o) Provisions and contingencies

A provision is recognised when the Company has a present
obligation (legal or constructive) as a result of a past event,
and is probable that an outflow of resources embodying

economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of
the obligation.

When the Company expects some or all of a provision to be
reimbursed, the reimbursement is recognised as a separate
asset, but only when the reimbursement is virtually certain.
The expense relating to a provision is presented in the
Statement of Profit and Loss net of any reimbursement.

If the effect of the time value of money is material, provisions
are discounted using a current pre-tax rate that reflects,
when appropriate, 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 in the
Statement of Profit and Loss.

A contingent liability is a possible obligation that arises
from past events whose existence will be confirmed by the
occurrence or non-occurrence of one or more uncertain
future events beyond the control of the Company or a present
obligation that is not recognized because it is not probable
that an outflow of resources will be required to settle the
obligation. A contingent liability also arises where there
is a liability that cannot be recognized because it cannot
be measured reliably. The Company does not recognize
a contingent liability but discloses its existence in the
financial statements.

Contingent assets are not recognised in financial statements,
unless they are virtually certain. However, contingent assets
are disclosed where inflow of economic benefits are probable.

Provisions, contingent liabilities and contingent assets are
reviewed at each balance sheet date.

p) Fair value measurement

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

• 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

• 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.

For the purpose of fair value disclosures, the Company has
determined classes of assets and liabilities based on the
nature, characteristics and risks of the asset or liability and
the level of the fair value hierarchy.

q) Financial instruments

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.

• Initial recognition and measurement

Financial instruments are initially recognised when the
entity becomes party to the contract.

Financial instruments are measured initially at fair value
adjusted for transaction costs that are directly attributable
to the origination of the financial instrument where
financial instruments not classified at fair value through
profit or loss. Transaction costs of financial instruments
which are classified as fair value through profit or loss are
expensed in the Statement of Profit and Loss.

• Subsequent measurement of financial assets

For the purposes of subsequent measurement, the financial
assets are classified in the following categories based on
the Company's business model for managing the financial
assets and the contractual terms of cash flows:

• those to be measured subsequently at fair value;
either through OCI or through profit or loss

• those measured at amortised cost

For assets measured at fair value, changes in fair value
will either be recorded in the Statement of Profit and
Loss or OCI. For investments in debt instruments, this
will depend on the business model in which investment
is held. For investments in equity instruments, this
will depend on whether the Company has made an
irrevocable election at the time of initial recognition to
account for equity investment at fair value through OCI.

The Company reclassifies debt investments when
and only when its business model for managing those
assets changes.

Debt instruments at amortised cost

A ‘debt instrument' is measured at the amortised cost if
both the following conditions are satisfied:

• The asset is held within a business model
whose objective is to hold assets for collecting
contractual cash flows, and

• The contractual terms of the asset give rise on
specified dates to cash flows that are Solely
Payments of Principal and Interest (SPPI) on the
principal amount outstanding.

A gain or loss on a debt investment that is subsequently
measured at amortised cost and is not part of
hedging relationship is recognised in the Statement
of Profit and Loss when the asset is derecognised or
impaired. Interest income from these financial assets
is included in finance income using Effective Interest
Rate (EIR) method.

Equity investments

All equity investments in the scope of Ind AS 109
Financial Instruments are measured at fair value.
Equity instruments which are held for trading are
classified as at FVTPL. For all other equity instruments,
the Company may make an irrevocable election to
recognise subsequent changes in the fair value in OCI.
The Company makes such election on an instrument-
by-instrument basis. The classification is made on
initial recognition and is irrevocable.

If the Company decides to classify an equity instrument
as at FVTOCI, then all fair value changes on the
instrument, excluding dividends, are recognized in
OCI. There is no recycling of the amounts from OCI
to the Statement of Profit and Loss, even on sale of
equity instrument.

Equity instruments included within the FVTPL category
are measured at fair value with all changes recognised
in the Statement of Profit and Loss.

