2.12 Provisions and contingent liability

Provisions are recognised when the Company has a present obligation (legal or
constructive) as a result of a past event, it is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation and a reliable estimate can
be made of the amount of the obligation. Provisions are measured at the best estimate
of the expenditure required to settle the present obligation at the Balance Sheet date.
If the effect of the time value of money is material, provisions are discounted to reflect its
present value using a current pre-tax rate that reflects the current market assessments
of the time value of money and the risks specific to the obligation. When discounting
is used, the increase in the provision due to the passage of time is recognised as a
finance cost.

Contingent liabilities are disclosed when there is a possible obligation arising from
past events, the existence of which will be confirmed only by the occurrence or non¬
occurrence of one or more uncertain future events not wholly within the control of
the Company or a present obligation that arises from past events where it is either
not probable that an outflow of resources will be required to settle the obligation or a
reliable estimate of the amount cannot be made.

2.13 Income taxes

Tax expense for the year comprises current and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs
from net profit as reported in the statement of profit and loss because it excludes
items of income or expense that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible.

The Company's liability for current tax is calculated using tax rates and tax laws enacted
in the country. It is recognised in the Statement of Profit and Loss except to the extent
it relates to an item which is recognised directly in equity or in other comprehensive
income.

I

Interest expenses and penalties, if any, related to income tax are included in finance
cost and other expenses respectively. Interest Income, if any, related to Income tax is
included in Other Income.

Deferred tax is recognised in respect of temporary differences between the carrying
amount of assets and liabilities for financial reporting purposes and the corresponding
amounts used for taxation purposes.

A deferred tax liability is recognised based on the expected manner of realisation or
settlement of the carrying amount of assets and liabilities, using tax rates enacted,
or substantively enacted, by the end of the reporting period. Deferred tax assets are
recognised only to the extent that it is probable that future taxable profits will be
available against which the asset can be utilised. Deferred tax assets are reviewed at
each reporting date and reduced to the extent that it is no longer probable that the
related tax benefit will be realised.

Current tax assets and current tax liabilities are offset when there is a legally enforceable
right to set off the recognised amounts and there is an intention to settle the asset
and the liability on a net basis. Deferred tax assets and deferred tax liabilities are
offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities; and the deferred tax assets and the deferred tax liabilities relate
to income taxes levied by the same taxation authority.

Company has adopted Ind AS 116 "Leases" Starting April 01, 2019, with initial date of
application being April 01, 2019.

Accounting policy upto March 31, 2019:

The Company determines whether an arrangement contains a lease by assessing
whether the fulfillment of a transaction is dependent on the use of a specific asset
and whether the transaction conveys the right to use that asset to the Company in
return for payment. Where this occurs, the arrangement is deemed to include a lease
and is accounted for either as finance or operating lease. Leases are classified as
finance leases where the terms of the lease transfers substantially all the risks and
rewards of ownership to the lessee. All other leases are classified as operating leases.
Rentals payable under operating leases are charged to the statement of profit and loss
on a straight line basis over the term of the relevant lease unless another systematic
basis is more representative of the time pattern in which economic benefits from the
leased asset are consumed.

Accounting policy w.e.f. April 01,2019

The Company applied Ind AS 16 using the modified retrospective approach with a date
of initial application of 1 January 2019 and accordingly the comparative figures have
not been restated. Moreover, there was no impact of initial application on the balance
of retained earnings as of April 01, 2019. As a result, the Company has changed its
accounting policy for lease contracts as detailed below.

The Company as a lessee

At inception of a contract the Company assess whether a contract is, or contain a
lease. A contract is, or contains, a lease if contract conveys the right to control the use
of an identified asset for a period of time in exchange for consideration.

The Company recognises a right of use asset and a lease liability at the lease
commencement date. The right of use asset is initially measured at cost, which
comprises the initial amount of the lease liability adjusted for any lease payments
made at or before the commencement date, plus any initial direct costs incurred and
an estimate of costs to dismantle and remove the underlying asset or to restore the
underlying asset or the site on which it is located, less any lease incentives received.

The right of use asset is subsequently depreciated using the straight-line method from
the commencement date to the earlier of the end of the useful life of the right of use
asset or the end of the lease term. The estimated useful lives of right of use assets are
determined on the same basis as those of property, plant and equipment.

