Accounting Policies of TechEra Engineering (India) Ltd. Company

Mar 31, 2025

1.1 Summary of Significant Accounting Policies:

a) Use of estimates:

The preparation of financial statements in conformity with Indian GAAP requires the
management to make judgments, estimates and assumptions that affect the reported
amounts of revenues, expenses, assets and liabilities and the disclosure of contingent
liabilities, at the end of the reporting period. Although these estimates are based on the
management''s best knowledge of current events and actions, uncertainty about these
assumptions and estimates could result in the outcomes requiring a material adjustment
to the carrying amounts of assets or liabilities in future periods.

b) Property, Plant and Equipment:

Property, Plant and Equipment are stated at cost, net of accumulated depreciation and
accumulated impairment losses, if any. The cost comprises purchase price, borrowing
costs if capitalization criteria are met and directly attributable cost of bringing the asset
to its working condition for the intended use. Any trade discounts and rebates are
deducted in arriving at the purchase price. Subsequent expenditure related to an item of
fixed asset is added to its book value only if it increases the future benefits from the
existing asset beyond its previously assessed standard of performance. All other
expenses on existing Property, Plant and Equipment, including day-to-day repair and
maintenance expenditure and cost of replacing parts, are charged to the statement of
profit and loss for the period during which such expenses are incurred.

An item of property, plant and equipment is eliminated from the financial statement on
disposal or when no future benefit is expected from its use and disposal, Gain/Loss
arising from its disposal are recognized in the Statement of Profit or Loss.

c) Intangible Assets

Intangible assets are initially measured at cost. Such assets are recognized where it is
probable that the future economic benefits attributable to the assets will flow to the
company. There is no intangible asset under development held by company.

d) Capital Work in Progress and Capital Advances:

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 as at Balance Sheet date are disclosed as Long term loans and
advances.

e) Depreciation on Property, Plant and Equipment

Depreciation on Property, Plant and Equipment is provided on WDV method for the
period for which the asset is used. Depreciation on assets is provided over the useful life
of assets as prescribed under Schedule II of Companies Act, 2013. The assets residual
values, Useful lives and method of depreciation are reviewed at each financial year.

The useful lives is been based on evaluation done by the Management which are lower
than those specified in Schedule II of the Companies Act; 2013, in order to reflect the
actual usage of the assets. The residual values of the assets are not more than 5% of the
original cost of the asset.

f) Impairment of Assets

Management periodically assesses using external and internal sources whether there is an
indication that an asset may be impaired. Impairment occurs where the carrying value
exceeds the recoverable amount. The impairment loss which is the excess of carrying
amount over the higher of the assets net selling price or present value of future cash flows
expected to arise from the continuing use of the assets and its eventual disposal is charged
to the Profit & Loss Account in the respective years.

g) Borrowing Cost

Borrowing Costs specifically relating to the Acquisition or Construction of qualifying
assets that necessarily takes a substantial period of time to get ready for its intended use
are capitalized (Net of Income on temporarily deployment of funds) as part of cost of such
assets. Borrowing costs includes Interest and other costs that the company incurs in
connection with the borrowing of the funds and exchange differences arising from foreign
currency borrowings to the extent they are regarded as an adjustment to the interest
cost.

h) Investments

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 non-current 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. If an investment is acquired, or partly acquired, by the issue of shares or other
securities, the acquisition cost is the fair value of the securities issued. If an investment
is acquired in exchange for another asset, the acquisition is determined by reference to
the fair value of the asset given up or by reference to the fair value of the investment
acquired, whichever is more clearly evident.

Current investments are carried in the financial statements at lower of cost and fair
value determined on an individual investment basis. Non-Current investments are
carried at cost. However, provision for diminution in value is made to recognize a decline
other than temporary in the value of the investments.

On disposal of an investment, the difference between it carrying amount and net disposal
proceeds is charged or credited to the statement of profit and loss.

i) Inventories

Raw materials are valued at lower of cost and net realizable value. However, materials
and other items held for use in the production of inventories are not written down below
cost if the finished products in which they will be incorporated are expected to be sold at
or above cost. Cost of raw materials, components and stores and spares is determined on
a FIFO basis.

Work-in-progress and finished goods are valued at lower of cost and net realizable value.

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

j) Revenue from Operations: -

The company derives Revenue primarily from Sale of products comprising of Defense &
Space application. Revenue from contracts is recognized when control of goods and
services are transferred to the customer at an amount that reflects the consideration
entitled in exchange for those goods and services.

In circumstances, where the company expects to have any contract where the period
between the transfer of the promised goods or services to the customer falls within two
financial years, the company feels that it is necessary to adopt a method of revenue
recognition different than as per Accounting Standard - 9. Hence in case of contracts
involving design, supply, erection and commissioning of complex Tools Fixtures and
Automation systems, the company has recognized the revenue as per Accounting
Standard (AS)-7 Construction Contracts.

k) Other Income: -

Incentives on export & other Government Incentives related to operations are recognized
in the statement of Profit & Loss after the company is certain that the incentive will be
received.

