Notes to Accounts of Clean Science & Technology Ltd.

Mar 31, 2025

A provision is recognised when the Company has
a present obligation (legal or constructive) as a
result of a 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. Provisions are measured at the best
estimate of the expenditure required to settle the
present obligation at the balance sheet date. The
provisions are measured on an undiscounted
basis.

that an outflow of resources will be required to
settle the obligation. A contingent liability also
arises in extremely rare cases where there is a
liability that cannot be recognised because it
cannot be measured reliably. The Company does
not recognise a contingent liability but discloses
its existence in the standalone financial
statements.

Contingent asset is not recognised in the
Standalone financial statements. A contingent
asset is disclosed, where an inflow of economic
benefits is probable.

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

2A.8 Leases

At inception of a contract, the Company
assesses whether a contract is, or contains, a
lease. A contract is, or contains, a lease if the
contract conveys the right to control the use of an
identified asset for a period of time in exchange
for consideration.

Company as a lessee

The Company has leased warehouse and land.
Rental contracts are typically made for fixed
periods of 20 years to 99 years but may have
extension options.

The Company recognises a right-of-use asset
and a lease liability at the lease commencement
date. The right- of-use asset is initially measured
at cost, which comprises the initial amount of the
lease liability adjusted for any lease payments
made at or before the commencement date, plus
any initial direct costs incurred and an estimate
of costs to dismantle and remove the underlying
asset or to restore the underlying asset or the site
on which it is located, less any lease incentives
received.

The right-of-use asset is subsequently
depreciated using the straight-line method from
the commencement date to the earlier of the
end of the useful life of the right-of-use asset
or the end of the lease term. The estimated
useful lives of right-of-use assets are determined
on the same basis as those of property and
equipment. In addition, the right-of-use asset is
periodically reduced by impairment losses, if any,
and adjusted for certain remeasurements of the
lease liability.

The lease liability is initially measured at the
present value of the lease payments that are not
paid at the commencement date, discounted
using the interest rate implicit in the lease
or, if that rate cannot be readily determined,
the Company''s incremental borrowing rate.
Generally, the Company uses its incremental
borrowing rate as the discount rate.

Lease payments included in the measurement of
the lease liability comprise the following:

- fixed payments, including in-substance
fixed payments.

- variable lease payments that depend on
an index or a rate, initially measured using
the index or rate as at the commencement
date.

- amounts expected to be payable under a
residual value guarantee; and

- the exercise price under a purchase option
that the Company is reasonably certain to
exercise, lease payments in an optional
renewal period if the Company is reasonably
certain to exercise an extension option, and
penalties for early termination of a lease
unless the Company is reasonably certain
not to terminate early.

The lease liability is measured at amortised
cost using the effective interest method.
It is remeasured when there is a change in
future lease payments arising from a change
in an index or rate, if there is a change in the
Company''s estimate of the amount expected
to be payable under a residual value guarantee,
or if the Company changes its assessment of
whether it will exercise a purchase, extension or
termination option.

When the lease liability is remeasured in this
way, a corresponding adjustment is made to the
carrying amount of the right-of-use asset or is
recorded in profit or loss if the carrying amount
of the right-of-use asset has been reduced to
zero.

Leasehold land is amortised over the period of
lease.

Short-term leases and leases of low-value
assets

The Company has elected not to recognise
right-of-use assets and lease liabilities for
short-term leases that have a lease term of 12
months or less and leases of low-value assets.
The Company recognises the lease payments
associated with these leases as an expense on
a straight-line basis over the lease term.

2A.9 Foreign currency transactions

Transactions in foreign currencies are translated
into the respective functional currency of the
Company at the exchange rates at the dates of
the transactions.

Monetary assets and liabilities denominated
in foreign currencies are translated into the
functional currency at the exchange rate at
the reporting date. Non-monetary assets and
liabilities that are measured at fair value in a
foreign currency are translated into the functional
currency at the exchange rate when the fair value
was determined. Non-monetary items that are
measured based on historical cost in a foreign
currency are translated at the exchange rate at
the date of the transaction. Foreign currency
differences are generally recognised in the
Statement of Profit and Loss.

2A.10 Segment reporting

As per Ind AS 108 Operating Segments, when
a financial report contains both consolidated
financial statements and separate financial
statements for the parent, segment information
needs to be presented only in case of
consolidated financial statements. Accordingly,
segment information has been provided only in
the consolidated financial statements.

2A.11 Government Grants:

Government Grants and subsidies from the
government are recognised when there is
reasonable assurance that the Company will
comply with the conditions attached to them and
the grant/subsidy will be received.

When the grant or subsidy relates to revenue, it is
recognised as income on a systematic basis in
the Statement of Profit and Loss over the periods
necessary to match them with the related costs,
which they are intended to compensate.

Cash and cash equivalents in the Balance Sheet
comprise cash in hand and demand deposits
with banks. All demand deposits, which are
readily convertible to known amounts of cash,
and which are subject to an insignificant risk of
changes in value.

2A.13 Trade and other payables

These amounts represent liabilities for goods
and services provided to the Company prior to the
end of financial year which are unpaid. Trade and
other payables (including retention and LD) are
unsecured and are presented as current liabilities
unless payment is not due within operating cycle
determined by the Company after the reporting
period. They are recognised initially at their fair
value and subsequently measured at amortised
cost using the effective interest method.

2A.14 Rounding of amounts:

All amounts disclosed in the standalone financial
statements and notes have been rounded off to
the nearest million as per the requirement of
Schedule III, unless otherwise stated.

2A.15 Dividends

Provision is made for the amount of any dividend
declared, being appropriately authorised and no
longer at the discretion of the entity, on or before
the end of the reporting period but not distributed
at the end of the reporting period.

2B. | USE OF JUDGEMENTS ESTIMATES AND
ASSUMPTIONS

The preparation of standalone financial statements
requires the use of accounting estimates which,
by definition, will seldom equal the actual results.
Management also needs to exercise judgement in
applying the Company''s accounting policies. This
note provides an overview of the areas that involved
a higher degree of judgement or complexity, and of
items which are more likely to be materially adjusted
due to estimates and assumptions turning out to
be different than those originally assessed. The
Company based its assumptions and estimates on
parameters available when the standalone financial
statements were prepared. Existing circumstances
and assumptions about future developments,
however, may change due to market changes or
circumstances arising that are beyond the control

of the Company. The management believes that the
estimates are the most likely outcome of the future
events. Detailed information of these judgements and
estimates are described below:

I. Legal Contingencies

The Company has received various orders and
notices from tax authorities in respect of direct
taxes and indirect taxes. The outcome of these
matters may have a material effect on the
financial position, results of operations or cash
flows. Management regularly analyzes current
information about these matters and provides
provisions for probable contingent losses
including the estimate of legal expense to resolve
the matters. In making the decision regarding the
need for loss provisions, management considers
the degree of probability of an unfavorable
outcome and the ability to make a sufficiently
reliable estimate of the amount of loss. The filing
of a suit or formal assertion of a claim against
the Company or the disclosure of any such suit
or assertions, does not automatically indicate
that a provision of a loss may be appropriate.

