Provisions

A provision is recognised when the Company has a
present obligation as a result of past event, it is probable
that an outflow of resources embodying economic
benefits will be required to settle the obligation and
a reliable estimate can be made of the amount of the
obligation. If the effect of the time value of money is
material, provisions are discounted using a current pre-tax
rate that reflects, when appropriate, the risks specific to
the liability. When discounting is used, the increase in
the provision due to the passage of time is recognised
as a finance cost. These estimates are reviewed at
each reporting date and adjusted to reflect the current
best estimates.

Land Restoration

An obligation for restoration, arises when environmental
disturbance is caused by the development or ongoing
extraction from mines. Costs arising from restoration
at closure of the mines and other site preparation work
are provided for based on their discounted net present
value, with a corresponding amount being capitalised
at the start of each project. The amount provided for
is recognised, as soon as the obligation to incur such
costs arises. These costs are charged to the Standalone
Statement of Profit and Loss over the life of the
operation through the depreciation of the asset and the
unwinding of the discount on the provision. The costs
are reviewed periodically and are adjusted to reflect
known developments which may have an impact on the
cost or life of operations. The cost of the related asset
is adjusted for changes in the provision due to factors
such as updated cost estimates and revisions to discount
rates. The adjusted cost of the asset is depreciated
prospectively over the lives of the assets to which they
relate. The unwinding of the discount is shown as a
finance cost in the Standalone Statement of Profit
and Loss.

Contingent liabilities and Contingent Assets

A contingent liability is a possible obligation that arises
from past events whose existence will be confirmed
by the occurrence or non-occurrence of one or more
uncertain future events beyond the control of the
Company or a present obligation that is not recognised
because it is not probable that an outflow of resources
will be required to settle the obligation. A contingent
liability also arises in extremely rare cases where there is
a liability that cannot be recognised because it cannot
be measured reliably. The Company does not recognise
a contingent liability but discloses its existence in the
Standalone financial statements. It is reviewed at each
balance sheet date.

Contingent assets are not recognised in Standalone
financial statements since this may result in the
recognition of income that may never be realised.
However, when the realisation of income is virtually
certain, then the related asset is not a contingent asset
and is recognised. A contingent asset is disclosed, in
Standalone financial statements, where an inflow of
economic benefits is probable. It is reviewed at each
balance sheet date.

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in
hand and short-term deposits with an original maturity of
three months or less, which are subject to an insignificant
risk of changes in value and are also used for the purpose
of Statement of Cash Flows, as these are considered an
integral part of the Company's cash management.

Financial instruments

Recognition and initial measurement:

Trade receivables and debt securities issued are initially
recognised when they are originated. Trade receivables
that do not contain a significant financing component

are measured at transaction price (net of variable
consideration). All other financial assets and liabilities are
recognised are initially recognised when the Company
becomes a party to the contractual provisions of
the instrument.

A Financial asset (unless it is a trade receivable without
a significant financing component) or financial liability
is initially measured at fair value plus or minus, for an
item not at FVTPL, transaction costs that are directly
attributable to its acquisition or issue.

Financial assets - classification and
subsequent measurement:

Financial assets at amortised cost:

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

Financial assets at fair value through other comprehensive
income:

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

Financial assets at fair value through profit or loss:

Financial assets are measured at fair value through profit
or loss unless it is measured at amortised cost or at fair
value through other comprehensive income on initial

recognition. The transaction costs directly attributable
to the acquisition of financial assets and liabilities at fair
value through profit or loss are immediately recognised in
the statement of profit and loss.

Financial liabilities - classification and subsequent
measurement:

Financial liabilities are classified as either financial
liabilities at FVTPL or other financial liabilities.

Financial liabilities at FVTPL:

Financial liabilities are classified as at FVTPL when the
financial liability is held for trading or are designated
upon initial recognition as FVTPL. Gains or losses on
liabilities held for trading are recognised in the Standalone
statement of profit and loss

Derivative financial instruments:

The Company enters into a variety of derivative financial
instruments to manage its exposure to foreign exchange
rate risks including foreign exchange forward contracts.
Derivatives are initially recognised at fair value at the
date the derivative contracts are entered into and are
subsequently remeasured to their fair value at the end
of each reporting period. The resulting gain or loss is
recognised in statement of profit and loss.

Other financial liabilities:

Other financial liabilities (including borrowings and
trade and other payables) are subsequently measured at
amortised cost using 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 discounts estimated
future cash payments (including all fees and points paid
or received that form an integral part of the effective

interest rate, transaction costs and other premiums or
discounts) through the expected life of the financial
liability, or (where appropriate) a shorter period, to the net
carrying amount on initial recognition.

De-recognition of financial instruments

Financial asset:

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

If the Company enters transaction whereby it transfers
assets recognised on its balance sheet but retains
either all or substantially all the risks and rewards
of the transferred assets, the transferred assets are
not derecognised.

Financial liability:

The Company derecognises a financial liability when its
contractual obligations are discharged or cancelled or the
same expires.

The Company also derecognise a financial liability when
its terms are modified and the cash flows under the
modified terms are substantially different. In this case,
a new financial liability based on the modified terms
is recognised at fair value. The difference between the
carrying amount of the financial liability extinguished
and the new financial liability with modified terms is
recognised in the Standalone statement of profit and loss.

