Accounting Policies of Systematic Industries Ltd. Company

Mar 31, 2024

2 SIGNIFICANT ACCOUNTING POLICIES :

2.1 BASIS OF ACCOUNTING

The Financial Statements are prepared under the historical cost convention
A. Basis Of Preparation

The financial statements are prepared in accordance with the Indian Generally Accepted Accounting Principles
("GAAP") under the historical cost convention on the accrual basis. GAAP comprises mandatory Accounting
Standards as specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies
(Accounts) Rules, 2014 and the Companies Act, 2013 (to the extent notified).

B Presentation and disclosure of financial statement

All assets and liabilities have been classified as current & non-current as per company s normal operating cycle
and other criteria set out in the Schedule III. for the purpose of current / non-current classification of assets and
liabilities 12 months has been considered by the company as its operating cycle.

C Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates
and assumptions that affect the application of accounting policies, reported balances of assets and liabilities,
disclosure of contingent liabilities as on the date of financial statements and reported amounts of income and
expenses during the period. Management believes that the estimates and assumptions used in the preparation
of financial statements are prudent and reasonable. Actual results could differ from those estimates. Any
difference between the actual results and estimates are recognized in the period in which the results are
known / materialize. Any revision to accounting estimates is recognized prospectively in the current and future
periods

D Property, plant and equipment (Tangible assets)

• Property, plant and equipment are stated at cost of acquisition / construction less accumulated depreciation
and where applicable accumulated impairment losses. Gross carrying amount of all property, plant and
equipment are measured using cost model.

• Cost of an item of property, plant and equipment includes purchase price including non - refundable taxes
and duties, borrowing cost directly attributable to the qualifying asset, any costs directly attributable to
bringing the asset to the location and condition necessary for its intended use and the present value of the
expected cost, if any for the dismantling/decommissioning of the asset.

• Parts (major components) of an item of property, plant and equipment''s having different useful lives are
accounted as separate items of property, plant and equipment''s. Capital work-in-progress comprises of cost
incurred on property, plant and equipment under construction / acquisition that are not yet ready for their
intended use as at the Balance Sheet date.

• Property, plant and equipment are eliminated from financial statement either on disposal or when retired
from active use. Assets held for disposal are stated at net realizable value. Losses arising in case of retirement
of property, plant and equipment and gains or losses arising from disposal of property, plant and equipment are
recognized in the statement of profit and loss in the year of occurrence.

• In case of assets purchased, sold or discarded during the year, depreciation on such assets is calculated on pro
rata basis from the date of such addition or as the case may be, upto the date on which such asset has been
sold or discarded.

• Depreciation methods, useful lives and residual values are reviewed at each financial year end and adjusted
prospectively.

• Depreciation on individual assets whose cost does not exceed rupees five thousand has been provided at the
rate of hundred per cent in the year of capitalization.

E Impairment of assets

The carrying amounts of assets are reviewed at each balance sheet date for any indication of impairment based
on internal / external factors. An impairment loss is recognized wherever the carrying amount of an asset
exceeds its recoverable amount. The recoverable amount is the greater of the asset''s net selling price and value
in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing
use of an asset and from its disposal at the end of its useful life.

Based on the assessment done at each balance sheet date, recognised impairment loss is further provided of
reversed depending on changes in circumstances. After recognition of impairment loss or reversal of|
impairment loss as applicable, the depreciation charge for the fixed asset is adjusted in future periods to
allocate the asset''s revised carrying amount, less its residual value (if any), on a systematic basis over its
remaining useful life. If the conditions leading to recognition of impairment losses no longer exist or have
decreased, impairment losses recognized are reversed to the extent it does not exceed the carrying amount
that would have been determined after considering depreciation or amortization had no impairment loss been
recognized in earlier years.

F Inventories

Goods are valued at lower of cost and net realizable value. Cost includes direct materials valued on specific
identification basis, and other costs incurred in bringing them to their present location and condition.

G Investments

Investments are classified into current and long-term investments.

Investments that are readily realizable and intended to be held for not more than a year from the date on
which such investments are made are classified as current investments. All other investments are classified as
long-term 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 of long term investments
is made to recognise a decline, other than temporary, on an individual investment basis.

H 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.

• Sales of goods are recognized when significant risks and rewards of ownership of the goods have passed to
the buyer that generally coincides with delivery and are recorded net of Goods & Services tax, rebates and
trade discounts and sales returns.

• Interest income is recognized on time proportion basis taking into account the amount outstanding and rate
applicable and to the extent of certainty.

I Operating lease

Lease arrangements where risks and rewards incidental to ownership of an asset substantially vest with the
lessor are classified as operating lease.