2.16Provisions and Contingent Liabilities
Provisions

A provision is recognized when the Company has a
present obligation (legal or constructive) 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. These estimates are
reviewed at each reporting date and adjusted to reflect
the current best estimates. 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 recognized as a finance cost.

Contingent liabilities

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 recognized 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 recognized because it cannot be measured reliably.
the Company does not recognize a contingent liability but
discloses its existence in the financial statements unless
the probability of outflow of resources is remote.

Contingent assets

Contingent assets are not recognised in the financial
statements. Contingent assets are disclosed in the financial
statements to the extent it is probable that economic
benefits will flow to the Company from such assets.

Provisions, contingent liabilities, contingent assets and
commitments are reviewed at each balance sheet date.

2.17Fair value measurement

The Company measures financial instruments at fair
value at each balance sheet date.

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

(i) In the principal market for asset or liability, or

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

The principal or the most advantageous market must
be accessible by the Company.

The fair value of an asset or liability is measured using
the assumptions that market participants would use
when pricing the asset or liability, assuming that market
participants act in their economic best interest.

A fair value measurement of a non- financial asset takes
into account a market participant''s ability to generate
economic benefits by using the asset in its highest and
best use or by selling it to another market participant
that would use the asset in its highest and best use.

The Company uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data are available to measure fair value,
maximizing the use of relevant observable inputs and
minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured
or disclosed in the financial statements are categorized
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 recognized in the
financial statements on a recurring basis, the Company
determines whether transfers have occurred between
levels in the hierarchy by re-assessing categorization
(based on the lowest level input that is significant to
fair value measurement as a whole) at the end of each
reporting period.

For the purpose of fair value disclosures, the Company
has determined classes of assets and liabilities on the
basis of the nature, characteristics and risks of the asset
or liability and the level of the fair value hierarchy as
explained above.

2.18Statement of cash flows

Statements of cash flows is made using the indirect
method, whereby profit before tax is adjusted for the
effects of transactions of non-cash nature, any deferral
accruals of past or future cash receipts or payments and

item of income or expense associated with investing or
financing of cash flows. The cash flows from operating,
financing and investing activities of the Company
are segregated.

2.19Significant accounting judgements,
estimates and assumptions

The preparation of the Company''s financial statements
requires management to make judgments, 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 the asset or liability affected in future periods.

Judgements

In the process of applying the Company''s accounting
policies, management has made the following
judgments, which have the most significant effect on
the amounts recognized in the Financial Statements.

a) Recognition of deferred taxes

The extent to which deferred tax assets can be
recognized is based on an assessment of the
probability of the future taxable income against
which the deferred tax assets can be utilized.

b) Impairment of Financial assets

The impairment provisions of financial assets are
based on assumptions about the risk of default and
expected loss rates. The Company uses judgment
in making these assumptions and selecting the
inputs to the impairment calculation, based on the
Company''s past history, existing market conditions
as well as forward looking estimates at the end of
each reporting period.

c) Recognition of revenue

The price charged from the customer is treated as
standalone selling price of the goods transferred
to the customer. At each balance sheet date, basis
the past trends and management judgment, the
Company assesses the requirement of recognising
provision against the sales returns for its products
and in case, such provision is considered necessary,
the management make adjustment in the revenue.
However, the actual future outcome may be
different from this judgement.

d) Impairment of non-financial assets

The Company assesses at each reporting date
whether there is an indication that an asset may
be impaired. If any indication exists, or when
annual impairment testing for an asset is required,
the Company estimates the asset''s recoverable
amount. An assets recoverable amount is the
higher of an asset''s CGU''S fair value less cost of
disposal and its value in use. It is determined for
an individual asset, unless the asset does not
generate cash inflows that are largely independent
of those from other assets or Company''s of assets.
Where the carrying amount of an asset or CGU
exceeds its recoverable amount, the asset is
considered impaired and is written down to its
recoverable amount.

In assessing value in use, the estimated future cash
flows are discounted to their present value using a
pre-tax discount rate that reflects current market
assessments of the time value of money and the
risks specific to the asset. In determining fair value
less costs of disposal, recent market transactions
are taken into account. If no such transactions
can be identified, an appropriate valuation model
is used. These calculations are corroborated by
valuation multiples, or other fair value indicators.

e) Leases

Ind AS 116 requires lessees to determine the lease
term as the non-cancellable period of a lease
adjusted with any option to extend or terminate
the lease, if the use of such option is reasonably
certain. The Company makes an assessment on the
expected lease term on a lease-by-lease basis and
there by assesses whether it is reasonably certain
that any options to extend or terminate the contract
will be exercised. In evaluating the lease term, the
Company considers factors such as significant
leasehold improvements undertaken over the
lease term, costs relating to the termination of
the lease etc. The lease term in future periods is
reassessed to ensure that the lease term reflects
the current economic circumstances.

2.19Company Estimates and assumptions

The key assumptions concerning the future and other
key sources of estimation uncertainty at the reporting
date, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and
liabilities within the next financial year, are described

below. 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
beyond the control of the Company. Such changes are
reflected in the assumptions when they occur.

a) Taxes

Uncertainties exist with respect to the
interpretation of complex tax regulations, changes
in tax laws, and the amount and timing of future
taxable income. Given the wide range of business
relationships and the long-term nature and
complexity of existing contractual agreements,
differences arising between the actual results
and the assumptions made, or future changes
to such assumptions, could necessitate future
adjustments to tax income and expense already
recorded. The Company establishes provisions,
based on reasonable estimates. The amount of
such provisions is based on various factors, such
as experience of previous tax audits and differing
interpretations of tax regulations by the taxable
entity and the responsible tax authority

b) Gratuity benefit

The cost of defined benefit plans (i.e. Gratuity
benefit) is determined using actuarial valuations.
An actuarial valuation involves making various
assumptions which may differ from actual
developments in the future. These include the
determination of the discount rate, future salary
increases, mortality rates and future pension
increases. Due to the complexity of the valuation,
the underlying assumptions 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. In determining the appropriate discount
rate, management considers the interest rates of
long-term government bonds with extrapolated
maturity corresponding to the expected duration
of the defined benefit obligation. The mortality
rate is based on Assumptions regarding future
mortality are set based on actuarial advice in

accordance with published statistics (i.e. IALM 2012¬
14 Ultimate). These assumptions translate into an
average life expectancy in years at retirement age.
Future salary increases and pension increases are
based on expected future inflation rates. Further
details about the assumptions used, including a
sensitivity analysis, are given in Note 39.

c) Fair value measurement of financial
instrument

When the fair value of financial assets and
financial liabilities recorded in the balance sheet
cannot be measured based on quoted prices in
active markets, their fair value is measured using
valuation techniques including the Discounted
Cash Flow (DCF) model. The inputs to these
models are taken from observable markets where
possible, but where this is not feasible, a degree
of judgment is required in establishing fair values.
Judgments include considerations of inputs such
as liquidity risk, credit risk and volatility. Changes in
assumptions about these factors could affect the
reported fair value of financial instruments.

d) Property, plant and equipment and
intangible assets

The charge in respect of periodic depreciation is
derived after determining an estimate of an asset''s
expected useful life and the expected residual value
at the end of its life. The useful lives and residual
values of the Company''s assets are determined by
management at the time the asset is acquired and
reviewed periodically, including at each financial
year end. For managements estimates on useful
life of assets refer note 2.03

e) Intangible assets

The charge in respect of periodic depreciation
is derived after determining an estimate of an
asset''s expected useful life. The useful lives of the
Company''s assets are determined by management
at the time the asset is acquired and reviewed
periodically, including at each financial year end.
For managements estimates on useful life of
assets refer note 2.04

(c) Terms/rights attached to equity shares

The Company has only one class of equity shares having par value of ''2 per share (PY ''2 per share). Each holder of
equity shares is entitled to one vote per share. The Company declares and pays dividend, if any in Indian rupees. The
dividend proposed, if any by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual
General Meeting.

The Board of Directors of the Company in the Board meeting dated February 15, 2023 and Shareholders of the company
in the Extra Ordinary General Meeting dated February 16, 2023 have approved the sub-division of each of the Equity
Share of the Company having a face value of ''10/- each in the Equity Share Capital of the Company be sub-divided into
5 Equity Shares having a face value of ''2/- each ("Sub-division"). Further, the equity portion of authorized share capital
of the company was revised to 7,50,00,000 equity shares of face value of ''2 each i.e. ''150 million.

Further, the Board of Directors at its meeting held on February 15, 2023, pursuant to Section 63 and other applicable
provisions, if any, of the Companies Act, 2013 and the rules made thereunder, approved the capitalization of a sum of
''45.27 million out of free reserves and surplus for issuance of 2,26,32,880 fully paid-up Bonus Equity Shares of ''2/- each
to the existing Equity Shareholders in the proportion of 4 (Four) Equity Shares for every 5 (Five) Equity Shares held. The
said issue was approved by the shareholders at their meeting held on February 16, 2023, and the Bonus Equity Shares
were allotted by the Board of Directors on February 20, 2023.

The bonus issue was effected through capitalization of ''45.27 million, comprising transfer from Retained Earnings
amounting to ''37.28 million and Securities Premium Reserve amounting to ''7.99 million.

Such Bonus Equity Shares rank pari passu in all respects with the existing equity shares and carry the same rights,
including entitlement to participate fully in any dividend and other corporate actions declared after the allotment date.

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 equity shareholders

(e) Share based payments

During the financial year 2022-23, Netweb- Employee Stock Option Plan 2023" pursuant to resolutions passed by Board
of Directors of the Company at their meeting held on December 24, 2022 and by Shareholders of the Company at their
meeting held on January 09,2023 and as amended by the Board of Directors of the Company at their meeting held on
February 20, 2023 and approved by the Shareholders of the Company at their meeting held on February 23, 2023. The
Plan has been made effective from January 21, 2023.

Pursuant to the approvals obtained from the Nomination and Remuneration Committee, following stock options were
granted to eligible employees under the Netweb Employee Stock Option Plan 2023:

a) Grant on January 31, 2023 (Financial Year 2022-23):

Stock options were granted to eligible employees and Key Managerial Personnel. These options shall vest over a
period of 3 years, with an equal number of options vesting each year from the date of grant. The vested options
may be exercised within the prescribed exercise period. The exercise price for these options is ''2 per option.

b) Grant on January 18, 2025 (Financial Year 2024-25):

A fresh grant of stock options was made to eligible employees and Key Managerial Personnel. These options shall
vest over a period of 2 years, with an equal number of options vesting at each interval from the date of grant.
The vested options may be exercised within the stipulated exercise period. The exercise price for this grant is ''2
per option

Nature and purpose of reserves
Securities Premium :

Securities premium is used to record the premium received on issue of shares and is utilised in accordance with the provisions
of Companies Act, 2013.

Retained Earnings:-

Retained earnings represents undistributed profits of the Company which can be distributed to its equity shareholders in
accordance with the provisions of the Companies Act, 2013.

Note:

1 Cash credits facilities

(i) Cash credits from Banks reflect a debit balance and have been presented accordingly in note 11(a)

(ii) Cash credit from Indian Bank amounting to Nil (March 31, 2025:''Nil) is secured against first Pari passu charge by way
of hypothecation on stock, Book debts and other current assets of the Company, both present and future.

'' Further CC limits are secured against first pari passu charge on (i) Residential Properties of directors of the Company
(ii) Pledge of FDR (excluding BG margin) of the Company (iii) Industrial unit (land & building) at Plot H-1, Sector - 57,
Faridabad Industrial Town (FIT), Faridabad, Haryana, in the name of the company, measuring 540.31 Sq. yards, along
with the hypothecation of Fixed Assets of the company as a collateral Security (iv) Industrial unit (land & building) at Plot
H-2, Sector - 57, Faridabad Industrial Town (FIT), Faridabad, Haryana, in the name of the company, measuring 540.31
Sq. yards,(v) Industrial unit (land & building) at Plot M12, Pocket -9, Block M Sector 57 Faridabad Industrial Town (FIT),
Village Jharsetli, Tehsil-Ballabhgarh, Faridabad, Haryana, in the name of the company, measuring 678.52 Sq. yards, along
with the hypothecation of Fixed Assets of the company (excluding Land and Building, vehicle & right od use assets)
as a collateral Security (vi) Personal Guarantee provided by Mr. Sanjay Lodha (Director of Company), Mr. Vivek Lodha
(Director of Company), Mr. Navin Lodha (Director of Company), Mr. Niraj Lodha (Director of Company), Ms. Madhuri
Lodha( Mortgagor Guarantor).

Interest rate on the above loans outstanding as at the year ended March 31, 2026 is 3 months MCLR Spread.

(iii) Cash credit from HDFC Bank amounting to Nil (March 31, 2025: ''Nil) is secured against FDR, FDR for cash margin, First
Pari passu charge on debtors, Plant and Machinery, Stock, Inland LC.

Further CC limits are secured against (i) Residential Properties of directors of the Company (ii) Industrial unit (land
& building) at Plot H-1, Sector - 57, Faridabad Industrial Town (FIT), Faridabad, Haryana, in the name of the company,
measuring 540.31 Sq. yards, along with the hypothecation of Fixed Assets of the company as a collateral Security (iii)
Industrial unit (land & building) at Plot H-2, Sector - 57, Faridabad Industrial Town (FIT), Faridabad, Haryana, in the name
of the company, measuring 540.31 Sq. yards,(iv) Industrial unit (land & building) at Plot M12, Pocket -9, Block M Sector 57
Faridabad Industrial Town (FIT), Village Jharsetli, Tehsil-Ballabhgarh, Faridabad, Haryana, in the name of the company,
measuring 678.52 Sq. yards as a collateral Security (vi) Personal Guarantee provided by Mr. Sanjay Lodha (Director of
Company), Mr. Vivek Lodha (Director of Company), Mr. Navin Lodha (Director of Company), Mr. Niraj Lodha (Director of
Company), Ms. Madhuri Lodha( Mortgagor Guarantor).

Interest rate on the above loans outstanding as at the year ended March 31, 2026 is Repo Rate Spread.

(iv) Cash credit from Axis Bank amounting to ''184.35 Million (March 31,2025: ''Nil), is secured against First Pari passu charge
on the entire current assets, movable fixed assets of the company, present and future (except for GPU project specific
current assets).