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

l) Income Tax:

Tax expense comprises current tax (Including MAT and Income Tax of earlier years) and
deferred tax. Tax is recognized in the statement of profit and loss. Current Tax provision
is computed for income calculated after considering allowances and exemptions under
the provisions of the applicable Income Tax Laws. Current Tax assets and Current Tax
liabilities are off set and presented as Net.

Deferred tax reflects the impact of timing differences between taxable income and
accounting income originating during the current year and reversal of timing differences
for the earlier years. Deferred Tax assets and liabilities are measured at applicable Tax
rates.

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

m) Earnings per Share:

Basic earnings per share are calculated by dividing the net profit or loss for the period
attributable to equity shareholders by the weighted average number of equities shares
outstanding during the period. Partly paid equity shares are treated as a fraction of an
equity share to the extent that they are entitled to participate in dividends relative to a
fully paid equity share during the reporting period. The weighted average number of
equity shares outstanding during the period is adjusted for events such as bonus issue,
bonus element in a rights issue, share split, and reverse share split (consolidation of
shares) that have changed the number of equity shares outstanding, without a
corresponding change in resources for the purpose of calculating diluted earnings per
share, the net profit or loss for the period attributable to equity shareholders and the
weighted average number of shares outstanding during the period are adjusted for the
effects of all dilutive potential equity shares.

Mar 31, 2024

2.1 Summary of Significant Accounting Policies:

a) Use of estimates:

b) Property, Plant and Equipment:

Gains or losses arising from de-recognition of Property, Plant and Equipment are
measured as the difference between the net disposal proceeds and the carrying amount
of the asset and are recognized in the statement of profit and loss when the asset is
derecognized.

c) Capital Work in Progress and Capital Advances:

d) Depreciation on Property, Plant and Equipment

e) Borrowing Cost

The amount of borrowing costs capitalized during a period does not exceed the amount of
borrowing costs incurred during that period.

f) Investments

On disposal of an investment, the difference between it carrying amount and net disposal
proceeds is charged or credited to the statement of profit and loss.

g) Inventories

Raw materials, components, stores and spares are valued at lower of cost and net
realizable value. However, materials and other items held for use in the production of
inventories are not written down below cost if the finished products in which they will be
incorporated are expected to be sold at or above cost. Cost of raw materials, components
and stores and spares is determined on a FIFO basis.

Work-in-progress and finished goods are valued at lower of cost and net realizable value.

During the FY 2023-24, the company has considered the amount of Rs. 1,23,69,640/- as
a Work in Progress.

As per Accounting Standard-2, the Inventories should be valued at their Cost of
Purchase, Cost of Conversion and other costs incurred in bringing the inventories to
their present condition and location. The cost of conversion includes the costs directly
related to the units of production such as labour and direct overheads. The fixed and
variable overheads are systematically allocated that are incurred in converting the
material into finished products. Various projects of the company which are not fully
completed and also does not satisfy the conditions for AS-7, the cost incurred for such
projects have been considered as âWork-In Progressâ.

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

h) Revenue from Operations: -

The percentage completion is derived with proportion to the Cost incurred in the
financial year as compared to the expected total cost of the project. Reliance is also
placed on technical evaluation done by the engineers and certifications by management.
Contract Costs include costs that relate directly to specific contract and costs that are
attributable to the contract. When the final outcome of a contract cannot be reliably
estimated, contract revenue is recognized only to the extent of costs incurred that are
expected to be recoverable. Determination of revenues under the percentage of
completion method necessarily involves making estimates by the Company, some of
which are of a technical nature, concerning, where relevant, the percentage of
completion, expected costs to completion and the foreseeable losses to completion.
Execution of contracts necessarily extends beyond accounting periods. Revision in costs
and revenues estimated during the course of the contract are reflected in the accounting
period in which the facts requiring the revision become known.

Accordingly, during the year the company has recognized the revenue amounting to Rs.
1,15,13,007/- as per the percentage completion method.

Disclosures in terms of accounting standard 7, Construction Contract is presented
below: -

i) Other Income: -

Incentives on export & other Government Incentives related to operations are
recognized in the statement of Profit & Loss after the company is certain that the
incentive will be received.

j) Income Tax:

Tax expense comprises current tax (Including MAT and Income Tax of earlier
years) and deferred tax. Tax is recognized in the statement of profit and loss. Current Tax
provision is computed for income calculated after considering allowances and
exemptions under the provisions of the applicable Income Tax Laws. Current Tax assets
and Current Tax liabilities are off set and presented as Net.

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

k) Earnings per Share:

Basic earnings per share are calculated by dividing the net profit or loss for the
period attributable to equity shareholders by the weighted average number of equities
shares outstanding during the period. Partly paid equity shares are treated as a fraction
of an equity share to the extent that they are entitled to participate in dividends relative
to a fully paid equity share during the reporting period. The weighted average number of
equity shares outstanding during the period is adjusted for events such as bonus issue,
bonus element in a rights issue, share split, and reverse share split (consolidation of
shares) that have changed the number of equity shares outstanding, without a
corresponding change in resources for the purpose of calculating diluted earnings per
share, the net profit or loss for the period attributable to equity shareholders and the
weighted average number of shares outstanding during the period are adjusted for the
effects of all dilutive potential equity shares.

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