(5) Provisions and contingent liabilities and contingent
assets

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. If the effect of the time
value of money is material, 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. When discounting is used, the increase in the
provision due to the passage of time is recognised as
a finance cost.

The amount recognised as a provision is the best
estimate of the consideration required to settle the
present obligation at reporting date, taking into account
the risks and uncertainties surrounding the obligation.

When some or all of the economic benefits required
to settle a provision are expected to be recovered
from a third party, the receivable is recognised as an
asset if it is virtually certain that reimbursement will
be received and the amount of the receivable can be

measured reliably. The expense relating to a provision
is presented in the standalone statement of profit and
loss net of any reimbursement.

Contingent liabilities are possible obligations that
arise from past events and whose existence will only
be confirmed by the occurrence or non-occurrence
of one or more future events not wholly within the
control of the Company. Where it is not probable that
an outflow of economic benefits will be required, or the
amount cannot be estimated reliably, the obligation is
disclosed as a contingent liability, unless the probability
of outflow of economic benefits is remote. Contingent
liabilities are disclosed on the basis of judgment of
the management/independent experts. These are
reviewed at each balance sheet date and are adjusted
to reflect the current management estimate.

Contingent assets are not recognised in the standalone
financial statements.

(6) Government grants

Grants from government are recognised when
there is reasonable assurance that the grant will be
received and the Company will comply with all the
attached conditions.

When the grant relates to a revenue item, it is
recognised in standalone statement of profit and
loss on a systematic basis over the periods in which
the related costs are expensed. The grant can either
be presented separately or can deduct from related
reported expense.

overnment grant relating to capital assets are
recognised initially as deferred income and are
credited to standalone statement of profit and loss
on a straight line basis over the expected lives of the
related asset and presented as other operating income
within revenue from operations.

(7) Foreign currency transactions and translation

Transactions in foreign currencies are initially recorded
at the functional currency spot rates at the date the
transaction first qualifies for recognition.

Monetary assets and liabilities denominated in foreign
currencies are translated at the functional currency
spot rates of exchange at the reporting date. Exchange
differences arising on settlement or translation of
monetary items are recognised in the standalone
statement of profit and loss in the year in which it arises.

Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated
using the exchange rate at the date of the transaction.

(8) Revenue

The Company recognises revenue from the
following major sources:

Sale of products (including scrap sales)

Revenue from sale of products (including scrap sales)
is measured based on the consideration specified in
a contract with a customer and excludes amounts
collected on behalf of third parties. It is measured at
the amount of transaction price, net of returns and
allowances, trade discounts and volume rebates.
The Company recognises revenue when it transfers
control over a product to a customer i.e. when goods
are delivered at the delivery point, as per terms of the
agreement, which could be either customer premises
or carrier premises who will deliver goods to the
customer. When payments received from customers
exceed revenue recognised to date on a particular
contract, any excess (a contract liability) is reported
in the standalone Balance Sheet under other current
liabilities (see note 27).

Satisfaction of performance obligations

The Company's revenue is derived from the single
performance obligation to transfer primarily products
under arrangements in which the transfer of control
of the products and the fulfilment of the Company's
performance obligation occur at the same time.
Revenue from the sale of goods is recognised when
the Company has transferred control of the goods
to the buyer and the buyer obtains the benefits from
the goods, the potential cash flows and the amount
of revenue (the transaction price) can be measured
reliably, and it is probable that the Company will
collect the consideration to which it is entitled to in
exchange for the goods.

Whether the customer has obtained control over the
asset depends on when the goods are made available
to the carrier or the buyer takes possession of the
goods, depending on the delivery terms.

Payment terms

The sale of goods is typically made under credit
payment terms differing from customer to customer
and ranges between 0-60 days.

Variable considerations associated with such sales

Periodically, the Company enters into volume or
other rebate programs where once a certain volume
or other conditions are met, it gives the customer
as volume discount some portion of the amounts
previously billed or paid. For such arrangements, the
Company only recognises revenue for the amounts it

ultimately expects to realise from the customer. The
Company estimates the variable consideration for
these programs using the most likely amount method
or the expected value method, whichever approach
best predicts the amount of the consideration based
on the terms of the contract and available information
and updates its estimates each reporting period.

Contract assets and contract liabilities

The Company recognises contract liabilities for
consideration received in respect of unsatisfied
performance obligations and reports these amounts
as other liabilities in the standalone balance sheet.
Similarly, if the Company satisfies a performance
obligation before it receives the consideration, the
Company recognises either a contract asset or a
receivable in its standalone balance sheet, depending
on whether something other than the passage of time
is required before the consideration is due.

A contract asset is the right to consideration in exchange
for goods or services transferred to the customer. If the
Company performs by transferring goods or services to
a customer before the customer pays consideration or
before payment is due, a contract asset is recognised for
the earned consideration when that right is conditional
on Company's future performance. A contract liability
is the obligation to transfer goods or services to
a customer for which the Company has received
consideration (or an amount of consideration is due)
from the customer. If a customer pays consideration
before the Company transfers goods or services to the
customer, a contract liability is recognised when the
payment is made or the payment is due (whichever is
earlier). Contract liabilities are recognised as revenue
when the Company performs under the contract.
The Company does not expect to have any contracts
where the period between the transfer of the promised
goods or services to the customer and payment by the
customer exceeds one year. As a consequence, the
Company does not adjust any of the transaction prices
for the time value of money.

