1. Overview

1.1 Company Overview

Nectar Lifesciences Limited, CIN: L24232PB1995PLC016664,
(the company) is a public limited Company incorporated under
the provision of the Companies Act, 1956 on 27^th June 1995.
The Company is an integrated pharmaceutical organization,
having its corporate office in Chandigarh and works in the
states of Punjab, Himachal Pradesh, and Jammu & Kashmir.

The Company has sustainable production systems to
manufacture APIs and Formulations. With an expertise in
R&D, the Company has been experiencing growth in this
segment. The Company is also in the Menthol business and
succeeded in both domestic and international markets.

The Company has its primary listings on the BSE Limited and
National Stock Exchange of India Limited. The financial
statements were approved by the company’s Board of
Directors and authorized for issue on 7^th July 2025.

1.2 Basis of Preparation of Financial Statements

I. Statement of Compliance

These financial statements have been prepared to
comply with the Indian Accounting Standards (Ind AS)
under the historical cost convention on going concern
basis and on accrual basis except certain items which
have been measured at fair value. The Ind AS are
prescribed under Section 133 of the Act read with Rule
3 of the Companies (Indian Accounting Standards) Rules,
2015 and Companies (Indian Accounting Standards)
Amendment Rules, 2016.

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. The material accounting policies
information used in preparation of audited consolidated
financial statements have been discussed in the
respective notes.

II. Use of Estimates & Judgments:

The preparation of the financial statements in conformity
with Ind AS requires management to make estimates,
judgments, and assumptions, that affect the application
of accounting policies and the reported amounts of
assets, liabilities, income, and expenses, the disclosures
of contingent assets and liabilities at the date of the
financial statements and reported amounts of revenues
and expenses during the period.

Accounting estimates can change from period to period.
Actual results could differ from those estimates.
Estimates and underlying assumptions are reviewed at
each balance sheet date. Changes in estimates are
reflected in the financial statements in the period in which
the changes are made and, if material, their effects are
disclosed in the notes to the financial statements.

The application of accounting policies that require critical
accounting estimates involving complex and subjective
judgments and the use of assumption in these financial
statements have been disclosed in Note - 2 below.

1.3 Critical Accounting Estimates and Judgments

i) Revenue Recognition

Revenue is recognized when the control of the goods
has been transferred to a third party. This is usually when
the title passes to the customer, either upon shipment
or upon receipt of goods by the customer. At that point,
the customer has full discretion over the channel and
price to sell the products, and there are no unfulfilled
obligations that could affect the customer’s acceptance
of the product. Revenue is recognized to the extent that it
can be reliably measured and is probable that the economic
benefits will flow to the company.

a) Sale of Goods:

Revenue from the sale of goods is recognized when
the significant risks and rewards of ownership of the
goods are transferred to the customer and is
measured at the transaction price which is the
consideration received or receivable, net of returns,
taxes and applicable trade discounts and
allowances. Revenue includes shipping and
handling costs billed to the customer.

Revenue is also recognized for goods sold but not
dispatched, where the property in such goods is
transferred from the seller to the buyers and where
dispatches could not be made on account of practical
difficulties at the buyers’ end.

b) Export Benefits:

Export and other benefits are accounted for on an
accrual basis. Export entitlements are recognized
as reduction from material consumption when the
right to receive credit is established in respect of
the exports made and when there is no significant
uncertainty regarding the ultimate collection of the
relevant export proceeds.

ii) Useful lives of property, plant and equipment and
intangible assets

The Company reviews the useful lives of property, plant
and equipment and intangible assets at the end of each
reporting period. This reassessment may result in the
change in depreciation and amortization expense in
future periods.

iii) Fair value of financial assets and liabilities and
investments

The Company measures certain financial assets and
liabilities on a fair value basis at each balance sheet
date or at the time they are assessed for impairment.
Fair value measurements that are based on significant
unobservable inputs (Level 3) require estimates of
operating margin, discount rate, future growth rate,
terminal values, etc. based on management’s best
estimate about future developments.

iv) Defined Benefits and other long-term benefits

The cost of the defined benefit plans such as gratuity
and leave encashment are determined using actuarial
valuations. An actuarial valuation involves making
various assumptions that may differ from actual
developments in the future. These include the

determination of the discount rate; future salary increases
and mortality rates. Due to the complexities involved in
the valuation and its long-term nature, a defined benefit
obligation is highly sensitive to changes in these
assumptions. All assumptions are reviewed at each year
end.

