1.15 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions

Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount
can be reliably estimated. Provisions are not recognised for future operating losses.

Provisions are measured at the present value of management's best estimate of the expenditure required to settle the
present obligation at the end of the reporting period. The discount rate used to determine the present value is a current pre¬
tax rate. The increase in the provision due to the passage of time is recognised as interest expense.

Contingent Liability

Contingent liability is a possible obligation arising from past events and whose existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or a
present obligation that arises from past events but is not recognized because it is not probable that an outflow of resources
embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured
with sufficient reliability. The Company does not recognize a contingent liability but discloses its existence in the standalone
financial statements.

Contingent Asset

Contingent asset is not recognised in standalone financial statements since this may result in the recognition of income that
may never be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent
asset and is recognized. Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

1.16 REVENUE RECOGNITION

The Company derives revenue primarily from manufacture of Polymers & Co-Polymers business comprising of Styrene,
Divinyl Benzene, Acrylic Acid and Acrylates.

Revenue is recognised upon transfer of control of promised products or services to customers at the amount of transaction
price (net of variable consideration) that reflects the consideration the Company expects to receive in exchange for those
products or services. Revenue is measured based on the fair value of consideration specified in the contract with customer
and excludes amounts collected on behalf of third parties.

Goods and Service Tax (GST) collected on behalf of the government is excluded from Revenue, as it is not an economic
benefit to the Company.

Other Operating Revenue

Other Operating Income consists of revenue generated from export incentives, duty drawbacks, and realized exchange gains.
This income is recognized when performance obligations, as specified are fulfilled, and there is no significant uncertainty
regarding the amount of consideration to be received.

1.17 RECOGNITION OF INTERESTAND DIVIDEND INCOME
Interest

Interest income is recognized using the effective interest rate method.

Dividend

Dividends are recognised in the Statement of Profit and Loss only when the right to receive payment is established, it is
probable that the economic benefits associated with the dividend will flow to the Company, and the amount of the dividend
can be measured reliably.

1.18 TAXES ON INCOME
Current Tax

Tax on income for the current period is determined on the basis of estimated taxable income and tax credits computed in
accordance with the provisions of the relevant tax laws and based on the expected outcome of assessments/appeals.
Current income tax relating to items recognized directly in equity is recognized in equity and not in the Statement of Profit
and Loss.

Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes provisions where appropriate.

Deferred tax

Deferred tax is provided using the balance sheet approach on temporary differences at the reporting date between the tax
bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any
unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available
against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can
be utilized.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized
deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that
future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is
realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the
reporting date.

Deferred tax relating to items recognized outside the Statement of Profit and Loss is recognized outside the Statement of
Profit and Loss. Deferred tax items are recognized in correlation to the underlying transaction either in other comprehensive
income or directly in equity.

The break-up of the major components of the deferred tax assets and liabilities as at balance sheet date has been arrived
at after setting off deferred tax assets and liabilities where the Company have a legally enforceable right to set-off assets
against liabilities.

1.19 EMPLOYEE BENEFITS
Short-term obligations

Short-term employee benefits are measured on an undiscounted basis and expensed as the related service is provided. A
liability is recognised for the amount expected to be paid under short-term cash bonus, if the Company has a present legal
or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be
estimated reliably.

Post-employment obligations

The Company operates the following post-employment schemes:

• defined benefit plans such as gratuity; and

• defined contribution plans such as provident fund.

Defined Benefit Plans

The liability or asset recognized in the balance sheet in respect of defined benefit gratuity plans is the present value of the
defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation
is calculated annually by actuaries using the projected unit credit method.

The present value of the defined benefit obligation denominated in INR is determined by discounting the estimated future
cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms
approximating to the terms of the related obligation.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the
fair value of plan assets. This cost is included in employee benefit expense in the Statement of Profit and Loss.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized
in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the
statement of changes in equity and in the balance sheet.

Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized
immediately in Statement of Profit and Loss as past service cost.

Defined contribution plans

The Company makes specified monthly contributions towards government administered provident fund scheme. The
Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as
defined contribution plans and the contributions are recognized as employee benefit expense when they are due. Prepaid
contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments are available.

Other long-term employee benefit obligations

The liabilities for leave are not expected to be settled wholly within twelve months after the end of the period in which
the employees render the related service. They are therefore measured as the present value of expected future payments
to be made in respect of services provided by employees up to the end of the reporting period using the projected unit
credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms
approximating to the terms of the related obligation. Measurements as a result of experience adjustments and changes in
actuarial assumptions are recognized in Statement of Profit and Loss.

The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to
defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected
to occur.