Trade receivables

Trade receivables are amounts due from customers
for goods sold in the ordinary course of business
and reflects Company's unconditional right to
consideration (that is, payment is due only on the
passage of time). Trade receivables are recognised
initially at the transaction price as they do not contain
significant financing components. The Company
holds the trade receivables with the objective of
collecting the contractual cash flows and therefore
measures them subsequently at amortised cost using
the effective interest method, less loss allowance.

The Company's net obligation in respect of
defined benefit plan is calculated separately
by estimating the amount of future benefit
that employees have earned in return for their
service in the current and prior periods; that
benefit is discounted to determine its present
value. Any unrecognised past service costs are
deducted. The discount rate is based on the
prevailing market yields of Indian government
securities as at the reporting date that have
maturity dates approximating the terms of the
Company's obligations and that are denominated
in the same currency in which the benefits are
expected to be paid.

The liability recognised in the standalone
balance sheet for defined benefit plans is the
present value of the defined benefit obligation
(DBO) at the reporting date less the fair value
of plan assets.

The calculation is performed annually by a
qualified actuary using the projected unit credit
method. When the calculation results in a benefit
to the Company, the recognised asset is limited to
the total of any unrecognised past service costs.
Any actuarial gains or losses are recognised in
other comprehensive income in the period in
which they arise.

10.4 Other long-term employee benefits

Benefits under the Company's leave encashment
constitute other long-term employee benefit.

The employees can carry forward a portion of the
unutilised accrued compensated absences and
utilise it in future service periods or receive cash
compensation on termination of employment.
The liabilities for leave balance are not expected
to be settled wholly within 12 months after the
end of the period in which the employees render
the related service. The benefit is discounted to
determine its present value. The discount rate is
based on the prevailing market yields of Indian
government securities as at the reporting date
that have maturity dates approximating the terms
of the Company's obligations. The obligation is
measured on the basis of independent actuarial
valuation using the projected unit credit method.

The obligations are presented as non-current, as
the availment of leaves is subject to approval.
Also based on past experience, the Company
does not expect all employees to avail the full
amount of accrued leave or require payment for
such leave within the next 12 months.

(11) Share based payments

The Company recognises compensation expense
relating to share based payments in accordance with
Ind AS 102, 'Share-based payment'. Stock options
granted by the Company to its employees and
employees of the subsidiaries are accounted as equity
settled options. In respect of the options granted to the
employees of the Company, the estimated fair value
of options granted that is determined on the date of
grant, is charged to standalone statement of profit and
loss on a straight-line basis over the vesting period
of options, with a corresponding increase in equity.
The total amount to be expensed is determined by
reference to the fair value of the options granted:

(i) including any market performance conditions

(ii) excluding the impact of any service and non¬
market performance vesting conditions

(iii) including the impact of any non-vesting conditions

In respect of the options granted to the employees of
the subsidiary companies, the estimated fair value of
options granted that is determined on the date of grant,
is considered investment in the subsidiary company,
on a straight-line basis over the vesting period of
options, with a corresponding increase in equity.

At the end of each period, the entity revises its
estimates of the number of options that are expected
to vest based on the non-market vesting and service
conditions. It recognises the impact of the revision
to original estimates, if any, in profit or loss, with
corresponding adjustment to equity.

(12) Leases

Company as a lessee

The Company's lease asset classes primarily consist
of property leases. The Company assesses whether a
contract 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. To assess
whether a contract conveys the right to control the use
of an identified asset, the Company assesses whether:

(i) the contract involves the use of an identified asset;

(ii) the Company has substantially all of the
economic benefits from use of the asset through
the period of the lease; and

(iii) the Company has the right to direct the
use of the asset.

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, except for leases with a term
of twelve months or less (short-term leases) and
low value leases. For these short-term and low value
leases, the Company recognises the lease payments
as an operating expense on a straight-line basis over
the term of the lease.

Certain lease arrangements include the options to
extend or terminate the lease before the end of the
lease term. ROU assets and lease liabilities includes
these options when it is reasonably certain that they
will be exercised.

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.

Right-of-use assets are depreciated from the
commencement date on a straight-line basis over
the shorter of the lease term and useful life of the
underlying asset.

The lease liability is initially measured at amortised cost
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 in the country of domicile
of these leases. Lease liabilities are re-measured with
a corresponding adjustment to the related right-of-use
asset if the Company changes its assessment if whether
it will exercise an extension or a termination option.

(13) Taxes on income

Income-tax expense comprises current and deferred
tax. Current tax expense is recognised in the
standalone statement of profit and loss except to the
extent that it relates to items recognised directly in
other comprehensive income or equity, in which case it
is recognised in other comprehensive income or equity.

Current tax is the expected tax payable on the
taxable income for the year, using tax rates enacted
or substantively enacted and as applicable at the
reporting date, and any adjustment to tax payable in
respect of previous years.

Deferred tax is recognised using the balance sheet
method, providing for temporary differences between
the carrying amounts of assets and liabilities for

However, trade receivables that do not contain a
significant financing component are measured
at transaction price in accordance with Ind AS
115. Transaction costs of financial assets carried
at fair value through profit or loss are expensed in
the standalone statement of profit and loss.

Subsequent measurement

(i) Financial assets carried at amortised cost

A financial asset is subsequently measured
at amortised cost if it is held within a
business model whose objective is to hold
the asset in order to collect contractual
cash flows and the contractual terms of the
financial asset give rise on specified dates
to cash flows that are solely payments
of principal and interest on the principal
amount outstanding.

