Note 1 - Background Information

1 Company Information

Alivus Life Sciences Limited (formerly Glenmark Life Sciences Limited ) (the "Company") is a public limited company incorporated in Pune, India. The registered office of the Company is at Plot No. 170-172, Chandramouli Industrial Estate, Mohol Bazarpeth, Solapur - 413213, Maharashtra, India.

The Company is primarily engaged in the development, manufacture, and marketing of active pharmaceutical ingredients. The Company's research and development facilities are located at Mahape, Ankleshwar, and Dahej in India, while its manufacturing facilities are located at Ankleshwar, Dahej, Mohol, and Kurkumbh. Equity Shares of the Company are listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited.

With a vision to lead the future, the Company has acquired land in Taloja (Navi Mumbai) admeasuring 10,000 square metres to establish a state-of-the-art research and development centre. The facility is designed to advance complex chemistry and oncology research and will focus on flow chemistry, complex products, particle engineering, and green chemistry, thereby strengthening the Company's pipeline across key therapeutic areas.

Note 2 - Basis of Preparation, Measurement, Key Accounting Estimates, Judgements and Material Accounting Policy Information

2.1 These financial statements have been prepared in accordance with Indian Accounting Standards in terms of the Companies (Indian Accounting Standards) Rules, 2015, as amended and notified under Section 133 of the Companies Act, 2013 (the "Act"), and other relevant provisions of the Act. The preparation of these financial statements requires the use of certain critical accounting estimates and also requires management to exercise judgment in the application of the Company's accounting policies. The areas involving a higher degree of judgment or

complexity, or where assumptions and estimates are significant to these financial statements, are disclosed in Section 2.2.

These financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities (including investments) and defined benefit plan assets, which are measured at fair value. Share based payments are measured at fair value at the grant date. Lease liabilities are measured at amortised cost, and right-of-use assets are initially measured at cost and subsequently accounted for in accordance with the relevant accounting standards.

All assets and liabilities have been classified as current or non-current in accordance with the Company's normal operating cycle and other criteria set out in Schedule III to the Act and Ind AS 1, Presentation of Financial Statements.

Based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities. Deferred tax assets and liabilities are always disclosed as non current.

The material accounting policies used in the preparation of these financial statements are summarised below. These accounting policies have been applied consistently to all the years presented in these financial statements.

These financial statements are presented in Indian Rupees ("INR"), which is also the Company's functional currency. Amounts presented in figures have been rounded to the nearest INR million, unless otherwise stated.

2.2 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 assumes 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 most advantageous market must be accessible to 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 interests. 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 who 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 below, 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

• 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 of the fair value hierarchy by reassessing the 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.

2.3 Foreign currency transactions

Foreign currency transactions are recorded at the exchange rates prevailing on the date of such transactions. Monetary assets and liabilities as at the balance sheet date are translated at the exchange rates prevailing on that date. Gains or losses arising on account of differences in foreign exchange rates on settlement or translation of monetary assets and liabilities are recognised in the Statement of Profit and Loss, unless they are considered as an adjustment to borrowing costs, in which case they are classified along with the borrowing cost, if any.

2.4 Revenue recognition

The Company applies the principles prescribed under Ind AS 115, Revenue from Contracts with Customers, which provides a single, principles-based approach

to the recognition of revenue from contracts with customers. The standard focuses on the identification of performance obligations in a contract and requires revenue to be recognised as and when such performance obligations are satisfied.

The Company earns revenue from the supply of goods to external customers against orders received. The majority of contracts entered into by the Company relate to sales orders containing a single performance obligation for the delivery of active pharmaceutical products. The average duration of a sales order is less than twelve months.

Revenue (other than sale)

Revenue (other than from the sale of goods) is recognised to the extent that it is probable that the economic benefits will flow to the Company and that such revenue can be reliably measured.

Export benefits

Income in respect of entitlement towards export incentives is recognised in accordance with the relevant scheme upon recognition of the related export sales. Such export incentives are recorded as part of other operating revenue.

