2.14 Provisions, contingent liabilities and contingent assets:

Provisions

A provision is recognized when the Company has a present obligation as a result of past events and it is probable
that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can
be made.

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

Contingent liability

A possible obligation that arises from past events and the existence of which will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the
enterprise are disclosed as contingent liability and not provided for Such liability is not disclosed if the possibility
of outflow of resources is remote.

Contingent assets

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only
by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of
the entity.

Contingent assets are not recognised but disclosed only when an inflow of economic benefits is probable.

2.15 Financial instruments:

Financial assets

i) Classification of financial assets (including debt instruments)

The Company classifies its financial assets in the following measurement categories:

- those to be measured subsequently at fair value (either through other comprehensive income, or through
profit or loss), and

- those measured at amortised cost.

The classification depends on the entity's business model for managing the financial assets and the
contractual cash flow characteristics of the financial assets.

ii) Initial measurement

Financial assets (excluding trade receivables) are initially measured at fair value. Transaction costs that
are directly attributable to the acquisition (other than financial assets at fair value through profit or loss)
are added to the fair value of the financial assets, as appropriate, on initial recognition. Transaction costs
that are directly attributable to the acquisition or issue of financial assets at fair value through profit or loss
are recognised immediately in profit or loss. Trade receivables which do not contain a significant financing
component are measured at transaction price.

iii) Subsequent measurement

There are three measurement categories into which the debt instruments can be classified:

• Amortised cost

Assets that are held for collection of contractual cash flows where those cash flows represent solely
payments of principal and interest are measured at amortised cost. Interest income from these
financial assets is included in finance income using the effective interest rate method. Any gain or
loss arising on derecognition is recognised directly in profit or loss and presented in other gains/
(losses). Impairment losses are presented as separate line item in the statement of profit and loss.

• Fair value through other comprehensive income (FVOCI)

Assets that are held for collection of contractual cash flows and for selling the financial assets, where
the assets' cash flows represent solely payments of principal and interest, are measured at fair value
through other comprehensive income (FVOCI). Movements in the carrying amount are taken through
OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange
gains and losses which are recognised in profit and loss. When the financial asset is derecognised,
the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and
recognised in other gains / (losses). Interest income from these financial assets is included in other
income using the effective interest rate method. Foreign exchange gains and losses are presented
in other gains and losses and impairment expenses in other expenses. The Company currently does
not have any debt instruments which are measured at FVOCI.

• Fair value through profit or loss (FVTPL)

Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through
profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through
profit or loss is recognised in profit or loss and presented net in the statement of profit and loss within
other gains / (losses) in the period in which it arises. Net gains / (losses) from these financial assets
is included in other income.

iv) Impairment of financial assets

The Company assesses on a forward-looking basis the expected credit losses associated with its financial
assets carried at amortised cost. The impairment methodology applied depends on whether there has
been a significant increase in credit risk.

For trade receivables or any contractual right to receive cash or another financial asset that result
from transactions that are within the scope of Ind AS 115, the Company follows 'simplified approach' for
recognition of impairment loss and always measures the loss allowance at an amount equal to lifetime
expected credit losses to measure the expected credit losses, trade receivables have been grouped
based on days past due. The Company has segmented the customers based on shared risk attributes,
i.e. Government Consumers / Non-Government consumers, Status of Consumers i.e. Live consumers /
Disconnected consumers and Security deposits provided by the Consumer

v) Derecognition of financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets)
is primarily derecognised (i.e. removed from the Company's balance sheet) when:

- The rights to receive cash flows from the asset have expired, or

- The Company has transferred its rights to receive cash flows from the asset.

When the entity has transferred an asset, the Company evaluates whether it has transferred substantially
all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised.
Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset,
the financial asset is not derecognised.

Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of
ownership of financial asset, the financial asset is derecognised if the Company has not retained control
over the financial asset. Where the Company retains control of the financial asset, the asset is continued
to be recognised to the extent of continuing involvement in the financial asset.

vi) Income recognition

Dividend is accounted when the right to receive payment is established.

Interest income on financial assets at amortised cost is calculated using the effective interest method is
recognised in the statement of profit and loss as part of other income.

Interest on overdue receivables of energy bills and claims including insurance claims, coal cost variation
and other claims etc. are accounted when there is a certainty of recovery.

vii) Derivative and Hedge accounting

The Company uses derivative financial instruments such as forward contacts to hedge its risks associated
with foreign exchange fluctuation and price risk movement. Risks associated with fluctuation in the price
of the fuel are minimized by undertaking appropriate derivative instruments.

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently re-measured to their fair value at the end of each reporting period. The resulting gain or
loss is recognised in the statement of profit and loss immediately unless the derivative is designated and
effective as a hedging instrument, in which event the timing of the recognition in statement of profit and
loss depends on the nature of the hedging relationship and nature of hedged items.

Derivative financial instruments that hedges commodity price risk associated with highly probable
forecasted transactions are designated as cash flow hedges and measured at fair value. The effective
portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges
is recognised in other comprehensive income and accumulated under the heading cash flow hedging
reserve within equity, and re-classified to the statement of profit and loss in the period corresponding
to the occurrence of the forecasted transactions. The gain or loss relating to the ineffective portion is
recognised immediately in the statement of profit and loss.

Hedge effectiveness is tested both at the inception of the hedge relationship as well as on an ongoing
basis. The Company documents the economic relationship between hedging instruments and hedged
items including whether the changes in the cash flows of the hedging instrument are expected to offset
changes in cash flows of hedged items. Hedge accounting is discontinued when the hedging instrument
expires or when it is sold, terminated or exercised or no longer qualifies for hedge accounting and the
cumulative gain or loss and deferred costs of hedging that were reported in equity are immediately
reclassified to profit or loss.

Derivatives embedded in a host contract that is an asset within the scope of Ind AS 109 are not separated.
Financial assets with embedded derivatives are considered in their entirety while determining their cash
flows are solely payment of principal and interest.

Derivatives embedded in all other host contract are separated only if the economic characteristics and
risks of the embedded derivative are not closely related to the economic characteristics and risks of the
host and are measured at fair value through profit or loss. Embedded derivatives closely related to the
host contracts are not separated.

Financial liabilities

i) Classification

All the Company's financial liabilities except for Derivative liabilities are measured at amortized cost.

ii) Initial measurement

Financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to
the issue of financial liabilities are deducted from the fair value of the financial liabilities, as appropriate,
on initial recognition.

iii) Subsequent measurement

Financial liabilities are subsequently measured at amortised cost using the Effective Interest Rate Method.

The Effective Interest Rate 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 (including transaction costs and other premiums or discounts)
through the expected life of the financial liability.

iv) Derecognition of financial liabilities

The Company derecognises financial liabilities when, and only when, the Company's obligations are
discharged, cancelled or waived off or have expired. An exchange between the Company and the lender
of debt instruments with substantially different terms is accounted for as an extinguishment of the original
financial liability and the recognition of a new financial liability. The difference between the carrying amount
of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

v) Financial guarantee contracts

Financial guarantee contracts issued by the Company are those contracts that require a payment to be
made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment
when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised
initially as a liability at fair value. Subsequently, the liability is measured at the higher of the amount of loss
allowance determined as per impairment requirements of Ind AS 109 and the amount recognised less
cumulative amortisation.

2.16 Contributed equity:

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting
all of its liabilities. Transaction costs of an equity transaction are deducted from other equity (net of tax).

2.17 Leases:

Company as a lessee

Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased
asset is available for use by the Company. Contracts may contain both lease and non-lease components.

Lease liabilities

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include
the net present value of the lease payments.

The lease payments include fixed payments (including in substance fixed payments) less any lease incentives
receivable, variable lease payments that depend on an index or a rate and amounts expected to be paid under
residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably
certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term
reflects the Company exercising the option to terminate. Variable lease payments that do not depend on
an index or a rate are recognised as expenses in the period in which the event or condition that triggers the
payment occurs. Lease payments to be made under reasonably certain extension options are also included in
the measurement of the liability.

The lease payments are discounted using the lessee's incremental borrowing rate. Lease payments are
allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period
so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Right-of-use assets

Right-of-use assets are measured at cost comprising the amount of the initial measurement of lease liability
and lease payments made before the commencement date.

