Accounting Policies of Envirotech Systems Ltd. Company

Mar 31, 2025

NOTE-1 SIGNIFICANT ACCOUNTING POLICIES

1.1 Basis of Preparation

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles
(GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting
standards as prescribed under Section 133 of the Companies Act, 2013 (‘Act’) read with Rule 7 of the
Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by
the Securities and Exchange Board of India (SEBI). The accounting policies have been consistently applied
except where a newly issued accounting standard is initially adopted or a revision to an existing accounting
standard requires a change in the accounting policy hitherto in use.

1.2 Presentation and Disclosure of Financial Statements

The Company has also reclassified/regrouped the previous year figures in accordance with the requirements
applicable in the Current Year.

1.3 Use of estimates

The preparation of Financial Statements requires the Management to make estimates and assumptions
considered in the reported amounts of Assets and Liabilities (including Contingent Liabilities) as of the date
of the Financial Statements and the reported Income and Expenses during the reporting period. Management
believes that the estimates used in preparation of the Financial Statements are prudent and reasonable.
Future results could differ from these estimates.

1.4 Property, Plant and Equipment (PPE):

Property, Plant and Equipment are stated at cost of acquisition/construction, net of accumulated
depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs
if capitalisation criteria are met, and directly attributable costs of bringing the asset to its working condition
for the intended use. Subsequent expenditure related to PPE is capitalised only when 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.

Depreciation:

Depreciation on PPE is provided on the Straight Line Method (SLM) based on the useful lives prescribed
under Schedule II of the Companies Act, 2013. The residual values, useful lives and method of depreciation
are reviewed at each reporting date and adjusted prospectively, if required.

Capital Work-in-Progress (CWIP):

Expenditure incurred on assets which are not yet ready for their intended use at the Balance Sheet date is
shown under Capital Work-in-Progress. Such costs are accumulated until the asset is ready for commercial
use and are transferred to the appropriate category of PPE on completion.

Intangible Assets under Development:

Expenditure incurred on development of intangible assets not yet ready for their intended use is shown
under Intangible Assets under Development. Such expenditure is accumulated until the development is
complete and the asset is available for use, whereupon it is capitalised as an Intangible Asset in accordance
with AS-26.

Intangible Assets:

Intangible assets are recognised when it is probable that the future economic benefits attributable to the
assets will flow to the Company and the cost of the assets can be measured reliably. Intangible assets are
stated at cost of acquisition/implementation less accumulated amortisation and impairment losses, if any.
Amortisation is provided over the estimated useful life of the asset on a systematic basis consistent with the
pattern of economic benefits expected to be derived from the asset.

1.5 Revenue Recognition

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.

Sale of Goods: Revenue is recognised when the significant risks and rewards of ownership of the goods have
passed to the buyer, usually on delivery, and no significant uncertainty exists regarding the amount of
consideration and its ultimate collection.

Interest Income: Recognised on a time-proportion basis, taking into account the amount outstanding and the
applicable interest rate.

Other Income: Recognised on accrual basis, except where ultimate collection is uncertain.

1.6 Inventories

Inventories are valued at the lower of cost and net realisable value. Cost is determined as follows:

Raw Materials, Stores & Spares: At cost, using Weighted Average method.

Work-in-Progress: At cost of materials, labour and a proportion of manufacturing overheads.

Finished Goods: At cost of materials, labour, related production overheads and excise duty, or net realisable
value, whichever is lower.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of
completion and costs necessary to make the sale.

1.7 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 capitalised as part of the cost of such assets.

All other borrowing costs are recognised as an expense in the period in which they are incurred.

1.8 Employee Benefits

Short-term Employee Benefits: All employee benefits falling due wholly within twelve months of rendering
the service are recognised in the period in which the employee renders the related service.

Post-employment Benefits:

Defined Contribution Plans: Contributions to provident fund and other defined contribution schemes are
recognised as an expense when employees have rendered service entitling them to the contribution.

Defined Benefit Plans: The Company’s liability towards gratuity is charged off in the books as and when the
same are paid by the company.

Other Long-term Employee Benefits: Liabilities such as earned leave encashment are charged off in the
books as and when the same are paid by the company.

1.9 Income Taxes:

Tax expense for the year comprises current tax and deferred tax.