(ii) Financial assets at fair value through other
comprehensive income (FVOCI)

A financial asset is subsequently measured
at fair value through other comprehensive
income if it is held within a business
model whose objective is achieved by
both collecting contractual cash flows and
selling financial assets and the contractual
terms of the financial asset give rise on
specified dates to cash flows that are solely
payments of principal and interest on the
principal amount outstanding.

(iii) Financial assets at fair value through profit
or loss (FVTPL)

A financial asset which is not classified in any
of the above categories are subsequently
fair valued through profit or loss.

Derecognition

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

• The right to receive cash flows from the
asset have expired, or

• The Company has transferred its rights
to receive cash flows from the asset or
has assumed an obligation to pay the
received cash flows in full without material
delay to a third party under a 'pass¬
through' arrangement; and either (a) the
Company has transferred substantially

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

Impairment of financial assets

In accordance with Ind AS 109, the Company
use forward-looking information to recognise
expected credit losses (ECL) model' for
measurement and recognition of impairment
loss on the financial assets that are debt
instruments, and are measured at amortised
cost e.g., loans, debt securities, deposits, trade
receivables and bank balance.

For recognition of impairment loss on other
financial assets and risk exposure, the Company
determines that whether there has been a
significant increase in the credit risk since initial
recognition. If credit risk has not increased
significantly, 12-month ECL is used to provide
for impairment loss. However, if credit risk has
increased significantly, lifetime ECL is used.
If, in a subsequent period, credit quality of the
instrument improves such that there is no
longer a significant increase in credit risk since
initial recognition, then the entity reverts to
recognising impairment loss allowance based
on 12-month ECL.

The presumption under Ind AS 109 with reference
to significant increases in credit risk since initial
recognition (when financial assets are more
than 30 days past due), has been rebutted and is
not applicable to the company, as the company
is able to collect a significant portion of its
receivables that exceed the due date.

16.2 Financial liabilities

Initial recognition and measurement

The Company's financial liabilities include
borrowings, trade payables and other financial
liabilities. Financial liabilities are initially measured
at fair value, and, where applicable, adjusted
for transaction costs unless the Company
designated a financial liability at FVTPL.

Subsequent measurement

The measurement of financial liabilities depends
on their classification, as described below:

recognised in the period in which the estimates are revised
and in any future periods affected.

In order to enhance understanding of the standalone
financial statements, information about significant areas of
estimation, uncertainty and critical judgments in applying
accounting policies that have the most significant effect
on the amounts recognised in the standalone financial
statements is as under:

(1) Recognition of deferred tax assets

The extent to which deferred tax assets can be
recognised is based on an assessment of the
probability of the Company's future taxable income
(supported by convincing evidence) against which the
deferred tax assets can be utilised.

(2) Contingent liabilities

At each balance sheet date basis the management
judgment, changes in facts and legal aspects, the
Company assesses the requirement of provisions
against the outstanding contingent liabilities. However,
the actual future outcome may be different from
this judgement.

(3) Impairment of financial assets

The evaluation of applicability of indicators of
impairment of assets requires assessment of several
external and internal factors which could result in
deterioration of recoverable amount of the assets. At
each balance sheet date, based on historical default
rates observed over expected life, existing market
conditions as well as forward looking estimates, the
management assesses the expected credit losses on
outstanding receivables. Further, management also
considers the factors that may influence the credit risk
of its customer

base, including the default risk associated with
industry and country in which the customer operates.

(4) Defined benefit obligation (DBO)

Management's estimate of the DBO is based on a
number of underlying assumptions such as standard
rates of inflation, mortality, discount rate and
anticipation of future salary increases. Variation in
these assumptions may significantly impact the DBO
amount and the annual defined benefit expenses.

(5) Useful lives of depreciable/amortisable assets

Management reviews its estimate of the useful lives
of depreciable/amortisable assets at each reporting
date, based on the expected utility of the assets.
Uncertainties in these estimates relate to technical

and economic obsolescence that may change the
utilisation of assets.

(6) Leases

The Company evaluates if an arrangement qualifies
to be a lease as per the requirements of Ind AS 116.
Identification of a lease requires significant judgment.
The Company uses significant judgement in assessing
the lease term (including anticipated renewals) and the
applicable discount rate. The Company determines the
lease term as the non-cancellable period of a lease,
together with both periods covered by an option to
extend the lease if the Company is reasonably certain to
exercise that option; and periods covered by an option
to terminate the lease if the Company is reasonably
certain not to exercise that option. In assessing whether
the Company is reasonably certain to exercise an
option to extend a lease, or not to exercise an option
to terminate a lease, it considers all relevant facts and
circumstances that create an economic incentive for
the Company to exercise the option to extend the lease,
or not to exercise the option to terminate the lease. The
Company revises the lease term if there is a change in
the non-cancellable period of a lease.

(7) Government grant

Grants receivables are based on estimates for
utilisation of the grant as per the regulations as well
as analysing actual outcomes on a regular basis and
compliance with stipulated conditions. Changes in
estimates or non-compliance of stipulated conditions
could lead to significant changes in grant income
and are accounted for prospectively over the balance
life of the asset.

(8) Fair value measurements

Management applies valuation techniques to
determine fair value of equity shares (where active
market quotes are not available) and stock options.
This involves developing estimates and assumptions
around volatility, dividend yield which may affect the
value of equity shares or stock options.

