Accounting Policies of Ideal Technoplast Industries Ltd. Company

Mar 31, 2025

1) Company information:

Ideal technoplast industries Limited (‘the Company’) is a public limited Company incorporated in India having its registered office at 1-4-78,81, Madhav Industrial Estate, Sayan Road, Olpad, Surat - 394540, Gujarat, India. The Company is one of the leading Manufactures of wide range of plastic Products. The Company’s CIN is L22203GJ2023PLC146444. The Company has its listings on National Stock Exchange of India Limited (NSE).

2) Material accounting policies:

This note provides a list of the significant accounting policies adopted in the preparation of the financial statements. These policies have been consistently applied to all the years presented, unless otherwise stated.

a) Statement of compliance:

The financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (“the Act”) read along with the Companies (Indian Accounting Standards) Rules, 2015 as amended and guidelines issued by the Securities and Exchange Board of India (SEBI), as applicable. The presentation of financial statements is based on Schedule III Ind AS of the Companies Act, 2013.

b) Basis of preparation:

The financial statements have been prepared under the historical cost convention with the exception of certain assets and liabilities that are required to be carried at fair values as per Ind AS. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The company is also presenting restated balance sheet as on 01^st April, 2025, on account of Ractification of error

c) Revenue recognition:

i) Revenue from contract with customers

“Revenue is recognized when the performance obligations have been satisfied, which is once control of the goods is transferred from the Company to the customer. Revenue related to the sale of goods is recognized when the product is delivered to the destination specified by the customer, and the customer has gained control through their ability to direct the use of and obtain substantially all the benefits from the asset.

Notes - "24": Significant Accounting Policies & Other Notes On Financial Statements Revenue is measured based on consideration specified in the contract with a customer which is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts & volume rebates and excludes amounts collected on behalf of third parties."

ii) Other income

Dividend income is recognized when the right to receive the income is established.

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

GST incentives are recognized in the statement of profit and loss, when the right to receive such entitlement is established as per the terms of the relevant scheme and where there is no significant uncertainty regarding compliance with the terms and conditions of such scheme.

d) Borrowing costs:

"Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets is substantially ready for the intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing cost eligible for capitalization. Other borrowings costs are expensed in the period in which they are incurred."

e) Employee benefits:

(i) Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employees'' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.

(ii) Other long-term employee benefit obligations

The liabilities for earned leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured at the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the market.

yields at the end of the reporting period that have terms approximating to the terms of the related obligations.

Notes - "24": Significant Accounting Policies & Other Notes On Financial Statements Remeasurements as a result of the experience adjustments and changes in actuarial assumptions are recognized in profit or loss.

The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.

(iii) Gratuity obligations

The Company pays gratuity to the employees whoever has completed five years of service with the Company at the time of resignation / retirement. The gratuity is paid @15 days salary for every completed year of service as per the payment of gratuity Act, 1972.

The Liability in respect of grauity and other post-employment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employees’ services.

(iv) Defined contribution plans

The Company pays provident fund contributions to publicly administered funds as per local regulations. The Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognized as employee benefit expense when they are due.

(v) Bonus plans

The Company recognizes a liability and an expense for bonuses. The Company recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation.

The amount recognized as an expense towards contribution are as under; (RS in Lakhs)
Particulars	Year ended 31.03.2025	Year ended 31.03.2024
PF Contribution Expenses	2.64	0.32
ESIC Contribution Expenses	0.59	0.13
Defined benefit plan
(l) Amount Recognised in Balance Sheet
Present value of unfunded obligations	1.03	-
Present value of funded obligations	-	-
Fair value of plan assets	-	-
Net Liability (aseet)	1.03	-
(ll) Amounts to be recognised in Profit and Loss

Current Service Cost	1.03	-
(lII) Reconcilliation of Defined Benefit Obligation
Opening Defined Benefit Obligation	-	-
Current service cost	1.03	-
Actuarial loss/(gain) due to
Experience adjustments on plan Liabilities	-	-
Change in financial assumptions	-	-
Change in demographic assumptions	-	-
Closing Defined Benefit Obligation	1.03	-

f) Income Tax:

Tax expense for the year comprises current and deferred tax.

