NOTE: 3 SUMMARY OF MATERIAL ACCOUNTING POUCIES

3.1 Property, Plant and Equipment (PPE)

i. Prooerty. plant and equipment are measured at cost less accumulated depreciation and impairment tosses, if any.

ii. The cost of property, plant and equipment includes those incurred directly for the construction or acquisition of the
assets, and directly attributable to bringing it to the location and condition necessary for it to be capable of operating in
the manner intended by the management,

iii. The cost of major spares is recognised in the carrying amount o‘ the item of property, plant and equipment, in
accordance with the recognition criteria set out in the standard, The carrying amount of the replaced pan is
derecognized at the time of actual replacement. The costs of day-to-day servicing of the item are recognised in
statement of profit and loss as incurred.

iv. Depreciation on tangible assets including those on leasehold premises is provided under straight line method over
the useful life of assets specified in Part C of Schedule II to the Companies Act. 2013 and in the manner specified there: n,
except in respect of dyes and molds which are depreciated over their technically estimated useful lives on straight line
method.

v. Depreciation methods, useful lives and resioual values are reviewed at each reporting dale and accounted as change in
accounting estimate.

vi. Each component / part of an item of property, plant and equipment with a cost that is significant in relation to the
tutalcost of the item is depredated separately only when it has a different useful life. The gain or loss arising from the
de-recognition of an item or property, plant and equipment is included in statement of profit and loss when the item is
derecognized.

vii. Expenditure attributable / relating to PPE under construction / erection is accounted as below:

A To the extent directly identifiable to any specific plant /unit, tnal run expenditure net of revenue is Included in the
cost of property, plant arid equipment

B To the extent work not completed to any specific plant /unit, is grouped under 'capital work-in-progress'.

3.2 Intangible Assets

i. Intangible asset is recognised when it is probable that future economic benefits attributable to the asset will flow to the
enterprise and the cost of the asset can be measured reliably.

ii. Acquired Brand and Knowledge Development Cost is recognized 3S intangible asset upon completion of development
and commencement of commercial production.

iii. Intangible assets 3re amortized on straight line method over their technically estimated useful lives.

iv. Useful lives for all intangible assets are reviewed at each reporting date. Changes, if any, are accounted for as
changes in accounting estimates.

3.4 Revenue from contracts with customers

The Company derives revenues primarily from sale of HDPE & PP - Woven Polymer Based Products.

Ind AS 115 "Revenue from Contracts with Customers" provides a control-based revenue recognition model and provides
a five step application approach to be followed for revenue recognition.

• Identify the contract(s) with a customer;

• Identify the perfor mance obligations;

• Determine the transaction price;

• Allocate the transaction price to the performance obligations:

• Recognise revenue when or as an entity satisfies performance obligation
Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined
terms of payment and excluding central taxes or duties collecteo on behalf of the Government. 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,
regardless of when the payment is being made. The Company discloses amounts including Goods and Services Tax collected
ori behalf of the Government for better and more transparent disclosures. However, Revenue from Operations stated in the
Statement of Profit and Loss is net of GST collected from the customer.

Sale of goods

a. Inland sales have been accounted for at the time of dispatch of goods from the factor as the sates are on FOB basis

b. Export sales have been accounted tor at the time of dispatch of goods from the factory as the sales are on FOB basis.

3.5 Employee Benefits

i) Short Term Benefits;

All employee benefits falling due wholly within twelve months of rendering the services are classified as short term
employee benefits. The cost of the benefits like salaries, wages, medical leave travel assistance, short term compensated
absences, bonus, exgratia, etc. is recognised in the period in which the employee renders the related service.

II) Post Employment Benefits:

A) Defined contribution plans:

The contribution paid/ payable under provident fund scheme. ESI scheme and employee pension scheme is
recognised as expenditure in the period in which the employee renders the related service.

Bl Defined Benefit Plans:

The compeny’s obligation towards gratuity is a benefit plan. The present value of the estimated future cash flows of
the obligation under such plan is determined based on actuarial valuation using the projected unit credit method.
Any difference between the interest income on plan assets and the return actually achieved and any changes in the
liabilities over the year due to changes in actuarial assumptions or experienced adjustments within the plan are
recognised immediately in other comprehensive income and subsequently not reclassified to the statement of
profit and loss.