Right-of-use assets are depreciated over the lease term on a straight-line basis. Right-of-use assets
are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities
recognised, and lease payments made at or before the commencement date less any lease incentives received.

Short-term leases and leases of low value assets

Payments associated with short-term leases of equipment and all leases of low-value assets are recognised on
a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months
or less. Low-value assets comprise small items of office equipment including IT equipment.

2.18 Investment in perpetual securities:

Investments in Unsecured subordinated perpetual debt instruments that are repayable solely at the option
of the issuer, have no fixed maturity, provide for non-cumulative distributions payable at the discretion of the
issuer and do not create a contractual obligation for the issuer to repay the principal or pay distributions,
are classified by the issuer as equity instruments in accordance with Ind AS 32 - Financial Instruments:
Presentation. In its separate financial statements, the Company measures for such investments in subsidiaries
at cost in accordance with Ind AS 27 - Separate Financial Statements and disclosed as "Investment in perpetual
debt instrument”.

At each reporting date, the Company assesses whether there is any indication of impairment. If any such
indication exists, the Company estimates the recoverable amount and ecognized an impairment loss, if any, in
the Statement of Profit and Loss.

Income

Distribution income from Unsecured subordinated perpetual debt instruments, in the form of distributions
declared by the issuer, is recognized in the Statement of Profit and Loss as dividend income when the Company's
right to receive the distribution is established.

2.19 Amount presented and rounding off:

All amounts in the financial statements and notes have been presented in C Crore (except for share data)
rounded to two decimals as per the requirement of Schedule III of the Companies Act, 2013, unless otherwise
stated. Figures below C 50,000 are denoted by '*'.

2.20 Government grants:

Grants from the government are recognised at their fair value where there is a reasonable assurance that the
grant will be received and the Company will comply with all the attached conditions.

Government grants relating to income are recognised in profit or loss on a systematic basis over the periods in
which the Company recognises as expenses the related costs for which the grants are intended to compensate.
Government grants relating to purchase of property, plant and equipment whose primary condition is that the
Company should purchase, construct or otherwise acquire property, plant and equipment are recognised as
deferred revenue in the balance sheet and transferred to profit or loss on a systematic and rational basis over
the useful lives of the related assets.

2.21 Investment properties:

Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by
the Company, is classified as investment property. Investment property is measured initially at its cost, including
related transaction costs and where applicable borrowing costs. Subsequent expenditure is capitalised to the
asset's carrying amount only when it is probable that future economic benefits associated with the expenditure
will flow to the Company and the cost of the item can be measured reliably.

An investment property is derecognised upon disposal or when the investment property is permanently
withdrawn from its current use and no future economic benefits are expected from the disposal. Any gain or loss
arising on derecognition of the property (calculated as the difference between the net disposal proceeds and
the carrying amount of the asset) is included in profit or loss in the period in which the property is derecognised.

2.22 Intangible assets - acquired:

Computer software is carried at cost less accumulated amortisation and accumulated impairment losses, if
any. Amortisation is recognised on a straight-line basis over its estimated useful life of 3 years. The estimated
useful life and amortisation method are reviewed at the end of each reporting period and the effect of any
changes in such estimate is accounted for on a prospective basis.

Expenditure incurred on acquisition of intangible assets which are not ready to use at the reporting date is
disclosed under "Intangible assets under development”.

An intangible asset is derecognised on disposal, or when no future economic benefits are expected from its
use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference
between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when
the asset is derecognised.

Note 3: Critical accounting judgements and key sources of estimation uncertainty

In the course of applying the policies outlined in all notes under note 2 above, the management of the Company is
required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that
are not readily apparent from other sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

Such estimates and associated assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period
of the revision and future period, if the revision affects current and future periods.

3.1 Revenue recognition:

The Company has recognised revenue (including the adjustment in respect of unapproved FPPPA claims and
other true up adjustment claims) as per the applicable tariff regulations / tariff orders, management's probability
estimate and the past trends of approval. The company has not recognized those truing up adjustment claims
which are disputed and for which the company is in appeal with regulatory authorities. These are recognised on
receipt of final orders of respective regulatory authorities [Refer note 36 & 44]. However, for certain Disputed
cases [Refer note 44(a)(2)(i)], where the Company believes it has strong case, the Company continues to
recognise those truing up claims.

3.2 Property, plant and equipment:

(i) Service concession arrangements

The Company has assessed applicability of Appendix C of Ind AS 115 "Service Concession Arrangements”
with respect to its Property, plant and equipment. In assessing the applicability, the Company has
exercised judgment in relation to the provisions of the Electricity Act, 2003, conditions provided under
transmission and distribution license and / or agreements. Further, the Company has ability to pledge the
assets pursuant to which it has control and ability to direct the use of assets. Based on such assessment,
it has concluded that Appendix C of Ind AS 115 is not applicable.

(ii) Impairment of property, plant and equipment

Determining whether property, plant and equipment are impaired requires an estimation of the value
in use of the relevant cash generating units. The value in use calculation is based on a Discounted Cash
Flow model over the estimated useful life of the property, plant and equipment. Further, the cash flow
projections are based on estimates and assumptions relating to expected demand, future price of fuel,
expected tariff rates for electricity, discount rate, exchange rate and electricity market scenario, based
on past trends and the current and likely future state of the industry etc. which are considered reasonable
by the Management. Any reasonable possible change in the underlying assumptions would not lead to a
material change to the amount of impairment. [Refer note 42(1)].

3.3 Impairment of investments in subsidiaries:

At the end of each reporting period, the Company reviews the carrying amounts of its investments in
subsidiaries when there is an indication for impairment. If the recoverable amount is less than its carrying
amount, the impairment loss is accounted for Investments in subsidiaries carried at cost are tested for
impairment. The carrying amount of the investment is tested for impairment as a single asset by comparing its
recoverable amount with its carrying amount, any impairment loss recognised reduces the carrying amount
of the investment. The recoverable amount calculation is based on a Discounted Cash Flow model over the
estimated useful life of its single asset of the Subsidiary.

Impairment of loans

The Company applies the Ind AS 109 simplified approach to measure expected credit losses which uses a
lifetime expected loss allowance for loans granted by the Company to its subsidiaries.

3.4 Taxes:

Significant management judgement is required to determine the amount of deferred tax assets and deferred
tax liabilities that can be recognised, based upon the likely timing and the level of future taxable profits together
with future tax planning strategies, including estimates of temporary differences reversing on account of
available benefits from the Income Tax Act, 1961.

Deferred tax assets are recognised for unused tax credits to the extent that it is probable that taxable profit
will be available against which the losses can be utilised. Management judgement is required to determine the
amount of deferred tax assets for unused tax credits that can be recognised, based upon the likely timing and
the level of future taxable profits [Refer note 43(d)]

3.5 Contingencies:

Contingent liabilities

In the normal course of business, contingent liabilities may arise from litigation and other claims against the
Company. Potential liabilities that are possible but not probable of crystallising or are very difficult to quantify
reliably are treated as contingent liabilities. Such liabilities are disclosed in the notes but are not recognised.
Potential liabilities that are remote are neither recognized nor disclosed as contingent liability. The management
judgement is involved in classification under 'remote', 'possible' or 'probable' which is carried out based on
expert advice, past judgements, experiences etc. [Refer note 45(a)]

3.6 Employee benefit plans:

Defined benefit plans and other long-term employee benefits

The present value of obligations under defined benefit plan and other long-term employment benefits is
determined using actuarial valuations. An actuarial valuation involves making various assumptions that may
differ from actual development in the future. These include the determination of the discount rate, future salary
escalations, attrition rate and mortality rates. Due to the complexities involved in the valuation and its long-term
nature, these obligations are highly sensitive to changes in these assumptions. All assumptions are reviewed
at each reporting date. Information about the various estimates and assumptions made in determining present
value of defined benefit obligation are disclosed in note 49.2.

1 The above capital work-in-progress have been mortgaged and hypothecated to secure borrowings of the
Company [Refer note 26].

2 Capital work-in-progress include borrowing costs of C 14.57 Crore (March 31, 2025 - C 10.21 Crore), which are
directly attributable to purchase / construction of qualifying assets in accordance with Ind AS - 23 "Borrowing
Costs".