• Subsequent measurement of financial liabilities

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

• those to be measured subsequently at fair value
through profit or loss (FVTPL)

• those measured at amortised cost

Following financial liabilities will be
classified under FVTPL:

• Financial liabilities held for trading

• Derivative financial liabilities

• Liability designated to be measured under FVTPL

All other financial liabilities are classified at
amortised cost.

For financial liabilities measured at fair value,
changes in fair value will recorded in the Statement
of Profit and Loss except for the fair value changes
on account of own credit risk are recognised in Other
Comprehensive Income (OCI).

Interest expense on financial liabilities classified under
amortised cost category are measured using Effective
Interest Rate (EIR) method and are recognised in
Statement of Profit and Loss.

• Derecognition of financial instruments

The Company derecognises a financial asset when the
contractual rights to the cash flows from the financial
asset expire, or it transfers the rights to receive the
contractual cash flows in a transaction in which
substantially all of the risks and rewards of ownership
of the financial asset are transferred or in which the
Company neither transfers nor retain substantially all of
the risks and rewards of ownership and does not retain
control of the financial asset.

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 and Loss.

• Impairment of financial assets

The Company applies Expected Credit Loss (ECL) model
for measurement and recognition of impairment loss on
the financial assets mentioned below:

• Financial assets that are debt instrument and are
measured at amortised cost

• Financial assets that are debt instruments and are
measured as at FVOCI

• Trade receivables

The impairment methodology applied depends on
whether there has been a significant increase in credit
risk. Details how the Company determines whether
there has been a significant increase in credit risk is
explained in the respective notes.

For impairment of trade receivables, the Company
chooses to apply practical expedient of providing
expected credit loss based on provision matrix and does
not require the Company to track changes in credit risk.
Percentage of ECL under provision matrix is determined
based on historical data as well as futuristic information.

• Derivative financial instruments

Initial measurement and subsequent measurement

The Company uses derivative financial instruments,
such as forward currency contracts to hedge foreign
currency risks. Such derivative financial instruments
are initially recognised at fair value on the date on
which a derivative contract is entered into and are
subsequently re-measured 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. Any gains or losses arising from changes
in the fair value of derivatives are recognised in the
Statement of Profit and Loss.

r) Dividends

The final dividend on shares is recorded as liability on the
date of approval of shareholders, and the interim dividends
are recorded as liability on the date of declaration by the
Company's Board of Directors.

s) Earnings per share (EPS)

Basic EPS is calculated by dividing the profit for the year
attributable to equity holders of the Company by the weighted
average number of equity shares outstanding during the
financial year, adjusted for bonus elements in equity shares
issued during the year and excluding treasury shares.

Diluted EPS adjust the figures used in the determination of
basic EPS to consider

• The after-income tax effect of interest and other
financing costs associated with dilutive potential
equity shares, and

• The weighted average number of additional equity
shares that would have been outstanding assuming the
conversion of all dilutive potential equity shares.

t) Operating Segment

Operating segments are reported in a manner consistent
with the internal reporting provided to the Chief Operating
Decision-Maker (CODM). The CODM, who is responsible

for allocating resources and assessing performance of the
operating segments, has been identified as the Managing
Director who makes strategic decisions.

Identification of Segments

Operating segments are reported in a manner consistent
with the internal reporting provided to the Chief Operating
Decision-Maker (CODM). The CODM, who is responsible
for allocating resources and assessing performance of the
operating segments, has been identified as the Managing
Director who makes strategic decisions.

u) Government Grant

Grants from the government are recognised at their fair
value where there is a reasonable assurance that the grant
will be received and the Company will comply with all
attached conditions.

Government grants relating to income are deferred and
recognised in the Statement of Profit and Loss over the
period necessary to match them with the costs that they are
intended to compensate and presented within other income.

4) SIGNIFICANT ACCOUNTING JUDGMENTS,
ESTIMATES AND ASSUMPTIONS

The preparation of the financial statements in conformity
with Ind AS, requires the management to make judgments,
estimates and assumptions that affect the amounts of
revenue, expenses, current assets, non-current assets,
current liabilities, non-current liabilities, disclosure of the
contingent liabilities and notes to accounts at the end
of each reporting period. Actual results may differ from
these estimates.