II. Defined benefit plans

The cost of the defined benefit plan and other
post-employment benefits and the present
value of such obligation are determined using
actuarial valuations. An actuarial valuation
involves making various assumptions that may
differ from actual developments in the future.
These include the determination of the discount
rate, future salary increases and mortality rates.
Due to the complexities involved in the valuation
and its long-term nature, a defined benefit
obligation is highly sensitive to changes in these
assumptions. All assumptions are reviewed at
each reporting date.

Further details about employee benefit
obligations are given in Note 40.

III. Impairment of trade receivables

The impairment assessment of trade receivable
are based on assumptions about risk of default,
expected loss rates and timing of cash flows.
The Company uses judgement in making these
assumptions and selecting the inputs to the
impairment calculation, based on the Company''s
past history as well as forward looking estimates
at the end of each reporting period. The Company

uses the simplified approach as prescribed by
IND AS 109 ''Financial Instruments'' to calculate
the expected lifetime credit loss for receivable
and contract assets.

The ECL model involves use of provision matrix
based on historical credit loss experience and
adjusted for forward looking information. Refer
note 37 for various judgements and estimates
used to create provision for impairment.

IV. Estimation of useful life

The useful life used to amortise or depreciate
intangible assets or property, plant and
equipment respectively relates to the expected
future performance of the assets acquired and
management''s judgement over which economic
benefit will be derived from the asset. 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. Increasing an asset''s
expected life or its residual value would result in
a reduced depreciation charge in the statement
of profit and loss.

The useful lives and residual values of Company''s
assets are determined by management at the
time the asset is acquired and reviewed annually
for appropriateness. The lives are based on
historical experience with similar assets as
well as anticipation of future events which may
impact their life such as changes in technology.
For the relative size of the Company''s property,
plant and equipment and intangible assets refer
note 3 and 6 respectively.

V. Inventory

Significant management judgement is required
to determine the amount of net realisable value
of the inventories for the purpose of valuation of
inventories. Estimates of net realisable value are
based on the most reliable evidence available at
the time the estimates are made as to the amount
the inventories are expected to realise. These
estimates take into consideration fluctuations of
price or cost directly relating to events occurring
after the balance sheet date to the extent that
such events confirm the conditions existing
at the balance sheet date. Estimates of net
realisable value also take into consideration the
purpose for which the inventory is held.

C. Disclosure for transaction price allocated to the remaining performance obligations

There is no remaining performance obligation for any contract for which revenue has been recognised till period end.
Further, in accordance with paragraph 121 of Ind AS 115, the Company is not required to disclose information about its
remaining performance obligation since the Company does not have any performance obligation that has an original
expected duration of more than one year.

D. Determining the timing of satisfaction of performance obligations

There is no significant judgement involved in ascertaining the timing of satisfaction of performance obligations, in
evaluating when a customer obtains control of promised goods, transaction price and allocation of it to the performance
obligations.

E. Determining the transaction price and the amounts allocated to performance obligations

The transaction price ascertained for the single performance obligation of the Company (i.e. Sale of goods) is agreed in
the contract with the customer.

F. Details of contract assets:

There are no contract assets as at 31st March, 2025 and 31st March, 2024.

G. Information about major customer (external customers):

The following is the transactions by the Company with external customers individually contributing 10 per cent or more
of revenue from operations:

(i) For the year ended 31st March, 2025, revenue from operations of one customer of the Company represented
approximately '' 976.22 million (10.77%).

(ii) For the year ended 31st March, 2024, revenue from operations of one customer of the Company represented
approximately '' 890.61 million (11.45%).

34 | CONTINGENT LIABILITIES AND COMMITMENTS:

(a) Contingent liabilities

i) The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the
company towards Provident Fund and Gratuity. The Ministry of Labour and Employment had released draft rules for
the Code on Social Security, 2020 on 13th November, 2020. The Company will assess the impact and its evaluation
once the subject rules are notified. The Company will give appropriate impact in its financial statements in the
period in which, the Code becomes effective and the related rules to determine the financial impact are published.

37 | FINANCIAL RISK MANAGEMENT

The Company''s Board of Directors have an overall responsibility for the establishment and oversight of the Company''s risk
management framework. The Company''s risk management policies are established to identify and analyze the risks faced
by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management
policies and systems are reviewed regularly to reflect changes in market conditions.

The Company has exposure to the following risks arising from financial instruments:

- credit risk - see note (a) below

- liquidity risk - see note (b) below

- market risk - see note (c) below

(a) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet
its contractual obligations, and arises principally from the Company''s receivables from customers.

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However,
management also considers the factors that may influence the credit risk of its customer base, including the default risk
associated with the industry and country in which customers operate.

Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness
of customers to which the Company grants credit terms in the normal course of business. On account of adoption of Ind
AS 109, the Company uses expected credit loss model to assess impairment loss or gain. The Company uses a matrix
to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account available
external and internal credit risk factors and Company''s historical experience for customers.

(i) The Company has made provision on expected credit loss on trade receivables, based on the management
estimates and provision martix. Trade receivables are subject to low credit risk. Since, the overall provision required
is immaterial, the provision matrix has not been disclosed in the financial statement.

(ii) Credit risk on cash and cash equivalents is limited as the Company generally invests in deposits with banks and
financial institutions with high credit ratings assigned by domestic credit rating agencies.

(iii) Other financial assets are subject to low credit risk

(b) Liquidity risk

The Company''s treasury department is responsible for liquidity and funding. In addition policies and procedures relating
to such risks are overseen by the management.

The Company''s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from
operations.

(c) Market risk

Market risk is the risk that changes with market prices - such as foreign exchange rates and interest rates, which
will affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

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. The Company manages its interest rates by
selecting appropriate type of borrowings and by negotiation with the bankers.

38 | CAPITAL MANAGEMENT

a) Risk management

The Company''s capital comprises equity share capital, surplus in the statement of profit and loss and other equity
attributable to equity holders.

The Company''s objectives when managing capital are to :

- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders
and benefits for other stakeholders, and

- maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust to cost of capital structure, the Company may adjust the amount of dividends paid to the
shareholders, return capital to shareholders, issue new equity shares or sell assets to reduce debt.

b) Dividends

As a part of Company''s capital management policy, dividend distribuon is also considered as a key element and
management ensures that dividend distribuon is in accordance with defined policy. Below mentioned are the details of
dividend distributed and proposed during the year.

