Accounting Policies of Madhusudan Masala Ltd. Company

Mar 31, 2025

2 SIGNIFICANT ACCOUNTING POLICIES
a Basis of Preparation

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the
historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards as prescribed under Section 133
of The Companies Act, 2013 ("the Act") read with Rule 7 of The Companies (Accounts) Rules, 2014, the provisions of the Act. The
accounting policies adopted in the preparation of financial statements have been consistently applied. All assets and liabilities have
been classified as current or non-current as per the company''s normal operating cycle and other criteria set out in the Schedule III
to The Companies Act, 2013. Based on the nature of operations and time difference between the provision of services and
realization of cash and cash equivalents, the company has ascertained its operating cycle as 12 months for the purpose of
current and non-current classification of assets and liabilities.

The financial statements are presented in Indian Rupees (INR) and are rounded off to the nearest lakhs, except share and per
share data, which is not rounded off. Due to rounding off, the numbers presented throughout the document may not add up
precisely to the totals and percentages may not precisely reflect the absolute figures.

b Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires judgments, estimates and assumptions to be made
that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements
and the reported amount of revenues and expenses during the reporting period. Difference between the actual
results and estimates are recognized in the period in which the results are known / materialized.

c Cash Flow Statement

Cash flows are reported using indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash
nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from regular revenue generating,
financing and investing activities of the Company is segregated.

d Property, Plant and Equipment

Items of Property, plant and equipment are measured at its cost less any accumulated depreciation and any accumulated
impairment losses. The cost comprises its purchase price including import duties and non- refundable purchase taxes after
deducting trade discounts and rebates and any cost directly attributable to bringing the assets to its working condition for its
intended use.

Subsequent expenditures related to an item of tangible asset are added to its book value only if they increase the future
economic benefits from the existing asset beyond its previously assessed standard of performance.

Capital assets (including expenditure incurred during the construction period) under erection / installation are stated in the
Balance Sheet as "Capital Work in Progress."

e Intangible assets

Intangible assets are carried at cost less accumulated amortization and impairment losses, if any. The company has capitalized all
costs relating to acquisition and installation of intangible assets.

f Depreciation and amortization

Depreciation on Property, Plant and Equipment is provided to the extent of depreciable amount on the written down value
method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act 2013, which
is given in the table below.

The Intangible assets are amortized using straight line method over their estimated useful lives, which is given below. The
estimated useful life is reviewed annually by the management.

Depreciation is not recorded on capital work-in progress until construction and installation is completed and the asset is for
intended use.

g Impairment of assets

Assessment for impairment is done at each Balance Sheet date as to whether there is any indication that a non-financial asset,
other than inventory and deferred tax, may be impaired. For the purpose of assessing impairment, the smallest identifiable group
of assets that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or
groups of assets is considered as a cash generating unit.

If any indication of impairment exists, an estimate of the recoverable amount of the individual asset/cash generating unit is
made. Asset/cash generating unit whose carrying value exceeds their recoverable amount are written down to the recoverable
amount by recognising the impairment loss as an expense in the statement of profit and loss.

h Leases

Leases are classified into Finance Lease and Operating Lease at the inception of lease and accounted for accordingly. Leases where
substantially all the risks and rewards of ownership are transferred to the lessee, even though legal ownership may not be
transferred are identified as Finance Leases. All other leases i.e. Leases where the lessor retains the risks and rewards of
ownership are considered as Operating Leases. The Company is primarily a Lessee.

Under a finance lease, the leased asset and a corresponding liability are recognised at the present value of the minimum lease
payments. Under an operating lease, the lease payments other than refundable deposits are recognised as an expense over the
lease term.

i Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is arrived at by applying weighted average method. Costs
comprise direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the
inventories to their present location and condition. Net realisable value is the price at which the inventories can be realised in the
normal course of business after allowing for the cost of conversion from their existing state to a finished condition.

j Cash and cash equivalents

Cash and cash equivalents comprise cash and cash on deposit with banks. The Company considers all highly liquid investments with
a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to
be cash equivalents.

k Revenue recognition

Revenue from sale of goods is recognized when all the significant risks and rewards of ownership in the goods are transferred to
the buyer as per the terms of the contract, the Company retains no effective control of the goods transferred to a degree usually
associated with ownership and no significant uncertainty exists regarding the amount of the consideration that will be derived
from the sale of goods. Sales are recognized net of trade discounts, rebates and Goods and Service Tax.