3 Adjustment during the previous year includes C 2.57 Crore was in relation to transfer of capital work-in-progress
to subsidiaries.

4 Capital work-in-progress mainly comprises Plant and machinery, Buildings and Freehold land.

5 Additions to capital work-in-progress includes capitalisation of directly attributable costs incurred by the
Company under various headings.

6 Refer note 61 for ageing schedule of the capital work-in-progress.

The fair value of the Company's investment property has been arrived based on a valuation report by external
independent valuer, who is a registered valuer as defined under rule 2 of Companies (Registered valuers and
valuation) Rules 2017. Valuation is based on government rates, market research, market trend and comparable
values as considered appropriate.

3 The Company has no restrictions on the realisability or the remittance of income and proceeds of disposal of its
investment properties. There are no contractual obligations to purchase, construct or develop such investment
properties or for repairs, maintenance and enhancements thereof.

4 The Company has not revalued its investment property during the current or previous year

5 The title deeds of investment property are held in the name of the Company as at March 31, 2026 and
March 31,2025.

6 The Company had leased the part of freehold land with effect from January 15, 2021 as disclosed above to
Torrent Electricals Limited (formerly known as TCL Cables Private Limited / Torrent Electricals Private Limited)
for the lease term of 10 years.

1 During the year, Company has given corporate guarantees in favour of lender of subsidiary company and has
recognised fair value of corporate guarantee as equity investment in Solapur Transmission Limited.

2 During the year, Company has given corporate guarantees in favour of lender of indirect subsidiary companies,
MSKVY Ninth Solar SPV Limited (MSKVY) and Torrent Solar Power Private Limited (TSPPL), and has recognised
fair value of corporate guarantee as equity investment in Torrent Green Energy Private Limited (holding
company of MSKVY and TSPPL), subsidiary company.

3 The Company has invested in unsecured subordinated perpetual debt instruments issued by its subsidiary
companies. These debt instrument are redeemable solely at the option of the issuer. This carries non¬
cumulative distributions payable at the discretion of the issuer and do not create a contractual obligation for
the issuer to repay the principal or pay distributions. The rate of distribution, if declared, is linked to the rate of
dividend declared by the issuers on its ordinary shares for the respective financial year

4 On June 05, 2025, the Company had entered into a Share Purchase Agreement (SPA) with Sarawagi Family
and related HUFs (the Seller) for the acquisition of 100% share capital of Newzone India Private Limited
(NZIPL) and Newzone Power Projects Private Limited (NZPPL) (Collectively referred as "Newzone Group"), for
implementation of thermal power project in the Annupur District of Madhya Pradesh. Pursuant to the SPA, NZIPL
and NZPPL has become wholly owned subsidiary of the Company w.e.f. September 23, 2025.

5 The Board of Directors of the Company at its meeting dated November 11,2025, has approved transfer of its
equity investments in its 3 subsidiaries to Torrent Energy Storage Solutions Private Limited (Formerly known
as Torrent PSH 3 Private Limited) (TESSPL), which is a wholly-owned subsidiary of the Company. Considering
the transfer is between Holding Company and its wholly owned subsidiary, it is transferred at the cost. The
Company has transferred the said equity shares in March 2026 for total consideration of C 0.03 Crore.

6 The Board of Directors of the Company at its meeting dated February 10, 2026, has approved the acquisition
of equity investments of Torrent Urja 47 Private Limited from Torrent Green Energy Private Limited (TGEPL),
which is a wholly-owned subsidiary of the Company. Considering the transfer is between its wholly owned
subsidiary and Holding Company, it is acquired at the cost. The Company has acquired the said equity shares
in March 2026 for total consideration of C 0.05 Crore.

7 During the previous year, Company has given corporate guarantees in favour of lender of subsidiary
company and has recognised fair value of corporate guarantee as equity investment in Torrent Saurya Urja 2
Private Limited.

Note 10: Investments in subsidiaries (Contd.)

8 During the previous year, Company had given corporate guarantees in favour of lender of indirect subsidiary
company, Airpower Windfarms Private Limited (AWPL) and has recognised fair value of corporate guarantee
as equity investment in Torrent Green Energy Private Limited (holding company of AWPL), subsidiary company.

9 The Board of Directors of the Company at its meeting dated February 04, 2025, has approved transfer of its
equity investments in its 34 subsidiaries to Torrent Green Energy Private Limited (TGEPL), which is a wholly-
owned subsidiary of the Company. Considering the transfer is between Holding Company and its wholly owned
subsidiary, it is transferred at the cost. The Company has transferred the said equity shares in March 2025.
The total consideration for this transfer was to C 1,365.93 Crore.

10 During the previous years, the Company has provided corporate guarantees to the lenders of various
subsidiary companies. The fair value of these guarantees initially has been recognised as equity investments
in the respective subsidiaries amounting to C 57.04 Crore. Pursuant to the transfer (Refer the note above) of
its equity investments in such subsidiaries to Torrent Green Energy Private Limited, the fair value of these
corporate guarantees has been considered as an equity investment in Torrent Green Energy Private Limited.

11 The Company carries its investments in subsidiaries (in the form of equity shares and unsecured perpetual
debt) at cost in accordance with Ind AS 27 'Separate Financial Statements'. At each reporting date, the Company
assesses whether there are any indications that such investments may be impaired, in accordance with Ind AS
36 'Impairment of Assets'.

Certain subsidiaries have incurred losses in the current and previous years, which the management has
considered as indicators of impairment. Accordingly, the Company has performed impairment assessments
in respect of such investments.

For the purpose of impairment testing, each investment in subsidiary is assessed as a single asset, as the
recoverable amount of the underlying investee is considered to be reflective of the value of the investment.
The recoverable amount has been determined based on value-in-use calculations using discounted cash
flow models.

These models incorporate cash flow projections over the remaining useful economic life of the underlying
renewable energy assets, taking into account:

• Estimated plant load factor (PLF) based on historical performance, expected operating conditions;

• Discount rate of 7.25% reflecting current market assessments of the time value of money and risks specific to
the respective subsidiaries.

The determination of recoverable amount involves significant judgement, particularly in respect of the above
assumptions. Management has also performed sensitivity analyses on key assumptions, including PLF and
discount rate, to assess the impact of reasonably possible changes. Based on such analyses, management has
assessed that there is headroom between the recoverable amounts and the carrying values of the respective
investments, and that reasonably possible changes in key assumptions would not result in impairment.

Based on the impairment assessments performed, management has concluded that the carrying values of
investments in subsidiaries are appropriate as at March 31, 2026, and no impairment provision is required.

Management reviews the underlying assumptions periodically and updates the assessments to reflect changes
in economic conditions, regulatory environment, and operational performance.

1 The Company has, jointly with Torrent Pharmaceuticals Limited, promoted section 8 company, i.e. UNM
Foundation, under the Companies Act, 2013 for the purpose of carrying out charitable activities. On March
30, 2026, the Company has transferred the 50,000 equity shares of UNM Foundation to Torrent Investments
Limited (formerly known as Torrent Investments Private Limited), Parent Company. Considering the transfer
is between the Company and its Parent Company, it is transferred at the cost. The Company has transferred
the said equity shares in March 2026 for total consideration of C 0.05 Crore.

1 Loans to related parties are financial assets measured in accordance with Ind AS 109 'Financial Instruments'
and are subject to impairment assessment using the expected credit loss (ECL) model.

The Company assesses at each reporting date whether there has been a significant increase in credit
risk since initial recognition, based on a combination of quantitative and qualitative factors, including
the financial performance of the borrowing subsidiaries, projected cash flows, and their ability to meet
contractual obligations.

In performing the ECL assessment, management has considered:

• The current financial position and historical performance of the borrowing subsidiaries;

• Future cash flow projections derived from the same assumptions used for impairment testing of investments,
including PLF;

• The terms and conditions of the loan arrangements, including repayment schedules and their alignment with
the cash generation profile of the subsidiaries; and

• The Company's intent and ability to provide ongoing financial support to its subsidiaries, where relevant, in the
context of its investment strategy.

Based on the above assessment, management has concluded that the credit risk associated with these loans
has not significantly increased since initial recognition and that the expected credit losses are not material.
Accordingly, no impairment provision has been recognised as at March 31,2026.

