1.14 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 an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material,
provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability.
When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

In respect of warranty on sale of engines, the estimated cost of warranty is accrued at the time of sale. The estimate for
accounting of warranty is periodically reviewed and revisions are made as and when required.

1.15 Use of estimates and judgments

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

Depreciation / amortisation and useful lives of property plant and equipment/ intangible assets:

Property, plant and equipment / intangible assets are depreciated / amortised over their estimated useful lives, after
taking into account estimated residual value. Management reviews the estimated useful lives and residual values of the
assets annually in order to determine the amount of depreciation / amortisation to be recorded during any reporting
period. The useful lives and residual values are based on the Company's historical experience with similar assets and
take into account anticipated technological changes. The depreciation / amortisation for future periods is revised if there
are significant changes from previous estimates.

Fair value measurement of financial instruments

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year. The Company based its assumptions and estimates on parameters available when the financial statements
were prepared. Existing circumstances and assumptions about future developments, however, may change due to
market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the
assumptions when they occur.

Provision for product warranty

The Company recognizes provision for product warranties in respect of its products that it sells. Provisions are discounted,
where necessary to its present value based on the best estimate required to settle the obligation at the balance sheet
date. These are reviewed at each balance sheet date and adjust to reflect the current best estimates.

1.16 Earnings per share

Basic EPS is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted
average number of equity shares outstanding during the year. Diluted EPS is computed using the weighted average
number of equity and dilutive equity equivalent shares outstanding during the year.

1.17 Cash and cash equivalents

Cash and cash equivalents includes cash in hand and deposits with any qualifying financial institution repayable on
demand or maturing within three months from the date of acquisition and which are subject to an insignificant risk of
change in value.

1.18 Leases

The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS116. The Company
uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate
which is generally based on the interest rate specific to the lease being evaluated or if that cannot be easily determined
the incremental borrowing rate for similar term is used.

The Company recognises the lease payments associated with these leases as per expense on a straight-line basis over
the lease term.

The Company as a lessee

The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use
asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease
payment made at or before the commencement date, plus any initial direct costs incurred and restoration cost, less any
lease incentives received.

The right-of-use assets are subsequently depreciated over the shorter of the asset's useful life and the lease term on a
straight-line basis. In addition, the right-of-use asset is reduced by impairment losses, if any.

The lease liability is initially measured at amortised cost at the present value of the future lease payments.

1.19 Accounting Policies not specifically referred above are consistent with generally accepted Accounting practices.

(iv) Employee Stock Option

Under the Employee Stock Option Scheme - 2015 (ESOS-2015), 31,000 Equity Shares of the face value of Rs. 10/- are
available for being granted to eligible employees on the recommendation of the Nomination and Remuneration Committee.
Under the first cycle (Dec. 2015 - Dec. 2019), options granted were vested in four instalments on the expiry of 18 months, 30
months, 42 months and 54 months respectively. Options granted effective January 2020 & onwards are vested in 3 instalments
on the expiry of 12 months, 24 months and 36 months. These options may be exercised on any day over a period of 5 years
from the date of vesting. Numbers of vested options are exercisable subject to minimum of 50 or number of options vested
whichever is lower.

Further to grant given till previous financial years, the Company during the current financial year has given grant of 652 Equity
Shares at face value to the eligible employees.

Supplier Finance Arrangement

Some of our suppliers elect to factor some of their receivables from the company with financial institutions. In such cases, we
provide suppliers and/or banks with visibility of invoices approved for payment, which helps them receive cash from the bank/
financial institutions before the invoice due date, if they choose to do so. Payment dates and terms for the company do not vary
based on whether the supplier chooses to factor their receivable.

Capital management

Company's capital management objectives are to:

- ensure the company's ability to continue as a going concern

- provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.

For the purposes of the Company's Capital Management, capital includes issued capital and all other equity reserves. Company
manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of
the financial covenants.

Financial Risk Management Framework

Company's activities expose it to financial risks viz credit risk and liquidity risk.

Credit Risk

Majority of Company's receivables pertain to Mahindra & Mahindra Limited, a holding company. Based on the overall credit¬
worthiness of Receivables, coupled with their past track record, Company expect No / Minimum Risk with regard to its
outstanding receivables. Also, there is mechanism in place to periodically track the outstanding amount and assess the same
with regard to its realisation. Company expect all the debtors to be realised in full, accordingly no provision has been made in
the books of account.

