NOTE 1: MATERIAL ACCOUNTING POLICIES

This note provides a list of the significant accounting
policies adopted in the preparation of these financial
statements. These policies have been consistently applied
to all the years presented, unless otherwise stated.

(a) Basis of preparation

(i) Compliance with Ind AS:

The financial statements comply in all material aspects
with Indian Accounting Standards (Ind AS) notified
under Section 133 of the Companies Act, 2013 (the
Act) [Companies (Indian Accounting Standards) Rules,
2015] and other relevant provisions of the Act.

All assets and liabilities have been classified as current
or non-current as per the Company's normal operating
cycle and other criteria as set out in the Schedule
III to the Act.

The accounting policies adopted in the preparation of
the financial statements are consistent with those of
the previous year.

The material accounting policy information related
to preparation of the financial statements have been
discussed in the respective notes.

(II) Historical Cost Convention:

The financial statements have been prepared on a
historical cost basis, except for the following:

• certain financial assets and liabilities (including
derivative instruments) that are measured at fair
value (refer note 34);

• assets held for sale - measured at lower of its
carrying amount and fair value less costs to sell

• defined benefit plans - plan assets measured at
fair value (refer note 39).

(b) Segment Reporting

The Company operates in "Engineering Polymers"
which in the context of IND AS 108 Operating segments
constitutes a single reportable business segment.

(c) Foreign currency translation

(i) 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 financial
statements of the Company are presented
in Indian rupee ('), which is the Company's
functional and presentation currency.

(ii) Transactions and balances

Foreign currency transactions are translated into
the functional currency using the exchange rates
at the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement
of such transactions and from the translation
of monetary assets and liabilities denominated
in foreign currencies at year end exchange
rates are generally recognized in Statement of
profit and loss.

Foreign exchange differences regarded as an
adjustment to borrowing costs are presented in
the Statement of profit and loss, within finance
costs. All other foreign exchange gains and
losses are presented in the Statement of profit
and loss on a net basis within other income or
other expenses.

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. Translation differences
on assets and liabilities carried at fair value are
reported as part of the fair value gain or loss.

(d) Revenue recognition

(i) Sale of goods

The Company is engaged in manufacturing,
trading and sale of "engineering Polymers".
Sales are recognized when control of the
products has transferred, being when the
products are delivered to the customer, the
customer has full discretion over the channel
and price to sell the products, and there is
no unfulfilled obligation that could affect
the customer's acceptance of the products.
Delivery occurs when the products have been
shipped to the specific location, the risks of
obsolescence and loss have been transferred
to the customer, and either the customer has
accepted the products in accordance with
the sales contract, the acceptance provisions

have lapsed, or the Company has objective
evidence that all criteria for acceptance have
been satisfied.

Revenue from these sales is recognized based
on the price agreed with the customer, net of
the estimated discounts based on discount
agreements. Revenue is only recognized to the
extent that it is highly probable that a significant
reversal will not occur. No element of financing
is deemed present as the sales are made with a
credit term of 30-45 days, which is consistent
with market practice.

Sale of goods does not involve warranty
obligation or right to return.

A receivable is recognized when the goods
are delivered as this is the point in time that
the consideration is unconditional because
only the passage of time is required before the
payment is due.

(ii) Financing components

The Company does not expect to have any
contracts where the period between the
transfer of the promised goods or services to the
customer and payment by the customer exceeds
one year. As a consequence, the Company does
not adjust any of the transaction prices for the
time value of money.

(iii) Commission Income

Commission income is recognized when the
terms of the contract are fulfilled.

(iv) Rendering of services

Income from services rendered is recognized
based on agreements/arrangements with the
customers as the service is performed and there
are no unfulfilled obligations.

(e) 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.

The current income tax charge is calculated on the basis
of the tax laws enacted or substantively enacted at the
end of the reporting period. Management periodically
evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject
to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be
paid to the tax authorities.

