i. Provisions, contingent liabilities
and contingent assets

A provision is recognised if, as a result of a
past event, the Company has a present legal or
constructive obligation that can be estimated
reliably, and it is probable that an outflow of
economic benefits will be required to settle the
obligation. Provisions are determined by discounting
the expected future cash flows (representing
the best estimate of the expenditure required to
settle the present obligation at the balance sheet
date) at a pre-tax rate that reflects current market
assessments of the time value of money and the
risks specific to the liability. The unwinding of the
discount is recognised as finance cost. Expected
future operating losses are not provided for.

(i) Warranties

A provision for warranties is recognised when
the underlying products or services are sold. The
provision is based on technical evaluation, historical
warranty data and a weighting of all possible
outcomes by their associated probabilities.

(ii) Onerous contracts

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

Contingent liabilities are disclosed when there
is a possible obligation arising from past events,
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 Company or a present obligation that arises
from past events where it is either not probable that
an outflow of resources will be required to settle
the obligation or a reliable estimate of the amount
cannot be made. Contingent assets are neither
recognised nor disclosed in the financial statements.

j. Earnings per share

Basic earnings per share is computed by dividing
net profit or loss for the year attributable to equity
shareholders by the weighted average number of
shares outstanding during the year. Diluted earnings
per share amounts are computed after adjusting
the effects of all dilutive potential equity shares.

The number of shares used in computing diluted
earnings per share comprises the weighted average
number of shares considered for deriving basic
earnings per share, and also the weighted average
number of equity shares, which could have been
issued on the conversion of all dilutive potential
shares.

k. Revenue

The Company derives revenues primarily from sale
of transformers and related services (i.e. freight,
insurance and labour).

(a) Sale of goods

Revenue is recognised when a promise in a
customer contract (performance obligation) has
been satisfied by transferring control over the
promised goods to the customer. Control over a
promised good refers to the ability to direct the
use of, and obtain substantially all of the remaining
benefits from those goods. Control is usually
transferred upon shipment, delivery to, upon receipt
of goods by the customer, in accordance with the
individual delivery and acceptance terms agreed
with the customers. Revenue towards satisfaction of
a performance obligation is measured at the amount
of transaction price (net of variable consideration)
allocated to that performance obligation. The
transaction price is based on the consideration
expected to be received in exchange for goods,
excluding amounts collected on behalf of third
parties such as sales tax or other taxes directly
linked to sales. Revenue from sale of goods is
recorded net of allowances for estimated rebates,
cash discounts and estimates of return of goods, all
of which are established at the time of sale.

If a contract contains more than one performance
obligation, the transaction price is allocated to
each performance obligation based on their
relative standalone selling prices. In case of any
modification to the contract, the entity recognises
such modification as a separate contract if it

increases both the performance obligation and the
consideration due for such modification.

Arrangements with customers for sale of the goods
are either on a fixed firm price basis or variable on a
key material price change basis.

Amounts due in respect of price escalation
claims and / or variation in sale are recognised
as revenue only if the contract allows for such
claims or variations and / or there is evidence
that the customer has accepted it and it is highly
probable that a significant reversal in the amount of
cumulative revenue recognised will not occur.

Liquidated damages/penalties, warranties
and contingencies are provided for, based on
management’s assessment of the estimated liability,
as per the contractual terms and / or acceptance.

"Revenues in excess of invoicing are classified as
contract assets (i.e. unbilled revenue).

Consideration received before the transfer of
goods to the customers are presented as a contract
liability (i.e. advance from customers).^{1 2}

(b) Sale of services

Revenue from services is recognised as the
performance obligation is satisfied in accordance
with the terms of the relevant contract.

Disaggregation of revenue

The Company disaggregates revenue from
contracts with customers by the nature of sale
i.e. sale of transformers and sale of services and
type of contracts viz fixed price contract and
variable price contract. The Company believes that
this disaggregation best depicts how the nature,
amount, timing and uncertainty of revenues and
cash flows are affected by industry, market and
other economic factors. Refer Note 21.

have become credit-impaired subsequent to
initial recognition, interest income is calculated by
applying the effective interest rate to the amortised
cost of the financial asset. If the asset is no longer
credit-impaired, then the calculation of interest
income reverts to the gross basis.

