iv) Material Accounting Policies

a) Inventory

Inventories are valued as follows:

Raw materials, stores and spares and
packing materials

Raw materials, stores and spares and
packing material are valued at lower of
cost and net realisable value. Cost of raw
materials, stores and spares and packing
material is determined on a 'First in First
Out' basis and includes freight costs,
interest expense where such materials
are stored for a substantial period of
time and other expenditure incurred in
bringing such inventories to their present
location and conditions. 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.

Stores and spares having useful life of
more than twelve months are capitalized
as tangible assets under "Property, plant
and equipment" and are depreciated
prospectively over their remaining useful
lives in accordance with Ind AS 16.

Work in progress

Work in progress is valued at lower of cost
and net realisable value. Cost includes raw
material cost and a proportion of direct
and indirect overheads up to estimated
stage of completion and interest expense
where such materials are stored for a
substantial period of time.

Finished goods

Finished goods is valued at lower of cost
and net realisable value. Cost includes
cost of raw materials, direct and indirect
overheads which are incurred to bring
the inventories to their present location
and condition and also includes interest
as a carrying cost of goods where such

goods are stored for a substantial period
of time. The net realisable value is the
estimated selling price in the ordinary
course of business less the estimated
costs necessary to make the sale.

b) Property, Plant and Equipment

Recognition and initial measurement

Property, plant and equipment are
stated at their cost of acquisition. The
cost comprises purchase price, taxes
(against which input has not been availed),
borrowing cost if capitalization criteria
are met and directly attributable cost of
bringing the asset to its working condition
for the intended use. Any trade discount
and rebates are deducted in arriving at
the purchase price. Subsequent costs are
included in the asset's carrying amount
or recognized as a separate asset, as
appropriate, only when it is probable that
future economic benefits attributable
to such subsequent cost associated
with the item will flow to the Company.
All other repair and maintenance costs
are recognized in Statement of Profit or
Loss as incurred.

Subsequent measurement (depreciation
and useful lives)

Depreciation on Property, plant and
equipment is provided on the written
down value arrived on the basis of the
useful life prescribed under Schedule II of
the Companies Act, 2013.

The residual values, useful lives and
method of depreciation of are reviewed
at each financial year end and adjusted
prospectively, if appropriate.

De-recognition

An item of Property, plant and equipment
and any significant part initially recognized
is de-recognized upon disposal or when
no future economic benefits are expected
from its use or disposal. Any gain or loss
arising on de-recognition of the asset
(calculated as the difference between the
net disposal proceeds and the carrying
amount of the asset) is included in the
Statement of profit and loss when the
asset is derecognized.

c) Intangible assets

Recognition and initial measurement

Intangible assets acquired separately
are measured on initial recognition
at cost. Following initial recognition,
intangible assets are carried at cost
less any accumulated amortization and
accumulated impairment losses, if any.

Subsequent measurement (amortization
and useful lives)

All finite-lived intangible assets are
accounted for using the cost model
whereby capitalized costs are amortized
over their estimated useful lives. Residual
values and useful lives are reviewed at
each reporting date and any change in
the same is accounted for prospectively.
Goodwill is tested for impairment annually.
The following useful lives are applied:

De-recognition

Gains or losses arising from derecognition
of an intangible asset are measured as
the difference between the net disposal
proceeds and the carrying amount of the
asset and are recognized in the Statement
of Profit and Loss when the asset
is derecognized.

d) Capital Work in Progress

Capital work in progress represents
expenditure incurred in respect of
capital projects and are carried at
cost. Cost comprises purchase cost,
related acquisition expenses and other
direct expenses.

e) Impairment of non-financial assets

The Company assesses, at each reporting
date, whether there is an indication that
an asset may be impaired. If any indication
exists, or when annual impairment testing
for an asset is required, the Company
estimates the asset's recoverable amount.
An asset's recoverable amount is the
higher of an asset's or cash-generating

unit's (CGU) fair value less costs of disposal
and its value in use. Impairment losses of
continuing operations are recognized in
the Statement of Profit and Loss.

After impairment, depreciation is provided
on the revised carrying amount of the
asset over its remaining useful life.

f) Borrowing costs

Borrowing costs directly attributable to the
acquisition, construction or production of
an asset that necessarily takes a substantial
period of time to get ready for its intended
use or sale are capitalized as part of the
cost of the asset. All other borrowing costs
are expensed in the period in which they
occur. Borrowing costs consist of interest
calculated using the effective interest rate
(EIR) that an entity incurs in connection
with the borrowing of funds. Borrowing
cost also includes exchange differences to
the extent regarded as an adjustment to
the borrowing costs.

g) Functional and presentation currency

The financial statements are presented
in Indian Rupees (INR), which is also the
Company's functional currency.

