Sharp Chucks And Machines Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

Mar 31, 2025

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The Company maintains its accounts on accrual basis following the historical cost convention in accordance
with generally accepted accounting principles ["GAAP"] in compliance with the provisions of the Companies
Act, 2013 and the Accounting Standards as specified in the Companies (Accounting Standards) Rules, 2006
read with Rule 7(1) of the Companies (Accounts) Rules, 2014 issued by the Ministry of Corporate Affairs in
respect of section 133 of the Companies Act, 2013.

B. USE OF ESTIMATES

The preparation of financial statements in conformity with Indian GAAP requires judgments, estimates and
assumptions to be made that affect the reported amount of assets and liabilities, disclosure of contingent
liabilities on the date of the financial statements and the reported amount of revenues and expenses during
the reporting period. Difference between the actual results and estimates are recognized in the period in
which the results are known /materialized.

C. PRESENTATION OF FINANCIAL STATEMENTS

The Balance Sheet and the Statement of Profit and Loss are prepared and presented in the format
prescribed in the Schedule III to the Companies Act, 2013 ("the Act"). The Cash Flow Statement has been
prepared and presented as per the requirements of Accounting Standard (AS) 3 "Cash Flow Statements".
The disclosure requirements with respect to items in the Balance Sheet and Statement of Profit and Loss, as
prescribed in the Schedule III to the Act, are presented by way of notes forming part of accounts along with
the other notes required to be disclosed under the notified Accounting Standards.

D. INVENTORIES

The inventories are measured at lower of cost or net realizable value after providing for obsolescence, if
any, Cost of inventories comprises of cost of purchase, cost of conversion and other costs including
manufacturing overheads incurred in bringing them to their respective present location and condition.

E. REVENUE RECOGNITION

(a) Revenue/lncome and Cost/Expenditure are generally accounted for on accrual as they are earned or
incurred, except in case of significant uncertainties.

(b) Export incentives under various scheme promoted by Government of India are recognized on the basis
of export affected during the accounting year..

(c) Sale of goods is recognized on transfer of significant risks and rewards of ownership which is generally
on the dispatch of goods. Exports sales if any accounted for on the basis of the dates of ''On board Bill
of lading.''

(d) Dividend income is recognized when the right to receive payment is established.

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

F. PROPERTY, PLANT AND EQUIPMENT (PPE)

Property, Plant and Equipment are stated at cost less accumulated depreciation. Cost of Property, Plant
and Equipment comprises purchase price (net of duties, rebates and discounts), non refundable duties,
taxes or levies and any directly attributable cost of bringing the assets to its working condition for its
intended use.

G. INTANGIBLE ASSETS

a) Intangible assets comprise computer software and is stated at cost less accumulated amortization and
accumulated impairment, if any.

b) Costs of intangible assets under development as at the reporting date are disclosed as intangible assets
under development.

H. DEPRECIATION AND AMORTISATION

Depreciation and amortization is provided based on useful life of the assets as prescribed in Schedule II to
the Companies Act, 2013.

I. FOREIGN CURRENCY TRANSACTIONS

(a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the
date of the transaction or that approximates the actual rate at the date of the transaction.

(b) Monetary items denominated in foreign currencies at the year end are restated at year end rates.

(c) Non-monetary foreign currency items are carried at cost.

(d) Any resulting loss /gain is charged / taken to the Profit & Loss Account.

J. INVESTMENTS

Current investments are carried at lower of cost or fair value, computed category-wise. Non Current
investments are stated at cost. Provision for diminution in the value of Non Current investments is made
only if such a decline is other than temporary.

K. EMPLOYEE BENEFITS

(a) Short term employee benefits:

All employee benefits falling due within twelve months of rendering the service are classified as short
term employee benefits, which include benefits like salaries, short term compensated absences,
expected cost of performance incentives, ex-gratia etc. are recognized as expense in the period in which
the employee renders the related service.

(b) Long term employee benefits:

Long term employee benefits including compensated absences that are not expected to occur within
twelve months after the end of the period in which the employee renders related services are
recognized as a liability at the present value of the defined benefit obligation based on actuarial
valuation (under projected unit credit method) carried out at the Balance Sheet date.

