Accounting Policies of Three M Paper Boards Ltd. Company

Mar 31, 2025

3 Significant Accounting Policies:

3.1 Property, Plant and Equipment:

Property, Plant and Equipment (PPE) acquired are stated at cost, net of tax/ duty credit availed and includes
amounts added on revaluation, less accumulated depreciation and impairment losses, if any. Cost include expenses
directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in
the manner intended by management. Subsequent expenditures relating to PPE is capitalized only when it is
probable that the future economic benefits associated with the item will flow to the Company and its cost can be
measured reliably. Repairs and maintenance costs are recognized in net profit in the statement of profit and loss
when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon
sale or retirement of the asset and the resultant gain or losses are recognized in the statement of profit and loss.

Capital work-in-progress comprises the cost of fixed assets that are not ready for their intended use at the reporting
date.

Intangible assets are recognized only if it is probable that the future economic benefits that are attributable to the
assets will flow to the Company and the cost of the assets can be measured reliably. The intangible assets are carried
at cost less accumulated amortization. Intangible assets are amortized over their estimated useful economic life over
a period of four years using Straight Line Method.

Leasehold land is amortized over the period of lease.

3.2 Depreciation and Amortization:

The Company depreciates its property, plant and equipment (PPE) over the useful life in the manner prescribed in
Schedule II to the Act. Management believes that useful life of assets are same as those prescribed in Schedule II to
the Act, except for plant and equipment''s wherein based on technical evaluation, useful life has been estimated to be
different from that prescribed in Schedule II of the Act.

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 property, plant and equipment is de-recognized.

3.3 Revenue Recognisation:

Revenue 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. The specific recognition criteria described below also be met before revenue is
recognised.

Sale of Goods:

Revenue from the sale of goods is recognised, when control of goods has been transferred to the customer and
where there are no longer any unfulfilled obligations. The performance obligations in contracts are considered as
fulfilled in accordance with the terms agreed with the respective customers. Revenue include transport charges,
insurance and other incidental charges charged to customers.

Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of
returns and allowances, trade discounts and volume rebates. Sales as disclosed, are exclusive of Goods and Services
Tax.

Revenue arising from sale of Wind Energy is recognised in the succeeding month of generation, when such Wind
Energy is invoiced to customer.

Export Incentives:

Income from export incentives and duty drawbacks are recognised on accrual basis when no significant
uncertainties as to the amount of consideration that would be derived and as to its ultimate collection exist.

Interest Income:

Interest income is recognized on a time proportionate method using underlying interest rates. Interest is recognized
on delayed payment by trade receivables as and when debit notes are raised by company on such trade receivables .

Divident Income:

Dividend income is recognized when the unconditional right to receive the income is established.

Insurance Claims:

Insurance claims are recognized where there exists no significant uncertainty with regard to the amount to be
realised and the ultimate collection thereof.

3.4 Inventories:

Inventories such as Raw Materials, Stock-in-Progress, Finished Goods and Stores and Spares are valued at lower of
cost or net realisable value (except scrap/waste which are valued at net realisable value) in line wih Accounting
Standard 2 (''AS-2'') "Valuation of Inventory". The cost is computed on first in first out (FIFO) basis. Finished Goods
and Process Stock include cost of conversion and other costs incurred in bringing the inventories to their present
location and condition.

3.5 Employee Benefits:

Defined Contribution plan:

Contribution to defined contribution schemes such as employees'' state insurance, labour welfare fund etc. are
charged as an expense based on the amount of contribution required to be made as and when services are rendered
by the employees. Company''s provident fund contribution, in respect of certain employees, is made to a
government administered fund and charged as an expense to the Statement of Profit and Loss. The above benefits
are classified as Defined Contribution Schemes as the Company has no further defined obligations beyond the
monthly contributions.

Defined benefit plans:

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees.
The plan provides for a lump sum payment to vested employees at retirement, death while in employment or on
termination of employment of an amount equivalent to 15 days salary payable for each completed year of service.
Vesting occurs upon completion of five years of service. The plan is managed by a trust and the fund is invested
with Life Insurance Corporation of India under its Group Gratuity Scheme. The Company makes annual
contributions to gratuity fund and the Company recognizes the liability for gratuity benefits payable in future based
on an independent actuarial valuation.

3.6 Income Taxes:

Income tax expense for the year comprises of current tax and deferred tax. It is recognised in the Statement of Profit
and Loss.