Offsetting:

Financial assets and financial liabilities are offset and
the net amount is presented in the Balance Sheet when,
and only when, the Company has a legally enforceable
right to set off the amount and intends to settle them
on a net basis or to realise the asset and settle the
liability simultaneously.

Fair value of financial instruments:

In determining the fair value of its financial instruments,
the Company uses following hierarchy and assumptions
that are based on market conditions and risks existing at
each reporting date.

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

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

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

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
Standalone financial statements on a recurring basis,
the Company determines whether transfers have
occurred between levels in the hierarchy by re-assessing
categorisation (based on the lowest level input that is
significant to the fair value measurement as a whole) at
the end of each reporting period.

When the fair values of financial assets and financial
liabilities recorded in the Standalone financial statements

cannot be measured based on quoted prices in active
markets, their fair value is measured using valuation
techniques including the discounted cash flow model.

The inputs to these models are taken from observable
markets where possible, but where this is not feasible,
a degree of judgements is required in establishing fair
values. Judgements include considerations of inputs such
as liquidity risk, credit risk volatility and discount rates.
Changes in assumptions about these factors could affect
the reported fair value of financial instruments.

Impairment

Financial assets (other than at Fair value through profit
and loss)

The Company assesses at each date of the balance sheet
whether a financial asset or a Company of financial assets
is impaired. Ind AS 109 requires expected credit losses
('ECL') to be measured through a loss allowance. The
Company recognises lifetime expected losses for trade
receivables and contract assets that do not constitute
a financing transaction. For all other financial assets,
expected credit losses are measured at an amount equal
to the 12-month expected credit losses or at an amount
equal to the lifetime expected credit losses if the credit
risk on the financial asset has increased significantly since
initial recognition.

In addition to the provision matrix, the Company
also performs individual assessment of credit risk for
specific customers where there is objective evidence of
increased credit risk. Where such individual assessment
indicates that a trade receivable meets the criteria for
being classified as credit impaired under Ind AS 109, the
Company recognises a loss allowance based on lifetime
ECL and discloses such credit impaired trade receivables
separately in the Standalone balance sheet.

A financial asset is credit-impaired when one or more
events that have a detrimental impact on the estimated

future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes
the following observable data:

a. significant financial difficulty of the debtor

b. a breach of contract, such as a default or 3 years
past due

c. it is probable that the debtor will enter bankruptcy or
other financial reorganization

d. the disappearance of an active market for a security
because of financial difficulties

The Company considers a financial asset to be in
default when:

a. the customer is unlikely to pay its credit obligations
to the Company in full, without recourse by the
Company to actions such as realising security (if any
is held); or

b. the financial asset is more than 90 days past due

The ECL loss allowance (or reversal) during the year is
recognised in the Standalone statement of profit and loss.
The Company write-off's the receivables only on
completion of the legal proceedings or if it is certain that
the balance will not be recoverable.

Goodwill

Goodwill is measured at cost, being the excess of the
sum of the consideration transferred, the amount of any
non-controlling interests in the acquiree, and the fair
value of the acquirer's previously held equity interest in
the acquiree (if any) over the net of the acquisitiondate
amounts of the identifiable assets acquired and liabilities
assumed. After initial recognition, goodwill is measured
at cost less any accumulated impairment losses.

Goodwill is not amortised but is reviewed for impairment
atleast annually. For the purpose of impairment testing,
goodwill acquired in a business combination is, from the
acquisition date, allocated to each of the Company's cash¬
generating units expected to benefit from the synergies
of the combination, irrespective of whether other assets
or liabilities of the acquiree are assigned to those units. A
cash generating unit to which goodwill has been allocated
is tested for impairment annually, or more frequently
when there is an indication that the unit may be impaired.
If the recoverable amount of the cash generating unit is
less than its carrying amount of the unit, the impairment
loss is allocated first to reduce the carrying amount of any
goodwill allocated to the unit and then to the other assets
of the unit pro-rata based on the carrying amount of
each asset in the unit. Any impairment loss for goodwill
is recognised in profit and loss. Any impairment loss
recognised for goodwill is not reversed in subsequent
periods. Where goodwill has been allocated to a cash
generating unit and part of the operation within that unit
is disposed of, the goodwill associated with the disposed
operation is included in the carrying amount of the
operation when determining the gain or loss on disposal.
Goodwill disposed in these circumstances is measured
based on the relative values of the disposed operation
and the portion of the cash-generating unit retained.

Exceptional items

Exceptional items refer to items of income or expense
within the Standalone statement of profit and loss from
ordinary activities which are non-recurring and are of such
size, nature or incidence that their separate disclosure
is considered necessary to explain the performance of
the Company.

Statement of Cash Flows

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

from operating, investing and financing activities of the
Company are segregated.

Other 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 recognised using effective
interest rate applicable, which is the rate that exactly
discounts estimated future cash receipts through the
expected life of the financial asset to that asset's net
carrying amount on initial recognition. Interest income is
included in other income in the Standalone Statement of
Profit and Loss.

Events after reporting date

Where events occurring after the balance sheet date
provide evidence of conditions that existed at the end
of the reporting period, the impact of such events is
adjusted within the financial statements. Otherwise,
events after the balance sheet date of material size or
nature are only disclosed.

Recent pronouncements

The 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, MCA notified amendments to Ind AS
21 - The Effects of Changes in Foreign Exchange
Rates, applicable w.e.f. April 1, 2025. The Company has
reviewed the amendment and based on its evaluation
has determined that it does not have any significant
impact in its financial statements.