Revenue from Sale of Products

Revenue from the sale of products is recognised when the Company satisfies a performance obligation upon the transfer of control of the products to customers, either at the time of shipment or upon receipt of the goods by the customers, in accordance with the terms of the underlying contracts. Invoices are issued in accordance with the general business terms and are payable as per the contractually agreed credit period.

Revenue is measured based on the transaction price allocated to the performance obligation, which represents the consideration (including variable consideration), net of taxes or duties collected on behalf of the government and applicable discounts and allowances. A receivable is recognised by the Company when control of the goods or services is transferred and the Company's right to consideration under the contract with the customer is unconditional, with only the passage of time being required for payment. The Company has opted for the practical expedient, as there are no significant financing components to be considered while determining the transaction price.

2.5 Property, plant and equipment Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed

assets includes the cost of materials and other costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

When parts of an item of property, plant and equipment have a significant cost in relation to the total cost of the asset and have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Profits and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of the property, plant and equipment and are recognised within "Other income/expense" in the Statement of Profit and Loss.

The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying amount of the asset if it is probable that the future economic benefits embodied in the part will flow to the Company, the cost can be measured reliably, and the part has a useful life of at least twelve months. The costs of other repairs and maintenance are recognised in the Statement of Profit and Loss as incurred.

Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet are disclosed as 'Capital work-in-progress'. Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is classified as capital advances under 'Other NonCurrent Assets'.

Depreciation

Depreciation is recognised in the Statement of Profit and Loss on a straight-line basis over the estimated useful lives of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term or their useful lives, unless it is reasonably certain that the Company will obtain ownership of the asset by the end of the lease term.

The useful lives set out below best represent the estimated useful lives of these assets based on management's internal assessment and, where necessary, supported by technical advice. These useful lives differ from those prescribed under Part C of Schedule II to the Companies Act, 2013.

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and, if expectations differ from previous estimates, the changes are accounted for as a change in an accounting estimate and adjusted prospectively.

The estimated useful lives are as follows:

Factory and other buildings 26 - 61 years

Building - Ancillary Structures 02 - 15 years

Plant and machinery 02 - 25 years

Furniture and fixtures 02 - 15 years

Office equipment and Computers 02 - 10 years

Vehicles 06 years

Leasehold land is amortised over the term of the respective leases.

Depreciation methods, useful lives, and residual values are reviewed at each reporting date.

2.6 Borrowing costs

Borrowing costs primarily comprise interest on the Company's borrowings. Borrowing costs that are directly attributable to the acquisition, construction, or production of a qualifying asset are capitalised during the period necessary to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed in the period in which they are incurred and are reported under "Finance costs." Borrowing costs are recognised using the effective interest rate method.

2.7 Intangible assets Research and development

Expenses on research activities undertaken with the prospect of gaining new scientific or technical knowledge and understanding are recognised in the Statement of Profit and Loss as incurred.

Development activities involve a plan or design for the production of new or substantially improved products and processes. Development expenditure is capitalised only if the development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, the Company has control over the asset, and the Company intends to and has sufficient resources to complete the development and to use or sell the asset. Capitalised expenditure includes the cost of materials and other costs directly attributable to preparing the asset for its intended use. Other development expenditure is recognised in the Statement of Profit and Loss as incurred.

The Company's internal drug development expenditure is capitalised only when it meets the recognition criteria as outlined above. Where uncertainties exist as to whether these criteria will be met, such expenditure is recognised in the Statement of Profit and Loss as incurred. When the recognition criteria are satisfied, the related expenditure is recognised as intangible assets. Based on management's estimate of useful lives, intangible assets with indefinite useful lives are tested for impairment, while assets with finite useful lives are amortised on a straight-line basis over their estimated useful economic lives from the date they are available for use. During the period prior to their commercial launch (including periods when such products are out-licensed to other companies), these assets are tested for impairment annually, as their economic useful lives cannot be determined until that time.