Judgments

In the process of applying the Company's accounting policies,
management have made the following judgements, which
have the most significant effect on the amounts recognised
in the financial statements:

Operating segment

Ind AS 108 Operating Segments requires Management
to determine the reportable segments for the purpose of
disclosure in financial statements based on the internal
reporting reviewed by the Managing Director being the Chief
Operating Decision Maker (CODM) to assess performance and
allocate resources. The standard also requires Management
to make judgments with respect to recognition of segments.
Accordingly, the Company recognizes Iron Castings, Tube and
Steel Segment as its three segments.

Contingent liability

The Company has received various orders and notices from
different Government authorities and tax authorities in
respect of direct taxes and indirect taxes. The outcome of
these matters may have a material effect on the financial
position, results of operations or cash flows. Management
regularly analyses current information about these matters
and discloses the information relating to contingent liability.
In making the decision regarding the need for creating loss
provision, management considers the degree of probability
of an unfavorable outcome and the ability to make a
sufficiently reliable estimate of the amount of loss. The
filing of a suit or formal assertion of a claim against the
Company or the disclosure of any such suit or assertions,
does not automatically indicate that a provision of a loss may
be appropriate.

Estimates and assumptions

The key assumptions concerning the future and other key
sources of estimation uncertainty at the reporting date, that
have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next
financial year, are described below. The Company based its
estimates and assumptions on parameters available when the
financial statements are prepared. Existing circumstances
and assumptions about future developments, however, may
change due to market conditions or circumstances arising
that are beyond the control of the Company. Such changes
are reflected in the assumptions when they occur.

Defined benefit obligation

The cost of the defined benefit plans and other post¬
employment benefits and the present value of the obligations
are determined using actuarial valuation. An actuarial
valuation involves making various assumptions that may
differ from actual developments in the future. These include
the determination of the discount rate, future salary increases,
mortality rates and future post-retirement medical benefit
increase. Due to the complexities involved in the valuation
and its long-term nature, a defined benefit obligation is highly
sensitive to changes in these assumptions. All assumptions
are reviewed at each reporting date.

The parameter most subject to change is the discount rate.
In determining the appropriate discount rate, management
considers the interest rates of government bonds in
currencies consistent with the currencies of the post¬
employment benefit obligations and extrapolated as needed
along the yield curve to correspond with the expected term of
the defined benefit obligation.

The mortality rate is based on publicly available mortality
tables. Those mortality tables tend to change only at intervals
in response to demographic changes. Future salary increases
are based on the expected future inflation rates for the country.

Further details about defined benefit obligations are provided
in the respective note.

Deferred Tax

Deferred tax assets are recognised for all deductible
temporary differences including the carry forward of unused
tax credits and any unused tax losses. Deferred tax assets are
recognised to the extent that it is probable that taxable profit
will be available against which the deductible temporary

differences, and the carry forward of unused tax credits are
unused tax losses can be utilized.

Useful lives of Property, plant and equipment

Useful lives of property, plant and equipment are dependent
upon an assessment of both the technical lives of the
assets and also their likely economic lives based on various
internal and external factors including relative efficiency and
operating costs. The depreciable lives are reviewed annually
using the best information available to the Management.

Estimation and underlying assumptions are reviewed
on ongoing basis. Revisions to estimates are
recognised prospectively.

19. OTHER EQUITY (Contd..)

Description of the purposes of reserves within equity
General Reserve

Under the erstwhile Indian Companies Act, 1956, a general reserve was created through an annual transfer of net income in accordance
with applicable regulations.

Securities premium

The amount in the Securities premium account represents the additional amount paid by the shareholders for the issued shares in excess
of the face value of those shares.

Share options outstanding account

The company offers ESOP, under which, options to subscribe for the Company's share have been granted to specified senior management
employees. The Share options outstanding account balance represents fund created as per the companie's ESOP scheme.