Management continues to monitor the performance of the borrowing entities and reassesses the ECL at each
reporting date, considering any changes in facts and circumstances.

Note 24: Equity share capital (Contd.)

4 Terms / Rights attached to equity shares:

The Company has only one class of equity shares having par value of C 10 per share. Each holder of equity
shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The
dividend, if any, proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing
Annual General Meeting, except in case of interim dividend.

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

5 Details of shareholders holding more than 5% shares in the Company:
7 Distributions made:

Interim dividend for FY 2025-26 of C 15.00 per equity share [Previous year - C 14.00 per equity share]
aggregating to C 755.86 Crore [Previous year - C 705.46 Crore] was paid in the month of March 2026 [Previous
year - March 2025].

The Board of Directors at its meeting held on May 12, 2026 has recommended a final dividend of 50.00 % (C 5.00
per equity share of par value C 10.00 each) [Previous year - C 5.00 per equity share, result in a cash outflow of
C 251.95 Crore]. The proposal is subject to the approval of shareholders at the ensuing Annual General Meeting
and if approved, would result in a cash outflow of C 251.95 Crore.

1 Securities premium:

Securities premium reflects issuance of the shares by the Company at a premium, whether for cash or otherwise
i.e. a sum equal to the aggregate amount of the premium received on shares is transferred to a "securities
premium account” as per the provisions of the Companies Act, 2013. The reserve can be utilised in accordance
with the provisions of the Act.

2 Debenture redemption reserve:

The Company was required to create a Debenture Redemption Reserve (DRR) out of the profits which are
available for payment of dividend for the purpose of redemption of debentures. Pursuant to Companies (Share
Capital and Debentures) Amendment Rules, 2019 dated August 16, 2019, the Company is not required to create
DRR. Accordingly, the Company has not created DRR during the year and DRR created till previous years has
been transferred to general reserve on redemption of debentures.

3 Contingency reserve:

As per the provisions of GERC MYT Regulations read with Tariff orders passed by GERC, the Company being
a Distribution Licensee makes an appropriation to the contingency reserve to meet with certain exigencies.
Investments in Bonds issued by Government of India have been made against such reserve.

4 Special reserve:

As per MYT Regulations (2007), the Company has created a reserve in FY 2011-12 and FY 2012-13,
which represents one third amount of controllable gain shall be retained in a special reserve by the
Generating Company or Licensee for the purpose of absorbing the impact of any future losses on account of
controllable factors.

Note 25: Other equity (Contd.)

5 General reserve:

General reserve is used from time to time to transfer profits from retained earnings for appropriation purposes.
The general reserve is created by a transfer from one component of equity to another and is not an item of
other comprehensive income.

6 Retained earnings:

The retained earnings reflect the profit of the company earned till date net of appropriations. The amount that
can be distributed by the Company as dividends to its equity shareholders is determined based on the balance
in this reserve, after considering the requirements of the Companies Act, 2013.

7 Effective portion of cash flow hedges:

The effective portion of cash flow hedges is used to recognise effective portion of gains / losses arising on
deivative instruments that are designated and qualify as cash flow hedges, as described in note 57. Amounts
are subsequently reclassified to profit / loss as appropriate.

As at March 31, 2026

1 Nature of security

The entire immovable and movable assets including current assets, both present and future, of the Company
are mortgaged and hypothecated by way of first pari passu charge in favour of lenders for term loans of of
C 3,570.66 Crore and non convertible debentures of C 4,735.00 Crore along with lenders of cash credits and non¬
fund based credit facilities, except some assets which, in terms of respective financing documents (including
Loan agreements, Debenture Trust deeds, working capital facility agreements), are carved out of security
provided to lenders.

3 The rate of interest for term loans from banks is in the range of 8.35% to 8.50% p.a. as at March 31, 2026.

4 Proceeds from term loans and non convertible debentures raised during the year have been utilized for the
purposes for which it was obtained.

5 Undrawn term loans from banks, based on approved facilities, were C Nil as at March 31,2026.

As at March 31, 2025

1 Nature of security

The entire immovable and movable assets including current assets, both present and future, of the Company
are mortgaged and hypothecated by way of first pari passu charge in favour of lenders for term loans of
C 2,846.76 Crore and non convertible debentures of C 3,315.00 Crore along with lenders of cash credits and non¬
fund based credit facilities, except some assets which, in terms of respective financing documents (including
Loan agreements, Debenture Trust deeds, working capital facility agreements), are carved out of security
provided to lenders.

2 The future annual repayment obligations (monthly / quarterly / yearly) on principal amount for the above long¬
term borrowings are as under-.

Note 26: Non-current borrowings (Contd.)

3 The rate of interest for term loans from banks is 8.90% p.a. as at March 31, 2025.

4 Undrawn term loans from banks, based on approved facilities, were C 1,064.00 Crore as at March 31,2025.

5 Proceeds from term loans raised during the year have been utilized for the purposes for which it was obtained.

6 During the year, term loan amounting to C 2,625.00 Crore have been paid from the Qualified Institutions
Placement (QIP) proceeds [Refer footnote 2 of note 24].

Footnotes:

1 The entire immovable and movable assets including current assets, both present and future, of the Company
are mortgaged and hypothecated by way of first pari passu charge in favour of lenders for working capital
facilities and by way of second pari passu charge in favour of lenders for hedge facility.

2 Undrawn cash credit from banks, based on approved facilities, were C 1,180.00 Crore (March 31,2025 - C 1,300.00
Crore).

3 During the current and previous year, the Company has used the loans for the purpose for which it was obtained.

4 The Company has borrowings from banks and financial institutions on the basis of security of current assets
and quarterly returns or statements of current assets filed are in agreement with the books of accounts.

Note 42: Impairment assessment

(1) DGEN Power Plant

Net carrying value of Property, plant & equipment ("PPE”) (including Capital work in progress) and Right-of-Use
assets ("ROU”) as at March 31, 2026 includes C 1,114.62 Crore (March 31, 2025: C 1,176.70 Crore) pertaining
to 1,200 MW DGEN Mega Power Project located at Dahej, Gujarat including its Transmission Line ("DGEN”).
DGEN started commercial operations with effect from November 2014 and thereafter had operated only
intermittently / partially including the current year due to various factors such as unavailability of domestic
gas, high prices of imported gas and non-availability of power selling arrangement.

In view of the above and given the current economic environment, the Company had carried out an impairment
assessment of DGEN as at March 31,2026 by considering the recoverable amount based on value-in-use of
DGEN in accordance with Indian Accounting Standard 36 'Impairment of Assets'. Value-in-use is determined
considering a discount rate of 13.50% (March 31, 2025 - 14 %) and cash flow projections over a period of
14 years (March 31, 2025 - 15 years), being the balance useful life of DGEN in terms of Central Electricity
Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2024 on the basis that the Company
expects to supply power in the future. Based on the assessment, recoverable value of PPE and ROU by using
value-in-use is C 1,251.00 Crore (March 31,2025: C 1,325.94 Crore) which is higher than the carrying amount of
PPE and ROU of C 1,114.62 Crore (March 31, 2025: C 1,176.70 Crore) and accordingly no additional impairment
loss is required as at March 31,2026. The management has conducted sensitivity analysis on impairment test
of the value in use of DGEN. The management believes that reasonable possible change in key assumptions
would not materially impact the impairment assessment as at March 31,2026.

During the earlier years, the Company has provided for impairment loss of C 2,300.00 Crore (March 31, 2025:
C 2,300.00 Crore).

Assessment of 'value-in-use' involves several key assumptions including expected demand, future price of
fuel, expected tariff rates for electricity, discount rate, exchange rate and electricity market scenario, based
on past trends and the current and likely future state of the industry. Management reviews such assumptions
periodically to factor updated information based on events or changes in circumstances in order to make fresh
assessment of impairment, if any.

(2) Investment in Torrent Pipavav Generation Limited

Torrent Pipavav Generation Limited ("TPGL"), a subsidiary of the Company and a joint venture between the
Company and Gujarat Power Corporation Limited ("GPCL'), had made payments in nature of compensation for
acquisition of private land as per the court orders in Amreli, Gujarat for the purpose of developing a coal-based
power plant of 1,000 MW. Due to non-availability of fuel linkage, Government of Gujarat ("GoG”) vide its letter
dated December 06, 2017, communicated that the said project may not be developed and accordingly, the joint
venture is intended to be dissolved. Further, as per the said letter, the cost of land would be reimbursed after
the disposal of land.