Recognition of intangible assets

Intangible assets comprise computer software and product development costs / brands and are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any. Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates.

De-recognition of intangible assets

Intangible assets are derecognised either upon disposal or when no future economic benefits are expected from their use or disposal. Any losses arising on such derecognition are recognised in the Statement of Profit and Loss and are measured as the difference between the net disposal proceeds, if any, and the carrying amount of the respective intangible assets as at the date of derecognition.

Intangible assets relating to products under development, other intangible assets not available for use, and intangible assets having an indefinite useful life are tested for impairment at least at each reporting date. All other intangible assets are tested for impairment when there is an indication that the carrying amount may not be recoverable. Any impairment losses are recognised immediately in the Statement of Profit and Loss.

Other intangible assets

Other intangible assets acquired by the Company that have finite useful lives are measured at cost less accumulated amortisation and accumulated impairment losses, if any.

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates.

Software for internal use, which is primarily acquired from third-party vendors, including consultancy charges incurred for implementing the software, is capitalised. Subsequent costs are charged to the Statement of Profit and Loss as incurred. The capitalised costs are amortised over the estimated useful life of the software.

Amortisation

Amortisation of intangible assets is recognised in the Statement of Profit and Loss on a straight-line basis over their estimated useful lives from the date they are available for use. Intangible assets not available for use and intangible assets having an indeterminable useful life are not amortised but are tested for impairment in accordance with the Company's accounting policy.

The estimated useful lives of Computer Softwares range from 2 to 10 years and Product Development / Brands range from 9 to 10 years.

2.8 Impairment Testing of property, plant and equipment, and intangible assets

The carrying amounts of the Company's non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If such an indication exists, the asset's recoverable amount is estimated. Intangible assets with indefinite useful lives or those not yet available for use are tested for impairment annually, with their recoverable amounts estimated at each reporting date.

For the purpose of impairment testing, assets are grouped into the smallest identifiable groups of assets that generate cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (a "cash-generating unit"). The recoverable amount of an asset or a cash-generating unit is the higher of its value in use and its fair value less costs to sell. In determining value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Intangible assets with indefinite useful lives are tested for impairment individually.

An impairment loss is recognised when the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. Impairment losses are recognised in the Statement of Profit and Loss.

Impairment losses recognised in prior years are reviewed at each reporting date to determine whether there is any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, had no impairment loss been recognised.

2.9 Investments and financial assets Classification

The Company classifies its financial assets into the following measurement categories:

• those measured subsequently at fair value (either through other comprehensive income or through profit or loss), and

• those measured at amortised cost.

The classification is based on the Company's business model for managing the financial assets and the contractual terms of the cash flows.

For financial assets measured at fair value, gains and losses are recognised either in the Statement of Profit and Loss or in Other Comprehensive Income. In the case of investments in debt instruments, this depends on the business model under which the investment is held. For investments in equity instruments, this depends on whether the Company has made an irrevocable election at the time of initial recognition to measure the equity investment at fair value through Other Comprehensive Income.

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

Measurement

At initial recognition, the Company measures a financial asset at its fair value, plus, in the case of a financial asset not measured at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. However, trade receivables that do not contain a significant financing component are measured at the transaction price.

Financial assets with embedded derivatives are considered in their entirety when determining whether their contractual cash flows represent solely payments of principal and interest.

Measurement of debt instruments

Subsequent measurement of debt instruments depends on the Company's business model for managing the asset and the contractual cash flow characteristics of the asset. The Company classifies its debt instruments into the following three measurement categories:

• Amortised cost: Assets that are held for the collection of contractual cash flows, where such cash flows represent solely payments of principal and interest, are measured at amortised cost. Any gain or loss on a debt instrument subsequently measured at amortised cost and that is not part of a 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 recognised in other income using the effective interest rate method.

