(xi) Provisions and Contingent Assets and Liabilities
Provisions

The Company recognises a provision when there
is a present obligation (legal or constructive) as
a result of past event and it is probable that the
Company will be required to settle the obligation
and a reliable estimate can be made of the amount
of the obligation.

The amount recognised as a provision is the best
estimate of the consideration required to settle the
present obligation at the end of the reporting period,
taking into account the risks and uncertainties
surrounding the obligation. When a provision is
measured using the cash flows estimated to settle
the present obligation, its carrying amount is the
present value of those cash flows (when the effect of
the time value of money is material).

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

Provision for Warranties:

A provision is estimated for expected warranty
claims in respect of products sold during the year
on the basis of past experience regarding failure
trends of products and costs of rectification or
replacement. It is expected that most of this cost will
be incurred over the next one year as per warranty
terms. Management estimates the provision based
on historical warranty claim information and any
recent trends that may suggest future claims could
differ from historical amounts.

Contingent liability

A disclosure for a contingent liability is made when
there is a possible obligation or a present obligation
that may, but probably will not, require an outflow

of resources. Where there is a possible obligation or
a present obligation that the likelihood of outflow
of resources is remote, no provision or disclosure is
made.

Contingent Assets

Contingent assets are not recognised. However,
when realisation of income is virtually certain, then
the related asset is no longer a contingent asset, and
is recognised as an asset.

(xii) Revenue recognition

The Company recognises revenue when the control
of goods being sold is transferred to the customer and
when there are no longer any unfulfilled obligations.
The performance obligations in the contracts are
fulfilled based on various customer terms including
at the time of delivery of goods, dispatch or upon
customer acceptance based on various distribution
channels. The Company has generally concluded
that it is the principal in its revenue arrangements,
because it typically controls the goods or services
before transferring them to the customer.

Revenue recognised from major business
activities:

a) Sale of products

Revenue from the sale of products is
recognised at the point in time when control
of the goods is transferred to the customer and
in case of export sales of goods, it takes place
on dispatch of goods from the customs port.

Revenue is measured based on the transaction
price, which is the consideration received/
receivable, net of customer incentives,
discounts, variable considerations, payments
made to customers, other similar charges, as
specified in the contract with the customer.
Additionally, revenue excludes taxes collected
from customers, which are subsequently
remitted to governmental authorities.

The Contract assets and contract liabilities
are recognised basis its estimate of
return on historical results, taking into
consideration the type of customer, the
type of transaction and the specifics of each
arrangement.

b) Rendering of services

Income from job work is accrued when right
of revenue is established, which relates to
effort completed. Support and Customer
Services income is recognised as per the
terms of the agreement based upon the
services completed.

c) Interest income

Interest income from a financial asset is
recognised when it is probable that the
economic benefits will flow to the Company
and the amount of income can be measured
reliably. Interest income is accrued on a
time basis, by reference to the principal
outstanding and at the effective interest rate
applicable.

(xiii) Taxation

Income tax expense represents the sum of the tax

currently payable and deferred tax.

a) Current tax

The tax currently payable is based on taxable
profit for the year. Taxable profit differs
from ‘profit before tax’ as reported in the
statement of profit and loss because of items
of income or expense that are taxable or
deductible in other years and items that are
never taxable or deductible. The Company’s
current tax is calculated accordance with the
Income-tax Act, 1961, using tax rates that
have been enacted or substantively enacted
by the end of the reporting period.

Current income tax assets and liabilities
are measured at the amount expected to
be recovered from or paid to the taxation
authorities.

Current tax is recognised in the statement of
profit and loss, except when it relates to items
that are recognised in other comprehensive
income or directly in equity, in which case,
the current tax is also recognised in other
comprehensive income or directly in equity
respectively.

b) Deferred tax

Deferred tax is recognised on temporary
differences between the carrying amounts of

assets and liabilities in the financial statements
and the corresponding tax bases used in the
computation of taxable profit. Deferred tax
liabilities are generally recognised for all
taxable temporary differences. Deferred tax
assets are recognised only to the extent that
it is probable that the temporary differences
will reverse in the foreseeable future and
taxable profit will be available against which
the temporary differences can be utilised.
Such deferred tax assets and liabilities are
not recognised if the temporary difference
arises from the initial recognition (other than
in a business combination) of assets and
liabilities in a transaction that affects neither
the taxable profit nor the accounting profit.

The carrying amount of deferred tax assets is
reviewed at the end of each reporting period
and reduced to the extent that it is no longer
probable that sufficient taxable profits will be
available to allow all or part of the asset to be
recovered. Unrecognised deferred tax assets
are re-assessed at each reporting date and are
recognised to the extent that it has become
probable that future taxable profits will allow
the deferred tax asset to be recovered.

Deferred tax liabilities and assets are
measured at the tax rates that are expected
to apply in the period in which the liability
is settled or the asset realised, based on tax
rates (and tax laws) that have been enacted
or substantively enacted by the end of the
reporting period.

Deferred tax is recognised in the statement of
profit and loss, except when it relates to items
that are recognised in other comprehensive
income or directly in equity, in which case,
the deferred tax is also recognised in other
comprehensive income or directly in equity
respectively.

c) Current and deferred tax for the year

Current and deferred tax are recognised in the
statement of profit and loss, except when they
relate to items that are recognised in other
comprehensive income or directly in equity,
in which case, the current and deferred tax
are also recognised in other comprehensive
income or directly in equity respectively.

(xiv) Employee benefits

Short-term employee benefits

All short-term employee benefits such as salaries,
wages, bonus, medical benefits, etc. which fall within
12 months of the period in which the employee
renders related services which entitles them to avail
such benefits and non-accumulating compensated
absences are recognised on an undiscounted basis and
charged to the statement of profit and loss.