The principal assumptions are the discount and salary
growth rate. The discount rate is based upon the market
yields available on government bonds at the accounting
date with a term that matches that of liabilities. Salary
increases rate considers inflation, seniority, promotion,
and other relevant factors on long-term basis.

v) Income Taxes

Income tax expense comprises current tax, MAT credit
entitlement lapsed and deferred income tax. Income tax
expense is recognized in net profit in the statement of
profit and loss except to the extent that it relates to items
recognized directly in equity, in which case it is
recognized in other comprehensive income.

Current Tax

Current tax is determined as the amount of tax payable
in respect of taxable income for the year. The company’s
current tax is calculated using tax rates that have been
enacted or substantively enacted by the end of the
reporting period.

Deferred Tax

Deferred tax is the effect of timing differences between
taxable income and accounting income that originate in
one period and are capable of reversal in one or more
subsequent periods. Deferred tax is measured based

on the tax rates and the tax laws enacted or substantively
enacted at the balance sheet date. Deferred tax assets
are reviewed at each balance sheet date and recognized/
derecognized only to the extent that there is reasonable/
virtual certainty, depending on the nature of the timing
differences, that sufficient future taxable income will be
available against which such deferred tax assets can be
realized.

Minimum Alternate Tax (MAT)

Minimum Alternate Tax (MAT) credit is recognized as
an asset only when and to the extent there is convincing
evidence that the Company will pay normal income tax
during the specified period. In the period in which MAT
credit becomes eligible to be recognized as an asset in
accordance with the recommendations contained in
guidance note issued by the Institute of Chartered
Accountants of India, the said asset is created by way
of a credit to the Statement of profit and loss and shown
as MAT credit entitlement. The Company reviews the
same at each balance sheet date and writes down the
carrying amount of MAT credit entitlement to the extent
it is not reasonably certain that the Company will pay
normal income tax during the specified period.

vi) Leases

The Company has elected not to recognize right-of use
assets and lease liabilities for short term leases that have
a lease term of 12 months or less and leases of low
value assets. The Company recognizes the lease
payments associated with these leases as an expense
on a straight- line basis over the lease term.

28. Cash Flow Statement
Accounting Policies

Cash flows are reported using the indirect method, whereby
profit for the period is adjusted for the effects of transactions of
a non-cash nature, any deferrals, or accruals of past or future
operating cash receipts or payments and item 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. The Company considers all
highly liquid investments that are readily convertible to known
amounts of cash to be cash equivalents.

29. Property Plant & Equipment
Accounting Policies

a) Recognition and measurement

Property, Plant & Equipment have been stated at cost,
net of GST Input tax credit, but inclusive of import duties
and other non-refundable taxes or levies, freight, and any
directly attributable costs of bringing the assets to their
working condition for their intended use and estimated cost
of dismantling and restoring onsite less depreciation and
impairment loss, if any; any trade discounts and rebates
are deducted in arriving at the purchase price.

When parts of an item of property, plant and equipment
have different useful lives, they are accounted for as
separate items (major components) of property, plant and
equipment.

The cost of replacing part of an item of property, plant and
equipment is recognized in the carrying amount of the item
if it is probable that the future economic benefits embodied
within the part will flow to the Company and its cost can be
measured reliably.

The costs of repairs and maintenance are charged to the
statement of profit and loss account during the reporting
period in which they are incurred.

b) Subsequent Expenditure

Subsequent expenditure is recognized only if it is probable
that the future economic benefits associated with the
expenditure will flow to the Company and the cost of the
item can be measured reliably.

c) Derecognition

An item of property, plant and equipment and any
significant part initially recognized is derecognized upon
disposal or when no future economic benefits are expected
from its use or disposal. Any gain and loss upon disposal
of an item of property, plant and equipment is determined
by comparing the proceeds from disposal with the carrying
amount of property, plant and equipment and are
recognized in the statement of profits and loss account.

d) Impairment of Assets

Management periodically assesses using external and
internal sources whether there is an indication that an asset
may be impaired. Impairment occurs where the carrying
value of future cash flows expected to arise from the
continuing use of the assets and its eventual disposal. The
impairment loss to be expensed is determined as the
excess of the carrying amount over the higher of the asset’s
net sales price or present value as determined above.

e) Depreciation

Depreciation is provided on straight line basis on the
original cost/ acquisition cost of assets or other amounts
substituted for cost of property, plant and equipment as
per the useful life specified in Part ‘C’ of Schedule II of the
Act, read with notification dated August 29, 2014, of the
Ministry of Corporate Affairs, except for certain classes of
property, plant and equipment which are depreciated based
on the internal technical assessment of the management.

Depreciation on property, plant and equipment is provided
on straight line basis using the lives as mentioned below:-

Based on technical parameters/assessments, the
management believes that useful lives currently used fairly
reflect its estimate of the useful lives and residual values
of Property, plant, and equipment, though these lives in
certain cases are different from lives prescribed under
Schedule II.

