5.11 Provisions and contingent liabilities

Provisions are recognised when the Company has a present
obligation (legal or constructive) as a result of a past event,
it is probable that the Company will be required to settle
the obligation, and a reliable estimate can be made of the
amount of the obligation.

Provisions are measured at the best estimate of the
consideration required to settle the present obligation at the
end of the reporting period, taking into account the risks
and uncertainties surrounding the obligation.

If the effect of the time value of money is material, provisions
are determined by discounting the expected future cash flows
to net present value using an appropriate pre-tax discount rate
that reflects current market assessments of the time value of
money and, where appropriate, the risks specific to the liability.

A present obligation that arises from past events, where it is
either not probable that an outflow of resources will be required
to settle or a reliable estimate of the amount cannot be made,
is disclosed as a contingent liability. Contingent liabilities are
also disclosed when there is a possible obligation arising from
past events, the existence of which will be confirmed only by
the occurrence or non- occurrence of one or more uncertain
future events not wholly within the control of the Company.

Claims against the Company, where the possibility of
any outflow of resources in settlement is remote, are not
disclosed as contingent liabilities.

Contingent assets

Contingent assets are not recognised in the financial
statements since this may result in the recognition of income
that may not be realised. However, when the realisation of
income is virtually certain, then the related asset is not a
contingent asset and is recognised.

Warranties provision

Provisions for warranty-related costs are recognised as
an expense in the Statement of Profit and Loss when the
product is sold or service provided to the customer. Initial
recognition is based on historical experience. The initial
estimate of warranty-related costs is revised annually. See
note no. 24 of the standalone financial statement

Onerous contracts

Present obligations arising under onerous contracts are
recognised and measured as provisions. An onerous
contract is considered to exist where the group has a
contract under which the unavoidable costs of meeting
the obligations under the contract exceed the economic
benefits expected to be received under it.

5.12 Employee benefits

Employee benefits include salaries, wages, contribution to
provident fund, gratuity, leave encashment towards un-availed
leave, compensated absences and other terminal benefits.

Short-term employee benefits

Employee benefits such as wages, salaries, bonus, ex-gratia,
short-term compensated absences, performance linked
rewards, including non-monetary benefits that are expected
to be settled within 12 months are classified as short-term
employee benefits and are recognised in the period in which
the employee renders services and are measured at the
amounts expected to be paid when the liabilities are settled.

Defined contribution plan

Contribution payable to the recognised provident fund,
employee state insurance, employee pension scheme and
other employee social security scheme etc., which are
substantially defined contribution plans, is recognised as
expense based on the undiscounted amount of obligations
of the Company to contribute to the plan.

Defined benefit plan

Defined benefit plans comprising of gratuity and other
terminal benefits, are recognized based on the present
value of defined benefit obligations which is computed
using the projected unit credit method, with actuarial
valuations being carried out at the end of each annual
reporting period. These are accounted either as current
employee cost or included in cost of assets as permitted.

The net interest cost is calculated by applying the discount
rate to the net balance of the defined benefit obligation.

This cost is included in employee benefit expense in the
statement of profit and loss.

Remeasurement gains and losses arising from experience
adjustments and changes in actuarial assumptions are
recognised in the period in which they occur, directly in
other comprehensive income.

Changes in the present value of the defined benefit
obligation resulting from plan amendments or curtailments
are recognised immediately in profit or loss as
past service cost.

Other long-term employee benefits

Other long-term employee benefit comprises of leave
encashment towards unavailed leave and compensated
absences, which is computed using the projected unit
credit method, with actuarial valuations being carried out
at the end of each annual reporting period. These are
accounted either as current employee cost or included in
cost of assets as permitted.

Termination benefits:

Termination benefits are payable when employment is
terminated by the Company before the normal retirement
date, or when an employee accepts voluntary retirement
scheme in exchange for these benefits. Expenditure on
Voluntary Retirement Scheme (VRS) is charged to the
Statement of Profit and Loss when incurred.

5.13 Share-based payments

The Company issues equity-settled share-based payments
to certain employees. Equity-settled share-based payments
are measured at fair value as at the date of grant. The fair
value determined at the grant date of the equity-settled
share-based payments is expensed on a straight-line basis
over the vesting period, based on the Company’s estimate
of the shares that will eventually vest with corresponding
increase in equity. Fair value of the options on the grant
date is calculated considering the following:

- Including the impact of market-based performance
conditions (e.g. equity share price of an entity) and
non-vesting conditions (e.g. holding the shares for the
specific period of time)

- Excluding the impact of service and non-market
performance conditions (e.g. achieving revenue or
profitability target)

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 a
corresponding adjustment to equity. However, fair
value of options is not remeasured subsequently.

