Accounting Policies of Yash Highvoltage Ltd. Company

Mar 31, 2025

significant accounting policies and explanatory notes to financial statements

A Company Overview:

Yash Highvoltage Limited (“the company”) was originally incorporated in name of M/s Yash Highvoltage Insulators Private Limited in 2002 by technocrats to engage in the business of manufacturing of high end transformer bushings.

The Company has been delivering innovative and highly efficient transformer bushings to the industry ranging from RIP, HV-OIP, LV High Current, HV RIP Condenser Bushings and FRP Cylinders since many years. It has spread its wings to numerous countries and created a brand name for itself. With continued patronage of its discerning customers, most of whom are domestic and global giants of the industry, clubbed with international collaborations, YASH today is synonymous with high-performance and world-class quality solutions at competitive value and has carved out a distinct niche for itself. It has a distinct track record of growth which is expected to only get better going forward.

With the vision of creating a global large scale enterprise, the present promotors have decided to take the next step whereby, the Company has been converted to a Limited Company and the name of the Company was changed to Yash Highvoltage Limited, approval to which was accorded by the Registrar of Companies on 07.03.2018.

B Basis of Preparation of Financial Statement:

The Financial Statements are prepared on accrual basis of accounting, following historical cost convention, in accordance with the provisions of the Companies Act, 2013 (‘the Act’), accounting principles generally accepted in India and it comply the accounting standards specified under Section 133 of the Act, read with relevant applicable rules, as amended from time to time. Accounting Policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. The accounting policies applied are consitent with those in the previous year unless otherwise stated.

C Use of Estimate

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statement and the results of operations during the reporting period end. Although these estimates are based upon management’s best knowledge of current

events and actions, actual results could differ from these estimates. Estimates and underlying assumptions are reviewed at each balance sheet date.

D Property Plant & Equipment:

a. Property, Plant & Equipment are stated at their cost of acquisition less any subsidy / grant received less accumulated depreciation. The cost of acquisition includes freight, installation cost, duties & taxes for which no credit is available and other incidental expenses, identifiable with the asset, incurred during the installation / acquition /construction stage in order to bring the assets to their working condition for intended use.

b. Internally generated Intangible assets have been stated at cost of generation as per Accounting Standard 26 “Intangible Assets” less accumulated amortization. Other Intangible assets are stated at direct cost incurred and other costs identified as incurred towards the same less any subsidy / grant received less accumulated amortization.

c. Any Property, Plant & Equipment under construction as at the Balance Sheet date are shown as Capital Work in Progress.

d. Depreciation on assets is being provided on the Written Down Value Method on the basis of useful lives specified in Part C of Schedule II to the Companies Act, 2013 except in respect of Server & mould where the useful life have been determined by the management to be 3 years in line with that of regular computer units & 5 years respectively based on technical assessment. Estimated useful lives of the assets are as follows:

Sr. No.	Particulars	Useful lives (in years)
1	Factory Building	30
2	Plant, Machinery & Tools & Equipment	15
3	Furniture & Fixtures	10
4	Computer	3
5	Office Equipment	5
6	Vehicle	8
7	R&D Plant & Machinery	15

e. On addition / disposals during the year, depreciation has been provided on pro-rata basis depending on period of usage.

f. Cost of Intangible Assets is amortized over its estimated useful life i.e. 5 years for Software & 10 years for Technical Know-how on pro-rata basis.

E Capital Work in Progress:

a. Capitalwork-in-progress iscarried at cost,comprising

direct cost and related incidental expenses.

F Leases:

Operating lease

Lease rentals in respect of assets acquired under operating lease are charged off to the statements of profit and loss as incurred on straight line basis.

G Investment:

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as longterm investments.

Current investments are carried at lower of cost and fair value determined on an individual investment basis.

Long-term 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.