• Fair value through other comprehensive income (FVOCI): Assets that are held both for the collection of contractual cash flows and for sale, where the cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income (FVOCI). Movements in the carrying amount are recognised in other comprehensive income, except for impairment gains or losses, interest income, and foreign exchange gains and losses, which are recognised in the Statement of Profit and Loss. Upon derecognition of the financial asset, the cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to the Statement of Profit and Loss and recognised in other income/ expenses. Interest income from these financial assets is recognised in other income using the effective interest rate method.

• Fair value through profit or loss (FVTPL): Assets that do not meet the criteria for measurement at amortised cost or FVOCI are measured at fair value through profit or loss. Any gain or loss on a debt instrument subsequently measured at fair value through profit or loss and that is not part of a hedging relationship is recognised in the Statement of Profit and Loss and presented net within other income/expenses in the period in which it arises. Interest income from these financial assets is recognised in other income.

Measurement of equity instruments

The Company subsequently measures all equity investments at fair value, except for those investments for which the Company has elected to measure at cost in accordance with Ind AS 27. Where the Company's management has elected to present fair value gains and losses on equity investments in Other Comprehensive Income, such gains and losses are not subsequently reclassified to profit or loss. Dividends from such investments are recognised in the Statement of Profit and Loss as other income when the Company's right to receive the payment is established.

Changes in the fair value of financial assets measured at fair value through profit or loss are recognised in other income/expenses in the Statement of Profit and Loss. Impairment losses (and reversals of impairment losses) on equity investments measured at fair value through Other Comprehensive Income are not recognised separately from other changes in fair value.

Impairment of financial assets

The Company assesses, on a forward-looking basis, the expected credit losses associated with its financial assets carried at amortised cost and debt instruments measured at fair value through other comprehensive income (FVOCI). The impairment methodology applied depends on whether there has been a significant increase in credit risk. Note 32 describes how the Company determines whether there has been a significant increase in credit risk.

For trade receivables and other contracts assets, the Company applies the simplified approach permitted under Ind AS 109, Financial Instruments, which requires the recognition of expected lifetime credit losses from the initial recognition of the receivables.

De-recognition of financial assets

A financial asset is derecognised when, and only when:

• the Company has transferred its contractual rights to receive cash flows from the financial asset; or

• the Company retains the contractual rights to receive the cash flows of the financial asset but assumes a contractual obligation to pay those cash flows to one or more recipients.

When the Company transfers a financial asset, it evaluates whether it has transferred substantially all the risks and rewards of ownership of the financial asset. If substantially all risks and rewards of ownership have been transferred, the financial asset is derecognised. If substantially all risks and rewards of ownership have not been transferred, the financial asset is not derecognised.

Where the Company has neither transferred nor retained substantially all the risks and rewards of ownership of the financial asset, the asset is derecognised if the Company has not retained control over the financial asset. If the Company retains control of the financial asset, the asset continues to be recognised to the extent of the Company's continuing involvement in the financial asset.

Interest income from financial assets

Interest income from debt instruments is recognised using the effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts over the expected life of the financial asset to the gross carrying amount of the financial asset. In calculating the effective interest rate, the Company estimates the expected cash flows by considering all contractual terms of the financial instrument (such as prepayment, extension, call, and similar options) but does not consider expected credit losses.

2.10 Financial liabilities

Non derivative financial liabilities include trade and other payables.

Borrowings and other financial liabilities are initially recognised at fair value, net of transaction costs incurred. Any difference between the fair value and the transaction proceeds at initial recognition is recognised as an asset or a liability, as appropriate, based on the underlying reason for such difference.

Subsequently, all financial liabilities are measured at amortised cost using the effective interest rate method.

Borrowings are derecognised from the balance sheet when the obligation specified in the contract is discharged, cancelled, or expires. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in the Statement of Profit and Loss. Gains or losses arising from transactions with shareholders are recognised in other equity.

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Where there is a breach of a material provision of a long-term loan arrangement on or before the end of the reporting period, with the effect that the liability becomes payable on demand as at the reporting date, the liability is not classified as current if the lender has agreed, after the reporting date and before the approval of the financial statements for issue, not to demand repayment as a consequence of the breach.

