3.11 Provisions and contingent liabilities

A provision is recognised if, as a result of a past event,
the Company has a present legal or constructive
obligation that can be estimated reliably, and it is
probable that an outflow of economic benefits will
be required to settle the obligation. Provisions are
determined by discounting the expected future
cash flows at a pre-tax rate that reflects current
market assessments of the time value of money
and the risks specific to the liability. The unwinding
of the discount is recognised as finance cost.

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

3.12 Leases

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

Company as a lessee

The Company applies a single recognition and
measurement approach for all leases, except
for short-term leases and leases of low value
assets. The Company recognises lease liabilities
to make lease payments and right-of-use assets
representing the right to use the underlying assets.

i Right-of-use Assets

The Company recognises right-of-use assets at the
commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use
assets are measured at cost, less any accumulated

depreciation and impairment losses, and adjusted
for any remeasurement of lease liabilities. The
cost of right-of-use assets includes the amount
of lease liabilities recognised, initial direct costs
incurred, and lease payments made at or before
the commencement date less any lease incentives
received. Right-of-use assets are depreciated on
a straight-line basis over the shorter of the lease
term and the estimated useful lives of the assets,
as follows:

Leasehold Land 90 to 99 years

Office Equipment 4 to 5 years

Buildings 9 years

If ownership of the leased asset transfers to the
Company at the end of the lease term or the
cost reflects the exercise of a purchase option,
depreciation is calculated using the estimated
useful life of the asset. The right-of-use assets
are also subject to impairment. Refer to the
accounting policies in Note 3.13 Impairment of
non-financial assets.

ii Lease Liabilities

At the commencement date of the lease, the
Company recognises lease liabilities measured at
the present value of lease payments to be made
over the lease term. The lease payments include
fixed payments (including in substance fixed
payments) less any lease incentives receivable,
variable lease payments that depend on an index
or a rate, and amounts expected to be paid under
residual value guarantees. The lease payments
also include the exercise price of a purchase option
reasonably certain to be exercised by the Company
and payments of penalties for terminating the
lease, if the lease term reflects the Company
exercising the option to terminate. Variable lease
payments that do not depend on an index or a
rate are recognised as expenses (unless they are
incurred to produce inventories) in the period in
which the event or condition that triggers the
payment occurs. In calculating the present value of
lease payments, the Compa ny uses its incremental
borrowing rate at the lease commencement date
because the interest rate implicit in the lease is not
readily determinable. After the commencement
date, the amount of lease liabilities is increased to
reflect the accretion of interest and reduced for
the lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a
modification, a change in the lease term, a change
in the lease payments (e.g., changes to future
payments resulting from a change in an index or
rate used to determine such lease payments) or a
change in the assessment of an option to purchase
the underlying asset.

Lease liability and ROU assets have been
separately presented in the Balance Sheet and
lease payments have been classified as financing
cash flows.

iii Short-term leases and leases of low-value
assets

The Company applies the short-term lease
recognition exemption to its short-term leases (i.e.,
those leases that have a non cancellable lease term
of 12 months or less from the commencement
date and do not contain a purchase option). It also
applies the lease of low-value assets recognition
exemption to leases of office equipment that are
considered to be low value. Lease payments on
short-term leases and leases of low-value assets
are recognised as expense on a straight-line basis
over the lease term.

3.13 Impairment of non-financial assets

The Company's non-financial assets, other than
inventories and deferred tax assets, are reviewed at
each reporting date to determine whether there is
any indication of impairment. If any such indication
exists, then the asset's recoverable amount is
estimated. An impairment loss is recognised if the
carrying amount of an asset exceeds its estimated
recoverable amount. Impairment losses are
recognised in the statement of profit and loss.

The recoverable amount is the higher of its value
in use and its fair value less costs to sell. Value in
use is based on the estimated future cash flows,
discounted to their present value using a pre¬
tax discount rate that reflects current market
assessments of the time value of money and the
risks specific to the asset.