(b) Fair value hierarchy:

This section explains the judgements and estimates made in determining the fair values of the financial instruments that
are recognised and measured at fair value. To provide an indication about the reliability of the inputs used in determining
fair value, the Company has classified its financial instruments into the three levels prescribed under the Ind AS. An
explanation of each level follows underneath the table.

Level 1 - The fair value of financial instruments traded in active markets is based on quoted market prices at the end of
the reporting period. The mutual funds are valued using the closing NAV. These instruments are included in level 1.
Level 2 - The fair value of financial instruments that are not traded in an active market is determined using valuation
techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates.
If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

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

There have been no transfers between levels 1, 2 and 3 during the year.

(c) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the use of quoted market prices for same or similar instruments as on the reporting date.

- for foreign currency forward - the present value of future cash flows based on the forward exchange rates as at the
balance sheet date.

- for other financial instruments - discounted cash flow analysis.

(d) Valuation process

The finance department of the Company includes a team that oversees the valuation of financial assets and liabilities
required for financial reporting purposes, including level 3 fair values. This team reports directly to the chief financial
officer (CFO) and the audit committee (AC).

(e) Fair value of financial assets and liabilities measured at amortised cost

The Company has not disclosed the fair value of financial instruments such as trade receivables, cash and cash
equivalent, bank balance other than cash and cash equivalent, trade payables because their carrying amounts are a
reasonable approximation of fair value.

The value of long term security deposits is determined using the present value of future cashflows based on average
interest rates at the balance sheet date. The impact of the same is however not material.

40 | EMPLOYEE BENEFIT OBLIGATIONS

A. Defined Contribution Plans

The Company makes contributions, determined as a specific percentage of employee''s basic salaries, in respect
of qualifying employees towards Provident Fund as per the regulations, which is a defined contribution plan. The
contributions are made to registered provident fund administered by the Government. The obligation of the Company is
limited to the amount contributed and it has no further contractual nor any constructive obligation. The contributions are
charged to the Statement of Profit and Loss as they accrue.

The Company also contributes to National Pension System (NPS) Trust in India for employees at the rate of 10% of
basic salary, as per the option opted by the various employees. The obligation of the Company is limited to the amount
contributed and it has no further contractual nor any constructive obligation.

The amount recognised as an expense towards contribution to provident fund and other funds for the year aggregated
to '' 12.83 million (31st March, 2024 : '' 12.45 million). The breakup is as follows :

B. Defined Benefit Plans - Gratuity

The Company has defined benefit gratuity plan. The gratuity plan is governed by the Payment of Gratuity Act, 1972. The
Company has formed "Trustees Clean Science And Technology PL EGGCLAS" to manage the gratuity obligations. The
money contributed by the Company to fund the liabilities of the plan has to be invested. The trustees of the plan have
outsourced the investment management of the fund to an insurance company - Life Insurance Corporation of India.
Every permanent employee is entitled to a benefit equivalent to 15 days of the last drawn salary for each completed year
of service in line with the Payment of Gratuity Act, 1972. The same is payable at the time of separation from the Company
or retirement, whichever is earlier. The benefits vest after five years of continuous service.

The above sensitivity analysis is based on a change in assumption while holding all other assumptions constant. In
practice, this is unlikely to occur and changes in some of the assumptions may be correlated. When calculating the
sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of
defined benefit obligation calculated with the Projected Unit Credit Method at the end of the reporting period) has
been applied as when calculating the defined benefit liability recognised in the balance sheet.

The method and types of assumptions used in preparing the sensitivity analysis did not change compared to the
prior period.

C. Compensated absences

The Compensated absences cover the Company''s liability for privilege leaves.

The entire amount of the provision of '' 10.88 million (31st March, 2024 - '' 8.88 million) is presented as current, since
the Company does not have an unconditional right to defer settlement for any of these obligations. However, based
on past experience, the Company does not expect all employees to avail the full amount of accrued leave or require
payment for such leave within the next 12 months.

Basis of estimates

The estimate of future salary increase considered takes into accounts the inflation, seniority, promotion and other
factors.

Discount rate is based on prevailing market yields of Indian Government securities as at year end for the estimated term
of the obligation.

The assumptions on mortality rates is based on the most recently published mortality tables available on Indian lives i.e.,
Indian Assured Lives Mortality (2012-14).

Assumption about Annual increase in health care costs takes into account estimated future changes in the cost of
medical services, resulting from both inflation and specific changes in medical costs.

Risk Exposure

Through its defined benefit plan, the Company is exposed to a number of risks, the most significant of which are detailed
below:

Asset Volatility : All plan assets for gratuity are maintained in a trust managed by a public sector insurer viz. LIC of India.
LIC has a sovereign guarantee and has been providing consistent and competitive returns over the years. The Company
has opted for a traditional fund wherein all assets are invested primarily in risk averse markets. The Company has no
control over the management of funds but this option provides a high level of safety for the total corpus. A single account
is maintained for both the investment and claim settlement and hence 100% liquidity is ensured. Also interest rate and
inflation risk are taken care of.

Changes in bond yields : A decrease in bond yields will increase plan liabilities, although this will be partially offset by an
increase in the value of plans'' bond holdings

Life expectancy: The present value of the defined benefit plan liabilities are calculated by reference to the best estimates
of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan
participants will increase the plan''s liability.

Future salary increase and inflation risk: Since price inflation and salary growth are linked economically, they are
combined for disclosure purposes. Rising salaries will often result in higher future defined benefit payments resulting
in a higher present value of liabilities especially unexpected salary increases provided at management''s discretion may
lead to uncertainties in estimating this increasing risk.

Asset-Liability mismatch risk: Risk arises if there is a mismatch in the duration of the assets relative to the liabilities.
By matching duration with the defined benefit liabilities, the Company is successfully able to neutralise valuation swings
caused by interest rate movements. The Company ensures that the investment positions are managed within an asset-
liability matching (ALM) framework that has been developed to achieve long-term investments that are in line with the
obligations under the employee benefit plans.

41 | EMPLOYEE SHARE BASED-PAYMENTS

The Company has formulated employee share-based payment schemes with objective to attract and retain talent and
align the interest of employees with the Company as well as to motivate them to contribute to its growth and profitability.
The Company views employee stock options as instruments that would enable the employees to share the value they
create for the Company in the years to come.

At present, following employee share-based payment scheme is in operation, details of which are given below:

Clean Science and Technology Limited Employee Stock Option Scheme - 2021 (CSTL ESOS - 2021):

A) Increase the aggregate number of Employee Stock Options as originally approved from 1,00,000 options to 3,50,000
options;

B) Grant of Options to the Eligible Employees of Subsidiary Company(ies) of the Company under CSTL ESOS 2021.

