1B. MATERIAL ACCOUNTING POLICIES AND KEY ACCOUNTING
ESTIMATES AND JUDGEMENTS:

a) Basis of accounting and preparation of Financial Statements:

i) Statement of Compliance

These financial statements of the Company have
been prepared in accordance with the recognition and
measurement principles laid down in Indian Accounting
Standards (hereinafter referred to as the ‘Ind AS') as notified
under section 133 of the Companies Act, 2013 (‘the Act') read
with Rule 3 of the Companies (Indian Accounting Standards)
Rules, 2015 as amended and other relevant provisions of the
Act and accounting principles generally accepted in India.

ii) Basis of Preparation

The financial statements have been prepared on accrual and
going concern basis. Accounting Policies have been consistently
applied except where a newly issued Accounting Standard is
initially adopted or a revision to an existing Accounting Standard
requires a change in the accounting policy hitherto in use.

All assets and liabilities have been classified as current or
non-current as per company's normal operating cycle as per

paragraph 66 and 69 of Ind AS 1 and other criteria as set out
in the Division II of Schedule III to the Companies Act, 2013.

Based on the nature of products and the time between
acquisition of assets for processing and their realization in
cash and cash equivalents the Company has ascertained its
normal operating cycle as twelve months for the purpose of
current/non-current classification of assets and liabilities.

Cash flows are reported using the indirect method,
whereby net profit before tax is adjusted for the effects of
transactions of a noncash nature, any deferrals or accruals
of past or future operating cash receipts or payments and
items of income or expenses associated with investing
or financing cash flows. The cash flows from operating,
investing and financing activities of the Company are
segregated. Cash and cash equivalents for the purpose of
the statement of cash flows comprise cash and cash on
deposit with banks and financial institutions. The Company
considers all highly liquid investments with a remaining
maturity at the date of purchase of three months or less
and that are readily convertible to known amounts of cash
to be cash equivalent.

These financial statements are prepared under the historical
cost convention except in case of certain class of financial
assets/liabilities, share based payments and net liability for
defined benefit plan that are measured at fair value.

The Company has decided to round off the figures to the
nearest Crores.

These financial statements were authorized for issue by the
Company's Board of Directors on May 15, 2025.

iii) Functional and Presentation Currency

These financial statements are presented in Indian rupees,
which is the functional currency of the Company. All financial
information presented in Indian rupees (?) has been rounded
off to the nearest crores, except otherwise indicated.

iv) Use of Estimates and Judgments

The preparation of the Financial Statements in conformity
with Ind AS requires the Management to make estimates
and assumptions considered in the reported amounts of
assets and liabilities (including contingent liabilities) and
the reported income and expenses during the year. The
Management believes that the estimates used in preparation
of the Financial Statements are prudent and reasonable.

Future results could differ due to these estimates and the
differences between the actual results and the estimates are
recognised in the periods in which the results are known/
materialize. Estimates and underlying assumptions are
reviewed on an ongoing basis.

Information about critical judgments in applying accounting
policies, as well as estimates and assumptions that have the
most significant effect to the carrying amounts of assets and
liabilities within the next financial year, are included in the
accounting policies, given as under:

? Measurement of defined benefit obligations

? Measurement and likelihood of occurrence of provisions
and contingencies

? Recognition of deferred tax assets

? Useful lives of property, plant, equipment and Intangibles

? Impairment of Assets

? Impairment of financial assets

b) Property, Plant and Equipment:

i) Recognition and Measurement

Property, plant and equipment are stated at their cost of
acquisition / installation / construction net of accumulated
depreciation, and impairment losses, if any, except freehold
land which is carried at cost less impairment losses.
Subsequent expenditures 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. When significant
parts of plant and equipment are required to be replaced
at intervals, the Company depreciates them separately
based on their specific useful lives. Likewise, when a major
improvement is performed, its cost is recognized in the
carrying amount of the Property, plant and equipment as a
replacement if the recognition criteria are satisfied. All other
repairs and maintenance are charged to the statement
of profit and loss during the reporting period in which they
are incurred. The present value of the expected cost for the
decommissioning of an asset after its use is included in the
cost of the respective asset if the recognition criteria for
provisions are met.

Spares which meet the definition of property, plant and
equipment are capitalized as on the date of acquisition. The
corresponding old spares are decapitalized on such date with
consequent impact in the statement of profit and loss.

Property, plant and equipment not ready for their intended
use as on the balance sheet date are disclosed as
“Capital work-in-progress”. Such items are classified to
the appropriate category of property, plant and equipment
when completed and ready for their intended use. Advances
given towards acquisition / construction of property, plant
and equipment outstanding at each balance sheet date are
disclosed as Capital Advances under “Other non-current
assets”.

