2.17 Provisions, contingent liabilities and contingent assets
General

A provision is recognised if, as a result of a past event, the Company has a present legal or constructive
obligation that is reliably estimable, and it is probable that an outflow of economic benefits will be required to
settle the obligation. If the effect of time value of money is material, provisions are determined by discounting
the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of
money and the risks specific to the liability. Where discounting is used, the increase in the provision due to the
passage of time is recognised as a finance cost.

A provision for onerous contracts is recognised when the expected benefits to be derived by the Company from
a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is
measured at the present value of the lower of the expected cost of terminating the contract and the expected
net cost of continuing with the contract. Before a provision is established, the Company recognises any
impairment loss on the assets associated with that contract.

Warranty provisions

Provisions for warranty-related costs are recognised when the product is sold to the customer. Initial recognition
is based on historical experience and is measured at the present value. The initial estimate of warranty-related
costs is revised annually.

Contingent Liabilities

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

Contingent assets

Contingent assets are not recognised or disclosed in financial statements since this may result in the recognition
of income that may never be realised. However, when the realisation of income is virtually certain, then the
related asset is not a contingent asset and is recognised.

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

2.18 Impairment

a Financial assets

Financial assets (other than at fair value) The Company assesses at each date of balance sheet whether
a financial asset or a group of financial assets is impaired. Ind AS 109 (‘Financial Instruments') requires
expected credit losses to be measured through a impairment allowance. The Company recognises lifetime
expected losses for all contract assets and / or all trade receivables that do not constitute a financing
transaction. For all other financial assets, expected credit losses are measured at an amount equal to the
12-month expected credit losses or at an amount equal to the life time expected credit losses if the credit
risk on the financial asset has increased significantly since initial recognition. The Company provides for
impairment upon the occurrence of the triggering event.

b Non-financial assets

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

Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or
changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose
of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the
value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that
are largely independent of those from other assets. In such cases, the recoverable amount is determined
for the CGU to which the asset belongs.

If such assets are considered to be impaired, the impairment to be recognised in the statement of profit
and loss is measured by the amount by which the carrying value of the assets exceeds the estimated
recoverable amount of the asset. An impairment loss is reversed in the statement of profit and loss if there
has been a change in the estimates used to determine the recoverable amount. An impairment loss in
case of goodwill is not reversed. The carrying amount of the asset is increased to its revised recoverable
amount, provided that this amount does not exceed the carrying amount that would have been determined
(net of any accumulated amortisation or depreciation) had no impairment loss been recognised for the
asset in prior years.

2.19 Earnings per share

The Company presents basic and diluted earnings per share for its ordinary shares. Basic earnings per equity
share is computed by dividing the net profit attributable to the equity holders of the Company by the weighted
average number of equity shares outstanding during the year/period. Diluted earnings per equity share is
computed by dividing the net profit attributable to the equity holders of the Company by the weighted average
number of equity shares considered for deriving basic earnings per equity share and also the weighted average
number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The
dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually
issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity
shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential
equity shares are determined independently for each period presented.

2.20 Retirement and other employee benefits

2.20.1 Gratuity - defined benefit plans

The present value of the obligation under defined benefit plans are determined based on actuarial valuation
using the Projected Unit Credit Method. In case of funded plans, the fair value of the plan assets is reduced
from the gross obligation under the defined benefit plans to recognise the obligation on a net basis.

Remeasurement comprising of actuarial gains and losses is recognised in other comprehensive income (OCI)
and is reflected in reserves and surplus as part of equity and is not eligible to be reclassified to profit or loss.

The Company recognises the following changes in the net defined benefit obligation as an expense in statement
of profit and loss:

• Service cost including current service cost, past service cost and gains and losses on curtailments and
settlements; and

• Net interest expense or income.

2.20.2 Provident fund - Defined contribution scheme

Retirement benefit in the form of provident fund and pension fund are defined contribution scheme. The
Company has no obligation, other than the contribution payable. The Company recognises contribution payable
to provident fund and pension fund as expenditure, when an employee renders the related service.

2.20.3 Superannuation - Defined contribution scheme

Contribution to Superannuation Fund, is made at pre-determined rates to the Superannuation Fund Trust and
is charged to the statement of profit and loss during the period in which the employee renders the related
services. There are no other obligations other than the contribution payable to the Superannuation Fund Trust.
The corpus of which is invested with the Life Insurance Corporation of India.

2.20.4 Compensated absences

Accumulated leave, which is expected to be utilised within the next 12 months, is treated as short-term
employee benefits. The Company measures the expected cost of such absences as the additional amount
that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date. The
Company presents the entire accumulated leave as a current liability in the balance sheet, since it does not
have an unconditional right to defer its settlement for 12 months after the reporting date. Such long-term
compensated absences are provided for based on the actuarial valuation using the projected unit credit method
at each balance sheet date.

2.21 Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits
with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

For the purpose of statement of cash flows, cash and cash equivalents consist of cash and cheque at hand/
remittance in transit and cash and deposit with bank.