Defined contribution plan

Superannuation fund and employee’s state insurance
are the defined contribution schemes offered by the
Company. The contributions to these schemes are
charged to statement of profit and loss of the year in
which contribution to such schemes becomes due on
the basis of services rendered by the employees.

Defined benefit plan

Charge for the year in respect of unfunded defined
benefit plans in the form of gratuity and provident
fund (Company managed fund) has been ascertained
based on actuarial valuation carried out by an
independent actuary as at the year end using the
Projected Unit Credit Method, which recognises
each period of service as giving rise to additional unit
of employee benefit entitlement and measures each
unit separately to build up the final obligation. The
obligation is measured at the present value of the
estimated future cash flows. The discount rate used
for determining the present value of the obligation
under defined benefit plans is based on the market
yields on Government securities as at the valuation
date having maturity periods approximating to
the terms of related obligations. Actuarial gains
and losses are recognised immediately in Other
Comprehensive Income. Remeasurement recognised
in other comprehensive income is reflected in retained
earnings and is not reclassified to the statement of
profit and loss.

Compensated absences

Compensated absences which are not expected to
occur within twelve months after the end of the
period in which the employee renders the related
services are recognised as an actuarially determined
liability using the projected unit credit method at the
present value of the defined benefit obligation at the
balance sheet date.

(xv) Earnings per share

Basic earnings per share is calculated by dividing the
net profit or loss for the year attributable to equity
shareholders by the weighted average number of
equity shares outstanding during the period.

For the purpose of calculating diluted earnings
per share, the net profit or loss for the period
attributable to equity shareholders and the weighted
average number of shares outstanding during the
period are adjusted for the effects of all dilutive
potential equity shares. The number of shares used
in computing diluted earnings per share comprise of
the weighted average shares considered for deriving
basic earnings per equity share and weighted
average number of equity shares, if any, which
would have been issued on the conversion of all
dilutive potential equity shares unless the impact
is anti-dilutive. Dilutive potential equity shares are
deemed converted as of the beginning of the period
unless issued at a later date.

(xvi) Cash and cash equivalents

In the Balance Sheet, cash and cash equivalents are
comprised of cash (i.e. cash on hand and on demand
deposits) and cash equivalents. Cash equivalents
are short term (generally with originally maturity
of three months or less), highly liquid investment
that are readily convertible to a known amount of
cash and which are subject to an insignificant risk
of change in value. Cash equivalents are held for the
purpose of meeting short term cash commitments
rather for investment or other purposes.

For the purposes of the statement of Cash flows,
cash and cash equivalents consist of cash and cash
equivalents as defined above, net of outstanding
bank overdraft which are repayable on demand
and form and integral part of the Company’s cash
management. Such overdrafts are presented as short
term borrowings in the Balance Sheet.

(xvii) Financial instruments

Financial assets and financial liabilities are
recognised when the Company becomes a party
to the contractual provisions of the instrument.
Financial assets and liabilities are initially
recognised at fair value. Transaction costs that are
directly attributable to financial assets and liabilities

[other than financial assets and liabilities measured
at fair value through profit and loss (FVTPL)] are
added to or deducted from the fair value of the
financial assets or liabilities, as appropriate on initial
recognition. Transaction costs directly attributable
to acquisition of financial assets or liabilities
measured at FVTPL are recognised immediately in
the statement of profit and loss.

Financial assets

All regular way purchases or sales of financial
assets are recognised and derecognised on a trade
date basis. Regular way purchases or sales are
purchases or sales of financial assets that require
delivery of assets within the time frame established
by regulation or convention in market place.

All recognised financial assets are subsequently
measured in their entirety at either amortised cost
or fair value, depending on the classification of
financial assets.

(a) Classification of financial assets

i. Financial assets at amortised cost

A financial asset is measured at amortised
cost if both of the following conditions are
met:

a. the financial asset is held within a
business model whose objective is
to hold financial assets in order to
collect contractual cash flows and;

b. the contractual terms of the financial
asset give rise on specified dates to
cash flows that are solely payments
of principal and interest (SPPI) on
the principal amount outstanding.

Effective interest method:

The effective interest method is a method
of calculating the amortised cost of a debt
instrument and of allocating interest income
over the relevant period. The effective
interest rate that exactly discounts estimated
future cash receipts through the expected life
of the debt instrument, or, where appropriate,
a shorter period, to the net carrying amount
on initial recognition.

Income is recognised on an effective interest
basis for debt instruments other than those
financial assets. Interest income is recognised
in the statement of profit and loss and is
included in the ‘Other income’ line item.

ii. Investments in equity instruments at Fair
Value Through Other Comprehensive
Income (FVTOCI)

Currently, the Company does not have any
investments in equity instruments which are
held for trading and therefore none of the
instruments are designated FVTOCI.

iii. Investments in equity instruments
at Fair Value Through Profit or loss
(FVTPL)

Financial assets at FVTPL are measured
at fair value at the end of each reporting
period, with any gains or losses arising on
remeasurement recognised in statement
of profit and loss. The net gain or loss
recognised in the statement of profit and
loss incorporates any dividend or interest
earned on the financial asset and is included
in the ‘Other income’ line item. Dividend
on financial assets at FVTPL is recognised
when the Company’s right to receive the
dividends is established, it is probable that
the economic benefits associated with the
dividend will flow to the entity, the dividend
does not represent a recovery of part of cost
of the investment and the amount of dividend
can be measured reliably.

(b) Impairment of financial assets

The Company recognizes loss allowances using the
expected credit loss (ECL) model for the financial
assets which are not fair valued through statement
of profit or loss.

