1 CORPORATE INFORMATION

Nestle India Limited ("the Company") is a Company domiciled in India, with its registered office situated at 100/101, World Trade Centre, Barakhamba Lane, New Delhi - 110 001. The Company has been incorporated in 1959 under the provisions of Indian Companies Act and its equity shares are listed on the BSE Limited and NSE Limited in India. The Company is primarily involved in Food business which incorporates product groups viz. Milk Products and Nutrition, Prepared Dishes and Cooking Aids, Powdered and Liquid Beverages and Confectionery.

2 MATERIAL ACCOUNTING POLICIES

Material accounting policies used in preparation of the standalone financial statements have generally been included in the relevant notes to the financial statements.

A BASIS OF PREPARATION AND MEASUREMENT a Statement of Compliance

The financial statements of the Company have been prepared in compliance with all material aspects of the Indian Accounting Standards (Ind AS) as notified under Section 133 of the Companies Act, 2013 and presentation requirements of Division II of Schedule III to the Companies Act, 2013.

b Basis of Measurement

The financial statements have been prepared on accrual and going concern basis under the historical cost convention except for certain class of financial assets/ liabilities, share based payments and net liability for defined benefit plans that are measured at fair value. The accounting policies have been consistently applied by the Company unless stated otherwise.

c Financial Year

The Company had opted the period of 1^st day of January to 31^st day of December, each year as its financial year for the purpose of preparation of financial statements under the provisions of Section 2(41) of the Companies Act, 2013, which the Company Law Board had allowed.

The Board of Directors on 27^th July 2023 have approved the change of financial year of the Company to uniform financial year commencing on 1^st April of every year and ending on 31^st March of the following year. Consequently, as a transitional arrangement, the previous financial year of the Company was for a period of 15 months from 1^st January 2023 to 31^st March 2024 and hence the figures are not comparable with the current financial year which comprised of twelve months.

d Functional and Presentation Currency

The financial statements have been prepared and presented in Indian Rupees (H), which is also the Company's functional currency.

e Rounding Off

All amounts in the financial statement and accompanying notes are presented in H million and have been rounded-off to one decimal place unless stated otherwise.

f Current and Non-current Classification

The Company has ascertained its operating cycle as 12 months for the purpose of current / non-current classification of assets and liabilities. This is based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents.

g Measurement of Profit from Operations

For better understanding of the financial performance, the Company has chosen to present Profit from Operations as an additional information in the Statement of Profit and Loss. Profit from Operations is derived from Profit before Exceptional Items & Tax less Other Income and adding back Finance Costs (Including Interest Cost on Employee Benefit Plans) and Corporate Social Responsibility Expense.

h Use of Estimates and Judgement

The preparation of financial statements requires management to exercise judgement and make estimates and assumptions that affects the reported amounts of revenue, expenses, assets and liabilities. These estimates and assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. These estimates and underlying assumptions are reviewed on a periodic basis. Revisions to accounting estimates are recognised in the period in which the results are known/materialise.

The areas involving significant estimates and judgement include determination of useful life of property, plant and equipment (Refer note 6), measurement of lease liabilities and right of use assets (Refer note 6), measurement of defined benefit obligations (Refer note 32), recognition and measurement of provisions and contingencies (Refer note 34) and recognition of deferred tax assets / liabilities (Refer note 36).

i Approval of Financial Statements

The financial statements of the Company for the period ended 31^st March 2025 were approved for issue by the Board of Directors on 24^th April 2025.

B FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currency are initially recorded in the functional currency i.e. Indian Rupees (H) using the exchange rate at the date of transaction.

Monetary items (i.e. receivables, payables) denominated in foreign currency are reported using the closing exchange rate as on each balance sheet date.

The exchange difference arising on the settlement or reporting of monetary items at rates different from rates at which these were initially recorded / reported in previous financial statements, are recognised in the statement of profit and loss in the period in which they arise.

Also refer to accounting policy on 'Derivatives and Hedge accounting'. (Refer note 37)

C PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions for Contingencies/ Contingent liabilities are recognised/disclosed after evaluation of facts and legal aspects of the matter involved, in line with Ind AS 37- Provisions, Contingent Liabilities and Contingent Assets and Ind AS 12 - Income Taxes. Provisions are recognised when the Company has a present obligation (legal/ constructive) and on management judgement as a result of a past event, for which it is probable that a cash outflow will be required and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not require an outflow of resources. When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources is remote, no provision or disclosure is made.

Contingent assets are not recognised in the financial statements since this may result in the recognition of income that may never be accrued/ realised.

D BORROWING COSTS

Borrowing costs directly attributable to acquisition or construction of qualifying assets (i.e. assets which take substantial period of time to get ready for their intended use) are capitalised as part of the cost of that asset. All other borrowing costs are recognized as an expense in the Statement of Profit and Loss in the period in which they are incurred.

E EARNINGS PER SHARE

Basic earnings per share is computed by dividing the net profit for the period attributable to the equity shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares, if any.

On and from the Record Date of 5^th January 2024, the equity shares of the Company have been sub- divided, such that 1 (one) equity share having face value of H10/- (H ten only) each, fully paid-up, stands sub-divided into 10 (ten) equity shares having face value of H1/- (H one only) each, fully paid-up, ranking pari-passu in all respects. The Earnings per Share for the prior periods have been restated considering the face value of H1/- each in accordance with Ind AS 33 - Earnings per Share.