(c) Post Employment Benefits:

Defined-contribution plans:

The Company has defined contribution plans (where Company pays pre-defined amounts and does
not have any legal or informal obligation to pay additional sums) for post employment benefits (viz.
Provident Fund), the Company''s contributions thereto are charged to Profit and Loss Account every
year.

i. Defined-benefit plan:

The Company has a defined benefit plan (viz., Gratuity) for employees, the liability for which is
determined on the basis of valuation carried out by an independent actuary (under projected unit
credit method) at the Balance Sheet date.

ii. Actuarial gains and losses in respect of post-employment and other long term benefits are charged
to the Profit and Loss Statement.

L. BORROWING COSTS

Borrowing costs include interest, commitment charges, amortization of ancillary costs, amortization of
discounts/premium related to borrowings, finance charges in respect of assets acquired on finance lease
and exchange differences arising from foreign currency borrowings, to the extent they are regarded as an

adjustment to interest costs.

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are
capitalized as part of cost of such asset till such time the asset is ready for its intended use or sale. A
qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended
use or sale. All other borrowing costs are recognized as an expense in the period in which they are incurred.

M. SEGMENT ACCOUNTING

Segment accounting policies are in line with the accounting policies of the company. In addition, the
following specific accounting policies have been followed for segment reporting:

i. Segment revenue includes sales and other income directly identifiable with/allocable to the
segment.

ii. Expenses that are directly identifiable with/allocable to segments are considered for determining
the segment results. Expenditure, which relate to the company as a whole and not allocable to
segments are included under "un-allocable corporate expenditure".

iii. Income, which relates to the Company as a whole and not allocable to is included in "un-allocable
corporate income".

iv. Segment assets and liabilities include those directly identifiable with the respective segments.

N. LEASES

i. Assets acquired on lease where significant portion of risks and rewards of ownership are
transferred to the lessee are classified as finance leases. Such assets are capitalized at the inception
of the lease at the lower of the fair value or the present value of minimum lease payments and a
liability is created for an equivalent amount.

ii. Assets acquired on lease where significant portion of risks and rewards of ownership are retained
by the lessor are classified as operating leases. Lease rentals are charged to Statement of Profit and
Loss on accrual basis.

O. INCOME TAXES

Tax on income for the current period is determined on the basis of taxable income and tax credits computed
in accordance with the provisions of the Income Tax Act, 1961 and based on expected outcome of
assessments.

Deferred tax is recognized on timing differences between the accounting income and the taxable income for
the year and quantified using the tax rates and laws enacted or substantively enacted as on the balance
sheet date.

Deferred tax assets relating to unabsorbed depreciation/business losses, losses under the head capital gains
are recognized and carried forward to the extent that there is virtual certainty that sufficient further taxable
income will be available against which such deferred tax assets can be realized.

Other deferred tax assets are recognized and carried forward to the extent that there is a reasonable
certainty that sufficient future taxable income will be available against which such deferred tax assets can
be realized.

P. IMPAIRMENT

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment
loss is charged to the Profit and Loss Statement in the year in which an asset is identified as impaired. The
impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate
of recoverable amount.

Q. DEFERRED REVENUE EXPENDITURE

Deferred revenue expenditure is amortized over the period of five years.

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Mar 31, 2024

Significant accounting policies

#

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The Company maintains its accounts on accrual basis following the historical cost convention in accordance with generally accepted accounting principles [“GAAP"] in compliance with the provisions of the Companias Act, 2013 and the Accounting Standards as specified in the Companies (Accounting Standards) Rules, 2006 read with Rule 7(1) of the Companies (Accounts) Rules, 2014 issued by the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013.

B. USE OF ESTIMATES

The preparation of financial statements in conformity with Indian GAAP requires judgments, estimates and assumptions to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting pehod. Difference between the actual results and estimates are recognized in the period in which the results are known /materialized.

C. PRESENTATION OF FINANCIAL STATEMENTS

The Balance Sheet and the Statement of Profit and Loss are prepared and presented in the format prescribed in the Schedule III to the Companies Act, 2013 (“the Act"). The Cash Flow Statement has been prepared and presented as per the requirements of Accounting Standard (AS) 3 “Cash Flow Statements". The disclosure requirements with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III to the Act, are presented by way of notes forming part of accounts along with the other notes required to be disclosed under the notified Accounting Standards.

D. INVENTORIES

The inventories are measured at lower of cost or net realizable value after providing for obsolescence, if any,

Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition.

E. REVENUE RECOGNITION

(a) Revenue/lncome and Cost/Expenditure are generally accounted for on accrual as they are earned or incurred, except in case of significant uncertainties.

(b) Export incentives under various scheme promoted by Government of India are recognized on the basis of export affected during the accounting year.