2.22 Cash dividend

The Company recognises a liability to make cash distributions to equity holders of the Company when the
distribution is authorised and the distribution is no longer at the discretion of the Company. A corresponding
amount is recognised directly in equity. Final dividends on shares are recorded as a liability on the date of
approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the
Company's Board of Directors.

2.23 Corporate social responsibility (‘CSR') expenditure

The Company charges its CSR expenditure during the year to the statement of profit and loss.

2.24 Segment

Operating segments are identified as those components of the Company (a) that engage in business activities
to earn revenues and incur expenses (including transactions with any of the Company's other components (b)
whose operating results are regularly reviewed by the Company's Chief Executive Officer to make decisions
about resource allocation and performance assessment and (c) for which discrete financial information is
available. The accounting policies consistently used in the preparation of the financial statements are also
applied to record revenue and expenditure in individual segments.

The Company is engaged in the business relating to products, projects and services for electricity transmission
and related activities. These activities of the Company are reviewed regularly by the chief operating decision
maker from an overall business perspective, rather than reviewing its products/services as individual
standalone components and therefore subject to the same risk and reward and accordingly falls within single
business segment.

2.25 Climate-related matters

The Company considers climate-related matters in estimates and assumptions, where appropriate. This
assessment includes a wide range of possible impacts on the Company due to both physical and transition
risks. Even though the Company believes its business model and products will still be viable after the transition
to a low-carbon economy, climate-related matters increase the uncertainty in estimates and assumptions
underpinning several items in the financial statements. Even though climate-related risks might not currently have
a significant impact on measurement, the Company is closely monitoring relevant changes and developments.

2.26 Exceptional Items

Exceptional Items represents the nature of transactions which are not in recurring nature during the ordinary
course of business and are of such size, nature or incidence that their separate disclosure is considered necessary
to explain the performance of the Company and lead to increase/ decrease in profit/ loss for the year.

2.27 New and amended standards (Ind AS)

The following amended standards as considered applicable were effective during the year, however, these
amendments had no material impact on the financial statements of the Company

(i) Lack of exchangeability - Amendments to Ind AS 21

The Ministry of Corporate Affairs notified amendments to Ind AS 21 The effects of changes in foreign
exchange rates to specify how an entity should assess whether a currency is exchangeable and how it
should determine a spot exchange rate when exchangeability is lacking. The amendments also require
disclosure of information that enables users of its financial statements to understand how the currency
not being exchangeable into the other currency affects, or is expected to affect, the entity's financial
performance, financial position and cash fiows.When applying the amendments, an entity cannot restate
comparative information.

The amendments do not have a material impact on the Company's financial statements.

(ii) Classification of Liabilities as Current or Non-current and Non-current Liabilities with Covenants -
Amendments to Ind AS 1

The MCA notified amendments to paragraphs 69 to 76 of Ind AS 1 to specify the requirements for
classifying liabilities as current or non-current. The amendments clarify:

• What is meant by a right to defer settlement

• That a right to defer must exist at the end of the reporting period

• That classification is unaffected by the likelihood that an entity will exercise its deferral right

• That only if an embedded derivative in a convertible liability is itself an equity instrument would the
terms of a liability not impact its classification

In addition, a requirement has been introduced to require disclosure when a liability arising from a loan
agreement is classified as non-current and the entity's right to defer settlement is contingent on compliance
with future covenants within twelve months.

If there is a breach of a material covenant of a long term loan arrangement on or before the end of the
reporting period, resulting in the liability becoming payable on demand as at the reporting date, and the
lender agrees—after the reporting period but before the financial statements are approved for issue—not
to demand repayment for at least 12 months as a consequence of the breach, this shall be treated as an
adjusting event. Accordingly, the entity is not required to classify the liability as current.

The amendments do not have any impact on the classification of Company's liabilities.

(iii) Supplier Finance Arrangements - Amendments to Ind AS 7 and Ind AS 107

MCA notified amendments to Ind AS 7 Statement of Cash Flows and Ind AS 107 Financial Instruments:
Disclosures to clarify the characteristics of supplier finance arrangements and require additional disclosure
of such arrangements. The disclosure requirements in the amendments are intended to assist users of
financial statements in understanding the effects of supplier finance arrangements on an entity's liabilities,
cash flows and exposure to liquidity risk.

As a result of implementing the amendments, the Company has provided additional disclosures about its
supplier finance arrangement. Please refer to Note 19 and Note 32(C)(iv)

(iv) International Tax Reform-Pillar Two Model Rules - Amendments to Ind AS 12

The MCA notified amendments to Ind AS 12 Income Taxes in response to the OECD's BEPS Pillar Two
rules and include:

• A mandatory temporary exception to the recognition and disclosure of deferred taxes arising from the
jurisdictional implementation of the Pillar Two model rules; and

• Disclosure requirements for affected entities to help users of the financial statements better understand
an entity's exposure to Pillar Two income taxes arising from that legislation, particularly before its
effective date.

The mandatory temporary exception - the use of which is required to be disclosed - applies immediately.
The remaining disclosure requirements apply for annual reporting periods beginning on or after 1 April
2025, but not for any interim periods ending on or before 31 March 2026.