Current Tax is the amount of tax payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income-tax Act, 1961 and other applicable tax laws that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary differences arise from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Tax relating to items recognized directly in equity or other comprehensive income is recognised in equity or other comprehensive income and not in the statement of profit and loss.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they are related to income taxes levied by the same tax authority, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

g) Property, Plant and Equipment (PPE)

PPE is carried at cost less accumulated depreciation and impairment losses, if any. The cost of PPE comprises of purchase price, applicable duties and taxes net of input tax credit, any directly attributable expenditure on making the asset ready for its intended use, other incidental expenses and interest on borrowings attributable to acquisition of qualifying fixed assets, up to the date the asset is ready for its intended use.

All other repair and maintenance costs, including regular servicing, are recognised in the statement of profit and loss as incurred. When a replacement occurs, the carrying value of the replaced part is de-recognised. Where an item of PPE comprises, major components having different useful lives, these components are accounted for as separate items.

Leasehold improvements are stated at cost including taxes, freight and other incidental expenses incurred, net of input tax credits availed. The depreciation is provided over the life estimated by the management.

Self-constructed assets (Moulds): The Company transfers all the directly attributable expenditure incurred towards construction of moulds including depreciation on actual cost basis.

PPE retired from active use and held for sale are stated at the lower of their net book value and net realizable value and are disclosed separately.

An item of PPE is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of PPE is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the statement of profit and loss.

h) Expenditure during construction period and intangible assets under development:

Expenditure during construction period (including finance cost related to borrowed funds for construction or acquisition of qualifying PPE) is included under Capital Work-inProgress and the same is allocated to the respective PPE on the completion of their construction.

Intangible Assets under development includes the expenditure incurred for acquisition of intangible assets.

i) Depreciation:

Depreciation is the systematic allocation of the depreciable amount of PPE over its useful life and is provided on the straight-line method over the useful lives as prescribed in Schedule II to the Act.

j) Intangible assets and amortization:

Intangible assets acquired separately are measured on initial recognition cost and are amortized on straight line method based on the estimated useful lives.

The period of amortization and amortization method are reviewed at each financial year end.

k) Investment property:

Investment property are the properties held to earn rentals and/or for capital appreciation (including property under construction for such purposes). Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost model which is in accordance with Ind AS 40.

An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no further economic benefits expected from disposal. Any gain or loss arising on derecognition of the property is included in profit or loss in the period in which the property is derecognised.

Depreciation on building is provided over it’s useful life of 30 years using the Straight-Line Method.

l) Impairment of assets:

Intangible assets and Property, Plant and Equipment (PPE): Intangible assets and PPE are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e., the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.

If such assets are considered to be impaired, the impairment to be recognized in the statement of profit and loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.

m) Inventories:

Inventories includes Raw materials, Work-in- progress, finished goods, Stores & Spares, Packing materials and other consumables. These are valued at lower of cost and net realizable value (NRV). However, raw materials are considered to be realizable at cost, if the finished products, in which they will be used, are expected to be sold at or above cost. Further, cost is determined on weighted average basis.

Material in transit

Valuation of Inventories of materials-in-transit is done at cost.

Work-in-Progress (WIP) and Finished goods.

Cost of Finished Goods and WIP includes cost of raw materials, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost of inventories is computed on weighted average basis. Finished goods includes sales in transit which is valued at lower of cost and NRV.

n) Provisions, Contingent liabilities and Contingent assets:

The Company recognises provisions when there is present obligation as a result of past event, and it is probable that there will be an outflow of resources and reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows to net present value using an appropriate pre-tax discount rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Unwinding of the discount is recognised in the statement of profit and loss as a finance cost. Provisions are reviewed at each reporting date and are adjusted to the reflect the current best estimate.

A present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is disclosed as a contingent liability. Contingent liabilities are also disclosed

when there is a possible obligation arising from past events, the existence of which will be. confirmed only by the occurrence or non- occurrence of one or more uncertain future events not wholly within the control of the Company.