Revenue from rendering of services is recognised when the performance of agreed contractual task has been completed.

Interest income is recognised on accrual basis on the Bank Deposit balance outstanding as at end of financial year.

l Employee Benefits

Post-employment benefit plans

(i) Defined Contribution Plan are post-employment benefit plans under which an enterprise pays fixed contributions into a separate
entity (a fund) and will have no obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee
benefits relating to employee service in the current and prior periods. The Company contributes to the Provident Fund of the
employees operated by the Regional Provident Fund Commissioner, which qualifies to be a defined contribution plan.

(ii) Defined Benefit Plan are post-employment benefit plans other than defined contribution plans. Gratuity (defined befit plan) :
The Company provides for Gratuity, covering eligible employees under Company Gratuity Scheme. On reporting date, liabilities
with respect to gratuity plan as determined by an independent actuarial valuation and actuarial gains/losses are charged to the
Statement of Profit and Loss Account. The Company has obtained an insurance policy to cover the Gratuity Liabilities of the
Company.

Other employee benefits

Short-term Employees Benefits: All employee benefits payable within twelve months of rendering the service are classified as short¬
term benefits. Such benefits include salaries, wages, bonus, short term compensated absences, awards, ex-gratia, performance pay
etc. in the period in which the employee renders the related service. A liability is recognized for the amount expected to be paid
when there is a present obligation to pay this amount as a result of past service provided by the employee and the obligation can
be estimated reliably.

m Foreign currency transactions

The transactions in foreign currency are recorded at the rate of exchange in force at the time the transactions are effected. At the
end of each reporting period, monetary items denominated in foreign currencies are translated at the closing exchange rate
prevailing at the balance sheet date. Gains / Losses arising out of fluctuations in the exchange rate at the time of settlement or
restatement, are recognized as Income / Expense in the period in which they arise.

n Taxation

The accounting treatment for the Income Tax in respect of the Company''s income is based on the Accounting Standard on
Accounting for Taxes on Income" (AS-22). The provision made for Income Tax in Accounts comprises both, the current tax and
deferred tax. Provision for Current Tax is made on the assessable Income Tax rate applicable to the relevant assessment year
after considering various deductions available under the Income Tax Act, 1961.

Deferred tax is recognized for all timing differences; being the differences between the taxable income and accounting income that
originate in one period and are capable of reversal in one or more subsequent periods. Such deferred tax is quantified using the tax
rates and laws enacted or substantively enacted as on the Balance Sheet date. The carrying amount of deferred tax asset/liability
is reviewed at each Balance Sheet date and consequential adjustments are carried out. Deferred tax assets are only recognised to
the extent that it is probable that future taxable profits will be available against which the temporary differences
can be utilised.

Minimum Alternate Tax credit is recognized as an asset only when and to the extent there is convincing evidence that the Company
will pay normal income tax during the specified period. The Company reviews the same at each balance sheet date and writes down
the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect
that the Company will pay normal Income Tax during the specified period.

o Segment accounting

The company identifies distinguishable components of the business as business segments based on the business''s internal
organization and the way they are managed. A segment is considered reportable if its revenue, segment result (profit or loss), or
total segment assets are 10% or more of the corresponding totals for all segments. If the total revenue from reportable segments
is less than 75% of the company''s overall revenue, additional segments are identified as reportable until 75% of the revenue is
covered.

The revenues and expenses are allocated to different segments either based on direct attribution or reasonable allocation based
on sales to external customers. The assets and liabilities are allocated to each segment based on factors like the segment''s direct
use of assets and liabilities, and the nature of the segment''s operations. Segment liabilities would exclude borrowings and other
liabilities incurred for financing purposes.

For secondary segmentation, the company identifies the distinguishable geographic segment that is engaged in providing an
individual product or service or a group of related product or services within a specific environment and subject to risks and
returns exclusive of other segments, primarily domestic and exports.