5.14 Statement of Cash Flows

Cash flows are reported using the indirect method, whereby
the net profit before tax is adjusted for the effects of
transactions of a non-cash nature, any deferrals or accruals of
past or future operating cash receipts or payments and item
of income or expenses associated with investing or financing
cash flows. The cash flows from operating, investing and
financing activities of the Company are segregated.

5.15 Earnings per share

Basic earnings per share

Basic earnings per share is computed by dividing the net
profit after tax by weighted average number of equity shares
outstanding during the period. The weighted average
number of equity shares outstanding during the year is
adjusted for treasury shares, bonus issue, bonus element
in a rights issue to existing shareholders, share split and
reverse share split (consolidation of shares).

Diluted earnings per share

Diluted earnings per share is computed by dividing the
profit after tax after considering the effect of interest and
other financing costs or income (net of attributable taxes)
associated with dilutive potential equity shares by the
weighted average number of equity shares considered for
deriving basic earnings per share and also the weighted
average number of equity shares that could have been
issued upon conversion of all dilutive potential equity shares
including the treasury shares held by the Company to
satisfy the exercise of the share options by the employees.

5.16 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 and deposits which
are subject to insignificant risk of changes in value.

5.17 Fair value measurement

The Company measures financial instruments, such as
investments (other than equity investments in Subsidiaries,
Joint Ventures and Associates) and derivatives at fair values
at each Balance Sheet date.

Fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.
The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability
takes place either:

- In the principal market for the asset or liability, or

- In the absence of a principal market, in the most
advantageous market for the asset or liability.

The principal or the most advantageous market must be
accessible by the Company.

The fair value of an asset or a liability is measured using
the assumptions that market participants would use
when pricing the asset or liability, assuming that market
participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into
account a market participant’s ability to generate economic
benefits by using the asset in its highest and best use, or
by selling it to another market participant that would use the
asset in its highest and best use.

The Company uses valuation techniques that are appropriate in
the circumstances and for which sufficient data are available to
measure fair value, maximising the use of relevant observable
inputs and minimising the use of unobservable inputs.

All assets and liabilities (for which fair value is measured
or disclosed in the financial statements) are categorised
within the fair value hierarchy, described as follows, based
on the lowest level input that is significant to the fair value
measurement as a whole:

Level 1 — Quoted (unadjusted) market prices in active
markets for identical assets or liabilities.

Level 2 — Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
directly or indirectly observable other than quoted prices
included in Level 1.

Level 3 — Valuation techniques for which the lowest level
input that is significant to the fair value measurement
is unobservable.

For assets and liabilities that are recognised in the
financial statements on a recurring basis, the Company
determines whether transfers have occurred between
levels in the hierarchy by re-assessing categorisation
(based on the lowest level input that is significant to the

fair value measurement as a whole) at the end of each
reporting period.

Management determines the policies and procedures for
both recurring fair value measurement, such as derivative
instruments and unquoted financial assets measured at fair
value, and for non-recurring measurement, such as assets
held for disposal in discontinued operations.

5.18 Financial Instruments

Initial recognition and subsequent measurement

A financial instrument is any contract that gives rise to a
financial asset of one entity and a financial liability or equity
instrument of another entity.

i. Financial assets

Initial recognition and measurement

Financial assets are classified, at initial recognition, as
subsequently measured at amortized cost, fair value
through other comprehensive income (OCI), and fair
value through profit or loss.

The classification of financial assets at initial recognition
depends on the financial asset’s contractual cash flow
characteristics and the Company’s business model for
managing them. With the exception of trade receivables
that do not contain a significant financing component or for
which the Company has applied the practical expedient,
the Company initially measures a financial asset at its fair
value plus, in the case of a financial asset not at fair value
through profit or loss, transaction costs. Trade receivables
that do not contain a significant financing component or for
which the Company has applied the practical expedient
are measured at the transaction price.

In order for a financial asset to be classified and
measured at amortised cost or fair value through OCI, it
needs to give rise to cash flows that are ‘solely payments
of principal and interest (SPPI)’ on the principal amount
outstanding. This assessment is referred to as the SPPI
test and is performed at an instrument level. Financial
assets with cash flows that are not SPPI are classified
and measured at fair value through profit or loss.

