4.15 Provisions and contingencies

a Provisions

• Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event and 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

• If the effect of the time value of money is material, provisions are discounted using equivalent period government securities interest
rate.

• Unwinding of the discount is recognised in the Statement of Profit and Loss as a finance cost. Provisions are reviewed at each
reporting date date and are adjusted to reflect the current best estimate

b Contingencies

• 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 or a reliable estimate of the amount cannot be made. Information on contingent liabilities is disclosed in the Notes to
the f inancial Statements.

• Contingent assets are not recognised in the books of the accounts but are disclosed in Board Report. However, when the realisation of
income is virtually certain, then the related asset is no longer a contingent asset, but it is recognised as an asset and the corresponding
income is booked in the Statement of Profit and Loss.

4.16 Taxation

• Income tax expense represents the sum of Current Tax and Deferred tax fax is recognised in the Statement of Profit and Loss, except
to the extent that it relates to items recognised directly in Lquily or Other comprehensive income, In such cases the tax is also
recognised directly in equity or in other comprehensive income.

• Current tax provision is computed for Income calculated after considering allowances and exemptions under the provisions of the
Income Tax Act 1%1. Current tax assets and current tax liabilities are off set and presented as net

• Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the Balance sheet and the
corresponding tax hases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable
temporary differences, and deferred tax assets are generally recognised for all deductible temporary differences. Deferred tax assets
and Labilities are measured at the applicable tax rates. Deferred tax assets and deferred tax liabilities are off set, and presented as net

4.17 Cash and cash equivalents

Cash and cash equivalents include cash in hand and at bank, deposits held at call with banks, fixed Deposits.

For the purpose of the Statement of Cash Flows, cash and cash equivalents consists of cash and short term deposits, having original
maturity less than T months

i

4.18 Financial instruments - initial recognition, subsequent measurement and impairment

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of
unolher entity.

The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the
instrument. All financial assets and liabtlities are recognized at fair value on initial recognition, except for trade receivables which arc
initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and
financial liabilities, which arc 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

a Financial Assets

• financial Assets are measured at amortised cost or fair value through Other Comprehensive Income or fair value through Profit or
loss, depending on the judgment of the management for managing those financial assets and the assets' contractual cosh flow
characteristics.

• Subsequent measurements of financial assets are dependent on initial categorisation. For impairment purposes, financial assets are
assessed individually

De-recognition of financial Asset

A financial asset Is primarily derecognLsed (l.e. removed from the balance sheet) when:

• The rights to receive cash flows from the asset have expired, or

• I'he Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash
flows in full without material delay to a third party under a ‘pass-through’ arrangement and either (a) the Company has transferred
substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks
and rewards of the asset, but has transferred control of the asset When the Company has transferred its rights to receive cash flows
from an asset or has entered into a pass-through arrangement it evaluates if and to what extent it has retained the risks and rewards
of ownership.

Impairment of financial assets (other than fair value)

In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of
impairment loss on the following financial assets and credit risk exposure:

Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits, trade receivables
and bank balance

Trade receivables:

• A receivable Is classified as a ‘trade receivable' if it is in respect to the amount due from customers on account of goods sold or
services rendered in the ordinary course of business. Trade receivables are recognised initially at fair value and subsequently
measured at amortised cost, less expected credit loss if any.

• Impairment Is made for the expected credit losses. The estimated impairment losses are presented as a deduction from the value of
trade receivables and the impairment losses are recognised in the Statement of Profit and loss under "Other expenses".

• Subsequent changes in assessment of impairment are recognised in ECL and the change In Impairment losses are recognised in the
Statement of Profit and loss under "Other Expenses’.

• Individual receivables which are known to be uncollectible are written off by reducing the carrying amount of trade receivables and
the amount of the loss is recognised in the Statement of Profit and Loss under ’Other Expenses*.

• Subsequent recoveries of amounts previously written off are credited to ’Other Income’.

At initial recognition, all financial liabilities other than those valued at fair value through profit and loss are recognised at fair value
less transaction costs that are directly related to the issue of financial liability. Transaction costs of financial liability carried at fair
value through pnifit or loss are expensed in profit or loss.

Financial liabilities at fair value through profit or loss

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

Financial liabilities measured at amortised cost

After initial recognition, interest free Security Deposits and other financial liabilities arc valued at AmortLsed cost using Effective
Interest Kate method (EIK Method). I'he EIR amortisation is included tn finance costs in the Statement of Profit and Loss. Any
difference between the proceeds (net of transaction costs) and the redemption amount Is recognised In profit or loss over the period of
the borrowings using the effective interest method.