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

11 Current financial assets - trade receivables (Contd..)

c. There are no unbilled receivables, hence the same is not disclosed in the ageing schedule.

d. 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

e. The carrying amounts of the trade receivables include receivables which are subject to a bill discounting arrangement with the
bank. Under this arrangement, the Company has transferred the relevant receivables to the bank in exchange for cash. However,
the Company retains the credit risk with respect to the transferred receivables due to the existence of recourse till the due date
of the relevant bills discounted. Accordingly, the Company continues to recognise the transferred receivables in their entirety
in its standalone balance sheet till the due date. The amount repayable under the bills discounting arrangement is presented
as unsecured current borrowings in note 24 - Current financial liabilities - borrowings. The Company considers that the held to
collect business model remains appropriate for these receivables and hence continues measuring them at amortised cost.

b. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs 2 per share (31 March 2025: Rs 2 per share). Each
holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees.

During the year ended 31 March 2026, the amount of per share final dividend recognised as distributions to equity shareholders
is Rs 2.50 per share (31 March 2025: Rs 2 per share) amounting to H 904.61 lakh (previous year - Rs 720.48 lakh).

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.

i) Capital reserve

Capital reserves represents proceeds of forfeited shares.

ii) Securities premium

Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the
provisions of the Act.

iii) Share options outstanding account

The Company has implemented a share option scheme under which option to subscribe for the Company's share have been
granted to employees of the Company and its subsidiary companies. The reserve is used to recognise the value of equity
settled share options provided to such employees. See note 51 for further details.

iv) 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 Companies (Transfer of profits to Reserve) Rules,1975. Consequent to introduction of the Companies
Act 2013, there is no such requirement to mandatorily transfer a specified percentage of the net profit to general reserve.

v) Retained earnings

Retained earnings are created from the profit / loss of the Company, as adjusted for distributions to owners, transfers to
other reserves, etc.

vi) Equity instruments through other comprehensive income

The Company has elected to recognise changes in the fair value of certain investment in equity instruments in other
comprehensive income. These changes are accumulated in this reserve within equity.

a) The term loans (including current maturities) are secured by equitable mortgage of certain land and building at Plot No. 52,

53 and 54 DLF Industrial Estate, Phase-I, Delhi - Mathura Road and factory land and building situated at Plot No 109-110,

Vemgal Industrial Area, District Kolar, Bangalore, Karnataka and hypothecation of plant and machinery and other property,
plant and equipment.

b) The terms and repayment profile of the term loans from banks is below:

(i) Term loan from State Bank of India carries an interest in the range of 8.75% to 9.06% and is repayable in 60 monthly
instalments commencing from April 2024 with last instalment due in February 2029.

(ii) Term loans from HDFC Bank carries an interest in the range of 6.37% to 8.06% and are repayable in 51 - 60 monthly
instalments commencing from October 2021 with last instalment due in November 2029.

c) There has been no default in servicing of loan during the year.

d) The term loans have been used for the specific purpose for which they were availed.

e) The Company has complied with the relevant financial covenants under the terms of borrowings throughout the
reporting period.

(i) This pertains to security deposits received from customers. Refer note 48.

(ii) During the previous year, the Company had completed its assessment in relation to fulfillment of export obligation against
one of the license and paid the requisite duty amount against the un-fulfilled export obligation to the custom authorities.
Owing to final settlement on account of payment of requisite duty, the remaining balance which pertained to the un-fulfilled
export obligation of Rs 152.21 had been transferred to Deferred grant income. The said balance will be amortized in the
remaining life of property, plant and equipment against which such export obligation was made.

Note:

a) The cash credit facilities and working capital demand loan are secured by hypothecation of all inventories including those
in transit, receivables, book debts on pari passu basis, equitable mortgage of land and building situated at Plot No. 52, 53
and 54 DLF Industrial Estate, Phase-I, Delhi- Mathura Road and factory land and building situated at 49 km stone Delhi
Mathura Road, Village Prithla, Tehsil-Palwal, Distt. Palwal, Haryana and Plot No 109-110, Vemgal Industrial Area, District Kolar,
Bangalore, Karnataka.

b) The outstanding balance of cash credit facilities is repayable on demand and the rate of interest ranges between 8.50% to
9.20% (31 March 2025: 8.30% to 9.20%) per annum.

c) The outstanding balance of working capital demand loan is repayable within a period of 90 days and the rate of interest
ranges between 6.00% to 7.20% (31 March 2025: 6.90% to 7.20%) per annum.

d) The cash credit facilities and working capital demand loans have been used for the specific purpose for which they are taken
as at the year end

e) The bills discounting facility from banks are secured by first charge on trade receivables subject to the bills
discounting arrangement

f) Details of quarterly statements of current assets filed by the Company with banks and reasons of material discrepancies

39 Employee benefits

i) Defined contribution plans

The Company makes fixed contribution towards provident fund and Employees' State Insurance (ESI) for qualifying employees.
The provident fund plan is operated by the Regional Provident Fund Commissioner and the Company is required to contribute
a specified percentage of payroll cost to fund the benefits. Similarly, the contribution is made in ESI at a specified percentage
of payroll cost.

The Company recognised Rs 283.75 lakh (31 March 2025: Rs 256.25 lakh) for provident fund contributions and Rs 6.69 lakh
(31 March 2025: Rs 7.01 lakh) for ESI & LWF contributions in the Standalone Statement of Profit and Loss and included in
"Employee benefits expenses” in note 33. The contribution payable to these plans by the Company is at rates specified in the
rules of the schemes.

ii) Defined benefit plans
Gratuity

Contribution to Gratuity funds- Life Insurance Corporation of India, Group Gratuity Scheme

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in
continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination
is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number
of years of service. The gratuity plan is a funded plan and the Company makes contribution to recognised funds in India.
The unfunded gratuity obligation of directors is determined based on actuarial valuation using the Projected Unit Credit Method.