Depreciation methods, useful lives and residual values are
reviewed at each reporting date and adjusted if appropriate.
Depreciation on additions/(disposals) is provided on a pro¬
rata basis i.e., from/up to the date on which asset is ready
or use/disposed off.

Depreciation on leasehold land is provided over the lease
period and only on leasehold cost paid by the Company.
Any unearned increase not attributable to lessor when the
asset is sold is valued at Fair Value and no amortization is
provided on the same. Leasehold improvements are
depreciated over a period of the lease agreement or the
useful life, whichever is shorter.

30. Capital Work in Progress

Ageing schedule for the year ended March 31, 2025:

* Completion time of projects is not ascertainable because the
projects have been temporarily suspended.

Accounting Policies

Cost of property, plant, and equipment not ready for use as at
the reporting date are disclosed as capital work-in-progress.
Capital work in progress is stated at cost, net of accumulated
impairment loss, if any.

31. Intangible Assets

During the year, the Company incurred an amount of ' 162.23
million (Previous Year ' 143.56 million) on product development,
product approval and such other related development expenses,
recognized as Intangible Assets in the books of accounts and
the same is amortized on straight line basis over a period of
next seven years.

Ageing schedule for amortized value of intangible assets
the year ended March 31, 2025

Accounting Policies

a) Recognition and measurement

Intangible assets that are acquired are recognized only if it is
probable that the expected future economic benefits that are
attributable to the asset will flow to the Company and the cost
of assets can be measured reliably. The intangible assets are
recorded at cost less accumulated amortization and impairment
losses, if any.

The research costs are expensed as incurred. Development
expenditure including regulatory cost and professional expenses
leading to product registration/ market authorization relating to
the new and/or improved product and/or process development
is capitalized only if development costs can be measured
reliably, the product or process is technically and commercially
feasible, future economic benefits are probable, and the
Company intends to and has sufficient resources to complete
development and to use the asset. The development costs
capitalized include the cost of materials, direct labour, and
overhead costs that are directly attributable to preparing the
asset for its intended use.

b) Subsequent Expenditure

Subsequent costs are capitalized only when it increases the
future economic benefits embodied in the specific asset to which
it relates. All other expenditure on intangible assets is recognized
in the Statement of Profit and Loss account, as incurred.

c) Amortization

Amortization is calculated to write off the cost of intangible assets
using the straight-line method over their estimated useful lives
and is generally recognized in depreciation and amortization
expense in the Statement of Profit and Loss account. Intangible
assets are amortized on straight line basis over a period of
next seven years.

The estimated useful life of an identifiable asset is based on
several factors including the effects of obsolescence, demand,
competition, and other economic factors (such as the stability
of the industry and known technological advances), and the
level of maintenance expenditures required to obtain the
expected future cash flows from the asset. Amortization methods
and useful lives are reviewed periodically including at each
financial year end.

d) Derecognition

An item of intangible assets is derecognized upon disposal or
when no future economic benefits are expected from its use or
disposal. Any gain or loss arising on the 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 Account when the asset is
derecognized.

32. Current and non-current classification
Accounting Policies

All assets and liabilities are presented in the Balance Sheet
based on current or non-current classification as per the
Company’s normal operating cycle and other criteria set out in
Schedule III of the Companies Act, 2013. Based on the nature
of products and the time between the acquisition of assets for
processing and their realization into cash and cash equivalents,
the Company has ascertained its operating cycle as twelve
months for the purpose of current/non-current classification of
assets and liabilities.

An asset is treated as current when:

a) It is expected to be realized or intended to be sold or
consumed in a normal operating cycle.

b) It is held primarily for the purpose of trading.

c) It is expected to be realized within twelve months after the
reporting period.

d) It is cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least twelve
months after the reporting period.

The company classifies all other assets as non-current.

A liability is treated as current when:

a) It is expected to be settled in a normal operating cycle.

b) It is held primarily for the purpose of trading.

c) It is due to be settled within twelve months after the
reporting period.

d) There is no unconditional right to defer the settlement of
the liability for at least twelve months after the reporting
period.

The company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current
assets and liabilities respectively.

33. Foreign currency translation
Accounting Policies

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
Rupee ('), which is the Company’s functional and presentation
currency.

Transactions and balances

Monetary assets and liabilities denominated in foreign currencies
at the reporting date are translated into the functional currency
at the exchange rate at that date. Exchange differences arising
on the settlement of monetary items or on translating monetary
items at rates different from those at which they were translated
on initial recognition during the period or in previous period are
recognized in the Statement of Profit and loss Account in the
period.

Initial recognition

Investments in foreign entities are recorded at the exchange
rate prevailing on the date of making the investment.
Transactions denominated in foreign currencies are recorded
at the exchange rates prevailing on the date of the transaction.

