Krishival Foods Ltd. कंपली की लेखा नीति

Mar 31, 2025

2 Material accounting policies

Material accounting policies adopted by the Company are as under:

2.1 Basis of Preparation of Financial Statements

(a) Statement of Compliance with Ind AS

The Company has voluntarily adopted to prepare its Financial Statements as per the Indian Accounting Standards prescribed under Section 133 of
the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 (as amended) (''Ind AS") as amended from
time to time, other relevant provisions of the Companies Act,2013 and presentation requirements of Division II of Schedule III to the Companies
Act, 2013, (Ind AS compliant Schedule III). Accordingly, the Company has prepared these Financial Statements which comprise the Balance Sheet
as at 31 March 2025, the Statement of Profit and Loss, the Statement of Cash Flows and the Statement of Changes in Equity for the year ended 31
March 2025, and a summary of material accounting policies and other explanatory information (together hereinafter referred to as ''financial
statements'').

The financial statements have been prepared using the material accounting policies and measurement bases summarised below. These accounting
policies have been used throughout all periods presented in these financial statements, except where the Company has applied certain accounting
policies and exemptions upon transition to Ind AS.

(b) Basis of measurement

The financial statements have been prepared on a historical cost basis, except for certain financial instruments that are measured at fair values.
Classification into current and non-current:

All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle (not exceeding twelve months)
and other criteria set out in the Schedule III to the Act.

(c) Use of estimates

The preparation of financial statements in conformity with Ind AS requires the Management to make estimate and assumptions that affect the
reported amount of assets and liabilities as at the Balance Sheet date, reported amount of revenue and expenses for the year and disclosures of
contingent liabilities as at the Balance Sheet date. The estimates and assumptions used in the accompanying financial statements are based upon
the Management''s evaluation of the relevant facts and circumstances as at the date of the financial statements. Actual results could differ from
these estimates. Estimates and underlying assumptions are reviewed on a periodic basis. Revisions to accounting estimates, if any, are recognized
in the year in which the estimates are revised and in any future years affected. Refer Note 3 for detailed discussion on estimates and judgments.

2.2 Property, plant and equipment

Property, plant and equipment, are stated at cost of acquisition or construction less accumulated depreciation and impairment losses, if any.
Freehold land is carried at cost and is not depreciated. Cost of property, plant and equipment comprises its purchase price net of any discounts and
rebates, any import duties and other taxes (other than those subsequently recovered from the tax authorities), any directly attributable expenditure
on making the asset ready for its intended use, other incidental expenses, decommissioning costs, if any, and interest on borrowings attributable to
acquisition of qualifying asset up to the date the asset is ready for its intended use.

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 associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any
component accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance are charged to Statement of Profit
and Loss during the year in which they are incurred.

Property, plant and equipment''s residual values and useful lives are reviewed at each Balance Sheet date and changes, if any, are treated as
changes in accounting estimate.

Transition to Ind AS

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognized as at 1st
April, 2023 measured as per the Indian GAAP and use that carrying value as the deemed cost of the property, plant and equipment.

Depreciation methods, estimated useful lives

Based on management''s evaluation, useful life prescribed in Schedule II of the Companies Act, 2013 represent actual useful life of property, plant
and equipment. The Company uses straight-line method for building, plant and machinery and electrical installations and uses written down method
for the remaining assets and has used following useful lives to provide depreciation of different class of its property, plant and equipment:

In respect of additions or extensions forming an integral part of existing assets and insurance spares, including incremental cost arising on account
of translation of foreign currency liabilities for acquisition of Property, Plant and Equipment''s, depreciation is provided as aforesaid over the residual
life of the respective assets.

Depreciation on addition to property plant and equipment is provided on pro-rata basis from the date of acquisition. Depreciation on sale/deduction
from property plant and equipment is provided up to the date preceding the date of sale, deduction as the case may be. Gains and losses on

disposals are determined by comparing proceeds with carrying amount. These are included in Statement of Profit and Loss under ''Other Income''.

Depreciation methods, useful lives and residual values are reviewed periodically at each financial year end and adjusted prospectively, as
appropriate.

