Accounting Policies of Kusam Electrical Industries Ltd. Company

Mar 31, 2024

2. Significant Accounting Policies:

2.1 Basis of preparation:

a) The financial statements of the Company have been prepared in accordance with accounting
standards prescribed under Section 133 of the Companies Act 2013 (the Act), Companies
(Indian Accounting Standards) Rules, 2015 as amended by Companies (Indian Accounting
Standards)(Amendment) Rules, 2016 and other relevant provisions of the Act.

b) The financial statements have been prepared under the historical cost and on accrual basis,
except for certain provisions recognized using actuarial valuation techniques.

c) With effect from 1st April, 2019, Ind AS 116 - “Leases" (Ind AS 116) supersedes Ind AS 17 -
"Leases". The Company has adopted Ind AS 116 using the modified retrospective approach. The
application of Ind AS 116 has resulted into recognition of ''Right-of-Use'' asset with a
corresponding Lease Liability in the Balance Sheet.

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

2.2 Significant accounting judgements, estimates and assumptions:

The preparation of the Company''s financial statements requires management to make
judgements, estimates and assumptions that affect the reported amounts of revenues, expenses,
assets and liabilities, and the accompanying disclosures, and the disclosure of contingent
liabilities as at the Balance Sheet date.

Uncertainty about these assumptions and estimates could result in outcomes that require a
material adjustment to the carrying amount of assets or liabilities affected in future periods. Any
revisions to the accounting estimates are recognized prospectively when revised, in current and
future periods.

Some of the items where significant judgements and assumptions exercised are given as
under:-

• Deferred tax

• Defined benefit plans

• Fair value measurements of financial instruments

a) Current versus non-current classification

The classification of an asset/liability either current or non-current has been made applying
the criteria of realization/payment of such assets/liability within a period of 12 months after
the reporting date. The Company classifies all other assets / liabilities as non-current.

b) Foreign currencies
Functional & presentation currency

The financial statements are presented in Indian Rupees (INR), which is also the Company''s
functional currency.

Transactions and Balances

Foreign Currency transactions are accounted at the rates prevailing on the date of
transaction. Year-end monetary assets and liabilities are translated at the exchange rate
prevailing on the date of the Balance sheet.

Exchange differences arising on settlement or translation of monetary items are recognized in
Statement of Profit and loss for the period in which they arise.

c) Fair value measurement

All assets and liabilities for which fair value is measured or disclosed in the financial
statements are categorized within the fair value hierarchy, described as follows, based on
the lowest level input that is significant to the fair value measurement as a whole:

• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or
liabilities

• Level 2 — Valuation techniques for which the lowest level input that is significant to the
fair value measurement is directly or indirectly observable

• Level 3 — Valuation techniques for which the lowest level input that is significant to the
fair value measurement is unobservable

For the purpose of fair value disclosures, the Company has determined classes of assets
and liabilities on the basis of the nature, characteristics and risks of the asset or liability and
the level of the fair value hierarchy as explained above.

d) Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to
the Company and the revenue can be reliably measured, regardless of when the payment is
being made.

Revenue is measured at the fair value of the consideration received or receivable, taking into
account contractually defined terms of payment. Amounts disclosed as revenue are inclusive
of excise duty and net of returns, rebates, Value added taxes / GST and amounts collected
on behalf of third parties.

Sale of Goods/Service

Revenue is recognized to the extent that it is probable that the economic
benefits will flow to the company and the revenue can be reliably measured, regardless of
when the payment is being made.

Volume discounts, pricing incentives and other variable rebates are reduced from revenue.
In respect of quantity rebates, the company recognizes the liability based on the estimate of
the customer future purchases. Any change in the estimated amount of obligation of
discount is accounted in the period in which the change occurs.

Interest income

For all debt instruments measured either at amortized cost or at fair value through other
comprehensive income, interest income is recorded using the effective interest rate (EIR).

Rental income

Rental income arising from operating leases is accounted on accrual basis in accordance
with the terms of the contract since such charges are structured to increase in line with
expected general inflation to compensate for expected inflationary cost.

e) Taxation

Income tax expense for a financial year represents the sum of tax currently payable,
adjustments for tax provisions of previous years and deferred tax.