As per CSTL ESOS-2021, Nomination and Remuneration Committee evaluates the performance and other criteria of
employees and approves the grant of options. These options vest with eligible employees over a specified period subject
to fulfilment of certain conditions. Under the said plan, the Nomination and Remuneration Committee has granted 55,852
and 33,879 and 16,971 equity-settled stock options on 12th June, 2021 and 5th September, 2022 and 2nd November,
2023 to eligible employees of the Company and its Subsidiary Company. The vesting period is minimum one year from
the date of grant and maximum 4 years.

45 | ADDITIONAL REGULATORY INFORMATION REQUIRED BY SCHEDULE III

a) Details of benami property held

No proceedings have been initiated on or are pending against the Company for holding benami property under the
Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

b) Relationship with struck off companies

The Company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.

c) Wilful defaulter

The Company has not been declared willful defaulter by any bank or financial institution or government or any government
authority.

d) Compliance with number of layers of companies

The Company has complied with the number of layers prescribed under companies Act, 2013 read with the companies
(Restriction of number of layers) Rules, 2017.

e) Compliance with approved scheme of arrangements

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

f) Registration of charges or satisfaction with Registrar of Companies

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

g) Details of crypto currency or virtual currency

The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

h) Utilisation of borrowed funds and share premium

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

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

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

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

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

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

i) Undisclosed income

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under
the Income Tax Act, 1961, that has not been recorded in the books of account.

j) Valuation of property, plant and equipment, intangible asset and investment property

The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or
both during the current or previous year.

l) Borrowing secured against current assets

The Company does not has borrowings from banks and financial instutions on the basis of security of current assets.

m) Utilisation of borrowings availed from banks and financial institution

The Company does not have any borrowings from banks and financial institutions.

For Price Waterhouse Chartered Accountants LLP For and on behalf of the Board of Directors of
Firm Registration No. 012754N/N500016 Clean Science and Technology Limited

Amit Borkar Ashok Boob Krishnakumar Boob

Partner Managing Director Director

Membership No: 109846 DIN : 0410740 DIN : 0410672

Place: Pune Sanjay Parnerkar Ruchita Vij

Date: 22nd May, 2025 Chief Financial Officer Company Secretary

M. No.9210

Place : Pune Place : Pune

Date: 22nd May, 2025 Date: 22nd May, 2025

Mar 31, 2024

2.12 Provision and contingent liabilities / assets:

A provision is recognised when the Company has a present obligation (legal or constructive) as a result of a 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. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the balance sheet date. The provisions are measured on an undiscounted basis.

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.

Contingent asset is not recognised in the Standalone financial statements. A contingent asset is disclosed, where an inflow of economic benefits is probable.

2.13 Leases

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Company as a lessee

The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right- of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Companyâs incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

- fixed payments, including in-substance fixed payments.

- variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date.

- amounts expected to be payable under a residual value guarantee; and

- the exercise price under a purchase option that the Company is reasonably certain to exercise, lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Company is reasonably certain not to terminate early.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Companyâs estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or termination option.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

Leasehold land is amortised over the period of lease.

Short-term leases and leases of low-value assets

The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets. The Company recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

2.14 Fair value measurement

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:

- In the principal market for the asset or liability, or

- In the absence of a principal market, in the most advantageous market for the asset or l iabi li ty.

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

value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-fnancial asset considers 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.

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.

â¢ Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities.

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

â¢ Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

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

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

2.15 Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currency of the

Company at the exchange rates at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Foreign currency differences are generally recognised in the Statement of Profit and Loss.

2.16 Financial instruments

2.16.1 Financial assets

Initial recognition and measurement

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. All financial assets are recognised initially at fair value plus except for trade receivables which are initially measured at transaction price, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in one of the three categories:

a) At amortised cost

b) At fair value through Other Comprehensive Income (''FVTOCI'')

c) At fair value through profit or loss (''FVTPL'')

(a) Financial assets classified as measured at amortised cost

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

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

- the contractual terms of the financial asset give rise on specified dates to

cash flows that are solely payments of principal and interest on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (''EIR'') method, less impairment charge. Amortised cost is calculated by considering any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance expense/ (income) in the Statement of Profit and Loss. The losses arising from impairment are recognised in the Statement of Profit and Loss. This category generally applies to trade receivables, security and other deposits receivable by the Company.

Interest income or expense is recognised using the effective interest rate method. The ''effective interest rate'' is the rate that exactly discounts estimated future cash receipts or payments through the expected life of the financial instrument to:

- the gross carrying amount of the financial asset; or

- the amortised cost of the financial liability.

(b) Financial assets classified as measured at FVOCI

A financial asset is measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Further, the Company makes such election on an instrument-by-instrument basis, for its investments which are classified as equity instruments, the subsequent changes in fair value are recognised in other comprehensive income. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses and interest revenue which are recognised in other comprehensive income. When the financial

asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other gains/ (losses). Interest income from these financial assets is included in other income using the effective interest rate method.

(c) Financial assets classified as measured at FVTPL

Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit or loss. A gain or loss on a mutual fund investment that is subsequently measured at fair value through profit or loss is recognised in profit or loss and presented net in the Statement of Profit and Loss within other gains/(losses) in the period in which it arises.

Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.

Dividends are recognised in the Statement of Profit and Loss only when the right to receive payment is established, and it is probable that the economic benefits associated with the dividend will flow to the Company and that the amount of the dividend can be measured reliably.

De-recognition of financial asset

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

If the Company enters into transactions whereby it transfers assets recognised on its Balance Sheet but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised.

Impairment of financial assets

The Company applies the expected credit loss model for recognising impairment loss on financial assets.

Expected credit loss is the difference between the contractual cash flows and the cash flows that the entity expects to receive discounted using effective interest rate.

Loss allowances for trade receivables are measured at an amount equal to lifetime expected credit losses.

Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument. Lifetime expected credit loss is computed based on a provision matrix which takes into account historical credit loss experience adjusted for forward looking information.

For other financial assets, expected credit loss is measured at the amount equal to twelve months expected credit loss unless there has been a significant increase in credit risk from initial recognition, in which case, those are measured at lifetime expected credit loss.

Trade receivables are written off when there is no reasonable expectation of recovery.

2.16.2 Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable and incremental transaction cost. The Companyâs financial liabilities include trade and other payables, loans and borrowings and derivative financial instruments.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an

integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit and Loss.

The Companyâs financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts.

(a) Financial liabilities at FVTPL

Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated as such upon initial recognition. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109.

Gains or losses on liabilities held for trading are recognised in the Statement of Profit and Loss.

Financial liabilities designated as such upon initial recognition at the initial date of recognition if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risks are recognised in OCI. These gains/ losses are not subsequently transferred to the Statement of Profit and Loss. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the Statement of Profit and Loss.