2.3 Intangible Assets

Intangible assets are recorded at the consideration paid for the acquisition of such assets and are carried at cost less accumulated amortisation and
impairment. Advances paid towards the acquisition of intangible assets outstanding at each balance sheet date are disclosed as other non-current
assets.

Intangible assets in the Company comprises of computer software which has a useful life of 3 years.

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 recognised in the Statement of Profit and Loss when the asset is derecognised.

The residual values, useful lives and methods of amortization of intangible assets are reviewed at each financial year end and adjusted

prospectively, if appropriate.

Transition to Ind AS

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its all intangible assets recognised as at 1st April,
2023measured as per the Indian GAAP and use that carrying value as the deemed cost of the intangible assets.

The Company amortized intangible assets over their estimated useful lives using the straight line method. The estimated useful lives of intangible
assets are as follows:

Intangible assets with finite lives are assessed for impairment whenever there is an indication that the intangible asset may be impaired. The
amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at each financial year end.

2.4 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 and related
incidental expenses.

2.5 Foreign Currency Transactions

(a) Functional and presentation currency

Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (''the
functional currency"). The Company''s Financial Statements are presented in Indian Rupees, which is also its functional currency and all values are
rounded to the nearest lakhs (''00,000), except when otherwise indicated.

(b) Transactions and balances

On initial recognition, all foreign currency transactions are recorded by applying to the foreign currency amount the exchange rate between the
functional currency and the foreign currency at the date of the transaction. Gains/Losses arising out of fluctuation in foreign exchange rate between
the transaction date and settlement date are recognised in the Statement of Profit and Loss.

All monetary assets and liabilities in foreign currencies are restated at the year end at the exchange rate prevailing at the year end and the
exchange differences are recognised in the 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.

2.6 Fair value measurement

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 accessible to the Company.

The 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 material to the fair value measurement as a whole:

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

- Level 2 — Inputs other than quoted prices included in Level 1 that are observable for the assets or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).

- Level 3 — Inputs for the assets or liability that are not based on observable market data (unobservable inputs).

2.7 Revenue Recognition

Revenue from Contracts with Customers

Revenue is measured at the fair value of the consideration received/ receivable, taking into account contractually defined terms of payment and
excluding taxes or duties collected on behalf of the government and is net of rebates and discounts. The Company assesses its revenue
arrangements against specific criteria to determine if it is acting as principal or agent. The Company has concluded that it is acting as a principal in
all of its revenue arrangements.

Revenue is recognised in the income statement to the extent that it is probable that the economic benefits will flow to the Company and the
revenue and costs, if applicable, can be measured reliably.

The Company has applied five step model as per Ind AS 115 ''Revenue from contracts with customers'' to recognise revenue in the standalone
financial statements. The Company satisfies a performance obligation and recognises revenue over time, if one of the following criteria is met:

a) The customer simultaneously receives and consumes the benefits provided by the Company''s performance as the Company performs; or

b) The Company''s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or

c) The Company''s performance does not create an asset with an alternative use to the Company and the entity has an enforceable right to payment
for performance completed to date.

For performance obligations where one of the above conditions are not met, revenue is recognised at the point in time at which the performance
obligation is satisfied.

Revenue is recognised either at point of time and over a period of time based on various conditions as included in the contracts with customers.

(i) Revenue from Operation

Expenses and income, not specifically referred to otherwise, are accounted for on accrual basis.

(ii) Finance Income

Interest Income is recognised on a basis of effective interest method as set out in Ind AS 109, Financial Instruments, and where no material
uncertainty as to measurability or collectability exists. Dividend income is accounted for when the right to receive it is established.

(iii) Revenue from transportation

Revenue from transportation is recognised when the transportation service is completed.

(iv) Transition Provision

The Company shall apply Ind AS 115 using one of the following two methods

(a) retrospectively to each prior reporting period presented in accordance with Ind AS 8, Accounting Policies, Changes in Accounting Estimates and
Errors, subject to the expedients; or

(b) retrospectively with the cumulative effect of initially applying this Standard recognised at the date of initial application.

2.8 Taxes

Tax expense for the year, comprising current tax and deferred tax, are included in the determination of the net profit or loss for the year.

(a) Current income tax

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax
Act, 1961. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a
net basis, or to realize the asset and settle the liability simultaneously.