Trade payables are initially recognised at their transaction values, which approximate their fair values, and are subsequently measured at amortised cost, net of settlement payments.

2.11 Inventories

Inventories of finished goods, stock-in-trade, work-in-process, consumable stores and spares, raw materials, and packing materials are valued at the lower of cost and net realisable value. The cost of inventories is determined on a weighted moving average basis. The cost of work-in-process and finished goods includes the cost of materials consumed, labour, manufacturing overheads, and other related costs incurred in bringing the inventories to their present location and condition.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

In determining the allowance for slow-moving, obsolete, and other non-saleable inventories, the Company considers factors such as estimated shelf life, planned product discontinuations, price changes, inventory ageing, and the introduction of competing new products, to the extent that these factors impact the Company's business and markets. Based on the assessment of these factors, the Company reviews and adjusts the inventory provision annually to reflect its actual experience.

2.12 Accounting for income taxes

Income tax expense comprises current and deferred tax. Income tax expense is recognised in the Statement of Profit and Loss, except to the extent that it relates to items recognised in Other Comprehensive Income, in which case it is recognised in Other Comprehensive Income. Current tax represents the expected tax payable on taxable income for the year, using tax rates enacted or substantively enacted as at the reporting date, together with adjustments to tax payable in respect of prior years.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes.

Deferred tax is not recognised on temporary differences arising from the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting profit nor taxable profit.

Deferred tax is measured using the tax rates that are expected to apply to the temporary differences when they reverse, based on tax laws that have been enacted or substantively enacted as at the reporting date.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realised.

Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities, and when the deferred tax assets and liabilities relate to income taxes levied by the same tax authority.

2.13 Leases

The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability, adjusted for any lease payments made at or before

the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

- Fixed payments, including in-substance fixed payments;

- Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

- Amounts expected to be payable under a residual value guarantee; and

- The exercise price under a purchase option that the company is reasonably certain to exercise, lease payments in an optional renewal year if the company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the company is reasonably certain not to terminate early.

The lease liability is subsequently measured at amortised cost using the effective interest method. The lease liability is remeasured when there is a change in future lease payments arising from a change in an index or a rate, when there is a change in the Company's estimate of the amount expected to be payable under a residual value guarantee, or when the Company changes its assessment of whether it will exercise a purchase, extension, or termination option.

When the lease liability is remeasured in this manner, a corresponding adjustment is made to the carrying amount of the right-of-use asset. If the carrying amount of the right-of-use asset has been reduced to zero, the adjustment is recognised in the Statement of Profit and Loss.

Short-term leases and leases of low-value assets

The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases with a lease term of twelve months. The lease payments associated with these leases are recognised as an expense on a straight-line basis over the lease term.

2.14 Equity

Share capital is determined using the nominal value of the shares issued. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any related tax effects.

Securities premium includes any premium received on the issue of share capital. Transaction costs directly attributable to the issue of shares are deducted from the securities premium, net of any related income tax benefits.

Retained earnings include the results of the current year and prior years, as disclosed in the Statement of Profit and Loss.

2.15 Employee benefits Short-term benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is rendered. A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans when the Company has a present legal or constructive obligation to make such payments as a result of past service provided by employees and the amount of the obligation can be estimated reliably.

Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which the Company pays fixed contributions into a separate entity and has no legal or constructive obligation to pay further amounts. Obligations for contributions to recognised provident funds, Pension schemes, Labour Welfare Fund and other social security schemes, which are defined contribution plans, are recognised as an employee benefit expense in the Statement of Profit and Loss as incurred.

Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company's net obligation in respect of an approved gratuity plan, which is a defined benefit plan, and certain other defined benefit plans is calculated separately for each material plan by estimating the ultimate cost to the Company of the benefits that employees have earned in return for their service in the current and prior periods. This requires the

Company to determine the portion of benefits attributable to current and prior service periods and to make estimates (actuarial assumptions) regarding demographic and financial variables that will affect the cost of the benefits. The cost of providing benefits under the defined benefit plan is determined using actuarial valuations performed annually by a qualified actuary using the projected unit credit method.

