Accounting Policies of Newjaisa Technologies Ltd. Company

Mar 31, 2024

1. Corporate Background

Newjaisa Technologies limited (formely known as newjiasa technologies private limited) has its registered office at Sy No. 38/1B, 39/1,39/2 and 39/3, Arekere Village, BegurHobli, Bangalore South Taluk, Bannerghatta Road, Bangalore 560076, Karnataka, IndiaThe Company was incorporated on 16th June 2020 under the Companies Act, 2013 and the Company has completed its Initial Public Offer ("IPO") and its equity shares were listed on the Small And Medium Enterprises Exchange ("NSE SME") on October 5, 2023. The company is into the business of Manufacturing and trading of refurbishedcomputers and its parts.

2. Significant Accounting Policies:

a) Basis for preparation of accounts

The financial statements have been prepared under the historical cost convention, on the accrual basis of accounting and in accordance with the accounting principles generally accepted in India ("GAAP") including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, to the extent applicable and are presented in the general format specified by Schedule III of the Companies Act, 20l3 (''the Act'').

All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of business and the time between the sale of goods and its realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current - non-current classification of assets and liabilities.

The Company is a Small and Medium Sized Company (SMC) as defined in the General Instructions in respect of Accounting Standards notified under the Companies Act, 2013. Accordingly, the Company has complied with the Accounting Standards as applicable to SMC.

Further, these financial statements require the 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 statements and the reported amounts of revenues and expenses during the reporting period. These estimates are

based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

Amendments to Schedule III of the Companies Act, 2013

Ministry of Corporate Affairs (MCA) issued notifications dated 24th March, 2021 to amend Schedule III of the Companies Act, 2013 to enhance the disclosures required to be made by the Company in its financial statements. These amendments are applicable to the Company for the financial year starting 1st April, 2021 and applied to the standalone financial statements as required by Schedule III.

b) Use of Estimates

The preparation of the financial statements in conformity with GAAP requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses for the year. Actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively in the future periods.

c) Revenue Recognition

Revenue from Operation: Revenue from sale of goods have been recognized as and when the risk and rewards associate with the goods and the ownership of the goods have been transferred and no significant uncertainty exists in ultimate collection at the time of recognition.

With respect to the warranty,the Company provides only assurance types warranty in conjunction with sale of product and hence same is not considered as separate performance obligation.

Revenue from rendering services is recognized when the services are performed and no significant uncertainty exists in ultimate collection at the time of recognition.

A liability is recognised where payments are received from customers before transferring control of the goods being sold.

Interest Income: Income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

d) Inventories

Inventories which comprise rawmaterials, work-inprogress, finished goods, stock-in-trade, packing material are carried at the lower of cost and net realizable value. Cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

e) Property, Plant and Equipment

(i) Recognition and measurement

All items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. The cost of an item of property, plant and equipment shall be recognized as an asset if, and only if it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

The cost of an item of property, plant and equipment comprises:

a) its purchase price, including import duties and non-refundable taxes (net of GST), Conversion cost , after deducting trade discounts and rebates.

b) any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

(ii) Subsequent expenditures

Subsequent expendituresrelated to an item of tangible assets are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance. All other repair and maintenance costs are recognized in statement of profit and loss as incurred.

(iii) Derecognition

An item of property, plant and equipment and any significant part initially recognized is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss when the asset is derecognised.

f) Depreciation

Depreciation on Property, Plant and Equipment is provided on Straight Line Method based on the useful life estimated by the management, at specified rates mentioned in Schedule II of the Companies Act 2013.

The residual value, useful lives and methods of depreciation on property, plant and equipment are reviewed at financial year end and adjusted prospectively, if appropriate.

g) Impairment of Assets

Management periodically assesses, using external and internal sources, whether there is an indication that an asset may be impaired. An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value or the present value of future cash flows expected to arise from the continuing use of such assets. An impairment loss is charged to the statement of profit and loss 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.

h) Operating Leases

Lease rent in respect of renewable operating leases which are cancellable, are charged to statement of profit and loss.

i) Foreign Currency Transactions

(i) Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and

the foreign currency at the date of the transaction.

(ii) Conversion

Foreign currency monetary items are reported using the closing rate. Non monetary items, which are carried in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction.

(iii) Exchange differences

Exchange differences arising on the settlement of monetary items, are recognized as income or expense in the period in which they arise.

j) Earnings per share

Basic Earnings per share is 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. The weighted average number of equity share outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares, that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earning per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

k) Provision, contingent Liabilities and Contingent assets

A provision is recognized when an enterprise has a present obligation as a result of past event and 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. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation

that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.

Warranty Provisioning:The Company estimates the provision for warranty based on past trend of actual issues of batteries under warranty. As at 31 March 2024, the estimated liability towards warranty amounted to approximately Rs21.17 lakhs.

The provision towards warranty is not discounted as the management, based on past trend, expects to use the provision within twelve months after the Balance Sheet date.

Gratuity Provisioning: The Company estimates the provision for Gratutity estimated to rs.6.32 lakhs (refer note no. 40)

l) Segment Reporting

The Company does not have any reportable segment as the company is only into the business of manufacturing and trading of refurbished laptops. The company has established its business operation and market base only in India.

m) Employee Benefits

i) Short-term employee benefits

Employee benefits payable wholly within twelve months of rendering the service are classified as short term. Benefits such as salaries, bonus etc. are recognized in the period in which the employee renders the related service.

ii) Post-Employment BenefitsThe Company has a defined benefit plan for employees, namely Gratuity, 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.

The liability recognized in the balance sheet in respect of gratuity is present value of the defined benefit/obligation at the balance sheet date less the fair value of plan assets,

together with adjustments for unrecognized actuarial gains or losses and past service cost. The defined benefit/obligation is calculated at or near the balance sheet date by an independent actuary using the projected unit credit method.Actuarial gains and losses arising from past experiences and changes in actuarial assumptions are credited or charged to the statement of profit and lossin the year in which such gains or losses are determined.

n) Income Tax

• Income tax is computed in accordance with Accounting Standard - 22 - ''Accounting for taxes on Income (AS-22). Tax expenses are accounted in the same year to which the revenue and expenses relate.

• Provision for current income tax is made on the tax liability payable on taxable income

after considering tax allowance, deducted and exemption determined in accordance with the prevailing tax laws. The difference between taxable income and the net profit or loss before tax for the year as per the financial statements are identified and the tax effect of the deferred tax asset or deferred tax liability is recorded for timing differences i.e. differences that originate in one accounting period and reverse in another. The tax effect is calculated on accumulated timing differences at the end of the accounting year based on effective tax rates that would apply in the years in which the timing differences are expected to reverse.

• Deferred tax assets are recognized only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date