The Company has used a practical expedient by
computing the expected credit loss allowance for
trade receivables based on a provision matrix. The
provision matrix takes into account historical credit
loss experience and adjusted for forward-looking
information. The expected credit loss allowance is
based on the ageing of the days the receivables are

due and the rates as given in provision matrix and
Company’s historical experience for customers.
Loss allowance for trade receivables with no
significant financing component is measured at an
amount equal to life time ECL.

For all other financial assets, expected credit losses
are measured at an amount equal to the 12-month
ECL, unless there has been a significant increase
in credit risk from initial recognition in which case
those are measured at lifetime ECL. The amount of
expected credit losses (or reversal) that is required
to adjust the loss allowance at the reporting date
to the amount that is required to be recognised is
recognized as an impairment gain or loss in the
statement of profit and loss.

(c) Derecognition of financial assets

A financial asset is derecognised only when:

- The Company has transferred the rights to
receive cash flows from the financial asset or

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

When the entity has transferred an asset, the
Company evaluates whether it has transferred
substantially all risks and rewards of ownership
of the financial asset. In such cases, the financial
asset is derecognised. Where the entity has not
transferred substantially all risks and rewards of
ownership of the financial asset, the financial asset
is not derecognised.

Where the entity has neither transferred a financial
asset nor retains substantially all risks and rewards
of ownership of the financial asset, the financial
asset is derecognised if the Company has not
retained control of the financial asset. When the
Company retains control of the financial asset, the
asset is continued to be recognised to the extent of
continuing involvement in the financial asset.

(d) Foreign exchange gains and losses

The fair value of financial assets denominated in
a foreign currency is determined in that foreign
currency and translated at the spot rate at the end
of each reporting period. For foreign currency
denominated financial assets measured at amortised
cost and FVTPL, the exchange differences are
recognised in statement of profit and loss except for
those which are designated as hedging instruments in a
hedging relationship. For the purposes of recognising
foreign exchange gains and losses, FVTOCI debt
instruments are treated as financial assets measured
at amortised cost. Thus, the exchange differences on
the amortised cost are recognised in the statement
of profit and loss and other changes in the fair value
of FVTOCI financial assets are recognised in other
comprehensive income.

Financial Liabilities including equity instruments

Debt and equity instruments issued by the Company
are classified as either financial liabilities or as
equity in accordance with the substance of the
contractual arrangements and the definitions of a
financial liability and an equity instrument.

(a) Equity Instruments

An equity instrument is any contract that
evidences a residual interest in the assets of
an entity after deducting all of its liabilities.
Equity instruments issued by the Company
are recognised at the proceeds received, net
of direct issue costs.

(b) Financial liabilities

All financial liabilities are subsequently
measured at amortised cost using the
effective interest method or at FVTPL.

i. Financial liabilities at FVTPL

Financial liabilities at FVTPL are
stated at fair value, with any gains
or losses arising on remeasurement
recognised in statement of profit and
loss. The net gain or loss recognised
in statement of profit and loss
incorporates any interest paid on the
financial liability and is included
in the ‘Other income’ or ‘Other
expenses’ line item.

ii. Financial liabilities subsequently
measured at amortised cost

Financial liabilities that are not held-
for-trading and are not designated as
at FVTPL are measured at amortised
cost at the end of subsequent
accounting periods. The carrying
amounts of financial liabilities
that are subsequently measured at
amortised cost are determined based
on the effective interest method.

The effective interest method is a
method of calculating the amortised
cost of a financial liability and of
allocating interest expense over
the relevant period. The effective
interest rate is the rate that exactly
disc ounts e stimate d future cash
payments through the expected life
of the financial liability, or (where
appropriate) a shorter period, to
the net carrying amount on initial
recognition.

(c) Compound financial instruments

The component parts of compound financial
instruments (preference shares) issued by
the Company are classified separately as
financial liabilities and equity in accordance
with the substance of the contractual
arrangements and the definitions of a
financial liability and an equity instrument.

At the date of issue, the fair value of the
liability component is estimated using the
prevailing market interest rate for similar
instruments. This amount is recognised as a
liability on an amortised cost basis using the
effective interest method until extinguished
upon repayment.

The dividend portion classified as equity
is determined by deducting the amount of
the liability component from the fair value
of the compound financial instrument as
a whole. This is recognised and included
in equity, net of income tax effects, and is
not subsequently remeasured. In addition,
the dividend portion classified as equity
will remain in equity until repaid, in which
case, the balance recognised in equity will

be transferred to other component of equity.

Refer note 1.C.(i).(b)

(d) Foreign exchange gains and losses

For financial liabilities that are denominated
in a foreign currency and are measured at
amortised cost at the end of each reporting
period, the foreign exchange gains and
losses are determined based on the amortised
cost of the instruments and are recognised in
the statement of profit and loss.

The fair value of financial liabilities
denominated in a foreign currency is
determined in that foreign currency and
translated at the spot rate at the end of the
reporting period. For financial liabilities
that are measured as at FVTPL, the foreign
exchange component forms part of the fair
value gains or losses and is recognised in the
statement of profit and loss.

(e) Derecognition of financial liabilities

The Company derecognises financial
liabilities when, and only when, the
Company’s obligations are discharged,
cancelled or have expired. An exchange
between with a lender of debt instruments
with substantially different terms is
accounted for as an extinguishment of the
original financial liability and the recognition
of a new financial liability.

Offsetting of financial instruments

Financial assets and financial liabilities
are offset and the net amount is reported
in the balance sheet if there is a currently
enforceable legal right to offset the recognised
amounts and there is an intention to settle on
a net basis, to realise the assets and settle
the liabilities simultaneously. The legally
enforceable right must not be contingent on
future events and must be enforceable in the
normal course of business and in the event
of default, insolvency or bankruptcy of the
Company or the counterparty.

