Note 1: Summary of material accounting
policies

This note provides a list of material 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 of financial statements:
Compliance with Ind AS

These 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'.

Bais of measurement

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

• certain financial assets and liabilities that are measured
at fair value;

• defined benefit plans - plan assets measured at
fair value.

Presentation currency and rounding off

The financial statements are presented in Indian Rupee
[INR) and all values are rounded to nearest lakhs
[C00,000), except when otherwise indicated.

Going Concern The Company has prepared the financial
statements on the basis that it will continue to operate as
a going concern.

A) Changes in accounting policies and disclosures

a) Ind AS 117, Insurance Contracts

Ministry of corporate Affairs ["MCA”) notified
the Ind AS 117, Insurance Contracts, under
the Companies [Indian Accounting Standards)

Amendment Rules, 2024, which is effective
from annual reporting periods beginning on or
after 1 April 2024.

Ind AS 117 Insurance Contracts is a
comprehensive new accounting standard for
insurance contracts covering recognition and
measurement, presentation and disclosure.
Ind AS 117 replaces Ind AS 104 Insurance
Contracts. Ind AS 117 applies to all types of
insurance contracts, regardless of the type of
entities that issue them as well as to certain
guarantees and financial instruments with
discretionary participation features; a few
scope exceptions will apply.

b) Ind AS 116, Leases

The MCA notified the Companies [Indian
Accounting Standards) Second Amendment
Rules, 2024, which amended Ind AS 116,
Leases, with respect to lease liability in a sale
and leaseback transaction.

The amendment specifies the requirements
that a seller-lessee uses in measuring the
lease liability arising in a sale and leaseback
transaction, to ensure the seller-lessee does
not recognise any amount of the gain or loss
that relates to the right of use it retains. The
amendment is effective for annual reporting
periods beginning on or after 1 April 2024 and
must be applied retrospectively to sale and
leaseback transactions entered into after the
date of initial application of Ind AS 116.

c) New standards and amendments issued
but not effective

There are no such standards which are notified
but not yet effective

(b) Segment reporting

I nformation reported to the Chief operating decision
maker [CODM) for the purposes of resource allocation
and assessment of segment performance focuses on the
types of goods delivered or provided. Operating segments
are reported in a manner consistent with the internal
reporting provided to CODM.

The Company's business activity falls within a single
primary business reportable segment viz "Colorants” in
line with Ind AS 108 "Operating Segments” which includes
pigments, pigment preparations, dyestuff, synthetic
resins, functional effects and coating, auxiliaries
and chemicals.

The operating segment has been identified on the basis
of the nature of products.

(c) Foreign currency translation

In preparing the financial statements of the Company,
transactions in currencies other than the Company's
functional currency viz. Indian Rupee, are recognised
at the exchange rates prevailing 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
recognised in statement of profit or loss in the period in
which they arise. All other foreign exchange gains and
losses are presented in the statement of profit and loss
on a net basis within other gains/[losses). 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. Non-monetary items that
are measured in terms of historical cost in a foreign
currency are not retranslated.

(d) Recognition of revenue

Sales of goods and services are recognized in line with
the requirements of Ind AS 115, Revenue from contracts
with customers.

Revenue is measured based on the consideration the
Company expects to receive in exchange for the goods
or services. Revenue from sales of goods is recognized
in the income statement when control has been
transferred to the buyer, which is usually upon delivery,
at a fixed or determinable price, and when collectability
is reasonably assured. Delivery is defined based on
the terms of the sale contract. Revenue from services
is recognized when the respective services have
been rendered. Revenue is reported net of goods and
service tax, returns, discounts and rebates. Rebates to
customers are provided for in the same period that the
related sales are recorded based on the contract terms.
The Company does not expect to have any contracts
where the period between transfer of the promised
goods or services to customer and payment by the
customer exceed one year. As a consequence, the
Company does not adjust any of the transaction prices
for the time value of money. Receivable is recognised
when the goods are delivered as this is the point of time
that the consideration is unconditional because only the
passage of time is required before the payment is due.