In respect of the assets for which impairment
loss has been recognised in prior periods, the
Company reviews at each reporting date whether
there is any indication that the loss has decreased
or no longer exists. When there is indication that
an impairment loss recognised for an asset (other
than a revalued asset) in earlier accounting periods
which no longer exists or may have decreased,
impairment loss is reversed to the extent to the
extent the amount was previously charged to the
Statement of Profit and Loss. In case of revalued
assets, such reversal is not recognised.

3.14 Cash and cash equivalents

Cash and cash equivalents in the balance sheet
comprise cash at banks and on hand and short¬
term deposits with an original maturity of three
months or less, which are subject to an insignificant
risk of changes in value.

For the purpose of the statement of cash flows,
cash and cash equivalents consist of cash and
short-term deposits, as defined above.

3.15 Earnings per share (EPS)

Basic EPS is computed using the weighted
average number of equity shares outstanding
during the year.

Diluted EPS is computed using the weighted
average number of equity and dilutive equity
equivalent shares outstanding during the year
except where the results would be anti dilutive.

3.16 Dividend

The Company recognises a liability to pay
dividend to equity holders when the distribution is
authorised, and the distribution is no longer at the
discretion of the Company. As per the corporate
laws in India, a distribution is authorised when it
is approved by the shareholders. A corresponding
amount is recognised directly in equity.

The final dividend on shares is recorded as a liability
on the date of approval by the shareholders.

Interim dividend are recorded as a liability on the
date of declaration by the company’s Board.

The Company declares and pay dividends in
Indian Rupees. Companies are required to pay /
distribute dividend after deducting applicable
taxes. The remittance of dividends outside India is
governed by Indian law on foreign exchange and is
also subject to withholding tax at applicable taxes.
Further disclosure relating to dividend refer Note
No 20(c)-Dividends.

3.17 Current / non-current classification

An entity shall classify an asset as current when-

(a) it expects to realise the asset, or intends to sell
or consume it, in its normal operating cycle;

(b) it holds the asset primarily for the purpose
of trading;

(c) it expects to realise the asset within twelve
months after the reporting period; or

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

An entity shall classify a liability as current when-

(a) it expects to settle the liability in its normal
operating cycle;

(b) it holds the liability primarily for the purpose
of trading;

(c) the liability is due to be settled within twelve
months after the reporting period; or

(d) it does not have an unconditional right to
defer settlement of the liability for at least
twelve months after the reporting period.

Terms of a liability that could, at the option of the
counterparty, result in its settlement by the issue of
equity instruments do not affect its classification.

An entity shall classify all other assets and liabilities
as non-current.

Deferred tax Assets and Liabilities are classified as
non-current assets and liabilities

Operating cycle

An operating cycle is the time between the
acquisition of assets for processing and their
realisation in cash or cash equivalents.

Based on the nature of services and the time
between the acquisition of assets for processing
and their realization in cash and cash equivalents,
the Company has identified its operating cycle
as 12 months for the purpose of current - non¬
current classification of assets and liabilities.

3.18 Recent accounting developments:

The Company applied for the first-time certain
standards and amendments, which are effective
for annual periods beginning on or after 1 April
2025. The Company has not early adopted any
standard, interpretation or amendment that has
been issued but is not yet effective.

(i) Amendments to Ind AS 21 - Lack of

exchangeability

The Ministry of Corporate Affairs (MCA) notified
the Companies (Indian Accounting Standards)
Amendment Rules, 2025, which amend Ind AS
21, The Effects of Changes in Foreign Exchange
Rates to specify how an entity should assess
whether a currency is exchangeable and how it
should determine a spot exchange rate when
exchangeability is lacking. The amendments also
require disclosure of information that enables
users of its financial statements to understand
how the currency not being exchangeable into the
other currency affects, or is expected to affect, the
entity’s financial performance, financial position
and cash flows.

The amendments are effective for annual
reporting periods beginning on or after 1 April
2025. When applying the amendments, an entity
cannot restate comparative information.

