Accounting Policies of National Peroxide Ltd. Company

Mar 31, 2025

(b) Material Accounting Policies

(i) Segment reporting:

Operating segments are reported in a manner
consistent with the internal reporting provided to
the Chief Operating Decision-Maker (CODM).

The Chief Executive Officer and Executive Director
of the Company has been identified as CODM
and he is responsible for allocating resources,
assessing the financial performance and position
of the Company and make strategic decisions.

The Company has identified one reportable
segment ''manufacturing of peroxygens'' based on
information reviewed by the CODM. Refer note 36
for segment information presented.

(ii) Foreign currency translation:

(a) Functional and presentation currency

Items included in the financial statements of the
Company are measured using the currency of
the primary economic environment in which the
Company operates (''the functional currency'').
The financial statements are presented in ''Indian
Rupees'' (INR), which is the Company''s functional
and presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into
the functional currency using the exchange rates
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
generally recognized in profit or loss. They are
deferred in equity if they relate to qualifying cash
flow hedges.

(iii) Revenue recognition:

Revenue from sale of goods

Revenue is generated primarily from sale of
peroxygens. Revenue is recognized at the point in
time when the performance obligation is satisfied

and control of the goods is transferred to the
customer upon dispatch or delivery, in accordance
with the terms of customer contracts. Revenue
is recognized at an amount that the Company
expects to receive from customers that is net
of various discounts. Discounts include trade
discounts and cash discounts.

A contract liability is the obligation to transfer
goods to the customer for which the Company
has received consideration from the customer.
Contract liabilities are recognized as revenue
when the Company performs under the contract.

(iv) Government Grants and Incentives:

Other operating income includes export and
other recurring and non-recurring incentives
from Government (referred as "incentives”).
Government grants are recognised when there
is a reasonable assurance that the Company
will comply with the relevant conditions and the
grant will be received. Government grants are
recognised in the statement of profit and loss,
either on a systematic basis when the Company
recognises, as expenses, the related costs
that the grants are intended to compensate
or, immediately if the costs have already been
incurred. Government grants related to assets
are deferred and amortised over the useful
life of the asset. Government grants related to
income are presented as an offset against the
related expenditure, and government grants
that are awarded as incentives with no ongoing
performance obligations to the Company are
recognised as income in the period in which the
grant is received.

(v) Income tax:

The income tax expense or credit for the period
is the tax payable on the current period''s taxable
income based on the applicable income tax
rate for each jurisdiction adjusted by changes in
deferred tax assets and liabilities attributable to
temporary differences and to unused tax losses.

Current tax is measured using tax rates that
have been enacted by the end of reporting
period for the amounts expected to be recovered
from or paid to the taxation authorities.
Management periodically evaluates positions

taken in tax returns with respect to situations
in which applicable tax regulation is subject
to interpretation and considers whether it is
probable that a taxation authority will accept an
uncertain tax treatment. The Company measures
its tax balances either based on the most likely
amount or the expected value, depending on
which method provides a better prediction of the
resolution of the uncertainty.

Deferred income tax is provided in full, using
the liability method, on temporary differences
arising between the tax base of assets and
liabilities and their carrying amounts in the
financial statements. Deferred income tax is not
accounted for if it arises from initial recognition
of an asset or liability in a transaction other than
a business combination that at the time of the
transaction affects neither accounting profit nor
taxable profit (tax loss). Deferred income tax is
determined using tax rates (and laws) that have
been enacted or substantially enacted by the
end of the reporting period and are expected to
apply when the related deferred income tax asset
is realised, or the deferred income tax liability
is settled.

Deferred tax assets are recognized for all
deductible temporary differences and unused
tax losses only if it is probable that future
taxable amounts 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 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.

Current and deferred tax is recognized in Profit
or Loss, except to the extent that it relates to
items recognized in other comprehensive income
or directly in equity. In this case, the tax is also
recognized in other comprehensive income or
directly in equity, respectively.

(vi) Leases
As a lessee

Leases are recognized as a right-of-use asset
and corresponding liability at the date which the
lease 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 relative stand¬
alone prices.

The Company assesses whether a contract is or
contains a lease at inception of the contract. This
assessment involves the exercise of judgement
about whether there is an identified asset,
whether the Company has the right to direct
the use of the asset and whether the Company
obtains substantially all the economic benefits
from the use of that asset.

Assets and liabilities arising from lease are initially
measured on present value basis. Lease liabilities
include the net present value of the following
lease payments:

- Fixed payments (including in-substance
fixed payments), less any lease
incentives receivable

- Variable lease payments 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.

- The exercise price of a purchase option if the
Company is reasonably certain to exercise
that option, and

- Payment of penalties for terminating the
lease, if the lease term reflects the Company
exercising that option.