Gratuity Obligations

The benefit obligation is discounted to determine the present value of the defined benefit obligation and the related current service cost. The discount rate used is the yield at the reporting date on risk-free government bonds with maturity dates that approximate the terms of the Company's obligations and that are denominated in the currency in which the benefits are expected to be paid.

The fair value of any plan assets is deducted from the present value of the defined benefit obligation to determine the resulting deficit or surplus. The net defined benefit liability or asset is determined as the amount of such deficit or surplus, after considering the effect of any limitation on the recognition of a net defined benefit asset (the asset ceiling). The resulting net defined benefit liability or asset is recognised in the balance sheet.

Defined benefit costs are recognised as follows:

• Service cost in the statement of profit and loss

• Net interest on the net defined benefit liability (asset) in the statement of profit and loss

• Remeasurement of the net defined benefit liability/ (asset) in other comprehensive income

Service cost comprises current service cost, past service cost, and gains and losses on curtailments and settlements. The benefit attributable to current and prior periods of service is determined in accordance with the plan's benefit formula. However, where an employee's service in later years is expected to lead to a materially higher level of benefit than in earlier years, the benefit is attributed on a straight-line basis over the service period. Past service cost is recognised in the Statement of Profit and Loss in the period in which the plan is amended. Gains or losses arising from the settlement of a defined benefit plan are recognised when the settlement occurs.

Net interest is calculated by applying the discount rate at the beginning of the reporting period to the net defined benefit liability or asset at the beginning of the period, after taking into account any changes in the net defined benefit liability or asset arising from contributions and benefit payments during the period.

Remeasurements comprise actuarial gains and losses, the return on plan assets (excluding interest income), and the effect of changes in the asset ceiling,

if applicable. Remeasurements recognised in Other Comprehensive Income are not reclassified to the Statement of Profit and Loss.

Compensated leave of absence

Eligible employees are entitled to accumulate compensated absences up to prescribed limits in accordance with the Company's policy and to receive cash compensation in lieu thereof. The Company measures the expected cost of accumulating compensated absences as the additional amount that the Company expects to pay as a result of the unused entitlement that has accumulated as at the balance sheet date. Such measurement is based on an actuarial valuation carried out by a qualified actuary as at the balance sheet date.

Termination benefits

Termination benefits are recognised as an expense when the Company is demonstrably committed, without any realistic possibility of withdrawal, to a formal and detailed plan either to terminate employment before the normal retirement date or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits arising from voluntary redundancies are recognised as an expense when the Company has made an offer encouraging voluntary redundancy, it is probable that the offer will be accepted, and the number of employees accepting the offer can be estimated reliably.

Other long-term Employee benefits

The Company's net obligation in respect of other long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and previous periods. That benefit is discounted to determine its present value.

2.16 Provisions, contingent liabilities and contingent assets

Provisions are recognised when present obligations as a result of past events will probably lead to an outflow of economic resources from the Company and they can be estimated reliably. Timing or amount of the outflow may still be uncertain. A present obligation arises from the presence of a legal or constructive obligation that has resulted from past events.

Provisions are measured at the best estimate of expenditure required to settle the present obligation at the reporting date, based on the most reliable evidence, including the risks and uncertainties and timing of cash flows associated with the present obligation.

In those cases where the possible outflow of economic resource as a result of present obligations

to equity shareholders and the weighted average number of equity shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

2.19 Statement of cash flow

The Statement of Cash Flows is prepared by classifying cash flows into operating, investing, and financing activities. Cash flows from operating activities are reported using the indirect method, whereby profit before tax (excluding exceptional items) is adjusted for the effects of:

(i) changes during the year in inventories and operating receivables and payables, and transactions of a non-cash nature;

(ii) non-cash items such as depreciation, provisions, and unrealised foreign exchange gains and losses; and

(iii) all other items for which the cash effects are investing or financing cash flows.