During the previous year, TPGL received amount of C 103.18 Crore from GPCL towards the cost incurred for
acquisition of aforesaid land and other expenses incurred in prior years. Considering the above facts, assets
and liabilities are reflected at their net realisable values or cost whichever is lower and the financial statements
of TPGL for year ended March 31,2026 and March 31,2025 have been prepared on a non - going concern basis.

Considering the above facts, Management has reversed the impairment provision of C Nil (March 31, 2025:
C 7.15 Crore) for Carrying amount of equity of C 35.95 Crore (March 31,2025: C 35.95 Crore) net of impairment
C 11.55 Crore after above reversal.

Note 43: Income tax expense (Contd.)

Footnote:

Year ended March 31, 2026

Previously, the Company has applied 25.168% for temporary differences expected to reverse post-transition
to new tax regime and 34.944% for those reversing earlier to measure deferred taxes.

In view of newly introduced provisions under the Finance Act, 2026, which permit the utilization of accumulated
Minimum Alternate Tax (MAT) credit up to March 31, 2026 against future tax liabilities, Company is going to
adopt the concessional income tax regime as per Section 200 of the Income-tax Act, 2025 from FY 2026-27.

Consequently, all deferred tax balances expected to reverse from FY 2026-27 onwards have been remeasured
at the concessional rate of 25.168%. This remeasurement has resulted in a net reversal of deferred tax liabilities
amounting to C 81.92 Crore, which has been recognized in the statement of profit and loss for the current year.

Year ended March 31, 2025

During the previous year, the Company had received Income tax refunds (including interest income) of
C 427 Crore pertaining to earlier years on account of various favourable tax orders and as a result of which
its accumulated minimum alternative tax (MAT) credit balance as per book has utilised substantially. The
Management has made an assessment of the amount of taxable income that would be available in future to
offset the accumulated MAT credit entitlement available to the Company in the foreseeable future.

In view of the same, the management has carried out detailed assessment of deferred tax on temporary
differences that are expected to reverse during the period in which the Company would be under the new tax
regime and accordingly applied the new income tax rate of 25.168% as compared to the existing income tax
rate of 34.944% for measuring the said deferred tax in accordance with the requirements of Ind AS 12 - 'Income
Taxes'. This has resulted in reversal of deferred tax liabilities by C 637.09 Crore during the previous year.

(3) Unrecognised deferred tax assets

There is no MAT credit which is unrecognised as at March 31,2026 and March 31, 2025.

Management has made an assessment of the amount of taxable income that would be available in future
to offset the Accumulated MAT credit entitlement available to the Company.

The assessment of taxable income involved several key assumptions including expected demand, future
price of fuel, expected tariff rate for electricity, exchange rate and electricity market scenario, which the
management considered reasonable based on past trends, applicable tariff regulations / agreements and
current and likely future state of the industry.

Note 44: Revenue from Contracts with Customers

(a) Unbilled revenue

(1) Revenue from Power Supply also includes unbilled revenue towards FPPPA claims and other true up
adjustments which is recognised considering applicable tariff regulations / tariff orders, past trends of
approval and management's probability estimate.

The Company has not recognized those true up adjustment claims which are subject of dispute and for
which the Company is in appeal with regulatory authorities. These are recognised on receipt of final orders
of respective regulatory authorities.

Footnote:

1 The Gujarat Electricity Regulatory Commission (GERC) while carrying out tariff true up order for
FY 2018- 19, FY 2023-24 and FY 2024-25 for Company's license distribution business, has erroneously
considered accrued revenue of C 933.67 Crore (Previous year C 1,596.00 Crore) as realized revenue.
The Company has filed review petitions / appeals before GERC / APTEL (Appellate Tribunal for
Electricity) for FY 2018-19 and FY 2023-24 which are pending for disposal. The Company is in process
of filing the review petitions with GERC for FY 2024-25. The management of the Company believes it
has a strong case and does not expect any significant reversal of revenue.

(b) Contribution received from consumers

(1) Nature of contribution received from consumers

Contributions received from consumers towards property, plant and equipment has been recognised as
deferred revenue over its useful life.

The Company has evaluated the impact of Supreme Court ("SC") judgement dated February 28, 2019
in the case of Regional Provident Fund Commissioner (II) West Bengal v/s Vivekananda Vidyamandir and
Others, in relation to exclusion of certain allowances from the definition of "basic wages” of the relevant
employees for the purposes of determining contribution to Provident Fund ("PF”) under the Employees'
Provident Fund & Miscellaneous Provisions Act, 1952. There are interpretation issues relating to the
said SC judgement. Based on such evaluation, management has concluded that effect of the aforesaid
judgement on the Company is not material and accordingly, no provision has been made in the Standalone
financial statements.

# The Company has received demand order dated March 27, 2026 from Office of Additional Commissioner,
Agra-Lucknow, CBIC (Central Board of Indirect Taxes and Customs) demanding C 189.42 Crore (including
penalty of C 94.71 Crores) under Goods and Services Tax (GST) for the period from April 2019 to
September 2024 in relation to GST on rent on electricity distribution transformers and on incidental and
ancillary services.

In relation to GST on rent on the said transformers, based on accounting carried out by Agra Nagar Nigam
(ANN) for rent receivable on transformers from the Company, demand has been raised by the department,
however no invoices has been raised by ANN on the Company. Subsequently Company has received letter
dated March 31,2026 issued by Under Secretary, UP government to ANN confirming that rent shall not be
applicable on transformers installed by the Company for the electricity distribution. In response to this,
Company has received letter dated May 04, 2026 issued by ANN to Under Secretary, UP Government
stating that they are in process of reversing the rent receivable from the Company.

In relation to GST on incidental and ancillary services, no tax is leviable on incidental and ancillary services
in course of transmission and distribution of electricity by the Company as clarified vide Notification No.
08/2024-Integrated Tax (Rate) dated October 08, 2024 read with Circular No. 236/30/2024-GST dated
October 11, 2024.

The Company has filled an application for rectification of mistake in final order under section 161 of the
Central/Uttar Pradesh Goods and Services Tax Act, 2017 before the additional commissioner of CGST &
CE, Agra on April 07, 2026. In view of this, no provision for GST liability has been made by the Company.

Note 45: Contingent liabilities and capital commitments (Contd.)

Footnotes:

1 Management believes that its position on the aforesaid direct and indirect tax demands and other
claims against the company will likely be upheld in the appellate process and accordingly no provision
has been made in the standalone financial statements for such demands.

2 In respect of the above, the expected outflow will be determined at the time of final resolution of the
dispute / matters.

No reimbursement is expected.

3 Break up of other claims as under

On February 16, 2026, the Torrent Power Limited (the "Company”) has entered into a Share Purchase Agreement
(SPA) with L&T Power Development Limited (L&TPDL), a wholly owned subsidiary of Larsen & Toubro Limited
(L&T) for purchase of 100% equity shares and Convertible instruments of Nabha Power Limited (NPL) from the
L&TPDL for a consideration of C 3,660.87 Crore subject to closing adjustments as set out in the SPA.

NPL is engaged in the business of Generation of Electricity via 2X700 MW coal based supercritical thermal
power plant with asset located in Punjab having 25 years long term Power Purchase Agreements (PPAs) with
Punjab State Power Corporation Limited.

Note 46: The Company has given loans to its subsidiary companies as under (Contd.)

Footnotes:

1 The Company has not given any loans or advances in the nature of loan to any firms / companies, in which
Directors are interested.

2 The above loans were given to the subsidiaries for their normal business activities.

The Company is engaged in the business of providing infrastructural facilities as per Section 186 (11) of the
Act. Accordingly, disclosure under Section 186 (4) of the Act, is not applicable to the Company.

