Note 11. Deferred tax assets (net)

Income Tax expense

Indian companies are subject to Indian income tax on a standalone basis. For each fiscal year, the entity profit and loss is subject to the higher of the regular income tax payable or the Minimum Alternative Tax (“MAT").

Statutory income taxes are assessed based on book profits prepared under generally accepted accounting principles in India adjusted in accordance with the provisions of the (Indian) Income Tax Act, 1961. Statutory income tax is charged at 25% plus a surcharge and education cess.

MAT is assessed on book profits adjusted for certain items as compared to the adjustments followed for assessing regular income tax under normal provisions. MAT for the fiscal year 2025-26 is 15% plus a surcharge and education cess. MAT paid in excess of regular income tax during a year can be set off against regular income taxes within a period of fifteen years succeeding the fiscal year in which MAT credit arises subject to the limits prescribed.

Business loss can be carried forward for a maximum period of eight assessment years immediately succeeding the assessment year to which the loss pertains. Unabsorbed depreciation can be carried forward for an indefinite period.

(i) Rights, preferences and restriction attached to Equity Shares

The Company has only one class of Equity Shares having a par value of ' 2/- per share. Each holder of Equity Share is entitled to one vote per share . Whenever dividend is proposed by the Board of Directors, it is subject to the approval of shareholders.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(ii) Terms/rights attached to 1% Optionally Convertible Cumulative Reedeemable Preference Share (OCCRPS)

The Company has one class of Preference Shares. These shares carry cumulative dividend @ 1%. These OCCRPS are convertible into Equity Shares at the option of the Holder within a period of 18 months from the date of allotment, in one

or more tranches, at a price determined on the relevant date or to be redeemed at par upon maturity after 18 months but within 9 years from date of allotment.

The option to convert the instrument into Equity shares lapsed on 04 August, 2022 ( valuation date ), and hence the nature of instrument changes from this date and will be redeemed at par upon maturity. Accordingly, future estimated cash flows of principal on redemption and cumulative coupon of 1% for 9 years are discounted at pre tax borrowing rate of 9.5% to determine the fair value of the instrument at valuation date.

The difference between the issue price of OCCRPS and the fair value on valuation date ' 4,483.73 Lakhs treated as Equity component of compound financial instrument in the financial statement.

Retained earning :

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings includes re-measurement loss / (gain) on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss. Retained earnings is a free reserve available to the Company.

Capital Reserve :

Reserve is primarily created out of share forfeiture amounting ' 214.50 lakhs and amalgamation reserve amounting ' 566.03 lakhs as per statutory requirement.

Security premium reserve :

The amount received in excess of face value of the equity shares is recognised in securities premium. This reserve is utilised in accordance with the specific provisions of the Companies Act 2013.

Equity component of 1% optionally convertible cumulative redeemable preference shares

Upon expiry of conversion options given in OCCRPS, the Company has computed equity portion (based on concessional rate of interest in OCCRPS) amounting to '4,483.73 lakhs.

19.1 The above unsecured loan from related party has been taken from holding company, M/s. JSW Cement Limited. The tenure of the loan is till 31^st March, 2028 or such extended time as may be mutually agreed and repayable at the end of the tenure. Interest on the loan is payable on monthly basis during the financial year. The rate of interest ranges between 7.97% to 8.58% per annum.

19.2 The company raised fund of ' 10,000.00 lakhs by issue of One Crore 1% optionally convertible cumulative redeemable preference share (OCCRPS) of ' 100 each. These OCCRPS are convertible into Equity Shares at the option of the Holder within a period of 18 months from the date of allotment in one or more tranches, at a price determined on the relevant date or to be redeemed at par upon maturity after 18 months but within 9 years from date of allotment.

The option to convert the instrument into Equity shares lapsed on 04 August, 2022 ( valuation date ), and hence the nature of instrument changes from this date and will be redeemed at par upon maturity. Accordingly, future estimated cash flows of principal on redemption and cumulative coupon of 1% for 9 years are discounted at pre tax borrowing rate of 9.5% to determine the fair value of the instrument at valuation date.

The difference between the issue price of OCCRPS and the fair value on valuation date ' 4,483.73 Lakhs treated as Equity component of compound financial instrument in the financial statement.

19.3 a. Borrowing from Banks have been drawn at floating rate of interest ranging from 7.48% to 9.25% p.a. (31^st March 2025 :

8.48% to 9.25%).

b. Term of Repayment

- 9 years ( 36 quarterly structured repayment) from quarter ending 31 December, 2024 for loan from Axis Bank, Indian Bank & Canara Bank.