1.20 EARNINGS PER SHARE (EPS)

Basic earnings per share

Basic earnings per share is calculated by dividing the profit (or loss) attributable to the owners of the Company by the
weighted average number of equity shares outstanding during the year. The weighted average number of equity shares
outstanding during the year is adjusted for bonus issue, bonus element in a rights issue to existing shareholders, share split
and reverse share split (consolidation of shares).

Diluted earnings per share

Diluted earnings per share is computed by dividing the profit (considered in determination of basic earnings per share) after
considering the effect of interest and other financing costs or income (net of attributable taxes) associated with dilutive
potential equity shares by the weighted average number of equity shares considered for deriving basic earnings per share
adjusted for the weighted average number of equity shares that would have been issued upon conversion of all dilutive
potential equity shares.

1.21 RECENT ACCOUNTING PRONOUNCEMENTS

Ministry of Corporate Affairs ('MCA') notifies new standards or amendments to the existing standards under the companies
(Indian Accounting standards) Rules, 2015 as amended from time to time. For the year ended March 31, 2026, the MCA
has notified IND AS 1 Presentation of Financial statement relating to classification of liabilities as current or non-current
and non-current liabilities with Covenants, Ind AS 7 Statement of Cash Flows and Ind AS 107 Financial Instruments relating
to disclosure of supplier finance arrangements and Ind AS 12 Income Taxes relating to International tax reform - Pillar Two
Model Rules, applicable to company, w.e.f. April 2025.The company has reviewed the new pronouncement and based on its
evaluation has determined that the new pronouncement is not applicable to the company.

Equity Shares

The Company has one class of equity shares having a par value of Rs. 10/- per share. Each shareholder is eligible for one
vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the
ensuing Annual General Meeting except in case of interim dividend. In the event of liquidation, the equity shareholders
are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to
their shareholding.

General Reserve:

Mandatory transfer to general reserve before declaration of dividend is not required under the Companies Act, 2013.
Retained Earnings:

Retained earnings are the profits that the Company has earned till date and is net of amount transferred to other reserves
such as general reserves etc., amount distributed as dividend and adjustments on account of transition to Ind AS.

Securities Premium:

Securities premium reserve is credited when shares are issued at premium. It is utilised in accordance with the provisions
of the Act, to issue bonus shares, to provide for premium on redemption of shares or debentures, write-off equity related
expenses like underwriting costs, etc.

Capital Redemption Reserve:

The Capital Redemption Reserve is created on redemption of 13.5% 50,000 Redeemable Cumulative Preference Shares of
Rs. 100/- in the Financial Year 2007-2008.

4.03 Employee benefits

1) Labour Law:

The Code on Social Security, 2020 has been notified and made effective from November 21 2025, thereby replacing the
erstwhile Payment of Gratuity Act, 1972. The Code on Social Security, 2020 has updated the definition of the gratuity
salary to "Wages" as defined in the Code on Wages, 2019. The Company has assessed the impact of the Code and
recognised the same in profit and loss account for the year ended March 31, 2026.

2) Defined Contribution Plans:

The amounts of contribution to provident fund and Employees' State Insurance Scheme recognized as expenses during
the year is Rs. 24.58 Lakhs (March 31, 2025 : Rs. 25.06 Lakhs) for the year ended March 31, 2026.

3) Defined Benefit Plans:

The Company has a defined benefit gratuity plan in India (funded). The Company's defined benefit gratuity plan is a
salary plan for employees, which require contributions to be made to a separately administered fund. The gratuity plan
provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment,
of an amount equivalent to 15 days' salary for each completed year of service. Vesting occurs upon completion of Five (5)
continuous years of service as governed by the Code on Social Security, 2020. The Present value of the defined benefit
obligations and related current service cost were measured using the Projected Unit Credit Method, with actuarial
valuation being carried out at each Balance Sheet date.

The Gratuity Plan is administered by "Polychem Limited Employees Group Gratuity Scheme" & "Life Insurance Corporation
of India" that is legally separated from the Company.

The company expects to pay Rs. 13.75 Lakhs in contributions to defined benefit plans in financial year 2026-27.

4.06 Capital Management
Risk management

The Company's objective in managing capital is to safeguard its ability to continue as a going concern while maintaining an
optimal capital structure and maximising shareholder value. The Company monitors its capital structure based on its net debt
position, which comprises lease liabilities, net of cash and cash equivalents.

As at March 31, 2026, the Company was in a net cash position, with cash and cash equivalents exceeding its outstanding
lease liabilities . Accordingly, the Company continued to maintain a strong liquidity position with no external borrowings
outstanding as at the reporting date. The Company reviews its capital structure periodically and makes adjustments, where
considered appropriate, in light of changes in economic conditions, business requirements and financing needs. Consequent
to such capital structure, the Company is not subject to any externally imposed capital requirements.