The amendments do not have a material impact
on the Company’s financial statements.

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

In August 2025, the MCA notified amendments
to paragraphs 69 to 76 of Ind AS 1 to specify the
requirements for classifying liabilities as current or
non-current. The amendments clarify:

• What is meant by a right to defer settlement

• That a right to defer must exist at the end of
the reporting period

• That classification is unaffected by the
likelihood that an entity will exercise its
deferral right

• That only if an embedded derivative in
a convertible liability is itself an equity
instrument would the terms of a liability not
impact its classification

In addition, a requirement has been introduced
to require disclosure when a liability arising from
a loan agreement is classified as non-current and
the entity’s right to defer settlement is contingent
on compliance with future covenants within
twelve months.

If there is a breach of a material covenant of a
long term loan arrangement on or before the end
of the reporting period, resulting in the liability

becoming payable on demand as at the reporting
date, and the lender agrees—after the reporting
period but before the financial statements are
approved for issue—not to demand repayment
for at least 12 months as a consequence of the
breach, this shall be treated as an adjusting event.
Accordingly, the entity is not required to classify
the liability as current.

The amendments are effective for annual
reporting periods beginning on or after 1 April
2025 retrospectively in accordance with Ind AS 8.

The amendments has no impact on this standalone
financial statements.

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

In August 2025, the MCA notified amendments
to Ind AS 7 Statement of Cash Flows and Ind
AS 107 Financial Instruments: Disclosures to
clarify the characteristics of supplier finance
arrangements and require additional disclosure of
such arrangements. The disclosure requirements
in the amendments are intended to assist users of
financial statements in understanding the effects
of supplier finance arrangements on an entity’s
liabilities, cash flows and exposure to liquidity risk.

The amendments do not have a material impact
on the Company’s financial statements.

The loss allowance on trade receivables has been computed on the basis of Ind AS 109, Financial Instruments,
which requires such allowance to be made even for trade receivables considered good on the basis that credit
risk exists even though it may be very low.

No trade or other receivable are due from directors or other officers of the company either severally or jointly
with any other person. Nor any trade or other receivable are due from firms or private companies respectively in
which any director is a partner, a director or a member.

The Company's exposure to credit and currency risks, and loss allowances related to trade receivables are
disclosed in Note 47.

The carrying amounts of the trade receivables include receivables which are subject to a factoring arrangement.
Under this arrangement, the company has transferred the relevant receivables to the factor in exchange for cash.
However, the company has retained credit risk. The company therefore continues to recognise the transferred
assets in their entirety in its balance sheet. The amount subject to factoring agreement is presented as borrowing.

The relevant carrying amounts are as follows:

b. Terms/rights attached to equity shares

The Company has only single class of equity shares having a par value of I 2 (31 March 2025, I 2) per share.
Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in
Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders
in the ensuing Annual General Meeting.

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

B Nature and purpose of reserves

i. Capital reserve

Capital reserve is created on merger/amalgamation.

ii. Capital redemption reserve

Capital redemption reserve represents redemption of redeemable cumulative preference shares in earlier
years. The same can be used to issue fully paid bonus shares.

iii. Securities premium

Securities premium is used to record the premium on issue of shares. The reserve can be utilised only for
limited purposes such as issuance of bonus shares in accordance with provisions of Companies Act, 2013.

iv. State subsidy

State subsidy is created on receipt of government grants for setting up the factories in backward areas. The
same will be utilised for expansion of business.

v. Contingency reserve

Contingency reserve is created by transferring funds from retained earnings to meet future contingencies.

vi. General reserve

Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net
income at a specified percentage in accordance with applicable regulations. The purpose of these transfers
was to ensure that if a dividend distribution in a given year is more than 10% of the paid-up capital of the
Company for that year, then the total dividend distribution is less than the total distributable results for that
year. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified
percentage of the net profit to general reserve has been withdrawn. However, the amount previously
transferred to the general reserve can be utilised only in accordance with the specific requirements of
Companies Act, 2013.