- 2 years (bullet repayment) from date of 1^st drawal (7^th March 2025) of loan from DBS Bank Limited i.e. due on 6^th March 2027.

c. Nature of security

- First pari-passu charge on project fixed assets (both movable & immovable) including assignment of lease hold right of the land acquired for mining and project.

- Charge on all intangible assets of the Borrower including but not limited to goodwill, uncalled capital, present & future.

- Unconditional and irrevocable Corporate Guarantee of JSW Cement Limited-Holding company.

25.1 As at 31 March 2026'129.92 lakh (as at 31 March , 2025'130.33 lakh) was recognised as provision for allowance for doubtful debts on trade receivables

25.2 Contract liabilities include short term advances received for sale of goods. The outstanding balances of these accounts increased due to volume increase for both clinker & cement sale orders. Short term advances are detailed in note 24.

25.3 Out of the total contract liabilities, outstanding as on 31 March 2026, ' 8,466.97 lakhs (as at 31 March, 2025'4,682.43 lakhs) will be recognised by 31 March 2027.

25.4 Amount of revenue recognised from amounts included in the contract liabilities at the beginning of the year ' 4,682.43 lakhs (as at 31 March, 2024'13,347.66 lakhs).

Note 34 : Financial instruments A. Capital risk management

The Company being in a capital intensive industry, its objective is to maintain a strong credit rating, healthy capital ratios and establish a capital structure that would maximise the return to stakeholders through optimum mix of debt and equity. The Company's capital requirement is mainly to fund its capacity expansion, repayment of principal and interest on its borrowings. The principal source of funding of the Company has been, and is expected to continue to be, cash generated from its operations supplemented by bank borrowing and funding from holding company. The Company is not subject to any externally imposed capital requirements.

The Company regularly considers other financing and refinancing opportunities to diversify its debt profile, reduce interest cost and align maturity profile of its debt commensurate with life of the asset and closely monitors its judicious allocation amongst competing capital expansion projects and strategic acquisitions, to capture market opportunities at minimum risk.

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

(i) Equity includes all capital and reserves of the Company that are managed as capital

(ii) Debt is defined as long-term, short-term borrowings and 1% Optionally convertible cumulative redeemable Preference Share as described in note 19 and 19A.

The terms of the secured borrowings contain certain financial covenants primarily requiring the Company to maintain certain financial ratios. The Company is in compliance with the said covenants including waivers.

Fair value of financial assets and liabilities measured at amortised cost

The carrying amount of Trade Receivable, Trade Payable, Capital Creditors, Cash and Cash Equivalents ,other Bank Balances, other financial assets and liabilities are considered to be the same as their fair values due to their short term nature. The management considers that the carrying amount of financial assets and financial liabilities recognised in the financial statements approximates their fair values.

Financial risk management

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

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

i) Market risk

ii) Credit risk

iii) Liquidity risk

iv) Commodity risk

i) Market Risk

Market risk is the risk of loss of future earnings, fair value or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, commodity prices and other market changes that effect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, and borrowings.

All such transactions are carried out within the guidelines set by the management.

a) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk because funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the Company are principally denominated in rupees with a mix of fixed and floating rates of interest.

ii) Credit Risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The carrying amount of financial assets represent the maximum credit risk exposure.

(a) Trade receivables

Customer credit risk is managed centrally by the Company and subject to established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an individual credit limits defined in accordance with the assessment.

Trade receivables consist of a large number of customers spread across diverse industries and geographical areas with no significant concentration of credit risk. Customer accounting for 10.00% or more of revenue in any of the years are indicated in Note 36(d). The outstanding trade receivables are regularly monitored and appropriate action is taken for collection of overdue receivables.

The carrying value of financial assets represents the maximum credit risk. The maximum exposure to credit risk was ' 5,014.75 lakhs as at 31 March 2026 and ' 4,730.43 lakhs as at 31 March 2025, being the total carrying value of trade receivables, balances with bank, bank deposits, current investments, loans and other financial assets.

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.