Further CC limits are secured against first pari passu (i) Residential Properties of directors of the Company (ii) First
Pari passu charge on industrial unit (land & building) at Plot H-1, Sector - 57, Faridabad Industrial Town (FIT), Faridabad,
Haryana, in the name of the company, measuring 540.31 Sq. yards, along with the hypothecation of Fixed Assets of the
company as a collateral Security (iii) First Pari passu charge on industrial unit (land & building) at Plot H-2, Sector - 57,
Faridabad Industrial Town (FIT), Faridabad, Haryana, in the name of the company, measuring 540.31 Sq. yards,(iv) First
Pari passu charge on industrial unit (land & building) at Plot M12, Pocket -9, Block M Sector 57 Faridabad Industrial Town

(FIT), Village Jharsetli, Tehsil-Ballabhgarh, Faridabad, Haryana, in the name of the company, measuring 678.52 Sq. yards,
as a collateral Security (v) Personal Guarantee provided by Mr. Sanjay Lodha (Director of Company), Mr. Vivek Lodha
(Director of Company), Mr. Navin Lodha (Director of Company), Mr. Niraj Lodha (Director of Company).

Interest rate on the above loans outstanding as at the year ended March 31, 2026 is Repo Rate 3%.

(v) One time CC from Indian Bank amounting to ''285.84 Million (March 31,2025:''Nil) is secured against Exclusive Charges
on entire One time Projects assets/ receivables of the Company.

Further OCCL limits are secured against (i) Pledge of FDR of the Promoters (ii) Pledge of FDR of company (ii)Personal
Guarantee provided by Mr. Sanjay Lodha (Director of Company), Mr. Navin Lodha (Director of Company), Mr. Vivek Lodha
(Director of Company, Mr. Niraj Lodha (Director of Company).

Interest rate on the above loans outstanding as at the year ended March 31, 2026 is 3M MCLR Spread.

2 Working capital demand loans (WCDL)

(i) Working Capital Demand Loan (WCDL) from Indian Bank amounting to ''672.09 Million (March 31,2025:''Nil) is secured
against Exclusive Charges on entire One time Projects assets/ receivables of the Company.

Further WCDL limits are secured against (i) Pledge of FDR of the Promoters (ii) Pledge of FDR of company (ii)Personal
Guarantee provided by Mr. Sanjay Lodha (Director of Company), Mr. Navin Lodha (Director of Company), Mr. Vivek Lodha
(Director of Company, Mr. Niraj Lodha (Director of Company).

Interest rate on the above loans outstanding as at the year ended March 31, 2026 is 3M MCLR Spread.

(ii) Working Capital Demand Loan (WCDL) from HDFC bank amounting ''74.17 Million (March 31, 2025: ''Nil) is secured
against FDR, FDR for cash margin, First Pari passu charge on debtors, Plant and Machinery, Stock, Inland LC.

Further CC limits are secured against (i) Residential Properties of directors of the Company (ii) Industrial unit (land
& building) at Plot H-1, Sector - 57, Faridabad Industrial Town (FIT), Faridabad, Haryana, in the name of the company,
measuring 540.31 Sq. yards, along with the hypothecation of Fixed Assets of the company as a collateral Security (iii)
Industrial unit (land & building) at Plot H-2, Sector - 57, Faridabad Industrial Town (FIT), Faridabad, Haryana, in the name
of the company, measuring 540.31 Sq. yards,(iv) Industrial unit (land & building) at Plot M12, Pocket -9, Block M Sector 57
Faridabad Industrial Town (FIT), Village Jharsetli, Tehsil-Ballabhgarh, Faridabad, Haryana, in the name of the company,
measuring 678.52 Sq. yards as a collateral Security (vi) Personal Guarantee provided by Mr. Sanjay Lodha (Director of
Company), Mr. Vivek Lodha (Director of Company), Mr. Navin Lodha (Director of Company), Mr. Niraj Lodha (Director of
Company), Ms. Madhuri Lodha( Mortgagor Guarantor).

Interest rate on the above loans outstanding as at the year ended March 31, 2026 is Repo Rate Spread.

(iii) Working Capital Demand Loan (WCDL) from Axis Bank amounting to ''1490.00 Million (March 31, 2025:''Nil) is secured
against Exclusive Charges on entire current assets of the company pertaining to GPU Projects to the extent financed
out of this facility.

Further WCDL limits are secured against Personal Guarantee provided by Mr. Sanjay Lodha (Director of Company),
Mr. Navin Lodha (Director of Company).

Interest rate on the above loans outstanding as at the year ended March 31, 2026 is Repo Rate Spread.

3 The quarterly return/statement filed by the company with the banks are in agreement with the books of account of
the company of the respective quarters.

36 Income tax

The Company is subject to income tax in India on the basis of financial statements. 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.

Pursuant to the Taxation Law (Amendment) Ordinance, 2019 (''Ordinance'') issued by Ministry of Law and Justice (Legislative
Department) on September 20, 2019 which is effective from April 01, 2019, domestic companies have the option to pay
income tax at 22% plus applicable surcharge and cess (''new tax regime'') subject to certain conditions. The Company based
on the current projections has chosen to adopt the reduced rates of tax as per the Income Tax Act, 1961 from the financial
year 2019-20 and accordingly the Company has accounted deferred tax based on the reduced applicable tax rates.

b) Defined benefit plans

The Company has a defined benefit gratuity plan. The gratuity plan is governed by the Payment of Gratuity Act, 1972.
Under the act, every employee who has completed five years or more of service gets gratuity on departure at 15 days
salary (last drawn salary) for each completed year of service. The level of benefits provided depends on the member''s
length of service and salary at retirement age. The Gratuity plan is unfunded.

The following tables summarise the components of net benefit expense recognised in the statement of profit or loss
and amounts recognised in the balance sheet for gratuity benefit:

The above sensitivity analysis are based on a change in an assumption while holding all others assumptions constant.
In the event of change in more than one assumption, the impact would be different than the stated above. The methods
and any types of assumptions used in preparing the sensitivity analysis did not change compared to prior period.

40 Segment reporting

As per Ind AS - 108, operating segment have been defined based on review by chief operating decision maker (CODM)
to assess the performance and make decision about allocation of resources to each segment. The Company business
activities falls within single primary business segment viz, manufacturing of "Computer servers". Accordingly, disclosure
under Ind AS 108, operating segments are not required in the financial statements.

Geographical Information:

The Company primarily operates from a single geographical location, predominantly within India. The export turnover
of the Company is not significant. Accordingly, the Company has concluded that it operates substantially in one
geographical segment, and separate geographical segment disclosures are not considered necessary. All non current
assets of the Company are located in India

Accordingly, the management has determined that the Company operates in one reportable business segment, namely
"Computer Servers", and therefore no separate segment-wise financial information is required to be disclosed

Information about major customers

There are three customers (March 31, 2025: Two customers) which amounts to 10% or more of the Company''s revenue.

41 Leases
a) Leases

I. Company as a lessee

The Company has lease contracts for office facilities . The lease term of the office facilities is generally 1 - 9 years .The
Company''s obligations under its leases are secured by the lessor''s title to the leased assets.

The Company also has certain leases of office facilities and office Equipment''s with low value or tenure less than 1 year.
The Company applies the ''lease of low-value assets''/ ''short term lease ''recognition exemptions for these leases.

The Company has lease contracts that include extension and termination options. The Company applies judgement in
evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That
is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination.
After the commencement date, the Company reassesses the lease term if there is a significant event or change in
circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to
terminate (e.g., construction of significant leasehold improvements or significant customisation to the leased asset).

Notes:

(a) Contingent liabilities amounting to ?2.00 million relating to AY 2020-21 and ?7.91 million relating to AY 2019-20 pertain to appeals

filed by the Company before the Commissioner of Income Tax (Appeals) against the respective assessment orders. During the
year, the appeals were decided in favour of the Company and accordingly, no material liability is expected to arise in respect of
these matters.

(b) Contingent liabilities amounting to ?10.59 million (March 31,2025: '' 10.59 million) represent customs duty demands arising from
the denial of concessional duty benefits claimed on the import of Non-Carrier Ethernet Switches. The customs authorities have
raised demands for differential duty along with applicable interest, penalty, and redemption fine. The Company has filed an
appeal against the order before the CESTAT.

(c) Contingent liabilities amounting to '' 1,363.13 million (March 31, 2025: ?817 million) include bank guarantees issued by banks on
behalf of the Company in the normal course of business.

43 Capital Management

The Company''s capital management is intended to maximise the return to shareholders for meeting the long-term and
short-term goals of the Company through the optimization of the debt and equity balance.

The Company determines the amount of capital required on the basis of annual and long-term operating plans and strategic
investment plans. The funding requirements are met through equity and long-term/short-term borrowings. The Company
monitors the capital structure on the basis of Net debt to equity ratio and maturity profile of the overall debt portfolio of
the Company.

For the purpose of capital management, capital includes issued equity capital, securities premium and all other reserves
attributable to the equity shareholders of the Company.

b) Fair value hierarchy

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by
valuation technique using: -

Level 1 - Quoted prices for identical instruments in an active market for identical assets and liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following methods / assumptions were used to estimate the fair values:

(a) The carrying amount of cash and cash equivalents, other bank balances, trade receivables, other financial assets,
trade payables and other financial liabilities approximate their fair value mainly due to the short term maturities
of these instruments.

(b) The fair value measurements disclosed in respect of financial assets and liabilities measured at amortised cost fall
within Level 3 of fair value hierarchy.

(c) There has been no transfers within Level 1, Level 2, and Level 3 for the year March 31, 2026 and March 31,
2025 respectively.

45 Risk management objectives and policies

The Company''s activities are exposed to a variety of financial risks from its operations. The key financial risks include
market risk (including foreign currency risk and interest rate risk), credit risk and liquidity risk.

The Company''s senior management oversees the management of these risks. The management is responsible for
formulating an appropriate financial risk governance framework for the Company and for periodically reviewing the
same. The senior management ensures 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 summarized below:

ii) Market risk- Foreign currency risk

The company operates in international markets and is exposed to foreign exchange risk arising from foreign currency
transactions, primarily with respect to the USD. Foreign exchange risk arises from recognised monetary items
denominated in foreign currencies, including trade payables, trade receivables, and bank balances held in EEFC account.

Foreign exchange forward contracts are used to hedge currency risk arising from import transactions, with the objective
of minimising the impact of foreign currency fluctuations on financial performance. The company does not enter into
derivative contracts for speculative purposes.

(1) Market risk

Market risk is the risk of any loss in future earnings, in realisable fair values or in 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
interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future
specific market movements cannot be normally predicted with reasonable accuracy.

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

(2) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract,
leading to a financial loss. Financial instruments that are subject to credit risk and concentration thereof principally
consist of trade receivables.

Customer credit risk is managed by Company''s established policy, procedures and control relating to customer
credit risk management. The Company does not hold collateral as security. Further, trade receivables contribution
to approximately 88% to 94% of the customers of the Company are due for less than 180 days during each reporting
period. The company majorly deals with government authorities and agencies which further reduces the credit risk of
the company.

With respect to Trade receivables, the Company has constituted the terms to review the receivables on periodic basis
and to take necessary mitigations, wherever required. The Company creates allowance for all receivables based on
lifetime expected credit loss based on a provision matrix. The provision matrix takes into account historical credit loss
experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing
of the receivables that are due and rates used in the provision matrix.

Credit risk on cash and cash equivalents and other bank balances is considered low, as these are primarily held as
deposits with scheduled commercial banks that are regulated by the Reserve Bank of India and carry high credit ratings.
The company had no other financial instrument that represent a significant concentration of credit risk. So there is no
impairment in these financial assets

(3) Liquidity risk

Liquidity risk is 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 assets. The Company''s approach to manage liquidity
is to have sufficient liquidity to meet it''s liabilities when they are due, under both normal and stressed circumstances,
without incurring unacceptable losses or risking damage to the Company''s reputation.

The following are the remaining contractual maturities of financial liabilities at the reporting date. The contractual cash
flow amounts are gross and discounted, and includes interest accrued but not due on borrowings:-

49 Other Statutory Information

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against
the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 and rules
made thereunder.

(ii) The Company did not have any material transaction with companies struck off under Section 248 of the Companies
Act, 2013 or Section 560 of Companies Act, 1956 during the respective reported financial year.

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

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

(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(s), 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

(vi) The Company has not received any fund from any person(s) or entity(s), 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) Details of IPO Proceeds

The Company received an amount of ''1,940.24 million (net of estimated IPO expense of ''119.76 million) via fresh
issue of 41,20,000 equity shares through Initial Public Offering (IPO). The Company''s equity shares were listed on the
National Stock Exchange (NSE) and on the BSE Limited (BSE) on the July 27, 2023. The utilization of net IPO proceeds is
summarized below:

Notes:

The Unutilized amount ''113.14 million of IPO Proceeds under “Funding our Capital Expenditure requirements" Category has been
transferred to “General Corporate Purposes" category vide board resolution dated March 24, 2025. Further such transfer is within
allowable limits (i.e. 25% of gross proceeds) as mentioned in offer document.

The Net Proceeds have been revised to ''1,940.98 million, as the actual cost incurred by the Company towards offer-related expenses
was ''0.74 million lower than the estimated cost disclosed in the final offer document. During the quarter ended June 30, 2025, this
surplus of ''0.74 million was utilized towards General Corporate Purposes (GCP).

(viii) Details of IPO Expense

The Company had estimated IPO related expenses of ''365.67 million and allocated such expenses between the
Company and Selling Shareholders based on an agreement between the Company and Selling Shareholders and in
proportion to the total proceeds raised of ''6,310 million, amounting to ''119.76 million and ''245.91 million, respectively.
The Company''s share of IPO related expenses, net of recovery from Selling Shareholders, amounted to ''103.99 million
(net of GST benefits) as at March 31, 2026 and has been adjusted against Securities Premium. During the year ended
March 31, 2026, the Company recovered ''1.25 million from the Selling Shareholders against IPO related expenses.

(ix) Details of pre IPO Proceeds and Expense

The Company received ''479.15 million (net of pre IPO expenses incurred of ''30.85 million) from certain institutional
investors towards proceeds out of fresh issue of equity shares raised through pre IPO placement of shares. Accordingly,
an amount of ''27.74 million (net of GST benefit) has been adjusted against Securities Premium.