In August 2025, MCA notified the following

amendments to:

a. Ind AS 1, Presentation of Financial Statements,
applicable w.e.f. April 1, 2025 - The amendment
relates to classification of liabilities as current

or non-current and non-current liabilities with
covenants. In the context of classifying a liability as
current, it removes the requirement of existence of
a right to defer settlement for at least 12 months
after the reporting date and instead requires
that the said right should exist on the reporting
date and have substance. The amendment also
introduces guidance on classification of liabilities
with covenants. The has reviewed the amendments
and made appropriate disclosures in its financial
statements including classification of current and
non-current liabilities.

b. Ind AS 7, Statement of Cash Flows and Ind AS
107, Financial Instruments: Disclosures, applicable
w.e.f. April 1, 2025 - The amendment in Ind AS 7
requires to inform users of financial statements of
the existence of supplier finance arrangements and
explain the nature of the arrangements, the carrying
amount of liabilities and the range of payment

due dates. Ind AS 107 has been amended to add
supplier- finance arrangements as a factor that may
cause concentration of liquidity risk. The Company
has reviewed the amendment and made appropriate
disclosures in its financial statements.

c. Ind AS 12, International Tax Reform - Pillar
Two Model Rules applicable immediately - The
amendments provide a temporary mandatory
relief from deferred tax accounting for top-up tax
and disclose that they have applied the relief. This

relief is immediate and applies retrospectively. The
Company has reviewed the amendment and based
on its evaluation has determined that it does not
have any impact in its financial statements.

The following are the notified amendments to the

standards but not yet effective:

a. Ind AS 1, Presentation of Financial Statements,
applicable w.e.f. April 1, 2026 - when an entity
breaches any 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, it classifies the liability
as current, even if 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. An entity
classifies the liability as current because, at the
end of the reporting period, it does not have the
right to defer its settlement for at least 12 months
after that date. However, an entity classifies the
liability as non-current if the lender agreed by the
end of the reporting period to provide a period of
grace ending at least 12 months after the reporting
period, within which the entity can rectify the
breach and during which the lender cannot demand
immediate repayment.

This amendment is to be applied retrospectively
for annual reporting periods beginning on or after 1
April 2026, in accordance with Ind AS 8, Accounting
Policies, Changes in Accounting Estimates
and Errors.

The Company does not expect this amendment
to have any significant impact in its
financial statements.

As at March 31, 2026, the estimated cash flows for a period of 5 years were developed using
internal forecasts, and the discount rate is a pre tax measure estimated for 5 years based on the
historical industry weighted average cost of capital of ~ 1736% (March 31, 2025: ~ 18.66%). The
post tax discount rate is ~ 12.99% (March 31, 2025: ~ 12.14%). While determining the cashflows,
Company has considered the factors such as cement sales volume growth, price per bag, input
cost expectation etc. The Company believes that any reasonably possible change in the key
assumptions on which a recoverable amount is based would not cause the aggregate carrying
amount to exceed the aggregate recoverable amount of the respective cash-generating unit.

As per the current business operation, Company expects stable state on the factors and same
is supported by the cement industry outlook. Based on the Company impairment testing, the
recoverable amount of the CGU's exceeds its carrying amount including goodwill. Therefore, no
impairment loss was recognized during the year ended March 31, 2026. Sensitivity analysis with
1% change in growth rate and weighted average cost of capital also indicates that no impairment
required on carrying amount of goodwill.

Notes:

(i) Includes investment of H 535 (March 31, 2025: H 470) on account of fair valuation of corporate guarantee given
by the Company on behalf of Sagar Cements (M) Private Limited, a subsidiary Company.

(ii) Includes investment of H 1,046 (March 31, 2025: H 719) on account of fair valuation of corporate guarantee
given by the Company on behalf of Andhra Cements Limited, a subsidiary Company.

(iii) The Company has complied with the number of layers prescribed under clause 87 of Section 2 of the
Companies Act, 2013 read with Companies (Restriction on number of layers) Rules, 2017

(iv) 15,10,972 (as at March 31, 2025: 15,10,972) number of shares held as investments in Sagar Cements (M)

Private Limited with carrying amount of H 7,823 (as at March 31, 2025: H 7823) and 2,18,90,883 (as at March 31,
2025: 2,18,90,883) number of shares held as investments in Andhra Cements Limited with carrying amount of

H 8,056 (as at March 31, 2025: H 8,056) have been pledged with the lenders towards borrowings availed by the
respective subsidiaries.

Notes:

Trade receivables are pledged against the borrowings of the Company as referred in Note 15.

Information about the Company's exposure to credit risk, market risk and fair value measurement is included in Note 31.

No trade receivables, other than those disclosed in note 34, are due from directors or other
officers of the Company either severally or jointly with any other person nor any trade receivables
are due from firms or private companies respectively in which any director is a partner, a director
or a member.

The above secured trade receivables include receivables considered good in respect of which the
Company holds guarantees from banks amounting to H 1,929 (March 31, 2025: H 2,205).

There were no unbilled trade receivables as at March 31, 2026 and as at March 31, 2025, hence the same is not disclosed in the ageing breakup.