Our historical experience of collecting receivables indicate a low credit risk. Hence, trade receivables are considered to be a single class of financial assets.

iii. Liquidity risk management

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

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

To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting year. The contractual maturity is based on the earliest date on which the Company may be required to pay.

iv. Commodity risk

Commodity price risk for the Company is mainly related to fluctuations in coal and pet coke prices linked to various external factors, which can affect the production cost of the Company. Since the coal and pet coke costs is one of the primary costs drivers, any fluctuation in coal and pet coke prices can lead to drop in operating margin. To manage this risk, the Company take steps to optimize the fuel mix to reduce cost, where additionally, processes and policies related to such risks are reviewed and controlled by senior management and fuel requirement are monitored by the procurement team.

i. Denial of IPR 92 sales tax incentive on production in expanded unit, was challenged at High Court of Odisha and got favourable direction

ii. Erroneous levy of entry tax on limestone captive consumption in plant, challenged at Sales Tax Tribunal

iii. As against Block assessment orders pertaining from AY 2010-11 to AY 2014-15 passed by AO with arbitrary demand, appeal filed with CIT (Appeal). Similarly, appeal filed with CIT(Appeal) against best judgement assessment order passed pertaining to AY 2015-16 demanding tax by arbitrarily disallowing business transactions.

iv. Demanding royalty at higher rate on stacking of Limestone produced at mines. Writ petition filed before High Court of Odhisha challenging the order of Deputy Director Mines.

v. 1% interest on OCCRPS of '10,000 lakhs taken from holding Company

vi. Additional Royalty arbitrarily claimed by BSLC Ltd. for the period March 2021 to August 2025 towards our purchase of limestone.

c) Employee Benefits:

i) Defined Contribution Plan:

Retirement Benefits in the form of Provident Fund which is defined contribution schemes are charged to the statement of profit and loss for the year in which the contributions to the respective funds accrue as per relevant rules / statutes.

Company's contribution to Provident Fund & other fund recognized in statement of Profit and Loss ' 122.95 Lakhs (Previous Year ' 109.45 Lakhs) ( included in note 28)

ii) Defined Benefit Plans

The Company provides for gratuity to its employees in accordance with the code on social security 2020 and as per the Payment of Gratuity Act, 1972. The amount of gratuity shall be payable to an employee on the termination of employment after rendering continuous service for not less than five years, or on their superannuation or resignation. However, in case of death of an employee, the minimum period of five years shall not be required. The amount of gratuity payable on retirement / termination is the employee's last drawn basic salary per month computed proportionately for 15 days salary multiplied by the number of years of service completed. The Company does not fully fund the liability and maintains a target level of funding to be maintained over period of time based on estimations of expected gratuity payments.

No other post-retirement benefits are provided to these employees.

The most recent actuarial valuation and the present value of the defined benefit obligation were carried out at 31 March, 2026 by an independent actuary. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

The estimates of future salary increase considered in actuarial valuation , take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The discount rate is based on the prevailing market yeilds of Government of India securities as at the balance sheet date for estimate term of the obligations.

The sensitivity analys is presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting year, which is the same as that applied in calculating the defined benefit obligation recognised in Balance sheet.

There is no change in the method of valuation for the prior period.

Amounts required to cover end of service benefits at the statement of financial position date are computed pursuant to the applicable Labour Law based on the employees' accumulated period of service and current basic remuneration at that date.

A liability is recognised for benefits accruing to employees in respect to wages and salaries, annual leaves in the period the related services are rendered at the undiscounted amount of benefits expected to be paid in exchange for that services.

vi) Compensated Absences

The Company has a policy on compensated absences with provisions on accumulation and encashment of privilege leave by the employees during employment or on separation from the group due to death, retirement or resignation. The expected cost of contingency leave is determined by actuarial valuation performed by an independent actuary at the balance sheet date using projected unit credit method.

The company also have leave policy as follows :

Privileged Leave (PL) - Unutilised PL balance at the end of the calendar year (31^st December) shall be encashed at the prevailing basic pay and no carry forward is allowed.

Contingency Leave (CoL) - The existing casual leave and sick leave were clubbed together and shall be called as CoL. The annual credit of a contingency leave shall be 14 days for plant locations and 8 days for Corporate and other locations. Maximum accumulation of 30 days is allowed and cannot be encashed.