(e) Other Operating Revenue

Export benefits / incentives are accounted on accrual
basis when relevant exports are made.

Commission income is recognized only when the
relevant service has been rendered or the goods have
been delivered.

Income from Scrap sales is recognized when right to
receive the income is established as per the terms of
the contract.

(f) Other income

Interest income is recognized on a time proportion
basis, taking into account the principal outstanding and
the effective rate over the period to maturity when it is
determined that such income will accrue to the Company.

Dividends are recognized when the right to receive the
payment is established.

Rental income arising from operating leases on is
accounted for on a straight - line basis over the
lease terms.

(g) Income tax

I ncome tax expense represents the sum of current tax
and deferred tax.

The current tax expense or credit for the year is the tax
payable on the current period's taxable income based on
the applicable enacted income tax rate in accordance
with the Income Tax Act, 1961, adjusted by changes
in deferred tax assets and liabilities attributable to
temporary differences, items that are never taxable/
deductible and unused tax losses/ tax credits.

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 realise the asset and
settle the liability simultaneously.

Deferred 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. However, deferred tax liabilities are
not recognised if they arise from the initial recognition
of goodwill. Deferred tax is also not accounted for if it
arises from initial recognition of an asset or liability in
a transaction [other than in a business combination)
that affects neither accounting profit nor taxable profit.
Deferred tax is determined using tax rates [and laws)
that have been enacted or substantially enacted at the
balance sheet date and are expected to apply when
the related deferred income tax asset is realised or the
deferred tax liability is settled.

Deferred tax assets are recognised for all deductible
temporary differences and unused tax losses only if it
is probable that future taxable profits will be available to
utilise 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 and deferred tax is recognised in statement of
profit or loss, except to the extent that it relates to items
recognised in other comprehensive income or directly in
equity, in which case, the tax is also recognised in other
comprehensive income or directly in equity, respectively.

(h) Leases

i. As a Lessee:

Leases are recognised as 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.
The Company allocates the consideration in the
contract to the lease and non-lease components
based on their relative standalone prices.

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:

• Lease payments less any lease
incentives 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

• Amounts expected to be payable by the Company
under residual value guarantees, if any

Lease payments to be made under reasonably
certain extension options are also included in the
measurement of the liability. The lease payments
are discounted using Company's incremental
borrowing rate [since the interest rate implicit in the
lease cannot be readily determined). Incremental
borrowing rate is the rate of interest that the
Company would have to pay to borrow over a similar
term, and a similar security, the funds necessary to
obtain an asset of a similar value to the right-of-use
asset in a similar economic environment and based
on company's standalone credit worthiness.

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

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

• The amount of the initial measurement of
lease liability

• Any lease payments made at or before
the commencement date less any lease
incentives received

• Any initial direct costs for new leases

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 and
leases of low-value assets are recognised on a
straight-line basis as on expense in profit or loss.
Short-term leases are leases with a lease term of
12 months or less. A lease contract is modified and
the lease modification is not accounted for as a
separate lease, in which case the lease liability is
remeasured based on the lease term of the modified
lease by discounting the revised lease payments
using a revised discount rate at the effective date
of the modification.

The Company applies Ind AS 36 to determine whether
a right-of-use asset is impaired and accounts for
any identified impairment loss as described in the
note 1(i) impairment of assets. Variable rents that
do not depend on an index or rate are not included
in the measurement the lease liability and the right-
of-use asset. The related payments are recognised
as an expense in the period in which the event or
condition that triggers those payments occurs and
are included in the line 'Other expenses' in profit
or loss.

ii. As a lessor:

Lease income from operating leases where the
Company is lessor is recognised in income on a
straight-line basis over the lease term unless the
receipts are structured to increase in line with
expected general inflation to compensate for the
expected inflationary cost increases. Initial direct
costs incurred in obtaining an operating lease are

added to the carrying amount of the underlying
asset and recognized as expense over the lease term
on the same basis as lease income. The Company did
not need to make any adjustment to the accounting
for assets held as lessor as a result of adopting the
new leasing standard.