Conversion

Monetary assets and liabilities denominated in foreign
currencies, as at the balance sheet date, not covered by forward
exchange contracts, are translated at year-end rates.

Exchange Differences

Exchange differences arising on the settlement of monetary
items or on reporting Company’s monetary items at rates
different from those at which they were initially recorded during
the year, or reported in the previous financial statements, are
recognized as income or expense in the year in which they
arise and as per Ind AS 21, exchange differences arising on
account of consolidation with foreign operation, are recognized
in Other Comprehensive Income. The Company has opted for
voluntary exemption given in Ind AS-101, which allows first time
adopter to continue its Indian GAAP policy for accounting of
exchange difference arising on translation of long-term foreign
currency monetary items recognized in the financial statements
for the period ending immediately before the beginning of the
first Ind AS financial reporting period.

34. Inventories

During the financial year 2020-21, the company engaged an
independent technical expert - nominated by the Lead Bank
under the Agency for Special Monitoring to perform a
comprehensive quality assessment of certain raw materials and
work in progress batches. Based on expert’s findings, the
Company reclassified inventory totaling ' 2,510.87 million from
“inventories” (current) to “Non- Current Assets”.

Notwithstanding the reports furnished by technical expert about
the remaining non-current inventory, the management has,
adhering to conservatism principle, decided to mark down the
realizable value of inventory to ' 506.13 million from ' 1,773.31
million, based on the fact that the inventory has been in stocks
for a considerable period. The resultant loss has been charged
to profit and loss account in the fourth quarter. The management
is confident that the value remaining after mark down is
realizable.

The classification and measurement of net realizable value
reflect significant management judgements and estimates
concerning market demand, processing yields and future selling
prices. These estimates are inherently uncertain and actual
outcome may differ. Accordingly, the company periodically
reviews and adjusts carrying amounts as warranted by changing
conditions.

Accounting Policies

Raw materials, Stores and Spares and Packing material.

Goods are valued at “Cost” or “Net Realizable Value” whichever
is lower. Cost of inventory comprises all cost of purchase and
other costs incurred in bringing the inventories to their present
location and condition.

Finished Goods and work in process.

Finished goods and work in process are valued at “Cost” or
“Net Realizable Value” whichever is lower. Cost includes direct
material, labour and proportionate manufacturing overheads.

Traded goods

Traded goods are valued at “Cost” or “Net Realizable Value”
whichever is lower. Cost includes the purchase price and other
associated costs directly incurred in bringing the inventory to
its present location.

Net realizable 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
uses the first in first out (FIFO) method to determine costs for
all categories of inventories.

35. Financial Instruments

a) Accounting classification

The following table shows the carrying amounts of financial
assets and financial liabilities.

b) Fair value hierarchy

The fair value of financial instruments as referred to in note (A)
above has been classified into three categories depending on
the inputs used in valuation technique. The hierarchy gives the

highest priority to quoted price in active markets for identical
assets or liabilities [Level 1 measurements] and lowest priority
to unobservable inputs [Level 3 measurements].

The categories used are as follows:

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

Level 2: Inputs other than quoted prices included in Level 1
that are observable for the asset or liability, either directly (i.e.
as prices) or indirectly (i.e. derived from prices).

Level 3: Inputs for the asset or liability that are not based on
observable market data (unobservable inputs).

Financial assets and liabilities measured at fair value as at
31.03.2025:

c) Financial Risk Management

The Company is exposed to various types of financial risks in
conduct of its business activities. The main risks to which it is
exposed includes market risk, liquidity risk and credit risk. The
Company’s Board of Directors has overall responsibility for the
establishment and oversight of the company’s risk management
framework. The company maintains a core focus on the strategic
management of financial risks to mitigate their potential
detrimental impact on its fiscal performance. These risks are
systematically governed by an approved policy, ensuring a
comprehensive and robust approach to risk mitigation within
the organization.

i. Credit Risk

Credit risk is the risk of financial loss to the Company if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations. The carrying amounts of financial
assets represent the maximum credit exposure.

Expected credit losses for financial assets other than trade
receivables:

Investments in equity shares and mutual funds are measured
at mark to market hence, the credit risk associated with these
investments already considered in valuation as on reporting
date.

Company maintains its cash & cash equivalents and bank
deposits with reputed banks. The credit risk on these
instruments is limited because the counterparties are bank with
high credit ratings assigned by domestic credit rating agencies.
Hence, the credit risk associated with cash & cash equivalent
and bank deposits is relatively low.

Loans comprise loans given to employees & director, which
would be adjusted against salary and retirement benefits of the
employees and hence credit risk associated with such amount
is also relatively low.