The lease liability is initially measured at the present value of the lease payments that
are not paid at the commencement date, discounted using the interest rate implicit
in the lease or if that rate cannot be readily determined, the Company's incremental
borrowing rate. Generally, the Company uses its incremental borrowing rate as the
discount rate. The lease liability is measured at amortised cost using the effective
interest method.

The Company as a lessor

When the Group acts as a lessor, it determines at lease inception whether each lease
is a finance lease or an operating lease. To classify each lease, the Group makes an
overall assessment of whether the lease transfers substantially all of the risks and
rewards incidental to ownership of the underlying asset. If this is the case, then the
lease is a finance lease; if not, then it is an operating lease. As part of this assessment,
the Group considers certain indicators such as whether the lease is for the major part
of the economic life of the asset.

2.15 Non-current assets held for sale and discontinued operations

Non-current assets and disposal groups classified as held for sale are
measured at the lower of their carrying value and fair value less costs to sell.
Assets and disposal groups are classified as held for sale if their carrying value will be
recovered through a sale transaction rather than through continuing use. Non-current
assets or disposal groups comprising of assetsand liabilities are classified as 'held for
sale' when all the following criteria are met: (i) decision has been made to sell, (ii) the
assets are available for immediate sale in its present condition, (iii) the assets are being
actively marketed and (iv) sale has been agreed or is expected to be concluded within
12 months of the Balance Sheet date.

2.16 Borrowing costs

Borrowing costs consist of interest and other costs that the Company incurred in
connection with the borrowing of funds. Borrowing costs that are directly attributable
to the acquisition and/or construction of a qualifying asset, till the time such qualifying
asset becomes ready for its intended use, are capitalized. A qualifying asset is one that
necessarily takes a substantial period to get ready for its intended use.

All other borrowing costs are charged to the Statement of Profit and Loss on an accrual
basis as per the effective interest rate method.

2.17 Expenditure

Expenses are accounted on accrual basis except coupon redemption scheme expenses
which are e recorded on actual paymen basis.

Basic earnings per share is computed by dividing the net profit for the period attributable
to the equity shareholders of the Company by the weighted average number of equity
shares outstanding during the period. The weighted average number of equity shares
outstanding during the period and for all periods presented is adjusted for events, such
as bonus shares, other than the conversion of potential equity shares that have changed
the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit for the period
attributable to equity shareholders and the weighted average number of shares
outstanding during the period is adjusted for the effects of all dilutive potential equity
shares.

The nature of reserves are as follows:

1. Securities premium reserve is used to record premium received on issue of shares. The reserve
is utilised in accordance with the provisions of the Companies Act, 2013 (the “Companies Act").

2. Other Comprehensive Income represents remeasurement gain/(loss) arising on defined
benefit plans of Company.

3. Retained Earnings is a free reserves that is available for distribution of dividends.

The Company activity during the year revolves around manufacturing and trading of wood
coating products. Considering the nature of Company's business and operations, as well as
based on review of operating results by the chief operating decision maker to make decision
about resource allocation and performance measurement, there is only one reportable business
segment viz. “Wood Coating Products" and a single geographical segment in accordance with
the requirement of Ind AS 108 - “Operating Segments". Accordingly no separate disclosures
has been made for segment reporting under Ind AS 108.

The Company's capital management objective is to maximise the total shareholder return by
optimising cost of capital through flexible capital structure that supports growth.

The Company determines the amount of capital required on the basis of annual operating
plan and long-term strategic plans. The funding requirements are met mostly through internal
accruals and some short-term borrowings. The Company monitors the capital structure on
the basis of Net debt to equity ratio and maturity profile of the overall debt portfolio of the
Company.

In all the financial years presented in these financial statements Company has negative net
debts and has met its capital requirements through internal accruals. For the purpose of
capital management, capital includes issued equity capital, securities premium and all other
reserves. Net debt includes short-term borrowings as reduced by cash and cash equivalents,
fixed deposits held with bank and margin money held with banks.

Note - 44: Financial Instruments

This note gives an overview of the significance of financial instruments for the Company and
provides additional information on balance sheet items that contain financial instruments.