H Inventories:

a. Raw Materials and Consumables are valued at Cost or NRV which ever is lower. The cost is arrived on FIFO basis. ''Cost'' includes all duties, taxes (other than those subsequently recoverable by the enterprise from the taxing authorities) and other expenses incurred to bring the inventories to their present location and condition.

b. Finished products are valued at lower of cost or net realizable value.

c. The Stock of Work in Progress have been valued at Raw Material cost increased by a proportion of overheads in consonance with the stage of completion as certified by the management.

d. The Stock of Scrap is valued at Realisable Value.

e. The Goods in transit are valued at Actual Cost.

Net Realisable 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.

Spare parts, servicing equipment and standby equipment meeting the definition of property, plant and equipment as per AS 10 are classified as PPE.

I Employees Benefit:

a. Employee Benefits comprise short term as well as long term defined contribution and benefit plans.

b. Contributions to Provident Fund and Employee State Insurance are defined contributions. The Company’s Contributions are charged to the Statement of Profit and Loss of the year when the contributions to the respective funds are due. There are no further obligations beyond the periodic contributions.

c. The Company policy of Leave Encashment falls under short-term compensation plan as it usually pays off the employees against their accumulated leave on a short term basis. However, unpaid leaves as at year end, if any are provided for.

d. The Company continues to have a defined benefit Gratuity plan. The Company has obtained actuarial valuation for creating a provision towards Gratuity obligations that may arise in the years to come and accordingly the amount towards Gratuity as per the report of actuarial valuation is provided for.

J Sales/Turnover Income recognition:

a. Revenue is recognized on transfer of property in goods or on transfer of significant risks and rewards of ownership to the buyer, for a consideration, without the seller retaining any effective control over the goods.

b. Sales are accounted on dispatch of goods (which generally coincides with the transfer of ownership) and are net of goods and service tax and net of returns/rejections/discounts/deductions on account of quality disputes etc.

c. In case of services, revenue is recognized on completion of particular services.

d. Other items of income such as Duty Drawback etc are accounted on accrual basis (depending on certainty of realization) and disclosed under the head “Other Operating Income”.

K Goods and Service Tax (GST) and Input Tax Credit

(ITC):

a. Purchases and Sales are accounted net of GST element and net of recoveries, if any.

b. Expenses are accounted net of GST Input Tax Credit Available.

c. Element of Input Tax Credit is set off against the amount of GST to be paid on sales / provision of

services. Net Amount Payable against GST is shown under Current Liabilities and Balance amount of Input Tax Credit of GST as at the end of the period appears under the head Loans & Advances named-Balance with revenue authorities.

L Accounting on Tax on income:

a. Provision for taxation for the year under report includes provision for Current tax as well as provision for deferred tax.

b. Provision for Current Tax is made, based on tax estimated to be payable as computed under the various provisions of the Income Tax Act, 1961.

c. Deferred tax is recognized, subject to prudence, on timing differences between taxable income and accounting income that originate during the year and are capable of being reversed in one or more subsequent periods. Deferred tax assets are recognized only to the extent that there is a reasonable certainty that future taxable income will be available against which such deferred tax assets can be realised. Deferred Tax Liabilities / Assets are quantified using the tax rates and tax laws enacted or substantively enacted as on the balance sheet date.

M impairment of Assets:

At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the assets is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit (CGU) to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual CGU, or otherwise they are allocated to the smallest group of CGU for which a reasonable and consistent allocation basis can be identified.

An intangible asset not yet available for use is tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

The Company’s corporate assets do not generate independent cash inflows. To determine impairment of a corporate asset, recoverable amount is determined for the CGUs to which the corporate asset belongs.

An impairment loss is recognized if the carrying amount

of an asset or CGU exceeds its estimated recoverable amount. Impairment losses are recognized in the statement of profit and loss. Impairment loss recognized in respect of a CGU is allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets of the CGU (or group of CGUs) on a pro rata basis.

N Borrowing Cost:

According to AS-16, borrowing costs that are directly attributable to the acquisition of qualifying assets are to be capitalized for the period until the asset is ready for its intended use. A qualifying asset being, an asset that necessarily takes a substantial period of time to get ready for its intended use. Other borrowing costs are to be recognized as an expense in the period in which they are incurred.

