Accounting Policies of Kataria Industries Ltd. Company

Mar 31, 2025

I. SIGNIFICANT ACCOUNTING POLICIES

1.1 Basis of Preparation of Financial Statements

The financial statements are prepared and presented under
the historical cost convention, on the accrual basis of
accounting in accordance with the accounting principles
generally accepted in India (‘Indian GAAP'') and comply with
the Accounting Standards issued by the Institute of
Chartered Accountants of India (''ICAI'') specified in Section
133 of the Companies Act, 2013, read with Rule 7 of the
Companies (Accounts) Rule 2014 and relevant provisions of
Companies Act, 2013 ("the Act") to the extent applicable.

1.2 Use of Estimates

The preparation of financial statements in conformity with
generally accepted accounting principles (“GAAP") requires
management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the
disclosure of contingent liabilities on the date of financial
statements. Actual results could differ from those estimates.
Any revision to accounting estimates is recognized
prospectively in current and future periods.

1.3 Fixed Assets and Depreciation

The company has adopted Cost Model as prescribed in
Accounting standard -10 (Revised) “Property Plant &
Equipment".

Depreciation on fixed assets is provided on Written down
Method at the manners provided in Schedule II of the
Companies Act, 2013. Depreciation is charged on fixed
assets from last day of the month in which such assets were
put to use. Further, Govt. Grant received if any related to
depreciable assets are reduced from depreciation over the
period of useful life of qualifying assets on systematic and
rational basis. Leasehold land is amortized over the period
of lease.

1.4 Impairment of Assets

The Company assesses at each balance sheet date whether
there is any indication that an asset or a group of assets
(cash generating unit) may be impaired. If any such

indication exists, the Company estimates the
recoverable amount of the asset or a group of assets. If
such recoverable amount of the asset or the recoverable
amount of the cash generating unit to which the asset
belongs is less than its carrying amount, the carrying
amount is reduced to its recoverable amount. The reduction
is treated as an impairment loss and is recognized in the
profit & loss account. If at the balance sheet date there is an
indication that a previously assessed impairment loss no
longer exits, the recoverable amount is reassessed and the
asset is reflected at the recoverable amount subject to a
maximum of depreciable historical cost.

1.5 Inventories

a. Inventories are valued at cost or net realizable value
whichever is lower.

b. The cost of finished goods and stock in process includes
estimated cost of conversion and other costs included in
bringing the inventories to their present location and
condition.

c. Cost of raw materials, packaging material and oils and
fuels on First Come First Out basis.

d. Cost of Store and Spares is determined at Estimated
Cost.

e. By-product and scrap are valued at net realisable value.

1.6 Revenue Recognition

a. Revenue from sale is recognized on transfer of all
significant risk and rewards of ownership of products to
the customers, which is generally on dispatch of goods.
Sales are stated exclusive of GST.

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

1.7 Employee Benefits
Short Term Employee Benefits

All employee benefits payable wholly within twelve months
of rendering the service are classified as short-term
employee benefits. Benefits such as salaries, wages, and
short term compensated absences, etc. are recognized in
the period in which the employee render the related
services.

Post- Employment Benefits

i. Defined Contribution Plans: The Employee State
Insurance Scheme and Contributory Provident Fund
administered by Provident Fund Commissioner are
defined contribution plans. The Company''s contribution

paid/payable under the schemes is recognized as
expense in the profit and loss account during the period
in which the employee renders the related service. No
provision has been made towards leave encashment
payable to employees on their retirement or termination
of service.

ii. Defined Benefit Plans: The Company has taken Group
Gratuity and Cash Accumulation Policy issued by the
Kotak Life Insurance . The present value of the obligation
under such defined benefit plans is determined based on
actuarial valuation as advised by Kotak Life Insurance,
using the Projected Unit Credit method, which
recognizes each period of service as giving rise to
additional unit of employee benefit entitlement and
measures each unit separately to build up the final
obligation.

The obligation is measured at the present value of the
estimated future cash flows. The discount rates used for
determining the present value of the obligation under
defined benefit plans, are as advised by Kotak Life
Insurance.

Actuarial gains and losses are recognized immediately in
the Profit & Loss Account by way of contribution for the
year.

iii. Other Benefits: The Company has not made provision for
leave encashment in respect of accumulated encashable
leave of employees as at the balance sheet date. The
liability, if any, on account of leave encashment will be
recognized in the year of actual payment.

1.8 Foreign Currency Transactions

Transactions denominated in foreign currency are recorded
at the exchange rate prevailing on the date of transactions.
Exchange differences arising on foreign exchange
transactions settled during the year are recognized in the
statement of profit and loss of the year.

Monetary assets and liabilities in foreign currency, which are
outstanding as at the year-end, are translated at the closing
exchange rate and the resultant exchange differences are
recognized in the statement of profit and loss.

1.9 Borrowing Costs

Borrowing costs are capitalized as a part of the cost of
qualifying assets when it is probable that they will result in
future economic benefits to the enterprise and the cost can
be measured reliably. A qualifying asset is one that
necessarily takes substantial period of time to get ready for
its intended use. Other borrowing cost is recognized as an
expense in the period in which they are incurred. Interest
on term loan taken for acquisition of fixed assets till the
date of commencement of commercial production unit is
capitalized and determined in accordance with Accounting

Standard (AS) 16- Borrowing Costs issued by the Institute of
Chartered Accountants of India (ICAI) and notified under the
Companies (Accounts) Rules 2014.

