(e) Provisions, contingent liabilities and contingent
assets

Provisions are recognised when the Company has a
present obligation (legal or constructive) as a result
of a past event, it is probable that the Company
will be required to settle such obligation and a
reliable estimate can be made of the amount of
such obligation.

The amount recognised as a provision is the best
estimate of the consideration required to settle the
present obligation at the end of the reporting period,
taking into account the risks and uncertainties
surrounding the obligation. When a provision is

measured using the cash flows estimated to settle
the present obligation, its carrying amount is the
present value of those cash flows (where the effect
of the time value of money is material).

When some or all of the economic benefits required
to settle a provision are expected to be recovered
from a third party, a receivable is recognised as an
asset if it is virtually certain that reimbursement will
be recovered and the amount of the receivable can
be measured reliably.

A disclosure for a contingent liability is made when
there is a possible obligation or a present obligation
that may, but probably will not require an outflow
of resources embodying economic benefits or the
amount of such obligation cannot be measured
reliably. When there is a possible obligation or a
present obligation in respect of which likelihood of
outflow of resources embodying economic benefits
is remote, no provision or disclosure is made.

(f) Financial instruments, Financial assets, Financial
liabilities

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. Financial
assets and financial liabilities are recognised when
the Company becomes a party to the contractual
provisions of the relevant instrument and are initially
measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of
financial assets and financial liabilities (other than
financial assets and financial liabilities measured at
fair value through profit or loss) are added to or
deducted from the fair value on initial recognition
of financial assets or financial liabilities. Transaction
costs directly attributable to the acquisition of
financial asset or financial liabilities at fair value
through profit or loss are recognized immediately in
the Statement of Profit and Loss.

Purchase or sale of financial assets that require
delivery of assets within a time frame established by
regulation or convention in the market place (regular
way trade) are recognised on the trade date i.e. the
date when the Company commits to purchase or
sell the asset.

The classification of financial instruments depends
on the objective of the Company's business model

for which it is held and on the substance of the
contractual terms / arrangements. Management
determines the classification of its financial
instruments at initial recognition.

(i) Financial assets

Recognition: Financial assets include Loans,
Investments, Trade receivables, Security
Deposits, Cash and cash equivalents. Such
assets are initially recognised at transaction
price when the Company becomes party to
contractual obligations. The transaction price
includes transaction costs unless the asset is
being fair valued through the Statement of
Profit and Loss.

Classification: Financial assets are classified as
those measured at:

(a) amortised cost, where the financial assets
are held within a business model solely
for collection of cash flows arising from
payments of principal and/ or interest
as per contractual terms. Such assets are
subsequently measured at amortised cost
using the effective interest method, less
any impairment loss.

(b) fair value through other comprehensive
income (FVTOCI), where the financial
assets are held not only for collection
of cash flows arising from payments
of principal and interest but also from
the sale of such assets. Such assets are
subsequently measured at fair value, with
unrealised gains and losses arising from
changes in the fair value being recognised
in other comprehensive income.

(c) fair value through profit or loss (FVTPL),
where the assets are managed in
accordance with an approved investment
strategy that triggers purchase and sale
decisions based on the fair value of such
assets. Such assets are subsequently
measured at fair value, with unrealised
gains and losses arising from changes
in the fair value being recognised in the
Statement of Profit and Loss in the period
in which they arise.

FVTPL is a residual category for financial assets.
Any financial asset which does not meet the
criteria for categorization as at amortised cost
or as FVTOCI, is classified as FVTPL.

Loans, Trade receivables, Security Deposits,
Cash and cash equivalents etc. are classified
for measurement at amortised cost while
investments may fall under any of the
aforesaid classes. However, in respect of
particular investments in equity instruments
that would otherwise be measured at fair
value through profit or loss, an irrevocable
election on an instrument by instrument basis
at initial recognition may be made to present
subsequent changes in fair value through
other comprehensive income. This election
is not permitted if the equity instrument is
held for trading.

Investments in equity instruments at FVTOCI are
initially measured at fair value plus transaction
costs. Subsequently, they are measured at
fair value with gains and losses arising from
changes in fair value recognised in other
comprehensive income and accumulated in a
separate component of equity. The cumulative
gain or loss is not reclassified to profit or loss
on disposal of the equity investments, instead,
it is transferred to retained earnings.

The Company has designated all investments
in equity instruments that are not held for
trading as at FVTOCI on initial recognition
(Refer Note 5).

