Accounting Policies of Dhanlaxmi Crop Science Ltd. Company

Mar 31, 2025

1(A) COMPANY INFORMATION

DHANLAXMI CROP SCIENCE LIMITED (''the Company'') is a company domiciled in India having CIN: U24120GJ2005PLC047153 and incorporated on 28th November, 2005. The registered office of the company is located at Survey No. 24, opp. Arts & Commerce college, Shamlaji highway, N.H. No. 8, Motipura, Sabar kantha, Himatnagar - 383001. The company is engaged in the business of manufacturing as well as processing of agriculture seeds. On 16th December,2024 the equity shares of the Company have been listed on the SME Platform of National Stock Exchange of India Limited.

1(B) SIGNIFICANT ACCOUNTING POLICIES

i) Basis of Preparation

i) These financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India (''Indian GAAP'') to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, as applicable. The financial statements have been prepared under the historical cost convention on accrual basis, except for certain financial instruments which are measured at fair value.

ii) The financial statements have been prepared on the assumption that the Company is a going concern and will continue its operations for the foreseeable future.

iii) The financial statements are presented in Indian Rupee (?) which is the functional currency of the Company. All amounts are rounded to two decimal places to the nearest Lakhs, unless otherwise stated."

ii) Use of estimates

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expense during the year. Examples of such estimates include provisions for doubtful receivables, provision for income taxes, the useful lives of depreciable Property, Plant and Equipment and provision for impairment. Future results could differ due to changes in these estimates and the difference between the actual result and the estimates are recognised in the period in which the results are known / materialise.

iii) Property, Plant and Equipment (including Capital Work-in-Progress)

The cost of an item of property, plant and equipment shall be recognized as an asset if, and only if 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.

Property, Plant and Equipment are stated at cost of acquisition or construction, less accumulated depreciation / amortisation. Costs include all expenses incurred to bring the asset to its present location and condition.

Capital Work-in-Progress represents Property, plant and equipment that are not ready for their intended use as at the reporting date."

iv) Depreciation / amortisation

In respect of Property, Plant and Equipment (other than freehold land and capital work-in-progress) acquired during the year, depreciation/amortisation is charged on a straight line basis so as to write-off the cost of the assets over the useful lives.

The management''s estimate of useful lives is in accordance with Schedule II to the Companies Act, 2013 are as follows:

Type of Assets	Period
Buildings	30 Years
Plant and Equipment	15 Years
Furniture and Fixtures	10 Years
Vehicles	8 Years
Office equipment	5 Years
Computers	3 Years
Licences and Franchise	5 Years

v) Leases

Assets taken on lease by the Company in its capacity as lessee, where the Company has substantially all the risks and rewards of ownership are classified as finance lease. Such a lease is capitalised at the inception of the lease at lower of the fair value or the present value of the minimum lease payments and a liability is recognised for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year.

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor, are recognised as operating leases. Lease rentals under operating leases are recognised in the statement of profit and loss on a straight-line basis.

vi) Impairment

At the end of each reporting period, the management reviews the carrying amounts of its assets included in each cash generating unit to determine whether there is any indication that those assets were impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment. Recoverable amount is the higher of an asset''s net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset. Reversal of impairment loss is recognised as income in the statement of profit and loss.

vii) Investments

Long-term investments and current maturities of long-term investments are stated at cost, less provision for other than temporary diminution in value. Current investments, except for current maturities of long-term investments, comprising investments in mutual funds, government securities and bonds are stated at the lower of cost and fair value.

viii) Revenue recognition

Revenue from the sale of products is recognized when the Company satisfies a performance obligation in accordance with the provisions of the contract with the customer. This is achieved when control of the product has been transferred to the customer, which is generally determined when title, ownership, risk of obsolescence and loss pass to the customer and the Company has the present right to payment. Revenue is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discount and volume rebates, and goods and service tax.

Dividend is recorded when the right to receive payment is established. Interest income is recognised on time proportion basis taking into account the amount outstanding and the rate applicable.

Rent on immovable properties is recognised on accrual basis as per the agreement with the party.

ix) Taxation

Current income tax expense comprises taxes on income from operations in India and in foreign jurisdictions. Income taxpayable in India is determined in accordance with the provisions of the Income Tax Act, 1961. Tax expense relating to foreign operations is determined in accordance with tax laws applicable in countries where

such operations are domiciled.

Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax after the tax holiday period. Accordingly, MAT is recognised as an asset in the balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with it will fructify.