The amendments had no impact on the Company's financial statements as the Company is not in scope
of the Pillar Two model rules.

2.28 Recent Indian Accounting Standards (Ind AS)

Amendments to Ind AS 1 - Classification of liabilities as current or non-current and non-current liabilities with
covenants and Ind AS 10 Events after the reporting period

Ind AS 10 has been amended to remove the previous treatment under which a lender's post reporting date
waiver granted before the financial statements were approved for issue of a breach of a material covenant in a
long term loan arrangement that occurred on or before the end of the reporting period, resulting in the liability
becoming payable on demand at the reporting date, was regarded as an adjusting event.

For annual reporting periods beginning on or after 1 April 2026, any breach of a covenant whether material
or immaterial occurring on or before the reporting date will, in accordance with Ind AS 1, require the related
liability to be classified as current, unless the lender has granted a waiver of the breach on or before the
reporting date and has agreed not to demand repayment for at least 12 months after the reporting date as a
consequence of the breach. Such a waiver shall be treated as an adjusting event.

The amendments are effective for annual reporting periods beginning on or after 1 April 2026 retrospectively
in accordance with Ind AS 8. The amendments are not expected to have a material impact on the Company's
financial statements.

Note:

Pursuant to the Scheme of arrangement under Sections 230-232 and other applicable provisions of the Companies Act, 2013
(‘the Scheme') between ABB India Limited (‘transferor Company'), Hitachi Energy India Limited formerly known as ABB Power
Products and Systems India Limited ('Resulting Company') and their respective shareholders and creditors for the demerger of
Power Grid business from ABB India Limited into the Company, the asset was transferred to the Company. As at March 31, 2026,
the Company is in process of getting the registered name transferred to the Company and the title deeds of aforementioned
properties are not disputed.

Goodwill impairment testing

The carrying amount of goodwill as at March 31, 2026 and March 31, 2025 has been attributed to power
grids business as a cash generating unit (‘CGU') . The Company tests whether goodwill has suffered any
impairment on an annual basis or in case of any indicator. The recoverable amount of a CGU is determined
based on value-in-use calculations which require the use of assumptions. The calculations use pre-tax cash
flow projections based on financial budgets approved by the management. An average of the range of each
key assumption used as at March 31, 2026 and March 31, 2025 is mentioned below.

1. Trade receivables from related parties (refer note 39).

2. No trade or other receivable are due from directors or other officers of the Company either severally or jointly with any
other person. For trade or other receivable due from firms or private companies respectively in which any director is a
partner, a director or a member, refer note 39.

3. Trade receivables are non-interest bearing.

4. Trade receivables is inclusive of the retention receivables where the Company has unconditional right to consideration

5. Refer note 32(C)(iv) for details pertaining to credit risk.

6. Refer note 37(b) for details pertaining to contract balances.

7. Also refer note 19 B

*The Company raised capital of ' 2,520.82 Crores through Qualified Institutions Placement ("QIP”) of equity shares.
The Fund-Raising Committee of the Board of Directors of the Company, at its meeting held on March 13, 2025,
approved the allotment of 2,190,688 equity shares of face value ' 2/- each to eligible investors at a price ' 11,507
per equity share (including a premium of ' 11,505 per equity share)

c. Terms/ rights attached to equity shares

The Company has only one class of equity shares having a par value of ' 2/- per share. Each holder of
equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees.

The Board of directors have recommended dividend of ' 8.00/- per equity share, which translates to a
total dividend of ' 35.66 crores, for the year ended March 31, 2026. The dividend proposed by the Board
of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

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

Nature and purpose of other reserves

a) Securities premium

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

b) Retained earnings

Retained earnings are the profits of the Company earned till date net of appropriations/distributions and
other adjustments permitted as per the applicable regulations and accounting standards.

c) Amalgamation adjustment deficit account

Amalgamation adjustment deficit account is the deficit between the carrying value of assets, liabilities and
reserves transferred to the Company and the consideration discharged by way of the New Equity Shares
issued to the shareholders of ABB India Limited pursuant to the demerger of Power Grid Business from
ABB India Limited.

d) Capital reserve

Capital reserve is acquired pursuant to scheme of arrangement.

e) General reserve

General reserve is acquired pursuant to scheme of arrangement. The Company can use this reserve for
payment of dividend and issue of fully paid-up shares. As General reserve is created by transfer of one
component of equity to another and is not an item of other comprehensive income, items included in the
General reserve will not be subsequently reclassified to statement of profit and loss.

The above disclosures are provided by the Company based on the information available with the Company in
respect of the registration status of its vendors/suppliers.