The Company always measures the loss allowance for trade receivables at an amount equal to lifetime ECL. The expected credit losses on trade receivables are estimated using a provision matrix
by reference to past default experience of the debtor and an analysis of the debtor's current financial position, adjusted for factors that are specific to the debtors, general economic conditions of the
industry in which the debtors operate, and an assessment of both the current as well as the forecast direction of conditions at the reporting date. The Company has recognised a loss allowance of
100 per cent against all receivables over three years past due because historical experience has indicated that these receivables are generally not recoverable.

As per simplified approach, the Company makes provision of expected credit losses on trade receivables using a provision matrix to mitigate the risk of default payments and makes appropriate
provision at each reporting date wherever outstanding is for longer period and involves higher risk.

(B) RIGHTS, PREFERENCES AND RESTRICTIONS ATTACHED TO THE EQUITY SHARES:

The Company has a single class of equity shares. Accordingly, all equity shares rank equally
with regard to dividends and share in the Company's residual assets on winding up. The
equity shareholders are entitled to receive dividend as declared from time to time, subject
to preferential right of preference shareholders to payment of dividend if issued. The voting
rights of an equity shareholder on a poll (not on show of hands) are in proportion to the
share of paid-up equity share capital of the Company. Voting rights cannot be exercised
in respect of shares on which any call or other sums presently payable has not been paid.
Failure to pay any amount called up on shares may lead to their forfeiture. On winding up of
the Company, the holders of equity shares will be entitled to receive the residual assets of
the Company, remaining after distribution of all preferential amounts, in proportion to the
number of equity shares held.

NATURE OF RESERVES

(a) Capital Reserve

This represents subsidies received from the government.

(b) Securities premium

Amounts received on issue of shares in excess of the par value has been classified as
securities premium. The utilisation of securities premium is governed by the Section 52 of
the Companies Act, 2013.

(c) General reserve

The general reserve is used from time to time to transfer profits from retained earnings
for appropriation purposes. There is no policy of regular transfer. As the general reserve
is created by a transfer from one component of equity to another and is not an item of
other comprehensive income, items included in the general reserve will not be reclassified
subsequently to profit or loss.

(d) Retained earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to
general reserve, dividends paid to shareholders. Retained earnings is a free reserve available
to the Company.

(e) Remeasurements of the net defined benefits plan

Remeasurements of the net defined benefits plan reserve comprises the cumulative net
gains/ losses on actuarial valuation of post-employment obligations.

1. Term loan is secured by first pari-passu charge on the property, plant and equipment owned by or belonging to
the Company both present and future excluding fixed assets pertaining to grinding unit at Bayyavaram, plant
and machinery of Waste heat recovery power plant at Mattampally and vehicles purchased under hire purchase
agreements, and by second charge on the current assets of the Company and are guaranteed by Dr S. Anand
Reddy, Managing Director and S. Sreekanth Reddy, Joint Managing Director.

2. Term loan is secured by exclusive charge of all property, plant and equipment of the grinding unit at Bayyavaram
both present and future and by second pari-passu charge on the current assets of the Company and are
guaranteed by Dr. S. Anand Reddy - Managing Director and S. Sreekanth Reddy - Joint Managing Director.

3. Term loan is secured by exclusive charge of all property, plant and equipment of the grinding unit at Bayyavaram
both present and future and are guaranteed by Dr. S. Anand Reddy - Managing Director and S. Sreekanth Reddy -
Joint Managing Director.

4. Term loan is secured by exclusive charge on the assets of 6.00 MW Waste heat recovery power plant,
hypothecation of plant & machinery and are guaranteed by Dr. S. Anand Reddy - Managing Director and S.
Sreekanth Reddy - Joint Managing Director.

5. Term loan is secured by second pari-passu charge against all current assets and property, plant and equipment of
the Company, present and future, excluding vehicles purchased under hire purchase agreements and excluding
property, plant and equipment pertaining to Mattampally WHR plant and 100% credit guarantee by National
Credit Guarantee Trustee Company Ltd.

6. Term loan is secured by second pari-passu charge on the property, plant & equipment owned by or belonging
to the Company both present and future excluding fixed assets pertaining to grinding unit at Bayyavaram, plant
and machinery of Waste heat recovery power plant at Mattampally and vehicles purchased under hire purchase
agreements, and on the current assets of the Company and are guaranteed by Dr. S. Anand Reddy, Managing
Director and S. Sreekanth Reddy, Joint Managing Director.

7 Term loan is secured by pari-passu charge on the property, plant and equipment (including mining land) owned
by or belonging to the Company, both present and future, and by a second charge on the current assets of
the Company and are guaranteed by Dr. S. Anand Reddy - Managing Director and S. Sreekanth Reddy - Joint
Managing Director.

8. This term loan is secured by first pari-passu charge on asset to be created through proceeds of the loan and
second pari-passu charge on the property, plant and equipment (including mining land) owned by or belonging
to the Company, both present and future, and by a second charge on the current assets of the Company and are
guaranteed by National credit guarantee trustee Ltd.

9. Term loan is secured by first pari-passu charge on the property, plant and equipment owned by or belonging to
the Company both present and future, hypothecation of all rights, title and interests of the Company under all
plant documents, contracts, insurance policies, permits/ approvals etc related to the plant, to which the Company
is party and can be legally assigned and are guaranteed by Dr S. Anand Reddy, Managing Director and S.
Sreekanth Reddy, Joint Managing Director.