(i) Impairment of assets

Goodwill that have an indefinite useful life is not subject
to amortisation and is tested annually for impairment,
or more frequently if events or changes are indicative
in circumstances indicate that they might be impaired.
Other assets are tested for impairment whenever events
or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is
recognised 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 other than goodwill that suffered
an impairment are reviewed for possible reversal of
the impairment.

(j) Cash and cash equivalents

For the purpose of presentation in the Statement of cash
flows, cash and cash equivalents includes cash on hand
and balances with banks of current and term deposit
account, 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 change in value, and bank overdraft.

(k) Trade receivables

Trade receivables are amounts due from customers for
goods sold or services performed in the ordinary course
of business. Trade receivables are recognised initially
at transaction price and subsequently measured at
amortised cost using the effective interest method, less
allowances for credit losses.

(l) Inventories

Cost is determined on weighted average basis. Cost of
purchased inventory are determined after deducting
rebates and discounts. Net realisable 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.

Raw materials, packing materials, work in progress,
finished goods, stock-in-trade and stores and spares
are stated at the lower of cost and net realisable value.
Cost of raw materials and stock-in- trade include cost of
purchases. Cost of work-in-progress and finished goods
include direct materials, direct labour and an appropriate
proportion of variable and fixed overhead expenditure
[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.

(m) Investments and other financial assets
Classification

The Company classifies its financial assets in the following
measurement categories:

• those to be measured subsequently at fair value [either
through other comprehensive income, or through
statement of profit or loss), and

• those measured at amortised 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 statement of profit or loss or
other comprehensive income. For investments in debt
instruments, this will depend on the business model in
which the investment is held. For investments in equity
instruments, 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 other comprehensive income or through
statement of profit or loss account.

The Company reclassifies debt investments when
and only when its business model for managing those
assets changes.

Measurement

At initial recognition, the Company measures a financial
asset at its fair value plus, in the case of a financial asset
not at fair value through profit or loss, transaction costs
that are directly attributable to the acquisition of the
financial asset. Transaction costs of financial assets
carried at fair value through profit or loss are expensed
in profit or loss. However, trade receivable that do not
contain significant financing component are measured
at transaction price.

Debt instruments

Subsequent measurement of debt instruments depends
on the Company's business model for managing the asset
and the cash flow characteristics of the asset. There are
three measurement categories into which the Company
classifies its debt instruments:

• Amortised cost: Assets that are held for collection
of contractual cash flows where those cash flows
represent solely payments of principal and interest
are measured at amortised cost. A gain or loss on a
debt investment that is subsequently measured at
amortised cost and is not part of a hedging relationship
is recognised in profit or loss when the asset is
derecognised or impaired. Interest income from these
financial assets is included in finance income using the
effective interest rate method.

• Fair value through other comprehensive income
(FVOCI): Assets that are held for collection of
contractual cash flows and for selling the financial
assets, where the assets' cash flows represent solely
payments of principal and interest, are measured at fair
value through other comprehensive income [FVOCI).
Movements in the carrying amount are taken through
OCI, except for the recognition of impairment gains or
losses, interest revenue and foreign exchange gains
and losses which are recognised in profit or loss. When
the financial asset is derecognised, the cumulative gain
or loss previously recognised in OCI is reclassified from
equity to profit or loss and recognised in other gains/
[losses). Interest income from these financial assets
is included in other income using the effective interest
rate method.

• Fair value through profit or loss (FVTPL): Assets
that do not meet the criteria for amortised cost or
FVOCI are measured at fair value through profit or loss.
A gain or loss on a debt investment that is subsequently
measured at fair value through profit or loss and is not
part of a hedging relationship is recognised in profit
or loss and presented net in the statement of profit or
loss within other gains/[losses) in the period in which
it arises. Interest income from these financial assets is
included in other income.