Equity instruments through other comprehensive income

This represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through other
comprehensive income, under an irrevocable option, net of amounts reclassified to retained earnings when such assets are disposed off.

Capital reserve arising out of business combination

Capital reserve represents the gains of capital nature which mainly include the excess of value of net assets acquired over consideration
paid by the Company for business combination transactions and the same is not available for distribution as dividends.

Capital reserve arising out of Merger

This represents capital reserve on business combination which arises on transfer of business between entities under common control.

38.1 The Company and its Subsidiary Company, ISMT Enterprises S.A., Luxembourg has invested H 48.43 Crores in Structo Hydraulics
AB, Sweden (SHAB). The Company has received approval from regulatory authorities for conversion into equity of an amount of
H 33.33 Crores (USD 5 Million) due from SHAB, out of which H 16.75 Crores had been converted into equity. SHAB's business was
facing significant challenges due to the Eurozone crisis and ongoing slowdown in the European market, leading to a working capital
crisis. After exploring various options including sale, revival, or liquidation, the management has decided to file bankruptcy liquidation
for both SHAB and ISMT EUROPE. Accordingly, Liquidators were appointed on 12th Feb '24 and 5th Mar '24 respectively, following
multiple rounds of internal and external discussions. Based on bankruptcy liquidation filed by the company in the previous year,
H 21.08 Crores was provided towards net assets due to loss of control and disclosed as an exceptional item.

38.2 Tridem Port and Power Company Private Limited (TPPCPL), a wholly owned subsidiary, along with its subsidiaries had proposed to set
up a thermal power project and captive port in Tamil Nadu. TPPCPL had obtained the approvals for the projects including acquisition
of land, but no construction activity had commenced. The Government of Tamil Nadu had granted various permissions to TPPCPL
for setting up the aforesaid port and power project. Subsequently, the Government had withdrawn permissions so given in earlier
years which was challenged by the company in high court by way of writ petitions. The Hon'ble Madras High Court had dismissed
all the said Writ Petitions filed by TPPCPL & its subsidiaries. TPPCPL had challenged the above-mentioned Order by filing Writ
Petitions before the Division Bench of the High Court, Madras on 06th October 2023. On further hearings, the bench had directed the
Government to file the reply. The Company after assessing the opportunities / business plan, after legal consultation, decided not to
pursue the project. Therefore, during the current quarter the company has withdrawn the abovementioned writ petition filled in High
Court. In accordance with existing laws & regulations, land holding above permissible ceiling is ceased and compulsorily transferred
to Government. Having regards to the no plan and considering the laws and regulations, the company does not expect any return and
conservatively provided for impairment of H 33.93 crores in previous financial year and disclosed as an exceptional item.

38.3 Indian Seamless Inc. (IS Inc), was initially established to facilitate trading activities in the USA market. However, due to commencement
of direct exports of tubes in USA. Market, the requirement of having intermediary entity was not required. Accordingly, our business
activities in IS Inc. were ceased.

During the previous year, the management of the company evaluated prospects of all of its subsidiaries including IS Inc., considering
the cessation of scope and other business aspects, management decided to liquidate the company. Consequently, voluntary
liquidation was filed during the quarter ended March 24 and final closer was achieved on February 29, 2024.

Pursuant to the closure of IS Inc., Investment amounting to H1.69 Crores in IS Inc. was considered irrecoverable and written off after
adjusting final settlement amount received on voluntary liquidation.

Fair value of financial assets and financial liabilities measured at amortised cost :

The management believes that the fair values of non-current financial assets (e.g. loans and others), current financial assets (e.g., cash
and cash equivalents, trade receivables, loans and others excluding other derivative assets), non-current liabilities and current financial
liabilities (e.g. trade payables and other payables excluding derivative liabilities) approximate their carrying amounts.