Security deposits given for operational activities of the Company
which will be returned to the Company as per the contracts with
respective parties. The Company monitors the credit ratings of
the counterparties on regular basis. These security deposits
carry very minimal credit risk based on the Company’s historical
experience of dealing with the parties.

Credit risk in insurance claim receivables refers to the
uncertainty surrounding the timely and full payment of claims
by the insurance company. The company has filed insurance
claims with the reputable insurers with strong financial ratings
and track records of prompt claims settlement.

Expected credit losses for trade receivables:

Credit risks related to receivables is managed by Company’s
management by implementing policies, procedures and controls
relating to customer credit risk management. Outstanding
customer receivables are regularly monitored. An impairment
analysis is performed at each reporting date on trade receivables
by using lifetime expected credit losses as per simplified
approach wherein the weighted average loss rates are analysed
from the historical trends of defaults. Such provision matrix has
been considered to recognize lifetime expected credit losses
on trade receivables (other than those where defaults criteria
are met).

The Company evaluates the concentration of risk with respect
to trade receivables low since its customers are mainly reputed
manufacturer and operate in independent markets. These
receivables are written off when there is no reasonable
expectation of recovery. There are no receivables which are in
default as at period end, but the management allows for the
impairment of trade receivables based on its historical
experience of collection from its customers.

ii. Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty
in meeting its obligations associated with financial liabilities.
The Company consistently generates sufficient cash flows from
operations and has access to multiple sources of funding to
meet the financial obligations and maintain adequate liquidity
for use. The Company manages liquidity risk by maintaining
adequate reserve, banking facilities and reserve borrowing
facilities, by continuously monitoring forecast and actual cash
flows, and by matching the maturity profiles of financial assets
and liabilities.

Maturity profile of financial liabilities

The table below provides details regarding the remaining
contractual maturities of financial liabilities at the reporting date
based on contractual undiscounted payments.

Sensitivity

A reasonably possible strengthening (weakening) of the US
dollar against ' at March 31 would have affected the
measurement of financial instruments denominated in a foreign
currency and affected equity and profit or loss by the amounts
shown below. This analysis assumes that all other variables
remain constant.

The sensitivity of profit/(loss) to changes in the exchange rates
arises mainly from foreign currency denominated financial
instruments.

iii. Market Risk

Market risk is the risk that the future cash flows of a financial
instrument will fluctuate because of changes in market prices.
Market risk comprises two types of risk namely: currency risk
and interest rate risk. The objective of market risk management
is to manage and control market risk exposures within
acceptable parameters, while optimising the return.

• Foreign Currency Risk

Currency risk is the risk that the future cash flows of a financial
instrument will fluctuate because of changes in foreign exchange
rates. Exposure arises primarily due to exchange rate
fluctuations between the functional currency and other
currencies from the Company’s operating, investing and
financing activities.

The Company undertakes transactions denominated in foreign
currency (mainly US Dollar) which are subject to the risk of
exchange rate fluctuations. Considering the low volume of
foreign currency transactions, the Company’s exposure to
foreign currency risk is limited hence the Company does not
use any derivative instruments to manage its exposure.

Foreign currency risk exposure in USD:

The Company’s exposure to foreign currency risk at the end of
the reporting period expressed in rupees, are as follows:

Accounting Policies

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.

a) Financial Assets

i. Initial recognition

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

ii. Subsequent measurement

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

• Debt instruments at amortized cost

A ‘debt instrument’ is measured at the amortized cost if the
asset is held within a business model whose objective is to
hold assets for collecting contractual cash flows, and 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.

After initial measurement, such financial assets are
subsequently measured at amortized cost using the effective
interest rate (EIR) method. The effective interest rate is the
rate that exactly discounts estimated future cash payments or
receipts through the expected life of the financial instrument to
the gross carrying amount of the financial asset or the amortized
cost of the financial liability. Amortized cost is calculated by
considering any discount or premium on acquisition and fees
or costs that are an integral part of the EIR. The EIR amortization
is included in other income in the Statement of Profit and Loss
Account. The losses arising from impairment are recognized in
the Statement of Profit and Loss Account. This category
generally applies to trade and other receivables.

• Debt instruments at fair value through Other
Comprehensive Income (FVTOCI):

A ‘debt instrument’ is classified as at the fair value through
other comprehensive income (FVTOCI) if it is held within a
business model whose objective is achieved both by collecting
contractual cash flows and selling the financial assets, and the
asset’s contractual terms give rise on specified dates to cash
flows that are solely payments of principal and interest (SPPI)
on the principal amount outstanding.

Debt instruments included within the FVTOCI category are
measured initially as well as at each reporting date at fair value.
Fair value movements are recognized in the other
comprehensive income (OCI). On derecognition of the asset,
cumulative gain or loss previously recognized in Other
Comprehensive Income is reclassified to the Statement of Profit
and Loss Account. Interest earned whilst holding FVTOCI debt
instrument is reported as interest income using the EIR method.