The significant accounting policy in relation to financial instruments is contained in Note 2.9.

a) Financial assets and liabilities

The following tables presents the carrying value and fair value of each category of financial
assets and liabilities as at March 31, 2026, & March 31, 2025.

Valuation techniques with observable inputs (Level 2): This level of hierarchy includes
financial assets and liabilities, measured using inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly
(i.e., derived from prices). This level of hierarchy includes Company's over-the-counter (OTC)
derivative contracts.

Valuation techniques with significant unobservable inputs (Level 3): This level of hierarchy
includes financial assets and liabilities measured using inputs that are not based on observable
market data (unobservable inputs). Company does not hold any asset/liability that fall into this
category.

(i) Market risk - Foreign currency exchange rate risk:

The Company make significant amount of purchases in foreign currency which
exposes the Company to the risk of fluctuation in foreign currency exchange rates
which may have a potential impact on the statement of profit and loss and equity.

In order to protect itself from foreign currency movements, Company often enters into forward
exchange contracts from scheduled bank for its anticipated receipts. The exposure is such
contract is disclosed in Note 43(c) above.

(c) Derivative financial instruments

Derivative instruments used by the Company primarily include forward exchange contracts.
All transactions in derivative financial instruments are undertaken to manage risks arising
from underlying business activities. The Company does not hold or issue derivative financial
instruments for trading purpose.

d) Financial risk management

The Company's activities are primarily exposed to a credit risk and market risk arising from
movement in foreign exchange rates i.e. foreign exchange risk.

(ii) Credit risk

The credit risk exposure of the Company primarily arises from Cash and cash equivalents,
trade receivables, derivative financial instruments, financial assets measured at
amortised cost. Credit risk arises from the possibility that the counter party may not be
able to settle their obligations. To manage trade receivable, the Company periodically
assesses the financial reliability of customers, taking into account the financial conditions,
economic trends, analysis of historical bad debts and aging of such receivables.
None of the financial instruments of the Company results in material concentration of credit
risks.

Note 45: Employee benefit Plan

(A) Defined benefit Plan

The defined benefit plan operated by the Company is as below:

Retiring gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering
eligible employees. The plan provides for a lump-sum payment to vested employees at
retirement, death while in employment or on termination of employment of an amount equivalent
to 26 days salary payable for each completed year of service. Vesting occurs upon completion
of five years of service. The Company has taken a gratuity plan from Life Insurance Corporation
(LIC) and annual contributions are made to this plan . The Company accounts for the liability for
gratuity benefits payable in the future based on an actuarial valuation.

The defined benefit plans expose the Company to a number of actuarial risks as below:

(a) Interest risk: A decrease in the bond interest rate will increase the plan liability.

(b) Salary risk: The present value of the defined benefit plan liability is calculated by reference
to the future salaries of plan participants. As such, an increase in the salary of the plan
participants will increase the plan's liability.

(c) Longevity risk: The present value of the defined benefit plan liability is calculated by
reference to the best estimate of the mortality of plan participants. An increase in the life
expectancy of the plan participants will increase the plan's liability.

(B) Defined Contribution Plan
Provident fund and pension

In accordance with the Employee's Provident Fund and Miscellaneous Provisions Act, 1952,
eligible employees of the Company are entitled to receive benefits in respect of provident
fund, a defined contribution plan, in which both employees and the Company make monthly
contributions at a specified percentage of the covered employees' salary. The contributions,
as specified under the law, are made to the employee provident fund organization (EPFO).
The total expenses recognised in the statement of profit and loss during the year on account
of defined contribution plans amounted to Rs.85.76 Lakhs (PY: Rs. 77.99 Lakhs)

NOTE 46 DIVIDEND ON EQUITY SHARE

The Board of Directors of the Company have proposed final dividend of Rs 2.00 (Rupees Two
only) per equity share of the face value of Rs 10 each for the financial year ended 31 March
2026 which is further subject to the approval of the members at the ensuing Annual General
Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it
applies to declaration of dividend. The Board of Directors have made payment of final dividend
of Rs 1.50 (Rupees one and fifty paisa only) per equity share of the face value of Rs 10 each for
the financial year ended 31 March 2025.