Deferred income tax is provided in full, using the
liability method, on temporary differences arising

between the tax bases of assets and liabilities and
their carrying amounts in the financial statements.
Deferred income tax is also not accounted for if it
arises from initial recognition of an asset or liability in a
transaction other than a business combination that at
the time of the transaction affects neither accounting
profit nor taxable profit (tax loss). Deferred income
tax is determined using tax rates (and laws) that have
been enacted or substantially enacted by the end of
the reporting period and are expected to apply when
the related deferred income tax asset is realized or the
deferred income tax liability is settled. Deferred tax
assets are recognized for all deductible temporary
differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilize
those temporary differences and losses.

Deferred tax assets and liabilities are offset when there
is a legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances
relate to the same taxation authority. 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.

Current and deferred tax is recognized in profit or
loss, except to the extent that it relates to items
recognized in other comprehensive income or directly
in equity. In this case, the tax is also recognized
in other comprehensive income or directly in
equity, respectively.

(f) LeasesAs a lessee:

Leases are recognized as a right-of-use asset and
a corresponding liability at the date at which the
leased asset is available for use by the company.
Contracts may contain both lease and non-lease
components. As a general rule, the Company separates
non-lease components, such as services, from lease
payments except where it is not practical to determine
non-lease components.

Assets and liabilities arising from a lease are initially
measured on present value basis. Lease liabilities
include the net present value of the following
lease payments:

- fixed payments (including in substances fixed
payments), less any lease incentive receivable

- variable lease payment that are based on an
index or a rate, initially measured using the index
or rate as at the commencement date

- payments of penalties for terminating the
lease, if the lease term reflects the company
exercising that option

Lease payments to be made under reasonably certain
extension option are also included in the measurement
of the liability. The lease payments are discounted
using the lessee's incremental borrowing rate, being
the rate that lessee would have to pay to borrow the
fund necessary to obtain an asset of similar value to the
right-of-use asset in a similar economic environment
with similar term, security and conditions.

The Company is exposed to potential future increases
in variable lease payments based on index or rate,
which are not included in the lease liability until they
take effect. When adjustment to lease payments
based on index or rate take effect, the lease liability is
reassessed and adjusted against the right-of-use asset.

Lease payments are allocated between principal and
finance cost. Finance cost is charged to profit or loss
over the lease period so as to produce a constant
periodical rate of interest on the remaining balance of
the liability for each period.

Variable lease payments other than those based on
index or rate are recognized in profit or loss in the
period in which the condition that triggers those
payments occurs.

Right-of-use assets are measured at cost comprising
the following:

- the amount of initial measurement of lease
liability,

- any lease payments made at or before the
commencement date less any lease incentives
received,

- any initial direct costs, and

- restoration costs

Right-of-use assets are generally depreciated over the
shorter of the asset's useful life and the lease term on
a straight line basis.

Payments associated with short-term leases of
equipment and all leases of low-value assets are
recognized on a straight-line basis in the Statement of
profit and loss. Short term leases are leases with a lease
term of 12 months or less. Low value asset comprise IT
equipment and Office Equipment.

/4s a lessor:

The Company does not have any lease arrangements
where the entity is a lessor.

(g) Impairment of assets

The carrying amounts of assets are reviewed at each
balance sheet date for any indication of impairment
whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable.
An impairment loss is recognized for the amount

by which the asset's carrying amount exceeds its
recoverable amount. The recoverable amount is the
higher of an asset's fair value less costs of disposal and
value in use. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which there
are separately identifiable cash inflows which are
largely independent of the cash inflows from other
assets or groups of assets (cash-generating units).
Non-financial assets that suffered an impairment are
reviewed for possible reversal of the impairment at the
end of each reporting period.

(h) Cash and cash equivalents

For the purpose of presentation in the statement of
cash flows, cash and cash equivalents includes cash
on hand, other short-term, highly liquid investments
with original maturities of three months or less that
are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes
in value, and bank overdrafts. Bank overdrafts are
shown within borrowings in current liabilities in
the balance sheet.