(b) Financial liabilities at amortised cost

The Company generally classifies interest bearing borrowings as financial liabilities carried at amortised cost. After initial recognition, these instruments are subsequently measured at amortised cost using the effective interest rate (EIR) method. Gains and losses are recognised in the Statement of Profit and Loss when the liabilities are derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on

acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit and Loss.

De-recognition of financial liability

A financial liability (or a part of a financial liability) is derecognised from the Balance Sheet when, and only when, it is extinguished i.e., when the obligation specified in the contract is discharged or cancelled or expired.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

Derivative financial instruments

The Company enters into certain derivative contracts to hedge risks which are not designated as hedges. The Company holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures. Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met.

Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognised in the Statement of Profit and Loss.

2.17 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.

The Managing Director of the Company has been identified as being the Chief operating decision maker by the management of the Company.

2.18 Government Grants:

Government Grants and subsidies from the government are recognised when there is reasonable assurance that the Company will comply with the conditions attached to them and the grant/subsidy will be received.

When the grant or subsidy relates to revenue, it is recognised as income on a systematic basis in the Statement of Profit and Loss over the periods necessary to match them with the related costs, which they are intended to compensate.

Export Incentives

Export incentives under various schemes notified by the government are recognised when no significant uncertainties as to the amount of consideration that would be derived and that the Company will comply with the conditions associated with the grant and ultimate collection exist.

2.19 Cash and cash equivalents:

Cash and cash equivalents in the Balance Sheet comprise cash at banks and on hand and shortterm deposits with an original maturity of not more than three months, which are subject to an insignificant risk of changes in value.

2.20 Cash flow statement:

Cash Flows are reported using the indirect method, whereby net Profit before tax is adjusted for the effects of transactions of a non-cash nature, such as deferrals or accruals of past or future operating cash receipts or payments and items of income or expenses associated with investing or financing cash flows. In the statements of cash flows, cash and cash equivalents consist of cash and shortterm deposits, as defined above net of outstanding bank overdrafts as they are considered as integral part of the Companyâs cash management.

2.21 Adoption of new accounting principle:

Deferred tax related to assets and liabilities arising from a single transaction (amendments to Ind AS 12 -Income Taxes). The amendments clarified that lease transactions give rise to equal and offsetting temporary differences and financial statements should reflect the future tax impacts of these transactions through recognising deferred tax. The Company has adopted this amendment effective 1st April, 2023. The Company previously accounted for deferred tax on leases on a net basis. Following the amendments, the Company has recognised a

separate deferred tax asset in relation to its lease liabilities and a deferred tax liability in relation to its right-to-use assets.

2.22 Recent Indian Accounting Standards (Ind AS) and Pronouncements

Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended 31st March, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

| CONTINGENT LIABILITIES AND COMMITMENTS:

(a) Contingent liabilities

i) The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment had released draft rules for the Code on Social Security, 2020 on 13th November, 2020. The Company will assess the impact and its evaluation once the subject rules are notified. The Company will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

The Companyâs Board of Directors have an overall responsibility for the establishment and oversight of the Companyâs risk management framework. The Companyâs risk management policies are established to identify and Analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions.

The Company has exposure to the following risks arising from financial instruments:

- credit risk - see note (a) below

- liquidity risk - see note (b) below

- market risk - see note (c) below

(a) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers.

The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk associated with the industry and country in which customers operate.

Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess impairment loss or gain. The Company uses a matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account available external and internal credit risk factors and Companyâs historical experience for customers.

(i) The Company has made provision on expected credit loss on trade receivables and other financial assets, based on the management estimates.

(ii) Credit risk on cash and cash equivalents is limited as the Company generally invests in deposits with banks and financial institutions with high credit ratings assigned by domestic credit rating agencies.

(b) Liquidity risk

The Companyâs treasury department is responsible for liquidity and funding. In addition policies and procedures relating to such risks are overseen by the management.

The Companyâs principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations.

The Companyâs capital comprises equity share capital, surplus in the statement of profit and loss and other equity attributable to equity holders.

The Companyâs objectives when managing capital are to :

- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

- maintain an optimal capital structure to reduce the cost of capital.

| POST-EMPLOYMENT BENEFIT PLANS

As per Indian Accounting Standard 19" Employee Benefits", the disclosures as defined are given below-A. Defined Contribution Plans

The Company makes contributions, determined as a specific percentage of employee salaries, in respect of qualifying employees towards Provident Fund, which is a defined contribution plan. The Company has no obligation other than to make the specified contributions. The contributions are charged to the Statement of Profit and Loss as they accrue. The amount recognised as an expense towards contribution to Provident fund and other funds for the period aggregated to '' 12.45 million (31st March, 2023 : '' 10.25 million).

B. Defined Benefit Plans Gratuity

The Company has defined benefit gratuity plan. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the memberâs length of service and salary at retirement age. These benefits are funded with an insurance company.

Risk exposure and asset liability matching

Provision of a defined benefit scheme poses certain risks, some of which are detailed hereunder, as companies take on uncertain long term obligations to make future benefit payments.

7) Liability Risks

a. Asset Liability Mismatch risk

Risk which arises if there is a mismatch in the duration of the assets relative to the liabilities. By matching duration with the defined benefit liabilities, the company is successfully able to neutralise valuation swings caused by interest rate movements. Hence companies are encouraged to adopt asset-liability management.

b. Discount Rate Risk

Variations in the discount rate used to compute the present value of the liabilities may seem small, but in practise can have a significant impact on the defined benefit liabilities.

c. Future Salary Escalation and Inflation Risk

Since price inflation and salary growth are linked economically, they are combined for disclosure purposes. Rising salaries will often result in higher future defined benefit payments resulting in a higher present value of liabilities especially unexpected salary increases provided at managementâs discretion may lead to uncertainties in estimating this increasing risk.

2) Asset Risks

All plan assets are maintained in a trust fund managed by a public sector insurer viz; LIC of India. LIC has a sovereign guarantee and has been providing consistent and competitive returns over the years. The company has opted for a traditional fund wherein all assets are invested primarily in risk averse markets. The company has no control over the management of funds but this option provides a high level of safety for the total corpus. A single account is maintained for both the investment and claim settlement and hence 100% liquidity is ensured. Also interest rate and inflation risk are taken care of.

| EMPLOYEE SHARE BASED-PAYMENTS

The Company has formulated employee share-based payment schemes with objective to attract and retain talent and align the interest of employees with the Company as well as to motivate them to contribute to its growth and profitability. The Company views employee stock options as instruments that would enable the employees to share the value they create for the Company in the years to come.

