III MATERIAL ACCOUNTING POLICY INFORMATION

The Company has consistently applied the following accounting policies to all periods presented in the financial
statements.

a) Property, plant and equipment and Capital Work in progress

i) Recognition and measurement

Property, plant and equipment are measured at cost net of taxes/duties credit availed, less accumulated
depreciation and accumulated impairment losses, if any.

Cost of an item of property, plant and equipment comprises its purchase price, including import duties and non¬
refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing
the item to its working condition for its intended use and estimated costs of dismantling and removing the item and
restoring the site on which it is located.

The cost of a self-constructed item of property, plant and equipment comprises the cost of materials and direct
labour, any other costs directly attributable to bringing the item to working condition for its intended use, and
estimated costs of dismantling and removing the item and restoring the site on which it is located.

Interest on borrowings used to finance the construction of qualifying assets are capitalized as part of cost of the
asset until such time that the asset is ready for its intended use. The present value of the expected cost for the
decommissioning of the asset after its use is included in the cost of the respective asset if the recognition criteria for
a provision are met.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for
as separate items (major components) of property, plant and equipment. The cost of replacing part of an item of
property, plant and equipment are recognised in the carrying amount of the item if it is probable that the future
economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The costs
of all other repairs and maintenance are recognised in the Statement of Profit & Loss as incurred.

Capital work-in-progress includes cost of property, plant and equipment under installation / under development as
at the balance sheet date. Advances paid towards the acquisition of property, plant and equipment outstanding at
each balance sheet date is classified as capital advances under other noncurrent assets.

An item of property, plant and equipment is derecognised when no future economic benefit are expected to arise
from the continued use of the asset or upon disposal. Any gain or loss on disposal of an item of property, plant and
equipment is recognised in profit or loss.

ii) Depreciation

Depreciation on property, plant and equipment is provided on the Straight Line Method based on the useful life of
assets as prescribed under Schedule II of the Companies Act, 2013, which are as follows:

Prior to the demerger, the Company had recognized Right-of-Use (ROU) assets related to leased premises used
for its manufacturing operations. These ROU assets were depreciated on a straight-line basis over the shorter
of the lease term and the useful life of the underlying asset.

In cases where buildings were constructed on ROU assets, depreciation was charged based on the lower of the
useful life prescribed under Schedule II of the Companies Act, 2013 or the balance lease term.

As at the reporting date, the Company does not hold any ROU assets. However, this accounting policy continues
to be retained in view of the possibility of entering into lease arrangements in future periods.

Depreciation on additions to or on disposal of assets is calculated on pro-rata basis i.e. from (upto) the date on
which the property, plant and equipment is available for use (disposed off).

The Company, based on technical assessment made by technical expert and management estimate,
depreciates these items of property, plant and equipment over lesser of the estimated useful life and useful life
prescribed in Schedule II to the Companies Act, 2013. The management believes that these estimated useful
lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.

b) Intangible assets

i) Recognition and measurement
Intangible Assets Acquired Separately

Intangible assets that are acquired by the Company are measured at cost. Subsequent to initial
recognition, the assets are measured at cost, less accumulated amortisation and accumulated
impairment losses, if any.

Subsequent expenditures are capitalized only when they increase the future economic benefits embodied
in the specific asset to which they relate.

All intangible assets are tested for impairment when there are indications that the carrying value may not
be recoverable. Impairment losses, if any, are recognised immediately in profit or loss.

An item of intangible asset is derecognised when no future economic benefit are expected to arise from the
continued use of the asset or upon disposal. Any gain or loss on disposal of an item of intangible assets is
recognised in profit or loss.

ii) Amortisation

Amortization is recognised in the Statement of Profit & Loss on a straight-line basis over the estimated
useful lives of intangible assets or on any other basis that reflects the pattern in which the asset's future
economic benefits are expected to be consumed by the entity. Intangible assets that are not available for
use are amortized from the date they are available for use.

The estimated useful lives are as follows:

Software : 5 years

The amortization period and the amortization method for intangible assets are reviewed at each reporting
date.

c) Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than
inventories and deferred tax assets) to determine whether there is any indication on impairment. If any such
indication exists, then the asset's recoverable amount is estimated.

The recoverable amount of an asset or a cash generating unit is higher of its fair value less cost of disposal and
value in use. Value in use is based on the estimated future cash flows, discounted to their present value using a pre¬
tax discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset.