Trade iind. pfecayatto

A payable Is classified as 'trade payable’ if it is in respect of the amount due on account of goods purchased or services received in the
normal course of business. These amounts represent liabilities for goods and services provided to the Company prior to the end of
financial year which are unpaid Trade and other payables are presented as current liabilities unless payment Is not due within 12
months after the reporting period. Fhey are recognised initially at their fair value and subsequently measured at amortised cost using
the effective Interest method

De-recognition of financial liability

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. 'The difference
between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration
paid is recognised inprofit or loss as ‘1 hirer Income" or "Finance Expense'.

Offsetting of financial instruments

financial assets and financial liabilities are offset and the net amount is reported in the consolidated balance sheet If there is a
currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets
and settle the liabilities simultaneously

4.19 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 Non-current assets classified as held for sale arc measured at the lower of carrying amount and
fair value less cost to sell Any resulting impairment loss is recognized in the Statement of Profit and loss. On classification as held for
sale the assets are no longer depreciated.

4.20 Segment reporting

The Company identifies primary segments based on nature of products and returns and the internal organisation and management
structure. The operating segments are the segments for which separate financial information is available and for which operating
profit/loss amounts are evaluated regularly by the managing board in deciding how to allocate resources and in assessing
performance

5 CRITICAL ACCOUNTING ESTIMATES. ASSUMPTIONS AND IUDGEMENTS

The estimates and |udgements used in the preparation of the financial statements are continuously evaluated by the Company and are
based on historical experience and various other assumptions and factors (including expectation of future events) that the Company
believes to be reasonable under the existing circumstances. Differences between actual results and estimates are recognised in the
period in which the results are known/materialised.

The said estimates are based on the facts and events that existed as at the reporting date, or that which occured after the date but
provide additional evidence about the conditions existing at the reporting date,

a Property, plant and equipment

• Management assesses the remaining useful lives and residual value of property, plant and equipment. Management believes that the
assigned useful lives and residual value are reasonable.

b Income taxes

• Management judgment is required for the calculation of provision for income taxes and deferred tax assets and liabilities.

• The Company reviews at each balance sheet date the carrying amount of deferred tax assets. The factors used in estimates may differ
from actual outcome which could lead to significant adjustment to the amounts reported in the standalone financial statements,

c Contingencies

• Management judgement is required for estimating the possible outflow of resources, if any, in respect of
contingencies/daim/litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy.

d Impairment of accounts receivable and advances

• Trade receivables carry Interest and are stated at their fair value as reduced by appropriate allowances for expected credit losses.
Individual trade receivables are written off when management deems them not to be collectible Impairment is recognised for the
expected credit losses.

J

e Employee benefit expenses

• Actuarial valuation for gratuity, liability of the Company has been done by actuary on the basis of data provided by the management
and assumptions used by the actuary, The data so provided and the assumptions used have been disclosed In the notes to accounts

f Capital spares

• Only those capital spares whose have a useful life of more than one year and their cost exceeds Rs. 5,000 have been considered for the
purpose of capitalization under property, plant & equipment in the books of account. Further, all such spares are assumed to have a
useful life of 36 months.

g Discounting of Security deposit, and other long term liabilities

• For majority of the security deposits received, the timing of outflow, as mentioned in the underlying contracts, is not substantially
long enough to discount, The treatment would not provide any meaningful information and would have no material impact on the
financial statements

Ministry of Corporate Affairs (“MCA") notifies new standard or amendments to the existing standards under Companies (Indian
Accounting Standards) Rules as issued from time to time. The Last prononcemenl has been announced on March 31, 2023 which are
as follows, MCA amended the Companies (Indian Accounting Standards) Rules, 2015 by issuing the Companies (Indian Accounting
Standards) Amendment Rules, 2023, applicable from April 1, 2023, as below:

Ind AS 1 - Presentation of Financial Statements:

• The amendments require companies to disclose their material accounting policies rather than their significant accounting policies.
Accounting policy Information, together with other information, is material when it can reasonably be expected to influence decisions
ol primary users of general purpose financial statements. The Company dins not expect this amendment to have any significant
impact in its financial statements.

Ind AS 12 r Income faxes:

• I he amendments clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations. The
amendments narrowed the scope of the recognition exemption in paragraphs 15 and 24 of Ind AS 12 (recognition exemption) so that it
no longer applies to transactions that on Initial recognition, give rise to equal taxable and deductible temporary differences. The
Company does not expect this amendment to have any significant impact in its financial statements.

Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors:

• The amendments will help entities to distinguish between accounting policies and accounting estimates. The definition of a change in
accounting estimates has been replaced with a definition of accounting estimates. Under the new definition, accounting estimates are
"monetary amounts in financial statements that are subject to measurement uncertainty". Entities develop accounting estimates if
accounting policies require ill-ms in financial statements to be measured in a way that involves measurement uncertainty. The
Company does not expect this amendment to have any significant impact in its financial statements.

38 FINANCIAL RISK MANAC.I Ml \ I
W. I I Inane ial risk management objective* ami politics

I hi* Company \s financial rivk management is an integral pari of ho vs to plan ami oxer utt* its busings strategies. Ihe Company's financial risk management polity is sol In¹ Ihe Managing Board.
The Company’s senior management review* the linamlal risks and Uie appropriate iin.mu.il risk governance framework for Ihe Company.

.18,2 l inancial risk fat tors

• Ihe Company's principal financial liabilities comprise of trade payables, borrow ings and other liabilities. The main purpose of these financial liabilities is to manage finances lor Ihe Company's
operations and also for purchase of capital assets and for safeguarding its interests under contracts.

• The Com pans has trade and other receivable* and cash and cash equivalents that arise directly from ils operations as a part of its financial assets.

I hc» Company’s activities expose it to a variety of financial risks^-

a. Market risk

• Market risk is the risk that Ihe tair value or future cash flows of a financial instrument will fluctuate because of changes in market prices/market interest rates.

(I) Interest rate risks:

Intensl rate risk is Ihe risk that Ihe Ian value of future • ash flows of Ihe financial instruments w ill fluctuate because of changes in market interest rates. According to the Company interest rale
ri*kexposure is only for floating rale borrowings which it had taken from IIPFC bank rest of the borrowing of Utecompany are lived rate borrowing whuh are not subject to market risk.

b. ( red It risk

• Credit risk is Ihe risk that a counter party w ill not meet ils obligations under a financial instrument or customer contract, leading to a financial loss

• The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to Rs.10170.75 lakhs and Rs.10449.86 lakhs as at March 41,2025 and March 41. 2024

respectively The Company makes major ol ils export sales againsl a vs urily in the nature of 1 etter of Credit, and hence the credit risk is minimal with regard lo export debtors. I lowever the
company makes local sales and it is subject lo credit risk. Ihccompanv manages this risk through credit apprnvals.eslabilishing credit limits and continuously monitoring Ihe credit worthiness
of the customers to which the company grants credit terms in the normal course of business.

«. I liquidity risk

• I iquiditv risk is ihe risk lhat the (. ompanv may not be able to meet its present and future cash and collateral obligations without int urrlng unacceptable losses

• I he Company 's objective is lo at all times maintain optimum levels ol liquidity lo meet its cash requirements. The Company monitors rolling forecasts ol its liquidity requirements to ensure it
has sufficient cash »o meet operational needs.

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

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

I Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short
term loans from banks and other financial institutions approximate their carrying amounts largely due to short term maturities of
these instruments.

The fair values for loans and security deposits were calculated based on cash flows discounted using a current lending rate.

In case of security deposits. Company has used the fixed deposit rate of the year of making advance.

In case of security deposit timelimit is not certain

They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counter
party credit risk.

The fair values of non-current borrowings are based on carrying amount which are equal to fair value. They are classified as level 3
fair values In the fair value hierarchy due to the use of unobservable Inputs, including own credit risk.

For other financial assets and liabilities that are measured at amortised cost, the carrying amounts are equal to the fair values

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

Level 1: Quoted prices / published NVA (unadjusted) in active markets for identical assets or liabilities. It includes fair value of
financial instruments traded in active markets and are based on quoted market prices at the balance sheet date and financial
instruments like mutual funds for which net assets value (NAV) is published mutual fund operators at the balance sheet date.

Level 2: Inputs other than quoted prices included within level I that are observable for the asset or liability, either directly (that is. as
prices) or indirectly (that is. derived from prices). It includes fair value of the financial Instruments that are not traded in an active
market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques
maximise the use of observable market data where it is available and rvly as little as possible on the company specific estimates. If all
significant Inputs required to fair value an instrument are observable then instrument is included in level 2.

iht* Miliwing table provides the lair value measurement hierarchy of Company's asset and liabilities, grouped Into Level 1 to Level 3 as described below:
a Quoted prices/published NAV (unadjusted) in active markets for identical assets or liabilities (level I). It includes fair value of financial instruments traded in
active markets and art* based on quoted market prices at the balance sheet dale.