vii. Equity instruments through other comprehensive income

The Company has elected to recognise changes in the fair value of certain investments in equity securities
in other comprehensive income. These changes are accumulated within the Equity instruments through
Other Comprehensive Income. The Company transfers amounts from this reserve to retained earnings when
the relevant equity securities are derecognised.

viii. Retained Earnings

Retained earnings are the profits/(loss) that the Company has earned/incurred till date, less any transfers
to general reserve, dividends or other distributions paid to shareholders. Retained earnings include re¬
measurement loss / (gain) on defined benefit plans, net of taxes that will not be reclassified to Statement of
Profit and Loss.

C Dividends

The following dividends were declared and paid by the Company during the years ended: (Currency : Indian
Rupees in million)

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off income
tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income
taxes levied by the same tax authority.

Significant management judgement is required in determining provision for income tax, deferred income tax
assets and liabilities and recoverability of deferred income tax assets. The recoverability of deferred income
tax assets is based on estimates of taxable income and the period over which deferred income tax assets
will be recovered.

44 Earnings per share (EPS)

Basic EPS is calculated by dividing the profit attributable to equity shareholders of the Company by the
weighted average number of equity shares outstanding during the year.

Diluted EPS is calculated by dividing the profit attributable to equity shareholders of the Company by the
weighted average number of equity shares outstanding during the year, after considering adjustment for
the effects of all dilutive potential equity shares.

45 Employee benefits

(i) Defined Contribution Plans

The Company makes contributions towards provident fund, superannuation fund and other retirement
benefits to a defined contribution retirement benefit plan for qualifying employees. Under the plan, the
Company is required to contribute a specified percentage of payroll cost to the retirement benefit plan to
fund the benefits.

(ii) Defined Benefit Plans

(1) Gratuity:

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible
employees. The plan provides a lump sum payment to vested employees at retirement, death while in
employment or on termination of employment of an amount equivalent to 15 days salary payable for each
completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five
years of service. The Company has obtained insurance policies with the Life Insurance Corporation of India
(LIC) for eligible employees at Panoli plant and makes an annual contribution to LIC for amounts notified
by LIC. The Company accounts for gratuity benefits payable in future based on an independent external
actuarial valuation carried out at the end of the year using the projected unit credit method. Actuarial gains
and losses are recognised as Other Comprehensive Income or Loss.

Based on the actuarial valuation obtained in this respect, the following table sets out the status of the
gratuity plan and the amounts recognised in the Company’s standalone financial statements as at balance
sheet date:

(2) Pension Plan

The Company operates a pension scheme aimed at rewarding long-term service and providing post¬
retirement financial stability to eligible employees. The scheme is applicable to permanent employees who
meet specified eligibility criteria and retire from service. Eligibility for pension benefits requires a minimum of
7 years of continuous service in specified senior roles (Management Committee cadre or Company Secretary)
at the time of retirement. Benefits are available upon retirement through superannuation or approved
voluntary retirement schemes and are calculated based on the last drawn basic salary. The amount and
payout of pension benefits are determined based on the tenure of service.

Based on the actuarial valuation obtained in this respect, the following table sets out the status of the
pension plan and the amounts recognised in the Company’s standalone financial statements as at balance
sheet date:

A. Reconciliation of the net defined benefit (asset)/ liability

The following table shows a reconciliation from the opening balances to the closing balances for the
net defined benefit (asset) liability and its components

a. Compensated absences:

The obligation for leave encashment is recognised in the same manner as gratuity. The Company's
liability on account of compensated absences is not funded and hence the disclosures relating to
the planned assets are not applicable. Amount of H 83 million (31 March 2025: H 53 million) towards
compensated absences is recognised as an expense and included in "Employee benefits expense” in
the Statement of profit and loss during the year.

b. Medical benefit plan:

The Company operates a medical benefit plan for employees who are eligible for pension. In the event
of employee's death, the dependent / legal heir only the surviving wife/husband would be eligible to
receive medical insurance. The benefit would continue until pension period eligible criteria are met. The
benefit will be available based on the service period rendered by the employee. Based on an actuarial
valuation, an amount of H 2 million (31 March 2025: H Nil) towards medical benefits is recognised as an
expense and included in "Employee benefits expense" in the Statement of profit and loss during the year.

c. Long Term Incentive Plan (LTIP)

The Long-Term Incentive Plan is annually granted along with the performance cycle at the end of the
financial year and determined on the individual performance rating criteria. The benefit will be available
based on the service period rendered by the employee. Based on an actuarial valuation, an amount of
H 5 million (31 March 2025: H 32 million ) towards long term incentives is recognised as an expense and
included in "Employee benefits expense" in the Statement of profit and loss during the year.

d. Hikal’s Emerging Stars Scheme (HESS)

The Company has introduced the Hikal Emerging Stars Scheme (HESS), a tenure-based retention and
performance incentive program for eligible employees in specified grades and locations. Based on an
actuarial valuation, an amount of H 6 million (31 March 2025: H Nil) towards Hikal Emerging Stars Scheme
benefit is recognised as an expense and included in "Employee benefits expense" in the Statement of
profit and loss during the year.

46 Leases:

The Company has a lease contract for building used in its operations. The Lease term is 9 years. The company
has leasehold land for a period of up to 99 years The Company has also taken office equipments on lease for
period ranging from 4 to 5 years. The Company's obligations under its lease is secured by the lessor's title
to the leased asset.

The Company also has certain leases of machinery/premises with lease terms of 12 months or less and leases
of office equipment with low value. The Company applies the ‘short-term lease' and ‘lease of low-value assets'
recognition exemptions for these leases.

B. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

• Credit risk ;

• Liquidity risk ; and

• Market risk

i. Risk management framework

The Company's Board of Directors has overall responsibility for the establishment and oversight of the
Company's risk management framework.

The Company's risk management policies are established to identify and analyse the risks faced by the
Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk
management policies and systems are reviewed regularly to reflect changes in market conditions and the
Company's activities. The Company, through its training and management standards and procedures, aims
to maintain a disciplined and constructive control environment in which all employees understand their
roles and obligations.

The audit committee oversees how management monitors compliance with the company's risk management
policies and procedures, and reviews the adequacy of the risk management framework in relation to the
risks faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal
audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results
of which are reported to the audit committee.

ii. 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, and arises principally from the Company's receivables from customers.

The carrying amount of following financial assets represents the maximum credit exposure:

Trade and other receivables

The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer.
However, management also considers the factors that may influence the credit risk of its customer base,
including the default risk of the industry and country in which customers operate.

The Company establishes an allowance for impairment that represents its estimate of expected losses in
respect of trade and other receivables.

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with
its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach
to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities
when they are due, under both normal and stressed conditions, without incurring unacceptable losses or
risking damage to the Company’s reputation.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The
amounts are gross and undiscounted.

The Company is exposed to currency risk on account of its operating and financing activities. The functional
currency of the Company is Indian Rupee.

Exposure to currency risk

The major currency profile of financial assets and financial liabilities as at 31 March 2026 and 31 March 2025
are as below:

Sensitivity analysis

A reasonably possible strengthening (weakening) of the Indian Rupee against USD, Euros, Swiz Franc,
Japanese Yen and Singapore Dollar at 31 March would have affected the measurement of financial
instruments denominated in these currencies and affected equity and profit or loss by the amounts shown
below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores
any impact of forecast sales and purchases.