(x) The company does not have any unrecorded transactions which have been surrendered or disclosed as Income during
the year in the tax assessment under the Income Tax Act, 1961.

(xi) The company is not declared wilful defaulter by any bank, financial institution or lender during the year.

(xii) During the year, no scheme of arrangements in relation to the company has been approved by the competent authority
in terms of Section 232 to 237 of the Companies Act,2013. Accordingly, this clause is not applicable to the company.

50 Production Linked Incentives

Netweb Technologies India Limited has been awarded Production Linked Incentive (PLI) Scheme for IT Hardware (eligible
product - Servers) vide approval letter no. IFCI/CASD/MeitY/PLI-ITHW-210701024 dated July 01, 2021 under the PLI
Scheme introduced by the Government of India vide Gazette Notification no. CG-DL-E-03032021-225613 dated March
03, 2021 and the PLI Guidelines issued thereunder, as amended from time to time. Subsequently, the Company migrated
to PLI Scheme 2.0 for IT Hardware notified vide Gazette Notification No. CG-DL-E-30052023-246165 dated May 29, 2023,
pursuant to approval letter no. IFCI/Meity/PLI-ITHW-231124033 dated November 24, 2023. Under the revised scheme,
the Company is eligible to receive incentive on eligible sales of products and the scheme is valid from Financial Year
2023-24 (July to March) to 2028-29 (April to June).

51 Disclosure on Employees Stock Options Scheme

a) ESOP Policy

Equity share-based payments to employees and other providing similar services are measured at the fair value of the
equity instruments at the grant date. Details regarding the determination of the fair value of equity-settled share-based
payments transactions are set out in notes to accounts.

The fair value determined at the grant date of the equity-settled share based payments is expensed on straight-line
basis over the vesting period, based on the company''s estimate of equity instrument that will eventually vest, with a
corresponding increase in equity. At the end of each reporting period, the company revises its estimate of the number
of equity instruments expected to vest. The impact of the revision of original estimates, if any, is recognised in the
Statement of Profit and Loss such that the cumulative expenses reflects the revised estimate, with a corresponding
adjustment to the Share Option Outstanding Account.

b) ESOP Disclosure
Details of scheme:

The Company adopted the ESOP Scheme “Netweb- Employee Stock Option Plan 2023" pursuant to resolutions passed
by Board of Directors of the Company at their meeting held on December 24, 2022 and by Shareholders of the Company
at their meeting held on January 09,2023 and as amended by the Board of Directors of the Company at their meeting
held on February 20, 2023 and approved by the Shareholders of the Company at their meeting held on February 23,
2023. The Plan has been made effective from January 21, 2023.

The Plan provides for grant of stock options, wherein one stock option would entitle the holder of the option a right to
apply for one equity share of the company upon fulfilment of vesting conditions prescribed in the Plan.

The following stock options were granted to eligible employees under the Netweb Employee Stock Option Plan 2023:

a) Grant on January 31, 2023 (Financial Year 2022-23):

Stock options were granted to eligible employees and Key Managerial Personnel. These options shall vest over a
period of 3 years, with an equal number of options vesting each year from the date of grant. The vested options
may be exercised within the prescribed exercise period. The exercise price for these options is ''2 per option.

b) Grant on January 18, 2025 (Financial Year 2024-25):

A fresh grant of stock options was made to eligible employees and Key Managerial Personnel. These options shall
vest over a period of 2 years, with an equal number of options vesting at each interval from the date of grant.
The vested options may be exercised within the stipulated exercise period. The exercise price for this grant is ''2
per option

53 Change in accounting policy

Impact on the financial statements

The Company has changed its accounting policy for valuation of Raw Materials, Finished Goods and Work in Progress
from First In First Out (FIFO) to moving weighted average cost method w.e.f. April 01, 2025. The Company believes that
this change to moving weighted average cost method is preferable as it reflects better matching of the actual cost flows
with the physical flow of goods and also improves comparability with Company''s industry peers. Hence, it provides
reliable and more relevant information to the users of financial statements about the Company''s inventory valuation.

In accordance with Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors, this change in method
of accounting for inventories has been retrospectively applied to all prior periods presented herein. Prior period
comparative figures have been adjusted to reflect what results would have been had the company applied moving
weighted average cost method of inventory valuation for inventories. The cumulative effect on retained earnings for
these changes was ''4.27 Millions at April 01, 2024.

54 On November 21, 2025, the Government of India notified the four Labour Codes - the Code on Wages, 2019, the
Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working
Conditions Code, 2020 - consolidating 29 existing labour laws. The Ministry of Labour & Employment has published
draft Central Rules and FAQs to enable assessment of the financial impact arising from changes in regulations.

The Company has assessed the potential impact of the aforesaid Labour Codes on its employee benefit obligations and
related costs on the basis of management evaluation and the best information currently available, consistent with the
guidance provided by the Institute of Chartered Accountants of India. Based on such assessment, the implementation of
the new Labour Codes has not resulted in any material incremental impact on the Company''s financial position, results
of operations or employee benefit obligations for the period ended March 31,2026. Accordingly, no statutory impact or
exceptional item has been recognised in the statement of profit and loss for the year / period ended March 31, 2026.

The Company continues to monitor the finalisation of Central / State Rules and any clarifications from the Government
on other aspects of the Labour Code and would provide appropriate accounting effect on the basis of such developments
as needed.

55 Previous year figures have been regrouped/reclassified wherever considered necessary to make them comparable
with current year classification.

56 The Company has used accounting software for maintaining its books of account for the year ended March 31, 2026,
which has the feature of recording audit trail (edit log) for all transactions recorded in the software. The audit trail
feature has been operated throughout the year. Further, no instances were observed of the audit trail feature being
tampered with during the year. The Company has also preserved the audit trail in accordance with the applicable
statutory requirements for record retention.

57 Events occurring after the Balance Sheet Date:

There are no events occurring after Balance Sheet date for the Financial Year 2025-26 except Note No.52 (Dividend on
Equity Shares).

2.15 Provisions and Contingent Liabilities
Provisions

A provision is recognised when the Company has a
present obligation (legal or constructive) 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. These estimates are
reviewed at each reporting date and adjusted to reflect
the current best estimates. 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.

Contingent liabilities

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
financial statements unless the probability of outflow
of resources is remote.

Contingent assets

Contingent assets are not recognised in the financial
statements. Contingent assets are disclosed in the
financial statements to the extent it is probable that
economic benefits will flow to the Company from
such assets.

Provisions, contingent liabilities, contingent assets and
commitments are reviewed at each balance sheet date.

2.16 Fair value measurement

The Company measures financial instruments at fair
value at each balance sheet date.

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

(i) In the principal market for asset or liability, or

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

The principal or the most advantageous market must
be accessible by the Company.

The fair value of an asset or liability is measured using
the assumptions that market participants would use
when pricing the asset or liability, assuming that market
participants act in their economic best interest.

A fair value measurement of a non- financial asset takes
into account a market participant''s ability to generate
economic benefits by using the asset in its highest and
best use or by selling it to another market participant
that would use the asset in its highest and best use.

The Company uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data are available to measure fair value,
maximising the use of relevant observable inputs and
minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured
or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows,

based on the lowest level input that is significant to the
fair value measurement as a whole:

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

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

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

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

For the purpose of fair value disclosures, the Company
has determined classes of assets and liabilities on the
basis of the nature, characteristics and risks of the asset
or liability and the level of the fair value hierarchy as
explained above.

2.17 Statement of cash flows

Statements of cash flows is made using the indirect
method, whereby profit before tax is adjusted for the
effects of transactions of non-cash nature, any deferral
accruals of past or future cash receipts or payments and
item of income or expense associated with investing or
financing of cash flows. The cash flows from operating,
financing and investing activities of the Company
are segregated.

2.18 Significant accounting judgements,
estimates and assumptions

The preparation of the Company''s financial statements
requires management to make judgments, 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 the asset or liability affected in future periods.

Judgements

In the process of applying the Company''s accounting
policies, management has made the following

judgments, which have the most significant effect on

the amounts recognised in the Financial Statements.

a) Recognition of deferred taxes

The extent to which deferred tax assets can be
recognised is based on an assessment of the
probability of the future taxable income against
which the deferred tax assets can be utilised.

b) Impairment of Financial assets

The impairment provisions of financial assets are
based on assumptions about the risk of default and
expected loss rates. The Company uses judgment
in making these assumptions and selecting the
inputs to the impairment calculation, based on the
Company''s past history, existing market conditions
as well as forward looking estimates at the end of
each reporting period.

c) Recognition of revenue

The price charged from the customer is treated as
standalone selling price of the goods transferred
to the customer. At each balance sheet date, basis
the past trends and management judgment, the
Company assesses the requirement of recognising
provision against the sales returns for its products
and in case, such provision is considered necessary,
the management make adjustment in the revenue.
However, the actual future outcome may be
different from this judgement.

d) Impairment of non-financial assets

The Company assesses at each reporting date
whether there is an indication that an asset may
be impaired. If any indication exists, or when
annual impairment testing for an asset is required,
the Company estimates the asset''s recoverable
amount. An assets recoverable amount is the
higher of an asset''s CGU''S fair value less cost of
disposal and its value in use. It is determined for
an individual asset, unless the asset does not
generate cash inflows that are largely independent
of those from other assets or Company''s of assets.
Where the carrying amount of an asset or CGU
exceeds its recoverable amount, the asset is
considered impaired and is written down to its
recoverable amount.

In assessing value in use, the estimated future cash
flows are discounted to their present value using a
pre-tax discount rate that reflects current market
assessments of the time value of money and the
risks specific to the asset. In determining fair value
less costs of disposal, recent market transactions

are taken into account. If no such transactions
can be identified, an appropriate valuation model
is used. These calculations are corroborated by
valuation multiples, or other fair value indicators.

e) Leases

Ind AS 116 requires lessees to determine the lease
term as the non-cancellable period of a lease
adjusted with any option to extend or terminate
the lease, if the use of such option is reasonably
certain. The Company makes an assessment on the
expected lease term on a lease-by-lease basis and
there by assesses whether it is reasonably certain
that any options to extend or terminate the contract
will be exercised. In evaluating the lease term, the
Company considers factors such as significant
leasehold improvements undertaken over the
lease term, costs relating to the termination of
the lease etc. The lease term in future periods is
reassessed to ensure that the lease term reflects
the current economic circumstances.

2.19 Company Estimates and assumptions

The key assumptions concerning the future and other
key sources of estimation uncertainty at the reporting
date, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and
liabilities within the next financial year, are described
below. 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
beyond the control of the Company. Such changes are
reflected in the assumptions when they occur.

a) Taxes

Uncertainties exist with respect to the
interpretation of complex tax regulations, changes
in tax laws, and the amount and timing of future
taxable income. Given the wide range of business
relationships and the long-term nature and
complexity of existing contractual agreements,
differences arising between the actual results
and the assumptions made, or future changes
to such assumptions, could necessitate future
adjustments to tax income and expense already
recorded. The Company establishes provisions,
based on reasonable estimates. The amount of
such provisions is based on various factors, such
as experience of previous tax audits and differing
interpretations of tax regulations by the taxable
entity and the responsible tax authority

b) Gratuity benefit

The cost of defined benefit plans (i.e. Gratuity
benefit) is determined using actuarial valuations.
An actuarial valuation involves making various
assumptions which may differ from actual
developments in the future. These include the
determination of the discount rate, future salary
increases, mortality rates and future pension
increases. Due to the complexity of the valuation,
the underlying assumptions 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. In determining the appropriate discount
rate, management considers the interest rates of
long-term government bonds with extrapolated
maturity corresponding to the expected duration
of the defined benefit obligation. The mortality
rate is based on Assumptions regarding future
mortality are set based on actuarial advice in
accordance with published statistics (i.e. IALM 2012¬
14 Ultimate). These assumptions translate into an
average life expectancy in years at retirement age.
Future salary increases and pension increases are
based on expected future inflation rates. Further
details about the assumptions used, including a
sensitivity analysis, are given in Note 39.

c) Fair value measurement of financial
instrument

When the fair value of financial assets and
financial liabilities recorded in the balance sheet

cannot be measured based on quoted prices in
active markets, their fair value is measured using
valuation techniques including the Discounted
Cash Flow (DCF) model. The inputs to these
models are taken from observable markets where
possible, but where this is not feasible, a degree
of judgment is required in establishing fair values.
Judgments include considerations of inputs such
as liquidity risk, credit risk and volatility. Changes in
assumptions about these factors could affect the
reported fair value of financial instruments.

d) Property, plant and equipment

The charge in respect of periodic depreciation is
derived after determining an estimate of an asset''s
expected useful life and the expected residual value
at the end of its life. The useful lives and residual
values of the Company''s assets are determined by
management at the time the asset is acquired and
reviewed periodically, including at each financial
year end. For managements estimates on useful
life of assets refer note 2.03

e) Intangible assets

The charge in respect of periodic depreciation
is derived after determining an estimate of an
asset''s expected useful life. The useful lives of the
Company''s assets are determined by management
at the time the asset is acquired and reviewed
periodically, including at each financial year end.
For managements estimates on useful life of
assets refer note 2.04

Further the Board of Directors at its meeting held on February 15, 2023, pursuant to Section 63 and other applicable
provisions, if any, of the Companies Act, 2013 and rules made thereunder, proposed that a sum of ''45.27 million be
capitalised as Bonus Equity shares out of free reserves and surplus, and distributed amongst the Equity Shareholders
by issue of 2,26,32,880 Equity shares of ''2/- each credited as fully paid to the Equity Shareholders in the proportion of
4 (Four) Equity share for every 5 (Five) Equity shares. It was approved in the meeting of shareholders held on February
16, 2023. The Board of Directors of the Company in the Board meeting dated February 20, 2023 allotted the Bonus
Equity Shares to the shareholders of the Company.

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 equity shareholders

(c) Terms/rights attached to equity shares

The Company has only one class of equity shares having par value of ''2 per share (PY ''2 per share). Each holder of
equity shares is entitled to one vote per share. The Company declares and pays dividend, if any in Indian rupees. The
dividend proposed, if any by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual
General Meeting.