At present, following employee share-based payment scheme is in operation, details of which are given below:

a Clean Science and Technology Limited Employee Stock Option Scheme - 2021 (CSTL ESOS - 2021):

A) Increase the aggregate number of Employee Stock Options as originally approved from 1,00,000 options to 3,50,000 options;

B) Grant of Options to the Eligible Employees of Subsidiary Company(ies) of the Company under CSTL ESOS 2021.

As per CSTL ESOS-2021, Nomination and Remuneration Committee evaluates the performance and other criteria of employees and approves the grant of options. These options vest with eligible employees over a specified period subject to fulfilment of certain conditions. Under the said plan, the Nomination and Remuneration Committee has granted 55,852 and 33,879 and 16,971 equity-settled stock options on 12th June, 2021 and 5th September, 2022 and 2nd November, 2023 to eligible employees of the Company. The vesting period is minimum one year from the date of grant and maximum 4 years.

D. Determining the timing of satisfaction of performance obligations

There is no significant judgement involved in ascertaining the timing of satisfaction of performance obligations, in evaluating when a customer obtains control of promised goods, transaction price and allocation of it to the performance obligations.

E. Determining the transaction price and the amounts allocated to performance obligations

The transaction price ascertained for the single performance obligation of the Company (i.e. Sale of goods) is agreed in the contract with the customer. There is no variable consideration involved in the transaction price.

F. Details of contract assets:

There are no contract assets as at 31st March, 2024 and 31st March, 2023. Refer note 11 for information on trade receivables.

G. Information about major customer (external customers):

The following is the transactions by the Group with external customers individually contributing 10 per cent or more of revenue from operations:

(i) For the year ended 31st March, 2024, revenue from operations of one customer of the Company represented approximately 11.45% of revenue from operations.

(ii) For the year ended 31st March, 2023, revenue from operations of one customer of the Company represented approximately 11.33% of revenue from operations.

| OPERATING SEGMENT

As per Ind AS 108 Operating Segments, when a financial report contains both consolidated financial statements and separate financial statements for the parent, segment information needs to be presented only in case of consolidated financial statements. Accordingly, segment information has been provided only in the consolidated financial statements.

| OTHER STATUTORY INFORMATION

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

b) The Company do not have any transactions with companies struck off.

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

d) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

e) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign

entities (Intermediaries) with the understanding that the Intermediary shall:

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

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

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

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

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

g) The Company have no such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

| EVENTS OCCURRING AFTER BALANCE SHEET DATE

In Board Meeting held on 15th May, 2024 Board of Director have recommended, subject to the approval of shareholders, dividend of '' 3/- per equity share of face value of '' 1/- each for the year ended 31st March, 2024 on 10,62,52,004 equity shares amounting to '' 318.76 million.

For B S R & Co. LLP For and on behalf of the Board of Directors of

Chartered Accountants Clean Science and Technology Limited

Firm Registration No. 101248W/W-100022

Rahim Merchant Ashok Boob Krishnakumar Boob

Partner Managing Director Director

Membership No: 132907 DIN : 0410740 DIN : 0410672

Place: Pune Sanjay Parnerkar Mahesh Kulkarni

Date: 15th May, 2024 Chief Financial Officer Company Secretary

M. No: 19364

Place : Pune Place : Pune

Date: 15th May, 2024 Date: 15th May, 2024

Mar 31, 2023

Terms / Rights attached to each classes of shares Rights, preferences and restrictions attached to equity shares

The Company has a single class of equity shares having a par value of '' 1 per share as on 31st March, 2023. Accordingly, all equity shares rank equally with regard to dividends and share in the Companyâs residual assets. The equity shares are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholder are in proportion to its share of the paid-up equity capital of the Company.

On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.

Nature and purpose of reserves

(i) Securities Premium is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of Companies Act, 2013.

(ii) General Reserve is created by setting aside amount from the retained earnings of the Company for general purposes which is freely available for distribution

(iii) Employee Share Option Reserve represents the fair value of services received against employees stock options (ESOPâs) outstanding as at balance sheet date. (refer note 48)

Dividends

In Board Meeting held on 18th May, 2023 Board of Director have recommended, subject to the approval of shareholders, dividend of '' 3/- per equity share of face value of '' 1/- each for the year ended 31st March, 2023 on 10,62,38,572 (including 1,033 shares issued on 5th May, 2023 under ESOP-2021 scheme) amounting to '' 318.72/- million. The dividend have not been recognised as liability.

38 | CONTINGENT LIABILITIES AND COMMITMENTS:

(a) Contingent liabilities

i) Pursuant to recent judgement by the Honorable Supreme Court dated 28th February, 2019, it was held that basic wages, for the purpose of Provident fund, to include special allowances which are common for all employees. However, there is uncertainty with respect to applicability of the Judgement and year from which the same applies. The Company has assessed that there was no impact of the same for current year end since provident fund was already deducted on such special allowance for current year end. Owing the aforesaid, uncertainty and pending clarification from the authorities in this regard, the Company had not recognised any provision for the years prior to 28th February, 2019.

ii) The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the Company towards Provident Fund and Gratuity. The Ministry of Labour and Employment had released draft rules for the Code on Social Security, 2020 on 13th November, 2020. The Company will assess the impact and its evaluation once the subject rules are notified. The Company will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

(b) Commitments
Particulars	As at 31st March, 2023	As at 31st March, 2022
Estimated amount of contracts remaining to be executed on capital account and not provided for	27.92	23.79
Total	27.92	23.79

41 | FINANCIAL RISK MANAGEMENT

The Companyâs risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Companyâs management monitors compliance with the Companyâs risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Board is also assisted by internal audit. Internal audit undertakes both regular and adhoc reviews of risk management controls and procedures, the results of which are reported to the Board of directors.

The Company has exposure to the following risks arising from financial instruments:

- credit risk - see note (a) below

- liquidity risk - see note (b) below

- interest rate risk - see note (c) below

- market risk - see note (d) below"

(a) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers.

Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess impairment loss or gain. The Company uses a matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account available external and internal credit risk factors and Companyâs historical experience for customers.

(i) The Company has not made any provision on expected credit loss on trade receivables and other financial assets, based on the management estimates.

(ii) Credit risk on cash and cash equivalents is limited as the Company generally invests in deposits with banks and financial institutions with high credit ratings assigned by domestic credit rating agencies.

(b) Liquidity risk

The Companyâs treasury department is responsible for liquidity and funding. In addition policies and procedures relating to such risks are overseen by the management.

The Companyâs principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations.

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 Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs debt obligations with floating interest rates. The Company manages its interest rates by selecting appropriate type of borrowings and by negotiation with the bankers.

(d) Market risk

Market risk is the risk that changes with market prices - such as foreign exchange rates and interest rates, which will affect the Companyâs income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

42 | CAPITAL MANAGEMENT

The Companyâs capital comprises equity share capital, surplus in the statement of profit and loss and other equity attributable to equity holders.

