Accounting Policies of Vruddhi Engineering Works Ltd. Company

Mar 31, 2025

1 SIGNIFICANT ACCOUNTING POLICIES:

Company Overview

VRUDDHI ENGINEERING WORKS LIMITED was incorporated on October 27, 2020. Formerly, known as VRUDDHI STEEL LIMITED which was Changed Form VRUDDHI STEEL LIMITED to VRUDDHI ENGINEERING WORKS LIMITED. The company has registered Office Loacted at 1317, Solaris One, N.S. Phadke Road, Near Flyover bridge, Andheri (E), Mumbai-400053. Our Company is mainly engaged in offering mechanical splicing solutions to the real estate, construction and infrastructure industry by designing, engineering and supplying of rebar couplers. Our Company''s offering under this vertical includes (a) supply of rebar couplers as per our customer needs; (b) on-site threading services of the couplers; and (c) trading in threading machines and spares.

2 Basis of Preparation of Financial Statements:

(a) The Financial statements are prepared in accordance with Generally Accepted Accounting Principles (Indian GAAP) under the historical cost convention on accrual basis and on principles of going concern. The accounting policies are consistently applied by the Company.

(b) The Financial statements are prepared to comply in all material respects with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and provisions of Companies Act, 2013.

(c) The preparation of the Financial statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting year.

2.1 a) Use of Estimates:

The preparation of the Financial statements in conformity with generally accepted accounting principles in India requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting year. The Company''s most significant estimates include those on the useful life of assets, deferred taxes and provision for taxes. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results could differ from these estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates.

b) Going Concern:

Accordingly, these financial statements have been prepared on a going concern basis i.e. the assets and liabilities are recorded on the basis that the Company will be able to realize its assets and discharge its liabilities in the normal course of the business.

c) Current-Non-Current classification Assets

An asset is classified as current when it satisfies any of the following criteria:

a. it is expected to be realised in, or is intended for sale or consumption in, the company''s normal operating cycle;

b. it is held primarily for the purposes of being traded;

c. it is expected to be realised within 12 months after the reporting date; or

d. 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.

Current assets include the current portion of non-current financial assets. All other assets are classified as non-current Liabilities

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

a. it is expected to be settled in the company''s normal operating cycle;

b. it is held primarily for the purposes of being traded;

c. it is due to be settled within 12 months after the reporting date; or

d. the company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

Current liabilities include the current portion of non-current financial liabilities.

All other liabilities are classified as non-current."

d) Property, Plant and Equipment and Intangible

Property, plant and equipment are stated at cost less accumulated depreciation. Cost includes all incidental costs related to acquisition and installation, other pre-operative costs and interest on borrowed funds, if any, used to finance the acquisitions of fixed assets and is capitalized up to the date the assets are ready for commercial use.

Depreciation

Depreciation is provided over the estimated useful life of the assets using written down value method. The rates of depreciation used are those which have been calculated as per useful life specified in Schedule II of the Companies Act, 2013.

(e) Foreign Exchanges

Foreign Currency Transaction are recorded at the Exchange rate prevailing on the date of transaction. Gains and (Loss) arising out of subsequent fluctuation are accounted for an actual payment or realization Monetary items denominated in foreign currency as at the Balance Sheet date are converted at the exchange rates prevailing on that date. Exchange differences other than those relating to acquisition of fixed assets from a country outside India are recognized in the Profit and Loss Account, Exchange differences relating to acquisition of fixed assets from a country outside India are adjusted to carrying cost of fixed assets.

f) Impairment of assets

The carrying values of assets / cash generating units at each balance sheet date are reviewed for impairment if any indication of impairment exists.

If the carrying amount of the assets exceed the estimated recoverable amount, an impairment is recognized for such excess amount. The impairment loss is recognized as an expense in the statement of profit and loss,

unless the asset is carried at revalued amount, in which case any impairment loss of the revalued asset is treated as a revaluation decrease to the extent a revaluation reserve is available for that asset.

When there is indication that an impairment loss recognized for an asset (other than a revalued asset) in earlier accounting year no longer exists or may have decreased,such reversal of impairment loss is recognized

in the Statement of Profit and Loss, to the extent the amount was previously charged to the Statement of Profit and Loss. In case of revalued assets such reversal is not recognized.

g) Revenue Recognition:

Revenue/income are recognised generally when goods & services are supplied to customers and are recorded inclusive of Goods and service Tax

Interest is recognised generally when it is accrued and its probable that the entity will receive it

Dividend is recognised generally when it has been announced and it is probable that inflow of resources embodying economic benefits will flow to the entity

h) Investments:

Investments are classified into current and non-current investments. Current investments are stated at the lower of cost and fair value. Non-current investments are stated at cost. A provision for diminution is made to recognise a decline, other than temporary, separately for each individual non-current investment. Investments that are readily realizable and are expected to be realized within twelve months after the reporting date are classified as “Current investments”. All other investments are classified as “Non-current investments”.

i) Provision for Current and Deferred Tax:

Current Tax: Provisions for Current Tax is made at the current rate of tax after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961.

