1 Corporate Information

Tejas Networks Limited ('Tejas' or 'the Company' CIN: L72900KA2000PLC026980) is a Wireline and Wireless telecom and data networking products company that designs, develops and manufactures high-performance and future-ready products for building high-speed communication networks that carry voice, data and video traffic from fixed line, mobile networks and solutions for broadband, satelite and broadcast applications. Tejas products are differentiated by a programmable, software-defined hardware architecture that provides flexibility, multi-generation support and a seamless software-enabled network transformation to its customers. Tejas customers include telecommunications service providers, internet service providers, web-scale internet companies, utility companies, defence companies and government entities. The Company also exports its products to overseas territories.

The Company is a public limited company incorporated and domiciled in India and has its registered office at Bengaluru, Karnataka, India. The shares of the Company are listed on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited.

These standalone financial statements have been approved by the Company's Board of Directors on April 15, 2026.

1.1 Basis of preparation of standalone financial statements

(i) Compliance with Ind AS

The standalone financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act), Companies (Indian Accounting Standards) Rules, 2015 (as amended) and other relevant provisions of the Act.

(ii) Historical cost convention

The standalone financial statements have been prepared on a historical cost basis, except for the following:

- certain financial assets and liabilities (including derivative instruments) that are measured at fair value;

- defined benefit plans - plan assets measured at fair value; and

- share-based payments measured at fair value.

(iii) New and amended standards adopted

The Ministry of Corporate Affairs vide notification dated May 07, 2025 and August 13, 2025 notified the Companies (Indian Accounting Standards) Amendment Rules, 2025 and Companies (Indian Accounting Standards) Second Amendment Rules, 2025, respectively, which amended certain accounting standards (see below), and are effective for annual reporting periods beginning on or after April 01, 2025:

(a) Classification of Liabilities as Current or Non-current and Non-current Liabilities with Covenants - Amendments to Ind AS 1

As a result of the adoption of the amendments to Ind AS 1, the Company changed its accounting policy for the classification of borrowings:

“Borrowings are classified as current liabilities unless, at the end of the reporting period, the Company has a right to defer settlement of the liability for at least 12 months after the reporting period.

Covenants that the Company is required to comply with, on or before the end of the reporting period, are considered in classifying loan arrangements with covenants as current or non-current. Covenants that the Company is required to comply with after the reporting period do not affect the classification.”

This new policy did not result in a change in the classification of the Company's borrowings. The Company did not make retrospective adjustments as a result of adopting the amendments to Ind AS 1.

(b) Supplier Finance Arrangements - Amendments to Ind AS 7 and Ind AS 107

As a result of the adoption of the amendments to Ind AS 7 and Ind AS 107, the Company provided new disclosures for liabilities under supplier finance arrangements in Note no. 17 and Note no. 18.

(c) International Tax Reform - Pillar Two Model Rules -Amendments to Ind AS 12

The Company is not within the scope of the OECD Pillar Two Model Rules, as Pillar Two legislation has not yet been enacted in any of the jurisdictions in which the Company operates.

(d) Lack of Exchangeability - Amendments to Ind AS 21

The amended Ind AS 21 have added requirements to help entities to determine whether a currency is exchangeable into another currency, and the spot exchange rate to use where it is not.

These amendments did not have any material impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods.

(iv) New standards or amendments not yet adopted Classification of Liabilities as Current or Non-current and Noncurrent Liabilities with Covenants - Amendments to Ind AS 1 -This amendment also includes specific provisions that will take effect for reporting periods beginning on or after April 01, 2026, as outlined below.

Under the existing Ind AS 1, where there is a breach of a material provision of a long-term loan arrangement on or before the end of the reporting period with the effect that the liability becomes payable on demand on the reporting date, the entity does not classify the liability as current, if the lender agreed, after the reporting period and before the approval of the financial statements for issue, not to demand payment as a consequence of the breach. However, the amended requirements stipulate that entities will no longer be permitted to consider lender waivers that are granted after the reporting date but before the financial statements are approved for the purpose of classification of loans. This amendment is required to be applied retrospectively in accordance with Ind AS 8.

The Company does not expect this amendment to have an impact on its operations or financial statements.

(v) Operating cycle

Based on the nature of products/activities of the Company and the normal time between acquisition of assets and their realization in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and noncurrent.

2 Material Accounting Policies

This note provides a list of the material accounting policies adopted in the preparation of these standalone financial statements. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Revenue recognition

The Company is engaged in designing, developing and manufacturing products for building high-speed communication networks that carry voice, data and video traffic from fixed line, mobile and broadband networks.

2.1.1 Sale of goods and components

Revenue from sale of goods and components are recognised when control over goods is transferred in accordance with the contractual terms of sale, being on dispatch/ delivery of products to customers and there are no unfulfilled performance obligations that could affect the customer's acceptance of the products. Revenue is recognised net of trade discounts, volume discounts and Goods and Services Tax (GST) in the Statement of profit and loss.