F EVENTS OCCURING AFTER THE BALANCE SHEET DATE

All material events occurring after the balance sheet date upto the date of approval of financial statements by the Board of Directors on 24^th April 2025, have been considered, disclosed and adjusted, wherever applicable, as per the requirements of Ind AS 10 - Events after the Reporting Period.

3 RECENT ACCOUNTING PRONOUNCEMENTS

The Ministry of Corporate Affairs (MCA) has notified amendments to the Companies (Indian Accounting Standards) Rules, 2015, vide notification number G.S.R. 492 (E) dated 12^th August, 2024, G.S.R. 554(E) dated 9^th September, 2024 and G.S.R. 602(E) dated 28^th September, 2024. These amendments are applicable for reporting periods beginning on or after April 1, 2024 but do not have material impact on the financial statements of the Company.

4 EXCEPTIONAL ITEMS

A. For financial year ended 31^st March 2025, exceptional items of H2,908.2 million comprise of gain on slump sale of the businesses mentioned below:

i. Nestle Business Services ('NBS') Division to Nestle Business Services India Private Limited (Formerly known as Purina PetCare India Private Limited).

ii. Nutraceutical Business ("NHSc") to Dr. Reddy's and Nestle Health Science Limited.

B. For previous year ended 31^st March 2024, exceptional items comprise of the following, in aggregate:

i. Charge of H972.2 million towards past service cost and settlement loss recognised on account of change in cost of servicing the defined pension benefit under the Company's unfunded Defined Benefit pension plan.

ii. Write-back of provision of H1,015.9 million made in earlier years for an indirect tax matter upon the settlement of dispute with concerned state Government authority.

5 BUSINESS COMBINATIONA. Business Combination under Common Control

The Company has executed slump sale of Nestle Business Services ('NBS') Division to Nestle Business Services India Private Limited (Formerly known as Purina PetCare India Private Limited) on 1^st July 2024, which is a related party, being a 100% subsidiary of Nestle S.A., for a net consideration of H765.8 million.

B. Business Combination - Others

The Company has made an investment for 49% stake in Dr. Reddy's and Nestle Health Science Limited ("Associate Company") for development of Nutraceutical business. Pursuant to this, the investee entity has become an associate of the Company with effect from 24^th July 2024. As part of this transaction, Nutraceuticals Business ('NHSc Business') of the Company was transferred to the associate Company for a net consideration of H2,231.0 million with effect from 1^st August 2024.

Dr. Reddy's Laboratories Limited (Dr. Reddy's) holds 51% and the Company holds 49% in the Associate Company with proportionate shareholder rights to voting, dividend distribution, and other economic rights as enshrined in the agreement. Nestle India will have a call option to increase shareholding upto 60% after six years at a fair market value. Dr. Reddy's shall continue to hold at least 40% of the shareholding after the Company exercises its call option.

Property, Plant and Equipment - Owned

Items of property, plant & equipment are stated at historical cost less accumulated depreciation and accumulated impairment losses, if any. Cost is inclusive of freight, duties, taxes or levies (net of recoverable taxes) and any directly attributable cost of bringing the assets to their working condition for intended use.

Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet are disclosed as "Capital work-in-progress" and stated at cost less accumulated impairment loss, if any.

Profit or loss on disposal / scrapping / write off / retirement from active use of an item of property, plant and equipment is recognised in the statement of profit and loss.

Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is classified as capital advances under "Other Non-Current Assets".

Depreciation / Amortization

The Company has assessed the useful lives of property, plant and equipment as required by Schedule II to the Companies Act, 2013. Accordingly, depreciation has been computed on useful lives based on technical evaluation of relevant class of assets including components thereof. Useful lives and residual values are reviewed annually. Depreciation is provided as per the straight line method computed basis useful lives of property, plant and equipment as follows:

Freehold land is not depreciated.

Impairment of Property, Plant and Equipment

At each balance sheet date, the company reviews whether there is any indication that an item of property, plant and equipment including capital work in progress, right of use assets or intangible assets (asset / cash generating unit) may be impaired. For the purpose of assessing impairment, assets are grouped at the levels for which there are separately identifiable cash flows (cash generating unit). If any impairment indicator exists, estimate of the recoverable amount of the property, plant and equipment /cash generating unit to which the asset belongs is made. An impairment loss is recognised in the statement of Profit and Loss whenever the carrying amount of an asset/ cash generating unit exceeds its recoverable amount. The recoverable amount is the greater of the fair value less cost to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount rate.

Reversal of impairment losses recognised in earlier years is recorded when there is an indication that the impairment losses recognised for the asset/cash generating unit no longer exist or have decreased. However, the increase in carrying amount of an asset due to reversal of an impairment loss is recognised to the extent it does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognised for that asset/cash generating unit in earlier years.

Property, Plant and Equipment - Right of Use Assets

The company's leases mainly comprises of land, buildings, plant & machinery and vehicles. The company leases land and buildings primarily for offices, manufacturing facilities and warehouses.

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.

At the date of commencement of the lease, the Company recognises a right-of-use asset ("ROU") and a corresponding lease liability for all lease arrangements in which it is a lessee.

The right-of-use assets are initially recognised 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 or useful life of the underlying asset.

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 lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made. A lease liability is remeasured upon the occurrence of certain events such as a change in the lease term or a change in an index or rate used to determine lease payments with a corresponding adjustment to the carrying value of Right-of-use assets.

Lease liability and Right-of-use assets are separately presented in the Balance Sheet and lease payments are classified as financing cash flows in the Cash Flow Statement.