Contingent assets are not recognized in financial statements since this may result in the recognition of income that may never be realised.

o) Financial instruments:

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

Financial assets

(i) Financial assets carried at amortised cost

A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(ii) Financial assets at fair value through other comprehensive income

A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified

dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Further, in case where the Company has made an irrevocable selection based on its business model, for its investments which are classified as equity instruments, the subsequent changes in fair value are recognized in other comprehensive income.

(iii) Financial assets at fair value through profit or loss

A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss.

(iv) The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised is recognized as an impairment gain or loss in statement of profit or loss.

Financial liabilities and equity instruments

(i) Classification as debt or equity

Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

(ii) Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

(iii) Financial liabilities

Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest rate method where the time value of money is significant.

Interest bearing bank loans, overdrafts and unsecured loans are initially measured at fair value and are subsequently measured at amortised cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in the statement of profit and loss.

(iv) Derecognition of financial instruments

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset, and the

transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Company’s balance sheet when the obligation specified in the contract is discharged or cancelled or expires.

(v) fair value of financial instruments

In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash flow analysis, available quoted market prices and dealer quotes. All methods of assessing fair value result in general approximation of value, and such value may or may not be realized.

(vi) Offsetting financial instruments

Financial assets and liabilities are offset, and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.

P) Earnings per share:

The basic earnings per share is computed by dividing the profit/(loss) for the year attributable to the equity shareholders by the weighted average number of equities shares outstanding during the year. For the purpose of calculating diluted earnings per share, profit/(loss) for the year attributable to the equity shareholders and the weighted average number of the equity shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

Basic & Diluted Earnings per share
Particulars	F.Y. 2024-25	F.Y. 2023-24
i) Net Profit after tax as per Statement of Profit and Loss attributable to Equity Shareholders (Rs in Lakhs)	288.06	235.08
ii) Weighted Average number of equity shares used as denominator for calculating Basic EPS & Diluted EPS (In Nos.)	44,55,479	15,96,202
iii) Basic EPS (in Rs)	6.47	14.73
iv) Diluted EPS (in Rs)	6.47	14.73

q) Cash and cash equivalents:

Cash and cash equivalents include cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

r) Transactions in foreign currencies:

The financial statements of the Company are presented in Indian rupees, which is the functional currency of the Company and the presentation currency for the financial statements. Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of transaction.

Foreign Currency monetary assets and liabilities such as cash, receivables, payables, etc., are translated at year end exchange rates.

Exchange differences arising on settlement of transactions and translation of monetary items are recognised as income or expense in the year in which they arise.

s) Segment reporting:

The company operates in a single segment, hence not applicable.

t) Government grants:

Grants from the government are recognised at fair value where there is a reasonable assurance that the grant will be received, and the Company will comply with all attached conditions.

Government grants relating to income are deferred and recognised in the profit or loss over the period necessary to match them with the costs they are intended to compensate and presented within other income.

Government grants relating to the purchase of Property, Plant and Equipment are included in non-current liabilities as deferred income and are credited to profit and loss on a straight-line basis over the expected lives of the related assets and presented within other income.

The benefit of a government loan at below current market rate of interest is treated as a government grant.

u) Leases:

As a lessee:

The Company assesses whether a contract contains a lease, at inception of a 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:

(1) The Contract involves the use of an identified asset.

(2) The Company has substantially all the economic benefits from use of the asset through the period of the lease and

(3) The Company has the right to direct the use of the asset.”

The Company recognizes a right-of-use asset (“ROU”) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease. Certain lease arrangements include the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.

The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives.

They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the commencement date on a straightline basis over the balance lease term of the underlying asset. Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of the leases. Lease liabilities are re-measured with a corresponding adjustment to the related right of use asset if the Company changes its assessment if whether it will exercise an extension or a termination option.

Lease liability and ROU asset shall be separately presented in the Balance Sheet and lease payments shall be classified as financing cash flows.