42. Financial instruments risk management objectives and policies

The Companie's activities exposes it to market risks, credit risks and liquidity risks. In order to minimise any adverse effects on the
financial performance of the Company, derivative financial instruments such as forward foreign exchange contract are entered to hedge
the foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as a trading or speculative purposes.

42. Financial instruments risk management objectives and policies (Contd..)

i. 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 market
prices. Market risk comprises three types of risk interest rate risk, currency risk and other price risk such as equity price risk
and commodity risk. Financial instruments affected by market risk include borrowings, trade and other payables, foreign exchange
forward contracts, security deposit, trade and other receivables, deposits with banks.

The sensitivity analysis in the following sections relate to the position as at reporting dates. The sensitivity of the relevant income
statement item is the effect of the assumed changes in respective market risks. The analyses exclude the impact of movements in
market variables on the carrying values of gratuity and other post retirement obligations and provisions.

The Companie's activities expose it to variety of market risks, including effect of changes in foreign currency exchange rate, interest
rate and commodity price.

a. 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 manages its interest rate risk arising from variable rate borrowings by using interest rate swap contracts.

b. Foreign currency risk

Foreign currency risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign
exchange rate. The Company transacts business in its functional currency and in different foreign currencies. The Company's exposure
to the risk of changes in foreign exchange rates relates primarily to the Company's operating activities, where revenue or expense is
denominated in a foreign currency. The Company manages its foreign currency risk by hedging foreign currency payables using foreign
currency forward contracts. It negotiates the terms of those foreign currency forward contracts to match the terms of the hedged exposure.

c. Commodity price risk

Commodity price risk is a financial risk on the company's financial performance which is affected by the fluctuating prices on
account of global and regional supply / demand. Fluctuations in the prices of commodities mainly depend on market conditions.
The company is subject to fluctuations in prices for the purchase of metallurgical coke, coking coal, iron ore and steel scraps
which are the major input materials for production of pig iron and steel.

The company has an elaborate control procedure for finalising the prices of commodities through approval process from
designated Company officials. Every month the price trend of the materials, demand and supply position and market intelligence
report are reviewed and strategy is adopted before finalising the next consignment/quantities for subsequent months. The
Commodity Price Risk is managed without any hedging of the commodities.

ii. Credit risk

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

42. Financial instruments risk management objectives and policies (Contd..)

a. Trade receivables

Customer credit risk is managed by the Company's established policy, procedures and control relating to customer credit risk
management. Credit exposure risk is mainly influenced by class or type of customers, depending upon their characteristics.
Credit risk is managed through credit approval process by establishing credit limits along with continuous monitoring of credit
worthiness of customers to whom credit terms are granted. Outstanding customer receivables are regularly monitored.

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number
of minor receivables are combined into homogenous category and assessed for impairment collectively. The calculation is
based on actual incurred historical data as well as futuristic information. The Company uses expected credit loss model to
assess the impairment loss. The Company uses a provision matrix to compute the expected credit loss allowance for trade
receivables. The provision matrix takes into account available external and internal credit risk factors.

b. Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company's treasury department in accordance
with the Company's policy. Investments of surplus funds are made only with approved counter parties. The Company monitors
rating, credit spreads and financial strength of its counter parties. Based on ongoing assessment the Company adjust it's
exposure to various counter parties

c. Liquidity risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash flow and collateral obligations
without incurring unacceptable losses. Companie's objective is to, at all time maintain optimum levels of liquidity to meet its
cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management
system. It maintains adequate sources of financing including overdraft, debt from domestic and international banks at optimised
cost. The Company has access to banks, capital and money market across debt, equity and hybrids.

43. Capital management

For the purpose of the Company's capital management, capital includes issued equity capital and all other equity reserves attributable to
the equity holders of the Company. The primary objective of the Company's capital management is to ensure that it maintains a strong
credit rating and healthy capital ratios in order to support its business and maximise shareholder value.

The Company manages its capital structure and makes adjustments to it 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.

No changes were made in the objectives, policies or processes for managing capital during the year ended 31st March, 2025 and
31st March, 2024.