Certain contracts with customers provide for variable consideration based on the due date for delivery. The Company estimates the amount of variable consideration by using the most likely outcome method and the revenue recognised represents the amount of consideration to which the Company will be entitled in exchange for transferring the promised goods to the customer.

Refer Note no. 22 relating to revenue from contracts with customers.

Standard warranty is provided to customers upon sale of goods and components and the same is accounted in accordance with Ind AS 37, Provisions, Contingent Liabilities and Contingent Assets.

2.1.2 Rendering of service

Revenue from installation and commissioning services are recognised at a point in time when services are rendered. Revenue from annual maintenance contracts are recognized on an accrual basis pro-rata over the term of the contract. Revenue from other services such as repair and return, managed services, professional services and knowledge services are recognized as and when the services are rendered as per the agreed terms of contractual arrangements.

If the services rendered by the Company exceed the invoicing to customers, unbilled revenue is recognised, which is classified as "trade receivables" or "contract assets", depending on the contract terms. If the invoicing exceeds the services rendered, a contract liability is recognised (which is referred as deferred revenue).

Deferred contract costs are incremental costs of obtaining a contract which are recognized as contract assets and amortized over the term of the contract. However, such incremental costs are recognised as expense if the amortisation period of the asset that the entity would have otherwise recognised is one year or less.

The Company presents revenue net of Goods and Services Tax (GST) in its Statement of Profit and Loss.

2.2 Property, plant and equipment (including Capital work-in-progress)

2.2.1 Measurement

All items of property, plant and equipment are stated at historical cost less accumulated depreciation and impairment losses, if any.

2.2.2 Depreciation method, estimated useful lives and residual value

Depreciation is calculated using the straight-line method to allocate their cost, net of their residual values, over their estimated useful lives.

Leasehold improvements are depreciated over its useful life o the lease term whichever is lower.

Based on a technical evaluation, the management believe: that the useful lives of the above assets best represent the period over which the management expects to use these assets. Hence, the useful lives for these assets are differen from the useful lives as prescribed under Schedule II to the Companies Act, 2013.

2.3 Intangible Assets

2.3.1 Software

Software is carried at cost less accumulated amortization anc impairment losses, if any.

2.3.2 Product development and intangible assets unde development

Expenditure pertaining to research activities are charged to the Statement of profit and loss. Development costs of products are also charged to the Statement of profit and loss unless:

i) Product's technical and marketing feasibility has beer established;

ii) Management intends to complete the product and use o sell it;

iii) There is an ability to use or sell the product;

iv) The expenditure attributable to the product during it: development can be reliably measured;

v) There is likelihood of the product delivering sufficient future economic benefit; and

vi) The Company has the availability of adequate technica financial and other resources to complete and to use or sel the product, in which case such expenditure is initial!; recorded as intangible assets under development and i subsequently capitalized when the asset is ready for it intended use. The amount capitalized comprises expenditure that can be directly attributed or allocated on a reasonable and consistent basis to creating, producing and making the asset ready for its intended use. Property, plant and equipment utilized for research and development ar capitalized and depreciated in accordance with the polic stated for property, plant and equipment.

Capitalized product development costs are recorded a: intangible assets and amortised from the point at which th asset is ready for its intended use.

2.3.3 Amortization

The Company amortizes intangible assets with a useful life using the straight-line method over the estimated duration o lives as below:

2.3.4 Goodwill

Goodwill, on acquisitions of subsidiaries, is included in intangible assets. Goodwill is not amortised but it is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cashgenerating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose. The units or groups of units are identified at the lowest level at which goodwill is monitored for internal management purposes.

2.3.5 Technical know-how

Technical know-how acquired in a business combination are recognised at fair value at the acquisition date and other technical know-how are recognised at cost of acquisition. The cost of technical know-how acquired (other than in business combination) comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the taxation authorities), and any directly attributable expenditure on making the asset ready for its intended use.

Technical know-how are carried at cost less accumulated amortisation and impairment losses and have a useful life of three to thirteen years.

2.4 Investments and Other financial assets

2.4.1 Classification of financial assets at amortised cost

The Company classifies its financial assets at amortised cost only if both the following criteria are met:

(a) the asset is held within a business model whose objective is to collect the contractual cash flows, and

(b) the contractual terms give rise to cash flows that are solely payments of principal and interest.

Financial assets at amortised cost comprises of cash and cash equivalents, trade receivables, other bank balances and other financial assets (excluding forward exchange contracts).

2.4.2 Classification of financial assets at fair value through profit or loss (FVTPL)

The Company classifies investments in mutual funds and forward exchange contracts at FVTPL.

2.4.3 Classification of financial assets at fair value through other comprehensive income

Forward exchange contracts are only used for economic hedging purposes and not as speculative investments. Forward exchange contracts (cash flow hedges) that meet hedge accounting criteria are accounted at fair value through other comprehensive income. Where they do not meet hedge accounting criteria they are accounted at fair value through profit or loss.

2.4.4 Investment in subsidiaries

Investment in subsidiaries are carried at cost, less accumulated impairment if any.

2.5 Government grants

Grants from the government relating to product linked, design linked incentive scheme and export incentives are recognized where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions.