Other Income:

Interest income is recognised using effective
interest method. Dividend income is accounted
for in the year when the right to receive such
dividend is established and the amount of
dividend can be measured reliably.

impairment: The Company assesses at
each reporting date whether a financial
asset (or a group of financial assets) such as
investments, trade receivables, and security
deposits held at amortised cost and financial
assets that are measured at fair value through
other comprehensive income are tested for
impairment based on evidence or information
that is available without undue cost or

effort. Expected credit losses are assessed
and loss allowances recognised if the credit
quality of the financial asset has deteriorated
significantly since initial recognition. The
impairment requirements do not apply to
equity investments designated at Fair value
through other comprehensive income because
fair value gains and losses, except dividend
income, are permanently recognised in other
comprehensive income without reclassification
to profit or loss.

As a practical expedient, the Company uses
a provision matrix to determine impairment
loss on portfolio of its trade receivables. The
provision matrix is based on its historically
observed default rates over the expected life
of the trade receivables and is adjusted for
forward looking estimates. At every reporting
date, the historically observed default rates
are updated and changes in forward-looking
estimates are analysed.

Reclassification: When and only when the
business model is changed, the Company
shall reclassify all affected financial assets
prospectively from the reclassification date as
subsequently measured at amortised cost, fair
value through other comprehensive income, fair
value through profit or loss without restating
the previously recognised gains, losses or
interest and in terms of the reclassification
principles laid down in the Ind AS relating to
Financial Instruments.

De-recognition: Financial assets are

derecognised when the right to receive cash
flows from the assets has expired, or has been
transferred, and the Company has transferred
substantially all of the risks and rewards of
ownership. Concomitantly, if the asset is one
that is measured at:

(a) amortised cost, the gain or loss
is recognised in the Statement of
Profit and Loss;

(b) fair value through other comprehensive
income, the cumulative fair value
adjustments previously taken to reserves
are reclassified to the Statement of Profit
and Loss unless the asset represents

an equity investment in which case
the cumulative fair value adjustments
previously recognized in other
comprehensive income and accumulated
in the “equity instruments through other
comprehensive income” will not be
reclassified to profit or loss on disposal
of the investments, but is transferred to
retained earnings.

(ii) Financial liabilities

Borrowings, trade payables and other financial
liabilities are initially recognised at the value
of the respective contractual obligations. They
are subsequently measured at amortised cost
using the effective interest method.

The effective interest method is a method of
calculating the amortised cost of a financial
liability and of allocating interest expense over
the relevant period. The effective interest rate is
the rate that exactly discounts estimated future
cash payments through the expected life of
the financial liability, or (where appropriate) a
shorter period, to the net carrying amount on
initial recognition.

Financial liabilities are derecognised when
the liability is extinguished, that is, when the
contractual obligation is discharged, cancelled
and on expiry. The difference between the
carrying amount of the financial liabilities de¬
recognised and the consideration paid and
payable is recognised in the Statement of
Profit and Loss.

Offsetting Financial Instruments

Financial assets and liabilities are offset and the
net amount is included in the Balance Sheet
where there is a legally enforceable right to
offset the recognised amounts and there is an
intention to settle on a net basis or realize the
asset and settle the liability simultaneously.

2.4 Other accounting policies:

(a) Inventories

Inventories are stated at the lower of cost and the
net realisable value after providing for obsolescence
and other losses, where considered necessary. Net
realisable value represents the estimated selling
price in the ordinary course of business, less

estimated costs of completion and the estimated
costs necessary to make the sale. Scrap is carried at
net realisable value. The method of determination of
cost of various categories of inventories is as follows:

(i) Raw materials and bought-out components,
stores and spares and loose tools: Weighted
average cost. Cost includes purchase cost and
other attributable expenses.

(ii) Finished Goods and Work-in-progress:
Weighted average cost of production which
comprises direct material cost, direct wages
and appropriate overheads based on normal
level of activity.

(iii) Stock-in-trade: Weighted average cost.

(b) Investment in subsidiaries:

Investment in subsidiaries are carried out at cost less
accumulated impairment, if any.

(c) Foreign currency transactions and translations

In preparing the financial statements of the
Company, transactions in currencies other than the
entity's functional currency (foreign currencies) are
recognised at the rate of exchange prevailing at the
dates of the transactions. The date of transaction
for the purpose of determining the exchange rate
on initial recognition of the related asset, expense
or income (part of it) is the date on which the entity
initially recognises the non-monetary asset or non¬
monetary liability arising from payment or receipt of
advance consideration. Monetary assets and liabilities
relating to foreign currency transactions remaining
unsettled at the end of each reporting period are
translated at the exchange rates prevailing at that
date. Non-monetary items carried at fair value that are
denominated in foreign currencies are translated at
the rates prevailing at the date when the fair value was
determined. Non-monetary items that are measured
at historical cost in a foreign currency, are translated
using the exchange rate at the date of the transaction.