(b) Deferred tax

Deferred tax is recognised on temporary differences, being differences between the carrying amount of assets and liabilities and corresponding tax
bases used in the computation of taxable profit. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as
at the reporting date. Deferred tax liabilities are recognised for all temporary differences. Deferred tax assets are generally recognised for all
deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary
differences can be utilised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax
laws and the Company has a legally enforceable right for such set off.

Deferred tax assets are reviewed at each balance sheet date for their readability.

Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in Other Comprehensive Income or
directly in equity, in which case, the current and deferred tax are also recognised in Other Comprehensive Income or directly in equity respectively.

2.9 Leases

Company as a lessee

The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at
cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any
initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on
which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using
the Company''s incremental borrowing rate. It is remeasured when there is a change in future lease payments arising from a change in an index or
rate, if there is a change in the Company''s estimate of the amount expected to be payable under a residual value guarantee, or if the Company
changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the
right-of-use asset has been reduced to zero.

The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less
and leases of low-value assets. The Company recognises the lease payments associated with these leases as an expense over the lease term.

The Company''s lease asset classes primarily consist of leases for building. The Company assesses whether a contract contains a lease, at inception
of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. 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 has 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.

At the date of commencement of the lease, the Company recognizes a right-of-use asset ("ROU") and a corresponding lease liability for all lease
arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases.

Certain lease arrangements include the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities
include these options when it is reasonably certain that they will be exercised.

2.10 Inventories

Stock in trade, work in progress, finished goods, packing materials, stores and spares are valued at lower of cost or net realizable value Cost of raw
materials, packing materials, and stores and spares is determined on a First In-First out (FIFO) basis and includes all applicable costs.

Stock-in-trade and finished goods are valued at lower of cost or net realizable value. Cost includes direct materials and direct cost incurred to bring
the stock in ready to dispatch stage as aforesaid.

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

The cost of inventories may not be recoverable if those inventories are damaged, if they have become wholly or partially obsolete, or if their selling
prices have declined. The cost of inventories may also not be recoverable if the estimated costs of completion or the estimated costs necessary to
make the sale have increased.

Estimates of net realisable value are based on the most reliable evidence available at the time the estimates are made as to the amount the
inventories are expected to realise. These estimates take into consideration fluctuations of price or cost directly relating to events occurring after
the balance sheet date to the extent that such events confirm the conditions existing at the balance sheet date.

2.11 Impairment of non-financial assets

The carrying values of assets / cash generating units at each balance sheet date are reviewed for impairment. If any indication of impairment
exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their
recoverable amount. The recoverable amount is the greater of the asset''s fair value less costs of disposal and their value in use. Value in use is
arrived at by discounting the future cash flows to their present value based on an appropriate pre-tax discount rate to determine whether there is
any indication that those assets have suffered any impairment loss. When there is an indication that an impairment loss recognised for an asset in
earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and
Loss, except in case of revalued assets.

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Mar 31, 2024

Note No 1A : Significant Accounting Policies:

a. Basis of Accounting and Preparation of Financial Statements

The Company prepared its financial statements in accordance with the Accounting Standards specified under section 133 of the Companies Act, 2013 read with Companies (Accounting Standards) Rules, 2021 (as amended). The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

However, there is some regrouping as compared to previous financial year for making comparable presentation of financial statements.

b. Use of Estimates

The preparation of the financial statements in conformity with the Accounting Standards requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialised.

Requirements of the micro, Small and medium enterprises:-

We have communicated to all our creditors through our registered email for declaration as well MSME Certificate, However we have not received any communication within stipulated time. So we declare that as on 31^st March 2024 there is no MSME Creditor''s outstanding balance and there is no interest due to SME creditors.

c. Inventories

Stock in trade, work in progress, finished goods, packing materials, stores and spares are valued at lower of cost or net realizable value, Cost of raw materials, packing materials, and stores and spares is determined on a First In-First out (FIFO) basis and includes all applicable costs.

Stock-in-trade and finished goods are valued at lower of cost or net realizable value. Cost includes direct materials and direct cost incurred to bring the stock in ready to dispatch stage as aforesaid.

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

The cost of inventories may not be recoverable if those inventories are damaged, if they have become wholly or partially obsolete, or if their selling prices have declined. The cost of inventories may also not be recoverable if the estimated costs of completion or the estimated costs necessary to make the sale have increased.