The Company’s business model for managing financial
assets refers to how it manages its financial assets
in order to generate cash flows. The business model
determines whether cash flows will result from collecting
contractual cash flows, selling the financial assets,
or both. Financial assets classified and measured at
amortised cost are held within a business model with
the objective to hold financial assets in order to collect

contractual cash flows while financial assets classified
and measured at fair value through OCI are held within
a business model with the objective of both holding to
collect contractual cash flows and selling.

Subsequent measurement

For purposes of subsequent measurement, financial
assets are classified in four categories:

• Financial assets at amortised cost
(debt instruments)

• Financial assets at fair value through OCI
with recycling of cumulative gains and losses
(debt instruments)

• Financial assets designated at fair value through
OCI with no recycling of cumulative gains and
losses upon derecognition (equity instruments)

• Financial assets at fair value through profit or loss

Financial assets at amortised cost (debt instruments)

Financial assets at amortised cost are subsequently
measured using the effective interest (EIR) method
and are subject to impairment. Gains and losses
are recognised in profit or loss when the asset is
derecognised, modified or impaired.

The Company’s financial assets at amortised cost
include trade receivables, loan to subsidiary, joint
ventures, and associates, and loans to employees.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are
carried in the statement of financial position at fair
value with net changes in fair value recognised in the
statement of profit or loss.

This category includes derivative instruments and
listed equity investments which the Company had not
irrevocably elected to classify at fair value through OCI.
Dividends on listed equity investments are recognised
as other income in the statement of profit or loss when
the right of payment has been established.

A derivative embedded in a hybrid contract, with a
financial liability or non-financial host, is separated from
the host and accounted for as a separate derivative if:
the economic characteristics and risks are not closely
related to the host; a separate instrument with the
same terms as the embedded derivative would meet
the definition of a derivative; and the hybrid contract
is not measured at fair value through profit or loss.

Embedded derivatives are measured at fair value
with changes in fair value recognised in profit or loss.
Reassessment only occurs if there is either a change
in the terms of the contract that significantly modifies
the cash flows that would otherwise be required or a
reclassification of a financial asset out of the fair value
through profit or loss category.

Derecognition

A financial asset (or, where applicable, a part of a
financial asset or part of a group of similar financial
assets) is primarily derecognised i.e. removed from
the Company’s statement of financial position) when:

• The rights 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.

When the Company has transferred its rights to receive
cash flows from an asset or has entered into a pass¬
through arrangement, it evaluates if, and to what extent,
it has retained the risks and rewards of ownership. When
it has neither transferred nor retained substantially all
of the risks and rewards of the asset, nor transferred
control of the asset, the Company continues to recognise
the transferred asset to the extent of its continuing
involvement. In that case, the Company also recognises
an associated liability. The transferred asset and the
associated liability are measured on a basis that reflects
the rights and obligations that the Company has retained.

Continuing involvement that takes the form of a
guarantee over the transferred asset is measured at
the lower of the original carrying amount of the asset
and the maximum amount of consideration that the
Company could be required to repay.

Impairment

The Company recognises an allowance for expected
credit losses (ECLs) for all debt instruments not held
at fair value through profit or loss. ECLs are based on
the difference between the contractual cash flows due

in accordance with the contract and all the cash flows
that the Company expects to receive, discounted at
an approximation of the original effective interest rate.
The expected cash flows will include cash flows from
the sale of collateral held or other credit enhancements
that are integral to the contractual terms.

ECLs are recognised in two stages. For credit
exposures for which there has not been a significant
increase in credit risk since initial recognition, ECLs
are provided for credit losses that result from default
events that are possible within the next 12-months (a
12-month ECL). For those credit exposures for which
there has been a significant increase in credit risk since
initial recognition, a loss allowance is required for credit
losses expected over the remaining life of the exposure,
irrespective of the timing of the default (a lifetime ECL).

For trade receivables and contract assets, the
Company applies a simplified approach in calculating
ECLs. Therefore, the Company does not track changes
in credit risk, but instead recognises a loss allowance
based on lifetime ECLs at each reporting date.

For debt instruments at fair value through OCI, the
Company applies the low credit risk simplification. At
every reporting date, the Company evaluates whether
the debt instrument is considered to have low credit risk
using all reasonable and supportable information that
is available without undue cost or effort. In making that
evaluation, the Company reassesses the risk of the debt
instruments. In addition, the Company considers that
there has been a significant increase in credit risk when
contractual payments are more than 30 days past due.