10. Term loan is secured by exclusive charge on Plant and machinery, equipment and other Fixed assets created
out of our term loan. To fund the project cost of H 80.40 crore to be incurred towards execution of Waste Heat
Recovery System (WHRS) Power Generation project at Gudipadu Cement unit in Andhra Pradesh.

11. Term loan is secured by first pari-passu charge against all current assets, present and future, and Second pari-
passu charge on property, plant and equipment (movable and immovable) excluding plant and equipment of
grinding unit at Bayyavaram and plant and machinery of Waste heat recovery power plant at Mattampally unit of
the Company, present and future, and are guaranteed by Dr. S. Anand Reddy, Managing Director and S. Sreekanth
Reddy, Joint Managing Director and negative lien on Jajpur unit.

12. Vehicle Loans from various banks/financial institutions are secured by the hypothecation of specific assets
purchased from those loans.

13. The Company has not made defaults in repayment of principal and interest on the above loans. The Company has
used the borrowings for the purposes for which it was taken.

14. Information about the Company's exposure to liquidity risk, market risk and fair value measurement is included in
Note 31.

Note (ii):

For the year ended March 31, 2026, there has been a deviation with respect to certain financial ratios of the
Company in comparison with the prescribed limits mentioned in the loan sanctioned letters disclosed under non
current borrowings. Prior to the reporting date, the management has however obtained a waiver from the lenders
on compliance with such financial ratios and that the existing repayment schedules as per the sanction terms would
continue. Accordingly, borrowings continue to be classified in accordance with the terms of the repayment schedule
agreed with the lenders.

Notes:

1. The Company has availed cash credit facilities from State bank of India. This facility is secured by first pari-passu
charge against all current assets, present and future, and by second pari-passu charge on the entire property, plant
and equipment of the Company including land and building, excluding Bayyavaram plant and Mattampally WHR
plant and are guaranteed by Dr. S. Anand Reddy, Managing Director and S. Sreekanth Reddy, Joint Managing
Director. The loans are repayable on demand and carries interest @ 10.45% p.a. to 11.95% p.a. (2024-25: 9.40%
p.a. to 10.45% p.a.).

2. The Company has availed cash credit facilities from Axis Bank Limited. This facility is secured by first pari-passu
charge against all current assets, present and future, and by second pari-passu charge on the property, plant and
equipment of the Company (excluding plant and equipment of grinding unit at Bayyavaram and WHR unit) and
are guaranteed by Dr. S. Anand Reddy, Managing Director and S. Sreekanth Reddy, Joint Managing Director. The
loans are repayable on demand and carries interest @ 8.95% p.a. to 9.70% p.a. (2024-25: 9.40% p.a. to 9.70% p.a.).

3. The Company has availed cash credit facilities from HDFC Bank Limited. This facility is secured by first pari-passu
charge against all current assets, present and future, and by second pari-passu charge on the property, plant

and equipment of the Company including land and building (excluding plant and equipment of grinding unit at
Bayyavaram and WHR unit), and post dated cheques aggregating H 1,000 from any working capital banker and
are guaranteed by S. Sreekanth Reddy, Joint Managing Director. The loans are repayable on demand and carries
interest @ 9.25% p.a. to 10.00% p.a. (2024-25: 8.45% p.a. to 10.01% p.a.).

4. The Company has availed cash credit facilities from The Federal Bank Limited. This facility is secured by first
pari-passu charge against all current assets, present and future, and by second pari-passu charge on property,
plant and equipment (movable and immovable, including mining land) of the Company, present and future, and
are guaranteed by Dr. S. Anand Reddy, Managing Director and S. Sreekanth Reddy, Joint Managing Director. The
loans are repayable on demand and carries interest @ 7.90% p.a. to 8.50% p.a. (2024-25: 8.50% p.a. to 9.10% p.a.).

5. The Company has used the borrowings for the purposes for which it was taken.

6. The quarterly returns of current assets filed by the Company with banks are in agreement with the books of
account.

7. The Company has issued 1,500 unrated, listed, secured and redeemable non-convertible debentures of a face
value of H 10 lakhs each aggregating H 15,000 lakhs on a private placement. These debentures carry a coupon
rate of 11.60% p.a.. The Company has appointed IDBI Trusteeship Services Limited as Debenture Trustee which
is also acting as the Security Trustee for aforesaid debenture Holders. The above listed and redeemable non¬
convertible debentures are secured by a first raking charge over: (a) First pari-passu charge on the property, plant
and equipment owned by or belonging to the Company both present and future, situated at certain location. (b)
Second charge on the current assets of the Company. (c) Guaranteed by Dr. S. Anand Reddy, Managing Director
and S. Sreekanth Reddy, Director. These debentures were redeemed during the year. The Loan is fully repaid
during the year. Further, the charges against the Company's assets were satisfied as at March 31, 2026.

PROVISION FOR LAND RESTORATION COSTS

The activities of the Company involve mining of land taken under lease. In terms of relevant
statutes, the mining areas would require restoration at the end of the mining lease. The future
restoration expenses are affected by a number of uncertainties, such as, technology, timing
etc. Because of the long-term nature of the liability, the greatest uncertainty in estimating the
provision is the costs that will be incurred. In particular, the Company has assumed that the
mine will be restored using technology and materials that are currently available. The provision
has been calculated using a discount rate of 9.86% p.a. (March 31, 2025: 9.86% p.a), which is
the risk-free rate. As per the requirement of Ind AS 37, the management has estimated such
future expenses on a best judgment basis and provision thereof has been made in the accounts
at their present value. The table below gives information about movement in land restoration
cost provisions.