A) The Company has established a supplier finance arrangement that is offered to some of the Company's
key suppliers in India. Participation in the arrangement is at the suppliers' own discretion. Suppliers that
participate in the supplier finance arrangement will receive early payment on invoices sent to the Company
from the external finance provider. If suppliers choose to receive early payment, they pay a fee to the
finance provider, to which the Company is not party. In order for the finance provider to pay the invoices,
the goods must have been received or supplied and the invoices approved by the Company. Payments
to suppliers ahead of the invoice due date are processed by the finance provider and, in all cases, the
Company settles the original invoice by paying the finance provider in line with the original invoice maturity
date. Payment terms with suppliers have not been renegotiated in conjunction with the arrangement. The
Company provides no security to the finance provider and there is no change in the Company's original
obligation towards the supplier.

Accordingly, the trade payables subject to the supplier finance arrangement are included in trade payables
in the balance sheet and within trade payables in the table above.

There were no significant non-cash changes in the carrying amount of the trade payables included in the
Company's supplier finance arrangement.

B) As at March 31, 2026, trade and other payables amounting to Rs. 108.46 crores (March 31, 2025: Rs.
48.23 crores), advance from customers amounting to Rs. 142.90 crores (March 31, 2025: Rs. 62.75
crores) and trade and other receivables amounting to Rs. 26.31 crores (March 31, 2025: Rs. 41.73
crores) towards purchase and sale of goods and services respectively, which are outstanding beyond
permissible time period stipulated under the Master Circular on Import of Goods and Services and Master
Circular on Export of Goods and Services issued by Reserve Bank of India ('the RBI'), which states that
payments against imports of goods and receipts against exports of goods and services within defined
regulatory timelines from date of shipment.

Considering that the balances are outstanding for more than the stipulated time, the Company is in the
process of intimating the appropriate regulatory authorities and seeking requisite approvals for extensions.
The management is confident that required approvals would be received and penalties, if any that may
be imposed on the Company would not be material. Accordingly, no adjustments have been made by the
management to these financial statements in this regard.

Nature of provisions:

i) Warranties: The Company provides warranties for its products, systems and services, undertaking to repair
or replace the items that fail to perform satisfactorily during the warranty period. Provision represents
the amount of the expected cost based on technical evaluation and past experience of meeting such
obligations. It is expected that this expenditure will be incurred over the contractual warranty period.

ii) Loss orders: A provision for expected loss on construction contracts is recognised when it is probable that
the contract costs will exceed total contract revenue. For all other contracts loss order provisions are made
when the unavoidable costs of meeting the obligation under the contract exceed the currently estimated
economic benefits.

31 POST-EMPLOYMENT BENEFIT PLAN
Gratuity plan :

Gratuity is payable to all eligible employees of the Company as per the provisions of the Payment of
Gratuity Act, 1972 or as per the Company's scheme, whichever is higher. The plan assets are held by Hitachi
Energy India Limited Employees' Gratuity Trust (The said trust was duly set up by Company on September
1, 2020 and the same was approved on February 22, 2021 by Hon'ble Commissioner of Income Tax).

Under the Payment of Gratuity Act, 1972, every employee who has completed five years or more of service
gets gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The level
of benefits provided depends on the member's length of service and salary at retirement age. The Gratuity
scheme provides for a lump sum payment made on exit either by way of retirement, death, disability or voluntary
withdrawal. The benefits are defined on the basis of final salary and the period of service and paid as lump
sum at exit.

Assumptions relating to future salary increases, attrition, interest rate for discount and overall expected rate of
return on assets have been considered based on relevant economic factors such as inflation, market growth
and other factors applicable to the period over which the obligation is expected to be settled.

Impact on defined benefit obligation

The sensitivity analysis above have been determined based on a method that extrapolates the impact on
defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the
reporting period. The sensitivity analysis are based on a change in a significant assumption, keeping all other
assumptions constant. The sensitivity analysis may not be representative of an actual change in the defined
benefit obligation as it is unlikely that changes in assumptions would occur in isolation from one another.

x) Description of Plan Characteristics and Associated Risks

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

Interest rate risk : The defined benefit obligation calculated uses a discount rate based on government
bonds. If bond yields fall, the defined benefit obligation will tend to increase

Salary Inflation risk : Higher than expected increases in salary will increase the defined benefit obligation

Demographic risk : This is the risk of variability of results due to unsystematic nature of decrements that
include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined
benefit obligation is not straight forward and depends upon the combination of salary increase, discount
rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis
the retirement benefit of a short career employee typically costs less per year as compared to a long
service employee

32 FINANCIAL INSTRUMENTS

This section gives an overview of the significance of financial instruments for the Company and provides
additional information on balance sheet items that contain financial instruments.

The details of material accounting policies, including the criteria for recognition, the basis of measurement and
the basis on which income and expenses are recognised in respect of each class of financial asset, financial
liabilities and equity instrument are disclosed in the financial statements.