Foreign Currencies
Transactions and balances
Initial recognition

Transactions in foreign currencies are
initially recorded by the Company at
its functional currency spot rates at
the date the transaction first qualifies
for recognition.

Subsequent measurement

Monetary assets and liabilities
denominated in foreign currencies are
translated at the functional currency spot
rates of exchange at the reporting date.

Exchange differences arising on settlement
or translation of monetary items are
recognized in Statement of Profit and Loss.

Non-monetary items that are measured in
terms of historical cost in a foreign currency
are translated using the exchange rates at
the dates of the initial transactions. Non¬
monetary items measured at fair value in
a foreign currency are translated using

the exchange rates at the date when the
fair value is determined. The gain or loss
arising on translation of non-monetary
items measured at fair value is treated in
line with the recognition of the gain or loss
on the change in fair value of the item.

h) Leases

Where the Company is the lessee
Right of use assets and lease liabilities

A lease is defined as 'a contract, or part
of a contract, that conveys the right to
use an asset (the underlying asset)
for a period of time in exchange for
consideration'. The Company enters into
leasing arrangements for various assets.
To assess whether a contract conveys the
right to control the use of an identified
asset, the Company assesses whether:

(i) the contract involves the use of an
identified asset

(ii) the Company obtains substantially
all of the economic benefits from
use of the asset through the period
of the lease and

(iii) the Company has the right to direct
the use of the asset.

Recognition and initial measurement

At lease commencement date, the
Company recognizes a right-of-use asset
and a lease liability on the Standalone
balance sheet. The right-of-use asset
is measured at cost, which is made up
of the initial measurement of the lease
liability, any initial direct costs incurred
by the Company, an estimate of any
costs to dismantle and remove the asset
at the end of the lease (if any), and any
lease payments made in advance of the
lease commencement date (net of any
incentives received).

Subsequent measurement

The Company depreciates the right-of-use
assets on a straight-line basis from the
lease commencement date to the earlier
of the end of the useful life of the right-
of-use asset or the end of the lease term.
The Company also assesses the right-
of-use asset for impairment when such
indicators exist.

At lease commencement date, the Company
measures the lease liability at the present
value of the lease payments unpaid at that
date, discounted using the interest rate
implicit in the lease if that rate is readily
available or the Company's incremental
borrowing rate. Lease payments included
in the measurement of the lease liability
are made up of fixed payments (including
in substance fixed payments). Subsequent
to initial measurement, the liability will be
reduced for payments made and increased
for interest. It is re-measured to reflect
any reassessment or modification, or if
there are changes in in-substance fixed
payments. When the lease liability is re¬
measured, the corresponding adjustment
is reflected in the right-of-use asset.

The Company has elected to account for
short-term leases and leases of low-value
assets using the practical expedients.
Instead of recognizing a right-ofuse asset
and lease liability, the payments in relation
to these are recognized as an expense in
standalone statement of profit and loss on
a straight-line basis over the lease term.

Where the Company is the lessor

Leases in which the Company does not
transfer substantially all the risks and
rewards of ownership of an asset are
classified as operating leases. Rental
income from operating lease is recognized
on a straight-line basis or another
systematic basis as per the terms of the
relevant lease. Initial direct costs incurred
in negotiating and arranging an operating
lease are added to the carrying amount of
the leased asset and recognized over the
lease term on the same basis as rental
income. Contingent rents are recognized
as revenue in the period in which
they are earned.

i) Fair value measurement

The Company measures financial
instruments, such as derivatives and
certain investments at fair value at each
reporting date. 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 fair value
measurement is based on the presumption

that the transaction to sell the asset or
transfer the liability takes place either:

® In the principal market for the asset
or liability, or

® In the absence of a principal market,
in the most advantageous market for
the asset or liability

Company uses valuation techniques that
are appropriate in the circumstances and
for which sufficient data are available to
measure fair value, maximizing the use of
relevant observable inputs and minimizing
the use of unobservable inputs.

All assets and liabilities for which fair value
is measured or disclosed in the financial
statements are categorized within the fair
value hierarchy, described as follows, based
on the lowest level input that is significant
to the fair value measurement as a whole:

Level 1 — Quoted (unadjusted) market
prices in active markets for identical assets
or liabilities.