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Mar 31, 2024

Note: - 1 Significant accounting policies:

1.0 Corporate Information

MADHUSUDAN MASALA LIMITED is a Limited Company, incorporated under the provisions of Companies Act, 2013 and having CIN: U15400GJ2021PLC127968. The Company is mainly engaged in the business of Manufacturing and Trading of Spices and other Related Items. The Registered office of the Company is situated at F.P. No. 19, Plot No. 1-B, Hapa Road, Jamnagar-361001.

1.1 Basis of preparation of financial statements

a. Accounting Convention: -

These financial statements of the Company have been prepared in accordance with Generally Accepted Accounting Principles in India (“Indian GAAP”). Indian GAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act, 2013 (“the Act”) read with the Rule 7 of the Companies (Accounts) Rules, 2014. The financial statements have been prepared on an accrual basis and under the Historical Cost Convention. and the Companies (Accounting Standards) Amendment Rules 2016 and the relevant provisions of the Companies Act, 2013.

b. Use of Estimates and Judgments

The preparation of financial statement in conformity with accounting standard requires the Management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affects the application of accounting policies and the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of financial statement and reported amounts of revenue and expenses during the period. Accounting estimates could change form period to period. Actual result could differ from those estimates. As soon as the Management is aware of the changes, appropriate changes in estimates are made. The effects of such changes are reflected in the period in which such changes are made and, if material, their effects are disclosed in the notes to financial statement.

c. Current and Non - Current Classification

An asset or a liability is classified as Current when it satisfies any of the following criteria:

I. It is expected to be realized / settled, or is intended for sales or consumptions, in the Company''s Normal Operating Cycle;

II. It is held primarily for the purpose of being traded.

III. It is expected to be realized / due to be settled within twelve months after the end of reporting

date;

IV. The Company does not have an unconditional right to defer the settlement of the liability for at least twelve months after the reporting date.

All other assets and liabilities are classified as Non - Current.

For the purpose of Current / Non - Current classification of assets and liabilities, the Company has ascertained its operating cycle as twelve months. This is based on the nature of services and the time between the acquisition of the assets or liabilities for processing and their realization in Cash and Cash Equivalents.

1.2 Basis of Preparation

a) Presentation and Disclosure of Standalone Financial Statements

These standalone financial statements have been prepared as per “Schedule - III” notified under

the Companies Act, 2013. The Company has also reclassified / regrouped / restated the previous year figures in accordance with the requirements applicable in the current year.

b) Property, Plant & Equipment and Intangible Assets:-

i. The company has adopted Cost Model to measure the gross carrying amount of fixed assets.

ii. Tangible Fixed assets are stated at cost of acquisition less accumulated depreciation. Cost includes the purchase price and all other attributable costs incurred for bringing the asset to its working condition for intended use.

iii. Intangible assets are stated at the consideration paid for acquisition and customization thereof less accumulated amortization.

iv. Cost of fixed assets not ready for use before the balance sheet date is disclosed as Capital Work in Progress.

v. Cost of Intangible Assets not ready for use before the balance sheet date is disclosed as Intangible Assets under Development.

c) Depreciation / Amortisation : -

Depreciation has been provided under Written Down Value Method as per the useful life prescribed under schedule II of the Companies Act, 2013 on single shift and Pro Rata Basis to result in a more appropriate preparation or presentation of the financial statements.

In respect of assets added/sold during the year, pro-rata depreciation has been provided at the rates prescribed under Schedule II.

Intangible assets being Software are amortized over a period of its useful life on a straight line basis, commencing from date the assets is available to the company for its use.

d) Impairment of Assets:-

An asset is treated as impaired when the carrying cost of an asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior period is reversed if there has been a change in the estimate of the recoverable amount.

e) Investments:-

• Long term investments are stated at cost. Provision for diminution in the value of long-term investment is made only if such decline is other than temporary.

• Current investments are stated at lower of cost or market value. The determination of carrying amount of such investment is done on the basis of specific identification.

f) Government Grants and Subsidies:-

The Company is entitled to receive any subsidy from the Government authorities or any other authorities in respect of manufacturing or other facilities are dealt as follows:

• Grants in the nature of subsidies which are non - refundable are credited to the respective accounts to which the grants relate, on accrual basis, where there is reasonable assurance that the Company will comply with all the necessary conditions attached to them.