A Fair value of financial assets and financial liabilities

The carrying amount of all financial assets and liabilities appearing in the financial statements is reasonable
approximation of fair value. The following tables presents the carrying value and fair value / amortised
cost of each category of financial assets and liabilities:

Valuation technique and significant unobservable inputs:

This section explains the judgements and estimates made in determining the fair values of
the financial instruments that are (a) recognised and measured at fair value and (b) measured
at amortised cost and for which fair values are disclosed in the financial statements. 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 accounting standard. An explanation of
each level follows underneath the table.

i) The management assessed the trade receivables, trade payables, loans, cash and cash equivalents,
other financial assets and other financial liabilities approximate their carrying amounts largely due to
the short-term maturities of these instruments.

ii) The fair value of the financial assets and liabilities is included at the amount at which the instrument
could be exchanged in a current transaction between willing parties, other than in a forced or
liquidation sale. The following methods and assumptions were used to estimate the fair values:

(a) Management uses its best judgement in estimating the fair value of its financial instruments.
However, there are inherent limitations in any estimation technique. Therefore, for substantially
all financial instruments, the fair value estimates presented above are not necessarily indicative
of the amounts that the Company could have realised or paid in sale transactions as of respective
dates. As such, fair value of financial instruments subsequent to the reporting dates may be
different from the amounts reported at each reporting date.

(b) Lease liabilities are carried at discounted value using incremental borrowing rate.

(c) The Company enters into derivative financial instruments with banks/financial institutions. Foreign
currency forward contracts are valued using valuation techniques which employs the use of
market observable inputs using present value calculations. The model incorporates various
inputs including the deal specific fundamental, market conditions, maturity period, transaction
size, comparable trades, foreign currency spot and forward rates.

(d) Embedded foreign currency are measured similarly to the foreign currency forward contracts.
The embedded derivatives are foreign currency forward contracts which are separated from
long-term sales contracts and purchase contracts where the transaction currency differs from
the functional currencies of the involved parties. These contracts require physical delivery and
will be held for the purpose of the delivery of the commodity in accordance with the buyers'
expected sale requirements. These contracts have embedded foreign exchange derivatives that
are required to be separated.

B Fair value hierarchy

The following table presents the fair value hierarchy of assets and liabilities measured at fair value on a
recurring basis:

C Financial risk management

The Company's principal financial liabilities, other than derivatives, comprise trade and other payables. The
main purpose of these financial liabilities is to support its operations. The Company's principal financial assets
include trade and other receivables, and cash and cash equivalents that derive directly from its operations.

The Company is exposed to market risk, foreign currency risk, credit risk and liquidity risk. The Company's
senior management oversees the management of these risks. The Company's senior management is
supported by a Risk management committee that advises on financial risks and the appropriate financial
risk governance framework for the Company. The Risk management committee provides assurance to the
Company's senior management that the Company's financial risk activities are governed by appropriate
policies and procedures and that financial risks are identified, measured and managed in accordance
with the Company's policies and risk objectives. All derivative activities for risk management purposes
are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the
Company's policy that no trading in derivatives for speculative purposes may be undertaken. The Board
of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

(i) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate
because of changes in market prices. Market risk comprises three types of risk: interest rate risk,
currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments
affected by market risk include trade payables, deposits, investments, trade receivables, other financial
assets and derivative financial instruments.

Commodity contracts

The Company uses commodity future contracts to hedge risk against fluctuation in commodity prices.
As at March 31, 2026 and March 31, 2025 there are no outstanding commodity future contracts
entered into by the Company.

(ii) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate
because of changes in foreign exchange rates. The Company's exposure to the risk of changes
in foreign exchange rates relates primarily to the Company's operating activities. The Company's
risk management policy is to hedge foreign currency exposures above certain thresholds.

The Company operates internationally and is exposed to foreign exchange risk arising from foreign
currency transactions. Foreign exchange risk arises from future commercial transactions and recognised
assets and liabilities denominated in a currency that is not Company's functional currency (INR).

a) Unhedged foreign currency exposure

The following table analyses the unhedged portion of foreign currency exposure:

(iii) 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. During the previous year, the Company's exposure
to changes in interest rates relates primarily to the Company's outstanding working capital facility
obtained from banks. The rate of interest for short term loans from banks during the previous year
ranges from 6.95% to 7.94%.

(iv) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. Financial instruments that are subject to credit risk and concentration
thereof principally consist of loan receivables, trade receivables, derivatives, cash and cash equivalents,
bank balances and other financial assets of the Company, as well as credit exposure to customers.

The maximum exposure to credit risk is equal to the carrying value of the financial assets. The
objective of managing counterparty credit risk is to prevent losses in financial assets. The Company
assesses the credit quality of the counterparties, taking into account their financial position, past
experience and other factors.

a) Trade receivables, financial assets and other current assets

The Company's customer profile consists of a large number of customers spread across
diverse industries include public sector enterprises, state owned companies and large private
corporates. Accordingly, the Company's customer credit risk is low. The Company's projects
business comprises long-term contracts which have an execution period exceeding one year.
General payment terms include mobilisation advance, monthly progress payments with a
credit period ranging from 0 to 90 days and certain retention money to be released at the
end of the project. In some cases, retentions are substituted with bank/corporate guarantees.

The Company follows ‘simplified approach' for recognition of impairment allowance on trade
receivable. Under the simplified approach, the Company tracks changes in credit risk. Further,
it recognises impairment allowance based on lifetime ECLs at each reporting date, right from
initial recognition.