The gross outflows disclosed in the above table represent the contractual undiscounted cash flows relating
to financial liabilities held for risk management purposes and which are not usually closed out before
contractual maturity.

iv Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity
prices - will affect the Company’s income or the value of its holdings of financial instruments. Market risk
is attributable to all market risk sensitive financial instruments including foreign currency receivables and
payables and long term debt. We are exposed to market risk primarily related to foreign exchange rate risk,
interest rate risk and the market value of our investments. Thus, our exposure to market risk is a function
of investing and borrowing activities and revenue generating and operating activities in foreign currency.
The objective of market risk management is to avoid excessive exposure in our foreign currency revenues
and costs.

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest
rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in
the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing
investments will fluctuate because of fluctuations in the interest rates.

Exposure to interest rate risk

Company's interest rate risk arises from borrowings. Borrowings issued at fixed and variable rates exposes to
fair value interest rate risk. The interest rate profile of the Company’s interest-bearing financial instruments
as reported to the management of the Company is as follows:

Fair value sensitivity analysis for fixed-rate instruments

The Company does not account for any fixed-rate financial assets or financial liabilities at fair value through
statement of profit and loss. Therefore, a change in interest rates at the reporting date would not affect profit
or loss.

48 Capital Management

As at 31 March 2026, the Company has only one class of equity shares. In order to maintain or achieve an
optimal capital structure, the Company allocates its capital for distribution as dividend or re-investment into
business based on its long term financial plans.

For the purpose of the Company's capital management, capital includes issued capital and other equity
reserves. The primary objective of the Company’s capital management is to safeguard its ability to continue
as going concern and to maintain and optimal capital structure so as to maximise shareholders value.
The Company manages its capital structure and makes adjustments in the light of changes in economic
environment and the requirements of the financial covenants.

The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt
and adjusted net debt to equity ratio. For this purpose, adjusted net debt is defined as total debt less cash
and bank balances.

(ii) There are no material developments during the year in the matter relating to the alleged improper disposal
of by-products and alleged non-compliance with certain environmental laws and regulations by the
Company in January 2022, for which statutory authorities have conducted investigations. The matter is
currently pending before the Hon’ble Supreme Court of India (‘SC’) which stayed the order passed by the
National Green Tribunal (NGT), Principal Bench, New Delhi which had accepted the joint committee’s reports,
including recovery of compensation of H 175 million from the Company for aforesaid non-compliance. The
SC has also stayed Gujarat Pollution Control Board’s direction to the Company for payment thereof, upon
the Company having deposited H 50 million (of which provision of H 10 million is created in an earlier year)
with the SC.

Based on the advice of external legal counsel, the Company believes it has a good case on merits in these
matters, and the Company is taking necessary steps, including legal measures, to defend itself. Accordingly,
no further provision is required in the standalone financial statements in this respect.

(iii) On 12 July 2023, Karnataka Pollution Control Board (KPCB) served a demand notice for H 83 millions as
Environmental Compensation however notice does not give details of instance of grounds / non-compliances.
Aggrieved by this, Company has approached Hon’ble Karnataka High Court. Based on the advice of external
legal counsel, the Company believes it has a good case on merits in this matter and accordingly, no provision
is required in the financial statement in this regard.

(iv) The Company is subject to legal proceedings, claims and GST audit, which have arisen in the ordinary course
of business. The Company has reviewed all its pending litigations and other matters and has adequately
provided for where provisions are required and disclosed as contingent liability, where applicable in its
financial statements. The Company’s management does not reasonably expect that these legal actions,
when ultimately concluded and determined, will have a material and adverse effect of the Company’s results
of operations or financial condition.

51 Dues relating to Investor Education and Protection fund

During the year the Company has transferred H 0 million (31 March 2025 : H 0 million) to Investor Education
and Protection fund. There are no other dues which need to be credited as at the year end to the Investor
Education and Protection fund.

52 Corporate social responsibility

As per Section 135 of the Act, a CSR committee has been formed by the Company. The funds are utilised
during the year on the activities which are specified in Schedule VII of the Act. The utilisation is done by way
of direct and indirect contribution towards various activities.