(xviii) Fair value measurement

The Company measures financial instruments at fair

value at each balance sheet date.

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

a) In the principal market for the asset or
liability, or

b) In the absence of a principal market, in the
most advantageous market for the asset or
liability

The principal or the most advantageous market must
be accessible by the Company. The fair value of an
asset or a liability is measured using the assumptions
that market participants would use when pricing the
asset or liability, assuming that market participants
act in their economic best interest. A fair value
measurement of a non-financial asset takes into
account a market participant’s ability to generate
economic benefits by using the asset in its highest
and best use or by selling it to another market
participant that would use the asset in its highest and
best use. The Company uses valuation techniques
that are appropriate in the circumstances and for
which sufficient data are available to measure fair
value, maximising the use of relevant observable
inputs and minimising the use of unobservable
inputs. All assets and liabilities for which fair value
is measured or disclosed in the financial statements
are categorised within the fair value hierarchy,
described as follows, based on the lowest level input
that is significant to the fair value measurement as a
whole:

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

b) Level 2 - Valuation techniques for which
the lowest level input that is significant to
the fair value measurement is directly or
indirectly observable

c) Level 3 - Valuation techniques for which
the lowest level input that is significant
to the fair value measurement is
unobservable

(i) Significant accounting judgements

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

(a) Contingent Liabilities

In ordinary course of business, the
Company faces claims by various parties.
The Company assesses such claims and
monitors the legal environment on an
ongoing basis, with the assistance of
external legal counsel, wherever necessary.
The Company records a liability for any
claims where a potential loss probable and
capable of being estimated and discloses
such matters in its financial statements,
if material. For potential losses that are
considered possible, but not probable,
the Company provides disclosures in the
financial statements but does not record a
liability in its financial statements unless the
loss becomes probable.

(b) Classification of Preference Shares

To consider classification of preference
shares as equity or liability depends on
the substance of the arrangement with
the preference shareholders (the holding
company) including discretion available
with the issuer, the assessment of timing,
circumstances, financial conditions, and
other related factors at the time of issue
of the preference shares including but not
limited to whether there is a valid expectation
of redemption of such preference share
capital on date of maturity. It also requires
evaluation of the Company’s historical trend,
operations, performance and expected cash
flows at the time of issue of preference shares
to consider its ability to repay (including
timing thereof) the said preference shares.
Further on the date of issuance the present
value of differential, if any, between the
market interest rate and actual interest rate is
classified as deemed equity contribution.

At the date of transition to Ind AS on April
01,2016, the Company had outstanding
preference share capital issued to its Holding
Company aggregating Rs. 7,610 lakhs which
under the previous GAAP was forming part
of share capital under the shareholder’s fund.
After assessing various factors relating to
classification of preference shares, inter
alia, substance of the arrangement with the
preference shareholders, at the time of issue
of these preference shares, there was no valid
expectations of this amount being repaid,
as such the entire preference share capital
were classified as “Equity component of
compound financial instrument - preference
shares” under the head Other Equity in the
Ind AS Financial Statements on transition
date (i.e. April 01,2016).

In respect of the preference shares issued
thereafter in November 23, 2022 and in
October 25, 2024, referred to in Note 15,
based on the assessment of factors mentioned
above, the Company has classified these
preference shares as financial liabilities at
Fair Value Through Profit or Loss (FVTPL).

(ii) Significant 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. Existing circumstances
and assumptions about future developments,
however, may change due to market changes or
circumstances arising that are beyond the control
of the Company. Such changes are reflected in the
assumptions when they occur.

(a) Defined benefit plans and Other Long
term employee benefits

The cost of the defined benefit plans and
other long term employee benefit plans are
determined using actuarial valuations. 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 and mortality rates. 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. The management considers
the interest rates of government securities
based on expected settlement period of
various plans. Further details about various
employee benefit obligations are given in
Note 28.

(b) Allowance for Trade Receivables

The Company uses expected credit loss
model to assess the impairment loss or
gain. The Company has used a practical
e xp e di ent by c omputing the e xp e cte d
credit loss allowance for trade receivables
based on a provision matrix. The provision
matrix takes into account historical credit
loss experience and adjusted for forward¬
looking information. The expected credit
loss allowance is based on the ageing of the
days the receivables are due and the rates
as given in provision matrix and Company’s
historical experience for customers.

(i) Rights, preferences and restrictions attaching to each class of shares including restrictions on the distribution of
dividends and the repayment of capital:

Preference shares of all classes carry a preferential right as to dividend over equity shares. Where dividend on cumulative
preference shares is not declared for a financial year, the entitlement thereto is carried forward whereas in the case of
non-cumulative preference shares, the entitlement for that year lapses. The preference shares are entitled to one vote per
share at meetings of the Company on any resolutions of the Company directly affecting their rights, if there is any default
in payment of their dividend for a period of 2 years or more in terms of proviso 2 to the section 47 of the Companies
Act, 2013. In the event of liquidation, preference shareholders have a preferential right over equity shareholders to be
repaid to the extent of capital paid-up and dividend in arrears on such shares. Also refer Note 26.C for arrears of fixed
cumulative dividends on redeemable non-convertible preference shares. The preference shareholders, vide their letters
dated March 31, 2020, March 29, 2024 and November 08, 2024, have relinquished their voting rights accrued/accruing
on the preference shares in terms of second proviso to section 47(2) of the Companies Act, 2013 due to non-payment of
dividend till date or during the remaining tenure of preference shares. During the year 2017-2018, the holders of preference
share capital had waived off the dividend for the financial years 2016-17 and 2017-2018. The Company had obtained
relevant approval from the holders of preference shares and regulatory authority for the waiver of dividend up to FY 2017¬
18 and extension of maturity of preference shares. Further, in respect of the preference shares (issued prior to March 31,
2017) which complete the maximum permissible tenure for redemption of preference shares as per the applicable relevant
laws, and as and when requested by the Company, the preference shareholders have consented to continue supporting the
Company towards redemption of the said preference shares either by way of subscription to fresh preference shares or
issuance of fresh preference shares through necessary statutory/regulatory approvals.