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Mar 31, 2024

2) Significant Accounting Policies

a) Basis of Preparation of Financial Statements:

The accompanying financial statements are prepared on the basis of
historical cost convention following the going concern concept and on
accrual basis in accordance with Generally Accepted Accounting
Principles (GAAP) followed in India, and in compliance with the
Accounting Standards (AS) issued by Ministry of Corporate Affairs (MCA)
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. Further, the guidance notes/
announcements issued by the Institute of Chartered Accountants of
India are also considered, wherever applicable. The Company follows
mercantile system of accounting and recognizes income and
expenditure on accrual basis.

The Company is not liable to follow IND AS nor has the Company
voluntarily opted to follow IND AS hence provision of IND AS is not
followed.

b) Presentation and Disclosure of Financial Statements:

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 of the Companies Act, 2013. Based on the nature of
products / services and time between acquisition of assets for
processing / rendering of services and their realization in cash and cash
equivalents, operating cycle is less than 12 months. However, for the
purpose of current/ non-current classification of assets & liabilities
period of 1 2 months has been considered as normal operating cycle.

c) Use of Estimates:

The preparation of Financial Statements requires the Management of
the Company to make estimates and assumptions that affect the
reported balances of assets and liabilities and disclosures relating to the
contingent liabilities as at the date of the Financial Statements and
reported amounts of income and expense during the year. Examples of
such estimates include provisions for doubtful receivables, employee
benefits, provision for income taxes, accounting for contract costs
expected to be incurred, the useful lives of depreciable fixed assets and
provision for impairment. Future results could differ due to changes in
these estimates and the difference between the actual result and the
estimates are recognized in the period in which the results are known /
materialize. Although these estimates are based upon Director''s best
knowledge of current events and actions, actual results could differ from
these estimates. Any revision to accounting estimates is recognized
prospectively.

The following are the critical judgments and estimations that have been
made by the management in the process of applying the Company''s
accounting policies and that have the most significant effect on the
amount recognized in the financial statements and/or key sources of
estimation uncertainty that may have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities
within the next financial year.

> Going Concern

The management at each close makes an assessment of the Company''s
ability to continue as a going concern. In making such evaluation, it
considers, inter alia, the quantum and timing of its cash flows, in
particular collection of all its recoverable amount and settlement of its
obligations to pay creditors and lenders on due dates. The accounting
policy choices in preparation and presentation of the financial
statements are based on the Company''s assessment that the Company
will continue as a going concern in the foreseeable future.

> Useful lives of property, plant and equipment''s and intangible assets
Management reviews the useful lives of property, plant and equipment
at least once a year. Such lives are dependent upon an assessment of
both the technical lives of the assets and also their likely economic lives
based on various internal and external factors including relative
efficiency and operating costs. Accordingly, depreciable lives are
reviewed annually using the best information available to the
Management.

> Impairment of non-financial assets

The management performs annual impairment tests on cash generating
units and capital work-in-progress for which there are indicators that the
carrying amount might be higher than the recoverable amount.
Impairment exists when the carrying value of an asset or cash
generating unit exceeds its recoverable amount, which is the higher of
its fair value less costs of disposal and its value in use. The fair value less
costs of disposal calculation is based on available data from binding
sales transactions, conducted at arm''s length, for similar assets or
observable market prices less incremental costs for disposing of the
asset. The value in use calculation is based on a DCF model.

> Income Taxes

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
losses can be utilized. Significant management judgment is required to
determine the amount of deferred tax assets that can be recognized,
based upon the likely

timing and the level of future taxable profits together with future tax
planning strategies.

> Recoverability of financial assets

Assessment of recoverability of trade receivables requires significant
judgment. Factors considered include the credit rating, assessment of
intention and ability of the counter party to discharge the liability, the
amount and timing of anticipated future payments and any possible
actions that can be taken to mitigate the risk of non-payment.

d) Property, Plant and Equipment''s

Items of assets meets the definition of property, plant and equipment
and are generally recognized in books at cost of acquisition or
construction and all cost directly attributable to bringing the asset to
the present condition for its intended use less accumulated depreciation
and impairment if any. The cost of acquisition or construction includes
of all direct expenses like freight, duties, taxes and incidental expenses.