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 the interest rate implicit in
the lease. If the rate cannot be readily determined,
the lessee''s incremental borrowing rate is used,
being the rate that the individual lessee would
have to pay to borrow the funds necessary to

obtain an asset of similar value to the right-of-use
in a similar economic environment with similar
terms, security and conditions.

To determine the incremental borrowing rate,
the Company:

- where possible, uses recent third-party
financing received by the individual lessee
as a starting point, adjusted to reflect
changes in financing conditions since third
party financing was received.

- uses a build-up approach that starts with a
risk-free interest rate adjusted for credit risk
for leases held by the Company, which does
not have recent third party financing.

- makes adjustments specific to the lease,
e.g. term, country, currency and security.

If a readily observable amortising loan rate is
available to the individual lessee (through recent
financing or market data) which has a similar
payment profile to the lease, then the Company
use that rate as a starting point to determine the
incremental borrowing rate.

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

- t he amount of the initial measurement of
lease liability

- any lease payments made at or before the
commencement of date less any lease
incentives received

- any initial direct costs, and

- restoration costs.

Right-of-use assets are generally depreciated
over the shorter of the asset''s useful life and lease
term on a straight-line basis. If the Company is
reasonably certain to exercise a purchase option,
the right-of-use asset is depreciated over the
underlying asset''s useful life.

The company has elected not to apply the
requirements of IND AS 116 Leases to short-term
leases of all assets that, at the commencement
date, have a lease term of 12 months or less
and leases for which the underlying asset is of
low value. The lease payments associated with
these leases are recognized as an expense on a
straight-line basis over the lease term.

(vii) Impairment of non-financial assets:

Assets are tested for impairment, whenever
events or changes in circumstances indicate that
the carrying amount may not be recoverable. An
impairment loss is recognized 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 that suffered an impairment are
reviewed for possible reversal of the impairment
at the end of each reporting period.

(viii) Cash and Cash Equivalents:

Cash and cash equivalents in the balance sheet
comprise cash at bank and on hand, and short¬
term deposits 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 changes in value. For the
purpose of statement of cashflow cash and cash
equivalent consist of cash and short-term deposit
as defined above.

(ix) Trade Receivables:

Trade receivables are amounts due from
customers for goods sold in the ordinary course
of business. Trade receivables are recognized
initially at the amount of consideration that is
unconditional unless they contain significant
financing components, when they are
recognized at fair value. The Company holds
the trade receivables with the objective to

collect the contractual cash flows and therefore
measures them

subsequently at amortised cost using the
effective interest method, less loss allowance.

(x) Inventories:

I nventories are valued at lower of cost and net
realisable value. In the case of raw materials,
packing materials, traded goods and stores and
spares parts, cost is determined in accordance
with the moving weighted average principle.
Costs include the purchase price, non -
refundable taxes and delivery and handling
costs. Cost of finished goods includes all costs
of purchases, direct materials, direct labour and
appropriate proportion of variable and fixed
overheads expenditure, the latter being 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. The net realisable value is the
estimated selling price in the ordinary course of
business less the estimated costs of completion
and estimated costs necessary to make the sale.

(xi) Investments and other financial instruments:

(a) Financial Instruments

Financial assets and financial liabilities are
recognised when the Company becomes a party
to the contractual provisions of the instruments.

Initial recognition and measurement

Financial assets and financial liabilities are initially
measured at fair value except for trade receivables
not containing significant financing component
are initially measured at transaction price.
Transaction costs that are directly attributable
to the acquisition or issue of financial assets and
financial liabilities (other than those measured
at fair value through profit or loss) are added to
or deducted from the fair value of the financial
assets or financial liabilities, as appropriate, on
initial recognition. Transaction costs directly
attributable to the acquisition of financial assets
or financial liabilities at fair value through profit or
loss are recognised immediately in the statement
of Profit or loss.

The classification of a financial asset depends
on the entity''s business model for managing the
financial assets and the contractual terms of the
cash flows. 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 profit or loss), and

• those measured at amortised cost

Financial assets measured at amortised cost

Financial assets that are held for the collection
of contractual cash flow where those cash
flows represent solely payments of principal and
interest are measured at amortised cost Interest
income from these financial assets is included
in finance income using the effective interest
rate method.

Financial assets measured at fair value
through other comprehensive Income
(FVTOCI)

Assets that are held for the 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
(FVTOCI). Changes in fair value of instrument is
taken to other comprehensive income which are
reclassified to the statement of profit or loss.

Financial assets measured at fair Value
through profit or loss (FVTPL)

Financial assets that do not meet the criteria for
amortised cost or FVTOCI are measured as 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. Dividend income
from these financial assets is included in other
income once the Company''s right to receive the
dividend is established and it is probable that the
economic benefits associated with the dividend
will flow to the entity.

The Company assesses on a forward-looking
basis the expected credit losses associated
with its assets carried at amortised cost. The
impairment methodology applied depends on
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.