m. Segment reporting

Operating segments are reported in a manner
consistent with the internal reporting provided to
the chief operating decision maker. The Company
is engaged into the business of manufacture and
sale of transformers and there are not more than
one reportable segment as envisaged by Indian
Accounting Standard 108 - Segment Reporting
(Ind AS-108).

n. Leases

The Company assesses whether a contract contains
a lease, at inception of a contract. A contract is, or
contains, a lease if the contract conveys the right
to control the use of an identified asset for a period
of time in exchange for consideration. To assess
whether a contract conveys the right to control the
use of an identified asset, the Company assesses
whether: (i) the contract involves the use of an
identified asset (ii) the Company has substantially
all of the economic benefits from use of the asset
through the period of the lease & (iii) the Company
has the right to direct the use of the asset.

The Company recognises right-of-use asset (ROU)
representing its right to use the underlying asset
for the lease term at the lease commencement
date. The cost of the right-of-use asset measured
at inception shall comprise of the amount of the
initial measurement of the lease liability adjusted
for any lease payments made at or before the
commencement date less any lease incentives
received, plus any initial direct costs incurred and
an estimate of costs to be incurred by the lessee
in dismantling and removing the underlying asset
or restoring the underlying asset or site on which it
is located. The right-of-use assets is subsequently
measured at cost less any accumulated
depreciation, accumulated impairment losses, if any
and adjusted for any remeasurement of the lease
liability. The right-of-use assets is depreciated using
the straight-line method from the commencement
date over the shorter of lease term or useful life
of right-of-use asset. The estimated useful lives of
right-of-use assets are determined on the same
basis as those of property, plant and equipment.
Right-of-use assets are tested for impairment
whenever there is any indication that their carrying
amounts may not be recoverable. Impairment loss, if
any, is recognised in the statement of profit & loss.

The Company measures the lease liability at the
present value of the lease payments that are not
paid at the commencement date of the lease.

The lease payments are discounted using the
interest rate implicit in the lease, if that rate can
be readily determined. If that rate cannot be
readily determined, the Company uses incremental
borrowing rate. The lease payments shall include
fixed payments, variable lease payments, residual
value guarantees, exercise price of a purchase
option where the Company is reasonably certain to
exercise that option and payments of penalties for
terminating the lease, if the lease term reflects the
lessee exercising an option to terminate the lease.

The lease liability is subsequently remeasured by
increasing the carrying amount to reflect interest on
the lease liability, reducing the carrying amount to
reflect the lease payments made and remeasuring
the carrying amount to reflect any reassessment
or lease modifications or to reflect revised in¬
substance fixed lease payments. The company
recognises the amount of the re-measurement of
lease liability due to modification as an adjustment
to the right-of-use asset and statement of profit and
loss depending upon the nature of modification.
Where the carrying amount of the right-of-use asset
is reduced to zero and there is a further reduction in
the measurement of the lease liability, the Company
recognises any remaining amount of the re¬
measurement in statement of profit and loss.

The Company has elected not to apply the
requirements of Ind AS 116 Leases to short-term
leases of all assets that have a lease term of 12
months or less and leases for which the underlying
asset is of low value. The lease payments associated
with these leases are recognized as an expense on a
straight-line basis over the lease term.

o. Income tax

Income tax comprises current and deferred tax. It is
recognised in profit or loss except to the extent that
it relates to an item recognised directly in equity or
in other comprehensive income.

(i) Current tax

Current tax comprises the expected tax payable or
receivable on the taxable income or loss for the year
and any adjustment to the tax payable or receivable
in respect of previous years. The amount of current
tax reflects the best estimate of the tax amount
expected to be paid or received after considering
the uncertainty, if any, related to income taxes. It is
measured using tax rates (and tax laws) enacted or
substantively enacted by the reporting date.

Current tax assets and current tax liabilities are
offset only if there is a legally enforceable right to
set off the recognised amounts, and it is intended
to realise the asset and settle the liability on a net
basis or simultaneously.

(ii) Deferred tax

Deferred tax is recognised in respect of temporary
differences between the carrying amounts of assets
and liabilities for financial reporting purposes and
the corresponding amounts used for taxation
purposes.

Deferred tax is not recognised for temporary
differences arising on the initial recognition of
assets or liabilities in a transaction that is not a
business combination and that affects neither
accounting nor taxable profit or loss at the time of
the transaction.

