2. Material Accounting Policies

The Ministry of Corporate Affairs (MCA) has amended Ind AS 1, mandating the disclosure of material accounting policies and removal of obscuring policy information. In compliance with these changes, the Company has disclosed all material accounting policies.

2.1 Property, plant, and equipments Capital Work-in-Progress Recognition and measurement

Items of property, plant and equipment are stated at cost less accumulated depreciation and Impairment, if any. Capital work in progress includes cost of assets at sites, construction expenditure and interest on the funds deployed less any Impairment loss, if any.

If significant parts of an item of property, plant and equipment tiave different useful lives, then they are accounted for as a separate item (major components) of property, plant and equipment. As per the assessment made by the management, fixed assets (other than building and captive power plant) does not comprise any significant components with different useful life. Any gain/loss on disposal of property, plant and equipment is recognised in Statement of Profit and loss.

Subsequent Measurement

Subsequent expenditure Is capitalised only If It 1s probable that the future economic benefits associated with the expenditure will flow to the company.

Depreciation

Depreciation on fixed assets is calculated on Straight Line Method using the rates arrived at based on the estimated useful lives given In Schedule II of the Companies Act, 2013 or re-assessed by the Company on technical basis, as aiven below.

Leasehold land is not being amortised over the period of lease tenure. Additions on rented premises are being amortised over the period of rent agreement.

Depreciation methods, useful lives and residual values are reviewed in each financial year end and changes, if any, are accounted for prospectively. Individual assets costing below Rs.5000 are fully depreciated In the year of purchase as these assets have no significant useful life.

De-Recognition

An item of property, plant, and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset.

Capital work-in-progress

Capital work-in-progress assets in the course of construction for production or/and supply of goods or services or administrative purposes, or for purposes not yet determined, are

carried at cost, less any recognised impairment loss. At the point when an asset is operating at management's intended use, the cost of construction is transferred to the appropriate category of property, plant and equipment. Costs associated with the commissioning of an asset are capitalised where the asset is available for use but Incapable of operating at normal levels until a period of commissioning has been completed.

2.2 Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories and deferred tax assets) to determine whether there Is any Indication on impairment. If any such Indication exists, then the asset's recoverable amount is estimated.

For Impairment testing, assets are grouped together Into the smallest group of assets that generates cash Inflows from continuing use that are largely independent of the cash inflows of other assets.

The recoverable amount of an asset is the greater of Its value In use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

Impairment loss in respect of assets other than goodwill is reversed only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised in prior years. A reversal of impairment loss is recognised immediately in the Statement of Profit & Loss.

2.3 Employee benefits

a. Short-term employee benefits

Short-term employee benefits are expensed as the related service Is provided. A liability Is recognised for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

b. Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service 1s provided. The company has following defined contribution plans: a) Provident fund b) Gratuity

c. Defined benefit plans

For defined benefit retirement plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. The present value of the defined benefit obligation Is determined by discounting the estimated future cash outflows using Interest rates of government bonds.

Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset celling (if applicable) and the return on plan assets (excluding interest), is reflected in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to the statement of profit and loss. Past service cost Is recognised In the statement of profit and loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorised as follows:

• Service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);

• Net interest expense or income; and

• Remeasurement

The Company presents the first two components of defined benefit costs in the statement of profit and loss in the line item employee benefits expense.

The retirement benefit obligation recognised in the balance sheet represents the actual deficit or surplus in the Company's defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.

d. Other long-term employee benefits

Employee benefits In the form of long-term compensated absences are considered as long term employee benefits. The company's net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Remeasurements are recognised in profit or loss in the period in which they arise. The liability for long-term compensated absences are provided on an actual basis.

2.4 Revenue Recognition

a. Revenue from Contracts with customers

The company derives revenue from sale of "Yeast”.

IND AS -115 “Revenue from Contracts with customers” Provides a control based revenue recognition model and provides a five step application approach to be followed for revenue recognition.

• Identify the contract(s) with a customer;

• Identify the performance obligations;

• Determine the transaction price;

• Allocate the transaction price to performance obligations;

• Recognize revenue when or as an entity satisfies a performance obligation.

Trade receivables are measured at their transaction price unless it contain a significant financing component in accordance with Ind AS 115 (or when the entity applies the practical expedient) or pricing adjustments embedded in the contract

b. The Company recognises revenue from sale of goods when the title has been passed and all of the following conditions are satisfied:

I) The Company has transferred to the buyer the significant risks and rewards of ownership of the goods;

ii) The Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

iii) The amount of revenue can be measured reliably;

iv) It is probable that the economic benefits associated with the transaction will flow to the Company; and

v) The costs Incurred or to be Incurred with respect to the transaction can be measured reliably.

Sales of goods are recognized at the point of dispatch from the factory to customers and sales from Depot are recognized at the time of billing to the customers. Sales are net of returns, rebates, trade discounts, rate differences, damaged goods, and exclusive of taxes.

c. Revenue (other than sale) 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. Export incentives and subsidies are recognized when the Company has complied with the conditions and there is a reasonable assurance the incentive will be received. Claim on insurance companies and others, where quantum of accrual cannot be ascertained with reasonable certainty, are accounted for on Receipt basis.