ಕಂಪನಿಯ ಅಕೌಂಟಿಗ್ ಪಾಲಿಸಿ Global Pet Industries Ltd.

2. Significant Accounting Policies
Basis of Preparation of Financial Statements

The Financial Statements of the Company have been prepared and presented in accordance with the Generally Accepted
Accounting Principles in India (''Indian GAAP''). It comprises the Accounting Standards notified u/s 133 read with section 469
of the Companies Act, 2013. The accounting policies have been framed, keeping in view the fundamental accounting
assumptions of Going Concern, Consistency and Accrual, and also the basic considerations of Prudence, Substance over
form, and Materiality. Based on the nature of products and the time between acquisition of assets and their realisation in
cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current or non¬
current classification of assets and liabilities. These financial statements have been prepared on historical cost basis except
certain items like Financial Leases and Defined Benefit Plans are measured at fair value.

Use of Estimates

The preparation of financial statements requires the management to make certain estimates and assumptions that affect
the amounts reported in the financial statements and notes thereto. The management believes that these estimates and
assumptions are reasonable and prudent but the actual results may differ from them. They are reviewed on an on-going
basis and any revision to accounting estimates is recognised prospectively in current and future periods. Accounting
estimates and assumptions that have a significant effect on the amounts reported in the financial statements include:

i) Net Realisable value of items of Inventories

ii) Useful life and Residual value of Property, Plant and Equipment and Intangible Assets

iii) Defined Benefit obligations

iv) Deferred Tax asset or liability

v) Provisions for Trade Receivables

vi) Other Provisions and Contingencies

Property, Plant and Equipments

Property, plant and equipments are initially recognised at cost. Cost includes purchase price, taxes and duties and other
costs directly attributable to bringing the asset to the working condition for its intended use. However, cost excludes duties
and taxes wherever credit of such duties and taxes is availed. It is thereafter carried at its cost less accumulated depreciation
and accumulated impairment losses, if any.

Depreciation has been provided on Written Down method in accordance with Part "C" of Schedule II of the Companies Act,
2013 at the rates and in the manner mentioned in Schedule II of Companies Act, 2013. Assets costing less than Rs. 5000/-
are fully depreciated within the year of acquisition.

Intangible Assets

Intangible assets which are purchased and have a finite useful life are measured at cost, less accumulated amortisation and
accumulated impairment losses, if any. Cost includes expenditure that is directly attributable to the acquisition of the
intangible asset. Subsequent expenditure on intangible assets is capitalised only when it increases the future economic
benefits embodied in the specific asset to which it relates. All other expenditure is recognised in the statement of profit and
loss as incurred.

Intangible assets are amortised on Written Down method in accordance with Part "C" of Schedule II of the Companies Act,
2013 at the rates and in the manner mentioned in Schedule II of Companies Act, 2013

Impairment of Assets

At the end of each reporting period, the carrying amounts of Property, Plant & Equipment, and Intangible assets are tested
for impairment. An Impairment loss is recognised for an amount by which the asset''s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset''s fair value less costs of disposal and Value-in-use.
Value-in-use is the present value of future cash flows discounted using a rate which reflects the current market rates and the
risks specific to the asset.

For the purposes of assessing impairment, assets are grouped at the lowest levels (cash-generating units) for which
independent cash inflows can be identified. Impairment losses, if any, are recognised in the Statement of Profit and Loss and
included in depreciation and amortisation expenses.

Inventories

Inventories are valued at the lower of cost and net realisable value. Cost is computed on a ''First In First Out'' basis.

Cost of raw materials and stores and spares includes cost of purchase and other costs incurred in bringing the inventories to
their present location and condition. The aforesaid items are valued at net realisable value if the finished products in which
they are to be incorporated are expected to be sold at a loss. Cost of finished goods and work-in-progress include all costs of
purchases, conversion costs and other costs incurred in bringing the inventories to their present location and condition. The
net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion
and estimated costs necessary to make the sale.

Trade Receivables and Loans and Advances

Trade Receivables and Loans and Advances are presented after making adequate provision for any shortfall in their
recovery. The provision and any subsequent recovery is recognised in the Profit and Loss statement. Bad debts are written
off when they are identified.

Cash and cash equivalents

All highly liquid financial instruments, which are readily convertible into known amount of cash that are subject to an
insignificant risk of change in value and having original maturities of three months or less from the date of purchase are
considered to be cash equivalents.