Level 2 — Valuation techniques for which
the lowest level input that is significant to
the fair value measurement is directly or
indirectly observable.

Level 3 — Valuation techniques for
which the lowest level input that is
significant to the fair value measurement
is unobservable.

For assets and liabilities that are
recognized in the financial statements on
a recurring basis the Company determines
whether transfers have occurred between
levels in the hierarchy by re-assessing
categorization (based on the lowest level
input that is significant to the fair value
measurement as a whole) at the end of
each reporting period or each case.

j) Revenue recognition

Revenue is measured based on the
consideration specified in a contract with a
customer and excludes amounts collected
on behalf of third parties. A performance
obligation is a promise in a contract to
transfer a distinct good or service (or
a bundle of goods and services) to the
customer and is the unit of account in
Ind AS 115. A contract's transaction price

is allocated to each distinct performance
obligation and recognized as revenue,
as, or when, the performance obligation
is satisfied. The Company recognizes
revenue when it transfers control of a
product or service to a customer.

Revenue is measured on the basis
of transaction price, which is the
consideration, adjusted for volume
discounts, rebates, schemes allowances,
price concessions, incentives, amounts
collected on behalf of the government and
returns, if any, as specified in the contracts
with the customers. Accumulated
experience is used to estimate the
provision for such discounts and rebates.
Revenue is only recognised to the extent
that it is highly probable a significant
reversal will not occur.

Sale of goods:

Revenue from sale of goods is recognized
when it transfers control of the product to
a customer i.e. when customers are billed
(in case of ex-works) or when goods are
delivered at the delivery point, as per terms
of the agreement, which could be either
customer premises or carrier premises
who will deliver goods to the customer.
The Company considers whether there
are other promises in the contract in
which there are separate performance
obligations, to which a portion of the
transaction price needs to be allocated.
When payments received from the
customers exceed revenue recognized
to date on a particular contract, any
excess (a contract liability) is reported in
the statement of financial position under
other liabilities.

Customer has a right to return for defective
goods. Since the quantity of goods
returned has been minimal for years, it is
highly probable that a significant reversal
in the cumulative revenue recognized
will not occur.

In order to determine if it is acting as a
principal or as an agent, the Company
assesses whether it has exposure to the
significant risks and rewards associated
with the sale of goods. Revenue from such
transactions where the Company is acting
as an agent is recognized on net basis i.e.

after deducting the amount contractually
payable to vendor out of the total
consideration received and is recognized
once the facilitation of such service is done
as the Company does not assume any
performance obligation.

Satisfaction of performance obligations

The Company's revenue is derived from
the single performance obligation to
transfer primarily rice and other products
under arrangements in which the transfer
of control of the goods and the fulfillment
of the Company's performance obligation
occur at the same time. Therefore, revenue
from the sale of goods is recognized when
the Company transfers control at the point
in time the customer takes undisputed
delivery of the goods.

Whether the customer has obtained control
over the asset depends on when the goods
are made available to the carrier or the buyer
takes possession of the goods, depending
on the delivery terms. Revenue is measured
at the transaction price of the consideration
received or receivable, the amount the
Company expects to be entitled to.

No element of financing is deemed present
as the sales are made with insignificant
credit terms depending on the specific
terms agreed with customers.

Rental income:

Rental income for operating lease is
recognized on straight line basis with
reference to terms of the agreements.

Interest income:

Interest income from a financial asset is
recognised it is probable that the economic
benefits will flow to the Company and
the amount of income can be measured
reliably. Interest income is accrued on a
time basis, by reference to the principal
outstanding and at the applicable
effective interest rate.

Rendering of Services:

Income from services rendered is
recognised at a point in time based on
agreements / arrangements

with the customers when the services
are performed and there are no
unfulfilled obligations.

Dividend Income:

Dividend income is recognised when right
to receive is established (provided that it
is probable that the economic benefits will
flow to the Company and the amount of
income can be measured reliably).

k) Financial instruments

Financial instruments are recognized
when the Company becomes a party
to the contractual provisions of the
instrument and are measured initially at
fair value adjusted for transaction costs,
except for those carried at fair value
through profit or loss which are measured
initially at fair value.