The Company considers a financial asset in default
when contractual payments are 90 days past due.
However, in certain cases, the Company may also
consider a financial asset to be in default when internal
or external information indicates that the Company
is unlikely to receive the outstanding contractual
amounts in full before taking into account any credit
enhancements held by the Company. A financial asset
is written off when there is no reasonable expectation
of recovering the contractual cash flows.

ii. Financial liabilites

Initial recognition and measurement

Financial liabilities are classified, at initial recognition,
as financial liabilities at fair value through profit or loss,
borrowings, payables, or as derivatives designated as
hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognised initially at fair
value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs.

The Company’s financial liabilities include trade and
other payables, loans and borrowings including bank
overdrafts, and derivative financial instruments.

Subsequent measurement

For purposes of subsequent measurement, financial
liabilities are classified in two categories:

• Financial liabilities at fair value through profit or loss

• Financial liabilities at amortised cost (loans
and borrowings)

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss
include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair
value through profit or loss.

Financial liabilities are classified as held for trading if they
are incurred for the purpose of repurchasing in the near
term. This category also includes derivative financial
instruments entered into by the Company that are not
designated as hedging instruments in hedge relationships
as defined by accounting standards. Separated
embedded derivatives are also classified as held for
trading unless they are designated as effective hedging.

Gains or losses on liabilities held for trading are
recognised in the statement of profit or loss

Financial liabilities designated upon initial recognition
at fair value through profit or loss are designated at
the initial date of recognition, and only if the criteria in
accounting standards are satisfied.

Financial liabilities at amortised cost

After initial recognition, interest-bearing borrowings and
instruments are subsequently measured at amortised cost
using the EIR method. Gains and losses are recognised
in profit or loss when the liabilities are derecognised as
well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that
are an integral part of the EIR. The EIR amortisation is
included as finance costs in the statement of profit or loss.

This category generally applies to interest-bearing
borrowings and instruments.

Derecognition

A financial liability is derecognised when the obligation
under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced
by another from the same lender on substantially
different terms, or the terms of an existing liability
are substantially modified, such an exchange or
modification is treated as the derecognition of the
original liability and the recognition of a new liability.
The difference in the respective carrying amounts is
recognised in the statement of profit or loss.

iii. Off setting of financial instruments

Financial assets and financial liabilities are offset and
the net amount is reported in the standalone financial
statement of financial position if there is a currently
enforceable legal right to offset the recognised amounts
and there is an intention to settle on a net basis, to realise
the assets and settle the liabilities simultaneously.

iv. Derivative financial instruments and hedge accounting

Initial recognition and subsequent measurement

The Company uses derivative financial instruments, such
as forward currency contracts and interest rate swaps, to
hedge its foreign currency risks and interest rate risks,
respectively. Such derivative financial instruments are
initially recognised at fair value on the date on which a
derivative contract is entered into and are subsequently
remeasured at fair value. Derivatives are carried as
financial assets when the fair value is positive and as
financial liabilities when the fair value is negative.

For the purpose of hedge accounting, hedges
are classified as:

• Fair value hedges when hedging the exposure to
changes in the fair value of a recognised asset
or liability or an unrecognised firm commitment

• Cash flow hedges when hedging the exposure to
variability in cash flows that is either attributable
to a particular risk associated with a recognised
asset or liability or a highly probable forecast
transaction or the foreign currency risk in an
unrecognised firm commitment

• Hedges of a net investment in a foreign operation

At the inception of a hedge relationship, the
Company formally designates and documents the
hedge relationship to which it wishes to apply hedge
accounting and the risk management objective and
strategy for undertaking the hedge.

The documentation includes identification of the hedging
instrument, the hedged item, the nature of the risk being
hedged and how the Company will assess whether the
hedging relationship meets the hedge effectiveness
requirements (including the analysis of sources of hedge
ineffectiveness and how the hedge ratio is determined).

A hedging relationship qualifies for hedge accounting if
it meets all of the following effectiveness requirements:

• There is ‘an economic relationship’ between the
hedged item and the hedging instrument.

• The effect of credit risk does not ‘dominate
the value changes’ that result from that
economic relationship.

• The hedge ratio of the hedging relationship is
the same as that resulting from the quantity of the
hedged item that the Company actually hedges
and the quantity of the hedging instrument that
the Company actually uses to hedge that quantity
of hedged item.

Hedges that meet all the qualifying criteria for hedge
accounting are accounted for, as described below:

Fair value hedges

The change in the fair value of a hedging instrument
is recognised in the statement of profit or loss as other
expense. The change in the fair value of the hedged item
attributable to the risk hedged is recorded as part of the
carrying value of the hedged item and is also recognised
in the statement of profit or loss as other expense.

