Accounting Policies of EP Biocomposites Ltd. Company

Mar 31, 2025

CORPORATE INFORMATION

EP BIOCOMPOSITES LIMITED is a Public Limited Company domiciled in India and incorporated under the provisions of the Companies Act, 2013 on 17th
January, 2020. The Company is engaged in manufacture of fibre reinforced polymere products and providing of bio toilet Solutions.

Note :2

SIGNIFICANT ACCOUNTING POLICIES & NOTES :

1 Basis Of Preparation of Financial Statements

These financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP) to
comply with the Accounting Standards specified under section 133 of the Companies Act, 2013, read with Rule 7 of the companies (Accounts) Rules, 2014
and the relevant provisions of the Companies Act, 2013 (“the Act"). The financial statements have been prepared on accrual basis under the historical
cost convention.

The accounting policies adopted in the preparation of standalone financial statements are consistent with those of the previous year. 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 products and the time between the acquisition of assets for processing and their realization in cash and cash
equivalents, the Company ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities.

2 Use Of Estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that
affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period.
Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and
estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

3 Cash and cash equivalents

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

4 Taxes on Income

Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance
with the Income-tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the company operates. The tax rates and
tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

Deferred Income taxes reflect the impact of timing differences between taxable income and accounting Income originating during the current year and
reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the
reporting date. Deferred income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.
Deferred tax liabilities are recognized for taxable timing differences. Deferred tax assets are recognized for deductible timing differences only to the
extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In
situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual
certainty supported by convincing evidence that they can be realized against future taxable profits.

At each reporting date, the company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax asset to the extent that
it has become reasonably certain or virtually certain as the case may be that sufficient future taxable income will be available against which such deferred
tax assets can be realized.

The carrying amount of deferred tax assets are reviewed at each reporting date. Thecompany writes-downthe carryingamount ofdeferred tax asset
to theextent thatit is nolonger reasonably certain or virtuallycertain as the casemaybe that sufficientfuture taxable income will be available against
which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain as the case
may be that sufficient future taxable income will be available.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and
the deferred tax assets and deferred taxes relate to the same taxable entity and the same taxation authority.

5 Property, Plant and Equipment, Tangible Assets

Property, plant and equipment (PPE), being fixed assets are tangible items held for use or for administrative purposes and are measured at cost less
acumulated depreciation and any accumulated impairment. Cost comprises of the purchase price including import duties and non-refundable purchase
taxes after deducting trade discounts and rebates and any costs attributable to bringing the asset to the location and condition necessery for it to be
capable of operating in the manner intended by the Management. Financing costs relating to acquisition of assets which take substantial period of time
to get ready for intended use are also included to the extent they relate to the period up to the time such assets are ready for their intended use.

Gains or losses arising from derecognition of property, plant & equipment are measured as the difference between the net disposal proceeds and the
carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

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

Depreciation

Depreciation on Property, Plant and equipment is provided under written down value method as per the useful lives and manner prescribed under
schedule II to the Companies Act, 2013. Depreciation is calculated after reclassification of assets.

Intangible Assets

Intangible Assets are recognised only if it is probable that future economic benefits that are attributable to the asset will flow to the enterprise and the
cost of the asset can be measured reliably.

Depreciation

Intangible Assets are amortised equally over a period of 5 years.

6 Current Assets, Loans & Advances

In the opinion of the Board and to the best of its knowledge and belief the value on realisation of current assets in the ordinary course of business would
not be less than the amount at which they are stated in the Balance Sheet and payable on demand.

7 Inventories

Finished and Semi-Finished products produced and Raw materials purchased by the Company are carried at lower of cost and net realisable value after
providing for obsolescence, if any.

Work-in-progress is carried at lower of cost and net realisable value.

8 Recognition of Income & Expenditure

Income and expenditure is recognized and accounted for on accrual basis. Revenue is recognised to the extent that it is probable that the economic
benefits will flow to the Company and the revenue can be reliably measured. Revenue from sale of goods is recognised on transfer of significant risks and
rewards of ownership to the customer and when no significant uncertainty exists regarding realisation of the consideration. Sales are recorded net of
sales returns, sales tax/VAT/GST, cash and trade discounts. Revenue from services is recognised in the accounting period in which the services are
rendered.

Interest income is accrued on a time basis, by reference to the principal outstanding and using effective interest rate method.

Subsidy from Government is accounted based on the claims made with the Government Authorities.

9 Employee benefit

Employee benefits include provident fund, employee''s state insurance scheme, gratuity fund and compensated absences.

Defined contribution plans

Contributions in respect of Employees Provident Fund and Pension Fund which are defined contribution schemes, are made to a fund administered and
managed by the Government of India and are charged as an expense based on the amount of contribution required to be made and when service are
rendered by the employees. Company''s contribution to Provident Fund and other Funds for the year is accounted on accrual basis and charged to the
Statement of Profit & Loss for the year.

Defined benefit plans

The eligible employees of the company are entitled to receive post-employment benefits in respect of gratuity in accordance with Payment of Gratuity
Act, 1972. The company has made provision for the same in the standalone financial statements for the year ended on 31st March 2025 on the basis of
actuarial valuation made by an independent actuary as at the balance sheet date based on projected unit credit method.

As per the actuarial valuation report taken, the company has provided for Gratuity of Rs. 27.49 lakhs (P.Y. 24.05 lakhs) till the year ended on reporting
date.

10 Earning Per Shares

The Company reports Basic and Diluted earnings per equity share in accordance with the Accounting Standard - 20 on Earning Per Share. In determining
earning per share, the Company considers the net profit after tax and includes the post tax effect of any extraordinary/exceptional items. The number of
shares used in computing basic earning per share is the weighted avergae number of equity shares outstanding during the period. The numbers of shares
used in computing diluted earning per share comprises the weighted average number of equity shares that would have been issued on the conversion of
all potential equity shares. Dilutive potential equity shares have been deemed converted as of the beginning of the period, unless issued at a later date.