Deferred Tax: Deferred tax resulting from "timing difference" between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognised and carried forward only to the extent that there is a reasonable certainty that the assets will be realised in future.

j) Provision, Contingent Liabilities and Commitments:

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

(b) Contingent Liabilities are shown by way of notes to the Accounts in respect of obligations where, based on the evidence available, their existence at the Balance Sheet date is considered not probable.

(c) A Contingent Assets are recognized when realisation of income is virtually certain.

k) Cash Flow Statements:

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a noncash nature, any deferrals, or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing, and financing activities are segregate.

l) Borrowing Cost:

Borrowing costs that are attributable to the acquisition or construction of the qualifying assets are capitalized as part of the cost of such assets. A qualifying assets is one that necessarily takes a substantial period of time to get ready for its intended uses or sale. All other borrowing costs are charged to revenue in the year of incurrence. The amount of borrowing cost capitalized during the year is Not Applicable.

m) Cash and Cash Equivalents:

Cash and cash equivalents comprise cash and deposit with banks. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

n) Employee Benifits:

Benefits in the Provident Fund and Pension Schemes whether in pursuance of law or otherwise which are defined contributions are accounted on accrual basis and charged to Profit & Loss Account of the year.

1. Gratuity: Payment for present liability of future payment of gratuity is being made to approved gratuity funds, which fully cover the same under cash accumulation policy of the Life Insurance Corporation of India. The employee''s gratuity is a defined benefit funded plan. The present value of the obligation under such defined benefit plan is determined based on the actuarial valuation using the Projected Unit Credit Method as at the date of the Balance Sheet and the shortfall in the fair value of the

plan Assets is recognised as an obligation.

2. Privilege Leave Benefits: Privilege Leave Benefits or compensated absences are considered as long-term unfunded benefits and are recognised based on an actuarial valuation using the projected Unit Credit Method determined by an appointed Actuary.

3. Termination benefits: Termination benefits such as compensation under voluntary retirement scheme are recognized as a liability in the year of termination.

o) Segment Reporting

As the Company''s business activity falls within a single primary business segment namely, engaged in offering mechanical splicing solutions to the real estate, construction and infrastructure industry by designing, engineering and supplying of rebar couplers, and a single geographical segment, the disclosure requirements of Accounting Standard AS-17 on Segment Reporting as under Companies (Accounting Standards) Rules, 2006 are not applicable.

p) Inventories:

Inventories are valued after providing for obsolescence, as follows:

a) Raw Materials, Semi Finished goods 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 is determined on Weighted Average Cost basis.

b) Work-in-Progress is valued at raw material cost plus proportionate conversion cost. Net realizable value is the estimated selling price in the ordinary resources of business, less estimated costs of completion and estimated costs necessary to make the sale, however due to the nature of the company the own manufactured goods are valued at a Retail Method basis on a consistent basis, however the Trading Goods are valued at the lower of Cost or Net Realisable Value.

2.2 Earnings per Share:

Basic earnings per share is calculated by dividing the net profit or loss after tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

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Mar 31, 2024

1 SIGNIFICANT ACCOUNTING POLICIES:

Company Overview

VRUDDHI ENGINEERING WORKS LIMITED was incorporated on October 27, 2020. Formerly, known as VRUDDHI
STEEL LIMITED which was Changed Form VRUDDHI STEEL LIMITED to VRUDDHI ENGINEERING WORKS
LIMITED. The company has registered Office Loacted at 1317, Solaris One, N.S. Phadke Road, Near Flyover bridge,
Andheri (E), Mumbai-400053. Our Company is mainly engaged in offering mechanical splicing solutions to the real
estate, construction and infrastructure industry by designing, engineering and supplying of rebar couplers. Our
Company''s offering under this vertical includes (a) supply of rebar couplers as per our customer needs; (b) on-site
threading services of the couplers; and (c) trading in threading machines and spares.

2 Basis of Preparation of Financial Statements:

(a) The Financial statements are prepared in accordance with Generally Accepted Accounting Principles (Indian
GAAP) under the historical cost convention on accrual basis and on principles of going concern. The accounting
policies are consistently applied by the Company.