A) Basis of Preparation of Financial Statements

The accounts are prepared under the historical cost convention on accrual basis and under the going concern assumption in accordance with the generally acepted
accounting principles and applicable accounting standards.

B) Fixed Assets And Depreciation:

Fixed assets are stated at cost less depreciation. Depreciation has been provided on Written Down method in accordance with Part “C” of Schedule II of the Companies Act,
2013 at the rates and in the manner mentioned in Schedule II of Companies Act, 2013. Assets costing less than Rs. 5000/- are fully depreciated within the year of acquisition.

C) Use of estimates:

The preparation of financial statement in conformity with generally accepted accounting principles requires management to make estimates and assumption that effect the
reported amount of asset, liabilities, revenue and expenses and disclosures of contingent asset and liabilities.The estimates and assumption used in the accompanying
financial statement are based upon management''s evaluation of the relevant facts and circumstances as of the date of the financial statement. Actual results may differ from
estimates and assumption used in preparing the accompanying financial statement. Any revisions to accounting estimates are recognized prospectively in current and future
period.

D) Investments:

Investments are clasified as equity securities and debt securities including mutual funds . Classification of investments is based on the entity''s intent of holding period.Current
Investments are valued at cost or Net Realizable value , whichever is lower.

E) Inventories:

Cost of inventory comprises of purchase cost, cost of conversion and other cost incurred in bringing the inventory to their present location and condition. Cost is arrived on a
FIFO basis.

Stock of raw materials, stock- in-trade are valued at Cost or net realizable value whichever is lower.

Stock of finished goods is valued at cost or net realizable value whichever is lower.

F) Revenue Recognition:

i) Income from sale of goods is recognised upon transfer of Significant risk and rewards of ownership of goods to Customer .Sales are net of Goods and service tax,
returns,rebates and discounts.

ii) Interest income is recognised on a accrual basis.

iii) Duty Drawbacks are refunds or rebates of customs duties that are provided by governments when goods are exported or used in the production of goods that are
subsequently exported. The amount recognized is based on the expected refund from the customs authorities and is measured when the export transaction is completed and
all relevant conditions are satisfied.

G) Employee Benefit expenses:

i. Short Term Employee Benefits

Short term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is
rendered.

ii. Long Term Employee Benefits
Defined contribution plans:

The Company has Defined Contribution Plans for post-employment benefits in the form of Provident Fund and Employees State Insurance Scheme which are administered
through Government of India. Provident Fund and Employees'' State Insurance Scheme are classified as Defined Contribution Plans as the Company has no further obligation
beyond making the contributions. The Company''s contributions to Defined Contribution Plans are charged to the Statement of Profit and Loss as incurred.

Defined Benefit Plans

The Company has Defined Benefit Plan for post-employment benefits in the form of Gratuity. Gratuity is funded. Liability for Defined Benefit Plan is provided on the basis of
valuation, as at the Balance Sheet date, carried out by independent actuary. The actuarial valuation method used by independent actuary for measuring the liability is the
Projected Unit Credit Method.

Actuarial gains and losses comprise experience adjustment and the effect of change in actuarial assumption and are recognized immediately in the Statement of Profit and
Loss as income or expenses.

Other Long Term Employee Benefits

The employees of the Company are entitled to other long-term benefits in the form of Leave Encashment and Compensated Absences as per the policy of the Company. The
Leave Liabilities have been calculated based on balance leaves on reporting date.

Terminal benefits are recognized as expenses as and when incurred.

H) Tax Provision:

Current Tax is the amount of tax payable on the estimated taxable income for the current year as per the provisions of The Income Tax Act, 1961.

Deferred Tax is recognized for timing differences. However, Deferred Tax Asset is recognized on the basis of reasonable / virtual certainty that sufficient future taxable income
will be available against which the same can be realized.

l.Significantaccounting Policies:A) Basis of Preparation of Financial Statements

The accounts are prepared under the historical cost convention on accrual basis and under the going concern assumption in accordance with the generally accepted accounting principles and applicable accounting standards.

B) Fixed Assets And Depreciation:

Fixed assets are stated at cost less depreciation. Depreciation has been provided on Written Down method in accordance with Part "C" of Schedule II of the Companies Act, 2013 at the rates and in the manner mentioned in Schedule II of Companies Act, 2013. Assets costing less than Rs. 5000/- are fully depreciated within the year of acquisition.