O Government Grants:

Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is shown as a deduction from the gross value of concerning asset and thus such grant is recognised in Profit and Loss Account over the useful life of asset by way of a reduced depreciation charge. Where the government grants are of the nature of prmoter''s contribution and no repayment is ordinarily expected in respect thereof, the grants are treated as capital reserve.

P Foreign Currency Transactions:

Transactions in foreign currency are recorded in Indian Rupees at the exchange rate prevailing on the date of the transactions. Balances of monetary items in foreign currencies, at the date of Balance Sheet i.e. foreign currency monetary transactions not settled on the Balance Sheet date, are converted into Indian Rupees at the rates of exchange prevailing on that date. Exchange gains or losses on settlement, if any, are treated as income or expenditure respectively in the Statement of Profit & Loss in the year in which they arises. Non Monetary items has been recorded at Historical Cost.

Q Foreign Currency Derivative Contracts:

The Company is exposed to foreign currency fluctuations on foreign currency assets and forecasted cash flows denominated in foreign currency. The Company tries to limit the effects of foreign exchange rate fluctuations by following risk management policies including use of

derivatives. For this the Company enters into forward exchange contracts, where the counter-party is a Bank. Theses forward contracts are not used for trading or speculation purposes.

In case of forward contracts the gain or loss arising on exercise of option or settlement or cancellation are recognized in the Statement of profit and loss for the period. The forwards contracts outstanding as at the balance sheet date, if any, are marked-to-market and corresponding exchange gain or loss is recognized on the same.

R Contingencies / Provisions:

Provisions are recognized when an enterprise has a present obligation as a result of past event for which it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the best current estimates.

Provisions for legal claims, product warranties and make good obligations are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurence or nonoccurence of one or more uncertain future events not wholly within the control of the company or the present obligations that arises from past events, where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made. Contingent Asset are neither disclosed nor recognised in Financial Statement.

S Cash & Cash Equivalents

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

T Earning Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity

shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

U Cash Flow Statement

Cash flows are reported using the Indirect Method, where by net profit before tax is adjusted for the effects of transactions of a non-cash 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 segregated.

V Non-Consolidation of Wholly Owned Subsidiary-Section-8 Company

"The Company has a wholly-owned subsidiary incorporated as a Section 8 Company under the Companies Act, 2013, established exclusively for charitable and not-for-profit purposes.

As per paragraph 11(b) of Accounting Standard (AS) 21 -Consolidated Financial Statements, a subsidiary should be excluded from consolidation when:

""it operates under severe long-term restrictions which significantly impair its ability to transfer funds to the parent.""

In this case, the Section 8 subsidiary is governed by statutory provisions which:

(i) Prohibit any distribution of profits or surplus to its members or parent entity;

(ii) Require that all income and property be applied solely for the promotion of its objects;

(iii) Result in permanent legal restrictions on the transfer of funds, including dividends and capital repatriation, to the parent company.

In view of the above, the Company has assessed that the said subsidiary operates under severe longterm statutory restrictions, significantly impairing its ability to transfer funds to the parent. Accordingly, the subsidiary has not been consolidated, in line with paragraph 11(b) of AS 21.

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Mar 31, 2024

Note 1: General Information of the company :

Yash Highvoltage Limited (“the company") was originally incorporated in name of M/s Yash Highvoltage Insulators Private Limited in 2003 by technocrats to engage in the business of manufacturing of high-end transformer bushings.

For over 20 years, the Company has been delivering innovative and highly efficient transformer bushings to the industry ranging from RIP, HV-OIP, LV High Current, HV RIP Condenser Bushings and FRP Cylinders. It has spread its wings to numerous countries and created a brand name for itself. With continued patronage of its discerning customers, most of whom are domestic and global giants of the industry, clubbed with international collaborations, YASH today is synonymous with high-performance and world-class quality solutions at competitive value and has carved out a distinct niche for itself. It has a distinct track record of growth which is expected to only get better going forward.