Note:

(i) The Company is carrying an amount of H 9,579 (March 31, 2025: H 13,502) as deferred tax assets on carry
forward of business losses, unused tax credits and unabsorbed depreciation.

The ultimate realisation of deferred income tax assets is dependent upon the generation of future taxable
income during the periods in which the temporary differences become deductible. Based on the projections for
future taxable income over the periods, the Company has recognised deferred tax assets as there is convincing
evidence that sufficient taxable profit will be available against which the business loss, unused tax credits
and unabsorbed depreciation can be utilised by the entity. It is expected that any reversals of the deferred tax
liability would be offset against the reversal of the deferred tax assets.

(ii) During the year, the Company has exercised the option to be taxed under Section 115BAA of the Income-tax
Act, 1961. Accordingly, deferred tax assets and liabilities have been remeasured using the tax rates expected to
apply in the periods in which the temporary differences are anticipated to reverse. The consequential impact
arising from such remeasurement has been recognised in the Statement of Profit and Loss.

ii) The contingent liabilities disclosed above include, wherever applicable, the estimated
interest amounting to H 1,606 that may arise on the underlying obligations. The
recognition and measurement of such interest have been considered in accordance
with the principles outlined under Ind AS 37 - Provisions, Contingent Liabilities and
Contingent Assets, read with other relevant Ind AS guidance. The interest component
included in the contingent liabilities is based on management's best estimate of the
potential outflow of economic resources, considering the facts of each case, applicable
contractual terms, and interpretations of relevant laws and regulations. Such estimates
involve judgment, particularly with respect to the timing, applicability, and rate of
interest under the respective statutes. The amounts disclosed are subject to inherent
uncertainties and may vary based on the outcome of ongoing proceedings, changes in
legal interpretations, or future judicial pronouncements.

iii) Pending resolution of the respective proceedings, it is not practicable for the Company to
estimate the timings of cash outflows, if any, in respect of the above as it is determinable
only on receipt of judgements/ decisions pending with various forums/ authorities.

31. FINANCIAL INSTRUMENTS:

The material accounting policies, including the criteria for recognition, the basis for
measurement and the basis on which income and expenses are recognized, in respect of
each class of financial asset, financial liability and equity instrument are disclosed in Note
1(b)(xvii) to the financial statements.

(I) CAPITAL MANAGEMENT

For the purpose of the Company's capital management, capital (total equity) includes
issued equity capital, securities premium and all other equity reserves attributable to the
equity holders of the parent. The primary objective of the Company's capital management
is to maximise the shareholder value. Management monitors the return on capital, as
well as the level of dividends to ordinary shareholders. The Company manages its capital
structure and makes adjustments in light of changes in economic conditions and the
requirements of the financial covenants. To maintain or adjust the capital structure, the
Company may adjust the dividend payment to shareholders, return capital to shareholders
or issue new shares. The Company monitors capital using debt-equity ratio, which is total
debt less cash and cash equivalents and other bank balances divided by total equity

The Company's debt to equity ratio i.e. capital gearing ratio as at March 31, 2026 and
March 31, 2025 is as follows:

b) Fair value measurements

Set out above, is the comparison of the fair values of the financial assets and liabilities
included at the amount at which the instrument could be exchanged in an orderly
transaction in the principal (or most advantageous) market at measurement date under the
current market condition regardless of whether that price is directly observable or estimated
using other valuation techniques. The Company has established the following fair value
hierarchy that categorises the values into 3 levels.

The inputs to valuation techniques used to measure fair value of financial instruments are:
Level 1: This hierarchy uses quoted (unadjusted) prices in active markets for identical assets
or liabilities. The fair value of all securities which are traded in the stock exchanges is valued
using the closing price or dealer quotations as at the reporting date. The are no investments
as on March 31, 2026 and March 31, 2025.

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

Level 3: If one or more of the significant inputs is not based on observable market data, the
instrument is included in Level 3.

The Company's board of directors has overall responsibility for the establishment and
oversight of the Company's risk management framework. The board of directors has
established the risk management committee, which is responsible for developing and
monitoring the Company's risk management policies. The committee reports regularly to
the board of directors on its activities.

The Company has a Risk management policy, and its management is supported by a Risk
management committee that advises on risks and the appropriate financial risk governance
framework for the Company. The Risk management committee provides assurance to the
Company's management that the Company's risk activities are governed by appropriate
policies and procedures and that financial risks are identified, measured and managed in
accordance with the Company's policies and risk objectives. The Board of Directors reviews
and agrees policies for managing each of these risks, which are summarised below.

Market risk is the risk that the fair value of future cash flows of a financial instrument will
fluctuate because of changes in market prices. Market risk comprises three types of risk:
currency risk and interest rate risk. Financial instruments affected by market risk include
trade payables, trade receivables, borrowings, etc.

(i) Interest rate risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in market rates.

The Company's exposure to the risk of changes in market rates relates primarily to the
Company's non-current debt obligations with floating interest rates.

Moreover, the short-term borrowings of the Company do not have a significant fair
value or cash flow interest rate risk due to their short tenure.

