3.13. Provisions and contingent liability

Provisions are recognized when the Company has
a present obligation as a result of a past event that
it is probable will result in an outflow of economic
benefits that can be reasonably estimated.

The amount recognized 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 (when the effect of the time value of money
is material).

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 recognize a contingent liability but discloses
its existence in the financial statements.

Provisions, contingent liabilities are reviewed at
each Balance Sheet date.

3.14. Investment in subsidiaries

A subsidiary is an entity that is controlled by
another entity. Investment in its subsidiary are
carried at cost less impairment, if any.

The Company reviews its carrying value of
investments carried at cost annually, or more
frequently when there is indication for impairment.
If the recoverable amount is less than its carrying
amount, the impairment loss is recorded in the
Statement of Profit and Loss.

When an impairment loss subsequently reverses,
the carrying amount of the Investment is
increased to the revised estimate of its
recoverable amount, so that the increased
carrying amount does not exceed the cost of the
Investment. A reversal of an impairment loss is
recognised immediately in Statement of Profit or
Loss.

3.15. Financial instruments

Financial instruments are recognised when the
Company becomes a party to the contract that
gives rise to financial assets and financial
liabilities. All financial assets and liabilities are
recognized at fair value on initial recognition,
except for trade receivables which are initially
measured at transaction price. Transaction costs
that are directly attributable to the acquisition or
issue of financial assets and financial liabilities,
which are not at fair value through profit or loss,
are added to the fair value on initial recognition.
Purchases or sales of financial assets that require
delivery of assets within a time frame established
by regulation or convention in the marketplace

(regular way trades) are recognised on the trade
date, i.e., the date that the Company commits to
purchase or sell the asset.

Subsequent measurement

Financial Assets

Financial assets at amortised cost

A 'financial asset' is measured at the amortised
cost if both the following conditions are met:

a) The asset is held within a business model
whose objective is to hold assets for
collecting contractual cash flows, and

b) Contractual terms of the asset give rise on
specified dates to cash flows that are solely
payments of principal and interest (SPPI) on
the principal amount outstanding.

This category is the most relevant to the Company.
After initial measurement, such financial assets
are subsequently measured at amortised cost
using the effective interest rate (EIR) method.
Amortised cost is calculated by taking into
account any discount or premium on acquisition
and fees or costs that are an integral part of the
EIR. The EIR amortisation is included in finance
income in the profit or loss. The losses arising from
impairment are recognised in the profit or loss. The
Company's financial assets at amortised cost
includes loans, trade receivables, cash and cash
equivalents, bank balance other than cash and
cash equivalent and security deposits included
under other financial assets.

Financial assets at fair value through OCI (FVTOCI)

A financial asset is subsequently measured at fair
value through other comprehensive income if it is
held within a business model whose objective is
achieved by both collecting contractual cash
flows and selling financial assets and the
contractual terms of the financial asset give rise
on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss
are carried in the balance sheet at fair value with
net changes in fair value recognised in the

statement of profit and loss.

Impairment of financial assets

For trade receivables, the Company applies a
simplified approach in calculating ECLs.
Therefore, the Company does not track changes
in credit risk, but instead recognises a loss
allowance based on lifetime ECLs at each
reporting date.

The Company recognises an allowance for
expected credit losses (ECLs) for all debt
instruments not held at fair value through profit or
loss. ECLs are based on the difference between
the contractual cash flows due in accordance with
the contract and all the cash flows that the
Company expects to receive, discounted at an
approximation of the original effective interest
rate. The expected cash flows will include cash
flows from the sale of collateral held or other credit
enhancements that are integral to the contractual
terms.

The amount of ECLs (or reversal) that is required to
adjust the loss allowance at the reporting date to
the amount that is required to be recorded is
recognized as an impairment loss or gain in
statement of profit and loss.

Financial liabilities

Financial liabilities at amortised cost

This is the category most relevant to the Company.
After initial recognition, such financial liabilities
are subsequently measured at amortised cost
using the EIR method. Gains and losses are
recognised in profit or loss when the liabilities are
derecognised as well as through the EIR
amortisation process. The Company's financial
liabilities at amortised cost includes lease
liabilities, trade payables and employee payables
included under other financial liabilities.