The Company uses a provision matrix to determine impairment allowance on the portfolio of trade
receivables. The provision matrix is based on its historically observed default rates over the expected
life of the trade receivable and is adjusted for forward looking estimates. At year end, the historical
observed default rates are updated and changes in the forward-looking estimates are analysed.

Individual receivables which are known to be uncollectible are written off by reducing the carrying
amount of trade receivable and the amount of the loss is recognised in the statement of profit
and loss within other expenses.

Specific allowance for loss has also been provided by the management based on expected
recovery on individual parties.

The provision provided in books for trade receivables, financial assets and other current
assets overdue:

Management does not expect any significant Loss from non-performance by counterparties on
credit granted that has not been provided for.

b) Credit risk from baLances with bank and financiaL institutions is managed by the Company's
treasury department in accordance with the Company's poLicy.

(v) Liquidity Risk

Liquidity risk refers to the risk that the Company cannot meet its financiaL obLigations. The objective
of Liquidity risk management is to maintain sufficient Liquidity and ensure that funds are avaiLabLe for
use as per requirements. Prudent Liquidity risk management impLies maintaining sufficient cash and
marketabLe securities and the avaiLabiLity of funding through an adequate amount of committed credit
faciLities to meet obLigations when due and to cLose out market positions. Due to the dynamic nature
of the underLying businesses, Company maintains flexibility in funding by maintaining avaiLabiLity under
committed credit Lines.

The table below summarises the maturity profile of the Company's financial liabilities based on
contractual undiscounted payments.

A certain portion of the Company's trade payables are included in the Company's supplier finance
arrangement and are, thus, with a single counterparty rather than individual suppliers. This results in
the Company being required to settle a significant amount with a single counterparty, rather than less
significant amounts with several counterparties. However, the Company's payment terms for trade
payables covered by the arrangement are identical to the payment terms for other trade payables.
Management does not consider the supplier finance arrangement to result in excessive concentrations
of liquidity risk.

33 CAPITAL MANAGEMENT

For the purpose of the Company's capital management, capital includes issued equity capital, securities
premium and all other equity reserves attributable to the shareholders of the Company. The primary objective
of the Company's capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions
or its business requirements. To maintain or adjust the capital structure, the Company may adjust the dividend
payment to shareholders, return capital to shareholders or issue new shares. The Company's objectives are to
safeguard continuity, maintain a strong credit rating and healthy capital ratios in order to support its business
and provide adequate return to shareholders through continuing growth and maximise the shareholders value.
The Company funds its operations through internal accruals.

Considering that the Company doesnot have any borrowings as at March 31, 2026 and March 31, 2025, the
disclosure of gearing ratio has not been made. No changes were made in the objectives, policies or processes
for managing capital during the year ended March 31, 2026.

a) The Company is contesting certain legal disputes with customers. The management believes that its
position will likely be upheld in the various appellate authorities/ courts. The management believes that
the ultimate outcome of these proceedings will not have a material adverse effect on the Company's
financial position.

b) In respect of the above contingent liabilities, the future cash outflows are determinable only on receipt of
judgement pending at various forums/ authorities.

c) The Company has been granted Export Promotion Capital Goods (EPCG) licenses / Advance Authorizations
(“Licenses”) towards duty-free imports with a commitment against future export obligations. As at March
31, 2026, the Company is in the process of meeting the export obligations amounting to ' 342.30 crores
for certain Licenses. Further, for certain Licenses where duty saved amounts to ' 7.14 crores the Company
is awaiting Export Obligation Discharge Certificate (EODC).

d) Pursuant to the scheme of arrangement sanctioned by the National Company Law Tribunal, Bengaluru, by
way of order dated 27 November 2019 (Scheme), the Power Grids business of ABB India Limited (ABB)
was demerged into ABB Power Products and Systems India Limited (Demerger). ABB Power Products
and Systems India Limited was subsequently renamed to Hitachi Energy India Limited with effect from 12
November 2021.

Prior to the effective date of Demerger, ABB had obtained certain Export Promotion Capital Goods and
Advance Authorisation licenses (collectively, Licenses) in relation to the Power Grids business. Such
Licenses were issued in the name of ABB and under its Import-Export Codes (IECs), and ABB was the
named authorisation holder and actual user thereunder. The duty saved under such Licenses for which
Export Obligation Discharge Certificates (EODC) remain outstanding amounts to INR 112.63 crores.

Further subsequent to the year end, out of the above, ABB has also received an additional EODC for a
license where duty saved amounts to INR 30.13 crores.

Following the Demerger, the Company had, on a good-faith basis and under letters of authority (LOAs)
issued by ABB from time to time, assisted ABB in seeking closure of the Licenses and obtaining the
related EODCs.

In these circumstances, and having regard to the Scheme, the applicable foreign trade framework, the fact
that the Licenses were issued in the name of ABB under its IEC, and that ABB was the named authorisation
holder and actual user thereunder, the Company's management, based on its internal assessment and
external legal opinion, believes that ABB continues to remain responsible for compliance and closure in
respect of such Licences. Accordingly, the Company's management does not presently consider it likely that
any material financial exposure may arise to the Company in this regard, and thus, no adjustment has been
made in these financial statements.