3.6 Foreign Currency Transactions

i. Transactions relating to non-monetary items and sale of goods/ services denominated in foreign currency are recorded
at the exchange rate prevailing or a -ate that approximates the actual rate on the date of transactions.

ii Assets and liabilities in the nature of monetary items denominated in foreign currency are restated at prevailing
exchange rate as at the end of the reporting period.

iii. exchange differences arising on account of settlement/'conversion of foreign currency monetary items are
recognised as expense or income in the period in which they arise.

3.7 Current Tax and Deferred Tax

i) Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

ii) Current tax

The tax currently payable is based on taxable profit for the year. Taxable profits differ as reported in the statement
of profit and loss because of items of income and expense that 3re taxable or deductible in other years and terns
that are never taxable or deductible. The company's current tax is calculated using tax rates that have been enacted
or substantively enacted by the end of the reporting period

Provisions of Section 1 “5BAA of the Income tax Act. 1961 gives benefit of a reduced corporate tax rate for domestic
companies and states that the domestic companies have the option to pay tax a rate of 25.168%. The Company
adopted and shifted to the new tax regime in the previous year (FY 2023-24). The impact o? this change leads to the
reduction in the direct tax outflow of the Company

iii) Deferred tax

Deferred tax is recognized or, temporal differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computat on of taxable profit Deferred tax liabilities are generally
recognised for all taxable temporary differences. Deferred tax assets are generally' recognised for alt temporary differences
to the extent that it is possible that taxable profits will be availaole against those deductible temporary differences can be
utilized

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it
is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered.

Deferred fax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability
is settled or the asset realized, based on tax rates (and tax laws] that have been enacted or substantively enacted by the end
of the reporting period.

The measurement of deferred tax liabilities and assets reflects the tax consequences that 'would follow from the manner in
which the company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and
liabilities.

3.8 Borrowing Costs

i. Borrowing costs incurred for obtaining assets which take substantial period to get ready for their intended use are
capitalized to the respective assets wherever the costs are directly attributable lo such assets and in other case by
applying weighted average cost of borrowings to the expenditure on such assets. Post the commercial production or
trial run, borrowing cost will be treated as expense for the year,
ii Other borrowing costs are treated as expense for the year.

3.9 Financial instruments (Financial assets and financial liabilities)

I. All financial instruments a-'e recognised initially at fair value. The classification of financial instruments depends on the
objective of the business model for which it is held and the contractual cash flows that are solely payments of principal
and interest on the principal amount outstanding. For the purpose of subsequent measurement, financial instruments
of the company are classified into !al Non-Derivative financial instruments and (bl Derivative financial instruments,
ii. Financial Instruments

Al Security deposits, cash and cash equivalents, employee and other advances, trade receivables and eligible current
and non-current financial assets are classified as financial assets under this clause.

Bl Loans ana borrowings, trace and other payables including deposits collected from various parties and eligible
current and non-current financial liabilities are classified as financial liabilities under this clause.

Cl Financial instruments are subsequently carried at amortized cost wherever applicable using Effective Interest Rate
method (EIRI less impairment loss.

D) Transaction costs that are attributable to financial instruments are recognized at amortized cost which are
included in the fair value of such instruments.

3.10 Impairment

i. Financial Assets

Ai Tne company applies Expected Credit Loss IECL) model for measurement and recognition of impairment loss on the
following financial assets and credit risk exposure

• Financial assets that are debt instruments, and are measured at amortized cost wherever applicable for e.g.
loans, debt securities, deposits, and bank balance.

• Trade Receivables

Bl The company follows simplified approach for recognition of impairment toss allowance on trade receivables which
do not contain a significant financing component. The application of simplified approach does not require the
company to track changes in cred* nsk. Rather, it recognizes impairment toss allowance based on lifetime ECL a?
each reporting date, right ^from its initial recognition.

ii. Non-financial Assets

The Company assesses at each reporting date whether there is any objective evidence that a non-financial asset or a group
of non-financial asset is impaired. If any such indication exists, the company estimates the amount of impairment loss.