Derecognition of Financial Assets

A financial assets is derecognised only when
the company has transferred the right to receive
cash flows from the financial assets or retains
the contractual rights to receive the cash
flows of the financial assets, but assumes a
contractual obligation to pay 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.

(c) Financial Liabilities & Equity Instruments

An instrument issued by a company are classified
as either financial liabilities or as equity in
accordance with the substance of the contractual
arrangements and the definitions of a financial
liability and an equity instrument.

Financial Liabilities

Subsequent measurement of financial liabilities

Financial liabilities at fair value through profit
and loss

Financial liabilities at fair value through profit and
loss include financial liabilities held for trading.
The Company has not designated any financial
liabilities upon initial recognition at fair value
through profit and loss.

Financial liabilities measured at amortised
cost

All the financial liabilities are subsequently
measured at amortised cost using the effective
interest rate method. Amortised cost is
calculated by taking into account any discount or
premium on acquisition and fees or costs that are
an integral part of the EIR. The EIR amortisation
is included as finance costs in the statement
of profit and loss. Company does not owe any
financial liabilities which is held for trading.

Derecognition of Financial Liabilities

A financial liability (or, where applicable, a part
of a financial liability) is primarily derecognised
when, and only when, the obligation under the
liability is discharged or cancelled or expires.

Effective interest method

The effective interest method is a method of
calculating the amortised cost of a financial
asset or financial liability and of allocating
interest income/ interest expenses over the
relevant period. The effective interest rate is the
rate that exactly discounts estimated future cash
receipts/ payments (including all fees and points
paid or received that form an integral part of the
effective interest rate, transaction costs and other
premiums or discounts) through the expected life
of the debt instrument, or, where appropriate,
a shorter period, to the net carrying amount on
initial recognition.

(xii) Offsetting Financial Instruments:

Financial assets and liabilities are offset, and the
net amount reported in the balance sheet when
there is a legally enforceable right to offset the

recognised amounts and there is an 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 Company
or the counterparty.

(xiii) Income recognition:

Interest income

Interest income from financial assets is recognized
using the effective interest rate method.

Interest income is calculated by applying the
effective interest rate to the gross carrying
amount of a financial asset except for financial
assets that subsequently become credit-
impaired. For credit-impaired financial assets the
effective interest rate is applied to the net carrying
amount of the financial asset (after deduction of
the loss allowance).

(xiv) Property, plant and equipment:

All other items of property, plant and equipment
are stated at historical cost less depreciation
and impairment, if any. 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 recognized 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 derecognized when replaced.
All other repairs and maintenance are charged to
profit or loss during the reporting period in which
they are incurred.

Expenditure incurred on assets which are not
ready for their intended use comprising direct
cost, related incidental expenses and attributable
borrowing cost are disclosed under Capital Work-
in-Progress.

Depreciation methods, estimated useful lives and
residual value:

Depreciation is calculated using Straight Line
Method (SLM) to allocate their cost, net of their
residual values, over their estimated useful lives.
The useful lives have been determined based on
technical evaluation done by the management,
which is in line with those specified by Schedule
II to the Companies Act, 2013 except for catalyst
and working solutions where useful life ranges
between 3 to 25 years based on technical
assessment. The residual values are at 5% of the
original cost of the asset.

The assets'' residual values and useful lives are
reviewed, 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.

Gains and losses on disposals are determined
by comparing proceeds with carrying amount.
These are included in profit or loss within other
gains/ (losses).

The estimated useful lives of the property, plant
and equipment are as under:

(xv) Intangible assets:

I ntangible assets being computer software and
license, are stated at acquisition cost, net of
accumulated amortization and accumulated
impairment losses, if any.

Amortization is recognized on a straight-line basis
over their estimated useful lives. The estimated
useful life and amortization method are reviewed
at the end of each reporting period, with the effect
of any changes in estimate being accounted for
on a prospective basis.

Gains or losses arising from the retirement or
disposal of an intangible asset are determined
as the difference between the disposal proceeds
and the carrying amount of the asset and
are recognized as income or expense in the
Statement of Profit and Loss.

Cost of software is amortised over a period of 5
years being the estimated useful life and license
is amortised over a period of its validity.

(xvi) Trade and other payables:

These amounts represent liabilities for goods and
services provided to the Company prior to the end
of the financial year which are unpaid. Trade and
other payables are presented as current liabilities
unless the payment is not due within 12 months
of reporting period. Trade and other payables are
initially recognized at fair value and subsequently
measured at amortised cost using the effective
interest method.

(xvii) Borrowings:

Borrowings are initially recognized at fair value,
net of transaction costs incurred. Borrowings
are subsequently measured at amortised cost.
Any difference between the proceeds (net of
transaction costs) and the redemption amount
is recognized in profit or loss over the period of
borrowings using the effective interest method.
Fees paid on the establishment of loan facilities
are recognized as transaction costs of the loan
to the extent that it is probable that some or all
of the facility will be drawn down. In this case, the
fee is deferred until the draw down occurs. To the
extent there is no evidence that it is probable that
some or all of the facility will be drawn down, the
fee is capitalised as a prepayment for liquidity
services and amortised over the period of the
facility to which it relates.