vii) The Government of India has notified the Code on Social Security, 2020 (“Social Security Code"); the Occupational Safety, Health and Working Conditions Code, 2020; the Industrial Relations Code, 2020 and the Code on Wages, 2019 (collectively, the “Labour Codes") on November 21, 2025. The Ministry of Labour & Employment published draft Central Rules and FAQs to enable assessment of the financial impact due to Labour Codes. In accordance with Ind AS 19 - Employee benefits, changes to employee benefit plans arising from legislative amendments are treated as plan amendments, requiring immediate recognition of past service cost in the Statement of Profit and Loss. This approach is consistent with the guidance issued by the Institute of Chartered Accountants of India. The implementation of the Labour Codes has resulted in an increase of ' 186.04 lakhs in the provision for defined benefit obligations, which has been recognized as an expense in the current reporting period and disclosed as an Exceptional Item in the financial statements for the year ended 31st March, 2026. The Company continues to monitor the finalization of Central and State Rules, as well as Government clarifications on other aspects of the Labour Codes and will incorporate appropriate accounting treatment based on these developments as required.

d. Segment Reporting

The Company is primarily in the business of manufacturing and sale of cement related product, primarily with operations in India and regularly reviewed by the Chief Operating Decision Maker (‘CODM') for assessment of Company's performance and resource allocation. As per IND AS 108 “Operating Segments" specified under Section 133 of the Companies Act 2013, there are no other reportable segment applicable to the company.

Key managerial persons such as Whole Time Director, Chief Financial Officer are in receipt of remuneration from the holding company.

The amount paid for sitting fees to non executive independent director during the period is ' 10.40 lakhs (previous year ' 12.15 lakhs).

Terms & Conditions

Sales :

The sales to related parties are made on terms equivalent to those that prevail in arm's length transactions and in the ordinary course of business. Sales transactions are based on prevailing price list and memorandum of understanding signed with related parties. For the year ended 31 March, 2026, the Company has not recorded any impairment of receivables relating to amounts owed by related parties.

Purchases :

The purchases from related parties are made on terms equivalent to those that prevail in arm's length transactions and in the ordinary course of business. Purchase transactions are made on normal commercial terms and conditions and market rates.

Loan from Related Party :

The company has availed loan from its holding company for general corporate purpose. The loan balance as on 31 March, 2026 amounting ' 80,546.47 lakhs ( balance as on 31 March, 2025'64,031.47 lakhs. The loan is unsecured and carry an interest range between 7.97% to 8.58% per annum and repayable after the end of the tenure.

Corporate Guarantee by Related Party :

The holding company, JSW Cement Limited has issued corporater guarantee to banks on behalf of and in respect of loan availed by the Company.

g. During the year ended March 31, 2026, the Company has incurred loss of '12,553.25 lakhs and as on March 31, 2026, the Company's accumulated loss is ' 55,918.60 lakhs.The Management is hopeful of improving the performance of the company considering the improvement in the plant's operational performance, updated management strategies and business plan. Accordingly, these financial statements continue to be presented on a going concern basis.

h. The Company has been maintaining its books of accounts in the SAP which has feature of recording audit trail of each and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled, throughout the year as required by proviso to sub rule (1) of rule 3 of The Companies (Accounts) Rules, 2014 known as the Companies (Accounts) Amendment Rules, 2021.

The Company did not come across any instance of audit trail feature being tampered with, in respect of accounting software for the period for which the audit trail feature was operating.

Additionally, the audit trail has been preserved by the Company as per the statutory requirements for record retention.

i. Other Statutory information

1. The Company does not have any benami property, where any proceeding has been initiated or pending against the Company for holding any benami property

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

3. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

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

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

4. 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.

5. The Company does not have 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).

6. The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017

7. The Company is not declared wilful defaulter by any bank or financials institution or lender during the year.

8. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

9. Presently no quarterly returns or statements need to be filed by the Company with banks or financial institutions.

10. The Company has used the borrowings from banks and financial institutions for the specific purpose for which it was obtained.

11. The title deeds of all the immovable properties, (other than immovable properties where the Company is the lessee and the lease agreements are duly executed in favour of the Company) disclosed in the financial statements included in property, plant and equipment and capital work-in progress are held in the name of the Company as at the balance sheet date.

12. The Company does not have any transactions with companies which are struck off.

j. As at 31 March 2026; the current liabilities including current maturities of long-term borrowings exceeds current assets of the Company by ' 35,813.24 lakhs (previous year ' 8,038.98 Lakhs). Based on company's business plan and projected cash flows from operations for the financial year 2026-27 and continued availability of financial support from its holding company, the management is confident that the Company would be in a position to service its liabilities in the foreseeable future.

k. The financial statements are approved for issue by the audit committee at its meeting held on 04 May, 2026 and by the board of directors on 04 May, 2026.

l. Previous year's figures have been regrouped / reclassified wherever necessary including those as required in keeping with revised Schedule III amendments.