(d) Government grants

Government grants are recognised when there is
reasonable assurance that the grant will be received,
and the Company will comply with the conditions
attached to the grant.

Government grants related to revenue are recognised
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. Such grants are deducted in reporting
the related expenses. When the grant relates to an
asset, it is recognised as deferred revenue in the
Balance Sheet and transferred to the Statement of
Profit and Loss on a systematic and rational basis
over the useful lives of the related assets.

(e) Employee benefits

(i) Defined contribution plans

The Company's contributions to Provident
Fund (Government administered), Employees'
State Insurance Scheme and Superannuation
Fund (under a scheme of Life Insurance
Corporation of India), considered as defined
contribution plans are charged as an expense
in the Statement of Profit and Loss when the
employees have rendered services entitling
them to the contributions.

(ii) Defined benefit plans

For defined benefit plans in the form of gratuity
fund, administered under a scheme of the Life
Insurance Corporation of India, the cost of
providing benefits is determined using the
projected unit credit method, with actuarial
valuations being carried out at the end of
each reporting period. The defined benefit
obligations recognized in the Balance Sheet
represents the present value of the defined
obligations as reduced by the fair value of
plan assets, if applicable. Re-measurement,
comprising actuarial gains and losses and the
return on plan assets (excluding net interest),
is reflected immediately in the Balance Sheet
with a charge or credit recognised in other
comprehensive income in the period in which
they occur and are not re-classified to the
Statement of Profit and Loss in the subsequent
periods. Past service cost is recognised in profit
or loss in the period of a plan amendment. Net
interest is calculated by applying the discount
rate at the beginning of the period to the net
defined benefit liability or asset.

All expenses represented by current service
cost, past service cost, if any, and net interest
on the defined benefit liability (asset) are
recognized in the Statement of Profit and Loss.

(iii) Short term and other long term employee
benefits

The employees of the Company are entitled
to compensated absences. The employees
can carry forward a portion of the unutilised
accumulating compensated absences and
utilise it in future periods or receive cash at
retirement or termination of employment.
The Company records an obligation for
compensated absences in the period in which
the employee renders the services that increases
this entitlement. The Company measures the
expected cost of compensated absences as the
additional amount that the Company expects
to pay as a result of the unused entitlement that
has accumulated at the end of the reporting
period. The Company recognises accumulated
compensated absences based on actuarial
valuation. Non-accumulating compensated
absences are recognised in the period in which
the absences occur. The Company recognises
actuarial gains and losses immediately in the
Statement of Profit and Loss.

(f) Insurance Claim Receivable

Income from insurance proceeds is recognised when
(i) it is virtually certain that a valid and adequate
insurance policy exists to cover the insured event
entitling the Company to a compensation as per the
terms and conditions of the policy and (ii) when the
amount of compensation expected to be received
for a valid insurance claim made and admitted can
be measured reliably.

(g) Leases

The Company assesses whether a contract contains
a lease, at inception of a contract. 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. To assess whether
a contract conveys the right to control the use of an
identified asset, the Company assesses whether, (i)
the contract involves the use of an identified asset (ii)
the Company has substantially all of the economic
benefits from use of the asset through the period of
the lease and (iii) the Company has the right to direct
the use of the asset.

At the date of commencement of the lease, the
Company recognizes a right-of-use asset ("ROU”)
and a corresponding lease liability for all lease
arrangements in which it is a lessee, except for
leases with a term of twelve months or less (short¬
term leases) and low value leases. For these short¬
term and low value leases, the Company recognizes
the lease payments as an operating expense on a
straight-line basis over the term of the lease.

Certain lease arrangements includes the options to
extend or terminate the lease before the end of the
lease term. ROU assets and lease liabilities includes
these options when it is reasonably certain that they
will be exercised.

The right-of-use assets are initially recognized at
cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or
prior to the commencement date of the lease plus
any initial direct costs less any lease incentives. They
are subsequently measured at cost less accumulated
depreciation and impairment losses.

Right-of-use assets are depreciated from the
commencement date on a straight-line basis over
the shorter of the lease term and useful life of the
underlying asset. Right of use assets 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 Cash Generating Unit (CGU) to
which the asset belongs.

The lease liability is initially measured at amortized
cost at the present value of the future lease
payments. The lease payments are discounted using
the interest rate implicit in the lease or, if not readily
determinable, using the incremental borrowing rates
in the country of domicile of these leases. Lease
liabilities are remeasured with a corresponding
adjustment to the related right of use asset if the
Company changes its assessment if whether it will
exercise an extension or a termination option.

Lease liability and ROU asset have been separately
presented in the Balance Sheet and lease payments
have been classified as financing cash flows.