Deferred tax expense or benefit is recognised on timing differences being the difference between taxable income and accounting income that originate in one period and is likely to reverse in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

The Company offsets deferred tax assets and deferred tax liabilities if it has a legally enforceable right and these relate to taxes on income levied by the same governing taxation laws.

x) Foreign currency transactions

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign currency monetary assets and liabilities other than net investments in non-integral foreign operations are translated at the exchange rate prevailing on the balance sheet date and exchange gains and losses are recognised in the statement of profit and loss. Exchange difference arising on a monetary item that, in substance, forms part of an enterprise''s net investments in a non-integral foreign operation are accumulated in a foreign currency translation reserve.

xi) Inventories

Inventories consist of raw materials, packing materials, and finished goods. Inventories are valued at lower of cost and net realizable value (NRV). 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 sales.

Cost is determined on Standard cost basis.

Cost of raw materials and packing materials includes cost of purchases and other costs incurred in bringing the inventories to their present location and condition. Cost finished goods includes direct materials, labor and proportion of manufacturing overheads based on the normal operating capacity, wherever applicable. The cost of finished goods includes other costs incurred in bringing the inventories to their present location and condition."

xii) Provisions, Contingent liabilities and Contingent assets

A provision is recognised when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions (excluding retirement benefits and compensated absences) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised in the financial statements. A contingent asset is neither recognised nor disclosed in the financial statements.

xiii) Cash and cash equivalents

The Company considers 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 twelve months or less from the date of purchase, to be cash equivalents.

xiv) Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the period.

xv) Employee Benefits

a) Short-term benefits

Short-term benefit obligations are measured on an undiscounted basis and are expensed as the related

service is provided. A liability is recognized 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

The Company makes defined contributions to the Government Employee Provident Fund, which is recognized in the Statement of Profit and Loss, on an accrual basis. The Company recognizes contribution payable to the provident fund scheme as an expense when an employee renders the related service. The Company has no obligation other than the contribution payable to the provident fund.

c) Defined benefit plans

The Company''s liabilities under The Payment of Gratuity Act, 1972 are determined on the basis of actuarial valuation made at the end of each financial year using the projected unit credit method.

The Gratuity obligation is unfunded. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government bonds, where the terms of the Government bonds are consistent with the estimated terms of the defined benefit obligation.

The net interest cost is calculated by applying the discount rate to the defined benefit obligation. This cost is included in the ''Employee benefits expense'' in the Statement of Profit and Loss.

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Mar 31, 2024

2.1 Significant Accounting Policies
A. Financial instruments

Financial assets and liabilities are recognised when the Company becomes a party to the contractual
provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction
costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other
than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from
the fair value measured on initial recognition of financial asset or financial liability.

Cash & Cash Equivalents

The Company considers all highly liquid financial instruments, which are readily convertible into known
amounts 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, to be cash equivalents. Cash and cash equivalents consist
of balances with banks which are unrestricted for withdrawal and usage.

Financial assets at amortised cost

Financial assets are subsequently measured at amortised cost if these financial assets are held within a
business whose objective is to hold these assets to collect contractual cash flows and the contractual terms
of the financial assets give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.

Financial assets at fair value through other comprehensive income

Financial assets are measured at fair value through other comprehensive income if these financial assets
are held within a business whose objective is achieved by both collecting contractual cash flows on
specified dates that are solely payments of principal and interest on the principal amount outstanding and
selling financial assets.

Financial assets at fair value through profit or loss

Financial assets are measured at fair value through profit or loss unless they are measured at amortised
cost or at fair value through other comprehensive income on initial recognition.

The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value
through profit or loss are immediately recognised in statement of profit and loss.

The Company has made an election to present subsequent changes in the fair value of equity investments
as other income in the statement of profit and loss.

Financial liabilities

Financial liabilities are measured at amortised cost using the effective interest method.

Equity instruments

An equity instrument is a contract that evidences residual interest in the assets of the Company after
deducting all of its liabilities. Equity instruments recognised by the Company are recognised at the proceeds
received net off direct issue cost.

Derecognisation of financial instruments

The Company derecognises a financial asset when the contractual rights to the cash flows from the asset
expire or when it transfers the financial asset and substantially all the risk and rewards of ownership of the
asset to another party. On derecognition of a financial asset, the difference between assets carrying amount
and the sum of consideration received or receivable or the cumulative gain or loss that had been recognised
in the statement of profit and loss.

The Company derecognises financial liabilities when and only when the Company''s obligations are
discharged, cancelled or have expired. The difference between the carrying amount of the financial liability
derecognised and the consideration paid and payable is recognised in the statement of profit and loss.

Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when
and only when, the Company currently has a legally enforceable right to set off the amounts and it intends
either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

D) Impairment

'' Financial assets (other than at fair value)

The Company assesses at each date of balance sheet whether a financial asset or a group of financial
assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. In
determining the allowances for doubtful trade receivables, the Company has computed the expected credit
loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account
historical credit loss experience and is adjusted for forward looking information. The expected credit loss
allowance is based on the ageing of the receivables that are due and rates used in the provision matrix. For
all other financial assets, expected credit losses are measured at an amount equal to the 12-months
expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the
financial asset has increased significantly since initial recognition.