(b) Details of Loans or Advances in the nature of loans are granted to promoters, Directors, KMPs and the related
parties (as defined under Companies Act, 2013), either severally or jointly with any other person, that are:

(a) repayable on demand; or

(b) without specifying any terms or period of repayment

(c) Except as detailed below during the year ended March 31, 2026 the Company has not advanced or loaned
or invested funds (either borrowed funds or share premium or kind of funds) to any other person or entity,
including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise)
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

During the previous year ended March 31,2025, the Company has not advanced or loaned or invested funds
(either borrowed funds or share premium or kind of funds) to any other person or entity, including foreign entities
(Intermediaries) with the understanding (whether recorded in writing or otherwise) 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

The Company has complied with the relevant provisions of the Companies Act, 2013 and is not violative of the
Prevention of Money-laundering Act, 2002.

During the year ended March 31,2026 and March 31,2025, 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.

(v) Lease asset of Shil, Mumbra and Kalwa (franchise area)

The Company has entered into a Distribution Franchise Agreement ("Agreement”) dated February 11,2019 with
Maharashtra State Electricity Distribution Company Limited ("MSEDCL') whereby as per the Agreement the
Company would distribute the electricity in the area of Shil, Mumbra and Kalwa in Thane District in Maharashtra
("Franchise area”) for 20 years (effective from March 01,2020).

As per the Agreement, the Company would purchase electricity from MSEDCL at the rate which would be
derived through mechanism as mentioned in the Agreement which is linked to the number of units purchased
and would distribute electricity to the Consumers at the tariff which has been approved by Maharashtra
Electricity Regulation Commission (MERC).

Further as per the Agreement, the Company has right to use existing assets of MSEDCL in the Franchise area
provided it shall perform all the obligations and accepts all liabilities of MSEDCL on behalf of distribution licensee
in Franchise area and MSEDCL shall not charge any rent for the use of such assets.

Considering the facts of the arrangement, the Company has the right to obtain substantially all of the economic
benefits from use of MSEDCL assets of the Franchise area and the right to direct the use of the said assets
for 20 years and accordingly it would meet the definition of Lease as per Ind AS 116. Further, for distribution
of electricity, the Company would purchase power from MSEDCL for which payment would be made as per
the franchise agreement which is linked to the number of units purchased. Accordingly the payments by the
Company to MSEDCL is variable in nature and there are no fixed payments in the form of minimum purchase
commitments, take or pay or any sort of fixed charges is required to be made.

Considering the entire payment made by the Company for this arrangement is variable in nature and there would
be no lease liability required to be recognised with a corresponding right of use assets on initial recognition
in accordance with Ind AS 116 and considering non-availability of relevant observable information for lease
payments, management estimates and cost benefit analysis, total consideration payable to MSEDCL towards
purchase of electricity has been shown as 'Electrical energy purchased' in the Financial Statements.

Note 49: Employee benefits plan

49.1 Defined contribution plan

The Company has defined contribution retirement benefit plans for its employees.

The Company's contributions to provident fund, pension scheme and employee state insurance scheme are
made to the relevant government authorities as per the prescribed rules and regulations. The Company's
superannuation scheme for qualifying employees is administered through its various superannuation trust
funds. The Company's contributions to the above defined contribution plans are recognised as employee
benefit expenses in the statement of profit and loss for the year in which they are due. The Company has no
further obligation in respect of such plans beyond the contributions made.

The Company's contribution to provident, pension, superannuation funds and to employees state insurance
scheme aggregating to C 50.12 Crore (Previous year - C 49.47 Crore) has been recognised in the statement of
profit and loss under the head employee benefits expense [Refer note 38].

49.2 Defined benefit plans

(a) Gratuity

The Company operates through various gratuity trust, a plan, covering all its employees. The benefit
payable is the greater of the amount calculated as per the New Labour codes / Payment of Gratuity Act,
1972 or the Company scheme applicable to the employee. The benefit vests upon completion of five
years of continuous service and once vested it is payable to employees on retirement or on termination
of employment. The gratuity benefits payable to the employees are based on the tenure of employee's
service and last drawn salary at the time of leaving. The employees do not contribute towards this plan
and the full cost of providing these benefits are met by the Company. In case of death while in service, the
gratuity is payable irrespective of vesting.

The Company makes annual contribution to the gratuity schemes administered by the Life Insurance
Corporation of India through its various Gratuity Trust Funds. The liability in respect of plan is determined
on the basis of an actuarial valuation. [Refer note 49.4].

(b) Risk exposure to defined benefit plans

The plans typically expose the Company to actuarial risks such as: asset volatility, interest rate risk,
longevity risk and salary risk as described below:

Asset volatility

The present value of the defined benefit plan liability is calculated using a discount rate which is determined
by reference to market yields at the end of the reporting period on Indian government securities; if the
return on plan asset is below this rate, it will create a plan deficit.

Interest risk

A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by
an increase in the return on the plan's debt investments.

Longevity risk

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

Salary risk

The present value of the defined benefit plan liability is calculated by reference to the future salaries of
plan participants. As such, an increase in the salary of the plan participants will increase the plan's liability.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit
obligation was carried out at March 31,2026. The present value of the defined benefit obligation, and the
related current service cost and past service cost, were measured using the projected unit credit method.

(f) Category wise plan assets

Contributions to fund the obligations under the gratuity plan are made to the Life Insurance Corporation
of India, who has invested the funds substantially in the government securities.

(g) Sensitivity analysis

Significant actuarial assumptions for the determination of the defined obligation are discount rate and
expected salary increase. The sensitivity analysis given 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 assumptions 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 recognised in the
balance sheet.

(h) The weighted average duration of the gratuity plan based on average future service is 16 years (Previous
year - 16 years).

(i) Expected contribution to the plan for the next annual reporting period is C 21.16 Crore (Previous year -
C 11.98 Crore).

(j) Cash flow projection from the fund

Projected benefits payable in future years from the date of reporting

49.3 Other long-term employee benefit obligations

The leave obligation covers the Company's liability for sick and earned leave. Under these compensated
absences plans, leave encashment is payable to all eligible employees on separation from the Company due
to death, retirement or resignation; at the rate of daily last drawn salary, multiplied by leave days accumulated as
at the end of relevant period. Refer notes 34 and 38 for the leave encashment provision / charge in the balance
sheet and statement of profit and loss.

494 Labour code

The Government of India has consolidated 29 existing labour legislations into a unified framework comprising
four labour codes viz the Code on Wages, 2019, the Code on Social Security, 2020, the Industrial Relations
Code, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020 (collectively referred
to as the 'Codes'). The Codes have been made effective from November 21, 2025. The Ministry of Labour
& Employment published draft Central Rules and FAQs to enable assessment of the financial impact due to
changes in regulations.

The incremental impact of these changes, assessed by the Company, on the basis of the information available,
consistent with the guidance provided by the Institute of Chartered Accountants of India, is not material in
the standalone financial statements of the Company for the year ended March 31,2026. Once Central / State
Rules are notified by the Government on all aspects of the Codes, the Company will evaluate impact, if any, on
the measurement of employee benefits and would provide appropriate accounting treatment.

Note 54: Operating segments

The chief operating decision maker (CODM) evaluates the Company's performance and applies the resources
to whole of the Company's business viz. "Generation, Renewables, Transmission and Distribution of Power". In
accordance with Ind AS - 108 "Operating Segments", the Company has disclosed the segment information in the
Consolidated financial statements and therefore no separate disclosure of segment information is given in the
standalone financial statement.

(a) Capital management

The Company manages its capital structure in a manner to ensure that it will be able to continue as a going
concern while optimising the return to stakeholders through the appropriate debt and equity balance.

The Company's capital structure is represented by equity (comprising equity shares, retained earnings and
other reserves as detailed in notes 24, 25) and debt (borrowings as detailed in note 26).

The Company's management reviews the capital structure of the Company on an annual basis. As part of this
review, the management considers the cost of capital and the risks associated with each class of capital. The
Company's plan is to ensure that the gearing ratio (debt equity ratio) is well within the limit of 21. No changes
were made in the objectives, policies or process for managing its capital during the year ended March 31,2026
and March 31, 2025The Company reviews its Dividend policy from time to time.

Footnotes:

1 Debt is defined as all long term debt outstanding [including unamortised expense (net of premium)]
contingent liability pertaining to corporate / financial guarantee given (to the extent utilised) short term
debt outstanding in lieu of long term debt.

2 Total equity is defined as equity share capital all reserve (excluding revaluation reserve) deferred tax
liabilities - deferred tax assets - intangible assets - Intangible assets under development

Loan Covenants

The company has complied with financial covenants specified as per the terms of borrowing facilities.