Current Tax:

Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the
provisions of the Income-tax Act, 1961, and is based on the taxable profit for the year. The tax rates and tax
laws used to compute the amount are those that are enacted or substantively enacted at the reporting date.

Deferred Tax:

Deferred tax is recognised on timing differences between the accounting income and taxable income for the
year, using the tax rates and laws that have been enacted or substantively enacted as at the reporting date.
Deferred tax liabilities are generally recognised for all taxable timing differences. Deferred tax assets are
recognised to the extent that there is reasonable certainty that sufficient future taxable income will be
available to realise such assets. In the case of unabsorbed depreciation and carried forward tax losses,
deferred tax assets are recognised only if there is virtual certainty, supported by convincing evidence, of
realisation of such assets.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no
longer reasonably certain or virtually certain, as the case may be, that sufficient taxable income will be available to allow
all or part of the deferred tax asset to be realised.

Deferred tax assets and deferred tax liabilities are offset if there is a legally enforceable right to set off current tax assets
against current tax liabilities, and the deferred tax assets and liabilities relate to income taxes levied by the same tax
authority. The tax expense (current and deferred) is recognised in the Statement of Profit and Loss.

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Mar 31, 2024

NOTE-1 SIGNIFICANT ACCOUNTING POLICIES

1.1 Basis of Preparation

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values. GAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

1.2 Presentation and Disclosure of Financial Statements

The Company has also reclassified/regrouped the previous year figures in accordance with the requirements applicable in the Current Year.

1.3 Use of estimates

The preparation of Financial Statements requires the Management to make estimates and assumptions considered in the reported amounts of Assets and Liabilities (including Contingent Liabilities) as of the date of the Financial Statements and the reported Income and Expenses during the reporting period. Management belives that the estimates used in preparation of the Financial Statements are prudent and reasonable. Future results could differ from these estimates.

1.4 Tangible and Intangible Fixed Assets

Tangible Fixed Assets are stated at Cost of Acquisition including any cost attributable for bringing the Assets to its'' working condition, less accumulated Depreciation.

1.5 Revenue Recognition

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. Items of Income and Expenditure are recognised on accrual basis.

1.6 Depreciation/Amortisation

Depreciation is provided on tangible assets as per the method prescribed in Schedule - II of Companies Act, 2013.

1.7 Investments

All the Investment sare in the name of the Company. The Investments has been made in the shape of Bank FDRs and Shares in Indian Companies. All the Investments are good and easily realisable in Market.

1.8 Retirement benefits

Gratuity and Leave encashment liability is not provided for, as this will be accounted for on Cash payment basis.

1.9 Income Taxes

Tax on Income for the Current period is determined on the basis of Taxable Income computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred Tax is recognised on timing differences between the Income accounted in Financial Statements and the Taxable Income for the year and quantified using the Tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred Tax Liability has been generated out of timing diferrence in DepffKiqfipiv fOOXou

1/0 Provisions, Contingent Liabilities and Contingent Assets /^/0^ComPanyVURN010123C,/glj A provision is recognized if, as a result of a past event, the Compan^aa a present legal obligation that isy^seqably^^able and it is probable that an outflow of economic benefits will be required to kettle the /Obligation. Provisions are^^eyfflQrtj^fy the best estimate of the outflow of economic benefits required to settle jjp^-iSBligation at the reporting date. WfTSre""no reliable estimate can be made, a disclosure is made as contingent liability. X disclosure for a contingent liability is also made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no

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1.11 Cash and Bank Balances

Cash and Bank Balances are included in Cash and Cash equivalents in the Balance Sheet.

1.12 Earnings per Share

Basic and Diluted Earnings per Share are computed in accordance with Accounting Standard-20.

1.13 Extraordinary and Exceptional Items

Income or expenses that arise from events or transactions that are clearly distinct from the ordinary activities of the Company are classified as extraordinary items. Specific disclosure of such events/transactions is made in the Financial Statements. Similarly, any external event beyond the control of the Company, significantly impacting Income or Expense, is also treated as extraordinary item and disclosed as such.

On certain occasions, the size, type or incidence of an item of Income or Expense, pertaining to the Ordinary activities of the Company, is such that its'' disclosure improves an understanding of the performance of the Company. Such Income or Expense is classified as an exceptional Item and accordingly disclosed in the notes forming part of Financial Statements.