The Board of Directors of the Company in the Board meeting dated February 15, 2023 and Shareholders of the company
in the Extra Ordinary General Meeting dated February 16, 2023 have approved the sub-division of each of the Equity
Share of the Company having a face value of ''10/- each in the Equity Share Capital of the Company be sub-divided into
5 Equity Shares having a face value of ''2/- each ("Sub-division"). Further, the equity portion of authorised share capital
of the company was revised to 7,50,00,000 equity shares of face value of ''2 each i.e. ''150 million.

During the year ended March 31, 2023, the Company allotted 2,26,32,880 equity shares as fully paid up bonus shares
in proportion of 4:5 (i.e. four bonus shares for every five equity share held) to the eligible members/beneficial owners,
by capitalisation of amount of ''45.27 million which was by way of transfer from Retained Earnings ''37.28 million and
Securities Premium Reserve. ''7.99 million.

Such bonus shares rank pari passu in all respects and carry the same rights as the existing equity shareholders and
are entitled to participate in full, in any dividend and other corporate action, recommended and declared after the new
equity shares are allotted.

(e) Share based payments

During the financial year 2022-23, Netweb- Employee Stock Option Plan 2023 pursuant to resolutions passed by Board
of Directors of the Company at their meeting held on December 24, 2022 and by Shareholders of the Company at their
meeting held on January 09, 2023 and as amended by the Board of Directors of the Company at their meeting held on
February 20, 2023 and approved by the Shareholders of the Company at their meeting held on February 23, 2023. The
Plan has been made effective from January 21, 2023.

Pursuant to the approvals obtained from the Nomination and Remuneration Committee, following stock options were
granted to eligible employees under the Netweb Employee Stock Option Plan 2023:

a) Grant on January 31, 2023 (Financial Year 2022-23):

Stock options were granted to eligible employees and Key Managerial Personnel. These options shall vest over a
period of 3 years, with an equal number of options vesting each year from the date of grant. The vested options
may be exercised within the prescribed exercise period. The exercise price for these options is ''2 per option.

b) Grant on January 18, 2025 (Financial Year 2024-25):

A fresh grant of stock options was made to eligible employees and Key Managerial Personnel. These options shall
vest over a period ranging from 1-2 years from the grant date, with equal number of options vesting at each interval.
The vested options may be exercised within the stipulated exercise period. The exercise price for this grant is ''2
per option

Please refer note 51 for further details

Note:

1 Cash credits from Banks reflect a debit balance and have been presented accordingly in note 11(a)

2 Cash credit from Indian Bank amounting to Nil (March 31,2024: ''Nil) is secured against Pari pasu charge on stock, Book
debts and other current assets of the Company, both present and future with HDFC bank.

Further CC Limit are secured against (i) Properties of directors of the Company (ii) Pledge of FDR (excluding BG margin)
of the Company (iii) Pari pasu charge on industrial unit (land & building) at Plot H-1, Sector - 57, Faridabad Industrial
Town (FIT), Faridabad, Haryana, in the name of the company, measuring 540.31 Sq. yards, along with the hypothecation
of Fixed Assets of the company as a collateral Security (iv) Pari pasu charge on industrial unit (land & building) at Plot
H-2, Sector - 57, Faridabad Industrial Town (FIT), Faridabad, Haryana, in the name of the company, measuring 540.31 Sq.
yards, along with the hypothecation of Fixed Assets of the company (After liquidation of Term Loan , the property will
be held as collateral for working capital facility) as a collateral Security (v) Personal Guarantee provided by Mr. Sanjay
Lodha (Director of Company), Mr. Vivek Lodha (Director of Company), Mr. Navin Lodha (Director of Company), Mr. Niraj
Lodha (Director of Company), Ms. Madhuri Lodha (Mortgagor Guarantor) (Relative of Director) with HDFC bank. Interest
rate on the above loans outstanding as at the year ended March 31,2025 is 3 months MCLR."

3 Cash credit from HDFC Bank amounting to Nil (March 31, 2024: ''Nil) is secured against Pari pasu charge on current
assets, movable and immovable fixed assets with Indian Bank.

Further CC Limit are secured against (i) Properties of directors of the Company (ii) Pledge of FDR (excluding BG margin)
of the Company (iii) Pari pasu charge over industrial unit (land & building) at Plot H-1, Sector - 57, Faridabad Industrial
Town (FIT), Faridabad, Haryana, in the name of the company, measuring 540.31 Sq. yards, (iv) Pari pasu charge of
industrial unit (land & building) at Plot H-2, Sector - 57, Faridabad Industrial Town (FIT), Faridabad, Haryana, in the name
of the company, measuring 540.31 Sq. yards as a collateral Security (v) Personal Guarantee provided by Mr. Sanjay
Lodha (Director of Company), Mr. Vivek Lodha (Director of Company), Mr. Navin Lodha (Director of Company), Mr. Niraj
Lodha (Director of Company) and Ms. Madhuri Lodha (Mortgagor Guarantor) (Relative of Director) with Indian Bank.
Interest rate on the above loans outstanding as at the year ended March 31, 2025 is 3M T-Bill Spread.

*During the financial year ended March 31, 2025 the company has incurred ''Nil (March 31, 2024: ''3.56 million) towards service received from the
auditors of the Company in relation to the proposed Initial Public Offering (IPO).

36 Income tax

The Company is subject to income tax in India on the basis of financial statements. 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.

Pursuant to the Taxation Law (Amendment) Ordinance, 2019 (''Ordinance'') issued by Ministry of Law and Justice (Legislative
Department) on September 20, 2019 which is effective from April 01, 2019, domestic companies have the option to pay
income tax at 22% plus applicable surcharge and cess (''new tax regime'') subject to certain conditions. The Company based
on the current projections has chosen to adopt the reduced rates of tax as per the Income Tax Act, 1961 from the financial
year 2019-20 and accordingly the Company has accounted deferred tax based on the reduced applicable tax rates.

37 Earnings per share (''EPS'')

Basic EPS amounts are calculated by dividing the profit / loss for the year attributable to equity shareholders of the Company
by the weighted average number of equity shares outstanding during the year. Partly paid equity shares are treated as a
fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity
share during the reporting year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity shareholders by the weighted average number
of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on
conversion of all the dilutive potential equity shares into equity shares.

Risk Exposure

i) Plan Characteristics and Associated Risks:

The Gratuity scheme is a Defined Benefit Plan that provides for a lump sum payment made on exit either by way
of retirement, death or disability. The benefits are defined on the basis of final salary and the period of service
and paid as lump sum at exit. The Plan design means the risks commonly affecting the liabilities and the financial
results are expected to be:"

a) Discount rate risk: The discount rate is generally based upon the market yields available on Government
bonds at the accounting date relevant to currency of benefit payments for a term that matches the liabilities.

b) Salary Growth risk: Salary growth rate is enterprise''s long term best estimate as to salary increases &
takes account of inflation, seniority, promotion, business plan, HR policy and other relevant factors on long
term basis.

c) Demographic risks: Attrition rates are the enterprise''s best estimate of employee turnover in future
determined considering factors such as nature of business & industry, retention policy, demand & supply in
employment market, standing of The Enterprise, business plan, HR Policy etc.

The above sensitivity analysis are based on a change in an assumption while holding all others assumptions constant.
In the event of change in more than one assumption, the impact would be different than the stated above. The methods
and any types of assumptions used in preparing the sensitivity analysis did not change compared to prior period.

40 Segment reporting

Segments are identified in line with Ind AS-108, "Operating Segment" [specified under the section 133 of the Companies
Act 2013 (the Act)] read with Companies (Indian Accounting Standards) Rule 2015 (as amended from time to time) and
other relevant provision of the Act, taking into consideration the internal organisation and management structure
as well as differential risk and return of the segment. Based on above, as the company is engaged in the business of
manufacturing and sale of computer servers and there is other operating revenue in the form of AMC and related
services. Accordingly, the Company has identified "Computer server" as the only primary reportable segment. The
Company does not have any geographical segment as the Company mainly operates from single geographical location,
primarily within India and the volume of exports is not significant. Hence no separate disclosures are provided in these
financial statements.

Non-current assets by geographical area

All non current assets of the Company are located in India

Information about major customers

There are two customers (March 31, 2024: Two customers) which amounts to 10% or more of the Company''s revenue.

41 Leases
a) Leases

I. Company as a lessee

The Company has lease contracts for office facilities. The lease term of the office facilities is generally 1 - 9 years. The
Company''s obligations under its leases are secured by the lessor''s title to the leased assets.

The Company also has certain leases of office facilities and office Equipment''s with low value or tenure less than 1 year.
The Company applies the ''lease of low-value assets''/ ''short term lease ''recognition exemptions for these leases.

The Company has lease contracts that include extension and termination options. The Company applies judgement in
evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That
is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination.
After the commencement date, the Company reassesses the lease term if there is a significant event or change in
circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to
terminate (e.g., construction of significant leasehold improvements or significant customisation to the leased asset).

(ii) Contingent liabilities

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

The following is a description of claims and assertions where a potential loss is possible, but not probable. The Company
believes that none of the contingencies described below would have a material adverse effect on the Company''s financial
condition, results of operations or cash flows.

43 Capital Management

The Company''s capital management is intended to maximise the return to shareholders for meeting the long-term and
short-term goals of the Company through the optimisation of the debt and equity balance.

The Company determines the amount of capital required on the basis of annual and long-term operating plans and strategic
investment plans. The funding requirements are met through equity and long-term/short-term borrowings. The Company
monitors the capital structure on the basis of Net debt to equity ratio and maturity profile of the overall debt portfolio of
the Company.

For the purpose of capital management, capital includes issued equity capital, securities premium and all other reserves
attributable to the equity shareholders of the Company.

Net debt includes all long and short-term borrowings as reduced by cash and cash equivalents.

b) Fair value hierarchy

All financial assets and liabilities for which fair value is measured in the financial statements are categorised within the
fair value hierarchy, described as follows: -

Level 1 - Quoted prices in active markets

Level 2 - Inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly.

Level 3 - Inputs that are not based on observable market data

There are no Assets or Liabilities which are required to be measured at FVTPL/FVTOCI. Accordingly no disclosure
required for Fair value hierarchy.

There are no transfers between level 1, level 2 and level 3 during the year.

The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements
are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts
would be significantly different from the values that would eventually be received or settled.

45 Financial risk management objectives and policies

The Company''s activities are exposed to a variety of financial risks from its operations. The key financial risks include market
risk (including foreign currency risk and interest rate risk), credit risk and liquidity risk.

The Company''s senior management oversees the management of these risks. The management is responsible for formulating
an appropriate financial risk governance framework for the Company and for periodically reviewing the same. The senior
management ensures 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:

(1) Market risk

Market risk is the risk of any loss in future earnings, in realisable fair values or in 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
interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future
specific market movements cannot be normally predicted with reasonable accuracy.

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

(2) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract,
leading to a financial loss. Financial instruments that are subject to credit risk and concentration thereof principally
consist of trade receivables.

Customer credit risk is managed by Company''s established policy, procedures and control relating to customer credit risk
management. An impairment analysis is performed at each reporting date on an individual basis for major customers.
The Company does not hold collateral as security. Further, trade receivables contribution to approximately 90% to 94%
of the customers of the Company are due for less than 180 days during each reporting period. The company majorly
deals with government authorities and agencies which further reduces the credit risk of the company.

49 Other Statutory Information

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against
the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 and rules
made thereunder.

(ii) The Company did not have any material transaction with companies struck off under Section 248 of the Companies
Act, 2013 or Section 560 of Companies Act, 1956 during the respective reported financial year.

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

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

(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(s), 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

(vi) The Company has not received any fund from any person(s) or entity(s), 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) Details of IPO Proceeds

The Company received an amount of ''1,940.24 million (net of estimated IPO expense of ''119.76 million) via fresh
issue of 41,20,000 equity shares through Initial Public Offering (IPO). The Company''s equity shares were listed on the
National Stock Exchange (NSE) and on the BSE Limited (BSE) on the July 27, 2023. The utilisation of net IPO proceeds is
summarised below:

The Unutilised amount ''113.14 million of IPO Proceeds under "Funding our Capital Expenditure requirements" Category
has been transferred to "General Corporate Purposes" category vide board resolution dated March 24, 2025. Further
such transfer is within allowable limits (i.e. 25% of gross proceeds) as mentioned in offer document.

(viii) Details of IPO Expense

The Company has estimated ''365.67 million as IPO related expenses and allocated such expenses between the
Company and Selling Shareholders based on an agreement between the Company and Selling Shareholders and in
proportion to the total proceeds raised of ''6,310 million, amounting to ''119.76 million and ''245.91 million respectively.
The Company''s share of expenses of ''105.24 million (net of GST benefits) incurred till March 31,2025 has been adjusted
against Securities Premium.

(ix) Details of pre IPO Proceeds and Expense

The Company received ''479.15 million (net of pre IPO expenses incurred of ''30.85 million) from certain institutional
investors towards proceeds out of fresh issue of equity shares raised through pre IPO placement of shares. Accordingly,
an amount of ''27.74 million (net of GST benefit) has been adjusted against Securities Premium.

(x) The company does not have any unrecorded transactions which have been surrendered or disclosed as Income during
the year in the tax assessment under the Income Tax Act, 1961.

(xi) The company is not declared wilful defaulter by any bank, financial institution or lender.

(xii) During the year, no scheme of arrangements in relation to the company has been approved by the competent authority
in terms of Section 232 to 237 of the Companies Act,2013. Accordingly, this clause is not applicable to the company.

50 Production Linked Incentives

Netweb Technologies India Limited has been awarded Production Linked Incentive (PLI) Scheme for IT hardware (eligible
product -Servers) vide approval letter no. IFCI/CASD/MeitY/PLI-ITHW-210701024 dated July 01, 2021 under the PLI Scheme
introduced by the Government of India vide gazetted Notification no. CG-DL-E-03032021-225613 dated March 03, 2021
and the PLI Guidelines issued thereunder, as amended from time to time. Now the company has shifted to PLI- 2.0 for IT
Hardware notified vide Gazette Notification No. CG-DL-E-30052023-246165 dated May 29, 2023, vide approval letter dated
IFCI/Meity/PLI-ITHW-231124033 dated November 24, 2023. Under the new scheme the company is eligible to get a certain
percentage of their sales of eligible products as incentive and is valid from Financial Year 2023-24 (July to March) to 2028¬
29 (April to June). The company had achieved threshold limits of both investment & sales as prescribed under the scheme
for 1^st Year & 2^nd year i.e. FY 21-22 and FY 23-24, and has successfully claimed and received the incentive amount of ''38.99
Million on date January 23, 2024 and ''59.40 million on date April 02, 2025 from Meity. The company will also be filing claim
for 3^rd year ie. FY 2024-25.