Asset liability matching strategy

The Company has purchased insurance policy, which is basically a year-on-year cash accumulation plan in which the interest
rate is declared on yearly basis and is guaranteed for a period of one year. The Insurance company, as a part of policy rules
makes payment of all gratuity payouts during the year as per policy conditions. The policy, thus, mitigates the liquidity risk.
However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the
Company is exposed to movement in interest rate (in particular, the significant fall in interest rates, which should result in a
increase in liability without corresponding increase in the asset).

46. Stock options scheme - Kirloskar Ferrous Industries Limited
KFIL Employee Stock Option Scheme 2017 :

The Company has introduced employee stock option scheme. This employee equity-settled compensation scheme is known as KFIL
Employee Stock Option Scheme 2017 (“KFIL ESOS 2017/ Scheme”). The employee stock option scheme is approved and authorized by the
Board of Directors. This scheme is designed to provide incentives to specified senior management employees who are in the employment
of the company and director(s), whether wholetime or otherwise, (other than promoters of the company, persons belonging to promoters
group, independent directors and directors holding directly or indirectly more than 10% of the outstanding equity shares of the company).
The specific employees to whom the options would be granted, and their eligibility criteria would be determined by the Nomination and
Remuneration Committee.

Options granted under KFIL ESOS 2017 would vest after 1 (one) year but not later than 4 (four) years from the date of grant of such options.
Options will be vested equally over four years. Vesting of options would be subject to continued employment with the Company and thus
the options would vest essentially on passage of time. In addition to this, the Nomination and Remuneration Committee may also specify
certain performance criteria subject to satisfaction of which the options would vest. Any option granted shall be exercisable according
to the terms and conditions as determined by the Nomination and Remuneration Committee and as set forth in the grant letter. The
exercise period shall be 3 (three) years from the date of vesting of options in case of employee is in continuation of employment. The
vested options can be exercised by the employee at any time within the exercise period, or such other shorter period as may be prescribed
by the Nomination and Remuneration Committee from time to time and as set out in the Grant Letter. When exercisable, each option is
convertible into one equity share. The options not exercised within the exercise period shall lapse and the employee shall have no right
over such lapsed or cancelled options. The shares arising out of exercise of vested options shall not be subject to any lock-in period from
the date of allotment of such shares under KFIL ESOS 2017.

II. KFIL Employee Stock Option Scheme 2021 :

The Company has introduced employee stock option scheme. This employee equity-settled compensation scheme is known as KFIL
Employee Stock Option Scheme 2021 (“KFIL ESOS 2021/ Scheme”). The employee stock option scheme is approved and authorized
by the Board of Directors. This scheme is designed to provide incentives to specified senior management employees who are in
the employment of the company and director(s), whether wholetime or otherwise, (other than promoters of the company, persons
belonging to promoters group, independent directors and directors holding directly or indirectly more than 10% of the outstanding
equity shares of the company). The specific employees to whom the options would be granted, and their eligibility criteria would be
determined by the Nomination and Remuneration Committee.

Options granted under KFIL ESOS 2021 would vest after 1 (one) year but not later than 4 (four) years from the date of grant of
such options. Options will be vested equally over four years. Vesting of options would be subject to continued employment with
the Company and thus the options would vest essentially on passage of time. In addition to this, the Nomination and Remuneration
Committee may also specify certain performance criteria subject to satisfaction of which the options would vest. Any option granted
shall be exercisable according to the terms and conditions as determined by the Nomination and Remuneration Committee and as
set forth in the Grant Letter. The exercise period shall be 3 (three) years from the date of vesting of options in case of employee is in
continuation of employment. The vested options can be exercised by the employee at any time within the exercise period, or such
other shorter period as may be prescribed by the Nomination and Remuneration Committee from time to time and as set out in the
Grant Letter. When exercisable, each option is convertible into one equity share. The options not exercised within the exercise period
shall lapse and the employee shall have no right over such lapsed or cancelled options. The shares arising out of exercise of vested
options shall not be subject to any lock-in period from the date of allotment of such shares under KFIL ESOS 2021.