• Debt instrument, Derivatives and Equity instruments at fair
value through profit or loss FVTPL:

Fair value through Profit & Loss (FVTPL) is a residual category
for debt instruments. Any debt instrument, which does not meet
the criteria for categorization as amortized cost or as fair value
through other comprehensive income, is classified as at FVTPL.
In addition, at initial recognition, the Company may irrevocably
elect to designate a debt instrument, which otherwise meets
amortized cost or FVTOCI criteria, as at FVTPL (Refer Note 5).
However, such an election is allowed only if doing so reduces
or eliminates a measurement or recognition inconsistency
(referred to as ‘accounting mismatch’).

Debt instruments included within the FVTPL category are
measured at fair value with all changes recognized in the
Statement of Profit and Loss Account. Equity instruments
included within the FVTPL category are measured at fair value
with all changes recognized in the Statement of Profit and Loss
Account. Dividend income from investments is recognized in
the Statement of profit and loss account on the date that the
right to receive payment is established.

• Equity instrument at fair value through Other
comprehensive income FVTOCI:

If the Company decides to classify an equity instrument as at
fair value through other comprehensive income (FVTOCI), then
all fair value changes on the instrument, excluding dividends,
are recognized in the other comprehensive income (OCI). There
is no recycling of the amounts from OCI to the Statement of
Profit and Loss Account, even on sale of investment. However,
the Company may transfer the cumulative gain or loss to
retained earnings.

iii. Impairment of Financial Assets

The Company recognizes loss allowance using the expected
credit loss (ECL) model for financial assets which are not fairly
valued through profit or loss account. Loss allowance for trade
receivables with no significant financing component is measured
at an amount equal to lifetime ECL. For all financial assets with
contractual cash flows other than trade receivable, ECLs are
measured at an amount equal to the 12-month ECL, unless there
has been a significant increase in credit risk from initial recognition
in which case those are measured at lifetime ECL. The amount
of ECL (or reversal) that is required to adjust the loss allowance
at the reporting date is recognized as an impairment gain or loss
in the Statement of Profit and Loss Account.

iv. Derecognition of Financial Assets

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

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

• The company has transferred its rights to receive cash flow
from the asset or has assumed an obligation to pay the received
cash flow in full without material delay to the third party under a
‘pass-through’ arrangement and either (a) the Company has
transferred substantially all the risk and rewards of the assets,

or (b) the Company has neither transferred nor retained
substantially all the risk and rewards of the asset, but transferred
control of the assets.

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. When it has neither
transferred nor retained substantially all the risks and rewards
of the asset, nor transferred control of the asset, the Company
continues to recognize the transferred asset to the extent of
the Company’s continuing involvement. In that case, the
Company also recognizes an associated liability.

The transferred assets and the associated liability are measured
on a basis that reflects the rights and obligations that the
Company has retained.

Write off of financial assets the gross carrying amount of a
financial asset is written off when the Group has no reasonable
expectations of recovering a financial asset in its entirety or a
portion thereof. The Group expects no significant recovery from
the amount written off.

Investments are classified into Current and Non-current
Investments. Non-Current Investments are stated at cost and
provision for diminution in value is made if decline is other than
temporary in the opinion of the management. Current
Investments are valued at market rate at the year end.

b) Financial Liabilities

i. Initial recognition and measurement

Financial Liabilities are classified, at initial recognition, as
financial liabilities at fair value through the Statement of Profit
or Loss Account and financial liabilities at amortized cost, as
appropriate.

All Financial Liabilities are recognized initially at fair value and,
in the case of liabilities subsequently measured at amortized
cost, they are measured net of directly attributable transaction
cost. In the case of Financial Liabilities measured at fair value
through Profit or Loss, transactions costs directly attributable
to the acquisition of financial liabilities are recognized
immediately in the statement of Profit or Loss Account.

The company’s Financial Liabilities include trade and other
payables, loans and borrowings including financial guarantee
contracts and derivative financial instruments.

ii. Subsequent Measurement

Financial Liabilities are classified, at initial recognition, as
financial liabilities at fair value through the Statement of Profit
or Loss Account and financial liabilities at amortized cost, as
appropriate.

• Financial Liabilities at Fair Value through Profit or Loss:

Financial Liabilities at fair value through profit or loss include
financial liabilities held for trading and financial liabilities
designated upon initial recognition as at fair value through the
Statement of Profit and Loss Account. Financial Liabilities are
classified as held for trading if they are incurred for the purpose
of repurchasing in the near term. This category also includes
derivative financial instruments entered into by the Company
that are not designated as hedging instruments in hedge
relationships as defined by Ind AS 109. Gains or losses on
liabilities held for trading are recognized in the Statement of
Profit and Loss Account.