51 Disclosure on Employees Stock Options Scheme

a) ESOP Policy

Equity share-based payments to employees and other providing similar services are measured at the fair value of the
equity instruments at the grant date. Details regarding the determination of the fair value of equity-settled share-based
payments transactions are set out in notes to accounts.

The fair value determined at the grant date of the equity-settled share based payments is expensed on straight-line
basis over the vesting period, based on the company''s estimate of equity instrument that will eventually vest, with a
corresponding increase in equity. At the end of each reporting period, the company revises its estimate of the number
of equity instruments expected to vest. The impact of the revision of original estimates, if any, is recognised in the
Statement of Profit and Loss such that the cumulative expenses reflects the revised estimate, with a corresponding
adjustment to the Share Option Outstanding Account.

b) ESOP Disclosure
Details of scheme:

The Company adopted the ESOP Scheme "Netweb- Employee Stock Option Plan 2023" pursuant to resolutions passed
by Board of Directors of the Company at their meeting held on December 24, 2022 and by Shareholders of the Company
at their meeting held on January 09, 2023 and as amended by the Board of Directors of the Company at their meeting
held on February 20, 2023 and approved by the Shareholders of the Company at their meeting held on February 23,
2023. The Plan has been made effective from January 21, 2023.

The Plan provides for grant of stock options, wherein one stock option would entitle the holder of the option a right to
apply for one equity share of the company upon fulfilment of vesting conditions prescribed in the Plan.

The following stock options were granted to eligible employees under the Netweb Employee Stock Option Plan 2023:

a) Grant on January 31, 2023 (Financial Year 2022-23):

Stock options were granted to eligible employees and Key Managerial Personnel. These options shall vest over a
period of 3 years, with an equal number of options vesting each year from the date of grant. The vested options
may be exercised within the prescribed exercise period. The exercise price for these options is ''2 per option.

b) Grant on January 18, 2025 (Financial Year 2024-25):

A fresh grant of stock options was made to eligible employees and Key Managerial Personnel. These options shall
vest over a period ranging from 1-2 years from the grant date, with equal number of options vesting at each interval.
The vested options may be exercised within the stipulated exercise period. The exercise price for this grant is ''2
per option

53 Events occurring after the Balance Sheet Date:

There are no events occurring after Balance Sheet date for the Financial Year 2024-25 except Note No.52 (Dividend on
Equity Shares).

For S S Kothari Mehta & Co. LLP For and on behalf of the Board of Directors of

Chartered Accountants Netweb Technologies India Limited

Firm''s registration number: 000756N / N500441

Jalaj Soni Sanjay Lodha Navin Lodha

Partner Managing Director Director

Membership No. 528799 DIN: 00461913 DIN: 00461924

Place: Faridabad Ankit Kumar Singhal Lohit Chhabra

Date: May 03, 2025 Chief Financial Officer Company Secretary

Place: Faridabad
Date: May 03, 2025

Change in accounting estimate

During the financial year ended 31 March 2024, the management of the Company performed an internal review of intangibles, accordingly, the management has changed its method of amortisation related to intangibles from written down value to Straight line method.

Accordingly, there is decrease in amortisation expense for the financial year 2023-24 by '' 4.14 million and profit before tax for the year ended 31 March 2024, increased from '' 1015.42 millions to '' 1019.56 millions and profit per share has increased from '' 13.85 to '' 13.91.

During the previous year, the Company had subscribed 9,900 equity shares of ''10/- each of Netweb Foundation (a Section 8 - Company as per Companies Act 2013)}. Netweb Foundation became a subsidiary of the Company w.e.f. May 25,2022 by virtue of holding 9,900 equity shares equivalent to 99% share capital in Netweb Foundation .Netweb Foundation is prohibited to distribute any dividend / economic benefits to its members, hence the Company is unable to earn any variable return/ economic benefits from the voting rights through its holding in equity shares of Netweb Foundation. Accordingly, the above investment does not meet the definition of control under Ind AS 110 -''Consolidated Financial Statements'' and the aforesaid investment value of '' 0.10 millions had been charged off to the statement of profit and loss during the previous year ended 31 March 2023.

(c) Terms/rights attached to equity shares

The Company has only one class of equity shares having par value of '' 2 per share (PY '' 2 per share). Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend, if any in Indian rupees. The dividend proposed, if any by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

The Board of Directors of the Company in the Board meeting dated February 15, 2023 and Shareholders of the company in the Extra Ordinary General Meeting dated February 16, 2023 have approved the sub-division of each of the Equity Share of the Company having a face value of '' 10/- each in the Equity Share Capital of the Company be sub-divided into 5 Equity Shares having a face value of '' 2/- each ("Sub-division"). Further, the equity portion of authorized share capital of the company was revised to 7,50,00,000 equity shares of face value of '' 2 each i.e. '' 150 millions.

Further the Board of Directors at its meeting held on February 15, 2023, pursuant to Section 63 and other applicable provisions, if any, of the Companies Act, 2013 and rules made thereunder, proposed that a sum of '' 45.27 millions be capitalized as Bonus Equity shares out of free reserves and surplus, and distributed amongst the Equity Shareholders by issue of 2,26,32,880 Equity shares of '' 2/- each credited as fully paid to the Equity Shareholders in the proportion of 4 (Four ) Equity share for every 5 (Five) Equity shares. It was approved in the meeting of shareholders held on February 16, 2023. The Board of Directors of the Company in the Board meeting dated February 20, 2023 allotted the Bonus Equity Shares to the shareholders of the Company.

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 equity shareholders

During the year ended March 31, 2023, the Company allotted 2,26,32,880 equity shares as fully paid up bonus shares in proportion of 4:1 (i.e. four bonus shares for every one equity share held) to the eligible members/beneficial owners, by capitalisation of amount of '' 45.27 millions which was by way of transfer from Retained Earnings '' 37.28 millions and Securities Premium Reserve. '' 7.99 millions.

Such bonus shares rank pari passu in all respects and carry the same rights as the existing equity shareholders and are entitled to participate in full, in any dividend and other corporate action, recommended and declared after the new equity shares are allotted.

(e) Share based payments

During the financial year 2022-23, Netweb- Employee Stock Option Plan 2023"" pursuant to resolutions passed by Board of Directors of the Company at their meeting held on December 24, 2022 and by Shareholders of the Company at their meeting held on January 09,2023 and as amended by the Board of Directors of the Company at their meeting held on February 20,

Nature of security and terms of repayment for borrowings:

(A) Secured Term loans

(1) Term Loans from Banks (a) Security Terms

(i) Indian Bank GECLS-Covid-19 Loan amounting to Nil (March 31,2023: '' 2.94 millions) carrying interest rate of Repo Rate Spread 2% per annum and is repayable in monthly equal instalments. The loan is secured by Pari pasu charge with HDFC bank over the assets to be created out of the loan proceeds on industrial unit (land & proposed building) at Plot H-1, Sector - 57, Faridabad Industrial Town (FIT), Faridabad, Haryana, in the name of the company, measuring 540.31 Sq. yards , Pledge of FDR (excluding BG margin) of the Company and Personal Guarantee and residential properties provided by Mr. Sanjay Lodha (Director of Company), Mr. Vivek Lodha (Director of Company), Mr. Navin Lodha (Director of Company), Mr. Niraj Lodha (Director of Company), Ms. Madhuri Lodha ( Mortgagor Guarantor) (Relative of Director), Ms. Priti Lodha ( W/o Mr.Sanjay Lodha ) (upto February 21, 2023) and Ms.Sweta Lodha ( W/o Mr. Navin Lodha) (upto February 21,2023) .

(ii) Term loan from Indian Bank for the construction of building amounting to Nil (March 31, 2023: '' 14.38 millions) carrying interest rate of Repo Rate Spread 2% per annum, is secured by pari pasu charge with HDFC Bank over industrial unit (land & proposed building) at Plot H-2, Sector - 57, Faridabad Industrial Town (FIT), Faridabad, Haryana, in the name of the company, measuring 540.31 Sq. yards, along with the hypothecation of Fixed Assets of the company and Personal Guarantee cum residential properties provided by Mr. Sanjay Lodha (Director of Company), Mr. Vivek Lodha (Director of Company), Mr. Navin Lodha (Director of Company), Mr. Niraj Lodha (Director of Company), Ms. Madhuri Lodha ( Mortgagor Guarantor) (Relative of Director), Ms. Priti Lodha ( W/o Mr.Sanjay Lodha )(Personal Guarantee) (upto February 21, 2023) and Ms.Sweta Lodha ( W/o Mr. Navin Lodha)(Personal Guarantee) (upto February 21,2023) .

(iii) Working Capital Term Loan under GECLS 1.0 (extension) from Indian Bank amounting to Nil (March 31,2023: '' 22.20 millions) carrying interest rate of Repo Rate Spread 2% per annum and is repayable in monthly equal instalments. The loan is secured by pari pasu charge with HDFC Bank over the assets to be created out of the loan proceeds, on industrial unit (land & proposed building) at Plot H-1, Sector - 57, Faridabad Industrial Town (FIT), Faridabad, Haryana, in the name of the company, measuring 540.31 Sq. yards , Pledge of FDR (excluding BG margin) of the Company and 100% guarantee cover of National Credit Guarantee Trustee Company Limited (NCGTC).

1 Cash credit from Indian Bank amounting to Nil (March 31,2023:'' 151.32 Millions) is secured against Pari pasu charge on stock, Book debts and other current assets of the Company, both present and future with HDFC bank.

Further CC Limit are secured against (i) Properties of directors of the Company (ii) Pledge of FDR (excluding BG margin) of the Company (iii) Pari pasu charge on industrial unit (land & building) at Plot H-1, Sector - 57, Faridabad Industrial Town (FIT), Faridabad, Haryana, in the name of the company, measuring 540.31 Sq. yards, along with the hypothecation of Fixed Assets of the company as a collateral Security (iv) Pari pasu charge on industrial unit (land & Proposed building) at Plot H-2, Sector - 57, Faridabad Industrial Town (FIT), Faridabad, Haryana, in the name of the company, measuring 540.31 Sq. yards, along with the hypothecation of Fixed Assets of the company (After liquidation of Term Loan , the property will be held as collateral for working capital facility) as a collateral Security (v) Personal Guarantee provided by Mr. Sanjay Lodha (Director of Company), Mr. Vivek Lodha (Director of Company), Mr. Navin Lodha (Director of Company), Mr. Niraj Lodha (Director of Company), Ms. Madhuri Lodha ( Mortgagor Guarantor) (Relative of Director), Ms. Priti Lodha ( W/o Mr.Sanjay Lodha ) (upto February 21,2023) and Ms.Sweta Lodha ( W/o Mr. Navin Lodha) (upto February 21,2023) with HDFC bank.

Interest rate on the above loans outstanding as at the year ended March 31,2024 is Repo Rate 2%.

2 Cash credit from HDFC Bank amounting to Nil (March 31, 2023: '' 40.84 Millions) is secured against Pari pasu charge on current assets, movable and immovable fixed assets with Indian Bank.

Further CC Limit are secured against (i) Properties of directors of the Company (ii) Pledge of FDR (excluding BG margin) of the Company (iii) Pari pasu charge over industrial unit (land & building) at Plot H-1, Sector - 57, Faridabad Industrial Town (FIT), Faridabad, Haryana, in the name of the company, measuring 540.31 Sq. yards, (iv) Pari pasu charge of industrial unit (land & Proposed building) at Plot H-2, Sector - 57, Faridabad Industrial Town (FIT), Faridabad, Haryana, in the name of the company, measuring 540.31 Sq. yards as a collateral Security (v) Personal Guarantee provided by Mr. Sanjay Lodha (Director of Company), Mr. Vivek Lodha (Director of Company), Mr. Navin Lodha (Director of Company), Mr. Niraj Lodha (Director of Company) and Ms. Madhuri Lodha ( Mortgagor Guarantor) (Relative of Director) with Indian Bank.

Interest rate on the above loans outstanding as at the year ended 31^st March 2024 is 3M T-Bill 1.86%.

4 The company has been sanctioned working capital limit in excess of '' Five crore in aggregate, at any point of time during the year from bank on the basis of security of current assets. The quarterly return/statement filed by company with the banks are in agreement with the books of account of the company of the respective quarters.

A contract liabilities is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract.

36 Income tax

The Company is subject to income tax in India on the basis of financial statements. 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

Pursuant to the Taxation Law (Amendment) Ordinance, 2019 (''Ordinance'') issued by Ministry of Law and Justice (Legislative Department) on September 20, 2019 which is effective from April 1,2019, domestic companies have the option to pay income tax at 22% plus applicable surcharge and cess (''new tax regime'') subject to certain conditions. The Company based on the current projections has chosen to adopt the reduced rates of tax as per the Income Tax Act, 1961 from the financial year 2019-20 and accordingly the Company has accounted deferred tax based on the reduced applicable tax rates.

37 Earnings per share (''EPS'')

Basic EPS amounts are calculated by dividing the profit / loss for the year attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the year. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity shareholders by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

39 Gratuity and other post-employment benefits plans a) Defined contribution plan

The Company''s contribution to provident fund and other funds are considered as defined contribution plans. The contributions are charged to the statement of profit and loss as they accrue. Contributions to provident fund and other funds included in employee benefits expense (refer note 31) are as under:

b) Defined benefit plans

The Company has a defined benefit gratuity plan. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, every employee who has completed five years or more of service gets gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The level of benefits provided depends on the member''s length of service and salary at retirement age. The Gratuity plan is unfunded.