The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit
obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting year. This analysis
may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in
assumptions would occur in isolation of one another as some of the assumptions may be correlated.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to
the previous year.

D) Risk exposure

i) Changes in discount rate

A decrease in discount yield will increase plan liabilities.

ii) Mortality table

The gratuity plan obligations are to provide benefits for the life of the member, so increases in life expectancy will
result in an increase in plan liabilities.

iii) Salary increase

Actual salary increase will increase the plan's liabilities. Increase in salary rate assumption in future valuation will
also increase the valuation.

The weighted average duration of the defined benefit plan obligation at the end of the reporting period is 2 years (31
March 2025: 6 years).

iii) Other long-term employee benefit plans

The Company provides for compensated absences to its employees. The employees can carry-forward a portion of the
unutilized accrued compensated absences and utilise it in future service periods or receive cash compensation on termination
of employment. Since the compensated absences do not fall due wholly within twelve months after the end of the period in
which the employees render the related service and are also not expected to be utilised wholly within twelve months after the
end of such period, the benefit is classified as a other long-term employee benefit. The Company records an obligation for
such compensated absences in the period in which the employee renders the services that increase this entitlement. The
scheme is unfunded and liability for the same is recognised on the basis of actuarial valuation. A provision of H 124.99 lakh
(31 March 2025: H 70.38 lakh) for the year have been made on the basis of actuarial valuation as at the year end and debited
to the Standalone Statement of Profit and Loss. As at 31 March 2026, provision for compensated absences amounts to H
256.50 lakh (31 March 2025 - H 196.10 lakh) presented as provisions for employee benefit obligations in note 21 - Provisions.

40 Operating segments

In accordance with Ind AS 108 'Operating Segments', the Board of Directors of the Company, being the chief operating decision
maker of the Company has determined "Automotive components” as the only operating segment.

Further, in terms of paragraph 31 of Ind AS 108, entity wide disclosures have been presented below:

Entity wide disclosures

A. Information about products and services

The Company is engaged in the manufacturing and marketing of one product line i.e. "Automotive Components” primarily
used in the automobile industry. Therefore, product wise revenue disclosure is not applicable.

B. Information about geographical area

The major sales of the Company are made to customers which are domiciled in India. Information concerning principal
geographic areas is as follows

C. Information about major customers

Revenues of Rs 36,713.86 lakh (31 March 2025 : Rs 32,551.08 lakh ) are derived from three customers, who individually
accounted for more than ten percent of the total revenue.

41 Contingent liabilities, contingent assets and commitments

A. Capital commitment:

(i) Estimated amount of contracts remaining to be executed on the capital account and not provided for in the books of
account (net of capital advances) H 352.83 lakhs (H 701.18 lakhs as at 31 March 2025).

41 Contingent liabilities, contingent assets and commitments (Contd..)

a) Service tax demand amounting to Rs 106.04 lakh for the period April 2014 to June 2017 was due to disallowance
of the Cenvat credit on outward transportation of final product to the buyer's premises. Representation against the
aforementioned demand were filed before the Joint Commissioner of Central Tax, Faridabad, Haryana. On 4 June
2021, the Company had received an unfavourable order from the Joint Commissioner. On 2 August 2021, the Company
had filed an appeal against the aforesaid order with the Commissioner Appeals, however, the Company had received
an unfavorable order from the Commissioner Appeals vide order dated 25 February 2022. The Company had filed
an appeal, on 26 May 2022, against the said demand/order with Customs Excise and Service Tax Appellate Tribunal
('CESTAT'), Chandigarh and remains confident of getting a relief against the said order.

b) Interest amounting to H 91.58 lakh (31 March 2025 - H 82.65 lakh) on the demands raised by excise authorities has been
calculated by the Company based on the demand cum show-cause notices pending adjudication.

c) An Order-in-Original (OIO No. 129JC/DDN/2025 dated 29 December 2025) has been received from the Office of the
Central GST Coimimissionerate, Dehradun, wherein demand of interest amounting to ?1.60 lakh and penalty of ?0.50
lakh relating to supplementary invoices has been confirmed. The Company has filed an appeal on 13 March 2026
before the appropriate appellate authority.

The Company has been advised by its legal counsel that its position is likely to be upheld in the litigation process and
accordingly no provision has been created in the financial statement.

d) Appeals filed before Commissioner of Income tax (CIT) for demands under Income Tax Act 1961 in AY 2013-14, 2016¬
17, 2018-19 and 2020-21. The appeals has yet not been disposed off by CIT and the company expects a favorable
chance of getting the relief against these orders.

The Company has no other material contingent liabilities other than those disclosed above, which could devolve
upon the Company.

It is not practicable for the Company to estimate the timings of the cash flows, if any, in respect of the above pending
resolution of the respective proceedings. The Company has assessed that it is only possible, but not probable, that
outflow of economic resources will be required in respect of the above proceedings.