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Mar 31, 2024

SIGNIFICANT ACCOUNTING POLICIES & NOTES :

1 Basis Of Preparation of Financial Statements

These financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP) to comply
with the Accounting Standards specified under section 133 of the Companies Act, 2013, read with Rule 7 of the companies (Accounts) Rules, 2014 and the
relevant provisions of the Companies Act, 2013 (“the Act"). The financial statements have been prepared on accrual basis under the historical cost
convention.

The accounting policies adopted in the preparation of standalone financial statements are consistent with those of the previous year. 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 products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the
Company ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities.

2 Use Of Estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect
the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although
these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could
result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

3 Cash and cash equivalents

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

4 Taxes on Income

Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with
the Income-tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the company operates. The tax rates and tax laws
used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

Deferred Income taxes reflect the impact of timing differences between taxable income and accounting Income originating during the current year and
reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the
reporting date. Deferred income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.

Deferred tax liabilities are recognized for taxable timing differences. Deferred tax assets are recognized for deductible timing differences only to the extent
that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations
where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty
supported by convincing evidence that they can be realized against future taxable profits.

At each reporting date, the company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax asset to the extent that it
has become reasonably certain or virtually certain as the case may be that sufficient future taxable income will be available against which such deferred tax
assets can be realized.

The carrying amount of deferred tax assets are reviewed at each reporting date. The company writes-down the carrying amount of deferred tax asset to
the extent that it is no longer reasonably certain or virtually certain as the case may be that sufficient future taxable income will be available against
which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain as the case may
be that sufficient future taxable income will be available.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and
the deferred tax assets and deferred taxes relate to the same taxable entity and the same taxation authority.

5 Property, Plant and Equipment, Tangible Assets

Property, plant and equipment (PPE), being fixed assets are tangible items held for use or for administrative purposes and are measured at cost less
acumulated depreciation and any accumulated impairment. Cost comprises of the purchase price including import duties and non-refundable purchase taxes
after deducting trade discounts and rebates and any costs attributable to bringing the asset to the location and condition necessery for it to be capable of
operating in the manner intended by the Management. Financing costs relating to acquisition of assets which take substantial period of time to get ready for
intended use are also included to the extent they relate to the period up to the time such assets are ready for their intended use.

Gains or losses arising from derecognition of property, plant & equipment are measured as the difference between the net disposal proceeds and the carrying
amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

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

Depreciation

Depreciation on Property, Plant and equipment is provided under written down value method as per the useful lives and manner prescribed under schedule II
to the Companies Act, 2013. Depreciation is calculated after reclassification of assets.

Intangible Assets

Intangible Assets are recognised only if it is probable that future economic benefits that are attributable to the asset will flow to the enterprise and the cost
of the asset can be measured reliably.

Depreciation

Intangible Assets are amortised equally over aperiod of 5 years.

6 Current Assets, Loans & Advances

In the opinion of the Board and to the best of its knowledge and belief the value on realisation of current assets in the ordinary course of business would not
be less than the amount at which they are stated in the Balance Sheet and payable on demand.

7 Inventories

Finished and Semi-Finished products produced and Raw materials purchased by the Company are carried at lower of cost and net realisable value after
providing for obsolescence, if any.

Work-in-progress is carried at lower of cost and net realisable value.

8 Recognition of Income & Expenditure

Income and expenditure is recognized and accounted for on accrual basis. Revenue is recognised to the extent that it is probable that the economic benefits
will flow to the Company and the revenue can be reliably measured. Revenue from sale of goods is recognised on transfer of significant risks and rewards of
ownership to the customer and when no significant uncertainty exists regarding realisation of the consideration. Sales are recorded net of sales returns, sales
tax/VAT/GST, cash and trade discounts. Revenue from services is recognised in the accounting period in which the services are rendered.

Interest income is accrued on a time basis, by reference to the principal outstanding and using effective interest rate method.

Subsidy fro Government is accounted based on the claims made with the Government Authorities.

9 Employee benefit

Employee benefits include provident fund, employee''s state insurance scheme, gratuity fund and compensated absences.

Defined contribution plans

Contributions in respect of Employees Provident Fund and Pension Fund which are defined contribution schemes, are made to a fund administered and
managed by the Government of India and are charged as an expense based on the amount of contribution required to be made and when service are
rendered by the employees. Company''s contribution to Provident Fund and other Funds for the year is accounted on accrual basis and charged to the
Statement of Profit & Loss for the year.

Defined benefit plans

The eligible employees of the company are entitled to receive post-employment benefits in respect of gratuity in accordance with Payment of Gratuity Act,
1972. The company has made provision for the same in the standalone financial statements for the year ended on 31st March 2024 on the basis of actuarial
valuation made by an independent actuary as at the balance sheet date based on projected unit credit method.

As per the actuarial valuation report taken, the company has provided for Gratuity of Rs. 1.68 lakhs till the year ended on reporting date.

10 Earning Per Shares

The Company reports Basic and Diluted earnings per equity share in accordance with the Accounting Standard - 20 on Earning Per Share. In determining
earning per share, the Company considers the net profit after tax and includes the post tax effect of any extraordinary/exceptional items. The number of
shares used in computing basic earning per share is the weighted avergae number of equity shares outstanding during the period. The numbers of shares used
in computing diluted earning per share comprises the weighted average number of equity shares that would have been issued on the conversion of all
potential equity shares. Dilutive potential equity shares have been deemed converted as of the beginning of the period, unless issued at a later date.