If the Company determines that the fair
value at initial recognition differs from the
transaction price, the Company accounts
for that instrument at that date as follows:

® at the measurement basis mentioned
above if that fair value is evidenced
by a quoted price in an active market
for an identical asset or liability (i.e.
Level 1 input) or based on a valuation
technique that uses only data from
observable markets. The Company
recognizes the difference between
the fair value at initial recognition and
the transaction price as a gain or loss.

® in all other cases, at the measurement
basis mentioned above, adjusted
to defer the difference between the
fair value at initial recognition and
the transaction price. After initial
recognition, the Company recognizes
that deferred difference as a gain or
loss only to the extent that it arises
from a change in a factor (including
time) that market participants would
take into account when pricing the
asset or liability.

Subsequent measurement of financial
assets and financial liabilities is
described below.

Financial assets

Classification and subsequent

measurement

For the purpose of subsequent
measurement, financial assets are

classified into the following categories
upon initial recognition:

i. Financial assets at amortized cost

- a financial instrument is measured
at amortized cost if both the following
conditions are met:

® The asset is held within a
business model whose objective
is to hold assets for collecting
contractual cash flows, and

® Contractual terms of the asset
give rise on specified dates
to cash flows that are solely
payments of principal and
interest (SPPI) on the principal
amount outstanding.

After initial measurement, such
financial assets are subsequently
measured at amortized cost using the
effective interest method.

ii. Investments in equity instruments
of subsidiaries, associates and
joint venture - Investments in equity
instruments of subsidiaries, associates
and joint venture are accounted for at
cost less accumulated impairment in
accordance with Ind AS 27 Separate
Financial statements.

iii. Financial assets at fair value

® Investments in equity
instruments other than above

- All equity investments in scope
of Ind AS 109 are measured at fair
value. Equity instruments which
are held for trading are generally
classified as at fair value through
profit and loss (FVTPL). For all
other equity instruments, the
Company decides to classify
the same either as at fair value
through other comprehensive
income (FVOCI) or fair value
through profit and loss (FVTPL).

Equity instruments included
within the FVTPL category are
measured at fair value with
all changes recognized in the
Statement of Profit and Loss.

® Derivative assets - All derivative
assets are measured at fair value
through profit and loss (FVTPL).

De-recognition of financial assets

A financial asset is primarily de¬
recognised when the contractual
rights to receive cash flows from assets
have expired or the Company has
transferred its rights to receive cash
flows from the asset. Any gain or loss
arising on derecognition is recognised
in profit or loss. When a financial asset
is derecognized, the cumulative gain
or loss in equity is transferred to the
statement of profit and loss.

Financial liabilities
Subsequent measurement

After initial recognition, the financial
liabilities, other than derivative liabilities,
are subsequently measured at amortized
cost using the effective interest method.

Amortized cost is calculated by considering
any discount or premium on acquisition
and fees or costs that are an integral part
of the EIR. The effect of EIR amortization is
included as finance costs in the Statement
of Profit and Loss.

Derivative liabilities - All derivative liabilities
are measured at fair value through profit
and loss (FVTPL).

De-recognition of financial liabilities

The Company de-recognises financial
liabilities when and only when, the Company
obligations are discharged, cancelled or
they expire. Any gain or loss arising on
derecognition is recognised in profit or loss.
When a financial liability is derecognized, the
cumulative gain or loss in equity is transferred
to the statement of profit and loss.

Offsetting of financial instruments

Financial assets and financial liabilities
are offset and the net amount is

reported in the balance sheet if there
is a currently enforceable legal right to
offset the recognized amounts and there
is an intention to settle on a net basis, to
realise the assets and settle the liabilities
simultaneously.

Impairment of financial assets

® The Company applies expected credit
loss ('ECL') model for measurement
and recognition of impairment loss for
financial assets. ECL is the weighted
average of difference between all
contractual cash flows that are due
to the company in accordance with
the contract and all the cash flows
that the company expects to receive,
discounted at the original effective
interest rate, with the respective risks
of default occurring as the weights.

In case of trade receivables, the Company
follows a simplified approach wherein an
amount equal to lifetime ECL is measured
and recognised as loss allowance. The
Company computes ECL based on a
provision matrix.

® Other financial assets:

In respect of its other financial assets,
the Company assesses if the credit
risk on those financial assets has
increased significantly since initial
recognition. If the credit risk has not
increased significantly since initial
recognition, the Company measures
the loss allowance at an amount
equal to 12-month expected credit
losses, else at an amount equal to the
lifetime expected credit losses.