(h) income Taxes

Income tax expense represents the sum of the tax
currently payable and deferred tax. Current and
deferred tax are recognised in the Statement of Profit
and Loss, except when they relate to items that are
recognised in other comprehensive income or directly
in equity, in which case, the current and deferred tax
are also recognised in other comprehensive income
or directly in equity respectively.

Current Tax

Current tax is measured at the amount expected to
be paid to or recovered from the taxation authorities
based on the taxable profit for the year. Taxable
profit differs from “Profit before tax” as reported in
the Statement of Profit and Loss because of items
of income or expense that are taxable or deductible
in other years and items that are never taxable or
deductible under the Income-tax Act, 1961. The tax
rates and tax laws used to compute the current tax
amount are those that are enacted by the reporting
date and applicable for the period. The Company
offsets current tax assets and current tax liabilities,
where it has a legally enforceable right to set off
the recognized amounts and where it intends either
to settle on a net basis or to realize the asset and
liability simultaneously.

Deferred Tax

Deferred tax is recognised on temporary differences
between the carrying amounts of assets and
liabilities in the financial statements and the
corresponding tax bases used in the computation
of taxable profit. Deferred tax liabilities are generally
recognised for all taxable temporary differences.
Deferred tax assets are generally recognised for all
deductible temporary differences to the extent it is
probable that taxable profits will be available against
which those deductible temporary differences can
be utilised. Such deferred tax assets and liabilities
are not recognised if the temporary difference
arises from the initial recognition (other than in a
business combination) of assets and liabilities in a
transaction that affects neither the taxable profit nor
the accounting profit.

The carrying amount of deferred tax assets is
reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to allow
all or part of such deferred tax assets to be utilised.

Deferred tax assets and liabilities are measured at
the tax rates that are expected to apply in the period
in which the liability is settled or the asset realized,
based on tax rates (and tax laws) that have been
enacted or substantively enacted by the end of the
reporting date. Deferred tax assets and liabilities
are offset when there is a legally enforceable right
to offset the corresponding current tax assets and
liabilities and when the deferred tax balances relate
to the same taxation authority.

(i) Research and development expenses

Revenue expenditure pertaining to research is
charged to the Statement of Profit and Loss.
Development costs of products are also charged to
the Statement of Profit and Loss unless a product's
technical feasibility has been established, in which
case such expenditure is capitalised. The amount
capitalised comprises expenditure that can be
directly attributed or allocated on a reasonable and
consistent basis to creating, producing and making
the asset ready for its intended use. Property,
plant and equipment utilised for research and
development are capitalised and depreciated in
accordance with the policies stated for property,
plant and equipment.

(J) Earnings per share

Basic earnings per share is computed by dividing
profit or loss attributable to equity shareholders
by the weighted average number of equity shares
outstanding during the year.

Diluted earnings per share is determined by
adjusting the profit or loss attributable to equity
shareholders and the weighted average number
of equity shares outstanding for the effects of all
dilutive potential equity shares.

(k) Cash and cash equivalents

Cash and cash equivalents for purposes of cash
flow statement include cash on hand, in banks and
demand deposits with banks, net of outstanding
bank overdrafts that are repayable on demand, book
overdraft and are considered part of the Company's
cash management system.

(l) Exceptional items

An ordinary item of income or expense which by
its size, nature, occurrence or incidence requires
a disclosure in order to improve understanding
of the performance of the Company is treated
as an exceptional item in the Statement of Profit
and Loss account.

(m) Segment reporting

Operating segments are reported in a manner
consistent with the internal reporting provided to
the chief operating decision maker. The Company
has identified Chairman and Managing Director as
chief operating decision maker.

(n) Borrowing costs

Borrowing costs consist of interest and other ancillary
costs that the Company incurs in connection with the
borrowing of funds. All the other borrowing costs are
recognised in the statement of profit and loss within
finance costs of the period in which they are incurred.

(o) Rounding off amounts

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

Notes:

(i) The amount of expenditure recognised in the carrying amount of property, plant and equipment (including capital work-in
progress) in the course of construction is H 17.44 (March 31, 2025: H 8.78) [Refer Note 38].

(ii) Land admeasuring 18.94 acres amounting to H 77.84 is registered in the name of Mangal Industries Limited, erstwhile Company
from which plastic component business was demerged and merged with the Company pursuant to the Scheme of Arrangement
approved by Hon'ble National Company Law Tribunal. The aforementioned land parcel is pending registration in the name
of the Company.

(iii) The amount of contractual commitments for the acquisition of property, plant and equipment is disclosed in Note 31 (ii).

Note:

Leasehold land admeasuring 15.66 acres amounting to H 25.85 is registered in the name of Mangal Industries Limited, erstwhile
Company from which plastic component business was demerged and merged with the Company pursuant to the Scheme of
Arrangement approved by Hon'ble National Company Law Tribunal. The aforementioned lease is pending to be registered in the
name of the Company.