Current tax is the expected tax payable/receivable on the taxable income/ loss for the year using applicable tax
rates at the Balance Sheet date, and any adjustment to taxes in respect of previous years.

Deferred tax:

Deferred tax is provided using the balance sheet approach on temporary differences at the reporting date between
the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose at reporting date.
Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred
income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the
substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future
taxable profit will be available against which the deductible temporary differences and tax losses can be utilized.
The Company offsets current tax assets and current tax liabilities. Where it has a legally enforceable right to set off
the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the
liability simultaneously.

Deferred tax assets include Minimum Alternate Tax (MAT) paid in accordance with the tax laws in India, which is
likely to give future economic benefits in the form of availability of set off against future income tax liability. MAT is
recognised as deferred tax assets in the Balance Sheet when the asset can be measured reliably and it is probable that
the future economic benefit associated with the asset will be realised.

3.7 Operating Lease:

Lease rentals in respect of assets taken on operating lease are charged to the Profit and Loss Account on Straight line
basis over the period of lease term. The accounting for the lease has been done in accordance with the Accounting
Standard AS - 19 "Leases" notified by The Ministry of Corporate Affairs.

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Mar 31, 2024

COMPANY INFORMATION, BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES

1 Company Information:

Three M Paper Boards Limited (Formerly known as Three M Paper Boards Private Limited and Three M Paper Manufacturing Company Private Limited) is a Public limited Company incorporated on 26th July, 1989 with its registered office at Royal Industrial Estate, Office No. A, 33/34 5B Naigaon Cross Road, Wadala, Mumbai -400031 Maharashtra. The Company has been changed from Private Limited Company to Limited Company on 29th January, 2024.The Company is primarily engaged in the manufacturing of recycled paper in India and the manufacturers of grey back and white back Duplex Boards for over 30 years. The Company is also engaged in the activity of generation of Wind Energy.

2 Basis of Preparation of Financial Statements:

a) Statements of Compliance:

The Financial Statements are prepared in accordance with Generally Accepted Accounting Principles under the Historical Cost Convention on an accrual basis and on principles of going concern. Accounting Standards notified under Section 133 of the Companies Act, 2013 and the relevant provisions thereof are consistently applied by the Company.

b) Rounding of amounts:

All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the requirement of Schedule III, unless otherwise stated.

c) Use of Estimates and judgements:

The preparation of financial statements requires the management to make judgements, estimates and assumptions that afect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based upon 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 liabilties in future periods.

Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

3 Significant Accounting Policies:

3.1 Property, Plant and Equipment:

Property, Plant and Equipment (PPE) acquired are stated at cost, net of tax/duty credit availed and includes amounts added on revaluation, less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenses directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Subsequent expenditures relating to PPE is capitalized only when it is probable that future economic benefits associated with these will flow to the Company and the costs to the item can be measured reliably. Repairs and maintenance costs are recognized in net profit in the statement of profit and loss when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gain or losses are recognized in the statement of profit and loss.

Capital work-in-progress includes cost of PPE under installation / under development as at the balance sheet date. Advances paid towards the acquisition of PPE outstanding at each balance sheet date is classified as capital advances under other noncurrent assets.

Intangible assets are recognized if it is probable that the future economic benefits that are attributable to the assets will flow to the Company and cost of the assets can be measured reliably. Intangible assets are stated at cost of acquisition less accumulated amortization. Intangible assets are amortized over their estimated useful economic life over a period of four years using Straight Line Method.

Leasehold land is amortized over the period of lease.

3.2 Depreciation and Amortization:

The Company depreciates its property, plant and equipment (PPE) over the useful life in the manner prescribed in Schedule II to the Act. Management believes that useful life of assets are same as those prescribed in Schedule II to the Act, except for plant and equipment''s wherein based on technical evaluation, useful life has been estimated to be different from that prescribed in Schedule II of the Act.

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 derecognition 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 property, plant and equipment is de-recognized.

Depreciation on additions / deletions is calculated pro-rata from the month of such addition / deletion, as the case may be.

Useful life considered for calculation of depreciation for various assets class are as follows
Category of Assets	Useful Life (Years)
Building	30-60
Furniture & Fixture	10
Vehicles*	10
Windmill	19
Computers & Softwares	03
Plant & Machinery used in Mfg of Paper*	19
Plant & Machinery used in Power Generation*	19

*For these class of assets based on internal assessment and independent technical evaluation carried out by external valuers the company estimates the useful life as given above best represents the period over which Company expects to use these assets. Hence the useful life for these assets are different from the useful life as prescribed under Part C of Schedule of Companies Act, 2013

3.3 Revenue Recognisation:

Revenue 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. The specific recognition criteria described below also be met before revenue is recognised.