Cash and cash equivalents (including bank balances) disclosed in the Statement of Cash Flows exclude items that are not available for general use as at the balance sheet date.

2.20 Critical accounting estimates and significant judgement in applying accounting policies

In preparing these financial statements, management makes various judgments, estimates, and assumptions relating to the recognition and measurement of assets, liabilities, income, and expenses.

In the process of applying the Company's accounting policies, management has made the following judgments, apart from those involving estimates, which have the most significant effect on the amounts recognised in the financial statements. These judgments are based on the information available as at the balance sheet date.

Leases

Ind AS 116 requires Company to make certain judgements and estimations, and those that are significant are disclosed below.

Critical judgements are required when an entity is,

• determining whether or not a contract contains a lease

• establishing whether or not it is reasonably certain that an extension option will be exercised

• considering whether or not it is reasonably certain that a termination option will not be exercised

Key sources of estimation and uncertainty include:

• calculating the appropriate discount rate

• estimating the lease term

Estimation Uncertainty

The preparation of these financial statements in conformity with Ind AS requires management to exercise judgment in selecting appropriate assumptions for calculating accounting estimates, which inherently involve a degree of uncertainty. Management's estimates are based on historical experience and various other factors that are considered reasonable under the circumstances. These estimates form the basis for making judgments about the carrying amounts of assets and liabilities and the reported amounts of income and expenses that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Estimates of the useful lives of various tangible and intangible assets, as well as assumptions used in determining employee-related obligations, the fair valuation of financial and equity instruments, and the impairment of tangible and intangible assets, represent some of the significant judgments and estimates made by management.

Useful lives of various assets

Management reviews the useful lives of depreciable assets at each reporting date based on the expected utility of the assets to the Company. The useful lives are specified in Notes 2.5 and 2.7.

Post-employment benefits

The cost of post-employment benefits is determined using actuarial valuations. These valuations involve making assumptions regarding discount rates, expected rates of return on plan assets, future salary increases, and mortality rates. Due to the long-term nature of these benefit plans, such estimates are subject to significant uncertainty.

Fair value of financial instruments

Management uses valuation techniques to measure the fair value of financial instruments for which active market quotations are not available. In applying these valuation techniques, management maximises the use of observable market inputs and applies estimates and assumptions that are, to the extent possible, consistent with the information that market participants would use in pricing the instruments. Where relevant observable inputs are not available, management uses its best estimates of the assumptions that market participants would make. These estimates may differ from the actual prices that would be realised in an arm's-length transaction as at the reporting date.

Impairment

An impairment loss is recognised when the carrying amount of an asset or a cash-generating unit exceeds its recoverable amount. In determining the recoverable amount, management estimates the expected future

cash flows from each asset or cash-generating unit and applies an appropriate discount rate to calculate the present value of those cash flows. In estimating future cash flows, management makes assumptions regarding future operating performance and other relevant future events and circumstances. Actual results may differ from these assumptions and could require significant adjustments to the carrying amounts of the Company's assets.

In most cases, determining the appropriate discount rate involves estimating suitable adjustments for market risk and asset-specific risk factors.

Current and deferred income taxes

Significant judgments are involved in determining the provision for income taxes, including judgments regarding whether tax positions are expected to be sustained upon assessment by the tax authorities. Tax assessments may involve complex issues that can be resolved only over extended periods of time. The recognition and measurement of tax positions subject to legal or economic uncertainties are assessed individually by management based on the specific facts and circumstances.

Expected credit loss

The Company applies expected credit losses (ECL) model for measurement and recognition of loss allowance on the following:

i Trade receivables.

ii Financial assets measured at amortised cost other than trade receivables.