For fair value hedges relating to items carried at amortised
cost, any adjustment to carrying value is amortised
through profit or loss over the remaining term of the hedge
using the EIR method. The EIR amortisation may begin as
soon as an adjustment exists and no later than when the
hedged item ceases to be adjusted for changes in its fair
value attributable to the risk being hedged.

If the hedged item is derecognised, the unamortised
fair value is recognised immediately in profit or loss.

When an unrecognised firm commitment is designated
as a hedged item, the subsequent cumulative change
in the fair value of the firm commitment attributable to the
hedged risk is recognised as an asset or liability with a
corresponding gain or loss recognised in profit or loss.

v Dividend and interest income

a. Dividend income from investments is recognised
when the shareholder’s right to receive payment has
been established (provided that it is probable that
the economic benefits will flow to the Company and
the amount of income can be measured reliably).

b. Interest income from a financial asset is recognised
when it is probable that the economic benefits will
flow to the Company and the amount of income
can be measured reliably. Interest income is
accrued on a time basis, by reference to the
principal outstanding and at the effective interest
rate applicable, which is the rate that exactly
discounts estimated future cash receipts through
the expected life of the financial asset to that
asset’s net carrying amount on initial recognition.

6.1 Recent accounting pronouncements

The Ministry of Corporate Affairs vide notification dated
9 September 2024 and 28 September 2024 notified
the Companies (Indian Accounting Standards) Second
Amendment Rules, 2024 and Companies (Indian
Accounting Standards) Third Amendment Rules, 2024,
respectively, which amended/ notified certain accounting
standards (see below), and are effective tor annual repoting
periods beginning on or after April 01,2024:

- Ind AS - 117 Insurance Contracts and

- Lease Liability in Sale and Leaseback —
Amendments to Ind AS 116

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

6.2 Significant Judgements and Key sources of
Estimation in applying Accounting Policies

Information about significant judgments and key sources of
estimation made in applying accounting policies that have
the most significant effects on the amounts recognized in
the financial statements is included in the following notes:

a. Recognition of Deferred Tax Assets: The extent to
which deferred tax assets can be recognized is based
on an assessment of the probability of the Company’s
future taxable income against which the deferred
tax assets can be utilized. In addition, significant

judgment is required in assessing the impact of any
legal or economic limits.

b. Useful lives of depreciable/amortizable assets
(tangible and intangible): Management reviews its
estimate of the useful lives of depreciable/amortizable
assets at each reporting date, based on the expected
utility of the assets. Uncertainties in these estimates
relate to actual normal wear and tear that may change
the utility of plant and equipment.

c. Classification of Leases: The Company enters
into leasing arrangements for various assets. The
classification of the leasing arrangement as a finance
lease or operating lease is based on an assessment
of several factors, including, but not limited to, transfer
of ownership of leased asset at end of lease term,
lessee’s option to purchase and estimated certainty of
exercise of such option, proportion of lease term to the
asset’s economic life, proportion of present value of
minimum lease payments to fair value of leased asset
and extent of specialized nature of the leased asset.

d. Employee benefit: Employee benefit obligations are
measured on the basis of actuarial assumptions
which include mortality and withdrawal rates as well as
assumptions concerning future developments in discount
rates, medical cost trends, anticipation of future salary
increases, and the inflation rate. The Company considers
that the assumptions used to measure its obligations are
appropriate. However, any changes in these assumptions
may have a material impact on the resulting calculations.

e. Provisions and Contingencies: The assessments undertaken
in recognizing provisions and contingencies have been

made in accordance with Indian Accounting Standards (Ind
AS) 37, ‘Provisions, Contingent Liabilities, and Contingent
Assets’. The evaluation of the likelihood of the contingent
events is applied best judgment by management regarding
the probability of exposure to potential loss.

f. Impairment of financial assets: The Company reviews its
carrying value of investments carried at amortized cost
annually, or more frequently when there is an indication
of impairment. If the recoverable amount is less than its
carrying amount, the impairment loss is accounted for.

g. Fair value measurement of Financial Instruments:
When the fair values of financial assets and financial
liabilities recorded in the balance sheet cannot be
measured based on quoted prices in active markets,
their fair value is measured using valuation techniques
including the Discounted Cash Flow model. The input
to these models is taken from observable markets
where possible, but where this is not feasible, a
degree of judgment is required in establishing fair
values. Judgments include considerations of inputs
such as liquidity risk, credit risk, and volatility.

h. Warranty : Warranty Provision is measured at
discounted present value using a pre-tax discount rate
that reflects the current market assessments of the time
value of money and the risks specific to the liability.
Product warranty liability and warranty expenses are
recorded at the time the product is sold, if the claims
of the customers under warranty are probable, and the
amount can be reasonably estimated.