Current tax

Current income tax assets and liabilities are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to
compute the amount are those that are enacted or substantively enacted, at the reporting
date.

Deferred tax

Deferred tax is provided using the liability method on temporary differences between the tax
bases of assets and liabilities and their carrying amounts for financial reporting purposes at
the reporting date.

Deferred tax assets are recognized for all deductible temporary differences, the carry
forward of unused tax credits and any unused tax losses. Deferred tax assets are
recognized for unused tax losses to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences and the carry forward of
unused tax credits and unused tax losses can be utilized.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced
to the extent that it is no longer probable that sufficient taxable profit will be available to allow
all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re¬
assessed at each reporting date and are recognized to the extent that it has become
probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in
the year when the asset is realized or the liability is settled, based on tax rates (and tax laws)
that have been enacted or substantively enacted at the reporting period.

Current and Deferred tax are recognized in Statement of Profit and loss, except when they
relate to items that are recognized in Other Comprehensive Income (OCI) and in that case
the current and deferred tax are recognized in OCI.

f) Property, plant and equipment and Intangible Assets

All items of property, plant and equipment are initially recorded at cost, net of recoverable
taxes and discounts.

The cost includes the cost of replacing part of the property, plant and equipment meeting the
recognition criteria and borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying property, plant and equipment upto the date of
commissioning of the assets.

Subsequent to initial recognition, property, plant and equipment are measured at cost less
accumulated depreciation and any accumulated impairment losses. The carrying values of
property, plant and equipment are reviewed for impairment when events or changes in
circumstances indicate that the carrying value may not be recoverable.

Depreciation

Depreciation on Tangible assets is provided on Straight-line basisover the useful lives
prescribed in Schedule II to Companies Act, 2013.

Depreciable amount is the cost of an asset, or other amount substituted for cost, less its
residual value. A maximum residual value of 5% is considered for all assets.

g) Leases

The Company assesses whether a contract contains a lease, at the inception of the contract.
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 (i) the contract involves the use of identified asset; (ii) the Company has
substantially all of economic benefits from the use of asset through a period of lease and (iii)
the Company has the right to direct the use of the asset.

Short-term leases and leases of low-value assets

The company has elected not to recognise right-of-use assets and lease liabilities for short
term leases that have a lease term of 12 months. The company recognises the lease
payments associated with these leases as an expense on a straight-line basis over the lease
term.

There are no leases/assets falling within definition of right to control the use.

h) Impairment of non-flnancial assets

The Company assesses, at each reporting date, whether there is an indication that an asset
may be impaired.

Impairment losses of continuing operations, including impairment on Inventories, are
recognized in the Statement of profit and loss.

i) Borrowing costs

Borrowing cost includes interest. Borrowing costs directly attributable to the acquisition an
asset that necessarily takes a substantial period of time to get ready for its intended use are
accumulated and capitalized upto the date when such assets are ready for their intended
use or sale, as part of the cost of the asset.

All other borrowing costs are expensed in the period in which they occur.

j) Inventories

Stock of Trading Goods is valued at lower of Cost or Net Realizable Value.

Cost of purchase includes duties, taxes (net of those recoverable) freight and other
expenses net of trade discounts, rebates and price adjustments.

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Mar 31, 2014

1.1 Basis of accounting and preparation of financial statements

The financial statements of the Company have 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, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

1.2 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 recognized in the periods in which the results are known or materialized.

1.3 Inventories

In respect of inventories, Stock of Trading Goods is valued at lower of cost or market value and Packing Material and Stores and spares are valued at cost

1.4 Cash and cash equivalents (for purposes of Cash Flow Statement)

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 are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

1.5 Cash flow statement

Cash flows are reported using the indirect method, whereby profit before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.6 Tangible fixed assets

Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date.

1.7 Depreciation and amortisation

The Company provides depreciation as per written down value method at the rates prescribed in Schedule XIV to The Companies Act, 1956. On additions / deletions to the fixed assets made during the year, depreciation is provided on pro-rata basis. Depreciation @ 100% is provided on assets costing less than Rs. 5,000/-.