An item of property, plant and equipment and any significant
part thereof is derecognized upon disposal or when no future
economic benefits are expected from its use or disposal. Any
gain or loss arising on derecognition of the asset (calculated
as the difference between the net disposal proceeds and the
carrying amount of the asset) is included in the statement of
profit and loss in “other income / (expenses)” when the asset
is derecognized.

ii) Depreciation

Depreciation is provided as per the useful life of assets which
are determined based on technical parameters / assessment.
Depreciation on tangible assets is provided on a straight line
method over the estimated useful lives of the assets.

Estimated useful lives of the assets, are as follows:

The residual values, useful lives and methods of depreciation
of property, plant and equipment are reviewed during each
financial year and adjusted prospectively, if appropriate.

Depreciation on additions is provided on a pro-rata basis for
the number of days they are available for use. Depreciation on
sale / disposal of assets is provided pro-rata basis up to the
date of sale / disposal.

An asset purchased where the actual cost individually does
not exceed ' 10,000 is depreciated at the rate of 100%.

c) Intangible Assets:

i) Recognition and Measurement

Intangible assets acquired separately are measured on initial
recognition at cost. Following initial recognition, intangible
assets are carried at cost less any accumulated amortization
and accumulated impairment losses, if any. Expenditure on
research and development eligible for capitalization are

carried as Intangible assets under development where such
assets are not yet ready for their intended use.

An intangible asset is derecognized on disposal, or when no
future economic benefits are expected from its use or disposal.
Gains or losses arising from derecognition of an intangible
asset, if any, are measured as the difference between the net
disposal proceeds and the carrying amount of the asset and
are recognized in the statement of profit and loss when the
asset is derecognized.

(ii) Subsequent Expenditure

Subsequent expenditure is capitalized only if it is probable that
the future economic benefits associated with the expenditure
will flow to the Company.

(iii) Amortization

Intangible assets are amortized over their estimated useful
life on Straight Line Method as follows:

The estimated useful lives of intangible assets and the
amortization period are reviewed at the end of each financial
year and the amortization method is revised to reflect the
changed pattern, if any.

I) Leases

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

i) Company as Lessee

At the date of commencement of the lease, the Company
recognizes a right-of-use asset and a corresponding lease

liability for all lease arrangements in which it is a lessee,
except for short-term leases and leases of low value assets.

The right-of-use assets are initially recognized at cost, which
comprises the initial amount of the lease liability adjusted for
any lease payments made at or prior to the commencement
date of the lease plus any initial direct costs less any lease
incentives. They are subsequently measured at cost less
accumulated depreciation and impairment losses, if any.
Right-of-use assets are depreciated from the commencement
date on a straight line basis over the shorter of the lease
term and useful life of the underlying asset. The Right-of-use
assets is also subject to impairment. Right-of-use assets are
evaluated for recoverability whenever events or changes in
circumstances indicate that their carrying amounts may not
be recoverable.

The lease liability is initially measured at the present value
of the future lease payments. The lease payments are
discounted using the interest rate implicit in the lease or, if
not readily determinable, using the incremental borrowing
rates. The Company uses the incremental borrowing rate as
the discount rate.

The Company applies the short-term lease recognition
exemption to its short-term leases (i.e., those leases that have
a lease term of 12 months or less from the commencement
date). It also applies the lease of low value assets recognition
exemption to leases that are considered of low value (range
different for different class of assets). Lease payments on short¬
term leases and leases of low-value assets are recognized as
expense on a straight-line basis over the lease term.

ii) Company as Lessor

Leases for which the Company is a lessor are classified as
either finance or operating leases. Whenever the terms of
the lease transfer substantially all the risks and rewards of
ownership to the lessee, the lease is classified as a finance
lease. All other leases are classified as operating leases.

In respect of assets provided on finance leases, amounts due
from lessees are recorded as receivables at the amount of
the Company's net investment in the leases. Finance lease
income is allocated to accounting periods to reflect a constant
periodic rate of return on the Company's net investment
outstanding in respect of the leases. In respect of assets
given on operating lease, lease rentals are accounted in the
Statement of Profit and Loss, on accrual basis in accordance
with the respective lease agreements.

e) Impairment of Assets:

Intangible assets and property, plant and equipment are evaluated
for recoverability whenever events or changes in circumstances
indicate that their carrying amounts may not be recoverable.
For the purpose of impairment testing, the recoverable amount
(i.e. the higher of the fair value less cost to sell and the value-in¬
use) is determined on an individual asset basis unless the asset
does not generate cash flows that are largely independent of
those from other assets. In such cases, the recoverable amount
is determined for the Cash Generating Unit (CGU) to which the
asset belongs.