(c) Sale of goods is recognized on transfer of significant risks and rewards of ownership which is generally on the dispatch of goods. Exports sales if any accounted for on the basis of the dates of ''On board Bill of lading.''

(d) Dividend income is recognized when the right to receive payment is established.

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

F. PROPERTY, PLANT AND EQUIPMENT (PPE)

Property, Plant and Equipment are stated at cost less accumulated depreciation. Cost of Property, Plant and # Equipment comprises purchase price (net of duties, rebates and discounts), non refundable duties, taxes or levies and any directly attributable cost of bringing the assets to its working condition for its intended use.

G. INTANGIBLE ASSETS

a) Intangible assets comprise computer software and is stated at cost less accumulated amortization and accumulated impairment, if any.

b) Costs of intangible assets under development as at the reporting date are disclosed as intangible assets under development.

H. DEPRECIATION AND AMORTISATION

Depreciation and amortization is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013.

I. FOREIGN CURRENCY TRANSACTIONS

(a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction.

(b) Monetary items denominated in foreign currencies at the year end are restated at year end rates.

(c) Non-monetary foreign currency items are carried at cost.

(d) Any resulting loss /gain is charged / taken to the Profit & Loss Account.

J. INVESTMENTS

Current investments are carried at lower of cost or fair value, computed category-wise. Non-Current investments are stated at cost. Provision for diminution in the value of Non-Current investments is made only if such a decline is other than temporary.

K. EMPLOYEE BENEFITS

(a) Short term employee benefits:

All employee benefits falling due within twelve months of rendering the service are classified as short-term employee benefits, which include benefits like salaries, short term compensated absences, expected cost of performance incentives, ex-gratia etc. are recognized as expense in the period in which the employee renders the related service.

(b) Long term employee benefits:

Long term employee benefits including compensated absences that are not expected to occur within twelve months after the end of the period in which the employee renders related services are recognized as a liability at the present value of the defined benefit obligation based on actuarial valuation (under projected unit credit method) carried out at the Balance Sheet date.

(c) Post Employment Benefits:

i. Defined-contribution plans:

The Company has defined contribution plans (where Company pays pre-defined amounts and does not have any legal or informal obligation to pay additional sums) for post employment benefits (viz. Provident Fund), the Company’s contributions thereto are charged to Profit and Loss Account every year.

ii. Defined-benefit plan:

The Company has a defined benefit plan (viz., Gratuity) for employees, the liability for which is determined on the basis of valuation carried out by an independent actuary (under projected unit credit method) at the Balance Sheet date.

iii. Actuarial gains and losses in respect of post-employment and other long term benefits are charged to the Profit and Loss Statement.

L. BORROWING COSTS

Borrowing costs include interest, commitment charges, amortization of ancillary costs, amortization of discounts/premium related to borrowings, finance charges in respect of assets acquired on finance lease and exchange differences arising from foreign currency borrowings, to the extent they are regarded as an adjustment to interest costs.

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of cost of such asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognized as an expense in the period in which they are incurred.

M. SEGMENT ACCOUNTING

Segment accounting policies are in line with the accounting policies of the company. In addition, the following specific accounting policies have been followed for segment reporting:

i. Segment revenue includes sales and other income directly identifiable with/allocable to the segment.

ii. Expenses that are directly identifiable with/allocable to segments are considered for determining the segment results. Expenditure, which relate to the company as a whole and not allocable to segments are included under “un-allocable corporate expenditure".

iii. Income, which relates to the Company as a whole and not allocable to is included in “un-allocable corporate income".

iv. Segment assets and liabilities include those directly identifiable with the respective segments.

N. LEASES

i. Assets acquired on lease where significant portion of risks and rewards of ownership are transferred to the lessee are classified as finance leases. Such assets are capitalized at the inception of the lease at the lower of the fair value or the present value of minimum lease payments and a liability is created for

an equivalent amount. _#

ii. Assets acquired on lease where significant portion of risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to Statement of Profit and Loss on accrual basis.

O. INCOME TAXES

Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961 and based on expected outcome of assessments.

Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the balance sheet date.

Deferred tax assets relating to unabsorbed depreciation/business losses, losses under the head capital gains are recognized and carried forward to the extent that there is virtual certainty that sufficient further taxable income will be available against which such deferred tax assets can be realized.

Other deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

P. IMPAIRMENT

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Statement in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

Q. DEFERRED REVENUE EXPENDITURE

Deferred revenue expenditure is amortized over the period of five years.