(b) Leases

The Company has lease contracts for building, leasehold land and vehicles used in its operations. Leases of
building have lease terms between 2 and 15 years, land is 98 years and motor vehicles have lease terms
between 4 and 5 years. The Company's obligations under its leases are secured by the lessor's title to the
leased assets. Generally, the Company is restricted from assigning and subleasing the leased assets. Some
of the lease agreements have escalation clause ranging from 0% to 7% (March 31, 2025: 0% to 7%). There
are several lease contracts that include extension and termination options and variable lease payments.

The Company also has certain leases of machinery/computer equipments with lease terms of 12 months
or less and with low value. The Company applies the ‘short-term lease' and ‘lease of low-value assets'
recognition exemptions for these leases. The Company applied a single discount rate to leases of similar
economic environment with a similar end date and excluded the initial direct costs from the measurement
of the right-of-use asset at the date of initial application.

Refer note 3 for carrying value of right-of-use assets recognised on date of transition and the movements
thereof during the year ended March 31, 2026.

Below are the carrying amounts of lease liabilities and the movements during the year:

36 SEGMENT INFORMATION

An operating segment is a component that engages in business activities from which it may earn revenues and
incur expenses, including revenues and expenses that relate to transactions with any of the other components,
whose operating results are regularly reviewed by the Company's Chief Operating Decision Maker (CODM)
to make decisions about resource allocation and performance assessment and for which discrete financial
information is available. The Company is engaged in the business relating to products, projects and services
for electricity transmission and related activities. Accordingly, the Company's activities and business is reviewed
regularly by the chief operating decision maker from an overall business perspective, rather than reviewing its
products/services as individual standalone components. Thus, the Company has only one operating segment,
and has no reportable segment in accordance with Ind AS- 108 ‘Operating Segments'.

** Non current assets does not include deferred tax assets, financial assets and non-current tax assets.

(iii) No customer individually accounted for more than 10% of the revenues for the year ended March 31,
2026 and Adani Electricity Mumbai Infra Limited accounted for more than 10% of Company's total revenue
from operations for the year ended March 31, 2025.

Hitachi Energy USA Inc and Hitachi Energy Sweden AB accounted for more than 10% of Company's total
export revenue from operations for the year ended March 31, 2026 and March 31, 2025.

A contract asset is an entity's right to consideration in exchange for goods or services that the entity has
transferred to a customer and hence is not a financial instrument. In Company's contracts with customers,
since the contractual right to payment arises only upon achievement of milestones specified in the contract,
it is believed that the performance completed until the achievement of a particular milestone should be
recorded as a contract asset under non-financial assets.

During the year, ' 676.73 crores (March 31, 2025'888.26 crores) from opening balance of contract
assets has been reclassified to trade receivables on completion of milestones.

During the year, the Company has recognised revenue of ' 136.42 crores arising from opening billing in
excess of contract revenue as of April 01, 2025 (April 01, 2024 is ' 35.75 crores).

c) No significant adjustments are expected in contract price for revenue recognised in statement of profit
and loss.d) Remaining performance obligations

The remaining performance obligation disclosure provides the aggregate amount of the transaction price
yet to be recognised as at the end of the reporting period and an explanation as to when the Company
expects to recognise these amounts in revenue.

The aggregate value of performance obligations that are completely or partially unsatisfied as at March
31, 2026 is ' 29,555.33 crores (March 31, 2025 is ' 19,245.95 crores). The conversion to revenue is
highly dependent on meeting the delivery schedules, contractual terms and conditions with customers,
availability of customer sites, changes/ variation in scope/ prices etc. In view of these, it is not practical to
define the accurate percentage of conversion to revenue. However, it will be in a range of 1 to 5 years.

e) There was no revenue recognised in the current year ended March 31, 2026 from performance obligations
satisfied (or partially satisfied) in previous periods on account of significant changes in transaction price.

38 EXCEPTIONAL ITEM

Impact of New Labour Codes:

On November 21, 2025, the Government of India notified the four Labour Codes - the Code on Wages, 2019,
the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health
and Working Conditions Code, 2020 - consolidating 29 existing labour laws, collectively referred to as the
‘New Labour Codes'. The Company has assessed and disclosed the incremental impact of these changes,
which has resulted in increase in gratuity liability by ' 45.01 Crores and increase in leave liability (compensated
absences) by ' 9.23 Crores. Considering the materiality and regulatory-driven, non-recurring nature of this
impact, the Company has presented this incremental amount as Exceptional Item in the Statement of Profit and
Loss for the year ended March 31, 2026. The Company continues to monitor the developments pertaining to
the implementation of the New Labour Codes, including related rules there to and would continue to assess
the accounting implications basis such developments/ guidance as may be needed.