The Company has leases for its plant, offices, vehicle and equipments. With the exception of short-term leases and leases of low-value
underlying assets, each lease is reflected on the standalone balance sheet as a right-of-use asset and a lease liability. The Company
classifies its right-of-use assets within property, plant and equipment within which the corresponding underlying assets would be presented
if they were owned. The additions to right-of-use assets and carrying amounts of right-of-use assets has been disclosed in note 2

The table below describes the nature of the Company's leasing activities by type of right-of-use asset recognised on standalone balance
sheet as at 31 March 2026 and 31 March 2025 respectively:

The lease liabilities are secured by the related underlying assets. The maturity analysis of lease liabilities are disclosed in
note 45(II)(B)(ii).

Lease payments not recognised as a liability

The Company has elected not to recognise a lease liability for short-term leases (leases with an expected term of 12 months or less)
or for leases of low value assets. Payments made under such leases are expensed on a straight-line basis. The Company does not
have any liability to make variable lease payments for the right-to-use the underlying asset recognised in the financial statements.

The expense relating to payments not included in the measurement of the lease liability for short term leases is H 53.86 lakhs
(31 March 2025 - H100.69 lakhs). At 31 March 2026 and 31 March 2025, the Company is not committed to any liability towards
short-term leases.

Total cash outflow for leases for the year ended 31 March 2026 was H 88.94 lakhs (31 March 2025 - H 138.12 lakhs) [including
H 53.86 lakhs (31 March 2025 - H 100.69 lakhs) paid towards the aforementioned short-term leases]

Note :

1) The sale to and purchase from and other transactions with related party are made on terms equivalent to those
that prevail in arm 's length transaction.

2) Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash.

3) The remuneration to the Key managerial personnel does not include the provisions made for gratuity as they are
determined to the company as a whole

44 Corporate social responsibility ('CSR')

The Company's CSR programs/projects focusses on sectors and issues as mentioned in in Schedule VII read with section 135 of
the Act. The CSR committee has been formed by the Company as per the Act

45 Fair value measurements

I Financial instruments

(a) Financial instruments by category

Derivative financial instruments and investment in mutual funds are measured at fair value through profit or loss.
Investment in equity instruments (except investments in subsidiaries) are measured at fair value through other
comprehensive income. Other than the aforementioned, all other financial assets and liabilities viz. security deposits,
cash and cash equivalents, other bank balances, interest receivable, other receivables, trade payables, employee related
liabilities and borrowings, are measured at amortised cost.

(b) Fair value hierarchy

This section explains the judgments and estimates made in determining the fair values of the financial instruments
that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are
disclosed in the standalone financial statements. To provide an indication about the reliability of the inputs used in
determining fair value, the Company has classified its financial instruments into the three levels prescribed under the
accounting standard. An explanation of each level follows underneath the table.

The following table shows the carrying amounts and fair values of financial assets and financials liabilities, including
their levels of in the fair value hierarchy::

45 Fair value measurements (Contd..)

'The Company has an established control framework with respect to the measurement of fair values. The finance and
accounts team that has overall responsibility for overseeing all significant fair value measurements and reports directly
to the board of directors. The team regularly reviews significant unobservable inputs and valuation adjustments. If third
party information, such as broker quotes or pricing services, is used to measure fair values, then the team assesses the
evidence obtained from the third parties to support the conclusion that these valuations meet the requirements of Ind
AS, including the level in the fair value hierarchy in which the valuations should be classified. Significant valuation issues
are reported to the Company's board of directors.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation
techniques as follows.

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

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

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

There have been no transfers within the levels for the year ended 31 March 2026 and 31 March 2025.

Fair value of financial assets and liabilities measured at amortised cost

The carrying amounts of short-term trade and other receivables, trade payables, cash and cash equivalents and other
bank balances are considered to be the same as their fair values, due to their short-term nature.

For other financial liabilities/ assets that are measured at amortised cost, the carrying amounts are considered equal to
their respective fair values.

II. Financial risk management

The Company's principal financial liabilities comprise borrowings, lease liabilities, trade payables and other payables. The
Company's principal financial assets include trade and other receivables, investments and cash and bank balances that it
derives directly from its operations.

This note presents information about the Company's exposure to each of the above risks, the Company's objectives, policies
and processes for measuring and managing risk.

A. 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 resulting in a financial loss to the Company. Credit risk arises principally from trade
receivables, loans and advances, cash and cash equivalents and deposits with banks.

Trade receivables

The Company primarily sells high tensile cold forged fasteners to bulk customers comprising mainly automotive
manufacturers operating in India and outside India. 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.

Cash and cash equivalents, other bank balances and deposits with banks

Cash and cash equivalents and other bank balances of the Company are held with banks which have high external
rating. The Company considers that its cash and cash equivalents and other bank balances have low credit risk based
on the external credit ratings of the counterparties.

Loans to employees, security deposits and other financial assets

The Company provides loans to its employees and furnish security deposit to various parties for electricity,
communication, etc.. The Company considers that its loans have low credit risk or negligible risk of default as the parties
are well established entities and have strong capacity to meet the obligations. Other financial assets majorly includes
receivables from scrap sales wherein the Company monitors the credit risk of the respective customer/dealers on the
basis of the individual characteristics of the customer/dealer and any default risk or increased credit risk in the past.

Investments

The Company has invested in unquoted equity instruments of its subsidiaries and other company. The management
actively monitors the operation of subsidiaries which affect investments. The Company does not expect the
counterparty to fail in meeting its obligations other than those specifically considered as impairment allowance as per
the management's assessment

Plan assets

The Company has taken gratuity insurance policy from LIC of India for funding of its employee benefit obligations, LIC
of India generally invest in securities of high credit rating.