Footnotes:

1 The carrying amounts of trade receivables, trade payables, capital creditors, cash and cash equivalents,
other financial assets and other financial liabilities are considered to be the same as their fair values, due
to their short-term nature.

2 Non current loan carries the interest rates that are variable in nature and hence carrying value is considered
as same as fair value.

(c) Fair value measurement

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are

either observable or unobservable and consists of the following three levels:

Level 1: Inputs are Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

This includes investments in mutual funds that have quoted price.

Level 2: Valuation techniques for which the lowest level input that is significant to the fair value

measurement is directly or indirectly observable. This includes unquoted floating and fixed rate
borrowing and Investment property.

Level 3: Valuation techniques for which the lowest level input that is significant to the fair value

measurement is unobservable. This includes unquoted equity shares, loans, security deposits,
investments in perpetual debt, floating rate borrowings.

(d) Financial risk management objectives

The Company's principal financial liabilities comprise borrowings, employee payables, security deposits from
consumers, trade and other payables. The main purpose of these financial liabilities is to finance the Company's
operations and projects capital expenditure. The Company's principal financial assets include loans, advances,
trade and other receivables and cash and cash equivalents that derive directly from its operations.

The Company's activities expose it to a variety of financial risks viz foreign currency risk, commodity price risk,
interest rate risk, credit risk, liquidity risk etc. The Company's primary focus is to foresee the unpredictability of
financial markets and seek to minimize potential adverse effects on its financial performance. The Company's
senior management oversees the management of these risks. It advises on financial risks and the appropriate
financial risk governance framework for the Company.

Foreign currency risk

The Company is exposed to foreign currency risks arising from various currency exposures, primarily with
respect to the USD and EURO. Foreign currency risks arise from future commercial transactions and recognized
assets and liabilities, when they are denominated in a currency other than Indian Rupee.

The Company's exposure with regards to foreign currency risk which are not hedged are given below.

Unhedged foreign currency exposures:

Commodity price risk

The commodity exposure is mainly on account of fuel, a substantial part of which is a pass through cost and
hence the commodity price exposure is not likely to have a material financial impact on the Company.

The Company purchases natural gas for use in Power Generation at its gas based power plants and for
trading. The pricing of natural gas can be fixed or linked to international benchmark such as Dated Brent. The
extant tariff regulations do not permit the cost of hedging such exposure as a cost to be passed through to
the long term off-takers / beneficiaries. As a result, the Company does not follow a policy of hedging such
exposures and actual rupee costs of import of fuel are substantially passed on to the long term off-takers /
consumers, because of which such commodity price exposure is not likely to have a material financial impact
on the Company.

Derivatives

The Company uses derivative financial instruments such as commodity price swaps contract, foreign exchange
forwards to hedge its risks associated with price risk movements. Risks associated with fluctuation in the price
of the natural gas are minimized by undertaking appropriate derivative instruments. The fair values of all such
derivative financial instruments are recognized as assets or liabilities at the balance sheet date.

Cashflow hedge that qualify for hedge accounting

The future purchases of natural gas for trading are subject to market price risk, which the company hedges
using suitable hedging strategy as per approved Commodity Price Risk Management Policy with critical terms
matching the terms of the forecast purchase.

Brent crude oil is a separately identifiable component of the forecast purchase because it is explicitly specified
in the supply contract price. As there is a market for Brent crude oil price swaps, the exposure is considered
to be reliably measurable. Accordingly, the Brent crude oil price swaps are designated as cash flow hedges of
the forecast purchases of fuel. Historically, the Brent crude oil component has accounted for 82% to 85% of
the cost of fuel supplied.

Hedge Ineffectiveness

Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic
prospective effectiveness assessments to ensure that an economic relationship exists between the
hedged item and the hedging instrument.

For hedges of commodity price risk, the company enters into hedge relationships where the critical terms
of the hedging instrument match exactly with the terms of the hedged item. The company therefore
performs a qualitative assessment of effectiveness. If changes in circumstances affect the terms of the
hedged item such that the critical terms no longer match exactly with the critical terms of the hedging
instrument, the company uses the hypothetical derivative method to assess effectiveness.

The Company enters into commodity Price swaps that have similar critical terms as the hedged item, such
as benchmark rate, payment dates, maturities and notional amount. The company does not hedge 100% of
its forecast transactions, and so the hedged item is identified as a proportion of the forecase transactions
up to the notional amount of the swaps. Since all critical terms matched during the year, there is economic
relationship between hedging instrument and hedged item.

The Company uses hypothetical derivative method to assess effectiveness based on "lower off”
assessment. It compares the change in the fair value or cash flows of the hedging instrument with the
change in the fair value or cash flows of a hypothetical derivative that models the hedged risk. Sources of
Hedge ineffectiveness for commodity price risk are Critical terms mismatch, Credit Risk adjustment.

Interest rate risk

The Company's borrowings are on fixed and floating rate of interest. The Company has exposure to interest
rate risk, arising principally on changes in Marginal Cost of Funds based Lending Rate (MCLR). The Company
uses a mix of interest rate sensitive financial instruments to manage the liquidity and fund requirements for its
day to day operations like non-convertible debentures and short term credit lines besides internal accruals.

The following table provides a break-up of the Company's fixed and floating rate borrowings:

Interest rate risk sensitivity:

The below mentioned sensitivity analysis is based on the exposure to interest rates for floating rate borrowings.
For this it is assumed that the amount of the floating rate liability outstanding at the end of the reporting period
was outstanding for the whole year If interest rates had been 50 basis points higher or lower, other variables
being held constant, following is the impact on profit before tax.

Credit risk
Trade receivables:

(1) Exposures to credit risk

The Company is exposed to the counterparty credit risk arising from the possibility that counterparties
might fail to comply with contractual obligations. This exposure may arise with regard to unsettled amounts.

(2) Credit risk management

Credit risk is managed and limited in accordance with the type of transaction and the creditworthiness of
the counterparty. The Company has established criteria for admission, approval systems, authorisation
levels, exposure measurement methodologies, etc. The concentration of credit risk is limited due to the fact
that the customer base is large. None of the customers accounted for more than 10% of the receivables
and revenue for the year ended March 31, 2026 and March 31,2025. The Company is dependent on the
domestic market for its business and revenues.

The Company's credit policies and practices with respect to distribution areas are designed to limit
credit exposure by collecting security deposits prior to providing utility services or after utility service
has commenced according to applicable regulatory requirements. In respect to generation business,
Company generally has letter of credits / bank guarantees to limit its credit exposure.

(3) Other credit enhancements

The Company collects the security deposits in the form of Cash or Bank guarantee, considering the
relevant electricity regulations under the relevant geographical area to cover its credit risks associated
with its trade receivables.

(4) Age of receivables and expected credit loss

The Company has used a practical expedient by computing the expected credit loss allowance for trade
receivables. The expected credit loss allowance is based on ageing of the days the receivables are due.
Trade receivable balances mainly comprise of outstanding from consumers wherein the credit period
provided to such consumers is less than 30 days. Based on the historical trend the same is collected well
within the credit period.

The Company segments the receivables for the purpose of determining historical loss rate based on shared
risk characteristics i.e. Government Consumers / Non Government consumers, Status of Consumers i.e.
Live consumers / Disconnected consumers and Security deposits provided by the Consumer Considering
the nature of the business, the historical loss rate is not significant.

The ageing of receivables and allowance for doubtful debt at the end of the reporting period is as follows:

Other financial assets/instruments:

The Company is having balances in cash and cash equivalents, term deposits with banks, Loans to
subsidiaries, investments in government securities and investment in mutual funds. The Company is having
balances in cash and cash equivalents, term deposits with scheduled banks with high credit rating and
hence perceive low credit risk of default. With respect to investments, the Company limits its exposure to
credit risk by investing in liquid securities with counterparties depending on their Composite Performance
Rankings (CPR) published by CRISIL. The Company's investment policy lays down guidelines with respect to
exposure per counterparty, rating, processes in terms of control and continuous monitoring. The Company
therefore considers credit risks on such investments to be negligible. The credit loss from Loans receivable
from related parties and financial guarantees is considered immaterial. The recoverable amount of unbilled
revenue (including revenue gap/surplus) perceives low credit risk of default considering applicable tariff
regulations / tariff orders, management's probability estimate and the past trends of approval.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated
with its financial liabilities that are required to be settled by delivering the cash or another financial asset.
The Company manages liquidity risk by maintaining adequate reserves, banking facilities and unused
borrowing facilities, by continuously monitoring projected / actual cash flows.