With the vision of creating a global large-scale enterprise, the present promoters converted the Company to a Limited Company and the name of the Company was changed to Yash Highvoltage Limited

Further, the reputed Swiss Group Pfiffner Messwandler AG, with which the Company had earlier made a technical know-how collaboration for RIP Bushings, invested in the Company through its subsidiary M/s. MGC Moser Glaser AG, by way of acquisition of a strategic 25.70% stake, which made the Company as genuine Swiss Collaborators for RIP Bushings business. The company has reaped the benefits of the same as can be witnessed by consistent growth in Turnover and Profitability.

During the year the Company has also got its in-house R&D Centre approved and has also received NABL Accreditation for its state-of-the-art Testing Facility during the first quarter of the coming year. Further, with the swiss-collaboration period for RIP Bushing parts officially ending, the Company has started developing the technology in-house as also identified other global vendors for the same.

Going forward, the Company has major expansion plans. The stake of the Swiss counterpart has been bought over by the promoter under Call Option as per the shareholders’ agreement and the Company plans to go public to meet its funds requirements for the next phase of growth.

Note 2: Significant Accounting Policies:

A) Method of Accounting:

The Financial Statements are prepared on accrual basis of accounting, following historical cost convention, in accordance with the provisions of the Companies Act, 2013 (‘the Act’), accounting principles generally accepted in India and comply the accounting standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. The Accounting Policies have been consistently applied by the Company and are consistent with those used in the previous year.

For the year under report, the Company is a Small and Medium Sized Company (SMC) as defined in the Companies (Accounting Standard) Rules, 2021 notified under the Companies Act, 2013. Accordingly, the Company has complied with the Accounting Standards as applicable to a Small and Medium Sized Company, save, and if, as otherwise mentioned in / these financials.

B) Property, Plant & Equipment:

a Property, Plant & Equipment are stated at their cost of acquisition less any subsidy I grant received less accumulated depreciation. The cost of acquisition includes freight, installation cost, duties, taxes and other incidental expenses, identifiable with the asset, incurred during the installation / construction stage in order to bring the assets to their working condition for intended use.

b. Internally generated Intangible assets have been stated at cost of generation as per Accounting Standard 26 “Intangible Assets" less accumulated amortization. Other Intangible assets are stated at direct cost incurred and other costs identified as incurred towards the same less any subsidy / grant received less accumulated amortization.

c. Any Property, Plant & Equipment under construction as at the Balance Sheet date are shown as Capital Work in Progress.

d. Depreciation on assets is being provided on the Written Down Value Method on the basis of useful lives specified in Part C of Schedule II to the Companies Act, 2013 except in respect of Server where the useful life have been determined by the management to be 3 years in line with that of regular computer units based on technical assessment.

e. On addition / disposals during the year, depreciation has been provided on pro-rata basis depending on period of usage.

f. Cost of Intangible Assets is amortized over its estimated useful life i.e. 5 years for Software & 10 years for Technical Know-how on pro-rata basis.

C) Inventory:

a. Raw Materials and Consumables are valued ‘at Cost or NRV whichever is lower'' on

FIFO basis. ’Cost’ includes all duties, taxes and other expenses incurred to bring the

inventories to their present location and condition.

b. Finished products are valued at lower of cost or net realizable value.

c Semi-Finished goods have been valued at Raw Material cost increased by a proportion of overheads in consonance with the stage of completion as certified by the

management.

D) Employee Benefits:

a. Employee Benefits comprise short term as well as long term defined contribution and benefit plans.

b. Contributions to Provident Fund and Employee State Insurance are defined

contributions. The Company’s Contributions are charged to the Statement of Profit and Loss of the year when the contributions to the respective funds are due. There are no further obligations beyond the periodic contributions.

c The Company policy of Leave Encashment falls under short-term compensation plan as it usually pays off the employees against their accumulated leave on a yearly basis. However, unpaid leaves as at year end, if any are provided for.

d. The Company continues to have a defined benefit Gratuity plan. The Company has obtained actuarial valuation for creating a provision towards Gratuity obligations that ; may arise in the years to come and accordingly the amount towards Gratuity as per the \ report of actuarial valuation is provided for.