(ii) Other relavent terms and conditions relating to above preference shares

(a) The original maturity date for redemption of 1,57,00,000 13.88% cumulative redeemable non-convertible
preference shares amounting Rs. 1,570 lakhs was ten years from the date of allotment i.e. March 27, 2004, with
an option to the Company of an earlier redemption after March 27, 2006. These shares were due for redemption
on March 26, 2014 which pursuant to the provisions of Section 106 of the erstwhile Companies Act, 1956 was

extended by the Company with the consent of preference shareholders by five years i.e. till March 26, 2019 and
were further extended by another five years, i.e. till March 26, 2024 (the date of maturity).

As the Company was not in a position to redeem 1,57,00,000, 13.88% cumulative redeemable non-convertible
preference shares of Rs. 10 each (“13.88% CRNCPS”) and payment of accumulated/unpaid dividend thereon
in view of the accumulated losses and absence of distributable profits, for the purpose of redemption of these
preference shares aggregating Rs. 1,570 lakhs along with accumulated/ unpaid dividend of Rs. 1,304 lakhs thereon
till the date of maturity (subject to deduction of withholding tax of Rs. 142 lakhs), the Board of Directors had, in
its meeting held on July 14, 2023, approved the issuance of up to 2,73,15,264, 10.75% Cumulative Redeemable
Non-Convertible Preference shares of Rs.10/- each at par aggregating Rs. 2,732 lakhs (“10.75% CRNCPS”), on
private placement basis to M/s Timex Group Luxury Watches B.V., the Holding Company of the Company, in
terms of Section 55(3) of the Companies Act, 2013 subject to approval of equity shareholders, the Hon’ble National
Company Law Tribunal (“NCLT”), Reserve Bank of India (“RBI”) and other authorities, as may be required. The
Members of the Company approved the issuance of 10.75% CRNCPS in their Annual General Meeting held on
August 23, 2023. Further, NCLT, Delhi Bench had, vide its Order dated June 07, 2024 read with Corrigendum dated
July 16, 2024, approved the said issuance. In respect of the Company’s application to RBI for seeking approval
for issuance of 10.75% CRNCPS, the Company had received a communication on September 20, 2024 from its
Authorised Dealer confirming that RBI had advised that the AD Bank might examine the proposal under delegated
powers by considering the date of fresh issuance as date of drawdown and is further advised to adhere to ECB
guidelines as per Master Direction on External Commercial Borrowings, Trade Credits and Structured Obligations
dated March 26, 2019 and updated from time to time. On October 25, 2024,after obtaining the Loan Registration
Number from RBI for the issuance of fresh 10.75% CRNCPS as External Commercial Borrowing and receipt of
share application form from M/s Timex Group Luxury Watches B.V., the Company allotted 10.75% CRNCPS and
the existing 13.88% CRNCPS were deemed to be redeemed with immediate effect in terms of Section 55 (3) of the
Companies Act, 2013. The above accumulated/ unpaid dividend payable of Rs. 1,304 lakhs has been accounted for
in retained earnings under Other Equity.

The maturity of the 10.75% CRNCPS would be 20 years from the date of allotment i.e. October 25, 2024, with an
option with either party for an early redemption anytime.

(b) The original maturity date for redemption of 2,29,00,000 13.88% cumulative redeemable non-convertible
preference shares amounting Rs. 2,290 lakhs was ten years from the date of allotment i.e. March 21, 2006, with
an option to the Company of an earlier redemption after March 21, 2008. These shares were due for redemption
on March 20, 2016 which pursuant to the provisions of Section 106 of the erstwhile Companies Act, 1956 was
extended by the Company with the consent of preference shareholders by five years i.e. till March 20, 2021 and
were further extended by another five years, i.e. till March 20, 2026.

The Board of Directors in the meeting held on March 20, 2026, approved and redeemed above preference shares
along with dividend accrued upto the date of maturity.

(c) The Company has issued 3,50,00,000 5% cumulative redeemable non-convertible preference shares amounting Rs.
3,500 lakhs with maturity period of 10 years from the date of allotment i.e. February 16, 2017, with an option to the
Company of an earlier redemption after February 15, 2022.

(iii) The Board of Directors has, in its meeting held on May 26, 2026, recommended to the members dividend on three tranches
of preference shares i.e. (i) 0.09% non-cumulative redeemable non- convertible preference shares amounting to Rs. 0.23
lakhs for the FY 2025-26, (ii) 10.75% cumulative redeemable non- convertible preference shares amounting to Rs. 421
lakhs for the FY 2024-25 and FY 2025-26 and (iii) dividend on 5% cumulative redeemable non- convertible preference
shares amounting to Rs. 1,400 lakhs comprising of Rs. 175 lakhs each year from FY 2018-19 to FY 2025-26 to pay off
unpaid accumulated dividend out of available distributable profits for the FY 2025-26. These dividends will be subject to
the approval by the Members of the Company at its ensuing Annual General Meeting (“AGM”).

(i) For terms of repayments, interest rate and other disclosures - refer note (ii) (a) and (b) of note 11B.