Non-financial assets

Tangible and intangible assets

Property, plant and equipment and intangible assets with finite life are evaluated for recoverability whenever
there is any indication that their carrying amounts may not be recoverable. If any such indication exists, the
recoverable amount (i.e. higher of the fair value less cost to sell and the value-in-use) is determined on an
individual asset basis unless the asset does not generate cash flows that are largely independent of those
from other assets. In such cases, the recoverable amount is determined for the cash generating unit (CGU)
to which the asset belongs.

If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying
amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised in the
statement of profit and loss.

E. Property, Plant And Equipment / Depreciation

(i) Recognition And Measurement

Items of property, plant and equipment are measured at cost, less accumulated depreciation, and
accumulated impairment losses, if any.

Cost of an item of property, plant and equipment comprises its purchase price, including import duties and
non- refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost
of bringing the item to its working condition for its intended use and estimated costs of dismantling and
removing the item and restoring the site on which it is located.

The cost of a self-constructed item of property, plant and equipment comprises the cost of materials and
direct labour, and other costs directly attributable to bringing the item to working condition for its intended
use, and estimated costs of dismantling and removing the item and restoring the site on which it is located.

If significant parts of an item of property, plant and equipment have different useful lives, then they are
accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognised in statement of profit
or loss.

Capital work-in-progress:-Projects under which Property, plant and equipment are not yet ready for their
intended use are carried at cost, comprising direct cost, related incidental expenses and attributable
interest.

(ii) Subsequent expenditure

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with
the expenditure will flow to the Company.

(iii) Expenditure during construction period

Expenditure/Income during construction period (including financing cost related to borrowed funds for
construction or acquisition of qualifying PPE) is included under capital work-in-progress, and the same is
allocated to the respective PPE on the completion of their construction. Advances given towards acquisition
or construction of PPE outstanding at each reporting date are disclosed as capital advances under “other
non-current assets”.

(iv) Depreciation

Depreciation is provided on the straight-line method as per the useful life prescribed in Schedule II to the
2013 Act except in respect of following categories of assets in whose case the life of certain assets has been
assessed based on technical advice taking into account the nature of the asset, the estimated usage of the
asset, the operating condition of the asset, past history of replacement, maintenance support etc.

The Company reviews the residual value, useful lives and depreciation method annually and, if current
estimates differ from previous estimates, the change is accounted for as a change in accounting estimate on
a prospective basis.

The estimated useful lives, residual values and depreciation method are reviewed at the end of each
reporting period, with the effect of any changes in estimate accounted for on a prospective basis. Assets
costing Rs.5,000 and below are depreciated over a period of one year.

Land is not depreciated.

An item of property, plant and equipment is derecognized upon disposal or when no future economic
benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or
retirement of an item of property, plant and equipment is determined as the difference between the sales
proceeds and the carrying amount of the asset and is recognised in profit or loss.

Land : Ind AS 101 allows entity to elect to measure Property, Plant and Equipment on the transition date at
its fair value or previous GAAP carrying value (book value) as deemed cost. The company has elected to
measure land at fair value and use these fair value as deemed cost on the date of transition. As a result, the
value of land has increased Rs. 10298562.00

F. Intangible assets

(i) Recognition and measurement

Intangible assets including those acquired by the Company are initially measured at cost. Such intangible
assets are subsequently measured at cost less accumulated amortisation and any accumulated
impairment losses.

(ii) Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the
specific asset to which it relates. All other expenditures are recognised standalone statement in profit or
loss as incurred.

(iii) Amortisation

Amortisation is calculated to write off the cost of intangible assets less their estimated residual values over
the estimated useful lives using the straight-line method, and is included in depreciation and amortisation in
statement of profit and loss.

G. Inventories

Inventories are measured at the lower of cost and net realisable value. The cost of raw materials are
computed basis the moving average cost, and includes expenditure incurred in acquiring the inventories,
production or conversion costs and other costs incurred in bringing them to their present location and
condition. In the case of finished products and work-in-progress, costs includes an appropriate share of
fixed production overheads based on normal operating capacity.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated
selling expenses.

The net realisable value of work-in-progress is determined with reference to the selling price of related
finished goods. Raw materials, components and other supplies held for use in production of finished goods
are not written down below cost except in cases where material prices have declined and it is estimated that
the cost of the finished products will exceed their net realizable value.

The comparison of cost and net realisable value is made on an item-by-item basis.

H Employee benefits

i) Short term employee benefits :

Employee Benefits such as salaries, allowances, and non-monetary benefits which fall due for payment
within a period of twelve months after rendering of services are charged as expense to the profit and loss
account in the period in which the service is rendered.

ii) Post- employment benefits :

No provision has been made towards retirement benefits as in the opinion of the board; none of the
employees are eligible for the same.