(i) Trade receivables

Trade receivables are recognized initially at fair value
and subsequently measured at amortized cost, less
provision for impairment.

(j) Inventories

Raw materials, packing materials, stores and spares,
work in progress, traded and finished goods are
stated at the lower of cost and net realizable value.
Cost of raw materials and traded goods comprises
cost of purchases. Cost of work-in progress and
finished goods comprises direct materials, direct
labour and an appropriate proportion of variable
and fixed overhead expenditure, the latter being
allocated on the basis of normal operating capacity.
Cost of inventories also include all other costs
incurred in bringing the inventories to their present
location and condition.

Costs are assigned to individual items of inventory
on the basis of weighted average cost basis. Costs of
purchased inventory are determined after deducting
rebates and discounts. Net realizable value is the
estimated selling price in the ordinary course of
business less the estimated costs of completion and
the estimated costs necessary to make the sale.

(k) Investments and other financial assets
(i) Classification

The Company classifies its financial assets in the

following measurement categories:

• those to be measured subsequently at fair
value through profit or loss and

• those measured at amortized cost.

The classification depends on the entity's
business model for managing the financial assets
and the contractual terms of the cash flows.

For assets measured at fair value, gains and
losses will either be recorded in profit or loss or
other comprehensive income as the case may
be. For investments in equity instruments and
mutual funds, this will depend on whether the
Company has made an irrevocable election at
the time of initial recognition to account for the
equity investment at fair value through Statement
of profit and loss.

(ii) Measurement

At initial recognition, the Company measures a
financial asset at its fair value. Transaction costs
of acquisition of financial assets carried at fair
value through profit and loss are expensed in the
Statement of profit and loss.

Amortized cost: Assets that are held for collection
of contractual cash flows where those cash flows
represent solely payments of principal and
interest are measured subsequently at amortized
cost. Interest income from these financial assets
is included in finance income using the effective
interest rate method.

Equity instruments and investment in mutual
funds: The Company subsequently measures all
investments at fair value through Statement of
Profit and Loss. Dividends and Gain or loss from
such investments are recognized in profit or loss
as other income when the Company's right to
receive payments is established.

(iii) Impairment of financial assets

The Company assesses on a forward looking
basis the expected credit losses associated with
its financial assets carried at amortized cost.
The impairment methodology applied depends
on whether there has been an increase in credit
risk (Refer note 35).

For trade receivables only, the Company applies
the simplified approach permitted by Ind AS 109
Financial Instruments, which requires expected
lifetime losses to be recognized from initial
recognition of the receivables.

(iv) Derecognition of financial assets

A financial asset is derecognized only when

• The Company has transferred the rights to
receive cash flows from the financial asset or

• Retains the contractual rights to receive
the cash flows of the financial asset, but
assumes a contractual obligation to pay the
cash flows to one or more recipients.

Where the entity has transferred an asset, the
Company evaluates whether it has transferred
substantially all risks and rewards of ownership
of the financial asset. In such cases, the financial
asset is derecognized. Where the entity has not
transferred substantially all risks and rewards
of ownership of the financial asset, the financial
asset is not derecognized.

Where the entity has neither transferred a
financial asset nor retains substantially all risks
and rewards of ownership of the financial asset,
the financial asset is derecognized if the Company
has not retained control of the financial asset.
Where the group retains control of the financial
asset, the asset is continued to be recognized
to the extent of continuing involvement in the
financial asset.

(v) Income recognition
Interest income

Interest income on financial assets at
amortized cost is calculated using the effective
interest method is recognized in the statement
of profit and loss as part of other income.
Interest income is calculated by applying the
effective interest rate to the gross carrying
amount of a financial asset.

Dividends

Dividends are received from financial assets at
fair value through profit or loss. Dividends are
recognized as other income in profit or loss when
the right to receive payment is established.

(l) Derivatives

Derivatives are taken as the hedging instrument
by the Company.

