s PROVISIONS AND CONTINGENT LIABILITIES:

A provision is recognised when an enterprise has a present obligation as a result of past event; it is probable that an outflow
of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not
discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet
date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

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.

t SEGMENT REPORTING:

The Company’s Chief Operating Decision Maker (CODM) examines the Company’s performance from business and geographic
perspective. In accordance with Ind AS-108 - Operating Segments, evaluation by the CODM and based on the nature of activities
performed by the Company, which primarily relates to poultry healthcare and animal healthcare.

3 SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS:

The preparation of the Company’s financial statements requires management to make judgements, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures and the
disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a
material adjustment to the carrying amount of assets or liabilities affected in future periods.

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. The
Company based its assumptions and estimates on parameters available when the financial statements were prepared. 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 (gratuity benefits)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial
valuation. An actuarial valuation involves making various assumptions that may differ from actual developments in the future.
These include the determination of the discount rate, future salary increases 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. In determining the appropriate discount rate for plans operated in
India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post¬
employment benefit obligation.

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

Further details about gratuity obligations are given in note 37.

b Useful life of Property, Plant and Equipment and Intangible assets

Property, Plant and Equipment and Intangible Assets are depreciated/amortised over their estimated useful life, after taking into
account estimated residual value.

Management reviews the estimated useful life and residual values of the assets annually in order to determine the amount
of depreciation/amortisation to be recorded during any reporting period.The useful life and residual values are based on the
Company’s historical experience with similar assets and take into account anticipated technological changes.

The depreciation/amortisation for future periods is revised if there are significant changes from previous estimates.
c Expected Credit Loss

The Company uses a provision matrix to calculate ECLs for trade receivables. The provision rates are based on days past due for
groupings of various customer segments that have similar loss patterns (i.e., by geography, customer relationship, customer type
and rating).

For the purpose of measuring lifetime expected credit loss allowance of trade receivables, the Company has used a practical
expedient as permitted under Ind AS 109. This expected credit loss allowance is computed based on a provision matrix which
considers historical credit loss experience and adjusted for forward-looking information.

Notes:

a. Capital reserve: This is mainly used to record the reserves created on receipt of state/central subsidies and amounts
forfeited towards the forfeiture of Equity warrants issued. This reserve is available for utilisation in accordance with the
provisions of the Companies Act, 2013.

b. Securities premium: This represents the premium received on issue of shares over and above the face value of equity
shares. The reserve is available for utilisation in accordance with the provisions of the Companies Act, 2013.

c. General Reserve: Under the erstwhile Companies Act, 1956, general reserves was created through an annual transfer of
net income at specified percentage in accordance with applicable regulation. Consequent to the introduction of Companies
Act, 2013, the requirement of mandatorily transfer a specified percentage of the net profit to general reserves has been
withdrawn. The reserve is available for utilisation in accordance with the provisions of the Companies Act, 2013.

d. Retained earnings: This represents the amount that can be distributed by the Company as dividends considering the
requirements of the Companies Act, 2013.

Notes:

a. The security details for the borrowing balances:

Term Loans from Banks aggregating to INR 124.73 million (Previous year: INR 222.94 million) and External Commercial
Borrowing from Banks aggregating to INR 376.94 million (Previous year: INR 533.32 million) are secured by first charge on
all immovable, movable assets and freehold land of the Company along with the personal guarantee of the directors.

b. Repayment schedule for the borrowing balances:

The secured term loans from banks aggregating to INR 5.41 million (Previous year: INR 21.66 million) are repayable over a
period of 5 years in quarterly instalments upto FY 2026-27.

The secured term loans from banks aggregating to INR 87.10 million (Previous year: INR 136.30 million) are repayable over a
period of 5 years in quarterly instalments upto FY 2027-28.

The secured term loans from banks aggregating to INR 32.22 million (Previous year: INR 47.09 million) are repayable over a
period of 4 years in monthly instalments upto FY 2028-29.

External Commercial Borrowing from banks aggregating to INR 376.94 million (Previous year: INR 533.32 million) are
repayable over a period of 6 years in 21 quarterly instalments upto FY 2027-28.

The secured term loans from banks aggregating to INR Nil (Previous year: INR 17.89 million) has been repaid during the year

c. Interest rates on borrowings:

Interest rates on Term loan is varying, which is linked to MCLR of bank, from time to time.

* includes demand from Income Tax Authorities based on assessment/appeal orders and the Company is in appeal with higher
authorities, and the Company has been advised that the decision will be in favour of the Company, and hence no provision has
been made in the Financial Statements. The matters are pending before respective appellate authorities and not yet settled.

** In respect of Corporate Guarantee of USD 14 million (INR 1,327.69 million) issued in favour of the Gates Foundation, U.S.A. on
behalf of Hester Biosciences Africa Limited, Tanzania (Wholly Owned Subsidiary Company) for setting up of an animal vaccine
manufacturing plant.

34 DETAILS OF CORPORATE SOCIAL RESPONSIBILITY (CSR) EXPENDITURE:_

Pursuant to Section 135 of the Companies Act, 2013, a Company, meeting the applicability of threshold, needs to spend at least
2% of its average net profit for the immediately preceding three financial years on Corporate Social Responsibility (CSR) activities
identified by the Company and monitored by CSR Committee.

37 DEFINED BENEFIT OBLIGATIONS:_

a) Defined Contribution Plans:

The Company made contribution towards provident fund to defined contribution retirement benefit plans for qualifying
employees. The provident fund plan is operated by the regional provident fund commissioner, the Company required to
contribute a specified percentage of payroll cost to the retirement benefit scheme to fund the benefit.