* Amount below H 1 lakh

The recoverable amount of the Lead acid batteries (LAB) business has been estimated using the value-in-use methodology,
which reflects the present value of future cash flows expected to be generated by the CGU. Cash flow projections have
been prepared for a five-year forecast period, with growth assumptions derived from historical performance trends. These
projections are based on the five-year strategic plan duly approved by management. A pre-tax discount rate, derived from the
Company's weighted average cost of capital (WACC), has been applied in the valuation. The impairment assessment has been
carried out considering the following key assumptions:

These investments are not held for trading. Instead, they are held for medium to long-term strategic purposes. Accordingly, the
management of the Company have elected to designate these investments in equity instruments as at FVTOCI as they believe that
recognising short-term fluctuations in these investments' fair value in profit or loss would not be consistent with the Company's
strategy of holding these investments for long-term purposes and realising their performance potential in the long run.

Notes:

i. The Company has granted a loan to Amara Raja Power Systems Limited, a wholly-owned subsidiary, for the purpose of purchase
of capital assets repayment term of two years from the date of respective disbursements carrying an interest rate of 7.25% p.a.

ii. The Company has granted a working capital loan to Amara Raja Power Systems Limited, wholly-owned subsidiary, repayable
on demand and carried an interest of 7.25% p.a.

iii. Following is the disclosure of Additional Regulatory Information with respect to loan given to related parties that are
repayable on demand:

(i) The average credit period for after market sales is one week and for sales to other customers is in the range of 30 - 60 days.
No interest is charged on overdue receivables, except for overdue balances of related parties.

(ii) The Company has used a practical expedient by computing the expected credit loss allowance for doubtful trade receivables
based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward¬
looking estimates. The allowance for expected credit loss is based on the ageing of the receivables which are due and the rates
used in the provision matrix.

(ii) Rights, preferences and restrictions attached to the equity shares:

The Company has only one class of shares referred to as equity shares having a face value of H 1 each. Each holder of equity
share is eligible for one vote per share held. The Company declares and pays dividends in Indian rupees and foreign currency.
The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General
Meeting, except in the case of interim dividend. In the event of liquidation, the holders of equity shares will be entitled to
receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to the number of
equity shares held by the shareholders.

(i) The working capital demand loan has been secured by first charge on current assets of the Company.

(ii) Outstanding loans carry an interest rate ranging from 5.42% to 6.72% p.a.

(iii) The interest free sales tax deferment loans were availed by the Company under the Government of Andhra Pradesh TARGET
2000 New Industrial Policy as per which the loans are repayable at the end of the 14th year from the year in which these loans
were availed. The Company has also entered into agreements with the Deputy Commissioner of Commercial Taxes, Chittoor
in respect of the aforementioned loans as per which the repayment schedule of the loans have been determined as being
repayable at the end of the 14th year from the month in which these loans were availed. The Management is however of the
view that these loans are repayable at the end of the 14th year from the year in which these loans were availed in terms of the
sanction of these loans by the Government of Andhra Pradesh, Commissionerate of Industries and are accordingly making an
yearly repayment of these loans.

(iv) Represents commercial credit card facility for payment of direct and indirect taxes with a credit period of 50 days.

The tax rate used for the year 2025-26 and 2024-25 reconciliations above is the corporate tax rate of 25.168% payable by
corporate entities in India on taxable profits under the Indian tax law.

Note 30: Exceptional items

a. insurance claim

On January 30, 2023, a fire broke out at one of the manufacturing facilities of the Company at Chittoor, Andhra Pradesh which
caused damage to the Company's property, plant and equipment and inventories. There were no loss of lives. The Company
recognised a loss of H 438.56 crores arising from such incident and the said losses and the corresponding credit arising from
the insurance claim receivable were presented on a net basis during the year ended March 31, 2023. During the year ended
March 31, 2026, the Company had received an amount of H 186.72 crores from insurance company as full and final settlement
payment towards the insurance claim pertaining to reinstatement of property, plant and equipment lodged on account of
damage to its assets due to the fire accident at its manufacturing facility in Chittoor on January 30, 2023. An amount of H 181.15
crores representing difference between the amount received and the insurance claim receivable recognised in books, has been
recognised as exceptional item in the Statement of Profit and Loss for the year ended March 31, 2026.

In addition to the above, the Company has also received an amount of H 121.79 crores in respect to the 'Business interruption
claim' and the same is presented under exceptional items in the Statement of Profit and Loss.

b. Wage code:

On November 21, 2025, the Government of India notified provisions of 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,
('Labour Codes') which consolidate twenty-nine existing labour laws into a unified framework governing employee benefits
during employment and post-employment.