Gross amount required to be spent by the Company during the year: H 22 million (31 March 2025: H28 million)
The areas of CSR activities and contributions made thereto are as follows:

56 Capitalisation of expenditure

During the year, the Company has capitalised the following expenses of revenue nature to the cost of
property, plant and equipment (tangible fixed assets)/capital work-in-progress (CWIP). Consequently,
expenses disclosed under the respective notes are net of amounts capitalised by the Company.

57 Segment information

For management purposes, the Company is organised into business units based on its products and services
and has two reportable segments, as follows:

Pharmaceuticals: Segment produces in Active Pharmaceutical Ingredients
Crop protection: Segment manufactures in pesticides, herbicides.

The Chief Operating Decision Maker (“CODM”) evaluates the Company’s performance and allocates resources
based on an analysis of various performance indicators by operating segments. The CODM reviews revenue
and profit as the performance indicator for all of the operating segments and review the total assets and
liabilities of an operating segment.

60 There are numerous interpretative issues relating to the Supreme Court (SC) judgment dated 28^th February,
2019 on Provident Fund (PF) on the inclusion of allowances for the purpose of PF contribution as well as
its applicability of effective date. The impact is not expected to be material as per the assessment made by
the company.

61 On 21 November, 2025, the Government of India notified the four Labour Codes - the Code on Wages,
2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety,
Health and Working Conditions Code, 2020 - consolidating 29 existing labour laws. The Ministry of Labour
& Employment published FAQs to enable assessment of the financial impact due to changes in regulations.
The Company has assessed and disclosed incremental impact of these changes on the basis of the best
information available. Considering the materiality and non-recurring nature of this impact, the Company has
presented such incremental impact as Exceptional Items for the year ended 31 March, 2026. The incremental
impact comprises gratuity of H 115 millions and long-term compensated absences of H 87 millions due to
change in definition of wages as per the Codes, and H 178 million arising from change in the Company's
policy to remove the ceiling hitherto applicable on payment of gratuity to employees.

62 The Company does not have any Benami property, where any proceedings have been initiated or pending
against the company for holding any Benami property.

63 The Company does not have any transactions with Companies struck off.

64 The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.

65 The Company decided to repurpose one of its existing manufacturing plants to enable the manufacturing
of a different range of products. In this process, certain assets / equipment was identified that is no longer
usable in repurposed plant and accordingly an impairment charge of H 471 millions is recorded.

66 The Company has not advanced or loaned or invested funds to any other person / entities, including foreign
entities (intermediaries) with the understanding 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 Funding party (ultimate beneficiaries) or

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

67 The Company has not received funds to any other person / entities, including foreign entities (Funding party)
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 to or on behalf of the ultimate beneficiaries.

68 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).

69 The Company has used accounting softwares for maintaining its books of account which has a feature
of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant
transactions recorded in the software, except that audit trail feature is not enabled for certain changes made
using privileged/ administrative access rights to the underlying database of a software. Further no instance
of audit trail feature being tampered with was noted in respect of accounting softwares where the audit trail
has been enabled.

Additionally, the audit trail of prior years has been preserved by the Company as per the statutory requirements
for record retention to the extent it was enabled and recorded in the respective years

70 The revised quarterly returns or statements of Current assets filed by the Company with the banks or financial
institutions are in agreement with the books of accounts.

71 Consequent to the USFDA issuing a warning letter in August 2025 relating to the Company's Jigani facility,
sales for the Pharma Segment were impacted for the year.

72 During the year ended 31 March 2026, consequent to irregularities which were noted in the timing of
revenue recognition as of 30 September 2025, which were corrected, the Company appointed an external
expert for a fact-finding review which revealed that irregularities were limited to preponement of underlying
genuine sales during the year through alteration of documents by certain employees. The Company has
implemented corrective actions which includes strengthening of controls over reporting of revenue at
period-ends from the quarter ended 31 December 2025. Accordingly, there is no impact of this matter on
the standalone financial statements for the year ended 31 March 2026 and previous financial years.

73 The Company has not traded or invested in crypto currency or virtual currency during the financial year.