Risk Exposure

i) Plan Characteristics and Associated Risks:

The Gratuity scheme is a Defined Benefit Plan that provides for a lump sum payment made on exit either by way of retirement, death or disability. The benefits are defined on the basis of final salary and the period of service and paid as lump sum at exit. The Plan design means the risks commonly affecting the liabilities and the financial results are expected to be:

a) Discount rate risk : The discount rate is generally based upon the market yields available on Government bonds at the accounting date relevant to currency of benefit payments for a term that matches the liabilities.

b) Salary Growth risk : Salary growth rate is enterprise''s long term best estimate as to salary increases & takes account of inflation, seniority, promotion, business plan, HR policy and other relevant factors on long term basis.

c) Demographic risks: Attrition rates are the enterprise''s best estimate of employee turnover in future determined considering factors such as nature of business & industry, retention policy, demand & supply in employment market, standing of The Enterprise, business plan, HR Policy etc.

The above sensitivity analysis are based on a change in an assumption while holding all others assumptions constant. In the event of change in more than one assumption, the impact would be different than the stated above. The methods and any types of assumptions used in preparing the sensitivity analysis did not change compared to prior period.

40 Segment reporting

Segments are identified in line with Ind AS-108, ""Operating Segment"" [specified under the section 133 of the Companies Act 2013 (the Act)] read with Companies (Indian Accounting Standards) Rule 2015 (as amended from time to time) and other relevant provision of the Act, taking into consideration the internal organisation and management structure as well as differential risk and return of the segment. Based on above, as the company is engaged in the business of manufacturing and sale of computer servers and there is other operating revenue in the form of AMC and related services. Accordingly, the Company has identified ""Computer server"" as the only primary reportable segment. The Company does not have any geographical segment as the Company mainly operates from single geographical location, primarily within India and the volume of exports is not significant. Hence no separate disclosures are provided in these financial statements.

Non-current assets by geographical area

All non current assets of the Company are located in India

Information about major customers

There are two customer (March 31,2023: Two customer) which amounts to 10% or more to the Company''s revenue.

41 Leases a) Leases

I. Company as a lessee

The Company has lease contracts for office facilities . The lease term of the office facilities is generally 1 - 9 years .The Company''s obligations under its leases are secured by the lessor''s title to the leased assets.

The Company also has certain leases of office facilities and office Equipment''s with low value or tenure less than 1 year . The Company applies the ''lease of low-value assets''/ ''short term lease ''recognition exemptions for these leases.

The Company has lease contracts that include extension and termination options. The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customisation to the leased asset).

(ii) Contingent liabilities

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

The following is a description of claims and assertions where a potential loss is possible, but not probable. The Company believes that none of the contingencies described below would have a material adverse effect on the Company''s financial condition, results of operations or cash flows.

43 Capital Management

The Company''s capital management is intended to maximise the return to shareholders for meeting the long-term and short-term goals of the Company through the optimization of the debt and equity balance.

The Company determines the amount of capital required on the basis of annual and long-term operating plans and strategic investment plans. The funding requirements are met through equity and long-term/short-term borrowings. The Company monitors the capital structure on the basis of Net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.

For the purpose of capital management, capital includes issued equity capital, securities premium and all other reserves attributable to the equity shareholders of the Company.

Net debt includes all long and short-term borrowings as reduced by cash and cash equivalents.

b) Fair value hierarchy

All financial assets and liabilities for which fair value is measured in the financial statements are categorised within the fair value hierarchy, described as follows: -

Level 1 - Quoted prices in active markets

Level 2 - Inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly.

Level 3 - Inputs that are not based on observable market data

There are no Assets or Liabilities which are required to be measured at FVTPL/FVTOCI. Accordingly no disclosure required for Fair value hierarchy.

There are no transfers between level 1, level 2 and level 3 during the year.

The carrying amount of financial assets and financial liabilities measured at amortized cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.

45 Financial risk management objectives and policies

The Company''s activities are exposed to a variety of financial risks from its operations. The key financial risks include market risk (including foreign currency risk and interest rate risk), credit risk and liquidity risk.

The Company''s senior management oversees the management of these risks. The management is responsible for formulating an appropriate financial risk governance framework for the Company and for periodically reviewing the same. The senior management ensures 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 summarized below:

(1) Market risk

Market risk is the risk of any loss in future earnings, in realisable fair values or in 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 interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

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

(2) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Financial instruments that are subject to credit risk and concentration thereof principally consist of trade receivables.

Customer credit risk is managed by Company''s established policy, procedures and control relating to customer credit risk management. An impairment analysis is performed at each reporting date on an individual basis for major customers. The Company does not hold collateral as security. Further, trade receivables contribution to approximately 75% to 93% of the customers of the Company are due for less than 180 days during each reporting period. The company majorly deals with government authorities and agencies which further reduces the credit risk of the company.

With respect to Trade receivables, the Company has constituted the terms to review the receivables on periodic basis and to take necessary mitigations, wherever required. The Company creates allowance for all unsecured receivables based on lifetime expected credit loss based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due and rates used in the provision matrix.

(3) Liquidity risk

Liquidity risk is the risk, where 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 company''s approach is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due.

49 Other Statutory Information

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

(ii) The Company did not have any material transaction with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956 during the respective reported financial year.

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

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

(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(is), 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"

(vi) The Company has not received any fund from any person(s) or entity(is), 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"

(viii) Details of IPO Expense

The Company has estimated ''365.67 million as IPO related expenses and allocated such expenses between the Company and Selling Shareholders based on an agreement between the Company and Selling Shareholders and in proportion to the total proceeds raised of ''6,310 million, amounting to ''119.76 million and ''245.91 million respectively. The Company''s share of expenses of ''96.57 million (net of GST benefits) incurred till 31 March 2024 has been adjusted against Securities Premium as at 31 March 2024.

(ix) Details of pre IPO Proceeds and Expense

The Company received ''479.15 million (net of pre IPO expenses incurred of ''30.85 million) from certain institutional investors towards proceeds out of fresh issue of equity shares raised through pre IPO placement of shares. Accordingly, an amount of ''27.74 million (net of GST benefit) has been adjusted against Securities Premium as at 31 March 2024.

Details of pre IPO expenses debited to Securities Premium during the year ended 31 March 2024

(ix) Details of pre IPO Proceeds and Expense

The Company received ''479.15 million (net of pre IPO expenses incurred of ''30.85 million) from certain institutional investors towards proceeds out of fresh issue of equity shares raised through pre IPO placement of shares. Accordingly, an amount of ''27.74 million (net of GST benefit) has been adjusted against Securities Premium as at 31 March 2024.

(x) The company does not have any unrecorded transactions which have been surrendered or disclosed as Income during the year in the tax assessment under the Income Tax Act, 1961.

(xii) During the year, no scheme of arrangements in relation to the company has been approved by the competent authority in terms of Section 232 to 237 of the Companies Act,2013. Accordingly, this clause is not applicable to the company.

50 Code on Social Security

The Indian Parliament has approved the Code on Social Security, 2020 which may impact the employee benefit expenses of the Company. The effective date from which the changes are applicable is yet to be notified and the rules for quantifying the financial impact are yet to be determined. The Company will give appropriate impact in the financial statements once the code becomes effective and related rules to determine the financial impact are notified.

51 Production Linked Incentives

Netweb Technologies India Limited was been awarded Production Linked Incentive (PLI) Scheme for IT hardware (eligible product -Servers) vide approval letter no. IFCI/Advisory/MeitY/PLITHW-221007029 dated 7^th October 2022 under the PLI Scheme introduced by the Government of India vide gazetted Notification no. CG-DL-E-03032021-225613 dated 03^rd March 2021 and the PLI Guidelines issued thereunder, as amended from time to time. Now the company has shifted to PLI-2.00 vide approval letter dated IFCI/Meity/PLI-ITHW-231 124033 dated 24^th November 2023. Under the new scheme the company is eligible to get a certain percentage of their sales of eligible products as incentive and is valid from Financial Year 2023-24 to 2028-29 (April to June). The company had achieved threshold limits of both investment & sales as prescribed under the scheme for 1^st Year i.e. FY 21-22, and has successfully claimed and received the incentive amount of '' 38.99 Million from Meity. The company is in process of filing incentive claim for the 2^nd year i.e.FY 2023-24.

52 Disclosure on Employees Stock Options Scheme

a) ESOP Policy

Equity share-based payments to employees and other providing similar services are measured at the fair value of the equity instruments at the grant date. Details regarding the determination of the fair value of equity-settled share-based payments transactions are set out in notes to accounts.

The fair value determined at the grant date of the equity-settled share based payments is expensed on straight-line basis over the vesting period, based on the company''s estimate of equity instrument that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of original estimates, if any, is recognised in the Statement of Profit and Loss such that the cumulative expenses reflects the revised estimate, with a corresponding adjustment to the Share Option Outstanding Account.

b) ESOP Disclosure

Details of scheme:

The Company adopted the ESOP Scheme ""Netweb- Employee Stock Option Plan 2023"" pursuant to resolutions passed by Board of Directors of the Company at their meeting held on December 24, 2022 and by Shareholders of the Company at their meeting held on January 09,2023 and as amended by the Board of Directors of the Company at their meeting held on February 20, 2023 and approved by the Shareholders of the Company at their meeting held on February 23, 2023. The Plan has been made effective from January 21,2023.

The Plan provides for grant of stock options, wherein one stock option would entitle the holder of the option a right to apply for one equity share of the company upon fulfilment of vesting conditions prescribed in the Plan. The stock options granted to each eligible employee shall vest over a period of 3 years with equal vesting from the grant date. The eligible employees shall be entitled to exercise the vested options within the exercise period. The Exercise price of the stock options granted is INR 2

54 Audit Trail

The company has used accounting software for maintaining its books of accounts which has feature of recording Audit trail (Edit log) facility and the same has operated from April 5, 2023 onwards for all relevant transaction recorded in the software.

55 Events occurring after the Balance Sheet Date:

There are no events occurring after Balance Sheet date for the Financial Year 2023-24 except Note No.53 (Dividend on Equity Shares).

During the year, the Company has subscribed 9,900 equity shares of Rs 10/- each ofNetweb Foundation (a Section 8 - Company as per Companies Act 2013)} Netweb Foundation became a subsidiary of the Company w.e f. May 25,2022 by virtue of holding 9,900 equity shares equivalent to 99% share capital in Netweb Foundation Netweb Foundation is prohibited to distribute any dividend / economic benefits to its members, hence the Company is unable to earn any variable return/ economic benefits from the voting rights through its holding m equity shares ofNetweb Foundation Accordingly, the above investment does not meet the definition of control under Ind AS 110 -’Consolidated Financial Statements'' and the aforesaid investment v alue of Rs 0 10 millions has been charged off to the statement of profit and loss during the year ended 31 March 2023

(c) Terms/righls attached to equity shares

The ( o m pally lias only one class of equity shares having par value ot Rs 2 per share (PY Rs 10 per share). Each holder of equity sliares is entitled to one vote per share The Company declares and pays dividend, if any in Indian rupees The dividend proposed, it any by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meetutg.

Hie Board of Directors of the Company in the Board meeting dated February 15. 2023 and Sliareholders of the company in the Extra Ordinary General Meeting dated February 16. 2023 have approved the sub-division of each of the Equity'' Share of the Company having a lace value of Rs. 10/- each in the Equity Share Capital of the Company be sub-divided into 5 Equity Shares having a lace value of Rs 2 - each ("Sub-division”). Further, the equity'' portion of authorized share capital of the company was revised to 7.50.00.000 equity shares of face value of Rs 2 each t.e Rs 150 millions.

Further the Board of Directors at its meeting held on February 15, 2023. pursuant to Section 63 and other applicable provisions, if any. of the Companies Act, 2013 and rules made thereunder, proposed that a sum of Rs 15 27 millions be capitalized as Bonus Equity'' shares out of free reserves and surplus, and distributed amongst the Equity Shareholders by issue of 2.26.32.8S0 Equity shares of Rs. 2 - each credited as fully paid to the Equity Shareholders ui the proportion of 4 (Four) Equity share for every 5 (Five) Equity shares It was approved in the meeting of sliareholders held on February 16, 2023 The Board of Directors ofthe Company in the Board meeting dated February 20. 2023 allotted the Bonus Equitv Shares to the shareholders of the Company

In the event of liquidation of the Company, the holders of equity sliares will be entitled to receive remaining assets ofthe Company, alter distribution of all preferential amounts. The distribution will be in proportion to the number of equity sliares held by the equity sliareholders

(d) Aggregate number of equity shares issued as bonus during the period of five years immediately proceeding the reporting date:_

Particulars As at 31-March-2023 As at 31-March-2022

Equity share alloted as frilly paid bonus sliares by capitalisation of Capital Reatmed Earnings and Security Premium 45.27

During the year ended March 31, 2023, the Company allotted 2,26,32,880 equity sliares as fully paid up bonus sliares in proportion of 4:1 (i.e. tour bonus sliares for every one equity share held) to the eligible members/beneficial owners, by capitalisation ofamount of Rs. 45.27 millions which was by way oftransfer from Retained Earnings Rs. 37.28 millions and Securities Premium Reserve. Rs. 7.99 millions.

Such bonus sliares rank pari passu in all respects and carry the same rights as the existing equity sliareholders and are entitled to participate in full, in any dividend and other corporate action, recommended and declared after the new equity shares are allotted.

(e) Share based payments

During the financial year 2022-23, Netweb- Employee Stock Option Plan 2023” pursuant to resolutions passed by Board of Directors of the Company at their meeting held on December 24, 2022 and by Shareholders ofthe Company at their meeting held on January 09,2023 and as amended by the Board of Directors ofthe Company at their meeting held on February 20, 2023 and approved by the Shareholders ofthe Company at their meeting held on February'' 23, 2023. The Plan lias been made effective from January 21, 2023.

The stock options granted to each eligible employee shall vest over a period of 3 years with equal vesting from the grant date The eligible employees shall be entitled to exercise the vested options within the exercise period. The Exercise price ofthe stock options granted is INR 2. (Please refer note 53 for further details)

(h) The Board ofDirectors at their meeting held on May 19, 2023 has proposed dividend of R¹.0.50 per share for the financial year ended March 31, 2023 amounting Rs 25.46 million. The proposed dividend is subject to approval of sliareholders at tire ensuing Annual General Meeting.

Nature and purpose of reserves Securities Premium :

Securities premium is used to record the premium received on issue of shares and is utilised in accordance with the provisions of Companies Act, 2013.

Retained Earnings:-

Retained earnings represents undistributed profits of the Company which can be distributed to its equity shareholders in accordance with the provisions of the Companies Act, 2013.

Share options outstanding account:

The share option outstanding account has been created in accordance with the approved Employee Stock Option Scheme.