Based on the draft rules and FAQs issued by the ministry of labour and employment and best available information, the
Company has assessed the implications of Labour Codes which has resulted in increase in gratuity liability arising out of past
service cost by H 43.80 crore. Considering the impact arising out of an enactment of the new legislation is an event of non¬
recurring nature, the Company has presented the incremental impact as an “Exceptional Item” for the year ended March 31,
2026. The Company continues to monitor the finalisation of central/state rules and other developments pertaining to labour
codes and would provide appropriate accounting effect based on the developments, if any.

Includes an amount of H 10.54 crores (March 31, 2025: H 10.54 crores) which has been claimed by Andhra Pradesh Gas Power
Corporation Limited ('APGPCL') with respect to the power supplied by it to the Company through Andhra Pradesh Southern
Power Distribution Corporation Limited ('APSPDCL'). The Management has contended that the said dues charged by APSPDCL
as part of the regular electricity bills has been duly discharged by the Company to APSPDCL.

APGPCL has also consequently placed a lien on the investment held by the Company in it for non-payment of dues. The
Management has initiated arbitration proceedings against the claim and the said action of APGPCL and is confident of a
favourable outcome in this matter.

b. Defined benefit plans

The Company provides to the eligible employees defined benefit plans in the form of gratuity. The gratuity plan provides for
a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of
an amount equivalent to 15 days' salary payable for each completed year of service. Vesting occurs upon completion of five
continuous years of service. The measurement date used for determining retirement benefits for gratuity is March 31.

These plans typically expose the Company to actuarial risks such as investment risk, interest rate risk, longevity risk and salary risk.

Risk Management:

investment risk - The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

interest rate risk - The present value of the defined benefit plan liability is calculated using a discount rate determined by
reference to market yields at the end of the reporting period on government bonds. A decrease in yields will increase the fund
liabilities and vice-versa.

Longevity risk - The present value of defined benefit plan liability is calculated by reference to the best estimate of the
mortality of plan participants both during and after employment. An increase in the life expectancy of the plan participants will
increase the plan's liability.

Salary risk - The present value of the defined benefit plan is calculated with reference to the future salaries of participants
under the plan. Increase in salary due to adverse inflationary pressures might lead to higher liabilities.

(i) Balance Sheet

The assets, liabilities and surplus / (deficit) position of the defined benefit plans at the Balance Sheet date were:

Note 37: Leases

(i) The Company's leased asset primarily consist of leases for land and buildings for factory premises, warehouses and branch
offices having various lease terms. The Company also has certain leases with lease term of 12 months or less. The Company
applies the 'short-term lease' recognition exemption for these leases. Payment made towards leases of low value assets are
recognised in the Statement of Profit and Loss as rent expense over the tenure of such leases.

Note 41: Details of Provisions

(a) Provision for warranty:

(i) Provision for warranty is made for estimated warranty claims in respect of sale of certain storage batteries which are
still under warranty at the end of the reporting period, the estimated cost of which is accrued at the time of sale.
These claims are expected to be settled as and when warranty claims arise. The provision for warranty claims represents
the present value of the Management's best estimate of the future outflow of economic benefits that will be required
under the Company's obligation for warranties. Management estimates the provision based on historical warranty claim
information and may vary as a result of new materials, altered manufacturing processes or other events affecting product
quality. The products are generally covered under a free warranty period ranging from 6 months to 42 months.

(b) Provision for Extended producer responsibilities:

(i) The provision for Extended Producer Liabilities represents the estimated obligation towards compliance with the Extended
Producer Responsibility (EPR) requirements under the Battery Waste Management Rules, 2022. The obligation has been
determined based on the estimated cost of procuring EPR certificates corresponding to the target dry weight of batteries
placed in the market, net of the expected EPR certificates to be generated through collection and recycling of waste
batteries. The Company expects to fulfil its Extended Producer Responsibility (EPR) obligations for the next financial year
through anticipated collections, net of EPR certificates available for compliance. Accordingly, the related provision has
been classified as a non-current liability.

Note 42: Financial instruments and related disclosures

A. Capital Management

The Company's capital management objective is to safeguard its ability to continue as going concern and support its strategic
priorities. It aims to provide adequate capital to its businesses for growth and creation of sustainable stakeholder value
through an optimum mix of debt and equity within the overall capital structure.

The capital structure of the Company is based on Management's judgment of its strategic capital requirements with a focus on
gearing ratio. Gearing ratio is net debt divided by total equity. Net debt includes interest bearing loans and borrowings, less
cash and bank balances.