Borrowings are removed from the Balance Sheet
when the obligation specified in the contract is
discharged, cancelled or expired. The difference
between the carrying amount of a financial
liability that has been extinguished or transferred
to another party and the consideration paid,
including any non-cash assets transferred or
liabilities assumed, is recognized in profit or loss
as other gains / (losses).

Borrowings are classified as current liabilities
unless the Company has an unconditional right
to defer settlement of the liability for at least 12
months after the reporting period.

---

Mar 31, 2024

1) General information:

National Peroxide Limited (formerly known as NPL Chemicals Limited) ("NPL", "the Company") is a public limited Company incorporated on July 29, 2020 under the provisions of the Companies Act, 2013 with ROC-Mumbai with CIN U24290MH2020PLC342890. The Company’s registered office is situated at Neville House, J.N. Heredia Marg, Ballard Estate, Mumbai -400001.

Pursuant to the Composite Scheme of Arrangement (Refer note 4) the Chemical Business Undertaking of Naperol Investments Limited (formerly known as National Peroxide Limited) ("Demerged Company") was demerged into the Company. Consequent thereto, the Company will continue to be manufacturer of Hydrogen Peroxide in India, with an installed capacity of 150 KTPA on 50% w/w. basis.

2) Material accounting policies:Basis of preparation, measurement and material accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

(a) Basis of preparation

(i) Compliance with Ind AS

The words financial statements in the accounts should read as Ind-AS financial statements. These financial statements are the separate financial statements of the Company and comply in all material aspects with the Indian Accounting Standards ("Ind AS") notified under section 133 of the Companies Act, 2013 ("the Act"), read together with the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time, relevant provisions of the Act and other accounting principles generally accepted in India.

(ii) Historical cost convention

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

• Certain financial assets and financial liabilities are measured at fair value (including derivative instruments);

• Defined benefit plans - plan assets are measured at fair value.

• Assets held for sale - measured at fair value less cost to sell.

(iii) Recent pronouncements-

Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31,2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

(iv) Current vis-a-vis non-current classification

The assets and liabilities reported in the balance sheet are classified on a "current / non-current basis".

An asset is classified as current when it is expected to be realised or intended to be sold or consumed in normal operating cycle, held primarily for the purpose of trading, expected to be realised within twelve months after the reporting period, or cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is classified as current when it is expected to be settled in normal operating cycle, it is held primarily for the purpose of trading, it is due to be settled within twelve months after the reporting period, or there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

The Company has determined its operating cycle as twelve months for the purpose of current -non-current classification of assets and liabilities. Deferred tax assets and liabilities, and all assets and liabilities which are not current are classified as non-current assets and liabilities.

The derivatives designated in hedging relationship and separated embedded derivatives are classified basis the hedged item and host contract respectively.

(b) Material Accounting Policies

(i) Business Combination

The acquisition method of accounting is used to account for all business combinations (other than common control business combinations), regardless of whether equity instruments or other assets are acquired. The acquisition date is the date on which control is transferred to the acquirer. Judgement is applied in determining the acquisition date and determining whether control is transferred from one party to another. The excess of the consideration transferred over the fair value of the net identifiable assets acquired is recorded as goodwill. The cost of acquisition also includes the fair value of any contingent consideration. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value on the date of acquisition. Goodwill is not amortised but it is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses.

Business combinations arising from transfers of interests in entities that are under common control are accounted for using the pooling of interest method and as per the provisions of the Scheme approved by the regulator. The difference between any consideration transferred and the aggregate historical carrying values of assets and liabilities of the acquired entity are recognised in Capital reserve.

(ii) Segment reporting:

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision-Maker (CODM).

The Chief Executive Officer and Executive Director of the Company has been identified as CODM and he is responsible for allocating resources, assessing the financial performance and position of the Company and make strategic decisions. The Company has identified one reportable segment ''manufacturing of peroxygens’ based on

information reviewed by the CODM. Refer note 40 for segment information presented.

(iii) Foreign currency translation:

(a) Functional and presentation currency

Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the Company operates (''the functional currency’). The financial statements are presented in ''Indian Rupees’ (''), which is the Company’s functional and presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates 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 generally recognised in profit or loss. They are deferred in equity if they relate to qualifying cash flow hedges.

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. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation differences on non-monetary assets and liabilities such as equity instruments held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss and translation differences on non-monetary assets such as equity investments classified as FVOCI are recognised in other comprehensive income.