(b) The Financial statements are prepared to comply in all material respects with the Accounting Standards
specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and provisions of
Companies Act, 2013.

(c) The preparation of the Financial statements requires estimates and assumptions to be made that affect the
reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period.

2.1 a) Use of Estimates:

The preparation of the Financial statements in conformity with generally accepted accounting principles in India
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts
of revenues and expenses during the reporting period. The Company''s most significant estimates include those on
the useful life of assets, deferred taxes and provision for taxes. Management believes that the estimates used in the
preparation of the financial statements are prudent and reasonable. Actual results could differ from these estimates.
Appropriate changes in estimates are made as management becomes aware of changes in circumstances
surrounding the estimates.

b) Going Concern:

Accordingly, these financial statements have been prepared on a going concern basis i.e. the assets and liabilities
are recorded on the basis that the Company will be able to realize its assets and discharge its liabilities in the
normal course of the business.

c) Current-Non-Current classification
Assets

An asset is classified as current when it satisfies any of the following criteria:

a. it is expected to be realised in, or is intended for sale or consumption in, the company''s normal operating cycle;

b. it is held primarily for the purposes of being traded;

c. it is expected to be realised within 12 months after the reporting date; or

d. 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.

Current assets include the current portion of non-current financial assets. All other assets are classified as non¬
current
Liabilities

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

a. it is expected to be settled in the company''s normal operating cycle;

b. it is held primarily for the purposes of being traded;

c. it is due to be settled within 12 months after the reporting date; or

d. the company does not have an unconditional right to defer settlement of the liability for at least 12 months after
the reporting date.

Current liabilities include the current portion of non-current financial liabilities.

All other liabilities are classified as non-current."

d) Property, Plant and Equipment and Intangible

Property, plant and equipment are stated at cost less accumulated depreciation. Cost includes all incidental costs
related to acquisition and installation, other pre-operative costs and interest on borrowed funds, if any, used to
finance the acquisitions of fixed assets and is capitalized up to the date the assets are ready for commercial use.
Depreciation is provided over the estimated useful life of the assets using written down value method. The rates of
depreciation used are those which have been calculated as per useful life specified in Schedule II of the Companies
Act, 2013.

(e) Foreign Exchanges

Foreign Currency Transaction are recorded at the Exchange rate prevailing on the date of transaction. Gains and
(Loss) arising out of subsequent fluctuation are accounted for an actual payment or realization Monetary items
denominated in foreign currency as at the Balance Sheet date are converted at the exchange rates prevailing on that
date. Exchange differences other than those relating to acquisition of fixed assets from a country outside India are
recognized in the Profit and Loss Account, Exchange differences relating to acquisition of fixed assets from a
country outside India are adjusted to carrying cost of fixed assets.

f) Impairment of assets

The carrying values of assets / cash generating units at each balance sheet date are reviewed for impairment if any
indication of impairment exists.

If the carrying amount of the assets exceed the estimated recoverable amount, an impairment is recognized for such
excess amount. The impairment loss is recognized as an expense in the statement of profit and loss,
unless the asset is carried at revalued amount, in which case any impairment loss of the revalued asset is treated as
a revaluation decrease to the extent a revaluation reserve is available for that asset.

When there is indication that an impairment loss recognized for an asset (other than a revalued asset) in earlier
accounting periods no longer exists or may have decreased,such reversal of impairment loss is recognized
in the Statement of Profit and Loss, to the extent the amount was previously charged to the Statement of Profit and
Loss. In case of revalued assets such reversal is not recognized.

g) Revenue Recognition:

Revenue/income are recognised generally when goods & services are supplied to customers and are recorded
inclusive of Goods and service Tax

h) Investments:

Investments are classified into current and non-current investments. Current investments are stated at the lower of
cost and fair value. Non-current investments are stated at cost. A provision for diminution is made to recognise a
decline, other than temporary, separately for each individual non-current investment. Investments that are readily
realizable and are expected to be realized within twelve months after the reporting date are classified as "Current
investments”. All other investments are classified as "Non-current investments”.

i) Provision for Current and Deferred Tax:

Current Tax: Provisions for Current Tax is made at the current rate of tax after taking into consideration benefits
admissible under the provisions of the Income Tax Act, 1961.

Deferred Tax: Deferred tax resulting from "timing difference" between book and taxable profit is accounted for
using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The
deferred tax asset is recognised and carried forward only to the extent that there is a reasonable certainty that the
assets will be realised in future.