C. Financial risk management objectives

The Company has a system-based approach to risk management, anchored to policies and procedures and internal financial
controls aimed at ensuring early identification, evaluation and management of key financial risks (such as market risk, foreign
currency risk, credit risk and liquidity risk) that may arise as a consequence of its business operations as well as its investing
and financing activities. Accordingly, the Company's risk management framework has the objective of ensuring that such risks
are managed within acceptable and approved risk parameters in a disciplined and consistent manner and in compliance with
applicable regulation. It also seeks to drive accountability in this regard. The key risks and mitigating actions are overseen by
the Board of Directors of the Company.

Liquidity Risk

The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due. Cash flow from operating activities provides the funds to service the financial liabilities on a day to day
basis. The Company regularly maintains the rolling forecasts to ensure it has sufficient cash on an on-going basis to meet
operational needs.

The Company's current assets aggregate H 3,831.35 (March 31, 2025 H 3,571.36) including Current investments, Cash and cash
equivalents and Other bank balances of H 115.37 (March 31, 2025 H 227.76) against an aggregate current liability of H 2,443.20
(March 31, 2025 H 2,200.34).

Further, while the Company's total equity stands at H 8,160.75 (March 31, 2025: H 7,378.27), it has borrowings of H 271.46 (March
31, 2025: H 144.52). In such circumstances, liquidity risk or the risk that the Company may not be able to settle or meet its
obligations as they become due does not exist.

Maturity profile of financial liabilities:

The table below provides the details regarding the remaining contractual maturities of financial liabilities at the reporting date
based on contractual undiscounted payments:

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 risks: interest rate risk, currency risk and other price risk. Financial instruments
affected by market risk include borrowings, investments, trade payables, trade receivables and derivative financial instruments.

i) Securities price risk

The Company continues to hold certain investments in equity for long term value accretion which are accordingly
measured at fair value through Other Comprehensive Income. The value of investments in such equity and preference
share instruments as at March 31, 2026 is H 351.91 (March 31, 2025 H 351.90). Accordingly, fair value fluctuations arising
from market volatility is recognised in Other Comprehensive Income.

ii) Interest rate risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market
interest rates. Since, the Company has insignificant interest bearing borrowings, the exposure to risk of changes in
market interest rates is minimal. Further, treasury activities, focused on managing current investments are administered
under a set of approved policies and procedures guided by the tenets of liquidity, safety and returns. This ensures
that investments are only made within acceptable risk parameters after due evaluation. However, given the relatively
short tenure of underlying portfolio of the Mutual Fund schemes in which the Company has invested, such price risk is
not significant. Fixed deposits are held with highly rated banks and have a short tenure and are not subject to interest
rate volatility.

iii) Commodity price risk

Material cost is the largest cost component for the Company, thus exposing it to the risk of price fluctuations based on
the supply and demand conditions of those materials. Commodity price risk exposure is evaluated and managed through
operating procedures and sourcing policies. The Company has put in place a mix of long-term and short-term mitigation
plans. The long-term price view consisted of identifying single vendor dependency and finding alternate vendors and
sources for the same. The Company also has a robust process of estimating the prices periodically, analyzing deviations,
if any, and taking short-term corrective measures in addition to altering the outlook for the long-term, if required. The
Company also leverages its financial resources to modify the inventory levels as required keeping in mind the price
outlook in the near term. Similarly, the Company modifies the contract period in negotiations with the vendors to either
lock in prices or link them to expected market prices. During the year ended March 31, 2026 and March 31, 2025, the
Company had not entered into any derivative contracts to hedge exposure to fluctuations in commodity prices.

iv) Foreign currency risk

The Company is subject to the risk that changes in foreign currency values impact the Company's export revenues and
import of raw materials and property, plant and equipment. The Company is exposed to foreign exchange risk arising
from currency exposures, primarily with respect to US Dollars, EURO and GBP. Financial assets and liabilities denominated
in foreign currency, are also subject to reinstatement risk.

The Company manages currency exposures within prescribed limits. The aim of the Company's approach to management
of currency risk is to leave the Company with no material residual risk.

The carrying amounts of foreign currency denominated monetary financial assets and liabilities are as follows:

Foreign currency sensitivity analysis

For every percentage point increase in the underlying exchange rate of the outstanding foreign currency denominated
assets and liabilities, holding all other variables constant, the profit before tax for the year ended March 31, 2026 would
change by H 0.41 [March 31, 2025: H 1.24]. For every percentage point decrease in the underlying exchange rate would
have led to an equal but opposite effect.