Deferred tax assets are recognised to the extent
that it is probable that future taxable profits will
be available against which they can be used. The
existence of unused tax losses is strong evidence
that future taxable profit may not be available. The
Company recognises a deferred tax asset only to
the extent that it has sufficient taxable temporary
differences or there is convincing other evidence
that sufficient taxable profit will be available
against which such deferred tax asset can be
realised. Deferred tax assets - unrecognised or
recognised, are reviewed at each reporting date
and are recognised / reduced to the extent that it is
probable / no longer probable respectively that the
related tax benefit will be realised.

Deferred tax is measured at the tax rates that are
expected to apply to the period when the asset is
realised or the liability is settled, based on the laws
that have been enacted or substantively enacted by
the reporting date.

The measurement of deferred tax reflects the tax
consequences that would follow from the manner in
which the Company expects, at the reporting date,
to recover or settle the carrying amount of its assets
and liabilities.

Deferred tax assets and liabilities are offset if there
is a legally enforceable right to offset current tax
liabilities and assets, and they relate to income
taxes levied by the same tax authority on the same
taxable entity, or on different tax entities, but they
intend to settle current tax liabilities and assets on
a net basis or their tax assets and liabilities will be
realised simultaneously.

p. Cash and cash equivalents

For the purpose of presentation in the statement of cash flow, cash and cash equivalents includes cash on
hand, deposits held at call with the financial institution, other short-term highly liquid investments with original
maturities of three months or less that are readily convertible to known amounts of cash and which are subject
to an insignificant risk of changes in value, and bank overdrafts.

q. "Recent Accounting Pronouncements:

The Ministry of Corporate Affairs (‘MCA’) notifies new amendments to the existing standards under the
Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time. With effect from April
1, 2025, the MCA has notified amendments to (Ind AS 1, Presentation of Financial Statements), (Ind AS 7,
Statement of Cash Flows and Ind AS 107, Financial Instruments: Disclosures), (Ind AS 12 Income Taxes) and
(Ind AS 21, The Effects of Changes in Foreign Exchange Rates) amendments relating to Classification of
liabilities as current or non-current and non-current liabilities with Covenants and Disclosure of supplier finance
arrangements , temporary mandatory relief from accounting for deferred tax that arises from implementing
Pillar Two legislation, entity to estimate the spot exchange rate when it concludes that a currency is not
exchangeable into another currency. The Company has reviewed the new pronouncements and based on its
evaluation, has determined that the new pronouncement is not applicable to the Company.¹¹

c. Rights, preferences and restrictions attached to equity shares

The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to
dividends and share in the Company‘s residual assets. The equity shares are entitled to receive dividend as
declared from time to time. The voting rights of an equity shareholder in a poll (not on show of hands) are in
proportion to its share of the paid-up equity capital of the Company.

On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of
the company, remaining after distribution of all preferential amounts in proportion to the number of equity
shares held.

a. Securities premium

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

b. Capital reserve

Capital reserve represents the subvention (voluntary, non-repayable financial grant) of US$ 25 million (Rs.
14,912.50 lakhs) received from the Prolec GE Internacional, S de R.L de C.V., Mexico, the erstwhile holding
company.

c. General reserve

General reserve is the accumulation of retained earnings of the Company, apart from the statement of profit
and loss balance, which is utilised for meeting future obligations.

d. Retained earnings

Retained earnings represents surplus i.e., balance of the relevant column in the Statement of Changes in Equity

e. Other comprehensive income

Remeasurements of defined benefit liability comprises of actuarial gains / losses and return on plan assets
(excluding interest income).

(a) Provisions for employee benefits

For details about the related employee benefits expense, Refer note 25.

The Company operates the following post-employment defined benefit plans.

Gratuity: The Company has a defined benefit gratuity plan, governed by the Payment of Gratuity Act, 1972.

It entitles an employee, who has rendered at least five years of continuous service, to gratuity at the rate of
fifteen days wages for every completed year of service or part thereof in excess of six months, based on the
rate of wages last drawn by the employee concerned. The gratuity plan is a funded plan and the Company
makes contributions to a fund managed by the LIC. The Company does not fully fund the liability and
maintains a target level of funding to be maintained over a period of time based on estimations of expected
gratuity payments.

These defined benefit plans expose the Company to actuarial risks, such as longevity risk, interest rate risk
and market (investment) risk.