Input GST on Purchase of fixed assets is taken as Input Credit in the
month when purchase is made and such Input Credit is adjusted against
Output Tax Liability of that month or subsequent month.

All the assets are physically verified by the management on regular
intervals.

The Company reviews the residual value, useful life and depreciation
method annually and, if expectation differs from previous estimates, the
change is accounted for the change in accounting estimate on
prospective basis.

e) Intangible Assets

Intangible Assets are recognized when it is probable that future
economic benefit that is attributed to the asset will follow to the
Company and the cost of the assets can be measured reliably.

Intangible Asset are valued at cost less accumulated amortization and
impairment loss if any.

f) Depreciation and amortization

Depreciation has been provided on Straight-Line method (SLM) in
the manner specified under Schedule III of the Companies Act, 2013
and the same became operational from 01/ 04/ 2014 vide

notification no. S.O.902 (E) dated 26/03/2014.

Schedule II to the Companies Act, 2013 requires the asset to be
depreciated over its useful life. The depreciable amount of an asset
is the cost of an asset or other amount satisfied for cost less residual
value. The useful life of an asset is the period over which an asset is
expected to be available for use by the company. The useful life is
reviewed once in a year.

g) Inventories:

• The Inventories are valued by the Company at cost or net realizable
value whichever is lower. Cost is determined on First-in first out'',
‘Specific Identification'', or "Weighted Average'' basis, as the case may
be. Cost of Inventories Comprises of all cost of purchase, cost of
conversion and other costs incurred in bringing the inventories to their
present location and condition.

• Raw Materials include materials issued for production. Materials
consumed are materials used for production of finished goods only.

• In case of work in progress and finished goods cost of conversion
includes the cost of raw materials, cost directly related to the unit of
production, packing materials, and systematic allocation of fixed and
variable production overheads, non-recoverable duties applicable and
other cost incurred in bringing the inventories to their present location
and condition.

• Determination of estimated net realizable value and specific
identification involve technical judgments of the Directors, which has
been relied upon by auditor

h) Revenue Recognition:

• Revenue is recognized only when risks and rewards incidental to
ownership are transferred to the customer, it can be reliably measured
and it is reasonable to expect ultimate collection.

• Revenue from domestic sales is recognized (net of GST) when goods are
delivered and title of goods passes to the customers.

• Revenue from exports is recognized (net of GST wherever applicable)
when delivery of material is physically given to Customs Authorities.

• Interest Income is recognized when Companies right to receive interest
is established on the reporting date.

• All other income is recorded on accrual basic except those specified
separately.

i) Employee Benefits:

The Company contributes on a defined contribution basis to Employee''s
Provident Fund and ESIC, towards post-employment benefits, which is
administered by the respective Government authorities, and has no
further obligation beyond making its contribution, which is expensed in
the year to which it pertains.

The undiscounted amount of short term employee benefits is expected to
be paid in exchange for services rendered by an employee is recognized
during the year when the employee renders the service.

j) Prior Period and Extra ordinary items:

• Any Expenses/income (other than those arriving out of over/under
estimation of earlier years) arriving as a result of error or omission in
preparation of earlier years Financial Statement is shown separately.

• Any material gain/loss which is arising out of event other than that of
normal activity of Business is shown separately in financial statement.

k) Investments:

Investments are classified into non-current investments and current
investments based on intent of management at the time of making the
investments. The investment which are intended to be held for more than
one year are classified as non-current and those which are intended to
be held for less one year are classified as current investments.

Long term investments are carried at cost less diminution in value
wherever the decline is other than a temporary decline. Current
investments are valued at the lower of cost or market value.

On disposal of investment, the difference between the carrying amount
and net disposal value is charged/ credited to profit and loss account.
Income arising on such investment is Credit to Profit and Loss account
as normal business Income,

l) Taxation:

i. 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 by the end of the
reporting period.

Provision for income tax is made on the basis of the estimated taxable
income for the accounting year in accordance with the Income-tax Act,
1961.

ii. Deferred Tax: Deferred income tax assets and liabilities are recognized
for all temporary differences between the tax bases of assets and
liabilities and their carrying amounts in the financial statement.