Nature of security and terms of repayment for borrowings:

(A) Secured Term loans (1) Term Loans from Banks (a) Security Terms

(i) Indian Bank OECLS-Covid-19 Loan amounting to Rs 2 94 millions (March 31. 2022 Rs 4.84 millions. April 01. 2021 Rs.5.86 millions) earning interest rate of Repo Rate Spread 2% per annum and is repayable in monthly equal installments. The loan is secured by Pari pasu charge with HDFC bank o\cr the assets to be created out of the loan proceeds on industrial unit (land & proposed building) at Plot H-l. Sector - 57. Fandabad Industrial Tow n (FIT). Faridabad. Haryana, in the name of the company, measuring 540.31 Sq yards . Pledge of FDR (excluding BG margin) of the Company and Personal Guarantee and residential properties proxidcd by Mr Sanjay Lodha (Director of Company). Mr Vi\ck l.odha (Director of Company). Mr Navin Lodha (Director of Company). Mr Niraj Lodha (Director of Company). Ms Madhuri Lodha ( Mortgagor Guarantor) (Relative of Director). Ms Priti Lodha ( VV/o Mr Sanjay Lodha ) (upto febmary 21. 2023) and Ms Sxxcta Lodha ( W/o Mr Navin Lodha) (upto february 21. 2023)

(ii) Term loan from Indian Bank for the construction of building amounting to Rs 14.38 millions (March 31. 2022: Nil April 01. 2021 Nil) carrying interest rate of Repo Rate • Spread 2% per annum, is secured by pari pasu charge with HDFC Bank o\cr industrial unit (land & proposed building) at Plot H-2. Sector - 57. Fandabad Industrial Town (FIT). Faridabad. Haryana, in the name of the company, measuring 540.31 Sq yards, along with the hypothecation of Fixed Assets of the company and Personal Guarantee cum residential properties provided by Mr. Sanjay Lodha (Director of Company). Mr Vivck Lodha (Director of Company). Mr. Navin Lodha (Director of Company). Mr. Niraj Lodha (Director of Company). Ms Madhuri Lodha ( Mortgagor Guarantor) (Relative of Director). Ms Priti Lodha ( W/o Mr Sanjay Lodha )(Personal Guarantee) (upto February 21. 2023) and Ms Sweta Lodha ( W/o Mr Navin Lodha)(Personal Guarantee) (upto February 21. 2023)

(in) Working Capital Term Loan under GECLS 1.0 (extension) from Indian Bank amounting to Rs 22.20 millions (March 31. 2022 Rs 22.20 millions: April 01. 2021: Nil) carry ing interest rate of Repo Rate Spread 2% per annum and is repayable in monthly equal installments The loan is secured by pari pasu charge with HDFC Bank o\cr the assets to be created out of the loan proceeds, on industrial unit (land & proposed building) at Plot H-l. Sector - 57. Faridabad Industrial Town (FIT). Faridabad. Haryana, in the name of the company, measuring 540.31 Sq yards . Pledge of FDR (excluding BG margin) of the Company and 100% guarantee co\cr of National Credit Guarantee Trustee Company Limited (NCGTC).

(iv) Term Loan from Indian Bank amounting to Nil (March 31. 2022: Nil: Apnl 01. 2021 Rs 2.36 millions) earning interest rate of repo rate 6.50% per annum and is repayable in monthly equal installments The loan is secured by the exclusive charge oxer EM of industrial unit (land & proposed building) at Plot H-l. Sector - 57. Faridabad Industrial Town (FIT). Fandabad. Haryana, in the name of the company, nicasunng 540.31 Sq yards, along with the hypothecation of Fixed Assets of the company and Personal Guarantee proxidcd by Mr Sanjay Lodha (Director of Company). Mr Vivck Lodha (Director of Company). Mr Navin Lodha (Director of Company). Mr Niraj Lodha (Director ofCompany). Ms. Madhuri Lodha ( Mortgagor Guarantor) (Rclatixe of Director). Ms Priti Lodha ( W/o Mr.Sanjay Lodha ) and Ms Sxxcta Lodha ( W/o Mr Navin Lodha).

(x) Indian Bank Coxid Emergency Credit line amounting to Nil (March 31. 2022 Nil. April 01. 2021: Rs 5.00 millions) carrying interest rate of 8 75% (fixed) per annum and is repayable in monthly equal installments Hie loan is secured by cxclusixc charge oxer the assets to be created out of the loan proceeds, exclusive charge over EM of industrial unit (land & proposed building) at Plot H-l. Sector - 57. Fandabad Industnal Toxxn (FIT). Fandabad. Haryana, in the name of the company, nicasunng 540.31 Sq yards . Pledge of FDR (excluding BG margin) of the Company and Personal Guarantee provided by Mr Sanjay Lodha (Director of Company ). Mr. Vivck Lodha (Director ofCompany). Mr Navin Lodha (Director ofCompany). Mr Niraj Lodha (Director ofCompany). Ms. Madhuri Lodha ( Mortgagor Guarantor) (Rclatixe of Director). Ms Priti Lodha ( W/o Mr.Sanjay Lodha ) and Ms Sxxcta Lodha ( W/o Mr Navin Lodha).

(i) In Case of HDFC Bank Limited. Personal Guarantee proxided by Navin Lodha (Director of Company) and Vivck Lodha (Director ofCompany)

(ii) In Case of Full^non India Credit Co Ltd. Personal Guarantee pro\idcd by Navin Lodha ( Co-borrower) (Director ofCompany).

(iii) In Case of IClO Bank Limited. Personal Guarantee pro\ ided by Sanjay Lodha ( co-applicant ) (Director of Company). Na\in Lodha ( co-applicant)(Director ofCompany). Niraj Lodha ( Co-Applicant/ Guarantor) (Director ofCompany). Vi\ek Lodha ( Co-Applicant/ Gu£>^rintor) (Director ofCompany). Sxxeta Lodha ( Co-applicant) (Relatixe of Director ofCompany) and Madhuri Lodha ( Co-applicant) (Relatixe of Director of Company)

(ix) In Case of IDF^ First Bank Limited. Personal Guarantee provided by Madhuri Lodlia ( Co-Applicant) (Relative of Director ofCompany). Navin Lodha ( Co-Applicant) (Director ofCompany). Niraj Lodha ( Co-Applicant) (Director ofCompany). Sanjay Lodha ( Co-Applicant) (Director ofCompany) and Sweta Lodha ( Co-Applicant) (Relative of Director ofCompany)

(v) In Case of YES Bank Limited. Personal Guarantee proxided by Sanjay Lodha ( Co-Borrow cr) (Director ofCompany). Navin Lodha ( Co-Borrower) (Director ofCompany). Vi\ck Lodha ( Co-Bonoxxcr) (Director ofCompany). Niraj Lodha ( Co-Borrower) (Director ofCompany). Madhuri Lodha( Co-Borrower) (Relatixe of Director ofCompany) and Sxxeta Lodha ( Co-Borroxxer) (Relatixe of Director ofCompany)

Note:

* Cash credit from Indian Bank amounting to Rs. 151.32 Millions (March 31. 2022: 178.42 Millions; April 01. 2021 Rs 129.50 Millions) is secured against Pari pasu charge on stock. Book debts and other current assets of the Company , both present and future xxith HDFC bank

Further CC Limit arc secured against (i) Properties of directors of the Company (ii) Pledge of FDR (excluding BG margin) of the Company (iii) Pari pasu charge on industrial unit (land & building) at Plot H-l. Sector - 57. Fandabad Industrial Toxxn (FIT). Fandabad. Haryana, in the name of the company, measuring 540.31 Sq yards, along xxith the hypothecation of Fixed Assets of the company as a collateral Security (iv) Pari pasu charge on industrial unit (land & Proposed building) at Plot H-2. Sector - 57. Faridabad Industrial Toxxn (FIT). Fandabad. Haryana, in the name of the company, measuring 540.31 Sq yards, along xxith the hypothecation of Fixed Assets of the company (After liquidation of Term Loan . the property will be held as collateral for working capital facility) as a collateral Security (v) Personal Guarantee proxided by Mr Sanjay Lodha (Director ofCompany). Mr Vivck Lodha (Director ofCompany). Mr Navin Lodha (Director ofCompany). Mr Niraj Lodha (Director ofCompany). Ms Madhun Lodlia ( Mortgagor Guarantor) (Relatixe of Director). Ms Pnti Lodha ( W/o Mr Sanjay Lodha ) (upto February 21. 2023) and Ms Sxxeta Lodha ( W/o Mr. Navin Lodlia) (upto febmary 21. 2023) xxith HDFC bank Interest rate on the above loans outstanding as at the year ended March 31. 2023 is Repo Rate 2%.

2 Cash credit from HDFC Bank amounting to Rs 40 84 Millions (March 31. 2022: Nil. April 01. 2021 Nil) is secured against Pari pasu charge on current assets, movable and inimoxable fixed assets xxith Indian Bank

Further CC Limit arc secured against (i) Properties of directors of the Company (ii) Pledge of FDR (excluding BG margin) of the Company (iii) Pan pasu charge oxer industrial unit (land & building) at Plot H-l. Sector - 57. Faridabad Industrial Toxxn (FIT). Faridabad. Haryana, in the name of the company, measuring 540.31 Sq yards, (ix) Pan pasu charge of industrial unit (land & Proposed building) at Plot H-2. Sector - 57. Faridabad Industrial Toxxn(FIT). Faridabad. Haryana, in the name of the company, measuring 540 31 Sq yards as a collateral Security (v) Personal Guarantee proxided by Mr Sanjay Lodha (Director ofCompany). Mr Vixek Lodha (Director of Company). Mr Navin Lodha (Director ofCompany). Mr. Niraj Lodha (Director ofCompany) and Ms Madhuri Lodlia ( Mortgagor Guarantor) (Relatixe of Director) xxith Indian Bank Interest rate on the above loans outstanding as at the year ended 31st March 2023 is 3M T-Bill 1.86%.

’During (he financial year ended March 31,2023 (he company has incurred INR 2 59 million (31 March 2022 Nil) towards service received from (he auditors of the Company in relation to the proposed Initial Public Offering (IPO) The same was not charged off to the statement of profit and loss and was disclosed in ''Other current assets"

36 Income tax

The Company subject to income tax in India on the basis of financial statements 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

Pursuant to th

37 Earnings per share (‘EPS’)

Basic EPS amounts are calculated by dividing the profit / loss for the year attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the year Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting year

Diluted EPS amounts are calculated by dividing the profit attributable to equity shareholders by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares

b) Defined benefit plans

The Company has a defined benefit gratuity plan. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, every employee who has completed five years or more ot service gets gratuity on departure at 15 days salary'' (last drawn salary) for each completed year of service. The level of benefits provided depends on the member’s length of service and salary at retirement age. The Gratuity plan is unfunded.

Ihe following tables summarise the components of net benefit expense recognised in the statement of profit or loss and amounts recognised in the balance sheet for gratuity benefit:

* Assumptions regarding future mortality are set based on actuarial advice in accordance with published statistics (i.e. IALM 2012-14 Ultimate). These assumptions translate into an average life expectancy in years at retirement age

Risk Exposure

i) Plan Characteristics and Associated Risks:

The Gratuity scheme is a Defined Benefit Plan that provides for a lump sum payment made on exit either by way of retirement, death or disability. The benefits are defined on the basis of final salary''and the period of service and paid as lump sum at exit. The Plan design means the risks commonly affecting the liabilities and the financial results are expected to be:

a) Discount rate risk : The discount rate is generally based upon the market yields available on Government bonds at the accounting date relevant to currency of benefit payments for a term that matches the liabilities.

b) Salary Growth risk : Salary growth rate is enterprise’s long term best estimate as to salary increases & takes account of inflation, seniority, promotion, business plan, HR policy and other relevant factors on long term basis.

c) Demographic risks: Attrition rates are the enterprise’s best estimate of employee turnover in future determined considering factors such as nature of business & industry, retention policy, demand & supply in employment market, standing of The Enterprise, business plan, HR Policy etc.

The above sensitivity analysis are based on a change in an assumption while holding all others assumptions constant. In the event of change in more than one assumption, the impact would be different than the stated above. The methods and any types of assumptions used in preparing the sensitivity analysis did not change compared to prior period.

40 Segment Sporting

Segments ^a''e identified in line with Ind AS-108, "Operating Segment" [specified under the section 133 of the Companies Act 2013 (the Act)] read with Companies (Indian Accounting Standards ) Rule 2015 (as amended from time to time) and other relevant provision of the Act, taking into consideration the internal organisation and management structure as well as differential risk and return of the segment. Based on above, as the company is engaged in the business of manufacturing and sale of computer servers and there is other operating revenue ir» *he form of AMC and related services. Accordingly, the Company has identified "Computer server" as the only primary reportable segment. The Company does not have any geographical segment as the Company mainly operates from single geographical location, primarily within India and the volume of exports is not significant. Hence no separate disclosures are provided in these financial statements.

Non-currCjit assets by geographical area

All non current assets of the Company are located in India

Information about maior customers

There is tvvocustomer (March 31, 2022: one customer) which amounts to 10% or more to the Company''s revenue.

41 Leases a) Leases

I Company as a lessee

The Company has lease contracts for office facilities The lease term of the office facilities is generally I - 9 years The Company’s obligations under its leases are secured by the lessor’s tit leto the leased assets.

The Company also has certain leases of office facilities and office Equipments with low value or tenure less than 1 year. The Company applies the ‘lease of low-value assets’/ ‘short term lease ’recognition exemptions for these leases.

The Company has lease contracts that include extension and termination options. The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate (eg., construction of significant leasehold improvements or significant customisation to the leased asset).

(ii) Contingent liabilities

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

The following is a description of claims and assertions where a potential loss is possible, but not probable. The Company believes that none of the contingencies described below would have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

43 Capital iV^nagement

The Company’s capital management is intended to maximise the return to shareholders for meeting the long-term and short-term goals of the Company through the optimization of the debt and equity balance.

The Company determines the amount of capital required on the basis of annual and long-term operating plans and strategic investment plans. The funding requirements are met through eC^bty and long-term/short-term borrowings. The Company monitors the capital structure on the basis of Net debt to equity ratio and maturity profile of the overall debt portfolio c?bhe Company.