The Companyâs objectives when managing capital are to :

- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

- maintain an optimal capital structure to reduce the cost of capital.

44 | POST-EMPLOYMENT BENEFIT PLANS

As per Indian Accounting Standard 19" Employee Benefits", the disclosures as defined are given below-

A. Defined Contribution Plans

B. Defined Benefit Plans Gratuity

Risk exposure and asset liability matching

Provision of a defined benefit scheme poses certain risks, some of which are detailed hereunder, as companies take on uncertain long term obligations to make future benefit payments.

1) Liability Risks

a. Asset Liability Mismatch risk

Risk which arises if there is a mismatch in the duration of the assets relative to the liabilities. By matching duration with the defined benefit liabilities, the Company is successfully able to neutralise valuation swings caused by interest rate movements. Hence companies are encouraged to adopt asset-liability management.

b. Discount Rate Risk

Variations in the discount rate used to compute the present value of the liabilities may seem small, but in practise can have a significant impact on the defined benefit liabilities.

c. Future Salary Escalation and Inflation Risk

2) Asset Risks

All plan assets are maintained in a trust fund managed by a public sector insurer viz; LIC of India. LIC has a sovereign guarantee and has been providing consistent and competitive returns over the years. The Company has opted for a traditional fund wherein all assets are invested primarily in risk averse markets. The Company has no control over the management of funds but this option provides a high level of safety for the total corpus. A single account is maintained for both the investment and claim settlement and hence 100% liquidity is ensured. Also interest rate and inflation risk are taken care of.

48 | EMPLOYEE SHARE BASED-PAYMENTS

The Company has formulated employee share-based payment schemes with objective to attract and retain talent and align the interest of employees with the Company as well as to motivate them to contribute to its growth and profitability. The Company views employee stock options as instruments that would enable the employees to share the value they create for the Company in the years to come.

At present, following employee share-based payment scheme is in operation, details of which are given below: a Clean Science and Technology Limited Employee Stock Option Scheme - 2021 (CSTL ESOS - 2021):

The Company has instituted equity-settled Clean Science and Technology Employee Stock Option Scheme - 2021 (CSTL ESOS-2021) of 1,00,000 options, duly approved by the shareholders in the extra-ordinary general meeting of the Company held on 27th March, 2021, the said CSTL ESOS-2021 was subsequently amended and ratified by shareholders on 17th March, 2022. As per CSTL ESOS-2021, Nomination and Remuneration Committee evaluates the performance and other criteria of employees and approves the grant of options. These options vest with eligible employees over a specified period subject to fulfilment of certain conditions. Under the said plan, the Nomination and Remuneration Committee has granted 55,852 and 33,879 equity-settled stock options on 12th June, 2021 and 5th September, 2022 to eligible employees of the Company. The vesting period is minimum one year from the date of grant and maximum 4 years.

Employee benefit expenses to be recognised in the financial statements

The Group has recognised employee stock-based compensation expense of '' 10.90 million for the year ended 31st March, 2023 (31st March, 2022: '' 4.83 million) in the Consolidated Statement of Profit and Loss. The corresponding impact is recognised as ''Employee share based payment reserveâ in Other Equity.

50 | OPERATING SEGMENT

As per Ind AS 108 Operating Segments, when a financial report contains both consolidated financial statements and separate financial statements for the parent, segment information needs to be presented only in case of consolidated financial statements. Accordingly, segment information has been provided only in the consolidated financial statements.

51 | OTHER STATUTORY INFORMATION

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

b) The Company do not have any transactions with companies struck off.

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

d) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

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

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

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

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

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

53 | INITIAL PUBLIC OFFER

The Company was incorporated on 7th November, 2003 and in July 2021 the Shareholders of the Company made an offer for sale of 17,184,682 equity shares aggregating to '' 15,466.22 million. The equity shares of the Company got listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) on 19th July, 2021. The Company has not received any proceeds from the Offer and all such proceeds (net of any Offer related expenses which are borne by Selling Shareholders) have gone to the Selling Shareholders. The Offer has been authorised by resolution of Board of Directors at their meeting held on 20th March, 2021. Further, the Board has taken on record the approval for the Offer for Sale by the Selling Shareholders pursuant to the resolution dated 6th April, 2021.

54 | EVENTS OCCURRING AFTER BALANCE SHEET DATE

In Board Meeting held on 18th May, 2023 Board of Director have recommended, subject to the approval of shareholders, dividend of '' 3/- per equity share of face value of '' 1/- each for the year ended 31st March, 2023 on 10,62,38,572 (including 1,033 shares issued on 05th May, 2023 under ESOP-2021 scheme) amounting to '' 318.72 million.

Mar 31, 2022

Note on bonus issue and share split

In FY 2020-21, pursuant to the approval of shareholders granted in the extra-ordinary general meeting held on 24^thDecember, 2020, the Company issued and allotted fully paid-up "bonus shares" at par in proportion of seven new equity shares of '' 10 each for every one existing fully paid up equity share of '' 10 each held as on the record date of 5^th February, 2021. Pursuant to the approval of shareholders granted in the extra-ordinary general meeting held on 25^th February, 2021, the Company undertook a stock split of 10 equity shares of '' 1 each for one existing fully paid up equity share of '' 10. As a result of the above transactions, the issued, subscribed and paid up number of equity shares have been increased to 106,218,960 and the authorised number of equity shares are increased and restricted to 150,000,000.

Note on Buy-back of Shares

In FY 2019-20, the Board of Directors of the Company at its meeting held on 20^th March, 2020 had approved a proposal to buyback up to 87,990 equity shares of the Company for an aggregate amount not exceeding '' 400 million being 6.22% of total paid up equity share capital of the Company, at '' 4,546 per equity share. Letter of offer was issued to all eligible shareholders holding shares as on 31^st December, 2019. The period for tendering the shares for buyback was from 30^th March, 2020 to 31^st March, 2020. The Company bought back 87,990 equity shares for an amount of '' 400 million. The equity shares bought back were extinguished on 6^th April, 2020. Capital Redemption Reserve was created to the extent of nominal value of equity share capital extinguished of '' 0.88 million. Transaction costs (including tax on distributed income to shareholders) '' 91.17 million for the buyback have been adjusted to retained earnings.

Terms / Rights attached to each classes of shares Rights, preferences and restrictions attached to equity shares

The Company has a single class of equity shares having a par value of '' 1 per share as on 31^st March, 2022. Accordingly, all equity shares rank equally with regard to dividends and share in the Companyâs residual assets. The equity shares are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholder are in proportion to its share of the paid-up equity capital of the Company.