C) Use of estimates:

The preparation of financial statement in conformity with generally accepted accounting principles requires management to make estimates and assumption that effect the reported amount of asset, liabilities, revenue and expenses and disclosures of contingent asset and liabilities. The estimates and assumption used in the accompanying financial statement are based upon management''s evaluation of the relevant facts and circumstances as of the date of the financial statement. Actual results may differ from estimates and assumption used in preparing the accompanying financial statement. Any revisions to accounting estimates are recognized prospectively in current and future period.

D) Investments:

Investments are classified as equity securities and debt securities including mutual funds . Classification of investments is based on the entity''s intent of holding period. Current Investments are valued at cost or Net Realizable value, whichever is lower.

E) Inventories:

Cost of inventory comprises of purchase cost, cost of conversion and other cost incurred in bringing the inventory to their present location and condition. Cost is arrived on a FIFO basis.

Stock of raw materials, stock- in-trade are valued at Cost or net realizable value whichever is lower.

Stock of finished goods is valued at cost or net realizable value whichever is lower.

F) Revenue Recognition:

”i) Income from sale of goods is recognized upon transfer of Significant risk and rewards of ownership of goods to Customer .Sales are net of Goods and service tax, returns, rebates and discounts.

ii) Interest income is recognized on a accrual basis.

iii) Duty Drawbacks are refunds or rebates of customs duties that are provided by governments when goods are exported or used in the production of goods that are subsequently exported. The amount recognized is based on the expected refund from the customs authorities and is measured when the export transaction is completed and all relevant conditions are satisfied.

G) Employee Benefit expenses

i. Short Term Employee Benefits:

Short term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered.

ii. Long Term Employee Benefits:

Defined contribution plans:

The Company has Defined Contribution Plans for post-employment benefits in the form of Provident Fund and Employees State Insurance Scheme which are administered through Government of India. Provident Fund and Employees'' State Insurance Scheme are classified as Defined Contribution Plans as the Company has no further obligation beyond making the contributions. The Company''s contributions to Defined Contribution Plans are charged to the Statement of Profit and Loss as incurred.

Defined Benefit Plans:

The Company has Defined Benefit Plan for post-employment benefits in the form of Gratuity. Gratuity is funded. Liability for Defined Benefit Plan is provided on the basis of valuation, as at the Balance Sheet date, carried out by independent actuary. The actuarial valuation method used by independent actuary for measuring the liability is the Projected Unit Credit Method.

Actuarial gains and losses comprise experience adjustment and the effect of change in actuarial assumption and are recognized immediately in the Statement of Profit and Loss as income or expenses.

Other Long Term Employee Benefits:

The employees of the Company are entitled to other long-term benefits in the form of Leave Encashment and Compensated Absences as per the policy of the Company. The Leave Liabilities have been calculated based on balance leaves on reporting date.

Terminal benefits are recognized as expenses as and when incurred.

H) Tax Provision

Current Tax is the amount of tax payable on the estimated taxable income for the current year as per the provisions of The Income Tax Act, 1961.

Deferred Tax is recognized for timing differences. However, Deferred Tax Asset is recognized on the basis of reasonable / virtual certainty that sufficient future taxable income will be available against which the same can be realized.

I) Provisions, Contingent Liabilities and Contingent Assets

A provision is made based on a reliable estimate when it is probable that an outflow of resources embodying economic benefits will be required to settle an obligation. Contingent liabilities, if material are disclosed by way of notes to accounts. Contingent assets are neither recognized nor disclosed in the financial statements.

I) ImpairmentofAssets

At each balance sheet date, the Company reviews the carrying amounts of its assets to determine whether there is any indication that those assets suffered any impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an assets net selling price and value in use. In assessing value in use, the estimated future cash - flow expected from the continuing use of the assets and from its disposal are discounted to their present value using pretax discount rate that reflects the current market assessments of time value of money and the risk specific of the assets.

Reversal of impairment loss is recognized immediately as income in the Statement of Profit and Loss.

K) Foreign Currency Transactions

Foreign currency transactions are recorded at the exchange rates prevailing on the date of the transaction. Gains and losses arising out of subsequent fluctuations are accounted for on actual payment or realization. Monetary items denominated in foreign currency as at the Balance Sheet date are converted at the exchange rates prevailing on that date. Exchange differences are recognized in the Statement of Profit and Loss.