a. The company has not made loans or advances in the nature of loans to promoters, directors, KMPs and the related parties either severally or jointly with any other person that are repayable on demand or without specifying any terms or period of repayment.

b. Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person or entity, including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

c. Loan given to employees are as per terms of employment.

(a) Margin money deposits

Margin money deposits with a carrying amount of ' 3.64 Crores (As at March 31,2025 : ' 3.65 Crores) are subject to a first charge as security deposit with customers.

(b) Foreign exchange forward contracts

The Company enters into foreign exchange forward contracts with the intention of reducing the foreign exchange risk of buyers credit and trade payables. These contracts are not designated in hedge relationships and are measured at fair value through profit or loss.

(C) Other financial assets

Grant receivable includes grant receivable from Mr. Ashok M Advani (promoter) to boost research and development activities of the Company.

(i) Trade receivables are on non interest bearing credit terms and the credit period of the products are determined by the type of the products. In case of long term construction contracts, payment is generally due upon completion of milestone as per terms of contract. In certain contracts, short term advances are received as per payment terms in the contract, before the performance obligation is satisfied.

(ii) The Company applies the expected credit loss (ECL) model for measurement and recognition of impairment losses on trade receivables and contract assets. The Company follows the simplified approach for recognition of impairment allowance on trade receivables and contract assets. The application of the simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment allowance based on lifetime ECLs at each reporting date. ECL impairment loss allowance recognised during the period is recognised in the Statement of Profit and Loss. This amount is reflected under the head 'other expenses' in the Statement of Profit and Loss.

Terms/Rights attached to Equity Shares

The Company has one class of equity shares having par value of ' 2 per share. Each share holder is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend, if any.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in the proportion of number of equity shares held by the shareholders.

Terms/Rights attached to 7.8 % cumulative convertible preference shares and cumulative compulsorily convertible preference shares

Each convertible preference share is convertible at the option of the shareholders into Equity shares.

The preference shares shall rank for the dividend in priority to the equity shares of the Company in the event of increase in share capital or winding up of the Company up to amount of dividend or any arrears of dividend. Preference share holders will not have any further right to participate in the profits or assets of the Company.

Note : The Company has implemented the Blue Star Employees Stock Option Scheme 2024 ("ESOP 2024") to incentivize employees, under which up to 5,00,000 stock options may be granted, each convertible into one equity share of face value '2, subject to vesting and exercise conditions. The scheme is administered through the Blue Star ESOP Trust (the "Trust") to facilitate acquisition and transfer of shares to employees. Blue Star Sahayata Foundation (BSSF), a Trust settled by the Promoters of the Company, has authorised its Trustees to transfer from time to time, equity shares of the Company held by BSSF to ESOP Trust. For accounting purposes, the Trust is consolidated and shares held by it are treated as treasury shares and presented as a deduction from equity until transferred to employees upon exercise.

Aggregate number of equity shares as bonus, shares issued for consideration other than cash

Pursuant to approval given by the shareholders vide postal ballot on June 08, 2023, the Company has issued 9,63,13,888 fully paid up bonus equity shares of ' 2/- each in the ratio of 1 (One) equity share of ' 2/- each for every 1 (One) existing equity share of ' 2/- each during the previous year ended March 31,2024.

I Securities premium reserve - Where the Company issues shares at a premium, a sum equal to the aggregate amount of the premium received on those shares shall be transferred to "Securities Premium Reserve". The Company may use this reserve for the purpose allowed under Section 52 of the Companies Act, 2013.

II Capital redemption reserve - Capital redemption reserve was created in an earlier year for buy-back of shares.

III Capital subsidy received from government - Subsidy was received towards setting up of a factory in the state of Himachal Pradesh during the years ended March 31,2009 and March 31,2013.

IV General reserve - General reserve is created out of the profits earned by the Company by way of transfer from surplus in the Statement of Profit and Loss.The Company can use this reserve for payment of dividend and issue of bonus shares.

V Share based payment reserve- The Company has an employee share option scheme under which options to subscribe for the Company's shares have been granted to the key employees and directors. The share-based payment reserve is used to recognize the value of equity-settled share-based payments provided to the key employees and directors as part of their remuneration. Refer to Note 51 for further details of the scheme.