A. Funding

The gratuity plan is fully funded by the Company. The funding requirements are based on the gratuity fund’s
actuarial measurement framework set out in the funding policies of the plan. The funding of Plan is based on a
separate actuarial valuation for funding purposes for which the assumptions may differ from the assumptions
set out in (D). Employees do not contribute to the plan.

B. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- Credit risk (See B(ii))

- Liquidity risk (See B(iii)) and

- Market risk (See B(iv))

(i) Risk management framework

The Company’s Board of Directors has overall responsibility for the establishment and oversight of the
Company’s risk management framework. The Board of Directors along with the top management are responsible
for developing and monitoring the Company’s risk management policies.

The Company’s risk management policies are established to identify and analyse the risks faced by the
Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk
management policies and systems are reviewed regularly to reflect changes in market conditions and the
Company’s activities. The Company, through its training and management standards and procedures, aims to
maintain a disciplined and constructive control environment in which all employees understand their roles and
obligations.

The Company’s audit committee oversees how management monitors compliance with the Company’s risk
management policies and procedures, and reviews the adequacy of the risk management framework in relation
to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal
audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of
which are reported to the audit committee.

(ii) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails
to meet its contractual obligations, and arises principally from the Company’s trade receivables, deposits and
other financial assets.

The carrying amount of financial assets represents the maximum credit exposure.

Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the
creditworthiness of customers to which the Company grants credit terms in the normal course of business. The
Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred
losses in respect of the Company’s trade receivables and other financial assets.

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer.
However, management also considers the factors that may influence the credit risk of its customer base,
including the default risk associated with the industry and country in which customers operate. In monitoring
customer credit risk, customers are grouped according to their credit characteristics, including end-user
customers, industry, trading history with the Company and existence of previous financial difficulties.

Expected credit loss assessment for customers as at March 31, 2025 and March 31, 2026

The Company based on internal assessment which is driven by the historical experience / current facts available
in relation to default and delays in collection thereof uses an allowance matrix to measure the expected credit
loss of trade receivables. Exposures to customers outstanding at the end of each reporting period are reviewed
by the Company to determine incurred and expected credit losses.

The following table provides information about the exposure to credit risk and expected
credit loss for trade receivables;

(iii) Liquidity risk

Liquidity risk is 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 Company‘s approach to
managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when
they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to the Company’s reputation.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts
are gross and undiscounted, including contractual interest but excluding impact of netting agreements.

(iv) Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates and interest rates - will
affect the Company’s income or the value of its holdings of financial instruments. The Company is domiciled in
India and has its majority of revenues and other transactions in its functional currency i.e. Rs. Accordingly, the
Company is not exposed to any high currency risk.

Currency risk

The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which
sales and purchases are denominated and the functional currency. The currencies in which these transactions are
primarily denominated is USD.

Exposure to currency risk

The summary quantitative data about the Company‘s exposure to currency risk at the rate of 1% are as follows:

Sensitivity analysis

A reasonably possible strengthening (weakening) of the Rs. against US dollar as at March 31 would have affected
the measurement of financial instruments denominated in a foreign currency and affected equity and profit
or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates,
remain constant and ignores any impact of forecast sales and purchases.

(v) Interest rate risk

The Company is exposed to credit risk only on variable rate instruments i.e. term loans
Exposure to interest rate risk

The interest rate profile of the Company‘s interest-bearing financial instruments as reported to
management is as follows:

Cash flow sensitivity analysis for variable rate instruments

A reasonable possible change of 100 basis points (bp) in interest rates at the reporting date would have
increased (decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables,
in particular foreign currency exchange rates, remain constant.

(vi) Capital Management

The Company‘s policy is to maintain a strong capital base so as to maintain investor, creditor and market
confidence and to sustain future development of the business. It sets the amount of capital required on the basis
of annual business and long-term operating plans which include capital and other strategic investments.

32. The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated 26 August
2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its
customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance
with the Micro, Small and Medium Enterprise Development Act, 2006 (‘the Act’). Accordingly, the disclosure
in respect of the amounts payable to such enterprises as at March 31, 2026 has been made in the financial
statements based on information received and available with the Company.

37. Security details for Working Capital facilities and Term loans from Banks:

a) Name of the Bankers - State Bank of India, Bank of Baroda and IndusInd

(b) Primary Security:

(i) For Working Capital facilities

Hypothecation of entire stocks, receivables and entire current assets (both present and future).

