Notes to Accounts of Ecofinity Atomix Ltd.

Mar 31, 2025

M. Provisions, Contingent Liabilities and Contingent Assets

The Company recognises a provision when it has a present obligation as a result of a past event that
probably requires an outflow of the Company''s resources embodying economic benefits at the time of
settlement and a reliable estimate can be made of the amount of the obligation. The provisions are
measured at the best estimate of the amounts required to settle the present obligation as at the
balance sheet date and are not discounted to its present value.

Contingent liabilities is a possible obligation arising from past events, the existence of which will be
confirmed only on the occurrence or non-occurrence of one or more future uncertain events not wholly
or substantially within the control of the Company or a present obligation that arises from the past
events where it is either not probable that an outflow of resources will be required to settle the
obligation or a reliable estimate of the amount cannot be made. The company does not recognize a
contingent liability but discloses its existence in the standalone financial statements.

When demand notices are issued by the Government Authorities and demand is disputed by the
company and it is probable that the company will not be required to settle/pay such demands then
these are classified as disputed obligations.

Contingent Assets, if any, are not recognised in the financial statements. If it becomes certain that
inflow of economic benefit will arise then such asset and the relative income are recognised in financial
statements.

N. Current/Non-Current Classifications:

The Company presents assets and liabilities in the balance sheet on the basis of their classifications into
current and non-current based on the assessment made by the management of the company.

Assets:

An asset is treated 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

• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for
at least twelve months after the reporting period.

All other assets are classified as non-current.

Liabilities:

A liability is treated as current when it is:

• Expected to be settled in normal operating cycle

• Held primarily for the purpose of trading

• Due to be settled within twelve months after the reporting period

• No unconditional right to defer the settlement of the liability for at least twelve months after
the reporting period.

All other liabilities are classified as non-current.

O. Financial Instruments, Financial Assets, Financial liabilities and Equity Instruments

The financial assets and financial liabilities are recognised when the Company becomes a party to the
contractual provisions of the relevant instrument and are initially measured at fair value. Transaction
costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities
(other than financial assets and financial liabilities measured at fair value through profit or loss) are
added to or deducted from the fair value on initial recognition of financial assets or financial liabilities.

A. Financial Assets:

Initial Recognition:

Financial Assets include Investments, Cash and Cash Equivalents and eligible current and non-current
assets. The financial assets are initially recognized at the transaction price when the Company becomes
party to contractual obligations. The transaction price includes transaction costs unless the asset is

Subsequent Measurement:

The subsequent measurement of financial assets depends upon the initial classification of financial
assets. For the purpose of subsequent measurement, financial assets are classified as under:

i. Financial Assets at Amortized Cost where the financial assets are held solely for collection of
cash flows and contractual terms of the assets give rise on specified dates to cash flows that are
solely payments of principal and interest on principal amount outstanding.

ii. Fair value through profit or loss (FVTPL), where the assets are managed in accordance with an
approved investment strategy that triggers purchase and sale decisions based on the fair value
of such assets. Such assets are subsequently measured at fair value, with unrealised gains and
losses arising from changes in the fair value being recognised in the Statement of Profit and Loss
in the period in which they arise.

iii. Financial Assets measured at Fair Value Through Other Comprehensive Income (FVTOCI): A
Financial Asset is measured at FVTOCI if it is held within a business model whose objective is
achieved by both collecting contractual cash flows and selling Financial Assets and the
contractual terms of the Financial Asset give rise on specified dates to cash flows that
represents solely payments of principal and interest on the principal amount outstanding.

Security Deposits, Loans and Advances, Cash and Cash Equivalents where reliable data for fair value is
not available then such eligible current and non-current assets are classified for measurement at
amortized cost.

Impairment:

If the recoverable amount of an asset (or cash-generating unit/Fixed Assets) is estimated to be less than
its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognized immediately in profit or loss, unless the relevant
asset is carried at a re-valued amount if any, in which case the impairment loss is treated as a
revaluation decrease.

Expected Credit Losses are measured through a loss allowance at an amount equal to:

• The 12-months expected credit losses (expected credit losses that result from those default events on
the financial instrument that are possible within 12 months after the reporting date); or

• Full lifetime expected credit losses (expected credit losses that result from all possible default events
over the life of the financial instrument).

For Trade Receivables the Company applies ‘simplified approach’ which requires expected lifetime
losses to be recognized from initial recognition of the receivables. The Company uses historical default
rates to determine impairment loss on the portfolio of trade receivables. At every reporting date these
historical default rates are reviewed and changes in the forward looking estimates are analysed. For
other assets, the Company uses 12 month ECL to provide for impairment loss where there is no
significant increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used.