An impairment loss is recognised if the carrying amount of an asset exceeds its estimated recoverable amount.
Impairment l osses are recognised in Statement of Profit and Loss

In respect of assets for which impairment loss has been recognised in prior periods, the Company reviews at each
reporting date whether there is any indication that the loss has decreased or no longer exists. An impairment loss is
reversed if there has been a change in the estimates used to determine the recoverable amount. Such a reversal is

made only to the extent that the assets carrying amount does not exceed the carrying amount that would have been
determined net of depreciation or amortisation, if no impairment loss had been recognised.

After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful
life.

d) Financial Instruments

i) Initial recognition

The Company recognises financial assets and financial liabilities when it becomes a party to the contractual
provisions of the instrument. All financial assets and liabilities are recognised at fair value on initial
recognition, except for trade receivables which are initially measured at transaction price. Transaction costs
that are directly attributable to the acquisition or issue of financial assets and financial liabilities, that are not
at fair value through profit or loss, are added to the fair value on initial recognition. Regular way purchase and
sale of financial assets are accounted for at trade date.

ii) Subsequent measurement

(a) Financial assets carried at amortised cost

A financial asset is subsequently measured at amortised cost by applying the Effective Interest Rate (EIR)
Method to gross carrying amount of the financial asset, if it is held within a business model whose objective
is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial
asset give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding. When the financial asset is derecognised or impaired, the gain or loss is
recognised in the statement of profit and loss.

(b) Financial assets at fair value through other comprehensive income

Financial instruments are subsequently measured at fair value . On initial recognition of an equity
investment that is not held for trading, the Company may irrevocably elect to present subsequent changes
in the investment's fair value in OCI (designated as FVOCI - equity investment). This election is made on an
investment by investment basis. Fair value gains and losses recognised in OCI are not reclassified to profit
and loss.

(c) Financial assets at fair value through profit or loss

Financial assets which is not classified in any of the above categories are subsequently fair valued through
profit or loss.

(d) Financial liabilities

Financial liabilities are subsequently carried at amortized cost using the effective interest rate method. For
trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts
approximate fair value due to the short maturity of these instruments.

(e) Reclassification of Financial Assets and Financial Liabilities

The company determines classification of financial assets and liabilities on initial recognition. After initial
reclassification is made only if there is a change in the business model for managing those assets. If the
Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification
date which is the first day of the immediately next reporting period following the change in business model.
The Company does not restate any previously recognised gains, losses (including impairment gains or
losses) or interest.

(f) Investment in subsidiary

Investment in subsidiaries is carried at cost.

iii) Impairment of financial assets

The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at
amortised cost and FVOCI debt instruments. Except Trade receivables, expected credit losses are measured at an

amount equal to the 12-month Expected Credit Loss (ECL), unless there has been a significant increase in credit
risk from initial recognition, in which case those are measured at lifetime ECL.

With regard to trade receivable, the Company applies the simplified approach, which requires expected lifetime
losses to be recognised from the initial recognition of the trade receivables.

iv) Derecognition
Financial Assets

Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset
expire or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the
risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor
retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset.

If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains
either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not
derecognised.

Financial Liabilities

The Company derecognises a financial liability when its contractual obligations are discharged, cancelled or
expired.

v) Derivative financial instruments

Derivative financial instruments, such as forward currency contracts to hedge its foreign currency risks and interest rate
risk respectively are initially recognised at fair value on the date on which a derivative contract is entered into and are
subsequently re-measured at fair value provided by the respective banks. Derivatives are carried as financial assets when
the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes
in the fair value of derivatives are recorded directly to statement of profit and loss.

(vi) Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and
only when, the Company has a legally enforceable right to set off the amounts and it intends either to settle them on
a net basis or to realise the asset and settle the liability simultaneously.

e) Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date, regardless of whether that price is directly observable or
estimated using other valuation technique. In estimating the fair value of an asset or a liability, the Company takes
into account the characteristics of the asset or liability if market participants would take those characteristics into
account when pricing the asset or liability at the measurement date.

Fair values for measurement and/ or disclosure purposes are categorised into Level 1, 2 or 3 based on the degree
to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair
value measurement in its entirety, which are described as follows:

Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable

Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable

f) Inventories

Prior to the demerger, inventories pertained to the Company's manufacturing operations and were valued at the
lower of cost and net realizable value. Cost included material, labour, and attributable overheads including
depreciation.

Following the demerger of the Chemical Manufacturing Division with effect from July 1, 2024, the Company has

ceased manufacturing activities. The Company is now engaged only in Commodity trading. Inventories, if any, held
for trading purposes are measured at the lower of cost and net realizable value. Cost is determined on a weighted
average basis and includes purchase cost and other directly attributable expenses.