1.8 Revenue recognition

Sale of goods

Sales are recognised on transfer of significant risks and rewards of ownership to the buyer, which generally coincides at the time of dispatch of goods to the buyer.

Income from services

Revenues from services are recognised when such services are rendered.

1.9 Other income

Interest income is accounted on accrual basis.The sources of other operating revenue include providing services such as Calibration and repairing of electrical & electronics measuring instruments .Dividend income is accounted for when the right to receive it is established.

1.10 Foreign currency transactions and translations

Foreign currency transactions are accounted at the rates prevailing on the date the transaction takes place. Foreign currency assets and liabilities at the year-end are restated at the prevailing exchange rates and any difference is recognized in the Profit and Loss Account except in cases where they relate to the acquisition of qualifying fixed assets in v/hich case they are adjusted to the carrying cost of such assets.

1.11 Investments

Long-term investments are valued at cost. However, provision for diminution is made to recognize a decline, other than temporary, in the value of such investment, such reduction being determined and made for each investment individually.

1.12 Employee benefits

Short term employee benefits are recognized as an expense at the undiscounted amounts in the Profit and Loss account of the year in which the related service is rendered.

Defined benefit plans

Provision for gratuity and leave salary is made on the basis of actuarial valuation at the end of financial year.__

1.13 Borrowing costs

Borrowing costs attributable to the acquisition of qualifying Assets are capitalized, all other borrowing costs are charged off to the Profit and Loss Account.

1.14 Segment reporting

The Company operates in single business segment of Electrical & Electronics Measuring Instruments.

1.15 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares 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 relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares

1.16 Taxes on income

Tax on income for the current period is determined on the basis of the taxable income computed in accordance with the provisions of Income Tax Act, 1961. Deferred Tax is recognized on timing differences between accounting income and taxable income for the year, and based on the rates of tax as per law enacted or substantively enacted as on the balance sheet date. Deferred tax assets is recognized and carried forward, subject to consideration of prudence, to the extent that there is a reasonable certainty of its realization.

1.17 Impairment of assets

Impairment loss is recognized wherever the carrying amount of an asset is in excess of its recoverable amount and the same is charged to the Profit and Loss Account 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.

1.18 Provisions and contingencies

A Provision is made based on a reliable estimate when it is probable that an outflow of resources embodying economic benefits will be required to settle an obligation. Contingent Liabilities, if material, are disclosed by way of notes to accounts. Contingent Assets are not recognized or disclosed in the financial statements.

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Mar 31, 2013

1.1 Basis of accounting and preparation of financial statements

The financial statements of the Company have 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, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

1.2 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 recognized in the periods in which the results are known or materialized.

1.3 Inventories

In respect of inventories, Stock of Trading Goods is valued at lower of cost or market value and Packing Material is valued at cost.

1.4 Cash and cash equivalents (for purposes of Cash Flow Statement)

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 are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

1.5 Cash flow statement

Cash flows are reported using the indirect method, whereby profit before extraordinary items and tax is adjusted for the effects of transactions of non- cash nature and any deferrals cr accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.6 Tangible fixed assets

Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date.

1.7 Depreciation and amortisation

The Company provides depreciation as per written down value method at the rates prescribed in Schedule XIV to The Companies Act, 1956. On additions / deletions to the fixed assets made during the year, depreciation is provided on pro-rata basis. Depreciation @ 100% is provided on assets costing less than Rs. 5,000/-.

1.8 Revenue recognition

Sale of goods

Sales are recognised on transfer of significant risks and rewards of ownership to the buyer, which generally coincides at the time of dispatch of goods to the buyer.

Income from services

Revenues from services are recognised when such services are rendered.

1.9 Other income

Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established.

1.10 Foreign cuiTency transactions and translations

Foreign currency transactions are accounted at the rates prevailing on the date the transaction takes place. Foreign currency assets and liabilities at the year-end are restated at the prevailing exchange rates and any difference is recognized in the Profit and Loss Account except in cases where they relate to the acquisition of qualifying fixed assets in which case they are adjusted to the carrying cost of such assets.

