1.3 SUMMARY OF MATERIAL ACCOUNTING POLICIES

a. Key accounting estimates and judgments

The preparation and presentation of financial statements in conformity with Ind AS requires
management to make judgments, estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent liabilities on the date of the financial statements and
reported amounts of revenues and expenses during the period.

Although these estimates are based on the management's best knowledge of current events and
actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a
material adjustment to the carrying amounts of assets or liabilities in future periods. Accounting
estimates could change from period to period. Any revision to accounting estimates is recognized
prospectively in the current and future periods, and if material, their effects are disclosed in the
financial statements. Actual results could differ from the estimates. Any difference between the actual
results and estimates are recognized in the period in which the results are known/materialize.

Information about critical judgments in applying accounting policies, as well as estimates and
assumptions that have the most significant effect to the carrying amounts of assets and liabilities
within the next financial year, are included in the following notes:

I. Measurement of defined benefit obligations

II. Measurement and likelihood of occurrence of contingencies

III. Recognition of deferred tax assets

b. Inventories

Inventories are valued at lower of cost and net realizable value (except as otherwise stated) on an
item-by-item basis, as under:

Raw materials, packing materials, stores and spares: Cost of inventory comprises all costs of
purchase, duties and taxes (other than those subsequently recoverable from tax authorities) and all
other costs incurred in bringing the inventories to their present location and condition. Raw materials
and other items held for use in the production of inventories are not written down below cost if the
finished products in which they will be incorporated are expected to be sold at or above cost. Cost is
determined on a first-in first-out formula.

Work-in-progress and finished goods: Cost includes direct materials and costs of conversion in the
form of labour and a systematic allocation of fixed and variable production overheads. It also includes
other costs which are incurred in bringing the inventories to their present location and condition. The
allocation of fixed production overheads is based on normal capacity of production. Cost is determined
on first-in first-out formula. The expected scrap value is deducted from the cost to arrive at the net
cost of inventories. However, cost of inventories neither includes abnormal amounts of wasted
material nor any scrap realizations there from.

By products and scrap are recognized at their net realizable value.

Stock-in-trade: Cost includes cost of purchases, duties and taxes (other than those subsequently
recoverable from authorities) and other costs which are incurred in bringing the inventories to their
present location and condition. Cost is determined on a first-in first-out formula.

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

Cost of agricultural produce is deemed to be the fair value on the date of rise.

Cost of finished goods and work-in-progress include cost of conversion and other costs incurred in
bringing the inventories to their present location and condition.

c. Taxes

Current income tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from or
paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that
are enacted or substantively enacted at the reporting date.

Current income tax relating to items recognized directly in equity is recognized in equity and not in the
statement of profit and loss. Management periodically evaluates positions taken in the tax returns with
respect to situations in which applicable tax regulations are subject to interpretation and establishes
provisions where appropriate.

Deferred tax

The tax expenses for the period comprise of current tax and deferred tax. The Company exercises
judgment in computation of current tax considering the relevant rulings and reassesses the carrying
amount of deferred tax assets at the end of each reporting period

d. Property, plant and equipment

Property, plant and equipment are stated at historical cost less accumulated depreciation and
impairment losses, if any. Cost comprises of purchase price net of trade discounts and rebates, non¬
refundable duties and taxes, any directly attributable cost of bringing the asset to its working
condition for its intended use. Cost also includes borrowing cost directly attributable to acquisition /
construction of a qualifying asset up to the date the asset is ready for its intended use. Subsequent
expenditure on fixed assets is capitalized only if such expenditure results into an increase in the future
benefits from such asset beyond its previously assessed standard of performance.

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

Capital work-in-progress comprises the cost of property, plant and equipment that are yet not ready
for their intended use at the balance sheet date. The depreciable amount of a depreciable fixed asset is
allocated on a systematic basis to each accounting period over the useful life of the asset.
Management's estimate of useful life, which is duly supported by technical evidence, is as stipulated in
Schedule II to the Companies Act, 2013. The useful life is for the whole of the asset, except where cost
of a part of the asset is significant to total cost of the asset and useful life of that part is different from
the useful life of the remaining asset, useful life of that significant part (“component”) is determined
separately and the depreciable amount of the said component is allocated on a systematic basis to each
accounting period during the useful life of the asset.