As the Company does not have exposure to any floating-interest bearing assets, or any
significant long-term fixed-interest bearing assets, its interest income and related cash
inflows are not affected by changes in market interest rates.

The Company constantly monitors the credit markets and rebalances its financing
strategies to achieve an optimal maturity profile and financing cost. The Company has
not used any interest rate derivatives.

Credit risk:

Credit risk arises when a customer or counterparty does 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 / investing activities, including deposits with banks and investments in
equity securities. The Company has no significant concentration of credit risk with any
counterparty. Credit exposure is controlled by counterparty limits that are reviewed and
approved by the management.

Trade receivables: Customer credit risk is managed by the respective department subject
to Company's policy, procedures and control relating to customer credit risk management.
Credit quality of a customer is assessed based on individual credit limits as defined by
the Company. Outstanding customer receivables are regularly monitored. An impairment
analysis is performed at each reporting date on an individual basis. The calculation is based
on historical data of credit losses. The Company does not have higher concentration of
credit risks since no single customer accounted for 10% or more of the Company's net
sales. Refer Note 10 for disclosure related to Expected credit losses.

Cash and cash equivalents and deposits with banks: Credit Risk on cash and cash
equivalent and term deposits is generally low as these are kept with banks who have been
assigned high credit rating by international and domestic rating agencies. Investments of
surplus funds are made only with Financial Institutions approved by Reserve Bank India.
Balances with banks were not past due or impaired as at year end. Other than the details
disclosed below, other financial assets are not past due and not impaired, there were no
indications of default in repayment as at year end.

Loans: All of the Company's loans at amortised cost are considered to have low credit
risk, and the loss allowance, if any, is limited to 12 months' expected losses. Management
considers instruments to be low credit risk when they have a low risk of default, and
the borrower has a strong capacity to meet its contractual cash flow obligations in the
near term.

Security deposits: It consists of rent, electricity and other deposits. The Group does
not expect any financial loss as the said deposits are given only to credible vendors/
service providers.

Credit Risk on Derivative Instruments is generally low as Company enters into the
Derivative Contracts with the reputed Banks and Financial Institutions.

Liquidity risk is the risk that the Company may encounter difficulty in meeting its
obligations associated with financial liabilities as they fall due. The Company's treasury
department is responsible for liquidity, funding as well as settlement management. In
addition, processes and policies related to such risks are overseen by senior management.
The Company manages liquidity risk by maintaining adequate cash and cash equivalents,
monitoring forecast and actual cash flows, and aligning the maturity profiles of financial
assets and liabilities.

During the year ended March 31, 2026, there were deviations in compliance with certain
financial ratios, under the Company's borrowing arrangements. These deviations did not
result in any payment defaults. Prior to the reporting date, the Company has obtained
appropriate waivers from its lenders for such non-compliances. Accordingly, the borrowings
continue to be classified in accordance with their contractual terms of repayment.

The Management monitors the Company's liquidity position on an ongoing basis and
believes that the Company has adequate resources, including expected cash flows from
operations and available credit facilities, to meet its financial obligations as they fall due.

33. GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS:

The employee benefit schemes are as under:

(I) DEFINED CONTRIBUTION PLAN:

Provident Fund

The Company makes provident fund contributions which are defined contribution plans for
qualifying employees. Under the scheme, the Company is required to contribute a specified
percentage of the payroll costs to fund the benefits. These contributions are made to the
Fund administered and managed by the Government of India. The Company's monthly
contributions are charged to the Statement of Profit and Loss in the period they are
incurred. Total expense recognized during the year aggregated H 436 (2024-25: H 414).

Superannuation Fund

Few directors receive benefit under a Superannuation scheme which is a defined
contribution scheme wherein the director has an option to choose the percentage of
contribution in between 5% to 15% of the basic salary of the covered employee. These
contributions are made to a fund administrated by Life Insurance Corporation of India.

The Company's monthly contributions are charged to the Statement of Profit and Loss in
the period they are incurred. Total expense recognized during the year aggregated H 86
(2024-25: H 66).

Employee State Insurance

The Company makes employee state insurance contributions which are defined
contribution plans for qualifying employees. Under the scheme, the Company is required
to contribute a specified percentage of the payroll costs to fund the benefits. These
contributions are made to the funds administered and managed by the Government
of India. The company's monthly contributions are charged to the Statement of Profit
and Loss in the period they are incurred. The total expense recognized during the year
aggregated H 2 (2024-25: H 2).

(II) DEFINED BENEFIT PLAN:

Gratuity:

The Company has a defined retirement benefit gratuity plan. The gratuity plan is
governed by the Code of Social Security, 2020. Under the Code of Social Security, 2020,
employee who has completed five years of service is entitled to specific benefit. The
scheme is funded with insurance companies in the form of qualifying insurance policy for
employees. The Gruity plan is administered by the Life Insurance Corporation of India (LIC)
through trust.

The defined benefit plan exposes the Company to actuarial risk such as longevity risk,
currency risk, interest rate risk and market risk.