For derivatives taken against underlying asset/liability
or that are used to hedge forecast transactions, the
Company generally designates only the change
in fair value of the forward contract related to the
spot component and aligned forward element on
reporting date.

Gains or losses relating to the effective portion of the
change in the spot component and aligned forward
element of the forward contracts are recognized in
Statement of profit and loss.

(m) Offsetting financial instruments

Financial assets and liabilities are offset and the net
amount is reported in the balance sheet where there
is a legally enforceable right to offset the recognized
amounts and there is an intention to settle on a
net basis or realize the asset and settle the liability
simultaneously.

(n) Property, plant and equipment

Freehold land is carried at historical cost. All other
items of property, plant and equipment are stated
at historical cost less depreciation. Historical cost
includes expenditure that is directly attributable to
the acquisition of the items.

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 profit or loss during the reporting period in
which they are incurred.

Depreciation methods and estimated useful lives:

Depreciation is calculated using the straight-line
method over useful lives of assets as follows:

Useful life of Leasehold Improvements is considered
based on lease term.

Depreciation and amortization methods and useful
lives are reviewed periodically, including at each
financial year end.

An asset's carrying amount is written down
immediately to its recoverable amount if the asset's
carrying amount is greater than its estimated
recoverable amount.

Gains and losses on disposals are determined by
comparing proceeds with carrying amount. These are
included in the Statement of profit and loss.

(o) Non-Current Assets Classified as Held for sale

Non-current Assets are classified as held for sale if their
carrying amount will be recovered principally through
a sale transaction rather than through continuing use
and a sale is considered highly probable. They are

measured at the lower of their carrying amount and
fair value less costs to sell, except for assets such as
deferred tax assets, assets arising from employee
benefits, financial assets and contractual rights under
insurance contracts, which are specifically exempt
from this requirement.

An impairment loss is recognized for any initial or
subsequent write-down of the asset to fair value less
costs to sell. A gain is recognized for any subsequent
increases in fair value less costs to sell of an asset,
but not in excess of any cumulative impairment loss
previously recognized. A gain or loss not previously
recognized by the date of the sale of the asset is
recognized at the date of de-recognition.

Assets are not depreciated or amortized while they are
classified as held for sale. Interest and other expenses
attributable to the liabilities of a disposal group
classified as held for sale continue to be recognized.

Assets classified as held for sale are presented
separately from the other assets in the balance sheet.

(p) Trade and other payables

These amounts represent liabilities for goods and
services provided to the Company prior to the end of
financial year which are unpaid or not due for payment.
The amounts are unsecured and are usually paid as per
the agreed payment terms. Trade and other payables
are presented as current liabilities unless payment is
not due within 12 months after the reporting period.
They are recognized initially at their fair value and
subsequently measured at amortized cost using the
effective interest method.

(q) Borrowings

Borrowings are initially recognized at fair value and
are subsequently measured at amortized cost. In case
of foreign currency loan, any difference between
the proceeds received and repayment amount is
recognized in the Statement of profit and loss.

Borrowings are derecognized from the balance sheet
when the obligation specified in the contract is
discharged, cancelled or expired.

Borrowings are classified as current liabilities unless
the Company has an unconditional right to defer
settlement of the liability for at least 12 months after
the reporting period. Where there is a breach of a
material provision of a long-term loan arrangement
on or before the end of the reporting period with the
effect that the liability becomes payable on demand
on the reporting date, the entity does not classify
the liability as current, if the lender agreed, after
the reporting period and before the approval of the
financial statements for issue, not to demand payment
as a consequence of the breach.

(r) Borrowing costs

Borrowing costs that are directly attributable to the
acquisition, construction or production of a qualifying
asset are capitalized during the period of time that
is required to complete and prepare the asset for its
intended use or sale. Qualifying assets are assets that
necessarily take a substantial period of time to get
ready for their intended use or sale.

Investment income earned on the temporary
investment of specific borrowings pending their
expenditure on qualifying assets is deducted from the
borrowing costs eligible for capitalization.

Other borrowing costs are expensed in the period in
which they are incurred.