In arriving at the depreciable amount, residual value in case of certain assets are considered to be
more than 5% of the original cost, this estimate of residual value is duly supported by technical advice.
Depreciation on assets acquired during the year is calculated on a pro-rata basis from the date of
addition. Similarly, depreciation on assets sold, discarded, demolished or destroyed during the year is
also calculated on a pro rata basis up to the date on which such asset has been sold, discarded,
demolished or destroyed. Depreciable assets costing up to Rupees 1,000/- are depreciated fully in the
year of acquisition The residual values, useful lives and methods of depreciation of property, plant and
equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

e. Leases

IND-AS 116 “Leases” is mandatory for the accounting period commencing on and from 1st April 2019,
and has replaced the existing IND-AS 17 relating to leases. We have applied the modified retrospective
approach, for which no significant adjustments were required to be made to the retained earnings as
at 1st April 2019. However, no material lease has been recognized for the year ending March 31, 2025.

f. Employee benefits

Short term employee benefits

All employee benefits which fall due wholly within twelve months after the end of the period in which
employee renders the related service are classified as short-term employee benefits. Undiscounted
value of short term benefits such as salaries, wages, bonus and ex-gratia are recognized in the period
in which the employee renders the related service.

Defined Contribution Plans:

The Company's Employee's Provident Fund scheme, Employee's State Insurance Scheme and
Employee's Superannuation Scheme are defined contribution plans. The Company's contribution
payable under the schemes is recognized as an expense in the statement of profit and loss during the
period in which the employee renders the related service.

Defined benefit plan Gratuity

The Company operates a defined benefit gratuity plan, which requires contributions to be made to a
separately administered fund. The defined benefit plan surplus or deficit on the balance sheet
comprises the total for each of the fair value of plan assets less the present value of the defined
liabilities. The cost of providing benefits under the defined benefit plan is determined based on
independent actuarial valuation using the projected unit credit method. The gratuity liability 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 plan, is based on the market
yield on government securities as at the balance sheet date.

Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding
amounts included in net interest on the net defined benefit liability and the return on plan assets
(excluding amounts included in net interest on the net defined benefit liability), are recognized
immediately in the balance sheet with a corresponding debit or credit to retained earnings through
OCI in the period in which they occur. Re-measurements are not reclassified to profit or loss in
subsequent periods.

Past service costs are recognized in profit or loss on the earlier of:

The date of the plan amendment or curtailment, and

The date that the Group recognizes related restructuring cost

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset.

The Company recognizes the following changes in the net defined benefit obligation as an expense in
the statement of profit and loss: Service costs comprising current service costs, past-service costs,
gains and losses on curtailments and non-routine settlements; and Net interest expense or income

As per Actuarial Valuations as on 31st March, 2025 and recognised in the financial statements in
respect of Employee Benefit Schemes: The liabilities arising in the Defined Benefit Schemes are
determined in accordance with the advice of independent, professionally qualified actuaries, using the
projected unit credit method as at year end.

g. Earnings Per Share

Earnings per share (EPS) is calculated by dividing the net profit for the year attributable to the equity
shareholders by weighted average number of equity shares outstanding during the year. For the
purpose of calculating diluted earnings per share, the net profit for the period attributable to equity
shareholders and weighted average number of shares outstanding during the period is adjusted for
the effects of all diluted potential equity shares.

h. 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 units (CGU) fair value less costs of disposal and its value in use. Recoverable
amount is determined for an individual asset, unless the asset does not generate cash inflows that are
largely independent of those from other assets or groups of assets. When the carrying amount of an
asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to
its recoverable amount.

In assessing value in use, the estimated future cash flows are 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. In determining fair value less costs of disposal, recent market transactions are
taken into account. If no such transactions can be identified, an appropriate valuation model is used.
These calculations are corroborated by valuation multiples or other available fair value indicators. No
such asset was impaired during the reporting period.