Dividend Distribution:

The Company's dividend policy balances shareholder returns with the need to retain earnings for business growth. The
following dividends were declared during the reporting periods:

The Board has recommended a dividend of Rs. 20 per share (200% of face value of Rs. 10/- each) for F.Y. 2025-26 (F.Y.2024-25:
Rs. 20 per share or 200% of face value of Rs. 10/- each). Dividend declarations consider factors including profitability, retained
earnings, liquidity position and future capital requirements.

The Company's capital management approach ensures compliance with statutory requirements while maintaining sufficient
resources to support ongoing operations and strategic initiatives. Regular reviews are conducted to assess the adequacy
and efficiency of the capital structure in light of changing business needs and market conditions.

4.07 Financial Instruments

i) Methods & assumptions used to estimate the fair values

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged
in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

(a) The carrying amounts of receivables and payables which are short term in nature such as trade receivables, other bank
balances, deposits, loans to employees, trade payables, other financial liabilities and cash and cash equivalents are
considered to be the same as their fair values.

(b) The fair values for long term security deposits given and remaining non current financial assets were calculated based on
cash flows discounted using a current rate at 9%. They are classified as level 3 fair values in the fair value hierarchy due
to the inclusion of unobservable inputs.

(c) For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

ii) Categories of financial instruments

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by
valuation technique:

Level 1: unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2: directly or indirectly observable market inputs, other than Level 1 inputs; and
Level 3: inputs which are not based on observable market data

4.08 Financial Risk Management

The Company's financial risk management is an integral part of how to plan and execute its business strategies. The Company's
financial risk management policy is set by the Board of Directors. The details of different types of risk and management policy
to address these risks are listed below:

The Company's activities are exposed to various risks viz. Credit risk, Liquidity risk and Market risk. In order to minimise any
adverse effects on the financial performance of the Company, it uses various instruments and follows policies set up by the
Board of Directors / Management.

i) Credit Risk

Credit risk arises from the possibility that counter party will cause financial loss to the Company by failing to discharge
its obligation as agreed.

Credit risks from balances with banks are managed in accordance with the Company policy. For derivative and financial
instruments, the Company attempts to limit the credit risk by only dealing with reputable banks having high credit-
ratings assigned by credit-rating agencies.

Based on the industry practices and business environment in which the Company operates, management considers that
the trade receivables are in default if the payment are more than 12 months past due.

ii) Liquidity Risk

Liquidity risk is risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities
that are settled by delivering cash or another financial asset. The objective of liquidity risk management is to maintain
sufficient liquidity and ensure that funds are available for use as per requirements. The Company's principal sources of
liquidity are cash and cash equivalents, borrowings and the cash flow that is generated from operations. The Company
has consistently generated sufficient cash flows from its operations and believes that these cash flows along with its
current cash and cash equivalents and funding arrangements are sufficient to meet its financial obligations as and when
they fall due. Accordingly, liquidity risk is perceived to be low.

iii) Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market prices. The Company is exposed in the ordinary course of business to risks related to changes in foreign currency
exchange rate and interest rate.

Market Risk - Foreign Exchange

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to
changes in foreign exchange rates. As the Company operates internationally and a portion of its business is transacted in
various foreign currencies, it is exposed to foreign exchange risk arising from its overseas sales. The Company undertakes
risk mitigation measures for its foreign currency receivables based on market assessments made in consultation with its
Forex Consultant and in accordance with the policies approved by the Management.

The carrying amount of the Company's foreign currency denominated monetary assets and liabilities as at the end of
the reporting period is as follows:

Market Risk - Price Risk

The Company is mainly exposed to the price risk due to its investment in mutual funds. The price risk arises due to
uncertainties about the future market values of these investments. As at March 31, 2026, the investments in mutual funds
is Rs. 2,762.69 Lakhs (March 31, 2025 : Rs. 1,604.14 Lakhs).These are exposed to price risk. In order to minimise price risk
arising from investments in mutual funds, the Company predominately invests in those mutual funds which have higher
exposure to high quality debt instruments with adequate liquidity & no demonstrated track record of price volatility.

Price risk sensitivity:

0.10% increase or decrease in prices will have the following impact on profit/loss before tax and on other components
of equity

Note: There were no outstanding balances with related parties as at March 31, 2026.

*Short term employee benefits does not include the provision made for gratuity & leave benefits , contribution to
provident fund and superannuation fund.