Terms and conditions of transactions with related parties

ALL transactions entered into with reLated parties defined under the Companies act, 2013 were as per the
contractuaL terms with the respective reLated parties on arm's-Length pricing basis and the Company has
undertaken necessary steps to compLy with the transfer pricing reguLations under the Income tax act, 1961.
Outstanding baLances at the year-end are unsecured and interest free and settLement occurs in cash as per
the credit terms with the respective reLated parties.

There are no Loans or advances in nature of Loans granted to promoters, directors or key manageriaL personneL.
There have been no corporate guarantees provided or received for any reLated party receivabLes or payabLes.

40 CORPORATE SOCIAL RESPONSIBILITY EXPENSES

As per the Section 135 of the Companies Act 2013 (‘Act'), the Board shall ensure that the Company spends,
in every financial year, at least two per cent of the average of the net profits of the three immediately preceding
financial years, in pursuance of its Corporate Social Responsibility (‘CSR') Policy. Hence, the Company falls
within the ambit of Section 135 of the Act and is required to contribute the amount stipulated under the
aforesaid provisions of the Act.

Notes:

1. Debt service coverage ratio, return on capital employed and return on equity variance as compared to
previous year is mainly due to increase in profits during the year.

2. Net profit ratio variance as compared to previous year is on account of improvement in operational
profit margin.

42 UTILISATION OF PROCEEDS FROM ISSUE OF SHARES
Qualified Institutional Placement

During the year ended March 31, 2025, the Company has raised capital of ' 2,520.82 Crores by allotting
2,190,688 equity shares on a Qualified Institutional Placement basis.

43 The Company is in the process of conducting a transfer pricing study as required by the transfer pricing
regulations under the Income Tax Act, 1961 (‘regulations') to determine whether the transactions entered
during the year ended March 31, 2026, with the associated enterprises were undertaken at “arm's length price”.
The management confirms that all the transactions with associate enterprises are undertaken at negotiated
prices on usual commercial terms and is confident that the aforesaid regulations will not have any impact on
the financial statements, particularly on the amount of tax expense and that of provision for taxation.

44 ADDITIONAL REGULATORY INFORMATION/DISCLOSURES TO THE EXTENT APPLICABLE TO THE
COMPANY

- No funds have been advanced or loaned or invested either from borrowed funds or share premium or
any other sources or kind of funds by the company to or in any other person or entity, including foreign
entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the
Intermediary shall, whether, 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 provide any guarantee,
security or the like on behalf of the Ultimate Beneficiaries.

- There are no funds received by the Company from any person or entity, including foreign entities (“Funding
Party”) with the understanding, whether recorded in writing or otherwise, that the Company shall, whether,
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 provide any guarantee, security or the like on
behalf of the Ultimate Beneficiaries.

- No transactions to report against Benami Property held under Prohibition of Benami Property Transactions
Act, 1988 and rules made thereunder.

- The Company does not have any such transaction which is not recorded in the books of accounts that has
been surrendered or disclosed as income during the year in the tax assessments under the Income Tax
Act, 1961 (such as, search or survey or any other relevant provisions of the Income tax Act, 1961.

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

45A PHYSICAL SERVER OF BOOKS OF ACCOUNTS

Ministry of corporate affairs has amended the Rule 3 of the Companies (Accounts) Rules, 2014 (the “Accounts
Rules”) vide notification dated August 05, 2022, relating to the mode of keeping books of account and other
books and papers in electronic mode. Back-ups of the books of account and other books and papers of the
company maintained in electronic mode are now required to be retained on a server located in India on daily
basis as prescribed under Rule 3(5) of the Accounts Rules.

The Company has identified SAP (primary accounting software) and certain other applications for which the
aforementioned provision and guidance is applicable and the Company is in compliance with the aforesaid
requirement except for certain other applications operated by third-party service providers such back-ups has
not been retained on a server located in India on daily basis.

45B AUDIT TRAIL

The Company has used accounting softwares for maintaining its books of account which has a feature of
recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions
recorded in the software, except that audit trail feature is not enabled at the database level insofar it relates to
SAP. Further no instance of audit trail feature being tampered with was noted in respect of accounting softwares
where the audit trail has been enabled.

Additionally, the audit trail of relevant prior years has been preserved by the Company as per the statutory
requirements for record retention to the extent it was enabled and recorded in those respective years except
at the database level where such audit trail was not enabled.

The Company is in the process of initiating the necessary steps to ensure necessary compliance.

46 The management has evaluated the likely impact of prevailing uncertainties relating to ongoing West Asia
crisis and believes that there are no material impacts on the financial statements of the Company for the year
ended March 31, 2026. However, the management will continue to monitor the situation from the perspective
of potential impact on the operations of the Company.

47 Certain amounts (currency value or percentages) shown in the various tables and paragraphs included in the
financial statements have been rounded off or truncated as deemed appropriate by the management of the
Company.

Previous year's figures have been regrouped / reclassified, wherever necessary, to conform to the current
year's classification.

48 SUBSEQUENT EVENTS

The Board of directors have recommended dividend of ' 8.00/- per equity share, which translates to a total
dividend of ' 35.66 crores, for the year ended March 31, 2026. The dividend proposed by the Board of
Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.