Financial assets, other than those at Fair Value through Profit and Loss (FVTPL), are assessed for
indicators of impairment at the end of each reporting period. Financial assets are considered to be
impaired when there is objective evidence that, as a result of one or more events that occurred after
the initial recognition of the financial asset, the estimated future cash flows of the investment have
been affected.

The company recognises impairment loss on trade receivables using expected credit loss model.

B. Financial Liabilities:

Financial liabilities, which include trade payables and eligible current and non-current liabilities. The
trade payables and other financial liabilities are recognised at the value of the respective contractual
obligations. Financial liabilities are derecognised when the liability is extinguished, that is, when the
contractual obligation is discharged, cancelled and on expiry of the terms.

Initial Recognition:

Financial Liabilities are initially recognized at fair value plus any transaction costs, (if any) which are
attributable to acquisition of the financial liabilities.

Subsequent measurement

Financial Liabilities are carried at amortised cost using the effective interest method. For trade and
other payables maturing within one year from the balance sheet date, the carrying amounts

Derecognition of Financial Instruments

The Company derecognises a Financial Asset when the contractual rights to the cash flows from the
Financial Asset expire or it transfers the Financial Asset and the transfer qualifies for derecognition
under Ind AS 109. A Financial liability (or a part of a Financial liability) is derecognized from the
Company’s Balance Sheet when the obligation specified in the contract is discharged or cancelled or
expires.

Offsetting

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

P. Fair Value Measurement:

The Company measures financial instruments, such as investments at fair value at each balance sheet
date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date.

The fair value measurement is based on the presumption that the transaction to sell the asset or
transfer the liability takes place either:

• In the principal market for the asset or liability, or in the absence of a principal market, in the
most advantageous market for the asset or liability.

• The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants
would use when pricing the asset or liability, assuming that market participants act in their economic
best interest. A fair value measurement of a non-financial asset takes into account a market
participant’s ability to generate economic benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the asset in its highest and best use.

The company uses valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value, maximizing the use of relevant observable inputs

and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorized within the fair value hierarchy, described as follows, based on the lowest level input that is
significant to the fair value measurement as a whole:

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

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

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

For assets and liabilities that are recognized in the financial statements on a recurring basis, the
Company determines whether transfers have occurred between levels in the hierarchy by re-assessing
categorization (based on the lowest level input that is significant to the fair value measurement as a
whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities
on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair
value hierarchy as explained above.

Q. Cash and Cash Equivalents-For the Purpose of Cash Flow Statements:

Cash and cash equivalent in the balance sheet comprise cash at banks and in hand and short-term
deposits with an original maturity of three months or less, which are subject to an insignificant risk of
changes in value.

R. Operating Cycle:

Based on the activities of the company and normal time between incurring of liabilities and their
settlement in cash or cash equivalents and acquisition/right to assets and their realization in cash or
cash equivalents, the company has considered its operating cycle as 12 months for the purpose of
classification of its liabilities and assets as current and non-current.

S. Events Subsequent to Financial Statements Period:

Events after the reporting period are those events, both favourable and unfavourable that have
occurred between the end of the reported financial statements year and the date when financial
statements are approved for issue by the Board of Directors of the company.

Events after the reporting period can be identified as those that provide evidence of conditions that
existed as at the end of the financial year i.e. adjusting events after the financial year end and those
are indicative of conditions that arose after the financial year end i.e. non-adjusting events after the
financial year end.

The company adjusts the amounts of assets, liabilities, incomes and expenses recognised in the financial
statements of the reporting period to reflect the effects of adjusting events to the respective assets,
liabilities, incomes and expenses of the reporting period.

The non-adjusting events are not recognised in the financial statement of the reporting period but the
nature of event and an estimate of its financial effect are disclosed in the notes of accounts.

T. Earnings Per Share:

The Company presents basic and diluted earnings per share details for its ordinary shares. Basic earning
per share is calculated by dividing the total comprehensive income after tax for the year attributable to
the ordinary shareholders of the company by weighted number of ordinary shares outstanding for
applicable period during the year.

Diluted earning per share is calculated considering the effect of dilution if any to ordinary share during
the year.