Derecognition of financial instruments

The Company derecognizes a financial asset
when the contractual rights to the cash flows from
the financial asset expire or it transfers the
financial asset and the transfer qualifies for
derecognition under Ind AS 109. A financial liability
is derecognised when the obligation under the
liability is discharged or cancelled or expires.
When an existing financial liability is replaced by

another from the same lender on substantially
different terms, or the terms of an existing liability
are substantially modified, such an exchange or
modification is treated as the derecognition of the
original liability and the recognition of a new
liability. The difference in the respective carrying
amounts is recognised in the statement of profit
and loss.

3.16. Cash flow statement

Cash flows are reported using the indirect
method, whereby profit / (loss) before
extraordinary items and tax is adjusted for the
effects of transactions of non-cash nature and
any deferrals or accruals of past or future cash
receipts or payments. The cash flows from
operating, investing and financing activities of the
Company are segregated based on the available
information.

Cash for the purpose of cash flow statement
comprises cash on hand and demand deposits
with banks. Cash equivalents are short term (with
an original maturity of three months or less from
the date of acquisition), highly liquid investments
that are readily convertible into known amounts of
cash and which are subject to insignificant risk of
changes in value.

3.17. 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. 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.

3.18. Segment reporting

Operating segments are components of the
Company whose operating results are regularly
reviewed by the Chief Operating Decision Maker
(CODM) to make decisions about resources to be
allocated to the segment and assess its
performance and for which discrete financial
information is available.

Manufacturing and selling of foundry machinery
and machinery parts is identified as single

operating segment for the purpose of making
decision on allocation of resources and assessing
its performance (refer note 40).

3.19. Earnings per share

Basic earnings per share is computed by dividing
the profit / (loss) after tax by the weighted average
number of equity shares outstanding during the
year. Diluted earnings per share is computed by
dividing the profit / (loss ) after tax as adjusted for
dividend, interest and other charges to expense
or income relating to the dilutive potential equity
shares, by the weighted average number of equity
shares which could have been issued on the
conversion of all dilutive potential equity shares.
Potential equity shares are deemed to be dilutive
only if their conversion to equity shares would
decrease the net profit/(loss) per share.

3.20. Events after the reporting period

If the Company receives information after the
reporting period, but prior to the date of approved
for issue, about conditions that existed at the end
of the reporting period, it will assess whether the
information affects the amounts that it
recognises in its standalone financial statements.
The Company will adjust the amounts recognised
in its standalone financial statements to reflect
any adjusting events after the reporting period
and update the disclosures that relate to those
conditions in light of the new information. For non¬
adjusting events after the reporting period, the
Company will not change the amounts recognised
in its standalone financial statements but will
disclose the nature of the non-adjusting event
and an estimate of its financial effect, or a
statement that such an estimate cannot be made,
if applicable.

3.21. Changes in accounting policies and dis¬
closuresNew and amended standards.

The Company applied for the first-time certain
standards and amendments, which are effective
for annual periods beginning on or after 1 April
2025. The Company has not early adopted any
standard, interpretation or amendment that has
been issued but is not yet effective.

(i) Am e nd m e nt s to Ind AS 21 - Lack ofexchangeability

The Ministry of Corporate Affairs (MCA) notified
the Companies (Indian Accounting Standards)
Amendment Rules, 2025, which amend 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 flows.

The amendments are effective for annual
reporting periods beginning on or after 1 April
2025. When applying the amendments, an entity
cannot restate comparative information. The
amendments do not have an impact on the
Company’s standalone financial statements.

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

In August 2025, 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 are effective for annual
reporting periods beginning on or after 1 April 2025
retrospectively in accordance with Ind AS 8. The
amendments does not have any impact on the
classification of Company’s liabilities.

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

In August 2025, the 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.

The amendments had no impact on the Company’s
standalone financial statements as the Company
does not have any supplier finance arrangements.

