow and out flow FY 23-24:

a. Inflow in foreign exchange:

b. Outflow in foreign exchange: Nil

9. AS-13: Investments:

As per AS-13, Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.

On initial recognition, all investments are measured in cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.

Non-current investments are carried at cost less than any other-than-temporary diminution in value, determined on the specific identification basis.

Profit or loss on sale of investments is determined as the difference between the sale price and carrying value of investment, determined individually for each investment. Cost of investments sold arrived using the average method.

10. AS-15: Retirement and Other Employee Benefits:

As per AS-15, Employee benefits include provident fund and Employee State Insurance. Contribution to provident fund and Employee State Insurance is charges as an expense as they fall due based on the amount of contribution required to be made.

a. Defined contribution plan:

Company''s contributions due/ payable during the year towards provident fund are recognized in the profit and loss account. The Company has no obligation to other than the contribution payable to the contribution payable to the provident fund and Employee state insurance.

b. Defined Benefit Plan:

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service without any monetary limit. Vesting occurs upon completion of five years of service. Provision for gratuity has been made in the books as per actuarial valuation done as at the end of the year.

11. AS: 16: Borrowing Cost

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for intended use. All other borrowing costs are recognised in the Statement of Profit and Loss in the period in which they are incurred.

12. AS-17 Segment Reporting

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Inter-segment revenue is accounted on the basis of transactions which are primarily determined based on market / fair value factors. Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment.

Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "unallocated revenue/ expenses/assets / liabilities".

13. AS-18: Related Party Disclosure:

As per AS: 18 related party transactions are disclosed as follows:

Name of Related Party	Amount	Nature of Relationship	T ransaction undertaken During the year
Syed Azeem	20,89,347.00	Director	Salary
Afzal Hussian	20,89,347.00	Director	Salary

Arif Khatri	20,89,347.00	Director	Salary
Hanif Khatri	25,07,301.00	Director	Salary
Khasim Sait	20,89,347.00	Director	Salary
Nuuman Khasim	20,89,347.00	Director	Salary
Afzal Hussian	4,18,745.00	Director	Reimbursement
Syed Azeem	1,74,324.00	Director	Reimbursement
Khasim Sait	1,84,326.00	Director	Reimbursement
Nuuman Khasim	5,69,678.00	Director	Reimbursement
Arif Khatri	52,554.00	Director	Reimbursement
Glaukoustech Solutions Private Limited	40,55,561	Subsidiary company	Purchases
Glaukoustech Solutions Private Limited	18,79,659	Subsidiary company	Sales
DI &P Services Pvt Ltd	-	Subsidiary company	Sales

14. AS-19: Accounting of Lease The Company as a lessee

The Company assesses whether a contract contains a lease in its restated financials audited and the same procures have been following for current financial year. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

1. The contract involves the use of an identified asset

2. The Company has substantially all of the economic benefits from use of the asset through the period of the lease and

3. The Company has the right to direct the use of the asset.

At the date of commencement of the lease, the company assessed the lease to be of low value and for a term of less than 12 months. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.

15. AS-20: Earnings per Share

Basic earnings per share are computed by dividing the profit/(loss) after tax (including the post-tax effect of extraordinary items, if any) by the weighted average number of equities share outstanding during the year. Diluted earnings per share is computed by dividing the profit/ (loss) after tax (including the post-tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.

As per Accounting Standard 20 issued by the Institute of Chartered Accountants of India, Earnings per Share is disclosed as under-

(In Lakhs)
Particulars	31.03.2024		31.03.2023
Net Profit available to Equity Shareholders (A)	581	18	28.58
No. of Equity shares outstanding during the year(B)	90		30

Basic Earnings per Share=(A)/(B)	6.46	0.95
Diluted Earnings per Share	6.46	0.95

16. AS-22: Accounting for Taxes on Income:

Current Tax:

Income taxes are accounted for in accordance with Accounting Standard (AS-22) -"Accounting for taxes on income", notified under Companies (Accounting Standard) Rules, 2014.

Income tax comprises of both current and deferred tax.

Current tax is measured on the basis of estimated taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred Tax:

The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. They are measured using substantially enacted tax rates and tax regulations as of the Balance Sheet date.

Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognized, only if there is virtual certainty of its realization, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is a reasonable certainty of its realization.

Deferred tax liabilities are recognized for the taxable timing differences. Deferred tax assets including the unrecognized deferred tax assets, if any, at each reporting date, are recognized for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which deferred tax assets can be realized. The carrying amount of deferred tax assets/liabilities are reviewed at each reporting date and are adjusted for its appropriateness.

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 deferred tax assets and deferred taxes relate to the same taxable entity and the same taxation authority.

17. AS-28: Impairment of Assets:

An asset is treated as impaired when the carrying cost of an asset exceeds its recoverable value. A recoverable amount is the higher of an asset''s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from sale of the asset in an arm''s length transaction between knowledgeable, willing parties, less the costs of disposal. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of the recoverable value.

18. AS-29: Provisions, Contingent Liabilities and Contingent Assets

Provision involving a substantial degree of estimation in measurement is recognized when there is a present obligation as a result of past events, and it is probable that there will be an outflow of resources.

Contingent liabilities are not recognized but are disclosed in the notes.

Contingent assets are neither recognized nor disclosed in the financial statements.

19. Managerial Remuneration:

Remuneration paid to the Directors during the financial year:

Director	Amount (Rs.)
Syed Azeem	20,89,347.00
Afzal Hussian	20,89,347.00
Arif Khatri	20,89,347.00
Hanif Khatri	25,07,301.00
Khasim Sait	20,89,347.00
Nuuman Khasim	20,89,347.00

20. Dividend:

The Board of Directors of the Company has not recommended any Dividend for the year.