b Inputs other than quoted prices included within level I that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is,
derived from prices) (level 2) It includes fair value of the financial instruments that are not traded in an active market (for example, interest free security
deposits) is determined by using valuation techniques. These valuation techniques maximise the use of observable market data when- it is available and rely as
little as possible on the company specific estimates. If all significant inputs required to fair value an instrument arc observable then instrument is included In
level 2

c Inputs for the asset or liability that are not based on ohservable market data (that is, unobservable inputs) (level 3). If one or more of the significant inputs Is
not based on observable market data, the Instrument ls included in level 3

41 CAPITAL RISK MANAGEMENT
Objective

The primary objective of the Company's capital management is to maximize the shareholder value,
i.e. to provide maximum returns to the shareholders. The Company's primary objective when
managing capital is to ensure that it maintains an efficient capital structure and healthy capital
ratios and safeguard the Company's ability to continue as a going concern in order to support its
business and provide maximum returns to the shareholders. The Company also proposes to
maintain an optimal capital structure to reduce the cost of capital. No changes were made in the
objectives, policies or processes during the year ended March 31, 2025 and March 31, 2024.

Policy

The Company manages its capital structure and makes adjustments in light of changes in economic
conditions and the rules and regulations framed by the Government.

Process

The Company manage its capital by maintaining sound/optimal capital structure financial ratios,
such as net debt-to-equity ratio on a monthly basis and implements capital structure improvement
plan when necessary. Debt-to-equity ratio as of March 31, 2025, March 31, 2024 is as follows:

47 SHORT - TERM EMPLOYEE BENEFITS:-

All employ** benefits pay able wholly within tw*lv* months of rendering the service are classified as short-term employe* benefit*
<nd they «rr recognised in the period in which the employ ee renders the related services

The Company recognises the undiscounted amount of short term employee benefits expected to he paid in exchange for services
rendered as a liability after deducting any amount already paid.

rOST RETIREMENT BENEFIT PLANS

Defined Contribution Plan:

Contribution to superannuation fund is recognised as an expense in the Statement of Profit it Lass as it is incurred. There are no
othrr obligations other than the contribution payable to the respective trust. Fligihl* employees receive benefit* from a provident
fund which is a defined contribution plan. Both the eligible employees and the Company make monthly contributions to the
provident fund plan equal to a specified percentage of the covered employee’s salary

Defined Brnefitx Plan

(I) Gratuity

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in
continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the
employer* last drawn basic salary per month computed proportionately for 15 days salary multiplied by the number of year* of
service. The gratuity plan i» a funded plan and the Company make* contributions to recognised fund* in India.

I ong-lerm Employee Benefit*:-

Long-term employee benefits Compensated absence* which are not expected to occur within twelve month* after the end of the
period in which the employee render* the' related service are recognised a* a liability at the present value of the obligation a* at the
Balance Sheet date. The cost of providing benefit* is determined using the projected unit credit method, with actuarial valuation*
being carried out at each Balance Sheet date .Actuarial gain* and losses are recognised in the Statement of Profit and loss in the
period in which they occur

The number of shares used in computing basic EPS is the weighted average number of
shares outstanding during the year.

The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of
potential dilutive equity.

51 INVESTMENT PROPERTY

The company has given on rent a portion of its factory bdilding situated at_SP-4/3,
Keshwana, Kotputli, Jaipur-303108, however the portion given on rent is insignificant and
major portion of the factory is used in manufacturing activities hence the company has not
recognised seperatly such poriton as an investment property by taking of the view given in
para 10 of IND AS 40 "Investment Property"

53 Financial and Derivatives Instruments

The Company uses derivative Instruments to hedge its risks associated with foreign currency
fluctuations relating to certain firm commitments on forecasted as transactions as approved by
Board of Directors. The Company does not use derivative instruments for speculation purpose.

* The previous period / year figures are reclassified / re-arranged / regrouped, wherever necessary to make them comparable
‘The figures have been rounded off in nearest Lakhs upto two decimal points except otherwise stated.

In terms of our separate Audit Report of even date For & on behalf of the Board of Directors _—^

FOR li.C. Hothra & Associates - OF KG PETROCHEM LIMITED C\[ \-n ⁹ f'

'(G. S. KANDOI) ' (MANISH SINCHAL)

. /\ . V i \ / / Chairman Cum Wholetime Director Managing Director

DIN: 00120330 DIN: 00120232

>0

(Abhishek Jain) (tS , /"T\ -1% Ll

Partner

M. No. 401501 <PRIt£mNGHAI.) (NAVITA KHUNTETA)

VVIjoJeflme Director cum CFO Company Secretary

DIN: 02664482 M.No. A35214

Place: JAIPUR
Date: 28.05.2025