Fair value of the options granted

The fair value of the options granted is mentioned below as per vesting period. The fair value of the options is determined using Black-
Scholes-Merton model which takes into account the exercise price, the term of the option (time to maturity), the share price as at the
grant date and expected price volatility (standard deviation) of the underlying share, the expected dividend yield and risk-free interest
rate for the term of the option.

Rationale for principle variables used

1. Time to maturity of options is the period of time from the grant date to the date on which option is expected to be exercised.
The minimum life of stock option is the minimum period before which the options cannot be exercised and maximum life is the
period after which the options cannot be exercised.

2. The expected price volatility is based on the historic volatility, adjusted for any changes to future volatility due to publicly
available information.

The Company has recorded employee share-based compensation expense in current year amounting to H5.95 Crores
( Previous Year : H 5.44 Crores) for the options issued to the employees.

51. Disclosure pursuant to Ind AS 103 “Business Combinations”:

Amalgamation of ISMT Limited:

The Board of Directors of the Company, at its meeting held on 5th November 2022, approved The Scheme of Amalgamation and
Arrangement under Sections 230 - 232 and other applicable provisions of the Companies Act, 2013 for amalgamation of ISMT Limited
(‘Amalgamating Company') with the Company (‘Scheme').

The aforesaid Scheme was sanctioned by Hon'ble National Company Law Tribunal (NCLT) Mumbai Bench vide order dated 24th July, 2024.
The Appointed Date of the Scheme was 1 April, 2023 and in terms of the Scheme, all the assets, liabilities, reserves and surplus of the
Amalgamating Company transferred to and vested in the Company.

The amalgamation has been accounted in accordance with “Pooling of interest method” as laid down in Appendix C - ‘Business combinations
of entities under common control' of Ind AS 103 notified under Section 133 of the Act read with the Companies (Indian Accounting
Standards) Rules, 2015, as specified in the scheme and Ind AS Transition Facilitation Group (ITFG) Clarification Bulletin 9 Issue 2.

Consequent on the Scheme coming into effect and in accordance with the Share Exchange Ratio enshrined in the Scheme, on 09th
August, 2024 the Company has alloted its 2,49,04,259 equity shares of 5/- each (fully paid-up) to the equity shareholders of erstwhile ISMT
Limited as on the ‘Record Date' fixed for the said purpose.

54. Recent accounting pronouncements

The Ministry of Corporate Affairs (“MCA”) has vide notification dated May 7, 2025 notified Companies (Indian Accounting Standards)
Amendment Rules, 2025 (the ‘Rules') which amends certain accounting standards, and are effective from 1 April 2025 onwards. The
summary of amendments is as follows -

Ind AS 21, The Effects of Changes in Foreign Exchange Rates - These amendments provide guidance on when a currency is considered as
exchangeable, application guidance on determining exchangeability and estimating spot rates, disclosure requirements when the currency
is not exchangeable and references to matters contained in other Indian Accounting Standards.

The Company has reviewed the new pronouncements and based on its evaluation has determined that it does not have any significant
impact in its financial statements.

55. Previous year's figures have been regrouped wherever considered necessary to make them comparable with
those of the current year.

For and on behalf of the Board of Directors

As per our report of even date attached

For Kirtane & Pandit LLP For P G BHAGWAT LLP

Chartered Accountants Chartered Accountants

Firm Registration No. Firm Registration No. RAHUL KIRLOSKAR R.V.GUMASTE

105215W/ W100057 101118W/ W100682 Chairman Managing Director

DIN 00007319 DIN 00082829

PARAG PANSARE NACHIKET DEO R.S.SRIVATSAN MAYURESH GHARPURE

Partner Partner Executive Director (Finance) Company Secretary

Membership No. 117309 Membership No. 117695 & Chief Financial Officer

DIN 09607651

Pune 09th May 2025 Pune 09th May 2025 Pune 09th May 2025 Pune 09th May 2025