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

In August 2025, 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
standalone financial statements as the Company
is not in scope of the Pillar Two model rules.

3.22. 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, such as new
climate-related legislation. The items and
considerations that are most directly impacted by
climate-related matters are:

•Useful life of property, plant and equipment.
When reviewing the residual values and expected
useful lives of assets, the Company considers
climate-related matters, such as climate-related
legislation and regulations that may restrict the
use of assets or require significant capital
expenditures.

•Impairment of non-financial assets. The value-in¬
use may be impacted in several different ways by
transition risk in particular, such as climate-
related legislation and regulations and changes
in demand for the Company's products.

3.23. Standards notified but not yet effective.

There are no standards that are notified and not
yet effective as on the date.

* First equitable mortgage on immovable property being land and building situated at Tumkur has been offered

as security for the purpose of overdraft facility.

(i) On transition to Ind AS (i.e. April 01, 2016), the Company has elected to continue with the carrying value of
all Property, plant and equipment measured as per the previous GAAP and use that carrying value as the
deemed cost of Property, plant and equipment.

(ii) The freehold land and factory building at Hosakote is currently vacant and is not used for its own business
operations, accordingly the aforesaid land and building has been transferred to Investment Properties
during the year ended March 31, 2025, refer note 5.

(iii) The title deeds of all the immovable properties (other than properties where the Company is the lessee
and the lease agreements are duly executed in favour of the lessee) are held in the name of the Company.

Fair value of the Company's investment property :

The Company’s investment property consists of three office spaces located at Pune, Kolkata and New Delhi,
a freehold land and a factory building located in Hosakote Industrial area, Karnataka. The Management has
determined that the investments property consists of two classes of asset, “Freehold Land" and “Building
(which includes three office spaces and a factory building)" based on nature, characteristics and risks of
each property.

As at March 31, 2026, the fair values of three office spaces are Rs. 63.5 Million (March 31, 2025 : Rs.60.8
Million), a factory building Rs. 60.1 Million (March 31, 2025 : Rs.56.4 Million) and a freehold land Rs. 317.6 Million
(March 31, 2025 : Rs.260.0 Million). Fair valuation of Investment Properties as at March 31, 2026 has been
arrived at on the basis of valuation carried out by an independent valuers not related to the Company. The
valuers are registered with the authority which governs the valuers in India, and in the opinion of the
Management, valuer has appropriate qualifications and relevant experience in valuation of properties.

Fair value hierarchy disclosures for investment properties have been provided in Note 37.

The Company has no restrictions on the realisability of its investment properties and no contractual
obligations to purchase, construct or develop investment properties or for repairs, maintenance and
enhancements.

The aforesaid freehold land and factory building is currently vacant. The Company is not using this vacant
freehold land and factory building for its own use. The Company has held the Freehold Land and Building for
undetermined future use, hence, the property is treated as Investment Properties.

17 NATURE AND PURPOSE OF RESERVES

Retained earnings

Retained earnings are the profits/(loss) that the Company has earned/incurred till date, less any transfers
to general reserve, dividends or other distributions paid to shareholders. Retained earnings include re¬
measurement loss / (gain) on defined benefit plans, net of taxes that will not be reclassified to Statement of
Profit and Loss.

Capital Redemption Reserve

During the year ended March 31, 2017, the Company had concluded the buyback of 56,000 fully paid equity
shares as approved by the board of directors on August 12, 2016 at a price of Rs. 4,800/- per share amounting
to Rs. 268.8 Million. Further Capital Redemption reserve of Rs 0.6 Million has been created as an
apportionment from retained earnings. Consequent to the buyback, share capital has reduced by Rs. 0.6
Million

Capital reserve

Any profit or loss on purchase, sale, issue or cancellation of the Company’s own equity instruments is
transferred to capital reserve.

(a) Trade receivables are non-interest bearing and are generally on terms of 30 to 60 days. During the
year ended, March 31, 2026, Rs 5.3 Million (March 31, 2025: Rs 0.6 million) was recognised as
provision for expected credit losses on trade receivables.