When making this assessment, the
Company uses the change in the
risk of a default occurring over the
expected life of the financial asset. To
make that assessment, the Company
compares the risk of a default
occurring on the financial asset as
at the balance sheet date with the
risk of a default occurring on the
financial asset as at the date of initial
recognition and considers reasonable
and supportable information, that
is available without undue cost or
effort, that is indicative of significant

increases in credit risk since initial
recognition. The Company assumes
that the credit risk on a financial asset
has not increased significantly since
initial recognition if the financial asset
is determined to have low credit risk
at the balance sheet date.

l) Hedge accounting

Initial and subsequent measurement

The Company uses derivative financial
instruments, such as forward contracts to
hedge its foreign currency risks and non¬
derivative financial liabilities to hedge its
foreign currency risks. Such derivative
financial instruments are initially
recognized at fair value on the date on
which a derivative contract is entered into
and are subsequently re-measured at fair
value. Derivatives are carried as financial
assets when the fair value is positive and
as financial liabilities when the fair value
is negative. Foreign currency risk of non¬
derivative financial liabilities used for
hedging is measured using spot rates.

At the inception of a hedge relationship,
the Company formally designates and
documents the hedge relationship to
which the Company wishes to apply hedge
accounting and the risk management
objective and strategy for undertaking the
hedge. The documentation includes the
Company's risk management objective
and strategy for undertaking hedge,
the hedging/ economic relationship, the
hedged item or transaction, the nature
of the risk being hedged, hedge ratio and
how the entity will assess the effectiveness
of changes in the hedging instrument's fair
value in offsetting the exposure to changes
in the hedged item's cash flows attributable
to the hedged risk. Such hedges are
expected to be highly effective in achieving
offsetting changes in cash flows and are
assessed on an ongoing basis to determine
that they continue to be highly effective
throughout the financial reporting periods
for which they are designated.

Any gains or losses arising from changes
in the fair value of derivatives and change
in foreign currency risk component of
non-derivative financial liabilities are
taken directly to profit or loss, except

for the effective portion of cash flow
hedges, which is recognized in Other
Comprehensive Income ("OCI") and later
reclassified to profit or loss when the
hedged item affects profit or loss. For the
purpose of hedge accounting, hedges
are classified as cash flow hedges where
Company hedges its exposure to variability
in cash flows that is attributable to foreign
currency risk associated with recognized
liabilities in the financial statements.

When hedge accounting is applied:

® for fair value hedges of recognised
assets and liabilities, changes in fair
value of the hedged assets and
liabilities attributable to the risk
being hedged, are recognised in the
standalone statement of profit and
loss and compensate for the effective
portion of symmetrical changes in the
fair value of the derivatives.

® for cash flow hedges, the effective
portion of the change in the fair value
of the derivative is recognised directly
in other comprehensive income and
the ineffective portion is recognised
in the standalone statement of profit
and loss. If the cash flow hedge of
a firm commitment or forecasted
transaction results in the recognition
of a non-financial asset or liability,
then, at the time the asset or liability
is recognised, the associated gains
or losses on the derivative that
had previously been recognised
in equity are included in the initial
measurement of the asset or liability.
For hedges that do not result in the
recognition of a non-financial asset or
a liability, amounts deferred in equity
are recognised in the statement of
profit and loss in the same period in
which the hedged item affects the
statement of profit and loss.

In cases where hedge accounting is
not applied, changes in the fair value
of derivatives are recognised in the
standalone statement of profit and loss as
and when they arise.

Hedge accounting is discontinued when
the hedging instrument expires or is sold,
terminated, or exercised, or no longer

period in which they occur. The re¬
measurements of the net defined benefit
liability are recognized directly in the
other comprehensive income in the
period in which they arise. Gratuity fund
is administered through Life Insurance
Corporation of India.

Other Employee Benefits

Compensated absences which are allowed
to be carried forward over a period in
excess of 12 months after the end of the
period in which the employee renders the
related service are recognized as a liability
at the present value of the defined benefit
obligation as at the balance sheet date
out of which the obligations are expected
to be settled with actuarial valuations
being carried out at each balance sheet
date. Remeasurements, comprising
actuarial gains and losses are recognized
immediately in the balance sheet with a
corresponding debit or credit to Statement
of profit and loss in the period in which they
occur. The obligation is measured on the
basis of independent actuarial valuation
using the projected unit credit method.

Other short-term benefits

Expense in respect of other short-term
benefits is recognized on the basis of amount
paid or payable for the period during which
services are rendered by the employees.