The following table sets out the funded status of the gratuity plan and the amounts
recognized in the Company's financial statements as per actuarial valuation as at March 31,
2026 and March 31, 2025:

g) Sensitivity Analysis:

For presenting the sensitivities, the present value of the defined benefit obligation has
been calculated using the projected unit credit method at the end of the reporting
period, which is the same as that applied in calculating the defined benefit obligation
presented under net defined liability. Reasonably possible changes at the reporting
date to one of the relevant actuarial assumptions, holding other assumptions constant,
would have affected the defined benefit obligation by the amounts shown below.
There was no change in the methods and assumptions used in the preparation of the
sensitivity analysis from previous year.

i) Asset Liability matching strategy: The money contributed by the Company to the
Gratuity fund to finance the liabilities of the plan has to be invested. The trustees of
the plan have outsourced the investment management of the fund to an insurance
Company. The insurance Company in turn manages these funds as per the mandate
provided to them by the trustees and the asset allocation which is within the
permissible limits prescribed in the insurance regulations. Due to the restrictions in
the type of investments that can be held by the fund, it is not possible to explicitly
follow an asset liability matching strategy. There is no compulsion on the part of the
Company to fully refund the liability of the Plan. The Company's philosophy is to fund
these benefits based on its own liquidity and the level of underfunding of the plan.

During the year, the Company has provided an unconditional support letter to the Andhra
Cements Limited, Subsidiary Company.

35. LEASE

The Company has lease contracts for various items of plant and machinery, Leasehold
land and buildings used in its operations with lease terms between 2 and 69 years. The
Company's obligations under its leases are secured by the lessor's title to the leased assets.
The Company is restricted from assigning and subleasing the leased assets.

The Company also has certain leases of buildings with lease terms of 12 months or less.
The Company applies the 'short-term lease' recognition exemptions for these leases. There
are no low-value or variable lease expenses for the Company.

For building leases, the Company has used an incremental borrowing rate determined
based on its average borrowing cost adjusted for lease specific factors.

For certain plant and machinery leases, where the fair value or cost of the underlying asset
and lease payment structure are available in the lease arrangement, the interest rate implicit
in the lease has been determined and used for measurement of the lease liability.

37. DETAILS OF CORPORATE SOCIAL RESPONSIBILITY (CSR) EXPENDITURE

As per Section 135 of the Companies Act, 2013, a Corporate Social Responsibility (CSR)
committee has been formed by the Company and the amount needs to be spent by
the Company for the year is 2% of average net profits for previous three financial years,
calculated as per Section 198 of the Companies Act, 2013. The areas for CSR activities
are promoting sports, education, medical and other social projects. All these activities are
covered under Schedule VII to the Companies Act, 2013. The details of amount spent are:

The amount of revenue recognised during the year against the advance from
customers outstanding at the beginning of the year is H 4,075 (March 31, 2025:

H 2,659). There was no revenue recognised in the current reporting period that related
to performance obligations that were satisfied in a prior year.

39. DIVIDEND

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

The Company declares and pays dividend in Indian rupees. Companies are required to pay/
distribute dividend after deducting applicable withholding income taxes.

The amount of dividend recognized as distribution to equity shareholders in accordance
with Companies Act, 2013 is as follows:

Notes:

1. During the financial year ended March 31, 2026, there had been an increase in the sales price when compared
to the previous financial year, this resulted in an increase in the operating margins, resulting into variations in
ratios as reported above.

43. Operating segments are components of the Company that engages in business activities
from which it may earn revenues and incur expenses whose operating results are regularly
reviewed by the Company's Chief Operating Decision Maker (CODM) to make decisions
about resources to be allocated to the segment and assess its performance and for which
discrete information is available. The management has considered that the Company has
a single reportable segment based on nature of products, production process, regulatory
environment, customers and distribution methods. Further, the Company is engaged in
single product line of manufacturing and selling cement and its customers and non-current
assets are located in India only.

44. On November 21, 2025, the Government of India notified 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 (collectively referred to as "the
Labour Codes”), subsuming the existing labour laws. Further, the Ministry of Labour and
Employment has notified the Rules under the said Codes on May 8, 2026.

The Company has assessed the potential impact of the aforesaid Labour Codes based on
the provisions notified, the Rules framed thereunder, related clarifications and legal opinion
obtained, in accordance with the guidance issued by the Institute of Chartered Accountants
of India.

Based on such assessment, there is no incremental impact identified on the Company's
obligations towards gratuity and compensated absences as at the reporting date.

45. The Board of Directors of the Company in their meeting on March 30, 2026 has accorded
in-principle approval for the proposed merger of its subsidiary Andhra Cements Limited
(ACL) with the Company subject to necessary approval from the authorities concerned
under section 230 and 232 of the Companies Act 2013.

46. OTHER STATUTORY INFORMATION

(i) The Company does not have any Benami property, nor any proceeding has been
initiated or pending against the Company for holding any Benami property.

(ii) The Company has not revalued its Property, plant and equipment (including right-of-
use assets) and Intangible assets during the period.

(iii) The Company does not have any charges or satisfaction which is yet to be registered
with registrar of companies beyond the statutory period.

(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during
the financial year.

(v) The Company has not advanced or loaned or invested funds (either from borrowed
funds or share premium or any other sources or kind of funds) to or in any other
person(s) or entity(ies), including foreign entities ("Intermediaries”), with the
understanding, whether recorded in writing or otherwise, that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

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

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

(a) directly or indirectly lend or invest in other persons or entities identified

in any manner whatsoever by or on behalf of the Funding Party (Ultimate
Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

(vii) The Company has not been declared wilful defaulter by any bank or financial
institution or government or any government authority.

(viii) The Company has not surrendered or disclosed any such 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 or any other relevant provisions of the Income Tax Act, 1961.