There are no debt instruments held by the Company.
Equity instruments

The Company subsequently measures all equity
investments at fair value. Where the Company's
management has elected to present fair value gains and
losses on equity investments in other comprehensive
income, there is no subsequent reclassification of fair
value gains and losses to profit or loss. Dividends from
such investments are recognised in profit or loss as other

income when the Company's right to receive payments
is established.

Changes in the fair value of financial assets at fair value
through profit or loss are recognised din other gain /
[losses) in the statement of profit or loss. Impairment
losses [and reversal of impairment losses) on equity
investments measured at FVOCI are not reported
separately from other changes in fair value.

Impairment of financial assets

The Company assesses on a forward-looking basis the
expected credit loss associated with its assets carried
at amortised cost and FVOCI debt instruments. The
impairment methodology applied depends on whether
there has been a significant increase in credit risk. Note
33 details how the Company determines whether there
has been a significant increase in credit risk.

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

The Company uses a provision matrix to determine
impairment loss allowance on the portfolio of trade
receivables. The provision matrix is based on its historically
observed default rates over the expected life of the trade
receivable and is adjusted for forward looking estimates.
At every reporting date, the historical observed default
rates are updated and changes in the forward-looking
estimates are analyzed.

Derecognition of financial assets

A financial asset is derecognised 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 derecognised. Where
the entity has not transferred substantially all risks and
rewards of ownership of the financial asset, the financial
asset is not derecognised.

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 derecognised
if the Company has not retained control of the financial

asset. Where the Company retains control of the financial
asset, the asset is continued to be recognised to the
extent of continuing involvement in the financial asset.

(n) Financial Liabilities
Classification

The Company classifies its financial liabilities in the
following measurement categories:

• those to be measured subsequently at fair value
through statement of profit or loss), and

• those measured at amortised cost.

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

Measurement

• Financial Liabilities at amortized cost

Financial liabilities at amortised cost represented
by borrowings, trade and other payables are initially
recognized at fair value, and subsequently carried at
amortized cost using the effective interest rate (EIR)
method. Gains and losses are recognized in the Statement
of Profit and Loss when the liabilities are derecognized as
well as through the EIR amortization process.

• Financial liabilities at FVTPL

Financial liabilities at fair value through profit or loss
include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair
value through profit or loss. Gains or losses on liabilities
held for trading are recognized in the Statement of Profit
and Loss.

• Derecognition of financial liabilities

A financial liability is derecognized when the obligation
under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another
from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified,
such an exchange or modification is treated as the
derecognition of the original liability and the recognition
of a new liability. The difference in the respective carrying
amounts is recognized in the Statement of Profit and Loss
as finance costs

(o) 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 recognised amounts
and there is adn intention to settle on a net basis or
realise the asset and settle the liability simultaneously.

The legally enforceable right must not be contingent on
future events and must be enforceable in the normal
course of business and in the event of default, insolvency
or bankruptcy of the group or the counterparty.

(p) 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 recognised 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 derecognised when replaced. All other repairs
and maintenance are charged to profit or loss during the
reporting period in which they are incurred.

Depreciation methods, estimated useful lives
and residual value

Freehold land is not depreciated. Depreciation on assets
under construction does not commence until they are
complete and available for use. Depreciation is provided
on all other items of property, plant and equipment on a
pro-rata basis on the straight-line method ('SLM') over
the estimated useful lives of the assets specified in
Schedule II of the Companies Act, 2013, except in case
of certain assets, wherein based on technical evaluation,
a different useful life has been considered. The estimated
useful lives of assets are as follows:

All assets are fully depreciated in the last year of its useful
life. The assets' useful lives are re-viewed, and adjusted
if appropriate, at the end of each reporting period.

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.

An item of property, plant and equipment and any
significant part initially recognised is derecognised
upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or loss
arising on derecognition of the asset (calculated as the
difference between the net disposal proceeds and the
carrying amount of the asset) is included in the statement
of profit and loss when the asset is derecognised.