• Financial Liabilities at Amortized Cost:

Financial Liabilities that are not held for trading and are not
designated as at fair value through profit & loss (FVTPL) are

measured at amortized cost at the end of subsequent accounting
periods. The carrying amounts of financial liabilities that are
subsequently measured at amortized cost are determined based
on the effective interest method. Gains and losses are recognized
in the Statement of Profit and Loss Account when the liabilities
are derecognized as well as through the EIR amortization process.
Amortized cost is calculated by considering any discount or
premium on acquisition and fees or cost that are an integral part
of the EIR. The EIR amortization is included as finance costs in
the Statement of Profit and Loss Account.

iii. Derecognition of Financial Liabilities

Financial liability is derecognized when the obligation under the
liability is discharged or cancelled or expires. 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 Account.

c) Off-setting of Financial Instruments

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

36. Current Assets, Loans & Advances

In the opinion of the management of the Company, the current
assets, loans and advances are approximately of the value as
stated, if realized in the ordinary course of business and are
subject to confirmation/reconciliation.

37. Trade Receivables

Ageing schedule of Trade Receivables for the year ended
March 31, 2025

Current Tax

Provision for Current Income Tax has been made as per Income
Tax Act, 1961, based on legal opinion obtained by the Company
from its income tax consultant and the statutory auditors have
relied upon the said legal opinion for the purpose of current
income tax.

Deferred Tax

In compliance with Indian Accounting Standard (Ind AS 12)
relating to “Income Tax” issued under Companies (Indian
Accounting Standards) Rules, 2016 as amended up to date,
the Company has provided Deferred Tax Asset during the year
aggregating to ' 557.58 million (Previous Year deferred tax
reversal of ' 68.59 million) and it has been recognized in the
Statement of Profit & Loss Account. In accordance with Indian
Accounting Standard (Ind AS 12) Deferred Tax Assets and
Deferred Tax Liabilities have been set off.

39. Cash and Cash Equivalents

FDRs with Banks reflects amount on account of FDRs held as
Margin Money.

Accounting Policies

Cash and cash equivalents include cash in hand, demand
deposits with banks and other short-term highly liquid
investments with original maturities of three months or less.

For cash flow statement, cash and cash equivalent includes
cash in hand, in banks, and other short-term highly liquid
investments with original maturities of three months or less,
net of outstanding bank overdrafts that are repayable on demand
and are considered part of the cash management system.

40. Share Capital

The Company has only one class of equity shares having a par
value of ' 1 each. Each holder of equity shares is entitled to
one vote per share. In the event of liquidation of the Company,
holders of equity shares will be entitled to receive any of the

41. Borrowings
a) Secured Loans

Long Term Loans from various banks are secured by way of
First Pari Passu Charge on all the fixed assets of the Company
(both present & future) and further secured by way of Second
Pari Passu Charge on all the current assets of the Company,
personal guarantee of Sh. Sanjiv Goyal, Chairman & Managing
Director & Sanjiv HUF (HUF of Sh. Sanjiv Goyal) and pledging
of their 100% shares.

c) Working Capital Limits are secured by way of First Pari Passu
Charge on all the current assets of the Company and further
secured by way of Second Pari Passu Charge on all the fixed
assets of the Company, personal guarantee of Sh. Sanjiv Goyal,
Chairman & Managing Director & Sanjeev and Sons HUF (HUF
of Sh. Sanjiv Goyal) and pledging of their 100% shares.

42. Investor Education and Protection Fund

Other financial liabilities include ' 0.13 million (Previous year
' 0.17 million) which relates to unpaid/ unclaimed dividend.
During the year ' 0.04 million (Previous year ' 0.10 million)
was deposited relating to unclaimed dividend with the Investor
Education and Protection Fund.

43. Employee Retirement Benefits

a) Defined Benefit Plans (Unfunded)

In accordance with the Payment of Gratuity Act, 1972, the
Company provides for gratuity, as defined benefit plan. The
gratuity plan provides for a lump sum payment to the employees
at the time of separation from the service on completion of
vested year of employment i.e. five years. The liability of gratuity
plan is provided based on actuarial valuation as at the end of
each financial year. The liabilities are unfunded.

b) Compensated absences (Unfunded)

The leave obligations cover the Company’s liability for sick and
earned leaves. The Company does not have an unconditional
right to defer settlement for the obligation shown as current
provision. However, based on past experience, the Company
does not expect all employees to take the full amount of accrued
leave or require payment within the next 12 months, therefore
based on the independent actuarial report, only a certain amount
of provisions has been recognized in the statement of profit
and loss account.

c) Defined Contribution Plans

The Company makes contributions, determined as a specified
percentage of employee salaries, in respect of qualifying
employees towards provident fund and employee state
insurance scheme which are defined contribution plans. The
Company has no obligations other than to make the specified
contributions. The contributions are charged to the statement
of profit and loss account as they accrue. The amount
recognized as an expense towards contribution to provident
and other funds for the period aggregated to ' 42.92 million
(Previous year ' 38.08 million).