1.10 Taxation

Tax expenses for the current year comprises of current tax
and deferred tax. Current tax is the amount of tax payable
on the taxable income for the year as determined in
accordance with the provisions of Income Tax Act 1961.
Deferred tax is recognized, on timing difference between
the taxable income and accounting income that originate in
one period and are capable of reversal in one or more
subsequent periods.

1.11 Earning Per Share

Basic and diluted earnings per share is computed by
dividing the net profit attributable to equity shareholders
for the year, by the weighted average number of equity
shares outstanding during the year. There are no diluted
potential equity share.

---

Mar 31, 2024

I. SIGNIFICANT ACCOUNTING POLICIES

1.1. Basis of Preparation

The financial statements are prepared and presented under the historical cost convention, on the accrual basis of accounting in accordance with the accounting principles generally accepted in India (‘Indian GAAP'') and comply with the Accounting Standards issued by the Institute of Chartered Accountants of India (''ICAI'') specified in Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rule 2014 and relevant provisions of Companies Act, 2013 ("the Act") to the extent applicable.

1.2. Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.

1.3. Fixed assets and depreciation

The company has adopted Cost Model as prescribed in Accounting standard -10 (Revised) “Property Plant & Equipment”.

Recognition

The Cost of an item of property, Plant& equipment is recognized as an asset if, and only if:

(a) it is probable that future economic benefits associated with the item will flow to the enterprises; and

(b) the cost of the item can be measured reliably.

Fixed assets are stated at cost, less accumulated depreciation and impairment losses if any. Pre-operative expenses including trial run expenses (net of revenue) are capitalised. The cost of fixed assets comprises the purchase price and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to the working condition for its intended use. Financing costs relating to acquisition of fixed assets are also included to the extent they relate to the period till such assets are ready to put to use.

Capital Work-in-progress includes the cost of fixed assets that are not ready to use at the balance sheet date.

Depreciation on fixed assets is provided on Written down Method at the manners provided in Schedule II of the Companies Act, 2013. Depreciation is charged on fixed assets from last day of the month in which such assets were put to use. Further, Govt. Grant received if any related to depreciable assets are reduced from depreciation over the period of useful life of qualifying assets on systematic and rational basis. Leasehold land is amortized over the period of lease.

1.4. Impairment of Assets

The Company assesses at each balance sheet date whether there is any indication that an asset or a group of assets (cash generating unit) may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset or a group of assets. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit & loss account. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exits, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciable historical cost.

1.5. Inventories

(a) Inventories are valued at cost or net realizable value whichever is lower.

(b) The cost of finished goods and stock in process includes estimated cost of conversion and other costs included in bringing the inventories to their present location and condition. Cost of raw materials, packaging material and oils and fuels on First Come First Out basis.

(c) Cost of Store and Spares is determined at Estimated Cost.

(d) By-product and scrap are valued at net realisable value.

1.6. Revenue recognition

(a) Revenue from sale is recognized on transfer of all significant risk and rewards of ownership of products to the customers, which is generally on dispatch of goods. Sales are stated exclusive of GST.

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

1.7. Employee Benefits

Short Term Employee Benefits.

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, wages, and short term compensated absences, etc. are recognized in the period in which the employee render the related services.

Post- Employment Benefits

(i) . Defined Contribution Plans: The Employee State Insurance

Scheme and Contributory Provident Fund administered by Provident Fund Commissioner are defined contribution plans. The Company''s contribution paid/payable under the schemes is recognized as expense in the profit and loss account during the period in which the employee renders the related service. No provision has been made towards leave encashment payable to employes on their retirement or termination of service.

(ii) . Defined Benefit Plans: The Company has taken Group

Gratuity and Cash Accumulation Policy issued by the Kotak Life Insurance. The present value of the obligation under such defined benefit plans is determined based on actuarial valuation as advised by Kotak Life Insurance, using the Projected Unit Credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plans, are as advised by Kotak Life Insurance.

The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plans, are as advised by Kotak Life Insurance.

1.8. Foreign Currency Transactions

Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of transactions. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the statement of profit and loss of the year.

Monetary assets and liabilities in foreign currency, which are outstanding as at the year-end, are translated at the closing exchange rate and the resultant exchange differences are recognized in the statement of profit and loss.

Borrowing costs are capitalized as a part of the cost of qualifying assets when it is probable that they will result in future economic benefits to the enterprise and the cost can be measured reliably. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. Other borrowing cost is recognized as an expense in the period in which they are incurred. Interest on term loan taken for acquisition of fixed assets till the date of commencement of commercial production unit is capitalized and determined in accordance with Accounting Standard (AS) 16- Borrowing Costs issued by the Institute of Chartered Accountants of India (ICAI) and notified under the Companies (Accounts) Rules 2014.

1.10. Taxation

Tax expenses for the current year comprises of current tax and deferred tax. Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of Income T ax Act 1961. Deferred tax is recognized, on timing difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

1.11. Earning Per Share

Basic and diluted earnings per share is computed by dividing the net profit attributable to equity shareholders for the year, by the weighted average number of equity shares outstanding during the year. There are no diluted potential equity share.