(iv) Revenue recognition:

Revenue from sale of goods

Revenue is generated primarily from sale of peroxygens. Revenue is recognised at the point in time when the performance obligation is satisfied and control of the goods is transferred to the customer upon dispatch or delivery, in accordance with the terms of customer contracts. Revenue is recognised at an amount that the Company expects to receive from customers that is net of trade discounts and goods and service tax (GST). A contract liability is the obligation to transfer goods to the customer for which the Company has received consideration from the customer. Contract liabilities are recognised as revenue when the Company performs under the contract.

(v) Government Grants and Incentives:

Other operating income includes export and other recurring and non-recurring incentives from Government (referred as "incentives"). Government grants are recognised when there is a reasonable assurance that the Company will comply with the relevant conditions and the grant will be received. Government grants are recognised in the statement of profit and loss, either on a systematic basis when the Company recognises, as expenses, the related costs that the grants are intended to compensate or, immediately if the costs have already been incurred. Government grants related to assets are deferred and amortised over the useful life of the asset. Government grants related to income are presented as an offset against the related expenditure, and government grants that are awarded as incentives with no ongoing performance obligations to the Company are recognised as income in the period in which the grant is received.

(vi) Income tax:

The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. Current tax is measured using tax rates that have been enacted by the end of reporting period for the amounts expected to be recovered from or paid to the taxation authorities. Management periodically evaluates positions taken in tax returns with respect

to situations in which applicable tax regulation is subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Company measures its tax balances either based on the most likely amount or the expected value, depending on which method provides a better prediction of the resolution of the uncertainty.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax base of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit (tax loss). Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised, or the deferred income tax liability is settled.

Deferred tax assets are recognized for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts 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 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.

Current and deferred tax is recognized in Profit or Loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

(vii) Leases As a lessee

Leases are recognized as a right-of-use asset and corresponding liability at the date which the lease asset is available for use by the Company. Contracts may contain both lease and nonlease components. The Company allocates the consideration in the contract to the lease and non-lease components based on relative standalone prices.

The Company assesses whether a contract is or contains a lease at inception of the contract. This assessment involves the exercise of judgement about whether there is an identified asset, whether the Company has the right to direct the use of the asset and whether the Company obtains substantially all the economic benefits from the use of that asset.

Assets and liabilities arising from lease are initially measured on present value basis. Lease liabilities include the net present value of the following lease payments:

- Fixed payments (including in-substance fixed payments), less any lease incentives receivable

- Variable lease payments 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.

- The exercise price of a purchase option if the Company is reasonably certain to exercise that option, and

- Payment of penalties for terminating the lease, if the lease term reflects the Company exercising that option.

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 the interest rate implicit in the lease. If the rate cannot be readily determined, the lessee’s incremental borrowing rate is used,

being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use in a similar economic environment with similar terms, security and conditions.

To determine the incremental borrowing rate, the Company:

- where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect changes in financing conditions since third party financing was received.

- uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by the Company, which does not have recent third party financing.

- makes adjustments specific to the lease, e.g. term, country, currency and security.

If a readily observable amortising loan rate is available to the individual lessee (through recent financing or market data) which has a similar payment profile to the lease, then the Company use that rate as a starting point to determine the incremental borrowing rate.

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 of date less any lease incentives received

- any initial direct costs, and

- restoration costs.

Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and lease term on a straight-line basis. If the Company is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s useful life.

The Company has elected not to apply the requirements of IND AS 116 Leases to short-term leases of all assets that, at the commencement date, have a lease term of 12 months or less and leases for which the underlying asset is of low value. The lease payments associated with these leases are recognised as an expense on a straight-line basis over the lease term.

(viii) Impairment of non-financial assets:

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). Nonfinancial assets that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

(ix) Cash and Cash Equivalents:

Cash and cash equivalents in the balance sheet comprise cash at bank and on hand, and shortterm deposits 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 changes in value. For the purpose of statement of cashflow cash and cash equivalent consist of cash and short-term deposit as defined above.

(x) Trade Receivables:

Trade receivables are amounts due from customers for goods sold in the ordinary course of business. Trade receivables are recognised initially at the amount of consideration that is unconditional unless they contain significant financing components, when they are recognised at fair value. The Company holds the trade receivables with the objective to collect the

contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method, less loss allowance.

(xi) Inventories:

Inventories are valued at lower of cost and net realisable value. In the case of raw materials, packing materials, traded goods and stores and spares parts, cost is determined in accordance with the moving weighted average principle. Costs include the purchase price, non - refundable taxes and delivery and handling costs. Cost of finished goods includes all costs of purchases, direct materials, direct labour and appropriate proportion of variable and fixed overheads expenditure, the latter being 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. The net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and estimated costs necessary to make the sale.

(xii) Non-Current assets held for sale

Non- current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and sale is considered highly probable. They are measured at lower of their carrying amount and fair value less costs to sell.