(b) Advances from customers include short-term advances received to deliver machinery equipment’s,
and loyalty points not yet redeemed.

The amount of revenue recognised in the current year of Rs 680.2 Million (March 31, 2025: Rs 822.1
Million) that was included in the opening advance from customer balance towards unsatisfied
performance obligation.

(vi) Performance obligation

Information about the Company’s performance obligations are summarised below:

Sale of manufactured machinery

The performance obligation is satisfied upon dispatch of the machines or sub-machines (part of larger
machineries) and payment is generally collected in advance.

In some contracts, supervision services for erection and commissioning are agreed to be provided to
customers as a part of sale of manufactured machinery. The supervision services are accounted for as a
separate performance obligation and a portion of the transaction price is allocated. The performance
obligation for the supervision services is satisfied over one-year based on time elapsed.

Sale of traded and manufactured parts of machinery

The performance obligation is satisfied upon delivery of the spare parts and payment is generally due
within 30 to 60 days from delivery.

Customers are entitled to loyalty discounts which results in allocation of a portion of the transaction
price to the loyalty discounts. Revenue is recognised when the loyalty discount is redeemed.

In addition, the Company updates its estimates of the loyalty discount that will be redeemed on a
quarterly basis and any adjustments to the contract liability balance are charged against revenue.

supplied to a customer in the past. A provision of Rs 25.5 million was created as exceptional item on
account of arbitration award on September 30, 2023. The Company had filed an appeal with the
Commercial Court of Bangalore on January 10, 2024, against the award. Subsequently, Honourable
Commercial Court of Bangalore rejected the appeal of the Company, and the Company further filed a writ
petition in the Honourable High Court of Karnataka, contesting the aforesaid order, and created a provision
of Rs 12.6 million during the year ended March 31, 2025, towards interest of 12% per annum on the
arbitration award. The Honourable High Court of Karnataka passed an Interim Order on February 6, 2025,
and pursuant to the aforesaid Order, the Company remitted a sum of Rs. 9.9 million to the customer and
had taken back the equipment from the customer. Additionally, the Company deposited Rs. 17.0 million
with the Honourable High Court of Karnataka, representing 75% of the interest on the claim for equipment
and on claims related to installation and commissioning. The Company is currently awaiting date for further
hearing from the Honourable High Court of Karnataka.

b) 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 benefit during employment and post employment. The
Labour Codes, amongst other things introduces changes, including a uniform definition of wages and
enhanced benefits relating to leave. The Company has assessed the financial implications of these
changes which has resulted in increase in gratuity liability arising out of past service cost and increase in
leave liability by Rs. 35.1 million. Considering the impact arising out of an enactment of the new legislation is
an event of non-recurring nature, the Company has presented this incremental amount under
"Exceptional Item” in the Statement of Profit and Loss year ended March 31, 2026. Considering that it is
emerging topic and the finalisation of certain Rules is still pending, the Company will continue monitoring
changes and provide appropriate accounting effect as required based on future developments.

33 EARNINGS PER SHARE (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the
Company by the weighted average number of Equity shares outstanding during the year.

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

34 EMPLOYEE BENEFIT OBLIGATIONS

As per Ind AS 19 "Employee Benefits”, the disclosures of Employee benefits as defined in the Accounting
Standard are given below:

The Company has one post-employment funded plans, namely Gratuity.

The gratuity plan is governed by the Payment of Gratuity Act, 1972 (Act). Under the Act, an employee who has
completed five years of service is entitled to specific benefit. The level of benefits provided depends on the
member’s length of service and salary at retirement age. Gratuity is computed as 15 days salary, for every
completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/
resignation. The Gratuity plan for the Company is a defined benefit scheme where annual contributions as
demanded by the insurer are deposited to a Gratuity Fund established to provide gratuity benefits. The Fund has
taken a Scheme of Insurance, whereby these contributions are transferred to the insurer. The Company makes
provision of such gratuity asset/liability in the books of accounts on the basis of actuarial valuation as per the
projected unit credit method.