(ii) The Company has availed multiline credit facilities aggregating Rs 1600 Lakhs against security from DBS Bank India Limited.
Out of these facilities, the Company has utilised cash credit facility aggregating Rs Nil (March 31, 2025 Rs 378 lakhs) which is
payable on demand. The interest rate is in range of 8.10% - 9.10% per annum, payable on monthly basis. The Security terms for
above are as given below:

1) First and exclusive hypothecation charge over current assets both present and future of the Company excluding those
exclusively financed by other Banks/lenders and 2) First and exclusive hypothecation charge over movable fixed assets
both present and future of the Company excluding those exclusively financed by other Banks/lenders and 3) Mortgage on
immovable property being land comprising of Plot No-10, area measuring 10,000 sq mtrs situated at apparel park cum
industrial area, khata Bhatoli , Baddi, District Solan, Himachal Pradesh together with all buildings and structures thereon
and fixtures, fittings and all plant and machinery attached to the earth or permanently fastened to anything attached to the
earth, both present and future, of the Company.

(iii) Overdraft facilities from JP Morgan Chase Bank N.A. bank carry interest ranging between 7.83% to 9.95% per annum (March 31,
2025: 9.05% to 9.95% per annum)., computed on a monthly basis on actual amount utilised, and are repayable on demand. The
overdraft facilities are backed through Standby Letter of Credit (SBLC) of Rs. 550 lakhs by Timex Group USA, Inc. , a fellow
subsidiary company.

(iv) Cash credit facilities from DBS Bank India Limited amounting to Rs. 600 lakhs (March 31, 2025 Rs. 600 lakhs) with interest rate
of 9.1% to 9.35%, were backed by SBLC, which were release during the year ended March 31, 2026.

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

(ii) On 29th November 2019 the Company has signed Unilateral Advance Pricing Agreement (APA) with the Central
Board of Direct Taxes, Department of Revenue, Ministry of Finance, Government of India wherein the Company
has agreed on the methodology to be followed for determining the Arm’s Length Price of the transactions covered
by the agreement. The Company has complied with the details mentioned in the agreement and has filed compliance
report with the authorities on 26th February 2020. The above disclosure has been considered after effect of APA,
however the compliance report filed by the Company are yet to be audited / verified by the authorities. This APA
was valid till financial year 2020-2021.

(ii) Other Money for which the company is contingently liable

The Hon’ble Supreme Court of India vide its judgement dated February 28, 2019 and subsequent review petition has
ruled in respect of compensation for the purpose of Provident Fund contribution under the Employee’s Provident Fund
Act, 1952.

There is significant uncertainty as to how the liability, if any, should be calculated for the period up to February 28, 2019
as it is impacted by multiple variables, including the period of assessment, the application with respect to certain current
and former employees and whether the interest and penalties may be assessed. The Management have determined that
on account of the practicality of application of the judgement, the Company would not be in a position to determine the
liability as of now, The Company is of the opinion that the amount cannot be reasonably estimated.

As a matter of caution, the Company has started comply the above provision on prospective basis from the date of such
ruling i.e. March 1, 2019.

B Commitments

(i) The estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. 12 Lakhs
(2025: Rs. 73 Lakhs).

(ii) The Company has other commitments, for purchases / sales orders which are issued after considering requirements
as per operating cycle for purchase / sale of goods and services, employee benefits. The Company does not have
any long term contracts including derivative contracts for which there will be any material foreseeable losses.

C Arrears of fixed cumulative dividends on preference shares (from financial year 2018-19) as at March 31, 2026 - Rs. 1,400 lakhs

(as at March 31, 2025 - Rs. 3,451 lakhs). Out of these arrears of dividends, the Board of Directors has, in its meeting held on
May 26, 2026, recommended to the members dividend on 35,000,000 5% cumulative redeemable non- convertible preference
shares amounting to Rs. 1,400 lakhs comprising of Rs. 175 lakhs each year from the FY 2018-19 to FY 2025-26 to pay off unpaid
accumulated dividend out of available distributable profits for the FY 2025-26. These dividends will be subject to the approval
by the Members of the Company at its ensuing Annual General Meeting (“AGM”).

During the year, the post approval of Members the Company in Annual General Meeting (“AGM”), paid dividend on 22,900,000
13.88% cumulative redeemable non- convertible preference shares amounting to Rs. 954 lakhs comprising of Rs. 318 lakhs each
for the FY 2024-25, FY 2018-19 and FY 2019-20 to pay off part of unpaid accumulated dividend out of available distributable
profits for the FY 2024-25. Further, the Board of Directors has, in its meeting held on November 4, 2025, recommended interim
dividend on 22,900,000 13.88% cumulative redeemable non- convertible preference shares amounting to Rs. 1271 lakhs
comprising of Rs. 318 lakhs each for the FY 2020-21 to FY 2023-24 to pay off unpaid accumulated dividend out of available
distributable profits.

Note

The dividend liability on 22,900,000 5.4% cumulative redeemable non-convertible preference shares of Rs. 10 each, payable
until 31 March 2009, was waived off as per the consent of the holders of these preference shares vide their letter dated 15 March
2009. The coupon rate applicable to these series of preference shares was revised to 7.1% effective 1 April 2009 till the date of
maturity. The holders of these preference shares have further waived the dividend for the years 2012-13, 2013-14, 2014-15 and
2015-16, subject to the condition that the coupon rate for these series shall be revised from 7.1% to 13.88%. During the financial
year 2016-17, the Company obtained relevant approvals from the regulatory authorities and the coupon rate applicable to these
series of preference shares was revised to 13.88% effective 1 April 2016 till the date of maturity. Further, the holders of these
preference shares have waived the dividend for the financial years 2016-17 and 2017-18. The dividend liability on 35,000,000
5% cumulative redeemable non-convertible preference shares of Rs. 10 each payable until 31 March 2018, was waived off as
per the consent of the holders of these preference shares vide their letter dated 26 February 2018. Thus there is no outstanding
dividend on cumulative preference shares as at March 31, 2018.