---

Mar 31, 2024

Note: The Company is subject to income tax in India on the basis of its financial statements. The Company can claim tax exemptions/deductions under specific sections of the Income Tax Act, 1961 subject to fulfilment of prescribed conditions, as may be applicable. For the year ended March 31, 2024, the Company has planned to opt for the new tax regime under Section 115BAA of the Act, which provides a domestic company with an option to pay tax at a rate of 22% (effective rate of 25.168%). The lower rate shall be applicable subject to certain conditions, including that the total income should be computed without claiming specific

deduction or exemptions. Up to year ended March 31, 2023, applicable tax rate is 25% (effective rate of 29.12%).

D. Financial Instruments and Related Disclosures:

Financial instruments by category and fair value:

The below table summarizes the judgements and estimates made in determining the fair values of the financial instruments that are

(a) recognised and measured at fair value and

(b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard.

The fair value of trade receivables, cash and cash equivalents, other bank balances, current borrowings, trade payables and other current financial liabilities approximate their carrying amounts, due to their short-term nature.

The company has not disclosed the fair values of non-current borrowings and non-current loans because their carrying amounts are a reasonable approximation of fair values

Financial Risk Management:

The company activities are exposed various financial risks: credit risk, liquidity risk and other price risk. The Company’s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

I. Credit Risk:Loans & Advances:

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss to the Company. The maximum exposure to the credit risk as at the reporting date is primarily from inter corporate deposits. Inter corporate deposits are unsecured and are subject to counterparty default regarding repayment of deposits. Financial assets are written off when there are no reasonable expectations of recovery. The Company categorizes a loan or receivable for write off when a debtor fails to make contractual payments greater than one year past due Where loans or receivables have been written off, the Company continues engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized in profit or loss.

Other Financial Assets:

Credit risk relating to cash and cash equivalents and interest accrued on bank deposits, is considered negligible since the counterparties are banks which are majorly owned by Government of India and are have oversight of Reserve Bank of India. The Company considers the credit quality of term deposits with banks to be good and the company reviews these banking relationships on an ongoing basis.

The Company considers all other financial assets as at the balance sheet dates to be of good credit quality.

II. Liquidity Risk:

The company’s principal sources of liquidity are from, Cash and Cash Equivalents. The Short-term liquidity requirements consist mainly of Expense Payables, Employee Dues, Servicing of Interest on Short Term Borrowings and other payments arising during the normal course of business.

III. Other Price Risk

Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price. Other price risk arises from financial assets such as investments in equity instruments. The price risk arises due to uncertainties about the future market values of these investments.

E. Capital Management:

For the purpose of the Company’s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize return to stakeholders through the optimization of the debt and equity balance.

The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes, within net debt, interest bearing loans and borrowings, trade and other payables, less cash and short-term deposits.

F. The company has communicated suppliers to provide confirmations as to their status as Micro, Small or Medium Enterprise registered under the applicable category as per the provisions of the Micro, Small and Medium Enterprises (Development) Act, 2006 (MSMED Act, 2006). The company has classified suppliers into Micro, Small and Medium Enterprises as per the confirmations received by the company upto the date of Balances Sheet and accordingly other suppliers are classified as Non-MSME Suppliers irrespective of their status as per the provisions of the Micro, Small and Medium Enterprises (Development) Act, 2006 (MSMED Act, 2006).

G. In the opinion of the Board of Directors, Current Assets & Loans and Advances have a value on realisation in the ordinary course of business equal to the amount at which they are stated in the balance sheet. In the opinion of the Board of Directors, claims receivable against property/goods are realizable as per the terms of the agreement and/or other applicable relevant factors and have been stated in the financial statements at the value which is most probably expected to be realized.

H. All other balances of creditors and loans and advances are subject to confirmation and subsequent reconciliation, if any.

I. Expenses in foreign currency:

CIF Value of Imports: NIL (Previous Year: NIL)

FOB Value of Exports: NIL (Previous Year: NIL)

K. Utilization of Borrowed Funds and Securities Premium:

(a) During the year, no funds have been advanced or loaned or invested (either from borrowed funds or

securities premium or any other sources or kind of funds) by the company to or in any persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company

("Ultimate Beneficiaries") or provide any guarantee, any security or the like on behalf of the

Ultimate Beneficiaries.

(b) During the year, no funds have been received by the Company from any persons or entities,

including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party

("Ultimate Beneficiaries") or provide any guarantee, any security or the like on behalf of the

Ultimate Beneficiaries.

L. Relationship with Struck off Companies:

The company did not have any transaction with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956, during the current year and in the previous year.

M. The previous year’s figures have been reworked, regrouped and reclassified wherever necessary so as to make them comparable with those of the current year.

The Financial Statements have been presented in Indian Rupee ('') in Lakhs rounded off to two decimal points as per amendment to Schedule III to the Companies Act, 2013.