If such assets are considered to be impaired, the impairment to
be recognized in the Statement of Profit and Loss is measured by
the amount by which the carrying value of the assets exceeds the
estimated recoverable amount of the asset. An impairment loss
is reversed in the Statement of Profit and Loss if there has been
a change in the estimates used to determine the recoverable
amount. The carrying amount of the asset is increased to its
revised recoverable amount, provided that this amount does not
exceed the carrying amount that would have been determined
(net of any accumulated amortization or depreciation) had no
impairment loss been recognized for the asset in prior years.

f) Research and Development:

Revenue expenditure pertaining to research is charged to the
Statement of Profit and Loss. Development costs of products are
also charged to the Statement of Profit and Loss in the year in

which they are incurred. Fixed assets utilized for research and
development are capitalized and depreciated in accordance
with the policies stated for Tangible Fixed Assets and Intangible
Assets.

Expenditure on in-licensed development activities, whereby
research findings are applied to a plan or design for the production
of new or substantially improved products and processes, is
capitalized, if the cost can be reliably measured, the product or
process is technically and commercially feasible and the Company
has sufficient resources to complete the development and to use
and sell the asset.

g) Inventories

Inventories are valued at lower of cost or net realizable value.
Cost is determined as follows;

i) Raw materials, Stores and Spares and Packing materials

Cost includes purchase price, other costs incurred in bringing
the inventories to their present location and condition, and
taxes for which credit is not available. Cost is determined on
Weighted Average basis.

ii) Work-in-progress and Finished goods

Cost includes direct materials and labour and a proportion
of manufacturing overheads based on normal operating
capacity, but excluding borrowing costs.

Net realisable value is the estimated selling price in the
ordinary course of business, less estimated costs of
completion and estimated costs necessary to make the sale.

The Company reviews its inventory regularly to assess any
risk of items becoming slow-moving, obsolete, or otherwise
non-saleable. This assessment is based on several practical
considerations, including shelf life remaining, changes in
market demand, regulatory status, pricing trends, and ageing
of inventory. Where applicable, adjustments are made to

inventory values through appropriate provisions, ensuring they
reflect current realities and past trends in product movement
and usability.

h) Government Grants and Assistance

Grants from the Government are recognized when the Company
will comply with all the conditions attached to them and there is
a reasonable assurance that the grant will be received and all
attaching conditions will be complied with.

Government grants relating to an asset are initially recognized as
deferred income and subsequently recognized in the Statement
of Profit and Loss as other income on a systematic basis over the
useful life of the asset.

i) Borrowing Costs

Borrowing cost directly attributable to acquisition and construction
of assets that necessarily take substantial period of time to get
ready for their intended use or sale are capitalised as part of the
cost of such assets up to the date when such assets are ready for
intended use or sale. All other borrowing costs are expensed in the
period in which they occur. Borrowing cost consists of interest and
other costs that an entity incurs in connection with the borrowing
of funds. Borrowing cost also includes exchange differences to
the extent regarded as an adjustment to the borrowing costs.

j) Fair Value Measurement

The Company measures some of its financial instruments 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.

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:

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

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

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

k) Financial Instruments

A financial instrument is any contract that gives rise to a financial
asset of one entity and a financial liability or equity instrument of
another entity. Financial assets and financial liabilities 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 at fair value through
the statement of profit and 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 the
statement of profit and loss are recognized immediately in the
statement of profit and loss.

I. Financial Assets

The Company's Financial Assets mainly comprise of;

? Current financial assets mainly consist of trade
receivables, investments in liquid mutual funds, Cash and
Bank balances, Fixed deposits with banks and financial
institutions, and other current receivables.

? Non-current financial assets mainly consist of financial
investments in equity, fixed deposits and non-current
deposits.

* Initial Recognition and measurement of Financial
Assets

The Company recognizes a financial asset when it becomes
party to the contractual provisions of the instrument. All
financial assets are recognized initially at fair value, plus
in the case of financial assets not recorded at fair value
through profit or loss, transaction costs that are attributable
to the acquisition of the financial asset. However, trade
receivables that do not contain a significant financing
component are measured at transaction price. All regular
purchases or sales of financial assets are recognized and
derecognized on a trade date basis, i.e. the date that the
Company commits to purchase or sell the asset.