An impairment loss is recognised for any initial or subsequent write-down of the asset to fair value less costs to sell. A gain is recognised for subsequent increase in fair value less costs to sell of an asset, but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non -current asset is recognised at the date of de-recognition.

Non-Current assets are not depreciated or amortised while they are classified as held for sale. Non-current assets classified as held for sale are presented separately from the other assets in the balance sheet. The liabilities of a disposal group

classified as held for sale are presented separately from other liabilities in the balance sheet.

(xiii) Investments and other financial instruments:

(a) Financial Instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments. Initial recognition and measurement

Financial assets and financial liabilities are initially measured at fair value except for trade receivables not containing significant financing component are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than those measured at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in the statement of Profit or loss.

(b) Classification and subsequent measurement of financial assets

The classification of a financial asset depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows. 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 profit or loss), and

• those measured at amortised cost Financial assets measured at amortised cost Financial assets that are held for the collection of contractual cash flow where those cash flows represent solely payments of principal and interest are measured at amortised cost Interest income from these financial assets is included in finance income using the effective interest rate method.

Financial assets measured at fair value through other comprehensive Income (FVTOCI)

Assets that are held for the 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 (FVTOCI). Changes in fair value of instrument is taken to other comprehensive income which are reclassified to the statement of profit or loss. Financial assets measured at fair Value through profit or loss (FVTPL)

Financial assets that do not meet the criteria for amortised cost or FVTOCI are measured as 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. Dividend income from these financial assets is included in other income once the Company’s right to receive the dividend is established and it is probable that the economic benefits associated with the dividend will flow to the entity.

Impairment of Financial Assets The Company assesses on a forward-looking basis the expected credit losses associated with its assets carried at amortised cost. The impairment methodology applied depends on 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.

Derecognition of Financial Assets A financial assets is derecognised only when the Company has transferred the right to receive cash flows from the financial assets or retains the contractual rights to receive the cash flows of the financial assets, but assumes a contractual obligation to pay 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.

(c) Financial Liabilities & Equity Instruments

An instrument issued by a company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs. Repurchase of the Company’s own equity instruments is recognised and deducted directly in equity. No gain or loss ls recognised in Statement of Profit and Loss on the purchase, sale, issue or cancellation of the Company’s own equity instruments. Dividend paid on equity instruments are directly reduced from equity. Financial Liabilities

Subsequent measurement of financial liabilities Financial liabilities at fair value through profit and loss

Financial liabilities at fair value through profit and loss include financial liabilities held for trading. The Company has not designated any financial liabilities upon initial recognition at fair value through profit and loss.

Financial liabilities measured at amortised cost

All the financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss. Company does not owe any financial liabilities which is held for trading.

Derecognition of Financial Liabilities A financial liability (or, where applicable, a part of a financial liability) is primarily derecognised when, and only when, the obligation under the liability is discharged or cancelled or expires.

Effective interest method The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability and of allocating interest income/ interest expenses over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts/ payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

(d) Derivatives and hedging activities

The Company enters into derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risks such as cross currency interest rate swaps.

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged, and the type of hedge relationship designated.

The Company designates derivatives as hedges of a particular risk associated with the cash flows of recognised assets and liabilities (cash flow hedges). The Company has designated the crosscurrency interest rate swap as a cash flow hedge for changes in both interest rate and foreign exchange rates.

At the inception of the hedge relationship, the Company documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Company documents whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item attributable to the hedged risk.

The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 12 months; it is classified as a current asset or liability when the remaining maturity of the hedged item is less than 12 months.

Cash flow hedges that qualify for hedge accounting

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in cash flow hedging reserve within equity. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss, within other gains/ (losses).

Amounts previously recognised in other comprehensive income and accumulated in equity relating to effective portion as described above are reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same line as the recognised hedged item. However, when the hedged forecast transaction results in the recognition of a non-financial asset or a non-financial liability, such gains and losses are transferred from equity (but not as a reclassification adjustment) and are included in the initial measurement of the cost of the nonfinancial asset or non-financial liability.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any gain or loss recognised in other comprehensive income and accumulated in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is reclassified immediately in profit or loss.

If the hedge ratio for risk management purposes is no longer optimal but the risk management objective remains unchanged and the hedge continues to qualify for hedge accounting, the hedge relationship will be rebalanced by adjusting either the volume of the hedging instrument or the volume of the hedged item so that the hedge ratio aligns with the ratio used for risk management purposes. Any hedge ineffectiveness is calculated and accounted for in profit or loss at the time of the hedge relationship rebalancing.

Embedded derivatives

Derivatives embedded in a host contract that is an asset within the scope of Ind AS 109 are not separated. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

Derivatives embedded in all other host contract are separated only if the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host and are measured at fair value through profit or loss. Embedded derivatives closely related to the host contracts are not separated.