Estimates of net realisable value are based on the most reliable evidence available at the time the estimates are made as to the amount the inventories are expected to realise. These estimates take into consideration fluctuations of price or cost directly relating to events occurring after the balance sheet date to the extent that such events confirm the conditions existing at the balance sheet date.

d. Cash and Cash Equivalents (for the purpose of cash flow statement)

Cash flows are reported using Indirect Method whereby the cash flows generated from Operating, Investing and Financing activities of the company are segregated. Cash comprises cash on hand, cash/cheque in hand and demand deposits with banks and Bank overdraft.

e. PPE (Property, Plant and Equipment''s)

Property, Plant and Equipment are stated at cost less accumulated depreciation (other than free hold land if any) and accumulated impairment losses thereon if any.

Depreciation is calculated on pro-rata basis on Written Down method over the standard useful lives of the asset which is in line with the useful lives prescribed in Schedule II to the Companies Act, 2013. The useful lives of each property, plant and equipment is stated below.

The carrying amount of an item of Property, plant and Equipment is derecognised on disposal. Any gain or loss arising on disposal of Property, plant and equipment is recognised in the statement of profit & loss. Depreciation is provided as below:-

Assets Useful Life (in years)

Buildings 60

Factory Buildings 30

Furniture & Fixture 10

Plant & Equipment 15

Computer 3

Vehicles 8

f. Intangible assets :

Intangible assets are stated at cost less accumulated amortisation and accumulated impairment losses thereon. The cost comprises its purchase price, borrowing cost if its criteria are met and other directly attributable cost of bringing the asset to its working condition for its intended use. Subsequent expenditure on an intangible asset after its purchase / completion is recognised as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset.

During the year the company is developing software which is under development and hence shown as Capital Work - in progress.

g. Revenue Recognition :

Sales are recognised, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales do not include goods and services tax (GST). Revenue is recognised when it is earned and no significant uncertainty exists as to its ultimate realisation or collection.

Revenue & Expenses from Trading & Marketing activities is recognised on accrual basis, Rate difference (Purchases/Sales) is accounted only on the receipt of necessary Credit Notes from Suppliers and/or Debit Notes from Customers or when the accounts are settled.

h. Other Income :

Interest income and Rent income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established.

i. Foreign Currency transaction and translations :

Transactions in foreign currencies covering current assets and current liabilities are accounted at the exchange rates prevailing on the dates the transactions take place. Gains and losses arising out of subsequent fluctuation in exchange rates are adjusted in statement of Profit & Loss Account under appropriate heads of account. Transactions which remain unsettled at the year end are translated at year end exchange rate.

j. Investments :

Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Investment in the said partnership firm is recognised after considering the share of loss.i.e. Current capital balance as on the year end date. Cost of investments includes acquisition charges such as brokerage, fees and duties.

k. Borrowing Costs

Borrowing costs include interest; amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset up to the date of capitalisation of such asset is added to the cost of the assets. Capitalisation of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.

During the said financial year there is no borrowing cost incurred for purchase of capital asset and also there is no borrowing cost which is capitalised in relation to any qualifying assets.

l. Employee Benefits

a. Provident Fund :

Retirement benefit in the form of Provident fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the fund.

b. Gratuity

Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit (PUC) method made at the end of each financial year. The company has created an approved Gratuity fund, which has taken a group gratuity cum insurance policy with an insurance company to cover the gratuity liability of the employees. At the end of accounting year, difference between obligation as per actuarial valuation and the fair value of plan assets is further provided.

m. Taxes on Income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. Provision for Taxes has been calculated on the basis of Section 115BAA of the Income Tax Act, 1961.

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their reliability.

n. Earnings Per Share

Basic earnings per share is computed by dividing the Net Profit / (Loss) attributable to Equity Shareholders (including the post-tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the Net Profit / (Loss) attributable to Equity Shareholders (including the post-tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the earnings per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented.

The Company has issued 25,00,000 Equity Share warrants on preferential basis, which was approved by the members in the Extra Ordinary General Meeting held on March 4,2023. The Company has received 25% of the consideration at time of allotment. Balance 75% was received in month of May and August 2023.