Credit risk on cash and cash equivalents is limited as Company generally invest in deposits with banks, high rating financial
institutions & debt based Mutual Funds. Ratings are monitored periodically for re-adjustment of Portfolio , if any required.
Investment as on date of financial statement are as per latest available ratings.

Liquidity Risk

(i) Liquidity Risk Management

The Company manages liquidity risk by maintaining adequate reserves, banking facilities and by continuously monitoring
forecast & actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

(ii) Maturities of Financial Liabilities

The following table specifies the Company’s remaining contractual maturity for its non-derivative financial liabilities with
agreed repayment periods. The amounts disclosed in the table have been drawn up based on the earliest date on which
the Company can be required to pay. Financial Liabilities includes Trade Payables, Capital Purchases, Unpaid/Unclaimed
Dividend etc. which are in the normal course of business having maturity plan of less than 1 year and lease liabilities
having maturity of more than 1 year.

2.28 FAIR VALUE MEASUREMENT

The fair values of the Financial Assets and Liabilities are included in 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 Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation
technique

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

Level 2 - Other T echniques for which all inputs which have a significant effect on the recorded fair value are observable, either
directly or indirectly.

Level 3 - Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable
market data.

*Assessment of Income Tax is complete upto Assessment Year 2020-21. There is no demand which is disputed in Appeal and
not provided for. For earlier Assessment Years, Company have filed appeals / references which involves an estimated liability
of Rs. 50.43 Lakhs (31.03.2025 - Rs. 50.43 Lakhs)

2.32 SEGMENT REPORTING

The Company is primarily engaged in the business of diesel engines, diesel engine components and spare parts. As the basic
nature of these activities are governed by the same set of risk, returns and internal business reporting system, accordingly
these have been grouped as single segment in above disclosures as per Ind AS- 108 dealing with "Operating Segment".

2.33 PARTICULARS IN RESPECT OF GOODS MANUFACTURED :2.37 DIVIDENDS

The Board of Directors, in their meeting held on 16th April, 2025, proposed a total dividend of Rs. 104.50/- per equity share and
the same was approved by the shareholders at the Annual General Meeting held on 15th July, 2025, this has resulted in a cash
outflow of Rs. 12694.10 lakhs during 2025-26.

The Board of Directors, in their meeting held on 13th April, 2026, proposed a total dividend of Rs. 110/- per equity share for the
financial year ended on 31st March 2026, subject to the approval of shareholders at the Annual General Meeting and if
approved, would result in a cash outflow of approximately Rs. 13364.85 lakhs.

2.38 Recent Accounting Pronouncements
Standard issued but not yet effective

Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies (Indian
Accounting Standards) Rules as issued from time to time. As at the date of authorisation of these financial statements, the
Company has not applied the following new amendment to Ind AS that has been issued but is not yet effective:

Amendment to Ind AS 1 Presentation of Financial Statements

Where a covenant breach exists on or before the reporting date and, as a result, the liability becomes payable on demand on
that date, the liability must be classified as current, even if the lender subsequently (i.e. after the reporting date but before
approval of the financial statements) agrees not to demand payment.

The Company does not expect that the adoption of this amendment to have any impact on the financial statements of the
Company in future periods.

2.39 New Labour Codes Laws

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 (collectively “new Labour Codes”) - consolidating 29 existing labour laws.

In accordance with the new Labour Codes, the Company has currently estimated the incremental impact on retiral benefits to
be Rs. 340.51 lakhs. This has been presented under “Exceptional Items” in the financial statement.

The Company continues to monitor developments on the Rules to be notified by regulatory authorities, including clarifications/
additional guidance from authorities and will continue to assess the accounting implications, basis such developments /
guidance.

2.40 Other Disclosures

Additional regulatory information pursuant to the requirement in Division 11 of Schedule III to the Companies Act 2013.

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

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

c. The Company has not revalued its property, plant and equipment or intangible assets or both during the current year.

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

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

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

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

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

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

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

g. The Company has not 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.

h. The Company does not have any borrowings from banks and financial institutions on the basis of security of current
assets.

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

j. The Company has complied with the number of layers prescribed under the Companies Act, 2013.