• Grants in the nature of Subsidy which are Refundable are shown as Liabilities in the Balance Sheet at the Reporting date.

g) Valuation of Inventory : -

Inventories includes mainly spices and related items which is to be valued at Lower of Cost or Net Realizable value as per FIFO Method.

Cost of inventories included the cost incurred in bringing each product to its present location and conditions are accounted. Cost included cost of direct material. Cost is determined on "First in First our basis (FIFO)".

All other inventories of stores and spares, consumables, project material at site are valued at cost. The stock of waste or scrap is valued at net realizable value.

“Net Realizable Value” is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated cost necessary to make the sales of the products.

h) Revenue Recognition :-

Revenue is recognized when it is probable that economic benefit associated with the transaction flows to the Company in ordinary course of its activities and the amount of revenue can be measured reliably, regardless of when the payment is being made. Revenue is measured at the fair value of consideration received or receivable, taking into the account contractually defined terms of payments, net of its returns, trade discounts and volume rebates allowed.

Revenue includes only the gross inflows of economic benefits, including the excise duty, received and receivable by the Company, on its own account. Amount collected on behalf of third parties such as sales tax, value added tax and goods and service tax (GST) are excluded from the Revenue.

Sale of goods is recognized at the point of dispatch of goods to customers, sales are exclusive of Sales tax, Vat, GST and Freight Charges if any. The revenue and expenditure are accounted on a going concern basis.

Interest Income is Recognized on a time proportion basis taking into account the amount outstanding and the rate applicable i.e. on the basis of matching concept..

Dividend from investments in shares / units is recognized when the company.

Other items of Income are accounted as and when the right to receive arises.

i) Borrowing Cost :-

Borrowing Cost includes the interest, commitments charges on bank borrowings, amortization of ancillary costs incurred in connection with the arrangement of borrowings.

Borrowing costs that are directly attributable to the acquisition or construction of qualifying property, plants and equipment are capitalized as a part of cost of that property, plants and equipment. The amount of borrowing costs eligible for capitalization is determined in accordance with the Accounting Standards - 16 “Borrowing Costs”. Other Borrowing Costs are recognized as expenses in the period in which they are incurred.

In accordance with the Accounting Standard - 16, exchange differences arising from foreign currency borrowings to the extent that they are regarded as adjustments to interest costs are recognized as Borrowing Costs, and are capitalized as a part of cost of such property, plants and equipment if they are directly attributable to their acquisition or charged to the Standalone Statement or Profit and Loss.

J) Related Party Disclosure:-

The Disclosures of Transaction with the related parties as defined in the related parties as defined in the Accounting Standard are given in notes of accounts.

k) Earnings Per Share :-

The Company reports the basic and diluted Earnings per Share (EPS) in accordance with Accounting Standard 20, “Earnings per Share”. Basic EPS is computed by dividing the Net Profit or Loss attributable to the Equity Shareholders for the year by the weighted average number of equity shares outstanding during the year. Diluted EPS is computed by dividing the Net Profit or Loss attributable to the Equity Shareholders for the year by the weighted average number of Equity Shares outstanding during the year as adjusted for the effects of all potential Equity Shares, except where the results are Anti - Dilutive.

The weighted average number of Equity Shares outstanding during the period is adjusted for events such a Bonus Issue, Bonus elements in right issue, share splits, and reverse share split (consolidation of shares) that have changed the number of Equity Shares outstanding, without a corresponding change in resources.

l) Taxes on Income :-

1. Current Tax: -

Provision for current tax is made after taken into consideration benefits admissible under the provisions of the Income Tax Act, 1961.

2. Deferred Taxes:-

Deferred Income Tax is provided using the liability method on all temporary difference at the balance sheet date between the tax basis of assets and liabilities and their carrying amount for financial reporting purposes.

I. Deferred Tax Assets are recognized for all deductible temporary differences to the extent that it is probable that taxable profit will be available in the future against which this items can be utilized.

II. Deferred Tax Assets and liabilities are measured at the tax rates that are expected to apply to the period when the assets is realized or the liability is settled, based on tax rates ( and the tax) that have been enacted or enacted subsequent to the balance sheet date.

m) Discontinuing Operations :-

During the year the company has not discontinued any of its operations.