Government grants relating to income are grants other than those related to assets and are recognized in the profit or loss and presented within other operating revenue.

Government grants related to assets are presented in the Balance Sheet by deducting the grant in calculating the carrying amount of the asset.

2.6 Inventories

Cost of inventories are ascertained on weighted average basis.

2.7 Trade receivables

For trade receivables, the Company applies the simplified approach required under Ind AS 109, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

2.8 Leases

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

a) fixed payments

b) amount expected to be payable under residual value guarantees

c) the exercise price of a purchase option if it is reasonably certain that the Company will exercise that option.

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for lessees, the lessee's incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.

To determine the incremental borrowing rate, the Company:

a) where possible, uses recent third-party financing received as a starting point, adjusted to reflect changes in financing conditions since third party financing was received

b) uses a build-up approach that starts with a risk free interest rate adjusted for credit risk for leases held by the Company, which does not have recent third party financing, and

c) makes adjustments specific to the lease, e.g. term, country,currency and security.

Lease payments are allocated between principal and finance cost. The finance cost is charged in the Statement of profit and loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Right-of-use assets are measured at cost comprising the following:

a) the amount of the initial measurement of lease liability

b) any lease payments made at or before the commencement date,

c) any initial direct costs, and

d) restoration cost.

Right-of-use assets are generally depreciated over the lower of the asset's useful life and the lease term on a straight-line basis. If the Company is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset's useful life.

Payments associated with short term leases and all leases of low value assets are recognised on a straight-line basis as an expense in profit and loss. Short term leases are leases where the lease term is 12 months or less.

2.9 Derivative financial instruments and hedge accounting

The Company is exposed to foreign currency fluctuations on foreign currency assets, liabilities and forecasted cash flows denominated in foreign currency. The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain foreign currency liabilities and forecasted cash flows denominated in foreign currency. The Company designates these forward contracts as hedge instruments and accounts for them applying the recognition and measurement principles set out in Ind AS 109.

The use of foreign currency forward contracts is governed by the Company's risk management policy approved by the Board of Directors, which provides written principles on the use of such financial derivatives consistent with the Company's risk management strategy. The counter party to the Company's foreign currency forward contracts is generally a bank. The Company does not use derivative financial instruments for speculative purposes. Foreign currency forward contract derivative instruments are re-measured at every reporting dates as described below:

a) Cash flow hedges

Changes in the fair value of the derivative hedging instruments designated as a cash flow hedge are recognised in other comprehensive income and held in cash flow hedging reserve, a component of equity, to the extent that hedge is effective. Amounts previously recognised in other comprehensive income and accumulated in effective portion of cash flow hedges are reclassified to the statement of profit and loss in the same period in which gains/losses on the item hedged are recognised in the statement of profit and loss.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. Cumulative gain or loss on the hedging instrument recognised in other comprehensive income and held in cash flow hedging reserve is classified to statement of profit and loss when the forecasted transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in effective portion of cash flow hedges is transferred to the statement of profit and loss for the period.

If the cash flow hedge of a firm commitment or forecasted transaction results in the recognition of a non financial asset or liability, then, at the time the asset or liability is recognised, the associated gains or losses on the derivative that had previously been recognised in equity are included in the initial measurement of the asset or liability.

b) Others

Changes in fair value of foreign currency derivative instruments not designated as cash flow hedges are recognised in the statement of profit and loss.

2.10 Deferred tax

Deferred tax asset on Minimum Alternate Tax (MAT) credit is recognised only when it is probable that the company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the deferred tax asset relating to MAT credit is written down to the extent there is no longer a convincing evidence that the Company will pay normal income tax during the specified

period. Similarly, the deferred tax asset relating to MAT credit is adjusted upwards if the previously unrecognised MAT credit is considered recoverable due to higher anticipated future taxable profit.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the standalone financial statements. Deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit (tax loss). Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled. Deferred tax assets are recognized for all deductible temporary differences and for unused tax losses only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously within the same jurisdiction.

2.11 Refer Note no. 32.9 for other accounting policies.

3 Critical estimates and judgements

The preparation of financial statements requires the use of accounting estimates which, by definition, will likely differ from the actual results. Management also needs to exercise judgement in applying the Company's accounting policies.

This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to final outcome deviating from estimates and assumptions made. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the standalone financial statements.

The areas involving critical estimates and judgements are:

(i) Product Development costs (Capitalisation of product development costs (including Intangible assets under development)), estimate of useful lives of intangible assets and assessment of its carrying value - [Refer Note no. 2.3.2, Note no. 2.3.3 and Note no. 4(b)]

(ii) Assessment of impairment of Goodwill- Refer Note no. 4(b)

(iii) Provision for inventory obsolescence- Refer Note no. 24A

(iv) Recognition of deferred tax assets on tax losses and MAT credit - Refer Note no. 9(b) and Note no. 16

(v) Evaluation of tax litigations - Refer Note no. 32.1

(vi) Impairment of trade receivables - Refer Note no. 30A

(vii) Provision for warranty- Refer Note no. 15 and Note no. 27

Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.