The Board of Directors have recommended a final dividend of 400% (INR 8.00/- per Equity Share of H 2/- each) for the financial
year 2024-2025 subject to the approval of the shareholders in the ensuing Annual General Meeting of the Company.

f. Shares allotted as fully paid pursuant to contract(s) without payment being received in cash during the period of five years
immediately preceding the reporting date- Nil

g. Shares held by Holding or ultimate Holding company

The Company does not have any Holding Company.

h. Shares reserved for issue under employee stock option

For details of shares reserved for issue and shares issued under the Employee Stock Option Plan (ESOP) of the Company, see
note 50. These options are granted to the employees subject to cancellation under circumstance of his cessation of employment
with the Company on or before the vesting date.

Notes:

a. General reserve:

The Company had transferred a part of the net profit of the Company to general reserve in earlier years. It also includes amount
transferred to general reserve for share option exercised during the year and earlier years.

b. Securities premium

The amount received in excess of the face value of the equity shares issued by the Company is recognised in securities premium.
It can be used for issue of bonus shares, write- off of equity related expenses etc.

c. Capital redemption reserve:

The reserve has been created by buy back of equity shares and fully convertible cumulative participatory preference shares.

22 Borrowings (Contd..)

b. Nature of Securities

Term loan-1

- Secured against first pari - passu charge on all movable fixed assets of the company (except those charged exclusively
to other lenders)

- exclusive charge on movable fixed assets of unit located at plot no. 262 M, Industrial Area, Central Hope Town,
Selaqui, Dehradun, Uttarakhand (both present and future)

- first pari passu charged over movable fixed assets of the unit located at C-3/1, Selaqui Industrial Area
Dehradun, Uttarakhand

- exclusive charge on immovable property located at Plot No C-2/1, UPSIDC Industrial Area, Selaqui, vikas Nagar,
Dehradun, Uttarakhand

Term loan-2

- secured against first pari passu charge on all movable fixed assets of the company (except those exclusively charged
with other banks).

- exclusive charge on immovable fixed assets of the company located at Khasra No. 1050/2, 1050/6, 1050/7, 1050/8,
1050/9 situated at Mauza East Hope Town, Tehsil Vikas Nagar, Pargana- Pachwa Doon, District - Dehradun (Uttrakhand)

II Term loan from Tata Capital Housing Finance Limited

Rate of interest

Rate of interest is bearing of 12.25% p.a.

Repayment term

The loan had been fully repaid during the year.

Security

Loan is secured by mortgage of the related asset Unit no. 2, TH-1, Rajpura Dehradun and now, charge stand released.

i. The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are
sufficient to meet the obligations related to lease liabilities as and when they fall due.

ii. Lease contracts entered by the Company majorly pertains to buildings taken on lease to conduct its business in
the ordinary course. The Company does not have any lease restrictions and commitment towards variable rent as
per the contract.

iii. 6% to 9% of interest rate implicit in the lease or lessee’s incremental borrowing rate used for the measurement of
lease liabilities.

III Disclosures for operating leases other than leases coverd in Ind AS 116

i. The Company has entered into cancellable operating leases and transactions for leasing of accommodation for factory
building, service centre, office space, godown, transit house etc. The tenure of lease is generally one year.

Terms of lease include operating terms for renewal, increase in rent in future period and terms of cancellation.

ii. The Company has given its properties on lease to one party. Tenure of leases is 14 years. Terms of the lease include
operating term for renewal, increase in rent in future period and term of cancellation have a notice period of 3 months,
accordingly no lease obligation have been disclosed.

Lease expenses/income recognised during the year

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation
technique. In estimating the fair value of an asset or a liability, the Company takes in to account the characteristics of the asset or
liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement
date. Fair value for measurement and/or disclosure purposes in these standalone financial statements is determined on such a
basis, except for share-based payment transactions that are within the scope of Ind AS 102, leasing transactions that are within
the scope of Ind AS 116, and measurements that have some similarities to fair value but are not fair value, such as net realisable
value in Ind AS 2 or value in use in Ind AS 36

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to
which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurements
in its entirety, which are described as follows:

Level I: includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds,
ETFs and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the
stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.

Level II: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the
counter derivatives) is determined using valuation techniques which maximize the use of observable market data and rely as little
as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument
is included in level 2.