(i) Superannuation fund

The Company’s contribution paid/ payable under the scheme to the Superannuation Fund Trust, as administered by the
Company is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders
the related service. The trustees of the scheme have entrusted the administration of the trust scheme to Life Corporation of
India Limited (LIC).

(ii) Employee State Insurance fund

The Company’s contribution paid/ payable under the scheme to the Employee State Insurance is recognised as an expense
in the Statement of Profit and Loss during the period in which the employee renders the related service.

28.2 Defined benefit plans

Gratuity - The Company provides for gratuity for employees as per the Payment of Gratuity Act 1972. The Company operates a
post-employment defined benefit plan that provides for gratuity. The gratuity plan entitles an employee, who has rendered at least
five years of continuous service, to receive one-half month’s salary for each year of completed service at the time of retirement/
exit. The Scheme is not funded by plan assets.

(i) These plans typically expose the Company to actuarial risks such as investment risk, interest rate risk, longevity
risk and salary risk.

Investment Risk

The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

Salary Risk

The present value of defined benefit plan is calculated with the assumption of salary increase rate of plan participants
in future. Deviation in rate of increase in salary in future for plan participants from the rate of increase in salary used to
determine the present value of obligation will have a bearing on the plan’s liability.

Interest Risk

The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the
ultimate cost of providing the above benefit and will thus result in an increase in value of the liability.

Longevity Risk

The present value of defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan
participants both during and after employment. An increase in the life expectancy of the plan participants will increase the
plans liability.

(b) Providend Fund: In accordance with Indian law, all eligible employees of the Company in India are entitled to receive benefits
under the provident fund plan in which both the employee and employer (at a determined rate) contribute monthly to a trust set up
by the Company to manage the investments and distribute the amounts entitled to employees. This plan is a defined benefit plan
as the Company is obligated to provide its members a rate of return which should, at the minimum, meet the interest rate declared
by Government administered provident fund. The contributions made by the Company and the shortfall of interest, if any, are
recognised as an expense in statement of profit and loss under employee benefit expenses. As per the latest actuarial valuation
report of provident fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the assumptions as
mentioned below, there is a deficiency of amount Rs 13 lakhs (March 31, 2025 Rs Nil) for the year ended March 31, 2026, in the
interest cost as the present value of the expected future earnings of the fund is lower than the expected amount to be credited to
the individual members based on the expected guaranteed rate of interest of Government administered provident fund.

The Board of directors has approved risk management policy which provides framework to identify, evaluate business risk and
challenges across the company. The company has constituted risk management committee of senior management team. These
policies and guidelines cover foreign currency risk, credit risk and liquidity risk. The objective of financial risk management is
to contain, where deemed appropriate, exposures on net basis to the various types of financial risks mentioned above in order to
limit any negative impact on the Company’s results and financial position.

31.3.1 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. The Company is exposed to foreign exchange risk arising through its sales and purchases denominated in
various foreign currencies.

Foreign Currency Risk Management

Foreign currency risk also known as Exchange Currency Risk is the risk that the fair value or future cash flows of an
exposure will fluctuate because of changes in foreign exchange rates. Foreign currency risk in the Company is attributable
to Company’s operating activities and financing activities.

In the operating activities, the Company’s exchange rate risk primarily arises when revenue / costs are generated in
a currency that is different from the reporting currency (transaction risk). The information is monitored by the Audit
committee and the Board of Directors on a quarterly basis. This foreign currency risk exposure of the Company are mainly
in U.S. Dollar (USD). The Company’s exposure to foreign currency changes for all other currencies is not material.

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 (primarily trade receivables) and from
its financing activities, including deposits with banks, foreign exchange transactions and other financial instruments.

Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously
monitoring the credit worthiness of customers to which the Company grants credit terms in normal course of business. On
account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss. Refer note
8 for the disclosures for trade receivables.

The Company uses expected credit loss model to assess the impairment loss or gain. The Company has used a practical
expedient by computing the allowance for bad and doubtful debts for trade receivables based on a provision matrix. The
provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. The
allowance for bad and doubtful debts is based on the ageing of the days the receivables are due and the rates as given in
provision matrix and Company’s historical experience for customers.

The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities,
by continuously monitoring forecast and actual cash flows and by matching the maturity profiles and realisation of financial
assets with the liabilities. The Company expects to meet its other obligations from operating cash flows and proceeds of
maturing financial assets.

The table below analyses the Company’s financial liabilities (excluding lease liabilities) into relevant maturity groupings
based on their contractual maturities (undiscounted):

_^ "_saaaa_±aaaaa_±aaaaa

32 Leases

Disclosures as required under Ind AS 116:

The Company has entered into various lease agreements for acquiring space to do its day to day operations. Such lease contracts
include monthly fixed payments for rentals. The lease contracts are generally cancellable at the option of lessee during the lease
tenure. The Company also have a renewal option after the expiry of contract terms. There are no significant restrictions imposed
under the lease contracts.

The Company has entered into a lease agreement of 95 years for its factory land located in Baddi which is operational. The lease
contract amount is fully paid and there are no significant restrictions imposed under the lease contracts. Earlier these contracts
were recorded as operating lease and now these have been accounted as Right of Use assets under Ind AS 116. Further, the
Company has entered into various lease/license agreements for certain other leased/licensed premises, which expire at various
dates over the next nine years. There are no contingent lease/license fees payments.