36 Contingent liabilities, contingent assets and commitments :

(a) Contingent liabilities

Pursuant to recent judgement by the Honorable Supreme Court dated 28^th February, 2019, it was held that basic wages, for the purpose of Provident fund, to include special allowances which are common for all employees. However, there is uncertainty with respect to applicability of the Judgement and year from which the same applies. The Company has assessed that there was no impact of the same for current year end since provident fund was already deducted on such special allowance

for current year end. Owing the aforesaid, uncertainty and pending clarification from the authorities in this regard, the Company had not recognised any provision for the years prior to 28^th February, 2019.

39 Financial risk management

The Companyâs board of directors has overall responsibility for the establishment and oversight of the Companyâs risk management framework. The board of directors is responsible for developing and monitoring the Companyâs risk management policies. The board regularly meets to decide its risk management activities. The Companyâs risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations. The Companyâs management monitors compliance with the Companyâs risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Board is also assisted by internal audit. Internal audit undertakes both regular and adhoc reviews of risk management controls and procedures, the results of which are reported to the Board of directors.

The Company has exposure to the following risks arising from financial instruments:

- credit risk - see note (a) below

- liquidity risk - see note (b) below

- interest rate risk - see note (c) below

- market risk - see note (d) below

(a) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers.

Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess impairment loss or gain. The Company uses a matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account available external and internal credit risk factors and Companyâs historical experience for customers.

(i) The Company has not made any provision on expected credit loss on trade receivables and other financial assets, based on the management estimates.

(ii) Credit risk on cash and cash equivalents is limited as the Company generally invests in deposits with banks and financial institutions with high credit ratings assigned by domestic credit rating agencies.

(b) 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 asset. The Companyâs approach to managing liquidity is to ensure, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation. The Companyâs treasury department is responsible for liquidity and funding. In addition policies and procedures relating to such risks are overseen by the management. The Companyâs principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations.

(d) Market risk

Note: Amounts seen as 0.00 are below the disclosure threshold of the Company.

The exchange rate used by the Company is that rate which is notified by the Reserve Bank of India.

Impact of COVID - 19

The Company based on an internal assessment believes that the probability of the occurrence of their highly probable forecasted transactions is not significantly impacted by the COVID 19 pandemic. The Company has also considered the effect of changes, if any, in both counterparty credit risk and own credit risk while assessing the hedge effectiveness. The Company continues to believe that there is no impact on effectiveness of its hedges.

40 Capital management

The Companyâs capital comprises equity share capital, surplus in the statement of profit and loss and other equity attributable to equity holders.

The Companyâs objectives when managing capital are to :

- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

- maintain an optimal capital structure to reduce the cost of capital.

(b) Fair value hierarchy:

As per Ind AS 107 âFinancial Instrument: Disclosureâ, fair value disclosures are not required when the carrying amounts reasonably approximate the fair value. As illustrated above, all financial instruments of the Company which are carried at amortized cost approximates the fair value (except for which the fair values are mentioned). Investments in Mutual Funds which are designated at FVTPL & investment in shares which are classified as FVTPL and FVTOCI are at fair value.

42 Post-employment benefit plans

As per Indian Accounting Standard 19â Employee Benefitsâ, the disclosures as defined are given below-

A. Defined Contribution Plans

The Company makes contributions, determined as a specific percentage of employee salaries, in respect of qualifying employees towards Provident Fund, which is a defined contribution plan. The Company has no obligation other than to make the specified contributions. The contributions are charged to the Statement of Profit and Loss as they accrue. The amount recognised as an expense towards contribution to Provident fund and other funds for the period aggregated to '' 8.03 million (31^st March, 2021 : '' 5.94 million).

B. Defined Benefit Plans Gratuity

Risk exposure and asset liability matching Provision of a defined benefit scheme poses certain risks, some of which are detailed hereunder, as companies take on uncertain long term obligations to make future benefit payments.

1) Liability Risks

a. Asset Liability Mismatch risk

Risk which arises if there is a mismatch in the duration of the assets relative to the liabilities. By matching duration with the defined benefit liabilities, the company is successfully able to neutralize valuation swings caused by interest rate movements. Hence companies are encouraged to adopt asset-liability management.

b. Discount Rate Risk

Variations in the discount rate used to compute the present value of the liabilities may seem small, but in practise can have a significant impact on the defined benefit liabilities.

c. Future Salary Escalation and Inflation Risk

2) Asset Risks

All plan assets are maintained in a trust fund managed by a public sector insurer viz; LIC of India. LIC has a sovereign

guarantee and has been providing consistent and competitive returns over the years. The company has opted for a traditional fund wherein all assets are invested primarily in risk averse markets. The company has no control over the management of funds but this option provides a high level of safety for the total corpus. A single account is maintained for both the investment and claim settlement and hence 100% liquidity is ensured. Also interest rate and inflation risk are taken care of."

The following tables summarise the components of net benefit expense recognised in the statement of profit and loss, the funded status and amounts recognised in balance sheet for the plan.

Impact of COVID 19

The leases that the Company has entered with lessors majorly pertains for land taken on lease. The Company has already made payment of lease rentals and no changes in terms of those leases are expected due to the COVID-19 pandemic.

46 Employee Share Based-Payments

The Company has formulated employee share-based payment schemes with objective to attract and retain talent and align the interest of employees with the Company as well as to motivate them to contribute to its growth and profitability. The Company views employee stock options as instruments that would enable the employees to share the value they create for the Company in the years to come.

At present, following employee share-based payment scheme is in operation, details of which are given below:

Clean Science and Technology Limited Employee Stock Option Scheme - 2021 (CSTL ESOS - 2021):

The Company has instituted equity-settled Clean Science and Technology Employee Stock Option Scheme - 2021 (CSTL ESOS-2021) duly approved by the shareholders in the extra-ordinary general meeting of the Company held on 27^th March, 2021, the said CSTL ESOS-2021 was subsequently amended and ratified by shareholders on 17^th March, 2022. As per CSTL ESOS-2021, Nomination and Remuneration Committee evaluates the performance and other criteria of employees and approves the grant of options. These options vest with eligible employees over a specified period subject to fulfilment of certain conditions. Under the said plan, the Nomination and Remuneration Committee has granted 55,852 equity-settled stock options on 12^th June, 2021 to eligible employees of the Company. The vesting period is minimum one year from the date of grant and maximum 4 years.

(b) Information about major customers (external customers):

The following is the transactions by the Company with external customers individually contributing 10 per cent or more of revenue from operations:

(i) For the year ended 31^st March, 2022, revenue from operations of one customer of the Company represented approximately 12.50% of revenue from operations.

(ii) For the year ended 31^st March, 2021, revenue from operations of one customer of the Company represented approximately 13.28% of revenue from operations.

49 Other Statutory Information