Accounting Policies

Liabilities in respect of employee benefits to employees are
provided for as follows:

a) Current Employee Benefits:

i) Short-term employee benefits are measured on an undiscounted
basis and expensed as the related service is provided. A liability
is recognized for the amount expected to be paid under short¬
term cash bonus if the Company has a present legal or
constructive obligation to pay this amount because of past
service provided by the employee and the obligation can be
estimated reliably.

ii) Contribution to the Provident Fund & Employee’s State
Insurance (ESI), which is a defined contribution scheme, is
recognized as an expense in the statement of profit and loss
account in the period in which the contribution is due.

iii) The Company has adopted a policy on compensated absences
which are both accumulating and non-accumulating in nature.
The expected cost of accumulating compensated absences is
determined by actuarial valuation performed by an independent
actuary at each balance sheet date using projected unit credit
method on the additional amount expected to be paid / availed
as a result of the unused entitlement that has accumulated at
the balance sheet date. Expense on non-accumulating
compensated absences is recognized in the period in which
the absences occur.

iv) Expense in respect of other short-term benefits is recognized
on the basis of the amount paid or payable for the period during
which services are rendered by the employee.

b) Long Term Employee Benefits

i) Post-Employment Benefits (Defined Benefit Plans)

Gratuity liability accounted for based on actuarial valuation as
per Ind AS 19 ‘Employee Benefits’. Liability recognized in the
Balance Sheet in respect of gratuity is the present value of the
defined benefit obligation at the end of each reporting period
less the fair value of plan assets. The defined benefit obligation
is calculated annually by an independent actuary using the
projected unit credit method. The present value of defined
benefit is determined by discounting the estimated future cash
outflows by reference to market yield at the end of each reporting
period on government bonds that have terms approximate 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 expenses in the
Statement of Profit and Loss Account.

Actuarial gain / loss pertaining to gratuity, post separation
benefits and PF trust are accounted for as Other Comprehensive
Income. All remaining components of costs are accounted for
in the statement of profit and loss account.

ii) Post-Employment Benefits (Defined Contribution Plans)

A defined contribution plan is a post-employment benefit plan
where the Company legal or constructive obligation is limited
to the amount that it contributes to a separate legal entity. The
Company makes specified monthly contributions towards the
Government administered provident fund scheme.

Contribution to the Provident Fund is made in accordance with
the provision of Employees Provident Fund Act, 1952, and is
recognized as an expense in the statement of Profit and Loss
account in the period in which the contribution is due.

44. Deferred Income

Deferred income from government grants pertains to capital
subsidy of ' 10.00 million received from the Government of
India towards installation of power plant to be written off through
Statement of profit and loss account over the period of life of
power plant i.e., ' 0.25 million over a period of 40 years.

Accounting Policies

Grants and Subsidies are recognized when there is a reasonable
assurance that the grant or subsidy will be received and that
underlying conditions will be complied with. Government grants
are recognized in the Statement of Profit and Loss Account on
a systematic basis over the years in which the Company
recognizes as expenses the related costs for which the grants
are intended to compensate or when performance obligations
are met.

Government grants, whose primary condition is that the
Company should purchase, construct or otherwise acquire non¬
current assets and nonmonetary grants are recognized and
disclosed as ‘deferred income’ under non-current liability in the
Balance Sheet and transferred to the Statement of Profit and
Loss Account on a systematic and rational basis over the useful
lives of the related assets.

45. Trade Payable

The information as required to be disclosed pursuant under the
Micro, Small and Medium Enterprises Development Act, 2006
(MSMED Act, 2006) has been determined to the extent such
parties have been identified based on information available with
the Company.

The principal amount remaining unpaid as at 31^st March 2025
in respect of enterprises covered under the “Micro, Small and
Medium Enterprises Development Act, 2006” are ' 87.55 million
(Previous year ' 108.62 million). The interest amount computed
based on the provisions under Section 16 of the MSMED Act of
' 2.20 million (Previous year ' 0.96 million) remains unpaid as
at 31^st March 2025. The principal amount that remained unpaid
as at 31^st March 2024 was paid during the year. The list of
undertakings covered under MSMED Act was determined by
the Company based on information available with the Company
and has been relied upon by the auditors.