Estimates of future salary increases considered in actuarial valuation take account of inflation, seniority,
promotion and other relevant factors such as supply and demand in the employment market.

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

a) Interest risk: a decrease in the bond interest rate will increase the plan liability.

b) Salary risk: the present value of the defined benefit plan liability is calculated by reference to the future
salaries of plan participants. As such, a variation in the expected rate of salary increase of the plan
participants will change the plan liability.

VI. Sensitivity Analysis

Significant actuarial assumptions for the determination of defined obligation are discount rate, wihtdrawal
rate and expected salary increase. The sensitivity analysis below have been determined based on
reasonably possible changes of the respective assumptions occurring at the end of the reporting period,
while holding all other assumptions constant.

The sensitivity analysis presented above may not be representative of the actual change in the defined
benefit obligation as it is unlikely that the change in assumption would occur in isolation of one another as
some of the assumptions may be correlated. Furthermore, in presenting the above sensitivity analysis, the
present value of the defined benefit obligation has been calculated using the projected unit credit method
at the end of the reporting period, which is the same as that applied in calculating the defined benefit
obligation liability recognized in the balance sheet.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior
years.

VII. Asset Liability Matching Strategies

The Company has purchased insurance policy, which is basically a year-on year cash accumulation plan in
which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The Insurance
Company, as part of the policy rules, makes all of the gratuity payments happening during the year (subject
to sufficiency of funds under the policy). The policy thus mitigates the liquidity risk. However, being a cash
accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the
Company is exposed to movement in interest rate (in particular, the significant fall in interest rates, which
should result in a increase in liability without corresponding increase in the asset).

VIII. Effect of Plan on Entity’s Future Cash Flows

(i) Funding arrangements and Funding Policy

The Company has purchased an insurance policy to provide for payment of gratuity to the employees.
Every year, the insurance company carries out a funding valuation based on the latest employee data
provided by the Company. Any deficit in the assets arising as a result of such valuation is funded by the
Company.

(ii) Expected contribution during the next annual reporting period.

The Company's best estimate of Contribution during the next year is Rs. 30.0 Million (March 31, 2025 17.1
Million)

(i) The Company is contesting the tax litigations in respect of income tax matters for the years FY 2011-12 and FY
2012-13 for disallowances made by the tax authorities. The Management, including its tax advisors, believes that
it's position will likely to be upheld at the various forums where the matters are pending. The Company has
reviewed all its pending litigations and proceedings and has adequately provided for where provisions are
required and disclosed as contingent liabilities where applicable, in its standalone financial statements. The
Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial
position.

(ii) The Company is contesting the GST disallowances before the appellate authority in respect of the excess
availment of Input Tax Credit (ITC), comprising of invoices not reflected in GSTR-2A and excess ITC claimed vis-a¬
vis GSTR-2A for the period from FY 2018-19 to FY 2022-23

ÝNORICAN

Shaping Industry
AR ENDED MARCH 31, 2026

ig Value Fair ValueBalance as at Balance as at Balance as at
larch 31, 2025 March 31, 2026 March 31, 2025

426.7 711.9 426.7

288.6 67.3 288.6

44.0 44.0 44.0

215.9 190.0 215.9

1,849.5 1,923.5 1,849.5

2,824.7 2,936.7 2,824.7

5 6 2 . 7 571.1 5 6 2 . 7

7.5 - 7.5

_92.8__157.4__92.8

The Management assessed that the fair value of cash and cash equivalents, other bank balances, trade
receivables, loans, other financial assets, trade payables and other financial liabilities approximate the
carrying amount largely due to short-term maturity of these instruments.

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.

ii. Fair value hierarchy:

Fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the
fair value measurements are observable and the significance of the inputs to the fair value measurement in
its entirety, which are described as follows:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the
entity can access at the measurement date

• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the
asset or liability, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the asset or liability.

As on March 31, 2026 and March 31, 2025, the Company does not hold any financial instruments which are
measured at fair value. Therefore, disclosure under fair value is not applicable to the Company.