Derivatives that are not designated as hedges

The Company enters certain derivative contracts to hedge risk which are not designated as hedges. Such contracts are accounted for at fair value through profit or loss and are included in other gains/(losses).

(xiv) Offsetting Financial Instruments:

Financial assets and liabilities are offset, and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an 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 Company or the counterparty.

(xv) Income recognition:

Interest income

Interest income from financial assets is recognized using the effective interest rate method.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for financial assets that subsequently become credit-impaired. For credit-impaired financial assets the effective interest rate is applied to the net carrying amount of the financial asset (after deduction of the loss allowance).

Dividend

Dividends are received from financial assets at fair value through profit or loss and at FVOCI. Dividends are recognised as other income in profit or 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.

(xvi) Property, plant and equipment:

All other items of property, plant and equipment are stated at historical cost less depreciation and impairment, if any. 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.

Expenditure incurred on assets which are not ready for their intended use comprising direct cost, related incidental expenses and attributable borrowing cost are disclosed under Capital Work-in-Progress.

Depreciation methods, estimated useful lives and residual value:

Depreciation is calculated using Straight Line Method (SLM) to allocate their cost, net of their residual values, over their estimated useful lives. The useful lives have been determined based on technical evaluation done by the management, which is in line with those specified by Schedule II to the Companies Act, 2013 except for catalyst and working solutions where useful life ranges between 3 to 25 years based on technical assessment. The residual values are at 5% of the original cost of the asset.

The assets’ residual values and useful lives are reviewed, 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.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss within other gains/ (losses).

The estimated useful lives of the property, plant and equipment are as under:

Sr No	Class of assets	Estimated useful life
A	Freehold Building	05 - 60 years
B	Furniture and fixtures	10 years
C	Plant and equipment	05 - 25 years
D	Office equipment	03 - 05 years
E	Computer	3 years
F	Vehicles	05 - 08 years

(xvii) Intangible assets:

Intangible assets being computer software, are stated at acquisition cost, net of accumulated amortisation and accumulated impairment losses, if any.

Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

Gains or losses arising from the retirement or disposal of an intangible asset are determined as the difference between the disposal proceeds and the carrying amount of the asset and are recognised as income or expense in the Statement of Profit and Loss.

Cost of software is amortised over a period of 5 years being the estimated useful life.

(xviii) Trade and other payables:

These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year which are unpaid. Trade and other payables are presented as current liabilities unless the payment is not due within 12 months of reporting period. Trade and other payables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method.

(xix) Borrowings:

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

Borrowings are removed from the Balance Sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other gains / (losses).

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

(xx) Borrowing Costs:

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. Other borrowing costs are expensed in the period in which they are incurred.

(xxi) Provisions and Contingencies:

(a) 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 will be required to settle the obligation; and the amount has been reliably estimated.

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 pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.

(b) Contingent liabilities

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. A present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or reliable estimate of the amount cannot be made, is termed as contingent liability.

(c) Contingent assets

A contingent asset is a possible asset that arises 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. Contingent assets are not recognised but disclosed only when an inflow of economic benefits is probable.

(xxii) Employee benefits:

(a) Short-term obligations

Liabilities for wages and salaries, including nonmonetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.

(b) Post Employment obligations

The Company operates the following postemployment schemes:

a. defined benefit plans such as gratuity, pension and provident fund contributions

made to a trust in case of certain employees b. defined contribution plans such as provident fund and superannuation fund.

Pension and gratuity obligations

The liability or asset recognised in the balance sheet in respect of defined benefit pension and 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. Gratuity contributions are made to a trust (''National Peroxide Limited Employees’ Gratuity Fund’) administered by the Company.

The present value of the defined benefit obligation 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 recognised 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 recognised immediately in profit or loss as past service cost.

Provident fund contributions made to a trust administered by the Company In respect of certain employees, provident fund contributions are made to a trust (''National Peroxide Limited Employees’ Provident Fund’) administered by the Company. The interest rate payable to the members of the trust shall not be lower than the statutory rate of interest declared

by the Central Government under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, shall be made good by the Company. The liability in respect of the shortfall of the interest earnings of the fund is determined based on actuarial valuation.

Defined contribution plans The Company pays provident fund contributions to publicly administered provident funds as per local regulations and superannuation contributions to superannuation fund. 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 recognised as employee benefit expense when they are due.

(c) Other long-term employee benefit obligations

The liabilities for earned leave and sick leave are not expected to be settled wholly within 12 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. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in Statement of Profit or 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.

(xxiii) Earnings per share:

Basic Earnings per share

Basic earnings per share is calculated by dividing: - the net profit for the period attributable to the owners of the Company

- by the weighted average number of equity shares outstanding during the financial year.

Diluted Earnings per share

Diluted Earnings per share adjust the figures used in the determination of basic earnings per share to take into account;

- the after-income tax effect of interest and other financing cost associated with dilutive potential equity shares and

- the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.