Maturities of financial liabilities:

The Company's remaining contractual maturity for its financial liabilities with agreed repayment periods
is given below. The tables have been drawn up based on the undiscounted cash flows of financial liabilities
based on the earliest date on which the Company can be required to pay. The tables include both interest
and principal cash flows. The contractual maturity is based on the earliest date on which the Company
may be required to pay.

The amount included in Note 45(A)(2)(a) to (d) for financial guarantee contracts are the maximum amounts
the Company could be forced to settle under respective arrangements for the full guaranteed amount
if that amount is claimed by the counterparty to the guarantee. Based on expectations at the end of the
reporting period, the Company considers that it is more likely than not that such amount will not be payable
under the arrangement.

Note 58: Provision for onerous contracts

The Company has a outstanding provision of C 24.98 Crore as at March 31, 2026 (March 31,2025 - C 24.98 Crore)
in respect of certain onerous contracts towards potential damages and other project related costs, arising from
expected delays or failure to set up certain wind power generation capacities, awarded to the Company in a prior
period under a competitive bidding process. During the previous year, the Company had received claim of C 30.73
Crore against outstanding provision of C 24.98 Crore. Accordingly C 5.75 Crore has been shown as 'Other claims'
[Refer Note 45]. The Company has filed a petition before CERC and the expected outflow of the outstanding
provision will be determined at the time of resolution of the matter

Note 59: Government grant

(a) Nature of government grant

Ministry of Power, Government of India (GoI), had introduced the Accelerated Power Development & Reforms
Programme (APDRP) to achieve reduction in Aggregate Technical & Commercial losses, to strengthen the
Transmission & Distribution network and to ensure reliable and quality power supply with adequate consumer
satisfaction. The projects approved for financing under the programme are eligible for a grant and soft loan
each equivalent to 25% of the project cost from the GoI. The Balance 50% was required to be funded by the
Company. There are no unfulfilled conditions or other contingencies attached to these grants.

Note 60: Scheme of Arrangement

During the previous year the National Company Law Tribunal (NCLT) vide its Order dated January 27, 2025,
subsequently modified vide order dated February 18, 2025 (received on March 07, 2025), has sanctioned the Scheme
of Arrangement ("Scheme”) for transfer and vesting of "the Renewable Power Undertakings” (RPU) (comprises of
316.60 MW of solar and wind power) of the Company to Torrent Green Energy Private Limited (TGEPL), a wholly
owned subsidiary (incorporated w.e.f. August 02, 2023) of the Company, on a going concern basis by way of slump
sale with effect from the appointed date i.e. April 01,2024 under sections 230 to 232 and other applicable provisions
of the Companies Act, 2013. The certified copy of the said order has been filed with Registrar of Companies on April
01,2025 (""Effective Date'') and the Scheme is legally effective from April 01,2024 (""Appointed Date""). Accordingly,
the effect of the Scheme has been given in the financial statements for the year ended March 31,2025 with effect
from the Appointed Date instead of Effective date, the date on which the control is transferred by Company, as
required under Ind AS 110. Further as per Guidance note issued by Institute of Chartered Accountants of India (ICAI),
where a law requires a different treatment, accounting standards are considered to be overruled to that extent.

The RPU has been transferred under the Scheme for a lump sum consideration of C 880.12 Crore based on the
report of independent valuer, adjusted for working capital adjustments as per the Scheme. There is no gain on
such transfer as per said scheme.

Note 68: Registration of charges

There are no charges or satisfactions which are yet to be registered with the Registrar of Companies beyond the
statutory period for year ended March 31, 2026 and March 31,2025.

Note 69: Audit Trail in Accounting Software

The Company has been using SAP ERP as a book of accounts. SAP audit logging has been enabled from the beginning
of the year and captures all the changes made in the audit log as per SAP note no 3042258 version 7 dated March
06, 2024.

Due to standard database functionality of HANA DB, while changes made are logged in the database, it does not
capture "old value” of changes made upto March 02, 2026. The Management has deployed a specific program on
March 03, 2026 to meet the requirement and now the system enhancement captures "Old value” of changes made.
In addition, as a part of privileged access management (PAM), Company has implemented ARCON make PAM suite.
This PAM system provides access based on workflow-based need/approval along with the video recording of all
activities carried out by privileged user This is a secondary control implemented to mitigate the risk associated
with Privileged users.

Note 70: Bhiwandi Area Franchise Agreement

Application for renewal of the Bhiwandi Distribution Franchisee Agreement, which is expiring in January 2027, has
been submitted to Maharashtra State Electricity Distribution Company Limited (MSEDCL) and it is under review
at MSEDCL. Accordingly, no adjustments are required to be made in the standalone financial statement for year
ended March 31,2026.

Note 71: Refund of Income taxes

During the previous year, the Company had received the Income tax refunds (including interest) of C 71.28 Crore,
C 200.83 Crore and C 146.93 Crore pertaining to FY 2011-12, FY 2019-20 and FY 2021-22 respectively. In accordance
with the Gujarat Electricity Regulatory Commission (Multi-Year Tariff) Regulations, 2016 (the 'Tariff regulations')
with respect to claim on Tax on Income, the Company had recovered from the consumers pro-rate income tax
based on profit of regulatory generating and distribution units (namely Ahmedabad Generation, Ahmedabad
Distribution, Surat Distribution and Dahej Distribution) calculated based on the actual income taxes paid in the
respective financial year

The management of the Company has calculated the refund of income tax received, required to be passed on to
the consumers considering the revised profit before taxes i.e., after taking adjustment pertaining to the matter
for which the refunds have been received amounting to C 38.47 Crore, which have been recorded into the books of
accounts of the Company for the year ending March 31,2025.

Note 72: Electricity Distribution (Accounts and Additional Disclosure) Rules, 2025

The Ministry of Power notified Electricity Distribution (Accounts and Additional Disclosure) Rules, 2024 ('the Rules')
in pursuance of Section 176(1) and 176(2)(z) of the Electricity Act, 2003 read with second proviso to Section 129
(1) of the Companies Act, 2013, which were applicable to Distribution Licensees and effective from the date of
notification in the Official Gazette i.e. October 24, 2024. The impact of the said circular on the financial statement for
the year ended March 31,2025 was not material. Further, as per proviso to rule 6(2) of the said Rules, the Company
had published the Additional Disclosure Statements in Integrated Annual Report FY 2024-25, as permitted during
the first year of implementation.

Subsequently, on September 25, 2025, the Ministry of Power has notified the Electricity Distribution (Accounts
and Additional Disclosure) Rules, 2025 which are effective from April 1,2026 and also superseded the Rules 2024.
Consequently, no Additional Disclosure Statements have been made for FY 2025-26.

Note 73: Additional regulatory information required by Schedule III

(a) Compliance with number of layers of companies

The Company is in compliance with number of layers of companies in accordance with clause 87 of Section 2
of the Act read with the Companies (Restriction on number of Layers) Rules, 2017 during the year ended
March 31,2026 and March 31,2025.

(b) Details of crypto currency or virtual currency

The Company has not invested or traded in Crypto Currency or Virtual Currency during the year ended
March 31,2026 and March 31,2025.

(c) Details of benami property held

No proceedings have been initiated on or are pending against the Company for holding benami property
under the Prohibition of Benami Property Transactions Act, 1988 (as amended in 2016) (formerly the Benami
Transactions (Prohibition) Act, 1988 (45 of 1988)) and Rules made thereunder during the year ended
March 31,2026 and March 31,2025.

(d) Wilful defaulter

The Company has not been declared Wilful Defaulter by any bank or financial institution or government or any
government authority during the year ended March 31,2026 and March 31,2025.

(e) Undisclosed income

During the year ended March 31,2026 and March 31,2025, the Company has not surrendered or disclosed as
income any transactions not recorded in the books of accounts in the course of tax assessments under the
Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).