1.11 Investments

Long-term investments are valued at cost. However, provision for diminution is made to recognize a decline, other than temporary, in the value of such investment, such reduction being determined and made for each investment individually.

1.12 Employee benefits

Short term employee benefits are recognized as an expense at the undiscounted amounts in the Profit and Loss account of the year in which the related service is rendered. Defined benefit plans Provision for gratuity and leave salary is made on the basis of actuarial valuation.

1.13 Borrowing costs

Borrowing costs attributable to the acquisition of qualifying Assets are capitalized, all other borrowing costs are charged off to the Profit and Loss Account.

1.14 Segment reporting

The Company operates in single business segment of Electrical & Electronics Measuring Instruments.

1.15 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares 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 relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares

1.16 Taxes on income

Tax on income for the current period is determined on the basis of the taxable income computed in accordance with the provisions of Income Tax Act, 1961. Deferred Tax is recognized on timing differences between accounting income and taxable income for the year, and based on the rates of tax as per law enacted or substantively enacted as on the balance sheet date. Deferred tax assets is recognized and carried forward, subject to consideration of prudence, to the extent that there is a reasonable certainty of its realization.

1.17 Impairment of assets

Impairment loss is recognized wherever the carrying amount of an asset is in excess of its recoverable amount and the same is charged to the Profit and Loss Account 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.

1.18 Provisions and contingencies

A Provision is made based on a reliable estimate when it is probable that an outflow of resources embodying economic benefits will be required to settle an obligation. Contingent Liabilities, if material, are disclosed by way of notes to accounts. Contingent Assets are not recognized or disclosed in the financial statements.

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Mar 31, 2010

1. Basis of Preparation of Financial Statements

The Financial statements are prepared under the historical cost convention on the accrual basis.

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets, liabilities & disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Differences between actual results and estimates are recognized in the period in which the results are known.

2. FIXED ASSETS AND DEPRECIATION:

Fixed Assets are capitalized at cost.

The Company provides depreciation as per written down value method at the rates prescribed in Schedule XIV to The Companies Act, 1956. On additions / deletions to the fixed assets made during the year, depreciation is provided on pro-rata basis. Depreciation @ 100% is provided on assets costing less than Rs. 5,000/-.

3. INVESTMENTS:

Long-term investments are valued at cost. However, provision for diminution is made to recognize a decline, other than temporary, in the value of such investment, such reduction being determined and made for each investment individually.

4. FOREIGN CURRENCY TRANSACTIONS:

Foreign currency transactions are accounted at the rates prevailing on the date the transaction takes place. Foreign currency assets and liabilities at the year-end are restated at the prevailing exchange rates and any difference is recognized in the Profit and Loss Account except in cases where they relate to the acquisition of qualifying fixed assets in which case they are adjusted to the carrying cost of such assets.

5. INVENTORIES:

In respect of inventories, Stock of Trading Goods is valued at lower of cost or market value and Packing Material is valued at cost.

6. EMPLOYEE BENEFITS:

Short term employee benefits are recognized as an expense at the undiscounted amounts in the Profit and Loss account of the year in which the related service is rendered.

Defined Contribution Plan Provident Fund:

Employers contribution towards provident fund of the employees is charged to Profit & Loss Account.

Defined Benefit Plan

Gratuity and Leave Salary:

Provision for gratuity and leave salary is made on the basis of actuarial valuation.

7. BORROWING COSTS:

Borrowing costs attributable to the acquisition of qualifying Assets are capitalized, all other borrowing costs are charged off to the Profit and Loss Account.

8. USE OF ESTIMATES:

The preparation of financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities on the date of financial statements. Actual results could differ from those estimates. Difference between actual results and estimates are recognized in the period in which the results are known.

9. IMPAIRMENT:

Impairment loss is recognized wherever the carrying amount of an asset is in excess of its recoverable amount and the same is charged to the Profit and Loss Account 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.

10. Provisions, Contingent Liabilities and Contingent Assets:

A Provision is made based on a reliable estimate when it is probable that an outflow of resources embodying economic benefits will be required to settle an obligation. Contingent Liabilities, if material, are disclosed by way of notes to accounts. Contingent Assets are not recognized or disclosed in the financial statements.