(a) Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to
credit risk at the reporting date is:

Provision for expected credit loss

(a) Financial assets for which loss allowance is measured using 12 month expected credit loss

The Company has assets where the counter- parties have sufficient capacity to meet the obligations and where
the risk of default is very low. Hence, no impairment loss has been recognised during the reporting period in
respect of these assets.

(b) Financial assets for which loss allowance is measured using life time expected credit loss

The Company has customers with strong capacity to meet the obligations and therefore the risk of default is
negligible in respect of outstanding from customers. Further, management believes that the unimpaired amounts
that are past due by more than 60 days are still collectible in full.

B. Liquidity risk

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 principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from
operations. The Company believes that the working capital is sufficient to meet its capital requirements. Accordingly, no
liquidity risk is perceived.

As at 31 March 2026, the Company has a working capital of H 20,917.21 lakhs (31 March 2025 - H 18,242.44 lakhs)
including cash and cash equivalents of H 3,452.63 lakhs (31 March 2025 - H 668.11 lakhs).

C. Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the
Company's income. The objective of market risk management is to manage and control market risk exposures within
acceptable parameters, while optimising the return.

The Board of directors is responsible for setting up of policies and procedures to manage market risks of the Company.
The Company is carrying out imports of certain raw materials and capital goods and exports finished goods which are
denominated in the currency other than the functional currency of the Company which exposes it to foreign currency
risk. In order to minimise the risk, the Company executes forwards contract with respect to purchases and sales made
in currency other than its functional currency, the foreign exchange exposure of the Company is ascertained on the
basis of the progress billings and purchase orders issued.

(i) Currency risk

The Company is exposed to foreign currency risk on certain transactions that are denominated in a currency
other than entity's functional currency, hence exposure to exchange rate fluctuations arises. The risk is that the
functional currency value of cash flows will vary as a result of movements in exchange rates.

Sensitivity analysis

A strengthening/weakening of the Indian Rupee, as indicated below, against foreign currency as at the year end
would have increased (decreased) profit or loss (after tax) and equity by the amounts shown below. This analysis
is based on foreign currency exchange rate variances that the Company considered to be reasonably possible at
the end of the reporting period. The analysis assumes that all other variables, in particular interest rates, remain
constant. The analysis is performed on the same basis for previous year, except that the reasonably possible
foreign exchange rate variances were different, as indicated below.

(ii) Interest rate risk

The Company is exposed to interest rate risk arising mainly from non-current and current borrowings with floating
interest rates. The Company is exposed to interest rate risk because the cash flows associated with floating rate
borrowings will fluctuate with changes in interest rates.

Fair value sensitivity analysis for fixed-rate instruments

The Company's fixed rate instruments are carried at amortised cost. They are, therefore, not subject to interest
rate risk, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market
interest rates.

Cash flow sensitivity analysis for variable-rate instruments

A change of 100 basis points in interest rates at the reporting date would have increased (decreased) profit or loss
(after tax) and equity by the amounts shown below. This analysis assumes that all other variables, in particular
foreign currency rates, remain constant. The analysis is performed on the same basis for the previous year.

(iii) Price risk

The Company is mainly exposed to the price risk mainly due to its investment in mutual funds and equity
instruments, which are measured at fair value through profit or loss. The price risk arises due to uncertainties
about the future market values (quoted prices or NAV) of these instruments. To manage the price risk arising from
investments in mutual funds and equity instruments, the group diversifies its portfolio. Further, the management
reviews the investment portfolio and the movement in the market to manage the risk.

45 Fair value measurements (Contd..)

The Company's investment in the mutual funds and equity instruments are publicly traded.

Sensitivity analysis

To provide a meaningful assessment of the price risk associated with the Company's investment portfolio, the
Company performed the sensitivity analysis to determine the impact of change in prices of the mutual funds and
equity instruments that would have on the value of investment portfolio, assuming a 1% changes in the prices of
mutual funds and equity instruments.

46 Capital management

The Company's objectives when managing capital are to:

- afeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and
benefits for other stakeholders; and

- maintain an appropriate capital structure of debt and equity.

The management assesses the capita requirements in order to maintain an efficient overall financing structure. The Company
manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics
of the underlying assets. The Company is not subject to externally imposed capital requirements.

The Company monitors capital on the basis of its gearing ratio which is net debt divided by total equity. Net debt comprises of
non-current and current borrowings less cash and cash equivalents. Equity includes equity share capital and other equity that are
managed as capital. The gearing ratio at the end of the reporting periods are as follows:

48 Disclosures pursuant to Ind AS 115, Revenue from Contracts with Customers, are as follows: (Contd..)

(f) Satisfaction of performance obligations

The Company's revenue is derived from the single performance obligation to transfer primarily hi-tensile fasteners under
arrangements in which the transfer of control of the products and the fulfilment of the Company's performance obligation
occur at the same time. Revenue from the sale of goods is recognised when the Company has transferred control of the
goods to the buyer and the buyer obtains the benefits from the goods, the potential cash flows and the amount of revenue
(the transaction price) can be measured reliably, and it is probable that the Company will collect the consideration to which it
is entitled to in exchange for the goods.

Whether the customer has obtained control over the asset depends on when the goods are made available to the carrier or
the buyer takes possession of the goods, depending on the delivery terms. In case of the Company's operations, generally
the criteria to recognize revenue has been met when its products are delivered to its customers or to a carrier who will
transport the goods to its customers, this is the point in time when the Company has completed its performance obligations.
Revenue is measured at the transaction price of the consideration received or receivable, the amount the Company expects
to be entitled to.

