The financial statements have been prepared under the historical cost convention on accrual basis to comply in all material aspects and in accordance with generally accepted accounting principles in India and the relevant provisions of the Companies Act, 2013. The accounting policies have been consistently applied by the Company unless otherwise stated.

(A) USE OF ESTIMATES:

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

(B) RECOGNITION OF REVENUE AND EXPENDITURE :

(i) Revenues/Incomes and Costs/ Expenditures are generally accounted on accrual, as they are earned or incurred.

(ii) Sales are recognized when significant risks and rewards of ownership have been transferred to the buyer. In case of development projects / Research income is recognized on achieving the set milestones or targets.

(iii) Carbon credit revenue is recognized on achieving the set milestones or targets as prescribed by an agency and where reasonable assessment of certainty of future economic benefits.

(iv) Export incentives under various schemes are recognized as Income on certainty of realization.

(v) Sale of realizable scrap is accounted on receipt basis.

(vi) Insurance claims are accounted on accrual basis on admission of claims.

(vii) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable rate of interest.

(C) FIXED ASSETS:

(i) Fixed Assets (including capital work-in- progress) are accounted at cost less accumulated depreciation net of modvat credit.

(ii) Constructed and fabricated capital assets are capitalized as and when the plant is put into commercial production.

(iii) Expenditure during construction period including interest on loans borrowed is included in the Capital cost.

(iv) Significant items of separate identity capable of enhancing life and capacity of the machinery are capitalized at cost inclusive of installation cost.

(D) DEPRECIATION

(i) The depreciable amount of an asset is the cost of an asset or other amount substituted for cost less residual value. Depreciation is provided in accordance with Schedule II of the Companies Act, 2013, as amended treating plant and machinery as continuous process plant.

(ii) Depreciation on assets costing less than Rs.5000/- is provided at 100%.

(E) VOLUNTARY RETIREMENT SCHEME (VRS)

(i) The Company has introduced Voluntary Retirement Scheme in accordance with BIFR Modified Draft Rehabilitation Scheme. The Company followed the policy guidelines issued by BIFR by amortizing the VRS payment over a period of 3 years.

(F) REFURBISHMENT EXPENDITURE

The company has followed the policy of amortizing refurbishment expenditure met on Plant and Machinery over a period of five years from the year of expenditure in accordance with the BIFR Modified Draft Rehabilitation Scheme.

(G) INVENTORIES:

(i) The closing stock of raw materials, packing material, stores and spares are valued at cost by adopting weighted average method or net realizable value whichever is less. Stock-in process (intermediate products) and finished goods are valued at cost or net realizable value whichever is lower.

Cost of Stock-in-process includes costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

(ii) Excise duty payable on finished goods manufactured but not removed is included in the Valuation of such stocks.

(iii) By-products are valued at NIL value.

(H) EMPLOYEE BENEFITS:

a. Short Term Employee Benefits:

Undiscounted value of short term employee benefits such as salaries, wages, short term compensated absences, bonus, ex-gratia and performance incentives are recognized as expense in the period in which the employees render the related service.

b. Post Employment Benefits

Defined Contribution plans:

Contribution to defined contribution plans being Employee Provident Fund, Employee State Insurance, Employee Insurance Scheme etc. are recognized in the Statement of profit and loss during the period in which the employees render the related services.

Defined Benefit Plans:

Liabilities in respect of defined benefit plans being Gratuity and Leave encashment are determined based on an actuarial valuation using the projected unit credit method. Actuarial gains or losses are recognized immediately in the Statement of Profit and Loss account.

(I) PROVISION FOR DOUBTFUL DEBTS:

Provision for doubtful debts/loans/advances:

Provision for doubtful debts is made in the books in respect of debtors outstanding for more than 3 years except Govt. Debts. In respect of cases under Civil suits/tribunals for recovery of dues which are yet to be decided, provisions are made to the extent considered necessary by the Management.

(J) FOREIGN CURRENCY TRANSACTIONS:

(i) Foreign currency transactions are accounted for at the exchange rates prevailing on the date of transaction.

(ii) Fixed assets are translated at the exchange rates on the date of transaction. The exchange difference in each financial year, up to the period of settlement is taken to Statement of profit and loss.

(iii) The monetary items in foreign currencies are translated at the closing exchange rate on the date of balance sheet and difference in translation and realized gains/losses thereon adjusted in the Statement of profit and loss.

(K) BORROWING COST:

Borrowing costs relating to acquisition of fixed assets which takes substantial period of the time to get ready for its intended use are included to the extent they relate to the period till such assets are ready to be put to use. All other borrowing costs are charged to revenue. Borrowing costs consist of interest and other costs that the company incurs in connection with borrowing of funds on acquisition of fixed assets are capitalized as part of the cost of asset.

(L) TAXES ON INCOME:

(i) The Current charge for income taxes is calculated in accordance with the relevant tax regulations applicable to the Company on the estimated total income for the year.

(ii) Deferred tax assets and liabilities are recognized on timing differences between taxable income and accounting income, originating in one period and expected to reverse in subsequent periods. Deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the asset will be realized in future.

(iii) Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted as on the Balance Sheet date.

(M) SEGMENT REPORTING:

The company's operation mainly comprises manufacturing of PTFE (Suspension & Emulsion). These activities constitutes the primary segment i.e. manufacturing in chemicals.

(N) EARNING PER SHARE:

Basic Earnings Per Share is calculated by dividing the net profit or loss for the period attributable to equity share holders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating the diluted earnings per share, the net profit or loss for the period attributable to equity share holders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

(O) IMPAIRMENT OF ASSETS:

The carrying amounts of assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such an indication exists, then the carrying value is reduced to the higher of the net selling price or the value in use. The value in use is the present value of estimated future net income expected from use of the asset.

(P) PROVISIONS / CONTINGENT LIABILITIES:

Provisions are recognized, when the Company has a present legal or constructive obligation, as a result of past events, for which it is probable that an out flow of economic benefits will be required to settle the obligation and a reliable estimate can be made for the amount of the obligation. The disclosure is made for all present or possible obligations that may but probably will not require outflow as contingent liability in the financial statements.