VI Retained earnings - The amount that can be distributed by the Company as dividends to its equity shareholders is determined based on the balance in this reserve and also considering the requirements of the Companies Act, 2013. Thus the amounts reported above are not distributable in entirely.

c. Outstanding loans carry an interest rate ranging from 6.40% - 7.55% p.a. (March 31,2025 : 7.44% - 7.46% p.a.).

d. The Company has been sanctioned working capital limits in excess of ' 5 crores from banks on the basis of security of current assets. The quarterly returns or statements comprising (stock, creditors, book debt statements, statements on ageing analysis of the debtors and other stipulated financial information) filed by the Company with such banks are in agreement with the unaudited books of account of the Company of the respective quarters and no material differences exist. The Company has not been sanctioned any working capital facility from financial institutions.

e. Outstanding Commercial papers carry interest rate ranging from 7.18% - 7.35% p.a. (March 31,2025 : 7.45 % p.a.) for the current year. This is repayable within range of 90 days from the date of drawdown.

f. Oustanding Inter Corporate Deposits obtained from Related parties for meeting business requirements with interest ranging 6.41%-7.19% p.a (March 31,2025 : 7.22%-7.33% p.a.) linked to 3 Months T bill (0.95%-1.80%) with frequency of interest being paid on last day of the quarter. Repayment upon expiry of the tenor or at such time as may be decided by both the parties.

g. The company has utilised the funds borrowed from banks for the purpose it was taken.

h. There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

i. The Company have not been declared as wilful defaulter by any bank, financial institutions or other lender.

j. The Company has not received any fund from any person or entity, including foreign entities with the understanding (whether recorded in writing or otherwise) that the company shall

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

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

SUPPLIER FINANCE ARRANGEMENTS

1 Nature of supplier finance arrangements

The Company has arrangements with certain banks and Trade Receivables Discounting System (TReDS) platform to facilitate early payment of invoices to eligible suppliers through bill discounting or similar mechanisms ("supplier finance arrangements").

Under these arrangements, participating banks and TReDS platform make payments to suppliers for invoices accepted by the Company. The Company settles the corresponding amount with the banks and TReDS platform in accordance with the original contractual payment terms agreed with the supplier. The Company does not provide any collateral, security or financial guarantees in respect of these arrangements, other than confirmation of the underlying trade payable. Participation by suppliers is voluntary.

These arrangements do not result in any change to the underlying commercial terms, including pricing or credit period, agreed between the Company and its suppliers.

2 Key terms

The credit period under such arrangements is the same as the original credit period agreed with the vendor.

The Company does not incur any interest cost, discount charges or other fees under these arrangements. Any financing cost is borne by the participating suppliers.

The Government of India notified the provisions of the four new Labour Codes ("Labour Codes") on 21 November 2025, thereby consolidating twenty-nine existing labour laws into a comprehensive and unified framework. Among other changes, the Labour Codes provide a unified definition of "wages" to be applied across various employee benefit computations. Based on a reassessment by management of the revised compensation structure and the consequent changes in actuarial assumptions, the said liability has now been determined at '35.91 crores. The Company continues to monitor the finalisation of the Central and State rules and clarifications issued by the Government under the new Labour Codes and will recognise the impact of any further changes in estimates in the relevant period, as and when required.

Exceptional items also include a one-time, non-recurring expense of '1.28 crores for the year ended March 31,2026.

37. EMPLOYEE BENEFITS DISCLOSURE Defined Benefit Plans

a. Gratuity

The Company provides for gratuity, a defined benefit retirement plan ('the Gratuity Plan') covering eligible employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment with the Company. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation, performed by an independent actuary, at each Balance Sheet date using the projected unit credit method. The Company contributes all ascertained liabilities to the Gratuity Fund Trust (the Trust).

The Company recognizes the net obligation of a defined benefit plan in its Balance Sheet as an asset or liability. Gains and losses through remeasurements of the net defined benefit liability/(asset) are recognized in other comprehensive income and are not reclassified to profit or loss in subsequent periods. The actual return of the portfolio of plan assets, in excess of the yields computed by applying the discount rate used to measure the defined benefit obligation is recognized in other comprehensive income. The effect of any plan amendments are recognised as net profit in the profit or loss. The Company expects to contribute ' 31.09 crore to gratuity fund in FY 2026-27 (FY 2025-26: ' 6.28 crore).

Risk analysis

Interest rate risk: The plan exposes the Company to the risk of all interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in financial statements).

Liquidity risk: This is the risk that the Company is not able to meet the short-term gratuity payouts.This may arise due to non availabilty of enough cash / cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time.

Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan's liabilty.

Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.

Regulatory Risk: Gratuity benefits paid in accordance with the requirements of Chapter V (Gratuity of the Code on Social Security,2020 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts (e.g.Increase in the maximum limit on gratuity of ' 20,00,000).

Asset Liability Mismatching or Market Risk: The duration of the liabilty is longer compared to duration of assets, exposing the Company to market risk for volatilities / fall in interest rate.

Investment Risk : The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

General Description of significant defined plans:

a. Gratuity Plan

Gratuity is payable to all eligible employees on separation/retirement based on Company's internal policies and applicable law.

b. Additional Gratuity

Additional Gratuity is payable as per the specific rules of the Group i.e. ' 5,000 for staff and ' 10,000 for managers subject to qualifying service of 15 years.

b. Provident Fund

Eligible employees of the Company receive benefits from provident fund, which is a defined benefit plan. Both the eligible employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee's salary. The Company contributes a portion to the Provident Fund Trust. The trust invests in specific designated instruments as permitted by Indian law. The rate at which the annual interest is payable to the beneficiaries by the trust is being administered by the Government. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rate.

The actuary has provided a valuation and according thereto, the Company has recognised a net defined benefit liability arising from the interest rate guarantee obligation under the Exempt Provident Fund as on March 31,2026.The Company's contribution to the Employee's Provident fund aggregates to ' 14.94 crores (March 31,2025 : ' 12.92 crores).

d. The Company has an obligation to complete the Extended Producer Responsibility (EPR) targets, only if it is a participant in the market during the financial year in accordance with the E-Waste (Management) Rules, 2016, as amended. The Company has fulfilled its obligation for the current financial year. The Company will have an e-waste obligation for future years, only if it participates in the market in those years..

e. Uncertain tax position

The uncertain tax position as on March 31,2026 is ' 16.49 crores (March 31,2025 : ' 8.06 crores).

39. DISCLOSURE FOR RELATED PARTY

The related parties as per the terms of Ind AS-24,"Related Party Disclosures", [under the section 133 of the Companies Act 2013 (the Act) read with Companies (Indian Accounting Standards) Rules 2015 (as amended from time to time)], as disclosed below:-

There have been no transfers between Level 1, Level 2 and Level 3 during the period.

Fair value hierarchy of financial assets and liabilities measured at fair value :

Valuation technique and key inputs used to determine fair value:

1. Level - 1:

Quoted market price in the active market for identical assets or liabilities.

2. Level - 2:

Mutual Fund - Quoted price in the active market

Derivative Instrument - Mark to market on forward covers is based on forward exchange rates at the end of reporting period.

3. Level - 3:

Investment Property - Based on valuation report of independent valuer.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties. The following methods and assumptions were used to estimate the fair values:

- The fair value of quoted equity investment and mutual funds are based on price quotations at the reporting date.

- The Company enters into derivative financial instruments with various counterparties, principally with banks.

Foreign exchange forward contracts are valued using valuation techniques, which employs the use of market observable inputs. The model incorporates various inputs including the credit quality of counter parties,foreign exchange spot and forward rates.

43. FINANCIAL RISK MANAGEMENT OBJECTIVES & POLICIES

The Company's principal financial liabilities comprise short-term borrowings, lease liabilities and trade and other payables. These financial liabilities are primarily incurred to finance the Company's operating activities and to manage exposure to financial risks.

The Company's principal financial assets include trade and other receivables, cash and cash equivalents, investments, loans and advances, and derivative financial instruments. These financial assets principally arise from the Company's operating activities and treasury management functions.

The Company has exposure to various financial risks arising from its business operations and financial instruments. These risks include market risk, comprising foreign currency risk, interest rate risk, and commodity price risk, as well as credit risk and liquidity risk. The Company manages these risks through an established risk management framework in accordance with its financial risk management policies.

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises foreign currency risk, interest rate risk, and other price risk, including commodity price risk. Financial instruments that are exposed to market risk include borrowings, investments, trade receivables, trade payables, loans, and derivative financial instruments.

Currency risk

Foreign currency risk is the risk that the fair value or future cash flows of exposure will fluctuate because of changes in foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates relates primarily to the Company's operating activities (when revenue or expense is denominated in a foreign currency). Foreign currency risks are managed within the approved policy parameters utilizing foreign exchange forward contracts.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Interest rate change does not affect significantly to the company. Company does not have any exposure to the future cash flows resulting from change in interest rate as the Company's net obligations and assets carries fixed interest rate.

Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities, primarily trade receivables and from its financing activities, including deposits with banks, foreign exchange transactions, and other financial instruments.

. Trade receivables

Customer credit risk is managed by each business unit subject to the Company's established policy, procedures, and controls relating to customer credit risk management. Trade receivables are non-interest bearing and are generally on credit terms in line with respective industry norms. Outstanding customer receivables are regularly monitored. The Company has no concentration of credit risk as the customer base is widely distributed both economically and geographically.

2. Financial instruments and cash deposits

Credit risk from balances with banks is managed by Company's treasury in accordance with the Board approved policy. Investments of surplus funds, temporarily, are made only with approved counterparties, mainly mutual funds, who meet the minimum threshold requirements under the counterparty risk assessment process. The Company's maximum exposure for financial guarantees is given in Note 39.

Liquidity Risk

Liquidity risk is the risk that the Company may encounter difficulty in meeting its obligations. The Company monitors the rolling forecast of its liquidity position based on expected cash flows. The Company's approach is to ensure that it has sufficient liquidity or borrowing headroom to meet its obligations at all points in time. The Company has sufficient short-term fund-based lines, which provide healthy liquidity and these carry the highest credit quality rating from a reputed credit rating agency.

50. ADDITIONAL REGULATORY INFORMATION REQUIRED BY SCHEDULE III

i. The Company neither holds any benami property nor any proceedings have been initiated or pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

ii. The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017.

iii. The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

iv. The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

v. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

51. EMPLOYEE SHARE BASED PAYMENT PLANS Employees Stock Option Scheme - 2024

This Scheme shall be called the "BLUE STAR EMPLOYEES STOCK OPTION SCHEME - 2024" hereinafter referred as "the Scheme". The Scheme was recommended by the Nomination and Remuneration Committee on August 1, 2024 and approved by the Board of Directors on August 6, 2024 and by the Shareholders of the Company by way of special resolution on September 25, 2024. The Scheme shall be effective from the date of approval of the Scheme by the shareholders of the Company (i.e.) September 25, 2024 ("Effective Date"). The Scheme is in accordance with the regulations prescribed by SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and any other regulation as applicable to the Company and shall not contravene any law, for the time being in force that is material for giving effect to such Scheme. The Scheme shall continue in effect unless terminated by the Board of Directors or Nomination and Remuneration Committee or until all the Options granted under the Scheme are vested and exercised whichever is earlier. Any such termination of the Scheme shall not affect Options already granted and such Options shall remain in full force and effect, subject to clause 14.3 and 14.5, as if the Scheme had not been terminated unless mutually agreed otherwise between the Grantee / Nominee / Legal Heirs and the Company.

The total number of Options that may be granted pursuant to this Scheme shall not exceed 5,00,000 (Five Lakhs only) convertible into equity shares at face value of '2/- each (or such other adjusted figure consequent to Corporate Action).

The Exercise Price of the Options granted shall be the face value of the Share, i.e., '2/- (or as adjusted by the corporate action(s)). No amount shall be payable at the time of Grant of Options.

The maximum number of Stock Options to be granted to any Eligible Employee under the Scheme shall not exceed 1,00,000.

The Grant of 1 (One) Option to an Eligible Employee under this Scheme shall entitle such Eligible Employee to apply for 1 (One) Share in the Company upon payment of Exercise Price and applicable taxes and subject to terms and conditions provided in the Scheme and in the Grant Letter.

Vesting Period for Options shall commence after minimum 1 (One) year from the Grant Date and it may extend upto maximum of 5 (Five) years from the Grant Date or such lesser period as may be decided by the NRC at its sole discretion from time to time.

The Exercise Period shall be 7 (seven) years from the Grant Date or such lesser period as may be decided by the NRC. The Exercise Period will be specified in the Grant Letter issued to the Eligible Employees. Failure to exercise the Options within the specified time period, shall result in lapsing of Vested Options in the hands of Grantee.

During the year, the Company has recognized an expense of ' 6.90 crores (March 31,2025 - ' 3.36 crores) which is net of recoveries from subsidiaries of ' 0.58 crores.

52. AUTHORISATION FOR THE ISSUE OF THE STANDALONE FINANCIAL STATEMENTS

The Standalone Financial Statements are approved for issue by the Audit Committee and the Board of Directors at their respective meetings conducted on May 5, 2026 and May 6, 2026.