Sale of Goods:

Revenue from the sale of goods is recognised, when control of goods being sold is transferred to customer and where there are no longer any unfulfilled obligations. The performance obligations in contracts are considered as fulfilled in accordance with the terms agreed with the respective customers. Revenue include transport charges, insurance and other incidental charges charged to customers.

Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. Sales as disclosed, are exclusive of Goods and Services Tax.

Revenue arising from sale of Wind Energy is recognised in the succeeding month of generation, when such Wind Energy is invoiced to customer.

Export Incentives:

Income from export incentives and duty drawbacks is recognised on accrual basis when no significant uncertainties as to the amount of consideration that would be derived and as to its ultimate collection exist.

Interest Income:

Interest income is recognized on time proportion basis using the effective interest method.

Interest is recognized on delayed payment by trade receivables as and when debit notes are raised by company on such trade receivables .

Divident Income:

Dividend income is recognized when the right to receive payment is established by the reporting date, which is generally when shareholders approve the same.

3.4 Inventory Valuation:

Inventories such as Raw Materials, Work-in-Progress, Finished Goods, Stock in Trade and Stores & Spares are valued at the lower of cost or net realisable value (except scrap/waste which are value at net realisable value) in line wih Accounting Standard 2 (''AS-2'') "Valuation of Inventory". The cost is computed on first in first out (FIFO) basis. Finished Goods and Process Stock include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

3.5 Employee Benefits:

Defined Contribution plan:

The Company makes Provident Fund contributions to regulatory authorities for eligible employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions as specified under the law are paid to the provident fund authorities. The Company does not expect any shortfall in the foreseeable future.

Defined benefit plans:

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The plan is managed by a trust and the fund is invested with Life Insurance Corporation of India under its Group Gratuity Scheme. The Company makes annual contributions to gratuity fund and the Company recognizes the liability for gratuity benefits payable in future based on an independent actuarial valuation.

3.6 Current income tax:

The income tax expense or credit for the period is the tax payable on the current period''s taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

Deferred tax:

Deferred tax resulting from “timing difference" between book and taxable profit is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date as per Accounting Standard - 22 "Accounting for Taxes on Income” notified by The Ministry of Corporate Affairs. Deferred tax assets are recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Minimum Alternate Tax:

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.

3.7 Operating Lease:

Lease rentals in respect of assets taken on operating lease are charged to the Profit and Loss Account on Straight line basis over the period of lease term. The accounting for the lease has been done in accordance with the Accounting Standard AS - 19 "Leases” notified by The Ministry of Corporate Affairs.

3.8 Provisions and Contingent Liabilities/Assets:

Provisions are recognised when the Company has a present probable obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.the amount of which can be reliably estimated which are reviewed at each Balance Sheet date. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. Contingent Liability is disclosed after careful evaluation of facts, uncertainties and possibility of reimbursement. Contingent liabilities are not recognised but are disclosed in notes.

Contingent Liability is disclosed after careful evaluation of facts, uncertainties and possibility of reimbursement. Contingent liabilities are not recognised but are disclosed in notes.

Contingent Assets are not recognised in financial statements but are disclosed, since the former treatment may result in the recognition of income that may or may not be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and its recognition is appropriate.

3.9 Purchases:

Purchase of goods is recognised on receipt into factory premises and purchases include non refundable Taxes and other incidental charges charged by suppliers and it is net of the purchase returns, discounts and quality rebates.

3.10 Foreign currency transactions and translations:

The functional currency of the Company is Indian Rupees (or INR) which is also the presentation currency for the financial statements.

a) Initial Recognition:

Transactions in foreign currency are recorded at the exchange rate prevailing on the date of the transaction. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the Statement of Profit and Loss of the year.

b) Measurement of Foreign Currency Items at the Balance Sheet Date:

Foreign currency monetary items of the Company are restated at the closing exchange rates. Non monetary items are recorded at the exchange rate prevailing on the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was 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 the fair value of the item. Exchange differences arising out of these transactions are charged to the Statement of Profit and Loss.

3.11 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 capitalised 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 and other costs 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.

3.12 Segment information:

Information about primary segment:

The Company has one reportable business segment i.e. Paper and Board and two geographical reportable segments i.e. Operations within India and exports. The performance is reviewed by the Board of Directors.