(iii) Financial risk management

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

The Company's activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The
Company's senior management oversees the management of these risks. The Company's focus is to
foresee the unpredictability of financial markets and seek to minimize potential adverse effects on it’s
financial performance. The market risk to the Company is mainly due to foreign exchange exposure risk,
Interest rate risk and other price risk. The Company's exposure to credit risk is influenced mainly by the
individual characteristic of each customer. The Company's risk management activity focuses on actively
securing the Company's short to medium-term cash flows by minimising the exposure to volatile financial
markets. Long-term financial investments are managed to generate lasting returns. The Company does not
actively engage in the trading of financial assets for speculative purposes. The most significant financial
risks to which the Company is exposed are described below.

(A) 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
includes trade payable, trade receivable, bank deposits, loans.

a) Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Company has interest bearing bank deposits which are
carrying fixed rate of interest. However, the exposure to risk of changes in market interest rates is minimal.

The Company has not used any interest rate derivatives to hedge the interest rate risk.

b) 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 (when revenue or expense is denominated in a
foreign currency). The Company does not enter into any derivative instruments for trading or speculative
purposes.

Foreign Currency sensitivity analysis

The Company is exposed to foreign exchange risk arising from various currency exposures, primarily with
respect to Euro and US Dollar.

The following table details the Company’s sensitivity to a 5% increase and decrease in the Rupees against
the relevant foreign currencies. 5% is the sensitivity rate used when reporting foreign currency risk
internally to key management personnel and represents management’s assessment of the reasonably
possible change in foreign exchange rates. The sensitivity analysis includes receivables and payable in
currency other than the functional currency of the Company.

A 5% strengthening of the Rupee against key currencies to which the Company is exposed (net of hedge)
would have led to additional gain in the Statement of Profit and Loss.

A 5% weakening of the Rupee against these currencies would have led to an equal but opposite effect.

The impact of strengthening and weakening of rupee with respect to Chinese Yen and Great Britain Pound
has been ignored and not disclosed as the company is not significantly exposed.

c) Commodity price risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the
ongoing manufacturing of OEM products, and therefore require a continuous supply of steel.

(B) 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. The Company is exposed to credit risk from its operating activities
(primarily trade receivables) and from its financing activities, including deposits with banks and financial
institutions, foreign exchange transactions and other financial instruments. The Company only deals with
parties which has good credit rating/ worthiness given by external rating agencies or based on Company's
internal assessment.

(a) Trade receivables management

The Company has used a practical expedient by computing the expected credit loss allowance for trade
receivable based on a provision matrix. The Provision matrix takes into account historical credit loss
experience and adjusted for forward -looking information.

The reversal/allowance for life time expected credit loss on customer balances for the year ended is
disclosed in Note 12.

(b) Financial instrument and bank deposits

Credit risk from balances with banks is managed by the Company in accordance with its policy. Investments
of surplus funds are made only with approved counterparties and within credit limits assigned to each
counterparty.

(c) Liquidity Risk

Liquidity risk refers to the risk that the Company will encounter difficulty in meeting the obligations
associated with its financial liabilities that are settled by delivering cash or another financial asset. The
objective of liquidity risk management, is to maintain sufficient liquidity and ensure that funds are available
for use as per requirements. The Company generates cash flows from operations to meet its financial
obligations, maintains adequate liquid assets in the form of cash & cash equivalents.

Notes:

1. The above information has been determined to the extent such parties have been identified on the basis
of information provided by the Company, which has been relied upon by the auditors.

2. The above transactions are compiled from the date these parties became related.

3. No amounts in respect of related parties have been written off/ back or provided for during the year.

4. As the future liability for gratuity is provided on an actuarial basis for the Company as a whole, the amount
pertaining to individual is not ascertainable and therefore not included above.

Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s
length transactions. Amounts owed to and by related party are unsecured and interest free and settlement
occurs in cash. There have been no guarantees provided or received for any related party receivables or
payables. For the year ended March 31, 2026 and March 31, 2025, the Company has not recorded any
impairment towards receivables from related parties. This assessment is undertaken each financial year
through examining the financial position of the related party and the market in which the related party
operates.