Level III: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This
is the case for unlisted equity securities, contingent consideration and indemnification asset are included in level 3.

The management assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current
liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

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

i. Long-term fixed-rate and variable-rate receivables/borrowings are evaluated by the Company based on parameters such
as interest rates, specific country risk factors, individual creditworthiness of the customer and the risk characteristics
of the financed project. Based on this evaluation, allowances are taken into account for the expected credit losses of
these receivables.

ii. The fair values of the quoted notes and bonds are based on price quotations at the reporting date. The fair value of unquoted
instruments, loans from banks and other financial liabilities, obligations under finance leases, as well as other non-current
financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms,
credit risk and remaining maturities. In addition to being sensitive to a reasonably possible change in the forecast cash flows
or the discount rate, the fair value of the equity instruments is also sensitive to a reasonably possible change in the growth
rates. The valuation requires management to use Unobservable inputs in the model, of which the significant unobservable
inputs are disclosed in the tables below. Management regularly assesses a range of reasonably possible alternatives for
those significant unobservable inputs and determines their impact on the total fair value.

iii. The fair values of the remaining fair value through other comprehensive income "FVTOCI" financial assets are derived from
quoted market prices in active markets.

iv. The Company enters into derivative financial instruments with various counterparties, principally financial institutions with
investment grade credit ratings. Interest rate swaps, foreign exchange forward contracts and commodity forward contracts
are valued using valuation techniques, which employs the use of market observable inputs. The most frequently applied
valuation techniques include forward pricing and swap models, using present value calculations. The models incorporate
various inputs including the credit quality of counterparties, foreign exchange spot and forward rates, yield curves of
the respective currencies, currency basis spreads between the respective currencies, interest rate curves and forward
rate curves of the underlying commodity. All derivative contracts are fully cash collateralised, thereby eliminating both
counterparty and the Company’s own non-performance risk. As at 31 March 2025, the marked-to-market value of derivative
asset positions is net of a credit valuation adjustment attributable to derivative counterparty default risk. The changes in
counterparty credit risk had no material effect on the hedge effectiveness assessment for derivatives designated in hedge
relationships and other financial instruments recognised at fair value.

The Company’s Financial Risk Management is an integral part of how to plan and execute its business strategies. The Company
is exposed to Market Risk, Credit Risk & liquidity risk.

The Company’s senior management oversees the management of these risks. The senior professionals working to manage
the financial risks and the appropriate financial risk governance framework for the Company are accountable to the Board of
Directors and Audit Committee. This process provides assurance to Company’s senior management that the Company’s financial
risk-taking activities are governed by appropriate policies and procedures and that financial risk are identified, measured and
managed in accordance with Company policies and Company risk objective.

d. Financial risk management

The Company's senior management oversees the risk management framework and developing and monitoring the Company’s
risk management policies. The risk management policies are established to ensure timely identification and evaluation of risks,
setting acceptable risk thresholds, identifying and mapping controls against these risks, monitor the risks and their limits, improve
risk awareness and transparency. Risk management policies and systems are reviewed regularly to reflect changes in the
market conditions and the Company’s activities to provide reliable information to the Management and the Board to evaluate the
adequacy of the risk management framework in relation to the risk faced by the Company.

The risk management policies aims to mitigate the following risks arising from the financial instruments:

- Market risk

- Credit risk

- Liquidity risk

A Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in the
market prices. The Company is exposed in the ordinary course of its business to risks related to changes in foreign currency
exchange rates, commodity prices and interest rates.

The Company seeks to minimize the effects of these risks by using derivative financial instruments to hedge risk exposures.
The use of financial derivatives is governed by the Company’s policies approved by the Board of Directors, which provide
written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative
financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed
by the Management and the internal auditors on a continuous basis. The Company does not enter into or trade financial
instruments, including derivatives for speculative purposes.

I. Currency risk

a. The operation of the Company give exposure to foreign exchange risk arising from foreign currency transactions
and foreign currency loans, primarily with respect to the USD, CNY and JPY. Foreign exchange risk arises from
future commercial transactions and recognised assets and liabilities denominated in a currency that is not the
company’s functional currency (INR). The risk is measured through a forecast of highly probable foreign currency
cash flows. The Company hedge the foreign currency exposure. The objective of the hedges is to minimize the
volatility of the INR cash flows of highly probable forecast transactions.

b. The Company uses foreign exchange forward contracts to hedge its exposure in foreign currency risk. The
company measures the forward contract at fair value through profit and loss.

c. The spot component of forward contracts is determined with reference to relevant spot market exchange rates. The
differential between the contracted forward rate and the spot market exchange rate is defined as the forward points.

II. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Company is exposed to interest rate risk because funds are borrowed at both
fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable
interest rate. The borrowings of the Company are principally denominated in rupees with a mix of fixed and floating
rates of interest. The Company has exposure to interest rate risk, arising principally on changes in base lending rate
and LIBOR rates. The Company uses a mix of interest rate sensitive financial instruments to manage the liquidity and
fund requirements for its day-to-day operations like non-convertible bonds and short term loans. The risk is managed
by the Company by maintaining an appropriate mix between fixed and floating rate borrowings.

The provision for loss allowances of trade receivables have been made by the management on the evaluation of trade
receivables. The management at each reporting period made an assessment on recoverability of balances and on the best
estimate basis the provision for loss allowances have been created.

C Liquidity risk management

a. Liquidity risk refers to the risk of financial distress or extraordinary high financing costs arising due to shortage of liquid
funds in a situation where business conditions unexpectedly deteriorate and requiring financing. The Company requires
funds both for short term operational needs as well as for long term capital expenditure growth projects. The Company
generates sufficient cash flow for operations, which together with the available cash and cash equivalents and short
term investments provide liquidity in the short-term and long-term. The Company has established an appropriate
liquidity risk management framework for the management of the Company’s short, medium and long-term funding and
liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking
facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching
the maturity profiles of financial assets and liabilities.

b. The following tables detail the Company's remaining contractual maturity for its non-derivative financial liabilities
with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial
liabilities based on the earliest date on which the Company can be required to pay.

e. Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other
equity reserves attributable to the equity holders of the parent. The primary objective of the Company’s capital management
is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the
requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend
payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing
ratio, which is net debt divided by total capital plus net debt.

The Company monitors its capital using gearing ratio, which is net debt divided to total equity. Net debt includes, interest
bearing loans and borrowings less cash and cash equivalents and current investments.

53 The Board of Directors have recommended a final dividend of 400% (H 8.00/- per Equity Share of H 2/- each) for the financial year
2024-2025 subject to the approval of the shareholders in the ensuing Annual General Meeting of the Company.

54 On 08 July 2024, the Company entered into Share Subscription and Purchase Agreement (“SSPA”) with Aditya Infotech Limited
(“Aditya”) for sale of 9,500,000 fully paid up equity shares of AIL Dixon Technologies Private Limited (‘AIL Dixon’) representing
50% of AIL Dixon equity share capital, the joint venture company. The consideration of this transaction is through exchange of
73,05,805 equity shares of H 1 each, representing 6.50% of Aditya equity share capital on a fully diluted basis and fair value gain
of H 48,950 lakhs on these investments has been recognised during the year ended 31 March, 2025 as exceptional item.

55 Figures for the previous year have been regrouped / rearranged wherever necessary to conform to the current year’s presentation.

56 Other Statutory Information

(i) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period

(ii) No penalties were imposed by the regulator during the financial year ended 31 March, 2025.

(iii) There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under
the Income Tax Act, 1961.

(iv) The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(v) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company
for holding any Benami property.

(vi) The Company has not revalued its property, plant and equipment (including right-of-use assets) or other intangible assets
during the current or previous year.

(vii) 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:

a. 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

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

(viii) 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:

a. 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

b. provide any guarantee, security or the like on behalf of the Ultimate Beneficiary

(ix) The Company have not been declared wilful defaulter by any bank or financial institution or government or any

government authority.

(x) The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Act read with
Companies (Restriction on number of Layers) Rules, 2017.

(xi) The Company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.

(xii) The title deeds of all the immovable properties (other than properties where the company is the lessee and the lease

agreements are duly executed in favour of the lessee), are held in the name of the company.

57 There are no subsequent event observed after the reporting period which have material impact on the Company's operation.

In terms of our report attached For and on behalf of the Board of Directors

For S. N. Dhawan & CO LLP Dixon Technologies (India) Limited

Chartered Accountants

Firm's Registration No. 000050N/N500045

Sunil Vachani Atul B. Lall

Chairman Vice Chairman and Managing Director

Rahul Singhal Saurabh Gupta Ashish Kumar

Partner Chief Financial officer Company Secretary

Membership No. 096570

Place: New Delhi Place: New Delhi Place: New Delhi

Date: 20 May, 2025 Date: 20 May, 2025 Date: 20 May, 2025