E) Sales /Turnover and Income Recognition:

a Revenue is recognized on transfer of property in goods or on transfer of significant risks and rewards of ownership to the buyer, for a consideration, without the seller retaining any effective control over the goods.

b Sales are accounted on dispatch of goods (which generally coincides with the transfer of ownership) and are net of goods and service tax and net of returns/rejections/deductions on account of quality disputes etc.

c In case of services, revenue is recognized on completion of jobs.

d Other items of income such as Interest, Duty Drawback, Other recoveries etc are accounted on accrual basis (depending on certainty of realization) and disclosed under the head "Other Income”.

F) Goods and Sendee Tax (GST) and Input Tax Credit:

a Purchases and Sales are accounted net of GST element and net of recoveries, if any.

b. Expenses are accounted net of GST Input Tax Credit Available.

c. Element of Input Tax Credit is set off against the amount of GST to be paid on sales / provision of services. Net Amount Payable against GST is shown under Current Liabilities and Balance amount of Input Tax Credit of GST as at the end of the period appears under Loans & Advances under Indirect Taxes Recoverable.

G) Accounting for Taxes on Income:

a Provision for taxation for the year under report includes provision for Current tax as well as provision for deferred tax.

b. Provision for Current Tax is made, based on tax estimated to be payable as computed under the various provisions of the Income Tax Act, 1961.

c Deferred tax is recognized, subject to prudence, on timing differences between taxable income and accounting income that originate during the year and are capable of being reversed in one or more subsequent periods. Deferred tax assets are recognized only to the extent that there is a reasonable certainty that future taxable income will be available against which such deferred tax assets can be realised. Deferred Tax Liabilities / Assets are quantified using the tax rates and tax laws enacted or substantively enacted as on the balance sheet date.

W Impairment of Assets:

Assessment of Impairment of Assets (as covered under AS-28 Impairment of Assets) is

done as at the Balance Sheet Date considering external and internal impairment indicators.

If there is an indication that an asset may be impaired, its recoverable amount is estimated

and the impairment loss duly provided for.

I) Borrowing Costs:

According to AS-16, borrowing costs that are directly attributable to the acquisition of qualifying assets are to be capitalized for the period until the asset is ready for its intended use. A qualifying asset being, an asset that necessarily takes a substantial period of time to get ready for its intended use. Other borrowing costs are to be recognized as an expense in the period in which they are incurred.

J) Government Grants:

According to AS-12, Grants related to specific Fixed Assets are shown as a deduction from gross value of the respective Fixed Asset. The grant is thus recognized in the statement of Profit and Loss over the useful life of the depreciable asset by way of a reduced depreciation charge.

Grants related to Revenue Expenditure are reduced from related expenditure.

K) Foreign Currency Transactions :

Transactions in foreign currency are recorded in Indian Rupees at the exchange rate prevailing on the date of the transactions. Balances of Current Assets / Liabilities in foreign currencies, at the date of Balance Sheet i.e. foreign currency transactions not settled on the Balance Sheet date, are converted into Indian Rupees at the rates of exchange prevailing on that date. Exchange gains or losses on settlement, if any, are treated as income or expenditure respectively in the Statement of Profit & Loss.

L) Foreign Currency Derivative Contracts:

The Company is exposed to foreign currency fluctuations on foreign currency assets and forecasted cash flows denominated in foreign currency. The Company tries to limit the effects of foreign exchange rate fluctuations by following risk management policies including use of derivatives. For this the Company enters into forward exchange contracts, where the counter-party is a Bank. Theses forward contracts are not used for trading or speculation purposes.

In case of forward contracts the gain or loss arising on exercise of option or settlement or cancellation are recognized in the Statement of profit and loss for the period The forwards contracts outstanding as at the balance sheet date, if any, are marked-to-market and corresponding exchange gain or loss recognized on the same

M) Contingencies/Provisions:

Contingencies which can be reasonably ascertained are provided for, if in the opinion of the Management, there is a probability that it will result in an outflow for the Company in the future. Other Contingencies, the outcome of which is not certain, have been disclosed in these notes as Contingent Liabilities. Contingent Assets have not been provided for.