In the case of trade receivables, the Company applies the simplified approach, whereby an allowance equal to lifetime expected credit losses (ECL) is measured and recognised. In the case of other financial assets (as listed in item (ii) above), the Company assesses whether there has been a significant increase in credit risk since initial recognition. If the credit risk has not increased significantly, an allowance equal to twelve-month ECL is measured and recognised. However, if the credit risk has increased significantly since initial recognition, an allowance equal to lifetime ECL is measured and recognised.

The financial statements have been prepared using the measurement bases prescribed under Ind AS for each type of asset, liability, income, and expense. These measurement bases are described in greater detail in the Company's accounting policies.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future

periods, if the revision affects both current and future periods.

2.21 Recent accounting pronouncements

New and amended standards adopted by the Company:

All Indian Accounting Standards (Ind AS) issued and notified by the Ministry of Corporate Affairs ("MCA") under the Companies (Indian Accounting Standards) Rules, 2015 (as amended), up to the date on which these financial statements were authorised for issue, have been considered in the preparation of these financial statements.

Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time.

In May 2025, the Ministry of Corporate Affairs (“MCA”) notified the following amendments:

1. Ind AS 21 - The Effects of Changes in Foreign Exchange Rates, applicable with effect from April 1, 2025. The Company has evaluated the impact of these amendments and, based on its assessment, has determined that they do not have a significant impact on the financial statements.

In August 2025, the Ministry of Corporate Affairs (“MCA”) notified the following amendments:

2. Ind AS 1 - Presentation of Financial Statements (Applicable with effect from April 1, 2025).

The amendment relates to the classification of liabilities as current or non-current, including non-current liabilities with covenants. In determining whether a liability should be classified as current or non-current, the amendment removes the requirement that a right to defer settlement must exist for at least twelve months after the reporting date. Instead, it requires that such a right should exist and have substance as at the reporting date. The amendment also introduces additional guidance on the classification of liabilities subject to covenants. This amendment is required to be applied retrospectively in accordance with Ind AS 8. The Company has assessed the impact of these amendments and concluded that they do not result in any change to its classification of current and non-current liabilities.

3. Ind AS 7 - Statement of Cash Flows and Ind AS 107 - Financial Instruments: Disclosures (Applicable with effect from April 1, 2025)

The amendment to Ind AS 7 requires entities to disclose information that enables users of

financial statements to assess the effects of supplier finance arrangements on the entity's liabilities and cash flows, including the nature of such arrangements, the carrying amounts of related liabilities, and the range of payment due dates. Ind AS 107 has been amended to include supplier finance arrangements as a factor that may give rise to concentrations of liquidity risk.

As a result of implementing the amendments, the Company has provided additional disclosures about its supplier finance arrangement (refer Note 13).

4. Ind AS 12 - Income Taxes: International Tax Reform - Pillar Two Model Rules (Applicable immediately and retrospectively)

These amendments provide a temporary mandatory relief from recognising and disclosing deferred tax assets and liabilities related to Pillar Two income taxes and require specific disclosures regarding the application of the relief. The amendments apply immediately and retrospectively. The Company has assessed the applicability of these amendments and concluded that they are not applicable to the Company and, accordingly, have no impact on the financial statements.

Standards issued / amendments to existing standards issued but are not yet effective.

Amendments to Ind AS 1 Paragraph 74 of Ind AS 1 currently effective for the year ended 31 March 2026 requires the entity not to classify the liability as current, if there is a breach of a material covenant of a long-term loan arrangement on or before the end of the reporting period with the effect that the liability becomes payable on demand on the reporting date, however, the lender agreed, after the reporting period and before the approval of the financial statements for issue, not to demand payment as a consequence of the breach.

MCA vide notification dated 13 August 2025, has introduced amendment under Paragraph 74 of Ind AS 1 which requires the entity to classify the liability as current under the aforementioned situation because, at the end of the reporting period, it does not have the right to defer its settlement for at least twelve months after that date. Such amendment has been made effective for annual reporting periods beginning on or after 01 April 2026 retrospectively in accordance with Ind AS 8.

The Company has assessed the impact of these amendments and concluded that they do not result in any change to its classification of current and non-current liabilities.