For the pu^se of capital management, capital includes issued equity capital, securities premium and all other reserves attributable to the equity shareholders of the Company.

Net debt i deludes all long and short-term borrowings as reduced by cash and cash equivalents.

b) Fair value hierarchy

All financial assets and liabilities for which fair value is measured in the financial statements are categorised within the fair value hierarchy, described as follows -Level I - Quoted prices in active markets

Level 2 - Inputs other than quoted prices included within Level I that are observable, either directly or indirectly Level 3 - Inputs that are not based on observable market data

There are no Assets or Liabilities which are required to be measured at FVTPL/FVTOC1 Accordingly no disclosure required for Fair value hierarchy There are no transfers between level I, level 2 and level 3 during the year

The carrying amount of financial assets and financial liabilities measured at amortized cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled

45 Financial risk management objectives and policies

The Company’s activities are exposed to a variety of financial risks from its operations The key financial risks include market risk (including foreign currency risk and interest rate risk), credit risk and liquidity risk

The Company ’s senior management oversees the management of these risks The management is responsible for formulating an appropriate financial risk governance framework tor the Company and for periodically reviewing the same The senior management ensures 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 summarized below

(1) Market risk

Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value ot a financial instrument may change as a result of changes in interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes Future specific market movements cannot be normally predicted with reasonable accuracy (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 interest rates The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company’s debt obligations with floating interest rates

c) Market risk- Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates Foreign currency sensitivity

(2) Credit risk

Credit risk 1^ the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss Financial instruments that are subject to credit risK and concentration thereof principally consist of trade receivables

Customer cr"^edit risk is managed by Company’s established policy, procedures and control relating to customer credit risk management An impairment analysis is performed at each reporting daon an individual basis for major customers The Company does not hold collateral as security Further, trade receivables contribution to approximately 75% to 93% of the customer of the Company are due for less than 180 days during each reporting period The company majorly deals with government authorities and agencies which further reduces the credit risk of the company

With respect to Trade receivables, the Company has constituted the terms to review the receivables on periodic basis and to take necessary mitigations, wherever required The Company crates allowance for all unsecured receivables based on lifetime expected credit loss based on a provision matrix The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information The expected credit loss allowance is based on the ageing of the receivables that are due and rates used in the provision matrix.

49 Other Statutory Information

(i) The Company docs not haw any Bcnanu property. where any |>roccvding has been initiated or pending against the Company for holding any Bcnaim property under the Bcnami Transactions (Prohibition) Act. 1988 and rules made thereunder

(ii) The Company did not haw any material transaction with companies struck olT under Section 248 of the Companies Act. 2013 or Section 560 of Companies Act. 1956 during the respccliw reported financial year (lii) The Company does not haw any cliargcs or satisfaction which is yet to be registered with ROC beyond the statutory period

(iv) The Company has not traded or invested in Crypto currency or Virtual Currency

⁾ Ihe Company has not advanced i*r loaned or invested funds to any other person! s) *>r entity(is). including foreign entities (Intermediaries) with the understanding Oral 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 Ihe like to or on behalf of the Ultimate Beneficiaries

(vi) Ihe Company lias not received any fund from any persons) or entity (is), 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 whatsoewr by or on behalf of the funding Party (Ultimate Beneficiaries) or

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

(Mi) The company does not haw any unrecorded transactions which haw been surrendered or disclosed as Income during the year in the tax assessment under the Income Tax Act. 1961 (viii) Ihe company is not declared wilful defaulter by any bank, financial institution or lender

(ix> During the war. no scheme of arrangements in relation to the company has been approved by the competent authority in terms of Section 232 to 237 of the Companies Acl.201.3 Accordingly, this clause is not applicable to the company

50 Code on Social Security

The Indian Parliament has approved the Code on Social Security, 2020 which may impact the employee benefit expenses of the Company Ihe elTbctiw date from which the changes are applicable is yet to be notified and the rules for quantifying the financial impact arc yet to be determined Ihe Company will give appropriate impact in the financial statements once the code becomes elVectiw and related rules to determine the financial impact are notified.

51 Production Linked Incentives

Netweb Technologies India Limited has been awarded Production Linked Incentive (I’Ll) Scheme for IT hardware (eligible product -Servers) vide approval letter no Il^;CI/Advisory/MeitY/PLmiW-221007029 dated 7th October 2022 under the PLI Scheme introduced by the Government of India vide gazetted Notification no CG-DL-E-03032021-225613 dated 03rd March 2021 and the 1*1,1 Guidelines issued thereunder, as amended from time to time Under such a scheme the company is eligible to get a certain percentage of their sales of eligible products as incentive and is valid from financial Year 2021-22 to 2024-25 The company has achieved threshold limits of both investment & sale as prescribed under the scheme for 1st Year i e f Y 21-22, and is eligible to claim incentive for the same in the f Y 22-23 In this regard, the company has filed a claim for FY 21-22, which is under approval process of the Ministry of Flectronics & Information Technology

52 Disclosure on E ^ployees Stock Options Scheme

a) ESOP Policy

Equity share-bas⁴^ payments to employees and other providing similar services are measured at the fair value of the equity instruments at the grant date Details regarding the determination of the fair value of equity-settled share-based payments transactions are out in notes to accounts

The fair value dc?^tCi™incd at the grant date of the equity-settled share based pavments is expensed on straight-line basis over the vesting period, based on the company’s estimate of equity instrument that will eventually vest, with a corresponding increase in equity At the end of each reporting period, the company rev ises its estimate of the number of equity instruments expected to vest The impact of the revision of original estimates, if am. is recognised in the Statement of Profit and Loss such that the cuiT''ulative expenses reflects the revised estimate, with a corresponding adjustment to the Share Option Outstanding Account

b) ESOP Disclosure Details of schen#^e:

The Companv ad°ptcd the ESOP Scheme "Netvveb- Employee Stock Option Plan 2023" pursuant to resolutions passed by Board of Directors of the Companv at their meeting held on December 24. 2022 and by Shareholders of the Companv at their meeting held on .January 09,2023 and as amended bv the Board of Directors of the Companv at their meeting held on February 20. 2023 and approved bv the Shareholders of the Companv at their meeting held on February 23. 2023 The Plan has been made effectfrom January 21. 2023

The Plan provides for grant of stock options, wherein one stock option would entitle the holder of the option a right to apply for one equity share of the company upon fulfilment of vesting conditions prescribed in the Plan

The stock option^ granted to each eligible employee shall vest over a period of 3 y ears with equal vesting from the grant date The eligible employees shall be entitled to exercise the vested options within the exercise period The Exercise price of the stock options graced is INR 2

The details of grants approved for employees of the Company in accordance with the Employee Stock Option Scheme

53 First tir*¹Â® adoption of Ind AS

Upto the Financial year ended March 31,2022. the Company prepared its financial statements in accordance with accounting standards notified under the Section 133 of the Act, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (“Indian GAAP" or “Previous GAAP”)

The financial statement for the period ended 31 March 2023 is the first set of Financial Statements prepared in accordance with the requirements of IND AS 101 - First time adoption oflndian Accounting Standards Accordingly, the transition date to IND AS is 01 April 2021

Ind AS Financial Statements as at and for the year ended 31 March 2022 have been prepared after making suitable adjustments to the accounting heads from their Indian GAAP values following accounting policies accounting policy choices (both mandatory exceptions and optional exemptions availed as per Ind AS 101) consistent with that used at the date of transition to Ind AS (01 April 2021) and as per the presentation, accounting policies and grouping/classifications including revised Schedule III disclosures followed as at and for the year ended 31 March 2023

The impact of above to the equity as at 31 March 2022 and I April 2021 (Opening balance sheet date) and on total comprehensive income for the year ended 31 March 2022 has been explained as under

(A) Exemptions availed on first time adoption oflnd AS

Ind AS I 01, First-time Adoption oflndian Accounting Standards, allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS The Company has accordingly applied the following exemptions

i) Deemed Cost

Since there is no change in the functional currency, the Company has elected to continue with carrying value for all of its property, plant and equipment as recognized in its Indian GAAP financial statements as its deemed cost at the date of transition after making adjustments for decommissioning liabilities This exemption can also be used for intangible assets covered by Ind AS 38, Intangible Assets and investment properties Accordingly the management has elected to measure all of its property, plant and equipment and intangible assets at their Indian GAAP carrying value

ii) Leases

Ind AS - 116 is applied with Full retrospective approach, the Company has identified leases since the inception of all lease contracts that are presented in the financial statements, and has restated the comparative years presented

The Company also applied the available practical expedients wherein it

- has used a single discount rate for leases in India to a portfolio of leases with reasonably similar characteristics

- has elected to apply short term lease exemption to leases for which the lease term ends within 12 months of the date of initial application

- has excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application

(B) Mandatory Exemption on first-time adoption of Ind AS

i) Estimates

An entity’sestimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with Indian GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error

Ind AS estimates are consistent with the estimates as at the same date made in conformity with Indian GAAP The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under Indian GAAP:

(i) Impairment of financial assets based on expected credit loss model

(ii) Fair valuation of Non-current Investments

(iii) Effective interest rate used in calculation of security deposit and retention money

ii) Derecognition of financial assets and financial liabilities

A first-time adopter should apply the derecognition requirements in Ind AS 109, Financial Instruments, prospectively to transactions occurring on or after the date of transition Therefore, if a first-time adopter derecognized non-derivative financial assets or non-derivative financial liabilities under its Indian GAAP as a result of a transaction that occurred before the date of transition, it should not recognize those financial assets and liabilities under Ind AS (unless they qualify for recognition as a result of a later transaction or event) A first-time adopter that wants to apply the derecognition requirements in Ind AS 109,Financial Instruments, retrospectively from a date of the entity''s choosing may only do so, provided that the information needed to apply Ind AS 109,Financial Instalments, to financial assets and financial liabilities derecognized as a result of past transactions was obtained at the time of initially accounting for those transactions.

The Company has elected to apply the de-recognize provisions of Ind AS 109 prospectively from the date of transition to Ind AS

ni) Classification and measurement of financial assets

Ind AS 101, First-time Adoption oflndian Accounting Standards, requires an entity to assess classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS

(C) Reconciliations

The following reconciliations provides the effect of transition to Ind AS from Indian GAAP in accordance with Ind AS 101, First-time Adoption oflndian Accounting Standards

A Prior P*?^riotl Adjustments

The Cor^Pany has made certain errors in adoption of accounting policies under Previous GAAP During the current year, on transition to IndAS. the Company has rectified these errors AI Revenue recognition for sale of goods w r t to cut-off and service revenue with respect of time proportionate booking of revenue A2 Cut-off procedures in respect of purchases A3 Measure?^ent and recording of inventory

A4 Recogni t*on and measurement of post employment defined benefits A5 Accrual and booking of certain expenses A6 Measurement of exchange (gain) / loss

A7 Effect of”temporary differences arising due to above mentioned adjustments A8 Adjustrr»^cni on account of short/excess provision for Tax

B On account of implementation of IND AS B1 Re-mei*^surenicnt of post employment benefit plans

Under the Indian GAAP, actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability was forming part of the profit or loss for the year However under Ind AS 19, it is recognised in other comprehensive income As a result of this change gains/ losses recognised in the statement of profit and loss under the Indian GAAP has been transferred to other comprehensive income upon transition B2 Lease accounting

Under the Indian GAAP, lease rentals related to operating lease were accounted as expense in the statement of profit and loss Under Ind AS, lease liability and right of use is recorded at present value of future contractual rent payment on initial date of lease Subsequently, finance cost is accrued on lease liability and lease payments are recorded by way of reduction in lease liability ROU is depreciated over lease term

B3 Expected credit loss

Under the Indian GAAP, the Company had assessed provision for impairment of receivables based on the incurred loss model and no provision was created Under Ind AS, impairment loss has been determined as per Expected credit loss (F.CL) model The provision amount as per Ind AS - ECL is recognised in retained earnings on date of transition and subsequently in the statement of profit and loss account.

B4 Impact on account of fair valuation of interest free security deposits and retention Money

Under the Indian GAAP, interest free refundable security deposits (given) and retention money were accounted at their transaction value Under Ind AS, all financial assets are required to be recognised at fair value On the date of initial recognition, in case of security deposits the difference between the transaction amount and the fair value has been recognised as ROU The security deposits and retention money have been subsequently amortised under effective interest rate method and the ROU on a straight line basis over the term of contract

B5 Current tax

Under the Indian GAAP financial statements, the company had identified errors in accounting of earlier year tax adjustments and had accounted as prior period items in the year in which the errors were identified Under IND AS, the errors are to be adjusted in the year in which the error has been done or in the first period presented Accordingly, the company has adjusted the errors in respective financial years in which accounting error were identified

B6 Deferred tax

Deferred tax adjustments has been made in accordance w ith Ind AS, under balance sheet approach for all the items which have differential book base from that of tax base and which temporarily gets reversed due to timing difference including adjustments arising from Ind AS transition

Under the Indian GAAP, the Company had not recognised deferred tax assets The Company has evaluated the carrying amount of deferred tax and it has envisaged that it will earn sufficient taxable profit Ijj that will be available to allow all of the deferred tax asset to be utilized

Accordingly deferred tax assets has been recognised in the restated financial information B7 Other comprehensive income

Under Ind AS, all items of income and expense recognised in a period should be included in profit and loss for the period, unless a standard requires or permits otherwise Items of income and expense that are not recognised in profit and loss but in other comprehensive income under "Statements of Profit and Loss (including other comprehensive income)" includes re-measurements of defined benefit plans and their corresponding income tax effects The concept of other comprehensive income did not exist under Previous GAAP B8 The transition from the Previous GAAP to Ind AS did not have material impact on the statement of cash flow, except for payment of lease liabilities, which were forming part of operating activity under Previous GAAP and are now included under financing activity

B9 Appropriate adjustments have been made in the Balance Sheet, Statement of Profits and Loss and Statement of Cash Flows, wherever required, by a reclassification of the corresponding items of income, expenses, assets, liabilities and cash flows in order to bring them in line with the groupings as per the audited Ind AS financial statements of the Company prepared in accordance with Schedule III of Companies Act 2013

1

Previous year figures of number of shares hare been recaste,/due lo split of shares. Further, current year figures of number of shares are pursuant to impact of split of shares from face value ofRs. 10 to Rs 2 per share and issue of bonus shares.