Mahamaya Lifesciences Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

Mar 31, 2025

2.2 Summary of Significant Accounting Policies

a) Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to
make judgments, estimates and assumptions that affect 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 on the management''s best knowledge of current events and actions, uncertainty about
these assumptions and estimates could result in the outcomes requiring a material adjustment to the
carrying amounts of assets or liabilities in future periods.

b) Property, Plant and Equipment

Property, Plant and Equipment, Capital Work in Progress are stated at cost, net of accumulated
depreciation and accumulated impairment losses, if any. The cost comprises of purchase price, borrowing
costs if capitalization criteria are met, directly attributable cost of bringing the asset to its working
condition for the intended use and initial estimate of decommissioning, restoring and similar liabilities.
Any trade discounts and rebates are deducted in arriving at the purchase price. Such cost includes the cost
of replacing part of the plant and equipment. When significant parts of plant and equipment are required
to be replaced at intervals, the Company depreciates them separately based on their specific useful lives.
Likewise, when a major inspection is performed, its cost is recognized in the carrying amount of the plant
and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance
costs are recognized in profit or loss as incurred.

Items of stores and spares that meet the definition of property, plant and equipment are capitalized at cost
and depreciated over their useful life. Otherwise, such items are classified as inventories.

Gains or losses arising from derecognition of property, plant and equipment are measured as the difference
between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement
of profit and loss when the asset is derecognized.

The company identifies and determines cost of each component/ part of the asset separately, if the
component/ part has a cost which is significant to the total cost of the asset and has useful life that is
materially different from that of the remaining asset

Assets under construction are capitalized under Capital Work in Progress account (CWIP). At the point
when an asset starts to operate at the management’s intended use, the cost of construction is transferred to
the appropriate category of property, plant and equipment and depreciation commences.

c) Intangible Assets

Intangible assets are amortized on a straight-line basis over the estimated useful economic life from the
date from which such intangible asset is put to use by the Company.

Product Registration Expenses

The Company incurs expenditure on registration of Products with the Ministry of Agriculture and such
expenses are classified as Intangible Assets and amortized over a period of 20 years, as per the
management’s assessment of economic useful life of those products. These products are mainly technical
and formulations for exports. The expenditure incurred are classified under Intangible Assets under
Development till the product registration is obtained and the product is put to use by the Company. Product
registration expense incurred on registration of formulation within India are charged off to the Profit and
Loss account in the year in which it is incurred since the amounts are not material.

All intangible assets and intangible assets not yet available for use are tested for impairment annually,
either individually or at the cash-generating unit level. These

e) Leases
Financial Lease

A finance lease is a lease that transfers substantially all the risks and rewards incident to ownership of an
asset. At the inception of a finance lease, the Company recognizes the lease as an asset and a liability at
an amount equal to the fair value of the leased asset at the inception of the lease. The recurring cost incurred
on such financial lease, viz., interest cost, is treated as an expense in the Statement of Profit and Loss as a
borrowing cost.

Operating Lease

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the
leased item, are classified as operating leases. Operating lease payments are recognized as an expense in
the statement of profit and loss on a straight-line basis over the lease term.

f) Inventories

Inventories are valued at lower of cost or net realizable value. Cost includes purchase price and all other
costs incurred in bringing the inventories to their present location & condition. Cost is determined on
Monthly moving average basis.

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 sale.

g) Impairment of Property, Plant and Equipment

The Company assesses at each reporting date whether there is an indication that an asset may be impaired.
If any indication exists, or when annual impairment testing for an asset is required, the Company estimates
the asset’s recoverable amount. An asset’s recoverable amount is the higher of an assets or cash-generating

Impairment losses are recognized in the Statement of Profit and Loss.

h) Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company
and the revenue can be reliably measured. The following specific condition must also be met before
revenue is recognized.

Sale of goods:

Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the
goods have been passed to the buyer. The company collects GST on behalf of the government and,
therefore, these are not economic benefits flowing to the company. Hence, they are excluded from revenue.

Fee for Marketing:

Fee for marketing is recognized when right to receive fee is accrued to the Company in accordance with
the arrangement with customers.