The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their
translation at the year-end for a 1% change in foreign currency rates.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counter-party fails to meet its contractual obligation.
Concentration of credit risk with respect to trade receivables are limited, due to Company's customer base being large and
diverse. All trade receivables are reviewed and assessed for default on a monthly basis. The Company's historical experience of
collecting receivables and the level of default indicate that credit risk is low and generally uniform across markets; consequently,
trade receivables are considered to be a single class of financial assets. All overdue customer balances are evaluated taking
into account the age of the dues, specific credit circumstances, the track record of the counterparty etc. loss allowances and
impairment is recognised, where considered appropriate by responsible management.

The credit risk on cash and bank balances and fixed deposits is limited because the counterparties are banks with high
credit ratings.

D. Fair value measurement
Fair value hierarchy

The fair value of financial instruments as referred to in Note 42.B above have been classified into three categories depending
on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for
identified assets or liabilities [Level 1 measurements] and lowest priority to unobservable inputs [Level 3 measurements]

The following levels have been used for classification:

• Level 1: Quoted prices (unadjusted) for identical instruments in active market.

• Level 2: Directly or indirectly observable market inputs, other than Level 1 inputs

• Level 3: Inputs which are not based on observable market data.

If one or more of the significant inputs is not based on observable market data, the fair value is determined using generally
accepted pricing models based on a discounted cash flow analysis, with the most significant inputs being the discount rate
that reflects the credit risk of counterparty.

The fair value of trade receivables, trade payables and other current financial assets and liabilities is considered to be equal
to the carrying amounts of these items due to their short-term nature. Where such items are non-current in nature, the same
has been classified as Level 3 and fair value determined using discounted cash flow basis. Similarly for certain unquoted equity
instruments where most recent information to measure fair value is insufficient, or if there is a wide range of possible fair value
measurements, cost has been considered as the best estimate of fair value.

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

There has been no change in the valuation methodology for Level 3 inputs during the year. The Company has classified certain
unquoted equity instruments under Level 3 of the fair value hierarchy. There were no transfers between Level 1 and Level 2
during the year.

Notes:

(i) The performance of investments in unquoted shares of Andhra Pradesh Gas Power Corporation Limited along with the
relevant economic and market indicators, supply chain challenges and closure of power plants resulted in diminution in
the fair value of the investment. Accordingly, the Company had determined the fair value of the Investment as H Nil in the
previous years. There has been no change in these factors during the current year.

(ii) During the previous year, based on a valuation carried out and available market information, the Company determined
the fair value of its investment in the equity shares and preference shares of Log 9 Materials Scientific Private Limited
('Log 9') at H Nil, owing to challenges faced by Log 9 in its business operations from unfavourable economic conditions,
operational disruptions and financial distress and accordingly, the resultant change in fair value in other comprehensive
income. During the current year, certain creditors of Log 9 have filed insolvency petitions against Log 9 under the
applicable insolvency laws, and the insolvency proceedings in respect of Log 9 are currently in progress. There has
been no change in the fair value determined earlier and, based on the current status of the proceedings and available
information, no favourable developments or recovery indicators have been observed as of date.

(iii) During the previous financial year, the Company as part of its strategic initiatives has made an additional investment of
H 178.94 in Inobat AS ('Inobat'). The investment was recorded at transaction cost and irrevocably designated at fair value
through other comprehensive income ('FVTOCI'). No fair value change was recorded as at March 31, 2026.

Interim dividend of H 5.40 per equity share of face value of H 1 each approved by the Board of Directors at its meeting held on
November 06, 2025 was paid during the current year. The Board of Directors at its meeting held on May 25, 2026 has recommended
a dividend of H 5.20 per equity share of face value of H 1 each which is subject to approval of the shareholders at the ensuing Annual
General Meeting of the Company and hence is not recognized as a liability. The total dividend (including interim dividend) for FY
2025-26 amounts to H 10.60 per equity share (Previous year H 10.50 per equity share).

Note 46:

The Company on April 30, 2021 received closure orders from the Andhra Pradesh Pollution Control Board ('APPCB') for the Company's
plants situated at Karakambadi, Tirupati and Nunegundlapalli Village, Chittoor District. Consequently, the Company went in appeal
against the said orders to the Hon'ble High Court of Andhra Pradesh at Amaravati, which granted interim suspension of the closure
orders. The plants of the Company were closed for a period of 5 days during the quarter ended June 30, 2021, from the date of
closure orders till the date of the said interim suspension. The Company did not incur any material loss during the period of closure.

APPCB also issued two show cause notices in February, 2022 against which the Company filed a special leave petition with the
Hon'ble Supreme Court which vide its order dated February 20, 2023 disposed off the matter for it to be heard at the lower courts
and the same is pending disposal.

The Management has also been working with the APPCB to satisfactorily resolve the matter.

Note 47: The standalone financial statements are approved for issue by the Audit Committee and Board of Directors at their
meetings held on May 25, 2026.