(ii) For Term Loan

Hypothecation of Machinery/Equipments to be purchased out of the term loan for setting up of second
transformer testing facility.”

(c) Collateral Security:

(i) For working Capital facilities

- Equitable mortgage of factory land and building at Illuppapattu village in Kanchipuram
administering 30.04 acres

- Equitable mortgage of factory land and building at Thirumazhisai administering 2,65,062 sq ft

- Equitable mortgage of commercial plot at Pazhavoor village in Thirunelveli administering 3 acres

- Hypothecation of Windmill at Thirunelveli

- Lien on Fixed deposits Rs. 67 lakhs

- Hypothecation charge of entire plant & machinery of Indo-Tech Transformers Limited except the machinery
to be purchased out of SBI’s Term Loan belonging to M/s. Indo-Tech Transformers Limited on pari passu

first charge with Bank of Baroda(BOB) & Indus Ind Bank(IBL).

- Pledge of 30% of Equity shares of the Company held by the Holding Company.”

38. Other statutory information

(a) The Company has not traded or invested in crypto currency or virtual currency during the financial year.(a)

(b) The Company does not have not any 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).

(c) The Company has no transactions with struck off companies during the year.

(d) The Company has not advanced or loaned funds to any persons or entities, including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:

1. 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

2. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

(e) The Company has not received any fund from any persons or entities, including foreign entities with the
understanding that the Company shall:

1. 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

2. provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(f) The Company does not have any charges or satisfaction which is yet to be registered with Registrar of
Companies beyond the statutory period.

(g) There are no Loans or Advances in the nature of loans are granted to promoters, directors, KMPs & 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”

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

(i) The Company has not been declared as wilful defaulters by any bank or financial institution or government
or any government authority.

(j) There were no whistle blower complaints received by the company during the year

(k) The company has not revalued any of its Property, Plant and Equipment

40. On November 21, 2025, the Government of India notified the four Labour Codes - the Code on Wages, 2019,
the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and
Working Conditions Code, 2020 - consolidating 29 existing labour laws. The Ministry of Labour & Employment
published draft Central Rules and FAQs to enable assessment of the financial impact due to changes in
regulations. The Company has assessed and disclosed the incremental impact of these changes on the basis
of actuarial valuation obtained and the best information available, consistent with the guidance provided by
the Institute of Chartered Accountants of India. Basis the evaluation, the Company has provided the additional
liability of Rs.82.85 lakhs towards gratuity and Rs 7.90 lakhs towards leave encashment which has been charged
to the Statement of Profit and Loss. The Company continues to monitor the finalisation of Central / State Rules
and clarifications from the Government on other aspects of the Labour Code and would provide appropriate
accounting effect on the basis of such developments as needed.

41. The Company is in the process of reconciling the monthly returns filed under the Central Goods and

Services Tax Act, 2017 (“CGST Act”), The Integrated Goods And Services Tax Act, 2017 (“IGST Act”) and
Tamil Nadu Goods And Services Tax Act, 2017 (“TNGST Act”) with its books and records to file the annual
return for FY 2025-26. Adjustments, if any, consequent to the said reconciliation will be given effect to in
the financial statements on completion of reconciliation and filing of returns. However, in the opinion of the
Management, the impact of the same will not be material.

42 Audit trail

The Company has used BAAN ERP an accounting software till June 2025 and SAP S4 HANA from July
1, 2025 for maintaining its books of account, both of which has the feature of recording audit trail (edit
log) facility and the same has operated throughout the year for all relevant transactions recorded in the
accounting software. Further, the Company complies with the requirements of record retention as per the
existing laws.

43. Dividend

The company has neither declared dividend nor paid any during the year

44. Prior Year Comparatives

Previous year figures have been re-grouped/ re-classified, wherever necessary, to confirm to current year’s
classification and presentation”

1

Recognition of interest income or expense

Interest income or expense is recognised using the
effective interest method.

The ‘effective interest rate’ is the rate that exactly
discounts estimated future cash payments or
receipts through the expected life of the financial
instrument to:

- the gross carrying amount of the financial asset; or

2

- the amortised cost of the financial liability.

In calculating interest income and expense, the
effective interest rate is applied to the gross
carrying amount of the asset (when the asset is
not credit-impaired) or to the amortised cost of the
liability. However, for financial assets that