N/A - Not applicable.

(1) Debt represents only short-term borrowings

(2) Earnings available for debt service = Net Profit after taxes Non-cash operating expenses Interest other adjustments like loss
on sale of Fixed assets etc.

(3) Debt Service = Short-term debts and Interest on borrowings

(4) Working Capital = Current Assets - Current Liabilities

(5) Capital Employed = Tangible net worth Debts

34 No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or
kind of funds) by the Company to or in any other person(s) or entity(is), including foreign entities (“Intermediaries”) with the
understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on
behalf of the Company (Ultimate Beneficiaries).

35 The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall
whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (“Ultimate
Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.”

36 Transfer Pricing

The Company has established a comprehensive system of maintenance of information and documents as required by the transfer
pricing regulation under sections 92-92F of the Income-tax Act, 1961. Since the law requires existence of such information and
documentation to be contemporaneous in nature, the Company continuously updates its documentation for the international
transactions entered into with the associated enterprises during the financial year and expects such records to be in existence latest
by such date as required under law. The management is of the opinion that its international transactions are at arm’s length so that
the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that
of provision for taxation.

37 On 21 November 2025, the Government of India notified the four Labour codes - The Code on Wages, 2019, The Industrial
Relations Code, 2020, The Code on Social Security, 2020, and The Occupational Safety, Health and Working Conditions Code,
2020 - consolidating 29 existing Labour Laws. Based on the notified central rules and FAQs issued by the Ministry of Labour and
Employment and best available information, the Company has estimated the financial implications thereof and has recognized
provision of Rs. 531 lakhs for the year ended March 31, 2026. Considering the materiality, regulatory driven and non - recurring
nature of the afore stated impact, the Company has presented such incremental impact under “Exceptional items” in the financial
statement. The Company continues to monitor the finalisation of State rules as well as the Government clarifications on the other
aspects of the Labour Codes.

38 The Company does not have any immovable properties [other than properties (including buildings constructed there on included
in Property, plant and Equipment disclosed in the financial statements) where the Company is the lessee, and the lease agreements
are duly executed in favour of the lessee].

39 No proceedings have been initiated during the year or are pending against the Company as at March 31, 2026 for holding any
benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

40 The Company is not a declared wilful defaulter by any bank or financial institution or other lender.

41 There are no charges or satisfaction yet to be registered by the Company with the Registrar of Companies (ROC) beyond the
statutory period.

42 The Company has not entered into transactions with companies struck off under section 248 of the Companies Act, 2013 or
section 560 of the Companies Act, 2013.

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

44 The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed
as income during the year in the tax assessments under the Income Tax Act, 1961 such as search or survey.

45 Royalty grouped under other expenses for the year ended March 31, 2026, includes Rs. 2,685 lakhs (March 31, 2025 Rs 2,090
lakhs) being royalty on net sales value of watches/ spare parts/ products sold under specific licensed brands manufactured/traded
by the Company in terms of Intellectual Property License Agreement dated February 01, 2024 entered by the Company with
Timex Group USA, Inc., a fellow subsidiary company, which is effective from April 1, 2024.

46 Ministry of Corporate Affairs (MCA) vide its notification number G.S.R. 206(E) dated March 24, 2021 (amended from time to
time) in reference to the proviso to Rule 3 (1) of the Companies (Accounts) Amendment Rules, 2021, introduced the requirement
of only using such accounting software w.e.f. April 01, 2023 which has a feature of recording audit trail of each and every
transaction, creating an edit log of each change made in the books of account along with the date when such changes were
made and ensuring that the audit trail cannot be disabled. The Institute of Chartered Accounts of India (“ICAI”) issued an
“Implementation guide on reporting on audit trail under rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (Revised
2024 edition)” in February 2024 relating to feature of recording audit trail.

The Company uses Oracle R12 EBS as its primary accounting software for recording all the accounting transactions and
maintaining its books of account for the year ended March 31, 2026. Oracle R12 EBS has a feature of recording audit trail (edit
log) facility which has not been enabled throughout the year.

In respect of maintaining payroll records, the Company uses an accounting software operated by a third party software service
provider. Based on the independent service auditor’s report which includes the requirements of audit trail, the said software has a
feature of recording audit trail (edit log) facility and the same has operated throughout the year. Further, no instance of audit trail
feature being tampered with has been reported in such auditor’s report. The audit trail that was enabled and operated has been
preserved as per the statutory requirements for record retention.

The Management has adequate internal controls over financial reporting which were operating effectively for the year ended
March 31, 2026. The Management is in the process of evaluating the options to ensure compliance with the requirements of
proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 referred above in respect of audit trail.

47 As per the MCA notification dated August 05, 2022, the Central Government has notified the Companies (Accounts) Fourth
Amendment Rules, 2022. As per the amended rules, the Companies are required to maintain back-up on daily basis of such books
of account and other relevant books and papers maintained in electronic mode that should be accessible in India at all the time.
Also, the Companies are required to create backup of accounts on servers physically located in India on a daily basis.

The books of account along with other relevant records and papers of the Company are maintained in electronic mode. These
are readily accessible in India at all times however backup is not maintained in India and is presently maintained in servers in
Singapore.

48 The prescribed CSR expenditure required to be spent in the year 2025-2026 as per the Companies Act, 2013 is Rs. Nil (Rs. Nil
for the year ended 2024-2025), in view of average net profits of the Company being Rs. Nil calculated under section 198 of the
Act based on last three financial years.

49 Figures for the previous period are rearranged, wherever necessary, to conform to the figures of the current period. The same does
not have any material impact on the financial statements.