* Subsequent Measurement of Financial Assets

For purposes of subsequent measurement, financial
assets are classified in the following categories:

i) Financial Assets at Amortized Cost;

A Financial asset is measured at the amortised cost if
both the following conditions are met:

Ý The asset is held within a business model whose
objective is to hold assets for collecting contractual
cash flows, and

Ý Contractual terms of the asset give rise on specified
dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal amount
outstanding.

Financial assets at amortized cost category is the
most relevant to the Company. It comprises of current
financial assets such as trade receivables, cash and
bank balances, fixed deposits with bank and financial
institutions, other current receivables and non-current
financial assets such as non-current receivables and
deposits.

After initial measurement, such financial assets are
subsequently measured at amortized cost using the
effe ctive interest rate (EIR) method. The EIR amortization
is included in other income in the statement of profit
and loss. The losses arising from impairment, if any are
recognized in the statement of profit and loss.

ii) Financial Assets at Fair Value through Profit and
Loss

All equity investments in scope of Ind AS 109 “Financial
Instruments” are measured at FVTPL with all changes
in fair value recognized in the statement of profit and
loss. The Company has designated its investments in
equity instruments as FVTPL category.

iii) Financial Assets at Fair Value through Other
Comprehensive Income

The Company may make an irrevocable election to present
in other comprehensive income subsequent changes
in the fair value. The Company has not designated
investments in any equity instruments as FVTOCI.

* Derecognition

A financial asset (or, where applicable, a part of a financial
asset or part of group of similar financial assets) is
primarily derecognized (i.e. removed from the Company's
balance sheet) when:

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

ii) The 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:

Ý the Company has transferred substantially all the
risks and rewards of the asset, or

Ý the Company has neither transferred nor retained
substantially all the risks and rewards of the asset,
but has transferred control of the asset.

* Impairment of financial assets

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:

i) Trade Receivables

ii) Other financial assets that are measured at amortized
cost.

In case of trade receivables, the Company follows a
simplified approach wherein an amount equal to lifetime
ECL is measured and recognized as loss allowance.

In case of other assets (as listed in ii above), the Company
determines if there has been a significant increase in
credit risk of the financial asset since initial recognition.
If the credit risk of such assets has not increased
significantly, an amount equal to 12-month ECL is
measured and recognized as a loss allowance. However,
if credit risk has increased significantly, an amount equal
to lifetime ECL is measured and recognized as a loss
allowance.

II. Financial Liabilities and Equity Instruments
i) Financial Liabilities

The Company's Financial Liabilities mainly comprise of
Current financial liabilities mainly consist of trade payables
and liability for capital expenditure

* Initial Recognition and measurement of Financial
Liabilities

The Company recognizes a financial liability in its
balance sheet when it becomes party to the contractual

provisions of the instrument. All financial liabilities are
recognized initially at fair value and, in the case of loans
and borrowings and payables, net of directly attributable
transaction costs.

Financial liabilities are initially recognized and measured
at amortized cost.

* Subsequent Measurement of Financial Liabilities at
Amortized Cost

The carrying amounts of financial liabilities that are
subsequently measured at amortized cost are determined
based on the effective interest rate method. Interest
expense that is not capitalized as part of cost of an asset
is included in the ‘Finance costs' line item. The effective
interest rate method is a method used to calculate the
amortized cost of a financial liability and to allocate
interest expense over the relevant period.

* Derecognition of Financial Liability

A financial liability is derecognized when the obligation
under the liability is discharged, cancelled or expired.
When an existing financial liability is replaced by another
from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified,
such an exchange or modification is treated as the
derecognition of the original liability and the recognition
of a new liability. The difference in the respective carrying
amounts is recognized in the statement of profit and loss.

ii) 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.

Debt and equity instruments issued by the 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.

III. Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net
amount is reported in the balance sheet if there is a currently
enforceable legal right to offset the recognized amounts and
there is an intention to settle on a net basis, to realize the
assets and settle the liabilities simultaneously.

l) Foreign Currency Transactions

Transactions in foreign currencies are translated into the
functional currency of the Company at the exchange rates
prevailing on the dates of the transactions or an average rate if
the average rate approximates the actual rate at the date of the
transaction.

Monetary assets and liabilities denominated in foreign currencies
are translated into the functional currency at the exchange rate
at the reporting date. Nonmonetary assets and liabilities that are
measured at fair value in a foreign currency are translated into
the functional currency at the exchange rate when the fair value
was determined.

Non-monetary assets and liabilities that are measured based on
historical cost in a foreign currency are translated at the exchange
rate on the date of the original transaction. Exchange differences
arising on settlement of such transactions and on translation of
monetary items are recognized in the Statement of Profit and
Loss.