(xxiv) Exceptional items:

Exceptional items include income or expense that are of such significance and nature that separate disclosure enables the user of the financial statements to understand the impact in a more meaningful manner. Exceptional items are identified by virtue of their size, nature and incidence.

If the management believes that losses/ gain are material and is relevant to an understanding of the entity’s financial performance, it discloses the same as an exceptional item.

(xxv) Rounding of amounts:

All amounts disclosed in financial statements and notes have been rounded off to the nearest Lakhs as per the requirement of Schedule III, unless otherwise stated.

3) Critical accounting estimates and judgements:

The preparation of financial statements requires the use of accounting estimates, which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the Company’s accounting policies. This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items, which are more likely to be materially adjusted due to estimates and assumptions turning out to be different from those originally assessed.

• Estimation of useful life

Useful lives of property, plant and equipment are based on the management''s estimation. The useful lives as estimated are same as prescribed in Schedule II of the Companies Act, 2013.

The useful lives of Company''s assets are determined by management at the time the asset is acquired/capitalised and reviewed annually for appropriateness. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life such as changes in technology.

• Estimation of defined benefit obligation

The present value of obligations under defined benefit plan is determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual development in the future. These include the determination of the discount rate, future salary escalations, attrition rate and mortality rates etc. Due to the complexities involved in the valuation and its long-term nature, these obligations are highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

• Impairment of trade receivables

The impairment provisions for trade receivables are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

• Fair value measurements and valuation processes

Some of the assets and liabilities are measured at fair value for financial reporting purposes.

The Management determines the appropriate valuation techniques and inputs for the fair value measurements.

In estimating the fair value of an asset or a liability, the Company uses market-observable data to the extent it is available. Where Level 1 inputs are not available, fair values are determined on the basis of the third-party valuations. The models used to determine fair values including estimates/ judgements involved are validated and periodically reviewed by the management. Refer note 43 to the financial statements.

• Inventory obsolescence

The Company writes down inventories to net realisable value based on an estimate of the realisability of inventories. Write downs on inventories are recorded where events or changes in circumstances indicate that the balances may not realise. The identification of write-downs requires the use of estimates of net selling prices of the down-graded inventories. Where the expectation is different from the original estimate, such difference will impact the carrying value of inventories and write-downs of inventories in the periods in which such estimate has been changed.

• Taxes

Deferred tax assets are recognised for temporary differences to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

4 Particulars, Accounting and Disclosures of the Composite Scheme of Arrangement

A) Description of Composite Scheme of Arrangement

As the Composite Scheme of Arrangement (''the Scheme’) became effective on September 11,2023, the accounting effects to the Scheme, as approved by National Company Law Tribunal Order vide order dated May 2023 had been given in the accounts for the financial year ended March 31,2023, by transferring the carrying amount of assets and liabilities pertaining to the Demerged Undertaking of the Demerged Company (Naperol Investments Ltd formerly known as National Peroxide Ltd) to the Resulting Company (National Peroxide Ltd formerly known as NPL Chemicals Ltd) and amalgamation of the Transferor Company (erstwhile Naperol Investments Ltd) into the Demerged Company with effect from the Appointed Date of April 01,2022. In order to give effect to the Scheme, the Company revised the audited Ind AS financial statements for the year ended March 31,2023.

B) The assets and liabilities (including cashflow hedge reserve) pertaining to the Demerged Undertaking have been transferred to and vested in the Resulting Company pursuant to the Scheme at their respective carrying values as appearing in the books of Demerged Company.

C) The existing share capital of '' 100,000 consisting of 10,000 shares of '' 10 each held by Demerged Company has been cancelled and the amount is credited to capital reserve and the Company has ceased to be a subsidiary of the Demerged Company from the Appointed date. As per the share swap ratio approved in the Scheme, the Company issued equity shares of '' 10 each in the ratio of 1:1 to the shareholders of Demerged Company. The Company has increased its authorised equity share capital by 99,90,000 shares of ''10 each to 1,00,00,000 equity shares to give effect to the Scheme and issued new equity shares to the shareholders of Demerged Company. The shares of the Company shall be separately listed.

D) The difference between the net assets transferred from the Demerged Company, and the aggregate of the fresh share capital issued by the Company has been credited to Capital Reserves - '' 30,649.47 Lakhs as provided under the Scheme. For the purpose of the Scheme, "Net Assets" means the difference between the book value of assets and liabilities (including cash flow hedge reserves) as on Appointed date.

Table 1- Property, Plant and Equipment, Intangible Asset and Capital Work in Progress except land transferred from Demerged

Company:

'' in Lakhs
Particulars	As at April 01, 2022
Property, Plant and Equipment	40,740.64
Accumulated Depreciation on Property, Plant and Equipment	(7,025.50)
Capital Work in Progress	398.67
Intangible Assets	104.96
Accumulated Amortisation	(59.82)