Payment terms

The sale of goods is typically made under credit payment terms differing from customer to customer and ranges
between 0-60 days.

Variable considerations associated with such sales

Periodically, the Company enters into volume or other rebate programs where once a certain volume or other conditions are
met, it refunds the customer some portion of the amounts previously billed or paid. For such arrangements, the Company
only recognizes revenue for the amounts it ultimately expects to realise from the customer. The Company estimates the
variable consideration for these programs using the most likely amount method or the expected value method, whichever
approach best predicts the amount of the consideration based on the terms of the contract and available information and
updates its estimates each reporting period.

50 The Board of Directors at its meeting held on 15 May 2026, have recommended a final dividend of Rs 2.75 per share (face value of H
2 per share) for the financial year 2025-26, which is subject to the approval of the members at the ensuing Annual General Meeting.

51 Employee Stock Option Plan ('ESOP')

During the earlier year ended 31 March 2024, the Company vide resolution dated 30 October 2023, approved the 'STL-Employee
Stock Option Plan-2023'. The Employee Stock Option Plan ('ESOP') is introduced to provide employees of the Company and
its subsidiary companies, with an additional incentive based on productivity and performance and thereby to motivate them
to contribute to the overall corporate growth and profitability. The Company aims to make the overall compensation structure
attractive to attract, retain and suitably reward the employees and unify the interests of the Company's personnel and shareholders.

Under the plan, options granted to the employees shall vest on satisfying time-based eligibility criteria, which shall not be earlier
than one year and not later than the maximum period of five years from the date of the grant of the options. The options which
have vested can be exercised by the eligible employees within a period of ten years from the date of vesting. When exercisable,
each option is convertible into one equity share.

Below is a summary of options granted under the plan:

51 Employee Stock Option Plan ('ESOP') (Contd..)

Expected volatility during the expected life of the options is estimated using the historical volatility of the equity shares of the
Company during the period equivalent to the expected life of the options from the grant date. As the options are vesting on
graded basis, the expected volatility has been estimated for each tranche of the options vested using the historical volatility of the
Company during the period equivalent to the expected life of each tranche of the options.

Since, 640,431 options are issued to an employee of the subsidiary company as on 31 January 2024 and the Company has an
obligation to settle the options provided to the subsidiary's employees by providing the Company's equity shares, the Company has
measured its obligation with a credit to share option outstanding reserve amounting to H 581.93 lakhs during the year (previous
year - Rs 1,118.88 lakhs) in accordance with Ind AS 102, Share based payments, with a corresponding debit to the Company's
investment in the subsidiary company.

Pursuant to the ESOP Plan 2023, 1,60,107 & 1,60,108 options have been granted to an employee of a subsidiary company which
were vested on 31st January 2025 & 31st January 2026 respectively and were subsequently exercised by employee. Based on
the Exercise Letter, Nomination and Remuneration Committee recommendation, and Board approval of Sterling Tools Limited, the
equity shares have been allotted to the employee.

52 On November 21, 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 twenty-nine existing labour laws. The Company has assessed and disclosed the incremental impact of these
changes on the basis of best information available, consistent with the guidance provided by the Institute of Chartered Accountants
of India. The incremental impact on provision for gratuity of ? 146.78 lakhs and on provision for long-term compensated absences
of ? 15.05 lakhs has primarily arisen due to changes in definition of wages. The Company will continue to monitor the finalisation
of Central and State Rules and further Covemment clarifications, and will record any additional accounting impact, as required.

53 The Ministry of Corporate Affairs (MCA) has prescribed a requirement for companies under the proviso to Rule 3(1) of the
Companies (Accounts) Rules, 2014 inserted by the Companies (Accounts) Amendment Rules, 2021 requiring companies, which
uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of
recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with
the date when such changes were made and ensuring that the audit trail cannot be disabled.

For the year ended 31 March 2026, the Company uses an accounting software for maintenance of books of account, which
records the logs for all the transactions and edit logs for the changes therein. However, the edit logs of events for the changes
directly at the database level and application level was enabled at certain specific areas/tables. Furthermore, the audit trail has
been preserved by the Company as per the statutory requirements for record retention.

Further, accounting software used for payroll processing of the Company is operated by a third party software service provider
and the availability of audit trail (edit logs) are covered in the 'Independent Service Auditor's Assurance Report on the Description
of Controls, their Design and Operating Effectiveness' ('Type 2 report' issued in accordance with SAE 3402, Assurance Reports
on Controls at a Service Organization). There is an exception in the design of control, whereby for changes made directly at the
database level, the audit trail logs do not capture old values. Also, the audit trail has been preserved by the Company as per the
statutory requirements for record retention.

54 Other statutory information

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company

for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules
made thereunder.

(ii) The Company has not been declared willful defaulter by any bank or financial institutions or other lenders.

(iii) The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or
section 560 of the Companies Act, 1956.

(iv) The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies ('ROC')
beyond the statutory period.

54 Other statutory information (Contd..)

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

(vi) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the intermediary shall:

- 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

- provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(vii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the Company shall:

- 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

- provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(viii) 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 current and preceding 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).

(ix) The Company has not traded or invested in crypto currency or virtual currency during the current and the preceding
financial year.

55 Previous year figures have been regrouped/reclassified, where necessary, to conform to the current year classification. The impact
of such reclassification/regrouping is not material to the standalone financial statements.