The Company recognised INR 19.10 million (2024-25: INR 20.68 million) for provident and other fund contribution in the
Statement of Profit and Loss. The contributions payable to this plan by the Company are at rates specified in the rules of the
scheme. The Company has no further obligations under the plan beyond its monthly contributions.

b) Defined Benefit Plan:

The Company made annual contribution to the Employees’ Group Gratuity Cash Accumulation Scheme of the Life Insurance
Corporation of India, a funded benefit plan for qualifying employees. The scheme provides for lump sum payment to vested
employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days
salary payable for each completed year of service or a part thereof in excess of six months. Vesting occurs upon completion of
five years of service.

The present value of define benefit obligation and the related current service cost were measured using the projected unit
credit method as per actuarial valuation carried out at balance sheet date.

(II) Financial risk management:

The Company’s activities are exposed to variety of financial risks. These risks include market risk (including foreign exchange
risk and interest rate risks), credit risks and liquidity risk. The Company’s overall risk management programme seeks to minimise
potential adverse effects on the financial performance of the Company through established policies and processes which are laid
down to ascertain the extent of risks, setting appropriate limits, controls, continuous monitoring and its compliance.

(a) Market risk:

Market risk refers to the possibility that changes in the market rates may have impact on the Company’s profits or the value of its
holding of financial instruments. The Company is exposed to market risks on account of foreign exchange rates and interest rates.

(i) Foreign currency exchange rate risk:

The Company’s foreign currency risk arises from its foreign operations, investments in foreign subsidiaries, foreign currency
transactions. The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity,
where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the
functional currency of the Company.

The major foreign currency exposure for the company is denominated in USD. Additionally, transactions entered into in other
currencies are not significant in relation to the total volume of the foreign currency exposures.

(b) 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 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 customers are categorised based on the nature
of transaction and the credit risk associated with them is managed through credit approvals, establishing credit limits and
continuously monitoring of the creditworthiness of the counterparty to which the company grant credit terms in the normal course
of business. The Company uses publicly available financial information and its own trading records to rate its major customers.

The Company has used expected credit loss (ECL) model for assessing the impairment loss. For this purpose, the Company uses
a provision matrix to compute the expected credit loss amount. The provision matrix takes into account external and internal risk
factors and historical data of credit losses from various customers.

Other receivables consist primarily of security deposits, loans and other receivables. The risk of default is assessed as low.

(c) Liquidity Risk:

Liquidity risk refers to the risk that the Company will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another financial asset. The objective of liquidity risk management is to maintain
sufficient liquidity and ensure that funds are available for use as per requirements. The Company generates cash flows from
operations to meet its financial obligations, maintains adequate liquid assets in the form of cash & cash equivalents and has
undrawn short term line of credits from banks to ensure necessary liquidity.

40 SEGMENT INFORMATION:_

(i) Identification of Segments:

The Company’s operating segments are established on the basis of those components of the Company that are evaluated
regularly by the Management Committee (the ‘Chief Operating Decision Maker’ as defined in Ind AS 108 Operating Segments),
in deciding how to allocate resources and in assessing performance. The Company is principally engaged in manufacturing of
Poultry vaccines and Large Animal Vaccines and trading of Poultry, Large animal and Pet health products. The CEO and Managing
Director(CMD) and senior management of the Company constitutes the CODM of the Company.

The Company has two principal operating and reporting segments viz. Poultry Healthcare and Animal Healthcare (Ruminant and
Pet). The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

42 OTHER STATUTORY INFORMATION:_

a) The Company does not have any Benami property, where any proceeding has been initiated or pending against the company
for holding any Benami property.

b) Title deeds of all the immovable properties comprising of land/ buildings as disclosed in standalone financial statements, are
held in the name of the Company.

c) The Company does not have any transactions or balances with companies struck off.

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

e) The Company has utilised the borrowings from banks and financial institutions for the specific purpose for which it was taken.

f) The Company was not declared wilful defaulter by any bank or financial Institution or other lender.

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

(i) 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

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

h) 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 group shall:

(i) 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

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

i) There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory
period.

j) The quaterly Stock Statements as submitted to the Banks are materially in agreement with the books of account of the
Company.

k) The Company has not entered into any scheme of arrangement which has an accounting impact on current year or previous
year.

43 EVENTS OCCURRING AFTER THE BALANCE SHEET DATE:_

The Company evaluates events and transactions that occur subsequent to the Balance Sheet date prior to the approval of the
financial statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the
Financial Statements. As of 15 May 2026 there were no subsequent event to be recognised or reported that are not already
disclosed elsewhere in these Financial Statements.

44 RECENT PRONOUNCEMENTS_

The Ministry of Corporate Affairs, vide notifications dated 13 August 2025 has issued the Companies (Indian Accounting
Standards) Second Amendment Rules, 2025, amending several Indian Accounting Standards as detailed below. These
amendments are primarily effective for annual periods beginning on or after 1 April 2026.

Key amendments include: Ind AS 1 - Changes in classification and disclosure requirements for liabilities, especially those arising
from loan arrangements with covenants.

The Company is in the process of evaluating the impact of these amendments on its financial statements. Based on preliminary
assessment, the amendments are not expected to have a material effect on the Company’s financial position or performance
for the year ended 31 March 2026. However, additional disclosures may be required in future periods upon application of these
amendments.

The Company will implement these amendments as and when they become applicable.