Interest income:

Interest income is recognized on a time proportion basis taking into account the amount outstanding and
the applicable interest rate. Interest income is included under the head “other income” in the statement of
profit and loss.

i) Foreign Currency Transactions and Balances
Initial recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency
amount the exchange rate between the reporting currency and the foreign currency at the date of the
transaction

Conversion

Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date.
Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency,
are reported using the exchange rate at the date of the transaction. Non-monetary items, which are
measured at fair value or other similar valuation denominated in a foreign currency, are translated using
the exchange rate at the date when such value was determined.

Exchange differences

Exchange differences on foreign exchange transactions settled during the year are recognized in the profit
and loss account.

Monetary items denominated in foreign currency and outstanding at the balance sheet date are translated
at the exchange rate ruling on that date, the resultant exchange differences are recognized in the profit and
loss account.

j) Retirement and other Employee Benefits
Short-Term Employee Benefits:

These are recognized as an expense at the undiscounted amount in the statement of profit and loss in the
period in which the related service is rendered. These benefits include salaries, bonus and other
allowances.

Defined Benefit Plan:

The company operates a Defined Benefit Plan for its Employees, viz., Gratuity. The cost of providing
benefit under this plan is determined on the basis of actuarial valuation at each year-end. Actuarial gains
and losses for the defined benefit plan is recognized in full in the period in which they occur in the
Statement of Profit and Loss.

The gratuity benefit payable to the employees of the Company is as per the provisions of the Payment of
Gratuity Act, 1972, as amended. Under the gratuity plan, every employee who has completed at least 5
years of service gets gratuity on separation or at the time of superannuation calculated for equivalent to
15 days salary for each completed year of service calculated on last drawn basic salary. The Company
does not have a funded plan for gratuity liability.

Leave Benefit:

Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term
employee benefit. The company measures the expected cost of such absences as the additional amount
that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.

The company treats accumulated leave expected to be carried forward beyond twelve months, as long¬
term employee benefit for measurement purposes. Such long-term compensated absences are provided
for based on the actuarial valuation using the projected unit credit method at the year-end. Actuarial
gains/losses are immediately taken to the Statement of Profit and Loss. The Company presents the leave
as a current liability in the balance sheet, to the extent it does not have an unconditional right to defer its
settlement for 12 months after the reporting date. Where the Company has the unconditional legal and
contractual right to defer the settlement for a period beyond 12 months, the same is presented as non¬
current liability.

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 capitalized as part
of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

l) Investments

Investments, which are readily realizable and intended to be held for not more than one year from the date
on which such investments are made, are classified as current investments. All other investments are
classified as long-term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly
attributable acquisition charges such as brokerage, fees and duties. If an investment is acquired, or partly
acquired, by the issue of shares or other securities, the acquisition cost is the fair value of the securities
issued. If an investment is acquired in exchange for another asset, the acquisition is determined by
reference to the fair value of the asset given up or by reference to the fair value of the investment acquired,
whichever is more clearly evident.

Current investments are carried in the financial statements at lower of cost and fair value determined on
an individual investment basis. Long-term investments are carried at cost. However, provision for
diminution in value is made to recognize a decline other than temporary in the value of the investments.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is
charged or credited to the statement of profit and loss.

m) Income Taxes

Tax expense comprises current and deferred tax. Current income-tax is measured at the amount expected
to be paid to the tax authorities in accordance with the Income-tax Act, 1961. The tax rates and tax laws
used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognized directly in equity is recognized in equity and not in the
statement of profit and loss.

Deferred income taxes reflect the impact of timing differences between taxable income and accounting
income originating during the current year and reversal of timing differences for the earlier years. Deferred
tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date.
Deferred income tax relating to items recognized directly in equity is recognized in equity and not in the
statement of profit and loss.

Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized
for deductible timing differences only to the extent that there is reasonable certainty that sufficient future
taxable income will be available against which such deferred tax assets can be realized.

At each reporting date, the Company re-assesses unrecognized deferred tax assets. It recognizes
unrecognized deferred tax asset to the extent that it has become reasonably certain that sufficient future
taxable income will be available against which such deferred tax assets can be realized.

The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes-
down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable income will be available against which
deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably
certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off
current tax assets against current tax liabilities.

n) Earnings per share

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

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable
to equity shareholders and the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.