**As the post-employment benefits related to defined benefit plans is provided on actuarial basis for the company as
a whole, the amount pertaining to key management personnel is not ascertainable and therefore not included above.
1.10 Proposed Dividend

A dividend of Rs. 20/- i.e 200% of the face value of Rs. 10/- each per equity share (Previous Year - Rs. 20/- i.e 200% of the face
value of Rs. 10/- each) has been recommended by the Board of Directors which is subject to the approval of the shareholders.
The proposed dividend has not been recognised as a liability as at March 31, 2026 in accordance with Ind AS 10.

4.12 Revenue from contracts with customers
Disaggregation of Revenue

Management conclude that disaggregation of revenue disclosed in Ind AS 108 meets the disclosure criteria of Ind AS 115
and segment revenue is measured on the same basis as required by Ind AS 115, hence separate disclosures as per Ind AS 115
is not required.

Performance Obligations and remaining Performance Obligations

Applying the practical expedient as given in Ind AS 115, the Company has not disclosed the remaining performances as the
performance obligations relates to contracts where the Company has a right to consideration from a customer in an amount
that corresponds directly with the value to the customer of the Company's performance completed to date.

4.13 Export Benefits
RoDTEP Scheme

The company is also entitled to Remission of Duties and Taxes on Exported Products (RoDTEP) scheme w.e.f 1.1.2021 vide
Public Notice No. 19/2015-20 notified on 17.08.2021. Accordingly, the company has recognized benefits of Rs.27.44 lakhs in
the year ended March 31, 2026 (March 31, 2025 - Rs. 24.54 Lakhs).

4.14 Leases
As Lessee

The Company's lease asset primarily consist of leases for Office Space.

(i) The Amount recognised in the Standalone statement of profit and loss in respect of right of use asset and lease obligation
are as under:

(iv) Rental expense recorded for short-term leases was Rs.13.83 Lakhs for the year ended March 31,2026
(March 2025-Rs. 11.90 Lakhs).

(v) The maturity analysis of lease liabilities are disclosed in Note no. 4.08 (ii). The Company does not face a significant
liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease
liabilities as and when they fall due.

(vi) Certain lease agreements are subject to escalation clause and with extension of lease term options.

As a Lessor

Rental Income on assets given on operating lease is Rs.5.92 Lakhs for the year ended March 31, 2026
(March 31, 2025: Rs.5.78 Lakhs)

4.18 Additional Regulatory Information pursuant to the requirement in Division II of Schedule III to the Companies Act 2013

(a) The Company does not have any Benami property, where any proceeding has been initiated or pending against the
Company for holding any Benami property.

(b) During the current and previous year, the Company has not revalued its Property, Plant and Equipment (including Right
of use Assets) or Intangible Assets.

(c) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(d) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:

i. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the company (Ultimate Beneficiaries) or

ii. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(e) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with
the understanding (whether recorded in writing or otherwise) that the Company shall:

i. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the Funding Party (Ultimate Beneficiaries) or

ii. provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(f) The Company has not entered into any transaction that has not been recorded in the books of account and subsequently
surrendered or disclosed as income during tax assessments.

(g) The Company has no borrowings from banks and financial institutions on the basis of security of current assets.

(h) None of the entities in the Company have been declared wilful defaulter by any bank or financial institution or government
or any government authority.

(i) The Company has complied with the number of layers prescribed under the Companies Act, 2013.

(j) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous
financial year.

4.19 Supplementary statutory information required to be given pursuant to schedule V of Regulation 34(3) of the SEBI (Listing
Obligation & Disclosure Requirement) Regulations, 2015:

'The company has complied with the requirements to the extent applicable, which forms part of annual report.

4.20 The provisions of the Companies Act, 2013 and rules made thereunder requires that the Company uses only such accounting
software for maintaining its books of account which has a feature of recording audit trail for each and every transaction,
creating an edit log of each change made in books of account along with the date when such changes were made and
ensuring that the audit trail cannot be disabled or tampered with effect from April 1, 2023. Further the audit trail has been
preserved by the company as per statutory requirements for record retention.

The Company has taken all necessary steps to be compliant with the above requirement of audit trail functionality since it's
effective date.

4.21 Recent Pronouncements

Ministry of Corporate Affairs ('MCA') notifies new standards or amendments to the existing standards under the Companies
(Indian Accounting Standards) Rules, 2015 as amended from time to time. For the year ended March 31, 2026, the MCA
has notified IND AS 1 Presentation of Financial statements relating to classification of liabilities as current or non-current
and non-current liabilities with covenants which are applicable, w.e.f. April 2026.The amendments relates to classification
of liabilities as Current or Non-Current and Non-Current Liability with covenants. The Company has no impact of this
amendment in its classification criteria of Current and Non-Current Liabilities.