39 SEGEMENT REPORTING

The Board of Directors is the Chief Operating Decision Maker (CODM) and monitors the operating results of
its business units separately for the purpose of making decisions about resource allocation and
performance assessment. The Company is predominantly engaged in the business of manufacturing and
sale of equipment manufacturer with foundry and surface preparation process technology business, which
constitutes a single business segment and is governed by similar set of risks and returns. The operations of
the Company primarily cater to the market in India, which the CODM views as a single segment. The CODM
monitors the operating results of its single segment for the purpose of making decisions about resource
allocation and performance assessment.

Non-current assets is allocated based on the geographic location of the respective assets, Non-current
assets for this purpose consist of property, plant and equipment, investment properties and intangible
assets.

(iii) Major customers :

The Company has no customer which accounts for more than 10% of the Company's total revenue for the
year ended March 31,2026 and March 31,2025.

Note: The above is determined to the extent such parties have been identified on the basis of information
collected by the Management and this has been relied upon by the auditors.

⁴¹ The Company has established a comprehensive system of maintenance of information and documents as
required by the transfer pricing legislation under Sections 92-92F of the Income-tax Act, 1961. Since the law
requires existence of such information and documentation to be contemporaneous in nature, the Company
is in the process of updating the documentation for the international transactions entered into with the
associated enterprises during the financial year and expects such records to be in existence latest by within
due date of filing the Return of Income as required under law. The Management is of the opinion that its
international transactions are at arm’s length so the aforesaid legislation will not have any impact on the
financial statements, particularly on the amount of tax expense and that of provision for taxation.

42 LEASES

Company as a lessee

The Company has entered into property lease for office space. This lease is for a period of five years.The
Company’s obligations under the lease is secured by the lessor’s title to the leased assets.

The Company had total cash outflows for leases of Rs 7.5 Million in March 31, 2026 (Rs. 13.3 Million in March
31, 2025).The Company also had no non-cash additions to right-of-use assets and lease liabilities for the
year ended March 31, 2026 and March 31, 2025. There are no future cash outflows relating to leases that
have not yet commenced.

The Company has no lease contracts that contains variable payments

The Company has a lease contract that include extension and termination options. These options are
negotiated by management to provide flexibility in managing the leased-asset portfolio and align with the

Company’s business needs. Management exercises significant judgement in determining whether these
extension and termination options are reasonably certain to be exercised.

Company as a lessor

The Company has entered into operating leases on its investment property portfolio consisting of office
buildings (see Note 5). These leases have terms up to five years. All leases include a clause to enable upward
revision of the rental charge on an annual basis according to prevailing market conditions. The lessee is also
required to provide a residual value guarantee on the properties. Rental income recognised by the Company
during the year is Rs 2.8 Million (March 31,2025: Rs 2.7 Million) (refer note 24).

44 EVENTS AFTER THE REPORTING PERIOD

The board of directors have proposed dividend after the balance sheet date which are subject to approval by
the shareholders at the annual general meeting. Refer note 18 for details.

45 OTHER STATUTORY INFORMATION

(I) There are no proceedings which have been initiated during the year or are pending against the Company

as at March 31, 2026 for holding any benami property under the Benami Transactions (Prohibition) Act,
1988.

(ii) As per section 248 of the Companies Act, 2013, there are no balances outstanding or transactions with
struck off companies.

(iii) The Company has not traded / invested in Crypto currency or virtual currency.

(iv) The Company has no charges or satisfaction which is yet to be registered with ROC beyond the statutory
period.

(v) 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

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

shall

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

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

(vii) The Company has no such transaction which is not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act,
1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

(viii) The Company is not a declared willful defaulter by any bank or financial institution or other lender.

(ix) The Company has used accounting software 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 for certain changes
made, if any, using privileged/ administrative access rights. Further, no instance of audit trail feature
being tampered with was noted in respect of accounting software to the extent where the audit trail has
been enabled. Additionally, the audit trail of relevant prior year has been preserved by the Company as
per the statutory requirements for record retention, to the extent it was enabled and recorded in the
previous year